Classics for a Cause Pty Ltd v Grays Ecommerce Group Ltd [2023] NSWSC 967

Supreme Court New South Wales

Medium Neutral Citation: Classics for a Cause Pty Ltd v Grays Ecommerce Group Ltd [2023] NSWSC 967 Hearing dates: 1, 2, 5, 6, 8 June 2023 Date of orders: 18 August 2023 Decision date: 18 August 2023 Jurisdiction: Equity - Commercial List Before: Rees J Decision: Summons and cross claim dismissed. Catchwords: PERSONAL PROPERTY — sale of goods — auctions — online auction of classic car — vendor and bidders agree to auctioneer's User Agreement — online auction closes early due to technological error — plaintiff made last recorded bid at $464,800, being less than it expected to pay and less than the second defendant was trying to bid — plaintiff receives automatically generated email "YOU HAVE WON" — technological error immediately detected – plaintiff promptly that auctioneer wants to re-open auction – irate plaintiff threatens to sue – auctioneer vacillates, initially minded to take path of least resistance and proceed with sale to plaintiff — plaintiff receives automatically generated invoice and rushes to pay — after further consideration, auctioneer cancels auction under User Agreement and holds second auction — second defendant wins auction for $860,100 — plaintiff seeks $1.6M to $2.3M damages. AUCTIONS – whether contract of sale between vendor and purchaser included terms of User Agreement – principles at [120]-[126] – Smythe v Thomas followed — User Agreement created a framework for auction in which bidders and vendor were willing participants — User Agreement incorporated into sale of contract between vendor and purchaser — whether exercise of auctioneer's power to re-open or cancel auction resulted in cancellation of contract of sale – construction of User Agreement – customers agreed that, if the auctioneer exercised its powers, then the contract of sale was null and void. CONTRACTS — breach of contract — auctioneer must be "acting reasonably" when taking action after technological error — auctioneer vacillated — initial inaction did not preclude subsequent action — question is whether auctioneer was "acting reasonably" when it did act — action reasonable and clearly correct — no breach of contract — plaintiff not entitled to damages. RELEASE – auctioneer released from claims "you now or may have" – whether applied to claims arising after conclusion of online auction – auctioneer released from claims which were "connected with, arise out of, relate to or are incidental to" the use of the online auction platform – release applied to claims arising from action taken by auctioneer as a result of technological errors. WORDS AND PHRASES – "cancel" – "acting reasonably" – "in connection with" – "arise out of" – "relating to" – "incidental to". MORTGAGES AND SECURITIES — plaintiff registered security interest over car — Personal Property Securities Act 2009 (Cth) — "security interest" — whether plaintiff had reasonable belief that they were a secured party, s 151 — no consensual transaction by which the auctioneer gave the plaintiff an interest in the car to secure transfer of title or delivery. Legislation Cited: Sale of Goods Act 1923 (NSW), ss 57, 60(2) Personal Property Securities Act 2009 (Cth), ss 12(1), 151, 271 Cases Cited: Chelmsford Auctions v Poole [1973] 1 QB 542 Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2014] VSCA 326 Franklin v Manufacturers Mutual Insurance Ltd (1936) 36 SR (NSW) 76 Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217 Handbury v Nolan (1977) 13 ALR 339 Moratic Pty Ltd v Gordon [2007] NSWSC 5 O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 Penfolds Wines Pty Ltd v Elliott [1946] HCA 46; (1946) 74 CLR 204 Phillips v Butler [1945] 1 Ch 358 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Quintano v B W Rose Pty Ltd [2008] NSWSC 793 Samways v Workcover Queensland [2010] QSC 128 Smythe v Thomas [2007] NSWSC 844 Sugar Australia Pty Ltd v Lendlease Services Pty Ltd [2015] VSCA 98 The Wilderness Society Inc v Turnbull, Minister for the Environment and Water Resources [2007] FCAFC 175 Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602 Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Wright v Madden [1992] 1 Qd R 343 Texts Cited: J W Carter Contract Law in Australia (LexisNexis Butterworths, 7th Edition, 2018) Halsbury's Laws of Australia Macquarie Dictionary Category: Principal judgment Parties: Classics for a Cause Pty Ltd (Plaintiff) Grays Ecommerce Group Ltd (First Defendant) Xclusive Tech Pty Ltd trading as LMCT Plus (Second Defendant) Representation: Counsel: Mr JW Peden KC (Plaintiff) Mr RM Higgins (First Defendant) Mr J Levine (Second Defendant)