Commercial Bank of Australia Limited

Question: Discuss about the Commercial Bank of Australia Limited. Answer: Introduction: Justice Mason concluded that Amadio (respondents) were to go scot free because the bank (applicant) bore the guilt of unconsciously procuring the mortgage guarantee contract. In essence, ruling this case against Amadio is equivalent to punishing them for the bank's mistake. It is the bank that executed the deal and even had a better knowledge of Vincenzo's business status than his parents, meaning that they had to ensure that all the terms of the contract could guarantee that the guarantor (Mr. and Mrs. Amadio) repaid the loan if the borrower failed(Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 , 1983). Although Justice Gibbs also made the same decision as Justice Mason, he had a different reasoning. He held that that the bank knew that its bargain with the respondents was ordinary and conducted in the regular and usual course of commerce. He also added that the bank was aware of all the inequalities of bargaining power. The bank also knew that the transaction lacked any evidence of overdue influence and that all concealments and misrepresentations were the Vincenzo's responsibility(Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447, 1983). The following three factors are the ones Justice Mason identified. First, the respondents, in contrast to the bank, sadly lacked the power to determine whether striking the guarantee contract was in their interest, even though they were desperate to help their son. Second, the respondents were in a special disadvantage position, which emanated from having confidence in their son who seemed to have misled them into entering the guarantee transaction. The son urged them to provide a mortgage so the bank could stretch the companys overdraft limits from $80,000 to $270,000, while also misleading them about the companys financial health. Third, they believed that the business of their sons company (V. Amadio Builders Pty. Ltd) was prosperous and flourishing, and only in a temporary need of money. However, the banks financial health was perilous, and even the bank knew that factor(Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447, 1983). Reference Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 (1983) High Court of Australia.