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, s33;
Judicature Act, RSNB 1973, c J-2, s 26; Judicature Act, RSNS 1989, c 240, s41;
Judicature Act, RSPEI 1988, c J-2.1, s 39; Judicature Act, RSNL 1990, c J-4, ss90,
107; Judicat ure Act, RSY 2002, c 128, ss 7, 29; Judicature Act, RSNWT 1988, cJ-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.
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