`Assess the relevance of equity:

Equity was a system of law that was introduced to fill gaps in

the Common Law system, which was the first legal system
established in the United Kingdom. It is often argued that
Equity was only relevant as far as filling gaps in Common Law
was concerned. However, some believe that Equity has
developed over time and still continues to have a great
influence on the law. To be able to conclude whether Equity is
still important, it is important to understand how the system of
Equity came into existence.
Common Law began after the Norman Conquest when William
the conqueror came to United Kingdom (UK). The King
appointed judges to go to different parts of the UK to resolve
people’s disputes. These judges gave their decisions based on
the general and local customs of that area. While returning to
London, these judges would discuss their decisions, the best
out of them were chosen and uniformly applied by all, making
law ‘common’ throughout the UK. However, this system of
common law was very rigid. Only those cases were recgonised
which had a precedent; if there was a minor error in
formalities, common law would strictly enforce the error,
overlooking the true intention of the parties and the only
remedy provided was damages or monetary compensation,
which was not what people always wanted. People affected by
the harshness of the Common Law system appealed to the
King, who passed on the responsibility of resolving people’s
problems to Lord Chancellor. Lord Chancellor, known for being
a fair and just man, established his own system called Equity
through which he addressed to people’s concerns. This system
was based entirely on ‘fairness’. Lord Chancellor established an
independent court for Equity, called Court of Chancery in which
its judges would follow equity’s rules, provide additional
equitable remedies and apply equity’s concept. These will be
discussed below to determine whether Equity continues to play
an important role today.
The rules of equity are also known as maxims. These were the
guidelines, set out by Lord Chancellor, for his judges to follow
when deciding cases in Equity. The first rule of equity states
‘Equity looks to the intent and not the form’. This rule
addresses the basic concern of people under common law who
were made to rely on any mistake they made in the formalities.
Equity states that if an error has been made in the formalities,
equity will overlook the error and decide the cases based on
the true intention of the parties as that is what actually
matters. This happened in the case of Berry v Berry where,
even though the gift deed was incorrectly altered by a contract,
it was considered altered since the party truly intended to
change it. The second maxim states “He who comes to equity
must come with clean hands”. Since equity is a system based
entirely on fairness, equity has clearly stated that it will not
assist someone who himself has done something wrong.
Equity’s commitment to the rule is shown in the case of D & C
Builders Ltd v Rees where Mr. and Mrs. Rees were not given
the remedy of equitable estoppel because they themselves had
taken advantage of the financial difficulty of the builder. The
third maxim states “Delay defeats equity”. If a claim has to be
brought in equity, it must be done right after the wrong has
been done. If the claim is delayed, equity will provide no
assistance. This maxim shows that equity will only decide cases
based on concrete facts and not on probabilities or chances of a
wrong being committed. When the time duration between the
wrongful act and the claim is too long, there are chances of
occurrence of other events in between that might reduce the
probabilities of the defendant being at fault, which is why the
assistance was provided to the claimant in Leaf v International
Galleries. The fourth maxim, which is the cornerstone of equity,
is ‘equity will not suffer a wrong to be without a remedy’. This
means that equity will go out of the way to create new
remedies for claimants, unlike common law. It will not let
anyone leave the court of equity without any help.
Equity has introduced a set out remedies other than the
remedy of damages that was provided in the common law
courts. The first of these is Injunctions. Injunctions are orders
passed by the court to make it compulsory for the defendant to
do something (Mandatory injunction) or prohibits the
defendant from doing something (Prohibitory injunction). In the
case of Kennaway v Thompson the defendants were stopped
from racing boats on the lake and in Nelson v Warner Brothers,
Bette Davis was prevented from signing a contract with some
other production company. Apart from these, the court may
grant an Interlocutory injunction also which is an order that is
passed by the court before a decision is given. However, this is
granted in those rare circumstances where there is a risk of an
irreparable harm that cannot be compensated for through
payment of damages. Apart from this, equity has also
introduced the remedy of Specific performance in which, if a
party does not perform on the terms of the contract, the court
make them do so. However, this does not apply to personal
services. The court also grants the remedy of Rescission
whereby, if the parties do not want to continue with their
contractual relationship, the contract can be ended and both
parties can be put back into their pre-contractual positions.
Equity also provides the remedy of Rectification. Under this, if
an error has been made in the document, the court will correct
the error to reflect the true intention of the parties instead of
making the parties rely on the error. Other than these, equity
has also introduced orders like Freezing Orders (previously
known as Mareva Injunction) and Search Orders (previously
known as Anton Piller Order). Under the Freezing Order, the
court asks the banks to freeze the bank account of the
defendant so that he does not move his assets and declare
himself bankrupt to avoid payment of damages. The Search
Order makes it compulsory for the defendant to allow the
claimant to enter his house and take away all evidence relevant
to the case.
These remedies and maxims have played a great role in
smoothing out the rough edges of common law in those days
and continue to have relevance in today’s times. Most of the
remedies can still be applied in different cases. In employment
law, injunctions can be used to prevent workers from leaking
out the company’s secrets. Apart from that, Freezing Order can
be applied where a person tries to commit a fraud. The
remedies of Specific Performance and Rescission can be applied
in contract law to enforce contracts or end them. Apart from
these remedies, equity has continued to develop new concepts
which have played an important role over the years and still
continue to be useful in today’s time. The concept of mortgages
was introduced by equity which makes it possible for people to
take loans today to start businesses or buy houses. Trusts were
also introduced by Equity which make it possible to transfer
property to another without the need to make a direct transfer.
Equity also gave the concept of ‘Deserted Wife’s Equity’
through which wives and children have gained protection.
Under this concept, if the husband does not wish to live with
his wife and children, he cannot take the house from them. In
fact, he will have to leave the house and give the rights to the
family to live in the house even if he has complete ownership of
it. The concept of Equitable or Promissory Estoppel was
introduced by Lord Denning in the case of Central London
Property v High Trees. This concept ensures that once a
promise is made by a party and the other party, relying on the
promise, has suffered a detriment or loss, the promisor cannot
go back on his word. This makes it possible to enforce promises
today which could easily be broken earlier, causing the other
party great loss.
Based on the discussion above, it can be said that Equity
continues to have importance. It provides help in many areas of
law even today. The role of equity is strengthened by the fact
that the Earl of Exford’s decision was re stated in s.25
Judicature Act 1873 which continues to have effect. It states
that if there is a conflict between the decision of Equity and
Common Law, Equity will prevail.