Court finds possibility of losing family home outweighs firm's interest in securing unpaid legal fees
The Supreme Court of Victoria has found that a caveat lodged by a law firm over a former client's property should be removed, subject to an undertaking protecting the firm's interests, after determining that the balance of convenience favoured allowing the property to be refinanced.
In Green (a pseudonym) v Elvin Lawyers Pty Ltd [2026] VSC 675, the court considered an application under s. 90(3) of the Transfer of Land Act 1958 (Vic) concerning a property in Coburg North.
The plaintiff's former de facto partner owned the property and had engaged Elvin Lawyers to represent him in family law proceedings.
In April 2023, the Federal Circuit and Family Court of Australia granted an injunction restraining the parties from dealing with or further encumbering their property.
In November 2023, the former partner granted Elvin Lawyers a charge over the property to secure existing and future legal fees. The firm subsequently lodged a caveat claiming an interest as chargee.
In October 2025, the family court ordered the former partner to transfer his interest in the property to the plaintiff. However, he failed to complete the transfer. The plaintiff arranged to refinance the property, but Elvin Lawyers sought $33,899.77 or equivalent security before withdrawing its caveat.
The Supreme Court considered whether the firm had established a prima facie case supporting its claimed proprietary interest and whether the balance of convenience justified maintaining the caveat.
The court accepted that the written charge and evidence of unpaid fees established a prima facie case. However, it identified doubts about enforceability because the former partner appeared to have granted the charge in breach of the existing injunction. The court did not resolve that issue or determine priority between the competing equitable interests.
In assessing the balance of convenience, the court considered the plaintiff's inability to complete refinancing and the possibility that the Bank of Melbourne would enforce its mortgage.
The court placed significant weight on the potential loss of the family home, the relatively small amount secured by the charge, and the circumstances surrounding its creation.
It concluded that the balance of convenience favoured removing the caveat, provided the plaintiff undertook to comply with any damages order arising from its removal. The court directed the plaintiff to prepare draft orders incorporating the undertaking. It also urged the parties to consider their obligations under the Civil Procedure Act 2010 (Vic) to negotiate a resolution before pursuing further litigation.
