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Jurisprudential Traditions
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The future of Equity and Law as Separate Jurisprudential
Traditions
Under Australian law, the existing non-statutory law has been
divided into equity and commonlaw. At the time of settlement in
1788, both equity and common law and other applicableImperial
statutes had evidently formed the legal system within New South
Wales. This legalsystem was later adopted by other Australian
colonies in existence [1].Since the inception ofthe Judicature Acts
of1873 and that of 1875, the future of equity and common law as
distinct
jurisprudential traditions has been subject to different
perceptions. It is thus important to look atthe position of common
law and equity prior to the Judicature Act of 1873-75, its
aftermath anddiffering perceptions as to whether it was a fallacy
or not with regard to Harris v Digital Pulse PtyLtd [2].
1.1 Common Law and Equity Prior to the Judicature Act
1873-75
The early development of equity categorized it as a separate
system from the then existingcommon law. By virtue of the Norman
Conquest, several common law courts emerged in thefollowing
centuries that came. However, Lord Chancellors intervention
gradually developed adistinct body of law called equity which was
well established by the fifteenth century. From thenon, the
Chancellors jurisdiction was exercised via what later becomes court
of Chancery. Theexistence of these two systems at times conflicted
because of the way the two courts operated.By virtue of section 79
of the Common Law Procedure Act of 1854, Common law courtspossessed
a limited power of issuing injunctions while the Chancery Amendment
Act of 1858gave the court of Chancery power to issue or award
damages as opposed to specificperformance and injunctions.
The two systems had a lot of conflict to the extent that, by the
nineteenth century a number ofseries of Parliamentary reports
resulted to the Judicature Acts 1873 and 1875.The two Actswere
responsible for amalgamating the existing superior courts into a
single Supreme Court ofJudicature. This Supreme Court replaced the
courts of Queens Bench, Court of Exchequerchamber, Exchequer and
Common Pleas as well as the court of Chancery, and the court
ofappeal in Chancery. The Supreme Court comprised of both the Court
of Appeal and the HighCourt [3].It administered both equity and
rules of common law thus bringing the question as towhether this
was an amalgamation of administration or fusion of the rules?
Amalgamation of Administration of Fusion of Rules?
Many academicians have distinct perceptions as to whether the
Judicature Acts fused both therules of equity and common law to
make then one, or whether it was just an amalgamation ofthe two
rules so that each of them retains its identity but administered in
the same court. Somescholar think that the rules of common law and
equity are totally fused and are thus no longerdistinguished while
others perceive the effect of the Judicature Act to have been
procedural.
The perspectives discussed below accrue from writers, judges and
other scholars that eitherside on the fact that there was fusion of
rules or fusion of only administration.
Fusion of Administration and not rules
n Salt v Cooper [4],Sir George Jessel MR, stated to the effect
that, the intent of the JudicatureAct was not to fuse the two rules
, but rather administrating law and equity under a singletribunal.
According to Professor Ashburner although equity and common law are
streams of
jurisdiction running through the same channel, they run side by
side without mingling their
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Jurisprudential Traditions
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waters. Professor JH Barker also states that if for historical
reasons the law of equity hadbecome peculiar in the court of
chancery, equity was a way of gaining justice in
particularcircumstances not provided under common law [5].In MCC
Proceeds Inc v Lehman BrosInternational [6]Mummery LJ revealed the
fact that, the Judicature Acts intended to gainprocedural
improvements when it comes to the administering of law and equity.
This was thusnot to transform the existing equitable rights into
legal titles or fuse the equitable rules with
common law.
Fusion fallacy has recently been subjected to judicial scrutiny
under the decision of the NewSouth Wales Court of Appeal in Harris
v Digital Pulse Pty Ltd [7]. In this case, the facts were tothe
effect that, the defendants breached their contractual as well as
fiduciary obligations ofloyalties by diverting projects away from
their employer who was the plaintiff. In the trial court,the judge
held the defendants liable to either make an equitable compensation
or account forthe profits at the election of the plaintiff. The
trial judge also awarded exemplary damagesagainst the defendants
for having breached a fiduciary duty. On appeal, this decision
washowever reversed by the majority. The appeal decision found that
there had been no power toaward exemplary damages against
defendants for breach of a fiduciary relationship. The
ratiodecidendi in this decision was that, an equitable relief is
not supposed to pursue penal
objectives because this was inappropriate.
According to Meagher, Gummow and Lehanes Equity, Doctrines and
Remedies[8], theAustralian authority is in support of the orthodox
position to the effect that, fusion fallacyrepresents. The English
as well as commonwealth authorities however are divided in
thismatter. As observed in Re Harris case, there was a cross-over
of remedies which accruedbecause of holding that even under
breaches of equitable obligations, exemplary damagescould be
awarded.
2.2 Fusion of Rules as opposed to mere Administration
Some scholar and judges believe that, the Judicature Act did not
merely fuse the administrationof the rules of law and equity, but
rather fussed the rules themselves. According to LordDenning in
Errington v Errington [9]stated that, the rules of equity and
common law have beenfussed for almost eighty years by that time. In
Tinsley v Milligan [1994] 1 AC 340, LordBrowwne-Wilkinson held to
the effect that, English law now has one single law that
containsboth legal and equitable interests. Therefore, Lord Browne-
Wilkinson saw that a person inownership of either type of estate
possessed a right of property that amounted to a right in remas
opposed to merely a right in personam. It was thus held that the
equitable principle thatgoverns when property or a title was
affected under illegality had now become one aftermerging the
common law rule. Furthermore, in Boyer v Warbey [1953] 1 QB 234,
Lord Denningmade a clarification of what he meant by fuse .He held
inter alia that, prior to the Judicature Act1873 the doctrine of
covenants relating to land only applied to those covenants that
were underseal as opposed to agreements. However, the judge stated
that since the fusion of Equity andcommon law, this position is not
different.
In the case of United Scientific c Holdings Ltd v Burnley
Borough Council [10], Lord Diplockexplained his perception of
Professor Ashburners metaphor of how equity and law are twosteams
flowing in the same channel but never mingling. In his view, the
said metaphor hasbecome both deceptive and mischievous. He states
that the Judicature Act 1873 brought aboutthe fussing of adjectival
law system and the substantive law which were formerly
administeredunder the courts of Chancery and court of law. Lord
Diplock says that the two streams have
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