Concepts of Equality and Trust - Essay Example

Equity and Trust Submitted By Academy “It is … said that equity ‘supplements’ the shortcomings of the common law, but if that is correct it is nevertheless the case that equity only supplements the common law when by doing so it can prevent unconscionable reliance on the shortcomings of the common law. ‘Unconscionable’ cannot be defined in the abstract; it can only be understood in connection with the facts of particular cases” Royal Brunei v Tan [1995] 3 WLR 64 per Lord Nicholls at 76B-D Introduction The concept of equity in the jurisprudence of common law countries is the name given to the set of legal principles which supplement strict rules of law where in their application would operate harshly, so as to accomplish what is routinely referred to as ‘Natural Justice’. It has to be understood that the term ‘Law’ implies an act enacted and passed in Parliament (statutory law) and the common law (principles established by judges in previous trials, procedures and conclusions) in the process of deciding on litigations. The most important dissimilarity between law and equity is the difference in remedies that both offer. While laws equip the court with the necessary set of instructions that enable the court to draw monetary compensations for the damages cased to the plaintiff, the equity enables the court to order injunctions or decrees that direct someone to act or not to act in some particular manner. Often, it is this form of order that is more practical to the plaintiff and provides more convenient remedies to the sort of problems raised by the plaintiff in the court of law. A plaintiff who has lost his baggage in a particular place may seek to get it back from the place and not the monetary value of the contents of the baggage. Law courts also permit the usage of another instrument called the ‘writ’. But these are less flexible and are increasingly difficult to seek and obtain than an injunction. What marks the distinction between an equity and a law is the non-availability of a jury in the former. Equitable remedies can be decided upon exclusively by a judge, as it is a matter of law and not subject to intervention. Hence the intervention of a jury as a trier of facts is impossible to come by. Legal and equitable remedies are thus distinct in their nature and scope and this factor is well deliberated upon in modern legal systems of progressive states such as the United States of America. The right of trial by jury in a civil dispute in the United State is governed by the Seventh Amendment of the American Constitution. Hence the question of a trial by jury depends on the nature of relief the plaintiff has sought in his prayer before the court. If he is seeking a monetary benefit in lieu of the wrongs done to him, the matter can be decided upon by a jury since the matter is considered legal. But is cases where the prayer is for specific performance or non-performance, and areas where the intended award is an injunction, declaratory judgment, modification of contract etc., then the matter is treated to be solved by equity. Hence in such areas, the jury is not allowed. The foremost distinction between a law and equity is the source of the governing rules from which the decisions are arrived at. In law, the decisions are derived from a set of governing rules that are well laid out in long hand and approved by the government. Where as in the case of equity, it only has general guidelines known as the maxims on equity. It is due to this factor that the equity is deeply rooted on fairness and flexibility. An important criticism that equity has is that since there are no prior written guidelines, the lord chancellor can give a ruling according to his conscience. This open endedness led to the wrapping up of the provision and its being included in to a consolidated system of precedents much like its cousin – the Common Law by the 17th century. History of Equities and Trust The distinction between the two however was born out of an accident of history. The law courts or the so called ‘courts of law’ were established in England to enforce the king’s law of the medieval era. Large scale corruption prevented meritorious petitions being denied any justice. The next resort at the time was to go and appeal to the king who decided cases on the merit of his conscience. As the number of petitions grew, and the king could no longer personally hear them, the chancellor was appointed to hear the petitions. The chancellor was a priest of high order to whom the king confessed. In term, he was the keeper of the king’s conscience. So the chancery came to be known as the ‘Court of Chancery’ and over a period of time, established itself as a legal office. By the fifteenth century, the court of the chancery had established itself as the supreme legal agency of England. After the seventeenth century, the chancellors appointed were all lawyers who were competent enough to dispose justice as required. One of the areas that the chancery played a vital role was the enforcement of uses, an area that the courts shied away from for absence of well-codified laws. Later, it became a prerogative of the office of the chancellor. This role gave rise to the distinction between an equity and a law. To prevent the judges from inventing new writs, the parliament enacted a provision providing for the rule that the power to issue a writ would be granted only to judges one-writ-at-a-time. Since 1253, when the rule came in to force, the writ-for-right package as it was called made the whole system meaningless. It was limited to enumerated rights and wrongs thus producing wrong judgments at times. Thus even though the king’s bench literally had the power and jurisdiction to decide your claim, you still might not have the case if there wasn’t a single form of action combining them together. Lacking a legal remedy, the plaintiff’s only option is to petition the king. Thus people started petitioning the king again for relief from unjust judgments. The first chancellors were men of cloth who were required to pass judgements based on the moral and equity merits of the affair. Priests were chosen for this office since they were the only people who could read and write. But since, there was no written law and no recorded precedent, the judgments lacked consistency and varied widely from case to case. In 1529, Sir Thomas More was appointed to the office of chancellery which marked a new era in the office. All future chancellors that followed were men of legal training and social standing. From the beginning of the year 1557, all proceedings at the court was recorded and maintained for future reference. This lead to the development of a large number of equitable doctrines, based on which future cases were being heard and resolved. But criticisms poured in. ‘Equity varies with the length of the chancellor’s foot’ complained the 17th century Jurist John Seldon. As the law of equity developed as an official office, it began to conflict with the code of written law. Seldom integration was far from possible. Often injunctions were sought to simply prohibit the order of a court of law. The penalty for disobeying an equity was harsh imprisonment. Thus the provision of habeas corpus was created to order the release of people who were imprisoned by the court of law. The practice was started by the Chief Justice of the King’s Bench, Sir Edward Coke. Allegations of fraud and corruption grew and this lead to more public dissatisfaction. Often the two courts would be at loggerheads with each other about the execution of their respective orders that conflicted each other. Sir Francis Bacon was called upon to resolve the issues and he after conducting a wide study of the subject concluded that in cases where the Common Law was in conflict with the Equity, the decision based on the latter shall prevail for good and supersede the former. Thus Equity’s primacy was enshrined in the Judicature Acts of the 1870s, which also sought to merge the hitherto independent systems in to one system. Comparison of Equity Traditions in Common Law Countries With time, tradition weans away. Add to it the decentralisation of the English colonies, the system slowly drifted away from its core foundations in England. The political independence of colonies and further formulation and modification of inherited law lead to the priority of Equities being consigned to the past. But Equity as a provision made significant inroads in to common law. Each colony began to formulate its own system of judiciary to suit its requirements. Nonetheless, each colony acknowledged the reception of common law and Equity of England as a vital source in the codification of written law. In the United States of America for example, the application of equity is limited to the cases whose outcomes would be the same whether they were decided in the US or the UK. The deep reasonableness of this position enjoys strong historical support. The perfection of modern Equity as a system was undertaken by Philip Yorke, the 1st Earl of Hardwicke during his tenure as chancellor from 1737 to 56. In modern American legal system, the difference between law and equity has been narrowed down to exist as one coherent system that ensures total justice. But the substantive merits of both have been recognized even in the merges general jurisdiction. The temporary restraining orders issued by the Americaln courts is a case in point. The system is still based on the old Equity system that permits such injunctions to be delivered. Equity courts were widely distrusted in the North by late 1700s and the north decided to do away with the system. But the south of America was slower to implement the new system and hence the practice carried on. The promulgation of Federal Rules of Civil Procedure in 1938 led to the abandonment of the old law/equity separation. Even to this date, several states still follow the two court system for Equity and Law. Delaware is a classic example. The matters decided in such courts are largely that fall under corporate law. Besides corporate law, which has its origin in the law of trusts, these courts also consider wills and probate, adoptions and legal guardianships and marriage and divorce. After the merger, American courts adopted the procedures of both the courts to ensure that better justice was delivered to the plaintiffs to all their prayers. Certain devices such as the joinder, counterclaim, cross claim and interpleader originated in the courts of Equity. References Andrew Edgecomb 2006 Equity in a Nutshell by T. Cockburn & M. Shirley, Lawbook Co, Sydney, 2005 Butterworths, Equity & Trusts by T. Cockburn, W. Harris & M. Shirley, Sydney, 2005. E.E. Reynolds, Thomas More and Erasmus, (1965) Meagher and Gummow, Equity, Doctrines and Remedies, 3rd ed. The Common Law by Oliver Wendell Holmes Jr., available freely at Project Gutenberg (www.gutenberg.org), accessed on 12th December 06. Read More