| CITATION | [1927] AC 17 |
| DATE OF JUDGMENT | 20 July 1926 |
| COURT | Privy council |
| APPELLANT | Robert Hugh Bisset |
| RESPONDENT | Thomas Vernon Wilkinson |
| BENCH | Viscount Dunedin, Lord Atkinson, Lord Carson, Lord Merrivale |
INTRODUCTION
The fine balance between autonomy and protection is frequently tested in the field of contract law, and nowhere is this more apparent than in the complexities of cases involving misrepresentation. With its complex legal system, the jurisdiction of New Zealand has seen a wide range of contractual disputes that demonstrate the intricate relationship between parties’ rights and obligations. This article delves into a critical misrepresentation case in New Zealand, elucidating the legal complexities surrounding this intricate matter.
The idea of misrepresentation, which is ingrained in contract law, is a powerful tool that can warp the fundamental nature of a contractual arrangement. Our tour of the legal system will highlight the changing views of judges on misrepresentation and show the careful balance that New Zealand courts aim to maintain when ensuring contractual justice.
FACTS OF THE CASE
- In May 1919, Mr. Bisset made a legally binding agreement to sell Mr. Wilkinson two adjacent farmland blocks for £13,260 while he was in New Zealand.
- 834 and 141 hectares (2,062 and 348 acres) made up each of these blocks.
- “With a good six-horse team, his idea was that the farm would carry 2,000 sheep,” Bisset informed Wilkinson during the negotiating process.
- But after making the purchase, the defendant learned that the land could not support this many sheep as it was and that this was only feasible with extremely careful land management.
- Wilkison concluded that the land could not sustain 2,000 sheep after two years of unsuccessful farming, so he filed a lawsuit for misrepresentation in an attempt to revoke the contract and recover his money.
ISSUES RAISED
Whether the land’s carrying capacity estimate made by the seller was a verifiable false statement of fact or just his opinion?
CONTENTIONS OF APPELLANT
- The appellant through this suit wants to recover a sum, of money payable to him under a contract for sale.
- The plaintiff at the hearing asserted that, “I told them that if the place was worked as I was working it, with a good six horse team, my idea was that it would carry two thousand sheep. That was my idea and still is my idea. I do not dispute that they bought it would carry the two thousand sheep.”
CONTENTIONS OF DEFENDANT
- Defendant by way of counterclaim alleged misrepresentation and claimed damages or revocation of the agreement.
- The defendant, who was a sheep farmer purchased the land believing on the appellant’s statement that it would carry 2000 sheep.
- After two years of unsuccessful farming, he concluded that the statement was not true and there was no such capacity of the land to carry that number of sheep.
- As a result, he wanted to revoke the contract and claim his money back.
JUDGEMENT
- The claimant’s statement was deemed to be merely an opinion regarding the land’s potential, based on the claimant’s farming experience and the defendant’s knowledge of the current stock.
- Both parties recognized at the time of the agreement that Bisset had not utilized the land for sheep farming and that any claim made about the farmland’s potential would only be an estimate.
- For this reason, the statement was not deemed to be a representation.
- The magistrate further stated: In determining the meaning that the appellant’s statement about the two thousand sheep conveyed to the now respondents, the most important thing to keep in mind is that, as both parties knew, the appellant had never carried on sheep-farming upon the unit of land in question, and it appears that no one else has either. As a separate holding, that land had never been used for sheep farming.
- Regardless, the claimant’s appeal was granted and the contract could not be canceled because the defendant was unable to prove that the land could not support the 2000 sheep that the claimant had claimed.
MISREPRESENTATION IN ENGLISH LAW
- A false or deceptive statement of fact made by one party to another during negotiations that leads to the other party signing a contract is considered a misrepresentation in common law jurisdictions. In addition to typically rescinding the agreement, the party that was duped may also occasionally receive damages (or instead of rescission).
- Opinion statements typically don’t qualify as misrepresentations because it would be absurd to regard one’s own beliefs as “facts.”
- The following constitute an actionable misrepresentation:
- The representee relied on a statement of fact provided to them by the representor or on their behalf.
- The representor intended for the statement to persuade the representee to sign the contract.
- The representee was genuinely persuaded to sign the contract by the statement.
- The declaration possessed the qualities of a representation.
- The statement was untrue.
CONCLUSION
- The case makes it clear that while statements of opinion, intention, or law are not considered misrepresentations, misstatements of “fact” might be. On the other hand, when one party has extensive knowledge of the matter (making his “opinion” essentially a “statement of fact”), the false statement turns into a legally actionable misrepresentation.
ANALYSIS
- The appellant’s favorable judgment represents a major turning point in the development of the law pertaining to misrepresentation.
- The court’s ruling serves as further evidence of the rule that claims of misrepresentation cannot be based solely on opinions without supporting factual errors.
- This historic decision emphasizes how crucial it is to discern in legal matters between statements of fact and opinions expressed by the individual.
- The ruling preserves the fundamental idea that misrepresentation claims ought to be based on actual, verifiable misstatements rather than just opinions. It also protects the integrity of contractual relationships.
- By ruling in the appellant’s favor, the court raises important issues of justice and legal clarity, setting a precedent that will be followed in related cases for years to come.
REFERENCES
https://www.casemine.com/judgement/uk/5b2897dd2c94e06b9e19c802
https://www.lawteacher.net/cases/bisset-v-wilkinson.php
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