Mr. Sajid Rahman B.Com, LL.M.

(Corporate & Commercial Law)

UNIT-1
Concept and Definition of Equity:
Origin and Development
LESSON OUTLINE
*** The notes are a brief overview. Add more case
studies, examples, etc. subject to availability.

SELF NOTES

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

1. Definition of equity
1. Discuss the evolution of equity
Mainland: ‘‘Equity now is that
in light of the Indian legal
body of rules administered by English
system. (12 marks)
Courts of Justice which were if not for the
Introduction operation of the judicature Acts, would be
administered only by those courts which
Equity itself is derived from a Latin
would be known as Courts of Equity.”
word which means Justice and
egalitarianism. The law relating to equity Henry Levery Ulman: “Equity is a
is largely based on precedent. In body of rules, the primary source of which
common law jurisdictions, the word was neither custom nor written law but
"equity" "is not a synonym for ‘general the imperative details of conscience and
fairness’ or ‘natural justice’", but refers to which had been set forth and developed
"a particular body of rules that originated in the Court of Chancery.”
in a special system of courts. When
Origin and Development of Equity
employed in the language of English law,
a precise, definition and limited 1. Equity in Roman Law
signification, and is used to denote the
Equity, as a concept of fairness
system of justice that was administered
and justice, has roots in Roman law. The
in a particular court – the nature and
ancient Roman law, “jus civile” was a
extent of which system cannot be defined
mixture of custom and law. In ancient
in a single sentence but can be
Rome, there was a distinction between
understood and explained only by
ius civile (civil law) and ius honorarium
studying the history of that court, and the
(honorary law). Civil law was based on
principles upon which it acts. In order to
the strict application of rules and
begin to understand what equity is, it is
precedents, while honorary law was
necessary to understand what the
more flexible and allowed judges to
English high court of chancery was, and
consider fairness and equity in their
how it came to exercise what is known as
decisions. Before the introduction of
its extraordinary jurisdiction.
Equity in Roman Law, all the power was

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

confined in the hands of Monarchs. They consider the specific circumstances of

were the absolute judges of right and each case and apply principles of
wrong. In the earliest period of Roman fairness and justice.
Law, there were only five actions for the
The legacy of Roman equity
enforcement of civil rights. The jus civile
continued to influence later legal
were strictly followed and there was no
systems, including medieval canon law
remedy for the wrongs if they did not
and the development of equity in English
come under any of the recognized five
common law. The principles of fairness
actions. Thus, the law is rigid, formal, and
and equity that originated in Roman law
arbitrary.
remain fundamental aspects of modern
The development of equity in legal systems around the world.
Roman law can be traced back to the
2. Equity under English Law
Praetor, a magistrate responsible for
administering justice to non-Roman Equity in English law has its
citizens. The Praetor had the authority to origins in the medieval period, where the
issue edicts (an official order) that strict and often harsh rules of common
supplemented the rigid rules of civil law law sometimes led to unjust outcomes.
with principles of fairness and justice. As a response to this, a separate system
These edicts became an important of law known as equity developed to
source of legal principles that provide relief when the common law was
emphasized equity and good faith. inadequate.

Over time, the influence of the (a) Common Law Courts

praetor expanded to include all citizens, The common law courts that
not just non-Romans. This led to the developed in English jurisprudence by
development of the concept of Aequitas, the end of the thirteenth century were (i)
which referred to the equitable principles The King’s Bench, (ii) the Court of
applied by the praetor in his decisions. Common Pleas, and (iii) The Exchequer.
Aequitas became an important aspect of Although each of these courts had
Roman legal practice, allowing judges to jurisdiction over different subject matters,

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

they were all regarded as "common law" (mortgages) or the rights of third
courts, i.e., courts governed by strict parties in general.
rules of law, a formalized procedure, and
(b) The Rise of the Court of
bound by judicial precedent. At that point Chancery
in time, the common law courts had no
Beginning in the fourteenth
equity jurisprudence, and the Court of
century, the Chancellor, who was the
Chancery did not yet exist.
King’s Secretary, was responsible for
Evils of the Common Law issuing legal writs to complainants who
wished to bring legal action in one of the
The inflexibility of the writ system, and the
common law courts. Gradually, the
consequent expense led it to the rise of
Chancellor began to take it upon himself
Equity. The following were the defects of
to resolve disputes for which no legal writ
the common law system:
in a common law court was available.
▪ Many cases were lost on The Chancellor was often a bishop who
technicalities. made decisions based on the concepts of
▪ Common law did not allow oral justice, equity, and good conscience. The
evidence. Chancellor gave reliefs like injunction,
▪ There was no power of specific performance, set off,
enforcement. counterclaim, etc. Its procedures were
▪ If a person had a debt by way of a simple, no specific relief was even
bond and if pay the debt, but required to be sought. The Chancellor
neglected to have the bond could mold the reliefs.
cancelled, the common law courts
Why was equity important in the
would force them to pay it again.
development of English law?
▪ It was easy to avoid the
consequences of one’s actions. Equity was important in the
▪ The law system was unfair. development of English law because it
▪ There was no recognition of trust. resolved some of the defects of the
▪ The common law did not common law, which might otherwise
recognize security for loans have led to a loss of public confidence in

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

the legal system - since the hallmark of a which common law courts alone could
civilized society is a proper legal system. have granted and vice versa.
As these Chancellors had no formal legal
“A dual system of rights and
training and were not guided by
interests, namely – legal and equitable,
precedent, their decisions were often
came to the fore due to the double
widely diverse. However, in 1529 a
system of the administration of justice in
lawyer, Sir Thomas More, was appointed
England before the Judicature Act.
as Chancellor, marking the beginning of
a new era. After this time, all future The Judicature Acts of 1873 and
Chancellors were lawyers, and from 1875 brought an end to the dual system.
around 1557 onwards, records of Thereafter, there remained only one
proceedings in the Courts of Chancery stream of administration of justice which
were kept, leading to the development of could grant all remedies, common law,
several equitable doctrines. equitable, and declaratory.

(c) Growth of Equity The Earl of Oxford’s Case 1615

As a result of the inadequacies of decided that if equity and the common
the common law courts, people law conflicted, equity would prevail
petitioned the King through his (codified in the Judicature Act 1873 and
Chancellor. This developed into a full currently contained in the Supreme Court
legal system, and the Chancellor, as Act 1981).
petitions increased, set up the Court of
One famous example of an equity
Chancery (1474), the rules of which
case in English law is the case of
became equity.
Rochefoucauld v. Boustead (1897). In
As a result of their efforts, the this case, the court applied the equitable
Common Law Procedure Act of 1854 and doctrine of unconscionability to prevent
the Chancery Amendment Act of 1958 the defendant from taking advantage of a
were enacted and as a result thereof, the mistake made by the plaintiff in a
court of equity could grant the remedies business transaction. The court held that
it would be unconscionable for the

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

defendant to retain the benefits of the defined the old law and set out the new
mistaken transaction and ordered him to rules for a better edible solution in case
return the money he had received. of any conflict arising between rules of
different laws. Hindu law has never been
Another well-known equity case is
absolute and has accordingly introduced
Central London Property Trust Ltd v.
equitable principles to meet the
High Trees House Ltd. (1947). In this
requirements of the time. The smritis was
case, the court applied the equitable
the oldest attempt for the compilation of
doctrine of promissory estoppel to
law. In which Smriti Karas (the author of
prevent the landlord from demanding full
Smriti) has accepted the principle of
rent payment after agreeing to accept
equity. The Mohammedan law also partly
reduced rent during a period of economic
lays down its origin from the principle of
hardship. The court held that the landlord
equity. It was stated that decisions
was estopped from going back on their
should not be exclusively based on
promise and ordered them to accept the
scriptures, there should be principles
reduced rent.
based on reasons. These reasons-based
principles are qualified with the term
These cases illustrate how equity
equity.
operates in English law by providing
remedies and principles that aim to Equity under the Indian Legal System.
prevent injustice and ensure fairness in
Most of the equitable principles
legal proceedings. Equity allows courts to
and rules have, in India, been embodied
consider the unique circumstances of
in the statute law and have been made
each case and grant relief where strict
applicable to the extent of the provisions
application of common law rules may
made therein. The provisions of equity in
lead to unjust outcomes.
Indian statute books might have their
Origin of Equity in India source in common law or equity or in an
adjustment between the two.
In India, Equity has its origin in the
relevant ancient Hindu period, when Statutory recognitions of the
some of the well-known legal experts principles of equity are found in:

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

▪ The Indian Contract Act, 1872; Many doctrines of equity are

▪ The Specific Relief Act, 1877; contained in the Transfer of Property Act.
▪ The Indian Trust Act, 1882; The English doctrine of part performance
▪ The Transfer of Property Act, has been drawn in section 53A of the Act.
1882; and Section 48 and Section 51 are also
▪ The Indian Succession Act, 1925. based on the equity principles.

The equitable doctrines featured Section 180-190 of the Indian

in the Indian Contract Act are mainly, the Succession Act deals with the doctrine of
doctrine of penalties and forfeiture, election in cases of will and section 35 of
stipulations as to time in a contract, the Transfer of Property gives effect to
equitable relief on the ground of this doctrine in general.
misrepresentation, fraud, and undue
In India, the common law doctrine
influence.
of equity had traditionally been followed
The Supreme Court in Official even after it became independent in
Trustee, W.B. v. Sachindra, that “in fact, 1947. However, it was in 1963 that the
in this country, we have codified the very “Specific Relief Act” was passed by the
principle that was exercised by the Parliament of India following the
Chancery Courts in England under their recommendation of the Law Commission
equitable jurisdiction”. of India and repealing the earlier
“Specific Relief Act” of 1877. Under the
The Indian Trusts Act was passed
1963 Act, most equitable concepts were
in 1882 to define law relating to private
codified and made statutory rights,
trusts and trustees. A trust is not a ‘legal
thereby ending the discretionary role of
person’. Property of trust is held in the
the courts to grant equitable reliefs. The
name of the trustee for the benefit of a
rights codified under the 1963 Act are as
beneficiary. The rules administered by
follows: -
the English Courts of equity under the
head of justice, equity, and good
1. Injunctions: It is a type of remedy
conscience are contained in the Indian in which the court provides a
Trust Act. certain law and order that the

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

parties are pressured to do or Some Important cases under the

abstain from doing a certain Principle of Equity

specific task. Case Law- Mohd. ▪ Namdeo Lokman Lodhi v.

Afzal Shah v. Ghulam Ahmad Narmadabai and Ors. 1953 AIR
Shah and Ors. 228
2. Specific performance: In this ▪ M. Nagarajan v. V.M. Nagammal
type of remedy, the court passes ▪ Rattan Lal v. Vardesh Chander
a statement to the parties to fulfill and Ors. 1965 AIR 588
certain tasks that are interlinked or ▪ Ganeshi Lal v. Jyoti Pershad
already a part of a contract. Case 1953, AIR
Law- Executive Committee of
Conclusion
Vaish v. Lakshmi Narain and
Ors. Equity plays a crucial role in the
3. Recession: This remedy justice delivery system. The importance
alternatively takes back the of equity was of greater emphasis than
parties to their normal position as the common law system. During the
they were before entering the centuries it gained importance and
contract. Case Law- Bedi and became an integral part of the Indian
Bedi Ltd. Bangalore v. The legal system too. In India, it developed
Commissioner of Central. through various statues which have
4. Rectification: In this type of gained momentum with the various acts
remedy, the court orders to rectify which have been passed throughout. The
or make certain changes in the legality of equity has gained its
written document to reflect what is significance in recent years. There are
said on the first page. Case Law- certain acts that work through the
M/s Harinagar Sugar Mills Ltd. principle of equity nowadays in India.
V. Shyam Sunder
Jhunjhunwala.

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

2. Discuss the nature and scope Definition of equity

of equity. (12 marks)
Mainland: ‘‘Equity now is that
Introduction body of rules administered by English
Courts of Justice which were if not for the
Equity itself is derived from a Latin
operation of the judicature Acts, would be
word that means justice and
administered only by those courts which
egalitarianism. The law relating to equity
would be known as Courts of Equity.”
is largely based on precedent. In
common law jurisdictions, the word Henry Levery Ulman: “Equity is a
"equity" "is not a synonym for ‘general body of rules, the primary source of which
fairness’ or “natural justice” but refers to was neither custom nor written law but
"a particular body of rules that originated the imperative details of conscience and
in a special system of courts. When which had been set forth and developed
employed in the language of English law, in the Court of Chancery.”
a precise, definition and limited
Nature and Scope
signification, and is used to denote a
system of justice that was administered The nature and scope of equity
in a particular court – the nature and says that equity must preliminary mean
extent of which system cannot be defined right doing, or justice in the purely ethical
in a single sentence but can be meaning of that word. In England, equity
understood and explained only by has acquired an entirely specialized
studying the history of that court, and the meaning. Technically, it includes only
principles upon which it acts. To begin to certain rules which were developed in the
understand what equity is, it is necessary court of chancery. The basis for its
to understand what the English high court creation may have been the desire to do
of chancery was, and how it came to the right thing between men according to
exercise what is known as its the moral law of the time, but it was
extraordinary jurisdiction. always limited and has now become a
fixed body of principles of the common
law.

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

It is no longer possible to claim of conflict between equity and law,

redressal simply on moral grounds; it is the law prevails.
necessary to show some principles • An equitable right arises when a
recognized by the system of Equity right vested in one person by the
before a remedy can be granted. law should, in the view of equity,
be a matter of conscience, vested
Firstly, equity has enforced rights,
in another.
that the common law Courts failed to
enforce; Secondly, equity has developed General Principles of Equity
additional remedies to the common law
The body of the Law of Equity is
for the enforcement of common law
preserved in the following twelve
rights. Lastly, the procedure in the
maxims. These maxims are general
Common law Courts was defective,
principles adopted to administer justice
especially in not compelling or even
and fairness. They govern the Law of
allowing a defendant to give evidence
Equity and are discretionary.
and in limiting the inquiry to the action.
1. Aequitaes est corectio legis
So, we can say that- generalities latae, qua parte
• The general rule is that equity deficit: i.e., Equity is a
follows the law and equitable correction of the general law
interests have in general the same in the part where it is
incidents and attributes as defective.
corresponding legal interests. For a long time, the English Courts
They devolve and can be settled,
were guided by the doctrine ubi
mortgaged, and disposed of remedium ibi jus (where there is a
precisely in the same way as legal
remedy there is a right) but with the
interests. development of the Court of Chancery in
• Equity follows the law and as such
England, this doctrine gave way to a
a legal estate or interest takes more pragmatic and just doctrine called
procedure over the equitable
‘ubi jus ibi remedium’ (where there is a
estate or interests. That is, in case
right there is a remedy). The subject

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

matter of equity can be grouped around Chancellor and, subsequently, the Court
some legal maxims that embody the of Chancery acknowledged the valid
principles. existence of the legal title to property in
the hands of the trustee. The acquisition
2. He who seeks equity must
of this title by the trustee was dependent
do equity.
on compliance with the appropriate legal
This maxim puts a mandate on the requirements for the transfer of the
seeker of equity. A litigant, claiming property.
something by way of equity, must himself
be ready and willing to grant to his 4. Equity will not suffer a wrong

opponent, that which the opponent is to be without a remedy

entitled.
This maxim illustrates the
In the case of Chappell v. Times intervention of the Court of Chancery to
Newspapers Ltd, where workers wanted provide a remedy if none was obtainable
an injunction against their dismissal for at common law.
going on strike, refused to agree not to
5. He who comes to equity must
strike if the injunction were to be granted,
come with clean hands
and thus the injunction was not granted.
A party claiming equitable relief is
The assumption here is that the party
required to act fairly towards its
claiming equitable relief must
opponent. For example, a tracing order
demonstrate that he has not acted with
would not be obtained in equity if the
impropriety in respect of the claim.
effect would be to promote injustice.
6. Equality is equity.
3. Aequitas sequitur legem i.e.
Equity follows the law. Where two or more parties have

Equity only intervened when some an interest in the same property, but their

important factor became ignored by the respective interests have not been

law. Thus, in the early stages of the quantified, equity as a last resort may

development of the law of trusts, the Lord divide the interest equally. The same

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

remedy must be available to the other the rule is that the first in time has priority
parties if the position is reversed. at law and in equity: qui prior est tempore
potior est jure. – In the absence of a legal
In the case of Flight v. Bolland, it
estate in the matter and the contest is
was held that minors cannot be granted
among the equitable estate only, the rule
specific performance against adults,
is that the person whose equity is
since minors’ contracts are in themselves
attached to the property first will be
unenforceable.
entitled to priority over other or others.

7. Where there is equal equity,

9. Vigilantibus, non
the law prevails.
dormientibus jura subvenient, Delay
defeats equity (equity aids the vigilant
Equity did not intervene when,
and not the indolent).
according to equitable principles, no
injustice resulted in adopting the solution
Where a party has slept on his
imposed by law. Thus, the bona fide
rights and has given the defendant the
purchaser of the legal estate for value
impression that he has waived his rights,
without notice can acquire an equitable
the court of equity may refuse its
interest both in law and in equity. Equity
assistance to the claimant. This is known
is not a punishment.
as the doctrine of laches.

In the case of Wroth v. Tyler,

10. Equity looks at the intent
specific performance was refused since it
rather than the form.
would have forced Tyler to sue his wife.
Equitable damages were awarded The court looks at the substance
instead, instead of specific performance. of an arrangement rather than its
appearance to ascertain the intention of
8. Where the equities are equal,
the parties. For example, a deed is not
the first in time prevails.
treated in equity as a substitute for
consideration.
Where two persons have
conflicting interests in the same property,

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

11. Equity imputes an intention Indian legal system too. In India, it

to fulfill an obligation. developed through various statutes and
today several acts have passed and are
The principle here is based on the
working by equities principles. The
premise that if a party is under an
legality of equity has radically gained
obligation to perform an act and he
significance in recent years as well as in
performs an alternative but similar act,
the past. The importance of equity is
equity assumes that the second act was
greatly emphasized in India too. In India,
done to fulfil the obligation.
various acts work with its principles.

12. Equity regards as done that

3. Write the relation of equity with
which ought to be done.
common law. (12 marks)

If a person is under an obligation Introduction

to perform a specifically enforceable act,
Equity in common law refers to the
the parties acquire the same rights and
body of principles and rules that
liabilities in equity as though the act had
developed alongside the common law
been performed.
system to provide fairness and justice

Conclusion when the strict application of the law

would lead to unjust outcomes. Equity
Equity in England developed way seeks to mitigate the harshness of the
back in the sixteenth century and is law by providing remedies such as
working as a part of the legislature now. injunctions, specific performance, and
The importance of equity was greater equitable damages.
emphasized than the common law
The legal system in many
system. In England, equity started to get
common law jurisdictions operates based
less importance and it was then made a
on two distinct but interconnected
part of the legislature. Today, equity has
systems: equity and common law. While
gained importance. During the centuries
common law provides the rules and
it developed and gained importance in
guidelines for legal disputes, equity acts
England and slowly it reflected in the
as a supplement to common law by

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

providing additional remedies and justice in individual cases. Equity allows

principles to ensure justice is served. The courts to consider the unique
relationship between equity and common circumstances of each case and provide
law is essential to the functioning of the appropriate remedies to ensure justice is
legal system and plays a crucial role in served. This may include remedies such
ensuring fairness and justice for all as injunctions, specific performance, and
individuals. equitable damages, which are not
typically available under common law. By
Historical Development of Equity
allowing courts to exercise discretion and
Equity has its roots in medieval consider equitable principles, equity
England, where it emerged as a serves as a crucial tool in achieving just
response to the perceived inflexibility and outcomes in the legal system.
harshness of the common law system.
Relation of equity with common law
Common law, based on precedent and
statutory law, often did not provide The relationship between equity
adequate remedies for certain types of and common law is a fundamental aspect
legal disputes. Equity developed as a of the legal system in many common law
system of rules and principles that jurisdictions. Equity, as a body of
allowed courts to provide fair and just principles and rules, developed
outcomes in cases where the strict alongside the common law system to
application of the law would lead to provide fairness and justice when the
injustice. Over time, equity evolved to strict application of legal rules would lead
encompass a wide range of principles to unjust outcomes.
and remedies aimed at ensuring fairness
The interaction between equity
and justice in the legal system.
and common law is complex and
Role of Equity in the Legal System multifaceted, with each system
influencing and complementing the other
Equity plays a vital role in
in various ways.
balancing the strict application of legal
rules with the need for fairness and

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

1. Equitable Remedies: One of the back on their word or

key ways in which equity interacts representations, has influenced
with common law is through the the law of contract and estoppel in
provision of equitable remedies. common law jurisdictions.
While common law typically
3. Conflict and Resolution: At
provides remedies such as
times, there may be conflicts
damages, equity offers a broader
between equitable principles and
range of remedies that may not be
common law rules. In such cases,
available under common law.
courts must navigate these
These equitable remedies include
conflicts and determine how best
specific performance, injunctions,
to achieve a fair and just outcome.
rescission, and rectification,
Courts may apply a blend of
among others. Courts may apply
equitable and common law
equitable remedies in cases
principles to resolve these
where the strict application of legal
conflicts and ensure that justice is
rules would lead to unjust
served. The flexibility of equity
outcomes or where damages are
allows courts to consider the
not an adequate remedy.
unique circumstances of each
2. Equitable Principles: Equity also case and provide appropriate
plays a role in shaping legal remedies to prevent injustice.
principles and doctrines that
4. Development of the Law: The
influence the development of
interaction between equity and
common law. For example, the
common law has also led to the
principle of unjust enrichment,
development and evolution of
which is rooted in equity, has had
legal principles and doctrines.
a significant impact on the
Over time, equitable principles
development of contract and
have been incorporated into
property law. Similarly, the
common law, leading to a more
doctrine of equitable estoppel,
nuanced and flexible legal system.
which prevents a party from going

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

The relations between equity and another party regarding the ownership or
common law have contributed to use of the property. The other party relies
the growth and adaptation of the on this promise to their detriment, such
legal system to meet the changing as investing money in the property or
needs of society. making improvements based on the
promise. However, the property owner
5. Judicial Discretion: Equity
later reneges on the promise, leading to
allows courts to exercise
a dispute over property rights.
discretion and consider the
equities of each case when Under common law principles,
determining the appropriate property rights are typically determined
remedy. This discretion enables by legal ownership and formalities such
courts to tailor their decisions to as deeds and contracts. However, in
the specific circumstances of the cases involving proprietary estoppel,
case and provide justice in equity intervenes to ensure a fair and just
individual cases. Judicial outcome. The doctrine of proprietary
discretion is a key aspect of equity estoppel allows courts to enforce
that allows courts to achieve fair promises or representations made by
and just outcomes in situations property owners, even if they are not
where the strict application of legal supported by formal legal documents.
rules may lead to injustice.
In such cases, courts may apply
For example, Proprietary equitable principles to prevent the
estoppel is a legal doctrine that property owner from going back on their
originated in equity but has had a promise and to protect the interests of the
significant impact on the development of party who relied on the promise to their
common law principles related to detriment. This may involve granting an
property rights. equitable remedy such as an order for
specific performance or allowing the
In a typical scenario involving
party who relied on the promise to
proprietary estoppel, a property owner
makes a promise or representation to

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

continue using the property in a certain common law jurisdictions. Equity

way. provides a means of ensuring fairness
and justice in cases where the strict
The doctrine of proprietary
application of legal rules would lead to
estoppel illustrates how equity interacts
unjust outcomes. By allowing courts to
with common law to provide remedies
consider the unique circumstances of
and principles that ensure fairness and
each case and provide appropriate
justice in legal disputes. By allowing
remedies, equity serves as a vital
courts to consider the equities of each
supplement to common law and helps to
case and provide appropriate remedies,
ensure that the legal system remains fair
equity supplements common law and
and just for all individuals.
helps to achieve just outcomes in
situations where the strict application of 4. Emergence of the law of trust
legal rules may lead to injustice. from equity (12 marks)
For example, in contract law,
Introduction
common law principles govern the
formation and interpretation of contracts, The emergence of the law of trust
while equitable principles may be used to from equity represents a significant
provide remedies such as specific development in legal history, reflecting
performance or rescission in cases the need to address complex property
where damages are not an adequate arrangements and ensure fairness and
remedy. Similarly, in property law, justice in property ownership and
common law rules may determine legal management.
title to property, while equitable principles
The law of trust, a fundamental
may be used to enforce trusts or prevent
aspect of modern legal systems, has its
unjust enrichment.
roots in the equitable principles
Conclusion developed by the courts of equity in
England. Emerging from the need to
The relationship between equity
address situations where legal ownership
and common law is essential to the
and equitable interests conflicted, the law
functioning of the legal system in many

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of trust has evolved into a distinct area of feoffee would hold the land for the benefit
law governing the relationship between of the true owner. This arrangement
trustees, beneficiaries, and trust allowed landowners to avoid feudal
property. This evolution reflects the obligations and ensure that their land
dynamic interaction between equity and passed to their intended beneficiaries.
common law, shaping the legal The courts of equity recognized and
landscape to ensure fairness and justice enforced these uses, establishing the
in property ownership and management. basis for the modern trust.

Historical Development of Trust Law The seminal case of Knight v.

Knight in 1840 marked a significant
The historical development of trust milestone in the development of trust law.
law can be traced back to the evolution of In this case, the court recognized the
equity in English law. Equity emerged as validity of a trust created by a settlor for
a parallel system of justice to the the benefit of his daughter, even though
common law courts, with its own set of legal title was held by the trustee. The
principles and remedies designed to court held that the trustee had a fiduciary
address situations where the strict duty to manage the trust property for the
application of common law rules would benefit of the beneficiary, establishing
lead to injustice. The courts of equity, led the core principle of trust law that trustees
by the Lord Chancellor, developed must act in the best interests of
equitable doctrines and principles that beneficiaries.
laid the foundation for the law of trust as
we know it today. Subsequent legal developments,
such as the enactment of the Statute of
One of the key historical Uses in 1536 and the Statute of Frauds
developments that paved the way for the in 1677, further shaped the law of trust by
recognition of trusts was the concept of regulating the creation and enforcement
the use. In medieval England, of trusts. The Statute of Uses sought to
landowners would convey their land to a restrict the use of trusts to avoid feudal
trusted individual, known as the feoffee to obligations, while the Statute of Frauds
use, with the understanding that the

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required certain trusts to be evidenced in Key Principles and Doctrines of Trust

writing to prevent fraud and ensure clarity Law
in trust arrangements.
In the context of equity, the key
The principles of equity, including principles and doctrines of trust law are
the maxim that equity will not suffer a grounded in the principles of fairness,
wrong to be without a remedy, justice, and good conscience. Equity, as
underpinned the development of trust law a system of law that developed alongside
by emphasizing fairness, good faith, and the common law to provide remedies
the protection of equitable interests. The where legal rules were inadequate or
courts of equity developed a body of case unjust, plays a central role in shaping
law and principles that governed the trust law and governing the relationship
creation, administration, and between trustees and beneficiaries.
enforcement of trusts, ensuring that Some of the key principles and doctrines
trustees acted as fiduciaries and upheld of trust law in the context of equity
their duties to beneficiaries. include:

The historical development of trust 1. Fiduciary Duty: The fiduciary

law reflects the evolution of equity as a duty that trustees owe to
system of justice that complements and beneficiaries is a fundamental
supplements the common law. The principle of trust law rooted in
recognition of trusts as equitable equity. Trustees are considered
arrangements to hold and manage fiduciaries who hold a position of
property for the benefit of beneficiaries trust and confidence and must act
marked a significant shift in legal thinking in the best interests of the
and practice. The principles and beneficiaries with honesty, loyalty,
doctrines developed by the courts of and integrity. The fiduciary duty is
equity laid the foundation for the law of a cornerstone of equity that
trust, establishing a framework that ensures trustees fulfill their
continues to govern the relationship obligations with diligence and
between trustees and beneficiaries. care.

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

2. Equitable Remedies: Equity 4. Duty of Impartiality: Trustees

provides a range of remedies to must act impartially and without
address breaches of trust or bias in managing the trust
violations of the fiduciary duty by property for the benefit of all
trustees. Equitable remedies such beneficiaries. Equity requires
as injunctions, specific trustees to treat all beneficiaries
performance, and accounting are fairly and equally, regardless of
available to beneficiaries to their interests or relationships.
enforce their rights and hold The duty of impartiality ensures
trustees accountable for their that trustees act in a manner that
actions. Equity seeks to provide upholds the principles of fairness
effective and equitable remedies and justice in trust administration.
to protect the interests of
5. Trustee’s Discretion: Trustees
beneficiaries and ensure trust
are often granted discretionary
property is managed
powers in managing the trust
appropriately.
property, such as investment
3. No Self-Dealing: Trustees are decisions, distributions to
prohibited from engaging in self- beneficiaries, and administrative
dealing or conflicts of interest that matters. Equity recognizes the
could compromise their importance of trustee discretion
impartiality or loyalty to the but requires trustees to exercise
beneficiaries. Equity requires their powers in good faith,
trustees to act solely in the prudently, and in accordance with
interests of the beneficiaries and the terms of the trust. The
avoid any actions that could exercise of discretion by trustees
benefit themselves at the expense is subject to review by the courts
of the trust. Self-dealing is to ensure it is consistent with the
considered a breach of the best interests of the beneficiaries.
fiduciary duty and is not tolerated
in equity.

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 Mr. Sajid Rahman B.Com, LL.M. (Corporate & Commercial Law)

6. No Unjust Enrichment: Equity dynamic interaction between equity

prohibits trustees from unjustly and common law, ensuring that
enriching themselves at the property is managed and
expense of the beneficiaries or the administered in a fair and just
trust estate. Trustees must act manner.
with integrity and honesty in
Conclusion
managing the trust property and
avoid any actions that could result The emergence of the law of trust
in personal gain or advantage. from equity represents a significant legal
Equity seeks to prevent unjust evolution that has shaped the modern
enrichment and ensure that legal landscape. By providing a
trustees fulfill their duties with framework for the management of
integrity and accountability. property interests, trust law ensures that
trustees act in the best interests of
Evolution of Trust Law
beneficiaries and that equitable
Over time, trust law has evolved to principles are upheld. The historical and
encompass various types of trusts, legal analysis presented in this research
each with its own set of rules and article highlights the dynamic interaction
requirements. Express trusts, between equity and common law in
resulting trusts, constructive trusts, shaping the law of trust and underscores
and charitable trusts are among the the importance of trust law in ensuring
different trust structures that have fairness and justice in property-related
emerged to meet the diverse needs of disputes.
settlers and beneficiaries. Judicial
decisions and legislative reforms
have shaped the development of trust
law, providing clarity and guidance on
the creation, administration, and
enforcement of trusts. The ongoing
evolution of trust law reflects the

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