Question: Please explain and what case law should I use to answer this question? Annie and Ben operate a textile manufacturing business in Northcote, Victoria. In
Please explain and what case law should I use to answer this question?
Annie and Ben operate a textile manufacturing business in Northcote, Victoria. In early
2016, Annie and Ben secured a long-term contract to supply coloured textiles to a
large retail outlet called Threadz. To meet the production demands of the contract,
they decide to purchase a new fabric dyeing machine.
Conscious of the environment, Annie and Ben purchase a Theis iMaster H2O fabric
dyeing machine. The following week, while attending a family barbeque, Annie speaks
to her brother Colin about the purchase. Colin is a registered tax agent and informs
Annie that her business may be able to claim a tax deduction or depreciation on the
machine. The pair continue to discuss the purchase and Colin records some figures
into his phone. He tells Annie that she should come to his office during the week to
work out the exact calculations.
The following day, Colin provides the figures recorded in his phone to a junior assistant
and instructs them to calculate the depreciation amount for the machine. The junior
assistant prepares the calculations, but Colin is too busy to check whether they are
correct. Later that week, Annie attends Colin's office, who proceeds to provide her with
advice based on the calculations prepared by the junior assistant. Colin does not
charge Annie for the advice.
A few years later it is discovered that there is an error in the depreciation calculations,
which has meant that Annie and Ben have paid more tax then was actually owed
($35,000 in total). It is further discovered that the junior assistant who prepared the
calculations was inexperienced and not qualified to provide accountancy or tax advice.
With a downturn in the local economy, Annie and Ben are struggling to balance the
books of their textile business. In desperate measures, Annie approaches Colin to
demand that he repay the $35,000 that has been overpaid. Colin is offended and now
refuses to speak to either Annie or Ben.
Annie and Ben have now come to you for urgent advice.
Using case law, advise Annie and Ben whether they would be successful in any
claims against Colin, and if so, what remedies might be available to them?
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