Equity and Trusts/Introduction

INTRODUCTION

Equity and trusts is a unique branch of English law based on a body of principles made by the Courts of Chancery, that focusses on bringing balance to the legal system, particularly the Common Law. The law of trusts was constructed as an adjunct to the law of property, to tend to situations in which one person holds legal title to a property, but the courts decided it is fair, just or "equitable" that another person should benefit from the property. There is now an acknowledged division between legal and beneficial ownership: the legal owner is referred to as a "trustee" (because he is "entrusted" with the property) and the beneficial owner is the "beneficiary".

What is “equity”?

The word "equity" normally suggests justice and fairness i.e. to act equitably is to act fairly. However, in a legal sense “Equity” refers to a specific body of law, one which has a history that is quite distinct from the “Common Law”. Up to 1875, Equity was administered by the Court of Chancery, whilst the Common Law was administered in an entirely separate but parallel system of courts. Certain remedies were found only in Common Law, whilst others were only found in Equity. This chapter will examine how and why Equity developed separately, as well as the question of whether the two systems have been "fused" by the Judicature Acts of 1873 and 1875.

The rise of the Common Law

In the 12th century, a system of courts emerged as a result of increased centralisation in government following the Norman Conquest. The increased rigour and bureaucratisation of the Anglo-Norman administration involved the superimposition of Royal Justice by the King’s Court onto local courts with the formation of the writ system and the delegation of the King’s authority to royal justices (justiciars). Over the next two centuries the Common Law evolved with three central courts at Westminster Hall: the Court of King’s Bench, the Exchequer Court and the Court of Common Pleas. This was combined with a new practice of circuits, whereby royal justices travelled to different counties holding court as Justices in Eyre.

The Writs

A major effect of centralisation and formalisation was that justice became frozen into certain forms of action recognised by the courts. A plaintiff had to begin proceedings in the Common Pleas or King’s Bench by purchasing a royal writ setting out the nature of his complaint and Common Law writs formulating particular types of action became precedents for later plaintiffs to use in similar cases. By the middle of the 13th Century the categories of writ and forms of action became fixed and closed.