Magill v Magill - High Court of Australia Judgment
High Court of Australia Judgment
Magill v Magill [2006] HCA 51 (9 November 2006)
http://www.austlii.edu.au/au/cases/cth/high_ct/2006/51.html
Last Updated: 9 November 2006
HIGH COURT OF AUSTRALIA
GLEESON CJ
GUMMOW, KIRBY, HAYNE, HEYDON AND CRENNAN JJ
LIAM NEAL MAGILL APPELLANT
AND
MEREDITH JANE MAGILL RESPONDENT
Magill v Magill
[2006] HCA 51
9 November 2006
M152/2005
ORDER
Appeal dismissed with costs.
On appeal from the Supreme Court of Victoria
Representation
N Lucarelli QC with J C Paterson for the appellant (instructed by Vivien
Mavropoulos & Associates)
H M Symon SC with A J Palmer for the respondent (instructed by Clayton
Utz Lawyers)
D M J Bennett QC, Solicitor-General of the Commonwealth with R M Doyle
intervening on behalf of the Attorney-General of the Commonwealth
(instructed by Australian Government Solicitor)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Magill v Magill
Tort Deceit Paternity Whether tort of deceit can be applied in
marital context in relation to false representations of paternity −
Where false representations were made by wife in course of marriage
concerning paternity of children born during marriage − Where birth
notification forms completed by wife represented husband to be father −
Where DNA testing after marriage ended revealed two children of the
marriage were not the biological children of the husband − Where husband
claimed damages in deceit for loss of earnings, loss of use of moneys,
personal injury and pain and suffering − Relevance of history of tort of
deceit − Relevance of abolition of inter-spousal immunity in tort by
Family Law Act 1975 (Cth) − Relevance of statutory scheme
intended to minimise role of fault in determining legal rights and
liabilities following breakdown of marriages − Relevance of statutory
regime under
Family Law Act 1975 (Cth) for repayment of moneys wrongly
paid for child support −Relevance of public policy
considerations.
Statute − Statutory construction −
Family Law Act 1975 (Cth) − Whether tort of deceit is
excluded from applying between spouses by the
Family Law Act 1975 (Cth) − Whether ss 119 and 120 of the
Family Law Act 1975 (Cth) expressly or impliedly preclude an
action for deceit by a husband in respect of false representations made
by the wife during the subsistence of the marriage as to the paternity
of children of the marriage.
Words and phrases "deceit", "inter-spousal immunity", "paternity
fraud".
Child Support(Assessment) ActFamily Law Act 1975 (Cth), ss 43, 48, 51, 66X, 69P-69X, 119, 120.
Matrimonial Causes Act 1959 (Cth), ss 21, 28, 44, 98.
11 GLEESON CJ. The appellant and the respondent married in April 1988. They separated in November 1992. The marriage was dissolved in February 1998. Between 1988 and 1992, the respondent gave birth to three children: a son born in April 1989, another son born in July 1990, and a daughter born in November 1991. After the separation, following an application by the respondent, the appellant made payments under the Child Support (Assessment) Act 1989 s 1433 of the Child Support (Assessment) Act, the appellant became entitled to an adjustment of child support payments to allow for past over-payments, and an extinguishment of arrears. The relevant statutory provisions operated of their own force to deal with the matter of child support liability and payments, and that matter was not the subject of the litigation with which this appeal is concerned.
2 In January 2001, the appellant commenced proceedings against the
respondent in the County Court of Victoria. The cause of action sued
upon was the tort of deceit. The damages claimed were of two kinds.
First, the appellant alleged that he had suffered personal injury, in
the form of anxiety and depression, in consequence of the respondent's
fraudulent misrepresentations. Secondly, he claimed financial loss,
including loss of earning capacity by reason of his mental or
psychological problems, and loss related to the time he had spent with,
and money he had spent on, the children under the mistaken belief that
he was their father. He also claimed exemplary damages. The appellant
succeeded at trial, and was awarded damages of $70,000. This did not
include any amount by way of exemplary damages. The decision of the
trial judge was reversed by the Court of Appeal of the Supreme Court of
Victoria (Ormiston, Callaway and Eames JJA) on the ground that the
appellant had failed to establish the essential elements of the tort of
deceit[1]. The
appellant now appeals to this Court, seeking the restoration of the
original award of damages.
3 By notice of contention, the respondent argues that the action was
misconceived, and that even if, contrary to the opinion of the Court of
Appeal, all elements of the common law tort of deceit otherwise had been
made out, nevertheless the remedy pursued by the appellant was not
available for the following reasons:
1. Section 119 of the Family Law Act 1975 (Cth), which permits one party to a marriage to sue the other in tort, does not apply to the tort of deceit or, alternatively, s 120 of that Act precludes an action for deceit based on a false representation of paternity.
2. The tort of deceit does not extend to claims for damages arising from misrepresentations as to the paternity of children conceived and born during the course of a marriage.
4 For the reasons that follow, I consider that proposition 1 is
without substance. Proposition 2 should not be accepted, although the
scope for the operation of the tort of deceit in the case of
communications within the context of a marital relationship is
influenced, and often limited, by that context.
The appellant's claim and the award of damages
5 At the trial, it was common ground that the father of the respondent's
second and third children was a man with whom she had commenced a sexual
association in September 1989 (that is, about 17 months after her
marriage, and about five months after the birth of her first child).
According to the respondent's evidence, she had sexual intercourse with
that man once every two or three weeks until mid-1990, and less
frequently after the birth of her second child. Her evidence was that
when she became pregnant with her second child, she believed it was
possible that this other man was the father, although when she became
pregnant with the third child she believed her husband was the father.
In August 1995, almost three years after their separation, the appellant
learned that the respondent at least suspected that the second child was
not his child. It was not until April 2000 that DNA tests confirmed that
the appellant was not the father of either the second or the third
child. It was then that the necessary adjustments were made in respect
of past and future child support payments.
6 In September 1999, the appellant sought treatment from a psychiatrist,
Dr Chong. According to the psychiatrist, the appellant presented with
severe depression, from which he had been suffering for a number of
months. In a report written in June 2002, Dr Chong said:
"Mr Magill told me that his depression and anxiety state [sic] started in the setting of on-going stress from the Family Court regarding 'child support', financial difficulty and unreasonable demand [sic] from his ex-wife. He was so stressed by the 'child support agency' that he has had persistent nightmares about them threatening and harassing him. His depression and the accompanied [sic] panic and anxiety symptoms became worse when he found out with DNA testing ... that 2 of his 3 children were not fathered by him. This knowledge had devastated Mr Magill, causing him a lot of emotional turmoil."
7 Without doubt, the appellant's wife deceived him, but the hurtful
deception was in her infidelity, not in her failure to admit it. The
devastation he mentioned resulted from his knowledge of the truth when
finally it was made known to him. That knowledge, in turn, came to him
at a time when he was already distressed by the consequences of the
breakdown of his marriage.
8 When the appellant's lawyers sought to express his complaints in legal
form, in terms of the tort of deceit, they made the following
allegations. (The original complaints made some references to the issue
of child support, but at the trial these were agreed to be immaterial.)
In late 1989, the respondent represented to the appellant that he was
the father of the second child. In early 1991, the respondent
represented to the appellant that he was the father of the third child.
Both representations were false. On the faith of the representations the
appellant believed he was the father, and altered his position to his
detriment. The representations were made fraudulently, with the
respondent either knowing they were false or recklessly not caring
whether they were true or false. At the time of the representations the
respondent intended the appellant to rely on them. As a result of the
representations the appellant suffered loss and damage. The damage
included severe anxiety and depression and loss of earnings.
9 At the trial, much attention was given to the need to particularise
and prove the representations on which the appellant sued. This exposed
a difficulty in fitting the case into the mould of the common law tort
of deceit. From one point of view, the appellant's claim that he was
misled about the paternity of the children may have appeared easy to
establish. The problem was to identify a representation by the wife. It
may be inferred that, while the parties were living together, and at
least for a time thereafter, the respondent, by her conduct, would have
said and done things many times, and in many different ways, that
reinforced the appellant's assumption that he was the father of all
three children. In circumstances where he obviously believed he was the
father, and accepted the responsibilities of fatherhood, her silence
would have contributed to his belief. Yet, in the absence of a legal or
equitable obligation to tell the truth, silence of itself does not
amount to misrepresentation[2].
The trial judge would have appreciated that a finding of a legal or
equitable duty in the respondent to disclose her infidelity would take
him into deep waters. He made no such finding. He put his conclusion as
to the representations of paternity upon a very narrow basis. Soon after
the birth of each of the second child and the third child, the
respondent signed, and gave to the appellant to sign, a form of
Notification of Birth addressed to the Registrar of Births, Deaths and
Marriages. The forms described the appellant as the father and the
respondent as the mother. This conduct of the respondent was found to
constitute, in each case, the representation by the respondent to the
appellant that he was the father of the child. That, in turn, had
consequences for the approach that was taken to the issues of
inducement, and damage.
10 When the appellant was asked in evidence why he believed he was the
father of the two children, he made no reference to the birth
notification forms, or to any other specific words or conduct of his
wife. He said:
"Well, I had no reason not to believe [that I was the father]. I watched all three of the children born. I was present at the hospital when all three children were born ... and I had no reason to believe that any of [the] children weren't mine."
11 Having found that the representations were made, the judge noted
that it was not in dispute that they were false. This was established by
the DNA testing.
12 As to the respondent's state of mind concerning the representations,
the trial judge found:
"I am of the view that the evidence points very strongly in favour of the conclusion that she did know that her husband was not the father of either of the children. Certainly at the very least, in my view, it pointed to the conclusion that when she filled in these forms, if she did not know for a positive fact that Mr Magill was not the father, she at least was being reckless as to the truth of her assertion, that he was and had no genuine belief in it. She intended Mr Magill to rely upon it, as indeed he did, in consenting to the naming of the children Magill."
13 After referring to the medical evidence, the trial judge summed up
his conclusion as to the appellant's condition as follows:
"The opinions seem to me of the three doctors to be fairly close together. They express themselves in different ways, and I think the easiest for a layman to understand is probably Dr Kornan's assessment of the situation, which is that the marriage break up itself on any view of it would be an extremely disturbing thing to befall anybody. And the situation [is] simply made worse when he discovers the truth about the paternity of the children, and discovers that he has been misled over the period of years as to his paternity."
14 That description of the appellant's harm, which accords with the
way he himself expressed his health problems to Dr Chong, amounts to the
proposition that the distress he suffered from the breakdown of his
marriage and the subsequent disputes with his wife was exacerbated by
the discovery that he had been misled about the paternity of two of the
children.
15 The basis of the appellant's claim to have suffered economic harm,
apart from the presently irrelevant matter of the overpayments of child
support, is not clear, either from the record of the trial or the
reasons of the trial judge. The claim appears to have included
consequential loss flowing from the disability that resulted from the
appellant's depression and anxiety, such as some modest loss of earning
capacity. There was also an attempt to quantify "expenses involved in
supporting the two children" and a claim for "compensation for time off
work attending to them at birth". The trial judge was unconvinced by the
attempts to quantify these claims, but considered the appellant was
entitled to something. The appellant was awarded $30,000 "by way of
general damages for pain and suffering, [and] loss of enjoyment of life,
past, present and future", $35,000 for past economic loss, and $5,000
for future economic loss. The judgment was for $70,000.
The tort of deceit
16 In Donoghue v Stevenson[3] Lord Atkin said that "acts or omissions which any moral code would
censure cannot in a practical world be treated so as to give a right to
every person injured by them to demand relief". Various control
mechanisms are adopted by the common law to "limit the range of
complainants and the extent of their remedy"[4].
The most obvious example is the requirement, in the case of the tort of
negligence, of a duty of care.
17 The tort of deceit provides a legal remedy for harm suffered in
consequence of dishonesty, but, as Viscount Haldane explained in Nocton v Lord Ashburton[5],
the concept of "fraud" is wider in some legal contexts than in others.
He said[6]:
"Derry v Peek simply illustrates the principle that honesty in the stricter sense is by our law a duty of universal obligation. This obligation exists independently of contract or of special obligation. If a man intervenes in the affairs of another he must do so honestly, whatever be the character of that intervention. If he does so fraudulently and through that fraud damage arises, he is liable to make good the damage. A common form of dishonesty is a false representation fraudulently made, and it was laid down that it was fraudulently made if the defendant made it knowing it to be false, or recklessly, neither knowing nor caring whether it was false or true. That is fraud in the strict sense." (emphasis added)
18 His Lordship's reference to intervening in the affairs of another,
and through fraud, causing damage, reflects the business context in
which the action on the case for deceit emerged, and in which it had,
and still has, a natural place. The elements of the tort fit comfortably
into such a setting. Pasley v Freeman[7],
in 1789, was an action by a plaintiff who was induced to extend credit
to an insolvent third party on the faith of the defendant's fraudulent
representation that the third party was a person of financial substance.
The action succeeded even though there was no contract of suretyship. It
was the combination of fraud and damage that entitled the plaintiff to
sue. In 1837, in Langridge v Levy[8],
Parke B said that the principle laid down by Pasley v Freeman was
that a "mere naked falsehood" would not give a right of action, but if a
falsehood is told with an intention that it should be acted upon by the
party injured, and that party acts upon it in a way that produces
damages to him, an action will lie.
19 In the Third Edition (1868) of Bullen & Leake's Precedents of
Pleadings[9] there
appear references to a series of cases exemplifying actions for damages
for fraudulent misrepresentation. They are cases in a business context.
Not all claims in deceit, however, have involved cases where loss
resulted from a contractual dealing. In Richardson v Silvester[10],
in 1873, the defendant caused to be published an advertisement to the
effect that a certain farm was available for letting. The plaintiff, at
some expense to himself, inspected the property. It was alleged that the
advertisement was deliberately false. It was held that the plaintiff, on
the facts alleged, had a cause of action to recover, by way of damages,
his wasted expenses.
20 Not all actions said to have been allowed on the principle of Pasley v Freeman were commercial in nature, although Wilkinson v
Downton[11],
decided in 1897, and Janvier v Sweeney[12],
decided in 1919, which were cases of deception causing nervous shock,
would probably now be explained either on the basis of negligence, or
intentional infliction of personal injury[13].
21 Almost 200 years after Pasley v Freeman, the modern common law
began to refine the principles according to which damages may be
recovered for loss resulting from certain kinds of misrepresentation
that were not fraudulent but merely careless. In Hedley Byrne & Co
Ltd v Heller & Partners Ltd[14],
the concept of the duty of care, a control mechanism by which the law
limited the range of complainants, was explored in its application to
determining who might sue in respect of financial harm suffered in
consequence of another person's careless statements. The capacity for
careless advice or information to cause harm is extensive. The search
for a satisfactory exposition of the concept of duty of care in this
context resulted in a division of opinion in the Privy Council in Mutual Life & Citizens' Assurance Co Ltd v Evatt[15].
The actual decision in that case is presently immaterial; what is
significant is the kind of problem it exemplifies. The problem could
well arise in a domestic context. As Dickson CJ pointed out in Frame
v Smith[16],
"[i]t is notorious that free, and not always disinterested and wise
advice abounds in a family setting". So, in some family settings, does
misleading conduct. The duty of care controls potential liability for
carelessness. False representations about paternity could be the result
of carelessness rather than deliberate fraud. Furthermore, in domestic
and other personal relations, in between carelessness and deliberate
fraud there may be conduct which is not easy to classify in simple moral
terms.
22 If, in the area of actionable deceit, there is to be a control
mechanism which, like the duty of care in negligence, limits the range
of complainants, then it is difficult to see, as a matter of legal
principle, as distinct from legislative fiat, how the limitation could
operate by reference to one specific kind of representation. Plainly,
representations about paternity relate to a sensitive issue, but there
are other subjects of representation that could also relate to topics of
sensitivity.
23 False representations of paternity could be made in a variety of
circumstances, some of which might be closely linked to questions of
property, or financial undertakings. They could be made before, during,
or after marriage. They could be made between parties who are
negotiating a pre-nuptial contract, or a separation agreement, or a
divorce settlement. They could be made for the specific purpose of
inducing a certain kind of dealing with property, or a certain kind of
financial commitment. The distinction between business affairs and
domestic affairs is not always clear cut. People, in anticipation of,
during, or after, marriage enter into financial arrangements, and create
rights and obligations which are plainly intended to have legal
consequences. Not all people who cohabit in a domestic relationship
intend to marry. Not all married people cohabit in a domestic
relationship. Some might intend to divorce, but until their marriage is
dissolved by court order they remain married. Some married people
separate without any intention to divorce. Marriage is not merely one of
a number of alternative forms of domestic relationship. Among other
things, it is a matter of legal status. Certain formalities are required
for its formation and its dissolution. It is attended by legal
requirements of exclusivity, and publicity. In Australia, a person may
have only one husband or wife at any one time. Marriages must be
recorded on a public register[17].
Marriage is a context in which the law of deceit, in many circumstances,
may be difficult to apply, but in modern social conditions it is
difficult to mark it out as a zone of special immunity from liability
for one particular kind of tort, or one particular form of deceit.
Furthermore, representations about paternity could be made to a third
party, such as a parent or relative of a putative father, with intent to
induce the making of financial arrangements.
24 There is, however, an aspect of marriage that makes the topic of
representations of paternity to a spouse one to be approached with
particular caution. The
Family Law Act 1975 (Cth), in s 43, speaks of "the need to preserve and protect the institution of
marriage as the union of a man and a woman to the exclusion of all
others voluntarily entered into for life". As Jacobs J explained in Russell v Russell[18],
the institution originated, at least in Western society, partly as a
means of involving males in the nurture and protection of their
offspring. Blackstone, in his Commentaries[19],
described marriage as "built on this natural obligation of the father to
provide for his children". The structure of marriage and the family is
intended to sustain responsibility and obligation. In times of easy and
frequent dissolution of marriage, the emphasis that is placed on the
welfare of the children reflects the same purpose. The appellant, when
asked to explain why he believed he was the father of his wife's
children, said that he had no reason not to believe it. As a married
man, he was living in an environment that was designed to reinforce his
parental role and obligations. There was an artificiality involved in
the search for representations that he was the father of the two
children. His wife had no need to make any such representations. The
circumstances of their relationship constantly conveyed to him, and
reinforced, that message, as they were meant to do. In many marriages,
an express representation of paternity is likely to be made only if
there is some reason for doubt. Few husbands expect, or seek, from their
wives, assurances of paternity. Such assurances, if volunteered, would
often raise, rather than resolve, suspicions. Nevertheless, there could
be cases, even if exceptional, in which such assurances are sought, and
given, in circumstances where there is no reason in principle to deny a
remedy.
Family Law Act 1975 (Cth) ss 119, 120
25 The
Family Law Act provides:
"119. Either party to a marriage may bring proceedings in contract or in tort against the other party.
120. After the commencement of this Act, no action lies for criminal conversation, damages for adultery, or for enticement of a party to a marriage."
26 The legal and historical context of those provisions makes it
plain that they do not have the consequences suggested in the
respondent's notice of contention.
27 Section 119 entirely abolished the old spousal immunity based upon
the concept that, at law, husband and wife are one[20].
The immunity disappeared from the law by degrees. It is unnecessary to
trace the origins of the concept, or the stages by which it was broken
down. With s 119, it went completely. Actions in contract or tort between
spouses, or former spouses, are now commonplace.
28 As was noted above, the status of marriage may exist even when the
parties to it are completely at arm's length. People who are married,
happily or unhappily, may sue one another for the full range of torts.
It is impossible to accept that the legislation, sub silentio,
makes fraud an exception. Such a consequence would be absurd. Why should
a woman, who is about to enter into a separation agreement with her
husband, not have the full extent of the law's protection, including its
protection against fraud? Why she might be able to sue him for negligent
misrepresentation, but not for fraudulent misrepresentation, defies
rational explanation.
29 Section 120 abolishes certain causes of action against third
parties, which had no direct relationship to the tort of deceit. They
reflected a view of the relationship between husbands and wives that is
no longer held. Section 120 might have been in point had the appellant's lawyer
dusted off some old law books and attempted to bring an action against
the father of the two children in question, but it has nothing to do
with the present case.
30 There is therefore no occasion to consider the appellant's challenge
to the constitutional validity of these two sections. They do not stand
in the path of his claim.
Proposition 2 in the notice of contention
31 The respondent's second proposition is similar to an argument that
was considered, and rejected, by Stanley Burnton J in England in 2001.
The case was P v B (Paternity: Damages for Deceit)[21].
32 It is not clear whether the respondent's contention is that
representations as to paternity occupy a unique place in the law of
deceit. If they are only a particular example of a wider class of
representation, it was not made clear what that class is said to be. The
respondent's contention would solve the present case, but if it is only
a particular application of a more general principle then that principle
was not stated.
33 The facts of the present case show the difficulties that often will
be involved in attempting to deal with a grievance such as that of the
appellant under the rubric of actionable deceit. Yet it is possible to
imagine cases in which the elements of the tort would be recognisable,
and justice would demand a remedy. The argument in P v B was
expressed in terms of "cohabiting couples". Not all married people fall
within that description. Some, whether or not they intend to divorce,
deal with one another in circumstances where their respective legal
rights and obligations are to the forefront of their concerns. They may
be communicating through lawyers. In such a context, representations may
be sought and given on the clear understanding that they are intended to
be acted upon, perhaps in respect of matters affecting rights of
property or financial obligations. The parties may be as much at arm's
length as people who are dealing in the business context in which the
tort of deceit originated.
34 There are problems involved in inappropriate intrusion by the law of
deceit into the domestic context. However, as a suggested solution to
those problems, the respondent's proposition is both too wide and too
narrow. Whether it is put in terms of representations of paternity, or
widened to cover extra-marital sexual relations, the same question
remains. Why single out that particular kind of representation? There
are many other kinds of representation that may be made in a domestic
context about matters that are regarded by the parties as intimate and
sensitive.
35 One of the obvious difficulties about the topic of paternity, or the
wider topic of sexual infidelity, (a difficulty that is not peculiar to
those topics), is the danger of creating something very close to a legal
duty to disclose facts in circumstances where there could be a serious
question about the existence of a corresponding ethical obligation. With
hindsight, we know that the marriage of the parties to the present
proceedings later broke down. Suppose it had not broken down. Suppose
that, partly in consequence of the respondent's failure to disclose her
infidelity, the marriage had remained intact. Would the respondent at
some point have been under an obligation to reveal the truth? It may be
one thing to say that, when the respondent claimed that the appellant
was legally bound to make child support payments, she ought to have told
him that he was not the father of two of her three children. Yet the
appellant's case implies that, when she handed him the notification of
birth forms to sign, at a time when the marriage was intact, she had a
duty to tell him. The
Family Law Act declares the need to preserve and protect the
institution of marriage. That is a legislative expression of public
policy. The imposition of a legal duty of disclosure of infidelity
would, in the practical circumstances of many cases, be contrary to that
policy. There is no foundation, either in principle or authority, for
the recognition of a general duty of that kind. That, however, is not to
deny that such a duty could exist in particular circumstances.
36 Finally, there is a difficulty about proposition 2, once it is
accepted (as it should be) that s 119 of the
Family Law Act applies to all forms of tort. Since Parliament
has abrogated, in general terms, spousal immunity, judicial creation of
a new form of immunity, applicable to spouses but limited in its
operation to a certain kind of tort, or a certain kind of
representation, is inconsistent with the legislation. Of course, the
legislative reference to tort picks up developments in the common law as
they occur from time to time. Yet the creation of an inflexible
exception to the general right given by s 119, by reference to a certain kind of deceit, regardless of the
circumstances of the individual case, contradicts s 119.
The elements of actionable deceit as applied to the appellant's claim
37 The elements of the tort of deceit were stated by Viscount Maugham,
in Bradford Third Equitable Benefit Building Society v Borders[22],
as follows (omitting his Lordship's citation of authority):
"First, there must be a representation of fact made by words, or, it may be, by conduct. The phrase will include a case where the defendant has manifestly approved and adopted a representation made by some third person. On the other hand, mere silence, however morally wrong, will not support an action of deceit. Secondly, the representation must be made with a knowledge that it is false. It must be wilfully false, or at least made in the absence of any genuine belief that it is true. Thirdly, it must be made with the intention that it should be acted upon by the plaintiff, or by a class of persons which will include the plaintiff, in the manner which resulted in damage to him. If, however, fraud be established, it is immaterial that there was no intention to cheat or injure the person to whom the false statement was made. Fourthly, it must be proved that the plaintiff has acted upon the false statement and has sustained damage by so doing."
38 His Lordship's reference to "mere silence" contemplates, by way of
contrast, the possibility of a case where there is a legal or equitable
duty to speak and disclose the true facts.
39 The courts have also insisted on specificity and particularly in
pleading allegations of fraud. In Lawrance v Norreys[23],
Lord Watson quoted the rule expressed by Earl Selborne in Wallingford
v Mutual Society: "General allegations, however strong may be the
words in which they are stated, are insufficient to amount to an
averment of fraud of which any Court ought to take notice." Lord Watson
added: "There must be a probable, if not necessary, connection between
the fraud averred and the injurious consequences which the plaintiff
attributes to it; and if that connection is not sufficiently apparent
from the particulars stated, it cannot be supplied by general
averments."
40 The author of McGregor on Damages[24] points out that, reflecting the tort of deceit's close connection with
contractual situations, most claims for damages in this area are for
pecuniary loss resulting from acting in reliance on a misrepresentation
by entering into a contract with the defendant or a third party.
However, possible forms of pecuniary loss are not limited to such
circumstances. Lord Atkin, in Clark v Urquhart[25],
said:
"I find it difficult to suppose that there is any difference in the measure of damages in an action of deceit depending upon the nature of the transaction into which the plaintiff is fraudulently induced to enter. Whether he buys shares or buys sugar, whether he subscribes for shares, or agrees to enter into a partnership, or in any other way alters his position to his detriment, in principle, the measure of damages should be the same, and whether estimated by a jury or a judge. I should have thought it would be based on the actual damagedirectly flowing from the fraudulent inducement". (emphasis added)
41 Harm may result from a course of action induced by a fraudulent
misrepresentation, even though it has nothing to do with questions of
contract or with inducement to undertake financial obligations. An
example is Mafo v Adams[26] where the plaintiff was fraudulently induced to undertake an unpleasant
journey, and was awarded compensation for the inconvenience and
discomfort. (The case of Richardson v Silvester[27],
earlier mentioned, was a case where a plaintiff was compensated for the
expense of a fraudulently induced journey.) There is no reason in
principle why the harm for which the tort may provide compensation
should not include personal injury, or why personal injury should not
include psychiatric injury, but the harm for which damages are awarded
is the "actual damage directly flowing from the fraudulent inducement",
that is to say, the damage directly flowing from the alteration of the
plaintiff's position which occurred as a result of the inducement.
Distress, disappointment, frustration and anger may all be natural
responses to discovery of deception, but the tort of deceit does not set
out to compensate people for wounded pride or dignity, or for the pain
that results from broken illusions.
42 As the Victorian Court of Appeal held, in a number of respects the
appellant's case, as accepted by the trial judge, failed to establish
the elements of the tort of deceit. These deficiencies are all
significant, but they reveal a deeper problem with the appellant's case.
It will be necessary to return to that problem after having measured the
appellant's case against the generally accepted requirements of the
tort. The appellant was attempting to press into service, in support of
a private and domestic complaint, a cause of action that was unsuited
for the purpose. This is not because marital relations are a tort-free
zone, or because actionable deceit can never occur between cohabiting
parties or in respect of questions of paternity or marital or
extra-marital relations. It is because the law of tort, like the law of
contract, is concerned with "duties and rights which can be dealt with
by a court of justice"[28],
and the appellant's case was difficult to accommodate to that setting.
43 First, as to the representations found by the trial judge, reference
has already been made to the narrow and artificial basis upon which the
appellant's case was accepted. The respondent simply handed to the
appellant, for signature, routine administrative forms notifying the
public authorities of the birth of each child, and conferring on them
the surname of Magill. In his evidence, the appellant did not seek to
relate his belief in his paternity to the signing of the birth
notification forms, or to any other particular words or conduct on the
part of the respondent. It was the failure to disclose her extra-marital
relations and their possible connection with her pregnancies that was
the critical element in the deception. Yet, unless it can be said that
there was then (that is, in effect, when the children were born) a legal
or equitable duty to disclose the truth, her silence did not amount to a
representation. After the marriage had broken down, and when the matter
of child support payments arose, there may have been a duty of
disclosure; but the appellant was not claiming to recover the child
support payments, and the trial judge made no finding on that basis.
44 Although there was no direct challenge in this Court to the trial
judge's conclusion as to fraudulent intent at the time of the signing of
the birth notification forms, it may be remarked, in passing, that the
evidence raised some serious questions, which were not the subject of
detailed findings, about that issue. Indeed, it is not entirely clear
what was found to be the respondent's state of belief, at the times when
the forms were signed, concerning the paternity of each child. Even some
years later, according to the evidence, she was referring in a diary to
suspicions. At the trial, she said that she thought the man with whom
she had been having extra-marital relations might have been the father
of the second child, but she did not think he was the father of the
third child. Because the matter was not raised as an issue between the
parties until some years later, the respondent might not have attempted
to resolve the question in her own mind, at the time of the signing of
the birth notification forms. Her state of mind on the question of
paternity, and the wisdom of revealing it, at the time of the birth of
each child, may have been more complex than the reasons of the trial
judge acknowledge. However, that is a topic that was not considered in
any detail in argument in this Court.
45 Secondly, once it became clear that the making of the child support
payments was not an aspect of the appellant's claim, the course of
conduct, or change of position, in which he was induced to engage by
reason of the (assumed) false representations of paternity made soon
after the children were born appears to be that he remained in the
marriage and accepted his wife's second and third children as his own.
Although it was not made explicit, presumably underlying the appellant's
claim is the suggestion that if, at the time of the birth of the second
child, he had been made aware of his wife's infidelity and of the
possibility that another man was the father of the child, he would have
acted differently. In what way he would have acted differently is not
clear.
46 Thirdly, there is the related question of damage. The appellant
claimed, and was awarded, damages for two kinds of harm: personal
injury, and pecuniary loss. Accepting that the evidence established
recognisable psychiatric injury in the form of depression and anxiety,
the explanation given by the appellant, and the finding made by the
trial judge, as to the cause of that harm does not identify damage
directly flowing from an alteration of the appellant's position
occurring as a result of the inducement. His depression resulted from
the distressing circumstances surrounding the breakdown of the marriage;
distress that was exacerbated by his later discovery of the truth
concerning his wife's extra-marital relations and the paternity of two
of her three children. The appellant's claim for pecuniary loss took two
forms. The first was consequential, and dependent, upon the claim for
damages for personal injury. The second seems to have involved an
attempt to show that, as a result of being misled into treating the
second and third children as his own, the appellant devoted time to them
that could have been used for more remunerative purposes, and outlaid
moneys for their food, clothing and other necessities. Acting, at least
for a few years, as the father of the two children cost the appellant
money. The amount of the loss was not shown with any degree of cogency,
and it is not possible, from the reasons of the trial judge, to see the
extent to which it was reflected in the amount of $70,000 awarded by way
of damages.
47 The Court of Appeal was right to conclude that the elements of
actionable deceit were not made out. The case, however, was more
fundamentally flawed, and the difficulties in relating the appellant's
claim to the cause of action on which he sued were symptomatic of a more
general problem which is likely to affect many such claims.
The bounds of the legal remedy
48 It has already been pointed out that, if a husband were to claim that
he had suffered injury in consequence of careless misrepresentations
made to him by his wife, whether they were representations about
intimate matters, or whether they took the form of bad investment
advice, the law would undertake a close examination of the circumstances
in which the representations were made in order to see whether there was
a legal duty of care. That is because, underlying the law of negligence,
there is a conception of legal responsibility, based upon the idea of
reasonableness, which reflects social conditions and standards[29].
Just as there are circumstances in which it is not reasonable to expect
people to act under the threat of legal responsibility for carelessness,
so there are circumstances in which personal relations are governed by
ethical principles that do not contemplate, and may be incompatible
with, legal responsibility and the risk of legal sanction. The law of
tort imposes obligations, often regardless of any intention of the
parties to enter into legal relations with one another. If a motorist
injures a pedestrian, the motorist will not have intended to enter into
legal relations with the pedestrian. Yet the act of driving a car on a
public road is one that is generally understood to be attended with
possible legal consequences, and the nature of the motorist's duty
usually is uncomplicated by conflicting responsibilities. Underlying the
legal remedy for deceit there is a duty of honesty, perhaps more general
in its ordinary application than a duty to take care to avoid harming
others. Yet the ethical content of the duty is never measured without
regard to the context in which a party acts, and community standards do
not require the imposition of legal consequences regardless of such
context. For example, finding a false representation, made with
fraudulent intent, in a marital context, or in the context of some other
personal relationships, in certain circumstances may impute an
obligation of disclosure, regardless of other interests and
consequences, where none exists.
49 The matters which an individual party to a marriage might properly
regard as intimate and private are not limited to questions of paternity
of children of the marriage, or sexual fidelity, or to events that
occurred during the marriage. Finding a duty to disclose the truth about
some matters would be inconsistent with the ethical context in which
such a judgment must be made. Furthermore, the problem goes beyond
questions of disclosure. Imposing legal consequences upon behaviour in
such a relationship also may be inconsistent with the subjective
contemplation of the parties and with public policy as reflected in
legislation. In that connection, the extensive scheme of regulation of
the legal incidents of the marriage relationship contained in the
Family Law Act, based as it is largely upon a policy of minimising the
importance of questions of "fault", forms an important part of the
setting in which judgments about dishonesty, and actionable damage, must
be made. The application of the common law of deceit to marital
relations is not impossible, and there are no rigidly defined zones of
exclusion, but attempts to construct legal rights and obligations in an
unsuitable environment should fail, as did this attempt.
Conclusion
50 The appeal should be dismissed with costs.
51 GUMMOW, KIRBY AND CRENNAN JJ. The Victorian Court of Appeal[30] allowed an appeal brought by the respondent in this Court, Meredith Jane Magill, against a judgment in the County Court of Victoria awarding damages against her at the suit of her former husband, Liam Neal Magill, the appellant in this Court. His claim was in deceit for false representations made by her as to the paternity of the second and third children born during the course of their marriage.
The background
52 The issues of principle debated on the appeal to this Court require
consideration of the proper scope in the common law of Australia for the
tort of deceit in domestic relations, in particular where the dispute is
between spouses and respects the paternity of a child apparently born of
their marriage. In that sense, the issues here lie at the frontiers of
tortious liability, as they did in Tame v New South Wales[31], Cattanach v Melchior[32] and Harriton (by her Tutor George Harriton) v Stephens[33].
The treatment by this Court of the issues presented on those appeals
illustrates the wisdom, when placed at a frontier, of taking a vantage
point to look back to the commencement of the legal journey and to what
developed thereafter.
53 The tort of deceit in its modern form first appeared in England at
the end of the 18th century. At that time, an action in tort of the
nature of that between the present appellant and respondent would have
been unthinkable for various reasons. First, no act committed by one
spouse against the other during marriage could be a tort: the reason,
affirmed as late as 1876, was the fundamental and general principle of
the common law that spouses "are one person"[34].
In his dissenting judgment in Wright v Cedzich[35],
Isaacs J spoke with evident approval of Bentham's criticism of the use
of such a "quibble" as the "nonsensical reason" for legal propositions
respecting the matrimonial condition.
54 Secondly, there was the long-standing common law presumption of
legitimacy, of great importance at a time before modern legislation such
as s 3 of the
Status of Children Act 1974 (Vic)[36],
and when legal rights, particularly of inheritance, depended upon the
status of legitimacy. Lord Mansfield, when explaining in Goodright v
Moss[37] why a
parent could not give evidence the effect of which would be to
bastardize a child, said[38]:
"As to the time of the birth, the father and mother are the most proper witnesses to prove it. But it is a rule, founded in decency, morality, and policy, that they shall not be permitted to say after marriage, that they have had no connection, and therefore that the offspring is spurious; more especially the mother, who is the offending party."
55 Statute has intervened. That part of the law of evidence is no
more[39]. Nor is the
common law principle respecting the single legal personality of spouses.
Hence, it might be thought that there had been an expansion in the area
for the operation of the tort of deceit beyond that which it occupied
when it emerged in its modern form in Pasley v Freeman[40].
56 However, other things have remained constant. The law respecting
domestic relations was heavily influenced in England by the
ecclesiastical courts before 1857 and by the courts of equity. In both
courts, much emphasis has been placed upon the importance of the trust
and confidence between spouses and the delicacy of the married
relationship[41], and
more recently, courts of equity and courts more generally have also
considered other adult, long-term, intimate, personal and sexual
relationships[42].
57 The tort of deceit has had quite different origins and applications.
The position is explained by Professor Fleming[43]:
"Deceit, as an independent and general cause of action in tort, is of relatively novel origin, although traces of it are encountered as early as the 13th century when a writ of that name became available against misuse of legal procedure for the purpose of swindling others[44]. Later this remedy expanded and played a modest part in developing the incipient law of contract, principally in connection with false warranties[45]. Its scope, however, remained confined to direct transactions between the parties until in 1789, in Pasley v Freeman[46], it was freed from this link with contractual relations and held to lie whenever one person, by a knowingly false statement, intentionally induced another to act upon it to his detriment. There, the plaintiff had made an inquiry from the defendant concerning the financial standing of a merchant with whom he was negotiating for the sale of 16 bags of cochineal and received the assurance that he could safely extend credit, although the defendant well knew the party to be insolvent. Despite the want of any contractual bargain with the plaintiff, the defendant was held to answer for the loss in an action for deceit. At about the same time, the remedy for breach of warranty was absorbed by the action of assumpsit and henceforth regarded as purely contractual[47]. Thereafter, the two theories of misrepresentation began to diverge and are now quite distinct. The tort action for deceit requires proof of fraudulent intent, while breach of contractual warranty became independent of any intention to mislead or other fault."
58 The significance of the foregoing for the issues that arise on
this appeal is apparent from the further observations by that learned
author[48]:
"Nevertheless, the close association of deceit with bargaining transactions has inevitably coloured the elements of the action, which largely reflect the ethical and moral standards of the market place as they relate to permissible methods of obtaining contractual or other economic benefits and of inflicting pecuniary loss through reliance on false statements. Not that the action is inapplicable to personal injuries or harm to tangible property,[49] but such instances are rare, and the typical cases in which the action is enlisted involve pecuniary loss."
59 An uncontroversial modern statement of the elements to be proved
in an action in deceit is that appearing as follows in the latest
edition of Clerk & Lindsell On Torts[50]:
"Where a defendant makes a false representation, knowing it to be untrue, or being reckless as whether it is true, and intends that the claimant should act in reliance on it, then in so far as the latter does so and suffers loss the defendant is liable for that loss."
60 That formulation no doubt was derived from the body of case law
which followed Pasley v Freeman[51] and was of the character described by Professor Fleming. How well it
applies at the frontier of liability with which this appeal is concerned
is for the consideration which will follow in these reasons.
61 However, something more first should be said of the facts and the
conduct of the litigation.
The facts and the trial
62 The damages claimed by the husband included loss of earnings, loss of
use of monies, damages for personal injury, namely severe anxiety and
depression, and exemplary damages. The trial judge[52] found in favour of the husband and awarded him $70,000 in damages:
$30,000 for general pain and suffering; $35,000 for past economic loss;
and $5,000 for future economic loss.
63 The facts are dealt with comprehensively by Eames JA in the reasons
of the Court of Appeal[53] and for present purposes they can be summarised. The husband and wife
were married in 1988. During the time they were married the wife gave
birth to three children. The first child, a boy, was born on
7 April 1989 ("the first son"). The second child, also a boy, was born
on 30 July 1990 ("the second son"). On 27 November 1991, the wife gave
birth to a girl ("the daughter").
64 The husband and wife separated in November 1992. Following the
separation, the three children lived with the wife, and the husband was
able to spend time with them on certain weekends, according to a
mutually agreed access arrangement. The wife made an application for
child support from the husband in late 1992 under the
Child Support (Assessment) Act 1989 (Cth) ("the Child Support Act"). The husband generally made
payments in accordance with the child support schedule, save for certain
periods in 1996 and 1997.
65 Unbeknown to the husband, the wife had commenced an extra-marital
sexual relationship in September 1989. Contraception was not used. The
wife had had suspicions concerning the paternity of the second son, and
in 1993 these were strengthened as a result of her seeing a photograph
of a child of the man with whom she had had the extra-marital sexual
relationship; the child bore a physical resemblance to the second son.
66 In 1995, after suffering a nervous breakdown, the wife informed the
husband of her suspicion. DNA testing conducted by consent in 2000
established that the husband was neither the biological father of the
second son, nor of the daughter.
67 After the paternity of the second son and the daughter had been
determined, child support arrangements were adjusted, so that payments
were calculated, and due, only in respect of the first son. As the
husband had sufficient outstanding debt in respect of the first son as a
result of his failure to meet payments in 1996 and 1997, he was not able
to recover any amounts he had paid in respect of the second son and the
daughter[54].
68 The husband commenced an action in deceit against the wife, in the
County Court of Victoria in January 2001. The trial took place in
November 2004, and the reasons of the trial judge were delivered, and
the orders made, shortly after the conclusion of the hearing. The trial
judge determined that the wife had made false statements about
paternity, either knowing that they were false or without any belief in
their truth, or recklessly, without caring whether they were true or
not, and therefore without any genuine belief in their truth. Further,
according to the trial judge, the husband had established that the wife
intended the husband to rely on the false statements, that the husband
actually did rely on them, and that he suffered damage as a result.
69 According to the husband, the representations that he was the father
of the second son and the daughter were "partly written, partly oral and
partly to be implied". The husband claimed the written representations
were constituted, inter alia, by the completion and presentation of
birth notification forms by the wife naming the husband as the father of
the second son and the daughter. The husband submitted that oral
representations were constituted by conversations between him and his
wife, with respect to each child, to the effect that she was pregnant,
and that he was the father of the unborn child. The husband further
claimed that the representations were to be implied, given that the wife
failed to disclose her extra-marital sexual relationship, and failed to
correct his apprehension that he was the biological father of the second
son and the daughter.
70 However the trial judge's reasons referred only to the written
representations in the completed birth notification forms presented to
the husband for signature by the wife soon after the birth of each
child. Evidence relating to the oral or implied representations was not
explicitly advanced as proof of separate and discrete instances of
making or repeating the false representations[55].
The birth notification forms
71 In each of the birth notification forms in evidence, the name of the
child was entered by the wife, and in the section entitled "FATHER" the
wife entered the husband's name. Further down the page was a section
entitled "PARENTS PREVIOUS CHILDREN". In the notification form for the
second son, the name of the first son was entered in this section; and
in the notification form for the daughter, the names of the first and
second sons were entered.
72 At the bottom of the form for the daughter was a section entitled
"DECLARATION BY MOTHER / INFORMANT". It was completed by the wife in the
following way:
"I, Meredith Jane Magill request that the child be registered with the family name of Magill and certify that the above information is correct for the purpose of being inserted in the Register of Births and am aware that persons wilfully making or causing to be made a false statement concerning the particulars required to be registered shall on conviction be liable to the penalties of perjury."
73 Below this was a section entitled "DECLARATION BY FATHER", which,
upon presentation by the wife to him, was signed by the husband below
the words:
"I agree to be registered as the father of the child and that the family name of the child be Magill."
74 On the reverse of the form, the following Notes appear:
"NOTE 1 CHILD
Family Name: (i) If a person is registered as the father of the child, the family name of the child should be entered as the same family name as the father ...
NOTE 4 FATHER
Where the parents are not married to each other, do not enter particulars of the father unless the form is being signed by both parents ...
NOTE 5 PARENTS PREVIOUS CHILDREN
Enter only details of children born to or adopted by both parents of the child being registered ..." (emphasis in original)
A form in similar terms was completed in relation to the second son
after his birth.
75 The following exchange regarding the birth notification forms took
place between the husband and his counsel at trial:
"Did she show you a birth certificate? - - - All three children were born in Sea Lake Hospital and at each birth upon discharge there's a form that is filled out regarding the birth of the particular child and that was done on all three occasions of the birth of our children.
Did you see that form? - - - Yes.
Who showed it to you? - - - Well, it was shown to both of us. [The wife] filled the form out on each occasion and naming me as the father and I had no reason to believe otherwise so I signed the particular form."
76 When asked about whether her husband would consider each form (as
filled in by her showing him as father) as an assertion of the truth,
the wife replied,
"I don't think I really thought too hard about it at all, it was a birth registration."
77 In his reasons, the trial judge described the birth notification
forms as the "most direct evidence" of the making of the alleged
representations. His Honour stated:
"It seems to me to be impossible to conclude that [the wife] could have had any real belief in the assertion that she made, and in my view she must have known that [the husband] was not the father ... At the very least, she has just been so reckless as to not have any genuine belief in the truth of the assertion at all, but nevertheless made it, intending it to be relied upon."
78 In awarding damages, the trial judge referred to the evidence of
three doctors who had treated the husband for psychiatric disorders,
which included depression and anxiety, which followed from the
revelation of the "painful knowledge that two of his three children
[for] whom he cares and loves ... have turned out not to be his".
79 Of the wife's situation, his Honour said:
"[The wife] found herself in a position [in] which she [had] a choice between endeavouring to save her marriage or face the enormous uproar which undoubtedly would follow upon her making a truthful statement concerning her beliefs as to the paternity of her children. This solution to the problem of course is no solution at all, that is to lie about it, but I am not so much lacking in comprehension of human frailty that I would ignore and push past an understanding of the extreme difficulty which faced [the wife] when presented with the form to fill in concerning notification."
The Court of Appeal
80 In allowing the wife's appeal from the decision of the trial judge,
both Ormiston and Callaway JJA noted that this was an "unusual case",
fought on very narrow grounds[56],
as the only representations to which the trial judge explicitly referred
and which he tested against the elements of the cause of action in
deceit were those representations described in the birth notification
forms[57].
81 All members of the Court of Appeal assumed that the claim in deceit
had been brought appropriately[58] and concentrated upon whether, on the facts of the case, the elements of
the cause of action in deceit had been established.
82 Callaway JA found that there was no evidence on which the trial judge
could find that the wife intended the husband to rely on the birth
notification forms for any purpose other than signing them and agreeing
that the children should be registered with the family name of Magill[59].
Eames JA (with whom Ormiston JA agreed) determined that the only finding
made by the trial judge concerned the representations in the birth
notification forms[60] and further stated[61]:
"The [husband] did not give evidence that the completion of the forms induced him to do anything. Rather, his evidence was that it was his belief that he was the father that caused him to provide the financial and emotional support for the children, and that his belief in that respect was based on the whole situation of being in a marriage and his ignorance that his wife was conducting an affair. He said that had he known their paternity he would not have maintained the two children, but that evidence was not related to reliance by him on the contents of the forms.
In my view, therefore, there was no evidence that the [husband] acted in reliance on the representations in the forms, save (by inference) with respect to the naming of the children."
83 The Court of Appeal noted that of the $35,000 awarded by the trial
judge for the husband's economic losses, the trial judge had awarded
$10,000 for time taken off work after the births of each of the two
children, and $25,000 was for "expenses incurred for the two children
over the many years before their paternity was resolved"[62].
It was also noted that the trial judge had expressly stated that he was
not, in effect, refunding or adjusting child support payments[63].
The appeal to this Court
84 In this Court, by her Notice of Contention, the wife submitted that
the Court of Appeal erred in concluding that the tort of deceit extended
to claims for damages arising from false representations as to the
paternity of children conceived and born during the course of a
marriage.
85 Arguments regarding the scope and constitutionality of ss 119 (abolishing spousal immunity in tort) and 120 (abolishing actions for "damages for adultery") of the
Family Law Act 1975 (Cth) ("the Family Law Act") were also raised in that context. The
Attorney-General of the Commonwealth intervened and submitted that ss 119 and 120 were valid and supported the interpretation of the sections
advanced by the husband, which will be considered in more detail later.
86 In the reasons which follow, the conclusions will be reached that an
action for deceit between spouses is not excluded by the provisions of ss 119 and 120 of the Family Law Act and that, while an action for deceit may be
maintainable between spouses or former spouses in certain circumstances[64],
the tort does not apply to false representations made during the course
of a marriage about an extra-marital sexual relationship or paternity.
87 This is for two reasons. First, speaking broadly, the Parliament has
passed legislation governing the dissolution of marriage in which the
determination of fault between spouses, including inquiry into their
extra-marital sexual conduct, is no longer the province of the law. At
the same time, in step with scientific developments, the relevant
legislation facilitates accurate determination of paternity and permits
the recovery of amounts wrongly paid for child support. The legislation
is federal and thus applies throughout the Commonwealth. The common law
of Australia in a field appropriate for further development after that
legislation ought not to proceed on a divergent course[65].
88 Secondly, conduct which constitutes a breach of promise of sexual
fidelity and any consequential false representation about paternity,
occurring within a continuing sexual relationship, which is personal,
private and intimate, cannot be justly or appropriately assessed by
reference to bargaining transactions, with which the tort of deceit is
typically associated.
89 These conclusions will result in the dismissal of the appeal and make
it unnecessary to determine other matters which were the subject of
submissions.
Submissions
90 In argument, both parties dealt with the question in terms of whether
or not there should be "an exception" to the application of the law of
deceit, in the circumstances of this case. That treatment of the
question reflected the course of the argument in an English case, P v
B (Paternity: Damages for Deceit)[66].
However, what has already been said in these reasons shows that what is
at stake is not the creation of "an exception" to the established
principles or of a "control mechanism" upon their operation. Rather, the
appeal calls for a decision as to whether the action for deceit should
run at all in circumstances where in previous times it could not have
done so.
91 The husband submitted that there should be no exclusion, or
non-application, of the law of deceit in respect of the wife's liability
based on the fact that the false representations concerned the paternity
of two children born during their marriage were made during the course
of the marriage, and he relied on P v B (Paternity: Damages for
Deceit), which has been characterised as confirming the general
application of the principle encapsulated by the tort[67].
He relied also on the plain and literal meaning of ss 119 and 120 of the Family Law Act, the text of which shall be referred to later in
these reasons. Calling in aid examples of judicial reasoning from other
jurisdictions, the husband argued that public policy considerations
which were animated by concern for the welfare of children should not
bar his action.
92 The wife submitted that a cause of action in deceit was generally
relied on when a remedy was sought in respect of pecuniary losses
arising from inducement to lay out money or enter a contract. It was
conceded that examples could be found where deceit founded a remedy in a
context which was not commercial[68] including where deceit caused physical injury, specifically nervous
shock[69]. It was
next submitted that a false representation made during the course of a
marriage should be treated differently from a false representation made
in a commercial context, just as agreements between spouses were not
normally treated as creating legal relations[70].
The wife also contended that an action for deceit was not apt in a
continuing marital relationship because of the difficulty of
establishing the requisite elements, as happened here with the element
of reliance, a matter to which these reasons will return.
93 Further the wife questioned the social utility of allowing such an
action when that course is weighed against the potential for damage to
families and children. She also submitted that the family law regime
provided for the recovery of maintenance that has been paid without
legal obligation, and that it does so without allocating blame, so it
was unnecessary to rely on the tort of deceit to do justice between the
parties[71]. Then it
was argued that the novel reliance on an action for deceit, as here,
would not have been within contemplation when s 119 of the Family Law Act was drafted; that s 119 should be read down to exclude deceit of the kind alleged
here; and that ss 119 and 120, read together, exclude tortious claims inconsistent with the
exercise of jurisdiction and powers provided for in the Family Law Act. The wife also relied on public policy
considerations, telling against recognising an action for deceit as
sought here, as adverted to in a number of decisions elsewhere; these
decisions will be considered later in these reasons. It is convenient to
start with a consideration of the arguments concerning ss 119 and 120 of the Family Law Act.
Sections 119 and 120 of the Family Law Act
94 Section 119 provides:
"Either party to a marriage may bring proceedings in contract or in tort against the other party."
95 The effect of s 119 is to abrogate rules applied at common law which flowed from
the common law premise that husband and wife were one, to which
reference has been made earlier in these reasons. The premise included a
claim for a tort committed by one spouse against the other during or
before the marriage. This spousal immunity from tortious claims has been
progressively abrogated in Australia[72] (following earlier legislation enacted in the United Kingdom[73]).
The Commonwealth submitted that there is nothing on the face of s 119 (or to be found in the relevant extrinsic material) which
suggests there is a continuing spousal immunity in relation to some
torts, specifically deceit, and not others. This submission is correct
and must be accepted. The plain terms of the section would permit
actions brought in respect of disparate intentional torts, for example
trespass to the person, or deceit in the context of contractual
negotiations. However, the conclusion that s 119 allows the possibility that an action for deceit now lies
between spouses is inconclusive of the outcome in this case. Section 119 does not compel any conclusion that the common law must
now be developed to permit recovery by the appellant in the novel way he
claims.
96 Section 120 of the Family Law Act states:
"After the commencement of this Act, no action lies for criminal conversation, damages for adultery, or for enticement of a party to a marriage."
97 The wife submitted that s 120 prevented the husband's claim because the phrase "damages for
adultery" encompassed the deceit relied on in this case; the husband
rejected this construction. The Commonwealth supported the husband's
construction and submitted that each of the three causes of action
abolished by s 120 were once brought by an injured party against third parties,
and in particular "damages for adultery" refers to a former statutory
cause of action against a co-respondent[74].
These submissions are also plainly correct and must be accepted.
98 However, s 120 does not stand in isolation. It is consonant with the entire
thrust, theoretical underpinning and overall legislative purpose, of the Family Law Act, which constituted a radical alteration to the basis
of family law legislation as previously enacted. The goal was to remove
provisions for divorce based on fault which involved the allocation of
blame and "indignity and humiliation to the parties because of the
inquiry into fault"[75].
It was for that reason that the 14 grounds for divorce contained in the
preceding Matrimonial Causes Act 1959 (Cth) (which included
adultery[76]) and the
four grounds of voidability (which included the wife being pregnant by a
person other than the husband[77]),
were all reduced to a single ground for the dissolution of marriage,
namely "that the marriage has broken down irretrievably"[78].
It can be noted in passing that decrees of nullity can be obtained if a
marriage is void[79].
99 Further, the principles to be applied under the current legislation
premised on "no-fault" divorce are set out in s 43 of the Family Law Act as follows:
"The Family Court shall, in the exercise of its jurisdiction under this Act, and any other court exercising jurisdiction under this Act shall, in the exercise of that jurisdiction, have regard to:
(a) the need to preserve and protect the institution of marriage as the union of a man and a woman to the exclusion of all others voluntarily entered into for life;
(b) the need to give the widest possible protection and assistance to the family as the natural and fundamental group unit of society, particularly while it is responsible for the care and education of dependent children[[80]];
(c) the need to protect the rights of children and to promote their welfare;
(ca) the need to ensure safety from family violence; and
(d) the means available for assisting parties to a marriage to consider reconciliation or the improvement of their relationship to each other and to their children."
100 The differences between the current family law provisions dealing
with family breakdown and earlier provisions reflect profound social
changes. No longer does a paterfamilias hold a "commanding
position"[81],
husbands and wives are treated as equal, divorce is not dependent on
findings of marital fault, and actions for any solace in respect of
sexual infidelity have been abrogated.
101 Divorce is now not uncommon, and many children are part of families
which include step-parents and half-siblings. Further, reflecting the
language and principles of the United Nation's Convention on the Rights
of the Child[82],
Pt VII, Div 1 of the Family Law Act states principles which underlie the provisions
directed to the proper parenting of children. By way of example, s 60B(2)(a) of the Family Law Act provides that, subject to a child's best interests,
children have "the right to know and be cared for by both their
parents". It can also be noted that child maintenance orders dealt with
in Pt VII, Div 7 relate to children whose parents are their biological
parents, step-parents, adoptive parents, or (as defined in the Family Law Act) parents as a result of artificial conception
procedures. It is sufficient for present purposes to note that the
retreat by the legislature from regulating private sexual conduct
between spouses, evidenced in part by s 120, has been accompanied by a correlative increase in regulation
of matters affecting the welfare of children, one of which is the issue
of identity.
102 While s 120 does not encompass, or expressly or impliedly forbid, the
husband's action for deceit, the terms of s 120 support the argument that such an action would not seem
consistent with the overall thrust, theoretical basis, and general
legislative purpose of the comprehensive legislation of which s 120 is a part. This is relevant to the issue raised as to whether
the common law of tort of deceit should be found by this Court to apply,
in the novel way claimed, in the circumstances revealed by the evidence
in this case.
103 The conclusion that ss 119 and 120 (whether considered individually or collectively) do not
expressly or impliedly prohibit an action in deceit between spouses
makes it unnecessary to consider an alternative argument of the
husband's (if the wife's construction of ss 119 and 120 were accepted) that the provisions were unconstitutional, as
beyond the powers in ss 51(xxi) and 51(xxii) of the Constitution.
Question
104 The question then becomes whether the common law action of deceit
covers or should cover false representations of paternity made during
the course of a marriage.
Applicable legislation
105 In the Family Law Act and the Child Support Act, Australia has a
comprehensive statutory framework for dealing with marital breakdown and
collateral issues affecting children. An action in deceit, as pursued
here, cuts across specific provisions in the Family Law Act establishing a single ground for divorce, which
excludes fault, abolishing specific actions including an action for
"damages for adultery", dealing with presumptions of parentage, and
providing for the rebuttal of those presumptions (particularly by
determination of paternity by scientific testing), as well as further
provisions in both the Family Law Act and the Child Support Act allowing for the recovery
of amounts paid, or property transferred or settled, under maintenance
orders, in respect of a child who is not the biological child of the
father.
106 Turning to the presumptions of parentage[83],
relevantly, a child born to a woman during a marriage is presumed under
the Family Law Act to be her husband's child (s 69P) and a presumption
of parentage arises from the registration of a birth (s 69R). The Family
Court may make orders compelling the production or giving of evidence
relevant to parentage (s 69V) and it may compel parentage testing
(ss 69W and 69X) and make consequential declarations (s 69VA).
107 Reference has been made earlier in these reasons to the common law
presumption respecting legitimacy and to the view on the subject of
Lord Mansfield, expressed shortly before Pasley v Freeman[84]launched the modern tort of deceit.
108 Until the development of medical knowledge and technology for
objectively determining paternity, the presumption of legitimacy
remained strong[85] as demonstrated by Russell v Russell[86],
where as late as 1924 Lord Mansfield's rule operated to preclude the
reception of evidence of adultery in divorce proceedings. However, the
strength of the common law presumption declined over time to the point
where it was held in 1970 that it "merely determines the onus of proof"[87] in proceedings. In any event, in Australia, Lord Mansfield's rule was
abrogated by statute[88].
What lay behind the deconstruction of the rule was not only changed
preconceptions of "decency and morality" in respect of illegitimacy and
adultery, but also advances in medical knowledge. The capacity to
exclude paternity by blood testing of a child and its parents, which
emerged before World War II, was seen as a technological development of
particular relevance to affiliation proceedings[89].
It was inevitable that this would lead to greater emphasis on the
biological or genetic connection between parent and child in the context
of the dissolution of marriage and consequential orders for the
maintenance and support of children[90].
That development has been followed more recently by the ability to
determine paternity with a greater degree of probability than was
possible with blood tests, by testing based on analysis of DNA
(deoxyribonucleic acid), the molecule which contains the genetic
information inherited by children from their parents. The position has
now been reached that the statutory presumptions for determining a
child's parentage, as a matter of law (ss 69P-69T) may be rebutted (s
69U) by determining parentage scientifically through DNA testing
(s 69W-69X).[91]
109 The conduct of the wife in this case, both in relation to the birth
notification forms (and her continuing silence, until 1995, about her
extra-marital sexual relationship during the marriage) was not
inconsistent with Lord Mansfield's rule once flowing from the
presumption of legitimacy. However, it is the availability of more
reliable DNA testing of paternity which has given rise to the husband's
novel application to rely on an action for deceit in his particular
circumstances.
110 Further, under s 143(1) of the Child Support Act[92] payments can be recovered where child support has been paid by a person
who is not liable, or who subsequently becomes not liable. A court has a
discretionary power to make such orders as it considers just and
equitable for the purposes of adjusting or giving effect to the rights
of the parties and the child concerned[93]. Section 66X of the Family Law Act also contains provisions enabling orders for the
repayment of child maintenance which has been paid by a person who is
not a parent or step-parent of the child[94].
In this manner, the legislature has evinced an intention to deal with
the economic loss caused by a wife to a husband, after the breakdown of
their marriage, in circumstances such as those arising here, namely
payments for child support or maintenance. It can be noted that these
amounts are not coterminous with the damages for economic losses awarded
by the trial judge as described earlier in these reasons.
Development of the tort of deceit
111 Significant developments of the tort of deceit in the last quarter
of the 19th century arose out of the increased use of companies as
suitable vehicles for the conduct of commercial activity, and
representations to be commonly found in prospectuses and like documents.
112 In the Court of Appeal below, both Callaway JA[95] and Eames JA[96] referred to the familiar passage in Lord Selborne's reasons in Smith
v Chadwick[97]:
"... I conceive that in an action of deceit ... it is the duty of the plaintiff to establish two things; first, actual fraud, which is to be judged of by the nature and character of the representations made, considered with reference to the object for which they were made, the knowledge or means of knowledge of the person making them, and the intention which the law justly imputes to every man to produce those consequences which are the natural result of his acts: and, secondly, he must establish that this fraud was an inducing cause to the contract; for which purpose it must be material, and it must have produced in his mind an erroneous belief, influencing his conduct."
113 This passage was subsequently extracted in the reasons of Lord Herschell in Derry v Peek[98], after which his Lordship went on to explain[99]:
"First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn 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. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made."
114 The modern tort of deceit will be established where a plaintiff
can show five elements: first, that the defendant made a false
representation[100];
secondly, that the defendant made the representation with the knowledge
that it was false, or that the defendant was reckless or careless as to
whether the representation was false or not[101];
thirdly, that the defendant made the representation with the intention
that it be relied upon by the plaintiff[102];
fourthly, that the plaintiff acted in reliance on the false
representation[103];
and fifthly, that the plaintiff suffered damage which was caused by
reliance on the false representation[104].
Generally, the elements of the tort have been found to exist in cases
which concern pecuniary loss flowing from a false inducement and the
need to satisfy each element has always been strictly enforced, because
fraud is such a serious allegation.
115 Not only do the cases themselves show that an action for deceit has
historically been associated with commercial and economic matters, and
particularly with inducing contractual relations, but the method by
which damages in deceit may be assessed also reflects this link[105].
Where a person makes a fraudulent representation to a purchaser about
the value or nature of a product or property, which representation
induces the purchaser to buy the product or property, damages can be
quantified by reference to the difference between the price paid, and
the actual value of the product or property[106].
In Gould v Vaggelas[107],
this Court quantified damages in deceit as those representing the loss
suffered by the purchaser as a consequence of reliance on the fraudulent
representation.
116 In 1974, the common law action in tort for deceit in Australia was
eclipsed in part by Pt 5 of the
Trade Practices Act 1974 (Cth) ("the Trade Practices Act") and cognate provisions under State legislation[108].
The consumer protection regime embodied in that legislation prohibits
both conduct that is misleading or deceptive, or likely to mislead or
deceive[109], and
the making of false or misleading representations[110].
117 The current position is that whilst the tort of deceit involves a
"perfectly general principle"[111],
as contended by the husband, applications outside a commercial or
economic setting are rare and the action is mainly associated with
pecuniary loss. However, two older cases in which damages for personal
injury arose out of a claim of deceit deserve mention. Wilkinson v
Downton[112] concerned a claim for damages in respect of nervous shock resulting from
a false representation intended as a practical joke. While it was argued
that the claim was one of fraud, falling within principles established
in Pasley v Freeman[113],
Wright J doubted that the conduct complained of did fall within that
authority and preferred to recognise the cause of action as arising from
an imputed intention to cause another physical harm[114].
Likewise false words and threats uttered with a similar imputed
intention to cause physical harm, including nervous shock, were held
actionable in Janvier v Sweeney[115].
Subsequent developments in Anglo-Australian law recognise these cases as
early examples of recovery for nervous shock, by reference to an imputed
intention to cause physical harm, a cause of action later subsumed under
the unintentional tort of negligence[116].
118 In Smythe v Reardon[117],
Stanley J held that the false statement by the defendant that he was a
bachelor and free to marry the plaintiff was not calculated to cause the
degree of illness required by Wilkinson v Downton[118].
However, his Honour did allow recovery in deceit for moneys provided by
the plaintiff during their cohabitation to assist the defendant in his
business as a baker[119].
119 The question of whether an action for deceit should run in
circumstances such as those of the present case has been considered
elsewhere.
Decisions in other jurisdictions
120 The English case P v B (Paternity: Damages for Deceit)[120] concerned a man's claim that he had been fraudulently deceived by a
woman, with whom he had lived for many years, into believing he was the
father of her child. In deciding a preliminary question of whether the
tort of deceit applied in the context of domestic relations, in a brief
judgment, Stanley Burnton J determined that it could be maintained as
between a cohabiting couple chiefly because torts of negligence and
trespass to the person applied in a domestic context and he considered
it would be anomalous to except deceit[121].
He recognised that it would not be appropriate to award damages for the
tort if to do so conflicted with orders made in the Family Division of
the High Court of Justice[122].
121 From about 1930[123],
a number of jurisdictions in the United States of America have come to
recognise actions in tort for the intentional infliction of emotional
distress[124], as a
further development of the approach in Wilkinson v Downton[125]and Janvier v Sweeney[126].
As the tort has not been recognised in Australia[127],
and as differing decisions have been arrived at in different American
States in respect of the availability of the tort in respect of
circumstances such as here, depending often on the terms of differing
State legislation[128],
the decisions are of limited assistance in determining the content of
the Australian common law in question here. However, two matters are
worth noting. The lack of consensus about the availability of the tort
in respect of false representations concerning an extra-marital sexual
relationship and paternity during marriage stems, at least in part, from
the adjectival definition of the tort[129].
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