The Doctrine of Laches, Kenyan Law on Equities and Trusts

By Margaret Muchoki Llb

Introduction

This doctrine is derived from the equitable maxim, delay defeats equity or what is otherwise referred to as equity aids the vigilant and not the indolent. This doctrine put in simple terms means that an equitable relief will not be given if the applicant has unduly delayed in bringing the action to court. It has generally been argued that this doctrine does not apply to situations which are governed by Statute of Limitation. In this paper I will look at the definition of this doctrine and constituting elements, the test and applicability of this doctrine, whether this doctrine is only applicable to equitable remedies or can also be applied in legal remedies, the relationship between this doctrine and statutes of limitations and finally the defences to this doctrine.

Definition and Constituting Elements of Doctrine of Laches

North J in Patridge v Patridge[1] gave the meaning of laches quoting Coke on Littleton as, “laches or lasches is an old French word for slackness or negligence or not doing. Further, the foundation of the applicability of this doctrine is laid down in the Halsbury’s Laws of England[2] which provides that a claimant in equity is bound to prosecute his claim without undue delay. As such a, a court of equity refuses its aid to stale demands, where the claimant has slept upon his right and acquiesced for a great length of time. He is then said to be barred by his unconscionable delay.

From the above provision it is evident that delay in instituting a claim is a key requirement to invoking this doctrine. However, mere delay in itself will not invoke the use of the doctrine of laches but rather the defendant must prove unconscionable delay. In assessing unconscionability, it is the claimant’s inaction that is assessed in the context of whether they should be awarded the equitable remedy sought.[3] As such, as set out by Laddie J in the case of Nelson v Rye[4] the court will consider first the period of delay,[5] second the extent to which the defendants position has been prejudiced by the delay[6] and lastly the extent to which that prejudice was caused by the claimant.[7] After considering the above, the court will then decide whether the balance of justice or injustice is in favour of granting the remedy or withholding it.[8]

In assessing delay the claimant’s knowledge is important and this is because in most cases time begins to run when the claimant becomes aware of his or her legal right.[9] As such, the claimant’s delay can only be considered once he has knowledge of his right and they fail to act on it. In light of this, the claimant must act promptly or the right to his equitable relief will be lost. This was the case in Allcard v Skinner[10] which is the foundation of the modern law of undue influence. In this case, Miss Allcard joined the Sisters of the poor in 1868. The rules of the sisterhood demanded total obedience and provided that sisters were to handover all their property to the Mother Superior, Miss Skinner. Until 1879 Miss Allcard remained a member of the sisterhood and handed over all the property which she recived during that period. In may 1879 she left the sisterhood and revoked her will in its favour. Later, in august 1885 she brought proceedings for the return of all gifts. The Court of Appeal by majority held that when she left the sisterhood in 1879 she was entitles to the return of her property on grounds of undue influence but the delay in bringing the proceedings until 1885 was fatal. This was especially bearing in mind that in 1880 her brother and her solicitor had told her that she might have a potential claim against the sisterhood. She however made a conscious decision to accept the validity of the gifts when free of the sisterhood influence although she had the choice to bring proceeding s for the return of the gifts at the same time she revoked her will yet she failed to. So since she had knowledge of her claim for the gifts yet she delayed in bringing it, the doctrine of laches applied.

Test and Applicability of Doctrine of Laches

The test for whether laches should be invoked in a particular situation is whether it would be unfair to disturb the status quo given the delay by the claimant in bringing his claim.[11] If the answer to this question is in the affirmative, then this doctrine will be applied. The classic statement of the law regarding laches was made by Lord Selborne in Lindsay Petroluem Company v Hurd[12] where he said:

“Now the doctrine of laches in courts of equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has by his conduct done that which might fairly be regarded as a waiver of his right, or if where by his conduct and neglect(even if he has not waived his right) he has put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these two cases the lapse of time and delay are most material.”

From the above statement it is evident that in considering the delay, the essential principle is that of practical injustice. As such, the court will refuse a remedy where it would be practically unjust to give one, either because through the claimant’s conduct he has waived the right to that remedy or if he has not waived his right his delay has nevertheless prejudiced the other party.

Applicability of the Doctrine of Laches to Remedies

Laches is and should be limited to equitable remedies and not legal remedies. As such it can knock out some if not all the requested equitable relief but the legal remedies remain available.[13]However, it is important to consider whether the traditional rule that laches is an equitable defense good only against equitable remedies is a valid argument. There are three justifications for applying it to equitable remedies and not legal remedies which are, first, equitable remedies are more vulnerable to changing circumstances, second ,they are more likely to be opportunistically abused and lastly that they impose greater costs on the parties and on the judicial system.[14]

Looking at the issue of vulnerability to changing circumstances, in looking at damages as a legal remedy, money is money and even if it is to be affected by inflation, the inflation can be considered in calculating damages. However, looking at accounting for profit as an equitable remedy, it becomes more difficult and error-prone as time recedes because it depends to an unusual degree on the survival of records.[15]Secondly, equitable remedies are more likely to be opportunistically abused as time passes as opposed to legal damages. The amount of damages to be awarded for example does not typically fluctuate based on the conduct of the party after the legal violation. On the other hand, the value of an injunction, specific performance or accounting for profits will vary based on actions of the parties in the future especially where the plaintiff wants to see whether the value of an asset goes up or down before suing.[16] Lastly, looking at the issue of equitable remedies imposing greater costs on the parties and on the judicial system this is supported by the cost incurred for the parties to comply and the cost of having the judges oversee the compliance.

Relationship between Equity and Statutory Limitation

In assessing the relationship between equity and statutory limitation the question has always been whether the presence of a statute of limitation displaces the doctrine of laches. As a general rule, the doctrine of laches does not apply where the law provides a limitation period. In such cases, the claimant has the full period provided for by the statute of limitation within which to begin proceedings. This argument is supported by the fact that Parliament by enacting a Statute of Limitation has exercised the powers bestowed upon it to legislate and as such it has put in place a period within which certain claims should be instituted in court. Therefore, if a court were to substitute this statutory period enacted by Parliament with its own equitable doctrine then that would amount to violation of separation of powers.[17]The argument therefore stands that this doctrine can therefore only be applied where the cause of action arises exclusively in equity and no statutory limitation period applies to the cause of action for example where the claimant seeks to set aside a transaction for undue influence.

There is however the argument that statutes of limitation do not actually displace the doctrine of laches and this argument was actually raised in the case of Petrella v Metro.[18] This was a case involving copyright infringement claims about the movie Raging Bull and the extent to which these claims were barred by the doctrine of laches. One of the key issues that was raised in this case was how the doctrine of laches was affected by the Statute of Limitations. Two arguments were raised in support of this issue one being the fact that it is displaced as argued above since Congress enacted a Statute of Limitation for copyright cases and the second one being that the doctrine of laches and statute of limitations can actually co-exist and this was based on the theory that congress legislates against the background of existence of traditional equitable principles. This is especially based where a right arises in common law but an equitable remedy is sought. In such instances, even where a statute of limitation provides for a time frame, the courts of equity will disregard the outlined time frame and be guided by the doctrine of laches.

This is illustrated by cases where the court has routinely applied laches to equitable claims and remedies not withstanding that one of the parties had invoked a statute of limitation. The law regarding applicability of laches where there was a provision in statute of limitation was clearly set out in Hume v Bealle’s Executrix[19] where the court said, “it is an established rule with courts of equity, independent of any statute limiting the time in which suits can be brought that they will not entertain stale demands.”In this case the court rejected a claim against trustees brought four decades after the alleged misappropriation because the complainant’s delay meant that they had disentitled themselves to the relief which they sought to obtain. The same position was reiterated in Speidel v Henria[20] where the court in reaching its decision stated, “Independently of any statute of limitation, courts of equity uniformly decline to assists a person who has slept upon his rights and shows no excuse for his laches in asserting them.”This was a case in which a person who had left a commune called the Harmony society sought a share of his property fifty years after having left the commune. The court held that the plaintiff showed so little vigilance and so great laches and as such was not entitled to relief despite him still having time under the statute of limitation.

It is therefore evident that the general rule that the doctrine of laches is defeated where there is a statute of limitation is not an absolute rule and there is a possibility of invoking laches as a defence before the expiry of the statutory limitation period.[21] Especially where a case involves equitable remedies being sought in rights arising out of common law. In such cases, even where a claimant still has time to launch his claim under a statute of limitation, if the court is convince that the plaintiff was not vigilant and delayed in instituting proceedings for their claim, the court will consider such to amount to stale demands and as such no relief will be granted.[22]

Conclusion

Seeing as equity came to remedy the injustices of common law such as delay in dispensing of justice, it is therefore crucial that the doctrine of laches is enforced even where there is a statutory limit provided for under a statute of limitation. This is especially based on the fact that it is trite law in equity that a claimant who seeks relief must do so promptly. It would be inequitable for a person to seek the active intervention of a court of equity yet such a person after getting notice or knowledge of their right slept on such a right and failed to act vigilantly. As such, if the courts were to do away with the doctrine of laches and allow a claimant that has slept on his right to have a claim then that would defeat equity’s very own aim which is to dispense justice in an equitable way.

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[1] Patridge v Patridge (1894) 1 Ch 351

[2] Halsbury’s Laws of England on Equity, 4^th Edition Volume 16(2) at 910

[3] Clare Stanley & Michael J. Ashdown, Trusts & Trustees, Laches and Limitation

[4] Nelson v Rye [1996] 1 WLR 1378 (CH) 1392

[5] See Buie v Estate of Buie(unreported) where the Chancery Division barred the claim by the spouse of the deceased in demanding her interstate share as an omitted spouse by the doctrine of laches. This was based on the fact that there was substantial delay in bringing the action, the delay had been caused by the plaintiff and the delay had prejudiced the position of the defendants.

[6] Ibid 4

[7] Ibid 4

[8] Philip H. Petit, Equity and the Law of Trusts

[9] Tom Leech, Equitable Claims-What is laches?

[10] Allcard v Skinner (1887) 36 Ch D 149

[11] Ibid 7

[12] Lindsay Petroleum Company v Hurd (1873) 5 App Cas 221,239

[13] Nilsen v City of Moss Pont, Miss., 674 F.2d 379

[14] Samuel L. Bray, A Little Bit of Laches Goes a Long Way: Notes on Petrella v Metro-Goldwyn –Mayer, Inc

[15] See Stearns v Page, 48 U.S 819, 828 where the court upheld the defendant’s argument that the equitable remedy of accounting for profits should not be granted after a great lapse of time when papers are lost, witnesses are dead and the transactions are forgotten.

[16] This reason was cited by the court in Twin-Lick Oil Co. V Marbury, 91 U.S. 587 as a reason to invoke laches to cut short the time allowed to bring a claim to court.

[17] Ibid 9

[18] Petrella v Metro, 9^th Circ. 2012, 570 U.S

[19] Hume v Bealle’s Executrix, 84 U.S. 336( 1872)

[20] Speidel v Henria, 120 U.S. 377 (1877)

[21] Ibid 3

[22] See also Maxwell v Kennedy, 49 U.S. 210  (1850) where the claimant sued to enforce a 46 year old judgment. The court applied laches noting that it was unnecessary to determine whether the Statute of Limitation of Alabama does or does not apply because upon principles of equity the claimant could not be given a relief. Same was reiterated in Twin-Lick Oil Co. v Marbury, 91 U.S. 587(1875) where the court in refusing to grant the equitable relief of rescission of a contract held that in deciding what time was reasonable in any particular case, the court is not bound by the analogies of the Statutes of Limitation.