Jaycee How 15902

Common Law and Equity

18 March 2021
What do you understand by the term “common law”? What is its relationship with Equity?

The English Legal System adopts the common law system. To examine equity's role
in this system, we need to understand these two elements' historical development. Before
the Battle of Hastings, the tribes of Celts and Anglo Saxons in England were governed by
customs. Tribal Elders decided the outcome of cases. In 1066, William the Conqueror took
over England. He sought to unite all tribes under the Norman Rule. Judges in circuits
practised justice according to local customs. As they judged, they collected and compiled
the best customs and applied the law uniformly. Thus, the system of law 'common' to all
became known as common law.

           At the time, the only remedy available in common law was damages. Damages was
not a sufficient remedy to compensate all wronged victims, as there are problems that
money cannot solve. Besides, common law was too rigid. There must be an existing writ that
covers the area of law for the claim to start a case. There was only a limited range of writs,
so victims who did not fit under a writ were not eligible for a remedy. Provisions of Oxford
1258 recognised that the formation of new writs is near impossible as there are too many
writs already. An error in formalities could also cause a case to be thrown out entirely.
Besides, the process was costly in terms of money and time.

           Common law gained power from 1250 and gradually transformed into an expensive,
inadequate and inflexible system of law. Aggrieved parties petitioned their grievances to the
King. The King passed these cases to the Lord Chancellor, named 'Keeper of the King's
Conscience', who judged these cases individually. As the number of petitions increased, the
Court of Chancery was born. The Lord Chancellor was a bishop, so he was an expert in
religious affairs, but the same cannot be said for law in general. 'God-made law' is different
from 'man-made law'. He looked beyond formal documents and procedures and judged
according to the ideas of justice. Thus, the concept of equity was born. Equity is a collection
of legal rules that aimed to supplement the gaps of the common law. Equity ensures justice
is served by granting discretionary remedies aside from damages. Equity evolves to satisfy
new needs. The process is also less formal and cheaper than common law courts. Cardozo
in Graf v Hope Building Corporation 1930 explains that equity is not a separate legal
system, but it aims to supplement common law. 

           Where common law judges were legally qualified experts, the Lord Chancellor was a
bishop with more religious influence. Subsequently, common law courts and the Court of
Chancery had conflicting judgements. Common lawyers resented how equity could be used
to restrict their jurisdiction. They argued that the quality of decisions varied with the length
of the Chancellor's foot, that it depended on the values of the individual Chancellor. Justice
appeared arbitrary as precedents were not followed, and each case was considered on its
merits, and nobody could predict the final judgement. Therefore, they referred to the King
for a decision. 

In the Earl of Oxford's Case 1615, it was decided that equity should prevail in the
case of a conflict. Gradually, equity began to be ruled by precedent and standard principles
and became no less rigid than common law. Once equity became a body of law, rather than
the arbitrary exercises of conscience, there was no need for its own courts. Consequently,
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Common Law and Equity
18 March 2021
the Jurisdicature Acts of 1873-75 provided that all courts shall administer equity and
common law. Later in 1981, s49 of the Supreme Court Act finalised that the former shall
prevail in a conflict between equity and common law.

Although common law and equity both follow stare decisis, equity created maxims
to ensure morally fair decisions. The first maxim is 'He who comes to equity must come with
clean hands.' Claimants who are in the wrong are not eligible for an equitable remedy. In
D&C Builders v Rees, Lord Denning refused to apply the doctrine because the Reeses took
advantage of the builders' financial situation, and therefore did not 'come with clean hands.
The next maxim is 'He who seeks equity must do equity.' He who seeks equitable remedies
must also act fairly towards their adversary. In Chappel v Times Newspaper Ltd, the
injunction was declined as the employees refused to stop their strike against their
employers. Lastly, 'Delay defeats equity.' A claimant should not take an unreasonable
amount of time to raise his claim. The courts examine the unreasonableness of any delay as
a matter of fact for each case. In Leaf v International Galleries, the buyer took five years to
raise his claim, so the court refused recession on the grounds of delay.

Over time, equity increased the number of remedies available to claimants. An

injunction is an order to do or not to do an action. For example, prohibitory injunctions
refrain a party from taking action. They may be used to safeguard confidential information
in economic dealings, prevent a breach of contract, or stop a party from taking legal action.
In Warner Brothers v Nelson, an injunction was issued to prohibit Ms Davis from filming
with other companies against her contract with Warner Brothers. Claimants may be
awarded both an injunction and damages in a case—the damages act as compensation for
the past problems. 

Specific performance requires a party to fulfil a contract's performance, protecting

the expectation interests of the innocent party. It is usually available on the sale of land but
otherwise is not generally available if damages are an appropriate alternative. Rescission is a
remedy in contract cases. It helps unwind a contract between parties so the parties may
return to their pre-contractual positions as far as possible. This is used for cases of a breach
of fiduciary duty, innocent but material misrepresentation, unconscionable conduct, or
equitable fraud. The following remedy is rectification, where an accidental mistake in a
document is altered to reflect the parties true intentions.

           In modern times, recent remedies include a freezing order and search order. A
freezing order, also known as a Mareva injunction, is granted to freeze assets preserve a
defendant's assets in his account and prevent the defendant from voiding a financial claim
by placing his possession beyond the reach of the applicant. A search order, or an Anton
Piller order, allows the claimant to search the defendant's premises and collect any
documents or materials which could act a proof. A search order's function is to preserve
evidence or property, which is the subject of an action.

A 2016 paper by Samuel Bray wrote that the Lord Chancellor had adopted certain
doctrines for homeowners. The modern equity answer to this is trusts and mortgages. A
mortgage is a debt tool guaranteed by collateral of certain real-estate property that the
borrower must pay back with a predetermined set of payments. Individuals and businesses
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Common Law and Equity
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use mortgages to purchase large real estates without paying the entire sum immediately.
The bank can foreclose if a borrower stops paying his mortgage. Secondly, trust is a
relationship whereby property is held by a party for another person's benefit. A settlor
creates a trust and pass property to a trustee. The trustee holds that property for that
trust's beneficiaries. It can be used for pension funds or property settled on family
members.

Nowadays, though common law and equity are practised simultaneously in a dual-
system, their distinction is still important from the point of law. Common law remedies are
granted as of right, and equitable remedies are up to the courts' discretion. Professor
Walter Cook opined that equity could not be considered a single law system but a
complementary one. Statute law relies on codified legislation, and common law provides
clarification and interpretation of past cases. Thus, these sources of law complement each
other by providing modern solutions and creating a precedent.

Professor Ashburner opines otherwise. He described common law and equity as two
rivers that never mingle. Many judges have argued against this opinion judicially. Lord
Diplock in United Scientific Holdings Ltd v Burnley Borough Council argued that Ashburner's
metaphor was deceptive, infirming that the Jurisdicature Act 1873 is still in effect. Lord
Denning shares a similar view in Federal Commerce and Navigation Ltd v Molena Alpha Inc,
describing that these 'streams' are intermingled. He added that the court's role is to ensure
fair judgment and justice, not differentiate these law systems. 

           However, the development of equity is far from over. Michael Graetz, the author of
"The Wolf at the Door," suggests that we can extend the reach of equity to aid economic
distress and unemployment, especially in precarious times of the pandemic. The author
suggests we should include common law legislation to help with wage increment and health
care insurance. We see that equity can be expanded to aid with social justice and improving
living standards.

Lastly, we can conclude that common law defects brought about equity, and equity
aims to fill in these gaps by providing fairness and justice to the legal system. As Frederic
William Maitland said, equity's role is to fulfil common law.