Jenkins & Anor v NAB Limited

In *Jenkins & Anor v NAB Limited*, the High Court of Australia considered a dispute between the appellants, Mr. and Mrs. Jenkins, and the respondent, National Australia Bank Limited. The core of the dispute concerned the enforceability of certain loan guarantees provided by the Jenkinses to the bank, which they sought to set aside on grounds of unconscionable conduct.

The High Court was required to determine whether the bank had acted unconscionably in procuring the loan guarantees from the Jenkinses. Specifically, the court had to consider whether the bank had exploited a special disadvantage suffered by the Jenkinses, and whether the bank had actual or constructive knowledge of that disadvantage, such that it would be unconscionable for the bank to rely on the guarantees.

The court's reasoning focused on the principles of unconscionable conduct as established in Australian contract law. It was held that for conduct to be unconscionable, there must be a special disadvantage affecting one party, and the other party must have knowledge of that disadvantage and exploit it. The High Court found that the circumstances did not establish the necessary elements of unconscionable conduct on the part of the bank. The court emphasised that mere financial pressure or the existence of a lender-borrower relationship does not automatically give rise to a special disadvantage or unconscionable conduct.

The High Court allowed the appeal, setting aside the orders of the lower courts and dismissing the Jenkinses' claim.