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"Active" uses, where the trustee needed the legal estate to perform active duties, like collecting rents to pay a cestui que use.

These two exceptions were the basis of the modern trust.

However, in the concept of equitable ownership there followed the new development of a use upon a use. This was not frequent until after 1535. By this procedure, A gave lands to the use of B to the use of C, i.e. B was to hold them for the "use" of C. In Jane Tyrell's Case (1557), the common law courts decided that there could be "no use upon a use", so that B got the legal estate by virtue of the common law and C took no interest.

After the abolition of the incidents of feudal tenure in 1660, however, the Crown had no further interest in the prohibition of equitable ownership. The courts of equity took the view that it would be unjust to allow B to retain property not belonging to him, and they began to enforce the second use. B, though seised of the legal estate, was deemed to hold to it upon trust for C.

There was thus resurrected the doctrine of equitable ownership, but with a change of name. The new relationship was a trust, the legal owner a trustee, and the old terminology was gradually dropped. In other words, the Statute of Uses became a dead letter, and the jurisdiction of Chancery over equitable ownership was completely acquired under the name of trusts, and equitable rights in land again developed and flourished.

Mortgages

A very important body of doctrine was built up by the Chancellor in connection with mortgages. A mortgage of land is only security for the payment of money lent upon it. Such mortgages had been common since the early Middle Ages. It is sufficient here to note that the borrower conveyed his land to the lender (the mortgagor to the mortgagee) and a day was named in the mortgage deed for the repayment of the mortgage money, generally six months from the date of the conveyance. In the deed, there was a proviso for redemption whereby the mortgagee – who had the legal ownership – agreed to reconvey the land if the money were repaid on the stipulated date. Often, mortgagors were unable to repay on the date named. The result was that the right of redemption was lost for ever. The common law would not, and could not, help the mortgagor.

Equity interposed and insisted on the real intention of the parties being adhered to. In the Chancellor's view, the land was only conveyed as a mere security for the loan. Though the legal right of redemption expired with the date of repayment, an equitable right of redemption arose immediately after such expiry. The mortgagor had a new kind of equitable ownership – he had his equity of redemption – and he resembled a beneficiary under a trust. This equitable right he could sell, devise by will, settle, or mortgage again, and he could only lose it after the Court of Chancery had given him ample time to repay. Thus, when application was made to the Court of Chancery to "foreclose", as it is called, the mortgagor was given a last chance by an order "nisi", i.e. unless he paid within a stated time, he lost for ever his right to redeem.

Specific Performance

Another function of Chancery arose in connection with the remedy called specific performance. By specific performance we mean compelling a person to carry out a contract he/she has actually entered into. If A agreed to sell a house to B for £45,000 and then had another offer of £45,500, A might sell the house to the higher bidder, breaking the bargain with B. The common law remedy for every such wrong was damages. However, suppose B really needs that particular house. In that case, he would prefer a bill in equity and the Court of Equity could order A to sell the house to B on pain of imprisonment if A refused.

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Injunctions

An injunction is an order, granted by the court, preventing an unlawful act. For example, A hears on good grounds that B is about to erect a building near A's own, interfering with A's right to light for his windows. The common law could not prevent B from doing this, but could award damages after the damage was done, i.e. when the light was blocked up. Equity could prevent B from building in such a way, and could compel her to pull down the objectionable wall, or house.

Other Reliefs not Available at Common Law

The Chancellor gave relief against fraud, mistake, accident (especially the accidental loss of a document), breach of confidence, and general inequitable dealing where the inflexibility of the common law worked harshly.

E. EQUITY AND COMMON LAW

Relationship of Equity and Common Law

The origin of the equitable system of granting injunctions can be traced to Henry VI's reign. By the time of Elizabeth I, the now popular Court of Chancery was at variance with the common law courts, and in the early 17th century a quarrel broke out between Chief Justice Coke of the Court of Common Pleas and Lord Ellesmere (the Lord Chancellor), on this subject of injunctions.

In 1616, James I supported the Chancellor, and laid down by statute that, where the rules of common law and equity conflicted, the latter were to prevail.

From that time, the rights of the Chancery were rarely disputed, and it was a court of equal, and in some subjects superior, authority to the common law courts.

Thus, a more important stage in equity's development was begun. Previously, equity had been a set of principles, based on conscience, or Roman law, or canon law which assisted, supplemented or set aside the law in order to do justice in individual cases. Henceforth it tended to become a more settled system of rules, which supplemented the law in certain defined cases. Thus, the various rules of equity hardened into a definite body of legal doctrine, and by the 18th century the modern English system of equity was finally established.

At length, by the passing of the Judicature Acts 1873 and 1875, the Court of Chancery, together with the common law courts, was abolished, and the two rival systems of common law and equity as administered on different principles came to an end. The Supreme Court of Judicature was established for the common law and Chancery courts. Every judge has both a common law and an equity "mind". The principle established by the statute of 1616 was retained, and where there was any conflict between the rules of equity and those of the common law, the rules of equity should prevail. Notice that though there is still a Chancery Division, the common law courts must administer the law in accordance with the principles of equity, all courts administering common law and equity concurrently, and equity prevailing in case of a conflict.

Always remember, however, that the Judicature Acts fused only the administration of common law and equity. The two branches of law themselves were not fused; they remained, and still remain, distinct and separate. Maitland, the great historian of equity, wrote:

"The two streams (of common law and equity) have met, and now run in the same channel, but their waters do not mix".

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Contribution of Equity to English Law

Equity has made the following chief additions to the common law:

(a)Trusts and settlements in respect of property.

(b)The doctrine of "undue influence" in respect of contracts.

(c)Property for the separate use of married women which the common law did not recognise, but which is now statutory.

(d)Superior remedies, e.g. specific performance or an injunction, instead of simply "money compensation".

Eventually, equity became almost, but not quite, as rigid as the common law it had replaced, and its place, as the vehicle through which newer and better rules were introduced into English law, was taken by legislation.

At one period, indeed, it appeared that, just as the rigidity of the common law had in the first place necessitated the development of equity, so equity itself had reached a state of inflexibility, and that legislation would henceforth be the only method of bringing about changes in the law. However, this was never completely true, and recent years have seen the emergence of what is sometimes called "new equity", a development that is especially associated with the name of Lord Denning. For example, later in this course we shall see how, in the famous case Central London Property Trust Ltd v. High Trees House Ltd (1947) he applied equitable principles to modify considerably the effect of the common law doctrine of "consideration" in the law of contract, where the doctrine appeared to be resulting in injustice.

F. CLASSIFICATION OF EQUITY

We can divide equity jurisdiction into three classes.

The Exclusive Jurisdiction

This jurisdiction covers matters of which the old common law took no notice. The great example is the enforcement of trusts, with which we have already dealt.

The Concurrent Jurisdiction

This covered cases which were known to the common law but which the Court of Chancery was inclined, in some instances, to recognise.

Matters of contract would come within this category where the only defence to the claim was one recognised in equity. For instance, if A sued X in the Court of Common Pleas upon a contract, and X's defence was one of misrepresentation, or undue influence, defences which the Court of Chancery had developed, X could apply to the Chancellor for an injunction (called the common injunction) prohibiting A from continuing his action at common law, or if A had already obtained judgment in the action, from enforcing the judgment by levying execution upon it. This would force A into the Court of Chancery, if he wished to proceed with his claim against X, when X would be able to raise his equitable defence to it.

It was the concurrent jurisdiction, and the issue of the common injunction by the Court of Chancery, which gave rise to the quarrel during the reign of James I between Lord Ellesmere, the Chancellor, and Chief Justice Coke of the Court of Common Pleas (see earlier).

Since the Judicature Acts 1873–75, the common injunction has disappeared. Now that all courts administer the common law and equity together, equity prevailing where there is any

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conflict between the two systems, a defendant can always raise his/her equitable defence to a common law claim in any court. Hence, the need for the common injunction has gone.

It is not often that a conflict arises between the common law and equity because, for the most part, the two systems deal with different matters, but in the concurrent jurisdiction of equity conflicts may be met with. You can find an example of such a conflict after the passing of the Judicature Acts 1873–75 in the case of Walsh v. Lonsdale (1882). There was a lease of a mill for seven years. At common law the lease should have been in seal; in equity, all that was required was a written lease, though not under seal. The lease in question was in writing, not under seal. Therefore, it was held valid as equity was to prevail in cases of conflict.

The Auxiliary Jurisdiction

Here, equity helped out the common law with new remedies and machinery which was lacking. Instances of this jurisdiction were as follows:

Injunctions and order of specific performance of contracts

The subpoena of witnesses

Rectification and cancellation of documents

In connection with the administration of the separate systems of common law and equity, prior to the passing of the Judicature Acts 1873–75, great inconvenience was caused to litigants by the fact that the common law was administered in one set of courts, while the system of equity was administered in a totally different tribunal, namely, the old Court of Chancery.

If the action was before the Court of Common Pleas, for instance, in order to obtain a subpoena to summon a witness it was necessary to apply to the Court of Chancery. If one party wanted what was known as "discovery of documents", now known as Disclosure, from his opponent, i.e. an order that he set out on oath a list of the documents in his possession relevant to the case, he had to make application for an order of discovery of documents to the Chancellor.

Now that common law and equity are administered together in all courts, the litigants do not experience the inconvenience which formerly existed when the two systems were administered in different courts.

G. LEGAL AND EQUITABLE RIGHTS

Equitable rights or remedies such as injunction and specific performance are purely discretionary; in contrast to remedies at common law or under statute, they are never granted as of right. To that extent, it is not strictly accurate to refer to equitable "rights". They are entirely at the discretion of the court, although in the course of time that discretion has come to be exercised judicially according to precedent. In the High Trees House Case, such discretion was exercised where the rigid observance of the common law doctrine of "consideration" would have resulted in great injustice. In other cases (e.g. Walsh v. Lonsdale) equitable rights have been granted where equity and common law were in conflict.

Note that equitable rights or remedies are not self-sufficient and depend on the prior existence of the common law. They developed essentially as devices for rectifying the anomalies and injustices caused by the strict application of legal rights. Without the common law, equitable principles would be unrelated and largely irrelevant.

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H. NATURE OF STATUTE LAW

History

Statute law, often called legislation, as we have already seen, is written law enacted by the approved legislative process of the state. A statute is also called an Act of Parliament.

Under the Normans and early Plantagenets, statutes were promulgated by the King, usually at meetings of the Great Council. Its assent to these was only a matter of form, since it was the King who really made the laws.

From the reign of Edward I, representative Parliaments began to develop, for the Model Parliament of 1295 contained not only the royal tenants-in-chief but also representatives of the shires and boroughs, summoned collectively through the sheriffs.

In the early Parliaments, the process of legislation involved the members presenting petitions to the King which were either accepted and promulgated as law or reserved by the King for his further consideration.

Under Edward III, Parliament began to meet in two separate Houses, the Commons and the Lords, and the idea began to grow that statute law should be enacted by the King-in- Parliament. Kings, however, still insisted on their right to promulgate legislation without Parliament and it was not until the Bill of Rights 1689 that the principle of the sole legislative authority of the King-in-Parliament was accepted. Officially, the monarch still has the power to refuse assent to Bills presented by Parliament, but this veto was last exercised by Queen Anne in 1707 with regard to a Bill for "settling militia in Scotland". The royal veto is unlikely to be exercised these days, except perhaps in some extreme crisis.

Records of Statutes

The early statutes were entered on Statute Rolls which provide the authority for them, although in some cases the original document also survives. The earliest of these Rolls begins with the Statute of Gloucester 1278, which limited the jurisdiction of the local courts in civil suits. Between 1278 and 1445 there are six of these Rolls, and they are known as the Great Rolls of the Statutes.

With the ending of the Statute Rolls we have "enrolments of Acts of Parliament", certified and delivered into the keeping of the Lord Chancellor. There is a continuous series of these running from 1483 until the present day.

From the time of Henry VII, it became the practice for printed copies of statutes to be distributed by the King's Printer and from the 18th century it has been a legal requirement that copies should be distributed throughout the country.

During the 13th and 14th centuries, a statute was cited either by the name of the place where the Council or Parliament sat, e.g. the Statute of Gloucester; by the first words of the statute itself, e.g. Quia Emptores 1290; or according to the object of the statute, e.g. the Statute of Labourers 1349. From the 14th century onwards, when Parliament normally sat at Westminster, statutes were cited by the date of the year of the reign of the sovereign in which the statute was passed, e.g. 24 George 2 stands for the 24th year of the reign of George II.

Most modern Acts of Parliament contain a short title and are usually quoted by their title and the year in which they were passed, e.g. the Criminal Procedure Act 1961.

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The effect of this Act and the later European Communities (Amendment) Act 1986 has been to limit considerably the scope of the doctrine of the sovereignty of Parliament. In 1962, in its judgment in the historic case of Van Gend en Loos, the European Court of Justice declared that: "The Community constitutes a new legal order ... for the benefit of which the (member) states have limited their sovereign rights". The total supremacy of Community law was upheld by the European Court of Justice in another notable case – Costa v. ENEL (1964). Section 2(1), European Communities Act 1972, gives direct legal effect in the United Kingdom to those parts of the EU legal order intended to have direct effect, and the primacy of EU law as a whole is achieved by Section 2(4) of the Act. As a result of UK membership of the EU, the sovereignty of Parliament as a legislative body has been subordinated to EU law, and to the legislative authority of both the EU Commission and the Council of Ministers.

We have already emphasised that EU legislation is now a written source of English law. The Treaty of Rome and its implementing statutes now override English law.

An example of this aspect is to be found in Article 85 (now Article 81) of the Treaty of Rome, which states that: "the following shall be deemed to be incompatible with the Common Market and shall be prohibited; all agreements between enterprises and any concerted practices which are likely to affect trade between member states and which prevent, restrict or distort competition within the Common Market". The Article is wide enough to affect many normal commercial agreements which fix prices in secure markets. As a result, many such arrangements have been prohibited under the EU law, since they prevent fair competition within the Common Market.

A major effect of UK membership of the European Union has been an increasing move away from case law towards legislation. There has been much emphasis on the interpretation of EU directives and regulations. Interpretation tends to follow the broader Continental techniques, rather than the narrower English approach.

Changes to the House of Lords

Significant changes were made to the composition of the House of Lords in 1999 by the removal of the voting rights of the majority of hereditary peers.

I. INTERPRETATION OF STATUTES

When a statute is passed in due form, supposedly perfected, it has to be interpreted and applied. Theoretically, this should be easy, for all that has to be done is to apply "the letter of the law". Many statutory measures, however, if so interpreted, would produce interpretations wholly inconsistent with the purpose of the statute; injustice, ambiguities, and unreasonableness never intended by Parliament. Judges, therefore, have a twofold task. They must decide upon the exact meaning of what the legislature has said, and they must consider what the legislature intended to say, i.e. the true intention of the law.

The function of interpreting statutes confers upon the judges a considerable amount of power to modify the effect of legislation. We saw earlier that judicial precedents may be extended or restrictively "distinguished", according to whether their effect is liked or disliked. In a similar way, judges, at least in past times, have construed statutes either liberally or restrictively, according to the view they took of the statutes. Thus, it was formerly the rule that remedial statutes (those passed to remedy defects in the common law) should be interpreted extensively or liberally, while penal statutes (those imposing punishments) and statutes imposing taxation should be interpreted as restrictively or narrowly as possible.

The judiciary interprets statutes by following certain rules of construction.

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deal with this mischief and thus, contrary to usual principles, allowed the Act to be retrospective.

Aids to Construction

The judiciary can also use certain aids to construction when interpreting statutes.

(a)Internal Aids

These are matters contained within the statute itself, which will help the judge to interpret its meaning and which can be referred to by him or her.

The Preamble

This consists of the introductory paragraphs, setting out in brief the purpose of the statute.

The Interpretative

One or more interpretation sections are often found within a statute. These have the purpose of explaining the meanings of words or phrases within the statute.

For example, Section 276, Factories Act 1961 explains in great detail the meaning of the term "factory".

The Section Headings

These may be referred to in order to see if they clear up any difficulties within the section.

But note that, since any marginal notes are not inserted by Parliament, they cannot be referred to by the judiciary.

(b)External Aids

These are matters lying outside the statute which can be referred to by the judiciary.

Interpretation Act 1889

By this Act, Parliament consolidated a series of standard expressions, the interpretation of which is to be applied generally in the interpretation of Acts of Parliament, unless specifically excluded. For example, words having the masculine gender shall include females, and words in the singular shall include the plural, and vice versa.

Dictionaries

English dictionaries can be used to explain the ordinary meaning of terms used in statutes.

Other external sources, such as textbooks and the Hansard Reports of the proceedings in the Houses of Parliament, may only be used in clearly defined circumstances.

(c)Presumptions of Interpretation

These are presumptions which can be relied on by the judiciary when interpreting a statute.

Unless clearly stated, an Act of Parliament does not alter the common law. Thus, the common law will not be altered unless this is clear.

For example, Sweet v. Parsley (1969) which dealt with the interpretation of the Dangerous Drugs Act 1965, made it clear that there was a presumption that, if a statute was silent as to the need or otherwise of mens rea (guilty mind) before an offence was committed, then mens rea was to be proved.

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The Crown is outside the effect of the statute.

The Act applies to the whole of the United Kingdom.

The Act is not retrospective.

Interpretation of EU Legislation

EU legislation in the form of directives and regulations and UK statutes implementing such legislation must now be interpreted by English courts in accordance with the principles of interpretation followed by the European Court of Justice. One of the major principles is that of proportionality. Legislative provisions of the Commission or Council must be proportionate to the intended effect and the court will not accept legislative measures if other, less restrictive, measures would achieve the same purpose.

An important aid to interpretation is the preamble of the directive or regulation, since it has to state in detail the reasons which form the basis in fact and in law for its determination. The European Court of Justice also makes use of academic commentaries by eminent jurists to assist it in its interpretation of EU legislation.

J. CODIFICATION AND CONSOLIDATION

Codification of a Legal System

Many Continental countries have reduced their law to a single code of laws which have been re-enacted as a single statute. This has the advantage of making the whole of the law of the state into statute law, but it has not the flexibility of the English system, which brought together all the law (whether statute or case law) on a particular subject into one comprehensive code.

England has not attempted any general codification of the law. Certain parts of the law have, however, been codified by, for example, the Bills of Exchange Act 1882, the Sale of Goods Act 1979, and the Theft Act 1968.

It is undesirable that the law should be codified until it is in a fully-developed state.

Once a codification is effected, there is a tendency for the legislature to go to sleep and the law then ceases to be developed with the growing needs of the times. In France, for instance, the law of bills of exchange was codified prematurely, whereas in England the Bills of Exchange Act was not introduced until 1882, when the law had become fully mature.

Even when a codification of the whole legal system has been effected, there is still the difficulty of interpreting the code.

Consolidation

This is the reduction of a number of statutes into one single statute which repeals the former statutes, the contents of which have been so consolidated – an example of this, is the Rent Act 1977. Into this enactment were incorporated the provisions (with some amendments) of the previous 40 years, reforming Acts dealing with house tenants and their rents, etc.

Cases which went to interpret sections of statutes that have been consolidated into a later enactment remain as precedents for the constructing of the consolidating statute, so far as those sections have been repeated in the consolidating statute.

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