Advise huddo on whether he can sue the estate agent

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Reference no: EM133233094

Case: Huddo has been interested in developing several small businesses in Perth's inner-city suburbs as he feels that there is much potential for a lucrative venture that will afford him the lifestyle he aspired to. He had previously owned a small café in Subiaco which had appealed to local people in particular due to the quiet ambience and small size rather than larger, busier cafes that are far more common. Huddo very much enjoyed the experience of owning a cafe and interacting with customers. In particular, he enjoyed observing them enjoying the more upmarket and private surroundings that his café provided.

After contacting several well-established inner-city real estate companies, Huddo has decided to engage prominent local estate agent, Parko who has built up a formidable reputation for success and is a multiple industry award recipient. He enquired of Parko whether he knew of any suitable inner-city properties for sale where Huddo's preferred café developments could take place. Huddo required two sites which would allow comfortable seating for 20 customers in addition to a decent sized kitchen and preparation area. He also needs Parko to ensure that there would not be any significant parking or local government restrictions on alfresco dining on the footpath in front of the cafes. Huddo was confident that Parko is the right agent to streamline the purchasing process and sent him an email outlining his requirements.

Later that day, Parko emailed Huddo, who assured him that once he located two suitable properties in Subiaco and West Leederville he would be in touch. He assured Huddo that council parking and alfresco dining approvals would be a formality as he was an expert in the local area zoning and other council requirements and there would be no delays or added costs to be concerned about. He sent a follow up email later that day outlining two properties he had identified for Huddo to inspect. Sometime later Huddo inspected the two properties and was very happy with them. As the purchase cost would be significant, Huddo then advised his accountant, Leigh, to proceed and buy the two properties Parko had recommended.

Within six months however, Huddo found himself in severe financial distress due to a series of legal actions he was forced to commence against the local area councils in both locations due to zoning complications and other administrative obstacles. Essentially, Huddo has not been able to place tables and chairs on the footpath in front of the two properties and parking has been a disaster from the beginning with many customers served with infringement notices for street parking. The parking bays close by Huddo's two cafes have been taken up by staff at adjoining businesses who commence their working days well before Huddo's cafés commence trading leaving no free bays for customers. As a result, within 6 months, Huddo is at severe risk of bankruptcy due to the resulting delays and legal expenses that have occurred.

Problem: Using the 4 step process, advise Huddo on whether he can sue the estate agent, Parko, for negligent misstatement regarding his comments about the properties and whether you think he can succeed.

Reference no: EM133233094

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