(a) "At this time of the day it is not very helpful to try to draw a distinction between Law and Equity." Discuss.

Following the Norman Conquest, a system of common law courts arose where the King’s justice was administered. However, strict adherence to common law rules and restrictions often led to injustice. For example, the common law courts would not recognize trusts, where the legal title to land was held by one person on trust for another. Nor would the court take into consideration the conduct of the parties. Litigants soon began to petition the King, the fountain of justice, and the King, burdened with increasing numbers of petitions, eventually appointed a Chancellor. As time passed, the Chancellor came to be supported by an entire administrative unit called the Chancery, which had its own judges.

The Chancery had three jurisdictions:

1.    The exclusive, where it enforced rights which the common law courts failed to enforce. There were certain causes of action which could only be brought in the Chancery such as breach of trust, breach of confidence and equitable fraud.

2.    The concurrent, where it gave new remedies for existing common law actions. These remedies included specific performance, injunctions, etc;

3.    The auxiliary where it used different procedures from the common law courts, eg, joining third parties and compelling discovery.

The Chancery also had different rules. For example, where personal representatives lost estate assets, whether or not through their default, they were automatically personally liable in the common law courts. The Chancery had the power to enquire into the circumstances. In the Chancery, they were only held liable in cases of wilful default. In the common law courts, time was always considered to be of the essence of a contract, but the Chancery was more indulgent, and time was only deemed to be of the essence where this was expressly provided. A third example arose in written leases which were not executed according to the laws (ie, which were not under seal). In the common law court, the lease was treated as a periodic one according to the period of the tenancy, while the Chancery gave full force to the unexecuted lease.

Eventually the two courts were fused by the Supreme Court of Judicature Acts of 1873 and 1875, and the common law judges gained the express power to administer equity. The Acts provided that in certain named cases the new combined court was to use its equitable jurisdiction, such as in dealing with wardship of children, for which the Chancery previously had jurisdiction. It expressly provided that for time in contracts, administrators in estates, etc, the Chancery jurisdiction was to be used. Finally, in a catch all phrase, the Act provided that wherever there was a conflict between the rules of law and the rules of equity, the rules of equity were to prevail.

This provision led to a great debate which lasted many years. Some felt that only the administration of the courts had been fused, while others felt that the law itself had fused. In Walsh v Lonsdale, Jessel MR famously said, “there is only one court and the rules of equity prevail in it.” He therefore gave full effect to an unexecuted lease as the chancery would have done.  

Other notable example of the so-called “fusion” come wherever the rules of law are applied to equity. For example, in Tinsley v Milligan, the court applied a common law rule, called “the rule in Bowmakers” to a resultant trust. In Seager v Copydex, the court awarded common law damages for an equitable cause of action, namely a breach of confidence, and in Coulthard v Disco Mix Club, the court applied the common law limitation period in a situation where an equitable cause of action potentially arose.

Nevertheless, it would be misleading to say that there is “no distinction” between law and equity. Legal rights remain legal rights, and equitable rights remain equitable rights. Equity always acts in personam rather than in rem. Equitable estates may be defeated by the “Chancellor’s darling” a purchaser for value without notice: Pilcher v Rawlins, Caunce v Caunce. And equitable principles are not applied to simple common law actions where damages are awarded. In considering cases, the courts are still very much aware of the distinction between law and equity, and the situation is perhaps more helpfully summed up by Lord Ashburner’s famous quote:

“The two streams of jurisdictions, though they run in the same channel, run side by side and do not mingle waters”.