Crowe v Commonwealth Bank of Australia

[2005] NSWCA 41

NSW Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Unconscionability
3. › Special disadvantage
4. › Improvident transactions
5. › Default on mortgage
6. › Whether transaction should be set aside on ground of unconscionable conduct
7. › Whether mortgagor's lack of independent financial advice placed her in position of special disadvantage
1. Contract
2. › Unjust contracts
3. › Contracts Review Act 1980 (NSW)
4. › Whether unfair conduct in means employed to make contract
5. › Whether material inequality of bargaining power between parties
1. Equity
2. › Unconscionable conduct
3. › Surety transactions
4. › Mortgage over family home to secure business loan
5. › Whether bank obliged to ensure mortgagor received independent financial advice

Quick Take

A mortgagor who understands the general nature and effect of a mortgage, has received independent legal advice, and makes a conscious decision to accept the risk of default is not in a position of 'special disadvantage' for the purposes of the Amadio unconscionability doctrine, even where bank officers internally considered the loan should not have been approved. The bank is not obliged to advise the mortgagor to obtain independent financial advice where the mortgagor has already received independent legal advice and understands the risks.