AMITY University - Dubai

School of Law
EQUITY AND TRUSTS
Tutor: Sethu Nandakumar Menon

Module - LAW543
2024/25

Concept of Equity & Historical

Development of Equity and
Trusts
 I - What is Equity/Nature of
Equity - 1
• From Aristotle’s Ethics and what is to be understood as considering
the difference between common law and equity:
– “For equity, though superior to justice, is still just … justice and equity
coincide, and although both are good, equity is superior. What causes the
difficulty is the fact that equity is just, but not what is legally just: it is a
rectification of legal justice.”
– “The explanation of this is that all law is universal, and there are some
things about which it is not possible to pronounce rightly in general terms;
therefore in cases where it is necessary to make a general
pronouncement, but impossible to do so rightly, the law takes account of
the majority of cases, though not unaware that in this way errors are
made. … So when the law states a general rule, and a case arises under
this that is exceptional, then it is right, where the legislator owing to the
generality of his language has erred in not covering that case, to correct
the omission by a ruling such as the legislator himself would have given if
he had been present there, and as he would have enacted if he had been
aware of the circumstances.”
 I - What is Equity/Nature of
Equity - 2
• In Earl of Oxford’s Case (1615) 1 Ch Rep 1, per Lord Ellesmere:
– “the office of the Chancellor is to correct men’s consciences for frauds,
breach of trusts, wrongs and oppressions … and to soften and mollify
the extremity of the law”
• Lord Dudley v Lady Dudley (1705) Prec Ch 241, 244, per Lord
Cowper:
– “Now equity is no part of the law, but a moral virtue, which qualifies,
moderates, and reforms the rigour, hardness, and edge of the law, and
is an universal truth; it does also assist the law where it is defective
and weak in the constitution (which is the life of the law) and defends
the law from crafty evasions, delusions, and new subtleties, invested
and contrived to evade and delude the common law, whereby such as
have undoubted right are made remediless: and this is the office of
equity, to support and protect the common law from shifts and crafty
contrivances against the justice of the law. Equity therefore does not
destroy the law, nor create it, but assist it.”
 I - What is Equity/Nature of
Equity - 3
• Common law and equity were always distinct: the courts of
common law were in Westminster Hall at one time, the courts of
equity were in Lincoln’s Inn Hall.
• Judicature Act 1873 merged the two streams of courts, however
the intellectual distinction between common law and equity
remains very important.
• Equity has been described as a body of rules that were
developed and applied by the Court of Chancery in order to
mitigate the harshness of the common law.
• Equity is not a system of law within itself as such and it certainly
doesn’t replace the common law. However, it operates alongside
the common law in some situations, to enable the courts to give
effect to the true intentions of the parties to a transaction in
circumstances where a strict application of the legal position
wouldn’t achieve that.
 I - What is Equity/Nature of
Equity - 4
• This flexibility to take account of individual circumstances
is one of the most important characteristics of Equity
• In fact, there are some areas where the principles of
Equity are all-important and in which the common law
plays a very small role. Trusts are a classic example of
this.
• The rules of equity are those rules which, prior to the
passing of the Judicature Acts 1873–75, were
administered by the Court of Chancery. Until that time,
there were separate courts of common law and equity,
each applying their own rules.
 I - What is Equity/Nature of
Equity - 5
• For the sake of convenience, however, many actions
which would have formerly been heard in a court of
equity are now assigned to the Chancery Division of the
High Court of Justice.
• Although the law of trusts is part of the law of equity,
equity’s jurisdiction is not limited to trusts.
• The common law provides only damages, while specific
performance and injunctions are available in equity.
Although the rules that govern the law of trusts are
drawn exclusively from equity, at times some knowledge
of particular areas of the common law will be needed,
most particularly the rules of common law relating to the
transfer of personal and property rights.
 I - What is Equity/Nature of
Equity - 6
• The twelve propositions set out below are culled, as a list, primarily from
Snell’s Equity, (31st ed., 2004) by McGhee. The trust is built on equitable
principles and the following, key equitable principles will emerge again and
again in your studies.
• Equity will not suffer a wrong to be without a remedy
• Equity follows the law
• Where there is equal equity, the law shall prevail
• Where the equities are equal, the first in time shall prevail
• He who seeks equity must do equity
• He who comes to equity must come with clean hands
• Delay defeats equities
• Equality is equity
• Equity looks to the intent rather than to the form
• Equity looks on that as done that which ought to have been done
• Equity imputes an intention to fulfil an obligation
• Equity acts in personam
 II - English Private Law: Conflict
between Common Law & Equity - 1
• Given that the rules of law and equity are sometimes different,
situations are bound to arise where there is a conflict between the
answer given to a dispute at common law and that given in equity.
• A conflicts rule was therefore needed for such situations, and it
was held as long ago as 1616 in the Earl of Oxford’s case that
where the rules of common law and equity were in conflict, the
rules of equity prevail. That is still the law today: Senior Courts Act
1981, s.49.
• As a matter of history, the common law predated equity by many
years, and the reason why rules of equity arose was to deal with
situations in which the common law was unable to give relief. The
rules of equity do not, therefore, comprise a complete system of
law. Rather, they presuppose the existence of the common law,
acting as a gloss or supplement to it in certain well-defined
circumstances.
 II - English Private Law: Conflict
between Common Law & Equity - 2
• As Maitland in Equity – A Course of Lectures (1909) famously
explained:
– At every point equity presupposed the existence of common law...Equity
without common law would have been a castle in the air, an impossibility.
• It is a mistake of thinking that equity is synonymous with fairness or
justice, and that the rules of equity are simply what the student (or a
judge) thinks is fair or just.
• It is therefore vital to appreciate at an early stage that equity is a
system of rules in exactly the same way as the common law, and that
it has a system of precedent which is exactly the same as that
operated at law. The legal method employed by the equity judges is
no different from that employed when they wear their common law
hats. Although equity started out as providing ad hoc responses to
common law injustices (as indeed did the common law), it soon
settled down to become a coherent system of rules, the content of
which did not alter with the identity of the particular judge
 II - English Private Law: Conflict
between Common Law & Equity - 3
• As long ago as 1818, Lord Eldon, one of
the greatest equity lawyers, in one of his
last judgments before retirement,
responded to such a criticism by saying:
– Nothing would inflict on me greater pain in
quitting this place than the recollection that I
had done anything to justify the reproach that
the equity of this court varies like the length of
the Chancellor’s foot. (See Gee v Pritchard
(1818) 2 Swan 402, 414.)
END