In the case, a company on-selling copper sued the company it was selling to for misleading or deceptive conduct, in breach of the Trade Practices Act. The on-selling company claimed that the purchasing company had misled it by failing to inform it in a phone conversation, that after inspection of the copper, the purchaser believed the copper had probably been stolen, and that the on-seller would probably not be paid.

In an appeal, the on-seller was awarded over a quarter of a million dollars.

The effect of the Trade Practices Act on this transaction was dramatic. In the normal course of events, the on-seller could expect to recover nothing from the purchaser because it could give no title to the goods delivered - its only recourse would have been to seek the funds from its original supplier.

The result of this case hinged on the long term commercial relationship between the parties. If there is a long term relationship involving trust and certain procedures being adopted, the Court may well imply higher duties of disclosure by one party to the other. In this case, it meant a complete reversal of the common law position.

Reproduced from In Touch With The Law, published by the Law Society of NSW