Introduction

For much of the twentieth century it was asserted with greater or lesser convic­tion that, express statutory conferral of power apart, equity was unable to award ‘damages'.^[643] What this actually signified is quite elusive.

Yet it manifestly was the case that pecuniary awards were regularly being made in equity as, for example, against trustees misusing or misappropriating trust property,^[646] against company directors for breach of their duty of care^[647] or against mortgagees for breach of their duty of good faith.^[648] I should emphasise, as I will not refer to it in detail, that the case law against trustees (and against those who stood in trustee-like positions vis-a-vis another's property) for misuse of ‘trust property' was voluminous and of early origin.^[649]

To some there was a sleight of hand in all of this, if not merely a semantic quib­ble. The pecuniary relief ordered in equity for loss was described generically as ‘ compensation' and not as ‘ damages' (which were a creature of the common law and fell within the province of a jury). This, though, left unexplained what it was—or was thought to be—that limited the award of compensation for equitable wrongs. That something, as will be seen, stemmed from the combined effect of Derry v Peek^{[650] [651] and Jorden v Money.13 Initially, though, reference should be made to equity's power to compensate in the nineteenth century.}

As Story indicated in his Commentaries on Equity Jurisprudence¹¹ (the ‘Com­mentaries’ ) in 1884, courts of equity would not, as a general rule, entertain juris­diction to give redress by way of compensation or damages where the sole object of a bill was for damages for breach of contract or other wrongs and injuries recognised at law. But he went on to note that ‘ Compensation or damages... ought. ordinarily to be decreed in equity only as incidental to other relief sought by the bill.; or where there is no adequate remedy at law; or where some peculiar equity intervenes’.^{[654] [655]}

Of more immediate relevance to our present concerns, Maitland in his Lectures on Equity reflected that Chancery kept very clear of large portions of the province of tort—so much so that ‘if we except the province of fraud—equity has had little to do with tort’.^[656]

The story in this chapter, though, has a deal to do with ‘the province of fraud’, and particularly as it was understood in equity. As is well known, while what con­stitutes ‘fraud at common law’ and ‘fraud in equity’ covered some common ter­ritory, fraud in equity had—and has—a significantly more expansive compass.^[657] Equity shared a ‘concurrent jurisdiction’^[658] with the common law^[659] in relation to fraud in the strict sense.^[660] But this to equity was only the first ‘species of fraud’.^[661] As Viscount Haldane put it in Nocton v Ashburton: ‘The Court [of Chancery] took upon itself to prevent a man from acting against the dictates of conscience as defined by the Court’.^[662]

The primary concern of fraud in equity has been to preclude, or to proscribe, what is considered to be ‘unconscientious conduct’.

Finally, I would re-emphasise that fraud in equity provided both overlaps with and penumbrae to the law of torts, of contract and, I should add, of gifts. The points of overlap and concurrence were themselves areas of change and of misun­derstanding. This was particularly so with the varying responses of all four bodies of law as they grappled with when and why representations of fact and intention and, for that matter, non-disclosure were to be made actionable. The history of the developments in tort, contract and equity and of their moving boundaries during the late eighteenth and nineteenth centuries have been explored painstakingly in the writings of Professor Lobban.^[664] It is too complex a story to precis here.

Nonetheless, it is necessary to refer in a little detail to two particular manifesta­tions of equity’s fraud jurisdiction. While they have suffered different fates, each has influenced modern Australian law. The first was the jurisdiction to require the making good of a relied-upon representation or else to order compensation if this could not be done (either appropriately or at all). The second was concerned with the unconscionable (or ‘fraudulent’ ) insistence on strict legal rights to property. While the first of these was all but extinguished, the latter doctrine, remarkably, survived the ravages of the late nineteenth century to provide one of the under­pinnings of equitable estoppel in Australian and New Zealand law today.

II.