Tuesday, 15 November 2016
Maxims of equity
1. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A REMEDY
Where there is a right there is a remedy. This idea is expressed in the Latin Maxim ubi jus ibi remedium . It means that no wrong should go unredressed if it is capable of being remedied by courts. This maxim indicates the width of the scope and the basis of on which the structure of equity rests. This maxim imports that where the common law confers a right, it gives also a remedy or right of action for interference with or infringement of that right.
Application and cases
In Ashby v. White, wherein a qualified voter was not allowed to vote and who therefore sued the returning officer, it was held that if the law gives a man a right, he must have a means to maintain it, and a remedy, if he is injured in the enjoyment of it.
In cases where some document was with the defendant and it was necessary for the plaintiff to obtain its discovery or production, a recourse to the Chancery Courts had to be made for the Common Law becoming ‘wrongs without remedies’.
a) If there is a breach of a moral right only.
b) If the right and remedy both were in within the jurisdiction of the Common Law Courts.
c) Where due to his own negligence a party either destroyed or allowed to be destroyed, the evidence in his own favour or waived his right to an equitable remedy.
i) The Trust Act
ii) Section 9 of CPC- entitles a civil court to entertain all kinds of suits unless they are prohibited.
iii) The Specific Relief Act- provides for equitable remedies like specific performance of contracts, injunction, declaratory suits.
2. EQUITY FOLLOWS THE LAW
The maxim indicates the discipline which the Chancery Courts observed while administering justice according to conscience. As has been observed by Jekyll. M.R: ‘The discretion of the court is governed by the rules of law and equity, which are not to oppose, but each, in turn, to be subservient to the other.” Maitland said, “Thus equity came not to destroy the law but to fulfill it, to supplement it, to explain it.” The goal of equity and law is the same, but due to their nature and due to historic accident they chose different paths. Equity respected every word of law and every right at law but where the law was defective, in those instances, these Common Law rights were controlled by recognition of equitable Rights. Snell therefore explained this maxim in slightly different way: “Equity follows the law, but not slavishly, nor always.”
Application and cases
At common law, where a person died intestate who owned an estate in fee-simple, leaving sons and daughters, the eldest son was entitled to the whole of the land to the exclusion of his younger brothers and sisters. This was unfair, yet no relief was granted by Equity Courts. But in this case it was held that if the son had induced his father not to make a will by agreeing to divide the estate with his brothers and sisters, equity would have interfered and compelled him to carry out hi promise, because it would have been against conscience to allow the son to keep the benefit of a legal estate which he obtained by reason of his promise. This decision was held in Stickland v. Aldridge.
Equity follows the law and even if by analogy law can be followed, it should be followed.
i) Where a rule of law did not specifically and clearly apply
ii) Where even by analogy the rule of law did not apply
Bangladesh has not recognized the well-known distinction between legal and equitable interests. Equity rules in
Bangladesh, therefore, cannot override the specific provisions of law. As for example, every suit in Bangladesh has to be brought within the limitation period and no judge can create an exception to this or can prolong the time-limit or stop the rule from taking effect on principles of equity. Such a decision was held in Indian Appa Narsappa Magdum case.
3. HE WHO SEEKS EQUITY MUST DO EQUITY
The maxim means that to obtain an equitable relief the plaintiff must himself be prepared to do ‘equity’, that is, a plaintiff must recognize and submit to the right of his adversary. Scriptures of Islam also inform us to be conscientious:
“Woe to those who stint the measure:
Who when they take by measure from others, exact the full;
But when they mete to them or weigh to them, minish…”
Application and cases
This maxim has application in the following doctrines-
i) Illegal loans
ii) Doctrine of Election
iii) Consolidation of mortgages
iv) Notice to redeem mortgage
v) Wife’s equity to settlement
vi) Equitable estoppel
vii) Restitution of benefits on cancellation of transaction
i) Illegal loans: In Lodge v. National Union Investment Co. Ltd., the facts were as follows. One B borrowed money from M by mortgaging certain securities to him. M was a unregistered money-lender. Under the Money-lenders’ Act, 1900, the contract was illegal and therefore void. B sued M for return of the securities. The court refused to make an order except upon the terms that B should repay the money which had been advanced to him.
ii) Doctrine of election: Where a donor A gives his own property to B and in the same instrument purports to give B’s property to C, B will be put to an election, either accept the benefit granted to him by the donor and give away his own property to C or retain his own property and refuse to accept the property of A on condition. But B can not retain his property and at the same time take the property of A.
iii) Consolidation of mortgages: Where a person has become entitled to two mortgages from the same mortgagor, he may consolidate these mortgages and refuse to permit the mortgagee to exercise his equitable right to redeem one mortgage unless the other is redeemed. The right of consolidation now exists in England but after the enactment of the Law of Property Act, 1925, it can exist only by express reservation in one of the mortgage deeds.
iv) Notice to redeem mortgage: Notice to a mortgagor to redeem one’s mortgage is an equitable right of the mortgagor.
v) Wife’s equity to a settlement: There was a time when woman’s property was merged with that of her husband. She had no property of her own. Equity court imposed on the husband that he must make a reasonable provision for his wife and her children. But, now, Under the Law Reform (Married Women and Tortfeasors) Act, 1935, married women has full right on her property and it is not consolidated with her husband’s property.
vi) Equitable estoppel: A promissory estoppel arises where a party has expressly or impliedly, by conduct or by negligence, made a statement of fact, or so conducted himself, that another would reasonably understand that he made a promise thereon, then the party who made such promise has to carry out his promise.
vii) Restitution of benefits on cancellation of transaction: It is proper justice to return the benefits of a contract which was voidable, and, equity enforced this principles in cases where it granted relief of rescission of a contract. A party can not be allowed to take advantage of his own wrong.
viii) Set-off: Where there have been mutual credits, mutual debts or other natural dealings between the debtor and any creditor, the sum due from one party is to be set-off against any sum due from the other party, and only the balance of the account is to be claimed or paid on either side respectively.
i) The demand for an equitable relief must arise from a suit that is pending.
ii) This maxim is applicable to a party who seeks an equitable relief.
i) Under sec 19-A of the Contract Act, 1872 if a contract becomes voidable and the party who entered into the contract voids the contract, he has return the benefit of the contract.
ii) sec 35 of the Transfer of Property Act embodies the principle of election.
iii) Sec 51 and 54 of the Transfer of Property Act.
iv) In Order 8, Rule 6 of the CPC, the doctrine of Set-off is recognized.
4. HE WHO COMES INTO EQUITY MUST COME WITH CLEAN HANDS
Equity demands fairness not only from the defendant but also from the plaintiff. It is therefore said that “he that hath committed an inequity, shall not have equity.” While applying this maxim the court believed that the behavior of the plaintiff was not against conscience before he came to the court.
Application and cases
In Highwaymen case , two robbers were partners in their own way. Due to a disagreement in shares one of them filed a bill against another for accounts of the profits of robbery. Courts of equity do grant relief in case of partnership but here was a case where the cause of action arose from an illegal occupation. So, the court refused to help them.
The working of this maxim could be seen while giving the relief of specific performance, injunction, rescission or cancellation.
General or total conduct of the plaintiff is not to be considered. It will be seen whether he was of clean hands in the same suit he brought or not. Brandies J. in Loughran v. Loughran said that “Equity does not demand that its suitors shall have led blameless lives.”
i) If the transaction is a against public policy
ii) if the party repents for his conduct before his unjust plans are carried out.
i) Section 23 of the Indian Trust Act- An infant can not setup a defence of the invalidity of the receipt given by him.
ii) Section 17, 18 and 20 of the Specific Relief Act, 1877 - Plaintiff’s unfair conduct will disentitle him to an equitable relief of specific performance of the contract.