Equity and Trusts: Milligan’s claim of an interest in the house because her
fraudulent behaviour had no bearing on the fact that
she had contributed to the purchase of the house.
Introduction to equity and trusts: 2. ‘’One who seeks equity must do equity’’ – This means
that in order to receive equitable relief, the claimant
What is equity? must also be willing to fulfil their own obligations.
3. ‘’Equity follows the law’’- It does not displace it. If a
Definition: In broad terms, equity means that which is common law remedy is adequate, equity will not
fair, just, ethical and moral. However, in its legal sense substitute its own remedy, even if equity’s remedy is
the word is much narrower. Equity is a branch of law, more convenient or just to the claimant. In creating an
which serves to mitigate the strictness of the common answer to a problem in equity, the court of equity will
law. always look to the legal position first and where
Before the Judicature Act 1873 came into force, equity appropriate take their lead from the common law.
was applied and administered by the Court of Chancery. 4. ‘’Equity sees as done that which ought to be done’’ –
The Judicature Acts established the Supreme Court of Equity will generally treat a contract to do something as
Judicature with simultaneous jurisdiction to administer if that that thing had already been done, even if the
the rules of equity and common law in one procedural correct legal formalities have not been complied with.
system. Thus, the administration of equity and common CASE: Walsh v Lonsdale (1882) – When parties enter a
law was fused into a single system. contract for a sale, the buyer is deemed to have
Earl of Oxford Case (1615)- The King finally held that obtained an equitable right in the property at the time
equity prevailed over the common law in the event of a of the contract
conflict. 5. ‘’Equity looks to the intent rather than the form’’-
In the event of conflict, equity will prevail over the Equity will look at the substance of a transaction
common law. This principle was put onto a statutory CASE: Parkin V Thorold (1852)- Equity will not permit a
footing in s.25 (11) Supreme Court of Judicature Act party to rely on a legal form or formal legal wording if it
1873: would be substantially unconscionable to do so.
‘’ In all matters not hereinbefore particularly mentioned, in which 6. ‘’Equality is equity’’ – The notion of equality is
fundamental to many aspects of equity. Where people
there is any conflict, or variance, between the rules of Equity and
the Rules of Common Law with reference to the same matter, the co-won property, equity will assume the property is held
in equal shares unless there is evidence to the contrary.
Rules of Equity will apply’’
7. ‘’Delay defeats equity’’ – A party should not delay in
Equitable Maxims: seeking to enforce their equitable rights, if they do so,
the courts may refuse to grant an equitable remedy.
Definition: Over time equity has established various maxims or 8. ‘’Equity will not suffer a wrong to be without a
sayings, which set out the core principles that govern the law of remedy’’ – This maxim is frequently used to justify the
equity. These are not strict rules and the courts do not always granting of equitable remedies, for example granting
have to follow them. They act more as a general guide to the injunctive relief where common law damages would be
approach likely to be taken by the court. insufficient. Linked to the very origins of equity. Alludes
to the fact the equity was devised specifically with the
Bold = key equitable maxims
intention that it should act as a supplementary, or
1. ‘’He who comes to equity must come with clean alternative, court of justice where the common law is
hands’’- To be granted discretionary relief, an applicant not able to provide a remedy
must not have acted improperly. Idea behind the maxim 9. ‘’Equity acts in personam’’- During the time in which the
is that a person who has acted wrongly cannot then seek court of equity was developing, one important
to rely on the court for assistance in the bringing of a distinction between equity and the common law was
claim. that, whereas the courts of the common law made
CASE: E.g Cleaver v Mutual Reserve Fund Life judgments over the property in dispute, an action being
Association [1892] -Here a woman who had murdered brought in rem (that is, over ‘the thing’), the court of
her husband was denied the right to claim the payout equity made its judgments in personam: in other words,
under a life insurance policy underwritten in her favour, judgment was made against the individual. The practical
on the basis that she should not be allowed to profit effect of this was that the courts of the common law had
from her crime. the ability to adjust ownership rights in property, giving
The requirement of clean hands does not mean that all or part of the property in dispute to the claimant. The
someone of generally morally reprehensible character courts of equity, on the other hand, had the ability
will be barred from using the courts of equity at allThe instead to require an individual to obey their judgments,
maxim will only apply if there is a genuine link between in default of which they could take away that person’s
the claimant’s wrongful act and the rights they wish to liberty (by putting them in prison) or issue fines until
enforce. such time as they obeyed their edict.
CASE: Tinsley v. Milligan [1994] - The case concerned a 10. ‘’Equity will not permit a statute to be used as an
couple who had bought a house together but registered instrument of fraud’’ - This equitable maxim serves to
it in the name of just one of them so that the other prevent a person from relying on the absence of
could claim to be a lodger in the house and continue to statutory provision if to do so would result in unfairness
claim housing benefit. However, when the couple to a third party
separated the House of Lords nevertheless allowed Miss 11. ‘’Equity will not assist a volunteer’’- A volunteer is
someone who receives a benefit without consideration;
