Striking a Balance: Exploring the Fusion of Equity and Common Law

Fusion is an attempt at merger of common law and equity courts and procedures so as to remove the past complications and problems of having two distinct systems by adopting a more rational simplicity involved in the fusion. In that sense, fusion is associated with reform of the system by making legal principles easily identifiable and by removing the confusion and ambiguities that are involved in having two parallel systems of law, which are common law or tradition and equity. However, equity has historically have had a distinct function where it has been seen as answering to the inadequacies of the common law; this is illustrated by the following statement:

“The object of equity, in assuming jurisdiction over legal rights, is to promote justice by supplying defects in the remedies that the courts of law afford…. The jurisdiction is co-extensive with the object: that is, equity assumes jurisdiction over legal rights so far, and so far only, as justice can be thereby promoted.”

Equity thus served a distinct purpose but, does that mean that it needed a different language because that led to the added confusion in the legal system with two parallel systems. The project of fusion responded to the overlapping between equity and common law when both may be involved in the same issue. This essay discusses the statement made by Worthington that “most equitable rules do not need a special language, or a special thought process, or a special philosophy, for their explanation or justification,” in the context of fusion and the tradition of equity. The essay argues that while some fusion is necessary, not all equitable rules are amenable to fusion, especially when fusion instead of serving the purpose of making law more coherent and stable only does the opposite of that. Fusion is not always possible between equity and law because at times, there is a problem of translation of the former to the latter or at times, there is such incompatibility between the two that fusion becomes impossible.

Fusion of equity and law has happened for the most part in an uncontroversial manner, with much of the fusion happening between mid-nineteenth and mid-twentieth century, with important legislations like the Supreme Court of Judicature Act 1873 and 1875 being enacted for this purpose. Fusion in this sense is the merger of law and equity for the elimination of dual court system, with the single court being called upon to apply both the law and equity. The general thinking during the time when fusion was being effected was that the elimination of the extra court system would help to eradicate many of the problems that were affecting the administration of justice. Although to some extent, this object was achieved, fusion did not always have the effect of removing the problems of the system and in some instances made the system more incoherent or unstable. For instance, fusion led to much of equity becoming a part of the system, with the adoption of procedural devices like discovery, joinder, and notice pleading, as well as the adoption of substantive matters like the doctrine of unconscionability. This was possible because there was no incompatibility that disallowed the fusion in these cases. Indeed, fusion in such cases led to the inclusion of equity in law. As Smith puts it, “in the fusion of law and equity, equity seems to have won” and that “with fusion, equity triumphed, even in death.” One of the reasons for this is that the statutes enacted to fuse equity with common law, specified that in the event of conflict between rules of equity and common law, the former would prevail. However, over a period of time, with single courts being vested with the jurisdiction to hear matters applying both law and equity, at times, equity gave way to law. This argument is made out by Henry Smith, who argues that due to the adoption of a single court system, where the court tried to apply both the law and equity, what has in fact happened is that there has been an attempt to “iron out equity”, and if allowed to operate on its own, equity would give different answers to legal questions than what are given in the common law. Therefore, the project of fusion has led to the neglect of the second-order function of equity, where equity is seen as meta-law; this has happened because although the judges are aware of the higher order than the ordinary law, but they are not able to associate this to second-order equitable function.

---

1. PG Turner, ‘Fusion and theories of equity in Common law systems’ in John CP Goldberg, Henry E. Smith, and Peter G. Turner (eds), Equity and Law (Cambridge University Press 2019) 1.
2. CC Langdell, ‘A brief survey of equity jurisdiction II’ (1887) 1 Harvard Law Review 111, 116.
3. S. Worthington, ‘Four Questions on Fiduciaries’ (2018) 32 Trust Law International 22.
4. Henry E Smith, ‘Fusion of law and confusion of equity’ in Dennis Klimchuk, Irit Samet, Henry E. Smith (eds), Philosophical Foundations of the Law of Equity (Oxford University Press 2020) 210.
5. Ibid, 213.
6. Ibid, 210.
7. Ibid

With fusion, equity became less distinguishable than common law, but it still managed to remain an important part of the system through fusion. Henry Smith has argued that the principles of equity may not in themselves constitute a complete system of law, but these do constitute a legal tradition that is distinct from the common law. Common law and equity have historically been distinguishable as can be inferred from the statement by Ashburner, that law and equity may run side by side in the same channel, but they “do not mingle their waters.” Historically, equity provided a distinct system with distinct purpose. However, fusion of the two has been achieved through the Judicature Acts. Lord Diplock also maintained in United Scientific Holdings that equity and common law had mingled. Therefore, it is reasonable to say that fusion has already taken place to merge equity and tradition. The question is how much fusion is necessary in order to ensure that the system becomes more coherent as far as application of equity and tradition is concerned. To answer that question, two things need to be kept in mind: first, equity at times is distinct and serves a purpose in being distinct; and second, at times, equity and law may be incompatible and not amenable to fusion. These points are discussed below.

Equity has come into the picture when are inadequacies in law and legal remedies or where some flexibility is required in how the court approaches the legal issues. At the same time, common law rules also exist to address the same legal issues leading to a problem where there is an absence of a coherent system where it is easy for lawyers to identify and apply legal principles and authorities because of the overlapping equity and common law rules. Smith’s starting point was that equity serves certain functions, which make it desirable for equity to have a distinct legal tradition. In that sense, it may be argued that some equitable rules may need a special thought process or justification. To be sure, Worthington too appears to accept this viewpoint where she makes a reference to most equitable rules, which implies that some equitable rules do need a special thought process or justification. However, where coherency is sacrificed to the need for distinction between equity and common law, there a need for fusion may arise.

An argument for fusion was made by Andrew Burrows, who argued that lawyers have failed to eradicate the needless differences in terminologies of, and the substantive inconsistencies between common law and equity. Burrows argued that in the English private law, three scenarios can be identified: one where common law and equity co‐exist coherently and the historical labels of common law and equity are justified; two where common law and equity co‐exist coherently but the labels can be done away with; and three, where common law and equity do not co‐exist coherently requiring a change in the law to produce a principled product. The last area would gain from fusion. Thus, fusion responds to the problem where both common and equity exist in a way that these cannot be distinguished or exist in a coherent manner; an example can be seen in the law related to trustee’s liability on the taking of a common account in which common law and equity do not exist in a coherent manner, which may be made more coherent if common law and equity rules were to be aligned and fused.

---

8. Ibid, 210.
9. Henry E Smith, ‘Fusion of law and confusion of equity’ in Dennis Klimchuk, Irit Samet, Henry E. Smith (eds), Philosophical Foundations of the Law of Equity (Oxford University Press 2020) 214.
10. Ibid.
11. Lionel Smith, ‘Fusion and Tradition’ in Simone Degeling and James Edelman, Equity in Commercial Law (Sydney: Lawbook Co. 2005).
12. W Ashburner, Principles of Equity (London: Butterworth 1902) 23.
13. United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, [925].

On the other hand, there are some areas where fusion is not possible as noted by La Forest J in Canson Enterprises Ltd, where he noted that selective fusion is a more acceptable solution where some concepts in equity trusts, equitable estates, and equitable remedies continue to be distinct from common law. This approach suggests that instead of subjecting all of equity to be merged with common law under a fusion project, some equitable rules continue to be treated as distinct and separate from the common law rules. The issue that is raised here is whether at times fusion may be inappropriate because of the obvious incompatibility between the equity law and common law. In case of incompatibility between the two, there is a chance that equity is neglected;

An example of how equity and law may sometimes be incompatible and therefore not appropriate for fusion is given by Goldberg and Smith who argue that there has been some wrongful fusion between equity and tort. Historically, tort and equity have been distinct although some equitable principles like equitable relief were invoked within equity. For the most part, equity did not intervene in tort. However, there has been an intersection between equity and tort, such as, in the cases of coming to the nuisance. The intersection has led the courts to re-describe torts and also recognise new torts, which in some cases has had the impact of making tort law less coherent and stable. In other words, the problem in this situation of fusion is that the project of fusion does the opposite of what it is supposed to and that instead of making law more coherent and stable through fusion, the intersection between equity and tort may have the effect of making the law more incoherent and unstable especially when existing torts are re-described or new torts are introduced.

A practical problem in the project of fusion relates to translation of equitable rules to legal because of the passage of time and change in legal rules, cultures and institutions, which demand that mere transposing of equity will not suffice and it will have to be translated. This has implications for fusion of law and equity. Gray argues that the deeper issue in the agreements and disagreements about fusion is how to take equity from its past form and translate it into the present. There are two areas in this context that demand attention: past and present rules, and form and substance. Form of equity relates to edge, that is what distinguishes equitable from inequitable; hierarchy, that is, equity supplementing the law and being subordinate to it; and texture, that is, decision making methods that may rely on changing presumptions. However, Gray also notes that this translation is more apt for American courts and not English courts because for the latter, equity is not something from the past. Nevertheless, the issue of translation taken up by Gray does reveal an area of difficulty which may at times also come before English judges.

---

14. Andrew Burrows, ‘We do this at common law but that in equity’ (2002) 22 (1) Oxford Journal of Legal Studies 1.
15. Ibid
16. Mathew Harding, ‘An argument for limited fission’ in John CP Goldberg, Henry E. Smith, and Peter G. Turner (eds), Equity and Law (Cambridge University Press 2019).
17. Canton Enterprises Ltd v Boughton and Co. [1991] SCR 534, [585].
18. John CP Goldberg and Henry E Smith, ‘Wrongful Fusion: Equity and Tort’ (2017) Harvard Public Law Working Paper No. 17-30.
19. Ibid
20. Ibid
21. Samuel L. Bray, ‘Form and Substance in the Fusion of Law and Equity’ in Dennis Klimchuk, Irit Samet and Henry E. Smith (eds.), Philosophical Foundations of the Law of Equity (Oxford University Press 2020) 232.

To conclude, fusion is necessary to remove difficulties in law where equity and law both are overlapping and creating confusion; however, all of equity cannot be fused with law. Fusion is not possible or desirable where the distinct functions of equity are threatened by the merger with law and the possible neglect of equity by the single court administering both law and equity. Fusion is also undesirable in cases where there is incompatibility between law and equity and where fusion would only lead to more confusion and instability. An example of this is given in the essay related to fusion of tort and equity, which has led to the re-description of tort or introduction of new torts making tort law less coherent and stable. There is also a problem of translating of equity into law, which may present some difficulties for the judges who have to translate past rules of equity into the current situations. Therefore, it may be argued that fusion should be approached in a limited manner and it should be realised that not all of equity can be fused with law. In some instances, equity does provide distinct language, thought process, and philosophy, for their explanation or justification, which makes it necessary to consider such rules as separate in themselves and not amenable to fusion.

Cases

Canton Enterprises Ltd v Boughton and Co. [1991] SCR 534.

United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904.

Books

Ashburner W, Principles of Equity (London: Butterworth 1902).

Bray SL, ‘Form and Substance in the Fusion of Law and Equity’ in Dennis Klimchuk, Irit Samet and Henry E. Smith (eds.), Philosophical Foundations of the Law of Equity (Oxford University Press 2020).

Harding M, ‘An argument for limited fission’ in John CP Goldberg, Henry E. Smith, and Peter G. Turner (eds), Equity and Law (Cambridge University Press 2019).

Smith HE, ‘Fusion of law and confusion of equity’ in Dennis Klimchuk, Irit Samet, Henry E. Smith (eds), Philosophical Foundations of the Law of Equity (Oxford University Press 2020).

Smith L, ‘Fusion and Tradition’ in Simone Degeling and James Edelman, Equity in Commercial Law (Sydney: Lawbook Co. 2005).

Turner PG, ‘Fusion and theories of equity in Common law systems’ in John CP Goldberg, Henry E. Smith, and Peter G. Turner (eds), Equity and Law (Cambridge University Press 2019).

Journals

Burrows A, ‘We do this at common law but that in equity’ (2002) 22 (1) Oxford Journal of Legal Studies 1.

Goldberg JCP and Smith HE, ‘Wrongful Fusion: Equity and Tort’ (2017) Harvard Public Law Working Paper No. 17-30.

Langdell CC, ‘A brief survey of equity jurisdiction II’ (1887) 1 Harvard Law Review 111.

Worthington S, ‘Four Questions on Fiduciaries’ (2018) 32 Trust Law International 22.

Take a deeper dive into Strategies to Prevent the Prevalence of Hiv with our additional resources.