E. Conclusion

• Author: John D. McCamus
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 424-427

Page 424

It remains, then, to consider whether there is merit in Lord Denning’s suggestion in Lloyds Bank v. Bundy²⁸⁰that the three doctrines of duress, undue influence and unconscionability or, as he called it, "undue pressure," should be merged or synthesized into an overarching principle of inequality of bargaining power. On its facts, the Bundy case sits in the area where the doctrines of undue influence and unconscionability, at least as understood in Canada, tend to overlap. The finding of a majority of the Court of Appeal that the relationship between Bundy and the bank was a relationship of trust and confidence, thus giving rise to the doctrine of undue influence, was arguably a slightly generous one though perhaps within the scope of the traditional doctrine. On the other hand, under Canadian law at least, the facts of Bundy appear to engage the doctrine of unconscionability.²⁸¹The bank was aware of the relationship of the father to the son and the fact that Bundy was placing charges on his one and only valuable asset that exceeded its value in order to guarantee the debts of his son’s business. As well, the bank appeared to appreciate that the son’s business was in a precarious state. These circumstances could ground a finding that the bank had sufficient awareness of the improvidence of the agreement and the inequality of bargaining power between itself and Bundy to render the agreement unenforceable. It is an interesting question, then, whether

Page 425

the fact that these categories may not appear to have precise boundaries constitutes a sound reason for adopting Lord Denning’s approach of simply abolishing the distinctions between them and analyzing cases with a single principle operating at a higher level of generality. This question does not admit of an easy answer.

As a matter of doctrine, Lord Denning’s suggestion of a new principle was not adopted by his colleagues in the Bundy case. Moreover, the suggestion has been plainly rejected by the House of Lords.²⁸²Canadian courts²⁸³have been more welcoming but it would not be correct to suggest that Canadian courts have abandoned the traditional categories of analysis. Indeed, it appears unlikely that they will do so. Cases involving threats, for example, are rather different from the kinds of fact situations that invite application of the doctrines relating to relationships of trust and confidence and unconscionable bargains. Similarly, the core cases of presumptive undue...