Topic 2

Negligence

Question1

What must be shown before a person can have an action in negligence ?

Question 2

Mrs. Nguyen asked her accountant Mr. Wu for investment advice. On behalf of his client Mr Wu telephoned the City of Dodong, and asked them about their plans to redevelop the suburb of Sukacita. In particular he asked them about any road widening or other construction proposals that may affect the value of real property in the area being re-developed.

He was told by a clerk, "To the best of my knowledge there are no specific road widening proposals that may affect any part of the area, but I cannot be 100% sure as at this stage the redevelopment is in the early planning stages, and the situation may change."

Mr. Wu then advised Mrs. Nguyen in a letter dated 1 April 2005 to purchase land in the suburb of Sukacita because the area was about to be re-developed, and land values would triple because of the re-development. He did not mention anything about the current position of the re-development plans.

On the basis of this advice, Mrs. Nguyen then purchased land for $500,000, and a few months later was horrified to discover that due to an access road to the My Dream University highway being built, the land purchased by her had decreased in value to $150,000.

Advise Mrs. Nguyen of her non-contractual rights, if any, against Mr Wu and the City of Dondong.

Question 3

Peter wished to buy a house at a price of RM200,000. To raise the money, he applied to Equinox Bank for a loan of RM150,000. The Bank informed Peter that it would grant him a loan on condition that it received a satisfactory valuation report from a registered real estate valuer. The Bank appointed Victor, a registered real estate valuer to provide a valuation of the house. The valuation fee was paid by Peter and Victor was aware of this. Victor gave the Bank a report stating that the house was worth RM200,000. But it was not. Peter has now discovered that the house had major defects. The house subsequently collapsed and he suffered financial loss.

Advise Peter, whether he would succeed in recovering his losses from Victor.