The rigors of the common law rules resulted in the ameliorating effects of the rules of equity

in the evolution of real property.”

Discuss in relation to the classification of property generally and interests in real property
specifically.

Before the Norman Conquest of 1066, England did not have a defined legal system. Thus,
the practice was started of sending judges around the country to hold sittings in order to hear
cases locally. This allowed the judges to take the best local laws and apply them, however the
law varied from region to region and people were inherently treated different according to the
area that they came from. After 1066, England and Wales tried to create a system that was
more uniformed. This lead to the creation of laws which were common to the whole country,
that is, common law.

While such a system was much needed, it had defects that rendered it unfair in its
application of justice. Such a paradox was manifest in several ways, including the fact that:

1) an action in court could only be started by a writ and there were only a certain number
of writs that were available. A claimant therefore had to bring his claim within the
narrow circumstances of the existing writs. If there was no writ suitable for his claim, he
had no right to bring an action to the courts.
2) the common law had only a limited number and ranges of remedies available.
3) the common law did not recognise certain types of rights such as the rights if the
mortgagee or the rights of a beneficiary behind a trust.1

The only ‘justice’ for a claimant was to appeal to the King, which many did as, because the
King was not bound by the rigours of the common law, they found his rulings to be favourable.
However, the King soon realized that the volume of cases being brought to him for appeal was
too much. Something needed to be done. He then began passing some of the cases to the Lord
Chancellor to be decided fairly and consciously. This act marked the advent of equity, were the
1
Judith Bray, Unlocking Land Law (2004, Hodder & Stoughton) 32
common law was not so strictly applied. This court, the Court of Chancery developed its own
rights and principles. Some of the differences between the courts are,

(1) The Court of Chancery decided cases according to what seemed just and equitable while
the common law courts strictly enforced legal rights.

(2) The Court of Chancery could grant a wide range of remedies such as injunctions and
specific performance of a contract while the remedies in the common law courts only
consisted of damages.

(3) The Court of Chancery was willing to recognise new rights such as the mortgage and the
trust, which the common law courts refused to recognise.2

These separate courts existed until the passing of the Judicature Acts in 1873-75 which
combined the two systems and courts of law and equity, forming the Supreme Court. However,
section 49 (1) of the Supreme Court Act 1981 specified that where there exists an conflict
between the rules of the common law and the rules of equity, then the rules of equity shall
prevail.

Even though both systems have been merged, there still exists legal and equitable rights in
land, and these can even be over the same property. Legal rights are applicable against the
whole world and cannot be defeated by anyone (rights in rem). Equitable rights do not bind the
world and can only be applied if no one can prove that they have a better title than you (rights
in personam).

One of the most important roles that equity played in real property was to establish the
recognition of trusts. Trusts are not a new phenomenon, but equity has significantly smoothed
the rigours associated with them. In medieval times, for example, many landowners fought in
crusades, leaving their families for very long periods of time. They would leave someone in
control of their property, transferring it to that person while they were away, but with the
agreement that all income was to be for the benefit of his family and the land was to be
returned to them when they get back. The person, who now possesses the legal title, runs the
2
Ibid, p 33
property as agreed, keeps all the income for himself and upon the crusader’s return, refuses to
hand over the income or return the property to its rightful owner. The common law courts hold
that the crusader has no right to bring a claim as he is no longer the legal owner of the land. His
only recourse is to go to the King and ask him to intervene by forcing the person to recognise
that the transfer was only temporary. The King would then act accordingly. This was, in effect, a
trust. The common law courts were averse to recognizing trusts because they were of the view
that once the property was put into the name of the trustee they were the owners at law as
they had legally taken control of the property. The courts of equity disagreed. Beneficiaries’
rights were therefore based on conscience because courts of equity thought that it was wrong
to ignore their rights. Thus, equity would dictate that the land be returned to the rightful
owner.

The development of trusts today operates under several premises:

1) The settlor initially has absolute ownership of his property. The trustee receives the
property but holds it on trust for the benefit of the beneficiaries. He/She holds the legal
title. The beneficiary has a personal right to force the trustees to act on his behalf if they
refuse to act.

2) Express trusts arise by deliberate act of the owner of the property. He/She may appoint
a trustee himself or a third party known to the settlor who agrees to be the trustee.

3) Resulting trusts are not imposed deliberately but because of circumstance such as
where a partner to a relationship contributes to the purchase of the property but is not
recognized as a joint owner; the law will give that person a share in equity. The legal
owner is seen as to own on trust for them both.

4) Constructive trusts are imposed by the court because it would be unfair for the owner of
the property to hold that property for themselves.

Equity not only established trusts, but it also further defined it to ensure that the rights of the
beneficiaries are not breached in any way, as would be the case under the common law.
 Equity also stemmed the rigours associated with being a purchaser of land. At common
law, a person who purchases land and who does not give adequate value for the land must take
all the land’s legal and equitable burdens. If the purchaser gives the value with full knowledge
of any existing trust on the land, then all legal and equitable burdens are transferred to him.
Equity will not protect the former but, if the latter can prove that they are a good faith
purchaser of a legal estate for value without notice, then he becomes ‘equity’s darling’ as long
as he can establish that he did indeed purchaser in good faith. In Pilcher v Rawlins,3 James LJ
commented that such a purchaser had an “absolute, unqualified, unanswerable defence”
against an equitable right. Here we see where equity intervened to remedy the result of the
strict application of the common law.

As stated earlier, equity sought to correct the injustice that was unwittingly caused as it
relates to remedies that were available to claimants. If one’s legal rights were infringed, then
the remedy would be a ‘legal’ one – damages decided with consideration of the degree of the
infringement. The infringement of equitable rights however saw the use of other more
meaningful and acceptable remedies such as specific performance or an injunction.

Equity also provided novel equitable interests in land. These included

a) estate contracts, which stipulated that even though at common law a purchaser of land
only had rights to damages if the vendor broke the contract, in equity he had the right
to compel the vendor to convey the land itself. This in effect created an equitable right
in the land for the purchaser.

b) restrictive covenants, which bind a purchaser to use the land in only the manner that
the landowner determines because he (the landowner) has adjoining property (such a
covenant is called a negative covenant). The enforceability of such covenants was
extended by equity after the decision of Tulk v Moxhay,4 which held that only negative
covenants can be enforced. Therefore, all subsequent owners were bound, unless they
were ‘equity’s darling’.

3
(1872) 7 Ch App 259
4
(1843) 2 Ph 773
 c) Mortgagor’s equity of redemption, which stipulated that the mortgagor had an equity of
redemption which in effect allowed that individual to regain ownership of the land as
soon as the amount due to the mortgagee is fully paid.

Robert Megarry and H.W.R. Wade,5 posits that in the common law equity may fall under
four (4) jurisdictions:

1) the exclusive jurisdiction that deals with matters which the common law totally ignored,
such as trusts;

2) the concurrent jurisdiction where equity presents remedies that are better suited in
some cases than just mere damages offered by the common law, such as specific
performance for the sale of property;

3) the auxiliary jurisdiction where equity assists the common law procedure; and

4) the overriding jurisdiction where equity interrupts the common law process in one of
the abovementioned ways.

We have seen therefore, where, even though the common law is an integral part of any legal
system, it must work in conjunction with equity in order to be not only effective, but also fair
and just. There will be rigours within the common law but equity must step in to ‘sand down’
any injustice that may arise from the common law strict application. One of the maxims of
equity is that equity follows the law. In other words,

“equity is merely a corrective system of justice needed where the dogmatic

assertion of a formal rule of law produces an unacceptably unfair or ‘inequitable’
outcome”.6

NB.
-Legal interests are rights in rem;
-while equitable interest are rights in personam.

5
Robert Megarry and H.W.R. Wade, The Law of Real Property (1999, 6th edn, Sweet & Maxwell) 109
6
Kevin Gray and Susan Francis Gray, Land Law (2007, 5th edn, Oxford University Press) 20
Terms: - in rem–against a thing as distinct from a person. It is a right or an action good
against the world because it is attached to the thing and not the person.

in personam –against specified persons.

References

Judith Bray, Unlocking Land Law (2004, Hodder & Stoughton) 32

Kevin Gray and Susan Francis Gray, Land Law (2007, 5th edn, Oxford University Press) 20
Robert Megarry and H.W.R. Wade, The Law of Real Property (1999, 6th edn, Sweet & Maxwell)
109