ABSTRACT
Ask a lawyer for a cross-cultural perspective on equity and she’ll probably reply with three words: Amadio, Amadio, Amadio. In Commercial Bank of Australia v Amadio41 the High Court held that Mr and Mrs Amadio, an elderly Italian couple, could avoid liability under a guarantee they signed which secured their son’s debts to the Commercial Bank of Australia. Mr and Mrs Amadio had a limited grasp of English and executed a mortgage in favour of a bank over land they owned in order to secure an overdraft in favour of a company controlled by their son. They mistakenly believed their liability was limited to $50,000 when in fact it was unlimited. They signed the document in their kitchen in front of a bank officer who had brought the document to them the same day the bank had been told by the son that his parents would secure the overdraft. The bank relied on the son’s advice that he had explained the transaction to his parents. The High Court found that Mr and Mrs Amadio’s age, migrant background, unfamiliarity with English, lack of business experience, reliance on their son’s advice and the lack of other advice when it was clearly necessary all contributed to their position of disadvantage vis-à-vis the bank, making it unconscionable for the bank to enforce the guarantee.
