Overview Of The Legal System And The Interaction Between Common Law And Equity

Development and Evolution of the Legal System in Australia

Discuss About The Legal System Concentrate Law Revision Guide.

It is rightly said that the common law and equity work in different ways towards the very same ends. Thus, where it is asserted that they work in independence of each other is wrong as there is no difference between them[1]. The Australian law does not have its based on a single code of civil obligations which could give forth specific duties and rights. The legal system of the nation is developed from the laws of UK due to the history of the nation. The equity, control and tort cover different bodies of doctrine having their own set of history. Each area of law has an undoubted interaction between them which often results in the lines being blurred[2].

This is exemplified in the common law and equity fusion debate. The pro-fusionist and the anti-fusionist have made use of statements which are covered in the theme of this discussion, to convince their viewpoint on this debate. There are some views which provide that even though equity and common law have a shared objective, they work in varied manner, in terms of their management being distinctive. The other perspective is that the shared objectives under the equity and common law require mutual dependence[3]. This discussion is focused on analysing this statement, particularly in context of equitable remedies.

Even though equity attempts to fulfil the common law, it does not make attempts of displacing it with a moral code. For being influential, the law has to be professed as predictable and certain and required to be fair and flexible. There is a need for clear rules on one side and on the other side there is the need of flexibility for producing exception to the cases which result in unjust or apparently absurd conclusions on application of rules in a rigid manner[4]. In essence, equity is the essence of doctrines, rules and principals which had been furthered by the Court of Chancery as a positive competition with the doctrines, rules and principals of the courts of common law. The end of Court of Chancery and common law courts has resulted in proposition that the difference between the equity and common law is outdated now and that there has been a fusion of the two approaches. As against this, a better analysis shows that the equity and common law continue to be different and yet are mutually dependent features of the law. In other words, they work in varied ways towards the same goals and to assert them as independent of each other is wrong in the same way as is to assert that they have no difference in between them[5].

Differences and Similarities between Common Law and Equity

The tow structures of equity and common law, since a long time, ran side by side in an uncomfortable manner. By no means was it established by 1615 that which one had to be applied where a case of dispute was raise. Despite this, even after 1615, there had been inconsistencies in the two systems and this continued for a long time. Once the English court system was reconstructed in 1865, a decision had been taken that where there was a conflict in between the equitable principles and the business law, the equity would prevail[6]. A system of courts was created through the Judicature Acts 1873-1975 where the courts of equity and the common law courts were amalgamated and the result of this amalgamation was the Supreme Court of Judicature which would administer both equity and the common law. As a result of this, the court is not of equity or law, it is of complete jurisdiction[7].

In middle ages in England and Wales, the area of law which is recognized as equity had been developed for such situations where the ordinary common law failed in affording suitable redress. A number of legal actions stemmed from issue of writ, but having minute inaccurate on writ, would result in the entire action being invalidated. There was one more shortfall in the common law which was related to the only remedy being that of damages or compensation. This meant that court orders were not present to force people to do something in terms of specific performance or to stop any conduct, in terms of injunction order. So, the court could not order a person to sell a product as per the drawn agreement or to stop usage of specific title. This led to the unsatisfied litigation making frequent petitions to the King seeking their mediation in the specific cases, as the courts at that time in any case were the courts of the King. These petitions made for justice were attended by the Chancellor of the King, who carefully determined the case based on their own discretion[8]. The decisions made by Lord Chancellor, over the years, came to be known as rules of equity, which had been derived from Latin work meaning levelling[9].

Such newly established rules were commonly applied in the Chancellor’s Court, which was the special court, and later came to be identified as Court of Chancery. It came to be presented as being an apparent set of principles instead of being the Chancellor’s personal jurisdiction in 1673 during Lord Nottingham’s Chancellorship. By the end of 1827 and end of Lord Eldon’s Chancellorship, equity came to be recognized as precise jurisdiction. Despite this development of two distinctive yet parallel systems, this manner of dispute resolution was bound to create conflict[10].

Analysis of the Equality and Common Law Statement in the Context of Equitable Remedies

Where an individual had been wronged owing to the common law failure in remedying the gross injustice, it would be applied to the equity court. Where the case was accepted by the chancellor, a remedy which was prevented by the common law court would be approved by the chancellor, from imposing the order. The things which transpired in the Earl of Oxford’s case[11] led to the common law court ordering debt being paid. This debt had been unpaid previously but the deed which gave the affect to need had not been cancelled. When the matter was presented before the court of equity, they were ready to give an order which not only prevented this from happening but also in solving the deed. In due course, the collision was solved in equity’s favour and thus in cases of irregularity, there was prevalence of equity[12].

The equity history is deemed as a continuous flow and ebb in between the competition and compatibility of it with the common law[13]. The more recent developments in this particularly segment cover expansion of remedies, the new model of constructive trust, enhanced status of contractual licenses, recognizing restrictive covenants and developing doctrines like proprietary estoppel. Through the doctrine of precedent, efforts have been made to validate such developments. In Cowcher v Cowcher[14], Justice Bagnall had provided that this does not prove or even infer that equity was past childbearing. It simply meant that its descendants had to be legitimate in terms of being brought out as precedents. This was rightly stated as otherwise the attorneys would be unable in advising clients of their title and each and every dispute would result in a lawsuit.

The most important feature, in all the probabilities, of equity, is trust. When the title of any property is bested in an individual as being the trustee of another, not only would the trustee be restrained from denying their trust and in setting themselves as being the absolute owners, but it would also impose certain positive duties like that of good faith on the trustee towards the other individual. Even though this concept had been brought out long back, the protection which is provided to the equitable owners behind trust has been changed considerably in the last fifty years due to developments[15].

The different between equity and the common law is interestingly represented through the illustration of remedies. In Attorney General v Blake[16], Lord Nicholls stated that the difference was raised as being an accident of history. In general, the remedies and legal rights continue to be different from the equitable ones. And yet, there are certain similarities. An example of this can be cited in injunction, which is an equitable remedy, and which can be applied for the anticipated contravention of a contract, or for the purpose of halting a nuisance, both of which are common law claims. The House of Lords, in Attorney General v Blake had authorized equitable remedy of account of profits for assertion for contravention of the contract, as the common law remedy in terms of damages would have proved to be inadequate. Another point worth noting is that the equity remedy of account of profits can be accessed when there is presence of fiduciary relationship. Though, the request was endorsed by the House of Lords as otherwise in exceptional cases in which the operative way was remedying the wrong done. As opposed to this, in Seager v Copydex Ltd CA[17], case had been raised for the contravention of confidence regarding confidential information which the defendants had exposed regarding carpet grip. This claim was equitable and would normally allow for equitable remedy of injunction being obtained. Conversely, such an injunction would not have been successful and the judges would award damages. This shows that common law remedy can be used for equitable claim related to breach of confidence.

Equitable Remedies

When the focus is specifically made on the equitable remedies, it shows that common law and equity work in different manner. Equity works in a manner where the goal is of correcting any kind of unconscious element, thus the equitable maxim that the equity would not suffer wrong without remedy. So, where the common law fails in providing remedy, the same would be provide through equity as it follows the law. The common law only aims to protect in cases of contravention of contract in terms of putting the person in the same economic place where they would have been if the contract had been performed; however, equity goes beyond it and provides equitable remedies like specific performance, injunction and recession[18].

Conclusion

Thus, from the undertaken discussion in the previous sections, it can be concluded that in terms of the equitable law, equity and common law work in a different manner, as against the statement made. And yet, a close analysis of the two reveals that they work towards the same end and are not independent to each other. For instance, both work towards providing remedy to the aggrieved party in case of breach of contract, and yet provide varied remedies in terms of damages under the common law and equitable remedies under equity.

References

Bryan M, Vann V, and Thomas SB, Equity and Trusts in Australia (Cambridge University Press, 2^nd ed, 2017)

Clements R and Abass A, Equity & Trusts: Text, Cases, and management (Oxford University Press, 2^nd ed, 2011)

Hepburn S, Principles of Equity & Trusts (Cavendish Publishing, 2^nd ed, 2013)

Hinchy R, The Australian Legal System: History, Institutions and Method (Pearson Education Australia, 2008)

Hudson A, Equity and Trusts (Routledge, 9^th ed, 2016)

Maine HS, Ancient Law (Cosimo, Inc., 2005)

McDonald I, and Street A, Equity and Trusts (Oxford University Press, 5^th ed, 2016)

Moffat G, Trusts Law: Text and Materials (Cambridge University Press, 4^th ed, 2005)

Penner J, The Law of Trusts (Oxford University Press, 10^th ed, 2016)

Rotman LI, ‘The Fusion of Law and Equity: A Canadian Perspective on the Substantive, Jurisdictional, Or Non-Fusion of Legal and Equitable Matters’ (2016) 2 Can. J. Comp. & Contemp. L. 497

Vollans T, and Asquith G, English Legal System Concentrate: Law Revision and Study Guide (Oxford University Press, 2^nd ed, 2011)

Watt G, Trusts and Equity (Oxford University Press, 7^th ed, 2016)

Attorney General v Blake [2000] UKHL auditing, [2001] 1 AC 268

Cowcher v Cowcher [1972] WLR 425

Earl of Oxford’s case (1615) 21 ER 485

Seager v Copydex Ltd CA [1967] 1 WLR 923, [1967] RPC 349