Equity
Winter Session 2009
Alysia Debowski
Subject outline
Course description
 Teaching arrangements
 Assessment
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 Examination
 Assignment
Weekend schools
 Texts and resources
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Today’s class
What is equity?
 History of equity
 The relationship between Law and Equity
 The maxims of Equity
 The nature of equitable interests
 Equitable interests and Torrens title
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What is equity?
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“the body of principles developed by the
Court of Chancery prior to 1873 as since
modified by courts administering that
jurisdiction”
History of equity
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Development of the common law
Development of the “English” jurisdiction of the
Chancellor
Recognition of feoffments to uses
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Fiscal consequences
Doctor and Student dialogue of Christopher St Germain
The Earl of Oxford’s Case in Chancery (1615) Mich 13
Jac 1; 21 ER 485
Cook v Fountain (1672) 3 Swanst 600; 26 ER 984
The relationship between Law and
Equity
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Common law courts would not recognise equitable
rights, titles and interests
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Equity had no power to decide disputed legal rights and
titles
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Castlereagh Motels v Davies-Roe (1967) 67 SR (NSW) 279
Robertson v Wait (1853) 8 Exch 299; 155 ER 1360
Equity Act 1880, s 4 (Equity Act 1901 s 8)
Equity had no power to award damages
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Goldsborough Mort v Quinn (1910) 11 CLR 674
King v Poggioli (1923) 32 CLR 222
The relationship between Law and
Equity (cont.)
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The common law courts lacked power to give
interlocutory relief
The courts of common law had no power to award
specific performance, or injunctions
The common law courts lacked power to make
declarations
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Rooke v Lord Kensington (1856) 2 K & J 753; 69 ER 986
No power existed to transfer cases from one jurisdiction
to the other
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Mines Royal Societies v Magnay (1854) 10 Ex 489; 156 ER 531
Carter v Smith (1952) 52 SR (NSW) 290
The judicature system
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Judicature Act (Imp) 1873 s 25(11)
Law Reform (Law and Equity) Act 1972 (NSW)
Key features
Fusion fallacies
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Seager v Copydex [1967] 2 All ER 415; [1967] RPC 349
Re Pryce (1917] 1 Ch 234
Walsh v Lonsdale (1882) 21 Ch D 9
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17
Cricklewood Ppty & Invest. Trust v Leighton [1945] AC 221, at 240
Chan v Cresdon (1989) 89 ALR 522
Harris v Digital Pulse Pty Ltd [2003] NSWCA 10
Walsh v Lonsdale (1882) 21 Ch D 9
 'He
is not, since the Judicature Act, a tenant from year
to year, he holds under the agreement and every
branch of the court must give him the same rights ....
There are not two estates as there were formerly, one
estate at common law . . . and an estate in equity
under the agreement. There is only one court and
equity rules prevail in it'.
 How does this reflect the fusion fallacy?
 Progressive Mailing House Pty Ltd v Tabali Pty Ltd
(1985) 157 CLR 17
Harris v Digital Pulse Pty Ltd
[2003] NSWCA 10 per Mason P
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…this fusion fallacy concept is itself fallacious and historically
unsound. … No one to my knowledge advocates incorporation or
borrowing by direct force of the enactment of the Judicature Act
1873 (UK) or its Australian counterparts. … Both "Equity" and
"Common Law" had adequate powers to adopt and adapt concepts
from each other's system well before the passing of the Judicature
Act, and nothing in that legislation limits such powers. They are of
the very essence of judicial method which was and is part of the
armoury of every judge in every "common law" jurisdiction. …
Neither system consistently and automatically ignored the other
before the Judicature Act; and there is even less justification for
suggesting otherwise since the fusion of the administration of law
and equity.
Do you agree?
The maxims of Equity
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Equity will not suffer a wrong without a remedy
Equity follows the law
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Delehunt v Carmody (1986) 161 CLR 464
 Tasita Pty Ltd v Papua New Guinea (1991) 34 NSWLR 691
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When the equities are equal, the first in time prevails
He who seeks equity must do equity
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He who comes to equity must do so with clean hands
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Ryan v Dries [2002] NSWCA 3
Maguire v Makaronis (1997) 188 CLR 449
Kettles & Gas Appliances v Anthony Horderns (1934) 35 SR (NSW) 108
Equity assists the diligent and not the tardy
Equity is equality
The maxims of Equity (cont.)
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Equity looks to the intent rather than the form
Equity regards as done that which ought to be done
Equity imputes an intention to fulfil an obligation
Equity will not assist a volunteer
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Corin v Patton (1990) 169 CLR 540 at 557
Equity will not perfect an imperfect gift
Equity acts in personam
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Penn v Lord Baltimore (1750) 1 Ves Sen 444; 27 ER 1132
Potter v Broken Hill Pty Ltd (1905) 3 CLR 479
Baker v Archer-Shee [1927] AC 844
Commissioner Stamp Duties v Livingston (1965) AC 694; (1960) 107 CLR 411
N Z Insurance Co Ltd v Commissioner Probate Duties (Vic) [1973] VR 659
The nature of equitable interests
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Proprietary – rights that can be exercised directly against property
Equities – right to obtain certain remedies
Mere equity – right to apply to the court for a remedy
Commissioner of Stamp Duties (Qld) v Livingston (1965) AC 694; (1960) 107 CLR
411
Re Leigh’s Will Trusts [1970] Ch 277
Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306; 96 ALR 327
Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265
Silovi v Barbaro (1988) 13 NSWLR 466
Goldsborough Mort v Quinn (1910) 11 CLR 674
Double Bay Newspapers Pty Ltd v A W Holdings Pty Ltd (1996) 42 NSWLR 409
Commissioner of Stamp Duties (Qld) v Livingston
(1965) AC 694; (1960) 107 CLR 411
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High Court:
Dixon CJ – widow had beneficial interest in Queensland property;
beneficial interest must be somewhere while estate is administered
 Windeyer J - widow had interest in Queensland property
 Fullagar J (Menzies J agreeing) – widow had equitable interest in assets
which gave right to enforce proper administration; location of the right is
where it would be exercised ie NSW
 Kitto J – widow had interest in assets, but not any particular assets; that
interest had the most substantial connection with the forum for enforcing
due administration of the estate ie NSW
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Privy Council:
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Widow had chose in action to ensure proper administration of the
estate; location was the proper forum for enforcing those rights ie NSW
– where the executors were
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Which judgement do you prefer?
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Perpetual Trustee v Commissioner Stamp Duties (Shallard’s Case)
[1977] 2 NSWLR 472
Latec Investments Ltd v Hotel Terrigal Pty
Ltd (1965) 113 CLR 265
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Mortgagee exercised power of sale
Sold property to wholly owned subsidiary – later held to
be fraudulent
Subsidiary granted floating charge over hotel to third
party without notice
Subsidiary defaulted under charge – the charge
crystallised and a receiver was appointed
Mortgagor sought to have the sale set aside
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Whose interest should take priority?
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The nature of equitable interests
(cont.)
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The “Deserted Wife's Equity”
 National
Provincial Bank Ltd v Ainsworth
[1956] AC 1175
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Confidential Information
 Wheatley
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v Bell [1982] 2 NSWLR 544
Equitable Security Interests
 Swiss
584
Bank Corp v Lloyds Bank Ltd [1982] AC
Equitable interests and Torrens title
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Barry v Heider (1914) 19 CLR 197
Breskvar v Wall (1971) 126 CLR 376
Bahr v Nicolay (No 2) (1988) 164 CLR 604
Bogdanovic v Koteff (1988) 12 NSWLR 472
Grgic v ANZ Banking Group Ltd (1994) 33 NSWLR 202
Mercantile Mutual Life Assurance v Gosper (1991) 25
NSWLR 32
Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR
326
Davis v Williams [2003] NSWCA 371
Looking back
What are three key things you will take
away from today’s lecture?
 How has your understanding of equity
changed over the last few hours?
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Next class
Assignments of Property in Equity
 Equity & Trusts, Chapter 3
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