Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2)

The Australian Competition and Consumer Commission brought an action against C G Berbatis Holdings Pty Ltd, asserting breaches of Section 51AA of the Trade Practices Act 1974. This section prohibits corporations from engaging in conduct that is considered unconscionable within the meaning of the unwritten law in trade or commerce. The court was tasked with determining the validity and scope of Section 51AA, particularly concerning the interpretation of "unconscionable conduct" as it pertains to the unwritten law. The case also addressed whether any invalid part of Section 51AA could be severed from the rest of the section.

The court examined whether the term "unconscionable conduct" in Section 51AA had a settled technical meaning or if it was better described than defined, as Mahoney JA suggested. The analysis involved understanding the legislative intent behind Section 51AA, which refers to the common law of Australia. The court also considered whether the concept of unconscionability in Section 51AA applied to a generic level or was limited to specific categories of cases, as suggested by the Explanatory Memorandum. The court looked at the legislative history and existing case law to determine the scope of the term "unconscionable conduct" and whether it could extend beyond traditional equitable doctrines to encompass broader applications in trade or commerce.

The court concluded that Section 51AA of the Trade Practices Act 1974 was valid and that there was no need to consider whether any part of it was severable. The term "unconscionable conduct" within the meaning of the unwritten law was interpreted to refer to the common law of Australia, offering a standard determined by judicial decision-making rather than a fixed rule. The court acknowledged the potential for the concept of unconscionability to evolve and apply to a broader range of situations, including equitable estoppel and the exercise of rights, but found no need to define it exhaustively. The legislative intent was to incorporate the common law concept of unconscionability into the statutory framework, providing a basis for relief similar to that available under State law.

ORDERS:
The court ruled that Section 51AA of the Trade Practices Act 1974 is valid, and no part of it was invalid. Consequently, there was no need to determine whether any invalid part could be severed from the rest of the section.