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Deceit

Definition:
A misrepresentation made with the express
intention of defrauding someone, which
subsequently causes injury to that person. In
order for a statement to be deceit, it must be
untrue, made with knowledge of its falsity, or
made in reckless disregard of the truth. The
misrepresentation must be such that it causes
harm to another individual.

Element of Deceit
Element:
i.
ii.
iii.

iv.

A false representation
Made knowingly or recklessly
With the intention that it would be acted
upon; and
It is in fact acted upon with the consequence
that damage is incurred by that other party.

Explanation
Explanation:
The party injured must have no means of detecting
the fraud but if he has such means his ignorance
will not benefit him. For example, A wants to sell
the commercial product to B but he knows that the
product will give the bad effect to B. Without notice
anything, B bought it and used it. Later on B found
that the product only make her face becomes
worst.

Sample case
The motive of the defendant or person making the
fraudulent representation is immaterial. The
remedy for deceit is damages, and the primary
object, as in the case for other torts, is to put the
injured party into as good a position financially as
he would have been in if the tort had not been
committed.

Bank Bumiputra Malaysia Bhd v Yeoh


Ho
In Bank Bumiputra Malaysia Bhd v Yeoh Ho Huat the defendant valuer
in his valuation report, valued a piece of land at over RM 64,000. In
reliance on this report, the plaintiff bank approved an application for
RM 20,000 loan for A, the owner of the said land. The land was duly
charged to the plaintiff as security for the loan. A defaulted in his
payments. The land was finally sold for about RM 7,000.
In an action against the defendant for fraudulent valuation, the court
held that an action of deceit would lie at the instance of any person
who had acted on the fraudulent report of a valuer. This was even
more so where the defendant had no honest belief in truth of his
report, or in any cases not caring whether the report was true or false.

Bank Bumiputra Malaysia Bhd v Yeoh


Ho - Continue
Although there was no contractual relationship
between the parties, the defendant ought to have
known that his report would be relied upon by the
plaintiff, and so a duty of care arose. The
requirement of damage was also satisfied as in
reliance on the valuation report the plaintiff had
advanced the loan and consequently suffered
damage when the land was sold at its true value of
RM 7,000 as against the value stated in the report
at RM64,000.

Passing off
Definition:
To misrepresent that one's business is that off, or connected
with another, in a way likely to cause damage.
Making some false representation likely to induce a person to
believe that the goods or services are those of another.
A misrepresentation made by a trader in the course of trade
to prospective customers of his or ultimate consumers of
goods or services supplied by him, which is calculated to
injure the business or goodwill of another trader (in the sense
that this is a reasonably foreseeable consequence) and which
causes actual damage to a business or goodwill of the trader
by whom the action is brought or will probably do so.

Element of passing off


When coming to Court, there are three elements,
often referred to as the Classic Trinity, in the tort
which must be fulfilled. In Reckitt & Colman
Products Ltd v Borden Inc [1990] 1 All E.R. 873 Lord
Oliver reduced the five guidelines laid out by Lord
Diplock in Erven Warnink v. Townend & Sons Ltd.
(1979 AC 731, 742 (HL)) (the "Advocaat Case") to
three elements:
1.
Goodwill owned by a trader
2.
Misrepresentation
3.
Damage to goodwill

Explanation
The plaintiff has the burden of proving goodwill in its goods or
services, get-up of goods, brand, mark or the thing standing for
itself.
The plaintiff also has the burden of proof to show false
representation (intentional or otherwise) to the public to have
them believe that goods/services of the defendant are that of the
Plaintiff. There must be some connection between the plaintiff's
and defendant's goods, services or trade. They must show
likelihood or actual deception or confusion by the public. Deception
or confusion, however, does not consider a "moron in a hurry.
It is the Court's duty to decide similarity or identity of the marks,
goods or services. The criteria are often: aural, visual and
conceptual similarity (often applied in trademarks infringement
cases).

Explanation Continue
For the element of damage to goodwill, there may be a
loss or diversion of trade or dilution of goodwill. The
plaintiff need not prove actual or special damage; real
and tangible probability of damage is sufficient. This
damage should however be reasonably foreseeable. It is
not enough just to show likelihood or actual deception or
confusion.
Ultimately, the Court must use common sense in
determining the case, based on evidence and judicial
discretion, and not witnesses.
Disclaimers may not be enough to avoid passing off or
cause of action.

Erven Warnink v. Townend & Sons Ltd.


One of the instances where passing off is actionable
is the extended form of passing off, where a
misrepresentation as to the particular quality of a
product or service causes harm to another's
goodwill. An example of this is Erven Warnink v.
Townend & Sons Ltd., in which the makers of
advocate sued a manufacturer of a drink similar but
not identical to advocate, but which was
successfully marketed as being advocate.

Erven Warnink v. Townend & Sons Ltd.


- Continue
The extended form of passing off is used by
celebrities as a means of enforcing their personality
rights in common law jurisdictions. Common law
jurisdictions (with the exception of Jamaica) do not
recognize personality rights as rights of property.
Accordingly, celebrities whose images or names
have been used can successfully sue if there is a
representation that a product or service is being
endorsed or sponsored by them or that the use of
their likenesses was authorized when this is not
true