Boustany v Pigott (1995) 69 P & CR 298

Key point

To establish an unconscionable bargain, not only must the transaction be unfair, it must have been procured by morally reprehensible conduct

Facts

  • An elderly woman (C)’s affairs were managed by her cousin
  • D, knowing that the cousin was away, invited C to a tea party where she flattered C and gave her a ride to the solicitor where C agreed to lease premises to B for less than 1/6 of the market value for ten years
  • C entered into the transaction despite the solicitor’s advice against it

Held (House of Lords)

The lease was set aside for unconscionable bargain

Lord Templeman

On unconscionable bargain

  • ‘It is not sufficient to attract the jurisdiction of equity to prove that a bargain is hard, unreasonable or foolish; it must be proved to be unconscionable, in the sense that ‘one of the parties to it has imposed the objectionable terms in a morally reprehensible manner, that is to say in a way which affects his conscience’

Present case

  • D had gotten C to agree to the terms of the lease which they knew they could not extract from her cousin
  • When the unfairness of the lease was pointed out to D by the solicitor, D did not release C from the bargain they have unfairly pressed on to her
  • In short, D must have taken advantage of C with the full knowledge that her conduct was unconscionable

Commentary

  • This is an exceptional situation is that legal advice was actually provided but was found insufficient to discharge the claim of unconscionable bargain given the continuous pressure on C despite while she received the advice
  • This case shifts away from the rigid application of the 3 requirements for unconscionable bargain laid down in Fry v Lane (that the claimant is ignorant, the sale was at considerable undervalue and the claimant had no independent advice) to looking at the quality of the conduct of the party that seeks to rely on the transaction