Remembering Equity and its Role in Property Relationships

1. Remembering Equity and its Role in Property Relationships Associate Professor Cameron Stewart Division of Law

2. The Blind Men and the Elephant • John Godfrey Saxe

3. The Anglo-Saxon Invasions c500AD

4. The Battle of Hastings 1066

5. Sovereignty Absolute beneficial title Reception of laws Conquering Settling; Cessession Feudalism Norman Reorganisation

6. Curia Regis General Eyre and Assizes Assize of Clarendon 1166 – 12 freemen from the hundred and 4 from the town Henry, Richard Coeur-de-Lion and John Lackland Henry II – the Father of the Common law

7. The Church Courts The benefit of the clergy A’Beckett’s Legacy

8. Parliament begins 1275 The use of statute as opposed to ordinance Nisi Prius Quia Emptores Edward Longshanks Hammer of the Scots

9. Curia Regis – embryonic courts • Court of Exchequer – revenue • Court of Common Pleas – civil actions • Court of King’s bench – crime • Remaining Council functions split into King’s Council later Concilium Regis and then Privy Council

10. The Writ System • Bureacracy • Organisation of wrongs • Remedies • Popularity • Recording • Stare Decisis • Common law

11. What’s the common law meant to do? • Persons & Property • Quick, efficient, fair and effective • Real property – real actions- real relief • Seisin • Remedies – return the seisin, pay monetary damages • Contract and tort

12. What goes wrong?

13. Around since Norman times Keeper of the King’s Conscience Cleric and Keeper of the Great Seal Member of Lords, Judge and Church The Office of the Lord Chancellor

14. Chancery as a Court • Around the 15th century • Function to repair the failings of Common law • Principles of Christian fairness/conscience • Maxims of equity • Substance not form • Does not assist a volunteer • Equity follows the law • Clean hands • Discretion and the Chancellor’s foot • The two streams – law and equity

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

16. James VI of Scotland The rise of protestantism Absolutism of sovereign – Divine Right of Kings or King-in-parliament? Bacon & Ellesmere: Earl of Oxford’s case The relationship between CL and Eq

17. Earl of Oxford’s case • The Office of the Chancellor is to correct Men’s 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.

18. The legalisation of equity • The Civil War – equity nearly destroyed • Lord Nottingham (1673-82)– father of equity • Lord Eldon – (1801-27) modern rules • Precedent and fixation • Appointment of VC • Poor administration • Infamous delay – record 16 years and still interlocutory

19. 19th Century reforms • Bentham and the ‘dog law’ • 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 • Fusion fallacies • 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.

20. Property in CL • Universalized, reified, fetishized – the materialization of the common law • Formality • Creation • Transfer • Rights recognised in contract and tort – breach of contract, trespass, negligence • Remedies for breach of property rights – damages • CL makes orders about the property not the people

21. Property in Eq • Substance • Conscience • Power • Responsibility – lunacy, infants, married woman • Trust and confidence • 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 • Remedies – injunctions, specific performance, constructive trusts, personal orders • Equity makes orders about the people not the property

22. Property in Eq • Equitable property or interest (equitable fee simple, mortgages, covenants etc) • Personal Equities (Gill v Gill) • Mere Equities (Latec)

23. Case study 1: When contracts go bad • A (vendor) exchanges contracts with B (purchaser) • A gets a better offer from C (he knows about B’s offer) and completes the sale to C before B knows • Common law approach? Breach and damages – no property held by B • Equitable approach: breach and specific performance • But what about the property interests?

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)

25. Henry and the purse strings Taxation in Tudor England – feudal tenures Primogeniture Devising land by will The legal remainder rules Case Study 2: Fat Henry and the problem of trusts

26. The use A --------------------------B --------------------C (Landowner) (feoffee to use ) (cestui que use) Legal estate Beneficial estate CL Equitable

27. The Statute of Uses 1535 • Collapse the use • Springing uses • The use on the use • Equity creates property where there was none before……

28. Case study 2: Part performance and the equitable ‘impersonation’ • A Lease for a factory – an agreement to create a deed • Or a mortgage created by deposit of title deeds • Or a promise to give a life interest if cared for in dotage…

29. The requirements for writing 23BAssurances of land to be by deed • No assurance of land shall be valid to pass an interest at law unless made by deed. 23CInstruments required to be in writing • 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 person’s agent thereunto lawfully authorised in writing, or by will, or by operation of law, ….

30. The requirements for writing 54AContracts for sale etc of land to be in writing • 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

31. Part performance • Equity looks to substance not form • Was there an 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? • If yes to all then equity creates an interest which is an equitable impersonation or copy of the common law interest being claimed