What is the concept of Equity under English and Welsh Law?

The law of equity began in the court of chancery which was set up because a fair and just remedy could not be given through common law as monetary compensation was not suitable and sometimes a well deserving plaintiff was denied because the writs where quite narrow and rigid.

Frustrated plaintiffs turned to the King, who referred these requests for relief to a Royal Court: the Chancery. The Chancery was headed by a Chancellor who possessed the King's authority to settle disputes and order relief according to his conscience. The decisions of a Chancellor became the basis for the law of equity.

Equity and the common law represented opposing values in the English legal system. The common law was the creation of a judiciary independent from the Crown. Whereas the common law provided results based on years of judicial wisdom, equity produced results based on the caprice of the King's Chancellor. Common law judges considered equity random and a Royal encroachment on the power of an independent judiciary.

The decisions of the court of Chancery and common law were usually in conflict. The conflict came to an end in The Earl of Oxfords case 1615 in which the Attorney General acting under the authority of King James I, stated ‘Where common law and equity conflict equity should prevail'. The two courts are now unified and the same judges give decisions out common law and equity.

The Earl of Oxford's case concerned a parcel of land in London which Henry VIII had gifted to Thomas, Lord Audley, as a reward for procuring the trial and eventual execution of Anne Boleyn By his will Lord Audley left the land to Magdalene College, Cambridge, who then sold it and which were indirectly acquired by the Earl of Oxford.

Magdalene College were infuriated by this and challenged the Earl of Oxford’s title to the land on the basis of a statute which prohibited the sale of College lands but against this was the fact that, as part of the original sale Magdalene College had made an immediate transfer to Queen Elizabeth with the deliberate intention of circumventing the statute.

This acted as the catalyst for the dispute between common law and equity. The two greatest legal minds of the time in the English legal system: Edward Coke, Chief Justice of the King’s Bench, and Thomas Edgerton, Lord Ellesmere, Lord Chancellor, were now set on a collision course. The King's Bench Court sought to reign in the powers and popularity of the Chancery Court. This was a battle for prominence for the legal hierarchy.

The Chief Justice was enraged by the Chancellor’s practice of granting injunctions in Chancery to prevent the enforcement of common law judgments. The Earl of Oxford’s case alleged that the judgment of Coke G.J was obtained fraudulently. The Lord Chancellor through the Court of Chancery then issued a common injunction on the basis of an unconscionable advantage which had developed in favour of the Magdalene College, which denied the Earl of Oxford’s rights to adequate compensation for loss of title, resulting from the enforcement of the common law order against the Earl of Oxford for breaching the statute.

Locked in a stalemate the matter was referred to the Attorney-General, Sir Francis Bacon, who petitioned the King, James I. The Attorney-General acting on the authority of James I, upheld the use of the common injunction issued by the Lord Chancellor and concluded that in the event of any conflict between the two jurisdictions of common law and equity, equity would prevail. Common law rules must lead to an unjust or unconscionable outcome or the Lord Chancellor has no jurisdiction to interfere.

Equity was dependent for its authority upon the Kings’ prerogative during this period, which was jeopardised by the overthrow of Charles I. The rule of Cromwell, Realm Protector also posed a threat to Chancery Court, as Cromwell proposed the abolition of Chancery, which he described as ‘the greatest grievance in the nation’, and the Glorious Revolution in 1689. In 1690, a bill was proposed that would reverse the Earl of Oxford’s case but it never progressed into law.

By the end of the seventeenth century, the Chancellor's opinions became consistent enough to be compiled in law reports. The law relating to equity is largely built on precedent. The rules have been built upon by previous situations which they have dealt with, and are now known as maxims and are used as guidelines by the court.

There are alterations to the law as recent as the Eves v Eves case in 1975. The author has known of 12 Maxims of Equity, however, some have cited 20. This just goes to illustrate that as the law evolves and adapts to modern necessities, principles of Equity will also come into creation. For the purpose of this work the author shall limit himself to the 12 maxims.

Maxims of equity are not a rigid set of rules, but are, rather, general principles which can be deviated from in specific cases, there is also much overlap between specific maxims.

The maxims of equity are a set of general principles which govern the way in which equity operates. They tend to illustrate the qualities of equity and are responsive to the needs of the individual

and more inclined to take account of the parties’ conduct and worthiness. The maxims are applied when the court feels it appropriate.

The twelve equitable maxims are:

1. Equity will not suffer a wrong without a remedy.

 2. Equity follows the law.

 3. Where there is equal equity, the law shall prevail.

 4. Where the equities are equal, the first in time shall prevail.

 5. He who seeks equity must do equity.

 6. He who comes into equity must come with clean hands.

 7. Delay defeats equities.

 8. Equality is equity.

 9. Equity looks to the intent rather than the form.

 10. Equity looks on that as done which ought to be done.

 11. Equity imputes an intention to fulfil an obligation.

 12. Equity acts in personam.

Equitable remedies include the following:

Injunctions

This is an order by the court to make a party complete an action or to make them refrain from doing an action. It is awarded to protect a legal right rather than compensate for the breach of one. If a party breaches this court order it is a serious offence and can merit arrest or possible jail sentence. An injunction is a discretionary remedy which courts will only grant if they feel it is just and equitable in the circumstances to do so. Interim and interlocutory injunctions are temporary and last up until specified date or until a trial hearing. Injunctions can be used to stop trespass, passing off, prevent illegal picketing and to freeze assets.

Interlocutory Injunctions

Granted prior to a court hearing because plaintiff may suffer un-repairable damage if right is breached which cannot be compensated by money. The plaintiff must prove to the judge that there is sufficient reason to believe that the damage will be caused to them.

Three stage test on granting interlocutory injunctions is:

1.If it is a serious and fair issue that will be tried you need not prove it'll be a successful claim.

2.Set out if damages would be a suitable remedy. It must be impossible to quantify damages and must give an under taking which means in the event of an injunction not being granted they must compensate the other party for any losses.

3.Whether it is convenient or not to grant the injunction. Need for plaintiff to be protected must outweigh against the right of the other party in order to grant the injunction.

Qui Timet Injunction

This injunction prevents an act before it has been committed it may be feared or could have been threatened. The Plaintiff must show that there is a strong possibility of this happening and the consequences of the act will be extremely damaging. There is a higher burden of proof for this injunction.

Mareva Injunction

This type of injunction is also known as a freezing injunction. Where one feels that they have a substantial case against the other the can apply to the courts for this only if they feel that the other may move of hide assets. In order to gain this type of an injunction plaintiff must prove that they have a substantial case and must also prove that the assets are at risk. It must also be convenient to grant it.

Anton Piller Order

This can also be known as a search order. It was thought of in order to prevent the defendant from destroying anything that could be used by the Plaintiff in court to assist their trial. It is granted without the other party's knowledge in order to maintain the element of surprise. The order requires the defendant to allow the Plaintiff or a representative to enter his premises and to collect what is relevant for evidence. If the defendant does not follow the order then he shall be held in contempt of court. It is only granted where it is deemed to be absolutely necessary where it is feared that vital evidence will be destroyed.

Specific Performance

Is a form of injunction where a court orders an individual to complete a specific task which is generally part of a contract. This remedy is discretionary and only used when an individual cannot be compensated by money. If they do not complete the contract they will be held in contempt of court.

Rescission

This remedy aims to return parties to the position they were in before they entered into the contract. The main grounds for rescission are mistake, misrepresentation, undue influence and unconscionable transactions.

Proprietary estoppel is an equitable doctrine that prevents someone from relying in certain facts or rights which are different to earlier ones – to the detriment of someone else. This, says the law, is unconscionable behaviour. Proprietary estoppel effectively provides a means by which a person may become entitled to a proprietary right despite the absence of express intention and appropriate formalities.

The doctrine of proprietary estoppel can therefore assist a Claimant where their rights are not protected by law, where an assurance in relation to the transfer of property has not been formalised in writing. This situation arose in Dillwyn v Llewelyn (1862) when a son received a parcel of land from his father and then proceeded to spend £14,000 on building a house on the land with his father’s approval and encouragement and promise that the land would be his, only to later find that his father did not leave the property to him in his will.