The Place of Cultural Values, Norms and Practices: Assessing Unconscionability in Commercial Transactions

‘A shopkeeper develops a “system” of credit. He applies it only to impoverished and often illiterate and innumerate Aboriginal customers. He gives those customers Hobson’s choice — no matter how badly they need credit, they can either “choose” that system or “choose” no credit at all.’ This was Edelman J’s description of the system of ‘book-up’, a form of credit provision, operating in the Anangu Pitjantjatjara Yankunytjatjara Lands, the conscionability of which came before the High Court of Australia for consideration on appeal in Australian Securities and Investments Commission v Kobelt (‘Kobelt (HCA)’). The High Court, in a closely divided decision, upheld the decision of the Full Court of the Federal Court that the system was not unconscionable in the particular cultural context of the Anangu people. This article examines the relevance of the cultural norms and values of consumers when assessing a breach of the statutory test of unconscionability in financial services transactions. It concludes that Kobelt (HCA) offered a missed opportunity to address broader issues of equality before the law and structural disadvantages confronting Indigenous Australian consumers that have resulted in their marginalisation from the financial sector.