Deceit

It is a fraud or deceit in law to knowingly make an untrue representation intended to

induce another party to act upon it in circumstances where the latter, in reliance of the
said representation, suffers damage as a result thereof1. Whether the defendant has
gained from the deceit is not in issue, nor is it material that he is motivated by the desire
to harm the interest of the plaintiff2. Similarly, it is no defence that the representee had
the means to discover the truth, or that he might have with due diligence known of the
falsity3. The plaintiff must adduce clear evidence of the fraud4. An allegation of fraud
must be pleaded and particularised and it must be proved beyond reasonable doubt5. In
any event, the question whether there is evidence to support a finding of fraud is a
question of law6; and subject to this, the determination whether the representation was
actually fraudulent is a question of fact7.

The tort of fraudulent and negligent misrepresentation8 when made by telephone or telex
is committed at the place where the misrepresentation was received and not the place
from which it was sent9.

Contributory negligence is not available as a defence to an action of deceit10.

1 It is necessary to distinguish between reliance as an indicator of proximity and reliance as an element of a
cause of action for the negligent provision of information or advice. As Lord Browne-Wilkinson pointed out
in White v Jones [1995] UKHL 5, [1995] 2 AC 207 at 272, CA (Eng):[i]n the case of claims based on negligent
statements ... the plaintiff will have no cause of action at all unless he can show damage and he can only have
suffered damage if he has relied on the negligent statement. For the purposes of proximity, reliance clearly
involves something over and above the fact that the plaintiff relied on the statement in question as the basis
for his or her acting or not acting in a particular way: see Esanda Finance Corporation Ltd v Peat Marwick
Hungerfords (Reg) [1997] HCA 8, (1997) 188 CLR 241, (1997) 142 ALR 750, (1997) 71 ALJR 448; Polhill v
Walter (1832) 3 B & Ad 114. See Trengganu Forest Products Sdn Bhd v Cosco Container Lines Company
Ltd [2009] 7 MLJ 781, where it was held that it is settled that a person can be held liable in tort to another if
he knowingly or recklessly makes a false statement to that other with the intent that it would be acted upon
and that other does act upon it and suffers damage. In this case, the plaintiff had established beyond
reasonable doubt that the defendants are liable to the plaintiff for the tort of deceit in making fraudulent
misrepresentations in the bill of lading. Further, the defendants had admitted to issuing the fraudulent bill of
lading. In Sim Thong Realty Sdn Bhd v Teh Kim Dar @ Tee Kim [2003] 4 AMR 460, CA [2003] 4 AMR 460, CA,
the court opined that it was the nature of the misrepresentation that determined the remedies available. Gopal
Sri Ram JCA (as his Lordship then was) said at page 469: Now, it is trite that the expression
misrepresentation is merely descriptive of a false pre-contractual statement that induces a contract or other
transaction. But it does not reflect the state of mind of the representor at the relevant time. The state of mind
of the representor at the time he made the representation to the representee varies according to the
circumstances of each case. It may be fraudulent. It may be negligent. Or it may be entirely innocent, that is
to say, the product of a mind that is free of deceit and inadvertence... It is the particular state of mind of the
representor that determines the nature of the remedy available to the representee. So, if the
misrepresentation is made fraudulently, then the representee is entitled to rescission and all damages directly
flowing from the fraudulent inducement. His Lordship went on to discuss the position of negligent
misrepresentation at page 471: If the misrepresentation was made negligently, the remedy of the representee
lies in damages in the tort of negligence under the assumption of responsibility and reliance doctrine laid down
in Hedley Byrne & Co Ltd v Heller & Partners[1964] AC 465. In such a case the representee must plead and
prove a special relationship giving rise to a duty of care as well as the other elements that go to constitute the
tort of negligence.2 Polhill v Walter (1832) 3 B & Ad 114; Derry v Peek (1889) 14 App Cas 337, HL. 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 [1914] AC 932 at 950-955,HL, the concept of fraud is wider in some
legal contexts than in others. He said at 954:Derry v Peeksimply 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.; Magill v Magill [2006] HCA
51, (2006) 231 ALR 277, (2006) 81 ALJR 254 at [16].3 Redgrave v Hurd (1881) 20 ChD 1, CA (Eng).4 Hornal
v Neuberger Products Ltd [1957] 1 QB 247, [1956] 3 All ER 970, CA (Eng). In Trengganu Forest Products Sdn
Bhd v Cosco Container Lines Company Ltd [2009] 7 MLJ 781 (cited in note 1 above) it was
proven.5 Saminathan v Pappa [1981] 1 MLJ 121, (1980) 3 PCC 681, PC; Lee You Sin v Chong Ngo
Khoon [1982] 2 MLJ 15, FC; Tan Ah Chim & Sons Sdn Bhd v Ooi Bee Tat [1993] 3 MLJ 633;Boonsom
Boonyanit v Adorna Properties Sdn Bhd [1997] 2 MLJ 62, [1997] 3 CLJ 17, [1997] AMR 1813, CA; Mohd Salleh
Kasim v Taisho Marine & Fire Insurance Co Ltd [1999] 5 CLJ 302. See also Ang Hiok Seng @ Ang Yeok Seng v
Yim Yut Kiu (Personal representative of the estate of Chan Weng Sun (decd)) [1997] 2 MLJ 45, [1997] 1 CLJ
497, [1997] 1 AMR 917, FC; Shak Yong @ Hew Chong v Hew Sak Yong[2014] 1 MLJ 562, CA (no
evidence).6 Smith v Chadwick (1884) 9 App Cas 187 at 193, HL; Shak Yong @ Hew Chong v Hew Sak
Yong[2014] 1 MLJ 562, CA.7 See note 6 above.8 To establish negligent misrepresentation or negligent
misstatement, it is incumbent upon the complainant to establish that he relied upon that specific
misrepresentation or negligent misstatement as a crucial element in the cause of action: Dato' Ariff Wan
Hamzah v HwangDBS Investment Bank Bhd [2013] 1 MLJ 526.9 Mohamad Toufik Al-Ozeir v American Express
Bank Ltd [1994] 2 MLJ 687.10 See Alliance and Leicester Building Society v Edgestop Ltd [1994] 2 All ER
38, [1993] 1 WLR 1462; Nationwide Building Society v Thimbleby & Co (1999) Lexis, Enggen Library, Cases
File. See further [120] CONTRACT (2013 Reissue).
[380.123]
Essentials of deceit
Liability for the tort of deceit requires: (1) the existence of a false statement of fact1;
(2) that the representation was made with the intention that it will be acted upon by the
plaintiff, or by a class of persons which includes the plaintiff, in a manner causing
damage to the plaintiff2; (3) that the plaintiff in fact acted on the false statement3; (4)
that the plaintiff suffered resulting damage4; and (5) that the representation was made
fraudulently5.
1 As to what is a false statement of fact see [380.124].2 As to intention see [380.125].3 As to reliance
see [380.126].4 As to damage see [380.128].5 See [380.127].
[380.124]
False statement of fact
Deceit requires the defendant to have made a false representation of fact1. There is a
duty not to represent what is known to be false2; and where a person with no knowledge
whatsoever on a matter takes upon himself to make a statement of fact, he does so at
his peril; and, if it is done either with a view to secure some benefit to himself, or to
deceive a third person, a liability arises in fraud3. An independent alternative cause of
action where the burden of proof of deceit4 cannot be discharged may lie in negligence5.
In circumstances where there has been material alteration in the representation after it
has been made to the representee and the new fact is only known to the representor
and not the representee, there may be an obligation on the part of the representor to
communicate the change to the representee; and failure to do so may attract liability6.
The representation must be one of fact and not one of opinion, and a non-disclosure is
not fraudulent when there is no duty to disclose7. Such a duty may exist (1) by virtue of
a fiduciary relationship; (2) where silence distorts positive representation; or (3) where
contracts of uberrimae fide are involved8.
1 See generally [120] CONTRACT (2013 Reissue). See also Beckett v Cohen [1973] 1 All ER 120, was followed
by the Court of Appeal in R v Sunair Holidays Ltd [1973] 2 All ER 1233, CA (Eng), where it was held at 1236:
In a civil action of deceit the plaintiff must prove that there was a false representation of fact as distinct from
the failure to fulfil a promise. In Ang Sin Hock v Khoo Eng Lim [2010] 3 SLR 179 at 193, [2010] SGCA 17, it
was held that in the context of fraudulent misrepresentation, that a statement of intention is not actionable,
unless it can be shown that the maker of the statement had not made the statement in good faith.2 Seton,
Laing & Co v Lafone (1887) 19 QBD 68, CA (Eng).3 On account that he takes upon himself to warrant his own
belief of the truth of that which he asserts: Evans v Edmonds (1853) 13 CB 777.4 Ie beyond reasonable
doubt: see [380.122].5 See [380.129].6 Praill v Clifford (1864) 4 De G & S 318.7 Ward v Hobbs (1878) 4 App
Cas 13, HL. See [120] CONTRACT (2013 Reissue).8 Nocton v Ashburton [1914] AC 932, HL. See
[120] CONTRACT (2013 Reissue).
[380.125]
Intention
The representor must have intended the representee to act the way he had in fact
acted1. The deceit may not necessarily be communicated directly to the representee 2; it
may be communicated through a third party or even to the public at large where the
representee as a member has been induced and suffered damage from it3. The
defendant is liable if he intended the other party to rely on the statement and he in fact
relied on it in the manner contemplated; it is not required of the plaintiff to prove that
the defendant intended to cause him damage4.
1 Polhill v Walter (1832) 3 B & Ad 114. See [120] CONTRACT (2013 Reissue), in particular see the Contracts
Act 1950 (Act 136) s 18 on misrepresentation which includes (1) the positive assertion; (2) any breach of
duty misleading another to his prejudice; (3) causing, however innocently, a party to an agreement to make a
mistake as to the substance of the thing which is the subject of the agreement.2 See Longbridge v Levy (1837)
2 M & W 519. See also Gross v Lewis Hilman Ltd [1970] Ch 445, [1969] 3 All ER 1476, CA (Eng).3 Richardson
v Silvester (1873) LR 9 QB 34; Swift v Winterbotham (1873) 3 QB & Ad 114. See also Commercial Banking Co
of Sydney Ltd v R H Brown & Co [1972] 2 Lloyd's Rep 360;Andrews v Mockford [1896] 1 QB 372, CA
(Eng).4 Polhill v Walter (1832) 3 B 7 Ad 114; Edgington v Fitzmaurice (1885) 29 ChD 459 at 482, CA (Eng),
per Bowen LJ; Brown Jenkinson & Co Ltd v Perry Dalton (London) Ltd [1957] 2 QB 621, [1957] 2 All ER 844,
CA (Eng).
[380.126]
Reliance
For a liability in deceit to arise, the forseeability of reliance alone is not enough if reliance
was not intended by the representor; a liability arises only if the plaintiff was induced to
act in the manner that he did on account of the false statement1. Thus no action lies if
what was said has no material effect on the plaintiff2. The defendant cannot escape
liability by proving that the false statement was not the sole reason for the plaintiff's
action3. The misrepresentation need not be the decisive factor but it should have a real
effect on the plaintiff's decision4. The plaintiff's claim is not to be defeated solely on
account that he had the opportunity or ways to verify the truth of the statement 5. It is
not required of the plaintiff to prove what he would have done had he known that the
representation was false6.
1 Downs v Chappell [1996] 3 All ER 344, [1997] 1 WLR 426, CA (Eng). See [120] CONTRACT (2013 Reissue).
A general reliance is insufficient. The plaintiffs are bound to show that the information issued by the
accountants worked so as to exert a specific influence on their minds and as a consequence of which they were
induced to purchase the shares: Dato' Ariff Wan Hamzah v HwangDBS Investment Bank Bhd [2013] 1 MLJ
526. In a professional negligence claim the cause of action is complete when the claimant, in reliance upon the
negligent advice, acted to his detriment thereby suffering damage which is capable of monetary
assessment: Maxbiz Corporation Bhd v Public Investment Bank Bhd [2012] MLJU 33.2 Macleay v Tait [1906]
AC 24, HL.3 Edgington v Fitzmaurice (1885) 29 ChD 459, CA (Eng); Barton v Armstrong [1976] AC 104.4 JEB
Fasteners Ltd v Marks, Bloom & Co [1983] 1 All ER 583, CA (Eng).5 Nocton v Ashburton [1914] AC 932,
HL; Central Railway Co of Venezuela v Kisch (1867) LR 2 HL 99; Pearson (S) & Son Ltd v Dublin Corp [1907]
AC 351, HL.6 Downs v Chappell [1996] 3 All ER 344, [1997] 1 WLR 426, CA (Eng); Smith v Kay (1859) 7 HL
Cas 750.
[380.127]
Fraudulently made
In an action for damages founded on deceit at common law, liability only arises on proof
that the false representation had been made knowingly without belief in its truth, or
recklessly or without care whether it is true or false1. The position at common law thus
appears to be narrower than that provided for under the Contracts Act 1950 2 which
provides that a fraudulent act is any of the following acts committed by a party to a
contract, or with his connivance, or by his agent, with intent to deceive another party or
his agent, or to induce him to enter into the contract: (1) the suggestion, as to a fact, of
that which is untrue by one who does not believe it to be true; (2) the active
concealment of a fact by one having knowledge or belief of the fact; (3) a promise made
with no intention of performing it; (4) any other act fitted to deceive; and (5) any such
act or omission as may be provided by law3.

The making of a false statement through want of care or making it honestly believing it
to be true falls short of deceit4. The question is whether the defendant honestly believed
the representation in the sense of his understanding of it provided that it is one which
may be reasonably understood; the test is not on the objective basis to be determined
by the court5. Thus statements which are made carelessly without more cannot support a
cause of action for deceit6.
1 Derry v Peek (1889) 14 App Cas 337, HL. See Tegas Baiduri Sdn Bhd v BIMB Trust Ltd [2011] 8 MLJ
210 at 230 citing Panatron Pte Ltd v Lee Cheow Lee [2001] 3 SLR 405, where the Singapore Court of Appeal
held that the law as regards fraudulent representation is clear and settled. A man can be held liable in tort to
another, if he knowingly or recklessly makes a false statement to that other with intent that it would be acted
upon, and that does not act upon it and suffers damage. The plaintiff must prove actual fraud which happens
when it is shown that a false representation has been made knowingly, or without belief in its truth, or
recklessly, without caring whether it be true or false.2 Ie the Contracts Act 1950 (Act 136).3 Ie the Contracts
Act 1950 s 17. See [120] CONTRACT (2013 Reissue).4 Fraud is essential to found an action of deceit, and it
cannot be maintained where the acts proved cannot be so termed.: Derry v Peek (1889) 14 App Cas
337 at 375, HL, per Lord Herschell.5 Akerhielm v De Mare [1959] AC 789, [1959] 3 All ER 485, CA
(Eng).6 Angus v Clifford (1891) 2 Ch 449, CA (Eng).
[380.128]
Damages
The aim in the award of damages1 for deceit is to compensate the complainant and put
him, in so far as money can do it, in the position had there been no reliance on the
fraudulent misrepresentation2. No liability exists where the representee was not
deceived3. In deceit, the reasonable foreseeability test of remoteness4 does not apply,
and the defendant is liable for all the actual loss suffered by the plaintiff5. In principle the
assessment is aimed at putting the plaintiff in the position he would have been in had
the representation not been made6, and not in the position had the representation been
true. Consequently, as a general rule, prospective gains are not recoverable7. The
principle is not absolute, and it is only a method in compensating the plaintiff8. A broad
approach should be adopted, and the law may allow the plaintiff to recover all the losses
that are directly caused by the deceit9. The principle is applicable to the extent that the
plaintiff may recover the value of shares by reference to the purchase price and its fall in
value on account of fraud although the shares were bought at a higher price10, and while
having regard to the peculiarity of a transaction, a negligent valuer is not liable for a
general fall in the property market11, it is probably consistent with the general policy of
the law that a fraudulent valuer should bear the loss12. Consequential damages may be
awarded for the loss directly incurred including unforeseeable loss13.
A plaintiff may abandon his right to rescind the contract and insist that the contract be
performed and that he be put in the position he would have been had the representation
been true14. In cases of fraud where rescission is granted, damages are awarded in
addition to rescission, and the basis of compensation provided by the Contracts Act
195015 has no appplication16. Thus a plaintiff is only entitled to the expenditure
reasonably and properly incurred in consequence of and flowing directly from the
misrepresentation, whether before or after rescission17.

Exemplary damages may also be awarded18, and injured feeling19 and mental
distress20 may be reflected in assessing damages.
1 At common law there are two principles fundamental to the award of damages. First, that the defendant's
wrongful act must cause the damage complained of. Second, that the plaintiff is to be put in the same position
as he would have been in if he had not sustained the wrong for which he is now getting his compensation or
reparation: see Livingstone v Rawyards Coal Co(1880) 5 App Cas 25 at 39, HL, per Lord Blackburn.2 Abdul
Razak Datuk Abu Samah v Shah Alam Properties Sdn Bhd [1999] 3 CLJ 231, [1999] 2 AMR 2351, CA (the
plaintiff is therefore only entitled to recover all expenditure reasonably and properly incurred in consequence of
and flowing from the fraudulent misrepresentation, whether before or after the date of rescission. The
reimbursement of interest paid by the plaintiff constitute expenditure which the plaintiff reasonably and
properly incurred in consequence of the defendant's fraudulent misrepresentation. They are therefore
recoverable by the plaintiff); Holmes v Jones [1907] 4 CLR 1692 at 1709; Demestrious v Gikas Dry Cleaning
Industries Pty Ltd [1991] 22 NSWLR 561 at 575; Sellars Adelaide Petroleum (1994) 179 CLR 332. See
[120] CONTRACT (2013 Reissue).3 Horsfall v Thomas (1862) 1 H & C 90.4 See [380.135].5 Smith New Court
Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254 at 284, HL, per Lord Steyn; Doyle
v Olby (Ironmongers) Ltd [1969] 2 QB 158, [1969] 2 All ER 119, CA (Eng).6 Abdul Razak Datuk Abu Samah v
Shah Alam Properties Sdn Bhd [1999] 3 CLJ 231, [1999] 2 AMR 2351, CA. See also the other cases cited in
note 2 above.7 McConnel v Wright [1903] 1 Ch 546 at 554555, CA (Eng), per Collins MR; Bango v
Halt (1971) DLR (3d) 66; State of Australia v Johnson (1982) 42 ALR 161. However, the plaintiff may recover
for the loss of opportunity to gain a profit which he might have made in some other business with the same
money: East v Maurer [1991] 2 All ER 733, [1991] 1 WLR 461, CA (Eng). See [120] CONTRACT (2013
Reissue).8 Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254,
HL.9 Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254 at 284, HL,
per Lord Steyn; Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158, [1969] 2 All ER 119, CA (Eng); Tay Tho Bok
v Segar Oil Palm Estate Sdn Bhd [1996] 3 MLJ 181.10 Smith New Court Securities Ltd v Scrimgeour Vickers
(Asset Management) Ltd [1997] AC 254, HL.11 Banque Bruxelles Lambert SA v Eagle Star Insurance Co
Ltd [1997] AC 191, HL.12 The point was left open in Banque Bruxelles Lambert SA v Eagle Star Insurance Co
Ltd [1997] AC 191, HL. It is not proper to apply negligence principles to fraud: see Smith New Court Securities
Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254, HL.13 Royscott Trust Ltd v Rogerson [1991]
2 QB 297, [1991] 3 All ER 294, CA (Eng),; East v Maurer [1991] 2 All ER 733, [1991] 1 WLR 461, CA
(Eng); Archer v Brown [1985] 1 QB 401,[1984] 2 All ER 267.14 See the Contracts Act 1950 (Act 136) s 19(2)
and Abdul Razak Datuk Abu Samah v Shah Alam Properties Sdn Bhd [1999] 3 CLJ 231 at 241, CA.15 Ie the
Contracts Act 1950 s 74.16 Abdul Razak Datuk Abu Samah v Shah Alam Properties Sdn Bhd [1999] 3 CLJ 231
at 241, CA.17 See note 16 above.18 Archer v Brown [1985] 1 QB 401, [1984] 2 All ER 267.19 Mafo v
Adams [1970] 1 QB 548, [1969] 3 All ER 1404, CA (Eng).20 Shelley v Paddock [1979] QB 120, [1978] 3 All ER
129; affd [1980] QB 348, [1980] 1 All ER 1009, CA (Eng); Saunders v Edwards [1987] 2 All ER 651, [1987] 1
WLR 1116, CA (Eng).
[380.129]
Negligent statements
A person owes a duty of care not to make untrue statements which result in physical
injury to another person or his property1. In certain circumstances there is also a duty
not to make false statements which cause another person to suffer economic loss. In
order to be liable for such a false statement, the defendant must have assumed some
responsibility in respect of the advice, information or opinion that he has tendered to the
plaintiff, and the circumstances must be such that the plaintiff could reasonably rely on
the defendant's skill or judgement. The duty of care will then exist if the defendant is or
holds himself out to be carrying on a business or profession which entails the giving of
that advice, information or opinion2.
1 See [380.144].2 See [380.143].

Fraud

A court of equity has an inherent jurisdiction to relieve against all types of fraud1. Fraud
is based on dishonesty but is closely linked to unconscionable behaviour. By contrast,
fraud at common law is deliberate dishonesty which is intended to cheat a person and to
induce entry into a contract; it is relieved in tort through the action of deceit 2. This deceit
includes fraudulent misrepresentation. Equitable fraud is evidenced in various ways but
deliberate dishonesty is not a necessary part of the offence. Examples of fraud include: a
mortgagee failing to exhibit good faith in selling mortgaged property; taking an interest
with knowledge of a prior though unprotected interest; exerting unlawful pressure on a
contracting party; and failure to perform duties as a trustee. Misrepresentation is
another example where fraud, illustrated by a false statement made by the defendant,
enables the plaintiff to have the contract set aside3. These examples may also provide an
opportunity for relief on other, more defined grounds, if the resort to fraud is
unsuccessful. Perhaps, the essence of equitable fraud is conscious dishonesty in the
failure to perform an obligation, and unmeritorious and unconscionable conduct 4.

There are various unconscionable dealings, based on pressure inducing entry into the
transaction, against which equity will grant relief. Not all of these represent cases of
fraud because only those transactions evidencing unlawful pressure would come under
this head. The inherent jurisdiction of equity to relieve against harsh and unconscionable
bargains is undoubted. The court does so to prevent those who seek to take advantage
of a person with a legal disability from succeeding5.

The equitable doctrine of notice6 is founded on good faith, or the absence of fraud. A
bona fide purchaser who gives value, but who has notice of a prior interest cannot claim
priority for his interest, otherwise he is guilty of equitable fraud.
1 See Earl of Chesterfield v Janssen (1751) 2 Ves Sen 125 at 154, where Lord Hardwicke LC said that the
purpose of equitable relief in such cases was to prevent taking surreptitious advantage of the weakness or
necessity of another, which knowingly to do is equally against conscience as to take advantage of the
ignorance; Zung Zang Wood Products Sdn Bhd v Kwan Chee Hang Sdn Bhd [2014] 2 MLJ 799, FC; Tai Lee
Finance Co Sdn Bhd v Official Assignee [1983] 1 MLJ 81, FC (the question of existence or otherwise of fraud is
one of fact to be determined in the light of the facts and circumstances surrounding each particular case. The
onus is upon the person alleging fraud to prove fraud not on a balance of probabilities but beyond reasonable
doubt); however see also Ang Hiok Seng @ Ang Yeok Seng v Yim Yut Kiu (Personal Representative of the
estate of Chan Weng Sun, decd)[1997] 2 MLJ 45, FC(whether the allegation of fraud in civil proceedings
concerns criminal fraud such as conspiring to defraud, misappropriation of money or criminal breach of trust, it
is settled law that the burden of proof is the criminal standard of proof beyond reasonable doubt and not on
the balance of probabilities. An allegation of criminal fraud in civil or criminal proceedings cannot be based
merely on suspicion or speculation. However, where the allegation of fraud is entirely founded on civil fraud and
not on criminal conduct or offence, a balance of probability is applicable).2 East v Maurer [1991] 2 All ER
733, [1991] 1 WLR 461, CA (Eng); cf Derry v Peek (1889) 14 App Cas 337, HL. In Victor Cham v Loh Bee
Tuan [2006] 5 MLJ 359 at 366, CA, Arifin Zakaria JCA set out the requirements for a successful action in
deceit, indicating that: Fraudulent misrepresentation comes under the tort of deceit. To succeed in his claim,
the respondent needs to establish that he had acted in reliance on the fraudulent misrepresentation and that
the representation was false. He further needs to establish that the first appellant had made those statements
knowingly or recklessly without caring whether it was true or false. And that as a result of reliance on such
representation, the respondent had suffered damage.

In Khoo Kheng Sim v Khoo Chooi Leong [2002] 5 MLJ 345, Low Hop Bing J (as he then was) referred to the
appropriate pleadings and form of action where the allegation was penipuan. His Lordship held (at 348) that if
the plaintiff intended the word penipuan to mean deceit, then it was a claim made by the plaintiff for relief or
remedy for a tort. It is trite law that deceit is an example of a cause of action in tort, in which case, [the
repealed] RHC O 5 r 2(a) [now RC O 5 r 1] would apply. On the other hand, if penipuan was used to mean
fraud, then [the repealed] O 5 r 2(b) [now RC O 5 r 2] would apply so that the mode of commencement
would still be by way of writ.

As to tortious actions for damages for deceit see TORT (2014 Reissue) [380.122][380.129].
3 Redgrave v Hurd (1881) 20 ChD 1, CA (Eng).4 Rasiah Munusamy v Lim Tan & Sons Sdn Bhd [1985] 2 MLJ
291, SC; Nocton v Lord Ashburton [1914] AC 932, HL.5 Earl of Chesterfield v Janssen (1751) 2 Ves Sen 125 at
127, per Lord Hardwicke LC.6 See also [300.040], [300.041]