Students MUST use the IRAC method (Issue, Rules, Application, Conclusion) to answer the following scenarios. All answers MUST be supported with relevant statute or case law authority.

Question 10. Negligent Misstatement (7 marks)

Students MUST use the IRAC method (Issue, Rules, Application, Conclusion) to answer the following scenario. All answers MUST be supported with relevant statute or case law authority.

Scarlett is looking to open her cat grooming business in Merrylands. Scarlett has previously rented premises from which to operate her business, but after recently inheriting some money, she is now looking to buy a small freestanding building. She has recently come across an old substation on Wallaby Way in Merrylands which is currently for sale. Scarlett is aware that the building has previously been used as a caf.

Before making an offer to buy the property, Scarlett phones the Holroyd Council to investigate the current zoning. She speaks to Terry, a receptionist, who informs Scarlett that all of the planning advisers are currently busy. Scarlett says she is in a hurry and Terry responds that his belief is that if a caf has previously been operating in this building, then it should be fine to use it for another commercial use. Terry also gives Scarlett the email address for one of the planning officers.

The next day Scarlett writes up her query regarding the zoning of the substation building in a letter, signs it and emails it (as an attachment) to the planning officer.

The following week Scarlett receives a letter from the planning officer (on the Holroyd Council letterhead) stating that the building referred to is currently zoned commercial mixed-use and therefore a cat grooming salon would be within the permitted use.

On the basis of this letter, Scarlett makes an offer to purchase the property which is immediately accepted.

It turns out the planning officer mixed up Scarlett's request with another property and the building is actually zoned residential with a one-off special use permit provided to operate a pop-up caf. It now looks unlikely that Scarlett would ever be able to operate a cat grooming business in this building.

Advise Scarlett on whether she can successfully bring an action against the Holroyd Council for negligent misstatement.