Seminar Materials and Lecture

Outlines 2020-21
Seminar 1:

The Key Concepts: Equity, the Trust & Equitable Remedies

SEMINAR MATERIALS
(Week 4)

PART A: REQUIRED READING

Pearce & Barr, Pearce & Stevens’ Trusts and Equitable Obligations (Oxford, 7th edn, 2018) ch
1(1)-1(3) and 1(7)-1(8)
Pearce & Barr, Pearce & Stevens’ Trusts and Equitable Obligations (Oxford, 7th edn, 2018)
chapters 1(4)-1(5), 2&3
Pearce & Barr, Pearce & Stevens’ Trusts and Equitable Obligations (Oxford, 7th edn, 2018 ch
1 (6) & chapters 33, 34 & 35
Burrows, ‘We Do This at Common Law But This in Equity’ (2002) 22 OJLS 1
Saunders v. Vautier (1841) 4 Beav 115, 49 ER 282
Jones v. Lock (1865) 1 Ch App 25.
Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC669
Co-operative Insurance v. Argyll Stores (Holdings) Ltd [1998] A.C. 1

1. (a) The Development of Equity

Textbook Reading:
Pearce & Barr, Pearce & Stevens’ Trusts and Equitable Obligations (Oxford, 7th edn, 2018) ch
1(1)-1(3) and 1(7)-1 (8)

Library and materials:

(This material is available on Reading Lists @ Liverpool, linked from Canvas)
The Earl of Oxfords Case (1616)
Rochefoucauld v Boustead [1897] 1 Ch 196
Burrows, ‘We Do This at Common Law But This in Equity’ (2002) 22 OJLS 1
Hayton, The development of equity and the "good person" philosophy in common law systems
(2012) Conv. 2012, 4, 263-273

1. (b) The Trust

Textbook Reading:
Pearce & Barr, Pearce & Stevens’ Trusts and Equitable Obligations (Oxford, 7th edn, 2018)
chapters 1(4)-1(5) , 2&3

Library and materials:

(This material is available on Reading Lists @ Liverpool, linked from Canvas)

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Saunders v. Vautier (1841) 4 Beav 115, 49 ER 282
Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC669
Jones v. Lock (1865) 1 Ch App 25.
Hayton, ‘Developing the Obligation Characteristics of the Trust’ (2001) 117 LQR 96

1. (c) Equitable Remedies

Textbook Reading:
Pearce & Barr, Pearce & Stevens’ Trusts and Equitable Obligations (Oxford, 7th edn, 2018 ch
1 (6) & chapters 33,34 & 35

Library and materials:

(This material is available on Reading Lists @ Liverpool, linked from Canvas)

Williams P (2017) ‘Keep open clauses in leases- an open and shut case!’ Landlord and
Tenant Review 21(2) 48.
Co-operative Insurance v. Argyll Stores (Holdings) Ltd [1998] A.C. 1
Jaggard v Sawyer [1995] 1 WLR 269
Anton Piller KG v Manufacturing Processes limited [1976] Ch 55
American Cyanamid Co v Ethicon Ltd [1975] AC 396.
Mareva Compania Navieria SA v International Bulkcarriers SA; The Mareva [1980] 1 All ER
213
Redland Bricks Ltd v Morris [1970] AC 652

PART B: SEMINAR DISCUSSION QUESTIONS

1. Explain the following, with reference to appropriate authorities/ sources:

(i) What is equity and why did it develop?
(ii) What is the significance of the ‘maxims of equity’? (See this video for assistance in
answering this question: (Equity Short: The Equitable Maxims).
(iii) “…equity is according to him that is Chancellor, and as that is longer or narrower, so is
equity. Tis all one as if they should make the standard for the measure a Chancellor’s foot” (John
Selden. Table Talk of John Seldon, quoted in Holdsworth’s HEL, pp.467-468). Does it remain the case
that the standard for justice in equity is the
‘Chancellor’s foot’?
(iv) Are equity and common law fused or do they remain distinct? What leads you to that
conclusion?
(v) Does equity continue to mitigate the harshness of the common law? Can you give
examples of circumstances where this remains the case?

2. Explain the following, with reference to appropriate authorities/ sources:

(You may also wish to engage with the equity short videos called ‘Express Trusts’ and ‘Star
Wars and the Trust’.
(i) The trust is known as ‘equity’s greatest creation’. What is a trust and how and why
did this mechanism develop?
(ii) What are the key differences between a trust and a gift?

(iii) Trusts may be express or implied, please explain the key differences between an
implied trust and an express trust.

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(iii) In what kind of situations may trusts be used?
(iv) What does the rule in Saunders v. Vautier (1841) 4 Beav 115, 49 ER 282, tell us about the
nature of ownership and the trust device?

3. Explain the difference between the following concepts, with reference to appropriate
authorities:

(i) Legal property rights

(ii) Equitable property rights
(iii) Personal rights
(iv) Proprietary rights
(v) Explain, with reference to appropriate authorities, the operation of the doctrine of
notice and how it effects the enforcement of equitable proprietary rights. Who is equity’s
darling?

4. ‘From a wider perspective, it cannot be in the public interest for the courts to require
someone to carry on a business at a loss if there is any plausible alternative by which the
other party can be given compensation. [It] yokes the parties together in a continuing hostile
relationship. The order for specific performance prolongs the battle...An award of damages,
on the other hand, brings the litigation to an end.’
(Co-operative Insurance Society v. Argyll Stores (Holdings) Ltd [1997] 2 WLR 898 per Lord
Hoffmann)

Critically analyse the law relating to specific performance in the light of the above
statement.

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 Seminar 1:

The Concept of Property, Foundation of Equity, the Trust &

Remedies

LECTURE OUTLINE
I.THE HISTORY & DEVELOPMENT OF EQUITY

The History of the Law of Equity

 Common law provisions are based on general rules, embody a ‘for the greater good’
approach.
 Over time it was realised that strictly applying such general rules led to unjust results in
some cases.
 Equity therefore developed as a way of ‘plugging the gaps’ in the common law.
 Equity is based on the concepts of fairness and unconscionability.

The Specific Legal Meaning of Equity: The Distinction between Common Law and
Equity

• A body of law consisting of the rights and remedies that have evolved historically through
the Courts of Chancery in order to mitigate the flaws and unyielding nature of the common
law.

• Baker, Snell’s Equity:

‘Equity is...a body of rules or principles which form an appendage to the general rules of law,
or a gloss upon them.’

• Watt, Trusts and Equity (O.U.P., 2003):

‘The function of the common law is to establish rules to govern the generality of cases; the
effect of these rules being to recognise that certain persons will acquire certain rights and
powers in certain circumstances. Legal rules allow the holders of legal rights and powers to
exercise them in the confidence that they are entitled to them. The function of equity is to
restrain or restrict the exercise of legal rights and powers in particular cases whenever it
would be unconscionable for them to be exercised to the full.’

• Earl of Oxford’s Case (1615) 1 Rep Ch 1 per Lord Ellesmere:

‘. . . [M]en’s actions are so diverse and infinite that it is impossible to make any general law
which may aptly meet with every particular and not fail in some circumstances. The office of
the Chancellor is to correct men’s consciences for frauds, breaches of trust, wrongs and
oppression of what nature so ever they be, and to soften and mollify the extremity of the law.’

The Judicature Acts 1873-1875: (Administrative) Fusion of Equity and Common Law?

1. The Lord Chancellor and The Court of Chancery

Gee v. Pritchard (1818) 2 Swans 402 per Lord Eldon:

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‘I cannot agree that the doctrines of this court are to be changed with every succeeding judge.
Nothing would inflict on me greater pain...than the recollection that I had done anything to
justify the reproach that the equity of this court varies like the Chancellor’s foot.’
The Earl of Oxford’s Case (1615) 1 Ch Rep 1
Marquis of Waterford v. Knight (1844) 11 C.P. & Fin. 653
Re Vandervell’s Trust No.2 [1974] Ch. 269 per Lord Denning M.R.:
‘Even a court of equity would not allow him to do anything so inequitable and unjust.’

2. The Judicature Acts 1873-1875

Judicature Act 1873 s.25 (now Supreme Court Act 1981 s.49):

‘Subject to the provisions of this or any other Act...wherever there is any conflict or variance
between the rules of equity and the rules of the common law with reference to the same
matter, the rules of equity shall prevail.’

Lord Napier and Ettrick v. Hunter [1993] W.L.R. 42 at 59 per Lord Goff:

‘No doubt our task nowadays is to see the two strands of authority, at law and in equity,
moulded into one coherent whole.’

Equity Comprises …

1. Equitable Rights:
 By equity
 Informality
 Binds the whole world except the Bona Fide Purchaser for Value Without Notice
 The doctrine of notice

Barclays Bank plc v O’Brien [1994] 1 AC 180.

‘The doctrine of notice lies at the heart of equity. Given that there are two innocent parties,
each enjoying rights, the earlier right prevails against the later right if the enquirer of the later
right knows of the earlier right (actual notice) or would have discovered it had he taken proper
steps (constructive notice). In particular, if the party asserting that he takes free of the earlier
rights of another knows of certain facts which put him on enquiry as to the possible existence
of the rights of that other and he fails to make such enquiry or take such other steps as are
reasonable to verify whether such earlier right does or does not exist, he will have
constructive notice of the earlier right and take subject to it.’ (per Lord Browne Wilkinson)

Types of Notice

i. Actual Notice
ii. Constructive Notice
iii. Imputed Notice (Actual or Constructive)

Bona Fide Purchaser For Value Without Notice Takes Free: Equity’s Darling

i. Bona Fides
ii. Purchase for Value

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iii. Of the Legal Title
iv. Without Notice

Kingsnorth Trust v Tizard [1986] 2 All ER 54

2. Equitable Remedies; for e.g. equitable compensation, equitable compensation,

restitution, specific performance, injunctions (see part C for more detail)

3. Equitable Maxims:

• ‘Equity will not suffer a wrong without a remedy’; fundamental. If common law and statute do
not provide a remedy equity intervenes
• ‘He who comes to equity must come with clean hands’; A claimant may not seek an
equitable remedy if they have failed to acted equitably themselves.
• ‘Equity follows the law (but not slavishly or always)’; equity mitigates the rigours of the CL
but equity will be bound to follow statutes in all circumstances, it only goes against CL if the
outcome would have been UNCONSCIONABLE
• ‘Equity looks to the intent rather than the form’; Courts look to the substance of a transaction
rather than just its superficial appearance
• ‘Equity looks on as done that which ought to have been done’; equity considers that
something has been done if it ought to have been done- see Walsh v Lonsdale (1882) 21 Ch
D9
• ‘Equity will not permit statute or common law to be used as an engine of fraud’; explains the
general relationship between common law equity and statute (Rochefoucauld v Boustead
[1897] 1 Ch 196)
• ‘Equity will not assist a volunteer’; equity will not assist a claimant who has given no
consideration (Jones v. Lock (1865) 1 Ch App 25)

B. THE HISTORY & DEVELOPMENT OF THE TRUST

The ‘use’

• The ‘use’ was the progenitor of what we now know as a ‘trust’. Uses can be traced back to
the 7th/8th Century
• When people went on crusades or pilgrimages it was important that their land was looked
after – whoever did this would need the same power and rights over that land as the legal
owner
• In such cases if the trustee breached his duties beneficiaries had no legal rights but could
petition the king – in such cases the kings order only operated ‘in personam’ ( i.e. against the
personal conscience of the trustee or a third party) at this stage beneficiaries had no
proprietary right in trust assets
• ‘To A & B to the use of C’

Problems with ‘uses’

• They allowed people to avoid paying feudal fines to the king (early tax evasion!)
• It made land ownership more complex -‘No man can know his title to any land with certainty’
• In response to these problems Henry VIII enacted the Statute of Uses (1536). Implications of
this statute: that legal title was transferred to the beneficiary in the use- thereby bringing the
use to an end. ( Mostly affected uses over land)

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• Draftsmen found a way to avoid the statute – the use upon a use i.e. to A to the use of B to
the use of C’.
• By end of 17th Century the use had become a trust. This simplified approach was confirmed
by the Tenures Abolition Act (1660) which removed feudal tax, so removed the need for the
earlier ‘Statute of Uses’
• This meant that (as is the case today) a beneficiary's interest can only be defeated by the
Bona Fide Purchaser for Value without Notice.

Trusts Today

• Equity’s ‘greatest creation’

• ‘To A&B in trust for C’
• Allows several people to all have rights in the same piece of property at the same time.
• Does this by separation of legal title and equitable interest. Legal title vests in the trustee,
equitable interest vests in the beneficiary (the real owner).

Raynor v. Preston (1881) 18 Ch.D. 1:

‘A trust is a form of property ownership in which the benefit of property is separated from the
title to the property, either partly or entirely. It is a form of property ownership in which equity
interferes to protect the rights of people who are not the legal owners of property.’

Penner, The Idea of Property In Law (Oxford: Clarendon Press, 1997) at 128:

‘The trustee is not a person with whom [the beneficiaries] have any personal relationship of
any substance – he is a personification of the trust agreement, and it is that which really
settles how the gift is to work. He is a human instrument.’

Trusts may be Express or Implied:

Express trusts; Trusts which have been intentionally created by the settlor declaring himself
as trustee or transferring property to a trustee.

Sub categories of express trusts include:

(1) Fixed trusts; where the beneficiaries and their shares are stipulated expressly by
the settlor
(2) Discretionary trusts; where the settlor gives the trustee the discretion to select who
from a class people receives the trust property and /or the quantity of their share
Express trusts; trusts which have been intentionally created by the settlor declaring himself
as trustee or transferring property to a trustee
Sub categories of express trusts include
(1) Fixed trusts; where the beneficiaries and their shares are stipulated expressly by
the settlor
(2) Discretionary trusts; where the settlor gives the trustee the discretion to select who
from a class people receives the trust property and the quantity of their share
(3) Exhaustive; where the trustees must distribute all income accruing to the trust fund;
and
(4) Non Exhaustive; where the trustees have a power to accumulate income.

Implied Trusts

Implied trusts are trusts which arise through implication/ legal doctrine

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Types of implied trusts;
(1) Resulting trusts: arises when an express trust fails or where there is ‘presumed’
intention (Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC669).
*Westdeutsche Landesbank v. Islington [1996] A.C. 669 per Lord Browne-Wilkinson:

‘Equity operates on the conscience of the owner of the legal interest. In the case of a trust,
the conscience of the legal owner requires him to carry out the purposes for which the
property was vested in him (express or implied trust) or which the law imposes on him by
reason of his unconscionable conduct (constructive trust).’

(2) Constructive trusts: Arise when equity presumes that, due to their unconscionable
behaviour, the legal owner holds the trust property on trust for someone else. Also used in the
context of the family home to give effect to the parties’ ‘common intention’.

Personal Rights and Proprietary Rights

• Personal right: enforceable against a particular defendant

• Proprietary right: enforceable against the whole world (except BFPFVWN)
• It is not exactly clear how what was originally a personal right granted by the kings became a
proprietary right
• Gary Watt speculates that this change is due to ‘pragmatism and the number of equity
judges’ Watt, G. (2008) Trusts and Equity, 3rd edition, Oxford University Press, Oxford p.11.
• Essential characteristics of proprietary rights

National Provincial Bank Ltd v Ainsworth [1965] AC 1175:

‘Before a right or an interest can be admitted into the category of property, or of a right
affecting property, it must be definable, identifiable by third parties, capable in its nature of
assumption by third parties, and have some degree of permanence or stability.’ (at 1248 per
Lord Wilberforce)

When looking at trusts determine, does the trust concern real or personal property?

• Real property: land

• Personal property: property other than land i.e. chattels
• Intellectual property: choses in action such as copyrights and patents

Is the subject matter of the trust in question tangible or intangible?

• Tangible: the subject matter has physical existence for example a piece of land , which you
can touch
• Intangible: something that cannot be touched i.e. a debt

The Contemporary Significance of Trusts

A. Trusts in the family home

• Relates to any situation in which the co-owners are not married or in which a secured
creditor is proceeding against a married couple.
• An overlap with Family Law provisions for e.g. the Family Law Act (1996)

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B. Creating Charities and Clubs

See the Charity Commission website (http://www.charity-commission.gov.uk/news/invest.asp)

 Currently, Collective Investment schemes specifically for charities are usually Common
Investment Funds (CIFs) or Common Deposit Funds (CDFs) which are created and regulated
by the (newly formed) Charities Commission. ( See lecture on charities for details on the
Charities Act (2011))
 Trusts also aid the formation and dissolution of clubs and societies also known as
unincorporated associations.

C. Trusts as a Means of Aiding Capitalism

• Trusts can be used to facilitate commercial transactions (see Re Kayford Ltd [1975] 1 all
ER 604, Re Farepak [2009] EWHC 2580 (Ch) )
• Can have trustees in a commercial context – particularly regarding large scale multinational
trade contracts.

3. EQUITABLE REMEDIES: IN OVERVIEW

1. The difference between remedies at equity and at common law

2. How the suite of equitable remedies illustrates equity’s main focus (preventing
unconscionability)
3. Equity acts ‘in personam’ correcting consciences, ensuring that people discharge
their obligations.
4. Equitable remedies as proactive as well as reactive (Cf common law remedies which
are reactive)
5. Links to equitable maxims (‘He who seeks equity must do equity’, ‘clean hands’
doctrine etc).

Remedy 1- Equitable Compensation

 Personal remedy
 Reactive not proactive
 Loss must flow from breach - Target Holdings Ltd v Redferns (a firm) [1996] AC 421
 ‘The trustee is liable to place the trust estate in the same position it would have been in if no
breach of trust had taken place.’ Re Dawson [1966] 2 NSWR Street J

Remedy 2- Equitable Restitution

 Personal remedy
 Unauthorised profits must be disgorged
 Very strict rule- Boardman v Phipps [1967] 2 AC 46

Remedy 3- Constructive Trusts

 ‘There are powerful policy reasons for ensuring that a fiduciary does not retain gains
acquired in violation of fiduciary duty , and I do not consider that it should make any difference
whether the fiduciary is insolvent. There is no injustice to their creditors in their not sharing in
an asset for which the fiduciary has not given value, and which the fiduciary should not have

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had’. Per Lawrence Collins J in Daraydan Holdings Ltd v Solland International Ltd [2004]
EWHC 622 at para 86
 Unauthorised profits and their traceable proceeds will be held on constructive trust for the
fiduciary’s principal - FHR European ventures LLP v Cedar Capital Partners LLC [2014] UKSC
45

Remedy 4- Specific Performance

 Specific performance compels the performance of a contract

 ‘ The court gives specific performance instead of damages only where it can by that means
do more and complete justice’, per Lord Selbourne (Wilson v Northampton and Banbury
Junction Rly Co (1874) 9 Ch App 279)
 Key case on where specific performance will be granted - *Cooperative Insurance Society
Ltd v Argyll Stores (Holdings) Ltd. [1998] AC 1:
1. Claimant must show they have given consideration
2. Contract cannot be ambiguous
3. Specific performance will not be ordered if constant supervision is required as this ‘leaves
the door open to indefinite courses of action’- Ryan v Mutual Tontine Westminster Chambers
Association [1893] 1 CH 116; Cooperative Insurance Society Ltd v Argyll Stores (Holdings)
Ltd. [1998] AC 1

 It is therefore suited to contexts where a ‘one off’ action is required rather than long term
actions.
 Subject of a contract for sale must be unique (land, chattels, private shareholdings) –
 Contracts for the sale of chattels (personal property) - S.52 of the Sales of Good Act (1979)
Falke v Gray (1859) 4 Drew 651, Behnke v Bede Shipping Company [1927] 1 KB 649,
Adderley v Dixon (1824) 1 Sim & St 607
 Land is generally viewed as unique- Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC
444.
Law of Property (Miscellaneous Provisions) Act 1989 s.2
 Shareholdings: Duncuft v Albrecht (1841) 12 Sim 189, Oughtred v IRC [1960] AC206,
Neville v Wilson [1997] Ch 144
 Where quantification of damages is difficult or damages are nominal- Beswick v Bewswick
(1968) AC 58.
 Specific performance is not suited to employment contracts/ contracts for personal services
or to compel a business to continue to trade
 Human rights implications – slavery? De Francesco v Barnum [1886-90] All ER Rep 414 at
418
 Trade Union and Labour Relations (Consolidation) Act 1992 forbids any order which would
‘compel any employee to do any work or attend any place for the doing of any work’.
 Contrary to the rule against constant supervision – CH Giles & Co Ltd v Morris [1972] 1 WLR
307
 Relationship between employer and employee has broken down (See Geys v Société
Générale [2012] UKSC 63; [2013] 1 A.C. 523. Ashworth v Royal National Theatre [2014]
EWHC 1176 (QB).-
 Specific performance will not be granted to compel a business continue trading- Cooperative
Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1.

A defendant may seek to refute a claim for specific performance on one of the following
grounds.
1. The contract did not adhere to the necessary formalities (for e.g. contracts for the
sale of land)

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2. Misrepresentation or undue influence exercised by the claimant (Walker v Boyle
[1982] 1 WLR 495)
3. Where the defendant made a mistake – Webster v Cecil (1861) 30 Beav 62.
4. Hardship – Patel v Ali [1984] Ch 283.
5. Misdescription of property - Flight v Booth (1834) 1 Bing NC 370; Charles Hunt Ltd v
Palmer [1931] 2 Ch 287
6. If the claim is unduly delayed – Huxham v Llewellyn (1873) 21 WR570 cf Williams v
Greatrex [1957] 1 WLR 31

If a claim is unsuccessful damages may be awarded in lieu of specific performance –

Supreme Court Act 1981 s.50

Remedy 5- Injunctions

Generally used to stop a defendant taking a course of action /engaging in a particular

behaviour (Prohibitory injunctions)

May be used to compel a defendant to act in a certain way i.e. to enforce the terms of a
contract (mandatory injunctions)

Common contexts where injunctions may be used:

1. To prevent trespass
2. To prevent nuisance
3. To prevent the publishing of confidential or private information
4. To prevent a breach of contract
5. To prevent a breach of trust
6. To enforce restrictive covenants
7. To prevent harassment
8. In a domestic context for example to stop a party entering the family home.

Injunctions may be perpetual or interim (interlocutory)

Permanent Injunctions- will be granted where:

a) Damages are inadequate
b) Claimant must come with clean hands
c) Action must not be unduly delayed
d) Claimant has to have a right that has been infringed or is at risk of being infringed
e) An order must be capable of clear definition.
f) An injunction will only be ordered if it is likely to be effective.

See Jaggard v Sawyer [1995] 1 WLR 269

If a claim is not successful, Senior Courts Act 1981 s.50 allows for the payment of damages in
lieu of an injunction in exceptional circumstances

Interim (interlocutory injunctions)

Temporary- typically granted throughout litigation to end on the date the of the final
judgement.
Guidance for when they should be granted comes from American Cyanamid Co v Ethicon Ltd
[1975] AC 396.
1. There has to be a serious issue to be tried
2. The balance of convenience test

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3. There has to be a real prospect of a trial
4. (as with permanent injunctions, damages must be deemed insufficient)

Mandatory injunctions

 Compel a defendant to behave in a particular way - Shepherd Homes Ltd v Sandham [1971]
Ch 340

 In Redland bricks v Morris [1970] AC 652 Lord Upjohn identified 3 aspects that the court
should consider when deciding whether to grant a mandatory injunction:

1. The claimant must show that there is a very strong possibility that they will incur
grave damages if the mandatory injunction is not granted.
2. Secondly, the court should also consider the cost to the defendant of taking action
both immediately and in the future. Wrothman Park Estate Co Ltd v Parkside Homes Ltd
[1974] 1 WLR 798;
3. If a mandatory injunction is to be granted the course of action needs to be very clear
i.e. it must be possible for the defendant to know precisely what they need to do to comply
with the injunction.

 Cannot be used to effectively allow specific performance of employment contracts - Page

One Records v Britton [1968] 1 WLR 157

Prohibitive injunctions

 Prohibitive injunctions are used to stop a defendant from engaging in certain behaviours
 Lend themselves to cases regarding nuisance (Lawrence v Fen Tigers Ltd [2014] UKSC 13),
trespass (Patel v WH Smith (Eziot) Ltd [1987] 2 All ER 569), to prevent breach of contract
(Doherty v Allman (1878) 3 App Cas 709) or the release/ publication of confidential info etc.

Quia timet injunctions

Are proactive – deal with situations where a claimant fears an infringement of his rights but
this has not yet taken place - Secretary of State for the Environment, Food and Rural Affairs v
Meier [2009] 1 WLR 2780
-Generally to be applied in 2 circumstances as per Lord Upjohn, Redland Bricks v Morris
[1970] AC 652

1. When the defendant is threatening to, and intends to act in a way which will harm the
claimant
2. When the claimant has already been compensated for previous actions of the defendant
however there is the potential for the defendant to act in a similar way in the future.

Search Orders

To stop the destruction of key evidence before trial

First granted in Anton Piller KG v Manufacturing Processes limited [1976] Ch 55

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In this case Ormrod LJ made it clear that a search order should only be granted where:
1. There is an extremely strong prima facie case.
2. The actual or potential damage must have serious implications for the claimant.
3. There must be clear evidence that the defendant has incriminating documents which
there is a real possibility of them destroying.

These principles of the above case are now codified under s7 of the Civil Procedure Act 1997
supplemented by Civil Procedure Rules r. 25. 1 (i)

Freezing Orders:

Formerly known as ‘Mareva’ injunctions due to the key authority Marerva Compania Navieria
SA v International Bulkcarriers SA; The Marerva [1980] 1 All ER 213

Senior Courts Act 1981 s.37 (3) and Rule 25(1) (f) of the Civil Procedures Rules 1998 states
that a freezing order can:
a) Restrain a party from moving their assets outside of the jurisdiction.
b) Restrain a party’s dealing with their assets within the jurisdiction.
c)

As confirmed in Derby & Co. Ltd v Weldon (Nos 3 and 4) these orders can apply worldwide.
Guidance on when a court should grant a worldwide freezing order comes from the Court of
Appeal judgement in Dadourian Group International Inc v Simms [2006] 1 WLR 2499.

A freezing order may also affect third parties such as banks if they are aware of a freezing
order and knowingly assist or permit a breach of the order -Customs and Excise
Commissioners’ v Barclays Bank Plc [2006] UKHL 28

Injunctions and the Media:

 ‘Super injunctions’- prevent the disclosure of information to protect an individual’s privacy.

Also prevent the disclosure of the existence of the injunction itself.
 Anonymised injunction – similar to the super injunction however party names are not stated.
 Contrary to freedom of the press? Freedom of speech vs right to a private family life ( court
has to balance article 10 v article 8)
 Pointless in an era of social media?
 Neuberger Report of the Committee on Super-injunctions: Super-injunctions, Anonymised
Injunctions and Open Justice.
 Core test for super injunctions set out in Re S (a child) (identification: restrictions of
publication) (2005) 1 AC 603.

Remedy 6- Rectification

 Rectification is an equitable remedy which enables a written document to be amended via a

court order
 Mistake may be mutual or unilateral

 Criteria for rectification of a mutual mistake- Lord Justice Etherton in Daventry District
Council v Daventry and District Housing Ltd [2011] EWCA Civ 1153
1. Parties had a continuing common intention

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2. this common intention existed at the time of the execution of the document in
question
3. The common intention fits with what an objective observer aware of all the facts
would have thought the intentions of the parties to be
4. Due to mistake the instrument/ document does not reflect the parties’ common
intention.

 Criteria for rectification of a unilateral mistake (in Thomas Bates & Son Ltd Windham’s
(Lingerie) Ltd [1981] 1 WLR 505. George Wimpey UK Ltd v VI construction Ltd [2005] EWCA
Civ 7)

1. The claimant must either erroneously believe that the document contained a
provision that it does not or believes that it did not contain a provision which it indeed does
contain.
2. The defendant , party B was aware of this omission or inclusion and is aware of A’s
mistake concerning it (includes wilful blindness as in Commission for the New Towns v
Cooper (GB) Ltd [1995] Ch 259
3. B failed to draw A’s attention to the mistake
4. The mistake was to B’s benefit
5. If these conditions are satisfied it would be unconscionable to allow the agreement
to continue unrectified

Remedy 7- Rescission

Rescission basically refers to setting aside an agreement (typically a contract) as if it had

never existed. (Johnson v Agnew [1980] AC 367)

Typically applies where there has been:

1. Mistake - Johnson v Agnew [1980] AC367; Pitt v Holt [2013] UKSC 26; Great Peace
Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679; Futter v Revenue
Commissioners [2013] UKSC 26
2. Misrepresentation- s.2(2) of the Misrepresentation Act 1967
3. Undue Influence- actual , presumed (Simpson v Simpson [1992] 1 FLR 601;
Mahoney v Purnell [1996] 3 All ER 61) and from a 3rd party (Royal Bank of Scotland v Etridge
( no.2) [2001] 4 All ER 449, Consumer Credit Act 2006).

 Contracts made in the course of a breach of fiduciary duty will also be liable to rescission i.e.
the self-dealing rule- Tito v Waddell ( No.2) [1977] Ch 106

 Bars to Rescission:
1. It has to be practically possible- Cheese v Thomas [1994] 1 All ER 35
2. Cannot rescind a contract if the claimant has affirmed it- Long v Lloyd [1958] 2 All ER
402.
3. Third parties have acquired rights – Bona fide purchase for value without notice
(BFPFVWN aka equity’s darling’)
4. Delay (laches)- Leaf v International Galleries [1950] 2 KB 86

Remedy 8- Subrogation

 Subrogation is where the rights of the claimant are transferred onto a third party.

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 For example an insurer
 Rare
 See for example Boscawen v Bajwa [1996] 1 WLR 328

Remedy 9- Account
 The remedy of account relates to when a party has obtained a benefit which they are not
entitled to – for example fiduciary breach
 Also applies where expense may have been incurred by a party but another party should
account for it.

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