Case: Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Limited [2003] HCA 18 ; (2003) 214 CLR 51
Outcome: followed
In Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Limited [2003] HCA 18 ; (2003) 214 CLR 51 the High Court considered the incorporation into s 51AA of the Trade Practices Act 1974 (Cth) the concept of unconscionability in the unwritten law. While s 51AC is a separate and freestanding statutory provision, the word 'unconscionable' is undefined in both s 51AA and s 51AC. The latter section identifies a range of factors to which the Court may have regard in considering whether in all the circumstances the relevant conduct is unconscionable. The factors identified in s 51AC(3) are, of course, not exhaustive, but they have similarities to the features of unconscionability or unconscientious behaviour identified in decisions of Blomley v Ryan [1954] HCA 79 ; (1956) 99 CLR 362 and Commercial Bank of Australia Ltd v Amadio [1983] HCA 14 ; (1983) 151 CLR 447. In ACCC v CG Berbatis Holdings Pty Limited [2003] HCA 18 ; (2003) 214 CLR 51 at 64 [11] Gleeson CJ observed that a person was not in a position of relevant disadvantage simply because of inequality of bargaining powers. He said that many, perhaps even most, contracts are made between parties of unequal bargaining power, and good conscience does not require parties to contractual negotiations to forfeit their advantages, or neglect their own interests. And the Chief Justice continued that unconscientious exploitation or another's inability, or diminished ability, to conserve his or her own interests is not to be confused with taking advantage of a superior bargaining position for the purposes of s 51AA (214 CLR at 64 [14]). 145 However, a difference in bargaining positions is a factor which is one of the relevant circumstances that can be taken into account under s 51AC(3)(a). In ACCC v CG Berbatis Holdings Pty Limited [2003] HCA 18 ; (2003) 214 CLR 51 at 65 [15] - [16] , Gleeson CJ pointed out that the critical disadvantage from which the lessees in that case suffered was that they had no legal entitlement to a renewal or extension of the lease; that depended upon the lessors' willingness to grant such rights. In that context there was a compulsion to deal with the lessors which created a distinct disadvantage on the lessees, but not such as to attract the unwritten law of unconscionability to their position. As Gleeson CJ said: 'It is an everyday occurrence in negotiations for settlement of legal disputes that, as a term of settlement, one party will be required to abandon claims which may or may not be related to the principal matter in issue.' He said that parties to commercial negotiations frequently use their bargaining power to 'extract' concessions from other parties but that was the stuff of ordinary commercial dealings (see too per Gummow and Hayne JJ at 214 CLR at 76-77 [55]-[57] and Callinan J at 112-115 [172]-[185]). 146 Monster gave no explanation for its failure to accept the offer of new IVR licences in the period following 28 October 2005. Nor did it identify any conduct of APRA and AMCOS as being unconscionable while Monster did not reply to the 28 October 2005 letter. Monster saw its own interests were served by it not pursuing that matter. That only changed on 31 January 2006 when APRA and AMCOS made a threat to commence proceedings if Monster did not pay what they said was due by 8 February, the day after the letter of 7 February 2006 was sent. 147 I do not see any element of unconscientiousness or moral obloquy on the part of APRA and AMCOS in this situation. Monster was advised by solicitors. Mr Chong was well able to make commercial decisions in what he saw as being Monster's and his own best interests. For Monster's and his own reasons, about which he gave no evidence, he chose not to take up the offer of new IVR licences at a time when it was obvious APRA and AMCOS were prepared to grant them in late October 2005. And, because Monster had no licences, and was not continuing to trade without them, APRA and AMCOS were entitled to act as they did in seeking to enforce their rights to prevent infringement of copyrights in which they were interested.