AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
1. Fraud Claims 1.1 General Characteristics of Fraud Claims In Australia, fraud is criminalised at a federal and state level, by: • Parts 7.3–7.7 of the Criminal Code Act 1995 (Cth) (the “Criminal Code”); and • the provisions of the criminal legislation in each state (Criminal Code 2002 (ACT) Part 3.3; Crimes Act 1900 (NSW) Part 4AA; Criminal Code Act 1913 (WA) Section 409; Criminal Code Act 1899 (Qld) Section 408C; Criminal Code Act 1924 (Tas) Sec - tion 253A; Criminal Code Act 1983 (NT) Section 43AGA and 43AH-L; Criminal Law Consolidation Act 1935 (SA) Section 139; Crimes Act 1958 (Vic) Sections 81–82). There are many words used to define or capture the act of “fraud” in Australian law, including “dishonesty”, “deception” or “moral turpitude”. Fraud prosecutions are both various and flexible in assisting victims. The main offences that arise in rela - tion to fraud are: • obtaining property by deception (Section 134.1 (1) of the Criminal Code); • obtaining a financial advantage by deception (Sec - tion 134.2 (1) of the Criminal Code); • general dishonesty – obtaining a gain (Section 135.1 (1) of the Criminal Code); • general dishonesty – causing a loss (Section 135.1 (3) of the Criminal Code); and • general dishonesty – causing a loss to another (Section 135.1 (5) of the Criminal Code). Notably, in Nadinic v Drinkwater (2017) 94 NSWLR 518, Leeming JA summarised key concepts relevant to a claim of fraud in common law and in equity, as follows (at (22)): “For present purposes, it will suffice to distinguish the two senses in which ‘fraud’ is used in civil litigation which correspond to different meanings at law and in equity. The difference turns on the state of mind of the person said to have committed fraud. At common law, ‘fraud is proved when it is shown 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’” – Derry v Peek (1889) 14 App Cas 337 at 374. The contrast with equity was explained by Viscount Haldane LC in Nocton v Lord Ashburton [1914] AC 932 at 953–954: “[i]n Chancery the term ‘fraud’ thus came to be used to describe what fell short of deceit, but imported breach of a duty to which equity had attached its sanction.” His Lordship emphasised that a person who misconceived the extent of the obliga - tion which a court of equity imposed upon him or her, “however innocently because of his ignorance”, was taken to have violated an obligation which he was taken by the court to have known, and with the result that the conduct was labelled fraudulent. He said of fraud in this sense at 954 that “what it really means in this connection is, not moral fraud in the ordinary sense, but breach of the sort of obligation which is enforced by a Court that from the beginning regarded itself as a court of conscience”. On a smaller scale, the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)) (ACL), provides protections to consumers including, amongst other things, in respect of mis - leading and deceptive conduct. Since 1 July 2021, a consumer is defined as any person: • who acquires goods or services for an amount not exceeding AUD100,000; or • who, where the amount of goods or services exceeds AUD100,000, acquires the goods or services for personal, domestic or household use (Section 77A of the Treasury Laws Amendment (Acquisition as Consumer – Financial Thresholds) Regulations 2020). Section 18 of the ACL contains a general prohibition against a person/company, in trade or commerce, engaging in conduct that is misleading or deceptive, or likely to mislead or deceive. Additionally, Section 29 (1)(d) of the ACL contains a specific prohibition against a person/company, in trade or commerce, in connec - tion with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply of goods or services, making a false or misleading representation that a particu - lar person has agreed to acquire goods or services.
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