12045551

Final mark awarded:_____

FACULTY OF BUSINESS AND

SOCIETY

Assessment Cover Sheet and Feedback Form 2014/15

This essay will examine whether law and equity are now fused into one single
comprehensive body of law. Historically, there used to be two completely distinct
sets of courts in England, and therefore two distinct systems of law: common law
and Equity. This essay will start by defining what common law and equity is and it
will provide an examination of the history of the relationship between law and equity.
It will then move on to explain how the fusion between the two came about and how
the outcome has brought out diverse controversial academic debates. Have the two
bodies fused resulting in one body of rules? Or do we still have two bodies of law
contradicting with one another?

The term ‘common law’ has three possible meanings depending upon the context in
which it is used.

In its wider meaning, the ‘common law’ includes the laws of a common law
jurisdiction, whether formulated by legislation or by the judges. Thus, common law
systems are opposed to civil law systems like those of France and Italy. In a lesser
meaning common law is that law made only by the judges rather than by legislation.
In its narrowest meaning, the common law is used to distinguish between two judge-
made bodies of law- ‘Common Law’ and ‘Equity’ that are the focus of this essay. 1

Equity is merely a gloss upon, or a supplement to, the common law.2 Equity means
justice, fairness. The Greek philosopher Aristotle argued that equity is the
rectification of legal justice in so far as the law is defective. Laws are general but “the

1
D Hayton, ‘The development of equity and the "good person" philosophy in common law
systems’ (2012) 4 Conveyancer and Property Lawyers 263-273
2
Ibid 264
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raw material of human behaviour” is such that is often impossible to pronounce in

general terms.3

The origins of common law can be traced back to 1066 when Norman Conquest
introduced a new system of law for England. Before 1066 there was no “law of
England”. Towards the end to the thirteenth century two main types of courts were
administering the law in the country. First, there were the local courts which were
administered by the feudal lords. Secondly, there were the Common Law Courts,
known as the royal courts consisting of the King’s Bench, Court of Exchequer and
Court of Common Pleas. A potential litigant who was unjustly dealt within the court of
his local lord had a right to petition the King and ask for his case to be heard in one
of the common law courts. The main form of starting an action against another party
was by issuing a writ – an order from the King that the matter be heard.

With growth in number of writs to respond to new types of action, law became
difficult for lawyers who were bound to remember writs for oral pleadings. Because
of this, Provisions of Oxford 1258 and Statute of Westminster 1285 restricted
introduction of new writs and any new writs were by the permission of the King’s
Council. This resulted in the inflexibility of the common law.4 Common law lacked
flexibility in remedies, it provided only one remedy- damages, or money
compensation which is often an ineffective remedy.5

The inflexibility led to hardship and thus the individual could petition to the King for
extraordinary justice and by the 14th century the King passed the petitions to the
Chancellor. The Chancellor was the head of the Chancery Department and ‘keeper
of the King’s Great Seal’. The Chancellor rectified the harshness of the common
law.6 In the 15th century the petitions became so numerous that in time a new court ,
the court of Chancery was created in order to deal with them, and a new system of
law known as ‘equity’ was developed in the court. Chancellor’s court was initially
seen as a court of conscience.7 The court of Chancery was seen to make its

3
L Huppes-Cluysenaer and M.M.S. Coelho, Aristotle and The Philosophy of Law: Theory,
Practice and Justice (Springer 2013) 32
4
P. S Davies and G Virgo, Equity & Trusts: Text, Cases, and Materials ( Oxford University
Press 2013) 40
5
Ibid 42
6
G Watt, ‘Trusts and Equity’ (6th edn, Oxford University Press 2012) 11
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decision subjectively and it depended on who the chancellor was at the time. The
Chancellor did what he thought was objectively the right thing to do.

In the beginning of the 16th century, Chancellors were usually bishops and by the
end of the century they were lawyers.8 In 1675, Lord Nottingham was the Chancellor
who set down the principles and the boundaries to which equity functioned.9 At this
time, there begun to be a settled body of law. The court of Chancery stopped being a
court of conscience. This can be seen in Honeywood v Bennett where it was
illustrated that ‘contract without consideration was binding in conscience but not in
equity’.10 Similar, Jessel MR declared that it “is not, as I have often said, a court of
conscience, but rather a court of law”.11

The evolvement of common law and equity according to Sarah Worthington can be
compared to a kindergarten game and as it advanced new rules are made. She
explains when the game moves to a higher level it is impossible to play if there are
two leaders competing, the red umpire and the green umpire.12 The red umpire and
the green umpire serve as common law and equity. Equity recognises things that
common law do not.13

The conflict between the two systems came to a head in the early seventeenth
century with the Earl of Oxford’s Case (1615)14. The Earl of Oxford’s case laid down
the equitable maxim that where the law and equity conflict, equity prevails. This also
has been enshrined in statute.15

7
D.R Klinck, Conscience, Equity and the Court of Chancery in Early Modern England ( Ashgate
Publishing Limited 2010) 15
8
R Clements and A Abass, Equity & Trusts: Text, Cases, and Materials (3rd edn, Oxford
University Press 2011) 34
9
A Hudson, Equity and Trusts (18th edn, Routledge 2013) 37
10
Honeywood v Bennett [1675] Nottingham rep (73ss) 214
11
P H. Pettit, Equity and the Law of Trusts ( 12th edn, Oxford University Press 2012) 13
12
S Worthington, Equity ( 2nd edn, Oxford University Press 2006) 5
13
Walsh v Lonsdale (1882) 21 Ch D 9 : A good example is the law of forfeiture of leases. At
common law, a lease may be forfeited by the landlord if the tenant breaks any of the
covenants. Equity, however, steps in to mitigate the harshness of tis common law to remedy
by allowing the tenant in default to apply to the court for relief from forfeiture.
14
Earl of Oxford’s Case (1615) 1 Rep Ch 1
15
S. 49 Supreme Court Act 1981
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The most significant change in the history of both the development of common law
and equity is enclosed in the Judicature Acts 1873-75.16 By virtue of the Judicature
Acts, the old common law and equity were abolished and a new Supreme Court was
established in their place. This consisted of an Appeal Court and a High Court. Any
judge within this new structure could administer both common law and equity so that
litigants could obtain both kinds of remedies in one court.17

The reforms introduced by the Judicature Acts 1873-75 mark the birth of the modern
legal system of England and Wales. While it is clear that the Judicature Acts fused
the administration of common law and equity, there is continuing debate over
whether the Acts, in fact, created a single body of rules. Ashburner likened the
common law and equity to two streams running alongside one another, but never
mingling their waters.18 This illustrates that the Judicature Acts only unified the
administration of the law.

An alternative view is that law and equity themselves are fused. This view was put
clearly by Jessel MR in Walsh v Lonsdale (1882)19: “there is only one Court and the
equity rule prevails it’. More explicitly, in United Scientific Holdings Ltd v Burnley
Borough Council (1979)20 Lord Diplock argued that Ashburner’s statement of the two
parallel streams had become ‘deceptive and mischievous’ and that the ‘ streams’ of
common law and equity had long since mingled together. Also, Lord Simon made it
plain that the object of section 25 of the Supreme Court of Judicature Act 1873 was
to ‘reconcile the differences between common law and equity in so that the two
systems… could form a single body’.21

The only remedy awarded in a common law court for breach of contract was
damages so equity was very inventive in developing a series of new remedies:
specific performance, the injunction and also rescission and rectification. If the
Judicature Acts truly fused equity and common law into a single body then all
remedies were available whether the issues were equitable or legal. This view was

16
Judicature Acts 1873-1875
17
P N. Balchin and M Rhoden, Housing: The Essential Foundations ( Routledge 2003) 230
18
W Ashburner, Principles of Equity ( General Books LLC 2013) 67
19
Walsh v Lonsdale (1882) 21 Ch D 9
20
United Scientific Holdings Ltd. v. Burnley Borough Council [1978] A.C. 904.
21
S Atkins, Equity and Trusts ( Routlege 2013) 11
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adopted by many of the commonwealth countries.22 Yet, in the English legal system
if a problem is only identified by equity it means that only equitable remedies will be
awarded. This is illustrated in the case of Johnson v Agnew (1980)23 where the
remedy of common law, damages, were not applicable for the breach of covenant by
a successor and a similar verdict was given in relation to breach of trust.

The ‘fusion fallacy’ proposes that it is bad law to bring common law and equity
together in a way that would have been impossible prior to the judicature Acts. 24 The
academic Jill Martin explains that equity can evolve but she rejects the idea that
equity and common law are fused.25

However, it can also be argued that the two systems are fused. The case of Seager
v Copydex Ltd (1967)26 demonstrates the closer relationship of equity and the
common law today. It was illustrated that the idea of fusion came about some 100
years after the Judicature Acts, thus this idea of fusion can be seen as far back as
1882 when Jessel MR said how there is just one estate and one court at which
equity prevails.27 Equally, in Central London Property Trust Ltd v High Trees House
(1947) 28 Denning J declared that there is a result of the fusion of law and equity, so
it really doesn’t matter if there was no consideration. Likewise, Lord Denning agreed
29
that the two systems had been fused. In Errington v Errigton (1952) he
demonstrated how law and equity had been fused for 80 years.

However, the conclusion that equity and the common law are identical is equally
inaccurate. Lord Diplock commented on the metaphor given by Ashburn saying that
the waters had now mingled, but his Lordship was surely guilty of the so- called
‘fusion fallacy’ if he meant to suggest that there is no longer any substantial
functional difference between equity and the common law.30 The decision of the
22
D Hayton, ‘The development of equity and the "good person" philosophy in common law
systems’ (2012) 4 Conveyancer and Property Lawyers 263-273
23
Johnson v Agnew [1980] AC 367
24
R Meagher, W Gummow and J Lehane, Equity: Doctrines and Remedies (3 rd edn, 1992)
201-203
25
J Martin, ‘Fusion, Fallacy and Confusion; a Comparative Study’ (1994) Jan/Feb
Conveyancer and Property Lawyer 13-30
26
Seager v Copydex Ltd (1967) 1 WLR 923
27
J Bray, A Student's Guide to Equity and Trusts ( Cambridge University Press 2012) 18
28
Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130
29
Errington v Errington Woods [1952] 1 KB 290
30
P H. Pettit, Equity and the Law of Trusts ( 12th edn, Oxford University Press 2012) 14
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Lordship has been described as ‘the low water mark of modern English
jurisprudence’. This brings the idea that the common law and equity are mutually
dependent aspect of all law: “ Neither law nor equity is now stifled by its origin and
the fact that both are administered by one Court has inevitably meant that each has
borrowed from the other in furthering the harmonious development of the law as a
whole.”31

However, Sir Anthony Mason argued that the Judicature Acts are an opportunity for
equity to progress ahead of the common law.32 Equity is only concerned with conduct
in relation to pre-existing legal rights, duties and powers. In short, there never is
equity without law. As the maxim says, ‘equity follows the law’.

Equity become now a highly developed body of legal rules which continues to
provide ‘relief from the hardships caused by strict application of common law rules’. 33
Together, equity and the new invention, the trust, continue to developed flexibility.

The suggested fusion of common law and equity is not as a clear as a yes it has
fused or no or no it hasn’t. The Judicature Acts definitely fused the administration of
common law and equity but whether they are fused in substance appears to be the
individual own opinion. The fact that legal remedies could not be issued for an
equitable concept demonstrates that they are not in a complete harmony. To
confidently state that common law and equity have fused into one comprehensive
body of law would require, as stated by Burrows, a change in terminology, a deeper
integration and slight amendments in the current law34.

Bibliography

31
Elders Pastoral Ltd v Bank of New Zealand (1989) 2 NZLR 180, per Somer J at 193
32
A Mason, ‘The Place of Equity and Equitable Remedies in the Contemporary Common Law
World’ (1994) 110 LQR 238
33
G Watt, ‘Trusts and Equity’ (6th edn, Oxford University Press 2012) 11
34
A Burrows, “We do this at Common Law but that at Equity” (2002) 22(1) Oxford Journal of
Legal Studies 1-16
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Textbooks
Atkins S, Equity and Trusts ( Routlege 2013) 11

Balchin P N. and Rhoden M, Housing: The Essential Foundations ( Routledge 2003)

230

Bray J, A Student's Guide to Equity and Trusts ( Cambridge University Press 2012)
18

Clements R and Abass A, Equity & Trusts: Text, Cases, and Materials (3rd edn,
Oxford

Davies P. S and Virgo G, Equity & Trusts: Text, Cases, and Materials ( Oxford
University Press 2013) 40

Hudson A, Equity and Trusts (18th edn, Routledge 2013) 37

Klinck D.R, Conscience, Equity and the Court of Chancery in Early Modern England
( Ashgate Publishing Limited 2010) 15

Watt G, ‘Trusts and Equity’ (6th edn, Oxford University Press 2012) 11

Worthington S, Equity ( 2nd edn, Oxford University Press 2006) 5

Journals
Burrows A, “We do this at Common Law but that at Equity” (2002) 22(1) Oxford
Journal of Legal Studies 1-16

David H, ‘The development of equity and the "good person" philosophy in common
law systems’ (2012) 4 Conveyancer and Property Lawyer 263-273

Martin J, ‘Fusion, Fallacy and Confusion; a Comparative Study’ (1994) Jan/Feb

Conveyancer and Property Lawyer 13-30

Mason A, ‘The Place of Equity and Equitable Remedies in the Contemporary

Common Law World’ (1994),110(Apr) Law Quarterly Review 238-259

Cases
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Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130Earl of
Oxford’s Case [1615] 1 Ch. Rep 1

Elders Pastoral Ltd v Bank of New Zealand (1989) 2 NZLR 180, per Somer J at 193

Errington v Errington and Woods [1952] 1 K.B. 290

Honeywood v Bennett [1675] Nottingham rep (73ss) 214

Johnson v. Agnew [1980] A.C. 367

Jones v Kernott [2012] 1 A.C. 776

MCC Proceeds Inc v Lehman Bros International (Europe) [1998] 4 ALL E.R. 675

Salt v Cooper [1880] 16 Ch. D. 544

Seager v Copydex Ltd (1967) 1 WLR 923

United Scientific Holdings Ltd v Burnley Borough Council [1978] A.C. 904

Walsh v Lonsdale [1982] 21 Ch. D. 9

Legislation

Judicature Act 1873-75

Supreme Court Act 1981