Advice Anil, Clive and the bank for their possible claims

LW203 Tutorial & Online Discussion Forum 7 (Week 9) Topic 10: Pure Economic Loss Instructions Read the following problem scenario and the following questions. You must use the IRAC method when writing your answer. You must also reference according to the SOL Referencing Guide (available on Moodle under Course Assessments]. Anil was considering using an inheritance to buy a business, CDE Ltd, which specialised in converting the garages of residential properties into additional living space. In order to complete the purchase, Anil also needed additional finance. Since this project involved substantial investment, Anil wanted to make sure that it would be a wise investment. Anil approached Bobby. who was a business consultant, to prepare a report advising on the prospects of the business and whether CDE Lid was a suitable investment. Anil informed Bobby that the report would be shown to potential investors. Bobby had set up his new business consultancy firm in 2020 and was currently volunteering at a public-funded advisory consultant for small businesses. Bobby's report was highly favourable and concluded that CDE Lid was presently sound and had good prospects for the future. Acting on the report, Anil decided to invest in the business. Anil showed Bobby's report to his friend, Clive. Clive subsequently invested a large amount of money in the purchase of CDE Lid. Anil then sent a copy of the report to his bank to support his application for a business loan, By the time he had received the report from Anil, the bank manager had already signed all the documentation approving the loan, as it was the bank's custom and practice to rely upon its own assessment of the business when making loan decisions. Nevertheless, the bank manager was impressed by what he read in the report. It has now come to light that when Bobby prepared the report, he did not properly inspect CDE Lid's accounts. As a result, he was unaware that the business was in a poor financial position, In the latest Chairman's report published by CDE Led, there was a suggestion that this was a passing trend because people were concerned about losing storage space available in a garage and were instead opting to extend their properties. Bobby had not read a recent article in the Business Consultants' Gazette that mentioned forthcoming changes to building regulations that would prevent the conversion of garages and stated that businesses offering garage conversions were no longer considered a sound investment. In fact, Bobby (who was rather new to the profession). was unaware of the Business Consultants Gazette although it was widely read in the profession, Anil invested his entire inheritance in CDE Lid. Anil was unable to repay the bank loan and CDE Lid went into liquidation. Anil, Clive and the Bank all lost their investment. Advise Anil, Clive, and the Bank of their possible claims