Geoff is working at an accountancy firm Getgsted providing taxation advice. Joan is a new client and is setting up a business.

She is requiring advice on establishing a business. The one-hour meeting has gone overtime, and another client is waiting. As they are leaving the room Joan asks about the tax deductibility of a holiday house she and her husband own.

Geoff is wanting to see the next client and hurriedly gives her advice that holiday homes are tax deductible.

This is not completely correct as the ATO requires accurate records of income and expenses as well as evidence of the property being rented or genuinely available for rent at market rates. Based on this information she prepares her own personal tax return and lodges it.

The Tax Office after using new technology, data matching and checking social media find her claims are not legitimate.

She receives notification from the ATO that she has a tax liability of $22,000. She is furious and blames Geoff for not

correctly advising her. She is seeking advice as to whether she can sue him. What does she need to establish to successfully sue Geoff?

Using the scenario above, answer the following questions related to applying the law of negligence.

Q5a. Identify and discuss each of the four (4) elements of negligence in relation to the dispute in the scenario above. In your answer, make sure you refer to both negligence and negligent misstatement and include details of any common law cases.

Q5b. Suggest a way Geoff can protect himself from any liability.