FEquity regards done what ought to be done
This maxim means that when individuals are required, by their agreements or by law to have done some act of legal significance, Equity will regard it as having been done as it ought to have, even before it has actually happened. This makes possible the legal phenomenon of equitable conversion. Sometime this is phrased as "equity regards as done what should have been done."
The consequences of this maxim, and of equitable conversion, are significant in their bearing on the risk of loss in transactions. When parties enter a contract for a sale of real property, the buyer is deemed to have obtained an equitable right that becomes a legal right only after the deal is completed.
Due to his equitable interest in the outcome of the transaction, the buyer who suffers a breach may then be entitled to the equitable remedy of specific performance (although not always, see below). It also is reflected in how his damages are measured if he pursues a legal, substitutionary remedy instead of an equitable remedy. At law, he is entitled to the value at the time of breach, whether it has appreciated, or depreciated.
The fact that the buyer may be forced to suffer the depreciation means that he bears the risk of loss if, for example, the improvements on the property he bought burn down while he is still in escrow.
Additional Examples: Problems may sometimes arise because, through some lapse or omission, cover is not in force at the time a claim is made. If the policyholder has clearly been at fault in this connection, because, for example, he has not paid premiums when he should have, then it will normally be quite reasonable for an insurer to decline to meet the claim. However, it gets more difficult if the policyholder is no more at fault than the insurer. The fair solution in the circumstances may be arrived at by applying the principle that equity regards that as done that ought to be done [See para 1, above]. In other words, what would the position have been if what should have been done had been done?
Thus, in one case, premiums on a life policy were overdue. The insurer' s letter to the policyholder warning him of this fact was never received by the policyholder, who died shortly after the policy consequently lapsed. It was clear that if the notice had been received by the policyholder, he or his wife would have taken steps to ensure the policy continued in force, because the policyholder was terminally ill at the time and the cover provided by the policy was something his wife was plainly going to require in the foreseeable future. Since the policyholder would have been fully entitled to pay the outstanding premium at that stage, regardless of his physical condition, the insurer (with some persuasion from the Bureau) agreed that the matter should be dealt with as if the policyholder had done so. In other words, his widow was entitled to the sum assured less the outstanding premium. In other similar cases, however, it has not been possible to follow the same principle because there has not been sufficiently clear evidence that the policy would have been renewed.
Another illustration of the application of this equitable principle was in connection with motor insurance. A policyholder was provided with cover on the basis that she was entitled to a ' no claims' discount from her previous insurer. Confirmation to this effect from the previous insurer was required. When that was not forthcoming, her cover was cancelled by the brokers who had issued the initial cover note. This was done without reference to the insurer concerned, whose normal practice in such circumstances would have been to maintain cover, but to require payment of the full premium until proof of the no claims discount was forthcoming. Such proof was eventually obtained by the policyholder, but only after she had been involved in an accident after the cancellation by the brokers of the policy. Here again, the fair outcome was to look at what would have happened if the insurer's normal practice had been followed. In such circumstances, the policyholder would plainly have still had a policy at the time of the accident. The insurer itself had not acted incorrectly at any stage. However, in the circumstances, it was equitable for it to meet the claim.
FMeaning: A between two persons, where one of them has incurred an obligation and
undertaken upon himself to do something for the other, the equity courts look on
it as done and as producing the same result as if the obligation or undertaking
had been actually performed. Equity treats a contract to do a thing as if the
thing were already done, though only in favors of volunteers’. In other words, as
to the consequences and incidents of the subject matter of contract, it will be
traded as if the final acts anticipated and contemplated by the parties have been
carried out in the same manner as they ought to have beenand as they might have
been carried out. Equity acts on the conscience of a person. What one has
undertaken to do, binding his conscience ought to be done and equity courts
therefore look to the acts of the person bound by his conscience and interpret
them in such a way that they amount to what ought to be done.
Recognition in Bangladesh: The principle contained in the maxi m has been
recognition in Bangladeshi law under following encasements:
Section 12 of The Specific Relief Act relating to the specific performances of
part of a contact also illustrates of the maxim.
Section 53-A of the Transfer of Property Act illustrates the doctrine of part-
performance as based on this maxim.
Section 91 of The Truest Act 1882 dealing with property acquired with notice of
existing contract is also illustrative of the application of this maxim.
FEquity Looks At The Intent Rather Than The Form
This maxim is characteristic of the greater freedom of action of the equity courts, as compared with the common law courts, and of their efforts to do substantial justice rather than enforce technical rules.
The effects of the application of this doctrine are well illustrated in the case of equitable mortgages.7
This maxim has also been applied by the courts in the construction of trusts,8 and of contracts of suretyship.9 This maxim was applied in the case of equitable liens in the case of Badgerow vs. Manhattan Trust Co.,10 where the court said: "It must be remembered that the form of the agreement which creates a lien is not as material as the ultimate intent of the parties. Equity looks through form to substance. If the intent to charge designated property is established the lien follows."
FEquity Looks at the Intent Rather than the Form
The maxim ‘‘equity looks at the intent rather than the form’’ means that equity applies a test
of substance. In Parkin v Thororld39 (1852), Lord Romilly stated that:
‘‘Courts of equity make a distinction in all cases between that which is a matter of
substance and that which is a matter of form; and if it finds that by insisting on the
form, the substance will be defeated, it holds it to be inequitable to allow a person to
insist on such form, and thereby defeat the substance’’.
For example, a covenant or promise contained in a deed will be regarded as restrictive (and
therefore more likely to be enforced) if negative in substance even if it is worded in a
positive form. For example, in Tulk v Moxhay40 (1848), a covenant to keep land ‘‘uncovered
by buildings’’ was held
FTulk v Moxhay (1848) 41 ER 1143 is a landmarkEnglish case that decided that in certain cases a restrictive covenant can "run with the land" (ie. a future owner will be subject to the restriction) inequity.
In 1808, the owner of several parcels of land inLeicester Square sold a plot to another party, making a covenant to keep the Garden Square "uncovered with buildings" such that it could remain a pleasure ground. Over the following years the land was sold several times over to new parties, eventually to the defendant.
The defendant, who was aware of the covenant at the time of purchase, refused to abide by the covenant as he claimed he was not in privity of contract and so was not bound by it.
Lord Cottenham found in favour of the plaintiff and granted an injunction to restrain the defendant from violating the covenant.
Prior to this case, for covenants to run, the original agreement had to be made by a landlord and tenant at the time that they entered into the lease, that is, there had to be privity of estate, also called "horizontal privity." The Court noted that if the agreement had been a contract instead of a covenant, it would have been enforceable. Therefore, the Court decided that the covenant was enforceable at equity, that is, when the plaintiff seeks an injunction as opposed to damages. The case stands for the proposition that horizontal privity (privity of estate) is not required for the burden of a covenant to run at equity. In order for the burden to run, the covenant must satisfy certain requirements:
It must "touch and concern" the land.
The original parties must have intended that the burden run.
The party to be burdened must have had notice of the covenant.
The party to be burdened must hold or acquire the same interest in the property that the original promissor held.
FEquity delights in equality
where two persons have an equal right, the property will be divided equally. Thus Equity will presume joint owners to be tenants in common unless the parties have expressly agreed otherwise. Equity also favours partition, if requested, of jointly-held property.
FEquality is Equity or Equity delighteth in equality
Where two or more persons are entitled to an interest in the same property, then the principle
of equity is equal division if there is no good reason for any other basis for division. This
neatly illustrates the attitude of equity to the co-ownership of land. In the absence of evidence
that the property is held under a joint tenancy, equity will presume a tenancy-in-common to
exist. This is because under a joint tenancy, on the death of one co-owner, his share will vest in
the survivors. This principle is known as the jus accrescendii, or right of survivorship.
Obviously, this principle runs counter to the maxim ‘‘equity is equality’’, and for this reason
equity presumes a tenancy-in-common instead. Even where the equitable interest is held
jointly, equity leans in favour of severance, meaning that equity is ready to regard an act or
dealing as an act of severance, thereby converting the joint tenancy into a tenancyin-
common, thus excluding the possibility of survivorship (Burgess v Rawnsley)44 (1975).
It appears from the Supreme Court’s decision in EB v SS45 (1988) that the maxim ‘‘equality
is equity’’ will not apply if there is good reason for another basis for division. Here, the Court
denied the applicability of the maxim where an application was made under s 117 of the
Succession Act 1965 (application made by a child arguing that a parent had failed to make
proper provision for him in accordance with his means).
Keane J, dismissing the plaintiff’s application, noted that it is was not necessarily an answer
to a s 117 application that a testator has treated all his children equally. As he stated:
‘‘the maxim ‘equality is equity’ can have no application where the testator has, by
dividing his estate in that manner, disregarded the special needs . . . of one of the children
to such an extent that he could be said to have failed in his moral duty to that child’’.
Keane J also recognised that a bequest equally distributing property fulfilled a desire of
parents to avoid any friction amongst their children. In the circumstances, the Supreme Court
held that the defendant, who had taken this diplomatic route, had not failed in her moral duty
towards the plaintiff.
FHe Who Comes to Equity Must Come With Clean Hands
The maxim ‘‘he who comes to equity must come with clean hands’’ concerns the previous
conduct of the party seeking relief. If the applicant has been guilty of misconduct in the events
leading up to the application, relief may be refused. In Smelter Corporation v O’Driscoll30
(1977), the plaintiff ’s application for a decree of specific performance was refused as a result
of misrepresentations made by its representatives. Similarly, relief may be refused to a plaintiff
who has acted unfairly, unreasonably, or who has attempted to mislead the court.
Consideration of this issue arose in the recent case of Fanning v University College Cork31
(2002), where the plaintiff sought to restrain the defendants from taking any steps to
discipline, suspend, or dismiss him from his post as a professor in the university arising out of
an alleged incident with another member of staff. Lavan J, in the High Court, refused the
relief sought by the plaintiff on the basis that his evidence was lacking in candour and clarity
and had been delivered in a defensive and limited fashion. Accordingly, Lavan J was of the
view that the plaintiff had not come to equity with clean hands, and in the circumstances he
had disentitled himself to the equitable relief sought. However, on appeal the Supreme Court
quashed the judgment of Lavan J and remitted the matter to the High Court. Keane CJ
concluded that no case had been made by the defendants that the plaintiff had not come to
court with clean hands and, as such, the trial judge had failed to satisfactorily dispose fairly of
the issues between the parties.
In Tinsley v Milligan32 (1994), the parties purchased a house with the intention of running a
guest-house from the premises. However, the house was conveyed into the plaintiff’s sole name so that the defendant might continue to receive social security payments. The parties later parted company and the plaintiff claimed possession of the property. The defendant counterclaimed for a declaration that she was entitled to a share of the beneficial interest in the property proportionate to her contribution. It was alleged that the counter-claim could not be entertained by the court because of the defendant’s ‘‘unclean hands’’. Nonetheless, a majority of the Court of Appeal and House of Lords adopted a flexible approach to the maxim:
‘‘since both the plaintiff and the defendant had been party to the fraud and since the
illegality was not of a continuing nature, it would not be an affront to the public
conscience to grant the relief sought by the defendant and that her counter-claim did
not arise ex turpi causa so as to deny her relief’’.
Since the defendant did not have to rely on the illegality to prove her equitable entitlement,
her proprietary interest was therefore enforceable.33
Roderick Murphy J took a rather lenient approach to the clean hands requirement in
Kavanagh v. Caulfield34 (2002), where the plaintiff purchaser alleged that the defendant vendor required her to pay a portion of the purchase price to a charity as an inducement to enter into the contract. It was allegedly proposed that this payment would not be disclosed to the Revenue Commissioners. The trial judge took a holistic view of the facts and surrounding
circumstances. In granting the order for specific performance sought by the plaintiff,
he stated he was not convinced that she intended to carry out the contract in an illegal fashion.
The Supreme Court set a relatively high standard for defendants in Curust Financial
Services Ltd. v. Loewe-Lack-Werk Loewe GmbH & Co. KG35 (1993), Finlay CJ stating ‘‘it
seems to me that this phrase must of necessity involve an element of turpitude and cannot
necessarily be equated with a mere breach of contract’’.
FEquity Follows the Law, But Will Not Permit a Statute to be Used as an
Instrument of Fraud
The maxim ‘‘Equity follows the law’’ expresses the fact that equitable principles must not
depart from statute or common law principles. However, exceptions apply, and in these
circumstances equity will take precedence over a conflicting rule of the common law: ‘‘equity
follows the law, but not slavishly nor always’’ (Graf v Hope Building Corporation)41 (1930).
Cases such as Rochefoucauld v Boustead (1897)42 and McCormick v Grogan (1869)43 are
graphic illustrations of the principle ‘‘equity will not allow a statute to be used as an
instrument of fraud’’. In particular, the recognition of secret trusts, notwithstanding their
contravention of the requirements of the Wills Act 1837 (now the Succession Act 1965), is a
clear illustration of this principle in practice.
n this maxim is found one of the most fundamental characteristics of equity jurisprudence. Equity was created to supplement the common law, and for this purpose only. The result is that equity is bound by the established principles of law. It might be said that equity is addition and not subtraction. Equity was permitted to add to the law, to recognize new rights and titles, and to create new remedies, but not to disregard or destroy existing legal principles.
The accuracy of this maxim has recently been generally criticised,2 but viewed from the proper standpoint it will be seen to be correct.
Under this maxim equity is bound by the rules of evidence fixed by the law, and by the statutes of limitations.3
FEquity has no clash with law neither it overrides the provisions of law. Nor it is the enemy of law. It adopts and follows the basic rules of law. It is said that equity is not a body of jurisprudence acting contrary to law but is rather a supplement to law. It is a well known rule that equity follos the analogies of law. The equity came not to destroy the law but to fulfit it, to supplement it, to explain it. Equity respect every word of law.
Equity is intended to supplement the law and not to supersede it.
Cowper vs. Cowper 1734, 2P WNS 720
The discretion of the court is to be governed by the rules of law and equity which are not oppose but each in tur to be subservient to other, this discretion in some cases follows the law implicity, in other assists it and advances the remedy; in other against it relieves against the abuse or allays the rigour of it but in no case does it contradict or overturn the grounds of principle thereof.
It has application in the following two aspects.
1. As to legal estates, rights and interest:
As regards legal estates, right and interests, equity was and is strictly bound by the rules of law and it has no discretion to deviate there from. Equity does not allow an unfair use to be made of legal rights so equity follows in regard to the rule of primogeniture.
Strickland vs. Aldrige 1804
It was held exclusion of the younger member of a family from property according to the rule of primogeniture does not create any particular circumstances entitling to a relief at equiry, because the eldest son gets only what he is entitled to get in law.
2. As to Equitable rights and interest:
In many cases, equity acts by analogy to the rules of law in relation to equitable titles and estates. Equitable estates are guided by the rules of decent as legal estate.
Important aspects of maxim:
Following are the two important aspects of this maxim.
Equity adopts and following the rules of law in all cases where applicable.
Equity follows the analogy of law
Exceptions: Following are exceptions
i. Where a rule of law did not specifically apply.
ii. Where even by analogy the rule of law did not apply, equity formulated and applied it, own rules.Ending Remarks:
To conclude it can be said that equity always follows the law in the sense of obeying it and conforming to its general rules and policy, whether contained in common law or statue law. The rules of equity can not override the specific provisions of law.
 A restrictive covenant is a type of real covenant, alegalobligation imposed in adeedby the seller upon the buyer ofreal estateto do or not to do something. Such restrictions frequently "run with the land" and are enforceable on subsequent buyers of the property
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