Concept of Unfairness Unconscionability

The primary source of law in England- the judge made law, administered in the common law courts, evolved gradually with time culminating in a set of rigid and inflexible rules which indefinitely brought about tribulations for the litigants. Consequently, the system was found to be defective either because certain rights of individuals were not recognized under common law or because remedies granted by the common law were inadequate or because a claimant was unable to get a remedy at common law owing to the imbalance of powers; the opponent being more powerful. The totality of these problems lead to the origin of equity which emphasized more on ‘justice and fairness’ in individual cases where it was felt that one party would be unfairly affected by the other party who is depending on the defects of the common law, as an excuse to defend itself and be unjustly benefitted.

This concept of unfairness is referred to as ‘unconscionability’ in the sense of equity. Hence, the judges at the time used their discretion in coming to decisions and applied justice in individual cases in accordance with certain established principles which evolved overtime which encapsulates the moral values subsisting at the time in question. Subsequently, the origin of equity can be attributed to one established principle which reflects the true nature of equity; equity would not allow a ‘wrong to be without a remedy’ – the principle underlying the origin of equity.

Consequently, equity came to supplement the common law, in the sense recognize the defects of the common law and provide a remedy thus turning it into a complete system. Equity did this in a range of different ways by introducing new rights, new remedies and even new procedures and aided the common law to be one whole system without any deficiencies. Hence, equity only intervened in such situations where the common law did not have a remedy and therefore equity upheld the rights of individuals subsisting under the common law whilst adding new rights and remedies, thereby being true to the maxim that ‘equity follows the law’.

The new rights introduced by equity are numerous of which the most important is the trust which is considered to be the most innovative concept by equity to the English legal system. Illustrating the trust by an example, if a testator by will transfers property to his brother requesting him to hold the property for the exclusive benefit of his minor son, the common law would only recognize the rights of the legal owner, which is the brother. Hence, if the brother defaulted in his obligations under the trust, in such circumstances, equity intervenes to ensure that the son is not caused any injustice by ordering the brother to fulfill his obligations by holding the property for the benefit of the son. Thus equity recognized two types of ownership which made it possible for ownership in property to be split between the legal owners and the equitable owners.

Equity introduced new remedies basically because it was felt that the common law remedy was inadequate or that the common law did not necessarily address the remedy wanted by the individuals who suffered detriment. Say, for example, in a contract, where one party defaults under their obligations, under common law it would normally be the practice that the innocent party is given damages. Yet, the innocent party may not always want damages; instead they might want to go ahead with the contract. This was recognized in equity by granting the remedy of specific performance. This can be illustrated by the case of Walsh v Lonsdale [1] , where a contract was entered into for the grant of a lease, but the formalities as are required for the grant of a legal lease were not complied with. Therefore, the lease was not effective in law, hence equity granted specific performance of the contract so that irrespective of the fact that formalities were not complied with, the lessee still had to pay rent as per the terms of the contract as if a legal lease had been granted so that it would not be unconscionable on the part of the lessee.

Conversely, in an action for the tort of defamation, the injured party will be entitled to compensation by the common law, but what is the guarantee that the defamatory statement would not be re-published? This is solved by the grant of the equitable remedy of injunction, which has a wide application today as throughout the time of its invention, whereby if a court feels that it is unfair that one party continues to do something causing injustice to the other, then injunctions would be used to stop the former from continuing with his endeavors.

In terms of the new procedures introduced by equity, discovery of documents, subpoena of witnesses; known as summons today are some of equity’s inventions. The former came especially useful in criminal cases where it was necessary for documentary evidence to be submitted in ascertaining the culpability of the accused. This was not recognized by the common law, but equity introduced this system which made life all the more easier for the common law.

Consequently, equity only intervenes in those situations where it was unconscionable for the parties to the case to rely on the defective common law legal system. Illustrating the concept of unconscionability; say for example, the concept of trust was introduced basically owing to the fact that only the legal titleholder was recognized in law as the valid owner of the property. But there were circumstances where there were individuals who had an interest in the property but who were not recognised on the title. The rights of such people were not recognized in common law. Subsequently, there were individuals who relied on this strict letter of the law to cause injustice to another party thus being ‘unconscionable’. Say for example, that A who is the legal titleholder to land invites B to build a house on his land and that the latter can live on it for the rest of his life and subsequent to the construction A refuses to let B live in the house, it caused injustice to B owing to A’s unconscionable conduct. Thus equity intervened, which recognized the rights of B and ordered A to hold the land for the benefit of B thus complying with the principle that equity would not allow a ‘statute to be used as an instrument of fraud’.

Alternatively, taking another example, where A promises B to transfer the property to the latters name, if B works on the land in pursuance of that promise and subsequently A goes back on his promise, it would be unconscionable for B as he had relied on the promise and kept his side of the bargain. This kind of scenario is not recognized by common law as the promise was not in writing; in other words formalities under the common law were not complied with. Equity intervened in this scenario and introduced the concept of ‘proprietary estoppel’ whereby equity would allow B to have the property as he had relied on A’s promise to his detriment. This was so in the case of Thorner v Major [2] . This complies with the principle that ‘equity looks into the substance and not the form’.

Hence, the concept of unconscionability cannot be given a conclusive definition. Rather it is at the discretion of the judge who decides as to what should be the outcome based on individual cases, each case being treated as a unique case. In the sense, in deciding as to whether a claimant deserves a remedy, certain equitable rules established overtime has to be taken into account. In a certain case, though the judge might decide to grant an equitable remedy, in a subsequent case, with very similar facts the judge might decide not to grant any remedy as either one of the maxims are not satisfied. Hence, the English courts take several factors into account when considering the unconscionability of the parties, which factors are embodied in the maxims of equity. These cover the behavior of the individual, his/her state of mind and even the circumstances of the parties. This could well be illustrated in the case of Patel v Ali [3] , whereby the Alis had contracted to sell their house to the Patels, but defaulted under the agreement as Mrs. Ali was hospitalized and had lost her physical integrity. Under ordinary circumstances, equity itself would introduce the remedy of specific performance, but in this case it was considered unconscionable as Mrs. Ali did not have any place to go to; had she sold her house. Therefore, here the court took into account her conditions and did not grant specific performance of the contract. Consequently, this is a very good illustration that a decision varies from case to case based solely on the circumstances of the case taken as a whole.

Similar, as per the established principle that ‘equity acts in personam’, equity would only intervene in circumstances where required as aforesaid and grant an award against the person unlike common law which grants an award against the property. Hence, be it a contract, the courts will order the defaulted party specific performance of the contract ensuring that the party complies with his/her obligations under the contract. Thus, equity taps the conscience of individual defendants, and try to make right of their wrongful behavior.

Hence, all the aforementioned scenarios are some of the illustrations as to how equity supplemented the common law. Equitys role in the present context is much dubious following the passage of the Judicature Act of 1873/1875 which fused the administration of both the common law and equity. Subsequently, today equity stands as a different set of rules distinct to that of the common law.

Today, Equity has surpassed into a distinct system of law as opposed to the common law. Yet, today equity still retains some of its original characteristics which aided equity to emerge and evolve into a separate system, the foremost characteristic being able to adapt to changes. Consequently, still it is able to create new rights and remedies; one good illustration is the modern Mareva and Anton Pillar search orders which are certain types of injunctions, being true to the fact that equity still supplements the common law. The trust is still evolving and it is now very important in the commercial world as opposed to the historical family home.

Though it is the case, it exists today as a separate system of law, evolving to a system similar to that of the common law with rigid and inflexible rules which introduces a system of precedent. Yet, the discretionary nature of equity still remains intact, but not to the extent it was recognized at the initial stages. In contrast, today the judges have to take into account the established equitable maxims in deciding as to whether a claimant is entitled to a remedy. Consequently, as per Jessel MR in the case of Re National Funds Assurance Company [4] today equity is not a “court of conscience but rather a court of law”. Hence, today equity operates on a system of precedent, going far ahead from the historic times, where the decisions were based on conscionability, where each individual case was treated as one of a kind. Subsequently, as per the case of Re Diplock [5] today a claimant who comes to equity must show that their claim has,

“An ancestry founded in history and in the practice and precedents of the court administering equity jurisdiction. It is not sufficient that because we may think that the ‘justice’ of the present case requires it, we should invent such a jurisdiction for the first time.” [6]

Nonetheless, today, judges still refer to this concept of unconscionability. This was illustrated in the case of Pennington v Waine [7] . Hence, today the judges could be said to still consider the case still on an individuality basis but more according to precedent.