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Equity and Trusts Exam Review
- Reference Australian and Canadian law, show higher thinking and comparative analysis!
Tradition of equity and it’s place in modern law Leonel
Smith
Historical understanding
Aristotle: equitable justice is a correction of law due to the law’s universality and generality
o Comparing what is equitable and what is just. He says that the problem is that the
equitable is just, but not necessarily legally just but instead possibly a correction of legal
justice. The reason is that all law is universal but laws cannot cover all possibilities,
which means the legislator has failed by oversimplifying the law.
o The equitable is just and better than legal justice but not better than absolute justice
because errors can arise from the absoluteness of a statement of justice.
Maitland: believes that Equity cannot be defined
Christopher St. Germain
o The key to understanding equity is conscience. Christopher St. Germain argued that "the
circumstances of human life are so infinitely various that it is impossible to make a
general rule which will cover them all." Argued that equity based upon conscience is
necessary for any legal system to preserve justice.
o Ties in well with Earl of Oxford’s Case (1615):
The Lord Chancellor held: "The Cause why there is Chancery is, for that Mens
Actions are so divers[e] and infinite, that it is impossible to make any general
Law which may aptly meet with every particular Act, and not fail in some
Circumstances."
The judgment stresses that the legal position for chancery (equity) is tempered
to dealing with failures in the common law.
Law and Equity are distinct, both in their Courts, their Judges, and the Rules of
Justice; and yet they both aim at one and the same End, which is, to do Right; as
Justice and Mercy differ in their Effects and Operations, yet both join in the
Manifestation of God's Glory
Common law vs equity fusion of Equity and Common Law
Significance of acting in personam: when common aw and equity are in conflict, Equity prevails
over the law – it does not take away the common law judgement, but makes it unenforceable
Common law vs equity
o Common law is based on precedence and the courts’ decisions. Essentially, it is a
generalization of the law. Based on jurisdiction. Distinguishes between case law and
legislation.
o Equity is the system of law designed to offer remedies for wrongs which for any reasons
are not legally recognized under the common law of England or for which no adequate
remedy was provided by the common law in certain circumstances, is founded on
discretion.
Procedural fusion – Judicature Acts of 1873 and 1875
, o Created a new High Court of Justice
o Introduced a new Divisional structure where work was divided according to areas of
practice rather than jurisdiction
o Equity after 1873: the problem of substantive fusion
Practical problem differences between substantive rules from Common Law
and Equity
Ex.
Damages vs equitable compensation
Strict restitution at law vs knowing receipt in equity
Personal remedies at law vs proprietary relief in equity
Equity as a distinct tradition
o Intervenes due to inadequacy of law and legal remedies
o Principle and language of conscience/unconscionability
o Discretion and flexibility
o Maxims, techniques and values
Equity acts in personam
Equity looks to substance rather than form
Equity regards as done that which ought to be done
Creative jurisdiction
Worthington on Equity
o Rules and their natural evolution
It is universally recognized that any general rule will inevitably operate unfairly
in certain circumstances effective rule evolution is commonly based on
repeated practical experience
There must be coherence or chaos will ensue
The best systems of rules usually evolve within an integrated hierarchy, not a
dualist structure
o Originally, Equity was only called upon to intervene when the Common Law rules were
seen to be inadequate
The common law and Equity adopted quite different remedial strategies
Equity usually orders the D to do something
Another difference between the Common Law and Equity is in the different
enforcement techniques
o What four differences does Worthington identify between common law and equity?
Purpose
Procedural differences: Common Law tends to be more formal with the writs,
Equity has a sense of informality and liquidity
Remedial strategies: Common Law usually gave out compensation (what you
possess – links back to legal rights), while Equity usually orders the D to do
something (acts in personnam) historically, consequences of failure to listen
to an Equitable order led to being held in contempt of court and possibly jailed,
whereas in common law you would be stripped of assets
, Enforcement techniques: when Common Law and Equity are in conflict, Equity
prevails over the law acts in personam: does not take away the common law
judgement, but makes it unenforceable
o Worthington’s project
The unremitting goal is to keep evolving an increasingly sophisticated legal
regime designed to best fit the society’s ever-evolving needs
If Equity was not its separate system, it would still survive (fusionist approach)
Objectives:
1) Expose Equities influences on the modern legal landscape
understanding of Equity as something that is part of other legal
traditions, rather than distinct
2) Expose the integration of Equity and Common Law wants to show
that Equity is part of common law, goes against the idea that they are
two separate and unintegrate-able systems (ie. one influences the
other)
Smith on fusion and tradition
o There is irrationality in inconsistency in legal systems so, it makes sense that alike
cases must be resolved similarly
o Although the principles of Equity do not constitute a complete system of law, it seems
clear enough that Equity constitutes a legal tradition distinct from the common law
It developed differently and for different reasons
A legal tradition means that boundaries (set out by the system) are followed,
which means rules are upheld may be too strict and lead to a situation where
the tradition remains unchangeable and does not reflect the changes in society
Certainty may be brought into question. Boundaries may not be precise.
o What does Equity provide which the common law differs from?
Many argue that it is unproductive to have two sets of terminology or concepts
in play
It is not true that Equity is flexible while the common law is rigid reductionist
approach is largely inaccurate
Some argue that Equity is a conscience-based jurisdiction
Differences of underlying moral norms
The common law, in the narrow sense admits that there is a possibility
that someone can commit a wrongful act by interfering with the
fulfilment of another person’s obligation
In Equity, people are bound by other people’s obligations – not bound
to perform them, but bound not to interfere with them
Equity inquires into good faith (ex. a white lie and a malicious one)
David Hayton on equity
o Equity often forces the man to act like a good man, while common law allows someone
to be a bad man look at Aristotle’s ‘equitable man’
o Ex. conscience in Equity, motives (good faith), discretion is prominent in Equity
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