Conspiracy to Defraud

The civil tort of conspiracy is committed when two or more persons combine to gether either

  1.  to commit an unlawful act with the intention (actual or constructive) of harming the plaintiff’s economic interests, or
  2. to perform an act, if carried out by a single person, would not be unlawful, with the predominant object of so harming the plaintiff

and in either case, the acts cause damage to the plaintiff

The High Court settled the law with regard to conspiracy by lawful means in McKernan v Fraser (1931) 46 CLR 343 and that concerning conspiracy by unlawful means in Williams v Hursey (1959) 103 CLR 30.

The essence of the offence is the making of the agreement {Peters v R (1998) 192 CLR 493; [1998] HCA 7 at [55] per McHugh}.

Whether the defendants have concurred in the use of Lawful or unlawful means to injure the plaintiff, the latter must show:

  1. That there was an agreement between two or more persons
  2. which was carried into execution, and
  3. which caused damage

The essential mental element of conspiracy are the intention to commit the substantive offence and a knowledge of the essential matters constituting the offence.

Although the criminal law regards a conspiracy as being constituted by no more than the agreement between two or more persons to commit a crime, liability in tort for conspiracy arises only when an agreement is carried into execution, in whole or in part { McKernan v Fraser (1931) 46 CLR 343 at 407}.

A corporation may be a party to a conspiracy {R v McDowell [1966] 1 QB 233; 1 All ER 193 at 197-200}.

Directors of a company may be guilty of conspiracy against the company {R v Haher (1986) 83 FLR 332; [1987] 1 Qd R 171}.

Conspiracy to Defraud

All jurisdictions recognise an offence of conspiracy to defraud or to cheat and defraud at either common law or under statute. The common law applies in New South Wales, South Australia and Victoria.

(SA) Criminal Law Consolidation Act 1935 s 133

(Vic) Crimes Act 1958 s 321F(1), 321F(2) {Although common law conspiracy has been abolished in Victoria, the common law offences of conspiracy to defraud and conspiracy to cheat and defraud has been retained} Walsh v R [2002] VSCA 98 at [66-69]}

An exhaustive definition of conspiracy to defraud at common law is difficult to produce, but typically involves an agreement to prejudice or imperil the legal rights or interests of another by the use of dishonest means {Peters v R at [30], [33], [74] and [75]}

The High Court in Peters v R stated at [30]:

“Ordinarily, however, fraud involves the intentional creation of a situation in which one person deprives another of money or property or puts the money or property of that other person at risk or prejudicially affects that person in relation to “some lawful right, interest, opportunity or advantage”[49], knowing that he or she has no right to deprive that person of that money or property or to prejudice his or her interests[50]

[49]    R v Kastratovic (1985) 42 SASR 59 at 62 per King CJ.

[50]    See Archbold Criminal Pleading, Evidence and Practice, (1996), vol 2 at 17-89, 17-94.  See also R v Sinclair (1968) 52 Cr App R 618.

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