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Equitable Remedies Notes

This document discusses equitable remedies and the doctrine of concealed fraud. It provides three key points: 1. An equitable right is not as strong as a legal right when dealing with third parties like bona fide purchasers, as equity regards what ought to be done rather than what is done legally. 2. The limits of equity applying what ought to be done narrowly, such as only when specific performance of a contract is available. 3. Equity developed the plea of concealed fraud to allow a plaintiff more time to sue, with the statute of limitations beginning only at discovery of the fraud, as it would be inequitable to allow defendants to conceal wrongdoing and avoid liability.

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1K views2 pages

Equitable Remedies Notes

This document discusses equitable remedies and the doctrine of concealed fraud. It provides three key points: 1. An equitable right is not as strong as a legal right when dealing with third parties like bona fide purchasers, as equity regards what ought to be done rather than what is done legally. 2. The limits of equity applying what ought to be done narrowly, such as only when specific performance of a contract is available. 3. Equity developed the plea of concealed fraud to allow a plaintiff more time to sue, with the statute of limitations beginning only at discovery of the fraud, as it would be inequitable to allow defendants to conceal wrongdoing and avoid liability.

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Shelisa Trotman
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© Attribution Non-Commercial (BY-NC)
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Equitable Remedies

Thursday, February 9, 2012 Lecture 3

Notes:
An equitable right or interest is not a legal right. That may be so between contracting parties and it may serve well to complete a sale or conveyance. But, with regard to third parties, an equitable right is not as good as a legal right when dealing with a bona fide purchaser for value of the legal estate without notice. Thus, an agreement for a lease is not necessarily as good as a lase. The Walsh case important in illustrating that equity regards as done that which ought to be done.

Manchester Brewery v Coombes - It has been suggested that Walsh takes away all differences between legal and equitable estates. It of course does nothing of the sort. The limits of its application are quite narrow. It may be applicable only to cases where specific performance is available.

Swain v Ayers [1888] 21 QBD 289, 293-4 - Parties entered into an agreement for a lease which equity id not specifically enforce, since there had been breaches of the covenant by the tenant. CA: an agreement for a lease of which specific performance will not a lease within the meaning of s 14 (see p 293).

NB: Specific performance will never be granted if the contract is not valid at law. Thus, to say the equity is superior to the common law is inaccurate.

Concealed Fraud:
Common law Statute of limitation is applied literally so that an injured party might lose his right to sue without knowledge that he even enjoyed this right if the guilty party took steps to conceal his wrongdoing from the other party for the statutory limitation period. The only mitigation of this rule is if the concealment of the fraught itself constituted on actionable wrong. In such cases, time would run from the

discovery of the fraud, but only in respect of the fraud itself, not in respect of cause of action.

Equity on the other hand developed the plea of concealed fraud, which constitutes a good reply to the statute of limitation not only in respect of the fraud, but also in respect of the cause of action itself. So, time only began to run in respect of the cause of action when the plaintiff discovered the concealed fraud, or would have discovered it with due diligence.

Concealed fraud is not only a wrongful act which the defendant takes active steps to conceal from the knowledge of the plaintiff, but also includes any willful wrongdoing unknown to the plaintiff at the time when the fraud was committed.

Per Lord Denning in Applegate v Moss (1971) 1 QB 406, 413:

Fraud is used in an equitable sense to denote conduct by the defendant or his agent, such that it would be against the conscience for him to avail himself of the lapse of time.

Pursuant to a contract made, in February 1957, an estate developer and a builder built a home for the plaintiff on a defective foundation making the house unsalable, not repairable and unsafe to live in. The defects were only revealed to P 8 years later when P sought to sell the house.

In reply to a plea from the Ds that the cause of action (for breach of contract) was time-barred by the statute of limitation, P pleaded concealed fraud and the CA accepted his plea and allowed him to recover for breach of contract, and held that time had not began to run until the time of discovery of the concealed fraud in 1965.

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