Worksheet 6 - Sources of Law _ Equity (Commonwealth Caribbean Law) PDF

PLS101 – LAW AND LEGAL SYSTEMS SEMESTER I 2024/2025 WS6 SOURCES OF LAW : EQUITY Reference: Rose-Marie Belle Antoine, Commonwealth Caribbean Law and Le...

PLS101 – LAW AND LEGAL SYSTEMS SEMESTER I 2024/2025 WS6 SOURCES OF LAW : EQUITY Reference: Rose-Marie Belle Antoine, Commonwealth Caribbean Law and Legal Systems (Routledge 2008), Chapter 8. A. INTRODUCTION In ordinary language, equity simply means fairness, but in law it applies to a specific set of legal principles, which add to those provided in the common law. It was originally inspired by ideas of fairness and natural justice, but is now no more than a particular branch of English law. Lawyers often contrast 'law' and equity, but it is important to know that when they do this they are using 'law' to mean common law. Equity and common law may be different, but both are law. Equity is an area of law which can only be understood in the light of its historical development. B. ORIGINS OF EQUITY As we have seen, the common law was developed after the Norman Conquest through the 'itinerant justices' travelling around the country and sorting out disputes. By about the twelfth century, common law courts had developed which applied this common law. Civil actions in these courts had to be started by a writ, which set out the cause of the action or the grounds for the claim made, and there grew up different types of writ. Early on, new writs were created to suit new circumstances, but in the thirteenth century this was stopped. Litigants had to fit their circumstances to one of the available types of writ: if the case did not fall within one of those types, there was no way of bringing the case to the common law court. At the same time, the common law was itself becoming increasingly rigid, and offered only one remedy, damages, which was not always an adequate solution to every problem - if a litigant had been promised the chance to buy a particular piece of land, for example, and the seller then went back on the agreement, damages might not be an adequate remedy since the buyer really wanted the land, and may have made arrangements on the basis that it would be acquired. Consequently, many people were unable to seek redress for wrongs through the common law courts. Many of these dissatisfied parties petitioned the king, who was 1 thought of as the 'fountain of justice'. These petitions were commonly passed to the Chancellor, the king's chief minister, as the king did not want to spend time considering them. The Chancellor was usually a member of the clergy, and was thought of as 'keeper of the king's conscience'. Soon litigants began to petition the Chancellor himself and, by 1474, the Chancellor had begun to make decisions on the cases on his own authority, rather than as a substitute for the king. This was the beginning of the Court of Chancery. Litigants appeared before the Chancellor, who would question them, and then deliver a verdict based on his own moral view of the question. The court could insist that relevant documents be disclosed, as well as questioning the parties in person, unlike the common law courts which did not admit oral evidence until the sixteenth century, and had no way of extracting the truth from litigants. Because the court followed no binding rules, relying entirely on the Chancellor's view of right and wrong, it could enforce rights not recognised by the common law, which, restricted by precedent, was failing to adapt to new circumstances. The Court of Chancery could provide whatever remedy best suited the case - the decree of specific performance, for example, would have meant that the seller of land referred to above could be forced to honour the promise. This type of justice came to be known as equity. C. COMMON LAW AND EQUITY Not surprisingly, the Court of Chancery became popular, and caused some resentment among common lawyers, who argued that the quality of decisions varied with the length of the Chancellor's foot - in other words, that it depended on the qualities of the individual Chancellor. Because precedents were not followed and each case was considered purely on its merits, justice could appear arbitrary, and nobody could predict what a decision might be. On the other hand, this very flexibility was seen as the great advantage of equity - where any rules are laid down, there will always be situations in which those rules produce injustice. The more general the rule, the more likely this is, yet it is impossible to foresee and lay down all the specific exceptions in which it should not apply. Equity dealt with these situations by applying notions of good sense and fairness, but in doing so laid itself open to the charge that fairness is a subjective quality. The common lawyers particularly resented the way in which equity could be used to restrict their own jurisdiction. Where the common law gave a litigant a right which, in the circumstances, it would be unjust to exercise, the Court of Chancery could issue a common injunction, preventing the exercise of the common law right. An example might be where a litigant had made a mistake in drawing up a document. Under common law the other party could enforce the document anyway, even if they were aware of the mistake but failed to draw attention to it. This was considered inequitable, and a common injunction would prevent the document being enforced. 2 Nevertheless, the rivalry continued for some time, but gradually abated as equity too began to be ruled by precedent and standard principles, a development related to the fact that it was becoming established practice to appoint lawyers rather than clergy to the office of Lord Chancellor. By the nineteenth century, equity had a developed case law and recognisable principles, and was no less rigid than the common law. Judicature Acts 1873-75 Once equity became a body of law, rather than an arbitrary exercise of conscience, there was no reason why it needed its own courts. Consequently, the Judicature Acts of 1873-75, which established the basis of the court structure we have today, provided that equity and common law could both be administered by all courts, and that there would no longer be different procedures for seeking equitable and common law remedies. Although the Court of Chancery remained as a division of the High Court, like all other courts it can now apply both common law and equity. It is important to note that the Judicature Acts did not fuse common law and equity, only their administration. There is still a body of rules of equity which is distinct from common law rules, and acts as an addition to it. Although they are implemented by the same courts, the two branches of the law are separate. Where there is conflict, equity still prevails. D. EQUITABLE MAXIMS Although both the common law and equity lay down rules developed from precedents, equity also created maxims which had to be satisfied before equitable rules could be applied. These maxims were designed to ensure that decisions were morally fair. The following are some of them. 1. 'He who comes to equity must come with clean hands': This means that claimants who have themselves been in the wrong in some way will not be granted an equitable remedy. In D&C Builders v Rees 2 QB 617, a small building firm did some work on the house of a couple named Rees. The bill came to £732, of which the Reeses had already paid £250. When the builders asked for the balance of £482, the Reeses announced that the work was defective, and they were only prepared to pay £300. As the builders were in serious financial difficulties (as the Reeses knew), they reluctantly accepted the £300 'in completion of the account'. The decision to accept the money would not normally be binding in contract law, and afterwards the builders sued the Reeses for the outstanding amount. The Reeses claimed that the court should apply the doctrine of equitable estoppel, which can make promises binding when they would 3  normally not be. However, Lord Denning refused to apply the doctrine, on the grounds that the Reeses had taken unfair advantage of the builders' financial difficulties, and therefore had not come 'with clean hands'. 2. 'He who seeks equity must do equity': Anyone who seeks equitable relief must be prepared to act fairly towards their opponent. In Chappell v Times Newspapers Ltd 1 WLR 482, newspaper employees who had been threatened that they would be sacked unless they stopped their strike action applied for an injunction to prevent their employers from carrying out the threat. The court held that, in order to be awarded the remedy, the strikers should undertake that they would withdraw their strike action if the injunction was granted. Since they refused to do this, the injunction was refused. 3. 'Delay defeats equity': Where a claimant takes an unreasonably long time to bring an action, equitable remedies will not be available. The unreasonableness of any delay will be a matter of fact to be assessed in view of the circumstances in each case. In Leaf v International Galleries 2 KB 86, the claimant bought a painting of Salisbury Cathedral described (innocently) by the seller as a genuine Constable. Five years later, the buyer discovered that it was nothing of the sort, and claimed the equitable remedy of rescission, but the court held that the delay had been too long. These maxims (there are several others) mean that where a claimant's case relies on a rule of equity, rather than a rule of common law, that rule can only be applied if the maxims are satisfied - unlike common law rules which have no such limitations. E. EQUITABLE REMEDIES Equity substantially increased the number of remedies available to a wronged party. The following are the most important: (a) Injunction: This orders the defendants to do or not to do something. (b) Specific performance: This compels a party to fulfil a previous agreement. (c) Rectification: This order alters the words of a document which does not express the true intentions of the parties to it. (d) Rescission: This restores parties to a contract to the position they were in before the contract was signed. Equitable remedies are discretionary. A claimant who wins the case is awarded the common law remedy of damages as of right, but the courts may choose whether or not to award equitable remedies. They are very much an addition to common law remedies, and usually only available if common law remedies are plainly inadequate. Equitable 4 principles have had their greatest impact in the development of the law of property and contract and remain important in these areas today. The two best-known contributions come from property law, and are the developments of the law of trusts, and the basis of the rules which today govern mortgages. The creation of alternative remedies has also been extremely important. 5 F. DISCUSSION QUESTIONS 1. Explore the equitable maxims and their role in ensuring morally fair decisions in cases. 2. Using case law, state and explain 4 equitable maxims. 6