Cityland Property v Dabrah [1968] Ch 166

Written By Nicolas Heyes

Chancery Division

Basic Facts: X sold a property to D, who took a mortgage from C. The mortgage had a provision for a pro rata discount if the balance was paid early. D was not informed of how this discount would be assessed.

Issue for the Court: Is the mortgage agreement unconscionable due to unfair terms?

Held The court found that excessively high interest rates in mortgages may be struck down as unconscionable.

 Goff J:

  • Unconscionable Terms: A mortgage can be deemed unconscionable if it includes unfair terms or exorbitant premiums. If the terms are unfair or unreasonable, equity may not enforce them. Here, the interest rate and premium significantly exceeded the value of the property, making the mortgage agreement unfair and unreasonable.

Nicolas Heyes
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