Buccoliero v Commonwealth Bank of Australia

The appeal in *Buccoliero v Commonwealth Bank of Australia* concerned a refinancing contract entered into by the appellant with the respondent bank. The appellant, who was of lower than average intelligence, alleged the contract was unjust, claiming she was influenced by a co-borrower and lacked the ability to service the loan. The primary judge had found that the bank had no knowledge of this influence or the appellant's inability to pay.

The central legal issues before the Court of Appeal were whether the primary judge erred in finding the contract was not unjust under section 9 of the *Contracts Review Act 1980* (NSW). Specifically, the court considered the nature of undue influence, the significance of the appellant's intellectual capacity and financial circumstances, and the bank's knowledge thereof, in determining the contract's justice. The court also had to consider whether the establishment of criteria under section 9(2) automatically rendered a contract unjust and the court's discretion in granting relief.

The Court of Appeal affirmed the primary judge's decision, reasoning that while the appellant's lower than average intelligence and the influence of the co-borrower were relevant circumstances, the bank's lack of knowledge of these factors was significant. The court reiterated that undue influence focuses on the psychological ascendancy of one party over another, not merely the victim's state of awareness. Furthermore, the court emphasised that the criteria listed in section 9(2) of the *Contracts Review Act* are not determinative, and a court must consider all circumstances when assessing justice. The court also noted that even if the contract were found unjust, any relief would be contingent on the appellant repaying funds used to her advantage, such as discharging a prior mortgage.

Consequently, the appeal was dismissed with costs.