Business Finance Homework Help

Case
Mr Bartholomew is 54 years old and has, for many years, worked in the construction industry. Mr Bartholomew recently inherited a sum of $100,000 from his deceased father and he has no other significant assets. Mr Bartholomew is planning his retirement and he has decided to invest in some shares using the inheritance money. Mr Bartholomew has no prior experience in shares investment and financial planning.

Mr Bartholomew approached Mrs Taylor who works for Taylor Smart Investments Pty Ltd, a well-known investment advisory company. Mr Bartholomew makes an appointment with Mrs STaylormith and during the meeting in her office, Mr Bartholomew asks Mrs Taylor whether she thinks Essette Airlines is a good investment. Mr Bartholomew made it very clear to Mrs Taylor that he will only be able to retire if the investment is successful. Due to having many other clients demanding her time, Mrs Taylor advised Mr Bartholomew in writing that Essette Airlines had good financial performance based on a newspaper article she had read and without doing further research. Mrs Taylor provided this advice with a disclaimer.

A simple act of further research by Mrs Taylor would have indicated that Essette Airlines was not a good investment. Mr Bartholomewe was nervous and told Mrs Taylor that he was reluctant to invest the whole of $100,000 in one company. Mrs Taylor assures Mr Bartholomew that it is a good investment.

Acting on this advice, Mr Bartholomew invested his inheritance in Essette Airlines. Soon after Mr Bartholomew invested, the share price of Essette Airlines fell significantly. As a result, Mr Bartholomew lost half of his inheritance money.

Objective
1. Advise Mr Bartholomew of all the elements he needs to establish to be successful in a negligence action against Taylor Smart Investments.Advise 2. Mr Bartholomew of any possible defences that Taylor Smart Investments may use. Please use IPAC to answer this question. (Issue/Principle/Application/Conclusion)