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Remembering Equity and its Role in Property Relationships Associate Professor Cameron Stewart Division of Law Slide 2 The Blind Men and the Elephant John Godfrey Saxe John Godfrey Saxe Slide 3 The Anglo-Saxon Invasions c500AD Slide 4 The Battle of Hastings 1066 Slide 5 Norman Reorganisation Sovereignty Sovereignty Absolute beneficial title Absolute beneficial title Reception of laws Reception of laws Conquering Conquering Settling; Settling; Cessession Cessession Feudalism Feudalism Slide 6 Henry II the Father of the Common law Curia Regis Curia Regis General Eyre and Assizes General Eyre and Assizes Assize of Clarendon 1166 12 freemen from the hundred and 4 from the town Assize of Clarendon 1166 12 freemen from the hundred and 4 from the town Henry, Richard Coeur- de-Lion and John Lackland Henry, Richard Coeur- de-Lion and John Lackland Slide 7 ABecketts Legacy The Church Courts The benefit of the The benefit of the clergy clergy Slide 8 Edward Longshanks Hammer of the Scots Parliament begins 1275 Parliament begins 1275 The use of statute as opposed to ordinance The use of statute as opposed to ordinance Nisi Prius Nisi Prius Quia Emptores Quia Emptores Slide 9 Curia Regis embryonic courts Court of Exchequer revenue Court of Exchequer revenue Court of Common Pleas civil actions Court of Common Pleas civil actions Court of Kings bench crime Court of Kings bench crime Remaining Council functions split into Remaining Council functions split into Kings Council later Concilium Regis and then Privy Council Slide 10 The Writ System Bureacracy Bureacracy Organisation of wrongs Organisation of wrongs Remedies Remedies Popularity Popularity Recording Recording Stare Decisis Stare Decisis Common law Common law Slide 11 Whats the common law meant to do? Persons & Property Persons & Property Quick, efficient, fair and effective Quick, efficient, fair and effective Real property real actions- real relief Real property real actions- real relief Seisin Seisin Remedies return the seisin, pay monetary damages Remedies return the seisin, pay monetary damages Contract and tort Contract and tort Slide 12 What goes wrong? Slide 13 The Office of the Lord Chancellor Around since Norman times Around since Norman times Keeper of the Kings Conscience Keeper of the Kings Conscience Cleric and Keeper of the Great Seal Cleric and Keeper of the Great Seal Member of Lords, Judge and Church Member of Lords, Judge and Church Slide 14 Chancery as a Court Around the 15 th century Around the 15 th century Function to repair the failings of Common law Function to repair the failings of Common law Principles of Christian fairness/conscience Principles of Christian fairness/conscience Maxims of equity Maxims of equity Substance not form Substance not form Does not assist a volunteer Does not assist a volunteer Equity follows the law Equity follows the law Clean hands Clean hands Discretion and the Chancellors foot Discretion and the Chancellors foot The two streams law and equity The two streams law and equity Slide 15 What does Equity do? Parkinson: (i) the exploitation of vulnerability or weakness, as exemplified in principles relating to unconscionable dealing and undue influence; (ii) the abuse of positions of trust or confidence, as exemplified in the law of trusts and fiduciary obligations generally; (iii) the insistence upon rights in circumstances which make such insistence harsh or oppressive as exemplified in relief from penalties and forfeiture, the law of equitable set-off, and the refusal of specific performance on the discretionary ground of hardship; (iv) the inequitable denial of obligations, as exemplified in the doctrine of part performance and the principle of equitable estoppel; (v) the unjust retention of property, as exemplified in certain constructive trusts and principles of subrogation Slide 16 The relationship between CL and Eq James VI of Scotland James VI of Scotland The rise of protestantism The rise of protestantism Absolutism of sovereign Divine Right of Kings or King-in-parliament? Absolutism of sovereign Divine Right of Kings or King-in-parliament? Bacon & Ellesmere: Earl of Oxfords case Bacon & Ellesmere: Earl of Oxfords case Slide 17 Earl of Oxfords case The Office of the Chancellor is to correct Mens consciences for Frauds, Breach of Trusts, Wrongs and oppressions, of what Nature soever they be, and to soften and mollify the Extremity of the Law... [W]hen a Judgment is obtained by Oppression, Wrong and a hard Conscience, the Chancellor will frustrate and set it aside, not for any error or Defect in the Judgment, but for the hard Conscience of the Party. The Office of the Chancellor is to correct Mens consciences for Frauds, Breach of Trusts, Wrongs and oppressions, of what Nature soever they be, and to soften and mollify the Extremity of the Law... [W]hen a Judgment is obtained by Oppression, Wrong and a hard Conscience, the Chancellor will frustrate and set it aside, not for any error or Defect in the Judgment, but for the hard Conscience of the Party. Slide 18 The legalisation of equity The Civil War equity nearly destroyed The Civil War equity nearly destroyed Lord Nottingham (1673-82) father of equity Lord Nottingham (1673-82) father of equity Lord Eldon (1801-27) modern rules Lord Eldon (1801-27) modern rules Precedent and fixation Precedent and fixation Appointment of VC Appointment of VC Poor administration Poor administration Infamous delay record 16 years and still interlocutory Infamous delay record 16 years and still interlocutory Slide 19 19 th Century reforms Bentham and the dog law Bentham and the dog law Judicature Acts 1870s 1970s Judicature Acts 1870s 1970s The two streams in one courtWindeyer J in Felton v Mulligan (1971) 124 CLR 367 at 392; [1972] ALR 33 at 46 The two streams in one courtWindeyer J in Felton v Mulligan (1971) 124 CLR 367 at 392; [1972] ALR 33 at 46 Fusion fallacies Fusion fallacies Salt v Cooper (1880) 16 ChD 545 at 549, Jessel MR said of the effect of the Act: Salt v Cooper (1880) 16 ChD 545 at 549, Jessel MR said of the effect of the Act: It has been sometimes inaccurately called 'the fusion of Law and Equity'; but it was not any fusion, or anything of that kind; it was the vesting in one tribunal the administration of Law and Equity in every cause, action, or dispute which should come before that tribunal. To carry that out, the Legislature did not create a new jurisdiction, but simply transferred the old jurisdictions of the Courts of Law and Equity to the new tribunal, and then gave directions to the new tribunal as to the mode in which it should administer the combined jurisdictions. It has been sometimes inaccurately called 'the fusion of Law and Equity'; but it was not any fusion, or anything of that kind; it was the vesting in one tribunal the administration of Law and Equity in every cause, action, or dispute which should come before that tribunal. To carry that out, the Legislature did not create a new jurisdiction, but simply transferred the old jurisdictions of the Courts of Law and Equity to the new tribunal, and then gave directions to the new tribunal as to the mode in which it should administer the combined jurisdictions. Slide 20 Property in CL Universalized, reified, fetishized the materialization of the common law Universalized, reified, fetishized the materialization of the common law Formality Formality Creation Creation Transfer Transfer Rights recognised in contract and tort breach of contract, trespass, negligence Rights recognised in contract and tort breach of contract, trespass, negligence Remedies for breach of property rights damages Remedies for breach of property rights damages CL makes orders about the property not the people CL makes orders about the property not the people Slide 21 Property in Eq Substance Substance Conscience Conscience Power Power Responsibility lunacy, infants, married woman Responsibility lunacy, infants, married woman Trust and confidence Trust and confidence BUT through the logic of precedent not unfettered discretion BUT through the logic of precedent not unfettered discretion Rights recognised through doctrines of equity misrepresentation, undue influence, duress, unconscionability, fiduciary relationships, part performance, equitable estoppel, breach of confidence Rights recognised through doctrines of equity misrepresentation, undue influence, duress, unconscionability, fiduciary relationships, part performance, equitable estoppel, breach of confidence Remedies injunctions, specific performance, constructive trusts, personal orders Remedies injunctions, specific performance, constructive trusts, personal orders Equity makes orders about the people not the property Equity makes orders about the people not the property Slide 22 Property in Eq Equitable property or interest (equitable fee simple, mortgages, covenants etc) Equitable property or interest (equitable fee simple, mortgages, covenants etc) Personal Equities (Gill v Gill) Personal Equities (Gill v Gill) Mere Equities (Latec) Mere Equities (Latec) Slide 23 Case study 1: When contracts go bad A (vendor) exchanges contracts with B (purchaser) A (vendor) exchanges contracts with B (purchaser) A gets a better offer from C (he knows about Bs offer) and completes the sale to C before B knows A gets a better offer from C (he knows about Bs offer) and completes the sale to C before B knows Common law approach? Breach and damages no property held by B Common law approach? Breach and damages no property held by B Equitable approach: breach and specific performance Equitable approach: breach and specific performance But what about the property interests? But what about the property interests? Slide 24 Case study 1: When contracts go bad In common law B is not the owner as the contract has not been completed so the property cannot be returned In equity, the rule in Lysaght v Edwards says that B gets an equitable interest from the exchange and that it is a form of constructive trust, which can be enforced against C (when he knows about B) Slide 25 Case Study 2: Fat Henry and the problem of trusts Henry and the purse strings Henry and the purse strings Taxation in Tudor England feudal tenures Taxation in Tudor England feudal tenures Primogeniture Primogeniture Devising land by will Devising land by will The legal remainder rules The legal remainder rules Slide 26 The use A --------------------------B --------------------C (Landowner)(feoffee to use )(cestui que use) Legal estate Beneficial estate CLEquitable Slide 27 The Statute of Uses 1535 Collapse the use Collapse the use Springing uses Springing uses The use on the use The use on the use Equity creates property where there was none before Equity creates property where there was none before Slide 28 Case study 2: Part performance and the equitable impersonation A Lease for a factory an agreement to create a deed A Lease for a factory an agreement to create a deed Or a mortgage created by deposit of title deeds Or a mortgage created by deposit of title deeds Or a promise to give a life interest if cared for in dotage Or a promise to give a life interest if cared for in dotage Slide 29 The requirements for writing 23BAssurances of land to be by deed (1) No assurance of land shall be valid to pass an interest at law unless made by deed. 23CInstruments required to be in writing (1) Subject to the provisions of this Act with respect to the creation of interests in land by parol: (a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the persons agent thereunto lawfully authorised in writing, or by will, or by operation of law, . Slide 30 The requirements for writing 54AContracts for sale etc of land to be in writing (1) No action or proceedings may be brought upon any contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged CL says no deal Slide 31 Part performance Equity looks to substance not form Equity looks to substance not form Was there an agreement? Was there an agreement? Did a party act under that agreement and performed an act to their detriment which relates solely to the agreement? Did a party act under that agreement and performed an act to their detriment which relates solely to the agreement? Is the agreement one which a court of equity would order specific performance? Is the agreement one which a court of equity would order specific performance? If yes to all then equity creates an interest which is an equitable impersonation or copy of the common law interest being claimed If yes to all then equity creates an interest which is an equitable impersonation or copy of the common law interest being claimed