Unconscientious Retention of Benefit: Can Unconscionability ‘Supervene’ in Unconscionable Dealing Cases?

Abstract

Dicta in recent judgments of the New South Wales Court of Appeal concerning the equitable doctrine of unconscionable dealing suggest that, in assessing whether unconscientious advantage had been taken of a party entering into a voluntary or consensual transaction while operating under an autonomy-debilitating special disadvantage, the court is not limited to considering circumstances that were known to the superior party at the moment of transaction formation at law. Rather, the court may consider after-acquired knowledge or post-formation conduct in making an overall assessment of unconscionability. This is largely, but not exclusively, on the basis that equity recognises the ‘unconscientious retention’ of benefits, as well as their unconscionable procurement or acceptance. In this article, we challenge the proposition that unconscionability can ‘supervene’ in this way in unconscionable dealing cases, such that ‘unconscientious retention’ can be seen as a standalone invalidating cause or reason under the modern-day Amadio principle. We argue that neither precedent nor principle and legal policy support such a proposition, and judges’ attempts to analogise to other doctrines or principles to justify resort to ex-post evidence in the present context are inapt and, hence, unpersuasive. Show more