J.K. ASIEMA/R. KARIUKI
GPR 217 EQUITY AND TRUST LAW
JANUARY 2020
NOT FOR SALE
UNIVERSITY OF NAIROBI
SCHOOL OF LAW
GPR 217 EQUITY AND TRUST LAW
COURSE INSTRUCTORS: J.K. ASIEMA/R. KARIUKI
NATURE, HISTORICAL ORIGIN AND DEVELOPMENT OF
EQUITY IN ENGLAND
INTRODUCTION
Definition of Equity
According to Hanbury and Maudsley, Modern Equity (16th Edition, Sweet & Maxwell),
page 3:
“Equity is a word with many meanings. In a wide sense it means that which is fair, just,
moral and ethical; but its legal meaning is much narrower. Equity is the branch of law
which, before the Judicature Act of 1783 came into force, was applied and administered
by the Court of Chancery.”
The word “equity” is derived from the classical Latin word “aequitas”, which means
fairness or reasonableness. In its practical application, “aequitas” signified the following
of the spirit of the law, as opposed to the strict letter. It connoted reasonable modification
of the letter of the ordinary law.
Equity is also defined as:
“those principles of natural justice administered at first by the King-in-Council, and
later by the Chancellor, first as a member of that Council and afterwards as an
independent judge, to correct and supplement the common law.”
From the above, Equity therefore has two meanings:
1. Ordinary or popular meaning
2. Technical meaning
Ordinary Meaning
Equity in the ordinary sense is equivalent to natural justice, morality or fair play. For
example, before a person is pronounced guilty of an offence by a court of law, he must be
given a chance to defend himself. Equity in this sense means to do good.
1
, J.K. ASIEMA/R. KARIUKI
GPR 217 EQUITY AND TRUST LAW
JANUARY 2020
NOT FOR SALE
Technical Meaning
Equity in the technical sense refers to the body of rules or principles which are not and
are distinct from the common law. It is a body of rules or principles which form an
appendage to the general rules of law.
It is necessary to understand the distinction between common law and equity which gives
rise to the meaning that equity is that which is not the common law. Such a distinction
can only be obtained by examining the historical origin and development of equity in
England.
Historical Origin and Development of Equity in England
Before the evolution of equity, common law was the prevalent law in England. Common
law developed over the years through case law. It was administered in the old royal
courts by the King’s justices. There were three common law courts, namely, King’s
Bench, Common Pleas and Exchequer.
1. The Court of King’s Bench: This court takes its name from the original concept of the
monarch sitting with his judges “in banco”, that is “on the bench”. It dealt with both civil
and criminal cases in which the King had an interest.
2. The Court of Common Pleas: This court heard civil cases brought by one individual or
citizen against another.
3. The Court of Exchequer: This court’s principal jurisdiction dealt with cases involving
the royal revenue. Later it acquired jurisdiction in cases of debt between one citizen and
another citizen. It eventually took many cases of debt which should have been heard in
the Court of Common Pleas.
The common law was rigid because before a person could get redress for his grievance,
he had to be issued with a writ disclosing a cause of action. The King’s Chancellor issued
this writ. Being an ecclesiastic, the Chancellor was the “keeper of the King’s conscience”
and represented the “moral attitude” of the Crown.
Fetters to the Common law
The common law courts were fettered by precedent. In addition, a statute referred to as
the Provisions of Oxford of 1258 restrained the Chancellor from issuing new types of
writ on his own initiative. These fetters prevented the common law from developing fast
enough to do justice in all cases.
2
, J.K. ASIEMA/R. KARIUKI
GPR 217 EQUITY AND TRUST LAW
JANUARY 2020
NOT FOR SALE
Moreover, in the rough days of the 13th century, a plaintiff was often unable to obtain a
remedy in the common law courts even when he should have, owing to the strength of the
defendant, who would defy the court or intimidate the jury.
Petitions to the King
Due to the constraints of the common law, plaintiffs began to petition the King in
Council to exercise his extraordinary judicial powers on one of two grounds, either: (a)
that there was no remedy available; or (b) that there was a failure to administer the
available remedy. Thus, where the rigidity of the common law worked unfairly or
provided no remedy, an appeal was made to that higher justice called “equity”, which
resided in the King, as the “fountain of all justice.” The King’s residuary power permitted
him to temper the inflexibility of the ordinary law and to do justice according to reason,
good faith, good conscience and the current ideas of morality, when he was petitioned to
do so. Equity was therefore developed to mitigate the defects of ordinary law.
Establishment of the Court of Chancery
The practice of petitioning the King continued, giving rise to the establishment of a Court
of Chancery as an institution independent of the King and his Council. Equity may
therefore also be defined as “those principles of natural justice administered at first by the
King-in-Council, and later by the Chancellor, first as a member of that Council and
afterwards as an independent judge, to correct and supplement the common law.”
In the Middle Ages, the Chancellor’s jurisdiction was undefined. He exercised his powers
on the ground of conscience. In theory, conscience was based on universal and natural
justice rather than the personal opinion or conscience of the Chancellor. In practice,
however, the standards varied with each Chancellor, hence the phrase “Equity is as long
as the Chancellor’s foot.”
The Chancellor pronounced a remedy where the common law did not provide for one.
For example, the common law courts had no power to order specific performance or
grant an injunction. The Chancellor would also provide a remedy where a common law
rule produced substantial injustice in a particular case due to some unforeseen set of
facts. Justice required that the rule be amended or modified. If the rule could not be
amended or modified, justice required that there be a new rule to mitigate the harshness
and severity of the common law rule.
This new body of rules is what came to be known as equity. The rigidity and deficiency
of the common law led to the evolution of equity. In this sense, equity can be seen as
supplementing or filling in the gaps left by the common law.
Equity is distinguishable from the general body of law and from the common law, in
particular, not because it seeks to achieve a different end, since both equity and the
3
, J.K. ASIEMA/R. KARIUKI
GPR 217 EQUITY AND TRUST LAW
JANUARY 2020
NOT FOR SALE
common law seek to achieve justice. Rather, equity is distinguishable because it appears
at a later stage of legal development.
Systematization of Equity
With time, Chancellors began to apply the same principles in all cases instead of
following the inclination of the moment necessitated by circumstances under the notion
of conscience. The Court of Chancery also became more highly organized. More judicial
officers were appointed and a Court of Appeal in Chancery was established. What had
begun as an irregular process of petitioning the Crown in extraordinary circumstances
had become a regular system of courts with a recognized jurisdiction.
Rigidity of Equity
The systematization of the rules of equity in turn produced rigidity (“rigor aecquitatis”).
They became as fixed as those of the common law. One of the most famous Chancellors,
Lord Eldon (1801-1827) said the following in Gee v. Pritchard (1818) 2 Swans 402 at
414:
“The doctrines of this court ought to be as well settled, and made as uniform
almost as those of the common law, laying down fixed principles, but taking care
that they are to be applied according to the circumstances of each case. I cannot
agree that the doctrines of this court are to be changed with every succeeding
judge. Nothing would inflict on me greater pain, in quitting this place, than the
recollection that I had done anything to justify the reproach that the equity of this
court varies like the Chancellor’s foot.”
It must not therefore be assumed that every injustice was the subject of equitable
intervention. Initially, it was never certain when equity would apply since the
Chancellor’s powers were wide but vague. Eventually, the Chancellor had to rely on
well-settled principles of equity.
Per Jessel, M.R. in Re National Funds Assurance Co. (1878) 10 Ch.D 118 at 128:
“This is not, as I have often said, a Court of Conscience, but a Court of Law.”
According to the Court of Appeal in Re Diplock [1948] Ch. 465 at 481:
If the claim being made did exist,
“it must be shown to have an ancestry founded in history and in the practice and
precedents of the courts administering equity jurisdiction. It is not sufficient that
4
GPR 217 EQUITY AND TRUST LAW
JANUARY 2020
NOT FOR SALE
UNIVERSITY OF NAIROBI
SCHOOL OF LAW
GPR 217 EQUITY AND TRUST LAW
COURSE INSTRUCTORS: J.K. ASIEMA/R. KARIUKI
NATURE, HISTORICAL ORIGIN AND DEVELOPMENT OF
EQUITY IN ENGLAND
INTRODUCTION
Definition of Equity
According to Hanbury and Maudsley, Modern Equity (16th Edition, Sweet & Maxwell),
page 3:
“Equity is a word with many meanings. In a wide sense it means that which is fair, just,
moral and ethical; but its legal meaning is much narrower. Equity is the branch of law
which, before the Judicature Act of 1783 came into force, was applied and administered
by the Court of Chancery.”
The word “equity” is derived from the classical Latin word “aequitas”, which means
fairness or reasonableness. In its practical application, “aequitas” signified the following
of the spirit of the law, as opposed to the strict letter. It connoted reasonable modification
of the letter of the ordinary law.
Equity is also defined as:
“those principles of natural justice administered at first by the King-in-Council, and
later by the Chancellor, first as a member of that Council and afterwards as an
independent judge, to correct and supplement the common law.”
From the above, Equity therefore has two meanings:
1. Ordinary or popular meaning
2. Technical meaning
Ordinary Meaning
Equity in the ordinary sense is equivalent to natural justice, morality or fair play. For
example, before a person is pronounced guilty of an offence by a court of law, he must be
given a chance to defend himself. Equity in this sense means to do good.
1
, J.K. ASIEMA/R. KARIUKI
GPR 217 EQUITY AND TRUST LAW
JANUARY 2020
NOT FOR SALE
Technical Meaning
Equity in the technical sense refers to the body of rules or principles which are not and
are distinct from the common law. It is a body of rules or principles which form an
appendage to the general rules of law.
It is necessary to understand the distinction between common law and equity which gives
rise to the meaning that equity is that which is not the common law. Such a distinction
can only be obtained by examining the historical origin and development of equity in
England.
Historical Origin and Development of Equity in England
Before the evolution of equity, common law was the prevalent law in England. Common
law developed over the years through case law. It was administered in the old royal
courts by the King’s justices. There were three common law courts, namely, King’s
Bench, Common Pleas and Exchequer.
1. The Court of King’s Bench: This court takes its name from the original concept of the
monarch sitting with his judges “in banco”, that is “on the bench”. It dealt with both civil
and criminal cases in which the King had an interest.
2. The Court of Common Pleas: This court heard civil cases brought by one individual or
citizen against another.
3. The Court of Exchequer: This court’s principal jurisdiction dealt with cases involving
the royal revenue. Later it acquired jurisdiction in cases of debt between one citizen and
another citizen. It eventually took many cases of debt which should have been heard in
the Court of Common Pleas.
The common law was rigid because before a person could get redress for his grievance,
he had to be issued with a writ disclosing a cause of action. The King’s Chancellor issued
this writ. Being an ecclesiastic, the Chancellor was the “keeper of the King’s conscience”
and represented the “moral attitude” of the Crown.
Fetters to the Common law
The common law courts were fettered by precedent. In addition, a statute referred to as
the Provisions of Oxford of 1258 restrained the Chancellor from issuing new types of
writ on his own initiative. These fetters prevented the common law from developing fast
enough to do justice in all cases.
2
, J.K. ASIEMA/R. KARIUKI
GPR 217 EQUITY AND TRUST LAW
JANUARY 2020
NOT FOR SALE
Moreover, in the rough days of the 13th century, a plaintiff was often unable to obtain a
remedy in the common law courts even when he should have, owing to the strength of the
defendant, who would defy the court or intimidate the jury.
Petitions to the King
Due to the constraints of the common law, plaintiffs began to petition the King in
Council to exercise his extraordinary judicial powers on one of two grounds, either: (a)
that there was no remedy available; or (b) that there was a failure to administer the
available remedy. Thus, where the rigidity of the common law worked unfairly or
provided no remedy, an appeal was made to that higher justice called “equity”, which
resided in the King, as the “fountain of all justice.” The King’s residuary power permitted
him to temper the inflexibility of the ordinary law and to do justice according to reason,
good faith, good conscience and the current ideas of morality, when he was petitioned to
do so. Equity was therefore developed to mitigate the defects of ordinary law.
Establishment of the Court of Chancery
The practice of petitioning the King continued, giving rise to the establishment of a Court
of Chancery as an institution independent of the King and his Council. Equity may
therefore also be defined as “those principles of natural justice administered at first by the
King-in-Council, and later by the Chancellor, first as a member of that Council and
afterwards as an independent judge, to correct and supplement the common law.”
In the Middle Ages, the Chancellor’s jurisdiction was undefined. He exercised his powers
on the ground of conscience. In theory, conscience was based on universal and natural
justice rather than the personal opinion or conscience of the Chancellor. In practice,
however, the standards varied with each Chancellor, hence the phrase “Equity is as long
as the Chancellor’s foot.”
The Chancellor pronounced a remedy where the common law did not provide for one.
For example, the common law courts had no power to order specific performance or
grant an injunction. The Chancellor would also provide a remedy where a common law
rule produced substantial injustice in a particular case due to some unforeseen set of
facts. Justice required that the rule be amended or modified. If the rule could not be
amended or modified, justice required that there be a new rule to mitigate the harshness
and severity of the common law rule.
This new body of rules is what came to be known as equity. The rigidity and deficiency
of the common law led to the evolution of equity. In this sense, equity can be seen as
supplementing or filling in the gaps left by the common law.
Equity is distinguishable from the general body of law and from the common law, in
particular, not because it seeks to achieve a different end, since both equity and the
3
, J.K. ASIEMA/R. KARIUKI
GPR 217 EQUITY AND TRUST LAW
JANUARY 2020
NOT FOR SALE
common law seek to achieve justice. Rather, equity is distinguishable because it appears
at a later stage of legal development.
Systematization of Equity
With time, Chancellors began to apply the same principles in all cases instead of
following the inclination of the moment necessitated by circumstances under the notion
of conscience. The Court of Chancery also became more highly organized. More judicial
officers were appointed and a Court of Appeal in Chancery was established. What had
begun as an irregular process of petitioning the Crown in extraordinary circumstances
had become a regular system of courts with a recognized jurisdiction.
Rigidity of Equity
The systematization of the rules of equity in turn produced rigidity (“rigor aecquitatis”).
They became as fixed as those of the common law. One of the most famous Chancellors,
Lord Eldon (1801-1827) said the following in Gee v. Pritchard (1818) 2 Swans 402 at
414:
“The doctrines of this court ought to be as well settled, and made as uniform
almost as those of the common law, laying down fixed principles, but taking care
that they are to be applied according to the circumstances of each case. I cannot
agree that the doctrines of this court are to be changed with every succeeding
judge. Nothing would inflict on me greater pain, in quitting this place, than the
recollection that I had done anything to justify the reproach that the equity of this
court varies like the Chancellor’s foot.”
It must not therefore be assumed that every injustice was the subject of equitable
intervention. Initially, it was never certain when equity would apply since the
Chancellor’s powers were wide but vague. Eventually, the Chancellor had to rely on
well-settled principles of equity.
Per Jessel, M.R. in Re National Funds Assurance Co. (1878) 10 Ch.D 118 at 128:
“This is not, as I have often said, a Court of Conscience, but a Court of Law.”
According to the Court of Appeal in Re Diplock [1948] Ch. 465 at 481:
If the claim being made did exist,
“it must be shown to have an ancestry founded in history and in the practice and
precedents of the courts administering equity jurisdiction. It is not sufficient that
4
