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In the current report case scenario of controversy between bank, financial advisers and insurance agents is discussed in detail. In this regard different doctrines are analyzed and relevant one are applied on the present case. In middle part of the report, remedy of equity and law of trust are discussed briefly. Along with this, history of principles of equity and development of equity institutes are discussed in detail. At end of the report, application of equitable principles on the business case is done. In this way entire research work is carried out.
In the current time period controversy is going on between the banks and advisors. This is because banks set huge target for their advisors and they have to achieve at any cost. In order to achieve the target advisors give wrong advises and information to the investors and due to this reason customers face huge loss on investment. Due to this reason banks suspended there multiple financial advisors. In return advisors blame the business firm for such condition and state that they have no choice and due to this reason in order to achieve the target they sale wrong products to the customers. Principle of equity apply here because it is not fair to put huge pressure on the employees just in order to achieve the target. Due to such kind of attitude of bank customers lose their money in the market. Following are the equity doctrines that can be used to solve the controversial issue.
Equitable conversion: It is the doctrine under which when a contract is signed between the buyer and seller of the property. It must be noted that many time contract is signed between the buyer and seller of goods under which one entity promise other one that specific asset will be transferred to the buyer on later date (Dietrich, 2010). From the time of signing of contract till transfer of property buyer and seller both owned the title of the property. In case any damage happened to the property buyer and seller both are responsible for loss.
Estoppel:Estoppel refers to the legal doctrines that are grouped collectively. Under this doctrine one is prevented from making declarations that are opposite to his position that was on any matter before court (Wang and Welker, 2011). It can be said that if an individual give certain statement then same cannot move backward from its decisions. It can be said that estoppel is the one of the main doctrine of the law of equity.
Hotchpot: Hotchpot is another doctrine under which assets are classified among different entities in systematic way. In the mentioned doctrine in the specific proportion asset is classified among the different entities. Usually, this happened when any person died or is suffered from any disease and is not able to make decisions. This doctrine state that asset must be shared equally among the relevant entities (Latimer, 2012).
Knowing receipt: It is another doctrine of the trust law and under this liability is imposed on the individuals and knows that is given to them in breach of trust. It can be said that under this doctrine it is clearly stated that clement must show disposal. Knowing receipt is also known as unconscionable receipt because of theoretical foundation of same.
Laches: Laches refers to the behavior of an individual under which same show less diligence and performance of making legal claim on any asset or any other thing (Smith, 2011). It is considered as one of the most important doctrine by the people by using same in prudent manner one makes claim on the specific issue.
Doctrine of marshaling: This is the doctrine that is related to the Lord Hoffman and same is related to the lending that usually happened in the business. This doctrine state that there may be a situation where there may be a two creditors on single debtor. In such a situation by following principle of equity one allow other one to recover debt from the asset on which same does not have any sort of claim (Subedi, 2016). It can be said that there is a huge importance of the doctrine of marshaling and it ensured that all creditors will be paid in proper manner by the debtor.
Unconstitutionality: It is related to the contract under which one party get a greater return because same have superior bargaining power. Due to high bargaining power one can influence others easily in terms of decision making. Unconscionsability contract are those one party have high power and can influence others. There are number of ways in which unconciousability is measured like power, age group and mental capacity etc. It can be said that there is huge importance of the mentioned doctrine (Macdonald, 2010).
Under influence: It is the doctrine under which one entity influence other actions and decisions. It can be said that one entity take advantage of its position over the other entity. In case of NAB it was identified that many financial planners are giving wrong advises to the customers and due to this reason they were facing a loss on the investment. Due to consistent loss on the advisory of the financial planners of NAB its wrong image was created and due to this reason number of financial planners were suspended and eliminated from the job. On interview of the suspended employees it was commonly identified that employees were not satisfied with their mangers. It is true that financial advisers were giving wrong advises to the people but there was pressure on them to sale specific fund at fast rate. Hence, without considering investor profile schemes were recommended to them. This created controversial issue between the managers and employees as both entities influence each other decisions (McDonald, 2011). It was the undue influence of the managers due to which employees keep their ethics and responsibility on one side. In order to prevent such kind of situation principle of equity must be followed.
Remedy of equity
Accounts of profit: It is the remedy to the equity under which an action is taken against the defendant entity to cover the profit that was taken by any entity as breach of duty. Many times in the business it happened that same is owned by an entity but decisions are taken by the other one. In such a situation estimation of contribution is made and accordingly amount is paid to the plaintiff.
Constructive trust: It is the remedy approach under which trust is imposed by court and under this one is provided right because same was deprived from exercising the relevant rights.
Law of trusts
There are some basic rules of trusts and under this trustee have a legal interest in the property of trust. Apart from this entity that is in beneficiary category also have equitable interest (Chapple, Clarkson and King, 2011). In case any individual possess both rights then in that case equitable interest will remain in existence but the other right will be eliminated completely or one will not be able to use other right.
History of principle of equity and development of equitable institutions
Principle of equity was developed in the Australia on the basis of fairness and conscience factors. In the Australia principle of equity was formulated on the basis of concept of Unconscionsability. Rules and regulations were misused in old times and due to this reason injustice happened with number of people. Plaintiff approached the King and same give instruction form the court of Chancery (Kend and Katselas, 2013). In the mentioned court decisions were taken on the basis of conscience and fairness. In Australia conflict comes in existence between common law and equity. Those people that does not get justice under common law are getting justice under equity. Due to fairness in justice equity law become popular in the Australia.
Equitable intuitions were developed in the Australia and in this regard number of steps were taken in the mentioned nation. Regulatory authority take number of steps to ensure that equitable institutions will be developed in the mentioned nation. It was observed that equity law gain wide popularity in the mentioned nation and due this reason number of courts in respect to equity law were established in the mentioned nation. It can be said that big change comes in the Australia and implementation of equity ensured that equal justice will be done with all sort of people. As it is well known fact that conflict arises between the principle of equity and common law and in order to solve this problem number of steps were taken in the Australia. In this regard number of steps were taken at that time (Guneratne, 2012). In the Earl Oxford case it was identified that Coke CJ give judgment that common law action was alleged to have obtained by doing a fraud and verdict is given in favor of wrong person. From the court of Chancery common injunction was given under which prevent proceedings to enforce the common law judgment. It can be said that number of steps were taken for development of equitable institution in the Australia.
Equitable principles and institutions
There are some rules and regulations provided by government of country for providing equal rights and opportunities to all people of the nation. It is useful for social justice and human welfare. However, several principles are made for Australia, New Zealand, Canada are presented for individual rights and common laws for effectiveness of nation. Including this, it is helpful for solving out any dispute and conflicts related to human rights. In this regard, different legal decisions including civil laws are obtained to protect human being effectively. Therefore, strong legal system and work ethics are provided for public welfare and rescuing them from obstacles occur in the country (Ellinger, Lomnicka and Hare, 2011). Along with this, equity and equitable principles gives authority for judge of court to make decision for fairness regarding justice rights and their discretion. Thus, different legislation and obligations are presented for country's effectiveness as well enhancing its efficiency at high level.
Fairness:- Under this equitable law system, rules and legislation are made related to providing equal rights, opportunities, education and employment for Australian people. However, it is legal obligation for Australia to create fairness in human rights and their freedom to live freely (The nature and history of equity, 2016). According to this common law, human rights justice should be similar for all nation's people that impacts on welfare and social justice. Along with this, it is legislation for country to make fair decisions for human welfare and social justice that impacts on social and ethical factors of country.
Bias:- There is strict legislation made for human rights' equitableness. Under this system, various laws and obligations are made to reduce bias. According to this equitable principle, it is determined that it is needed for country to provide each public to their human rights and freedom. There would be no discrimination allowed in employment, education, healthcare, social justice and different sectors (Dietrich, 2010). However, several people can take advantage of justice through court and reducing disputes occur for human rights. In addition to this, various common laws and systems are made for equality and treating all human of the country as equal and also can take advantage of justice in case of crime. Therefore, this equitable principle is able for reducing discrimination and treating all human of the society as same.
Equitable institution:- Some institutions have been established in Australia and other countries that is effective for public welfare and providing equal rights and opportunity to each individual of the nation. It includes institutions such as court etc that is effective for fairness and justice for innocent people of the country who feels inferior due to discrimination or biasses (Wang and Welker, 2011). In addition to this, different laws and legislation are made for effectiveness of nation as well reducing bias for providing social justice for each individual.
Application of equitable principles to give facts and situation
There are two components of the equitable principles namely fairness and lack of baiseness. In the Australia currently controversy is going on between the banks, insurance firm and the financial advisers. It is observed that there were number of advisers of the NBA and number of them were made responsible for giving wrong financial advice to the clients. Due to this reason clients lose money on the investment amount. On interview employees state that there was huge work pressure on them and organization wants to achieve its target of profit maximization at any cost (Subedi, 2016). Due to this reason managers put huge pressure on the employees and they in order to achieve the target follow unethical and wrong ways. Relevant employees were suspended by the business firm. On application of equitable principles this situation can be handled. First principle of fairness applied on this case according to which it is liability of firm and its managers to set only achievable targets for the employees. Secondly, employees also need to follow their ethics while fulfilling their responsibility (Woellner and et.al., 2011). By doing so it can be ensured that clients will not be cheated by the business firm and their needs will be satisfied. Principle of lack of biasness also applied in the present case which state that managers must not made discrimination among their subordinates. In this way equitable principles applied in relevant case.
On the basis of above discussion it is concluded that equity law have a due importance for the nation. This is because by following same justice can be done with the people of the nation. There are two basic principles of the equity which are fairness and lack of biasness. Strict compliance with these two principles ensured that justice will be done in proper manner with the people of the nation. It can be said that there is a huge importance of the equity law for the nation in comparison to common law.
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