Step 1: Identifying the Issue The main issue is whether Franz, who prepared Renata's corporate tax return, was negligent. Specifically, we need to determine if Franz failed to meet the standard of care expected of an accountant, leading to financial losses for Renata. Step 2: Analyzing the Law A professional can be held liable for negligence for losses suffered by clients and non-clients. Special rules for professionals in applying negligence torts: o Duty of care for statements made by professionals o Professional standard of care Most professionals are required by their governing body to have liability insurance. Step 3: Applying the Law to the Facts Duty of Care: Franz had a duty to handle Renata's tax return competently because he agreed to take on this job and presented himself as a professional accountant. Standard of Care: Although Franz is not a CPA, he still needs to meet the standard of a competent accountant since he advertised himself as such. He should have been familiar with the specific tax rules for manufacturing businesses, including CCA deductions and R&D tax credits. Breach of Duty: Franz did not correctly apply these tax rules, showing that he did not meet the expected standard of care. His mistakes led to the CRA rejecting the tax claims. Causation: The financial losses, including the $100,000 in penalties and interest, directly resulted from Franz's incorrect preparation of the tax return. Damages: Renata's business suffer