Unconscionability

Published: 2021-08-26 12:50:08
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The corollary is, of course, that unconscionability exists by definition whenever there is an assurance, reliance and detriment, because non-performance of the assurance after the detriment will always be unconscionable. Such a view is at odds with those who view unconscionability as at the heart of the doctrine – in the sense of providing its underlying rationale – because, quite simply, it denies the concept of any discernable meaning. Critically analyse, explain and evaluate this statement in the light of recently decided case law and academic commentaries. To asses and evaluate this statement it first has to be deconstructed and analyzed separately. Then the doctrine and history of proprietary estoppel must be looked at to gain a full understanding of both views the statement provides. Also the manner in which it is applied by the judiciary and the changes to its ideology that have made it what it is today.
Unconscionability is crucial element within proprietary estoppel and although it may govern the doctrine, its meaning, application and understanding varies and can appear somewhat vague. Only once unconscionability has been established may a judge look to “estopp” what has been deemed unconscionable. However there are two opposing views on the terms of unconscionability and the focus of this essay will be to address both views based on precedents from recent case law which determine when and how unconscionable behavior may allow a proprietary estoppel to arise.
The first view on proprietary estoppel and when it is established through unconscionablity is in Wilmott v Barker in the form of the five ‘probandas’. Two relate to the person seeking to raise the estoppel. He must have made a mistake as to his legal rights and must have spent money or done some other act in reliance on his mistaken belief. The other three relate to the person who is said to be being “estopped”.
He must have a right that is inconsistent to the other parties mistaken belief, he must be aware of the mistake and he must have encouraged the other party to act in reliance on that belief. However, more recently, as in, Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd where the tenant was seeking an estoppel failed to meet the strict requirements of Wilmott v Barker but in the judges view it required a broader approach. This lay the groundwork for later judges to have a wider, more modern approach to proprietary estoppel. It would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment”. This statement has particular relevance to the first view on unconscionability proposed in the question. Put simply, the whole understanding behind proprietary estoppel and unconscionability is by no means black upon white but rather each case needs a particular look at the background and authorities within it to judge whether the actions may be deemed unconscionable and estoppel may arise.
When the case, Cobbe v Yeoman’s Row Management Ltd, reached the House of Lords in 2008 it was thought that there would be some clarity over the issue of proprietary estoppel and in particular, the role of unconscionability. Unfortunately, what arose from this was just an addition to the ‘grey area’ that is unconscionability. He stated, “to treat a proprietary estoppel equity as requiring neither a proprietary claim by the claimant nor an estoppel against the defendant but simply unconscionable behavior is, in my opinion, a recipe for confusion”.
This take on proprietary estoppel puts forward the opinion that to base a claim of proprietary estoppel on unconscionable behavior only would be confusing and to some extent unfair as the three traditional elements of assurance, reliance and detriment must still be present. Lord Walker also proposed his opinion on unconscionability saying, “Unconscionability does, in my opinion, play a very important role in the doctrine of equitable estoppel, in unifying and confirming, as it were the other elements. If the other elements appear to be present but the result does not shock the conscience of the court, the analysis has to be looked at again”.
This idea simply reiterates Lord Scott’s view that unconscionability on its own, or meeting the three factual requirements do not constitute a proprietary estoppel but instead work in unison and with the courts discretion come to a solid conclusion on whether an equitable estoppel may arise. After this the position on unconscionability was left once again obscure, “If taken literally, this reformulation would have curtailed the reach of estoppel”. As in the aforementioned Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd a broader test was adopted to asses whether the conduct complained about was indeed unconscionable.
Again, this is at odds with other statements within the judgment and again brings forth confusion as it explains that a case of proprietary estoppel can not be solely based on unconscionable behavior but also required the three traditional elements. The first of these three elements is representation, or an assurance of rights, which gives way to an expectation as to the future rights of the land for the claimant. This representation can simplified as the, “encouraging of a course of action which it would not be sensible for the claimant to undertake unless he was not to be granted some interest in the property”.
A more modern approach was shown in Inwards v Baker. In this case a son had built a bungalow on his father’s land, and on his suggestion and was lead to believe that he would occupy it after his father death but in fact the land had been left to others. The Court of Appeal held that the son had permission allowing him to remain on the property as long as he wished and because he altered his position to his detriment in reliance on a belief induced by his fathers conduct.
Lord Denning stated, “The son had a license coupled with an equity such that any purchaser who took the land from the owner with the notice of the son’s interest would also be bound by the equity” Another aspect of this factual element is that these representations may be made in ‘willful silence’. In other words, if one knows but does nothing when a person has built on his land, equity considers that it would not be just to allow the landowner to take advantage or profit from it.
As in Ramsden v Dyson where Lord Wensleydale commented, “if a stranger built on my land, supposing it to be his own and I, knowing it to be mine, do not interfere but leave him to go on, equity considers it to be dishonest in me to remain passive and afterwards to interfere and take profit. ” This opinion, albeit dated, still has some effect in more contemporary cases because it looks to find a fair and just solution to problems that could arise by a defendant looking to unjustly aquire land which may knowingly belong to him but would be unfair to be given to him as he did not assure the other it was his.
The second of these traditional elements is a reliance or a change in position. It is an essential element in establishing an estoppel that the claimant has relied on the representation. If reliance can be proven then the burden falls on the person who has made the representation and is now contesting the estoppel to show that the claimant had not relied on it as in Greasley v Cooke. “Once it is shown that a representation was calculated to influence the judgement of a reasonable man, the presumption is that he was so influenced”.
This requirement curtailed the range of the doctrine and again, confusion arose because of its inconsistencies made by the Court of Appeal. The last of these three traditional requirements is that the claimant must act to his detriment. This ‘detriment’ may involve the expenditure of money or a sufficient amount of physical effort that could be considered detrimental to the claimant and or beneficial to the property owner or the property owners land.
In Basham, the claimant and her husband had looked after her stepfather, providing him with meals and working in his house and garden and continued living in the nearby area so that they could continue to care for him. It was held that the principle of proprietary estoppel extended to acts done in reliance of a belief that future rights would be given and was not limited to acts done in a reliance on a belief relating to an existing right. In the case Re Gillet v Holt where G brough an action against H who replaced
G as the main beneficiary of H’s will. Relying on Basham H was bound by proprietary estoppel to give the whole of his estate to G. H contended that while the decision in Basham must be correct, if the doctrine based in that case were applied literally, an intended beneficiary could transform a mere expression of intention into a binding promise by acting to his detriment in reliance upon it without the testate’s knowledge. In the decision, the converse approach to proprietary estoppel was presented by Carnwath, J.
He dismissed the approach of the three strict requirements but suggested that the over riding principle of proprietary estoppel was unconscionability and it could not be considered unconscionable for someone to go back on his promise unless he was are of the detriment being suffered in reliance on the promise. The Court of Appeal actually went further than this, describing that, “estoppel was an equitable doctrine to remedy unconscionability”.
They provided an adamant opinion in that they “were not to back down estoppel into the rigid compartments of assurance, reliance and detriment for they act upon eachother, the quality of the relevant assurance can influence the issue of reliance and this can be interwoven with detriment. ” In light of Cobbe and with regards to Thorner v Major it is clear that a case for unconscionable behavior is entirely dependant on the context. In Thorner a mere informal assurance may have been enough for a proprietary estoppel to arise due to its specific background.
Whereas in Cobbe it is a commercial agreement that would obviously require a stricter approach. Re Cobbe concerned a promise to enter into a commercial contract with a developer who then spent time and effort obtaining planning permisiion at the end of which the defendant tried to renegotiate the financial terms which had been agreed in principle. Lord Scott rejected proprietary estoppel as a remedy because “the promise in principle had not been the promise of a proprietary right but of a contract” and that there had to be a “certain interest” in land.
Lord Walker had a different view and suggested that some of the domestic cases were wrongly decided in the sense that the parties only hoping they would obtain rights rather than believing they would do so. In Thorner the relationship between the defendant and the claimants knowledge was less formal, in fact, familial. D was the owner of a farm, which P had been working on for thirty years and because of this believed that he would inherit it.
Although no direct words had been spoken about handing over the farm to P, in 1990 a Prudential Bonus Notice was given by D to P relating to two policies on D’s life. The House of Lords decided that the giving of such notice constituted a ‘clear and unequivocal’ representation or assurance on which P was allowed to rely on. However, this was used as a basis for the appeal being allowed although the Lords had differing opinions on the subject. Lord Walker said that, “To establish a proprietary estoppel the relevant assurance must be clear enough.
What amounts to sufficient clarity, in a case of this sort is hugely dependent on context”. Lord Neuberger then stated, “The relationship between P and D was familial and personal and neither of them had much commercial experience. P made, what were, in the circumstances, clear and unambiguous assurances that he would leave his farm to D and D reasonably relied on, and reasonably acted to his detriment, on the basis of those assurances, over a long period. ” This case made it somewhat easier to grasp the flexible nature of unconscionability.
In a way it also made it easier to establish that assurances made in a family context do not follow in the way of the more formal ‘contractual’ agreements where wording may be more precise and direct and therefore allowing a decision on the assurances and whether those assurances were known by and acted upon by the claimant. Even with all its obscurities and ambiguity it can be said with a reasonable amount of confidence that unconscionability is the logical basis of proprietary estoppel. Many scholars maintain that it must be used in conjunction with the three factual criteria as when looked at on its own can be far too broad.
It is commonly believed that the only work the concept of unconscionability should be doing is in the law of proprietary estoppel is to look for a ‘fairness’ within improper and dishonorable dealings and to point out by way of remedy to protect the interest of the reliance. If only one approach were used in defining unconscionable behaviour then it would be inevitable that some cases would have an unjust result. It is the juxtaposition of both these ideas and a defining knowledge of where and when to use them which would result in the most equitable remedy.
It is this flexible nature that allows unconcscionable behaviour to be remedied because, although in some cases, the three factual requirements may not be present in their truest form there is still a way that the judiciary may come to a just conclusion. The idea that unconscionability on its own cannot induce a proprietary estoppel may be true but it is also present to deny claims where there is apparent assurance, reliance and detriment as so to find a fair result.

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