Court of equity

Disputes & Litigation

Solicitors & Lawyers
Legal Phrases

Term: court of equity

1.

To understand the role of Courts of Equity, it is necessary to appreciate part of the structure
and history of the English legal system. Prior to the Judicature Acts of 1873 and 1875, the
English legal system was comprised of two types of Courts, Courts of Law and Courts of
Equity.

The original courts of law in England enforced legal rights, before equitable rights came into
existence. Courts of equity arose later during the 17th, 18th and 19th century.

Courts either exercised the common jurisdiction or the equitable jurisdiction. Each type of
Court could only exercise the rules of law in the jurisdiction which it was empowered to
exercise – the common law jurisdiction, or the jurisdiction of equity. A common law court
could not exercise the jurisdiction of courts of equity, and vice versa. If a litigant wished to
obtain both a remedy at common law and in equity, the litigant was required to sue in two
different courts. During the development of Courts of Equity, litigation sometimes moved
between both types of courts, as one court could not grant all of the relief sought by the
parties.

The enforcement of legal rights by common law courts resulted in an award of damages or
recovery of real property or moveable property. A category of cases began to arise in
common law courts where the rights of a litigant were superseded by another, and thus
superior rights to property vested in a person other than the litigant. These cases were dealt
with by common law courts on the basis of fraud or some form of unconscionable conduct.
The litigant could however proceed in the Courts of Equity to obtain equitable relief.

Courts of law could not order specific performance, courts of equity had limited power to
award injunctions, and courts of equity had no power to award damages until the rise of Lord
Cairns’ Act (Chancery Amendment Act) in 1858.
The two types of courts were fused by the Judicature Acts of 1873 and 1875, which created a
single Supreme Court of Judicature. The existing courts at the time which exercised the
common law jurisdiction, (Queen’s Bench, Exchequer and Common Pleas, Court of
Exchequer Chamber, Court of Chancery and Court of Appeal in Chancery were replaced by
the one High Court. The single Supreme Court was divided into two parts, the High Court
with 5 separate divisions, supervised by the Court of Appeal. Each court had the power to
exercise the equitable jurisdiction.

Each of the courts exercising the jurisdiction of this Supreme Court had power to exercise the
common law jurisdiction and the equitable jurisdiction.

These combined courts exercise the powers of the old common law courts and the old court
of equity. The fusion of the courts of itself did not change the law that the single courts
exercise. The Senior Courts Act gives stator force to the fundamental principle that equity
prevails of the common law. That is, equity sits on top of the common law and mitigates or
varies its effect, and does not compete with the common law.

The remnants of this separation of jurisdiction remains today. The Chancery Division of the
High Court comprise courts primarily exercise the powers of the old courts of equity. It is
now empowered to exercise the powers of the common law courts to allow justice to be
dispensed with in a single court. The Queen’s Bench Division previously only exercised the
common law jurisdiction; since the Judicature Acts, it is also able to act as a court of equity

Characteristics of a Court of Equity

Equitable Rules of law are characterised by an ethical quality or quality of fairness, such that
unconscionable conduct of a party is prevented. The principles are of a more flexible nature
than those applied at common law. For example, the development of the law in respect to
companies and intellectual property rights are peppered with instances where equitable
principles transcend common law rules by regulating the conduct of directors, shareholders,
partners, agents and fiduciaries.

The ethical quality of rules of equity are frequently recited by reference to equitable maxims.
Maxims however may be misleading generalities. It is remains the case that Courts will apply
rules of law which, being equitable rules, are more flexible than those at common law.

Prior to fusion, courts of equity had 3 separate jurisdictions:

1. Exclusive jurisdiction, in which courts of equity recognised rights which did not exist
at common law.
2. Concurrent jurisdiction, hereby courts of equity recognised common law rights and
made available remedies which were not available in common law courts. Such
remedies included injunctive relief, specific performance of contractual obligations
and orders for an account of profits.
3. Auxiliary jurisdiction, within which courts of equity would allow a defendant to give
evidence when a common law court would not allow him to do so, or adding parties
to the proceedings to be heard where a common law court would not allow; courts of
equity also had power to force what is now known as disclosure, whereas common
law had no power to do so.
All equitable remedies are discretionary. The court will consider matters which go to the
justice or injustice of awarding a remedy, including delay, unfairness, hardship or oppression
upon the defendant, It may be that the ends of justice may be arrived at by granting
conditional orders or narrower relief than that sought. Also, where the court would need to
supervise the order, the nature of the obligations to be imposed, impossibility of performance
may be relevant considerations when deciding the order to be made.

Rules of common law tend to apply strictly and inflexibly, by reference to the facts proved.
The contrast, Courts of Equity are known for the degree of flexibility available to grant relief.

Usage: The claimant seeking injunctive relief for misuse of confidential information was
advised to commence proceedings in a court of equity, namely the Chancery Division of the
High Court.

Related Words: particulars of claim; account of profits; delivery up; hearing: litigation;
Chancery Division; cause of action; search order; norwich pharmacal order; freezing
injunction; interim injunction; anti suit injunction; specific performance; mareva injunction;
anton pillar order.

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