3.2 Problem 2
Common Law was praised however as time has gone on peoples circumstances have changed, it was noticed that common law was rigid and as a result was unable to satisfy the growing needs of the people. It was known that the writs were very technical documents. This caused a problem because the wording in the writs could be mistaken or incorrect which meant that a person would lose their case if their writs were written wrongly, this lead to injustice in some of the cases.
3.3 Problem 3
The final problem of Common Law was related to ‘remedy’ or ‘solution’. Common Law only gave one type of remedy and this was damages. This meant that if something was damaged or hurt then the complainant would receive compensation, this meant that they would be given money to make up for the damage that was caused. But.....sadly enough this remedy was not always suitable in some instances, for example, if somebody built a house in your garden then compensation wouldn't be able to bring your garden back, therefore this remedy is not entirely suitable.
4.0 Development of Equity
Equity was first introduced to the legal system by the Court of Chancery. It has been described as ‘a gloss on common law.’ It was introduced to fill in gaps of the legal system and make justice fairer.
Many people became unhappy when they couldn't receive justice in the Common Law courts, therefore they would petition the King asking him for a solution. The king was known as the foundation of justice because all law originally came from him. The king then referred petitions to the Lord Chancellor. He was a priest and lawyer who was known as the keeper of the kings conscience. The cases that were referred to him were decided on the basis of fairness, doing what was right in the case rather than the rules told him to do. To create fairness he introduced new remedies e.g. injunctions, rescission, rectification and specific performance. After, equity became a popular alternative for them people who could not receive justice in the common law courts. This led to the development of a Court of Chancery, this would hear cases requiring equitable solutions.
Common law has changed throughout the years, however it still fails to comply with all legal aspects of today's population it is for this reason that equity was introduced, equity now helps the justice system work more efficiently
Nowadays equity is used in many situations, but is mainly used in mortgage and trust problems. The Court of Chancery succeeded in stopping unconscionable writs through the injunction, by which the common law claimant was restrained from continuing his action.
5.0 Conflicts between common law and equity
The two systems that were operating (common law and equity) severely overlapped. The relevance of equity today is highlighted in the promissory estoppels. Lord Denning first suggested it in Central London Property v High Tree House LTD, 1947.
Since this case it has been decided that it would be unfair in some situations to allow one party to rely on the strict terms of a contract because they had led the other party to believe that they will not do so. An equitable principle is used to stop one party using a contract enforcing his rights when he has given his word that he will not. Therefore one case would have two outcomes. A conflict occurred The Earl of Oxfords case 1615, which decided that if equity and the common law were in conflict, equity would prevail (codified in the Judicature Act 1873 and currently contained in the Supreme Court Act 1981). The reason he made this was to correct mistakes of the common law and could not do this if it was not able to change it.
6.0 Problems with Equity
6.1 Problem 1
Equity still wasn’t perfect. It was not bound by the Stare Decisis. Stare Decisis is a Latin term used in common law to express the notion that prior courts decisions must be recognised as precedents, according to case law. This term meant ‘let the decision stand’. This was a problem because different people had different decisions and this made it difficult when coming to a final decision. Each successive chancellor applied their own definition of fair which caused uncertainty in whether a case will be won or not. In order to create some certainty within the system equitable maxims were created which outlined what would be fair and unfair.
6.2 Problem 2
For a party to claim both damages and an equitable solution then they had to bring two cases one in the common law courts and one in the court of chancery. This is unpopular because you have to apply both principles for common law and court of chancery in one case which lead to different outcomes. Therefore, there was one court system with one set of staff. However legal principles remained separate. This still remains today. If you bring a case to court today then you must notify the court whether you want an equitable or common law solution.
7.0 Relevance of Equity today
The most important impact of equity is the remedies that it created; these are both traditional and new. Equity introduced mortgages and trusts which is relevance of equity today. Equitable remedies are discretionary so this means that a judge must believe that it is fair and suitable.
7.1 Injunctions
Injunctions are either prohibitory (an order not to do something-the majority of injunctions) mandatory (an order to undo a wrong) or interlocutory (granted whilst case is proceeding). In the case Kannaway v Thompson (1980) the court granted an injunction restricting the times which power boats could be raced on lakes and in the case Warner Brothers v Nelson (1937) an injunction was issued that ordered Bette Davis not to make a film with another film company as that would have been a breach on her contract with Warner Brothers.
In S.37 of the Supreme Court Act 1981 it states that the High Court may grant an injunction in all cases where it appears ‘just and convenient to do so’. Therefore the use of injunctions is not restricted to one particular area and can be used in any circumstances as long as it is just and convenient. Injunctions are used for domestic violence as a protection device for abused partners, and can also be used to prevent excessive noise or smoke or other nuisances.
7.2 Specific Performance
This is an order in contract directing a party to complete what they are contracted to do. It is ideal for land since every piece of land is in some way unique, but it will probably not be granted for contracts for ordinary services, since the inferior common law remedy of damages would suffice. Equitable damages may be lieu, or as well as specific performance; these damages are calculated in exactly the same way as common law damages (Johnson v Agnew 1979) which are available as of right; hence it is only worth seeking equitable damages where there is no cause of action in common law, e.g. for anticipatory breach. It would not be granted if the decree would require constant supervision by the court.
7.3 Rescission
Rescission is a restorative remedy. Rescission need not be done by the court - if one says that one refuses to be bound by a contract, then one has repudiated, and rescission can follow. The reason that one might ask the court for rescission is that rescission without cause would be breach of contract. Furthermore the courts help may be required in enforcement. Rescission is an alternative for damages, not an addition to it. The equitable remedy of an insurance can be awarded as compensation for expenses necessarily incurred as a result of contractual obligations; e.g. Whittington v Seale-Hayne 1900, an innocent misrepresentation was made, therefore rescission was allowed, but damages were refused for the indirect losses as a result of the misrepresentation-the contract only required the payment of rents, rates and conducting repairs-it did not require for instance for stocking of the farm, so removal costs could not be covered, and nor did it cover any other damages. There is now an exception to this under the Misrepresentation Act 1967, which provides that damages can be awarded for innocent misrepresentation, but only if the courts feel it is equitable.
7.4 Rectification
Rectification is the correction of an incorrect contract. Any written instrument may be rectified including wills (Administration of Justice Act 1982). Pre-contractual mistake is not enough e.g. Frederick E. Rose London Ltd v William H. Pim Jnr & Co Ltd 1953, Rose asked the defendants that feveroles were, and was told they were horse beans. They agreed a contract for horse beans, and this is what the written contract recorded, but it turned out that there were three types of horse beans and they had been sold the somewhat inferior feves. This misunderstanding was not a ground for rectification.
8.0 Relevance of Equity Today
One of the most important impacts of equity is the remedies its created, both of these are traditional and new. Mortgages and trusts are said to have an equitable interest in the property. If we did not have mortgages these days then nobody would be able to buy a house as their own which means you would have to wait later on in life to buy one. Equitable remedies are discretionary therefore a judge must believe that an equitable remedy is suitable and fair. Common law damages will always be given if the case is won. In the twentieth century new discretionary remedies were created by High Court judges, these are products of unique cases which can be used as precedent in the future. The equitable maxim ‘equity will not suffer a wrong without a remedy’ is essential to the relevance of equity today. It helps judges when they cannot utilise case law, it allows the law to adapt to changing situations.
8.1 Equitable Estoppels
Lord Denning created this from the High Street Case (1947). Equitable Estoppels prevent the law from making unfair solutions.
8.2 Deserted Wife Equity
This was made so that if a husband deserts a wife and children then the wife would have an interest in the house even if the property was not hers. This was incorporated into the ‘Matrimonial Homes Act’ (1967)
8.3 Freezing Injunction
A specific type of injunction is the freezer order, it is an ex-party interlocutory injunction designed to prevent the removal of assets from the courts jurisdiction, or dissipation there within (Z Ltd v A 1982). Passports may also be confiscated (Bayer AG v Winter 1986)
8.4 Anton Pillar Search Order
Another expansion to equity is the Anton Pillar order. This orders the defendant to allow the plaintiff to enter his or her premises and take away documents or materials that may be relevant to the case. This is vulnerable in the case of equity as it prevents the defendants destroying what may be very valuable evidence.
This is highlighted in the case of Anton Pillars KG v Manufacturing Process Ltd 1976. Even though many remedies have been through equity the Courts are prepared to extend these remedies. The principle that they are all discretionary still remains
9.0 Conclusion
Equity has already seen many changes and new areas of law have been developed, however equity and its laws are constantly reviewed and new areas are still being developed. Extensions of equity are constantly being brought before the attention of the House of Lords, enabling equity to continue to grow.
