C.A. 357/56

 

DAN BUS URBAN, INTER-URBAN PETAH TIKVA AND GREATER TEL AVIV COOPERATIVE SOCIETY LTD.

v.

YITZHAK YEHIEL

 

 

In the Supreme Court sitting as a Court of Civil Appeal

[March 28, 1958.]

Before Olshan P., Silberg J. and Sussman J.

 

 

Contract - Omnibus season-ticket - Unilateral variation of conditions by bus company - Reasonable notice required - Breach of contract.

 

            A passenger bought at a reduced price a season-ticket good for 23 journeys on the  omnibuses of the appellant cooperative. At the time of purchase of the ticket, the cost of a single fare was 55 prutot.1) Before the passenger had used up the whole of the ticket, the Ministry of Transport approved a rise in the fare from 55 prutot to 60 prutot. The appellant inserted a notice in the newspapers stating that tickets such as that held by the respondent would remain valid only until November 15, 1955. On the day following that date, November 16, 1955, the passenger sought to use his ticket on one of the appellant's omnibuses, but the ticket collector refused to recognize it.

 

            The passenger brought an action in the Magistrate's Court, claiming as damages the value of the remainder of the unused ticket. The Magistrate dismissed the claim. The passenger appealed to the District Court which, by a majority, allowed the appeal.

 

            The omnibus cooperative appealed to the Supreme Court.

 

            Held: (following Martin-Baker Aircraft Co. Ltd. and Another v. Canadian Flight Equipment Ltd.) that if the appellant cooperative desired unilaterally to change the agreement between itself and the passenger it must give reasonable notice, and in the present case a notice of 19 days was not reasonable. The appeal of the cooperative was accordingly dismissed and the claim of the passenger upheld.

           

Israel case referred to:

 

(l) C.A.42/53 A. Yehezkeli v. I. Shaposhnik and Another (1955) 9 P.D. 333.

 

            English case referred to:

 

(2)       Martin-Baker Aircraft Co., Ltd. and Another v. Canadian Flight Equipment Ltd., Martin-Baker Aircraft Co., Ltd. v. Murison. (1955) 2 All E.R. 722.

 

Caspi for the appellant.

Toister for the respondent.

 

SUSSMAN J. This is an appeal from a judgment of the District Court of Tel Aviv-Jaffa sitting as a Court of Appeal which, by a ma­jority, set aside the judgment of the Magistrate's Court of Tel Aviv-Jaffa. The Magistrate had dismissed the claim of the respondent, the plaintiff in the court below, while the District Court gave judgment in his favour. The amount of his claim was for 360 prutot which in the appeal had shrunk in effect to 30 prutot. But the dispute raised a question of principle and in so saying I do not intend to criticise the respondent for considering the matter of sufficient importance to warrant his having recourse to the courts.

 

2. The subject of the dispute is a "season-ticket at reduced price" valid for 23 journeys, which was sold to the respondent by one of the booking clerks of the appellant cooperative which runs a public omnibus transport service in Tel Aviv-Jaffa.

 

            In the Road Transport Rules (Passenger Services), 1954, which were published in "Kovetz Hatakanot" (Official Regulations), No. 463, the Minister of Transport fixed the scale of fares which the cooperative was entitled to charge a passenger using its service. In the addendum attached to the rules it was provided as follows (at p. 1067):

           

            "3. Season-ticket at reduced price.

            (a) ............

The price of season-tickets for 23 journeys is the same as the price of 20 journeys on all routes."

           

            The figure "55" was printed on the season-ticket in question very conspicuously.

           

3. The respondent bought the ticket in question in the month of October, 1955, and managed to use it for 17 journeys. On November 16, 1955, he boarded an omnibus on Route No. 4 of the appellant cooperative, on which the fare until then had been 55 prutot. The ticket collector refused to allow the respondent to travel with the season-ticket which he held. The reason given was that the fare for the journey had gone up in the meantime and that the ticket was no longer valid. Indeed in the schedule of "fares for journeys as from October 28, 1955", which was sent to the appellant by the Ministry of Transport, the fare for the journey on route No. 4, as from that date, was raised from 55 to 60 prutot. On the eve of the increase, on October 27, 1955, the appellant published a notice in the daily newspapers in the following terms: -

 

            "Season-tickets issued at reduced prices that are in the possession of the public will remain valid until November 15, 1955, for use on the same routes on which they  are valid today."

           

            As a result of this notice, the respondent was not allowed to use his season-ticket when he got on bus No. 4 on November 16, 1955. But the ticket collector explained to him that the appellant would be prepared to refund to him the value of the part of the ticket that had not yet been used.

           

4. The respondent sent to the appellant a notarial notice demanding refund of the damage caused to him as a result of the breach of its contractual obligations towards him. In a letter from its lawyer dated December 20, 1955, exhibit P/3, the appellant answered to the effect that the season-ticket did not entitle the respondent "to make so many journeys on a particular bus route" but that the respondent had purchased the right to make a number of journeys the price of each one of which was 55 prutot and that he could still continue to use his ticket even after the increase in the fares on those routes where the fare was 55 prutot. At the same time the appellant offered in the letter to refund the cash value of the unused part of the ticket.

 

5. The respondent refused both offers and lodged a claim for 360 prutot - the price of six omnibus journeys at the increased price - the cause of action being a breach of contract.

 

            The magistrate dismissed the claim on two grounds. Her reasons were that as the price of tickets had been fixed by the authorities the travelling public was protected from arbitrary increases in the fares. "In these circumstances it is possible to plead that the use of the season-ticket as issued was valid only so long as the fare for the journey remained the same as at the time when the ticket was bought; the passenger being a party, as it were, to the change in the fare through the authorities who control fares." In any event. said the magistrate, and this was her second reason - there has been sufficient time until the fifteenth of November for the respondent to use up the ticket in accordance with the original conditions. And the plaintiff himself, in claiming damages, had not done what was necessary to mitigate the loss as he should have done by using up the ticket in full until the date fixed by the appellant.

 

            Before I continue further with the facts of the case I would observe that this contention - that the respondent had failed in his duty to mitigate the loss - was not pleaded in the statement of defence of the appellant and that the magistrate was wrong in raising the point herself (A. Yehezkeli v. I. Shaposnik and another (l).)

           

6. The respondent appealed to the District Court and there the learned judges were divided in their opinion. The majority considered that the appellant had indeed committed a breach of the agreement it had made with the respondent. The minority judge however gave it as his opinion that there was no agreement to transport the respondent in its buses at all, but that the respondent had "converted money which was general legal tender for money of another sort which was legal tender only amongst the ticket collectors" of the appellant cooperative. It was as if for the sum of one pound and one hundred prutot he had purchased 23 tokens each one of which would entitle him in the future when paying his bus fare to the sum of 55 prutot. According to the view of the minority judge, the appellant cooperative had not broken its agreement, for even after the increase in the fares each of the squares in the ticket was still worth 55 prutot which the appellant was willing to return to the respondent in cash. The District Court therefore by a majority entered judgment against the appellant for the sum of 360 prutot whereas the minority judge held that the respondent was entitled to only 330 prutot. Hence the appeal before us.

 

7. I must confess that at first I was almost of the opinion that the minority judge was right.

 

            I was inclined to the view that buying the ticket was like buying so many stamps of 100 prutot each. This would not prevent the Postmaster-General from increasing, on the very next day, the postage rate payable on letters. And a person who bought the stamps could not claim that he was entitled to the right to send his letter to its destination at the old rate on the grounds that he had bought the stamps before the rise in rates. But the "agreement" with the post office is unlike any other agreement because the rights of the post office are statutory and are regulated by the provisions of section 3 of the Post Office Ordinance1). However, the consensual basis notwithstanding, one party may buy in advance a coupon of a certain value which may be given in payment, when occasion arises, while at the time of such purchase no agreement for the sale of an article or the rendering of a service has been created; and the coupon only constitutes a kind of private currency.

 

            When I examined the pleadings, however, it became clear that this contention was not what was pleaded at all in the statement of defence. In Paragraph 9 of that statement the Cooperative pleads "that the ticket must be considered as a pre-payment at the time of its purchase for 23 journeys at a certain price and not for journeys on certain routes." From this it seems to me that the parties agree that a contract had been made between them whereby the appellant undertook to transport the respondent in its omnibuses. And the language of the regulations above mentioned under which the season-ticket was issued supports this view. For the regulations speak of "season-tickets for 23 journeys" that are sold at a reduced price, as if 23 separate tickets had been sold and even in his letter to the respondent, exhibit P./3, the attorney of the appellant took the same point. Even so there remains some doubt regarding the ques­tion - did the appellant undertake to transport the respondent on those routes where at the time of the purchase of the ticket their fare per journey was 55 prutot or on those routes where the fare per journey would be 55 prutot at the time when the plaintiff was transported by the appellant?

           

8. Counsel for the appellant has stressed the point that the ticket had the figure "55" stamped on it and did not contain a description of the omnibus routes and at first glance this fact would seem to support the contention of the appellant. For if it had intended to sell tickets for specific routes, why were these routes in respect of which the ticket was valid not mentioned? But this hypothetical reasoning is contradicted by the language of the regulations under which the ticket was issued and sold, because the regulations provided for the sale of season-tickets of 23 journeys valid for all routes!

I take this to mean that the appellant was selling not a ticket of a certain value that would entitle its holder to transport of a certain value and price whenever required by him but a ticket that would entitle him to the right to make 23 journeys on certain bus routes. Because of the fact that the fare for the bus journey is the same on a number of routes - as for example routes numbers 4 and 5 - the appellant did not bother to print separate tickets for the different routes where the fare for the bus journey was 55 prutot, but issued a season-ticket of one kind that was valid for omnibus travel on all these routes. But there is no doubt that the appellant sold the ticket in compliance with the regulations and for this reason the number "55" was used only as a mark to indicate briefly the various routes - such as numbers 4 and 5 - where the fare per journey was 55 prutot, as if they had been set out on it.

 

9. Even so, did the ticket entitle the respondent to make 23 journeys on the above routes for an unlimited period of time? Although I have said that when the respondent purchased the ticket the parties had at that time made an agreement with regard to the 23 journeys on the omnibus, they did not define all the terms of the agreement except that the respondent was given the right from time to time to get on the bus on the routes indicated and to be taken to his destination. The question then is for how long a period did the respondent have to exercise this right? Suppose, on the one hand, that some one had purchased a ticket which afterwards he kept in his pocket-book for many years and finally just as the appellant had decided to suspend a route in order to keep up with the changing needs of the times - he came and claimed the right to use his old ticket. His claim would be refused. On the other hand, if the appellant had the right to cancel the route the day after it had sold the ticket, then for what purpose did the appellant sell a ticket valid for 23 bus journeys? This too is unlikely.

 

            In a similar matter it was said in Martin-Baker Aircraft Co., Ltd. v. Canadian Flight Equipment Ltd. (2), at page 732:

           

            "It is to be borne in mind that this agreement is an agreement in a commercial or mercantile field... and I do not feel that the law merchant would normally look at such an agreement as this as being an agreement intended to constitute permanent relationships... The Common Law, in applying the law merchant to commercial transactions has always proceeded, when filling up the gaps in a contract which the parties have made, on the basis of what is reasonable, so far as that does not conflict with the express terms of the contract... where the contract makes no provision for fixing either price or premium or time... then the law is that a reasonable price or reasonable premium or reasonable time, will be implied."

 

            The period for which the season-ticket was valid was not endorsed on it and we must impute to the parties that it was their intention that all the 23 journeys would be made within a reasonable period of time and it is the duty of the appellant to put at the disposal of the respondent the services of its buses during the whole of that period.

           

            10. Did the appellant fix a reasonable period when it published in the press on October 27, 1955, a notice giving passengers a period of 19 days during which they could still use their tickets ? I am of the opinion that it did not.

           

            Let us suppose that a ticket was bought a day before the publication of the notice regarding the rise in the fares and that the purchaser of the ticket was in the habit of travelling in the bus twice a day in order to get to his work. Failing something unusual the card would enable him to travel during 12 working days or two weeks. Of course some travel more frequently than twice a day. But when we come to imply a term such as this in a standard contract - which is imposed, after all, by one party unilaterally - we have to interpret the contract strictly against the appellant so that even extreme cases will be reasonably covered thereby.

           

            The respondent gave evidence to the effect that sometimes he bought two season-tickets and although tickets are not for hoarding as the magistrate pointed out, it is not unreasonable to buy two season-tickets at the same time in order to save standing in the queue. Moreover as one of the majority judges of the District Court said there could be times when the ticket is not used either because the owner is ill. away on business or on vacation. and there are other occasions that one can think of as well, such as when one uses a taxi in the rush hour when it is difficult to get into an omnibus.

 

            One has to take all these facts into consideration when one comes to fix the period during which the ticket is valid. I agree with the majority judges that 19 days is too short a period. For this reason the District Court was correct in holding that the appellant had broken its contract and I am of the opinion that the appeal must be dismissed.

           

OLSHAN, P. I concur.

SILBERG, J. I concur.

 

Appeal dismissed.

Judgment given on March 28, 1958.

 

1) The plural of prutah. This was the smallest coin used in Palestine in the early centuries of the present era. It was revived by the State of Israel where 1000 prutot = I.L. 1. It has since been abolished.

1) post office Ordinance, section 3 :

Power to fix rates and charges            3. The postmaster General may prescribe the rates and sums to be charged for such postal and other services as may be undertaken by the Postmaster General and the circumstances according to which those rates and sums are to be charged.

 

 

 

 

 

 

 

I concur with the ruling of my learned colleague, Justice Or.

Justice M. Cheshin

I concur with the ruling of my colleague, Justice Or. However, I must confess that in circumstances such as ours, I was attracted by the doctrine of evaluating the chances of the existence of a causal connection (as opposed to the doctrine of balance of probability), on which my colleague, Justice Strasberg-Cohen, based her opinion. “In circumstances such as ours” means in circumstances in which the injured person – the plaintiff – due (also) to the defendant’s actions and omissions, finds it difficult to prove a causal connection between the defendant’s actions and omissions and the injury incurred (by the plaintiff). Thus, for instance, one could argue that in circumstances such as ours – to which I confine my remarks – the justice of the principle of distributing and spreading the damage is preferable to the justice of the principle of “all or nothing.” This was also the case in the past when, in cases of contributory negligence, the principle of division of liability between the tortfeasor and victim replaced the principle of full exemption or full liability. It could therefore be argued that the same rule should apply in our case. The same rule is also applied regarding the division of liability between joint tortfeasors. Concededly, with respect to a causal connection between action or omission and damage caused, these two [aforementioned – ed.] cases are not identical to the case before us. Even so, it would seem that the underlying principle of distributing and spreading the damage should also find expression in circumstances such as ours. Since I concur with the opinion of my colleague, Justice Or, I have the good fortune of not having to decide the question. Its time will come.

Justice I. Englard

I concur with the judgment of my honorable colleague, Justice Or.

It was therefore decided by majority opinion in accordance with the opinion of Justice Or.

August 29, 1999.

 

 

 

 

 

 

 

 

 

Appeal allowed by majority opinion, Justice Ts. E. Tal dissenting.

28 Adar II 5755

30 March 1995.

 

C.A. 84/64

           

BETH HANANYA, WORKERS' COOPERATIVE SETTLEMENT LTD.

v.

MOSHE FREIDMAN et al.

 

 

In the Supreme Court sitting as a Court of Civil Appeal

[30 July 1964]

Agranat D.P., Berinson J. and Manny J.

 

 

 

Cooperative societies - membership - admission of wives - effect of long unchallenged usage - Cooperative Societies Ordinance, sec. 1.

 

 

At a general meeting of the appellant society a resolution was adopted amending a certain provision of its constitution. The respondents, members of the society, sought a declaration that the resolution was void because wives of members had voted thereon although not formally members themselves. The appellant pleaded that the wives had been duly admitted to membership, that it was customary, as throughout the settlement movement, for wives to become members and that the respondents were estopped from denying such membership. The District Court granted the declaration claimed.

 

Held, granting the appeal, that whilst normally a person did not become a member unless duly admitted under the relevant law or according to a society's rules, the question was whether or not in formally accepting a husband as a member the intention was to exclude his wife. Such intention could only be established by examining the circumstances. In the instant case, the only conclusion that could be drawn was that admission of a husband included his wife, especially as wives had always been treated as members for all purposes. The mode of admission to membership was left by law to a society's constitution and the statutory definition of "member" was broad enough not to exclude those who became members in some manner other than that specified in such constitution.

 

            A society's constitution was in the nature of a contract between it and its members or among the members inter se. In certain circumstances the contract might be varied by mutual consent evidenced manifestly in long continuous practice. Such variation received the force of a binding usage. That was so in the instant case, wives having been accorded rights and obligations equal to those of their husbands. The court could not equitably disregard this situation and set it at naught.

           

            To hold that the wives were not members would shake the society and others like it to their very foundations since it would render everything done by them void of all legal effect.

           

Israeli cases referred to:

 

(1)       C.A. 25/50 - S. Wolfson v Spinis Co. Ltd. (1951) 5 P.D. 265: 4 P.M. 26.

           

            Palestinian case referred to:

 

(2)   C.A. 5/40 - S. Cohen and Company and an. v. Abraham Capun (1940) 7.P.L.R. 80; (1940) 1 S.C.J. 63.

 

English cases referred to:

 

(3)       Lyle-Meller v. A. Lewis and Co. (Westminster), Ltd. (1956), 1 All E.R. 247.

(4)   Lewis H. Evans, Official Manager of the Agriculturalists' Cattle Assurance Company v. Aaron Smallcombe and an. (1868) L.R. 3 H.L. 249.

 

American case referred to:

 

(5) Francis v. Perry (1913) 144 N.Y.S. 167.

 

R. Navat for the appellant.

A. Fichman for the respondents.

 

BERINSON J.:                       The appellant is a workers' settlement constituted as a cooperative agricultural society (hereinafter referred to as "the society" or "the settlement"), and the respondents are members of the society.

 

            On 2 June, 1963, the general meeting of the society resolved to change the clause in the society's articles of association which deals with the settlement of disputes. At that meeting, as at all meetings of the society, members' wives participated and voted. The respondents claim that the wives are not members. Because they participated, the respondents applied to the District Court for a declaration that the above resolution was null and void and that the clause in its version prior to the resolution, remained in force.

           

            The society raised the following points in its defence:

           

1. The women were duly accepted as members.

 

2. In the settlement, as in all other workers' settlements of the Settlement Movement in Israel, there is a binding custom according to which wives are full members.

 

3. The respondents are estopped from denying the wives' membership.

 

            These contentions were not accepted by the District Court and judgment was given in favour of the respondents. In the present appeal, the same three points are raised and I shall deal with each of them.

           

1. With respect to the procedure for accepting members into the society. Mr. Tobel. the secretary of the society. testified as follows:

 

            "Application for membership is always made by both spouses together and both sign the application which is in the form specified in the society's articles of association... The committee considers the application after making enquiries about the personalities and the health of both spouses. They are both sent for medical examinations.  Should the committee find that one of the couple is unsuitable, neither is accepted. If the committee finds the couple suitable, it resolves to accept them and passes the matter on to the general meeting for approval. Only the name of the head of the family is designated in such approval. In my opinion, under this procedure the whole family is accepted as member."

           

            Mr. Tobel's opinion did not meet the approval of the learned Judge who held that "acceptance of members into the cooperative society may not be implied - it must be explicit". He deduced this from the definition of the term "member" in the Cooperative Societies Ordinance, and from the society's articles of association (hereinafter referred to as "the articles") which specify that the decision of the administrative committee to accept a member must be approved by the general meeting.

           

            It is true that usually a person does not become a member unless he has been duly accepted in accordance with the provisions of the law and the articles as they stand. Nevertheless, it seems to me that the learned Judge was in error here. First, we are not dealing with the question of implied acceptance of members. There is no dispute that the women, together with their husbands, signed the written applications for joining the society or that the committee would decide whether to accept or reject both husband and wife. The committee's decision would be passed to the general meeting for approval and the general meeting would approve the application in the name only of the husband. The sole question that might arise is what was the intention of the general meeting in giving its approval? Was it to approve the husband alone and to reject the wife or to approve them both even though formal expression of such approval was made in the name of the husband alone. In the Corpus Juris Secundum. vol. 7. p. 56, sec. 23(b), we find:

 

"One may become a member of an association by formally signing its articles, or in any other way that shows a mutual agreement between himself and the existing members that he is a member. But membership is a question of intent and cannot be established by any facts which fail to show the existence of a mutual intent that one shall be a member of the association... It is sufficient if the existing members agree to accept him as a member, and he agrees to become such, with the mutual understanding that he shall be entitled to all the rights and privileges incidental to membership, and shall assume all the duties and obligations attaching thereto, the question of membership depending on the intent and understanding of the parties."

 

The task therefore is to discover the true intention of the parties, having regard to all the circumstances of the case. First and foremost, obviously,  the conduct of the parties at the time of the application and their understanding of the outcome must be considered. Mr. Tobel's testimony regarding the acceptance of new members was absolutely clear. He found no express approval by the general meeting of the acceptance of the wives as members of the society but he testified that the approval of the general meeting in the name only of the husband, is viewed as approval of both husband and wife: "When it is decided to accept a new member, a whole family, and not just the one member, is accepted". This also emerges from the fact that the settlement does not accept bachelors. Bachelors who joined the settlement when it was first founded were required to marry within two years and those who did not do so were forced to leave. "At present" said Mr. Tobel, "there are no bachelors on the settlement".

 

            It is a fact that throughout the existence of the settlement, new members have been accepted in the above manner and when a new family is accepted,  everyone considers the wife to be a member with equal rights and obligations in every respect. Wives participate in the activities of the settlement together with their husbands; they participate in the general  meetings and enjoy the right to vote, they are elected to the institutions of the settlement and act in its name, just like their husbands. Accounts in the settlement are kept in the name of both spouses on the clear assumption that both are members of the society.

 

            In the light of these facts, the only possible conclusion is that the association in its general meetings would accept both spouses as members, even though only the name of the husband appeared in the minutes.

           

            This conclusion certainly does not contradict the articles of association, for, as we have said, the intention of the general meeting in approving the decision of the committee in the husband's name only is to accept both husband and wife as members. The best evidence of this is that subsequent to the approval, the wife is treated by all as a member of the settlement in every way. Nor is this conclusion contrary to the law, as the learned Judge thought, relying on the definition of "member" in section 2 of the Cooperative Societies Ordinance. According to this definition:

           

            " 'Member' includes a person joining in the application for the registration of a society and a person admitted to membership after registration in accordance with the rules (of the society) and this Ordinance and the regulations made thereunder."

           

            I have already said that the admission of the women was in fact consistent with the articles of association, for the action of the general meeting can only be interpreted as approval of the membership of both husband and wife. The Cooperative Societies Ordinance and the regulations made thereunder do not prescribe conditions for the admission of members. The regulations stipulate only that every association must in its articles of association specify the conditions for the acceptance of members, and the method of choosing them. When the choice is made in accordance with the articles, all the requirements of the law relating to this matter are satisfied. Similarly, the definition of "member" in terms of "includes" is not exhaustive, i.e., it does not preclude the possibility of a person becoming a member of the settlement in a manner different from those specified in the definition. Consequently, even if the admission of the women did not conform to all the specific provisions of the articles of association, nevertheless, since they were in fact recognized as members for many years, enjoying the benefits and bearing the responsibilities of membership, such de facto recognition gives rise to the assumption that their membership is in order de jure as well.

 

            I could in fact have ended my judgment here but because both sides argued at length on two other questions of great public importance, in that they relate not only to the present litigants but to all the workers' settlements belonging to the Settlement Movement, I will also deal with these questions as briefly as possible.

           

2. The second submission of the appellant is, as I have said, that the practice with respect to the acceptance of members has become so firmly rooted that it has become a binding custom which the respondents may not deny. The practice has been the same since the settlement was founded in 1951. Moreover, all other settlements belonging to the Workers' Settlement Movement have followed the same practice for as long as the Movement has existed. Mr. Arazi, a member of the secretariat of the Movement and the coordinator of its membership committee, pointed out: "I am familiar with the procedure for accepting members in all the settlements in Israel. In all settlements, it is customary for the acceptance of members to include the acceptance of female workers". There is no doubt that all those concerned knew of the practice and conformed to it. The learned Judge, however, thought that the practice cannot be binding because it is contrary to the law. The contradiction, he thought, lay in the fact that by giving the right to vote to both a member and his wife, a member would have two votes, whereas section 16(1) of the Cooperative Societies Ordinance allows each individual member one vote only. It would seem that conceptually, this view is based on the ancient rule of the Common law, taken from the Pentateuch, that a man and his wife are "of one flesh" (Gen. 2:24) and therefore the wife's act is that of the husband. This view is fundamentally wrong from both a legal and a factual point of view. The wife's right to her own opinion is given to her by virtue of her separate personality and membership. When the wife expresses her opinion on matters concerning the settlement, she is exercising this right of hers and in no manner can her vote be equated with the vote of her husband. Consequently, the husband is not given two votes but only one by virtue of his membership and the wife too has a vote by virtue of her membership. There was therefore no violation of the provisions of section 16(1) of the Ordinance.

 

            In support of his view denying the binding force of the above practice relating to the mode of accepting new members. the learned Judge quoted the following passage from Wurtzburg. The Law relating to Building Societies. (9th ed.) p. 21:

           

"As between the society and its members, a course of dealing at variance with the rules, for whatever length of time it may be pursued and acquiesced in, is of no validity whatsoever."

 

            The author himself adds a warning note to the effect that the authorities upon which this statement is based are not particularly strong and that his words must be read with caution. I have looked at those of the sources which I could obtain and can find in them nothing clear and explicit in support of Wurtzburg's view. And it is no wonder, for the principle emerging therefrom does not, in my opinion, conform to the accepted position of the law on this matter. The very same author says elsewhere (at p. 41):

           

"Sometimes a person is estopped, by virtue of an agreement and acceptance, from denying the legality or validity of a new regulation."

 

            That is correct. The articles of association are only an agreement between the society and its members, or amongst the members themselves, under which they proceed by mutual consent. In certain circumstances, a deviation from the articles of association will have effect because of such consent. When the deviation persists continuously for a sufficient period of time and is known to all those concerned and decisive in their mutual relations, it acquires the force of binding custom which the law recognizes, just as it recognizes every other custom or commercial usage which those concerned cannot deny.

           

            For this reason, there is no doubt that the usage with respect to the acceptance of members in the appellant settlement, in terms of duration, persistence and continuity and in view of its familiarity (Wolfson v Spinis (1) and Cohen v. Capun (2)], has become a binding custom not to be challenged.

           

3. The last argument is that in view of the circumstances, the respondents are estopped from denying the membership of the wives.

 

            After all that has happened. it is difficult to understand how the respondents summoned up courage to argue against the membership of the wives. One only has to see how in the past the respondents served in various capacities in the society and were elected at meetings in which women participated and voted. Together with their wives, they initiated various claims against the appellant in which they admitted that they and their wives were members of the society. All members of the settlement, including the respondents, looked upon the women as members of the settlement with rights and duties equal to those of the men, and not a murmur has been heard against membership of women since the settlement was founded. Now, after all this. the respondents wish to exclude the women, saying: "What happened in the past happened, but it was worth nothing, as if it had never happened." A person attempting to make such a claim must be clearly told: "What happened in the past is still valid, and will continue to be so in the future." A court of equity will not consider an argument which disregards the facts of life and attempts to dismiss them with a wave of the hand. The court will act upon the principle that a person must stand by his deeds and his words when another has acted upon them and, as a result, prejudiced his situation.

           

            Counsel for the respondents claims that the respondents' belief that the women were members was founded on a mistaken legal outlook and took no account of the real position. This contention is incorrect for a number of reasons. The question whether a particular person is a member of a society is a question of fact, see Francis v Perry (5) at p. 281, which quotes the Legal Encyclopaedia of America and England vol. 25, (2nd ed.) p. 1134, and no one will dispute that misrepresentation of fact is grounds for estoppel. We have already seen that the question of the membership of the wives hinges on determining the intention of the general meeting and that, too, is a question of fact. At most, it might be said that this is a factual conclusion arising from that which was proved, or that it is a mixed question of fact and of the law concerning the legal relationship between the parties. Even were it so, we have found a judgment of Denning J., in Kyle-Melle rv. Lewis & Co. Ltd. (3) (at p. 250), according to which misrepresentation, or deception,give rise to estoppel. In his words:

           

"I do not think that it is necessary to go into these refinements about law and fact. I am clearly of the opinion that this assurance was binding no matter whether it is regarded as a representation of the law or of fact or a mixture of both, and no matter whether it concerns the present or the future. It may not be such as to give rise to an estoppel at common law which was restricted to representations of existing fact; but we have got far beyond the old common law estoppel now. We have arrived at a new estoppel which affects legal relationships."

 

            The absence of any action which the actual situation demanded, when the position was known, is liable to be interpreted as a silent admission or as acceptance of the law, preventing the relevant party from later arguing the opposite. Such estoppel, arising as a result of silence when the position was known, has found expression in the decision of the House of Lords in Evans v. Smallcombe (4), where the Court ruled that shareholders in a company, who knew how a situation was developing and remained silent, are estopped from challenging the outcome if they did not protest at the time the event occurred...

           

            The District Court also held that one of the conditions for the application of estoppel was not fulfilled since no proof existed that the settlement had, by reason of the conduct of the respondents, changed its position to its detriment. "If the respondent settlement wishes to make the required changes in its articles of association, it can easily hold another general meeting and see to it that only the male members participate." This is a very narrow view of the issue and it misses the main point. The estoppel that was claimed against the respondents does not concern the said resolution of the general meeting but rather the question of the wives' membership: the fate of the decision hinges on this latter question. A determination to the effect that the women are not members of the settlement would be of tremendous importance and could shake the settlement to its very foundations. A workers' settlement is a way of life based on the principles of equality, mutual aid and responsibility, and the existence of communal living and services for the benefit of all the members, including women whose status and rights are equal to those of the men. From an analytical point of view, a decision that the wives are not members of the settlement and consequently are denied the right of lawful participation in the social and economic activities of the settlement would be a hard blow to the structure of the settlement and to the principles it advocates and would mar its character. From a practical point of view, such a decision would mean that everything that has been done in the settlement since its inception is without force and void ab initio because everything that took place at the meetings and in its institutions occurred with the participation of the women as subjects of equal rights to those of the men. Furthermore. in the light of Mr. Arazi's testimony, that the same situation applies in all the settlements belonging to the Cooperative Settlements Movement of Israel. it may be said chat everything that has been done in all the settlements and in the Settlement Movement itself from the very start is, and always has been, devoid of legal force. Obviously, such a result is most grave and could cause total confusion to the appellant and to all the ocher workers' settlements in Israel. This Court must do everything within its power to prevent the creation of such a terrible situation, to the extent that the law allows such action. Fortunately, the law does make such action possible, as explained above, for a number of reasons.

 

            In view of what we have said, the appeal is allowed, the decision of the District Court is hereby over-ruled, and the respondents' action dismissed, and the costs from both this Court and the District Court, in the sum of I.L. 1200, will be borne by the respondents.

           

            Appeal allowed

            Judgment given on 30 July 1964.

C.A. 370/63

           

 

MUSAH BASSET and CALEDONIAN INSURANCE CO. LTD.

v.

HAPOL COMPULSORY INSURANCE LTD.

 

           

The Supreme Court sitting as a Court of Civil Appeal

[March 15, 1964]

Before Olshan P., Agranat D.P. and Berinson J.

 

 

Insurance - traffic accident - liability to third parties - right of contribution among insurers - Civil Wrongs Ordinance, 1944, sec. 64(1)(c) - Motor Vehicles Insurance Ordinance (Third-Party Risks), 1947, sec. 10(1) and (2)(a).

 

            The first appellant was involved in a traffic accident, for which he was partly responsible. as a result of which a number of persons were injured. The respondent, the insurer of the other vehicle, settled the claims of some of the injured in negotiations outside court, after having invited the appellants to join in the negotiations. The latter refused to do so nor did they make any contribution to the payments made by the respondent who sued for contribution. The appellant denied liability and applied for the action to be dismissed in limine for no cause of action.

           

Held. The right of contribution lies in Equity or quasi-contract and not in contract, since it would not be just for a party to be relieved from a financial burden and thus be enriched at the expense of another. The right is available whenever two people are liable in solidum and not necessarily jointly or jointly and severally. When two people are liable in respect of the same matter, the presumption, in the absence of evidence to the contrary, is that each must bear half of the liability, and if one pays more the other is unlawfully enriched at his expense. The underlying principle is flexible and therefore applicable to all kinds of different situations, irrespective of whether judgment has been obtained regarding liability of the person from whom contribution is claimed, provided it is to be anticipated that if action had been taken against him he would have been rendered liable.

 

Israel cases referred to:

 

(1)   C.A. 479/60 - Natan Apelstein and others v. Juliet and Zwi Aharoni (1961) 15 P.D. 682.

(2)       C.A. 203/54 - Zion Shalti v. Moshe Canterowitz and others (1955) 9 P.D. 559.

(3)       C.A. 294/53 - David Caspi v. Moshe Yaakov (1955) 9 P.D. 1858.

(4)       C:A. 33/54 - Commercial Union v. Abraham Sher and others (1954) 8 P.D. 427.

(5)   C.A. 255/56 - Rolf Karman v. "HaSneh" Israeli Insurance Co. Ltd. (1956) 10 P.D. 1912.

(6)   C.A. Tel Aviv-Jaffa, 176/59 - Meir Greitzer v. "Bohan" Insurance Co. Ltd. (1960) 23 P.M. 212.

(7)   C.F. Jerusalem, 22/53 - Shlomo Zaddok v. Eliezer Ben Pinhas Schweitzer and others (1958) 16 P.M. 129.

 

English cases referred to:

 

(8)   George Wimpey and Co. Ltd. v. British Overseas Airways Corporation (1954) 3 All E.R. 661; (1955) A.C. 169.

(9)   Edward Deering v. Earl of Winchelsea, John Roes, and The Accorney-General 126 E.R. 1276 (1787).

(10)     Samuel Stirling and others v. Robert Forrester 4 E.R. 712 (1821).

(11)     Whitham v. Bullock (1939) 2 K.B. 81: (1939) 2 All E.R. 310.

(12)     Merryweather v. Nixan 101 E.R. 1337 (1799).

(13)     Palmer v. Wick and Pulteneytown Steam Shipping Company, Ltd.(1894) 2 A.C. 318.

(14)     Adamson v. Jarvis 130 E.R. 693 (1827).

(15)     The Englishman and The Australia (1895) P. 212.

(16)     The Koursk (1924) P. 140.

(17) Romford Ice and Cold Storage Co., Ltd. v. Liscer (1955) 3 All E.R. 460: (1957) 1 All E.R. 125.

           

L. Weinberg and R.A. Gipter for the appellants.

D. Friedman for the respondents.

 

AGRANAT D.P.:                  In this appeal an interesting question falls to be considered: in the event of a collision between two vehicles due to the negligence of both the drivers, a third person is injured who thereafter settles with the insurer of one of the drivers and receives from it a sum of money for damages, is that insurer entitled to resort to the second tortfeasor and his insurer for part of the sum which it paid to the injured person?

            This question was raised in an action brought by the respondent against the appellants in the Tel Aviv-Jaffa District Court, based principally on the following facts:

           

(a) In the evening of 6 July 1961, the first appellant was driving a lorry on the Hadera-Netanya road and because of a puncture in it, he stopped and parked the lorry at the side of the road but with its wheels projecting on to the road and without leaving enough light in the lorry, including the rear, to warn persons travelling along the road of its presence.

 

(b) Some time afterwards, a bus driven from the direction of Hadera by one Ya'acov Mokhof, collided with the lorry so parked without enough light, and as a result, a number of passengers in the bus were injured, one of them dying from his injuries.

 

(c) At the time of the accident the second appellant was the insurer of the lorry in accordance with the Motor Vehicles Insurance Ordinance (Third-Party Risks), 1947 (hereinafter called "the 1947 Ordinance"), while the respondent was the insurer of the bus as aforesaid.

 

(d) Following the accident, negotiations took place outside court between the respondent and some of the injured over their claims for damages, and a compromise was reached, according to which the respondent paid them a total sum of IL 25,010 in settlement.

 

(e) The appellants were also invited to join the negotiations but they refused to do so and did not share in the payment of damages which the injured received.

 

(f) In the above-mentioned action the appellants were requested to share in the said payment up to half and therefore to reimburse the respondent the sum IL 12,505.

 

            The appellants filed a Statement of Defence wherein they denied their obligation to share in the sum paid by the respondent in accordance with the settlement and then applied to the District Court to strike out the action in limine for lack of cause of action. In a reasoned judgment of 12 July 1963, the learned judge dismissed the application. This appeal is brought against that judgment.

           

            In support of the appeal, the appellants' counsel repeated the two main arguments, on which he had relied before the judge. (a) There is no dispute between the parties: (b) the respondent is not entitled to claim contribution from the second appellant (the lorry's insurer) in the given amount, without the obligation to make good the damage of the persons injured in the accident having been imposed on the latter in accordance with section 10 of the 1947 Ordinance. For such an obligation to arise, he went on to argue, prior conditions must be fulfilled, one that judgment was given in favour of the injured against the first appellant (the lorry driver), and the other that the first appellant received advance notice of the proceedings in which the judgment was given. The respondent does not argue here that these conditions or either of them was fulfilled before the payment was made; it was also impossible for them to be fulfilled after the payment, because when the settlement between the injured and the respondent was reached and the latter paid them monies to discharge their claims, they got full satisfaction. The second appellant therefore does not have to indemnify the respondent in respect of these monies.

           

            In my opinion there is no foundation for these arguments. To explain that, I proceed on the three following assumptions.

           

(1) In the Statement of Claim the respondent pleaded that "the accident was totally or mainly caused through the negligence... of the first defendant" (the lorry driver). In view of this plea, it was perhaps possible to think that when the respondent paid the injured persons' claims in accordance with the settlement, it acted as a volunteer and therefore has no cause of action against the appellants. But I do not wish to lay down any hard and fast rule on this point because appellants' counsel in his summation made no submission in this vein. On the other hand, respondent's counsel in his summation attributes negligence also to the bus driver for the accident in saying "that the share the respondent claims from the appellants is in accordance with the proportion between its insured's negligence and the first appellant's negligence". Not only that, but the respondent also set his claim at half the sum paid by it to those injured in the accident. Accordingly, I find that it is necessary to deal with this appeal on the assumption that the cause of the damage should be attributed to the negligence of each of the two drivers.

 

(2) Attention must be paid to the fact that owing to the aforementioned settlement the two conditions set out in section 10 of the Ordinance and mentioned above were also not fulfilled as regards the respondent. But I am of the opinion that this matter cannot prejudice the respondent's cause of action, because the fact that it paid the said monies to the injured persons in accordance with the settlement must be regarded as an admission on its part of its liability to discharge their claims, within section 10 above; that is to say, the payment together with the admission it implies takes the place of the fulfilment of those conditions. (See by analogy, the example in paragraph 14(b) in the judgment of Sussman J. in Apelstein v. Aharoni (1) at p.696: see also the remarks of Lords Simonds and Reid in George Wimpey & Co. v. B.O.A.C. (8) at pp.664 and 672; and further G. Williams, Joint Torts and Contributory Negligence, paragraph 31, p. 97; Fleming, Law of Lores, 2nd edition, pp. 694-695). It will be noted that no argument by the appellants was heard against this assumption either.

 

(3) According to the first above assumption in connection to the facts pleaded in the Statement of Claim, it follows that the two drivers cannot be regarded as joint tortfeasors, but only as tortfeasors who contributed to the occurrence of the same tortious result by negligent actions which were separate from and independent of one another (concurrent tortfeasors). Yet it is clear - and that is my third assumption – that by the respondent (the insurer of the bus driver) settling the claims of the injured, also the lorry driver (the first appellant) is freed from all liability towards them for the damage they incurred (G. Williams, op.  cit., paragraph 9, p. 34; Shalci v. Canterowitz (2) at p. 560). And the insurer of the lorry driver (the second appellant) as well is ipso facto freed from all liability towards them for the same damage. Appellants' counsel concurred in this view and indeed this concurrence is closely related to his argument that since the claims were discharged by the respondent in accordance with the settlement, no proceedings would be instituted by the injured for damages from the appellants because "a settlement with one joint tortfeasor releases the second", although in using the expression "joint tortfeasor", counsel was imprecise in his language, as explained above.

 

            In the light of these assumptions let me give the reason for my opinion that the arguments of appellants' counsel rest on shaky foundations. To do so, I must first deal with the meaning of the right of contribution.

 

(a) As is known, the source of this right lies in the rule of Equity that equity is equality, and accordingly, if two people have to fulfil the same financial claim of a third person and it is discharged by one of them, so that the other is wholly or partially freed from this burden, the former is entitled to resort to him and exercise the right of contribution at a rate considered by the court to be just in the circumstances of the case. The reason for this rule is that in such a case it would not be just that one debtor freed from financial burden should be enriched at the expense of the debtor who brought about this result. The right of contribution is therefore based on the principle of justice - literally - and not on the existence of any contractual relations whatsoever, though a contract can negate it completely or limit it (see Halsbury-Simonds, Laws of England, Vol. 14, paragraph 934, pp. 492-493). What emerges from this is that the fact that the liability which rested on the two was a liability in solidum - and not necessarily joint, or joint and. several is sufficient to attach to the payer the right of contribution. Even as early as 1787 it was decided in Deering v. Earl of Winchelsea (9) that one guarantor who paid a debt could resort to another guarantor, even though between them there was no relationship and the two guarantees were created under separate documents; and the court affirmed the rule in 1921 in Stirling v. Forrester (10). In the first of these cases Lord Eyre said (at p. 1277)

 

"the bottom of contribution is a fixed principle of justice, and is not founded in contract. Contract indeed may qualify it".

 

And then (at p. 1278)

 

"In the particular case of sureties, it is admitted that one surety may compel another to contribute to the debt for which they are jointly bound. On what principle? Can it be because they are jointly bound? What if they are jointly and severally bound? What if severally bound by the same and different instruments? In every one of those cases sureties have a common interest and a common burthern. They are bound as effectually quoad contribution, as if bound in one instrument, with this difference only, that the sums in each instrument ascertain the proportions, whereas if they were all joined in the same engagement they must all contribute equally."

 

In the second case Lord Redesdale said (at p. 719):

 

"The principle of Deering v. Lord Winchelsea proceeded on a principle of law which must exist in all countries, that where several persons are debtors all shall be equal... . The duty of contribution extends to all persons who are within the equitable obligation."

 

In the modern period the principle of contribution was formulated by Clauson J. in Whitham v. Bullock (11) in the following words:

 

"In equity the principle must be regarded as covering cases in which there is community of interest in the subject-matter to which the burden is attached, which has been enforced against the plaintiff alone, coupled with the benefit to the defendant even though there is no common liability to be sued."

 

            In view of the rationale of the contribution principle - that it is only intended to prevent unlawful enrichment - leading jurists are of the opinion that one must relate it today to "quasi-contract" (see Woodward, The Law of Quasi Contract, pp. 391, 409: G. Williams, op. cit., paragraph 30, p. 95). According to this approach the application of the principle in local law was thus explained by Cheshin D.P. in Caspi v. Yaakov (3) at p. 1863:

           

"The duty of the remainder of the debtors to share in the payment made by one debtor is 'quasi-contractual' in nature and is intended only to prevent unlawful enrichment. Where two are liable for one debt, the presumption is - if there is no proof to the contrary - that each must pay a half. If follows that if the one pays more than his share, the other is unlawfully enriched at his expense, and the extent of the enrichment is measured by what the first was forced to pay in excess of his share... . The emphasis is therefore on the unlawful enrichment at the expense of his friend, that is to say, on the unfair and unjust basis of enrichment."

 

 (See also B. Cohen J. in Greirzer v. Bohan (6) at p. 216.)

 

            These observations instruct us that the principle with which we are dealing - whether part of the rules of Equity or whether it must today be related to "quasicontract" - is of a wide and flexible character and therefore applicable to different and changing factual situations. as attested by the many examples of its practical application cited by respondent's counsel in his summation. Additional evidence in this regard can be found in an article published in Yale Law Review (Vol. 45. p. 153]:

           

"Analysis shows that contribution... is a flexible doctrine applicable in many situations where it is desirable to prevent unjust enrichment."

 

            The result of the above is that despite the absence of any issue between the parties by virtue of contract or enacted law, no logical reason seems to exist to prevent the application of the principle to the present case. On the one hand, the persons injured were entitled to claim from each of the parties the payment of damages, and on the other discharge of these claims by the respondent released the appellants therefrom and justice therefore demands that they participate in the said payment at the appropriate rate, so that they are not enriched at the expense of the respondent.

           

(b) Appellant's counsel submits: when the local legislator provided - in section 64(1)(c) of the Civil Wrongs Ordinance, 1944 - an arrangement according to which a tortfeasor who settles a claim for damages of the injured party is given the right of contribution from a joint tortfeasor, it did not direct that the tortfeasor's insurer should have an identical right when it was he who settled the claim. Furthermore, when the legislator provided in section 10 of the 1947 Ordinance that the injured person is entitled to recover damages directly from the insurer of the driver who caused the accident, again it did not provide that the same insurer should, after making good the damage, have the remedy of contribution from the other tortfeasor and his insurer. The conclusion is that the legislator's silence on this matter in the above two provisions means that it did not intend the above right to accrue to the insurer/payer, whether in respect of the other tortfeasor/driver or his insurer.

 

            This argument does not recommend itself to me. But in order to withstand it, I must further review the development of the English law in relation to the principle of contribution, to the same extent that it concerns the question of its application to tortfeasors amongst themselves.

           

(1) Considering the breadth and nature of the principle, it seems that the English judges would have had no difficulty - even before provision of the statutory arrangement mentioned in section 6(1) of the Law Reform (... Tortfeasors) Act, 1935, which is parallel to that in section 64(1)(c) of the local Ordinance - in recognising the right of the tortfeasor who paid the injured party his damages to have recourse to his joint tortfeasor. The Common law did not, however, at first proceed in this logical and direct manner. On the contrary, when the question arose - and that was in 1799 in Merryweather v. Nixan (12), Lord Kenyon laid down the rule that no right to contribution exists as between tortfeasors themselves and that, it seems, for the reason that a tortious act is regarded as an illegal act and therefore the court will not assist a plaintiff when his cause of action is based on such conduct: ex turpi causa non oritur actio. (As to this explanation of the rule, see G. Williams, op. cit., paragraph 26, p. 80.)

 

(2) Not many years passed, however, and it became apparent that the rule could lead to an unjust result because the injured party could get satisfaction by claiming against only one of the tortfeasors at his choice and with settlement of the claim by the latter, the other tortfeasor would be freed from liability towards the injured party without having to restore anything to the payer in respect of his share in the injury (dicta of Lord Herschell and Lord Watson in Palmer v. Wick, etc. Co. (13) at pp. 318, 324, 326, 327, and Lord Porter in Wimpey (8) at p. 666). It was therefore sought to ameliorate the rule so that contribution is not denied a tortfeasor who was compelled to pay - and paid - the damages of an injured party for a civil wrong committed in good faith and without moral fault. That was the factual situation dealt with in 1827 in Adamson v. Jarvis (14). There, the plaintiff sold on behalf of the defendant and according to his instructions the property of another person, in the bona fide belief - having so heard from the defendant - that the property belonged to the latter. After the true owner had sued and recovered damages from him, the seller presented a claim against his principal for return of the amount and his claim was accepted. In his judgment Best C.J. said:

 

"From the concluding part of Lord Kenyon's judgment in Merryweather v. Nixan and from reason and sound policy, the rule that wrong-doers cannot have redress or contribution against each other is confined to cases where the person seeking redress must be presumed to have known that he was doing an unlawful act."

 

(3)       It had not yet been clarified whether this rule was intended to limit the applicability of the "prohibitive" rule, laid down in Merryweather (12) to an intentional conscious tortfeasor or whether the rule still operated to deny this remedy also from a tortfeasor who had merely acted negligently. This question was dealt with by the House of Lords in Palmer (13), but was not finally settled because judgment was given in accordance with Scottish law which never recognised the above-mentioned rule at all. Lord Herschell, however, had some harsh things to say about the rule (at 324) although he agreed that it was still in force in the English law:

 

"It is now too late to question that decision in this country; but when I am asked to hold it to be part of the law of Scotland, I am bound to say that it does not appear to me founded on any principle of justice or equity, or even public policy, which justifies its extension to the jurisprudence of other countries. There has certainly been a tendency to limit its application in England."

 

            Furthermore, after pointing out - with approval and as evidence to the "softening" tendency evident in the precedents - the decision of Best C.J. in Adamson (14], he added:

           

"If the view thus expressed... be correct (and I see no reason to dissent from it), the doctrine that one tortfeasor cannot recover from another is inapplicable to a case like that now under consideration."

 

            In view of the fact that Palmer (13) was decided according to Scottish law, the words last cited were, it must be understood, not necessary for the merits of the case and were not binding (see the observations of the other Lords who sat in judgment, and especially those of Lord Halsbury at pp. 333-334; but compare G. Williams, op. cit., p. 83). Indeed, in later cases it was decided that in cases of negligence, a tortfeasor could not turn to his negligent co-actor for contribution whether the two were joint or concurrent tortfeasors (see The Englishman and The Australia (15) and The Koursk (16)).

 

(4) That was the juridical situation in the matter on the eve of the enactment of the Act of 1935 which came to close the breach and provided for the remedy of contribution as between tortfeasors themselves. In explaining the object of this law, Lord Porter said in Wimpey (8) (at p. 666):

 

"Before the passing of the Act it was left to the claimant to choose his victim. The person sued, whether he was a joint or a separate tortfeasor, if he was implicated as being partly responsible for the accident, had to abide by that choice... . The object of the Act was to cure this evil and to enable those on whom the burden had been placed to recover a just proportion from those who shared the blame."

 

(5) In his book, written in 1951, Williams expressed the view (p. 84) that since the above-mentioned Act, the rule laid down in Merryweather (12) has become obsolete, and in any case it certainly is not in force as regards negligent tortfeasors (p. 87). And then, after some years, the question arose whether the same rule still constitutes an obstacle to a claim for contribution by one joint tortfeasor against the other, not based on the 1935 Act but on another cause of action (breach of contract). I refer to the case of Romford Ice Co. v. Lister (17). According to the facts, one of the plaintiff's employees was injured when a car driven by his son, the defendant, struck him. The son also was the plaintiff's employee, being employed as a driver for many years. Because the accident occurred in the course of fulfilling this function and was caused by negligent driving, the plaintiff was liable - on the ground of vicarious liability for the driver's negligence - to pay damages to the injured party and were so paid by the plaintiff's insurance company.

 

            Afterwards, the insurer, in the name of the plaintiff, claimed - on the basis of the right of subrogation under the insurance policy - indemnity from the defendant (the driver). The latter pleaded (inter alia) that his employer (the plaintiff) is to be regarded in law, by reason of its vicarious liability for his negligence, as a joint tortfeasor and is         therefore to be denied contribution by virtue of the Common law rule, since its claim was based on the ground that the defendant had been in breach of his contractual obligation to fulfil his duty of driving with competency and reasonable care (and not on the 1935 Act).

           

            This argument was not accepted for the reason that no moral fault lay on the plaintiff for the negligent act of its employee, in respect of which it was liable to pay damages to the injured party, and it was to be considered as a joint tortfeasor only in a narrow technical sense; therefore the "ameliorating" rule, laid down by Best C.J. in Adamson (14) was applicable. This is what Romer J. had to say (at 478):

           

"The general principle, which the defendant invokes, is certainly supported by venerable authority (see e.g. Merryweacher v. Nixan), but it is not a rule of universal application... . Although the plaintiffs were liable in damages to the defendant's father for the accident which befell him, they themselves were morally blameless in the matter and their liability to the father arose solely from the fact that they were answerable for the negligence of the defendant himself. In these circumstances, it would ... be a flaw in our law, and against natural justice, to permit the defendant to rely on his own wrongful act as a defence to proceedings for breach of contract... . The current of ... authority ... on the point is distinctly the other way."

 

And after citing Best C.J., he held:

 

"The plaintiff's action in the present case, based on breach of contract, is not defeated by the suggested principle that there can be no contribution between joint tortfeasors."

 

            The judgment was upheld in the House of Lords on other grounds, but these observations of Romer J. were approved by Lord Simonds (at p. 135).

           

(c) On the basis of this survey it is to be concluded that once a person injured in a road accident is given the statutory right to levy damages from the insurer of the negligent driver, there is no need for the legislator to provide a special arrangement whereby the insurer, after having paid the damages adjudged against it, is able to claim contribution from the driver who was a partner to the injury, because the "prohibitive" rule of the Common law cannot - after being limited and "softened" as aforesaid - frustrate such a claim. The insurer which made good the damage of the injured person was not itself guilty of any illegal or immoral behaviour whatsoever with regard to the injury caused by the insured; as was emphasised by the writer of the above-mentioned Note (Yale L.R., Vol. 45, p. 154):

 

"The reasoning invoked to deny contribution between co-tortfeasors can have no application to their indemnitors, whose interests are opposed to the commission of torts, and who come into court with clean hands."

 

            I think that this should have been the law even had the statutory arrangement in section 64(1)(c) of the 1944 Ordinance not negated the validity of the rule forbidding the grant of the said remedy to one tortfeasor against his associate, since the position of the insurer who has made good the damage of a person injured in a road accident is no less strong than the employer in Lister (17), especially as in order to recover the monies it has paid it has no need of subrogation of the rights of the insured as against the other wrongdoer:

           

"Contribution does not depend on subrogation" (ibid., p. 152, note 25).

 

A fortiori the remedy should not be denied such an insurer when the juridical situation today - both in England and in Israel - is that the above-mentioned rule lacks validity. This view finds support in the words of the writer of an article in the Harvard Law Review (Vol. 50, p. 989):

 

"Where this rule has been abrogated by judicial decision, the insurer of one wrongdoer has obtained contribution from a joint wrongdoer and his insurer.... It is difficult to understand why a statute abolishing these disabilities inter se of joint wrongdoers should not have at least as great an effect as a judicial decision abolishing them."

 

            The conclusion is that in the absence of a contract to the contrary, no reason exists - whether grounded in law or in the public policy - to  justify denying the insurer the remedy of enforcing contribution against the party implicated in the injury along with the insured, after it has made good the damage caused by the negligent driving of the insured. Therefore, the argument of absence of issue falls away on its two parts.

 

(d) It will be recalled that the second main argument of appellants' counsel is that as long as the two conditions mentioned in section 10(1) and (2)(a) of the 1947 Ordinance have not been fulfilled - the giving of a judgment which charges the first appellant to pay damages to the injured persons and receipt of the statutory notice by the second appellant - its obligation to settle their claims does not and cannot arise in the future, because after the injured persons have received satisfaction it is impossible for the above conditions ever to be fulfilled; the respondent therefore does not have the right to sue the appellant for contribution. This argument also I cannot accept.

 

(1) In my view when dealing in a case for contribution with the question of the defendant's liability to fulfil the third party's monetary claim, the fact that payment in the meantime by the plaintiff might release the defendant from that liability should be ignored. These two things - the defendant's liability towards the third party and his discharge therefrom because of the plaintiff's payment - constitute separate elements of the ground for contribution and the question whether one of them exists is not dependent on the answer to the question whether the other element exists. If that were not so, the reason for this remedy is emptied of its content and value. Surely just because the plaintiff's payment releases the defendant from his monetary liability towards the third party, he is rightly required to make contribution in order not to be enriched at the expense of the plaintiff; and how can it be said therefore that the very payment sets at naught the latter's right to contribution. Hence also there is no value in the argument of the frustration of the possible future fulfilment of the two statutory conditions by the second appellant, which were stressed by counsel as preconditions of its said liability.

 

(2) If, in order to decide whether ground exists for the second appellant's liability toward the injured, we must ignore the fact of the said payment, then it is essential that we examine it according to the following test: just prior to the payment or the day when the present claim for contribution was made (I see no need to decide which is determinative between the two), did the appellant anticipate the liability to pay damages to the injured persons for the injury caused to them by the insured? This test should be applied today in the light of the rule in Commercial Union v. Sher (4), that by virtue of section 10 of the 1947 Ordinance an injured party is entitled to claim that its damage be made good directly by the insurer, provided that the insured is joined as a party to the claim (at p. 435); see also Karman v. "HaSneh" (5) at pp. 1914-1915. The meaning of this rule is that in the present case the test must be applied so that, had the injured presented their claims for damages against the two appellants the court would have found the second appellant liable to pay. To my mind it is clear our assumption must be that in this hypothetical case the court would not, in answering the said question, have considered the two above conditions of law. There are two reasons for this which go together.

 

            First, where an injured person sues the insurer and the insured together for damages under the above-mentioned rule there is no practical worth to the question whether or not the two conditions were fulfilled. That is manifest as to the requirement of notice mentioned in section 10(2)(a) of the Ordinance, the object of which is to enable the insurer to defend when the injured person sues the insured alone; where the two are sued together, the insurer knows, through the summons to court, of the claim brought against the insured and can defend itself against it; that is to say, the summons is like the statutory notice which therefore becomes superfluous (see Zaddok v. Schweitzer (7) at p. 140). As for the second condition - the requirement of a judgment, under section 10(1) of the Ordinance - here also it is clear that from a practical point of view the questions which may engage the court - according to the patties' pleadings - in such a case are merely on the one hand the driver's responsibility for the accident and on the other hand the insurer's liability by virtue of the insurance policy; such as, for example, (1) was the accident caused as a result of the driver's negligence; (2) what is the extent of the injury and the amount of the damages to be determined in respect thereof; (3) does an insurance policy exist within the meaning of the Ordinance, which covers the case? As was stated by Judge Harpazi in Greiczer v. "Bohan" (6) at p. 215:

           

"By virtue of the Insurance Ordinance as interpreted, the claims against the insurer and insured are therefore submitted together and once the claim is proven, including the fact that the event is covered by the insurance policy, the plaintiff is entitled to judgment making the insured and the insurer liable in solidum. Under this liability the plaintiff is entitled to execute the judgment directly against the insurer, without taking any action against the insured at all."

 

            Even if we have to say that from the formal, precise point of view, the insured's liability precedes that of the insurer, though they are defendants in one trial, nothing attaches to that because the question to be answered from the point of view of the claim for contribution, is only of a mere practical-legal character: whether in the hypothetical case of the injured person suing the insurer (together with the insured), the insured would expect to be liable for the damages in respect of which contribution is claimed? To this matter I shall return.

           

(3) The second reason for my view in this matter is that the two statutory conditions must be regarded as merely procedural, and therefore not to be taken into account in respect of a claim for contribution. This character of the statutory notice condition is self evident. The same is true of the condition of a judgment against the insured, witness the fact that the principal reason which influenced Olshan P. - and he was one of the two majority judges who gave section 10(1) the interpretation that there must be an issue between the injured and the insurer - is that

 

"The provision of obtaining judgment against the insured is only intended to direct that in order to find the insurer liable, proof in the form of a judgment against the insured is required, and no other proof will suffice" (Commercial Union (4), at p. 435).

 

            If that is the purpose of the said condition, it is merely of a procedural nature, a point which also emerges from Salmond (Jurisprudence, 11th ed. pp. 503,506), that the presentation of evidence - and also the giving of judgment - belongs to the procedural branch of the law. If that is the case, I find that the approach taken by Sussman J. in Apelstein (1) at p. 697, applies equally here: when, in a case for contribution brought under section 64(1)(c) of the Civil Wrongs Ordinance, against a tortfeasor who has not yet been found liable towards the injured party, a question of the liability of the defendant as regards the injured party comes up for consideration, the answer must be sought in substantive and not procedural law. Therefore, he held that the fact that the defendant in that case was the husband of the injured woman would not defeat the claim, since the prohibition provided in section 9 of the Ordinance (regarding evidence by spouses) is of a mere procedural nature and has no effect on the husband's liability under substantive law to compensate the wife for the damage caused to her. It is true that this rule was laid down for the need of interpreting the words "if he were sued" which are mentioned in section 64(1)(c), but it includes, in my opinion, a general test which belongs to the principle of contribution and effectuates it, and is in any event applicable to the present matter. For this reason, it is again necessary to ignore the two statutory conditions, owing to their procedural character.

 

(4) In his separate judgment in Commercial Union v. Sher (4) Berinson J. - who also supported the interpretation that an issue between the tortfeasor and the insurer must exist - relied on reasoning different from that of Olshan P. He said (at p. 431):

 

"I think we have to distinguish between the insurer's liability to pay the injured person and the injured person's right to sue the insurer. Section 10(1) in principle grants to those physically injured by a car ... a right to compensation from the insurer. Because of that, we do not see any substantial difference between the injured person joining such insurer as a party to his original claim against the insured and a defendant joining a third party where he argues that he is entitled to indemnity from the third party. In both instances the liability to compensation does not exist when the joinder is made but only arises if and when a judgment is given in favour of the plaintiff."

 

            From this reasoning appellants' counsel inferred that as long as judgment is not given against the insured - even where the insurer is joined as a defendant - he is under no liability to compensate the injured person and obviously no right to contribution as above arises. In my opinion, the last conclusion rests on an error. The problem which occupied Berinson J. and to which his above reasoning relates was whether at the time action was commenced in that case there was an issue between the injured plaintiff and the insurer. The affirmative answer he gave to this question had regard only to the then legal situation and was based on the fact that at that time the injured had the "right of action" against the insurer even though the "liability to pay" had not yet arisen and depended on judgment afterwards being against the insured. On the other hand, when, in a case for contribution against an insurer who has not yet been made liable to pay compensation to the injured, the question of such liability arises, a different approach must be taken in the sense that the answer to this question will be determined by the result in which the hypothetical case of the injured person against the insurer and the insured would conclude. In other words, the question that must be answered here is whether there fell on the defendant - if the plaintiff did not settle the demand for compensation- the risk and the expectation that he himself would be liable to pay the injured party. It is clear that the approach which is behind this practical - legal test, does not contradict the reasoning of Berinson J. because it lies within the purpose for which the remedy of contribution is aimed at, to avoid unjust enrichment at the expense of the plaintiff, as aforesaid.

 

(5) Having regard to the above "expectation" test, I find also that there is no value in the argument of appellants' counsel, that the conditions for giving the statutory notice and obtaining judgment against the insured have not yet lost their practical importance in a case where an injured person exercises his right to sue the tortfeasor and his insurer for damages in separate actions because in an action against the second the question whether these conditions or either of them was fulfilled might still arise. My answer is that this is not the case before us, and we are therefore entitled, in applying the said test, to take into account the possibility that here the injured persons might have filed one claim for damages against the two appellants; and also to pose to ourselves the question whether, in the light of this assumption, the second appellant would have expected to have liability imposed on it. Secondly, the assumption about splitting the process against the insurer and the insured cannot change my conclusion, because the question that must always be answered in a case for contribution is whether the anticipated result of two such hypothetical actions is that the insurer would be liable for making good the damage: and it has already been emphasised that the answer to this question does not depend on the two said conditions but only on the substantive law.

 

            In my opinion therefore the learned judge was correct in deciding to reject the appellants' application. I must add that having also reached this conclusion for reasons which to me seemed based on pure law, I find it equally desirable from the point of view of the purpose of enabling insurance companies to settle with injured people outside court.

           

            On the basis of the foregoing, the appeal should be dismissed and the appellants made liable to pay the respondent the costs of the appeal in the inclusive amount of IL 500.

           

OLSHAN P.:              I concur.

 

BERINSON J.:           I concur.

 

            Appeal dismissed.

            Judgment given March 15, 1964.

H.C.J 428/86

H.C.J 429/86

H.C.J 431/86

H.C.J 446/86

H.C.J 448/86

H.C.J 463/86

M.A.A 320/86

 

 

Y. BARZILAI, ADV.

v.

1       GOVERNMENT OF ISRAEL

2.       ATTORNEY-GENERAL

3-6. A-D                                                                                                                                                                         H.C.J 428/86

 

1.       Y. SARID, M.K.

2.       D. ZUCKER, SECRETARY-GENERAL OF CITIZENS RIGHTS AND PEACE MOVEMENT

3.       CITIZENS RIGHTS AND PEACE MOVEMENT

4.       S. ALONI, M.K.

5.       R. COHEN, M.K.

v.

1.       MINISTER OF JUSTICE

2.       ATTORNEY GENERAL

3.       INSPECTOR-GENERAL OF POLICE

4.   DEPUTY PRIME MINISTER ANDMINISTER OF FOREIGN AFFAIRS

5-8. A-D.                                                                                                                                                                        H.C.J 429/86

 

1. M. MAROZ, ADV.

2. D. YIFTAH, ADV.

v.

1. MINISTER OF POLICE

2-5.A-D.                                                                                                                                                                         H.C.J 431/86

 

A. ZICHRONI, ADV.

v.

1.       INSPECTOR-GENERAL OF POLICE

2.       ATTORNEY-GENERAL

3.       MINISTER OF JUSTICE

4.       HEAD OF THE GENERAL SECURITY SERVICE (G.S.S.)

5.       ASSISTANT NO. 1 TO HEAD OF G.S.S.

6.       ASSISTANT NO. 2 TO HEAD OF G.S.S.

7.       ASSISTANT NO. 3 TO HEAD OF G.S.S.

8.       DEPUTY PRIME MINISTER AND MINISTER OF FOREIGN AFFAIRS                                                                                                                                                                                                                                                                   H.C.J 446/86

 

1. DR. J.M. EDREY

2. DR. H. BEN-MENAHEM

3. DR. B. BRACHA

4. DR. M. GUR-ARIEH

5. DR. K. MANN

6. DR. A. MAOZ

7. DR. C. PASBERG

8. DR. M. KREMNITZER

9. PROF. D. KRETZMER

10. DR. A. ROZEN-ZVI

11. DR. Y. SHACHAR

12. PROF. M. SCHIFMAN

v.

1. INSPECTOR-GENERAL OF POLICE

2. MINISTER OF POLICE

3. HEAD AND THREE OTHER MEMBERS OF THE G.S.S.

                              H.C.J 448/86

 

 

1. M.A. ABU GAM'A

2. S.H. ABU GAM'A

v.

1. GOVERNMENT OF ISRAEL

2. MINISTER OF POLICE

3. ATTORNEY-GENERAL

                  H.C.J 463/86

 

A. BARAK

v.

1.       Y. SARID

2       .D. ZUCKER, SECRETARY-GENERAL OF CITIZENS RIGHTS AND PEACE MOVEMENT

3.       CITIZENS RIGHTS AND PEACE MOVEMENT

4.       S. ALONI, M.K.

5.       R. COHEN, M.K.

6.       MINISTER OF JUSTICE

7.       ATTORNEY-GENERAL

8.       INSPECTOR-GENERAL OF POLICE

M.A.A 320/86

 

 

In the Supreme Court sitting as the High Court of Justice

[6 August 1986]

Before: Justice Meir Shamgar, President

                                    Justice Miriam Ben-Porat, Deputy-President

Justice Aharon Barak.

 

         

Constitutional and Administrative Law - Pardon of offenders by President of the State - Presidential power to pardon unconvicted suspects - Basic Law: The President of the State. sec. 11(b) - Interpretation of Statutes -Meaning of the expression "to pardon offenders" - A "spacious interpretation" of constitutional provisions - Attorney-General's power to stay criminal proceedings - Presidential power of pardon and the powers of other State authorities relating to criminal justice -Pardon and Amnesty-High Court of Justice - Locus Standi - Amenability of State President to jurisdiction of the courts - Indirect judicial review of Presidential functions - Rule of Law.

 

          The petitions to the court related to the decision of the President of the State to pardon the Head of the General Security Service (G.S.S.) and three of his assistants in respect of all the offences attributed to them connected with the incident known as "bus no. 300". The pardons were granted by the President under sec. 11 (b) of the Basic Law: The President of the State, by which he is empowered "to pardon offenders and to lighten penalties by the reduction or commutation thereof." The principal issue raised in the petitions was whether the President had the power to pardon persons before conviction. The court was also asked to order the competent authorities to investigate the incident referred to.

         

1. In regard to the interpretation of sec. 11(b) of the Basic Law, the court examined the import of the terms "offence" and "offender," and reviewed the legislative background to the enactment of sec. 11(b) above, in particular Article 16 of the Palestine Order in Council of 1922 and sec. 6 of the Transition Law, 1949. The court also considered the influence on the interpretation of sec. 11(b) of the Basic Law of the Anglo - American Practice in regard to pardon, as well as the place of the Presidential power of pardon in Israel in relation to the powers of other State authorities charged with the administration of criminal justice.

 

          Held, per Shamgar P. (Miriam Ben-Porat D.P. concurring):

          Having regard to the legislative purpose in the light of the above considerations, to the need for a "spacious" interpretation in matters of constitutional content, and to the accepted construction of the pardoning power since enacted in its original form, sec. 11(b) was to be interpreted as empowering the State President to pardon offenders both before and after conviction.

         

Per M. Ben-Porat D.P.:

          The grant of a pardon involves a conflict between two very important interests: one - equality before the law, which requires that every offender against the law should answer for his conduct; the other - the safeguarding of a vital public interest. The proper balance between the two is the determining factor and the State President was faced with the same predicament when making his pardoning decision.

          Minority opinion in A. v. The Law Council [2] and the decision in Attorney-General v. Matana [3] followed:

         

          Per Barak J., dissenting:

          Upon a proper interpretation of sec. l l(b) of the Basic Law: The President of the State, the Israel Legislature cannot be presumed to have favoured Presidential intervention in criminal proceedings before these have run their full course. Under the Israel "constitutional scheme" the Presidential power of pardon must not be construed as a paramount power, or as rivaling the powers of other State authorities, such as the police, the prosecution, the courts. It must be construed as a residual or a "reserve" power to be exercised only after the other authorities concerned have exhausted their own powers, i.e. after conviction of the accused. The pardons granted in the present case therefore are void and of no effect.

         

2.       Held by the court (per Shamgar P.):

          (a) The absence of a real personal interest on the part of any of the petitioners, does not justify the immediate dismissal of the petition. The Supreme Court will take a liberal view on this aspect and grant access to petitioners where the question that arises is "of a constitutional character" or of "public interest related directly to the advance of the rule of law". This entails no general recognition of the actio popularis, only a general guideline that enables the court to open its doors in suitable cases of a public-constitutional character.

          (b) In granting the pardons, the State President was acting in a matter "connected with his functions and powers" as provided in sec 13 of the Basic law: The President of the State. Hence he is not amenable to the jurisdiction of the courts in connection therewith, including the Supreme Court's powers of direct review - its authority to demand of the president himself an explanation of his decisions. This immunity relates to the direct challenge of any Presidential act, but there is no obstacle to indirect judicial review of the President's discharge of his functions in proper cases and when the proceedings are directed against some other respondent.

 

Israel cases referred to:

 

[1] H.C. 73/85, "Kach"Faction v. Chairman of the Knesset 39(3) P.D. 141.

[2] H.C. 177/50, A. v. Chairman and Members of the Law Counci15 P.D. 137.

[3] F.H. 13/60, Attorney-General v. Matana 16(1) P.D. 430; S.J., vol. IV, p.112.

[4] H.C. 249/82, Wakhnin v. Military Appeals Tribuna1 37(2) P.D. 393.

[5] Cr. A. 224/85, Alba Pharmacy Ltd. v. State of Israel 39(4) P.D. 798.

[6] H.C. 156/56, Schor v. Attorney-General 11 P.D. 285; 21 P.E. 227.

[7] H.C. 329/81; M.A. 217/82, 376, 670/83, Nof v. Attorney-General 37(4) P.D. 326.

[8] Cr. A. 117/50, Haddad v. Attorney-General 5 P.D. 1413; I P.E. 318.

[9] H.C. 171/69, Filtzer v. Minister of Finance 24(1) P.D. 113.

[10] H.C. 228/84, unpublished.

[11] H.C. 270/85, unpublished.

[12] H.C. 659/85, Bar Yosef (Yoskovitz) v. Minister of Police 40(1) P.D. 785.

[13] H.C. 297/82, Berger v. Minister of the Interior 37(3) P.D. 29.

[14] H.C. 483/77, Barzilai v. Prime Minister of Israel et al. 31(3) P.D. 671.

[15] H.C. 652/81, Y. Sarid M.K. v. Knesset Chairman Savidor 36(2) P.D. 197.

[16] H.C. 40/70, Becker v. Minister of Defence 24(1) P.D. 238.

[17] H.C. 217/80, Segal v. Minister of the Interior 34(4) P.D. 429.

[18] H.C. 1/81, Shiran v. Broadcast Authority 35(3) P.D. 365.

[19] E.A. 23/84, Neiman et al v. Chairman of the Eleventh Knesset Elections Central Committee 39(2) P.D. 225.

[20] H.C. 186/65, Reiner v. Prime Minister of Israel et al. 19(2) P.D. 485.

[21] M.A. 838/84, Livni et al. v. State of Israe1 38(3) P.D. 729.

[22] H.C. 58/68, Shalit v, Minister of the Interior 23(2) P.D. 477; S.J., Spec. Vol. (1962-1969), 35.

[23] H.C. 390/79, Diukat v. Government of Israe134 (1) P.D. 1.

[24] H.C. 561/75, Ashkenazy v. Minister of Defence 30(3) P.D. 309.

[25] Cr.A. 185/59, Matana v. Attorney-General 14 P.D. 970.

[26] H.C. 742/84, Kahana v. Chairman of the Knesset 39(4) P.D. 85

[27] H.C. 94/62, Gold v. Minister of the Interior 16 P.D. 1846; S.J., vol. IV p. 175.

[28] C.A. 165/82, Kibbutz Hatzor v. Rehovot Tax Assessment Officer 39(2) P.D. 70.

[29] C.A. 481/73, Administrator of Estate Late E. Bergman v. Stossel 29(1) P.D. 505.

[30] H.C. 246,260/81, Agudat Derekh Eretz v. Broadcast Authority 35(4) P.D.1.

[31] H.C. 306/81, Flatto Sharon v. Knesset Committee 35(4) P.D. 118.

[32] H.C. 547/84, "Of Ha-emek" Registered Agricultural Cooperative Society v. Ramat Yishai Local Council 40(1) P.D. 113.

[33] H.C. 98/69, Bergman v. Minister ofFinance 23(1) P.D. 693.

[34] M.A. 67/84, Haddad v. Paz 39(1) P.D. 667.

[35] H.C. 507/81, Abu Hatzeira M.K. et al. v. Attorney-General 35(4) P.D. 561.

[36] C.A. 507/79, Raundnaf (Korn) v. Hakim 36(2) P.D. 757.

[37] H.C. 73,87/53, "Kol Haam"Co. Ltd. et al. v. Minister of the Interior 7 P.D. 871; 13 P.E. 422; S.J., vol. I, p. 90.

[38] C.A. 150/50, Kaufman v. Margines 6 P.D. 1005; 5 P.E. 526.

[39] C.A. 214/81, State of Israel v. Pahima 39(4) P.D. 821.

[40] H.C. 732/84, Tzaban v. Minister of Religious Affairs 40(4) P.D. 141.

 

English cases referred to:

 

[41] Reg. v. Boyes (1861) 9 Cox C.C. 32.

[42] R. v. Foster (1984) 2 All E.R. 678 (C.A.).

[43] McKendrick et al. v. Sinclair (1972) S.L.T. 110 (H.L.).

[44] Jennings v. United States (1982) 3 All E.R. 104 (Q.B.).

[45] Church Wardens & C. of Westham v. Fourth City Mutual Building Society (1892) 28 Q.B. 54.

[46] Thomas v. The Queen (1979) 2 All E.R. 142 (P.C.).

[47] Mistry Amar Singh v. Kulubya (1963) 3 All E.R. 499 (P.C.).

[48] Godden v. Hales (1686) 89 E.R. 1050 (K.B.).

 

American cases referred to:

 

[49] Ex parte Grossman (1925) 267 U.S. 87; 45 S.Ct. 332; 69 Law Ed. 527.

[50] M'Culloch v. Maryland (1819) 4 Law Ed. 579; 17 U.S. 316.

[51] Youngstown Sheet and Tube Co. v. Sawyer (1952) 26 A.L.R. 2d. 1378; 343 U.S. 579; 96 Law Ed. 1153.

[52] Ex Parte Garland(1866) 71 U.S. 333.

[53] Burdick v. United States (1915) 236 U.S. 79; 59 Law Ed. 476.

[54] Murphy v. Ford (1975) 390 F. Supp. 1372.

[55] United States v. Wilson (1833) 32 U.S. 149.

[56] Biddle v. Perovich (1927) 274 U.S. 480.

[57] Montgomery v. Cleveland (1923) 32 A.L.R. 1151; 98 So. III.

[58] Schick v. Reed (1974) 419 U.S. 256.

[59] Osborn v. United States Bank (1824) 22 U.S. 738.

[60] New York v. United States (1951) 342 U.S. 882.

[61] Ex Parte Wells (1855) 15 Law Ed. 421; 18 How. 307.

 

          The petitioner in H. C. 428/86 appeared in person; A. Gal- for the petitioners in H.C. 429/86; The petitioners in H.C. 431/86 appeared in person; A. Zichroni and I. Hanin - for the petitioners in H.C. 446/86; M. Soaked - for the petitioners in H.C. 448/86; H Langer- for the petitioners in H.C. 463/86; D. von Wiesel and A. Barak - for the petitioner in M.A. 320/86; Y. Harish, Attorney-General and Y. Ben-Or. Senior Assistant State Attorney and Director of the Criminal Department of the State Attorney's Office - for the respondents; Y. Arnon and D. Weisglas for A-D.

 

SHAMGAR P.

The Matter in Issue

 

1.(a) On 25 June 1986 the State President granted the Head of the General Security Service and three members of that Service a pardon in respect of

all the offences connected with the so-called bus no. 300 incident, and committed from the time of the incident on the night between 12 April and 13 April until the date of this Warrant.

 

The pardon was preceded by certain events which became the subject of debate for a period of several months, both in the Government and among the general public, centering mainly on the proper steps to be taken by the authorities in consequence of the stated offences, which had meanwhile become known collectively as the "bus no. 300 incident".

          The President was apprised of the details of the matter in two conversations with the aforementioned Head of the Service, and the decision to grant the pardon followed formal requests to that end. The pardon was granted before any legal proceedings had been instituted in respect of the matters mentioned in the Warrant of Pardon. On the day the pardon was granted, the President made a public statement in which he explained the reasons for his decision, inter alia as follows:

         

Acting under the power vested in me by law, I have today granted Avraham Shalom, Head of the General Security Service, and three of his assistants, a full pardon in respect of every offence prima facie committed in connection with the "bus number 300 incident". I have so acted with a view to putting a stop to the "devils' dance" raging around the incident and so preventing further grave harm to the General Security Service. In so exercising my power, I have acted upon the recommendation of the Minister of Justice following a cabinet meeting held last night with the participation of the Attorney-General.

   My decision was based on the deep conviction that it was for the good of the public and the State that our security be protected and the General Security Service spared the damage it would suffer from a continuation of the controversy surrounding the incident. This Service is charged with waging the difficult war against terrorism, and the remarkable work of its members saves us tens of casualties every month. Last year alone the Service uncovered some 320 terrorist bands who were responsible for 379 outrages and attempted assaults in all parts of the country. So far this year the Service has exposed the perpetrators of 255 terrorist acts, apprehending among them also those who had committed murder.  I wish to mention another aspect of the war against terrorism, which relates to the security arrangements for the protection of Israel's diplomatic missions and other agencies abroad.  It may be recalled that only recently a murderous assault on an El-Al aircraft was prevented when members of the Service foiled the attempt to smuggle aboard a bomb in a suitcase in London. The public in Israel does not really know what debt we owe to all those anonymous heroes of the General Security Service, and how many lives have been saved thanks to their efforts."

   As President of the State, I feel it my duty to rally to the support of members of the Service; knowing as I do the vitally important and arduous task fulfilled by them, devotedly and in secrecy, daily and hourly. I do so in the hope of preventing moral harm to the intelligence organisation and the security network, and to the war against terror.

   In the special conditions of the State of Israel we cannot allow ourselves any relaxation of effort, nor permit any damage to be caused to the defence establishment and to those loyal men who guard our people.

   The effect of the Attorney-General's unequivocal intimation at the cabinet meeting, that there was no alternative but to open a police investigation into the incident, was to create a situation which requires members of the Service to submit to the investigation without being left any possibility of defending themselves, short of divulging security information of the utmost secrecy. In this situation I saw it as my primary duty to act as I have done in protecting the interests of the public and the security of the State.

         

          (b) Two principal issues have been raised in these petitions. The first concerns the President's power to pardon an offender before his trial and conviction; the second relates to a demand for the holding of an investigation into the events known as the "bus no. 300 incident". Concerning the latter issue, on 15 July 1986 we received the Attorney General's intimation, confirmed by the Inspector General of Police, that the police would investigate the complaints lodged in connection with that incident.

          We accordingly have to deal here with the scope of the presidential power of pardon, and shall refer also to two related matters, namely: the reasons for our decision on 30 June 1986 concerning joinder of the President as a respondent in three of the petitions (H.C. 431/86, H.C. 446/86 and H.C. 463/86); and our ruling on the question of locus standi.

         

2. The President's power of pardon is defined in sec. 11(b) of the Basic Law: The President of the State (1964) (hereinafter "the Basic Law"), thus:

 

The President of the State shall have power to pardon offenders and to lighten penalties by the reduction or commutation thereof.

 

          This legal provision is formulated to deal with two subjects, i.e. the pardoning of offenders and the lightening of penalties. The latter subject is not in issue in the present matter, so what remains to be decided here is whether the power to pardon offenders extends also to someone who has not yet been convicted.

 

The Approach in the Case Law

 

3. (a) For the reasons I shall set out below, it has to be concluded that in the case now before us the State President based the exercise of his power under the above section upon a legal construction in accordance with the accepted approach of this court for the past thirty-five years, which sees the President as empowered to grant a pardon also before conviction. I am not unaware of efforts made over the years by a few distinguished jurists to challenge that interpretative approach. That even they, however, have had to take the view enunciated by this court as the starting point of their analysis, is understandable and clear, for the reason succinctly stated by my learned colleague, Barak J., in "Kach"Faction v. Speaker of the Knesset [1], at p. 152:

 

In a democratic regime, based on the separation of powers, the authority to construe all legislative enactments - from Basic Laws to regulations and orders - is entrusted to the court.... Inherent in every statutory provision, naturally and axiomatically, is a delegation of the interpretative authority to the court. It is true that every state organ - and in the present context also every individual - will seek to interpret the law in order to plan ahead. In the case of certain organs, it is sometimes customary for the interpretative authority to be entrusted to a particular functionary. Thus, for instance, the Executive's interpretative function is entrusted to the Attorney-General, and his construction binds the Executive internally. But where the question of interpretation arises in court, this authority rests with the court and its construction will bind the parties. And where the construction is that of the Supreme Court, it will bind everyone (by virtue of the doctrine of stare decisis - sec. 20(b) of the Basic Law: The Judicature). In this regard Shamgar J. remarked as follows:

   "Every governmental authority must on occasion contend with the interpretation of a legislative enactment, for the application of statutory law frequently (in theory invariably) entails the formulation of an attitude as to its substance and content. But the final and decisive interpretative word respecting the law in force at any given time, rests with the court; and in respect to issues raised for deliberation within the legal system, this last word rests with the supreme judicial tribunal" (H.C. 306/81, at p. 141).

   Any other approach would strike at the very heart of the judicial process and completely undermine the doctrine of the separation of powers, and the checks and balances between them. Hence, relations both between the Judiciary and the Executive and between the Judiciary and the Legislature, are governed by the principle that the binding interpretation is that given by the court, no matter what other interpretations may be given.

         

I might add that the reservations expressed about this court's approach have related, as we shall see presently, to the recognition not only of a pardon before conviction, but also a pardon after serving the punishment and in other cases (see Prof. S.Z. Feller, "Rehabilitation", Mishpatim, 113 [1969], 497, 507). In fact, a complete alternative system of pardon has been prepared, and this proposed legislative revision is deserving of deeper study and deliberation than is possible in the framework of this judgment. (See the proposed Bills in the appendix to Prof. Feller's abovementioned article, which also include a proposed rephrasing of sec. 11(b) of the Basic Law by replacing the words "to pardon offenders" with an expression connoting remission of punishments.) Such further study of the subject would accordingly be important for shaping the desirable law in the future, if indeed it is sought to depart from the existing arrangement.

 

          (b) I shall now review the pronouncements of this court on the subject of pre-conviction pardoning under the prevailing law. The subject was first mentioned in A. v. The Law Council [2]. The petitioner asked for the restoration of his name to the Roll of Advocates following upon a presidential pardon granted him (after having served his sentence of imprisonment) in respect of the offence for which his name had been removed from the Roll. The petition was dismissed by a majority of the Court, for reasons relating both to the powers of the Law Council and to the Supreme Court's modes of exercising its discretion.

          Justice Agranat was the only member of the court to address the question of the pardoning power. The statutory provision underlying the President's power of pardon at that time (sec. 6 of the Transition Law, 1949) was phrased, so far as is relevant here, in language identical to that in sec. 11(b) of the Basic Law. It appears from the judgment of Agranat J. (as he then was) that he saw the power of pardon conferred on the President of the State of Israel as generally parallel to that vested in the King of England or in the President of the United States, whether in underlying perception, in nature and scope, or in the consequences of its exercise. In this connection the learned Judge referred, inter alia, to a statement in Halsbury's Laws (2nd. ed., Hailsham, vol. 6, p. 477) that "Pardon may, in general be granted either before or after conviction." Also referred to was the decision of the U.S. Supreme Court in Ex Parte Grossman (1925) [49], where it was held with regard to the Constitutional power to grant pardons for offences, that the Executive could grant a pardon for an offence at any time after its commission. Summing up his opinion on the scope of the power of pardon in Israel, Agranat J. clearly held that the President has the power to pardon offenders either before or after conviction (at p. 751; my italics - M.S.).

          It is true, of course, that the question of the power of pardon before conviction was not part of the ratio on which Justice Agranat founded his decision in that case. Nevertheless, the wider question of principle involving the substance and scope of the pardoning power, the matter of its historical roots and its present day construction, on which the decision of Agranat J. was founded, encompassed also this specific aspect of the exercise of the power before conviction. This aspect arose directly out of and became an integral part of the interpretative method adopted. That is to say, inherent in Justice Agranat's adoption of the view that the President's pardoning power was the same as that of the British King or the American President, was the conclusion that the definition of that power likewise derived from the interpretative process on which the learned Judge had founded his decision, as he himself in fact noted.

          Justice Agranat's abovementioned opinion has come to be recognized as representing the prevailing and commonly accepted interpretation of this court, whether this be due to the fact that no contrary judicial opinion on the matter has been expressed or whether this be attributed to the Further Hearing in the Matana case, a landmark decision in our constitutional law to which I shall presently return.

 

          (c) This subject arose again in the rehearing in Attorney-General v. Matana [3], representing the leading and most comprehensive decision so far on the power of pardon. Once again the substance of the power was analysed, this time in the court's full consciousness that the decision which had occasioned the rehearing amounted to a rejection of the minority opinion of Agranat J. in A. v. The Law Council, insofar as he had found a parallel between the power of the President of Israel and that of the British Monarch. In his judgment in the Further Hearing, Deputy President Agranat (as he then was) reiterated his view expressed in A. v. The Law Council that the President's power of pardon was exercisable also before conviction. He noted that while there was indeed no room for an equation of the President's power of pardon with that of the High Commissioner of Palestine (under Art.l6 of the Order in Council, 1922), he also had no hesitation in reaffirming his approach in A. v. The Law Council as regards the scope of the President's power and its comparison with that of the Executive under the corresponding Anglo-American constitutional law. The power under sec. 6 of the Transition Law, 1969 (which for our present purpose is the same as that set forth in sec. 11(b) of the Basic Law) was termed by Agranat D.P. an "original" power forming part of a "Constitution in miniature of an independent State." Hence it was not comparable to the pardoning power instituted under the Mandatory legislation, and the model for comparison was the power of the British or the American Head of State.

          In this regard the learned Deputy President added, by way of an interpretative guideline, that in view of its constitutional content the statutory provision concerned did not need a restrictive interpretation ( M'Culloch v. Maryland (1819) [50] at p. 602; Youngstown Sheet & Tube Co. v. Sawyer (1952) [51] at 1399, per Frankfurter J.). From the Youngstown case Agranat D.P. cited the statement of Jackson J. that because the American President enjoyed only those powers mentioned in the constitution it "does not mean that the mentioned ones should be narrowed by a niggardly construction."

          In short, it emerges from the Deputy President's judgment that while the relevant provision did indeed relate to a new and independent legislative enactment, for the proper understanding of its substance it was nevertheless permissible to refer also to the corresponding powers that existed in the countries looked upon as the principal models for comparison, and which had nourished and shaped our own legislation.

          Cohn J. (as he then was) - who together with Silberg J. concurred with Agranat D.P. in forming the majority opinion of the court - wrote a separate opinion stressing certain matters which appear to be particularly relevant in relation to the background of the problem now before the court, inter alia holding as follows (at p. 462):

 

Under sec. 6 of the Transition Law, 1949, the President of the State is empowered to pardon offenders and to reduce punishments. The Presidents of the State have exercised this power from 1949 until the day on which judgment was delivered in Matana v. Attorney-General (23 June 1960), in the manner laid down for them in the judgment of this court (per Agranat J.) in A. v. The Law Council (at p. 745 et seq.). That is to say, both the President of the State and the Minister of Justice, whose countersignature of the President's decision is required by the Law, and also the wide body of citizens who have had need of the President's grace, have always regarded this power of the President as equal and parallel in nature and scope to the power of pardon and reduction of punishments possessed by the Queen of England, and which was possessed by the High Commissioner of Palestine. It has already been said more than once by this court (both during the Mandate and after the establishment of the State) that the court will hesitate very much to reverse a particular practice which has taken root during the years, and if this was said in respect of matters of practice which did not rest upon the authority of judicial precedent, how much more is it applicable to a matter of practice which rests upon a specific decision of the Supreme Court. As for myself, even if I were inclined to agree with the opinion held by my colleagues Berinson J. and Landau J. that the practice followed by the President of the State year after year is based upon too wide an interpretation of sec. 6 of the Transition Law, 1949, even then I would not venture today to change this practice which has received the seal of the Knesset at least by its silence, and more especially since the practice followed by the President of the State adds the "grace" extended by him to its citizens.

   I have no doubt, however, that the said provision in sec. 6 should be given a wide and not a narrow interpretation. But for the principles laid down in A v. The Law Council, which the Deputy President has again adopted in his instructive judgment in this Further Hearing, I would perhaps have gone further and interpreted the said provision even without reference to the powers of the King of England under the common law, which were also given to the High Commissioner of Palestine by virtue of the Order in Council, 1922. For the purposes of the decision in the present case, however, the principles laid down in the judgment referred to are sufficient for me too, and I arrive at the same conclusions as those reached by my colleague, the Deputy President, but without resort to the English and American authorities which he cites in his judgment.

 

          (d) In a dissenting judgment Berinson J. disputed the abovementioned interpretative theses. In essence, however, and notwithstanding the divergence between the minority view (of himself and Landau J.) and the majority view as to the President's power of substituting one sentence for another, even he was expressly of opinion that the President's pardoning power extended also to an act for which the offender had not yet been tried and convicted. In this sense, as Berinson J. expressly pointed out, the President's power was wider than that of the High Commissioner at the time:

 

Moreover the President's power of pardon is in a certain sense wider than that possessed by the High Commissioner. Whereas the High Commissioner was unable to pardon a crime before the offender was tried and convicted unless he turned King's evidence and led to the conviction of his accomplice (the first part of Article 16 of the Order in Council), the President is not bound by this condition and, so it seems to me, may pardon any offender even before he is brought to trial (ibid. p. 469).

 

4. Recently Justice Cohn has had further occasion to express his opinion on the subject ("Symposium on Pardon," hereinafter "Symposium," Mishpatim 15/1 [1984], 14). It was decided law, in his view, that it was never intended by the Israel lawgiver - whether in the Transition Law, 1949,or in the Basic Law - to curtail the scope of the pardoning powers vested in the King of England under the constitutional conventions; it followed that the power to pardon offenders before their conviction availed also in Israel.

 

5. (a) In view of the reference in our decisions to the Anglo-American comparative model, it is fitting that we supplement our above remarks with a brief review of the law of those countries on our present subject. It is consistently asserted in the literature of English constitutional law, that the King is empowered under the common law to grant also a pre-conviction pardon. It is so stated in Blackstone's Commentaries on the Laws of England (San Francisco, 1916; vol. II, p. 400). In Halsbury's Laws (4th ed., vol. VIII, 8, par. 949, p. 606) it is stated:

 

          In general, pardon may be granted either before or after conviction.

         

          S.A. De Smith opines that "a pardon may be granted before conviction" (Constitutional and Administrative Law, 5th ed., Street and Brazier, 1985, p. 150, note 121). He holds that this prerogative power, though not exercised today, has not become abrogated by disuse and, like Sleeping Beauty, "it can be revived in propitious circumstances" (p. 143). In other words, in exceptional circumstances which so justify, the King may conceivably have renewed recourse to this power. A like view is expressed by O. Hood Phillips - "A pardon may generally be granted before or after a conviction" ( Constitutional and Administrative Law, 6th ed., 1978, p. 378). English decisions and treatises on the subject are replete with statements to the same effect and one need not repeat them all here (see Reg. v. Boyes, [41] ).

         

          (b) In the U.S.A. the pre-conviction pardoning power is clearly enunciated in the classical work on the U. S. Constitution prepared by the Research Service and the Library of Congress: The Constitution of the United States of America, Analysis and Interpretation (Washington, 1973), p. 474. In Am. Jur. 59, 2d (Rochester & San Francisco, 1971) par. 25, the presidential power of pre-conviction pardoning is explicitly asserted, and with regard to the separate States it is added:

 

if the constitution does not expressly prohibit the exercise of the power until after conviction, it may be exercised at any time after the commission of an offense before legal proceedings are taken.

 

          That is to say, the customary interpretation is that any State wishing to preclude the grant of a pre-conviction pardon has to make express constitutional provision to that effect, and a power of pardon mentioned without such a reservation means that it may be exercised also before conviction of the offender. See also W.W. Willoughby, The Constitutional Law of the United States (New York, 2nd ed. 1929), vol. III, at p. 1491; B. Schwartz, A Commentary on the Constitution of the United State (New York, 1963), vol. II at p. 87; B. Schwartz, Constitutional Law (N.Y. and London, 2nd ed. 1979) at p. 198; L.H. Tribe, American Constitutional Law (Mineola, 1978) at p. 191.

          In the American precedents the power of pre-conviction pardoning is constantly reiterated. In the celebrated case of Ex Parte Garland (1866) [52], it was held (at p. 380) that the pardoning power

         

….extends to every offence known to the law and may be exercised at any time after its commission either before legal proceedings are taken, or during their pendency or after conviction and judgment.

 

          See also L.B. Boudin, "The Presidential Pardons of James R. Hoffa and Richard M. Nixon: Have the Limitations on the Pardon Power been Exceeded?" Un. Colo. L. Rev. 48 (1976/77), p. 1.

         

6. In Attorney-General v. Matana [3] the majority agreed with Agranat D.P. as regards the substance of the pardoning power. In the wake of this decision came a legislative development which also throws some light on the attitude of the authorities at the time to the abovementioned legal questions. When the Bill for the Basic Law: The President of the State came before the Knesset, it was decided to vary the text of the provision concerning pardon in a manner clearly enunciating the President's power to commute sentences, this being a matter on which divided opinions had been expressed in the Matana rehearing. However, no attempt at all was made to vary the existing statutory arrangement so far as its interpretation in the rehearing was concerned - both by Agranat D.P. who expressed the majority opinion and by Berinson J. - as empowering the President also to grant pre-conviction pardons. The amendments pertaining to the commutation of sentences clearly stemmed from the wish to eliminate possible doubt resulting from the divergent interpretations on this point in the Matana case. Thus, for instance, Dov Joseph, Minister of Justice at the time, had this to say in support of the proposed amendment:

 

   As to the presidential power to pardon offenders dealt with in sec. 6 of the Transition Law, the matter is now regulated in sec. 12 of the proposed new Law. The change in relation to the existing Law is that the new provision expresses the commutation of punishments to be, along with their reduction, a presidential power of pardon. This is no fundamental change, for even under the existing Law, which mentions the reduction of punishments but not their commutation, the latter was held to fall within the purview of the pardoning power vested in the President. However, since the Supreme Court arrived at this conclusion after much toil, with a minority of the Justices holding otherwise, we thought it desirable to clarify in the proposed new provision that such was the lawgiver's intention from the start (Minutes of the Knesset, 36 (1963/4), 964).

 

          Also of interest in this connection are the comments made in the same debate by Prof. Y. H. Klinghoffer:

         

In a decision of the Supreme Court a year ago, it was decided - as already indicated by the Minister of Justice in his opening remarks - that sec. 6 embodied a power of substitution of a lighter punishment for the one imposed, and in particular to commute a sentence of imprisonment to one of conditional imprisonment" ( ibid., p. 966).

 

          A year later (in 1965) Professor Klinghoffer rested on the same foundation his argument that if difficulties were to arise in consequence of the adoption of a certain proposal raised by him for debate, recourse could be had to the pre-conviction pardoning power in order to solve hard personal problems of punishment for which no other solution was available:

         

Another unconvincing argument advanced is that if a suspect be very ill, it would be an act of cruelty to put him on trial. Unconvincing, because in rare cases of this kind the President of the State would be able to grant a pardon before the trial commenced. The President is empowered to pardon offenders either before or after conviction. That was laid down by Justice Agranat in the case of A. v. The Law Council, H.C. 177/50 ( Minutes of the Knesset, 43(1965), 2319):

 

          Statements made in the course of Knesset debates do not, of course, bind the court when construing the law, let alone the fact that here we are seeking mainly to draw an inference from the non-amendment of the existing statutory arrangement on the subject. We do accept, however, that a particular enactment's legislative history may be a valuable aid in its interpretation (Wakhnin v. Military Appeals Tribunal [4] at p. 424), and we may be so guided here too. An inference may properly be drawn from the fact that at the time when the Knesset debated the implications of the decision in A. v. The Law Council, not a single voice was raised in favour of narrowing the President's power in 'respect of pre-conviction pardoning. Legislatively speaking, it has so far not been seen fit to disturb the wording of the pertinent provision nor, indeed, its manner of interpretation - by Justice Agranat in A. v. The Law Council and by  the Justices of the majority as well as the minority opinion in A. G. v. Matana- as empowering the President to pardon offenders also before conviction. The opportune time for having effected an amendment in curtailment of the pardoning power, should anyone have disapproved of its judicial interpretation, was surely at the stage when the Law was amended anyway to clarify operation of the pardoning power in a different respect, as already mentioned. The fact that the power as it stood was left intact in relation to the matter of our present inquiry, is proof that neither the Legislature nor the Executive saw fit to alter the legal situation that emerged from the expansive interpretation given the pardoning power in A.G. v. Matana.

          Incidentally, though at the time there may have been room for debating whether or not the provisions of the Transition Law, 1949, including sec. 6, were endowed with any permanent constitutional standing, there could certainly have been no doubt as to the constitutional content and standing of the Basic Law: The President of the State. Yet sec. 11(b) thereof repeats verbatim the part of sec. 6 of the Transition Law that is pertinent to our present inquiry, and which the court construed as it did in the Law Council and Matana cases.

         

7. The fact that the Knesset did not vary the court's construction of the power "to pardon offenders" as embracing also pre-conviction pardoning, has contributed to a general recognition of the approach in the two precedents cited as the accepted approach on this subject. Prof. A. Rubinstein, for instance, writes as follows ( The Constitutional Law of  Israel, 3rd ed., at p. 394; in Hebrew):

 

(e) Pardoning of offenders before conviction. The Law does not restrict the President's power to pardon offenders, and he may do so even before they have been convicted. English law is the same as regards the prerogative of pardon of the British Crown. The High Commissioner, however, was delegated only a part of the stated royal power and, in terms of Art.16 of the Order in Council, 1922, was able to pardon offenders only upon their conviction. In this respect the President's power is like that of the British Crown. Even Justice Berinson who interpreted the presidential power narrowly in the Matana case, held that "he has power to pardon any offender also before he is brought to trial."

 

          A more restrictive construction of the expression "to pardon offenders" - even if centering more on the meaning of the term "offenders," which point I shall presently discuss in greater detail - was proposed by Prof. Klinghoffer at a symposium on this subject, though with express acknowledgment that his own view differed from the interpretation given by the Supreme Court (see Prof. Y. Klinghoffer, "Pardon's Constitutional Framework," Lectures at the Symposium "Amnesty in Israel", held in Jerusalem on 13-14 May 1968, Publications of the Hebrew University Institute of Criminology, 2, 5; hereinafter "Lectures on Amnesty"). A similar view was expressed by Prof. S.Z. Feller in his abovementioned article, "Rehabilitation" (at p. 507, note 28). Also present at the symposium was the then incumbent Attorney-General, M. Ben-Zeev, who made these observations:

         

   Prof. Klinghoffer's constitutional analysis of the pardoning power is undoubtedly comprehensive and interesting. I feel it necessary, however, to mention one matter on which I disagree with him - if only to ensure that a different opinion also be heard on this important point. Prof. Klinghoffer interpreted the President's power "to pardon offenders" as applying only to convicted offenders and not to unconvicted suspects, a conclusion felt by him to flow from the very expression here used. Since in our law a person is presumed innocent until convicted he cannot be an "offender" until he is convicted; therefore, in Prof. Klinghoffer's opinion, the President has no power to pardon any person before he has been convicted. In this connection I might mention the case of A. v. The Law Council, cited by Prof. Klinghoffer, in which the wording of the relevant provision in the Transition Law was construed - and from which wording there was no departure, in the instant context, in sec. 11(b) of the Basic Law: The President of the State. This identical expression in both the above enactments was interpreted by Justice Agranat, after lengthy analysis in his abovementioned judgment, to mean that the President "has the power to pardon offenders either before or after conviction." This authority accordingly contradicts the approach of Prof. Klinghoffer and I myself, in my capacity as Attorney-General, have relied on this authority in giving my opinion that the President may pardon offenders also before conviction. The term "offender" obviously cannot be understood here to mean someone who has been duly convicted, but rather someone who comes to the President saying: "I have committed an offence and I ask you to pardon me." It is inconceivable that a person should come before the President and say: "I have not in fact committed an offence, but if I have, please grant me a pardon." Such alternative kind of pardon naturally finds no place in our law. But if a person should come and say that he has committed an offence for which he asks to be pardoned, then he is among the offenders whom the President has the power to pardon ( ibid., p. 53).

 

          Another participant in the abovementioned symposium was Dr. Leslie Sebba of the Criminological Institute of the Hebrew University, Jerusalem, who made this comment on the legal situation as portrayed there ("Summary of the Lectures at the Symposium 'Amnesty in Israel' " p.x):

         

Finally, there was some doubt as to the proper interpretation of the phrase "to pardon offenders." Did this include persons not yet convicted? In the opinion of the Government, which based its view on judicial opinion, such persons could be regarded as offenders for the purpose of the pardon, for the request for a pardon could in itself be regarded as an admission of the offence .

 

          This leads us to Dr. Sebba's illuminating work, On Pardon and Amnesty: Juridical and Penological Aspects (Ph.D. dissertation, Faculty of Law of the Hebrew University, Jerusalem, 1975; hereinafter On Pardon and Amnesty), in which the writer examined the scope of the pardoning power in Israel, inter alia making this comment (at pp. 152-153):

         

   Sometimes pardon before conviction or "advance pardon" is treated as an independent form of pardon. This power, which has a legal foundation in both English and American law (but not in France), is generally attributed also to the State President. This view is challenged, however, by Prof. Klinghoffer on the ground that everyone is presumed innocent until duly convicted: "Hence no person is an 'offender' until a final convicting judgment be given against him."

   In our view, the law does indeed enable a pardon to be granted without prior conviction. For certain purposes the Legislature has seen fit to describe an unconvicted suspect as an offender, and the Supreme Court has also held that an unconvicted suspect may be deemed to have a "criminal past" under sec. 2(3) of the Law of Return, 1950 (see H.C. 94/62, Gold v. Min. of Interior, 16 P.D. 1846). Finally, Art. 16 of the Order in Council conferred express power to pardon a person who turned "King's evidence" and whose evidence led to conviction of the principal offender.

         

          The introduction to Article 16 of the Order in Council clearly related to unconvicted suspects who were willing to give evidence for the prosecution. This was envisaged as the main area for application of this provision, which, as in English law for the past centuries, has been the main justification for preserving the power of "advance" or pre-conviction pardon.

         

8. We have so far described the ruling interpretative thesis. Having regard, however, to the arguments advanced during the hearing, it is necessary to examine the reservations and doubts raised as to the President's power to pardon unconvicted offenders under sec. 11(b) of the Basic Law. We shall pursue this examination, and the formulation of our interpretative standpoint regarding sec. 11(b), along three principal lines of inquiry: first, the linguistic import of the statutory provisions under consideration; second, the contention as to abrogation of the disputed power following the enactment of other, new powers; and third, the juridical-constitutional substance of the power.

 

The Language of the Section

 

9. Sec. 11(b) of the Basic Law speaks of the power "to pardon offenders." There is no definition of the term "offender" in either the Basic Law or the Penal Law of 1977. As already mentioned, Prof. Klinghoffer founded his narrow interpretation of the presidential power on the perception that the term "offender" applied only to someone duly tried and convicted (see "Lectures on Amnesty",supra; "Symposium," at p. 5). The like opinion was expressed by H. Zadok, former Minister of Justice (ibid., p. 9) and by Prof. S.Z. Feller (ibid., p. 10; and see also "Rehabilitation," at p. 507). Disagreeing with these views, Justice H. Cohn argued that the existence of a pre-conviction pardoning power was also indicated in the language of the Law. He commented that an enactment aimed at expanding civil rights and benefits called for a spacious and liberal interpretation. For purposes of the President's power, an "offender," in his opinion, was anyone who testified to himself as being such “ Symposium," at p. 14).

          I do not think the term "offender" must be understood as referring only to someone who has been tried and convicted. It is accepted in this court that an expression in a particular Law must be interpreted in the light of its legislative context, as was held by my colleague the Deputy President in Alba Pharmacy Ltd. v. State of Israel [5] at p. 802:

         

Expressions and directives in a Law must be interpreted in the light of the purpose it is intended to achieve. Hence it will sometimes happen that the identical expression appearing in different enactments is differently construed, all in accordance with the inherent purpose and intent of the enactment (C.A. 480/79, Treger v. Customs Collector, at p. 306).

 

          According to its plain meaning, the term "offender" relates to someone who has committed an act defined as an offence, and from the word offence or offender itself one can hardly learn that it has no other legislative application than to someone proved, in final criminal proceedings ending in a conviction, to have committed an offence. Fundamental to our perception of criminal justice is the presumption that a person is innocent until duly proven guilty, but this presumption is an incident of the individual's rights and obligations in confrontation with the judicial process, or with any other authority, or individual. It does not necessarily reflect upon all the possible linguistic nuances of a descriptive term employed in a variety of legislative contexts and conjoined to a variety of eventualities in the penal law and related area. Not infrequently one finds mention in enactments of the term "offence" or "offender," when it is intended to refer simply to a criminal act or omission, or to the person to whom such is attributed, even though not yet convicted in criminal proceedings. And this is so even though the circumspection needed when a person's status may be affected in criminal proceedings, would seem to indicate the use of other expressions such as "a person accused of..." or "charged with..." or "alleged to have committed an offence," or like language. The Penal Law of 1977, for example, makes frequent mention of the term "offence" in a variety of contexts. But when it speaks in sec. 4 of bringing an offender to trial, the reference is clearly to someone charged with, and not already convicted of, the offence. (In like vein see also secs. 7, 8 and 10(d) of the Law.) In this connection Dr. L. Sebba refers ( On Pardon and Amnesty, at p. 153) to the Criminal Procedure (Arrest and Search) Ordinance (New Version), sec. 3(3) of which empowers a police officer to arrest a person without warrant if he "has committed in the police officer's presence, or has recently committed" a certain kind of offence; here too one is clearly dealing with someone suspected of committing the offence rather than someone already convicted thereof.

          It is provided in sec. 3 of the Police Ordinance (New Version) that "the Israel Police shall be employed for the prevention and detection of offences, the apprehension and prosecution of offenders." There undoubtedly cannot be any reference here to already convicted offenders. The definition of the term offender in the Interpretation Ordinance (New Version), stresses the element of the sanction but nowhere mentions a finality of legal proceedings. And so one could without difficulty quote many more examples.

          We might, for the purpose of our linguistic inquiry, also examine other provisions of law on matters which may be said to be in pari materia. In this respect the wording of sec. 6 of the Transition Law, 1949 sheds no additional light on the meaning of the term "offender" in the Basic Law. However, besides the individual pardon provided for in the Basic Law, two other Laws were enacted dealing with the subject of general amnesty. The first was the General Amnesty Ordinance of 1949, which in see 2 provided that a person who prior to a specified date "committed an offence... shall not be arrested, detained or prosecuted for it, or if he is already being prosecuted... the proceedings shall be discontinued and he shall not be punished." Clearly the words "...committed an offence" extended the benefit of the amnesty also to offenders who had not yet been tried and convicted. The wording of sec. 2 spoke for itself, and a statement to the same effect was made by the then Minister of Justice, Mr. Y.S. Shapiro, when introducing the Bill for the Amnesty Law of 1967 before the Knesset:

         

This is the second occasion on which a general amnesty is extended by the State directly through the legislature. The first time the general amnesty was granted by the Provisional Council of State in its final session, prior to the convention of the elected assembly - the First Knesset. In the Law passed at the time by the Provisional Council of State, it was laid down that any person who had committed an offence, other than one entailing sentence of death or life imprisonment, should receive a pardon, whether already tried and convicted or not (Minutes of the Knesset, 49, p. 2484).

 

          In sec. 5 of the Amnesty Law of 1967, the second enactment of its kind, mention was again made of a "discontinuance of proceedings" taken in any court for "any offence committed" before a specified date. Thus the amnesty was once more extended in respect of "offences" for which the offender had not yet been tried or the proceedings concerning which had not yet been completed.

          The manner of use of the term "offence" in a Knesset enactment dealing with a general amnesty has implications for the construction of the same term in an analogous Knesset enactment dealing with individual pardons.

          In sum, it may be learned from a linguistic examination of pertinent statutory provisions, that the terms "offence" and "offender" may, according to the subject matter and context, simply import a criminal act or the person accused or suspected of having committed that act, and not necessarily a conviction, or a convicted offender. By analogy, the same term in sec. 11(b) of the Basic Law was intended to embrace also a person to whom a criminal act, attempt or omission is attributed, and not only someone already convicted of the same.

          By way of comparison it may be noted that the same term mentioned in the constitution of the U.S.A., in the context of "pardons for offences" (art. II, sec. 2, clause 1), has also not been interpreted as applying solely to criminal conduct which is followed by trial and conviction.

         

 Parallel Statutory Powers

 

10. It was a central argument of the petitioners that the power of pardon before conviction was abrogated by the effects of later, as it were, superseding legislation. This argument assumed diverse forms and I propose to deal with its different aspects. Since, for purposes of our present inquiry, it first found expression in a directive of the Attorney-General included in one of the petitions now before us, I shall start therewith.

 

11. (a) In his capacity as Attorney-General, Prof. Y. Zamir published a directive (no. 21.333) concerning the President's power to pardon offenders before completion of the trial. The learned writer first referred to the opinion of Justice Agranat in the case of A. v. The Law Council, contending that the equation there of the power of the High Commissioner with that of the British Crown was erroneous, as the former was not competent to pardon any person before his conviction. It followed that if the High Commissioner was not so empowered, no power of that nature could possibly have been conferred under sec. 6 of the Transition Law of 1949, when it was enacted.

          The above conclusion as to an equality of pardoning power displayed indeed a certain inaccuracy, for the power delegated to a colonial Governor or to the High Commissioner of a Mandated Territory did not coincide with the prerogative power of the King. But this point was clarified in the Matana case and, I might add, the Attorney-General himself fell victim to an inaccuracy when writing that the High Commissioner had no power to pardon unconvicted offenders. For it was expressly provided in the first part of art. 16 of the Order in Council that the High Commissioner might pardon "any accomplice in such crime or offence who shall give such information and evidence as shall lead to the conviction of the principal offender." This empowerment therefore did not relate specifically to already convicted persons, and further proof is to be found in the continuation of art. 16, where express reference is made to convicted offenders in quite a different context.

         

          (b) The stated directive was further predicated on the premise that the abovementioned statements of Justices Agranat and Berinson (on the instant issue) did not amount to binding precedent. I do not accept this reasoning, since it overlooks the connection between the court's overall decision, as already described above, and the specific conclusion concerning the power of pre-conviction pardoning. The existence of this nexus has not only been acknowledged in extra-judicial commentaries, but was also expressly mentioned by Justices Agranat and Berinson in their respective judgments in the Matana case, both clearly having regarded the power of pardon before conviction as flowing integrally from their underlying legal perception of the wider issue before them. The fact that the learned Justices saw fit to recognise the possibility of pre-conviction pardoning, is evidence that such recognition was a natural corollary of a viewpoint shared by the Judges of the majority as well as the minority opinion in the Matana rehearing. Moreover, the fact that the question of a pardon before conviction was directly addressed in the abovementioned decisions, even though the question was not directly in issue on the facts in either of the two cases concerned, is further evidence of a clear and patent connection seen between the essential pardoning power - as interpreted by the court - and the possibility of a pardon granted before conviction. What I am saying is that one has to examine the judgments of the majority opinion in the Matana rehearing according to their essential legal rationale, rather than merely answer the question whether the judgments dealt directly with the power to pardon before conviction. The ratio of the majority opinion in the Matana rehearing is to be found in the conclusion that the presidential power, although original and autonomous by virtue of an Israel enactment, was nevertheless shaped by and for its legislative purpose according to the Anglo-American model. At the same time the court added its conclusion that the Presidential pardoning power in Israel was equal in scope to that of the King of England, or of the President of the U.S.A. The details of the power, also in the pre-conviction contingency, were but a derivative legal consequence. It was the constitutional analogy with the corresponding Executive powers in the above two countries - whose legal systems, far more than others, have inspired and nourished our own legal and constitutional notions and doctrines - that gave birth to the conclusion that is now the subject of our deliberation.

          A like opinion was expressed by Prof. C. Klein ("Symposium," at p. 17):

         

The source of the pardoning power is the royal prerogative. There is a clear connection between the method of pardon in Israel and the corresponding English method, from which one can learn about the scope of the presidential power of pardon in Israel (a divergence of opinion on this matter is echoed in the Matana case).

 

          The power of pardon is not everywhere the same and, as we shall presently see, a variety of methods are followed in other countries. At the time, however, it was not the constitutions of such other countries that served as the models for shaping our own powers of pardon, so that no conclusion whatever can be drawn from any comparison with them, and their situation cannot now reflect on our own, except as an exercise in the desirable.

          It would also be wrong to conclude from the analysis of principles in the abovementioned precedents that we are, as it were, held captive by our legal heritage and that we lack the vigour to fashion our own constitutional doctrines. Not so! Our essential constitutional form has throughout been autonomously our own, and remains so today. What is at stake is a historical-interpretative question that is concerned with the legal perspectives adopted at the time, with the constitutional result distilled from and founded on the same, and with the tenor of our precedents - representing, for some considerable time now, the accepted legal interpretation.

          Of course, there always remains the possibility that the Legislature may be disposed to replace the existing order with a new arrangement considered more suited to our time. Interesting proposals to this effect have been made, some of them ranging in substance far beyond the limited question of our immediate inquiry. Only in an appropriate manner, however, should we abandon a chosen path of the Knesset and the legislative purpose enshrined in the relevant provisions of the Transition Law and the Basic Law, especially when the powers conferred thereunder are of known scope after lengthy judicial analysis and circumscription. We should take care that any material change contemplated be not impelled by passing events, however stormy their nature, but result from orderly constitutional research and discussion. Any change resolved upon should be effected in a manner showing proper deference to a constitutional norm followed for a comparatively long time, that is to say, it should be done by way of legislative enactment.

 

12. In his directive the Attorney-General founded his conclusions as to the scope of the presidential pardoning power largely upon its comparison with his own power to issue a nolle prosequi:

 

A wider use of the power to order a stay of criminal proceedings has always been made in Israel, and in recent years thousands of requests for such a stay have been lodged annually with the Attorney-General. In practice, therefore, the power to pardon accused persons before completion of their trial needs less to be exercised in Israel than in England....

   A presidential power to intervene in criminal proceedings pending before the court, in a manner permitting termination of such proceedings at any time, is undesirable in principle. The pardoning power of the President bears no comparison with the Attorney-General's power to intervene in criminal proceedings by way of staying the same. The Attorney-General functions from the start as an integral factor in criminal proceedings, for he is empowered by law to prefer the charge on behalf of the State.... The President, on the other hand, is an extraneous factor in criminal proceedings. In this situation, his grant of a pardon in the course of a trial might be seen as an unwarranted intrusion into the domain of the court....

   Any interpretation that would empower the President to pardon also unconvicted suspects, suffers in addition the practical disadvantage of a concurrence between this power and the power of the Attorney-General to stay the proceedings against such suspects.

         

          In this connection it was contended that even in England the prerogative of pardon before conviction was no longer exercised. Accordingly, it was concluded in the directive that the President was competent to pardon only convicted persons, for the reason that his power to pardon unconvicted suspects had been replaced by the Attorney-General's power to order a stay of criminal proceedings.

         

13. The above argument is complex and involves, as we shall see presently, not only the matter of a nolle prosequi and its effects, but also other legal processes and their ramifications, including problems of interpretation. The full import of the argument is that a whole array of new penal laws enacted over the years have served to abrogate the power of pardon before conviction. It is true that the argument was not presented to us in precisely this form, but this was clearly its substance. It would be helpful, therefore, for us to dissect the argument into its component parts and different legal aspects, and to examine each in turn, namely:

          (a) First, what is the nature of the order staying a criminal prosecution, and what are the points of similarity and difference between this step and the power of pardon before conviction?

          (b) Second, what ground is there for the contention that the power of pardon before conviction is no longer existent in Anglo-American law?

          (c) Third, what other relevant statutory provisions exist on the issue before us, even if not mentioned in the Attorney-General's directive, or in the arguments addressed to us?

          (d) Fourth, can a constitutional directive deriving from statute or from the common law (where it exists) be considered to have been implicitly repealed or abrogated by later legislation dealing with the same subject?

          (e) Fifth, does the emergence, in practice, of a pragmatic legal substitute for an existing constitutional arrangement, implicitly repeal the latter, and is there any difference for this purpose between a constitutional or legal arrangement deriving from express statutory provision, and one which is solely the creation of judicial interpretation?

         

14. (a) As regards the issue of a nolle prosequi, it is provided in sec. 231 of the Criminal Procedure Law (Consolidated Version) of 1982, that the Attorney-General may stay the proceedings by reasoned notice to the court at any time after lodging of the information and before judgment; upon such notice the court shall discontinue the proceedings in that trial. The Attorney-General may also delegate to his deputy - either generally or in respect of a particular matter or classes of matters - his power to stay any criminal prosecution except in cases of felony. In a recent Bill for the amendment of the above Law (no. 1703, p. 34) it is further envisaged that the Attorney-General may delegate this power - in charges other than felonies, preferred by a prosecutor who is not an attorney of the State Attorney's Department (e.g. a police prosecutor) - also to the State Attorney or his deputy, to the District Attorney, or to any other attorney of the State Attorney's Department given the power of a District Attorney under see. 242 of the above Law. In the explanatory notes to that Bill, it was stated that the Attorney-General and his deputies were experiencing difficulty in handling the greatly increased number of requests made for a stay, and hence the proposed widening of this delegatory power.

          This proliferation of requests is apparently attributable, inter alia, to the proportion of such requests acceded to, and it is clear from the cited passage in the Attorney-General's directive, that thousands of requests are made annually in what seems latterly to have become a regular and widespread practice. I see no need to express any detailed opinion on the question (which is not in issue here) of the proper use of the power to stay a prosecution, and but for it having become interwoven with the argument now before the court, would have preferred not to deal with it at all. I shall merely state my lack of conviction that the wide use of the staying power, as described in the directive, is in accord with the lawgiver's underlying intentions and the character of the staying procedure. Any misgivings one might have with regard to the implications of a pre-trial exercise of the pardoning power, must also to a large extent accompany this phenomenon of a stay of criminal proceedings before the trial has run its course. We appear to be dealing here, not with the rare and exceptional exercise of a given power, but with a rapidly widening process which entails no public deliberation, no participation of any other authority, and which, by its very nature, allows little opportunity for judicial or any other kind of scrutiny (cf. K.C. Davis, Discretionary Justice, Baton Rouge, 1969, pp. 211-212). And, as already indicated, there are proposals afoot for a further, vertical, diffusion of this power.

 

          (b) Sec. 232 of the same Law provides that, following a stay of proceedings under sec. 231, the Attorney-General may upon written notice to the court renew the proceedings, provided no more than a specified period has elapsed from the time of the stay. Upon such notice, the court renews the proceedings and may commence them again from the start or continue from the stage of their discontinuance. Upon a second stay of the same proceedings, they may not again be revived. This means that the first stay does not finally close the matter, for it does not preclude the revival of the proceedings within a specified period, and only thereafter is finality reached.

         

          (c) The power to order a stay of proceedings is not to be seen as an institution of later legislative vintage than the pardoning power. The Attorney-General's power of stay did not first come into being in the Criminal Procedure Law of 1965, but existed before that under the Mandatory Art.16 of the Order in Council 1922. It continued to exist after the establishment of the State when the pardoning power was later re-enacted, first under sec. 6 of the Transition Law of 1949, and then under sec. 11(b) of the Basic Law of 1964 (see sec. 59 of the Criminal Procedure [Trial upon Information] Ordinance of 1924, and sec. 18 of the Magistrates Courts' Jurisdiction Ordinance of 1939). It follows that the theoretical parallel between the power to pardon and the power to order a stay of proceedings was there from the start - i.e. from the very inception of the pardoning power in its new constitutional guise after the establishment of the State - and that the power to stay a prosecution indeed antedated the Knesset's enactments on the power to pardon offenders.

          This fact alone should suffice to controvert the proposition that the presidential power of pardon was abrogated or curtailed by a later conferment of power on the Attorney-General to order a stay of criminal proceedings. The latter power coexisted with Art. 16 of the Order in Council 1922, and was still operative when the power to pardon offenders was widened in the Transition Law of 1949 and in sec. 11(b) of the Basic Law. And the construction of the power conferred under these enactments, in Matana and in A. v. The Law Council, did not precede, but followed the creation of the Attorney-General's power of stay.

         

          (d) On the relationship between the two powers, Justice Cohn, for instance, has said:

         

There is no similarity or parallel between the stated presidential power and the power of the Attorney-General to order a stay of proceedings: the one is a prerogative power, the other purely administrative; the one is subject to revocation and change at the Attorney-General's wish, the other is an act of much solemnity and by its very nature of rare and exceptional exercise ("Symposium," at p. 15).

 

          I myself am not inclined to view the Attorney-General's power as being administrative. It relates to a criminal procedure involving the exercise of a quasi-judicial discretion (see Schor v. Attorney-General [6]; Nof v. Attorney-General [7]). The purpose of the staying function was to reserve for the chief prosecution authority the power to halt criminal proceedings, without this entailing the consequences set forth in sec. 93 of the consolidated version of the Criminal Procedure Law (withdrawal of the charge), but retaining the possibility of resuming the proceedings within a given period. However, I do recognize differences between this power and the power of pardon, which I shall summarise presently.

         

          (e) There can be no full parallel between the power of stay and the power of pardon, since the former comes into play only after the suspect has been charged (sec. 231 of the Criminal Procedure Law [Consol. Version]). An immunity from prosecution promised a state witness who has not yet been charged, cannot be founded on the power of stay under see. 231, but only upon an Executive commitment or, if deemed fit, a pardon.

         

          (f) To sum up, the points of difference between the two powers are the following:

          (1) A stay of proceedings is inconclusive until expiry of the statutory prescribed period. A full and unconditional pardon, on the other hand, cannot be withdrawn (see Killinger, Kerper and Cromwell, Probation and Parole in the Criminal Justice System, St. Paul, 1976, p. 318).

          (2) A stay of proceedings under sec. 231 is possible only after the suspect has been charged.

          (3) A pardon (according to the decision in Matana ) acts to remove the stain of guilt utterly (in contrast, for example, to the prevailing approach in Britain, as expressed in R. v. Foster [42] and holding the pardon to wipe out only the consequences of the conviction; and see, in the U.S.A., Ex Parte Garland [52], and cf. Burdock vs. U.S. [53]; see also Killinger, Kerper and Cromwell, Probation and Parole, p. 322). A stay of proceedings is merely a trial procedure which, under the Criminal Procedure Law (Consolidated Version) of 1982, calls a halt on further activities from the time the stay is ordered, without any retroactive effect.

          (4) As a trial procedure acting to halt the proceedings, the stay of a criminal prosecution is not unique, as appears from sec. 93 of the abovementioned Law concerning withdrawal of a charge by the prosecutor.

          (5) It is necessary for the Attorney-General to give his reasons for issuing a stay of proceedings, whereas no reasons need be given for the issue of an instrument of pardon.

         

15. The comparison made with English law and the contended disuse of the pre-conviction pardoning power, as advanced in the Attorney-General's above directive no. 21.333, seems to show a confusion between the continued existence of a power and the frequency of its exercise. The fact of an abrogation of the royal prerogative to grant a pardon at any time after commission of the offence, is nowhere postulated in English legal writings. One view, stated for example by Hood Phillips (Constitutional and Administrative Law, p. 378) and by R.F.V. Heuston ( Essays in Constitutional Law, 2nd ed., London,l964, at p. 69), takes the form of a mere recital of the power as existing and valid, without any comment or reservation. Another view, advocated by De Smith, holds the prerogative power to be valid but slumbering, and capable of reawakening in special circumstances of need (Constitutional and Administrative.Law, at p. 150, n. 121):

 

It would seem that a pardon may be granted before conviction; but this power is not exercised.

 

Also (at 143):

 

In a Scottish appeal to the House of Lords ( McKendrick v. Sinclair [43] at pp. 116, 117 - M.S.), Lord Simon of Glaisdale said that "a rule of the English common law, once clearly established, does not become extinct merely by disuse"; it may "go into a cataleptic trance", but, like Sleeping Beauty, it can be revived "in propitious circumstances."

 

          It is noteworthy that under the heading "Pardon" it is provided in sec. 9 of the English Criminal Law Act of 1967, that "nothing in this Act shall affect her Majesty's royal prerogative of mercy." As formulated, the section makes no distinction between classes of free pardon. It is at all events clear that the exercise of this prerogative power has greatly diminished in England. Already in 1926 Sir Edward Troup wrote ( The Home Office, 2nd. ed., 1926, p. 57) that the prerogative was not exercised before conviction except in rare cases where the pardon would enable an important witness to testify without incriminating himself in respect of a minor offence. There is reason to believe that since then the power has come to be even less frequently exercised. But, as I have already said, the existence of the power and the measure of its use are two separate matters.

          The question of the continued existence of the prerogative power of pardon, alongside and notwithstanding the power to order a stay of proceedings, is discussed in an article written by A.T.H. Smith in which he states this conclusion ("The Prerogative of Mercy, the Power of Pardon and Criminal Justice," Pub. L. [Autumn 1983], 416-417):

 

   Whether or not the power continues to exist is a matter of some conjecture, but the better view would seem to be that it does. It has certainly not been abrogated by statute, and although it is true that prerogative powers can be lost or modified merely by disuse, as in the case of the royal power to sit as a judge, the criteria for deciding whether or not a power has become "obsolete" are far from clear. As a general principle, the rules of the common law (of which the prerogative is undoubtedly part) do not lapse through desuetude or obsolescence. Even though the power does not at present seem to serve any identifiable constitutional purpose, the prerogative has proved itself to be a remarkably enduring power, and one that can reappear at unexpected moments, and until the advance pardon is expressly abrogated by statute, the possibility that its use will revive at some future time cannot be discounted.

 

          In other words, the accepted view is that the prerogative power, which in England emanates from the common law and not from statute as does the power of pardon in Israel, has not been abrogated by disuse but continues to exist; moreover, neither in theory nor in practice is there anything to prevent its renewed use in special circumstances, and only an express statutory directive can extinguish its efficacy.

          As for the situation in the U.S.A., it will be recalled that the presidential power of pardon was exercised on two recent, well-known occasions. On the first occasion it was exercised in favour of President Nixon (39 Fed. Reg. 32601-02 [1974]). (In this connection see Murphy v. Ford [54] in which the grounds for exercise of the power were discussed; see also Mark P. Zimmett, "The Law of Pardon," Annual Survey of American Law, 1974/5.) On the second occasion, in 1977, the power was exercised by President Carter in favour of evaders of conscription in the Vietnam War, i.e. a form of pardon for a class of persons and a class of offences, bearing the character of a partial "general" amnesty. The pardon was formulated to extend, inter alia, to "all persons who may have committed any offence between August 4, 1964 and March 28, 1973 in violation of the Military Selective Service Act or any rule or regulation promulgated thereunder" (42 Fed. Reg. 4391 [1977]). Bernard Schwarz writes of this pardon of 1977, "the legality [of which] was never questioned" (Constitutional Law, at p. 198). (On this pardon, see also G.S. Buchanan, "The Nature of a Pardon under the U.S. Constitution," Ohio St. L. J. 39 [1978], 36, 61, where the writer comes to the same conclusion.)

          The English system, so far as it is of comparative significance, seems accordingly to invite a conclusion that is the opposite of the one we have been asked to draw. If in England a power stemming from the common law has not lapsed or become obsolete notwithstanding the lack of its use, how much less so in our own case involving a statutory power construed by the Supreme Court (in 1960, in the Matana rehearing) as a valid and existing power in the opinion of all.

          As in England, so with us, the situation is one of a practical non-exercise of the debated power (see e.g. par. 5a of the Attorney-General's directive no. 62.100), rather than its explicit repeal. That is to say, the power itself has been reserved for use in exceptional cases, and its use knowingly restricted. The legal situation in the U.S.A. reflects a similar sparing use of the power of pardon before conviction, but its validity is clearly accepted there.

 

16. Our next assignment is to trace such other legal directives as may have a bearing on the aspect of pardon with which we are now concerned. In this regard Prof. Klinghoffer observed ("Lectures on Amnesty," at p. 7):

 

Showing mercy is not a monopolistic power of the State President. Other authorities too are competent to extend grace and clemency - as does the Attorney-General when issuing a nolle prosequi, or the Minister of Police when authorizing the early release of prisoners, with or without the recommendation of the competent board. The Military Justice Law likewise provides for the functioning of a penalty review board, with power to mitigate or substitute punishments, without derogation from the Presidential power of pardon. Already at the beginning of the lecture it was hinted that the contemporary trend is to permit the courts an increasing measure of mercy along with the doing of justice. Other matters affecting pardon and having constitutional implications, come into play when the quest for a pardon is pursued along the lines of a retrial.

 

          As already indicated, the statutory creation of an alternative legal framework for some of the processes for which the pardoning power is now used - in its various forms, mainly after conviction but also before - was proposed by Prof. Feller in his abovementioned article, "Rehabilitation." His proposal included a draft Rehabilitation Law, a supplemented and expanded rehearing facility, and an express narrowing of the provisions of sec. 11(b) of the Basic Law so as to encompass only respite or remission of punishments not yet served (as distinct from a pardon in respect of the conviction). Prof. Feller proposed a synthesis between new legislation and amendments to existing enactments, aimed at supplementing the existing arrangements on matters such as a stay of proceedings, review of punishment, mitigation of punishment and retrial.

          Some years ago the trend embodied in the above proposals gained momentum with the enactment of the Crime Register and Rehabilitation of Offenders Law of 1981, which provides, inter alia, for the automatic deletion from the register in certain cases of a person's previous convictions, for restricting the availability of information concerning the same, and like directives. In other words, we witness here the completion of part of the legislative program designed to establish new legal machinery that will give expression to and aid in the practical attainment of an equality of rehabilitative opportunity and rights.

          In sum, we see in existence today a number of statutory provisions to reach many of the same results as are attained through exercise of the power of pardon. Some of these provisions precede the Knesset's enactment of the existing power of pardon and its judicial construction, for instance those concerning the prosecution's discretion as to charging a suspect, or the power to stay criminal proceedings. Other such provisions have sprung up contemporaneously and in coexistence with the statutory directives concerning pardon, such as the provisions relating to retrial and review of punishment, while more recently provision was made, as already mentioned, for expunging a person's criminal record. Thus some of the new provisions apply in the pre-conviction stage of the trial, while others - and these form the bulk - are applicable in the post-conviction stage, i.e. the stage where most of the decisions affecting exercise of the pardoning power are in practice made today.

 

17. We must now give attention to the fourth of our questions posed above, namely, the nature of the reciprocal tie between existing legislation and new legislation on the same subject or, more specifically: does the emergence of a new statutory arrangement alongside and overlapping an existing provision entail any abrogation of the latter?

          The prevailing Anglo-American interpretative approach is to start on the premise that the lawgiver intends no tacit repeal of earlier enactments, particularly not when the enactments are all of modern date (see F.A.R. Bennion, Statutory Interpretation j London, 1984, p. 433, with reference to the decision in Jennings v. United States [44]; the same view is taken by R. Cross, Statutory Interpretation, London, 1976, 3). Incidentally, according to Cross. English law also does not recognize the possibility of abrogation of a law through desuetude, so that a statute will not cease to be valid merely on account of obsolescence. Generally speaking, express legislative direction is required for such invalidation.

          It is interesting that a similar approach was advocated by Prof. Klinghoffer, speaking at the time in a Knesset debate (Minutes of the Knesset, 43 (1965), 2319):

         

It is not the function of the prosecution to determine whether certain provisions of the penal enactments have become a dead letter. As long as they remain inscribed in the statute book they must be observed, and if their further observance be undesirable, it is up to the lawgiver - and not the prosecution - to repeal them.

 

          English law does not regard the mere concurrent existence of earlier and later legislative enactments on the same subject as warranting the inference of an implied repeal. This consequence flows only from contradiction between two enactments (see E.A. Driedger, Construction of Statutes, 2nd ed., Toronto, 1983, p. 226; also W.F. Craies, On Statute Law, 7th ed., London, 1911, p. 366). Cross succinctly states the situation thus ( Statutory Interpretation, p. 13):

         

The test of whether there has been a repeal by implication by subsequent legislation is this: are the provisions of a later Act so inconsistent with, or repugnant to, the provisions of an earlier Act that the two cannot stand together.

 

          In support the writer quotes the decision in Westham Church Wardens v. Fourth City Mutual Building Society (1892) [45], adding, "The fact that two provisions overlap is therefore not enough."

         

18. (a) The question of a repeal by implication was deliberated by this court in Haddad v. Attorney-General [8], which involved the relationship between different penal enactments prescribini different measures of punishment for one and the same offence. In a majority decision it was held, inter alia, as follows (at p. 1421):

 

If the contradictions and inconsistencies between the two Laws cannot be aligned and reconciled with each other, the conclusion cannot be avoided that the earlier enactment has been implicitly repealed by the new one. In keeping with that rule, it has been laid down that even though the new Law deals with an offence that is also dealt with in the earlier Law, both Laws may continue to exist together if the new Law is found to have a different purpose and for that reason prescribes a substantially different penalty for the offence concerned; in such event, the offender may be charged under either Law. If, however, the penalty varies in degree only, that is to say, the one enactment prescribes a heavier or a lighter penalty than does the other, the earlier enactment will be deemed repealed by the subsequent one (see Maxwell, pp. 193-194; also Henderson v. Sherborne [1837].

 

          Reliance upon the interpretative rule concerning repeal by implication, was founded in the above case on the doctrine that an accused person is entitled to be held to account under the less stringent of two penal directives applicable to him. Therefore, the directive of earlier date, which differs from the later one only in the heavier punishment it prescribes for the same criminal act, will be deemed repealed by implication. This interpretative rule operates only in respect of punitive criminal directives which are laid down in two separate enactments, each dealing with the identical act, omission or attempt. In other words, the contradiction finds expression, in the situation described above, in the different measure of punishment prescribed. That situation has little bearing on the problem now before us, and certainly the above rule of interpretation has no application to the situation described in the Attorney-General's directive, namely, a concurrence of the power of staying criminal proceedings and that of pardoning offenders. There is neither a contradiction nor an identity between the two.

         

          (b) The question of the rule to apply when the same power is extended in two overlapping Laws arose directly before this court in Filtzer v. Minister of Finance [9]. The issue was the effect on certain powers conferred under the Land (Acquisition for Public Purposes) Ordinance of 1943, of other powers to achieve the same objective conferred subsequently under the Rehabilitation Zones (Reconstruction and Evacuation) Law of 1965.

    For our present purpose, the above case is directly in point, since there too it was contended that the existence of parallel powers of different legislative vintage (in our own case the presidential pardoning power and the Attorney-General's power of stay) implied an abrogation of the earlier power. More specifically, it was argued in Filtzer that the Finance Minister's power of land expropriation under the Land Ordinance had been abrogated by the subsequent conferment of a parallel power on the rehabilitation authority constituted underthe later statute. Landau J. (as he then was) rejected the contention as to an invalidation of the power under the Ordinance of 1943, holding that even if the same purpose could be achieved under two different Laws, that did not preclude application of the earlier Law, though its provisions were less favourable to the citizen than those of the later Law. He noted that the two enactments were of equal status, and the Law of 1965 did not serve to deprive the Minister of his powers under the Ordinance of 1943, merely because the rehabilitation authority could achieve the same objective under the Law of 1965. Yet this conclusion had been said by the petitioners to be self-evident, in reply to which the learned Justice said (at pp. 119, 120):

 

The gist of the petitioner's argument is that the Law had effected a pro tanto repeal by implication of the earlier Ordinance in respect of all the eventualities covered in the Law of later date. Were it not for such an implicit repeal, it would anyhow be impossible to attribute to the Minister of Finance an abuse of his power under the Ordinance, when the exercise of such power is competent under the Ordinance as it stands. In H.C. 5/48 there arose a similar question in relation to the application of regulation 48 of the Defence Regulations of 1939. It was argued that this regulation had been implicitly repealed by regulation 114 of the Defence (Emergency) Regulations of 1945. This argument was rejected, the learned President (Smoira), quoting the following passage from Maxwell:

Repeal by implication is not favoured. A sufficient Act ought not to be held repealed by implication without some strong reason. It is a reasonable presumption that the Legislator did not intend to keep really contradictory enactments on the Statute book, or, on the other hand, to effect so important a measure as the repeal of a law without expressing an intention to do so. Such an interpretation, therefore, is not to be adopted unless it be inevitable. Any reasonable construction which offers an escape from it is more likely to be in consonance with the real intention.

The reason for such extra caution in declaring a statute implicitly repealed, is clear: to act otherwise is to introduce an undesirable element of uncertainty into the interpretation of laws which derive their validity directly from the will of the Legislature.

 

          Landau J. referred also to the Haddad case [8], mentioning that ground for holding an earlier enactment to be implicitly repealed by later overlapping legislation, existed in the area of penal statutes, with specific reference to differences in the mode of trial or the punishment prescribed in the later legislation. Landau J. then quoted this passage from the judgment of Smoira P. in the above criminal appeal (at p. 1426):

         

Great importance attaches, in my opinion, to the principle of such an implied repeal specifically in the area of the penal law. One finds the theory as to a possible coexistence between two penal Laws dealing with the same offence, to be accompanied by the routine statement that the public prosecution may choose as it sees fit to prosecute either under the more stringent or the more lenient law. However, this statement has no foundation other than its   routine recital, and in my view violates the fundamental penal law rule: nulla poena sine lege. A plurality of penal statutes from among which the public prosecution has a right of selection, is tantamount to a situation of having no defined and certain law.

 

          The abovementioned statements are particularly instructive in the context of our present inquiry, as they show the court frowning in that case on the development of a situation in which the citizen who has committed an offence is dependent upon the prosecution's discretionary choice of the penal provision under which he be charged, whether the more onerous or the more lenient provision. "The penal law can affect the citizen' s freedom and reputation" Landau J. pointed out, adding that there was no like reservation with regard to other legislation in the public field.

          These views expressed by Smoira P. and Landau J. have a bearing on the contention that the Attorney-General's power of stay operates as an implied pro tanto repeal or curtailment of the presidential pardoning power. At stake is the repeal or abrogation of a recognized constitutional power, the power of pardon of such scope and substance in our law as fundamentally perceived and construed in the decisions of our courts. Any interpretation that seeks to narrow the hitherto understood scope of this power, would normally require to be unequivocally established, for, as already indicated, the tendency is to give constitutional powers a wide interpretation. It is all the more difficult, therefore, to adopt the perspective that a power entrusted to the prosecution, at the exercise of its sole discretion, should oust a constitutionally endowed presidential power. It would seem difficult enough to accept the proposition advanced even if we were talking about a power of the prosecution that was new, rather than one already in existence when the pardoning power was enacted. I must reiterate what I have already stressed, that the question here is the existence of the power and not the manner of its exercise.

          Our inquiry accordingly leads to the conclusion that the rule as to an implied repeal of a statutory provision by later overlapping legislation, is not applicable in the matter now before us. This is so not only for the reasons stated in the Filtzer case [9], but because the question of an implied repeal by later legislation actually fails to arise at all in our present matter, inasmuch as the Attorney-General's power of stay antedated the modern enunciation of the presidential pardoning power.

         

19. The fifth question we posed was whether the pragmatic development of defined processes in our current legal reality can curtail the operational scope of an existing constitutional arrangement which is essentially the product of statutory interpretation. This question entails here the notion of a pro tanto repeal of the concurrent part of an earlier enactment, a notion which was explained by Justice Landau in the Filtzer case to have no application in circumstances of the kind now before us. The answer to the question is negative.

          In the first place, the answer to the question would normally depend upon the substantive nature of the processes at work, as weighed against the degree to which the constitutional arrangement evolved from statutory interpretation, and upon which the stated processes would impinge, has taken root. If this arrangement is the outcome of a wide, basic constitutional perspective, its efficacy will not be diminished by processes which are not contradictory thereto.

          Second, we are dealing here with a contention that is in fact predicated upon a change in the rate and frequency of exercise of the power of stay. This change, so the argument runs, should be seen as justification for viewing the presidential power of pardon as having been curtailed. That is tantamount to saying that the Attorney-General, by the number of nolle prosequi's he issues, determines whether or not the presidential power continues to exist. I do not believe that this proposition finds any existing legal foundation. Jurisprudence does not yet recognise a biological process by which, within a complex of existing interrelated statutory provisions, a kind of law of natural selection functions as a mechanism for the abrogation of Laws for which there is abated need because they have, as it were, fallen into disuse.

          Third, there will be scant inclination in a democratic regime espousing the rule of law and individual rights, to adopt an interpretation that suffers the whittling down, and even negation, of a power destined mainly to serve the individual, and it matters little that there exist other parallel institutions exercising like powers.

         

20. We might conveniently summarise our above reasoning as follows:

          (1) It is our accepted view that a legislative overlapping or even duplication does not in itself abrogate an existing enactment or power.

          (2) The validity of a statutory directive is not annulled by the fact of its disuse or rare use.

          (3) An implied repeal of statute law may result either from directives which are contradictory in content or, in the penal field, from the prescription of a lighter punishment in a later enactment. The presence of such contradictory directives was not argued in the matter before us, nor have we perceived it to exist. That the existence of two concurrent competent authorities does not in itself amount to a contradiction is clear from the ruling in Filtzer [9].

          (4) The mere fact of an overlapping between the power of stay and the power of pardon before conviction, does not invoke the rule of interpretation that would negate one of the two arrangements. The one is a procedural power, whereas the other is among the powers vested in the person who functions as the formal Head of State. The latter powers were fundamentally, by their very nature, intended to produce similar consequences to those resulting - to one extent or another, whether by legal design or in practice - from the acts of other governmental authorities. The two powers are of different juridical substance and the one does not negate the other.

          (5) The crucial question is whether the power of pardon before conviction was ever actually created. Once it transpires that this court has recognised the existence of such a constitutional power, and regarded it as an element of the wider presidential pardoning power, the same can no longer be amenable to an inadvertent or implied repeal. It is proper that the repeal of a constitutional power be effected only after due consideration and in a patent and advertent manner, as befits the subject of the repeal. Moreover, the rule of law is fortified when we show respect for our constitutional directives, inter alia, in the way we set about their amendment or repeal.

 

21. Were we to hold that the very enactment of new legislation can curtail the scope of an existing statute, or even implicitly repeal an express constitutional provision, then surely even the presidential power to pardon after conviction should be overtaken by the same consequence. A retrial, or the different punishment review boards, or the operation of the abovementioned Law concerning the rehabilitation of offenders, all serve purposes which overlap, partly at least, those of a pardon after conviction. As already indicated, this situation lately assumed added significance with the enactment by the Knesset of the Crime Register and Rehabilitation of Offenders Law of 1981, incorporating the ideas of Professors Klinghoffer and Feller.

          The argument as to legislative duplication and overlapping mechanisms, can hardly be confined to comparison of a stay of proceedings with the power of pardon before conviction (and substitution of the one for the other), but should properly embrace all the pertinent parallel mechanisms in the field of the constitutional as well as the penal law. An interesting illustration of the possible co-existence of parallel powers in the post-conviction stage, is provided by the Privy Council decision in Thomas v. The Queen [46], where the power of pardon of the New Zealand Governor-General was not considered invalid in relation to the class of cases in which the law permitted a retrial.

          There is no logical basis for a mode of interpretation that would differentiate, for the purpose of determining the scope of validity of the pardoning power, between the various new statutory provisions and their effects, and single out precisely those pertaining to the pre-trial stage. The power of pardon has been interpreted in our law in relation not only to the post-conviction stage, but also the pre-trial as well as the trial stages, and the fact of a gradual evolution of overlapping and parallel mechanisms provides no justification for a selective kind of interpretation.

          In fact we have here no implied repeal, nor any other phenomenon of an extinction without trace. When dealing with a constitutional directive such as sec. 11(b) of the Basic Law, we cannot sanction the elimination of any part thereof except by an explicit statutory provision which, after all, is the product of methodical study and preparation and is founded upon tried and tested legal concepts rather than chance eventualities. It is important that objectives of constitutional import be attained in a seemly manner.

          In recapitulation, it seems clear that an enacted constitutional power is not repealed except upon express statutory directive, and that the statutory conferment on the prosecution of a power which is similar in content to that exercised by the President, does not act as an implied repeal of the constitutionally bestowed presidential power. It follows that the presidential power as construed in the cases of A. v. The Law Council and Matana, continues to exist and remain valid so long as not repealed by the Knesset.

          I would not disparage the view that the power of pardon needs to be reconsidered in a manner leading perhaps to revisory legislation. Any deliberation towards this end should, in the nature of things, encompass also a solution of the problem that arises, not infrequently, from the contradiction between the judicial decision and the pardon that follows it. The search for a proper balance and separation between the different Executive organs, and the coordination of their separate activities, does not come to an abrupt halt at the chance limits set by the legal dispute in a particular matter.

 

Juridical Substance of the Pardoning Power

 

22. Our next matter for inquiry, as I have already indicated in paragraph 8 of this judgment, is the juridical substance of the pardoning power.

          The power of pardon has ancient roots, and has for thousands of years been so interwoven with the ruler's status, as to induce an opinion that it finds no place in a democracy (see e.g. Blackstone's Commentaries, p. 397). The view that pardon was a feature of autocratic rule also found expression at the time of the French Revolution, when the power was abolished for the first time and left without trace for some years. Beccaria (On Crime and Punishment, New York 1963, pp. 58-59) saw an unbridgeable gap between his own penological perspectives and the power of pardon. Yet the power has survived in an overwhelming majority of world legal systems, although in a rich variety of forms so far as concerns its scope and the authority in whom it is vested (see Dr. L. Sebba, "The Pardoning Power - A World Survey," J. Crim. L. and Criminology 68 [1977], 83). The prevailing constitutional perspective is that the pardoning power now reposes in the people who, by the force of legislation, confer it in turn on a defined authority ( Am. Jur., supra, at p. 10).

          As to the variety of constitutional arrangements, I might briefly mention that sometimes the power of pardon vests in the Head of State, i.e. the President or the King; sometimes it entails the functioning of an advisory board representing all or some of the connected governmental authorities, or consultation with the court or a special judicial tribunal, or a judge (see J. Monteil, La grace en droit francais moderne, Paris, 1959, p. 22). In other countries the actual power is wielded by the legislature as such (for instance, in Switzerland and Uruguay), or by the judiciary. Sometimes the power is vested in the Council of State (for instance, in a number of Eastern European countries and in South Korea), or in the Presidium or a council specially constituted for this purpose. In Sweden the power rests with the Government and in the U.S.S.R. with the Supreme Soviet Presidium.

          These examples illustrate, without exhausting, the range of pardoning powers, which vary also in their prescribed procedures, such as the manner of lodging the request, of consultation with judicial bodies or other agencies, and of arrival at the decision. In Australia, for instance, an inquiry is conducted in all cases by a Justice of the Peace appointed by the Governor-General or by a Judge of the Supreme Court.

          In some countries the power of clemency is confined to the reduction of punishment alone (as in France, but there one finds also the special power of la grace amnistiante, which enables the grant of a full pardon to certain classes of persons; see Monteil, La grace, at p. 207). Pardon before conviction is possible in numerous countries, inter alia, the U.S.A., Britain, New Zealand, Singapore, Malawi, Sri Lanka, Iceland, Czechoslovakia, Lichtenstein, and the State of Queensland in Australia (see Dr. L. Sebba, On Pardon and Amnesty, at p. 291). In many other countries, however, there is pardon after conviction only (for instance in India, where the restriction is statutorily prescribed). The legal consequences of a pardon also vary greatly from country to country.

          In some countries the actual decision may be directly or indirectly challenged in the courts, whereas elsewhere, for instance in France, the decision offers no ground for recourse to the courts, whether as to the legality of the decision or as to its substance within the national framework. F. Luchaire and G. Conac phrase the situation thus: tant au niveau de leur legalité qu'au plan de la responsibilité de l'Etat (La constitution de la republique francaise, Paris, 1979, p. 351). The writers rely in this connection on a resolution of the Conseil d'Etat (30.6.1892; Gugel, Dalloz Periodique, 1894, III p. 61; 28.3.1947, Gombert, Sirey, 1947, III p. 89).

          Sometimes pardon is granted for political offences alone (for instance in Colombia), and at other times these are specifically excluded as a type of offence for which a pardon may be granted.

          Our purpose in sketching the abovementioned varieties and possibilities of pardon, is to illustrate the lack of any uniform model and the fact that virtually every legal system has fashioned its own peculiar perspective on the subject, in harmony with its other governmental institutions. For comparative purposes, it is of no moment that in the U.S.A. the President, in whom the power of pardon is vested, serves to head the executive, whereas in Israel the President fulfills the function of a titular and formal Head of State - much like the arrangement in England, adopted also in many of the European democracies after World War I. There is no uniform tie between the nature and general status of the executive office filled by the holder of the pardoning power, and the power itself, since it is sometimes vested in authorities other than the President or King. When this court made reference in Matana and in A. v. The Law Council to the constitutional situation in Britain or the U.S.A., it did so, not in order to link the Israel arrangement to one or another foreign complex of powers, but to indicate the source and substance of the viewpoints we ourselves adopted. These the court found reflected in what was taken at the time to be the prototype for our own constitutional mould when our initial autonomous directives to this end came to be enacted. Once domestically fashioned, the powers became independent of any influence other than our own perspectives and concepts. Processes in other countries may be of instructive and comparative interest, but cannot deflect us from what is customary and accepted here until such time as we ourselves decide to change the approach, and do so in the appointed manner, having regard to the character of the subject and the substance of the power concerned. For this reason, too, there is little logic in seeking guidance from other systems structured upon essentially different perspectives. If, for instance, French law decrees that grace, in the case of an individual, shall relate only to the punishment and not to the conviction (except in the case of grace amnistiante ), there is little we can learn from it as regards the possibility of pardon before conviction. The French method of grace, incidentally, seems to differ also from our own method of remission of punishment, for instance in relation to a mandatory death sentence. (On the reservations of former French President Giscard d'Estaing in this connection, see Luchaire et Conac, La constitution, at p. 348.) The opposite applies in Belgium, where remission Of a mandatory minimal punishment is possible (see Dr. Sebba's article "The Pardoning Power," at p. 86). In short, the lack of a power of pardon before conviction in France or Germany, for instance, has no bearing on the present situation in our law since the models in those countries played no part in the shaping of our constitutional framework of pardon. Furthermore, for a proper evaluation of standards, we should put the emphasis on the substance of the pardoning power, and not on the functionary who exercises it, or the manner of its exercise. In our law it has been held that the President is invested with the widest form of the power of pardon (as regards offences) and clemency (as regards punishment), being empowered to obliterate even the stain of the offence and not only its consequences. That is our existing legal situation and it is in the light of this conclusion that we have to draw further inferences as to specific aspects of the power. The fact that proposals have been made to change the legal situation - and I certainly am not opposed to the discussion of these ideas, and even the adoption of some of them - does in no way affect the substance of the existing law.

 

23. It accordingly transpires that in the present case the decision to pardon came within the formal scope of the State President's power. In this regard it should be noted that the lawgiver has made provision for the preliminary ascertainment of this court's views on matters of pardon. Thus sec. 32 (a) of the Courts Law (Consolidated Version) of 1984, provides that upon a request for a pardon or reduction of sentence lodged with the President, any question which arises and in the opinion of the Minister of Justice deserves to be dealt with by the Supreme Court, but which provides no ground for retrial under sec. 31 of the Law, may be referred by the Minister to that Court.

 

Exercise of the Power

 

24. Having concluded that the President has a valid power to pardon before conviction, we might now inquire as to the occasion for its exercise. In fact the power has so far remained virtually unused, such a pardon having been granted until now in only a small number of exceptional cases, some of which were brought to our notice in the course of our deliberations here. It is only right that the power be used sparingly, for only the most exceptional circumstances of paramount public interest or personal plight - for which no other reasonable solution can be envisioned - will justify such anticipatory intervention in the normal course of the trial proceedings. It would be wrong, therefore, to attempt to classify in advance the proper cases for the exercise of this power.

          The decision to pardon was held by Justice Marshall of America to be generally motivated as an act of grace ( United States v. Wilson [55], at pp. 160-161), but the prevailing American approach is to rest the decision on considerations of the public welfare (see: Biddle v. Perovich [56] at p. 486; and see also C.C. Joyner, "Rethinking the President's Power of Executive Pardon," Federal Probation 43 (1979) 16).

          As the general starting point for examining an exercise of the pardoning power, I am disposed to accept the approach enunciated in Montgomery v. Cleveland [57] at p. 1157:

         

While a pardon is a matter of grace, it is nevertheless the grace of the State, and not the personal favor of the Governor. It is granted out of consideration of public policy, for the benefit of the public as well as of the individual, and is to be exercised as the act of the sovereign state, not of the individual caprice of the occupant of the executive office as an individual. He is supposed to act in accordance with sound principles and upon proper facts presented to him.

 

          Normally, a pardon is not a natural further progression in the course of judicial proceedings, but should properly come into play only in exceptional circumstances which involve a material change in the situation after completion of the trial proceedings, and warrant an alteration of the judicial decision. All the more rarely and exceptionally, therefore, should the power of pardon be exercised before conviction, this being a reserve or residual constitutional power left with the President - something in the nature of a "safety valve."

          A theoretical example of circumstances warranting the grant of a pre-conviction pardon, was outlined by Prof. Klinghoffer in his abovementioned statement before the Knesset, the relevant passage from which I shall repeat below for the sake of convenience:

         

Another unconvincing argument advanced is that if a suspect be very ill, it would be an act of cruelty to put him on trial. Unconvincing, because in rare cases of this kind the President of the State would be able to grant a pardon before the trial commenced. The President is empowered to pardon offenders either before or after conviction. That was laid down by Justice Agranat in the case of A. v. The Law Council, H.C. 177/50.

 

          As a further example one might mention that reasons of state, involving arrangements with hostile elements, have been recognized in the past as legitimate grounds for the early release of prisoners from custody, even before completion of the trial and, implicitly at least, as warranting also the grant of a pardon (cf. H.C. 228/84 [10]; H.C. 270/85 [11] and Bar-Yosef v. Min. of Police [12]). Of course, even in the stated circumstances every case would still require to be examined independently and the situation would vary from one concrete set of circumstances to another.

         

25. Just as it would be inconsistent with the purpose of pardon for it to become converted into a kind of instance of appeal from judicial proceedings, so too pardon before conviction ought not to become a mode of appeal against the decisions (to prosecute) of the public prosecution. This slumbering, residual kind of power has been preserved for sole use in the exceptional situation of a risk of serious harm which the holder of the power may legitimately take into account, which is incapable of being warded off by other means, and thus warrants relaxation of the essential restraint on the exercise of the power.

          In concluding my remarks on the instant point, I should like to recall, and endorse with such changes as may be necessary, the recommendation made by Dr. L. Sebba (On Pardon and Amnesty). He proposes that even upon adoption and completion of the comprehensive legislative program proposed by him for the creation of machinery to deal effectively with all matters and foreseeable problems connected with or likely to result from punishment under the criminal law, there should still be left with the President a reserve or residual power, as he put it, to deal with exceptional cases (at p. 267):

         

However, even if all the proposed solutions be accepted, we do not recommend the complete abolition of this power. Even if the parole arrangement be instituted, even though it embody regulation of the penalty of life imprisonment, and even upon the abolition or qualification of prescribed minimal punishments, there will always remain special cases in which the offender will not find salvation unless the President be empowered to come to his aid. It is true that the flexibility contributed by the pardoning power to the process of meting out the punishment, has largely become redundant in view of the increased freedom allowed the courts over the years in this regard. It is also customary nowadays to enable the Executive to intervene in the more advanced stages of implementation of the punishment, so as to maintain flexibility in these stages as well. But in the end it is still necessary to leave an opening for intervention on the part of some additional authority, in the event that the other two authorities be unable to effect the desired solution. The proper authority for this purpose is indeed the State President, who ranks in status above the other two authorities, and especially since there is sometimes involved a departure from the policy laid down by the third authority, i.e. the Legislature. In these residual cases there remains room, therefore, for entrusting the President with a power that will function as a kind of "safety valve" in the event the customary processes provide no solution.

 

          And now, arising out of the hearing of the instant petitions, there are some additional observations I have to make.

         

The State and the Rule of Law

 

26. (a) The rule of law is not an artificial creation. It is to be observed in a concrete day-to-day manner in the maintenance of binding normative arrangements and their actual application to one and all, in the upholding of the basic freedoms, in the insistence upon equality and the creation of an atmosphere of trust and security. The rule of law, the public welfare and the approach of the State to problems are not opposing conceptions but complement and sustain each other.

          The court is specially charged with the practical realisation of these expectations, but all of the State organs are committed to the attainment of the stated objectives. One cannot conceive of a sound administration without maintenance of the rule of law, for it is a bulwark against anarchy and ensures the State order. This order is essential for the preservation of political and social frameworks and the safeguarding of human rights, none of which can flourish in an atmosphere of lawlessness. National security also leaned on the rule of law, both in protecting internal policy measures, and in aiding the creation of means to combat hostile elements. There can be no organized activity of any body of persons, or any discipline, without norms based on binding legal provisions.

         

          (b) Sound government requires that the authority concerned be in full possession of the relevant facts before acting. It is not necessary that the information be known to all, and the confinement thereof to a few persons is sometimes not only desirable but also legally imperative. Yet the need for the responsible authority fully to acquaint itself with the facts increases as the subject takes on greater importance. It must be remembered that the "leaking" of classified information does not happen by itself, but by its deliberate or accidental disclosure by some person involved.

         

          (c) Sound government is founded upon the faculty of sound decision making, which there can never be without prior knowledge of the relevant particulars, no matter the subject of the decision. The matter was discussed by this court in Berger v. Minister of the Interior [13], in the context of the Minister's duties with regard to the introduction of summer-time or "daylight saving." In background importance the subject, of course, did not match that which is now under deliberation, but the principle enunciated there is equally applicable elsewhere. In the above case the court formulated rules affecting the manner of ministerial decision making, reiterating the obvious proposition that this should result from and be structured upon knowledge of the factual situation.

          Sound administrative procedures will ensure diverse facilities for obtaining information, maintaining constant supervision and overseeing the implementation of directives. The process of gathering information or holding an investigation, when necessary, may also assume different forms. Here one golden rule has to be observed, valid for purposes of administration as well as inquiry, namely: the sooner a matter calling for investigation is examined, the better from all points of view. A particular authority may perhaps confine information departmentally, or otherwise restrict its dissemination and ensure that no harm result from the disclosure or obtaining of information. But there are no circumstances that allow an administrative authority to refrain totally from investigating a matter which may bear upon its capacity, and that of its subordinates, to function properly, and to decide issues within the scope of its immediate responsibility, or perhaps affecting its responsibility to the public at large. There is a world of difference between a decision to hold a controlled and protected investigation, and a decision not to conduct one at all. The latter option would be like trying to cross a busy road with one's eyes shut.

 

          (d) There are different ways to conduct a confined or departmental inquiry or investigation into any subject - including recourse to whatever legal proceedings be considered necessary - without prejudicing the national security. Such problems have been dealt with before, and I shall say no more on the subject on the assumption that the processes mentioned by the Attorney-General in his intimation of 15 July 1986, have been set in motion.

 

The President as a Respondent

 

27. On 30 June 1986 we ruled to delete the President's name as a respondent in petitions H.C. 431/86 and H.C. 446/86, and ruled likewise on 20 July 1986 in petition H.C. 463/86. Our reason for so doing is set forth in the Basic Law: The President of the State, sec. 13(a) of which reads as follows:

 

The President of the State shall not be amenable to any court or tribunal, and shall be immune from any legal act, in respect of anything connected with his functions or powers.

 

When he granted the instant pardon, the President was acting in a matter "connected with his functions and powers," so that he is not amenable to the jurisdiction of the courts in connection therewith, including this court's powers of direct review - its authority to demand of the President himself an explanation of his decisions. This immunity relates to the direct challenge of any presidential act, but there is no obstacle to indirect judicial review of the President's discharge of his functions - in proper cases and when the proceedings are directed against some other respondent, as happened, for instance, in the case of Bar-Yosef v. Minister of Police [12].

 

28 (a) The question of the legality of the pardon granted is of wide range, embracing as it does both the power itself and the manner of its discretionary exercise. As regards the power itself, we have dealt extensively with the matter and sought to provide the correct answer above. With regard to the exercise of the presidential discretion, this court has had occasion to comment as follows, in connection with a ministerial recommendation for a pardon referred to the President:

 

Even if the President was misadvised, or even if he himself erred in the exercise of his discretion, the legal validity of his decision remains unaffected thereby and this court does not sit in appeal from the President's decision" (Barzilai v. The Prime Minister [14] at p. 672).

 

          The matter calls for a measure of clarification and qualification. It is accepted that in exercising judicial review, the court does not assume the role of the functionary whose conduct is under challenge (even if indirect) but examines whether the functionary acted as one in his position should have done ( Nof v. Attorney-General [77] at p. 334). The court does not seek to project and substitute its own decision but intervenes only when convinced that no reasonable authority in a similar situation could have arrived at that same conclusion. The degree of reasonableness required depends upon the status of the authority and the nature of its powers. That is to say, in exercising its jurisdiction the court will also have regard to the identity of the constitutional authority whose conduct is under review. The norms for the judicial review of discretionary power will in any event incorporate reference to the functional character and nature of the authority concerned (cf. Sarid v. Knesset Chairman [15] at pp. 203-4).

 

          (b) The petitioners' criticism of the President's exercise of his discretion extended also to the paucity of the information made available to him prior to his decision, as well as the haste, so it was further contended, with which the different pardons were deliberated and granted, and like contentions. I find none of them to provide any ground for intervention by this court. First, as regards the facts, there is no reason to dispute the declaration before us that the President was fully informed and had also met twice with one of the persons later granted a pardon. The fact that he did not meet with the other three applicants can hardly be regarded as an impropriety, as in fact the President normally deals only with written requests for a pardon and it is exceptional for him to meet with the applicant (see E. Abramovitz and D. Paget, "Executive Clemency in Capital Cases," N.Y.U.L. Rev. 39 [1964], 136, 137; and see Dr. Sebba, On Pardon and Amnesty, at p. 194). Once it is established that there was evidence before the President of the commission of offences as set forth in the pardon applications referred to him, whether verbal or in writing, and also that the applicants admitted having committed the criminal acts for which they asked to be pardoned, then clearly the President had before him sufficient particulars upon which to decide, thus leaving no ground for the court's intervention.

         

29. A further argument concerning the presidential pardoning power, focused on the distinction between amnesty and individual pardon, was addressed to us by Adv. Michal Shaked, learned counsel for the petitioners in matter H.C. 448/86. She contended that the circumstances of the grant of the pardons indicate them to have been in the nature of an amnesty, whereas the President enjoyed no such power, but the power to grant individual pardons alone. In support of her contention counsel quoted the following statement (extract from The Attorney-General's Survey of Release Procedures, Department of Justice, Washington, 1939 vol. III):

 

In an attempt to classify the institution of amnesty, we may state that it belongs to the upper concept of pardon. It is a plurality of pardoning acts, and its main feature is that the amnesty determines the conditions and the extent of the pardon by groups of persons or groups of crimes or by certain general attitudes of the individuals concerned. There is a pronounced predilection to lay stress on the motive. Even the exceptions and limitations in an amnesty are generally given by groups, regardless of the merits of the single case.

 

          It indeed appears from the decision in Matana [3] (at p. 445) that the President enjoys the power of individual pardon only (as is the case in England). But that exactly was the power exercised by the President in the instant case. It is true that he issued four different warrants of pardon, but each of them related solely to the individual named in that warrant and to the offence therein stated. The warrants did not define the right to the pardon according to a class of persons, or offences, or qualifying conditions. The fact that a number of pardons are granted simultaneously to several individuals involved in the same act or incident, does not serve to convert each separate warrant, or all of them together, into an amnesty (see Dr. Sebba, On Pardon and Amnesty, at p. 61).

         

Locus Standi

 

30. At the commencement of the hearing learned counsel for the respondents asked for dismissal of the petitions in limine, on the ground that the petitioners had no legal standing to contest the validity of the pardons granted. It was argued that these were in the nature of an individual act of the President and of concern to the recipients of the pardon alone. It was contended that the petitioners could not point to any real and direct personal interest in the invalidation of the pardons, as these operated solely for the benefit of the individuals pardoned (certain of the respondents in these proceedings), so that the petitioners, far from seeking any relief for themselves, were motivated merely to deprive others of a benefit (see Becker v. Minister of Defence [16], at p. 147).

          The absence of a real personal interest, even if this be true of the petitioners in the present case, does not, however, justify the immediate dismissal of the petition. This court has already held that it would take a liberal view on this aspect and grant access to petitioners where the question that arose was "of a constitutional character" ( Segal v. Minister of the Interior [17] pp. 429, 433), or "of public interest related directly to the advance of the rule of law" ( Shiran v. Broadcast Authority, [18] at 374; see also Dr. Zeev Segal's illuminating book, Standing Before The Supreme Court Sitting as the High Court of Justice, Papyrus Publishing, 1986). Needless to say, there is no general recognition here of the actio popularis, a "public petition" to the court, only a general guideline that enables the court to open its doors in suitable cases of a public-constitutional character.

          Guided by the above rule I find the petitions now before us, which centre on the scope of the presidential pardoning power under the Basic Law: The President of the State, to disclose sufficient petitioner interest for recognition of their standing.

         

The Approach of Justice Barak

 

31. I have meanwhile had the opportunity of reading the interesting opinion of my learned colleague Barak J., and I am prompted to make several further observations in elucidation of our divergent approaches.

 

          (a) I naturally take no issue with the fundamental doctrine that we must decide according to our best knowledge and understanding of the law, regardless of the surrounding influences of the time and the subject concerned. That standpoint has always been customary with this court, and nothing new has happened in this generation to change the court's perspective.

         

          (b) A perusal of Justice Barak's opinion may lead one to think that our present subject has no acknowledged legal starting point founded in precedent, and that one is being referred (in Matana and in A. v. The Law Council) to nothing more, as it were, than some forgotten obiter dictum raised here from oblivion for the first time and elevated - without legal justification - to the standing of a recognized legal thesis. One might further gain the impression that even Justices Agranat and Berinson intended no differently in the above precedents. I must reject this approach because it does not accord, with all due respect, with the factual situation. The legal proposition that the President is endowed with the power of pardon before conviction, was clearly demonstrated first in the case of A. v. The Law Council and later, even more emphatically, in the Matana majority decision. Incidentally, even Landau J., at the end of his dissenting opinion in Matana. noted his complete agreement with the opinion of Berinson J. (at p. 461), whose remarks on the presidential power to pardon before conviction have already been quoted in full above.

          In brief, the ruling in Matana has become known and accepted as faithfully reflecting, for some decades now, the prevailing law on the subject. Confirmation thereof is to be found in the written commentaries and in all academic discussion of the subject. This situation has been so clear to all as to have prompted the two distinguished jurists who advanced a different perspective on the subject (Professors Klinghoffer and Feller), to acknowledge that their view was not in accord with the approach of the Supreme Court - which they interpreted substantially as I have understood and set it out above. One of them, moreover, relied on the very existence of the pre-conviction pardoning power for a proposed solution to other legal problems discussed by him at the time (see Prof. Klinghoffer's abovementioned remarks in the Knesset - Minutes of the Knesset, 43, p. 2319). It will be recalled that one of these jurists (Prof. Klinghoffer) based his approach upon a construction of the language of the pardoning directive, while the other (Prof. Feller) argued on the basis of the working of a complex of new (overlapping) statutory enactments, but I gather from the remarks of Justice Barak that his own viewpoint is founded on neither of the above two perspectives.

          There is no escaping the fact that Justices Agranat, Berinson and Cohn (to whose clear statements on the subject Justice Barak has not referred) all unequivocally expressed their opinion on the power of pardon before conviction within the general framework of pardon. That opinion has held sway until now. It was on the strength of an identical opinion that a past Minister of Justice, P. Rosen, acting upon the Attorney-General's advice, referred recommendations to the President for certain pre-conviction pardons which were subsequently granted. Our task here is not to search for the desirable constitutional framework, but rather to ascertain the existing legal situation concerning pardon in Israel, just as it was in fact enunciated by this court many years ago, without so far having undergone any change.

 

          (c) The constitutional development towards the existing situation was clearly traced in the Matana decision, from which one can gather the court's reasons for construing as it did the scope of the pardoning power under sec. 6 of the Transition Law and sec. 11(b) of the Basic Law: The President of the State. It is not possible to ascertain the meaning of an expression in a Law by seeking to unravel the true wishes of Knesset committee members from the surviving summaries of their statements in minutes of proceedings never published. In my recognition, the answer lies in an understanding of the legislative purpose. This is to be derived from the "spacious" interpretation to be given to constitutional provisions; from the construction of expressions according to their manifest purpose; and from factors such as legal background and development, constitutional analogy, the characteristics of our legal system and our own constitutional notions as given expression, inter alia, in the very determination of the presidential office, its object and functions. All these were dealt with in the Matana case and I shall not cover the same ground again.

          Justice Barak has sought to point out a divergence between the interpretative approach in Matana, and my own approach. Little substantiation of this has been provided, however. There is no substantial difference between the "historical-interpretative approach" said to have been adopted by me here, and the so-called legal-constitutional approach ascribed to Justice Agranat, and the difference in title is but a semantic one. Substantively speaking, the two approaches are alike: that followed on the one hand by Justices Agranat, Berinson and Cohn and - on the question of pardon before conviction - also adopted without reservation by Justices Silberg and Landau, and on the other hand, my own approach here. My learned colleague has commented thus:

         

Justice Agranat accordingly did not construe the Transition Law on the basis that its legislative purpose "was fashioned in the Anglo-American mould, which served as its prototype."

 

          In support of this connection he quotes the following observation of Agranat J.:

         

The result is that the ground of the absence of any similarity or comparison between the status of the President of our country and that of the British thrown (or of the President of the United States) is erroneous.

 

          This observation speaks for itself and, with all due respect, refutes my learned colleague's contention in indicating the opposite conclusion.

         

          (d) The legal situation in France, Germany and Italy was not fully portrayed in the Matana case, and I should like to clarify some additional facets. As far as I am aware, pardon before conviction is known in Italy too, but the pardon only comes into operation if the suspect is later convicted. This arrangement does not preclude putting the suspect on trial, and allows for an acquittal on the merits without recourse to the pardon. Briefly, in Italy and in Germany there has evolved the duality of a judicial pardon side by side with an extra-judicial one justizgebundener Gnadenakt and justizfreier Gnadenakt, see Mario Duni, Il Perdono Giudiziale, Milan, 1957; Richard Drews, Das Deutsche Gnadenrecht, Cologne, 1971; Klaus Huser, Begnadigung und Amnestie als Kriminalpolitisches Instrument, Hamburg, 1973).

 

          Judicial pardon or clemency, I believe, should be seen as a convincing reason for gradual curtailment of the Executive pardon. This process, which is also discussed by Prof. Feller within the wider framework of his proposed legislative program, has acted to shift the focal centre of the pardoning decision from the King, or President, to the judicial tribunal or special statutory bodies created to deal directly with the review of conviction and punishment (retrial, release and parole boards, and the like). The comparison of our system with those applied on the Continent is therefore questionable and premature in the existing state of affairs.

         

          (e) As to the pre-conviction pardoning power in England, concerning which too Barak J. has expressed reservations, I need only reiterate that there is not a single English constitutional text that fails to mention the continued legal validity of this power, though it be reserved for use in exceptional cases. Even the post-conviction pardoning power would seem to be somewhat less frequently exercised in England nowadays.

          I must also contest Justice Barak's endeavour to distinguish the American constitutional situation from our own on the basis of the President's status there as Head of the Executive. In fact, the power of pardon was originally conferred on the U.S.A. President as part of the legal continuity adopted there, with the concomitant imitation of the English model of the King's prerogative power (see the majority decision in Schick v. Reed [58], per Burger C.J.). The view that the U.S.A. President holds the pardoning power in his capacity as Executive Head, runs counter to authority:

         

Our government is established upon the principle that all governmental power is inherent in the people. Hence, crime is an offense against the people, prosecuted in the name of the people, and the people alone can bestow mercy by pardon. As subsequently is noted, the people may confer the pardoning power upon any officer or board that they see fit ( Am. Jur., at p. 10).

 

          The import of the passage is that the U.S.A. President holds his power as representative of the people and it is not his executive capacity, designation or status that determine its scope.

          In our own constitutional framework the President stands outside the political arena, and this neutrality should allay at least one of the apprehensions expressed by my learned colleague. Moreover, the conferment and exercise of all power can and should properly be subjected to supervision and review, as was indeed noted by Justice Agranat in Matana (at p. 461):

         

   Nor have I overlooked the fact that to endow the power in question with its "full" content may lead to its excessive use, which in turn involves the danger that the authority of the law in the eyes of the public will be weakened. My reply to this point, however, is that every instrument of pardon by the President requires the countersignature of the Prime Minister or one other Minister (sec. 7 of the Transition Law, 1949). This means that even if the decision to pardon or to reduce a sentence must be the personal decision of the President, it is also conditional upon the recommendation of the Minister concerned. This Minister will ordinarily be the Minister of Justice who has the means of conducting a precise investigation into the circumstances of the case before submitting his recommendation to the President. It is clear that this recommendation, and therefore the decision to pardon as well, are subject to review by the Knesset and it is this possibility which must be regarded as the guarantee laid down by law against the danger referred to.

 

And Justice Cohn had this to say on that same point (at p. 465):

I have no fear whatsoever of any supposed impairment of the courts power to judge and to punish by the extent that the President of the State is empowered to change or set aside the results of their judicial acts. I could see some slight ground for fear and some small degree of impropriety if the power in question were possessed by the government or one of its organs, or even by the Knesset, for that would perhaps involve some confusion of the boundaries between the judicial on the one hand and the executive or legislative authorities on the other. The President of the State, however, stands above all these three authorities. He embodies in his person the State itself.

 

          So far as I am concerned, the existing Israel form of the pardoning power is not a sine qua non for the maintenance of orderly constitutional government. The variety of arrangements made on this subject in different countries is indicative of more than one solution to a universal problem. Our own arrangement is hardly, therefore, to be seen as the sole possibility. The central feature of the pardoning power wielded is a personal, selective decision which is dependent, inter alia, on the recommendation and countersignature of an authority of a political character, i.e. the Minister. My own inclination is to prefer some new legislative arrangement that will introduce appropriate statutory mechanisms free to function, as regards judicially decided matters, without recourse to the decisions of political organs. At the same time, however, one has to reject the view that the full pardoning power presently prevailing is inconsistent with the rule of law. It should be remembered that we are dealing here with legally valid constitutional arrangements of the kind found today in countries of recognised democratic character, and to say that the existence of an effective rule of law is negated by reason of a pardoning power of full scope, where it exists, is an extreme proposition lacking any real foundation.

          I must also refer to the contention that the very overlapping of the presidential power with like administrative powers is inconsistent with the maintenance of good government. I have already pointed out that there is no complete parallel between the two kinds of power. Pardon in all its existing forms represents an institution which by its very nature and working contradicts the rulings of other authorities, just as it does whether it is extended before or after conviction. Such overlapping is therefore an inherent feature of the entire pardoning process and in this respect its exercise before conviction is not exceptional.

          It is only right that the abandonment of the existing arrangement in favor of newly devised systems should be preceded by a comprehensive study of the subject - of the kind undertaken by Prof. Feller - and be followed by orderly legislation embracing all aspects of pardon and clemency. But until the fundamental constitutional perspective underlying our recognition of the pardoning power be revised in the appointed way, there is no room for the abrogation - in a sporadic manner, by the method of interpretation - of one of the facets of that power which has been recognised for many years now, and is rooted in the fundamental judicial understanding of the pardoning institution in our legal system. The ad hoc erosion of an existing legal arrangement in answer to the needs of the hour, weakens rather than strengthens the rule of law. This was the kind of situation I had in mind when I remarked thus in Neiman v. Central Knesset Elections Committee [19] (at 260):

         

When constitutional matters are under review, their import and implications have to be considered in the long term, and proper weight has to be given to their influences on the political and social frameworks within which they operate. If these be subjugated to the needs of the hour and we adopt a casuistic approach in matters of constitutional content, we shall miss the mark and deal less than justly with the subject.

 

          (f) It is, in sum, an inescapable conclusion that the Matana precedent adopts a wide and embracing interpretation of the presidential pardoning power. It was explicitly decided there by Justices Agranat, Berinson and Cohn that it also encompassed pardon before conviction. Though the product of autonomous Israeli legislation, the power cannot be divorced from its repeated comparison and equation, in the Matana case, with the parallel power held in the Anglo-American legal system by the King or President, as the case may be. This equation had a direct bearing on the reach of the constitutional power unfolded in the above precedent. Much as I try, I find no evidence in the Matana decision to support the suggestion of Barak J., that at that time the origin and substance of the power in England and in the U.S.A. had not been properly understood. I also find no evidence that this court had overlooked, as it were, differences of constitutional structure between those countries and Israel or, for that matter, the prosecution's own powers and independence in Israel, or the clash of the presidential power with other overlapping, frequently exercised powers - both before and after conviction. This suggestion is in entire disaccord with the long-accepted Matana ruling.

The constitutional situation is, therefore, that enunciated in Matana, by which precedent we have to be guided - as regards the scope of the pardoning power until the lawgiver sees fit to intervene. We have to contend with the legal and factual circumstances as we find them unfolded before us, rather than with hypothetical or desirable situations, and without circumventing or bypassing the decisions of this court and their consequences. It is our judicial task, in the present context, to give a principled, normative decision, structured upon existing legal foundations. In the pursuit of this objective we should do well to apply Chief Justice Marshall's well-known dictum in Osborn v. United States Bank [59] (at p. 866):

 

Judicial power is never exercised for the purpose of giving effect to the will of the judge; always for the purpose of giving effect .... to the will of the legislature.

 

The Investigation

 

32. We understand from the State's reply, as intimated by the Attorney-General, that the police will conduct an investigation into the events forming the subject of these petitions. This leaves no room, in my opinion, for intervention by this court in connection with the holding of an investigation.

          Following the Attorney-General's intimation, the petitioners in file H.C. 431/86 gave notice of withdrawal of their petition, and the petitioner in file H. C. 428/86 advised that he was confining his petition to the sole issue of the legality of the pardons granted.

          As to the petition in file M.A. 320/86, I see no reason to question the decision on the investigation as intimated by the Attorney-General, the nature of which I find acceptable in principle.

         

33. I would accordingly dismiss the petitions and discharge the order nisi.

 

MIRIAM BEN-PORAT D.P.

 

1. The divergence of opinion between my learned colleagues, President Shamgar and Barak J., persuaded me to await their written judgments before giving my own decision on the important question under consideration here, namely: is the President of Israel empowered to grant a pardon to a person before trial and conviction? I find my learned colleagues to have unfolded in their judgments a wide and colourful tableau of concepts, precedents and scholarly comment, which have aided me greatly in formulating my own opinion. Their painstaking and comprehensive analyses leave me free to concentrate mainly and briefly on my reasons for concurring in the judgment of the learned President - more particularly, my reasons for agreeing that the pardons granted by the President are legal and valid and, primarily, my reason for holding that the stated presidential power of pardon before conviction effectively exists.

 

2. In see. 11(b) of the Basic Law: The President of the State, it is provided that the President

   shall have power to pardon offences (and to lighten penalties by the reduction or commutation thereof).

 

          I have put the latter part of the directive in parentheses since the first part is the focus of our deliberation here, although I shall of course deal with the whole in substantiation of my viewpoint. As already clarified by my learned colleagues, the power "to pardon offenders" was previously vested in the President under sec. 6 of the Transition Law of 1949, and remained so vested until the repeal of this provision by sec. 26(a) of the above Basic Law. A comparison of the language of the two sections shows only a slight difference in wording, of no material significance. We may accordingly treat anything stated or decided on the basis of sec. 6 of the Transition Law as equally applicable to sec. 11(b) of the Basic Law, with which we are now concerned. For the better understanding of my exposition below, it should be recalled that until the enactment of the Transition Law, the President's power was anchored (pursuant to sec. 14 of the Law and Administration Ordinance of 1948), in Article 16 of the Palestine Order in Council, 1922, which provided as follows:

         

When any crime or offence has been committed within Palestine, or for which the offender may be tried therein, the High Commissioner may, as he shall see occasion, grant a pardon to any accomplice in such crime or offence who shall give such information and evidence as shall lead to the conviction of the principal offender or of any such offenders if more than one; and further may grant to any offender convicted of any crime or offence in any court.... a pardon either free or subject to lawful conditions, or any remission of the sentence.

 

          I have stressed, in the above passage, the word "offender" and the phrase "a pardon.... subject to lawful conditions," for purposes which I shall presently elucidate. At this stage, however, I merely wish to summarize the President's power at that time (from the transfer to him of the High Commissioner's powers under the above Ordinance) as embracing a pre-conviction pardon granted an accomplice who was willing to give information leading to the conviction of the principal offender or any such offenders, as well as a pardon granted any convicted offender. The pardoning power, as already indicated, was formulated differently in the Transition Law, and this version was later repeated without material change in the Basic Law.

         

3. Our search for the proper interpretation of the statutory provision in issue here, hardly breaks new ground. Justice Barak is aware of this fact, but attaches little weight to the precedents cited, for two reasons. In the first place, he holds the statements made in these precedents to have been obiter, and secondly, he considers certain passages therein actually to support his own view. Thus he mentions, for instance, that Justice Agranat saw the power conferred under sec. 6 of the Transition Law as an "original" one, and therefore offering no basis for analogy with the corresponding power in English law. Justice Barak also attaches no significance to the practice that has evolved out of those precedents.

 

          I accept Justice Agranat's determination, in the Matana case [3] (at p. 443), that the language of sec. 6 of the Transition Law- and likewise of sec. 11(b) of the Basic Law - was not comparable with that of Art.16 of the Order in Council, since the Transition Law provision represented an "original" Israel power of constitutional content, in contrast to the class of powers delegated by the English King to colonial Governors. The latter were much narrower than the King's own powers, and required a restrictive interpretation.

          However, I disagree with Barak J., that in the Matana case Agranat D.P. (as he then was) did not view the presidential power of individual pardon under the Transition Law (as opposed to a general amnesty), as being basically the same as that of the English King or the American President. In other words, Justice Agranat's remarks on the original nature of the power set forth in sec. 6 of the Transition Law, and on the universality of the pardoning concept, were only intended, I believe, to explain why the non-repetition in sec. 6 of the Transition Law of certain parts of Art.16 of the Order in Council, could properly be ignored in construing that section. For the purposes of the issue in Matana, Agranat D. P. was not prepared to regard the non-repetition in sec. 6 of the Transition Law, of the words "pardon.... subject to lawful conditions" (appearing in Art.16 of the Order in Council and stressed by me in the above citation), as being in derogation or restriction of the presidential power. On the contrary, his opinion was that the general language used in sec. 6 was characteristic of a constitutional directive and called for a wide interpretation, and he saw the Anglo-American legal sources as prompting the proper interpretation of our own statutory provisions (see the Matana case [3], at pp. 453, 454). It was his opinion (which became the majority opinion of the court) that notwithstanding the absence of an express empowerment of the President to grant a pardon subject to conditions, the general wording ("the power to pardon offenders") sufficed, by virtue of the wide interpretation, to invest the President with this power as well (i.e. to pardon conditionally).

          Any remaining doubt as to Justice Agranat's recognition (in Matana) of the link between Israel and England as regards the power of individual pardon, is surely dispelled upon reading his judgment in the earlier case of A. v. The Law Council [2]. While the learned Justice erred there with regard to the power of colonial Governors (i.e. the High Commissioner of Palestine), an error he subsequently corrected, his basic standpoint has nevertheless prevailed. This standpoint he expressed in the following terms, and in other statements to the same effect in his judgment:

         

   I am of the opinion that the power of pardon of the President of Israel is the same, generally speaking, as the power of pardon of the King in England, in its nature and in respect of the consequences which flow from its exercise" (ibid., p. 750).

         

          Agranat J. (as he then was) was indeed alone in considering the full arguments of counsel as to why the name of A., the petitioner, was to be restored to the Roll of Advocates following upon the full pardon granted him (after he had served his full sentence). Yet the related comments of Agranat J. were not mere obiter dicta - and as is known, these too can carry considerable weight - but were made in the deliberation, on its merits, of what he considered to be the real question underlying the dispute in that case:

 

The real dispute being waged today between the petitioner and the community, has its origin in the former's argument that the pardon gave him an absolute right to the restoration of his name to the Roll of Advocates....  It is clear that this court alone is competent to adjudicate upon this dispute between the petitioner and the public.... The fact that the petitioner, for the reason of having misconceived the powers of the Law Council, turned to that body for the enforcement of his right, does not negate the possibility that the petitioner's abovementioned argument may be finally disposed of in the present proceedings.... If we find the petitioner's argument to be well founded, and declare him entitled to renew practice as an Advocate, such a declaration will bind everyone, and the petitioner should experience no difficulty in having his name restored to the Roll. If, on the other hand, we decide that the pardon does not bring about the desired result, that ruling will equally resolve this dispute between the citizen and the public. One way or the other, I believe it is required of us to decide this whole question.... which is what I now proceed to do (my italics-M.B.P.).

 

          It seems to me that Justice Agranat's attitude reflected his clear perception that the power of pardon in Israel required to be widely interpreted, as in England and America, as embracing also the pardon of an offender before his conviction. This attitude is to be gathered from his judgments, in A. v. The Law Council and in Matana. It so transpires from his citation and adoption of a statement in Halsbury's Laws of England that "pardon may, in general, be granted either before or after conviction," and especially from his own conclusion (in A. v. the Law Council [2], at p. 751):

         

from which I learn that the President has the power to pardon offenders both before and after conviction, either unconditionally, or with qualifications.

 

          Justice Agranat gave practical implementation to his above perception by interpreting the consequences of the pardon in issue there in accordance with the customary approach in England and in the U.S.A. (ibid., p. 751).

          A perusal of the two precedents reveals that none of the other Justices dissented from the interpretation according to which the President of Israel was competent to pardon offenders also before conviction; indeed, most of the Justices explicitly took the same view. Thus the difference of opinion between Berinson J. and Agranat J. in Matana, as to the comparison of sec. 6 of the Transition Law with Art.16 of the Order in Council (with Berinson J. refusing to recognize a presidential power to grant a pardon subject to conditions, owing to the absence in sec. 6 of such express provision), did not prevent Berinson J. from holding (perhaps on account of the first part of Art. 16) that the presidential power of pardon was exercisable also before conviction ( ibid., at p. 469):

         

the President's power of pardon is in a certain sense wider than that possessed by the High Commissioner. Whereas the High Commissioner was unable to pardon a crime before the offender was tried and convicted unless he turned King's evidence and led to the conviction of his accomplice (the first part of Article 16 of the Order in Council), the President is not bound by this condition and, so it seems to me, may pardon any offender even before he is brought to trial.

 

          Landau J., at the end of his opinion in Matana, expressed his "complete agreement" with the judgment of Berinson J., from which it follows that he agreed also with the content of the above passage, or at least had no reservations about it.

          Justice Cohn fully supported Justice Agranat's interpretative approach, and emphasized his view that the Presidential power was to be widely construed.

          The general opinion, therefore, was that there was in Israel an existing, valid presidential power of pre-conviction pardoning. There was, however, a divergence of opinion in Matana on the question of equating the power of the President of Israel with that of the British Monarch.

          It may be noted that Justice Agranat's approach has been followed in practice ever since the decision in A. v. The Law Council. This fact is confirmed in the judgment of Cohn J. in Matana (at p. 461):

         

Under sec: 6 of the Transition Law, 1949, the President of the State is empowered to pardon offenders and to reduce punishments. The Presidents of the State have exercised this power from 1949 until the day on which judgment was delivered in Matana v. Attorney-General (June 23, 1960, in the manner laid down for them in the judgment of this court (per Agranat J) in A. v. The Law Council, at 745 et seq.). That is to say, both the President of the State and the Minister of Justice, whose countersignature of the President's decision is required by the Law, and also the wide body of citizens who have had need of the President's grace, have always regarded this power of the President as equal and parallel in nature and scope to the power of pardon and reduction of punishments possessed by the Queen of England.

 

          This practice (with which few were as familiar as Justice Cohn, who had held office as Attorney-General for a lengthy period) had been followed for some ten years when the decision was given in Matana, and in this context the learned Justice went on to comment as follows (at p. 462):

         

It has already been said more than once by this court (both during the Mandate and after the establishment of the State) that the court will hesitate very much to reverse a particular practice which has taken root during the years, and if this was said in respect of matters of practice which did not rest upon the authority of judicial precedent, how much more is it applicable to a matter of practice which rests upon a specific decision of the Supreme Court. As for myself, even if I were inclined to agree with the opinion held by my colleagues Berinson J. and Landau J. that the practice followed by the President of the State year after year is based upon too wide an interpretation of sec. 6 of the Transition Law, 1949 [and it will be recalled that the opinions differed there on the question of a pardon subject to conditions, and not as regards a pardon before conviction - M.B.P.], even then I would no venture today to change this practice which has received the seal of the Knesset at least by its silence (my italics - M.B.P.).

 

          We are, therefore, talking about a practice that has now been followed for some decades. Initially the practice was founded on the single opinion of Agranat J, that is, on the ratio of his decision in A. v. The Law Council, and later also on the Matana decision.

          That even distinguished jurists treated the decision in A. v. The Law Council as laying down a rule to be accepted, may be gathered from the following extract from a statement made by Prof. Y. H. Klinghoffer in a Knesset debate on 29 June 1965 ( Minutes of the Knesset, 43, p. 2319):

         

Another unconvincing argument sometimes advanced is that if a suspect be very ill, it would be an act of cruelty to put him on trial. Unconvincing, because in rare cases of this kind the President of the State would be able to grant a pardon before the trial commenced. The President is empowered to pardon offenders either before or after conviction. That was laid down by Justice Agranat in the case of A. v. The Law Council (my italics-M.B.P.).

 

          The above remarks were made with reference to the question whether it were better to render it obligatory for the prosecution to charge a suspect and put him on trial when the evidence so warranted, or to leave the decision to the discretion of the prosecution. Prof. Klinghoffer clearly favoured the former option, reasoning thus:

         

In expressing my reservations I would recommend we abandon this method in favour of one that obliges the prosecution to put a person on trial when it is in a position to substantiate the charge upon sufficient evidence. When a particular act or omission is defined by statute as a criminal offence, the matter should properly be submitted for judicial determination, and it is not the concern of the prosecution, which is a part of the Executive authority, to relieve the suspect of responsibility for his act or omission by not putting him on trial, and precluding the competent court from judging him according to law. To entrust the prosecution with the option to decide on its own whether or not there be any public interest in holding a particular trial, and accordingly whether or not to institute criminal proceedings against the suspect, is to invite dangers of a political nature. This arrangement would amount to a conferment of power to pardon someone in advance, and convert the prosecution into a kind of pardoning institution, something that is not in keeping with its essential function (my italics - M.B.P.).

 

          We accordingly see that Prof. Klinghoffer drew a clear distinction between an unqualified discretion given the prosecution whether or not to charge a suspect - according to its perception of the public interest in the matter - and the exercise of the pardoning power. The distinguished jurist saw such an option as holding out certain dangers, and undesirably conferring a power of advance pardon, whereas he accepted as a matter of fact the presidential power to grant a pardon, in rare cases, even "before the trial commenced."

In the end the Knesset took the middle path, but I shall come back to this aspect later.

         

4.       Two conclusions may be drawn from what I have said so far:

          (a) As regards the scope of the presidential power to pardon offenders before conviction, we are not without guidance, for the existing judicial pronouncements on the subject to the effect that the President does possess such power, cannot be said to be purely obiter;

          (b) We are confronted with a practice that has taken root in Israel ever since the decision in A. v. the Law Council, that is to say, for some decades now.

          There can be no doubt as to the importance of these two considerations in the determination of our attitude.

          (c) Also carrying weight, purely as an interpretative indicator for me (and not as a source of legislation), is the fact of the lawgiver's silence on the instant point when the content of sec. 6 of the Transition Law was reenacted in sec. 11(b) of the Basic Law. This silence was maintained despite the clear trend of the precedents and the practice evolved and based thereon, and it stands out against the express addition in the Basic Law of a presidential power to "commute" sentences, the lack of which had been established in the precedent cited, together with the court's unanimous opinion that the President was empowered to pardon also before conviction. This silence and its implications are fully elucidated in the judgment of Shamgar P.

         

5. It is true, however, that a later legislative development sometimes does dictate a change in interpretative approach. Attitudes also change with the passage of time, and these changes come to be reflected in the decisions of the courts - in the manner of new wine poured into an old flask - if weighty reasons be found for departing from an existing rule, deeply rooted though it may be. If, for instance, the customary interpretation be found necessarily to misconceive the purpose of the provision concerned, or that it has not even the slightest foundation in the language of the provision, or that its implementation in the exigencies of new reality poses a real threat to the maintenance of good government, then I should be inclined to construe the pardoning power restrictively as being confined to the post-conviction stage alone.

          I have come to the conclusion, however, that there are no weighty reasons for disturbing the existing precedents and practice. My reasons for so concluding are the following:

          (a) The wide interpretation given the term "offender" finds ample justification in the language of the statutory provision in question. My colleague, Barak J., acknowledges that, linguistically speaking, the term "offender" could embrace also a suspect who has yet to be tried and convicted; hence, in his opinion, the wording of the provision alone does not advance our inquiry one way or the other. Yet the learned Justice suggests at the same time that only someone who has already been convicted is an offender, as appears, for instance, from the following passage in his judgment (par. 25):

         

   Even an admission by the applicant for a pardon that he committed an offence, is of no consequence, for he is presumed innocent until convicted by the court.

 

          I must confess that I find the emphasis given to circumscription of the term "offender" in the context of our instant inquiry, somewhat perplexing. It is common cause that the main (some hold, the only) purpose of a full pardon, is to make amends for a serious miscarriage of justice which has resulted in the conviction of an innocent person. If that be the main (or sole) purpose, then the recipient of the pardon is no "offender" at all, but the victim of an error. If we adopt the arguments of the petitioners, and of certain jurists, that only the court is competent to stamp a person as an "offender" for the purposes of pardon, we shall find that it is precisely that kind of error which the President is unable to repair - a situation that is contrary to all logic. Of what avail is it for the court to find, upon hearing evidence and argument, that the accused indeed committed the crime - and thus branding him an "offender" - if the essence, and main purpose, of a pardon be to proclaim that he is not such? This reasoning alone would warrant the conclusion that an "offender" includes someone to whom the commission of an offence is attributed.

          It is pertinent, moreover, to recall that Art. 16 of the Order in Council empowered the High Commissioner to pardon an offender (an accomplice) before conviction, if he was prepared to give information and evidence concerning the principal offender or any such offender. We must bear in mind the proximity in time between the repeal of the said Article 16 and the enactment of sec. 6 of the Transition Law, a proximity which provides further indication that the term "offender," as already pointed out in the judgment of Shamgar P., was intended to refer to someone to whom the commission of an offence "is attributed." The learned President cited many convincing examples of the lawgiver's use of the term "offender," in a variety of contexts, from which too one may learn that this term does not necessarily mean someone who has already been convicted. In other Laws the term may indeed import otherwise, depending upon the legislative context and intent, but the abovementioned examples all relate to the same or closely the same kind of material as our present matter (for instance, general amnesty), and convincingly show that the term "offender" should not be understood only as someone who has been tried and convicted. In addition to the above illustrations, among many other possible ones, I might also mention sec. 6 of the Secret Monitoring Law of 1979, which provides a framework for secret monitoring, inter alia, if necessary "to prevent offences or detect offenders." It is clear from the context that the Law envisages the monitoring and exposure of the conversations of a person involved in a criminal act (whether not yet committed, in the process of commission or after its commission) and all, of course, in the stage preliminary to the trial and, certainly, before conviction of the suspect.

          In essence, my learned colleagues and I all agree that linguistically speaking sec. 11(b) of the Basic Law suffices, as it stands, to encompass also the power of pardon before conviction. The requisite interpretative nexus for this purpose is there, and the statutory provision cannot be said to lack a linguistic foundation for such a construction.

 

          (b) We must now, after disposal of the linguistic aspect, deal with the main criterion, namely, the legislative purpose of the pardoning directive.

          Justice Barak holds in his judgment that a construction according to which the President of the State may pardon someone before his trial and conviction, is inconsistent with the purpose of the pardoning directive. He states that in order to choose between the possible linguistic options we must turn to the legislative purpose, and he holds the true objects of the pertinent statutory provision to be those enunciated by Justice Agranat in A. v. The Law Council and in Matana, and none other, namely:

         

The primary purpose... is to redress the wrong done to a person who was convicted while innocent, and the second purpose - the value of which should also not be underestimated - is to reduce the sentence of the offender in circumstances which justify this. It is clear that the exercise of such a power by one of the highest State authorities is essential for the effectiveness of any governmental regime, since in no country whatever has there yet been created a system of justice capable of perfect and unerring operation, and of dispensing justice in every case without fail ( A. v. The Law Council, at p.751).

Justice Barak then goes on to make this comment:

This reasoning naturally only holds true in relation to a convicted offender. It is not at all applicable to someone who has yet to be convicted. How, then, is this reasoning of Justice Agranat to be reconciled with his view that the President has power to pardon before conviction? Such power would necessitate a different rationalisation, of the kind that is not to be found either in A. v. The Law Council or in Matana (my italics - M.B.P.).

 

          This seems a cogent argument in support of the conclusion that, measured by the test of legislative purpose, the presidential power is restricted in its exercise to a pardon after conviction only. It is not so, however. Thus, for instance, in A. v. the Law Council Justice Agranat mentioned additional objects of a pardon, remarking inter alia as follows (at p. 755):

Third, I have not overlooked the possibility that a pardon may also be granted for reasons which do not stem, necessarily, from the innocence of the convicted person.

 

          These remarks link up with what Justice Agranat said later in the Matana decision (at p. 451):

         

It is quite easy to think of a case in which the need to use this system would arise when the public interest alone, and not that of the prisoner, requires his release from custody. It may, for example, be proper to liberate a prisoner who is a national of an enemy state on condition that he leave Israel territory immediately and permanently, in order to facilitate an international arrangement which will ensure, in return for such a pardon, the immediate release of a "Zionist prisoner" in custody in that state.

 

          The above example happens to relate to a convicted prisoner, yet this underlying purpose is not to reverse an injustice but to prefer the public interest, to which the rule of equality before the law must bow. That is to say, we have here a conflict between two very important interests: one - equality before the law, which requires that every offender against the law should answer for his conduct; the other - the safeguarding of a vital public interest. The proper balance between the two is the determining factor. The President of the State was in the same predicament in relation to the matters raised in the petitions before us. Thus he declared his conclusion that despite finding merit in the opposing viewpoint, he was satisfied at the time that vital security interests of the State were at stake and also that it was necessary to put an end to the "devils' dance," as he described it, and therefore he decided to accede to the requests for a pardon.

          The primary purpose of a pardon, at least until the retrial procedure was instituted, has indeed been to correct an injustice resulting from an error in judicial proceedings. But that has not been the only purpose of a full pardon. Thus, as already mentioned, it was possible under Article 16 of the Order in Council to pardon an accomplice (before trial) in order to induce him to give information and evidence against the principal offender or any such offenders. The purpose of such a pardon was not to reward its recipient, but to achieve an object considered by the pardoning authority more important than trying the person pardoned. (A similar approach is also to be discerned in civil law - see Mistry Amar Singh v. Kulubya [47], where the plaintiffs claim, though tainted with illegality, was sustained in order that the purpose of the law should not be defeated.) For the attainment of the same purpose a pardon or clemency may conceivably also be granted to a convicted offender, by way of a reduction of sentence, if the latter, only at that late stage, is prepared to disclose important information against other offenders who committed serious crimes.

          Furthermore, such rationalisation - that the public interest sometimes prevails over the interest of bringing the offender to trial or of having the trial run its full course - is to the best of my understanding, contrary to the opinion of Barak J., also to be found in the cases of A. v. The Law Council, and Matana. I base this conclusion in the first instance on the abovementioned remark of Agranat J. in A. v. The Law Council (at p. 755), that a pardon may also be granted for reasons "which do not stem, necessarily, from the innocence of the convicted person," and also on his following statement in the same case (at p. 747) :

         

lts main purpose - and I do not overlook its other purposes - was and remains to declare before all that the person tried and convicted, and now receiving a pardon, is free of guilt and that his offence has been wiped out (my italics-M.B.P.).

 

          Thus, we seem to find in the two abovementioned precedents precisely such "different rationalisation," according to which a full pardon may also be granted to someone other than a wrongly convicted person who is serving his sentence. This pardoning consideration, provided it is applied correctly and carefully in the proper cases, operates with the same validity and force both before and after the conviction of the offender. In fact, even Justice Barak countenances the possibility that it may be better, in rare cases, to pardon a person before conviction rather than to stay the proceedings against him - for instance when the person is suffering from a malignant disease - save that my learned colleague does not consider such exceptional cases to warrant a wide interpretation of the statutory directive. By the same token I would hold it desirable, in a rare case, for a person to be pardoned before trial and conviction for the sake of protecting a vital public interest. The Attorney-General is indeed the competent party to decide whether a person shall stand trial or not, to which end he may, even must, weigh considerations of a social or security nature. Like Justice Barak, I too find support for my view in the report of the Agranat Commission on the Powers of the Attorney-General (1962), where it was stated, inter alia, that

 

In certain circumstances a matter of security, political or public interest may dictate that no criminal charge be preferred (p. 6).

 

          The Commission dealt also with the Attorney-General's need to consult with the political authorities when making his decision, reporting thus (p. 13):

         

The stated duty to consult arises particularly when criminal proceedings are being instituted in relation to a matter of security, political or public interest. In such event it is always incumbent on the Attorney-General to consider whether the act of instituting criminal proceedings (or halting the same) is not more likely to prejudice the interests of the State than refraining from taking such action. This the Attorney-General will only be able to do after having sought information and guidance from those who carry the primary responsibility for safeguarding the State from the security, political and public aspects - that is to say, from those who, so we must presume, are more experienced and knowledgeable in those fields than we are. As already indicated, he will generally need to refer to the Minister of Justice for the required direction and advice; but sometimes, that is in cases which give rise to questions of "high policy," there will be no alternative but to obtain guidance from the Government as a body (my italics - M.B.P.).

 

          I shall come back to these statements later. First, however, I wish to consider the situation that arises when pursuant to sec. 59 of the Criminal Procedure Law (Consolidated Version) of 1982, a police investigation has to be opened upon a complaint of the commission of a felony, and it transpires that the very conduct of the investigation (including the taking of statements from witnesses) may seriously impair the security of the State. Who will then be empowered to decide whether the investigation shall be completed or discontinued?

          Mr. Harish, the Attorney-General, has submitted that he lacks the authority to order that a police investigation be discontinued (or not opened after the police learn of the commission of a felony). It is arguable, perhaps, that the police, being an arm of the Attorney-General for criminal investigation purposes ( Reiner v. Prime Minister of Israel [20], pp. 485, 486), is obliged to act as directed by him, thus rendering the Attorney-General competent to order discontinuance of the investigation. The matter, however, is far from clear. For instance, there is the express directive in sec. 60 of the above Law, that upon completion of the investigation of a felony, the police shall transmit the material to the District Attorney; the police, however, may refrain from investigating lesser offences, though only for the reasons set forth in sec. 59 of that Law. A measure of support for this separation of powers is even to be found in the following passage from the judgment of Justice Barak (in paragraph 25, though his remarks were intended for a different purpose):

 

This conclusion as to a "separation of powers", between the presidential pardon and the powers of other State authorities, is reinforced when regard is had to Israel's general constitutional framework. The other State authorities (the police, the prosecution and the courts) have the means to establish the facts. The police has its investigating facilities and seeks to reach an assessment of the factual situation. The prosecution, to whom the police must transmit the material, will handle and process the same until delivery of the judgment. The courts possess the institutional and normative facilities for elucidating the question of innocence or guilt.

 

          That is to say, each authority has its own field of responsibility. The police, upon receiving a complaint or otherwise learning of the commission of a felony, is obliged to conduct an investigation, and upon its completion to transmit the evidence to the appointed authority, the prosecution, which only then comes into the picture. It is even doubtful whether the police may halt its investigation in cases of felony, even where the police considers the Attorney-General to have good reasons for wishing to do so. On a plain reading of the conclusion to sec. 59 of above Law, the police has such a discretion (on the grounds of there being no public interest involved) only in relation to misdemeanours, and not felonies. And most important, even the Attorney-General's power to intervene in the investigation by directing that it be discontinued is, as already mentioned, a matter of doubt. Thus, there is the express provision (sec. 61 of the Law) that the Attorney-General may direct the police to continue investigating if, after receiving the material, he "considers it necessary for a decision as to prosecution or for the efficient conduct of the trial." This provision would seem to be superfluous if the Attorney-General is indeed competent to decree at will the completion or halting of police investigations.

          On the assumption that the police is legally obliged to complete its investigation of a felony, and then to refer the material to the District Attorney, the grant of a pardon would indeed be the only way of halting an investigation if it endangered a vital public interest such as the security of the State. The abovementioned view of the Agranat Commission that the security, political or public interests of the State may in certain circumstances require that no criminal charge be preferred, holds good also as regards the halting of an investigation for similar reasons. It is quite likely that in this situation (in contrast with the stage when the police refer the material of the investigation to the District Attorney) a presidential pardon will be the only way of halting the process.

         

          Again, even assuming the Attorney-General to have power to halt a police investigation, a difference of opinion may yet arise, in a particular case, between the Attorney-General and the State authorities with whom, as the Agranat Commission required, he must consult. While it has to be presumed, according to the Commission, that the security authorities are more experienced and better informed than the Attorney-General, and though they bear primary responsibility for safeguarding the security and other vital interests of the State, the latter nevertheless has to make his own decision on matters within his sphere of responsibility. In this situation, with each party insisting upon its own viewpoint, how will the conflict be resolved? It seems to me that the situation bears comparison with the conflict that arises between the need to withhold privileged evidence and the right of the accused to defend himself against a criminal charge. It is a hallowed principle of penal law, embedded in the structure of a democratic regime, that the accused shall be given every opportunity to avail himself of any evidence in the hands of the prosecution. Yet this right has been qualified in the Evidence Ordinance (New Version) of 1971, sec. 44(a) whereof provides:

         

A person is not bound to give, and the court shall not admit, evidence regarding which the Prime Minister or the Minister of Defence --- has expressed the opinion that its giving is likely to impair the security of the State --- unless a Judge of the Supreme Court on the petition of a party who desires the disclosure of the evidence finds that the necessity to disclose it for the purpose of doing justice outweighs the interest in its non-disclosure.

 

          If a Supreme Court Justice (not involved in a particular criminal case) should come to the conclusion that the need to disclose certain evidence, in the interests of justice, has to defer to the State interest in keeping such evidence privileged, he will uphold the latter even if the accused's ability to defend himself is affected thereby. If, on the other hand, it is decided that the evidence should be disclosed in the interests of justice, there would still be the possibility that the security authorities, taking a different view as to the measure of harm that may result, would prefer not to disclose the evidence, even if this should lead to the accused's acquittal. The acquittal may represent a more valuable prize to the accused than even a pardon, since he may be guilty and undeserving thereof; yet, in the view of the authorities concerned, the one interest (equality before the law) will have to yield to the other (safeguarding the security or existence of the State).

          The above situation was deliberated in the case of Livni v. State of Israel [21], where Justice Barak commented as follows (at p. 736):

         

Once the court has decided that the evidence should be disclosed, the prosecution is faced with the dilemma of deciding whether or not to continue with the criminal proceedings. If the trial continues, the prosecution will have to disclose the evidence; if the prosecution believes that disclosure of the evidence will endanger the security of the State, it may have to stay the proceedings and sometimes even cause the accused to be acquitted. Thus, whereas initially the conflict was between the need to disclose the evidence in the interest of doing justice, and the need to keep it privileged in the interest of State security, we now find - upon the decision of the court - that the conflict is between the need to proceed with the trial by way of disclosure of the evidence, and the need to keep the evidence privileged by way of the discontinuance of the trial. The former conflict is resolved by the Judge in adoption of the procedure prescribed in sec. 44(a) of the Evidence Ordinance; the latter conflict is resolved by the prosecution within the framework of its general discretion in the conduct and stay of criminal prosecutions.

 

Equally in point are these remarks of Barak J. in continuation (at p. 735):

 

On the other hand, there is the consideration that it is sometimes in the public interest to keep the material of the investigation privileged, if its disclosure may prejudice the security of the State. It is an important public interest to protect the security of the State against all harmful subversive acts, which are mostly the product of underground planning and organisation. The struggle against such harm calls for the gathering of intelligence information without its sources becoming known.... This war is being waged by the security services, whose struggle would be gravely prejudiced by the uncovering or identification and public exposure of these sources (Miscellaneous Applications 52/82)............................................ This consideration asserts itself in every country, but does so with particular sharpness in the State of Israel, whose security has been threatened ever since its establishment. We are a "democracy on the defensive"... which has to fight for its survival, not only in large-scale wars but also in the day-to-day campaigns thrust upon it by its enemies. We must not close our eyes to this bitter reality.

 

          It cannot be overlooked that those who discharge a clear security function find it especially difficult to act always within the law. The measure of departure may vary from country to country, but it exists as a fact, also in democratic regimes whose fidelity to civil rights is beyond question. In this regard Prof. B. Akzin has commented as follows ( Elements of International Politics, Akademon, 1984, in Hebrew, p. 332):

         

It should be added that while the police strives (or, at least, should strive) to act within the frame of the existing law, the intelligence and espionage services, including counter-espionage, are less punctilious about observing the law, and it sometimes happens that they knowingly and seriously violate it. Even in times of peace, let alone in times of war, they engage in acts of violence and sabotage, both in foreign countries and in their own. This reality leads to situations of embarrassment for countries which adhere to the rule of law, and places them in the dilemma of the comparative priority between the principle of legality and intelligence interests. That is no easy dilemma. If we compare the practice of some established democracies in this regard, we shall find that in the United States, for instance, the scope of intelligence operations is often (though not invariably) curtailed by the need to keep within the law, whereas in Britain and France the principle of legality does not restrict intelligence operations to the same extent (my italics - M. B. P.).

 

          Naturally, the smaller the deviation from the legal norm, the easier it would be to reach the optimal degree of harmony between the law and the protection of the State's security. But we, as judges who "dwell among our people," should not harbour any illusions, as the events of the instant case well illustrate. There simply are cases in which those who are at the helm of the State, and bear responsibility for its survival and security, regard certain deviations from the law for the sake of protecting the security of the State, as an unavoidable necessity.

         

          Barak J. has correctly pointed out in the Livni case [21] that when the two interests of a fair trial and the security of the State are competing for primacy, the conflict must be resolved. Both interests are of concern to the public, and the resolution of the conflict takes different forms in different countries, the form sometimes changing within the same country. He added that

 

this struggle between the conflicting interests is particularly sharp in Israel, since on the one hand we are insistent upon fairness in criminal proceedings and maintaining public confidence in them.... while on the other hand we are subject to considerable security risks, which have beset us for a long period (ibid., p. 735).

 

          It is true that when the issue of privileged information arises in the course of a trial, the conflict between the two interests is resolved by a Supreme Court Justice (who is not hearing that particular case). But even when he rules that the evidence must be disclosed, that is not the end of the matter, for such disclosure may be avoided by a discontinuance of the trial, leading even to the acquittal of the accused.

          By analogy it seems to me that a decision by the Attorney-General to refer a complaint to the police - despite the objections of the Executive authorities (in our present context, the inner Cabinet) that so to do would harm security interests - is also not necessarily final. There would be nothing improper in the Attorney-General's attitude that an investigation should be conducted notwithstanding the advice given him to the contrary, but equally there is no ground for questioning a resolution of the dilemma by way of its referral to the President as the Head of State - the symbol of the people whom he represents. I do not hold that the only course open to the Executive in the above circumstances, is for the Government to dismiss the Attorney-General, for his attitude is a legitimate one, and he may properly adhere thereto. Nor, by the same token, is any injury done to the standing of a Supreme Court Judge who has ruled that the evidence in question should be disclosed. The same may also be said of the authorities entrusted with the security and survival of the State, and who bear primary responsibility for this onerous task. In the present case it may be presumed of the President that he properly considered all aspects of the dilemma, and so it indeed appears from his public statement quoted in the judgment of Shamgar P. He mentioned his understanding of the opposing viewpoint, but was convinced that the interests of security should prevail. My respected colleagues and I all agree that if a presidential power to pardon before conviction exists, the considerations weighed by the President at the time of granting the pardons are valid.

 

          At the same time, however, it is necessary to stress the gravity of the offences disclosed before us, the nature and quality of which should alert us to the need for a thorough review of the security establishment, with a view to the determination of just norms and directives as far as this is possible.

         

          Justice Barak concedes the possibility of a valid presidential power of pardon before conviction, for exercise on rare occasions alone, but holds this to be undesirable as likely to increase in frequency and become the norm. He is accordingly deterred from building constitutional norms on what he regards as hope alone. With all due respect, I find no adequate basis for this apprehension. On the contrary, it was shown to us that the pre-conviction power of pardon has been exercised most rarely during the past thirty-five years, since the decision in A. v. the Law Council. That is no small guarantee that this will continue in the future as well, as indeed it should. Moreover, already in the Matana case, the fear of an excessive exercise of this power was allayed by Agranat D. P., in these terms (at p. 454):

         

Nor have I overlooked the fact that to endow the power in question with its "full" content may lead to its excessive use, which in turn involves the danger that the authority of the law in the eyes of the public will be weakened. My reply to this point, however, is that every instrument of pardon by the President requires the countersignature of the Prime Minister or one other Minister (sec. 7 of the Transition Law, 1949) [now sec. 12 of the Basic Law: The President of the State - M.B.P.]. This means that even if the decision to pardon or to reduce a sentence must be the personal decision of the President, it is also conditional upon the recommendation of the Minister concerned. This Minister will ordinarily be the Minister of Justice who has the means of conducting a precise investigation into the circumstances of the case before submitting his recommendation to the President. It is clear that this recommendation, and therefore the decision to pardon as well, are subject to review by the Knesset and it is this possibility which must be regarded as the guarantee laid down by law against the danger referred to.

 

          There is therefore someone who is answerable to the Knesset (the Prime Minister or some other Minister) and this safeguard is now fortified by the possibility of challenging the pardoning decision indirectly. Another important factor is the special status of the President as representing the people and standing above political or public controversy. The State President presumably weighs all necessary considerations before deciding to exercise his power to grant a full pardon, whether before or after conviction. This is a power which has to be most rarely exercised. The pre-conviction pardon was not designed for the purpose of redressing an injustice done to the person pardoned, for the fact of his guilt is taken for granted and he is assumed to have committed the offence attributed to him (by the police or the prosecution). What has to be weighed, therefore, is the seriousness of the offence against some other interest - humanitarian, security, and the like. In other words, the pre-conviction pardon always entails a conflict between the interest of equality before the law and some other, vital, extraneous interest. This fact acts greatly to restrict the range of cases in which the exercise of this power will be justified.

 

          A constitutional directive gives expression to the will of the people, to its "credo." If under a directive of this kind the power to pardon offenders has been conferred on the President, the latter must be seen as the proper authority for the discharge of this difficult task (with the countersignature of the Minister concerned, who is also answerable to the Knesset, and subject further to indirect judicial review of the President's decision). In those cases where the offender benefits from a pardon, though not for the reason of his innocence of the charge but for the protection of a higher interest - whether before or after conviction - the principle of equality before the law will well be breached, but this will happen also when, for example, an acquittal results from the ruling of a Supreme Court Judge that privileged information be disclosed, in the circumstances outlined above.

          My abovementioned remarks as to the President being the ideal authority to grant a pardon, find support in the following statement of an American authority quoted in the judgment of Shamgar P.:

         

...Crime is an offense against the people, prosecuted in the name of the people, and the people alone can bestow mercy by pardon... the people may confer the pardoning power upon any officer or board that they see fit ( Am. Jur., at p. 10).

 

          Like Justice Shamgar, I believe that the decisive factor is not the rank of the State President within the Executive hierarchy, but the fact that he symbolises the State and represents the people in holding and exercising the power of pardon .

          An undesirable exercise of the pardoning power must be avoided at all times, whether it takes the form of an uncontrolled or unjustifiable remission of sentence, or the grant of a full pardon after conviction. A reduction of punishment granted one offender but not another in comparable circumstances (so we assume), amounts naturally to a discrimination between equals. An ill-timed pardon, or one granted on grounds already deliberated by a judicial tribunal, is tantamount to an intervention in the domain of the judicial authority. It has to be borne in mind that the facilities available to the court - rules of procedure and evidence for the greater part determined by legislative means and partly by judicial means - offer the most effective may of establishing the truth and ensuring a fair trial. The reversal by non-judicial means of a judicial decision, particularly in an age when a retrial is possible, is a process the retention of which may well be questioned. But that is a matter for the lawgiver. What concerns us here is that the grant of a pardon for reasons other than the correction of an injustice, and involving a conflict between the principle of equality before the law and some other vital interest, invokes a power which should rarely be exercised, and only after much careful consideration.

 

          (c) From the aspect of the separation of powers, the President must be seen as holding a power termed "residuary" (by Justice Barak) or "reserve" (by Justice Agranat in the cases of A. v. the Law Council and Matana ). It is right that the power remain of such a nature, and that the President refrain from exercising it as long as some other authority is still competent to act in the desired direction.  In his judgment (par. 25), Justice Barak cites the example of a pardon granted after conviction but before sentence is passed. I hold, unlike my learned colleague, that in this case the power itself is there, but its exercise (the grant of a full pardon alone is possible at this stage) would entail a gross interference with the judicial function and a possible lowering of its prestige. The same applies when a pardon is granted where the possibility of a retrial exists. Like the President, Justice Shamgar, I would not discount the need for a change in the existing constitutional arrangement on the subject, perhaps along the lines proposed by legal scholars such as Professor Feller.

 

          (d) Justice Barak states that a pardon is given without publicity, whereas a stay of criminal proceedings is manifest and publicly known. I believe this picture should be put into its proper perspective.

          (1) The Attorney-General's decision to stay proceedings must be reasoned, and conveyed to the complainant (pursuant to sec. 63 of the Criminal Procedure Law, Consolidated Version). Information concerning the decision must not, however, be disseminated among the general public, but may only be furnished to certain specified authorities consistently with the provisions of the Crime Register and Rehabilitation of Offenders Law, 1981 (see sec. 11(a) thereof). It may be noted that these authorities are mostly public organs (the Attorney-General, the police, the General Security Service, and others).

          (2) As regards a pardon, the initiative is usually taken by the Ministry of Justice and the warrant requires to be countersigned by the Prime Minister or another Minister, normally the Minister of Justice. In case of complaint originally lodged with the police, it is clear that the fact of the pardon will also be brought to its notice, if it has to discontinue the investigation. Such discontinuance would also obligate the police to notify the complainant accordingly (sec. 63 of the Criminal Procedure Ordinance, Consolidated Version). There may be some difference in the measure of disclosure occasioned in each of the two cases, but the gap should not be exaggerated.

         

6. With reference to the petitioners' prayer concerning investigation of the complaint lodged with the police, I concur in the opinion of my learned colleagues that at this stage the court should rest content with the Attorney-General's intimation that the whole incident will be fully investigated. The petition, therefore, should be dismissed in this regard.

          It has occurred to me that this result - dismissal of the prayer regarding the investigation - might have the effect of converting an indirect challenge of the pardons into a direct one, which would not be permissible under the existing law.  I have not, however, delved too deeply into the question and, having regard to the attitude of my colleagues, have likewise preferred to deal with the question of the inherent validity of the pardons.

 

7. Having affirmatively answered the question as to the President's power to grant the pardons here deliberated, I must now deal with the second question confronting us, namely: were the requirements for the grant of such pardons satisfied?

          I should state that I have found the Warrants of Pardon to provide only a general description and not to be sufficiently particularised, though less so in relation to the Head of the General Security Service. In the latter case it is recorded that the pardon was to extend to all the offences "connected with the incident called 'bus no. 300' and occurring on the night between 12 April and 13 April 1984, whether committed on the day of the incident or subsequently in connection therewith until the date of this Warrant." In the remaining Warrants it was stated that the pardon extended to all the offences "connected with the so called 'bus no. 300 incident,' and committed from the time of the incident on the night between 12 April and 13 April until the date of this Warrant." On its own this would be an inadequate particularisation, but with the declarations we have of the pardoned persons, together with the contents of the pardon applications as well as the subsequent Warrants, we now have sufficient particulars to identify the offences concerned. I need hardly add that the pardon extends solely to those offences and none other.

          As to the State President's grounds for granting the pardons, we ruled earlier (on 1 July 1986) that there was no need for any declaration to be lodged concerning his reasons for deciding as he did.

          From the material before us it may be learned that the negotiations with the President were commenced some considerable time before the pardons were granted, and only the final, formal stage was completed in haste, on account of the pressure arising from the surrounding circumstances. It has been declared that all the particulars relating to the incident were explained to the President, and I have no reason to doubt the truth thereof.

         

8. In conclusion, I must emphasise that I, like my respected colleagues, have endeavoured to deal with the central issue - the President's power of pardon before conviction - in isolation from the stormy public controversy aroused by this unfortunate incident. Such detachment is enjoined by our judicial task, which we must fulfil to the best of our understanding. We are obliged to adopt an attitude, even with regard to matters of public controversy and even though part of the public may not approve of that attitude. What is conclusive is the court's decision, as distinct from its views (by way of analogy, see Shalit v. Minister of the Interior [22], at p. 520, per Witkon J.).

 

9. For the reasons given above I concur in the judgment of the respected President, Justice Shamgar, and in his conclusion.

 

BARAK J .

 

          I am of the opinion that the pardon granted by the State President to the Head of the General Security Service and three of his assistants is null and void, for lack of a presidential power so to act. It would follow that, as intimated by the Attorney-General, the investigation is to continue.

         

A. Our Judicial Function

 

1. After carefully perusing the judgment of my respected colleague, President Shamgar, I find myself agreeing with some of his opinions and not with others. The whole issue is important, lying as it does at the heart of our constitutional life. Interwoven with the immediate problem of the presidential power of pardon and the manner of its exercise, are questions of the rule of law and its supremacy. All these we shall examine from the legal standpoint. The issue has provoked a stormy public reaction, but we have not allowed that to influence our decision. We function in accordance with constitutional criteria and fundamental legal principles which reflect the "credo" of our national life. It is not passing moods that guide our approach, but fundamental national perceptions as to our existence in a democratic state. This guideline was succinctly stated by Shamgar P. , in Neiman v. Chairman of  1lth Knesset Elections Central Committee [19], in these terms (at p. 259):

 

Judicial decisions in constitutional matters, even in difficult cases, should properly be founded and shaped according to principles rather than considerations of policy structured according to what is viewed as desirable and responsive to the need of the hour or the feeling of the majority.

 

          We are aware of the public controversy that is raging around this matter, and in the dynamics of political life our judgment here may well come to be used as a lever in the struggle between the opposing political forces. That we regret, but we have to fulfil "our function and our duty as Judges," as was pointed out by Landau D.P. in Duikat v. Government of Israel [23], at p.4:

         

It is still much to be feared that the court may come to be seen as having abandoned its proper place and descended into the arena of public discussion, and that its decision will be enthusiastically welcomed by a section of the public while another section loudly and utterly rejects it. In this sense I see myself - as one whose duty it is to decide in accordance with law any matter brought before the court according to law - constrained to proceed undeterred in the discharge of my task. Even so, I know full well that the wider public will look not to the legal reasoning but to the final conclusion alone, with the attendant risk of damage to the rightful standing of the court as an institution beyond the divisions of public controversy. But what shall we do, if that be our function and our duty as Judges.

 

          We are an arm of government, whose task it is to review the functioning of the other authorities, so as to ensure the government's adherence to the rule of law. These arms of government are of high status, but the law stands above them all. We should be failing in our judicial duty, were we not to pass under review, within the framework of petitions properly lodged, the activities of other State authorities in the circumstances disclosed in the petitions before us. I propose first to examine some of the questions on which I share the opinion of Shamgar P., and then to deal with the State President's power to grant a pardon before conviction. Following that, I shall endeavour to clarify my reasons for dissenting from the judgment of my learned colleague, Shamgar P., and shall conclude with some general remarks pertaining to the functioning of the State authorities in the present case. I regret the length of this judgment, but I did not have enough time to write a shorter one.

         

B. Locus Standi

 

2. Like Shamgar P., I hold the petitioners to have due standing to approach the court in the present matter. I do so for various reasons. In the first place, a number of persons lodged complaints with the police relating to offences committed in the "bus no. 300 incident." Under sec. 58 of the Criminal Procedure Ordinance (Consolidated Version), it is open to "any person" to lodge a complaint with the police, and the complainant must be informed of a decision not to investigate the same (sec. 63). He may then lodge an objection with the Attorney-General, whose decision is subject to judicial review and the complainant certainly would have standing in such a petition (Ashkenazy v. Minister of Defence [24], at 371). It is true that not all of the petitioners lodged complaints, but their standing before the court may be recognized on a second ground, which I shall now state.

          When there arises before the Supreme Court a legal problem of constitutional import, the court will take a liberal view in matters of legal standing:

 

in such cases it is desirable to grant access to the court, without examining too carefully the interest at stake, provided this is in furtherance of the rule of law ( Segal v. Minister of the Interior [17], at p. 443).

 

          The rule of law would be so served in the present case, having regard to the allegation that the Head of the General Security Service, and a number of his assistants, committed very serious offences involving loss of life and interference with the processes of investigation and the administration of justice. According to the material before us, these allegations - raised by the Attorney-General, Prof. Zamir - were not being investigated, though such investigation was said to be called for. The petitions accordingly involve basic questions of the rule of law, of equality before the law and of the susbservience of the principal centres of power in the State to the law as it stands. In these circumstances it is fitting that the petitioners be recognized as having sufficient standing to approach the court as they have done.

 

C. The Petition Concerning the Investigation

 

3. Some of the petitioners have concerned themselves with instigating a police investigation into the "incident." In a written communication received by us from the Attorney-General (on 15 July 1986), it was intimated as follows:

 

The attitude of the Attorney-General, communicated here with the confirmation of the Inspector General of Police (the remaining respondents have no standing whatever as regards the investigation), is that the police will investigate the said complaints pursuant to its duty under sec. 59 of the Criminal Procedure Law (Consolidated Version) 1982.

 

          In his oral argument before us, the Attorney-General repeated his above intimation in these terms:

         

There will be a police investigation. The investigation will be conducted without qualification or reservation, until its conclusion, and will encompass all levels from top to bottom, including the political hierarchy. It is not intended to leave any matter uninvestigated, nor to exclude any person from the investigation.

 

          The Attorney-General further emphasized that the investigation had already commenced, and in that situation, he argued, there was no room for confirmation of the order nisi - as prayed for by some of the petitioners - but the petitions, so far as they related to the investigation, should be dismissed. I agree with Shamgar P. that the Attorney-General's view should be sustained.

         

D. The State President as a Respondent

 

4. A number of petitioners joined the State President as a respondent. We ordered that his name as a respondent be deleted. As was pointed out by Shamgar P., this ruling was dictated by sec. 13(a) of the Basic Law: The President of the State, under which "the President of the State shall not be amenable to any court or tribunal... in respect of anything connected with his functions or powers." The President's act of pardon although, in my opinion, ultra vires, was nevertheless "connected with" his functions or powers, so that this court has no jurisdiction to entertain any direct challenge against his conduct. In the criminal appeal in Matana v. Attorney-General [25], Berinson J. noted (at p. 979) that when the President purported to act within the scope of his functions and powers, he would, if he exceeded these, be subject, like everyone else, to the laws of the State, and "amenable to the jurisdiction and authority of the courts." It seems to me, however, that even when the President exceeds his powers, but does so in a matter connected with his functions and powers, in good faith and in furtherance of what he considers to be the discharge of his duties - this court will have no jurisdiction over him. This limitation falls away where it is not sought to render the President answerable directly, but only to challenge indirectly the legal competence of a presidential act. The question arose in Bar Yosef v. Minister of Police [12], where the Supreme Court held as follows:

 

We accept that the State President has a discretion in the exercise of his power under sec. 11(b) of the Basic Law: The President of the State, and that this discretion - as distinct from the President himself - is, in proper circumstances, subject to indirect judicial review.

 

          This perspective emerged from the approach of the Supreme Court in the abovementioned criminal appeal in Matana v. Attorney-General [25], where Berinson J. commented thus (at p. 786):

         

If indeed the President lacked authority to act as he did, there would be no need in the present case to disqualify the act itself. It would suffice for us to refrain from granting it validity and from aiding in its implementation, so far as this depends on us.

 

Elsewhere in the judgment, he added:

 

this does not mean that the legality of his official conduct and acts which may be prejudicial to the individual, cannot be indirectly reviewed without the President himself appearing as a party.

 

          In the Attorney-General's original reply to the petitions (dated 30 June 1986), he noted that "once a pardon has been granted to all the members of the General Security Service who are mentioned as suspected of having committed the offences attributed to them, there is no longer any ground for investigating this complaint." This approach is challenged by the petitioners, and incidental to this main line of attack (against the Attorney-General), they are also challenging the President's pardoning decision. That they are entitled to do.

          Such indirect judicial review is essential, for in its absence the power becomes unlimited in practice. Unlimited powers wielded by government authorities are alien to a democratic regime. Absolute powers, as Justice Douglas has rightly pointed out, are "the beginning of the end of liberty" (see New York v. United States [60], at p. 884, which statement was cited by this court in Kahana v. Speaker of the Knesset [26], at p. 92). The same is true of the pardoning power, which is not publicly exercised, the exercise of which need not be reasoned and which is little known to the public (see M. Gottesman, "Arbitrariness & Sympathy: The Criteria for Granting a Pardon," Mishpatim 1 [1968], 211; R. Gabison, "Arbitrariness & Sympathy: A Further Note," ibid., p. 218; D. Friedman, "Amnesty: Disclosure of Reasons," Hapraklit 25/1 [1969], 118; M. Ben-Ze'ev, "Matters of Amnesty," Hapraklit 25/2 [1970], 368). Such a power, if not subject to judicial review - even if only indirect - poses, upon its improper exercise, danger of the kind most destructive to all orderly government. Bentham has clearly outlined this danger:

 

From pardon-power unrestricted, comes impunity to delinquency in all shapes; from inpunity to delinquency in all shapes, impunity to maleficence in all shapes; from impunity to. maleficence in all shapes, dissolution of Government; from dissolution of Government, dissolution of political society ( The Works of Jeremy Bentham, ed. Bowring, New York, 1962, vol. 1, p. 530).

 

          These are strong words, perhaps too strong, but they speak eloquently of the need for judicial review. Since the lawgiver left no opening for challenging directly the President's exercise of this power, it is well that we do what is next best, and exercise indirect judicial review.

         

E. The Pardoning Power

 

(1) The Matter in Issue

 

5. I now come to the central issue in the petitions before us. This issue has a twofold aspect: first, does the State President have the power to pardon someone before he has been convicted? second, assuming this power to exist, were the conditions for the grant of a pardon to an unconvicted suspect satisfied in the instant case? I am of the opinion that the State President lacks the power to pardon before conviction, and it is therefore unnecessary for me to deal with the latter question concerning the propriety of the President's exercise of his pardoning power.

          As regards the first aspect, i.e. the existence of a presidential power of pre-conviction pardoning, the question is by no means an easy one, and has been the subject of keen controversy. In the circumstances, the proper path to have followed seems to be that appointed by the lawgiver, in see. 32(a) of the Consolidated Version of the Courts Law of 1984, namely:

         

Where a petition for a pardon or for the reduction of a penalty has been submitted to the President of the State, and a question arises which in the opinion of the Minister of Justice deserves to be dealt with by the Supreme Court, but which cannot provide a ground for a retrial under section 9, the Minister of Justice may refer such question to the Supreme Court.

 

          The circumstances were pressing, however, and the opportunity was missed. We have no option, therefore, but to examine the validity of the power within the framework of a petition to the High Court of Justice.

         

          (2) "To Pardon Offenders"

         

6.       In principle, the starting point for our inquiry is sec. 11(b) of the Basic Law: The President of the State (the "Basic Law"), which reads:

 

The President shall have power to pardon offenders and to lighten penalties by the reduction or commutation thereof.

 

          To ascertain the meaning of the expression "to pardon offenders," we must, as with any other act of interpretation, start with a linguistic inquiry. I believe the question whether the terms "to pardon" and "offenders" in themselves provide an answer to our inquiry, must be answered in the negative. In Israel legislation the term for pardon* does not have one single meaning only. Thus besides its use in sec. 11(b) of the Basic Law, it is also used in Knesset enactments to designate amnesty (thus the General Amnesty Ordinance of 1949, the Amnesty Law of 1967). There is no disputing that the two kinds of pardon differ from each other. The presidential pardon is an individual act, whereas the Knesset amnesty is a general, all-embracing act. The two pardons differ also in their consequences. Despite these differences between the two forms of pardon, the lawgiver has used the same term to describe both. In fact, the term haninah has not acquired any scientific precision or conceptual clarity in Israel, and the term on its own does not enable us to define its meaning. The reasons for this uncertainty - which is not unique to Israel - are hinted at by Dr. Sebba, in these terms (On Pardon and Amnesty, at p. 140):

         

The lack of clarity on this matter stems from a number of factors, but mainly from a confusion in the choice of terminology, historical changes in the development of these institutions, and a lack of definition of the functions of pardon in its different forms - both as regards their objectives and their legal consequences.

 

          It is quite clear that the term "to pardon" in the Basic Law, relates only to individual pardon. On the other hand, the "pardon" mentioned in sec. 149(9) of the Consolidated Version of the Criminal Procedure Law of 1982, would seem to embrace both individual pardon and general amnesty, but apparently refers mainly to the latter since diffferent situations of individual pardon (in the context of preliminary pleas in a criminal trial) are already covered in sec. 149(5) of the Law, which mentions "a former acquittal or former conviction."

          The term "pardon" (haninah) seems, therefore, to have no uniform meaning in Israel law. We have not yet evolved for ourselves an operative jurisprudence the reflective processes of which would generate "jurisprudential" expressions such as "pardon," having a recognized meaning for the entire legal community. Other countries - among them France, Italy and Germany - are more fortunate in this respect, since their own terms for the concept of a pardon granted by the authority at the head of and symbolizing the State (grace, grazia, Begnadigungsrecht), are all self-understood as relating to (individual) pardon after conviction. We have yet to reach such unanimity in Israel, and here, as already indicated, the term haninah encompasses both pardon and amnesty. As regards the question whether an individual pardon - with which alone sec. 11(b) of the Basic Law deals - has any reference to an unconvicted suspect, our own operative jurisprudence offers no answers. That leaves us no alternative but recourse to judicial interpretation, from which there shall evolve, in the course of time, the kind of operative jurisprudence that is responsive to the existing conceptual need.

 

          (3) "Offenders"

 

7. We have next to examine whether the term "offender" throws any light on our inquiry. Can an unconvicted suspect be deemed an "offender"? This question was discussed by Prof. Klinghoffer, who wrote as follows" ("Lectures on Amnesty," at p. 5):

 

The Law mentions the power to "pardon offenders." Now it is a cardinal rule in the constitutional law of Israel that a person suspected or accused of a criminal offence is presumed innocent until duly and finally convicted. That means no person is an "offender" until a final convicting judgment has been given against him.

 

The same approach was adopted by the then Attorney-General, M. Ben Ze'ev, when the Constitution, Law and Justice Committee of the Knesset was considering the proposed Basic Law: The President of the State. He said:

 

The designated meaning of the word [offender], in my opinion, is someone who has been convicted in a court of law. For if not so, we shall come into conflict with the cardinal rule in our system that a person is presumed innnocent until duly convicted according to law, and anyone might come to the President and say: "I am under suspicion, grant me a pardon" (quoted in the opinion of the Attorney-General, Prof. Zamir, dated 15 June 1985 and appearing in directive no. 21.333 of the Attorney-General's Directives).

 

          I naturally accept that every convicted person is an offender, but it does not follow that someone who has not yet been convicted cannot for the purpose of some particular enactment likewise be deemed an offender (cf. Gold v. Minister of the Interior [27]). Thus, for example, when sec. 3 of the Police Ordinance (New Version) speaks of the employment of the police in "the apprehension and prosecution of offenders...," it is clear from the context that the term "offenders" specifically excludes convicted persons; someone who has already been convicted of a particular offence may not be "apprehended" by the police or "prosecuted" for that same offence. Yet a convicted person is certainly an "offender" for purposes of the Basic Law. In fact, the lawgiver has made a far from precise use of the term, and has not always distinguished clearly between persons suspected, accused, or convicted of a criminal offence - having sometimes included all three possibilities within the purview of this term.

         

8. The term "offenders" raises further questions about its meaning. It will be found amenable to more than one meaning in the context of sec. 11(b) of the Basic Law. Besides certainly embracing someone who has been duly tried and convicted, in a final judgment (as distinct from the meaning of the same term in the new version of the Police Ordinance), does it also include someone who has been convicted in a judgment that is not yet final? And what is the situation of a person who has not been convicted but in respect of whom the court has held "the charge proved" and issued a probation order under sec. 1 of the Probation Ordinance (New Version) 1969? And in particular, what is the situation of  someone who has not yet been charged at all, or who has been charged but whose trial has not yet reached completion? "Offender" is therefore a vague term, ambiguous and open to different interpretations in different contexts.

 

(4) The Legislative Purpose

 

9. It is now clear that a linguistic examination of the term "offender" does not suffice to dispose of our interpretative problem - as indeed it rarely should be expected to do (Kibbutz Hatzor v. Rehovot Assessment Officer [28], at p. 74). Among the different possible meanings we should select that which ensures attainment of the legislative purpose - "the Law is an instrument for the achievement of a legislative purpose, and therefore needs to be construed according to its inherent purpose" (per. Sussman J. in Estate Late E. Bergman v. Stossel [29], at p. 516). This purpose can be ascertained, first and foremost, from the intention of the lawgiver. The legislative history of an enactment is a source from which one may ascertain the legislative purpose.

 

(5) The Intention o1the Legislature

 

10. In order to ascertain the intention of the Legislature when investing the State President with the power "to pardon offenders," we must return to the Transition Law. It represented the first Israel Law to deal with the presidential powers. In sec. 6 of the Transition Law the Presidential office had been established, inter alia, with the "power to pardon offenders." The objects of this directive were elucidated by Agranat D.P. (as he then was) in the rehearing in Attorney-General v. Matana [3] (at p. 441). He pointed out that as the basis for its debates at the time, the Constitution Committee of the Provisional Council of State relied on the draft constitution of Dr. L. Kohn and a memorandum submitted by E. Vitta. I have carefully considered all this material, from which it clearly transpires that it was not the pardoning powers of the English Monarch, nor those of the American President, the High Commissioner for Palestine, or the Head of any other State, that were envisioned by the draftsmen of the Transition Law as the model for the powers of our own President. Dr. Kohn did not elaborate on the presidential pardoning power, beyond a bold statement (in sec. 59 of his proposal) that the President be reserved the right to grant a pardon. Vitta changed the wording slightly, proposing that the presidential functions include the grant of pardon and the reduction of punishments. Commenting upon Dr. Kohn's proposal, Vitta opined that the presidential power be restricted to individual cases, with a power of general or even partial amnesty entrusted to the Legislature alone, for implementation by way of a formal statute. In a comprehensive debate on the President's proposed status conducted by the abovementioned Constitution Committee, the presidential powers in France, Czechoslovakia and Switzerland were mentioned, slight reference was made to the King of England, while the American President was only hinted at. With regard to the power of pardon, there is recorded only Z. Warhaftig's opinion that the directive be phrased to empower the President "to pardon and reduce punishments" (Proceedings of the Constitution Committee of the Provisional Council of State, Debate on the Executive Authority). The proposal was adopted. In introducing the Bill for the Transition Law, 1949, before the Knesset, Y. Idelson made only a brief statement, and the subsequent debate on the presidential powers was also short. Neither the English King nor the High Commissioner was mentioned in the context of pardon, while the office of the American President was mentioned only as differing from our own form of presidential office. Our survey accordingly leads to a twofold conclusion: first, we lack full information concerning the extent of the pardoning power which the Knesset sought to confer on the President at that time; second, it is clear that the Knesset did not consider imitating any particular model of the power, and certainly not the power of the English King, the High Commissioner or the American President.

 

11. The provisions of sec. 6 of the Transition Law were repealed with the enactment of the Basic Law. We have no access to the debates of the Knesset Constitution, Law and Justice Committee, which are closed, but I am prepared to accept the following account thereof given by the Attorney-General, Prof. Zamir, who apparently had the opportunity to peruse the minutes of the relevant proceedings (see his abovementioned opinion):

 

The Legislature's intention may also be gathered from the preparatory stages of the Law. The question before us was not discussed when the Knesset plenum debated the Bill for the Basic Law: The President of the State, but it did arise in a discussion of the Bill at a meeting of the Constitution, Law and Justice Committee (on 5 February, 1964). It appears from the discussion that all the speakers considered the President empowered to grant a pardon to convicted offenders only. The then Attorney-General, Mr. M. Ben Ze'ev, said at that meeting: "The designated meaning of the word [offender], in my opinion, is someone who has been convicted in a court of law. For if not so, we shall come into conflict with the cardinal rule in our system that a person is presumed innocent until duly convicted according to law, and anyone might come to the President and say: 'I am under suspicion, grant me a pardon.' " And Knesset Member, H. Zadok, remarked at the end of the discussion on this point: "It seems to me we have no difference of opinion on the substance of the matter. We intend to empower the President to pardon persons who have been criminally tried and convicted."

 

          This is further evidence that it was not the pardoning powers of the English Monarch, the High Commissioner, or the American President that served as a basis for the above Committee's discussions. On the contrary, the subjective thought of those who dealt with the question was -"We intend to empower the President to pardon persons who have been criminally tried and convicted".

         

12. Speaking for myself, I would not attribute too much weight to the factor of the legislator's intention in the instant case. The legislative history of the Transition Law offers us scant details and hardly advances our inquiry. As for the Basic Law, we know the opinions of members of the Knesset Committee who dealt with the Bill, but not what the Knesset itself thought. Actually, as faithful interpreters of the law, it is our task to act by way of "analysis of the law and not psychoanalysis of the lawgiver" (Agudat Derekh Eretz v. Broadcast Authority [30], at p. 17). We must not seek to establish a Knesset Member's attitude towards a particular problem confronting us from the legislative history of an enactment. The solution of such problems is our responsibility, and ours alone (FIatto Sharon v. Knesset Committee [31], at p. 41;"Kach"Faction v. Chairman of the Knesset [1], at p. 141). Elsewhere, I have had occasion to comment thus:

 

The Judge does not seek a concrete answer to the practical problem he has to decide in the history of a legislative enactment. The court is not interested in the specific pictures and concrete likenesses contemplated by the Legislature. In the legislative history of an enactment we seek its purpose; we seek the interests and objectives from which, after compromise and balance between them, there was distilled the policy underlying the norm which is being construed. What we seek is the fundamental perception rather than the individual application - the abstraction, the principle, the policy and purpose. We are interested in the Legislature's concept as to the purpose of the Law, and not in its conception as to the resolution of the specific dispute before the court ("Of Ha-Emek"v. Ramat Yishai Local Council [32], at pp. 143-144) .

 

          We must accordingly continue our search for the legislative purpose behind the statutory provision concerned.

         

(6) The Legislative Purpose: a "Spacious View"

 

13. The proper path to follow was indicated by Agranat D.P. (as he then was) in the Matana rehearing [3]. Referring to the Transition Law, which was then in force, Justice Agranat observed (at p. 444):

 

The "omission" in which my learned colleague found the expression of the desire of the Israel Legislature to cut down the provisions of Art. 16 of the Order in Council and therefore to restrict the President's power of pardon, is in no sense proof of any such intention. It is more correct to say, as was said by Smoira P. in another context... that the Israel Legislature "neither copied nor omitted, but built its law as an independent structure."

 

          The Transition Law was indeed an independent Israel Law, as is the Basic Law which followed it, and the presidential powers conferred thereunder are autonomous and original. The Israel legislator, far from "copying or omitting" anything, fashioned by its own means the constitutional framework for our national life, producing an "independent structure" which must also, therefore, be construed in the same way.

         

14. We are in fact dealing with an independent Israel Law of constitutional content. This element is of basic importance in the construction of the Law, as was pointed out by Agranat D.P. ([3], p. 442) with reference to the statement of Justice Frankfurter (in Youngstown Sheet and Tube Co. v. Sawyer [51]), that when a matter touched a document which laid down the framework of the government of the State, the court was to take a "spacious view of the powers herein prescribed." I myself followed this approach in the Neiman case [19], where I made these observations (at p. 306):

 

Basic provisions must be construed according to a "spacious view"- to use an expression of Justice Frankfurter in Youngstown Sheet and Tube Co. v. Sawyer, quoted by Agranat D.P. in the Matana case - and upon the understanding that we are dealing with a directive which determines the national pattern of life. A basic constitutional directive is not to be construed in the same way as an ordinary legislative provision. It was Chief Justice Marshall of America who, in the early stages of the shaping of the American constitutional perspective, stated that in interpreting the Constitution it had to be remembered that it was no ordinary document -"it is a constitution we are expounding" (M'Culloch v. Maryland). We are concerned here with a human endeavour which has to adapt itself to the changing realities of life. If we have said of an ordinary Law that it is not a fortress to be conquered with the aid of a dictionary, but a frame for a living legislative idea (Cr. A. 881, 787/79, at p. 427), how much more should we be so guided when engaging in the interpretation of directives of a constitutional nature.

 

          Constitutional enactments must indeed be interpreted with the structure of the whole system in mind. A Law is "a creature living within its environment" (per Sussman J. in Shalit v. Minister of the Interior [22], at p. 513), and the "environment" of a constitutional Law is, inter alia, the other constitutional enactments which determine the essential character of the regime. Every constitutional enactment is but a building block in the overall structure, which is erected upon given foundations of government and law. Hence, when construing a constitutional enactment, it is the judge-interpreter's function to bring the same "into harmony with the foundations of the existing constitutional regime in the State" (Justice M. Landau, "Rule and Discretion in the Administration of Justice," Mishpatim 1 (1969), 292). That expresses the real importance of Justice Agranat's perception that a "spacious view" must be taken of a constitutional enactment.

         

15. To take such a "spacious view" when construing the presidential power "to pardon offenders," means to view the presidential powers as part of the general distribution of powers among the State authorities. The presidential power of pardon must be seen as a component in the complex of governmental powers comprising the "constitutional scheme," as was stated by Justice Holmes in Biddle v. Perovich E56] (at p. 486):

 

A pardon in our days is not a private act of grace from an individual happening to possess power. It is a part of the constitutional scheme.

 

The pardoning power forms part of the fabric of our democratic life: it flows from the regime's republican system of power allocation. This aspect was elucidated in the American case of Schick v. Reed [58], where it was held per Marshall J., at p. 276):

 

The references to English statutes and cases are no more than dictum: as the Court itself admonishes, "the power [of pardon] flows from the Constitution alone"... .Accordingly, the primary resource for analyzing the scope of Art. II is our own republic system of government.

 

16.     What conclusions are to be derived from the above mode of interpretation, according to which the presidential pardoning power must be "spaciously" viewed against the background of our own constitutional structure? Two main conclusions seem to be warranted. First, for the purpose of construing the President's pardoning power, we cannot be guided by the powers of pardon conferred on officeholders in other countries whose status, in the devolution of powers in their respective countries, differs materially from that of our own President. We may, however, by the same token, learn about his pardoning power by comparing it with such powers conferred on like officeholders in other countries of similar constitutional structure. The second conclusion is that whatever the scope of similar powers in other countries, we must in the final analysis construe the State President's own power against the domestic constitutional background, and in the end we can gain but limited interpretative guidance from the situation in other countries.

 

(7) The Legislative Purpose: Guidance from England?

 

17. Let us examine the power of pardon of the English Monarch. This power had its origin in the seventh century during the reign of the Anglo-Saxon kings (see L. Radzinowicz, A History of English Criminal Law, London, 1948, vol. 1, pp. 107-137). These kings had the power of life and death:

 

the power to take life included the power to save it... and the pardon power was identical in scope with the power to punish (Boudin, "The Presidential Pardons", at p. 9).

 

          This basic standpoint prevailed for a long period of time. Thus in 1686, an English court held that the Kings of England were absolute sovereigns, that the laws were the Kings' laws and that the King had the power "to dispense with any of laws of the Government as he saw necessity for it" (Godden v. Hales [48], at p. 1051). A number of attempts to curtail the royal power of pardon were made over the years, but in essence it remained as wide as before. Its ideological foundation was the notion that the King was the "fountain of justice." He was the defender of the public and dispenser of justice; he established courts and executed the law, he prosecuted offenders and granted pardons. As Blackstone has commented (Book 1, at pp. 268-269):

         

          As the public, which is the invisible body, has delegated all its power and rights, with regard to the execution of the laws, to one visible magistrate, all affronts to that power, and breaches of those rights, are immediately offences against him, to whom they are so delegated by the public. He is therefore the proper person to prosecute for all public offences and breaches of the peace, being the person injured in the eye of the law... and hence also arises another branch of the prerogative, that of pardoning offences; for it is reasonable that he only who is injured should have the power of forgiving... of prosecutions and pardons.

 

          With the conversion of the English Crown to a constitutional monarchy, the power of pardon itself underwent no real change, although a change did assert itself as regards the exercise of the power. Thus the royal power of general pardon was recognized, but never came to be exercised in practice. The royal power to pardon before conviction has likewise remained recognized, but has not been exercised since the middle of the nineteenth century. At that time this possibility was limited to an immunity from prosecution given to someone who turned "King's evidence."

          Nowadays, however, with the development of police powers as well as the Attorney-General's power to stay criminal proceedings, and with the establishment of the office of the Director of Public Prosecutions, the power of pardon is no longer exercised even in the above exceptional circumstances. An English authority has described the situation thus (see J.L. Edwards, The Attorney-General, Politics and the Public Interest, London, 1984, at p. 414):

         

During the nineteenth century it was common practice to grant a pardon to an accomplice who was to turn Queen's evidence, but this resort to the machinery of pardons, prior to the registering of a conviction, has long since become obsolete. Where the reluctance of a witness to testify on behalf of the Crown did not stem from his being an accomplice but arose on the ground that he would incriminate himself, it was also known for the Crown to prepare a free pardon in advance, ready to be produced by prosecuting counsel. The last occasion when a free pardon was granted to a witness in these circumstances was in 1891. There is now a general understanding among British constitutional law authorities that the practice of conferring a pardon upon a principal offender before conviction has fallen into disuse.

 

          The English King's historical power of pardon is rooted in the royal prerogative, with the King perceived as the source of justice. That perception provides no guidance so far as concerns the President of Israel, as was pointed out by Berinson J. in Matana v. Attorney-General [25] (at pp. 976-977):

         

I cannot say that the Israel Legislature in conferring the power of pardon upon the President of the State in the Hebrew language, intended to include therein the full content which the concept of pardon has acquired over the ages in English law, pardon which is wholly in the hands of the Crown without reserve or limit by virtue of the ancient royal prerogative. There is no point of comparison between the status of the President in our country and that of the Crown in England. The President is a creature of statute and his powers are defined by law. Like everyone else in this country, he enjoys no rights or privileges which are not accorded to him by the laws of the State and every official act of his which exceeds the limits of the law is null and void.

 

          Unlike the English Monarch, the President of Israel is not "the fountain of justice," he does not execute the law or prosecute public offences. Accordingly, as regards the presidential power "to pardon offenders," no interpretative guidance is to be derived from the pardoning power enjoyed in principle by the English Monarch. But we could certainly be guided as to the scope of the presidential pardoning power by the practice followed by the English Monarch today. And as we have seen, this practice does not extend to a pardon before conviction, since

such practice is out of harmony with modern views as to the propriety of granting dispensation before the normal process of the criminal law has run its course (Edwards, The Attorney-General, p. 475).

 

(8)     The Legislative Purpose: Guidance from the U.S.A.?

 

18.     In the American case of Schick v. Reed [58] Justice Burger relates that when the American Constitution was under preparation, a short discussion took place on the scope of the pardoning power to be entrusted to the President. The view that it be confined to exercise after conviction only, was rejected for the reason that this would preclude the possibility of using accomplices as prosecution witnesses in conformity with the English practice at the time. The American courts have since then interpreted the President's pardoning power as being similar to that of the English Monarch. This power embraces not only individual pardon but also general amnesty, and results from the perception that the President of the U.S.A. is charged with the execution of the laws:

 

A pardon is an act of grace, proceeding from the power entrusted with the execution of the laws (United States v. Wilson [55], at p. 160, per Marshall C.J.).

 

          The customary view, which is based on dicta in a number of old cases, is that the existing pardoning power extends also to the grant of a pardon before conviction. There seem to be several reasons, however, why even the American model cannot guide us with regard to the presidential power of pardon in Israel. First, in the U.S.A. the President heads the Executive authority. Like the English King in the past, so the American President today is responsible for execution of the law, so that there is a certain logic in entrusting him with a power not to execute the law in certain cases by way of granting a pardon. That is not the situation of the President of Israel, who holds no powers so far as execution of the law is concerned. Second, the U.S. President is empowered to grant a general amnesty, also to unconvicted suspects. There is a certain logic in the contention that the authority competent to grant an amnesty to unconvicted suspects should also be competent to grant an individual pardon before conviction (see P.B. Kurland, Watergate and The Constitution, Chicago, 1978, p. 145). This argument doesn't hold good in Israel, where the President is not empowered to grant an amnesty, and from this viewpoint there is no logical basis for empowering him to grant a pardon before conviction. A third reason for distinguishing the American situation from our own is that the framers of the American Constitution were mindful of the English experience, which they themselves had shared in the colonial period. This was pointed out by Judge Wayne in Ex Parte Wells (1856) [61]:

 

At the time of the adoption of the Constitution, American statesmen were conversant with the laws of England, and familiar with the prerogatives exercised by the Crown. Hence, when the words "to grant pardons" were used in the Constitution, they convey to the mind the authority as exercised by the English Crown, or by its representatives in the colonies. At that time both Englishmen and Americans attached the same meaning to the word "pardon."

 

          A different situation has existed in Israel. As we have seen, the draftsmen of the Transition Law did not seek to emulate the experience of the English monarchy, and those who legislated the Basic Law into existence did not consider the presidential pardoning power to be exercisable before conviction.

         

19. The result is that we cannot be guided by the Anglo-American experience when seeking to construe the scope of the President of Israel's power "to pardon offenders." This does not mean that the constitutional situation in England and the U.S.A. cannot ever provide any interpretative guidance for us. On the contrary: our own interpretative processes, ever since the establishment of the State, have drawn extensively on the Anglo-American constitutional experience, and the outlook in these countries on many subjects, among them human rights, have often inspired our own approach. Yet such nourishment has to be controlled, and the inspiration can only flow from a comparison between institutions, processes and perspectives which have a common basis. Thus we too can learn from the American recognition of the fundamental human rights, since both our countries have democratic regimes committed to the rule of law and the separation of powers. That, however, does not apply to the power of pardon, which in England and the U.S.A. is based on an approach that differs entirely from our own.

 

          (9) The Legislative Purpose: Proper Guidance

         

20. The absolute French monarchy also wielded a wide power of pardon, both before and after conviction, individual as well as general. Like powers were enjoyed by other absolute monarchies in Europe. A drastic change came with the French Revolution, when the existing form of pardon was abolished in France and replaced by a more restricted form. Since then it has been customary in most of the Continental countries for a limited power of pardon - not exercisable before conviction - to be conferred on the titular, and not executive Head of State, that is to say, the person holding the powers which symbolise the State. This is the situation in modern France (see e.g. sec. 35 of the Constitution of the Fourth Republic, and see also Monteil, La grace); in Italy (see art. 87 of the new Constitution, and see also Manzini, Trattato Di Dirrito Penale Italiano, 1981, p. 510; Bortolloti, "Il principio Constituzionale Della Clemenza," Rivista Trim. Di Dir. Civ. [1978], 1681): in Germany (see sec. 60(2) of the new Constitution) and in many other countries (including Holland and the Phillipines). It is interesting to discern the same trend in the new democracies which became a part of the British Commonwealth of Nations. Thus the King of England and the Governor-General of Canada cannot grant a pardon in that country except after conviction (see. 683 of the Criminal Code of 1970). The same holds true in Australia, except in the context of persons who turn Queen's evidence. Section 72 of the Indian Constitution empowers the President to grant a pardon after conviction only (see Balkrishna, "Presidential Power of Pardon," J. of Indian Law Institute 13 [1971], 103). It might also be noted that in a number of countries (among them France, Italy and Germany) the pardoning power is constitutionally defined in general terms, while their equivalents of the expression "to pardon offenders" have been construed, in judicial decisions and by commentators, as relating solely to pardon after conviction.

 

21. I may now conveniently summarize my observations on the interpretative guidance to be derived from a review of the pardoning methods in other countries. I have sought to show that in countries where the law of pardon is not laden with historical memories from the era of the absolute monarchy or coloured by other similar influences of a bygone era, and at the head of which stands a King or President who symbolises the State, this authority holds a restricted power of pardon. The most important restriction is the limitation of the power to the stage after conviction. This conclusion does not, however, put an end to our interpretative search, for we have seen that constitutional directives require a "spacious view" in their construction. In our present context, that means we have to construe the pardoning power in the light of the general governmental structure in Israel. This I now proceed to do.

 

(10) The Legislative Purpose: General Governmental Structure

 

22. During the era of absolute rule, when the power of pardon was wielded by the sovereign himself, there would have been little point in examining the division of authority among the different governmental organs. The ruler held supreme authority, and was therefore entitled to grant a pardon (individual or general) when so disposed, before or after conviction or the conduct of an investigation. It is different in a democratic constitutional regime. The sovereignty there lies with the people, the ruler is no longer omnipotent, and the rule itself is divided among the different authorities. Each has to function within its own sphere, though in general synchronization with the others and subject to mutual checks and balances. It is not in keeping with the democratic character of the regime that any authority, be it the President himself, should hold a paramount power which enables it to change a decision of any of the other authorities which have acted within their responsibility in the framework of criminal proceedings. Such a power may be fitting for an absolute ruler who wishes to show grace to his subjects, but is alien to a holder of high office who wants to serve his subjects. This contrast is well-illustrated in the American precedents. At first it was held by the Supreme Court that a pardon granted by the President, like one granted by the English King, was an act of grace (see U.S. v. Wilson [55], at p. 160) per Marshall C.J.):

 

A pardon is an act of grace, proceeding from the power entrusted with the execution of the laws....It is the private, though official, act of the executive magistrate, delivered to the individual for whose benefit it is intended, and not communicated officially to the court.

 

          This approach, however, fell into disfavour (see Buchanan, "The Nature of a Pardon under the U. S. Constitution,") and was later expressly rejected in Biddle v. Perovich [56], where Justice Holmes observed as follows (at p. 486):

 

We will not go into history, but we will say a word about the principles of pardons in the law of the United States. A pardon in our days is not a private act of grace from an individual happening to possess power. It is a part of the constitutional scheme.

 

          The power of pardon of the President of Israel is, indeed, a part of the constitutional scheme, within which it has to find its rightful place.

         

23. What then are the implications for the pardoning power of the need for its coordination with the other State organs and authorities? In the first place, it seems to me that the President's power of pardon must not be construed as placing him in paramount authority over all the other authorities involved in the administration of criminal justice. The pursuit of criminal justice involves different authorities in different stages, from the commission of the offence until the delivery of a final judgment: the police, the prosecution, the courts, and the prison services (for holding suspects in custody). It would be contradictory to this constitutional arrangement to enable the President to intervene in the normal process by exercising his power of pardon concurrently with the powers exercised by the other State authorities. Only an unworthy constitutional arrangement would permit the President a power to halt a police investigation or the prosecution of a criminal charge, or to intervene at any stage in the course of the adjudicatory process. Such a situation was decried by Landau J. in the Matana rehearing in these terms ([3] at p. 461):

 

I am unable to see any purpose which can justify such confusion in methods of punishment and the division of powers between the authorities of the State.

 

          The proper interpretative approach indeed requires us to focus attention on the division of powers between the different State authorities, the ramifications of which are to be gathered from the "constitutional scheme" underlying our legislation. The proper construction of the pardoning power against this background is that it should be exercised by the President only after the other authorities have discharged their own functions. If in that situation there be need for a pardon, the President will be empowered to grant it. This was the fundamental philosophical approach to the question of pardon in the U.S.A., as was pointed out by Hamilton (Federalist, no. 74):

 

The Criminal Act of every country partakes so much of necessary severity, that without an easy access to exception in favor of unfortunate guilt, justice would wear a countenance too sanguinary and cruel.

 

          The same idea was expressed by American Chief Justice Taft, in Ex Parte Grossman [49] (at pp. 120-121):

         

Executive clemency exists to afford relief from undue harshness or evident mistake in the operation or enforcement of the criminal law. The administration of justice by the courts is not necessarily always wise or certainly considerate of circumstances which may properly mitigate guilt. To afford a remedy, it has always been thought essential in popular governments, as well as in monarchies, to vest in some other authority than the courts power to ameliorate or avoid particular criminal judgments. It is a check entrusted to the Executive for special cases.

 

          That was also the approach of Justice Agranat in A. v. the Law Council [2], where he commented thus (at p. 751):

         

Here - as in England - the primary purpose... is to redress the wrong done to a person who was convicted while innocent, and the second purpose - the value of which should also not be underestimated -is to reduce the sentence of the offender in circumstances which justify this. It is clear that the exercise of such a power by one of the highest State authorities is essential for the effectiveness of any governmental regime, since in no country whatever has there yet been created a system of justice capable of perfect and unerring operation, and of dispensing justice in every case without fail. I need hardly state that not all the material which may throw light on the matter before the court is invariably produced at the trial, and even the judges, who are but human, may err from time to time. It is essential, therefore, that there be available such a reserve power in order to prevent the harmful consequences of an injustice, and also to enable the reduction of a person's punishment - even when properly convicted - should the circumstances so dictate or warrant .

 

          It accordingly transpires that the power of (individual) pardon is exercisable only upon conviction of the offender in a final judgment. Only then will the different State organs have exhausted their own powers, and only then can there arise the need to correct an injustice. Until that stage, the fate of the suspect is to be determined by the appointed authorities in the ordinary course of the administration of criminal justice. A presidential invasion of the province of any of these authorities is an inconceivable possibility in a democratic-constitutional country.

         

 24. The perception that the presidential power of pardon must not be construed as being in rivalry with the powers of the other State authorities, underlies the interpretative conclusion that the power does not extend to the grant of a general amnesty. The expression "to pardon offenders" - according to its plain meaning, as I have already explained - would seem to embrace also the grant of a general amnesty, since it too effects a pardon for offenders. Yet there is no disputing the view that the President lacks the power to grant a general amnesty, as was in fact held by Agranat D.P. in the Matana rehearing (at p. 455):

 

It must be understood that when the First Knesset conferred the power of pardon upon the President, its intention was that he should not be empowered to declare a general amnesty, the result of which would be to pardon all offenders, for the intention was to reserve the power of general amnesty to the legislative authority itself.

 

          I believe the rational explanation for the President's lack of the power of amnesty to be the perception that amnesty is a legislative act which is properly the function of the Knesset rather than that of the President. The latter must exercise no powers that impinge on those of the legislative authority or, by analogy, on those of other authorities. The powers of the police to conduct investigations, and of the Attorney-General to prosecute offenders, including their respective powers to discontinue the investigation, or the prosecution, must not be subject to encroachment by the President through exercise of his pardoning power. Neither, indeed, should this power be construed as warranting presidential intervention in the authority of the court to acquit or convict and impose whatever punishment it sees fit. It has to be recognized that the grant of a pardon in the course of the investigation of an offence, or a trial, is an intervention in the exercise of these executive powers just as unwarranted as an intervention by the President in the Knesset's exercise of its legislative powers. The undesirability of construing the pardoning power in a manner permitting such presidential intervention, was stressed by the Attorney-General, Prof. Zamir, in his abovementioned directive, in these terms:

         

A Presidential power to intervene in criminal proceedings pending before the court, in a manner permitting termination of such proceedings at any time, is undesirable in principle. The pardoning power of the President bears no comparison with the Attorney-General's power to intervene in criminal proceedings by way of staying the same. The Attorney-General functions from the start as an integral factor in criminal court proceedings, for he is empowered by law to prefer the charge on behalf of the State. This power naturally entails also the power to withdraw the charge as well as to stay the criminal proceedings at any stage before final judgment, such decision being founded on a close involvement in and familiarity with the proceedings. The President, on the other hand, is an extraneous factor in criminal proceedings. In this situation, his grant of a pardon in the course of the trial might be seen as an unwarranted intrusion into the domain of the court.

 

Such an unwarranted intervention would occur if, for instance, the court were to convict the accused and he be pardoned by the President before sentence.

 

 25. This conclusion as to a "separation of powers" between the presidential pardon and the powers of other State authorities, is reinforced when regard is had to Israel's general constitutional framework. The other State authorities (the police, the prosecution and the courts) have the means to establish the facts. The police has its investigating facilities and seeks to reach an assessment of the factual situation. The prosecution, to whom the police must transmit the material, will handle and process it until judgment. The courts possess the institutional and normative facilities for elucidating the question of innocence or guilt. That, however, is not the situation of the President, who has no facilities for ascertaining the truth and testing the facts. It is therefore only natural that in matters of pardon the President be guided by the court's rulings. If it finds the accused not guilty, that is the end of the matter; if it convicts the accused and sentences him, that will be the President's starting point. Before conviction of the accused the President has no factual basis whatever for weighing the justifiability of a pardon. Even an admission by the applicant for a pardon that he committed an offence is of no consequence, for he is presumed innocent until convicted by the court.

 

26. My approach to the construction of the presidential power of pardon is also dictated by the reality of Israel's own constitutional structure. The President is the "Head of State," and not the head of the executive authority. He is a kind of additional authority to those four already existing (the legislative, executive,  judicial and supervisory authorities). In the Israel constitutional context, the President is perceived as symbolizing the State. He is not party to the power struggles in the country, and stands above the day-to-day political strife. It is unreasonable to assume that a President so constituted should be endowed by the lawgiver with a power of intervention in the daily functioning of the remaining governmental authorities. That would be like descending into the "arena," and not fitting for the President. Here, indeed, is a material difference between the President of Israel and the American President. The latter heads the Executive and has to do battle every day. That is why his power of pardon may be construed as extending also to a general amnesty as well as a pardon before conviction of the offender.

 

27. Moreover, the exercise of power must be subject to judicial review, without which arbitrariness will result, for without the judge there is no law. Hence our  constitutional perspective that the activities of each of the governmental authorities are subject to judicial review, consistently with the scope of the powers of that authority. This court has held even the functioning of the Knesset to be subject to limited judicial review (see Bergman v. Minister of Finance [33]; Sarid v. Knesset Chairman [15]; "Kach" Faction v. Knesset Chairman [1]; Kahana v. Knesset Chairman [26]). However, it was seen fit in the Basic Law, see. 13(a), to free the discharge of the presidential function from direct judicial review. There does remain the possibility of indirect review of his decisions, but only in a restricted way. For example, if he pardons a particular person, but refuses to pardon someone else in a similar position, the latter person would have no remedy. It is inconceivable that that same Legislature which freed the presidential functions from judicial review, should have granted him pardoning powers in place of those of other authorities amenable to the jurisdiction of the courts. We should, on the contrary, construe the presidential pardoning power as a residual, or a "reserve" power - as Justice Agranat called it - for use when the powers of the other authorities have reached the limits of their exercise.

 

28. I have so far assumed that our own "constitutional scheme" requires the pardoning power to be construed as not competing with the powers of other authorities. Hence my conclusion that the President lacks the power to pardon before conviction. It might be argued that the desired result could be achieved by recognizing the President's power to pardon before conviction in the expectation that he would make only a limited use of that power, as is the case in England. There the law has left the constitutional monarch with the pardoning power of the absolute monarch, but ensured that he does not in practice exercise that power except as consistent with the democratic character of the regime. This alternative, attractive as it may seem, is unacceptable to me for a number of reasons .

          In the first place, constitutional norms cannot be built on hopes. Basic principles of government are not shaped on the assumption that all will proceed as planned. Quite the contrary. The entire constitutional edifice is testimony to the realization that checks and balances must be provided to prevent, or cope with, situations that are likely to go wrong. If under our "constitutional scheme" the presidential powers must not rival those of other authorities, it would be most undesirable to rest the attainment of this objective on the expectation of presidential restraint, and his refraining from the exercise of his available powers. What if the presidential conduct doesn't come up to expectations? And - should we pursue this approach - why not say that the President has a general power of pardon and amnesty? The fact is that we are dealing here with a matter of constitutional import, impinging as such on our lives within the national framework. When it comes to the shaping of basic principles of government, we have to adopt a clear stand one way or the other. The matter should not be left for resolution on a casuistic basis of distinction between case and case, exceptional or otherwise, that would leave everything exposed to the vagaries of the passing political rivalries. We have been so instructed by my respected colleague, President Shamgar, in Neiman v. Central Knesset Elections Committee [19], where he held as follows (at p. 260):

         

When constitutional matters are under review, their import and implications must be considered in the long term, and proper weight given to their influences on the political and social frameworks within which they operate. If these be subjugated to the needs of the hour and we adopt a casuistic approach in matters of constitutional content, particularly concerning the freedom and rights of the individual, we shall miss the mark and deal less than justly with the subject.

 

          Were we to resolve the problem by a casuistic determination that the State President has the power, in principle, to pardon before conviction, with everyone left hoping that he will only rarely exercise that power, we should be guilty of doing exactly as admonished not to do.

          Secondly, the very existence of a power, albeit slumbering, invariably arouses expectations of its use. The President would be subject to constant individual and public pressure to exercise his power of pardon before conviction, and thrust himself into the centre of public controversy whether he accede to or refuse the request for a pardon. It is precisely the need to regard the President as the symbol of the State and isolate him from political rivalries, that demands a clear and unequivocal determination as to the scope of his pardoning power, and its negation before conviction of the offender in a final judgment.

          Thirdly, the indirect - in Israel the only possible - judicial review of the President's discharge of his functions, would be ineffective if he intervened in the activities of the other authorities, for if he acted within his lawful powers, there would be little opportunity for intervention by the court. If we are bent upon a "separation of powers," it is necessary that we keep the powers duly separated.

         

29. It is accordingly my conclusion that our constitutional framework precludes a construction of the presidential pardoning power as being concurrent with the powers of other State authorities. It demands, in fact, that the power only be exercised after the other authorities have exhausted their own powers. It might be asked whether this approach is not unduly rigid, and whether it may not result in injustice in certain, perhaps exceptional, cases. Can it be said that the other authorities will weigh the same considerations as does the President, and that in a rare case the presidential pardon will not offer the most effective remedy if granted before conviction? These questions are important and must be answered.

          Our starting point is that in the overwhelming majority of cases, the different State authorities are sufficiently equipped to deal with the problems with which the power of pre-conviction pardoning is likely to be confronted. True, the mechanisms are not the same, nor is the legal consequence identical, but the main problems are solved. If someone's personal plight (for example, a malignant disease) indicates that he should not be interrogated or prosecuted, a presidential pardon is not the only satisfactory solution. The police and the prosecution may take the suspect's personal circumstances into account and, for example, the Attorney-General may stay the proceedings for lack of public interest in the continuation of the trial on grounds of personal considerations affecting the applicant. Legally speaking, pardon is of course a "stronger" remedy than a stay of proceedings, yet the latter "milder" remedy suffices to solve the problem of the incurably ill suspect, or other problematic cases, by achieving the generally desired effect: The Attorney-General may likewise take into account general social considerations (embracing also matters of security and foreign policy). It was pointed out in the report of the Agranat Jurists' Commission on the Powers of the Attorney-General (1962) that in certain circumstances a situation involving a security, political or public interest may demand that no criminal charge be preferred. In this connection the Commission reported as follows on the Attorney-General's need to consult with the political authorities (at p. 13):

 

The stated duty to consult arises particularly when criminal proceedings are being instituted in relation to a matter of security, political or public interest. In such event it is always incumbent on the Attorney-General to consider whether the act of instituting criminal proceedings (or halting the same) is not more likely to prejudice the interests of the State than refraining from taking such action. This the Attorney-General will only be able to do after having sought information and guidance from those who carry the primary responsibility for safeguarding the State from the security, political and public aspects - that is to say, from those who, so we must presume, are more experienced and knowledgeable in those fields than we are. As already indicated, he will generally need to refer to the Minister of Justice for the required direction and advice; but sometimes, that is in cases which give rise to questions of "high policy," there will be no alternative but to obtain guidance from the Government as a body.

 

          It will be found that most of the problematical cases for which a pre-conviction pardon is sought, can and should properly be handled through the existing mechanisms, which have been structured in advance to deal with that very kind of case. Every person is presumed innocent until convicted, and a suspect's legal status cannot change except upon conviction by the court. The particular problems, for the suspect himself and for the general public, can normally be satisfactorily handled through the authorities charged with the administration of criminal justice. The former situation of the comparatively poor facilities available for the "extinction" of the offender's criminal past, has now been significantly improved with the enactment of the Crime Register and Rehabilitation of Offenders Law of 1981, according to which a presidential pardon - and clearly only a pardon after conviction is envisioned there - is an extinction of the conviction for all intents and purposes (sec. 16(c).

         

30. I am ready to acknowledge the possibility of very exceptional circumstances in which the power of pardon before conviction would offer the most practical and effective means of dealing with the problem. Even that, however, would not be a decisive consideration, for the reason that the "spacious view" we have to take when construing a provision of constitutional content, which is the case here, otherwise dictates. We must take into account not only the individual's plight, but also the interests of the general public, and the possibility of the abuse of the power. We must also remember the dynamics of a progression in which the rarest exceptions become less rare, and then become the general rule. The Attorney-General's power to stay proceedings offers an illustration of such a progression. We accordingly have to strike a balance between the different interests - between the hypothetical special exception and the need for the determination of clear and sharply defined limits for the exercise of executive powers at the highest level. Since there is no ideal solution, we can only strive at one that promises the least evil by balancing between the clashing interests. In so doing, in these circumstances, there is no need to give any priority to anomalies and exceptions. The best way to deal with the special cases is through the powers of the authorities who deal regularly with the situations concerned, and not through the conferment of exceptional powers on the State President. That has been the experience of many countries with political regimes resembling our own. Thus the Heads of State in France, Italy, Germany, India, Australia, Canada and in numerous other countries, do not enjoy a power of pardon before conviction. This lack has not, so far as I am aware, led to injustice grave enough in exceptional cases to prompt any move towards amendment of the existing law of pardon. The modern trend seems rather to indicate the contrary, and countries which were formerly subject to the English King's power of pardon have acted to restrict exercise of the pardoning power in their own countries to the post-conviction stage. Edwards, for example, states the situation in these terms (The Attorney-General, at 474):

 

A review of the independence constitutions within the Commonwealth, negotiated with the United Kingdom Government prior to the transfer of sovereignty, provides substantial support for a pre-conviction limitation of the pardoning power.

 

          And the trend in our own country has been towards refinement of the functioning and facilities of the existing authorities, as witness the provisions of the Crime Register and Rehabilitation of Offenders Law of 1981. Even the most anomalous and exceptional circumstances should not, therefore, be allowed to controvert our fundamental constitutional doctrines.

         

31. Before concluding this part of my opinion, I wish to refer to a problem connected with the President's post-conviction pardoning power. Does the pardoning power avail, after conviction, in situations where other State authorities have their own powers to deal with the problem? For instance, can a presidential pardon be granted someone whose case is under examination in a retrial, or be granted for reasons of "permanent ill-health" when this question is under examination by the Minister of Police in the framework of his powers under sec. 49(d) of the Penal Law of 1977? These questions do not arise in the matter now before us, and must await elucidation at the opportune time. However, I may point out that the situations described raise a question different from that occupying us in the present petitions. Our concern so far has been whether the term "offender" includes also an unconvicted suspect, the term itself being "open" and amenable to different possibilities, so that we are assigned the task of selection in accordance with the legislative purpose. In the above problematical situations (such as retrial) the accused, who has already been convicted, is by any linguistic test an "offender" and the question is whether such a person can be said to fall outside the ambit of sec. 11(b) of the Basic Law. These situations raise interpretative questions of the greatest complexity. Hence, it may happen that the legislative policy, though its trend be clear, will not be given to implementation in respect of a certain class of "offender" concerning whom the language of the law is insufficiently flexible. The answer, whatever it may be, cannot however affect the construction of the term "offender" in those cases where the language of the Law is flexible enough to serve the legislative policy. It would be unreasonable to hold that since the Legislature failed to attain its objective in some of the possible cases, it then becomes desirable to construe its directives generally in a manner thwarting achievement of the legislative purpose. I believe we should take the opposite interpretative approach. As faithful interpreters, we are committed to attainment of the legislative purpose as far as possible, bearing in mind always that while the interpretation is not bound to the words used, the words do limit the interpretation and so restrict our interpretative freedom. We may implement a legislative purpose within the bounds of a maximum-minimum semantic gradation, but we may not implement a legislative purpose which has no foundation at all in the language of the statute. The point was elucidated by this court in Haddad v. Paz [34], in the following terms (at p. 670):

 

The legislative purpose constitutes an interpretative aid when it serves as a guide in choosing between different, linguistically permissible, interpretations. It is essential, therefore, that the interpretative option which would implement the legislative purpose, find a receptacle in the language of the Law. There has to be a verbal connection, even a minimal one, between the language and the purpose of a Law. It is necessary to find an Archimedean hold for the legislative purpose in the language of the Law. The interpreter may not implement a purpose that finds no linguistic anchorage in the Law.

 

          We have dealt with the legislative purpose. Linguistically speaking it may be achieved in relation to an unconvicted person. He is not in the category of an "offender." It is doubtful whether this purpose is attainable in relation to a convicted person whose case is under retrial, or under examination by the Minister of Police in the context of his powers in situations of permanent ill-health. These are difficult questions awaiting clarification at the proper time.

         

32. It may possibly be contended that such linguistic "rigidity" is indicative of a basic misconception as to the legislative purpose. It should perhaps be said that because the President has a power of pardon where there is a retrial, he has the like power where no trial has been held at all. My answer to this legitimate question is that the available evidence - factual (the views of the Knesset members concerned) and legal ("the constitutional scheme") - does not support such a conclusion.

 

(11) Interim Summary

 

33. The empowerment of the President "to pardon offenders" is couched in "open", equivocal language, offering in itself no answer to the question whether the power of individual pardon is exercisable also before conviction, or the term "offender" includes also an unconvicted suspect. For the purpose of choosing between the possible linguistic options, we must have recourse to the legislative purpose. That purpose was not the equation of the State President's pardoning power with that of the English King, or of the President of the U.S.A., so we cannot be guided by those models. The Basic Law: The President of the State, is indeed an original Israel Law - the Israel Legislature "neither copied nor omitted, but built its law as an independent structure." It must accordingly be construed against the background of our own national experience, with interpretative guidance sought from the countries which have a similar constitutional arrangement. In discharging the interpretative function we must take a "spacious view," having regard to our "constitutional scheme." Against this background, my own approach is not to presume that the lawgiver sought to confer on the State President - who does not head the executive authority but symbolizes the State, and whose functioning is not subject to direct judicial review - executive powers concurrent with those of other State authorities (the police, the prosecution, the courts). The lawgiver cannot be presumed to have favoured presidential intervention in criminal proceedings before these have run their full course. Therefore, I interpret the expression "to pardon offenders" as extending only to persons against whom a final convicting judgment has been given. This approach finds support in the scholarly treatises of two of Israel's most distinguished jurists, Professors Feller and Klinghoffer, in the criminal law and constitutional law fields respectively. In the view of both scholars, each from the angle of his own specialized field, the presidential power of individual pardon extends only to duly convicted persons (see Prof. Feller's article, "Rehabilitation," p. 5). The same approach was also adopted by Landau J. in the Matana rehearing, where he held as follows (at p. 461):

 

My main ground in opposing the wide interpretation proposed by the Deputy President is that matters of punishment in criminal cases fall within the jurisdiction of the courts. It is clear that side by side with this jurisdiction the special power of pardon is required in order to correct any serious error of the court which cannot otherwise be corrected, and as an act of grace after the offender has served part of his sentence.

 

          The matters of correcting "any serious error of the court," and "an act of grace after the offender has served part of his sentence," have relevance after conviction only. I am conscious of the fact that Deputy President Agranat (as he then was) and Justice Berinson, two of Israel's most distinguished Judges, expressed a different opinion. I shall seek to explain how this occurred when I examine the approach of my respected colleague, President Shamgar, which I now proceed to do.

         

F. The Approach of Shamgar P.

 

(1) The Gist of his Approach

 

34. I shall seek to set out the main points in the judgment of Shamgar P. on which our approaches diverge. My colleague's starting point seems to be that the Anglo-American model was envisaged by the Israel Legislature as the prototype for the presidential pardoning power in Israel at the time when sec. 6 of the Transition Law was enacted. Further, that it was also so held in the case of A. v. the Law Council and in the Matana rehearing. This "historical-interpretative" approach would dictate the conclusion that the presidential pardoning power in Israel is the same as that of the English King or the American President - and different from other models which may be disregarded - and that it embraces also the grant of a pardon before conviction. In the opinion of Shamgar P., this same situation was envisaged by the Israel Legislature when it later enacted the Basic Law: The President of the State. Hence, so far as pertaining to the issue now before the court, the text of the pardoning provision in the Transition Law was re-enacted without change in the form in which it had been interpreted in the precedents - an indication that no need was seen to change the then existing legal situation. Accordingly, it could not be contended that parallel powers held by other authorities (such as the Attorney-General's power to stay criminal proceedings) might affect the presidential pardoning power, without it first being proved that the existence of such parallel or overlapping powers have implicitly repealed the presidential power. In the opinion of Shamgar P., no such implied repeal could be established in the present matter since the existence of the parallel powers created no conflict. The State President was accordingly competent to grant a pre-conviction pardon and, in the view of Shamgar P., this conclusion was also consistent with the interpretative perspective that constitutional powers must be given an expansive interpretation.

 

35. Shamgar P. also made reference to other matters in his important judgment, but I believe I have sufficiently stated the essence of his approach. With all due respect, 1 am unable to agree with that approach. Lack of time prevents me from elaborating upon many of the points on which 1 am in disagreement with my respected colleague, and I shall confine my remarks to certain matters which seem to me important for the resolution of the problem before us.

 

(2) The Anglo-American "Mould and Prototype"

 

36. As I have already indicated, Justice Shamgar took as the starting point for his construction of the presidential pardoning power, the view that it was structured according to the powers of pardon of the English Monarch and the U.S. President. I have sought to show that this view is not in accord with the facts. It was not the latter powers that the lawgiver had in mind when the power of pardon was enacted under the Transition Law. I have examined the relevant legislative history, without finding any hint of factual support for this theory. The powers of pardon of the English Monarch did not serve as the "prototype" for the pardoning power of the President of Israel. Even Justice Agranat did not find as a fact, in A. v. the Law Council [2], that in enacting sec. 6 of the Transition Law the Israel Legislature had in mind the English Monarch's pardoning power as a matter historically established. Justice Agranat's approach was legal and not historical and he assumed, as a matter of law, that the pardoning power of the President of Israel was the same as that of the High Commissioner in the Mandatory period, which in turn he assumed was the same as that of the English Monarch. On this basis he drew the logical conclusion that the pardoning power of the State President was the same as that of the English Monarch, the learned Justice holding as follows (at pp. 750-751):

 

I am of the opinion that the power of pardon of the President of Israel is the same, generally speaking, as the power of pardon of the King of England, in its nature and in respect of the consequences which flow from its exercise. Before the enactment of the Transition Law of 1949, the High Commissioner was empowered under Art. 16 of the Palestine Order in Council (inter alia) to "grant to any offender convicted of any crime... within Palestine... a pardon either free or subject to lawful conditions, or any remission of the sentence passed on such offender.... " The power of pardon held by the High Commissioner was accordingly the same as the power of pardon held by the King of England.... If the provisions of sec. 6 of the Transition Law of 1949 were enacted in place of Art. 16 of the Order of the King-in-Council, as I believe happened, then the power of pardon held by the President must be deemed the same as the power formerly possessed by the High Commissioner, and later by the Provisional Government. That is to say, this power is parallel, in its nature and in the consequences which flow from its exercise, to the power of pardon exercised by the King of England.

 

          It is generally accepted today that the above parallel drawn by Justice Agranat in A. v. the Law Council contained two errors, as was indeed pointed out in the dissenting opinion of Landau J. in the Matana rehearing. In the first place, it is clear that the State President's pardoning power is not the same as was the power possessed by the High Commissioner. If these were the same, the question now before us might never have arisen, since except with regard to offenders who turned "King's evidence," the High Commissioner had no power of pre-conviction pardoning. This error was later acknowledged and corrected by Justice Agranat in the Matana rehearing, in the following terms ([3] at pp. 443-444) :

         

resort to a system of comparison between the language of Art. 16 of the Order in Council and that of sec. 6 of the Transition Law, 1949, in order to ascertain the intention of the Israel Legislature in the latter section which it enacted - resort to this mode of interpretation is out of place... The language of Art. 16 of the Order in Council need not prevent the giving of a wide interpretation to the President's power of pardon.

 

          The second error was Justice Agranat's perception of the High Commissioner's pardoning power as equal to that of the King of England. This aspect too was later dealt with by him in the Matana rehearing, where he pointed out that the High Commissioner held a delegated power which was not the full power of the English King:

         

   the power of pardon granted to the High Commissioner under Art. 16 of the Order in Council... is none other than the power delegated to him by the King from that accorded to the latter by virtue of the prerogative... In view of the rule of construction mentioned above which demands a restricted interpretation of the "delegated" powers of one who has the status of the governor of a British colony, it was imperative to define clearly and precisely the power which was delegated in this respect to the High Commissioner, and it is to this that the detailed and exact language of art. 16 must be attributed. The truth of the matter is that the power of pardon of the King of England was never delegated, in its entire scope, to the High Commissioner. This is proved by the fact that whereas we learn from the passage from Halsbury's Laws quoted above that the King is empowered to grant a pardon also " before conviction," it is provided by Art.16 of the Order in Council that the High Commissioner may only exercise this power in respect of "any offender convicted" (ibid., pp. 439-440).

 

          There accordingly appears to be neither a factual nor any legal basis for the "historical-interpretative" premise that at the root of the State President's pardoning power lay the power of pardon of the English Monarch. Nor, I need hardly add, is there any factual-legal basis for attributing such a role to the pardoning power of the U.S. President.

         

37. I shall now proceed to analyse the judgment of Agranat D.P. in the Matana rehearing. I have endeavoured above to show that he did not found his decision on any "historical-legal" basis of an Anglo-American "prototype" of the pardoning power. The starting point of his approach was the perception of the Transition Law of 1949 as an original Israel enactment. Agranat D.P. relied in this regard on a dictum of Smoira P., that the Israel Legislature "neither copied nor omitted, but built its law as an independent structure", and went on to add as follows ([3] at p. 444):

 

I have so far tried to show that the language of Art. 16 of the Order in Council need not prevent the giving of a wide interpretation to the President's power of pardon and that the formulation of this power in sec. 6 of the Transition law "suffers" such a construction. Is there any positive justification for this and how far should the line be stretched? To answer this question we must first consider the nature of the various powers of pardon.

 

The approach of Agranat D. P. is accordingly to be seen as interpretative rather than historical. Reading the text of sec. 6 of the Transition Law, he examines whether the language "suffers" the construction concerned, and among the possibilities "suffered", chooses the meaning for which there is "positive justification" but taking care not to "stretch the line" too far. He takes into account the fact that he is dealing with a constitutional provision which, he holds, need not be given a restrictive interpretation but calls for the taking of a "spacious view" (ibid. p. 442). It was against this background that Agranat D.P. examined the substance of the pardoning power. Making a thorough examination of the pardoning powers held by the King of England and the American President, he was confronted by the judgment of Berinson J. in the criminal appeal in Matana v. Attorney-General [3], where the latter dwelt on the difference between the English King and the President of Israel. Countering this argument, Agranat D.P. held as follows:

 

My reply to these words of dissent is twofold. Firstly even if the fact that the local provision is drafted in the Hebrew language must not be lightly disregarded, it would also not be right to give it undue weight. Not only do the expressions "pardon" and "reduction of punishments" have a universal meaning, but the power of pardon, in its scope under the common law, is the power which passed to the Provisional Government by virtue of sec. 14 of the Law and Administration Ordinance, 1948, and was known to local jurists at the time when that provision was framed.

 

   Secondly, the importance of the lesson from American precedent arises from the fact that although it was the clear aim of the draftsmen of the Constitution of the United States (and it was this very object which they wished to achieve) to ensure - by means of the provision imposing upon the President the duty of supervising the faithful implementation of all the laws of the State - that no trace should remain of those prerogative powers which served the King as a means of relaxing the bonds of various laws and statutes, nevertheless they left the power of pardon within the realm of criminal law just as it was, and introduced a specific provision conferring such power upon the President of the State.

         

          And in reply to the contention that the status of the President of Israel, as "symbolizing" the State, differed from that of the American President as "conducting its affairs," Agranat D.P. had this to say (ibid., pp. 453-454):

         

The reply to this argument is that also in France, where at least until 1958 the status of the President was basically similar to that of the President of Israel, it was found necessary to confer upon the President of the Republic the right to grant pardons.... The result is that the ground of the absence of any similarity or comparison between the status of the President of our country and that of the British Crown (or of the President of the United States) is erroneous.

 

          Justice Agranat accordingly did not construe the Transition Law on the basis that its legislative purpose "was fashioned in the Anglo-American mould, which served as its prototype." His approach was to take a pervasive constitutional perspective, to take a "spacious view" in construing the relevant statutory provision. In ascertaining for himself the meaning of "pardon," he availed himself of the English experience as well as the American, the French and the German. He did not distinguish between the legal situations in the different countries, and he was apparently unaware of the fact that in France the term grace mentioned by him, was not interpreted in the same way as the term "pardon" in the U.S. Constitution. He sought to uncover the essence of the matter, seeing the term "pardon" as harbouring a concept of "universal significance." I wish to adopt that same approach in the matter now before us.

 

.38. It cannot be overlooked that in his judgment in the Matana rehearing, Agranat D.P. also held, specifically, that the State President has the power to pardon before conviction, and so did Berinson J. As for the import of this determination, I believe it is generally recognized as carrying the weight of an obiter dictum. That would entail a twofold consequence. First, from the viewpoint of our legal system, the abovementioned conclusion constitutes no authoritative declaration that Israel law empowers the President to pardon suspects also before their conviction. Hence a District Court Judge, for instance, would still be free to hold that the presidential power of pardon avails after conviction only. For the same formal reason M. Ben-Ze'ev, a former Attorney-General, felt himself free to declare before the Knesset Constitution, Law and Justice Committee - after the decisions in A. v. The Law Council and in the Matana rehearing - that the presidential pardoning power was exercisable after conviction alone. For this reason too legal scholars have expressed the same opinion. In so doing they were not merely reflecting the desirable state of affairs, but what seemed to them to be the existing legal situation. It is true that "the final form in which the Law is shaped, is the form given it by the Judge" (Justice Sussman, "The Courts and the Legislating Authority," Mishpatim 3 [1971], 213). Also, "Once the Supreme Court has construed a legislative enactment as it did, in a dispute before it, this construction becomes part of that enactment" (Justice S. Agranat, "The Contribution of the Judiciary to the Legislative Endeavour," Iyunei Mishpat 10 (1984), 244). But these statements are true only with regard to the ratio decidendi, and do not apply to obiter dicta. The rational explanation for this is that in his passing remarks the judge does not sense the same responsibility as he does when setting forth the reasons for his decision. Knowing that his remarks in passing have no binding force, he may feel greater freedom in expressing them. It seems to me that our instant matter well illustrates the point. Thus Berinson J.'s statement concerning the presidential power to pardon before conviction does not, I believe, accord with his general line of thinking. Seeking to restrict, he in fact widened the interpretation. His own perspective provided little explanation for that result. As for Justice Agranat, he referred not only to Anglo-American law but also to Continental law, without, however, carefully examining the latter. He was therefore unaware of the fact that the Continental countries generally did not recognize the possibility of individual pardon without prior conviction. He would certainly have made a thorough study of the matter had he considered it central to his decision. Moreover, in substantiating the need for the pardoning power, Justice Agranat set forth the following two reasons alone (in A. v. The Law Council and in the Matana rehearing):

 

   The primary purpose... is to redress the wrong done to a person who was convicted while innocent, and the second purpose - the value of which should also not be underestimated -is to reduce the sentence of the offender in circumstances which justify this. It is clear that the exercise of such a power by one of the highest State authorities is essential for the effectiveness of any governmental regime, since in no country whatever has there yet been created a system of justice capable of perfect and unerring operation, and of dispensing justice in every case without fail (A. v. the Law Council [12], at p. 751).

 

          This reasoning naturally only holds true in relation to a convicted offender. It is not at all applicable to someone who has yet to be convicted. How, then, is this reasoning of Justice Agranat to be reconciled with his view that the President has power to pardon before conviction? Such power would necessitate a different rationalization, of the kind that is not to be found either in A. v. The Law Council or in Matana.

          The second implication (of holding a judicial statement to be obiter) is that much significance may nevertheless attach to obiter dicta. If these flow directly from a coherent basic perception, they are capable of heralding accurately the reasons for a decision in the future. As a result these dicta create public expectations which are frequently acted upon. The resulting practice may in turn contribute in the course of time to the adoption of a construction that is in keeping with the original dictum, the expectations thus fulfilling themselves. All of this, of course, will fail to be decisive if a later court holds the dictum to be wrong. But it will all be of great importance if the later court should hesitate between two possible constructions. It is true that as between truth and stability, we should prefer truth, yet sometimes when truth and truth vie with each other - stability is to be preferred (see Of Ha-Emek Cooperative Society v. Ramat Yishai Local Council [32]). These considerations do not apply in the case before us for several reasons. First, because the dicta of Justices Agranat and Berinson were not a necessary concomitant of their basic perspective, and with regard to Justice Agranat I have sought to show that he did not perceive the Anglo-American method of pardon as the "prototype" for our own, but that his underlying approach was to give the expression "pardon" its universal meaning. By such universal standards, the dictum that the State President has the power to pardon before conviction certainly cannot be said to have any compelling foundation. A second reason for not following this dictum is that no constitutional practice actually evolved in its wake. In fact, the contrary appears to be the case, for, by internal directive, requests for a pardon have generally not been acceded to before conviction. In argument before us only a very small number of cases of pardon before conviction could be cited. It seems that the dictum created no expectations which could influence our interpretation.

          It accordingly transpires that the question of the presidential power to pardon before conviction has remained essentially unanswered, and we are now called upon to resolve it for the first time. So far the question has been the subject of passing judicial statements, legal articles and jurists' opinions. It is now the time for this court to have its say.

         

39. My colleague, President Shamgar, relying on the statements of Agranat D.P. in the Matana rehearing, holds that constitutional provisions should be given an expansive interpretation. This is an important determination, since Shamgar P. seeks to give the presidential power of pardon a wide construction. I have two comments in this regard.

 

          First, Justice Agranat's starting point (in the Matana rehearing) was that constitutional directives did not necessarily require a restrictive interpretation, but called for a "spacious view" to be taken. I agree with that approach and it also forms the basis of my own judgment here. In my opinion, however, it does not follow that every directive of constitutional content should be expansively construed. That is unfeasible, since constitutional directives deal in the nature of things with the reciprocal relations between the State authorities, and the occasional expansive construction of a particular authority's powers necessarily entails a narrowing of those of some other authority. Furthermore, an expansive interpretation of a governmental power may often entail a narrowing of basic rights, which too is an inconceivable result. In fact, the question whether the construction should be expansive or restrictive does not determine the mode of interpretation, but is itself the interpretative outcome. Thus Justice Agranat himself held that the presidential power of pardon did not extend to a general amnesty, this conclusion being the result of a narrow construction of the pardoning power. The constitutional proposition, in my opinion, is that constitutional directives must be construed in a manner fitting their preferred standing, and in consonance with their capacity to determine the national pattern of life. A basic provision is not intended to perpetuate an existing situation, but to give direction to human experience. Its construction accordingly calls for a pervasive perception, and not a technical approach.

          My second comment is that if called upon to choose between an expansive and a restrictive construction of the presidential pardoning power, I should prefer the latter for several reasons: in the first place, in order to avoid the kind of unwelcome rivalry between the different authorities that I have already described; secondly - and this is the main consideration here - because pardon creates an inequality between "offenders," and a statutory provision relating to pardon must accordingly be given a narrow interpretation. The matter was discussed by Landau J. in Bergman v. Minister of Finance [33], in the following terms (at p. 698):

         

It is accordingly proper, especially in borderline cases, that where a statutory provision is open to two constructions, we should prefer the construction which upholds the equality of all before the law and does not set it at naught.

 

          This principle has been reiterated by the court on a number of occasions (see Abu Hatzeira v. Attorney-General [35]; Raundanaf (Korn) v. Hakim [36]).

         

40. Before concluding my remarks on the instant problem, I should state that President Shamgar's basic standpoint that Knesset Members contemplated a particular model of the pardoning power when our own version was enacted, raises many questions in my own mind. Supposing it were to be established that the English or the American model indeed served as the "prototype" for the wording of sec. 6 of the Transition Law, would that require us to construe the provision in accordance with the American tradition? I believe not. A Law, as I have already mentioned, is a creature living within its awn "environment," and the environment of an Israel statute differs from that of an English or American statute, even if they be similarly worded. "The law of a people must be studied in the light of its national way of life" per Agranat J. in "Kol Haam" Ltd. v. Minister of the Interior [37] at p. 884). The judicial discretion in the interpretation of a statute, so Justice Landau has guided us, must be exercised "in order to bring it into harmony with the constitutional regime in existence in the State" (see his abovementioned article in Mishpatim, 1[1969], at p. 306). All does not depend, therefore, on the model or prototype contemplated by the lawgiver when the pardoning provision was enacted and, important though this may be, it is not decisive. We must interpret the law in consonance with our national way of life, and this may change with the passage of time. If so, the interpretation of a Law will undergo a corresponding change. "If times have changed," Justice Sussman wrote, "the Law suffers a sufficiently flexible construction to enable its adaptation to the changes" (see his abovementioned article in Mishpatim 3 [1971], at p. 215). In this regard Agranat J. has commented thus (Kaufman v. Margines [38], at p. 1034):

 

When the Judge is confronted by a factual situation stemming from new conditions of life rather than those which called forth the existing ruling, it will be the Judge's task to re-examine the logical premise on which the ruling formulated against a different background was based, with a view to adaptation of the same to the new conditions.

 

          This adaptative need applies not only when the facts change, but also when the legal context or "environment" changes. The enactment of new Laws creates a new legal context, and these have the capacity to influence the construction of an earlier statute. It is to be observed that the question is not one of a repeal, expressed or implied, of an earlier Law, but of the effect of the very existence of the new and different Laws on the interpretation of the earlier Law. The point was discussed in State of Israel v Pahima [39], where it was held as follows (at p. 828) :

         

Sometimes a Law, upon its enactment, presents a number of interpretative options, but with the passage of time arid the enactment of additional Laws on the same subject, some of these options fall away, while others take their place. Apposite here is Justice Sussman's statement that "a term in an enactment is a creature living within its environment" (H.C. 58/58, at 513). This environment includes, besides other directives in that enactment, other statutory enactments which throw light on the interpretation of the Law concerned. It must be observed that here the additional enactments bring about no "legislative" change in the Law, only an "interpretative" change. The new enactments have created a new "environment," which by its very existence influences the manner of interpretation of the Law.

 

          Hence the "prototype" contemplated by the lawgiver when the State was established, for all its importance, cannot in itself determine the contemporary interpretation of the Law. A Law is a dynamic creation, adaptable to changing exigencies. This quality was thus elucidated by Justice Agranat in his abovementioned article (Iyunei Mishpat 10 [1984], at p. 239):

         

   Experience teaches that words have a dynamic life of their own. That is to say, with the changes wrought by time in the conditions of life and the concomitant changes in the different social outlooks, words gradually "shed" their original meaning and "assume" a new significance, or come to harbour additional shades of meaning. This factor may well - though it need not always - bring about a construction of the Law the result of which, although falling within the purview of the Law's general purpose, is not the interpretation contemplated by the lawgiver.

 

          It follows that new legislation (such as, for instance, the Crime Register and Rehabilitation of Offenders Law) enacted after the passing of sec. 6 of the Transition Law and sec. 11(b) of the Basic Law, is able to affect the mode of interpretation of the latter provisions.

         

(3) The Legislative Authority and its "Acquiescence"

 

41. The expression "to pardon offenders" was repeated in the Basic Law without change, just as it stood in the Transition Law. From this Shamgar P. infers that the Knesset adopted for itself the construction of the majority as well as the minority opinion of the court, on the question of the pre-conviction pardoning power, in the Matana rehearing. This approach is neither factually nor legally acceptable to me.

 

42. Factually, the above thesis seems in conflict with the views held by members of the Knesset Constitution, Law and Justice Committee when they discussed sec. 11(b) of the Basic Law prior to its enactment. It appears from the views they expressed, as cited by me above (see par. 11), that they considered the presidential pardoning power to be exercisable after conviction alone. They so understood the words "to pardon offenders," and that was the result they desired. I need only repeat the following statement made by Knesset Member H. Zadok towards the end of the Knesset Committee's discussion of the matter:

 

It seems to me we have no difference of opinion on the substance of the matter. We intend to empower the President to pardon persons who have been criminally tried and convicted.

 

Against this background, I do not see how it can be said that the Knesset "rested content" with the pre-conviction pardoning situation as interpreted by the court in the Matana rehearing. The Knesset focused its attention on the problems which inspired the ratio decidendi, and clarified the matter by way of a subsequent amendment to the wording of the Law on the troublesome point then in issue. The Knesset did not address itself at all to the obiter dictum on the matter of pardon before conviction.

 

43. Legally speaking I am equally unable to accept the aforementioned thesis of Shamgar P. My own approach is that the Knesset legislates only when it actually enacts, and not when it refrains from so doing (see A. Shapira, "The Silence of the Legislature: A Canon of Statutory Construction?," Hapraklit, 21, 293; G. Tedeschi, "Recent Trends in the Theory of 'Stare Decisis'," Hapraklit, 22, 320). The proposition was succinctly stated by Berinson J. as follows (in the Matana rehearing [3], at p. 470):

 

When have we found that the Legislature is able by silence or inaction to put its seal on a particular course of action of one of the State authorities?

         

          Accordingly, the Knesset's mere repetition in the Basic Law of the wording used in the Transition Law, cannot be said to have put the seal of a binding norm on the above dicta in the Matana rehearing.

         

(4) Implied Repeal

 

44. My colleague, President Shamgar; has devoted a considerable part of his judgment to the question of a repeal by implication. In my perception, however, this question fails to arise at all. It is not my view that the powers conferred on the different State authorities (the police, the prosecution, the courts) have repealed by implication the presidential power to pardon before conviction. To have thought so, would necessarily have entailed a recognition of the presidential pardoning power also before conviction. In fact, my approach is that the presidential power of pardon does not avail at all before conviction, so that no question of an implied repeal arises here. In my view, the various Laws dealing with the powers of the different authorities form part of the legal context or "environment," within the framework of which the pardoning power must be construed. These Laws have not implicitly repealed the provisions of sec. 11(b) of the Basic Law, but they do constitute a factor in the interpretation of the Basic Law (see State of Israel v. Pahima [39], at p. 828).

 

G. On the Rule of Law

 

45. Before concluding my judgment, I might observe that the petitions before us harbour in the background formal, as well as substantive, questions of the rule of law. In its formal sense the rule of law requires that all persons and bodies in the State - individuals, associations and governmental agencies - act in accordance with the law, and that any act in conflict with the law must be confronted by society's organized sanction. In this sense the rule of law has a twofold meaning: lawful rule and supremacy of the law. This embodies a formal principle, since it is not the content of the law that concerns us here, only the need for it. In this sense the rule of law is unconnected with the nature of the regime, but only with the principle of public order. As far as the executive authority is concerned, the rule of law concerns itself with the legality of the administration. The Executive is subject to the law, and its agencies have no rights, powers or immunities, unless conferred by law. It follows that a State functionary as such holds no greater rights, powers or immunities than does any other person in the State, and is therefore equally answerable for his actions. In this connection I may quote the well-known words of A.V. Dicey:

 

With us every official, from the Prime Minister down to a constable, or a collector of taxes, is under the same responsibility for every act done without legal justification as any other citizen (The Law of the Constitution, 10th ed., p. 193).

 

          Consequently, if the Attorney-General be of the opinion that the available material provides prima facie justification for the opening of an investigation concerning very serious offences allegedly committed by members of the executive authority, the rule of law will require that the matter be examined and investigated. That is how we should treat anyone else, and State officials should be treated no differently. Security considerations dictate no contrary result, for there is no security without law, and the rule of law is a component of national security. Security needs dictate that the proper investigative machinery be found, or else the General Security Service will be unable to fulfill its task. The strength of the Service lies in the public confidence it enjoys, in the trust placed in it by the court. If security interests become the paramount consideration, the public as well as the court will lose their trust in the Security Service and in the legality of its operations. Without trust, the State authorities cannot function. That is the case with the public trust in the courts (see Tzaban v. Minister of Religious Affairs [40]), and so it is with the public trust in the other governmental organs .

         

46. The rule of law carries, in addition to its formal attributes, also a substantive significance, namely: rule of the appropriate law, law which displays a balance between individual and the public needs. The primary implication thereof is the equality principle, equality in the application of the law and its use. The rule of law is negated where there is discrimination between equals. The matter was discussed by this court in Neiman v. Knesset Central Elections Committee [19], where Shamgar P. made these observations (at pp. 261-262):

 

The rule of law finds its main expression in the fact that it is not the rule of persons - according to their own unfettered decisions, considerations and desires - but is founded upon stable normative directives which are equal for all and bind everyone in equal measure. The manner of definition of a right and even its recital in the Law do not in themselves constitute an effective safeguard, for these do not secure full realization of the right. Rights are practically realized when they are respected by applying them equally in practice, without unjust discrimination. The value and potency of a Law which confers rights lie in the facts that the rights thus conferred do not remain in the realm of an abstract idea, however lofty in spirit and trend, that also the letter of the Law comes down to what is concrete and available, that it is applied according to standards of an equality among equals, from which there be no deviation for improper reasons.

 

The subjection of one person to an investigation, but not another who is in an equal situation, is an impairment of the rule of law, just as it is to grant one person a pardon but not another in equal circumstances, or to afford one person every opportunity of defending himself and stating his version of events whilst withholding the same benefits from someone else with an equal claim thereto.

 

47. Historians tells us that Chief Justice Coke, when he was unable to dissuade King James I from asserting authority in the judicial sphere, addressed these memorable words to the King:

 

          Quod rex non debet sub homine, sed sub deo et lege (the King is subject not to men, but to God and the law).

         

          So be it.

         

          The petitions concerning the investigation dismissed by unanimous opinion; the petitions concerning the pardons dismissed by majority opinion. The orders discharged.

         

Judgment given on 6 August 1986.

 

* In Hebrew - haninah, חנינה-Translator's note

 

 

 

 

 

 

 

 

C.A. 776/80

 

ISRAEL BRITISH BANK (LONDON) LTD. (in Liquidation)

v.

ESTATE OF THE LATE WALTER NATHAN WILLIAMS

 

 

In the Supreme Court sitting as a Court of Civil Appeals

[September 24, 1984]

Before: Ben-Porat V.P., S. Levin J. and Netanyahu J.

 

 

Bank-customer relationship - Limitation of actions on a debit balance - Construction of contracts and the parties' intentions.

 

 

            The appeal turns on the question as to when the cause of action arises, for the purposes of limitation of actions, in a suit brought by a bank against its customer and founded on a debit balance in a current account: on the date the debit balance came into existence or on the date of the demand for payment.

 

Held by the Supreme Court:

 

A.      (1)     All of the terms, upon which a particular indebtedness is conditional, must be complied with in order to vest in the other party to a contract the right to claim its discharge. That is a fundamental rule in the law of contracts and, in the absence of any flaw nullifying a particular condition (for example, where it offends against some compelling rule of law), it should be preserved by dint of the principle of freedom of contract and the will of the parties.

          (2)     Where a party to a contract undertakes to perform a certain obligation "on demand" or "within a specified period of time after demand," the reasonable construction is, that an actual demand on the part of the creditor constitutes an essential condition of the formation of the right to have that obligation fulfilled. Only with the demand (besides other conditions, if any) as agreed upon, is the creditor's cause of action established and, accordingly, only then does the limitation of that right begin to run.

 

B.      (1)     The rule, whereby a contract is to be construed in accordance with the parties' intention, was accepted early in Israel also and took root here.

          (2)     The parties' intention is to be deduced from the contract itself and, if not apparent therefrom, then from the circumstances.

          (3)     The intention of the parties to a particular contract is the determining factor.

          (4)     The ancient exception laid down in English law, whereby the cause of action for a loan debt repayable on demand arises without a demand immediately upon the granting of the loan, contradicts the foregoing test of construction of contracts and the accepted policy in Israel. It is, therefore, regarded as incompatible with local conditions, within the meaning of that phrase in Article 46 of the palestine Order-in-Council, 1922.

          (5)     The object of a loan agreement is the use of the loan monies by the borrower in return for the profit that the lender derives, within the framework of his business, from such use for as long as it continues. The condition, the repayment shall be "on demand" (namely, on the demand of the lender), only enables him to bring the transaction to a close whenever he so desires but, as long as the thing is, in his opinion, worthwhile, he may elect to prolong the transaction even for many years, going beyond the period of limitation. That is totally inconsistent with the notion, that the borrower is under an obligation to repay the loan immediately upon its being granted.

          (6)     The demand on the part of the bank is an essential element in the formation of a cause of action against the customer.

 

C.      (1)     Minority opinion of S. Levin, J.:

                    In the absence of agreement to the contrary, the cause of action on a debt, repayable on demand, arises immediately on the receipt of the loan by the borrower. The fact that the indebtedness under the loan includes interest does not alter the date on which the cause of action was created. Accordingly, limitation, in the case of a loan repayable on demand, begins to run on the day the loan is granted.

          (2)     The same applies to a promissory note payable on demand in which, for that purpose, the period of limitation commences with the issue of the note.

          (3)     The lender and borrower are at liberty to determine between themselves, expressly or impliedly, that the need for a demand is part of the cause of action.

          (4)     There are instances where the court is prepared to deduce from the circumstances surrounding a particular relationship, that a demand is a necessary part of the cause of action. For example, it is assumed that a collateral undertaking, such as a guarantee or security for a debt, may not be enforced unless preceded by a demand as part of the cause of action. Even then, however, the rule applicable to such cases is subject to the interpretation of the express or implied intention of the parties to the transaction.

          (5)     With respect to banks, too, the cause of action on a debt payable on demand arises with the creation of the debt.

          (6)     The English rule of law, whereby limitation of action, in relation to the customer's credit balance begins to run from the date of the demand, and not from the date the credit comes into existence, has become so deeply embedded in our country's jurisprudence, that it ought not to be altered other than by legislation.

 

 

Judgments of the Supreme Court referred to:

 

[1]        C.A. 51/62- MV "New Rotterdam" v. Ennisfield, 16 P.D. 72.

[2]        C.A. 345/78 - Bank Hapoalim Ltd. v. Sardes, 33 P.D. (Part I), 683.

[3]        C.A. 323/80 - Iltith Ltd. v. Bank Leumi LeIsrael Ltd., 37 P.D. (Part II), 673.

[4]        C.A. 279, 280/53 - Levi v. Klinger et al. and counter-appeal, 10 P.D. 802; 23 P.E. 298.

[5]        C.A. 395/57 - Ila Hotels Co. Ltd. v. State of Israel, 22 P.D. (Part I), 20.

[6]        Cr.A. 515/75 - Katz v. State of Israel, 30 P.D. (part III), 673.

[7]   C.A. 679/76 - Sali, by her parents v. Estate of Karl Schaeffer et al. 32 P.D. (Part II), 785.

[8]        Cr.A. 595/83 - unpublished.

[9]        C.A. 160/62 - Levi et al. v. Municipality of Tel Aviv-Yaffo, 17 P.D. 1773.

[10]      C.A. 96/50 - Tsinki et al. v. V.A. Chayat et al. 5 P.D. 474; 4 P.E. 103.

 

Palestine judgment referred to:

 

[11]      C.A. 209/40 Friedman et al. v. Ali et al. 7 P.L.R. 569; (1940) S.C.J. 555.

 

English judgment referred to:

 

[12]      Norton V. Ellam (1837) 150 E.R. 839 (Ex).

[13]      Jackson v. Ogg (1859) 70 E.R. 476 (Ch.).

[14]      Re J. Brown's Estate Brown v. Brown (1893) 69 L. T. 12 (Ch.).

[15]      Bradford Old Bank v. Suttcliffe (1918) 2 K.B. 833 (C.A.).

[16]      Joachimson v. Swiss Bank Corporation (1912) 3 K.B. 110; (1921) All E.R.92 (C.A.).

[17]      Foley v. Hill (1848) 9 E.R. 1002 (H.L.).

[18]      Douglas v. Lloyd's Bank Ltd. [1929] 34 Com. Cas. 263.

[19]      Hartland v. Jukes (1863) L.J. Ex. 1052.

[20]      Parr's Banking Company v. Yates (1898) 2. Q.B. 460 (C.A.).

[21]      Lloyd's Bank Ltd. v. Margolis [1954] 1 All E.R. 734 (Ch.).

[22]      Carter v. Ring (1813) 170 E.R. 1445.

[23]      Winter Garden Theatre v. Millennium (1947) 2 All E.R. 331 (H.L.).

 

American judgment referred to:

[24]      Union Bank v. Knapp 15 Am. Dec. 181 (1825).

 

Scottish judgment referred to:

[25]      Macdonald v. North of Scotland Bank (1942) S.C. 369.

 

            Appeal from the judgment of the District Court of Tel Aviv -Yaffo (Judge D. Levin), dated October 8, 1980, in C.F.201/79. Appeal allowed (S. Levin, J., dissenting). The file was returned to the District Court for continuation of the hearing.

            A. Shavit for the Appellant.

            Y. Meron for the Respondent.

 

 

 

JUDGMENT

 

S. LEVIN, J.

 

1. On January 25, 1979, the Appellant, a company registered in England and a subsidiary of the Israel British Bank Ltd. , brought an action by way of summary procedure in the District Court of Tel Aviv -Yaffo against the estate of the late Walter Nathan Williams, represented by the interim administrators of the estate (the Respondent in this appeal). From the Statement of Claim we learn, that until his death on October 31, 1971, the deceased served as chairman of the board of directors of the Appellant company, and he held five accounts with the bank; on August 8, 1974, the Appellant company went into liquidation and the present action was brought by the liquidators.

            On August 8, 1974 (thus alleges paragraph 3(b) of the Statement of Claim), the state of the deceased's accounts with the Appellant company was as follows:

"(1) The deceased's no. 1 account showed a debit balance of B218,969;

"(2) The deceased's special shares account showed a debit balance of B176,031;

"(3) The deceased's no. 3 account showed a credit balance of B730.79;

"(4) The deceased's no. 4 account showed a credit balance of B151.85;

"(5) The deceased's policies account showed a credit balance of B1,975.75."

 

            Appended to the Statement of Claim were photostatic copies of the last two pages of account no. 1 and the last page of each of the other accounts.

            The Appellant company avers, in paragraph 3(d) of the Statement of Claim, that it set off the credit balances in accounts no. (3), (4) and (5) against the deceased's debit balance in accounts no. (1) and (2) and claimed from the Respondent the balance of B393,149.69, together with interest thereon.

            After rejecting another argument of the Respondent, that the Court lacked local jurisdiction, the District Court dismissed the action in limine on the ground that it was statute-barred; hence the present appeal.

 

2. The learned Relieving President (as he then was), decided that the cause of action was founded on overdrafts by the deceased before his death, together with the accumulated interest on the overdrawn sums, as from the date the accounts had become overdrawn and until the date of the bringing of the action. More than seven years had elapsed from the date of his demise (31.10.71) until action was brought (25.1.79), so that the allegation of limitation of action was well-founded. The Relieving President went on to state:

 

"There is no dispute - indeed, it is apparent from the bank documents appended to the Statement of Claim - that no withdrawals from the deceased's account took place after his death. It follows, therefore, that the last withdrawal from the deceased's accounts could have been made on the day he died, namely, October 31, 1971. That raises the question: when does the cause of action arise, where the subject-matter is an overdraft in a bank account? Counsel for the bank contends, that the cause of action arises on the date the bank demanded payment of the overdrawn amount, in this instance, on January 2, 1979. Counsel for the estate, on the other hand, rejects this view and submits, that the determining date is the day on which the overdraft appeared - and he is right.''

 

After reviewing the authorities cited to it, the District Court formed the opinion that, in the absence of any other specific agreement between the bank and the customer, the bank's right to sue for its money arose on the day the debit balance was created and, as from that time, "the period of limitation starts to run with respect to the debit balance created by the withdrawal." Accordingly, the action ought to be dismissed, in so far as it related to the capital amounts drawn by the deceased, and to the interest payments with which he had been debited, where the dates on which they had become due were more than seven years before the action was brought. The right to claim the interest, with which the accounts had been debited afterwards, had, indeed not become statute-barred, but the sums were so tiny, that the Relieving President assumed there was no point, from the Appellant company's point of view, in continuing to conduct the action "within the limits of the paltry sums of interest that had not yet become statute-barred." He, therefore, dismissed that part of the action summarily, too, but without prejudice to Appellant company's right to bring a separate action therefore.

 

3. In our Court, counsel for the Respondent rightly abandoned the contention that the court lacked local jurisdiction. So there remained but one question to be considered, namely, when is the bank's cause of action created, for the purposes of limitation, in so far as it relates to a debit balance in its customer's account: on the date of the demand for payment (in which case it is not statute-barred) or the date on which the debit balance is created (in which case the claim is statute-barred)? But before I turn to a discussion of the issue on its merits, I must first dispose of certain arguments submitted to us by the Appellant company, and to deal with one argument raised by the Respondent.

 

            (a) In paragraph 3(c) of the Statement of Claim, the Appellant company alleged, that "the deceased expressly and/or impliedly undertook to pay the Plaintiff company the balance of his debt in each of the accounts above stated, on demand." If it turned out, that there had been such an express agreement, the action would most certainly not be statute-barred and the Appellant company should be allowed to prove its factual allegation regarding the existence of an agreement; but in the course of his argument before us, counsel for the Appellant company waived his submission on that score, whereas his submission as to the existence of an implied agreement did not hinge on any particular facts, but rather on the relationship generally existing between a bank and its customer. It was not contended before us, that there was any legal significance in the fact, that the deceased served as chairman of the board of directors of the Appellant company; so the aforesaid issue regarding the date on which the cause of action arose, for the purpose of limitation of actions, remains to be decided by us in its general form.

 

            (b) In the course of the hearing before us, counsel for the Appellant raised the argument, that there had been a waiver on the part of the Respondent of the submission regarding limitation. That matter is not referred to in the learned Judge's judgment, but after judgment had been delivered, the Appellant company applied to have the court record amended (in Motion 7888/80) by the addition of a statement by counsel for the Respondent in the following terms:

 

"For the sake of good order I beg to note, that we are not alleging limitation of action, in so far as the claim could have become statute-barred on October 30, 1978, because we have an agreement to the effect that, with regard to every right of action available against the estate which might have become statute-barred, if at all, on October 30, 1978, the beginning of the period of limitation is postponed to February 1, 1979."

 

            The Court, with the consent of counsel for the Respondent, allowed the Application. On the strength of that it was argued, that the agreement revived the claim that had become statute-barred on October 30, 1978.

           

            Counsel for the Respondent explained to us that, at a certain stage of the proceedings, the possibility (which the Respondent denies) had been mooted of calculating the period of limitation from the date of the deceased's death. Counsel for the Respondent agreed, that if that proposition were indeed correct, the action had not become statute-barred, notwithstanding its having been filed some seven years and three months after the demise, and for that reason the above declaration had been made. After the aforementioned judgment had been given, the Appellant company thought that the Court had actually adopted that proposition and, in order to put the Appellant company's mind at rest, there had been no reason for counsel for the Respondent to refrain from consenting to the amendment, which reflected the actual situation. In point of fact - so counsel for the Respondent argued - the learned Relieving President had not regarded the date of death as the determining date, so the above-mentioned declaration and the agreement referred to therein are of no consequence in our deliberations. In my opinion, the Respondent is right. A perusal of paragraph 9 of the Notice of Appeal makes it quite clear, that the Appellant company, too, attached no importance to the aforementioned declaration, save in so far as it was referring to the Appellant company's interpretation of the District Court's view, namely, that it regarded the date of the deceased's demise as the appropriate date for determining when the period of limitation began to run; whereas when you read the judgment, it becomes quite clear, that the date of the demise was noted there only as the ultimate limit of the last possible withdrawal from the account and that, in the Court's opinion, the limitation started running on the day the debit balance came into existence. The Appellant company did not, in the District Court, dispute the argument that, if its cause of action arose with the creation of the debit balance, rather than with the demand for payment, then the action was statute-barred. In those circumstances the aforementioned allegation of waiver is without substance.

           

            (c) The appeal before us was at first pleaded orally. Counsel for the Appellant company addressed us orally and we then ordered that argument be completed in writing; the Respondent would reply to the Appellant company's submissions, and the latter would be entitled to respond with its own arguments. Only in the course of the Appellant company's rejoinder did a new submission appear, the substance of which is this: examination of the photostat copy of the second page of the no. (1) account shows that, on November 5, 1971 (that is to say, after the deceased's death), there appears a credit balance in the sum of [011]36.95. Details of that credit balance were noted thus; "CHO CL." Appellant company contends, that a credit balance puts a stop to the course of limitation. That argument must be rejected, for two reasons: first, it was not raised in the District Court or in the written propositions or in counsel's oral argument in this Court. It was an assumption accepted by both parties up to the latest presentation of the Appellant company's submissions, that any items in the account, registered therein after the demise, were irrelevant to the issue of limitation. The Respondent rightly applied to have this submission struck out of the Appellant company's argument, since counsel for the Respondent had had no opportunity of referring to that submission and replying to it; secondly, after we had determined, that the agreement referred to in the preceding paragraph was valueless in the present circumstances, as it only related to a certain assumption, that has proved to be without foundation, it is evident that the claim was brought after more than seven years had elapsed from the date when the above-mentioned credit balance had been registered so that, assuming the District Court was right in its general view of the law, the action had become statute-barred.

 

4. Counsel for the Respondent, for his part, argued before us, that the accepted case-law regarding the merging of the various items in a current account into the balance (C.A.251/62 [1]) does not apply to an account that is permanently overdrawn. In the case of such an account (so it was argued before us), the period of limitation should be calculated from the date on which each one of the withdrawals was made. For this submission, he relied on statements made in C.A.345/78 [2]. I find no support for that argument in that judgment. The issue of limitation of actions never arose there at all; all that judgment says is, that the act of debiting an account that is overdrawn does not constitute payment, unless the bank and the customer have otherwise agreed. There is even contradictory authority to the Appellant company's contention: see C.A.323/80 [3]. However, as will appear anon, this submission of the Respondent calls for no decision, since in the circumstances of the present case, the relevant debit balance came into existence more than seven years before the action was instituted.

 

            So we return to the original issue: when, for the purpose of limitation of actions, does the bank's cause of action against its customer arise, where it is based on a debit balance in a current account: from the date it comes into being or from the date of the demand for payment? In order to answer that question, I shall refer to three points, dealing with each in turn:

            (1) the relationship between lender and borrower generally, where the debt is payable on demand; (2) the relationship between a bank and its customer, when the account shows a credit balance; (3) the relationship between a bank and its customer, where the account is overdrawn.

 

5. The Relationship between Lender and Borrower generally, where the Debt is payable on Demand.

            (a) From time immemorial it has been the accepted principle of English law that, in the absence of agreement to the contrary, the cause of action on a debt payable on demand arises immediately on receipt of the loan by the borrower. In the case of Norton v. Ellam (1837) [12], Parke J. states (at page 840), that:

 

"The cause of action arises instantly on the loan."

 

            This was repeated by the court in the case of Jackson v. Ogg (1859) [13], at page 378. In both cases it was held, that the fact that the indebtedness under the loan included interest did not alter the date on which the cause of action was created. According to the principles laid down in both those judgments, the limitation of an action on a loan repayable on demand begins to run on the day the loan is granted. That rule applies equally to a note payable on demand in which, for that purpose, the period of limitation commences with the issue of the note (Y. Zussman, Law of Bills (Duff-Chen, 6th Edition, 5743-1983), p. 381; and cf Re J. Brown's Estate; Brown v. Brown (1983) [14].

            (b) As already noted, the lender and the borrower are at liberty to determine between them, expressly or impliedly, that the requirement of a demand is part of the cause of action. There are instances where the court is prepared to deduce from the circumstances surrounding a certain relationship, that the requirement of a demand is part of the cause of action. For example, it is assumed that a collateral undertaking, such as a guarantee or security for a debt, may not be enforced, unless preceded by a demand as part of the cause of action: Bradford OId Bank v. Sutcliffe (1918) [15]. However, even in that case, the rule applicable in those instances is subject to the interpretation of the express or implied intention of the parties to the transaction; see also, Re J. Brown's Estate aforesaid [14].

            (c) It follows from the foregoing, that when we speak of a debt on a loan repayable on demand, we may be referring to two distinct kinds of case: in the one case, the debt is due to be paid, as it were, "immediately"; in the other, the debt is due to be paid only after a demand has been addressed to the debtor. In the first case, the cause of action arises "immediately" on the granting of the loan; in the other case, the cause of action arises only after the presentation of the demand. In the first case, the claim becomes statute-barred seven years from the date the loan was granted, whilst in the other case, it becomes statute-barred seven years from the date of the demand.

            (d) An examination of the first kind of case mentioned raises a problem: if the loan is indeed due to be repaid "immediately," the borrower must return the loan to his creditor immediately upon receiving it. Since by law, a debtor must seek out his creditor, it would follow that he is not in fact entitled to receive the loan at all, being under an obligation to return it to his creditor on the spot. If he nevertheless receives the loan and does not return it "immediately," he is bound to compensate his creditor, under section 11(b) of the Contracts (Remedies for the Breach of Contract) Law, 5730-1970 (hereinafter called "the Remedies Law"). Such a result is obviously unacceptable and the parties' intention is that the borrower is not supposed to return the loan unless called upon to do so; and so long as the borrower is not called upon to return it, he is not expected to do so and there is, of course, no ground for charging him with compensatory interest. How can all that be reconciled with the proposition, that the cause of action arises with the receipt of the loan?

            Mr. Meron, for the Respondent, tried to compare the requirement of a demand, in the kind of case in question, to a notarial caution, such as was required before the Remedies Law, by the Ottoman Civil Procedure Law, and with respect to which it has been held that, although such caution had to be served as a preliminary step to a claim for damages for breach of contract, its service does not constitute a part of the cause of action for the purpose of limitation of actions: C.A.279,280/53 [4]. But that does not help us here, for while the notarial caution may not have constituted a part of the cause of action, it did serve as a prior condition to an action, within the meaning of that term in Rule 94 of the Civil Procedure Rules. 5723-1963; thus if the Defendant alleged in his Defence, that the notarial notice had not been served before action was brought, the claim would be dismissed, whereas in the kind of case we are dealing with here, the non-delivery of a demand does not cause the action to fail and the Statement of Claim may itself be regarded as the demand for this purpose.

            (e) The solution to this mystery, it would seem, is to be found in the recesses of ancient English law. In days of yore, monetary indebtedness was regarded as having been created by the receipt of the consideration, a quid pro quo, rather than by the promise to pay the debt. The cause of action arose, accordingly, immediately upon the granting of the loan; but it was generally agreed that in practice, the debtor would return the loan only on demand. So long as no demand was forthcoming, he was not expected to repay his debt, nor was he obliged to pay damages. The cause of action, for the purposes of limitation, commenced on the date of the receipt of the loan, but on the other hand, the demand did not constitute a prior condition to the institution of an action and even less a part of the cause of action (A. L. Corbin, On Contracts, (St. Paul, vol. 3A, 1960) p. 75. Thus in the Scottish judgment, delivered in the case of MacDonald v. North of Scotland Bank (1941) [25] (which departed from the English decision in the case of Joachimson v. Swiss Bank Corporation (1921) [16], which held that the presentation of a demand by the customer to the bank was a necessary ingredient of the cause of action for the refund of the monies standing to his credit in his account), it was hinted by Lord Cooper, that the forementioned rule of law was based on the ancient writ of indebitatus, in which a demand was required as part of the cause of action.

            (f) It is difficult to base the above rule, applying to the first kind of case, along with its component parts, on grounds of legal logic, just as it is difficult to regard it as being particularly consistent. As with many rules of common law, it was probably created in order to provide a solution to practical needs and, in the course of time, became a part of the case-law as a rule that no one bothered to question. Indeed, if the notarial caution has been described as a purely incidental part of the cause of action, the demand referred to could be called the incidental to the incidental part thereof. Whenever the legislature wanted to depart from the rule in order to provide that the cause of action on a debt payable on demand was created with the demand, it specifically said so: see, the Prescription and Limitation (Scotland) Act, 1973, and in England, sections 5 and 6 of the Limitation Act, 1960.

            Since the rule has been accepted in the world of commerce, that the period of limitation of a debt payable on demand is to be calculated from the date of the granting of the loan (whatever its sources may be), and in the absence of any legislative provision to the contrary, I see no reason to depart from it, even where we are referring in our country to a debt payable simply upon demand. In point of fact, we have not been asked by the parties in this appeal to do so.

           

6. The Relationship between a Bank and its Customer, when the Account shows a Credit Balance.

            The relationship between a bank and its customer has never lent itself to a precise definition within one of the recognized legal categories. When a customer deposits a sum of money with his banker, is there created between them a relationship of bailment or deposit? Is the bank considered to be the customer's trustee? Is the customer looked upon as one who has lent money to the bank? Halfway through the last century it was held, that the relationship between a bank and its customer, who deposits monies with it, is that of lender and borrower: Foley v. Hill (1848) [17]. We would seem, however, to be dealing with a more complex relationship: the bank is not obliged to seek out its creditor, the customer, and its obligation to return the loan does not extend beyond the branch in which the account is managed at the usual working hours. The bank may not refrain from honouring the customer's withdrawals without reasonable advance notice. The bank does not pay out except against the customer's written demand, while the customer, for his part, undertakes to behave with a reasonable degree of caution in giving written instructions, so that the bank is not misled and in order to avoid, as far as possible, the opportunity of forgery by others. The demand is an integral part of the customer's cause of action against the banker, so that the limitation starts running from the date of the demand and not from the date the credit balance comes into existence. It was so held in the above-mentioned Joachimson case [16] in 1921, a decision that has always been regarded in England as the locus classicus of banking law.

            Counsel for the Respondent, Mr. Meron, opened a frontal assault on that decision which, in his submission, is unsuited to modern developments in commercial life. That rule has not been adopted in Scotland (see, the Macdonald case [25]), and it is doubtful whether it applies in South Africa: D. V. Cowen, On the Law of Negotiable Instruments in South Africa (4th ed. by D. V. Cowen and L. Goring, 1966), p. 661. On the other hand, it applies to the United States: see A. H. Michie (ed.), on Banks and Banking (Charlotteville, vol. 5B, 1973), p. 126. I myself do not share that criticism, but whatever the position may be, that rule has been adopted and become so well-established in our country's case-law, that it seems to me that there is no way of altering it other than by legislation. Cf. C.A.251/62 [1], C.A.395/67 [5], Cr.A.515/75 [6], at p. 688, and C.A. 323/80 [3], at p. 679. One of Mr. Meron's arguments turns on those cases, where the account in question has been dormant for many years, and if the rule in Joachimson’s case [16] were applied, the bank would be obliged to preserve documents and records relating to the account for dozens of years, in fact, without any limitation of time. English case-law has found a way of overcoming such situations, by creating a presumption of fact, in the circumstances of a specific case, that after dozens of years of inactivity in an account, the bank's debt must be presumed to have been cleared off: Douglas v. Lloyds Bank (1929) [18].

            Mr. Meron relies on that judgment as proof of the unsatisfactory consequences of the Joachimson case [16], so much so, that the only way to overcome them was by creating a presumption of fact, as described above. But the Israeli legislator has intervened in this matter, perhaps unconsciously, and has restricted the effect of the decision in Joachimson [16] in relation to inactive accounts. Section 13B(a) of the Banking Ordinance, 1941, as amended in the Banking Ordinance Amendment (No. 15) Law, 5741-1981,provided as follows:

           

"A banking corporation shall endeavour to communicate with the owner of an inactive deposit soon after the due date for refunding the deposit; as regards a deposit to be refunded on demand, the due date for its refund shall be deemed to be the date on which the deposit became inactive."

            An inactive deposit was defined in section 2 of the Ordinance, as: "A deposit, whether in Israel or foreign currency, in respect of which ten months have elapsed since the instruction was received from the owner of the deposit."

           

            I have said, that the intervention of the legislature was perhaps unconscious, because a perusal of the Banking Ordinance Amendment (No. 14) Bill, 5741-1981, would seem to indicate, that the object of the amendment was to prevent the loss in value of inactive deposits rather than to restrict the application of the Joachimson rule: but the wording adopted had more far-reaching consequences. As stated above, I see no reason to depart from that rule and, in my opinion, the Respondent's arguments on this matter should be rejected.

           

7. The Relationship between a Bank and its Customer, where the Account is overdrawn.

            The Appellant company has argued before us in favour of a legal symmetry between the situation where the customer's account at the bank was in credit and that where it was overdrawn. The Appellant company further contended, that there was no support, both in the authorities and in professional literature, for the view that no distinction could be drawn between those two situations. Let us review the authorities and literature on this matter:

            (a) In the case of Hartland v. Jukes (1863) [19], the question arose as to when limitation begins to run with respect to a claim brought on a general guarantee, given by the guarantor of a debit balance in a debtor's account with a bank. Pollock J., delivering the judgment of the Court, held that the cause of action against the guarantor had not arisen at the time the debtor's debt had been created, but after the guarantor had been served with a demand. The action against the guarantor had not, therefore, become statute-barred. No one in that case disputed the view, that the principal debtor's debt had been created by the withdrawal.

            (b) In the case of Parr's Banking Company v. Yates (1898) [20], the Court departed from that rule, as far as the cause of action against the guarantor was concerned. Vaughan Williams J. held, that the right of action had been created with the appearance of each item of debit balance, and so both the principal debtor and the guarantor were entitled to benefit from the defence of limitation as from such date.

            (c) Similarly, in the Bradford Old Bank matter [15], already referred to, the defence of limitation, raised against a claim brought on a guarantee given to secure the debit balance on a current account, was considered. The Court held, that the demand does not usually constitute a part of the cause of action for the refund of the debt, but this does not apply in the case of a guarantee. In that case, the answer to the question, whether or not the demand constitutes part of the cause of action, depends on the construction of the document in question, although prima facie, a demand is required. As regards the guarantee under consideration there, the Court preferred the approach adopted by the Court in the Hartland Case [19] to the opinion expressed in the Parr's Banking Company Case [20] .

            In all three of those judgments it was not disputed, that the demand was not part of the bank's cause of action against its customer, where the claim was based on debit balances in the latter's account, so there is no substance in the Appellant company's submissions in this respect.

            (d) The Appellant company also placed reliance on a judgment given at first instance in England, namely, the matter of Lloyd's Bank Ltd. v. Margolis (1954) [21]. The facts in that case were these: a bank received from its customer a deed of mortgage on certain land to secure his overdraft in current account. The bank sought to foreclose on the mortgage and demanded payment of the debt, but it was met with the defence of limitation; if the determining date was the date of the overdrafts, the claim had become statute-barred, whereas if the date of the demand was the decisive factor, the defence ought to be rejected. The Court noted that the issue, whether the demand was part of the cause of action, was one of construction of the instrument in question and, in its opinion, the proper interpretation called for the service of a demand before action was brought. Upjohn J. also added the following remarks, at p. 738:

 

"In my judgment, where there is a relationship of banker and customer and the banker permits his customer to overdraw on the terms of entering into a legal charge which provides that the money which is then due or is thereafter to become due is to be paid "on demand", that means what it says. As between the customer and the banker, who are dealing on a running account, it seems to me impossible to assume that the bank were to be entitled to sue on the deed on the very day after it was executed without making a demand and giving the customer a reasonable time to pay. It is indeed, a nearby correlative case of that decided in Yoachimson v. Swiss Bank Corporation...

            In this case the agreement has provided quite clearly what is to be done before the bank can sue. They must demand the money."

 

            It is quite evident, that that statement relates to the construction of the document under discussion and that the court was disposed to insist upon a demand as part of the cause of action, because the document in question was by way of a security. The Court does not refer to the case where the issue is when does the cause of action generally arise in the relations between a bank and its customer, the latter's account being overdrawn and there is no document defining the relationship between them.

           

8. A review of the legal literature reveals, that the majority of scholars support the view negativing the application of the rule in Joachimson [16] to an overdrawn current account; see, for example, J. R. Paget, Law of Banking (London, 9th ed., by M. Megrah and F. R. Ryder, 1982), p. 79; T. G. Reeday, The Law Relating to Banking (London, 4th ed., 1980), pp. 47-48; H. P. Sheldon, The Practice and Law of Banking (London, 10th ed., 1972), p. 199; C. H. S. Preston and G. H. Newson, On Limitation of Action (London, 3rd. ed., 1953), p. 29, and also Cowen, supra, who notes that that is also the attitude in South Africa. Michie, too, in his monumental essay mentioned above, notes that in the United States, as well, the period of limitation with respect to a debt arising from a debit balance in a bank, is calculated from the date on which the debit balance is registered in the account. The sole authority on which the learned author relies to support his conclusion is to be found in a judgment, given in 1825 in the Commonwealth of Massachusetts, namely, Union Bank v. Knapp, (1825) [24], p. 181. I have had a look at that judgment and it seems, that the question of the meaning of the term "a debt payable on demand" was not in issue. Nevertheless, the Court took it for granted, that the overdrafts created an immediate indebtedness, so that the discussion turned primarily on the question of whether the indebtedness came into existence with each withdrawal or only with the latest debit balance in the account. The fact that no particular or additional judgments on this point have been delivered in the United States during the 150 years that have elapsed since the judgment would seem to indicate that that rule has been accepted without question in that State, which is one that boasts a highly developed banking system.

            The only author, to whom our attention has been drawn as holding the opposite view, namely, that favouring the Appellant company, is J. M. Holden, who in his book The Law and Practice of Banking (3rd. ed. , 1982), comments, at p. 41, that there exists an understanding between the bank and the customer, that the bank shall call in its debt by notice. The author comments, however, that the question is of little significance, as it is difficult to imagine a bank leaving an overdrawn account dormant for a long time without calling in its debt. Mr. Meron rightly drew our attention to the fact that, in his book, Law of Banking (London, 5th ed.), Lord R. S. T. Chorley calls Holden in aid, but nevertheless takes the view, that limitation starts running on the day the loan is granted (ibid., at p. 22). At the same time, the author notes there, (in footnote 4), that while there exist differences of opinion among scholars on this point, he prefers that of Grant, On Banking (7th ed.), p. 182, who favours the existence of a single rule with respect to a credit balance and debit balances in a customer's account with the bank.

 

9. If one adopts the assumption that, in the absence of an agreement to the contrary, the cause of action on a debt payable on demand arises with the creation of the debt, it is difficult to appreciate why it is necessary to distinguish between an ordinary creditor and one who happens to be a bank and to bestow on the latter privileges denied the ordinary creditor, the fact that, as a result of the decision in Joachimson [16], assymmetry has been created in the formation of the cause of action in various situations of credit and debit balances, need not deter us. Symmetry is an aesthetic concept rather than a legal one. In the Joachimson Case [16], the special reasons that led the Court to require the customer to serve a demand on the bank as a prior condition to the forming of a cause of action were explained. Those reasons do not exist where the customer's account is overdrawn, so there is nothing to prevent us reaching the opposite conclusion. In practice, I see no reason for preferring a bank, which is a creditor for a sum of money owed it by its customer on account of a debit balance in a current account, to any other creditor of a debt payable on demand.

            Even were I to consider the lex ferenda to be that contended for by the Appellant company, I would still not allow the appeal. The existing rule has been formulated and accepted by nearly everybody. As the learned author Holden, supra, has remarked, the number of instances where the question in issue before us is likely to arise is very small. If the existing rule is, indeed, so undesirable, let the legislature come and say so.

           

10. I have read my distinguished colleagues' opinions and I find myself unable to agree with their conclusions. Incidentally to a consideration of a comparatively limited issue of the relationship of a bank to its customer, whose account happens to be overdrawn, my distinguished colleagues feel justified in overturning a general rule of law concerning the relations between lender and borrower, which has become deeply rooted in the whole of the Anglo-Saxon world as well as in Israel - a rule. whereby the period of limitation, in the case of a debt payable on demand, commences on the day on which the debt is created, and not on the date of the demand. In the arguments presented to us that question was not raised as an issue in dispute, and from this Court there will go forth, ex curia as it were, a far-reaching rule of law, revolutionizing time-honoured arrangements, well-established in the world of commerce!

            Admittedly, the theoretical foundation for the present rule is somewhat shaky; but the greatness of the common law lay in its ability to formulate practical rules that have stood the test of time, even where the theoretical source was somewhat doubtful. The fact that the theoretical source of a legal norm is doubtful does not render the norm undesirable. Observe what may be the result of adopting the majority opinion: a lender, who has not demanded of the debtor payment of his debt for very many years, can start the period of limitation by presenting a demand, thereby obliging the lender to preserve the documents pertaining to his account almost indefinitely. Is that really what a normal lender and borrower had in mind with respect to a debt repayable on demand?

            In my judgment, this appeal should be dismissed.

           

M. BEN-PORAT, V-P: All the conditions, on which the creation of a certain obligation is made dependent, must, as we all know, be complied with before the other party to the contract becomes entitled to demand its performance. That is a fundamental rule of contract law which, in the absence of a flaw nullifying some term or other (such as one that contradicts a compelling rule of law), must be maintained by virtue of the principle, that freedom of contract and the will of the parties should be respected. Moreover, I accept the rule, that found its expression in Corbin's book (supra), whereby, when a party to a contract promises to perform a certain obligation (whatever it may be) "on demand" or "within a specified period of time after demand" it is reasonable to construe that as meaning, that an actual demand on the part of the creditor becomes an essential condition in the formation of the right to have that obligation performed. Only on delivery of the demand (besides the other conditions, if any), as agreed upon, does the creditor's cause of action crystallize, so that in any event, only then does the period of limitation of that right begin to run: section 6 of the Limitation Law, 5718-1958.

            However, as fully explained in the opinion of my distinguished colleague, S. Levin, J., for reasons that have their origin "in the recesses of ancient English law," a departure from the above rule has taken root in English law, with regard to a monetary obligation to be satisfied "on the demand of the creditor." In days of yore, a monetary obligation was considered to be the consequence of the receipt of consideration (a quid pro quo), rather than the outcome of a promise to perform the obligation. Following that line of thought, notwithstanding the condition that payment will, as stated, be made "on the demand of the creditor," it was held there, that the creditor's cause of action comes into being with the giving of "the consideration." In other words, the cause of action for payment of a monetary debt is formed even without a demand, so that in any case, the period of limitation of that right also commences at the same moment. Pursuing that same line of thought, the drawer of a promissory note or the acceptor of a bill of exchange, payable "upon demand," can be called upon to honour that note immediately, so that the cause of action comes into being with the issuing of the note and the period of limitation starts to run at the same time, the reason therefore being, that the holder of the note can in any case demand its payment immediately: Zussman, in his aforementioned book (and if the note has been deposited with a trustee - on the day the latter is bound to deliver it to the creditor, even if he has not done so: C.A.209/40 [11]).

            Within the framework of the exception, rightly described in legal literature as peculiar or extraordinary, there is an exception to the exception (which fits the rule) as regards the relationship between a bank and its customer, whose account shows a credit balance. In the leading judgment of Joachimson [16] it was held, that the bank (the borrower) need pay the customer (the lender) his money only after the latter's demand, and this approach has been adopted in Israel:

C.A.251/62 [1], at p. 77, C.A. 679/76 [7], at p. 786, and C.A.323/80 [3], at p. 679. On the other hand, the relationship between the bank and its customer, whose account is overdrawn, has remained within the scope of the extraordinary exception, although it is undisputed that that relationship, conversely, is also that of lender and borrower: C.A.395/67 [5], at p. 22, C.A.323/80 [3] aforesaid, at p. 679, and Cr.A.595/83 [8].

            A similar approach (though, it would seem, not a truly identical one) may, at first sight, be discerned from the summarization of the rule in the Restatement, Contracts, 262, cited in Corbin's book at p. 77, note 53. I quote the passage as it stands:

           

"Generally there can be no right of action on a contractual promise in terms conditional until all the facts stated as conditions have happened or been performed. But a peculiar rule prevails in regard to promises to pay money debts on demand. Such a promise to pay one's money debt is regarded as unconditional unless the parties by some more express language indicate a contrary intention, or unless usage as in the case of bank deposits prescribes a different rule. In other promises in terms conditional on demand, no duty of immediate performance arises without a demand, and even in such promises to pay one's own debt, interest is allowed as damages only from the making of a demand."

 

            We perceive, therefore, that the exception is described there as "peculiar." From the language of that passage, one cannot conclude what "money debts" are being referred to. It follows from the text (ibid. at pp. 76-77), that the exception applied mainly to negotiable instruments payable "upon demand," since with regards to those, the assumption is (as in the passage above quoted), that the words "on demand," standing on their own, do not reveal a genuine intention to make the maturing of the debt (as distinct from charging interest) conditional on an actual demand. Accordingly, an action may be brought on such an instrument without a prior demand, and there are some who regard the action as constituting the demand. A certain degree of astonishment on the part of the author is rightly felt when he says:

           

"The peculiarity of the case is that the action is not thought to be premature."

           

            With respect, I share that astonishment, even though, as regards the principal debtor on a note (the maker of the promissory note and the acceptor of a bill of exchange), that approach has been absorbed into our law (as shown in the authorities I have cited above). But I must straight away confess, that the logic of that rule has never been apparent to me. Let us assume that the same person signs a promissory note "on demand" in favour of one creditor (for instance, because there are no cheques left in his cheque-book) and a cheque to the order of another creditor, drawn on the bank where he holds a current account. As far as the cheque is concerned, at least, if the proper date of issue has been inscribed on it, there can be no doubt, that it is tantamount to a payment in cash, that is to say, that the intention is to pay the amount due immediately on its being presented to the bank. The same applies, in the example given above, to the promissory note, (unless some other condition, in addition to the "on demand," was introduced into the agreement between the parties). However, while the holder may sue on the note without previous demand, he may obviously sue on the cheque only if he has first of all presented it to the bank and it has been dishonoured. It is the dishonouring of the cheque that gives rise to the right to sue on it, so that it is presented to the bank a few weeks later, the cause of action will arise on the later date (if it is dishonoured), and the period of limitation also begins to run as from that date (see section 96(a) of the Bills of Exchange Ordinance [Revised Version]). One may wonder why the situation is different, where the debtor has (in the above example) given a promissory note payable "on demand," and the payee has taken it without demanding its payment on the spot; and where such demand is made only a few weeks later (as in the case of the holder of the cheque) and encounters a refusal, why that is not regarded as constituting the cause of action and the beginning of the period of limitation.

            But the negotiable instrument is not the central feature of our present deliberations, and we may leave the case-law to be pondered on some other time; it may well be that the present rule has taken such deep root, that the intervention of the legislature is needed to alter it.

            An identical exception was recognised in the United States with respect to an antecedent debt, that the debtor had promised to clear off "on demand": Corbin, supra at p. 77.

            But for our purposes, it is important to stress - if I have fully grasped the situation - that the exception extends, particularly in the United States, to an existing debt, by way of a quid pro quo, or an antecedent debt, accompanied by a condition, that it is to be paid "on demand," and without any embellishment designed to reveal the parties' intention beyond that expression. Such is the situation, for example, where the debtor has received from the creditor the goods he ordered and in return, has given the latter a promise to pay "on demand": see the illustration quoted in the Restatement, supra, in which the creditor "sells and delivers" to the purchaser the vehicle he has ordered and receives in return the debtor's promise to pay the purchase price "on demand."

            That, however, is not the case in point here, and I have found no contradictory case-law in Israel. In the matter in hand, the commercial transaction between the bank and its customer is one of the giving of a loan (by way of overdraft ) which - so it must be assumed - is in the interests of both parties. The retention of the money in the hands of the borrower, therefore, constitutes the subject-matter of the agreement, and if you deprive it of that character, you have emptied the contract of its contents and ignored its purpose. Indeed, in 51 Am. Jur. 2d. (Rochester and San Francisco) 697, we found that -

           

"...in many cases involving contracts for the payment of money on demand (most of them loan transactions) the view has been taken that actual demand was required and that the Statute could run merely from the time of demand."

 

(My emphasis - M.B.-P; and see the authorities cited in footnote 9, ibid.)

           

            Furthermore, it is noted in Corbin, supra at p. 77, note 55, and in the text immediately following, that in actions on the promise (that is to say, as distinct from the existing or antecedent debt as the cause of action), it has been held in several judgments, that the demand is an essential component, that must be pleaded and proved. Among the authorities, I have also found English cases: see, for example, Carter v. Ring (1813) [22] (where it was held, on the strength of the parties' intention, as indicated by the document, that what they had in mind was an actual demand).

 

            I want to stress, that the ancient exception I have been discussing hitherto is itself founded, as it were, on the intention attributed to the parties, whereby, the debt being presently existing or antecedent, the parties are not presumed to propose actually turning the demand, on which the undertaking to pay has, technically, been made dependent, into an integral part of the cause of action (as distinct from the basis for awarding interest). At the same time (and to my mind, this is a contradiction in terms), they admit in England, that the whole concept results from an approach long out of date. There is no doubt that the rule, under which a contract is construed in accordance with the presumed intention of the parties, was long ago adopted and has become deeply rooted in Israel, too (see, now, section 25(a) of the Contracts Law (General Part)). The intention is to be deduced from the contents of the contract and if it cannot be implied from it, then it is to be inferred from the circumstances. But as a test for determining intention nowadays, it is difficult to accept an ancient view that has become discredited. In the current reality of Israel, such an approach is a kind of alien concept, opposed to well-established principles, inter alia, the principle that the presumed intention of the parties to a contract is the determining factor. It is both lex lata and ferenda, whilst the ancient exception, described even in its native land as odd and puzzling, contradicts that test and the accepted policy in Israel, as I shall demonstrate anon. Accordingly, in my judgment, the aforementioned exception should be regarded as incompatible with the conditions in Israel, within the meaning of the proviso to Article 46 of the Palestine Order-in-Council, 1922. My view derives also from the fact, that the overriding principle of presumed intention has been absorbed, and rightly so, into our law, whereas the said exception (which is incompatible with that principle) ought to be rejected. The exception has not so far been adopted in our case-law, so that this is not a case that calls for the intervention of the legislature.

            I have already hinted, that we are dealing with a commercial loan transaction, and that it is the use of the loan monies in the hands of the lender against profits that the borrower enjoys, within the course of his business, from that use, as long as it lasts, that constitutes the subject-matter of the loan contract. The condition, whereby the repayment shall be "upon demand" (namely, the lender's demand), only enables him to bring the transaction to an end whenever he wishes. But as long as it is worthwhile, in his opinion, he may elect to let the transaction go on even for years on end, beyond the period of limitation (unless the borrower has returned the loan money on his own initiative). All that stands, in my view, in complete contradiction to an implied intention, is that there is an obligation to repay the loan immediately on its receipt. I see no point in distorting the intention ascribed to the parties, by relying on an old and outdated view, especially since even in the Anglo-Saxon world, the exception was not intended to apply to a commercial loan agreement between John Doe and Richard Roe, even though it is to be repaid "upon demand," as distinct from a present or antecedent monetary debt (see above).

            Furthermore, I am inclined to think (without deciding the matter), that the demand must be accompanied by the allotment of a reasonable time to perform the obligation, the length of time to be determined according to the circumstances of each given case. This does not mean, that the passage of time necessarily postpones the course of limitation or necessarily prevents the creation of the cause of action, but this follows, looking at it in the light of fair behaviour, that Israeli law requires of the parties to a contract (especially since the Contracts Law (General Part)). As the case in question preceded the Contracts Law (General Part), I propose to rely, for my opinion, on the case-law relating to an entirely different subject, which nevertheless has a bearing on the accepted general approach.

            It has long been held, that a person, who has given permission (or a "licence") to another to use his property (such as to enter upon his land for some purpose), even a permission customarily described as "bare," and who now wishes to revoke it, must give the licensee, as a sine qua non, notice of revocation with a reasonable period of time elapsing between that notification and the filing of the action. Otherwise (as has been decided - perhaps as an extraordinary step), the ground for eviction is incomplete: C.A. 160/62 [9], at p. 1779, and the authorities cited there. Moreover, if the permission was not "bare" only, but for a consideration, the notice had to state a reasonable extension of time (it was not enough that, in actual fact, the licensor allowed a reasonable time to elapse): see with respect to the distinction C.A. 96/50 [1], at p. 477, 479. Support for my line of thought, that receipt of consideration for the user (whether monetary or in land) is a matter that should be taken into account when construing intention, may be found in the English judgment concerning a licensee in Winter Garden Theatre v. Millenium (1947) [23], at p. 335 (in the judgment of Lord Simon).

            In my judgment, it is inconceivable that a borrower in a commercial transaction (and perhaps even in a loan granted as a favour) should not benefit from the same degree of consideration under Israeli law as a licence under a "bare" permission, as described.

            I should not be understood to imply, that the status of licensee still exists after the coming into force of the Leasing and Lending Law, 5731-1971 (hereinafter called "The Lending Law," a problem that we need not resolve in this appeal.

            Further support for my line of thought may be found in the provision contained in section 29(b) of the Lending Law whereby, if "the period of lending has not been agreed on or the parties have continued to maintain it after the expiration of the period agreed upon without fixing a new term, each party may bring the lending to an end by giving the other party notice a reasonable time in advance" (my emphasis - M. B-P). That is to say that, despite the fact that the licence to possess and use the property was granted without consideration (definition of "lending" in sec. 2b of the Lending Law), the legislator ensured that the borrower would not be evicted on the spot and that conduct towards him should be fair. I am aware that that Law is later than the period relevant to our case, but it is a continuation, or a kind of continuation, of the concept of the bare licence under the law that preceded it."

            In the same spirit, section 41 of the Contracts Law (General Part) provides, where there is no agreement on the date for the performance of a contractual obligation, that it is to be performed "a reasonable time after the contract has been concluded, on a date notified by the creditor to the debtor reasonably in advance" (my emphasis - M. B-P). (The proviso does not appear in section 9(a) of the Law of Sale, 5728-1968, as regards the date for the delivery of the commodity, not delivered immediately on the completion of the contract).

            But for our purposes, there suffices a demand on the part of the bank as an essential component for the creation of the cause of action against the customer.

            My opinion is, therefore, that the bank's action was not statute-barred and in this sense, the appeal ought to be allowed. The case should be returned to the District Court for trial on the merits. I would award costs against the Respondent in both Courts in the sum of IS. 500,000.-, linked from today and until actual payment.

 

S. NETANYAHU, J.: As my distinguished colleagues have explained, it is a long-established rule in common law that, for the purposes of limitation, the cause of action on a loan debt repayable on demand arises without a demand, immediately on the granting of the loan. Such is also the situation in the relationship between a bank and its customer, it being regarded as a relationship between lender and borrower, except that in this case, there is an exception to that rule, namely, the exception laid down in the Joachimson Case [16], to the effect that whenever the customer has a credit balance and the bank is the debtor, the period of limitation commences against the bank only with the date of the demand.

            The rule in the Joachimson Case [16] has been adopted in our case-law, too, as stated in my colleagues' opinions. As my colleague S. Levin, J. demonstrated, there exists an additional exception in the common law, in an action against guarantors, that there, too, the period of limitation starts to run only after the demand. In that respect, in our country, section 8 of the Guarantee Law, 5727-1967, applies, and this provides, that the creditor is in no way entitled to demand of the guarantor fulfilment of the guarantee, without first requiring the debtor to perform his obligation, save in the case of one of the three exceptions set out in that law.

            The parties before us do not dispute that rule. The dispute between them turns only on the issue, whether the exception to that rule, laid down in the Joachimson Case [16], ought also to apply to the action of a bank against its customer, whose account is overdrawn. Were the dispute limited to this alone, I should be inclined to adopt the view held by my colleague, S. Levin, J., that the ratio decidendi of that judgment necessitates distinguishing it from the circumstances arising in cases, where the bank is suing a customer, whose account is overdrawn.

            However I, too, am unhappy about that ancient rule and I, too, like my two colleagues, am dissatisfied with the degree of logic in making a loan debt repayable on demand, repayable immediately without the need for a demand for the purpose of the course of limitation. Had our case-law already absorbed such a rule, constituting an exception to the principle that no cause of action arises unless and until all the conditions for its creation have become crystallised, or were I convinced that it had become an accepted and established custom of bankers in our country, then I would accept it without demur. But as I have already remarked, in our law, it is precisely the exceptions to the rule (the rule in Joachimson's Case [16], as regards case-law, and as regards actions against guarantors, in the Guarantee Law), that are compatible with the proper principle, that have in fact been accepted. The rule itself has not been adopted in the case-law and it has no application here, save in the case of a principle debtor under a promissory note (as was explained by my colleague, the Vice-President). Nor have we heard from counsel for the Respondents any submission, that a departure therefrom would bring about a change in banking practice that would harm the banking business system.

            In view thereof and since that rule has not taken root in our country, even during the period when we were referred to the common law by virtue of Article 46 of the Palestine Order-in-Council, why should it have become acceptable without question and part of our law today, after we have ceased to be subject to the common law?

            Although the parties have not argued against it, there is no justification for our abetting in the absorption of this alien and outlandish concept into our legal system.

            I share the opinion of the Vice-President, that the appeal ought to be allowed and the case returned to the District Court for trial.

 

 

            Resolved by the majority, with S. Levin, J., dissenting, to allow the appeal, to reverse the judgment of the District Court and to return the file to the District Court to be tried on the merits. The Respondent will pay the costs of the appeal in both instances in the sum of IS. 500,000.-, linked to the date of the giving of this judgment.

 

Given this day, 27 Ellul 5744 (24.9.84).

 

CA 6601/96 Appeal and Counter-Appeal

 

1.   AES Systems (appellant in appeal and respondent in counter appeal)

2. Bamberger Rosenheim Ltd. (appellant in appeal and respondent in counter appeal)

v.

1.  Moshe Sa’ar (respondent in appeal and appellant in counter appeal)

2.   State of Israel (respondent in appeal and appellant in counter appeal)

 

 

The Supreme Court Sitting as the Court of Civil Appeal

[August 28th, 2000]

Before President A. Barak, Justices T. Or, E. Rivlin

 

Appeal and counter appeal on the Judgments of the Tel-Aviv District Court (Justice A. Goren) on June18th, 1996 in CC 1331/87, 500/88, 565/89.

 

Facts: Appellant No.1 developed independent computer word processing systems.  Appellant no.  2 was the exclusive distributer of the systems in Israel, and also provided its customers in Israel with maintenance and repair services.  The respondent had been an employed by the appellant as a computer technician, and had at the time of his employment, signed both an agreement not to compete with the appellant in anything related to the marketing and repair of Linear systems, as well as an “Agreement to Protect Confidentiality,” according to which he was obligated to maintain the absolute confidentiality of information that he may obtain in the framework of his employment.

 

The respondent was fired after twenty eight months of work, and started a business of computer systems services.  He advertised his services in the newspaper as a repair and maintenance technician for computer systems, including Linear systems, he approached the customers of the appellant directly, using a customer list of the appellant’s.  The newspaper advertisement led to a contract with The Armament Development Authority (RAFAEL-operated by respondent number two), according to which respondent would provide Linear services to RAFAEL.  These services replaced the repair and maintenance services that had been given in the past to RAFAEL by the appellant.

 

Against the background of these events three suits were filed in the District Court.  In one suit, in the framework of which a temporary injunction was issued prohibiting the respondent from dealing directly or indirectly in the sale or provision of service to Linear word processors for a period of eighteen months from the day the respondent was fired, which did not apply to the contract with RAFAEL, the appellant sued the respondent, for violation of his obligations to it, for doing damage to its property rights and its reputation, and for appropriating its trade secrets.  In the second suit the appellants claimed that the respondent made use of the magnetic disks and diskettes which store backup programs, application programs and diagnostic programs that were developed by the appellant and disks that were prepared for use by them, thereby doing damage to their property rights, and violating their copyright.  In this suit it was claimed that RAFAEL is assisting the respondent in his prohibited actions.  The appellants demanded damages from the respondents, and from RAFAEL. RAFAEL filed a third-party notice.  The third suit, directed by the appellant against RAFAEL, sought the return of hardware equipment and software lists that were lent by the appellant to RAFAEL and for payment of fair use.  RAFAEL filed a countersuit in which it sought removal of a barrier that the appellant created in its workspaces.  It also demanded equipment that it purchased and did not receive, and payment in the amount of NIS 7,022 for expenses it incurred as a result of violation of the agreement that the appellant had with RAFAEL.  Consideration of all these suits was joined. 

 

The District Court (Vice-President, Justice A. Goren), in its judgment, dismissed the appellants’ claims inasmuch as they related to violation of copyright or damage to reputation.  It was also held that the respondent violated the agreement not to compete with the appellant’s business, and that the respondent made use of the customer list of the appellant within the eighteen month period, and that a contract with RAFAEL resulted from the violation of the agreement not to compete.  It was also held that it was not proven that contracts with other customers resulted in agreements between those customers and the respondent, within the eighteen month period, and therefore it was not shown that agreement of the respondent in this matter was violated.  The court also held that as a result of the agreement between the respondent and RAFAEL, RAFAEL ceased receiving Linear System maintenance services from the appellants.  The court determined compensation for the appellants in the amount of $25,000.  Additionally, the State of Israel (under whose aegis RAFAEL was operating) was ordered by the court to pay the appellant for the value of certain hardware and software items, which were given to RAFAEL by the appellants, and which remained in their possession.  The appeal and the counter-appeal were directed against the judgment of the District Court.

 

Held:  The Court allowed the respondent’s appeal voiding the award of damages to the appellant for the contract with RAFAEL.  The court denied the appellants’ appeal and the appeal of respondent no. 2.  The Court also denied the respondent’s appeal inasmuch as it related to software and hardware. The appellants were ordered to pay the respondent’s costs in the sum of NIS 15,000.

 

For the appellant—Z Hubers

For Respondent no. 1 —A. Loit

For Respondent no. 2 –R. Zakai-Newman

 

Basic laws cited:

Basic Law: Human Dignity and Liberty, s. 8.

Basic Law: Freedom of Occupation, s. 4.

Legislation cited:

Contracts (General Part) Law 5733-1973, ss. 19, 25(b), 30, 31..

Restrictive Trade Practices Law 5748-1988.

Commercial Torts Law 5759-1999.

Contracts (Remedies for Breach of Contract) Law 5731-1970, ss. 3(4), 4.

 

Israeli Supreme Court cases cited:

CA 614/76 Jane Doe v. John Doe IsrSC 31(3) 85.
CA 294/91 Chevra Kadisha KAHSHA “Kehillat Yerushalayim” v. Kestenbaum IsrSC 46(2) 464.
CA 239/92 “EGGED” Israel Transport Cooperation Society v. Mashiach IsrSC 48(2) 66.
HCJ 1683/93 Yavin Plast Ltd. v. The National Labour Court IsrSC 47(4)702.
LCA 5768/94 A.S.I.R Import, Manufacture, and Distribution v. Accessories and Products Ltd. IsrSC 52(4) 289.
HCJ 1703/92 C.A.L. Cargo Airlines Ltd. v. The Prime Minister, IsrSC 52(4) 193.
HCJ 28/94 Tzarfati v. Minister of Health IsrSC 49(3) 804.
CA 2247/95 General Director of the Antitrust Authority v. T’nuvah Center for Cooperation and Marketing of Agriculture Products in Israel Ltd. 52(5) 213.
LCA 371/89 Leibovitz v. Eliyahu Ltd. IsrSC 44(2) 309.
HCJ 588/84 K.S.R.  Asbestos Trade Ltd. v. President of the Antitrust Tribunal IsrSC 40(1)29.
CA 312/74 Cable and Electric Cable Company in Israel Ltd. v. Martin Christianpalour IsrSC 29(1) 316.
CA 4/74 Berman v. Misrad Lehovalat Masaot Pardes Hana – Carcur “Amal” Ltd. IsrSC 29 (2) 718.
CA 618/85 Ma’ayanot Hagalil Hamaravi Ltd. v. Tavori BEHAR Soft Drinks Ltd. IsrSc 40(4)343.
CA 2600/90 Elite Israeli Company for Manufacture of Chocolate and Candies Ltd. v. Serengah IsrSC 49(5) 796.
CA 1142/92 Vargus Ltd. v. Camax Ltd.  IsrSC 51(3) 421.
CA 136/56 Fuchs. v. Eylon and Etzioni Ltd. IsrSC 11 358.
CA 136/64 “Francitext”Ltd. v. Utzitel Ltd. IsrSC 18(3) 617.
CA 238/73 Sharabi v. Chamtzani, IsrSC 28(1) 85.
CA 157/88 “EGGED” Israel Transport Cooperation Society v. Meiron IsrSC 44(1) 522.
HCJ 935/89 Ganor v. State Attorney IsrSC 44(2) 485 at pp. 513.
CA 155/80 Rav Bariach Ltd. v. Amgar IsrSC 35(1) 817.
CA 566/77 Dicker v. Moch IsrSC 32(2) 141.
CA 1371/90 Damati v. Ganor IsrSC 44(4) 847.
CA 901/90 Nahmias v. Columbia Trade and Manufacture Ltd. IsrSC 47(1)252.
LCA 672/96 “EGGED” Israel Transport Cooperation Society v. Rachtman (not yet reported).
CA 369/74 “TromAsbest” Company for Assembly of Pre Structures Ltd. v. Zakai, IsrSC 30(1) 793.
CA 4628/93 State of Israel v. Efromim Residence and Initiative (1991) Ltd. IsrSC 49(2) 265).
CA 214/89 Avneri v. Shapira IsrSC 43(3) 840.

 

Israeli National Labour Court cases cited:

LA 164/99 Frumer and Checkpoint Software Technologies Ltd. – Redguard Ltd. (not yet reported).
LC 54 3-110/ First Class Service Ltd. – Mati Kosacks LCC 26, 451 at p. 462.
LC 42 3-74/ Vardi-City of Netanyah LCC 14 59.

 

English cases cited:

Hepworth Manufacturing Co. v. Riyott, [1920] 1 Ch 1, 12.
Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. Ltd [1894] A.C.535.
Gledhow Autoparts Ltd v. Delaney [1965] 3 All. E.R. 288, 291.
Esso Petroleum Co. Ltd. V. Harper’s Garage (Stourport) Ltd [1967] 1 All E.R. 699.
Kores Manufacturing Co. v. Kolok Manufacturing Co. [1959] Ch. 108.
Lansing Linde Ltd v. Kerr [1991] 1 W.L.R 251.

 

French cases cited:

Cass. 5OC. 14 Mai 1992 Droit Social No. 12, 976 (1992).

 

Israeli books cited:

D. Friedman and N. Cohen Contracts 15 (Vol. A, 1991).
E. Zamir Contract Interpretation and Supplementation (1996).
A. Barak Interpretation in Law, Vol. 2, Statutory Construction (1993).

 

Israeli articles cited:

Porat ‘Considerations of Justice Between Parties to a Contract and Considerations of Guiding Behaviors in Israeli Contract Law’ Iyunei Mishpat 22.
Friedman “Contracts of Adhesion, Good Faith and Public Policy” Iyunei Mishpat 7, 431 at p. 433 (1979).
Gilo, ‘Toward a New Legal Policy toward Non-Compete Terms,’ Iyunei Mishpat 23, 63 (2000).
Cohen, ‘Freedom of Trade and Commercial Competition’ Iyunei Mishpat 19, 353 (1995).
Hermon, ““Public Policy” and the Limitations on Freedom of Occupation in the Perspective of Israeli and English Case Law,” The Cohen Book, 393,403 (1989).
Goldberg, ‘Limiting Freedom of Occupation of the Employee by Contract’ Mechkarei Mishpat 4, 7 (1987).
Goldberg ‘Freedom of Contract in Labour Law’ 672, 678 (1972)
Goldberg ‘Good Faith in Labour Law’ Sefer Bar-Niv 13 (1987).

 

Foreign books cited:

I.  T.  Smith and G.  Thomas, Industrial Law 86 (1996).
R. Upex, The Law of Termination of Employment 432 (5th. Ed., 1997)). 
Cheshire, Fifort and Furmston's, Law of Contract 420 (13th. Ed., 1996);
Chitty, On Contracts 890 (Vol. 1, 28th ed., 1999).
Trertel, The Law of Contract 416 (9th ed., (1995).
M. Weiss, Labour Law and Industrial  Relations in Germany 105 (1995).
A. Berenstein, Labour Law and Industrial Relations in Switzerland 134 (1994).
R.W. Arthure et al, Labour Law and Industrial Relations in Canada 138 (1993).

 

Foreign articles cited:

Hanna Bui-Eve, ‘To Hire or Not to Hire: What Silicon Valley Companies Should Know About Hiring Competitor’s Employees,’ 48 Hastings L. J. 981 (1997).
Gilson, ‘The Legal Infrastructure of High Technology Industrial Districts: Silicon Valley, Route 128, and Covenants Not to Compete,’ 74 N.Y.U.L. Rev. 575 (1999).
O’Malley, ‘Covenants Not to Compete in the Massachusetts Hi-Tech Industry: Assessing the Need for a Legislative Solution,’ 79 B.U.L.Rev. 1215 (1999).

 

Other:

Restatement 2d, Contracts, §§188, 188(1)(a).

 

 

JUDGMENT

 

President A. Barak

The Facts

 1.  Appellant No.1 developed independent computer word processing systems.  It used systems called “Linear systems”.   Appellant no.  2 (hereinafter, “the appellant”) received from appellant no. 1 the right of exclusive distribution of the systems in Israel.  It provided its customers in Israel with maintenance and repair services.  The respondent was an employee of the appellant.  He was employed as a computer technician.  At the time of his employment, he signed an agreement not to compete with the appellant in anything related to the marketing and repair of Linear systems.  This is the language of the agreement:

“The employee hereby undertakes not to compete with B/R [the appellant A.B.]  either directly or indirectly, whether or not he acts in his capacity as an employee of B/R, to the extent that any loss is caused by such competition to the business of B/R as distributor, marketer and service provider for equipment made by Linear and/or any other name by which such equipment will be called in the future.  So too the employee undertakes not to take any action that would undermine, eliminate, or damage B/R’s relationships with its customers."

The respondent signed an “Agreement to Protect Confidentiality.”  According to it he was obligated to maintain the absolute confidentiality of information that he might obtain in the framework of his employment.  The respondent was obligated not to make use of such information nor utilize it for commercial purposes.  Information that the respondent already possessed before beginning his employment and information that was available to the public was outside the purview of the agreement.  Both agreements were not limited in time. 

2.  After twenty eight months of work, the respondent was fired.  He started a business of computer systems services.  He took out an advertisement in the newspaper offering his services as a repair or maintenance technician for computer systems, including Linear systems.  In addition, he directly approached the customers of the appellant, using a customer list of the appellant’s that he had. As a result of the newspaper advertisement a contract was signed between the respondent and the Armament Development Authority (RAFAEL-operated by respondent number two) according to which the respondent would provide Linear services to RAFAEL.  These services came in place of the repair and maintenance services which the appellant had given in the past to RAFAEL.

3.  Against the background of these events three suits were filed in the District Court.  In one suit, the appellant sued the respondent for violation of his obligations toward it, for doing damage to its property rights and its reputation, and for appropriating its trade secrets.  In the framework of this suit the District Court granted a temporary injunction which prohibited the respondent from dealing directly or indirectly in the sale or provision of services for word processors of the Linear type until the expiry of eighteen months from the day the respondent was fired.  The injunction did not apply to the contract with RAFAEL.  In the second suit the appellants claimed that the respondent made use, in the course of providing services to his customers, of the magnetic disks and diskettes which store backup programs, application programs and diagnostic programs that were developed by the appellant and disks that were prepared for use by them.  In this the respondents, according to the appellants’ claim, violated their property rights and infringed on their copyright.  In this suit it was claimed against RAFAEL that it is aiding the respondent in his prohibited actions.  The appellants demanded compensation from the respondents, and from RAFAEL, for causing by their behavior the breach of contracts between the appellant and its customers, the breach of an implied term that arose from the work relationship between the appellant and the respondent, and for unjust enrichment.  RAFAEL for its part filed a third-party notice.  The third suit was directed by the appellant against RAFAEL, for the return of hardware equipment and software materials that were lent by it to RAFAEL and for payment of fair use for them.  RAFAEL for its part filed a countersuit in which it requested removal of a block that the appellant created in its workspaces.  It also demanded the supply of equipment that it purchased and did not receive, and payment in the amount of NIS 7,022 for expenses it incurred as a result of breach of the agreement that the appellant had with RAFAEL.  All of these suits have been joined for the purpose of consideration by the court.

 4.  In a comprehensive and thorough judgment the District Court (Vice-President, Justice A. Goren) dismissed the claims of the appellants inasmuch as they related to infringement of their copyright or damage to their reputation.  On the other hand, it was held that the respondent breached the agreement not to compete with the appellant’s business.  So too it was held that the respondent had made use of the customer list of the appellant.  Breach of the agreement not to compete yielded – within the eighteen months during which the temporary injunction was issued (this being the period to which the appellant limited its claims) – the contract with RAFAEL.  As for contracts with other customers based on the customer list in the possession of the respondent, it was held that it was not proven that these yielded -- during the limitation period of eighteen months -- agreements between those customers and the respondent and therefore it is not to be said that the respondent’s agreement in this matter was breached.  The Court held that as a result of the agreement between the respondent and RAFAEL, RAFAEL ceased to receive maintenance services from the appellants for the Linear systems in RAFAEL’s possession.  For these losses the court held that the respondent was to compensate the appellants in the amount of $25,000.  So too, a court ordered the State of Israel (under whose aegis RAFAEL was operating) to pay the appellant the value of certain hardware and software items given to RAFAEL by the appellants, and which remained in their possession.

The Appeals

5.  The appeal and the counter-appeal before us are directed against this judgment.  The appellants’ claim that it should be determined that the respondent made prohibited use of the programs that were developed by them and these actions damaged their property rights and their reputation.  They also claim that the District Court erred in holding that the marketing and advertising actions undertaken by the respondent during the eighteen months are not to be seen as a breach of their agreements with the appellants, even if this breach did not result in transactions.  The respondent, for his part, appeals the decision requiring him to pay damages to the appellant for his contract with RAFAEL.  He also appeals (alternatively) the amounts that were awarded.  The State of Israel (which operates RAFAEL) claims, in an appeal that was filed on its behalf, that it was inappropriate to require it to pay the appellants the value of the software and hardware items, either because they were not supplied to it at all or because the appellant is not entitled to payment for them.

Property Rights of the Appellant, Damage to Reputation, and Compensation for Software and Hardware Items

6.  The parties’ claims on these matters ask us to intervene in the factual findings of the trial court.  We will not do so.  The decisions of the District Court are based on findings that were determined on the basis of expert opinions and testimony.  These findings are well anchored in the evidentiary material and we will not interfere in them.  This also applies to the property rights of the appellant and to the damage to its reputation.  We have also not found that it would be appropriate to intervene in the judgment of the District Court as to the compensation for software and hardware items that were handed over to RAFAEL.  The factual findings in these matters rely on proper interpretation of the relevant documents and of the evidence that was brought before the District Court; we will not interfere in them.

Limiting Freedom of Occupation

7.  There are two questions before us: The one is whether the obligation of the respondent not to compete with the appellant is lawful; the second is whether it was lawfully determined that the respondent is not liable for the use that he made of the customer list, as this usage did not result in a contract with the customers within the period of eighteen months.  These two questions are related to one central issue, which relates to the validity of agreements which limit the freedom of occupation.  But the fundamental starting point for examining these issues is found in the provisions of section 30 of the Contracts (General Part) Law 5733-1973 which establishes:

"a contract whose execution, content, or purpose are illegal, immoral or against public policy -- is void."

"Public policy" reflects the fundamental approaches of Israeli society as to the appropriate level of behavior in contractual relationships.  It expresses the position of Israeli law as to what is permitted and what is prohibited in contractual relationships.  The content of public policy changes from society to society; it changes in any given society from one point in time to another point in time (see CA 614/76 Jane Doe v. John Doe [1] at p. 94).  The judge learns about the core values of Israeli society and the approach of Israeli law as to what is permitted and what is prohibited from the totality of values of the legal system.  Primary among these values are the constitutional values of the law and the regime.  Therefore, human rights anchored in the basic laws constitute a central source – even if not the only source -- from which the judge draws the values which come together to form the Israeli “public policy".  And note: human rights in the basic laws are directed toward public entities.  They do not grant, on their own and directly, rights to an individual as against another individual.  However, the basic rights -- and other constitutional provisions anchored in the basic rights -- establish a system of values and core concepts in the framework of which the law (the public and the private) operates and develops (see CA 294/91 Chevra Kadisha KAHSHA “Kehillat Yerushalayim” v. Kestenbaum  [2] at p.  531; see CA 239/92 “EGGED” Israel Transport Cooperation Society v. Mashiach [3]).  These core values also determine the content of "public policy."  They are not the only ingredients of "public policy."  The approaches of Israeli society to what is permitted and prohibited in contractual relationships are not only determined by the values which express human rights.  Public policy extends over further values, goals and interests, which reflect the policy of Israeli society (its public policy).  Therefore, national security, public peace, the welfare and strength of the nation are also values and interests which shape its  "public policy."

8.  The values of a legal system, its core values, purposes and interests, are in constant conflict.  When this conflict takes place in the framework of the basic laws themselves, it is resolved by the balances (vertical and horizontal) which apply to the matter (as to the vertical balance, the limitation clause in section 4 of the Basic Law: Human Dignity and Liberty and in section 8 of the Basic Law: Freedom of Occupation).  When this conflict takes place in the framework of private law -- and in our case, in establishing the parameters of "public policy" -- it is resolved by the proper balance between the conflicting values and interests.  This balance is determined by the relative weight of the competing interests and values in the framework of the private law.  And it should be noted that these values and interests are not solely the values and interests of the individual versus another individual.  These are also and primarily the values and interests of society as to the validity of contracts between individuals.  Indeed, "public policy" reflects the public interest which within its purview also takes into consideration the interests of various individuals.  It constitutes, by its very essence, a limitation on the parties’ free will.  Against this background we will focus our gaze on terms limiting the freedom of occupation.

Public Policy and Clauses Limiting Freedom of Occupation

9.  What does "public policy" require as to terms between employer and employee which limit the freedom of occupation, and in our case, terms by which upon termination of employment an employee agrees not to compete with the employer and not to make use of information received during his period of employment?  In order to develop "public policy" in this context it is necessary to understand the values, principles and interests competing for primacy, and the proper balance between them (see the judgment of the National Labour Court LA 164/99 Frumer and Checkpoint Software Technologies Ltd. – Redguard Ltd. [29] (para. 11) (hereinafter: "the Checkpoint case”)).  We will open with values, principles and interests which support granting validity to the contractual obligations the parties have taken upon themselves.  A first principle that is to be taken into account is freedom of contract.  From this principle the approach is derived that contracts are to be kept: pacta sunt servanda.  The contract is the "law" that the parties have established between themselves and which they must keep.  A civilized society cannot exist and develop if contracts that are made are not honored.  The public interest – an interest that reflects concepts of justice, morality and social efficiency together – is that obligations that a(n adult) person takes upon himself will be honored by him (see D. Friedman and N. Cohen Contracts 15 (Vol. A, 1991)[39]; E. Zamir Contract Interpretation and Supplementation (1996)[40]; A. Porat ‘Considerations of Justice Between Parties to a Contract and Considerations of Guiding Behaviors in Israeli Contract Law’ [42] at 647).  And note: I do not hold that it is "public policy" that contracts are to be kept.  Public policy is the weighted result which results from the internal balancing of values and principles which are under consideration.  However, I am of the opinion that freedom of contract and the performance of contracts are central values and interests which come together to form – in their balancing with other interests and values -- "public policy" in Israel (see Friedman “Contracts of Adhesion, Good Faith and Public Policy” [43] at p. 433).  The principle of freedom of contract is to be given substantial weight, as it reflects a constitutional right and a central public interest.

10.  A second interest that is to be considered is the personal advantage (to the employer) and the public advantage (to society as a whole) in protecting the employer from competition by the employee in general, and from use of information that he acquired from the appellant, in particular (see HCJ 1683/93 Yavin Plast Ltd. v. The National Labour Court [4] at p. 708).  In this context the investment of the employer in his business overall is to be particularly emphasized, as well as his investment in training his employees and in his trade secrets, in particular.  (See Gilo “Toward a New Legal Policy toward Covenants not to Compete” [44] at 63).  This would be the interest (private and public) that the employer be given protection for his investments in training his employees, and in building a client base and work methods.  Certain aspects of this interest are anchored in the freedom of property itself.  Other aspects stem from the public interest.  Indeed, there is a concern that if the employer is not able to protect these interests, he will not invest the necessary investments, and the public interest will be damaged (compare LCA 5768/94 A.S.I.R Import, Manufacture, and Distribution v. Accessories and Products Ltd. [5]).

11.  I have explained two considerations which support the validity of clauses limiting freedom of occupation.  What are the values, principles, and interests which are found at the core of the approach which desires to invalidate these clauses?  A first principle that is to be considered is freedom of occupation.  This is a constitutional principle, and is anchored in the Basic Law: Freedom of Occupation.  It is derived from human dignity, and from freedom of thought and action.  The significance of freedom of occupation is, inter alia, the freedom of an employee who concluded an employment relationship with his employer to contract with any employer with whom he desires as well as the freedom of the employee to start a business of his own, without being bound by agreements limiting trade.  Freedom of occupation is derived from freedom of competition.  (See HCJ 1703/92 C.A.L. Cargo Airlines Ltd. v. The Prime Minister [6]; HCJ 28/94 Tzarfati v. Minister of Health [7]).  However, freedom of competition is a public interest that stands on its own (see CA 2247/95 General Director of the Anti-Trust Authority v. T’nuvah Center for Cooperation and Marketing of Agriculture Products in Israel Ltd. [8] at p. 229). It was justly noted that "free competition is likely to bring about reduced prices, improved quality of the product and improvement of the service which is given with its sale" (President Shamgar in LCA 371/89 Leibovitz v. Eliyahu Ltd. [9] at p. 327; HCJ 588/84 K.S.R.  Asbestos Trade Ltd. v. President of the Antitrust Tribunal [10] at p. 37; Cohen “Commercial Competition and Freedom of Occupation [45] at p. 354 (1995)).  Expression for this public interest has been given in Israeli law inter alia  in anti-trust legislation (See the Restrictive Trade Practices Act 5748- 1988)  At the foundation of this law is competition, which was intended to ensure efficient allocation of resources and increased efficiency (see 2247/95 supra, at 229)  Judge Adler rightly emphasized in the Checkpoint case that: 

“The modern market is based on the existence of free competition in the open market and a free economy, inter alia, as to capital, and particularly human capital....  Free competition advances the marketplace and brings about, inter alia, reduction in prices for the consumer.  A competitive market encourages establishment of new companies, including companies started by employees who compete with their previous employers.  The employees offer their talents to various employers and compete with each other for places of work.  The employers on their part, offer improved working conditions with the goal of attracting skilled labor. . .  Society is interested in rapid and free transfer of information in the marketplace."  (Ibid. para. 14).  

This principle of freedom of occupation -- and the freedom of competition derived from it -- is to be given heavy weight, as it reflects a constitutional right and important public interest.

12.  A second interest which is to be considered is the employee himself.  His labor is his property, spiritual and physical.  It is the basis for his self-realization and fulfillment.  His freedom of choice is his life.  His capacity to choose an occupation for himself is the source of his existence and his property.  His training is the means by which he will be able to compete in the workplace.  Keeping him from his work for a specified period of time may remove him entirely from the workforce and bring about the destruction of many years of training.  "A person's place of work, where he spends at least a third of his day, is not merely a means of support, but a place from which he hopes to achieve self-realization and fulfillment.  Limiting the mobility of the employee will damage his right to personal fulfillment" (The Checkpoint case, paragraph 14).  This is primarily so in the context of employment in the field of high-tech.  These interests are first and foremost the interests of the employee.  But they also constitute the interest of the public.  "The good of the public demands that generally, knowledge, rules and professional skills acquired by an employee in his work will be used without limitation, as such use is a blessing to the individual and the public as one" (Justice Berinson in CA 312/74 Cable and Electric Cable Company in Israel Ltd. v. Martin Christianpalour [11] at p. 320; Hermon, ““Public Policy” and the Limitations on Freedom of Occupation in the Perspective of Israeli and English Case Law,” [46] 403).  This is primarily so in the fields of high-tech, in which the public as a whole has an interest in their development for the good of society.  Indeed, the public good justifies recognizing the freedom of the employee to choose for himself employment at his will.  This was justly noted by Judge Astbury in the Hepworth case (Hepworth Manufacturing Co. v. Riyott [1920] [32]) when he said:

“A man’s aptitude, his skill, his dexterity and his manual and mental ability may not, nor ought to be, relinquished by an employer.  They are not his masters [sic] property, they are his own, they are himself.”  Moreover, in a contractual relationship, the employer and the employee are not of equal status.  The employer generally is in a stronger bargaining position.  Justice Berinson discussed the “weakness of the employee versus the employer, who may dictate the terms of the employment contract."  (CA 4/74 Berman v. Misrad Lehovalat Masaot Pardes Hana – Carcur “Amal” Ltd. [12] at p. 722). 

The National Labour Court emphasized that "labour law is guided by a basic principle, which is based on the presumption of the fundamental inequality between the power of the employee and the power of the employer".  (Checkpoint case, paragraph 14).  Of course, this inequality changes over time.  The matter is conditioned on the structure of the labour market and the strength of the professional association.  However, in principle it may be said that the employee's interest and the public interest is to protect the work capacity and creative capacity of the employee.

Balance between Conflicting Considerations

13.  The various considerations which come together to form "public policy" do not all lead in one direction.  We have before us "competing" considerations (Vice-President Ben-Porat in CA 618/85 Ma’ayanot Hagalil Hamaravi Ltd. v. Tavori BEHAR Soft Drinks Ltd. [13] at p. 348; see also CA 2600/90 Elite Israeli Company for Manufacture of Chocolate and Candies Ltd. v. Serengah [14] at p. 808).  The one pair of considerations leads in most cases to the recognition of the validity of contractual clauses limiting the freedom of occupation of the employee.  The second pair of considerations also leads in most cases to invalidating such contractual terms.  The normative content that will be given to the concept of "public policy" constitutes, therefore, the result of the balance between the conflicting values, principles, and interests.  I have explained this in one of the cases, when I noted:

“As against the freedom of occupation stand other values, which the law also seeks to protect.  The protection given to freedom of occupation is a result of the balance that stems from the confrontation between freedom of occupation on the one hand and other individual liberties (such as freedom of property, freedom of contract (as part of human dignity and liberty) on the other, and the confrontation between the freedom of occupation and the public interest (such as the public interest in the protection of professional secrets).  . . . as against the freedom of occupation of the employee and the new employer stand the interests of the original employer that are worthy of protection, including his property (section 3 of the Basic Law: Human Dignity and Liberty) and perhaps also his privacy (section 7).  The freedom of contract of the original employer and the public interest are also to be considered.” (HCJ 1683/83 [4] supra at p. 708; see also CA 239/92 supra, at p. 72; CA 1142/92 Vargus Ltd. v. Carmax Ltd. [15]; see also LC 54 3-110/ First Class Service Ltd. – Mati Kosacks [30] at p. 462).

14.  Israeli case law, in the footsteps of English case law, has determined that the criterion for balance between the competing interests is reasonableness.  A contractual limitation on the freedom of occupation of the employee will not damage “public policy” if the limitation is reasonable in terms of the interests of the parties and in terms of the public interest.  Lord MacNaghten’s words are well known:

 “It is a sufficient justification, and indeed it is the only justification, if the restriction is reasonable -- reasonable, that is, in reference to the interest of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public” (Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. Ltd [1894] [33]).

These words and similar ones have been quoted at length in Israeli case law (see CA 136/56 Fuchs. v. Eylon and Etzioni Ltd. (hereinafter: “the Fuchs case”) [16] at p. 361; CA 136/64 “Francitext”Ltd. v. Utzitel Ltd. [17] at p. 626; CA 238/73 Sharabi v. Chamtzani [18]; CA 4/74 [12] supra; CA 157/88 “EGGED” Israel Transport Cooperation Society v. Meiron [19] at p. 526).  Of course the reasonableness test is an appropriate and good test.  However, it does not advance us very much, as the key question is what are the tests for determining the reasonableness of the contractual limitation.  Reasonableness means proper balance between competing values, interests and principles.  (See HCJ 935/89 Ganor v. State Attorney [20] at p. 514; A. Barak Interpretation in Law, 663 (volume two, 1993) [41]).  The balance is appropriate if we give the correct weight to the various considerations that are to be taken into account.  What is the proper weight -- and what, therefore, is the proper balance -- among the various considerations that are to be taken into account in providing an answer to the question whether the employee’s agreement not to compete is reasonable?

"Legitimate Interests”

15.  The fundamental starting point should be to avoid the approach of "all or nothing".  It is not to be said that all clauses limiting the freedom occupation of the employee who departs his workplace are consistent with "public policy."  So too, it is not to be said that all such clauses go against "public policy."  The validity of clauses which limit freedom of occupation should be determined by the legitimate interests which they protect.  Indeed, this was the approach taken by the Supreme Court when it placed the "legitimate interests of the parties and the public” in the center of its analysis.  Justice Berinson explained this, noting:

"the limitation must meet the double condition that it is necessary for the protection of the legitimate interests of the employer from whose workplace the employee has departed and that it is for the good of the public" (CA 312/74 [11] supra  at  319). 

Justice Bechor reiterated this approach noting:

"the general law is that there exists the right to freedom of occupation in the field of the employee who has left a place of work with an employer.  And if there is an agreement which limits him in this freedom of occupation after the conclusion of his work with the employer, two conditions must be met, in order for this limitation to be valid.  The first condition is that it is necessary to protect the legitimate interests of the employer from which the employee has left, and the second condition is that this is also necessary for the good of the public in terms of the interests of the two parties" (CA 155/80 Rav Bariach Ltd. v. Amgar  [21] at p. 825).

M. Goldberger wrote in a similar vein:

"there is nothing wrong with limiting the right of a person to choose their occupation and employment up to the boundaries of the ‘limited right’ of his former employer in protecting his legitimate interests" (Goldberg, ‘Limiting Freedom of Occupation of the Employee by Contract’ [47] at 27 (1987)).

Professor Cohen takes a similar approach:

"a valid limitation of freedom of occupation is one that protects a legitimate interest of one in whose favor it is applied, and it must be reasonable both in terms of the parties and in terms of the public (Cohen, ‘Freedom of Trade and Commercial Competition’ [45]).

Comparative law undertakes a similar approach (as to the appropriate use of comparative law in the matter of limitation of freedom of occupation see CA 566/77 Dicker v. Moch [22] at p. 146).  The American Restatement 2d (Contracts) [61] establishes that a non-competition clause between an employer and employee is not reasonable if (section 188(1) (a)):

"The restraint is greater than is needed to protect a promisee’s legitimate interests."

English law takes a similar approach (see I.  T.  Smith and G.  Thomas, Industrial Law 86 (1996) [50] as well as Gledhow Autoparts Ltd v. Delaney [1965] [34]).  This approach is also common in French law (see Cass. 5OC. 14 Mai 1992 Droit Social No. 12, 976 (1992) [38].  Indeed, the relevant question is what are the interests considered legitimate -- in terms of the parties and the public --by the legal system, which clauses limiting freedom of occupation lawfully protect.

16.  In connection with "legitimate interest" it has occasionally been emphasized in the case law that both the legitimate interests of the parties and the legitimate interests of the public are to be considered, and that the public interest is secondary to the legitimate interests of the parties.  The following words of Justice Berinson which relate to the consideration of "the public good" are typical:

"the public good remains important; however, it has always been of secondary importance compared with the first reason which relates to the interest of the parties themselves" (CA 4/74 [12] supra, at p.722; see also CA 1371/90 [23] supra; CA 238/73 [18] supra at p.  91).

However, it has been emphasized "there exist extraordinary cases, as in the example of the creation of a harmful monopoly, in which the public interest would be sufficient to justify invalidating a clause of that type" (CA 901/90 Nahmias v. Columbia Trade and Manufacture Ltd. [24] at p. 264).  Personally, I do not believe it is appropriate to distinguish between the legitimate interests of the parties and the legitimate interests of the public.  This is a matter of invalidating a contractual clause on the grounds of "public policy."  It appears that the perspective is that of the public.  The legitimacy of the parties’ interest is determined, therefore, from the perspective of public policy.  Moreover: the various human rights -- such as freedom of contract, freedom of occupation, property rights and other human rights -- express both the private interest and the public interest.  Indeed, we must not separate between the legitimate interests of the parties (as opposed to an undefined interest) and the public interest.  This is a matter of the public interest, which takes account of the totality of the facts, including the legitimate interests of the parties.  Lord Pierce discussed this in a key case on this issue:

“Although the decided cases are almost invariably based on unreasonableness between the parties, it is ultimately on the ground of public policy that the court will decline to enforce a restraint as being unreasonable between the parties...  There is not, as some cases seem to suggest, a separation between what is reasonable on the ground of public policy and what is reasonable as between the parties.  There is one broad question: is it in the interest of the community that this restraint should, as between the parties, be held to be reasonable and enforceable?"(Esso Petroleum Co. Ltd. V. Harper’s Garage (Stourport) Ltd [1967] [35] 724).

Indeed, the employer has his own interest and the employee his own interest.  Those interests may be different from the public interest.  But we are not interested in the parties’ interest.  We are interested in the legitimate interests of the parties.  And the legitimacy of the interest is determined by general considerations of the legal system, its principles and approaches.  The public interest and the legitimate interests of the parties are one and the same.  Therefore, whilst I will continue to discuss the legitimate interests of the parties and the legitimate interests of the public, I do not see them as separate concepts, but a uniform concept of the legitimate interests of the public ("public policy") which takes into account for its part, inter alia, the parties’ interests, whereby some of them will be protected (the "legitimate" ones) and the others will not be protected.

17.  From the perspective of the legitimacy of the interests the following conclusion is warranted: as a rule, the employer does not have "a legitimate interest" that a non-competition agreement will be given validity, without any other connection to the other interests of the employer; similarly, as a rule the employee does not have a "legitimate interest" that a non-competition agreement will be invalidated, without any connection to the other interests of the employer.  Indeed, as a rule, the employer's interest in preventing a former employee from competing with him, without this coming to protect additional interests (beyond the non-competition), such as trade secrets or customer lists, is not a legitimate (nor a "protected") interest.

Non-Competition for its Own Sake

18.  I will open with the employer’s interest that a former employee not compete with him.  In this matter we must presume that the employer does not have trade secrets or customer lists or another “legitimate interest” which he seeks to protect.  The single interest claimed by the employer is his wish – a wish that is expressed in a non-competition clause– that his employer not compete with him.  Is this “bare” interest – non-competition “on its own” – a “legitimate” interest to be protected, in such a manner that a non-competition clause will not be considered against “public policy”?  This problem came before the court in the Fuchs case, in which Justice Landau distinguished between an employee’s agreement with his employer not to compete with him and a contract in which the seller of goodwill undertakes an obligation vis-à-vis the buyer not to deal in a competing business.  In relating to the first type of case – the type we are dealing with in this appeal – Justice Landau writes:

“The tendency to invalidate the agreement is much greater in the first type.  The reason for this is that in such cases the employer is not protecting an existing interest but is trying to obtain an advantage he is not entitled to, as the rules of commerce require him to resign himself to the competition of any person dealing in similar trade, and this includes the competition of his employee, after he has left his employment, with the condition that the employee is not utilizing to his advantage the trade secrets of his employer or the special ties which he made with the clients of his employer during the period of his employment with the employer.  Therefore, the court provides a remedy for the employee on whom the employer has imposed, due to his superior bargaining position, an agreement which limits his freedom of occupation – and permits the prohibited.” (Fuchs case, p. 361)

In a similar vein Justice Bechor held:

“The general law is that there exists a right to freedom of occupation in the profession of the employee who has left his employer’s workplace.  If there is an agreement which limits him in this freedom of occupation after the conclusion of his work with the employer, two conditions must be met so that this limitation will be valid.  The first condition is that it is necessary for the protection of the legitimate interests of the employer which the employee has left, and the second condition is that the matter also is necessary for the good of the public in terms of the interest of both parties.  The good of the public requires that the departing employee will generally be able to make use, without limitation, of the general knowledge and skill that he acquired in his work.  The legitimate interest of the employer is to protect his trade secret, and that is the first condition necessary to justify the conditioning of the limitation of freedom of occupation” (CA 155/80 [21] supra, at p. 825).

Justice Bejski repeated the same principal:

“Inasmuch as it is a matter of general knowledge and even professional skill that was acquired during the course of employment, the public interest requires that the employee will be able to used them with another employer or as an independent.  If you say otherwise, this may sentence the employee to abandoning the immediate profession for which he has qualified and he may become a burden on the public.  Not so as to special trade secrets which typify a specific business, the use of which by the employee may cause a loss to the employer.  As to the latter, and this includes ties with suppliers and customers, the employer is entitled to protection” (CA 1371/91 [23] supra, at p. 854).

This is also the approach of the National Labour Court.  In the Checkpoint Case the National Labour Court emphasized that “absent ‘trade secrets’ the principal of freedom of occupation prevails over the principal of freedom of contract” (Ibid, para. 14). 

President Adler noted that “a legal system protects the property of the employer, even during consideration of suits whose purpose is to limit an employee who worked with an employer from handing over trade secrets which belong to him.”  We find that as a rule a “bare” agreement not to compete, which does not protect the interests of the employer beyond the interest of non-competition “for its own sake” (such as his interests in protecting trade secrets and customer lists) does not shape a “legitimate interest” of the employer, and is subject to be invalidated as being against “public policy” (but see LCA 672/96 “EGGED” Israel Transport Cooperation Society v. Rachtman [25]).

19.  This is also the law in England.  In discussing non-competition agreements by an employee Professor Upex writes:

“To be enforceable, such covenants must protect the employer’s legitimate business interests, either trade secrets or goodwill and trade connections. It is not possible to prevent competition as such” (R. Upex, The Law of Termination of Employment 432 (5th. Ed., 1997)) [51].  Cheshire, Fifort and Furmston's, Law of Contract 420 (13th. Ed., 1996) [52]; see also Chitty, On Contracts 890 (Vol. 1, 28th ed., 1999) [53]; Trertel, The Law of Contract 416 (9th ed., (1995) [54]).

Jenkins, L.J. discussed this, noting:

 “An employer has no legitimate interest in preventing an employee, after leaving his service, from entering the service of a competitor merely on the ground that the new employer is a competitor” (Kores Manufacturing Co. v. Kolok Manufacturing Co. [1959]  [36] 125). 

Similar law applies in the United States.  The employer does not have a legitimate interest in preventing competition for its own sake.  He must point to an additional interest beyond the non-competition itself, such as trade secrets or customer lists (see Restatement [61] ibid, par. 188).  The German, Swiss, and Canadian, law take a similar approach. (see M. Weiss, Labour Law and Industrial Relations in Germany 105 (1995) [55]; A. Berenstein, Labour Law and Industrial Relations in Switzerland 134 (1994) [56]; R.W. Arthure et al, Labour Law and Industrial Relations in Canada 138 (1993) [57]).

20.  We will now turn to the employee's interest in competing with the employer.   Our premise here is that the employee undertook not to compete with his employer after the conclusion of his employment.  The employee seeks to be released from this obligation.  His claim is that this obligation damages his ability to compete with his employer.  Is this "bare" interest -- the competition "for its own sake" -- a "legitimate" interest that is to be protected, in a manner that a contractual obligation which limits it will be against "public policy"?  Similar to the matter of the employer, here too the answer is that only a legitimate interest of the employee will be sufficient to justify invalidating clauses limiting freedom of occupation.  The employee does not have a "legitimate interest" in competing with his employer under all circumstances.  There exist employer interests (such as his interest in protecting trade secrets and customer lists) which are worthy of protection.  In the framework of these interests, the employee's interest in competing retreats, and the employee's obligation not to compete with his employer is validated (see the Fuchs case, p. 361; CA 155/80 [21] supra, at p.  825).  Justice Berinson explained this, noting:

"The big difference between the employee's duty to protect the employer’s professional secrets and secret information and the limitation of freedom of occupation of the employee after his departure from employment with the employer must be pointed out.  Trade secrets and secret information are property rights of their owners and the employee is prohibited from using them for his own purposes or from revealing them to others at any point in time" (CA 312/74 [11] supra at 319). 

In a similar vein Justice Bejski noted, when relating to a term between an employer and employee limiting the freedom of occupation of the employee:

"The tendency to invalidate a restrictive clause  in an agreement of the first type is stronger -- because in that case the employer attempts to achieve an advantage that he is not entitled to, and this is as long as the employee does not take advantage of trade secrets or commercial ties that he established  during his work with the employer.” (CA 369/74 [26] supra at 796)

21.  What are the reasons that lie at the base of the approach that freedom of competition is not absolute, and that it does not always exist (as the employee claims) and is not always to be prevented (as the employer claims relying on a contractual obligation)?  My answer is that at the base of this approach there are three reasons: First there is the proper balance between the constitutional rights of freedom of contract on the one hand and freedom of occupation on the other.  This balance requires mutual concessions.  Freedom of contract is recognized.  The obligation of the employee not to compete with his employer is fulfilled.  However, it holds only where it protects a legitimate interest of the employer.  Similarly, freedom of occupation and the right to compete which derives from it -- are recognized.  The right of an employee to find himself an occupation, even if he is competing with his employer, is fulfilled.  However, it does not apply where it damages a legitimate interest of the employer.  Thereby, a proper balance between human rights which are competing for supremacy is found; second is the proper balance between the employer's interest in protecting his business and the employee's interest in fulfilling his employment potential.  This balance is achieved according to considerations of the public good.  As a rule, the public good demands that the trade secrets and customer lists of the employer are protected from use by an employee after his departure.  The same public good generally demands that the employee be enabled to compete with his employer and develop his employment potential, without being bound by an obligation that he undertook under conditions of what are largely unequal bargaining conditions.  Goldberg explained this, noting:

 “The public, as such, has an interest in developing the potential of the employee, and an employer is not entitled to prevent competition by his former employee even if said employee obtained all his knowledge from the employer.  However, if the employer has "a pure property interest" in preventing competition of this type, it is possible... to enforce a clause limiting freedom of occupation." (Goldberg ‘Freedom of Contract in Labour Law’ [48] at 678 (1972); 1371/90 [23] at 854).

Third, this balance reflects the relationship of trust that exists between an employee and employer.  This relationship of trust justifies obliging the employee not to do damage to the employer by means of use of secret information that has come into his possession during his employment (see LC 42 3-74/ Vardi-City of Netanyah [31] 59; Goldberg ‘Good Faith in Labour Law’ [49]).  I explained this in one of the cases when I noted:

"The employee has an obligation, derived from the relationship of trust between him and his employer and anchored in the contract with the employer and in the need to implement a contract in good faith, to protect the employer's trade secrets, not to use them for his own purposes or for the purposes of others and not to reveal them other than with the employer's permission" (HCJ 1683/93 [4] supra at 707).

So too this balance reflects the proper laws of commerce (see Commercial Torts Law 5759-1999), the principle of good faith and the fair conduct between employer and employee in our society (compare LCA 5768/94 [5] supra).  Justice Strasberg-Cohen explained this in one of the cases:

"One must consider the public interest in establishing a behavioral norm characterized by fairness and good faith.  In principal, such a balance requires that an employee who has left a workplace protect the trade secrets of his previous employer, live up to his duty of trust in him and not be unjustly enriched at his expense" (CA 1142/92 [15] supra at 429).

22.  Thus, the reasons I have explained justify a middle ground, according to which in the overall balance freedom of occupation prevails when all that stands against it is the employer's interest in non-competition, while freedom of contract prevails when alongside it stands a legitimate interest of the employer such as a "proprietary" or "quasi-proprietary” interest of the employer.  It is then the case that limiting competition “for its own sake” – a “bare” limitation which does not protect the employer’s interest beyond the interest in non-competition – does not protect any “legitimate interest” of the employer at all.  It goes against the public good and it will be invalidated in the framework of “public policy”.

On the other hand, limitation of competition which is intended to protect the interests of the employer in trade secrets, customer lists, reputation and the like the "legitimate interests" of the employer, and as a rule does not go against public policy.  This overall balance is achieved entirely in the framework of “public policy” and is shaped by “public policy” considerations...  ,There may therefore in a special case be a public interest that will justify deviation from this overall balance (see Gilo, ‘Toward a New Legal Policy toward Non-Compete Terms’ [44] at p. 75 (2000)).

Protection of the “Legitimate Interests” of the Employer

23.  Thus, limitation of freedom of occupation operates, as a rule, in the framework of the “legitimate interests” of the employer.   Examining  these interests raises three questions: the first, what are these interests, and how are they characterized; the second, what is the extent of the protection given to “legitimate interests” and what are the limitations which apply to a contractual obligation not to compete in the framework of the “legitimate  interests”; the third, what are the remedies that the employer is entitled to when the employee breaches his obligation not to compete in the framework of the “legitimate interests.”  We will discuss these questions separately.  We will do so only to the extent that the appeal before us raises those questions.

The Essence of the “Legitimate Interests”

24.  The case law recognizes trade secrets and customer lists as legitimate interests of the employer worthy of protection.  Occasionally these interests are described as “proprietary rights” of the employer (see for example CA 312/74 [11] supra, at 319).  In English literature the “proprietary interests” of the employer are referenced (see Upex [51] Ibid. at 433).  This list is not comprehensive and is not closed.  The “proprietary” language in this context raises difficult questions.  In my opinion, it is appropriate to move away from these characterizations.  The reasons found at the basis of the law, and not the label given to them, should determine the scope of the “legitimate interests” of the employer.  In the framework of this appeal it is not necessary to examine these questions in depth.  Thus, for example, I accept that the appellant’s customer list, in the circumstances of the matter before us, constitutes a “legitimate interest” for the appellant which enables limitation of the freedom of occupation of the respondent.

The Scope of the Protection Given to the Protected Interests

25.  Identifying the “protected interests” – such as trade secrets and customer lists – is only the beginning of the road in establishing the legality of limitation on freedom of occupation.  After it was determined that the contractual clause limiting freedom of occupation relates to the employer’s “legitimate interests”, the question arises whether the extent of the limitation is lawful.  Smith and Thomas discussed this, noting:

“Once there is a legally protected interest, the question which then arises concerns the extent to which the employer can bind the employee’s future conduct in order to protect that interest” (Ibid. [50] p. 88).

In a similar vein Chestire, Fifoot and Furmston note:

“The existence of some proprietary or other legitimate interest... must first be proved, and then it must be shown to the satisfaction of the court that the restraint as regards its area, its period of operation and the activities against which it is directed is not excessive”  (Chestire, Fifoot and Furmston’s, Law of Contract 420 (13th.  Ed., 1996)).

Even if an employer is entitled to the protection of his “legitimate interests” such protection is not absolute.  This is relative protection which must take into account the public interest (including the “legitimate interests” of the employee).  Justice Strasberg-Cohen explained this when she noted:

“Hand in hand with the recognition of the right to protect trade secrets, barriers and brakes have been created and relevant considerations have been established for bounding the limits of the protection that is afforded . . .  the confidentiality is relative and is not viewed as absolute.  It changes in accordance with the circumstances” (CA 2600/90 [14] supra at 807).

The test is one of reasonableness or proportionality.  The employer is entitled to protection of his “legitimate interests” to the appropriate proportion.  Beyond this proportion, the interest ceases to be legitimate.  What is this reasonableness or proportionality and how does it operate?

26.  The reasonableness or proportionality test seeks to ensure that the protection of the “legitimate interests” of the employer do not deviate beyond that which is necessary.  In this context the extent of the limitation is to be examined in terms of time, place, and type of activity.  The question in every case is whether the timeframe, limits, and type of limitation do not deviate beyond that which is reasonable and necessary in order to protect the legitimate interests of the employer.  President Adler explained this in the Checkpoint case, noting

"In the framework of the judicial balance, the courts must apply the proportionality and reasonableness test; –that is, they must examine whether the limitation on freedom of occupation passes the reasonableness test under the circumstances.  In this context, one must consider the reasonableness of the period of limitation, including the need to safeguard the trade secrets which belong to the prior employer, its scope, and its geographic range...  So too the measure of damage to the employee is to be examined as well as the measure of damage to the prior employer...  It is to be noted that the reasonableness test is a broad test, which includes the protection of many and varied interests of the employer.  However, the protected interest, generally, is the trade secrets which belong to him" (Ibid. paragraph 12).

The restrictive means must be adapted to the "legitimate interest" entitled to protection, and must not deviate from it (the test of time, place and type).  In this context the “legitimate interests” of the employee are also to be considered.  A limitation which denies to the employee the capacity to work in his field of expertise should not be recognized.  A limitation that denies to the employee his ability to make a living is not to be justified.  The restatement explains this, noting:

"The harm caused to the employee may be excessive if the restraint inhibits his personal freedom by preventing him from earning his livelihood if he quits” (Restatement, Second, Contracts [61] par.  188, comment c.  p. 43).

It is in this context that one may consider, inter alia, the question whether an employment contract guarantees the employee a (full or partial) salary during the period of limitation.  This practice (known as "Garden leave") is common in England (See I.T. Smith and G.H. Thomas, Industrial Law 306 (3th. Ed., 1996) [50]).  In Germany the law itself establishes that a contractual clause limiting freedom of occupation is legal only if the principal promises the agent a salary payment equal to at least half of his salary during the period of limitation (section 74(a) of the Commercial Code).  The case law has broadened this approach to include all employer-employee relations (See. M. Weiss, Labor Law and Industrial Relations in Germany 105 (1995) [55]).

27.  Alongside the employee interest one must also consider the public interest.  The public interest may demand invalidation of the limitation on freedom of occupation, which from other perspectives appears proportional.  The public interest is expressed, inter alia, in the needs of the marketplace, the development of industries and encouragement of competition.  Such is generally the case (see Gilo [44] Ibid.).  This is so in particular in high-tech industries (see Hanna Bui-Eve, ‘To Hire or Not to Hire: What Silicon Valley Companies Should Know About Hiring Competitor’s Employees’[58];Gilson, ‘The Legal Infrastructure of High Technology Industrial Districts: Silicon Valley, Route 128, and Covenants Not to Compete’ [59]; O’Malley, ‘Covenants Not to Compete in the Massachusetts Hi-Tech Industry: Assessing the Need for a Legislative Solution’ [60]).

28.  One may ask: if the validity of clauses limiting freedom of occupation is  limited only to situations in which the employer has a "legitimate interest," what need is there for such clauses, as generally the "proprietary" interest or the "quasi-proprietary" interest of the employer is protected without the need for an explicit clause (see HCJ1683/93 [4] supra)  The answer is that with the development of duties in the law which protect the "legitimate interests" of the employer, indeed the importance of clauses limiting freedom of occupation has diminished.  However, they are not superfluous, and this is so for two primary reasons: First, there is not complete overlap between the protection given by the general law to the "legitimate interests" of the employer and the protection given them in the framework of clauses limiting freedom of occupation; this is primarily so in all that relates to considerations of trust, fairness, good faith and fair dealing.  In these matters the general law is still in its early stages of development (compare LCA 5768/94 [5] supra) and therefore there is importance to the explicit contractual clause; second, the contractual clause has “evidentiary” importance.  On can see by it what is regarded by the parties as a trade secret or customer list or other "legitimate interest,” the importance attributed to it, the degree of knowledge that they had as to it, and the proportionality of the limitation (see Chitty [53] at 891).

Remedies

29.  Clauses limiting freedom of occupation beyond the legitimate interests of the parties go against "public policy," and are therefore void (section 30 of the Contracts (General Part) Law, also taking into consideration section 31 of the Contracts Law).  A clause which limits freedom of occupation in the framework of the legitimate interests of the parties is valid, and the party in breach is entitled to all the remedies given for breach of contract.  These remedies raise complex questions inasmuch as they relate to fulfilling the "legitimate interest" of the employer and to his protection.  These questions do not arise before us and I will not express an opinion on them.  I will only note that occasionally the question arises as to whether the court may limit the scope of a limitation on freedom of occupation in order to bring it within the requirements of reasonableness and proportionality.  Such was the action of the court in the case before us in limiting a limitation which had no timeframe to the timeframe of eighteen months.  The court will do so first and foremost through the use of the rules of construction.  “Where a contract is open to various interpretations, an interpretation which validates it is preferable to an interpretation according to which it is void” (section 25(b) of the Contracts (General Part) Law).   Indeed the presumption is that the purpose of a contract is that the freedom of occupation of the employee is limited as far as the legitimate interests of the employer.  If this presumption can be realized – taking into consideration other presumptions and the parties’ perspective, as it emerges from the contract and from the circumstances (see CA 4628/93 State of Israel v. Efromim Residence and Initiative (1991) Ltd. [27]) – via the language of the contract, the court will do so.  In this context, it is possible, in a suitable case, to limit general language by the purpose at its core, in such a manner that it will be constructed as applying only to the “legitimate interests” of the employer.  But what if the general rules of construction are not sufficient to save the clause from being voided?  In such a case the court may bring the limitation on freedom of occupation within the boundaries of the proportional or reasonable, and this by way of “severance” between the void portion and the valid portion (section 19 and section 31 of the Contracts (General Part) Law), but even in the absence of the option of severance -- and as a condition of enforcement (section 3(4) and section 4 of the Contracts (Remedies for Breach of Contract) Law 5731-1971) -- the court may limit the scope of the limitation to its proper proportion (see CA 1371/90 [23] supra at 856).  “If a person has undertaken an obligation as to the protection of a trade secret of another and it is too broad an obligation, there is no bar to limiting it and adjusting it to the proportionality of the secret within the information” (Justice Strasberg-Cohen in CA 2600/90 [14] supra at 808).

30.  Frequently in the type of case before us an interlocutory order is sought.  Generally the granting of an interlocutory order is sufficient to determine the entire conflict as the final order may be granted after the period of limitation has passed.  From this derives the importance of taking great care in this area.  An interlocutory order should not be general, and should be adapted to the legitimate interests of the employer.  Thus, for example, the order would not prevent employment of the employee by a new employer, but would prohibit him from handing over trade secrets and customer lists (see Lansing Linde Ltd v. Kerr [1991] [37]).  Such a careful approach is necessary partially due to the nature of freedom of occupation as a constitutional right (compare CA 214/89 Avneri v. Shapira IsrSC [28]).  The remedy of the employer will be in the proportion of damages he will be awarded, if it turns out at the end of the day that limiting the employment protected his “legitimate interests".

Interim Conclusion

31.  Before I move on to the special circumstances of the appeal before us, it would be proper to summarize the main points.  My position can be summarized by the following four propositions: first,  a clause between employer and employee limiting the freedom of occupation of the employee after the conclusion of his employment without protecting the ”legitimate interests" of the employer is void as going against "public policy"; second, a "legitimate interest" of the employer -- that gives validity to a clause limiting the freedom of occupation of the employee -- is a "proprietary" or "quasi-proprietary" interest of the employer in his trade secrets and customer lists (to the extent they are confidential).  This is not a closed list, and in determining the list of "legitimate interests” the relationship of trust between the employer and the employee, proper trade laws, and the duty of good faith and fairness between the employer and employee are to be considered; third, the protection given to the "legitimate interests" of the employer are not absolute.  Its extent is determined by tests of reasonableness and proportionality, which take into account its timeframe, scope and the type of the limitation; fourth, as a rule, an employer does not have a "legitimate interest" in his employee not competing with him after conclusion of his employment.  Therefore, limitation of the freedom of occupation of the employee which only realizes the employer’s interest that the employee not compete with him ("non-competition for its own sake") is against public policy.  The voidness of this limitation stems from the lack of a "legitimate interest" at its core, and therefore, as a rule, it is not appropriate to examine the reasonableness or proportionality of such a limitation.

From the General to the Specific

32.  The factual basis in the framework of which the legal problems in this appeal are examined is the one established by the District Court.  According to it the one legal question before us is whether the respondent breached a duty to the appellant by contracting with RAFAEL?  In my opinion, the answer to this question is in the negative. 

33.  What is the duty that was breached by the respondent in the RAFAEL case?  The respondent did not breach his duty not to make use of the customer list of the appellant.  The reason for this is that it has not been proven that the respondent approached RAFAEL on his own initiative and in any case his business ties with them are not to be seen as a result of use of the appellant's customer list.  Indeed, the duty that was breached by the respondent is the duty not to compete with the appellant. This agreement of the respondent not to compete with the appellant is a "bare" agreement (see paragraph 18 supra).  This is an agreement of "non-competition for its own sake".  Let us re-examine (see paragraph 1 supra) this agreement:

“The employee hereby undertakes not to compete with B/R [the appellant] either directly or indirectly, whether in his capacity as an employee of B/R or not, to the extent that there shall be in such competition any loss caused to the business of B/R as a distributor, marketer and service provider for equipment made by Linear and/or any other name by which such equipment will be called in the future.  So too the employee undertakes not to take any action that would undermine, eliminate, or damage B/R’s relationships with its customers."

This agreement-- in accordance with its construction, language and purpose – was intended to protect the appellant from competition “for its own sake”.  When the appellant wanted to protect itself from damage to its property, it did so in the framework of an additional agreement signed by the respondent, which included an “Agreement to Protect Confidentiality,” according to which the respondent undertook to keep in confidence information that he might obtain in the framework of his employment.  Indeed, the obligation of the respondent not to compete with the appellant – and this is the only obligation that was breached by the respondent – does not protect the “proprietary” or “quasi proprietary” interest of the appellant.  It does not protect a “legitimate interest” of the appellant.  It goes against “public policy,” and therefore is to be declared void.  All the appellant sought was to ensure for itself immunity from competition.  It is not entitled to do this, as such immunity goes against “the public interest.”  As to this, there is no significance to the reasonableness or proportionality of the obligation that the respondent took upon himself.  It is not proper to examine whether the limitation to eighteen months is reasonable or proportional.  The obligation in its entirety is void and voided.

34.  Until now I dealt with the obligation of the respondent not to compete with the appellant.  What about the additional obligation that he undertook to keep in confidence any information that he may obtain in the framework of his employment?  As to this matter, the appellant’s appeal is to be denied, if only for the reason that no causal connection has been shown between the breach of the obligation and the appellant’s losses.  Indeed, even if in the use of the respondent’s customer list the respondent breached his obligation, this breach did not cause the appellant any loss, as it has not been proven that within the eighteen months to which the obligation was limited, relationships between the respondent and those customers were developed.  This is sufficient to deny the appellant’s appeal on this matter.  Therefore, there is no need for me to deal with the question as to whether limiting the extent of the obligation not to make use of the information that he obtained in the framework of his employment, is reasonable and proportional.  As to this it is acceptable to me that this information is, under the circumstances, confidential information, entitled to protection in the framework of the “legitimate interests” of the employer.  But is the scope of the protection proportional and reasonable?  This question is not simple in the least.  It is sufficient for me to note, without making a determination on the matter, that there is room for the argument that the scope of this obligation under the circumstances is not reasonable and is not proportional.  We are dealing with the field of computers, this is a dynamic arena.  The scientific developments in this area are many.  Within a matter of months the reality changes unrecognizably.  Against this background there is room for the argument that a period of eighteen months is too long.  Indeed, I would be ready to examine whether in this evolving arena – in which not taking advantage of expertise for such a long period of time may do significant damage to work capacity– a stricter approach is not necessary.  However, as said, this is not to be determined in this appeal and I will leave it as open for future discussion.

In conclusion, we allow the respondent’s appeal and cancel the award of damages to the appellant for the contract with RAFAEL.  We deny the appellants’ appeal and the appeal of respondent no. 2.  So too, we deny the respondent’s appeal in all that relates to software and hardware. Under the circumstances, the appellants shall pay the respondent’s costs in the sum of NIS 15,000.

 

Justice T. Or  

I agree.

 

Justice E. Rivlin

I agree.

 

Decided as per the judgment of President Barak.

 

27 Av 5760

August 28, 2000