Transcript Creation, acquisition and transfer of legal and equitable interests

Remembering Equity and
its Role in Property
Relationships
Associate Professor Cameron Stewart
Division of Law
The Blind Men and the Elephant
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John Godfrey Saxe
The Anglo-Saxon Invasions c500AD
The Battle of Hastings 1066
Norman Reorganisation
Sovereignty
 Absolute beneficial
title
 Reception of laws
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 Conquering
 Settling;
 Cessession
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Feudalism
Henry II – the Father of the
Common law
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Curia Regis
General Eyre and
Assizes
Assize of Clarendon
1166 – 12 freemen from
the hundred and 4 from
the town
Henry, Richard Coeurde-Lion and John
Lackland
A’Beckett’s Legacy
The Church Courts
The benefit of the
clergy
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Edward Longshanks Hammer of the
Scots
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Parliament begins 1275
The use of statute as
opposed to ordinance
Nisi Prius
Quia Emptores
Curia Regis – embryonic courts
Court of Exchequer – revenue
 Court of Common Pleas – civil actions
 Court of King’s bench – crime
 Remaining Council functions split into
King’s Council later Concilium Regis and then
Privy Council
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The Writ System
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Bureacracy
Organisation of wrongs
Remedies
Popularity
Recording
Stare Decisis
Common law
What’s the common law meant to
do?
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Persons & Property
Quick, efficient, fair and effective
Real property – real actions- real relief
Seisin
Remedies – return the seisin, pay monetary
damages
Contract and tort
What goes wrong?
The Office of the Lord Chancellor
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Around since Norman
times
Keeper of the King’s
Conscience
Cleric and Keeper of the
Great Seal
Member of Lords, Judge
and Church
Chancery as a Court
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Around the 15th century
Function to repair the failings of Common law
Principles of Christian fairness/conscience
Maxims of equity
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Substance not form
Does not assist a volunteer
Equity follows the law
Clean hands
Discretion and the Chancellor’s foot
The two streams – law and equity
What does Equity do?
Parkinson:
(i) the exploitation of vulnerability or weakness, as exemplified in
principles relating to unconscionable dealing and undue
influence;
(ii) the abuse of positions of trust or confidence, as exemplified in
the law of trusts and fiduciary obligations generally;
(iii) the insistence upon rights in circumstances which make such
insistence harsh or oppressive as exemplified in relief from
penalties and forfeiture, the law of equitable set-off, and the
refusal of specific performance on the discretionary ground of
hardship;
(iv) the inequitable denial of obligations, as exemplified in the
doctrine of part performance and the principle of equitable
estoppel;
(v) the unjust retention of property, as exemplified in certain
constructive trusts and principles of subrogation
The relationship between CL and Eq
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James VI of Scotland
The rise of protestantism
Absolutism of sovereign
– Divine Right of Kings
or King-in-parliament?
Bacon & Ellesmere:
Earl of Oxford’s case
Earl of Oxford’s case
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The Office of the Chancellor is to correct Men’s
consciences for Frauds, Breach of Trusts,
Wrongs and oppressions, of what Nature soever
they be, and to soften and mollify the Extremity
of the Law ... [W]hen a Judgment is obtained by
Oppression, Wrong and a hard Conscience, the
Chancellor will frustrate and set it aside, not for
any error or Defect in the Judgment, but for the
hard Conscience of the Party.
The legalisation of equity
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The Civil War – equity nearly destroyed
Lord Nottingham (1673-82)– father of equity
Lord Eldon – (1801-27) modern rules
Precedent and fixation
Appointment of VC
Poor administration
Infamous delay – record 16 years and still
interlocutory
th
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Century reforms
Bentham and the ‘dog law’
Judicature Acts 1870s – 1970s
The two streams in one courtWindeyer J in Felton v Mulligan
(1971) 124 CLR 367 at 392; [1972] ALR 33 at 46
Fusion fallacies
Salt v Cooper (1880) 16 ChD 545 at 549, Jessel MR said of the
effect of the Act:
It has been sometimes inaccurately called 'the fusion of Law and
Equity'; but it was not any fusion, or anything of that kind; it was
the vesting in one tribunal the administration of Law and Equity
in every cause, action, or dispute which should come before that
tribunal. … To carry that out, the Legislature did not create a
new jurisdiction, but simply transferred the old jurisdictions of
the Courts of Law and Equity to the new tribunal, and then gave
directions to the new tribunal as to the mode in which it should
administer the combined jurisdictions.
Property in CL
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Universalized, reified, fetishized – the materialization of
the common law
Formality
Creation
Transfer
Rights recognised in contract and tort – breach of
contract, trespass, negligence
Remedies for breach of property rights – damages
CL makes orders about the property not the people
Property in Eq
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Substance
Conscience
Power
Responsibility – lunacy, infants, married woman
Trust and confidence
BUT through the logic of precedent not unfettered
discretion
Rights recognised through doctrines of equity –
misrepresentation, undue influence, duress,
unconscionability, fiduciary relationships, part performance,
equitable estoppel, breach of confidence
Remedies – injunctions, specific performance, constructive
trusts, personal orders
Equity makes orders about the people not the property
Property in Eq
Equitable property or interest (equitable fee
simple, mortgages, covenants etc)
 Personal Equities (Gill v Gill)
 Mere Equities (Latec)
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Case study 1: When contracts go bad
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A (vendor) exchanges contracts with B (purchaser)
A gets a better offer from C (he knows about B’s offer)
and completes the sale to C before B knows
Common law approach? Breach and damages – no
property held by B
Equitable approach: breach and specific performance
But what about the property interests?
Case study 1: When contracts go bad
In common law B is not the owner as the contract
has not been completed so the property cannot
be returned
In equity, the rule in Lysaght v Edwards says that B
gets an equitable interest from the exchange and
that it is a form of constructive trust, which can
be enforced against C (when he knows about B)
Case Study 2: Fat Henry and the
problem of trusts
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Henry and the purse
strings
Taxation in Tudor
England – feudal tenures
Primogeniture
Devising land by will
The legal remainder rules
The use
A --------------------------B --------------------C
(Landowner)
(feoffee to use )
(cestui que use)
Legal estate Beneficial estate
CL
Equitable
The Statute of Uses 1535
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Collapse the use
Springing uses
The use on the use
Equity creates property where there was none
before……
Case study 2: Part performance and
the equitable ‘impersonation’
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A Lease for a factory – an agreement to create a
deed
Or a mortgage created by deposit of title deeds
Or a promise to give a life interest if cared for in
dotage…
The requirements for writing
23B Assurances of land to be by deed
(1)
No assurance of land shall be valid to pass an interest at law
unless made by deed.
23C Instruments required to be in writing
(1)
Subject to the provisions of this Act with respect to the
creation of interests in land by parol: (a) no interest in land
can be created or disposed of except by writing signed by
the person creating or conveying the same, or by the
person’s agent thereunto lawfully authorised in writing, or
by will, or by operation of law, ….
The requirements for writing
54A Contracts for sale etc of land to be in writing
(1) No action or proceedings may be brought upon any
contract for the sale or other disposition of land or
any interest in land, unless the agreement upon which
such action or proceedings is brought, or some
memorandum or note thereof, is in writing, and
signed by the party to be charged or by some other
person thereunto lawfully authorised by the party to
be charged…
CL says no deal
Part performance
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Equity looks to substance not form
Was there an agreement?
Did a party act under that agreement and performed an
act to their detriment which relates solely to the
agreement?
Is the agreement one which a court of equity would
order specific performance?
If yes to all then equity creates an interest which is an
equitable impersonation or copy of the common law
interest being claimed