Australian Competition & Consumer Commission v Samton Holdings Pty Ltd [2000] FCA 1725

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Samton Holdings Pty Ltd

[2000] FCA 1725

TRADE PRACTICES – EQUITY – unconscionability – statutory prohibition of engaging in unconscionable conduct – tenant of business premises took possession four days before expiry of option to obtain grant of new lease for term of seven years – tenant paid substantial amount for goodwill of business – goodwill depended largely on location of business – business unable to be relocated – tenant aware that option had to be exercised by particular date – tenant failed to exercise option by that date – purported to exercise option sixteen days later – landlords initially resolved to resume possession on expiry of then current term and so informed tenant – tenant threatened legal action – agreement reached whereby tenant paid $70,000 to obtain assignment of new lease from company associated with landlords – arrangement so structured to avoid "key money" prohibition in State statute – whether tenant in position of special disadvantage – whether landlords unconscionably took advantage of that position – whether Equity would grant relief to tenant and the landlords would thus have contravened s 51AA of the Trade Practices Act – whether s 51AA Constitutionally valid.

Trade Practices Act 1974 (Cth), s 51AA

Commercial Tenancy (Retail Shops) Agreement Act 1985 (W.A.)

Blomley v Ryan (1956) 99 CLR 362 applied

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 applied

Earl of Chesterfield v Janssen (1751) 2 Ves Sen 125 [28 ER 82] referred to

Earl of Aylesford v Morris (1873) LR 8 Ch App 484 referred to

Antonovic v Walker (1986) 7 NSWLR 151 referred to

The Commonwealth v Verwayen (1990) 170 CLR 394 referred to

Harry v Kreutziger (1978) 95 DLR (3d) 231 referred to

Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (1999) 96 FCR 491 referred to