Main issue: Is the P likely to succeed in an action under the tort of negligence misstatement against the D? Sub-issue 1.1: Duty of Care (NO 3RD PARTY)
The tort of negligent misstatement was effectively established since the case of (Hedley Byrne v Heller). Law stipulates that there must be a special relationship (an extension of “neighbour principle” established in Donoghue v Stevenson) for between P and D for a DOC to rise in the tort of negligent misstatement: (L Shaddock v Parramatta City Council): * The subject matter was/was not serious because…
* (Constructive knowledge) The P does / doesn’t know that he/she is being relied upon, proven by… * (Reasonable reliance) The P act on the advice in reasonable / unreasonable circumstance (it was not reasonable for the P to solely rely on the information prepared, and it would have been appropriate to seek extra advice: MLC v Evatt); (effect of disclaimer: (Hedley Byrne v Heller) justified by… Where the reliance is not reasonable: (Ta Ho Ma v Allen) and (Tepko v Water Board). * The D must know that he/she is being trusted by P because… During the pre-contractual negotiations, professional advisers (lawyers, accountants and engineers) owe a duty to take reasonable care in providing service to its clients in both contract and tort: (Esso Petroleum v Mardon). Sub-issue 1.2: Duty of Care (WITH 3RD PARTY)
Law stipulates that in the case of 3rd party, a DOC must arise (Esanda v PMH); (R Lowe Lippmann v AGC) where there are: * A clear assumption of responsibility by D.
* A reasonable reliance by the P
* A direct request of advice from P to D (L Shaddock v Parramatta City Council) *whether P and D has been in contact
Mere knowledge by a defendant that the advice / information will be communicated to the P is not enough. *(Morgan Crucible v Hill Samuel Bank): DOC owed when 1) the P is known; 2) D makes express representation with a view to...
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