Jones v Dumbrell; 21 Feb 1968

References: [1981] VR 199, 5 ACLR 417, [1981] VicRp 21
Links: Austii
Coram: Smith J
(Supreme Court of Victoria) Dumbrell had induced shareholders in companies running a business to sell their shares to him. He represented that he would run the business himself. The shareholders had a strong preference to have Dumbrell, rather than an unknown third party, run the business and for that reason sold their shares at an under value. The defendant decided to sell the shares to outsiders rather than run the business himself. The representation was not proved to be false when made.
Held: Smith J said: ‘When a man makes a representation with the object of inducing another to enter into a contract with him, that other will ordinarily understand the word representor, by his conduct in continuing the negotiations in concluding the contract, to be asserting, throughout, that the facts remain as they were initially represented to be. And the representor will ordinarily be well aware that his representation is still operating in this way, or at least will continue to desire that it shall do so. Commonly, therefore, an inducing representation is a ‘continuing’ representation, in reality and not merely by construction of law.’ and ‘I accept, with respect, the statement by Cussen, J. In Dalgety and Co Ltd v Australian Mutual Provident Society [1908] VicLawRp 70; [1908] VLR 481, at p. 506, that ‘the rule is that prima facie (the representation) is to be taken as continuing up till the moment when the contract is completed’. But this, I think, merely lays down a presumption of fact, justified by ordinary human experience, leaving the matter to the court for determination as a question of fact on the whole of the evidence.’
This case is cited by:

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