Caselaw

Civil Appeal 4612/95 Itamar Matityahu v. Shatil Yehudit - part 13

October 17, 1997
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"Since the lawyer has taken upon himself to register the apartment in Cohen's name, and since the existence of a previous warning note, which was executed by a lawyer from his office, is a material obstacle that negates the possibility of registering the apartment in Cohen's name, there is no doubt that the duty to check the registration and the meaning of the warning note and to bring the facts to Cohen's attention is an elementary duty derived from the duty of loyalty of a lawyer towards the purchaser of an apartment that he must transfer in his name.  Even when the purchaser is not considered his customer.  The importance of the examination and bringing its results and implications to Cohen's attention is in allowing Cohen to consider whether to purchase the apartment under such conditions, at the risk of placing her money on the 'deer fund,' which it can be assumed that, as a reasonable person, she would not have done."

Accordingly, the lawyer was held liable to the apartment buyer.  Similar to the facts in the Yechiel case, in our case, too, the late attorney Toister had no difficulty in knowing about the contradictory registration in the land registers - after all, he was the one who made this registration himself.  At the time the mortgage was registered, it should have been clear to the late Adv. Toister that the registration of the mortgage in favor of Mizrahi Bank might prevent the appellants from the possibility of registering a mortgage on the collateral property, a registration that the late Adv. Toister took upon himself to perform.  This would have deprived the appellants of their contractual right to collateral for the performance of the company's obligations.  In this situation, the late Adv. Toister was obligated, at the very least, to notify the appellants of the registration of the mortgage, so that they could finance their steps and prevent the thwarting of their right to collateral from the company.  By refraining from doing so, he breached the duty of care owed to the appellants.

  1. The respondents do not dispute this normative analysis.  Their argument focuses on the

according to the facts, according to which the action of the late Adv. Eliezer Toister in registering the mortgage in favor of Mizrahi Bank was done at the discretion of the appellants.  As may be recalled, the respondents claim that an agreement was reached between the company and the appellants, in the presence of the late Adv. Toister, according to which the appellants have no right to receive a third apartment; The parties shall consider among themselves the financial difference due to one of them from the other; and with the consent of the appellants, a mortgage will be registered in favor of another on the collateral property.  But this version, in all its parts, has not been proven, as determined above.

  1. In the margins of this issue, I will note that even if the appellants were not clients of the lawyers, the lawyers would have had duties certain attitudes towards them.  The rule is that "conceptual liability may also arise towards someone who is not the lawyer's client, who turns to the lawyer for advice or information" (Civil Appeal 751/89 Musapour et al.  v.  Shochat et al., Piskei Din 46(4) 529, 535by President M.  Shamgar).

In this framework, it was determined that a contractor's lawyer owes a duty of care and loyalty to the buyer of an apartment from the same contractor in whose name the lawyer agreed to handle the registration of the purchase, even if there is no attorney-client relationship between the buyer and the lawyer (the Yechiel case, above, on page 214).  Moreover, in such a situation, in which the buyer of the apartment is not represented, the lawyer has an increased duty of care and trust towards the client.  In this context, my colleague Justice Strasberg-Cohen says in the aforementioned Yechiel case (on page 215To the judgment):

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