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
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:
ï‚· Mr and Mrs Amadio were immigrants to Australia of Italian birth, had a
relatively poor command of English and limited business experience.
ï‚· 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.
ï‚· In fact, Vincenzo's business was in a severe financial difficulties.
ï‚· 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.
ï‚· 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
ï‚· A state appeal court reversed that decision and gave judgement for Mr and Mrs
ï‚· 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
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
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
8 Word limit is about 1,200; presentation of answers in point form is preferred.
9 The group report must be submitted in both the following ways:
ï‚· Electronically to Turnitin
ï‚· Hard copy (one only) to be handed, in the last week of lectures, to the tutor who is
to mark it (where the group includes students from more than one tutorial the
report can be handed to any tutor the group chooses but ONLY ONE copy is to be
10 If you need further guidance about how to go about or submit the report ask your tutor.
The questions you have to answer
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
ï‚· 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
ï‚· what were the facts in this case which persuaded Justice Gibbs that the bank
should have made such a disclosure?
ï‚· 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
4 Answer the following from the judgment of Justice Mason (who decided the case
on different grounds):
ï‚· What was the ratio for his decision?
ï‚· How was it different from the ratio adopted by Justice Gibbs?
ï‚· 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
6 Answer the following from the judgment of Justice Deane
ï‚· 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?
ï‚· what was the ratio for Justice Deane's decision in favour of Mr and Mrs
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.
ï‚· 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?
ï‚· In the Amadio case, why did Justice Dawson conclude that his test was not