Misrepresentation - Summary Australian Torts Law PDF

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Misrep Notes ...

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5.2

Misrepresentation

Reading: Stickley, Australian Torts Law, Chapter 19 To be actionable, a misrepresentation must consist of words, gestures or conduct, be false, and relate to a past or present fact. 5.2.1 Negligent misrepresentation Actions for negligent misrepresentation are determined in accordance with the principles for a novel duty for pure economic loss. As with all actions in negligence, plaintiffs must establish a duty of care, breach of that duty, and causation of damage. For the duty to be made out, there must be some kind of ‘special relationship’ between the plaintiff and the defendant, based on an assumption of responsibility by the speaker and reasonable reliance by the recipient. Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] 2 All ER 575 

P was a firm of advertising agents who consulted D about whether one of its customers was credit worthy because it was contemplating entering into a contract with the customer.

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D said that Easipower was, "considered good for its ordinary business engagements".

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Disclaimer from D made clear that the advice was issued without responsibility on part of the bank

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Easipower went into liquidation and Hedley Byrne lost £17,000 on contracts. P sued for negligence, claiming that the information was given negligently and was misleading. D argued there was no duty of care owed regarding the statements, and in any case liability was excluded.

Judgment 

The court found that the relationship between the parties was "sufficiently proximate" as to create a duty of care.

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It was reasonable for them to have known that the information that they had given would likely have been relied upon for entering into a contract of some sort.

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This would give rise, the court said, to a "special relationship", in which the defendant would have to take sufficient care in giving advice to avoid being liable for negligence. However, on the facts, the disclaimer was found to be sufficient enough to discharge any duty created by Heller's actions.

Mutual Life & Citizens' Assurance Co Ltd and another v Evatt [1971] 1 All ER 150 *Tepko Pty Ltd v Water Board (2001) 206 CLR 1 The nature of the advicethe more specific the advice, the more someone will rely on it. Tepko repeated approached Water Board for an estimate regarding the connection of the land with water. Water Board was reluctant to give estimate Tepko decided not to connect land as the Water Board’s estimate was too high. It later found that the actual cost of connection would have been lower. It sued the Water Board for the loss of profits due to the wrong advice.  Person with special skills Court held: The circumstances of the case made it unreasonable to posit a duty upon the board in respect of the use Mr Neal made of the estimate provided in the letter of November 1985 in his dealings with the bank. 5.2.2 Fraudulent misrepresentation An action in deceit requires a plaintiff to establish: •

A misrepresentation of fact

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That the representor had knowledge of the falsity (scienter)

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The representor intended reliance

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Reliance

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Damage

Magill v Magill (2006) 226 CLR 551 The Magills married in April 1988 and separated in November 1992, divorcing in 1998. They had two sons and a daughter between April 1989 and November 1991. After separation Mr Magill paid child support for all three children. After each birth, Ms Magill gave him birth registration forms to sign with him named as the father. In 1995, Mr Magill learned that Ms Magill at least suspected that her second son was not her husband’s child. In April 2000, DNA testing established that Mr Magill had fathered neither this boy nor the girl. Child support payments were adjusted to allow for past overpayments and an extinguishment of arrears. In January 2001, Mr Magill commenced proceedings against his ex-wife in the Victorian County Court for deceit. He claimed damages for personal injury in the form of anxiety and depression resulting from Ms Magill’s fraudulent misrepresentations Held: The Court unanimously dismissed the appeal. It rejected Ms Magill’s contention that section 119 of the Family Law Act, which permits spouses to sue each other, and section 120, which abolishes certain actions such as damages for adultery, exclude any action for deceit. However, three members of the Court held that no action for deceit could lie for representations about paternity made between spouses, and three members of the Court held that, while there could be circumstances in which such an action might succeed, they were exceptional and did not cover Mr Magill’s case. Wood v Balfour [2011] NSWCA 382 5.2.3 Statutory actions Statutory actions for misleading or deceptive conduct have now essentially taken over from the common law torts of misrepresentation. The Australian Consumer Law (Cth) s 18 provides: 

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

This action was covered in Foundations of Private Law and will not be repeated in detail in this Unit.  ...