INTHEBLACK July 2022 - Magazine - Page 36
F E AT U R E
// U N C O N S C I O N A B L E C O N D U C T
UNDERSTANDING
UNCONSCIONABLE
CONDUCT
STORY GARY ANDERS
When is the conduct of a business toward
one or more of its clients deemed to be
unconscionable? This is a question that
has needed to be addressed repeatedly
over time as cases involving alleged
misconduct by businesses have been
brought before courts across Australia.
36 ITB July 2022
U
nconscionable conduct is any conduct that is
contrary to what the law would deem to be “in
good conscience” and would prompt a course of
action calling for a remedy.
A March 2021 judgment by the Full Court of the
Federal Court on a case brought by the Australian
Competition and Consumer Commission (ACCC)
against Quantum Housing Group provided some
important clarification around what constitutes
unconscionable conduct by a business.
The court found in favour of the ACCC, ruling that
Quantum had made false or misleading representations
and engaged in systemic unconscionable conduct.
As well as pressuring investors in the National Rental
Affordability Scheme to terminate agreements with
existing property managers and engage a property
manager approved by Quantum, the company failed to
tell investors it had commercial links with the managers
it recommended.
PROOF OF CONDUCT
Importantly, the Federal Court ruled that for conduct
to be unconscionable under Australian laws, it is not
necessary to prove the business engaging in the conduct
has exploited a particular disadvantage or vulnerability of
the consumers or small businesses that have been affected.
“This is an extremely important decision for all
Australian consumers and businesses,” says ACCC
chair Rod Sims.
“The Full Court has confirmed that the correct
approach to assessing statutory unconscionability
is to focus on the conduct and assess whether it is
a sufficient departure from the norms of acceptable
commercial behaviour as to be against conscience or to
offend conscience.