In August 1983, the company asked the late Adv. Eliezer Toister to register a mortgage on the collateral property, in favor of Mizrahi Bank. Attorney Toister worked to register this mortgage. This action was in direct contradiction to the appellants' right to register a mortgage, or a warning note, on the collateral property, since it effectively prevented any ability to exercise this right of the appellants. However, the late attorney Toister did not inform the appellants about the registration of the mortgage. In doing so, he placed himself in a clear conflict of interest between his role as the company's representative at the time of the registration of the mortgage in favor of Mizrahi Bank, and his status as the appellants' agent for the registration of a mortgage in their favor as contingent on the addendum to the contract. In my opinion, there can be no doubt, at the very least, that the late Adv. A. Toister breached in this matter the duty of care that he owed to the appellants as a lawyer representing them with regard to the registration of the mortgage. His basic duty as a lawyer was to refrain from registering the mortgage before he clarified to the appellants the risk to their case if a mortgage was registered on the collateral property in favor of another. In any event, he should have refrained from taking part in an action that would harm the appellants, and his duty as their agent.
In this regard, significant similarities can be found between the case before us, and the case discussed in other municipal applications 1227/91 Yechiel v. Cohen, IsrSC 48(3).207In the same case, a contractor's lawyer took it upon himself to register a transaction for the sale of an apartment in the name of an apartment buyer. The buyer of the apartment was not a client of the lawyer. At the time of the contractual engagement between the contractor and the apartment buyer, there was a warning note written on the apartment in favor of a third party. This note prevented the registration of the transaction between the contractor and the purchaser, which the lawyer took upon himself to execute. The lawyer did not check whether there was a warning note on the apartment. The court ruled that in doing so, the lawyer breached the duty of care owed to the apartment buyer, since he did not bring before him a figure of great importance in the decision whether to enter into an agreement for the purchase of the apartment. The court says, from the mouth of my colleague Justice Strasberg-Cohen (at page 215):