Negligent Advice and Untrue Information: Legal Analysis

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Title Page
Name of the student
Student ID

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Contents
Question 1...................................................................................................................................................3
Issue A.........................................................................................................................................................3
Relevant Law...........................................................................................................................................3
Application of Law..................................................................................................................................4
Conclusion...............................................................................................................................................4
Issue B.........................................................................................................................................................4
Relevant Law...........................................................................................................................................5
Application of Law..................................................................................................................................5
Conclusion...............................................................................................................................................6
Question 2...................................................................................................................................................6
Issue A.........................................................................................................................................................6
Relevant Law...........................................................................................................................................6
Application of Law..................................................................................................................................6
Conclusion...............................................................................................................................................7
Issue B.........................................................................................................................................................7
Relevant Law...........................................................................................................................................7
Application of Law..................................................................................................................................7
Conclusion...............................................................................................................................................7
Issue c..........................................................................................................................................................7
Relevant law............................................................................................................................................7
Application..............................................................................................................................................8
Conclusion...............................................................................................................................................8
Issue D.........................................................................................................................................................8
Law..........................................................................................................................................................8
Application..............................................................................................................................................8
Conclusion...............................................................................................................................................9
Reference List...........................................................................................................................................10

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Question 1
Issue A
Whether Magnolia can sue Laura for providing negligent advice?
Relevant Law
In Donoghue v. Stevenson [1932], every defendant is duty bound to provide protection to the
plaintiff from his actions and omissions. This law of negligence has evolved with the passage of
time and now includes statements and advices from experts. (Gibson, 2018)
The law of negligent statements simply establishes that any person who is making any
professional statement or furnishing advice with the familiarity that the claimant is relying on his
statements, then, the defendant is obligated to ensure that no harm must be caused to the claimant
because of his advice provided there is proximity amid the advisor and the relying party. The
duty not to give negligent advices is found in Hedley Byrne & Co Ltd v Heller & Partners Ltd
(1964). Thus, to impose the legal duty on the adviser (defendant), the main elements:
i. Duty of care – The advisor when giving advice is under the duty to ensure that the
plaintiff who is relying and acting on the advice should not suffer with any harm
(Candler v Crane, Christmas & Co [1951]. There are few elements which must be
present before the duty of care is imposed:
a. In Mutual Life and Citizens Assurance Co Ltd v Evatt (1968), the duty only exist
when the advisor is duly aware that the claimant would rely on the advice before
undertaking any further actions or omissions.
b. That there should be some sort of connection amid the parties which implies that
the advice will impact the plaintiff directly (San Sebastian Pty Ltd V Minister
Adminstering The Enviromental Planning And Assessment Act (1986).
c. That it is necessary that the advisor can reasonably foresee the presence of the
plaintiff (Caparo Industries PLC v Dickman [1990]
d. That the advisor is controlling the acts of the plaintiff by furnishing the advice
(Hill v Van Erp - [1997])
ii. Violation – In Karrawirra Wines v State Bank of South Australia [1994] when the
advisor does not cater the advice as per the level of heed that is desired in the
situation, then, there is violation.

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iii. Damages – When the claimant suffers with injuries because of the advice then
damages are caused provide the loss is reasonable anticipated.
Application of Law
Magnolia started her cooking business (‘Thermo-delicious’) and wants to expand her business.
She met Laura Smartypants, an accountant/financial adviser. Laura agreed that she will prepare a
business/ expansion plan for her.
Now, Laura owns a duty of care towards Magnolia as Luara is aware that Magnolia is relying on
her advice before undertaking expansion plan. Laura is in the dominant position and is sharing
the relationship of proximity.
Laura suggested that her position is very sound that she can scrounge money. However, Laura
admitted that the report prepared by her was no correct as the already existing liabilities are not
taken into account and the costs of the establishment was also not considered.. She also admitted
that relied on her tarot cards.
So, the level of care that is expected from Laura fall short considering the fact that Laura is
aware Magnolia is relying on her advice before seeking expansion plan.
Magnolia acted on the advice of Laura. She borrowed $69000 from Usurer’s Credit in July 2018.
She signed a 5 year lease, purchased thermomixers and hired a designer fir her webpage..
Because of the wrong advice the business of Magnolia failed and she suffer losses. The losses
are the direct result of the wrong advice.
So, Laura is negligent.
Conclusion
It is thus concluded that Laura has furnished negligent statements and face the consequences of
the losses that are faced by Magnolia.
Issue B
Whether Jake can sue the Council for providing untrue information?
Relevant Law
The law of negligence owns a duty of heed on every defendant towards the claimant who is the
neighbor of the defendant. The duty of care is also to be furnished by the government authorities
and the local councils (Capital & Counties plc v Hampshire County Council [1997].
The elements which required to be prove includes: