Unconscionability

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  • Topic: Estoppel, Common law, Equity
  • Pages : 8 (2687 words )
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  • Published : April 19, 2013
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Daniel Pitaluga.

“[On one view of proprietary estoppel] ‘unconscionaibility has no independent existence for it is defined purely in terms of three factual requirements. 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...
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