Agricultural & Rural Finance Pty Limited v Gardiner & Anor

Agricultural & Rural Finance Pty Limited (ARF) appealed to the High Court of Australia against a decision of the Full Federal Court of Australia. The dispute concerned the enforceability of certain loan agreements and securities entered into between ARF and the respondents, Mr. and Mrs. Gardiner. The Gardiner's sought to set aside these agreements and securities, alleging they were unconscionable and therefore void.

The High Court was required to determine whether the loan agreements and securities were unconscionable within the meaning of section 9(1) of the Contracts Review Act 1980 (NSW). This involved considering whether ARF had engaged in unconscionable conduct in connection with the supply of financial services to the Gardiner's, and whether the terms of the agreements and securities were unjust. The court also had to consider the application of the doctrine of unconscionable dealing at general law.

The High Court found that the Full Federal Court had erred in its assessment of unconscionability. Their Honours applied the principles established in *Amadio* and *Walton Stores*, focusing on the elements of special disadvantage, knowledge of that disadvantage, and unconscionable exploitation. The court held that while the Gardiner's may have been in a position of disadvantage, ARF did not have the requisite knowledge of that disadvantage, nor did it exploit it in a manner that would render the contracts unconscionable at general law. Furthermore, the court found that the conduct of ARF was not unconscionable under the Contracts Review Act, as the Gardiner's had received independent legal advice and the terms, while perhaps onerous, were not so unjust as to warrant intervention.

The High Court allowed the appeal, setting aside the orders of the Full Federal Court and remitting the matter to the Federal Court for further consideration of other issues not determined by the High Court.