Mr Chao is a well-known horticultural scientist who, after a successful career, decides to start up his own consultancy and to also invest his money in other businesses with other people he knows. He investigates his options including companies, partnerships, trading trusts and franchises.

Mr Chao decides he should start his consulting company first. He incorporates Crop Consultants Limited (CCL) with capital of $1,000 and himself as sole director, shareholder and employee. He hears that a local farm is in difficulty and approaches the farmer with a brochure he has made. It is clearly labelled "Crop Consultants Limited" but sets out Mr Chao's vast experience within the brochure. The farmer is impressed and contracts with CCL (the contract names Crop Consultants Limited as the Consultant). However, in Mr Chao's report to the farmer he negligently recommends the wrong pesticide for the farmers crops. Mr Chao invoices the farmer with an invoice in the name of CCL and the farmer pays. Sometime later the farmers crops fail due to the wrong pesticide being used resulting in a loss of several hundred thousand dollars. The farmer would like to sue CCL but wonders if he can also sue Mr Chao personally.

To make matters worse, Mr Chao was driving a car hired by CCL when he visited the farmer for an inspection and when returning home to the office of CCL he negligently went through a red light and hit another vehicle owned by Stanley. Stanley also wonders if he can sue Mr Chao personally and/or CCL.

Question:

Discuss whether CCL and/or Mr Chao is liable to the farmer for the negligent advice about the pesticide. Also discuss whether Mr Chao and/or CCL is liable to Stanley for negligent driving. Include reference to the principle of attribution in your answer.