12 Maxims

1. Equity is discretionary
Equity can be characterized as doctrinal made up of identifiable rules that are to be
applied strictly without any role for judicial discretion
But doctrinal Equity is not fixed in stone Sir George Jessel MR in Re Halletts Estate
recognized that doctrines are progressive, refined, and improved
The recognition of specific doctrines within Equity does not mean that there is no role
for any discretion
Award of equitable remedies lies in the discretion of the court
Eg if the elements of proprietary estoppel can be established, judge has the discretion to
determine what the most appropriate method for satisfying the equity might be
2. Equity is triggered by unconscionablilty
Equity operates on the conscience of the owner of the legal interest Lord BrownWilkinson in Westdeutsche Landesbank Girozentrale v Islington
Unconscionability as a mere guiding principle? Lord Templeman in Winkworth v
Edward Baron Development
Regarded as a guiding principle in Australia Muschinski v Dodds, Roxborough v
Rothmans of Pall Mall Australia
In England, there is a tendency to treat unconscionability as a rule of substance, but
even this is open to criticism since there is a danger that its inherent vagueness means
that it readily becomes only a guiding principle
EG. unconscionability has been used to prevent a defendant from relying on his or her
strict statutory rights where the defendant has indcued the claimant to act to his or her
detriment
unconscionability has been used as a basis for creating equitable proprietary rights
where the defendant has received property from the claimant that the defendant
should have returned but has failed to do so
3. Those who seek equity must do equity
When granting an equitable remedy, the judge should ensure that the claimant is willing
to act fairly towards the defendant in the future
Chappell v Times Newspapers an injunction was denied to employees who wished to
restrain their employer from dismissing them because they had refused to undertake
that they would not strike in future
To ensure that the claimant does indeed do Equity, the judge can attach conditions to
the grant of an equitable remedy
Following Ramsden v Dyson, when the claimant seeks to recover land from the
defendant, but the claimant knows that the defendant has spent money on the land in
the mistaken belief that the land belongs to the defendant, it can be a condition of the
claimant recovering the land that the defendant is reimbursed for this expenditure

In Re Berkeley Applegate (Investments Consultants) Ltd, it was recognized that a

beneficiary cannot claim property from a trustee without reimbursing the trustee for
costs that he or she has incurred and for the trustees labour in administering the
property

4. Those who come to equity must come with clean hands

Equitable relief will be denied to a claimant whose conduct can be considered to be
improper in some way Dunbar v Plant
In Dering v Earl of Winchelsea, it was held that improper conduct involves impropriety
in a legal, and not a moral, sense
The improper conduct must relate to the relief that is sought in some way
Just because the claimants general conduct is unacceptable does not mean that Equity
will deny relief to the claimant
In Argyll (Duchess) v Argyll (Duke), the Duchess was able to obtain an injunction to
restrain her former husband from publishing confidential information, even though it
was her adultery that had led to the breakdown of the marriage in the first place
o In that case, Ungoed-Thomas J recognized that although a person coming to
Equity must come with clean hands, the cleanliness required is to be judged in
relation to the relief sought
A further restriction on the operation of the clean hands maxim has been recognized,
namely that it is possible to obtain an equitable remedy despite the claimant having
unclean hands if it is not necessary for the claimant to rely on the improper conduct to
obtain the remedy
Eg. In Tinsley v Milligan, the claimant and defendant had been lovers. They bought a
house together, but it was put in the sole name of Tinsley on the understanding that
they would have joint beneficial ownership of it. This arrangement was to enable
Milligan to perpetuate a fraud by making false benefit claims. Tinsley made similar
fraudulent claims. Subsequently their relationship ended and Tinsley brought an action
for possession of the house, asserting that she had sole ownership of it. Milligan
counterclaimed that they shared the ownership of the house in Equity because the
nature of the relationship between them was such that it could be presumed that her
contribution to the purchase price was not intended to be a gift, so that she had
equitable interest in the house.
o Issue for the HOL: whether Milligan was able to assert her equitable proprietary
interest when the purpose of the arrangement had been to enable her to
perpetrate a fraud.
o Held: By a majority, it was held that Milligan could do so because she did not
need to rely on the illegality to assert her proprietary right. She simply needed
to show that she had contributed to the purchase price and that there had been
a common understanding that she would acquire an interest in the property.
o Lord Goff dissented on the specific ground that Milligan was unable to obtain
equitable relief because she had not come to the court with clean hands. But
this conclusion was dubious for a number of reasons:

i.

ii.

Surely it must be possible for the party who seeks equitable relief to
clean their hands, by repenting of their illegality? Indeed in Tinsley v
Milligan, M had repaid the benefit that she had unlawfully obtained
The dirt in this case could be considered to be too remote from the
claim that M had an equitable interest in the property. It follows that
the maxim will not be relevant to deny equitable relief where a party
seeks to enforce an equitable proprietary right that can be established
without needing to plead the illegality

5. Equity treats as done that which ought to be done

Where parties have entered into a contract that is specifically enforceable, Equity will
treat the contract as having been performed
The maxim is relevant where, for example, the defendant has agreed to transfer
property to another party, but has not done so
In such a scenario, the law will look at the reality and will treat the defendant as still
owning the property
But if the contract is specifically enforceable, Equity will treat the defendant as having
done what he or she had promised to do, namely transfer the property to the claimant,
who will then be treated as owning the property in Equity
Since the defendant now has legal title and the claimant now has a title recognized in
Equity, the defendant will hold the property on trust for the claimant
This will still be the case even if the defendant has done nothing wrong in not
transferring the property to the claimant
So, for eg, if the defendant enters into a contract with the claimant for the sale of land,
title to the land will not be transferred until completion. But once the contract for sale is
made, Equity will treat the transfer as having occurred, so the vendor will hold the land
on constructive trust for the purchaser
Maxim is also significant in respect of leases provides the basis for the decision in
Walsh v Lonsdale that Equity will treat a person who has agreed for valuable
consideration to take a lease as though that person is a lessee of property
6. Equity protects the weak and the vulnerable
Undue influence doctrine one party may have actually unduly influenced the other
party, or may be presumed to have done so, where the contract requires explanation
RBS v Etridge (No. 2)
Equity will also intervene where there is inequality of bargaining power between the
parties and the defendant has unconscionably taken advantage of the claimants special
disability Hart v Connor
In Cresswell v Potter, the claimaint who was a telephonist, had released her interest in
the matrimonial home to her husband as part of a divorce settlement. This relsease of
the interest was set aside because the claimant was characterized as being poor and
ignorant as to the operation of property transactions. Also, the transaction was unfair,
since it had been at a significant undervalue and the claimant had not received any
independent legal advice as to whether the release on those terms was appropriate

Fiduciaries equity ensures to protect a fiduciary relationship

7. Equity is cynical
Equity is suspicious of a gift will presume that the donor did not intend to make a gift,
so that the recipient will hold the putative gift on a trust for the claimant
In Tinsley v Milligan, the claimant had provided part of the purchase price to enable her
to buy a house with her partner, although the property was registered in the sole name
of the other purchaser. It was presumed that this was not intended to be a gift to the
other party, who consequently was assumed to hold the property on trust for both of
them
Equity assumes that certain types of relationship may be such that one party is likely to
exploit the other and so there is a presumption that any transaction between them
might be exploitative, so that it is possible to set it aside
Equity will presume that a parent has influence over his or her minor child (Lancashire
Loans v Black), that a doctor has influence over his or her patient (Mitchell v Homfray),
that a solicitor has influence over his or her client (Wright v Carter), and that a trustee
has influence over his or her beneficiary (Ellis v Barker)
Much of the law on fiduciaries could be considered to be influenced by Equitys
cynicism: Equity requires the highest standards of fiduciaries because of fears that
people occupying such positions of trust and confidence may be tempted to prefer their
own intersts over those of their principals
If a fiduciary makes any profit from their relationship, he will be liable to disgorge it to
the principal, even if this was part of a transaction that was for the benefit of the
principal Boardman v Phipps
8. Equity is imaginative
Where a claimants money is mixed with money belonging to the defendant or another
party, the Common Law holds that the claimants property is no longer identifiable in a
mixture, so that the claimant will no longer have any property rights in the money
Taylor v Plumer
Equity however, treats the mixture as a fund and, as long as it is possible to know, or
presume, what the claimants proportionate contribution to the fund was, Equity will
recognize that the claimant continues to have a proprietary interest in that proportion
of the fund El Ajou v Dollar Land Holdings plc
The remedy of rescission, either at Common Law or in Equity, is barred where the
claimant has received benefits from the defendant under the contract and is unable to
restore those benefits bar of restitutio in integrum being impossible
At law, rescission is barred if the claimant has received a benefit in kind from the
defendant, because the Common Law is unable to value such benefits
But Equity is not so restricted
Where a claimant has received goods or services from the defendant under a contract
that is voidable, Equity is willing to value the benefit in kind and make it a condition of
rescission that the claimant repays this value to the defendant OSullivan v
Management Agency and Music

9. Equity follows the Law

Eg. Equity recognizes legal estates, rights, interests, and titles. But if Equity were to have
followed the law absolutely, there would have been no scope for the development of
separate equitable doctrines and a separate identity for the equitable jurisdiction
Eg. two parties own a house that is registered in their joint names. If the parties
relationship fails, they will both claim a beneficial interest in the property. Equity will
presume that the beneficial interest in the property corresponds to their legal interest,
so that they will share the beneficial interest equally, unless this assumption can be
rebutted by a contrary intention Jones v Kernott
10. Equity looks to substance rather than form
Where the words of a contract do not reflect the common intentions of the parties,
Equity is willing to rewrite the document to reflect those intentions The Olympic Pride
This is, however, exception and, as Meagher, Gummow, and Lehane have recognized,
There is no general equitable jurisdiction to construe contracts so as to effectuate the
actual intention of the parties if it is clear that the parties agreed on the form of the
contract
Similarly, Equity will identify a trust, even though the settlor has not explicitly state that
he or she intended to create a trust, where it is possible to identify an obligation that the
recipient of property holds that property for somebody else
At the other extreme are circumstances in which the settlor has purported to create a
trust but Equity, having regard to the substance of the transaction, concludes that the
trust is a sham
11. Equity will not assist a volunteer
A volunteer is somebody who has not provided consideration for a particular
transaction and is typically exemplified by the donor of a gift
The main application of this maxim is in the context of when a donor purports to make a
gift to the donee, but the gift is not effective at law, so that legal title is retained by the
donor
Has been recognized that Equity will not perfect an imperfect gift (Milroy v Lord), and
this rule is clearly founded on that Equity not assisting a volunteer
Exceptions when Equity is perfectly content to intervene and provide assistance to a
volunteer
o Eg. if the donor has done all that is necessary to transfer legal title to the donee,
Equity will treat title as having been passed to the donee (by virtue of the maxim
that Equity treats as done that which ought to be done), even though the donee
has not provided any consideration for the transaction
o The donor will still have legal title, but since Equity recognizes that the property
belongs to the donee, he or she will have an equitable proprietary interest in it
o Since there is a split of legal and equitable title arising by operation of law, the
property will be held on constructive trust for the donee by the donor
The maxim that Equity will not assist a volunteer will also be trumped by the principle of
unconscionablility, so that a donor who has purported to make a gift, but who does so
ineffectively, may be considered to hold the property on constructive trust for the

donee if the donors conduct can be characterized as being unconscionable

Pennington v Waine
12. Equity assists the diligent
Even if a claim is not time-barred under statute, the claimant may be prevented from
obtaining an equitable remedy if ther has been delay in seeking the remedy
This provides the basis for the equitable doctrines of laches and acquiescence
13. Equity is Equality
Where there are equitable interests in property, Equity presumes that they are equal
interests and will be treated equally
Eg. where the trustees have a power to appoint to a charitable purpose and a noncharitable purpose, if the power is not exercised, the court will allocate half of the fund
for charitable purposes and half for non-charitable purposes Hoare v Osborne
The general significance of the maxim has, however, been doubted in the law of trusts,
although the maxim has proved to be significant in the context of determining the
respective interests of a cohabiting couple in the family home
The maxim that Equity is equality was applied controversially in Re Bowers Settlement
Trusts, in which the testators will left the residue of his estate to the beneficiaries in
unequal shares. There was also a direction in the will that if one of the beneficiaries
were to die, his share should accrue to the other beneficiaries
Morton J applied the equitable maxim so that the deceased beneficiarys share was
distributed equally between the other beneficiaries rather than proportionately in
accordance with their existing share of the residue
Whether this literal application of the maxim was appropriate was considered in Re
Steel
o In that case, legacies of different amounts were left in a will, which also
contained a clause stating that: Any residue remaining to be divided between
those beneificiaries who have only received small amounts
o Megarry V-C considered whether the application of the equitable maxim
required mathematical equality and concluded that it might mean
proportionate equality that is, distribution in accordance with the existing
proportions
o He concluded that mathematical equality was appropriate on the facts of the
case, although he clearly thought that proportionate division would have been
appropriate in Re Bowers Settlement
14. Equity acts in personam
Equity operated to create personal interests and not proprietary rights: when Equity
intervened, it did not do so to deprive the legal owner of property, but ensured only that
legal property rights were exercised conscionably
Eg. whereas the Common Law would ensure that a claimant physically received property
to which he or she were entitled, Equity would not order transfer of property, but would

impose a personal order against the defendant, breach of which would involve
contempt of court, which was punishable by imprisonment
This is no longer true: Equity clearly operates to create property rights
Beneficiaries have a proprietary interest recognized in Equity in the trust assets and is
not confined to a personal remedy against the trustee for breach of trust
Meagher, Gummow, Lehane have recognized that equitable rights are, for most
purposes, rights in rem in the sense that they are usually proprietary rather than
contractual, assignable rather than personal, and capable of being inherited rather than
perishing with their owner
But the maxim that Equity operates in personam can be interpreted in another way, by
distinguishing between in rem rights (which are good against the world) and in
personam rights (which are good against a particular person)
Equitable rights are not in rem in this sense, but are always in personam
This is because all equitable property rights are defeated if the property is obtained by a
bona fide purchaser for value, and so cannot be good against everybody in the world