Traditions of Equity : Flashcards
(21 cards)
Aristotle (What is equity?)
‘and this nature of equitable correction of law where it is defective owing to its universe’
Maitland (What is equity?)
‘that body of rules administered by our English Courts which were it not for the operation of the judicature acts would be administered by those courts which would ne know as equity’
Worthington (What is equity?)
‘there is clearly no “general” theory of equity’
Equity as a spectrum of meanings
- Fairness & justice
- Rules previously from the Court of Chancery
History of equity
- The Curia regis (kings council) created by the first Norman kinds in 11th century begging of centralisation
- C the Chancellor is the keeper of kings conscience and the keeper of great seal
Emergence of Court of Chancery
Latin : writs for state of action in common law courts, provisions of Oxford, 1258 prohibition on new writs
English : appeals Kings conscience in 1349, Edward lll granted an order, formalising the custom of referring certain classes petitions to the chancellor’s
in 1474, Edward IV establish the practice of petition into Chancellor as a separate autonomous legal procedure. Court of Chancery found a judicial function distinct from the Kings cancel
Key aspects of the history of equity
- Bill of complaint by complainant (not restricted on wording like the form of action at common-law.)
- writs of subpoenae, compelling appearance of defendant
Conflict between common law and Chancery
Magdalen College
Who has title
Common law : conveyance void so John Smith
Chancery : Master of Magdalen College estopped from debugging Earl of oxford’s title : injunction issued prohibiting enforcement of common law decisions.
Significance :
Equity acts in personam
When common law & Equity are in conflict, Equity prevails over the law
Procedural fusion
Judicature Acts 1873 & 1875
Created new high court for justice
Introduced a new division structure:
• the kings bench divisions
• common pleas division (abolished 1880)
• exchequer division (abolished 1880
• chancery division
• probate, divorce and admiralty division (renamed family division & reorganised in 1970)
Work divided according to areas of practise rather than jurisdiction
All divisions have jurisdiction to administer both common law & equity
Section 25 : if in conflict, the equity prevails
Equity after 1875
The problems of substantive cushion
Practical problems :
different substantive rules from common law & equity
Lord Toulon in AIB v Mark Redler Solicitor 2014 ~ ‘140 years after judicature act, the stitching together of equity and the common law causes problems at stream’.
Coherence and classification of law
Pedagogical/Jurisprudential problems :
what is equity ? where should we teach it ?
Maitland : In the future there is no need for a course on equity, only on trust.
Equitable Remedies
Specific performance :
(Is a form of injunction where a court orders an individual to complete a specific task which is generally part of a contract. This remedy is discretionary and only used when an individual cannot be compensated by money. If they do not complete the contract they will be held in contempt of court.)
Injunctions
Estoppel
Constructive trusts
Equitable compensation/ Account/Disgorgement of profits
Rescission of Contract:
(This remedy aims to return parties to the position they were in before they entered into the contract. The main grounds for rescission are mistake, misrepresentation, undue influence and unconscionable transactions. (Solle v Butcher 1950))
Tracing (a technique)
Two view on the nature of equitable remedies :
An ethical quality (SPRY)
‘they are of their own nature of great width and elasticity and are capable of direct application as opposed to the application merely by analogy in new circumstances they arise from time to time’
Worthington :
‘there is nothing irredeemable ‘equitable’ in equitable remedies’
Characteristics of equity :
Granted to protect legal/equitable rights
Only available where common law remedies are inadequate
Oppresse in personam
Discretionary and subject to equitable defences
Flexible jurisdiction: can be adapted to deal with new cases (injunctions)
NB, Enforcement by contempt of court
Defences in equity :
Delay = ‘latches’
~ the non-breaching party intentionally delays bringing forth a lawsuit for breach of contract resulting in prejudice to the breaching party.
Clean hands =
Tinsley v Milligan 1993
(claim can’t be tainted illegally)
Patel v Mizra 2016
(more discretion as to the scope of defence)
Adequacy of Damages :
Money awards v Specific orders
S.50 Senior Courts Act 1981 : Damages in lieu of injunction
Shelter v City of London Electric co 1895 :
Jurisdiction ‘ought not to be exercised in such cases except under very exceptional circumstances ‘ ~
1. injury to legal rights is small
2. injury capable of being estimated in money
3. injury adequately compensated by small payment
4. it would be oppressive to D to grant the injunctions
Lawrence v Fem Tigers 2014 : reemergence of discretion
A discretion should not be fettered
shelter principles are not a test to be strictly applied but a series of factors ; even if all 4 are present,the court is not precluded from granting an injunction
Public interest
Forms of injunction :
Interim (interlocutory) : concerned with civil procedures
Prohibitory form : balance of convienne
(american cyanamid 1975)
Mandatory form : rare, need for strong prima facie case
Final (perpetual) : concern with enforcement of rights
Prohibitory form : inadequacy or damages
discretionary, but same as of course (trespass)
Complete Patel v WH Smith to Lawrence v Fren Tigers 2014
Mandatory form : never ‘as of course ~ Redland Brick v Morris 1970
Operation of Injunctions :
Quia timet: very strong possibility that danger or infringement may occur in the future
With out notice (ex parte): Intermin only
injunction sought with out notifying defendant
Freezing order (Mareva): strong form of interlocutory injunction concerns enforcement principle
Search order (Anton Piller): strong for if interlocutory injunctions concern evidentiary principle
American Cyanamid (1975)
• C held patent in pharmaceutical products; D entering into market in competition with C; C wished to prevent this
•C brought action for interlocutory injunction; granted by House of Lords pending an oral hearing
• Previously C had to establish prima face case of success; then courts consider ‘balance of convenience
- a ‘pre-trial’?
• Policy reasons - House of Lords held no requirement to make a prima facie case
• Instead:
1. establish that there is a ‘serious issue to be tried’
2. Then: ask if damages would be adequate to compensate C?
3. If damages would be adequate to compensate D?
4. If damages not adequate - court considers the balance of convenience (at this stage, discretion is exercised) - on basis of maintaining the status quo
Mareva injunctions
• Mareva Compania Naviera SA v International Bulkcarriers SA (1975)
• Freezes some/all of D’s assets to prevent removal from jurisdiction/ dissipation
• Can be granted either before or after judgment obtained
• To give C security for any claim if D becomes insolvent
• Can extend to assets held by third parties
• Three principles for courts to consider (JSC BTA Bank v Ablvazov (2013),
Beatson LJ):
•Enforcement principle: to stop D dissipating assets which could be subject of claim if C won the case
• Flexibility principle: equitable jurisdiction should be flexible enough to enable courts to stop Ds from thwarting enforcement of court orders
Strict interpretation principle: the order should be clear and unequivocal
• Also now on statutory footing: Senior Courts Act 1981, S.37(3)
Anton Piller injunctions
• Claimant: confidential information given by D to manufacturers
• Court of Appeal: granted C order giving permission to enter D’s premises - removal of documents
• Lord Denning: exceptional orders; permission of D is needed (but NB:
D ordered to permit entry if essential to interests of justice otherwise contempt of court!)
• Three conditions:
1. Cmust establish strong prima facie case that D is liable
2. Serious potential damage to C if order not granted
3. Clear evidence that D has the items in possession and real possibility of destruction
• Now on statutory basis: Civil Procedure Act 1997, s.7
The maximum of Equity
Equity will not suffer a wrong to be without a remedy:
- (Patterson v Murphy 1978 ILRM 85) injunction
- Attempts to alter this maxim in recent times by Lord Denning in (Hussey v Palmer 1972) were unsuccessful.
Equity follows the law:
- Courts will firstly apply common law and if this is not fair then an equitable remedy will be provided.
He who seeks equity must do equity:
A remedy will only be provided where you have acted equitable in the transaction. This maxim is discretionary in nature and is concerned with the future conduct of the plaintiff.
- (Cheese v Thomas 1994)
Equity acts in personam:
This maxim states that equity relates to a person rather than their property. It applies to property outside a jurisdiction provided that a defendant is within the jurisdiction.
- (Penn v Lord Baltimore 1750) English court ordered specific performance on land in the US.
Equality is Equity: Where more than one person is involved in owning a property the courts prefer to divide property equally. Prefer to treat all involved as equals. In the case of a business any funds left over from dissolution should be divided equally.
