Where am I now? Lawlink > Supreme Court > Speeches > Fusion: Fallacy, Future Or Finished?  Print page   Fusion: Fallacy, Future Or Finished? FUSION: FALLACY, FUTURE OR FINISHED? KEITH MASON FUSION CONFERENCE 16 DECEMBER 2004 The fusing of law and equity has been going on for centuries. It has generally been encouraged by all branches of government since the time that Chancery began behaving like a court of law. It reflects the law's striving for coherence and consistency. James I intervened in 1615 to end the scandal of Chancellor Ellesmere's common injunctions being answered by Chief Justice Coke's writs of prohibition issued to the Court of Chancery. In the Earl of Oxford's Case[1] the King upheld Lord Ellesmere's jurisdiction to grant an injunction against executing a judgment in ejectment in the common law Courts. Chancery's jurisdiction to issue a common injunction was secured. The power would be abused from time to time, but the circuit-breaker was in place. Over the centuries, judges at common law and in equity moulded principles whereby the two "systems"[2] acted in aid of each other where appropriate, recognised and applied each other's rules when necessary to do so, and borrowed ideas from time to time. Movements towards a common Bar, especially strong in the colonies, encouraged the trend. In the 19th century Parliaments in England and elsewhere lent their hand, combining courts, sharing remedies across the board and promoting common procedures. Common procedures and fact-based pleadings encouraged plaintiffs to be less disciplined in confining themselves to traditional causes of action. But they also made courts contemplate both blended doctrines and the possible injustice of allowing plaintiffs to avoid the principled limitations of one cause of action/remedy by resort to another that differed only in name or history. Historical and at times accidental differences between law and equity in dealing with the same facts were no longer self-evidently justifiable. The seeds of fusion have always lain in the judicial method. Significant developments since the Judicature Acts, especially in the late 20th century, have accelerated the fusion whose formal structure has been in place in most jurisdictions for well over a century. New South Wales was a very late arrival, but much groundwork was done there before 1972. In these circumstances, questions about the institutional bifurcation of law and equity are becoming increasingly irrelevant, if not distracting. Legislation also covers many areas of former differentiation. Investigation of pedigree is being eclipsed by the greater need to have regard to the function served by a particular right or remedy and to the overlap of the parallel or discordant strands suggested by historical enquiries about "legal" and "equitable" rules. Defining modern Equity in Australian law Assuming its meaningful existence in modern Australian law, one is still driven to concede that Equity: • is regarded by the High Court as an unidentified portion of the constitutionally unified "common law" component of the "single system of jurisprudence" administered by the "integrated" or "unified" judicial system of Australia;[3] • is administered throughout Australia in all courts of general jurisdiction with practically no distinguishing rules of procedure; and • is as regulated by precedent as other branches of the law.[4] What then is Equity in modern Australian law? How is it defined by those who value its distinctiveness? What would an inquisitive layman (let us call him Socrates) be informed by an Equity scholar? Socrates would first be told about a body of largely non-statutory rules tracing historical roots to the decrees of the late medieval Chancellors who intervened in cases when the common law was defective or out of reach of disadvantaged suitors. Unless Socrates is a legal historian, this would be like describing Australian common law by reference to the Year Books or Australian statute law by reference to the Parliament of Edward I. Pressed for a precise definition, the Equity scholar would speak of that part of the law of England enforced exclusively in the Court of Chancery before its abolition in 1875. Memory jogged, the scholar would testily qualify the answer by additional reference to the equity jurisdiction of the English Court of Exchequer until 1842 and of the Palatine Courts of Chancery until 1971. A glimmer of courteous recognition appears on Socrates' face. If he had technical understanding about the topic, dialogue would follow about the maxim of the Court of Chancery that "Equity follows the Law". This would reveal that Chancery generally recognised and applied common law rules as well as its own "equity" rules. But Chancellors chose not to do so in particular cases; either (as with trusts) because the common law in a general field was trumped by an in personam (equitable) right enforceable if necessary by a common injunction, or because there was a body of particular rules covering the same field in which law and equity were known before 1875 to be in conflict when addressing identical situations.[5] Our patient scholar would also acknowledge that equitable principles, doctrines and procedures were occasionally introduced into trials of actions at common law, for example by Lord Mansfield.[6] The conversation might continue along the following lines: Socrates: But what does this mean for Australia in 2004? Are you telling me that this body of Chancery Court law was received here in 1875 and that it applies to this day? Should I look for an 1875 English textbook on the subject that I can place next to my copy of the third edition of Bullen and Leake on Pleading? Scholar (drawing breath slowly through teeth): Actually, Chancery law was almost certainly received into Australian law upon white settlement in 1788 because of a common law rule discussed in Blackstone's Commentaries. An 1828 Imperial statute confirmed the reception into eastern Australia of the general corpus of English Equity (along with common law, statute law and ecclesiastical law - but not matrimonial causes law). But don't worry about the dates too much. In the latter part of the nineteenth century the Privy Council enforced legal uniformity throughout the Empire, and until late into the twentieth century Australian courts generally applied the rulings of all English courts slavishly. So, if an English court decided an equity case in say 1920, Australian law would fall in line, even in New South Wales which did not completely fuse the administration of law and equity until 1972. In any event, your idea of getting an 1875 English textbook is pointless, unless you are a collector of historical works. You see, Equity changed significantly in England after 1875. There have been major statutory developments and quite a few movements in the caselaw as well. There are doctrines like injunctions in public law, Mareva orders, Anton Pillar orders and promissory estoppel that would have shocked nineteenth century Chancellors. Some of these so-called "equitable" doctrines and remedies really stem from statute law or general law concepts like abuse of process developed across the board in recent years to prevent unconscionable use of legal rights. But, one may still speak of modern Equity, in reference to particular areas of English law derived from the pre-1875 Chancery law. Whether or not the progeny is legitimate, it represents a corpus of principle on a variety of topics that is binding in England today. You will read about it in the latest edition of Snell. Oh, I forgot about trusts. It is a branch of property law that is part of Equity, but not usually included in Equity textbooks. Socrates: Will Snell explain what unites and explains Equity? Scholar: No, because there is no common theme or principle. Besides, equity scholars don't often talk about theory, even when considering whether a modern precedent is in line with nineteenth century caselaw. There are some maxims of equity, but they have fairly limited application. Equity applies "common law" rules of precedent and of legal reasoning by analogy. Some remedies (now usually statutory, but originally exclusively equitable) are discretionary, unlike most original "common law" remedies. Of course, some "common law" remedies were and are discretionary also, and most equity doctrines are quite rigid (especially in property matters). All branches of the modern law grapple with notions of promise-keeping, good faith, privacy, abuse of process, unconscionability and estoppel, etc etc that were once largely (but never solely) equitable in origin. Socrates: So Snell's Equity is where I can find modern Australian Equity? Scholar: Certainly not. You see, the High Court of Australia has in recent decades declined to follow some of the English Equity cases. If you buy Meagher, Gummow and Lehane,[7] an excellent text, you will find many suggestions for additional departures from English Equity, along with the occasional restrained criticism of the High Court itself. You would enjoy their treatment of Mareva orders which contains twelve pages proclaiming Equity's lack of "jurisdiction" to award them, pouring scorn on any suggested statutory basis for this remedy, and concluding with a tiny, begrudging acknowledgement that the High Court has four times approved the remedy. At this stage, Socrates mutters in his vernacular that "It's all English to me" and changes the topic. What he has learnt so far makes him wonder whether it matters to define or identify Equity in the 21st century. This paper seeks to explore whether Socrates' original question does matter. The topic of fusion of law and equity generates interest and heat in certain circles, which of course is enough to justify a Conference. The relevance of the supposed law/equity divide has become a focus for those who endeavour to propound a rational, coherent and efficient scheme of Civil Obligations. It is remedial and doctrinal fusion (or confusion) that generates most disputation, with claims ranging from those who believe fusion has already happened to those who believe that it is doctrinally impossible for "jurisdictional" reasons. I want to start by unpacking the varieties of fusion, if only to identify matters of common ground and the true nature of underlying controversies. Varieties and stages of fusion When we speak about the fusion of law and equity we need to distinguish between four types of fusion: fusion of administration, procedure, remedies and doctrines. We must examine caselaw and legal theory as much as statutory developments. And we need to be on guard against distraction by sometimes fictional passwords like trustee, trust property and fiduciary.[8] Care is also needed in the use of different words to describe similar legal concepts and the use of the same word to serve different purposes.[9] As fast as we distinguish the varieties of fusion, we must acknowledge that developments in one field have impacted on others. We inhabit a legal system that regards jurisdictional questions as primary, thinks of doctrines in terms of causes of action, views rights through remedies, and approaches remedies through procedure. It is often stated that fusion of law and equity in England occurred in 1875, but this is quite misleading. Fusion of whatever nature represents an ongoing and interactive process, not an event that occurred in its definitive form at a particular moment of time. The processes and levels of integration (or non-integration) may differ from one law area to another. In any event, Judicature Acts are only constitutional in nature if you choose to treat them that way; and all Constitutions would surprise their founders more than a century after promulgation. To my knowledge, debates about fusion have arisen in every legal system deriving from English law. Different attitudes about the relationship between law and equity are however, more than a product of when English law was received and when and how "law" and "equity" were statutorily fused. Academic cultures have also played their part.[10] I shall hereafter use "general law" when referring to the inheritance of judge-made common law, equity, ecclesiastical and maritime law derived from English law. "Common law" in its stricter sense refers to the systems of law practised at trial level in England before 1875 in the Queens Bench, Exchequer and Common Pleas Courts. I suppose that is an accurate definition, although it is something of a mystery why no one treats "common law" in the same way as equity (usually spelt with a capital "E") in the present universe of discourse. Can it be that common law scholars (if they exist in the same sense that we talk of Equity scholars) have simply moved on? To my knowledge, no law school teaches "common law" as a subject. In referring to a modern Judicature System, we envisage trial courts of general jurisdiction (subject to monetary limits in some cases) whose judges hear and determine disputes, whether arising under statute law or general law in all of its manifestations. These courts may have specialist lists, but litigants can advance claims and defences however arising. Proceedings will be moved sideways to appropriate judges or courts if commenced in an inappropriate forum or list. The choice of initiating process, pleading system, method of adducing evidence, interlocutory procedures, method of trial and right of appeal are generally unaffected by concerns as to whether asserted rights or defences are statutory, legal, equitable, ecclesiastical or maritime in derivation. There may be pockets of resistance in matters of practice (eg the order of addresses), or culture (eg the style or volume of counsel), but these are diminishing. Trial of "common law" matters by jury is now very exceptional. Modern pleadings concentrate first on facts giving rise to substantive causes of action based eg on contract, tort, trust, statutory obligation etc. They then claim a variety of remedies in the alternative. Very few causes of action or remedies will be exclusively equitable in historical derivation and even these are now statutory in most cases. Some court statutes, like the Supreme Court Act 1970 (NSW), contain provisions re-enacting nineteenth century steps towards procedural fusion, but in a form that usually confers the power to award any variety of injunctions, declarations etc. This is not to imply that the reader does not need to know the circumstances in which the particular remedies are available. He or she is, however, more likely to go to the applicable specialist text on substantive law (torts, defamation, contract, trusts) or to practice books or books on remedies generally, rather than to Equity texts to find the remedial and procedural rules referable to a field of law.[11] Other statutes, like the Trade Practices Act 1984 (Cth) offer a smorgasbord of remedies in terms that indicate the need for real caution lest judges wrongly assume that traditional "equitable" principles apply to the minority of available remedies that would have been available only in Chancery before 1875.[12] It can be misleading to approach statutes like the Trade Practices Act with preconceptions about the continuing role of equity doctrine, even when what formerly were purely equitable remedies like rescission and injunction are mentioned. In the 21st century it is hard to think of a non-Judicature system. Priestley JA once quipped that "Even in New South Wales all common law judges are chancellors now".[13] Advocacy is becoming increasingly specialised, but the lines of division have nothing to do with any doctrinal common law/equity division. There may be different levels of complexity between different types of case, but this is presently irrelevant. I estimate that less than 10% of the work done in the Equity Division of the Supreme Court of New South Wales involves Equity in the sense explained to Socrates. Some is probate, much is contract, most is statutory (eg Family Provision Act, Corporations Act, revenue law). Occasionally we are reminded of the problems inherent in a pre-judicature system. This is when Parliament creates specialist courts with exclusive jurisdiction. Then it really can matter that the plaintiff has filed in the wrong court or that part of the matter in dispute lies outside that court's jurisdiction. All four types of fusion of law and equity identified above were addressed in the Judicature Act 1873 (UK), although it was not itself the original model for fusion .[14] The Judicature Act 1873 created a single Supreme Court of Judicature divided into the Court of Appeal and the High Court of Justice (with five Divisions, merged into three in 1881). Section 24 addressed the relationship between legal and equitable procedures, with the general object of securing a complete and final determination of all matters in controversy between the parties and avoiding multiplicity of proceedings. The section gave all branches of the Court power to administer equitable remedies, enabled equitable defences to be invoked, required all branches of the Court to recognise equitable titles, prohibited the issue of common injunctions within the Court and gave general power of determination of legal titles. The predominant feature of the common law system of pleading had been the requirement that the plaintiff choose a cause of action in which to bring the claim. The parties thereafter exchanged pleadings that were designed to produce either an issue of law by way of demurrer or an issue of fact for decision by the jury. There were many technicalities and fictions, although some were abolished by pleading reforms in the mid-19th century. In Chancery, the plaintiff pleaded by Bill in Equity, a complex, prolix and repetitive document. Once again mid-19th century reforms removed a number of technical excrescences, requiring the Bill to state the material facts, matters and circumstances relied on. The Rules of Court made under the Judicature Acts[15] prescribed the modern system of pleading which sought to combine the best features of the two former systems, the brevity and the simplified forms of the common law with the Equity principle of stating facts and not the legal conclusion which the pleader put upon the facts. This system enabled parties to allege in one process facts giving rise to causes of action, defences or replies recognised at law, in equity or by statute. The origin of a right did not need to be stated unless silence might take the opponent by surprise. The Judicature Act 1873 was mainly procedural in motivation. Lord Selborne LC said as much during the debate on the Bill. So too did Sir George Jessel MR in Salt v Cooper in 1880 when he said that the Act "simply transferred the old jurisdictions of the Courts of Law and Equity to the new tribunal, and then gave directions to the new tribunal as to the mode in which it should administer the combined jurisdictions".[16] Section 25 addressed areas of substantive clash, but initially it was thought that most bases had been covered and that the catch-all provision (subs 11) would have little work to do. Contrary to what one sometimes reads, the reformers perceived that a system of fused administration might provide the means of ironing out inconsistencies and discordances in the practical administration of the law. Thus, the Judicature Commission responsible for the Judicature Act reported in 1869 that:[17] The litigation arising out of Joint Stock Companies has constituted a very large proportion of the business which has engaged the attention of Court of Law and Equity for some years. Directors of Joint Stock Companies fill the double character of agents and trustees for the companies and shareholders; and the effect of their acts and representations has frequently been brought into question in both jurisdictions, and sometimes with opposite results. The expense thus needlessly incurred has been so great, and the perplexity thereby occasioned in the conduct of business so considerable, as to convince most persons, who have followed the development of this branch of the law, of the necessity that exists for a tribunal invested with full power of dealing with all the complicated rights and obligations springing out of such transactions, and of administering complete and appropriate relief, no matter whether the rights and obligations involved are what are called legal or equitable. The merging of administration, procedure and remedies (with rule-making power that would enable further developments in that direction over the years to come) was the cornerstone of a system of fused administration of law and equity. But it was not the first or last legislative step on the topic in England. Earlier in the 19th century, statute provided the Common Law Courts with a limited power to grant injunctions;[18] and Chancery the power to decide legal titles,[19] together with a power to award damages[20] that with hindsight appears to have been unnecessary.[21] As the years progressed after 1875, statute law and court rules further integrated common law and equity procedure. As early as 1879 the English Court of Appeal held that, in cases where no rule of practice was laid down by the Rules made under the Judicature Act, and there was a variance in the old practice of the Chancery and Common Law Courts, that practice was to prevail which was considered most convenient.[22] Procedural coalescence continued in the 20th century with the gradual abolition of jury trial, greater use of the summons as an initiating process, increasing resort to evidence by affidavit or statement and other developments. Other legal systems proceeded towards administrative, procedural, remedial and substantive fusion in different ways and at different times.[23] Thus, administration within a single Supreme Court came to New South Wales from the founding of the colony, whereas full procedural and substantive fusion only arrived in 1972. But long before then, several of England's pre-1873, 1873 and post-1873 reforms were introduced piecemeal. English legislation of 1854 that had conferred on the common law Courts limited powers to grant injunctions and to recognise equitable defences was adopted in New South Wales by the Common Law Procedure Act 1857. But the latter provision was held to be only available in circumstances entitling the claiming of an absolute, perpetual unconditional injunction, otherwise it was still necessary to seek a common injunction in separate proceedings in the equity side of the Supreme Court. An attempt to plug this gap on condition that the proceedings were transferred into the jurisdiction of the Court in Equity was enacted in 1957.24 Continuing difficulties with this provision were a fillip for the complete fusion enacted in New South Wales by the Supreme Court Act 1970.25 Why legislation was necessary in New South Wales New South Wales never had separate superior courts. The administration of law and equity was the business of the Supreme Court from the outset, with statutory backing from the time of the Second Charter of Justice in 1814. Yet this was insufficient to bring about the other varieties of fusion, however much the idea may have appealed to the first two Chief Justices of New South Wales. In 1765, William Blackstone in his Commentaries on the Laws of England, formulated the general law rule of reception of English law into "settled" colonies, which all Australian colonies were later presumed to be. He proclaimed that "all the English laws then in being ... [were] immediately there in force". This principle was qualified by the statement that the colonists carried with them "only so much of the English law as is applicable to their own situation and the condition of an infant colony". The uncertain operation of Blackstone's rule had led to difficulties in New South Wales by the 1820s, but no one doubted that the general law of England (including Chancery law) was part of the colonists' inheritance.[26] Ellis Bent who was Judge-Advocate during Governor Macquarie's time granted equitable relief where appropriate, although he had no specific statutory authority to do so.[27] The Civil Supreme Court created under the second Charter of Justice in 1814 was declared among other things to be a Court of Equity having equitable jurisdiction. Section 24 of the Australian Courts Act 1828 (Imp), which applied in Australia by paramount force, was applicable to New South Wales as well as Tasmania, Victoria, Queensland and the Australian Capital Territory as they later emerged out of New South Wales. It provided that all laws and statutes in force in England on 25 July 1828 were to be applied "so far as the same can be applied". The Supreme Court of New South Wales founded in 1823 (which continues to this day) was a creature of statute and the royal prerogative. Its statutory parent was the New South Wales Act 1823.[28] The 1823 Act declared it lawful for the King to establish a court of judicature styled "the Supreme Court of New South Wales". The Act defined the principal jurisdictions of the Court, largely by reference to English models. Jurisdiction at common law was assimilated to the civil and criminal authority of the Judges of Kings Bench, Common Pleas and Exchequer in England. As a court of equity, the Supreme Court was to have the equitable jurisdiction exercised by the Lord High Chancellor within England. In 1828, this last grant of jurisdiction was supplemented by adding "and all such acts matters and things can or may be done by the said Lord High Chancellor within the realm of England in the exercise of the common law jurisdiction to him belonging".[29] This neatly makes my point that procedural and remedial fusion in England started long before the Judicature Act 1873 (UK). For New South Wales the systems of common law and equity were never, as in England, to be administered by separate courts, but always by one and the same Supreme Court. But procedures and doctrines remained distinctive. A single judge wearing his equity wig could issue a common injunction directed at the prosecution or enforcement of common law proceedings or judgments pending before one of his brethren or in the Supreme Court generally. A line was however firmly drawn when in 1882 Manning J purported to grant an injunction restraining certain proceedings pending an appeal to the Privy Council from a Full Court decision in a matter involving no grounds of equity. A Full Court was convened and Martin CJ gave his judicial brother a ticking off in the following terms:[30] "This was a very singular state of things ... The superior authority assumed by the Primary Judge to control the action of the Court cannot be submitted to for one moment, because, if it were allowed in this instance, we do not know where it would stop. We should find it applied in cases which altogether depend upon the common law principles, and which ought to be disposed of in a common law Court. His Honour is no more than a member of the Court. When sitting in equity in a suit disclosing equitable grounds, he would have the power exercised by him in this instance. But, where no such case was before him, he had no such power, still less had he a right to express an opinion condemnatory of the course taken by the Court in any case. I regret that His Honour has not only arrogated this position to himself, but that he should have gone out of his way to endeavour in an elaborate manner to throw discredit upon the judgment of the Court in a case triable only at common law." All judges of the Supreme Court of New South Wales were vested with common law and equity jurisdiction. However, readiness and capacity to hear equity cases were largely dependent upon the individual judge's experience at the Bar, his learning and enthusiasm. For some judges, equity work went into the "too hard basket". The twice amoved John Walpole Willis fought to do these cases, going so far as to propose a separate Equity Court under his control as "Chief Baron in Chancery". His colleagues and the Governor demurred.[31] The 19th century judges in New South Wales were well aware that law and equity were different systems, each with their different procedures. Certainly by the 1840s any thought of adopting a single procedure was abandoned. English court dress, precedents and practice came to be followed with as much rigour as colonial conditions allowed. The Privy Council also curbed centrifugal tendencies, as elsewhere throughout the Empire. English reforming statutes were followed and adopted for use within the single Supreme Court. In 1850, the Full Court of the Supreme Court of New South Wales in Bank of Australasia v Murray[32] declined to grant any relief to a plaintiff who had proceeded by bill in equity instead of at common law. There the matter rested until the Queenslander Sir Samuel Griffith became the first Chief Justice of the High Court of Australia in 1903 (see below).[33] The substantive and procedural rules pertaining to matters on the common law and equity "sides" of the Supreme Court of New South Wales operated in separate and seldom intersecting spheres, albeit administered by a single Supreme Court. The size of the Court never rose above seven in the 19th century. The shortage of judges skilled in equity and mid-century delays in handling equity matters actually encouraged moves to differentiate the Equity side of the Court. A Primary (later Chief) Judge in Equity was designated. There was even a proposal to create a separate building for Equity. The fusion reforms of the English Judicature Act 1873 were resisted, although the judiciary and profession were divided on the issue. Differing analyses of the nineteenth century milestones are offered by Dr J M Bennett in his many writings on the topic[34]and in an excellent Macquarie University Legal Research Thesis (regrettably still unpublished) by Justine Eloise Rogers, Legal Argument and the Separateness of Equity in New South Wales 1824-1900.[35] Ms Rogers has, in my view, convincingly challenged Bennett's thesis that the failure to achieve substantive fusion from the springboard of a single Supreme Court represented a lack of will or possible misreading of the Charter of Justice on the part of the 19th century judges. Echoes of the nineteenth, twentieth and twenty-first century debates about fusion and its consequences surfaced as early as the first volume of the Commonwealth Law Reports. In McLaughlin v Fosbery[36] the High Court refused to overturn an order of the New South Wales Chief Judge in Equity staying all proceedings on an action for damages for assault and false imprisonment. The underlying dispute related to the confinement of the appellant, a lunatic, on the basis of an order by his committee. The High Court held that the Supreme Court ought to have stayed proceedings in the exercise of its inherent jurisdiction to stay vexatious actions, ie reliant on the exercise of common law jurisdiction. It was therefore an error that the stay of the common law action had been granted by the Chief Judge in Equity in reliance on (Equity) lunacy jurisdiction. Since, however, the Full Court of the Supreme Court had power on appeal to disregard formal defects and irregularities in the proceedings, the High Court decided by majority to do the same. Accordingly the appeal was dismissed. Griffith CJ (speaking for himself and Barton J) explained that the Supreme Court of New South Wales was:[37] ".... one Court, having under its original constitution all the powers which the Courts of Chancery and the Common Law and Ecclesiastical Courts had in England. Every Judge of the Court has the powers and authority of a Judge of the Court, and his powers are not in fact or in law impaired if he erroneously attributes the source of any particular power to the wrong Statute .... All powers of the Supreme Court of New South Wales are derived from Statute, and, in one sense, there are as many jurisdictions as there are Statutes conferring jurisdiction. But in another, and the truer sense, the jurisdiction of the Court, qua Court, is single, and an order of the Court made within its jurisdiction, in the sense that it is made by virtue of the authority vested in the Court by law, cannot be impeached merely because the formal documents describe it as made under a Statute different from that which actually confers the authority. If, as was formerly the case in England, but was never the case in New South Wales, the general judicial power of the State were distributed among several different Courts, an order of one Court not within its province could not be supported by showing that it could have been made by another Court. But this argument is not applicable to a single Court in which all the judicial power of the State is vested." O'Connor J dissented strongly, stating:[38] "It is said there is only the one Supreme Court invested with both common law and Equity powers, and that it is always open to the Court to apply any of its powers to facts that come before it. It is true that there is only one Supreme Court invested with all these powers, but ever since the establishment of the Court under the Charter of Justice its powers in Equity and its powers at common law have been exercised by separate divisions of the Court - separate not only in name and form, but administering in many respects different systems of jurisprudence. In many Statutes of this State the distinction is recognized. Take as an example, sec 252 of the Companies Act, under which the rights of an applicant may vary considerably according as his application is made in the common law or in the Equity jurisdiction of the Court. It may or may not be convenient or necessary to have this separation of jurisdictions. That is not a matter for us to consider. The separation of jurisdictions exits, not as a mere matter of form or of headings, but as a substantial separation of different systems of jurisprudence, and so long as it does exist the Supreme Court could not, and would not, apply in the exercise of the one jurisdiction the principles of the other." Griffith CJ's references to the universal judicial power to prevent abuse of process is interesting. This now frequently encountered judicial power is universally available to all courts to thwart a broad and undefined band of procedural and substantive chicanery.[39] Many fields in which it now operates would once have been the sole province of Chancery. This is one of many examples of developments in the general law that represent a form of substantive fusion where a composite principle claiming no particular derivation now covers the field. By 1910 Griffith CJ abandoned any thought he may have had of using the single Supreme Court of New South Wales as a springboard for procedural fusion. In Turner v The New South Wales Mont de Piete Deposit and Investment Co Ltd,[40] the High Court held unanimously that the traditional separation of law and equity within the Supreme Court of New South Wales had to be respected. Without additional statutory modification it was not possible to permit an equitable replication setting up an equitable title in a common law action in which the plaintiff commenced by pleading his legal title. Griffith CJ grumbled about "supposed ancient technicalities of the law, which are said to linger in New South Wales, after they have been abolished in, I believe, all the rest of His Majesty's dominions".[41] Similar comments were advanced by O'Connor J (at 549) and Isaacs J (at 554), without quite so much grumble from O'Connor, the former New South Wales practitioner and Acting Judge of the Supreme Court of New South Wales. Statutory reforms were introduced to the Supreme Court of New South Wales in stages, culminating in the fusion of administration of law and equity and adoption of a common pleading system with the Supreme Court Act 1970. Section 57 of that Act commands the Court to "administer concurrently all rules of law, including rules of equity". There were other borrowings from the English provisions.[42] The early stirrings in the High Court nevertheless suggest that a bolder resort to existing judicial power might have broken the waters of separation for New South Wales, which had by 1900 become a legal Jurassic Park. They certainly affirm my proposition (developed below) that any distinction between law and equity is non-jurisdictional. The orthodoxy that redescended in 1910[43] indicated the need for additional statutory procedural fusion, but it did not condemn Law and Equity to permanently separate spheres of existence. The High Court of Australia would return to the integration of the general law in Australia after the last procedural barriers had been knocked down with the passing of the Supreme Court Act 1970 in New South Wales. When it did, it brought in some (probably unnecessary) constitutional guns.[44] Substantive fusion achieved by the Judicature Act Section 25 of the Judicature Act 1873 (UK) also directly fused substantive law and equity. On the orthodox view, it did so, only to a limited degree. It is, however, possible to see s25(11) as the statutory capping of a process that had started in 1615. Parliament confirmed Equity's precedence as a matter of last resort (if Judges of a single Court could not sort out remedial and doctrinal differences between Law and Equity by their own devices). The side-note to s25 was "Rules of law upon certain points". Subsections (1) to (10) dealt with particular conflicts between law and equity in respect of the same subject matter. The "conflicts or variances" thereby resolved related to assignments of choses in action, stipulations as to time in contract, the custody of infants, equitable waste, merger of estates, administration of insolvent estates and actions for trespass by mortgagors in possession. Resolution was generally in favour of Chancery's rule, but a statutory amalgam of law and equity was devised as regards assignments. The miscellany of topics is itself testimony to the extent to which the two systems were treading on each other's toes when administered separately. Section 25(11) was the catch-all, providing: Generally in all matters not herein-before particularly mentioned, in which there is any conflict or variance between the rules of equity and the rules of the common law with reference to the same matter, the rules of equity shall prevail. By the time that New South Wales took its great leap forward to the 19th century by enacting the Supreme Court Act 1970[45] most of the matters covered by s25(1)-(10) of the Judicature Act 1873 (UK) had already been addressed by the New South Wales Parliament. It was only thought necessary to enact a modern variant of subs(11).[46] The framers of the English statute thought that s25(11) would have little work to do. It turned out that they underestimated the situations in which later courts would discover direct "conflict or variance" between law and equity "with reference to the same matter". Later caselaw disclosed several topics where equity and law were seen to produce different outcomes on the same issue, areas where the pre-1875 Chancery rule prevailed in accordance with the subsection.[47] Section 25 was never intended to do away with the distinction between law and equity. Maitland in his Equity Lectures[48] was however at pains to stress the general absence of conflict between law and equity, thereby explaining the minimal scope of s25(11). He expounded Equity as a gloss on the common law, albeit a collection of appendices between which there was no very close connexion. Using a Biblical metaphor, he stated that: "Equity had come not to destroy the law, but to fulfil it. Every jot and every tittle of the law was to be obeyed, but when all this has been done something might yet be needed, something that equity would require..." He illustrated his point by reference to the law of trusts. There was a flaw in Maitland's gloss metaphor, with its message of continuing confluence between law and equity, like Ashburner's reference to "two streams of jurisdiction [which], though they run in the same channel, run side by side and do not mingle their waters".[49] Congruence, stemming from Equity's supremacy before and after 1875, was a more accurate picture than confluence. Hohfeld answered Maitland in a famous article on "The Relations between Equity and Law" when he pointed out that: [50] "As against the proposition that there is no appreciable conflict between law and equity, the thesis of the present writer is this: while a large part of the rules of equity harmonise with the various rules of law, another large part of the rules of equity - more especially those relating to the so-called exclusive and auxiliary jurisdictions of equity - conflict with legal rules and, as a matter of substance, annul or negative the latter pro tanto. As just indicated, there is, it is believed, a very marked and constantly recurring conflict between equitable and legal rules relating to various jural relations; and whenever such conflict occurs, the equitable rule is, in the last analysis, paramount and determinative. Or, putting the matter in another way, the so-called legal rule in every such case has, to that extent, only an apparent validity and operation as a matter of genuine law. Though it may represent an important stage of thought in the solution of a given problem, and may also connote very important possibilities as to certain other, closely associated (and valid) jural relations, yet as regards the very relation in which it suffers direct competition with a rule of equity, such a conflicting rule of law is, pro tanto, of no greater force than an unconstitutional statute." On this basis, Hohfeld wrote, s25(11) had been added only out of an abundance of caution. Its fundamental idea was "anything but a novelty".[51] Arguments that the Judicature Act directly changed substantive rules (outside the working out of s25) have been rebuffed on the few occasions that they surfaced. One of the earliest examples is Britain v Rossiter[52] where the English Court of Appeal rejected a submission that the Judicature Act permitted damages to be awarded with respect to an unwritten contract where the conduct of the parties did not attract the doctrine of part performance that triggered resort to Lord Cairns' Act as a source of the power to award damages. The substantive doctrine of part performance as a key to equitable remedies was in truth too firmly fixed to justify further expansion of an already bold doctrine without clear legislative endorsement. But it was or should have been equally clear that the Judicature Act did not forbid the continuing development of law and equity, including development in the direction of integration of principles, if the single Court otherwise considered this an appropriate application of earlier precedents. Walsh v Lonsdale was decided in 1883. Unloved for its boldness by MGL and others, it nevertheless became undoubted authority for the proposition that a specifically enforceable agreement for lease would, in a Judicature Act court, be regarded as between the original parties as the equivalent of a lease at law.[53] There is a more specific corollary to the proposition that s25(11) and its counterparts have limited direct effect. Outside cases falling within its scope, courts are free to develop the law in a principled manner by preferring legal rather than equitable analogies or precedents. This was the stance affirmed by the English Court of Appeal as early as 1879 in procedural matters.[54] A much more recent example is AMEV-UDC Finance Ltd v Austin[55] where, in the area of penalties, modern equity chose to follow the common law and, with the advent of the Judicature System, allow a discordant stream of equitable doctrine to "wither on the vine"[56] in the interests of coherence in the law generally. As I pointed out in Harris,[57] many of the instances when this borrowing has occurred (before and after 1875) are parked in Equity texts under the rubrics of the maxim "equity follows the law" or equity's "concurrent jurisdiction". I shall later suggest areas where similar developments might be expected. Section 25(11) did not purport to stop or even affect the development of legal and equitable doctrine. Nothing in the Judicature reforms precluded the continuing trend towards a more integrated, internally-consistent and principled system of general law, a task assisted by progressive steps (before and after the Judicature Act) taken towards a single system of court administration, procedure and remedies. Despite his attitude to s25(11), Maitland in his lectures nevertheless forecast that: [58] "The bond which kept [these doctrines] under the head of Equity was the jurisdictional and procedural bond. All these matters were within the cognizance of courts of equity, and they were not within the cognizance of the courts of the common law. That bond is now broken by the judicature acts. Instead of it we find but a mere historical bond - 'these rules used to be dealt with by the Court of Chancery' - and the strength of that bond is being diminished year by year. The day will come when lawyers will cease to inquire whether a given rule be a rule of equity or a rule of the common law: suffice that it is a well-established rule administered by the High Court of Justice." Maitland's prediction is yet to be fulfilled, although matters have hastened in the last couple of decades for reasons discussed below. For the moment, I draw attention to his observation that the procedural coalescence of the separate courts would be as much a trigger for fusion as s25(11). Fusion fallacies It is not possible to discuss fusion without reference to the notion of "fusion fallacy" that is important to some Equity scholars. The concept must be taken seriously, whether it represents an orthodox category, a fallacy in its own right, or those scholars' version of "ghosts of the past [that] stand in the path of justice clanking their medieval chains [for which] the proper course for the judge is to pass through them undeterred".[59] To those who believe in them, fusion fallacies are real and dangerous. The successive editions of Meagher, Gummow & Lehane present them as a rogues gallery invented by offending jurists who deserve to be pilloried to deter others. The current edition of MGL commences its discussion of the topic[60] by pointing (correctly) to the minimalist and largely procedural intent of those responsible for drafting the English Judicature Act. MGL then identify as "fusion fallacies" instances of change or development in relation to legal or equitable doctrines not deriving from s25 or its counterparts, yet "stated or implied" to be a consequence of the Judicature system and thus dictated by statute. If one puts proper emphasis on the word "dictated"[61] there is little difficulty with this category of fallacy. I acknowledged it in Harris v Digital Pulse Pty Ltd.[62] But it is something of a non-existent bogeyman. In fact, the only authorities cited by MGL that contain reasoning invoking the Judicature Act to justify a change in doctrine are Sir George Jessel's short-lived decision in Redgrave v Hurd[63] where he relied upon the Judicature Act to justify damages for innocent misrepresentation; and the obiter dictum by Eve J in Re Pryce[64] that the Act precluded an action for damages for breach of a voluntary covenant. On my reading, all of the other examples provided by the learned authors involve applying common law concepts to once exclusively equitable situations (occasionally doing the reverse) in contexts where the direct role of the Judicature Act is neither stated nor genuinely implied. Often this occurs with a relationship that has been within the cognisance of both law and equity for centuries but over which Equity claims some hegemony.[65] The cases held up as fusion fallacies may or may not have been correctly decided, but they should not be slated undeservedly for this type of fallacious reasoning. Furthermore, the cases are usually of such standing that they ought to be accepted as a point of departure to which the further development of legal principle must accommodate itself. To illustrate my point, Hedley Byrne & Co Ltd v Heller & Partners Ltd[66] is criticised[67] for borrowing from Nocton v Lord Ashburton[68] the idea that compensation may be awarded against a fiduciary who causes loss due to equitable fraud and applying that concept to explain an award of damages for misleading advice. If this is a fusion fallacy, the undoubted status of Hedley Byrne suggests that it may be time to move on, or at least to see this example as an indication that the fusion fallacy idea itself may be flawed. But the point I wish to emphasise is that to invoke the analogy of Nocton is not to state or imply (false) reliance on the Judicature Act. Nocton itself is treated as pure orthodoxy by MGL and others. It occupies a significant place in the history of fusion, but that is a separate story addressed below. It is, I suggest, irrelevant, unhelpful and misleading to criticise the Hedley Byrne doctrine by asking what provision of the judicature legislation permitted the recovery of common law damages for negligence merely because a breach of fiduciary duty had been established.[69] MGL's critical analysis of Cuckmere Brick Co Ltd v Mutual Finance Co Ltd (mortgagee's duty when exercising power of sale),[70] the caselaw as to directors' duty of care,[71] exemplary damages for breach of all categories of fiduciary duty,[72] damages in equity[73] and the doctrine of Walsh v Lonsdale[74] do not support their thesis that these cases illustrate a fusion fallacy based upon wrongful application of the Judicature Act. This last proposition needs slight qualification as regards a small portion of the reasoning in Walsh v Lonsdale, but once again one is left to ponder about the nature of the supposed categorical error in such a well established doctrine.[75] Cuckmere Brick has never been accepted as good law in this country. This is not because of fear of fusion fallacy, but because its formulation of the duty of "care" does not accommodate the true nature of the mortgagee's power of sale in the mortgagee's own interest. MGL reveal their slide into a different type of fusion fallacy, where they state that (emphasis added):[76] "The fusion fallacy involves the administration of a remedy, for example common law damages for breach of fiduciary duty, not previously available either at law or in Equity, or in the modification of principles in one branch of the jurisdiction by concepts which are imported from the other and thus are foreign, for example by holding that the existence of a duty of care in tort may be tested by asking whether the parties concerned are in fiduciary relations." The learned authors give the cases cited in my previous paragraph as examples of this phenomenon. They do not in terms brand the Mareva order as a fusion fallacy, but the jurisdictional language used by them to criticise the concept[77] and the categorical nature of their criticism of this now universally accepted right and remedy indicates to me that they would include it in their list. Perhaps they refrained out of concern that such labelling would raise eyebrows about the "fusion fallacy" concept itself, given that Mareva orders have been endorsed four times by the High Court of Australia in recent years.[78] The fusion fallacy concept is often discussed in the language of Ashburner's metaphor referring to "two streams of jurisdiction".[79] But this language has its own built-in circularity of reasoning, because talk of want of jurisdiction (or even lack of power) signals a limitation that the body charged with the administration of the relevant principle is never free to cross. Herein lies a major problem for this "fusion fallacy" concept, because the law/equity divide ceased to be jurisdictional in this sense in New South Wales at least as early as 1814 and in England in 1875 when the Supreme Court of Judicature was created there. Let us however permit the fusion fallacy believer to recast want of "jurisdiction" as a reference to the historical truth that there were some rights and remedies incapable of being obtained (even within a pre-Judicature single Supreme Court of New South Wales) unless claimed in a common law action or an equity suit respectively. If you filed the wrong process the Court would refuse to vindicate the extraneous right (or defence) and the litigant would be forced to commence fresh proceedings on the correct "side" of the Supreme Court (in New South Wales) or in the correct Court (in pre-Judicature Act England). This is really the sense in which Ashburner, Pettit and MGL speak of want of "jurisdiction" or power in the present area of discourse. But, if the Judicature Act did anything, it made this problem redundant by arming a single Court with a plenitude of statutory jurisdiction, with access to every conceivable remedy and jurisdiction to hear and determine all manner of disputes. MGL's version of fusion fallacies goes well beyond substantive errors of law falsely attributed to (or said to be "dictated" by) the Judicature Act or its counterpart elsewhere. They are trying to make something special out of battles lost long ago that are no more than contestable decisions that ignored, overruled or blended earlier precedents. It is simply unhelpful to enter a debate about legal principles in 21st century Australia with such outdated tools whose root of title in England is now over 125 years old. Too many conveyances, consolidations, subdivisions, statutory dealings and other events have intervened to make it helpful or even relevant to think of how the doctrine or remedy might have stood in England in 1875 as regards the separate legal system that putatively administered it exclusively before then. To harp about this particular class of "fallacy" is really a smokescreen for pursuing a goal to maintain the historical distinction between law and equity for its own sake. It is, in fact, harmful to legal development if it causes a judge to refrain from considering borrowing or blending ideas that may have been exclusively the province of one system in the distant past. Post-Judicature Act developments encouraging more complete harmonisation The fusion of administration, pleading and procedure presented opportunities to bold advocates to press new claims in a single proceeding and armed judges with tools to break down historical barriers and mindsets. But it would be wrong to conclude that the present-day relationship between law and equity is no more than the working out of the Judicature Act reforms. Several additional factors came into play in the second half of the 20th century. First, there was the long-term impact of legal realist thinking and the more functional approach that often went with it. Influential judges like Lord Atkin and Lord Wright challenged black-letter ways of viewing precedent. Others like Lord Diplock sought to craft a more ordered legal universe. Others like Sir Anthony Mason encouraged examination of non-English precedents. Others, like Lord Denning and Lord Cooke, "pushed the envelope" in their quest for rationality and indivualised justice. Others like Deane J quietly slipped natural law concepts into legal discourse. Academic lawyers were openly cited for the first time, some of them becoming judges in the ultimate courts of appeal. Some of those academics, like Professor Birks, forced judges to respond to a vigorous modern debate about the structure of the law of civil obligations. These judges and academics have all drawn their share of criticism, especially from those wedded to preserving Equity intact. But their influence in debate about the framework of the law has been significant, to some degree because their more conservative brethren have tended not to enter such structural debates, proclaiming Equity's pragmatism as a virtue as well as an explanation. I do not, however, imply that any judge or commentator stands in a particular "camp" or even that bright line camps exists. (My recently retired colleague, Mr Justice Meagher, may be the exception for his uncompromising certainty on these issues. He would not, I think, like to be thought of as having a tenderly nuanced view on the topics addressed in this paper.) In recent years, Gummow J has made extremely important contributions about the continuing role of equitable principles and the distinctiveness of Australian Equity, which (as he points out) is much more comfortable than its English counterpart with discretionary remedialism.[80] These matters may readily be accepted. Peter Birks' sharply defined roadmaps of the universe of civil obligations with their emphasis on rights and not remedies have little prospect of acceptance in this country. This, however has little bearing on the "fusion debate", which is no more concerned with dumbing down the sharp edges of the law of trusts, tracing, injunctions, unconscionability etc etc than with restricting the nuanced and principled development of the law of patents, negligence or real property. My point is that a proper understanding of the law concerning any of these topics is actually hindered by viewing them as if a "common law" or "equity" label revealed anything in common or even useful about the principles highlighted for discussion. Gummow J has generally pressed for coherence and rationality, emphasising the importance of substance over form and calling for proper acknowledgement of the role of statute law in shaping the general law and its structures. In his words, "The spirit of the times is unfavourable to the preservation of existing legal fictions and hostile to the creation of new ones."[81] These developments in legal thinking at the appellate level mean that traditional Equity cannot presume that an ancient pedigree is enough to command recognition, or even attention, in a post-Judicature Act world. Secondly, and of particular significance in Australia, is the recent assertion by the High Court of the unity of the Australian legal system, especially the unity of the "common law of Australia".[82] This concept appears at times in a constitutional garb, but its main reinforcement stems from the Court's legitimate assertion of primacy and independence as the ultimate arbiter of legal disputes in this country. A badge of that unity is the frequently cited notion of coherence, a basal legal norm that assumes and works towards integration of legal principles.[83] Integration requires the general law not to be at odds with constitutional and statutory provisions and principles, and not to be at odds with policies found within itself. Coherence sets the law the aim of "devis[ing] principles which provide a way of solving disputes between private persons (including of course corporations); rivalry between principles, as opposed to a study of their interaction and interrelation, is unlikely to be productive".[84] A third development has been the march of statute law (especially federal statute law) into the heartland of the general law, Equity included. In some key areas, this has made many of the traditional law/equity distinctions simply irrelevant. For practical purposes, the Trade Practices Act 1974 (Cth) and the cognate State and Territory Fair Trading Acts have created several equitable redundancies, with their overarching norm of proscribed misleading or deceptive conduct and their smorgasbord of remedies, old and new. The Corporations Act 2001(Cth) has rendered most of the duties of company directors and officers statutory, again with a comprehensive array of civil and criminal remedies. There is a limited preservation of the general law, but its impact is likely to be minimal.[85] In Rich v Australian Securities Investments Commission [86] the High Court was at pains to scotch the notion that there is any meaningful distinction between "punitive" and "protective" functions with respect to a statutory power to impose a range of civil sanctions on delinquent company officers. The distinction was described as "elusive" at best and suffering the same difficulties as attempts to classify all proceedings as either civil or criminal.[87] This suggests to me that it is unhelpful to think of the vast corpus of "Equity" as definable by reference to such concepts, at least in the area of company officers.[88] A lawyer who failed to avail his or her client of the mechanisms and added protections of statutory assignment of a cause of action (compared to an assignment recognized only "in equity") would be a prime candidate for a professional negligence claim. The nearly ubiquitous Torrens system attracts the same comment, as well as the observation that its detailed regulation of priorities in interests in land overreach much traditional equity learning. Detailed rules as to caveats have pushed interlocutory injunctions to the margins in that field. I am not suggesting that "equitable" rights and remedies are excluded altogether from this statutory world. As part of an integrated general law they will continue to play a role, but along with the tort of deceit, contractual claims and statutory claims that do not have supporters claiming that special recognition is vital to an understanding of their elements or the structure of law itself. Statutes may also exercise gravitational influence upon general law doctrines, and Equity has not been immune from this process. Fourthly, most modern textbooks present their topics systematically, discussing rights in broadly-recognized categories and proceeding to address all appropriate remedies. The practitioner exploring a contract issue will go to authorities such as Treitel and Carter for a complete exposition of contractual rights and remedies (statutory, common law and equitable; personal, proprietary or restitutionary). Likewise with specialist areas like trade practices, real property, corporations law, industrial law, defamation, agency and intellectual property. Procedure texts and services will be consulted for practical and tactical concerns. This is not to imply that the treatment of equitable rights and remedies in Equity texts is deficient, but the searcher is necessarily taken away from the particular context of interest. Of course the Equity texts may offer analogies as they present doctrines and remedies across different topics of law as perceived by the modern practitioner. But in a sense this reinforces my thesis about the mutual interaction of all sources of law and the undesirability of hiding it away under increasingly irrelevant historical categories. Some Equity texts (most notably MGL) are seeking to meet readers' demand by including discussion about common law and statutory remedies that have superseded, or that run in parallel with, "equitable" remedies. Again, this illustrates my thesis. Fifthly, there has been the direct challenge from the restitution theorists, most notably Goff, Jones and Birks. They have sought to explain a sizeable portion of traditional Equity under the concept of unjust enrichment and to use this as an analogical bridge to related common law doctrines and remedies. Every edition of Goff and Jones, The Law of Restitution[89] commences: "The law of restitution is the law relating to all claims, quasi-contractual or otherwise, which are founded upon the principle of unjust enrichment. Restitutionary claims are to be found in equity as well as at law." Unjust enrichment theory may come in several varieties, but all offer a theoretical template for seeing workable analogies between "common law" and "equitable" doctrines addressing a wide range of frequently encountered legal relationships. Aspects of the template may be contestable, but the law-equity crossovers are already acknowledged by the Equity textwriters, who (usually) deal with the topics by acknowledging the related, parallel or subsumed "common law" principles covering approximately the same field. I have written recently about these developments in Australian law, drawing particular attention to restitution theory's offer to explain and integrate areas where traditional Equity's contribution is incomplete, generally unprincipled and at times discordant (vis a vis a near parallel common law right).[90] Areas that have recently developed or are in the process of developing in this direction include the recovery of money paid under mistake, unauthorized use or detention of land and goods, improper pressure, recovery of misdirected or stolen funds and non-contractual claims for contribution.[91] A related development, but worth separate mention, is the recent but now orthodox insight that tracing and following are universally applicable processes concerned with identifying property as it changes various forms and passes through various hands. General law rules are involved, most notably the principle that money is currency, with protection afforded to persons who give value without notice of defect in title. Tracing and following operate independently of the (legal and equitable) causes of action to which the processes are appurtenant. The scholarship of Professor Lionel Smith and the judicial scholarship of Lord Millett have been particularly influential in this area.[92] We now see that there is nothing peculiarly legal or equitable about tracing and following, but that these processes may be the prelude to the application of "legal" and "equitable" remedies and rights, both personal and proprietary, designed to vindicate the title of the owner who has lost possession of something of value, often through a species of "legal" or "equitable" (but most likely statutory) wrongdoing.[93] This area of discourse leads inevitably into discussion of notions of property, a topic addressed by the House of Lords in Foskett v McKeown. It was in this area that the late Professor Birks took such a categorical stance in recent years, with his passionate distrust of the discretionary remedialism that is the law in this country.[94] Much is still to be resolved about the remedial constructive trust as both a personal and a proprietary remedy, but if there is one area where Equity has placed its discretionary, pragmatic yet principled mark in Australian law, it is this one.[95] It can also be stated with confidence that Australian law no longer subscribes to the view, stated in Re Diplock[96] and awaiting its coup de grace in England, that a fiduciary relationship must first be identified before an "equitable" remedy based on tracing or following can be granted. These are all significant developments, but none are inconsistent with viewing legal doctrine as a unified whole, understood meaningfully without reference to pre-1873 notions. Finally, there occurred in the latter part of the 20th century a belated but inevitable realisation that the complete administrative and procedural fusion effected by the Judicature Acts has changed life forever. Lord Diplock bemoaned the fact that "the innate conservatism of English lawyers may have made them slow to recognise" the effect of fusing the two legal systems. Other jurisdictions, like Canada and New Zealand, were not as slow; and their generally pro-fusionist jurists have (like Lord Diplock) received strong rebuke from certain New South Wales quarters. Worldwide experience does however confirm that the greater the time lapse from a Judicature Act reform, the less important are the traditional law/equity distinctions. This is particularly so in the United States, despite a constitutional embargo there on complete integration, stemming from a preserved right to trial by jury in "suits at common law". Whether the distance of time breeds sloppy ahistoricity or puts things in their proper perspective will probably depend on whether the question is asked of a committed fusionist, a fusion-sceptic or a committed anti-fusionist. Damages in Equity: A case study The question of exemplary damages for breach of an exclusively fiduciary duty has been addressed recently in New Zealand,[97] Canada[98] and Australia[99] and has proved a catalyst for discussion about the fusion of law and equity. Fusion-related questions arise if only because most "fiduciary relationships" bear "common law" and "equitable" faces on opposite sides of the same coin and because of the availability of parallel rights and remedies "at common law", "in equity" or under statute. But the wider topic of damages in equity has been a fascinating touchstone for developments over a century and a half that illustrate several points in the current debate. A trustee whose breach causes loss falls under an "equitable" obligation to make good the loss to the trust property, a duty to put the trust estate in the same position as if the breach of trust had not been committed.[100] The obligation was described by James and Baggallay LJJ as an "equitable debt or liability in the nature of a debt"[101] and by Street J as an "obligation to make restitution".[102] The former expression was used to emphasise the distinction between an obligation of Equity's creation and a (common law) specialty debt that would only arise if the trustee was bound by a covenant in the trust instrument that gave such effect to a breach thereof.[103] But Equity's curious choice of the word "debt" showed that it was borrowing an idea from the common law, with its emphasis on the immediacy of the obligation and the absence of any requirement to prove any more than unauthorized conduct. Street J brought out this point in Re Dawson, when he stated that "considerations of causation, foreseeability and reasonableness do not readily enter into the matter" [104] and when he observed[105] that: "The principles embodied in this approach do not appear to involve an inquiry as to whether the loss was caused by or flowed from the breach. Rather the inquiry in each instance would appear to be whether the loss would have happened if there had been no breach." The "debt" analogy was Chancery's way of saying that relief would follow as of course if loss were proved. It required statutory intervention before the strictness of the old Chancery law was lifted by enactment permitting the court to relieve a trustee who had acted honestly, reasonably and in circumstances fairly justifying excusal. This was an area where remedial Equity was every bit as stringent as the common law. In its original form, Lord Cairns' Act conferred power on the Court of Chancery to award damages in addition to or in substitution for an injunction "in all cases in which the Court of Chancery has jurisdiction to entertain an application for an injunction". This statutory power enabled the Court to give damages even where they were unavailable in a court of common law, because, for instance the injury was merely threatened or apprehended or where the right was purely equitable. The Act was widely adopted.[106] In 1883 the statute was repealed in England.[107] The omission may have been inadvertent and the provision was reenacted there in 1981. In 1924 the point was taken, in Leeds Industrial Co-Operative Society Ltd v Slack,[108] when damages were sought in lieu of an injunction quia timet. The House of Lords brushed aside the submission that power to award such damages had gone with the repeal of Lord Cairns' Act in 1883. The reasoning of some of the Law Lords is an extremely forced reading of certain savings clauses and it has been widely criticised.[109] Lords Sumner and Carson proceeded directly to the same conclusion on the basis that the Judicature Act rendered Lord Cairns' Act unnecessary.[110] Some may see this as a gross fusion fallacy, but it again illustrates my point about such "fallacies" being discoverable in all the right places. Pettit's Equity and the Law of Trusts[111] and MGL[112] cite Goff J's statement in Grant v Dawkins[113] in which he doubted Chancery's power to award damages before the passing of Lord Cairns' Act in 1858. MGL also states[114] that "Equity had no power to award damages as they were known at law". Sir Frederick Jordan in his highly influential Chapters in Equity in New South Wales[115] stated that: "Until Lord Cairns' Act [Chancery] had no power to award damages". These learned authors treat damages and "equitable compensation" as falling within categorically distinct spheres, a proposition that I question below. But more significantly, the researches of Peter McDermott have exploded the issue directly. His article on the "Jurisdiction of the Court of Chancery to Award Damages"[116] discloses statutory and non-statutory awards of damages well prior to Lord Cairns' Act. He demonstrates that by the early 19th century Chancery would award or assess damages (at law) in appropriate instances, where it had the machinery to do so and if it considered that its equitable jurisdiction had been genuinely invoked in the first place.[117] There was a hardening of attitude under the Chancellorship of Lord Eldon in this as in several other aspects of Equity,[118] justifying Atiyah's observation that: "The Court of Chancery itself went into a period of decline from which it never wholly recovered. Partly, if not directly, this decline was due to the purely fortuitous nature of Lord Eldon's disposition".[119] Chancery's unwillingness to award damages during the early 19th century was seen by some writers at the time to have been jurisdictional, in the sense of establishing an absence of power.[120] But Turner LJ reasserted Chancery's power in 1855 in Phelps v Prothero[121] and there were American decisions to similar effect.[122] McDermott[123] cites several other decisions, including those of Shadwell VC, Sir James Knight Bruce VC, Lord Langdale and Owen CJ in Eq as to Chancery's inherent power (in a proper case) to award damages rather than compel a creditor to have recourse to law, or as ancillary to equitable relief. In Raineri v Miles,[124] Lord Edmund-Davies saw Phelps as authority for the proposition that, upon a vendor's default, a purchaser who proceeded in a court of equity "could recover damages whether or not he had also sought specific performance". His Lordship added:[125] "The fact is that for some years before the Judicature Acts of 1873 and 1875 the common law and Chancery courts had been mutually making increasingly friendly overtures, and these had modified the attitudes of each." This observation is echoed in the judgments of the Supreme Court of Canada in Canson Enterprises Ltd v Boughton & Co.[126] Like Harris, this was a case about remedies flowing from breach of "fiduciary" duty. There were significant differences in opinion, but the whole Court recognized that discriminate borrowing between common law and equitable concepts was appropriate.[127] In McLachlin J's words "we may take wisdom when we find it, and accept such insights offered by the law of tort... as may prove useful." In Raineri, [128] Lord Edmund-Davies gave examples of the "assimilative process" that was accelerated by the Common Law Procedure Act 1854 and Lord Cairns' Act 1858. In King v Poggioli[129] Starke J had spoken to similar effect. The provision in Lord Cairns' Act enabling the Court of Chancery to award damages for breaches of obligations not sounding in damages at law was all the more curious in light of Chancery's longstanding power to require defaulting trustees to do just that. Yet the first clear indication that Equity embraced an inherent power to award compensation with respect to breaches of fiduciary duty occurred in England with the seminal decision in Nocton v Lord Ashburton.[130] There is earlier authority in the Supreme Court of Victoria to like effect,[131] although the 1927 decision of Dixon AJ pointing this out in McKenzie v McDonald[132] is usually regarded as the root of title for equitable damages/compensation in this country. Nowadays equitable damages is so much a part of the landscape that it has its own textbook.[133] The principles relating to this remedy are not applied uniformly to all equitable obligations or all categories of breach, and they do not necessarily replicate the rules as to assessing damages at common law. For some categories of fiduciary relationships and in some situations at least the rules as to remoteness and the time of assessment of compensation are much stricter than for breach of contract. But this observation contributes little to the fusion debate. Different rules on these matters may apply as between intentional torts and the tort of negligence[134] and contractual damages are also nuanced and contextual.[135] Common law analogies may offer assistance in many situations (for example in understanding the normative approaches involved in most causation enquiries in the law). The massive academic and judicial debate about different categories of fiduciaries, much of it focussing on Target Holdings Ltd v Redferns[136] and Henderson v Merrett Syndicates Ltd,[137] suggests that the idea of holding a single "Equity" line on the approach to assessing compensation for equitable wrongs is both doomed and distracting.[138] One lesson to be derived from the late emergence of non-statutory equitable damages or compensation is pointed out by MGL.[139] There was really no need for Lord Cairns' Act to have conferred on Chancery the power to award "damages" for breaches of purely equitable obligations. In other words, the general law (then on its Chancery side) contained within itself the capacity to develop by providing this additional remedy. Another lesson is that the use of "damages" as an equitable remedy for infringements of equitable rights has legislative endorsement, with the consequence that judicial language to similar effect[140] should not be decried as a fusion fallacy. [141] Labels can operate as signposts, but they can also be misleading either because they may conflate separate concepts or (when different labels are seized upon as automatic indicators of distinctive legal concepts) because they may impede parallels or analogies being drawn (ie principled fusion). The brickbats are shared equally between the common law and Equity when one considers the proven capacity of words such as trustee, agent, trust property, fiduciary, damages, compensation and injunction to generate their own misleading fictions and confusion. Confusion as to whether company directors should be seen as "agents", thereby attracting entry to common law courts or as "trustees", thereby attracting entry to Chancery, offers an early example of the unhelpful dangers of labels and how perceiving differences that do not really exist and justifying them by a law/equity divide can be positively harmful.[142] This brings me to the issue of exemplary damages. My views are set out in Harris v Digital Pulse Pty Ltd, but they did not prevail in the New South Wales Court of Appeal. It is appropriate for me to leave it to others to analyse the reasoning in the three judgments. I content myself with the observation that it is satisfying that the disagreement within the Court did not turn on arid historical disputation about Chancery's traditional jurisdiction. Issue was properly joined as to the scope and function of remedies protective of fiduciary relationships, the gravitational pull of contractual and/or tortious principles for assessing damages generally and in relation to the very relationships involved, and the characterisation of such relationships by reference to their function and the analogy of contract.[143] What is the fusion debate all about? It will be apparent from what I have written that I share Lord Goff's view in Lord Napier v Hunter that:[144] "... our task nowadays is to see the two strands of authority, at law and in equity, moulded into a coherent whole ...." But it does not follow that historical differences between different concepts and principles are to be glossed over for the mere sake of simplicity or uniformity. If a doctrine can genuinely be described as equitable this may at least warn against insouciant or unprincipled fusing of doctrines. Equity in Australia is vibrant and in no way past the age of child-bearing. Justice Gummow's recent article "Equity: too successful?"[145] outlines a body of jurisprudence that is vibrantly self-assured and that appears much more comfortable with discretion and pragmatism than English Equity. But it does not follow that when judges administer "Equity" in Australia they are using different methods or applying different underlying values than when dealing with concepts deriving from the common law or litigation relating to statute law. Anthony Duggan warns against viewing appellate judges as having split personalities, applying different values and principles when deciding cases in equity, at common law and under statute. His thesis is that, despite the emphasis on altruism in the "new equity rhetoric", actual case outcomes really reflect efficiency concerns. Equity's promotion of "other regarding" behaviour is achieved by appealing to actors' self-interest, not their better nature.[146] He wrote in 1997. It is indeed possible to detect a trend towards a stricter view of unconscionability and even greater Equity deference to contractually negotiated (ie "common law") outcomes since then.[147] The process of greater integration has and will continue to gather pace to the extent that all branches of the general law use common concepts and common terminology (or at least realize that different language does not necessarily import different principles).[148] Our adversary system allows plaintiffs to put their best foot forward and to plead claims in the alternative. Properly advised, plaintiffs will still choose to press an equitable/common law/statutory right or remedy if it is in their interests and to seek to blend the best of all worlds if that helps too. But courts are not always obliged to go along with such a trisected view of the law. Parallel universes are not to be fostered for their own sakes. Defendants have rights too. And it is sometimes necessary or appropriate for the values inherent in one legal concept to mean that it takes primacy, or even occupies a field to the exclusion of others. In recent years, these sorts of issues have been addressed as regards the relationship of contract and tort,[149] contract and restitution,[150] negligence and defamation[151] and in other areas. Where remedies are seen as discretionary, principles have been developed to identify when they should issue. These various enquiries are assisted by reference to the policies found in the precedents for triggering legal recognition of the right or remedy. But they are hindered by glib and unhelpful labelling based upon categories such as "common law", "equity", "statutory". In Harris, Heydon JA and I expressed differing views about Equity's "punitive" function. I remain to be convinced that any overriding and helpful pattern can be detected at such a level of historical abstraction.[152] However, the accumulated judicial wisdom of the ages remains a starting (and usually finishing) point for decision-making, even at the appellate level. The tectonic plates under particular precedents shift slowly, even though pressure builds up in places. It is helpful to distinguish between rights and remedies in this area of discourse. As regards rights, law and equity may offer different legacies that plaintiffs may choose at will. If the discordance is so direct a "conflict or variance" as to engage s25(11) of the Judicature Act or its counterpart, statute decrees that Equity trumps law. But this provision is seldom engaged nowadays. Nevertheless, the general law has developed techniques for choosing and/or fusing traditional legal and equitable principles. Sometimes the legal and equitable rights overlap to such a degree that the appellate guardians of the general law are ashamed to recognize the existence of nearly parallel, but ultimately divergent universes. In those cases the better right is allowed to cover the field, bringing with it the associated doctrines that may distinguish it in detail from its legal or equitable cousin. Often the doctrine that prevails is that which developed more flexibly, ie usually that which was once fostered exclusively in Chancery. This phenomenon is discernible as regards the atrophying of the common law actions for account, contribution and recoupment. As regards the latter two "restitutionary" causes of action, courts have recognized that equitable principles now provide all the answers.[153] MGL[154] accept this as a situation where equitable principles cover the field. A similar development has been recognised in the law of privilege, where the privilege against exposure to penalties has long been recognised by the general law and is no longer simply a rule of equity relating to discovery.[155] These developments are not the outworking of s25(11) of the Judicature Act and they illustrate the general law's capacity (by techniques deserving to be labeled "fusion fallacies" by those who believe in them) for a rule from one "system" to "somehow annihilate" the situation prevailing in the other.[156] It is likely that estoppel by representation may also be developing in this manner.[157] "Common law" doctrines may supplant or modify rules of Equity. Short-circuiting of the traditional law/equity divide may also occur in the interests of justice. AMEV v UDC Finance Ltd (discussed above) is an example of the equitable doctrine yielding place to the better common law rule in the hands of a post-Judicature Act court. A fascinating development is also occurring in the heartland of the paradigmatic exclusively equitable institution, the trust, and it is occurring with due acknowledgement of the influence of the Judicature Act. A body of caselaw now recognizes that a beneficiary can in "exceptional circumstances" claim on behalf of the trust damages for breach of a "common law" obligation where the trustee disappears or neglects to act.[158] One assumes that Maitland would have been shocked by this sensible elision that cannot be explained away by assuming a fictional appointment of replacement plaintiff trustees. Lord Browne-Wilkinson's speech in Henderson and the decision of the Western Australian Full Court in Permanent Building Society (in liq) v Wheeler[159] concerning the duty of care of company directors are other examples of this beneficent phenomenon, although I realise that these are fighting words and that an opposite position will be advanced in other papers. Unlike for trustees, Chancery never asserted a monopoly over directors. Indeed, in its reflective moments, Equity has acknowledged the dangers of loose thinking prompted by invocation of the "fiduciary" label.[160] There is in my view no reason, beyond history, why (over a century after the English Judicature Act) Equity should assert as of right that the law about a director's duty of care should continue to be worked out according to "its" rules, without at least offering justification for separate treatment. A fortiori, where this may produce a lengthy list of discordances affecting not just the immediate parties but also third parties.[161] As with the overlap between contractual and tortious claims upon professional people, these differences call to be justified, not merely identified, unless the law is to abandon concern for coherence and to risk ever-widening circles of liability by always giving plaintiffs the logical consequences of their demands, without questioning the justice of defendants' positions. Sometimes it is the very differences between two sets of rights that lead appellate courts to choose which system has primacy. This phenomenon has already been mentioned. To take an example away from the present area, the notions of allocation of risk and the doctrine of efficient breach have seen contractual solutions squeeze out tortious alternatives in appropriate cases. The fusing of common law and equitable rights may partake of this process also. There is, of course, no reason why blending may not borrow the best of both worlds (if you are not troubled by an accusation of committing a fusion fallacy). Turning to remedies, the processes of fusion are conceptually much simpler. Since the early 19th century Parliaments have been giving equitable powers to common law courts and common law powers to equity courts.[162] The Judicature Act was the culmination of this statutory process. But the courts have been acting in aid of each other and borrowing from each other for much longer. The process gathered pace in the 19th century and received a significant fillip with the Judicature Act reforms to procedure.[163] Unless false fear of committing a fusion fallacy stands in the way, there is simply no jurisdictional or power-related impediment to complete adaptation of remedies. Chancery in its auxiliary and concurrent jurisdictions was always pleased to assist common law whenever appropriate. Within a single court there is no continuing impediment to the "cross over" of remedies, whether it be "damages" in aid of equitable rights or the full gamut of equitable remedies in aid of common law rights. I am not saying this should happen invariably, but (at least with discretionary remedies) there is no problem with adapting them to new situations if justified by the analogical application of precedent or the proper application of general principles. Courts faced with choices in this area will have to examine the values and functions underlying the remedies: but they should be doing this anyway.[164] Nothing herein stops the principled and coherent development of a general law of remedies. Some remedies will issue as of course, others will have special requirements and/or be discretionary. Appropriate principles in that regard can continue to be developed without the need to hearken back to false stereotypes of a long receding pre-Judicature Act system. Conclusion The general law, of whatever derivation, is largely found in precedent, operates within ever-diminishing interstices between statute law, and is developed according to common principles of judicial method supervised in each law area by an ultimate appellate Court. It is no longer true to describe common law as a single system, or to brand it as rigid, rule-driven, incapable of change and disproportionate. These were its badges at the time when the Court of Chancery flowered "to soften and mollify the extremity of the law", to use Lord Ellesmere's phrase in his successful claim for Equity's supremacy before James I.[165] The early 19th century Court of Chancery depicted in Bleak House itself needed statutory reform and a judicial wake-up call every bit as much as the Common Law Courts of that era. Much water has flown under the bridge since the enactments culminating in the Judicature Acts throughout the "common law" world. Equitable doctrines and remedies have become available in all courts of general jurisdiction, if judges (following the tradition of the Chancellors) think them appropriate for application or adoption in accordance with the judicial method, or are required to take them into account by modern statutes. A misapplication of precedent, principle or legal policy will be corrected on appeal. Disagreements will ultimately be resolved in the highest courts. Equity may take some of the credit for this state of affairs, because for centuries her Chancellors prevailed through use of the common injunction, before the 19th century her doctrines tended to be more nuanced than those of the common law, and because her ultimate supremacy in things deemed equitable was affirmed by Parliament. In one sense, success has come with a loss of distinctive identity, because of the theoretical postulate of an undivided and coherent legal system. But Equity cannot take all of the credit for the modern legal system. Common law doctrines and remedies have in the last century moved apace especially in the areas of procedure, remedies, contract, property, restitution and commercial law where equity and common law claim continuing and interacting roles. Statutory reforms have been very significant. The general law has developed the ubiquitous idea of abuse of process to check and frustrate unconscientious resort to legal rights and remedies. In short, the myth of Equity as saviour is now so outdated that its continued promulgation is as harmful to the understanding of the structure and development of the civil law as it is fictitious. "Equitable" doctrines should now take their proper place as part of a unified system of judge-made law, alongside and integrated with "common law" and statutory developments in those and other areas of legal discourse. Fusionists come in all shapes and sizes, generally united by concerns for coherence, rationality, efficiency and respect for general principles that serve as guides in legal education and appellate decision-making. Anti-fusionists may also share these goals, but they are generally united in their greater respect for a static legal framework and their love of history. One aim in this paper has been to demonstrate the historicity of the ongoing quest for realising the values served by "fusion" in its many guises. Let me conclude by invoking historical support for Maitland's vision of a more complete fusion. Blackstone in his 1768 Commentaries[166] observed that "there cannot be a greater solecism, than that in two sovereign independent courts, established in the same country, exercising concurrent jurisdiction, and over the same subject matter, there should exist in a single instance two different rules of property clashing with or contradicting each other". Australia's greatest judicial legal historian, Sir Victor Windeyer wrote in Felton v Mulligan:[167] "Mine may be an ingenuous view, but to me it seems that the law that a court must apply and administer, in the exercise of whatever jurisdiction pertains to it, may be derived from different concerns, but that it is still, so far as any particular case is concerned, a single though composite body of law." Debate about the fusion of law and Equity goes back for centuries. And for centuries it has been bedevilled by confusion stemming from the use of a single metaphor to do work on many different fronts. The metaphor may change but the idea of capturing the impact over time of a single event remains. There have been the metaphors of fusion, confluence, integration, interaction and intermingling. Justice Tipping has offered the metaphor of a rope in which discrete strands work separately yet together to do the task required of the whole rope. He offers "intertwining".[168] For some, the debate is seen in terms of exegesis of a statutory event occurring at a single point of time in the legal history of a particular law area. For England, the date was 1875. If the fusion debate starts and finishes from this premise, the debaters will discover much in common. But they will be viewing a sliver of ancient history, like an MRI image of a thin slice of a living body at a moment of time long past. The academic and judicial guardians of the modern law can do much better than this. President, New South Wales Court of Appeal. I gratefully acknowledge the research assistance of Tim Breakspear and Michael Rehberg. ...................................................................................................................................................................... End Notes 1 See 1 Ch Rep 1, 21 ER 485, which sets out the Chancellor's submissions. 2 There were also ecclesiastical law and maritime law, each with their own later fusion stories to tell (see Stephen Waddams, Dimensions of Private Law, Cambridge University Press, 2003, pp13-14). 3 Lange v Australian Broadcasting Corporation (1997) 189 CLR 570 at 564, Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 574[110], Lipohar v The Queen (1999) 200 CLR 485 at 505[44], John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 534[66]. 4 Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 at 419 (Heydon JA). 5 The body of rules said to be in "conflict or variance" was addressed in s25 of the Judicature Act 1873 (UK). 6 See Roxburgh v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 548[84] (Gummow J). 7 R D Meagher, D Heydon, M Leeming, Meagher, Gummow & Lehane's Equity Doctrines and Remedies 4th ed 2002 (hereafter MGL). 8 Equity's counterparts of "agent" (cf Pinkstone v The Queen (2004) 78 ALJR at [60]). "Trust property" is often used fictionally to explain a company's right to trace and follow misdirected funds. Millett LJ described the use of "trust" as a precursor to a personal remedy as "nothing more than a formula for equitable relief" (Paragon Finance plc v DB Thakerar & Co [1999] 1 All ER 400 at 409). Labels touching the status of company directors ("trustee" or "agent") led to unseemly and expensive conflicts between Chancery and the Common Law Courts in the mid 19th century: see below. 9 Cf the variety of words used to describe an award of compensation (damages, compensation, indemnity, Lord Cairns' Act damages) and the use of "injunction" to describe orders that were never part of classical Equity or which were or now are statutory (cf Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 394[28], 412[80]). 10 The role of Sydney University Law School cannot be ignored. It has produced generations of well-informed defenders of Equity. When I was an undergraduate, Sydney Law School prided itself on historically-based, black letter law. My teachers in Equity were proud to be practitioners in the world's last pre-Judicature system. 11 MGL has many sections in which equity doctrines and remedies are helpfully explained in a context that includes the common law or statutory material referable to the single field of legal discourse (eg assignments, misrepresentation, mistake, estoppel, duress, declarations, injunctions, set off, confidential information, passing off). At times, one might be excused for thinking that statute law had minimal impact (eg duties of company directors). 12 See Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353, Visy Paper Pty Ltd v Australian Competition and Consumer Commission [2003] HCA 59 at [24]. This type of error could perhaps be described as a fusion denial fallacy. As to "fusion fallacies" see below. 13 Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 269. 14 See MGL at [2-010] discussing fusion that came to New York State in 1848. 15 The first Rules were a Schedule to the Act, accompanied by a Note - "Where no other provision is made by the Act or these Rules the present procedure and practice remain in force". The ambiguity of this direction had to be addressed as early as 1879 (see fn 22 below). 16 (1880) 16 Ch D 544 at 549. Lord Jessel expressed a different view in Walsh v Lonsdale (1882) 21 Ch D 9 at 14 when, in the context of estates in land, he said "there is only one Court, and equity rules prevail in it". 17 First Report, p7. 18 Common Law Procedure Act 1854. 19 15 & 16 Vict c86, s62, a later version being 25 and 26 Vict c 42, s1 (Sir John Rolt's Act) 20 Chancery Amendment Act 1858 (known as Lord Cairns' Act). 21 See below. 22 Newbiggin-By-The-Sea Gas Co v Armstrong (1879) 13 Ch D 310. 23 As to Canada, see Paul M Perrell, "A Legal History of the Fusion of Law and Equity in the Supreme Court of Ontario" (1988) Advocates Quarterly 472. As to the United States, see C T McCormick, "The Fusion of Law and Equity in United States Courts" (1928) 6 NCL Rev 283, Dobbs, Law on Remedies 2nd ed, 1993, Wests p148ff. 24 Supreme Court Procedure Act 1957, replacing s98 of the Common Law Procedure Act 1899. 25 See MGL at [1-260]. As to other Australian States, see MGL at [1-160]-[1-195]. 26 The Hon Justice B H McPherson CBE has very recently published a lecture entitled "How Equity reached the colonies" demonstrating that American colonists and scholars were not nearly as accepting that Chancery law was part of their legal system. 27 Bennett, A History of the Supreme Court of New South Wales, Law Book Co, 1974 pp94, 279. 28 4 George IV c 96, a temporary enactment rendered permanent by 9 George IV c 83, the Australian Courts Act 1828. 29 Australian Courts Act 1828, s11. 30 Brown v Patterson (1883) 4 NSWLR Eq 1 at 10, 11-12. It seems that the law reporter got the last laugh, by reporting the decision in the Equity side of the NSWLR. On one definition, Manning J committed a "fusion fallacy" (see below). 31 Bennett, op cit, p95. 32 (1850) 1 Legge 612. 33 According to Justice McPherson, op cit, Queensland was the first place outside England to adopt the Judicature Act (in 1876). 34 See especially his History of the Supreme Court of New South Wales. A fuller statement of his research on the present matter is his unpublished 1963 thesis "The Separation of Jurisdictions in the Supreme Court of New South Wales 1824-1900" (hereafter, Separation) (copy in New South Wales Law Reform Commission Library). 35 Macquarie University, Law 514 Legal Research Project, Second Semester 2002. Copy made available by Mr G C Lindsay SC. 36 (1904) 1 CLR 546. See also Maiden v Maiden (1908) 7 CLR 727 where Isaacs J (a Victorian) agreed with Griffith CJ's views. Higgins J dissented on the point. 37 At 568, 569. 38 At 574-5. O'Connor J had practised at the New South Wales Bar. 39 See Smiles v Commissioner of Taxation (Cth) (1992) 37 FCR 538, Director of Public Prosecutions v Shirvanian (1998) 44 NSWLR 129. According to Sir Victor Windeyer, the necessity for the common injunction to prevent dishonestly obtained judgments at law diminished when common law courts themselves took adequate steps to prevent the fraudulent abuse of their own processes (Lectures on Legal History 2nd ed (revd), Law Book Co pp260-1). Cf CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 341 at 390-2. 40 (1910) 10 CLR 539. 41 At 543. 42 See Part IV (ss58-64). 43 See Sir Frederick Jordan's Chapters on Equity in New South Wales. 44 See cases cited in fn 3. 45 It commenced on 1 July 1972. 46 Section 64, later re-enacted so as to apply to all courts in the Law Reform (Law and Equity) Act 1972 (see Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435 at [33] and [37]). The New South Wales Law Reform Report on Law and Equity (LRC 13, 1971) pp9-10, documents the earlier adoption in New South Wales of subsections (1) to (10) of s25 of the Judicature Act 1873 (UK). For example, subsections (3)-(7) were addressed in the Conveyancing Act 1919 (NSW). 47 See MGL [2-055]-[2-060]. 48 Brunyate ed, Equity A Course of Lectures by F W Maitland (revised, 1947, Cambridge). 49 D Browne, Ashburner's Principles of Equity 2nd ed (1933) London, Butterworths at 18. 50 (1913) 11 Mich LR 537 at 543-4. 51 Id at 545. 52 (1883) 11 QBD 123. 53 Chan v Cresdon Pty Ltd (1989) 168 CLR 242 at 252. 54 Newbiggin-By-The-Sea Gas Co v Armstrong (1879) 13 Ch D 310. 55 (1986) 162 CLR 170. 56 Per Mason and Wilson JJ at 191. 57 At 326[143]. 58 Op cit, at p20. 59 United Australia Ltd v Barclays Bank Ltd [1941] AC 1 at 29 per Lord Atkin. 60 At par [2-100]. 61 MGL at [2-105]. See also Arthur Dean, "What Did the Judicature Act Really Do?" (1935) 1 Res Judicatae 13. 62 (2003) 56 NSWLR 298 at 326[139]. 63 (1881) 20 Ch D 1 at 12. MGL point out at [2-140] that "orthodoxy" was restored in Smith v Chadwick (1884) 9 App Cas 187. This fusion would occur later, by statute. 64 [1917] 1 Ch 234 at 241, referred to by MGL at [2-170]. 65 Eg company directors, who were regarded as both "agents" and "trustees" in the nineteenth century and solicitors, whose relationship with clients may in some respects be seen as contractual, fiduciary and (latterly) giving rise to a common law duty of care. Apart from trustees proper, the label "fiduciary" with reference to a relationship is often a warning that loose thinking and a claim of Equitable hegemony is about to follow. 66 [1964] AC 465. 67 MGL at [2-135]. 68 [1914] AC 932. 69 Cf J D Heydon, "The Negligent Fiduciary" (1995) 111 LQR 1 at p3. 70 [1971] Ch 949. See MGL at [2-150]. 71 MGL at [5-295]ff. 72 MGL at [2-310]. 73 MGL at [2-155]. See further below. 74 (1882) 21 Ch D 9. See MGL at [2-180]. 75 See MGL at [2-180]-[2-225]. 76 At [2-105]. 77 See MGL at [21-435]. 78 Jackson v Sterling Industries Ltd (1987) 162 CLR 612, Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1, Cardile v LED Builders Pty Ltd (1999) 198 CLR 380, Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435. 79 See, eg MGL at [2-100], Pettit, Equity and the Law of Trusts, 9th ed, 2001, at 9. 80 See WMC Gummow, Change and Continuity: Statute, Equity and Federalism, OUP, 1999, his Australian Law Journal article referred to below and his judgments generally. 81 Scott v Davis (2000) 204 CLR 333 at 376[128]. I do not think that his reference to "legal fictions" was intended to exclude equitable ones. 82 See cases cited in fn 3. 83 See generally Sullivan v Moody (2001) 207 CLR 562 and Tame v New South Wales (2002) 211 CLR 317. See also Justice Keith Mason, "The Unity of the Law" (1998) 4 TJR 1. 84 Gummow J in Hill v Van Erp (1997) 188 CLR 159 at 231, quoting Professor Francis Reynolds, "Contract and Tort: The View from the Contract Side of the Fence" (1993) 5 Canterbury Law Review 280 at p281. 85 Sections 179, 191 and 192. 86 [2004] HCA 42. 87 At [32]. 88 Cf Harris. 89 1st ed, 1966 to 6th ed, 2002. 90 Keith Mason, "Where has Australian restitution law got to and where is it going?" (2003) 77 ALJ 358. 91 See generally Andrew Burrows, "We Do this at Common Law But That in Equity" (2002) 22 Ox Jo LS 1. Particularly as to misdirected funds, see Koorootang Nominees Pty Ltd v Australian and New Zealand Banking Group Ltd [1998] 3 VR 16 at 100-105 (Hansen J). As to overlapping legal and equitable doctrines and remedies touching the unauthorized use of land and goods, see Mason & Carter, Restitution Law in Australia, Butterworths, 1995 chapter 16. 92 See Lionel D Smith, The Law of Tracing, 1997, Clarendon Press, Oxford, Boscawen v Bajwa [1996] 1 WLR 328 at 334 (Millett LJ), Foskett v McKeown [2001] 1 AC 102. 93 Most wrongful receipt claims stem from breaches of statutory duties of company directors with regard to company funds. 94 See eg Peter Birks, "Rights, Wrongs, and Remedies" (2000) 20 Ox Jo L S 1. 95 See Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566 at 585, Giumelli v Giumelli (1999) 196 CLR 101 at 113, 127, Parsons v McBain (2001) 109 FCR 157, Kais v Turvey (1994) 11 WAR 357, Ikeuchi v Liu (2001) 160 FLR 94, Hancock Family Memorial Foundation Ltd v Porteous (2000) 22 WAR 198, Robins v Incentive Dynamics Pty Ltd (in liq) (2003) 45 ACSR 244. 96 [1948] Ch 465 at 520-1, 532, 540. 97 Aquaculture Corporation v New Zealand Green Mussel Co Ltd [1990] 3 NZLR 299. 98 M(K) v M(H) [1992] 3 SCR 6, Whiten v Pilot Insurance Co (2002) 209 DLR (4th) 257 at 287[67]. 99 Harris. 100 See generally R P Meagher and W M C Gummow, Jacob's Law of Trusts, 6th ed, [2203]. 101 Ex parte Adamson; Re Collie (1878) 8 Ch D 807 at 819. See also Wickstead v Browne (1992) 30 NSWLR 1 at 14-15. 102 Re Dawson [1966] NSWR 211 at 216. 103 Wynch v Grant (1854) 2 Drew 312, 61 ER 739. The equitable derivation of the remedy also had consequences for the ready availability of compound interest or an account of profits against particular defaulting trustees or fiduciaries. 104 At 215. Note that he did not exclude such factors altogether. 105 Ibid. 106 In New South Wales it was adopted by the Equity Act 1880 and the provision deriving from it is now found in s68 of the Supreme Court Act 1970. 107 Statute Law Revision and Civil Procedure Act 1883, s3. 108 [1924] AC 851. 109 See Peter M McDermott, Equitable Damages, Butterworths, 1994 at pp42-3, citing Jolowicz, Heuston, Bennion and Atiyah. 110 See per Lord Sumner at 872-3, Lord Carson at 873. This had been the view of Lord Esher in Chapman, Morsons & Co v Guardians of Auckland Union (1889) 23 QBD 294 at 299. See also Board v Board [1919] AC 956 at 962. 111 9th ed, 2001 at p552. 112 At [23-030]. 113 [1973] 3 All ER 897 at 899, 900. 114 At [1-225]. 115 6th ed, p13. 116 (1992) 108 LQR 652. MGL acknowledge the existence of this article at [23-025], but in effect as a footnote that leads to no revision of the thesis in the text. 117 See the cases cited by McDermott at pp661-4. 118 See Todd v Gee (1810) 17 Ves 273, 34 ER 106. 119 P S Atiyah, The Rise and Fall of Freedom of Contract (1979) pp392-3. 120 McDermott op cit cites Fonblanque, Hovenden, Maddock and an 1832 edition of Bacon's Abridgment. 121 (1855) 7 De GM & G 722 at 734, 44 ER 280 at 285. 122 See McDermott op cit at pp668-9. 123 Op cit, pp670-2. 124 [1981] AC 1050 at 1081. 125 At 1082. 126 [1991] 3 SCR 534. 127 See esp McLachlin J at 545-6, La Forest J at 587-8. 128 [1981] AC 1050 at 1081. 129 (1923) 32 CLR 222 at 246. See also Minter v Geraghty (1981) 38 ALR 68 at 80. 130 [1914] AC 932. 131 See Robinson v Abbott (1893) 20 VLR 346. 132 [1927] VLR 134. 133 Peter M McDermott, Equitable Damages, Butterworths, 1994. 134 See Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388. 135 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64. 136 [1996] 1 AC 421. 137 [1995] 2 AC 206. 138 See Charles E F Rickett, "Equitable Compensation: Towards a Blueprint?" (2003) 25 Syd L Rev 31. 139 At [23-010]. 140 For example in Seager v Copydex (No 2) [1969[ 2 All ER 718, Talbot v General Television Corp Pty Ltd [1980] VR 224, Aquaculture Corp v New Zealand Mussel Co Ltd [1990] 3 NZLR 299, Attorney-General v Observer Ltd [1990] 1 AC 109 at 286 and Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 676. 141 See MGL at [2-155]. See also my remarks in Harris at 322[118]-[129]. 142 See text referable to n 17 above. 143 Spigelman CJ did not find it necessary to join Heydon JA in ruling that the Supreme Court of New South Wales lacked power to award exemplary damages for any equitable wrongs. The Chief Justice limited his remarks to breach of fiduciary duties arising in the context of a contractual relationship. 144 [1993] AC 713 at 743. 145 (2003) 77 ALJ 30. 146 Anthony J Duggan, "Is Equity Efficient?" (1997) 113 LQR 601 at p602. 147 Bridgewater v Leahy (1998) 194 CLR 457, Tanwar Enterprises Pty Ltd v Cauchi (2003) 77 ALJR 1853. 148 This probably explains why the Equity traditionalists fight so hard to retain traditional or distinctive labels. 149 Hawkins v Clayton (1988) 164 CLR 539. 150 Dimskal Shipping Co SA v International Transport Workers Federation (the Evia Luck) [1992] 2 AC 152 at 165, Roxburgh v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at [58], [75], [95], [166], [197]. 151 Tame at 335[28], 342[58], 361[123]. 152 Cf Rich. 153 Cunningham-Reid v Public Trustee [1944] KB 602, Armstrong v Commissioner for Stamp Duties (1967) 69 SR(NSW) 38 at 48, Burke v LFOT Pty Ltd (2002) 209 CLR 282 at 299[38]). 154 At [10-010]. 155 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 554[13]. 156 Cf Heydon op cit, p3. 157 See Commonwealth v Verwayen (1990) 170 CLR 394 at 412 (Mason CJ), 431-40 (Deane J). 158 Parker - Tweedale v Dunbar Bank Plc (No 1) [1991] Ch 12 at 19-20, Lidden v Composite Buyers Ltd (1996) 67 FCR 560 (Finn J), Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432. 159 (1994) 11 WAR 187. 160 Re Coomber [1911] Ch 723 at 728-9 per Fletcher Moulton LJ. 161 See Heydon op cit suggesting different outcomes in relation to measure of damages, limitation, contribution, contributory negligence, conditionality of remedy, unclean hands, exemplary damages and causation. 162 See Holdsworth, A History of English Law vol xv pp122-127. 163 Priestley JA pointed out that the "crossover of remedies" is more advanced in the United States than in England or Australia (Hon Mr Justice LJ Priestley, "A Guide to a Comparison of Australian and United States Contract Law" (1989) 12 UNSWLJ 4 at 29). 164 See Douglas Laycock, "the Triumph of Equity" (1993) 56 Law and Contemporary Problems 54 at p81. 165 Earl of Oxford's Case (1615) 1 Ch Rep 1 at 7, 21 ER 485 at 486. 166 Vol 3, chapter 27. 167 (1971) 124 CLR 367 at 392. 168 Rt Hon Justice Tipping, Causation at Law and in Equity: Do We Have Fusion?" (2000), 7 Canta LR 443.
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