Equity as a Modern Source of Law

2387 words (10 pages) Essay in Equity Law

06/08/19 Equity Law Reference this

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With reference to relevant case law and legislation, examine the importance of equity as a modern source of law in light of its historical development

This essay examines the importance of equity as a modern source of law in light of its historical development, with reference to relevant case law and legislation. Equity, according to Alastair Hudson is the means by which a system of law balances out the need for certainty in rule making on the one hand, with the need for sufficient judicial discretion to achieve fairness in individual factual circumstances on the other[1]. In the biblical genesis, God created Adam and Eve. In the genesis of common law, history created common law and equity. Until 1875, two legal systems co-existed in England and Wales: the common law system that appeared in the 11th-12th century, and the equity system in the 14th century. Both derived from the same source of law, the King-in-Council. They evolved in parallel until the end of the 19th century. In 1876, the common law and equity jurisdictions merged.

After the Battle of Hastings in 1066, the new King of England, William the Conqueror (reign 1066-1087), crowned at Westminster Abbey in London, left local customary law in force while initiating a process of centralization. In order to govern, he relied on a royal council (King’s Council) called Curia Regis (King’s Court in Latin) composed of nobles and clergymen. Curia Regis was also a traveling court presided over by the King, who would sit in judgment of civil or criminal cases during his travels. The Kings of England delegated part of their judicial power to judges. In doing so, the King controlled the conditions under which royal justice was rendered, not only by appointing the judges, but also by determining the applications that may be submitted for dispensation of royal justice. The Chancellor of the King would use writs to resolve the civil disputes. The writs were sent to the defendant’s county sheriff, with an order to summon the defendant to appear in court before the Chancellor who would either grant the claim or refuse it with justification.  In the course of the trial, judges must check whether the case falls within the limits set by the writ. Very early on, the procedure became an important part of the nascent common-law system.

The common law system was found to be too rigid, too technical and too slow. The system was also found to not be suitable for settlement of all disputes. Some disputes do not fall within the scope of a writ and cannot be settled by a common law jurisdiction. Thus, the legal system of equity was born out of a desire to correct the defects of the common law. In the 1350s, a new writ was endorsed by the King’s Council: The Writ of Trespass on the Case. It broadened the scope and possibility of taking legal action. Under this writ, it suffices for the plaintiff to present a claim establishing the existence of damage, and to show that it was caused by the act or fault of the defendant. However, this writ arrived too late: the equity system, in 1350, was emerging.

From the 14th century, disappointed litigants began to take their cases before the King, the “fountain of justice”. Requests for royal audience were handled by the Chancellor, the King’s counsellor for justice, also known as ‘the keeper of the King’s conscience’. This practice progressively created The Chancellor’s Court (Court of Chancery). Chancellors were prominent clergy who dispensed justice according to their conscience and the moral principles of equity.  To quote an aphorism of a 17th century English jurist, John Selden in his book Table-Talk, in relation to the King’s Chancellor “equity varies according to the length of the Chancellor’s foot”[2].

In essence, Equity can be described as a full-fledged right developed by the Chancery Court from the 15th century. These new rules of law made it possible to provide more flexible answers, sometimes more adapted to particular situations. These flexible answers were based on the equitable remedies which consisted of: injunctions, specific performance, promissory estoppel, rescission, and, last but not least, rectification. The injunction procedure, in particular, allows the judge to order a party to do a specific act or transaction or, on the contrary, not to do so. This remedy was seen in the case of Warner Bros. V Nelson [1937][3]. This case was about a film star, Bette Davis, who breached her contract with the Warner Brothers Pictures film company to work with another company. Warner Bros was awarded a negative injunction to prevent her from working with another company. The injunction procedure has the advantage of also acting on the future rather than simply sanctioning past behaviour. In 1615, tensions started emerging between common law and equity. These tensions were referred to the King for a decision, and that was when the Earl of Oxford Case came about. The Earl of Oxford Case[4] ruled that where there was conflict between common law and equity, the latter, equity, should prevail. [5]

Gradually, towards the beginning of the 18th century, the general principles of maxims emerged. The maxims summarize the general principles established by the jurisprudence of the courts of equity. They are expressed in Latin and translated into English. Maxims do not constitute strict and intangible rules. They are simply principles to which the judge’s ruling in equity are conventionally referred, and which are used to bring moral fairness. There are nearly 20 equitable maxims. The 3 main maxims are: first, “He who comes to equity must come with clean hands”, meaning that where the claimant has acted in a manner that is inequitable towards himself, the court will decline to award an equitable remedy, such as an injunction, in situations where the defendant’s conduct would otherwise justify it[6]. This maxim is seen in the case of D & C Builders v Rees [1966][7]. “Delay defeats equity” is when equity takes into account the claimant’s conduct, as well as that of the defendant. Therefore, in the same way as equity looks at the claimant’s ‘clean hands’ and the claimant’s future conduct, equity will also be alert to the possibility that the claimant has delayed before bringing a claim[8]. This second maxim is seen in the case of Leaf v International Galleries [1950][9]. Last but not least, the third maxim: “He who seeks equity must do equity” refers to the future conduct of the claimant, in that the process of the litigation should be conducted in a manner that is fair towards the defendant[10]. This maxim is seen in the case of Chappell v Times Newspapers Ltd [1975][11].

The duality of jurisdiction, common law and equity, was abolished in England by the Judicature Acts of 1873-1875. These Acts merged the common law and equity and allowed all superior courts to rule at once according to the common law and according to equity. This new jurisdiction is what then created the High Court of Justice, which comprised three Divisions: Queen’s Bench (common law), Chancery (Equity) and Probate (formerly Probate, Divorce and Admiralty). The same law provided that, in the event of a conflict between the rules of the common law and those of equity, the latter should prevail. The rules of equity continue to be distinct from those of the common law, but now the plaintiff can invoke one and the other in a single action in one jurisdiction. Equity completes and corrects the common law in some respects: thus, cases of nullity of common law contracts are supplemented by equity-sanctioned vices of consent. This points to the importance of equity as a modern source of law.

Equity continues to evolve. In modern times, the relevance of Equity is evident in new equitable remedies, such as the Anton Piller Orders, Mareva Injuctions and Super Injunctions. The Anton Piller Orders gave the court authority to search the defendant’s premises, which is seen in the case of Anton Piller KG v Manufacturing Processes Ltd. [1976][12]. The Mareva injunctions, on the other hand, gave the court power to freeze the assets of a party, mainly known as the ‘freezing injunction’. This injunction is seen in the case of Mareva Compania Naviera SA v International Bulkcarriers SA [1980] [13]. Last but not least, the Super Injunctions allowed celebrities to preserve privacy and prevented the press from getting much information about them. This injunction is seen in the case of Ferdinand v Mirror Group Newspapers [2010][14]. The importance of Equity in modern times is evident in different disciplines or subjects of the English Legal System, such as Contract law, Land Law, Tort Law, and Mortgages. In Contract law, Lord Denning sought to use equity to find solutions when dealing with contractual disputes, some of which included estoppel, undue influence, mistake, and the equitable remedies[15]. Equity occupies a big place when it comes to Land Law and Mortgages. These two subjects cannot be discussed without the input of Equity. Perhaps the biggest example of Equity in both Land Law and Mortgages is Trust, and the context of undue influence[16]. Last but not least, in Tort Law equity is seen through the use of injunctions to find equitable remedies to prevent tortious behaviour[17].  

In conclusion, today, Equity’s importance as a modern source of law can be understood from its key attributes of: preventing strict legal rules being applied unjustly; creating substantive rules itself, especially in the law of trusts; and lastly, creating procedural rules and remedies[18].

References:

  1. Elliott and Quinn, English Legal System, 16th edn (Pearson, 2015)
  2. Hudson, Alastair,  Principles of Equity and Trusts , 2nd edn (London: Cavendish Publishing, 2001).
  3. Selden, John, Table-talk, being discourses of John Seldon, Esq or his sense of various matters of weight and high consequence, relating especially to religion and state. (1696), (London: EEBO Editions, ProQuest, 2011)
  4. Huws, Catrin Fflur, Text, cases and materials on equity and trusts, (London: Pearson, 2015).
  5. Virgo, Graham, The Principles of Equity and Trusts, 3rd edn (Oxford, 2016)
  6. Levenstein, Michael, Maxims of Equity: A Juridical Critique of the Ethics of Chancery Law, (Algora, 2014)
  7. Hayton and Mitchell, Commentary and Cases on the Law of Trusts and Equitable Remedies, 13th edn, (Sweet & Maxwell, 2010)
  8. Martin and Hanbury, Modern Equity, 19th edn (Sweet & Maxwell, 2012)
  9. Hudson, Alastair, Understanding Equity & Trusts, 6th edn (Routledge, 2017)
  10. Hutchinson, C. Allan, Evolution and the Common Law, (Cambridge University Press, 2005)
  11. Milsom, S.F.C, Studies in the History of Common Law, (The Hambledon Press, 1985)
  12. Warner Bros v Nelson [1937] 1 KB 209
  13. Earl of Oxford’s case (1615) 21 ER 485 
  14. Anton Piller KG v Manufacturing Process Ltd [1976] 1 ALL ER 779
  15. Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213
  16. Ferdinand v MGN [2011] EWHC 2454
  17. D&C Builders Ltd v Rees [1966] 2 QB 617
  18. Leaf v International Galleries [1950] 2 KB 86
  19. Chappell v Times Newspapers Ltd [1975] 1 WLR 482 

[1] Alastair Hudson, Principles of Equity and Trusts  2nd edn (London: Cavendish Publishing, 2001

[2] John, Selden, Table-talk, being discourses of John Seldon, Esq or his sense of various matters of weight and high consequence, relating especially to religion and state. (1696), (London: EEBO Editions, ProQuest, 2011)

[3] Warner Bros v Nelson [1937] 1 KB 209

[4] Earl of Oxford’s case (1615) 21 ER 485 

[5] Elliott and Quinn, English Legal System, 16th edn (Pearson, 2015) pg 130

[6] Alastair Hudson, Principles of Equity and Trusts , 2nd edn (London: Cavendish Publishing, 2001).

[7] D&C Builders Ltd v Rees [1966] 2 QB 617

[8] Alastair Hudson, Principles of Equity and Trusts , 2nd edn (London: Cavendish Publishing, 2001).

[9] Leaf v International Galleries [1950] 2 KB 86

[10] Alastair Hudson, Principles of Equity and Trusts , 2nd edn (London: Cavendish Publishing, 2001

[11] Chappell v Times Newspapers Ltd [1975] 1 WLR 482 

[12]  Anton Piller KG v Manufacturing Process Ltd [1976] 1 ALL ER 779

[13] Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213

[14] Ferdinand v MGN [2011] EWHC 2454

[15] Catrin Fflur, Huws, Text, cases and materials on equity and trusts, (London: Pearson, 2015), p.43.

[16] Catrin Fflur, Huws, Text, cases and materials on equity and trusts, (London: Pearson, 2015), p.61.

[17] Catrin Fflur, Huws, Text, cases and materials on equity and trusts, (London: Pearson, 2015), p.63.

[18] Alastair Hudson, Principles of Equity and Trusts, 2nd edn (London: Cavendish Publishing, 2001), p.4.

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