Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd [2021] FCAFC 40
Consumer law; unconscionable conduct in breach of s 21 of the Australian Consumer Law; requirement of vulnerability
Facts: Quantum Housing Group (QHG) was a company that assisted private investors to acquire rental properties that qualified for government financial incentives. These investors often appointed managers to look after their property in a way that complied with the requirements of the incentive scheme. QHG devised a plan to persuade individual investors to switch from their existing property managers to managers with whom QHG had an undisclosed commercial association. QHG used its significantly superior bargaining position to pressure its investors to switch managers. The investors were not in a position of vulnerability or disadvantage, but the Australian Competition and Consumer Commission (ACCC) alleged that QGH had engaged in unconscionable conduct in breach of s 21 of the Australian Consumer Law (ACL).
Issue: Do the provisions of s 21 require proof that the persons to whom the conduct was directed were subject to a vulnerability or disadvantage?
Decision: Whilst the exploitation of a vulnerability or disadvantage will often be a feature of unconscionable conduct under s 21, it is not a necessary feature of the statutory concept. QHG had engaged in conduct that was unconscionable.
Reason: The court said [at 83]:
The legislature has expressly stated that s 21 is not limited by the unwritten law: s 21(4)(a).
This means that although a special disability or vulnerability may be required to prove unconscionable conduct under rules of equity, it is not ‘an essential requirement of statutory unconscionability’.
The court said further [at 87]:
… [U]nconscionable conduct “on its ordinary and natural interpretation, means doing what should not be done in good conscience”. The words “unconscionable” and “conscionable” may not be frequently used in everyday parlance, but they have an ordinary meaning, derived from the inner human sense of doing right.