Equity - lowest priority

Question 1

What are the reasons for development of equity?

Answer 1

• Limited range of remedies available at common law (compensation, damages)
• Some rights weren’t recognised at common law, such as those of a beneficiary under a trust
• Common law was perceived as mechanical, whereas equity afforded some discretion, and looked at the fairness of the remedy requested, and behaviour of the parties

Question 2

What is meant by an equitable interest?

Answer 2

An interest held by virtue of an equitable title or claimed on equitable grounds, such as interest held by a trust beneficiary

Question 3

Summarise the history of equity

Answer 3

The chancellor started as an advisor dispensing fair solutions where common law failed. Over time, this grew into the separate equitable jurisdiction of the court of chancery, aiming at achieving justice beyond the common law

Question 4

Three dimensions to the early development of equity

Answer 4

• Recognition of new rights, such as those of a beneficiary under a trust
• Granting and enforcement of new remedies such as injuctions
• Implementation of new procedures before or during the trail of civil action, for example discovery of documents

Question 5

What did King James I decide regarding conflict between equity and common law?

Answer 5

In a conflict between available remedies, Equity would prevail over common law

Question 6

Describe the age of legalism

Answer 6

1869 - Royal Commission recommended a root and branch reform of the system

1873-75 - Supreme court established a new high court of justice, and a new court of appeal

Section 25 of 1873 act stated in conflict between remedies, equity would prevail

Question 7

What is meant by equitable rights?

Answer 7

The chancellor recognised and enforced rights and remedies which had no recognition at common law, such as rights of a beneficiary under a trust

Question 8

What is the ‘equity of redemption’

Answer 8

The right of a mortgagor in law to redeem his or her property once the debt secured by the mortgage has been discharged.

Question 9

Why was the equity of redemption developed?

Answer 9

To prevent abuse of the common law enforcement of the lender’s rights against land, given as security for a loan, on the passing of the redemption date

Question 10

What are restrictive covenants?

Answer 10

A covenant imposing a restriction on the use of land so that the value and enjoyment of adjoining land will be preserved

Question 11

What are equitable procedures?

Answer 11

The willingness of the chancellors to adopt and develop new procedures meant that some equitable procedures were sought by litigants prior to proceedings in a common law court.

In this way equitable procedures were considerably more developed and effective than those available through the common law courts

Question 12

British Steel Corporation vs Granada (1980)

Answer 12

Granada TV used confidential British Steel documents in a broadcast. British Steel sought disclosure of the source. The House of Lords held there was no general right for the media to protect sources where disclosure was required in the interests of justice, and ordered Granada to reveal the source.

Question 13

What are Anton Piller Orders

Answer 13

Ex Parte - without notice to the other side

Inter partes - both sides attend, to ask

Question 14

What is an Anton Piller Order?

Answer 14

• An exceptional ex parte court order allowing the claimant and their solicitor to enter the defendant’s premises, to inspect, remove and preserve evidence at risk of destruction.
• Not a true search warrant, as does not permit forced entry
• Ex Parte only given in exceptional circumstances, as defendant is not present

Question 15

What is the three step test to giving an Anton Piller order?

Answer 15

• There is a strong prima facie case against defendant
• Actual or potential damage must be very serious for claimant
• Must be clear evidence defendant possesses relevant evidence in question, and possibility they may destroy it

Question 16

What has the common law application of an Anton Piller order widely been renamed as

Answer 16

A statutory search order - preserves a persons right to refuse to compliance where it would risk self incrimination or exposing a spouse to criminal proceedings

Question 17

What is a Mareva Injunction?

Answer 17

An order preventing the defendant from removing money or other assets from the UK
- Usually granted ex parte

Question 18

For what reasons is a mareva injuction regarded as a high stakes exercise?

Answer 18

• Application is almost always made without notice to prevent transfer of assets before order is granted
• As with most injuctions, the applicant must provide an undertaking to the court to compensate the defendant for any damages
• An order improperly obtained will cost the party and its counsel heavily

Question 19

What are Interlocutory Injunctions?

Answer 19

An injunction can be used as an equitable procedure to regulate the parties conduct prior to determination of a legal dispute

Interlocutory means that it is granted a step on the way to the final disposal of the case

These injuctions are granted at interlocutory hearings which are either ex parte or inter parte.

Question 20

What is a constructive trust?

Answer 20

An equitable remedy resembling a trust imposed by a court to benefit a party that has been wrongfully deprived of its rights due to a person holding a property right they should not possess

Question 21

Who are constructive trusts imposed by and why?

Answer 21

By the courts

When property has been dealt with in an unconscionable manner - e.g stealing, possessing via fraud, or accepting a bribe

Question 22

What is the most common example of constructive trusts?

Answer 22

One resulting from bribery, where somebody in a fiduciary office makes unlawful profit, that money is held on constructive trust for the beneficiaries of his office

Question 23

What is meant by equitable maxims?

Answer 23

He who comes to equity must come with clean hands

• If you ask for help about the actions of somebody else but have acted wrongly, you do not have clean hands and cannot receive the help

Question 24

“He who seeks equity must do equity”

Answer 24

Anyone who seeks equitable relief must be prepared to act fairly towards their opponent

Question 25

Leaf vs International galleries (1950)

Answer 25

buyer purchased a painting believed by both parties to be a Constable, but later discovered it was not. The court held there was an innocent misrepresentation, but rescission was barred due to lapse of time, which ran from the date of contract. The claim in mistake failed because the error concerned quality, not the identity of the subject matter—the buyer still received a painting

Question 26

What is meant by the discretionary nature of equity?

Answer 26

Equitable rights are enforced at the court’s discretion, not as of right, even though law and equity are administered by the same courts. A key principle is the maxim “he who comes to equity must come with clean hands”—a claimant with improper conduct may be denied an equitable remedy. By contrast, legal rights are enforceable automatically once established, without the court weighing the claimant’s conduct or merits.