Conflict between common law and equity

The Earl of Oxford’s case of 1615 occupies a rather unique position in the development of the English legal system and is frequently referred to as the corner stone of equity in the modern English legal system. It could be said that the case shares an Ipso Facto [1] relationship with the Court of Chancery, with each party relying; unconsciously on the others existence for their development. Ipso Facto is a phrase believed to have been made popular by Thomas Gray poet and historian in the 18th century with it’s origins to be found in Old English and Latin.

It is probably appropriate to explore the background behind the Earl of Oxford’s case [2] 

Which was concerned with a parcel of land in London which Henry VIII had gifted to Thomas, Lord Audley, as a reward for procuring the trial and eventual execution of Anne Boleyn By his will Lord Audley left the land to Magdalene College, Cambridge [3] , [4] who subsequently sold it and which were indirectly acquired by the Earl of Oxford.

Magdalene College then challenged the Earl of Oxford’s title to the land on the basis of a statute which prohibited the sale of College lands but against this was the fact that, as part of the original sale, Magdalene College had made an immediate transfer to Queen Elizabeth with the deliberate intention of circumventing the statute.

Magdalene College action acted as the catalyst for the dispute between common law and equity [5] , [6] the dispute set the two Leviathans’ of the English legal system on a confrontational path. Sir Edward Coke, Chief Justice of the King’s Bench, and Thomas Edgerton, Lord Ellesmere, Lord Chancellor. Coke’s agenda was the curtailment of the powers of the Lord Chancellor.

Coke’s complaint was that the Chancellor’s practice of granting injunctions in Chancery to prevent the enforcement of common law judgments which was in breach of statutes designed to prevent appeals from the common law courts.

The Earl of Oxford’s case alleged that the judgment of Coke G.J had been obtained fraudulently. The Lord Chancellor through the Court of Chancery then issued a common injunction on the basis of an unconscionable advantage which had developed in favour of the Magdalene College which denied the Earl of Oxford’s rights to adequate compensation for loss of title, resulting from the enforcement of the common law order against the Earl of Oxford for breaching the statute.

The two jurisdictions then become estranged and a stalemate situation ensued, with no compromise on either side which eventually led to the impasse being referred to the Attorney-General, Sir Francis Bacon, who partitioned the King. The Attorney-General acting on the authority of James I, upheld the use of the common injunction issued by the Lord Chancellor and concluded that in the event of any conflict between the two jurisdictions of common law and equity, equity would prevail.

Common law rules must lead to an unjust or unconscionable outcome. Otherwise, the Lord Chancellor has no jurisdiction to interfere.

The Earl of Oxford’s case demonstrates how fragile and susceptible equity was to political upheaval during the 17th century. Equity was dependent for it’s authority upon the Kings’ prerogative during this period, it was significantly jeopardised by events such as the overthrow of Charles I. The rule of Cromwell during the interregnum [7] . Cromwell (proposed the abolition of Chancery, which he described as ‘the greatest grievance in the nation’) and the Glorious Revolution in 1689.

Although, the restoration in some measure indicated equity’s return to prominence, it continued to remain in a state of flux throughout the 17th century.

In 1690, a bill was proposed that would reverse the Earl of Oxford’s case, fortunately it never progressed into law.

Had it passed the bill passed into law, one can only speculate as to the effects that it would have had on the English legal system and the commonwealths’ system of law.

Equity’s pre-eminence in the English legal system was later enshrined in section 25. Judicature Act 1873-1875 [8] which also served to codify the two jurisdictions with equitable rules prevailing in cases of conflict between the jurisdictions. Uniform procedures in the new court system and court administration allowed for common law and equity to be heard in the same courts. W Ashburner [9] summarised the situation thus “the two streams of jurisdiction, though they run in the same channel, run side by side and do not mingle their waters".

The court of equity was known as the corrective instrument to common law, often determining cases according to reason and ‘good conscience’. Common law [10] , [11] originally operated under the doctrine of stare decisis which was strictly applied where possible to all common law. This meant the law did not develop even when it was obviously in need of change. Strict procedural rules were followed and the only remedy available was damages. Equity [12] was known to enforce the personal obligation; while common law only recognised the legal title.

The Lord Chancellor in the Court of Chancery was not bound by precedent. Instead rules and maxims of equity were developed. These were flexible to ensure even-handedness and fairness. The Court of Chancery recognised the limits of usefulness of money and created new remedies including injunctions and the order of specific performance. There are a number of maxims which are synonymous with equity, they are as follows;

Equity follows the law

One who comes to equity is assumed to come with clean hands

Delay defeats equity

Equality is equity

Equity looks to the intent rather than the form

Equity acts in personam

The English legal system was at it’s nadir following the Norman Conquest 1066 [13] A system of primary law was introduced by the Normans, which existed for the next two hundred years in the generalised form of feudal law. Magna Carta 1215 [14] sought to introduce a more formalised, equitable system of law for the entire kingdom.

Equity could be seen as a by-product of this process. Under the jurisdiction of equity the Provision of Oxford 1258 [15] restricted the issue of writs to a new type of action in an attempt at reforming the system of law that existed. Common law is purported to have existed since time immemorial and was fixed by the Statute of Westminster 1 of 1275 [16] on 3rd of September 1189, the date of Richard I’s accession to the throne.

The disparity which existed between the two jurisdictions [17] has been modified by a series of statutes in an attempt at unifying the jurisdictions; beginning with the Chancery Amendment Act 1850 [18] which gave the court of Chancery the ability to be able to grant the common law remedy of damages.

The Common law Procedure Act 1852-1856 [19] which gave the common law courts the ability to be able to issue equitable remedies. And finally we see the Judicature Act 1873-1875 which attempted further amalgamation with reference to the two jurisdictions.

It is important to note that the division between common law and equity is not as pronounced as the Earl of Oxford’s case would lead us to believe.

Equitable doctrines, such as estoppels’ were increasingly imported into common law, but these were always treated as entirely common law doctrines, (estoppel by presentation).

Common law also accepted that equitable interests could be devised.

Pawlett v Attorney-General (1667) [20] 

Trustees were entitled to damages for loss suffered by the beneficiary in actions on contract. Robinson v Wait (1853) [21] 

Whether a plaintiffs copyright is held on trust for another was taken into account when determining their rights. Sims v Marryat (1851) [22] 

Leases invalid in equity were also invalid at common law.

Phillips v Clagett (1843) [23] 

Equitable interests were frequently accepted by common law in the environment of an action in tort or on a contract. The recognition had the effect of modifying common law entitlements and was extensively referred to when contextualising the claim.

Equity and common law were conceptually distinct; the following examples illustrate this point. Rights in equity could not found a basis for actions in court of common law (unless the action was founded on a common law right in tort or under contract);

Rights in equity could not be relied upon to defend a common law action;

Legal rights could not be decided by a court of equity unless they were admitted by a part or judgment had previously been obtained in a common law court;

Legal damages could not be awarded in equity (Lord Cairns Act (1859) [24] ), which enabled damages to be awarded by a court of equity either in addition to or instead of specific performance; Common law courts could not award equitable remedies or make declarations.