Misleading conduct; meaning of "in trade or commerce".
Facts: O'Brien advertised in a newspaper that he wished to sell some land. Smolonogov telephoned O'Brien to make inquiries. O'Brien made various untrue comments about the land, in particular that the land was good land with a permanent creek running through it; and that a building permit had been issued. Smolonogov bought the land but later repudiated the contract on the basis of having been induced to enter it by the seller's misleading representations. Smolonogov argued that these representations amounted to be a breach of s 53A of the Trade Practices Act 1974 (Cth) which prohibits misleading conduct in the form of representations made in relation to the sale of land 'in trade or commerce'.
Issue: Had the sale taken place 'in trade or commerce'?
Decision: The transaction had not taken place in trade or commerce: it was a private sale and therefore not subject to s 53A of the Trade Practices Act.
Reason: Despite using a classified advertisement in the newspaper (an invitation to the public at large to deal), the seller was not involved in the commercial selling of land. An isolated sale of property by its owner does not constitute the conduct of trade or commerce. To be so, the sale must be part of the business, vocation or occupation of the seller.
Note: Although this case concerns s 53 of the Trade Practices Act it continues to be relevant with regard to the interpretation and application of the Australian Consumer Law.