Equity in Law: When Fairness Goes Beyond the Rule Book

By Laura J. McPhee and Mark Jacka

What happens when following the law to the letter produces an unfair result? That’s the question at the heart of equity — a branch of law built on fairness and conscience that has been shaping justice for centuries. In this episode of Definitely Not Legal Advice, Laura McPhee and Mark Jacka take a deep dive into the world of equity, tracing its fascinating history from medieval England to modern Canadian courtrooms, and breaking down why it still matters for businesses today.

A Quick History Lesson (We Promise It’s Interesting)

Equity has roots going back about 1,000 years in the English legal system. The basic idea? Sometimes the strict application of the law produces an outcome that just isn’t fair. Way back in medieval England, when common law courts could only award money as a remedy, people who needed something different — like getting their actual land back, rather than just cash — had to petition the King directly. Eventually, the King got too busy, so he handed these petitions off to his Lord Chancellor (historically a member of the clergy, because they were among the few people who could actually read). The Lord Chancellor was considered the keeper of the King’s conscience, and by the 1400s, these cases were being heard in dedicated Courts of Chancery.

For centuries, courts of common law and Courts of Equity operated side by side — sometimes competing, sometimes complementing each other. Finally, in 1878 in England, the two systems formally merged. Today in Canada, all provincial superior court judges have the ability to exercise both legal and equitable remedies. As Mark notes, the fact that we can trace this back nearly a millennium is one of the more fascinating aspects of our legal system.

What Are Equitable Remedies?

An equitable remedy is, at its core, something other than money. When someone has harmed you, and a cheque just won’t cut it, equity steps in. Laura and Mark walk through several key equitable remedies that come up regularly in commercial settings.

Specific Performance

This is a court order requiring someone to do exactly what they promised to do. It comes up most often in real estate transactions. If you had a deal to buy a specific property — maybe one with a unique feature you can’t find elsewhere — and the seller backs out, money might not make you whole. A court could order the seller to follow through with the sale. That said, courts generally don’t love granting specific performance because it means forcing someone to do something they don’t want to do. It’s reserved for situations where financial damages truly aren’t enough.

Injunctions

Injunctions are orders that either prevent someone from doing something or require them to take action. They’re typically urgent — you’re asking the court to step in right now to preserve the status quo. To get one, you generally need to show that you’ll suffer irreparable harm if the court doesn’t act, meaning no amount of money could fix the damage. These come up frequently in commercial disputes and are incredibly relevant for businesses that need immediate protection.

Redemption

Here’s a great example of equity in everyday life. If you miss a mortgage payment and the bank moves to foreclose, the strict legal result would be losing your home. But equity steps in with a redemption period — a window of time for you to catch up on payments and keep your house. In Alberta, the statutory redemption period is six months. It’s a concept rooted in the idea that kicking someone out of their home over one missed payment just isn’t fair.

Rescission and Constructive Trusts

Rescission allows a court to essentially undo a contract — as though it never existed. It’s rare, but it can apply when one party was completely misled about the terms. A constructive trust, on the other hand, lets a court declare that certain assets are held in trust for someone who was wronged — useful in situations involving efficient breach, where one party breaks a contract because they got a better deal elsewhere.

The Golden Rule: Clean Hands

One of the most important principles in equity is the maxim “He who comes to equity must come with clean hands.” In other words, if you’re asking a court for a remedy based on fairness, you can’t have done anything wrong or underhanded yourself to create the situation. Equity isn’t a punitive tool — it’s about achieving the fairest possible outcome, and it only works for those who deserve it.

Why Should Businesses Care?

Laura emphasizes that equitable remedies are far from old-fashioned relics. In her own practice, she’s regularly argued for remedies beyond just damages. Money can’t always be the answer, and for businesses operating in the commercial space, understanding that there are options beyond a financial settlement can be a game-changer. Whether it’s seeking specific performance on a critical real estate deal, obtaining an injunction to stop a competitor from causing irreparable harm, or navigating the complexities of set-off in a commercial dispute, equity remains a powerful and practical tool in a lawyer’s arsenal.

Give the full episode a listen to hear Laura and Mark work through real-world scenarios — complete with koi ponds, widget factories, and the occasional villain origin story — that bring these legal concepts to life.

Definitely Not Legal Advice

A podcast by Laura McPhee and Mark Jacka of Blue Rock LLP

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice.