Mr and Mrs Carter owned a property at Riverton Drive, Rossmoyne
and offered the property for sale by auction. Mr Ilahi attended the
auction and made a bid of $3.6m. He was the only bidder at the
auction and the Carters agreed to accept his bid. The auctioneer
then knocked down the property to Mr Ilahi.
Mr Ilahi was invited into the house to sign the contract. After
much discussion, he announced that he did not wish to buy and
declined all attempts to compel him to complete the purchase.
Subsequently, the Carters put the property up for sale again but
were unable to find a buyer.
The Carters sued Mr Ilahi. They could not rely on an oral
contract to buy because the Property Law Act requires that, to be
enforceable, a contract for the sale of land must be in writing.
The Carters' legal action was based on a claim for misleading
or deceptive conduct under the Australian Consumer
The Court found that at the time he made the bid, Mr Ilahi
genuinely intended to buy the property. He therefore changed his
mind some time between making his bid and being asked to sign the
The Federal Court found that Mr Ilahi had engaged in conduct
which was misleading and deceptive by failing to reveal his
intentions not to purchase the property until just before the time
he left the property. The court found that his silence in the
meantime amounted to misleading and deceptive conduct.
The Carters claimed damages of $325,000 being the difference
between the current value of the property and the amount bid by Mr
However, no award of damages was made. The court took the view
that all the sellers had lost as a result of the misleading and
deceptive conduct was the opportunity to restart the auction. As
there were no other genuine bidders at the auction, the conduct had
not resulted in the sellers losing a sale of the property. If there
had been another buyer willing to buy at the auction, the sellers
could have offered the property to them at that time. However,
since Mr Ilahi was the only person there, they were left without
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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