Fraudulent Representation

This essay will go through imperative elements for implementing fraudulent misrepresentation and to provide innocent party to recover civil damages, gain an injunction or other remedies from the other party.
This essay will discuss imperative elements of implementing fraudulent misrepresentation, recover civil damages and gain an injunction or other remedies from the other party.
Business law is very broad concept of law which covers all the legal issues that include many commercial and domestic cases which make up most of the civil cases and there are only few criminal cases where there has been serious breach of law. With the help of reference to relevant case law, this essay will argue that Bob Wheelie suffered economic loss due to fraudulent

misrepresentation of historical figures of business by Mr Spoke. Bob exchanged the purchase agreement at high value than actual net worth of business based on historical accounts. This essay will provide sufficient evidences to prove that Mr. Spoke provided fraudulent representation under section 18 and section 29 under Australian Consumer Law.
In Alati v Kruger 94 CLR (1995) the High court of Australia delivered the judgement that the fraudulent misrepresentation that caused one party economic loss, will give right to an innocent party to take an action against the other party for fraudulent misrepresentation, apart from contractual relationship.
In the given scenario Bob suffered an economic loss due to the fraudulent misrepresentation of an important business figures before buying business from the other party ( Mr Spoke). Fraud is a sense of deceit which may be defined as a false representation of fact made by representor which is Mr Spoke.
The case of Alati v Kruger (1995) 94 CLR provided the bottom line of fraudulent misrepresentation but there are more cases which gave more clarification on fraudulent misrepresentation which are listed below.
This essay will now go through all the elements which must be established in order to authenticate that this is the case of fraudulent misrepresentation. This scenario is similar to John McGrath Motors (Canberra) Pty .Ltd. v Applebee (1964) 110 CLR where it was held the inflating or deflating the business figures knowingly which cause economic loss to the other party. In this case Mr Spoke knowingly inflated the business figures by 55% which caused Bob to suffer an economic loss. This case also constitutes unconscionable by Mr Spoke. He had excellent knowledge about his business financial situation and accounts. To allure Bob into buying his business Mr. Spoke presented inaccurate accounts. Another clear motive was to earn some extra money for his retirement and travel which authenticate the element that it was intentionally.
The other two main elements of the fraudulent representation is that is must be untrue and the party making the representation is aware of inaccuracy. As in Krakowski v Eurolynx Properties Ltd (1995) 183 CLR. IRAC analysis is the best option to justify whether these elements are right or wrong. To answer that there are two questions to be asked: - Were these figures false? And Was Mr Spoke aware of inaccuracy in the figures? Yes, the figures were false and Mr Spoke was aware of inaccuracy. Further to that, the rule is that person doing the presentation could have done misrepresentation knowingly and the figures could be false. In this case, figures were inflated by 55% that was checked by his fellow enthusiast who studied accounting with him at University and Mr Spoke was aware of the false figures were untrue. There were no other factors present at the time of exchange of contract that could have led such behaviour such as: he is illiterate, under the influence of intoxication or suffered any mental health problems or any other medical condition such as dementia. This intentional behaviour of Mr. Spoke was to take economic advantage of Bob. That provide enough evidence that these two elements also apply in this case
To justify that there has been fraudulent misrepresentation in this case the other element is that other party should suffer loss as in McGrath Motors (Canberra) Pty .Ltd. v Applebee (1964) 110 CLR so in this case Bob suffered two economic losses. Firstly, at the exchange of purchase agreement; he paid high price than net worth purely based on the historical inflated figures provided by Mr Spoke. Secondly, he incurred extra economic cost to run his newly bought business. These economic losses were direct consequence of the fraudulent misrepresentation of accounts by Mr. Spoke. So this case fulfils the last elements of fraudulent misrepresentation that one party must have suffered the loss
Bob can sue Mr Spoke under Section 18 of Australian consumer law which prohibits misleading or deceptive conduct.

The best way to prove that Mr Spoke had breached section 18 is through IRAC analysis which is issue, rule, application and conclusion. The main element of section 18 is that there must be misleading or deceptive conduct which is likely to mislead or deceive which is determined by an objective test of reasonable person. The issue in this scenario is that: - Did Mr. Spoke mislead or deceive Bob by an objective? The rule is that one party must have misled or deceive other party intentionally. The application of this case is Bob bought business on the basis of historical figures which were inflated by Mr Spoke. The figures were designed by Mr Spoke in order to induce Bob to buy the business and earn extra money to use in his retirement and travel. So we can conclude that Mr Spoke fulfils all the elements which lead to breach of section 18 under Australian Consumer Law and Bob can bring a civil action. Section 18 covers broad range of misrepresentations which can be narrow down to section 29 which is for false misrepresentation as in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR this is very similar to our scenario. A breach of section 29 can lead to fines up to $220,000 (double check this number) for individuals under s151 and person suffering damage (Bob) can recover civil damages, gain an injunction or other

remedies
This essay has provided the foundation required for the factors which are essential to argue a case of fraudulent misrepresentation and application of legal facts in a given scenario, with reference to relevant case law. In this case Bob held expertise in bikes whereas lacked any knowledge of accounting. However, Mr Spoke intentionally presented the financial figures which were inflated by 55%. As consequence of that being unaware of Mr. Spoke intention Bob exchanged purchase agreement at the high price and incurred extra cost to run his newly purchased business. After referring to the relevant case law and factors necessary, there are sufficient evident that Bob can pursue damages charges against Mr Spoke for fraudulent misrepresentation of facts under section 18 and section 29 and seek penalties to recover civil damages, gain an injunction or other remedies from Mr Spoke.