Sarah owns a townhouse in a block of 10 (the complex).She is also the chairperson of the body corporate.(A body corporate has the power and duty to deal with matters affecting the common property of the complex; for example, maintenance).Sarah is desperate to sell her townhouse, because she wishes to buy a lifestyle block in the country.Sarah has entered into discussions with Chas.Chas owns a gym next door to the complex and wants to move closer to work.Negotiations have entered an advanced stage, and Chas is about to sign a contract to purchase Sarah's townhouse for $1.5m.

Sarah is horrified to learn that two of the other townhouses in the complex have watertightness issues and will require extensive repairs.She immediately calls a meeting of all of the owners, and it is decided that Sarah should commission an engineer's report into the state of all of the townhouses in the complex.The purpose is to decide whether they require repairs.Sarah approaches an engineer, Jason.She tells Jason that, in her capacity as chairperson of the body corporate, she needs a report so that the owners can decide if repairs are required, and, if so, what the cost will be.Jason agrees to prepare the report within a month.

Two weeks later, Chas telephones Sarah and says that he has noticed engineers drilling holes in units in the complex.He asks if anything is wrong.Sarah tells Chas that it is just a routine check.She promises however to give Chas a copy of any report.She then tells Jason that she needs the report urgently.Jason tells Sarah that he still needs to do more tests but can provide a preliminary report.Two days later Jason sends the report to Sarah.The report has the heading "Preliminary Report into Watertightness Issues."The first paragraph states that "This report is provided exclusively for the owners to enable them to assess whether repairs are required at the complex."The report concludes that, apart from the two units initially diagnosed with watertightness issues, none of the other units, including Sarah's have any problems.Thus, no repairs are required to Sarah's unit, or any of the common property.

Sarah gives Chas a copy of the report.Chas goes straight to the conclusion without reading the whole report.Satisfied, the next day he signs an unconditional contract to purchase Sarah's unit for $1.5m.(Assume that Sarah makes all legally required disclosures.) The contract is settled, and Sarah moves to Timaru.

Two months later Jason has still not completed his final report.The body corporate commissions a new engineer.She concludes that all of the units have major watertightness issues and repairs will cost at least $1m per unit.She says that any competent engineer should have assessed the problems "within days".

Chas manages to borrow the money for the repairs.However, he cannot afford the interest payments on his mortgage.His unit is eventually sold by mortgagee sale.In addition, the financial pressure causes his gym to fail.His gym is also sold at a mortgagee sale at a substantial loss.

Explain, giving reasons, whether Chas is likely to succeed in an action against Jason in negligent misstatement? Also advise what losses he will be able to recover