Six months later, the same client comes to see you again. She shows you an advice received recently from the partnership¡¦s investment banker, Selby Bank, which suggests that the partnership should engage in some risky behaviour because it will produce a large profit. The partners acted in reliance upon the advice from Selby Bank, which said ¡¥you need not spend money to remove the toxic waste under the new block of flats you are building in Epping because no one will ever know¡¨. The partnership now finds its development discussed in a front page article in today¡¦s Sydney Morning Herald in a scandal over the toxic waste. As a consequence, the partnership¡¦s external financier (Blazey Bank) is refusing to provide the rest of the loan funding to complete the development. Each partner will lose $1million as a result.
Under these circumstances, can the partners sue Selby Bank for the losses incurred? In your answer, you are to apply both the common law and statutory law on the relevant area of negligence. For statutory law, you are to refer to the Civil Liability Act 20021 (NSW
Thank you for using the Jiskha Homework Help Forum. For one thing, NEVER do business with the Selby Bank! I can't believe a bank would give such bad advice nor that it would encourage a client to take a risk. As soon as you hear the words "no one will ever know" you have to be aware that it is something illegal!
If you need the Civil Liabiity Act 20021 just ask. "Buyer Beware" means if the partnership signed a contract with the bank it doesn't sound like grounds to later sue that bank!
I'll see what else I can find for you.
Sra
Sorry that I could not find that law online.
Many people seem "sue happy" but a good lawyer may give advice freely or take the case "pro bono." It would seem the partnership would have to proove monetary loss.
Sra
To determine whether the partners can sue Selby Bank for the losses incurred due to its advice, we need to examine both the common law and statutory law on negligence. Specifically, we'll refer to the Civil Liability Act 2002 (NSW) for the statutory law perspective.
Under common law, a claim of negligence generally requires the claimant to establish four elements: duty of care, breach of duty, causation, and damages. Let's analyze these elements in the context of the given scenario:
1. Duty of care: The partners would need to establish that Selby Bank owed them a duty of care. Generally, a duty of care exists when there is a relationship of proximity between the parties and it is reasonably foreseeable that the advice provided by the bank could cause harm or economic loss to the partners. In this case, since the partners relied upon the advice and acted in reliance upon it, it can be argued that a duty of care existed.
2. Breach of duty: The partners would need to show that Selby Bank breached its duty of care by providing negligent advice. Negligence is demonstrated when a person fails to exercise the reasonable standard of care expected in a particular situation. Here, if the advice given by Selby Bank, namely suggesting that the toxic waste could be left under the new block of flats without anyone knowing, was negligent and fell below the reasonable standard of care, a breach of duty of care could be established.
3. Causation: The partners would need to establish that Selby Bank's breach of duty caused them to suffer the losses incurred. In this case, if it can be shown that the scandal and resulting refusal of loan funding by Blazey Bank was a direct consequence of the advice provided by Selby Bank, causation could be established.
4. Damages: The partners would need to prove that they suffered actual damages as a result of Selby Bank's breach of duty. Since it is mentioned in the scenario that each partner will lose $1 million due to the refusal of loan funding, there is a clear element of damages.
Now, let's consider the application of statutory law, specifically the Civil Liability Act 2002 (NSW). This Act governs the principles of negligence and provides guidance on the standard of care expected in a negligence claim.
Section 5B of the Civil Liability Act establishes a general principle that a person is not negligent in failing to take precautions against a risk of harm unless it was a risk of which the person knew or ought to have known. It also requires the court to consider whether a reasonable person in the defendant's position would have taken precautions against that risk.
In this case, the partners could argue that Selby Bank knew or ought to have known about the risks associated with toxic waste and the potential harm or economic loss it could cause. Additionally, the partners could argue that a reasonable investment banker should have taken precautions, such as advising the removal of the toxic waste, particularly considering the potential impact it could have on the development project and subsequent financing.
Therefore, based on both the common law principles of negligence and the guidance provided by the Civil Liability Act 2002 (NSW), it appears that the partners may have a viable claim against Selby Bank for the losses they incurred as a result of relying on its advice. However, the ultimate determination would depend on the specific facts and evidence presented in court.