A growing body of literature has emphasised the role of equity as a body of second order principles. These scholars argue that what makes equity distinct is that it assumes a particular outcome at common law, but then controls or disables one party's insistence on her legal entitlements. Where do equitable bars to relief fit within such accounts? This article argues that equitable bars to relief fit comfortably with the view that equity is second order law. This is for a simple reason: equity prevents the unjust exercise of legal entitlements. However, equitable rules are also amenable to being exercised unjustly. To prevent equitable rules being abused, equitable doctrines require some limited discretion to be built in. If this were not the case, then the general law would require a third set of rules to control equity and then a fourth set of rules to control those rules (ad infinitum).
At a broad level of generality, the orthodox approach to interpreting contracts, trusts, wills, security documents, company constitutions (etc.) is the same: a search for the objective meaning to be attributed to the author(s) of the instrument. This uniform hermeneutic thesis was most clearly set out in the High Court of Australia’s decision in Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253. In light of this thesis, there are two main reasons for this article. The first is to respond to a criticism of this uniform objective approach that I have heard several times. The criticism is that as each species of legal obligation is different, it follows that different rules of interpretation should apply when the given legal context changes (e.g. why not ask the settlor of an inter vivos trust what she meant to say when an interpretational dispute arises). The second reason is to demonstrate that the explanations most commonly given in defence of an objective approach to interpretation, namely to promote legal certainty and economic efficiency, fail to capture the essential reason why the objective approach permeates the general law. The thesis put forward in this article is that an objective theory of interpretation is a justifiable aspect of private law because language (being a form of communication) does not operate unilaterally but requires stable and dependable shared conventions. This argument is supported by the further claim that where the author of a legal instrument utilises these publicly recognised conventions in order to affect her legal relations with others then she ought to be bound by those conventions. One cannot have the benefit of ‘conventions for me but not for thee.’
confirms that the second element in this test is to be treated as settled by the Supreme Court in Ivey to be an objective test. The first step in this test is now likely to be the main focus for future cases on dishonest assistance. In fraud cases it is rarely possible to discover explicit evidence as to the state of mind of the parties. In Edgington v Fitzmaurice (1885) 29 Ch.D. 459, 483, Bowen L.J. famously declared that "the state of a man's mind is as much a fact as the state of his digestion". Maybe so. But it is easier to read a stomach than a mind. What is dishonest is seldom made explicit, for dishonest people are usually conscious of the need to hide their behaviour, or to cloak it in the raiment of equivocation. The explicit evidence as to knowledge at any particular time may appear quite meagre. The true state of the assistant's mind may only become apparent as an inference from the conduct of the assistant, viewed in total, forming a pattern over time, in light of the likely motives of the parties: Mortgage Agency Services Number One Ltd. v Cripps Harries L.L.P. [2016] EWHC 2483 (Ch), at [88]. So in making the factual findings for the first step of the test in Ivey, a court may need to thread the individual findings on the assistant's state of mind together by making a single broad finding of fact about the assistant's knowledge of the breach. Group Seven shows that a finding of "blind eye knowledge" will indicate dishonesty. Since dishonesty is an objective test, it is also arguable that when an assistant knows facts from which an honest person would have inferred that there was a breach of trust or fiduciary duty, but the fiduciary failed to draw that inference, a finding of dishonesty might also be made.
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