⇒ Equity ‘mitigates the rigour of the common law’ (Earl of Oxford’s Case (1615))
⇒ Equity is underpinned by the notion of conscionability (Westdeustsche Land v Islington LBC ). Conscionability, in short, means 'fairness'.
⇒ Equity, like the law, depends on precedent and is NOT discretionary i.e. the judges make decisions based on previous decisions
⇒ Historically, equity and the common law were two separate jurisdictions
⇒ However, they were influential upon each other e.g. the common law courts began to apply equitable rules and recognise trusts
⇒ Ultimately, the two jurisdictions were fused together in the Supreme Court of Judicature Acts in the 19th Century
⇒ If, in any case, there is a conflict between common law and equity, equity shall prevail (s25(11) of the Supreme Court of Judicature Act 1873)
⇒ Conscionability is about holding the defendant up to an objective standard of good conscience
⇒ Conscionability may be invoked by fraud, dishonesty, misrepresentation, mistake, breach of duty, breach of trust/confidence, conflict of interest, abuse of position, etc
These are not binding rules, but guiding principles (Tinsley v Milligan )
⇒ Where the common law fails (or damages is inadequate) equity has developed a number of equitable remedies to address the situation. These include injunctions.
⇒ Equity cannot overrule statute; and equity will not overrule common law unless there is unconscionability. But, where there is a conflict equity prevails: Supreme Court of Judicature Acts 1873 s.25(11)
⇒ In a situation in which there is no clear distinction to be drawn between parties as to which of them has the better claim in equity, the common law principle which best fits the case is applied
⇒ In that sense, where the equitable doctrines produce an equal result, then the common law prevails
⇒ Where two claimants have equally strong cases, equity will favour the person who acquired their rights first → so the first in time prevails
⇒ Too much delay will prevent access to an equitable remedy (the equitable doctrine of laches)
⇒ However, as equity follows the law, the Limitation Act 1980 prevails
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⇒ A Claimant will not receive court’s support unless she has acted fairly herself e.g. Equity will not favour someone who has committed an illegal act (Nesson v Clarkson (1845))
⇒ In other words, an applicant for an equitable remedy will not receive that remedy where he has not acted equitably herself (Jones v Lenthal (1669)
⇒ Where both parties have an equitable interest, there is a presumption that the interests are equal, in the absence of reasons otherwise e.g. where there is a trust of a family home, there will be a presumption that the shares are equal.
⇒ Equity will look to the intent of the parties, rather than the words used → This has been used to create a trust where there is clear intention, even if the word 'trust' has not been used (Paul v Constance )
⇒ The Court will consider something has been done if it ought to have been done e.g. in the case of Walsh v Lonsdale, where a binding contract to grant a lease was deemed to create an equitable lease, even though the formal requirements had not been observed
⇒ Where an act is performed, though not expressed as being in fulfilment of an obligation, equity will hold that the act is in fulfilment of that obligation (rebuttable presumption)
⇒ Equity’s jurisdiction always exercised against the person and the judgements bind the defendant
⇒ This does not mean it awards purely personal rights (e.g. damages) → equity acting in personam simply means it is concerned with the conscience of the defendant (Earl of Oxford case)
⇒ This leads to the rule that equitable decisions are not enforceable against bona fide purchasers for value without notice as such a person’s conscience is not affected
At Common Law, the only remedy was damages, so equity developed other remedies: Specific Performance; Rescission; Rectification; Injunctions; Freezing Orders (Mareva); Search Orders (Anton Piller); Account
⇒ The Court will give an injunction, on equitable principles, where the balance of convenience requires.
⇒ This is an order to freeze assets in a jurisdiction as surety against possible damages. The aim is to prevent defendants from placing his assets outside the jurisdiction and beyond the court's reach.
⇒ Sometimes described as a civil search warrant (though that is misleading), it is an order of the court to allow the claimant to enter the defendant's premises and search for evidence that will support the claimant's case.
⇒ Nowadays, the process is controlled by the court, under an independent solicitor who is answerable to the court
⇒ An order requires an extremely strong prima facie case that the evidence exists and that the defendant is likely to destroy it rather than disclose it in civil proceedings.
⇒ They used to be used widely used in cases involving counterfeiting and unlicensed distribution of media.
⇒ A liability to account is an equitable remedy which may be used if a person has come into property unconscionably
⇒ Unlike the compensatory remedies in tort law, a duty to account will hold the defendant liable not for the loss suffered by the claimant, but for any profit gained. The remedy (i.e. account) is available even if the claimant has suffered no financial loss (Boardman v Phipps)
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