Wacca Dacca Ltd is a company controlled by the members of the hard rock band, WC/DC. A number of wholly owned subsidiaries of Wacca Dacca Ltd are involved insetting up and running the band's concerts. One of the subsidiary companies, Heavy Metal Sounds Pty Ltd, is responsible for setting up the sound equipment at WC/DC concerts in Australia. At a recent WC/DC concert in Melbourne, Heavy Metal Sounds Pty Ltd negligently set the sound levels too high with the result that five audience members suffered permanent hearing loss. Unfortunately for those audience members, Heavy Metal Sounds Pty Ltd had no negligence insurance and cannot pay the likely damages claims.

Which of the following represents the best advice to the injured audience members?

a.

The directors of Heavy Metal Sounds Pty Ltd will be personally liable because they, not the company, are the source of the negligent act.

b.

Wacca Dacca Pty Ltd is liable for the damage caused by Heavy Metal Sounds Pty Ltd because the latter is the subsidiary of the former.

c.

Heavy Metal Sounds Pty Ltd will be solely liable for the damage they caused because it is a separate legal entity from Wacca Dacca Pty Ltd.

d.

The directors of Wacca Dacca Pty Ltd will be personally liable for the damaged caused by Heavy Metal Sounds Pty Ltd because they permitted Heavy Metal Sounds Pty Ltd to act negligently.