Nature of Equity
Equity is a body of principles and procedures which developed side by side with the common law and statute law. Early common law was rigid and could produce arbitrary and unjust results in many cases. Equity originated with the Courts of Chancery, which sought to mitigate the harshness of the early common law.
As a court of conscience, equity was not bound by the rigours of the common law. The Courts of equity were synonymous with conscience, fairness and even-handed dealing. In its formative years, it emphasised common sense, flexibility and fairness. Equity was and largely remains flexible, discretionary and responsive to circumstances than the common law.
The early Chancellors had ecclesiastical backgrounds and were trained canon lawyers. They dispensed justice in accordance with principles of conscience and morality. Some of the earlier Chancellors considered themselves to be keepers of the King’s conscience. Some early Chancellors took the view that the law should follow the law of God.
Equity modified and supplemented the common law. It rivalled the common law but did not seek to destroy it. Equity contributed new remedies to English law. Where common law remedies were unsuitable, equity supplemented them with more flexible remedies. This is seen clearly in the remedies of specific performance and injunction, which are available where damages would be an inadequate remedy.
Remedy introduced new procedures, including that of discovery. It enforced new rights and developed new institutions, in particular, that of the trust.
The maxims of equity are epitomes or short statements of key principles. See separately the chapter on the maxims of equity.
Some Equitable Elements in Early Common Law
The King was the font of justice. He had a residuary duty and jurisdiction to ensure justice was done. Petitions might be made directly to the king when justice had been denied, or when the requisite remedies did not exist. This jurisdiction was exercised by writ. The King’s Council heard petitions for relief in the early period. The Council included the Chancellor and other royal judges.
Some aspects of the early common law displayed quasi- equitable principles. A writ was available to reopen a common law judgment under equitable principles. Certain royal writs which were more flexible than the general common law writs. In the 13th and 14th centuries, equitable jurisdiction was exercised by the itinerant common law courts and justices of the general Eyre. Bills in Eyre petitioned for justice in matters covered by common law writs.
Equitable principles were also found expression in other parts of the common law. An early type of specific performance existed by way of a common law action. Writs of prohibition were analogous to an injunction. There was a common law writ was equivalent to the equitable remedy of injunction.
Bills and petitions which were characteristic of the courts of Chancery, originated in petitions and requests to the King in Council, for intervention in administrative matters. The subpoena which is an important equitable remedy procedure had its origin in common law actions. It appears that seigniorial and manorial courts may have exercised equitable type jurisdiction by analogy with the common law jurisdiction.
The chancellors’ role as king’s secretary involved drawing up documents for which the royal seal was affixed to authenticate them. Writs were issued from Chancery. Accordingly, the chancellor was directly involved in the formation of writs.
During the 13th and 14th centuries, the common law courts developed and became independent of the King and government. By the 13th century, the Chancery had become a separate department and developed from the King’s Council and from the common law courts. The Chancellor, however, was linked to both. He sat on the Council. He issued writs on the common law side and had some limited common law jurisdiction.
The common law jurisdiction of the chancellor was referred to as his Latin jurisdiction and the equitable jurisdiction as his English jurisdiction. Common law court records were in Latin and those concerning equitable jurisdiction were in English.
The common law became particularly rigid in the 14th and 15th centuries. Procedural technicality predominated and injustice was more likely.
Where a claimant could not obtain an appropriate writ, he could petition the king for a remedy. Urgently petitions were presented to the King’s Council. The Chancellor heard petitions and a decree was issued in the name of the Council. By the late 15th century, petitions came to be presented directly to the Chancery.
Equity was said to be based on reason, right and justice and conscience. Chancellors examined the defendant personally. It was exercised personally against the defendant and not against his assets as such. Where the common law produced a result contrary to the law of God, the Chancellor assumed the right to prevent its operation, in order to prevent hardship. The jurisdiction was discretionary in nature.
The common law courts derived their authority directly from the King. The Chancellor’s powers derived from the King’s residuary jurisdiction, to do what was right. This facilitated the application of some equitable principles in the common law court. However, the courts of Chancery developed independently from the King’s courts, which administered the common law.
The Chancellor’s initial duties were to act as King’s secretary and chaplain and keeper of the royal seal. The Chancellor’s judicial role originated in the early medieval period. In its early period, the Chancellor dealt with petitions to the King. Most early Chancellors were clerics.
The practice of appointing ecclesiastics ended with Cardinal Wolsey who was succeeded by Sir Thomas More, a common lawyer. After that, very few almost all chancellors were laymen.During the Tudor and early Stuart period, the common law and equity were engaged in a struggle. Ultimately equity prevailed.
Equitable remedies developed considerably in the 18th century, including the taking of accounts. By this stage, equity was a standalone system in itself and it began to crystallise into formal rules and principles. By the 19th century, the procedures and principles of equity had become more rigid. Legislation was passed to reform the Chancery procedure. The Judicature Acts fused equity and law. In the case of conflict between the rules of the common law and equity, the legislation provided that the rules of equity were to prevail.
It is assumed in modern times, that no new equitable interests or doctrines will be created. The existing equitable principles may be developed and refined, but modern courts do not regard themselves as entitled to invent new principles of equity, on the basis of conscience, justice or fairness. Such a role would be regarded widely, as usurping the role of the legislature.
Proceedings in Chancery were commenced by presenting a bill. A bill is a petition which is originally drawn up in Anglo-French. The petition was commenced by a bill in writing. The defendant was obliged to attend court personally and be examined. He was obliged to do so under the writ of subpoena. A defendant who fails to comply with the writ might be arrested and his assets might be sequestered.
By the 15th century, written depositions were permitted. The Chancellor undertook an inquisitorial investigation in order the facts of the matter. Parties were examined on their own, without a jury. A decree was issued, declaring the position or restraining a person from a particular course of action or otherwise. The Chancellor gave remedies in relation to disputes where there was no appropriate common law remedy.
In some cases, the common law rules of evidence were rigid and unforgiving. An error in pleading could destroy an otherwise just the case. In contrast, the approach of Chancery was to look at substance over form. The common law remedy of damages might not be an adequate or sufficient remedy in many cases. Chancery intervened with more flexible remedies, such as orders for specific performance.
At common law, a contract required a sealed document or performance of the obligation. The Chancellor was concerned with the good faith nature of the underlying obligation and was prepared to enforce certain agreements without common law formalities. The courts of equity gave relief in relation to fraud and unconscionable dealings. It might prevent the operation of a common law judgment, where one party had engaged in equitable fraud.
A bill signed by the claimant’s counsel commenced proceedings. The defendant could demur to the bill, i.e. state that even if the matters claimed were true, they did not warrant intervention. He could submit a plea, which involved questioning jurisdiction. He could submit an answer which was equivalent to a defence. A subpoena ordered the defendant to attend. Interrogations were administered on the defendant and witnesses. Witnesses were examined both orally and in writing.
Conflict of Law and Equity
By the end of the 15th century, the rivalry between the common law and equitable courts intensified. Cardinal Wolsey, Henry VIII’s Chancellor created new courts of equity. The courts granted injunctions prohibiting a claimant taking an action at law, which heightened conflict with the common law courts. The effect of the Chancery orders was to reduce and impair the effectiveness of the common law courts and the amount of legal business available to it.
The conflict between courts of equity and common law courts culminated in a dispute between Lord Chief Justice Coke and Lord Chancellor Ellesmere. In a number of cases, Lord Justice Coke refused to give a hearing to counsel who had participated in equitable proceedings against judgments of common law courts. The Lord Chancellor appealed to King James I, who referred the matter to his Attorney General Bacon and a group of lawyers. They decided in favour of Chancery.
Development in Modern Era
In the 16th and 17th Century, the scope of equitable relief was extended. The equity of redemption and provision against penalties evolved. Relief was granted against fraud and mistake in an increasing number of cases.
The Chancery was associated with the prerogative rule out the Stuarts. The Chancellors Ellesmere and Bacon supported the royal prerogative. Following the English civil wars, the Commonwealth Protectorate demanded the abolition of the Chancery. Ultimately this did not occur and following the Restoration, the proposals were abandoned.
By the latter part of the 17th century, the discretionary elements of the Chancery jurisdiction were increasingly exercised on the basis of precedent, rather than discretion. The jurisprudence became reasoned. Chancery law reports cases were published and the role of certainty was emphasised.
By the 18th Century, a mass of equitable rules and principles had developed and equity became to become a distinct system of rules and principles. It focused increasingly on certain areas including, trusts, property rights, the administration of the assets of deceased persons and the management of the assets and welfare of infants, and persons of unsound mind. Lord Hardwicke emphasised that the courts of equity were bound by precedent.
By 19th century precedent played a greater role and the discretionary moral and conscience were eclipsed. The Chancery judges in the early part of the 19th century were conservative. During their tenure, equity became notorious for delays. Numerous judgments came to establish the modern principles of equity. Precedent became firmly on the courts of Chancery. Ultimately the Judicature Acts fused law and equity.
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