Equity as a separate system from the common law
This paper discusses the early development of equity as a separate system from the common law. When equity originally developed as a gloss to the common law, it was innovative; it initiated new remedies and established new rights where the common law failed to act.
Indeed, equity originally acknowledged the trust, as one of its original developments. The protection granted to equitable owners behind a trust has progressed considerably over the last 50 years with the new model constructive trust, the contractual licence and the doctrine of proprietary estoppel. When the common law developed the strictures of the writ structure through the twelfth and the thirteenth centuries and fell short of developing additional remedies, persons wronged by the failure of the common law to resolve their apparent injustice petitioned the King and Council. The King, inattentive due to the associations of state, passed these petitions to his chief minister, the Chancellor. The Chancellor was head of the Chancery, among other state departments. The most recent non-lawyer was Lord Shaftsbury who in relation to the common law, but consistent with principles of fairness and justice; hence developed equity.
In the beginning, each separate Chancellor developed personal systems of justice giving intensity to the condemnation that equity had been as long as the Chancellor’s foot. The Lord Chancellor did in truth sit alone in his court of equity, or Chancery, as it later became identified. Equity started to surface as an unmistakable set of values, preferably than a personal jurisdiction of the Chancellor, throughout the Chancellorship of Lord Nottingham in 1673. By the end of Lord Eldon’s Chancellorship in 1827 equity was recognized as a defined jurisdiction.
The history of equity is thus considered by its relentless ebb and flow between compatibility and competition with the common law. A person wronged by a failure of the common law to remedy a flagrant injustice would apply to the court of equity. The catharsis transpired in the Earl of Oxford’s case, where the court of common law ordered the payment of a debt. The court of equity was prepared to allow an order precluding this and correcting the deed.
To this end, the conflict was ultimately determined in preference of equity; where there is inconsistency, at the present day, equity prevails. The new model constructive trust resulted for the most part by reason of the ingenious pursuit of Lord Denning MR. In Hussey v Palmer, Lord Denning described the constructive trust as one ‘imposed by the law wherever justice and good conscience require it.’ Court cases for example Eves v Eves, where the woman was conferred an equitable interest in the property representing her commitment in terms of heavy work, and Cooke v Head, an equivalent case, look upon this development even further. At common law, a contractual licence was controlled by the dogma of privity of contract, and failed to bestow protection against a third party. Equitable remedies have been made comprehensible to prevent a licensor contravening a contractual licence and to authorize a licence to bind third parties. It has been recognized that particular licences may create an equitable proprietary interest by means of a constructive trust or proprietary estoppel. A constructive trust was forced in her partiality as the buyers had bought purposely owing to Mrs Evans’ interest and had, for those reasons, paid a reduced price. Judicial originality in equitable disciplines is then made issue to modifications by judges in later cases.
A separate existing advancement in favour equity has resulted from the pronouncement of the House of Lords in Barclays Bank plc v O’Brien. This right to prevent the transaction amounts to an equity of which the mortgagee may be deemed to have constructive notice. This renewal of the equitable doctrine of notice in a modern state exposes manifestly the flexibility of equity. A number of cases followed this pronouncement. The doctrine is recognized on encouragement and acquiescence whereby equity was capable of arbitrating and adjusting the rights of the parties. Decisions as in for example Jennings v Rice reveal that the notion of proprietary estoppel and the protection of licences by estoppel remain a thriving channel used by the judges for the protection of licences and equitable rights. For instance, in Matharu v Matharu, the licence did not confer a beneficial interest but offered to the respondent a right to live in the house for the rest of her life.
Although the previous discussion has portrayed equity as achieving dominance over the common law in reference to trusts, it would never be the intention of equity to smooth away the law to the point of eroding it completely. The problem with maintaining the autonomy of equity over law is inherent in Professor Ashburner’s endeavour to explain equity and law as different streams running in the same channel without mingling their waters. The contention that equity and law are indistinguishable is equally incorrect. The preferred view is that equity and law are mutually dependent features of law, and consequently that no one of them has ascendancy over the other:
Neither law nor equity is stifled by its origin and the fact that both are administered by the same court has inevitably meant that each has borrowed from the other in furthering the harmonious development of the law as a whole.
In Tinsley v Milligan, the clash between law and equity became evident in a contemporary setting. It was found that the equitable principle governing when title to property was influenced by illegality had now amalgamated into the rule of the common law. The defendant maintained that she had an equitable interest. The House of Lords understood that the defendant had a right to defend her equitable ownership. The rule that a litigant cannot rely on an illegal purpose to rebut the presumption of advancement was verified, however, in this case, the equitable presumption of resulting trust was believed to apply. This case, looking to weigh up illegality and unjust enrichment, has produced problems in application.
In Tribe v Tribe, a case relating to a transfer of shares from father to son, the issue was obscured by the effect of the presumption of advancement. Nevertheless in Tribe v Tribe, the Court of Appeal understood that, in the conditions of this particular case, the father would be able to rely on an illegal aim to rebut the presumption of advancement because the illegality had not proved necessary and had not been carried out. This area of illegal transactions went under review by the Law Commission.
Equity represents a later development of the law. It is submitted that: ‘Equity, therefore, does not destroy the law, not create it, but assists it,’ it certainly is not dominant over the common law.
Tags: common law, constructive trust, gloss, petitions, proprietary estoppel
