INTRODUCTION

The Origin and Development of Equity

Maxims of Equity and concept of Estoppel
Reception of Equity in Malaysia

Legal Definition of Equity.

It is a body of law that addresses concerns that fall

outside the jurisdiction of Common Law.
- Equity has a very narrow and special meaning, where it
is a body of rules, developed and applied by the Court
of Chancery (historically).
- This court was presided by the Chancellor and the
rules were developed under his authority.

2. Origin of Equity
How Equity developed?
- Developed in the deficiencies of the Common Law.
- There are few problems occurred that lead to the
development of Equity.

1st problem
- Common Law has loopholes- where a remedy was not
available or where a remedy was available but was not
appropriate to the particular loss of the Plaintiff.
- At that time, the chancellor was responsible for the
issuance of Writs and all actions had to be commenced
by the issuance of the Royal Writ.
2nd problem
- Where a plaintiff may have had a Common Law
remedy but he was prevented from enforcing it
because of the power and influence of other parties-
eg: victim of the Jury who heard the case. (where the
Jury is corrupted)

3rd problem
- Rigidity of Common Law rules, where the Common
Law requires formality.
- Eg: Two persons entered into a verbal contract/ oral
agreement where under the Common Law, it requires
a contract to be in writing.
- As a result, Common Law would not recognise the
contract nor grant any remedies on it, regardless the
merit of the case.
- Thus, equity comes as GLOSS ON THE COMMON
LAW.
How Equity came into the picture?
Equity worked alongside the Common Law and
provided different solution to the problem.
If the parties feel that the Common Law would not
provide an appropriate solution to their case, the
parties could petition to the King and the Council
asking that justice be done.
This petitions were referred to the Chancellor which
called suits.
Chancellor
- The Chancellor was very important as he was
responsible in the issuance of the Royal Writs.
- The Chancellor was also the Head of the Common Law
and what he did was to ensure that the Common Law
worked in an acceptable way.
- As for the petition, the Chancellor responded to it by
issuing a decree without the procedures usually
associated with a court hearing.
- However, the decision is uncertain and unpredictable
as it is based on the ideas and beliefs, judgments and
conscience of each particular Chancellor.
3. Systemization of Equity
Introduction of Rigidity
- As mentioned earlier, the equity varied with the
differences of the Chancellors verdicts/ beliefs that is
to be described as uncertain and unpredictable.
- Thus, the appointment of the Chancellors brought a
gradual improvement towards the rigidity of the
Equity.
 CHANCELLOR

LORD LORD LORD ELDON

NOTTINGHAM HARDWICKE
- Gradually, decisions began to be based on precedent.
- This developmet took place at the same time as
lawyers began to be appointed as Chancellors and
eventually a body of law evolved which was as rigid as
the Common Law.
- It became more predictable, precedent- based system ,
started at the end of 17th century.
EQUITY VS. COMMON LAW
- Generally, the approach of equity is to follow the
Common Law unless there is justified/sound reason to
do otherwise.
- However, where two bodies of laws exist, there must be
occasion/s they are conflicting.
- When conflict arose between Equity and Common
Law, equity would use the common injunction , which
had the effect of preventing the Common Law
judgments from being entered.
- This of course, brought disatisfaction to the common
lawyers, and it remains in active conflict for many
years.
- This conflicting era was not resolved until the reign of
James I, when it was decide that the rules of equity
should prevail.
- The Supreme Court of Judicature Act 1873 S. 25(11)
stated that in case of conflict between rules of Equity
and Common Law, Equity should prevail.
4. The maxims of equity
- The maxims of equity can be described as a set of general
of principles which are said to govern the way in which
equity operates. The maxims are applied only when the
court feels it is appropriate.

- The following is a list of maxims together with some

instances of their application.

Maxims of Equity:
Equity follows the law;
Where the equities are equal, the law prevails. Where the
equities are equal, the first in time prevails;
Equity looks to the intent/ substance rather than to the
form;
 Equity looks on that as done which ought to be done;
Equity imputes an intention to fulfil an obligation;
Equity acts in personam;
Equity will not suffer a wrong to be without a remedy;
He who seeks equity must do equity;
He who comes to equity must come with clean hands.
Delay defeats equity
 Equity follows the law.
- Implies that equity would intervene and overrule the
common law if justice required it.
Case: Re Diplock [1948] 2 All ER 318
 Where the equities are equal, the law prevails.
Where the equities are equal, the first in time
prevails;
- This maxims concerned with priorities, that is to say
which of various interests prevails in the event of a
conflict.
 Equity looks to the intent/ substance rather than
to the form;
- Courts of equity draw a differences between which is
matter of substance/ intention, and which is matter of
form.
- It is said that by insisting on the form, where the
substance have to be defeated, it holds it as
inequitable.
Case: Walsh v Lonsdale (1882)21 Ch D 9
 Equity looks on that as done which ought to be
done
- This relates to specific performance.
Case: AG for Hong Kong v Reid [1994] All ER 1
 Equity imputes an intention to fulfil an obligation
- Where a person has undertaken an obligation his later
conduct will, if possible, be interpreted as fulfilment of
that obligation.

Equity acts in personam

- The main remedy available at common law is damages.
- However in equity, the remedy acted against the
person and ordered him to do something (specific
performance) or not to do something (injunction)
- Other equitable remedies are rescission and
rectification.
- If the order of the court is not obeyed then the
imprisonment may follow.
 Equity will not suffer a wrong to be without a
remedy.
- This maxim indicates that the equity will not allow the
technical defects of the common law to prevent worthy
plaintiffs to obtain redress/ remedy.
- The development of equitable doctrines and remedies
are somehow be seen as the way or solution to prevent
unjust result arising from the enforcement of legal
rights.
- Eg: The use of specific performance to enforce
contracts not enforceable at law (like oral contract).
 He who seeks equity must do equity
- Though the previous maxim indicates equity will
intervene where the common law cant preserve
justice, it should not be thought that equity will
automatically intervene whenever a certain situation
arises.
- Case: Chappell v. Times Newspapers [1975] 2 All ER
233
 He who comes to equity must come with clean
hands
- A party seekin an equitable remedy must not be guilty
of unconscionable conduct
- Case : Cross v Cross (1983) FLR 235
- Case: Tinsley v Milligan [1993] 3 All ER 65
5) ESTOPPEL
Meaning & Concept
- It is an ancient doctrine of remedy
- Meaning : That a person must keep their promise , if
another rely on their promise and acts to their detriment.
- It provides a useful mean of dealing in a difficult situation.
- Lord Denning : judge should not be bound by the strict
legal rules if it would lead to unjust result.

Types of Estoppel
- Estoppel by representation
- Promissory Estoppel
- Proprietory Estoppel
 Estoppel by representation
- Principle: person who makes an unambiguous
representation, by words, by conduct or by silence, of
an existing facts and causes another party to act to his
detriment (damage/loss) in reliance on the
representation will not be permitted subsequently to
act inconsistently with that representation.

Promissory Estoppel
- Basically prevents a party to a contract from acting in a
certain way because they promised not to act in that
way, and the other party to the contract relied on that
promise and acted upon it.
- Case: Central London Property trust Ltd v High
Trees House Ltd (1947) KB 130
 Proprietory estoppel
- Applicable where one party knowingly encourages
another to act, or acquiesces (assent/consent)in the
others actions, to his detriment and in infringement
to the first partys right.
- In some circumstances, this doctrine may create a
claim and an entitlement to positive proprietory rights
- Case: Greasly v Cooke (1980) 1 WLR 1306
Other cases:
- Willmott v Barber [1880]1 5 Ch. D 96;
- Ramsden v. Dyson [1981] 2 WLR 576;
- Amalgamated Investment and Property Co. Ltd
(in liquidation) v. texas Commerce Inteenational
bank Ltd (1982) Q.B. 84;
- Re Bansham [1986] 1 WLR 1498
- Taylor v Dickens [1998] 1 FLR 806
 RECEPTION OF EQUITY IN MALAYSIA
STATUTORY
RECEPTION: JUDICIAL RECEPTION:
- Election
- Trustee Act 1949
- Maxims of Equity
- Specific Relief Act 1950
- Rules against Pertuity
- Civil Law Act 1956
- Ademption
- Law Reform (Marriage
- Rectification
and Divorce) 1976