Verbal instructions that are then attested and complied with by the named trustees before the death of a testator, fall neatly between the rules of wills and probate and the equitable field of trust law. On this occasion, the wish of a dying man was such that a large sum of money was to be held upon trust for a party outside of his marriage while unknown to his widow.
Having long agonised over his duty to make provisions for a mother and a child borne out of wedlock, it was decided by the testator to set aside several thousand pounds in the wish that five of his closest friends would act as trustees with the express purpose of investing the funds for the benefit of the two named parties, until such time that the trustees elected to provide them with two thirds of the initial sum, before placing the remaining third back into the residuary estate of his final will.
Upon his death, his widow discovered the bequest, and looked to dismiss its validity upon grounds of fraud and contradiction to the terms of the will where his widow and their son were to benefit from his entire estate. As was common to domestic legislation, s.9 of the Wills Act 1837 read that no will (or codicil) shall be valid unless set in writing and signed by the testator in accordance with statute. On this occasion, the instructions given by the deceased were initially verbal, and only put to writing by means of a memorandum drafted by his solicitor, who himself signed as a trustee and submitted it in support of the codicil.
Using the terms contained within the 1837 Act, it was argued that while the trust memorandum was written, the execution of the codicil was oral, and therefore fell outside the powers granted beneficiaries, unless it was in effect, designed to stand for the sole benefit of the widow through the residual estate; in which case the trustees would be acting in fraud should they look to enforce the terms of the codicil.
While decided twice in favour of the trustees, it was later put before the House of Lords, where the rules of equity were scrutinised in conjunction with proven case law. Having examined the principle that ‘equity will not permit statute to be used as a cloak for fraud’, it was found that where a testator propounds a desire to execute a trust, and then proceeds to provide explicit instruction as to its use, any argument that seeks to undermine the intentions of that person through the use of legislation, must then find themselves party to fraud if they would instead stand to benefit from the funds expressly requested for the enjoyment of another.
In circumstances such as these, it was historically preferred that equity imputes the same responsibility as that agreed to by the original trustee, so that they would then act under the same instructions so as to permit the objective of the deceased to be realised, while this transference effectively circumvents the fraud and makes right, that which is prima facie claimed wrong.
Resting upon this proven application of jurisprudence, the presiding Lords established that far from looking to dissect the flaws proposed by the appellants, it was clear that any conflict arising from a lack of signatory validation, was insufficient when looking to overrule the will of the testator against a trust that by all accounts, left no illusions as to its purpose and means of delivery, and so awarded for the trustees while holding that:
“[V]erbal or written instructions communicated by a testator to a legatee and assented to by him create an enforceable trust…”
When a man of standing sought to create a trust for the purposes of a relative’s benefit, he was careful enough to provide specific instructions to his trustee, but unfortunately erred in putting them into action.
A number of years after his death, the beneficiary challenged the assigned executor on grounds that his written desire for her to gain lawful receipt was sufficient enough to constitute an enforceable covenant and that the courts were inter alia wrong to deny it.
In 1852 the settlor drafted a deed-poll that enabled fifty shares of his stock held in the Louisiana Bank to be transferred to his associate (who had become his appointed trustee) on the proviso that under a number of specific conditions he was to hold the shares upon trust for the benefit of his beloved niece.
He also stipulated that during the time between his grant and the date of her marriage or his death, the trustee was to manage the trust and pay any profits arising from the dividend interest to the beneficiary.
During this period the settlor also granted the trustee power of attorney over all of his financial matters, and so while it was possible for the trustee to complete the request, he never managed to fully execute transferral under the banking practice policy, which required the participation of either the settlor himself or a qualified solicitor, and where neither was found, that the power of attorney rested not with the trustee but the bank.
In the first instance the presiding judge awarded that by virtue of the deed construction, a valid trust had existed, and that the fifty shares were to be reissued by the executor to the existing trustee, where they would be again held upon trust for the niece (as had been the case before the settlor’s death).
However under appeal the Court took the equitable view that a legally incomplete gesture cannot be enforced (equity will not perfect an imperfect gift), and so held that it was impossible for the settlor to become a self-appointed trustee for the shares discussed.
Rather it was declared that the funds were to be held upon trust by the executor until amendments could be made to the deed that provided for redistribution in the manner first intended, or until the trustee and beneficiary chose to take individual action against him, while the court reminded both parties that:
“[I]n order to render a voluntary settlement valid and effectual, the settler must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him.”
The phrase ‘two wrongs do not make a right’ is virtuous to the truth that misdeeds can never amount to anything more than loss, yet when adopted for equitable purposes, the exact opposite can be found.
After rising through the ranks of Hong Kong administration, a solicitor turned Director of Public Prosecutions positioned himself whereby he was able to accept sporadic bribes in exchange for his obstruction of justice through the failed convictions of known criminals. Having taken over HK $12m in payments, the respondent in this matter invested the funds into three properties, two of which were in title to himself and his wife and the third to his solicitor.
The discovery of his fraudulent behaviour and subsequent criminal prosecution, raised the question of whether by his breach of fiduciary duty as a servant of the Crown, the sums paid were now held upon constructive trust for his former employers, and that any monetary gain following the purchase of the homes was composite to that trust.
Common law principles surrounding fiduciary breach and profit from such breaches have been long held to apply in favour of the trust beneficiary, despite the illegality on the part of the fiduciary when in receipt of bribes from third parties. This is because when acting beyond the remit of the trustee, and in a manner that is dishonest, the action itself becomes legitimate, if only for the benefit of those the fiduciary/trustee was appointed to serve.
This translates that although the respondent allowed himself to selfishly receive bribes in exchange for personal profit, equity would ascribe that his deceit was immediately converted into a positive gesture conferring direct gain to his employers, as no fiduciary can be seen to profit from his breach as previously mentioned. This, by virtue of the fact of those principles, altered the manner in which the respondent not only executed his plans, but provided the Crown with privilege to acquire beneficial interest in the properties purchased, along with any increase their value since initial conveyance.
When considered by the Privy Council, it was quickly agreed that any conditions imputed by the respondents upon the entitlement of his employers to seek recovery of the debts through the homes, failed to override the fundamental obligations owed to him while serving and acting under fiduciary capacity, despite any notion of separateness or mixed investment on his part.
Within law, there are many types of legal injunctions across a number of different fields, and their purpose is one of prevention or denial of an action, or that of proximity to a party or place. In contract law there are mandatory (or negative) and prohibitory injunctions, while in civil litigation there are interim (also found in criminal law), anti-suit and freezing injunctions. Within family law there are non-molestation and occupation injunctions (or orders), whereas under tort a claimant can apply for either partial or temporary injunctive relief, as well as interim and super-injunctions (depending on the circumstances). In Equity and trust law there are also perpetual (or final) injunctions, along with quia timet injunctions.
The aim of this article will be to look at all of the above, while supporting each one with illustrative citations to help underpin their use, starting first with negative injunctions.
Often sought after the fact, the purpose of this injunction is to force by application, the party that has undertaken an act causing sufferance to the clamant, a liability to reverse the damage caused through new action. There are however, degrees of limitation to its use, as under certain conditions, the extent of work required to restore the balance may outweigh the priority of the claimant seeking redress.
An example of this is Charrington v Simons & Co Ltd, where after selling a portion of his land, the buyer breached the restrictive covenant by resurfacing an adjoining road, despite inherited limitations as to its operational height. When the applying the injunction, the previous judge set conditions upon its use that allowed the respondent to effectively trespass on his land when restoring the road to its intended level; a decision that caused further angst toward the appellant, and that was overturned to ironically set the injunction back into its proper effect. This was explained by Russell LJ, who explained:
“…the judge, in adopting the course which he did, travelled beyond the bounds within which discretion may be judicially exercised; for in effect he sought to force upon a reluctant plaintiff something very like a settlement involving operations by the defendant on the plaintiff’s land which must lead to greatly increased harm to his business as a condition or term of his obtaining a mandatory injunction should the works not prove a satisfactory solution.”
While compelling in their purpose, prohibitory injunctions serve to prevent through inaction, and are often used to control the events that either surround a contractual relationship, or follow when the arrangement is dissolved. Typical scenarios range from former employees prevented from occupying similar positions within a particular radius, or from using their skills to benefit another in a competing field, through to sportsmen unable to play for specific rival teams for a determined period. The caveat within these restrictions is one of a right to live, and so any prohibitory injunction granted must not deny those relevant, the opportunity to work and live, inclusive to the terms afforded others in a similar position.
An example of this is Jaggard v Sawyer, in which damages in lieu were awarded to avoid the imposition of an injunction after completion of a second property upon land that contained restrictive covenants designed to deny such acts. While the defendants argued that attempts were made to explain their intentions, and that due care was shown during the building process, the appellants refused to accept damages, and moved instead to enforce an injunction that by now, was pointless and highly oppressive to the owners and potential tenants of the new house. This point was made clear by Sir Thomas Bingham MR, who noted:
“It was suggested that an injunction restraining trespass on the plaintiffs roadway would not be oppressive since the occupiers of No. 5A could use the other half of the roadway outside the plaintiffs house, but this would seem to me unworkable in practice, a recipe for endless dispute and a remedy which would yield nothing of value to the plaintiff.”
Found in at least three areas of law, these are often used to deny certain actions for a specific period, most often issued pre-trial, in order to preserve order while the parties prepare themselves for the hearing without interruption. That said, it is important that those seeking one are able to rely upon a substantive cause of action, as was explained by Lord Diplock in The Siskina, when he said:
“A right to obtain an [interim] injunction is not a case of action. It cannot stand on its own. It is dependent upon there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened by him, of a legal or equitable right of the [claimant] for the enforcement of which the defendant is amenable to the jurisdiction of the court. The right to obtain an [interim] injunction is merely ancillary and incidental to the pre-existing cause of action.”
It is also not uncommon for the High Courts to issue interim injunctions when criminal matters call, and this position was made clear when in Attorney-General v Chaudry, Lord Denning MR expounded:
“There are many statutes which provide penalties for breach of them; penalties which are enforceable by means of a fine or even imprisonment but this has never stood in the way of the High Court gaining an injunction. Many a time people have found it profitable to pay a fine and go on breaking the law. In all such cases the High Court has been ready to grant an injunction…”
Within tort there is legislative security offered through the Protection from Harassment Act 1997 which explains within s.3, that those seeking relief can apply for injunctions carrying criminal sanctions for non-compliance; as has been seen in celebrity and media related cases, including AM v News Group Newspapers Ltd, where an emergency interim injunction was ordered against a number of leading newspapers, after their photographers descended upon the home of a landlord that inadvertently let one of his properties out to a suspected terrorist; an act which then attracted unwanted and stressful press attention around the claimant’s private residence. The grounds for this restriction were outlined by Tugendhat J, who commented:
“Measures to ensure that respect is given to person’s home and family and family are required by ECHR Art 8 and Human Rights Act 1998 s.6. In so far as the order that I make prohibits disclosure of information, it is with a view to preventing interference with that right by intrusion or harassment, not preventing disclosure of information which is sensitive for any other reason.”
Also known as a Mareva Injunction, this order is issued in relation to assets involved in a civil claim. The injunction will typically apply only to the value argued, and it prevents access by one party that might otherwise seek to remove or sell them for profit. While used to secure their presence during pre-trial and proceedings, the order cannot override the effects of liquidation, and those seeking claim may find themselves denied of success when judgment is made. An example of the strict criteria surrounding freezing injunctions (particularly without notice) was expressed by Neuberger J in Thane Investments Ltd v Tomlinson (No1), where he remarked:
“… the duty of a person seeking an order, and in particular an order which can have as substantial an effect as a freezing order, in the absence of the Defendant against whom it is sought, is strict and important. An order against a person in his absence, particularly when it is a freezing order, which is a very serious infringement of his rights and liberties, can only be justified on appropriately clear and strong facts and risks. It should only be granted in circumstances which provide maximum protection for the person against whom the order is to be made. The courts have frequently emphasised the importance of compliance with the various requirements of the Rules relating to the obtaining of without notice orders.”
Designed to provide victim protection within intimate or blood-related relationships, this injunction can be sought by the party involved, or under s.60 of the Family Law Act 1996 whereupon a third party can seek the court’s issue if those suffering are too afraid to request it. The purpose of this order is in the name, inasmuch as denial of physical access when used to molest, harass or threaten the claimant to the point of legal intervention through verbal abuse and unwarranted use of that person’s private property. The importance of this order was outlined by Wall J in G v F (Non-Molestation Order: Jurisdiction), where after the original court failed to grant protection to a single mother, it was overturned and expeditiously supported through the words:
“Part IV of the Family Law Act 1996 is designed to provide swift and accessible protective remedies to persons of both sexes who are the victims of domestic violence, provided they fall within the criteria laid down by section 62. It would, I think, be most unfortunate if section 62(3) was narrowly construed so as to exclude borderline cases where swift and effective protection for the victims of domestic violence is required.”
Sometimes issued in conjunction with a non-molestation injunction, the occupation injunction confers power upon the court to prevent those in question from occupying a property. This can be used in both domestic abuse cases and also civil disputes surrounding property ownership or residency. As this injunction runs risk of serious restriction to individual rights, the circumstances surrounding its use must be fully evaluated to avoid counter claims by the affected party. This strict yet delicate approach was underlined by Lady Justice Black in Dolan v Corby, where she stressed:
“…it must be recognised that an order requiring a respondent to vacate the family home and overriding his property rights is a grave or draconian order and one which would only be justified in exceptional circumstances, but exceptional circumstances can take many forms and are not confined to violent behaviour on the part of the respondent or the threat of violence and the important thing is for the judge to identify and weigh up all the relevant features of the case whatever their nature.”
Falling under the umbrella of interim injunctions, a super injunction reveals greater, yet highly focussed powers when preventing actions of third parties. Typically used to deny publication of potentially damaging material, this order can be issued without notice, and not only denies public access, but anonymises the applicants identities, making it an effective tool for public figures and corporate entities alike. The validity of this injunction was well explained by The Master of the Rolls in JIH v News Group Newspapers Ltd, where it was outlined:
“…the claimant’s case as to why there is a need for restraints on publication of aspects of the proceedings themselves which can normally be published is simple and cogent. If the media could publish the name of the claimant and the substance of the information which he is seeking to exclude from the public domain (i.e. what would normally be information of absolutely central significance in any story about the case who is seeking what), then the whole purpose of the injunction would be undermined, and the claimant’s private life may be unlawfully exposed.”
Perpetual (or final) injunctions
Unlike interim injunctions, these orders are issued at point of judgment, and therefore remain in effect for an unlimited period. An example of this is Law Society v Kordowski, in which a website designed to allow members of the public free expression of their disdain following direct experience with named solicitors, was challenged upon numerous litigious grounds. This case was one of a number of individual matters, and when moving to award final and indefinite removal of the site and future publications, Tugendhat J iterated that such injunctions were imperative when:
“The procedural remedy of representative proceedings, coupled with an injunction, may be the best that the law can offer at present to protect the public from the unjustifiable dissemination of false information about the suppliers of goods and services. It is also the means by which the court may protect its limited resources in time and judiciary from having to deal with large numbers of claims by different claimants against the same individual on the same or similar facts.”
Quia Timet injunctions
In much the same as mandatory injunctions serve to ‘undo’ the damage done, quia timet injunctions are anticipatory, in that their purpose is the prevention of potential future harm, that while proactive in design, relies upon compelling evidence to provoke court dispensation. The importance of overwhelming argument was made clear by Lord Dunedin in Attorney-General for Canada v Ritchie Contracting & Supply Co Ltd, when he outlined:
“Any restraint upon that at the instance of the other party must consist of an injunction of the quia timet order. But no one can obtain a quia timet order by merely saying ” Timeo ” ; he must aver and prove that what is going on is calculated to infringe his rights.”
In closing, it must be noted that this is by no means an exhaustive list of injunctions; however it is hopefully detailed enough to provide a sound knowledge base when an understanding of their differences and relevance within case law is a priority. It may also pay to consider that in many instances there will always be degrees of overlap, as nothing in life is ever straightforward, and it is only through the investigative efforts of the judges that the attributable criteria can emerge.
Purpose trusts, and those with intended beneficiaries can be hard to distinguish, and so it can often fall to the courts to reexamine the intention of the settlor, so as to avoid failure where none need exist. In a case involving a company trust deed, appointed trustees, valued employees and a forfeiture clause, the terms contained within it were challenged when the company itself looked to sell some of the land granted for use, as was expressly prescribed in the trust.
In 1917, aircraft manufacturing companies Airco (A) and H. H. Martyn (H) merged to become Gloster Aircraft Co. Ltd; and in 1936 a trust deed was constructed between H and a number of trustees, which provided that a plot of land and a right of way had been conveyed to the trustees to be held on trust for H, and that the trustees were to allow H to take out a mortgage on the land in order to pay A.
In another part of the deed it was agreed that the trustees were empowered to manage the land and grant use of it to the employees (and others by agreement) for sports and recreational purposes by way of weekly subscriptions. The caveat to this arrangement was that when the subscription percentage dropped below seventy-five percent of the male workforce, or the company fell into insolvency, the land reserved was to be sold to Cheltenham General Hospital, and the proceeds used to settle the mortgage owed to A.
Roughly thirty years later, H decided to sell a portion of the land to pay for maintenance work, and at this point the question arose as to (i) liability to pay any excess funds to the Hospital, (ii) whether the trust allowed the trustees to sell any part of the land, and (iii) the integrity of the trust as to the exactness of the beneficiaries, which were deemed to be undeterminable.
When the details of the deed were scrutinised, it was argued that as the nature of the trust was one of purpose and not benefit, it could not be enforced as the purpose was not one of charity but general enjoyment. For this reason it was contended that the trust must fail, and that H was now free to use the land as it wished; however, the court took a different view and explained that while governance of the trust did include the use of the land by parties beyond the employees, it was at the discretion of the trustees and therefore a power rather than a specific point of benefit.
This interpretation changed the nature of the trust from purpose into one of direct benefit, as the names and identities of the employees (including those unsubscribing) were readily ascertainable. This translated that the trust was in every sense, valid, and that to the knowledge of the court, the subscription levels had remained above that of the percentage set, particularly when reference to s.61 of the Law of Property Act 1924 outlined how “the masculine included the feminine”.
There are within the discipline of equity, a number of maxims reverted to when settling many common law matters. The aim of this article is to present them in as exhaustive a manner as possible, while including notable cases that explain their application.
Equity follows the Law (Aequitas sequitur legem)
The nature of equity is one that supports, rather than overrules the balance of justice, however it must also be stressed that where the moment calls, equity will go against those principles in pursuit of a fair outcome that common law fails to provide. A suitable case example for this isStack v Dowden, in which an unmarried couple shared a home for over twenty years while raising their children, until the time came for separation. Upon parting, the father argued that as the two parties enjoyed joint legal title, beneficial interest was automatically deemed equal, unless robustly proven otherwise.
This sentiment was echoed in the above maxim, and until this case had been presented, it remained common law that equal beneficial interest was assumed to mirror that of legal title; however, the evidence presented by the respondent was overwhelming to the point that for the first time, the percentages were divided heavily in favour of the mother, while this reexamination of beneficial assumption was instigated by Baroness Hale of Richmond, who urged:
“The issue as it has been framed before us is whether a conveyance into joint names indicates only that each party is intended to have some beneficial interest but says nothing about the nature and extent of that beneficial interest, or whether a conveyance into joint names establishes a prima facie case of joint and equal beneficial interests until the contrary is shown.”
Where the equities are equal, the law will prevail
Frequently tied to property dealings, this maxim relates to two parties seeking title to a property without awareness of each others rights. An example of this might be a beneficiary to an estate who is unaware that a third party has since acquired legal title by means of a purchase (as sometime happens when wills are not updated nor properly constructed). The courts will view both potential owners as equal, however where the legal owner can prove ownership free of fraud, the latter will succeed. This position was underlined in Pilcher v Rawlins, where it was clarified by James LJ that:
“[S]uch a purchaser’s plea of a purchase for valuable consideration without notice is an absolute, unqualified, unanswerable defence, and an unanswerable plea to the jurisdiction of this court. Such a purchaser, when he has once put in a plea, may be interrogated and tested to any extent as to the valuable consideration which he given in order to show bona fide or male fides of his purchase, and also the presence of the absence of notice; but when once he has gone through that ordeal, and has satisfied the terms of the plea of purchase for valuable consideration without notice, then…this Court has no jurisdiction whatever to do anything more then allow him to depart in possession of that legal estate.”
Equity looks to the substance rather than the form
This is a fairly descriptive maxim that serves to keep focus on legal proceedings in such a way that holds the principle of fairness above that of policy or written codes of conduct. This is not to say that where statute dictates a course of action, equity will seek to ignore that; in fact, under those terms, the black letter of legislation will always win the day.
Instead, equity looks at the form of the subject matter, rather than allowing the intention to dissolve in favour of caveats that work against common law, and obstruct a proper outcome. This was demonstrated through the words of Lord Romily Mr in Parkin v Thorold, who remarked that an agreement between a vendor and purchaser did not rest upon the limitations of time, and that when charges brought against the vendor for specific performance altered the essence of the contract, it was equity that referred the parties to the form of the arrangement:
“[T]ime was originally not of essence of the contract…although express notice will make time of the essence of the contract, where a reasonable time is specified…the notice of the 21st October did not specify a reasonable time for this purpose.”
Equity will not permit statute to be used as a cloak for fraud
While perhaps limited in scope, the effects of this maxim can be appreciated within property law matters, as it is a legal requirement under section 53(1)(b) of the Law of Property Act 1924 that any contracts for sale or occupancy must be written. And so in Bannister v Bannister, the owner of a property conveyed a party rent free occupancy of the home for life, after which they tried to evict them. It was then argued by the defendant that an oral contract existed which thus defeated the act of statute when the respondent went back on their promise.
Equity imputes an intention to fulfil an obligation
Relating to ambition and intention, the aim here is to hold to account the statements or actions by a party that are later required to be enforced, regardless of any reasonable changes in circumstance, and when the court finds that no such fulfilment has occurred, the obligation to do so will be levied through equity.
An example of this is Lechmere v Lady Lechmere, in which a Lord bound himself to purchase land for an agreed sum, that would then pass through death to his wife. Upon his passing, it was discovered that he had failed to uphold his requirement during the lifetime of their marriage, by purchasing other lands that now fell within the residue of his estate, and required a successor in title other than his son. Through the application of this maxim, the court allowed the transfer to his wife for the amount agreed, and thus his obligations were deemed satisfied, as was expressed within the judgment which read:
“[W]herever a thing is to be done either upon a condition, or within a time certain, yet if a recompence can be made which agrees in substance, though perhaps not in every formal circumstance, such a recompence shall be good, and shall go in satisfaction of the thing covenanted to be done.”
Equity regards as done that which ought to be done
There are times in law where the misdeeds of others wind up obscuring the natural order of events, and so it is that the equitable maxim above is crucial to redressing the imbalance, and putting matters where equity can reign. A fitting case example would beAttorney-General for Hong Kong v Reid, where a senior crown prosecutor received bribes to obstruct the course of justice, while employed in a manner that bestowed fiduciary duties.
When it was discovered that those illegal payments had been invested in a number of properties, it was agreed that those homes were held on trust by the appellant for the benefit of the Crown; and while the rules of equity prevent a debtor to the injured party being a trustee for the monies received, the Court of Appeal allowed that conflict to stand in order for the outcome to find form, and for natural remedy to occur. This decision was supported by Lord Templeman, who commented:
“It is unconscionable for a fiduciary to obtain and retain a benefit from a breach of duty. The provider of a bribe cannot recover it because he committed a criminal offence when he paid the bribe. The false fiduciary who received the bribe in breach of duty must pay and account for the bribe to the person to whom that duty was owed.”
Equity acts in personam
Because some matters involve effects belonging to individuals that may have since moved abroad, the principle that equity acts against the person provides domestic courts with an ability to extend their reach without interruption of foreign laws. This may come into play when a property owner or business person has entered into a contract that binds them within the United Kingdom, but whose absence may permit avoidance of liability for remedy. There are of course limitations to this maxim, and where the laws of the country occupied prevent such imposition, the party accused may yet evade its grasp. This was explained by Lord Cottenham in ex parte Pollard, when he outlined:
“[C]ontracts respecting lands in countries not within the jurisdiction of these courts…can only be enforced by proceedings in personam which courts of equity are constantly in the habit of doing; not thereby in any respect interfering with the lex loci res sitae.”
Equity will not suffer a wrong to be without a remedy (ubi jus ibi remediam)
Much like the founding principle of equity itself, there are times when common law can inadvertently create unjust reward for those who deserve no such fortune. And so it is that when defective legal rulings are left wanting, the maxim ‘no misdeed should go unpunished’ can be applied to restore equality, while in many respects mirroring the maxim ‘equity regards as done that which ought to be done’.
An example of this is Ashby v White, in which a member of the public community was denied the right to vote by local policemen, who wrongly acted on the damning advice of parish members, claiming he was unfit to cast opinion. When taken to court, the claimant was awarded damages, after which the ruling was later overturned in favour of the policemen.
This compelled the man to issue a writ of error against Parliament on grounds that such a verdict allowed any member of a local authority to choose who could vote, when such powers were conferred upon central government. When it was appreciated that a legal process had allowed this kind of miscarriage, the initial judgment was upheld and damages paid, while the court expressed that:
“[A]s all parliamentary causes are to be determined in parliament, it was conceived that this matter was properly determinable in the House of Commons only; and that the courts of Westminster-Hall not being authorized by any act of parliament, had no cognisance of it.”
He who seeks equity must do equity
‘Do unto others as you would have them do to you’, might be another phrase better known to some, and so again equity commands the same from those seeking remedy. It is after all, the bedrock of law that fairness and equability must at all times remain in view should the rule of law justify its own existence; so when one party brings action against another, it must act accordingly should it wish those accused to do the same. An excellent example of this is Chappell v Times Newspapers, where Megarry J explained:
“If the plaintiff asks for an injunction to restrain a breach of contract to which he is a party, and he is seeking to uphold that contract in all its parts, he is, in relation to that contract, ready to do equity. If on the other hand he seeks the injunction but in the same breath is constrained to say that he is ready and willing himself to commit grave breaches of the contract…then it seems to me that the plaintiff cannot very well contend that in relation to that contract he is ready to do equity.”
He who comes to equity must come with clean hands
Once again we look to integrity and depth of character when assessing claims of inequitable conduct, except those claiming must themselves prove their argument does not rest upon misdeeds of their own within the parameters of the matter. An example of this isHasham v Zenab or Barrett v Barrett, where two brothers worked together to avoid the loss of a property during business liquidation.
When the party losing their business asks the other to purchase the home (held by the assigned trustee) before refurbishing it and selling it for a substantial profit, the buyer later refuses to pass the sale proceeds back to his sibling. The brother retaliates by taking action against him, but unfortunately during the hearing it emerges that the former owner acted in collusion so as to avoid surrendering the property as payment to his creditors, therefore his request for equitable remedy was built upon deception and avoidance of duties owed. This lapse of moral fibre was explained by Richards J, who noted:
“He has in effect pleaded the unlawful purpose in paragraph 15(1)(a) of his particulars of claim : the purpose of purchasing the property in the name of John was “to avoid its being repossessed by the Trustee in Bankruptcy”. Without that purpose, the agreement or arrangement has no rational explanation. Thomas needs to allege and prove it in order to establish the agreement, but in doing so he relies on his own illegal purpose and thereby renders his interest unenforceable.”
Delay defeats equity
Fettered through the confines of the Limitation Act 1980 and the estoppel doctrine of laches, this maxim underlines that when seeking legal remedy, it is imperative that the claimant moves to argue with haste, as the passage of time will ultimately work against any reasons to the contrary. That aside, there are particular beneficiary rights exempt from delay, and those include breach of fiduciary duty, undue influence or recession of contract; while s.36 of the 1980 Act refuses to prevent claims on grounds of acquiescence, as this in itself can stand as evidence of that restraint. An excellent case for the examination of this maxim is Erlanger v New Sombrero Phosphate Co, in which Lord Jackson cited the comments in Lindsay Petroleum Co v Hurd:
“The doctrine of laches in courts of equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct done that which might fairly be regarded as equivalent to a waiver of it, or where, by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material. But in every case if an argument against relief which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances always important in such cases are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.”
Equity will not allow a trust to fail for want of a trustee
As clearly explained within the title, this maxim states that in the event that a trust has been constructed in the absence of a trustee, or that through time those appointed have since passed, the courts will take the necessary steps to ensure the trust is honoured, and a suitable trustee will stand in receipt. This power is conferred to the courts under the Trustee Act 1925 and requires no reliance upon common law to succeed.
Equality is equity (aequalitus est quasi equitas)
Often applied to manage the distribution of assets between beneficiaries, this maxim will allow the court to distribute equal shares between any number of parties where no prior agreement has been found. While used primarily with trusts, this is also found in divorce proceedings, where evidence aside, the husband and wife cannot fully establish the exact proportions of the monies remaining after the fact. An example of this is Burrough v Philcox where Lord Chancellor Cottenham remarked:
“I think myself justified in giving effect to the intention, which appears to me to be sufficiently apparent upon the will, of giving the property to the nephews and nieces, and their children, subject to the selection and distribution of the survivor of the son and daughter; and that they all constitute the class to take all the property as to which no such selection and distribution has been made.”
Equity will not assist a volunteer
In its most simplest of forms, this maxim provides that equity will not, by virtue of their proximity, assist a party indirectly involved in a matter of grant, whether by marriage or by trust (as is most often applied). In the latter instance, a lack of consideration for the benefits of such a trust automatically renders the claimant void of support when seeking remedy, and further renders them incapable of instructing a trustee to the same end. A volunteer can however, sue for breach of duty or agreement where they are so associated, and can attain that those in trust are there for the benefit of the volunteer and hold only for their needs (where applicable).
Equity will not perfect an imperfect gift
The willingness to give freely of something must extend beyond words and take effect through action, or equity cannot enforce the gesture within the courts. This would apply to anything under common law, but is typically found in property and trust matters where a party alleged to have been conferred that of a physical form are left wanting, and so in search of remedy through the principle above. An excellent case example for this denial is Curtis v Pulbrook, in which a company director made efforts to pass on a number of shares to his daughter while in the process of liquidation, but who did so without formalising the transfer within the requirements required under company law. In concluding the error, it was remarked by Justice Briggs that:
“…without his assistance in making available the duly completed stock transfer forms, neither his wife nor his daughter could perfect the intended gifts without further assistance from Mr. Pulbrook…it follows that there was not an effective gift of Mr Pulbrook’s beneficial interest either in the 14 or in the 300 shares which he attempted to give respectively to his daughter and to his wife so that, in the result, there is nothing to prevent the charging order being made final in relation to all of them.”
While of a strictly familial nature, this case relies upon elements of land law and principles of equity for its proximation of fact. After a decade-spanning relationship of trust and obligation observed by the appellant, it falls to the House of Lords to lay to rest the true meaning behind the time shared between two cousins.
The core of this dispute rests within the subjective disparity of those seeking claim to the estate of a private farmer, and the man who knew him probably better than anybody. After growing up and working on his father’s farm, the appellant found himself extending his energies to his older cousin, after witnessing him suffering loss both through death and divorce. Having no children of his own, the cousin had continued to toil the land left him, and in turn looked to the appellant to help manage the considerably extensive freehold.
For one reason or another, the arrangement required no payment exchange, and so it was that until the death of the landowner, the two men worked the farm and developed it further, through an intimate relationship based upon the appellant’s unique ability to understand the emotion and intentions of a man renowned for his narrow vocabulary and deep introspection.
When upon his death, the appellant followed up on his understanding that the farm had been bequeathed him, the claim of succession was contested on grounds of proprietary estoppel, and the ambiguity of true intention displayed by the deceased. There were principally two events that triggered the assumption of his entitlement, namely (i) a gesture that indirectly disclosed the plans of the elder cousin in relation to deaths duties, and (ii) the inherent nature of their close friendship, and the disappearance and subsequent implied revocation of a will drawn up eight years prior to his passing.
Needless to say, the appellant had over the passage of time, made numerous adjustments to his own circumstances, in order that the relationship could sustain the changes discussed and alterations incorporated into the estate; and there were a number of other minor events that further supported his interpretation that he would be the sole successor of his cousin’s farm. Unfortunately for the respondents, the principle of proprietary estoppel relies upon the inability to identify the land discussed, therefore the challenge brought against the appellant was fundamentally flawed, while it was more importantly noted by one of the presiding judges that by all accounts, a constructive trust had by definition, been created through the dealings and partnering of the two individuals during the lifetime of their relationship.