A “Quantum” Leap For Statutory Unconscionability: The Application Of The Prohibition Following Australian Competition And Consumer Commission V Quantum Housing Group

Abstract

The introduction of a statutory prohibition of unconscionable conduct in the Fair Trading Act 1986 marks an important step in harmonising New Zealand and Australian Law. This paper discusses the impact of the recent Australian Competition and Consumer Commission v Quantum Housing Group decision on the New Zealand courts’ application of the prohibition. The paper argues that the anticipated reliance of New Zealand courts on Australia means that we are likely to find that New Zealand courts follow the decision in Quantum Housing. This means that while the standard of unconscionable conduct under the FTA is not constrained by what is necessary to find a breach of the equitable doctrine, ‘unconscionability’ has become what is ultimately a broad and vague standard. In an attempt to remove the uncertainties surrounding the prohibition, the paper proposes a statutory definition of unconscionable conduct. The definition is intended to guide the courts in applying the prohibition and seeks to formalise the principles derived from the established body of caselaw in Australia.