1. Work sheet 3
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2.  1. Discretionary in nature
◦ Equity not a right
◦ Must be an infringement of right
◦ Must show that equitable relief ought to be granted within the
following principles:
 Enforcement difficulties
 Supervision difficulties
 Futility of decision (equity does not act in vain)
 Unavailability of evidence
 Hardship to the defendant - may not give an injunction it will
cause this
 Non disclosure of material facts
 Conduct of applicant – (clean hands doctrine)
 Lack of mutuality (Re Hawthorne)
 2) Actions in Personam and its implication
◦ Equity acts in personam – against the person himself (rem is against
the thing)
◦ Failure to comply means contempt and imprisonment
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3. ◦ Power of CC, was there pride but terror to Cl court
◦ Equity does not vitiate CL judgements (Earl of Oxford – did not
interfere with CL judgement)
◦ It mitigates the harshness of the CL
◦ Effect of notice
 Legal right – action in rem good against the world and the BP for
value without notice
 Equitable interest can assert right against everyone except the BP
 Equity acts on the conscience
 Right of BP is to take legal estate free from equitable rights.
◦ Tracing:
 Not a remedy per se, but available in CL/Equity
 Tool to track down assets or there value and return it to the
proper owner (its about recovering assets CL deems lost for good)
 Property may have been acquired by mistake, breach of fiduciary
duty
 CL rule: once the property cannot be identified, it is not
recoverable eg unless money is placed in a special place, once it
mixes in with the others according to CL it not traceable. 3

4.  (CL is rigid, equity came to mitigate this) (Re Diplock: CL
operated from materialistic position. Could only appreciate
physical identity of a thing...and money was not identifiable if it
mixed in with other money: Limitation: because CL does not
recognize equitable claims to any type of property)
 TUTORIAL 13.2.13
 Equity:
 Does not have the same CL limitation
 Tracing not a remedy but a tool that assist equity
 Equity adopts a metaphysical approach (Re Diplock – invalid trust,
no fiduciary relationship)
 Requirement/limitations: must have fiduciary relationship, and
show equitable ownership (Re Diplock)
 Allows for transmission of legal claims from original assets to
either 1) proceeds of sale of asset or 2) new substituted asset.
 Claim in equity is a claim in personam
 Impact of Tracing:
 Taken from the rule in Hallet’s case:
 a) trust funds retained or cleanly substituted by different 4

5.  b)tracing into a mixed bank account containing both trustee's and
beneficiary's money. Pari passu rule: they can claim share equal to
there contribution.
 Difficulty: where mixed fund is used to purchase property,
 Then Subject to Clayton’s rule: withdrawals from the account
are presumed be made in the same order they were paid in.
 C) tracing into a into mixed bank account containing the money of
2 different trusts/ one trust and an innocent volunteer. (not
confined to the original mixer but the innocent volunteer as well)
◦ Limitations of tracing:
 Where there was a fiduciary relationship, claimant takes priority
(same thing for volunteer)
 Volunteer taking a gift without notice of the mixing from the agent
 Volunteer who mixes his money with the claimant can claim back
the money he has contributed to the mix fund (pari passu)
◦ Limitation on equitable tracing
 1) Recover of EI that has fallen into the hands of a BP for value
without notice, no recovery
 2) Disipitated funds, equity becomes as helpless as the CL (Re
Diplock-invalid trust fund)
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6.  3) Changing position:
 is a defence;
 the volunteer defendant returns the property back (or takes
steps which he would not have taken otherwise), which
changes his personal circumstances unjustly;
 the act outweighs the injustice to the claimant (National
Westminster Bank v Somma International
 4) Estoppel by representation
 Similar to changing position
 Defendant shows that the claimant made some false
representations, which he acted upon to his detriment
 Originally if successful, the defendant would receive all the
property, that was changed where he can only now receive
property equalling the loss he suffered (National Westminster
Bank v Somma International)
◦ Extra jurisdictional reach
 Equity acts in personam, so that the location of the property is not
important because the jurisdiction if over the person (Ellerman
Lines v Read – Court does not interfere with the jurisdiction of
other court but makes orders over the person).
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7. ◦ Useful where property is located abroad
◦ Not dependent on the law of locus(uses mareva injunction), but
rather conduct of the party by virtue of contract or fraud
◦ Can order SP/injunction in respect of land outside the jurisdiction
◦ Orders are enforceable only if person is within the jurisdiction or
before the court physically (ellerman v Read)
 3: Statutory periods of limitation and lapse of time
◦ Equitable remedies is not subject to period of limitations (fraud,
breach of trust, setting aside transaction.
◦ ER subject to doctrine of laches
◦ Doctrine of laches:
 Means “out of time”
 Based on equitable maxim “equity aid the vigilant and not those
who slumber on their rights.”
 Application of the doctrine (Lindsay petroleum v Hurd)
 Where the claimant delayed to bring action that it is impossible
to have a fair trial (because critical evidence may be lost or
destroyed)
 Where the defendant acts believing that the claim will not be
pursued
◦ Limitation different from laches. One set by law the other is caused
by virtue of neglect
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8.  Maxims of Equity
◦ Defining maxims
 Treat them as pinch of salt, do not interpret literally
 Judicial shorthand
◦ Maxim 1: He who comes to equity must come with clean hands
(Coatsworth v Johnson – c was in breach of several covenants on a
least with the LL, next three bullet)
 Its not about moral character
 Improper conduct connotes illegal and not immoral
 Conduct must be related to the equity sued for
 Limits of the clean hands doctrine:
 Relief sought must have some relation with the blameworthy
conduct (Grobbelar v News Group newspaper – sued for libel
slander however the doctrine was not applicable because the
wrong doing was bribe not fixing of matches).
 General or total conduct of C should not be considered
 Doctrine not applicable if it will cause hardship on the
defendant
 TUTORIAL 20.2.13 p57 8

9. ◦ Maxim 2 (17/WS, 72/B): He who seeks equity must do
equity:
 P must be worthy and act in an equitable manner
 P must abide by the principle of mutuality (in
restitution, defence of SP
 P must still establish prima facie equitable
right/interest
◦ Maxim 3 (18/WS, 72B): Equity will not suffer a wrong
without a remedy:
 Worthy claimants will recover and not be prevented
from the technicality of the CL.
 Two examples of this are
 1) Rectification: Court adjusting agreement to reflect
common intention of the parties; Not automatic and is
evidence based (Josecelyne v Nissen– agreement with
father and daughter to sell business and daughter manage
expenses of father) 9

10.  2) contracts for sale of land and part performance:
about fairness, must provide evidence.
◦ Maxim 4: Equity follows the law: (74B)
 Follows close with equity acts in personam, and comes
to fulfil the law
 Traditional role of equity to mitigate the rigours of the
CL, not to overrule
 Acts in personam and comes to fulfill the law
 EG, trust, tracing, extra jurisdictional reach (Earl of
Oxford, Re Diplock)
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