Equity in English Contract Law: the Impact of the Judicature Acts (1873–75)

Abstract Just before the Judicature Acts came into force, the equity bar objected that the new court would be dominated by common law judges, whose ignorance of equity would ‘endanger the very existence of Equity jurisprudence’. This objection, though ridiculed at the time, can be seen in retrospect to have had some substance. In respect of several important aspects of contract law, notably unfairness, mistake, and privity, former equitable approaches were, after 1875, effectively marginalized both by the courts and by the writers of treatises on English contract law. Acknowledgments I am grateful to Dr Neil Jones, to an anonymous referee, to Catharine MacMillan, and to several colleagues for valuable suggestions. Notes 2Quoting from the Chancery Commission report PP 1852 xxi 1, 11 (page 3). 3PP 1868–69 xxv 6. 1Twenty-five pages. Parliamentary Papers [PP] 1868–69 xxv 1, 6. 4Ibid., at 7, referring to the Common Law Procedure Act, 1854. The Act was said by Osborne Morgan to have become ‘absolutely a dead letter’,' Parliamentary Debates, series 3, 216, col.666, 9 June 1873 (House of Commons). For the reasons, see M. Lobban, ‘Preparing for Fusion: Reforming the Nineteenth-Century Court of Chancery, Part II’, 22 Law and History Review (2004), 565, 590; Catharine MacMillan, Mistakes in Contract Law, Oxford, 2010, 82–6. 529 Law Magazine (1870), 152. 6Patrick Polden, ‘Mingling the Waters’, 61 Cambridge Law Journal (2002), 575, 577. 7 Parliamentary Debates, series 3, 201, col.1571, 30 May 1870 (House of Lords). 8High Court of Justice Bill (as amended), PP 1870 ii 187, clause 2. 9Original Bill, clause 4, House of Lords Papers, 1870, 32,48 Law Times (1870), 393, amended Bill, clause 3. 10Original Bill, clause 19; the amended Bill, clause 17, omitted the words ‘exercise the same jurisdiction and’, indicating that the problem was recognized, but not fully resolved. 11 Journals of the House of Lords, 102,276 (30 May 1870). See Lobban, ‘Preparing for Fusion’, at 595. The amendment did not fit harmoniously with other clauses, such as clause 17 (amended Bill), transferring the jurisdiction of each of the old courts to each of the new courts separately. 12Amended Bill, clause 9. 13See note 4, above. 14High Court of Justice Bill (amended), Clause 12. 15PP 1870 ii 204 (ordered to be printed, 24 June), Parliamentary Debates, series 3, vol.203, col.874, 25 July 1870 (House of Commons). 16Judicature Act, 1873, s.25 (11). 17 The Times, 28 April 1873, 8 col.f. A letter to similar effect signed by 350 members of the Outer Equity Bar appeared in The Times, 1 May 1873, 12 col.d. 18John Holker, Parliamentary Debates series 3, vol.216, col.876, 12 June 1873 (House of Commons). 19(1873) LR 8 Ch App 484. See Catharine MacMillan, ‘Aylesford v Morris (1873)’, in Charles Mitchell and Paul Mitchell, eds., Landmark Cases in Equity, Oxford, 2012, 329. 20 Aylesford v Morris argued 17 and 18 February; judgment 5 March. First reading of Judicature Bill, 13 Feb. 21Usury Laws Repeal Act 17 & 18 Vic c.90. 22Sales of Reversions Act 31 & 32 Vic c.4. 23A leading article in the Law Times manifested a commonly held, and very narrow, view of the proper scope of relief for unconscionability in the light of the statutes just mentioned, 49 Law Times (1870), 223. 248 Ch App 489. 25Ibid., at 490. 26Ibid., at 490–91. 27Ibid., at 499. 28Ibid. 29Ibid., at 492. 30The expression ‘hard bargain’, though used here to mean ‘unconscionable bargain’, came, both in general and in legal usage, to signify a contract that, though disadvantageous, was nevertheless enforceable. See Middleton v Brown (1878) 47 LJ Ch 411, 413 (Jessel MR, but refusing relief), Nevill v Snelling (1880) 15 Ch D 679, 704 (Denman J), Multiservice Bookbinding Ltd v Mardon [1979] 1 Ch 84, 112 (Browne-Wilkinson J). 31 Beynon v Cook (1875) LR 10 Ch App 389, 391. 32Ibid., at 393. 33A. Underhill, Change and Decay, London, 1938, 87. 34See notes, 71, and 101, below. See also David O'Keeffe, ‘Sir George Jessel and the Union of Judicature,’ 26 American Journal of Legal History (1982) 227, at 236–7, discussing Brett's marked disapproval of some of Jessel's decisions on the power, after 1875, to issue injunctions. 35Frederick Pollock, Principles of Contract, London, 1876, 154, quoting Hobbes, Leviathan (1660), part 1, ch.15 36William R. Anson, Principles of the English Law of Contract, Oxford, 1879, 63, quoting Alderson B in Pilkington v Scott 14 M & W 657, 660. 38Ibid. 37Pollock, Principles of Contract, 1st ed., 156 (emphasis original). 39Ibid., 518. 40Ibid., 519 (emphasis original). 41Ibid., 527. 42Reference followed to what Anson, like Pollock, considered the doubtful power of the court to deny specific performance on this ground. Anson, Principles, 65. 43Money Lenders Act, 1900, 63 & 64 Vic c.51. Significantly, the old equitable word ‘unconscionable’ was used in the statutory test: s. 1(1). 44 Lloyd's Bank v Bundy [1975] QB 326 (CA). 45 National Westminster Bank plc v Morgan [1985] AC 686. 50Ibid., 170. 46J. Story, Commentaries on Equity Jurisprudence, 2 vols., Boston, 1836, 155, maintained in subsequent editions, 13th ed., 1886, vol.1, 149–50. 47S.M. Leake, The Elements of the Law of Contracts, London, 1867, 178. 48J. Benjamin, A Treatise on the Law of Sale of Personal Property, London, 1868, 303. 49(1867) LR 2 HL 149. 51Ibid., 149. 52MacMillan, Mistakes in Contract Law, 38. See also 53, 68, and 136; Michael Lobban, ‘Contract’, in Sir John Baker, gen. ed., The Oxford History of the Laws of England, 13 vols., vol.12, Oxford, 2010, 441–2. 53George Palmer, Mistake and Unjust Enrichment, Columbus, OH, 1962, 94. 54(1748) 1 Ves Sen 126. 55Ibid., 126–7 (Fortescue, MR). 56See MacMillan, Mistakes in Contract Law, 48–9. 57MacMillan, Mistakes in Contract Law, 153. 58Eighty-eight pages, in a book of 577. 59Pollock, Principles of Contract, 1st ed., 357 (emphasis original). 60Ibid. 61‘We cannot do better than begin with the rule and illustrations as given in the Indian Contract Act.’ 62Pollock, Principles of Contract, 1st ed., 397. 63Pollock, Principles of Contract, 3rd ed., 1881, 455 (emphasis added). 64Pollock, Principles of Contract, 5th ed., 1889, 469 note k. 65 Bell v Lever Bros [1932] AC 161 (HL), where large sums of money were paid to terminate employment contracts that could have been terminated without any compensation had the employer known of the employees' earlier misconduct. 66 Solle v Butcher [1950] 1 KB 671 (CA). 67 Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd (The Great Peace) [2003] QB 679 (CA), para.157. 68 Heilbut, Symons & Co. v Buckleton [1913] AC 30 (HL). 69 Derry v Peek (1889) 14 App Cas 337 (HL). Negligence, though recognized as a ground of liability for misrepresentation in Hedley Byrne & Co. v Heller & Partners Ltd [1964] AC 465 (HL), required proof of fault. 71(1881) 20 Ch D 1, 12–13. 70E. Fry, A Treatise on the Specific Performance of Contracts, London, 1858, 193, 2nd ed., 1881, 282. 77Pollock, Principles of Contract, 3rd ed., 524, and discussion at 496. He asserted (536), of the ‘supposed head of “making representations good”’ that ‘no such doctrine really exists’. The passage quoted was retained in the fourth edition (1885) at 511, without reference, at that point, to Redgrave v Hurd. In the fifth edition (1889), at the corresponding page (533), the passage disappeared. 72Jessel died 16 months later, in March 1883. 73See note 26, above. 74A brief (retrospective and very unsympathetic) account of this group of cases can be found in G. Spencer Bower, The Law of Actionable Misrepresentation, London, 1911, 191–4. See Lobban, ‘Contract’, 428, referring to Eaglesfield v Londonderry (1876) 4 Ch D 693, where an attempt by Jessel just after the Judicature Acts came into force to apply some of these cases was reversed by the Court of Appeal. 75See notes 87 ff, below. 76Pollock, Principles of Contract, 1st ed., 464, 2nd ed., 1878, 483. 78Pollock's preface was dated ‘Midsummer, 1881’. The new edition was available to libraries in August (Cambridge University Library acquisition stamp, 12 Aug. 81), and was reviewed in the November issue of the Law Magazine, 7 Law Magazine (1881), 113. Judgment in Redgrave v Hurd was given on 28 November 1881 (The Times, 29 Nov. 1881, 3 col.f). 79In his eighth and ninth editions (at 589, and 599, respectively), Pollock included a footnote quoting and expressly criticizing Anson on this issue. 80 Principles of Contract, 10th ed., 1936, at 524–5, where Pollock conceded the point, citing a Privy Council appeal from Canada in support of the proposition that innocent misrepresentation justified rescission, but omitting reference (on this point) to Redgrave v Hurd or any of the subsequent cases or writers approving it, relying instead, as if to justify his former silence on the subject, on ‘accepted doctrine, founded on a long course of professional understanding rather than any positive authority’. Pollock's change of opinion was noted in a review by C.A. Wright, 14 Canadian Bar Review (1936), 783, at 784–5. 83Ibid., at 359. See also Lord Bramwell to the same effect, at 347. 81Anson, Principles, 5th ed., 1888, vii, 150, 153. 82(1889) 14 App Cas 337 (HL). 84[1913] AC 30 (HL). 85Ibid., at 51. 86Misrepresentation Act, 1967, which, however, introduced new complexities and anomalies. 87(1736) Cas t. Talbot 234. 88Ibid., at 236. 89J.H. Dart, A Treatise on the Law and Practice relating to Vendors and Purchasers of Real Estate, 4th ed., London, 1871, 951. 90E. Fry, Specific Performance, 2nd ed., London, 1881, 93. 91See G. Washington, ‘Damages in Contract at Common law’, 47 Law Quarterly Review (1932), 90, 106–7, describing the powers of the jury in an earlier period as ‘equitable’. 92As in Day v Newman (1788) 2 Cox 77. 93E.R. Daniell, The Practice of the High Court of Chancery; with some observations on pleadings in that court, 5th ed., London, 1871, 570, wrote that ‘a decree cannot be pleaded in bar of a new bill, unless it is for the same matter as the bill to which it is pleaded … It must also be conclusive of the rights of the plaintiffs in the bill to which it is pleaded … It must also be as beneficial to the plaintiff as that which might be obtained in the second suit’. This would seem to imply that successfully resisting a decree of specific performance would not bar the defendant in that suit from subsequently filing a bill for rescission, but I have not been able to find direct evidence on this point. 94(1880) 15 Ch D 215. 95(1861) 30 Beav. 62; also Swaisland v Dearsley (1861) 29 Beav. 430. 9630 Beav. At 64. 9715 Ch D 221. 98Ibid., at 222. These were weak grounds for distinguishing, since the judge in Webster v Cecil (Romilly MR) had made no such findings, and they were not given as reasons for his decision. Costs against the plaintiff were refused, suggesting that Romilly did not consider the plaintiff's conduct to be highly objectionable, and perhaps also that the defendant, while entitled to relief from the contract, should bear some part of the costs of his carelessness. Significantly James LJ, in Tamplin v James, said that costs ought to have been awarded in Webster v Cecil, also suggesting that he took a different view of the facts from those found by Romilly himself, and that he was rewriting, rather than distinguishing, the earlier case. 9915 Ch D 222. 100Ibid., at 223. 101Brett had a reputation as a judge who resisted the potentially expansive influence of equity on the common law: Underhill, Change and Decay; Polden, ‘Mingling the Waters’, 598. 102See Van Pragh v Everidge [1902] 2 Ch 266, 270, reversed on other grounds [1903] 1 Ch 434, where Kekewich J recognized that Tamplin v James had altered the law on this point. 105Ibid., 171 (emphasis added). 106Ibid., 174. 103E.B. Sugden, A Concise and Practical Treatise on the Law of Vendors and Purchasers of Estates, 14th ed., London, 1862, 163 (emphasis added). 104S.M. Leake, Elements of the Law of Contracts, London, 1867, 103. 107(1884) 28 Ch D 255, at 266. 108R.E. Megarry, ‘The Vice-Chancellors’, 98 Law Quarterly Review (1982), 370, 391. 109 Garrard v Frankel (1862) 30 Beav. 445, Harris v Pepperall (1867) LR 5 Eq 1. 110Pollock, Principles of Contract, 1st ed. 111Pollock, Principles of Contract, 5th ed., 459. 112Anson, Principles of Contract, 6th ed., 1891, 260 (sidenote citing Pollock). 113[1900] 1 Ch 616, at 623. 114The word in confusing, because ‘fraud’ was sometimes used in equity to denote the making of a claim or defence that was judged by the court to be inequitable. See notes 26, 31 and 73, above. 115William Kerr, A Treatise on the Law of Fraud and Mistake, 1st ed., 1868, 345, 2nd ed., 1883, 488. 116William Kerr, Fraud, 3rd ed. by S.E. Williams, 1902, 451 note 2, and 463. 117 Riverlate Properties Ltd v Paul [1975] Ch 133. 118D.M. Walker, Oxford Companion to Law, s.n. Bacon, Dictionary of National Biography, s.n. Bacon (article by J.M. Rigg), and similarly the new Oxford Dictionary of National Biography. 119(1689) 2 Lev 210, affd T Raym 302 (Ex Ch). 120This was crucial, because the mother, who was the only witness to the agreement, would not have been competent to testify in an action brought by the father's estate, of which she was executrix. See 3 Keb 786, s.n. Dutton v Pool. 121S. Comyn, A Treatise of the Law relative to Contracts, London, 1807, vol.1, 27; C. Addison, A Treatise on the Law of Contracts, London, 1947, 247–8, quoting Lord Mansfield in Martyn v Hind 1 Doug 142, 145, ‘it is difficult to conceive … how a doubt could have been entertained in the case of Dutton v Poole’; Joseph Chitty, A Practical Treatise upon the Law of Contracts, 2nd ed., London, 1834, 48 (though with some reservation). 1222 Lev 212. 123(1861) 1 B & S 393, 30 LJQB 265. 12430 LJQB 267. 125 Tomlinson v Gill, (1756) Amb 330; Gregory v Williams (1817) 3 Mer 582; Mulholland v Merriam (1872) 19 Grant 288 (Ontario, Chancery). 126A.L. Corbin, ‘Contracts for the Benefit of Third Persons’, 46 Law Quarterly Review (1930), 12. A writer in the Law Magazine had suggested in 1878 that Tweddle v Atkinson was a decision at law only, and that it could not affect equity cases, but did not pursue this line of argument: H.W. Boyd Mackay, ‘Marriage Articles and Privity of Contract’, 3 Law Magazine (1877–78), 468, 473. 127Pollock, Principles of Contract, 1st ed., 190 (emphasis added). 128Ibid., 191. 129(1817) 3 Mer 582. 130Pollock, Principles of Contract, 1st ed., 193. 131Pollock, Principles of Contract, 2nd ed., 198. 135Ibid. 132F.H. Lawson, The Oxford Law School 1850–1965, Oxford, 1968, 41–2, indicates that Anson originally wrote the book as a simplified account of the law, primarily for ‘passmen’ (as opposed to honours undergraduates). 133Anson, Principles,1st ed., 200. 134Ibid., 201 (emphasis original). 136Pollock, Principles of Contract, 3rd ed., 220. The report of the case, 3 Mer at 590, makes it clear that it was the benefit of the promise that was held on trust for Gregory, not any tangible property. Corbin discusses this aspect of the cases: Arthur Corbin, ‘Contracts for the Benefit of Third Persons’, 46 Law Quarterly Review (1930), 12, at 20. 137Pollock, Principles of Contract, 4th ed., 220 (emphasis added). 138 Les Affreteurs Reunis Societe Anonyme v Leopold Walford (London) Ltd [1919] AC 801; Elder, Dempster Co. Ltd v Paterson Zochonis & Co. [1924] AC 522. 139 Dunlop Pneumatic Tyre Co. Ltd v Selfridge & Co. Ltd [1915] AC 847; Midland Silicones Ltd v Scruttons Ltd [1962] AC 446. 140 New Zealand Shipping Co. Ltd v AM Satterthwaite & Co. Ltd [1975] AC 174 (JC on appeal from NZ); Beswick v Beswick [1968] AC 58 (HL). 141Contracts (Rights of Third Parties) Act, 1999. 142See the incisive comments of Robert Stevens, ‘The Contracts (Rights of Third Parties) Act 1999’, 120 Law Quarterly Review (2004), 292.

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