Deceit The Lie of the Law



3.1 An actionable deceit depends on an untrue representation. The critical element of the tort is its dishonesty. This much is uncontentious. A number of questions do, however, arise. Are all knowingly untrue representations punishable in tort? Is it really the case that a positive representation is a requirement of an actionable deceit? What if a non-disclosure is motivated by fraud? What is meant by a representation being untrue? Must the representation be material for it to be a deceit?


Express and implied representations

3.2 The representation may be made with words or by conduct.1 The representation may be expressed orally or in writing, or both.2 Accordingly, a shipowner represents by the issue of a bill of lading that the cargo described in the bill has been shipped on a particular date, which is an express representation.3 A representation may also be made by conduct. Thus, a statement of the truth might be accompanied by a smile, a wink or a nod suggesting that what is being said is not in fact the truth. Although many representations are made verbally, it is possible to make a representation purely by conduct. In Meluish v. Milton,4 it was held that if a woman underwent a marriage ceremony, she was representing to the man she was marrying that she was capable of becoming his lawful wife. In Gordon v. Selico Co Ltd,5 the lessor engaged a managing agent who in turn employed an independent contractor who covered up areas of dry rot infestation at a property which was to be leased to the plaintiffs. The trial judge held that the “concealment of dry rot … was a knowingly false representation that [the property] did not suffer from dry rot … ”. Furthermore, a representation may be made not by the person guilty of a deceit, but by a third party, which is procured or manifestly adopted by the defendant.6 3.3 The representation is the product of everything the defendant says and does to communicate to the claimant a particular proposition, including capitalising on the representee’s expectations. For example, in Denton v. The Great Northern Railway Company,7 the railway company printed a railway timetable, which when printed was accurate, but became inaccurate, and the company continued to issue them knowing that they were inaccurate; the railway company was held liable in deceit not for the original printing, but the subsequent issue and circulation of the timetable. In Aaron’s Reefs Ltd v. Twiss,8 Lord Halsbury, LC said that whether a fraudulent and false representation has been made is a function of viewing the representation made in its entire context, which for the purposes of a document, such as a prospectus, will involve reviewing the entire document:

“I think one is entitled to look at the whole document and see what it means taken together … It is said there is no specific allegation of fact which is proved to be false. Again I protest, as I have said, against that being the true test. I should say, taking the whole thing together, was there false representation? I do not care by what means it is conveyed—by what trick or device or ambiguous language: all those are expedients by which fraudulent people seem to think they can escape from the real substance of the transaction. If by a number of statements you intentionally give a false impression and induce a person to act upon it, it is not the less false although if one takes each statement by itself there may be a difficulty in shewing that any specific statement is untrue … ”

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