THE ORIGINS OF EQUITY

Equity ‘mitigates the rigour of the common law’ (Earl of Oxford’s Case (1615))

Equity is underpinned by the notion of conscionability (Westdeustsche Land v Islington LBC [1996]). Conscionability, in short, means ‘fairness’.

Equity, like the law, depends on precedent and is NOT discretionary i.e. the judges make decisions based on previous decisions

FUSION OF THE TWO JURISDICTIONS

Historically, equity and the common law were two separate jurisdictions

However, they were influential upon each other e.g. the common law courts began to apply equitable rules and recognise trusts

• Winch v Keeley (1787) (1 T.R. 619 at 622-3; 91 E.R. 1284 at 1286) demonstrates the common law’s increasing recognition of the trust and willingness to enforce and uphold trusts

Ultimately, the two jurisdictions were fused together in the Supreme Court of Judicature Acts in the 19th Century

If, in any case, there is a conflict between common law and equity, equity shall prevail (s25(11) of the Supreme Court of Judicature Act 1873)

• For example, in the case of Walsh v Lonsdale there was a clash between a failure to comply with a common law rule as to the proper creation of a lease (which would made lease unenforceable) and the equitable doctrine of specific performance of contracts. It was held that the equitable principle of specific performance gave effect to the agreement to provide a lease. In other words, equity prevailed.

Conscionability is about holding the defendant up to an objective standard of good conscience

Conscionability may be invoked by fraud, dishonesty, misrepresentation, mistake, breach of duty, breach of trust/confidence, conflict of interest, abuse of position, etc

• So any of these matters may be examples of the defendant acting unconscionably

Equitable Maxims

Where the common law fails (or damages is inadequate) equity has developed a number of equitable remedies to address the situation. These include injunctions.

• In that sense, equity will not allow a wrong to be committed without there being some sort of remedy to address it
• Thus, equity will intervene in circumstances in which there is no apparent remedy but where the court is of the view that justice demands that there be some remedy made available to the complainant (Seddon v Commercial Salt 1925)
• E.g. under a trust, a beneficiary has no right at common law to have the terms of the trust enforced, but the court will nevertheless require the trustee to carry out those terms to prevent her committing what would be in effect a wrong against that beneficiary

Equity cannot overrule statute; and equity will not overrule common law unless there is unconscionability. But, where there is a conflict equity prevails: Supreme Court of Judicature Acts 1873 s.25(11)

In a situation in which there is no clear distinction to be drawn between parties as to which of them has the better claim in equity, the common law principle which best fits the case is applied

In that sense, where the equitable doctrines produce an equal result, then the common law prevails

• E.g. where 2 people purchase goods from a fraudulent vendor for the same price, neither of them would have a better claim to the goods in equity. Therefore, the ordinary common law rules of commercial law would be applied in that context

Where two claimants have equally strong cases, equity will favour the person who acquired their rights first → so the first in time prevails

Too much delay will prevent access to an equitable remedy (the equitable doctrine of laches)

However, as equity follows the law, the Limitation Act 1980 prevails

• So the limitation act will normally apply to time bar actions, but if there is no limitation then the equitable doctrine of laches will apply