Legal interests and equitable interests compared

Discretionary nature of equity

Unlike a right recognisable in law, all equitable rights are enforceable only at the discretion of the court. Thus, although since the Supreme Court of Judicature Acts 1873 and 1875, the rules of law and equity have both been administered by the same courts, it is important to know whether one is dealing with a legal interest or an equitable interest.

In the context of equitable rights, the maxim ‘he who comes to equity must come with clean hands’ is of great importance. A person may be able to show he has an equitable interest in land, but this is of little use to him if he has ‘dirty hands’, as he could be refused any remedy by the courts because of his bad behaviour. For example, if he claims to have an equitable easement entitling him to walk across another estate owner’s land, he may find he is refused a remedy to enforce his right of way if he has behaved improperly.

Legal rights, however, are enforceable as of right. Once the existence of the right is established it is not really open to the court to consider the merits of the situation before giving a remedy. Thus, if a person with a legal easement causes damages, the land owner may be able to claim compensation but the easement will still be enforced by the courts.

Enforcement against third parties

A major difference between legal and equitable rights used to be found in the rules governing the enforceability of those rights against a third party, for example, against the purchaser of the estate which is subject to the rights. Thus, while a legal easement over a piece of land could be enforced against a purchaser of land, it might not be enforceable against certain purchasers.

This was a rule which had its origins in the separate evolution of law and equity. Legal rights were said to be rights in rem; ie, rights in the land itself and hence generally could be enforced against any person who acquired an estate or interest in the land. This was expressed by saying that legal rights were ‘good against the world.’

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