eBay Wirraway case

Earlier in August, the New South Wales Supreme Court handed down its long-awaited judgment in the eBay Wirraway case -- more formally known as Smythe v Thomas [2007] NSWSC 844.  That judgment pre-dated the establishment of this blog, but it's quite a significant case -- at least so far as eBay buyers and sellers in Australia are concerned -- so it's worth a recap.

The facts, briefly stated, are that Thomas listed a rare and valuable Wirraway aircraft on eBay, with an auction duration of 10 days and a minimum price of $150k.  Smythe, after a phone conversation with Thomas (the substance of which was disputed) placed a bid for $150k and, there being no other bidders, "won" the auction.

[I'd rather buy a T-38, or a nice Embraer bizjet, but I digress...]

Thomas was unhappy because he was hoping to obtain $250k for the aircraft.  He refused to complete the transaction, and Smythe sued.  Thomas' defence was:

1. There was a contract (the eBay User Agreement) between Thomas and eBay, and between Smythe and eBay, but there was no contract or agreement between Thomas and Smythe;
2. The eBay listing was analogous to a classified advertisement -- i.e. an invitation to treat;
3. Even if there was offer and acceptance, the time for payment was to be negotiated and the agreement was therefore incomplete;
4. Smythe waived his right to bid on the auction, based on the content of the disputed phone call.

Rein AJ referred to a number of overseas cases in which online auctions have been discussed, the relevant provisions of the Sale of Goods Act 1923 (NSW), rejected each of Thomas' defences, and concluded that there was a valid and enforceable contract for the sale of the aircraft, and that it should be specifically performed.

Despite the fact that eBay were downplaying the potential effect on their business model and online commerce via eBay in Australia generally, it would seem that if Thomas had succeeded on any of his first three defences, it would have thrown a serious spanner into eBay's collective works.  It's reassuring to see that this didn't happen.