Misrepresentation Act 1972

This Act may be cited as the Misrepresentation Act 1972.

Where, in the course of a trade or business, a misrepresentation is made by the person by whom the trade or business is conducted, a person duly authorised to act on his or her behalf, or a person acting in the course of his or her employment—

for the purpose of causing or inducing any other person to enter into a contract; or

for the purpose of causing or inducing any other person to pay any pecuniary amount, or to make over or transfer any real or personal property, to the person by whom the representation is made or any other person, the person by whom the trade or business is conducted, and the person by whom the representation is made, are each guilty of an offence.

Maximum penalty:

in the case of a body corporate—$100 000; or

in any other case—$20 000.

Where in any proceedings under this section it is proved that a misrepresentation in fact acted as a material inducement to any person—

to enter into a contract; or

to pay any pecuniary amount, or to make over or transfer any real or personal property, to the person by whom the representation was made, or any other person, and that, in consequence, the person by whom the representation was made, or a person on whose behalf, or in whose employment, that person was acting, derived any direct or indirect consideration or material advantage, it will be presumed, in the absence of proof to the contrary, that the representation was made for the purpose of inducing the person to whom it was made to enter into that contract, to pay that pecuniary amount, or to make over or transfer that real or personal property, as the case may require.

It is a defence to a prosecution under this section—

that the person by whom the representation was made believed upon reasonable grounds that the representation was true; or

where the defendant is not the person by whom the representation was made—

that the defendant took all reasonable precautions to prevent the commission of offences against this section by persons acting on his or her behalf, or in his or her employment; or

that the defendant did not know, and could not reasonably be expected to have known, that the representation had been made, or that it was untrue.

For the purposes of this section a representation constitutes a misrepresentation if it is false in any material particular.

This section does not affect any civil remedy, or any other statutory sanction or remedy, in respect of a misrepresentation.

Proceedings for an offence against this section must not be commenced unless the Attorney-General has consented to the commencement of those proceedings.

In any proceedings for an offence against this section, an apparently genuine document purporting to record the consent of the Attorney-General to the commencement of those proceedings will be accepted as proof of that consent in the absence of evidence to the contrary.

In this Part—

court includes an arbitrator.

Where a misrepresentation has been made by reason of which any party to a contract would, but for any one or more of the following considerations—

that the misrepresentation has become a term of the contract; or

that the contract has been performed; or

that conveyances, transfers or other documents have been registered at any public registry office in pursuance of the contract, be entitled to rescind the contract, that contracting party is entitled to rescind the contract despite that consideration or those considerations.

This section does not invest a contracting party with a right to rescind a contract where, in equity, such a right would be barred by reason of the fact that a third party has in good faith and for valuable consideration acquired an interest in the subject-matter of the contract.

This section does not affect any remedy available under the Land Agents Act 1994, Conveyancers Act 1994, Land Valuers Act 1994 or Land and Business (Sale and Conveyancing) Act 1994.

Where a contracting party is induced to enter into a contract by a misrepresentation made—

by another party to the contract; or

by a person acting for, or on behalf of, another party to the contract; or

by a person who receives any direct or indirect consideration or material advantage as a result of the formation of the contract, and any person (whether or not he or she is the person by whom the misrepresentation was made) would, if the misrepresentation had been made fraudulently, be liable for damages in tort to the contracting party subjected to the misrepresentation in respect of loss suffered by him or her as a result of the formation of the contract, that person is, subject to subsection (2), so liable to that contracting party, in all respects as if the misrepresentation had been made fraudulently and were actionable in tort.

It is a defence to an action under subsection (1)—

that the person by whom the representation was made had reasonable grounds to believe, and did believe, that the representation was true; or

that the defendant was not the person by whom the representation was made and did not know, and could not reasonably be expected to have known, that the representation had been made, or that it was untrue.

Where in any proceedings before a court, it is proved that a party to a contract has rescinded, or is entitled to rescind, the contract on the ground of misrepresentation, the court after consideration of the consequences of rescission, and the consequences of a declaration under this section, in the circumstances of the case, may, if it considers it just and equitable to do so, declare the contract to be subsisting and award such damages as it considers fair and reasonable in view of the misrepresentation.

A declaration under subsection (3) has effect according to its terms and is a bar to rescission.

Where a contract has been rescinded but is subsequently declared to be subsisting under subsection (3), the respective rights and liabilities of the contracting parties will be determined in all respects as if the contract had never been rescinded.

In assessing any damages under this section, a court must take into consideration any award of damages under any other provision of this section, or of damages or compensation under any other law, and in assessing damages or compensation in any proceedings under any other law relating to a contract, a court must take into consideration any award of damages under this section.

If any contract contains a provision that would, but for this section, exclude or restrict—

any liability to which a party to a contract may be subject by reason of any misrepresentation made by that party before the contract was made; or

any remedy available to another party to the contract by reason of such a misrepresentation, that provision has no effect except to the extent (if any) to which, in any proceedings arising out of the contract, the court may allow reliance on it as being fair and reasonable in the circumstances of the case.

This Part does not apply in relation to a misrepresentation, or a contract, made before the commencement of this Act.