Unconscionable Conduct: Lessons from Amadio – and Why You Should Consider a Caveat to Protect Your Property
When entering into agreements—especially with family members, banks, or business partners—it’s easy to assume that everyone is on the same page. But the law recognises that sometimes people are taken advantage of, particularly when there’s a power imbalance or lack of proper understanding.
This is where the principle of unconscionable conduct becomes important. One of the landmark cases in this area is Commercial Bank of Australia v Amadio (1983)—and more recently, the NSW Supreme Court revisited this issue in La Selva v La Selva [2025] NSWSC 78.
These cases serve as important reminders to protect your interests, especially when transferring property or entering into financial arrangements with others.
What is Unconscionable Conduct?
Unconscionable conduct occurs when one party takes advantage of another's vulnerability, lack of education, limited language skills, emotional dependence, or other disadvantage, in a way that is morally or ethically unfair.
The law may intervene to set aside contracts or transfers that result from such conduct.
A Quick Recap: Commercial Bank of Australia v Amadio
In this 1983 High Court case, an elderly couple agreed to guarantee their son’s business loan. They misunderstood the nature of the transaction, were not advised to seek legal advice, and were unaware of their son’s financial difficulties. The Court found that the bank had taken advantage of their vulnerability and set aside the guarantee.
Key takeaway: A contract may not be enforceable if it’s the result of unfair pressure or a party’s significant disadvantage.
A Modern Example: La Selva v La Selva [2025] NSWSC 78
In this recent case, an elderly father transferred property to his son in the context of an informal family agreement. There was no written documentation, no legal advice obtained, and the transfer was later challenged when the relationship broke down.
The Court found that the transfer was the result of undue influence and unconscionable conduct, and set it aside—returning the property to the original owner.
What’s important here is that the father had not lodged a caveat to protect his interest in the property when the informal agreement was made.
Protect Your Property: Lodge a Caveat
If you’ve contributed to the purchase of a property, transferred a title to a family member, or entered into an agreement that affects your interest in land—protect yourself.
A caveat is a legal notice registered on the title of a property that alerts others to your interest. It can prevent the property from being sold or further dealt with without your knowledge or consent.
We see this often in:
Parent–child financial arrangements
De facto or informal relationships
Loan agreements involving real estate
Contributions to property where you're not on the title
Without a caveat, you may have little recourse if things go wrong.
How We Help
At Renee Roumanos Legal, we act for clients dealing with:
Family and financial disputes involving real estate
Concerns about undue influence or unconscionable conduct
Personal guarantees and risky agreements
Protecting contributions to property through caveats and formal agreements
We give you clear, honest advice about your rights—and how to secure them.
📞 Have you contributed to a property or signed a financial agreement you're unsure about?
Call us today on 02 9054 1311. Let’s make sure your interests are protected.
Don’t leave it too late — protect your future with Renee Roumanos Legal.
