Maxims of Equity

Dr.Bashiran/Dr.S. Zubaidah/Dr. Nor Asiah/Dr. Zuraidah

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MAXIMSMAXIMS OF EQUITYOF EQUITY

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What are MaximsWhat are Maxims

Types of MaximsTypes of Maxims

Functions of maximsFunctions of maxims

What we will learnWhat we will learn

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Maxims – general guidanceMaxims – general guidance

a collection of legal truisms which a collection of legal truisms which are used as "rules of thumb" are used as "rules of thumb"

it is an established principle or it is an established principle or proposition. proposition.

Framework of reference within Framework of reference within which the broader conception of which the broader conception of conscience and fairness can be conscience and fairness can be considered.considered.

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Equitable maximsEquitable maximsOne of discretion and moral One of discretion and moral judgment judgment

They are not binding but only They are not binding but only provides guidelines for every provides guidelines for every situation in which equity developed.situation in which equity developed.

Maxims of Equity are of useful guide. Maxims of Equity are of useful guide.

Maxims are the principles developed Maxims are the principles developed by Lord Chancellors exercising on by Lord Chancellors exercising on behalf of the Crown.behalf of the Crown.

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con’tcon’t

an extra-ordinary jurisdiction to relax the an extra-ordinary jurisdiction to relax the rigidity of the common law so as to rigidity of the common law so as to recognize and reward the merit and deserts recognize and reward the merit and deserts of individualof individualOne of the historic criticisms of equity as it One of the historic criticisms of equity as it developed was that it had no fixed rules of its own developed was that it had no fixed rules of its own and each and each Lord Chancellor Lord Chancellor gave judgement gave judgement according to his own conscience. according to his own conscience.

John Selden.John Selden. "Equity varies with the length of the Chancellor's foot"."Equity varies with the length of the Chancellor's foot".

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Equitable maximsEquitable maxims

Such maxims follow principles of universal Such maxims follow principles of universal justice. justice.

Chancellors were originally the "keepers of Chancellors were originally the "keepers of the King's conscience" with the authority to the King's conscience" with the authority to do whatever "good conscience and good do whatever "good conscience and good reason" required in a particular case. reason" required in a particular case.

Hanbury –the fruit of observation of Hanbury –the fruit of observation of developed equitable doctrinedeveloped equitable doctrine

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04/19/23 Dr.Bashiran/Dr.S. Zubaidah/Dr. Nor Asiah/Dr. Zuraidah

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Pearce : The Law of Trusts and Pearce : The Law of Trusts and Equitable ObligationsEquitable Obligations

Are an attempt to formulate in short pithy Are an attempt to formulate in short pithy phrases the key principles which underlie phrases the key principles which underlie the exercise of the equitable jurisdiction.the exercise of the equitable jurisdiction.

Provide useful illustrations Provide useful illustrations


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maximsmaxims

Examples of such maxims includes Examples of such maxims includes equity will not suffer a wrong with a equity will not suffer a wrong with a remedy", "those who seek equity must remedy", "those who seek equity must do equity", and "equity requires do equity", and "equity requires diligence, clean hands, and good faith". diligence, clean hands, and good faith".

These maxims are a form of the Biblical These maxims are a form of the Biblical phrase, "do unto others as you would phrase, "do unto others as you would have them do unto you" and the old have them do unto you" and the old doctrine of "clean hands, pure heart". doctrine of "clean hands, pure heart".


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maximsmaxims

In Chancery Court these maxims refer In Chancery Court these maxims refer to civil matters mostly involving to civil matters mostly involving businesses, family law, workers' businesses, family law, workers' compensation, land, probate matters, compensation, land, probate matters, and more recently , discrimination and more recently , discrimination casescases..

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Among the traditional maxims Among the traditional maxims are:are:

Equity looks regards as done which ought to Equity looks regards as done which ought to have been done. have been done. Equity will not suffer a wrong without a Equity will not suffer a wrong without a remedy. remedy. Equality is equity. Equality is equity. Equity regards substance rather than formEquity regards substance rather than formEquity looks to the intention rather the the Equity looks to the intention rather the the formform

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continuecontinue

Where the equities are equal, the first in time Where the equities are equal, the first in time will prevail. will prevail.

Where equities are equal, the law will Where equities are equal, the law will prevail. prevail.

Equity follows the law. Equity follows the law.

He who seeks equity must do equity. He who seeks equity must do equity.

He who seeks equity must have clean hands. He who seeks equity must have clean hands.

Equity aids the vigilant, not those who sleep Equity aids the vigilant, not those who sleep on their rightson their rights

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continuecontinue

Delay defeats equity. Delay defeats equity. Equity will not concern itself with abstract wrongs. Equity will not concern itself with abstract wrongs. Equity abhors a forfeiture. Equity abhors a forfeiture. Equity does not require an idle gesture. Equity does not require an idle gesture. Equity will not permit a party to profit by his own Equity will not permit a party to profit by his own wrong. wrong. Equity delights to do justice, and not by halves. Equity delights to do justice, and not by halves. Equity will take jurisdiction to avoid a multiplicity of Equity will take jurisdiction to avoid a multiplicity of suits. suits.

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1) Equity will not suffer a wrong 1) Equity will not suffer a wrong without a remedywithout a remedy

Philosophical foundation of equityPhilosophical foundation of equity

Wrongs should be redressed by the courts if it Wrongs should be redressed by the courts if it possiblepossible

Defects of the common law to provide reliefDefects of the common law to provide relief

Meaning- Where there is a right, there is a remedyMeaning- Where there is a right, there is a remedy

In Latin – In Latin – Ubi jus ibi remediumUbi jus ibi remedium

Sometimes the Common courts owing to some Sometimes the Common courts owing to some technical defect unable to enforce a remedy, technical defect unable to enforce a remedy, therefore equity intervenes and provides for therefore equity intervenes and provides for judicial enforcement- injunction, recognition of judicial enforcement- injunction, recognition of trusttrust

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means no wrong should go unattended if it is means no wrong should go unattended if it is capable of being remedied by courtscapable of being remedied by courts

This is the basis on which the structure of equity This is the basis on which the structure of equity rests.-it is a duty of the Court of Chancery to rests.-it is a duty of the Court of Chancery to prevent a failure of justiceprevent a failure of justice

Limitation -non-application if it includes moral Limitation -non-application if it includes moral

wrongwrong

- it is remedied by common law courts-- it is remedied by common law courts-

at present there is remedy in at present there is remedy in

damagesdamages

- due to his own negligence destroy - due to his own negligence destroy the the

evidence evidence 04/19/23


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Application and Recognition:- The Civil Application and Recognition:- The Civil Procedure Code and the Specific Relief Procedure Code and the Specific Relief Act have incorporated this maxim. The Act have incorporated this maxim. The Code entertains all kinds of suit unless it Code entertains all kinds of suit unless it is prohibited and the Act provides is prohibited and the Act provides equitable remedies like s.p. , equitable remedies like s.p. , injunctions, rectification, etc.injunctions, rectification, etc.

Allows the beneficiary to enforce their Allows the beneficiary to enforce their obligation to use the property against obligation to use the property against the trusteethe trustee

In contract- escape from the contract if In contract- escape from the contract if it is led by mistake or misrepresentationit is led by mistake or misrepresentation

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The maxim also applies to rights which The maxim also applies to rights which are suitable for judicial enforcement but are suitable for judicial enforcement but were not enforced at common-law were not enforced at common-law owing to some technical defect. For owing to some technical defect. For example, during the trial process, example, during the trial process, common-law did not impose any duty common-law did not impose any duty on the defendant to make disclosure on the defendant to make disclosure through discovery of documents. Equity through discovery of documents. Equity then provided the remedy by then provided the remedy by prescribing the process of discovery of prescribing the process of discovery of documents.documents.

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2) EQUITY ACTS IN PERSONAM2) EQUITY ACTS IN PERSONAM

The courts of equity operate primarily in The courts of equity operate primarily in personam, attacking and binding the personam, attacking and binding the conscience of a person.conscience of a person.It was used as a weapon to establish It was used as a weapon to establish jurisdictionjurisdictionEquity enforces its decisions by means of Equity enforces its decisions by means of a personal order against the defendant.a personal order against the defendant.Example: order to perform a contract, Example: order to perform a contract, observe a trust, refrain from building the observe a trust, refrain from building the wall, etc. wall, etc.

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If the def. refuses, he will be in If the def. refuses, he will be in contempt of court and punishable by contempt of court and punishable by imprisonment imprisonment

The court may exercise jurisdiction over The court may exercise jurisdiction over the person within the power of the court, the person within the power of the court, even though the property is outside the even though the property is outside the jurisdiction.jurisdiction.

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Penn v. Lord Baltimore [1750] Ves. Sen. Penn v. Lord Baltimore [1750] Ves. Sen. 444444

The plaintiff filed a suit in the court of The plaintiff filed a suit in the court of Chancery for specific performance of an Chancery for specific performance of an agreement in respect of property situated in agreement in respect of property situated in North America. The defendant challenged the North America. The defendant challenged the jurisdiction of the court to grant the remedy as jurisdiction of the court to grant the remedy as the property was outside England.the property was outside England.“…“…the conscience of the party was bound by the conscience of the party was bound by this agreement; being within the jurisdiction of this agreement; being within the jurisdiction of this court, which acts ‘in personam’, the court this court, which acts ‘in personam’, the court may properly decree it as an agreement.”may properly decree it as an agreement.”

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Swiss Bank Corpn v Lloyds Bank Swiss Bank Corpn v Lloyds Bank Ltd[1979] Ch 548Ltd[1979] Ch 548

Historically the courts of equity acted in Historically the courts of equity acted in personam. Whether equity was personam. Whether equity was supplementing the common law by giving supplementing the common law by giving additional remedies or correcting the common additional remedies or correcting the common law by imposing a different legal result, the law by imposing a different legal result, the courts of equity intervened by directing the courts of equity intervened by directing the defendant personally to do, or refrain from defendant personally to do, or refrain from doing, a specific act. In deciding whether or doing, a specific act. In deciding whether or not to intervene, the courts of equity required not to intervene, the courts of equity required first, that the plaintiff should have some first, that the plaintiff should have some enforceable right and, secondly, that the enforceable right and, secondly, that the conscience of the defendant was affected in conscience of the defendant was affected in some way so as to make the failure of the some way so as to make the failure of the defendant to give effect to the plaintiff's defendant to give effect to the plaintiff's rights contrary to justice.rights contrary to justice.


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Chellaram v ChellaramChellaram v Chellaram [1985] 1 [1985] 1 All ER 1043 at 1053All ER 1043 at 1053

Scott J.Scott J.

The jurisdiction of the court to administer The jurisdiction of the court to administer trusts …is in a personam jurisdiction.trusts …is in a personam jurisdiction.

Case: Case: Re Valibhoy (Dcd.) Re Valibhoy (Dcd.) (1961) 27 MLJ (1961) 27 MLJ 187 187

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3) Equity follows the law3) Equity follows the law

The Court of Chancery will not override The Court of Chancery will not override the Common Law Courts except:the Common Law Courts except:

To remedy an injusticeTo remedy an injustice

Equity could never depart from statute.Equity could never depart from statute.

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3) Equity looks to the intention rather 3) Equity looks to the intention rather the the form the the form

Another maxim with similar nature is “Another maxim with similar nature is “Equity Equity regards substance rather than form”regards substance rather than form”Romilly MR in Parkin v. Thorold (1852) 16 Romilly MR in Parkin v. Thorold (1852) 16 Beav 59 at 66Beav 59 at 66Courts of Equity make a distinction between Courts of Equity make a distinction between that which is matter of substance and that that which is matter of substance and that which is matter of form; and if it finds that which is matter of form; and if it finds that by insisting on the form, the substance will by insisting on the form, the substance will be defeated, it holds it to be inequitable to be defeated, it holds it to be inequitable to allow a person to insist on such form, and allow a person to insist on such form, and thereby defeat the substancethereby defeat the substance

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Foskett v McKeown [1994] 1 AC Foskett v McKeown [1994] 1 AC 324324

Sir Richard Scott V-CSir Richard Scott V-C

‘‘The availability of equitable remedies The availability of equitable remedies ought….to depend upon the substance ought….to depend upon the substance of the transaction in question’of the transaction in question’

Equity will look at the substance rather Equity will look at the substance rather than the form or the wording used.than the form or the wording used.

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Margaret Chua v Ho Swee Kiew & Margaret Chua v Ho Swee Kiew & Ors.Ors. [1961] 1 MLJ 173 [1961] 1 MLJ 173

a lease which is not registered is void a lease which is not registered is void as a lease under the law but is good as a lease under the law but is good and valid as an agreement for a lease and valid as an agreement for a lease and may be enforceable in equity by a and may be enforceable in equity by a decree of specific performance.decree of specific performance.

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Equity will not grant an injunction to Equity will not grant an injunction to enforce a negative covenant entered by enforce a negative covenant entered by an employee agreeing not to work for an employee agreeing not to work for others if in substance this would amount others if in substance this would amount to an order of specific performance of to an order of specific performance of their contract of employment since their contract of employment since Equity will not enforce contracts of Equity will not enforce contracts of personal service.-employees intentionpersonal service.-employees intention

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5) Equity looks at that as done which ought to be 5) Equity looks at that as done which ought to be donedone

The maxim that equity looks upon as The maxim that equity looks upon as done that which ought to be done done that which ought to be done applies as a general rule of equity, applies as a general rule of equity, outside the law of contract.outside the law of contract.Where the contract is specifically Where the contract is specifically enforceable, equity regards the enforceable, equity regards the promisor as having already done what promisor as having already done what he has promised to do. he has promised to do.

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Mountney v. TreharneMountney v. Treharne [2003] Ch. 135[2003] Ch. 135

Where any court directs a person to Where any court directs a person to transfer property, equity treats the transfer property, equity treats the transfer as having already been transfer as having already been executed. executed.

The husband became a constructive The husband became a constructive trustee of the property for the wife trustee of the property for the wife on the coming into effect of the orderon the coming into effect of the order

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HL Banerji v Chin Cheng Realty (Pte) HL Banerji v Chin Cheng Realty (Pte)

Ltd.Ltd. [1983] 2 MLJ 18 [1983] 2 MLJ 18 the parties had signed a 10 year lease of the the parties had signed a 10 year lease of the resp’s premises with a provision for renewal resp’s premises with a provision for renewal if the App made a request three months if the App made a request three months before the expiration of the lease. When the before the expiration of the lease. When the app requested for renewal of the lease for 10 app requested for renewal of the lease for 10 years, the resp refused. The app sued for years, the resp refused. The app sued for SP and succeeded. SP and succeeded. Ct hd. that the App always had an equitable Ct hd. that the App always had an equitable right to renewal of the lease as equity looks right to renewal of the lease as equity looks upon as done what ought to have been upon as done what ought to have been done.done.

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A-G for Hong Kong v Reid A-G for Hong Kong v Reid [1994] 1 AC 324[1994] 1 AC 324

The maxim has the implication that the The maxim has the implication that the fiduciary who receives an unauthorised fiduciary who receives an unauthorised profit in breach of his duty of loyalty will profit in breach of his duty of loyalty will hold the profit on constructive trust for his hold the profit on constructive trust for his principal because he is subject to an principal because he is subject to an equitable duty to account for the profit he equitable duty to account for the profit he received.received.

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In other words, what would the position have In other words, what would the position have been if what should have been done had been if what should have been done had been done? been done? Equity acts on the conscience of a person.Equity acts on the conscience of a person.Walsh v. Lonsdale(1882) 2 Ch D 9Walsh v. Lonsdale(1882) 2 Ch D 92 principles –evidence of the contract2 principles –evidence of the contractSuit within the timeSuit within the timeConcept of bare trust –Temenggong Concept of bare trust –Temenggong SecuritiesSecurities

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6) He who comes to equity must 6) He who comes to equity must come with clean handcome with clean hand

Does the plaintiff come into the court with Does the plaintiff come into the court with clean hands? clean hands? Court will refuse relief where the plaintiff, by Court will refuse relief where the plaintiff, by prior conduct in relation to the matter in prior conduct in relation to the matter in litigation, has acted in bad faith or violated litigation, has acted in bad faith or violated some equitable principlesome equitable principleThe The clean hands doctrineclean hands doctrine only applies only applies when the plaintiff has acted unjustly in when the plaintiff has acted unjustly in the very transaction of which he the very transaction of which he complains.complains.

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This maxims look at the past conduct of This maxims look at the past conduct of the Plaintiff.the Plaintiff.

However the maxim does not apply to However the maxim does not apply to conduct in general, but only that which conduct in general, but only that which has ‘an immediate and necessary has ‘an immediate and necessary relation to the equity sued for’relation to the equity sued for’

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Chettiar v ChettiarChettiar v Chettiar [1962] 1 MLJ 143 [1962] 1 MLJ 143

A father had owned a maximum acreage of A father had owned a maximum acreage of rubber land allowed under regulations at that rubber land allowed under regulations at that time. In order to avoid tax assessment over time. In order to avoid tax assessment over ownership of an extra 40 acres of rubber land, the ownership of an extra 40 acres of rubber land, the father transferred the 40 acres to his son as father transferred the 40 acres to his son as nominee. A receipt of $7000 was obtained from nominee. A receipt of $7000 was obtained from his son when actually no money was involved. his son when actually no money was involved. Subsequently, the father contracted to sell this Subsequently, the father contracted to sell this land but the son refused to give him the power of land but the son refused to give him the power of attorney. The father brought an action for a attorney. The father brought an action for a declaration that the son held the land on trust for declaration that the son held the land on trust for him. The Privy Council dismissed the father’s him. The Privy Council dismissed the father’s action on the ground of ‘unclean hands’ as the action on the ground of ‘unclean hands’ as the

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Timber Master Complex (sabah) Timber Master Complex (sabah) Sdn Bhd v Top Origin Sdn Bhd Sdn Bhd v Top Origin Sdn Bhd

[2002] 1 MLJ 33[2002] 1 MLJ 33Operator entered into agreement on manufacturing Operator entered into agreement on manufacturing operation for 2 years with an option to renewoperation for 2 years with an option to renew

Resp gave a notice to renew but no further actionResp gave a notice to renew but no further action

Ct hd: The claim by the R that they had acquired Ct hd: The claim by the R that they had acquired rights over the extended period would remain rights over the extended period would remain empty claim if it was not met by the corresponding empty claim if it was not met by the corresponding duty to pay rentals.duty to pay rentals.

He comes to equity must come with clean hands.He comes to equity must come with clean hands.

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7) Delay defeats equity7) Delay defeats equity

Equity aids the vigilant and not the Equity aids the vigilant and not the indolent. indolent. Persons who seek equity must not Persons who seek equity must not sleep on their rights. This is the sleep on their rights. This is the foundation of the doctrine of ‘laches’ foundation of the doctrine of ‘laches’ where a party who has delayed cannot where a party who has delayed cannot obtain equitable relief.obtain equitable relief.The Limitation period-the statutory The Limitation period-the statutory rulesrules

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Smith v Clay (1767) 3 Bro CC Smith v Clay (1767) 3 Bro CC 639, 640639, 640

Lord Camden LGLord Camden LG

……equity has always refused its aid to stale equity has always refused its aid to stale demands, where a party has slept upon his right demands, where a party has slept upon his right and acquiesced for a great length of time. and acquiesced for a great length of time. Nothing can call forth this court into activity, but Nothing can call forth this court into activity, but conscience, good faith, and reasonable conscience, good faith, and reasonable diligence, where these are wanting, the Court is diligence, where these are wanting, the Court is passive and does nothing.passive and does nothing.

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Goh Heng Kow & Ors. v. Raja Zainal AbidinGoh Heng Kow & Ors. v. Raja Zainal Abidin

[1995] 3 MLJ 6[1995] 3 MLJ 6 In 1993, land sold to def. (Long)In 1993, land sold to def. (Long)The P, a beneficiary of the previous The P, a beneficiary of the previous registered proprietor(settlor), caveated the registered proprietor(settlor), caveated the land in 1994 which prevented the def. from land in 1994 which prevented the def. from registering the transfer. When the P applied registering the transfer. When the P applied to extend his caveat, the def. sought to set to extend his caveat, the def. sought to set aside the order of extension. aside the order of extension. The court found that the P had acquiesced to The court found that the P had acquiesced to long’s title for almost 30 years and they were long’s title for almost 30 years and they were thus, estopped and barred by laches from thus, estopped and barred by laches from asserting their alleged interests. asserting their alleged interests. Order set aside.Order set aside.

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Nelson v Rye [1996] 2 All ER Nelson v Rye [1996] 2 All ER 186186

It was held that a musician could not claim It was held that a musician could not claim an account of earnings wrongfully retained an account of earnings wrongfully retained by his manager in breach of fiduciary duty by his manager in breach of fiduciary duty because he had waited for more than six because he had waited for more than six years before commencing an action. years before commencing an action.

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8) He who seeks equity must do 8) He who seeks equity must do equity.equity.

Looks at the Plaintiff’s future conductLooks at the Plaintiff’s future conduct

If the plaintiff seeks an equitable relief he If the plaintiff seeks an equitable relief he must be prepared to act fairly toward the must be prepared to act fairly toward the person against whom it is sought.person against whom it is sought.

Eg, in the case of injunction, before a Court Eg, in the case of injunction, before a Court can grant an interlocutory injunction, the can grant an interlocutory injunction, the plaintiff must first take an undertaking.plaintiff must first take an undertaking.

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Mohamed Syed Fathima d/o Shahul Hammed & Mohamed Syed Fathima d/o Shahul Hammed & Ors v MMS Syed Aliyar [2004] 5 MLJ 168Ors v MMS Syed Aliyar [2004] 5 MLJ 168

Facts – P & D are partners and co-owners of Facts – P & D are partners and co-owners of restaurant and staying together on the same restaurant and staying together on the same floor –obtained order agst trespass floor –obtained order agst trespass P’ was asked to pay damages to def for P’ was asked to pay damages to def for discontinued injunctive orders agst the defdiscontinued injunctive orders agst the defP appealed agst the damagesP appealed agst the damagesP relied on s 343 of the NLC – as co-owners, P relied on s 343 of the NLC – as co-owners, def has no right for damagesdef has no right for damagesCt hd: since P relied on s 343 thus shd also Ct hd: since P relied on s 343 thus shd also realized that he also has no right to obtain realized that he also has no right to obtain injunction agst the def.injunction agst the def.He who seeks equity must do equityHe who seeks equity must do equity

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8) Equity imputes an intent to 8) Equity imputes an intent to fulfill an obligationfulfill an obligation

Equity places the most favourable construction Equity places the most favourable construction on a man’s acts.on a man’s acts.

If he does something which could be construed If he does something which could be construed as fulfilling an obligation he owes, equity will as fulfilling an obligation he owes, equity will regard it as having this effect.regard it as having this effect.

Eg; If a debtor leaves a legacy to his creditor, Eg; If a debtor leaves a legacy to his creditor, this is presumed to be a repayment of debt.this is presumed to be a repayment of debt.

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Application in Malaysia- Specific Application in Malaysia- Specific Relief Act 1950 Relief Act 1950

Object of the SRA 1950Object of the SRA 1950

is confined to the class of remedies which a is confined to the class of remedies which a suitor seeks to obtain and a Court of justice suitor seeks to obtain and a Court of justice seeks to give him the very relief to which he seeks to give him the very relief to which he is entitled’is entitled’

There is the existence of a legal duty binding There is the existence of a legal duty binding upon the defendant and unfulfilled by him. upon the defendant and unfulfilled by him. What a man ought to do by a rule of law, he What a man ought to do by a rule of law, he ought to be made to do by the force of law.ought to be made to do by the force of law.


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‘‘the relief provided under this Act is a the relief provided under this Act is a relief in specie, that is, the performance relief in specie, that is, the performance of a specific act or the delivery of of a specific act or the delivery of particular articles and not relating to the particular articles and not relating to the payment of money”payment of money”

Per Kamalanathan R., JC in Arab Per Kamalanathan R., JC in Arab Malaysian [1998] 6 MLJ 136Malaysian [1998] 6 MLJ 136


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How it is given?How it is given?

Taking possessionTaking possession

Ordering the person to do the actOrdering the person to do the act

Preventing him to do the work- SRA s 5Preventing him to do the work- SRA s 5

Determining and declaring the rights of the Determining and declaring the rights of the personperson

Appointing the receiverAppointing the receiver


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ConclusionConclusion

Is a short phrase which formulates a Is a short phrase which formulates a principleprinciple

A brief expression of a general truth, A brief expression of a general truth, principle or rule of conductprinciple or rule of conduct

As a guideline by the Chancery to decide As a guideline by the Chancery to decide cases or to settle disputescases or to settle disputes

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Maxims of Equity

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