Download Judge-Made Law: Unconscionable Conduct and Precedent and more Lecture notes Law in PDF only on Docsity! LLB1100 case analysis notes JUDGE-MADE LAW Development of precedent: Clark, Blomley, Amadio, Louth + Donoghue Clark v Malpas [1862] - Old, sick man who was feeble minded and illiterate (Gallimore) and in a dying state. sold 3 cottages to the purchaser - The properties were sold at a significant undervalue. Purchaser guaranteed weekly payments, however he knew Gallimore was dying. - Inadequate consideration: did not obtain professional legal assistance/advise (under precipitating circumstances, pressured into the deed). - ISSUE: is it fair to retain benefit in these circumstances? - RULE: ‘where the sale of property is for a very inadequate consideration and the circumstances establish that the vendor requires the protection of the law, the burden is on the purchaser to prove that the transaction was entered into carefully, deliberately and with full knowledge.’ Blomley v Ryan [1956] - This case demonstrates how applying the existing rule to a new set of facts = rule develops - Hasty sale of property by an old man with impaired faculties who was a habitual drunk, at a significant undervalue. - Considered Clark v Malpas (not applied as it was a different jurisdiction). - Fullagar J navigated rules developed from previous cases which explored intoxication to avoid finding that mere drunkenness is adequate grounds for equitable relief. In conjunction with Clark v Malpas, he considered that unconscientiously using knowledge of a party’s intoxicated state may warrant equitable intervention. - ISSUE: is drunkenness a special circumstance? - RULE: Where circumstances, including intoxication, place one party at a serious disadvantage in relation to another and the stronger party takes unfair or unconscientious advantage of the weaker party’s position, equity may intervene to set aside the contract. CBA v Amadio (1983) - Amadio’s signed mortgage of their house for CBA to secure loan for their son’s business (Vincenzo)] - Son gave false information as to the extent and duration of the guarantee - The benefit received by their son’s company meant that inadequacy of consideration was not a factor in deciding the question of unconscionability. - Son’s company defaulted payments, CBA seized house. - Disability: Not necessary for an inadequacy of consideration, a lack of understanding of the terms was enough (lack of understanding arising through illiteracy, poor English, misinformed) - Sufficiently evident: Had not been properly informed, it was apparent they could not read and spoke bad English. Bank manager saw that they did not read the document. Bank manager was aware that: Amadio’s had mistaken the extent of guarantee and had no basis to assume that Amadio’s had received adequate advice. - Made no effort to inquire as to whether the transaction had been properly explained (wilful ignorance = Deane J deemed it to be same as knowledge in this instance). - FANAL RULE DEVELOPED FROM THESE CASES: Where circumstances place one party at a serious disadvantage in relation to another and the disadvantage is sufficiently evident to the stronger party, the stronger party has the onus of proving that the transaction was fair.
