The Federal Circuit Court of Australia recently considered misleading and deceptive conduct in respect of a bidder’s conduct at a residential property auction.
The bidder made the highest bid of $3.6 million. The bid was below the reserve price therefore the auctioneer suspended the auction to seek the vendor’s instructions. The vendors agreed to the bid and the auctioneer recommenced the auction. There were no further bids and the property was knocked down to the bidder.
The bidder then refused to proceed with the purchase of the property. The property was placed on the market again, resulting in additional costs to the vendor.
The Court found that the bidder’s conduct was misleading and deceptive. However, the Court held that the vendor did not incur any loss due to the bidder’s conduct because such loss can only be the loss of an opportunity to restart the auction at an earlier time. Given that there were no other genuine bidders, the loss did not have anything other than a theoretical significance.