Fraud Question

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FRAUD:

6) State, giving reasons, whether the following scenarios are capable of resulting in a conviction for
fraud by false representation under section 2 Fraud Act 2006. (Do NOT consider any other offence.)

(a) Freddie falsely promises to marry Greta in order to encourage her to agree to sexual intercourse.

To establish the charge of fraud, firstly, the Actus Reus needs to be established which is to simply prove
that a false representation is made. Considering s2 (1a) Freddie dishonestly made a false representation
to encourage sexual intercourse. False promise to marry Greta is a representation falling under the
category of representation of fact (ss3) and it is expressed representation (ss4). Moreover, according to
ss2, F also knows that it is untrue. Therefore, for the breach, the requirement of false representation
with dishonesty is fulfilled. However, second prong is to be looked at is the purpose for which it was
made. By the virtue of ss1 (b), it should be made to make a gain for oneself or for other, or for the loss
of another, or to expose another person to the risk. According to s5(2a), gain or loss is limited to money
or property only and sexual intercourse does not fall in either of them, therefore, no offence under
fraud act 2006 has been committed.

(b) Morgan, a financial journalist, anxious to demonstrate his power over the stock market, writes a
column urging readers to invest in a financially fragile company, stating it is a ‘sure fire winner’.

Considering the facts, AR has been established since according to s.2(2) a representation is false if it is
untrue or misleading and the maker of the statement knows that it is or might be untrue or misleading.
In the case, Morgan, being a financial journalist knows that the statement is untrue and that the
company is financially fragile and not a “sure fire winner” yet he makes an express statement about it.
Adding on, by the virtue s2 (ss3 and ss4) a false representation of fact was expressly made. Therefore,
AR is proved. Moreover, MR of fraud is also proved since the M had the intention not to cause risk to
investors, but to “expose them to the risk”. Secondly, according to Ivey test, his intention is also proved.
In this test, intention is judged based on the standards of reasonable honest people and secondly, D
must know that his conduct is dishonest. In this case, if an honest and reasonable man was at M’s place,
he would not have committed such an act moreover, being a financial journalist, M knew about the
financial positions of the company that it is “financially fragile” and if people would rely on his
representation and invest in that company, then they would suffer a financial loss yet he chose to make
such a representation to advance in his career.

(c) Ashanti, a committed vegetarian who wants people to stop buying meat products, puts an
advertisement in the Daily Echo implying that the hotdogs of HotdiggetyDog hotdog manufacturers
actually contain dogmeat, which she knows to be untrue.

According to the case, the AR of fraud by false representation is established as Ashanti (A) made a false
representation of fact ss3 as she put the advertisement in the Daily echoing which implies that
HotdiggetyDog is actually made up of dog meat. Moreover, the representation by A is untrue and not
simple misleading and A knows about that too. Adding on, by the virtue of ss4, representation can be
either expressed or implied and since A’s advertisement imply that hotdog is made up of meat, the AR is
proved. Secondly, to prove MR, it can be held that A did this on purpose so that she can expose
HotdigettyDog hotdog manufactures to risk. If people would rely on A’s advertisement and stop buying
hotdogs, the manufacturers would suffer a financial loss. This proves MR under the Fraud Act 2006.
Adding on to the points, A’s intention is dishonest according to the Ivey test because a reasonable and
honest man at her place would not have conducted such an act and secondly, A’s concern is to prevent
people from buying meat which means that those hotdogs are actually made up of meat which is against
A’s commitment towards being a vegetarian, therefore, this explains that A knew that her
advertisement is wrong and she is being dishonest in it. With this, A is liable for Fraud by false
representation.

(d) Klara, an art dealer, describes a painting in the sales particulars as an ‘early Constable’. The
painting, as she knows, is painted not by John Constable, the famous artist, but by his son, John
Charles Constable, a lesser artist.

Klara lied that this painting is made by “early constable” when it was made by her son John constable.
Considering this AR has been proved as a false representation of fact by the virtue of ss2 was made
expressly (ss4). Moreover, according to ss2, the statement is not untrue, but it is misleading as it is half
true because the painting is not made by early constable but is made by john constable who is a lesser
artist. Adding on, this fact is known by her, yet she dishonestly made such a statement. Therefore, AR is
proved. Adding on, it is evident that K made this false representation because she wanted to make a
gain of sales for his son by selling his painting, thus, MR is proven according to s5 of this act.
Furthermore, K’s intention appears to be dishonest even under Ivey test as an honest and reasonable
man’s standard would not allow him to sell a painting by falsely representing the name of the artist and
secondly, since John Charles Constable is K’s son and she wanted to sell his painting, she was very well
aware of the dishonesty she did in her conduct.

(e) Jonas tells Zahra honestly that the mileage reading on the car he is selling is accurate. Prior to
concluding the sale, he discovers that the previous owner tampered with the mileage reading and the
reading is false. He does not communicate this to Zahra and Zahra buys the car

Considering the case facts, it is evident that the representation that mileage reading on the car which
Jonas (J) is selling to Zahra (Z) is accurate was once true but as soon as J found out that the previous
owner tampered with the mileage, the reading is false. Although, by the virtue of s2, representation can
either be expressed or implied and cannot be made while remaining silent, however, there is an
exception involved when the statement was true but later became false due to the circumstances of the
case. Due to this, J is under a legal duty to disclose it to Z that the mileage reading is false and correct
the earlier representation made to her. Since he did not do so, a false representation of fact has been
made under s.2 (ss3 and ss4). Furthermore, J knows that the statement he is making is untrue (ss2)
therefore, AR has been proved. Adding on to the discussion, J did this to make a gain for himself by
selling his car which proves MR under s5. Moreover, J’s intention is also dishonest under the Ivey test as
an honest and reasonable man would have disclosed the fact that the mileage reading was false.
Secondly, he knows that what he was doing was dishonest and disclosure of such a fact would have
changed Z’s decision, yet he chose not to disclose his facts which clearly shoes, that J knew his acts were
dishonest.

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