Australia and New Zealand Banking Group Ltd v Collier

Australia and New Zealand Banking Group Ltd (ANZ) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the validity of a guarantee provided by Mr Collier to ANZ in respect of a company's indebtedness.

The primary legal issue before the Court of Appeal was whether Mr Collier was entitled to have the guarantee set aside on the grounds of unconscionable conduct, specifically in relation to the circumstances under which the guarantee was obtained. This involved considering whether ANZ had taken unfair advantage of Mr Collier's special disadvantage, and whether the transaction was demonstrably unfair.

The Court of Appeal found that the primary judge had erred in concluding that ANZ had engaged in unconscionable conduct. The Court held that while Mr Collier may have been in a position of some vulnerability, there was no evidence that ANZ was aware of this vulnerability or that it had acted unconscionably in procuring the guarantee. The principles of unconscionable conduct require more than mere inequality of bargaining power; they necessitate proof of exploitation of a known disadvantage. The Court noted that Mr Collier had received independent legal advice, which weighed against a finding of unconscionability.

The appeal was allowed, and the orders of the Supreme Court were set aside.