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QUESTION ONE Max is a well-known share trader and successful commercial property investor who is a regular contributor to the Melbourne-based online investment paper XYZ

QUESTION ONE

Max is a well-known share trader and successful commercial property investor who is a regular contributor to the Melbourne-based online investment paper "XYZ Property Times" which provides up-to-date information on movements, trends and projections in commercial investments in Australia.

Loretta is a 20 year-old hotel receptionist and has recently inherited $300,000 from her uncle. Loretta is not familiar with economic matters and she does not read any investment papers or journals. Furthermore, Loretta does not know what to do with the money she inherited as she is living comfortably at her parents' house, does not have to pay any rent and does not have any large living expenses except for going out with her friends and enjoying her social life.

Last year, when Loretta was out at her favourite restaurant, she struck up a conversation with Max who was dining at the table next to her. Loretta had never met Max before and does not know of his fame as a share trader and investment advisor. Loretta mentions to Max the $300,00 that she inherited and that she has no idea of how to invest it sensibly.

Max mentions to Loretta that he writes for an investment paper. He recommends to her that she put her money in a specific commercial property company.

Loretta invests $300,000 buying shares in the company that Maximillian mentioned.

Unfortunately, with the global downturn in the commercial property market, the company has gone into liquidation. As a result Loretta has lost the $300,000 that she invested in the company.

Advise Loretta as to whether she would be successful in negligent misstatement against Max.

Please explain fully, using relevant legal authority.

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