Case Study Of Bridgewater V Leahy

Case Study Of Bridgewater V Leahy

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Case Study Of Bridgewater V Leahy

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Case Study Of Bridgewater V Leahy

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Bridgewater v Leahy (B12-1998) [1998] HCA 66
22 October 1998
Executive summary
The case deals with a critical assessment of “unconscionability” aspect under Business Law. The doctrine of unconscionable bargains arose simply to protect the weak party from the exploitation of the other dominating through the unequal bargaining power. The overview of the case depends on the factor “unconscionable dealing” where one party suffers from some special disability or under some binding special position of disadvantage (Rickett, 2012).
As per facts of the case, the strong emotional attachment between uncle and nephew create special disadvantage aspects in the unconscionable dealings.  The court supports broad development in the category of “unconscionable dealings”.
IRAC Method = Issue, Rule, Application, and Conclusion
The main leading Issue of the case is that “whether the transaction to transfer property to nephew by uncle procured unconscionably or not”?
In support of the response to the issue is that unconscionable transaction does not taken place between uncle and nephew as uncle was not having any son and nephew was like his son because he was engaged with a grazing business of uncle from a long time ago. The strong dependence comes under the purview of “special disadvantage in unconscious bargain”.  In Commercial Bank of Australia Ltd v Amadio  (1983) 151 CLR 447, Justice Mason suggest that if the dominating party can prove that the transaction is fair, just and equitable, then such transaction shall not be call into question. In Blomley v Ryan (1956) 99 CLR 362, Justice Fullagar state that the common characteristics of the unconscionable bargaining depend on the instances of sex, age, infirmity, illiteracy and Drunkenness. The drunkenness was a key factor of unconscionable bargaining in this case. Another case, in Louth v Diprose (1992) 175 CLR 621, the jury establish that the donee of the case had applied an unconscionable conduct by threatening of the suicide in order to create false atmosphere of crisis (Galloway, 2010).   
The Rule of the case is that “the innocent party must prove that the agreement or transaction is a result of the unconscionable conduct”. In order to establish the rule, the “test of causation” must be followed. According to the facts of the case, the transaction was made when Uncle was sound and capable of making his decision. Thus it is difficult to establish that Uncle was induced by the Nephew to enter into a contract for transfer of property (Keene and Leslie, 2011).
The legal Application of the case relates to the factor of “equity”. The Principle of Equity supports in the legal applicability aspect of the case. According to the legal principle, the relief granted on the basis of equity application. The general application of the law states that the “those who pursue equity must ensure equity”. In Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102, the Court observed the fundamental principle of equitable relief. Here in this case, the principle of equity is settled on the ground that no unconsciously element found in the transaction between Uncle and Nephew taken place because transaction was made inter-vivos (living to living) and in a sound capacity (Hepburn and Bigwood, 2013).  
Therefore, the Conclusion of the case is that no unfair or bargain transaction on the basis of “unconscionable” element found as a catching key word in the case. The decision by the majority of the 3:2 ratio held that the “rescission of the contract” must be implemented as there is element in the intervention of the equity. Thus, the Justice Gaudron, Gummow, Kirby and Callinan refuse to reject the transaction and declared that no unconscionable bargain is executed by nephew against his uncle.
Undoubtedly, the case of Bridgewater v Leahy (1998) represents the catalyst approach in regard to relief against unconscionable dealings. The case provides a broad overview in the development of the concept of “unconscionable bargains” through new or modified implications in it. “Special disability” and “taking advantage “considered as two foremost elements establish the principle of “unconscionable bargain”. Such foremost elements are dissent by the justice Gaudron, Gummow and Kirby. As per their verdicts, the element of unconscionable bargaining was not completely made out against the conduct of nephew. However, the case demonstrates clearly that uncle has a complete knowledge on the future outcomes of his deliberate and reasoned judgement (Gooley, Radan and Vickovich, 2007). 
Bigwood, R., 2013. Kakavas v. Crown Melbourne LTD; Still Curbing Unconscionability: Kakavas in the High Court of Australia. Melb. UL Rev., 37, p.463.
Galloway, K., 2010. Analysing conscience as the mediating concept between the free market and consumer protection in Queensland land transactions. James Cook UL Rev., 17, p.83.
Gooley, J.V., Radan, P. and Vickovich, I., 2007. Principles of Australian Contract Law: Cases and Materials. LexisNexis Butterworths.
Hepburn, S., 2013. Principles of Equity & Trusts (Aus) 2/e. Routledge.
Keene, A. and Leslie, S., 2011. But Where’s the Contract-A Tribute to Professor David McLaughlan. Victoria U. Wellington L. Rev., 42, p.3.
Rickett, C.E.F., 2012. Bridgewater v Leagy-A Bridge too Far. U. Queensland LJ, 31, p.233.

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