Future Trends & Developments in Equity
Author: Tina Cockburn and Melinda Shirley
Equity is a body of rules or principles developed in the Court of Chancery before 1873. The doctrines of equity developed as a response to defects in the English common law system, defects which had resulted in rigidity and inflexibility. A knowledge of the principles of equity is therefore crucial to a complete understanding of the law in those areas of private law, particularly property and contract, where equity intervened to modify the operation of the rules of the common law. In that sense, the doctrines of equity form part of the law of contract and property.
The doctrine has also reached into other subject areas including taxation law, corporate law and succession. Equity also developed remedies, such as the injunction, which were unknown to the common law and which have a continuing influence in public law as well as private law.
The body of law called equity is founded upon the principles of fairness and conscience. Its piecemeal development took place over many years as a direct result of the injustices often caused by a strict application of the common law. As a result, equitable principles have also developed in a piecemeal and responsive way.
The principles of equity are founded on the concept of 'unconscionability' that is, where an act or omission is considered to be contrary to good conscience. In those circumstances equity will often step in and grant relief to a party whose trust has been breached or whose disadvantage has been used to the advantage of another.
Equitable remedies are both flexible and specific to the circumstances of each case and the granting of equitable relief is always discretionary. An understanding of the history and development of equity is fundamental to an understanding of this area of the law.
As equity became systematised in the 19th century, it began to attract criticism for being rigid and fixed. In much the same way as the common law it sought to enhance, it was criticised as having ceased to be responsive to the changing needs of society and for having become bound up in too many technical rules to perform its traditional role.
Indeed many modern judges have shown a reluctance to develop new equitable principles and both the House of Lords and the High Court have expressed the view that the development of equity should only occur through the legitimate processes of legal reasoning. In Muschinski v Dodds (1986) 160 CLR 583 at 615 Deane J stated that:
"the fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice".
Nor however, could equity be described as static. Through legitimate legal reasoning the High Court has demonstrated a willingness to apply established principles to a number of new situations in a socially responsive and often progressive way, the areas of constructive trusts, estoppel and mareva injunctions being good examples.
In Garcia v National Australia Bank (1998) 72 ALJR 1243, Kirby J (at 1251) makes reference to the way that equitable doctrines are refined by the High Court to ensure that they keep pace with societal change:
"somehow, by some means, there is a movement that takes place in the exposition of legal principle. The movement may be readily perceived at a distance. Yet, although we may sometimes be unable to say how the law gets from one point to another, no one doubts that movement occurs or that it is "in response to the developments of the society in which [the law] rules. Gummow has pointed out that the principles and doctrines of equity never pretended "like the rules of the Common Law?to have been established from time immemorial". Rather, they were "established from time to time - altered, improved, and refined from time to time". So it is in this case."
And later (at 1264) he says:
"equitable principles are themselves in a constant state of evolution in response to the developments of society. Borrowing against the family home to support a business venture is one such development which was not prevalent in earlier times. The changing nature of domestic relationships is another such development. Equitable doctrine is perfectly capable of adjustment to such changes. It does not need to use outmoded concepts, or anachronistic language, which pretend that things have remained the same as they were in 1939 when Yerkey (v Jones) was decided.
Equity is a body of rules or principles developed in the Court of Chancery before 1873. The doctrines of equity developed as a response to defects in the English common law system, defects which had resulted in rigidity and inflexibility. A knowledge of the principles of equity is therefore crucial to a complete understanding of the law in those areas of private law, particularly property and contract, where equity intervened to modify the operation of the rules of the common law. In that sense, the doctrines of equity form part of the law of contract and property.
The doctrine has also reached into other subject areas including taxation law, corporate law and succession. Equity also developed remedies, such as the injunction, which were unknown to the common law and which have a continuing influence in public law as well as private law.
The body of law called equity is founded upon the principles of fairness and conscience. Its piecemeal development took place over many years as a direct result of the injustices often caused by a strict application of the common law. As a result, equitable principles have also developed in a piecemeal and responsive way.
The principles of equity are founded on the concept of 'unconscionability' that is, where an act or omission is considered to be contrary to good conscience. In those circumstances equity will often step in and grant relief to a party whose trust has been breached or whose disadvantage has been used to the advantage of another.
Equitable remedies are both flexible and specific to the circumstances of each case and the granting of equitable relief is always discretionary. An understanding of the history and development of equity is fundamental to an understanding of this area of the law.
As equity became systematised in the 19th century, it began to attract criticism for being rigid and fixed. In much the same way as the common law it sought to enhance, it was criticised as having ceased to be responsive to the changing needs of society and for having become bound up in too many technical rules to perform its traditional role.
Indeed many modern judges have shown a reluctance to develop new equitable principles and both the House of Lords and the High Court have expressed the view that the development of equity should only occur through the legitimate processes of legal reasoning. In Muschinski v Dodds (1986) 160 CLR 583 at 615 Deane J stated that:
"the fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice".
Nor however, could equity be described as static. Through legitimate legal reasoning the High Court has demonstrated a willingness to apply established principles to a number of new situations in a socially responsive and often progressive way, the areas of constructive trusts, estoppel and mareva injunctions being good examples.
In Garcia v National Australia Bank (1998) 72 ALJR 1243, Kirby J (at 1251) makes reference to the way that equitable doctrines are refined by the High Court to ensure that they keep pace with societal change:
"somehow, by some means, there is a movement that takes place in the exposition of legal principle. The movement may be readily perceived at a distance. Yet, although we may sometimes be unable to say how the law gets from one point to another, no one doubts that movement occurs or that it is "in response to the developments of the society in which [the law] rules. Gummow has pointed out that the principles and doctrines of equity never pretended "like the rules of the Common Law?to have been established from time immemorial". Rather, they were "established from time to time - altered, improved, and refined from time to time". So it is in this case."
And later (at 1264) he says:
"equitable principles are themselves in a constant state of evolution in response to the developments of society. Borrowing against the family home to support a business venture is one such development which was not prevalent in earlier times. The changing nature of domestic relationships is another such development. Equitable doctrine is perfectly capable of adjustment to such changes. It does not need to use outmoded concepts, or anachronistic language, which pretend that things have remained the same as they were in 1939 when Yerkey (v Jones) was decided.
posted by Maverick SM @ 9/14/2005 04:21:00 PM
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