Director of Consumer Affairs Victoria v Scully

The Director of Consumer Affairs Victoria brought proceedings against Scully, a real estate agent, challenging the design and implementation of several programs that enabled individuals who could not secure bank finance to purchase homes. The case was heard in the Supreme Court of Victoria. The primary issue before the court was whether the programs constituted unconscionable conduct under the Australian Consumer Law, specifically whether the statutory definition of unconscionability required a demonstration of moral obloquy, and whether the decisions of other intermediate appellate courts on this matter were plainly wrong.

The court examined the statutory definition of unconscionability and compared it with the common law understanding. It noted that the statutory definition did not explicitly require moral obloquy, but considered whether this omission meant that moral obloquy was not a necessary element. The court also assessed the decisions of other intermediate appellate courts on this issue and concluded that those decisions were not plainly wrong, indicating that moral obloquy was indeed a requisite component of unconscionability under the statute.

In its reasoning, the court emphasised that the statutory definition of unconscionability must be interpreted in light of the common law principles, which traditionally included moral obloquy as an element. The court held that the decisions of other intermediate appellate courts were not plainly wrong because they correctly identified that moral obloquy was an implicit requirement of the statutory definition. Therefore, the court found that moral obloquy was necessary for a finding of unconscionability under the Australian Consumer Law. The court did not need to determine the unconscionable nature of the programs in this instance, as the focus was on the legal interpretation of unconscionability.

The court did not make any final orders in this matter but provided its interpretation of the statutory definition of unconscionability and the necessity of moral obloquy, which would influence any future proceedings on the unconscionable conduct of the programs in question.