Deceit and Paternity fraud
Deceit and Paternity fraud: hence the two shall never meet
By Benjamin Fitzmaurice[1], Barrister-at-La
The tort of deceit provides a legal remedy for harm suffered in consequence of dishonesty.[2] In 1789, the action for deceit was extended to include parties other than those negotiating upon a contract.[3] In Smith v Chadwick[4], Lord Selbourne said:
...I conceive that in an action of deceit...it is the duty of the plaintiff to establish two things; first, actual fraud, which is to be judged of by the nature and character of the representations made, considered with reference to the object for which they were made, the knowledge or means of knowledge of the person making them, and the intention which the law justly imputes to every man to produce those consequences which are the natural result of his acts: and, secondly, he must establish that his fraud was an inducing cause to the contract; for which purpose it must be material, and it must have produced in his mind an erroneous belief, influencing his conduct.[5]
Later in Derry v Peek[6], Lord Herschell said of the tort of deceit:
First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made.[7]
Elements of the action
In Magill v Magill[8], Gummow, Kirby and Crennan JJ set out the five elements required to establish the modern tort of deceit. The elements of deceit are that:
- 1. the defendant made a false representation[9];
- 2. the defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not[10];
- 3. the defendant made the representation with the intention that it be relied upon by the plaintiff[11];
- 4. the plaintiff acted in reliance on the false representation[12]; and
- 5. the plaintiff suffered damage which was caused by reliance on the false representation[13].
The measure of damages in deceit will be based on the actual damage directly flowing from the fraudulent inducement.[14] Lord Atkin in Clark v Urquhart said[15]:
I find it difficult to suppose that there is any difference in the measure of damages in an action of deceit depending upon the nature of the transaction into which the plaintiff is fraudulently induced to enter. Whether he buys shares or buys sugar, whether he subscribes for shares, or agrees to enter into a partnership, or in any other way alters his position to his detriment, in principle, the measure of damages should be the same, and whether estimated by a jury or a judge. I should have thought it would be based on the actual damage directly flowing from the fraudulent inducement.
In an action for deceit, a plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage he or she has suffered in consequence of altering his or her position under the inducement of the fraudulent misrepresentati
Deceit and representations in marriage
Private matters of adult sexual conduct and a false representation of paternity during a marriage will not give rise to the tort of deceit.[19] In Magill v Magill[20] the couple were married in 1988. Three children were born during the marriage. The husband and wife separated in November 1992. Subsequent to the separation the wife sought child support payments from the husband under the Child Support (Assessment) Act 1989 (Cth). In 1995 the husband was informed by the wife that she had engaged in an extra-marital relationship without contraception during the co-habitation of the couple prior to the separation. The marriage dissolved in 1998. In 2000 DNA testing disclosed that the husband was not the biological father of the second or third child born during the marriage. Child support arrangements were adjusted accordingly following the results of the DNA testing.
In 2001 the husband commenced an action in deceit alleging false representations were made concerning the paternity of the second and third children born during the marriage. The husband was awarded $70,000 in damages by the County Court of Victoria. The wife successfully appealed this decision to the Victorian Court of Appeal.[21] All members of the Court of Appeal (Ormiston, Callaway and Eames JJA) assumed that the claim in deceit had been brought appropriately.[22] Eames JA, with whom Ormiston JA agreed, concluded that there was no evidence that the husband relied upon the representation made.[23] Callaway JA held that there was no evidence on which the judge could have found that the wife intended the husband to rely on.[24] Special leave was granted by the High Court of Australia (per Gummow, Kirby and Hayne JJ) to appeal from the decision of the Victorian Court of Appeal. The subsequent appeal to the High Court of Australia was heard by Gleeson CJ, Kirby, Hayne, Gummow, Heydon and Crennan JJ. The appeal to the High Court of Australia was unanimously dismissed.
In his judgment, Gleeson CJ concluded:
The matters which an individual party to a marriage might properly regard as intimate and private are not limited to questions of paternity of children of the marriage, or sexual fidelity, or to events that occurred during the marriage. Finding a duty to disclose the truth about some matters would be inconsistent with the ethical context in which such a judgment must be made. Furthermore, the problem goes beyond questions of disclosure. Imposing legal consequences upon the behaviour in such a relationship also may be inconsistent with the subjective contemplation of the parties and with public policy as reflected in legislation...
The application of the common law of deceit to marital relations is not impossible, and there are no rigidly defined zones of exclusion, but attempts to construct legal rights and obligations in an unsuitable environment should fail... [25]
In the joint judgment of Gummow, Kirby and Crennan JJ, their Honours concluded:
Private matters of adult sexual conduct and a false representation of paternity during marriage are not amenable to assessment by the established rules and elements of deceit. In terms of principle, this would appear to apply to other relationships such as "long term and publicly declared relationships short of marriage"[26] although that question does not fall to be determined in this case. In the absence of a clear need for the common law to impose a legal or equitable duty of disclosure of such matters they should be left, as they are now, to the morality of the spouses, encouraged by the legislature's support for truthfulness about paternity in the various provisions of the Family Law Act...[27]
However, Gummow, Kirby and Crennan JJ did recognise:
- 1. a duty of care on one spouse to disclose to the other any matters which will cause physical injury, such as one spouse having a sexually transmitted disease;[28]
- 2. a false representation, for example as to being unmarried, can vitiate the consent of the other party to a marriage;[29] and
- 3. a false representation by one spouse which induces the other to take some commercial or contractual step resulting in damage can attract the assistance of the tort of deceit.[30]
In his judgment, Hayne J concluded:
Because the relationship of trust and confidence, upon which a marriage is and must remain founded, extends well beyond matters of sexual fidelity and questions about the paternity of children, there is an evident difficulty in stating the principle that should be applied in the present case in a way that is confined to representations about particular subject matters. It is the nature of the relationship between husband and wife that leads to the conclusion that the tort of deceit should find no application in the present case. And that is why the relevant principle should be identified, not by reference to the subject matter of the particular misrepresentati
In his judgment, Heydon J concluded:
Deceit actions are an appropriate means of remedying commercial fraud, but not paternity fraud. The tort of deceit is limited to mendacious attempts to obtain a commercial advantage. It cannot be transposed to marital relationships, where a wife who has a doubt about paternity of her child may be faced with a difficult choice between lying to save her marriage and telling the truth at the risk of what the wife in argument called, using a phrase employed by the trial judge, "enormous uproar"[32] Further, the law is incapable of remedying the suffering caused by betrayal.[33]
His Honour also referred to a statement in the decision of Douglas R v Suzanne M[34]:
The judiciary should not attempt to regulate all aspects of the human condition. Relationships may take varied forms and beget complications and entanglements which defy reason. It is doubtful whether the court could fashion an order which would effectively resolve all the issues and make the parties whole.
The statements of the High Court of Australia in Magill v Magill provide a conclusive view that the tort of deceit is not amenable to cases involving the allegation of paternity fraud. It seems clear that such matters will be left to the moral code, religious or otherwise, of the relevant parties. Nevertheless, a husband may have recourse to the family law regime in Australia by seeking an order for the repayment pf any moneys wrongly paid for child support[35], or child maintenance[36], in reliance upon false representations as to paternity.
© Copyright Benjamin Fitzmaurice 2007
Every effort is taken to ensure that the information contained in this article is accurate at the time of publication. The content of this article is not legal advice and should not be relied upon as legal advice. The content is designed as a guide only. If you require legal advice please contact a legal practitioner accordingly.
[1] Benjamin is a Barrister practising at the Victorian Bar. Benjamin can be contacted at fitzmaurice@mel
[2] Magill v Magill (2006) 226 CLR 551 at 561 per Gleeson CJ; 231 ALR 237.
[3] Pasley v Freeman (1789) 3 TR 51; 100 ER 450.
[4] (1884) 9 App Cas 187.
[5] (1884) 9 App Cas 187 at 190. See also Magill v Magill [2005] Aust Torts Reports 81-763 at 67,248 [7] per Callaway and Eames JJA (Vic Ct of Appeal); (2005) 33 Fam LR 193 at 197; Magill v Magill (2006) 226 CLR 551 at 587 per Gummow, Kirby and Crennan JJ.
[6] (1889) 14 App Cas 337.
[7] (1889) 14 App Cas 337 at 374.
[8] Magill v Magill (2006) 226 CLR 551 at 587 per Gummow, Kirby and Crennan JJ.
[9] Edgington v Fitzmaurice (1885) 29 Ch D 459 at 483 per Bowen LJ.
[10] Derry v Peek (1889) 14 App Cas 337 at 374 per Lord Herschell.
[11] Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at 211 per Viscount Maugham.
[12] Redgrave v Hurd (1881) 20 Ch D 1 at 21 per Jessel MR; Edgington v Fitzmaurice (1885) 29 Ch D 459 at 483 per Bowen LJ; Arnison v Smith (1889) 41 Ch D 348 at 369 per Lord Halsbury LC.
[13] Pasley v Freeman (1789) 3 TR 51 at 56; 100 ER 450 at 453; Smith v Chadwick (1884) 9 App Cas 187 at 196 per Lord Blackburn; Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at 211 per Viscount Maugham.
[14] Clark v Urquhart (1930) AC 28.
[15] Clark v Urquhart (1930) AC 28 at 67-68.
[16] Toteff v Antonas (1952) 87 CLR 647 at 650; Doyle v Olby [1969] 2 QB 158 at 167 per Lord Denning (CA); Gould v Vaggelas (1984) 157 CLR 215 at 220; Smith New Court Securities Ltd v Scrimgeour Vickers [1997] AC 254; Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; National Australia Bank Ltd v Nemur Varity Pty Ltd (2002) 4 VR 252 at 276 per Batt JA (CA); Jeans v Cleary [2006] NSWCA 9 at [32]-[34]; Jeans v Cleary [2006] NSWSC 647 at [25].
[17] De Vries v Wightman [1961] Qd. R. 196 (High Ct of Australia) per Dixon CJ, McTiernan, Kitto, Taylor and Windeyer JJ.
[18] C-Shirt Pty Ltd v Barnett Marketing and Management Pty Ltd & Anor (1996) 37 IPR 315 at 342.
[19] Magill v Magill (2006) 226 CLR 551.
[20] (2006) 226 CLR 551.
[21] Magill v Magill [2005] Aust Torts Reports 81-763 at 67,248 [7] per Callaway and Eames JJA (Vic Ct of Appeal); (2005) 33 Fam LR 193 at 197.
[22] Magill v Magill (2006) 226 CLR 551 at 552.
[23] Magill v Magill (2006) 226 CLR 551 at 552.
[24] Magill v Magill (2006) 226 CLR 551 at 552.
[25] Magill v Magill (2006) 226 CLR 551 at 571 per Gleeson CJ.
[26] Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at 404 [22] per Gaudron, McHugh, Gummow and Hayne JJ; at 432 [76] per Kirby J.
[27] Magill v Magill (2006) 226 CLR 551 at 594 [133] per Gummow, Kirby and Crennan JJ.
[28] Kerr, On the Law of Fraud and Mistake, 7th ed (1952), p47; Cartwright, Misrepresentati
[29] Marriage Act 1961 (Cth), as amended, s 23; Magill v Magill (2006) 226 CLR 551 at 593 [129] per Gummow, Kirby and Crennan JJ.
[30] In Ennis v Butterly [1996] 1 IR 426 an action in deceit between de facto spouses in these circumstances was allowed to proceed to trial; see also Smythe v Reardon [1949] St R Qd 74; Magill v Magill (2006) 226 CLR 551 at 593 [129] per Gummow, Kirby and Crennan JJ.
[31] Magill v Magill (2006) 226 CLR 551 at 600 [160] per Hayne J.
[32] Magill v Magill (2006) 226 CLR 551 at 614 [202] per Heydon J.
[33] Richard P v Gerald B (1988) 249 Cal Rptr 246 at 249 (Cal App 1 District).
[34] (1985) 487 NYS (2d) 244 at 245-246 (SCNY).
[35] Child Support (Assessment) Act 1989 (Cth), s 143(1).
[36] Family Law Act 1975 (Cth), s 66X.