Equity is a Separate System of Law

There were two main categories of cases which were referred to the chancellor. [2]

Most of the cases were under the second category. However Chancellor never tried to develop a new system of laws in equity. He only gave fair decisions for problems which were aroused to him. Actually common law courts and the chancery courts were two separate bodies so they acted in different ways. Chancery court acted with the purpose of giving a fair result according to their conscience while the common law courts followed the strict rules which they were bound when giving a decision.

In Lord Dudley v Lady Dudley [1705] [3] Lord Cowper gave a brief explanation about equity “ Equity is not a part of law, but a moral virtue which qualifies, moderates and reform the rigour, hardness and the edge of the law” [4] .

Above statement clearly emphasize the fact that the equity is a separate system of law and it also moderate the common law and helps to soft the common law. Further more as equity is a separate system of law it has separate remedies as well. In equity there are injunctions, specific performance, Compensation, rescission, rectification and more. But in common law there are only Damages and common law tracing. Mainly equity had to supplement the common law as common law didn’t have appropriate remedies and no adequate writ system. Moreover new equitable remedies were invented and intended a person not society in general as in common law. But however if there was conflict between equity and common law, equity could use the common injunction to prevent the common law judgment being enforced. So the common law lawyers did debate about this fact. As equity should prevail at last it is good to use a common injunction when there is injustice in the decision of common law. At last justice will prevail not the injustice.

The revolution of the equity happened when the Judicature Act came in to the operation on 1875. This Act started administrating common law and equity in the same courts. So that the common law courts also started using equitable remedies for some extent. This Act brought a fusion of administration instead of principles. However subjected to the section 25 of this Act it indicates that if there are conflicts or variance with common law and equity, equity should prevail not the common law.

Walsh v Lonsdale [5] [1882] is a leading case to prove the distinction between Modern equity and the earlier equity and how did the equity supplement the common law when there were no appropriate remedies. Lonsdale agreed in writing to grant seven years of lease with a rent payable quarterly in arrear, but if demanded Walsh should pay year’s rent in advance. But when Lonsdale asked for rent in advance Walsh refused pay and so Lonsdale distrained. So Walsh brought an action for illegal distress. But the action did fail. Under common law Walsh could ask for damages for illegal distress and he would be successful as well. Then Lonsdale would have no reply at all. But from the chancery court he could “ claim to specific performance of the agreement to take a lease was one that only have been made in equity” [6] . So then Lonsdale will be able to take an injunction against the common law decision. This is what happened if the case was before 1875. But here also same thing happened. Here the court ordered a specific performance but difference is not from separate courts but from the same court. The Judgment clearly indicates the impact of the Judicature Act to the administration of law and equity. Following is a quotation of the judgment

“ There are two estates as there formerly one estates as there were formality, one estate at common law by reason of the payment of the rent from the year to year, and an estate in equity under the agreement. There is only one court and equity rules prevail in it” [7] . However the word “one court” has clearly indicated how did the combination of law and equity has worked when delivering the judgment with intention of giving a fair decision.

Moreover the affect of Judicature Act enabled Lonsdale to use the equitable defense for a legal claim and court was able to use the maxim of “equity treats things done ought to be done”. The facts and the quotation of the judgment emphasize the fact how the shortcomings of common law were supplemented by equity using a one court.

Furthermore in Bayer AG v Winter [8] [1986] court of Appeal has granted an injunction in order to stop the defendant from leaving the country. Common law doesn’t provide those sorts of remedies. This is how equity supplements common law through remedies.

All the above facts clearly indicates how did the earlier equity and modern equity supplemented the shortcomings of common law and furthermore after the Judicature Act procedures were combined and the same courts were able to use equity rights and remedies when declaring decisions. So under modern equity the rights and remedies became more stable and supplemented the common law to achieve the purpose of fairness and justice.

The short comings of common law has aroused because every man is different from the other so it is hard to make rules to cover every bit of wrong. So that is what Lord Ellesmere has impliedly stated on his judgment in the case of Earl of Oxford’s [9] [1615]. Following is the quotation of the judgment,

“men’s actions are so diverse and infinite that is impossible to make nay general law which will aptly meet with every particular and not fail in some circumstances” [10] . So some times though one party has committed an unconscionable conduct they will win the case as there were no rules in common law to make liable for those conducts.

Furthermore by supplementing common law it will be easier to prevent the unconscionable reliance of the shortcomings. When relying so much on short comings the fairness justice will be hidden in the decisions and the unjust will be in the decisions. But that is not the purpose of equity.

“Unconscionable conduct is not by it self sufficient to found liability. The most that can be said of a general nature is that unconscionability will commonly use of or insistence upon entitlement to take advantage of another’s special vulnerability or misadventure” [11]

But however there is no real definition for unconscionable. It differs from case by case. Though it is hard to define uncontainable there are some rare cases where equity intervened where unconscionability aroused.

In the case of Thorner v Major [12] [2009] Thorner made a will an left his farm to David Thorner But subsequently it was destroyed. But suddenly Thorner Died. Under the intestacy rules blood relatives got all the property.

But David Thorner claimed against this action that Peter Thorner made an assurance to him that farm would be left to him after his death so due to that assurance he has worked in it for 28 years. When considering the above facts it implies that it is unconscionable if blood relatives get the farm. As there are no valid documents to prove his ownership equity intervened in this case to prevent unconscionability and rigid short comings of common law. So House of Lords “held David was indeed entitled to his uncle’s farm on the grounds of proprietary estoppel. In the context of dealings and the conducts, the requisite degree of unconscionability had arisen where by it would be inequitable to deny David a right to farm” [13] . In this case it was mentioned about a degree of unconscionability, But is it a permanent one, or does it differ from case to case. Those are the problems arose when equity intervene in common law.

However contradictory decision was given in Yeoman’s Row Management Ltd v Cobbe [14] [2008]. The facts were almost same as the above case. Here the defendant had orally agreed to sell his land to the claimant. And the Defendant granted permission to develop the land from claimants own money. But after he developed defendant refused to sell the land. But in this case House of Lords held that oral agreement does not amount to a formal contract as further negotiations could be done. So here a problem aroused whether defendant’s activity will amount to an unconscionable conduct, if so equity should intervene. Though in both situations claimant tried to acquire some land regarding on some sort of a promise only in Thorner v Major [15] [2009] it was successful because there defendant’s conduct was regarded as unconscionable conduct so with the idea that there is a short coming in common law equity intervened and gave a fair result by considering past 28 of years of claimants work as well. So it is obvious that when giving the decision without sticking in to the rigid rules of common law House of Lords have considered the conducts of the both parties to give this fair result. Both of these cases clearly indicate that there is no real definition or a stable degree for conduct to be unconscionable. It is transient and change case by case.

There are maxims in equity in order to guide equity to prevent unconscionable reliance on the short comings of common law. Maxims do not fall in to the category of rules they are actually principals. When Judges giving their decision they do back up from those. When there is an unconscionable conduct maxims were used as equity intervenes to it.

“Equity will not suffer a wrong with out a remedy” is used to stop unconscionable reliance in common law. This is used where there is no remedy at all in common law and there are remedies but it is not adequate. Ordering damages for trespass in common law is a good example for second situation. However “This maxim indicates that equity will not allow the technical defects of common law to prevent worthy plaintiffs from obtaining redress” [16] . If there is unjust decision in common law equitable remedies will intervene in order to stop the unjust. So many new remedies were invented such as specific performance to enforce the contracts which are not enforceable at law and injunctions were used to restrain threatened wrongs and to protect interests of plaintiff in at a pending trial. Common law had the short coming of inappropriate remedies. So it was supplemented by the judges using this maxim.

“Equity looks to the substance rather than the form” could be related in order to establish the fact that unconscionable differs case by case. Actually according to this maxim “equity will not permit a party to rely upon a legal form, or the formal wording of a law, in a way that would be substantially unconscionable” [17] . Walsh v Lonsdale [18] [1882] where a lease was granted by the Landlord for seven years form an written agreement but did not comply with the formalities of a deed. In this case a problem aroused with a term in the contract. According to the common law that term was not a binding one but however equity intervened and declared that landlord purported that term so it is enough under this maxim. Here the plaintiff tried to say it is unconscionable to rely on that term as it not a term according to the contract under common law, but here courts using this maxim after considering the facts it will be unconscionable for the defendant if court don’t decide this as term though it was not under the formalities the Landlord purported that term. So it is enough according to equity and this maxim. This example clearly emphasize the fact that though equity intervenes to stop unconscionable conducts of defendant if plaintiff has done the unconscionable conduct the remedies will be decided to stop plaintiff’s unconscionable conduct. However at last relying on unconscionably in short comings in common law were stopped by equity.

In Tinsley v Milligan [19] [1993] two lesbian partners purchase a land jointly with there money. But only plaintiff’s name was put as the legal owner. So other partner got the equitable ownership as plaintiff hold the trust on behalf of her. But after an argument plaintiff moved out and asked for her legal title. But the defendant argued that the under the maxim of “He who comes to the equity must come with clean hands” and said that plaintiff had committed a fraudulent act against social security. But courts decided that the all those conduct would not prevent Plaintiff receiving the half of the house. So here it can be seen that considering the facts of the case courts has declared that Defendant is unconscionable. All those cases clearly indicate how courts have decided unconscionability regarding facts of the case and using maxims.

Furthermore in Chappell v Times News papers LTD [20] [1975] workers who were planning to do a strike asked for a injunction from courts to stop their dismissal from the job if they strike. But they refused to stop the strike in order to get the injunction. So courts didn’t grant the injunction declaring that “He who seeks equity must do equity” and it is not fair to grant the injunction as the workers were doing an unconscionable conduct. The slight difference between the Modern equity and earlier equity is that in earlier equity only the defendant’s unconscionable conducts were stopped but now both parties unconscionable conducts were stopped using maxim. That is why mainly unconscionable differs case by case.

However in conclusion equity was established in order to supplement the inadequate writ system and inadequate remedy system in common law. Main purpose of the equity was to prevent the unconscionable reliance of the short comings of the common law. However the definition of unconscionable is vague. Though in some cases degree of unconscionable was mentioned it was not established as a permanent one. The maxims the guidelines of equity can be used to prove that how unconscionable reliance of short comings was stopped and how unconscionable differs case by case. However it is obvious if there was no equity the defects of the common law will remain as usual. Then public will lose the confidence about the English legal system.