Stroud v CMZZJ Investments Pty Ltd

Stroud commenced proceedings in the Supreme Court of New South Wales against CMZZJ Investments Pty Ltd seeking to have a contract set aside on the basis that it was procured by fraud and/or undue influence. The contract was for the sale of land and the parties had a prior relationship as principal and agent in a property development business. The defendant denied the allegations of wrongdoing and the case proceeded to trial. The court was required to determine whether Stroud had discharged the onus of proving that the contract was procured by fraud or undue influence and whether it was open to the court to set aside the contract on that basis.

The court found that Stroud had not discharged the onus of proving that the contract was procured by fraud. The court accepted that Stroud had shown that there was a failure to disclose material facts but that it had not been shown that the defendant had knowingly or recklessly made a false representation. The court also found that Stroud had not discharged the onus of proving that the contract was procured by undue influence. The court held that the evidence did not support a finding that the defendant had abused a relationship of influence or that Stroud had been induced to enter into the contract because of that abuse. The court dismissed Stroud’s claims and made orders for costs.