In the case of Strang v. Russell (1905) 24 N.Z. L.R. 916, it was held that: “In order to establish a case of fraud, * * * the circumstances relied upon must be such as to raise a necessary inference of dolus, and it is not sufficient if they merely amount to that culpa lata upon which the doctrine of constructive or equitable fraud is based. They must be such as must necessarily lead to the conclusion that the party charged has not been merely guilty of negligence but of mala fides, that he has either direct notice or knowledge of some right of a third person to the property that he is acquiring, or that he has wilfully shut his eyes to circumstances, which if looked at in good faith, must necessarily lead to the conclusion that a fraud was being committed upon the rights of another.”
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