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This case note explores the merits, or demerits, of the High Court's recent decision in Kakavas v Crown Melbourne Ltd. That decision appears to be further confirmation of a contemporary judicial tendency in Australia, which is to seriously restrict the ameliorative potential of the Amadio-style 'unconscionable dealing' doctrine, at least in relation to so-called 'arm's-length commercial transactions'. The High Court held that no relief is available for unconscionable dealing - or for 'unconscionable conduct' under s 51AA of the Trade Practices Act 1974 (Cth) (now s 20 of the Australian Consumer Law), which is the selfsame thing - unless the party alleged to have acted unconscionably actually knew of the victim's relative 'special disadvantage' and 'preyed upon' him or her. This note questions whether, in relation to a doctrine that has traditionally been understood to implement a legal policy of protecting the transactionally vulnerable from victimisation, the law relating to unconscionable dealing/conduct in Australia ought to be limited to disciplining nakedly exploitative conduct and nothing less.
I INTRODUCTION
Harry Kakavas had a chequered past and a serious gambling problem. He claimed to suffer from a pathological impulse to gamble. He was also what is known in the industry as a 'high roller'.1 Between June 2005 and August 2006, he lost a total of $20.5 million playing baccarat at a Melbourne casino operated by Crown Melbourne Ltd ('Crown'). He sought to recover that cumulative loss from Crown on the basis that Crown had, through its employees, engaged in 'unconscionable conduct' in contravention of s 51AA of the Trade Practices Act 1974 (Cth) ('TPA')2 (now s 20 of the Australian Consumer Law ('ACL')).3
Both at first instance4 and in the Court of Appeal of Victoria,5 Mr Kakavas argued that Crown had, in contravention of s 51AA, acted unconscionably by actively preying upon his gambling addiction to its own benefit, in particular by luring him to gamble at its casino by incentives such as rebates on losses, free accommodation and use of the company's private jet. However, the emphasis of his plea shifted when the matter came before the High Court. There, Mr Kakavas advanced a more passive unconscionable dealing claim, which, if successful, would automatically suffice to establish a contravention of s 51AA.6 In particular,...