Business Law | Workshop Assessment

$15.00

Problem-solving Question 1 – Week 9 Workshop Assessment
Students are to electronically submit their answer to the workshop problem for assessment
(weighting 15%). The assessment criteria and submission point can be found under “Assessment”
folder in Learning @ Griffith.
Due Date for submission is Tuesday, 4 th October, 2016 at 1.00 pm.
Workshop 9 Problem-solving Question

Jenny has recently retired. She receives a golden handshake of $500,000 from her
employer. Jenny wants to invest the $500,000 in real estate. Angie, a real estate
agent contacts her with a proposal to invest in the property development of a small
island in Moreton Bay. Angie assures Jenny that if she invests $500,000 into the
“Sure-thing Property Development Pty Ltd” (Sure-thing) she will triple her investment
in six months. Jenny contacts George, her financial planner, asking for his advice.
George tells Jenny that he would need to conduct a due diligence review of the
company before he could make any recommendation about investing. The due
diligence report would cost $12,000 and take approximately a month to complete.
Jenny has neither the time, nor the money to wait. She asks her friend, Richard,
who is studying accounting and financial planning at Griffith University to look at the
proposed investment. Richard looks at the financial statements of Sure-thing and
tells Jenny it is a good investment. Richard does NOT charge Jenny for his services
as they are friends. Unfortunately, Richard has misread the accounts of Surething,
which is almost insolvent. Jenny invests her money and Surething immediately goes
into liquidation and Jenny loses $500,000. Jenny discovers that many financial
planners/ real estate property developers were aware of the poor financial position of
the company and warnings had been published in several financial/ accounting
journals and property magazines that Surething was in financial trouble.
(a) Discuss whether Jenny has any claim for damages against either Angie
or Richard? Explain your answer fully making reference to appropriate
case law and relevant sections of the Civil Liability Act 2003 (Qld) and
s18 Australian Consumer Law.

(10 marks)
(b) Can Angie or Richard raise any defences to the negligence action
initiated by Jenny? Explain your answer fully making reference to
appropriate case law and relevant sections of the Civil Liability Act 2003
(Qld).

(5 marks)
(Total Marks for this question 15)

Description

According to Division 5, s. 20 of the Civil Liability Act 2003 (Qld)[1], a professional is a personal who is practicing a profession. S. 22 of the same act stipulate that a professional does not breach duty of care is the advice given is widely accepted by the professionals opinion in the field at the time although this does not apply in failure to give a warning, advice or other information. A defendant is considered not to have a duty of care to the plaintiff to warn of an obvious risk (s. 15(1) of the Civil Liability Act 2003 (Qld)[2], but this does not apply if the plaintiff had sought informationor advise about the risk (s.15 (2)(a)), defendant is required by law to warn plaintiff (b), and lastly, defendant is a professional (c).A person is therefore considered not to have breached duty of care against a risk in line with s. 9 of the Civil Liability Act 2003 (Qld)[3] if the risk was foreseeable, harm is not significant, and in such circumstances, a reasonable person