Private Law Theory

ABSTRACT
The equitable doctrine of unconscionable conduct has entered a new stage of its dynamic existence. The New South Wales Court of Appeal’s 2022 decision in Nitopi v Nitopi overturned the primary decision on the basis that particular findings of knowledge were not sufficient. The Court of Appeal considered whether it suffices for unconscionable conduct that a stronger party is put ‘on notice’ of a special disadvantage, and whether there is any inconsistency in the recent High Court authorities of Thorne, Stubbings and Kakavas in how they approach the long shadow of the ‘ought to know’ knowledge limb as expressed in Amadio. This paper respectfully suggests there is no need to read an inconsistency into the High Court authorities, such and that constructive knowledge and constructive notice are presently insufficient for unconscionable conduct. However, we contend that there is nevertheless a sound doctrinal basis for equity to intervene where a stronger party is on constructive notice of a special disadvantage in cases concerning passive retention of benefits and gifts, rather than active exploitation.

Zheng, Alan and Jha, Pranay, Constructive Notice and Passive Retention Scenarios in Unconscionable Conduct Cases (June 1, 2023), (2023) 37(1) Commercial Law Quarterly 4.