Commercial Banking of Australia v Amadio [1983] HCA 14
Brief statement of material facts
Mr and Mrs. Amadio (respondents) guaranteed their son to take a loan at the Commercial Bank of Australia. As part of the normal bank procedures, both parties executed documents that were used in providing the bank with a mortgage relating to a building that Mr and Mrs Amadio owned. The business that their son started using the loan obtained failed, prompting the bank to seek the enforcement of the guarantee. Prior to that the bank manager called Mr. Virgo was in regular communication with Mr Amadio’s son and had a better understanding about the reality of the business. He knew that it was highly likely that the son might have misrepresented the facts with the aim of obtaining his parents to guarantee him the loan from the bank. The Amadios defended themselves by asserting that the unenforceability of the guarantee as they termed it as being unconscionable. The court held them at a “special advantage” based on the equitable doctrine of law. Since unconscionable conduct does not have definition at legislative level, it is mostly up to the presiding member of the judiciary to make a determination regarding the efficiency of compliance on a statutory basis.
(I.C. RS 8461)