EQUITY TODAY

Sources: English Legal System, 7th Ed., Elliott, C. and Quinn, F., Pearson Longman, 2006 and

English Legal System, 3rd Ed., Martin, J., Hodder Arnold.

1

• The Judicature Acts 1873-75 did not fuse common law and equity, only their administration. There is still a body of rules of equity which is distinct from common law rules, and acts as a supplement to the common law. Although all rules are implemented by the same courts, the two branches of law are separate. Where there is conflict equity still prevails.

2

Equitable Maxims

• Both the common law and equity lay down rules developed from precedents, but equity also created maxims that had to be satisfied before equitable rules could be applied. These maxims were designed to ensure that decisions were morally fair.

3

‘He who comes to equity must come with clean hands’

• This means that an equitable principle or remedy will not be granted to a claimant who has not acted fairly. This is shown by D & C Builders Ltd. V Rees (1965) where the Appeal Court refused to apply the doctrine of equitable estoppel to protect the builders against the Rees’s action in contract, because the builders had acted unfairly towards the couple.

4

‘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) striking employees of the newspaper were refused an injunction to prevent their employer sacking them, because they refused to end their strike.

5

‘Delay defeats equity’

This means that a claimant must not wait too long before making a claim as this might lead to unfairness to the other party. In Leaf v International Galleries (1950) a person was sold a painting which both parties mistakenly believed was by Constable. The court did not award the equitable remedy of rescission, since there had been a five year delay between the contract and the discovery that the painting was not a Constable.

6

‘Equity will not suffer a wrong to be without a remedy’

• Equity is able to create new remedies where otherwise the claimant would not have had an adequate remedy for the case, but would have only been able to claim the common law remedy of damages. Anton Piller Orders and Mareva injunctions are examples of new equitable remedies that were created in the last century in order to fill in gaps in the common law.

7

Equitable remedies

• Equity created new remedies to supplement the common law remedy of damages.

• Equitable remedies are discretionary – the court does not have to grant them even if the claimant wins the case, e.g. Miller v Jackson (1977).

• The common law remedy of damages is awarded to a winning claimant as of right.

• Ignoring an equitable remedy is contempt of court.

8

Injunctions

• An injunction orders the defendant to do or not to do something.

• A mandatory injunction orders the defendant to do something, e.g. demolish an illegally built structure.

• A prohibitory injunction commands the defendant to refrain from doing something

9

• In Kennaway v Thompson (1980) the court granted an injunction restricting the times when power boats could be raced on a lake.

• In Warner Brothers v Nelson (1937) the injunction ordered the actress Bette Davies not to make a film with another film company, because that would have breached her contract with Warner Brothers.

• A claimant can be awarded both an injunction (for the future) and damages (for the past).

10

• An interlocutory injunction, (sometimes called an ‘interim injunction’), may be available to protect one party’s rights while waiting for a full hearing of the case. This will be so only where the court believes that the delay before the trial will cause irreparable harm to one of the parties.

11

Specific performance

• This is an order that a contract must be carried out as agreed.

• It is only awarded in exceptional circumstances, where the court believes that damages cannot adequately compensate the claimant. Thus it is usually used in cases concerned with contracts to purchase land (no two parcels of land being identical).

• This remedy is not available to force someone to carry out personal services, e.g. an employment contract.

12

Rectification

• Where a mistake has been accidentally made in the writing of a document, an order of rectification can alter the wording of it so that it accurately reflects the true intentions of the parties involved.

13

Rescission

• This is another remedy used in some contract cases to restore the parties to the contract to the position they were in before the contract was agreed.

14

• Equitable rights, interests and remedies remain important in the law today. Concepts such as mortgages and trusts are founded on the idea that one person owns the legal interest in property but has to use that property for the benefit of another. This person is said to have an equitable interest in the property.

15

• It is difficult to imagine life today without mortgages and trusts since they are used widely in setting up such matters as pension funds, as well as within families when property is settled on younger members of the family or between husband and wife.

16

• In the nineteenth century, the courts first created the idea of ‘the declaration.’ This has been updated and is of considerable relevance today.

• A claimant can ask the High Court or a county court to declare the law on some disputed point. This can be seen in cases such as Airedale NHS Trust v Bland [1993], where a declaration was granted stating that a hospital trust could discontinue life-sustaining treatment for a man who had been in a persistent vegetative state since the Hillsborough disaster of 1989.

17

• That equity is capable of creating new concepts is also illustrated by the development of the idea of ‘promissory estoppel’.

• This was particularly well illustrated by Central London Properties Trust Ltd v High Trees House Ltd (1947) (the High Trees case).

18

• Another fairly recent equitable concept is the ‘deserted wife’s equity.’ This was the idea that where a husband had deserted his wife and children, the wife had an equitable interest in the matrimonial home, even if it was not owned jointly, so that she could remain in the property while the children were young. This right for partners was eventually incorporated in the Matrimonial Homes Act 1967.

19

• Two recent new equitable remedies (mentioned earlier) are the Mareva injunction (now called the ‘freezing injunction) and the Anton Piller Order (re-named the ‘search order’).

• The Mareva injunction came from Mareva Companiera Naviera SA v International Bulkcarriers SA (1975). This allows the court to order third parties such as banks to freeze any of the defendant’s assets in their control, so that they cannot be removed from the jurisdiction of the courts.

20

• The Anton Piller order (search order) requires the defendant to allow the claimant to search his or her premises and seize any documents or other material that may be relevant to the case.

• It can be seen therefore, that equity still has a role in the modern legal system, continuing to supplement the common law.

21