Esprit International v Ilona Komesaroff

Esprit International and Ilona Komesaroff were the parties in a dispute before the Supreme Court of Victoria. The core of the disagreement concerned the enforceability of a guarantee provided by Ms. Komesaroff in favour of Esprit International.

The central legal issue before the Court was whether the guarantee given by Ms. Komesaroff was voidable due to unconscionable conduct on the part of Esprit International. Specifically, the Court had to determine if Esprit International had exploited Ms. Komesaroff's special disadvantage, and if so, whether the guarantee should be set aside.

Justice Ian Thompson found that Ms. Komesaroff was indeed under a special disadvantage, being an elderly woman with limited English proficiency and a lack of business acumen, which was known to Esprit International. The Court held that Esprit International had acted unconscionably by procuring the guarantee without ensuring Ms. Komesaroff received independent legal advice, thereby exploiting her vulnerability. Consequently, the Court declared the guarantee voidable and set it aside.