McKinnon & Anor v Commonwealth Bank

In *McKinnon & Anor v Commonwealth Bank*, the High Court of Australia considered a dispute between the McKinnons and the Commonwealth Bank of Australia concerning the enforceability of certain loan agreements. The core of the disagreement revolved around allegations of unconscionable conduct and misleading or deceptive conduct in relation to the formation and operation of these agreements.

The High Court was required to determine whether the Bank had engaged in unconscionable conduct in contravention of section 51AA of the *Trade Practices Act 1974* (Cth) (now section 21 of the *Australian Consumer Law*). Additionally, the Court had to consider whether the Bank had engaged in misleading or deceptive conduct in breach of section 52 of the *Trade Practices Act 1974* (Cth) (now section 18 of the *Australian Consumer Law*). A further issue was whether the loan agreements were void or otherwise unenforceable due to the alleged unconscionable conduct.

The Court's reasoning focused on the elements required to establish unconscionable conduct under section 51AA, particularly the requirement for a special disadvantage affecting one party and the other party's knowledge of that disadvantage and exploitation of it. Gleeson CJ and Gummow J analysed the evidence presented by the McKinnons regarding their financial circumstances and their interactions with the Bank. They considered the nature of the advice provided by the Bank and the circumstances under which the loan agreements were entered into. The Court ultimately found that the McKinnons had not established the necessary elements for unconscionable conduct, nor had they proven misleading or deceptive conduct.

Consequently, the High Court dismissed the appeal and upheld the decision of the lower court, finding that the loan agreements were valid and enforceable.