Fergusson facts safries was going to manufacture

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Fergusson Facts: Safries was going to manufacture potatoe chips. Farmers changed their products to potatoes. The manager spoke about Safries in “glowing term”. McMellan gave F a bunch of forms and asked him to fill out a potatoe budget. McMellan (bank manager) filled out a balance sheet form without F’s knowledge and forged his signature. McMellan was sacked and Towner was appointed. Towner discussed the value of the land with fergusson. Towner suggested that it would be worth more than it was. Towner filled out a valuation form and forwarded it to the regional offer. F granted the bank a mortgage, and accepted the loan agreement. Money in excess of 500 000 was forwarded. There was a glut/excess of potatoes. Bank sought the land. HCA: An equity can be enforced against a RP due to conduct before or after registration. Not all species of equitable fraud fall within the definition of statutory fraud. The value of the land was not a term of the mortgage/loan. F did not waiver under any mistake of the terms of the agreement. There was nothing to prevent a ‘meeting of the minds’. The valuation did not change his liability or effect his obligations. For the fraud to be operative it must operate on the mind of the person said to have been defrauded and to have induced detrimental action. The balance sheet was an internal record only. F was not induced to do anything. His ignorance of the forgery did not induce him to do anything – although the forgery was dishonest. HC declared that F was indebted to the bank. F’s counterclaim was remitted to the lower court to reconsider. > Fraud MUST be operative on the mind of the defrauded person Bar v Nicolai Facts: Mr and Mrs Bar owned a block of land in a coastal town in WA. They entered into a sale and buy back arrangement with Mr Nicolai (1 st agreement). Bars sold the land to Nicolai and leased it back from him for three years and gave them the option to buy the land back for $45 000. N ended up selling the land to Mr and Mrs Thompson. In the second agreement clause 4 referred to the 1 st agreement. Bars confirmed that they intended to purchase and sent a 27
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cheque for the deposit. Thompson’s solicitor sent cheque back saying that they no longer wished to sell. HCA: Found in favour of the Bars. All reiterated that mere notice of the bars previous equitable interest was notof itself enough to amount to fraud within the meaning of the TLA. Fraud was only used as an alternative basis – Mason and Dawson JJ. Situation was not upheld as fraud by the other judges. Mason and Dawson JJ maintained that there was an express trust. Wilson and Toohey JJ: Found in favour of the Bars (in personum exception) on the basis of a constructive trust. Considered fraud briefly but say that the evidence did not support that the Thomsons intended to ensure that the Bars would not be able to buy the land back. Although the Thomson’s hoped that that would be the case.
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