Equity, Conscience, And Unjust Enrichment - Essay Example

Equity, Conscience, And Unjust Enrichment The main thrust of the argument for integrating the systems of equity and common law derives from the common sense position that coherently integrating the two branches will ensure the success of the modern common law legal system.1 One view is that the systems are fused for most purposes, and have been so since the Judicature Acts 1873-75. This legislation established a unified Supreme Court of Judicature, effectively fusing the administration of equity and common law. The need for ongoing creativity by equity was recognised after the Judicature Acts 1873-75 came into force: I intentionally say modern rules, because 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.… No doubt they were invented for the purpose of securing the better administration of justice, but still they were invented....The doctrines are progressive, refined and improved; and if we want to know what the rules of equity are, we must look, of course, rather to the more modern than the more ancient cases:2 Re Hallett's Estate [1880] 13 Ch D 696 per Jessel MR Another early case after the Judicature Acts 1873–1875 Acts was Walsh v Lonsdale [1882]3 where Sir George Jessel MR said …there are not two estates as there were formerly…. There is only one court, and the equity rules prevail in it. The contention that both branches of law are fused for practical purposes is more recent. Despite the fact that the primacy of equity was reaffirmed in the Supreme Court Act 19814 s 49 (1), (2), Lord Diplock took the view that: …the waters of the confluent streams of law and equity have surely mingled now.5 Lord Browne-Wilkinson said in Tinsley v Milligan [1994]6 that English law was now a single law which was made up of legal and equitable interests, and a person owning either type of estate had a right of property amounting to a right in rem not merely a right in personam. This is consistent with Lord Goff’s view in Napier and Ettrick (Lord] v Hunter [1993]7: No doubt our task nowadays is to see the two strands of authority, at law and in equity, moulded into a coherent whole. However this did not prevent equity developing new correctives and devices to meet new circumstances. Lord Denning was a proponent of the view that law and equity had fused for both administrative and practical purposes. He seemed to interpret this to mean on the one hand, that all remedies were available regardless of the origin of the cause of action.8 On the other hand he continued to recognise equity’s ability to create new remedies and recognise rights, through such concepts as the ‘new model constructive trust’: Equity is not past the age of child bearing. One of her latest progeny is a constructive trust of a new model.9 Subsequent cases have taken the view that equity must be respond to the need for certainty in the law. As Bagnall J said in Cowcher v Cowcher [1972]10: This does not mean that equity is past childbearing; simply that its progeny must be legitimate — by precedent out of principle. It is well that this should be so; otherwise no lawyer could safely advise on his client’s title and every quarrel would lead to a law-suit’. In this sense as equity has developed it can be argued that the rules of precedent, principles, pragmatism, and policy have taken priority partially for the sake of clarity and certainty, but also because there is adequate scope within substantive law to meet novel situations. For example in rejecting Professor Birk’s11 argument that resulting trusts should be extended to give Claimants a proprietary interest whenever a Claimant transferred value to a Defendant under a mistake or subject to a condition12 Lord Browne-Wilkinson concluded: If adopted, Professor Birks’ wider concepts would give rise to all the practical consequences and injustice to which I have referred. I do not think it right to make an unprincipled alteration to the law of property (ie the law of trusts) so as to produce in the law of unjust enrichment the injustices to third parties…and the consequential commercial uncertainty which any extension of proprietary interest in personal property is bound to produce. 13 In a majority decision the House of Lords in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996]14 demonstrated that the ‘differences between common law … and equitable rights and remedies cannot be ignored merely by the invocation of the language of restitution and unjust enrichment.’15 In that case the Bank’s contention that their action was based in equity was rejected since Parliament had made it clear that such actions fell within the common law.16 In the commonwealth the courts have unequivocally argued that both branches have fused for both administrative and practical purposes. In one case the New Zealand Appeal Court said: For all purposes now material, equity and common law are mingled or merged. The practicality of the matter is that in the circumstances of the dealings between the parties the law imposes a duty of confidence. For its breach a full range of remedies should be available as appropriate, no matter whether they originated in common law, equity or statute.17 The Canadian courts have also followed this approach holding that the common law principle of remoteness of damage could be applicable to an equitable claim for damages for a breach of a fiduciary duty, with the caveat that trusts, equitable estates and their consequent equitable remedies were not included.18 Whilst Claimants may benefit from this broad sweep approach to remedies, the rationale is not clear, and one wonders the extent to which this assists clarity and certainty in the law. Equity’s creative role is not unique since most branches of law continue to evolve. Its primary role is to relieve unconscionable reliance on the shortcomings of the common law. Otherwise the role of equity is extremely limited, since it cannot remedy a wrong which is not already recognized by the common law. The importance of its former role to redress the inflexible nature of common law forms of action surely no longer exists, since substantive law now routinely takes account of social change and initiates new causes of action – eg in extending the common law duty of care owed by manufacturers to third party consumers.19 Bibliography Birks, P. (1999). Equity, Conscience, and Unjust Enrichment. Annual Miegunyah Lecture. Melbourne University Law Review. [1999] MULR 1. Available at: Pearce, R and Stevens J. (2002). The Law of Trusts and Equitable Obligations. 3rd Edition. OUP. Worthington, S. (2006) Equity. 2nd Edition. Clarendon Law Series. Cases Acquaculture Corporation v New Zealand Green Mussel Co Ltd [1990] 3 NZLR 299 Boyer v Warbey [1953] 1 QB 234. Canson Enterprises Ltd v Broughton v Co [1991] 85 DLR (4 th) 129 Cowcher v Cowcher [1972] 1 WLR 425 Donoghue v Stephenson [1932] AC 562 Eves v Eves [1975] 1 WLR 1338 LAC Minerals Ltd v International Corona Resources Ltd [1989] 61 DLR (4th) 14 Mouat v Clark Boyce [1992] 2 NZLR 559 Napier and Ettrick (Lord] v Hunter [1993] AC 713 Re Hallett's Estate [1880] 13 Ch D 696 at 710 Tinsley v Milligan [1994] 1 AC 340 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 Walsh v Lonsdale [1882] 21 Ch D 9 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] 2 AC 669; 2 All ER 961 Read More