Case: Commercial Bank of Australia v Amadio [1983] HCA 14 ; (1983) 151 CLR 447
Outcome: cited
In their joint judgment Gummow and Hayne JJ quoted a passage from the judgment of Mason J in Commercial Bank of Australia v Amadio [1983] HCA 14 ; (1983) 151 CLR 447 at 462 in which his Honour referred to the underlying general principle applicable where one party takes unfair or unconscientious advantage of an opportunity created by the special disadvantage of another. Mason J said: I qualify the word "disadvantage" by the adjective "special" in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasise that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party. Gummow and Hayne JJ pointed out that Mason J had gone on to emphasise the need for the plaintiff seeking relief to establish that the defendant took unconscientious advantage of the plaintiff's disabling position or circumstance. Their Honours said (at [55]): It will be apparent that the special disadvantage of which Mason J spoke in this passage was one seriously affecting the ability of the innocent party to make a judgment as to that party's own best interests. 515 Section 51AC has a wider field of operation than s 51AA. The unconscionable conduct which it prohibits is not limited in its range to "unconscionable conduct within the meaning of the unwritten law" as is that prohibited by s 51AA. In this case, however, the difference in the fields of operation of the two provisions is immaterial. The applicants rest their causes of action in unconscionable conduct upon the proposition that they were at a special disadvantage and that the respondents took unfair advantage of that special disadvantage. 516 The elements of the statutory cause of action for unconscionable conduct asserted by the applicants appeared from [16] and following of the statement of claim. Fubilan and MRSM pleaded OTML's requirement that they appoint an internationally reputable firm as catering manager before OTML would consider any proposal from Fubilan and MRSM in relation to its catering contract. It was designated in the statement of claim as the "International Management Requirement". It was said at [17]: As a result of the International Management Requirement the applicants were unable, or had a diminished ability, to protect and conserve their own interests. 517 Fubilan and MRSM alleged that, as a result of the International Management Requirement imposed by OTML, they were at a special disadvantage as against the respondents. The respondents were or ought to have been aware of that special disadvantage. Through their agent Mr Hayes they agreed to prepare a proposal for the OTML Contract on behalf of the applicants and to act as their catering contract manager if the proposal were successful. Reference was then made to elements of the Tender Proposal. 518 The applicants pleaded the lodgment of the Poons' tender which did not include a joint venture or similar arrangement with any individual or group from the Preferred Area as defined in the OTML tender document. The effect of the Poons' tender proposal, if successful, was that Poons would not have been required to share any profits or benefits from the OTML Contract.