3) Norris had decided for some time that he wanted to purchase a motel. After looking at several different areas, he settled on Port Stephens in New South Wales as offering him both the potential for a business and the lifestyle he was seeking. He rang a number of real estate agents, inquiring whether they had any motels listed for sale. He finally found a motel and general business listed with an estate agent called Evatt. Evatt told Norris that once he got going in this business it would be a gold mine.
Norris sought an accountant’s advice and then proceeded to buy the business. Within six months of buying the motel and general business Norris was broke because there were neither the tourist numbers nor the local population to sustain the business. Can Norris sue the estate agent for his statements about the business? Will he succeed? Explain your answers. Yes, Norris can sue the estate agent for the statements about the business.
“People who unintentionally or carelessly give false advice, information or opinions on business or professionals matter may be liable for negligent misstatement if the receiver reasonably relied on the false material and suffered economics loss” Here, Norris being an indivisual interested to buy a property as mentioned above who even did some homeworks before buying it. Evatt being a professional agent was his duty to inform Morris about the position since it is his profession to find out whereabouts of that place.
Norris has full right to know about pros and cons of buying that property . In this kind of matter an advice or suggestions from responsible party makes a lot of influence in making descision to the buyers so here Evatt owes a responsibility of providing proper information. We can take example of Shaddock v Parramatta City Council for negligent misstatement. Defendant Evatt was fully responsible to provide proper guidelines which he did not and even predicted false statement such as “goldmine” and due to which Norris bought the place and went broke.
So,the case is more likely to succeed because Evatt did misleading and deceptive conduct which is likely to breach of law under s 52 and s 74. It breaches negligence law under tort. According to negligence law principles the defendants have been found liable for such conducts. ——————————————– [ 1 ]. Australian Business Law 6th Edition by Roger Vickery and Wayne Pendleton. [ 2 ]. Shaddock & Associates Pty LTD & Anor V Parramatta City Council(1981)55 ALJR713 [ 3 ]. Section 18 Australian Consumer Law [ 4 ]. Modern negligence law principles estd(1932).