AN INTRODUCTION TO EQUITY TODAY - A CASE STUDY

070 Suriva Ali and Nazir Ahmed, who were joint owners of a
house, co -
d to sell it to Mr and Mrs Patel. In May 1979 Mr Ali, Suriya Ali's
husband
w.as adjuudged bankrut and within a week his trustee in bankruptcy had
abtained an injunction preventing a sale. Ihe reason was to preserve the house
e,
as claimed asset of Mr Ali, for his creditors.
lu January 1980 the court allowed the sale of the house to proceed on the basis
that the trustee's claim would be met out of the proceeds of sale. In August 1980
the Patels brought a claim for specific performance of the contract of 1979 but
had difficulty in serving the claim on Mr Ahmed as he had left the country and,
indeed, playsno further in the story. At about that time Mrs Ali became
part
seriously ill with bone cancer. In July 1980 she became pregnant and then had a

leg amputated, As result she needed help with household duties and shopping.
a
In 1981-82 Mr Ali was in
A month later she give birth to their second child.
their third child, By this time she
prison and in August 1983 Mrs Ali gave birth to
was very much dependent on her family
and close friernds nearby for help. An
additional factor was that she spoke virtually no English.

3
 The facts above those of Patel v. Ali
are
of
(1984). Did thea
specific performance which was sought? The t
tion of some fundamental principles of
equity.
answer
depen dsgrant the rej
on an Temedy
There was
Mr Ahmed had not given
undoubtedly breach of the
a
the Patels
contract made in
1970
examina
possession of the house as Mrs Ali and
at common law the Patels had a right to
damages for breach of co agreed. T Ali and
damages were not the appropriate remedy. The Patels, Thetefore
hetef
Durchaseof a
particular
house, wanted havingthat house contracte forNever,the
is where reach equity, and not
we
remedy as the
sought, money instead.
able one that compels a specific performance.
party to perform their contractual nce, icis a15 This
an
case, that meant giving up
possession of their house. obligations inequithis
However, as we shail see in more detail
to grant its later, equity has a
remedies. Indeed the very word discretion wheth.
just. n this case the court had to 'equity' implies a desire to be fairether
balance the
position of Mrs Ali, who needed and
remain where she was,
what they had contracted
against that of the Patels, who not to
for, the house. unreasonably wanted
The court held
that, if the defendants were forced
Mrs Ali had to move to
out, there would be complete the sale and
the words of 'hardship
Goulding J. The fact that a person wouldamounting to
injustice', in
to
complete a sale was not in
suffer hardship in having
itself enough to
arderfor specific performance. Hardship would, justify
the
said the
court in
refusing an
efusal of an order in an court, only justify the
That was not the end of exceptional case. This was one.
the matter, though. The court also had
that' the to be satisfied
remedy
at common law, in this case, damages,
Otherwise the Patels would have would be effective.
be and there was
no
remedy at all. Here it felt that it would
was
evidence that the Muslim
awarded against Mrs Ali and Mr Ah1med. community would pay the damages
The following points emerge froin this case:
(a) The discretion of the court is
guided by
complete discretion whetherprinciples.
not have a Thus here the court
or not to grant
ance. Instead. it
considered whether hardship specific perforn
the remedy and not would be caused if it did gral
only
In addition it had to be hardship
but also 'hardship
amounting to imjustice'.
satisfied that the common law be
effective. The extent to remedy wo
wliich ered
equity exercises discretion is
below. co
(b) Common laW remedlies
(damages here) are considered first. Only 1t t he are
not adequate will
equitable remedies be considered.
(c) The cquitable remedly of
specific performance is directed agail articu

lar perSons Tatijer than their

money, like the
O
law common rene
damages.
( In Some cascs equty iio Iscretionary at all and the common lav t
Cxercises what a l m o u r t a QsCretiou, r e t u n

a point to wlhich we shall iee

the end of this chapter.
Note al,o that this case ilustuaty 0 other areas o f equity, whicl have
been

highlighted above
 Chapter 1 Nature of equity
(a) The equitable remedy of
of
injunction, which in this case forbade the doing
an
an act, here the sale of the house.
Injunctions normally are negative
although they can be
positive.
(b) The idea of a trust. The property of Mr Ali, when he was made
then held by his trustee in
bankrupt, was
bankruptcy for the benefit of his creditors. The
trustee in bankruptcy the legal owner of the property
was
although he did
not hold it for his own benefit but for the benefit of the creditors.

Injunctions and specific performance will be dealt with in Chapter 2 and trusts
in Chapter 4.

EQUITY AND DISCRETION

it is
Although a court, when awarding equitable remedies has some discretion,
does not start with
not a complete discretion. The court, when applying equity,
a blank sheet of a paper. It cannot simply do what it feels
to be just in the circum-

stances and it must be emphasised that the fact that equity is a discretionary
is all aboat vagueness. It has been
system should not lead to the idea the equity
that equity stands for tlexib
$aid that 'there is a real danger in simply assuming
clear
be principled and equity needs to be
Jlity and vagueness. Equity needs to discretion
Indeed in areas, as we shall see, there is no more
(Virgo 2003). many
rules on
law. A good example is the
In equity then there is in the c o m m o n
there are areas ot tlhe
many
Constitution of a trust in Chapter 7. Furthermore, and
exercise discretion, such as judicial revieW
COmmon law where the courts
the iinposition of a duty of care in negligence, to the
of equity we can now turn
laving at a modern application
looked
and what equity means.
questiorns of how cquity developed