Lee v Elgammal

[2016] NSWCA 26

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Lee v Elgammal [2016] NSWCA 26

Hearing dates:

2 December 2015

Date of orders:

03 March 2016

Decision date:

03 March 2016

Before:

Gleeson JA
Tobias AJA
Emmett AJA

Decision:

(1)   Appeal be allowed.

 

(2)   Orders of the District Court on 14 May 2015 be set aside, and, in lieu thereof, there be judgment for the appellant in the District Court.

 

(3)   The plaintiff pay the defendant’s costs in the District Court.

 

(4)   The respondent pay the appellant’s costs of the appeal.

(5) The respondent have a certificate under the Suitors’ Fund Act 1951 (NSW) if otherwise entitled.

Catchwords:

PROFESSIONAL NEGLIGENCE – legal - guarantee for loan – extent of liability – security instruments – causation – whether respondent would have refused to sign guarantee had he understood it was for the full value of the loan – whether bank would have accepted lesser guarantee.
EVIDENCE – Civil Liability Act, s 5D(3) – whether affidavit evidence of respondent’s understanding was admissible – affidavit evidence admitted during trial but ruled inadmissible in judgment – whether respondent’s oral evidence admissible where evidence resulted from cross-examination that would not have occurred had the affidavit evidence been ruled inadmissible at trial.

Legislation Cited:

Civil Liability Act 2002 (NSW)
Suitors Fund Act 1951 (NSW)

Cases Cited:

Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Adamson v Ede [2009] NSWCA 403 at [30]–[31]

Category:

Principal judgment

Parties:

Siu Kay Michael Lee (Appellant)
Elarby Elgammal (Respondent)

Representation:

Counsel:
A Zahra (Appellant)
LT Livingston (Respondent)

  Solicitors:
MJ Cameron (Appellant)
C Ciappara (Respondent)

File Number(s):

2015/171010

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

District Court of New South Wales

Jurisdiction:

Civil

Date of Decision:

14 May 2015

Before:

Kearns DCJ

File Number(s):

2014/57499

JudgmenT

1. THE COURT: This appeal is concerned with the extent, if at all, to which the appellant, Mr Michael Lee (the Solicitor), is liable to the respondent, Mr Elaraby Elgammal (the Client), for the amount of the liability incurred by the Client under a guarantee (the Guarantee) given by him in favour of National Australia Bank Ltd (the Bank) in respect of a loan of $460,000 (the Loan) made by the Bank to ETA Enterprises Pty Ltd (the Customer). The issued capital of the Customer was held by Mr Adam Elgammal and Mr Tarek Elgammal. Adam Elgammal (Adam), who is the Client’s son, was the secretary of the Customer. Adam’s girlfriend, Ms Zeinab Nasrallah (Ms Nasrallah), was its only director. The Bank approved the Loan on or about 30 November 2007 and advanced the sum of $460,000 to the Customer shortly thereafter.

2. The Loan was made by the Bank on the security of:

• a fixed and floating charge over the whole of the assets of the Customer;

• a guarantee and indemnity by Ms Nasrallah limited to the sum…