SCENARIOS ON ‘ IN TRADE AND COMMERCE”

1. If a vendor sells his house and asked the real estate agent to sell on his behalf, is the vendor
engaged in trade or commerce?

In many jurisdictions, whether or not a person is engaged in "trade or commerce" depends on the
specifics of the activity and the legal definitions set out in the relevant statutes or regulations.

In the scenario you've described, a vendor sells his house and employs a real estate agent to sell it
on his behalf. Here are a few general considerations:

• Nature of Activity: If the vendor occasionally sells a house, perhaps his own residence, this
may not be considered "trade or commerce" in the typical sense. On the other hand, if the
vendor regularly buys and sells houses as a business activity, then he might be considered as
engaging in trade or commerce.
• Frequency and Regularity: Occasional or one-off sales, especially of personal items like a
personal residence, typically aren't viewed as trade or commerce. However, frequent and
regular sales can indicate a business activity.
• Intention: The purpose behind the sale can be a factor. Selling a personal residence because
the vendor is relocating might not be considered trade, but selling properties routinely to
profit from market fluctuations might be.
• Legal Definitions: The specific legal definitions of "trade" and "commerce" can vary between
jurisdictions. Some laws or regulations might have specific criteria that need to be met.
• Role of Real Estate Agent: Just because a vendor uses a real estate agent doesn't
automatically mean the vendor is engaged in trade or commerce. The agent is acting as a
representative for the vendor, but it's the underlying activity (selling the house) that must be
evaluated.

2. If a vendor sells his house and asked the real estate agent to sell on his behalf, is the vendor
engaged in trade or commerce under Australian Consumer Law legislation?

Under the Australian Consumer Law (ACL), "trade or commerce" is defined in section 2 of the
Competition and Consumer Act 2010 (Cth) as "trade or commerce within Australia or between
Australia and places outside Australia."

To determine if someone is engaged in trade or commerce, courts often consider factors such as the
nature of the activity, its regularity, and its organizational characteristics. They typically differentiate
between personal or private sales and those in a business context.

In the scenario you've described, where a vendor sells his house and engages a real estate agent to
act on his behalf:

• Nature of Activity: Selling a personal residence is typically a private activity and would not
generally be considered an act in "trade or commerce" under the ACL. It's a personal
transaction, not a commercial one.
• Frequency and Regularity: If the vendor occasionally sells a personal residence, it's unlikely
that this would be considered "trade or commerce". However, if someone were to
frequently and regularly buy and sell real estate as a business or investment activity, they
might fall under the purview of the ACL as being engaged in trade or commerce.
 • Intention: The purpose behind the sale is also relevant. Selling a personal residence due to
relocation or personal reasons wouldn't typically fall under "trade or commerce". However,
regularly purchasing properties with the sole intent of selling them for profit could be seen
differently.
• In summary, an individual selling their personal residence, even with the help of a real estate
agent, is not typically engaged in "trade or commerce" as understood under the Australian
Consumer Law

3. Is the real estate agent who is selling the house on behalf of the vendor engages in trade or
commerce under Australian Consumer Law?

Yes, under the Australian Consumer Law (ACL), a real estate agent who is acting on behalf of a
vendor to sell a house is typically engaged in "trade or commerce."

Real estate agents provide services in a professional capacity and operate within a commercial
context. Their activities—including marketing, advising on property transactions, and facilitating
sales—are commercial in nature. Therefore, their actions fall within the definition of "trade or
commerce" as understood under the ACL.

Because of this, real estate agents are subject to various obligations under the ACL, including not
engaging in misleading or deceptive conduct. It's important for real estate agents to be aware of
their responsibilities under this legislation, as failing to adhere can result in significant penalties.

4. Does that mean the vendor can sue the real estate agent for potential misleading and deceptive
conduct?

Yes, under the Australian Consumer Law (ACL), if a real estate agent engages in misleading or
deceptive conduct or makes false representations in the course of trade or commerce, affected
parties, including the vendor, can potentially take legal action against the agent.

Specifically, sections 18 and 29 of the ACL address misleading or deceptive conduct and false or
misleading representations about goods or services, respectively. Even if an agent doesn't intend to
mislead or deceive, they can still be found liable under these provisions if their conduct is likely to
mislead or deceive.

For example, if a real estate agent makes unfounded claims about the potential sale price of a
property to secure a listing, and the vendor subsequently suffers a loss as a result of relying on those
claims, the vendor might have grounds to sue the agent for misleading or deceptive conduct.

However, proving misleading or deceptive conduct can be complex. Factors to consider include:

• Nature of the Conduct: Not every incorrect statement is necessarily misleading or deceptive.
The conduct must create a false impression.
• Reliance: The vendor would generally need to demonstrate that they relied on the
misleading or deceptive conduct and suffered loss or damage as a result.
• Intent: While intent to deceive can aggravate the situation, it's not a necessary element to
prove misleading or deceptive conduct under the ACL.
• Exclusions and Defenses: There might be certain defenses available to agents, such as if they
relied on information provided by others and took reasonable precautions to verify the
information.
5. Can the buyer of the house sue the vendor for misleading and deceptive conduct if that conduct
was from the real estate agent?

Yes, under the Australian Consumer Law (ACL), a buyer can potentially take action against both the
vendor and the real estate agent for misleading or deceptive conduct, depending on the
circumstances.

If a real estate agent, acting on behalf of the vendor, engages in misleading or deceptive conduct or
makes false representations, the buyer might have a claim. Even though it was the agent who acted
misleadingly, the vendor, as the principal, could potentially be held responsible for the agent's
actions. This principle is often referred to as "vicarious liability."

However, several factors would come into play:

• Agency Relationship: A critical factor is the nature of the relationship between the vendor
and the real estate agent. If the agent was clearly acting within the scope of their authority
when they engaged in the misleading conduct, the vendor might be held vicariously liable.
• Nature of the Conduct: The conduct in question must be likely to mislead or deceive. It's
essential to establish what representations were made, how they were misleading, and how
they influenced the buyer's decision to purchase.
• Reliance: The buyer would generally need to demonstrate that they relied upon the
misleading or deceptive conduct when deciding to purchase the property and that they
suffered loss or damage as a result.
• Defenses: The vendor might argue that the real estate agent was acting outside the scope of
their authority or that they, as the vendor, took all reasonable precautions to prevent the
misleading conduct.

It's important to note that while the buyer can take action against both the vendor and the agent,
the specifics of each case can vary widely. Factors such as contractual clauses, disclaimers, and the
specifics of the representations made can all influence the outcome.

6. If there is a direct sale between a vendor selling his house and a buyer who is not a
businessman, can the buyer sue the vendor under Australian Consumer Law for misleading and
deceptive conduct?

Yes, under the Australian Consumer Law (ACL), a buyer can potentially sue a vendor for misleading
or deceptive conduct, even in a direct sale without intermediaries like real estate agents, provided
that the conduct occurred in "trade or commerce."

The key issue here is the definition of "trade or commerce." Typically, the ACL is designed to regulate
business activities, not private transactions. If an individual is selling their personal residence in a
one-off sale, it may not be considered an act in "trade or commerce." On the other hand, if the
vendor regularly sells properties or does so in a business-like manner, the sale might fall under the
scope of the ACL.

For a buyer to have a potential claim under the ACL:

• Trade or Commerce: The misleading or deceptive conduct must have occurred in the course
of "trade or commerce." This doesn't necessarily mean that one of the parties has to be a
business, but the transaction should have a business or commercial character to it.
 • Misleading or Deceptive Conduct: The vendor must have engaged in conduct that is likely to
mislead or deceive. This could include making false statements about the property,
concealing significant defects, or providing misleading documentation.
• Reliance and Loss: The buyer must have relied on the misleading or deceptive conduct and
suffered some form of loss or damage as a result.

Given the "trade or commerce" requirement, many direct sales between private individuals (where
neither party operates as a business or in a business-like manner) may fall outside the scope of the
ACL's provisions regarding misleading and deceptive conduct. However, other legal avenues might
be available to a buyer in such cases, such as misrepresentation under contract law.

If a buyer believes they have been misled or deceived in a property transaction, it's essential to seek
advice from a legal professional familiar with Australian consumer and property law to understand
the best course of action.

7. When then can the vendor selling his house not get sued for misleading and deceptive conduct
under Australian Consumer Law?

In the context of the Australian Consumer Law (ACL), a vendor selling their house would typically not
be subject to claims for misleading or deceptive conduct when:

• Outside of "Trade or Commerce": The ACL applies to activities in "trade or commerce". If the
sale of the house is a private transaction, such as a one-off sale of a personal residence, and
not done in a business-like manner or as part of a business activity, it might not be
considered to be in "trade or commerce." Therefore, the misleading and deceptive conduct
provisions of the ACL wouldn't apply.
• Truthful and Accurate Representations: If the vendor provides accurate information about
the property, doesn't conceal significant defects, and makes no false claims or
representations, then they are not engaging in misleading or deceptive conduct.
• No Reliance by the Buyer: Even if the vendor made a misleading statement, if the buyer
didn't rely on it to make the purchase decision or didn't suffer any loss or damage from it,
the buyer might not have grounds for a claim.
• Disclaimers and Contractual Clauses: Sometimes, contracts might include clauses or
disclaimers meant to protect the seller from certain claims. However, the enforceability of
these clauses can depend on various factors, including how they're drafted and presented.
• Passive Non-Disclosure: Simply not revealing something isn't always the same as actively
concealing it. If a vendor isn't asked and doesn't voluntarily disclose certain information, it
might not always be considered misleading or deceptive conduct. However, this can be a
gray area, and active concealment or failure to disclose known major defects can be
problematic.

It's worth noting that while a vendor might be protected from being sued under the ACL in certain
circumstances, there might be other laws or contractual obligations that they need to consider. For
instance, state and territory laws might impose specific disclosure requirements on vendors.
8. If a vendor has two houses and puts both his houses on sale. Under Australian Consumer Law,
can the vendor be sued for misleading and deceptive conduct under s18 as being ' in trade or
commerce'?

Under the Australian Consumer Law (ACL), s18 prohibits misleading or deceptive conduct "in trade
or commerce." The key term here is "in trade or commerce." Generally, for a conduct to be "in trade
or commerce," it must have a commercial or business character. Merely selling a personal item or
even multiple items does not necessarily equate to acting "in trade or commerce."

• In the scenario you provided, where a vendor has two houses and puts both on sale, the
critical factors would likely include:
• Nature and Frequency: While selling two houses might be more than a one-off transaction, it
still doesn't necessarily mean that it's "in trade or commerce." If the vendor is selling
personal residences or properties they've lived in, it might still be considered a private sale.
However, if the vendor frequently buys and sells houses with the primary intention of
making a profit, that could be seen as a commercial activity.
• Intention: If the vendor's primary intention is to make a profit from buying and selling
houses, and they conduct these sales in a business-like manner, then they might be acting
"in trade or commerce."
• Presentation to the Public: How the vendor presents the sales to the public might also be
relevant. If the vendor markets the houses in a business-like manner or establishes a
business front (e.g., a company or trading name) to sell the houses, it might be indicative of
commercial activity.
• Regular Activity: If the vendor makes a habit or regular practice of selling properties, it might
lean more towards being in "trade or commerce," even if the number of properties at one
time is small.

It's a nuanced area, and the courts would look at the entirety of the circumstances to determine if
the activity is "in trade or commerce." If a person is merely selling properties they've owned and
used for personal purposes, even if there are two at the same time, it might not be sufficient to
deem it as acting in "trade or commerce."

9. Would that then be considered that the vendor is acting with respect to trade or commerce
when he put his two houses on sale?

Whether a vendor selling two houses is acting "in trade or commerce" under the Australian
Consumer Law (ACL) depends on the entirety of the circumstances surrounding the sale. Simply
selling two houses does not automatically qualify as acting in trade or commerce.

Here are some scenarios and factors to consider:

• Personal Reasons for Sale: If the vendor is selling two houses for personal reasons, such as
financial hardship, downsizing, or a change in family circumstances, it's less likely to be
considered "in trade or commerce." Such sales might be seen as personal, even if there are
two properties involved.
• Frequency of Sales: If the vendor occasionally sells properties and there's no pattern of
frequent buying and selling, it might not be considered a commercial activity. However, if
the vendor has a history of frequently buying and selling properties, even in small quantities,
they could be seen as engaging in trade or commerce.
 • Intention and Nature of Ownership: If the vendor owned the properties for personal use
(e.g., lived in them, used them as personal holiday homes) and is now selling them, it's less
likely to be seen as a commercial activity. But if the properties were bought with the primary
intention of selling them for a profit, it leans more toward trade or commerce.
• Presentation and Marketing: How the vendor presents and markets the properties can be
indicative. If the properties are marketed professionally, especially if the vendor employs
business-like strategies or branding, it might hint at commercial activity.
• Scale and Organization: Even if the vendor doesn't frequently sell properties, if there's a
significant level of organization or system to the sales (e.g., setting up an office, hiring staff),
it might be seen as trade or commerce.

In summary, simply selling two houses doesn't automatically mean the vendor is acting in trade or
commerce under the ACL. The context and circumstances surrounding the sales are pivotal.

10. Could the vendor be considered as conducting in respect to trade and commerce under
Australian Consumer Law if he is not conducting ' in trade or commerce'?

The distinction between conducting "in respect to trade or commerce" and conducting "in trade or
commerce" is subtle but important.

Under the Australian Consumer Law (ACL), certain provisions specifically refer to conduct "in trade
or commerce." This usually means activities carried out in the course of a business or in a business-
like manner. It's a term of limitation, ensuring that the ACL doesn't capture purely private or
domestic transactions.

However, the term "in respect to trade or commerce" is broader and can potentially capture
activities that are related to or have a connection with trade or commerce, even if they're not
directly commercial themselves.

For a vendor selling a house:

• If they're selling it as part of a business operation or in a business-like manner (e.g., they are
a property developer or regularly flip houses for profit), they are likely acting "in trade or
commerce."
• If they're selling a personal residence in a one-off sale, they're probably not acting "in trade
or commerce." However, if there's some connection or relation to a commercial activity—
say, the house was occasionally used for commercial purposes or there's some other
commercial linkage—they might be acting "in respect to trade or commerce."

It's a nuanced area, and the specific wording and interpretation can vary depending on the provision
of the ACL in question and relevant case law. Whether or not a vendor's actions are considered "in
trade or commerce" or "in respect to trade or commerce" would likely require a detailed
examination of the facts and circumstances, and possibly a legal determination.
11. Under Australian Consumer Law, with respect to trade or commerce is interpreted as falling
outside s18 of the Australian Consumer Law. Why is that?

Section 18 of the Australian Consumer Law (ACL) prohibits misleading or deceptive conduct "in trade
or commerce." The wording "in trade or commerce" is specifically used to limit the application of
this provision to activities with a commercial or business character, excluding purely private or
domestic transactions.

The phrase "with respect to trade or commerce" does not appear in s18 of the ACL. The use of the
specific wording "in trade or commerce" in s18 is deliberate to ensure the provision has a clear
scope.

The reason for this limitation is both practical and policy-based:

• Clarity and Precision: By specifying that the prohibition against misleading or deceptive
conduct applies to activities "in trade or commerce," the legislature intended to provide
clarity about the situations the provision covers. This helps businesses and consumers
understand their rights and obligations.
• Avoiding Overreach: Without such a limitation, s18 could potentially apply to a wide range
of non-commercial activities. For example, a person selling a single personal item in a one-
off sale could be subject to the same provisions as a large corporation. By limiting s18 to
activities "in trade or commerce," the ACL focuses on commercial transactions where there's
a greater expectation of professional conduct and where consumers might need protection.
• Consistent Interpretation: Courts have interpreted the phrase "in trade or commerce" in
various Australian statutes over the years, providing a body of case law that gives content
and meaning to the phrase. By using this established phrase, the legislature can draw on
that interpretive history.
• Focus on Consumer Protection: The ACL's primary objective is to protect consumers in their
dealings with businesses. By concentrating on misleading or deceptive conduct "in trade or
commerce," the ACL targets situations where consumers are most likely to need protection.
• It's worth noting that while s18 is limited to conduct "in trade or commerce," other
provisions of the ACL, and other legislation, might apply to broader categories of conduct.