Definition of equity and equitable remedies PDF

Preview

Summary

Definition of equity and equitable remedies...

Description

The law Equitable Remedies Equity is a branch of law that developed alongside common law in order to remedy some of its defects in fairness and justice, formerly administered in special courts. Main characteristics of equity are its maxims, doctrines and remedies. Main characteristics of equitable remedies are that they are discretionary, they are granted where the common law remedies would be inadequate or are not available and equitable remedies act in personam. The equitable remedies relevant for this specific case are specific performance, account, injunctions, Quia Timet, Ex Parte, and Ne Exeat Regno. These remedies may be sought in any division of the High Court or, in some instances, in the county courts; they are still discretionary in nature, although the discretion is often exercised on established lines. Under the Judicature Acts 1873-75, with establishment of the High Court of Justice to administer both common law and equity now administered by the Superior Court Act 1981s.49. Specific Performance A definition of specific performance will be the appropriate place to start attempting this question. For a general description of specific performance, Wilson v Northampton and Banbury Junctions Rly Co (1874) 9 Ch App 279 (16.7). Mention that it is an action in personam: Penn v Lord Baltimore (1750) 1 Ves Sen 444. The role of specific performance as a residual, discretionary remedy applied where damages are innaporipate Cooperative Inurance v Argyl. Where damages would be inadequate compensation for the breach of agreement, the contractor may be compelled to perform what he has agreed to do by a decree of specific performance for employment or recovery of unique chattels. Specific performance will not usually be decreed for contracts of personal service, but a defendant may be restrained by injunction from the breach of a negative stipulation in such contract. Specific performance is an equitable remedy and at the discretion of the court. Where a court has jurisdiction to award specific performance, it may award damages in addition to, or in substitution for, specific performance. Relates to contract and maxim, equity thinks as done which is ought to be done. Case of Quadrant tells us two things, firstly, the general equitable principles, the maxims apply in case of specific performance and goes on to say you cannot fetter the courts equity. Wilson v Northampton & Banbury Railway Co (1874) - “The court gives [specific performance] instead of damages only where it can by that means do more perfect and complete justice”. S50 Supreme Court Act 1981. Where the Court of Appeal or the High Court has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to, or in substitution for, an injunction or specific performance. Injunction An order or decree by which the party to an action is required to do, or refrain from doing, a particular thing. Injunctions are positive or negative, interim or permanent. The jurisdiction of the High Court to grant an injunction is discretionary. There are three principles which apply to all injuctions . 1)Has to be infringement of a right, that right must be a legal or equitable right, not all rights are going to legal or equitable and the best example of this is the right to a name e.g. Day v Brownrigg (1878) 10 Ch D 294 P owned a house call Ashford Lodge for 60 years - D changed his house name to Ashford Lodge. P must prove the infringement or potential infringement of a right which is recognised in equity or at common law - injunction not granted.

2) No injunction if the injury is trivial, that’s true of all equity, in common law if you are entitled to a penny then you can sue for a penny, if it trivial in equity you will not get a remedy. Judge decides whether something is trivial, it must be important. 3) All relevant factors taking into account, which means under all the circumstances what is fair and just. Equity looks at all circumstances to see what is fair and just , Jaggard v Sawyer (1995) 1 WLR 269 at first instance the court refused an injunction for a trespass - in doing so they took into account the conduct of both parties, the nature of the injunction and the relevant land. This approach was confirmed at the Court of Appeal. The types of injunction which apply in this case are: Prohibitory Injunction: An perpetual injunction will not necessarily last forever but they are final in that they will finally resolve the issue between the parties. Easier to obtain in comparison to other injunctions and is available to restrain the defendant from acting in a particular way as seen in Shelfer’s case and Pride of Derby v Brittish Celanese. The court has the discretion in exercising their discretion, in exercising their discretion they consider; whether performance of act, sought to be restrained will produce an injury to the party seeking injunction, whether injury can be remedied or atoned for, and if capable of damages could they be obtained. The Attorney General may apply for a prohibitrory injunction to restrain a criminal offence if it is in public interest, when statutes are inadequate as shown in AG v Sharp [1931] 1 CH 121. Mandatory Injunction: An perpetual injunction will not necessarily last forever but they are final in that they will finally resolve the issue between the parties Unlike other forms of injunctions which prohibit the defendant from engaging in a particular activity, a mandatory injunction actually compels the defendant to perform a specified act. Due to the extraordinary nature of this remedy, mandatory injunctions are restricted to those cases where there is no other way to remedy a past wrong and restore things to their former condition: Shindelka v. Rosten, [1982] 5 W.W.R. 395 (Sask Q.B.).

In order to obtain an order for a mandatory injunction, the plaintiff must show that it has a strong prima facie case, that irreparable harm will be done to the plaintiff if the injunction is not granted and the inconvenience to the defendant will not outweigh the positive effects to the plaintiff: Wyman & Moscrops Realty Ltd. v. Vancouver Real Estate Board (1958), 26 W.W.R. 188 (B.C.S.C.)

For example, the mandatory injunction granted in A.G. Man v. Campbell (1983) 26 C.C.L.T. 168, required a farmer to dismantle a tower which was disrupting flights from an adjoining airport. The Manitoba Court of Queens Bench found that the public right to airline flights and medical emergency evacuation services prevailed over the rights of the disgruntled individual landowner.

In British Columbia a mandatory injunction was granted in United Service Funds v. Carter 15 B.C.L.R. (2d) 346 (S.C.), which directed a third party to deliver to the district registrar money or property

which the third party was obligated to deliver to the defendant. The court found that the third party was essentially a sham company created by the defendant debtor to defeat the lawful claims of his creditors. Therefore, the mandatory injunction was appropriate in the circumstances so as to avoid the dissipation or total loss of the funds which would have inevitably resulted.

An order for specific performance is a form of mandatory injunction. It is available only where damages provide an inadequate remedy. See: S.M. Waddams, The Law of Contract, (3d) (1993) at paragraph 661: ". . . The primary remedy for breach of contract is said to be the award of monetary compensation, specific enforcement being available only when money compensation is inadequate. " Interim Injunction: The object of an interlocutory injunction is to preserve the status quo until the trial of an action. Are dealt with by the CPR Pt 25. They take various forms including an interim injunction; freezing order(Mareva Order) and as a search order( Anton Pillar Order)or quia timet. The list given in the rule is not exhausitive and the court retains inherent jurisdiction. Application is usually made by an application of notice, with our without notice given to the other side. Preston v Luck (1804) 27 Ch D 497, sets the principle which still exists that claimant must give an undertaking in damages whenever there is interim injunctions, not always the case. (Undertaking damages=the claimant must say they will compensate any loses to defendant if it is wrongly awarded at the end of the day as damages)Ex parte, in an emergency .The legal test most commonly employed by the Court when considering an application for an interim injunction is the well-known test set out by Lord Diplock in American Cyanamid, comprising of the following: Whether there was a serious question to be tried, Which way the balance of convenience lies, Maintenance of the status quo, Other factors and The relevant strength of the parties. Some injunctions so severe, so different that you don’t apply these principles, firstly you cannot apply these principles to:s221 Trade Union & Labour relations Act 1992, If the injunction finally disposes of the matter, If the defendant has no arguable defence, Cases involving public rights and Interim Mandatory Injunctions. Mareeva Injunction (interim): Prohibotory interim injunction acts in personam, by which the defendants is prevented from dealing with his assests in any way which might defeat the claimant’s prospect of enforcing a legal judgement against the defendant. An injunction enabling the court to freeze the assets of a defendant wether resident to English jurisdiction ciurt or not; it may be obtained under part 25 of the Civil Procedure Rules. The injunction prevents the defendant from removing his assets from the jurisdiction of the court, and from disposing of it, dealing with, or diminishing the value of his assets. The injunction is draconian and requires disclose all material information to the court. Before intorudction of Civil Proecudre Rules in 1999 , freezing injunctions were known as a Mareva injunctions from case of Mareva Compania Naviera SA v International Bulkcarriers1, decided in 1975. It is recognised as being quite harsh on defendants because the order is often granted at the pre-trial stage in ex parte hearings, based on affidavit evidence alone. A Mareva injunction is often combined with an Anton Piller order in these circumstances. The purpose of a Mareva injunction is to protect the interests of the plaintiff during the pendency of the suit and is granted to restrain the defendant from disposing of their assets within the jurisdiction until the trial ends or judgment in the action for

infringement is passed. Mareva or freezing injunction is passed when there is evidence or material to show that the debtor is acting in a manner or is likely to act in a manner to frustrate subsequent order/decree of the court or tribunal. The Court therefore freezes the assets of the debtor to prevent the assets from being dissipated, to prevent irreparable harm to the creditor. It prevents a foreign defendant from removing his assets from the jurisdiction of the court. It is like and akin to "attachment before judgment" and conditions mentioned in the said provision should be satisfied before freezing junction order is passed. The jurisdiction has been developed so that it is normal for the plaintiff to apply to the court ex parte (that is without notice to the defendant). The obvious practical importance of this is clear. If the defendant knew that the plaintiff was going to make such an application, he would obviously, if he were so minded, move the assets before the court had time to make the order. Of course, this possibility is capable of causing serious hardship to the defendant and appropriate safeguards have therefore been developed. Lord Diplock sets the guidelines and limitations to when you have a Mareva in case of Siskina “considered that there should be limitations on their use - "It is interlocutory and not final: it is ancillary to a substantive pecuniary claim for debt or damages: it is designed to prevent the judgement against a foreign defendant for a sum of money being a mere brutum fulmen (spent thunderbolt)" Third Chandris Shipping Co v Unimarine Sa (1979) 2 All Er 972. Court of Appeal. Lord Denning set out basic guidelines:1. Cl. full and frank disclosure 2. Cl. give particulars of his claim 3. Cl. show grounds for believing the def has assets in the jurisdiction 4. Cl. shows grounds for risk 5. Cl. give undertaking as to damages Freezing order issues. • Duty of litigant keep ensuring the court has full disclosure, (he who sees equity must do equity):Town & Country Building Society v Dairystar Ltd and Another (1989) the Times October 16 October 14 • Foreign Defendants you can take an order somebody wherever there are (equity acts in person am) Chartered Bank v Daklouche 1980, • Nature Of Assets (doesn’t have to be money) Allen v Jambo Holdings 1980, victims family took freezing order against the company and froze the planes. • World Wide Mareva Injunctions anywhere in the world as long equity can touch there and you can have communication in their jurisdiction is a costly exercise it has to be worth doing. You have to advise Leo about costs, need for international order this is expensive the damages have to be significant in order for the risk to be taken:

1)

Ashtiani v Kashi 1986

2)

Republic of Haiti v Duvalier 1988

3)

Derby & Co Ltd v Weldon 1989:

•

Def will not be oppressed

• Def will be protected against misuse of information, if you have information for an order you cannot use it for something else, you can only use information for purposes you wanted. •

Third parties will be protected, equity will protect the innocent

Cala Cristal SA v Al Borno : D should be allowed to spend reasonable sums to defend himself Gidrxslme Shipping Co Ltd v Tantomar-Transportes Maritimos Ltd 1995, • Position of Third Parties : Z Ltd V A-Z & AA-LL 1982 ;If a third party knows the Mareva exists he is in contempt of court if he knowingly assists in disposal of the assets ( a bank that collaborate with defendant then will be in contempt of court like defendant) •

Galaxia Maritime SA V Mineral Import-Export 1982; Protection of innocent third parties.

• Extension of Mareva Injunction, extended to family cases in particular to husbands assets been frozen. 1)

Standard Chartered Bank v Walker 1991

2)

Astro Exito Navegacion SA v Southland Enterprise Co Ltd (No2) 1982

3)

Bayer AG v Witner 1986

• You can only freeze what you are entitled to end of the day, not a general order to freeze everything, only the amount you would have at the end of the day. The defendant must be able to have living expenses, so reasonable living expenses to whatever they are used to. They have to have usual business costs. Reasonable legal costs that would incur in the case, all of this limits you to what you can have, you can only freeze what you are actually claiming for. The courts have word reasonable objectively accountable. What happens if what’s left is not enough to what you want? = hard cheat it wouldn’t be fair to take away their life style on the chance of they might have done something. • Case of Oaktree vital on freezing injunctions(if you want an injuctions do it quickly, still got awarded freezing injuctions), gives break down what freezing order is. 2 major categories of cases which the courts accept applications made to the other side as an necessary evil; 1st category= consists of those cases which serious damage innominate and the requirement of speed to prevent or limit are such that for legisitic reasons it is not possible to give an notice In time, 2nd category of cases= justification for the absence of notice, is that notice would defeat the ends of justice, we mustn’t tell the defendant if we do something would happen. Anton Pillar: (interim injunction):

A form of interim mandatory injunction an ex parte as shown in Oaktree as shown by case of Anton Piller made by the High Court under the jurisdiction conferred upon it by section 7 of the Civil Procedure Act 1997. Such an order requires a defendant to permit a claimant or his represantives to enter the defendates reprasatives to inspect, copy, or remove material evidence that it is feared the defendant might otherwise destroy or remove in order to frustrate the claimants action . Because of its nature, a search order is granted without notice to the defendant. It will be granted in limited circumstances, and only where it is deemed absolutely necessary. A Search order may prima facie contravene the defendants right to privacy under article 8 (1) of the European Convention on Human Rights as shown in case of Chapel. However, the qualifications under Article 8(2) would permit use of search where necessary. The previlige against self-incrimanation does not apply. LIMITATIONS:1. Cl. has a strong prima facie case. (how strong is their case) 2. Serious damage (serious damage to your case if you didn’t have that evidence) 3. Clear evidence of possession, and potential destruction of material evidence( have you got all the evidence you need, do you know they got this stuff, are they likely to destroy or hide it or move it?) 4. Cl. must be able to make good any damage (compensate defendant any harm done) 5. Cl. must make full disclosure (not just your side but what other side might have to, hidden anything you’re in trouble).

Quia Timet( can be interim): An injunction granted for the purpose of quieting a present apprehension of a probable future injury to property. In order to succeed in a quia timet action, the claimant must prove imminent danger of a substantial kind or that the apprehended injury, if it does come, will be irreparable shown in Colls v Home Colonial Stores [1904] AC 179 (HL). Because he fears, the courts requires now more than three basic requirements, authority for this is Redland Bricks Ltd v Morris (1970) Ac 652, demonstrate strong probability of grave damages them most important part of this, then show damages would be inadequate, the cost to D of preventing continuance must be taken account by the courts, and the court must ensure that D knows precisely what he has to do. R v Sec of State for Trade and Industry ex parte Dudderidge [1994]Since the danger of cancer from the proximity of electricity pylons had not been proven a quia timet would not be awarded, need of clear evidence of grave damage. Account: A remedy at common law and in equity requiring one party to a relationship (partner/trustee) to account to the others for moneys received or due. It may be persued in addition to a claim for another remedy, such as damages, or a substantive remedy in its own right. An order to account can fulfil two functions:firstly, it can quantify the amount of profit or loss being persued, secondly, it can impose liability to make payment. An order to account may be made where a fiduciary makes unauthorized profits or receives a bribe shown in Boardman v Phipps [1967] 2 AC 46 (HL) and AG for Hong Kong v Reid [1994] 1 AC 324 (PC)

Exparte: On the part of one side only. An ex parte hearing is defined in the Glossary of the Criminal Procedure Rules as a hearing where only one party is allowed to attend and make submissions. Ne Exeat Regno:  Prevents the defendant from leaving the jurisdiction, it's purpose being to coerce him to give security for an equitable debt, on pain of arrest. (be contempt of court and a fine) 

Conditions very strict

 1. Action is one which the debtor would formerly have been liable to arrest at law (19th century concept which has not changed, the firs provision he would of been arrested in 19th century for debt, must be exisisting debt for 50 pounds or more, not going to be much of a problem) 

2. There is a sound cause of action for £50 or more



3. There is probable cause that the defendant will flee the jurisdiction (they will leave)

 4. The defendant’s action would prejudice the claimant’s prosecution of his claim (so they may go together with all their money and without being cross examined court, these are i...