(2022) 34 SAcLJ 400

(Published on e-First 22 June 2022)

RECONCILING THE RULE OF LAW WITH

EQUITABLE REMEDIES

This article will confront equity with the rule of law and answer
the fundamental question of whether equitable remedies are
compatible with the standards usually ascribed to the two main
theories of the rule of law. On one hand, equity’s hallmarks of
discretion, conscience-based adjudication and flexibility are a
common feature of common law jurisdictions. On the other
hand, the rule of law can be distinguished along two main
theories: a formalist account where rules have to be certain
and published in advance, or a substantive account where the
content of the law itself has to meet certain standards, notably
protection of properties, respect for human dignity and
ability to live independent lives free from interference from
the state. This article will argue that equity, in its remedial
and “supplemental law” jurisdictions, can be reconciled with
both accounts of the rule of law. In particular, equity does not
infringe on the formalities required by the formalist version
of the rule of law and equity performs multiple functions
necessary for a more substantive version of the rule of law:
it restrains unconscionable reliance on strict legal rights, it
protects property through its expansion of tradeable rights,
and it facilitates how people can organise their lives.

Arnaud J M DYDUCK
JD, MSocSc (The Chinese University of Hong Kong);
PCLL Candidate (The University of Hong Kong).

I. Introduction

1 Despite the tremendous development of equity in the past

decades,1 some academics argue that its hallmarks of flexibility, judicial
discretion and focus on conscience afforded to the judiciary sits rather
oddly with the rule of law. Indeed, for Peter Birks,2 discretionary

1 John H Langbein, “The Secret Life of the Trust: The Trust as an Instrument of
Commerce” (1997) 107 The Yale Law Journal 165; Anthony Mason, “The Place of
Equity and Equitable Remedies in the Contemporary Common Law World” (1994)
110 Law Quarterly Review 238; PJ Millett, “Equity’s Place in the Law of Commerce”
(1998) 114 Law Quarterly Review 214.
2 Peter Birks, “Equity in the Modern Law: An Exercise in Taxonomy” (1996)
26 University of Western Australia Law Review 1 at 16–17 and 97–99.

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 Reconciling the Rule of Law with
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remedialism is indefensible and amounts to “losing faith in the rule of

law”.3 Roscoe Pound4 describes the discretionary nature of equity as
“anti-legal” and even academics largely sympathetic to equity qualify it
as “subversive of law”.5 Although their views may be perceived as mostly
relevant to a somewhat traditional or historical version of equity, the
premise of their perspectives being based on a fundamental characteristic
of equity, namely discretion and flexibility, is nonetheless still relevant
today and worthy of an in-depth inquiry.

2 This article will answer the fundamental question of whether

equity and the rule of law are compatible. Part II of this article will
delineate the two main strands of the rule of law: the formalist theory
and the substantive theory. Part III will explore the view that equity is
conventionally perceived as not being entirely consistent with the norms
traditionally associated with the doctrine of rule of law. Finally, Part IV
will attempt to reconcile equity with both accounts of the rule of law.
In particular, this article will emphasise the interplay between modern
equity and the features of discretion and flexibility.

II. The two strands of the rule of law

3 At the most general level, the phrase “rule of law” embodies the
notion that governments should not only protect their citizens against
Hobbesian anarchy and the “war of all against all”,6 but should also exert
state power within a restraining framework and not in an arbitrary
manner.7 Beyond this uncontentious proposition, the notion is disputed.8
There are broadly two opposite poles,9 or theories, of the rule of law with
a continuum in between: a formalist conception focusing on the form

3 Peter Birks, “Three Kinds of Objection to Discretionary Remedialism” (2000)

29 University of Western Australia Law Review 1 at 15.
4 Roscoe Pound, “Decadence of Equity” (1905) 5 Columbia Law Review 20 at 20.
5 Margaret Halliwell, Equity & Good Conscience in a Contemporary Context (Old
Bailey Press, 1997) at p 6.
6 Richard A Epstein, “Beyond the Rule of Law: Civic Virtue and Constitutional
Structure” (1987) 56 George Washington Law Review 149; Richard H Fallon, “‘The
Rule of Law’ as a Concept in Constitutional Discourse” (1997) 97 Columbia Law
Review 1 at 7; John Rawls, “Equal Liberty” in A Theory of Justice (Harvard University
Press, 1971) at p 240.
7 Albert V Dicey, Introduction to the Study of the Law of the Constitution (Macmillan,
8th Ed, 1915) at pp 184 and 198; Joseph Raz, “The Rule of Law and its Virtue”
in The Authority of Law: Essays on Law and Morality (Clarendon Press, 1979) at
pp 219–220.
8 Lawrence B Solum, “Equity and the Rule of Law” (1994) 36 Nomos 120 at 121.
9 Stefan H C Lo & Wing Hong Chui, The Hong Kong Legal System (McGraw-Hill,
2012) at p 62.

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 402 Singapore Academy of Law Journal (2022) 34 SAcLJ

of the law and a substantive conception focusing more on the content of

the law.

A. Formalist theory

4 Under the formalist theory, the conduct of citizens should be

governed by their responsiveness to a set of rules; according to Joseph
Raz, “the law must be capable of guiding the behaviour of its subjects.
It is evident that this conception of the rule of law is a formal one … It
says nothing about fundamental rights, equality, or justice”.10 In order to
reach that goal, laws should be clearly promulgated and set out. This is
what Lon Fuller calls the “eight demands of the law’s inner morality”:11
generality, publicity, consistency, stability, prospectivity, congruence,
intelligibility and practicability.

5 Of particular importance is that rules should be well known in

advance to provide proper guidance to people, and that citizens must
be put on notice on how they will be held accountable. This conception
“emphasise[s] the importance of … predictability in the legal system, and
it is these values that are often thought to be opposed to equity with its
tolerance of indeterminacy”.12 Professor Richard Fallon, citing Solum,13
said that formalist conceptions of the rule of law and equity can be
incompatible to the extent that “legal decision makers sometimes ought
to depart from the rules in order to do justice in particular cases”.14

B. Substantive theory

6 Substantive conceptions, however, go beyond that point and

insist that a mere observance of formalism will not protect against
government authoritarianism. Therefore, there should be, in addition to
compliance with formalism, restrictions on the very content of these laws.
Lord Bingham advocates for a “thick definition embracing the protection
of human rights”.15 Arthur Chaskalson, former Chief Justice of South
Africa, echoed this position when he said that “without a substantive

10 Joseph Raz, “The Rule of Law and its Virtue” in The Authority of Law: Essays on Law
and Morality (Clarendon Press, 1979) at p 214.
11 Lon Fuller, “The Morality that Makes Law Possible” in The Morality of Law: Revised
Edition (Yale University Press, 1969) at p 46.
12 Matthew Harding, “Equity and the Rule of Law” (2016) 132 Law Quarterly
Review 278 at 280.
13 Lawrence B Solum, “Equity and the Rule of Law” (1994) 36 Nomos 120 at 120.
14 Richard H Fallon, “‘The Rule of Law’ as a Concept in Constitutional Discourse”
(1997) 97 Columbia Law Review 1 at 50.
15 Thomas H Bingham, The Rule of Law (Allen Lane, 2010) at p 67. See also
Lord Bingham, “The Rule of Law” (2007) 66(1) Cambridge Law Journal 67.

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 Reconciling the Rule of Law with
(2022) 34 SAcLJ Equitable Remedies 403

content there would be no answer to the criticism that the rule of law is
an empty vessel into which any law could be poured”.16

7 Ronald Cass17 argues that “a critical aspect of … the rule of law

is … the protection of property rights”. He further explains that “societies
that are relatively friendly to property, not only giving it security but also
providing broad scope for the use of property according to its owners’
desires, will have an advantage”. The same notion of property protection
being a central tenet of the substantive version of the rule of law was also
advanced by Locke.18 This substantive political theory of the rule of law
brings us into the realm of autonomy and freedom, a notion that was
developed and championed by the likes of Friedrich Hayek,19 Raz20 and
Isaiah Berlin.21 From this perspective, the rule of law is important because
it promotes human dignity, which necessarily includes people’s rights to
plan their future, and it enables an environment conducive for liberty
and value pluralism. This political ideal rooted in liberalism ensures that
people have at their disposal a sufficient range of options to organise their
lives and to make genuine choices in relation to their properties.

III. Equity

8 This Part will attempt to define the characteristics of equity by

going beyond the technical definition formulated by Maitland, ie, “that
body of rules administered by our English courts of justice which, were
it not for the operation of the Judicature Acts, would be administered
only by [the] Court of Equity”.22 On this account, equity is a mere ragbag
of matters meant to deal with defects of pre-19th century common law.
Although Macnair claims that the “view of Maitland has become the
current orthodoxy”,23 this article will nonetheless strive to identify broad

16 Mark David Agrast, Juan Carlos Botero & Alejandro Ponce, The World Justice
Project Rule of Law Index 2011 (The World Justice Project, 2011) at p 9, available at
<https://worldjusticeproject.org/sites/default/files/documents/WJP_Rule_of_Law_
Index_2011_Report.pdf> (accessed 13 July 2021).
17 Ronald A Cass, “Property Rights Systems and the Rule of Law” in The Elgar
Companion to the Economics of Property Rights (Edward Elgar Publishing, 2004) at
p 222.
18 Sean Mattie, “Prerogative and the Rule of Law in John Locke and the Lincoln
Presidency” (2005) 67(1) The Review of Politics 77 at 84.
19 Friedrich A Hayek, The Road to Serfdom (University of Chicago Press, 1944);
Friedrich A Hayek, The Constitution of Liberty (University of Chicago Press, 1960).
20 Joseph Raz, The Morality of Freedom (Oxford University Press, 1986).
21 Isaiah Berlin, Liberty (Oxford University Press, 2002) at pp 216–217.
22 Dennis Klimchuk, “Aristotle at the Foundations of the Law of Equity” in Philosophical
Foundations of the Law of Equity (Oxford University Press, 2020) at p 32.
23 Mike Macnair, “Equity and Conscience” (2007) 27(4) Oxford Journal of Legal
Studies 659 at 664.

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 404 Singapore Academy of Law Journal (2022) 34 SAcLJ

principles of equity for comparison with the conceptions of the rule of

law that have been delineated in the first part of this article. A quick word
of caution is necessary at this stage though: the nature, boundaries and
underlying rationales of equity are a hugely contentious and complex
topic which would warrant a separate enquiry on its own and which
are beyond the scope of this article. That being said, some broad and
recognisable patterns nonetheless emerge so as to organise, classify
and catalogue equitable remedies along some common fault lines. This
section will develop two strands of equity: remedial equity and equity
as supplemental law. Each of these categories will then be supported
by examples.

A. Remedial equity

9 According to the Greek philosopher Aristotle in Nichomachean

Ethics, equity is an “invocation of justice where law fails on account of its
generality”.24 The pupil of Plato further added that “all law is universal,
but about some things it is not possible to make a universal statement
which shall be correct”.25 Lord Ellesmere expressed a similar idea of
equity in the locus classicus case of The Earl of Oxford26 when he said
that “it is impossible to make any general law which may aptly meet with
every particular act, and not fail in some circumstances”.27 Hart28 explains
that the language of law (be it legislative or sourced in case law) is open-
textured; the words do not have surgical precision to accommodate
every types of situations that can occur in real life. Therefore, for the
“penumbral” cases that invariably arise and where it is not clear how the
law should apply, ie, when a court has to deal with a situation which does
not squarely and neatly fall within the ambit of a point of law (in other
words, some facts are present which were not envisaged by the legislator
or by a previous judgment), the courts have a discretion to resolve the
issue and come up with a judgment. To reach that final judgment, courts
will often resort to a purposive approach to interpretation but will also
have regard to considerations of fairness.29

24 Henry E Smith, “Property, Equity, and the Rule of Law” in Private Law and the Rule
of Law (Oxford University Press, 2014) at pp 224–246 and 242.
25 Dennis Klimchuk, “Equity and the Rule of Law” in Private Law and the Rule of Law
(Oxford University Press, 2014) at p 252.
26 (1615) 1 Ch Rep 1.
27 Mark Fortier, “Equity and Ideas: Coke, Ellesmere, and James I” (1998)
51(4) Renaissance Quarterly 1255 at 1262.
28 H L A Hart, The Concept of Law (Oxford University Press, 3rd Ed, 2012).
29 Nigel E Simmonds, Central Issues in Jurisprudence: Justice, Law and Rights (Sweet &
Maxwell, 5th Ed, 2018) at pp 162–163.

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 Reconciling the Rule of Law with
(2022) 34 SAcLJ Equitable Remedies 405

10 The remedial strand of equity is also apparent in public

international law. In order to avoid the undesirable situation of non liquet,
where an absence of clear legal rules applicable to a dispute would
lead the court to decline to give judgment,30 international courts refer
to what is called the “general principles of law recognised by civilised
nations”.31 These constitute a reservoir of principles which will fill gaps,
or lacunae, in international law (ie, when no treaties or customary laws
apply). John Finnis listed 13 of these general principles,32 for example,
the doctrine of estoppel, the principle that no judicial aid will be awarded
to those who plead their own wrong (those who seek equity must do
equity), the central tenet that fraud unravels everything, and the idea that
no aid will be provided to those who abuse their rights. These principles
bear a striking resemblance to equitable rules33 and are at the disposal
of international courts and arbitral tribunals in order to reach a fair
decision whenever no positive law is available. The former Justice of the
Supreme Court of Queensland Margaret White made that point clear
when she referred to one of the locus classicus of international law, the
North Sea Continental Shelf Cases,34 where she noted that “the acceptance
of equity [by the International Court of Justice in that case] rested on a
broader basis, namely, that the decisions of a court of justice must be just,
and in that sense equitable”.35 The key issue in the North Sea Continental
Shelf Cases concerned a maritime boundary dispute between Germany
on one side, and the Netherlands and Denmark on the other. The court
eventually awarded a larger portion of sea to Germany on the basis of
fairness, given the fact that its long coastline facing the North Sea was in
a concave shape and that the Convention on the Continental Shelf 1958
(promoting the equidistance principle to set maritime boundaries) was
not obligatory in the proceedings of that case (in other words, there
was no treaty law applicable). The court therefore resorted to principles
of fairness and equity, embedded in the general principles of law, and
awarded more sea territory to Germany than it would have had the
equidistance rule been applied.

30 Stephen Hall, Foundations of Intermational Law (Lexis Nexis, 4th Ed, 2019) at p 81.
31 1945 Statute of the International Court of Justice, Art 38(1)(c) (entry into force
24 October 1945).
32 John Finnis, Natural Law and Natural Rights (Oxford University Press, 2011) at
p 288.
33 Stephen Hall, Foundations of International Law (Lexis Nexis, 4th Ed, 2019) at p 76.
34 North Sea Continental Shelf Cases (Federal Republic of Germany/Denmark; Federal
Republic of Germany/Netherlands) (1969) ICJ Rep 3.
35 Margaret White, “Equity – A General Principle of Law Recognised by Civilised
Nations?” (2004) 4(1) Queensland University of Technology Law and Justice Journal 103
at 111. See also North Sea Continental Shelf Cases (Federal Republic of Germany/
Denmark; Federal Republic of Germany/Netherlands) (1969) ICJ Rep 3 at [88]. The
same points were made in Michael Akehurst, “Equity and General Principles of
Law” (1976) 25(4) The International and Comparative Law Quarterly 801.

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 406 Singapore Academy of Law Journal (2022) 34 SAcLJ

11 The discretionary nature of remedial equity has two strands:

on one hand equity amounts to a correction, which is a remedy arising
from the universality of law; on the other hand equity will insist that
statutes not be used as instruments of fraud,36 hence statutory equitable
interpretations are sometimes necessary to avoid an unwelcome
consequence of following the letter of the law. This latter version is what
Edelman37 coins the “equity of the statute”.

(1) Discretion, anti-opportunism and unconscionability

12 Equitable remedies, such as specific performance,38 injunction,

rescission and rectification39 are discretionary. Although it can be argued
that it is known beforehand the factors that the court will consider
before exercising discretion, it is equally true that there is much leeway
as regards their interpretation. Further, the factors are never set in
stone; for example, Arden LJ developed a test of unconscionability in
Pennington v Wayne40 (“Pennington”) and Hale LJ laid out a list of factors
in Stack v Dowden41 to take into account the entire course of dealings
between parties before recognising the existence of a common intention
constructive trust for the matrimonial home.

13 In respect of the interpretation of factors, the Hartian penumbral

nature of law reaches an apex point that practicing lawyers are all very
familiar with, to their delight it could be ironically said. Even though this
competing pull between certainty and substantial justice is equally true
to some extent of common law rules, as the House of Lords decision in
Golden Strait Corporation v Nippon Yusen Kubishika Kaisha42 epitomised
in respect of the remedy of damages for breach of contract,43 it remains
true that the discretionary nature of equitable remedies is nonetheless a
cornerstone of equity as a whole. We can see clearly here the potential
for conflict between equity and the formalist concept of the rule of
law.44 In addition to their retrospectivity, equitable remedies operate
according to “fuzzy”, or nebulous, standards such as unconscionability

36 Rochefoucauld v Boustead [1897] 1 Ch 196.

37 James Edelman, “The Equity of the Statute” in Philosophical Foundations of the Law
of Equity (Oxford University Press, 2020) at pp 352–370.
38 Beswick v Beswick [1968] AC 58.
39 Craddock Brothers v Hunt [1923] 2 Ch 136.
40 Pennington v Waine [2002] 1 WLR 2075.
41 Stack v Dowden [2007] 2 AC 432 at [69].
42 Golden Strait Corporation v Nippon Yusen Kubishika Kaisha [2007] UKHL 12.
43 Qi Zhou, “Damages for Repudiation: An ex ante Perspective on the Golden Victory”
(2010) 32(4) Sydney Law Review 579 at 593; Lord Mance, “Should the Law be
Certain?”, speech at The Oxford Shrieval Lecture (11 October 2011) at paras 40–43.
44 Paul B Miller, “Equity as Supplemental Law” in Philosophical Foundations of the Law
of Equity (Oxford University Press, 2020) at p 96.

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 Reconciling the Rule of Law with
(2022) 34 SAcLJ Equitable Remedies 407

and moral values. In this sense “equity is a mode of giving morality a

juridical character”.45 Indeed, McLachlin (now a non-permanent judge
of the Hong Kong Court of Final Appeal) expressed the view in Soulos v
Korkontzilas46 that “the concept of good conscience lies … at the very
foundation of equitable jurisdiction” and Gummow and Hayne JJ,
in Australian Competition and Consumer Commission v CG Berbatis
Holdings Pty Ltd, defined the term “unconscionable” as being “various
grounds of equitable intervention to refuse enforcement of or to set aside
transactions which offend equity and good conscience”.47

14 To be fair, we note that some academics have argued a rise

of common law good faith and reasonableness at the detriment of
unconscionability,48 in particular “with the recent decisions on good faith,
judges are moving closer to the position where they will interfere with
the exercise of rights or powers because of unreasonableness, rendering
unconscionability unnecessary”.49 In fact, that line of reasoning feeds
into the main argument of this article whereby the fault lines between
common law and equity are blurred and therefore the apparent equitable
transgression of the rule of law, based on a premise of uncertainty, is
refuted (otherwise both common law and equity would transgress the
rule of law).

15 A case in point is the overlap between the common law doctrine of

duress and the doctrine of unconscionability, which operates as a barrier
against outrageous and extreme behaviour. The recent landmark decision
of the Supreme Court of Canada in Uber Technologies Inc v Heller50 is a
vivid example that unconscionability serves a much needed function to
protect the weaker party. On the facts of that case, arbitration clauses in
standard form contracts signed by Uber drivers were held not binding as
these were unconscionable due to the unequal bargaining power between
the parties to the contract. Abella and Rowe JJ held in their judgment that
this equitable doctrine allows contracts obtained by the abuse of unequal

45 Philip A Ryan, “Equity: System or Process” (1956) 45(2) Georgetown Law Journal 213
at 217.
46 Soulos v Korkontzilas (1997) 2 SCR 217 at [27].
47 Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd
(2003) 197 ALR 153 at [42].
48 Elisabeth Peden, “When Common Law Trumps Equity: The Rise of Good Faith
and Reasonableness and the Demise of Unconscionability” (Legal Studies Research
Paper No 06/57, November 2006).
49 Elisabeth Peden, “When Common Law Trumps Equity: The Rise of Good Faith
and Reasonableness and the Demise of Unconscionability” (Legal Studies Research
Paper No 06/57, November 2006) at p 28.
50 Uber Technologies Inc v Heller (2020) SCC 16.

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 408 Singapore Academy of Law Journal (2022) 34 SAcLJ

bargaining power to be set aside by the courts.51 This is reminiscent of the

broad test of unconscionability laid out in another landmark decision of
modern equity, in Australia this time: Commercial Bank of Australia Ltd v
Armadio52 (“Armadio”). Strictly speaking, Mason J clarified in Armadio
that a mere inequality in bargaining power would not suffice, in and of
itself, to trigger the doctrine of unconscionability;53 it did come very
close to that though. In the face of such a broad doctrine, the Singapore
Court of Appeal settled in BOM v BOK54 (“BOM”) a middle-ground
three-pronged approach of the doctrine of unconscionability based on:
(a) the plaintiff ’s “infirmity”; (b) the defendant’s “exploitation” of such
infirmity; and (c) an evidential burden resting on the defendant to
defend the particular transaction on fair, just and reasonable grounds.55
In particular, the court said that “the broad doctrine of unconscionability
looks very much like a broad discretionary legal device which permits
the court to arrive at any decision which it thinks is subjectively fair in
the circumstances – or, at least, does not provide the sound legal tools
by which the court concerned can explain how it arrived at the decision
it did based on principles that could be applied to future cases of a
similar type”.56 It can be argued that this statement from the Singapore
Court of Appeal, aimed at the broad doctrine of unconscionability (best
exemplified by Armadio57), nevertheless encapsulates all the grievances
stemming from “unrestrained” equitable and discretionary remedies
at large.

16 Building on an interpretation of equity operating on a remedial

plane, Henry E Smith58 developed a theory of equity as a safety valve,
a second-order normative system, a type of meta-law.59 To Smith, the
“anti-opportunism safety valve corresponds roughly to a major strand of
equity jurisprudence”.60 This position echoes the stickler theory adopted

51 Jodi Gardner, “Being Conscious of Unconscionability in Modern Times: Heller v

Uber Technologies” (2021) 84(4) Modern Law Review 874 at 878.
52 Commercial Bank of Australia Ltd v Armadio (1983) 46 ALR 402.
53 Ashley J Black, “Unconscionability, Undue Influence and the Limits of Intervention
in Contractual Dealings: Commercial Bank of Australia Ltd v Amadio” (1986)
11(1) Sydney Law Review 134 at 139. Commercial Bank of Australia Ltd v Armadio
(1983) 46 ALR 402 at 413.
54 BOM v BOK [2019] 1 SLR 349.
55 Rick Bigwood, “Knocking Down the Straw Man: Reflections on BOM v BOK and
the Court of Appeal’s ‘Middle-Ground’ Narrow Doctrine of Unconscionability for
Singapore” (2019) Singapore Journal of Legal Studies 29.
56 BOM v BOK [2019] 1 SLR 349 at [148].
57 BOM v BOK [2019] 1 SLR 349 at [132]–[133].
58 Henry E Smith, “Equity as Second-Order Law: The Problem of Opportunism”
(Harvard Public Law Working Paper No 15, 15 January 2015).
59 Henry E Smith, “Equity as Meta-Law” (2021) 130(5) The Yale Law Journal 1050.
60 Henry E Smith, “Equity as Meta-Law” (2021) 130(5) The Yale Law Journal 1050
at 1050.

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 Reconciling the Rule of Law with
(2022) 34 SAcLJ Equitable Remedies 409

by Dennis Klimchuk.61 According to Klimchuk, a stickler is someone

who insists upon his legal rights in order to coerce the person subject to
a liability or duty vis-à-vis these rights. This position fits the Aristotelian
account of equity in the sense that “the equitable man … tends to take
less than his share though he has the law on his side”.62

17 For example, in Hollywood Silver Fox Farm Ltd v Emmett63

(“Hollywood Silver Fox”), the defendant Emmett fired a gun on his own
land in order to disrupt the breeding of foxes on a neighbouring land,
because the presence of the foxes in the adjacent farmhouse would
have negatively affected his property development plans. Klimchuk64
argues that, in doing so, Emmett abused his rights. Eventually, the court
ruled in favour of the plaintiff fox farm owner and held that “otherwise
permissible use of land can become nuisances if the end is merely
harming the interest of another owner”. Katz65 describes this situation as
“illegitimate leverage” because Emmett’s decision to fire his gun and to
use his property rights is based solely on harming others. Emmett stood
by his legal rights (indeed, he had the right to fire a gun) but he was
not the “equitable man”; therefore, the court decided against him and
granted relief to the plaintiff fox breeder from the inequity of the stickler
(ie, Emmett) who had “acted badly and then sought immunity under a
strict and narrow interpretation of his rights”.66

(2) Equity of the statute

18 The process of correcting the defects of the law due to its generality
necessarily involves statutory interpretation, Sir William Blackstone said
in the Commentaries on the Laws of England that “from this method of
interpreting laws … arises what we call equity; which is thus defined by
Grotius [quoting him in De Aequitate]: ‘the correction of that, wherein
the law (by reason of its universality) is deficient’”.67 Blackstone added

61 Dennis Klimchuk, “Aristotle at the Foundations of the Law of Equity” in Philosophical

Foundations of the Law of Equity (Oxford University Press, 2020) at p 32; Dennis
Klimchuk, “Equity and the Rule of Law” in Private Law and the Rule of Law (Oxford
University Press, 2014) at p 252.
62 Dennis Klimchuk, “Aristotle at the Foundations of the Law of Equity” in Philosophical
Foundations of the Law of Equity (Oxford University Press, 2020) at p 38.
63 Hollywood Silver Fox Farm Ltd v Emmett [1936] 2 KB 468.
64 Dennis Klimchuk, “Equity and the Rule of Law” in Private Law and the Rule of Law
(Oxford University Press, 2014) at pp 257–258.
65 Larissa Katz, “Spite and Extortion: A Jurisdictional Principle of Abuse of Property
Right” (2013) 122(6) The Yale Law Journal 1444 at 1463.
66 Dennis Klimchuk, “Equity and the Rule of Law” in Private Law and the Rule of Law
(Oxford University Press, 2014) at p 254.
67 William Blackstone, Commentaries on the Laws of England, Book the First
(Clarendon Press, 1765) at p 61, available at the Project Gutenberg website: <https://
(cont’d on the next page)

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 410 Singapore Academy of Law Journal (2022) 34 SAcLJ

that the equity depends “on the particular circumstances of each

individual [case]” and that “there should be somewhere a power vested
of excepting those circumstances, which (had they been foreseen) the
legislator himself would have excepted”. This “equity of the statute”68 that
Blackstone was referring to in the 18th century was not a new idea back
then; several scholars recognised its existence and its function. It can be
mentioned, among the most prominent academics and legal historians
backing this principle of equity of the statute, St Germain in Doctor and
Student69 in 1518, and even Lord Coke in The First Part of the Institutes
of the Laws of England70 who, despite writing the King’s Bench judgment
for the defendant in The Earl of Oxford,71 nonetheless acknowledged the
equitable construction of statutes. The necessity of statutory equitable
interpretation was recognised as well in Eyston v Studd72 where the
reporter Plowden mentioned that “it often happens that when you know
the letter [of statutes], you know not the sense, for sometimes the sense
is more confined and contracted than the letter, and sometimes it is
more large and extensive. And equity … enlarges or diminishes the letter
according to its discretion”.73

19 A good illustration of the equity of statute is the American case

of Riggs v Palmer74 (“Riggs”) where a grandson murdered his grandfather
in order to inherit the old man’s fortune. Earl J was facing the conundrum
of a “statute regulating the making and effect of wills [which would],
if literally construed and if [its] force could in no way and under no
circumstances be controlled and modified, give the [grandfather’s]
property to the murderer”.75 After quoting Bacon and Blackstone, Earl J
remarked that “the lawmaker could not set down every case in express
terms” and that “if there arise … any absurd consequence manifestly
contradictory to common reason … then the judges are in decency to
conclude that the consequence was not foreseen by the parliament, and,

www.gutenberg.org/files/30802/30802-h/30802-h.htm#Page_38> (accessed
19 November 2021).
68 James Edelman, “The Equity of the Statute” in Philosophical Foundations of the Law
of Equity (Oxford University Press, 2020) at pp 352–370.
69 Archibald Young, “Christopher St German’s Doctor and Student: From Legal Debate
to Religious Division” (2000) 37(143–144) Moreana 39 at 54.
70 Lord Coke, Institutes of the Laws of England, Commentary upon Littleton (William
Rawlins, 10th Ed, 1703).
71 Ie, a defence of the common law against equity.
72 Eyston v Studd (1573) 2 Plowden 459.
73 James Edelman, “The Equity of the Statute” in Philosophical Foundations of the Law
of Equity (Oxford University Press, 2020) at p 362. Dennis Klimchuk, “Aristotle at
the Foundations of the Law of Equity” in Philosophical Foundations of the Law of
Equity (Oxford University Press, 2020) at p 36.
74 Riggs v Palmer (1889) 115 NY 506.
75 Riggs v Palmer (1889) 115 NY 506 at 509.

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 Reconciling the Rule of Law with
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therefore, they are at liberty to expound the statute by equity and only
quoad hoc disregard it”.76 Eventually, the court found it “inconceivable”
for the murderer’s rights to be upheld by the statute and therefore held
that the grandson could not inherit from his victim. Earl J concluded
that “no one shall be permitted to profit by his own fraud, or to take
advantage of his own wrong, or to found any claim upon his own iniquity,
or to acquire property by his own crime”, he added that “these maxims
are dictated by public policy [and] have their foundation in universal law
administered in all civilised country”.77

(3) Cy-près

20 Express trusts must satisfy the three certainties (ie, intention,

subject and object) in order to be established.78 These are stringent
requirements and failure to meet any will lead to the invalidity of the
trust. However, for charitable trusts, if the object is not certain, the courts
have “the power to order an application of the trust fund for alternative
charitable purposes which are in accordance with the settlor’s underlying
intentions”.79 This doctrine of cy-près (from the old French meaning “as
near as possible”) reflects the societal importance80 of charitable trusts
but can also be read in light of equitable interpretation. Edelman81 draws
a parallel between this doctrine and that of the “equity of the statute”
seen above. Of course, there is no statute involved here, but to the
extent that charitable trusts help society as a whole82 and are therefore
a desirable thing, the courts’ discretion to modify the settlor’s intention
in order to give effect to a general charitable intent may be read as being
a necessary enforcement of the testators’ altruistic goals. In turn, this
doctrine feeds into a narrative where the state protects the autonomy of
its citizens and therefore facilitates how people can organise their lives
and their property.83 Thus, the doctrine of cy-près may be construed
as being the equivalent of a purposive interpretation of a statute but
applied to charitable trusts. Courts will therefore go beyond a merely

76 Riggs v Palmer (1889) 115 NY 506 at p 509.

77 Riggs v Palmer (1889) 115 NY 506 at p 511.
78 Knight v Knight (1840) 3 Beav 148; 49 ER 58.
79 Alastair Hudson, Equity and Trusts (Routledge, 9th Ed, 2017) at p 1016.
80 Steven Gallagher, Equity and Trusts in Hong Kong: Doctrines, Remedies and
Institutions (Sweet & Maxwell, 2017) at p 259.
81 James Edelman, “The Equity of the Statute” in Philosophical Foundations of the Law
of Equity (Oxford University Press, 2020) at pp 369–370.
82 The four heads of recognised charitable trusts are set in The Commissioners for
Special Purposes of the Income Tax v Pemsel [1891] AC 531 and include relief of
poverty, advancement of education and religion and other purposes beneficial to
the community.
83 Mathew Harding, “Equity and Institutions” in Philosophical Foundations of the Law
of Equity (Oxford University Press, 2020) at pp 345–348.

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 412 Singapore Academy of Law Journal (2022) 34 SAcLJ

literal approach of the testator’s will (which would lead to an invalidity

of the charitable trust if the object of the trust is not certain or does not
exist) and give effect to the true intention of the testator. We can see this
liberal and facilitative equitable approach in Re Wright,84 where it was
said that, despite a subsequent failure of the charity because the recipient
organisation ceased to exist after the death of the testator, “once the funds
are dedicated to charity they will have to be used for charity [and] will
therefore be applied cy-près”.85 The same liberal approach was followed in
Re Harwood86 where, despite an initial failure of the charitable purpose
(the organisation never existed at all), the courts nonetheless went
through with what they construed as a general charitable intent of the
testator and the gift was applied cy-près.

21 Two requirements are necessary to open the door of cy-près:

first, it must be impossible to carry out the purpose of the trust. Second,
the testator’s gift must express a general charitable intent. It is however
interesting to note that the first requirement of impossibility of the initial
charitable intent, which is necessary in order to trigger the doctrine of
cy-près, is construed widely and in light of prevailing social and political
norms. For example, the court in Re Dominion Students’ Hall Trusts87
approved a scheme where a charitable trust, initially set by the settlor along
discriminatory lines (non-Caucasian students would be excluded from
a hostel) could nevertheless be administered on a non-discriminatory
basis.88 In the Canadian case of Canada Trust v Ontario Human Rights
Commission,89 the court invoked through cy-près an equitable variation
of the discriminatory terms90 (the trust initially applied only to white
protestants of British parentage) and allowed the trustees to administer
the charitable trust on a non-discriminatory basis.

84 Re Wright [1954] Ch 347.

85 Steven Gallagher, Equity and Trusts in Hong Kong: Doctrines, Remedies and
Institutions (Sweet & Maxwell, 2017) at p 261.
86 Re Harwood [1936] Ch 285.
87 Re Dominion Students’ Hall Trusts [1947] Ch 183.
88 Mathew Harding, “Equity and Institutions” in Philosophical Foundations of the Law
of Equity (Oxford University Press, 2020) at p 347; Alastair Hudson, Equity and
Trusts (Routledge, 9th Ed, 2017) at p 1021.
89 Canada Trust v Ontario (Human Rights Commission) (1990) 69 DLR (4th) 321.
90 Bruce H Ziff, Unforeseen Legacies: Reuben Wells Leonard and the Leonard Foundation
Trust (University of Toronto Press, 2000) at p 1050.

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 Reconciling the Rule of Law with
(2022) 34 SAcLJ Equitable Remedies 413

B. Equity as supplemental law

22 Miller91 argues that equity is a source of primary law by itself, in

the Hartian sense.92 These primary laws will govern conduct ex ante, and
not merely by ex post discretion. Hohfeld recognised also that equity does
supplement the law and observed that “from the time of the very earliest
cases now available down to the present, equity has always recognised and
vindicated what would now be called … exclusively equitable antecedent
(or primary) rights”.93 Even though the ancestral power of the Chancery
courts to issue new writs in order to deal with novel types of claims was
curtailed by the Statute of Westminster in 1258,94 that line of reasoning
of “equity as supplemental law” does resonate with the argument that
equity feeds the legal system with a wide range of rights. The notion
of equity creating new rules is also supported by Sarah Worthington,95
however, Lord Neuberger said in a speech delivered in 2010 at Hong
Kong University that “[modern] equity, as a source of invention, has, in
practice if not in strict principle, had its day”.96 Interestingly, this rather
conservative English approach can be contrasted with the Australian
position exemplified by the former Justice of the High Court of Australia
Michael Kirby97 who introduced the notion of “living equity” under
which equitable remedies are developed to meet modern needs and
consequently adapt to changing circumstances in society.

23 It is not, however, the intention of this article to overplay the

inventiveness of equity. In fact, there is a line of arguments that the

91 Paul B Miller, “Equity as Supplemental Law” in Philosophical Foundations of the Law

of Equity (Oxford University Press, 2020) at pp 101–106.
92 H L A Hart, The Concept of Law (Oxford University Press, 3rd Ed, 2012) at pp 79–99;
Nigel E Simmonds, Central Issues in Jurisprudence: Justice, Law and Rights (Sweet &
Maxwell, 5th Ed, 2018) at pp 154–155.
93 Wesley Hohfeld, “The Relations between Equity and Law” (1913) 11(8) Michigan
Law Review 537 at 543, fn 7.
94 Simon Chesterman, “Beyond Fusion Fallacy” (1997) 24(3) Journal of Law and
Society 350 at 352; David Hayton, “The Development of Equity and the ‘Good
Person’ Philosophy in Common Law Systems” (2012) 4 Conveyancer & Property
Lawyer 263 at 264; Steven Gallagher, Equity and Trusts in Hong Kong: Doctrines,
Remedies and Institutions (Sweet & Maxwell, 2017) at pp 11–12.
95 Sarah Worthington, Equity (Oxford University Press, 2nd Ed, 2006) at p 18; Sarah
Worthington, Equity and Property: Fact, Fantasy and Morals vol 4 (University of
Queensland Press, 2009) at pp 12–34.
96 Lord Neuberger, “Has Equity Had its Day?” speech at the Hong Kong University
Common Law Lecture 2010 (12 October 2010) at para 46. Available at: <https://
webarchive.nationalarchives.gov.uk/20131203071235/http://www.judiciary.gov.uk/
Resources/JCO/Documents/Speeches/mr-speech-hong-kong-lecture-12102010.
pdf> (accessed 19 November 2021).
97 Michael Kirby, “Equity’s Australian Isolationism” (2008) 8(2) Law and Justice
Journal 444.

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 414 Singapore Academy of Law Journal (2022) 34 SAcLJ

common law can also develop to meet new situations, and at times such
developments mirror those of equity. For example, the common law
doctrine of duress, originally targeting threats to the person, has been
expanded to cover duress of goods and economic duress. Meanwhile,
the equitable doctrine of undue influence is concerned with a party
being pressured to sign a contract. These two doctrines, while sitting
on opposite sides of the fence dividing equity and common law, are
nonetheless very similar. It is this resemblance between common law and
equitable developments which prompted Andrew Burrows to coin the
phrase “we do this at common law and we do the same in equity”.98

(1) Right of redemption

24 As an example of “equity as supplemental law”, Miller99 cites the

right of redemption under a mortgage. This right entitles the borrower
to reclaim a mortgaged property from a creditor as long as the debtor
has enough funds to repay the loan and “even though the legal date of
redemption has passed”.100 Sometimes, the lender incorporates conditions
before the mortgagor can exercise his right to redeem; if these conditions
(or “collateral advantages”) are unconscionable they are deemed “clogs”
or “fetters” (per Lindley MR in Santley v Wilde101) and render the right of
redemption unenforceable. In that case, equity will intervene and strike out
any collateral advantages that are unconscionable or oppressive because
they are considered a penalty restricting the right of the mortgagor to
redeem his property. Back in 1903, Sir Frederick Pollock observed that
“the doctrine of clogging threatens to become an intolerable nuisance, an
interference with the freedom of subject, … today it is an anachronism
and might with advantage be jettisoned”.102 For example, in the House of
Lords case of Noakes & Co Ltd v Rice103 the condition that the mortgagor
would only buy beer from the mortgagee (even after the mortgage had
been repaid) was deemed a restraint of trade and therefore a clog. As
per Lord Parker’s test in Kreglinger (G & C) v New Patagonia Meat and
Cold Storage Co Ltd,104 a condition will be deemed a clog if it is “unfair
and unconscionable, or in the nature of a penalty clogging the equity

98 Andrew Burrows, “We Do This at Common Law but that in Equity” (2002)
22(1) Oxford Journal of Legal Studies 1 at 16; Henry E Smith, “Equity as Meta-Law”
(2021) 130(5) The Yale Law Journal 1050 at 1064–1065.
99 Paul B Miller, “Equity as Supplemental Law” in Philosophical Foundations of the Law
of Equity (Oxford University Press, 2020) at pp 107–108.
100 SH Goo & Alice Lee, Land Law in Hong Kong (Lexis Nexis, 4th Ed, 2015) at p 808,
para 13.28.
101 Santley v Wilde [1899] 2 Ch 474 at 475.
102 Frederick Pollock, “Notes” (1903) 19(4) Law Quarterly Review 355 at 359.
103 Noakes & Co Ltd v Rice [1902] AC 24.
104 Kreglinger (G & C) v New Patagonia Meat and Cold Storage Co Ltd (1914) AC 25
at 56.

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 Reconciling the Rule of Law with
(2022) 34 SAcLJ Equitable Remedies 415

of redemption, or inconsistent with or repugnant to the contractual and

equitable right to redeem”.

(2) Relief against forfeiture

25 Janet Bignell105 writes that “the original power to grant relief

was applied by courts of equity … where the landlord’s insistence on the
strict legal right to forfeit was considered unconscionable”, this statement
shows that relief against forfeiture (and equity of redemption) can also be
read through the lens of remedial equity in the sense that the courts will
deny landlords and mortgagees from insisting on their strict legal rights
to the detriment of their tenants or mortgagors.

26 The need for such equitable right for the tenant was deemed
“manifest” by Lord Templeman in Billson v Residential Apartments
Ltd106 because a tenant could lose his asset, ie, his tenancy, by a “breach
of covenant which was remediable or which caused the landlord no
damage, … the forfeiture of any lease, however short, may unjustly enrich
the landlord at the expense of the tenant”. Such “manifest” equitable right
has translated into legislation in various common law jurisdictions107 and
has been reflected in recent decisions in Australia108 where the COVID-19
pandemic was factored in by the court when deciding whether to grant
relief to the lessee. This equitable jurisdiction of the court to grant relief
from forfeiture is not only limited to breaches of covenant to pay rent109
but can also be invoked even after the landlord has taken possession by
peaceful re-entry, as long as this re-possession is not made under a court
order.110 Real estate property (commercial, industrial or residential),
in the sense of the bundle of rights, is therefore protected by such
equitable remedy.

105 Janet Bignell, “Forfeiture, A Long Overdue Reform? A Discussion of Some of the
Deficiencies of the Law” (2007) 11(5) Landlord and Tenant Review 140 at 143.
106 Billson v Residential Apartments Ltd [1992] 1 AC 494 at 535B.
107 For example, in Hong Kong: section 21F of the High Court Ordinance (Cap 4),
section 69 of the District Court Ordinance (Cap 336), section 58(2) of the
Conveyancing and Property Ordinance (Cap 219); in Singapore: section 18A of the
Conveyancing and Law of Property Act 1886 (2020 Rev Ed).
108 Sneakerboy v Georges Properties Pty Ltd (2020) NSWSC 996. In this case, the New
South Wales Supreme Court noted at [65] and [66] that the lessee’s default in
payment was caused to some degree by the initial stages of the COVID-19 pandemic
and that this was relevant to the entitlement to relief against forfeiture.
109 SH Goo & Alice Lee, Land Law in Hong Kong (Lexis Nexis, 4th Ed, 2015) at p 694,
para 10.106.
110 SH Goo & Alice Lee, Land Law in Hong Kong (Lexis Nexis, 4th Ed, 2015) at p 694,
para 10.107.

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 416 Singapore Academy of Law Journal (2022) 34 SAcLJ

(3) Equity and property rights

27 The commonality between the two examples mentioned above

(right of redemption under a mortgage and relief against forfeiture) is
that equity protects property rights. Sarah Worthington explains that
equity has “pursued a dramatically expanded notion of property”.111 Two
strategies were instrumental for this expansion: on one hand, equity
enabled a development of commercial law and tradeable rights via
equitable assignments and on the other hand, equity created new forms
of property interests, the two prime examples being the trust and the
equitable charge.

(a) Equitable assignments

28 Clarke et al wrote that “in the early days of the common

law, all rights were unassignable [with some exceptions, notably the
assignment of shares through statutory enactments], however since
the 17th century the courts of equity have always permitted and given
effect to assignments of choses in action”.112 Assignments in equity do not
insist on the formalities (under s 9 of the Law Amendment and Reform
(Consolidation) Ordinance113 (“LARCO”)) demanded for a legal transfer
of a debt. The three conditions for such legal assignments of a chose in
action (eg, debt), are:114 (a) an absolute assignment (ie, no assignment by
way of a charge, no conditional assignments where there might be strings
attached, and no assignments of only part of the whole debt115); (b) in
writing; and (c) with express notice in writing given to the debtor. By
contrast, under an equitable assignment, it is sufficient to establish a clear
intention to transfer the intangible property (eg, debt, share or contractual
claim) to the assignee. Lord Macnaghten explained in Brandt’s (William)
Sons & Co v Dunlop Rubber Co Ltd116 that an equitable assignment “does
not always take that form [of a document] … it may be couched in the
language of command, it may be a courteous request, … the language is
immaterial if the meaning is plain, all that is necessary is that the debtor
should be given to understand that the debt has been made over by
the creditor to some third person”. Sarah Worthington concludes that,
as a matter of commercial law, the ease of equitable assignments (lack
of formality, can be by gift or contract) expanded the class of tradeable

111 Sarah Worthington, Equity and Property: Fact, Fantasy and Morals vol 4 (University
of Queensland Press, 2009) at p 7.
112 MA Clarke et al, Commercial Law: Text, Cases, and Materials (Oxford University
Press, 5th Ed, 2017) at p 870.
113 Cap 23 (HK).
114 China Gold Finance Ltd v CIL Holdings Ltd (2014) HKCU 2948 at [357]–[358].
115 Williams v Atlantic Assurance Co Ltd [1933] 1 KB 81.
116 Brandt’s (William) Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454 at 462.

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 Reconciling the Rule of Law with
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rights, which in turn was converted into new wealth for the society as a
whole.117

(b) New forms of property interests: Trusts

29 Under trust law, ownership of an asset can be subdivided

between the trustee (legal owner) and the beneficiary (owner in equity).
Worthington118 explains that equity gradually allows beneficiaries to
trade their rights under a trust, turning an originally personal right
(against the trustee) into a proprietary right. The consequence is that
the beneficiaries were protected in case of insolvency of the trustee, and
could remove their assets in the general pool from which the trustee’s
creditors would get paid. The beneficiaries also received protection in
equity in the case of knowing receipt119 and dishonest assistance120 and
could trace their assets into a new, substituted property (ie, tracing).
As a result of these new property rights, the trust, as an institution, has
been celebrated as “equity’s greatest contribution to the common law”121
and the legal historian Professor Maitland lauded it as the “greatest and
most distinctive achievement performed by Englishmen in the field of
jurisprudence”.122

30 The various forms of trusts enable the protection of property and

give effect to the intention of the person settling the trust (ie, the settlor).
Express trusts are declared intentionally by the settlor and the legal title
in the property is passed on to the trustees, whereas implied trusts (in
their various forms, ie, constructive and resulting) are imposed by the
courts in certain circumstances. Resulting trusts arise in two situations:123
either when the settlor fails to identify the beneficiary who will take the
equitable interest in the property (in that case the property will be held by
the trustee on a resulting trust for the settlor), or when a person contributes
to the purchase price of a property (typically a family home), then that
person acquires an equitable interest in the property under a resulting

117 Sarah Worthington, Equity (Oxford University Press, 2nd Ed, 2006) at pp 58–63.
118 Sarah Worthington, Equity and Property: Fact, Fantasy and Morals vol 4 (University
of Queensland Press, 2009) at p 20.
119 Bank of Credit and Commerce International (Overseas) Ltd v Akindele [2000]
EWCA Civ 502; Thanakharn Kasikorn Thai Chamkat v Akai Holdings Ltd (2010)
13 HKCFAR 479; Ho Ko Shing v Ho Chee (2015) HKEC 2507 at [95].
120 Royal Brunei Airlines v Tan Kok Ming [1995] UKPC 4; Ho Ko Shing v Ho Chee (2015)
HKEC 2507 at [96].
121 Sarah Worthington, Equity (Oxford University Press, 2nd Ed, 2006) at p 67.
122 Steven Gallagher, Equity and Trusts in Hong Kong: Doctrines, Remedies and
Institutions (Sweet & Maxwell, 2017) at p 93; Alastair Hudson, Equity and Trusts
(Routledge, 9th Ed, 2017) at p 36.
123 Westdeutsche Landesbank Girozentrale v Islington Borough Council [1996] AC 669;
Alastair Hudson, Equity and Trusts (Routledge, 9th Ed, 2017) at p 42.

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 418 Singapore Academy of Law Journal (2022) 34 SAcLJ

trust in the same size as the contribution in proportion to the total price
of the property.124 Constructive trusts are imposed by operation of the
law and can arise in many different situations but the main thread is that
these help to combat unconscionable behaviour. For example, when a
defendant steals something, he or she will hold the stolen property on a
constructive trust for the victim, thereby enabling the victim to recover
that stolen item or to recover the substituted property (eg, if the thief sold
the property, the victim would be able to recover the money received by
the thief).

(c) New forms of property interests: Equitable charges

31 As a matter of commercial law, equitable charges enable the

debtor company to remain the legal owner of the assets while at the
same time offering security to the creditor. The “floating” version of
these equitable charges, as exemplified by Romer LJ in Re Yorkshire
Woolcombers Association Ltd,125 allows the debtor company, or chargor, to
deal with these assets in the ordinary course of business (until the charge
crystallises when there is default in repayment of the loan), thus enabling
the chargor to generate more wealth while at the same time using the value
of the asset under the equitable charge as security for a loan. Lord Millett
explained in the Privy Council case of Agnew v Commissioner of Inland
Revenue126 that “the critical feature which distinguished a floating charge
from a fixed charge lay in the chargor’s ability, freely and without the
chargee’s consent, to control and manage the charged assets and withdraw
them from the security”.127

32 By contrast, the common law security devices such as pledges,

liens and mortgages do not provide such flexibility and, crucially for this
article, do not provide new forms of proprietary interests; these only
amount to modified common law rights of ownership and/or possession.
Indeed, pledges (or pawns) rely on the pledgor debtor giving possession
of the pledged asset to the pledgee creditor. Common law liens give to
the creditor the right to retain the assets until the debtor clears the debt
owed. Unlike pledges, liens are only indirect security interests because the
giving of possession of the property is not initially meant as security. The
prime example of such common law lien is the garage owner being able
to keep the car that was entrusted to him for repair until the car owner
settles the repair fee to the garage owner. Lastly, common law mortgages
involve the passing of the legal title to the creditor “on the understanding

124 Dyer v Dyer (1788) 2 Cox Eq Cas 92.

125 [1903] 2 Ch 284 at 295.
126 Agnew v The Commissioner of Inland Revenue [2001] UKPC 28.
127 Agnew v The Commissioner of Inland Revenue [2001] UKPC 28 at p 710F.

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 Reconciling the Rule of Law with
(2022) 34 SAcLJ Equitable Remedies 419

that [the] title will be retransferred if the debt is repaid”.128 In light of

the advantages of the floating charge as opposed to these common law
security devices, Sarah Worthington concludes that equitable floating
charges “illustrate the flexibility of equitable concepts of property and
the commercial motivations which compel this flexibility”,129 they are
“valuable equitable additions to the property firmament”.130

33 This section concludes by highlighting the age-old academic

debate of the nature of a beneficiary right under a trust: is this a
proprietary right enforceable against the whole world, a personal right
enforceable against a given individual, or a sui generis right against a right
as per the theory proposed by McFarlane and Stevens?131 According to
the latter theory, the right of the beneficiary does not attach to the trust
property itself but is simply a right against the right of the legal owner,
ie, the trustee.132 It is noted that the Singapore Court of Appeal recently
endorsed by way of obiter the “right against a right theory” in Ernest
Ferdinand Perez De La Sala v Compañia De Navegación Palomar SA.133 It
is beyond the scope of this article to explore in more depth the nature of
trust property, but suffice to say, for the purpose of this inquiry, that the
modern equitable expansion into property rights represents a key feature
of equity as opposed to mere legal ownership.

34 Having delineated the two strands of the rule of law and

attempting to categorise equity along some broad and recognisable
patterns, this article now turns to the gist of the issue by confronting
these issues together.

128 Sarah Worthington, Equity and Property: Fact, Fantasy and Morals vol 4 (University
of Queensland Press, 2009) at p 31, note 21.
129 Sarah Worthington, Equity and Property: Fact, Fantasy and Morals vol 4 (University
of Queensland Press, 2009) at p 32.
130 Sarah Worthington, Equity and Property: Fact, Fantasy and Morals vol 4 (University
of Queensland Press, 2009) at p 29.
131 Ben McFarlane & Robert Stevens, “The Nature of Equitable Property” (2010)
4 Journal of Equity 1.
132 Elena Christine Zaccaria, “The Nature of the Beneficiary’s Right Under a Trust:
Proprietary Right, Purely Personal Right or Right against a Right?” (2019) 135 Law
Quarterly Review 460 at 461.
133 [2018] 1 SLR 894 at [145]: “It is for this reason that beneficial ownership has been
described as ‘a right against a right’, i.e. a right to constrain or control the way
another person exercises his right to deal with a thing, rather than a right against the
thing itself.”

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 420 Singapore Academy of Law Journal (2022) 34 SAcLJ

IV. Reconciling equity with the rule of law

A. Equity and the formalist version of the rule of law

(1) Discretion

35 Prima facie, the argument against equity is that its intervention

is discretionary (therefore infringing the certainty necessary for the
formalist rule of law theory) whereas the remedies at common law are as
of right. Indeed, the court will grant specific performance, an injunction
or disgorgement (all being equitable remedies) only if the judge allows it.
The picture that emerges is therefore one where equity is the conscience
of the law, and it can only achieve justice by “creating exceptions to
established rules”,134 while the common law is perceived as objective, neat
and rational.

36 Is the discretion afforded by equity inherently repugnant to

the rule of law, especially its formalist account? In equity’s early days,
it probably was. John Selden’s jibe that equity was a “roguish thing” and
varied with the Chancellor’s foot135 was a response to the uncertainty of
individualistic judgments given by early Chancellors. However, modern
equity is not all about discretion. In its function as supplementing the
law, equity assumes a legal role in a principled way that is very much
welcomed by commercial lawyers.136 To this extent, fears that equity’s
uncertainty is offensive to the certainty required by commercial law are
very much overstated. Indeed, Lord Millet wrote that “equity’s place in
the law of commerce, long resisted by commercial lawyers, can no longer
be denied”.137 For example, equitable proprietary remedies expounded
in Part II of this article (under the heading equity and property rights)
are not granted on a discretionary basis, otherwise the law of insolvency
would not countenance them. This being said, it is noteworthy to
acknowledge the existence of the remedial constructive trust, as opposed
to the institutional trust. Lord Browne-Wilkinson drew the distinction
between these two species of trust in Westdeutsche Landesbank
Girozentrale v Islington London Borough Council when he said that the

134 Nigel E Simmonds, Central Issues in Jurisprudence: Justice, Law and Rights (Sweet &
Maxwell, 5th Ed, 2018) at p 201.
135 Steven Gallagher, Equity and Trusts in Hong Kong: Doctrines, Remedies and
Institutions (Sweet & Maxwell, 2017) at pp 17–18.
136 Mark Leeming, “The Role of Equity in 21st Century Commercial Disputes – Meeting
the Needs of Any Sophisticated and Successfully Legal System” (2019) 47 Australia
Bar Review 137.
137 PJ Millett, “Equity’s Place in the Law of Commerce” (1998) 114 Law Quarterly
Review 214 at 214.

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 Reconciling the Rule of Law with
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remedial constructive trust “operates retrospectively”,138 it is an award by

the court at the date of judgment and is therefore very much a product
of discretion, as a relief from fraudulent or wrong-doing behaviour. This
discretionary remedy is recognised in Australia,139 Canada,140 the US
and Singapore but neither in England nor in Hong Kong.141 It is noted,
however, that the doctrinal details of remedial constructive trusts are in
no way uniform across the various common law jurisdictions.

37 In addition, where the courts exercise discretion, former Chief

Justice of the High Court of Australia and former non-permanent judge
of the Court of Final Appeal Sir Anthony Mason142 explains that the initial
indeterminacy of new equitable rules will eventually mature into more
determinate principles as they are constantly refined by judges through
subsequent judgments. This is an ongoing process which reflects the
constant adaptation of the law to modern societal needs. For example,
the rule of incomplete gifts underwent a potential sea change with the
English Court of Appeal decision in Pennington,143 where the concept of
unconscionability was used in order to make a finding of complete gift
in a somewhat inchoate situation. In that case, the donor (of shares in a
private company) did not do everything in her power, as the traditional
doctrine in Re Rose v Inland Revenue Commissioners144 requires, but did
only part of it. In line with the argument by Mason, Matthew Harding
argues that “the emphasis on donee reliance might crystallise into a
more determinate principle”.145 Arguably, the factors that went into the
“unconscionability” test in Pennington were vague and uncertain, and
some commentators argued that this case was a harbinger of equity on the
move.146 Indeed, by offering so little guidance for further applications of
the legal principle, the English Court of Appeal basically left later courts
to “flesh out this rule for themselves, making their own determinations
as to how the rule should be understood and applied”.147 Lord Denning’s

138 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996]

AC 669 at 714.
139 Muschinski v Dodds (1985) HCA 78.
140 Sun Indalex Finance LLC v United Steelworkers (2013) SCC 6.
141 Ying Khai Liew, “Proprietary Estoppel Remedies in Hong Kong: Lessons from
Singapore, England and Australia” (2020) 50 Hong Kong Law Journal 109.
142 Anthony Mason, “The Place of Equity and Equitable Remedies in the Contemporary
Common Law World” (1994) 110 Law Quarterly Review 238 at 258.
143 Pennington v Waine [2002] 1 WLR 2075.
144 Re Rose v Inland Revenue Commissioners [1952] Ch 499.
145 Matthew Harding, “Equity and the Rule of Law” (2016) 132 Law Quarterly
Review 278 at 287–288.
146 Sean Sutherland, “Defying Easy Explanations – The Case of Pennington v Waine
18 Years On” (2020) 26(5) Trust & Trustees 404.
147 Charlie Webb, “The Myth of the Remedial Constructive Trust” (2016) 69(1) Current
Legal Problems 353 at 368.

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 422 Singapore Academy of Law Journal (2022) 34 SAcLJ

aspiration to create new rights in equity where the needs of justice

demand it148 found echo in Arden LJ’s strive to temper the wind to the
shorn lamb.149 Prima facie, therefore, Pennington eroded the equitable
maxim that equity will not perfect an imperfect gift. Eighteen years after
the decision was made, courts in the common law world have yet to come
to terms with its potential far-reaching implications. Two lessons can be
drawn from this development: first, the sheer uncertainty inherent in the
test of unconscionability in Pennington is prima facie an affront to the
thin rule of law doctrine, and second, the case offers an opportunity for
later courts to develop the judgment into a more mature legal principle
through specific guidelines, either to confine Pennington to its peculiar set
of facts (thereby rendering the case almost an outlier), or to rationalise it
by treating it as a case of proprietary estoppel, or to use its ratio to expand
the grounds of fairness and intention. Since the release of the decision in
Pennington in 2002, several judgments have followed suit, such as Curtis v
Pulbrook150 in England (where Briggs J arguably rationalised Pennington
into a case of proprietary estoppel) and Yeung Luk Lin v Chau Sing Wai151
in Hong Kong. While the state of development of Pennington has not yet
crystallised into a more mature and certain principle, quite far from it in
fact, it is nonetheless argued that this ongoing process of refinement and
perfection lends support to the argument that equitable remedies are in
constant flux to adapt to the needs of substantive justice, a key foundation
of the thick rule of law doctrine.

38 Further, the discretion inherent to remedial equity does not seem

to be that different from discretion at common law. For example, judges
do need to apply an element of individualised discretion when assessing,
at common law, various issues such as self-defence or provocation (in
criminal law), whether a duty of care has been infringed by a negligent
defendant (in tort law), or whether a common law estoppel has been
created (in contract law). Therefore, at law, courts rely on the standard of
reasonableness (very often the test is that of the “reasonable man”), that
margin of appreciation inherent in the common law test can arguably be
approximated to the equitable standard of fairness and conscience. Thus,
Sarah Worthington concludes that “both the common law and equity
employ discretion in adjudication”.152

148 Mark Pawlowski, “Is Equity Past the Age of Childbearing?” (2016) 22(8) Trust &
Trustees 892 at 892.
149 Pennington v Wayne [2002] 1 WLR 2075 at [54].
150 Curtis v Pulbrook [2011] EWHC 167 at [43].
151 Yeung Luk Lin v Chau Sing Wai (2012) HKEC 365.
152 Sarah Worthington, Equity (Oxford University Press, 2nd Ed, 2006) at p 334.

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 Reconciling the Rule of Law with
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(2) Conscience and morality

39 Worthington challenges the view that equity is the sole

repository of conscience-based adjudication. The fuzziness inherent to
an equitable standard of unconscionability would prima facie indicate a
potential violation of the formalist version of the rule of law, precisely
because rules would not be certain and would vary on a case by case
basis. The image that emerges is one where equity follows natural law
and morality (Nussbaum153 goes as far as equating the tradition of
equity with mercy) whereas law is seen as positivist and “imposing a
set of mandatory rules … less tightly tied to any notion of morality”.154
A first response was provided by Lord Nottingham, the “father of equity”,
who made the crucial distinction in Cook v Fountain155 between private
conscience (“naturalis et interna”), which equity is not concerned with,
and public or civic conscience (“civilis et politica”) which is instead
what equity is all about. This divide between two strands of conscience
enables Nottingham to “reconcile conscience with the construction of
a ruled system of equity”.156 Thus, the behaviour of the defendant is not
judged by the individual morality of the Chancellor, but by the standard
of the conscience of the society at large. Sarah Worthington further
argues that the divide between equity following conscience and law
following rules free from morality is simply not true. The prime example
of common law rules infused with morality is the neighbour principle
introduced in the landmark case of Donoghue v Stevenson157 where the
Christian, and undeniably moral, precept “thou shalt love thy neighbour
as thyself ” inspired Lord Atkin to craft the modern test of duty of care
at common law.158 Lord Atkin drew from the moral and philosophical
themes of the Good Samaritan159 to pen this monumental judgment
which would eventually become one cornerstone at common law, thereby
instrumentalising morality to reorganise the power relationship between
consumers and manufacturers.160 Another example of legal rule built upon
conscience is the common law tort of defamation which arguably has a

153 Martha C Nussbaum, “Equity and Mercy” (1993) 22(2) Philosophy & Public
Affairs 83.
154 Sarah Worthington, Equity (Oxford University Press, 2nd Ed, 2006) at p 329.
155 (1733) 3 Swan 585 at 600.
156 Dennis R Klinck, “Lord Nottingham and the Conscience of Equity” (2006)
67(1) Journal of the History of Ideas 123 at 126.
157 Donoghue v Stevenson [1931] AC 562.
158 Richard Castle, “Lord Atkin and the Neighbour Test: Origins of the Principles of
Negligence in Donoghue v Stevenson” (2003) 7(33) Ecclesiastical Law Journal 210.
159 Erika Chamberlain, “Lord Atkin’s Opinion in Donoghue v Stevenson” (2010)
4(1) Law and Humanities 91.
160 Honni Van Rijswijk, “Mabel Hannah’s Justice: A Contextual Re-Reading of
Donoghue v Stevenson” (2010) 5 Public Space 1.

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 424 Singapore Academy of Law Journal (2022) 34 SAcLJ

normative foundation, according to some scholars,161 based on morality.

Thus, the fault line of morality does not neatly follow the common law–
equity divide.

40 Further, the tort of deceit is the archetype of a common law

doctrine rooted in moral foundation. From both a deontological theory
and from a Kantian perspective the very act of lying undermines any
subsequent contractual relation;162 “fraud unravels everything” as
Lord Denning famously said.163 A lie distorts the reasoning of the person
lied to and subverts the autonomy of the victim. David Strauss went as
far as arguing that lying is even worse than coercion because it is more
insidious, he said that “lying is a kind of mental slavery that is an offence
against the victim’s humanity”.164

(3) Overlaps between equity and common law

41 In addition, the doctrines of duress (at law) and undue influence

(in equity) bear resemblance in their underlying moral rationale. Hence
the effort, albeit unsuccessful, by Lord Denning in Lloyds Bank Ltd v
Bundy165 to find a unifying thread between these two doctrines.166 Some
scholars go even as far as suggesting to jettison the equitable doctrine
of actual undue influence precisely because of its confusion and overlap
with the common law doctrine of duress.167 It is often argued that the
moral purpose of the common law doctrine of duress is to protect the
autonomy of the weaker party but also to avoid the oppressing party
from benefitting from his own wrongdoing.168 This was emphasised by
Lord Scarman in The Universe Sentinel,169 where he expounded the two

161 Lawrence McNamara, “Moral Judgment and Conceptions of Reputation” in

Reputation and Defamation (Oxford University Press, 2007) at pp 37–59 and
192; Kim Treiger‐Bar‐Am, “Defamation Law in a Changing Society: The Case of
Youssoupoff v Metro‐Goldwyn Mayer” (2000) 20(2) Legal Studies 291 at 319.
162 Larry Alexander & Emily Sherwin, “Deception in Morality and Law” (2003)
22(5) Law and Philosophy 393 at 396.
163 Lazarus Estates Ltd v Beasley [1956] 1 QB 702 at 712.
164 David Strauss, “Persuasion, Autonomy, and Freedom of Expression” (1991)
91(2) Columbia Law Review 334 at 354.
165 [1975] QB 326.
166 Marcus Moore, “Why Does Lord Denning’s Lead Balloon Intrigue Us Still? The
Prospects of Finding a Unifying Principle for Duress, Undue Influence and
Unconscionability” (2018) 134 Law Quarterly Review 257.
167 Anja Kantic, “How a Clarification of Duress Renders the ‘Equitable’ Doctrine
of Actual Undue Influence Futile” (2015) 26(3) New Zealand Universities Law
Review 642.
168 Stephen Smith, “Contracting Under Pressure” (1997) 56(2) Cambridge Law
Journal 343 at 344.
169 Universe Tankships Inc of Monrovia v International Transport Workers Federation
[1983] 1 AC 366 at 400.

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 Reconciling the Rule of Law with
(2022) 34 SAcLJ Equitable Remedies 425

elements for the wrong of duress: (a) pressure amounting to compulsion

of the will of the victim; and (b) the illegitimacy of the pressure exerted.
As a matter of morality, the principle that one shall not be able to enforce
an obligation obtained by wrongdoing is uncontroversial. There is clearly
an overlap here with the reasoning grounded in equity in Riggs v Palmer
seen above.

42 Similarly, it is arguable that the common law test of Wednesbury170

unreasonableness for judicial review (in administrative law) and the
equitable test of good faith for fiduciaries (eg, Howard Smith Ltd v Ampol
Petroleum Ltd171 in the context of company law and directors) are the
same.172 The commonality between these two doctrines is that they
both regulate a decision making power, in administrative law for the
Wednesbury test and in company law or trust law for the test of good faith
for fiduciaries. Further, the factors which will enter into the equation
are more or less the same for both tests, indeed, both doctrines place a
premium on whether the decision making power was exercised by the
person duly authorised to do so173 and whether that power was exercised
legitimately, ie, for the reasons under which the power was conferred in
the first place.174 This analogy was discussed explicitly in Edge v Pensions
Ombudsman175 and Lord Woolf himself wrote in the House of Lords case
of Equitable Life Assurance Society v Hyman that there is a “similarity
between the role of the courts on judicial review and in relation to a
fiduciary duty”.176 In addition, the Chief Justice of the High Court of
Australia Robert French delivered a keynote speech on the same topic.177

43 In conclusion, neither equity’s discretionary remedies nor its

moral foundation affords compelling ground for the suggestion that
equity frustrates the rule of law in its formalist version. Otherwise, both
law and equity would do so.

170 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223.
171 [1974] AC 821.
172 Evan Fox-Decent, “The Constitution of Equity” in Philosophical Foundations of the
Law of Equity (Oxford University Press, 2020) at p 126. Sarah Worthington, Equity
(Oxford University Press, 2nd Ed, 2006) at p 144.
173 Factors include fettering of discretion or not, non-delegation, etc.
174 Factors include relevant or irrelevant considerations taken into account, good faith,
proper or improper purposes, etc.
175 [2000] Ch 602 at 628–630.
176 [2002] 1 AC 408 at [20].
177 Chief Justice Robert French, “The Interface between Equitable Principles and Public
Law”, speech at The Society of Trust and Estate Practitioners (29 October 2010),
available at: <https://cdn.hcourt.gov.au/assets/publications/speeches/current-
justices/frenchcj/frenchcj29oct10.pdf> (accessed 19 November 2021).

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 426 Singapore Academy of Law Journal (2022) 34 SAcLJ

B. Equity and the substantive version of the rule of law

(1) Protection of property

44 While Peter Birks178 argues that constructive trusts do not arise on

a coherent basis, Alastair Hudson179 objects that they “come into existence
as a response to various categories of unconscionable behaviours”; this is to
ensure that an “ethical notion of good conscience is maintained in English
law”. To be fair, Birks’s argument gains some traction when considering
the various types of constructive trusts. Indeed, the tests for the doctrines
of knowing receipt,180 dishonest assistance,181 unlawful profits acquired
by fiduciaries,182 common intention constructive trusts in the field of land
law and conveyancing,183 liability to prevent conflict of interest and breach
of trust184 or to prevent fraud185 are all phrased differently. However,
what matters from a jurisprudential perspective is not the mechanics
of each and every single constructive trust, it is instead the high-level
principles that underpin their rationales. Lord Browne-Wilkinson said
in the landmark case of Westdeutsche Landesbank Girozentrale v Islington
Borough Council that “equity operates on the conscience of the owner of
the legal interest”.186 This statement reminds us that the moral purpose of
equity is to “correct men’s consciences for fraud, breach of trusts, wrongs
and oppressions”, as per Lord Ellesmere in the Earl of Oxford Case. In
the US, Cardozo J wrote in Beatty v Guggenheim Exploration Co187 that
“a constructive trust is the formula through which the conscience of
equity finds expression” and Lord Denning said in Gissing v Gissing that
a common intention constructive trust would be established “wherever
the trustee has so conducted himself that it would be inequitable to allow
him to deny to the cestui que trust [the beneficiary] a beneficial interest
in the land”.188

178 Peter Birks, An introduction to the Law of Restitution (Clarendon Press, 1989) at p 89.
179 Alastair Hudson, Equity and Trusts (Routledge, 9th Ed, 2017) at p 580.
180 Bank of Credit and Commerce International (Overseas) Ltd v Akindele [2000] EWCA
Civ 502; Ho Ko Shing v Ho Chee (2015) HKEC 2507 at [95].
181 Ho Ko Shing v Ho Chee (2015) HKEC 2507 at [96]; Royal Brunei Airlines Sd Bhd v
Tan [1995] UKPC 4; Twinsectra Ltd v Yardley [2002] 2 AC 164; Barlow Clowes
International Ltd v Eurotrust International Ltd [2005] UKPC 37.
182 Attorney-General for Hong Kong v Reid [1994] 1 AC 324; FHR European Ventures LLP v
Cedar Capital Partners LLC [2014] UKSC 45. See also Lionel Smith, “Constructive
Trusts and the No-Profit Rule” (2013) 72(2) Cambridge Law Journal 260.
183 Jones v Kernott [2012] 1 AC 776; Stack v Dowden [2007] 2 AC 432.
184 Boardman v Phipps [1967] 2 AC 46.
185 Binions v Evans [1972] Ch 359; Peffer v Rigg [1977] 1 WLR 285.
186 [1996] AC 669 at 705C.
187 (1919) 122 NE 378 at 380.
188 [1971] AC 886 at 905C.

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 Reconciling the Rule of Law with
(2022) 34 SAcLJ Equitable Remedies 427

45 The conclusion to be drawn from all these examples is that,

notwithstanding the different tests inherent to the variety of trusts,
constructive trusts arise from a situation where the defendant knows some
factors which affects his conscience in relation to the property in question.
Alastair Hudson argues that this is a “perfectly viable underpinning
principle on which to base a legal concept like the constructive trust”.189
Ultimately, and to draw the link with a substantive rule of law theory, this
is to serve a morally informed conception of justice designed to protect
property. To this end, the courts apply different tests to shield property
from all types of dishonest and fraudulent behaviour. The substantive
rule of law of a modern liberal and democratic society where property
is a cornerstone of its foundation190 requires the safety valve of equity
in order to deal with unconscionability, fraudulent, opportunistic and
stickler behaviours.191

46 However, the rule of law should also empower people to live

autonomous lives and let them decide how to arrange their affairs
freely. The expanded notion of property expounded in Part III.B. of this
article192 where equity plays a crucial and decisive role in creating the
equitable assignments, equitable charges and various trusts (including
the straightforward express trust) brings a measure of rule of law to
private relations. Finally, to the extent that housing is property (in the
sense of bundle of rights), the equity of redemption and the right of relief
from forfeiture can be understood as “inchoate version of contemporary
social rights”193 where people have the right to adequate housing.

189 Alastair Hudson, Equity and Trusts (Routledge, 9th Ed, 2017) at p 581.
190 Ronald A Cass, “Property Rights Systems and the Rule of Law” in The Elgar
Companion to the Economics of Property Rights (Edward Elgar Publishing, 2004) at
p 222; Sean Mattie, “Prerogative and the Rule of Law in John Locke and the Lincoln
Presidency” (2005) 67(1) The Review of Politics 77 at 84.
191 Henry E Smith, “Property, Equity, and the Rule of Law” in Private Law and the Rule
of Law (Oxford University Press, 2014) at pp 224–246 and 242; Dennis Klimchuk,
“Equity and the Rule of Law” in Private Law and the Rule of Law (Oxford University
Press, 2014) at p 252.
192 Sarah Worthington, Equity (Oxford University Press, 2nd Ed, 2006); Sarah
Worthington, Equity and Property: Fact, Fantasy and Morals vol 4 (University of
Queensland Press, 2009).
193 Evan Fox-Decent, “The Constitution of Equity” in Philosophical Foundations of the
Law of Equity (Oxford University Press, 2020) at p 142.

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 428 Singapore Academy of Law Journal (2022) 34 SAcLJ

(2) Abuses of rights

47 For Klimchuk and Smith, “prevention and rectification of abuses

of right is the very essence of equity”.194 Harding195 also ascribes to equity
this fundamental function. He takes the example of a hypothetical society
in which the legal system invariably upholds legal rights on which abusers
and sticklers rely (in that world, the defendant in Hollywood Silver Fox
would have won). He then shows that confidence in contract law will
start to erode and people might begin to think that the legal system is
unjust and biased towards the powerful and unscrupulous. As a result,
Harding explains that citizens would “cease to engage with the law of
contract and, to this extent, the rule of law is likely to be compromised,
the normative guidance that contract law once gave to citizens … is likely
to be frustrated”.196 This line of argument demonstrates that equity, while
tolerating discretion in its remedial jurisdiction, may nonetheless support
the rule of law by “mitigating the potentially harsh effect of primary legal
rules and contributing to conditions under which citizens are likely
to form and maintain a disposition to engage with law”.197 As a result,
Klimchuk’s and Smith’s stickler theory is very much consistent with the
rule of law because a legal system should not countenance abuses of right
which, if tolerated, would invariably “undermine [the law’s] underlying
values, including the value of independence and equality”.198

48 For Dworkin, “Riggs v Palmer shows that the law does not consist
entirely of rules: it also includes principles”.199 Riggs therefore represents
the paragon of a morally informed judgment grounded in the principle
that murderers should not benefit from their crimes,200 which means, in
turn, that a decision founded on equitable construction fulfils a socio-
moral goal of achieving justice. A finding in favour of the grandson

194 John C P Goldberg & Henry Smith, “Wrongful Fusion: Equity and Tort” in Equity
and Law: Fusion and Fission (Cambridge University Press, 2019) at p 318.
195 Matthew Harding, “Equity and the Rule of Law” (2016) 132 Law Quarterly
Review 278.
196 Matthew Harding, “Equity and the Rule of Law” (2016) 132 Law Quarterly
Review 278 at 299.
197 Ben McFarlane, “Avoiding Anarchy?: Common Law v. Equity and Maitland v.
Hohfeld” in Equity and Law: Fusion and Fission (Cambridge University Press, 2019)
at p 349.
198 Paul B Miller, “Equity as Supplemental Law” in Philosophical Foundations of the Law
of Equity (Oxford University Press, 2020) at p 100.
199 Nigel E Simmonds, Central Issues in Jurisprudence: Justice, Law and Rights (Sweet &
Maxwell, 5th Ed, 2018) at p 200.
200 Ronald Dworkin, Taking Rights Seriously (Harvard University Press, 1977) at
pp 28–29.

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 Reconciling the Rule of Law with
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would have allowed him to be a stickler for his rights in a bad way,201
which would be unconscionable and would have gone counter to public
policy. Riggs therefore stands for the proposition that Aristotelian equity
is fundamentally anti-opportunistic and that “the courts will not aid
people in profiting from their own wrongs”.202 In a similar vein, the
English court in Re Crippen203 found that the man who had murdered
his wife “held any property which he acquired from his unconscionable
act on constructive trust so that he could not take a benefit from it for
himself ”.204 Sir Evans commented in that case that “no person can obtain,
or enforce, any rights resulting from his own crime”.205 Other examples
which follow the same principles can be mentioned, such as Scotching v
Birch,206 Cleaver v Mutual Reserve Fund Life Association,207 and R v Chief
National Insurance Commissioner, ex p Connor208 where the court held
that the “murderer will not be entitled to take a beneficial interest under
the widow’s pension entitlements of his murdered wife”.209

49 To the extent that this ideal of doing justice is deeply seated

into the normative foundation of a substantive rule of law, equity in
its remedial form performs a much needed function in our modern
societies. Anthony Mason celebrated “the underlying values of equity
centred on good conscience” which, according to him, “will almost
certainly continue to be a driving force in the shaping of the law unless
the underlying values and expectations of society undergo a radical
alteration”.210

(3) Autonomy

50 Cy-près interventions show two salient features: on one hand

these help people to realise their altruistic goals, in a self-determining
way. Indeed, to the extent that the cy-près doctrine, and trust law in
general, assist people in realising their wishes, it can be concluded that
equity fulfils a political ideal of autonomy and freedom from interference

201 Dennis Klimchuk, “Equity and the Rule of Law” in Private Law and the Rule of Law
(Oxford University Press, 2014) at p 255.
202 Henry E Smith, “Property, Equity, and the Rule of Law” in Private Law and the Rule
of Law (Oxford University Press, 2014) at p 243.
203 (1911) P 108.
204 Alastair Hudson, Equity and Trusts (Routledge, 9th Ed, 2017) at p 518.
205 Steven Gallagher, Equity and Trusts in Hong Kong: Doctrines, Remedies and
Institutions (Sweet & Maxwell, 2017) at p 387.
206 [2008] EWHC 844 (Ch).
207 [1892] 1 QB 147.
208 [1981] 1 QB 758.
209 Alastair Hudson, Equity and Trusts (Routledge, 9th Ed, 2017) at p 518.
210 Anthony Mason, “The Place of Equity and Equitable Remedies in the Contemporary
Common Law World” (1994) 110 Law Quarterly Review 238 at 258.

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 430 Singapore Academy of Law Journal (2022) 34 SAcLJ

from the state. In short, it respects human dignity, and this is one
core foundation of the substantive rule of law. In addition, one of the
prerequisites to activating the cy-près doctrine is the impossibility to
carry out the purpose of the charitable trust in the first place. As a matter
of general trust law, when a private trust fails, the funds left by the settlor
simply go back to the settlor’s estate. In the case of testamentary failure,
this can have serious consequences because the funds will pass to the
residual legatee or the testator’s next of kin. It is therefore argued that,
far from interfering with the settlor’s autonomy, the cy-près doctrine is
actually the last bulwark protecting the original intention of the settlor
or testator. Indeed, in a situation where the charitable trust cannot be
fulfilled, the cy-près doctrine offers at least the possibility that the funds
left by the testator will be used for a charitable purpose similar to what
was originally conceived, instead of simply be diverted to the common
pool of assets.

51 On the other hand, the tendency of the courts to alter terms

which are discriminatory, while still upholding the underlying general
charitable intent, reflects the need for the judiciary to follow prevailing
social and political norms. Stephen Hall said that the common law “adapts
to the changed social realities … by incremental doctrinal changes”211 and
is therefore essentially a customary system. Thus, on a macro level, the
rule of law values embodied in a particular society and at any particular
point in its history resonate in equitable decisions and cy-près judgments
are evidence of that.

V. Conclusion

52 This article challenged the view that equity undermines the

rule of law. It reviewed different equitable doctrines and measured these
against both accounts of the rule of law. Against the substantive rule
of law, equity performs multiple functions: it restrains unconscionable
reliance on strict legal rights, protects property through its expansion
of tradeable rights, and empowers people to live autonomous lives, free
from interference. Finally, it was demonstrated that the conventional
wisdom of holding equity’s hallmarks of indeterminacy, discretion and
conscience as being repugnant to a formalist account of the rule of law,
does not hold up to scrutiny. Indeed, the divide between common law
doctrines and equitable doctrines is blurred on a number of accounts;
there are some overlaps spanning the realms of discretion and conscience

211 Stephen Hall, Law of Contract in Hong Kong: Cases and Commentary (LexisNexis,
5th Ed, 2017) at p 50.

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 Reconciling the Rule of Law with
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or morality which do not warrant the suspicion that equity infringes the
formalist theory of rule of law.

53 In short, equity is not only compatible with the rule of law, taken
in its widest sense and encompassing both theories, but is also a shining
beacon of liberal democratic societies which uphold the plural versions
of the rule of law. This article concludes with the words of Anthony
Mason who lauded the “onward march of equity” and for whom equity’s
“concerns with standards of conscience, fairness, equality and protection
of relationships of trust and confidence … equip it better to meet the
needs of liberal democratic society”.212

212 Anthony Mason, “The Place of Equity and Equitable Remedies in the Contemporary
Common Law World” (1994) 110 Law Quarterly Review 238 at 239.

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