Navr-Fail Motors Case

The first action to consider is whether NevR-Fail motors, plaintiff, would be successful in suing Mr Williams, defendant, for the tort of deceit. Deceit is the act of purposefully inducing another to act upon a falsified representation of the truth. To constitute as an act of deceit, the person receiving this representation must be dependent upon its accuracy and suffer detriment as a result.

Sundberg J, in the 2005 decision Tresize v National Australian Bank Ltd, outlines five elements necessary to establishing deceit. Firstly, a ‘representation of fact’ must be identified and understood by another. Secondly, as recognised in Derry v Peek (1889), the defendant must have knowledge that a representation is false or “failing”: an “absence
To establish liability, Mr Williams must satisfy the five elements of deceit. Mr Williams manufactured a false reading on the odometer of his, at the time, motor-vehicle before the date of its sale. The ordinary definition of representation is a statement or claim. To satisfy the first element of deceit, Mr Williams has made a representation by communicating to NevR-Fail that his motor-vehicle had an odometer reading of 40,000km. NevR-Fail subsequently bought this motor-vehicle; therefore, understanding this representation. The odometer was later discovered by a mechanic, under the ownership of Ms Gunn, to have a true reading of 120,000km. As such, because Mr Williams had the knowledge of the truth reading of the odometer, he was aware that his tamper would create a false representation – the component of knowledge satisfies the second element. Because Mr Williams made a conscious effort to tamper with the odometer to lower the kilometres to sell his car at a higher value, he has intentionally induced NevR-Fail. However, had Mr Williams not intended to deceive NevR-Fail to gain a financial profit, he would still be liable under the third element: Pasley v Freeman (1789). The damage later discovered by Ms Gunn’s mechanic would not have occurred with a 40,000km odometer. The 80,000km odometer change has a significant affect upon the value of the motor-vehicle – the price and quality would be considerably different. The true value of the vehicle was $2,000; but Mr William’s profit margin was $4, 000. NevR-Fail motors, had they been aware of the tamper, would have sold the vehicle for $5,000; meaning they sold the car at a loss. Therefore, elements four and five are satisfied due to the fact that NevR-Fail’s reliance on the false representation made resulted in economic