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Substantive Fusion and To What Extent There Has Been Substantive Fusion in English Law - Essay Example

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This paper under the headline "Substantive Fusion and To What Extent There Has Been Substantive Fusion in English Law" focuses on the fact that the substantive fusion refers to the operation of equity and common law together in resolving of disputes. Fusion debate has still not ended. …
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Substantive Fusion and To What Extent There Has Been Substantive Fusion in English Law
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Substantive Fusion and To What Extent There Has Been Substantive Fusion in English Law Introduction The substantive fusion refers to operation of equity and common law together in resolving of disputes. Fusion debate has still not ended ever since the making of the observation by Ashburner as “the two streams of jurisdiction, though they run in the same channel, run side by side, do not mingle their waters”1 Fusion of the two separate jurisdictions would amount to “unprincipled cross fertilisation”2 Sir George Jessel stated in Salt v Cooper3 that the main object of Judicature Acts 1873 and 1875 was not the fusion of law and equity, but the vesting in court of all the administration of law and equity in all actions coming before that tribunal.4 On other hand Lord Pollock passed a dictum in United Scientific Holdings Ltd v Burnley Borough Council5 that confluent streams of law and equity have surely mingled now. This was also accepted by the judges in the House of Lords. The case of United Scientific involved the timing of service of notices giving rise to invoking of rent review clauses. The landlord’s late serving of his notice was questioned in the court based on the stipulation “time is of essence”. The Law of Property Act 1925, in section 416 provides that a rule of equity can be incorporated in a body of legal rules as interpreted by Lord Pollock who was also right in saying that system of equity and law had fused with each other making no distinction between law and equity. Although this view of Lord Pollock was in the extreme, it was endorsed by Lord Denning saying that the fusion was complete in his Landmarks in the Law. However in one of the earliest cases Walsh v Lonsdale7 after the coming into effect of Judicature Acts 1873-1875, Sir George Jessel mentioned “There is only one court, and the equity rules prevail in it.” 8 In 1994, Lord Brown-Wilkinson Tinsley v Milligan9 observed that English law was now a single law comprising of both equitable and legal interests. And that a person owning either type of estate had the right of property in rem and not the right in personum alone. Lord Golf also observed in Napier and Ettrick (Lord) v Hunter10 that the judges have to now look both the authorities of equity and law as a single system. As litigants were finding it difficult to get justice in the common law courts, the Chancellor authorised by the King to decide disputes in equity, started performing duties in equity as a forum for corrective justice. Common law courts would only accept written document as an irrefutable evidence of debt. In practice, when debt was repaid, the document evidencing used to be cancelled. Some times, the lender would again make a claim without cancelling the debt. As the written document alone was the acceptable evidence, the debtor could not prove repayment by any other means and be faced with the order of the common law court for repayment to the lender again. In such cases, the Chancellor would be approached by the debtor by filing other forms of evidence on repayment based on which the Chancellor would call the lender and enquire with him by series of questions which if the lender did not answer to the satisfaction of the Chancellor, the Chancellor would pass an order restraining the lender from enforcing the order of the common law court. This was known as “common injunction”.11 In the above, the manner in which the Chancellor passed the order without ignoring the common law rule of “irrefutable evidence “ shows that “equity follows law” since the Chancellor would have passed order in favour of the lender had he found the evidences in his favour. Secondly, the equity acts in personum in that the Chancellor did not create any legal or property right. 12 The Chancellors originally had been bishops, archbishops and cardinals and hence, origins of law of trusts are attributed to Roman and Cannon laws.13 There are already legal and equitable trusts in trusts law. The tracing of property in equity is possible only if there is a fiduciary relationship. In property law, equitable doctrine of part performance could be enforced only by an equitable remedy. The legal and equitable interests are always distinguishable unless there is an intervention by a statue. The distinction is demonstrated by the position that the legal interest are rights in rem i.e against the whole world where as the equitable rights cannot be enforced against the bona fide purchaser of a legal estate for value without notice.14 Contrary to Pollock’s view, the dichotomy between equity and law has only grown up ever since. Lord Nicholls has observed in A-G v Blake 15 that the distinction has arisen as “an accident of history”. In general law other than trusts, legal and equitable rights are also distinct. There are overlappings also as in the case of an injunction which is an equitable remedy and can be obtained for an anticipatory breach of contract, or to restrain a nuisance which is a common law claim. In A-G v Blake, the House of Lords ordered equitable remedy of account of profits when it was found that remedy of damage in common law was inadequate. Although equitable remedy of account of profits is possible only in case of fiduciary relationship, the House of Lords chose this route to correct a wrong. But in the case Seager v Copydex Ltd, 16 wherein only equitable remedy was possible, a common law remedy of damages was awarded since the equitable remedy for breach of confidence and the remedy of an injunction as an equitable remedy would have been ineffective. Thus it would be seen common law remedy is possible in the place of an equitable remedy as could be seen in another instance of Spycatcher case A-G v Guardian Newspapers Ltd 17 In Tinsley v Milligan18, an equitable principle was merged into the common law rule. It entitled a claimant to enforce a property right out of an illegal contract and the claimant need not prove illegality with evidence to assert his title. In this case, the conflict between law and equity was quite obvious. Two women bought a house in one of their names so that the other could make a fraudulent claim for housing benefit. When their relationship strained, the legal owner sought to evict the other woman. The other woman who was the defendant, relied on her equitable ownership in the disputed property. Thus the principle that “he who comes to equity should come with clean hands” was not applied by the court. This case balancing illegality and unjust enriched, presented difficulties. Tinsley v Milligan exempted a litigant from relying on her own fraud. In yet another case of Tribe v Tribe19, transfer of shares from father to son was involved. The case which had the presumption of advancement led the court of appeal to presume that the “father would be able to rely on the illegal purpose so as to rebut the presumption of advancement as the illegality (the avoidance of the cost by the tenant of a schedule of dilapidations} had not proved necessary and had not been carried out.”20 However both the cases have been decided consistently in that the wrong-doers with good intentions got their relieves in equity. Miss Milligan recovered her equitable interest in spite of her fraudulent act and the father also got back his shares although he had fraudulent designs. Baba Femi21 asserts that with the fusion of the courts by the Judicature Acts 1873 combining law and equity jurisdictions, there should be no justification for treating law and equity separately any longer since sections 24 and 25 lay down the principles for concurrent administration of law and equity. Thus Babafemi states that when a an action is brought before the High Court where in the plaintiff claims entitlement of equitable right or legal remedy against the defendant or the defendant wants to rely on an equitable defence to the claim of the defendant, the high court should give the same relief as the chancery court would have given had the matter been referred to it. The following are certain hypothetical situations in which the High court knowingly has to give relief to the illegitimate claims as if there had been no equitable rights to other party being deprived of as a result. 1) If A‘s money is stolen by B who is a bankrupt or if A’s money is transferred to B by a fundamental mistake of fact, A can trace it at common law in priority to B’s creditors as per the rule established in Taylor v Plumer 22 If however, B has mixed the stolen money, A cannot trace it at common law. A cannot trace it under equity either in the absence of fiduciary relationship between A and B who is a rogue.23 2) Where A’s money is transferred to b either by fraud, duress or under a mistake of fact not fundamental, A can trace it under common law disregarding B’s creditors provided A is still entitled and rescinds the transaction. If B has already mixed it with his own money, B cannot trace it nor can he trace it under equity for want of fiduciary relationship with B.24 3) If B transfers the money he got from A in the above manner to some one with details of its origin or to volunteer who mixes it with his own money, A cannot trace both in common law as well as in equity.25 4) Suppose B has put it in a separate account in a bank, A can trace it at common law as it has not been mixed. If the money has been mixed, A cannot trace it both at common law and equity. 26 In all the above four scenarios, if B is insolvent, the gainers are his creditors as they share B’s estate equally along with A. This is really curious since B’s creditors are allowed to gain fortuitously at A’s expense because of B’s bankrupt act. Femi points out that common law has not found a remedy in such situations. However this would not have been a problem if common law court had not insisted on fiduciary relationship for tracing under equity. Femi suggests that if fusion of law and equity is facilitated, then there should be ways to find a remedy for a legal owner to trace into the mixed fund or have the equity lift its veil so as to trace it under equity without a fiduciary relationship.27 All said and done, Ashburner’s comments seems irresistible in view of the comments of Lord Watson made in Ind, Coope and co v Emmerson28 .Lord Watson had said that purpose of the Judicature Act was to facilitate availing of remedies in one court without forcing parties to approach different courts resulting in multiplicity of proceedings and the act enables parties to avail legal or equitable claim. And that the Act of 1873 only deals wit remedies and not the rights of the litigating parties.29 Oldham30 quotes Joseph Powell31 having protested that fusing of law and equity is “subversive of first principles” and that a purely legal right cannot be discussed in a purely equitable jurisdiction and vice versa and these are undeniably axiomatic. They are self as self evident as that black is not red, or white black”32. Grant Gilmore has also said in his Death of Contract 33 that the doctrine of consideration in contract law which is legal and the doctrine of promissory estoppel which is equitable are poles apart and these contradictory principles cannot co-exist and ultimately one must end up swallowing the other. Oldham, however, says that in spite of the criticisms of Powell and Gilmore, the two doctrines of law and equity have lived together with occasional uneasiness, for more than a century since the fusioning achieved by the judicature acts of 1873. Although fusion of the law and equity at the administration level was achieved in 1873, it was enough of a substantive fusion as well, as it has been discovered that law and equity are not ‘matter and anti-matter’ as once feared and now it is quite evident that law and equity have complemented each other harmoniously.34 Conclusion The cases cited above have shown that since the amalgamation of law and equity by the Judicature Acts at the administrative level, the Judges have not failed to notice the hardship of the litigants and have given relieves in law where equity has failed and in equity where law has failed. With this, it appears substantive fusion is already in place substantially and we need no more or less than what has been achieved given the fact that fusioning is not possible in single identity as red cannot be black or vice versa. . Bibliography Books Ashburner Walter, 2009, Principles of Equity, Books LLC, p 18 Grant Gilmore, The Death of Contract (Columbus: Ohio State University Press, 1974), 61. J.J.Powell, (1790) Essay Upon the Law of Contracts and Agreements, 2 vols London for J.Johnson and T Whieldon R.P. Meagher, J.D. Heydon And M.J. Leeming, Meagher, Gummow And Lehane, 2002, Equity: Doctrines And Remedies, 4th Edn, Butterworths: Australia Wilkie Margaret, Malcolm Rosalind, Luxton Peter, 2008, Q & A: Equity and Trusts2008 and 2009, ed 6, Oxford University Press, US. Journals Babafemi F.O.B., (1971) Tracing Assets: A Case for the Fusion of Common Law and Equity in English Law, The Modern Law Review, Vol. 34, No. 1 (Jan., 1971), pp. 12-28 Edinburgh Review 14 (1875): 179, 180, as quoted in A. S. Manchester, A Modern Legal History of England and Wales, 1750-1950 (London: Butterworths, 1980), 149. Oldhams James, [2004), A Profusion of a Chancery Reform, Law and history Review, 22 (3) p 609-614 Cases A-G v Blake [2000] 3 WLR 625, p 634 Ind, Coope and co v Emmerson [1887] 12 App. Cas. 300 at 308 Napier and Ettrick (Lord) v Hunter [1993] AC 713 Salt v Cooper, [1880] 16 ChD 544 Seager v Copydex Ltd [1967] 1 CLR 923, CA Spycatcher case A-G v Guardian Newspapers Ltd (No 2), [1990] 1 AC 109 (p 286) per lord Goff Tinsley v Milligan [1994] 1 AC 340 Tribe v Tribe [1996] Ch107 Taylor v Plumer (1815) 3 M & S. 562 United Scientific Holdings Ltd v Burnley Borough Council (1978) AC 904 Walsh v Lonsdale [1882] 21 ChD 9 Others History and development of equity, available at viewed on 9 December 2009 Law of Property Act 1925 (c20), available at < http://www.opsi.gov.uk/RevisedStatutes/Acts/ukpga/1925/cukpga_19250020_en_1 > viewed on 9 December 2009 Read More
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