Case - Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 (12 May 1983)
HIGH COURT OF AUSTRALIA
Equity Guarantee
Gibbs C.J.(1), Mason(2), Wason(3), Deane(4) and Dawson(5)JJ.

QUESTIONS

1 Mr and Mrs Amadio relied upon three causes of action (ie, three legal issues, not just facts) when they challenged the mortgage guarantee they had signed? Refer to the lecture notes for lecture 3 (Contracts 2) and identify which of the three grounds for avoiding a contract given in those notes the Amadios relied upon.)

2 The Appeal Court reversed the decision of the trial (ie, first) judge and decided that the bank was liable to the Amadios for three reasons. State any two of the reasons (ie, wrong conduct by the bank) which the Appeal Court identified.

Questions 3-5 are based on the judgment-of Justice Gibbs

3 Justice Gibbs ruled that a bank is not obliged to disclose to an intending guarantor the state of the account to be guarantee except in a certain circumstance. What is that circumstance?

4 What were two circumstances (facts) in this case which persuaded Justice Gibbs that the bank should have made such as disclosure to the Amadios?

5 Justice Gibbs concluded that the bank's failure to disclose either of the two situations referred to in question 4 constituted which of the torts discussed in lecture 3?

Questions 6 and 7 are based on the judgment of Justice Mason (who decided the case on different grounds):

6 What was the ratio (ie, the particular tort discussed in lecture 3) which Justice Mason considered the bank to be guilty of?

7 Justice Mason identified several ways in which the bank on the one hand and Mr and Mrs Amadio on the other hand were in positions of what he called "gross inequality of bargaining power." What were any three of those ways?

Justice Mason and Justice Deane both explained the legal difference between the torts of unconscionable conduct (unconscionability) and undue influence.

8 State in your own words [ie, do not just cut and paste from the judgments] the difference between these two torts which the two judges explained (you may find it useful to refer to lecture notes for some help in answering this question).

9 How did the situation of the Amadios fit each of these two torts?
Answer the following from the judgment of Justice Dawson (who was the dissenting judge)

10 What should be the general test (ie, the proper circumstance) in which a bank would be liable to a guarantor who has been induced to give a guarantee as a result of some misrepresentation about the guarantee?