1

Halsbury's Laws of Malaysia - Equity/290 - Equity/(2) Maxims of Equity

(2)
MAXIMS OF EQUITY
[290.012]
Functions of maxims in equity
Maxims of equity1 are not much invoked under the modern equitable jurisdiction 2. While they served equity
well in the formative era, there is now general scepticism about their helpfulness. They may be criticised for
being obscure and lending themselves to shoddy thinking or slipshoddiness 3. This is not surprising seeing
that the maxims may clash4 and, ultimately, they reflect opinions of justice, the weight of which inevitably
varies from age to age. The maxims are nowadays regarded as being statements of broad themes which
underlie equitable concepts and principles5.
1 See further [290.013]-[290.026].
2 As to the modern equitable jurisdiction see [290.004].
3 Especially the maxims 'equity acts in personam' (see [290.013]), 'he who comes to equity must come with clean hands' (see
[290.016]), and 'equity will not suffer a wrong to be without a remedy' (see [290.021]). The reason is that the maxims have
crystallised into narrower and more definite rules and it is regressive to refer to them. See Spry Equitable Remedies (4th Edn,
1990) pp 166-167 discussing the maxim that he who comes to equity must come with clean hands. The maxim 'equity regards
that as done which ought to be done' applies when there is a specifically enforceable obligation: Honda Motor Europe Ltd v
Powell [2014] EWCA Civ 437, [2014] All ER (D) 95 (Apr), CA (Eng).
4 Ie as much as principles may.
5 See Corin v Patten (1990) 169 CLR 540 at 557.

[290.013]
Equity acts in personam rather than in rem
Equity operates to create personal interests not proprietary rights 1. The maxim that equity acts in personam2
is one of the few almost invariant maxims3. It emphasises that there must be some personal deficiency or
some wrongdoing attributable to the defendant before equitable relief can be given; since equity acts on the
conscience of the defendant4. Further, it emphasises the nature of the judgment given and the nature of the
sanction that is applied to the defendant who disobeys that judgment. Typically, a decree or order is made
against the defendant and disobedience to that decree or order constitutes a contempt of court 5 and results
in the defendant's imprisonment until he repents of his disobedience 6.
The chief significance of the maxim is seen in relation to property 7. In disputes over title, the fact that equity
acts in personam implies that the nature of the property is irrelevant 8. What is material is the way or manner
in which the defendant who has title to the property has dealt with it. Finding that the defendant has dealt
with property to which he has title in a manner which attracts equitable intervention, the court makes an
appropriate decree or order against him and not the property 9. This implies that if in the meantime the
property has again been dealt with and transferred to a third party without notice of the equitable interest of
the plaintiff, the plaintiff will be unable to assert his rights in equity against the innocent third party who has
given value for the legal estate. The rights in equity do not attach, as it were, to the property in the course of
its transmission; and therefore the legal title remains unaffected.

In limited cases, however, the court may make a vesting order vesting legal title in some person, usually a
trustee10, to hold for the benefit of the holder of the equitable interest. In other cases, although theoretically,
the legal title is unaffected, the court will protect and enforce equitable rights in the property against everyone
dealing with the legal interest save equity's darling 11.
Where a trustee or fiduciary12 wrongfully appropriates property subject to the trust or to fiduciary obligations,
the fact that equity acts in personam, implies that the trustee or fiduciary may be made to account for any
profit made or loss incurred through breach of duty or to restore any property wrongfully appropriated by him,
regardless of whether the property has risen in value 13. It also implies that although there is normally no
jurisdiction to adjudicate on a question of title to immovable property situated abroad, or more accurately,
although the question of title to immovable property situated abroad is not justiciable 14, the court may
entertain a dispute and give certain reliefs involving an equitable title if it has jurisdiction over the defendant 15.
The court in such cases is merely adjudicating upon the equities as between the parties to the dispute 16 and
for this reason may grant foreclosure or redemption 17, or specific performance18 in respect of mortgages19 or
contracts to sell foreign land20, or compel the performance of a trust of foreign land 21. The court will not,
however, order delivery of possession or recovery of a rentcharge 22.
The application of the maxim in cases of divorce23 has been superseded in practice since the courts have
now very wide statutory powers to adjust the property rights of the spouses in a divorce proceeding and
these powers extend to property situated outside the jurisdiction 24. In the rare case that the courts having
jurisdiction over the parties have to adjudicate a question of their rights as spouses in matrimonial property
situated outside the jurisdiction, they will be entitled to do so and to render a judgment binding on the
conscience of the defendant25.
The Companies Act 196526 also provides the courts the discretion to be exercised in cases of winding up.
Case law has also distilled the principles involved in validating transactions after the commencement of
winding up, and even after a winding order has been granted based on two broad considerations: (1) if the
transaction(s) are beneficial to the general body of creditors; or (2) if it was just and fair to allow the
transaction(s) with particular regard to the good and honest intention of the persons concerned 27.
1 In Ewing v Orr Ewing (1883) 9 App Cas 34, 40, HL, Lord Selbourne stated: 'The courts of Equity in England are, and always
have been, courts of conscience, operating in personam and not in rem, and in the exercise of this personal jurisdiction they
have always been accustomed to compel the performance of contracts and trusts which were not ....within their jurisdiction'.
2 See Re Huey Yet Tin Dredging Ltd [1935] MLJ 34; Bachan Singh v Mahinder Kaur [1956] MLJ 97. See also Lian Keow Sdn
Bhd (in liquidation) v Overseas Credit Finance (M) Sdn Bhd [1988] 2 MLJ 449 at 464, SC: 'Where there is a valid binding
contract for the sale of land, the purchaser, when he has performed his side of the contract, acquires a right in personam, ie he
acquires the right to the land as against the vendor personally but not good against the whole world'.
It was stated in Lian Keow Sdn Bhd (In Liquidation) v Overseas Credit Finance (M) Sdn Bhd [1988] (above), per Syed Agil
Barakbah SCJ: 'The Torrens system as codified by the National Land Code 1965 deals with registration of land and provides
simplicity and certitude in transfers of land. It is a system of conveyancing and provides indefeasibility of title to a registered
owner of land against any rival claimants except in the case of fraud or similar misconduct as provided under s 340(2) of the
Code. It does not prevent or restrict the creation of beneficial interests in land by way of express, implied or resulting trust
arising by operation of law in Malaysia by virtue of s 3 of the Civil Law Act 1956. It does not abrogate the principles of equity but
alters the application of particular rules of equity in so far as is necessary to achieve its special objects. In this way, the court is
entitled to exercise jurisdiction in personam to insist upon proper conduct in accordance with equitable principles and norms
(see Wilkins v Kannammal [1951] MLJ 99, 100; Registrar of Titles, Johore v Temenggong Securities Ltd [1976] 2 MLJ 44, 45
and Oh Hiam v Tham Kong [1980] 2 MLJ 159, 164-165).'
See also Malaysia Building Society Bhd v Johore Mining and Stevedoring Company Sdn Bhd [2004] 5 CLJ 82; Kuching Plaza
Sdn Bhd v Bank Bumiputra Malaysia Bhd [1991] 3 MLJ 163, SC; Oh Hiam v Tham Kong [1980] 2 MLJ 159, PC; G
Rethinasamy v Majlis Ugama Islam, Pulau Pinang [1993] 2 MLJ 166; Krishnadas v Maniyam [1993] 3 MLJ 465 and
Commissioner of the Federal Capital v Insurance Company of North America [1968] 2 MLJ 143 at 145, 146, FC: 'A Court of
Equity acts in personam and the orders made by the Court of Chancery were injunctions restraining the defendant from setting
up a defence under the Statute of Limitation'.
3 Swiss Bank Corp v Lloyds Bank Ltd [1979] Ch 548 at 565, [1979] 2 All ER 853 at 865-866. Further it has also been described
to be historically of the greatest importance in Meagher, Gummow and Lehane Equity: Doctrines and Remedies (3rd Edn, 1992)
p 342.
4 See Muschinski v Dodds (1985) 160 CLR 583 at 616, rejecting the idea of equity as a licence to achieve objective fairness.
5 As to contempt of court generally see [340] CONTEMPT OF COURT (2014 Reissue).

6 Strictly, this proposition is no longer true and there are instances where the court has ordered the defendant's property to be
sequestrated or to pay a fine.
7 If an action at law depends on possessory title, the holder of a mere equitable interest may not have locus standi to sue. See
[290.009] note 1.
8 This makes it possible for the Court of Chancery to assume jurisdiction over any property dispute, whether the property is real
or personal, tangible or intangible.
9 An order in equity will direct the defendant to take all necessary steps to vest the disputed property in the plaintiff. It is not selfexecuting like a common law order which of itself creates the proprietary rights claimed by the plaintiff.
10 See TRUSTS (2015 Reissue) [310.133] and following.
11 See [290.077] and following.
12 As to fiduciaries see [290.184] and following.
13 As to account see [290.295]-[290.297].
14 Ie known as the rule in Companhia de Moçambique v British South Africa Co [1892] 2 QB 358, CA (Eng), as clarified
in Hesperides Hotels Ltd v Aegean Turkish Holidays Ltd [1979] AC 508, [1978] 2 All ER 1168, HL. See also Re Hawthorne,
Graham v Massey (1883) 23 ChD 743. The rule was expressed in the headnote to Leong Chek Yeng Tong v Chinese
Commercial Bank Ltd (1922) 15 SSLR 246 in these terms: 'The courts will not exercise jurisdiction in personam in matters
relating to land out of the Colony in the absence of special circumstances such as a contract between the parties, privity
between the parties, or some personal obligation moving directly from one to the other'. It extends to the adjudication of the
validity of intellectual property rights generally and patent rights particularly: Potter v Broken Hill Pty Co Ltd (1905) 3 CLR 479.
However, questions of the actionability of an act of infringement of a foreign intellectual property right in the country of its
creation are justiciable in England: Pearce v Ove Arup Partnership Ltd [2000] Ch 403, [1999] 1 All ER 769, CA (Eng).
15 Lord Cranstown v Johnston (1796) 3 Ves 170; Matthaei v Galitzin (1874) LR 18 Eq 340; Eng Liat Kiang v Eng Bak Hern
[1995] 3 SLR 97, CA (Sing). The court may also decline to exercise its jurisdiction. See Ewing v Orr Ewing (1883) 9 App Cas
34, HL. It will not make a self-frustrating order: &'Morocco Bound&' Syndicate Ltd v Harris [1895] 1 Ch 534.
16 The theory being that the decree does not change the title but merely compels a party to effect the change.
17 Paget v Ede (1874) LR 18 Eq 118.
18 As to specific performance see [290.311].
19 As to mortgages see generally LAND (2009 Reissue) [250.332].
20 Re Smith, Lawrence v Kitson [1916] 2 Ch 206; Richard West & Partners (Inverness) Ltd v Dick [1969] 2 Ch 424, [1969] 1
All ER 943, CA (Eng). Cf Tito v Waddell [1975] 3 All ER 997, [1975] 1 WLR 1303. Equity will intervene and make an order to
pay rent: St Pierre v South American Stores (Gath and Chaves) Ltd [1936] 1 KB 382, CA (Eng). Equity will protect the equity of
redemption: British South Africa Co v De Beers Consolidated Mines Ltd [1910] 2 Ch 502, CA (Eng). Equity will remove
trustees: Chellaram v Chellaram [1985] Ch 409, [1985] 1 All ER 1043.
21 Penn v Lord Baltimore (1750) 1 Ves Sen 444; Ewing v Orr Ewing (1883) 9 App Cas 34 at 40, HL; Re Clinton, Clinton v
Clinton (1903) 51 WR 316. The Mareva injunction is another instance of equity's extra-territorial reach. Equity's extra-territorial
reach is justified on the ground that it acts on the conscience of the defendant who is amenable to the jurisdiction. If the
defendant is not amenable to the jurisdiction, the court will not adjudicate on the question. On the other hand, although the
defendant is amenable to the jurisdiction, there may be reasons for not exercising the jurisdiction. The principles which govern
the exercise of the jurisdiction are laid down in Spiliada Maritime Corp v Cansulex Ltd, The Spiliada [1987] AC 460, [1986] 3 All
ER 843, HL, and adopted in Malaysia: see American Express Bank Ltd v Mohd Toufic Al-Ozier [1995] 1 MLJ 160, SC; Hj
Sharkhan Abd Rahman v Campbell Securities Sdn Bhd [2004] 6 MLJ 67; Cita Marine Sdn Bhd v Progressive Insurance Bhd
[2001] 1 MLJ 81; Harta Packaging Industries (Malacca) Sdn Bhd v Cymun Development Sdn Bhd [2004] 4 CLJ 712.
The principles have also been adopted in the Singapore courts, see Brinkerhoff Maritime Drilling Corp v PT Airfast Services
Indonesia [1992] 2 SLR 776, CA (Sing); Eng Liat Kiang v Eng Bak Hern [1995] 3 SLR 97, CA (Sing); Oriental Insurance Co Ltd
v Bhavani Stores Pte Ltd [1998] 1 SLR 253, CA (Sing).
22 Roberdeau v Rous (1738) 1 Atk 543; Whitaker v Forbes (1875) 1 CPD 51, CA (Eng).
23 As to divorce see FAMILY LAW (2013 Reissue) [390.258]-[390.263]. See Brett Andrew Macnamara v Kam Lee Kuan [2008] 2
MLJ 450 where the court ruled that as the trust deed had declared that the plaintiff was the one who financed the purchase of
the property he was the beneficiary of the trust. He therefore had an interest in the property. In fact, he was the beneficial owner
of the property. Seen in that light, the defendant was a purchaser with actual notice of an unregistered interest of the plaintiff.
The court concluded that equity should intervene in the circumstance, in favour of the plaintiff.

24 See Hamlin v Hamlin [1986] Fam 11, [1985] 2 All ER 1037, CA (Eng), in which it was held that 'any property' in the
Matrimonial Causes Act 1973 (UK) s 37(2)(a) was not restricted to property in England and Wales but included real and
personal property situated abroad and, accordingly, the court had jurisdiction to make an order under that subsection in respect
of realty abroad. In exercising its jurisdiction under s 37 the court was determining rights and obligations arising out of divorce
proceedings and exercising jurisdiction in personam against a respondent amenable to the court's jurisdiction. The
corresponding provision in Malaysia which empowers the division of matrimonial assets is the Law Reform (Marriage and
Divorce) Act 1976 (Act 164) s 76.
25 See Hamlin v Hamlin [1986] Fam 11, [1985] 2 All ER 1037, CA (Eng); although the court will not exercise its discretion to
make an order concerning foreign property which cannot be enforced.
26 Ie the Companies Act 1965 (Act 125) s 223.
27 Wong Wee Kheong v Daya Bersama Sdn Bhd [2013] MLJU 230, FC (the general rule of the Companies Act 1965 s 223 was
that it did not shut out bona fide transactions. The discretion is an unfettered one). In Lian Keow Sdn Bhd (In Liquidation) v
Overseas Credit Finance (M) Sdn Bhd [1988] 2 MLJ 449, SC, Seah SCJ made reference to a passage by Vaisey J in Re
Steane's (Bournemouth) Ltd [1950] 1 All ER 21, which states: 'that each case must be dealt with on its own facts and particular
circumstances (special regard being had to the question of the good faith and honest intention of the persons concerned), and
that the court is free to act according to the judge's opinion of what would be just and fair in each case'.

[290.014]
Equity will not permit a statute to be used as an instrument of fraud
The maxim that equity will not permit a statute to be used as an engine of fraud 1 is of less ancient pedigree
than the foregoing. Recognised from the passage of the Statute of Frauds (1677) 2, its chief function or value
is to provide a means of escape for a deserving plaintiff who has failed to comply with prescribed formalities,
where failure to do so would otherwise render some transaction unenforceable at law 3. In most instances of
its application, the prescribed formalities are designed for the protection of the plaintiff, but this is not a
requirement for equitable intervention. Formalities prescribed for the defendant's protection may also be
avoided under the maxim where the defendant has been guilty of unconscionable conduct or has clearly
evinced a desire not to take the benefit of the protection afforded to him 4. Although some kind of fraud is
essential to its invocation, the maxim does not predicate fraud at the onset of the transaction to be
impugned5. It is sufficient if in the circumstances it would at the time of dispute and trial be wrong or
inequitable for the defendant to plead the prescribed formalities as a defence to defeat the plaintiff's claim 6. A
defendant who in such circumstances raises the statute as a defence to the plaintiff's rights is guilty of
constructive fraud even though the intention to defraud was absent at the time of the transaction.
Constructive fraud is a sufficient ground of equitable intervention. There is no requirement that the plaintiff
must have been ignorant of the requisite formalities; indeed, both parties may consciously seek to avoid the
prescribed formalities but, provided this is not illegal, the defendant cannot afterwards use the statute as an
engine of fraud7. The maxim bears strong resemblance to the doctrine of estoppel, but is principally
distinguished from it in the absence of any requirement that there should be a representation which has been
acted upon8. The doctrine of part performance is probably another instance of application of the maxim 9.
There are many instances in which the maxim equity will not permit a statute to be used as an engine of
fraud has been invoked10. A transferee of property transferred informally to him on condition that he should
re-convey it if certain events do not materialise will not be permitted to plead non-compliance with the
prescribed formalities for a valid transfer at law11. An intestate successor who receives his share of the estate
after representing to the deceased that he would carry out his wishes and thereby persuading the deceased
to die intestate will not be permitted to plead the formalities prescribed by the law of wills 12. On one view, the
maxim underlies the doctrine of secret trusts but this is controversial 13. However, it seems that the maxim
does not apply to preclude a transferor from resiling from a transaction that does not comply with prescribed
formalities14.
1 In Rasiah Munusamy v Lim Tan & Sons Sdn Bhd [1985] 2 MLJ 291 at 296, SC, the court explained this term in the following
words: 'It is not a fraud in the common law sense, but an unmeritorious and unconscionable conduct which is known as
constructive or equitable fraud'. This principle was followed in Weng Lee Granite Quarry Sdn Bhd lwn Pentadbir Tanah Pejabat
Daerah Dan Tanah Seberang Perai Tengah Bukit Mertajam [2014] 9 MLJ 85 where the court ruled to estop the defendants
from raising the Limitation Act 1953 (Act 254) to defeat the plaintiff's claim for recovery of monies which had been paid to the

first defendant of which the defendant was not entitled to.

2 The Statute of Frauds (1677) (Eng): see Revely & Co v Kam Kong Gay (1840) 1 Ky 32. Lord Tenterden's Act 1828 (the
Statute of Frauds Amendment Act 1828 (UK)) to the extent that it amended the Statute of Frauds was held in Penang Foundry
Co v Cheah Tek Soon (1882) 1 Ky 559 to be applicable presumably because, although it was a post reception statute, it
amended a pre reception statute. See also Alang v Kulop (1927) 6 FMSLR 108; Jemadar Sabtu v Virtashellum (1871) SLR
Leic 431.
As to the application of the Statute of Frauds (1677) (Eng) in Malaysia see Cheng Sui Chiang v Chang Koo Cheng [1981] CLJ
134 (Rep); cf Dato&' Seri Tiong King Sing v Datuk William Lau Kung Hui [2003] 6 MLJ 341; Pathma d/o Naganather v Nivedita
d/o Naganather (No 1) [2002] 6 MLJ 361.
3 See Rochefoucauld v Boustead [1897] 1 Ch 196, CA (Eng); Lyus v Prowsa Developments Ltd [1982] 2 All ER 953, [1982] 1
WLR 1044.
4 Where the defendant represents that he will not insist on the protection of the statute but afterwards seeks to resile from his
representation, he will be estopped from doing so. See further [290.274]-[290.275]. There is also authority that a defendant
guilty of unconscionable conduct will not be permitted to insist on compliance with the prescribed formalities: see Pennington v
Waine [2002] EWCA Civ 227, [2002] 4 All ER 215, [2002] 1 WLR 2075, CA (Eng).
5 If the doctrine of part performance is an application of the maxim, then it shows that undertaking acts at the onset
unequivocally referable to the contract alleged will make it inequitable for the defendant to plead non-compliance with the
prescribed formalities. See Ungley v Ungley (1876) 4 ChD 73 at 76-77; Steadman v Steadman [1976] AC 536 at 540-541,
[1974] 2 All ER 977 at 980-981, HL. But it does not show that proof of such act is necessary.
6 And the inequity might be nothing more than that it would now cost the plaintiff more to secure a similar contract if
enforceability of the contract was denied. This is because the maxim reflects a principle of general social policy to be upheld
despite any rules of evidence as between themselves that the parties may have created by their conduct or otherwise: see Kok
Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993 at 1016, [1964] 1 All ER 300 at 308, PC; Yaxley v Gotts [2000] Ch
162, [2000] 1 All ER 711, CA (Eng).
7 The maxim, however, is not concerned with illegality: see Yaxley v Gotts [2000] Ch 162, [2000] 1 All ER 711, CA (Eng). See
Sia Siew Hong v Lim Gim Chian [1995] 3 MLJ 141, CA.
8 As to equitable estoppel see [290.271]-[290.273].
9 See Broughton v Snook [1938] Ch 505 at 513, [1938] 1 All ER 411 at 418-419; J C Williamson Ltd v Lukey and Mulholland
(1931) 45 CLR 282 at 300. The doctrine of part performance was accepted in Tan Seng Qui v Palmer (1887) 4 Ky 251. The
doctrine requires clear evidence of a contract, the plaintiff's establishment of a case for specific performance and an act of part
performance by the plaintiff or on his behalf. See Steadman v Steadman [1976] AC 536, [1974] 2 All ER 977, HL.
The act of part performance need not be the consideration promised and might consist in making repairs or giving up another
valuable asset: see Broughton v Snook (above); Kingswood Estate Co Ltd v Anderson [1963] 2 QB 169, [1962] 3 All ER 593,
CA (Eng). The doctrine of part performance has been abolished in England by the Law of Property (Miscellaneous Provisions)
Act 1989 (UK) s 2 repealing and replacing the Law of Property Act 1925 (UK) s 40, which itself replaced part of the Statute of
Frauds (1677) s 4 (Eng). See Firstpost Homes Ltd v Johnson [1995] 4 All ER 355 at 357-358, [1995] 1 WLR 1567 at 1571, CA
(Eng). The doctrine took account of the fact that an oral contract was under the old law not void, but merely unenforceable: see
Britain v Rossiter (1879) 11 QBD 123 at 130, CA (Eng); Maddison v Alderson (1883) 8 App Cas 467 at 474-475, HL. The view
that the doctrine of part performance is an illustration of the maxim is incompatible with the requirement of unequivocal
referability to the contract alleged: see Britain v Rossiter (above). There is a view that the maxim strikes at unconscionable
conduct but the doctrine of part performance does not fit nicely with that view.
10 The courts have taken a wide view. See Sia Siew Hong v Lim Gim Chian [1995] 3 MLJ 141 at 155-156, CA: 'Another way of
stating the doctrine when applying it to written law is comprised in the maxim "equity will not permit statute to be used as an
engine of fraud". It is a doctrine of wide operation ... The doctrine, when invoked, has the effect of precluding a litigant who is
guilty of unconscionable or unmeritorious conduct from relying upon a statutory provision that would defeat his opponent's case.
An application of the doctrine requires a meticulous examination of the facts and circumstances of the particular case to
determine whether there has been any inequitable conduct. The doctrine has been applied to several statutes, including those
governing contracts, wills, trusts and assignments. The categories of statutes to which the doctrine may be applied are not
closed ...'. The court went on to apply the doctrine to bar a litigant from raising and relying upon the provisions of the Limitation
Act 1953. See also Projek Lintasan Kota Sdn Bhd v Wisma Denmark Sdn Bhd [2012] MLJU 837 and Paramill Sdn Bhd v Datuk
Joseph Pairin Kitingan [2009] MLJU 857.
11 See Last v Rosenfeld [1972] 2 NSWLR 923.
12 See McCormick v Grogan (1869) LR 4 HL 82 at 89; Jones v Badley (1868) 3 Ch App 362 at 364. See generally [330] WILLS,
PROBATE, ADMINISTRATION AND SUCCESSION (2011 Reissue).
13 The better view is that secret trusts are enforced dehors the will and the formalities prescribed by the Wills Act 1959 (Act
346) are therefore applicable only to the legal disposition to the secret trustee.

14 Wratten v Hunter [1978] 2 NSWLR 367.

[290.015]
He who seeks equity must do equity
The ancient cases developed to a high degree of sophistication the maxim, 'he who seeks equity must do
equity'1, which supplies the foundation of such diverse equitable doctrines as those of satisfaction, ademption
and election2, as well as of consolidation and tacking of mortgages3. Essentially, the maxim requires that the
plaintiff who seeks equitable relief4 must himself have performed all legal or equitable obligations due on his
part in relation to the subject matter of dispute 5. The court must always keep in mind, that there may be
cases where the court will refuse relief because the conduct of the applicant is such as to make it inequitable
that relief should be given to him6. A wider view comprehends the discharge of all outstanding obligations in
relation to the party in dispute as a condition of relief 7. This does not mean that no relief will be given until the
outstanding obligations have been discharged. The court may give the relief sought on condition of
performance of outstanding obligations or impose a term or condition which meets the equities of the case 8.
The maxim is strictly enforced in some cases. Although the mortgagee enforcing a right of sale may be
proved to have concluded an improper sale, the plaintiff mortgagor cannot be given relief by stopping the
sale until he has paid the outstanding balance and interest due to the mortgagee 9. Fortunately, in practice, an
interim injunction is possible so as to afford the mortgagor some time in which to raise the necessary funds 10.
In other cases, the maxim is less strictly enforced and a decree may be granted on terms. A person may
obtain delivery of documents subject to a lien from the lienee upon repayment of charges and debts due to
the lienee11. This is also the reason why a joint tenant who has expended money on capital improvements on
property held in joint tenancy may recover from the other joint owner compensation for the benefit
bestowed12. Again, for the same reason, a plaintiff who seeks the cancellation of an illegal loan and the return
of his security must expect to have to pay the lender what is bona fide due to him 13. Often it is the case that
the plaintiff seeking relief in equity is a party to the transaction out of which his grievance and the right
claimed by the defendant arises. But it need not always be the case and even when the plaintiff is not party
to the transaction with the defendant, but the person through whom he claims is, the plaintiff must do equity
in the sense of admitting and providing for all the equitable rights and claims belonging to the defendant 14.
Otherwise, he would be permitted to profit from his own wrong.
In exceptional circumstances, the maxim will not be applied. If the defendant has conducted himself in such a
manner vis- -vis the plaintiff as to make it inequitable for him to require the plaintiff to acknowledge his own
equitable rights or claims, the defence will be withdrawn from him 15. Again, if the plaintiff though entitled to
possession does not sue for possession in accordance with law but forcibly wrests possession from the
defendant, he will not be heard afterwards asking the court to help maintain him in possession 16.
1 St John v Holford (1667) 1 Cas in Ch 97; Bosanquet v Dashwood (1734) Cas temp Talb 38; Scott v Nesbir (1789) 2 Bro CC
41.
2 As well as the rule in Cherry v Boultbee (1839) 4 My & Cr 442. As to satisfaction and ademption see [290.128]-[290.139]; as
to election see [290.119]-[290.127].
3 See Mills v Jennings (1880) 13 ChD 639 at 646, CA (Eng); on appeal sub nom Jennings v Jordan (1881) 6 App Cas 698,
HL; St John v Holford (1667) 1 Cas in Ch 97.
As to mortgages see generally LAND (2009 Reissue) [250.332].
4 The maxim was applied because the plaintiff sought equitable relief in Lodge v National Union Investment Co [1907] 1 Ch
300. See also Chapman v Michaelson [1909] 1 Ch 238, CA (Eng).
See further Yong Hin Seong v Yong Teik Seong [2003] 6 MLJ 38; Equity Corp Sdn Bhd v Thye Sun Quarry Sdn Bhd [2002] 6
MLJ 74; Ganam d/o Rajamany v Somoo s/o Sinnah [1984] 2 MLJ 290, FC; Abdul Johari bin Abdul Rahman v Lim How Chong
[1999] 5 MLJ 593; Pathma d/o Naganather v Nivedita d/o Naganather (No 1) [2002] 6 MLJ 361.
5 The relief and the right must have grown out of the same transaction. See United States of America v McRae (1867) 3 Ch
App 79. See Mohamed Syed Fathima d/o Shahul Hamid v MMS Syed Aliyar s/o Shaik Dawood [2004] 5 MLJ 168. See also

Chappell v The Times Newspapers Ltd [1975] 2 All ER 233, [1975] 1 WLR 482, CA (Eng).
6 See Gill v Lewis [1956] 2 QB 1, [1956] 1 All ER 844, [1956] 2 WLR 962, CA (Eng); London & Regional Investments Ltd v TBI
plc [2002] EWCA Civ 355, CA (Eng). The discretion which the court exercises in the grant or refusal of an injunction is an
equitable one. The court is always sensitive to the conduct of the parties before it, and it is well accepted that he who seeks
equity must do equity: Syarikat Panon Sdn Bhd v Zecon Engineering Works Sdn Bhd [2005] 5 MLJ 609 at 632.
7 A plaintiff seeking specific performance of a contract must therefore be willing and ready to perform and if he is out of time,
must pay interest to the vendor on the purchase price from the date stipulated for completion. See Esdaile v Stephenson
(1822) 1 Sim & St 122. Similarly, when equity grants relief against a penalty, it will require the party in breach to pay damages:
see Campbell Discount Co Ltd v Bridge [1962] AC 600 at 632, [1962] 1 All ER 385 at 401, HL. But it has been said that the
maxim supports a rule that whoever takes the benefit of any property automatically takes the burdens attached to it: see Tito v
Waddell (No 2) , Tito v A-G [1977] Ch 106 at 289-311, [1977] 3 All ER 129 at 280-298. If this is correct, it would mean applying
the maxim to a case in which no relief is being sought. The correctness of the 'pure benefit and burden' view was disputed in
Government Insurance Office (NSW) v K A Reed Services Pty Ltd [1988] VR 829; Rhone v Stephens [1994] 2 AC 310, [1994] 2
All ER 65, HL.
8 These terms and conditions are not to be imposed arbitrarily. They must be what the defendant, if he were plaintiff, could
enforce, provided a cause of action arose: see Hanson v Keating (1844) 4 Hare 1 at 6. An example would be a term that the
plaintiff reimburse the defendant for costs incurred and give due allowance for skill and labour expended. See Re Berkeley
Applegate (Investment Consultants) Ltd (in liquidation), Harris v Conway [1989] Ch 32, [1988] 3 All ER 71. See also Boardman
v Phipps [1967] 2 AC 46, [1966] 3 All ER 721, HL.
9 See Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161; Parry v Grace [1981] 2 NZLR 273 at 279-280.
For a case of a completed sale see Hotel Terrigal v Latec Investments (No 3) [1969] 1 NSWLR 687. However, there are two
exceptions: first, when the amount claimed by the mortgagee is obviously wrong ( Bank of New South Wales v O&'Connor
(1889) 14 App Cas 273 at 283, PC); and second, when the mortgagee could not have exercised the power of sale ( Harvey v
McWatters (1949) 49 SR (NSW) 173 at 178).
10 Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161. See [290.312] and following.
11 See Barratt v Gough-Thomas [1951] Ch 242, [1950] 2 All ER 1048, CA (Eng); Brandao v Barnett (1846) 12 Cl & Fin 787,
HL. Cf Re Capital Fire Insurance Association (1883) 24 ChD 408, CA (Eng).
12 See also Ramsden v Dyson (1866) LR 1 HL 129.
13 Lodge v National Union Investment Co Ltd [1907] 1 Ch 300. Cf Kasumu v Baba-Egbe [1956] AC 539, [1956] 3 All ER 266,
PC; Barclay v Prospect Mortgages Ltd [1974] 2 All ER 672, [1974] 1 WLR 837. For trust cases see Chillingworth v Chambers
[1896] 1 Ch 685, CA (Eng); Hardoon v Belilios [1901] AC 118, PC.
14 As where an assignee sues the debtor, he is bound by the equities which the debtor could have enforced against the
assignor if no assignment had been made.
As to assignments see [290.064]-[290.076].
15 Story's Equity Jurisprudence (14th Edn, 1918) p 80.
16 Story's Equity Jurisprudence (14th Edn, 1918) p 81.

[290.016]
He who comes to equity must come with clean hands
Not only must the plaintiff seeking equitable relief discharge outstanding legal or equitable obligations, he is
required to come with clean hands1. In the presentation of his case, he must be frank and fair and make full
disclosure2. He must not on his part have been guilty of unconscionable conduct or fraud or impropriety in
relation to the subject matter of the dispute3 and it is irrelevant whether or not the conduct or fraud is ante or
post the transaction in question4. If he is himself a party to a related fraud, and is seeking relief in respect of a
tainted transaction, he does not come with clean hands and relief will be declined 5. The reason is that equity
will only balance the equities of equally blameless persons but not when both are in the wrong 6. But if he is
guilty of an unrelated misconduct7 or if although the fraud is a related fraud, he withdrew from it before the
consummation of the transaction8, or if the fraud is purely accidental and will not recur 9, or if the wrong he did
was not done to the defendant, he may be afforded equitable relief.

The maxim has been relaxed over time and is no longer strictly enforced. The question is whether in all the
circumstances it would be a travesty of justice to assist the plaintiff given his blameworthy participation or
role in the transaction10. The whole circumstances must be taken into account having regard to the relief
sought11, for the relative blameworthiness only emerges after a complete and exhaustive scrutiny and relief
which is less drastic need not be defeated by conduct which is less opprobrious. It has been said that 'the
conduct complained of must have an immediate and necessary relation to the equity sued for' 12 and 'it must
be a depravity in the legal as well as moral sense'13. If that be the case, every act which is improper and
directly negatives the equity of the plaintiff's claim will accrue to the benefit of the defendant. The defendant's
conscience is not thereby made clear and he is not absolved, but the plaintiff is unfit to prosecute. This will
not affect the fitness of another to prosecute such rights as he may have obtained against the defendant.
When the relief is granted in respect of disability, the same maxim applies. Thus a minor's right of relief from
a minor's contract is unenforceable if he is guilty of deceiving the defendant as to his true age 14.
There are four exceptions to the maxim. If a plaintiff seeks delivery up and cancellation of a document, it is
irrelevant that the plaintiff is guilty of misconduct because the delivery up and cancellation serves to remove
the document from public circulation and is allowed for the protection of the public 15. If the relief sought is a
declaratory relief, the plaintiff's conduct is inconsequential as no action is required on the part of the court 16.
This is also true of any suit for purely statutory relief 17. Finally, misconduct on the part of the plaintiff is
inconsequential if he is seeking an injunction to prevent multiplicity of actions 18.
It should be noted that the rule that the courts will not lend their assistance in enforcing an illegal contract 19 or
trust20 or in decreeing restitution21 or restoration of property under an illegal contract bears a superficial
resemblance to the maxim22. The reason for it is that denial of judicial assistance derives from public policy
considerations rather than the misbehaviour of the plaintiff' 23. Thus, the fact that a claim, the proof of which
requires revelation of some illegality in design or commission, cannot be maintained is better seen as a
manifestation of the policy against aiding in or supporting an illegality and not a result of the maxim 24.
1 This maxim may be part of the larger maxim that he who seeks equity must do equity; see [290.015]. See Fitzroy v Gwillim
(1786) 1 TR 153, where it was said that he who comes to equity 'must come with clean hands according to the principle that
those who seek equity must do equity'. But the better view is that the clean hands maxim operates as a defence whereas the
other constitutes an essential step in an action for equitable relief. See Sydney Consumers&' Milk and Ice Co Ltd v
Hawkesbury Dairy Ice Society Ltd (1931) 31 SR (NSW) 458. In cases of illegality, it is not merely a question, as is involved with
the operation of the maxim that he who comes to equity must come with clean hands, of denying the plaintiff equitable
remedies, for example, specific performance of a contract, whilst leaving the plaintiff to the remedy at law, for example,
damages for breach of contract. The distinction between the operation of the equity maxim, as a discretionary defence to a
claim to equitable relief, and the notion of illegality has been drawn by Professor Pettit stating as follows: 'Where the transaction
is itself unlawful it is not necessary to have recourse to this principle. In equity, just as at law, no suit lies in general in respect of
an illegal transaction, but this is on the ground of its illegality, not by reason of the plaintiff's demerits.' (Halsbury's Laws of
England, 4th Edn, (Reissue) vol 16, para 751). Professor Pettit also makes the point in his article, 'He who comes into Equity
must come with Clean Hands' (1990) 54 The Conveyancer and Property Lawyer 416 at 422); Nelson v Nelson (1995) 184 CLR
538; Gleeson CJ in Official Trustee v Tooheys (1993) 29 NSWLR 641 discussed two grounds upon which a court might decline
to enforce an estoppel. The grounds were, first, where the party relying on the assumption procured that assumption by fraud,
and secondly, on the basis that he who comes to equity must come with clean hands.
See also Timbermaster Timber Complex (Sabah) Sdn Bhd v Top Origin Sdn Bhd [2002] 1 MLJ 33, CA; Malaysia Building
Society Bhd v Ghazi bin Hasbollah [1994] 2 MLJ 1; Lai Yoke Ngan v Chin Teck Kwee [1997] 2 MLJ 565, FC; Cheng Chuan
Development Sdn Bhd v Ng Ah Hock [1982] 2 MLJ 222, FC; Phileoallied Bank (M) Bhd v Sakuntalathevy d/o
Manickavasagam [2007] 1 MLJ 581; Hasmah bte Abdul Rahman v Kenny Chua Kien Lam [2006] 5 MLJ 236, CA; Keppel
Tatlee Bank Ltd v Teck Koon Investment Pte Ltd [2000] 2 SLR 366. See also Nomura Regionalisation Venture Fund Ltd v
Ethical Investments Ltd [2000] 4 SLR 46, where both maxims were relied on without differentiation to hold the plaintiffs to their
election to pursue their remedy of specific performance instead of forfeiture. This part of the judgment seems doubtful since
there can be no election unless the remedies are mutually exclusive. On the facts of the case, they were not; Al Rajhi Banking
& Investment Corp (M) Bhd v Hapsah Food Industries Sdn Bhd [2012] 1 MLJ 115 (plaintiff did not come with clean hands due
to untruthful misrepresentations).
See further Wong Chun Wah v Kok Kam Chee (P) [2008] 3 MLJ 176, CA, where the court ruled that as the plaintiff's conduct
obviously ran counter to 'equity' in its popular sense of being right and fair, and had not come into equity with clean hands, he
was not entitled to seek equitable remedy for the purpose of enforcing the trust. In a case where principles of illegality operate,
the result is to impugn the plaintiff's rights, legal and equitable (Nelson v Nelson (1995) 184 CLR 538); the concept of
readiness and willingness is an exemplification of the maxim 'he who comes to equity must come with clean hands': Green v
Sommerville (1979) 141 CLR 594.
2 Especially in ex parte applications. The duty to make full and frank disclosure of all material matters within his knowledge and
which should have been discovered by proper inquiries is one owed to the court: Digital Equipment Corp v Darkcrest Ltd [1984]
Ch 512 at 524, [1984] 3 All ER 381 at 391. See also Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER

10

198, PC. The statutory right of the registered proprietor of a trade mark is not lost either simply by wrongful conduct, or by a
combination of wrongful conduct and a likelihood of deception or confusion arising out of the use of the mark at some time after
registration. Blameworthy conduct is only of significance for a case where the use of the mark has become likely to deceive or
confuse and that likelihood is a result of relevant blameworthy conduct: Campomar Sociedad, Limitada v Nike International Ltd
(2000) 169 ALR 677, Aust HC.
3 Overton v Banister (1884) 3 Hare 503. See Law Ding Hock v Ng Yoon Lin [2008] 2 MLJ 539 (resulting trust refused when it
was for illegal purpose).
4 See Williams v Staite [1979] Ch 291, [1978] 2 All ER 928, CA (Eng); although it was held that the plaintiff's bad conduct could
not justify revocation of the equitable licence to occupy an adjoining cottage for life.
5 In BP (Sabah) Sdn Bhd v Syarikat Jubrin Enterprise (a partnership firm) (unreported, 11 January 1996; Suit No K22-40/1996),
[1996] MLJU 449, a bank was not allowed to assert its right of set-off and lien against the beneficiary of a trust of which the
bank was trustee. In Cadman v Horner (1810) 18 Ves 10, a plaintiff seeking specific performance of a contract he had induced
by his fraud was denied the relief sought.
6 This includes all persons claiming under his title who cannot point to an independent equitable right arising in their favour.
7 Meyers v Casey (1913) 17 CLR 90. The misconduct must not be too remote.
8 Ie as part of the doctrine of locus poenitentiae. See Tribe v Tribe [1996] Ch 107, [1995] 4 All ER 236, CA (Eng). Cf Taylor v
Bowers (1876) 1 QBD 291, CA (Eng); Kearley v Thompson (1890) 24 QBD 742, CA (Eng).
9 Kettles and Gas Appliances Ltd v Anthony Hordern & Sons Ltd (1934) 35 SR (NSW) 108 at 130.
10 The test of whether it would be an affront to the public conscience is formulated to respond to illegality in the transaction. In
any case, it was overruled in Tinsley v Milligan [1994] 1 AC 340, [1993] 3 All ER 65, HL.
11 Marshall Futures Ltd v Marshall [1992] 1 NZLR 316 at 331.
12 Dewhirst v Edwards [1983] 1 NSWLR 34 at 51.
13 See Dering v Earl of Winchelsea (1787) 1 Cox Eq Cas 318 at 320; because 'equity does not demand that its suitors shall
lead blameless lives': Loughran v Loughran 292 US (1934) 216 at 229.
14 Overton v Bannister (1844) 3 Hare 503, where it was held that payment by a trustee to a beneficiary who made a false
representation as to his age was a good discharge.
15 St John v St John (1805) 11 Ves 526.
16 Chapman v Michaelson [1909] 1 Ch 238, CA (Eng). Cf Kasumu v Baba-Egbe [1956] AC 539, [1956] 3 All ER 266, PC.
17 Chapman v Michaelson [1909] 1 Ch 238, CA (Eng).
18 See Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43.
As to injunctions see [290.312] and following.
19 As to illegal contracts see generally CONTRACT (2013 Reissue) [120.324] and following. See in St John Shipping Corp v
Joseph Rank Ltd [1957] l QB 267 at 283, [1956] 3 All ER 683 at 687, Devlin J stated the law in relation to illegal contracts as
follows: 'There are two general principles. The first is that a contract which is entered into with the object of committing an illegal
act is unenforceable. The application of this principle depends on proof of the intent, at the time the contract was made, to break
the law; if the intent is mutual the contract is not enforceable at all, and, if unilateral, it is unenforceable at the suit of the party
who is proved to have it.' In Archbolds (Freightage) Ltd v S Spanglett Ltd (Randall, third party) [1961] 1 All ER 417 at 424,
[1961] 1 QB 374 at 388, CA (Eng), Devlin LJ said: 'The effect of illegality on a contract may be threefold. If at the time of making
the contract there is an intent to perform it in an unlawful way, the contract, although it remains alive, is enforceable at the suit of
the party having that intent; if the intent is held in common, it is not enforceable at all. Another effect of illegality is to prevent a
plaintiff from recovering under a contract if in order to prove his rights under it he has to rely on his own illegal act; he may not
do that even though he can show that at the time of making the contract he had no intent to break the law and that at the time of
performance he did not know that what he was doing was illegal. The third effect of illegality is to avoid the contract ab initio,
and that arises if the making of the contract is expressly or impliedly prohibited by statute or is otherwise contrary to public
policy', cited in Soleimany v Soleimany [1999] QB 785, [1999] 3 All ER 847, [1998] 3 WLR 811, CA (Eng).
20 As to trusts generally see [310] TRUSTS (2015 Reissue).
21 See [290.289].
22 See Curtis v Perry (1802) 6 Ves 739 at 746. The rule is best regarded as the result of equity following the law. The view of
Lord Browne-Wilkinson in Tinsley v Milligan [1994] 1 AC 340 at 375, [1993] 3 All ER 65 at 90, HL, is that the rule is the

11

equitable counterpart of common law doctrines of illegality. The equitable rule was absolute but 'fusion of law and equity has led
the courts to adopt a single rule' known as the reliance rule.
23 Nelson v Nelson (1995) 184 CLR 538 at 550-551, 608-609, 132 ALR 133.
24 The maxim was relied on alternatively in Suntoso Jacob v Kong Miao Ming [1986] 2 MLJ 170, CA, and was wholly relied on
in Tan Soi v Pow Kwee Lan [1998] 3 SLR 191.

[290.017]
Equity looks to substance rather than form
In many cases in which equity will intervene, the transaction is given a form which does not adequately
reflect the true intent of the parties1. On the one hand, parties must expect to be bound by what is plainly
expressed to be the nature of the transaction they have concluded or effected. Security of commerce or title
could not otherwise be achieved. On the other hand, when the form is clearly the result of a mistake, it would
be wrong to permit a party to exploit it to his advantage. The courts will order rectification 2 in order that the
document creating the rights and obligations may express truly the parties' intent; but it would be too much if
the courts should countenance re-writing the parties' contract 3 so as to reflect a construction of it. The maxim
then has a fairly circumscribed role and cannot be used to defeat what is merely a plausible construction of
the extent of, and not a mistake as to the nature of the obligations.
The clear situations in which the maxim can be relied on are those where the proper form of documentation
has been followed or adopted but some technical or inadvertent omission then occurs, such as a missing
signature or a failure to adopt a particular order of things 4. It would be hard to extend the application of the
maxim to situations where the prescribed documentation is a deed but the parties have merely made a
contract in writing, for then the maxim would obliterate the distinction between contract and transfer 5.
The maxim has a more extensive application in cases where unfair advantage has been taken of another so
that he agrees to a form of transaction which is otherwise than what he believes it to be. Therefore where a
person is induced or deceived into thinking that he has signed a purchase agreement when it is in truth a
loan agreement or that he has conveyed property as security for a debt when it is in truth an absolute
conveyance, equity will look into the real facts and give him relief 6.
The maxim is not confined to the validation of mistaken transactions. It also explains why effect is given to
precatory trusts, why the equity of redemption was invented, why in proper circumstances the English Statute
of Frauds (1677) is put aside7, why a receipt in the body of a deed is not conclusive that payment has been
made except in favour of third parties8, why a recital in a deed will not operate as an estoppel as between the
parties to the deed if the recital is mistaken9, and possibly why an execution of a deed on the faith of others
also executing it will not be enforced against the person executing the deed if the others repudiate it or are
incapable of being bound by it10. The equitable doctrines of relief against forfeitures and penalties 11 are also
said to rest on this maxim. On this basis rests also the rule that when title is taken in the name of another for
a reason other than a gift, equity will presume a resulting trust 12 and assist the plaintiff to execute the
resulting trust by conveying the legal title13.
1 In Keng Soon Finance Bhd v MK Retnam Holdings Sdn Bhd (Bhagat Singh s/o Surian Singh, Interveners) [1996] 2 MLJ 431
at 457, the court explained this maxim in relation to land law that 'ordinarily, actual notice of a prior interest is sufficient to impute
fraud in equity... .The substance of the agreement between the parties is crucial since equity looks to substance and not to
form. The approach should be to engage in a subjective inquiry as to the intention of the registered proprietor as manifested by
his conduct, and then to ask objectively if the conclusion to be reached would be fair in the circumstances. This two-tiered test
would serve to preserve the policy of the Torrens legislation or at least part of it. At the same time, this approach would maintain
a level of public confidence in the judiciary and the administration of justice'.
2 As to rectification see [290.293], [290.294].
3 See generally [120] CONTRACT (2013 Reissue).
4 In this respect, the maxim overlaps with another, namely that equity looks upon that as done which ought to be done; see
[290.019]. See also Re Danish Bacon Co Ltd Staff Pension Fund, Christensen v Arnett [1971] 1 All ER 486, [1971] 1 WLR 248;
Yong Nyee Fan & Sons Sdn Bhd v Kim Guan & Co Sdn Bhd [1979] 1 MLJ 182, FC; Keng Soon Finance Bhd v MK Retnam

12

Holdings Sdn Bhd (Bhagat Singh s/o Surian Singh, Interveners) [1996] 2 MLJ 431.
5 Except that where there is consideration, another maxim, the one that follows, may be invoked.
6 Even if there is no such fault, there is authority that a man who has signed apparently as principal debtor may show that he is
truly only a guarantor: see AGC (Advances) Ltd v West (1986) 5 NSWLR 590 at 602; affd 5 NSWLR 610. But the Malaysian
Evidence Act 1950 (Act 56) may stand in the way of the applicability of this rule.
7 Ie where there is part performance or land is acquired for the purposes of a partnership (see Dale v Hamilton (1846) 5 Hare
369) or if there is a representation that the testator's intention will be given effect to and the defendant is let into possession
apparently in execution of the testator's intention (see Harris v Horwell (1708) Gilb Rep 11).
8 See Wilson v Keating (1859) 27 Beav 121.
9 See Greer v Kettle, Re Parent Trust and Finance Co Ltd [1938] AC 156 at 171, [1937] 4 All ER 396 at 404, HL, per Lord
Maugham: 'It is at least equally clear that in equity a party to a deed could not set up an estoppel in reliance on a deed in
relation to which there is an equitable right to rescission or in reliance on an untrue statement or an untrue recital induced by his
own representation, whether innocent or otherwise, to the other party'.
10 Luke v South Kensington Hotel Co (1879) 11 ChD 121 at 125, CA (Eng). A non executing party who adopts the benefit of
the deed will be bound: Lady Naas v Westminster Bank Ltd [1940] AC 366 at 373, [1940] 1 All ER 485 at 487-488, HL.
11 As to the equitable relief against penalties and forfeitures see [290.281]-[290.288].
12 As to resulting trusts see generally TRUSTS (2015 Reissue) [310.094] and following. According to Megarry J (see Re
Vandervell's Trusts (No 2), White v Vandervell Trustees Ltd [1974] Ch 269 at 287, [1974] 1 All ER 47) there are two categories
of resulting trusts, namely, the purchase of property in the name of another and the voluntary transfer of property into the name
of another, which have been classified as 'presumed resulting trusts'. This is because these two types of resulting trusts depend
on the presumed intention of the grantor that the property is to be held by the grantee on trust for the grantor, so that the
beneficial interest returns (results) to the grantor. The other class of resulting trust is classified as an 'automatic resulting trust'
because it does not depend on any presumed intention of the settlor. An automatic resulting trust exists where property has
been conveyed to another on express trust, but the beneficial interest returns (results) to the transferor because the beneficial
destination of the property is undermined. This may happen when there is an entire or partial failure of the objects of the trusts.
The part of the trust undisposed of will then result (return) automatically to the settlor: Liew Choy Hung v Fork Kian Seng [2000]
1 MLJ 635 at 640.
13 So also when a debtor makes a voluntary conveyance to a trustee for the benefit of his creditors, without communicating to
any of them, he may as principal revoke at any time before the trustee as his agent has bound himself to the creditor. Equity
looking at the intent and not the form upholds the object that the trustee will distribute as agent. See Siggers v Evans (1855) 5
E & B 367, where the case was altered in that the trustee took as one of the beneficiaries.

[290.018]
Equity regards time for fulfilment of obligation as not essential
As a corollary of the above maxim, equity follows a simple rule that unless time is of the essence it will
decree specific performance notwithstanding failure to observe the time fixed by the contract for completion 1.
Equity, it has been said, 'looks not at the letter but at the substance of the agreement in order to ascertain
whether the parties, notwithstanding that they named a specific time within which completion was to take
place, really and in substance intended no more than that it should take place within a reasonable time.
Prima facie, equity treats the importance of such time limits as being subordinate to the main purpose of the
parties'2. However, even in cases where time is not originally of the essence, a party can unilaterally make
time of the essence by a clear communication of his intention to the other 3. Time will be treated as essential if
the parties have agreed that it be so4, where the result would otherwise be unjust5, or if from the nature of the
property or circumstances of the contract, it is so6. It has been held that where a conditional contract of sale
fixes a date for the completion of the sale, then the condition must be fulfilled by that date; where a
conditional contract of sale fixes no date for completion of the sale, then the condition must be fulfilled within
a reasonable time; but where a conditional contract of sale fixes (whether specifically or by reference to the
date fixed for completion) the date by which the condition is to be fulfilled, then the date so fixed must be
strictly adhered to, and the time allowed is not to be extended by reference to equitable principles 7. Where a
mere power must be exercised, if at all, within a given period of time, the time allowed is not to be extended
by reference to equitable principles. The approach that equity takes to time clauses in a contract must not be

13

confused with the construction of a contract8. When the maxim is applicable, the result is that a party seeking
equitable relief cannot merely point to the defendant's default in not complying strictly with a time clause 9.
1 See Stickney v Keeble [1915] AC 386 at 415, HL: 'In such cases, however, equity having a concurrent jurisdiction did not look
upon the stipulation as to time in precisely the same light. Where it could do so without injustice to the contracting parties it
decreed specific performance notwithstanding failure to observe the time fixed by the contract for completion and as an incident
of specific performance relieved the party in default by restraining proceedings at law based on such failure. This is really all
that is meant by and involved in the maxim that in equity the time fixed for completion is not of the essence of the contract'. The
common law in contrast treated time stipulations in a contract of sale of land as essential. See further Phang Cheshire, Fifoot
and Furmston's Law of Contract (2nd Singapore and Malaysian Edition, 1998) p 917.
2 S Ayadurai v Lim Hye [1959] MLJ 143 at 145. See also H G Warren v Tay Say Geok [1965] 1 MLJ 44, PC. In England the
rule is now contained in the Law of Property Act 1925 (UK) s 41, which provides that stipulations in a contract, as to time or
otherwise, which according to rules of equity are not deemed to be or to have become of the essence of the contract, are also
construed and have effect at law in accordance with the same rules. The Law of Property Act 1925 (UK) s 41 is problematic,
because it goes on to provide that the construction should have effect at law in accordance with the rules of equity. Therefore
suppose that equity would not have decreed specific performance of the stipulation that has been breached, does it mean that
the equitable rules of construction will apply? The view expressed in United Scientific Holdings Ltd v Burnley Borough Council,
Cheapside Land Development Co Ltd v Messels Service Co [1978] AC 904, [1977] 2 All ER 62, HL, that the applicability of the
equitable rules does not depend on the availability of specific performance is controversial. See Baker 'The Future of Equity'
(1977) 93 LQR 529.
3 Ie by giving a notice to the defaulting party that he requires the performance of the latter's obligations by a named time which
is not before some reasonable time from the date of giving of notice: see Webb v Hughes (1870) LR 10 Eq 281 at 286;
Charles Rickards v Oppenheim [1950] 1 KB 616, [1950] 1 All ER 420, CA (Eng).
4 See Steedman v Drinkle [1916] 1 AC 275 at 279, PC. The time for doing an act, where time is already of the essence of the
contract, may be extended under such circumstances that such extension of time does not waive the new time as being of the
essence: Siah Kwee Mow v Kulim Rubber Plantations Ltd [1979] 2 MLJ 190. See also Lock v Bell [1931] Ch 35; White v Ross
[1960] NZLR 247 at 248-249. See also Barclay v Messenger (1874) 30 LT 351 at 354; Wong Kup Sing v Jeram Rubber
Estates Ltd [1969] 1 MLJ 245; time limits must be adhered to and that equity cannot be called in aid when it is clear that the
intention of the parties is that time is of the essence of the contract: Peter Ng Teck Joo v Vincent Ponniah [1985] 2 MLJ 146 at
148.
5 See Radcliffe v Warrington (1806) 12 Ves 326.
6 Stickney v Keeble [1915] AC 386 at 401, HL.
7 Aberfoyle Plantations Ltd v Khaw Bian Cheng [1960] MLJ 47, PC.
8 See United Scientific Holdings Ltd v Burnley Borough Council, Cheapside Land Development Co Ltd v Messels Service Co
[1978] AC 904, [1977] 2 All ER 62, HL; Stickney v Keeble [1915] AC 386, HL; Tilley v Thomas (1867) LR 3 Ch App 61 at 67.
See generally [120] CONTRACT (2013 Reissue).
9 The equitable rule of construction of time stipulations serves the purpose of assisting the plaintiff in obtaining specific
performance of the contract of sale by defeating the defendant's reliance on a material breach of contract or ignoring a
purported rescission of the contract by the defendant. But breach of a time clause is nevertheless a breach sounding in
damages: Raineri v Miles [1981] AC 1050, [1980] 2 All ER 145, HL.

[290.019]
Equity looks on that as done which ought to be done
The maxim, 'equity regards as done that which ought to be done' 1, complements another maxim, namely that
equity will not permit a statute to be used as an engine of fraud 2. The reason for it is that if the underlying
obligation is enforceable in equity upon taking the necessary step, then there is a duty to take that step and
equity will not delay the result but treating the step as having been taken exactly as it ought to have been,
proceeds to enforce all obligations arising from the step having been taken. The doctrine of conversion is
also founded upon this maxim3. If the testator by his will has directed his executors to sell his land and
distribute the sale proceeds to his named beneficiaries, or conversely to sell his personalty and buy land with
the sale proceeds, the maxim directs an immediate notional conversion and the land is immediately treated
as personalty and the personalty as land4. The conversion is regarded as notionally occurring the moment it
arises5. Again, if the testator directs assets which are wasting and not of a permanent character to be

14

enjoyed in succession, it is implicit that these assets must be converted into a more permanent form and
equity applies a notional conversion in determining the duty of those responsible 6. A defective exercise of a
power of appointment has also been benefited by the maxim and equity will give effect to the appointment in
favour of an appointee who is a creditor, wife, child, purchaser or charity 7.
In the case of contracts, equity respects the common law distinction between contract and transfer of title but
in effect assimilates the contract to the transfer where the contract is specifically enforceable 8. The result is to
attract all the consequences and incidents of the notional transfer at the time when, according to the tenor
thereof, those acts ought to have been performed 9. The maxim is a common application in contract cases10. A
contract of tenancy is therefore regarded as the tenancy itself, even though no deed of tenancy is executed
by the parties, and the terms therein will be regarded as the terms of the tenancy in preference to any other
terms of a tenancy at will or sufferance11.
Similarly, a contract for value to assign future property or to establish a trust when the designated property
comes into being will be treated as an assignment12 or a trust13 when the property materialises. It is
predicated that the maxim only comprehends a person to whom the duty to take the necessary step is owed.
In the case of an executory contract, this means the person entitled to enforce it 14 and the maxim cannot be
invoked by a stranger to the contract15. This implies that the maxim may be applied twice or as many times as
the duty chain is unbroken16. It may be noted that the maxim applies not only to crystallise substantive rights
but also to avoid the strictures of the Limitation Act 195317.
1 Equity recognises and gives effect to any assignment, for value, of a thing in action depending on a future contingency (an
'expectancy'). The principle that equity regards as done that which ought to be done is applied, so that, once the assignor has
received the valuable consideration and became possessed of the property, the beneficial interest in the property passes to the
assignee immediately. An assignor and assignee are thus bound from the moment of their agreement, while the debtor is
(subject to notice) bound as soon as the expectancy develops into an actuality: Raiffeisen Zentralbank Osterreich Ag v Five
Star General Trading LLC [2001] EWCA Civ 68, [2001] QB 825, [2001] 3 All ER 257at [80]-[81], CA (Eng). If valuable
consideration is given in exchange for the creation of the trust, it does not matter whether the trust is completely constituted or
not, for equity regards as done that which ought to be done and will perfect an imperfect conveyance for value by treating it as a
contract to convey. But there is no equity to perfect an imperfect voluntary trust: Lee Eng Teh v Teh Thiang Seong [1967] 1 MLJ
42 at 44.
2 Described as of great importance in Meagher, Gummow and Lehane Equity: Doctrines and Remedies (3rd Edn, 1992) para
339. See [290.014]. Equity will not permit a statute to be used as an engine of fraud to defeat the plaintiff's claim: Weng Lee
Granite Quarry Sdn Bhd lwn Pentadbir Tanah Pejabat Daerah Dan Tanah Seberang Perai Tengah Bukit Mertajam [2014] 9
MLJ 85. The doctrine, when invoked, has the effect of precluding a litigant who is guilty of unconscionable or unmeritorious
conduct from relying upon a statutory provision that would defeat his opponent's case. An application of the doctrine requires a
meticulous examination of the facts and circumstances of the particular case to determine whether there has been any
inequitable conduct. The doctrine has been applied to several statutes, including those governing contracts, wills, trusts and
assignments. The categories of statutes to which the doctrine may be applied are not closed: Seema Development Sdn Bhd v
Mah Kim Chye [2014] 2 MLJ 425.
3 As to conversion see [290.103]-[290.114]. The doctrine of conversion was of importance in England, before the Administration
of Estates Act 1925 (UK) because property might descend either to the heir-at-law or to the next-of-kin according as to whether
there had been a conversion or not. In this colony, no question between the heir and the next-of-kin could ever arise, and the
doctrine is only material in the matter of the construction of wills, where a testator has bequeathed his movable and immovable
property to different persons: Re Kavena Hadjee Mohamed Yoosuf, Decd Estate & Trust Agencies (1927) Ltd v Fatimah Sham
Binte Hadji Sahib [1936] 1 MLJ 78 , CA (Sing).
4 See Fletcher v Ashburner (1779) 1 Bro CC 497 at 499 ('and this in whatever manner, the direction is given: whether by will,
by way of contract, marriage articles, or otherwise, and whether the money is actually deposited or covenanted to be paid,
whether the land is actually conveyed or only agreed to be conveyed'). See generally [330] WILLS, PROBATE, ADMINISTRATION AND
SUCCESSION (2011 Reissue).
5 Hence from the time the deed becomes effective or the will operative, provided that the instrument in question does not
contain anything to the contrary. See Griffith v Ricketts, Griffith v Lunell (1849) 7 Hare 299.
6 Ie the rule in Howe v Lord Dartmouth (1802) 7 Ves 137.
7 See Re Anstis, Chetwynd v Morgan, Morgan v Chetwynd (1886) 31 ChD 596, CA (Eng). See also Affleck v Affleck (1857) 3
Sm & G 394, where a covenant to exercise a power was treated as a being defective exercise of it.
8 See Re Anstis, Chetwynd v Morgan, Morgan v Chetwynd (1886) 31 ChD 596 at 605-606, CA (Eng), per Lindley LJ ('that
which ought to be done is only treated as done in favour of some person entitled to enforce the contract as against the person
liable to perform it'). That is why the doctrine of Walsh v Lonsdale (1882) 21 ChD 9, CA (Eng), does not apply in the

15

subordinate court if it does not have jurisdiction to grant specific performance. Thus also, a contract to purchase land gives the
purchaser an equitable interest in the land: see Lysaght v Edwards (1876) 2 ChD 506; Walsh v Lonsdale (above); Yeong Ah
Chee v Lee Chong Hai [1994] 2 MLJ 614, SC; Borneo Housing Mortgage Finance Bhd v Bank Bumiputra Malaysia Bhd [1991]
2 MLJ 261; Dr Michael Atun Wee v Malaysia Credit Finance Bhd [1994] 3 MLJ 594, SC (where the contract was one to develop
the land and not a sale of the land); Mohamed Noor bin Awang v Mek Tok binti Mat Min [1977] 2 MLJ 248, FC.
9 Thus, where the property which is the subject matter of the contract between vendor and purchaser is destroyed before
completion of the sale, equity looks upon that as done which ought to be done and the purchaser has to bear the loss. See
Robertson v Skelton (1849) 12 Beav 260. See also Crown 'Insurance in the Conveyancing Process' (1993) 5 SAcLJ 69.
10 See generally [120] CONTRACT (2013 Reissue). See also Ibrahim s/o Idrus v Lee Yu Mei [1983] 1 MLJ 392; Luggage
Distributors (M) Sdn Bhd v Tan Hor Teng [1995] 1 MLJ 719, CA; HoLee Holdings (M) Sdn Bhd v Chai Him [1997] 4 MLJ 601.
See also HL Bannerji v Chiu Cheng Realty (Pte) Ltd [1983] 2 MLJ 18, CA (Sing). The maxim is inapplicable to a stranger to a
contract: see Tee Say Poh v Jais bin Haji Salleh [1939] MLJ 330.
11 Walsh v Lonsdale (1882) 21 ChD 9, CA (Eng). See also Woo Yok Wan v Loo Pek Chee [1975] 1 MLJ 156; Golden Village
Multiplex Pte Ltd v Marina Centre Holdings Pte Ltd [2001] 3 SLR 452; affd [2002] 1 SLR 333, CA (Sing). In Inter-Continental
Mining Co Sdn Bhd v Société Des Etains De Bayas Tudjuh [1974] 1 MLJ 145, FC, the appellants had a permit to
mine land granted by the respondents who were the lessees of the land and it was held by the Federal Court that the permit
was in substance a sublease which equity would treat as an agreement for a sublease and specifically enforce. See also
Tottenham Hotspur Football and Athletic Co Ltd v Princegrove Publishers Ltd [1974] 1 All ER 17, [1974] 1 WLR 113, where
possession was obtained under a an agreement embodied in a consent order.
12 See Re Lind, Industrials Finance Syndicate Ltd v Lind [1915] 2 Ch 345, CA (Eng); Re Gilliott&'s Settlement [1934] Ch 97.
13 See Davis v Richards and Wallington Industries Ltd [1991] 2 All ER 563, [1990] 1 WLR 1511; Holroyd v Marshall (1862) 10
HL Cas 191 at 211; Tailby v Official Receiver (1888) 13 App Cas 523, HL.
14 Re Anstis, Chetwynd v Morgan, Morgan v Chetwynd (1886) 31 ChD 596 at 605, CA (Eng). See also Hobbs v Marlowe
[1978] AC 16 at 42, [1977] 2 All ER 241 at 257, HL.
15 Tee Say Poh v Jais bin Haji Salleh [1939] MLJ 330. See Re Anstis, Chetwynd v Morgan, Morgan v Chetwynd (1886) 31
ChD 596 at 605, CA (Eng); Re Plumptre&'s Marriage Settlement, Underhill v Plumptre [1910] 1 Ch 609 at 619. Save those who
are within the marriage consideration.
16 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] QB 580, [1977] 2 All ER 293, CA (Eng).
17 Ie the Limitation Act 1953 (Act 254). See H L Bannerji v Chin Cheng Realty (Pte) Ltd [1983] 2 MLJ 18, CA.

[290.020]
Equity follows the law
One of the oldest of the maxims of equity, the maxim that equity follows the law explains the origin and
foundation of its concurrent jurisdiction1. It signifies respect for the certainty that the common law rule is
designed to achieve2. It is secondly a reminder that such relief as equity will give must not jeopardise and
must be compatible with essential concerns of the pertinent common law rule 3.
Where security of title is a concern, equitable intervention should respect that concern and not undermine it 4.
This is the reason that equity will not raise an estoppel, absent any hardship or injustice but will simply follow
the law since to do otherwise would be to risk jeopardising security of title at law 5. As a corollary, many of the
rules of equity mirror legal rules. The rules of alienability and transferability of equitable interests, the rules
regarding the limitations and incidents of equitable estates, mirror legal rules which apply to legal interests 6.
Thus, there evolved equitable estates such as the life interest in equity and interest in remainder to mirror the
common law counterparts. Equity applied common law rules by analogy in fashioning the same incidents,
properties and consequences of these estates. The same rules of construction were adopted 7. The rules
governing the award of damages in equity8 and the rules applying the limitation statutes to equitable causes
of action9 also followed the common law.
Where the common law rules are based on reason and there are no special considerations warranting a
departure in equity, then equity will apply the common law by analogy. Similarly, equity will not act so as to
frustrate a policy of the law. If a transfer of an interest in land is unenforceable on account of illegality, equity
will not restore the interest if that would undermine the policy that is protected 10. Again, equity will not decree

16

performance of a covenant void at law but it has been said, equity's duty is to follow the law 11. Arguably, the
refusal to accept a voluntary release from a debt is another illustration of the maxim 12. Equity thus not only
followed the law in matters of interests and construction but also remedies 13.
There are, however, situations where equity does not follow the law14. It allows a deed to be varied in writing,
whereas the common law insists on variation by another deed 15. Its rules of construing executory trusts16 are
more relaxed than the common law rules. Where common law accepts the constraint or bar of a statute,
equity is often able to provide a more flexible solution 17. Thus, where a power is defective in execution, equity
will overlook the defect and enforce the execution18. In the case of limitation, equity follows the law in
adopting the same periods of limitation, but there are cases where it requires a suit to be brought without
laches or culpable delay19. Again, equity departs from the law if there is fraud 20.
1 See Paget v Gee (1753) Amb 807 at 810; Abdul Rahim v Drahman (1867) 1 Ky 171; Haji Taib v Ismail [1971] 2 MLJ 36 at
39.
2 See Cowper v Earl Cowper (1734) 2 P Wms 720 at 753. If an interest in land, such as a fee simple absolute, exists at law,
that is what also exists in equity. If a claimed interest in land does not satisfy the basic legal requirements for its existence, then
it will not, as a general rule, exist as an interest in land either at law or in equity. Equity's recognition of analogous legal interests
is subject to particular circumstances affecting conscience and enforceable in equity, though they do not exist at law; for
example, facts that would support the existence of a trust or an estoppel in relation to land. In the absence of those features
equity would follow the law. It would not normally intervene to contradict the law or to modify legal rights: Berrisford v Mexfield
Housing Co- Operative Ltd [2010] EWCA Civ 811, [2011] Ch 244, [2011] 2 All ER 273 at [80], CA (Eng).
3 It has been said that the maxim treats the common law as the foundation of all jurisprudence and does not depart
unnecessarily from legal principles: Sinclair v Brougham [1914] AC 398 at 414-415, HL. See Syed Ali Redha Alsagoff
(administrator of the estate of Mohamed bin Ali, (decd)) v Syed Salim Alhadad [1996] 3 SLR 410.
4 So as to avoid great uncertainty and confusion: see Cowper v Earl Cowper (1734) 2 P Wms 720 at 753. Hence, the refusal to
recognise an indefinite variety of proprietary interests in equity (see [290.027] and following). But equity did not recognise
escheat of an equitable estate or a claim for dower out of an equitable estate and refused to make an equitable contingent
remainder depend on the existence of a sufficient preceding vested interest.
5 In Punca Klasik Sdn Bhd v Abdul Azziz bin Abdul Hamid [1994] 1 MLJ 136, the court refused to estop an aggrieved party
from removing the caveats, even though it had prior knowledge of their existence, as the caveats themselves in law were
invalid. It was held that the equitable principle of estoppel could not apply in the light of the clear provisions of the law as equity
follows the law.
6 See Cowcher v Cowcher [1972] 1 All ER 943, [1972] 1 WLR 425.
7 But it is arguable that equity should not have followed the common law rules of construction of limitations of real estate. For
cases stating the rule see Re Bostock&'s Settlement, Norrish v Bostock [1921] 2 Ch 469, CA (Eng); Sexton v Horton (1926) 38
CLR 240.
8 See Target Holdings Ltd v Redferns [1996] AC 421, [1995] 3 All ER 785, HL; Nocton v Lord Ashburton [1914] AC 932, HL.
See Malhotra v Choudhury [1980] Ch 52, [1979] 1 All ER 186, CA (Eng); Johnson v Agnew [1980] AC 367, [1979] 1 All ER
883, HL.
9 The statutes of 21 Jac I c 16 (Statute of Limitations 1623) and 4 Anne c 16 (1705) were not applicable to equitable causes but
the Court of Chancery applied them by analogy (cf Knox v Gye (1871) LR 5 HL 656). See however, Gibbs v Guild (1882) 9
QBD 59 at 64-65, CA (Eng), per Lord Coleridge CJ: 'The Statute of Limitations does really in a sense bind Courts of Equity as
much as it binds the Courts of Law, for this reason, says Lord Redesdale, that equity follows the law; and that in general what
are the legal rights will be also the equitable rights of suitors, and in ordinary cases the Statute of Limitations applies, not, he is
careful to say, by analogy, but by reason of the obedience which the Courts of Equity owe to the statute; but it has always been
the principle of the Courts of Equity, while admitting the existence of legal rights, to take care that the particular suitors before
them shall not be allowed to avail themselves of those legal rights in cases where it would be unjust'. Even so, an express
trustee was not permitted to invoke them and only in certain cases of constructive trusts could a constructive trustee rely on
them. See also Motor Terms Co Pty Ltd v Liberty Insurance Ltd (in liquidation) (1967) 116 CLR 177.
10 See Tinsley v Milligan [1994] 1 AC 340, [1993] 3 All ER 65, HL.
11 Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535 at 563, HL.
12 A debt can only be released and extinguished by an agreement for valuable consideration or an instrument of release under
seal: Comr of Stamp Duties v Bone [1977] AC 511 at 519, PC; Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 at 739,
discussing Foakes v Beer (1884) 9 App Cas 605, HL. Note that there are some cases which suggest that effect may be given
to a voluntary release of a legal right by writing not under seal, or even orally. But arguably these cases are contrary to the
maxim.

17

13 Equity modelled its remedy of receivership on the law: see Holmes v Millage [1893] 1 QB 551, CA (Eng). Likewise, in
developing the writ ne exeat regno, it was said in Colverson v Bloomfield (1885) 29 ChD 341 at 341, CA (Eng): 'The Court of
Chancery, in granting this writ, merely proceeded by analogy to the process at common law'.
14 See Graf v Hope Building Corp (1920) 254 NY 1 at 9: 'Equity follows the law, but not slavishly nor always'.
15 See Berry v Berry [1929] 2 KB 316. The Evidence Act 1950 (Act 56) s 92 codifies the position in equity.
16 As to executory trusts see generally TRUSTS (2015 Reissue) [310.068]-[310.070].
17 See [290.014].
18 See Re Anstis, Chetwynd v Morgan, Morgan v Chetwynd (1886) 31 ChD 596, CA (Eng).
19 See Hovenden v Lord Annesley (1806) 2 Sch & Lef 607 at 633-634; Nelson v Rye [1996] 2 All ER 186, [1996] 1 WLR 1378;
Paragon Finance plc v D B Thakerar & Co (a firm) [1999] 1 All ER 400, CA (Eng).
20 See Gibbs v Guild (1882) 9 QBD 59, CA (Eng).

[290.021]
Equity suffers no wrong to be without a remedy
Among the oldest of the maxims, the maxim that equity will not suffer a wrong to be without a remedy in the
sense that equity will, if necessary, invent a new remedy for any perceived injustice or misfortune is probably
obsolete. It probably ceased to be true after the hardening of equity into fixed rules or to put it another way,
after the Court of Chancery adopted, little by little, the theory of binding precedent with its insistence on
development of law precedentially and interstitially1. In any case, the maxim is one that is heavily qualified. It
can mean that whenever the law provides no adequate remedy, although it recognises the right, equity will
fashion one that is suitable2. It can mean that whenever the law has a remedy but in the circumstances no
power to administer it, equity will afford an effectual remedy. Thus, if after judgment is rendered compelling a
defendant to deliver up property belonging to the plaintiff, the former disappears from the jurisdiction, equity
may intervene and appoint trustees3 to do it on behalf of the defendant. Both interpretations of the maxim are
probably correct and imply that if the remedy at law is adequate or efficacious, equity will not intervene. Thus,
if the plaintiff has a remedy at law but allows time to run against him, a court of equity will not give him more
time to pursue his remedy4. However, the maxim is not a formula for admitting a new cause of action, where
none is known at law or a new jurisdiction which hitherto is unknown 5.
1 See Re Diplock, Diplock v Wintle [1948] Ch 465 at 481-482, [1948] 2 All ER 318 at 326, CA (Eng) ('if a claim in equity exists,
it must be shown to have an ancestry founded in history and in the practice and precedents of courts administering equity
jurisdiction. It is not sufficient that because we may think that the 'justice' of the present case requires it, we should invent such
a jurisdiction for the first time'). See also Holmes v Millage [1893] 1 QB 551 at 555, CA (Eng) ('it is an old mistake to suppose
that, because there is no effectual remedy at law, there must be one in equity').
2 Ie as in Tracy v Tracy (1681) 1 Vern 23, where equity granted an injunction to restrain a life tenant from committing waste to
the damage of the remainderman because the remainderman had no remedy at law if there was an intervening life estate; and
as in Jenner v Morris (1861) 30 LJ Ch 361, where a wife borrowed money to pay debts owed to suppliers of necessaries who
could have sued her husband for payment. Common law gave no remedy to the lender even though it accepted that a wife
could pledge the credit of her husband. Equity intervened to permit the lender to stand in the place of the suppliers against the
husband.
3 As to trustees see generally TRUSTS (2015 Reissue) [310.133] and following.
4 Ie absent circumstances of acquiescence by the plaintiff or estoppel. This is also the consequence of applying the maxim that
equity follows the law; see [290.020].
5 There is some controversy as to Lord Denning's approach in Errington v Errington and Woods [1952] 1 KB 290, [1952] 1 All
ER 149, CA (Eng); Bendall v McWhirter [1952] 2 QB 466, [1952] 1 All ER 1307, CA (Eng); and Binions v Evans [1972] Ch 359,
[1972] 2 All ER 70, CA (Eng). Some say that he was inventing a new remedy and a new cause. See Buckley v Tutty (1971) 125
CLR 353; Avondale Printers and Stationers Ltd v Haggie [1979] 2 NZLR 124 at 152. But see Bristol Airport plc v Powdrill
[1990] Ch 744, [1990] 2 All ER 493, CA (Eng). In Errington v Errington and Woods [1952] 1 KB 290, [1952] 1 All ER 149, CA
(Eng), Lord Denning referred to a number of exceptional circumstances which negatived the prima facie intention to create a

18

tenancy, notwithstanding that the occupier enjoyed exclusive occupation. One of those exceptional circumstances was where
the owner had no power to grant a tenancy: Smith v Irish Rail [2002] IEHC 103 at [57].

[290.022]
When equities are equal, the first in time prevails
The maxim, 'when the equities are equal, the first in time prevails', is sufficiently focused to count as a rule of
specialised application in the determination of priorities of competing equitable interests 1. Priorities of
competing legal and equitable interests are governed by other maxims such as the maxim that equity follows
the law2. However, where the equities are equal, priorities of competing equitable interests, the legal estate
being outstanding, will depend on time of creation or recognition of the interests in competition 3. Accordingly,
if an owner of land sells twice to purchasers ignorant of each other's purchase, the first purchaser who has
an equitable interest under a constructive trust has a superior interest to the second, if the equities are
equal4. If the second purchaser had notice of the equitable interest of the first, the equities are clearly not in
his favour and he cannot expect to have a better priority than the first. However, if the prior equitable interest
holder is guilty of some act of neglect, which contributes to the omission of the second purchaser to make the
relevant inquiries, his priority will be postponed to the second purchaser 5. If there are several equitable
incumbrances on the legal estate, the first must be paid before the second and the second before the third
and so on6. The reason is that all the equities are equal and the first is pre-eminent. Where, however, the
equities are not equal, the equities rank in order of superiority and the superior equity is first.
An associated maxim is that when the equities are equal, the law must prevail. This is the reason that the title
of the bona fide purchaser of the legal interest for value without notice of an equitable interest prevails 7.
Since, there is nothing to distinguish the equity of the equitable owner and the equity of the bona fide
purchaser for value without notice, the title of the latter cannot be disturbed 8. The title of the latter must be a
legal title at the time when he purchases the interest, but in some cases he may invoke the defence of bona
fide purchaser for value without notice, although he first bought the equitable title and only afterwards obtains
the prior legal title in order to support his equitable title 9.
1 It is a conservative maxim, preferring the first to the second and was probably strongly influenced by the need to protect
equitable interests under a trust. Another rationale is that an equitable transfer can only transfer to the transferee such interest
as he justly can receive: see Cave v Cave (1880) 15 ChD 639 at 646. See also United Malayan Banking Corporation Bhd v
Goh Tuan Laye [1976] 1 MLJ 169, FC; Quah Hong Lian Neo v Seow Teong Teek [1936] MLJ 2037; Vallipuram v P C R M
Palaniappa Chetty, Official Administrator as Administrator of the estate of Gan Inn (decd) [1937] MLJ 59; Tam Kam Cheong v
Stephen Leong Kon Sang [1980] 1 MLJ 36, FC; Mercantile Bank Ltd v The Official Assignee of The Property of How Han Teh
[1969] 2 MLJ 196; Syed Ibrahim bin Syed Abdul Rahman v Liew Su Chin (F) [1984] 1 MLJ 160, FC; Yeng Hing Enterprise Sdn
Bhd v Liow Su Fah [1979] 2 MLJ 240, FC. Where there are two competing equitable interests the general rule of equity is that
the person whose equity attached to the property first will be entitled to priority over the others. Where the equities are equal
and neither claimant has the legal estate the first in time prevails: Syed Ibrahim Bin Syed Abdul Rahman v Liew Su Chin (F)
[1984] 1 MLJ 160 at 162, FC. Under the general law, competing equitable interests in property generally ranked in the order in
which they were created provided that the equities were equal. The conduct of the holder of the prior equitable interest might
disentitle him from asserting priority over the later equitable interest: Halifax Plc v Curry Popeck (A Firm) [2008] EWHC 1692
(Ch) at [25].
2 Which results in the priority of the legal interest where the holder is a purchaser for value without notice. See [290.077] and
following. However, another view is that this is the result of the maxim that when the equities are equal, the law prevails.
As to the maxim 'equity follows the law' see [290.020].
3 Ie 'qui prior est tempore, potior est jure'. See Willoughby v Willoughby (1756) 1 Term Rep 763 at 773. As to priorities between
competing interests see [290.091] and following.
4 See Potter v Sander (1846) 6 Hare 1. As to constructive trusts see TRUSTS (2015 Reissue) [310.082] and following. See
generally [250] LAND (2009 Reissue).
5 See Farrand v Yorkshire Banking Co (1888) 40 ChD 182. Cf Shropshire Union Railways and Canal Co v R (1875) LR 7 HL
496. See also Taylor v London and County Banking Co, London and County Banking Co v Nixon [1901] 2 Ch 231 at 260, CA
(Eng).
6 However, if the subject matter of incumbrance is a chose or trust fund, the rule in Dearle v Hall (1823) 3 Russ 1 (see
[290.096]) gives first priority to the first to give notice to the debtor or trustee.

19

7 The doctrine of bona fide purchaser for value without notice does not apply to a purchase of the equitable interest. See
Phillips v Phillips (1862) 4 De G F & J 208.
8 See Bailey v Barnes [1894] 1 Ch 25, CA (Eng).
9 See McCarthy and Stone Ltd v Julian S Hodge & Co Ltd [1971] 2 All ER 973, [1971] 1 WLR 1547.

[290.023]
Equity will assist the diligent but not the tardy
The Court of Chancery, when developing the rules of equity, was not prepared to take account of subsequent
circumstances associated with the transaction for which relief was sought, save for circumstances respecting
the prosecution for relief. The maxim, 'equity will assist the diligent or vigilant but not the tardy', responds to
this point. The fact that afterwards the defendant threatened the plaintiff or that the plaintiff did not seem to
be taking remedial measures is immaterial. But it will be fatal to the granting of relief that the plaintiff
deliberately and with full knowledge slept on his rights or delayed to prosecute for relief through inexcusable
inaction1. The maxim is inaccurate in so far as it suggests that only the fact of diligence or tardiness matters.
However, that is not the case since the courts regularly stress that relief being discretionary, all the
circumstances, including hardship to the defendant if relief is granted, must be looked at 2.
The maxim appears to apply naturally to the prosecution of an equitable claim where it results in a rule that
the plaintiff must prosecute his suit within a reasonable time 3. Due allowance must be made for the fact that
no one could reasonably have discovered the facts giving rise to the action at the time when they became
manifest or apparent4. However if upon discovery of the salient facts grounding the defendant's liability, the
plaintiff chooses to do nothing, he can expect little favour from a court of equity 5. Unless he can satisfy the
court that he had reasonable grounds for delaying the bringing of his suit, his delay may be held to amount to
laches6 either on account of acceptance of the defendant's conduct 7 or reasonable reliance by the defendant
on the status quo8 or injustice in allowing the suit to continue9. The maxim operates to the advantage of a
defendant, but not when the defendant is guilty of fraud10.
1 See Story's Equity Jurisprudence (10th Edn) s 529: 'When the demand is not of a legal nature but is purely equitable, or when
the bar of the Statute is inapplicable, Courts of Equity have another rule, founded sometimes on the analogies of the law where
such analogy exists, and sometimes upon its own inherent doctrine not to entertain stale or antiquated demands, and not to
encourage laches and negligence'. See also Hock Huat Iron Foundry (suing as a firm) v Naga Tembaga Sdn Bhd [1999] 1 MLJ
65, CA.
2 See Nelson v Rye [1996] 2 All ER 186, [1996] 1 WLR 1378.
3 See Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 at 1279, HL.
4 Since it would not be equitable to punish the plaintiff for what he could not help being ignorant of.
5 See Re Howlett, Howlett v Howlett [1949] Ch 767, [1949] 2 All ER 490; Allcard v Skinner (1887) 36 ChD 145. Where a
statute of limitation applies, the plaintiff is entitled to rely on the statute and mere delay in prosecuting his suit within the period
of time allowed by the statute is not laches. This, however, does not mean that he can lie by and knowingly permit the
defendant to do an onerous act or incur an expense under the belief that the defendant has a right to do so. If there are these
circumstances of acquiescence in the defendant's conduct, the plaintiff will be estopped from asserting his right, as opposed to
being prevented from bringing his suit. See Archbold v Scully (1861) 9 HL Cas 360 at 383.
6 Delay which is sufficient to prevent a party from obtaining an equitable remedy is technically called laches: (Consolidated
Credit) Co Sdn Bhd v Gladys Loh (as the executrix of the estate of Loh Hoot Yeang, decd) [2014] 10 MLJ 329 at [129].
Laches is an equitable defence implying lapse of time and delay in prosecuting a claim. A court of equity refuses its aid to a
stale demand where the plaintiff has slept upon his rights and acquiesced for a great length of time. He is then said to be barred
by laches. In determining whether there has been such delay as to amount to laches the court considers whether there has
been acquiescence on the plaintiff's part and any change of position that has occurred on the part of the defendant. Laches has
been succinctly described as 'inaction with one's eyes open': Alfred Templeton v Low Yat Holdings Sdn Bhd [1989] 2 MLJ 202
at 237.
7 See Mitchell v Homfray (1881) 8 QBD 587, CA (Eng).

20

8 So that he incurs the risk of loss in carrying on the business: see Re Jarvis, Edge v Jarvis [1958] 2 All ER 336, [1958] 1 WLR
815.
9 Ie even though the plaintiff's delay in bringing his suit may not amount to a waiver. See Lindsay Petroleum Co Ltd v Hurd
(1874) LR 5 PC 221 at 239-240. See also Nelson v Rye [1996] 2 All ER 186, [1996] 1 WLR 1378.
10 See Nelson v Rye [1996] 2 All ER 186, [1996] 1 WLR 1378.

[290.024]
Equity will not assist a volunteer
Great use is made in the rules of equity of the maxim that equity will not assist a volunteer. Equity will not
undermine the common law of gifts. Thus, where the documentation to effect a gift in writing is not perfect,
equity will not intervene to perfect the gift1. The donor, if alive, has a second chance to perfect his legal gift,
should he so wish, and there is no hardship caused by non-intervention. The maxim, however, is insistent
notwithstanding the donor is deceased and non-intervention would result in frustration of a clear intention to
give to the intended donee. The maxim that equity will not assist a volunteer is far reaching in many other
ways. Expressed positively as a maxim that equity favours a purchaser for value without notice, it is reflected
in diverse rules, namely, that equity will refuse to enforce an equitable interest or equity against a purchaser
of property for value and without notice of the interest.
1 Shatomah v Kader Meydin (1870) SLR Leic 275. The principle that equity will not assist a volunteer at first sight looks like a
hard-edged rule of law not permitting much argument or exception. Historically the emergence of the principle may have been
due to the need for equity to follow the law rather than an intuitive development of equity. The principle against imperfectly
constituted gifts led to harsh and seemingly paradoxical results: Pennington v Waine [2002] EWCA Civ 227, [2002] 4 All ER 215
at [54], CA (Eng). See Dillwyn v Llewelyn (1862) 6 LTR 878, where it was stated: 'A voluntary agreement will not be completed
or assisted by a court of equity; in cases of mere gift, if anything be wanting to complete the title of the donee, a court of equity
will not assist him in obtaining it, for a mere donee can have no right to claim more than he has received'. See also Lee Eng
Teh v Teh Thiang Seong [1967] 1 MLJ 42.

[290.025]
Equality is equity
Where liability accrues on the part of several parties of varying degrees of fault, equity begins with a
presumption that equality is equity and apportions the loss occasioned evenly among the several defendants,
without a minute examination of the precise role of each person 1. This fairly apportions losses without minute
dissections, which incur more loss and helpfully avoids extensive and expensive determinations of fault,
which may erode the funds available for distribution2. In other words, although each person should answer
only for his own default, in the absence of clear proof, equality is equity. The same maxim results in an even
distribution of funds which are insufficient to satisfy all the rights in them. It has thus been decided that where
trust funds are mixed with the funds of another, through no fault of his, and the composite or aggregate funds
used to purchase a depreciating asset, the beneficiaries of the trust and the innocent defendant share the
loss pari passu3. The apportionment of loss through abatement of legacies where there is a deficiency of
assets4, the rateable distribution of equitable assets among specialty and simple contract debts 5, therefore all
go upon the ideal of equality.
In cases where funds have to be distributed, but those charged with the duty of distribution have defaulted or
will not undertake their duty, the court as a last resort will distribute the funds among those entitled equally on
a per capita basis6.'The highest equity is to make equality among those standing in the same relation' 7. The
same result is reached when one fund is charged to pay several debts. All these debts, no matter the time
when they were incurred or their priority at law, are treated equally alike and the court gives each creditor an
equal share8. Formerly, the courts were disposed to treat the contributions of spouses towards the purchase
of matrimonial property as giving each a fifty-fifty share, regardless of exact differences in actual
contributions9. However, the courts no longer admit this presumption of equality in matrimonial disputes over
property and hold the parties to a more exact mathematical computation of their rights in the property 10. Only

21

when it is not possible to compute the exact share contributed by each spouse will the maxim be applied to
give equal shares to both spouses11. Generally, however, it can be said that the equality preferred is the
simple equality of equal division or division per capita, but there is no reason why proportionate equality or
some other formula should not be followed and applied if there is sufficient evidence that that is the correct
approach and the one that the donor would have intended 12.
1 Put picturesquely as 'equity delights in equality': see Petit v Smith (1695) 1 P Wms 7 at 8 per Lord Somers LC; Re Dickens,
Dickens v Hawksley [1935] Ch 267 at 309, CA (Eng), per Maugham LJ; Lau Choong Choo v Chou We Chuan [1980] 1 MLJ 6;
Tai Kwong Goldsmiths & Jewellers (Under Receivership) v Yap Kooi Hee [1995] 1 MLJ 1, SC. In Tai Kwong Goldsmiths &
Jewellers (Under Receivership) v Yap Kooi Hee [1995] 1 MLJ 1 at 10, where the Supreme Court explained the application of the
maxim: 'The maxim succinctly expresses the object of both law and equity, that distribution of property and losses should be
proportionate to the several claims or to the several liabilities of the person concerned'. Cf Securities Commission v Omega
Holdings Bhd [2007] 3 MLJ 284. If the evidence does not permit of a finding as to the precise size, nature and extent of the
beneficial interest the parties intended the claimant to have, one starts with the maxim that equality is equity: (Green v Green
(1989) 17 NSWLR 343 at 355). However, that standard can and should be departed from where the parties make
disproportionate contributions to the acquisition of the property. In Baumgartner v Baumgartner (1987) 164 CLR 137, Mason
CJ, Wilson and Deane JJ said (at 149-150): 'Equity favours equality and, in circumstances where the parties have lived together
for years and have pooled their resources and their efforts to create a joint home, there is much to be said for the view that they
should share the beneficial ownership equally as tenants-in-common, subject to adjustment to avoid any injustice which would
result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind.',
as cited in Shepherd v Doolan [2005] NSWSC 42 at [42].
2 The apportionment of loss through contribution as between sureties: see Dering v Earl of Winchelsea (1787) 1 Cox Eq Cas
318.
3 Sinclair v Brougham [1914] AC 398, HL.
4 Ie general and not specific legacies as well as demonstrative legacies which are treated as general legacies when the funds
out of which they are payable are destroyed. See Re Wilson [1940] Ch 966, [1940] 4 All ER 57.
5 Wolestoncraft v Long (1663) 1 Cas in Ch 32.
6 Re the Will of Cheah Seong Geok (decd) [1935] MLJ 10. See also Burrough v Philcox (1840) 5 My & Cr 72 at 92. See also
McPhail v Doulton [1971] AC 424 at 451-452, [1970] 2 All ER 228 at 241-242, HL. In the case of gifts to charities and noncharities see Hoare v Osborne (1866) LR 1 Eq 585.
7 Hulme v Chitty (1846) 9 Beav 437 at 443.
8 Similarly with a fraudulent preference of a creditor. Equity treats all creditors alike.
9 The courts were not a little influenced by the presumption of advancement. But this presumption is of considerably reduced
force owing to the changing economic condition of the female spouse in a matrimonial relationship. As to the presumption of
advancement see Low Gim Siah v Low Geok Khim [2007] 1 SLR 795, CA (Sing).
10 Unless there is evidence of a different arrangement between the spouses which in equity should be enforced.
11 Nagapushani v Nesaratnam [1970] 2 MLJ 8. See also Lau Choong Choo v Chou We Chuan [1980] 1 MLJ 6.
12 Cf Re Bower&'s Settlement Trusts, Bower v Ridley-Thompson [1942] Ch 197, [1942] 1 All ER 278; Re Steel (decd), Public
Trustee v Christian Aid Society [1979] Ch 218, [1978] 2 All ER 193.

[290.026]
Equity prefers a tenancy in common
In a specialised instance, the maxim that equality is equity finds expression in the abhorrence of a joint
tenancy or correspondingly, the preference for a tenancy in common as a form of common ownership of
property1. The right of survivorship which is an incident of a joint tenancy has the effect of divesting a
deceased joint tenant of his unsevered interest and giving the survivor the entirety of the estate, producing a
disproportionate effect. The preference for a tenancy in common means that in equity, the court construing
the intentions of the parties leans towards holding that they are tenants in common in proportion to their
contributions to the purchase price2. The parties will only be held to be joint tenants when they purchase in
equal shares and no contrary intention is shown that they were to be otherwise than joint tenants 3. A contrary

22

intention against joint tenancy is readily shown by the commercial context of a purchase in equal shares 4.
The fact that purchase is for the purposes of exercising a profession, or trade, or business deal militates
against an intention to impose and assume the right of survivorship. In some cases, however, the commercial
context is stated to be more than rebuttal of the presumption in favour of a joint tenancy arising from equal
contributions; the commercial context gives rise to a presumption the other way 5.
1 See Lake v Gibson (1729) 1 Eq Rep 294. See T Nallapiravy v Mahadevan [1978] 2 MLJ 119; Re Mehah Binti Muhamed;
Eusoff bin Salleh, Applicant [1972] 1 MLJ 212 at 213: 'There were however special cases in which notwithstanding the absence
of words of severance a court of equity would declare that there was a tenancy in common in equity'. See also Malayan Credit
Limited v Jack Chia-MPH Limited [1986] 1 MLJ 445, [1984-1985] SLR 91, PC. This is also true of mortgagees who participate in
equal shares.
2 It is trite law that equity prefers a tenancy in common in cases where two or more persons contribute money in unequal
proportions towards the purchase of property. It is in this context that the relationship between the right of survivorship in a joint
tenancy and a resulting trust was considered in Yeo Guan Chye Terence v Lau Siew Kim [2007] 2 SLR 1. Lai Siu Chiu J found
on the evidence that there was a resulting trust over the properties in question in the proportions of the financial contributions of
the defendant and the deceased: see Teo Keang Sood SAL Annual Review (2007) 8 SAL Ann Rev p 329.
3 Robinson v Preston (1858) 4 K & J 505.
4 See Neo Tai Kim v Foo Stie Wah [1982] 1 MLJ 170, CA.
5 See Malayan Credit Ltd v Jack Chia-MPH Ltd [1986] AC 549, [1986] 1 All ER 711, PC.