Objectives and process

1 The purpose of this assignment is to give students the opportunity to

a. read an important judgement of a Superior Court

b. extract from the judgments the reasoning of the respective judges in coming to their separate conclusions; and

c. express in their own words the ratios of the various judgments; it is NOT an exercise in cutting and pasting passages from the judgments and students who do this will lose marks

2 First, students must read in full the judgment of the High Court of Australia in Commercial Bank of Australia v Amadio. The judgement can be accessed via the link provided on Moodle in topic 12

3 The full details of what happened in the case are set out in the judgements delivered by the separate judges and students must read them. By way of short summary:

- Mr and Mrs Amadio were immigrants to Australia of Italian birth, had a relatively poor command of English and limited business experience.

- They were induced by their son Vincenzo to sign a mortgage over property they owned to secure a guarantee of loans by the bank to their son, whom they believed to be successful.

- In fact, Vincenzo's business was in a severe financial difficulties.

- The bank knew this, but relied upon Vincenzo's explaining to his parents the nature of the mortgage transaction and of the documents they were signing.

- At the original hearing the bank was successful in defending the claims brought against it by the parents seeking, on several grounds, to have the mortgage set aside.

- A state appeal court reversed that decision and gave judgement for Mr and Mrs Amadio.

- The bank appealed against that decision to the High Court of Australia where the case was heard by four judges. It is the decision of that court that you are reading.

4 You will see that of the four judges who heard the case in the High Court, three decided in favour of Mr and Mrs Amadio and one decided in favour of the bank. Therefore, Mr and Mrs Amadio were successful by a majority decision.

5 However, as between the three judges who decided in favour of Mr and Mrs Amadio, they did not all decide the case on the same legal grounds. It is your understanding of the different approaches taken by the judges that this exercise is intended to test. 6 Students should discuss as a group what answer the group will give, in its own words, to the questions below. If you are quoting passages from the judgments (which must only be done sparingly) you must indicate the paragraph numbers from which your quotations are taken. (For each of the four separate judgements, there are numbered paragraphs).

7 Preparation of written answers should be divided up among the group members so that the work is shared. Where it appears to the tutor marking the group report that just one or two students have written all the answers some oral testing of group members may be used to determine whether all group members contributed to and understand the answers being submitted.

8 Word limit is about 1,200; presentation of answers in point form is preferred.

1 State three causes of action (ie, legal issues) which Mr and Mrs Amadio used in challenging the mortgage they had signed?

2 In reversing the decision of the trial judge, what three findings did the appeal court come to after its examination of the facts?

3 Answer the following from the judgment of Justice Gibbs

- In what circumstances would a bank be required to inform a potential guarantor about the state of the account of the customer which is to be guaranteed; and

- what were the facts in this case which persuaded Justice Gibbs that the bank should have made such a disclosure?

- What was the ratio for Justice Gibbs's decision of the case in favour of Mr and Mrs Amadio (i.e., on the basis of what legal issue or issues did the judge decide the case)?

4 Answer the following from the judgment of Justice Mason (who decided the case on different grounds):

- What was the ratio for his decision?

- How was it different from the ratio adopted by Justice Gibbs?

- What were the facts about the positions of the bank on the one hand and of Mr and Mrs Amadio on the other hand which Justice Mason identified as satisfying the legal tests in the ratio for his decision?

5 Justice Mason and Justice Deane both explained the legal difference between unconscionable conduct (unconscionability) and undue influence. In your own words, what is the difference which the two judges described between these two legal issues?

6 Answer the following from the judgment of Justice Deane

- what facts did Justice Deane identify in coming to the conclusion that Mr and Mrs Amadio were under a "special disability" when compared with the bank?

- what was the ratio for Justice Deane's decision in favour of Mr and Mrs Amadio?

7 Answer the following from the judgment of Justice Dawson (who was the dissenting judge) that the bank was in no way liable for Mr and Mrs Amadio's having signed the mortgage which was disadvantageous to them.

- What was 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?

- In the Amadio case, why did Justice Dawson conclude that his test was not satisfied?