Episode 13 - Equity and the Sad Case of Mr Stubbings

Law in Context

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In this episode we look at the body of judge-made law called Equity, which emerged in England as a separate body of case law from "the common law". Whereas common law focuses on clear rules and rights, equity focuses on conscience and doing what is fair. These two conceptual systems were developed in separate courts but are now applied concurrently in the same courts. If the facts of the case support applying an equitable doctrine or concept, then it prevails over whatever the common law result would be.
We illustrate the two different approaches with a recent case, Stubbings v Jams (No 2) Pty Ltd. Poor old Mr Stubbings had no income. He had assets but plenty of debts. He refinanced his affairs with Jams Pty Ltd, after receiving independent legal and financial advice. However, according to the initial judge, Mr Stubbings was "completely lost, totally unsophisticated, incompetent and vulnerable". His financial situation was "bleak".
In the trial court, he succeeded in having his loan agreement set aside. However, the Court of Appeal overturned that decision, focusing on the fact that he had had independent advice. The High Court - the final possible court - reinstated the trial judge's decision, and Mr Stubbings therefore ultimately won, although after 7 years of cost and stress.
The contrast between the Court of Appeal and the High Court is a contrast between common law reasoning and equitable principle.
In this episode we ask the listener what they think about this and other examples.
We need rules. But we also know that they can be used unfairly or don't match every situation. So we need some kind of corrective. But have we got it right?

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