Merge of Equity and Common Law: Historical Analytical Essay

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Merge of Equity and Common Law: Historical Analytical Essay

To explain the evolution of Equity with regard to cases and statutes and to discuss whether the argument over the doctrine of fusion is relevant today.

Introduction

The law is a body of rules that applies to certain defined circumstances and situations and does not provide for changes and variations presented by unprecedented circumstances. This unpredictability of the future may at times render the law defective in dealing with new occurrences and strict legal enforcement thereof would animate injustice- this being as a result of the general nature of the law-. Equity, of necessity, comes in to mitigate the rigidity of the application of the law.

To properly understand this doctrine of equity, it is proper at this point to analyze its historical foundations

Medieval origins

Equity has developed over a long period of time, didn’t start off clean but it has grown from this and that and has become interwoven to build what is called Equity. 1066 AD was when the common law was rigid and the King had a rigid hold on the country and the king was accessible as a person of administration too and the problem with the common law system was that it was very strict about what kinds of actions one could bring and the remedy was always pecuniary. The three common law courts that administered justice were;

a) The court of Common pleas/ Common Bench- This court had the power to hear and determine civil cases brought by one individual against another.
b) The King’s Bench- This court had jurisdiction to hear matters in which the king had interest to with murders, crimes, et al.
c) The Court of Exchequer- this court dealt with matters involving royal revenue, for instance, taxes and other state dues.

Under the Common Law system, the operative was the writ system in which one could only get redress for their grievances if there was a writ disclosing the course of action. The latinate tag Ubi us, ibi remedium- where there is a writ, there is a remedy was thusly imperial. A writ here refers to a form of written command in the name of the crown to act or abstain from acting in a particular way.

The middle ages

The Lord Chancellor [currently would be the Prime Minister] was an important figure in the administration of Justice. He was charged with issuing writs- necessary to start any action in Common law under the Royal Seal. At this point, there was no need for equity as many judges had been trained on Canon Law principles and thus exercised equity willingly on matters before them. This is because most of them were ecumenical. They would apply the principles of conscience, religion, good faith, morality et al in their determinations. With the passage of time, however, new judges were appointed who were trained lawyers and were very conservative about the application of the law therefore they adopted a conservative approach and sought to enforce the law as is. Their first action was to strike any new writs that were issued by the Chancery and this action was cemented by the provisions of Oxford 1258, which required the Chancellor to get approval for any new writs by the King in Counsel.

The Statute of Westminster 1 1285 tried to rectify this by giving the chancery power to modify existing writs for new cases. The Common Law judges continued in their affair to strain justice by canceling and invalidating new writs. Many people, therefore, lacked redress for their claims.

Towards the end of the 13th Century, the inadequacy of the common law courts was glaring and thus individuals began petitioning the king asking that justice be done and remedy be ordered. It was considered that a residuum of justice resided in the King and petitions were directed into this as a last resort if the common law had not provided justice.

Initially, the King heard petitions in counsel but subsequently transferred them to the chancery owing to their overwhelming volume. The Chancellor granted relief in the name of the King and would use certain principles to intervene;

a) Equity acts in personam- the common law judges only granted damages but equity acted against a person ordering him to do something e.g injunctions.
b) Equitable remedies are discretionary- an award in equity is on the court’s discretion
c) The bona fide purchaser- whereas a legal right is enforceable against anyone in the world, an equitable right is enforceable against anyone except a bona fide purchaser.

The 15th century

By mid -the 14th century, the Court of Chancery was independent of the common law and their jurisdiction was recognized with the enforcement of uses [trusts], specific performance contracts, granting relief on fraud and mistakes as well as injunctions. The main focus was unconscionable behavior. The Court of Chancery’s function was essentially use of the king’s prerogative to interfere with the administration of the law in the interest of justice where conscience rendered such interference necessary. The chancellor looked to the terms of the agreements as well as whether the petitioner had fallen foul of fraud or breach of confidence.

The courts of equity as they developed became vague and unclear. Judges based their decisions on conscience and there lacked a system of decision-making based on precedent. The decisions of the courts of equity, therefore, were random and very unpredictable.

In 1675, Lord Nottingham was appointed Chancellor and began the systemization of Equity. He set down principles upon which equity would operate and thus moving away from the error of idiosyncratic and unpredictable decisions. Lord Hardwicke, appointed in 1737 laid down the general principles under which Equity would operate. Lord Eldon –appointed in 1801- consolidated all principles that had been previously developed by his predecessors.

It would appear that at this point, Equity was taking on the rigidity of Common law courts. In the case of Gee v Pritchard, Lord Eldon observed;

‘’…Nothing would inflict on me greater pain in quitting this place than the recollection that I had done nothing to justify the reproach that the equity of this court varies like the Chancellor’s foot…’’

In Re Telescritor Syndicate Ltd[footnoteRef:2] Buckley J declared that ‘’…this court is not a court of conscience…’’. It would seem that the court was now insistent on the provisions and procedures of law and necessarily guided by the whims of the presiding judge. Lord Eldon in the case of Lord Dudley v Lady Dudley guided thusly;

‘’…Equity is no part of the law but a moral virtue which qualifies, moderates, and reforms the rigor, harshness, and edge of the law and also assists the law where it is weak…’’

In Re Diplock[footnoteRef:4], the court gave direction to the effect that;

‘’…if the claim being made is to exist, ‘it must be shown to have an ancestry founded in history and in the practice and precedents of the courts administering the jurisdiction of equity. It is not sufficient that because we may think that the ‘justice’ of the present requires it, we should invent such jurisdiction for the first time.’’

As of 1948, the court was saying that they were not going to invent jurisdiction and it would therefore seem that the courts of equity took on the nature of common law courts as regards form. For example, an action brought in the courts of equity must have had foundation in the law; either in precedents or statutes, or writs. The decisions of equity were how rigid and predictable; much like the common law system.

The conflict between the courts

There being two systems in place, the Common Law Courts and the courts of Equity were involved in a supremacy battle with both systems seeking to assume preeminence over the other. The common law courts would nullify decisions by the courts of equity while the latter would grant injunctions against decisions made by common law courts. The dispute between the two was so intense that reforms had to be made within the legal system. Some of the reforms made were mitigated by enactment of statutes for instance the

Common Law Procedure Act, 1854- which gave common law courts a limited power of granting injunction
The Chancery Amendment Act, 1858 [Lord Cairns’ Act]- which gave the court of chancery power to award damages In addition to injunctions and specific performance
The Decision in Earl of Oxford’s Case [1615]- This case was brought before a common law court before Chief Justice Coke. His judgment was allegedly obtained by fraud and the parties moved to the Lord Chancellor [Lord Ellesmere] who issued a common injunction prohibiting the enforcement of the Common law order. The courts were locked in a stalemate and the matter was referred to the Attorney General, Sir Francis Bacon. By authority of King James I, Sir Francis upheld the common injunction and concluded; ‘’…in the event of a conflict between common law and equity, equity will always prevail…’’.
The Judicature Act, 1873, codified the decision of the king seemingly making Common law courts look redundant.

The Judicature Act merged the two courts to come up with one new court called the High Court of Justice which would deal with both common law and equitable matters. The High Court of Justice was divided into 5 divisions with a general Court of Appeal to hear all the appeals. The five divisions were;

Queen’s Bench Division
Common Pleas Division
Exchequer Division
Chancery Division
Probate, Divorce, and Admiralty division

The new High Court was given the power to administer equitable remedies and equitable defenses could be pleaded in any action. All branches of the court could recognize equitable interests and rights.

The doctrine of fusion and its relevance in the present age

As we have earlier indicated in this paper, the law as we know it today has evolved a long way. Initially, common law reigned supreme. Its rigidity, however, saw the emergence of equity under the Lord Chancellor of England[footnoteRef:5]. Thus, two legal systems and two parallel court systems emerged; both seeking supremacy over the other. This supremacy battle was solved by King James I in 1615, stating by decree that in the event of a dispute between common law and equity, equity would always prevail[footnoteRef:6]. This was later codified into statute by the Judicature Act of 1873.

The Act further went on to merge the two parallel courts(courts of equity and courts of common law) into one. There has been, however, a long-standing debate by scholars and jurists alike. A debate seeking to find out whether;

The substantive rules of Equity and common law were merged and if so to what extent( fusionist point of view)
Or whether the fusion of equity and common law only dealt with administrative procedure thus declaring the notion of fusion a fallacy( purist point of view)

Purist point of view

As Jessel MR would declare in Salt v Cooper

“… the main object of the act was to assimilate the transaction of equity business ad common law business by different courts of judicature. It has been sometimes inaccurately called the ‘ fusion of law and equity but it was not any fusion or anything of the kind. It was the vesting in one tribunal of the administration of law and equity In every cause, action or dispute which should come before that tribunal.”

These notions argued by men like Jessel have been termed as Purists. The Purist point of view is that the rules of Common law and Equity never actually merged. The merger that was adjudicated by section 25(11) of the Judicature Act was with regard to administrative purposes only. Individuals could go to one single court and have their matter determined therein. The matter would however be determined based on the system of laws it was premeditated upon.

If the matter arose in equity, it would be determined on the basis of equity. If it arose I common law, it would be determined under the precincts of common law. If dispute arose as to which system of rules to use, equity would prevail.

Purists further argue that in addition to keeping this system separate remedies for causes should also be kept separate; common law remedies cannot be granted for equitable wrongs and vice versa( equitable damages cannot be granted for common law wrongs).

The basis of a purist argument stems from two points;

The belief that it is not in the jurisdiction of the courts to enact statutes and
Further that it is the responsibility of courts to maintain judicial precedence.

The Judicature Act in section 25(11) speaks of merging the two court systems only.

“…Subject to the provision of this or any act, every court exercising jurisdiction in England and wales in any civil cause or matter shall continue to administer law and equity. ”

It does not in any clear words speak of the merger of the substantive rules of law and equity. It acknowledges that there are two systems of law in place, foresees conflict, and provides a solution to that conflict. It is the argument of purists that were it the intention of parliament to mingle the two systems of law, it would have precisely stated that fact in clear unambiguous terms. It is therefore not in the ambit of the courts to read in fusion where it does not exist.

Secondly, purists argue that courts cannot simply abandon judicial precedent that has existed for years. Common law is the basis for tort, most of the principles in property and commercial law, and contract law. Courts cannot, therefore, abandon these principles. There needs to be a sense of predictability in terms of causes.

Fusionist point of view

The second faction is the fusionist point of view. This view sees the two systems of law, purely merged. It sees equity and law as two streams that once flowed separately but have now conveniently converged into one river and now conveniently dispense justice as one.

At the forefront of this argument is Professor Tilbury. In his paper[footnoteRef:9], Tilbury declares that “Law borrowed from equity and equity generally followed the law.”

This statement is quite incredulous as it speaks volumes of common law. At the very beginning, English Common law was already borrowing heavily from Roman Law, especially after its conquest by the Normans in 1066. It went on further to borrow from equity to mitigate its harshness adding a human touch to itself. Equity eventually had to follow the procedures of the law and did not intend to change any bit of it. As Sir Nathan rightly put in Lord Dudley and Ward v Lady Dudley[footnoteRef:10], [10: (1705) Pr Ch 241 at 244]

“….Equity does not destroy the law, nor create it, but assists it”

Lord Diplock would hold in United Scientific Holdings Ltd v Burnley Borough Council

“…By 1977 this metaphor (of two streams running side by side) has in my view become both mischievous and deceptive. The innate conservatism of English lawyers makes them slow to recognize that by the Judicature Act, the two systems of substantive and adjectival law formerly administered by the courts of law and the courts of chancery….were fused. ”

It would thus seem from this argument that, the point of view of the purists stems mainly form a conservative, historical basis. A basis without any solid foundation. A basis which seeks to bask in nostalgia and not realize that equity and common law actually merged, with equity not only taking pre-eminence over common law but also mitigating and correcting common law where it had grossly failed.

Conclusion

It is thus in my opinion that the debate over doctrine of fusion is already settled and further that it has no relevance in today’s era. The argument that equity and common law have never merged is a fallacy based on nostalgia. Equity and common law have merged and come together forming a new system of law that is both convenient, efficient, and just.

In Kenya ( a common law jurisprudence) for example, common law has had a bearing on the procedural part of the law, influencing things such as timelines as to the start of suit, procedures of service, and modes of making applications in court. The rigidity of common law has been adopted in these procedures, in that failure to observe the law as laid down in the Civil Procedure Code with regard to the aforementioned will lead to striking of applications or the matter not being heard at all.

Equity on the other hand has had an influence on sentencing in criminal matters and remedies to grant in civil matters. The Criminal Procedure Code has given courts a lot of latitude in determining sentences for convicted persons based on the circumstances of each case. The law has been given a humane touch by the grace of equity. The system is convenient and efficient.

References

Statute

Statute of Westminster 1 1285
The Provisions of Oxford of 1258
Common Law Procedure Act, 1854
The Civil Procedure Code
The Criminal Procedure Code

Books

Bakibinga, David, Equity and Trusts, 2nd Edition, Oxford University Press, Kampala, 2009

Case Law

Gee v Pritchard [1818]2 SWANS 408 at 414
Re Telescritor Syndicate Ltd [1903] 2 ChD 174, 195, 196
Lord Dudley v Lady Dudley[1705] Pre Ch 241, 244
Re Diplock [1948] Ch 465 at 481
The Earl of Oxford’s Case [1615]
United Scientific Holdings Ltd v Burnley Borough Council (1978) AC 904, 924-925
Salt v Cooper(1705) Pr Ch 241 at 244

Articles

Tilbury, Michael, ‘Fallacy or Furphy? Fusion in a Judicature World” (2003) 26 University of South Wales Law Journal