Canadian law is mainly comprised of statutes (legislation enacted by Parliament and the provincial legislatures) and common law (the body of law developed through court judgments). In addition, there is the law of equity that permits a court to grant equitable relief where there is no relief at common law, and which includes its own doctrines and maxims.
Canadian law has its origins in England. e law of equity began emerging between the 13th to 17th centuries. The original Court of Equity (the Chancellor’s Court) provided extraordinary justice when it heard cases where there was no remedy or jurisdiction at common law, thereby creating its own body of law.
Originally, the Courts of Equity followed the broad notion of natural justice, and differed from the common law courts in that equity did not have fixed rules or strictly apply the doctrine of precedent (applying or following previous case law to determine the result in the case at bar). Thus, the Courts of Equity applied its discretion to grant equitable relief.
However, by the 17th century, the law of equity began developing principles and the Courts of Equity began exercising discretion to award extraordinary justice pursuant to precedent. Eventually, the English Judicature Act was passed to combine the common law and the law of equity, and to provide that where there is a conflict between them, the rules of equity prevail.
Jurisdiction of Courts to Grant Equitable Relief
There are similar provisions in Canadian provincial statutes requiring courts to concurrently apply the rules of common law and equity (for example, section 16 of the Alberta Judicature Act). Certain levels of courts have the jurisdiction to grant equitable relief.
For example, in Ontario, the Court of Appeal and the provincial Superior Court of Justice have the ability to apply equitable principles and grant equitable relief, but not the Small Claims Court; and in Alberta, Saskatchewan, and Manitoba, the Court of Queen’s Bench (the superior court in those provinces) has jurisdiction to grant equitable relief. In contrast, pursuant to provincial legislation in British Columbia, all courts have the jurisdiction to consider and grant equitable relief.
Thus, those seeking equitable relief must ensure they seek it from the level of court that has the jurisdiction to grant the relief sought.
Some forms of equitable relief are: declaratory orders (binding declarations of rights); relief against penalties; granting injunctions or specific performance; and awards of financial compensation for breach of confidence. In order to advance a claim in equity, the seeker of equity must first establish facts under which the law of equity applies. Where there is conflict between common law and the law of equity, the law of equity prevails.
Equitable Doctrines and Maxims
Although the granting of equitable relief is discretionary, it is not arbitrary. Instead, the law of equity developed equitable doctrines and maxims, which the court applies guide its exercise of discretion to grant equitable relief. There is no hierarchy of the equitable doctrines and maxims, meaning one does not trump another. The court applies all applicable equitable doctrines and maxims in weighing whether to exercise its discretion to grant equitable relief.
Some of the more common equitable maxims are:
- those who come to equity must come with clean hands;
- those who seek equity must do equity;
- equity regards as done that which ought to be done;
- equity follows the law; and
- delay defeats equity.
The clean hands maxim requires that those who come to equity must come with clean hands; that equity will not grant relief where the seeker of equity has committed a wrong.
The clearest example of this maxim can be illustrated by the defence of ex turpi causa, which means that an illegal contract cannot be enforced. In other words, a plaintiff cannot profit from committing a wrong. If the cause of action arises from an illegal contract, there will be no equitable relief available to a person seeking to enforce such a contract.
This maxim focuses on the past conduct of the seeker of equity, and requires him/her to demonstrate that he/she has clean hands. For example:
- a plaintiff threatens his employer with blackmail, then seeks to enforce the terms of his employment contract;
- a plaintiff seeks an injunction, but previously breached another injunction against herself; and
- a plaintiff has acted in bad faith in relation to the defendant in relation to the issues at hand.
Those Who Seek Equity Must Do Equity
Equity requires those who seek equity to do equity. This maxim requires that the person seeking equitable relief must act fairly towards the person whom he/she seeks the relief against. This maxim deals with the future conduct of the seeker of equity, as the court may grant equitable relief to the plaintiff on such terms and conditions as the court deems appropriate. Thus, the plaintiff is obligated to fulfill such terms and conditions.
Equity Considers Done That Which Ought To Be Done
Another maxim states that equity regards as done that which ought to be done. This means that where a party was required to perform an obligation such as in contract law, equity would apply to consider the parties to be in the relative positions they would have been in if the obligation had been performed. As such, this maxim applies in favour of the party who was entitled to performance of a contract.
For example, where pursuant to a contract, John Doe was required to do something for Jane Smith but failed to do so, or completed only part performance of the contract, then equity would apply to place the parties in the positions they would have been in relative to each other if John Doe had actually completed his obligations. Thus, this maxim applies where the defendant was bound in equity to perform an obligation for the plaintiff and focuses on the effect or consequences that would have flowed from completion of the original contract.
Equity Follows The Law
The equitable maxim that equity follows the law explains that equity does not replace statute law or common law. Instead, equity applies where there is no remedy by virtue of statute or common law. However, equity must be consistent with statute or common law.
For example, this maxim applies where a trustee holds legal title to a parcel of land for the benefit of another (the beneficiary). In this case, the law recognizes that the trustee holds legal title, which at common law is unfettered legal ownership.
This means the trustee has all the rights of ownership including the rights to use, enjoyment, and disposal of the land. However, the trustee holds the land for the benefit of the beneficiary, thereby creating a trust. At law, a trust is an unexecuted use, a conveyancing device such that legal title is conveyed to the trustee to hold the land for the benefit of the beneficiary. Equity cannot operate to change the legal title from the trustee to the beneficiary, so equity imposes obligations on the trustee to act for the sole benefit of the beneficiary, thereby protecting the equitable rights of the beneficiary in that land.
Delay Defeats Equity
This maxim deals with the defence of laches to equitable relief. Laches means unreasonable delay such that the granting of relief would produce inequitable results.
Laches is more than mere delay, and instead implies neglect to do what ought to have been done. Thus, the maxim means that a party who delays in enforcing rights will not be able to seek equitable relief.
The equitable maxim that delay defeats equity is a general but not an absolute principle. For instance, the defence of laches does not apply where the plaintiff failed to enforce his rights because he was not aware of them unless the concept of constructive knowledge applies.
In this sense, the defence of acquiescence to equitable relief is related to the defence of laches. The defence of acquiescence applies to bar equitable relief where the plaintiff either affirmed or abandoned his right, thereby implying the plaintiff had knowledge of his right.
It should also be noted that the defence of laches and defence of acquiescence will not apply where the plaintiff does not in fact suffer any prejudice or change in position as a result of the delay itself.
Furthermore, the maxim of delay defeats equity will not apply where the conduct of the defendant is such as to render the success of the defence to be inequitable. For example, the defendant does not herself come to equity with clean hands because the delay was caused by the fraud of the defendant.
Indeed, in considering the defence of laches, the courts of equity consider whether such a delay was excusable or justifiable. The courts of equity look at factors such as:
- what acts were done during the period of delay;
- the degree of changes and how the parties have been affected during the period of delay; and
- the underlying equitable principle of justice versus injustice.
Most notably, the courts of equity will not consider the defence of laches in a vacuum, but consider it in the context of all equitable principles and maxims in determining whether to grant relief or not.
The law of equity is as important in Canadian law as statute law and common law. It operates to provide equitable relief when there is a recognizable right but no remedy under the common law. The law of equity has developed over centuries to provide equitable doctrines and equitable maxims. These provide guidelines to the courts of equity in determining whether to exercise its discretion to grant equitable relief with the overriding objective of ensuring justice is met.