Rickett, Charles --- "Unconscionability and Commercial Law" [2005] UQLawJl 3; (2005) 24(1) University of Queensland Law Journal 73
UNCONSCIONABILITY AND COMMERCIAL LAW
CHARLES RICKETT[*]
Reference is increasingly made in private and commercial cases, and in legislation, to the standard of unconscionability. This essay examines this tendency and argues for caution in the standard’s use, on the basis of its tendency towards being a category of meaningless reference likely both to mislead judges and to threaten the position and expectations of, in particular, commercial actors.
I am honoured to have been invited to contribute to this series of lectures recognising Sir Roy Goode’s vision and work in establishing the Centre for Commercial Law Studies at Queen Mary. It was a Centre truly ahead of its time, and although there are now many such centres in many Commonwealth universities, none boasts quite such a distinguished founder, and none has quite the record of research achievement over a quarter of a century.
I need to say nothing very much about what I mean by commercial law. I am happy for my purpose to accept the ‘definition’, if such is its proper designation, given to that term by Sir Roy in his Hamlyn Lectures in 1998:
In my own perception commercial law represents the totality of the law’s response to mercantile disputes. It encompasses all those principles, rules and statutory provisions, of whatever kind and from whatever source, which bear on the private law rights and obligations of parties to commercial transactions, whether between themselves or in their relationships with others. Thus commercial law draws for its sustenance on all the great streams of law that together make up the corpus of English jurisprudence, with the law of contract as its core, whilst equity acts now as its handmaiden, now as the keeper of its conscience.[1]
Sir Roy’s comment touches on two points that explain the choice of my title ‘Unconscionability and Commercial Law’: first, that commercial law is largely a contextualised application of the fundamental concepts and doctrines of the private law, and, secondly, that that application includes both common law and equitable doctrines, and statutory developments. Sir Roy’s Hamlyn Lectures, particularly the first three, are a masterly exposition of these features in the setting of a range of examples. Another point that runs through the Lectures, as it has throughout all Sir Roy’s scholarship, is that the essence of commercial law is, as he puts it in his book on Commercial Law, ‘the accommodation of rules, usages and documents fashioned by the world of business; the facilitation, rather than the obstruction, of legitimate commercial development’.[2] One feature of that is predictability of outcomes from a legal point of view. Commercial activity consists of risk-taking, but parties do not expect to have to take legal risks, at least not in those cases where they are not deliberately seeking to test the legal boundaries. The function of the law is to provide clear facilitative boundaries for commercial activity, within which parties may acquire legal rights, and within which they may operate legitimately, and seek adjudicative assistance if there are disputes or if matters go awry. I say ‘adjudicative assistance’ deliberately, because it needs to be recognised that in most circumstances judicial determination (or more accurately declaration) of rights is merely a factor, although admittedly a strong one, in the mix of factors that the parties use to sort out their problems for and by themselves. The law is truly facilitative, as are its processes.
Against that background, any examination of ‘unconscionability’ will bring us face to face with a number of exacting inquiries, many of which are fundamental to the nature of law and adjudication in general in the common law system, and many of which are crucial to the effective operation of the law as a facilitative device in a commercial setting.
Standing alone, ‘unconscionability’ is a very slippery notion indeed. What does it mean? It cannot be a doctrine in its own right. Lord Nicholls made that plain in his comment in the Privy Council in rebutting an attempt to found accessorial liability on ‘unconscionability’:
Unconscionable is a word of immediate appeal to the equity lawyer. Equity is rooted historically in the concept of the Lord Chancellor, as the keeper of the Royal Conscience, concerning himself with conduct which was contrary to good conscience. It must be recognised, however, that unconscionable is not a word in everyday use by non-lawyers. If it is to be used in this context, and if it is to be the touchstone for liability as an accessory, it is essential to be clear on what, in this context, unconscionable means.[3]
The same must be true of every use of ‘unconscionable’ or ‘unconscionability’. It cannot have any role as a juridical concept except where a meaning has been stipulated for it. That is why it is inherently unstable as a juridical notion. It might of course be thought otherwise, in light of the existence of a specific doctrine of equity which actually uses the term, that of unconscionable bargains. I shall move on to a discussion of this well established jurisdiction to relieve a party of any obligations (and rights) acquired in an unconscionable transaction. I argue that the best justificatory position that interprets this part of the law requires no reference to ‘unconscionability’ at all.[4] That should put us immediately on our guard, of course, echoing Lord Nicholls’ concern, about the coherence of the doctrine. I then go on to argue that where unconscionability is referred to in the context of a number of other equitable doctrines, the same is true — it means nothing. However, its incoherence alone appears not to be enough to prevent instances of ‘unconscionability-abuse’. Its beguiling appeal has found its way into statutory provisions, particularly in Australia, and I argue finally that these provisions merely compound the problems already evident. Unconscionability is a term lawyers refer to often, but its status as a legally useful term is therefore highly questionable.
I. Unconscionability in Unconscionable Bargains
The jurisdiction to grant relief from an unconscionable bargain may be traced historically to two sources.[5] The first was equity’s special protection of heirs and expectants.[6] Where a person who expected to inherit property sold or mortgaged[7] that expectant interest, a rebuttable presumption was raised that entitled the heir to be relieved of the obligation. The basis of equity’s intervention was the perception, well justified if the reported cases were typical, that such persons lacked sufficient judgmental capacity to make rational decisions in their own long term interests.[8] This aspect of the equitable jurisdiction, however, was later restricted by statute.[9]
This statutory modification did not, however, touch upon the second source of the modern doctrine of unconscionable bargain.[10] Where the plaintiff was under some disadvantage which meant he could not be expected to fend for himself in dealings with others, equity would relieve him from his obligations.[11] In Fry v Lane,[12] Kay J concluded that the ‘result of the decisions is that where a purchase is made from a poor and ignorant man at a considerable undervalue, the vendor having no independent advice, a Court of Equity will set the transaction aside’. Although the doctrine was initially limited to the narrow category of the poor and ignorant,[13] equity subsequently extended its jurisdiction to all cases where, due to some special disability on one party’s part, the two parties did not meet on equal terms. In Louth v Diprose,[14] Deane J described the doctrine in its modern formulation in the following terms:
It has long been established that the jurisdiction of courts of equity to relieve against unconscionable dealing extends generally to circumstances in which (i) a party to the transaction is under a special disability in dealing with the other party to the transaction with the consequence that there was an absence of any degree of equality between them and (ii) that special disability was sufficiently evident to the other party to make it prima facie unfair or ‘unconscionable’ that the other party procure, accept or retain the benefit of the disadvantaged party’s assent ...
Unconscionable bargain is a well defined and narrow doctrine, and the notion of unconscionability which it reveals is a particularly confined one. Content is given to the term ‘unconscionable’ by extrapolation from the requirements for ‘liability’. The doctrine is characterised, as noted by Deane J, by two principal requirements. First, one party must suffer from some special disadvantage that impairs his judgmental capacity. Secondly, the other party must know (actually or constructively) of the first’s disability such that she cannot be permitted to retain the benefit of the bargain or transaction.[15] ‘Unconscionable’ best operates here as no more than useful shorthand for these requirements.
The fact that ‘unconscionability’ is in this context a descriptive and not a normative term controls its reach in a manner that makes the application of the doctrine tolerably clear and predictable. As with other legal doctrines, there is scope for change and development in its detailed application in the cases, because there is a fundamental principle underlying and justifying the decisions, and it is the application by the exercise of judgment of that principled basis that adds detail to the rules.
What is that best justifying principle? The presence within the authorities of elements that suggest a concern with both the judgmental capacity of one party and the ‘wrongdoing’ of the other has led to much debate over the proper classification of the doctrine. It is tempting to suggest that the best justificatory analysis is a combination of the two concerns.[16] The attempt to view the doctrine as a response to a single concern would be to alter unnecessarily its essence. To treat the doctrine as being exclusively concerned with wrongdoing, or with judgmental capacity, would result in the excision of an important aspect of the equitable jurisdiction from which the doctrine springs.[17] This is starkly illustrated in Louth v Diprose, where Brennan J’s formulation of the doctrine incorporates both elements: ‘a relationship between the parties which, to the knowledge of the donee, places the donor at a special disadvantage vis-a-vis the donee; the donee’s unconscientious exploitation of the donor’s disadvantage; and the consequent overbearing of the will of the donor whereby the donor is unable to make a worthwhile judgment as to what is in his or her best interest.’[18] It is not, therefore, it is said, a matter of choosing between one or other explanation, and in doing so necessarily rejecting an important part of the formulation as unintended. It is, rather, a matter of recognising that the doctrine embraces two quite distinct themes – one that responds to concerns about the judgmental capacity of one party, and the second to the wrongful behaviour of the other. However, even supporters of a combined justification are quick to agree that the need for wrongdoing is not as clear in the case law as is the attention paid to judgmental incapacity.
Of course, if one pursues the matter analytically, it becomes extremely difficult to hold the two concerns together. The problem term is ‘wrongdoing’. Is this a legal notion or not? On the one hand, one might take the term as referring to the commission of a legal wrong. What is it that creates that wrong? For those who properly think of private law as concerned with rights and duties, it is clear that a wrong is found in the breach of a duty. But what (prior) duty is breached here? Is there a primary legal duty not to act unconscionably? That not only puts the cart before the horse, but it destroys entirely the notion of a particular doctrine of unconscionable bargain because one can, presumably, act unconscionably in all sorts of ways unrelated to bargaining. Is there a primary legal duty not to take advantage of another? Any such duty would not only require considerable definitional work, but it would likely destroy the legitimacy of much transactional activity. The analytical problem is of course that the fundamental focus is on the special disadvantage of the other party. If we are to locate a primary duty, breach of which explains the doctrine of unconscionable bargain as a tort, that duty must incorporate the special disadvantage. But once we have a specially disadvantaged party, what more is required for relief? The requirement for knowledge of the disadvantage is explained by the value given to security of receipts. It is nothing to do with the value of knowledge per se. I return to this below.
There are suggestions in leading cases that there must be some element of wrongdoing. Thus, in Boustany v Piggott,[19] Lord Templeman said unconscionable ‘relates not merely to the terms of the bargain but to the behaviour of the stronger party which must be characterised by some moral culpability or impropriety’. However, first, there are many cases where there was no active wrongdoing by the defendant party. Secondly, an analysis of the doctrine as requiring wrongdoing is at odds with its historical origins.[20] Thirdly, to the extent that the Privy Council in both O’Connor v Hart[21] and Boustany required victimisation, it is far from clear that their Lordships accurately described the content of the doctrine. In its original form, as a rule concerned with expectant heirs and the poor and ignorant, there was no mention at all of the need to prove active victimisation.[22] Fourthly, it may indeed well be the case that terms such as ‘victimisation’, ‘overreaching’ and ‘exploitation’ as used in this context import nothing beyond that the other party was aware of the disadvantaged party’s disability.[23] While there will clearly be cases where the disadvantaged party is actively overreached, the fundamental concern of the doctrine of unconscionable bargain, as is clear from its origins in contracts with heirs and the poor and ignorant, is with that party’s inability to make a rational and self-interested judgment.
Perhaps, of course, the term ‘wrongdoing’ is used to mean more than knowledge, but not as a legal notion at all? Perhaps it is simply a word being used emotively in an analytically unnecessary context? If that is so, it is a dangerous usage and is best avoided. In this sense unconscionability is merely a conclusion, and not a reason.
If wrongdoing is rejected as any part of a justification for the doctrine, we are left with impaired capacity for judgment. That is, in my view, what the doctrine is properly about. The consequence of this justificatory analysis is that the doctrine is concerned with transactional process rather than transactional outcome. Sometimes this is called ‘procedural unconscionability’. It is not enough that the bargain be a hard or even an improvident one.[24] The law does not relieve a person from their own folly.[25] What is required is that a person have suffered from some disabling condition that so impaired his judgmental capacity that he is unable to make the sort of rational, self-interested decision that the law assumes those of full age to be capable of making.[26] The factors which may constitute such a disability are of great variety and can be categorised in a number of ways,[27] but in broad terms they have the effect either of significantly impairing the plaintiff’s decision-making capacity or of precluding it altogether.[28]
Once it is determined that in fact a person is unable effectively to consent to the transaction at issue, that might be regarded as sufficient by itself to justify relieving that person of the consequences of the transaction. In the case of gifts, it seems that the law does gives full rein to this inclination toward relief.[29] In cases where the transaction sought to be set aside is contractual in nature, this initial inclination towards relief is, however, met by other considerations. Principal among these are ‘the pragmatic reality of commercial life ... the reflection of objectivity in the case of innocent parties which accords with contractual concepts ... ’,[30] and the general concern for a person’s interest in the security of his receipt. Historically, these considerations prevailed, and the courts refused to accept unsoundness of mind as a ground per se to set a contract aside. It was thus said that ‘no man could be allowed to stultify himself, and avoid his acts, on the ground of his being non compos mentis’.[31] However, this approach was subsequently relaxed, and in Gore v Gibson[32] and Molton v Camroux[33] Pollock CB accepted that ‘unsoundness of mind (as also intoxication) [was] a good defence to an action upon a contract ...’.[34] Pollock CB’s willingness to set the contract aside was not, however, an outright rejection of the concerns that such relief would undermine the binding nature of the contract. Relief was possible only where the non-incapacitated party was aware of the mental incapacity of the other. It is now established that in a claim of unconscionable bargain the disadvantaged person must show that the other was aware or ought to have known of the special disadvantage.[35] As I have indicated, the requirement of proof of that knowledge is the additional factor that overcomes the legitimate concern for security of receipt. In this respect, while the need for the other party to know of the incapacity can be justified as a mechanism to regulate the tension between the desire to afford relief and the need to protect transactional security, the presence of active overreaching is doctrinally irrelevant to the justification for the law’s intervention.
Closely related to the question of knowledge of the disability is the issue of the substantive unfairness of the transaction itself. This is a vital point to grasp. The doctrine itself is not concerned with what is sometimes called ‘substantive unconscionability’. It is true that in the majority of cases in which the transaction has been set aside as an unconscionable bargain, the transaction has been obviously unfair to the disadvantaged party.[36] However, it is clear that while substantive unfairness is usually present, it is not necessary for the disadvantaged party to show that the transaction was manifestly disadvantageous to him. In both Commercial Bank of Australia v Amadio[37] and Louth v Diprose,[38] Deane J expressly acknowledged that manifest disadvantage was not essential. This is not to say, however, that the disadvantageous nature of the transaction is entirely irrelevant. It is an important evidential matter, which bears particularly upon the defendant’s knowledge. Where the transaction is obviously unfair or harsh, and thus not explicable by ordinary and legitimate motives, it is a justifiable inference that one party was aware, or ought to have been aware, of the other party’s special disadvantage. However, relief is not given, and should not be given, because the court does not like the terms of the bargain.
Unconscionable bargain is a legitimate doctrine of the private law. It can and ought to be applied in commercial contexts, since a fundamental requirement of any transaction is that both parties should have adequate judgmental capacity.[39] Its existence and application jeopardises neither certainty nor predictability in the law. It is understandable by persons of business. It does not question the market in which commercial transactions take place. In fact it supports a fundamental attribute of a workable market – that of judgmental capacity guaranteeing participator autonomy. Judgmental capacity is of course an essential attribute of the so-called homo economicus, the rational utility-maximising economic actor whose home is the market. And, most importantly, its best justificatory principle constrains the range of factors judges can appeal to in deciding in any case whether there has been an unconscionable bargain. The fact that some judges might fail to appreciate the constraints upon them, and might be minded to declare unconscionable some bargains that do not exhibit these requirements, is certainly a cause for concern. But it does not threaten the juridical legitimacy of the concept itself. What it does is point out that those judges take rather more liberties than they ought. If a reference is made to the role of equity, in the doctrine of unconscionable bargain, as the keeper of the conscience of commercial law, it means no more than that equity is concerned with ensuring so far as possible that a disadvantaged party entering into a transaction is freed from the effect of that disadvantage.
II. Unconscionability Beyond Unconscionable Bargains
I suggested at the outset of my discussion of the doctrine of unconscionable bargain that ‘unconscionable’ is a descriptive shorthand word for the detailed requirements of the specific doctrine. I finished by suggesting that ‘unconscionable’ might be understood to refer more generally also to the equitable (or keeper of the conscience) basis of the doctrine. But there is no prescriptive pull in either of those usages. Indeed, the doctrine could and would operate even if the word were banned from legal usage. Was not the doctrine in any event originally conceived without the use of the term? There is certainly nothing in the term that presents ‘unconscionable’ as a doctrine of the law of equity capable of, or requiring, application per se. The same is true if the term is presented as a noun, ‘unconsionability’.
It is also fundamentally important to note that the doctrine of unconscionable bargain is not a doctrine about ‘unconscionable conduct’. Nor is it about ‘unconscientious dealing’ if by dealing is meant conduct.[40] As I have argued, it is not concerned with making persons liable for conduct at all. Indeed, to suggest that it provides either a historical or a doctrinal basis, or both, for a jurisdiction to deal with unconscionable conduct is thoroughly misleading.
Unfortunately, in more recent times, the historical and doctrinal are often ignored. ‘Unconscionability’ and its variant ‘unconscionable conduct’ have rapidly become prominent but largely incoherent features of the legal landscape. And they creep across all contexts in which private law is applied. The terms are sometimes used, I suspect, by both practitioners and judges in these days of smorgasbord pleadings to describe an all embracing claim when a more specific and legitimate ground fails to present itself.[41] It is in this context a last refuge of the desperate – many react these days with disbelief if it is suggested there might be no legal claim because there is no legal right![42] Sometimes it is a first refuge of the analytically lazy – as a law teacher I am increasingly frustrated by students, and even colleagues, who want to say that it all has to do with ‘good conscience’![43] This usage is quite simply illegitimate, and reveals in my view a complete lack of appreciation of the entire endeavour of the common law. It clearly presents a danger to predictability and the facilitation of dealings, a fundamental feature of which is that the parties themselves determine (and pay for) the allocation of risks; but is probably rooted out more easily than other forms of what I have already referred to as ‘unconscionability-abuse’, because it is so obviously an angel of darkness.
It is true, at a general level, that several doctrines providing for the involvement of equity on behalf of a person are founded on the existence of conduct by another that has been labelled ‘unconscionable’. Historically, their concern was to prevent fraud, in its broad equitable sense.[44] Analytically, it is possible to identify two senses in which the notion of ‘unconscionability’ is increasingly used.[45] First, unconscionability is stated to be simply an organising idea or theme for other more specific equitable doctrines. Thus, equity’s rules on time and notices can at a high level of abstraction be regarded as resting on a notion of unconscionability.[46] Secondly, at a slightly lower level of abstraction, unconscionability is one element amongst others in doctrines such as estoppel and relief against forfeitures.[47] However, in both these senses, the precise content of such unconscionability is largely, as it should be, determined by the established principles and rules of those more specific doctrines. They are best explained and interpreted without any reference to unconscionability at all. In that respect, there is no real challenge to or concern about their application in commercial contexts.
However, where ‘unconscionability’ is placed in the forefront of these doctrines, as has increasingly been the case, the very slipperiness of the term promotes problems for law and legal science. First, because of its ambiguity, it can be given a new meaning within the particular doctrine itself that is different from its original meaning. Second, because its meaning is thus skewed and changes, the doctrine itself starts to be re-interpreted. Third, the constant reference to unconscionability across a spectrum of doctrines leads to further slippage — the doctrines begin to coalesce into a single doctrine.[48] In particular, this third development gets very close to, and indeed may be the genesis of, indiscriminate resort to unconscionability as a backstop in the pleadings smorgasbord. However, it carries with it here a type of priestly mystique, because the manner in which it is developed, by judicial extrapolation of principles out of rules to an ever-broader final principle, looks so much like the authoritative establishment of legal truth. All three stages in this development are illegitimate in my view, but they are less easy to combat because the angel of darkness is dressed like an angel of light. After all, defeating unconscionability is like apple pie and motherhood. How could it possibly be doubted by right-thinking people?
Let me establish my point simply, by returning to the unconscionable bargain doctrine. If ‘unconscionable’ therein is interpreted as ‘unconscionable conduct’, the doctrine alters its focus entirely, from the capacity position of one party to the conduct of the other. That shift in focus, as we have discovered, has already made some appearance. Once that trend is under way, and if it remains unchecked, the doctrine is itself changed, and starts to become a support for similar changes in other (associated) doctrines.
Some see this kind of change as entirely acceptable, and indeed as a good thing. Thus, they suggest that there has begun to be, and indeed should be, a change in the emphasis of unconscionability jurisprudence, beyond merely the prevention of equitable fraud as its historical root, to the curtailment of all forms of self-interested behaviour (or ‘exploitation’), and even the promotion of other-regarding and altruistic conduct (or protection of the vulnerable and needy). So, rather than the law’s concern being limited to process, for example in those doctrines of equity where unconscionability is said to explain them (unconscionable bargain, undue influence, unilateral mistake, and relief from the effects of fraud, misrepresentation and duress[49]), the focus shifts to concern with outcomes.[50] Unconscionability is located in what results, rather than in how it results. Hence, it is a conclusion not a reason.
There are some examples of this ‘shift’ in Australian jurisprudence. One particularly noteworthy example, in my view, is the High Court’s decision in Bridgewater v Leahy.[51] A sale of some of the deceased’s farming property to his nephew was made at an undervalue, $150,000 being paid for property worth on the market almost $700,000. The evidence revealed that the sale had been suggested to the deceased by the nephew himself some 18 months before the deceased’s death. The evidence also established that the deceased’s own wishes were the same, that after the sale of other land owned by the nephew he should use the proceeds to purchase the deceased’s land. The deceased wished to ensure that the nephew received the land so that it could remain as part of an integrated farming enterprise with an experienced and reliable manager. Furthermore, the transaction was not pushed through quickly. The deceased’s solicitor caused a medical examination of the deceased to be undertaken before the latter signed the relevant sale documents, and the examination confirmed that the deceased was of sound mind and had capacity to make decisions about his affairs. The deceased’s daughters sought to have the transaction set aside as an unconscionable bargain, and they succeeded before the High Court by a majority.
Gaudron, Gummow and Kirby JJ stated:
Bill [the deceased] had a goal of retaining the properties as an integrated farming enterprise under reliable and experienced management. ... The transfers and the deed, as a means of attaining that goal, involved an improvident transaction which was neither fair nor just nor reasonable. The effect of the transfers and the deed was to dispose of a significant portion of Bill’s assets not for their value of $696,811 but for $150,000. This transaction put it out of Bill’s power to change his testamentary arrangements with respect to that portion of his assets. ... Bill’s goal to preserve his rural interests intact and his perception that Neil [the nephew] was the candidate to provide reliable and experienced management thereof were significant elements in his emotional attachment to and dependency upon Neil. The initiative to utilise the circumstances of the sale of … [Neil’s] land (to the retention of which Bill had been opposed) for the irreversible implementation of Bill’s wishes during his lifetime came from Neil. It is not an answer that there was no finding that Neil had pursued the initiative to its implementation in July and November 1988 with the motive or purpose of forestalling any change on Bill’s testamentary intentions. The equity to set aside the deed may be enlivened not only by the active pursuit of the benefit it conferred but by the passive acceptance of that benefit.[52]
Their Honours then concluded that the relationship between the deceased and his nephew meant that, in discussing the question of using the proceeds from the sale of the nephew’s land, they were on unequal terms. The nephew took advantage of this position and obtained a benefit ‘through a grossly improvident transaction on the part of his uncle’.[53] Their Honours reasoned: ‘[i]t is unconscionable for [the nephew] and his wife to retain the benefit of the improvident transaction by asserting the forgiveness of the whole of the debt which would otherwise be owing to [the deceased’s] estate’.[54]
There is little in the judgment that examines and applies the established law of unconscionable bargain. The improvidence of the transaction appeared to be sufficient in itself for the bargain to fall foul of the doctrine. The uncontradicted evidence that the deceased had good reason to effect the transaction as he did, and that he had been found in a medical examination not to be lacking in mental capacity or understanding at the relevant time, although going to the capacity of the deceased, was ignored. It is almost impossible to escape the conclusion that the transaction was set aside because its outcome was ‘unfair’ or unconscionable. The illegitimacy of the majority’s position is even more stark when compared with the position taken by the minority, Gleeson CJ and Callinan J. Their Honours applied the fundamental requirement of the doctrine and held that the deceased was not under any special disadvantage. Bridgewater is an example of what happens when doctrinal moorings are ignored for the apparent pursuit of justice and good conscience in the round.
Let us return to the various doctrines from which unconscionability is said to emanate, and to explain. It transpires that all the doctrines are justified by clear and justiciable principles, without the need to refer to unconscionability, or any variation/s of ‘the principle of unconscionability’,[55] at all. Some doctrines are concerned to ensure appropriate levels of decision-making capacity: unconscionable bargain, transactional undue influence, relational undue influence, and unilateral mistake.[56] Some are concerned to deal with the abuse of a position of trust and confidence: breach of fiduciary duty and breach of confidence.[57] Some are concerned to counter an insistence on the exercise of rights that is regarded as unacceptable for some reason, for example, that the pursuit of punishment is a matter for the State and not private law, or that a counter-promise ought to be fulfilled: relief against penalties and forfeitures, relief in cases of time stipulations, the equity of redemption, equitable set-off, and estoppel. Some doctrines are concerned to counter an insistence that no legal obligations exist where that insistence is founded on issues of form that contradict the substance of the transaction: equity does not permit a statute to be used as a cloak for fraud, and estoppel. Others may be concerned to prevent the retention of property where that retention was not intended by the transferor. Indeed, in Australia there appears to be a doctrine that seeks to prevent the retention of property where its receipt, let alone its retention, was not intended by the transferor.[58] This latter development creates difficulties that require detailed consideration in themselves.
The concentration on the particular doctrines and their justificatory principles indicate that recourse to ‘unconscionability’ is not only dangerous, but unnecessary. It is simply not required to ensure the coherence and effective operation of the manifold doctrines to which it is linked. It is dangerous because it is another example of the modern trend to appeal to very general abstract principles as if they tell us all that needs to be told and provide us with an adequate basis for adjudication. Patrick Parkinson states:
At a certain point, however, the process of synthesis and abstraction reaches the place where what is expressed as the principle is, in truth, no principle at all: it is an objective name for subjectivity, a reification of that which is indefinable. Unless more specific definition is made, an unjust enrichment is merely an enrichment which the court considers unjust, a reasonable expectation is an expectation which the court considers reasonable; and unconscionable conduct is conduct which the court considers unconscionable. Professor Julius Stone called these ‘categories of meaningless reference’.[59]
Categories of meaningless reference are useless for predictability, or as normative guides for application by an exercise of judgment to the facts of a case. This is a fundamental observation about the nature of law, and the adjudicative process that a system of law offers.
Lord Walker, in a recent lecture in Sydney,[60] reminded his audience of a statement of Millett J, as he then was, in Agip (Africa) Ltd v Jackson, where his Lordship was discussing in effect the mens rea of receipt and assistance liability in equity. Millett J stated:[61] ‘The true distinction is between honesty and dishonesty. It is essentially a jury question.’ Lord Walker tells us that:
The prime characteristic of a jury question is the form in which it has to be answered. However imponderable the question, the answer must be short and unambiguous and never has to be backed up by reasons.
His frustration at the inability, after so much recent judicial examination of the meaning of dishonesty to be applied in dishonest assistance cases, to find a clearly stated meaning, leads his Lordship to suggest: ‘Perhaps the time has come to curtail the discussion and just pose the jury question.’ With respect, although I understand the reason for it, this seems to me something of a counsel of despair. But what is more intriguing is that Lord Walker then goes on to critique the English Court of Appeal’s appeal to unconscionability as the touchstone of receipt liability in equity.[62] My thought is this: perhaps ‘unconscionability’, even more so than dishonesty, can only ever be, as a category of meaningless reference, a jury question? All the more reason therefore to avoid its importation into legal analysis, since recognising a jury question status for it would be to legitimise its entirely uncontrolled application by judges. Not that that is what Lord Walker wants of course. Indeed he reminds us that equity is a
principled system …, not a general liberty for the court to decide cases as it thinks fair. … It is just as well that cases are not decided on the court’s general perception of what is fair, since it is striking how the cases throw up facts on which both lawyers and laymen may have very different views as to what would be a fair result.
Judges ought not to announce principles at so abstract a level that they are devoid of clear ordinary meaning. Still less should they attempt to apply them as legal principles. That there is no generally accepted meaning for unconscionability should immediately warn us off its use. It is not good enough to trumpet the rule of law, and then to apply the rule of men’s hearts. The rule of law requires juridically applicable principles. To tell a cricket umpire to adjudicate on the basis of fairness would be to deny the game the right to be taken seriously; those who wanted to carry on playing the game would need to play elsewhere. To tell a judge to adjudicate on the basis of unconscionability would be to deny the law the right to be taken seriously; those who wanted to carry on living under the law would need to live elsewhere.[63] That is not so easy, but commercial parties can always choose, at least to some degree, to opt out and run things themselves.
III. Unconscionability in Statute
What happens, however, if the legislature finds itself attracted to terms like fairness and unconscionability, so as to direct judges to adjudicate cases on that basis? It is here that my relatively new-found status as an academic working in Australia finds a challenge. Professor Tony Duggan has stated:
Calls for greater altruism in business dealings are beguiling, particularly for Australians who have long been schooled in the ideals of mateship, concern for the underdog, and giving the little bloke a ‘fair go’. When all is said and done, altruism is just a fancy word for mateship.[64]
The Australian Federal Parliament has enacted three explicit unconscionable conduct based provisions, now making up Part IVA of the Trade Practices Act 1974 (Cth).[65] Section 51AB, limited to consumer transactions and the behaviour of a supplier, states that ‘a corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services to a person, engage in conduct that is in all the circumstances unconscionable’. ‘Conduct’ includes making a contract. This seems to open the way for suggesting that where a contract or its terms are unconscionable the section may well be breached. There is no stipulated definition of ‘unconscionable’. There is a non-exhaustive list[66] of factors relevant in determining whether conduct is unconscionable:
• the relative strengths of the bargaining positions of the corporation and the consumer;
• whether, as a result of conduct engaged in by the corporation, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the corporation;
• whether the consumer was able to understand any documents relating to the supply of goods or services;
• whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on behalf of the consumer by the corporation or a person acting on behalf of the corporation in relation to the supply or possible supply of the goods or services; and
• the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from a person other than the corporation.
The Courts have suggested that conduct is unconscionable when it is so against conscience that a court should intervene,[67] and that ‘the s 51AB concept of unconscionability [likely extends] beyond that developed by courts of equity’.[68] That legislation should push judges into such an imponderable situation is, in my view, quite unacceptable of the legislature. Legislatures may well be able to do what they want, but they do not act constitutionally in my view if they merely foist onto judges the application of categories of meaningless reference. Mind you, legislatures might be excused for thinking that the increased use of the term by the judges meant that the latter actually knew what the term meant!
Section 51AC prohibits unconscionable conduct in trade or commerce in connection with the supply to a business consumer or the acquisition from a business supplier of goods or services. The business consumer and supplier cannot be a public listed company, and a transaction is limited in price to $1 million. The provision is accordingly concerned with small businesses. As in s 51AB, a non-exhaustive list of factors is provided as relevant in determining whether conduct is unconscionable. The list includes those items listed in s 51AB, and extends to:
• the extent to which the supplier’s conduct towards the business consumer (or the acquirer’s conduct towards the small business supplier) was consistent with the supplier’s (acquirer’s) conduct in similar transactions;
• the requirements of any applicable industry code;
• non-disclosure of an intended course of conduct that might affect the interests of the business consumer or small business supplier; and
• the extent to which the parties acted in good faith.
Again, the provision is a dangerous nonsense. Professor Duggan reminds us of comments made in 1995 extra-judicially by McHugh J in commenting on a New South Wales statute, the Contracts Review Act 1980 (NSW), that provides for a contract to be re-opened in the event of its being found to be unjust (defined therein to include ‘harsh, unconscionable or oppressive’). McHugh J stated:
Civil litigation has … increased because courts are increasingly directed by legislatures to re-arrange people’s legal rights by reference to vague standards which sound attractive but which are so indefinite that they are extremely difficult to apply to everyday disputes … The difficulties in applying such vague criteria mean that parties to contracts have difficulty in knowing what their rights are. Litigation is forced upon them. When courts have to apply vague standards, consistency of decision-making – which is one of the primary benefits of the rule of law – is difficult to achieve. Moreover, the decision of a court applying such vague criteria often seems arbitrary. Dissatisfaction with the decision-maker in particular cases is often the result. In time, confidence in the judicial system is undermined.[69]
Amen to all that!
Section 51AA is thought of as the general ‘unconscionability’ provision that covers any case not caught by the other provisions. It states that ‘a corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories’. There are two points to be made here. First, unlike the other provisions of Part IVA, a ‘definition’ of unconscionable is effectively provided by the reference to ‘within the meaning of the unwritten law’. Second, however, that does not necessarily help to constrain the reach or operation of the provision if, as we have discovered, the notion of unconscionability in the unwritten law is itself uncertain. It could of course be argued that the legislature has not in passing s 51AA done anything that draws the criticism I levelled to the contents of ss 51AB and AC, since it does no more than legislate the common law, and the developing common law at that (‘from time to time’). However, the very existence of the provision provides, in my view, a potential justification courts can point to in order either to develop, in relatively quick order, a general doctrine of unconscionability in the common law, which must then be applied by statute in all commercial contexts, or at the very least to skew and change the various doctrines of equity expressly towards the prevention of unconscionable conduct, clearly as determined by the court itself.
What is particularly interesting about s 51AA is that the Australian Competition and Consumer Commission, essentially a regulatory body, is permitted to intervene in private disputes and bring cases to the court. This is exactly what occurred in a case that recently reached the High Court of Australia, Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd.[70] The case reveals three tensions. First, the High Court was very aware of the tension between the possible existence of a general wrong of unconscionability, mandated or at least supported by the provision, and the existence of specific doctrines of equity in which unconscionability featured. The relief of the members of the Court that their adjudication required only application of the specific equitable doctrine of unconscionable bargain is easy to read between the lines. The decision did not settle the wider point; rather it was left for another day.
Reference to the second and third tensions requires an outline of the facts. A married couple were tenants of a shop in a suburban shopping centre. Partly in view of their daughter’s ill-health and their desire to reduce the stress they were facing, they were keen to sell their business, but needed to be able to assure the purchasers that their lease in the shopping centre would continue beyond the fast-approaching expiry date. They had no option to renew. Their landlords knew they were anxious to sell the business. The tenants had outstanding against the landlords (as did many of the shopping centre tenants) a claim in respect of disputed charges paid under the lease. The landlords agreed to sign a new lease on condition that the tenants dropped their claim. The tenants agreed to the condition after obtaining legal advice. A new lease was executed and the tenants were able to go ahead with the sale of their business. The ACCC intervened, and sought a declaration that the landlords had, by their insistence on the condition that the tenants drop their claim, engaged in conduct prohibited under s 51AA. At first instance, the ACCC succeeded. French J[71] held that the tenants were under a ‘situational’ rather than ‘constitutional’ disadvantage. The disadvantage was not a characteristic inherent in the tenants, but was the result of the circumstances, legal and commercial, in which they found themselves. Their receipt of legal advice did not disarm the disadvantage. The High Court upheld, by a majority,[72] the decision of the Full Federal Court[73] overturning the trial judge’s decision. The majority said that the tenants’ real problem was that they had no legal entitlement to renew or extend the lease. They were in a commercially weak situation. The only interest they had that they could use to bargain with the landlords so as to achieve their desired position was their outstanding legal claim. They were perfectly able to judge and protect their own interests, and their commercial weakness was not relevant to that capacity.
The second tension faced by the courts in Berbatis was essentially the tension that a focus on unconscionable conduct, even within the specific equitable doctrine of unconscionable bargain, brings. I have discussed this earlier. Is the doctrine about lack of judgmental capacity, as the judgments of the majority indicate, or is it about wrongdoing, as the dissenting judgment of Kirby J very much suggests?[74] The case reveals a third tension, which again I have already discussed: the potential pull of the appeal to unconscionability beyond a doctrine concerned with the process of transacting towards a doctrine concerned with an assessment of the actual outcome of the process. Kirby J, for example, ventured a discussion of the advantages to be gained by the landlords in granting a renewal of the lease, and suggested that the lease would have likely been granted without the condition.[75] This implies that the deal actually reached should be re-written because the interests of the parties – as assessed by the judge – meant that the price paid by the tenants was too high because the landlords would have settled for less.
The conclusion must be that statutes appealing to unconscionable conduct exacerbate the difficulties created by the use of the terminology in the common law. Without a clearly stipulated meaning, the term is meaningless because it means anything. That is unworkable as a legal standard for recognising the existence of rights and obligations, and it is unacceptable as a standard for legal adjudication. This is all doubly true in commercial contexts, where predictability is crucial to the maintenance of commercial practice.
[*] Sir Gerard Brennan Professor and Dean of Law, TC Beirne School of Law, The University of Queensland. This paper was first delivered as a lecture at Queen Mary in London in October 2004, as part of a series of lectures honouring Professor Sir Roy Goode. It will appear along with the others in the series in J Lowry and L Mistelis (eds), Dimensions of Commercial Law: Essays in Honour of Professor Sir Roy Goode (2005, forthcoming). I am most grateful to the editors for their permission to publish the paper in this journal. I am also grateful to Annaliese Jackson for her assistance in the research for this lecture. I am also particularly thankful to Professors Ross Grantham and David McLauchlan, who both read this paper in draft and commented most usefully on points within it. They bear no responsibility for its final form or content.
[1] R Goode, Commercial Law in the Next Millennium (1998) 8-9.
[2] R Goode, Commercial Law (3rd ed, 2004) 1203.
[3] Royal Brunei Airlines Sdn Bhd v Tan [1995] UKPC 4; [1995] 2 AC 378, 392 (emphasis in original).
[4] On my understanding of interpretive theory, see A Beever and C Rickett, ‘Interpretive Legal Theory and the Academic Lawyer’ (2005) 68 Modern Law Review 319.
[5] The literature on the subject is considerable. A selection includes: M Chen-Wishart, Unconscionable Bargains (1989); M Cope, Duress, Undue Influence and Unconscientious Bargains (1985); J Cartwright, Unequal Bargaining: A Study of the Vitiating Factors in the Formation of Contracts (1991); I Hardingham, ‘Unconscionable Dealing’ in P Finn (ed), Essays in Equity (1985) 1; S Waddams, ‘Unconscionability in Contracts’ (1976) 39 Modern Law Review 369; H Beale, ‘Unfair Contracts in Britain and Europe’ (1989) 42 Current Legal Problems 197; M Trebilcock, ‘The Doctrine of Inequality of Bargaining Power: Post-Benthamite Economics in the House of Lords’ (1976) 26 University of Toronto Law Journal 359; P Finn, ‘Unconscionable Conduct’ (1994) 8 Journal of Contract Law 37.
[6] These were also referred to as ‘catching bargains’. Prominent among the authorities are Earl of Chesterfield v Janssen [1750] EngR 119; (1750) 2 Ves Sen 125 and Earl of Aylesford v Morris (1873) 8 Ch D 484. The early English authorities are discussed by R Clark, ‘The Unconscionability Doctrine Viewed from an Irish Perspective’ (1980) 31 Northern Ireland Legal Quarterly 114. See also K Fletcher, ‘Review of Unconscionable Transactions’ [1972] UQLawJl 3; (1973) 8 University of Queensland Law Journal 45, and L Sheridan, Fraud in Equity: A Study in English and Irish Law (1957).
[7] There is a clear link between this jurisdiction and the usury laws: Cope, above n 5, 119.
[8] R Meagher, D Heydon and M Leeming, Meagher, Gummow and Lehane’s Equity – Doctrines and Remedies (4th ed, 2002) 530-531. Such was equity’s concern that by the mid-nineteenth century inadequacy of consideration alone was a sufficient ground to have the transaction set aside.
[9] Originally, by the Sales of Reversions Act 1867 (UK).
[10] There is some debate as to both when the doctrine was unified and which was the earlier source: Fletcher, above n 6. Cases such as Biggs v Hoddinott [1898] UKLawRpCh 102; [1898] 2 Ch 307 and Krelinger v New Patagonian Meat Co [1914] AC 28, which concerned collateral advantages stipulated by mortgagees, have also contributed to the modern doctrine.
[11] As to the origins of the modern doctrine of unconscionable bargain, see: Richardson v Harris [1930] NZLR 890 and Moffat v Moffat [1984] 1 NZLR 600, 604-605, where the New Zealand Court of Appeal concluded that the
‘Court of Equity extended its aid to all cases in which the parties to a contract had not met upon equal terms. The principle has long been extended beyond the expectant heir situation...’.
[12] [1888] UKLawRpCh 178; (1888) 40 Ch D 312, 322.
[13] In Cresswell v Potter [1978] 1 WLR 255, 257, Megarry J attempted to update the doctrine by replacing poor and ignorant with ‘less highly educated’ and ‘lower income group’.
[14] [1992] HCA 61; (1992) 175 CLR 621, 637.
[15] As is clear from the Privy Council's decision in O'Connor v Hart [1985] UKPC 17; [1985] 1 NZLR 159.
[16] P Birks, ‘Undue Influence as Wrongful Exploitation’ (2004) 120 Law Quarterly Review 34, 34-37, suggests the idea of an ‘aggravated’ undue influence — that impaired capacity is enough to set aside, but that there might also be situations where there are aggravating factors that turn the circumstances into a legal wrong. A similar dichotomy may be relevant in the case of unconscionable bargains law, but the point is not pursued here.
[17] Unconscionability, in particular, tends to take on the colour of the nearest nominate rule. Thus, unconscionability tends to operate as a supplement to contract and tort, depending on whether the complaint is in substance that the defendant is resiling from some undertaking or is acting wrongfully in standing on his or her legal rights: Finn, above n 5. It is clear from the modern paradigmatic formulations of undue influence and unconscionable bargain that the doctrines now embrace a concern for both the defendant’s wrongdoing and the plaintiff’s lack of judgmental capacity. In respect of the doctrine of unconscionable bargains, this insight also informs Finn’s view: ibid.
[18] [1992] HCA 61; (1992) 175 CLR 621, 626.
[19] [1993] UKPC 17; (1993) 69 P & CR 298, 303. See also Multiservice Bookbinding Ltd v Marden [1979] Ch 84.
[20] Both arise from Lord Hardwicke LC's classification in Earl of Chesterfield v Janssen [1750] EngR 119; (1750) 2 Ves Sen 125. Birks and Chin, while accepting that undue influence is concerned with a defect in the plaintiff’s judgmental capacity, have suggested that unconscionability is concerned with wrongdoing: P Birks and N Chin, ‘On the Nature of Undue Influence’ in J Beatson and D Friedmann (eds), Good Faith and Fault in Contract Law (1995) 57. Cf N Bamforth, ‘Unconscionability as a Vitiating Factor’ [1995] Lloyd’s Maritime and Commercial Law Quarterly 538) and D Capper, ‘Undue Influence and Unconscionability: A Rationalisation’ (1998) 114 Law Quarterly Review 479, 493ff. To an extent, the attitude of the English courts towards unconscionability points in the wrongdoing direction (see for example Multiservice Bookbinding Ltd v Marden [1979] Ch 84). However, such a view is difficult to maintain, without a dichotomous approach (see n 16 above).
[21] [1985] UKPC 17; [1985] 1 NZLR 159.
[22] Fry v Lane [1888] UKLawRpCh 178; (1888) 40 Ch D 312, 322. See also Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621, 537 (Deane J).
[23] In O'Connor v Hart [1985] UKPC 17; [1985] 1 NZLR 159, 171, Lord Brightman accepted that victimisation can ‘consist either of the active extortion of a benefit or the passive acceptance of a benefit in unconscionable circumstances’. Once it is accepted that ‘victimisation’ as a requirement may be satisfied by the mere passive acceptance of a benefit, the only meaningful sense in which the defendant can be said to have taken advantage of the plaintiff is by accepting the benefit of the transaction while knowing (actually or constructively) at the same time that the plaintiff lacked sufficient judgmental capacity to make a rational decision. See also Bowkett v Action Finance Ltd [1992] 1 NZLR 449.
[24] Brusewitz v Brown [1923] NZGazLawRp 219; [1923] NZLR 1106, 1109; O'Connor v Hart [1985] UKPC 17; [1985] 1 NZLR 159, 171; Commercial Bank of Australia Ltd v Amadio (1983) 115 CLR 447, 462 (Mason J); Clark v Malpas (1862) 4 De GF & J 399.
[25] Nichols v Jessup [1986] NZCA 84; [1986] 1 NZLR 226, 235 (Somers J).
[26] Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447, 462.
[27] In Borg Warner Acceptance Corporation (Australia) Ltd v Diprose [1988] ANZ Conv Rep 59, Cohen J identified three classes of disability: (i) where the plaintiff cannot exercise judgment at all; (ii) where the plaintiff needs assistance to exercise judgment; (iii) where care is needed by the defendant to ensure the plaintiff is able to exercise judgment. Chen-Wishart, above n 5, 35, identifies three categories of disadvantage: cognitive weakness, social inferiority and financial need.
[28] Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362; Moffat v Moffat [1984] 1 NZLR 600.
[29] Scott v Wise [1986] 2 NZLR 485, 493.
[30] Ibid 492-493 (Somers J).
[31] Molton v Camroux [1848] EngR 611; (1848) 2 Ex 487, 489, citing Beverley's Case (1603) 4 Co Rep 123.
[32] [1845] EngR 387; (1845) 13 M & W 623, 625.
[33] [1848] EngR 611; (1848) 2 Ex 487.
[34] Ibid 501.
[35] Imperial Loan Co Ltd v Stone [1891] UKLawRpKQB 215; [1892] 1 QB 599 (CA); O’Connor v Hart [1985] UKPC 17; [1985] 1 NZLR 159.
[36] [1888] UKLawRpCh 178; (1888) 40 Ch D 312.
[37] Fry v Lane [1983] HCA 14; (1983) 151 CLR 447, 475.
[38] [1992] HCA 61; (1992) 175 CLR 621, 637.
[39] Unconscionable bargain may indeed better be viewed as part of the law of contract, as a doctrine governing contractual capacity, rather than as part of the law of unjust enrichment.
[40] This term is used by A Duggan, ‘Unconscientious Dealing’ in P Parkinson (ed), The Principles of Equity (2nd ed, 2003) ch 5.
[41] In Woodson (Sales) Pty v Woodson (Australia) Pty Ltd, unreported, Supreme Court of New South Wales, 12 July 1996, Santow J appeared to suggest that unconscionability was a cause of action in itself. In its turn this was perhaps a response to the risk that advocates face from being sued by clients – they include everything to cover themselves.
[42] This seems symptomatic of the general shift in the law and in society to rights-based notions, as in the regular calls for Bills of Rights, and the recognition of human rights in private law adjudication: see, for example, D Friedmann and D Barak-Erez (eds), Human Rights in Private Law (2001).
[43] I draw this from my personal experience.
[44] See the literature cited in n 6 above.
[45] Finn, above n 5, 38; Bamforth, above n 20.
[46] For example, see the comments of Deane and Dawson JJ in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623, 654.
[47] Undue influence may also fall into this category. In Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447, 461, Mason J treated undue influence as one species of unconscionability. See also Credit Lyonnais Bank Nederland NV v Burch [1996] EWCA Civ 1292; [1997] 1 All ER 144 (CA). This may also explain the extensive references to unconscionability in Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395. Although the High Court of Australia regarded the basis of the claim as being in undue influence, the wives’ special equity was a manifestation of unconscionability.
[48] Rather like negligence liability appears to have done.
[49] See, for example, Commercial Bank of Australia v Amadio (1983) 15 CLR 447; M Conaglen, ‘Duress, Undue Influence, and Unconscionable Bargains – The Theoretical Mesh’ (1999) 18 NZULR 509.
[50] See R Bigwood, Exploitative Contracts (2003).
[51] [1998] HCA 66; (1998) 194 CLR 457.
[52] Ibid 492-493.
[53] Ibid 493.
[54] Ibid.
[55] See P Parkinson, ‘The Conscience of Equity’ in P Parkinson (ed), The Principles of Equity (2nd ed, 2003) 47, who suggests protection of the vulnerable and protection of people’s reasonable expectations (see Finn, above n 5.
[56] These doctrines are not, in my view, concerned fundamentally or exclusively with the prevention of exploitation, although of course this is contested: see R Grantham and C Rickett, Enrichment and Restitution in New Zealand (2000) chs 7-9.
[57] R Meagher and A Maroya, ‘Crypto-Fiduciary Duties’ [2003] UNSWLawJl 30; (2003) 26 University of New South Wales Law Journal 348, suggest that it is here where exploitation takes place and is stifled.
[58] Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516.
[59] Parkinson, above n 55, 47.
[60] ‘Dishonesty and Unconscionable Conduct in Commercial Life – Some Reflections on Accessory Liability and Knowing Receipt’, (The John Lehane Memorial Lecture, Sydney, 18 August 2004).
[61] [1990] Ch 265, 293.
[62] BCCI (Overseas) Ltd v Akindele [2001] Ch 437.
[63] It would also be to deny the very reason we are prepared to call her ‘a judge’. See further Beever and Rickett, above n 4, 331-333.
[64] ‘The Trumping of Mateship: Unconscionability in the High Court of Australia’ (2003) 39 Canadian Business Law Journal 275, 283.
[65] Other legislation along similar lines in Australia includes the Contracts Review Act 1980 (NSW).
[66] Dai v Telstra Corporation Ltd [2000] FCA 379; (2000) 171 ALR 348.
[67] Zoneff v Elcom Credit Union Ltd (1990) 94 ALR 445, 463; aff’d (1990) ATPR 41-058.
[68] Dai v Telstra Corporation Ltd [2000] FCA 379; (2000) 171 ALR 348, 354 (Einfeld J).
[69] ‘The Growth of Legislation and Litigation’ (1995) 69 Australian Law Journal 37, 43.
[70] [2003] HCA 18; (2003) 214 CLR 51.
[71] [2000] FCA 1376; (2000) ATPR 41-778.
[72] Gleeson CJ, Gummow, Hayne and Callinan JJ (Kirby J dissenting).
[73] [2001] FCA 757; (2001) 185 ALR 555.
[74] See further R Bigwood, ‘Case Note: Curbing Unconscionability: Berbatis in the High Court of Australia’ (2004) 28 Melbourne University Law Review 303. For a different view about the rationale for and application of the unconscionability standard, see A Duggan, ‘The Trumping of Mateship: Unconscionability in the High Court of Australia’ (2003) 39 Canadian Business Law Journal 275, and ‘The Profits of Conscience: Commercial Equity in the High Court of Australia’ (2003) 24 Australian Bar Review 150 (reprinted in P Cane (ed), Centenary Essays for the High Court of Australia (2004) ch 15).
[75] [2003] HCA 18; (2003) 214 CLR 51, 88 (at paras 88-89).