Question 1

Ed was a self employed courier driver. One day while reversing down Monty's drive to make a delivery he hit and knocked over a power pole. The electricity to Monty's house was immediately cut off.

Monty, a freelance engineer was working on his computer when the power was cut. The computer crashed and a lot of data was lost. It cost him $10,000 at his normal hourly rate to reproduce the data he required for his consulting job advising an energy company on the feasibility of establishing a nuclear power plant on the Coromandel peninsula.

Monty's refrigerator was full of food that he had bought for his daughter's wedding reception that he was to hold that coming weekend. Before the power could be restored the expensive and exotic foods were spoilt in the summer heat. Monty had to arrange for replacement oysters and humming bird tongues in time for the reception. Normally the cost of the lost food would have been $2,000 but because it was a special order he was charged $5,000.

Monty had a pet monkey, Furious George caged in his backyard. When the power was cut off the electric lock released and George escaped. He jumped over the fence into the neighbour's property where he tore up Maude's garden and ate her prize daffodils. It will cost Maude $1,500 to replace the daffodils and repair the damage to her garden.

Furious George remains at large.

Required: Advise Ed and Monty of any claims they each may face in this situation. Ensure you detail separately the basis of any such claims and assess the likelihood of their success.

Question 2

Jerry is an investment adviser who is returning by plane from a business trip to Tohunga where he was investigating a new start up company, Kitty Ltd. To his surprise he finds himself seated next to an old schoolmate, Lisa. Keen to impress with what he has achieved since they last met at school he tell her about his job as an investment adviser. He tells her that he has just been checking out Kitty Ltd and about its bright future.

"Kitty Ltd is a company to watch. It's one of the best kept secrets in the market right now but the shares in this company can only increase in value. I'm feeling very positive about this company. I'll be recommending this to my clients."

Lisa is very interested, thanks him for the tip and tells him she'll keep the information to herself.

Once she gets home Lisa contacts her stockbroker and asks him to invest $20,000 in Kitty Ltd. Her stockbroker, Martin, asks her if she's sure that's what she wants to do as he has never heard of this company. Lisa insists on the investment.

Meanwhile Jerry contacts Ned, one of his clients by phone, and tells him of Kitty Ltd. Jerry offers to send him his report but Ned says there is no need as he is going to invest straight away. Ned buys $50,000 worth of shares in Kitty Ltd.

After Ned has invested his money he receives Jerry's report. On the foot of the front page of the report it says, "The author of this report accepts no responsibility for the content of this report or for the consequences of any action taken on the basis of the information provided unless that information is subsequently confirmed in writing." Ned does not bother reading the report.

Unfortunately Jerry has made a simple calculation error in the value of Kitty Ltd. Kitty Ltd is not doing well at all and at a press conference announces that it will be closing down its factory and concentrating on research for the foreseeable future. The price of Kitty Ltd shares plummet and they are now worth only 10% of their original value.

Lisa and Ned want to sue Jerry for their losses.

Required:Advise Lisa and Ned of any claims they may have against Jerry and advise them of their likelihood of success.