Part 3: Statutory Interpretation

You must complete the following.

The Question

You are a senior associate in a small law firm. You have been tasked with advising a new client, Abraham Aardvark.

Issue with Rex Bocconcini

Abraham Aardvark had always been interested in the paranormal. He is an avid watcher of spooky television serials, hosts séance parties with friends, and seeks out haunted areas in North Queensland to explore.  He is known amongst his friends and family to be cheerful, kind, but somewhat dim-witted.

Six months ago, he was contacted by Rex Bocconcini, a person that Abraham know to be an expert in paranormal matters.  Rex has an art business and buys-and-sells old paintings regularly.  Rex meets Abraham and tells him enthusiastically about the “psychomatter potential” of his house and the collection of 18th century paintings contained within.  Abraham is intrigued by this, and invited Rex to perform séance sessions and to bring people into his house.  This occurs several times and Abraham tells Rex that he is eager to learn about how to ‘contact’ spirits.  Rex gives him some advice and they jointly run several sessions together.  

Approximately three months ago, Rex mentioned that Abraham’s house and the paintings were unique and that if he sold them to him, he could increase the “critical mass of psychomatter”.  Abraham was very keen to do this.  Rex said to him that he needed to make sure “everything was okay legally” and gave him the business card of his own lawyer, Dinah Johanason.  Rex also said that the “psychomatter potential” was fluctuating and that he had to go away for a month, so that it might be a good idea to do the sale before he leaves later that week.

The house and paintings had a market value of $300,000 and $200,000 respectfully.  The next day, Rex drafted a contract to purchase the house and painting for $150,000 and $100,000 respectfully.  Rex drove Abraham to Dinah’s office, but Abraham refused to get out of the car, saying that he had full faith in Rex and that he did not need a lawyer.  Rex and Abraham signed the contract that day.

Three weeks after transferring the house, Abraham went to visit and has found to his horror that Rex has on sold it to another person in the group of séance regulars for $500,000.  Rex has also sold the paintings for $400,000 through his art business.On the given facts, draft a letter of advice to Abraham.  You must only analyse how the Australian Consumer Law applies and not any cause of action in the general law.  However, you will need to explain the terms “undue influence”, “unconscionable”, as well as the defences to both in order to answer this problem satisfactorily.