Last week a bench of 7 judges handed down Australian Securities and Investments Commission v Kobelt [2019] HCA 18 producing a 4-3 split decision to dismiss the appeal and 5 separate sets of reasons for decision. It is difficult to discern from those reasons any substantial difference in legal principle on the meaning of statutory unconscionability. The judges differed on the application of those principles to the facts at hand.
In the past, courts have made clear that the question of whether conduct offends the statutory norm and thus is "in all the circumstances" "unconscionable" is one of evaluative judgment by the court concerned paying the closest attention to all of the relevant circumstances at play. As an evaluative judgment, courts have always acknowledged that minds might differ as to the ultimate result without producing appealable error. The efficacy of a High Court Appeal which ultimately turns on this evaluative judgment must be limited.
Certainly there is in the decision a rehearsal of the legal principles at play. There is also an exposition of the interplay between equity's learning on unconscionable conduct and statutory unconscionability - although it might be said that this ground has already been well tilled by the High Court: see for example Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392 and Paciocco v Australia & New Zealand Banking Group Ltd [2016] HCA 28; (2016) 258 CLR 525. The "high level of moral obloquy" descriptor, which had, in the past been favoured and then consigned to the legal scrap heap, only to be revived by Gageler J in Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525 at 587 [188], was again eschewed and regretted by him [91] and Gordon and Nettle JJ [152], only to be endorsed again in this decision by Keane J [118] - [120].
In this case the facts concerned the provision of a form of credit by a general storekeeper in remote outback South Australia to his almost exclusively poor, Indigenous clientele who had limited education and financial literacy. The form of credit was known as "book-up" which was, apparently, well known and understood by the Indigenous users. The system of "book-up" implemented in this case required the customers to hand over their Bank Access Cards and PIN numbers to the storekeeper who was authorised to withdraw funds in order to provide the customer with credit to use at the store. The effect of the system implemented "tied" these customers to the store concerned and the interest that was charged on the big-ticket items purchased, such a second-hand motor vehicles, was very high.
In the final analysis the judges differed as to whether in all the circumstances the credit system provided was unconscionable. Keifel CJ, Bell, Gageler and Keane JJ held that it was not, while very strong dissents were written by Nettle, Gordon and Edelman JJ. I suppose that exposing the evaluative process has merit - and having differing views highlights that process - but I'm not sure that the profession or Australians are ultimately much the wiser. As Gageler J, who was on the panel that gave special leave said in this case at [95]:
The difficulty of that challenge was present in my mind at the time of participating in the grant of special leave to appeal from the judgment of the Full Court of the Federal Court. I considered it then to be a factor which weighed against special leave to appeal being granted. Hard cases test and sometimes strain legal principle. They do not always lend themselves to elucidation of legal principle in a way that can be predicted to provide precedential guidance of the systemic usefulness generally to be expected from a decision of an ultimate court of appeal. Special leave to appeal having been granted, it is unsatisfactory but unsurprising to me that the Court should find itself closely divided on the resolution of the appeal.
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