Evaluate the development of the covenant in equity. To what extent has this concept become useful in modern society?

The word ‘equity’ means ‘fairness’ or ‘balance’ in its wider sense, but its legal meaning is the rules developed to mitigate the severity of the common law.

The common law was decided through a writ system, halted by the 1258 Provisions of Oxford, which prevented any new writs from being created. This rendered common law ineffective and archaic. It could be said that equity took advantage of this rigid system, taking on the role previously performed by the common law, creating new writs with its new flexibility.

In contrast to the common law, which is supposed to have existed from time immemorial and is subject to statutory amendment, Equity is comprised of principles laid down by the Kings Chancellors and those who have exercised that jurisdiction since.

“…it must not be forgotten that the rules of Courts of Equity are not, like the rules of the Common Law, supposed to have been established from time immemorial. It is perfectly well known that they have been established from time to time – altered, improved and refined from time to time. In many cases we know the names of the Chancellors who invented them. No doubt they were invented for the purpose of securing the better administration of justice, but they were still invented.

Equity was developed by the Court of Chancery in parallel with the common law designed to complement it, providing remedies for situations that were unavailable at law thereby adding a dimension of flexibility and justice that was sometimes lacking because of the common law’s rigidity.

Equity can be described as;

“…that body of principles developed by the Court of Chancery prior to 1873 as since modified by courts administering that jurisdiction.”

Equity developed in the 10th and 11th centuries when William the Conqueror began to give Crown Land away to his followers and supporters (Feudal Lords), meaning that land was now held under feudal tenures. In return William expected unquestioning loyalty from his Lords and for them to provide him with services – namely mercenaries – when he needed them. The new owners of the land in turn gave small areas of their new estates away to secure the services required by William. In effect, William was renting his land out in return for instant armies should he need them.

However, there was no provision for any sort of conveyancing system under feudal tenancies and the land would pass automatically to the heir – the eldest son or eldest daughter if there were no sons. This meant that it was also impossible to make a will of land held under a feudal title and as such only one member of the Feudal Lord’s family could benefit from his death. Second and third sons often went into the clergy and female heirs would often ‘auction’ off their marriage, as husbands automatically became the owners of their wife’s property during their lifetime.

This meant, increasingly that feudal tenures moved closer and closer to the crown, until eventually the King was the only person interested in maintaining feudal tenancies. This led feudal Lords to develop feoffments to uses. By this system feudal tenants were able to create beneficial interests in land and leave land in trust as well as creating future interests in land. The holder of land under the feudal title was known as ‘cestui que use’ or the beneficiary.

As a result the Crown lost revenue and feudal lords benefited. Henry VIII was the first monarch to successfully challenge the lords and in 1535 the Statute of Uses was passed. This statute did not seek to abolish trusts, it more clearly defined their uses.

As equity developed so too did the use of land. Land was becoming more and more a marketable commercial commodity and this began leading to the modern trust. Dissolution with the feudal system meant that people were turning to trade to not only preserve their assets, but also obtain them in the first place. This transition from land to industrial wealth led investments becoming more widely used. Bonds shares and mortgages were interchangeable, fluid means of transferring wealth, land was not. Trustees began operation at managerial level, trading against one another in their clients best interests. As such a ...