I am delighted to report that a long standing client of Atkinson Vinden has had a big win in the NSW Court of Appeal, in the matter of Abu-Mahmoud v Consolidated Lawyers. On 4 February 2016, three judges of the court, including Chief Justice Batthurst, handed down their judgment in favour of our client, affirming that the original decision of the Supreme Court from 2015 was correct. Our client was awarded in excess of $2.4m plus costs.
The defendants in the case included a solicitor, Mr Salem Kassem, who gave our client negligent advice, and the several law firms with whom Mr Kassem was working during the period when poor advice was given.
It was found that the sale of a major commercial property did not go ahead because the solicitor told Abu-Mahmoud that it could not proceed. The lawyer was wrong – there was no reason why the sale could not have proceeded. Before another buyer could be found, the bank foreclosed on the property, and our client, as guarantor, was called upon to make up the shortfall on the eventual (much lower) sale price. Had the sale gone through, the guarantee would no longer have been in place, and our client would not have suffered any loss.
There are many lessons from this case. Perhaps the most obvious is that it pays to engage lawyers who know what they are doing. In this case, the negligent advice was given in informal settings, the most significant of which was during a meeting at the El Sweetie Restaurant in Granville. The solicitor was unable to produce any records of the advice given, even contemporaneous notes of the meeting itself, and the court was therefore required to ascertain the truth of what occurred from oral recollections of the meetings. The lawyer was unable to explain his advice, which in hindsight was patently wrong. Shortcuts in the giving of legal advice can spell disaster.
It is important that when the advice of a lawyer is sought, that advice be reduced to writing. Although for some this may seem like an expensive requirement, it is important because it means that the solicitor preparing the advice has the opportunity to carefully consider their opinion, and weigh up all the relevant considerations, rather than shoot from the hip, as can often happen when off-the-cuff verbal advice is sought. It also means that both the lawyer and their client are very clear about what is being recommended, and why.