Category Archives: tort of deceit

Deceit and the family

I was sitting in the kitchen having a cup of coffee on Friday when my husband came in from the lounge room, where he had been watching the news. “How can someone fail to prove deceit when he’s found out that two of “his” kids for whom he’s been paying maintenance are not actually his?” my husband asked. He’s not the only one who has been asking this, either.

This seems to be the instinctive reaction to the High Court’s recent case, Magill v Magill [2006] HCA 51. Shortly, the facts of the case were that Mrs Magill had three children during the period of her marriage to Mr Magill (they were married in 1988 and separated in 1992). Mr Magill paid child support payments for those children from 1992 to late 1999. In 2000, DNA tests proved that although Mr Magill was the father of the first of Mrs Magill’s children, he was not the father of the two younger children. The father of the younger children was in fact a man with whom Mrs Magill was having an affair. The High Court unianimously dismissed Mr Magill’s appeal and rejected his claims.

So: how can it be argued that Mr Magill has not be deceived in this scenario? The answer to that is that “deceit” is not being used in the way a layperson would use it. There is absolutely no doubt whatsoever that Mr Magill was deceived. However, “deceit” in this context is being used a legal term of art, in the sense that it refers to the tort of deceit.

The tort of deceit is a common law action which provides compensation for persons who have suffered injury as a result of of dishonesty. More technically, (for the lawyers out there) deceit is made out where, as a result of the false representation made by the defendant, the plaintiff has acted to his or her detriment, and therefore suffered economic loss.

Historically, deceit has been found in a commercial context. The High Court case of Gould v Vaggelas (1984) 157 CLR 215 is a typical example. In that case, the Goulds (through their company, Gould Holdings Pty Ltd) purchased a tourist resort from a group of companies (including South Molle Pty Ltd) for whom Mr Vaggelas acted. As part of the contract of sale, there was a mortgage back to South Molle, for which the Goulds gave personal guarantees. Gould Holdings defaulted on the mortgage and South Molle exercised its power of sale pursuant to the mortgage. There was not enough money to cover the debt. South Molle sued the Goulds under the guarantees. The Goulds counter-sued Mr Vaggelas, arguing that they had been induced to purchase the tourist resort based on certain misrepresentations by Mr Vaggelas as to the profitability of the resort. They successfully sued him for the tort of deceit.

Is anyone still with me after this point? How many people nodded off, or skimmed over that paragraph? Hopefully you got enough of a sense of the context in which the tort of deceit generally arises. Probably you found that example somewhat dry (unless, of course, you happen to enjoy this kind of law, which I certainly do, mmm yes I do, because I am incontrovertibly a sick puppy in this respect).

The problem faced by Mr Magill was that he was trying to get the High Court to extend this commercial principle to a very personal, private family situation. But this was not his only problem. He also needed to point to the economic loss flowing from the “representation” by his wife that he was the father of her children. An important point to be made is that Mr Magill was not suing for the child support payments which he had made up until 1999. He was suing for damages to compensate for psychiatric injury (namely, severe anxiety and depression) resulting from the discovery that “his” children were not, in fact, his. He also claimed for related loss of earnings (for example, he claimed compensation for the time he took off work for the birth of each of the second and third child).

It is not like Gould v Vaggelas, where the Goulds could point to certain losses their company had made as a result of its purchase of the tourist resort. As Gleeson CJ cogently pointed out in his judgment in Magill:

“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.”

This was not a suitable case for the principle to be extended beyond a commercial context. I think the High Court made the right decision. If Mr Magill’s cause were upheld, if a wife suspects a child is not her husband’s, would she have a legal duty to voice this suspicion to the husband? You can’t impose a duty like that in law, no matter what one’s moral duty is. What if a husband suspects he may have fathered a child out of wedlock? Does he have a duty to tell his wife too?

I agree with the Court that it is not appropriate for the law to get involved with private, personal disputes such as these. Essentially, Mr Magill wants to get revenge on his ex-wife for cheating on him which, while understandable, is not the kind of thing for which the law of deceit should be used.

The lawyer for Mr Magill said: “What they (the judges) are saying is that if a child is born within a marriage it’s presumed to be a child of that marriage, end of story.” Well, I should hope so, too, otherwise we live in a very sad society. Sadly, as this case shows, that presumption is not always true. But what can you do? You can’t force every child to have DNA tests at birth just so you are sure that you are the father of the child. This would be ridiculous and invasive. Personlly, I would find the very notion offensive.

Mr Magill may have lost his case, but ultimately, unfortunately, it seems no one’s a winner in this scenario. I feel very, very sorry for Mr Magill. It is a terrible situation in which to find oneself. However, I do not think that an award of damages for deceit is the best way to resolve his dispute with his ex-wife. I feel very, very sorry for the children too. Apparently, according to the newspaper, he has not had contact with the three children since 2000. They have lost the person whom they knew as their “father” from their birth (even if he was not the genetic father of two of the children). I think they are the ones I feel sorriest for.

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