 Common law = judge-made law.

 Common law also = law made and developed by

judges in the Common law courts (as opposed to
that developed by judges in Chancery courts,
which was known as equity).
 Middle ages – common law was a formalistic body
of rules interpreted strictly.
 Where no remedy/harsh result, possibility to
petition the King to exercise his discretion. With so
many petitions coming to the Chancellor –
separate court required.
 Earl of Oxford’s case (1615) 1 Ch Rep.1 –
Lord Chancellor Ellesmere – the function of
equity was ‘to soften and mollify the
extremity of the law’
 Lord Dudley v. Lady Dudley (1705) Prec Ch
241 – Lord Chancellor Cowper – “Equity is
no part of the law, but a moral virtue which
qualifies, moderates and reforms the rigour,
hardness and edge of the law”
 Although based upon ideas of morality and justice,
ultimately, the intervention of the Lord Chancellor
depended upon the exercise of his own conscience.
This was an inherently arbitrary approach.
 John Seldon (English Jurist) – Equity is a roguish thing.
For law we have a measure, know what to trust to;
equity is according to the conscience of him that is
Chancellor, and as that is larger or narrower, so is
Equity. ‘Tis all one as if they should make the standard
for the measure we call ‘foot’ a Chancellor’s foot; what
an uncertain measure would this be! One Chancellor
has a long foot, another a short foot, a third an
indifferent foot. ‘Tis the same thing in the Chancellor’s
conscience.
 But over the years, Equity became more rule-based and
principled, with identifiable doctrines being
recognized. This was largely because the Equity
jurisdiction was transferred from the Chancellor to
judges, whose decisions had value as precedent for
future decisions, so that like cases could be treated
alike.
 The dual court structure resulting from having distinct
Common law and chancery courts, in which different
bodies of law were applied, caused great
inconvenience and injustice: it meant that the claimant
had to choose the right court in which to pursue the
claim. If the wrong court was chosen, the claimant
would have to start again in the other court, leading to
lengthy delays and high costs.
 The complexity of litigation in the 19th century was to
some extent resolved by the enactment of the
Judicature Acts of 1873 and 1875, which abolished the
Common Law and Chancery courts and replaced them
with a single High Court. The effect of this legislation
was to fuse the administration of Common law and
Equity. The Judicature Acts emphasized that Equity, as a
body of law, could be applied in any court within the
High Court. This is now recognized by the Senior
Courts Act, 1981. It follows (for example) that remedies
derived from Common Law or Equity jurisdiction can
be awarded regardless of the court in which the claim
was heard.
Every court [exercising jurisdiction in England or Wales]
shall give the same effect as hitherto –
(a) To all equitable estates, titles, rights, reliefs, defences
and counterclaims, and to all equitable duties and
liabilities; and
(b) Subject thereto, to all legal claims and demands and
all estates, titles, rights, duties, obligations and
liabilities existing by the common law or by any
custom or created by any statute,
and, subject to the provisions of this or any other Act, shall
so exercise its jurisdiction in every cause or matter before
it as to secure that, as far as possible, all matters in dispute
between the parties are completely and finally
determined, and all multiplicity of legal proceedings with
respect to any of those matters is avoided.
 But it is important to appreciate that the Judicature Acts
only fused the administration of the Common Law and
Equity, not the two bodies of law.
 Sir Raymond Evershed (Judge) – the so-called ‘fusion’
of law and equity was a procedural matter and (save
incidentally and because procedural matters cannot
under our system sensibly be divorced from
substantive law) the function of equity in relation to the
common law was not thereby changed.
 The principle that Equity prevails over Common Law
was maintained by the Judicature Acts, and is also now
recognized in the Senior Courts Act, 1981. However,
over the years, the operation of Common Law and
Equity has become closer.
Subject to the provisions of this or any
other Act, every court exercising
jurisdiction in England or Wales in any civil
cause or matter shall continue to
administer law and equity on the basis
that, wherever there is any conflict or
variance between the rules of equity and
the rules of the common law with reference
to the same matter, the rules of equity shall
prevail.
 Equity continues to have a significant role in many contemporary
aspects of the law, including commercial and corporate law.
 Discretionary Jurisdiction – Modern Equity is preferably
characterized as doctrinal, in the sense that it is made up of
identifiable rules that are to be applied strictly without any
significant role for judicial discretion. But judicial discretion
continues to play a significant role in modern equity.
In re Diplock [1948] Ch 465 – if a claim in equity exists, it must be shown
to have an ancestry founded in history and in the place and precedents
of courts administering equity jurisdiction. It is not sufficient that
because we may think that the ‘justice’ of the present case requires it,
we should invent such a jurisdiction for the first time.
The correct characterization - Equity is grounded on rules,
principles and doctrines that are strictly interpreted, but their
application and the remedies awarded can be tempered by the
exercise of judicial discretion to ensure a just and fair result.
 Unconscionability - The key justification for
the recognition of a trust, Equity’s most
significant creation, is that ‘Equity operates
on the conscience of the owner of the legal
interest’.
 Is unconscionability a guiding principle or a
rule of substance?
 Does it refer to what the judge would
consider unconscionable or what a
reasonable person would?
 Although the administration of Common Law and
Equity has been fused into a single procedural
system, this has not resulted in the substantive
fusion of Common Law and Equity into a single body
of rules.
 It wasn’t uncommon for legal systems to have a duality.
For example, Roman law civil and praetorian/bonitary
law. Lord Millet - “One system provided certainty, the
other the necessary flexibility and adaptability to enable
justice to be done. But the common law and equity are not
two separate and parallel systems of law. The common law
is a complete system of law which could stand alone, but
which if not tempered by equity would often be
productive of injustice, while equity is not a complete and
independent system of law and could not stand alone.”
 Growing evidence of assimilation. Equitable jurisdiction may result in
compound interest payments extended to common law claims of
breach of contract and tort; equitable remedy of account of profits
may exceptionally be available where the defendant has breached a
contract; growing assimilation of principles relating to award of
compensatory remedies for equitable wrongs with those concerning
Common Law wrongs, at least where the equitable wrongs has
occurred in a commercial context. This is particularly notable in the
case of recession of contract for duress at Common Law; regulation of
exploitative transactions, such as where one party unduly influences
another to enter into a disadvantageous contract or to make a gift.
 Equity’s most important contribution to English law is trust. The
‘trustee’ is a legal owner of property at Common law, but does not
have absolute, beneficial ownership because Equity recognizes that
they are holding it for somebody else (a beneficiary). In equity, the
trustees’ ownership is wholly burdensome and the beneficiary has
exclusive interest in the trust property.
 Those who seek equity must do equity – Is the
claimant willing to act fairly to the defendant in the
future?
 Chappel v. Times Newspapers Ltd. [1975] 1 WLR 482
– Lord Megarry J. “If the plaintiff asks for an
injunction to restrain a breach of contract to which he
is party, and he is seeking to uphold that contract in
all its parts, he is, in relation to that contract, ready to
do equity….One may leave on one side any
technicalities of law or equity and simply say, in the
language of childhood, that he is trying to have it
both ways: he is saying “You must not break our
contract but I remain free to do so.”
 Improper relief must relate to the relief that is sought in some
way. Just because claimant’s general conduct is unacceptable
does not mean that Equity will deny relief to the claimant.
 Argyll (Duchess) v. Argyll (Duke) [1967[ Ch 302 – “the
cleanliness required is to be judged in relation to the relief
that is sought”.
 But this maxim does not deny relief where it is not
necessary for claimant to rely on improper conduct to
establish an equitable claim. If illegality does not form part
of the case and is not available to defendant as a defence,
then the court is not bound to reject the case. This is
controversial – judges may not apply maxim if there is any
kind of recourse to underlying fraudulent or illegal purpose,
no matter how remote.
 Nouniversality – where the obligation to do
what ought to be done is not an absolute
duty, but only an obligation arising from
contract, that which ought to be done is
only treated as done in favour of some
person entitled to enforce the contract as
against the person liable to perform it.
 Ambiguous meaning – what if it followed
absolutely? Then no separate requirement
of specific equitable doctrines.
 Jones v. Kernott [2011] UKSC 53 – Two parties
own a house that is registered in their joint
names. “The starting point is that equity
follows the law and they are joint tenants in
both law and equity”.
 A volunteer = somebody who has not provided consideration for a
particular transaction (e.g. recipient of a gift). Where a donor
purports to make a gift but it is not effective at law, equity will not
perfect the imperfect gift. So if the settlor fails to transfer property
to a trustee, equity will not intervene to perfect the transfer. But this
is subject to exceptions (e.g. where transferor has done everything
necessary to perfect title)
 T Choithram International SA v. Pagarani [2001] 1 WLR 1 – Until
comparatively recently the great majority of trusts were voluntary
settlements under which beneficiaries were volunteers having
given no value. Yet beneficiaries under a trust, although volunteers,
can enforce the trust against the trustees. Once a trust relationship
is established between trustee and beneficiary, the fact that a
beneficiary has given no value is irrelevant.
 Unless intention of parties is contrary, where there are equitable
interests in property, Equity presumes that they are equal interests.
 Re Steel [1979] Ch 218 - “When the maxim ‘equality is equity’
comes to be applied, it often, and I think usually, will mean
mathematical equality, in that no other basis of equality can be
discerned: but given suitable circumstances a true equality of
treatment may require the application of a mathematical inequality,
and instead a proportionate equality….There seems to me to be a
real difference between shares of a fund on the one hand and
legacies of fixed amounts on the other hand: one moves in a world
of proportions, and the other in a world of determinate sums...I find
it difficult, too, to see why in dividing the residue the intention
should be treated as being to preserve the proportions rather than
the gaps in amount, instead of being the opposite....as a matter of
last resort, the simplicity of mathematical equality is to be preferred
to any process of proportionate division.
 Basis of rectification of contracts, where
the words do not reflect common
intention of parties.
 Basis of implied trusts.
 Also the basis of declaration of a trust as
a sham (despite settlor’s express
intentions).
 Rule No.1 – Usual rule is that the interest that was
created first will have priority over the interest created
later. “Where the equities are equal, the first in time
prevails”.
 Special circumstances where order reverses is where
an interest has been appropriately registered, because
registration ensures that an interest has priority over an
unregistered interest.
 A subsequently acquired legal interest may have
priority over a previously created equitable interest if
the legal interest was acquired by a bona fide
purchaser for value without notice. Here, the legal
interest has priority over the equitable interest in both
Equity and law.