Equity and Trusts

• Author: Robert Chambers
• Pages: 66-81

66

CHAPTER 4

EQUITY AND TRUSTS

A. EQUITY

Rights may be legal or equitable. This distinction is the product of the

court system that existed in England before 1875. The common law

was administered by the courts of Common Pleas, King’s Bench, and

Exchequer, whereas equity was admini stered by the Court of Chancery.1

Those courts were merged into a single High Court of Justice in the

1870s, but common law and equity continue to exist as separate bodies

of law administered by the unif‌ied court.

In most common law jurisdictions around the world, equity is no

longer administered by a separate court of chancery but by a superior

court that applies both common law and equ ity. For example, in Ontario,

“[t]he Superior Court of Justice has all the jurisdiction, power and

authority historical ly exercised by courts of common law and e quity in

England and Ontario.”2 Although it administers both common law and

equity, they continue to exist as two separate bodies of law:

1 See John Baker, An Introduct ion to English Legal History, 5th ed (Oxford: Oxford

University Pre ss, 2019) chs 3 and 6.

2 Courts of Justice Act, R SO 1990, c C.43, s 11(2). See also Law and Equity Act,

RSBC 1996, c 253, s 1; Judicature Act, RSA 2000, c J-2, s 5; Queen’s Bench Act,

1998, SS c Q -1.01, s 51.1; Court of Queen’s Bench Act, CCSM, c C280, s 32; Judica-

ture Act , RSNB 1973, c J-2, s 9; Judicature Act, RSNS 1989, c 240, s 3; Judicatu re

Act, RSPEI 1988, c J-2.1, s 2; Judicature Act, RSNL 1990, c J-4, s 3; Judicature Act,

RSNWT 1988, c J-1, s 9; Judicature Act, SNWT (Nu) 1998, c 34, s 2.

Equity and Trust s67

Rules of law and equity

(1) Courts shall administer concurrently all rules of equity and

the common law.

Rules of equity to prevail

(2) Where a rule of equity conf‌licts with a rule of the common

law, the rule of equity prevails.3

It is not always easy to tell whether a r ight is legal or equitable. That

depends on which court would have had jurisd iction if the proceedings

took place in England prior to 1875. The right is legal if it would have

been enforced in a court of common law and equitable if it could only

be enforced in the Court of Chancery. This may seem like an odd way

to tell them apart, but there is probably no better method. As Professor

Maitland said,

For suppose that we ask the que stion — What is Equity? We can only

answer it by giving some short account of certain courts of justice

which were abolished. . . . [W]e might have said “Equity is that body

of rules which is ad ministered only by those C ourts which are known

as Courts of Equity.” The def‌inition would not have been very satis-

factory, but now-a-days we are cut o even from this unsatisfactory

def‌inition. We have no longer any courts which are merely courts

of equity. Thus we are driven to say that Equity now is that body of

rules administered by our . . . courts of justice which, were it not for

the operation of the Judicature Acts, would be administered only by

those courts which would be known as Courts of Equity. This, you

may well say, is but a poor thing to c all a def‌inition. Equity is a cer tain

portion of our exist ing substantive law, and yet in order that we may

describe this portion and mark it o from other portions we have to

make reference to courts that are no longer in existence. Still I fear

that nothing better is possible.4

You may wonder why it matters whether a right is legal or equitable

if both rights are enforced in the same court. The distinction is import-

ant in property law for two main reasons. First, the manner in which

3 Courts of Justice Act, R SO 1990, c C.43, s 96. See also Law an d Equity Act, RSBC

1996, c 253, ss 4, 5, 7, 44; Judicature Act, RSA 2000, c J-2, ss 15, 16; Queen’s Bench

Act, 1998, SS c Q-1.01, s 52; Court of Queen’s Bench Act, CCSM, c C2 80, s33;

Judicature Act, RSNB 1973, c J-2, s 26; Judicature Act, RSNS 1989, c 240, s41;

Judicature Act, RSPEI 1988, c J-2.1, s 39; Judicature Act, RSNL 1990, c J-4, ss90,

107; Judicat ure Act, RSY 2002, c 128, ss 7, 29; Judicature Act, RSNWT 1988, cJ-1,

ss 22, 45; Judicature Act, SNWT (Nu) 1998, c 34, ss 21, 42.

4 FW Maitla nd, Equity, Also the Forms of Action at Common Law: Two Courses of

Lectures (Cambridge: Cambrid ge University Press, 1929) at 1.