“Fraud unravels everything”

In Lazarus Estates v Beasley [1956] 1 QB 702, [1956] 1 All ER 341 Lord Denning said:

“No Court in this land will allow a person to keep an advantage he has obtained by fraud. No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactions whatsoever; see, as to deeds, Collins v Blantern (1767) (2 Wils. KB 342), as to judgments, Duchess of Kingtonā€™s Case (1776) (1 Leach 146), and, as to contracts, Master v Miller (1791) (4 Term Rep 320).

Lord Parker LJ observed that fraud vitiates all transactions known to the law of however high a degree of solemnity.

The High Court of Australia cited Lazarus Estates with approval in SZFDE v Minister for Immigration and Citizenship [2007] HCA 35 {Link}.

Lazarus Estates was also cited by the Supreme Court of the United Kingdom in Prest v Petrodel Resources Ltd & Ors [2013] UKSC 34.

“Fraud is conduct which vitiates every transaction known to the law. It even vitiates a judgment of the Court. It is an insidious disease, and if clearly proved spreads to and infects the whole transaction (Jonesco v Beard [1930] AC 298 at 301-302).”

In his celebrated speech in Reddaway v Banham 1896 AC199 at 221 , Lord Macnaghten spoke of the various guises in which fraud appears in the conduct of human affairs, saying “fraud is infinite in variety”. A corollary, expressed by Kerr in his “Treatise on the Law of Fraud and Mistake” (1929), is that: “The fertility of man’s invention in devising new schemes of fraud is so great, that the courts have always declined to define it … reserving to themselves the liberty to deal with it under whatever form it may present itself.”

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This tab updated on 30 July 2015