• In Walsh v Lonsdale [1882], the Court of Appeal (CA) held that the rules of equity enabled a landlord to enforce a term of a lease with the claimant, despite the lease not being created by a deed, which was required at common law. The CA said this was because in a situation where common law and equity are in conflict, the rules of equity should prevail. Because ‘equity looks on as done that which ought to be done’, the lease agreement was enforceable in equity.

Facts of the case:

  • D entered into an agreement with C for the lease of a property, which contained the following terms:
  • The lease was to last for seven years,
    • The rent was to paid quarterly in arrears
    • A year’s rent was payable in advance should the landlord D demand
  • There was no deed executed for this tenancy, though the C moved in and paid the agreed amount in arrears.
  • D demanded the rent for the next year in advance, and C refused, on the basis that because there was no deed executed, there was no lease, and thus D’s demand was not enforceable.

Issues in Walsh v Lonsdale [1882]:

  • The issue for the CA was whether the lease agreement and the terms therein was enforceable. The question at law was whether the common law rules relating to leases applied, or equity applied.

Held by the CA:

  • The CA found in the favour of the defendant, and held that equity was the rules which ought to be applied, notwithstanding the absence of a deed which formalised the lease.
  • The CA held that following the Judicature Acts which were introduced between 1873 and 1875, the common law system and the system of equity were combined, and where the two systems conflict, the rules of equity shall be the rules which prevailed.
  • Under the rules of equity, the parties had created an enforceable lease.

Jessel M.R:

  • “There is an agreement for a lease under which possession has been given. Now since the Judicature Act the possession is held under the agreement. There is only one Court, and the equity rules prevail in it. The tenant holds under an agreement for a lease. He holds, therefore, under the same terms in equity as if a lease had been granted” [14]
  • “He [the tenant] has a right to say “I have a lease in equity, and you can only re-enter if I have committed such breach of covenant as would if a lease had been granted have entitled you to re-enter according to the terms of a proper proviso for re-entry”.
  • “In my opinion, therefore, there is at least such a prima facie case in favour of the defendant that we ought not to deprive him of the security which the distress gives him without the plaintiff paying into court that which will be a sufficient security for the defendant if he is right in his contention”

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