Maxims of equity (Topic 3)

Dr.Bashiran/Dr.S. Zubaidah/Dr. Nor
Asiah/Dr. Zuraidah
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MAXIMS OF EQUITY
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• What are Maxims
• Types of Maxims
• Functions of maxims
What we will learn
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Maxims – general guidance
• a collection of legal truisms which are
used as "rules of thumb"
• it is an established principle or
proposition.
• Framework of reference within which
the broader conception of conscience
and fairness can be considered.
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Equitable maxims
• One of discretion and moral judgment
• They are not binding but only provides
guidelines for every situation in which
equity developed.
• Maxims of Equity are of useful guide.
• Maxims are the principles developed by
Lord Chancellors exercising on behalf of
the Crown.
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con’t
• an extra-ordinary jurisdiction to relax the
rigidity of the common law so as to recognize
and reward the merit and deserts of individual
• One of the historic criticisms of equity as it developed
was that it had no fixed rules of its own and each
Lord Chancellor gave judgement according to his
own conscience.
• John Selden.
– "Equity varies with the length of the Chancellor's foot".
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Equitable maxims
• Such maxims follow principles of universal
justice.
• Chancellors were originally the "keepers of the
King's conscience" with the authority to do
whatever "good conscience and good reason"
required in a particular case.
• Hanbury –the fruit of observation of developed
equitable doctrine
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Pearce : The Law of Trusts and
Equitable Obligations
• Maxims are an attempt to formulate in short
pithy phrases the key principles which
underlie the exercise of the equitable
jurisdiction.
• Provide useful illustrations

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maxims
• Examples of such maxims includes equity
will not suffer a wrong with a remedy",
"those who seek equity must do equity", and
"equity requires diligence, clean hands, and
good faith".
• These maxims are a form of the Biblical
phrase, "do unto others as you would have
them do unto you" and the old doctrine of
"clean hands, pure heart".

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maxims
• In Chancery Court these maxims refer to
civil matters mostly involving
businesses, family law, workers'
compensation, land, probate matters, and
more recently , discrimination cases.
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Among the traditional maxims
are:
• Equity looks regards as done which ought to
have been done.
• Equity will not suffer a wrong without a
remedy.
• Equality is equity.
• Equity regards substance rather than form
• Equity looks to the intention rather the the
form
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continue
• Where the equities are equal, the first in time will
prevail.
• Where equities are equal, the law will prevail.
• Equity follows the law.
• He who seeks equity must do equity.
• He who seeks equity must have clean hands.
• Equity aids the vigilant, not those who sleep on
their rights
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continue
• Delay defeats equity.
• Equity will not concern itself with abstract wrongs.
• Equity abhors a forfeiture.
• Equity does not require an idle gesture.
• Equity will not permit a party to profit by his own
wrong.
• Equity delights to do justice, and not by halves.
• Equity will take jurisdiction to avoid a multiplicity of
suits.
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1) Equity will not suffer a wrong
without a remedy
 Philosophical foundation of equity
 Wrongs should be redressed by the courts if it
possible
 Defects of the common law to provide relief
 Meaning- Where there is a right, there is a remedy
 In Latin – Ubi jus ibi remedium
 Sometimes the Common courts owing to some
technical defect unable to enforce a remedy, therefore
equity intervenes and provides for judicial
enforcement- injunction, recognition of trust
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 means no wrong should go unattended if it is capable
of being remedied by courts
 This is the basis on which the structure of equity
rests.-it is a duty of the Court of Chancery to prevent
a failure of justice
 Limitation -non-application if it includes moral
wrong
 - it is remedied by common law courts-
at present there is remedy in
damages
 - due to his own negligence destroy the
evidence
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Application and Recognition:- The Civil
Procedure Code and the Specific Relief Act
have incorporated this maxim. The Code
entertains all kinds of suit unless it is
prohibited and the Act provides equitable
remedies like s.p. , injunctions, rectification,
etc.
Allows the beneficiary to enforce their
obligation to use the property against the
trustee
In contract- escape from the contract if it is
led by mistake or misrepresentation
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• The maxim also applies to rights which are
suitable for judicial enforcement but were
not enforced at common-law owing to some
technical defect.
• For example, during the trial process,
common-law did not impose any duty on
the defendant to make disclosure through
discovery of documents.
• Equity then provided the remedy by
prescribing the process of discovery of
documents.
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2) EQUITY ACTS IN PERSONAM
• The courts of equity operate primarily in
personam, attacking and binding the
conscience of a person.
• It was used as a weapon to establish
jurisdiction
• Equity enforces its decisions by means of a
personal order against the defendant.
• Example: order to perform a contract,
observe a trust, refrain from building the
wall, etc.
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• If the def. refuses, he will be in contempt of
court and punishable by imprisonment
• The court may exercise jurisdiction over the
person within the power of the court, even
though the property is outside the
jurisdiction.
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Penn v. Lord Baltimore [1750] Ves. Sen. 444
• The plaintiff filed a suit in the court of Chancery
for specific performance of an agreement in
respect of property situated in North America.
The defendant challenged the jurisdiction of the
court to grant the remedy as the property was
outside England.
• “…the conscience of the party was bound by this
agreement; being within the jurisdiction of this
court, which acts ‘in personam’, the court may
properly decree it as an agreement.”
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Swiss Bank Corpn v Lloyds Bank
Ltd[1979] Ch 548
• Historically the courts of equity acted in personam.
Whether equity was supplementing the common
law by giving additional remedies or correcting the
common law by imposing a different legal result,
the courts of equity intervened by directing the
defendant personally to do, or refrain from doing,
a specific act. In deciding whether or not to
intervene, the courts of equity required first, that
the plaintiff should have some enforceable right
and, secondly, that the conscience of the
defendant was affected in some way so as to make
the failure of the defendant to give effect to the
plaintiff's rights contrary to justice.

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Chellaram v Chellaram [1985] 1
All ER 1043 at 1053
• Scott J.
• The jurisdiction of the court to administer
trusts …is in a personam jurisdiction.
• Case: Re Valibhoy (Dcd.) (1961) 27 MLJ
187
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3) Equity follows the law
• The Court of Chancery will not override the
Common Law Courts except:
• To remedy an injustice
• Equity could never depart from statute.
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3) Equity looks to the intention rather
the the form
• Another maxim with similar nature is “Equity
regards substance rather than form”
• Romilly MR in Parkin v. Thorold (1852) 16
Beav 59 at 66
• Courts of Equity make a distinction between
that which is matter of substance and that
which is matter of form; and if it finds that by
insisting on the form, the substance will be
defeated, it holds it to be inequitable to allow a
person to insist on such form, and thereby
defeat the substance
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Foskett v McKeown [1994] 1 AC
324
• Sir Richard Scott V-C
• ‘The availability of equitable remedies
ought….to depend upon the substance of
the transaction in question’
• Equity will look at the substance rather
than the form or the wording used.
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Margaret Chua v Ho Swee Kiew &
Ors. [1961] 1 MLJ 173
• a lease which is not registered is void as
a lease under the law but is good and
valid as an agreement for a lease and
may be enforceable in equity by a decree
of specific performance.
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• Equity will not grant an injunction to
enforce a negative covenant entered by an
employee agreeing not to work for others if
in substance this would amount to an order
of specific performance of their contract of
employment since Equity will not enforce
contracts of personal service.-employees
intention
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5) Equity looks at that as done which ought to be
done
• The maxim that equity looks upon as
done that which ought to be done applies
as a general rule of equity, outside the
law of contract.
• Where the contract is specifically
enforceable, equity regards the promisor
as having already done what he has
promised to do.
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Mountney v. Treharne
[2003] Ch. 135
• Where any court directs a person
to transfer property, equity treats
the transfer as having already
been executed.
• The husband became a
constructive trustee of the
property for the wife on the
coming into effect of the order
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HL Banerji v Chin Cheng Realty (Pte)
Ltd. [1983] 2 MLJ 18
• the parties had signed a 10 year lease of the
resp’s premises with a provision for renewal if
the App made a request three months before
the expiration of the lease. When the app
requested for renewal of the lease for 10 years,
the resp refused. The app sued for SP and
succeeded.
• Ct hd. that the App always had an equitable
right to renewal of the lease as equity looks
upon as done what ought to have been done.
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A-G for Hong Kong v Reid
[1994] 1 AC 324
• The maxim has the implication that the
fiduciary who receives an unauthorised
profit in breach of his duty of loyalty will
hold the profit on constructive trust for his
principal because he is subject to an
equitable duty to account for the profit he
received.
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• In other words, what would the position have
been if what should have been done had been
done?
• Equity acts on the conscience of a person.
• Walsh v. Lonsdale(1882) 2 Ch D 9
• 2 principles
i) evidence of the contract
ii) Suit within the time
• Concept of bare trust –Temenggong Securities
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6) He who comes to equity must come
with clean hand
• Does the plaintiff come into the court with
clean hands?
• Court will refuse relief where the plaintiff, by
prior conduct in relation to the matter in
litigation, has acted in bad faith or violated
some equitable principle
• The clean hands doctrine only applies when
the plaintiff has acted unjustly in the very
transaction of which he complains.
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• This maxims look at the past conduct of the
Plaintiff.
• However the maxim does not apply to
conduct in general, but only that which has
‘an immediate and necessary relation to the
equity sued for’
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Chettiar v Chettiar [1962] 1 MLJ 143
• A father had owned a maximum acreage of rubber
land allowed under regulations at that time. In order to
avoid tax assessment over ownership of an extra 40
acres of rubber land, the father transferred the 40
acres to his son as nominee. A receipt of $7000 was
obtained from his son when actually no money was
involved. Subsequently, the father contracted to sell
this land but the son refused to give him the power of
attorney. The father brought an action for a
declaration that the son held the land on trust for him.
The Privy Council dismissed the father’s action on the
ground of ‘unclean hands’ as the transfer was made for
a fraudulent purpose.
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Timber Master Complex (sabah) Sdn
Bhd v Top Origin Sdn Bhd [2002] 1
MLJ 33
• Operator entered into agreement on manufacturing
operation for 2 years with an option to renew
• Resp gave a notice to renew but no further action
• Ct held: The claim by the R that they had acquired
rights over the extended period would remain
empty claim if it was not met by the
corresponding duty to pay rentals.
• He comes to equity must come with clean hands.
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7) Delay defeats equity
• Equity aids the vigilant and not the
indolent.
• Persons who seek equity must not sleep
on their rights. This is the foundation of
the doctrine of ‘laches’ where a party
who has delayed cannot obtain equitable
relief.
• The Limitation period-the statutory rules
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Smith v Clay (1767) 3 Bro CC
639, 640
• Lord Camden LG
• …equity has always refused its aid to stale
demands, where a party has slept upon his right
and acquiesced for a great length of time. Nothing
can call forth this court into activity, but
conscience, good faith, and reasonable diligence,
where these are wanting, the Court is passive and
does nothing.
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Goh Heng Kow & Ors. v. Raja Zainal Abidin [1995]
3 MLJ 6
• In 1993, land sold to def. (Long)
• The P, a beneficiary of the previous registered
proprietor(settlor), caveated the land in 1994
which prevented the def. from registering the
transfer. When the P applied to extend his caveat,
the def. sought to set aside the order of extension.
• The court found that the P had acquiesced to
long’s title for almost 30 years and they were thus,
estopped and barred by laches from asserting their
alleged interests.
• Order set aside.
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Nelson v Rye [1996] 2 All ER
186
• It was held that a musician could not claim
an account of earnings wrongfully retained
by his manager in breach of fiduciary duty
because he had waited for more than six
years before commencing an action.
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8) He who seeks equity must do
equity.
• Looks at the Plaintiff’s future conduct
• If the plaintiff seeks an equitable relief he
must be prepared to act fairly toward the
person against whom it is sought.
• Eg, in the case of injunction, before a Court
can grant an interlocutory injunction, the
plaintiff must first take an undertaking.
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Mohamed Syed Fathima d/o Shahul Hammed & Ors
v MMS Syed Aliyar [2004] 5 MLJ 168
• Facts – P & D are partners and co-owners of
restaurant and staying together on the same floor –
obtained order agst trespass
• P’ was asked to pay damages to def for
discontinued injunctive orders agst the def
• P appealed agst the damages
• P relied on s 343 of the NLC – as co-owners, def
has no right for damages
• Ct hd: since P relied on s 343 thus shd also
realized that he also has no right to obtain
injunction agst the def.
• He who seeks equity must do equity
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8) Equity imputes an intent to
fulfill an obligation
• Equity places the most favourable construction on
a man’s acts.
• If he does something which could be construed as
fulfilling an obligation he owes, equity will regard
it as having this effect.
• Eg; If a debtor leaves a legacy to his creditor, this
is presumed to be a repayment of debt.
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Application in Malaysia- Specific
Relief Act 1950
• Object of the SRA 1950
• is confined to the class of remedies which a suitor
seeks to obtain and a Court of justice seeks to give
him the very relief to which he is entitled’
• There is the existence of a legal duty binding
upon the defendant and unfulfilled by him. What a
man ought to do by a rule of law, he ought to be
made to do by the force of law.

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• ‘the relief provided under this Act is a relief
in specie, that is, the performance of a
specific act or the delivery of particular
articles and not relating to the payment of
money”
• Per Kamalanathan R., JC in Arab Malaysian
[1998] 6 MLJ 136

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How it is given?
• Taking possession
• Ordering the person to do the act
• Preventing him to do the work- SRA s 5
• Determining and declaring the rights of the
person
• Appointing the receiver

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Conclusion
• Is a short phrase which formulates a
principle
• A brief expression of a general truth,
principle or rule of conduct
• As a guideline by the Chancery to decide
cases or to settle disputes
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Maxims of equity (Topic 3)

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