Top Tip: If you’re studying Equity & Trusts Law on the LLB or GDL and need more detail and suggested exam answers, then check out our trusted partner Law Answered to ace your exams with first-class law notes prepared by qualified lawyers and top students. If you like what you see, use the code TSL15 to get a 15% discount on any order of their law guides.
Within trust law, equity is an important doctrine. Equity was designed to supplement the common law and often intervenes to prevent unjust results happening. Before delving into the complexities of trust law, it is important to know the different equitable maxims which could be applied. Equitable maxims are often cited by both commentators and judges. They are useful for simplifying complex legal rules into one simple sentence. This article will explore the fourteen different equitable maxims which are in use today.
Equity is to be applied at the judges’ discretion, based on the rules and guidelines. In Re Diplock  Ch 465, the Court of Appeal recognised that a claim in equity must be shown to exist by looking at precedent of the courts whom administered equitable jurisdiction. Equity does not allow judges to create ‘justice’ if no precedent is in place for such an outcome. However, this does not mean equity cannot be changed, it is a flexible doctrine.
This is an extremely important maxim within the doctrine of equity. One of the main reasons for equity intervening is that the defendant acted unconscionably. When equity intervenes, it will operate on the conscience of the owner of the legal interest; this was made clear in Westdeutsche Landesbank Girozentrale v Islington LBC  AC 669. In England, there is a tendency to treat unconscionability as a rule of substance not form – this means it is clearly defined rather than just a guiding principle.
The above maxim ‘equity is discretionary’ is affected by this maxim. It simply means that if you are seeking an equitable remedy/award you must have done equity yourself – you must act fairly to the defendant in the future. This is demonstrated by Chappell v Times Newspapers Ltd  1 WLR 482 where an injunction was not awarded to employees who wished to stop their employer dismissing them because they did not agree to not striking in the future. To ensure the claimant does ‘do equity’ in the future, conditions can be attached to the grant of an equitable remedy.
This relates to the claimants past conduct. It means that equity will not help if a claimant’s prior conduct was considered to be improper. It was decided in Dering v Earl of Winchelsea  1 Cox Eq Cas 318, that improper conduct means improper conduct in a legal sense, not a moral sense. However, in Tinsley v Milligan  1 AC 340, it was held that the claimant does not need to have clean hands if their improper conduct is not relied on to claim the equitable remedy. This is a controversial judgment by the House of Lords because the claimant had not come to the court with clean hands, and so prima facie, the maxim implies she cannot obtain equitable relief.
The true function of this maxim was given in Re Anstis  31 Ch D 596: where parties have entered into a contract that is specifically enforceable, equity will treat the contract as having been performed. This maxim is often relevant where land is transferred between parties but formalities have not been observed. In such a situation, the legal title will remain with the vendor, and the purchaser will have a recognised title in equity. Thus, the vendor is holding the property on a constructive trust for the purchaser. However, equity will not pretend the property is in existence when it isn’t; it is only when that which ought to be done can be done that this maxim will work.
A ‘volunteer’ is somebody who has not provided consideration for a particular transaction. The main application of the maxim is where a donor purports to make a gift to the donee, but the gift is not effective and the donor retains the legal title. Equity will not perfect an imperfect gift. However, this maxim is trumped by the principle of unconscionability. Thus, if a donor purports to make a gift but does so ineffectively, if their conduct is held to be unconscionable equity will impose a constructive trust in favour of the donee.
This maxim can be explained by distinguishing between rights in rem and rights in personam. Rights in rem are good against the world; rights in personam are rights against a particular person. Equitable rights will always be in personam because all equitable property rights are defeated by a bona fide purchaser for value.
In Parkin v Thorold  16 Beav 59, Lord Romilly MR recognised that equity will distinguish which is a matter of substance, and which is a matter of form. If they find that by insisting on the form, the substance will be defeated, they shall not allow the form to be relied upon. There are a number of examples for this maxim, the clearest being when a settlor has not specifically said they are creating a trust, equity will recognise a trust if it is clear the property was to be held for the benefit of someone else.
‘Equity is equality’ means, for example, that if there are equitable interests in a property, it will assume they are equal shares. ‘Equity assists the diligent’ means that if there is a time delay in bringing a claim, a remedy may not be awarded because of the delay. ‘Equity follows the law’ is self explanatory. In most cases, equity will follow recognised legal rules. However, if there is a conflict between law and equity, equity will usually prevail. ‘Equity is imaginative’ refers to the flexible nature of equity as opposed to the rigidity of the common law. ‘Equity protects the vulnerable and weak’ is illustrated by the doctrine of undue influence. This doctrine can be used to set aside a contract where one party unduly influenced the other. The final maxim, ‘equity is cynical’ is not formally recognised by the courts. However, it underpins a number of equitable rules. It can be demonstrated by equity’s view on gifts. It will presume the donor did not intend to make an outright gift. All of the above maxims are important to understand before delving into trust law.
Top Tip: If you’re studying Equity & Trusts Law on the LLB or GDL and need more detail and suggested exam answers, then check out our trusted partner Law Answered to ace your exams with first-class law notes prepared by qualified lawyers and top students.