NEGLIGENCE CASE STUDY

QUESTION NO 1

Archi Pty Ltd is a company which provides architectural services and advice. By letter Archi advised Charlie, one of its builder clients, about the types of building materials that must be used in the construction of residential buildings to comply with the fire prevention regulations. Charlie built a number of homes based on this advice. Further, Charlie passed this letter of advice on to another builder, Budget Builders Pty Ltd (Budget).

Budget also built several houses based on this advice. The local building authority refused to approve the constructions stating that the wrong materials had been used. The building authority advised that the incorrect material must be replaced. This will cost Charlie approximately $80,000 and Budget approximately $200,000.

When Budget investigated the situation, it is told that Archi Pty Ltd based its advice on the old regulations. Apparently, Archi had not kept up to date with the recent changes to the law.

Required

Advise Charlie and Budget if either or both have an action against Archi Pty Ltd for Negligence (address all the elements of negligence below).

Was a duty of care owed to Charlie and Budget?

Assuming a duty of care was owed to Charlie, was it breached?

Can Charlie claim any damages?