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A. CUSTOM

We have already referred to custom as a historical source of law. Customary law, which is the foundation of our common law, predominates at the beginning of all social history. Before the Norman Conquest, the various local laws were made up of rules of human conduct, established by usage, and administered in the popular courts by the freemen of the district.

Common law was long identified with customary law, even after the binding decisions of judges (precedents, or case law) had become the true bulk of English common law. Custom, in the legal sense, may be defined as:

those rules of human action established by usage which are adopted by the courts because they are followed by the political society as a whole or in part .

We have seen how Lord Mansfield introduced into English law the "general customs of the merchants". Thus, the Law Merchant originated from custom and is now followed because this custom is embodied in many precedents, some of which are embodied in enacted law or statutes. In modern law, custom has been practically superseded by legislation, or statute law, which either legalises a custom or annuls it.

General Customs

There is a distinction between customs that are general and customs that are particular or local. The former prevail over the country as a whole, and are effective as the common law. Certain requirements are necessary before a custom can become a particular source of law.

It must be reasonable – that is, it must conform to the general view of right and reason prevailing in the community. The courts are not at liberty to override a custom because it falls short of their own ideal of right and justice.

It should not be in conflict with statute law. No custom can take away the force of an Act of Parliament, which cannot be set aside by the development of a custom to the contrary.

It must be generally followed and observed as of right by the members of the community. Should members of a community consider themselves free to depart from the custom, and thereby deny their obligation to accept it as binding, the custom has no legal significance.

In English law, at any rate, a local, though not a trade, custom must be "immemorial" – it must have existed for so long a time that the "memory of a man runneth not to the contrary". This refers to the legal memory of man, which has long been supposed to date back to the beginning of the reign of Richard I (1189–1199). So, if a disputant can prove that a custom did not exist at any time after this date, this custom will not receive legal validity. Note that the upholder of a custom need not prove it did exist in 1189: if he/she can prove that it has existed for a substantial period, to rebut it the disputant must prove its non-existence, as above. In other words, the presumption of time immemorial can be raised by proving that it has been observed for a long time; to be void, its beginning must be proved later than the 12th century, e.g. by showing that it originated from legislation of a later date.

Particular Customs

Particular customs need not be in conformity with common law, provided that they do not conflict with any other particular custom in the locality.

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Mercantile customs were a form of particular custom, and have been accepted as a source of law generally. In their case, time immemorial yields to universality of usage. They are still a possible, though not frequent, source of law, and show that the Law Merchant is not dead.

You should note that any custom, general or particular, that fails to satisfy all of the essentials normally required, is not, thereby, debarred from having legal consequences. If the existence of any custom is proved as a fact, it definitely influences decisions on cases dealing with contracts or torts. Trade customs or usage need not be of antiquity. If recognised by the merchants, the courts will uphold it (Bechuanaland Exploration Co. v.. The London Trading Bank (1898)).

Conventional Usage

Distinct from the two varieties of custom is a third type, which we may term conventional usage. This is not strictly "custom". A usage is an established practice, the effect of which is to incorporate, expressly or impliedly, a term in the contract between the parties concerned. There are usages particular to a special trade, or a special market. The law assumes that, in the absence of any expressed declaration to the contrary, the contracting parties intended to contract in reference to the established usages in the trade, which usages are binding as part of the contract. Therefore, the effect of any established usage is to add a binding term to the contract. Any such usage must be clearly established in the particular trade, and when once judicially recognised – by the courts – it cannot be changed by a later contradictory usage.

Advantages and Disadvantages of Custom

In comparison with statute law, custom has a number of disadvantages:

It is not quickly made, but requires time to evolve.

It is definite, and therefore more difficult to prove.

It is difficult to repeal, unless by statute.

Fresh customs are rare.

On the other hand, as a custom has evolved from a consensus of the people following it, it is more likely to be generally acceptable, and ethically good. Generally speaking – that is, apart from the continued existence of a few purely local customs – the common law of the realm no longer consists of the common custom of the realm. Practically all the general customs have received judicial notice or parliamentary codification, and they have therefore become either case law or statute law – see Magor and St. Mellons RDC v. Newport Corporation (1952) AC 189.

B. CASE LAW

The old theory was that the common law was simply a species of customary law applicable to the whole kingdom; in fact, the term "law" was considered synonymous with the term "common custom". As we have seen, this identification was very early rescinded, for the royal judges began to formulate a body of common law built up on their decisions, which sometimes were, and sometimes were not, in accordance with particular or general customs. These duly recorded decisions, called precedents, are responsible for the bulk of English common law.

We may regard precedents as a distinguishing feature of English law, and also its real core. The term refers to those decisions of judges which are authoritative and binding. They are sometimes termed judiciary law; judicial precedents; precedents; case law; adjudication; but

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in all cases the term refers to the rule of conduct enshrined in the decision or judgment of a judge, or judges.

History of Case Law

In our historical review of the growth of English law, we mentioned how the royal judges, during the first two centuries after the Norman Conquest, gave their judgments either in the royal court at Westminster or on their journeys. We further suggested that their decisions would normally be based on existing or assumed customs. As their aim was to unify the law, they probably circulated to each other "reports" of their decisions, in order that later judgments in similar cases would be framed similarly. There were also the "Rolls" of the courts, to which the judge could refer.

Towards the end of the 13th century, some anonymous reporters began to record the arguments of the pleaders and the judge's ruling, and the members of the legal profession found these notes so interesting for reference and study that Year Books (annual volumes), of such records arose. Reports of cases by anonymous reporters continued from Edward I's reign to Henry VIII's, probably written by students or practising lawyers attending the courts. These were succeeded by reports compiled by professional lawyers, and published in printed volumes bearing the author's name. They contained a statement of facts in the issue, a summary of the pleaders' arguments, and the verbatim judgments of the judges.

Naturally these Year Books were not so complete or accurate as modern Law Reports, but they assumed an ever-increasing importance. At first, they possessed persuasive authority only; they were evidence that such was the law, but judges were not bound to accept the decision as binding on them. Still, the mere fact that the judges admitted the principle of uniformity of law led to the playing of an increasingly important role by these reports, and greater weight was attached to the citation of decided cases.

Thus, in time, greater regard came to be paid to former decisions, but it was only towards the end of the 18th century that the doctrine of the binding force of precedent became accepted by the judges. About this time, Continental countries were codifying their respective legal systems, with a view to making the law more certain and ascertainable. England did not resort to a codification of the law but, in its place, adopted the doctrine of the binding force of precedent, which has the effect of making rules of law of more certain authority, so far as they have come before the courts in litigation.

Present Position

The current position is that courts are always bound by decisions of higher courts, and sometimes by those of courts of equal status.

Case law enjoys merit, in the sense that it is usually of finer workmanship than statute law, for the following reasons.

Judges know more about the law than Members of Parliament.

When a judge is laying down new law in pronouncing his/her decision in an action, the judgment is based upon the concrete facts of the case. Parliament, on the other hand, legislates more for the future.

Note that judicial precedent is a source of law, and not merely evidence of the law.

Operation of the Doctrine of Precedent

A judge is obliged to decide the case before him or her by reference to a previous decision when the conditions for the operation of the doctrine of precedent are satisfied. These are that the previous decision is, so far as its ratio decidendi is concerned, relevant to the determination of an issue of law in the case in question, and that the prior court's decisions are authoritative for his/her court, e.g. it is a court that is superior in the hierarchy.

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Function of the Doctrine of Precedent

The function of case law is to develop the law, whether common law or statute law. For centuries the prevailing view was that judicial decision was merely a declaration of what the existing law was; a judge is "not delegated to pronounce a new law, but to maintain and expound the old law" (Blackstone). He and his predecessors regarded the judges as the repositories of the entire body of customary principles that had existed from time immemorial, and their decisions as evidence of such customary rules of conduct.

However it is clear, for example, that legal rules referring to radio and television broadcasting can hardly have existed from time immemorial, but have arisen as the need for them developed. In point of fact, all judges have been entrusted with the power to make rules for cases not provided for previously and, in this sense, they make law, but not as a legislative body does.

Their decisions, although evolutionary, are never revolutionary, but are developments of existing rules, and always conform to the general principles of the law of the land as a whole. So-called innovations are simply extensions and modifications, and are natural expressions of the growth of the common law, in consonance with the current ideas and the changing needs of society.

A judge cannot decide, as a legislator does, as he/she pleases. Some standard must be applied, whether it be that of a previous decision, or the opinions of legal writers, or the Roman law, or equity, or some other consideration.

Although in strict legal theory, judges do not make law, it can be argued that they make law in the following limited ways:

(a)Where there is no existing precedent which is directly relevant to the case before them, then they must extend the existing law to cover the new situation by analogy.

(b)Where they overrule an existing precedent, frequently because there are other conflicting precedents.

(c)Where they distinguish precedents cited before them, and so limit the scope of the previous rule.

Classification of Precedents

Precedents can be conveniently divided into three classes, according to the nature of their binding force.

(a)Authoritative or Absolutely Binding

In these cases precedents are legal sources of law, and must be followed without question. Absolute authority is accorded to the decisions of the House of Lords, the highest English court.

However, in 1966, by a formal Practice Statement, the House of Lords judges announced that in future they would not regard themselves as necessarily bound by their own decisions. The Practice Statement said:

"Their Lordships regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases. It provides at least some degree of certainty upon which individuals can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules. Their Lordships, nevertheless, recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose, therefore, to depart from a previous decision when it appears right to do so".

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In fact, there have not been many occasions since 1966 when the House of Lords has departed from a previous decision. One major example is Herrington v. British Railways Board (1972) where the court departed from an earlier decision – Addie v. Dumbreck (1929) – concerned with the duty of care owed to a child trespasser.

Every court is absolutely bound by the decision of all courts superior to itself in rank. The Court of Appeal is bound by its own previous decisions, but the High Court and the lower courts are not bound by their own decisions.

At the lower end of the court hierarchy, the Crown Courts, Magistrates' Courts and County Courts do not create precedents.

(b)Conditionally Binding

While a lower court cannot question the decisions of a court of superior authority, it is not bound to accept the judgment of a court of equal status. Generally speaking, however, conditional precedents will be followed by courts of equal status, unless they are clearly undesirable. Consequently, in course of time, conditional precedents acquire almost absolute authority and, being followed by subsequent decisions, ultimately become binding.

(c)Persuasive

Persuasive precedents are those that do not intrinsically establish the law, but may be followed by courts because they are considered truly to state the law. There is no obligation to follow them. Examples of such precedents are:

The decisions of inferior courts on superior courts.

The decisions of the Judicial Committee of the Privy Council in appeals from the Commonwealth or any English court.

The decisions of other courts of the Commonwealth.

Foreign judgments.

Statements of law by British judges, which go beyond the case in point – these are called obiter dicta (remarks by the way).

The ratio decidendi, or the principle on which the decision of a judge is based, must not be confused with the opinions expressed by him or her either to explain or illustrate the law. Judges express the reasons for the formation of their decisions and this process of reasoning is a vital part of the precedent. Their obiter dicta, however, have no binding force but have persuasive opinion only, the value of which depends upon the reputation of the judge in question. Obiter dicta pronounced by judges in the House of Lords, for example, carry great persuasive authority.

(d)Declaratory and Original Precedents

A further distinction is often referred to – declaratory precedents, or those which merely declare the existing law, and original precedents, or those which, by applying a new rule, create or make new law. The old theory was that all precedents are declarations of customary law but, as we have seen, the common law is not, by any means, customary only. Moreover, as regards the principles of equity, these were not to be found in either custom or statute, but had their source entirely in judicial decisions, the various Chancellors making new law in their judgments.

Strictly speaking, there is no fundamental contradiction between the "declaratory" and the "original" theory of precedents. Precedents both declare the law and make it. Every legal decision is a step forward in the development of the law. Even when judges profess openly that they are merely declaring the law by applying an acknowledged rule, since no two sets of facts are precisely the same, the judges by

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It is more easily and quickly made than legislation, and this is particularly important where adaptation of the law to minute differences of circumstances is required.

It acts as the best preparation for statute law. Codifications such as the Sale of Goods Act 1979 and the Bills of Exchange Act 1882 are the outcome of judicial decisions, and are models of statute law.

Its detail is much richer than any code of law (but against this must be set its complexity).

Unlike statute law, there is harmony between new precedents and existing law, which grow concurrently.

The disadvantages can be listed as follows:

It is not made by the community but by the judges. However, Parliament can, and does, overrule judicial decisions, and the judges are strictly impartial and highly expert

– probably more so than a body of legislators.

As case law adds an increasing number of exceptions to unwanted rules, it is notorious for its bulk and complexity. It is a difficult form of law to handle but, as legislators now endeavour to anticipate judicial decisions, the statute law itself tends to become more bulky and involved, too.

Case law is often criticised as being retrospective in effect or "ex post facto". Theoretically, of course, judicial decisions merely give effect to principles that have always existed in the body of the law. This peculiarity does not always operate fairly, for a decision may upset long-standing interests by its retrospective operation.

Finally, it is difficult to disentangle that part of the judicial decision which is strictly a binding source of law (the ratio decidendi) from "things said by the way", i.e. obiter dicta.

Hypothetical opinions are to be carefully distinguished from the material facts of the case on which the decision, via judicial reasoning, was based. Material facts are those that influenced the tribunal in its conclusions; these are the essential parts. Other facts not relevant to the ratio decidendi must be disregarded.

When precedents are quoted against precedents in cases where the facts are similar, the precedent with the greater number of material facts similar to the case in dispute is normally followed. Naturally, this balancing of precedents is a highly difficult and technical process and, even when this complicated process has been completed, a higher tribunal may later reverse the accepted authoritative precedent, which may have been of an inferior court. This makes for uncertainty in the law. To the above must be added the fact that reports differ in accuracy, intelligibility and completeness.

Law Reporting

The system of case law, as you will see, depends on there being available accurate reports of all the important decisions of the superior courts. A full law library runs to some thousands of volumes of reported cases, with all of which the practising lawyer is, in theory, familiar. (In practice, of course, the best that even the best lawyers can achieve is to know how and where to seek the authorities they require.)

The earliest period of reporting is that of the Year Books, from 1283 to 1535. Many were written in "law-French", the language of medieval lawyers. Today, they are of more interest to the legal historian than to the practising lawyer, because it is not often necessary to go so far back for an authority.

From 1535 to 1865 was the period of "private" law reporting. Barristers and judges would report and publish cases considered to be of legal interest, and the law reports of this period

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are "labelled" according to the name of the lawyer reporting them. Like the Year Books, these reports are somewhat uneven in quality: the reports of the famous Sir Edward Coke, covering the years 1572 to 1616, enjoy very high repute.

In 1865, the period of "official" law reporting began, with the creation of the General Council of Law Reporting. The Council is responsible for issuing reports of important decisions of the superior courts, and these are labelled according to the year and the court making the decision. The official reports are "authorised", i.e. the barrister making the report must submit his/her notes for examination and amendment by the judge making the decision. Private, commercially sponsored reports continue to be issued, however, and enjoy considerable popularity among law practitioners and students.

C. NATURE OF EQUITY

Definition

In Study Unit 1, we briefly mentioned the fact that the type of law administered in the Court of Chancery is known as "equity". This word is derived from the classical Latin "aequitas", which meant fairness or reasonableness. In its practical application, "aequitas" signified the following of the spirit of the law, as opposed to the strict letter, and connoted reasonable modification of the letter of the ordinary law, which was based upon the moral rules of a former age.

As we saw, the common law was administered in the old royal courts and, because its rules were rigid, its strict application led, in many cases, to injustice and oppression. Thus, legal justice could be obtained in the royal courts, but where the rigidity of the common law worked unfairly or provided no remedy, an appeal was made to that higher justice called "equity", which resided in the King, as the "fountain of all justice". Thus, the King's residuary power permitted him to temper the inflexibility of the ordinary law and to do justice according to reason, good faith, good conscience and the current ideas of morality, when he was petitioned so to do.

We may define equity as

those principles of natural justice administered at first by the King-in-Council, and later by the Chancellor, first as a member of that Council and afterwards as an independent judge, to correct and supplement the common law.

It is therefore purely case law, and its principles are essentially judicial, but they were developed, you should remember, to mitigate the defects of other judiciary law.

History

As you are probably aware, a writ (now called a Claim Form) is the first step in an action arising out of a civil wrong. Very early in the Norman period, the King issued his will in matters of justice by executive orders in writing, the authenticity of which was certified by the Royal Seal. The Chancellor kept the Seal and, with his clerks, wrote out the writs and sealed them. He was, at first, quite a lowly person, being the chief domestic chaplain of the King, and doing the secretarial work. Being an ecclesiastic, he was the "keeper of the King's conscience", and represented the "moral attitude" of the Crown. During the 12th and first part of the 13th centuries, the number of writs grew very rapidly, and they were really an authoritative statement of the common law. In effect, these writs constituted a collection of legal remedies to be obtained from the King by persons applying for them.

The Chancellor, whose duties were at first secretarial, began to frame writs on his own authority. As the issue of a new writ was equivalent to the creation of a new legal right, the judges naturally resented this. The power of the Chancellor was checked first by the judges quashing his new writs, and secondly by the Provisions of Oxford 1258, which enacted:

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"The Chancellor will seal no writ, excepting writs of course, without the command of the King-in-Council".

The net result was that the common law became more rigid and the rules operated unjustly. An attempt was made to remedy this by the Statute of Westminster 1285, by which the Clerks in Chancery, the secretariat of the royal courts, were authorised and encouraged to extend the range of the law to meet the needs of altered or fresh circumstances, by framing special writs modelled on existing cases. However, the common law courts, which had power to decide whether a writ was good or not, failed to take full advantage of the provisions for extending the law and many further cases of hardship and injustice occurred.

As a consequence, suitors began to address petitions to the King, which were referred to the Chancellor. Finally, petitions were addressed direct to the Chancellor, who took upon himself to remedy the wrong. This judicial activity of the Chancellor commenced at the end of Edward III's reign. In time, the Chancellor sat alone, and disobedience to his decrees and orders was punishable as special contempt of the King's authority. As a result, the Chancellor came to be recognised as a judge, apart from the common law judges, administering justice on equitable principles.

Basis

The basis of the equity administered by the ecclesiastical Chancellors was conscience, and this led in some cases to principles and conclusions opposed to the rules of common law. Abstract justice could be done in individual cases, even though it meant dispensing with the law of the state. The seeds of friction between the Chancellor and the common law judges were sown and differences, in time, became acute.

Superiority of Equity

What was the weapon the Chancellor used when petitioned? If he considered the petitioner had a "prima facie" (straightforward) case, he issued a writ of subpoena, which was an order addressed to the defendant, requiring him to appear before the Chancellor and his Council on such a day, in his proper person, under a penalty (subpoena) of so much, to answer on oath what should be objected to him. When he appeared, the defendant was subjected to a searching examination on oath. The Chancellor dispensed with juries, and tried the whole case himself. The procedure was inquisitorial. If he decided in favour of the petitioner, he did not pronounce "guilty" but issued a decree ordering the defendant to perform certain acts, or to refrain from certain acts, such as insisting on his legal rights, under penalty of imprisonment.

This procedure was much more flexible than the limited remedies afforded in the common law courts, with their highly technical system of writs, pleadings, juries to decide questions of fact, and the inflexible rule that a party to an action could not give evidence.

Thus, the Court of Equity was markedly superior in its procedure and remedies, and it is not surprising that it attracted much business with which it could not keep pace, despite the later appointment of a Master of the Rolls, and other staff, and the erection of new courts of equity. There were frequent complaints about the slow procedures and delays.

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D. APPLICATION OF PRINCIPLES OF EQUITY

Uses (Trusts)

One of the earliest subjects falling within the Chancellor's jurisdiction was uses, or trusts of land.

Under the feudal system, the King was the supreme and ultimate land-owner – everyone held their land, in the last resort, from him. In return, the land-holder rendered to the King certain services, e.g. the provision of a number of men at arms, agricultural produce, and so on. As society became more developed in the Middle Ages money became more important, and there was a growing tendency to change the service into money. By far the greater proportion of the feudal service became money dues although, strictly speaking, they were neither taxes nor rates.

Although there are records of uses having been created even before the Norman Conquest, the only uses found for some time after the Conquest appear to have been merely temporary uses, e.g. while a man was on a crusade. In about 1225, the Franciscan friars came to England. The rules of their order prevented their owning property, so land was conveyed, for example, to some town to the use of the friars. After this, uses of a permanent nature became more common, and by the middle of the 14th century they were frequent.

The common law refused to recognise the validity of a device of land (a device being a gift of land by will), and it was held that the number of writs in the case of land law could not be increased. The land-owner therefore turned his attention to the use. He conveyed his estate to a trusted friend who was to hold it, not for his own benefit, but to carry out the instructions given by the transferor. In legal terms, the land was formally conveyed to certain trustees, who were called feoffees, to the use of the grantor's beneficiary, who was usually called the cestui que use, (the person for whom the use is). The feoffees to uses became the legal owners and were the only tenants recognised by the common law courts. The beneficiary could only rely upon their good faith, and since uses were not incorporated into the common law, he could not make a dishonest feoffee carry out his trust. Redress, therefore, had to be sought elsewhere, in order to secure the enforcement of these obligations.

Petitions for this form of redress were finally, in the 14th century, directed to the Chancellor who, by the early 15th century, decided to protect the interests of the cestui que use. Their beneficial interests were, through equity, enforced against the original feoffees to uses, and further, by extension, against the feoffee's heirs and even against a purchaser with notice of the trust, although the purchaser of the legal estate with no such knowledge was not affected. Thus, equitable interests affecting the legal ownership of land were admitted as binding all who came to the land except as bona fide purchasers of the legal estate without notice of the equitable interests.

The Statute of Uses

A division of ownership into legal and equitable interests came about because the Chancellor had created interests in equity unknown to the common law. However, in 1535, Henry VIII, finding that the increased frequency of uses deprived him of the revenue arising from the incidents of feudal tenure, forced through Parliament the Statute of Uses, to avoid such losses. This statute attempted to abolish the distinction between legal and equitable ownership. The cestui que use was held to be vested with the legal interest in the freehold, the "use" merely operating to transfer to the beneficiaries the legal estate. Hence, the beneficial owner was now seised (feudally possessed) of the land as a legal estate, and was subject to its common law burdens and incidents.

Two types of equitable interest remained unaffected:

Uses of personalty including leaseholds.

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