Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd

The Australian Competition and Consumer Commission (ACCC) appealed to the High Court of Australia against a decision of the Full Court of the Federal Court. The dispute concerned the renewal of a retail shop lease for premises in a shopping centre. The owners of the shopping centre required the tenants, Mr and Mrs Roberts, to withdraw pending legal proceedings against them as a condition for renewing the lease. The Full Court had overturned the primary judge's finding that the owners' conduct was unconscionable.

The High Court was required to determine whether the conduct of the lessors in requiring the lessees to abandon legal claims against them as a condition for lease renewal constituted unconscionable conduct under section 51AA(1) of the *Trade Practices Act 1974* (Cth). This involved considering whether the lessees were under a "special disadvantage" that affected their ability to make a judgment as to their own best interests, and whether the lessors unconscientiously took advantage of that disadvantage. The relevance of inequality of bargaining power to the finding of a special disadvantage was also a key issue.

The High Court applied the principles established in *Commercial Bank of Australia Ltd v Amadio* and *Blomley v Ryan*, which define unconscionable conduct as the unconscientious exploitation of a special disadvantage. A special disadvantage is one that seriously affects a party's ability to make a judgment about their own best interests, and of which the other party is aware or ought to be aware. The Court found that while the Roberts were in a difficult bargaining position due to not having a legal right to a renewal, this did not amount to a special disadvantage that impaired their capacity to make a judgment about their own best interests. Their ability to make such a judgment was not seriously affected, and therefore, the lessors' conduct in stipulating the withdrawal of legal proceedings as a condition for renewal was not unconscionable.

The appeal was dismissed with costs.