Introductory Lecture
What is Equity?
It is the body of law/ rules which was developed by the court of Chancery.
It is a separate jurisdiction to that of the Common law.
Law = Courts of Kings bench
Equity = Court of Chancery
Aristotle
Equity is superior to justice. Justice and Equity coincide but Equity >>>
It is not just what is legally just, it is their own rectification of legal justice.
Legislators cannot pre-empt every possible eventuality. They regulate in general terms but
when those are applied to peculiar case, it produces unjust outcomes.
o This is why equity steps in to rectify the strict application of legal justice and correct
the unjust outcomes.
We have equity because of the inadequacy of the common law
1. rigidity of the rules applied by the law
2. system of rights which was a sort of organisational problem with the common law.
Writs
This is how the common used to be organised, now known as claim form.
Piece of paper you fill out before you sue someone.
If your story didn’t fit the established category of a particular writ, you would not
have a case – the common law courts would not have entertained your case.
What would happen if people got angry?
They would write letter to majesty, the complaints became too much so he would pass them
to his chancellors who were responsible for the creation of the Court of Chancery.
o They dealt with cases that were either turned away by the Courts of Kings bench or in
other situations where the outcome were too harsh or too unjust.
In order to rectify the judgements of the Court of Kings bench, CoC would be seen as place
of second resort.
Joseph story is an original and fundamental court as ancient as the kingdom comes.
He is trying to say that it is an immensely important part of the English legal system –
TRUE.
Prior to Constitutional Reform Act 2005, law chancellors were very powerful and
constitutional players.
They used to be speakers of the House of Lords, Head of Judiciary as well as
important cabinet members.
They would sit in each of the three branches of government effectively.
Important historical office which has recently been reformed by the Constitutional Reform
Act. = Dickens has a novel dedicated to criticism of the courts of Chancery called Bleak
House.
,Alastair Hudson
“it flows along, improvising constantly, but yet it is held together by a firm pattern. The
essence is the tension between improvisation and order, between freedom and discipline.
“it denigrate US equities disorganised, chaotic and unprincipled to adhere to its adherents” –
there’s a method on how we do equity.
Two courts = bound to come up with some rules which contradict each other.
- Old authority, Earl of X case decided where equity and law conflict, equity prevails
and has the last word. This was later put on statutory footing.
- When we say equity prevails, doesn’t means that equitable property rights are better
or stronger than legal property because the opposite is the case.
Why have the common law, if one legal system beats the other?
Rigidity of Common Law
One problems with CL was the perceived rigidity.
Bakers example of Penner - where a debtor failed to cancel a sealed bond means they fail to
burn the document, which said they owned money, they were still liable after for the
repayment.
- Evidence rules were very strict. We don’t care if he had paid it already, strict rules of
the common law wouldn’t take account of other pieces of evidence such as that.
Land Law example: the rules pertaining to the creation of long lease for more than seven
years.
Section 52 of the Law Property Act 1925 says that you need to have a deed. The strict
language says that all conventions of land or of any interest they’re in or void for the purpose
of conveying or creating a legal estate unless made by deed
o Means you don’t have a deed you don’t have a property right or you are not creating
anything.
Section 27 of the Law or Land Registration Act 2002 explain that if this position is not
registered, it is needs to be registered, the it doesn’t operate at all.
o It does not come to exist at law or the legal version or that interest doesn’t come to
exist unless the relevant formal requirements are met.
Walsh v Lonsdale (1882)
The defendant, Lonsdale, agreed to grant the claimant, Walsh, the lease of a mill for seven
years, the rent to be paid quarterly in arrears with a year’s rent payable in advance if
demanded. The parties did not execute a deed for the grant of the tenancy, but the claimant
moved in and paid rent quarterly in arrears. The defendant then demanded a year’s rent in
advance. The claimant refused to pay.
If there is a specifically enforceable contract to grant a lease, Equity will treat this
lease as having come into existence.
Equity treats as done that which ought to be done.
Equity looks at substance rather than form.
Recognises lease, even though some of the formal requirement are not being met.
Example:
,I own a property that you want to rent for the next 10 years. Agree to £1000 a month, we
enter int a written contract but we do not happen to have a deed or register the long lease.
You move in, someone offers £2000 for it.
Law = no lease, no rights so you can get excited.
Ruling of Lonsdale = they have an enforceable contract, equitable lease has already come into
existence at the moment and these parties have agreed. We don’t want to disrespect that and
we do not follow the rules of formality.
Sometimes the strict application of the formal rules would not produce just.
Example of Equity’s sense of Justice
“Equity is the means by which a system of law balances out the need for certainty in rule-
making with the need to achieve fair results in individual circumstances” – Alastair Hudson.
Judicature Acts 1873 – 75
Abolishes the two tiered court system, establishes one High Court
Judges now allowed to apply both rules of law as well as Equity
Reaffirms the ratio of Earl of Oxford
Unify the two systems of court but keep the two jurisdictions separate. Just enables
the judge to use rules of both.
CONS of Two Dimensional System
Confusing
Time-consuming
Expensive because need two different sets of lawyers
Pre 1873 – 75 = it was very difficult and inefficient.
Equity as a jurisdiction of conscience?
Chancellors were Ecclesiastes, they felt they had authority over the soul and
administered justice according to good conscience.
Whose conscience? Individuals or Courts?
“Equity operates on the conscience of the owner of the legal interest – Lord Browne -
Wilkinson; Westdeutsche Landesbank v Islington (1996)
“Equity is according to the conscience of him that is Chancellor and that is longer or
narrower, so is equity. Tis all one if they should make the standard for the measure a
Chancellors foot” – John Selden.
It’s the chancellor who decides what the court of chancery is deciding and that is
according to his conscience and everyone’s conscience is subjective.
Better to say we are talking about courts conscience. Dichotomy or debate.
Peter Birks; Equity, Discretion and Conscience
Compared the idea of conscience by the use of conscience by Ron Hyde Rhienhart, Heydrich
which was a horrible Nazi leader. One of the most evil people of the 20th century.
o “The unrealisability of conscience is captured in a grisly dictum of Heydrich”
o Says that Heydrich is evil who uses conscience and a lot of bad things can be hidden
behind the idea of conscience.
Jeremy Bentham
Was a sceptic about equity.
, “taken, by itself, or anywhere else than in company with the word court, equity is
abracadabra: a word without meaning”
o Viewed equity as something that couldn’t have bought together by a coherent
principle.
Equitable Maxims = formulations of the basics of equities and of the equitable approach.
Statements of Principle?
Morality of Equity>
Can be seen as useless?
Examples:
Equity treats as done that which ought to be done
He who comes to Equity must come with clean hands
Equity will not assist a volunteer
Equity does not perfect an imperfect gift
Equity will not allow a trust to be used as a instrument of fraud
Equity deals in personam
Equity will not suffer a wrong to be without a remedy
If equity is there to produce substantive or true justice, does that mean common law is
injustice?
No, they are meant to complement each other and both achieve justice in tandem.
e.g two different styles of parenting complementing each other.
Maitland
Idea of law talking to equity and equity responding.
Equity is a supplementary law, appendix added to our code.
Not dismissing or belittling rules and considering them as absurd and an obsolete one but
instead “yes, of course that is so, but it is not the whole truth”
Equity’s Reach
The Law of Trusts = commercial use, family context, insolvency, unjust enrichment
Equitable remedies; many more types of remedies
Common law limited to damages and money had and received. Sometimes you don’t
want money, you want people to stop doing things or to start doing things.
o Equitable Responses = specific performance , injunction, rescission, rectification,
subrogation, duty to account, lien, fixed charge, floating charge, constructive trust,
resulting trust.
Riggs v Palmer (1889)
Palmer was legatee under the will of his grandfather Francis. To speed up his inheritance he
poisoned Francis.
Applicable rule here or statute is the statute of wills.
Applying the rule literally, Palmer would receive the money.
Justice Grey: I’m not here to pass moral judgement on him. I need to apply the law and the
law says he should inherit. Following a rigid approach and common law.
Justice Earl: Says that other things that need to be considered, such as intention of
legislature. Did the legislature and the conscience intend this? = would be unconscionable if
we allowed a murderer to benefit from their own run by collecting the inheritance of their
victim.
What is Equity?
It is the body of law/ rules which was developed by the court of Chancery.
It is a separate jurisdiction to that of the Common law.
Law = Courts of Kings bench
Equity = Court of Chancery
Aristotle
Equity is superior to justice. Justice and Equity coincide but Equity >>>
It is not just what is legally just, it is their own rectification of legal justice.
Legislators cannot pre-empt every possible eventuality. They regulate in general terms but
when those are applied to peculiar case, it produces unjust outcomes.
o This is why equity steps in to rectify the strict application of legal justice and correct
the unjust outcomes.
We have equity because of the inadequacy of the common law
1. rigidity of the rules applied by the law
2. system of rights which was a sort of organisational problem with the common law.
Writs
This is how the common used to be organised, now known as claim form.
Piece of paper you fill out before you sue someone.
If your story didn’t fit the established category of a particular writ, you would not
have a case – the common law courts would not have entertained your case.
What would happen if people got angry?
They would write letter to majesty, the complaints became too much so he would pass them
to his chancellors who were responsible for the creation of the Court of Chancery.
o They dealt with cases that were either turned away by the Courts of Kings bench or in
other situations where the outcome were too harsh or too unjust.
In order to rectify the judgements of the Court of Kings bench, CoC would be seen as place
of second resort.
Joseph story is an original and fundamental court as ancient as the kingdom comes.
He is trying to say that it is an immensely important part of the English legal system –
TRUE.
Prior to Constitutional Reform Act 2005, law chancellors were very powerful and
constitutional players.
They used to be speakers of the House of Lords, Head of Judiciary as well as
important cabinet members.
They would sit in each of the three branches of government effectively.
Important historical office which has recently been reformed by the Constitutional Reform
Act. = Dickens has a novel dedicated to criticism of the courts of Chancery called Bleak
House.
,Alastair Hudson
“it flows along, improvising constantly, but yet it is held together by a firm pattern. The
essence is the tension between improvisation and order, between freedom and discipline.
“it denigrate US equities disorganised, chaotic and unprincipled to adhere to its adherents” –
there’s a method on how we do equity.
Two courts = bound to come up with some rules which contradict each other.
- Old authority, Earl of X case decided where equity and law conflict, equity prevails
and has the last word. This was later put on statutory footing.
- When we say equity prevails, doesn’t means that equitable property rights are better
or stronger than legal property because the opposite is the case.
Why have the common law, if one legal system beats the other?
Rigidity of Common Law
One problems with CL was the perceived rigidity.
Bakers example of Penner - where a debtor failed to cancel a sealed bond means they fail to
burn the document, which said they owned money, they were still liable after for the
repayment.
- Evidence rules were very strict. We don’t care if he had paid it already, strict rules of
the common law wouldn’t take account of other pieces of evidence such as that.
Land Law example: the rules pertaining to the creation of long lease for more than seven
years.
Section 52 of the Law Property Act 1925 says that you need to have a deed. The strict
language says that all conventions of land or of any interest they’re in or void for the purpose
of conveying or creating a legal estate unless made by deed
o Means you don’t have a deed you don’t have a property right or you are not creating
anything.
Section 27 of the Law or Land Registration Act 2002 explain that if this position is not
registered, it is needs to be registered, the it doesn’t operate at all.
o It does not come to exist at law or the legal version or that interest doesn’t come to
exist unless the relevant formal requirements are met.
Walsh v Lonsdale (1882)
The defendant, Lonsdale, agreed to grant the claimant, Walsh, the lease of a mill for seven
years, the rent to be paid quarterly in arrears with a year’s rent payable in advance if
demanded. The parties did not execute a deed for the grant of the tenancy, but the claimant
moved in and paid rent quarterly in arrears. The defendant then demanded a year’s rent in
advance. The claimant refused to pay.
If there is a specifically enforceable contract to grant a lease, Equity will treat this
lease as having come into existence.
Equity treats as done that which ought to be done.
Equity looks at substance rather than form.
Recognises lease, even though some of the formal requirement are not being met.
Example:
,I own a property that you want to rent for the next 10 years. Agree to £1000 a month, we
enter int a written contract but we do not happen to have a deed or register the long lease.
You move in, someone offers £2000 for it.
Law = no lease, no rights so you can get excited.
Ruling of Lonsdale = they have an enforceable contract, equitable lease has already come into
existence at the moment and these parties have agreed. We don’t want to disrespect that and
we do not follow the rules of formality.
Sometimes the strict application of the formal rules would not produce just.
Example of Equity’s sense of Justice
“Equity is the means by which a system of law balances out the need for certainty in rule-
making with the need to achieve fair results in individual circumstances” – Alastair Hudson.
Judicature Acts 1873 – 75
Abolishes the two tiered court system, establishes one High Court
Judges now allowed to apply both rules of law as well as Equity
Reaffirms the ratio of Earl of Oxford
Unify the two systems of court but keep the two jurisdictions separate. Just enables
the judge to use rules of both.
CONS of Two Dimensional System
Confusing
Time-consuming
Expensive because need two different sets of lawyers
Pre 1873 – 75 = it was very difficult and inefficient.
Equity as a jurisdiction of conscience?
Chancellors were Ecclesiastes, they felt they had authority over the soul and
administered justice according to good conscience.
Whose conscience? Individuals or Courts?
“Equity operates on the conscience of the owner of the legal interest – Lord Browne -
Wilkinson; Westdeutsche Landesbank v Islington (1996)
“Equity is according to the conscience of him that is Chancellor and that is longer or
narrower, so is equity. Tis all one if they should make the standard for the measure a
Chancellors foot” – John Selden.
It’s the chancellor who decides what the court of chancery is deciding and that is
according to his conscience and everyone’s conscience is subjective.
Better to say we are talking about courts conscience. Dichotomy or debate.
Peter Birks; Equity, Discretion and Conscience
Compared the idea of conscience by the use of conscience by Ron Hyde Rhienhart, Heydrich
which was a horrible Nazi leader. One of the most evil people of the 20th century.
o “The unrealisability of conscience is captured in a grisly dictum of Heydrich”
o Says that Heydrich is evil who uses conscience and a lot of bad things can be hidden
behind the idea of conscience.
Jeremy Bentham
Was a sceptic about equity.
, “taken, by itself, or anywhere else than in company with the word court, equity is
abracadabra: a word without meaning”
o Viewed equity as something that couldn’t have bought together by a coherent
principle.
Equitable Maxims = formulations of the basics of equities and of the equitable approach.
Statements of Principle?
Morality of Equity>
Can be seen as useless?
Examples:
Equity treats as done that which ought to be done
He who comes to Equity must come with clean hands
Equity will not assist a volunteer
Equity does not perfect an imperfect gift
Equity will not allow a trust to be used as a instrument of fraud
Equity deals in personam
Equity will not suffer a wrong to be without a remedy
If equity is there to produce substantive or true justice, does that mean common law is
injustice?
No, they are meant to complement each other and both achieve justice in tandem.
e.g two different styles of parenting complementing each other.
Maitland
Idea of law talking to equity and equity responding.
Equity is a supplementary law, appendix added to our code.
Not dismissing or belittling rules and considering them as absurd and an obsolete one but
instead “yes, of course that is so, but it is not the whole truth”
Equity’s Reach
The Law of Trusts = commercial use, family context, insolvency, unjust enrichment
Equitable remedies; many more types of remedies
Common law limited to damages and money had and received. Sometimes you don’t
want money, you want people to stop doing things or to start doing things.
o Equitable Responses = specific performance , injunction, rescission, rectification,
subrogation, duty to account, lien, fixed charge, floating charge, constructive trust,
resulting trust.
Riggs v Palmer (1889)
Palmer was legatee under the will of his grandfather Francis. To speed up his inheritance he
poisoned Francis.
Applicable rule here or statute is the statute of wills.
Applying the rule literally, Palmer would receive the money.
Justice Grey: I’m not here to pass moral judgement on him. I need to apply the law and the
law says he should inherit. Following a rigid approach and common law.
Justice Earl: Says that other things that need to be considered, such as intention of
legislature. Did the legislature and the conscience intend this? = would be unconscionable if
we allowed a murderer to benefit from their own run by collecting the inheritance of their
victim.
