‘The Amadio Principle Four Decades On: Still Fit for Apparent Purpose?’

It has been over 40 years since the High Court of Australia’s landmark decision in Commercial Bank of Australia Ltd v Amadio. In this article we consider whether the principle applied by the majority judges in Amadio is still fit for its apparent purpose — ‘apparent’ because even the Amadio judges did not spell out the normative foundations of the equitable jurisdiction to relieve against an ‘unconscionable dealing’. Their Honours referred instead to a jural precept against unfair or unconscientious advantage-taking of an inter partes opportunity, for transactional gain, resulting from one transacting party’s sufficient awareness of the other party’s autonomy-disabling ‘special disadvantage’ relative to him before the impugned transaction was concluded. Subsequent benches of the High Court have taken this to signify that the equitable doctrine of unconscionable dealing disciplines ‘exploitation’, ‘victimisation’ or ‘predation’ in transaction formation (or enforcement or retention — if these, as we doubt, represent materially different concerns). But there is nothing in Amadio that necessitates the jurisdiction being so narrowly circumscribed; and, we argue, this modern construal of the Amadio principle is unduly restrictive of the ameliorative capability of the principle in its original form. We argue that it is time for a big-picture reset of the equitable unconscionable dealing jurisdiction, which will require Australia’s most senior courts to engage with the theoretical core of that jurisdiction in a way they have hitherto failed to do, even before Amadio was decided. We additionally suggest that, regardless of the type of transaction sought to be vitiated in the name of ‘unconscionable dealing’, the jurisdiction should extend to careless, as well as deliberate, failures by the stronger party to take whatever steps are necessary and reasonable to avoid ‘taking unfair advantage of’ another who is sufficiently known, by the stronger party, to be specially disadvantaged relative to him.