University Essay: Equity and Law - Common Law, Equity, and Estoppel

This essay delves into the fundamental differences between equity and common law, highlighting their historical development, principles, and applications. It begins by defining equity as a system developed in the English Chancery Court, operating alongside common law, which originated from judicial precedents. The essay contrasts the rigid rules of common law with equity's flexible approach, emphasizing equity's role in addressing gaps and injustices not adequately covered by common law, particularly in areas like fiduciary obligations. It discusses the maxims of equity, such as 'Equity acts in personam' and 'Equity will not suffer a wrong to be without remedy,' and clarifies that while equity supplements common law, it is not a codified law itself. The essay then examines the doctrine of estoppel in both equity and common law, distinguishing between common law estoppel (including estoppel by record and conduct) and equitable estoppel. It explores different types of estoppel, including estoppel by representation, and analyzes their applications and effects in legal contexts. The essay supports its arguments with references to primary and scholarly secondary sources, illustrating how the differences in estoppel exemplify the broader distinctions between common law and equity.

Running head: EQUITY AND LAW
EQUITY AND LAW
Name of the Student:
Name of the University:
Author Note:

1EQUITY AND LAW
Introduction:
The fiduciary obligations concept has developed out of the equity together with ethical
and moral behavior and the significance to ensure that these being placed in places of trust,
power and liability must not abuse this place for any personal benefit1. In the jurisdictions that
follow English Common law, as held by Baker, John, equity is the type of law which has resulted
out of English Chancery Court and now being used in concurrence with the common law2. On
the other hand, in actual, common law has originated as mentioned by Llewellyn, Karl N, from
the precedents of the tribunals and courts3. The most feature of common law it is developed
through the judicial decision. In cases where the court is not sure about the result depending on
the facts of such cases, it may consider decisions of the courts previously made on similar facts.
However, there lie distinctions between common law and equity. In this essay, the concepts of
equity and common law together with doctrines of estoppels in equity and common law also
have been elaborated.
Discussion:
As per Kovacs, Kathryn E, common law is regarded as the oldest law which is being
followed widely in the tribunals and courts since time immemorial4. It had gradually gone
through development and growth in the royal court of King’s Bench, Exchequer and the Court of
Common Pleas in 14th century, there appeared a gap or vacuum which was unable to be
addressed by the common law. Due to the strict rules of the common law, as held by Wills,
1 Miller, Paul B. "Defining the Scope of Fiduciary Liability." [2017].
2 Baker, John. Introduction to English Legal History. Oxford University Press, 2019.
3 Llewellyn, Karl N. The common law tradition: Deciding appeals. Vol. 16. Quid Pro Books, 2016.
4 Kovacs, Kathryn E. "Superstatute Theory and Administrative Common Law." Ind. LJ 90 [2015]: 1207.

2EQUITY AND LAW
Emma Marie, common people were deprived of their duties and rights5. They were not getting
any benefit from the Common Law Courts. To resolve it, the Chancery Court introduced the
doctrine of equity that is aimed at bridging the gaps between Common law and its extent, scope
and application. Apart from this, equity allows a flexible approach in application which the
Common law failed to do because of its rigidness.
Equity is a significant aspect of the private law system of the Australia. Several cases of
the year of 1980 showed that the Australian High Court had gratified the application of the
traditional doctrine of equity. As per Ryan Philip A, the New South Wales state is particularly
known for its strength in the Equity jurisprudence6. Equity as put forwarded by, is nothing but a
fair just rule and attempted to provide proper judgment to the individuals on the basis of equity
and circumstances and facts of a particular case7. The main remedy provided by the Common
law is the monetary compensation in any case to determine the successful party in that case. Due
to this, the courts were restricted to adjudicate cases that require considering issues other than
monetary compensation. The doctrine of equity allows the court to go beyond the limits set by
the common law on it. The judges weigh and shift the facts and issues of a case and then
adjudicate it by allowing remedies in the form of damages, injunctions and other remedies as per
the circumstances of that particular case. The judges in the Common law courts in order to arrive
at a decision consider the previous judgments and legislations.
The term equity used in a legal decision like decree, judgment or order must not to be
confused with the equity in terms of natural justice. The essential features of the term equity are
elaborated in the next paragraph.
5 Wills, Emma Marie. "The Roles of Judges and of Judge-Made Law in English Common Law and the Civil Law
Family of Legal Systems." Anglo-Ger. LJ 3 [2017]: 114.
6 Ryan, Philip A. "Equity: System or Process?." The Catholic Lawyer 3.1 [2016]: 10.
7 Maine, Henry Sumner, and Dante J. Scala. Ancient law. Routledge, 2017.

3EQUITY AND LAW
In development of equity, in the early period the main factors of controlling were good
faith, good conscience and justice as held by Pikis Georghios M8. A set of maxims control the
working of the principle of equity when those cases were not covered by any precedents or law.
These maxims are not any set of rules but they are general principles that can be referred and
considered in certain cases. As per Snell’s Equity, the maxim does not cover a single case
entirely but they usually overlap one another in their application. But all the maxims can be
summed up and covered under two main maxims of ‘Equity acts in personam’ and ‘Equity will
not suffer a wrong to be without remedy’9.
As discussed above, the concept together with the origins of common law and equity are
different from one another. The common law has grown through different ages over a long
period of time. The law courts have considered the cases and explained what is to be done in
these cases. Common law is actually a judge made law. The rules used here are very strict in
application and also formal but these are very flexible and can be altered to suit the need of a
case. Equity is actually a set of legal principles that is supplemental to the common law. It does
not contradicts or oppose the common law but it aims to grant justice where it cannot be granted
by the common law.
Equity is not a law as it cannot be codified or cannot be put under any act. Common law
is an independent legislated legal system as compared to equity. Equity has no independent
existence; it always considers the presence of common law and works under its control. It cannot
operate alone without the common law but the latter can efficiently act and operate without any
support from equity. When there is any coalition between these two, the rules of equity will
8 Pikis, Georghios M. "Origin and Principles of Equity." An Analysis of the English Common Law, Principles of
Equity and their Application in a former British Colony, Cyprus. Brill Nijhoff, 2017. 39-42.
9 Swadling, W. J. "Substance and procedure in equity." Journal of Equity 10.1 [2016].

4EQUITY AND LAW
follow common law. The main aim of equity is to supplement the common law according to the
principle of fairness, justice and good conscience.
As said earlier, equity is not law. But it follows law. There is a very common and
versatile maxim based on which several legal issues have been decided. The maxim is ‘Aequitas
sequitur legem’ that means the ‘equity will not follow a remedy which is contrary to the law’.
The Chancery courts have never attempted to overrule the provisions of common law but it aims
at bridging the gap between the common law and the delivery of justice.
The distinctions between common law and equity can be analyzed by throwing light on
the doctrine of estoppel in equity and common law. According to Paul Martin, Estoppel is a
doctrine which bars a person from denying or asserting anything which is contradictory to the
previous act or statement of that person or by a previous judicial decision on which another
person has depended or acted to their detriment10. The term estoppels means to stop. This
principle of estoppel is used to prevent a party from acting contradictory to his past acts or
representations. In the common law, estoppel is used a defence whereas in equity it is used either
as a defence or as a caue of action.
There are mainly two types of estoppels; first one is the common law estoppels of record
and second one is the estoppel arising out of a conduct. The first type can be again sub divided
ito estoppel by judgment, issue estoppel and estoppel by deed.
The estoppel by judgment works on the basis of the famous principle of res judicata that
stops a party in a litigation from denying in any later litigation between that party and another
10 Martin, Paul. "Estoppel: Binding promise without a contract: Court of appeal considers proprietary estoppel." LSJ:
Law Society of NSW Journal 23 [2016]: 93.

5EQUITY AND LAW
party to the actual litigation, anything decided between the parties by judgment in that first case.
It is put forwarded by KM Clermont11.
Issue estoppel bars a party from raising issues of law or facts that have been already
adjudicated and determined between the parties by some order, decree or judgment of any past
litigation.
The term deed means a document created for official purpose and it can be used to make
either a separate independent promise or liability or a bilateral contract and other transactions. In
estoppel by deed, the parties to the particular deed are barred from denying any statement or act
or allegation of fact mentioned in the deed already. For example, a person declares the grant of a
lease of a land of which he had no right or title as an owner. After some months, when such land
was given to him as a gift from his grandmother, he becomes the actual owner of such land. He
is now stopped from denying that since he had no ownership before, the grant of lease is invalid.
Estoppel by record or Estoppel per Rem Judicatan is as per Benedicte Fauvarque-
Cosson, a type of estopple that arises as a matter of judicial estoppel or action estoppels where
the decision made in the previous case can avert the same parties from taking any further legal
action on the same matter or cause of action12.
The second type is the estoppels out of conduct where it consists of several different
types of estoppels that are available to both common law and equity. In the famous Discount
Finance Ltd v Gehrig’s NSW Wines Ltd case, Chief Justice Jordan attempted to list the various
categories of estoppels like the common law estoppel, estoppel by representation and equitable
11 Clermont, Kevin M. "Res Judicata as Requisite for Justice." Rutgers UL Rev. 68 [2015]: 1067.
12 Fauvarque-Cosson, Bénédicte. "Estoppel." Encyclopedia of Private International Law. Edward Elgar Publishing
Limited, 2017. 675-681.

6EQUITY AND LAW
estoppels by acquiescence13. However, most useful and valid classification of estoppel can be
made into equitable estoppel and common law estoppels.
In the common law, apart from estopple of record, there is another category of estoppels
called ‘estoppel is pais’ or common law conventional estoppel. It consists of the followings; the
ordinary common law estoppel by representation and estopple by representation. The former
type of ordinary common law estoppel by representation is based on the actions of the party
against whom it is held and not on representations made by that party. This type of estoppel bars
a person from denying a presumption that is based on legal relation between him and other as
held by Mason and Deane Justices in the case of Legione v Hateley14.
In estoppel by representation, any person who by making representation has made other
party to alter his position is stopped from denying the fact as represented by him. Estoppels by
representation as held by GM Pikis, has emerged after the common law estoppels in pais, which
has its origin in the Chancery Courts15. This category of estoppel has arisen from the
representation of a fact existent fact and when a relation is available between the parties as
observed in the case of Jorden v Money 16. In both categories of common law estoppels, there has
to be a legally enforceable agreement or valid contract among the parties.
There are three categories that can be found in equitable estoppels, they are
proprietary estoppels, estoppels by representation and promissory estoppels.
13 Finance Ltd v Gehrig’s NSW Wines Ltd [1940] 40 SR [NSW] 598, 602-3.
14 Legione v Hateley [1983] 152 CLR 406, 430.
15 Pikis, Georghios M. "Estoppel." An Analysis of the English Common Law, Principles of Equity and their
Application in a former British Colony, Cyprus. Brill Nijhoff, 2017. 65-66.
16 Jorden v Money [1854] 10 ER 868.

7EQUITY AND LAW
The estoppels by representation were developed first in the equity and along with the
common law it was incorporated17. In the earlier days there was no need for the representation by
any words or act with the support by consideration or detriment to party. More precisely, the
representation could be presented in forms of present fact or future intentions. Considering the
case of Hammersley v de Biel, a daughter was married to a suitor by her father in lieu of a
promise that he will leave a big amount of money in his will18. After the marriage of the suitor
and the girl, the father expired. He did not make any will of leaving any sum of money to the
suitor. After the father’s death, the suitor sued the executor of the estate stating he was enforced
with a promise by the father and the executor was alleged that he was stopped from accepting the
statement that was made by his father-in-law. According to the House of the Lords, the father’s
estate was required to be paid to the son-in-law as promised by his father-in-law.
During the later period of 19th century, there were two limitations that were found on the
estoppels by representation. Estoppels by representation were limited by the House of the Lords
from representing the existing facts in return of intentions or some future oriented matter. The
House of the Lords held the statement that the Estoppels by representation had to be limited to
defensive use only at common law.
It is important to mention that Estoppels by representation is also well recognized not
only at common law but also in equity. In the Discount Finance Ltd v Gehrig’s NSW Wines Ltd
it was observed that an individual is prevented by Estoppels by representation, the person who
with the representation of fact have made someone else act in response of that representation in
17 McFarlane, B. [2014]. The Law of Proprietary Estoppel. Oxford University Press.
18 Hammersley v de Biel [1845] 12 Cl & Fin 45; 8 ER 1312

8EQUITY AND LAW
order to change his position. It was to deny all the facts that were represented. In the case of
Pickard v Sears, this form of estoppels is established in common law19.
The impact of Estoppels by representation can be noted when the court accepts the
estoppels by representation. During this situation, the party on whose against the estoppels is
applied cannot make any assumption for his former position. Also, any former legal rights cannot
be asserted by him.
According to Alden 20 The promissory estoppels is used when a party assures on making
some representation to some previous legal relation in regard to the rights available under such
relation will not let to enforce in future. Therefore, it causes the other party to take action on the
basis of such assurance. The specific doctrine has been accepted as well as applied in Australia’s
high courts for the case of Legione v Hateley21.
On the specific discussion, there have been acute suggestions made. it was suggested to
have one unified doctrine rather than separate categories of common law and equitable estoppels.
It is for it will include not only common law but also equitable estoppels. Considering the case of
Foran v White, both Deane J and Mason CJ held that the opinion that common law estoppels and
equitable estoppels shoud be combined together in order to form a unified unitary doctrine22.
Also, in the case of Commonwealth v Verwaven, a similar perspective was presented that
suggested the same proposal23. When the case of Grundt v Great Boulder Pty Gold Mines at 674,
McHugh J held that the objectives of common law and the equitable doctrines is to prevent any
19 Discount Finance Ltd v Gehrig’s NSW Wines Ltd [1940] 40 SR [NSW] 598,603
20 Alden, Eric. "Rethinking Promissory Estoppel." Nev. LJ 16 [2015]: 659.
21 Legione v Hateley [1983] 152 CLR ; ALR 1, Waltons Store [Interstate] Ltd v Maher [1988] 164 CLR 387; 76
ALR 513, Giumelli v Giumelli [1999] 196 CLR 101; 161 ALR 473, sidhu v Van Dyke [2014] 251 CLR 505; 308
ALR 453.
22 Foran v White White [1989] 168 CLR 385; 88 ALR 413
23 Commonwealth v Verwaven [1990] 170 CLR 394; 95 ALR 321

9EQUITY AND LAW
sort of loss to the party that asserts estoppels using coercion or force on the other party for
sticking to the presumption on which the former has abstained from acting or even acted24. It is
important to mention that the common law doctrine of estoppels in pais is considered as a rule of
evidence. It is a tool that works for stopping a party from not accepting any assumptions of fact
needed in order to determine the rights of the parties. Also, since the equitable doctrine creates
rights, the party is prohibited from contradicting the assumption of fact or law only till the time
equitable rights are remains.
Considering the case of Commonwealth v Verwaven Mason, the attempt to introduce a
single overarching doctrine was made by Deane J and Mason CJ. It was not supported by
Dawson J and McHugh J. there was differences in opinion and it continued in Rogers v The
Queen in which it was considered that the estoppels issue was in relation to the matters of facts
or law that was decided by earlier court order and it was only applicable to civil proceeding25.
The majority of the judges of High Court in Waltons Stores v. Maher determined a type
of equitable estoppels by representation that consists of cause of action and is applicable in the
cases in relation to representations as to intention and other aspects of future26.
The major difference between the concept of estopples in equity and at common law is
that in common law, some existing fact will be present. On the other hand, the equitable estopple
will be applied even when it comprises of facts and matters of future conduct or intention.
In some of the cases, the judges of Australian High Court have made queries to the
boundaries between the categories of estoppels. Proprietary estopple means creating a
proprietary right or interest in land when the correct formalities or requirements were not
24 Grundt v Great Boulder Pty Gold Mines [1997] 59 CLR 641
25 Rogers v The Queen [1994] 181 CLR 251; 123 ALR
26 Waltons Stores v. Maher [1998].

10EQUITY AND LAW
present. It can be used to create freehold ownership, licence, easement or lease as held in the case
of Yaxley v Gotts27. In Walton Stores v Maher (1998), Chief Justice Mason and Wilson and
Brennan JJ attempted to merge the proprietary estopple into a single doctrine of equitable
estoppels. But, in the case of Commonwealth of Australia v Verwayen, Justice Deane made a
distinction between the estoppels by conduct from proprietary estoppels28.
Conclusion:
As seen in the above discussions, the majority of the decisions made by the High Court
have always found to be inclined towards maintaining the traditional distinction between the two
types of estoppels. In addition to this, in relation to ‘fusion fallacy’ and the Judicature Acts, it
appears that the merging of the several types of estoppels is mainly for academic purpose. In
reality, it is generally mentioned the type of equitable estoppels being used as the basis of cause
of action. When the estoppel is raised as a defence, it is usually indicated that the defendant is
barred from depending on act, statement or document which the defendant was attempting to use.
27 Yaxley v Gotts [2000] Ch 162.
28 Commonwealth of Australia v Verwayen [1990] 170 CLR 394; 95 ALR 321.

11EQUITY AND LAW
References:
Alden, Eric. "Rethinking Promissory Estoppel." Nev. LJ 16 [2015]: 659
Baker, John. Introduction to English Legal History. Oxford University Press, 2019
Clermont, Kevin M. "Res Judicata as Requisite for Justice." Rutgers UL Rev. 68 (2015): 1067
Commonwealth v Verwaven [1990] 170 CLR 394; 95 ALR 321
Discount Finance Ltd v Gehrig’s NSW Wines Ltd [1940] 40 SR [NSW] 598,603
Fauvarque-Cosson, Bénédicte. "Estoppel." Encyclopedia of Private International Law. Edward
Elgar Publishing Limited, 2017. 675-681
Finance Ltd v Gehrig’s NSW Wines Ltd [1940] 40 SR [NSW] 598, 602-3
Foran v White White [1989] 168 CLR 385; 88 ALR 413
Grundt v Great Boulder Pty Gold Mines [1997] 59 CLR 641
Hammersley v de Biel [1845] 12 Cl & Fin 45; 8 ER 1312
Jorden v Money [1854] 10 ER 868
Kovacs, Kathryn E. "Superstatute Theory and Administrative Common Law." Ind. LJ 90 (2015):
1207
Legione v Hateley [1983] 152 CLR ; ALR 1, Waltons Store [Interstate] Ltd v Maher [1988] 164
CLR 387; 76 ALR 513, Giumelli v Giumelli [1999] 196 CLR 101; 161 ALR 473, Sidhu v Van
Dyke [2014] 251 CLR 505; 308 ALR 453.