Equity Flashcards
Equity
In ordinary language, equity simply means fairness, but in law it applies to a specific set of legal principles, which add to those provided in the common law. It was originally inspired by ideas of fairness and natural justice,
How equity began
At the same time, the common law was itself becoming increasingly
rigid, and offered only one remedy, damages, which was not always an adequate solution
to every problem
Steps to Equity
Consequently, many people were unable to seek redress for wrongs through the
common law courts. Many of these dissatisfied parties petitioned the king, who was
thought of as the ‘fountain of justice’. These petitions were commonly passed to the
Chancellor, the king’s chief minister, The Chancellor was usually a member of the clergy,and, by 1474, the Chancellor had begun to make decisions on the cases on his
own authority, rather than as a substitute for the king. This was the beginning of the
Court of Chancery.
Chancellor,
Litigants appeared before the Chancellor, who would question them, and then deliver
a verdict based on his own moral view of the question. The Court of Chancery could provide whatever remedy best suited the case –
Common law and equity
Not surprisingly, the Court of Chancery became popular, and caused some resentment
among common lawyers, who argued that the quality of decisions varied with the length
of the Chancellor’s foot – in other words, that it depended on the qualities of the individual
Chancellor. Because precedents were not followed and each case was considered purely
on its merits, justice could appear arbitrary, and nobody could predict what a decision
might be. Nevertheless, the rivalry continued for some time, but gradually abated as equity too
began to be ruled by precedent and standard principles, a development related to the fact
that it was becoming established practice to appoint lawyers rather than clergy to the
office of Lord Chancellor. By the nineteenth century, equity had a developed case law and
recognizable principles, and was no less rigid than the common law.
Common law and equity Tension
Tensions between equity and the common law came to a head in 1615 in The Earl of
Oxford’s Case, where conflicting judgments of the common law courts and the Court
of Chancery were referred to the king for a decision; he advised that where there was
conflict, equity should prevail. Had this decision not been made, equity would have been
worthless – it could not fulfil its role of filling in the gaps of the common law unless it
was dominant.
The Judicature Acts
The Judicature Acts of 1873–75 provided that there would no longer be separate courts
administering equity and common law. Today, provided that equity and
common law could both be administered by all courts, and that there would no longer be
different procedures for seeking equitable and common law remedies.
Equity today
There is still a body of rules of equity which is distinct from common
law rules, and acts as an addition to it. Although they are implemented by the same courts,
the two branches of the law are separate. Where there is conflict, equity still prevails.
Equitable maxims
Although both the common law and equity lay down rules developed from precedents,
equity also created maxims which had to be satisfied before equitable rules could be
applied. These maxims were designed to ensure that decisions were morally fair.
‘He who comes to equity must come with clean hands’
This means that claimants who have themselves been in the wrong in some way will not
be granted an equitable remedy.In D&C Builders v Rees (1966) a small building firm
did some work on the house of a couple named Rees. The bill came to £732, of which
the Reeses had already paid £250. When the builders asked for the balance of £482, the
Reeses announced that the work was defective, and they were only prepared to pay £300.
As the builders were in serious financial difficulties (as the Reeses knew), they reluctantly
accepted the £300 ‘in completion of the account’. The decision to accept the money would
not normally be binding in contract law, and afterwards the builders sued the Reeses for
the outstanding amount. The Reeses claimed that the court should apply the doctrine of
equitable estoppel, which can make promises binding when they would normally not be.
However, Lord Denning refused to apply the doctrine, on the grounds that the Reeses had
taken unfair advantage of the builders’ financial difficulties, and therefore had not come
‘with clean hands’.
‘He who seeks equity must do equity’
Anyone who seeks equitable relief must be prepared to act fairly towards their opponent. In Chappell v Times Newspapers Ltd (1975), newspaper employees who had been threatened that they would be sacked unless they stopped their strike action applied for an injunction to prevent their employers from carrying out the threat. The court held that, in order to be awarded the remedy, the strikers should undertake that they would
withdraw their strike action if the injunction was granted. Since they refused to do this,
the injunction was refused.
‘Delay defeats equity’
Where a claimant takes an unreasonably long time to bring an action, equitable remedies
will not be available. The unreasonableness of any delay will be a matter of fact to be
assessed in view of the circumstances in each case. In Leaf v International Galleries
(1950) the claimant bought a painting of Salisbury Cathedral described (innocently) by
the seller as a genuine Constable. Five years later, the buyer discovered that it was nothing of the sort, and claimed the equitable remedy of rescission, but the court held that the delay had been too long.
Equitable remedies
Equity substantially increased the number of remedies available to a wronged party. Injunction Specific performance Rectification Rescission
Injunction
This orders the defendants to do or not to do something.
Specific performance
This compels a party to fulfil a previous agreement.
