Equity Doctrines and Remedies System

Discuss about the Equity Doctrines and Remedies System.

Issue: the issue of that we are decided in this case was if the mortgage contract relating between George and the finance company was affected by unconscionability.

Rule: In order to decide the issue, the rules related with unconscionability have to be discussed. The principle of unconscionable conduct has been mainly designed with a view to uphold fair play and equity (Meagher, Heydon and Leeming, 2002). According to this principle, a particular behavior can be termed as unconscionable if it attracts censure and justifies the grant of relief by the court to the parties that have suffered as a result of such conduct (Duggan, 2003). The doctrine of unconscionability was relied upon by the High Court in Blomley v Ryan. Similarly, the doctrine was further strengthened after the decision given in commercial Bank of Australia Ltd. v Amadio (1983).

In Amadio, an elderly couple who had migrated from Italy, Mr. and Mrs. Amadio stood as the guarantor's for the loan taken by their son from the bank. The manager of the bank was aware of the fact that the business of the son was not doing well and probably their son had misrepresented the facts to his parents in order to make his parents stand as guarantors for the loan. Later on the business of their son failed and the bank tried to enforce the mortgage against the elderly couple. The court held that the bank manager was aware of the special disability from which the elderly couple was suffering. Still no steps were taken by the bank to ensure that the elderly couple was aware of the nature of the transaction. Hence it can be said that it was unconscionable for the bank to take advantage of this opportunity.

The result was the emergence of a new concept that was later on incorporated in the Australian legislation also. After the decision given in Amadio case, a number of developments have taken place which includes the Australian Consumer Law and also the ASIC Act, 2001.

Application: in the present case also, George was suffering from a special disability. The reason is that George is an elderly person, suffering from dementia and he completely relied on his daughter for making decisions. Moreover, the employee of the finance company told George that there was no need to consult a solicitor before entering the contract. The result was that the finance company failed to make sure that George received independent advised before entering into the mortgage contract.

Application: Under these circumstances, and in view of the decision given in Amadio case, it can be said that the present case, the finance company was aware of the fact that George was an elderly person and probably did not understand the nature of the transaction. Moreover, evidence is present regarding the fact that the finance company had taken an advantage of an opportunity, which could be termed as unconscionable. The reason was that the finance company was aware of the fact that George was something from a special disability. Under these circumstances, the onus falls on the finance company to establish that the transaction can be termed as just and reasonable. This conclusion can be made primarily on the basis of the fact that George had not received independent legal advice before entering the contract. As a result, it can be said that the conduct of Easy Finance was unconscionable in this case.

Conclusion:

It can be concluded that the contract between George and Easy Finance can be avoided by George on grounds of unconscionability.

References

Duggan, A. 2003, ‘Unconscientious Dealing’ in P Parkinson (ed), The Principles of Equity 2^nd ed.

Meagher, R Heydon D and Leeming, M (2002) Meagher, Gummow and Lehane’s Equity – Doctrines and Remedies (4th ed.) 530

Blomley v Ryan (1954) 99 CLR 362

Commercial Bank of Australia Ltd v Amadio [1983] HCA 14