UGANDA CHRISTIAN UNIVERSITY

FACULTY OF LAW

GIFT LUATE EMMANUEL

EQUITY AND TRUSTS

QUESTION:

Discuss the origin, rationale and nature of the following equitable remedies; specific
performance, injunction, rescission, rectification and tracing.

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Contents
Introduction ...................................................................................................................................... 1

SPECIFIC PERFORMANCE .......................................................................................................... 3

INJUNCTIONS ................................................................................................................................ 4

Nature of injunctions ........................................................................................................................ 5

RECTIFICATION. .......................................................................................................................... 6

RESCISSION ................................................................................................................................... 8

TRACING ........................................................................................................................................ 9

Conclusion ..................................................................................................................................... 10

Bibliography................................................................................................................................... 12

Introduction

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Equitable remedies are reliefs that / which evolved in the equitable jurisdiction. Unlike common
law remedies equitable remedies are directed at preventing or remedying the individual
unfairness. Therefore the law on equitable remedies is concerned with the means of redressing or
preventing infringement of rights. Before I look at the rationale and nature of the equitable
remedies, it is important to firstly establish the origin these remedies.

Under the common law, damages were the only form of relief available for a plaintiff who has
suffered an injury due the acts of the defendant. However due to the rigidities of the common
law, that is, the restricted jurisdiction and intricate and set forms of procedure in those courts, the
subjects were unable to obtain relief. Therefore the court of chancery developed gradually due the
rigidities of the common law courts to grant equitable remedies/ reliefs that the common law
courts did not grant. The Court of Chancery has been said to have its origin in the decree of
Edward III. After the creation of the courts of Common Law, there was still left in the King a
reserve power to hear petitions of his subjects who were unable to obtain relief due to the rigid
nature of the common law courts in form of appeals to the King which were termed matters of
grace. Appeals of this sort became so numerous; an order was made by the King referring all
these matters to the Chancellor, who was "Keeper of the King's Conscience”. During the reign
of Edward IV, however, the jurisdiction of the Chancery became firmly established1.

The granting of equitable remedies by the courts of equity for many years, however, met with the
bitterest opposition on the part of Judges of the courts of Common law especially during the reign
of Richard II, Henry IV., Henry V., and Henry VI. This opposition was felt particularly during
the reign of James I during the pendency of the famous "Earl of Oxford's Case", when, upon
the granting of an Injunction- by Lord Chancellor Ellesmere restraining an action which was
being tried before Lord Chief Justice Coke, a bitter contest arose between these two learned
jurists. On referral to the King and upon the advice of counsel decided in favour of Chancellor
Ellesmere, sustaining the jurisdiction of courts of chancery to grant equitable reliefs such
Injunctions in such cases. Therefore Courts of equity having become firmly established the
remedy equitable remedies were applied without great opposition in all cases where, in equity
and good conscience the parties were entitled to such relief, and where the Courts of Common
law were unable to grant adequate relief, subject of course, to certain rules of Court2. The
establishment of the Judicature Acts 1873-1875 therefore gave power to High Courts to
administer both equity and law concurrently.

1
George Franklin Bailey, Growth of Equitable Remedies of injunctions (1895)
2
Ibid n 1

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In Uganda, the jurisdiction of the courts to grant equitable remedies stems form the Order- In-
Council, 1902 and 1911, by which English law was received into Uganda. This is then
established under section 14(4) of the Judicature Act Cap 13 which states that, in every cause or
matter before the High Court, the rules of equity and the rules of common law shall be
administered concurrently; and if there is a conflict or variance between the rules of equity and
the rules of common law with reference to the same subject, the rules of equity shall prevail. This
gives the courts the power to administer concurrently and the rules of equity and common law as
was the case after the 1873-75 Judicature Acts.

Therefore, since I have established the origin of the equitable remedies, the following discussion
will be centred on the rationale and the nature of the respective equitable remedies in question.

SPECIFIC PERFORMANCE

Specific performance is an order of court compelling a party to a contract to perform his or her
obligations according to the terms of the contracts3. Under it, equity directs the party in default to
do the very thing which he or she has contracted to do. It is normally sought where one party
wants the contractual relationship to continue despite the other’s breach. For specific
performance to be granted, it must be clearly shown that the parties are ready, willing and able to
go ahead with the contractual obligations they undertook.

The rationale for the equitable remedy of specific performance is to provide a relief to a claimant
to a contract by compelling the other party to perform his or her obligations according to the
terms of the contract by which it would provide adequate remedy where common law damages
are inadequate to fully compensate him. Sir John Leach VC in Adderley v Dixon4 stated that
the remedy of specific performance was to provide a relief to the claimant where damages at law
may not in the particular case afford a complete remedy and so is meant to. The same is also
explained by Lord Hoffmann in Cooperative Insurance v Argyll5 that specific performance
been part of the discretionary jurisdiction of the court of Chancery was to do justice in case the
remedies available at common law were inadequate. Therefore this relief remedies a claimant in
case the injuries he suffers cannot be adequately compensated by damages at law. For instance in

3
Samantha Hepburn, Principles of Equity and Trust p. 195
4
(1824) 1 Sim & St 607
5
[1997] 3 ALL ER 297
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Nutbrown v Thornton6 a claimant contracted to purchase some machinery form the defendant.
The defendant in breach of contract refused to deliver the machines. The defendant was the only
manufacturer of this type of machinery. It was held that the claimant was entitled to a decree of
specific performance since damages would be inadequate to compensate him because he would
not be able to buy the machines elsewhere.

Like other equitable remedies, specific performance is discretionary in nature. This means that it
is granted at the discretion of court. The discretion to order specific performance by a court is
exercised in accordance with settled principles and it is not arbitrary.7

Specific performance acts in personam. A decree of specific performance is a personal remedy

enforceable against an individual defendant. It is issues against the individual personally to
prevent the unfairness flowing from non-compliance with contractual obligations. It acts in
personam because it is directing a particular individual to comply personally with contractual
obligations.

Specific performance requires no breach. It is an order made to require the performance of

contractual obligations in certain circumstances. Consequently, its nature does not rest on breach
of contract .e.g. a transgression of an obligation not to perform some act8.

INJUNCTIONS

An injunction is an order by court directed to a party to the effect that she/he do or refrain from
doing a particular act9. It is a court order issued to assist, clarify or determine legal proceedings 10.
Thus one leading authority put it: ‘’ A writ of injunction may be described as a judicial process
whereby a party was required to do particular thing or to refrain from doing a particular thing
according to the exigency of the writ’’11. The power to grant injunctions stems from the inherent
jurisdiction of the court of equity to grant equitable relief.

Injunctions may be variously classified. If the purpose of the classification is to distinguish

between injunctions which forbid and injunctions which command some positive act, they are
called prohibitory or mandatory respectively. If classified according to the point of trial at which

6
(1804) 10 Ves 159
7
Serunjogi v Katabira [1988-90] HCB 148
8 th
Alastair Hudson , Principles of Equity and Trust 6 ed p. 1066
9
DJ Bakibinga Equity and Trusts in Uganda
10
Samantha Hepburn, Principles of Equity and Trust,
11 rd
Meagher Gummow Lehane , Equity Doctrines and Remedies (1992 )3 ed p 531
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they are granted , they are classified as interim or interlocutory on the one hand (being limited in
their terms to last either until further order; or until the final hearing of the case; or until the final
hearing or further order), or final on the other hand. If the purpose is to distinguish those granted
against a defendant who has not been served from those granted against a defendant who has
been, they are called ex parte and inter partes injunctions respectively. Again, quia timet
injunctions being injunctions granted against apprehended or threatened wrongs which have not
yet been committed are often distinguished from injunctions directed against the continuance or
repetition of a wrong.12

The jurisdiction to grant an injunction in Uganda is governed by section 38 of the Judicature

Act, Cap. 13 which gives the High Court the power to grant an injunction to restrain any person
from doing any act which may be specified by the High Court. Similarly the Magistrates Courts
can grant injunctions based on their power to grant remedies or reliefs13.

Injunctions are frequently granted in the award of equitable relief to a plaintiff who is primarily
suing for some other equitable remedy. In Insurance v Assurantie Maatschappij, Lord
Brandon14 an injunction can be issued when equitable rights are invaded, or threatened to
invaded, and Where one party to an action has behaved, or threatens to behave, in a manner
which is unconscionable. Therefore the rationale of granting equitable injunctions is provide
relief to the plaintiff whenever some equitable right is vested in him which the defendant has
threatened to infringe, or which the defendant has already infringed and is either continuing to
infringe , or about to infringe repeatedly.15 In other words the equitable remedy of injunction is
granted to protect against any actual or continuing breach of equitable obligation. Injunctive relief
will only be available when there is no adequate remedy at law and the plaintiff’s rights have
been infringed.

Nature of injunctions

12
Ibid n 12 at 532
13
Section 33 of the Magistrates Courts Act, Cap. 16
14
[1987] AC 28
15
Bowen v Phillips [1897] 1 Ch 174
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Prohibitory nature. This nature of injunctions acts in restraint where an unlawful act is about to
be done. It prevents the other side from doing something. The prohibitory nature of injunction
seeks only to maintain the status quo pending a trial on the merits. In Schrier v. University of
Colorado16 it was held that an injunction characterized as mandatory if the requested relief
affirmatively requires the nonmovant to act in a particular way, and as a result places the issuing
court in a position where it may have to provide ongoing supervision to assure the nonmovant is
abiding by the injunction.

Mandatory nature. This nature of injunction directly orders the person to whom it is addressed
to do something. It is therefore positive in nature and alters the status quo “by commanding some
positive act or looks to force the other side to undertake some positive action.

The injunction is a discretionary remedy. Injunction is a discretionary remedy based on the

inadequacy of common law remedies.17It is at the discretion of the court to make an order to
either party to litigation, or by way of a final judgment, to take some action or to refrain from
some action.

The injunctions act in personam. Like specific performance, injunction is a remedy in

personam. It is a personal remedy and is directed towards an individually in default. It is wise to
note that it is possible to enjoin a defendant who is not within the jurisdiction, provided service
out of the jurisdiction can property be done under the civil procedure rules. However an
injunction may also be granted against an unnamed defendant or against all the members of a
class or organisation to restrain the unlawful acts of unidentified members18.

RECTIFICATION.

Rectification is a remedy whereby court amends the terms of a contract better to reflect the true
intentions of the contracting parties19. In other words court orders a change in a written document
to reflect what it ought to have said in the first place. In the case of Joscelyne vs. Nissen20, a
father agreed to let his daughter take over his car hire business on the condition that she would
take care of certain household expenses. However, due to a mistake, the written agreement did

16
427 F.3d 1253, 1261 (C.A. 10 (Colo.) 2005)
17 th
Hanbury & Martin, Modern Equity 9 ed p. 807
18
Ibid n 19 at p.808
19 th
Alastair Hudson, Equity and Trust 6 ed p. 1104
20
[1970] 2 QB 86
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not place these responsibilities on the daughter. The court ordered a rectification of the agreement
in order to make it reflect the true intention of the parties.

It is stated that in order for a party to obtain rectification of document he had to prove first, that
there existed a valid and enforceable antecedent agreements; secondly, the document to be
rectified was drawn up in pursuance of the antecedent agreement and thirdly, that its form did not
truly reflect the provisions of the antecedent agreement because of some common or mutual
mistake amongst the parties21.

The purpose or the rationale for rectification is not to set a contract aside, but rather to amend its
terms to reflect the real intention of the parties. In Lovell & Chrismas Ltd v Wall22 , Sir
Herbert Cozens-Hardy MR stated that, the essence of rectification is to bring the document
which was expressed and intended to be in pursuance of a prior agreement into harmony with that
prior agreement. Therefore the rationale for this equitable remedy is the protection of an applicant
so that he is not put at risk or prejudiced by the existence of a document reliance on which would,
without rectification, be unconscionable.23

On the nature of Rectification, like other equitable remedies it is discretionary. It is issued at the
discretion of court. Generally, rectification will be ordered provided that some substantive right
of the parties is at issue rather than a mere fiscal advantage which is sought by means of the
rectification. Rectification will not be ordered where there is some sufficient, alternative remedy
available, such as common law damages, or where the matter forming the subject matter of the
application could be dealt with by a simple correction of, for example, a clerical error 24. It should
be noted that rectification is the rectification of documents, not the reformulation of agreements
that are expressed in documents. Therefore upon examining the documents court uses its
discretion either order for rectification of not. This is explained by James V-C in McKenzie v
Coulson25 that “Courts of equity do not rectify contracts; they may and do rectify instruments
purporting to have been made in pursuance of the terms of contracts.” Therefore it is necessary
for a plaintiff asking for rectification to show that there is a concluded contract antecedent to the
instruments sought to be rectified.

21
ibid
22
(1911) 104 LT 85 at p. 88
23
www.thomsonreuters.com.au , Rectification, Nature of Remedy at p. 630
24
Ibid n 17
25
(1869) LR 8 Eq 368 at 375
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RESCISSION

Rescission is an equitable remedy used to set aside contracts and to restore the parties to the
positions which they had occupied previously26. Therefore upon the breach of a condition by one
party to a contract, the other party elects to treat it as no longer binding upon him27. The court, in
this case effectively releases the parties from any obligations regarding that contract, making it
unenforceable. In the case of Cooper vs. Phibbs28¸the court rescinded contract when it was
discovered that the mistaken party bought what already belonged to him

The rationale for rescission is to entitle each party to restitutio in integrum, which is restoration to
original condition29. This can be confirmed by Compton J in Clarke v Dickson30 , when he
stated that, ‘’when once it is settled that a contract induced by fraud is not void, but voidable at
the option of the party defrauded, it seems to me to follow that, when that party exercises his
option to rescind the contract, he must be in a state to rescind; that is , he must be in such a
situation as to be able to put the parties into their original state before the contract.....That is
founded on the plainest principle of justice...’’. Therefore the remedy of rescission is used in
order to set aside a contract entered into on the basis of a mistake, misrepresentation, fraud and
among others.

The important point to make about rescission is that it is nature it is an equitable remedy available
on application to a court of equity at the discretion of such court. If courts look at the merits of
the case and they take their discretion either to issue or not to this remedy. Court determines what
is required by way of “practical justice”. This requirement of practical justice is informed by the
maxim that “he who seeks equity must do equity”, and more generally, it is informed by equitable
principles and discretionary factors. The precise orders which should be made will always be
driven by the circumstances of the case, which circumstances include, not merely the nature of
the transaction and the position of the respective parties following the transaction, but also a
consideration of what was the wrong which gave rise to the right to rescission and what was its
consequence. Chancery administered this remedy in accordance with the maxim the above
maxim. It also followed the law and thus recognised the right of a party to rescind his contract for

26 th
Alastair Hudson, Equity and Trust 6 ed p. 1095
27
supra
28
(1867) LR 2 HL 149
29 rd
Meagher Gummow Lehane , Equity Doctrines and Remedies (1992 )3 ed p 654
30
(1858) E B & E 148 AT 154-5
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fraudulent misrepresentation or deceit and in so doing it required of him that he performed the
equity of restitution.

It is, however, clear that rescission applies only to contracts which are voidable. Equitable
rescission will only be granted where it is possible to return the parties to the position they were
in prior to the contract being entered into. This is because the effect of a rescission order is to set
aside the contract ab initio. Therefore it is granted only where the contract is voidable. In
Commercial Bank of Australia v Amadios31, Amadios were led to believe that they were
guaranteeing their son’s overdraft to a limit of $50,000. In granting relief the court relieved them
from the whole of their liability on the ground that they would not have entered into the
transaction at all had they known the true position. Where a contract is void ab initio, there is no
question of rescission on the basis that such a contract is taken never to have existed.

TRACING

Tracing is a right or claim available to a beneficiary of a trust or to anyone to whom a fiduciary

obligation is owed32 .It is simply the process of identifying property against which the claimant
may bring a claim. Lord Millet in distinguishing between ‘’following’’ and ‘’tracings’’ defined
tracing as the process of identifying a new asset as the substitute for the old33 although this may
be a narrower definition since it limits tracing to the common understanding. This is because
equitable tracing is by far the more extensive jurisdiction as e it entitles the claimant to rights not
only in property substituted for the original property taken in breach of trust, but also in mixtures
into which such property is passed which is distinct from common law tracing. A tracing claim
concerns the identification of property or value in which the claimant has some pre-existing
interest which the court is then asked to recognise. In other words, it is a pre-requisite of
equitable tracing, that there has been some pre-existing equitable or fiduciary relationship to
invoke the equitable jurisdiction. Hence, tracing is simply the process of allowing a primary
beneficiary to follow misused trust property through various subsequent owners in order to regain
it34. It is prudent to note that tracing is not a remedy but rather a process a prove of which court
then grants an appropriate remedy which may be an order for compensation, an order that the
property be restored by direct transfer to the original owner, or an order that the property be held

31
(1983) 151 CLR 447
32
Samantha Hepburn, Principles of Equity and Trust p. 235
33
Foskett v McKeown [2001] 1 AC 102
34
Re Diplock [1948] Ch 465
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on resulting trust or constructive trust, or be subject to a charge. 35 This is confirmed by Millett
LJ in Boscawen v Bajwa36 when he stated that tracing is not a remedy.

The rationale for the claim of tracing is to provide a relief to a beneficiary of misused to recover
misused trust property wherever it is capable of being traced, even where it has gone into the
hands of a third party, provided that third party is not a bona fide purchaser for value without
notice.37 It is to enable the owner of property to recover that property in the event that it is taken
from her involuntarily.

On the nature of Tracing, it depends upon the discretion of the court especially tracing under
detinue. Where an action in detinue is established, the court has discretion to order the return of
the chattel. An important consideration for the court in exercising this consideration will be
whether or not damages are inadequate38. Where damages are adequate to compensate the
claimant or the claim has no pre-existing equitable or fiduciary relationship, court will exercise its
discretion not to grant an order of tracing.

Tracing acts in rem. Unlike other equitable remedies such as specific performance and
injunctions , the right to "trace" property in equity is a right in rem in the sense that it allows the
plaintiff to assert his claim against particular property, in which he claims an equitable title, and
to appropriate that property, in whole or in part, to the satisfaction his claim. It is to be
distinguished from any right the plaintiff may have in personam against the defendant, where
judgement will impose a personal liability on the defendant, enforceable, so far as property is
concerned, against the defendant's property generally. The right to trace is gone once the res is
gone; a right in personam, on the other hand, survives the disappearance of any res which may
initially have founded the plaintiff's action.

Conclusion

Therefore in conclusion the equitable remedies owe their origin from the Chancery jurisdiction,
they directed at preventing or remedying the individual unfairness. Equitable remedies are
intrinsically discretionary in nature, they are directed at the individual rather than constituting a
generalized award except the relief of Tracing which is acts in rem. Just because an applicant can

35
Ibid n 28
36
[1995] 4 All ER 769
37
Ibid n 28 at p. 236-7
38
Ibid n 31 at p. 235
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prove a breach of an equitable obligation or principle does not necessarily mean that relief will be
granted: all will depend on the nature of the action and the individual determination of the course
as discussed in the essay above.

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 Bibliography

Alastair Hudson, Equity and Trust: 6th ed

Case law

DJ Bakibinga, Equity and Trusts in Uganda: 2nd ed

George Franklin Bailey, Growth of Equitable Remedies of injunctions (1895)

Hanbury & Martin, Modern Equity: 9th ed

Judicature Act Cap. 13

Magistrates Courts Act Cap. 16

Meagher Gummow Lehane, Equity Doctrines and Remedies

Samantha Hepburn, Principles of Equity and Trust: 2nd ed

www.thomsonreuters.com.au, Rectification, Nature of Remedy

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