The Destruction of an Equitable Jurisdiction
This process proceeded in a number of stages. The first was the idiosyncratic insistence of Lord Cranworth and Lord Brougham in Jorden v Money[688] that before either equity or the common law would refuse to allow the falsification of a repreÂsentation relied upon by another, the representation had to be shown to be one of fact and not merely of intention.
Despite this stricture a number of judges were to persist in enforcing represenÂtations of intentions. Their principal justification was the view of Lord Cottenham in Hammersley v De Biel—approved on appeal to the House of Lords—that equity would enforce representations made for the purpose of influencing the conduct of another and relied on by that other.55 But this persistence became less tenable as the next stage of revision took hold. Lord Cranworth's view, asserted emphatically in Jorden v Money,[689] progressively won ascendancy: to be enforceable, a represenÂtation of intention had to be contractual in nature.
Any lingering hopes lower court judges may have had in maintaining the Cottenham view were dashed in Maddison v Alderson.[690] Not only was Hammersley now ascribed a contract basis, by a side wind the doctrine of part performance was invoked to qualify even acts of reliance on oral contractual promises affected by the Statute of Frauds. Those earlier cases which could not be reinterpreted into this new contractual framework were overruled. Loffus v Maw,[691] noted above, was one of these. In short, contract and the doctrine of consideration were driving equity from the field. Individualism and freedom of contract were supplanting the earlier commitment to fairness and good faith.
The jurisdiction to enforce representations having been colonised by the law of contract, attention then turned to the grant of compensation for false representaÂtions.
Now the tort of deceit came to prominence. By the 1880s the awards made in Burrowes v Lock and Slim v Croucher had secured acceptance as orthodox both in judicial opinion[692] and with text writers.[693] That was to change irrevocably with Derry v Peek.[694] Lord Herschell in that case explicitly exempted the class of actions exemplified by Burrowes v Lock from what Derry v Peek decided.[695] Its concern was an action ‘wholly and solely of deceit, founded wholly and solely on fraud’.[696] And in such a case false representations were actionable if made knowing them to be so, or without belief in their truth, or without caring whether they were true or false. Nonetheless, though addressed to the common law, D erry v Peek inevitably had implications for equity—the more so given the uncertainty which had previously surrounded the relationship of the claim in equity to the action at law.Subsequent interpretation of D erry v Peek was to disavow the compensatory jurisdiction in the absence of fraud of the common law variety.[697] Low v Bouverie[698] has the dubious distinction of occasioning this final development. Of the two unequivocal examples of the compensatory jurisdiction for non-fraudulent misÂrepresentation, Slim v Croucher was held to be inconsistent with Derry v Peek and was overruled. B urrowes v Lock was reinterpreted and consigned to the law of estoppel by representation of fact. The compensatory jurisdiction for misrepreÂsentation was limited to relieving against common law fraud. And representations, if not actionable as frauds or breach of warranties, merely provided a possible foundation for an estoppel by representation of fact. As Bowen LJ was to convince subsequent generations: ‘Estoppel is only a rule of evidence: you cannot found an action upon estoppel’.[699] Thus was born a new orthodoxy.
So in 1893, for example, Lord Macnaghten was reported as observing, seemÂingly with some irony, ‘The old doctrine of misrepresentation seems to have fallen out of date’.[700] The text writers of the time acquiesced in this new state of affairs.[701] But it was not without complaint about Derry v Peek.
As Professor Lobban noted: ‘Frederick Pollock was outraged by the decision, which all of Lincoln’s Inn thought was wrong’.[702] Pollock’s primary objection was that an opportunity to make a desirable development in the tort of negligence had been foregone. He anticipated that, if the House of Lords affirmed the Court of Appeal, a new rule would have emerged that a man volunteering information intended to be acted on would be ‘bound to use the ordinary care of a reasonable man to see that his assertion is warranted by the fact’.[703]Twenty-five years later in Nocton v Ashburton, Viscount Haldane was to reflect:
If among the great common lawyers who decided Derry v Peek there had been present some versed in the practice of the Court of Chancery, it may well be that the decision would not have been different, but that more and explicit attention would have been directed to the wide range of the class of cases in which, on the ground of a fiduciary duty, Courts of Equity gave a remedy.[704]
Importantly, he went on to observe that the Lords who decided Derry v Peek would not have imagined that they could be taken to have cast doubt on the principles of cases decided in the exclusive jurisdiction of Chancery.[705] This was to provide equity’s great escape—but not immediately, as will be seen.
IV.