ABSTRACT
There are three different ways of understanding equity’s role as part of the English legal system.5 First, equity can be understood as the means by which English law ensures that the strict application of a common law or a statutory rule does not result in any unfairness when applied to a specific case. To this extent equity is a form of natural justice,6 which means that it has a moral basis.7 Equity’s particular moral purpose was described by Lord Ellesmere in the Earl of Oxford’s Case8 as being to ‘correct men’s consciences for frauds, breach of trusts, wrongs and oppressions . . . and to soften and mollify the extremity of the law’.9 The Supreme Court recently acknowledged that this was the fundamental purpose of equity in FHR European Ventures v Cedar Capital.10 This is a moral purpose in that it both prevents a defendant from taking unconscionable advantage of a situation and also in that it prevents the law inadvertently permitting an unconscionable result. Second, equity can be considered, in its formal sense, as constituting the collection of substantive principles developed over the centuries by the Courts of Equity, principally the Court of Chancery,11 to judge people’s consciences.12 In this sense, equity should be understood as being a code of technical, substantive rules and not simply as a reservoir of general, moral principles.13 Third, equity can be understood as comprising the procedural rules and forms of action developed by the
Courts of Chancery over the centuries under the authority of the Lord Chancellor. The main equitable principles are considered in section 1.4 below. It should be noted that these second and third aspects of equity differ from the apparent breadth of the first in that they constitute technical rules of law rather than abstract philosophical principles. It is common for English and Australian writers on equity to focus on these latter senses of equity in preference to a consideration of more philosophical notions of natural justice theory; although an appreciation of these philosophical underpinnings is important if equity is to be understood as a collection of coherent principles and not simply as a ragbag of different doctrines.15
