Phoenician Holdings v Rahme [2012] NSWSC 1604

Clients of a law firm mortgaged their home to secure their legal costs and the law firm lodged a caveat and sought to have their caveat remain on the register. The clients claimed that the mortgage was invalidated pursuant to the Contracts Review Act and the Competition and Consumer Act. They attempted to sell their property and sought removal of the caveat.

The court found that the balance of convenience favoured a course that allowed for completion of the contract for sale while protecting the law firm. The court ordered the clients to pay the law firm at completion the fees of counsel, the estimated fees of the law firm plus a buffer of $350,000 to cover the costs of recovery and interest by settlement cheques to held in the solicitors’ joint trust accounts in exchange for withdrawal of the caveat.

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