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Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592

Facts: There was a sale of a residential property by a real estate agent from Lachlan Elder Realty (respondent) to a bidder at an auction to Butcher (appellant). Prior to the auction, the respondent provided prospective buyers with a brochure that included a survey diagram inaccurately showing that a swimming pool was entirely within the property. The brochure stated that the accuracy of the information was not guaranteed and that prospective buyers should rely on their own inquiries. Following the auction, the buyer enters a contract to purchase the property. Later, the buyer discovered that the swimming pool extended beyond the mean high water mark onto reclaimed land and was not entirely within the boundary of the property. The appellant refused to complete the contract and the vendor treated the deposit as forfeited. The appellant sought damages against the respondent for misleading or deceptive conduct.


Issue: Does it fall within “trade and commerce” pursuant to s 52, Trade Practices Act 1974 (Cth)?


Held: A private sale itself does not fall within “trade or commerce”, however, because it involves real estate agents, then it can be said to be engaging in business.


Issue: Had the real estate agency engaged in misleading or deceptive conduct?


Held: No, it had not given the nature of the parties (small real estate agent vs. sophisticated property buyers) and the character of the transaction.


Issue: What is the effect of the disclaimers?


Held: The two disclaimers were held to protect an estate agent from liability for a statement in a brochure concerning the boundary of a property. This was because the agent ‘did no more than communicate what the vendor was representing, without adopting or endorsing it’.

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