LAWS5980 Equity and Trusts Lecture 3 PDF

Equitable Remedies : An Overview Lecture 3 Week 25, 23 January 2025 Lectures 3 and 4: Equitable Remedies Lecture 3: An Overview of Equitable Remedies Doctrines and remedies recap Types of equitable remedy and their classification Looking forward: the remedies we w...

Equitable Remedies : An Overview Lecture 3 Week 25, 23 January 2025 Lectures 3 and 4: Equitable Remedies Lecture 3: An Overview of Equitable Remedies Doctrines and remedies recap Types of equitable remedy and their classification Looking forward: the remedies we will encounter in the course Lecture 4: Focusing on Injunctions: The forms and functions of injunctions Reflections on jurisdiction and the tradition of equity in the development of injunctions cases Some reflections on power and policy issues concerning injunctions Doctrines and Remedies Doctrines: The reason you won/lost! The legal principles/rationes that determine whether you have a claim The legal categorisation of types of wrong, harm, obligation, behaviour that is being prevented/corrected/upheld by the law The heading of the claim, or ‘cause of action’ The legal categorisation of the case Distinguish headings of claim from: Legal principles which we use to describe or understand the doctrines, and/or which set out criteria as to whether or not a doctrine is applicable; and Defences we might use in arguing that a doctrine does not apply (sometimes these amount to more or less the same thing) Doctrines and Remedies continued Remedies: What you get if you win, in legal terms A type of legal ‘device’ Purpose: To return the person to the position they were in To achieve a broader legal goal: Enforce loyalty Protect against dishonesty Uphold respect for the courts Obviate avoidance of legal justice To make good a ‘wrong’ To enforce or protect rights Distinguish from the (real-life) sum or thing or action that results Remedy: ‘damages’; real-life: sum of £35,000 Remedy: Account for profits; real-life: sum of £35,000 …and Quantification Doctrine/remedy The rules we apply when calculating what the real-life sum should be, and the legal explanation as to why Often relates back to the doctrine – what is the doctrine designed to promote, prevent, resolve, reward? Determines the sum of the remedy (We’ll visit this again in estoppel) (Some of) The Equitable Remedies This topic/next week’s seminar: Specific Performance Requires a party to perform an obligation Usually re contracts An exceptional remedy – emphasised in Co- operative Insurance Society v Argyll Stores (1998), where damages were granted instead of SP Appropriate where: damages difficult to quantify; unique property (especially land) Injunctions (Lecture 4) Mareva (freezing order) Anton Piller (search order) (Some of) The Equitable Remedies (ctd) Later weeks: Estoppel Promissory/Proprietary Constructive Trust Equitable Compensation/Account/Disgorgement of Profits Rescission of contract Tracing (a technique) General characteristics of equitable remedies: Granted to protect legal or equitable rights (actual or threatened) Only available when common law remedies are inadequate Operate in personam Discretionary* and subject to equitable defences Flexible jurisdiction – can be adapted to deal with new cases (consider injunctions in lecture 4!) NB, enforcement by contempt of court (as opposed to a debt owed to the court, as in damages) * There are, however, a series of principles developed over time… Defences in Equity Delay “Laches” Clean Hands Tinsley v Milligan (1993) Claim can’t be tainted by illegality Patel v Mizra (2016) More discretion as to the scope of the defence Hardship Patel v Ali (1984) Adequacy of damages Money awards vs specific orders Damages in lieu of injunction: s.50 Senior Courts Act 1981 Shelfer 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 injunction Lawrence v Fen Tigers (2014): re-emergence of discretion? A discretion that should not be fettered Shelfer principles are not a test to be strictly applied but a series of factors – even if all 4 present, court not precluded from granting an injunction Public interest The nature of equitable remedies: two 1. An ethical quality? (Spry) views ‘Equitable principles have above all a distinctive ethical quality. They are of their nature of great width and elasticity and are capable of direct application, as opposed to application merely by analogy, in new circumstances as they arise from time to time.’ - Spry, Equitable Remedies (2010) 2. Nothing particularly ‘equitable’ about them? (Worthington) ‘[T]he goal is…demonstrate that there is nothing irredeemably “Equitable” in [equitable remedies]. With the benefit of hindsight, these strategies are simply the most obvious options for discriminating between rights; flexibility in any part of the legal system might have permitted their adoption.’ – Worthington, Equity (2006), p.23 Something distinctively equitable… Flexibility? (To what extent? Are courts bound to follow rules in applying these remedies?) Discretion? (To what extent is the court able to exercise this discretion? Is it bound by any constraints? Should it be?) In personam jurisdiction? (See tomorrow’s lecture/ next week’s seminar – is there any evidence of this principle being undermined or forgotten?) Worthington : a hierarchy of rights We have different remedies for different wrongs But that does not mean that some are more ‘equitable’ than others Instead we must view remedies as indicative of how much society values particular rights The more valuable the right, the stronger the remedy. Eg: Breach of contract for ordinary goods: damages (a debt owed to the court) Breach of contracts for land: specific performance (or contempt of court!) …because we value rights to land more strongly than rights to ordinary goods Importantly: this allows us to view all legal remedies as part of one system, in which they are simply differentiated according to their strength – Rather than two separate systems of remedies that exist independently of each other… Reclassification of remedies: different ways of thinking If Common Law remedies are distinct from Equitable remedies – we have two ‘tools’ distinct in nature. What is different about the tasks they perform? Alternatively, Common Law remedies are not totally distinct from equitable remedies: instead we have stronger or weaker tools of the same nature. What is the task that they both perform, albeit to different degrees? Seminar 3 Rationale: Enforcing Equitable remedies legal rights SPECIFIC PERFORMANCE CONTRACTUAL RIGHTS Compels performance of the obligation INJUNCTION Prohibit breach of contract obligation INJUNCTION PROPERTY RIGHTS Prohibits interference with property rights; very flexible  WARNING THIS IS NOT THE END OF “REMEDIES” Estoppel Constructive Trusts Account (Fiduciary / Trustee obligations) Equitable Compensation Knowing Receipt/Dishonest Assistance *Personal/Proprietary remedies Rescission And… *Restitution (Unjust Enrichment) Seminar 4: Estoppel Rationale: Failure to Equitable remedy create rights and obligations PROMISSORY ESTOPPEL Suspends enforcement of legal rights FAILURE OF FORMALITIES PROPRIETARY ESTOPPEL RELIANCE ON A Can create new legal and equitable PROMISE property rights; vast range of possible WORK DONE IN remedial responses ANTICIPATION OF A CONTRACT INCOMPLETE GIFT Seminar 5: Undoing certain gifts and contracts Rationale: Undoing Equitable Equitable legal rights doctrines remedy CONTRACT Mistake RESCISSION GIFT Misrepresentation Undue influence (Restoring Unconscionable parties to the bargain position they would have been in had there been no contract or gift.) Seminars 8 (breaches of trust and fiduciary obligations) and 9 (assisting a wrongdoer or receiving property in breach of trust) Rationale: Enforcing Equitable remedies equitable rights and obligations INJUNCTIONS BREACH OF TRUST ACCOUNT and EQUITABLE BREACH OF FIDUCIARY COMPENSATION OBLIGATION Accounts calculate how much money is KNOWING RECEIPT needed to compensate for losses or reclaim DISHONEST ASSISTANCE profits that have ought to belong to the trust. We will discuss these in more detail in a few weeks.