HI6027 Business and Corporate Law: Fraud Case Study Analysis

This case study examines a scenario where a conman impersonates an expert to obtain funds from a museum for a fraudulent expedition. The central issue revolves around whether the museum can succeed in a civil action to recover the money paid. The analysis delves into the elements of fraud, including misrepresentation, intent to deceive, reliance, and damages, referencing relevant legal principles and case law such as Alati vs. Kruger and Forrest vs. ASIC. The application section applies these elements to the case facts, concluding that the museum is likely to succeed based on both common and statutory law grounds. The document provides a detailed legal analysis of the fraud, relevant legal concepts, and potential remedies, making it a valuable resource for students studying business and corporate law.

Running Head: CASE STUDY
CASE STUDY
Name Of the Student
Name Of the University
Author’s Note

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CASE STUDY
CASE STUDY 1:
Facts:
One day, five years ago, a man introduced himself as Trevor Hunt. He was specialized in
finding antiques for museums. The man looked like the photograph he had seen of the person. He
had shown some coins and hence, the museum granted the fund of 200,000$ to the man for the
expedition. Only later, it was found that the man was an imposter and a real person named
Trevor Hunt was in Amazon Forest.
Issue:
The issue in the case is whether the museum would succeed in a civil action against the
conman to recover the money that it paid him on the grounds of:
 Common law
 Statutory law
Rules:
Fraud is Intentional Deception to gain unlawful and unfair benefits or even withdraw the
victim of his or her legal rights (Comer 2017). The key feature of fraud is that the act would have
been conducted dishonestly and with deceptive intent. Establishment of fraud as the ground for
harm being caused to the victim is difficult. However, the doctrine of fraud can be established by
the means of intentional misrepresentation and concealment of fact upon which the victim has
relied resulting in the harm being caused to the victim.
There are four elements of fraud (Buell 2019):

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 Statement made which is materially false. The statement being materially false means
that the substantial essence of the statement which initiates the founding of the intention
should be false.
 Intention to deceive the victim.
 Act of the victim relying upon the statements of the person acting fraudulently.
 Damages being caused.
Remedies for fraud is rescission of the act which was committed with fraudulent intention
like that of an agreement, contract or transaction, recovery of compensation amount for harm
being caused, punitive damages against the person engaging in fraudulent activities and so on.
However, the act of fraud may also be applied as a doctrine for defense in a civil action against
the claims of breach of contract or specific performance of the contractual obligation or the terms
and conditions of the contract. Thus, it can be explained that the fraud and fraudulent activities
may be established as the ground for application of equitable jurisdiction. However, in Alati vs.
Kruger [1995] 94 CLR 216, it was held by the court that the doctrine of restituto in integrum
(recission and restoration of the parties to their pre-contractual position) would be possible only
upon the fraudulent activity being conducted due to misrepresentation of the facts to the victim
based on which the decision was taken by the victim due to which the victim has suffered such
loss.
On the contrary, in the common law jurisdictions, the act of fraud takes many forms like
that of theft, false pretence, misconduct (like bank fraud, insurance fraud, forgery and so on) and
so on (Collins and McGuirk 2018). Thus, the elements of fraud as described in criminal nature
may vary but as a civil wrong, the elements of fraud in tort would be recognized with the

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reliance of the victim on the false statements made by the person engaged in fraudulent activity
for the purpose of decision related to act or transaction.
Insurance Contracts Act 1984 (Cth) defines fraud in civil litigation in Australia. In Nadinic
vs. Drinkwater [2017] NSWCA 114 it was explained that the reliance of the party on the
statements of the party which are materially false is an important aspect. The victim must rely on
the statements of the party to act upon and such reliance shall constitute the wrong of fraud due
to the statement being false upon which the act of the victim was relied (Orthopedic & Sports
Physical Therapy Associates Inc. vs. Summit Group Properties [2012] LLC 283 Va). In other
words, it has been explained that the pleading of fraud being committed should be a specifically
mentioned in the pleadings for the court to identify the intention of the person instead of the
harm being caused by the act of the person (Rawlings and Lowry 2017). Deception and
Dishonesty are the key ingredients for the recognition of fraudulent intent of the person towards
the victim and the act or transaction being committed thereafter.
In Sgro vs. Australian Associated Motor Insurers Ltd [2015] NSWCA 262, it was held that it
is critical for the victim to plead fraud in the litigating matter or else, the allegations may be
dismissed.
In Forrest vs. ASIC [2012] 247 CLR 486, it was held that the allegation of fraud can only be
claimed on the ground of the statement being an outcome of deliberate falsehood or reckless
indifference.
Application:
Applying the elements of fraud in common law:

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 The statement made by the conman was materially false because he was not the person as
posed. The statement being materially false means that the conman had established that
he was Trevor which means that the essence of the activity was that the museum believed
that he was Trevor and hence, the very essence of the establishment of the museum belief
is false and hence, the statement can be stated as materially wrong.
 The conman had the intention to deceive the museum because he had the knowledge that
he is posing as someone that he is not and the museum would believe him to be the
famous personality.
 The museum relied upon the person’s identity as posed for the fund or transaction.
 The museum suffered monetary loss by transacting 200,000$ as a fund for an expedition.
Applying Nadinic vs. Drinkwater, it can be explained that the museum had acted upon
the false identity as posed by the conman.
Applying Forrest vs. ASIC [2012] 247 CLR 486, it can be stated that the identity posed
by the conman was materially false because the funding was meant for Trevor and not an
imposter.
Conclusion:
It can be concluded that the museum will succeed in a civil action against the conman to
recover the money that it paid him on the grounds of:
 Common law
 Statutory law.

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REFERENCE:
Alati vs. Kruger [1995] 94 CLR 216
Buell, S.W., 2019. Fraud. In The Palgrave Handbook of Applied Ethics and the Criminal
Law (pp. 265-282). Palgrave Macmillan, Cham.
Collins, C. and McGuirk, N., 2018. Fraud in the twenty-first century: Is the criminal law fit for
purpose?. In Financial Crime and Corporate Misconduct (pp. 63-78). Routledge.
Comer, M.J., 2017. Corporate fraud. Routledge.
Forrest vs. ASIC [2012] 247 CLR 486
Nadinic vs. Drinkwater [2017] NSWCA 114
Orthopedic & Sports Physical Therapy Associates Inc. vs. Summit Group Properties [2012] LLC
283 Va
Rawlings, P.J. and Lowry, J.P., 2017. Insurance Fraud and the Role of the Civil Law. The
Modern Law Review, 80(3), pp.525-539.
Sgro vs. Australian Associated Motor Insurers Ltd [2015] NSWCA 262