The two streams of the jurisdiction (law and Equity) though they run in the same channel run side by side and do not mingle their waters’ W. Ashburner, Principles of Equity, 1933, Butterworth & Co. Regarding case law and academic opinion, critically evaluate the accuracy of the above statement.
The continued debate on whether Equity and common law merged or it is a fallacy has been the subject of contention between legal stakeholders, with each person having an opinion as to whether fusion took place or not. After the inception of the Judicature Act 1873, the question on whether fusion took place or it was a fallacy gained momentum. The modern law of Equity is based on precedents, similar to other law branches. [1] The statement by Ashburner, on the other hand, outlines that even though Equity and common law run through the same channel, they do not mingle their waters implies that the two are applied differently. This paper will argue that there has been fusion between common law and Equity and that the constant developing and interaction will result in a further substantive merger of the two contrary to the assertions by Ashburner.
The Judicature Act
The Judicature Act 1873 and later on the Senior Courts Act 1981 [2]outline that every court has the jurisdiction to administer equity and common law cases and that where there is a variance between the two then the law of equity in such a case would prevail. However, when it comes to the application of substantive law, then the two laws are administered differently as outlined in the Earl of Oxford case.[3]The High court was given the jurisdiction to administer both common law and equity, which saw the two administered under one rule. However, there emerged controversy on whether the Judicature Act fused the administration of the two or the rules. The argument against fusion is that the judicature only resulted in an administrative fusion and not substantive fusion because if a party brought an equitable claim, then the only remedy availed would be an equitable remedy. This idea gives credibility to the assertion by Ashburner that the two rules do not mix their waters.
According to Lord Neuberger, [4]it would be difficult to imagine that equitable rules would prevail over those of common law. According to him, the judicature Act had fused the two, and then there would be no conflict. In Contrast, Sir Wilson, who was one of the drafters of the Judicature Act, the relationship between Equity and law is divided into three sections.[5] First, according to him, both systems do not clash because common law does not take notice of rights and duties while Equity does. Secondly, the remedies given are different, and lastly, the Act under section 25 outlines that equitable rule shall supersede the other.
According to Jessel MR, [6]the main objective of the Judicature Act was to vest in a single tribunal the power to administer both laws in any action that came before the tribunal. The idea that the judicature Act came in to remove any substantive distinction between equity and common law is referred to as the fusion fallacy.[7]
According to Lord Denning before the judicature Act came into place, the doctrine was said to be running with the land, and only got applied to covenants that were under seal but not applied to agreements but since the law fused the two the position became different. According to him, the status between covenants under seal and those underhand became obliterated.[8]Lord Denning made a further argument in favour of Fusion in Anton Piller KG v Manufacturing Processes Ltd. In the case, the court acted outside its powers and granted the Anton pillar orders to ensure that justice is attained.[9]In United Scientific Holdings Ltd v Brumley Borough Council,[10] Lord Diplock argued against the statement that Equity and common law are like two streams running side by side. According to him, the conservative nature of English lawyers is what made them slow to understand that the two do not run side but instead that they became fused. In the Tinsley case, Lord Wilkinson outlined that having to distinguish between property rights that are enforceable under common law and those under Equity would be surprising because the two already became fused 100 years ago. Therefore, the reality is that in the year 1993, the law of property is one that is a fusion of equitable and legal interests.[11]
There has been a fusion of the law because Equity is utilised in aid of common law where injustice would result from the rigid nature of the law. Judges have the discretion to apply equitable remedies to ensure that they come to a favourable solution. The different positions taken by equity and common law resulted in confusion and conflict. During the reign of King James, it was held that the decisions made by the court of chancery would override the authority of law were necessary to reduce the rigidity of the law. The Judicature act, in my opinion, fused the two systems of the law and therefore, to that extent, it is true that the two laws run through the same channel.
It is clear that up to date, the two laws have become merged and the courts in response apply remedies from both systems of law to administer justice as the specific case may require. Therefore, it is now difficult to distinguish between the two.[12] In Central London Property Trust case, Lord Denning outlined that because law and Equity had gotten merged over seventy years ago, then the promise should get considered in light of the combined effect. Even though there was no consideration in the case, the promise was held as binding. In Attorney-General v Blake,[13] the court outlined the fusion of the law by allowing restitution damages to get applied where the ordinary remedies of common law were inadequate. The case points out that fusion of the two is a reality and judges are utilising their discretion contrary to the dualism point of view. In Western Fish Products Limited v Penwith District Council, [14] the court outlined how remedies and under the law could get used interchangeably to take into consideration public interests.
To assist the court to make its decisions, the maxims got developed. One of the maxims of equity states that there should be no wrong that does not have a remedy.[15] According to Williams, if the lease had been under seal, which would have resulted in the application of common law, then the argument by the tenant would not have prevailed.[16]
By the time the Judicature Act came into play, two cardinal points explicitly outlined the relationship between common law and Equity. The first issue is that the common law content triggered equitable intervention, but the purpose of the response was not to invalidate common law. Secondly, it came about as a necessary intervention based on principles already set in place. Therefore, by the time the judicature Act came into place, the Equity was let ready a party of the legal system as much as common law, but both exited independently. Common law courts even allowed the judges’ discretion to operationalise the principles of Equity. By the year 1873, two systems of law were already operational, and there was no need to solve any conflict between Equity and common law.[17]
The statement by Ashburner is correct because even though the Judicature Act came in place to fuse the two systems of law, the truth of the matter is that no such fusion took place. The judicature Act in England was more procedural and combined the administration of both systems of law to get administered through a common court. [18] The substantive law of Equity and that of common law remain as different jurisdictions that do not mix. [19] The result is that where one has a claim that is based on Equity, then the only remedy available to such a person would be under the equitable remedy. At the same time, a claim premised under common law can only result in a common-law remedy. In Salt v Cooper, [20]Jessel MR outlined that the main object of the Judicature Act was to assimilate the common law and equity business transactions by different courts. Accordingly, there was no fusion, but instead, there was vested in a single tribunal the administration of both Equity and law in every cause of action that came before that tribunal.[21]
Similarly, in support of the fact that the laws became fused, in Errington v Errington and Woods [22] Lord Denning held that both Equity and common law became fused over 80 years ago. The argument was similarly supported in Boyer v Warbey [23] where the court outlined that the distinction between covenants under seal and at hand became obliterated upon the Fusion of common law and Equity. There is no legislation that has explicitly prohibited the Fusion of Equity and common law which was the underlying reason that the court gave the exemplary decision.
The fusion of two was not necessary. However, the problem with this approach is that it fails to recognise that in modern times, judges are using the two systems of laws in unison and are not afraid to integrate the two. However, contrary to the belief that the two fused, Lord Neuberger asserted that the twin streams of common law and Equity were meant to flow separately. Even though the stream of common law would become narrow where it overlapped but did not in any way mix with the waters of Equity.[24]
Both common law and Equity can coexist. It is not uncommon to have concurrent rights at Equity and common law.[25] According to Lord Wilberforce, there would be no difficulty that would arise in recognising concurrent rights and remedies at common law and Equity.[26]The evidence of fusion had taken place became evidenced by the remedies that the court gave out. In Attorney-General v Blake, [27]the court held that a remedy for accounting for profit might become available where the defendant acts in breach of a contract even though pecuniary remedies are customarily given under common law. In Halpern v Halpern,[28] equitable remedies were held to be adoptable at common law.
Different jurisdictions have decided cases in support of fusion of the two. In New Zealand, the courts’ decisions point towards the fusion of the two to create a broad discretion of remedies that the court may give. Similarly, Australian courts also hold the opinion that the law now forms a single composite body. However, the majority of the judges in the Harris case dissented with the view and held that it may still take a lot of time before the two become merged.[29] In Aquacultural Corporation v New Zealand Green Mussel Co Ltd, [30]the court allowed exemplary damage to be given for breach of Fiduciary duty. According to Cooke, fusion in all intent has taken place between equity and common law.[31]However, in Pilmer v The Duke Groups Ltd [32] the approach the court utilised was narrow to preserve the historical foundations of the two laws being separate. According to Kirby J, the concept of contributory negligence as unified with remedies under equity severs the foundation dividing the application of the two doctrines historically, which only acts as a further impediment for judges. Even though historical evidence point towards the division of equity and common law, the law is in a state of constant evolvement and therefore a fusion of the two laws is something that is still in the process. In the coming future, the two doctrines will have fully merged.
The increased debate on substantive and procedural fusion only go towards articulating that moving forward the fusion of the two rules will continue to develop to become one In a move away from the substantive fusion claim, a more moderate approach to the debate is that the two fused together by convergence. According to the view the more law develops the more it becomes proper for the judges to borrow ideas from both systems and apply it to a single case. Because all cases should get treated alike, then the judges can borrow rules to effect justice. In Ettrick v Hunter,[33]Lord Goff held that the merging of the two laws should not in any way result in a rejecting of the proprietary rights under equity. The historical differences between the two is not a ground that should be used to justify the substantive differences between the two. Cases should all be decided alike.Fusion is a move in the right direction because it shows that the two did not become enslaved by their history but instead merged to reuklt in coherence of the law.[34]
In contrast the dualistic claim supports the argument by Ashburner because those who hold the view opine that the laws did not become fused and instead are two dualistic laws that only flow through the same channel but are still distinct because their waters do not merge. According to the dualistic approach, fusion is an impossibility because it would mean that an error has been made where a decision is caused by a mixture of both law and Equity.[35] The dualistic approach criticises the idea of fusion because the substantive way in which the courts apply the two systems have not become fused. Therefore anyone arguing in favour of a merger will be guilty of committing what is referred to as fusion fallacy. The argument against fusion has historical roots which ground argues that it would become unacceptable for a fusion of law and equity to occur.[36]Australian courts have supported this approach, as outlined in the Harris case.
Ashburner argued that the two do not mix their waters even though they run through the same channel.[37] The judicature Act was only intended to effect fusion substantively. In MCC Proceeds Inc v Lehman Bros International (Europe ),[38]it was held that the intention of the Judicature Act was not to ignore the common law rules nor transform equitable interests into legal titles. Dualistic point of view does not hold that there was a fusion between common law and Equity. Instead, it holds that they remain distinct law bodies though they became unified through procedurally and administration through the enactment of the Judicature Act 1873. In the Harris case,[39] the doctrine of Equity and common law cannot get fused because the legislature did not intend for the merging of the two. Secondly, the legal nature of the two was such that there were adequate remedies to provide the plaintiff with an appropriate solution for a claim raised. [40] According to Holdsworth, laws became merged, there were still some areas of the law that distinction of equitable ownership and legal ownership was still apparent such as in the management and formation of trusts.[41]
In contrast, a dualistic point of view opines that legal and equitable proprietary rights are distinct, and trust is therefore dependent on the division of these interests. In Beswick v Beswick[42] the court outlined that Equity must follow the law, and consequently, specific performance was denied because common law provided an adequate remedy.[43]However in Mareva Compania Naveiera v International Bulk carriers [44] the court applied equitable principles because under the circumstances it was just and equitable to do so.
Limits of Fusion
There are two circumstances under which fusion becomes limited. First is where judges use discretion in the application of the principles of Equity. In the Harris case, one of the reasons t6he court outlined for the inappropriateness of monetary damages under Equity was because it involves the imposition of a burden on one party. Under equity, monetary damages would become varied in a bid to attain justice between the parties. According to Baker, the premise of Equity on trust uses a different approach to solve problems different from the approach taken under common law.[45]
Balanced View of the Debate
According to Hanbury and Martin, [46] equitable and legal ownership is different, and that is what all the 1925 provisions of legislation assume when dealing with unregistered land. The law of trust implies that there is a difference between equitable rights and those under the law. [47]To avoid uncertainty in the law, we need to understand the interaction between the two systems and ensure that any new decision is based on fundamental doctrines. There has been a significant shift towards accepting that the fusion of the two systems is indeed taking shape. Therefore, the statement by Ashburner is a statement that does not depict the exact nature of the relationship between Equity and the law. In contrast the two laws became merged and therefore in future the two will continue being fused with judges utilising remedies found under the two rules to effect justice.
Conclusion
In conclusion, even though the Judicature Act 1873 did not expressly authorise the substantive fusion, it is clear that a fusion of the two doctrines takes place with judges independently applying the two separately of the statute. The anti-fusion Criticism does not have a substantive claim both in policy and principle. It is, therefore, correct to say that the Fusion of common law and Equity is gaining momentum with judges looking into how they can apply Equity to claims under the law to ensure justice is seen to get done.
