Negligence Case: Caparo Industries Plc V. Dickman

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There was failure to reflect the accumulated losses of MBF in its annual reports, which delayed in the publication of the annual reports and the refusal to accept that the bank was unable to control its operations. The report for the financial year ending 30th June 1988 was not released by the Auditor – General until June 1989. The audit report for the year ending 1989 was released in February 1990. In 1993, when things were beginning to reach the public sphere, the audit report was delayed only by 6 months, and in 1996 by less than three months. In this case the auditor had been negligent as per ASIC the corporations Act that requires the auditor’s report to be made within 7 days after the directors report is signed but according to NBF the audit reports were delayed by more than seven days. 3. Nature of Contract – Casual Relationship Is when there is a breach of duty by the defendant and the loss or harm suffered by the plaintiff? This relationship must have been reasonably foreseeable and it must be proven that the loss suffered is attributable to the negligent conduct of the auditor in a negligence case. Case - Caparo Industries plc v Dickman Facts A company namely Fidelity Plc, used to manufacture electrical equipment was a target to be a takeover by Caparo Indutries Plc. Since Fidelity was not doing well, it sold its shares at a half price. Caparo started to buy shares in large quantities. In June 1984 the annual accounts, which were done with the help of the

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