Consolidated Lawyers Ltd v Abu-Mahmoud; Abu-Mahmoud v Consolidated Lawyers Ltd [2016] NSWCA 4

Consolidated Lawyers Ltd v Abu-Mahmoud; Abu-Mahmoud v Consolidated Lawyers Ltd [2016] NSWCA 4

The restructure advice was negligent because it failed to advise about the likely issue of director liability notices for the GST debt and about the legal consequences for St George Bank's secured position if Fairchild entered administration. The advice caused loss because the scheme was implemented to avoid the GST liability and foreseeably created an event of default enabling the bank to appoint receivers and pursue the guarantee; the appellants did not show that Fairchild would probably have gone into liquidation in any event. The appellants were precluded from raising their independent unreasonable conduct causation argument for the first time on appeal because it had not been put...

Jurisdiction
Australia
Judgment Date
04 February 2016
Procedural Posture
Appeal in Legal Professional Negligence Proceedings and Application for Leave to Cross Appeal on Costs / Appeal and Application for Leave to Cross Appeal From Decisions of Garling J in the Supreme Court of New South Wales, Common Law Division
Outcome
The appeal and the application for leave to cross-appeal are dismissed with costs.
Legal Topics
['legal Professional Negligence' 'property Development Restructure Advice' 'causation of Loss' 'new Argument on Appeal' 'offer of Compromise' 'indemnity Costs']
['torts' 'civil Procedure' 'costs'] ['legal Professional Negligence' 'property Development Restructure Advice' 'causation of Loss' 'new Argument on Appeal' 'offer of Compromise' 'indemnity Costs']

Case Brief

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Procedural Posture

Appeal in Legal Professional Negligence Proceedings and Application for Leave to Cross Appeal on Costs / Appeal and Application for Leave to Cross Appeal From Decisions of Garling J in the Supreme Court of New South Wales, Common Law Division

Legal Issues

  1. 1 ["Whether the primary judge erred in finding that Mr Kassem's restructure advice was negligent." "Whether Mr Abu-Mahmoud's loss was caused by the negligent restructure advice." "Whether the appellants could advance for the first time on appeal an argument that Mr Abu-Mahmoud's independent and unreasonable conduct precluded causation." 'Whether the primary judge erred in otherwise ordering under UCPR r 42.14 so as to deny indemnity costs after an Offer of Compromise.']

Ratio Decidendi

The restructure advice was negligent because it failed to advise about the likely issue of director liability notices for the GST debt and about the legal consequences for St George Bank's secured position if Fairchild entered administration. The advice caused loss because the scheme was implemented to avoid the GST liability and foreseeably created an event of default enabling the bank to appoint receivers and pursue the guarantee; the appellants did not show that Fairchild would probably have gone into liquidation in any event. The appellants were precluded from raising their independent unreasonable conduct causation argument for the first time on appeal because it had not been put...

Court Disposition

The appeal and the application for leave to cross-appeal are dismissed with costs.

Orders

  • ['The appeal is dismissed with costs.' 'The application for leave to cross-appeal is dismissed with costs.']