This chapter traces the historical background to equity as a separate system. It examines the defects of the common law. In particular the failure to recognise certain rights such as those of the mortgagor or of a beneficiary under a trust. It explains that equity is a 'gloss' on the common law and is not a complete system of rules. It traces the role of the Lord Chancellor in the development of equity. It describes how equity also became unpopular and inflexible and litigants often had to take two actions one in the courts of equity and one in the courts of common law. Eventually the two systems were fused under the Judicature Acts of 1873-1875. Many question whether there was complete fusion as equity continues to exist as a separate system relying on discretion. Equity relies on a number of maxims which serve as guidance to the courts but are not enforceable as binding principles of law.

The discovery of documents is a key stage of litigation which today often takes over litigation and produces expense and injustice. Yet discovery originated as a discretionary remedy of equity courts. It was to allow a party to find out from an opponent facts relating to the plaintiff’s own case. When the fusion of law and equity courts began stepwise in the nineteenth century, this useful remedy was extended to common law courts. Initially, both common law and equity courts continued to treat discovery as discretionary. As fusion of the courts occurred, however, discovery was widened and considered an ‘entitlement’. This has led to the situation of today, which requires the discretionary roots of discovery to be re-found.

Apart from the fact that the meaning of “fusion” is debated today in relation to law and equity, its meaning was contested by the participants in the debates that led to the reforms which “fused” the courts of common law and of equity – and others – in England in 1875. The understandings of fusion among these people differed for various reasons. Where some lawyers thought equity inherently different to common law, fusion concerned the substance of the law. Some saw fusion as relating only to differing procedures used in courts of equity and courts of common law, while others again treated fusion as a necessary change of the legal profession: the specialisation and mutual ignorance by equity and common lawyers of one another had to be overcome. The legal reforms pursued to achieve these conflicting ends also changed, ultimately becoming reforms of the entire judicature not merely of law and equity.

New South Wales was very late to receive the Judiacture Act system that effected fusion, and has been significant in discussions of fusion since for that reason. But did New South Wales need to administer law and equity separately in the first place? This chapter shows that when the Supreme Court was established, law and equity were administered without different courts or parts of the one court. There was already fusion, in that sense. But later, under colonial instruction, the fused court was differentiated when rules of court were made to replicate the procedures of the Court of Chancery at Westminster. In time, that differentiation became entrenched, and acquired some of the defects of the dual system abolished in England in 1875. Although the original set-up of the court did not require fusion – since it was already fused – by the 1960s fusion was needed, and came in 1972. The chapter shows the influence of local judicial figures and local events on experiences of fusion.

When the English Judicature Acts were adopted in Victoria, there was scarcely a need for them. From its establishment, the Supreme Court of Victoria held legal and equitable jurisdiction and little differentiation between law and equity. Indeed, the successful operation of the court before the English Judicature legislation shows how much the success of a court depends on the skill and work of its judges and officers as distinct from its institutional structure. This is shown through a study of the work of Justice Robert Molesworth, who as the principal equity judge for a long period in effect embodied equity in Victoria. His versatility and industry are examined to explain why law and equity operated harmoniously, and why the professional and practical dualism experienced in England – which motivated reform – was absent from Victoria. Hence the inutility of the Judicature Act reforms later introduced in Victoria.