Elton, a partner with an auditing firm, completed the audit for Greenfields Ltd and announced that the financial statements were an accurate reflection of Greenfields' financial position. At that time, Elton knew that Ceylonica Ltd was about to purchase Greenfields because Cynthia, the managing director of Ceylonica and a personal friend of his, told him about it. However, the board of directors of Ceylonica had not made any public announcements about this purchase. Ceylonica Ltd did indeed purchase Greenfields after reading the audit report prepared by Elton but within a few months they discovered that Greenfields financial statements were wrong. Elton had failed to take into account a large unsecured loan that had to be written off. The result was that the balance sheet overstated assets by $10 million. As a result, Greenfields was in a poor financial position and Ceylonica lost most of its investment.

Advise Ceylonica whether Elton owes it a duty of care. Cite relevant cases and / or statutes. Note - this question represented approximately 10 minutes of writing time on a past exam.