Lecture Notes Maxims of Equity 27 PDF

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Department of Law Quaid-i-Azam University Islamabad

Lecture Notes on

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Shaukat Hayat

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The Origin and Development of Equity Definition of Equity: In its literal sense the term “equity” denotes fairness, impartiality and justice. In its legal and technical sense the term has been defined as, “A system of law designed to furnish remedies for wrongs which were not legally recognized under the Common Law of England or for which no adequate remedy was provided by the Common Law.” It has also been defined as, “A branch of English Common Law which developed hundreds of years ago when litigants would go to the King and complain of harsh or inflexible rules of Common Law.” World Legal Systems: Most nations today follow one of two major legal systems, i.e. the Common law system or the Civil law system. The common law system emerged in England during the Middle Ages and was applied within British colonies across continents. The civil law tradition developed in continental Europe at the same time and was applied in the colonies of European imperial powers such as Spain and Portugal. Common Law System: English Common Law emerged from the changing and centralizing powers of the king during the Middle Ages. After the Norman Conquest in 1066, medieval kings began to consolidate power and establish new institutions of royal authority and justice. New forms of legal action established by the crown functioned through a system of writs, or royal orders, each of which provided a specific remedy for a specific wrong. Before the Norman conquest, different rules and customs applied in different regions of the country. But after 1066 monarchs began to unite both the country and its laws using the king’s court. Justices created a common law by drawing on customs across the Copy Right © Shaukat Hayat2015

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country and rulings by monarchs. These rules developed organically and were rarely written down. The Common law is a body of law based on custom and general principles embodied in case law which serves as precedent and is applied to situations not covered by statute. The Common Law was applied within British colonies across the continents. In its initial age, the Common law was un-codified. The Common law is largely based on precedent, i.e. the judicial decisions that have already been made in similar cases. Civil Law System: The term "civil law" is derived from the Latin words “jus civile”, by which the Romans designated the laws that only the Roman citizens or “cives” were originally privileged to enjoy. For the other people there was the “jus gentium”. The civil law is based on Roman law, especially the Corpus Juris Civilis of Emperor Justinian. The case law in civil law systems does not have binding force. In civil law the courts have the task to interpret the law as contained in a legislation, without being bound by the interpretation of the same legislation given by higher courts. In a Civil Law system, the judge’s role is to establish the facts of the case and to apply the provisions of the applicable code. Countries following a civil law system are typically those that were former French, Dutch, German, Spanish or Portuguese colonies or protectorates, including much of Central and South America. Most of the Central and Eastern European and East Asian countries also follow a civil law structure. Comparison between the Common Law and the Civil Law Systems: Following are certain points of distinction between the Common Law and the Civil Law system: 

Codification of Law:

The difference between civil law and common law lies not just in the mere fact of codification, but in the methodological approach to codes and statutes. In civil law countries, legislation is seen as the primary source of Copy Right © Shaukat Hayat2015

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law. By default, courts thus base their judgments on the provisions of codes and statutes, from which solutions in particular cases are to be derived. Courts thus have to reason extensively on the basis of general rules and principles of the code, often drawing analogies from statutory provisions to fill lacunae and to achieve coherence. By contrast, in the common law system, cases are the primary source of law, while statutes are only seen as incursions into the common law and thus interpreted narrowly. 

Sources of Law:

In the common law system, the law has been dominantly created by judicial decisions. While in civil law, the main principles and rules are contained in codes and statutes, which are applied by the courts codes. The case law constitutes only a secondary source of law. 

Binding Nature of Precedents:

A lawyer in the common law court starts with the actual case and compares it with the same or similar legal issues that have been dealt with by courts in previously decided cases. The civil law is based on codes which contain logically connected concepts and rules, starting with general principles and moving on to specific rules. A civil lawyer usually starts from a legal norm contained in a legislation, and by means of deduction makes conclusions regarding the actual case. 

Main Functions of the Courts:

In the common law the courts are supposed not only to decide disputes between particular parties but also to provide guidance as to how similar disputes should be settled in the future. The courts in the civil law system have as their main task deciding particular cases by applying and interpreting legal norms. 

Interpretation of Laws by the Courts:

The interpretation of a legislation given by a court in specific case is binding on lower courts, so that under the common law the court decisions still make the basis for interpretation of legislation. On the other hand, in contrast to common law, the case law in civil law systems does not Copy Right © Shaukat Hayat2015

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have binding force. In civil law the courts have the task to interpret the law as contained in a legislation, without being bound by the interpretation of the same legislation given by higher courts. The Common Law Writs System: When the royal courts became more organized during the 13th century, the royal judges and legal officers wrote down the common law forms of action in standard form documents called “writs”. Those writs set out the cause of action or complaint. It commanded the defendant to appear in the King’s Court. Each writ was based on some principle of law. The facts were stated in the writ. The writs developed their special names. For instance a Writ of Right used to be granted for a proprietary action, a Writ of Convenant for an action for breach of contract. The Emergence and Development of Equity: Equity was founded upon the principles of fairness and conscience. Its piecemeal 1 development took place over the years as a result of the strict application of the rigid provisions of the Common Law. Consequently, equitable principles developed in a piecemeal and responsive way. Equitable remedies were both flexible and specific to the circumstances of each case and the granting of equitable relief was always discretionary. An understanding of the history and development of equity is fundamental to an understanding of this area of the law. Common law proceedings used to be commenced by a relevant writ which was only available for specified causes of action. If a plaintiff could not bring his action within those writs, the common law courts could not provide any remedy to an aggrieved person. Due to corruption within the court system and the nature of the common law, many decisions of the common law courts were considered to be harsh and unjust. Dissatisfied litigants began petitioning the King for relief and leniency. As the number of petitions grew, the King delegated that review function to the Lord Chancellor and it was from that 1 Unsystematic and partial development taken over a period of time. Copy Right © Shaukat Hayat2015

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function that the Court of Chancery was established. The first chancellors were ecclesiastics with no formal legal training whose decisions were largely shaped by questions of conscience and fairness. The decisions issued by the Court of Chancery in its formative stages were framed according to canon law, rather than the common law and as a result this area of the law was not developed upon any clear doctrinal foundations. During the 16th century the character of the Court of Chancery changed with the appointment of a lawyer, Sir Thomas Moore as Chancellor. From that point in time all future chancellors were lawyers, reports of proceedings were kept and equitable doctrines began to develop. In the Common Law courts the only remedy in civil suits was award of a decree for damages. The Common Law had no other remedy. The Court of Chancery brought new remedies that were not known to the writs system of the Common Law courts such as injunctions, specific performance of a contract etc. Another and greatest innovation of the Court of Chancery was the introduction of the concept of trusts. Conflict between Common Law and Equity: The two court systems were soon in conflict and there are many examples of such conflict as the two systems of law were in confrontation with each other regarding the issue of supremacy. The growing tension between the two bodies of law culminated in the Earl of Oxford’s case in 1615. In that case, Coke CJ gave judgment in a common law action which was alleged to have been obtained by fraud. The Lord Chancellor, Lord Ellesmere, then issued a common injunction from the Court of Chancery, preventing proceedings to enforce the common law judgment. As the two courts were deadlocked the matter was referred to the Attorney -General, Sir Francis Bacon, who upheld the use of the common injunction and determined that whenever there was conflict between the common law and equity, that equity would prevail. The Judicature Act 1873 during the 17th to 19th centuries the Copy Right © Shaukat Hayat2015

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fundamental principles of equity were developed and followed in the court of chancery by way of precedent. However the common law and equity continued to be administered by separate courts and litigants who had commenced their claim in the wrong jurisdiction were forced to start again in the other. The cost and time implications of this duality led to the enactment of the Judicature Act 1873 which fused the administration of the common law and equity. This Act abolished the old court system and replaced it with a new High Court of Justice which was vested with all of those jurisdictions previously exercised by the separate courts. There was one code of procedure for all claims and the dominance of equity in any situation of conflict with the common law was specifically preserved.

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Maxims of Equity The Nature and Role of the Maxims of Equity: The maxims of equity can be defined as rules of equity. The maxims were not written down in an organized code or enacted by legislatures, but they have been evolved through generations of judges. The maxims can be termed as the set of general principles which are governed the way in which equity operates. None of the maxims were in the nature of a binding rule. These maxims are only guidelines for the courts apply equity. In other word the maxims of equity are principles developed by the English Court of Chancery and other courts who have administered equity jurisdiction. They were often expressed in Latin but are translated into English. Historically equity developed not on any formal process of precedent, but on the discretion of the Lord Chancellor that is why it has been said, “The equity is as long as the Chancellor’s foot. However, as time went on, the decisions of the Court of Chancery began to form a set of principles and doctrines. What emerged in the course of the development of equity were a set of maxims which explained the way in which equity would intervene in given situations. 1. Equity will not Suffer a Wrong to be without a Remedy: The maxim means that where there is a right there is a remedy. This idea is expressed in the Latin Maxim ubi jus ibi remedium. It means that no wrong should go unredressed if it is capable of being remedied by courts. This maxim indicates the width of the scope and the basis of on which the structure of equity rests. This maxim imports that where the common law confers a right, it gives also a remedy or right of action for interference with or infringement of that right. In Ashby v. White, wherein a qualified voter was not allowed to vote and who therefore sued the returning officer, it was held that if the law gives a man a right, he Copy Right © Shaukat Hayat2015

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must have a means to maintain it, and a remedy, if he is injured in the enjoyment of it. In cases where some document was with the defendant and it was necessary for the plaintiff to obtain its discovery or production, a recourse to the Chancery Courts had to be made for the Common Law becoming ‘wrongs without remedies. The idea expressed in this maxim is that no wrong should be allowed to go un-redressed if it is capable of being remedied by courts of justice. It really underlines the whole jurisdiction of equity. There is no wrong for which equity cannot provide remedy. Where common Law failed to provide remedy there Equity Courts provided such remedies. Application of the Maxim: In the following lines there are few examples of the application of the maxim: (a)- Infringement of a Legal Right where the Plaintiff Sustains no Damage– Injuria Sine Damnum: Where plaintiff’s legal right violates but he suffers no loss. Here maxim injuria sine demnum applies and damages for the infringement of a legal right shall awarded. For instance if A trespasses the B’s property but no damage is caused by him to A’s person, property or reputation and A brings an action in tort, the court shall award damages to B because his legal right is infringed. (b)- Where Defendant Holds Evidence: Any document which was lying with defendant and plaintiff was in need of it to present as evidence in Court but common law Court were unable to get it discovered. Equity Court was in such a position to help plaintiff in providing remedy. (c)- Trust: In a case A conveys the certain land to B for the benefit of C. If B misappropriates the trust property, law cannot provide remedy to C, a beneficiary. In this instance, equity interferes to provide remedy to C. Since the wrong Copy Right © Shaukat Hayat2015

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use of trust itself is injustice, so it can be remedied in Court of Equity. (d)- The Right Redemption:

of

a

Mortgagor

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Equity

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In a mortgage transaction the mortgagor agreed to pay the mortgage debt at a certain date and the mortgagee to re-convey the mortgage property to the mortgagor if his claim was paid by the due date. If the debt was not paid on or by the due date the property was forfeited to the mortgagee and the mortgagor was forever deprived of it although the value of property was much more than the debt in lieu of which it become absolutely vested in the mortgagee. The mortgagor in such cases had no remedy at the Common Law to recover his property, as common law did not recognize any right in favour of the mortgagor in the property after the date of payment. Equity took different view. Equity Court held that intention of the mortgage was not to forfeit the property but it was just security of debt given. If the mortgagor paid his debt even after the fixed date, he was entitled to recover the property. Therefore this maxim created the very important right known as the right of redemption or equity of redemption in favour of mortgagor. (e)- Right of Author of a Trust: The Common law Court does not recognize the rights of an author of trust to bring action against a trustee in case of breach of trust by him. However, in equity author of trust is supposed owner of the trust. If trustee commits breach of trust, author can institute a suit for remedy against trustee for breach of trust. Equity regards the intent of the contract rather than its form. (f)- Specific Performance of Contracts: In the cases of breach of contract the Common Law had the only remedy of awarding a decree for damages. There may be circumstances in which damages may not be adequate remedy for a plaintiff such as the case of purchase of houses or antiques etc. The Equity realized this defect and harshness of the Common Law and invented the remedy of specific performance of contract

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under which a defendant could be compelled to perform the contract specifically. 2. Equity Follows the Law: This maxim means that equity respects the law. Accordingly equity will refrain itself from unnecessarily overriding or replacing the law instead it will try to uphold the law as much as possible. This maxim is demonstrated largely and illustrated by the many instances in which equity has adopted the same position as the law. By upholding the statutory provision of time frames for the institution of cause of action, equity is simply following the law The maxim indicates the discipline which the Chancery Courts observed while administering justice according to conscience. The discretion of the Court of Chancery was governed by the rules of the Common Law. In his regard the famous jurist, Maitland said, “Thus equity came not to destroy the law but to fulfill it, to supplement it, to explain it.” The goal of equity and law is the same, but due to their nature and due to historic accident they chose different paths. Equity respected every word of law and every right at law but where the law was defective, in those instances, these Common Law rights were controlled by recognition of equitable rights. The famous writer on law Snell therefore explained this maxim in slightly different way by saying, “Equity follows the law, but not slavishly, nor always.” Application of the Maxim: a)

Registration of Documents:

Section-17 of Registration Act governs the rules of compulsory registration of document, while Section18 of the same Act governs the rules of optional registration of document. In case where registration is compulsory and document is not got registered, that document is invalid in the eyes of law. In other case where registration was optional and one of two Copy Right © Shaukat Hayat2015

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persons had got registered that document while other one had not got it registered. Here equity would follows the laws and provides the remedy to the person who had got registered the document, despite it was optional. b)

Promisory Estoppel:

At common law, where a person died intestate who owned an estate, leaving sons and daughters, the eldest son was entitled to the whole of the land to the exclusion of his younger brothers and sisters. This was unfair, yet no relief was granted by the English Common Law. But in this case it was held that if the son had induced his father not to make a will by agreeing to divide the estate with his brothers and sisters, equity would have interfered and compelled him to carry out his promise, because it would have been against conscience to allow the son to keep the benefit of a legal estate which he obtained by reason of his promise. 3. He who Seeks Equity Must Do Equity: The maxim means that to obtain an equitable relief the plaintiff must himself be prepared to do ‘equity’, that is,...