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desirable, at least in its most partial sense. It is important to note that these results have not generated any

negative effects within their respective jurisdictions. . (Cc.~· '?

Digital Pulse

The case of Harris v Digital Pulse43 neatly encapsulates the fusion debate, especially with respect to remedial fusion. The defendant employees had breached their fiduciary duty by diverting business away from their employer. In the Supreme Court of New South Wales, Palmer J drew an analogy with the tort of deceit, and thus evoked the most substantial fusionist argument, 'fusion by analogy'. 44 His Honour held that the employees pay exemplary damages of $10,000. This was subsequently reversed by a majority (Spigelman CJ and Heydon JA, Mason P llissenting) in the Court of Appeal. Heydon J delivered the leading judgement and argued that there was no precedent for making such a decision.Y' and that notions of

e4-vJ-

punishment do not, ana never have existe_5 within equity.l" It would be a 'radical change' for such damages

to be awarded and that only the Legislature or High COUli could do SO.47 In response to the 'analogy' argument, preferring to analogise with contract instead of tort, the majority said that if exemplary damages were awarded, it would itself create an anomaly because exemplary damages are not available for breach of contract.l" In dissent, Mason P supported the view of Palmer !"arguing that there is no precedent against the awarding of exemplary damages in equity." His honour also reasoned by analogy and argued that the facts of the case were closer to tort. 50 The effect of Digital Pulse on fusion is misinterpreted by some to ultimately reject fusion. 51 However, it is submitted that the case is only authority against an award of ~xem~lary damages, on the particular ~acts .. AS such, it is lik)l;ythat the case itself is not a serious

impediment to the development of remedial fusion. ../

The Modern Fusionist- 'Fusion by Analogy'

The often quoted obiter dicta of Lord Diplock that 'the waters of the confluent streams of law and equity have surely mingled now', 52 provides a starting point for elaborating on the fusion school of thought. Contrary to his Lordships opinio~however, it is submitted that the Judicature Acts did nothing more than fuse the Administration of the courts. Such fusion has only resulted in the possibility to commit substantive

43 (2003) 56 NSWLR 298

44 James Edelman, 'A "'Fusion Fallacy' Fallacy?'" (2003) 119 Law Quarterly Review 375,377 45 (2003) 56 NSWLR 298, 402-403

46 Ibid 412-413 /'

47 ' ~ 'f? . ~. ,;1-~ L (_

Ibid, 435 --1.lA 1\ O'VlA,I, /vv. 'V::> J .>. /./l--o:'

48 Ibid 307-10 'I 1 AYl'> V- ~ 'J "'" . I f__;..{/A "vv~:i-/-' i

49 ' V J--, '=" ~ .., vVli( 'r . ;/L-0 ; - / '

Ibid,340 J.-- vvh' .--," _VVVj.~~~"_

50 Ibid 335-6 ).IN-J r '"

51 Andrew Burrow0R~medial Coherence and Punitive Damages in Equity' in James Edelman and Simone Degeling, Equity in Commercia! Law (2005) 381, 395

52 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904

7 fusion.53 In any case, modem fusionists contend that there are many inconsistencies between common law

and equity, and fusion is required to eradicate these inconsistencies, thereby producing a coherent and harmonized law.54 This is exactly what Palmer J and Mason tin their respective judgements were aiming to do. In effect they were proposing a mingling of the two bodies or a 'fusion by analogy'. Professor Burrows55 identifies this as 'taking fusion seriously,' and indicates that it would be 'unacceptable and irrational' to automatically label investigations of these inconsistencies as fusion fallacies. 56 In Harris, although finding that exemplary damages could not be awarded in equity (on the facts), 'fusion by analogy' was not ultimately rejected. According to Burrows, the most important point to emerge from Harris was that no one in the majority adopted the dualist view that it was a 'fusion fallacy' .57 If their honours had done so, they wouldn't have applied their own analogical reasoning. Dr Edelman58 and Burrows suggest that Heydon J's willingness to argue analogically indicates that his Honour does{!) dispute that development of

equity by analogy with the common law is possible.i" 1,,1/1

A Dualists Perspective

There are generally three main arguments raised by dualists against remedial fusion. Firstly, it is argued that the court lacks the power to commit a 'fusion fallacy'. 60 It has already been mentioned that in Harris, Heydon J argued that there was no precedent for awarding exemplary damages in equity and that the COUli of Appeal had no power to do so. Even if this were true, it certainly doesn't preclude a finding in the alternative if the decision were to be put to the High COUli,61 or argue against remedial fusion per se. Perhaps a more substantial argument is drawn from the 'fusion fallacy', that it is unacceptable to modify the principles of one branch by concepts imported from the other because those concepts are 'foreign,.62 The force behind this argument is that it would result in unlike cases being treated alike.63 This is because common law and equity are inherently unique. 64 In Harris, Heydon J points to this uniqueness by identifying the greater burdens of proof and tests required to be satisfied by a claimant in tort.65 Although these are sensible considerations, it still doe?~ustifY in a purely practical sense, why punishment IS

53 Andrew Burrows, 'We Do This At Common Law But That In Equity' (2002) 22(1) Oxford Journal Of Legal Studies 1,4

54 Andrew Burrows, 'Fusing Common Law and Equity: Remedies, Restitution and Reform' (Paper presented at the Hochelaga Lectures), University of Hong Kong, (2001) 1

55 Professor Andrew Burrows QC is Norton Rose Professor of Commercial Law at the University of Oxford and Fellow of St.

Hughes College Oxford 56 Burrows, above n 46, 396

57 Burrows, above n 51,395; see also Michael Tilbury, 'Fallacy or Furphy?: Fusion in a Judicature World' (2003) 26(2) University of New South Wales Law Journal 357, 373

58 Dr James Edelman is a Fellow and Tutor in Law at Keble College, CUF Lecturer in Law at the University of Oxford and

Adjunct Professor of Law at the University of West em Australia 59 Burrows, above n 46, 377

60 Tilbury, above n 52, 368-375 61 Burrows, above n 46, 399

62 Tilbury, above n 52, 369

63 Lionel Smith, 'Fusion and Tradition' in James Edelman and Simone Degeling, Equity in Commercial Law (2005) 19,26 64 Ibid

65 Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298, 404

l' Iwf-~ ~/~ vv...d/vv

8 available for one but not the other.66 Finally, it is argued that the fusion of law and equity will generate

great confusion in the law. The law will be free to develop in whichever way the court thinks fit, without any guidance. 67 It is submitted that this would be the result if common law and equity were in fact completely fused. However, in reemphasising the theme of this essay, it is suggested that in Australia, fusion will occur carefully through the 'rationalization and cross fertilization' of the two bodies.68 It is likely that this will cause no more uncertainty than any other development of the law.69

Arguments indicate that it is unlikely that Australia will operate under a single body of law, at least for a very long time. If it were to occur at all, it is likely that by then the common law and equity would be codified into statute. After all, the great legal innovations today are statutory.i" Until such time, unification through complete fusion seems a daunting task, at least through the courts. In this respect, it is suggested that the differences in fundamental approach and the reliance on starting assumptions makes complete fusion doubtful.t' Nevertheless, we are likely to see a partial remedial fusion for the purposes of eradicating any inconsistencies between common law and equity.72 Whilst the notorious 'fusion fallacy' argument has been the main obstacle to developments in Australia, in Harris it was evident that the weight of the

/

argument, insofar as 'fusion by analogy' is concerned, is diminishiryFurthennore, despite the abundance

of commentary on the case of Harris, its misinterpreted effect of rejecting fusio is ~73 It is argued that the true effect of Harris on fusion is an acceptance of the development of equity by analogy with common law.74 The arguments against fusion are inherently historical, and lack the ability to specify how remedial fusion in this partial sense will lead to undesirable consequences. In any case, the lifeblood of judicial law-making is reasoning by analogy/5 and it is submitted that the law should continue to develop, treating like cases alike, making way for what is considered vital for the future integrity of our legal system, coherency. 76

66 Burrows, above n 46 at 398 • 67 Tilbury, above n 52,375 .,

68 Dietrich, above n 12 r MJ- 69 Tilbury, above n 52, 375 <----

70 Steve Hedley, 'Rival Taxonomies Within Obligations: Is There a Problem?' in James Edelman and Simone Degeling, Equity in

Commercial Law (2005) 77 71 Dietrich, above n 12, 84 .: 72 Tilbury, above n 52, 376

73 Burrows, above n 10; Michael Tilbury, 'Fallacy or Furphy?: Fusion in a Judicature World' (2003) 26(2) University of New South Wales Law Journal 357; James Edelman and Simone Degeling, 'Fusion: The interaction of common law and equity' (2004) 25 Australian Bar Review 195; Fiona Burns, 'The 'Fusion Fallacy' Revisited' (1993) 5 Bond Law Review 152

74 Burrows, above n 46, 395 .

75 Burrows, above n 46, 402

76 James Edelman and SimoneDegeling, 'Fusion: The interaction of common law and equity' (2004) 25 Australian Bar Review 195,204

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Bibliography

Articles

Andrew Burrows, 'We Do This At Common Law But That In Equity' (2002) 22(1) Oxford Journal Of Legal Studies 1

Andrew Tipping, 'Causation at Law and in Equity: Do we have Fusion' (2000) 7 Canterbury Law Review 443

Darryn Jensen, 'Punitive Damages for Breach of Fiduciary Obligations' (1996-97) 19 University of Queensland Law Journal 125

David Hughes, 'A Classification of Fusion after Harris v Digital Pulse' (2006) 29(2) University of New South Wales Law Journal 38

David Morgan, 'Harris v Digital Pulse: The Availability of Exemplary Damages in Equity' (2003) 29(2) Monash University Law Review 377

Fiona Bums, "Giumelli v Giumelli Revisited' (2001) 22 Adelaide Law Review 123

Fiona Bums, 'The 'Fusion Fallacy' Revisited' (1993) 5 Bond Law Review 152

Joachim Dietrich, 'Attempting Fusion: Professor Worthington's 'Equity' and Its Integration with the Common Law' (2005) 34(1) Common Law World Review 62

James Edelman and Simone Degeling, 'Fusion: The interaction of common law and equity' (2004) 25 Australian Bar Review 195

James Edelman, 'A "'Fusion Fallacy' Fallacy?'" (2003) 119 Law Quarterly Review 375

Jill Martin, 'Fusion, Fallacy and Confusion: A Comparative Study' (1994) The Conveyancer and Property Lawyer 13

Michael Tilbury, 'Fallacy or Furphy?: Fusion in a Judicature World' (2003) 26(2) University of New South Wales Law Journal 357

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Peter Julian Millett, 'Crabb v Arun District Council: A Reposte' (1976) 92 Law Quarterly Review 342

Simon Chesterman, 'Beyond Fusion Fallacy: The transformation of Equity and Derrida's 'The force of Law' (1997) 24(3) Journal of Law and Society 350

Books

Andrew Burrows, 'Remedial Coherence and Punitive Damages in Equity' in James Edelman and Simone Degeling, Equity in Commercial Law (2005) 381

Andrew Burrows, 'Fusing Common Law and Equity: Remedies, Restitution and Refonn' (Paper presented at the Hochelaga Lectures), University of Hong Kong, (2001)

Dr. Samantha Hepburn, Principles of Equity and Trusts, (3rd ed, 2006)

Frederick William Maitland, Equity: A Course ofLectures (1947)

G E Dal Pont, D R C Chalmers, Equity and Trusts in Australia, (4ht ed, 2007)

Keith Mason, 'Fusion: Fallacy, Future or Finished?' in James Edelman and Simone Degeling, Equity in Commercial Law (2005) 41

Lionel Smith, 'Fusion and Tradition' in James Edelman and Simone Degeling, Equity in Commercial Law (2005) 19

Michael Evans, Equity & Trusts, (1 st ed, 2003)

Roderick Meagher, John Dyson Heydon, Mark Leeming, Equity; Doctrines and Remedies (4th ed, 2002)

Roderick Meagher, William Gummow and John Lehane, Equity: Doctrines and Remedies (3rd ed, 1992)

Sarah Worthington, Equity (2nd ed, 2006)

Steve Hedley, 'Rival Taxonomies Within Obligations: Is There a Problem?' in James Edelman and Simone Degeling, Equity in Commercial Law (2005) 77

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Case Law

A-G for England and Wales v R [2002] 2 NZLR 91 (CA)

Aquaculture Corporation v NZ Green Mussel Co Ltd [1990] 3 NZLR 299

Canson Enterprises Ltd v Boughton and co ('Canson') (1991) 85 DLR (4th) 129

Charles v Epperson & Co (1965) 13 7 NW 2d 605

Digital Pulse Pty Limited v. Christopher Harris and Drs [2002] NSWSC 33

Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298

IHP Corporation v 210 Central Park South Corporation (1963) 189 NE 2d 812

Nocturn v Ashburton [1914] AC 932

Re Pryce [1917 1 Ch D 234

Redgrave v Hurd (1881) 20 Ch D 1

Seager v Copydex [1967] 2 All Er 415

Susquehanna ss Co v Anderson & Co (1925) 239 NY 285

United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904

Walsh v Lonsdale (1882) 21 Ch D 9

Legislation

Judicature Act 1873 (U.K.)