Fusion of equity and the Law, WK 2

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Genesis of the Judicature Act ( inclusive of all jurisdiction family, divorce, matrimonial, will, etc).

Argument of whether the act came to fuse or confer new rights. (Salt v Cooper – does not support fusion but rather assimilation of process; Erington v Erington – Lord Denning disagrees; United scientific holdings- Lord Diplock – no fusion but there has been some comingling)

2 Beyond organizational amalgamation:

◦ Tinsley v Milligan: Claimant showed interest in property based on legal and equitable title (co-mingling)

Equity mitigated the law and did not create a distinction (eg of equity mitigating the law)

Entitled to recover if the maxim: come with clean hands was upheld (no reliance on the illegal contract – claim for joint ownership tainted by illegality)

Court applied the same rational as is used in legality in equity

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◦ Coulthard V Disco max Club: (Doctrine of Analogy,)case was statute bar but claimant relied on fiduciary duty. CL was time barred but not equity

Court applied Doctrine of Analogy (grounded on the same facts) which allowed them to treat Equity the same as common law

Doctrine allowed flexibility and equity was therefore subject to the same limitations as CL

◦ Seager v Copydex (Doctrine of analogy) P had no CL standing but had standing in equity. Case decided as being analogous to CL and thus a common law remedy granted.

◦ AG v Blake (DA) inadequate compensation for contract, equitable remedy applied, court exercising flexibility

DA firm example of the co-mingling of equity and the law, but does not prove fusion

3 Supremacy of Equity:

Standard of this supremacy set by the Earl of Oxford case where equity prevails should there be a conflict. (terror of the CL court being injunction)

Only one court and equity prevails in it (Walsh v Londsdale-Justice Fry)

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Walsh v Londsdale: maxim: equity regard as done what ought to be done

◦ Does not mean that an agreement for a lease is as good as a lease unless the equitable right can be enforced by specific performance (because it is impossible as in a land sale where the contentious item no longer exist); not accurate if the purchaser is bonafide without notice (meaning actual constructive)

◦ Because equity came to fulfill the law

Joseph v Lyons: The distinction between equity and the law, is abolish

◦ Carlton LJ: not so, court administers both of the laws

Illustrations:

◦ Time stipulations:

Before judicature acts, time was not of the essence for equity as they are with contractual relationships

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◦ CL- time was the essence of contract, breach meant rescission of the contract

◦ Equity-time was not essential, if injustice would not be incurred(equity fixed on doing justice)

◦ Effect of the judicature-time would be considered but not deem as essential primarily in the instances of WS2/P11. (Stickney v Keeble – effect of the JA – time is only not of the essence when it will render injustice because equity does not operate in a vacuum, it must do what the common law could not do).

Written lease not under seal – Walsh v Lonsdale◦ CL-determines the payment of rent on the basis of the lease◦ Equity-treats a written agreement as good as lease, which

give rise to a right of specific performance (p42/WB) (Foster v Reeves – no SP because action was brought in the wrong jurisdiction; Swain v Ayres- court did not give SP because tenant was in breach of the agreement – “come with clean hands)

Tutorial 6.2.13 – open discussion was held

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Limitations periods: Concealed fraud

◦ Before JA time from cause of action barred by 6 years

◦ CL: applies time from cause of action, thus if fraud is hidden for 6 years, claimant loses his right, CL test is mens rea being nothing short of fraudulent intention (Derry v Peek)

◦ Equity: applies from the time the fraud was discovered. Equity test is breach of duty (sanction attached) which falls short of deceit.

◦ Issue: given the JA which of the definition would apply

◦ Result: equity would apply (conflict) (Applegate v Moss – builder who build on defective foundation, time does not run until the fraud is discovered).

Liability of personal representative (PR) assets:

◦ CL: charges the PR for loss of assets and estate whether or not it is his fault

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◦ Equity deems the PR to be a gratuitous bailee and does not hold him responsible unless he is personally at fault.

◦ Effect of JA on these competing rules: equity being supreme replaced the CL rule completely (Job v Job – watchmaker who became bankrupt)

4 Common Mistake:

◦ Equity had the power to rescind a contract where that contract was valid at law for common mistake. (changed in Great Peace – no equitable jurisdiction for recession in common mistake)

5 Exceptions

◦ Equity and CL has no conflict here:

Practice – a matter of choice between law and equity:

JA: no new procedure, the old apply

Variance in procedure, court determines what is appropriate

Maxim of equity prevailing does not apply to procedures

Newbiggen by the Sea Gas Co v Armstrong:

Solicitor acted without Plaintiff authority and case was dismissed, but P was ordered to pay cost (Chancery) CL indicates that the solicitor must pay and not the P who did not give the authority. (Chancery adopt this – fairness) 7

Conflicting legal and equitable interest in property

◦ Equal equities the law prevails

◦ Priority of the rights of BP without notice – equitable interest preserved (Pilcher v Rawlins)

◦ BP without notice ranks first (further proof of equity following the law) (Joseph v Lyons: defendant had legal title of the stocks, P had EI, legal title gets first priority, cannot get SP where there are no goods).

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