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Thread: Equity means fairness. Historical development.

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    28 Equity means fairness. Historical development.

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    Equity
    Equity means fairness.
    Historical development.
    Equity developed because of problems in the common law.
    1) In the mediaeval times it was only possible to start a case by means of a writ and in 1258 the provisions of Oxford restricted the issue of writs for new types of actions this. Meant that new claims had to fit into an existing type of writ and if this couldn’t be done if there could be no claim even if an injustice would result.
    2) The law was highly technical and the wording had to be exact if there were only errors the claim would fail.
    3) The only remedy the common law courts could give was damages. This was a sum of money by way of compensation from the defendant to the plaintiff. This was not suitable for many types of action e.g. trespass.
    Because of these problems a separate system developed alongside the common law known as EQUITY.
    This was dispensed by the Lord Chancellor in the name of the king and was far more flexible. Lords Chancellors used it to address injustices not resolved by the common law courts. They could:
    1) Avoid following precedents in the interests of fairness and justice.
    2) They could look at the intentions of the parties.
    3) They could develop new remedies more suitable than damages. It supplied suitable remedies. Injunctions, specific performance, rescission and rectification’s. These are still used today see later.
    Eventually a court of CHANCERY came into being to operate these rules of equity. However equity was still not a complete system of law. It softened the strict rules of the common law and filled in the gaps.
    Then in 161, the Earl of Oxford’s case arose. In this case the king ruled that where there was conflict between the common law and equity then equity should prevail. This decision was necessary because the two systems operated side by side and independently so conflict was bound to arise.
    Development.
    Because of the flexibility equity gained a reputation for uncertainty during the fifteenth and sixteenth century. John Seldon in the seventeenth century was famously quoted as saying “equity varies with the length of the Lord Chancellor’s foot.”
    However, as a result of this the Chancery courts began to use precedent just like the common law courts and by the nineteenth century courts had become as rigid in their approach as the common law courts and also as slow. Thus their advantages over common law gradually disappeared. There was also the problem that litigants who wanted equitable remedies and damages had to take them to two separate actions. This led to reform.
    Common law proceedings act 1852-60
    Gave common law courts the power to issue equitable remedies.
    Judicature Act 1873 – 1875.
    Unify the chancery and common law courts into one system, which could issue both types of remedy. If there was conflict between the common law rule and the equitable rule, equity would prevail.


    Operation of Equity.
    Equity follows precedent just as common law does but it also follows what are known as ‘maxims’ or sayings.
    1) ‘Equity looks at intention and not the form.’
    Berry v Berry 1929.
    In this case a deed was held to have been altered by a simple contract. Under common law rules a deed could be altered by another deed but equity decided that as the parties had intended to alter the deed it would be fair to take into account that intention rather than the fact that they got the formalities wrong.
    2) ‘He who comes to equity must come with clean hands.’
    In other words, an equitable remedy will not be granted to someone who has acted unfairly.
    D and C Builders v Rees (1965)
    A small building firm had done work for Mr and Mrs Rees. The bill was £732 of which Mr Rees had paid £250 in advance.
    When the builders asked for the rest, the Rees’ who knew the builders were in financial difficulty claimed the work had not been done properly and offered only £300. The builders reluctantly accepted but sued afterwards for the remaining £182.
    As common law payment of a debt is not considered as satisfying a debt and the builders claimed the extra, equity however, has a doctrine of ‘equitable estoppel’ under which the courts can declare the plaintiff is prevented or ‘estopped’ form claiming the rest. Lord Denning in the court of Appeal refused to apply this doctrine because the Rees’ had taken unfair advantage they had not come to the court with clean hands.
    3) Delay defeats equity.
    If a plaintiff waits too long before claiming it might lead to unfairness to another party.
    Leaf v International Galleries (1950)
    The plaintiff was sold a painting, which both parties mistakenly believed was a ‘Constable’. However the painting was a fake but the court did not award the equitable remedy of rescission (return of the parties to pre-contractual position) because there had been a delay of 5 years between the contract and the discovery.
    4) ‘Equity will not suffer a wrong without a remedy.’
    This allows equity to create new remedies where otherwise the plaintiff would not have an adequate remedy and would only be able to claim damages this maxim allows equity to create new remedies as and when they are needed.
    E.g. Anton Pillar orders, Mareva Injunctions.
    So where a case relies on a rule of equity rather than a common law rule can only be applied if the maxims are satisfied e.g. No rescission or estoppel if you delay too long or do not come to equity with clean hands.
    Equitable remedies
    Equitable remedies are not discretionary (at the judge’s discretion) so the court does not have to grant them even if the plaintiff wins the case (damages are rewarded as of right.) an equitable remedy will only be granted if the court thinks that it is fair in all circumstances. Once a remedy has been rewarded by a judge, it is a contempt of court to ignore it and can lead to a fine or even imprisonment.
    The most important remedies are:
    a) Injunctions.
    An injunction is an order to do something or stop doing something. If a court orders to do something it is called a mandatory injunction. If the court orders you not to do something it is called a prohibitory injunction.
    E.g. Kennaway v Thompson (1980)
    An injunction was issued restricting the times when powerboats could be used on Lake Windemere.
    Warner Brothers v Nelson (1937)
    Warner Brothers gained an injunction stopping the actress Betty Davis from making a film for another company.
    Damages can be awarded on top of injunctions for past nuisance for inconvenience as in Kennaway.
    Interlocutory injunctions protect a party’s rights while waiting for the case to be heard, these are only awarded in rare cases where the damage done during the wait could not be compensated for e.g. 1996 Princess Diana was awarded an interlocutory injunction against a photographer.
    b) Specific Performance.
    This is an order that a contract should be carried out as agreed. These most usually arise over land purchases, are rarely granted and are never granted where personal services are involved.
    c) Rescission
    Again an equitable remedy for use in contract cases. It aims to return the parties to their pre-contractual position. E.g. if a contract that involved buying goods was rescinded the buyer would have to return the goods to the seller and the seller would have to return the purchase price to the buyer.
    E.g. Leaf v International Galleries (1950)
    A rescission order was not granted because there had been a delay of five years – ‘delay defeats equity.’
    d) Rectification
    Where a mistake has been made in a document, so that it is not a true version of what the two parties agreed, the document should be altered to reflect the party’s intentions.
    E.g. Berry v Berry (1929)
    ‘Equity looks into the intention and not the form.’
    These remedies will only be applied against the maxims of equity.
    Relevance of equity today.
    Equity is still relevant today.
    E.g. Mortgages are based on the idea that one person owns the legal interest in a property but has to use that property for the benefit of the another.
    E.g. Trusts also depend on equity.
    Equity is still developing and providing new legal concepts.
    E.g. equity or promissory estoppel.
    This remedy was first suggested by Lord Denning in Central London property LTD v High Trees House LTD (1947). A block of flats in South London was leased to a company for 99 years. The company then sub-let flats to individual residents. During World War 1 many people moved out of London leaving most of the flats empty. The main landlord agreed that while the war lasted, the company leasing the flats need only pay one half the normal rent for the lease. After the war, the landlord claimed the full rent again. Denning decided that they were entitled to it, but he also considered what would have been the position if they had tried to claim the full rent for the period of the war. Strictly speaking the original contract for the 99-year lease would have allowed such a claim, but Denning said Equity would have ‘estopped’ them from claiming for this period.
    Since this case it has been recognized that it would be inequitable to allow one party to rely on the strict terms of the contract because they had led to the other party to believe that they will not do so. Page 243 in Green ‘English law’ casebook.
    More recently deserted wife’s equity has appeared, so a wife and children have an equitable interest in the matrimonial home if the husband deserts them even if the house was not in joint names.
    Equity continues to develop new remedies, e.g.:
    1) Section 37 Supreme Court Act (1981) says that the High Court may grant an injunction in all cases in which it appears ‘just inconvenient to do so’ . This allows them to do be used for instance, in domestic violence cases or to prevent nuisances.
    2) Mareva Injunctions.
    Mareva Compania Naviera South Africa v International Bulk Carriers (1975)
    This type of injunction is used where there is a risk that the assets of one of the parties will be moved out of the UK before the case comes to trial.
    3) Anton Pillar Order.
    Anton Pillar v Manufacturing Processes LTD. It orders the defendant to allow the plaintiff to search his or her premises to take away any documents that may be relevant to a case.

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    Very Nice post... good work...
    AL-MADANI

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    thanx dear

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