FRAUD

FRAUD

Ø Definition

-As a general rule, it may be stated that whenever a person causes another to act on a false representation which the maker himself does not believe to be true, he is said to have committed a fraud.

-Refer to Section 17 of CA 1950, fraud is defined to include certain acts which are committed with intent to induce another party to enter into a contract.

 

Ø The suggestion, as to a fact, of that which is not true by one who does not believe it to be true.

-Section 17(a) has similar requirements as S.18(a) in that there must be a false representation of fact addressed to the party misled.

-The only difference is the state of mind of the maker of the statement.Under17(a) maker of statement does not believe it to be true.

-Kheng Chwee Lian v Wong Tak Thong

 

Ø The active concealment of a fact by one having knowledge of belief of the facts

-Where a party to a contract actively conceals or prevents certain material information from reaching the other  party to the contract, this active concealment amount to fraud .

-Refer to the case of Horsfall v Thomas which is the court held that this act amount to active concealment with intention to deceive or to induce the other party to enter into the contract.

 

Ø A promise made without any intention of performing it

-Where a promise is made without any intention of performing it , it is an act of fraud under Section 17(c).

-MUI Plaza Sdn Bhd v Hong Leong Bank Bhd.

 

Ø Any other act fitted to deceive

-In Section 17(d) is a catch-all clause to prevent any fraud escaping the net of the law .

-Loi Hieng Chiong v Kon Tek Shin which is the Federal Courts have so far not ventured to lay down as a general propositions what amount to fraud.

 

Ø Act or omission as the law specially declares as fraud.

-Any law specially declares certain acts or omissions to be fraudulent, such act or omission amounts to fraud under Section 17(e).

-A duty of the person keeping silence  to speak, or unless his silence is , in itself , equivalent to speech.

 

Standard of proof of fraud
-In case Ang Hiok Seng v Yim Yut Kiu, it was held that all cases on agreement and contracts are dealt with in civil courts.

-The effect was voidable referring to Section 19 of CA.