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Facts Mr Wilkinson and Mr Bisset entered into a contract in May, 1919, whereby Mr Bisset would purchase two adjoining

blocks of land called Homestead and Hogans, in Avondale, New Zealand.The two blocks comprised 2062 and 348 acres (1.41 km2) respectively, the two parties reaching agreement, for 13,260l. During negotiations Mr Wilkinson stated that he believed the land would hold 2000 sheep, if cultivated and used correctly. Subsequently, it was discovered the land did not hold 2000 sheep, and the claimant brought an action for misrepresentation. Advice The Privy Council advised that the statements made by Mr Wilkinson were not intended to be a serious representation, qualified by any knowledge. It was known to both the parties at the time of contracting that the defendant had not used the land for sheep farming, and thus any statement as to the capacity would surely be an estimate. Lord Merrivale stated that important considerations were the material facts of the transaction, the knowledge of the parties respectively, and their relative positions, the words of representation used, and the actual condition of the subject-matter spoken of Then he said, In ascertaining what meaning was conveyed to the minds of the now respondents by the appellant's statement as to the two thousand sheep, the most material fact to be remembered is that, as both parties were aware, the appellant had not and, so far as appears, no other person had at any time carried on sheep-farming upon the unit of land in question. That land as a distinct holding had never constituted a sheep-farm

In addition, it was noted that the defendants failed to prove that the farm if properly managed was not capable of being occupied by two thousand sheep. Viscount Dunedin, Lord Atkinson, Lord Phillimore and Lord Carson agreed. Royal Mail Case The Royal Mail Case or R v Kylsant & Otrs was a noted English criminal case in 1931. The director of the Royal Mail Steam Packet Company, Lord Kylsant, had falsified a trading prospectus with the aid of the company accountant to make it look as if the company was profitable and to entice potential investors. Following an independent audit instigated by HM Treasury, Kylsant and John Moreland, the company auditor, were arrested and charged with falsifying both the trading prospectus and company records and accounts. Although they were acquitted of falsifying records and accounts, Kylsant was found guilty of falsifying the trading prospectus and sentenced to twelve months in prison. The company was then liquidated, and reconstituted as The Royal Mail Lines Ltd with the backing of the British government. As well as its immediate impact, the case instigated massive changes in the way companies were audited. The case highlighted flaws in the way company accounts were reviewed, and "probably had a greater impact on the quality of published data than all the Companies Acts passed up to that date".[1] The case "fell like an atomic bomb and profoundly disturbed both the industrial and the accountancy worlds",[1] and has also been linked to reduced public trust of big businesses. The case is also seen as the reason for the demise of accounting with the aid of secret reserves.[1]

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