5Norman Reorganisation SovereigntyAbsolute beneficial titleReception of lawsConqueringSettling;CessessionFeudalism
6Henry II – the Father of the Common law Curia RegisGeneral Eyre and AssizesAssize of Clarendon 1166 – 12 freemen from the hundred and 4 from the townHenry, Richard Coeur-de-Lion and John Lackland
7A’Beckett’s LegacyThe Church CourtsThe benefit of theclergy
8Edward Longshanks Hammer of the Scots Parliament begins 1275The use of statute as opposed to ordinanceNisi PriusQuia Emptores
9Curia Regis – embryonic courts Court of Exchequer – revenueCourt of Common Pleas – civil actionsCourt of King’s bench – crimeRemaining Council functions split intoKing’s Council later Concilium Regis and then Privy Council
10The Writ System Bureacracy Organisation of wrongs Remedies Popularity RecordingStare DecisisCommon law
11What’s the common law meant to do? Persons & PropertyQuick, efficient, fair and effectiveReal property – real actions- real reliefSeisinRemedies – return the seisin, pay monetary damagesContract and tort
13The Office of the Lord Chancellor Around since Norman timesKeeper of the King’s ConscienceCleric and Keeper of the Great SealMember of Lords, Judge and Church
14Chancery as a Court Around the 15th century Function to repair the failings of Common lawPrinciples of Christian fairness/conscienceMaxims of equitySubstance not formDoes not assist a volunteerEquity follows the lawClean handsDiscretion and the Chancellor’s footThe two streams – law and equity
15What 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
16The relationship between CL and Eq James VI of ScotlandThe rise of protestantismAbsolutism of sovereign – Divine Right of Kings or King-in-parliament?Bacon & Ellesmere: Earl of Oxford’s case
17Earl of Oxford’s caseThe 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.
18The legalisation of equity The Civil War – equity nearly destroyedLord Nottingham ( )– father of equityLord Eldon – ( ) modern rulesPrecedent and fixationAppointment of VCPoor administrationInfamous delay – record 16 years and still interlocutory
1919th Century reforms Bentham and the ‘dog law’ Judicature Acts 1870s – 1970sThe two streams in one courtWindeyer J in Felton v Mulligan (1971) 124 CLR 367 at 392;  ALR 33 at 46Fusion fallaciesSalt 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.
20Fusion?United Scientiﬁc Holdings Ltd v Burnley Borough Council  AC 904 at 924;  2 All ER 62 at 68, where Lord Diplock said:If by ‘rules of equity’ is meant that body of substantive and adjectival law that, prior to 1875, was administered by the Court of Chancery but not by courts of common law, to speak of the rules of equity as being part of the law of England in 1977 is about as meaningful as to speak similarly of the Statute of Uses or of Quia Emptores. Historically all three have in their time played an important part in the development of the corpus juris into what it is today; but to perpetuate the dichotomy between rules of equity and rules of common law which it was a major purpose of the Supreme Court of Judicature Act 1873 to do away with, is, in my view, conducive of erroneous conclusions as to the ways in which the law of England has developed in the last hundred years. Your Lordships have been referred to [Ashburner’s] vivid phrase ... [on] the effect of the Supreme Court of Judicature Act … My Lords, by 1977 this metaphor has in my view become both mischievous and deceptive … If Professor Ashburner’s ﬂuvual metaphor is to be retained at all, the waters of the conﬂuent streams of law and equity have surely mingled now.
21Walsh v Lonsdale (1882) 21 Ch D 9It was held that a person who enters into possession of land under a speciﬁcally enforceable contract for a lease is regarded, by a court having jurisdiction to enforce the contract, as being in the same position, as between itself and the other party to the contract, as if the lease had actually been grantedRemedy of distress granted
22Chan v Cresdon Pty Ltd (1989) 168 CLR 242 Cresdon agreed in writing to lease land to Sarcourt.The agreement contained the terms of the lease as an annexure.The lease was duly executed but never registered.Sarcourt defaulted under the lease and Cresdon took action against Chan as guarantor of the unregistered lease.Cresdon’s action against Chan was stated as being one taken on the guarantee ‘under this lease’.Cresdon’s action was unsuccessful.The court held that as there was no registered lease there was no enforceable guarantee. Cresdon’s alternative claim was based upon the rule in Walsh v Lonsdale.
23Chan v Cresdon Pty Ltd (1989) 168 CLR 242 This claim also was unsuccessful. In coming to its conclusion the court ruled that, although the rule in Walsh v Lonsdale meant that an agreement to lease gave rise to an equitable lease, it did not create a legal interest. A consequence of this is that the equitable lessee will be defeated by a bona ﬁde purchaser of the legal estate who acquires the legal estate for valuable consideration and without notice of the equitable lease
24Chan v Cresdon Pty Ltd (1989) 168 CLR 242 The court also conﬁrmed that the operation of the rule depended upon the availability of speciﬁc performance of the agreement to lease.In the circumstances of the case, two facts raised doubts as to the availability of speciﬁc performance. First, Cresdon had in the meantime mortgaged the property. Second, the lease had come to an end before the expiration of the term due to Sarcourt’s breach.
25Aquaculture Corp v New Zealand Green Mussel Co  3 NZLR 299 Cooke P, in the context of a conﬁdential information case, said:For all purposes now material, equity and common law are mingled or merged. The practicality of the matter is that in the circumstances of the dealings between the parties the law imposes a duty of conﬁdence. For its breach a full range of remedies should be available as appropriate, no matter whether they originated in common law, equity or statute.
26Day v Mead  2 NZLR 443Mead had been Day's solicitor for 25 years.He was also a director and shareholder of a newly-formed company, Pacific Mills Ltd.Acting on Mead's advice, Day purchased 20,000 shares, at $1 per share, in Pacific Mills, knowing that Mead was a shareholder and that his firm's nominee company had lent money to Pacific Mills.Day actively participated in the management of the companyDay subscribed for a further 80,000 shares in the company at a cost of $80,000.Company went into receivership, and Day lost both investments.Day sued Mead for his loss plus interest, claiming breach of fiduciary duty.Was his contribution to the loss relevant?
27Day v Mead  2 NZLR 443 Cooke P stated: Whether or not there are reported cases in which compensation for breach of a fiduciary obligation has been assessed on the footing that the plaintiff should accept some share of the responsibility, there appears to be no solid reason for denying jurisdiction to follow that obviously just course, especially now that law and equity have mingled or are interacting. It is an opportunity for equity to show that it has not petrified and to live up to the spirit of its maxims
28G R Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80 Roderick P Meagher JA, as a member of the Court of Appeal in New South Wales, opined that the views of Lord Diplock in United Scientiﬁc Holdings v Burnley Borough Council were ‘so obviously erroneous as to be risible’
29Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 Breach of confidence caseCan you get exemplary damages?Mason P, at 335–9, argued that an award of exemplary damages in cases of equitable wrongs was justiﬁed. His Honour suggested that the rationale for exemplary damages in tort law could be applied by analogy to equitable wrongs, and characterised this approach as an example of ‘fusion by analogy’ with the law of torts.
30Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 However, the majority of the Court of Appeal disagreed. Spigelman CJ, at 307–10, stressed that if ‘fusion by analogy’ was to be used, then the appropriate analogy was with contract law, where exemplary damages are not available.Heydon JA, in a lengthy and detailed analysis of the relevant authorities and arguments, rejected the proposition that exemplary damages should be available for breaches of equitable obligations. His Honour, at 402, also suggested that such a view, if based upon the view that the fusion of the courts allowed the new single court to award common law remedies for breaches of equitable obligations, amounted to a ‘crude fusion fallacy’
31Areas of conflict Mortgagee’s power of sale Damages in equity (especially in breach of confidence and breach of fiduciary duty)Causation in breach of fiduciary duty
32MaximsSpry has written the following in relation to the maxims: [T]he maxims of equity are of signiﬁcance, for they reﬂect the ethical quality of the body of principles that has tended not so much to the formation of ﬁxed and immutable rules, as rather to a determination of the conscionability or justice of the behaviour of the parties according to recognised moral principles. This ethical quality remains, and its presence explains to a large extent the adoption by courts of equity of broad general principles that may be applied with ﬂexibility to new situations as they arise. I C F Spry, The Principles of Equitable Remedies, Speciﬁc Performance, Injunctions, Rectiﬁcation and Equitable Damages, 7th ed, Lawbook Co, Sydney, 2007, p 6.
33MaximsKirby J in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 271; 185 ALR 1 at 49: ‘It is a commonplace that equity is a living force and that it responds to new situations. It must do so in ways that are consistent with equitable principles. If it were to fail to respond, it would atrophy.’
34MaximsIn Corin v Patton (1990) 169 CLR 540 at 557; 92 ALR 1 at 12, in relation to the maxim ‘equity will not assist a volunteer’, Mason CJ and McHugh J said:Like other maxims of equity, it is not a speciﬁc rule or principle of law. It is a summary of a broad theme which underlies equitable concepts and principles. Its precise scope is necessarily ill-deﬁned and somewhat uncertain.
35Equity will not suffer a wrong to be without a remedy A common approach of judges is exempliﬁed in the statement in In re Diplock’s Estate; Diplock v Wintle  Ch 465 at 481–2;  2 All ER 318 at 326, where the English Court of Appeal said:[I]f the claim in equity exists, it must be shown to have an ancestry founded in history and in the practice and precedents of the courts administering equity jurisdiction. It is not sufﬁcient that because we may think that the ‘justice’ of the present case requires it, we should invent such a jurisdiction for the ﬁrst time.
36Equity will not suffer a wrong to be without a remedy Cowcher v Cowcher  1 All ER 943 at 948, Bagnall J said:So in the ﬁeld of equity the length of the Chancellor’s foot has been measured or is capable of measurement. This does not mean that equity is past childbearing; simply that its progeny must be legitimate — by precedent out of principle. It is well that this should be so; otherwise no lawyer could safely advise on his client’s title and every quarrel would lead to a law suit.
37Equity will not suffer a wrong to be without a remedy Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151–2, 155; 236 ALR 209 at 252–3, 255–6, made it clear that trial judges and intermediate appellate courts should not depart from decisions of intermediate appellate courts in other Australian jurisdictions, nor radically change existing law unless such decisions or existing law were plainly wrong. The High Court made it clear that such changes to the law were properly within the domain of the High Court only
38Equity follows the lawEquity recognises common law rights, estates, interests and titles and does not say that such common law interests are not valid. Thus, in Leech v Schweder (1873) 9 LR Ch App 463 at 475, Mellish LJ said that ‘where a right existed at law, and a person came only into equity because the Court of Equity had a more convenient remedy than a Court of Law … there equity followed the law, and the person entitled to the right had no greater right in equity than at law’
39Equity follows the lawIn DKLR Holdings Co (No 2) Pty Ltd v Commissioner of Stamp Duties  1 NSWLR 510 at 519, Hope JA said:Where the trustee is the owner in fee simple, the right of the beneﬁciary although annexed to the land, is a right to compel the legal owner to hold and use the rights which the law gives him in accordance with the obligations which equity has imposed upon him. The trustee, in such a case, has at law all the rights of the absolute owner in fee simple, but he is not free to use those rights for his own beneﬁt in the way he could if no trust existed. Equitable obligations require him to use them in some particular way for the beneﬁt of other persons.
40Equity follows the law Time stipulations inn contract s 25(7) of the Judicature Act 1873 (UK) resolved the conﬂict between the common law and equity approaches to the effect of a contractual time stipulation by giving statutory effect to the equitable rules, effectively transforming a time stipulation from an essential term of a contract to an intermediate term of a contract: Zaccardi v Caunt  NSWCA 202 at .Consideration in common law vs consideration in equityCo-ownership when there is a 50:50 contribution – Delehunt v Carmody
41Where the equities are equal, the ﬁrst in time shall prevail, and, Where there is equal equity, the law shall prevailRemember these?
42One who seeks equity must do equity Plaintiffs in equity must fulﬁl their legal and equitable obligations before seeking a remedy. The maxim represent’s equity’s version of the biblical ‘golden rule’ set out in the Book of Matthew (7:12): ‘do unto others as you would be done by’. The maxim emphasises that the Court of Chancery originated as a ‘court of conscience’.
43One who seeks equity must do equity In Hanson v Keating (1844) 67 ER 537 at 538–9, Wigram V-C said the following in relation to this maxim:It decides in the abstract that the court giving the plaintiff the relief to which he is entitled will do so only upon the terms of his submitting to give the defendant such corresponding rights (if any) as he also may be entitled to in respect of the subject matter of the suit; what these rights are must be determined aliunde by strict rules of law, and not by any arbitrary determination of the court. The rule, in short, merely raises the question of what those terms (if any) should be.
44One who seeks equity must do equity In Hanson v Keating (1844) 67 ER 537 at 538–9, Wigram V-C said the following in relation to this maxim:It decides in the abstract that the court giving the plaintiff the relief to which he is entitled will do so only upon the terms of his submitting to give the defendant such corresponding rights (if any) as he also may be entitled to in respect of the subject matter of the suit; what these rights are must be determined aliunde by strict rules of law, and not by any arbitrary determination of the court. The rule, in short, merely raises the question of what those terms (if any) should be.
45One who comes to equity must come with clean hands This maxim is closely related to and descends from the maxim just discussed: FAI Insurances Ltd v Pioneer Concrete Services Ltd  15 NSWLR 552It requires a plaintiff in equity not to be guilty of some improper conduct, or else relief will be deniedThis maxim confirms that equity is not solely concerned with preventing unconscientious conduct by a defendant, but also requires conscientious behaviour by a plaintiff.
46Delay defeats equityIn seeking equitable relief a plaintiff must act promptly and diligently: Smith v Clay (1767) 27 ER 419 at 420. Equity will not allow defendants to remain for too long in a position of not knowing whether equitable relief will be ordered against them because it would be unconscientious to do so.LachesAcquiescence
47Equality is equity Idea of proportionate equality Co-ownership Resulting trustsAlso, equity will generally, but not always, execute a trust power of appointment equally among the objects of the power if the donee of the power has failed to exercise the power: McPhail v Doulton  AC 424
48Equity will not assist a volunteer In Colman v Sarrel (1789) 30 ER 225 at 227, Lord Chancellor Thurlow said that a plaintiff seeking equitable relief has to have ‘a valuable or at least meritorious consideration’. This requirement is expressed in the maxim that ‘equity will not assist a volunteer’, a volunteer being a person who has not given valuable consideration. The maxim does not require that the consideration be paid or executed: Reef & Rainforest Travel Pty Ltd v Commissioner of Stamp Duties  QCA 249 at .
49Equity will not assist a volunteer The rationale for this maxim is that it would not be unconscientious for equity to decline equitable assistance to a plaintiff who is a volunteer, whereas it would be so if he or she had provided valuable consideration: Redman v Permanent Trustee Co of New South Wales Ltd (1916) 22 CLR 84 at 96. Thus, it is the presence of valuable consideration that ‘will attract the intervention of equity’: Director of Public Prosecutions for Victoria v Le (2007) 232 CLR 562 at 575; 240 ALR 204 at 215. However, in Conlan v Registrar of Titles (2001) 24 WAR 299 at 338, Owen J suggested that this rationale was ‘a little strange given that the common law would (and will) accept something that is entirely inadequate or lacking in actual value as being “good” consideration’.
50Equity will not assist a volunteer The maxim is primarily associated with ‘the rule that a voluntary covenant is not enforceable in equity’: Corin v Patton (1990) 169 CLR 540 at 557Valuable considerationIn The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 225 FLR 1 at 741, Owen J said:The notion of valuable consideration usually requires finding some economic worth as compared with something that is purely nominal, trivial or colourable … Valuable consideration is more than the nominal consideration that would be sufficient to support a common law contract.
51Equity will not assist a volunteer Maxim doesn’t apply to gifts under Milroy v LordIn Morris v Hanley  NSWSC 957 at , Young J said that ‘[w]hen one looks behind the maxim one can see that the real truth is that equity rarely helps a volunteer’.This stems from the fact that the maxim’s ‘precise scope is necessarily ill-deﬁned and somewhat uncertain’ and ‘subject to certain clearly established exceptions’: Corin v Patton at CLR 557; ALR 12.
52Equity looks to the intent rather than the form In Parkin v Thorold (1852) 51 ER 698 at 701, Lord Romilly MR said:Courts of Equity make a distinction in all cases between that which is a matter of substance and that which is a matter of form; and if it ﬁnd that by insisting on the form, the substance will be defeated, it holds it to be inequitable to allow a person to insist on such form, and thereby defeat the substance.
53Equity looks to the intent rather than the form Part performanceExpress trustsRectification
54Equity looks on that as done which ought to be done In Frederick v Frederick (1721) 24 ER 582 at 583, Lord Chancellor Macclesﬁeld said that ‘where one for valuable consideration agrees to do a thing, such executory contract is to be taken as done; and … the man who made the agreement shall not be in a better case, than if he had fairly and honestly performed what he agreed to’
55Equity acts in personam Earl of Oxford’s Case (1615) 21 ER 485 at 487 (see 1.34), where Lord Ellesmere said that equity could restrain a plaintiff at common law from enforcing a judgment of that court ‘not for any error or Defect in the judgment, but for the hard Conscience of the Party’.Extra territoriality
56Equity acts in personam Oz-US Film Productions Pty Ltd v Heath  NSWSC 967 at , Young J explained this development as follows:A court of equity basically exercises only in personam jurisdiction. That is, it makes orders against people who are present in the jurisdiction or who have submitted to the jurisdiction. The in personam jurisdiction may, in proper cases, be exercised where the defendant has property in the jurisdiction over which the Court can enforce its order. In recent times, this jurisdiction has been further developed by the presumption that a defendant is considered to have property within the jurisdiction unless the evidence shows otherwise.