Common Law and Equity Notes PDF

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Common Law and Equity 1. Development of Common Law

a.

Before 1066 i. Celts and Anglo Saxons - each tribes have difference / variation to the customs ii. Laws were customs → (not laws per se, but ran by customs) iii. Tribal Elders decided the outcome of cases

b.

Norman Conquest 1066 i. William the Conqueror conquered UK in 1066 → defeated King Harold in Battle of Hastings. ii. Brought and unite all tribes under Norman Rule iii. Appointed and Organize judges into circuits 1. Judges dispense justice according to the local area customs iv. Judges started to collect best customs →  started applying the law uniformly v. Laws common to all → “Common Law” 2. Defects of Common Law a. Only remedy available was damages → not sufficient enough to compensate the wrong b. Inflexible → In order to start a case, there must exist a writ covering the area of law which you are suing under (no writ → no case → no remedy) → there are also limited range of writs i. Provisions of Oxford 1258 1. A document outlining reforms to English Common Law 2. No new writs could be created → due to too many writs being circulated c. Juries, as they were then, could be corrupted or intimidated i. Roles of juries have changed; used to assist judges, but only decide on questions of facts n ow d. Expensive e. Common Law only looked at form and not intention → on contracts and documents. f. Delay g. Procedural defects and technicalities → legitimate grievances was lost h. Rigidity → Binding precedent →Tools of Departure to avoid precedent not available then 3. Development of Equity a. Equity → set of legal principles → aimed to complement and fill defects of Common Law b. Cardozo in Graf v Hope Building Corporation 1930 i. Equity was never developed as a separate legal system, but only to complement and supplement Common Law. c. In 1250, the “Common Law” developed had ruled the whole country d. Common Law gradually changed from a system that is dynamic and adaptable to one that was expensive, inflexible and inadequate e. Dissatisfied parties began to petitioned the King

f. King heard cases on a case to case basis and gave justice g. King passed these petitions to Lord Chancellor → number of petitions increased → established Court of Chancery h. Lord Chancellor is a bishop → expert in religious law but not law in general i. “Man-made law is different from god-made law”→ religious law i. Equity Courts initially not bound by precedent → decisions varied from different Chancellors i. This made equity unpredictable → no consistency→ Fairness was a subjective quality j. By 19th Century, equity is now ruled by precedent and standard principles

4. Growth of Equity a. Equity ensures justice → could grant remedies other than damages ex: Discretionary remedies: injunctions b. Decisions were based on justice, fairness and equity c. Equity could be adapted and expanded → meets new needs d. Less formal and cheaper than common law courts 5. Conflict between Equity and Common Law a. Qualifications i. Common Law judges were legally qualified → experts in law ii. Lord Chancellor were not legally qualified → a bishop, expert in religious law b. Common law courts felt threatened over the tremendous powers given to the Chancery Court c. Common law judges question how a non legally qualified person i s allowed to create new remedies as they themselves can’t d. The Chancery Courts began to act in their capacity o f an “appellate court”→ to hear appeals e. Chancery Court often gave decisions in conflict with common law courts f. Equity Courts are not bound by precedent g. Courtney v Glanvil 1615 i. Chief Justice Coke stated when common law has decided a case, Chancery Court have no power to intervene between parties ii. If anyone appeal to Lord Chancellor, he would be imprison h. Earl of Oxford’s Case 1615 i. If there is conflict between common law and equity, equity prevails (always win) i.

Conflict was finally resolved by Judicature Acts 1873 - 1875 i. Merged the administration of the common law courts and Chancery Court ii. Can get both equitable and common law remedies in the same court

6. Contributions of Equity a. These remedies are discretionary → courts won’t necessary grant the remedies even if the plaintiff won i. Contradicts common law damages that are granted as of right ii. Chancery court will only grant the remedies if it is fair in all circumstances

iii.

New remedies 1. Injunctions - Compels the defendant to do or not do something a. Mandatory Injunction - compels the defendant to do something b. Prohibitory Injunction - an order prohibiting the defendant from doing something i. Lumley v Wagner 1852 1. Claimant engaged defendant, an opera singer to perform in his theatre for three months 2. There was a term in the contract preventing her from singing for anyone else for the duration of the contract 3. A manager from another theatre offered her more money to sing for him 4. Claimant sought an injunction preventing her from singing for the manager 5. The injunction was granted despite it having the effect of forcing the defendant to sing for the claimant. c. Interlocutory Injunction -granted to protect one party’s rights while waiting case to be heard → it is given when damages could not be put right for the harm suffered by the party while waiting for the case d. Plaintiff may be a warded both damages and injunctions → compensation e. Normally used in domestic violence cases and in the tort of nuisance f.

Freezing Order (Mareva Injunction) i. This order was created in the 20th Century ii. Only granted if there is a risk that one party in a case will move their assets before the case against them is tried iii. Effect of the order → freezes the assets of the defendant to prevent the defendant from transferring the assets out of the court’s jurisdiction iv. These assets will eventually be used to pay any damage and cost awarded

v.

Mareva Compania Naviera SA v International Bulk Carriers SA 1975 1. Shipowners found the charterers had money in an English bank 2. Shipowners sought an injunction to freeze their account → was granted 3. Injunction granted → to prevent the danger of D disposing his assets out of the jurisdiction

g. Search Order (Anton Piller Order) - This order was created in the 20th Century i. Allows claimant to search defendant’s premises → remove any documents/materials that could help claimant to prove his case 1. Anton Piller KG v Manufacturing Processes Ltd (1976) a. Court ordered defendant to allow claimant to search his premises b. Allow claimant to take away relevant documents and materials c. Prevents defendant from destroying documents that are potentially evidence 2. Quantum Meruit: “What one has earned” a. Denotes a claim for a reasonable sum in respect to the goods and services supplied or  to the defendant b. Planche v Colburn 1831 i. D engaged C to write an article for publication ii. C commenced the article but before completing it, D abandoned the publication iii. Court held C could sue D for compensation for work  laim on done without completing the article → “C Quantum Meruit” 3. Specific Performance - Order that contract should be carried out as agreed a. Only granted in exceptional circumstances → where damages could not sufficiently compensate the plaintiff b. Never granted to order someone to carry out personal services c. Cohen v Roche 1927 i. Claimant owns a furniture shop ii. Enters into an agreement to purchase a quantity of Hepplewhite Chairs

iii. iv. v. vi.

Defendant, in breach of contract, refused to delivered the chairs Claimant asked for specific performance; it was not granted Hepplewhite Chairs were not unique, but ordinary articles Damages would be an adequate remedy

4. Rescission - returns the parties to their pre-contractual position a. Example: if contract of purchasing good is rescinded; then the buyer would need to return the goods to the seller ; seller returns the purchasing price back to the buyer b. Dimmock v Hallett (1866) i. In selling some land, the defendant told the claimant that all of the farms were under tenancy, which was factually true ii. The defendant failed to mention that all of the tenants had given notice to vacate their land iii. Issue was whether contract of sale could be rescinded iv. Plaintiff was able to rescind the contract 5. Restitution: Where there is a contract, instead if suing for damages, a claimant may claim for what he has done under the contract a. When a court orders restitution, it orders the plaintiff / claimant to give up his/her gains to the contract b. Law of restitution is opposite of law of compensation 6. Rectification - when a mistake have been accidentally made in a document, that document should be altered to reflect the true intention as agreed by the parties 7. Doctrine of Frustration - a court order that means the contract is immediately brought to an end because the act as agreed in the contract becomes impossible to perform due to some disaster or causes beyond the control of anyone. a. Taylor v Caldwell 1863 i. Claimant agree to hire a music hall from the defendant ii. Before the hall was used, it was burnt down iii. Neither party was at fault at the destruction iv. Claimant sue Defendant for breach of contract v. The issue was whether the loss suffered by plaintiffs is recoverable from the Defendant → No vi. Defendant’s failure to perform is not a breach a contract

vii.

Therefore, the destruction of the hall without fault of either party excuses both parties, the Plaintiff from taking the gardens and paying the money and the Defendant from performing their promise to give the use of the hall.

b. New concepts and right i. Both concepts are founded on the idea that one person owns the legal interest in property but has to use the property for the benefit of another. This other person is said to have an equitable interest in the property ii.

iii.

c.

Concept of Trust 1. Equity recognized the rights of the beneficiary (person who derives advantage from a trust) 2. The law of trust r egnozied dual ownership in contrast to common law’s only recognizing single ownership. 3. Help settle familial matters such as setting up pension funds and settling property Redemption of Mortgages 1. Common law only recognized the l egal owner of property 2. Equity recognized the rights of the mortgagor to redeem his property 3. Allows the mortgagor to redeem his property from the mortgagee upon payment of principal and interest outstanding 4. A common way to aid the finance of homes and properties nowadays through a mortgage

Doctrine of Promissory Estoppel i. ii.

A legal principle that a promise is enforceable by law, even if made without a formal arrangement Central London Property Ltd v High Tree House Ltd (1947) 1. This case saw the doctrine being used as a defense element to ward off a promise that arose out of a valid contract 2. A block of flats belonging to CLP was leased to High Trees for 99 years 3. The Highwill then sublet the flats to the residents 4. World War II → people moved out of London due to bombings → difficult to let the flats 5. Landlord agreed that the leasing of the flats need only half of the normal rent during the war 6. However this was not expressly agreed how long this would last for 7. By 1945 the war had ended and the flats were at full occupancy. 8. The plaintiffs sued High Trees for the full rent from 1945 onwards. Judgement:

1. The rent would be returned to the originally agreed price for the future only.

d.

Equitable Maxims → set of principles to be satisfied before equitable rules could be applied in order to ensure decisions were morally fair i. He who comes to equity must come with clean hands 1. A claimant seeking an equitable remedy must not be guilty of unconscionable conduct a. D&C Builders v Rees (1966) b. D&C did building works for Rees amounting to £732, which Rees paid £250 c. D&C ask for balance of £482, Rees announced work was defective  &C are in d. Rees ask to pay at a discounted price knowing that D financial difficulty e. The financially troubled C reluctantly accepted the £300 “in completion of account” f. D&C sue Rees for outstanding amount g. Rees claimed the court should apply the doctrine of promissory estoppel h. Lord Denning refused to apply the doctrine; on the grounds that i. “Rees had taken unfair advantage of the builders financial difficulties, therefore had not come with clean hands ii.

He who seeks equity must do equity 1. A claimant who seeks equitable relief must be prepared to act fairly towards his opponent 2. Courts will looks at the future conduct of the claimant, he must be prepared to act equitably 3. Even if the claimant had established his/her equitable rights, the courts will not necessarily grant the relief if the court had found the claimant unworthy of it a. Chappell v Times Newspaper (1975) b. Employees of Times launched a strike against their employer c. Employer threatens to sack the employees unless they stop the strike d. Dissatisfied employees went to court and apply an injunction i. To prevent their employer from carrying out the threat e. COA held that whether the newspaper owners were threatening contractual wrongful actions, the plaintiffs had no claim for an

injunction because they had come to equity  unwilling to do equity iii.

Equity will not suffer a wrong without a remedy: 1. Equity will not allow the technical defects of common law to prevent worthy plaintiffs from obtaining redress (compensation 2. Patterson v Murphy 1978 a. Plaintiff bought land adjoining a quarry which is a source of noise and dust b. This resulted in shock and structural damage to the property of the plaintiff c. When an infringement of the plaintiff’s right has been established, the plaintiff is entitled to an injunction d. An injunction was granted to refrained the defendant from quarrying activities i. It had damaged the plaintiff’s house ii. Also Interfered with his comfort of living to an unreasonable extent. e. This case was distinguished from of Halpin v Tara Mines Ltd by Justice Costello. i. In this case, the defendants had ceased their blasting activities and so it was no longer necessary to grant an injunction....