Maxims of Equity

1. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A REMEDY

Meaning
Where there is a right there is a remedy. This idea is expressed in the Latin Maxim ubi
jus ibi remedium. It means that no wrong should go unredressed if it is capable of
being remedied by courts. This maxim indicates the width of the scope and the basis
of on which the structure of equity rests. This maxim imports that where the common
law confers a right, it gives also a remedy or right of action for interference with or
infringement of that right.

Application and cases

In Ashby v. White, wherein a qualified voter was not allowed to vote and who therefore
sued the returning officer, it was held that if the law gives a man a right, he must have
a means to maintain it, and a remedy, if he is injured in the enjoyment of it.
In cases where some document was with the defendant and it was necessary for the
plaintiff to obtain its discovery or production, a recourse to the Chancery Courts had
to be made for the Common Law becoming ‘wrongs without remedies’.

Limitation
a) If there is a breach of a moral right only.
b) If the right and remedy both were in within the jurisdiction of the Common Law Courts.
c) Where due to his own negligence a party either destroyed or allowed to be destroyed,
the evidence in his own favour or waived his right to an equitable remedy.

Recognition
i) The Trust Act
ii) Section 9 of CPC- entitles a civil court to entertain all kinds of suits unless they are
prohibited.
iii) The Specific Relief Act- provides for equitable remedies like specific performance
of contracts, injunction, declaratory suits.

2. EQUITY FOLLOWS THE LAW

Meaning
The maxim indicates the discipline which the Chancery Courts observed while
administering justice according to conscience. As has been observed by Jekyll. M.R:
‘The discretion of the court is governed by the rules of law and equity, which are not
to oppose, but each, in turn, to be subservient to the other.” Maitland said, “Thus equity
came not to destroy the law but to fulfill it, to supplement it, to explain it.” The goal of
equity and law is the same, but due to their nature and due to historic accident they
chose different paths. Equity respected every word of law and every right at law but
where the law was defective, in those instances, these Common Law rights were
controlled by recognition of equitable Rights. Snell therefore explained this maxim in
slightly different way: “Equity follows the law, but not slavishly, nor always.”
 Application and cases
At common law, where a person died intestate who owned an estate in fee-simple,
leaving sons and daughters, the eldest son was entitled to the whole of the land to the
exclusion of his younger brothers and sisters. This was unfair, yet no relief was granted
by Equity Courts. But in this case it was held that if the son had induced his father not
to make a will by agreeing to divide the estate with his brothers and sisters, equity
would have interfered and compelled him to carry out hi promise, because it would
have been against conscience to allow the son to keep the benefit of a legal estate
which he obtained by reason of his promise. This decision was held in Stickland v.
Aldridge.
Equity follows the law and even if by analogy law can be followed, it should be followed.

Limitation
i) Where a rule of law did not specifically and clearly apply
ii) Where even by analogy the rule of law did not apply

Recognition
Bangladesh has not recognized the well-known distinction between legal and
equitable interests. Equity rules inBangladesh, therefore, cannot override the specific
provisions of law. As for example, every suit in Bangladesh has to be brought within
the limitation period and no judge can create an exception to this or can prolong the
time-limit or stop the rule from taking effect on principles of equity. Such a decision
was held in Indian Appa Narsappa Magdum case.

3. HE WHO SEEKS EQUITY MUST DO EQUITY

Meaning
The maxim means that to obtain an equitable relief the plaintiff must himself be
prepared to do ‘equity’, that is, a plaintiff must recognize and submit to the right of his
adversary. Scriptures of Islam also inform us to be conscientious:
“Woe to those who stint the measure:
Who when they take by measure from others, exact the full;
But when they mete to them or weigh to them, minish…”

Application and cases

This maxim has application in the following doctrines-
i) Illegal loans
ii) Doctrine of Election
iii) Consolidation of mortgages
iv) Notice to redeem mortgage
v) Wife’s equity to settlement
vi) Equitable estoppel
vii) Restitution of benefits on cancellation of transaction
viii) Set-off

i) Illegal loans: In Lodge v. National Union Investment Co. Ltd., the facts were as
follows. One B borrowed money from M by mortgaging certain securities to him. M
was a unregistered money-lender. Under the Money-lenders’ Act, 1900, the contract
 was illegal and therefore void. B sued M for return of the securities. The court refused
to make an order except upon the terms that B should repay the money which had
been advanced to him.

ii) Doctrine of election: Where a donor A gives his own property to B and in the same
instrument purports to give B’s property to C, B will be put to an election, either accept
the benefit granted to him by the donor and give away his own property to C or retain
his own property and refuse to accept the property of A on condition. But B can not
retain his property and at the same time take the property of A.

iii) Consolidation of mortgages: Where a person has become entitled to two mortgages
from the same mortgagor, he may consolidate these mortgages and refuse to permit
the mortgagee to exercise his equitable right to redeem one mortgage unless the other
is redeemed. The right of consolidation now exists in England but after the enactment
of the Law of Property Act, 1925, it can exist only by express reservation in one of the
mortgage deeds.

iv) Notice to redeem mortgage: Notice to a mortgagor to redeem one’s mortgage is an

equitable right of the mortgagor.

v) Wife’s equity to a settlement: There was a time when woman’s property was merged
with that of her husband. She had no property of her own. Equity court imposed on
the husband that he must make a reasonable provision for his wife and her children.
But, now, Under the Law Reform (Married Women and Tortfeasors) Act, 1935, married
women has full right on her property and it is not consolidated with her husband’s
property.

vi) Equitable estoppel: A promissory estoppel arises where a party has expressly or
impliedly, by conduct or by negligence, made a statement of fact, or so conducted
himself, that another would reasonably understand that he made a promise thereon,
then the party who made such promise has to carry out his promise.

vii) Restitution of benefits on cancellation of transaction: It is proper justice to return

the benefits of a contract which was voidable, and, equity enforced this principles in
cases where it granted relief of rescission of a contract. A party can not be allowed to
take advantage of his own wrong.

viii) Set-off: Where there have been mutual credits, mutual debts or other natural dealings
between the debtor and any creditor, the sum due from one party is to be set-off
against any sum due from the other party, and only the balance of the account is to be
claimed or paid on either side respectively.

Limitation
i) The demand for an equitable relief must arise from a suit that is pending.
ii) This maxim is applicable to a party who seeks an equitable relief.
Recognition
i) Under sec 19-A of the Contract Act, 1872 if a contract becomes voidable and the
party who entered into the contract voids the contract, he has return the benefit of the
contract.
ii) sec 35 of the Transfer of Property Act embodies the principle of election.
iii) Sec 51 and 54 of the Transfer of Property Act.
iv) In Order 8, Rule 6 of the CPC, the doctrine of Set-off is recognized.

4. HE WHO COMES INTO EQUITY MUST COME WITH CLEAN HANDS

Meaning
Equity demands fairness not only from the defendant but also from the plaintiff. It is
therefore said that “he that hath committed an inequity, shall not have equity.” While
applying this maxim the court believed that the behavior of the plaintiff was not against
conscience before he came to the court.

Application and cases

In Highwaymen case, two robbers were partners in their own way. Due to a
disagreement in shares one of them filed a bill against another for accounts of the
profits of robbery. Courts of equity do grant relief in case of partnership but here was
a case where the cause of action arose from an illegal occupation. So, the court
refused to help them.
The working of this maxim could be seen while giving the relief of specific performance,
injunction, rescission or cancellation.

Limitation
General or total conduct of the plaintiff is not to be considered. It will be seen whether
he was of clean hands in the same suit he brought or not. Brandies J. in Loughran v.
Loughran said that “Equity does not demand that its suitors shall have led blameless
lives.”

Exception
i) If the transaction is a against public policy
ii) if the party repents for his conduct before his unjust plans are carried out.

Recognition
i) Section 23 of the Indian Trust Act- An infant can not setup a defence of the
invalidity of the receipt given by him.
ii) Section 17, 18 and 20 of the Specific Relief Act, 1877- Plaintiff’s unfair conduct
will disentitle him to an equitable relief of specific performance of the contract.
 Distinction between maxim no. 3 and 4-
He who seeks equity must do equity He who comes into equity must come
with clean hands
i) It is applicable when both the plaintiff andi) It is applicable when the defendant has
the defendant have claims of equitable no separate claim to relief and the
relief against each other. plaintiff’s conduct is unfair.
ii) It exposes the condition subsequent toii) It is a condition precedent to seeking
the relief sought. equitable relief.
iii) It refers to the plaintiff’s conduct as theiii) It refers to the plaitiff’s conduct before
court thinks it ought to be, after he he approaches the court.
comes to the court.
iv) The plaintiff has to mould his behavioriv) If the plaintiff’s conduct is unfair, it
according to the impositions by the would not entitle him to the relief sought.
court.
v) The plaintiff has an option or a choicev) The conduct of the plaintiff snatched his
before him either to submit to the choice from him. His equitable right
conditions put by the court, or to get out therefore neither be recognized nor
of the court. enforced.
vi) This maxim looks to the future. vi) This maxim looks at the past.

5. DELAY DEFEATS EQUITIES

Meaning
A Latin term in this regard is “Vigilantibus, non dormentibus, jura subvenient.” which
means “Equity aids the vigilant and not the indolent”. So, if one sleeps on his rights,
his rights will slip away from him. Legal claims are barred by statutes of limitation and
equitable claims may be barred not only by limitation law but also by unreasonable
delay, called laches.

Application and cases

To cases which are governed by statutes of limitation either expressly or by analogy
the maxim will not apply. Such cases fall into three categories-
i) Those equitable claims to which the statute applies expressly.
ii) to which the statute applies by analogy.
iii) Equitable claims which are covered by ordinary rules of laches.
Doctrine of laches- Plaintiff’s unreasonable delay is a weapon of defence by the
defendant against the plaintiff.
In a Bombay case, the plaintiff allowed his land to be occupied by the defendant and
this was acquiesced by him even beyond the period of limitation. On a suit of the land
it was decided that as the period of limitation to recover possession had expired, no
relief could be granted. Also the case of Allcard v. Skinner is worth mentioning here.

Limitation
This maxim does not apply when-
i) where the law of limitation expressly applies
ii) where it applies by analogy, and
iii) where the law of limitation does not apply but the cases are governed by ordinary
rules of laches.
 Recognition
The English doctrine of delay and laches showing negligence in seeking relief in a
court of equity can not be imported into the Bangladeshi law in view of Article 113 of
the Limitation Act, 1908, which fixes a period of one year (previously three years)
within which a suit for specific performance should be brought.
Section 51 of the Transfer of Property Act embodies this doctrine but with a difference.

6. EQUALITY IS EQUITY

Meaning
Plato defined that “If you cannot find any other, equality is the proper basis.” This
maxim is also explained as “equity delighteth in equality”, which means that as far as
possible equity would put the litigating parties on an equal level so far as their rights
and responsibilities are concerned.
Justice Fry said, “When I say equality, I do not mean equality in its simplest form, but
which has been sometimes called proportionate equity.”

Application and cases

Application of this maxim can be understood from the following:
i) Equity’s dislike for joint tenancy and presumption of tenancy-in-common
ii) Equal distribution of joint funds and joint purchases
iii) Contribution between co-trustees, co-sureties and co-contractors
iv) Ratable distribution of legacies
v) Marshalling of assets

7. EQUITY LOOKS TO THE INTENT RATHER THAN THE FORM

Meaning

Common law was very rigid and inflexible. It could not respond favourably to the
demand of time. It regarded the form of a transaction to be more important than its
substance. It looked to the very letter of the agreement and not the intention behind it.
On the other hand, Equity looks to the spirit not to the letter, it looks to the intention of
parties and not to the words.

Application and cases

In case of sale of land, if a party fails to complete it within the fixed for it, he is at
Common Law, in breach of the contract, but equity does not take this rigid attitude. It
allows a reasonable time to the party to complete it.

The application can be seen in the following instances-

i) Relief against penalties and forfeitures
ii) Relief in regard to precatory trust
iii) Relief in regard to mortgages, the doctrine of equity of redemption and the doctrine
of clogs on redemptions
iv) Attitude in regard to statute of frauds.
i) Relief against penalties and forfeitures- Common Law courts insisted on the
literal form of the contract that if the contract is breached, certain amount must be
given as compensation, though the actual loss is not that much. Equity interpret the
purpose and intent of the contract itself. The principal object of the contract is to
perform it and not the compensation. The compensation is a subsidiary matter.

ii) Precatory trust- A trust is created with- (1) an intention on his part to create a trust
thereby, (2) the purpose of the trust, (3) the beneficiary, and (4) the trust property.
Where an author uses words such as ‘I hope’, ‘I request’ or ‘I recommend’ the first
condition is missing. In cases where subsequent ingredients are found, in early days,
it was held by the equity courts that he had the intention. This view is in use now but
not as liberally as before.

iii) Relief in regard to mortgages- The mortgagor has a right to obtain his property
back by payment of the debt and that is his right of redemption. The mortgagor’s right
of redemption is guarded by courts and this has been expressed in a well-known legal
maxim, “Once a mortgage, always a mortgage, and nothing but a mortgage”.
iv) Attitude in regard to statute of frauds-

Recognition
i) Sec 55 of the Contract Act- If time is the essence of the contract, and it is not
performed within the stipulated time, the contract or part of it which is unperformed
would be voidable. If time is not the essence, the contract will not be voidable but
entitles the promisee to damages.
ii) Section 74 of the Contract Act- only a reasonable compensation can be claimed.
iii) Sec 114-A of the Transfer of Property Act- Forfeiture clauses in a lease.

8. EQUITY LOOKS ON THAT AS DONE WHICH OUGHT TO BE DONE

Meaning
If someone undertakes an obligation for the other, equity courts look on it as done and
as producing the same results as if the obligation had been actually performed. Equity
courts therefore look to the acts of the person bound by his conscience and interpret
and construe them in such a way that they amount to what ought to be done.

Application and cases

If A makes T trustee leaving 50,000 Taka to purchase a land for the use of B. T does
not purchase the land and by the time, B dies leaving all immovable property to X and
all movable property to Y. Now, who should get the 50,000 Taka? Equity in such cases
would definitely regard the purchase of land which ought to have been made as made.
The money thus goes to X.
The working of this maxim can be seen-
i) the doctrine of conversion
ii) Executory contracts
iii) doctrine of part performance
i) Doctrine of conversion- In the case of Lachmere v. Lady Lachmere, money was
taken as land. Doctrine of conversion can convert the money into immovable property
and immovable property into money.
ii) Executory contracts-
(a) Assignment of future property: When an assignment of property was made for
consideration equity treated it as a contract to assign. When the property came into
existence in such a contract it was treated as a complete assignment. As a leading
case on this point, Holroyd v. Marshall can be cited.
(b) Agreement for a transfer: In Walsh v. Lonsdale, it was decided that an agreement
for lease could be treated as a lease in equity.
iii) Doctrine of part performance: Under the equitable doctrine of part performance
contracts pertaining to land were allowed to be formed by oral evidence where one of
the parties did acts of pats performance. Maddison v. Alderson is a leading case on
this point.

Recognition
Many of the doctrines of English equity have taken statutory form in Bangladesh.
Insofar as equitable assignments are concerned no equitable estate is recognized
in Bangladesh. A transfer of future property for consideration operates as a contract
to be performed in future.
i) The Transfer of Property Act- A Contracts to sell Sultanpur to B. While the contract is
still in force, he sells Sultanpur to C, who has notice of the contract. B may enforce the
contract against C to the same extent as against A.
ii) The Specific Relief Act- Section 12 relating to the specific performance of part of a
contract also illustrates the application of the maxim.
iii) The Trust Act- Where a person acquires property with notice that another person has
entered into an existing contract affecting that property, the former must hold the
property for the benefit of the latter.

9. EQUITY IMPUTES AN INTENTION TO FULFILL AN OBLIGATION

Meaning
Equity considered and estimated acts of parties. Thus where a person is under an
obligation to do a certain act, and he does some other act which is capable of being
regarded as an act in fulfillment of his obligation. In other words a person is presumed
to do what he is bound to do.
In Sowden v. Sowden, a husband covenanted with the trustee of his marriage
settlement to pay to them £50,000 to be laid out by them in purchase of land in a
particular area D. He, in fact, never paid the sum, but after marriage purchased the
land at D in his own name, for £50,000. He died and could not bring the land into
settlement. Equity courts construed that he purchased land to fulfill his obligation.

Application and cases

i) Doctrine of performance and satisfaction
ii) Ademption
iii) Doctrine of presumption of advancement
iv) Relief against defective execution of power of appointment.
i) Doctrine of performance and satisfaction- Sowden v. Sowden and Lachmere v.
Lady Lachmere cases are examples of performance. Satisfaction is the donation of a
thing with it is to be taken in extinguishment of some prior claim of donee. This maxim
is helpful where the presumed intention of the testator is to be found out; where the
intention is express the maxim has no application.

ii) Ademption- Ademption is a transfer of property which operates as a complete

or pro tanto substitution for a gift previously made by the will of the donor.
e.g. X by his will leaves his daughter Y one-third of his residuary estate. Thereafter on
Y’s marriage X gives Y 20,000 Taka. X dies. 20,000 Taka is an ademption -complete
or proportionately to the gift of one-third share of the residuary estate of X.

iii) Presumption of advancement- When a purchase or transfer of property without

consideration is made by a father or a person in loco parentis, to or in the name of a
child, a presumption arises. And the presumption is that it was for the benefit of the
child. Such presumption, is known as ‘advancement’. The doctrine applies to cases of
parent and child, husband and wife, of mother and child and even to illegitimate child,
but not to a man and his mistress.

iv) Relief against defective execution of power of appointment- A power is an

authority vested in a person to deal with or dispose of property not his own. A power
may be legal or equitable but after 1925 all powers of appointment are necessarily
equitable.
e.g. A holds 50,000 Taka upon trust to divide among a certain class of persons. A has
no option is this matter He is bound to carry out the trust. On his failing to do so, the
court will see that the property is duly divided.
A defective execution will always be aided in equity under the circumstances
mentioned, it being the duty of every man to pay his debts, and a husband or a father
to provide for child.

Recognition
i) The Succession Act- Presumption against satisfaction is mentioned here. In
Hasanali v. Popatal, a testator, who had a sum of Rs 9000 as deposit from his brother,
gave to is brother a legacy of Rs 9000 and it was held that the brother was entitled to
both, the legacy and his deposit. But as decided in Rajmanuar case where a will
contained a clear indication that the legacy was meant as a satisfaction of the debt
due to X, X could not claim both as the section explains.
ii) The Trust Act- Where a person contracts to buy property to be held on trust for
certain beneficiaries and buys the property accordingly, he must hold the property for
their benefit to the extent necessary to give effect to the contract. Equity thus imputes
an intention to fulfill an obligation.
The doctrine of advancement does not apply in Bangladesh.
An Introduction to Trust Law: Equitable Maxims
Within trust law, equity is an important doctrine. Equity was designed to supplement
the common law and often intervenes to prevent unjust results happening. Before
delving into the complexities of trust law, it is important to know the different
equitable maxims which could be applied. Equitable maxims are often cited by both
commentators and judges. They are useful for simplifying complex legal rules into
one simple sentence. This article will explore the fourteen different equitable maxims
which are in use today.

EQUITY IS DISCRETIONARY

Equity is to be applied at the judges’ discretion, based on the rules and guidelines.
In Re Diplock [1948] Ch 465, the Court of Appeal recognised that a claim in equity
must be shown to exist by looking at precedent of the courts whom administered
equitable jurisdiction. Equity does not allow judges to create ‘justice’ if no precedent
is in place for such an outcome. However, this does not mean equity cannot be
changed, it is a flexible doctrine.

EQUITY IS TRIGGERED BY UNCONSCIONABILITY

This is an extremely important maxim within the doctrine of equity. One of the main
reasons for equity intervening is that the defendant acted unconscionably. When
equity intervenes, it will operate on the conscience of the owner of the legal interest;
this was made clear in Westdeutsche Landesbank Girozentrale v Islington
LBC [1996] AC 669. In England, there is a tendency to treat unconscionability as a
rule of substance not form – this means it is clearly defined rather than just a guiding
principle.

THOSE WHO SEEK EQUITY MUST DO EQUITY

The above maxim ‘equity is discretionary’ is affected by this maxim. It simply means
that if you are seeking an equitable remedy/award you must have done equity
yourself – you must act fairly to the defendant in the future. This is demonstrated
by Chappell v Times Newspapers Ltd [1975] 1 WLR 482 where an injunction was not
awarded to employees who wished to stop their employer dismissing them because
they did not agree to not striking in the future. To ensure the claimant does ‘do
equity’ in the future, conditions can be attached to the grant of an equitable remedy.

THOSE WHO COME TO EQUITY MUST COME WITH CLEAN HANDS

This relates to the claimants past conduct. It means that equity will not help if a
claimant’s prior conduct was considered to be improper. It was decided in Dering v
Earl of Winchelsea [1787] 1 Cox Eq Cas 318, that improper conduct means improper
conduct in a legal sense, not a moral sense. However, in Tinsley v Milligan [1994] 1
AC 340, it was held that the claimant does not need to have clean hands if their
improper conduct is not relied on to claim the equitable remedy. This is a
controversial judgment by the House of Lords because the claimant had not come to
the court with clean hands, and so prima facie, the maxim implies she cannot obtain
equitable relief.

EQUITY TREATS THAT WHICH OUGHT TO BE DONE AS DONE

The true function of this maxim was given in Re Anstis [1886] 31 Ch D 596: where
parties have entered into a contract that is specifically enforceable, equity will treat
the contract as having been performed. This maxim is often relevant where land is
transferred between parties but formalities have not been observed. In such a
situation, the legal title will remain with the vendor, and the purchaser will have a
recognised title in equity. Thus, the vendor is holding the property on a constructive
trust for the purchaser. However, equity will not pretend the property is in existence
when it isn’t; it is only when that which ought to be done can be done that this maxim
will work.

EQUITY WILL NOT ASSIST A VOLUNTEER

A ‘volunteer’ is somebody who has not provided consideration for a particular

transaction. The main application of the maxim is where a donor purports to make a
gift to the donee, but the gift is not effective and the donor retains the legal title.
Equity will not perfect an imperfect gift. However, this maxim is trumped by the
principle of unconscionability. Thus, if a donor purports to make a gift but does so
ineffectively, if their conduct is held to be unconscionable equity will impose a
constructive trust in favour of the donee.

EQUITY ACTS IN PERSONAM

This maxim can be explained by distinguishing between rights in rem and rights in
personam. Rights in rem are good against the world; rights in personam are rights
against a particular person. Equitable rights will always be in personam because all
equitable property rights are defeated by a bona fide purchaser for value.

EQUITY LOOKS TO SUBSTANCE RATHER THAN FORM

In Parkin v Thorold [1852] 16 Beav 59, Lord Romilly MR recognised that equity will
distinguish which is a matter of substance, and which is a matter of form. If they find
that by insisting on the form, the substance will be defeated, they shall not allow the
form to be relied upon. There are a number of examples for this maxim, the clearest
being when a settlor has not specifically said they are creating a trust, equity will
recognise a trust if it is clear the property was to be held for the benefit of someone
else.

OTHER MAXIMS

‘Equity is equality’ means, for example, that if there are equitable interests in a
property, it will assume they are equal shares. ‘Equity assists the diligent’ means that
if there is a time delay in bringing a claim, a remedy may not be awarded because of
the delay. ‘Equity follows the law’ is self explanatory. In most cases, equity will follow
recognised legal rules. However, if there is a conflict between law and equity, equity
will usually prevail. ‘Equity is imaginative’ refers to the flexible nature of equity as
opposed to the rigidity of the common law. ‘Equity protects the vulnerable and weak’
is illustrated by the doctrine of undue influence. This doctrine can be used to set
aside a contract where one party unduly influenced the other. The final maxim,
‘equity is cynical’ is not formally recognised by the courts. However, it underpins a
number of equitable rules. It can be demonstrated by equity’s view on gifts. It will
presume the donor did not intend to make an outright gift. All of the above maxims
are important to understand before delving into trust law.