Equity and Trust Law

Running head: EQUITY AND TRUST LAW
Equity and Trust Law
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2EQUITY AND TRUST LAW
Equity is a misunderstood term and hence, often misinterpreted and wrongly applied by
the Court of common law in terms of granting equitable remedy1. As per Jurisprudence, Equity
refers to the power to bring justice to an aggrieved by exercising discretionary power to settle the
rigidity and harshness of the strict laws and rules. In a broader sense, Equity refers to the caliber
to acclimatize the assistance to the situation of a certain case in effect. Nevertheless, in
jurisprudence, equity is not an open-ended phenomenon of endless or immeasurable discretion
vested upon a single judge. While the Common Law Court functioned based on the customs,
tradition and letters of the written law that governed England2. It has been held that the Chancery
Court would not consciously try to correct the strictness of law or to remove its defects under
any given circumstance, beyond the pre-settled principles and rules of equity jurisprudence.
Often the terms ‘equity’ and ‘equitable’ are difficult to be segregated and defined. Both of them
refers to fair, compassionate, just and flexible which results in ambiguous meanings when the
court pronounce its discretionary decisions based on the principles of equity. When the court of
common law points out that it ordered to rescind a contract for relieving a party of its harshness
and rigidity, and pins such decision on the ground of equity, such order speaks nothing about the
principles of equitable interest, precedents or remedies.3 When a decision is delivered based
solely on equity, it lacks the sense of legal analysis and seems more like the Judge’s feeling of
just and fairness under a certain circumstance. However, one of the fundamental element of
equity is its flexible nature, while such flexibility is exercised against some specific rules4.
1 Virgo, Graham. The Principles of Equity and Trusts. (Oxford university press, 2018).
2 Sherwin, Emily L. "Fiduciary Law and Equity: Enforcing Loyalty." (2018).
3 Llewellyn, Karl N. The common law tradition: Deciding appeals. Vol. 16. (Quid Pro Books, 2016).
4 Sorell, Tom. "Law and equity in Hobbes." (2016) Critical Review of International Social and Political
Philosophy 19.1, 29-46.

3EQUITY AND TRUST LAW
In Anglo-American law, the two courts that existed were the Common Law Courts
presided over by Judges, and the Equity Court controlled by the Chancellors who were the high
Minster of the King and also a Bishop of the Church. The Chancellors came up with a list of
substantive rules and remedies, which practically could alter the orders passed by the Common
Law Courts5. In the attempts to define and elucidate the concept of equity, commentators have
laid down that equity is a phenomenon or concept under jurisprudence that used to be
administered by the Chancery Court of England, and now adopted and implemented by the
Courts of all modern country with a sound legal system. In today’s legal system the legal persons
still refers and compares legal remedies with that of the orders of the Common Law Court and
equitable remedies with the remedies provided by the Chancery court or the Equity court. The
court of Chancery have always strived to handle the urgent and the critical matters by means of
preventive justice and specific relief, which the principle of equity advocates. With the advent of
more cases to the Chancery court, a sense of steep competition grew in the mind of the Common
Law Courts judges and it was declared that the equitable remedies had limitations by saying that
the a equity courts did not have the authority to lessen the risk of legal consequences of a party6.
It was also held that judges should not be distracted by the charming tone and fairness of the
concept of equitable remedy as they lack analytical value and precision. It is said that while
granting an equitable remedy, a court cannot deviate from the letters of the law only as it seem
easier and fairer in that circumstance. Principles of equity can only be implemented where a
particular case meets the underlying norms and principles of the maxims of equity7. The
principles of equity comprises a list of rules and norms, some of which are highlighted and
discussed below.
5 Milsom, Stroud Francis Charles. Historical foundations of the common law. (Butterworth-Heinemann, 2014).
6 Klinck, Dennis R. Conscience, Equity and the Court of Chancery in Early Modern England. (Routledge, 2016).
7 Katz, Stanley. "The politics of law in colonial America: Controversies over chancery courts and equity law in the
eighteenth century." (1971) American Law and the Constitutional Order, 46-52.