Lee v Elgammal

The appeal in *Lee v Elgammal* concerned a claim for professional negligence brought by the respondent against the appellant, a solicitor. The dispute arose from the respondent's signing of a guarantee for a loan, and the respondent alleged that the appellant had negligently failed to ensure he understood the extent of his liability under that guarantee. The matter was heard in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the respondent would have refused to sign the guarantee had he understood it was for the full value of the loan, and, crucially, whether the bank would have accepted a lesser guarantee had the respondent so refused. Additionally, the court considered the admissibility of affidavit evidence regarding the respondent's understanding, and whether his oral evidence, given in cross-examination, should be admitted if it stemmed from a line of questioning that would not have occurred had the affidavit evidence been ruled inadmissible earlier in the trial.

The Court of Appeal allowed the appeal, finding that the District Court had erred in its assessment of the evidence and the application of the law. The court determined that the respondent had not established the necessary causation to prove negligence. Specifically, it was not demonstrated that the bank would have accepted a guarantee for a lesser amount, nor that the respondent would have refused to sign the guarantee for the full amount if he had understood its terms. The court applied the principles of professional negligence and causation, including the provisions of the *Civil Liability Act* concerning the determination of factual causation.

Consequently, the Court of Appeal set aside the orders of the District Court and entered judgment for the appellant. The respondent was ordered to pay the appellant's costs in the District Court and the costs of the appeal, with a certificate under the *Suitors’ Fund Act 1951* (NSW) granted to the respondent if otherwise entitled.