Magda recently got divorced from her husband Tom. As part of her settlement she received a $1.5million payment from Tom which now constituted all of her assets apart from her motor vehicle which was valued at $22,000. Upon receiving the funds Magda's solicitor advised her to seek some financial advice to ensure that her settlement is competently invested and is able to provide for her future. One afternoon Magda was at her friend Harsh's house for afternoon tea and she saw an old friend Colby there and spent a while catching to him. Colby told Magda that he moved from Investment Banking into the financial advice industry predominantly servicing high-net worth individuals, families and businesses. Maggie told Colby about her divorce and that she needed some assistance with financial advice and planning as she wasn't particularly financially savvy. Colby said that while he doesn't normally service clients such as Magda he would be happy to help her because she is a friend and regardless he is fully licenced to do so. Magda met with Colby at his office and provided him with her information and materials pertaining to her financial situation. Magda told Colby that other than her vehicle and her $1.5million cash settlement she has no other assets and that since her divorce she has been staying with her sister Tina. Magda told Colby that she wants to have her own place again and wants to purchase a property. Magda had her eyes set on a 2 bedrooms apartment in Bronte beach that was on the market for $1.5million. Colby said that he has a good plan for her. He advised her to purchase the property and put down a deposit of $300,000 with the remainder of the purchase price to be financed through a mortgage. Colby advised her that she should invest the remaining $1.2million into the following investments:$50,000 in a bank term deposit$50,000 into an index fund that tracks the ASX top 100 companies$1.1million (the remaining amount) into PharmaAid, a fast growing company that has developed a new pharmaceutical product that will revolutionise the lives of people living with chronic arthritis. Colby tells Magda that this is a 'hot' company and that almost all of his clients have invested in and that some have invested more than $10million each into the company. Magda asks Colby whether it is wise for her to put so much money into a single company. Colby frustratingly replies that she should be thankful that she is being given the opportunity to invest, normally this kind of opportunity is only offered to bespoke investors and that it has significant upside potential. Further, Colby told Magda that his clients pay a significant fee to him for his advice and finding them excellent deals such as this one. Magda still sounds reluctant before Colby exclaims "look Magda, do you think that my very wealthy clients would put their money in a bad investment? Many have invested $10million plus in PharmaAid". Magda accepts and gives Colby the go-ahead to make the investments. A year later PharmaAid announces that the arthritis pharmaceutical they have been developing is taking far longer to develop and trial than they had expected. Several of the trials had gone weary and they were facing significant lawsuits all over the world. The share price collapsed, dropping 95%. The next day the company filed for bankruptcy and Magda's shares became worthless.

a) Identify what type of loss has been suffered by Magda.

b) Advise Magda on whether she has a claim against Colby for negligence. Ensure you refer to both the statute and case law in your answer. Do not refer to any statute or case law outside of the law of negligence.