Have Law and Equity Influenced each Other?

1 Table of Cases Bank of Boston Connecticut v European Grain and Shipping Ltd Central London Property Trust Ltd v High Trees House Ltd Cresswell v Potter (1978) 1 WLR 255 Cuckmere Brick Co Ltd v Mutual Finance Ltd Earl of Oxford’s Case (1615) 1 Rep Ch 1 Napier and Ettrick (Lord) v Hunter Tinsley v Milligan United Scientific Holdings v Burnley Borough Council Walsh v Lonsdale Table of Statutes Bills Supreme Court Act 1981 Supreme Court of Judicature Act 1873 (36 & 37 Vict C. 66) Supreme Court of Judicature Act 1875 (38 & 39 Vict C. 77) ‘‘Neither law nor equity is now stifled by its origin and the fact that both are administered by one Court has inevitably meant that each has borrowed from the other in furthering the harmonious development of the law as a whole’’

[1] In Order to critically evaluate the accuracy of the above statement and to enable an analysis of the relative strengths of the ‘dualism’ and ‘fusion’ debate, in order to form a cogent narrative it will be necessary to briefly explore both the definitions, history, distinctions and development of common law and equity. Firstly, whilst definitions of the ‘Common Law’ system differ it can be defined as the ‘general law’ which is common to the realm, and also the body of law which has evolved by judges from precedent.

[2] Moreover the definition of Equity in common parlance translates to fairness/justice (aequitas equitas). Although according to S Worthington, ‘[…] even the most experienced of lawyers finds it difficult to give a short, intelligible answer to the question ‘What is equity?’

[3] However, an eloquent definition was stated in Cresswell v Potter

[4] ‘The law which modifies the general common law rules where the general rules cause practical hardship in a particular case (restrains the unconscionable exercise of rights or powers at common law)’. Prior to the Norman Conquest in 1066 England had no functional ‘common law’ which was consistently applied to the whole of the realm, there existed only cursory oral rules and customs which were wide-ranging between different provinces,

[5] for example the ‘Jutes in the South having different laws to the Mercian’s’ along with informal gatherings and medieval Tests[6]. However, even post Norman Conquest the ‘Leges Henrici Primi (c.1118)’ documented fragmented legal codes and jurisdictions such as Mercian, Danelaw and Wessex law.

[7] During the following three centuries post Norman Conquest (1066) the priority became the establishment of a strong ‘Common law’ central to the realm mainly to safeguard ‘Royal revenues’[8], which led to Royal envoys participating in local courts, such as the (the curia regis) by the thirteenth century the Common Law courts of King’s Bench, the Court of Exchequer and the Court of Common Pleas were established.

[9] During the reign of Henry II who has been credited with principally generating the advancement of the common law[10] with the royal envoys ‘justiciae errantes (wandering justices)’[11]. However, the common law was not without faults as the writ system was technical, inflexible and compounded by the provisions of Oxford 1258 and the statute of Westminster led to injustices.[12] Nevertheless, by the Fourteenth Century those who felt aggrieved could appeal to the King’s conscience for a remedy, however the role was passed to the Lord Chancellor as ‘Keeper of the Kings conscience’ due to the volume of appeals, with decisions based randomly on ‘conscience’. This led to one of the historic criticisms of its application as arbitrary, as famously quoted by Jurist John Selden, ‘Equity varies with the length of the Chancellor’s foot’[13]. Over the next few century’s growing friction between equity and the common law courts increased, as the ‘Court of Chancery acted as a check upon the common law ensuring that their application did not lead to a manifest injustice’[14].This conflict dramatically reached its nexus in the Earl of Oxford’s Case[15] with the dispute being settled in 1616 by James I with the Court of Chancery gaining supremacy. Lord Ellesmere Stated, “men’s actions […] diverse and infinite that it is impossible to make any General law which will […] meet with every particular and not fail in some Circumstances.

The office of the Chancellor is to correct men’s consciences for fraud, breaches of trust, wrongs and oppressions[…] and to soften and mollify the extremity of the law.”[16] This gave rise to the equitable maxim ‘that where the law and equity conflict, equity prevails’[17] this principle was later given statutory authority under section 25[18] and re-enacted under section 49[19] after The three common law courts and the Court of Chancery were merged into a single Supreme Court, comprising of the High Court and the Court of Appeal. Under the Judicature Acts[20] allowing ‘The jurisdiction of judges in the new Supreme Court was ‘fused’, this reduced delays and expense of starting separate actions as now all judges were able to use the whole range of common law and equitable rules’[21]. There remains a considerably contentious debate between legal scholars that has thundered on for well over one hundred and thirty years, as to whether the common law and equity are truly fused, either on a substantive or procedural level, those who believe in the dualist ‘fusion fallacy’ doctrine and even those who conclude whether they should be fused. P.V Baker[22] states ‘that fusion […] there is no distinction […] between legal rights, remedies and thus cannot be supported’ this view is reinforced by J Martin[23] who states the ‘Supreme Court act clearly, envisaged both equity and common law would […] separate existence’ and that Lord Brandon[24] stated that ‘important procedures’ changed, although no third party rights were altered […] or were intended to be[25]. Although, controversially those who advocate ‘fusion’ suggest it is the ‘awarding of legal remedies for a breach of an equitable right’[26]. However, P. Mason in Harris v Digital Pulse[27] did in a dissenting opinion argue that it […] ‘exposes the error of restricting equity’s capacity to award compensation for infringement of a right recognised in the pre-Judicature Act era’ citing Viscount Haldane’s speech in Nocton v Lord Ashburton[28] Furthermore, Walter Ashburner argues[29] from a procedural dualist standpoint, that the judicature acts[30] only fused the administration of law by ‘unifying Common law and equity into one court system’, it did not fuse the content of the two doctrines. The principles of equity and the principles of law remained separate: of jurisdiction, he likened both equity and the common law to that of two streams which run side by side […] however ‘never mingling’ their waters. Moreover, Lord Diplock who has long been hailed as ‘the most forceful exponent of fusion […]’[31] argues in obiter[32] the fusion of common law and equity is more substantive and has already occurred with the ‘streams’ of equity and the common law […] long since mingled together’. In addition Lord Diplock went so far as to state that Ashburner’s metaphorical usage was both ‘mischievous and deceptive’[33]. Nevertheless, Meagher, Heydon and Leeming[34] who are amongst the strongest supporters of dualism. Maintain that the decision in the United Scientific[35] as not only ‘the low water mark of modern English jurisprudence’ and the conjecture that lord Diplock believing […] ‘the Statutes of Uses […] of Quia Emptores played no contemporary part in English property law.’[36] “The fusion fallacy involves the administration of a remedy, for example common law damages for breach of fiduciary duty, not previously available at law or in equity, or in the modification of principles in one branch of the jurisdiction by concepts that are imported from the other and thus are foreign, for example by holding that the existence of a duty in tort may be tested by asking whether the parties concerned are in fiduciary relationships”[37] However, there is seemingly an accord with Lord Diplock as Lord Denning M.R. who suggests a deeper fusion between equity and common law which would suggest that it has been fused for a considerable time. ‘When law and equity have been joined together for over seventy years, principles must be considered in the light of their combined effect’.[38] Furthermore, Peter Sparkes suggests, the ‘doctrine of Walsh v Lonsdale’[39]. ‘that an agreement for a lease is as good as a lease’. And cites Jessel MR, ‘equitable rule prevailing […] He appeared to espouse a true fusion’[40]. And went on to argue that varying attempts to ‘distort the decision and the old procedure’ in order to ‘make it fit’ with Ashburners procedural dualist standpoint, although in Sparkes opinion in reality it could ‘only be explained as an example of true fusion’[41]. It would on the face of it seem anomalous that a unified court with jurisdiction over both common law and equity would strictly preserve an historical distinction between them[42] and that it would suggest it would inevitably result in fusion[43] The ‘fusion of law and equity is often categorised as if they were fact’[44] albeit that the reforms brought about by the Judicature Acts have clearly fused their administration.

However, no new grounds of ‘action, remedy or defence have been created’[45] as the Judicature Act was intended to rid the law of unnecessary delay overlap and complication[46] Moreover, Andrew Burrows argues for more ‘fusion’ so “We do this at common law and we do the same at equity”[47] additionally taking account of Baker’s definition of ‘fusion’ ‘there is no distinction […] between legal rights, remedies […]’[48] this combined with David Hughes ‘arguments counter to the fusion’ of common law and equity such as ‘Courts lacking the power to fuse common law and equity’, and asserting that this would be exercising a ‘radical law reform brief’.[49] Remain ‘compelling as […] still deny the availability of a common law remedy for an equitable wrong’.[50] Likewise, Jill Martin suggests, that the Courts of England and Wales have not followed other Commonwealth jurisdictions who appear to support and encourage the concept that the judicature Acts have in some way ‘fused’ common law and equity substantively, such as is suggested in cases like United Scientific Holdings Ltd[51] and Cuckmere Brick Co Ltd[52] and have instead conversely reinforced the more orthodox view apparent from ‘mortgage cases’ and decisions of the ‘House of Lords’ such as Napier v Hunter[53] and Tinsley v Milligan[54] which contain ‘meticulous analyses of the separate common law and equitable origins and principles in areas such as subrogation and illegality’[55]. Consequently, in the context of the law in England and Wales and based on the in depth critical analysis of the ‘fusion v dualism’ debate the overall relative strength of the dualism argument is highly indicative that although there is administrative ‘fusion’, it is evident that common law and equity are still not ‘fused’ in the substantive sense therefore, even with a high degree of harmonisation there has been no actual synthesis between the common law and equity post judicature Acts, and although the Courts can and do apply both rules to common law and equity as aptly illustrated by the maxim, ‘Equity follows the law’ “only in cases when there is an important context disregarded or if the common law is used in an unconscionable way that equity interferes.”[56]. Furthermore, as to the accuracy of the statement above[57] Gary Watt elucidates quite succinctly that ‘nowadays this summary finds overall approval’[58] from most quarters due to harmonisation and evolution in both the common law and equity. Bibliography Books Alastair H and Hudson A,Equity and Trusts (Routledge Cavendish 2009) Arnold-Baker C,The Companion to British History, S.v. ‘English Law’ (Loncross Denholm Press 2008) Ashburner W,Ashburner’s Principles of Equity. (2nd edn, Butterworth 1933) Atkins S,Equity and Trusts (Routledge 2013) Baker P and Langan P,Snell’s Principles of Equity (29th edn, Sweet & Maxwell 1990) Baker PV,Snell’s Equity (23rd edn, Sweet & Maxwell , London 1990) Clement R and Abass A,Equity & Trusts, Text, Cases and Materials (2nd edn, Oxford University Press 2011) Equity and Trusts Law Directions, Fourth Edition, Gary Watt, 2014 Oxford University Press Equity and Trusts, Scott Atkins, 2013, Routledge Heydon JD, Gummow WMC and Austin RP,Cases and Materials on Equity and Trusts (4th edn, Butterworths 1993) Hudson A,Equity and Trusts (Routledge Cavendish 2012) Kelly D and Slapper G,The English Legal System (11th edn, Routledge 2010) Maitland F,Selected Historical Essays of F W Maitland: Chosen and Introduced by H M Cam (1957) 134 Martin E and Law J,A Dictionary of Law (Oxford University Press, USA 2006) Martin J and Hanbury,Modern Equity (Sweet & Maxwell 2009) McDonald I and Street A, Equity & Trusts Concentrate: Law Revision and Study Guide (Oxford University Press 2014) McDonald I and Street A,Equity & Trusts Concentrate: Law Revision and Study Guide (Oxford University Press, USA 2011) McGhee J,Snell’s Equity (Sweet & Maxwell) Meagher R and Heydon J,Meagher, Gummow and Lehane’s Equity, Doctrines, and Remedies (Butterworths LexisNexis 2002) Meagher R, Heydon JD and Leeming M,Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (4th edn, 2002) 2-105 Plucknett TF,A Concise History Of The Common Law (Liberty Fund 1956) Simpson AWB,‘the Survival of the Common Law System; Then and Now’ (Sweet & Maxwell 1974) Stenton LDM,English Justice Between the Norman Conquest and the Great Charter, 1066-1215 (1st edn, Allen & Unwin 1964) Thurston,A Practitioner’s Guide to Trusts (Bloomsbury Professional 2006) Todd and Watt’s Cases & Materials on Equity and Trusts, 9thEdition, 2013, Oxford University Press, Gary Watt Toomer GJ,John Selden: A Life in Scholarship (Oxford, OUP 2009) Watt G, Equity and Trusts Law Directions (Oxford University Press) Watt G,Todd and Watt’s Cases and Materials on Equity and Trusts (Oxford University Press, USA 2007) Wilson S,Todd &; Wilson’s Textbook on Trusts (Oxford University Press 2013) Worthington S,Equity (2nd edn, OUP 2003) Journal Articles Baker P., ‘Future of Equity’, (1977) 93 Law Quarterly Review 529 – 540 <https://www.heinonline.org.ergo.glam.ac.uk/HOL/Index?index=journals/lqr&collection=journals> accessed 12 November 2014 Burns F, ‘The Fusion Fallacy Revisited’ (1993) 5 Bond Law Review Burrows A, ‘We Do This At Common Law But That In Equity’ (2002) 22 Oxford Journal of Legal Studies Chesterman S, ‘Beyond Fusion Fallacy: The Transformation of Equity and Derrida’s “The Force of Law”’ (1997) 24 JOURNAL OF LAW AND SOCIElY 350 Hughes DA, ‘A CLASSIFICATION OF FUSION AFTER HARRIS V DIGITAL PULSE’ 29(2) UNSW Law Journal 38 James E, ‘A “Fusion Fallacy” Fallacy?’ (2003) 119 Law Quarterly Review 375-380 Jho R, ‘The “Fusion Fallacy”between Equity and Common Law: A Criticle Analysis’ (2014) 56 NSWLR https://racheljho.files.wordpress.com/2014/04/the-fusion-fallacy-between-equity-and-common-law.pdf Martin J, ‘Fusion, Fallacy and Confusion; a Comparative Study’ [1994] Conveyancer and Property Lawyer Sparkes P, ‘WALSH V LONSDALE THE NON-FUSION FALLACY’ (1988) 8 Oxford Journal of Legal Studies Tilbury M, ‘Fallacy or Furphy: Fusion in a Judicature World’ (2003) 26 (2) U.N.S.W. Law Journal 357 Websites ‘Judges and the Law’ <https://www.open.edu/openlearn/society/the-law/judges-and-the-law/content-section-2.1> accessed 12 November 2014 ‘Legislation.gov.uk’<https://www.legislation.gov.uk/ukpga/1981/54/section/49> accessed 12 November 2014 ‘TheNationalArchives’ https://www.nationalarchives.gov.uk/pathways/citizenship/citizen_subject/law.htm> accessed 11 November 2014 Cases Bank of Boston Connecticut v European Grain and Shipping Ltd Central London Property Trust Ltd v High Trees House Ltd Cresswell v Potter (1978) 1 WLR 255 Cuckmere Brick Co Ltd v Mutual Finance Ltd Earl of Oxford’s Case (1615) 1 Rep Ch 1 Napier and Ettrick (Lord) v Hunter Tinsley v Milligan United Scientific Holdings v Burnley Borough Council Walsh v Lonsdale Statutes Supreme Court Act 1981 Supreme Court of Judicature Act 1873 (36 & 37 Vict C. 66) Supreme Court of Judicature Act 1875 (38 & 39 Vict C. 77) 1

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[1] (per Somer J, Elders Pastoral Ltd v Bank of New Zealand [1989] 2 NZLR 180 at 193).

[2] Elizabeth Martin and Jonathan Law, A Dictionary of Law (Oxford University Press, USA 2006).

[3] Sarah Worthington, Equity (OUP 2003).

[4] [1978] 1WLR 255) [5]Theodore FT Plucknett, A Concise History Of The Common Law (Liberty Fund 1956).

[6] ‘Judges and the Law’ <https://www.open.edu/openlearn/society/the-law/judges-and-the-law/content-section-2.1> accessed 12 November 2014. [7]‘The National Archives’ <https://www.nationalarchives.gov.uk/pathways/citizenship/citizen_subject/law.htm> accessed 11 November 2014.

11] Martin (n 2) 109.

[9] Ibid 109. [10] Lady Doris Mary Stenton, English Justice Between the Norman Conquest and the Great Charter, 1066-1215 (1st edn, Allen & Unwin 1964) [11] Martin (n 2) 109. [12] David Kelly and Gary Slapper, The English Legal System (11th edn, Routledge 2010) [13]GJ Toomer, John Selden: A Life in Scholarship (Oxford, OUP 2009). [14] Iain McDonald and Anne Street, Equity & Trusts Concentrate: Law Revision and Study Guide (Oxford University Press 2014). [15] (1615) 1 Rep Ch 1 [16] Lord Ellesmere, in the Earl of Oxfords Case [1615] 1 Rep Ch 1 [17] McDonald (n 13) 9. [18] Supreme Court of Judicature Act 1873 (36 & 37 Vict c. 66) [19] Supreme Court Act 1981 [20] Supreme Court of Judicature Act 1873 (36 & 37 Vict c. 66) and the Supreme Court of Judicature Act 1875 (38 & 39 Vict c. 77) [21] McDonald (n 13) 9. [22] P. Baker, ‘Future of Equity’, (1977) 93 Law Quarterly Review 529 – 540 <https://www.heinonline.org.ergo.glam.ac.uk/HOL/Index?index=journals/lqr&collection=journals> accessed 12 November 2014. [23] Martin (n 22) 1. [24] ibid [25] Bank of Boston Connecticut v European Grain and Shipping Ltd [1989] A.C. 1056 at p. 1109. [26] Rachel Jho, ‘The “Fusion Fallacy”between Equity and Common Law: A Criticle Analysis’ (2014) 56 NSWLR <https://racheljho.files.wordpress.com/2014/04/the-fusion-fallacy-between-equity-and-common-law.pdf>. [27] Pty Ltd [2003] NSWCA 10 [28] [1914] AC 932 [29] W Ashburner, Ashburner’s Principles of Equity. (2nd edn, Butterworth 1933). [30] Supreme Court of Judicature Act 1873 (36 & 37 Vict c. 66) and the Supreme Court of Judicature Act 1875 (38 & 39 Vict c. 77). [31] JD Heydon, WMC Gummow and RP Austin, Cases and Materials on Equity and Trusts (4th edn, Butterworths 1993) 27. [32] United Scientific Holdings v Burnley Borough Council AC 904 924-925. [33] ibid [34] Roderick Meagher, John Dyson Heydon and Mark Leeming, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (4th edn, 2002) 2-105. [35] R Meagher and J Heydon, Meagher, Gummow and Lehane’s Equity, Doctrines, and Remedies (Butterworths LexisNexis 2002). [36] ibid [37] Ibid (n 34) [38] Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. [39] (1882) 21 ch D 9. [40] PETER SPARKES, ‘WALSH V LONSDALE THE NON-FUSION FALLACY’ (1988) 8 Oxford Journal of Legal Studies 350. [41] ibid [42] AWB Simpson, ‘the Survival of the Common Law System; Then and Now’ (Sweet & Maxwell 1974). [43] Ibid (n 26) [44] Michael Tilbury, ‘Fallacy or Furphy: Fusion in a Judicature World’ (2003) 26 (2) U.N.S.W. Law Journal 357, 26 U.N.S.W.L.J. 357 2003. [45] Martin (n 22) 1. [46] ibid (n 13) 9. [47] A Burrows, ‘We Do This At Common Law But That In Equity’ (2002) 22 Oxford Journal of Legal Studies. [48] Baker (n 22) [49] Meagher (n 35) 2-320. [50] David A Hughes, ‘A CLASSIFICATION OF FUSION AFTER HARRIS V DIGITAL PULSE’ 29(2) UNSW Law Journal 38. [51] United Scientific Holdings v Burnley Borough Council AC 904 924-925. [52] Cuckmere Brick Co. Ltd. v. Mutual Finance Ltd [1978] A.C. 904. [53] Napier and Ettrick (Lord) v. Hunter [1993] 2 W.L.R. 42. [54] Tinsley v. Milligan [1993] 3 All E.R. 65. [55] Jill Martin, ‘Fusion, Fallacy and Confusion; a Comparative Study’ [1994] Conveyancer and Property Lawyer. [56] P Baker and P Langan, Snell’s Principles of Equity (29th edn, Sweet & Maxwell 1990). [57] Ibid (n 1) [58] Gary Watt, Equity and Trusts Law Directions (Oxford University Press) 10.

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