Equity - COMMON LAW PDF

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In answering the ques/on, the candidate will provide a discussion on the reason the system of law is called equity and its contribu/ons to the development of concepts and remedies. The birth of equity in firmly associated with the words fairness and jus/ce. However, the development of such law rose ...

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In answering the ques/on, the candidate will provide a discussion on the reason the system of law is called equity and its contribu/ons to the development of concepts and remedies. The birth of equity in firmly associated with the words fairness and jus/ce. However, the development of such law rose from the defects of the common law(CL) system. In 1066, when William The Conqueror ruled England aHer winning the BaJle of Has/ngs, he established a centralised government. He ensured it was consolidated with different local customs to resolve disputes and ended up with a set of laws (common law) that applied uniformly throughout the country. Unexpectedly, the CL system, from dynamic and malleable became

formalised, inflexible and

inadequate, which Gary Slapper described to be an “ins/tu/onal sclerosis”.

The first defect is seen in the writ system. Under CL, ac/ons had to begin with writs but only a limited number of writs were available. Due to the 1258 Provisions of Oxford, courts refused to produce new writs and claims were only allowed if they fit into exis/ng writs, affirming the rule “no writ, no remedy”. Besides, even if a writ was acquired, due to procedural defects and excessively technicali/es, judges occupy more /me inspec/ng the effec/veness of the writ compared to the merits of the case. Next, the only remedy available was damages which was insufficient in many cases. This system is also costly and /me consuming as if there was an error in the writ, it had to be redone. Lastly, this system is cri/cised as there was rigidity in law through binding precedent. Injus/ce may occur as judges are unable to develop the law even if there was a dras/c need for change.

Due to the defects, par/es who were dissa/sfied with the outcome of the law began pe//oning to the King (“Founda/on of Jus/ce”). These cases were then referred to the Lord Chancellor where he decided them individually based on fairness, jus/ce and what seemed morally right. The Court of Chancery(COC) was then created to deal with these cases. He looked beyond the contents and formali/es of legal documents and precedents in deciding cases. The birth of equity is seen when the COC filled in the gaps of law where CL failed to address. Equity only applies when CL does not provide a remedy to the problem. Lord Cowper in Lord Dudley v Lady Dudley (1705) commented that equity is “a moral virtue which qualifies, moderates

and reform the rigour, hardness and the edge of law”. Not only that, equity even created new remedies such as specific performance, injunc/ons, rec/fica/on and rescission. Equity made sure decisions were made with good sense, fairness and it was adaptable to fit new needs and condi/ons.

Due to the growth of equity, conflict between CL and equity rose. In the Earl of Oxford’s case (1615), James I decided equity will always prevail whenever there is a conflict between the two systems. The Judicature Act 1873-75 then restructured the court system by fusing the two systems to put an end to the conflict that arose by crea/ng a unified system of courts and procedures.

It is without doubt that equity has made significant contribu/ons to the law. This is seen in the development of maxims, which are considered as guidelines in applying equity. An example is ‘he who comes into equity must come with clean hands’ and its applica/on is seen in D&C Builders v Rees (1965). The courts refused to apply the doctrine of equitable estoppel on the grounds that the defendant took unfair advantage of the the builders and therefore had not come ‘with clean hands’. Next, the case of Leaf v InternaTonal Galleries (1950), the maxim of ‘delay defeats equity’ was u/lised. Here, the claimant bought a pain/ng but only found out it was fake aHer 5 years and no equitable ac/on could be taken.

The crucial contribu/on of equity is seen in the development of new remedies, other than damages provided by CL. An injunc/on is an order to do or not to something. Mainly, there are two types of injunc/ons; mandatory injunc/on, compelling one conduct an act and prohibitory injunc/on, forbidding one from doing an act. In Kennaway v Thompson (1980), the judge granted a prohibitory injunc/on to stop the disturbance and nuisance caused by the racing boats. In Warner Bros v Nelson (1937), the claimants were awarded a mandatory injunc/on which compelled the defendant to complete her contract with the claimants. Both these injunc/ons can also be interlocutory as they can be provided to protect a party’s right before or during a trial. As equity con/nues to grow, newer injunc/ons have developed. Firstly, a mareva injunc/on (freezing order) is a court order to freeze the assets where there is a risk

that they may be removed from the UK before trial. This is to ensure that if the court grants damages to the winning party, the assets can be used to pay the damages. This is mainly used in cases of breach of copyrights and matrimonial maJers. This injunc/on derived from the case of Mareva Compania Naviera SA v InternaTonal Bulk Carriers (1975). Next, the anton pillar order is a search order which allows the claimant to inspect the defendant’s premises and confiscate materials that can be used as evidence in court. This injunc/on is derived from the case of Anton Piller KG v Manufacturing Processes Ltd (1976). In family law disputes, S.42 Family Law Act 1996 provides a non-molesta/on order which prohibits from one from moles/ng another. S3A ProtecTon from Harassment Act 1997 provides injunc/ons to protect domes/c violence vic/ms from harassment.

Next, specific performance(SP) coerces a party to do his contractual obliga/ons as he had promised to do. Compared to injunc/ons, SP is only provided when damages are considered to be insufficient. In situa/ons where goods are easily obtainable, the claimant will be provided with damages, not SP. [Sky Petroleum Ltd v VIP Petroleum Ltd (1974)]. SP also cannot be used to get service contracts. In Lumley v Wagner (1852), the court refused to grant SP for a contract to sing. Rescission is a equitable remedy that aims to return the par/es to their pre-contractual posi/ons as far as possible. Addi/onally, rec/fica/on concerns the alterna/on of words in a document to reflect the true inten/on of par/es.

Equity has also developed new equitable rights. Firstly, the crea/on of trust. Under CL, when a property is transferred to the trustee, he gets the full legal /tle and can u/lise the property as his own, without bothering about the beneficiary’s rights. Equity recognises the trustee being the legal owner but the beneficiary having equitable interest in the property. The beneficiary may enforce his rights on the property in court. The phrases ‘equity looks at inten/on rather than form’ and ‘common law looks at form rather than inten/on’ can be deciphered here. Today, the concept of trust has developed widely to cater for various purposes. The modern applica/on of trust is seen in Stack v Dowden(2007) where the courts recognised and protect the rights of co-habitants under construc/ve trust. Next, Charitable Act 2011 also governs for charitable purposes under charitable trust. Others include

family trust (assets are protected for the future), Unit trust funds and pension scheme trust.

Another concept developed by equity is promissory estoppel which Lord Denning applied in Central London Property Trust v High Trees House (1947). This doctrine stops a person from going back on a promise made. Its applica/on today is seen in proprietary estoppel and it is no longer limited to promises. It can be used to create licenses or leases. For instance, in Ramsden v Dyson (1886), it is established that proprietary interest in land is created without compelling with required formali/es.

The right to redemp/on is seen as a great development of equity. This speaks of the owners right to redeem the /tle of the property once all debts with the mortgagee are paid off. A mortgagee places a charge on the property mortgaged to the mortgagor. The mortgagee becomes the absolute owner of the property. Under CL, the concept of mortgage is considered to be a commercial transac/on and thus, it does not recognise the right of redemp/on once the payment is made. However, the interven/on of equity prevents this and allows the mortgagor to get back his property as a basis under the mortgage agreement. This is known as mortgagor’s ‘equity of redemp/on’. [Howard v Harris(1681)]

Moving on, deserted wives equity has also been established. In Eves v Eves (1975), Lord Denning stated that this right is established to protect wives that have been deserted by their husbands. With this equitable right, banks cannot evict wives from their premises due to failure in payment of property. This is now codified in S.30 Family Law Act 1996, also known as ‘Homes Right’.

It is evident that equity is a system that does not expire nor grow old. The doctrine of unconscionability is an example that equity con/nues to grow /ll date. This doctrine is used in preven/ng unfairness and injus/ce from occurring. The courts may find a contract unconscionable if the contract is unjust towards one party which includes unfair bargaining and terms as seen in Pennington v Waine (2002) where the courts intervened to prevent a person from ac/ng unconscionably.

In conclusion, the development of new concepts and remedies in equity indicates that the law con/nues to grow and cater based on the changing social condi/ons. The encouragement in the growth of equity is seen in the embodiment of principles in statutes as it places emphasis on the importance and recogni/on of these contribu/ons. Even though equity only steps in to fill in the lacuna in CL, it has not passed the bearing age. It will con/nue to adapt and develop with the crea/on of more equitable rights and remedies to ensure that jus/ce will always prevail.

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