Feminist Perspectives on Land Law - Essay Example

'Unfair shares for women: the rhetoric of equality and reality of inequality', Feminist perspectives on Land Law, eds. Lim, H and Bottomley, A The present marriage status has been marked by change in the economic and social status of the women, with changing economic conditions and significance of the role of money in marriage. Joint ownership has been a common practice. This significantly brings in the importance of equity as a means of protection for women in society acting as a safeguard against emotional pressures and undue influence. While there is nothing new about wives providing security for their husbands' debts, the last decade has seen an apparent increase in numerous cases where there has been an evidence on the part of the wives to avoid liability and there has been an effort made by the bankers to establish procedures which will make securities unimpeachable in the event of challenge. One of the important social factors contributing to this question has resulted from the fact that in recent year's family home has been used to secure for business borrowings in which both spouses are required to sign the relevant documents. There have been other economic and political factors which has supported this economic decision. This presents a new situation which brought to surface the impact of 'undue influence' on the minority and weaker section representing wives; on the ground of emotional and financial dependence on the husband. Some of the other factors have been increased owner-occupation since second World war, government encouragement to small businesses in 1980's and increasing trend for spouses to hold jointly the legal title to the family home.. The real source of the problem has emerged from the fact that though wife is now required to execute documents charging the family home, it does not necessarily mean that she has an equal involvement with her husband in planning the transaction or an equal voice when it comes to making the decision to sign. The role of the courts in the English law, is significant, while they respond to an increasing rhetoric of equality in English society throughout twentieth century, they still managed to continue to restrict women' access to fair share in the matrimonial home. The property disputes between couples and against mortgagees have presented before the judges many opportunities for creative lawmaking. And it can be seen that judges have been even more creative in the way they have managed to limit women's rights to a successful claim or defence, to limit women's claims even when they appear to 'win' their case, and to ensure that men generally do better out of these disputes than women. The equality and justice is hard to sustain on the facts. (Auchmuty,2005)1 The focus of this discussion is evaluation and examination of the unfair justice practiced with regard to the position of the women, when it comes to equal treatment, in the matters concerning property disputes. On many instances it can be seen in the context of English Law that men and commercial lenders and other individual have been the greater beneficiary in comparison to women. The law and the judges have invariably favoured the possession of property to male members and commercial lenders with bias against their social disposition to manage and maintain property. English women have not been treated equally in relation to property; they have consistently been denied their fair share in property ownership. The biggest test for the courts and the judges have been in the cases where there is legal rhetoric and legal reasoning, which have supported unfair shares between the two genders in attaining court resolutions of informal co-ownership disputes and unfair outcomes in undue influence cases involving mortgagees. The rules of equity need to protect women as in many cases even judges lean towards male bias. "Married women could and probably should benefit from special protection in property law; that is , because married women suffer special disadvantage on account of their structural position, as women and in marriage, in relation to property." (Auchmuty,2005)2 The position of the married women in financial spheres and management and ownership of independent property can be very aptly summarized as "The rhetoric in the earlier (undue influence) cases has as its focus the image of woman as victim, completely dependant on her husband and without a will of her own, having to be saved from her soft-hearted and soft-headed misguided loyalties by equitable intervention, the very icon of the Victorian bourgeoisie woman" (MacKenzie 1996) (Auchmuty,2005).3 There has been two very significant cases which determine the truth in the statement that the rhetoric of 'equality' is loaded with its opposite 'inequality and unfairness'. In the most sensational case which defines the significance of equity as the basis for equality for the protection of women in the case of misrepresentation or undue influence the highlight has been on the Barclays Bank v O'Brien [1993] 4 All ER 417 AND Royal Bank of Scotland plc v Etridge (No 2) [2001] 2 FLR 1364. In both the cases the plaintive wife was the victim of wrongful presentation of facts and the lender or the Banker had not fulfilled the procedural requirements which meet the code established by the bank for securing the loans. Although the banking procedures vary, the likelihood is that the warning will not have impact or will not be acted upon in cases where the wife is given this information just before being asked to sign. The banking industry claimed an attempt to self-regulation which has been the cause of uncertainty reflected in different judicial approaches in deciding cases involving wives, husbands and creditors. The main problem lies in the fact that it is necessary to devise a formula which is feasible for determining the circumstances in which a creditor should be held responsible for a husbands misconduct.(Fehlberg,1994)4 Case 1- Barclays Bank v O'Brien: This is classic case which was presented before the House of Lords addressing the legal problems which arose in a very socially complex and very common scenarios in which wife, husband and creditor bank was very intricately involved. This was a classic case of wrong presentation of facts and use of undue influence to enforce involvement in a financial debt which led to wife filing a petition against the banker and the husband. The circumstance occurs when wife, under some emotional pressure or misunderstanding caused by her husband, signs a charge over their family home in order to secure a loan to a business, conducted by the husband, though it provides for the family income. There are two pressure which emerge in this circumstance firstly to what extent should private pressures and misunderstandings operate to invalidate such transactions against creditor taking the charge; and secondly how relevant is the fact, at least to an outsider, the fact that wife may have stood to gain as well as lose from entering the transaction. This uneasy interaction between 'private' spousal relationships and 'public' third party security transactions is the general basis of the problem in the O'Brien case. Equity in this case is the source of protection for the wife who was not given the detailed account of the risk involved in the overdraft claimed by the husband in the name of business. The fact remained that the great majority of married women were not in a position of equal bargaining power with their husbands or with commercial third parties. Less educated and less experienced, and with 'wrong' priorities, they were easy prey for pressure and bullying. This resulted in a situation where married women continued to be victims of undue influence and misrepresentation as case law of twentieth century unfolded. In many cases even the equity served to support the power of the commercial lender and men and other individuals but women. The judgement was in favour of man, who had image which supported his better understanding of equity than women, who faced the brunt of the emotional pressure and undue influence as well lost on the grounds of her image as the incapable, weaker section of society incapable of reason and intellect. But O' Brien case established the fact that just because in past women have been in weaker and vulnerable position, wives need the protection in the form of equity and from undue influence from court. Case 2- Royal Bank of Scotland plc v Etridge: Another very classic case which gave recognition to the issue of undue influence has been the case which encompassed all non-commercial relationships, undue influence by their husbands in mortgage situations remains a jurisdiction bounded by marriage. All eight appeals in the Etridge concerned wives who had alleged undue influence by their husbands, and the judicial narrative focused entirely on husbands and wives except when laying down the broader principle. The conditions of marriage that supports the exercise of undue influence by husbands on wives, while not exclusive of relationship are integral and assumed part of the institution. And in this context undue influence becomes a normal feature, and that makes it very difficult to prove. It is normal for wives to want and do things to please their husbands. This is part of the love and trust in the relationship. But when it is an issue of property and money, this relative power take the form of undue influence. "A woman is more likely to go along with her husbands designs if he runs the business that brings in the greater part of the family income and together with it the mere fact of his being male, allows him to claim the greater financial knowledge and expertise. And if she disagrees, it is always open to him to beat her up or make her life hell"(Auchmuty,2005).5 Taking into account the status of women in the last hundred years one can conclude in the light of the English law that whatever their formal equality, women were in general not equal at all. Married Women's Property Act 1882, in the influential Yerkey v Jones case in 1940 demonstrated how the modern law of undue influence lay in a direct line of succession from the married woman's settlement and restraint upon anticipation and these devices were designed to protect the married woman from husbands intent upon getting their hands on her property. The courts of equity examined all property transactions between wives and husbands 'with watchfulness and caution, and dread of undue influence' and 'in substance this position has been maintained until the present day'(Auchmuty,2005)6 Before 1883 the common law did not recognize a married woman as possessing any property of her own independently of her husband. From the thirteenth century onwards, however, she could dispose of her land, though only after she had been subjected to an examination by the judges to ensure that she gave her free consent. In the seventeenth century the Court of Chancery developed the concept of her separate estate. This was property which was settled on her for her separate use and benefit. Such property was her property in equity and her power to deal with it rested on equitable principles. (Millett, 2001)7Still husband retained the control to influence her decision and it was considered within rights. The banks or creditors never needed to inquire into the opinions of the women; it was taken for granted that it was in harmony with man's decision. This historical ground lays the emphasis on the new emerging protection of women with equity as means of protection against undue influence. The rhetoric of equality is impressive, for it can encourage society to live up to its promise. It can also work to one's disadvantage when the reality fails to meet the rhetoric. As the truth which has been seen in the above mentioned cases very clearly presents the fact that simply declaring our equality does not make us equal. This is a threat to safeguarding the interest of the weaker section which still needs protection from undue influence. The rhetoric is dangerous as it removes all justification for protection in situations where protection is still needed. If women continue to suffer structural social and economic disadvantage at the hands of men, then removal of gendered basis for intervention can place them at legal disadvantage too. The role of the creditor was very strongly challenged for the first time in O'Brien case, before that there was nor relief for wife who was dominated in every way by the lender, man and other individuals. Relief came to wives for the first time with the recognition of her rights and need for protection in O'Brien case. "To establish a claim to a remedy in equity based for example on undue influence against a creditor before O'Brien an applicant was faced with the daunting task of bringing complicity home to the creditor. It was imperative to show that the creditor was either guilty of actual undue influence himself (since the normal debtor-creditor/banker-customer relationship did not give rise to a presumption of undue influence) or that he had adopted, whether by notice or agency, the actions of one who had been guilty of influence. As in influence so was it in misrepresentation. The creditor could become infected with misrepresentation either by actual colourable conduct or by adopting the actions of a rogue. For obvious reasons the overwhelming majority of the cases are decided in the latter category in both instances rather than the former." (Jeremie, 1994)8 English property law contains within its own equitable jurisdiction the means to meet the challenge to resolve the issue of undue influence and the rhetoric of equality. Equity has a contextual jurisdiction: it claims the power to come to the rescue of any disadvantaged person where 'justice and conscience' demand it. But the power is more often honoured in the rhetoric than in the reality. The courts are incapable of developing rules that recognize women's economic inequality. This is especially in relation to empathy and above all will. The cases pertaining undue influence rules as accepted by House of Lords in Royal Bank of Scotland v Etridge and O'Brien case demonstrates a disturbingly high legal tolerance of men's bad behaviour. This is inherent in the acceptance that men deserve property and women do not or at any rate women deserve less. Women have been subjected to unfair shares in property ownership in any partnership relationship as marriage, co-habitation or simple live-in relationship. Women of the present times grow up believing that the sexes are truly equal. The fact is that the probability of unequal treatment is awaiting their doorstep through unfair and unjust circumstances which is presented by undue influence and the inability to prove it with facts and witnesses. The extent of their inequality is on surface when they are faced with the challenge to prove their ownership rights and exploited on the f grounds of unfair treatment. The Courts have a very significant role to play in the inquiry related to the private affairs between spouses. These arrangements are mostly legally binding, and are based on spouses living in harmony. But this position changes when a wife claims that a creditor is precluded from enforcing its security because of private emotional pressures or misunderstanding. The safeguard and response provided by the banking industry is not to become involved in assessing the private arrangements between spouses. They primarily focus on providing more accurate information to third party security before signing. Enforcement of this is enhanced by the creditors attempt to displace private pressure and misunderstanding caused by the husband. This is essential to successful involvement of parties in good banking practice, which has been accepted as the code of practice adopted by the banking industry. The code of practice-which is reflected in good banking, is at the heart of the matter. The voluntary code adopted by the banks and building societies in march 1992, followed by the renewal in March 1994, provides that before a private individual gives a guarantee or third party security, the bank or building society will inform her that she could become liable as well as or instead a principal debtor, and advice her to seek advice before signing. This has been very apparent in the case of O'Brien where security providers should have advised whether the security in unlimited as to the mount or in case of limited security, what the limit of the liability will be, reflecting 'reasonable steps' as set out in O'Brien case.(Fehlberg, 1994)9 In the light of the case and the facts related to the case which affirms the unfairness and undue influence when it comes to justice, requires that wives be provided with special equity which needs to be adopted to offer special protection to wives who provided security for their husband's debts. This required that one should examine the relationship between the debtor and surety, and determine that the influence of the debtor over surety on the grounds of reliance which emerged as natural feature of the interaction. The surety obligations of this protected class which included wives, would be unenforceable if : the relationship between the debtor(husband) and surety(wife) and the likelihood of influence was known to the creditor; secondly the surety consent was obtained by the undue influence or misrepresentation of the debtor, or without 'an adequate undertaking of the nature and effect of the transaction,' and thirdly the creditor failed to take reasonable steps to ensure that the surety had given a true informed consent to the transaction. The most notable feature which made the case stand out in court was the wife's failure to understand the transaction. (Gretton, 1997)10 The rulings of the court in O'Brien and Pitt cases were based on two approaches which determined the creditors fault as they should have been responsible to assess and inform about the details of the transaction. The creditors should be held responsible for private pressure and misunderstanding suffered by the wife. The uncertainty regarding the application, and the final burden of the transaction in the form of the liability which was not apparent led to the unanimous decision that the present law has been founded on the 'obscure and possibly mistaken foundations'. The law needs to be restated and reformed in rulings which would reflect good principles and also reflects the current requirements of the society and provides as much certainty as possible. The rulings in the two cases confirmed the impact of undue influence on the wives, though the cases differed in some respects. Mrs. O'Brien charged the matrimonial home for overdraft facilities extended to a business in which her husband had an interest but Mrs. O'Brien had no interest; while Mrs. Pitt charged the home to secure a loan made to Mr. and Mrs. Pitt jointly for the stated purposes of discharging a first mortgage over their home and buying a holiday home (which was speculation in the market). A reference to this case give a clear picture that Mrs. O'Brien was not fully aware of the terms and conditions of the transaction the House of Lords gave the ruling that she was victim of her husbands undue influence, as she had no control and no complete information over how the transaction was structured or the capacity in which she was implicated. Thus in O'Brien case, Lord Browne-Wilkinson acknowledged the position of the wife who has been induced to stand as surety for her husbands debts by his undue influence, misrepresentation or some other 'actionable wrong'(Fehlberg, 1994)11 Under such circumstances the wife needs to have an equity against him set aside for that transaction. Under the ordinary principles of equity, her right to set aside the transaction would be enforceable against third party's (such as creditors) if her husband was acting as the third party's agent, or third party had notice of the facts giving rise to the equity. The creditors should have been responsible enough to make the transaction clear and transparent to the person providing surety, as the complexity of the relationship between husband and wife can be presented with some liability issues concerning third party involvement. The creditors can enhance their role with more responsible approach by taking steps which make sure that the wife acting as surety on a property has been well informed. The House of Lords favoured the position of the wife by considering that fair balance should be aimed to be achieved by the creditors by applying the doctrines of notice. The security could have been voidable if the creditor may have been more active in obtaining actual or constructive notice that wife's consent to providing the security may have been obtained as a result of legal wrong committed by her husband. The relationship between borrower and the security provider is one where there is substantial risk that in procuring the security providers consent the borrower has committed a legal wrong. But creditors can avoid this pitfall and legal wrong by taking 'reasonable steps'set out in O'Brien case which require a creditor to insist that the wife should attend the private meeting (in the absence of her husband ) with representative creditor, at which she is informed of the extent of her liability as surety, and warned of the risk she is running and urged to take independent legal advice. The burden on the creditor is immense and there are only exceptional cases where a creditor has knowledge of further facts which render presence of undue influence not only possible but probable' will creditor, to be safe, have to insist that wife be separately advised' (Fehlberg, 1994)12 The overall impact of the creditor and the court in this context is find ways to combat private pressures and misunderstandings by increasing the information which creditors are obliged to provide to the wives. Though the extent to which the creditors or the courts can protect the wives from such intimate pressures is very limited. It is important to acknowledge that while providing information may reduce the number of operative misrepresentations, it is unlikely to dispel ongoing private emotional pressure, ranging from physical abuse to the more subtle mental and psychological influence and abuse. In many cases the reality is that for the sake of the marriage, the wife will feel that she has no choice but to sign, whatever she is told. This weak position puts the pressure on the authorities and the institutions to make things transparent and clear when it comes to any financial and equity related transactions. The most challenging task for the courts is to strike a balance which House of Lords tried to accomplish by balancing the interests of both the creditors and wives who provide security for their husbands' debts. The need of balance is necessary with the public interests and private pressures, the presence of limitations and the relief and the continuous presence of manifested disadvantage play an important role in the reformulation of the notice approach, which give a platform for more fair execution. The unfair shares of the women is evident in 'the inequality clad in the rhetoric of equality' is challenged when the private pressures overcast the decision concerning public interest. The House of Lords held the view that there is heavy reliance in UK on the family home as loan security as an 'important public interest' and as a result protection offered by the courts to third party providers must be necessarily limited, and more steps should be taken to protect the vulnerable-wife. (Millett, 2001)13 It is very necessary to educate people in vulnerable position to be made aware of their rights and offer knowledge based on which they should act as surety in any relationship. The courts have acknowledged that it is a very difficult task to discourage wives from making financial decisions on the basis of emotional involvement. The increasing public awareness about the potentially non-beneficial aspects of providing security is a powerful supplement to the limited protection offered by the law. A media campaign conducted by public body and specifically directed at addressing the complex interaction between emotional and financial vulnerability may prove more effective. This is a real social problem where the vulnerable should get more fundamental protection from private pressure, in the form of community support for their decision not to sign. The Courts and The House of Lords had very remarkable role in the O'Brien case in assuring such protection in the form of equity to the wife and the vulnerable party on the grounds of undue influence, emotional pressure and misrepresentation. There are sound reasons why courts intervene in these transactions. ( Wong, 2002)14 The most fundamental reason is to protect the wife from her husband's misrepresentations or undue influence. If the husband were the wrongdoer she had recognised cause of action against him. The wife needs protection because she has been persuaded by her husband, in whom she naturally places high degree of trust, to become a party, possibly against her will, to a very sophisticated transaction which neither of them fully understands, in which she holds potential liabilities which is not intended on her part. This is inappropriate and as he has not been aware of the alternatives. The social and economic context of the case has been an affirmation to unfair shares of women who needs equity as a form of protection against the pitfalls of emotional pressures and undue influence. She needs to stand up for her rights and make effort to be more aware of her position with regard to any financial transaction; the closed eyed and blinded support does not hold good in the real world where deceptive forces are in operation, in most intimate relations. Money and marriage are very closely connected, with emotions as the pendulum for manipulation and this is where courts are needed for granting justice and fair share to the vulnerable party. Work Cited Fehlberg, Belinda (1994).The Husband, the Bank, the Wife and Her Signature. The Modern Law Review. Vol.57 No.3, 467-475. (Fehlberg, 1994) Dobash & Dobash, Russell P. & R. Emerson (1981).Community Response to Violence against Wives: Charivari, Abstract Justice and Patriarchy. Social Problems. Vol.28 No.5, 563-581. (Dobash & Dobash, 1981) Millett, Lord (2001).The husband, the wife and the bank. Private Client Business. (Millett, 2001) Wong, Simone (2002).Revisiting Barclays Bank v. O'Brien and independent legal advice for vulnerable sureties. Journal of Business Law. ( Wong, 2002) Gretton, George L. (1997).Sexually transmitted debt. Scots Law Times. (Gretton, 1997) Cretney, Stephen M. (1992).The little woman and the big bad bank. Law Quarterly Review. ( Cretney, 1992) Jeremie, John (1994).Creditors beware: a wife is not a surety. Company Lawyer. (Jeremie, 1994) Auchmuty, Rosemary Unfair Shares for Women. http://www.uniset.ca/lloydata/lt/lt_etridge.htm Read More