I've written a couple of things on here about unconscionable conduct before. One of these concerned ss 12CA and 12CB ASIC Act 2001 (Cth). The equivalent provisions under the Australian Consumer Law are ss 20 and 21.
These sections aren't difficult to understand. Section 20 requires that a person be under a 'special disability' as defined in Commercial Bank of Australia Ltd v Amadio [1983] HCA 14. In short, that means a person was under some kind of legally recognised disability that prevented them from forming the requisite intention to enter into a transaction.
Section 21, on the other hand, is much wider. It gives the court a broad discretion to find almost any conduct unconscionable that occurs in trade or commerce in connection with the supply or acquisition of goods or services. It does not require a special disability. Indeed it has been applied by the courts concerning the conduct of one company against another: ACCC v Allphones Retail Pty Ltd [2009] FCA 17; ACCC v Dukemaster [2009] FCA 682; ACCC v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405.
The disctinciton between s 20 and s 21 is clear, and this is why I found recent statements by Gerard Brody, CEO of the Consumer Action Law Centre in Melbourne, problematic. In a recent broadcast of ABC Radio National's 'Law Report' he spoke about how ss 20 and 21 ACL function. That the CEO of such an organisation was so wrong about how the law works is troubling.
Gerard Brody spoke of how unconscionable conduct operates under the ACL, but he made no disctinction between s 20 and s 21. He spoke firstly of Amadio, which means he is referring to s
20 ACL: see ACCC v Berbatis. He then however, refered to ACCC v Lux. This was decided under s 21, which, as noted above,
has a completely different test than Amadio and s 20. Yet he conflated both Amdio and ACCC v Lux as though they concerned the same law. They clearly don't.
Section 21
unconscionable conduct is very board and does not have any of the
limitations which Gerard Brody attributes to unconscionable conduct as applied
under s 20. In fact both s 20 and s 21 state that unconscionable conduct
falling under one section doesn't apply to the other, i.e. s 21 isn't
limited by the more onerous s 20. That is why s 21 has
been applied to conduct between companies (ACCC v Coles; ACCC v
Dukemaster; ACCC v Allphones).
The reason Gerard Brody embarked on this erroneous explanation of the law was to advocate for refrom in line with the EU. The thing about any law reform though, is you first need to get your facts straight about what the current law is. Unfortunately, that wasn't the case here.
Update 16/5/16
I posted a comment on the RN Law Report website for the story noted above. Apparently the moderators did not like it, so it did not get published. For shame, Aunty. Likewise the Consumer Action Law Centre, did not like it when I told them on Twitter that they fail to grasp the basics of the law. Nobody loves a critic.
