Introduction to Equity – History

and overview
Equity S2 2018 – Wk1 Cls 1
Julian Laurens

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Welcome to Equity (& Trusts) : )

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 What is equity? Definitions
1. The separate body of law, developed in the Court of
Chancery, which supplements, corrects, and controls the
rules of common law.

2. A right recognised by a court of equity. The term denotes

any one or more of the following: the right to obtain an
injunction or other equitable relief; an equitable interest in
property; an exception to the indefeasibility of title acquired
by a proprietor of Torrens Title land upon registration,
usually called a ‘personal equity’(Garofano v Reliance
Finance Corp Ltd (1992) NSW Conv R ¶55-640); a ‘floating
equity’; and a ‘mere equity’ (Latec Investments Ltd v Hotel
Terrigal Pty Ltd (in liq) (1965) 113 CLR 265). In a sense, all
equities are personal, but some may have proprietary effect:
Mercantile Mutual Life Insurance Co Ltd v Gosper (1991) 25
NSWLR 32.
* Definition from Concise Australian Legal Dictionary (LexisNexis, 5th edition , 2015)
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 What is equity? Definitions

“Equity is a system of doctrines

and principles that operate
parallel to the common law,
and modifies and augments
it”.*
And see BDDV p. 3 for a Macquarie Dictionarydefinition.

*(L Robinson, ‘Quick Reference Card: Equity’, LexisNexis Sept 2011)

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 What is Equity?
As distinct from the development of precedent
at Common Law, The Lord Chancellor’s decisions
were not reported until after 1557 and only in
any real substantial way after 1660 – thus in the
absence of clear structures and precedent
Equity was seen by some to be rather random,
abstract and perhaps arbitrary (it was of course
an exercise of the Royal prerogative) – thus it
was said that what was Equity varied ‘with the
length of the Chancellors foot’. 6
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• What is fairness? Who settles questions of fairness in a
democracy? The Legislators?
• What is ‘equitable’ is still referenced to some standard
or benchmark – it is not ‘made up’.
• Note issues of subjectivity in a judgment. Equity and its
application when the common law is deficient? The
trouble of the ‘universality’ of law in its application.
– What about the role of individualised justice?
• Equity can correct or supplement the law but not replace
it.

But note that when common law and equity is in conflict,

equity prevails: Earl of Oxfords Case (1615) 1 Ch Rep1; 21
ER 485 and then in statute, Judicature Act 1873 (Imp), s
25(11)
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 History of Equity - UK
The development of Equity as an INSTITUTION
from the 14th/15th Century. This is the model
we have in Australia, received from the UK
(Blackstone commentaries).

The essence of this is that a special court is

created separate from common law courts
(institutional equity), yet able to hear
‘appeals’ from that court (for want of a better
term) (see p. 5 in BV)
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The common law writ system was very rigid and not able
to deal with all matters. If your fact scenario did not fit
one of the prescribed ‘writs’ which you received from the
Chancery, you were in trouble – you had no access to the
Common law courts.

• Writ was basically permission by the King to use his

courts to pursue your action.

• Problems in the Common law becoming apparent by

the 14th Century.

• Note ‘Forms of Action’ (heavy focus on real property at

the start)
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11th Century Writ – would be given to
the defendant

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• What to do? Appeal via petition to
the King - who as time went on
referred these petitions to the
Chancellor (head of the Chancery).
What was interesting here was the
way the Chancery went about
getting evidence vs the CL courts –
procedural differences – summons
and questionnaires etc. (p 6 BV at
[1.9]).
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• Key area where the Chancery developed
in the 15th Century – ‘Uses’ (Trust) – Lots
of issues where a person was meant to
hold the land for another and actually
held it for themselves.

• Trust law developed from the Chancellors

orders aimed at protecting the interests
of beneficiaries (see [1.3.1b] in BDDV)
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 Disputes and Reform
• Issues with a judgment in a common law court?
• Could go to equity - Equity would issue a
‘common injunction’ – essentially meant that a
judgment received in a common law court could
not be enforced!
• CL judges a bit annoyed – it came to a head in the
Earl of Oxford’s Case (1615) (much excite) (see
[1.3.2b] BDDV and p 7 [1.13] BV) – King James 1
said equity can set aside a CL judgment for
‘conscience’ – doesn’t have to be for error. In any
dispute then equity prevails over CL.
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King James 1 - I am the King (till 1625)

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• By the end of the 18th Century many of todays
equitable principles and doctrines had been
established.
• By the 19th century there were delays in
hearing equity matters – these delays with
equity etc were noted in the literature of the
day, for example by Charles Dickens in Bleak
House (see [1.3.3a] BDDV) – Equity had
however become very important to the land
owning classes.
• Fun fact: the fictional case in Bleak House Jarndyce v
Jarndyce (a case about an inheritance) is used as an
example of the problems of delay etc and the impact
this has on ‘justice’ in civil proceedings as well 
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The need for change: legislative response

Judicature Act 1873 (Imp)

• See page 9 BV
• Abolished ‘common injunction’
• New court divisions
• Equities discovery and interlocutory
procedures extended to the CL
• KEY – see s. 25(11) – retained the
principle that in conflict between CL and
equity, equity will prevail.
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Note the ‘fusion fallacy’. CL and Equity are not ‘fused’ – they retain
their individual identities – it is just that now CL and Equity matters can
be dealt with by the same court. It is an administrative/efficiency
change.

http://www.ucprforms.justice.nsw.gov.au/

Essentially there is one form – you commence an action via

completing a statement of claim:
http://www.ucprforms.justice.nsw.gov.au/Documents/PDF/Form%203
B_v6.pdf and filing it.
In the SOC you focus on the matter (not just the remedy) as defining
what you want. You then also outline what remedy you are after (you
MUST do this). Together (matter and remedy) identifies the issue and
this invokes the jurisdiction of the relevant ‘procedure/process’.
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 History of Equity – Equity in NSW
• Blackstone, Commentaries on the Laws of
England (1765).
• English law received in the colonies – though only
to the extent applicable in their situation etc.
• In any event other States followed the UK path.
NSW however didn’t, keeping separate courts of
equity, with separate procedures:
– This went on in NSW till 1970/1972!!! Almost 100 yrs
after the UK 1873 Act. :/
– Supreme Court Act 1970 (NSW) Pt 4; Law Reform (Law
and Equity) Act 1972 (NSW) s 5.
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 Equity and Modern Law
Two considerations:
1. The subject matter of equity can only be
determined by reference to legal history, not
logically deducted from general propositions!
(i.e the development of trust law in the peculiar
context of the UK feudal/land ownership
system).
2. The separate body of equitable principles means
that there is a ‘dual character’ to much of
Australian private law!!
1. You MUST be aware of both jurisdictions when
advising etc.

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 Grounds for equitable intervention –
when and how does it apply?
1. Contract issues
1. Equitable doctrine of ESTOPPEL – prevents the
enforcement of some promises and can also enforce
some promises the CL does not recognise.
2. Setting aside of contracts – undue influence,
unconscionability.
3. Rectification of terms to reflect agreement
4. Assigning the benefit of the performance of
contractual obligations
5. Regulating relief to a plaintiff because of a breach by
a defendant
6. Enforcement of provisions – specific performance

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2. Property Issues
1. TRUSTS
2. Enforcement of equitable title and interests
including through estoppel
3. Assignment of property interests
4. Tracing rules
3. Civil Wrongs
1. Breach of fiduciary obligation
2. Breach of confidence
4. Civil procedure
1. Regulation of civil litigation – Contribution;
Subrogation; Marshalling
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 The Maxims of Equity
(see case extract of Corin and Patton at [1.4a] in BDDV)
These are not ‘RULES’ 
a) He who seeks equity must do equity
b) He who comes to equity must come with clean
hands
c) Equity looks to intent, rather than to form
d) Equity treats as done that which ought to be
done
e) Equity acts in personam
f) Equity follows the law
g) Equity does not assist a volunteer
h) Delay defeats an equity.
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 Remedies – Brief Intro
• A key question for us as lawyers is to always
consider ‘what do our clients want’? We need to
be guided by that in our pleadings and so forth.
– How can they get what they want? Can they get it? Is
there another option? What are the options?
(remember this for your assessment and exams!!)
• Equity is exciting and important because it offers
a variety of remedies one or two of which may
benefit our clients.
• Under common law a plaintiff is only entitled to
damages – but there are occasions when that is
not appropriate etc: specific performance may be
more desirable - equity provides some CHOICE.
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• Note that equitable remedies are always
discretionary – they are based around notions
of individualised justice.
• The court of equity will also always consider
the position of BOTH parties before it – indeed
the conduct of the plaintiff may in fact act as a
bar to them receiving remedy because of
‘postponing conduct’ for example (particularly
where there are ‘competing equities’). It is
always about what is ‘fair’ in those
circumstances.
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• In Equity there is a distinction between the
exclusive jurisdiction and the auxiliary
jurisdiction of equity
• Exclusive jurisdiction relates to matters that
only the Chancery could deal with prior to the
judicature legislation (not the CL courts):
– Examples include the enforcement of trusts and
fiduciary obligations, the recession of contracts
on equitable grounds including misrepresentation
and unconscionable conduct.
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• The auxiliary jurisdiction is invoked where
there has been a tort or a breach of contract
and Common law damages are INADEQUATE
as a remedy.
– Examples of remedies here include specific
performance and injunctions to prevent
something happening (don’t confuse it with the
old ‘common injunction’ which were abolished in
1873).

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So what does this all mean for our client? A ‘hierarchy
of remedies’?
• In the exclusive jurisdiction you are only able to get
an equitable remedy – no common law damages.
• In the auxiliary jurisdiction the court will determine
if damages are adequate before deciding upon an
equitable remedy.
So – it is vital that you work out what the legal issue
our client has and associate it within the correct
JURISDICTION you wish to invoke – thus you can better
determine the remedy available.
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