Unconscionability - aggregation of knowledge of employees?

The Full Court of the Federal Court recently handed down its decision in an unconscionability case in Commonwealth Bank of Australia v Kojic [2016] FCAFC 186.  Allsop CJ, Besanko and Edelman JJ(before His Honour’s appointment to the High Court) considered whether the knowledge of officers and employees can be aggregated and attributed to a corporation for the purposes of supporting a finding of unconscionable conduct. The issue was considered in the context where the officers and employees had not individually acted unconscionably.  After an analysis of Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563, the Full Court concluded that the knowledge of the employees could not be so aggregated. 

Allsop CJ held that in this case no principle of law led to aggregation.  Besanko J allowed the appeal but held, although the point was not fully argued, that s.84 did not form an obstacle to the aggregation of knowledge in the case of unconscionable conduct under statute.  Edelman J held that the decision in Krakowski did not support aggregation of knowledge.  The Full Court allowed the appeal and overturned the decision of the trial judge and the damages award of approximately $600,000.  However, Edelman J concluded at [153]:

“Although this is not such a case, it is possible that there could be examples where a corporation acts unconscionably even though no individual has acted unconscionably. For instance, in a case where no individual has the knowledge required to establish wrongdoing, it might be difficult for a corporation to avoid a finding that it has acted unconscionably if it puts into place procedures intended to ensure that no particular individual could have the requisite knowledge. The same might be true if a corporation’s procedures were such that those formulating them were reckless about serious consequences. It may be that references in cases such as Radio Rentals to the possibility of unconscionable conduct by a corporation arising from a breach of its duty to communicate are better understood as references to the unconscionable failure to ensure communication of that information rather than as unconscionability based upon an aggregation of knowledge. But that issue can be left to a case in which it arises.”