Property Rights

Dweikat et al. v. State

Case/docket number: 
HCJ 390/79
Date Decided: 
Wednesday, October 10, 1979
Decision Type: 
Original
Abstract: 

[This abstract is not part of the Court's opinion and is provided for the reader's convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.]

 

For this petition, we must consider the legality of establishing a civilian town (settlement) in Elon Moreh, on the outskirts of the city of Nablus, on land privately owned by Arab residents. On the morning of June 7, 1979, Israeli citizens, assisted by the IDF, began to settle on a hill east of the Jerusalem-Nablus road. The hill is entirely on rocky and undeveloped land. The land was privately owned by, and registered to, the petitioners in the Nablus registry. Two days before the settlers arrived on the land, the Commander of the Judea and Samaria area, signed an Order for the possession of land that declares the lands were possessed for military needs.

 

The petitioners approached this court on June 14, 1979, and on June 20, 1979, an order nisi was granted against the respondents, ordering them to show cause why the court should not declare the Orders of Possession invalid. An interim order was also issued to prohibit any additional digging, construction, or settlement of additional citizens on the relevant land.

 

In the responding affidavit, the Chief of the General Staff explained that a civilian settlement at that location was required for security purposes, because in a time of war, military forces may leave the base in order to execute mobile missions or attacks, whereas the civilian settlement remains in its place. Being properly armed, it controls its surroundings in observation and protection of nearby traffic arteries, in order to prevent the enemy from seizing control. Opposing the Chief of General Staff, the Minister of Defense believed that these security needs could have been met in ways other than a settlement at the relevant site. Additionally, according to Lieutenant General (Res.) Bar-Lev, during wartime, IDF forces would be grounded to secure the civilian settlement, instead of engaging in combat with enemy forces.

 

The main issue the court considered (in a majority opinion by Deputy President Landau), was whether it may be legally justifiable to build a civilian settlement on the relevant site, despite having taken possession of private property for such purposes. For each and every case it must be examined whether military needs – as this term must be interpreted – did indeed justify taking possession of private land.

 

The legal framework for deciding this petition is defined first and foremost by the Order of Possession issued by the area commander, an order that is directly rooted in the powers that international law grants a military commander in territories occupied by his forces during a time of war. Additionally, the discussion is framed by the tenets of the law that has been implemented by the Israeli military commander in the Judea and Samaria area – this too according to the laws of war under international law. Substantively, we must examine under domestic Israeli law whether the Order of Possession was issued lawfully according to the authorities granted to the Government and the military by Basic Law: The Government and by Basic Law: The Military. Customary international law is in any event part of Israeli law to the extent it does not conflict with domestic legislation.

 

The court discussed the Beit El case (HCJ 606/78), in which a civilian settlement was found to comply with Article 52 of the Hague Regulations, which allows taking possession of land “for the needs of the army of occupation”, and held that temporary use of private land is permissible when it is necessary “for all kinds of purposes demanded by the necessities of war.” Here, the Court interpreted military needs to include “ensur[ing] public order and safety” under Article 43 of the Hague Regulations, as well as – under Article 52 – what is necessary for the military in order to fulfill its role in protecting the occupied territory from hostile activity, which may come both from outside and from within. It must be demonstrated, according to the facts of the case, that military needs were those which effectively motivated the decision to build a civilian settlement at the relevant site. The court found that here, the professional opinion by the Chief of the General Staff, in itself, did not lead to the decision to build the settlement of Elon Moreh, but that the propelling force behind the decision of the Ministerial Committee for National Security Affairs and of the Government was actually the strong desire of the people of Gush Emunim to settle the heart of the Land of Israel, as closely as possible to the city of Nablus. Both the Ministerial Committee and the Government majority were determinatively influenced by reasons that are of a Zionist worldview as to the settling of the entire Land of Israel.

 

Military needs, under international law, cannot be construed, by any reasonable interpretation, as including national security needs in their broad sense. Where the needs of the military are concerned, one would expect military officials to initiate the settlement on that particular site, and that the Chief of the General Staff would be the one to bring, according to such initiative, the military’s needs before the Government for approval of the settlement. Here, it is clear that the process was inverted: the initiative came from the political level and the political level reached out to the Chief of the General Staff for his professional opinion. The fact that those charged with assessing the military needs were not those who initiated the process to settle that particular site, but that, instead, their approval of that site was given only after the fact, in response to the initiative of the political level, demonstrates that there, in fact, was no military necessity to take private property in order to build a civilian settlement, as required by the terms of Article 52 of the Hague Regulations. It was not proven that in establishing this civilian settlement, the military preceded the act of settlement with thought and military planning. Instead, the pressure exerted by the people of Gush Emunim was what motivated the Ministerial Committee. Military considerations were subordinate to the political decision to build the settlement. As such, this does not meet the strict demands of the Hague Regulations as to preferring military needs over the individual’s right to property.

 

The Court also addressed the issue of how a permanent settlement can be established on land that was possessed only for temporary use. The decision to establish a permanent settlement that is intentionally designed to stand in its location in perpetuity – and even beyond the duration of the military rule in Judea and Samaria – meets an insurmountable legal obstacle, because a military administration cannot create within its territory “facts on the ground” for the purposes of its military needs that were, in advance, intended to exist past the end of the military rule in that area, when the fate of the territory after the end of the military rule is yet unknown.

 

The concurring opinion by Justice Witkon reiterated that the legal framework is the state authorities’ actions both in light of the domestic (or “municipal” as it is commonly termed in this context) law and in light of international law. There is no dispute that the force of the orders, in terms of the domestic law and really also in terms of customary international law (Hague Convention), is contingent upon their being “for military needs.” Here, however, even the experts charged with state security are divided as to the need for settlement in the relevant location

 

Basic Law: The Military addresses the order of the chain of command between three bodies – the Government, the Minister of Defense and the Chief of the General Staff. In terms of the hierarchy between them there is indeed no doubt that the Chief of the General Staff is below the Minister and they are both below the Government. But here the question is not whose order trumps, but rather whose opinion is more acceptable to the court.

 

In such a situation of a draw, when the opinion of the giver of the respondents’ affidavit should not be presumed to be superior to the opinions of other experts, the court asks: who bears the burden of proof? Justice Witkon held that the burden is placed upon the respondents. The law does not give the commander’s assertion that the taking of possession in required for military needs the force of a presumption – let alone that of conclusive evidence – that indeed it is so. Moreover, it is not sufficient that the commander sincerely and subjectively believes that the taking of possession was essential, in order to place the question beyond judicial review. The court need not be convinced of the sincerity of the consideration, but rather of its correctness.

 

The Court must not allow a serious infringement of property rights unless it is satisfied that it is necessary for security purposes. Here, as noted, the Minister of Defense himself was not persuaded this possession was necessary. It is not the court’s business to engage in political or ideological debates; but it is the court’s duty to examine, whether pure security considerations justify taking possession of land for the purposes of settling at that location. To determine this, Justice Witkon thought it important to know what the settlers’ position was. If they were not motivated, primarily, by security purposes, the court struggled to accept that this indeed was the purpose of their settlement.

 

Included within customary international law are the rules of the Hague Convention, so this Court should examine the lawfulness of the taking of possession in light of Article 52 of the Hague Regulations. Here, too, the test is the military need, and when one is not persuaded such need exists under the criteria of municipal law, one would not be persuaded, in any event, that it exists under the criteria of the Hague Convention either.

 

The question whether voluntary settlement falls within the prohibition over “transfer[ring] parts” of a “population” for the purposes of Article 49(6) of the Geneva Convention is not easy, and, as far as we know, it has yet to be resolved in international case law.

 

In his concurring opinion, Justice Bechor found that, had the court reached the conclusion that the military commander operated in this case in order to ensure military needs, and that he initiated that action for the purposes of ensuring such needs, which were the dominant factor in his decision, in light of all the circumstances and the timing as described in detail in the Deputy President’s opinion, he would have endorsed his action. But, as the Deputy President demonstrated in his opinion, the action of the military commander exceeded in this case the limits of its power under international law.

Voting Justices: 
Author
majority opinion
Author
concurrence
Author
concurrence
Non-writer
majority opinion
Non-writer
majority opinion
Full text of the opinion: 

[Emblem]

 

In the Supreme Court as High Court of Justice

 

   HCJ 390/79

 

Before:                                    The Honorable Justice Landau – Deputy President

                                    The Honorable Justice Witkon

                                    The Honorable Justice Asher

                                    The Honorable Justice Ben Porat

                                    The Honorable Justice Bechor

           

 

The Petitioners:

 

                                    ‘Izzat Muhamamad Mustafa Dweikat et al.

 

                                    versus

 

The Respondent:

 

  1. The State of Israel
  2. The Minister of Defense
  3. The Military Commander for Judea and Samaria
  4. The Military Commander for Nablus Sub-District
  5. Felix Menahem
  6. Shvut Avraham

                                   

                                    Objection to Order Nisi of date 25 Sivan 5740 (June 20, 1979)

 

Adv. E. Khouri

                                    On behalf of Petitioners 1-16

 

                                    Adv. A. Zichroni, Adv. A. Feldman

                                    On behalf of Petitioner 17

 

                                    Adv. G. Bach, State Attorney

                                    On behalf of Respondents 1-4

                                   

                                    Adv. R. Cohen, Adv. M. Simon

                                    On behalf of the Respondents 5-6

 

 

 

 

Abstract

 

For this petition, we must consider the legality of establishing a civilian town (settlement) in Elon Moreh, on the outskirts of the city of Nablus, on land privately owned by Arab residents. On the morning of June 7, 1979, Israeli citizens, assisted by the IDF, began to settle on a hill east of the Jerusalem-Nablus road. The hill is entirely on rocky and undeveloped land. The land was privately owned by, and registered to, the petitioners in the Nablus registry. Two days before the settlers arrived on the land, the Commander of the Judea and Samaria area, signed an Order for the possession of land that declares the lands were possessed for military needs.

The petitioners approached this court on June 14, 1979, and on June 20, 1979, an order nisi was granted against the respondents, ordering them to show cause why the court should not declare the Orders of Possession invalid. An interim order was also issued to prohibit any additional digging, construction, or settlement of additional citizens on the relevant land.

In the responding affidavit, the Chief of the General Staff explained that a civilian settlement at that location was required for security purposes, because in a time of war, military forces may leave the base in order to execute mobile missions or attacks, whereas the civilian settlement remains in its place. Being properly armed, it controls its surroundings in observation and protection of nearby traffic arteries, in order to prevent the enemy from seizing control. Opposing the Chief of General Staff, the Minister of Defense believed that these security needs could have been met in ways other than a settlement at the relevant site. Additionally, according to Lieutenant General (Res.) Bar-Lev, during wartime, IDF forces would be grounded to secure the civilian settlement, instead of engaging in combat with enemy forces.

 

The main issue the court considered (in a majority opinion by Deputy President Landau), was whether it may be legally justifiable to build a civilian settlement on the relevant site, despite having taken possession of private property for such purposes. For each and every case it must be examined whether military needs – as this term must be interpreted – did indeed justify taking possession of private land.

 

The legal framework for deciding this petition is defined first and foremost by the Order of Possession issued by the area commander, an order that is directly rooted in the powers that international law grants a military commander in territories occupied by his forces during a time of war. Additionally, the discussion is framed by the tenets of the law that has been implemented by the Israeli military commander in the Judea and Samaria area – this too according to the laws of war under international law. Substantively, we must examine under domestic Israeli law whether the Order of Possession was issued lawfully according to the authorities granted to the Government and the military by Basic Law: The Government and by Basic Law: The Military. Customary international law is in any event part of Israeli law to the extent it does not conflict with domestic legislation.

 

The court discussed the Beit El case (HCJ 606/78), in which a civilian settlement was found to comply with Article 52 of the Hague Regulations, which allows taking possession of land “for the needs of the army of occupation”, and held that temporary use of private land is permissible when it is necessary “for all kinds of purposes demanded by the necessities of war.” Here, the Court interpreted military needs to include “ensur[ing] public order and safety” under Article 43 of the Hague Regulations, as well as – under Article 52 – what is necessary for the military in order to fulfill its role in protecting the occupied territory from hostile activity, which may come both from outside and from within. It must be demonstrated, according to the facts of the case, that military needs were those which effectively motivated the decision to build a civilian settlement at the relevant site. The court found that here, the professional opinion by the Chief of the General Staff, in itself, did not lead to the decision to build the settlement of Elon Moreh, but that the propelling force behind the decision of the Ministerial Committee for National Security Affairs and of the Government was actually the strong desire of the people of Gush Emunim to settle the heart of the Land of Israel, as closely as possible to the city of Nablus. Both the Ministerial Committee and the Government majority were determinatively influenced by reasons that are of a Zionist worldview as to the settling of the entire Land of Israel.

 

Military needs, under international law, cannot be construed, by any reasonable interpretation, as including national security needs in their broad sense. Where the needs of the military are concerned, one would expect military officials to initiate the settlement on that particular site, and that the Chief of the General Staff would be the one to bring, according to such initiative, the military’s needs before the Government for approval of the settlement. Here, it is clear that the process was inverted: the initiative came from the political level and the political level reached out to the Chief of the General Staff for his professional opinion. The fact that those charged with assessing the military needs were not those who initiated the process to settle that particular site, but that, instead, their approval of that site was given only after the fact, in response to the initiative of the political level, demonstrates that there, in fact, was no military necessity to take private property in order to build a civilian settlement, as required by the terms of Article 52 of the Hague Regulations. It was not proven that in establishing this civilian settlement, the military preceded the act of settlement with thought and military planning. Instead, the pressure exerted by the people of Gush Emunim was what motivated the Ministerial  Committee. Military considerations were subordinate to the political decision to build the settlement. As such, this does not meet the strict demands of the Hague Regulations as to preferring military needs over the individual’s right to property.

The Court also addressed the issue of how a permanent settlement can be established on land that was possessed only for temporary use. The decision to establish a permanent settlement that is intentionally designed to stand in its location in perpetuity – and even beyond the duration of the military rule in Judea and Samaria – meets an insurmountable legal obstacle, because a military administration cannot create within its territory “facts on the ground” for the purposes of its military needs that were, in advance, intended to exist past the end of the military rule in that area, when the fate of the territory after the end of the military rule is yet unknown.

The concurring opinion by Justice Witkon reiterated that the legal framework is the state authorities’ actions both in light of the domestic (or “municipal” as it is commonly termed in this context) law and in light of international law. There is no dispute that the force of the orders, in terms of the domestic law and really also in terms of customary international law (Hague Convention), is contingent upon their being “for military needs.” Here, however, even the experts charged with state security are divided as to the need for settlement in the relevant location

Basic Law: The Military addresses the order of the chain of command between three bodies – the Government, the Minister of Defense and the Chief of the General Staff. In terms of the hierarchy between them there is indeed no doubt that the Chief of the General Staff is below the Minister and they are both below the Government. But here the question is not whose order trumps, but rather whose opinion is more acceptable to the court.

In such a situation of a draw, when the opinion of the giver of the respondents’ affidavit should not be presumed to be superior to the opinions of other experts, the court asks: who bears the burden of proof? Justice Witkon held that the burden is placed upon the respondents. The law does not give the commander’s assertion that the taking of possession in required for military needs the force of a presumption – let alone that of conclusive evidence – that indeed it is so. Moreover, it is not sufficient that the commander sincerely and subjectively believes that the taking of possession was essential, in order to place the question beyond judicial review. The court need not be convinced of the sincerity of the consideration, but rather of its correctness.

 

The Court must not allow a serious infringement of property rights unless it is satisfied that it is necessary for security purposes. Here, as noted, the Minister of Defense himself was not persuaded this possession was necessary. It is not the court’s business to engage in political or ideological debates; but it is the court’s duty to examine, whether pure security considerations justify taking possession of land for the purposes of settling at that location. To determine this, Justice Witkon thought it important to know what the settlers’ position was. If they were not motivated, primarily, by security purposes, the court struggled to accept that this indeed was the purpose of their settlement.

Included within customary international law are the rules of the Hague Convention, so this Court should examine the lawfulness of the taking of possession in light of Article 52 of the Hague Regulations. Here, too, the test is the military need, and when one is not persuaded such need exists under the criteria of municipal law, one would not be persuaded, in any event, that it exists under the criteria of the Hague Convention either.

The question whether voluntary settlement falls within the prohibition over “transfer[ring] parts” of a “population” for the purposes of Article 49(6) of the Geneva Convention is not easy, and, as far as we know, it has yet to be resolved in international case law.

In his concurring opinion, Justice Bechor found that, had the court reached the conclusion that the military commander operated in this case in order to ensure military needs, and that he initiated that action for the purposes of ensuring such needs, which were the dominant factor in his decision, in light of all the circumstances and the timing as described in detail in the Deputy President’s opinion, he would have endorsed his action. But, as the Deputy President demonstrated in his opinion, the action of the military commander exceeded in this case the limits of its power under international law.

 

Judgment

Deputy President Landau

For this petition, we must consider the legality of establishing a civilian town (settlement) in Elon Moreh, on the outskirts of the city of Nablus, on land that is privately owned by Arab residents. A similar issue was decided by this Court in HCJ 606/78, Suleiman Taufic Ayuv et al. v. the Minister of Defense and 2 Others; Jamil Arsam Mataua and 12 Others v. the Minister of Defense and 3 Others, IsrSC 33(2) 113, 127, 124-129, 128-129, 131, 132-133, 120, 126, 116, 118, 119 (hereinafter for brevity: the Beit El matter), on March 13 1979. We ruled there that the establishment of two civilian towns on private lands in Beit El near Ramallah and in the B Valleys by Tubas violated neither domestic Israeli law nor customary international law, which constitutes part of domestic law, as both towns were established for military purposes, as we interpreted the term.

It was said in the Beit El case (bottom of page 128), in terms of the justiciability of this issue, that the problem of the settlements “is in dispute between the government of Israel and other governments, and that it is liable to be at issue at fateful international negotiations in which the Government of Israel is involved.” Meanwhile, the intensity of the dispute has not since subsided in the international arena; moreover, it has intensified within the Israeli public discourse, as well, as reflected in the very decision to build a civilian settlement in Elon Moreh, which was adopted by a majority vote in the Israeli cabinet. This, therefore is a pressing issue that is hotly debated within the public. In HCJ 58/68, Binyamin Shalit v. Minister of Interior , IsrSC 23(2) 477, 521, 530 (the issue of “who is a Jew”), I wrote (at the bottom of page 521) of “… the grim result in which a court seemingly abandons its rightful place, above the disputes that divide the people, with its justices themselves entering the fray…”, and on page 530, I explained – as one of the minority justices – that the Court must refrain from ruling on the dispute there, when it has no valid source for its ruling. I added that even in such case, “there may be instances where a justice sees himself as compelled to respond with his personal position on matters pertaining to his own worldview, though it is controversial.” This time we have valid sources for our ruling and we need not, and further – must not, when adjudicating, involve our personal views as citizens. Still, there is great concern that the Court might be seen as having abandoned its rightful place in entering the fray of public controversy, and that its decision might be received by part of the public with applause and by the other part with complete and passionate rejection. In this sense, I see myself here as obligated to rule in accordance with the law, in any matter lawfully brought before this Court. That is what compels me, knowing full-well in advance that the public at large would pay no attention to the legal reasoning, but only to the ultimate conclusion, and that the Court, as an institution, could have its rightful stature compromised, beyond the disputes that divide the public. But what can we do? This is our role and this is our duty as justices.

On the morning of June 7, 1979, Israeli citizens, assisted by the Israel Defense Forces (IDF), began to settle on a hill, located about 2 kilometers east of the Jerusalem-Nablus road, and about the same distance south east of the intersection of that road with the road descending from Nablus toward the Jordan Valley. The operation was carried out with the assistance of helicopters and heavy machinery. A road was forged from the Jerusalem-Nablus road to the hill. The entire hill is rocky and undeveloped land (aside from a small plot on the site’s north-west side, which was plowed and planted only recently, and in the opinion of the respondent’s expert, this was done out of season, at a location where there is no prospect of any financial gains from the produce). However, forging the 1.7 kilometer road, required harming the existing sorghum crops, in a territory of about 60 meters long and 8 meters wide, as well as about six four-year-old olive plants.

The hill is located within the lands of the Rujeib village, which is located nearby to the northwest. The seventeen petitioners, who are residents of the village, hold plots registered to their names in the Nablus registry after having gone through a process of land regulation. The total area of their plots is about 125 Dunams. The petitioners hold no rights of ownership in the land of the forged road.

On June 5, 1979, two days before the settlers arrived on the land, Brigadier General Binyamin Ben Eliezer, the Commander of the Judea and Samaria area, signed an Order for the possession of land number 16/79 (hereinafter: “Order of Possession” or “Order of Possession n. 16/79” – ed. note). The heading of the Order of Possession reads: “Under my authority as area commander, and because I believe it to be required for military needs, I hereby order as follows:…”. And in the body of the Order the signer declares a territory of about 700 dunams, defined by a map that was appended to the order, as “possessed for military needs.” Petitioners’ plots are included within this territory. Section 3 of the order stipulates that any lawful owner or holder of the land included in the territory would be permitted to submit, to a Claims Department Officer, a claim for periodical use fees, due to the possession of the land, and for compensation for any real damage caused in the course of the taking of possession. Under section 5, “notice of the contents of the order will be given to owners or holders of land located in the territory.” A similar order pertaining to the terrain of the road to the hill (number 17/79) was signed only on June 10, 1979 – three days after the settlement on the land. As for giving required notice to the land owners, including the petitioners, it turns out that only on the actual day of the settlement on the land, at 8 am, around the time the works on the site began, a notification of the order was given to the leaders (mukhtars) of the Rujeib village, who were summoned to the office of the Nablus military ruler. Written notices were given to the leaders only on June 10, 1979, for delivery to the land owners. In the responding affidavit for this petition, Lieutenant General Raphael Eitan, the Chief of the General Staff, says that it would have been appropriate to give advance notice to the land owners of the intent to possess the land, as is customary as a general rule in similar cases, and that he has instructed that, in the future, such notices be given to the relevant land owners at an appropriate time before the possession of the land. It is unclear why those in charge deviated from the prevailing custom this time. It seems that the arrival on the land was organized,  as if it were a military operation, exploiting the element of surprise, with the intent of preempting the “risk” of this Court’s intervention, as some the land owners had already approached the Court prior to the commencement of the work on the site.

The petitioners approached this Court on June 14, 1979, and on June 20, 1979 an order nisi was granted against the respondents – the Government of Israel, the Minister of Defense, the regional Military Commander of Judea and Samaria, and the Military Commander of Nablus – ordering them, inter alia, to show cause why the Orders of Possession should not be invalidated and why the instruments and structures on the land should not be removed in order to prevent the building of a civilian settlement on the land. Additionally, an interim order was issued to prohibit any additional excavation or construction on the relevant land, as well as the settlement of any additional citizens on it, in addition to those who settled on it before the interim order was granted. This interim order is in effect until today, with certain changes made at the request of the settlers over the course of the hearing of the petition.

In the responding affidavit, the Chief of the General Staff explained that in his opinion establishing a civilian settlement at that location is required for security purposes, and that his position as to the security significance of the territory and the settlement on it was brought to the knowledge of the Ministerial Committee for National Security Affairs,. The Ministerial Committee resolved in its meetings on May 8, 1979 and May 10, 1979 to approve the possession of the land through an Order of Possession for the purposes of building the settlement, and, following these decisions, which were approved by the Cabinet in its meeting on June 3, 1979, the area Commander of Judea and Samaria issued the Order of Possession in question. Lieutenant General Eitan, in his affidavit, elaborated on the important contribution of civilian settlements to the protection of the Jewish population, dating back to before the establishment of the state, as well as during the War of Independence. He discussed the security purposes that these settlements fulfill in terms of regional defense and in terms of the IDF’s organization, both in periods of calm and in times of emergency. With great emphasis, the Chief of the General Staff expressed his unequivocal opinion regarding the importance of regional defense, suggesting serious criticism of those who neglected regional defense, bringing it to an “all time low,” in his words, by the 1973 Yom Kippur war, when the military’s mindset still rested on the laurels of the victory in the Six Day War. However, “after the 1973 War, regional defense was restored to its greatness, which it was denied by hubris and fundamentally wrongful consideration as to its contribution.” Today, the regional defense communities are armed, fortified, and properly trained for their mission to protect the area where they live, and their location on the ground is determined with consideration for their contribution to controlling the area and assisting the IDF in its various missions. The Chief of the General Staff explained the unique importance attributed to a civilian settlement, as opposed to a military base, because in war time, the military units may leave the base for the purposes of executing mobile missions or attacks, whereas the civilian settlement remains in its place. Being properly armed, it controls its surroundings, in observation and protection of nearby traffic arteries, in order to prevent the enemy from seizing control. This is particularly pertinent when reserves are recruited in a time of war – and in this case, in a time of war on the eastern front. At such a time, the military units must move toward their designated locations, which are spread out. The import of controlling traffic arteries in order to ensure quick and uninterrupted movement, therefore grows. Nablus and its surroundings sit at an irreplaceable crossroad, rendering control of nearby roads especially important. Elon Moreh sits over a number of such roads; these are the Ramallah-Nablus road, the Nablus-Valley road through Jiftlik, and an additional road to the Valley through Aqraba and Majdal, which also runs close by to the south.

There is no doubt, and even the petitioners’ attorneys – Mr. Elias Khouri on behalf of petitioners 1-16 and the respected sirs A. Zichroni and A. Feldman for petitioner 17 – do not dispute, that Lieutenant General Eitan is absolutely sincere and deeply convinced of his positions, which are a matter of his professional expertise as the highly experienced military man that he is. But he does not conceal that there is dispute over his conclusion as to the crucial importance of building a civilian settlement on the site chosen for Elon Moreh. In paragraph 23(d) of his affidavit he says as follows:

“I am aware of the opinion of respondent no 2, who does not dispute the strategic significance of the relevant area, but believes that security needs may be met in ways other than a settlement at the relevant site.”

Respondent no. 2 is the Minister of Defense. An usual circumstance has arisen in which the respondents themselves hold diverging opinions on the subject matter of the petition, such that the Chief of the General Staff’s affidavit must be viewed as representing the opinions, both of the military authorities as well as of the Israeli Government, which decided this matter by a majority vote on an appeal submitted by the Deputy Prime Minister challenging a decision by a ministerial committee (the Deputy Prime Minister too, like the Minister of Defense, is a clear authority on military matters, having previously served as the second Chief of General Staff of the IDF). The petitioners were also permitted to submit additional expert opinions, one by Lieutenant General (Res.) Haim Bar-Lev, and the other by Major General (Res.) Mattityahu Peled. Lieutenant General (Res.) Bar-Lev expressed his professional assessment that Elon Moreh does not contribute to Israel’s security as it is unhelpful, both in combatting acts of terror and sabotage in times of calm, as well as in times of war on the eastern front, because a civilian settlement located on a hill about 2 kilometers from the Nablus-Jerusalem road cannot facilitate securing this traffic artery, and in any event there is a large military base located close to the road itself, which controls central traffic arteries to the south and to the east. In fact, according to Lieutenant General (Res.) Bar-Lev, hostile activity against the settlement during wartime, would necessitate the deployment of forces to secure the settlement, at the expense of engaging those forces in combat with enemy forces. The apparent response to these misgivings in Lieutenant General Eitan’s affidavit is that the primary significance of a civilian settlement on the relevant site is not for the purposes of combating hostile terrorist activity, and that this was not the Chief of the General Staff’s reason for taking possession of the site, but that the main importance may be revealed specifically during wartime, because, in war, the very  base that Lieutenant Bar-Lev speaks of would be vacated, and that there is no comparison between a civilian settlement that is currently integrated into the regional defense strategy and  the civilian settlements of the past, in terms of the quality of its ammunition, equipment and level of training. The opinion of Major General (Res.) M. Peled is detailed and his conclusion is that “the argument as to the security value attributed to the ‘Elon Moreh’ settlement is made in the absence of good faith and for one purpose alone – to justify taking possession of land that cannot be justified otherwise.” I did not find in Peled’s opinion any discussion of Lieutenant General Eitan’s primary reason, that is the role of a settlement located in the relevant area to safeguard the freedom of movement on nearby roads as reserves forces are spread along the eastern front during wartime. As for the opinion of Lieutenant General Bar-Lev and other military experts who share his position, I have no intention to insert myself between experts. It will suffice for me to say here, too, as we said in HCJ 258/79 (unpublished) as follows:

“In such a dispute regarding military-professional questions, in which the Court has no well founded knowledge of its own, the witness of respondents, who speaks for those actually responsible for the preservation of security in the administered territories and within the Green Line, shall benefit from the assumption that his professional reasons are sincere reasons.  Very convincing evidence is necessary in order to negate this assumption.”

 

And it was also said there that:

“In matters of professional military assessment, the Government would surely guide itself primarily by the counsel it receives from the Chief of the General Staff.”

Indeed, we mentioned there the “giver of the respondents’ affidavit,” whereas here the respondents are divided in their opinions. But as we have heard from Mr. Bach, the learned State Attorney, who argued on behalf of respondents 1-4, that despite his difference in opinion, the Minister of Defense accepted the decisions of the cabinet majority and – complying with his constitutional duties as the government-appointed supervisor of the military under section 2 of Basic Law: The Military – passed the Government’s decision on to the Chief of the General Staff for its implementation.

At the core of the discussion in this petition must stand a factual analysis, insofar as these facts have been uncovered by the evidence before us, in light of the law, and particularly in light of our ruling in the Beit El case. But before I turn to that, I must first complete the presentation of the facts themselves, as we have received additional factual material in the Chief of the General Staff’s written response to a questionnaire we drafted, after hearing the main oral arguments by the parties’ attorneys, in order that he respond to it, instead of to an oral cross examination that petitioners’ attorneys sought. The responses to the questionnaire and other documents that the learned State Attorney was permitted to submit shed additional light on the facts of the case, expanding and deepening our understanding and evaluation of these facts, beyond what was included in Lieutenant General Eitan’s affidavit and the first affidavit by Mr. Aryeh Naor, the Government Secretary, which mentioned decisions by the Ministerial Committee for National Security Affairs and by the Government in the Ministers’ Committee’s appeal. The following is the picture that is ultimately revealed:

  1. On January 7, 1979, following an unlawful protest (“an unauthorized protest” as the Government secretary puts it in his affidavit) of people from “Gush Emunim” on a road in the Nablus area, the Ministerial Committee for National Security Affairs convened, resolving the following:
    1. The Government sees the “Elon Moreh” group as a candidate for settlement in the near future.
    2. The date and location of the settlement will be determined by the Government in accordance with appropriate considerations.
    3. When determining the site for the Elon Moreh settlement the Government will take into considerations, to the extent possible, the group’s wishes.
    4. The people of “Elon Moreh” must now return to the camp from which they came.
  2. Following this resolution of the Ministerial Committee for National Security Affairs, representatives of the Ministerial Committee on Settlement Affairs conducted a preliminary tour of the area, in order to find a proper site for the “Elon Moreh” group to settle. Five alternative locations in the area were suggested, each submitted for examination by the IDF. The entities charged with the matter in the Judea and Samaria Area command and at the General Staff examined each of the proposed locations and decided, based on IDF considerations, that two of the suggested locations should be thoroughly explored. One of these locations was a site recommended by the Minister of Agriculture, who is the Chair of the Ministerial Committee on Settlement Affairs and a member of the Ministerial Committee for National Security Affairs. The second site is the site that was ultimately chosen by the IDF and is the subject of this petition (para. 2(d) of the Chief of the General Staff’s answers to the questionnaire.)

The Judea and Samaria Area command examined the possibility of finding some territory in the area that is not privately owned, but no such location was found (Ibid., para. 2(e)).

  1. On April 11, 1979 (likely after the abovementioned preliminary tour and as a result thereof) the Chief of General Staff gave his approval that General Staff authorities charged with the matter take possession of the area for military purposes (Ibid, para. 2(b)).
  2. In anticipation of a hearing that was to be held by the Ministerial Committee for National Security Affairs, the Chief of the General Staff was asked as to his opinion, and on May 3, 1979 he once more notified the above authorities at the General Staff, through his bureau chief, that in his view there is a military need for taking possession of the territory. (Ibid., loc. cit..)
  3. The opinion of the Chief of the General staff was brought to the attention of the Ministerial Committee for National Security Affairs while it discussed the settlement in its session on May 8, 1979 (Ibid., loc. cit., and the first affidavit by the Government Secretary, para. 4.) In that session, the Ministerial Committee for National Security Affairs decided to support the Order of Possession for military necessities (first affidavit by the Government Secretary, para. 3(a)).
  4. On May 30, 1979, the Ministerial Committee for National Security Affairs reaffirmed its decision from May 8, 1979 (Ibid, para. 3(b)).
  5. The Deputy Prime Minister appealed the decision by the Ministerial Committee for National Security Affairs before the Government Cabinet and on June 3, 1979 the Cabinet rejected his appeal by a majority vote and upheld the decision of the Ministerial Committee.
  6. On June 5, 1979 Brigadier General Ben Eliezer signed the Order of Possession, and on June 7, 1979 the settlers arrived on the site, assisted by the military, as recounted above.

Here, I will discuss two arguments by Mr. Zichroni on behalf of petitioner no. 17, in order to dispose of them before delving into the core matters of this petition. He argues that there was a constitutional flaw in the decision-making process in regards to the settlement, because under Basic Law: The Military, the Minister of Defense is the Chief of the General Staff’s superior, so his opinion on military matters is prioritized over the opinion of the Chief of the General Staff, as well as over the opinion of the Ministerial Committee for National Security Affairs and that of the Government itself, both of which operate under Basic Law: The Government. Consequently, the Government (or the Ministerial Committee for National Security Affairs) was unauthorized to decide contrary to the position of the Minister of Defense. This argument must be rejected. Indeed, the Minister of Defense is the supervisor of the military on behalf of the Government under section 2(b) of Basic Law: The Government, but the military is subordinate to the Government as a body, according to section 2(a) of that same Basic Law, and so the Chief of the General Staff is subject to the authority of the Government under section 3(b), though he directly answers to the Minister of Defense, as that same section provides. Therefore, as long as the Government has not decided on a particular matter, the Chief of the General Staff must follow the instructions of the Minister of Defense. However, once a matter was brought before the Government, a decision by the Government binds the Chief of the General Staff, as the Minister of Defense is but one of the members of the Government. As long as he remains a member of the Government he bears, together with his fellow ministers, joint responsibility for its decisions, including decisions made by a majority against his own opinion. Such  is also the case for decisions by ministerial committees appointed by the Government, either as a permanent committee or for a certain issue according to section 27 of Basic Law: The Government, because in the absence of an appeal to the Government, even were an appeal submitted and rejected, the fate of a decision by a ministerial committee is as the fate of a decision by the Government in its meeting, as provided by section 32(c) of the Government Operations Regulations.

The road is now open to discussing the main issue: whether it may be legally justifiable to build a civilian settlement on the relevant site, despite the taking of possession of private property for such purposes. In the Beit El case, we resolved a similar question in the affirmative, both under domestic, municipal Israeli law, as well as under customary international law, because we were persuaded that military needs required building the two civilian settlements in question, on the very sites where they were built. It is self-evident, and Mr. Bach also notified us that this was well explained during the meetings of the government, that this ruling does not constitute the Court’s endorsement of all takings of possession of private land for the purposes of civil settlement in Judea and Samaria, but that for each and every case it must be examined whether military needs – as this term must be interpreted – did indeed justify taking possession of private land.

At the outset of this discussion stands now – unlike in the Beit El case – the argument by two settlers of the “Elon Moreh” site who are the members of the settlers’ council and who were permitted (Motion 568/79) to join this petition as respondents, since Justice Y. Cohen who decided the motion found them to have a material interest in the petition. In their affidavits and pleadings, these additional petitioners painted a broad picture, far beyond what was argued by the original respondents. In the affidavit given by Mr. Menachem Reuven Felix, it was explained that the members of the group settled in Elon Moreh because of the divine commandment to inherit the land given to our forefathers and that “the two elements therefore of our sovereignty and settlement are interlinked” and that “the act of settling the people of Israel in the land of Israel is the act of security that is most real, most efficient, and most true. But the settlement itself… does not stem from security purposes or physical needs but from the force of a calling and from the force of Israel’s return to its homeland.” And he later declares:

“Elon Moreh is located in the heart of hearts of the Land of Israel in the deepest sense of the word, indeed both geographically and strategically, but first and foremost it is the place where this land was first promised to our first forefather and it is the place where the first property of the father of our nation, which this Land – the Land of Israel – is his namesake, was acquired.

Therefore, with all due respect to security considerations, and though its sincerity is not doubted, in our view it neither adds nor detracts.”

And after citing Numbers, 33, 53: “And you shall take possession of the land and settle in it, for I have given you the land to possess”, he adds as follows:

“Whether some of the settlers of Elon Moreh will be incorporated into regional defense according to IDF plans, or not, settling the Land of Israel , which is the calling of the People of Israel and the State of Israel, is in any event in the safety, wellbeing, and in the best interest of the People and of the state.”

Regarding petitioners’ arguments, which are based on international law, including various international treaties, he has adopted an explanation received from his attorney, that international law bears no relevance because the conflict is an internal dispute between the People of Israel returning to their homeland and the Arab residents of the Land of Israel and that this is not an “occupied territory” or “held territory” but the heart of the Land of Israel, our right over which is undisputed, and second – because even factually and historically we are concerned with Judea and Samaria which were part of the British Mandate and were conquered by physical force by our neighbor to the east – an act of conquest and annexure never recognized by anyone (except for England and Pakistan.) This is the crux of the affidavit.

Even those who do not share the views of the giver of the affidavit and his cohort must respect their profound religious faith and the spirit of devotion that motivates them. But we who preside in a state committed to the rule of law, where religious law is applied only to the extent permitted by secular law, must apply the laws of the state. As to the  giver of the affidavit’s views regarding property rights in the land of Israel, I assume he does not mean to say that under Jewish law it is permissible to void the private property, for any reason, of anyone who is not of our religion. After all, our scriptures state explicitly that “the foreigner living among you will be as a citizen and you shall treat him as your own as you were foreigners in the land of Egypt” (Leviticus 19:34.) In the literature submitted to us by the other respondents, I found that the Chief Rabbi, I.Z. Hertz, of blessed memory, mentioned this verse when the British Government solicited his opinion on the draft of the language of the Balfour Declaration. In his response, he said that referencing the civil and religious rights of the non-Jewish communities in the Declaration’s draft was but a translation of that same fundamental principle from the Torah (Palestine Papers 1917-1922, Seeds of Conflicts (John Murray) p. 13). This was the authentic voice of Zionism, which insists upon the Jewish people’s right of return to its homeland that was also recognized by other nations, for instance in the preamble to the Mandate for Palestine, but never sought to strip the residents of the land, members of different peoples, of their civil rights.

This petition includes a compelling response to the argument which seeks to interpret the historical right guaranteed to the People of Israel in the Torah as violating property rights under private property law. After all, the legal framework for deciding this petition is defined first and foremost by the Order of Possession issued by the area commander and this order is, by all accounts, directly grounded in the powers that international law grants a military commander in territories occupied by its forces during a time of war. Additionally, the discussion is framed by the tenets of the law that has been implemented by the Israeli military commander in the Judea and Samaria area – this too according to international humanitarian law. These tenets are found in Proclamation No. 1 published by the military commander on June 7, 1967 whereby on that day the IDF entered the area and assumed control and the establishment of security and order, as well as in Proclamation No. 2 from that day that establishes in its section 2 that:

“The law that applied in the area on June 6, 1967 will remain in effect, to the extent it does not conflict with this Proclamation or any other proclamation or order issued by me and with appropriate changes resulting from establishing the rule of the IDF in the area.”

Also, section 4 of that same proclamation should be mentioned, where the commander of the Judea and Samaria area declared:

“Movable and immovable property… that was owned or registered to the Jordanian Hashemite state or government or a department or agent thereof or any part thereof, located in the area, will be passed into my exclusive possession and will be managed by me.”

These proclamations are the legal basis for the military rule in Judea and Samaria, which still exists there to this day, without having been replaced by another form of rule. Mr. Rahamim Cohen, on behalf of the additional respondents (the people of the Gush Emunim group) directed our attention to the Jurisdiction and Powers Ordinance, 1948, which establishes in section 1 that “any law that applies to the State of Israel in its entirety will be considered to apply to the entire territory which includes the territory of the State of Israel and over the Land of Israel which the Minister of Defense defined by proclamation as being held by the IDF.” Although the Minister of Defense did not issue a proclamation defining Judea and Samaria as occupied by the IDF for the purposes of this section, but – as Mr. R. Cohen says – the main point is that the Provisional State Council, as the sovereign legislature of the State of Israel, authorized the Minister of Defense to issue orders as to any part of the Land of Israel: this mere authorization is testament to the fact that the Provisional State Council as the legislature, saw the State of Israel as sovereign over the entire Land of Israel.

This is a forceful point, but it must be rejected. The fact of the matter is that the Minister of Defense did not issue an order based on his authority under section 1 of the above Ordinance in terms of the area of Judea and Samaria (and the Government of Israel did not even extend the law of the State of Israel onto that area, as it did in terms of East Jerusalem, in a decree based on section 11 of the Law and Administration Ordinance, 1948.) When addressing the legal foundations of Israeli rule over Judea and Samaria, we are concerned with the legal norms actually, and not merely potentially, in effect. The fundamental norms upon which Israeli rule in Judea and Samaria were in fact enacted were and are, as said, to this day, norms of military rule rather than the application of Israeli law, which involves Israeli sovereignty.

Here we must command again to memory, like in previous petitions that came before this court, an important argument that Israel expresses in the international arena. This argument is based on the fact that at the time that the IDF entered Judea and Samaria this area was not held by any sovereign whose possession of it received general international recognition. Mr. Rahamim Cohen reiterated this argument with much force. In the Beit El case I said (on page 127) the following:

“This petition does not require our consideration of this problem, and we therefore join this dispute here to that bundle of disputes which I discussed in HCJ 302/72, 306/72, Sheik Suleman Hsain Udah Abu Hilo v. the Government of Israel; Sheik Sabah Abud Ala Oud Al Salima v. the Government of Israel, IsrSC 27(2) 169, 179, 176, 177, 184, there on page 179 which remain open in this Court.”

I believe that in the petition before us, as well, that it can be resolved only according to the presumption at the basis of the Order of Possession. These presumptions indicate the bounds of the discussion for the additional respondents as well.

We therefore must examine the legal force of the relevant Order of Possession under international law from which the military commander who issued it derives his authority. In addition, we must examine whether the order was issued lawfully under Israeli law, because – as was in the Rafah Approach case (HCJ 302/72, p. 169 on p. 176) – we must assume here, too, that the authority for such review exists personally in regards to officials in a military administration who belong to the state’s executive branch as “people who fulfill public functions under law” and who are subject to the review of this Court under section 7(b)(2) of the CourtsLaw-1957. On the merits, we must examine under domestic Israeli law whether the Order of Possession was issued lawfully according to the powers granted to the Government and the military by Basic Law: The Government and by Basic Law: The Military. In the Beit El case, we conducted each examination – that according to domestic Israeli law and that according to international law –separately. I have already discussed above, according to the mentioned Basic Laws, the argument about the decision making process regarding the possession of the land, taken on the Governmental level. I can now conduct the primary discussion combining the two examinations together, as customary international law is, in any event, part of Israeli law to the extent it does not contradict domestic law (see, the Beit El case, at 129.).

Counsel for all the parties focused their arguments on comparing the matter before us to the facts of the Beit El case and to the ruling there, with one side seeking to reveal the similarities between the two, and the other side emphasizing the distinctions. Mr. Bach added to this and reiterated the non-justiciability claim that he made already in the Beit El case and that was already rejected there in no uncertain terms, in the words of my honorable colleague Justice Witkon (at the top of page 124):

“I was not impressed by this argument whatsoever… assuming – an assumption that indeed was not confirmed in this case – that one’s property was harmed or was completely denied to them, it is hard to believe that a court will wash its hands from that person because their rights may be subject to dispute in a political negotiation. This argument did not add weight to the respondents’ other arguments…”

For my part, I added that (on p. 128-29) although the special aspect of the case requiring interpreting section 49(6) of the Geneva Convention must be seen as non-justiciable, petitioners’ claim is generally justiciable before this court, as it involves property rights. Mr. Bach maintained his argument was misunderstood, because, in this opinion, the matter of justiciability is merely a function of the matter at hand, and the matter is on one hand bitterly controversial politically and on the other hand concerns undeveloped and rocky land at some distance from the Rujeib village itself. And he again quotes an article by Professor Jaffe published in in 74 Harvard Law Review, 1265, pp. 1302-1304.

The argument was well understood even at the time; repeating it does not add to its force. At the time, I excluded section 49(6) of the Geneva Convention from the discussion entirely, because as part of treaty-based international law, it is not binding law in an Israeli Court, but I joined the opinion of my honorable colleague as to the matter’s justiciability in terms of the Hague Regulations, because, as customary international law, they do indeed bind the military administration in Judea and Samaria. I will act similarly here and refrain from discussing the matter before us in terms of section 49(6) of the Geneva Convention. But concerning an individuals’ property rights, we cannot dismiss the matter with a claim of the right’s “relativity.” Under our legal system, the individual’s property right is of significant legal value which is protected by both civil and criminal law, and it does not matter, as far as a land owner’s entitlement to protect their property under law is concerned, whether the land is cultivated or rocky.

The principle of the protection of private property applies also in the laws of armed conflict, as expressed in Article 46 of the Hague Regulations. A military administration that wishes to infringe upon private property rights must demonstrate legal authority and cannot exempt itself from judicial oversite on the grounds of non-justiciability.  

For his part, Mr. Zichroni attempted to distinguish our ruling in the Beit El case, because there the court justified the civilian settlement with military needs tied to combating hostile terrorist activity in times of calm, whereas, here, the Chief of the General Staff emphasizes in this affidavit primarily the military need in a civilian settlement on the relevant site in case of actual war on the eastern front. But there is no basis for this distinction. The Beit El case, too, concerned the needs of regional defense designed to be integrated into the general system of defending the country specifically in times of war – and see the quote from Major General Orly there, at 125, as well as my comment at the top of page 131, that “the military’s powers at times of active war and at times of calm cannot  be strictly distinguished. Even if today there is quiet in the area near Beit El, it is best to take preventative measures.” My honorable colleague, Justice Ben Porat, said this with additional emphasis (Id, at 132-33.) And again in the Matityahu case, HCJ 258/79 (unpublished) on p. 4 of the opinion, we said that such matters cannot be viewed from a static perspective, ignoring what might happen in the future, whether as a result of hostile activity from outside or from within the occupied territory, and proper military planning must account, not just for existing dangers, but also for dangers that might be created as a result of dynamic developments in the area.

The question then circles back: Have respondents demonstrated sufficient legal authority to take possession of the petitioners’ lands? The Order of Possession was issued by a military commander and states at the outset that the Order was issued “under my authority as commander of the area and because I believe it to be required for military needs.” It should be recalled here that in this Order the area commander chose at the outset language that was less determinate than that used in the order given in the Beit El case. The Order of Possession stated that possession of the land where the Beit El base stands, and on whose outskirts the construction of a civilian settlement commenced only eight years later – was “imperatively and overwhelmingly demanded by military needs.” There, we justified the civilian settlement on the basis of Article 52 of the Hague Regulations, which allows taking possession of land “for the needs of the army of occupation.” On page 130 I also referenced the words of Oppenheim who believes that temporary use of private land is permissible when it is necessary “for all kinds of purposes demanded by the necessities of war.” I mentioned the British Manual of Military Law, which supports the temporary use of the privately owned land and buildings for the purposes of “military movements, quartering and the construction of defence positions.”

We also rejected (on page 130) the argument by Mr. Khouri that the phrase “for the needs of the army of occupation” includes only the immediate needs of the military itself, and noted (at the bottom of page 130) that the “primary role of the military in an occupied territory is to ‘ensure…public order and safety,’ as provided by Article 43 of the Hague Regulations. What is necessary for this end, is in any event necessary for the needs of the occupying military in terms of Article 52.” In a similar fashion. we might say here, too, that what is necessary for the military in order to fulfill its role in protecting the occupied territory from hostile activity. which may come from outside and from within, this, too, is necessary for military needs in terms of Article 52.

Thus far I concur with Mr. Bach that possession of privately owned land for the purposes of a civilian settlement is potentially justified under Article 52 of the Hague Regulations  – and we found no other source for this in international law. Under what circumstances? When it is proved, according to the facts of the case, that military needs were those which in practice brought upon the decision to build a civilian settlement at the relevant site. I reiterate that there can be no doubt that according to the professional view of Lieutenant General Eitan, building a civilian settlement at this location accords with the needs of regional defense, which has particular significance in ensuring the safety of the traffic arteries when military forces must disperse at times of war, but I have concluded that the Chief of the General Staff’s professional opinion would not, in itself, have led to the decision to build the settlement of Elon Moreh, but for further reason that was the propelling force behind the decision of the Ministerial Committee for National Security Affairs and of the government cabinet, that is – the strong desire of the people of Gush Emunim to settle the heart of the Land of Israel, as closely as possible to the city of Nablus. As for the discussions in the Ministerial Committee and the cabinet, we could not investigate them through reviewing their minutes, but even without them we have sufficient indication in the evidence before us, that both the Ministerial Committee and the cabinet majority were determinatively influenced by reasons stemming from a Zionist worldview as to the settling of the entire Land of Israel. This worldview is clearly revealed from a notice by Mr. Bach on behalf of the Prime Minister during the Court’s hearing on September 14, 1979, in response to additional respondents’ affidavit in paragraph 6 of his affidavit, to which I called attention during the Court’s hearing on the previous day. I recorded Mr. Bach’s words verbatim, for their significance and the status of the person on whose behalf Mr. Bach spoke, as following:

“I spoke to the Prime Minister yesterday and he authorized me to state, after the matter was raised during yesterday’s session – that on many occasions, in Israel and abroad, the Prime Minister emphasizes the right of the People of Israel to settle in Judea and Samaria and this is not necessarily related to discussions taking place in the Ministerial Committee for National Security Affairs concerning national and state security , when what is up for discussion is a specific matter of taking possession of some site or another for security purposes. In the Prime Minister’s view, these matters are not in conflict, but they are still distinct. As for what was said about the Prime Minister’s intervention, this was in the form of raising the issue for discussion before the Ministerial Committee for National Security Affairs, of which the Prime Minister is the chair and where section 37(a) of the Government Operations Regulations, concerning deliberations of the Ministerial  Committee for National Security Affairs, mandates that the Prime Minister determines the topics on the agenda, by his initiative or at the request of Committee members. He took part of the discussion in the Committee and expressed his clear and unequivocal opinion there in favor of issuing an Order of Possession for the purposes of building that settlement. This, as noted, considering, inter alia, the opinion of the Chief of the General Staff.”

The view as to the People of Israel’s right, which is expressed in these words is based on the tenets of Zionist theory. But the question again before this court in this petition is whether this worldview does indeed justify the taking of private property in a territory that is subject to military administration. As I attempted to clarify, the answer depends on the correct interpretation of Article 52 of the Hague Regulations. I believe that the military needs discussed in this article cannot be construed to include, by any reasonable interpretation, national security needs in their broad sense, as I have just described them. I shall again bring the words of Oppenheim, id., in section 147, at 410:

“According to Article 52 of the Hague Regulations, requisitions may be made from municipalities as well as from inhabitants, but so far only as they are really necessary for the army of occupation. They must not be made in order to supply the belligerent’s general needs.”

Military needs for the purposes of Article 52 may therefore include the needs that the Chief of the General Staff discussed in his responding affidavit, that is the needs of regional defense and of securing traffic arteries to allow reserves forces to disperse uninterruptedly at time of war. At the meetings of the Ministerial Committee the resolution was undertaken “considering inter alia the opinion of the Chief of the General Staff,” in the language of Mr. Bach’s notice (emphasis added – M. L.). The decision of the Ministerial Committee from January 7, 1979 guarantees Gush Emunim that the time and location of the settlement would be decided by the cabinet “in accordance with appropriate considerations,” and that while determining the location for the settlement the government would consider, as much as possible, the wishes of the Elon Moreh group. I would not be mistaken were I to assume that what Mr. Bach said on behalf of the Prime Minister reflects the spirit of the discussion in the Ministerial Committee. I do not doubt that indeed the Chief of the General Staff’s position was among the other factors that the Committee considered. But I believe this to be insufficient in order uphold the decision under Article 52, and these are my reasons:

I.                When it comes to military needs, I would expect that military officials initiate the establishment of a settlement on a particular site, and that the Chief of the General Staff would be the one to bring, according to such initiative, the military’s needs before the political echelon for approval , should it find no political reasons barring it. The Chief of the General Staff’s affidavit of response does seem to indicate that this was the decision-making process. But from the more complete picture that emerged after the Chief of the General Staff responded to the questionnaire presented to him, as well as from the additional documents submitted by Mr. Bach, it was made clear that the process was inverted: the initiative came from the political echelons, which then reached out to the Chief of the General Staff for his professional opinion. The Chief of the General Staff then expressed a positive opinion, in accordance with the conception he has always held. This is entirely clear from the responses of the Chief of the General Staff to the questionnaire, in paragraph 2:

“1. To the best of my knowledge, the body that initiated the settlement in the Nablus area was the Ministerial Committee for National Security Affairs.

2. I did not approach the political echelons with a proposal to build the settlement in Elon Moreh.

3. There was no preexisting plan to build a civilian settlement on the relevant site approved by a competent military authority.”

It also became evident from one of the additional documents that on September 20, 1973 then GOC of the Central Command, Major General Rehavam Ze’evi submitted to the then Chief of the General Staff a detailed proposal for settlement in the occupied territories. The proposal said, in regard to agricultural settlements in Samaria, that it would be “difficult, because of a shortage of available land.” This teaches us that the prevailing view at the time was still that private property ought not be taken for the purposes of settlements. And indeed, Major General Orly argued in July 1978 in HCJ 321/78 (unpublished) (the Nabi Salah case) as follows:

“7. When identifying the location that would be settled near the village of Nabi Salah, those acting on respondents’ behalf were guided by the principle laid out by government policy not to take possession of private property for the purposes of settlement.”

In the petition before us we find something of a change in this position, as the first affidavit by the Government Secretary, in paragraph 5, addresses this matter as follows:

“In response to the petitioners’ claims… as to the Government policy in regard to taking possession of the lands:

  1. I hereby clarify that the policy of the Government of Israel not to seize private lands, to the extent possible and consistent with security needs, still stands.
  2. When the government believes that the security needs requires as such, it approves requisition of private land but instructs the military to exclude from the taken property, to the extent possible, cultivated land.”

As for Major Commander Ze’evi’s plan, it should be noted that his proposals did not gain the approval of any authorized military or civilian body. The plan did include a suggestion to establish a Jewish town in the Nablus area, but not on the site now chosen for the Elon Moreh settlement, though not far from it.

In paragraph 4 of his questionnaire answers, the Chief of the General Staff replies to the question:

“Did you approve a civilian settlement on the relevant site because you believed to begin with that it was necessary there for the purposes of regional defense or because you post facto found that, were a civilian settlement to be established on this site, it would integrate into the system of regional defense?”

With:

“I approved taking possession of the land in question in this petition for purposes of the settlement because this fit the military needs in this area, as I saw them to begin with, and it is consistent with my security approach as to the needs of security and protection of the State of Israel as explained in sections 9-20 of the main affidavit.”

But when the perception of the security needs did not initially bring upon the initiative to settle that same site, but, rather, approval only came retroactively, in response to the initiative of the political echelon – I do not believe that this passive approach indicates that from the beginning there was a military necessity to take private property in order to build a civilian settlement, under the terms of Article 52 of the Hague Regulations. This time, therefore, it was not proven that in building the civilian settlement the military preceded the act of settlement with thought and military planning, as we have said in the Beit El case (on page 126.)

II.              And more on the question of the military necessity: I cited above the language of the decision by the Ministerial Committee for National Security Affairs from its meeting on January 7, 1979, as it was quoted in the Government Secretary’s second affidavit. Recall that those deliberations followed a protest by Gush Emunim on a road in the Nablus area. The resolution stated that “when determining a site for the Elon Moreh settlement, the Government will consider, as much as possible, the wishes of the group,” and, as if as in exchange for this promise, the people of Elon More were required to return to the camp from which they came, that is to end their unlawful demonstration. I see this as clear proof that the pressure by Gush Emunim was what motivated the Ministerial  Committee to address the matter of a civilian settlement in the Nablus area in that meeting. Afterwards, the matter was passed to the Ministerial Committee for Settlement Affairs, in order that it send its representatives on a preliminary tour for the purposes of selecting potential locations for settlement by the “Elon Moreh” group in the Nablus area. These representatives selected five locations and, from among the five, the IDF approved the relevant site. It follows, that the IDF did not take part in selecting those five sites, but was given the opportunity to choose among five sites selected by the political level. This process does not comply with the language of Article 52, which in my opinion requires the advance identification of a particular tract of land, because that specific location is necessary for military needs. And as said, it is natural that the initiative for this would come from the military level that is familiar with military needs and plans them in advance with military forethought.

In this regard, Mr. Bach argued that the military must first consider whether there are candidates for a possible civilian settlement willing to go to the location where their settlement is required for military needs. I agree, but again, this is contingent upon military planning that was approved by a competent military authority that would first search for candidates to settle a particular site. Here the opposite occurred: first came the desire of the Elon Moreh people to settle as closely as possible to the city of Nablus, and only then, due to the pressure they exerted, came the approval by the political level to build the settlement on that site. The political consideration was, therefore, the dominant factor in the Ministerial Committee’s decision to establish a settlement on that location, though I believe that the Committee and the Government majority were persuaded that the settlement fulfills military needs as well, and I therefore accept the Chief of the General Staff’s statement that for his part he did not consider governmental or political factors, including the pressure by the people of Gush Emunim, when he prepared to submit his professional opinion to the political level. But the military consideration was subordinate to the primary, political decision to build the settlement. As such, it does not meet the strict demands of the Hague Regulations for preferring military needs over individual property rights. In other words, would the Government’s decision to build the settlement on that site have been made in the absence of pressure from the Gush Emunim people and ideological and political considerations? I have been persuaded that but for these, the decision would not have been made in the circumstances that existed when it was made.

I wish to add several words regarding dominant and subordinate reasons in state authority decision making. In HCJ 392/72, Emma Berger v. Haifa District Planning and Building Committee, IsrSC 29(2) 764, Justice I. Cohen mentioned the debate around the matter of plurality of purposes as it appears in the third edition of De Smith’s book, Judicial Review of Administrative Action, on page 287 onward. Of the five tests proposed there, Justice Cohen opted for the test of whether the wrongful consideration or purpose had a real impact on the authority’s decision. For my part, I am willing to adopt a test more lenient with the authority, as proposed there by De Smith (top of page 289), which is:

“What was the dominant purpose for which the power was exercised? If the actor pursues two or more purposes where only one is expressly or impliedly permitted, the legality of the act is determined by reference to the dominant purpose.”

(In footnote 74, below the line, the author presents examples from English case law where this principle has been applied).

What I explained at length above reveals which outcome this test’s application must bring in the circumstances of the case before us, when the initiative for the settlement did not come from the military level. Thus. I will quote the words of the author there, on page 291, which seem apt to our matter as well:

“… it is sometimes said that the law is concerned with purposes, but not with motives, this view is untenable in so far as motive and purpose share a common area of meaning. Both are capable of meaning a conscious desire to attain a specific end, or the end that is desired. In these senses an improper motive or purpose may, if it affects the quality of the act, have the effect of rendering invalid what is done.”

III.             And I have yet to address and additional reason that must bring the reversal of the decision to take possession of the petitioners’ land – a reason that stands independently, even without regard to the other reasons I have so far detailed. In the Beit El case a serious question was raised: how could a permanent settlement be founded on land that was possessed only for temporary use? There we accepted Mr. Bach’s reply:

“The civilian settlement may exist in that same location only so long as the IDF still holds the territory under the Order of Possession. This possession itself may end someday as a result of international negotiations that may be culminate in a new agreement that would be valid according to international law which will determine the fate of this settlement, as it would the fate of other settlements located in the occupied territories” (Id, p. 131.)

The settlers themselves did not express their own position in that case, as they were not joined as parties. This time we cannot accept this excuse. Here, the submitter of the affidavit on behalf of the settlers explicitly says in paragraph 6 of this affidavit:

“Supporting an Order for Possession with security considerations in their narrow technical sense, rather than their basic and comprehensive sense, as explained above, has but one meaning: the temporary nature of the settlement and the possibility of its being replaceable. We absolutely reject this terrifying conclusion. It also is inconsistent with the Government’s decision in regard to our settlement in this location. In all the discussions, and many assurances we have received from the ministers of the Government, and above all the Prime Minister himself – and the Order of Possession at hand was issued as a result of the Prime Minister’s personal intervention – they all see the settlement of Elon Moreh a Jewish settlement as permanent as Degania or Netanya.”

It should be noted that this paragraph includes two parts. Its first part considers the position of the settlers; the other part what they have heard from ministers. We were not asked to permit the submission of a countering affidavit by the Government or by any minister to rebut the words attributed to them in the second part of this paragraph and thus we must accept them as truthful. This indeed being the case, the decision to establish a permanent settlement that is intentionally designed to stand in its location for all time – and even beyond the duration of the military rule in Judea and Samaria – meets an insurmountable legal obstacle, because a military administration cannot create within its territory “facts on the ground” for the purposes of its military needs that were in advance intended to exist past the end of the military rule in that area, when the fate of the territory after the end of the military rule is yet unknown. This is seemingly a contradiction that joins the other evidence before us in this petition to reveal that the decisive consideration that motivated the government to decide upon the relevant settlement was not the military consideration. In these circumstances, even a legal declaration as to the taking of possession alone, rather than expropriation of the property, cannot change the face of things – that is taking possession that is the core content of property, in perpetuity.

On the basis of all this, I believe the order nisi must be made absolute, in regard to the petitioners’ lands that were taken under Order n. 16/79.

Justice Asher

I agree.                       

Justice Ben Porat:

I agree.

Justice Witkon:

I too believe that the law is with the petitioners.

Like in the Beit El case (HCJ 606, 610/78,) here, too, we must examine the state authorities’ actions both in light of the “domestic” (or “municipal” as it is commonly termed in this context) law and in light of international law. These are two different issues, and as said in the Beit El case (id, p. 116): “The activity of a military rule in an occupied territory may be justified for military, security purposes and yet it is not out of the question that it is flawed under international law.” The domestic law which is subject to discussion here is the law that is relevant to two orders issued by the commander of the Judea and Samaria area under his powers as a commander in an occupied territory (Order n. 16/79 and Order n. 17/79.) In these Orders the commander stated that he “believes it necessary for military needs…” and he declared that taking possession of the lands is “for military needs.” And indeed, there is no dispute that the force of the orders, in terms of domestic law and really also in terms of customary international law (Hague Convention), is contingent upon their being “for military needs.” We elaborated on the content of “the military need” and the extent of our intervention in the discretion of military authorities in Rafah Approach (HCJ 302/72, Abu Hilo v. The Government of Israel) and in the Beit El case. We emphasized and reiterated that the scope of our intervention is limited. In the Beit El case I said (ibid., page 118) that the authority “is vested in the hands of the military officials, and for the Court to intervene in the exercise of their authority, it must be satisfied that this exercise was an abuse of power and a pretext for other purposes.” Similarly, my honorable colleague the Deputy President wrote as follows, ibid., (p. 126):

“We have repeatedly emphasized before, including in HCJ 302/72 (pp. 177, 179, 184) that the scope of this Court’s intervention in the military considerations of the military administration are very narrow, and a Justice would certainly refrain from substituting his personal beliefs in terms of political and security matters for the military considerations of those charged with securing the State and public order in the occupied territory.”

We additionally clarified in the Beit El case that a military, security need and the establishment of a civilian settlement do not necessarily contradict one another. As we said there (p. 119):

“The main point is that in terms of the pure security consideration it is undisputed that the presence of settlements – even ‘civilian’ settlements – of citizens of the occupying power in the occupied territory significantly contributes to the security in that area and facilitates the military’s ability to perform its duty. One need not be an expert in military and security affairs to understand that hostile elements operate more easily in an area that is only populated by a population that is indifferent or sympathetic to the enemy rather than an area where there are also people who may monitor them and notify the authorities of any suspect activity. Terrorists may not find refuge, assistance or supplies with them. This is simple and needs no elaboration. We will only mention that according to the respondents’ affidavits, the settlers are subject to the military authority, whether officially or due to the circumstances. They are there thanks to the military and its permission. Therefore, I still hold the opinion, that seemed to me correct in the Rafah Approach, case that Jewish settlement in an occupied territory – and as long as a state of belligerency continues to exist – fulfills real security needs.”

It need not be emphasized that with everything we said in these two decisions (and in others like them) we did rule that from that point onwards, any civilian settlement in an occupied territory serves a military purpose. We held that each case must be examined according to its particular circumstances. There, we were persuaded that indeed the taking of possession in order to build a civilian settlement served a security purpose. Here I am not persuaded that such was the purpose.

How is this case different from those that came before? The most important difference, is that here, even the experts charged with state security are divided as to the need for settlement in the relevant location. As they did there, here too security authorities presented us with affidavits meant to persuade us as to the security and military needs for taking possession of the land and building a civilian settlement on it. But whereas there the evidence was consistent and unequivocal, here, in terms of Elon Moreh, the evidence reveals that the experts disagree amongst themselves on the military need. On behalf of the Petitioners, we received the affidavit by Major General (Res.) Mattityahu Peled, as well as the letter by Lieutenant General (Res.) Haim Bar Lev, which ought to be quoted in full:

“To the best of my professional estimation, Elon Moreh does not contribute to the security of the State of Israel, and this for the following reasons:

  1. A civilian settlement located on a hill far removed from main traffic arteries has no significance in combating hostile terrorist activity. The mere location as an isolated island in the heart of an area densely populated by Arab residents may facilitate attempts to attack. Securing travel to and from Elon Moreh and securing the settlement itself would divert security forces from essential missions.
  2. In a case of war on the eastern front, a civilian settlement located on a hill about two kilometers east of the Nablus--Jerusalem road would be unable to ease safeguarding this traffic artery. Moreover, there is a large military base located near the road itself, and it controls the traffic arteries to the south and to the east. Indeed, should there be terrorist activity at time of war, the IDF forces would need to stay in place in order to protect the civilian settlement, rather than focus on combating enemy armies.”

More than this, the petitioners stated in their petition that “according to what they learned from the media, respondent 2 (the Minister of Defense) stated there was no security or military need for the land.” Generally, we do not consider information given to us by rumor, but here is confirmation for the disputing position of the Minister of Defense from the giver of the affidavit himself – the Chief of the General Staff, Mr. Raphael Eitan – who said in section 23(d) of this affidavit:

“I am aware of the opinion of the respondent 2, who does not dispute the strategic importance of the relevant area, but believes that it is possible to realize these security needs by means other than building a settlement on the relevant site.”

This situation, of a dispute between the Minister of Defense and the Chief of the General Staff on the mere need of taking possession, is unprecedented in Israeli jurisprudence, and it is also difficult to find examples in foreign countries for where a judge was required to choose between the opinions of two experts – one being the minister charged with the relevant matter and the other being the person heading the executive mechanism. The State Attorney attempted to overcome this difficulty by relying on section 3(b) of Basic Law: The Military, which reads: “The Chief of the General Staff is subject to the authority of the Government and subordinate to the Minister of Defense.” It is true, argued the State Attorney, that the Chief of the General Staff answers to the Minister, but here the matter was subject to the Government’s decision, where the Minister of Defense was among the minority, and thus his disputing position is overruled by the majority, which accepted the opinion of the Chief of the General Staff. I fear this response by the State Attorney is beside the point. Basic Law: The Military addresses the order of the chain of command between three bodies – the Government, the Minister of Defense, and the Chief of the General Staff. In terms of the hierarchy between them, there is indeed no doubt that the Chief of the General Staff is below the Minister and they are both below the Government. When the Chief of the General Staff receives an order from the Minister that conflicts with other orders he receives from the Government, it is possible – and I do not wish to express my opinion in this regard – that he would be obligated to follow the order of the Government over the orders of the Minister. But here the question is not whose order trumps, but rather whose opinion is more acceptable to the Court. It is possible one (for instance, a judge) may withdraw his opinion in light of that of his peers, but the fact that the Minister accepted the decision of the majority does not lead to a conclusion that he withdrew his opinion. On the contrary, we must assume that he stands by his opinion and has left to us the duty to say which of the opinions – his or that of the Chief of the General Staff – should be accepted.

It is well known that courts are asked to determine matters that require special expertise – expertise that is generally beyond the judges’ grasp. We are presented with opinions by respected experts and these completely contradict one another. This happens frequently in trials concerning medical issues, as well as, for example, in cases involving patent infringements, which raise problems in chemistry, physics or other natural sciences. In security affairs, when the petitioner relies on the opinion of a security expert, while the respondent relies on the opinion of someone who is both an expert and responsible for the state of security in the country, it is only natural that we attribute special weight to the opinion of the latter. As the Deputy President Landau said in the Naalin case, HCJ 258/79 (unpublished): “In such a dispute regarding military-professional questions, in which the Court has no well founded knowledge of its own, the witness of respondents, who speaks for those actually responsible for the preservation of security in the administered territories and within the Green Line, shall benefit from the assumption that his professional reasons are sincere reasons.” According to this rule, I could possibly have seen myself obligated to prefer the opinion of Lieutenant General Eitan over the opinion of Lieutenant General (Ret.) Bar-Lev, though in terms of their expertise, I do not know who is preferable. But when the choice is between the Chief of the General Staff and the Minister of Defense, I believe this rule should not be applied. There is no way to say that one is charged with ensuring safety whereas the other is not. They are both responsible.

In such a situation of a draw, when the opinion of the giver of the respondents’ affidavit should not be presumed to be superior to the opinions of other experts, we must ask ourselves: who bears the burden of proof? Must the petitioners satisfy us that the land was taken for non-military or security purposes, or shall we demand that the respondents – the military authorities – persuade us that this taking of possession was necessary for this purpose? I believe that the burden is upon the respondents. The law does not give the commander’s assertion that the taking of possession is required for military needs the force of a presumption – let alone that of conclusive evidence – that indeed it is so. Moreover, it is not sufficient that the commander sincerely and subjectively believes that the taking of possession was essential, in order to place the question beyond judicial review. We need not be convinced of the sincerity of the consideration, but rather of its correctness (see the well-known dispute Liversidge v. Anderson (1942) A.C. 206; (1941) 3 All E.R. 338; (1942) 110 L.J.K.B. 724; 116 L.T. 1; 58 T.L.R. 35; 85 S.J. 439 (H.L.), and the article by R.F.V. Heuston, L.Q.R. 86, p. 22. And see also: Ridge v. Baldwin (1964) A.C. 40; (1963) 2 W.L.R. 935; 127 J.D. 295; 107 S.J. 313; (1963) 2 All E.R. 66; 61 L.G.R. 396; 79 L.Q.R.  487; 80 L.Q.R. 105; 127 J.P.J. 251; 234 L.T. 423; 37 A.L.J. 140; 113 L.J. 716; (1964) C.L.J. 83 (H.L.)). And in our law, the Kardush case, HCJ 241/60, Mansur Taufik Kardush v. The Registrar of Companies, IsrSC 15, 1151; and FH 16/61, Registrar of Companies v. Mansur Taufik Kardush, IsrSC 16, 1209. The law I presented at the outset conditions the legality of the possession on the existence of a military need. Obviously,  the Court must not allow a serious infringement of property rights unless it is satisfied that this is necessary for security purposes. The State Attorney himself did not claim he is exempt from the burden of persuasion and labored to present us with all of the materials. As said, had we only had before us the evidence on behalf of the respondents, or had the respondents’ experts disputed the petitioners’ experts, I may very well have given the respondents the benefit of the doubt. But here, as noted, we were told that the Minster of Defense, himself, is not persuaded that this possession was necessary. It is true that the office of a minister is a political office and there is no requirement that the minister himself be an expert in military matters. But here we have the dissenting opinion of a Minister of Defense, who, as a former head of the IDF Operations Directorate and former commander of the air force, himself is a prominent security expert. The State Attorney did not dispute this, either. Where such a minister is not persuaded, how can we – the judges – be expected to be persuaded? When he does not see a military need for building a settlement in this particular location, who am I to question him?

This is also the primary reason that brings me to distinguish this case from all the previous cases and to reach a conclusion different from that reached in those cases. This should be coupled with two more things, though of lesser importance. First, in the cases of Rafah Approach and Beit El, my point of departure was that the Israeli settlements, located on lands taken from their Arab owners, were necessary for the security forces in their daily combat against terrorists. “One need not be an expert in military and security matters,” I said in the Beit El case at 119, “in order to understand that terrorist elements operate more easily in a territory populated only by a population that is indifferent or sympathetic to the enemy, than in a territory where there are also people who may monitor them and notify the authorities of any suspect activity. There, terrorists shall not find refuge, assistance and supplies.” This time the Chief of the General Staff, Lieutenant General Eitan, explained to us that the main security benefit in building the settlement on this site is its integration into the system of regional defense in case of a “total” war. I went back to review the affidavit that Major General Tal submitted to us at the time for the Rafah Approach case, and indeed, there, only prevention of terrorist activity at times of calm was discussed. I similarly reviewed the affidavit of Major General Orly in the Beti El case, although I did find – after additional review of the affidavit – that he also spoke of regional defense needs. These considerations were expressed in the opinion of my colleague Justice Landau (there, p. 124). In any event, in that case, two possessed territories were discussed: one actually on potential terrorists’ path, and the other bordering an important military base (Beit El.) There can be no serious doubt that, in terms of their immense strategic value, these sites – and only they – could have fulfilled the designated security role and that they were irreplaceable. Here, on the other hand, I cannot say the matter is free of any doubt.

The third aspect in which the case before us is different than the previous cases is a result of the settlers’ affidavit. Recall that in the Beit El case the settlers were not joined as petitioners and that they were not given the opportunity to voice their arguments. We presumed that their presence in the area was wholly for the purposes of security and defending the homeland. In the words of my honorable colleague the Deputy President (id., p. 127): “… given that the majority of the military is reserves forces, it is well known that at the time of need the residents of peripheral civilian residential areas become, even in personal matters, subject to military command.” And I said (id., at 119): “… the settlers are subject to the military’s authority, whether officially or by virtue of the circumstances. They are there thanks to the military and by its permission. Therefore, I still hold the opinion, that seemed to me correct in the Rafah Approach, case that Jewish settlement in an occupied territory – and as long as a state of belligerency continues to exist – fulfills real security needs.”

This time we heard from the representatives of the settlers themselves, and it seems we must not ignore the heart of their argument. Let me emphasize: I do not wish to address recent events, which revealed the people of “Gush Emunim” (among which the settlers before us are counted) as people who do not accept the authority of the military and do not hesitate to express their resistance through violence. I do not wish to address these events because we do not have certified knowledge as to the level of the support for the actions of others in other locations by the settlers before us. Therefore, I did not come to question that were the settlers to be called upon for reserve duty, they would be subjected to the military’s authority, as would any soldier. Indeed, the words of the giver of the settlers’ affidavit raise a different question. He says, explicitly, that:

“Members of the Elon Moreh group and myself settled in Elon Moreh because we were ‘commanded to inherit the land given by God to our forefathers, Abraham, Isaac and Jacob and we shall not leave it to other nations or in desolation’ (the Rambam, Book of Commandments.) The two elements, therefore, of our forefathers and our settlement are interwoven with each other.”

He adds and says in that same affidavit:

“Though superficially it seems that there is no link between the motivations of the settlers and the Order of Possession, the truth is that the act of settling the Land of Israel by the People of Israel is actually the real and most efficient security activity. But settlement itself, as inferred from the previous section, is not the product of security reasons and physical needs, but of destiny and of the return of Israel to its homeland.”

It is true that the settlers do not rule out the security considerations but that these are, as they maintain, secondary and completely insignificant. They state in their affidavit:

“Therefore, with all due respect to security considerations, and though its sincerity is not doubted, in our view it neither adds nor detracts.”

Very strong words indeed. Needless to say, the settlers deserve praise for their candor that did not allow them to pretend or to conceal their true motives. But the question plagues me: these settlers, who openly declare that they came to settle Elon Moreh not out of security considerations, and whose contribution to security – to the extent it is positive – is but a byproduct, could it still be said of them, as I said in the Beit El case, that they are there thanks to the military and by its permission? Of course, one can act to benefit another without the latter’s knowledge or involvement, but a privilege or benefit that the beneficiary rejects wholeheartedly, can we enforce it upon him? And let it be clear: without any dispute over the words of my honorable colleague Justice Landau, for my part, I need not argue with the settlers over their religious or nationalist ideology. It is not our business to engage in political or ideological debates. But it is our duty to examine whether pure security considerations justify taking possession of land for the purposes of settling these settlers at that location, and it seems to me that in this context, it is important to know what the settlers’ position is. If they did not come, primarily, for security purposes, I am hard pressed to accept that this indeed is the purpose of their settlement.

It remains for me to briefly address another argument by the settlers. In their view, Judea and Samaria should not be considered to be an “occupied territory” subject to IDF rule, but as part of the State of Israel. They rely, first and foremost, on the historical destiny of the Land of Israel, and in addition, in terms of the law, they claim that when the land was conquered during the Six Day War there was no other sovereign that lawfully held this area. The claim is familiar from the writings of Professor Blum (3 Isr. L. Rev. 279, 293) and was also positively considered by Professor J. Stone (see No Peace No War in the Middle East, published in Australia in 1969). The settlers’ attorney also mentioned the fact that the Israeli legislature never defined the state’s borders and only stipulated in section 1 of the Jurisdiction and Powers Ordinance, 1948, that “any law that applies to the State of Israel in its entirety will be considered to apply to the entire territory which includes the territory of the State of Israel and over the Land of Israel which the Minister of Defense defined by proclamation as being held by the IDF.” He also referenced the amendment to the Law and Administration Ordinance, 1967 (and see in this regard Professor A. Rubinstein, The Constitutional Law of the State of Israel, 1969, p. 46). The implication of this claim is twofold. If it concerns an act that occurs within the territories of the state, surely international law does not apply to it, but then military regulations and orders issued under such regulations are invalid in the area that is part of the state. The State Attorney replied correctly that if the settlers arrived at the site other than by force of the Order of Possession issued by the area commander, their entire presence there is without basis. After all, there was no dispossession under Israeli law here. This response is rooted in good law. Additionally, were there serious doubt as to the status of the relevant area, we would have been compelled to approach the Minister of Foreign Affairs and request an official document that defines the area’s status. This question is not “justiciable” and in such matters the Court must follow Government decisions.

This settles the issues of domestic, municipal law. Because in light of the material before us I am not persuaded that the taking of possession was justified under municipal law, I need not actually examine the legality of the taking of possession under international law as well. But lest my refraining from discussing this aspect be misunderstood, I shall add several comments. The issue is legally complex and warrants clarification. As said in the Beit El case, there is a distinction between customary international law and treaty-based international law. The former is part of the municipal law, whereas the latter is not, unless it has been ratified through national legislation. Included within customary international law are the rules of the Hague Convention, so this Court should examine the lawfulness of the taking of possession in light of Article 52 of the Hague Regulations, as did my honorable colleague, the Deputy President. Here, too, the test is the military need. If one is not persuaded such need exists under the criteria of municipal law, one would not be persuaded, in any event, that it exists under the criteria of the Hague Convention either. On the other hand, the Geneva Convention must be seen as part of treaty-based international law and therefore – under the approach common in common law countries as well as in our system – the injured party has no standing to approach the court of the country against whose government he wishes to raise claims and assert his rights. Such standing is given only to states that are parties to the Convention. Such litigation cannot be conducted in a state court but only in an international forum. Therefore, I said in the Rafah Approach case and reiterated in the Beit El case, any expression of opinion on our part as to the lawfulness of the civilian settlement under the Geneva Convention is merely a non-binding opinion, from which a judge would do well to refrain.

Any yet, here too, the State Attorney invites us to affirm to the authorities that under the Geneva Convention, as well, there is nothing wrong in granting the settlers possession of the land for the purposes of their settlement. As his argument goes, this is not inconsistent with the humanitarian provisions of this Convention that are acceptable to the State of Israel. Recall, we are concerned with Article 49(6) of the Geneva Convention, which prohibits the occupying nation from deporting or transferring parts of its civilian population into the occupied territory. It is a mistake to think (as I have recently read in one of the newspapers) that the Geneva Convention does not apply to Judea and Samaria. It does apply, though, as noted above, it is not “justiciable” in this Court. Nor would I say that the “humanitarian” provisions of the Convention address only protecting human life, health, liberty, or dignity, and not property. No one knows the value of land as we do. But the question whether voluntary settlement falls within the prohibition over “transfer[ring] parts” of a “population” for the purposes of section 49(6) of the Geneva Convention is not easy, and as far as we know, it has yet to be resolved in international case law. Therefore, I prefer, here too, not to settle this matter; moreover, in light of the conclusion I reached on the matter, both under domestic law and under customary international law (Article 52 of the Hague Convention), it requires no determination. But my refraining from determination must not be interpreted as support for either of the parties.

For these reasons – in addition to those detailed by my honorable colleague the Deputy President – I believe the order must be made absolute.

 

Justice Bechor:

I concur with the comprehensive opinion of my honorable colleague the Deputy President (Landau), which contains a thoughtful and persuasive response to some hesitations I had in the matter.

Both the military commander and the Government acted in this case by virtue of the powers international law grants to a military which, as a result of hostilities, occupies a territory that is not part of the state to which the law of the land applies (the municipal law). As my honorable colleague demonstrated, we must adjudicate this case according to the law that applies to the issue and that governed the actions of both the government and the military commander. It is not within our authority to consider policy questions or questions rooted in religious belief or a national and historical worldview. And this is a limit that we must not, and may not, exceed, whatever our personal beliefs and worldviews. The actual language of the Order issued by the military commander is rooted in the powers that international law grants a military that occupies a territory that is not – legally – part of the state’s territory. On this basis then the decision must be made.

My honorable colleague, Justice Witkon, in his opinion, extensively discussed the matter of the disagreement between the Chief of the General Staff and the Minister of Defense. In my opinion, this question, too, has been answered in the opinion of the Deputy President (Landau). In this matter, we must distinguish between the military commander’s decision, within his power under international law, and the power of the Minister of Defense and of the Government, under municipal law. When the discussion revolves around international law, the test is whether the military commander operated out of military reasons in order to ensure the military goal. This is a matter for the military commander, and, in this regard, the opinion of the ministerial level is insignificant, as the power under international law is granted to the military commander alone and not to the minister of defense or to the government. Where the military commander acted within his power, there is no flaw in the exercise of this power, even if the ministerial level, in this case the Minister of Defense, is of a different opinion. It is another situation entirely, when the broader question of the municipal law level arises. On this level, the opinion of the military command is the first port of call but is not the end all be all. On this level, as my colleagues said, the Chief of the General Staff is “subject to the authority of the Government and subordinate to the Minister of Defense”. It is true that the Minister of Defense holds a different opinion than the Chief of the General Staff in this matter, but on the policy level, even the opinion of the Minister of Defense is not the end all be all either, and – as reflected by the words of the Deputy President – the final word is that of the Government.

Had we reached the conclusion that the military commander operated in this case in order to ensure military needs, and that he initiated that action for the purposes of ensuring such needs which were the dominant factor in his decision, in light of all the circumstances and the timing as described in detail in the Deputy President’s opinion, I would not be hard pressed to approve his action, though other opinions – even contradictory ones – exist and though even the opinion of the Minister of Defense differs. But, as the Deputy President demonstrated in his opinion, the action of the military commander in this case exceeded the limits of his powers under international law.

The Deputy President also addressed the question arising from the contradiction between taking possession of the land for military needs, which is temporary, and building a civilian settlement as a permanent settlement. It is well known that civilian settlement has always constituted an integral part of the system of regional defense, within a broader system of regional civil defense, and things to this effect were said also in HCJ 606+610/78, Beit El, and HCJ 258/79, Matityahu. We must distinguish here between two things. Integrating the civilian settlements in the system of regional defense began many years ago, even before the founding of the state, and continued after the state was founded within the state’s territory. In all this time, there has always been the premise that the civilian settlements were permanent settlements and this was of no legal flaw because the settlement followed the founding of the state in territory that was within the territory to which state law applied. Even in the time before the founding of the state the intention was always that such settlement would be permanent settlement on land owned by the settling institutions. Here, we are concerned with temporary possession, and thus the contradiction between it and creating permanent settlements. This question was made more poignant in this petition for the first time, perhaps primarily because respondents 5 and 6 were joined, and because of their clear position.

As noted, I join the opinion of the Deputy President (Landau).

 

It was decided to render the order nisi absolute and declare the Order of Possession n. 16/79 invalid in terms of the lands owned by the petitioners, whose registration details were brought in paragraph 2 of the petition, and to order the respondents 1-4 to vacate from the petitioners’ lands the civilian settlers who settled on them as well as any structure built upon them and any object brought to them. There is no place to issue any order in terms of the road lands taken under Order n. 17/79, as none of the petitioners hold any ownership rights for the road lands.

We grant respondents 1-4 30 days from today in order to comply with the permanent order.

Respondents 1-4 will pay petitioners 1-16 their expenses in this petition, at a total sum of 5,000 Israeli Pounds, and that same amount to petitioner 17. There is no order as to costs for respondents 5 and 6.

Given today, 1 Cheshvan 5740 (October 10, 1979).

                 

 

 

Manufacturers Association of Israel v. Merck Sharp & Dohme

Case/docket number: 
LCA 8127/15
Date Decided: 
Wednesday, June 15, 2016
Decision Type: 
Appellate
Abstract: 

[This abstract is not part of the Court's opinion and is provided for the reader's convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.]

 

The rights in an Israeli patent, upon which the Ezetrol medical preparation is based, belong to the Respondents in LCA 8127/15, who are the Applicants in LCA 8263/15 (hereinafter: Merck). According to sec. 52 of the Patent Law (hereinafter: the Law), the period of the patent is 20 years from the date of the application, which was filed in 1994. In 1998, the Law was amended (hereinafter: Amendment 3) and the option of granting an extension order was added. Merck was granted an extension order until 2017. After this order was granted, the Law was amended again (hereinafter: Amendment 7). Inter alia,  Amendment 7 provided that the extension period granted in an extension order shall be equal to the shortest extension period granted to the patent in certain countries designated in the Law (hereinafter: the Recognized States).

 

The Applicant in LCA 8127/15 and the Respondent in LCA 8263/15 (hereinafter: The Manufacturers Association) filed an application to shorten the extension order that had been granted to Merck, in light of the calculation method under Amendment 7. The Registrar of Patents, Designs and Trademarks (hereinafter: the Registrar) accepted the application and instructed that the period of the order be shortened, such that it would expire in accordance with the period of the extension order that had been granted to the patent in the United States. The District Court denied Merck's appeal on the very shortening of the order, but held that the period of the American extension could not be relied upon, since it was granted after the extension order had been granted in Israel. The court held that the extension order would remain in effect in accordance with the period of the extension order that had been granted to the patent in Germany. This led to the applications for leave to appeal. The discussion addressed the method of calculating the expiration date of the order and the constitutionality of shortening an extension order after it was granted.

 

The Supreme Court (per Justice N. Hendel, Justices Danziger and Shoham concurring) granted leave to appeal, granted the appeal in LCA 8127/15 and denied the appeal in LCA 8263/15, ruling as follows:

 

The principle rule for calculating the period of the extension order is that the period of the extension order shall be equal to the period of the extension that was granted to the similar patent in the Recognized States. The Law further provides that when an extension order is granted in a number of Recognized States, the period of the order shall be that of the shortest extension period granted in any of the countries. This last rule changed the legal situation that existed prior to Amendment 7.

 

The question before the Court was how to act when an extension order is granted in a Recognized State after an extension order was granted in Israel, when the period of the extension in the Recognized State is shorter than the period of the Israeli order. The language of the Law does not explicitly state that the period of an extension order granted in a Recognized State after the Israeli order was granted is not to be taken into consideration. The opposite is also not explicitly stated. Both options coincide with the language of the Law.

 

In terms of purposive interpretation, the purpose of the extension order is to compensate the pharmaceutical developers – the patent owners – in the form of a certain period of time, but not to over-compensate them. There is a consideration of uniformity among countries, which prevails over stability and determining a period that is known in advance, although these also play an important role in the entire picture. The legislature decided that the period between the application to register the patent and the approval to market it, or the extension period that was granted in a Recognized State based on that period, properly compensates the patent owner. Amendment 7 of the Law provided that the Registrar must seek the state in which the extension period that was granted was the shortest. The legislature provided that compensation that is calculated in accordance with the order of the state in which the extension is the shortest is appropriate and realizes the purpose of the Law. The public interest also supports this.

 

The above purposes better coincide with the interpretation that the periods of extension orders granted after the Israeli order should be considered. The legislature was of the view that the periods of the extension orders granted in the Recognized States all meet the criterion of compensating the patent owners for the time that they lost. The most appropriate compensation, in terms of striking a balance among all of the conflicting values and interests, is the shortest period of time that was granted in one of the Recognized States. It does not matter, in this respect, if the order in the Recognized State was granted before or after the order in Israel. In light of the above, when determining the period of the extension order, one must also consider orders granted in Recognized States after the order was granted in Israel.

 

As for the constitutionality of shortening the extension order, the transitional provisions of Amendment 7 provide that the calculation mechanism under the amendment will also apply to extension orders already granted. The transitional provisions do not amount to retroactive infringement. Even if the shortening of the period of the extension infringes a constitutional right, it passes the criterion of constitutional review under sec. 8 of Basic Law: Human Dignity and Liberty. This is a case of primary legislation for a worthy purpose – encouraging one of the fields of industry and reducing the price of pharmaceuticals for the entire public. The proportionality condition is also met. The compensation that Merck was awarded, in the form of the new extension period that was determined in the order is appropriate and realizes the purpose for which the arrangement was enacted. In a broad examination, Merck's economic situation was not harmed. What was harmed was the possibility that it may be improved. It was the legislature that granted it that possibility, and it was the legislature that subsequently took it away, without worsening Merck's overall situation. At the time when Merck registered its patent the arrangement of extension orders had not yet been enacted.

 

The infringement also does not reach the constitutional threshold. The calculation mechanism under Amendment 7, in and of itself, leads to an appropriate result. The situation that preceded Amendment 7 was one that benefited Merck in a manner that exceeded what was necessary. In other words, if the substantive provisions of Amendment 7 are above the constitutional threshold, then the legal situation that existed before them was certainly above that threshold. In the circumstances of the specific statutory development of this case, the constitutional threshold was not crossed. Reliance on a legal situation that was changed was neither argued nor proved.

 

The purpose is to grant appropriate compensation to the patent owner in the form of a period of protection that exceeds twenty years, but in a manner that does not excessively prejudice other important interests and values, such as opening the market for competition. Viewed in its entirety, the actual period of protection that Merck was awarded is longer than that to which it was entitled when the patent was registered. The shortening of the extension order was based upon a calculated and considerate policy of the legislature. The extension order granted in the United States is the relevant reference patent extension order in the circumstances of the matter. Therefore, the Israeli extension order that was granted to Merck has expired.

Voting Justices: 
Primary Author
majority opinion
majority opinion
majority opinion
Full text of the opinion: 

In the Supreme Court

LCA 8127/15

LCA 8263/15

 

 

Before:                                                Justice Y. Danziger

                                                            Justice N. Hendel

                                                            Justice U. Shoham

 

Applicant in LCA 8127/15

and Respondent in LCA 8263/15:                              Manufacturers Association of Israel

 

                                   v.

 

Respondents in LCA 8127/15

and Applicants in LCA 8263/15         1.         Merck Sharp & Dohme Corp. f/k/a

                                                            2.         Merck & Co, Inc.

 

Applications for Leave to Appeal the Jerusalem District Court's decision dated November 10, 2015 in MApp 5707-11-14

 

Date of Session:                            3 Nissan, 5776 (April 11, 2016)

 

On behalf of the Applicant

in LCA 8127/15 and the

Respondent in LCA 8263/15:             Adv. Tal Band; Adv. Yair Ziv

 

On behalf of the Respondents

in LCA 8127/15 and the

Applicants in LCA 8263/15:               Adv. Liad Whatstein; Adv. Uri Fruchtman

 

On behalf of the Attorney General:    Adv. Shimrit Golan

 

 

J U D G M E N T

 

Justice N. Hendel:

 

1.         Israeli law, like the law in other countries, recognizes the protection of patents. Simply put, and perhaps over simplistically, the registration of a patent grants an individual entity ownership, quasi-ownership or at least a bundle of rights with respect to an invention. This law is not new. Patent laws were legislated centuries ago. The innovation of our times is that in this respect, as well, the world has become a global village, meaning that granting a patent in one country may affect the granting of a patent in another country, and vice-versa, its revocation in one country may lead to its revocation in another country. This is not merely an economic insight but rather part of substantive patent law.

 

An additional characteristic of patent law is that it grants legal protection for a limited period of time. Whatever the rights may be, they are not eternal. The customary patent protection period in Israel and around the world is twenty years (sec. 52 of the Patent Law, 5727-1967 (hereinafter: the Law)). This period is as the period of one generation. However, that is not the final word with respect to all types of inventions. In regard to pharmaceuticals, where registering a patent is not enough, and marketing them requires obtaining a license from the  Ministry of Health, it has been established that the twenty-year period may be extended for a certain period of time that shall not exceed five years. This mechanism is known as an "order of extension".

 

The two points that were mentioned – the patent's international aspect and the possibility of granting an order of extension – meet at the seam between space and time. As we shall see, the extension period that is granted in an order in one country can be dependent upon what occurs in another country. This is a sensitive matter. This meeting-point between time and space is the basis of the ruling in this case. It is for this reason that the Attorney General requested to join the proceeding and express his position.

 

Previous Proceedings and the Parties' Arguments

 

2.         Before us are two applications for leave to appeal that address an order extending the period of patents (hereinafter: "extension order"). One application addresses the constitutionality of shortening an extension order after it has been granted, while the other addresses the method of calculating the period of extension in certain circumstances. The applications were filed on the judgment of the Jerusalem District Court in MApp 5407-11-14 (Judge B. Greenberger), which partially granted an appeal on the decision of the Registrar of Patents, Designs and Trademarks, A. Kling (hereinafter: the "Registrar") (Application to change the period of an order of extension for patent no. 110956 (September 18, 2014)). The latter ruled that it is possible to shorten the extension order in the circumstances of the matter and that its period shall be the shorter of those that were being considered. The District Court upheld the ruling regarding the possibility of shortening the order but prescribed a different method of calculation, such that in the circumstances of the matter at hand, the order was extended beyond the period that had been set by the Registrar.

 

The sequence of events leading up to the Registrar's ruling and the judgment of the court of first instance is as follows: The various rights to Israeli Patent no. 110956, upon which the Ezetrol medical preparation, which reduces high cholesterol levels in the blood, is based, belong to the Respondents in LCA 8127/15, who are the Applicants in LCA 8263/15 (hereinafter, jointly, for the sake of convenience: "Merck"). According to Section 52 of the Law: "The period of a patent shall be twenty years from the application date". Merck's application was filed in 1994 and its patent was due to expire upon the lapse of twenty years, on September 13, 2104 to be precise. In 1998, the Law was amended and the option of granting an extension order was added, subject to the fulfillment of a number of conditions (Patent (Amendment no. 3) Law, 5758-1998) (hereinafter: Amendment 3 of the Law). Merck took advantage of this option and filed an application for an extension order, which was granted in 2005. The extension period was due to expire on June 23, 2017. In 2006, after the order had been granted, the Law was again amended (Patent (Amendment no. 7) Law, 5766-2006) (hereinafter: Amendment 7 of the Law). Inter alia, it was provided that the extension period provided in an extension order shall be equal to the shortest extension period granted to the patent in certain countries designated in the Law – subject to a number of conditions that will be specified below (see secs. 64I and 64J of the Law).

 

At the beginning of 2013, the Applicant in LCA 8127/15 and the Respondent in LCA 8263/15 (hereinafter: "The Manufacturers Association"), filed an application to shorten the extension order that had been granted to Merck, based on the argument that such shortening derives from the calculation method that was provided in Amendment 7 of the Law. The Registrar accepted the application and instructed that the period of the order be shortened such that it would expire on January 22, 2016, based on the period of the extension order that had been granted to the patent in the United States. Merck's appeal to the District Court on the shortening itself was denied, however the court ruled that the period of the extension order that had been granted in the United States should not be relied upon, since it was granted after the extension order had already been granted in Israel. Instead, the court instructed that the order remain in effect until October 17, 2016, based on the period of the extension order that had been granted to the patent in Germany. This led to these two applications for leave, in which each of the parties objects to the ruling against it on one of the issues. Merck claims that it was inappropriate to shorten the extension order that it had been granted. The Manufacturers Association emphasizes that the order should be shortened even more – such that it shall expire on January 22, 2016, and not on October 17, 2016.

 

3.         As noted, Merck's arguments are directed against the very shortening of the extension order that it was granted. According to Merck, this is an unconstitutional infringement of its right to property. It is argued that in light of this infringement, Amendment 7 of the Law should be interpreted in such manner that it shall not apply to orders that were granted prior to the amendment taking effect. According to this line of argument, if the proposed interpretation is rejected then the statutory provisions contradict the provisions of the Basic Law: Human Dignity and Liberty. The Manufacturers Association, on its part, relies in this matter on the judgment of the District Court. However, in another matter – that of the period of the extension order that was granted to Merck – it is of the opinion that the court erred. According to the Manufacturers Association, the judgment did not give sufficient attention to the language of the Law, its purpose and the indications that support that it was the legislative intent to provide that the period of the extension order also be examined on the basis of extension orders that were granted in other countries after the order was granted in Israel. Merck, on the other hand, relies in this matter on the rulings of court of first instance.

 

The Attorney General submitted notice that he would appear in the proceedings by virtue of his authority pursuant to sec. 1 of the Procedure (Appearance of the Attorney General) [New Version] Ordinance. The Attorney General’s position was submitted on the matter of the method of calculating the period of the extension order. According to him, and similar to the Manufacturers Association's position, the Registrar was correct in ruling that the period of the extension order could be shortened pursuant to an order that had been subsequently granted in another country.

 

Discussion and Ruling

 

The path I shall take in examining the applications will begin with examining the method of calculating the date of expiration of the order, since the specific arrangement at hand, including the details thereof, is the framework of the constitutional discussion. The interpretation of the Law will assist in understanding its purpose and implications, while delimiting Merck's arguments to the boundaries of the concrete case. This foundation will lead to the discussion in the second matter – the constitutionality of shortening an extension order after it has been granted. Consequently, one must first discuss LCA 8127/15, which was filed by the Manufacturers Association, and thereafter discuss LCA 8263/15, which was filed by Merck.

 

The Method of Calculating the Period of the Extension Order

 

4.         I have decided to address LCA 8127/15 as though leave were granted and an appeal had been filed pursuant thereto, in light of the general legal nature of the issue of the method of calculating the period of the extension that was determined in an order. The matter is relevant to additional patent cases, inasmuch as the same interpretational dispute could also emerge from the present wording of the Law. Merck's argument that a case such as the one before us is not actually expected to occur in the future in the exact same manner, did not go unnoticed. Merck relies on the European law which allegedly prevents this possibility due to uniformity of periods of extension in various countries. However, as we shall see below, the field of patent extensions is dynamic and is subject to frequent legislative changes. This is the case in Israel and in additional countries. Therefore, the fact that the wording of the Law that is in dispute between the parties is still in effect in Israel leads to granting leave to appeal. I shall further state that a sufficiently broad picture of the current European law was not presented, and it is not clear that there is no possibility that a similar dispute might emerge. In any event, the matter could emerge in one variation or another in Israeli law, and this is a central consideration in granting leave to appeal.

 

The Manufacturers Association's argument addresses the method by which the period of the extension order should be calculated pursuant to Amendment 7 of the Law. For the purpose of clarifying the foundation of the dispute, we shall briefly describe the calculation mechanism that was provided by the legislature, as per the wording of the Law at the time:

 

64I. (a) An extension order shall be in effect, subject to the provisions of section 64J, for a period equal to the shorter of the extension periods that were given to a reference patent in the recognized states.

(b) If a license was applied for only in Israel, then the extension order shall be in effect for a period that is equal to the period from the day on which the application for a license was submitted and until the license was given; provided that the application on the applicant’s behalf was submitted and handled in good faith and with due dispatch.

 

It is evident that the principle rule is that the period of the extension order shall be equal to the period of the extension that was granted to the similar patent (the "Reference Patent") in certain designated states listed in the Law (hereinafter: "Recognized States"). Incidentally, at the time Amendment 7 of the Law was enacted, in 2006, this list, in principle, comprised 21 countries (including countries such as Japan, Luxembourg, Australia and Switzerland), and at present, since Amendment 11 of the Law, in 2014, only six countries are included – The United States, Britain, Germany, Italy, Spain and France (see Schedule One of the Law). The Law further provides that when an extension order is granted in a number of Recognized States, the period of the order shall be that of the shortest extension period that was granted in any of the countries. This last rule changed the legal situation that existed prior to Amendment 7 of the Law, in the framework of which the period of extension in Israel was not linked to the period of the shortest extension that was granted in one of the Recognized States. To complete the picture, sec. 64J of the Law provides three limitations to this calculation mechanism. First, the period of the extension order shall not exceed five years. Second, the protection of the patent shall in any event expire 14 years after the date on which a permit to market medical equipment or preparations that are protected by the patent was granted in one of the Recognized States. Third, the order will in any event expire if the extension order that was granted in one of the Recognized States expired in that state, or if the patent that was registered there was cancelled.

 

            The question disputed by the parties is how one must act when an extension order is granted in any Recognized State after an extension order was granted in Israel, and the period in the Recognized State is shorter than the period of the Israeli order. The Manufacturers Association argues that the rule of "linking" the Israeli order to an order with the shortest period in a Recognized State also applies in such a case, and therefore, the period that is determined in the Israeli order should be shortened. The representative of the Attorney General also supports this position, in the opinion that was filed in this matter. We would note that procedurally speaking, the Law has a mechanism that allows filing an application to cancel or shorten an extension order that has already been granted, inter alia, on the grounds for which one can object to the period of an extension order that has not yet been granted (sec.  64K of the Law). This is what occurred in the case at hand. In contrast, Merck argues that after the period of the Israeli order has been determined, it cannot be shortened in light of an extension order subsequently granted in a Recognized State for a period that is shorter than that which was determined in the Israeli order. Each of the parties seeks to base its position on the language of the Law and its purposes. We shall now turn to examining these matters.

 

5.         The language of the Law does not explicitly provide that the period of an extension order that was granted in a Recognized State after the Israeli order was granted is not taken into consideration. The opposite is also not explicitly provided. Both options coincide with the language, and as the parties rightfully emphasized, indications for each of them can be found. For example, it was provided that "An extension order shall remain in effect… for the duration of the period that is equal to the period of the shortest extension among the periods of extension that were granted to the patent in the Recognized States" (sec. 64I(a) – emphasis added). It can be deduced from this that the period is determined in accordance with the extension orders that were granted in the past and not those that shall be granted after the order is granted. On the other hand, the statement "were granted" can be interpreted in the sense that the legislative intent was to take orders that were granted into consideration, regardless of when they were granted. Meaning, once an extension order is granted in a Recognized State – even after an order was granted in Israel – it is an order that has already "been granted", and the Israeli order can be shortened as a result thereof. Furthermore, the section even uses the language "shall remain in effect… for the duration of the period that is equal to the period of the shortest extension among the periods of extension that were granted to the patent…". It can be deduced from this that the period of the order is measured at all times – and not necessarily once – vis-à-vis orders that were granted in Recognized States. Through this prism, the language of the Law actually supports the Manufacturers Association's position that the period shall be shortened in accordance with the situation in other Recognized States.

 

An additional argument by Merck is that sec. 64J(3), which addresses the expiration of the patent in a Recognized State, provides that an extension order that is granted in Israel "shall expire no later than the first date on which the extension period of the reference patent expires in one of the Recognized States…". Had the legislature so desired, it could have worded sec.  64I(a) in a similar manner, so that it would be clear that the extension order is affected by extension orders subsequently granted in other states. On the other hand, the differences in the wording of the Law can be explained by the fact that sec. 64J addresses cases of the expiration of the extension order in Israel, and therefore the wording "no later than the date…" was applied. In contrast, sec. 64I addresses the means of determining the period, and therefore the legislature did not deem it necessary to explicitly state the date the extension order in a Recognized State was granted. As noted, the Law has a mechanism that allows changing the period of the order as per a person's request, and one of the causes is a cause "pursuant to which it is possible… to object to the matter of the period of [the order]". It thus emerges that the period of the order is dynamic and can also change after the order is granted.

 

It follows, as was also held by the District Court, that the Law's language does not explicitly rule either way. Hence, we move on to its purpose.

 

6.         Purposive interpretation is multifaceted and multihued. The beacon of the Law is composed of many rays that converge to create the beam that illuminates the citizen’s path – the path of the law. The light rays originate from different sources: the historical and material background of the amendment to the Law, the objective purpose of the Law and its subjective aspect – the legislature’s purpose, as it emerges from the statute's explanatory notes and from the discussions that preceded it, and other sources from which it is possible to learn about the purpose for which the Law was enacted and how it is meant to realize it (see: HCJ 9098/01 Ganis v. The Ministry of Building and Housing, IsrSC 59(4) 241, 261 (2004) [http://versa.cardozo.yu.edu/opinions/ganis-v-ministry-building-and-housing ). All of the above, including the content of the Law, will also illuminate our way in interpreting Amendment 7 of the Patent Law.

 

The District Court accepted Merck's argument that shortening the period of an extension order after it had already been determined, compromises the certainty and finality that are required in order for a company that was awarded an extension order to make plans. I am of the opinion that in the circumstances of the case, the analysis cannot end here. Since the certainty consideration was at the focus of the District Court's ruling, I shall somewhat elaborate and explain why I do not accept this position. It is true that when interpreting a statute, the concern of compromising certainty bears weight as an interpretational consideration (Aharon Barak Interpretation in Law – Statutory Interpretation, vol. II 583 (1993)). However, this is one interpretational consideration among many that can be of assistance when the language of the law, or other indications, do not explicitly contradict it. In the case at hand, it appears that the legislature did not consider the matter of the certainty of the date of expiration of an extension order to be a primary concern. We have already referred to sec. 64J(3) of the Law, which at the relevant time provided – and in principle continues to provide – that "an extension order shall expire not later than the first date on which the extension period of the reference patent expires in one of the Recognized States". It emerges that the expiration of the order depends, at any given time, on the status of the similar patent in the Recognized States. We also referred to sec. 64K, which allows filing an application to shorten the extension period and in fact, to reexamine it  even after the order was granted. The explanatory notes that accompanied this section of the bill, state as follows:

 

It shall be noted that one may request to cancel an extension order or change its period even when the cause of action arises after the extension order was granted, such as in the case in which after the extension order was granted, the period of a parallel patent was extended in a permitting state [a Recognized State], and the extension period in the permitting state is due to end before the expiration of the period of the extension order (sec. 10 of the Patent (Amendment no. 7) (Extension of Period of a Basic Patent) Bill, 5775-2005, Government Bills 187 (emphasis added)).

 

I will illustrate the matter through an example. But first it should be made clear that the period of the order and the date of its expiration are two separate matters. The legislature emphasized the fact that the period of the extension orders in the various countries, for example three years, will be identical. However, there may be differences as to the date of expiration of the protection of the patent, which could derive, for example, from the difference in the dates when the patent was due to expire to begin with, as a result of filing the application for its registration at different times in various countries. We will now present the example that will clarify what is stated in the explanatory notes that were cited.

 

Let us assume, theoretically, that an extension order is granted in Israel for a period of three years – from the date of the end of the patent's twenty-year protection – which was due to expire on December 31, 2017. After the order was granted in Israel, an extension order was granted in England for a period of three years. However, in England the period of patent protection was due to expire, had the extension orders not been granted, a year before the expiration of the protection of the patent registered in Israel. Therefore, the period of the extension in England is due to expire on December 31, 2016. According to the provisions of sec. 64J(3), the granting of the order in England will also lead to the expiration of the order that was granted in Israel on December 31, 2016, even though the English extension order was granted after its Israeli counterpart. Thus, when an order is granted in a Recognized State,  the legislature was willing to sacrifice certainty as to the date of expiration of the extension order in order to "link" the date of expiration of the patent's protection in the two countries. Merck is indeed attempting to distinguish between the example that is presented in the explanatory notes, which was illustrated by the English order example, and the case that is the subject of the rulings of the lower court. In the facts of the case before us, it is agreed that according to each of the scenarios, the Israeli order will expire first. The question is when. In the example that was presented above, the English order was due to expire first, and this is the reason the order in Israel was shortened. In response, and as shall be clarified below, it was stated that this is a distinction without a difference. In any event, the example that is presented in the explanatory notes is sufficient to determine, at the very least, that in the eyes of the legislature, the purpose of creating legal certainty with respect to the date upon which the extension order shall expire does not bear conclusive weight. This is in contrast to the position of the District Court which emphasized that purpose.

 

Furthermore, in the explanatory notes for the Patent (Amendment No. 13) (Extension of Period of Protection) Bill, 5772-2012, Government Bills 682, it was explicitly provided that the amendment is meant, inter alia, to enhance the degree of certainty required by the pharmaceutical companies (see the general part of the bill). The certainty consideration is not a foreign consideration in patent laws, but it does not stand alone. Alongside the emphasis on certainty, the explanatory notes explicitly state that the Registrar must take into consideration events that occurred after the order was granted in order to reexamine the period of the extension. There is even an explicit determination that in circumstances such as those before us, the period of the order should be shortened as per the shortest order that was granted thereafter (ibid, sec. 8). This is a statutory amendment that was subsequent to Amendment 7, which addressed other matters and did not in any way alter the controversial wording, but rather only referred to it in the explanatory notes. In any event, the matter is raised not in order to rule on the interpretational question, but rather, at the very least, to cast doubt on the logic that the legislature was of the view that certainty prevails over the need to choose the shortest extension order that was granted in a Recognized State.

 

The Attorney General's representative added that compared to other laws, patents are characterized by their very nature by a lack of finality and certainty, and referred to various provisions of law which, in the framework of various proceedings, allow discussing the validity of an existing patent based on causes of action pursuant to which it would have been possible to object to the granting of the patent to begin with (see, for example, secs. 73B and 182 of the Law). There is merit to Merck's argument in this regard that these sections are mainly applied when there should not have been patent protection to begin with, for example, when it is subsequently discovered that the patent owner did not comply with the threshold conditions, and not necessarily in cases in which the cause of action for cancellation was created after the patent was granted. However, it is important to note that in these sections – as in sec. 64K which addresses the application to shorten extension orders – the legislature provided that there is no statute of limitations. This testifies to that fact that in the special context of patent laws, finality and certainty are of less importance, in light of the heavy weight of the opposing public interest. Justice S. Netanyahu elaborated on this in CA 217/86 Mordechai Schechter v. Avmatz Ltd., IsrSC 44(2) 846, 864 (1990).

 

These all express the policy of the Patent Law, which imprints a stamp of temporariness on the patent and only grants the inventor conditional protection when the invention and the inventor fulfill those conditions which are based on the public's best interest that the invention is indeed patentable and that the patent owner is indeed its owner.

Blocking the option of challenging the patent due to limitation of actions would lead to the outcome that at the end of the period of limitation, the patent would become absolute. This is an outcome that is contrary to the policy and the spirit of the Patent Law… The conclusion that follows from the Patent Law is that the law rejects the approach of expiration of an application to cancel a patent due to limitation of actions, and does not coincide therewith.

 

This line of argument also emerges from the discussions at the Constitution, Law and Justice Committee (Minutes of the Meeting of the Constitution, Law and Justice Committee, the 16th Knesset (October 11, 2005) (hereinafter: the Committee's Minutes)). For example, the Committee Chair, MK M. Eitan said:

 

The extension order it grants is flexible… If I take the countries that decided, the Registrar takes the smallest, afterwards, another country that extended less joins, and the Registrar reduces… With a reducing system, I take only the countries in which they were approved (ibid, page 20).

 

In other words, the question of adapting the extension order that was granted to orders that were subsequently granted in other countries was raised during the discussions. The discussion addressed the updating of the period of the order, without an explicit reservation being voiced regarding this arrangement due to compromising the certainty or finality of the order. Further on, the Committee Chair was even asked what happens when an additional country is added, and his answer was "until the shortest one" (ibid, page 21). The compromising of certainty was not the focus of the discussion, which concentrated on the issue of compatibility between the expiration date of the order in Israel and the expiration date in other countries, in terms of the relationship between the generic industry, the ethical industry and Israel's status in the global pharmaceutical market. Even a representative on behalf of Pharma – The Association of the Research-Based Pharmaceutical Companies in Israel – agreed that "we prefer to start from the top and go down. We set a number that decreases when there is new information" (ibid). Thus, certainty was not even an issue for the representatives of the industry with which Merck associates itself, who were concerned about other matters.

 

7.         Merck argues that the Law has an additional important purpose – to prevent the expiration of an extension order or a patent in a Recognized State when the patent owner would still be protected in Israel. According to Merck, this need for co-termination is the explanation for the legislature’s willingness to revoke the period of an extension order when the market opens to competition in one of the Recognized States. However, occasionally this consideration is irrelevant. This is the case in the matter at hand since both according to Merck's calculation method and according to the Manufacturers Association's calculation method, the Israeli order will allegedly expire first, since the cause of expiration in the case at hand does not derive from sec.  64J(3), which addresses the expiration of the patent in another state, but rather from sec. 64I(a). According to Merck, only in the case of co-termination can one justify compromising certainty. Such an explanation is indeed possible, however it has its shortcomings for several reasons.

 

First, in the explanatory notes to Amendment 7 of the Law, which were cited above, the example of the expiration of the patent in another country is presented only as an example – "such as" – of a cause of action that emerges after the order in Israel was granted and which results in the shortening of the Israeli extension order. “Such as” is indicative of the fact that this is not the only example. There are other examples. In fact, the most conspicuous additional example of secs. 64I and 64J, other than the example that the legislature presented, is a case such as the one before us. Second, even according to Merck's argument, the legislature was willing to compromise certainty for the sake of the purpose of co-termination of a patent in Israel and in another country. Why is it not possible that the legislature viewed other values as justifying compromising certainty? There is no indication in the Law or in the explanatory notes that the consideration of compromising certainty prevails over any other consideration. I would reiterate that the explanatory notes to the later amendment explicitly provide that one of the purposes of the amendment is to create certainty, while concurrently determining that an extension order should also be shortened in a case such as the one before us, even though this is not a case of co-termination. Third, Merck's argument does not offer any positive reference to any purpose that necessarily supports the interpretation that it proposes. What does the basic calculation method derive from? What is the purpose of considering the orders that were granted in other Recognized States, even when according to each of the scenarios the patent will first expire in the State of Israel? Merck did not offer an answer to this question, which has decisive importance in resolving the dispute.

 

I would incidentally note that the consideration of opening competition in Israel at the time it is opened in a Recognized State is certainly a central consideration that guided the legislature. The majority of the discussions in the Constitution, Law and Justice Committee prior to Amendment 7 of the Law focus on this international aspect and on the question whether and in what circumstances it is appropriate that a patent be protected in Israel when it has expired in another country – an outcome which would prejudice the ability of the generic industry in Israel to compete with its foreign competitors. It emerges from Merck's statement of claim that this matter also concerned various actors in the international arena, who examined the Israeli arrangement under Amendment 7 of the Law. However, this consideration, as important as it may be, does not indicate the opposite – a desire to avoid opening competition in Israel as a first country. It is indeed possible that the time of expiration in Israel will be first. Had the legislature desired a consistent rule of co-termination, all it had to do was provide that the protection of a patent would always expire along with the expiration of the extension order or the cancellation of the patent in a Recognized State. It did not do so, but rather prescribed a more complicated mechanism. According to Israeli law, an extension order will expire when the patent protection in another Recognized State expires. However, if according to the rules of Israeli law – a patent and extension order – the period of the extension of patent protection has ended, this situation will not be affected by the existence of an extension order that has not yet expired in another Recognized State. Prima facie, according to each of the options, and also according to Merck's above interpretation in the case at hand, the situation will be that of expiration in Israel before the other countries. Moreover, the dispute between the parties is fundamentally based on the fact that the U.S. order was granted after the Israeli order. Had the U.S. order been granted earlier, Merck would not have any claim, even though the period of the Israeli order would have been determined in accordance with the period of the U.S. order, and notwithstanding the expiration of the patent in Israel before its expiration in the United States.

 

8.         What, then, is the purpose that should guide the interpretation of sec. 64I(a) of the Law – a purpose that is neither the creating of certainty nor the equating of dates of expiration of the patents in Israel and in another Recognized State? In order to answer this question, we must revisit the various incarnations of the arrangements, examine the purpose of the extension orders and discover why the legislature chose the specific mechanism for calculating the extension period.

 

A theoretical key to understanding the purpose of the Law is recognizing the uniqueness of the mechanism of calculating the period. The rule for protecting patents is twenty years. Why does the legislature address various extensions and shortenings in the pharmaceutical field? Article B1 of Chapter D of the Law is entitled "Extending the Period of Protection". One can discern two main channels in sec. 64A, the definitions section. The first is the medical channel. There is a definition of a medical preparation, of what constitutes material – the active ingredient in a medical preparation – and stating that a marketing permit is a permit to market medical equipment or a preparation, and the like. The second is the global channel. The section distinguishes between Recognized European States and other Recognized States, refers to the difference between an extension order that is granted in the United States and an order that is granted in Europe, and defines a "reference patent", which is a patent that, inter alia, is registered in another Recognized State and corresponds to the Israeli patent. What is unique to the pharmaceutical field that warrants the option of an extension order? The answer is that marketing pharmaceuticals requires the involvement of an additional entity – the Ministry of Health. In this field, an examination of the innovation of the invention is not sufficient. An examination of the pharmaceutical’s potential benefit or harm is inherently required. Therefore, marketing pharmaceuticals is contingent upon an approval and licensing procedure. The licensing period takes time, and therefore there is a gap between the time of filing the patent application and the time it is made available for consumer use. This gap does not exist or is not significant in other fields, and this is the origin of extension orders.

 

The extension period is not meant to be determined in an arbitrary manner. Generally, the presumption is that the twenty-year period achieves the public objective of incentivizing inventors. This is the foundation for the basic rule provided in the Law. Thus, changes to the period are also meant to be derived from this objective, and at the very least, should give it significant weight. Obviously, each field has its own unique nature. The rules for the field of practical physics are not the same as for the field of agricultural developments, and neither are the same as for the pharmaceutical field. The arrangements for incentives, the market forces, the extent of global impact and additional characteristics are not necessarily identical. It should be noted that, at present, pharmaceuticals plays a central role in the economy. The industry requires significant investments and creates enormous revenues. This explains the public economic interest as well as the impact on the individual, who may, unfortunately, suffer  various diseases that may benefit from these pharmaceuticals. There is a connection between a plain and simple financial business of an impressive scope and a public service at the highest level. The outcome of this mix is that the path to an extension order traverses weighty  considerations, and the legislature, in its capacity as regulator, must keep an eye on the situation in Israel and abroad so the period of time will "be in line" with the patent's terms in other countries, while taking global developments into consideration. Before presenting the analysis, I will summarize in stating that the purpose of the extension order is to compensate the pharmaceutical developers in the form of a certain period of time, but not to over-compensate them. Uniformity among countries must be considered, and this consideration, which, as will be explained, prevails over stability and determining a period that is known in advance – although these also play an important role in the entire picture. In fact, the mere granting of an extension order creates an opening for a calculation that is not completely certain but is rather dynamic.

 

And from the general picture to the statutory development.

 

9.     Until Amendment 3 of the Law, in 1998, anyone who was not the patent owner was forbidden from performing actions for the purpose of licensing a patent-based product in fields in which such licensing was required, until the period of the patent's protection had lapsed. The main field in which licensing is required is the pharmaceutical industry. As a result, one could only begin the licensing procedures – which may take extended periods of time, and even years – after the expiration of the patent upon which the pharmaceutical was based (see the definition of "Utilizing an Invention" in sec. 1 of the Law prior to the amendment). This situation created a problem: pharmaceutical companies in the "generic industry" – that primarily engages in the manufacturing of pharmaceuticals that utilize existing patents – could not initiate the actions necessary to obtain a license for their products until the relevant patent had expired. Consequently, the approval of generic pharmaceuticals was delayed for an extended period. Concurrently, in other countries, it was possible to initiate the actions necessary for licensing of the competing pharmaceuticals during the period of the patent's protection. This created a situation in which one day after the patent expired, companies domiciled in one of those countries could file a licensing application, while the Israeli companies could only begin to take the required actions. This situation adversely affected Israeli manufacturers both  in the Israeli market and in the export market. Amendment 3 of the Law was intended to allow  the use of the patent during the period of its protection, subject to certain conditions, for the purpose of obtaining a marketing license – as opposed to actually marketing – from the Ministry of Health (see sec. (3) of the definition of "Utilizing an Invention" in sec. 1 of the current Law, along with sec. 54A; LCA 2826/04 Patents Registrar v. Recordati Ireland Limited, IsrSC 59(2) 85, 87-88 (October 28, 2004) (hereinafter: the Recordati case); Amir Friedman, Patents – Law, Case Law and Comparative Law 123-145, 688, 751-752 (2001) (Hebrew) (hereinafter: Friedman).

 

This amendment indeed solved the difficulties of the generic pharmaceutical manufacturing companies, but concurrently created a problem in terms of the patent protection granted to companies that primarily engage in research and development of new pharmaceuticals for the sake of registering patents (hereinafter: the ethical companies). According to the law prior to Amendment 3, these companies actually benefited from an additional period of protection for their registered patents, due to the period of time that was required for the generic companies to receive the Ministry of Health license. This period of time was not perceived as an unearned benefit to the ethical companies, inasmuch as they were themselves required to obtain a Ministry of Health license before they began marketing their pharmaceuticals, which meant that a period of time lapsed between registering the patent and marketing the pharmaceuticals. After the Law was amended, the period of time required for licensing the generic pharmaceuticals was significantly shortened, while the ethical companies still needed an extended period of time until they could begin to market their patent-based pharmaceuticals. In order to reinstate the equilibrium that existed before the amendment of the Law and to prevent harm to the ethical companies, an extension orders arrangement was introduced, similar to those of other countries around the world.

 

The combination of the possibility of initiating actions towards licensing a patent even before its expiration, along with the possibility of extending the period of the patent's protection beyond twenty years, was meant to address the difficulties of both the ethical and generic industries. On the one hand, the ethical industry was granted an additional period of protection, meant to compensate it for the "lost years". On the other hand, the Israeli generic industry was able to compete with its foreign colleagues, and like them, it could file an application for licensing a generic pharmaceutical immediately after the expiration of the patent (see secs. 54A, 64A-64P of the Law; the Patent (Amendment No. 3) Bill, 5758-1997, Government Bills 2651 (hereinafter: the Government Bill); the Patent (Amendment No. 4) Bill, 5758-1997, Bills 2664 (hereinafter: the Committee Bill); Friedman, pp. 135-136).

 

That is the background that leads us to the next stage – the method of calculating the period of the extension. If the objective is to compensate the ethical companies for the loss of the period of protection that was taken from them, then that is the period of time that should constitute the basis for calculating the period of the extension order. Indeed, the mechanism that was provided in the Law is directed towards that objective. Section 64I(b) refers to a situation in which licensing was requested only in Israel. In this situation, the extension is for the period of time that is equal to the period between filing a license application for the pharmaceutical and its approval – subject to everything being performed with due dispatch. Section 64I(a), as worded at the time, referred to a situation in which licensing was also requested in another Recognized State, and provided that the period of the order shall be the same as the period of the order that was granted in the other state. The assumption is that the extension period is also, to some degree, determined in the Recognized States based on the period of time between the registration of the patent and the receipt of the marketing permit. See, for example, the definition of an "Extension Order on a Reference Patent" in sec. 64A of the current wording of the Law. According to this section, the foreign extension order, pursuant to which the period of the extension in Israel is determined, should be based, inter alia, "in accordance with the term of review for the purpose of providing the first marketing license by the authority accredited to provide marketing licenses" in the United States, or on "the time passed since the filing date for the reference patent and up to the granting date of the first marketing license" in a Recognized European State.

 

We now reach the heart of the matter: The legislature decided that the period between the application to register the patent and the approval to market it, or the extension period that was granted in a Recognized State based on this figure, properly compensate the patent owner. It should be noted that in this context there is a certain difference between the explanatory notes of the two bills that led to Amendment 3 of the Law – the wording of which is identical, and similar wording was eventually adopted in Amendment 3. The government bill explains that the compensation is for the period of the "actual protection" that the patent owner lost due to the amendment of the Law. The assumption is that the period of the extension order is longer than such period, and therefore the compensation is even more than appropriate:

 

One cannot determine in advance how much time the licensing procedure of a generic product will take. One can also not foresee how much time will be needed until the patent owner will receive licensing in the State of Israel, although there is no doubt that the period that will be required for the patent owner will always be longer than the period that will be required for licensing the generic product.

The Committee has found that the period that has elapsed since the patent owner obtained the licensing from the Israeli Ministry of Health will be an appropriate period for compensating for the fact that a generic company will be able to enter the market immediately upon the expiration of the patent.

This period will be known when the patent owner submits its application to extend the period of the patent. This extension will always grant the patent owner a longer period of compensation than the period of the de-facto protection that it “will lose” as a result of the amendment of the law (The Government Bill, sec. 3).

 

Thus, the extension order's objective is to compensate the patent owner for the period of the de-facto protection that it lost as a result of the amendment of the Law. The duration of the extension considers the period of time until the patent owner – in Israel or in another state in which an extension order was granted – obtained the license, which is longer than the period of time the patent owner lost. In contrast, the Constitution, Law and Justice Committee’s bill noted that the compensation is for the period of time during which the patent was registered but the Ministry of Health’s marketing approval had not yet been granted, and therefore, the period of the extension is identical to this period (see the Committee Bill, page 148). In any event, granting the patent owner appropriate compensation is a central objective that the legislature sought to achieve. Even in the current framework, Merck's argument is not directed against the duration of the order that was granted in the United States, in and of itself. No argument was raised that the duration of the period is what infringes its property, but rather only that the order was granted after the Israeli order had been granted. Therefore, for the purpose of the continuation of the discussion, we can establish the following axiom – which was not challenged in any way by either of the parties: A period of protection that is based on an extension order that was granted in a Recognized State (which takes into consideration the period of time that is required for the patent owner to license the pharmaceutical), constitutes appropriate compensation for the patent owner for the period it "lost", either as a result of Amendment 3 of the Law, or as a result of the need for licensing.

 

After Amendment 3 of the Law, the question arose as to how to calculate the period of an extension order when a number of extension orders have been granted in Recognized States. The interpretation that was given to the Law in the Deputy Registrar’s decision in Application to Extend a Period of Protection for Patents no. 84601, 105264, 79336 (July 23, 2003) was that the patent owner may choose a specific state, and the period of extension and the rules of expiration of the patent would be in reference to that state. Amendment 7 of the Law, which explicitly clarified that the Patents Registrar must seek the state in which the extension period that was granted was the shortest, was amended, inter alia, following this decision of the Patents Registrar. The explanatory notes of the Law do not include any explicit reference to choosing this arrangement, however it can be understood in light of the purpose that Amendment 3 was meant to realize. It was possible to amend the Law in the spirit of the Deputy Registrar's decision, or to prescribe a different rule, such as linking the period of the extension order in Israel to the order that was granted first among the Recognized States. Why, then, did the legislature nevertheless chose to follow the state that granted the shortest period of time? It should be noted that the guiding rule that was presented was that the calculation mechanism provided in sec. 64I(a) grants appropriate compensation for the patent owner. Hence, there are grounds for finding that the legislature was of the opinion that there is no flaw in choosing the shortest extension order granted in one of the Recognized States. In any event, and what is the important is that the legislature provided that compensation that is calculated in accordance with the state in which the extension is shortest is appropriate and realizes the purpose of the Law.

 

10.       Similar conclusions emerge from the deliberations of the Constitution, Law and Justice Committee that preceded Amendment 7 of the Law. The vast majority of the deliberations addressed the co-termination consideration and not the question of the duration of the extension period in cases in which the patent protection expires in Israel before other states. However, there was some reference to this issue as well. At the beginning of the discussion, the background of Amendment 3 of the Law was clarified. As stated by the Committee Chair, MK Eitan: "What interests me is that there will be effective protection for a certain period of time during which I will be able to exhaust the patent". Later in the discussion, the Ministry of Justice representative stated that "in order to reach short periods, we decided to base the period in Israel on the periods abroad". Afterwards, the Committee Chair clarified the situation: "Almost 20 years have passed. I ask the Patents Registrar to give me 5 more years. He sees what is happening in a variety of states, you said. He takes the state in which the patent will expire in the shortest period of time after the lapse of the 20 years…" (Minutes of the Committee, at p. 7). Meaning, the objective is to compensate the patent owner for a certain period of time, and the assumption is that this is realized even by the shortest period of time for which an extension order was granted in another state. Of course, appropriate weight is to be given to the Committee’s deliberations. While they do not establish the purpose of the Law, together with the other components of the analysis, one cannot say that they do not bear any weight. It is appropriate here to mention that according to the Law, the purpose of compensating the patent owner also retreats before the co-termination consideration. This is in light of the importance that the legislature attributed to the ability of the Israeli generic industry to compete with foreign companies. However, this purpose, as mentioned, is not directly relevant to the interpretive question we are currently addressing in regard to the date of expiration of the order in a situation in which, in any event, it first expires in Israel.

 

11.       An additional, important component of purposive interpretation, alongside the language of the Law, the various arrangements therein, the explanatory notes and the statements made in the Knesset committees, is the objective purpose of the Law. Through this perspective, one must not forget that at issue is not only a competition between the ethical companies and the generic companies. The public is also part of the story. From the public perspective, the tension inherent in the patent laws is between the interest to the free use of an invention for the benefit of the public, and the desire to provide incentives for development and invention by way of the Law's protection against the copying of the patent:

 

The conflicting considerations and interests that underlie the patent law system are well reflected in the pharmaceutical arena. One the one hand, the pharmaceutical companies invest extensive funds and significant human resources in developing new pharmaceuticals, and expect to receive proprietary protection for their inventions, which are achieved through immense investment. Granting proprietary protection for an invention encourages developing new pharmaceuticals and completing the development of existing pharmaceuticals. On the other hand, there is the interest of freedom of competition and occupation of the public and the competitors, which encourages generic pharmaceutical companies to manufacture competing pharmaceuticals at affordable prices that are significantly less expensive than the price of the patent-protected pharmaceuticals. Promoting the interest of the generic companies to distribute competitive pharmaceuticals promotes not only the economic benefit of these companies, but also the interest of the consumer, by significantly reducing the prices of pharmaceuticals in the market (LCA 6025/05 Merck & Co Inc. v. Teva Pharmaceutical Industries Ltd., para. 21 (May 19, 2011), per Justice A. Procaccia (hereinafter: the Merck case).

 

It is doubtful whether the public interest in encouraging research and development is prejudiced by adopting the interpretation of the Manufacturers Association and the Attorney General. If sufficient incentive existed prior to Amendment 3 of the Law, the legislature was of the opinion that such incentive was not prejudiced as a result of Amendments 3 and 7, in light of the compensation that is granted to the patent owners. This is also the case if we consider the period of the shortest extension granted in a Recognized State. Reality and the development of the industry since the amendment of the Law do not contradict this position. On the other hand, if the patent owners are over-protected, beyond what is necessary to incentivize them, such protection will certainly be at the expense of the entire public, since the price of the pharmaceuticals significantly declines after the market opens to competition. It emerges that the public interest supports avoiding granting compensation that exceeds that which is necessary to maintain the incentive that the ethical companies enjoyed prior to the amendments to the Law.

 

12.       We will now implement the above in the dispute at hand. The question is whether the purposes that were described above are more consistent with Merck's interpretation – that the periods of extension orders that were granted after the Israeli order was granted should not be taken into consideration – or with the interpretation of the Manufacturers Association and the Attorney General – that these periods should be considered. In my opinion, the position of the latter is the one that corresponds more completely with what was stated above. It is the position of the legislature that the periods of extension orders granted in the Recognized States all meet the criterion of compensating the patent owners for the periods of time that they lost. If this is the case, the most appropriate compensation, in terms of striking a balance among all of the conflicting values and interests, is the shortest period of time that was granted in one of the Recognized States. It does not matter, in this respect, if the order in the Recognized State was granted before or after the order in Israel. Deviating from the shortest period of time would mean over-compensating the patent owner and prejudicing the generic companies and indirectly, the pharmaceuticals' consumer public. Indeed, changing the period of the order after it was granted can affect certainty and the patent owners' ability to rely on the order, however the legislature was willing to pay this price in the framework of striking a balance among all the conflicting interests, as detailed in the analysis above.

 

We should bear in mind how delicate is the balance that must be struck: encouraging research and development as opposed to distributing knowledge; the ethical companies as opposed to the generic companies; the situation in the Israeli market compared to the situation in the international market; the economic interest of the patent owner as opposed to the public health interest. It should be noted that the sensitivity to what is being done in the Recognized States does not derive from mutual respect for the internal decisions of any one state or another. It is rather that the determination of a period of time elsewhere inherently affects what happens here. One cannot ignore the economic reality. It thus follows that the significance of the shortest period of time is that it reflects an appropriate period of time for restricting competition. It should further be mentioned that the recognition of the inventors' bundle of rights also coincides with the interest of the individual who purchases the pharmaceuticals. The approach is that appropriate treatment of the inventor's profit will incentivize the market and expand the basket of pharmaceuticals available to those who need them.

 

The conclusion is that the interpretation that should be adopted is that when determining the period of the extension order one must also consider orders that were granted in Recognized States after the order was granted in Israel. This is the foundation, but the road to completion of the entire structure is still long. This is the interpretation of the Law, however one must continue to examine whether applying it to Merck unlawfully infringes its proprietary right. And on the other hand, even if there is no wrongful infringement of a proprietary right, the question emerges whether there was reliance upon a legal situation and whether this has significance. We shall now address these matters.

 

The Constitutionality of Shortening the Extension Order

 

13.       An additional question the parties disputed is the constitutionality of the transitional provisions of Amendment 7 of the Law, which prima facie, provide that the calculation mechanism under this amendment will also apply to extension orders that were already granted in the past. This is the issue at center stage in LCA 8263/15, which was filed by Merck. According to Merck, this is a constitutional infringement of its proprietary right, which cannot be justified. We shall begin by presenting the transitional provision:

 

The provisions of the main law, as worded in this law… shall also apply to applications for the granting of extension orders that were filed before its commencement and to extension orders that were granted before its commencement, provided that the validity of the basic patent for which the extension order was granted has not yet expired (sec. 22(a) of the Explanatory Notes to Amendment 7 of the Law – emphasis added).

 

Merck claims that this is a retrospective act of legislation, since it applies to orders that were already granted, and that it changes a legal situation upon which one could rely. The Manufacturers Association is of the opinion that this is prospective legislation, since the amendment does not infringe the assets that Merck has already accumulated, but rather, at most, infringes its future economic interest, inasmuch as the order should be viewed as though it is to enter into effect only upon the lapse of the twenty-year basic protection. I admit that I am not of the opinion that the dispute regarding the classification is decisive in the case at hand. There are four types of application: retroactive, retrospective, active and prospective (see HCJ 6971/11 Eitanit Construction Products Ltd. v. State of Israel, paragraphs 37-38 (April 2, 1013); PPA Orit Arbiv v. The State of Israel, IsrSC 46(2) 765, 778-784 (1992)). At times, the legal reality does not cooperate with archetypes. Not every law fits into neat, organized compartments. Even if I were to address the issue as it was presented, it would be incorrect to rule that the amendment is retrospective or retroactive. This being the case, Merck will not benefit from the claim that the current transitional provisions infringe its rights. I shall clarify.

 

Take, for example, a person who was involved in a work accident on January 1, 2000. In an ordinary situation, his claim would expire under the statute of limitations upon the lapse of seven years. This is the law at the time when his cause of action was established. Let us assume that in 2002 the legislature decides that a claim for work accidents can be filed up to ten years from the date of the accident. A year later, the legislature decides that the period of limitation of actions shall be eight years from the date of the accident. It is further established that all of the amendments also apply to accidents that occurred in the past and for which a cause of action has already arisen. We should take note of the fact that along the legislative axis, from the date of the injury, the person in the example was awarded a benefit in the sense that instead of a seven-year limitation period, the law establishes an eight-year limitation.

 

It would appear that this example is similar to the case at hand. Merck received a patent in 1994, for twenty years. At that time, the legal mechanism of extension orders, which was legislated in 1998, did not exist. An extension order was granted to Merck in 2005, and the relevant transitional provision shortened the period of extension but maintained the order itself. All of this was done during the twenty-year period. Indeed, alongside the granting of the extension order, generic companies were permitted to begin taking steps toward licensing their pharmaceuticals during the twenty-year period. However, there is an additional fact – in the beginning, the law allowed the ethical companies to look for reference states as they desired, including states that grant maximum extension periods, and this option was later cancelled. All in all, Merck's situation would appear to be better, and it is at least not worse than it was when it filed the patent application.

 

In my opinion, in both of these examples one cannot say that there is a retroactive or retrospective infringement. The infringement in the statutory provisions can be defined as active, since it applies to a right that exists in the present – a patent – and it operates in the future. It does not apply to an action that has already ended or to a right that has been exhausted. At most, one can say that it has certain retrospective characteristics (see and compare with para. 2 of the opinion of Justice U. Vogelman in HCJ 3734/11 Chaim Davidian v. Knesset (August 15, 2012) (hereinafter: the Davidian case)). However, even an active law can infringe property rights, and even retroactive application can comply with the requirements of the law (see and compare: HCJ 4562/92 Sandberg v. Broadcast Authority, IsrSC 50(2) 793, 817-819 (1996); HCJ 1149/95 Arco Electricity Industries Ltd. v. Mayor of Rishon Lezion, IsrSC 54(5) 547-574 (2000)). It emerges that the title – retrospective or active – is not decisive, nor even appropriate. The situation before us incorporates both retrospective elements and prospective elements. They are intertwined. Meaning that we are addressing an order that was granted in the past but an infringement of a future part thereof, and this is what the discussion should focus on. The title is not a self-sustaining, living being. It is meant only to assist in examining the fundamental question – whether or not we are dealing with a wrongful infringement of proprietary rights. I shall thus focus upon a substantive examination of the elements that are relevant to analyzing the matter, those that are retrospective and those that are prospective, and they shall decide how the constitutional law applies in the concrete circumstances.

 

1.According to Merck – and pursuant to the Recordati case (para. 22 of the judgment) – upon the granting of an extension order, a proprietary right is created. It is argued that if this is the case, then the shortening thereof constitutes an infringement of property that is contrary to Basic Law: Human Dignity and Liberty. On the other hand, the Attorney General's representative and the Manufacturers Association argue that the Recordati case  held that there is no proprietary right prior to the granting of the order, but it did not establish the opposite position, that the right is created upon the granting of the order,. According to them, the proprietary right crystallizes only upon the lapse of the period of the basic patent right, when the patent becomes protected by virtue of the extension order. According to them, until this stage, there is no vested right that the duration of the order not be shortened.

 

 This requires addressing a basic question. Basic Law: Human Dignity and Liberty explicitly mentions the right to property. The heading of sec, 3 of the Basic Law is "Protection of Property" and its language states: "There shall be no infringement of the property of a person." Section 8 of this law provides that "There shall be no infringement of rights under this Basic Law except…". The question when a person has a right to property and when an economic interest has not crystalized into such a right is a weighty question (see, for example, CA 6821/93 United Mizrachi Bank Ltd. v. Migdal Cooperative Village, IsrSC 49(4) 221, 327-331 (1995) (hereinafter: the Mizrachi Bank case); Yoseph Edrey, A Declarative and a Constructed Constitution - the Right for Property Under the Israeli Constitutional Law and its Location on the 'Constitutional Rights' Scale, 28 Mishpatim  461, 519-529 (5757) (Hebrew); Aharon Yoran, The Scope of the Constitutional Protection of Property and Judicial Intervention in Economic Legislation, 28 Mishpatim  443, 447-450 (5757) (Hebrew)). In various countries, such as Canada, the right to property is recognized as a protected right in a charter. This situation also derives from internal considerations of constitutional politics (see: David Johansen, Property Right and the Constitution, Library of Parliament (Canada), Law and Government Division, (October, 1999)). In any event, this outcome also derives from the difficulty in defining what property is, and in distinguishing between it and an economic interest that is not constitutionally protected. The concern is that a property right will be interpreted in an excessively broad manner, while limiting or frustrating various acts of legislation which have economic implications (see Joshua Weisman, Constitutional Protection of Property, 42 Hapraklit 258, 259-260 (5755) (Hebrew)). The distinction between an economic interest and a property right is a general issue, and it is implemented in each of the fields of law while striking a balance between the interests and values at issue. This is also the case in the field of intellectual property in general, and in the area of patent law, in particular.

 

At present, I do not need to set hard and fast rules as to whether granting an extension order creates a proprietary right in order to rule in the matter at hand. The case law has already held that, as a matter of principle, a patent is a proprietary right (see, for example, the Merck case, para. 17; HCJ 5379/00 Bristol-Myers Squibb Company v. Minister of Health, IsrSC 55(4) 447 (2001)). I am willing to assume for Merck's benefit that an order to extend the patent is included in this right. However, the case before us does not address the matter of the cancellation of an extension order. The question before us is different: What is the law that governs the shortening of an extension order? One can even pinpoint the issue: What is the law that governs shortening an extension order in the current circumstances, in which Merck's patent was registered before Amendment 3 of the Law, and before the institution of extension orders, along with its purposes, was established? Does such a right include a constitutional protection not to have its duration changed? This framing of the question is what leads to rejecting Merck's position that its proprietary right was unlawfully infringed. I shall clarify my position.

 

15.       Should all legislation that has economic implications be examined through the prism of the constitution? This question is at the heart of the discussion that surrounds the nature of the constitutional right to property. As early as the Mizrachi Bank case various positions were expressed regarding the nature of the right. As is well known, that case concerned a challenge to a provision of law that somehow infringed the possibility of collecting various types of debts. President (Emeritus) M. Shamgar ruled that for the purpose of the constitutional examination, an obligatory right should also be considered property (ibid, page 328). An apparently more expansive approach was expressed by President A. Barak. According to him, "property is any interest, which has an economic value". However, the question whether any governmental action that affects the value of an individual's property requires a constitutional examination remained to be further discussed. It was additionally ruled that de minimis infringements would not necessitate a constitutional examination (ibid, pages 431-432). From a different direction, Justice I. Zamir expressed a more cautious approach, pursuant to which it is not desirable to define any infringement of a person's financial income or the value of his property as an infringement of property. However, he assumed for the purpose of the ruling that the legislation that was the subject of the dispute did infringe a right to property since according to him, even under this assumption, the case concerned an infringement that passed constitutional review (ibid, pages 470-471). This pattern of deciding, and in fact of avoiding decision, repeated itself in various contexts in which economic legislation was subjected to review. The conspicuous example is that of tax legislation in which the Court has chosen to analyze the cases brought before it on the assumption that the legislation infringes a right to property, without ruling on this matter (see an example of this in the Davidian case, para. 29 of the opinion of President M. Naor, and the survey there).

 

I will already state that the case before us does not require an extensive discussion of whether the transitional provisions of Amendment 7 infringe Merck's right to property in a manner that requires a constitutional review. Even if that were the case, there is no unlawful infringement. In my opinion, this is not a borderline case, and there is no need for  an elaborate analysis of the elements of the Limitation Clause. This is a case of primary legislation for a proper purpose – encouraging one of the fields of industry and reducing the price of pharmaceuticals for the entire public. The extensive analysis that was performed above, in the framework of LCA 8127/15, leads to the conclusion that the proportionality condition is also met in all of its senses, including in its narrow sense. The compensation which Merck was awarded in the form of the new extension period that was determined in the order is appropriate and realizes the purpose for which the arrangement was enacted. Merck's complaint was not directed at the duration of the period itself, but to the very shortening thereof. That being the cases, in a broad examination, Merck's economic situation was not harmed. What was harmed was the possibility that it may be improved. The legislature is the one that granted it that possibility, and it is the one that subsequently took it away, without worsening Merck's overall situation (and we will already preempt and say that no reliance whatsoever of Merck on the legal situation prior to Amendment 7 of the Law was either argued or proven). We would note that at the time when Merck registered its patent, the arrangement of extension orders had not yet been enacted. Thus, the scales clearly tip toward realizing the purposes of Amendment 7 of the Law. In any event, Merck's arguments in this context – both interpretational and substantive – are to be rejected. It should further be noted that I did not find merit in its arguments that related to flaws in the legislative proceedings that preceded Amendment 7 of the Law, and I suffice in referring to our discussion above in LCA 8127/15.

 

16.       However, and in this sense, above and beyond that which is necessary, it is appropriate to refer briefly to the question whether we are addressing an infringement of the right to property that requires constitutional review. And the end of the last sentence should be emphasized. The important question when addressing legislation that has economic implications is not necessarily whether there is an infringement of a right to property, but rather if there is a constitutional infringement of a right to property. As already mentioned, in the Mizrachi Bank case President Barak already addressed the possibility that there could be an infringement of an individual's property that would not require a constitutional review of the law when only a de minimis infringement was involved. In HCJ 2442/11 Adv. Chaim Stanger v. Speaker of the Knesset (January 12, 2011), one can see an additional development of constitutional review. One of the issues addressed in the judgment was the constitutionality of a statute that revoked the possibility of filing a third-instance appeal as of right in various detention matters. Instead of a third-instance appeal as of right, the possibility of applying for leave to appeal was provided. President A. Grunis made an obiter dictum distinction between the "constitutional threshold", which is the lower threshold beneath which there will be a constitutional infringement, and the "legal status". I would prefer to define the distinction between a constitutional infringement and an infringement that is not constitutional. As President Grunis stated, there are laws that are above the constitutional threshold, where even if their amendment harms an individual, they are still not exposed to constitutional review:

 

There is no doubt that the amending law discussed in the petition adversely affects, to some degree, the state of suspects and defendants as compared to the previous legal situation. However, the mere adverse change does not necessarily lead to the conclusion that there is an infringement of a constitutional right… We must distinguish between the constitutional threshold and the legal status preceding the amendment to the Law… The fact that the Law was amended and lowered the legal threshold does not, in and of itself, lead to the conclusion that the constitutional threshold was infringed with the adoption of the amendment to the Law (para. 45). 

 

It is possible that in relation to the previous law, a right that was granted to a person is taken away, while in relation to the Basic Law, there is no infringement that justifies constitutional review. This holds true even with respect to the right to liberty – in matters of detention – and so with respect to the right to property.

 

HCJ 5998/12 Guy Ronen v. Knesset (August 25, 2013) addressed a statutory provision that changed the mechanism for calculating the pension allowance of some IDF retirees. The petitioners argued that the new calculating method would lead to giving allowances of amounts lower than they would have received in accordance with the previous calculation method. President Grunis reiterated his position, and in an even more precise manner:

 

The amendment of a law after the legislation of the Basic Law must be examined with respect to the constitutional threshold that is determined by the Basic Law, and not in relation to the legal state that preceded the amendment of the law. It should be noted that the cases that are prone to such confusion are cases in which the law that is being constitutionally reviewed changes an existing law or constitutes an amendment to an existing arrangement. It is clear that in a situation in which a new law is enacted in a matter that until such time was not regulated by statute, no concern arises that the amendment will be examined in relation to a preceding legal state (para. 14. My colleagues Justice Y. Danziger and Justice Z. Zylbertal concurred).

 

Thus, the examination is not whether a person's property (in the broad sense given this term in the Mizrachi Bank case) was infringed, but rather whether the constitutional threshold was crossed, in which event the infringement must be examined through the prism of the constitution.

 

In the framework of the discussion in LCA 8127/15 we saw that the calculation mechanism established in Amendment 7 of the Law, in and of itself, leads to an appropriate result. Merck does not argue that that the period of the extension order granted in the United States was too short, but rather that the legal situation changed. But it emerges from the above analysis that the situation that preceded Amendment 7 – in the framework of which a patent owner could choose the state that granted the longest extension period as the reference state – is one that benefited it in a manner that exceeded what is necessary. In other words, if the substantive provisions of Amendment 7 – which have not given rise to any objection – are above the constitutional threshold, then the legal situation that existed before them was certainly above this threshold. In the circumstances of the specific statutory development of the case before us, the constitutional threshold was not crossed.

 

17.       Incidental to the discussion, I shall address the issue of the significance of specific reliance on the part of the patent owner upon an extension period that was retroactively cancelled by a statutory amendment. The argument of reliance and adverse change is an argument that is independent and separate from the argument of unconstitutional infringement of property. It can be argued that if and to the extent specific reliance by Merck on the legal situation that was changed can be proven – it may be, without setting a hard and fast rule in the matter – then it is possible to initiate an appropriate proceeding, pursuant to the rules of administrative law, in the framework of which the relief that would be granted could also take the form of compensation for damages that were caused, and not necessarily the granting of a patent right (see and compare the Davidian case, paras. 21-26; Daphne Barak-Erez, Protecting Reliance in Administrative Law, 27 Mishpatim 17 (5766) (Hebrew)). In the current proceeding, Merck did not raise an argument of concrete reliance on the statutory situation, and therefore the question is theoretical. It should be noted that the Attorney General's representative argued that in light of the nature of the extension orders and their subjection to changes due to events that occur after they are granted, reliance on the period of the extension, at least before the order becomes operative upon the lapse of the basic patent period, is not protected. This is a fine question, but it can be left to be addressed in due course since, as noted, in the present circumstances and the current proceeding, reliance on a legal situation that was changed was neither argued nor proven.

 

18.       For the purpose of enriching the discussion, while addressing the essence of the economic aspect, it would be appropriate to add a comment focusing on the nature of Merck's rights. To be clear, the ruling in this judgment does not depend on the various remarks in the following paragraphs, however they would seem to reinforce the result I have reached.

 

In practice, no one disputes that Merck does not have a property right in the traditional sense. At most one can say that it has a right to intellectual property. This is the prism through which one must view the matter. Intellectual property laws are different, for example, from real estate laws or tax laws in terms of defining the property right. As opposed to a property right in a physical object, which prevents another person from taking the object from its owner, or tax laws that allow the authority to take funds that the citizen accumulated – an intellectual property right is no more than a prohibition forbidding another from performing a certain action, even when the performance thereof does not prevent the owner of the right from performing an identical action. The objective of the prohibition is not the preservation of the safety of the owner of the right or of his property, but rather of his ability to generate more profits in the future – if only to cover past investments. It is therefore interesting to ask what is the source of the justification to impose prohibitions upon the general public, even when no harm might be caused to another's negative freedom or to the property he has accumulated? The dispute between legal systems and philosophers regarding the status of intellectual property laws, including patent laws, is well known. One approach seeks to base them on a kind of natural right of the creator, who labored on his creation, to reap the fruits of his labor. Another approach focuses on general policy considerations, primarily incentivizing the development of patents, the creation of works, etc., for the sake of creating a more efficient, higher quality market (see, for example, Daphna Lewinsohn-Zamir, The 'Fair Use' Defense in Copyrights,16 Mishpatim  430, 430-431 (5746-5747) (Hebrew); Wendy Gordon, On Owning Information: Intellectual Property and the Restitutionary Impulse, 78 Va. L. Rev. 149 (1992); Justin Hughes, The Philosophy of Intellectual Property, 77 Geo. L.J. 287 (1988)).

 

In any event, the intellectual property right is special. It is a challenging question whether the uniqueness derives from its relative novelty – a fact that may change; or from other special reasons whose persuasiveness will stand the test of time. The intellectual property right presently primarily focuses on loss of future profits and not on protecting against direct harm to existing property. There are those who are of the opinion that the interest of preventing loss of profits is less positively protected by the law, and there are those who have even attempted to justify this on a normative level (see Eyal Zamir, Loss Aversion and the Marginality of the Disgorgement Interest, Shlomo Levin Volume 323, 368-372 (Asher Grunis, Eliezer Rivlin & Michael Karayanni, eds., 2013) (hereinafter: Zamir, Loss Aversion) (Hebrew)). It has been explained that harm such as the expropriation or trespass of land, and the taking of property by a tax mechanism carries heavier psychological weight than the loss of profits (such as the removal of patent protection, which allows competition and causes a decline in profits from the sale of a product). This phenomenon is referred to as loss aversion (see, in a general manner, Eyal Zamir, Law, Psychology, and Morality: The Role of Loss Aversion (2015) hereinafter: Zamir, Law, Psychology and Morality)). The more we are in the realm of loss of profits, the harm to the potential profiter is of lesser magnitude than the harm to a person who suffered injury. Intuitively, and even without relying on research, the expropriation of an object by the authority is deemed more offensive than the denial of the option of receiving an object in the future. It is interesting, in this context, that Prof. Zamir wrote that it is possible that the loss aversion phenomenon does not necessarily reflect the objective value of objects and rights. It is possible that were we all rational people – as those theoretical creatures that perform transactions in the research of some economists – there should not be a principled difference between the realm of damages and the realm of loss of profits. However, since psychology is what it is, this is of considerable and significant weight (Zamir, Loss Aversion, pp. 370-372; Zamir, Law, Psychology and Morality, pp. 205-207).

 

19.       An additional aspect of intellectual property is the distinction between the core and the margins. We have mentioned the various approaches that justify the law's protection of intellectual property. Without delving into the thick of it, it is obvious that even those who support the "natural" approach leave considerable room for policy considerations. This is a fortiori the case when addressing the "margins" of intellectual property arrangements, which reflect policy considerations and not necessarily property rights that prevail over the policy considerations (see, for example, the Merck case, paras. 17-27; Daphna Lewinsohn-Zamir, Economic Considerations in Protecting Inventions, 19 Mishpatim 143 (1983) (Hebrew); and compare, Miguel Deutch, Commercial Torts and Trade Secrets 699 (2002) (Hebrew)). The question before us is whether the shortening of the protection period of an intellectual property right is an infringement of a right to property. In other words, the question does not relate to the mere existence of the right, but rather to outlining its boundaries. The right exists, but it is not clear what is included therein to begin with and how its exact limits are defined.

 

Take as an example a petition to expand the protection of the basic patent from twenty years to twenty-two years, on the grounds of a constitutional infringement of property. Obviously such a petition would be dismissed. Analytically speaking, how is this different from a claim due to the shortening of a period of a patent from twenty-two years to twenty years (assuming there is no specific reliance on the duration of the period)? The difficulty in defining the precise boundary stems from the fact that intellectual property is an idea and not an object. Therefore, the mere definition of the intellectual property right is not sharp and precise. Its boundaries can be changed by their very nature, as opposed to those of objects for which the physical reality prescribes their exact size. This question can emerge in various contexts that address abstract ideas. For example, in criminal law, does a statutory amendment that allows imposing longer imprisonment on the perpetrator of a certain offense require constitutional review? What are the boundaries of the right to freedom? The precise boundaries were, of course, prescribed based on the legislature's policy considerations, and they are more exposed to changes. This determination is particularly apparent when addressing patent laws, which are at the center of the technological stage. This requires that they react quickly to various events and developments – even more so than other intellectual property fields – such as the protection of trademarks or literary works. In the dynamic environment of technological developments, innovations and inventions – and especially in a global world in which competition crosses virtual and physical borders – the boundaries of the right must also be dynamic.

 

This is the foundation of the extension orders arrangement. It is not a "rigid" arrangement that creates a representation of an irreversible right, but it is rather a dynamic arrangement that is given to certain changes to begin with. The most conspicuous example of this appears in sec. 64J of the Law, which provides that an extension order can be cancelled due to a subsequent extension order being granted in a Recognized State. Indeed, the cause for expiration in this section is the expiration of the patent in another country, but ultimately, in the prism of exposure to change, Merck was aware, as early as at the time of receiving the order, that orders that may be granted in other countries could lead to the shortening of the period of the order that it was granted. At issue is an expansion of the possibility that the order may be shortened – a possibility that had already existed. To begin with, it was not an irreversible right that was granted, but rather a right dependent upon orders granted overseas. In the case at hand, the transitional provisions in Amendment 7 of the Law explicitly provide that the amendment will only apply to those whose basic patent period had not yet expired. Anyone who already received the patent's protection by virtue of the extension order was not harmed by the amendment.

 

A Comparative Perspective

 

20.       It would be informative to turn to Jewish law's approach to patent laws, and along the way we will also mention the pharmaceutical field. We shall begin with recognizing the inventor's proprietary status. Conceptual caution is necessary here. Rabbi Isaac Halevi Herzog (one of the two first chief rabbis of the State of Israel, along with Rabbi Ben-Zion Meir Hai Uziel, d. 1959) emphasized in his monumental book about property laws in Jewish law, that due to the nature of the Jewish law system – from the written Torah to the oral law, the Mishna and the Talmud, and up to the Responsa that continue to be written to the present day – the development of the law is based on concrete examples. It is difficult to find a direct definition in its sources for the right to property in general, and certainly for the right to intellectual property. However, Rabbi Herzog insisted that it is possible to find the intellectual nucleus that, at least in general terms, could guide the Halakha:

 

It should be made clear once more, that even the sources adduced above would furnish no firm legal ground for patent-right. They would merely supply the spirit and the trend which would have to be clothed with the body and substance of takkanoth, of legislative enactments… Had disputes about such matters been of relatively frequent occurrence, they would have found an echo in our juristic literature, and although, as already stated, there is no direct ruling or dictum in the Talmudim on patent right, there is in that ocean of Jewish law and lore enough of the basic moral idea and even of a legalistic nucleus to have supplied the authorities with material for dealing with the question from the halakhic standpoint. I have no doubt that under Jewish law had the question become actual, patent-rights would have been protected in some measure, at least by special enactments supported by certain Talmudic analogies (Isaac Herzog, The Main Institutions of Jewish Law 1: The Law of Property 132 (1939)).

 

            Indeed, the Sages labored and found rich, interesting sources and precedents. Rabbi Shimon Shkop (Head of the Grodno Yeshiva who lived in Europe and died in 1939), at the beginning of his commentary to the Talmud tractate Bava Kamma – which relates to damages – referred to one of the heads of damages in the Talmud, the pit. The question is on what grounds can a person who dug a pit in the public domain be found liable for the injuries of a person who was injured thereby. At first glance it would appear that the person did not cause harm by his body or property, since the pit is located in the public domain. Rabbi Shkop explains as follows:

 

And in the case of a pit, the Torah held him liable for the injury caused by his harmful thing, and that the pit is his is due to the digging and the opening. That is, he prepared the harmful thing and he is therefore called its owner, similar to that which concerns a person’s right: it is accepted under the laws of the Torah and the laws of the nations that whoever invents something new in the world is the owner of all rights thereto – similarly, the Torah called a person who prepares a harmful thing the owner of the pit and the owner of the fire, and held the owner of the harmful thing liable (Novellas of Rabbi Shimon Shkop, Bava Kamma 1. See also LCA 7337/12 Amir Cohen v. John Deere Water Ltd., para. 6 of my opinion (March 12, 2013)).

 

The principle that emerges is that "whoever invents something new in the world is its owner". This is the linkage between the owner of the invention and his invention. Rabbi Shkop repeats this principle elsewhere, when he addresses the possibility of gaining ownership by thought and invention: "Also a thing that was created by a person's wisdom belongs to such person… who also was awarded with the instrument of thought, to benefit from what he shall invent therewith… and since he has sold him his wisdom, meaning his body and limbs that invented this thing in the world – then immediately when such thing enters the world it belongs to the buyer (Novellas of Rabbi Shimon Shkop, Gittin part 4; see Rafi Reches and Michael Wigoda, Protecting Copyrights, Patents and Inventions in the Jewish Law, Ministry of Justice (2010)).

 

Rabbi Herzog was of the opinion that one can already find an anchor to the rights in a new invention – and in fact, a patent – in the Babylonian Talmud and its commentaries. One of the issues addresses a person who wants to cast a fishing net near a place where a trap had already been set by another person. It was ruled that he must distance it from that of the other: "Fishing nets must be kept away from the fish the full length of the fish's swim. And how much? Rabbah son of R. Huna: Up to a parasang?' (Bava Batra 21b). The Talmud commentators discussed the basis for prohibiting the competing fisherman from laying down his trap – since the fish have not yet been caught by the first fisherman, and therefore, prima facie, they have not yet become his property. One of the explanations is presented by the Tosafist Rabeinu Meir of Ramerupt (Ashkenaz, 11th century).

 

Rabbi Meir, Rabeinu Tam’s father, says that this is a dead fish, since the fishermen would place a dead fish in their nets so the fish would gather around such fish. And since he was the first to cast his net, and due to his act the fish were gathering around – if the other were to cast his net, it would certainly be as though he was stealing from him (Kiddushin 59a).

 

According to Rabeinu Meir, the fact that casting the net requires prior thought and action entitles the person who cast the net to a proprietary right in the anticipated profit even though this profit has not yet been realized and the fish have not yet entered his possession. According to Rabbi Herzog, one can view this source as an anchor for the protection of patents: "Here at last we have some approach to the idea of patent-protection" (page 131).

 

Rabbi Asher Weiss (a contemporary Jerusalem scholar) also ruled on the matter of the halakhic validity of a registered patent: "It is my humble opinion that it is a simple position that a person also has a monetary right in the fruit of his spirit and creation, and what he conceived is not less than what he acquired, and just as the fruit of the palm belong to the owner of the palm, even though he did not acquire them through the routes of title, so the fruit of his spirit belong to him and there is no need for title." He therefore ruled as a matter of Halakha that "[in] a registered patent, it is clear that according to the law of the Torah, others are prohibited from doing as is set forth therein (Rabbi Asher Weiss, Darkhei Horaa 4, 100 (5766)).

 

21.       However, alongside the recognition of the proprietary, or quasi-proprietary right that a person has in his inventions, we find resonances in Jewish law to the fact that this right is not unlimited and that it must be balanced with the public interest of having knowledge resources available to all. The Mishna tractate Yoma gives a list of craftsman who did not agree to reveal the secret of their craft to others, while denouncing this:

 

And these they mentioned to their shame: those of the House of Garmu [who] did not want to teach about the act of the shewbread; those of the House of Avtinas [who] did not want to teach about the act of the incense; Hygros, son of Levi, knew a chapter in song but did not want to teach; Ben Kamtzar did not want teach the art of writing; … It was said about the above, the name of the wicked shall rot (mYoma 3, 11).

 

The Babylonian Talmud explains why the Sages required that the craftsmen reveal their secrets: "When the Sages heard that, they said: whatever God created was created in His honor. As it was said: 'Anyone that is called by my name, I have created in my honor" (TB Yoma, 38a). This is a religious approach that emphasizes the fact that the natural – material and corporeal – resources are universal because they were created by God. It is inappropriate to attribute them exclusively to any specific entity. This is the case with respect to all natural resources, and a fortiori, with respect to a resource that has the potential to heal. As told in the Babylonian Talmud in tractate Avoda Zara:

 

Rabbi Yochanan suffered from the tzefidna disease. Hhe went to a Roman matron who prepared a remedy on Thursday and on the eve of the Sabbath. Rabbi Yochanan asked her: What will I do on the Sabbath? She responded: You do not need a remedy on the Sabbath. He asked her: What will I do if I do, nevertheless, need a remedy? She responded: Swear to me that you will not reveal the recipe and I will give it to you. Rabbi Yochanan swore "to the gods of Israel that I will not reveal". Rabbi Yochanan left and gave a public sermon in which he revealed how the remedy is prepared.

 

Even though Rabbi Yochanan swore to the Roman matron that he would not reveal her secret, Rabbi Yochanan broke his vow due to the public interest in healing, and revealed the Roman matron's healing secret to the entire public (in the Talmud there is reference to the question whether this amounts to desecrating the name of God).

 

22.       It should be noted that we are dealing with patent laws. Even according to Israeli law, patent laws are characterized by their application to an invention "that is a process in any technological field, that is new, useful, can be used in industry and constitutes inventive progress" (sec. 3 of the Law). From the Jewish law sources it emerges that the justification for protecting the patent derives from the creation. In this sense, there were those who said that just as the works of a person's hands belong to him, so do the inventions of his imagination and the implementation thereof. According to this approach, a creation – either of the hand or of the head – entitles a status of "ownership" with respect to the invention and its fruits.

 

An example of an invention in the pharmaceutical field was cited. Rabbi Herzog emphasized that our Sages did look kindly on a person's wish to keep the invention to himself forever. This is due to the recognition that what is concerned is an invention that can save lives (ibid, page 128). The tension that was presented in the above analysis is expressed in the fact that the craftsman has a right to receive money, but is not entitled to keep the patent secret to himself, certainly not forever. One can say that patent rights do not override patients' rights (in the broad context, see Nimukei Yosef Al Harosh, Yevamoth 12a; Ritva (Rabbi Yom Tov Ben Avraham Asevilli) on the Babylonian Talmud, ibid; Rabbi Herzog's position, ibid, page 129).

 

It is interesting to note that the adjudicators that were cited – Rabbi Shkop, Rabbi Herzog and Rabbi Weiss – lived between the 19th and 21st centuries. During this period the field of patents has become much more sophisticated. The words of Prof. Edward Fram, an expert on history, halakha and its development, are relevant in the case at hand: “like rabbis in all periods, …rabbis had to address the needs of the marketplace in order to keep the halakhah relevant and maintain the integrity of Jewish life" (Edward Fram, Ideals Face Reality – Jewish Law and Life in Poland 162 (1997)). Indeed, the economic question directly relates to the Jewish community in general, and in the State of Israel in particular. Integrity is maintained by the fact that the Rabbis based their conclusions on the principles of halakha and on Talmudic sources. The theoretical foundation is not, essentially, economic, but rather the recognition of the person's abilities to create and the link between him and his creation, while considering the needs of society. It appears that the religious foundation is "and you shall walk in His ways" (Deuteronomy 28, 9) – What He (God) creates – you (man) also create. The justification for legal recognition is thus perceived as both moral and practical.

 

23.       We now proceed from a broad perspective to a narrower one focusing on American law with respect to the specific arrangement of extension orders, their background and the method of their calculation. The basic rule in the United States is also that a patent's protection is for twenty years from the date the application for the patent registration was filed (see 35 U.S.C § 154(a)(2)). However, an exception to this rule was provided in the form of the possibility of granting an extension order ("Patent Term Extension", see The Drug Price Competition and Patent Term Restoration Act of 1984, Public Law 98-417, 98 Stat. 1585 (codified at 21 U.S.C. § 355(b), (j), (l); 35 U.S.C. §§ 156, 271, 282) (hereinafter: the Hatch-Waxman Act).

 

The rationale behind this exception is similar to the process that led to the corresponding Israeli arrangement. The Hatch-Waxman Act was enacted against two backgrounds: On the one hand the Act addresses the problem of the generic industry. As in Israel, the American industry was also facing difficulty in competing in the free marketplace with other pharmaceutical companies immediately after the patent expiration since, according to the rulings of the courts at that time, it was not possible to perform various actions required by the regulator to license a patent-based product as long as the patent had not expired:

 

The second distortion occurred at the other end of the patent term. In 1984, the Court of Appeals for the Federal Circuit decided that the manufacture, use, or sale of a patented invention during the term of the patent constituted an act of infringement… even if it was for the sole purpose of conducting tests and developing information necessary to apply for regulatory approval... Since that activity could not be commenced by those who planned to compete with the patentee until expiration of the entire patent term, the patentee's de facto monopoly would continue for an often substantial period until regulatory approval was obtained" (Eli Lilly & Co. v. Medtronic Inc., 496 U.S. 661, 670 (1990) (hereinafter: the Eli Lilly case).

 

This problem was resolved by sec. 35 U.S.C § 271(e)(1) of the law that provides as follows:

 

It shall not be an act of infringement to make, use… or sale… solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological product"

 

On the other hand, the arrangement of extension orders was provided for patents for which the patent owner is required, as a condition for marketing, to perform various licensing actions that take a significant amount of time (see 35 U.S.C. § 156). In the United States, as in Israel, both of these arrangements were perceived as different sides of the same coin. On the one hand, the need to open the market to competition at the time of the patent expiration; on the other hand, compensating the patent owner for "lost" time”. A fine example of the tight connection between the two arrangements can be found in the Eli Lilly case. In that case, which was heard by the Supreme Court, a question emerged whether a certain medical device was covered by the section that allows performing licensing actions even before the patent's expiration. The federal court’s answer was negative, however this ruling was reversed by the Supreme Court in light of purposive interpretation of the law. The ruling was based on two facts. First, the device at issue was required to undergo various examinations as a condition for marketing. Second, it was possible to receive an extension order in that field. The Court held that as a rule, and since these are related arrangements, it would not be possible to benefit from both of them. If it is possible to receive an extension order, the competitors would be able to take actions toward licensing during the period of the patent, and vice versa, in light of the tight linkage between the two arrangements:

 

It seems most implausible to us that Congress, being demonstrably aware of the dual distorting effects of regulatory approval requirements in this entire area… - the disadvantage at the beginning of the term producing a more or less corresponding advantage at the end of the term - should choose to address both those distortions only for drug products; and for other products named in 201 should enact provisions which not only leave in place an anticompetitive restriction at the end of the monopoly term but simultaneously expand the monopoly term itself, thereby not only failing to eliminate but positively aggravating distortion of the 17-year patent protection. It would take strong evidence to persuade us that this is what Congress wrought, and there is no such evidence here (Eli Lilly, p. 672).

 

As can be seen, it is one earth. The difficulties in Israel and the United States are common, as are the solutions – both for the generic industry and for the ethical industry.

 

To conclude, we will turn our glance towards the method of calculating the period of the extension order in the United States. As noted, in Israel there is a distinction between a situation in which the licensing of the patent was requested only in Israel, and a situation in which licensing was requested in an additional Recognized State. In the first case, the period of the order is the time the licensing procedure lasted, from the date the application was filed until the license was granted. In the latter case, there is a linkage to the shortest extension order that was granted in one of the Recognized States. The calculation mechanism in the United States is also based on the period of the licensing process, although in a more complex manner. It is based on the duration of the testing phase and the approval phase. The testing phase is the period from the date when approval for experimenting on humans was received and until the date the new drug application form was filed. The approval phase starts at this stage and continues until the final approval of the pharmaceutical (see 35 U.S.C. § 156). There are a number of scenarios and calculations, and there is no need to specify all of them in the framework of this judgment. Suffice to say that the main rule is to grant an order for the period of half of the testing phase together with the entire approval phase (ibid). As in Israel, there are various restrictions that apply to the length of this period, and particularly that it be for no more than five years in total, and no more than 14 years from the day the marketing approval is granted.

 

This is the current calculation in principle, without addressing all of the legislative changes that have also occurred in the United States. One can now understand the legislature’s decision to view equating the period of the Israeli order with the U.S. order as appropriately compensating the patent owner. This, as noted, is the situation in Merck's specific case. This is what we have said in light of the global aspect of the use of pharmaceuticals. There are countries that legislate their laws on this matter with one eye looking inward and one eye examining what is occurring in other countries. That is the demand of the economic reality in striving to give proper weight to all of the factors involved in what occurs in this field, including the individual.

 

Conclusion

 

24.       The transitional provisions of the Israeli law do not amount to retroactive infringement. Even if the shortening of the period of the extension infringes a constitutional right, it clearly passes constitutional review under sec. 8 of the Basic Law. Finally, there are solid grounds for the conclusion that the infringement does not reach the constitutional threshold. As was explained above, not every infringement is necessarily a constitutional infringement. The legislature gave and the legislature took back its share. I am not saying that this conduct, or such legislation, is immune to constitutional review. However, it must be grounded. In the example of the third-instance appeal by right that was discussed above, had the legislature provided that there is a right of appeal in the Tel Aviv district but not in the Northern district, it could have been argued that we were concerned with a constitutional infringement. This is certainly so in the case of wrongful discrimination.

 

As noted, in this case the purpose is to grant appropriate compensation to the patent owner, in the form of a period of protection that exceeds twenty years, but in a manner that does not excessively prejudice other important interests and values, such as opening the market to competition. Viewed as a whole, the actual period of protection that Merck was awarded is longer than that to which it was entitled when the patent was registered. Not a hermetic twenty-year unit, but rather a longer cumulative period of time that includes the period of the extension order. The shortening of the extension order relies on a calculated, considerate policy of the legislature. This is true with respect to the ethical companies. This is true with respect to the generic companies. This is true with respect to the public. There is a proper dynamic between the situation in Israel and in the overseas markets.

 

25.       It is possible that had LCA 8263/15 stood on its own, it would not have been appropriate to grant leave to appeal. However, due to the material connection between the two applications, and once it was decided to hear LCA 8127/15 on its merits, I would recommend to my colleagues that leave to appeal be granted in both of the cases. I would further recommend that we hear LCA 8263/15 as though leave had been granted and an appeal filed pursuant thereto, and to deny the appeal on its merits, while accepting the appeal in LCA 8127/15 as follows:

 

In the dispute in LCA 8127/15 between the District Court and the Registrar, my opinion is as the opinion of the Registrar, that the extension order that was granted in the United States is the relevant reference patent extension order in the circumstances of the matter. Accordingly, I would recommend to my colleagues that we rule that the period of the extension order that was granted to Merck has expired. In the circumstances of the matter, Applicants 1 and 2 shall bear the Manufacturers Associations' expenses and legal fees in the amount of NIS 125,000.

 

Justice Y. Danziger

 

I concur.

 

 

Justice U. Shoham

 

I concur with the comprehensive, thorough opinion of my colleague Justice N. Hendel, and I agree to granting the appeal in LCA 8127/15 such that the period of the extension order that had been granted to Merck has expired.

                                                                                     

 

Decided in accordance with the opinion of Justice N. Hendel.

 

Given this 9th  day of Sivan 5776 (June 15, 2016).

 

 

Hussein v. Cohen

Case/docket number: 
HCJ 5931/06
Date Decided: 
Wednesday, April 15, 2015
Decision Type: 
Original
Abstract: 

Facts: The appeals focused upon the question of whether properties in East Jerusalem that belong to residents of Judea and Samaria are deemed “absentee property” as defined under the Absentees’ Property Law.

 

Held: In dismissing the appeals, the Supreme Court held that the Absentees’ Property Law applies to properties in East Jerusalem whose owners, beneficiaries or holders are residents of Judea and Samaria. However, in light of the significant difficulties attendant to implementing the Law in accordance with its language, in general, the authorities should refrain from exercising their statutory authority in regard to such properties except in the most exceptional circumstances, and that even then, only subject to the pre-approval of the Attorney General and a decision by the Government or a ministerial committee appointed by it. The Court’s holdings in this judgment will apply prospectively, and only where no statutory steps have been implemented in regard to the said properties.  The holdings of this judgment lead to the conclusion that the specific properties that are the subjects of the appeals are absentees’ property.  

Voting Justices: 
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Full text of the opinion: 

In the Supreme Court

HCJ 5931/06

Sitting as a Court of Civil Appeals

HCJ 2038/09

 

 

Before:

His Honor, President (ret.) A. Grunis

Her Honor, President M. Naor

His Honor, Deputy President E. Rubinstein

His Honor, Justice S. Joubran

Her Honor, Justice E. Hayut

His Honor, Justice H. Melcer

His Honor, Justice Y. Danziger

 

 

 

 

The Appellants

in CA 5931/06:

1. Daoud Hattab Hussein

2. Alian Issa Azat

3. Saba Naji Suleiman Alarja

4. Jamal Naji Suleiman Alarja

5. Majed Naji Suleiman Alarja

 

 

 

The Appellants

in CA 2038/09:

1. Dr. Walid Abd al-Hadi Ayad

2. Dr. Fatma Ayad

3. Mahmoud Abd al-Hadi Iyad

4. Haled Abd al-Hadi Ayad

5. Hiam Ayad

6. Ali Abd al-Hadi Ayad

7. Signe Breivik

8. Safa Abd al-Hadi Ayad

9. Hamad Ahmed Ayad

10. Fatma Abd al-Hadi Ayad

11. Hassan Salameh Ayad

12. Dr Higad Abd al-Hadi Ayad

13. Dr Fayez Ibrahim Abd al-Majid Hamad

 

 

 

V.

 

 

The Respondents in CA 5931/06:

1. Shaul Cohen

2. Adv. Ami Fulman in his Capacity as Receiver

 

3. Dan Levitt

 

4. Robert Fleischer

 

5. Yaron Meidan

 

6. Shlomo Ohana

 

7. Lilian Ohana

 

8. Moshe Ben Zion Mizrahi

 

9. The Head of the Jerusalem Land Registry

 

10. The Custodian of Absentees' Property

 

 

The Respondents in CA 2038/09:

1. The Custodian of Absentees' Property

2. The State of Israel – The Ministry Of Defence

 

 

CA 5931/06: Appeal against the Jerusalem District Court's judgment of May 9, 2006 in CF 6044/04, awarded by The HonorableJudge R. Carmel

 

 

 

CA 2038/09: Appeal against the Jerusalem District Court's judgment of October 2, 2008 in CF 6161/04, awarded by The Honorable Judge I. Inbar

     

 

 

On behalf of the Appellants in CA 5931/06 and CA 2038/09

Adv. Avigdor Feldman; Adv. Miri Hart; Adv. Shlomo Lecker; Adv. Ramsey Ketilat

 

 

On behalf of the First Respondent in CA 5931/06:

Adv. Haim Novogrotzki

 

 

On behalf of the Second Respondent in CA 5931/06

Adv. Ami Fulman

 

 

On behalf of the Third to Fifth Respondents in CA 5931/06:

Adv. A. Baron; Adv. Shirley Fleischer-Geva

 

 

On behalf of the Sixth and Seventh Respondents in CA 5931/06:

Adv. David Ohana

 

 

On behalf of the Eighth Respondent in CA 5931/06:

Adv. Eitan Geva

 

 

On behalf of the Ninth and Tenth Respondents in CA 5931/06, the Respondents in CA 2038/09 and the Attorney General:

Dr. Haya Zandberg, Adv.; Adv. Moshe Golan

 

 

Facts: The appeals focused upon the question of whether properties in East Jerusalem that belong to residents of Judea and Samaria are deemed “absentee property” as defined under the Absentees’ Property Law.

 

Held: In dismissing the appeals, the Supreme Court held that the Absentees’ Property Law applies to properties in East Jerusalem whose owners, beneficiaries or holders are residents of Judea and Samaria. However, in light of the significant difficulties attendant to implementing the Law in accordance with its language, in general, the authorities should refrain from exercising their statutory authority in regard to such properties except in the most exceptional circumstances, and that even then, only subject to the pre-approval of the Attorney General and a decision by the Government or a ministerial committee appointed by it. The Court’s holdings in this judgment will apply prospectively, and only where no statutory steps have been implemented in regard to the said properties.  The holdings of this judgment lead to the conclusion that the specific properties that are the subjects of the appeals are absentees’ property.  

 

 

JUDGMENT

 

President (ret.) A. Grunis

 

1.         The appeals before the Court focus on the question of whether properties in East Jerusalem, the rights in which are owned by residents of Judea and Samaria, constitute "absentees'" property within the meaning of the Absentees' Property Law, 5710-1950 (hereinafter referred to as "the Absentees' Property Law" or "the Law").

 

            This question arose in four cases that were heard jointly (CA 5931/06, CA 2250/06, CA 6580/07 and CA 2038/09). This Court held a considerable number of hearings in the appeals. In the course of hearing the appeals, various attempts were made to resolve the disputes between the parties. In two of the appeals, the need for the Court's decision did indeed become unnecessary. Thus, on February 13, 2014, the appeal in CA 2250/06 (Custodian of Absentees' Property v. Dakak Noha) was withdrawn after the parties reached a settlement agreement that was granted the force of a judgment. The appeal in CA 6580/07 (Custodian of Absentees' Property v. Estate of Abu Zaharaya) was dismissed on September 10, 2013, after the appellant gave notice that he was withdrawing the appeal. The time has now come to decide the remaining two appeals – CA 2038/09 and CA 5931/06.

 

The Background and Chain of Events

 

2.         The appeals before us concern properties in East Jerusalem that were determined to be “absentees’ property”, and whose owners were residents of Judea and Samaria.

 

CA 5931/06

 

3.         CA 5931/06 concerns  some five acres of land located in Beit Safafa on which fruit trees are planted (parcel 34 in block 30277) (hereinafter referred to as "Property 1"). Following to the Six Day War, the property was included in the territory to which the State of Israel extended its jurisdiction  on June 28, 1967 under the Law and Administration Order (No. 1), 5727-1967 (hereinafter referred to as "Order No. 1"). One half of the rights in the property were registered in the Jordanian Land Registry in the name of a resident of Beit Jala who sold them at the beginning of the 1970s to Jewish Israeli nationals. The rights of the Jewish purchasers were recorded in the Land Registry in 1972 and 1974. The remaining half of the rights in the property belonged to Appellants 3-5, who are residents of Beit Jala, and members of their family (hereinafter referred to as "the Alarja family"). In 1973, the majority of the Alarja family's rights in the property were sold (excluding the rights of one of its members, who owned one fourteenth of the parcel and is not party to this appeal). At the end of a chain of transactions, the rights came into the possession of Appellants 1 and 2, who are residents of Beit Safafa. Their applications to register the property in the Land Registry were declined on the ground that they had to apply to the Custodian of Absentees' Property (hereinafter referred to as "the Custodian"). In 1996, the Custodian informed them that he would not release the property.

 

4.         The Appellants filed a claim for declaratory relief in the Jerusalem District Court, to the effect that Property 1 was not absentees' property, or in the alternative, that the Custodian was obliged to release it (CF 6044/04,  Judge R. Carmel). The claim was dismissed in a judgment given on May 9, 2006, which held that the property was absentees' property. The court held that the properties in East Jerusalem of residents of Judea and Samaria are absentees' property despite the fact that the absenteeism is "technical". Hence, whether the owners of Property 1 resided in Egypt at the relevant time (as pleaded in respect of some members of the Alarja family) or were residents of Beit Jala, they were "absentees". Consequently, the rights in Property 1 were vested in the Custodian, and it was held that any disposition made in respect of it by Appellants 3-5 after June 28, 1967 (when it became "absentees' property") was invalid. The court dismissed the Appellants' plea of discrimination in comparison with the Jewish purchasers, whose rights in the property were registered in their name. In the court's opinion, the very registration of the rights did not mean that the registration was lawful, and the same could not constitute a "lever for the making of another mistake by another unlawful registration" (para. 13 of the judgment). In addition, the District Court disagreed with the judgment in OM (Jerusalem District) 3080/04 Dakak v. Heirs of Naama Atia Adawi Najar, Deceased (January 23, 2006, The Honorable Judge B. Okon, hereinafter:  the Dakak case), from which it appears that the residents of Judea and Samaria are not "absentees" according to section 1(b)(1)(ii) of the Law. We shall further refer to the Dakak case below (an appeal was filed against the judgment in the Dakak case in CA 2250/06, as noted in para. 1 above). The first appeal herein (CA 5931/06) was filed against the judgment in CF 6044/04.

 

5.         To complete the picture, it should be noted that other legal proceedings have been conducted in respect of Property 1. These were further to the deletion of the Alarja family's rights from the Land Registry in accordance with a judgment awarded in default of defense on the application of the Respondent 1 (CF (Jerusalem Magistrates) 21351/95, Judge I. Zur, partial judgment of January 31, 1996). The rights ofRespondent 1 in the property were then sold to Respondents 3-7. The Appellants filed lawsuits to set aside the said judgment and for declaratory relief according to which they are the owners of the property (CF (Jerusalem Magistrates) 10386/96, Judge. R. Shamia); CF (Jerusalem District) 1264/97, Judge B. Okon, the claim was struck out on March 23, 2003). The Custodian, for his part, filed a claim for declaratory relief to the effect that the Alarja family's rights in Property 1 constituted absentees' property, and that the transactions made in regard to its part of the property were void (CF (Jerusalem District) 1504/96,  Judge A. Procaccia). The claim was dismissed further to a settlement that was formulated between the Custodian and Respondents 1-7, which was approved by the court on March 5, 2002). It should be noted that in the latter proceedings the Appellants originally joined the position of the Custodian, including the plea that the property was absentees' property, but they then withdrew that plea with the court's approval. We would further add that in the period during which the proceedings have been heard, Appellants 1, 3 and 4 have unfortunately passed away.

 

CA 2038/09

 

6.         CA 2038/09 concerns 0.84 acres of land in Abu Dis (hereinafter referred to as "Property 2"), on which there is a residential building which, in 1964, was converted to a hotel known as the Cliff Hotel (hereinafter referred to as "the hotel"). The property is in the territory to which the State of Israel's jurisdiction and administration were extended in 1967. Its original owner (hereinafter referred to as "the deceased") was a resident of Abu Dis and a national of Jordan. The Appellants own the rights in the property by virtue of inheritance and law. On July 24, 2003, the Custodian issued an absentee certificate under section 30 of the Law in respect of Property 2. Further thereto, the Appellants filed a claim in the Jerusalem District Court for the award of declaratory relief to the effect that the property was not "absentees' property". In the alternative, they applied for the property to be released or, in the further alternative, they asked that the absentee certificate issued in respect of it be declared void (CF 6161/04, Judge I. Inbar). It should be noted that the parties were originally at issue as regards the property's location in Israel, but in the course of the proceedings they agreed that the property has been in the area of Israel since 1967. The claim was dismissed on October 2, 2008. It was held that, at the determining time, the deceased was resident in Judea and Samaria, namely outside the area of Israel, about 300 meters from the hotel, and he was not a resident of East Jerusalem. Such being the case, it was held that the property was "absentees' property", both according to section 1(b)(1)(i) of the Law (because the deceased was a national of Jordan) and by virtue of section 1(b)(1)(ii) of the Law (as he was a resident of Judea and Samaria) (the section is quoted in para. 13 below). The court disagreed with the interpretation laid down in Dakak, according to which the Law does not apply to the properties in East Jerusalem of the residents of Judea and Samaria. In the court’s view, weight should be given to the difficulties involved in the authority’s treating the residents of Judea and Samaria as "absentees" for the purpose of implementing the Law, but not in regard to the Law’s incidence. In addition, it was noted that the pleas concerning the modus operandi of the Custodian under the Law are within the jurisdiction of the High Court of Justice rather than the District Court. Furthermore, the Appellants' plea that the Custodian was precluded from exercising his powers because of a representation that the State had made to the effect that the property was not in Israel, which led to a change of their position to their detriment, was dismissed. The second appeal before us (CA 2038/09) is brought against the judgment in CF 6161/04.

 

7.         It should incidentally be noted that since 2003 there have been various developments in respect to Property 2 due to its proximity to the security fence. In that connection, part of the property was demolished with the consent of the parties, and the security forces then seized possession of it by virtue of the Emergency Land Requisition (Regulation) Law, 5710-1949. In 2013, part of the land was expropriated for security purposes by virtue of the Land (Acquisition for Public Purposes) Ordinance 1943 (hereinafter: "the Acquisition Ordinance"). These matters, which are beyond the scope of these proceedings, were tried in various different legal proceedings (see HCJ 1622/13, judgment of February 12, 2014, Deputy President M. Naor, and Justices E. Rubinstein and D. Barak-Erez); HCJ 1190/14, judgment of March 18, 2014, Deputy President M. Naor, and Justices E. Rubinstein and Y. Danziger; and ALA 6895/04,judgment of November 16, 2004 on the application for leave to appeal against the District Court's judgment in CF 6161/04 on an application for a provisional injunction)).

 

8.         Incidental to the proceedings before us, on July 18, 2013, the Special Committee under section 29 of the Law (hereinafter: "the Special Committee") deliberated on the release of the two properties involved in the appeals. As regards Property 1 (the property involved in CA 5931/06), the Respondents, represented by the State Attorney (hereinafter: "the Respondents"), stated that the Custodian was no longer in possession of the land, but only the proceeds therefrom, because the property had been purchased by third parties "in market overt conditions" (para. 31(a) of the Respondents' application of October 5, 2014). The Special Committee recommended the release of those proceeds to whichever of the Appellants were residents of Judea and Samaria and still living. As regards the Appellants who had died while the proceedings were being heard, supplementary particulars were requested, and as regards the other members of the Alarja family it was recommended not to release the proceeds of the property. As regards Property 2 (the property involved in CA 2038/09), the Special Committee recommended the release in specie of the part that had not been requisitioned for the construction of the security fence, and to release the proceeds for the part requisitioned only to the owners who are residents of Judea and Samaria, who are the ones who had held the property continuously until it had been requisitioned. Under the circumstances, the Respondents argued that the appeals had become theoretical and they moved for their dismissal. The Appellants, for their part, stated that they insisted on the appeals. According to them, if their position on the basic question concerning the application of the Law in their case were accepted, then it would not have been appropriate from the outset to view the properties as "absentees' property", and the Special Committee's decision was ultra vires. In addition, the Appellants in CA 2038/09 pleaded that in light of the security forces' seizure of Property 2 for the construction of the security fence, the decision concerning the release of the property had no real meaning. In our decision of December 28, 2014 we dismissed the application to dismiss the appeals.

 

The Parties' Arguments

 

9.         In both the appeals before us, the Appellants assert that it was not appropriate to view the properties concerned as "absentees' property". For the sake of convenience, we shall cite their basic arguments with regard to the application of the Absentees' Property Law together. We shall then separately consider their individual arguments in respect of the properties in dispute. In principle, the Appellants assert that the Law should not be applied to property in East Jerusalem whose owners, beneficiaries or holders (hereinafter referred to as "the owners of the rights") are residents of Judea and Samaria. According to them, those properties merely became "absentees' property" because of the unilateral extension of the law of the State of Israel to the areas where they are located. This occurred without the owners moving from the spot, and while they were subject to the authority and control of Israel near their property. According to them, the purpose of the Law was to contend with the unique circumstances that prevailed at the time of the State's establishment, which are now different, and the legislature could not have envisaged the reality created further to the Six Day War. According to them, the residents of Judea and Samaria have nothing at all to do with the "absentees" at whom the Law was aimed. The Appellants state that the various attorneys general over the years were also cognizant of these difficulties.

 

            They argue that the Law should, therefore, be interpreted against the background of its purpose and the historical context in which it was enacted, in the spirit of the Basic Laws, and in recognition of the need to protect their property, such that its provisions will not apply to the said properties. They propose a "pragmatic" interpretation of section 1(b)(1)(ii) of the Law, by  which the properties are prima facie considered absentees' property (the section is quoted in para. 13 below). This section deals with anyone who at any time during the period prescribed in the Law was "in any part of Palestine[1] outside the area of Israel". According to the Appellants, "outside the area of Israel" should be read as "the area outside Israeli control". That is to say that "the area of Israel" should not be viewed as relating only to the area in which the law, jurisdiction and administration of Israel has been applied. In fact, their argument is that since Judea and Samaria have been under the effective control of the State of Israel since 1967, it should not be regarded as "outside the area of Israel" for the purpose of the Law, and section 1(b)(1)(ii) of the Law therefore does not apply to the residents of Judea and Samaria. In addition, the Appellants propose adopting the interpretation that the District Court applied in Dakak, which we shall discuss further (in para. 26 below). The Appellants also propose viewing "the area of Israel" within the meaning of section 1(b)(1)(ii) of the Law solely as the area in which the law of the State of Israel applied at the time of the Law's enactment. According to the argument, that area does not include new territory over which the law, jurisdiction and administration of Israel have been applied or which is held by Israel, unless the provisions of the Law have been expressly applied to the additional territory. In the Appellants' opinion, the interpretations propounded are not contrary to section 3 of the Legal and Administrative Matters (Regulation) Law [Consolidated Version], 5730-1970 (hereinafter referred to as "the Legal Regulation Law"), from which it emerges that the properties of East Jerusalem residents that are located in East Jerusalem are not to be regarded as "absentees' property". (Section 3(a) of the said Law provides that "a person who, on the day of the coming into force of an application of law order, is in the area of application of the order and a resident thereof shall not, from that day, be regarded as an absentee within the meaning of the Absentees' Property Law, 5710-1950, in respect of property situated in that area".) According to them, the said section deals only with the residents of East Jerusalem, where Israeli law has been applied, and a negative arrangement is not to be inferred therefrom in respect of residents who are under Israeli control in Judea and Samaria. They believe that there is no foundation for the distinction between residents of Judea and Samaria, who are under Israeli control, and the residents of East Jerusalem. Alongside this, the Appellants plead that the Custodian is interpreting the broad provisions of the Law in a discriminatory and degrading way. Thus, for example, according to them, on a strict interpretation of the Law, Jewish residents of Judea and Samaria and members of the security forces who are staying there are also "absentees", but the Law is only applied to Arab residents of Judea and Samaria.

 

10.       The Appellants assert that applying the interpretation proposed leads to the conclusion that the properties involved in the appeals are not absentees' property. The Appellants in CA 5931/06 argue that the refusal to register their rights in Property 1 in the Land Registry, while the rights of the Jewish purchasers have been registered, amounts to discrimination. Moreover, they make arguments in respect of the conduct of the Custodian in their case, including in respect of the difference in his attitude toward them, compared with his attitude toward the Jewish purchasers. Consequently, they ask that we find that Property 1 is not absentees' property, or alternatively, that we order its release under section 28 of the Law, if it is indeed held that absentees' property is involved. In any event, they explain that if it is held that the property is not absentees' property, it will be necessary to conduct a factual enquiry with regard to the litigants' title thereto. The Appellants in CA 2038/09 plead that Property 2 was requisitioned contrary to the Attorney General's directives in  this regard. In addition, they wonder why it was necessary to make use of "such a Draconian and improper law", when he could have satisfied himself with the issuing of a seizure order for security purposes, the duration and purposes of which are limited, as was indeed later done (para. 29 of the summations of January 26, 2010). Moreover, they make various different arguments concerning the way in which the property was requisitioned and about the real purpose of the move. In that connection they plead laches and the Respondents' failure to act in respect of the property because of the representation that they made, according to which the property was in Judea and Samaria rather than Israel, which led to a detrimental change in the position of the Appellants in CA 2038/09. They also complain of the determination that the District Court is not competent to treat of the way in which the Law is implemented. In view of all the foregoing, they ask that we quash the requisition of Property 2 by virtue of the Law, and return it to them.

 

11.       The Respondents' position is that the Law applies to properties in East Jerusalem of the residents of Judea and Samaria. According to them, "area of Israel", in the sense of the Law, relates only to territory to which Israeli law has been applied. They warn against the serious consequences involved in adopting the interpretive approach advanced by the Appellants, which is similar to the interpretation laid down by the District Court in Dakak. According to them, the term "area of Israel" is mentioned both in respect of the location of the particular property (section 1(b)(1) of the Law) and in respect of the location of the owners of the rights in the property (section 1(b)(1)(ii) of the Law). Hence, the interpretation proposed might lead to properties in Judea and Samaria being regarded as "absentees' property" as well, when their owners are included in one of the other alternatives of section 1(b)(1) of the Law. According to them, the presumption is that this is the position in the case of many of the residents of Judea and Samaria, who were Jordanian nationals. Consequently, they assert that the Appellants' proposal will in any event be of no help to them. In addition, the Respondents object to the proposal to interpret the "area of Israel" as a "photograph" of the situation that existed at the time of the Law's enactment. According to them, there is no basis for that in the Law, and it is contrary to its purpose – to enable the transfer of ownership to the Custodian of any property situated in the area of the State and belonging to an "absentee", to be used for the development of the country. They also mention that the Law was enacted when the final boundaries of the State had not yet been formulated (and in fact the provision of section 1(b)(1)(ii) of the Law already appeared in the Absentees' Property Emergency Regulations, 5709-1948 of December 12, 1948 (hereinafter referred to as "the Emergency Regulations") which applied during the War of Independence and preceded the Law). Alongside this, the Respondents argue that a restrictive policy should be adopted when implementing the Law. According to them, the powers in the Law should not be exercised in respect of the properties at issue, unless the Attorney General's approval is first obtained. They contend that over the years a restrictive policy has indeed been adopted in the implementation of the Law, in accordance with the position of the Attorneys General. According to the Respondents, looking to the future, this modus operandi will lead to results similar to those that will be obtained as a result of finding that the Law does not apply in the instant cases. However, adopting it, as distinct from finding that the Law does not apply, is essentially of significance in respect of the past. This is because a finding that the Law does not apply in these cases means that all the acts that have been done in respect of properties of that type are void, with the substantial difficulties involved therein that they mention. In addition, the Respondents reject the Appellants' argument of discrimination in the implementation of the Law. According to them, the Custodian adopts a standard policy in respect of everyone lawfully moving outside the area of Israel, regardless of his ethnic origin. Thus, for example, the Law is not implemented in respect of State nationals, be they Jews or Arabs, even where the strict implementation of its provisions would necessitate an application to release their property.

 

            As regards the properties in dispute, the Respondents argue that, under the circumstances, the Special Committee's decision provides a proper answer to the Appellants. The Respondents reject the pleas of discrimination made in CA 5931/06 and emphasize that the improper registration in the past of the rights of Jewish purchasers does not justify similar registration now. According to them, until the 1970s the Custodian used to permit the sale of absentees' property to Israelis in order to facilitate matters for the residents of Judea and Samaria and the Gaza Strip, but that policy has been changed. In addition, they explain why the Custodian has not acted to cancel registration of the transactions made by the Jewish purchasers and they state that they did in the past act against the transfer of rights in Property 1 to the Respondent 1, who is a Jewish national of Israel. In addition, the Respondents plead that ruling on the competing rights in respect of the property involved in CA 5931/06 necessitates the review of factual and legal arguments that were not considered at the trial instance in view of its conclusion that Property 1 is "absentees' property".

 

12.       The other Respondents in CA 5931/06, the Jewish purchasers of the rights in Property 1, join in the Custodian's position on the question of principle with regard to the application of the Law. As regards the interpretation proposed by the Appellants, they state that since the Oslo Accords, effective control of a large proportion of Judea and Samaria is not held by the State of Israel and they argue that the said interpretation would necessitate equating the status of Judea and Samaria's residents with that of Israeli residents in other respects. They emphasize that they acquired the rights in Property 1 in good faith and for consideration, and they comment that the Appellants' domicile has never been established. According to them, the Appellants in CA 5931/06 are undermining the judgments that have been awarded in respect of Property 1, and their conduct in the various proceedings in respect thereof amounts to an abuse of process, inter alia in view of the change in their versions on the question of absenteeism.

 

Discussion and Decision

 

13.       The proceedings before us concern, as aforesaid, the question of whether properties in East Jerusalem, the owners of the rights in which are residents of Judea and Samaria, are "absentees' property" under the Absentees' Property Law. We would immediately emphasize that these proceedings address only such properties and not any other type of property. The point of departure for the discussion is the Absentees' Property Law, and we shall therefore commence by presenting its main provisions. "The portal" to the Law is contained in the definitions of "absentee" and "absentees' property". "Absentees' property" is defined in section 1(e) of the Law as follows:

 

            "'Absentees' property' means property, the legal owner of which, at any time during the period between Kislev 16, 5708 (November 29, 1947) and the day on which a declaration is published under section 9(d) of the Law and Administration Ordinance, 5708-1948, that the state of emergency declared by the Provisional Council of State on Iyar 10, 5708 (May 19, 1948) has ceased to exist, was an absentee or which, at any time as aforesaid, an absentee held or enjoyed, whether by himself or through another; but it does not include movable property held by an absentee and exempt from attachment or seizure under section 3 of the Civil Procedure Ordinance, 1938" [emphasis added – A.G.].

 

            The term "absentee" is defined in section 1(b) of the Law as follows:

 

             "(b) 'Absentee' means –

 

            (1) A person who, at any time during the period between Kislev 16, 5708 (November 29, 1947) and the day on which a declaration is published, under section 9(d) of the Law and Administration Ordinance, 5708-1948 that the state of emergency declared by the Provisional Council of State on Iyar 10, 5708 (May 19, 1948) has ceased to exist, was a legal owner of any property situated in the area of Israel or enjoyed or held it, whether by himself or through another, and who, at any time during the said period –

 

                        (i) was a national or citizen of the Lebanon, Egypt, Syria, Saudi Arabia, Trans-Jordan, Iraq or Yemen, or

 

                        (ii) was in one of these countries or in any part of Palestine outside the area of Israel, or

 

                        (iii) was a Palestinian citizen and left his ordinary place of residence in Palestine

 

                                    (a) for a place outside Palestine before Av 27, 5708 (September 1, 1948); or

 

                                    (b) for a place in Palestine held at the time by forces which sought to prevent the establishment of the State of Israel or which fought against it after its establishment;"

 

            It should be noted as regards the mention of "Trans-Jordan" in sections 1(b)(1)(i) and (ii) that in 1994 the legislature excluded from the application of the Absentees' Property Law certain properties, the owners of the right in which where nationals or citizens of Jordan. This was further to the peace agreement with Jordan (see section 6 of the Implementation of the Peace Agreement between the State of Israel and the Hashemite Kingdom Law, 5755-1995 (hereinafter referred to as "the Peace Agreement with Jordan Law")).

 

14.       According to the Absentees' Property Law, "absentees' property" is vested in the Custodian and the "absentees" lose their rights in it (see CA 8481/05 Lulu v. Custodian of Absentees' Property, para. 7 (February 28, 2007) (: the Lulu case)). The vesting of the property in the Custodian in accordance with the Law is not dependent upon his doing any act, and the rights in it automatically pass to him from the moment that the conditions for its being "absentees' property" are fulfilled (section 4 of the Law; CA 109/87 Makura Farm Ltd v. Hassan, IsrSC 47(5) 1, 29 (1993) (hereinafter: the Makura Farm case); CA 427/71 Faraj v. The State of Israel, IsrSC 27(1) 96, 101 (1972) (hereinafter:  theFara case"), in which it was stated that since automatic vesting is involved, the Custodian might not even be aware that a property has been vested in him; CA 4630/02 The Custodian of Absentees' Property v. Abu Hatum, para. L(3) (September 18, 2007) (hereinafter: the Hatum case; CA 8753/07 The Estate of Atalla Halil Bahij, Deceased v. Custodian of Absentees' Property, para. J (November 16, 2010)). It should be emphasized that in view of the prolonged state of emergency, which is still in force, the application of the Law continues and its operation has not yet ended. That is to say that anyone who has fulfilled or does in future fulfil the conditions for the definition of an "absentee" during the relevant period (namely since 1947 until the future end of the state of emergency) will be regarded as an "absentee" and his property in Israel will be vested in the Custodian. That is unless he has been excluded from the scope of the Law.

 

            The status of the Custodian in respect of absentees' property is the same as was that of the owner of the property, and he is entrusted with its management, care and supervision (section 4 of the Law). To that end, very extensive powers have been granted to him (see HCJ 6/50 Freund v. Supervisor of Absentees' Property, Jerusalem, IsrSC 4 333, 337 (Justice M. Dunkelblum) (1950) (hereinafter: the Freund case); Minutes of Meeting No. 123 of the First Knesset, 950, 956 (March 7, 1950) (hereinafter: the Minutes 123); Menahem Hoffnung, Israel – State Security Versus the Rule of Law, 162 (5761) (Hebrew) (hereinafter: Hoffnung)). In this connection it is provided that the Custodian may incur expenses and make investments in order to safeguard, maintain, repair and develop the property (section 7 of the Law); continue the management of a business on behalf of the absentee (section 8 of the Law, and sections 24 and 25, which concern a partnership of which an absentee is a member and properties of which absentees are co-owners); order the eviction of someone who is occupying the property without any right (section 10 of the Law); order the discontinuance of construction on the property and its demolition (section 11 of the Law). In addition, the Law requires that absentees' property be handed over to the Custodian (section 6 of the Law) and information in respect of it provided (section 21 of the Law). The Law imposes restrictions and prohibitions concerning the doing of various different acts with the property without the Custodian's consent (section 22 of the Law), and it provides that certain acts that have been done in respect of the property are null and void (section 23 of the Law). In addition, certain acts that have been done contrary to the Law are regarded as criminal offences, the penalty for which might amount to up to two years' imprisonment (section 35 of the Law). Although the Law restricts the Custodian's ability to sell and grant a long lease of immovable property that has been vested in him (section 19), it does permit him to transfer it to the Development Authority, subject to certain reservations. In this connection it should be noted that in an agreement that was made on September 29, 1953 between the Custodian and the Development Authority, all the immovable property vested in the Custodian was transferred to the Authority (according to The Government Yearbook 5715, 47). Similarly, the Law limits the liability that the Custodian bears for his acts (sections 16 and 29P of the Law), and lays down lenient evidential arrangements for him (section 30 of the Law; Makura Farm, pp. 12-13). The Law further provides that transactions made between the Custodian and another person in good faith will not be invalidated even if it is established after the fact that the property was not vested property (section 17 of the Law). Alongside this, the Law lays down various mechanisms that are apparently aimed at mitigating its serious effects. Thus, the Custodian has been authorized, in certain circumstances, to "relieve" a person of his "absenteeism" (section 27 of the Law) and to release properties that have been vested in him (sections 28-29 of the Law; for the significance of such release, see CA 263/60 Kleiner v. Director of Estate Tax, IsrSC 14 2521 (1960) (hereinafter: the Kleiner case; for further discussion of several of the decisions that have been given by the Special Committee, including its recommendation for a sweeping release of properties in certain cases, see Haim Zandberg, Israel Land, Zionism and Post-Zionism, 83-83 (2007) (Hebrew)).

 

15.       As we see, the Law grants the Custodian very extensive powers and its overall provisions create a far-reaching arrangement, at the center of which is the expropriation of the rights in absentees' property from the owners and their vesting in the Custodian. This arrangement should be understood against the special circumstances that led to its enactment. At the end of the War of Independence, and in fact even during it, the young State of Israel faced a complex, new reality. This was, inter alia, due to the enlarged area under its control and the mass departure of Arab residents, leaving behind them extensive property, abandoned and vulnerable to intrusion and unruly squatting, on the basis of "might makes right" (see Eyal Benvenisti and Eyal Zamir, “Private Property In the Israeli-Palestinian Peace Settlement”, Research of the Jerusalem Institute for Israel Studies, 77, 7-9 (1998) (Hebrew) (hereinafter: Benvenisti and Zamir, Private Property)). These challenges necessitated a rapid legal answer that would make it possible to settle the rights in, and deal with, those properties. Indeed, in the first years of the State a series of legal arrangements was laid down to contend with the complex reality that had arisen (for further reading, see for example Shlomo Ifrach, “Legislation Concerning Property and Government in the Occupied Territories”, 6 Hapraklit 18 (1949) (Hebrew); Hoffnung, pp. 159-168; Eyal Zamir and Eyal Benvenisti, "Jewish Land in Judea, Samaria, the Gaza Strip and East Jerusalem”, Research of the Jerusalem Institute for Israel Studies, 52, 28-29 (1993) (Hebrew) (hereinafter: Zamir and Benvenisti, Jewish Land)). One of the major pieces of legislation enacted in this context is the Absentees' Property Law, which was enacted in 1950 and replaced the Emergency Regulations that had been promulgated in this respect and that applied during the War of Independence.

 

16.       The Law was designed to regulate the administration of "absentees'" property by the State authorities, and make it possible to safeguard it against lawlessness (see, Minutes of Meeting No. 119 of the First Knesset, 872 (February 27, 1950) (hereinafter:  Minutes 119); CA 58/54 Habab v. Custodian of Absentees' Property, IsrSC 10 912, 918 (1956); Freund, p. 337). The purpose of the Law was not expressly defined in it and it did not prescribe for whose benefit "the absentees' property" should be safeguarded (see Minutes 123, p. 952; Shlomo Ifrach, “Thoughts on the Absentees' Property Law, 5710-1950”, 9 HaPraklit 182 (5713) (Hebrew)). The case law has held that the purpose of the Law is merely to safeguard the property for the benefit of its absentee owners, but it is also aimed at achieving the State's interests in the property, including, so it has been held, "the ability to utilize it to promote the country's development, while preventing its exploitation by anyone who is an absentee within the meaning of the Law, and the ability to hold it (or its proceeds) until the formulation of political arrangements between Israel and its neighbors, in which the fate of the property will be decided on the basis of reciprocity between the countries" (HCJ 4713/93 Golan v. Special Committee under Section 29 of the Absentees' Property Law, IsrSC 48(2) 638, 644 (1994) (hereinafter: the Golan case). For a discussion of the Law's objectives, see also CF (Haifa District) 458/00 Bahai v. Custodian of Absentees' Property, para. 26 (Judge I. Amit) (September 19, 2002) (an appeal was filed against the judgment, but the judgment in the appeal did not require an analysis of the Law's purpose (CA 9575/02 Custodian of Absentees' Property v. Bahai (July 7, 2010) (hereinafter: the Bahai case)). This approach is also consistent with statements made at the time the Law was enacted (see Minutes 119, pp. 869-870).

 

            It should be noted that the wording and title of the Law prominently emphasize the absence of the property owners (the "absentees"). Nevertheless, the background that led to its enactment and the nature of the arrangements prescribed in it might indicate that, in fact, the Law sought to determine the legal position in respect of the properties in Israel of nationals and residents of the enemy states. In any event, it appears that the Court has gained this impression in several cases dealing with these matters (see Golan, p. 645; HCJ 99/52 Anonymous v. Custodian of Absentees' Property, IsrSC 7 836, 839 (1953) (hereinafter: the Anonymous case); Kleiner, p. 2544 (per Justice A. Witkon), where it was stated that the Law is similar in character to the legislation on trade with the enemy, the consequence of which is the expropriation of the ownership of, and rights in, the property and their vesting in the Custodian. Support for this concept can also be found in the statement by the Minister of Justice, D. Libai, in the debate on the Peace Agreement with Jordan Bill (Minutes of Meeting No. 312 of the 13th Knesset, 5658 (January 23, 1995) (hereinafter: Minutes 312)). See also Benvenisti and Zamir, Private Property, pp. 13-14; para. 64 of the notice of appeal dated July 13, 2006 in CA 5931/06. Nevertheless, in the Appellants' summations in CA 2250/06 (the Respondents herein) to which the latter referred, it was asserted that the definition of "absentee" in the Law does not necessarily reflect a person's connection with an enemy state).

 

The Broad Application of the Absentees' Property Law

 

17.       Against the background of the exceptional circumstances in which the Law was enacted, it can perhaps be understood why it is worded so sweepingly and strictly. In any event, the way it is drafted, and especially the broad definitions of its underlying terms – with the emphasis on "absentee", "property" and "absentee property" – lead to the very extensive application of the Law (see HCJ 518/79 Cochrane v. Committee under Section 29 of the Absentees' Property Law, 5710-1950, IsrSC 34(2) 326, 330 (per Justice H. Cohn) (1980) (hereinafter: the Cochrane case; see also Minutes 123 and Minutes 119, pp. 870-872, which discussed the problems involved in the broad definition of "absentee", which embraces very many cases). Indeed, about 35 years ago this Court indicated that the broad definition of "absentee" is likely to lead to the Law's catching more and more people in its net, sometimes unnecessarily and contrary to its purpose. In the words of Justice H. Cohn, in Cochrane (p. 330):

 

            "In the geopolitical circumstances that existed upon the establishment of the State and at the time of the Law's enactment, it was necessary to define 'absentee' very broadly and sweepingly – despite the risk that the definition would include people who, in fact, had no legal connection with Israel's enemies, physically, ideologically or otherwise. And since the definition remains in force until the end of the state of emergency that has prevailed in Israel since the establishment of the State (section 1(b)(1) of the Law), innocent citizens who have nothing to do with absenteeism might frequently be added to the multitude of 'absentees' as defined in the Law (for example someone who is in part of 'Palestine' outside the area of Israel, - ibid., para. (ii))".

 

18.       The Law's definitions of the various terms are likely to lead to rigid results that are inconsistent with common sense or even the purpose that the Law was intended to serve. Let us demonstrate this by means of several examples – and it should be emphasized that I do not mean to lay down strict rules in respect of the cases that will be referred to,  which are cited merely for the purposes of illustration. According to the Law, it suffices if - at any time in the period between November 29, 1947 and the end of the state of emergency that was declared by the Provisional Council of State in 1948 – the owner of the rights fulfilled one of the alternatives in section 1(b)(1) of the Law (see sections 1(b) and 1(e) of the Law) for property that is in the area of Israel to be regarded as absentees' property. As aforesaid, since a declared state of emergency has existed in Israel ever since the State's establishment, any property in Israel that has been purchased in the last dozens of years by an "absentee" is, according to the wording of the Law, absentees' property. For example, a property in Israel that is purchased today by a national or subject of any of the countries mentioned in section 1(b)(1) of the Law (other than Jordan, as mentioned at the end of para. 13 above) will be regarded as "absentees' property" and immediately be vested in the Custodian. The self-evident difficulty involved in such a situation is aggravated in view of the broad definition of "property" in the Law, which includes "immovable and movable property, monies, a vested or contingent right in property, goodwill and any right in a body of persons or its management" (excluded from "absentees' property" are "movable property held by an absentee and exempt from attachment or seizure under section 3 of the Civil Procedure Ordinance, 1938" (section 1(e) of the Law)). As prescribed, "property" includes, among other things, a right to the repayment of a debt, an obligatory right to receive land, bearer shares and also contractual rights and any right that is enforceable by a lawsuit (see Bahai, paras. 7-9 and the references there). One has to wonder about the logic of the result whereby a debt that is due to an "absentee" in respect of a transaction made by him in relation to property in Israel, for example, will automatically be vested in the Custodian (see MF 89/51 Mituba Ltd v. Kazam, IsrSC 6 4 (1952), where it was held that a debt might be absentees' property. See also CA 35/68 Mualem v. Custodian of Absentees' Property, IsrSC 22(2) 174 (1968) (hereinafter: the Mualem case), which concerned bills of exchange received further to a transaction made in Iraq that were endorsed by a resident of Iraq in favor of an Israeli national. It was stated in the judgment that when the bills, which were the property of an Iraqi resident, arrived in Israel they became absentees' property (ibid., pp. 176-177)). In addition, the simple language of the Law might lead to the conclusion that the absenteeism of the holder of any proprietary right in property suffices to make it "absentees' property". This is so even if the other holders of the rights therein are not absentees, and even if his right is "inferior" to their right. Thus, for example, the very fact that someone who "enjoyed" the property was an absentee apparently suffices for it to be regarded as "absentees' property", even if its owner is not an absentee (see the Makura Farm case, p. 15).

 

            Other difficulties arise in view of the fact that "absentee" is an ongoing "status" that has no end (unless expressly otherwise prescribed or a step is initiated to release the property or its owners from their absenteeism. See CA 110/87 Elrahim v. Custodian of' Absentees' Property (August 22, 1989) (hereinafter: the Elrahim case)). Properties in Israel of whoever has fallen within the scope of the conditions for "absentee" at any time in the period between the end of 1947 and the end of the state of emergency, which is still continuing as aforesaid, are likely to be regarded as "absentees' property" and be denied him. As aforesaid, there is no automatic release from this situation, apart from a few exceptions that have been specifically defined in the Law. For example, a person will be regarded as an absentee merely because, at some stage during the said period, he was a national or citizen of Lebanon, Egypt, Syria, Saudi Arabia, Trans-Jordan, Iraq or Yemen or "was" there (as regards Trans-Jordan, see the end of para. 13 above). Hence, according to a strict interpretation of the Law, the properties in Israel of immigrants from Egypt, Iraq or Yemen that were purchased by them before or after they immigrated to Israel, are "absentees' property" (and indeed, that was the case in the Faraj case; see also Mualem. Nevertheless, it does appear that section 28A of the Law, which is mentioned in the next paragraph, resolves that difficulty, at least in respect of properties that have been purchased since arrival in Israel). That is the law, at least prima facie, in respect of the properties in Israel of all those who have visited the said countries, regardless of the purpose or length of the visit. Thus, for example, anyone who went to those places on behalf of the State, for example soldiers in battle, are likely to be regarded as "absentees" (reality has proven that the question is not theoretical; see the Anonymous case, in which a Palestinian citizen, who left Israel for an enemy country as an emissary of one of the State authorities, was regarded as an "absentee"!!). Is it reasonable or acceptable that in the circumstances described, those people should lose their rights in their property in Israel?!

 

19.       It should be noted that a solution has been provided in the Law for at least some of the difficulties arising from its broad wording. A salient example is the possibility of releasing absentees' property (sections 28-29 of the Law) and giving written confirmation that a particular person is not an "absentee" (section 27 of the Law. For a discussion of whether the section applies where a person can be defined as an absentee under section 1(b)(1)(iii) of the Law and also in accordance with one of the other alternatives prescribed in the section, see Anonymous and Bahai, paras. 11 and 13). It should be noted that according to Justice H. Cohn in the Cochrane case, those powers are the solution to the difficulties involved in the definition of "absentee" mentioned in the previous paragraphs (ibid., p. 330) (this was the position of the Court in Elrahim as well). Another example is the provision of the Law that was added in 1951, the purpose of which was to enable "absentees" who are duly present in the area of Israel to purchase rights in properties that did not constitute absentees' property on the date the Law took effect (section 28A of the Law; see Minutes of Meeting No. 234 of the First Knesset, 1254, (March 6, 1951)). Nevertheless, the Law is still far from being free of difficulties. One of the reasons is the fact that in the many years since the Law was enacted, significant geopolitical changes have occurred in the environment of the State of Israel, including Israel's wars and diplomatic arrangements that have been made with some of its neighbors. At the same time, substantial changes have also been made in Israeli law's treatment of human rights. In fact, today's circumstances are materially different from those that existed at the time of the Law's enactment some 65 years ago. Nevertheless, and despite the fact that the Law's application has been continuing all that time, not all the necessary adjustments to the changing times and circumstances have been made. This finds conspicuous expression with regard to property located in East Jerusalem, and in particular, property owned by residents of Judea and Samaria, as is the case in the appeals  before us. Before we go on to consider the specific problems arising in these cases, another note is obliged.

 

20.       In view of the foregoing, an argument might be made with regard to the invalidity of some of the Law's provisions for constitutional reasons. In other words, it could be argued that the provisions of the Law infringe the absentees' rights and in particular their constitutional right to property (section 3 of Basic Law: Human Dignity and Liberty), and that it does not fulfil the criteria that have been laid down in case law on the limiting paragraph of the Basic Law (section 8). In my opinion, it is certainly possible that at least some of the arrangements in the Law, were they enacted today, would not meet the constitutional criteria. Nevertheless, in the instant case, the provisions of the limiting paragraph are not such as to serve or to alter the conclusion with regard to the application of the Law in the cases under consideration here. This is in view of the “Validity of Laws” rule in section 10 of Basic Law: Human Dignity and Liberty, according to which the Basic Law does not affect the validity of any law that existed prior to its entry into force. This provision does not make it possible to find that any provision of the Law is void (see, for example, CFH 2316/95 Ganimat v. State of Israel, IsrSC 49(4) 589, 632-633 (per Justice T. Strasberg-Cohen), 642-643 (per Justice M. Cheshin), 653 (per President A. Barak (1995) (hereinafter: the Ganimat case); HCJ 4264/02 Ibillin Breeders Partnership v. Ibillin Local Council, para. 10 (December 12, 2006)).

 

The Absentees' Property Law and the Properties in East Jerusalem

 

21.       Section 1(b) of the Law imposes two conditions for a person to be an "absentee": the first relates to the particular property and contains the requirement that the property is situated "in the area of Israel". In this respect, "the area of Israel" has been defined as an area where the law of the State of Israel applies (section 1(i) of the Law; for a discussion of that term, see Benjamin Rubin, “The Sphere of the Law's Application, the Area of the State and Everything in Between”, 28 Mishpatim, 215, 226-227 (5755) (Hebrew) (hereinafter: Rubin)). The second condition relates to the owner of the rights in the property (the "absentee"). The "absentee" is someone who falls within one of the alternatives of section 1(b)(1) of the Law. The first alternative is defined according to the person's nationality or citizenship, and it concerns the citizens or nationals of Lebanon, Egypt, Syria, Saudi Arabia, Trans-Jordan, Iraq or Yemen (section 1(b)(1)(i) of the Law). The second alternative is defined on the basis of the location of the "absentee" and relates to anyone who was in any of those countries or "in any part of Palestine outside the area of Israel" (section 1b)(1)(ii) of the Law). The third alternative relates to Palestinian citizens who left their ordinary place of residence in Palestine for a place outside Palestine in the circumstances set out in section 1(b)(1)(iii) of the Law (section 27 of the Law nevertheless lays down cases in which an absentee will be exempted from his "absenteeism" according to this alternative; for the controversy that arose between Justices M. Landau and Y. Olshan in respect of this section and the characteristics of the different alternatives, see the Anonymous case).

 

22.       With regard to properties that are situated in East Jerusalem, until 1967 they were not "in the area of Israel", within the meaning of the Absentees' Property Law, namely the area in which the law of the State of Israel applies (section 1(i) of the Law). Consequently, until then they were not absentees' property. That changed with the Six Day War. In the War, East Jerusalem passed into the control of the State of Israel, and on June 28, 1967 the application of Israeli law, jurisdiction and administration was declared (see Order No. 1 that was promulgated by virtue of section 11B of the Law and Administration Ordinance, 5708-1948 (hereinafter: "the Law and Administration Ordinance"). See also section 5 of Basic Law: Jerusalem, Capital of Israel, which prescribes that East Jerusalem is included within the boundaries of the Jerusalem Municipality. See also HCJ 282/88 Awad v. Prime Minister and Minister of the Interior, IsrSC 42(2) 424, 429 (1988) (hereinafter:as the Awad case; CA 4664/08 Mishal v. Custodian of Absentees' Property, para. 8 (hereinafter: the Mishal case); HCJ 1661/05 Hof Aza Regional Council v. Knesset, IsrSC 59(2) 481, 512-513 (2005) (hereinafter:the Hof Aza Council case); Rubin, pp. 231-234; Benvenisti and Zamir, Private Property, pp. 23-24). In view of this, property in East Jerusalem must, of course, be regarded as situated in "the area of Israel" for the purpose of the Absentees' Property Law (see CA 54/82 Levy v. Estate of Afana Mahmoud Mahmoud (Abu-Sharif), Deceased, IsrSC 40(1) 374, 376 (1986) (hereinafter: the Levy case); HCJ 98/68 Hadad v. Custodian of Absentees' Property, IsrSC 22(2) 254 (1968)).

 

23.       Consequently, all that remains for the owners of rights in property in East Jerusalem to be regarded as "absentees" is for one of the alternatives in section 1(b)(1) of the Law to be fulfilled. In view of the broad definitions in the Law, and given the fact that many of the residents of East Jerusalem were nationals or citizens of Jordan before 1967, it appears that this condition is fulfilled in many cases, and the properties of those people in East Jerusalem should be regarded as "absentees' property". In this context it should be borne in mind that after the Six Day War not only the property in East Jerusalem passed into the area of Israel and under its control, but also the local residents (the residents of East Jerusalem who were included in the census that was conducted in June 1967 obtained the status of permanent residents in Israel and could, in certain conditions, obtain Israeli nationality). As a result, quite a strange situation arose in which the Law applied both to properties and their owners in "the area of Israel". In fact, a person could, for example, remain at home without taking any action or changing his situation or the state of the property, and his home, where he resided in East Jerusalem, became "absentees' property". This difficulty was resolved in respect of the residents of East Jerusalem with the enactment of the Legal Arrangements Law in 1970 (or to be more precise, in 1968, upon enactment of the Legal and Administrative Matters (Regulation) Law, 5728-1968, which preceded it). Section 3 of the 1970 statute prescribes as follows:

 

                        "(a)     A person who on the day of the coming into force of an application of law order [namely an order under section 11B of the Law and Administration Ordinance – A.G.] is in the area of application of the order and a resident thereof shall not, from that day, be regarded as an absentee within the meaning of the Absentees' Property Law, 5710-1950, in respect of property situated in that area.

 

(b)       For the purposes of this section, it shall be immaterial if, after the coming into force of the order, a person is, by legal permit, in a place his presence in which would make him an absentee but for this provision".

 

            The section therefore excludes whoever were residents of East Jerusalem on June 28, 1967 – when Order No. 1 was issued, whereby the law, jurisdiction and administration of the State of Israel were applied to East Jerusalem – from the definition of "absentees" in respect of their property in East Jerusalem (see Mishal, para. 8; Awad, p.429; Benvenisti and Zamir, Private Property, p. 14, 26-28; Zamir and Benvenisti, Jewish Land, p. 87). In addition, the Absentees' Property (Compensation) Law, 5733-1973 (hereinafter: "the Compensation Law") was later enacted to enable residents of Israel, including the residents of East Jerusalem, who are "absentees", to claim compensation for certain property vested in the Custodian (see Zamir and Benvenisti, Jewish Land, pp. 90-91; Benvenisti and Zamir, Private Property, pp. 14, 28-29).

 

The Case of Judea and Samaria Residents

 

24.       Let us now turn to the case before us, of residents of Judea and Samaria who have rights in property in East Jerusalem. As aforesaid, for the purpose of the Law, these properties are located in the area of Israel. The first condition for their "absenteeism" is therefore fulfilled. The second condition is that the owners of the rights in them fall within the scope of one of the alternatives of section 1(b)(1) of the Law. The alternative relevant to the instant case is that mentioned at the end of section 1(b)(1)(ii) of the Law, that an absentee is someone who at any time during the relevant period "was… in any part of Palestine outside the area of Israel." In Judea and Samaria, unlike East Jerusalem, the law, jurisdiction and administration of the State of Israel have never been applied (see, for example, HCJ 390/79 Dwikat v.  Government of Israel, IsrSC 34(1) 1, 13 (1979); Hof Aza Council, pp. 514-560; and also Rubin, pp. 223-225). It is, of course, therefore not the "area of Israel", which is defined in section 1(i) of the Law as "the area in which the law of the State of Israel applies". Some 30 years ago, this Court ruled in Levy that Judea and Samaria is "part of Palestine" within the meaning of section 1(b)(1)(ii) of the Law (ibid., p 381 (Justice A. Halima); cf Crim. App. 5746/06 Abbass v. State of Israel, paras. 5, 8-10 (July 31, 2007), where the meaning of the same expression in the Prevention of Infiltration (Offences and Jurisdiction) Law, 5714-1954 was considered in the particular context of that statute). It should be noted that in Levy the Court dismissed the plea that since Judea and Samaria is actually occupied by the IDF, it should be regarded as held territory in accordance with the Area of Jurisdiction and Powers Ordinance, 1948 and therefore also as an "area of Israel" for the purpose of the Absentees' Property Law. The Court's conclusion in the Levy case was that properties in East Jerusalem that were owned by the residents of Judea and Samaria should be regarded as "absentees' property". This concept is also reflected in later case law of this Court (see the Golan case, where the Court acted on the assumption that such property is "absentees' property").

 

25.       The said conclusion with regard to property in East Jerusalem does not derive merely from the wording of the Law. It appears that this result also reflects the intention of the legislature, at least since the Legal Regulation Law was enacted. As aforesaid, while the residents of East Jerusalem were excluded by the Legal Regulation Law from the application of the Absentees' Property Law in respect of property located there, a similar step was not taken in respect of the residents of Judea and Samaria. In my opinion, the significance of that cannot be avoided. The very fact that the legislature considered it necessary to prescribe an express arrangement excluding the residents of East Jerusalem from the scope of the Absentees' Property Law (from the date prescribed) demonstrates that, according to it, without such a provision the Law would have applied to them. In other words, this indicates that in its opinion, the Law also applies where the particular property or the owner of the rights in it became "absentee" after the Law's enactment, namely after 1950. This assumption also finds expression in the need that the legislature saw expressly to exclude certain properties from the application of the Absentees' Property Law further to the peace agreement made with Jordan in 1994 (see section 6 of the Peace Agreement with Jordan Law; and also Minutes 312, p. 5658. See also Abu Hatum, para. K.) This approach is in fact consistent with the view that the application of the Law is ongoing and has not yet reached an end (see also Golan, p. 645, where it was stated that "the assumption embodied in the Law is that the fate of absentees' property will be determined in future as a possible consequence of political settlements between the State of Israel and its neighbors". It should also be noted that at the time the Law was enacted, it was stated that it was necessary to enact a permanent law instead of the Emergency Regulations because "it was clear to the members of the committee that even after the emergency ends we shall have to deal with the absentees' property…" (Minutes 119, p. 868)). In view of the foregoing, in my opinion it is not possible to accept the argument that the definition of "the area of Israel" in the Law meant only the area in which Israeli law applied at the time of the Law's enactment, something of a "photograph" or freeze of a given situation that cannot change with time. The same applies to the argument that an express provision of the Law is necessary for it to apply to territory added to the area of the State of Israel after its enactment. The foregoing examples might demonstrate that, in truth, the opposite is the case. In addition, the failure of the legislature to prescribe a broader arrangement in the Legal Arrangements Law or another statute reflects, as I understand it, a conscious decision not to exclude others from the application of the Absentees' Property Law, like for example the residents of Judea and Samaria. That is also the impression that was gained by this Court in Levy (see ibid., pp. 382-383 (per Justice A. Halima). That is also the opinion of the learned authors Zamir and Benvenisti (see Benvenisti and Zamir, Private Property, p. 27; Zamir and Benvenisti, Jewish Land, p. 87)). Accordingly, I do not consider it possible to depart from the case law according to which the Absentees' Property Law does indeed apply to property in East Jerusalem, whose owners are residents of Judea and Samaria. It appears that any other finding would be contrary to the plain meaning of the Law and the intention of the legislature.

 

26.       In this regard, a few words should be devoted to the Jerusalem District Court's judgment in the Dakak caseJudge B. Okon). In that judgment the court considered the difference between the reality in which the Absentees' Property Law was enacted and the circumstances that have arisen in Judea and Samaria following the Six Day War. According to him, "it is difficult to conceive" that the Law should be applied to residents who are under "effective Israeli control" rather than hostile control (ibid., paras. 4-5 of the judgment). Such being the case, it was held that section 1(b)(1)(ii) of the Law, which concerns a person who is "in any part of Palestine outside the area of Israel", does not apply to a resident of areas "that are actually subject to Israeli military control, as distinct, for example, from areas under the military control of a country mentioned in section 1(b)(1)(i) of the Law" (ibid., para. 6). An appeal was filed against the said judgment (CA 2250/06, which is one of the appeals joined in these proceedings (see para. 1 above)). Ultimately, as aforesaid, the appeal was withdrawn after a settlement agreement was reached between the parties. Nevertheless, since the parties in the instant case did consider the said judgment, we have seen proper to explain our reservation as regards the way in which section 1(b)(1)(ii) of the Law was interpreted in Dakak. The said interpretation is not consistent with this Court's findings in Levy or the underlying assumption relied upon in Golan. This fact, per se, raises difficulty (as regards the departure of the trial courts from a binding precedent of the Supreme Court, see, for example, ALA 3749/12 Bar-Oz v. Setter, paras. 18-20 of my opinion (August 1, 2013)). In addition, in my opinion, the interpretation also raises difficulties with respect to the crux of the matter for the reasons detailed above. Moreover, there is substance to the Respondents' arguments that the said interpretation will in any event not exclude from the application of the Law the residents of Judea and Samaria who were Jordanian nationals or citizens or were there at any time since 1947 and have property in Israel. This is in view of the other alternatives of section 1(b)(1) of the Law. According to the Respondents, it appears that a considerable proportion of the residents of Judea and Samaria are involved. However, the interpretation that "extends" the "area of Israel" beyond that provided in the Law raises substantial difficulties. This is in view of the clear wording of the Law, which expressly provides in section 1(i) that the area in which the law of the State of Israel applies is involved, and for other substantial reasons. Moreover, a finding of this type raises complex issues in respect of the exact nature of the terms "area of Israel" and "effective control". Thus, for example, the question could arise as to whether a distinction should be made among the areas of Judea and Samaria that are termed "areas A, B and C", according to the Israeli-Palestinian Interim Agreement on the West Bank and Gaza Strip that was made between the State of Israel and the PLO on September 28, 1995 (for a discussion in a different context on the question of whether a certain area is under the control of the IDF further to the division of the said territories, see, for example, HCJ 2717/96 Wafa v. Ministry Of Defense, IsrSC 50(2) 848 (1996)). This complex question gained no consideration by those in support of using the term "effective control" in the context under discussion. In any event, it appears that this is not the proper place to decide those questions. Moreover, one should be aware that such an interpretation might lead to the Law's application to property not included in it until now. This is because the Law applies to properties in "the area of Israel" (section 1(b)(1) of the Law.) Hence, finding that Judea and Samaria is part of "the area of Israel" might lead to properties located there also becoming "absentees' property".

 

27.       In view of all the foregoing, there is no alternative but to conclude that the Absentees' Property Law does apply to properties in East Jerusalem, the rights in which are owned by residents of Judea and Samaria. However, that is not the end of it. We must consider the way in which the Law is implemented in cases like these.

 

Exercise of the Powers under the Law in the Cases under Discussion

 

28.       The finding that the said properties are "absentees' property" is very problematic, not only at the level of international law but also as regards administrative law. The Respondents do not deny this either. It should be borne in mind that those involved are residents of Judea and Samaria who have become "absentees", not because of any act done by them but because of the transfer of control of East Jerusalem to Israel and the application of Israeli law there. In addition, persons are not involved who are under the control of another state, and they are in areas over which Israel has control – albeit only certain control. In this context, we should bear in mind that in the course of the Law's enactment it was explained that section 1(b)(1)(ii) of the Law meant "people who are in fact not in the area of the State of Israel" (as the Chairman of the Finance Committee, D.Z. Pinkas, MK, said in Minutes 119, p. 868). In this sense, there is indeed a certain similarity between the residents of Judea and Samaria and the residents of East Jerusalem, although an analogy should clearly not be drawn between the cases in view of the difference in the legal status of the two areas. It appears that there is indeed a difference between the case of residents of Judea and Samaria and the case of those for whom the Absentees' Property Law was intended (see also Cochrane, p. 330, where Justice H. Cohn mentioned a person who is "in part of Palestine outside the area of Israel" as one of the cases in which the Law applies to someone who has nothing whatsoever to do with absenteeism). Indeed, there are differences between the residents of Judea and Samaria, the citizens or nationals of the hostile states in section 1(b)(1)(i) of the Law, and a person who deliberately "left his ordinary place of residence in Palestine" in the circumstances described in subparagraph (iii). In fact, the absenteeism of the residents of Judea and Samaria in respect of their property in East Jerusalem derives from the broad wording of the Law and its continuing application, due to the prolonged state of emergency (see paras. 14 and 18 above). It is difficult to believe that this was the type of case intended by the Law, which was, as aforesaid, enacted against the background of specific and exceptional events. The results of applying the Absentees' Property Law in these cases is also particularly harsh having regard to the fact that the residents of Judea and Samaria are not entitled to compensation for their properties that are vested in the Custodian. This is because the right to claim compensation by virtue of the Compensation Law is granted only to residents of Israel (section 2 of the Compensation Law; see also Benvenisti and Zamir, Private Property, pp. 14, 28-29. It must be said that there is a certain similarity between denying a person's rights to his property because it has become absentees' property and the expropriation of land for public purposes (in which connection it should be noted that the view is expressed in the literature that laying down the ability to obtain compensation under the Compensation Law in the case of Israeli residents reinforces the argument that underlying the failure to release absentees' property is a rationale similar to that underlying the acquisition of land for public purposes (see, ibid., p. 14). See also Sandy Kedar, “Majority Time, Minority Time: Land, Nation and the Law of Adverse Possession in Israel,” 21 (3) Iyunei Mishpat  665, 727 (1998)). Nevertheless, while the grant of compensation is one of the major foundations of modern expropriation law (see, for example, CA 8622/07 Rotman v. Ma'atz - Israeli National Public Works Department Ltd, paras. 65-71 of the opinion of Justice U. Vogelman (May 14, 2012)), as regards absentees resident in Judea and Samaria, the legislature has supplied no statutory arrangement to obtain compensation for the property taken from them. This further underlines the difficulty involved in applying the Absentees' Property Law in respect of them. This problem has not been ignored by the various different attorneys general over the years either. Thus, inter alia, on January 31, 2005, the Attorney General, M. Mazuz, wrote to the Minister of Finance, B. Netanyahu, who was the person responsible for the implementation of the Law (hereinafter: "the Mazuz Directive") as follows:

 

            "The absenteeism of property in East Jerusalem of residents of Judea and Samaria is of a technical character since they became absentees because of a unilateral act taken by the State of Israel for a different purpose, when both the properties and their owners were under the control of the State of Israel, and where it would appear that the purposes of the Law are not being fulfilled here. Involved are, in fact, 'attendant absentees', whose rights in their property have been denied due to the broad technical wording of the Law. Moreover, as regards residents of Judea and Samaria whose property in East Jerusalem has become absentees' property, the result is particularly harsh because applying the Law means the denial of the property without any compensation, because the Absentees' Property (Compensation) Law, 5733-1973 grants compensation only to absentees who were residents of the State of Israel at the time of its enactment" (ibid., para. 2).

 

29.       In this context it should be noted that one should be conscious of the fact that the strict implementation of the Law in regard to the residents of Judea and Samaria is also likely to lead to the property in Israel of the residents of Judea and Samaria who are Israeli nationals being regarded as "absentees' property". Thus, for example, according to this interpretation, even a property in Tel Aviv whose owner is a resident of Ariel or Beit El is vested in the Custodian. As aforesaid, in this respect the Respondents argued that the Law can indeed be understood in this way but the Custodian does not apply its provisions in such cases, just as he does not apply them in other cases of persons who lawfully move outside Israel. Let us again emphasize matters because of the extreme result that emerges from the language of the Law: any property in Israel the owner of the rights in which is a resident of Judea and Samaria is absentees' property. Hence, for example, if a debt is owed to a person who resides in Judea and Samaria by a person who resides in Jerusalem as a result of a transaction currently made between them, prima facie the debt is vested in the Custodian. Perhaps it is not superfluous to mention that this is also apt in respect of real estate in Israel of the residents of Judea and Samaria. It should also be emphasized that the Absentees' Property Law takes no interest in the religious characteristics, for example, of the "absentee" and the courts have applied its provisions to Jewish "absentees" more than once (CA 4682/92, Estate of Salim Ezra Shaya, Deceased v. Beit Taltash Ltd, IsrSC 54(5) 252, 279 (per Justice J. Kedmi) (2000)).

 

30.       In view of the said difficulties, the State authorities, under the direction of the  attorneys general, have seen fit to limit the exercise of the Custodian's powers in such cases. The chain of events in this context is described in the MazuzDirective, which was filed in the cases before us. Back in November 1968, not long after the Six Day War, it was decided in a forum headed by the Minister of Justice, under the guidance of the then Attorney General M. Shamgar, that the Law should not be implemented in respect of immovable property of residents of Judea and Samaria in East Jerusalem. Attorney General Shamgar explained the decision in the following way:

 

            "… We have not seen any practical justification for seizing property that has become absentees' property at one and the same time because its owner – who is a resident of Judea and Samaria – has become a subject under the control of the Israeli government authorities. In other words, since the property would not have been absentees' property before the date on which the IDF forces entered East Jerusalem and would not have become absentees' property had East Jerusalem continued to be part of Judea and Samaria, we have not considered it justified for the annexation of East Jerusalem, and it alone, to lead to taking the property of a person, who is not actually an absentee, but from the time his property came into our hands is in territory under the control of the IDF forces". (The letter of August 18, 1969 from Attorney General M. Shamgar to the Israel Land Administration, as cited in the Mazuz Directive).

 

            Over the years, attempts have been made to erode the said directive. In 1977, a forum headed by the Minister of Justice and the Minister of Agriculture laid down a temporary arrangement "that would be reviewed in light of the experience of its implementation". According to this arrangement, the residents of Judea and Samaria would be required to apply of their own initiative to the Custodian to continue using their property in East Jerusalem. It later became apparent that the arrangement had not actually been reviewed and that "the Law was being abused" under cover of the arrangement (the Mazuz Directive, para. 4(b); for further discussion, see the Report of the Committee for the Examination of Buildings in East Jerusalem (1992) (hereinafter:  "the Klugman Report")). The 1992 Report also described faults that had occurred in the proceedings to declare properties in East Jerusalem "absentees' property" and it stated that "the functioning of the Custodian of Absentees' Property was very flawed, by any criterion" (ibid., p. 24; see also pp. 12-13, 26). In view of that, it was recommended to make an immediate, comprehensive examination into the functioning of the Custodian. In addition, the Attorney General appointed a team to determine procedures for the exercise of the Custodian's powers (the Klugman Rport, p. 25). Further thereto it was decided to freeze the operation of the Law again and reinstate the previous policy in accordance with the 1968 directive. In 1997, the limitations that had been instituted were again eased and the Custodian was permitted to issue certificates in respect of vacant properties, with the authority of the legal adviser to the Ministry of Finance. As regards occupied properties, the authority of the Ministry of Justice was also required. According to the Mazuz Directive, it appears that only limited use of that power was actually made. In March 2000, a ministerial forum, with the participation of the Minister of Finance, the Minister of Justice and the Minister for Jerusalem Affairs, determined that any transfer of property in East Jerusalem by the Custodian to the Development Authority required approval by the said forum or such person as appointed by it in such respect. In 2004, the Ministerial Committee on Jerusalem Affairs made a decision declaring that it sought to remove all the limitations on the exercise of the Custodian's power in respect of properties in East Jerusalem. It was explained in the decision that the Custodian was vested with powers pursuant to section 19 of the Law, including to transfer, sell or lease real estate in East Jerusalem to the Development Authority (Decision no. J'lem/11 of June 22, 2004; the decision was granted the force of a government decision on July 8, 2004 (Decision no. 2207)). It should be noted that the decision was made contrary to the opinion of the Ministry of Justice and did not include in it the original proposal that the exercise of the said power would necessitate consultation with the legal adviser to the Ministry of Finance or his representative.

 

            In response, at the beginning of 2005, Attorney General M. Mazuz made it clear that the said decision could not be upheld, that it was ultra vires and not within the power and authority of the Ministerial Committee on Jerusalem Affairs. He asked the Minister of Finance to order the immediate cessation of the Law's implementation in respect of the East Jerusalem properties of Judea and Samaria residents and he expressed his opinion that there was no alternative but to reinstate the previous policy, namely to determine that "in general, use will not be made of the powers under the Law in respect of the properties under consideration, except in special circumstances and subject to prior approval by the Attorney General or such person as authorized by him for the purpose" (the Mazuz Directive, para. 6). As we have been informed in these proceedings, that position has also been adopted by the current Attorney General, Y. Weinstein, and it is also the position of the Respondents in the appeals before us (the Respondents' notification of August 28, 2013).

 

31.       Hence, there is in fact no dispute between the parties to these proceedings that the strict implementation of the Law in respect of properties in East Jerusalem, the owners of the rights in which are residents of Judea and Samaria, raises significant difficulties. This has been the opinion of the attorneys general for many years, and the Respondents do not deny it. As aforesaid, the Respondents' position is that the Law does indeed apply to East Jerusalem properties of residents of Judea and Samaria, but it is generally not to be applied in such cases. This is except in special circumstances, after obtaining authority from the Attorney General. The distinction between the application of the Law and its implementation has also found expression in the case law of this Court. Thus, in the Levy case, Deputy President Ben Porat concurred in the ruling that the Absentees' Property Law does apply to properties in East Jerusalem of the residents of Judea and Samaria. However, she noted that although those properties can be regarded as "absentees' property", the question might arise as to whether the powers of the Custodian in accordance with the Law ought to be exercised in the circumstances. This is given the fact that persons are involved are under IDF control and but for the annexation of their land for the sake of united Jerusalem, they would not have been regarded as "absentees" (ibid., p. 390). This is also consistent with the approach in the Cochrane case. As aforesaid, in that case, despite the difficulties that Justice H. Cohn saw in the broad application of the Law deriving from its sweeping wording, he did not seek to find that the Law does not apply. Instead, he explained that the solution to the cases in which the problem arises is to be found in the power granted to the administrative authorities to exclude certain parties from the application of the Law or to release absentees' property (see sections 27-29 of the Law)).

 

32.       This approach is also essentially acceptable to us. As we have detailed, it cannot be held that the Law does not apply to properties in East Jerusalem whose owners are residents of Judea and Samaria. Nevertheless, the powers that are granted by the Law in those cases should be exercised scrupulously and with extreme. In my opinion, in view of the difficulties mentioned above, it is inappropriate to exercise those powers in respect of the said properties, except in the most exceptional of situations. In addition, even where it is decided to take action in accordance with the Law – and as aforesaid, those cases ought to be exceedingly rare – the same will necessitate obtaining prior authority from the Attorney General himself, together with a decision of the Government or its ministerial committee approving the same. We thereby in fact adopt the restrictions in respect of the policy of implementing the Law that the Respondents have long been assuming. This is with the supplemental requirement that any act in accordance with the Law in respect of those properties should also be reviewed and approved by the government or a ministerial committee. Let us explain that we have considered it appropriate to entrench in case law the policy that has long been adopted, according to the Respondents, in this respect and even to make it more stringent, since experience shows that the restraints prescribed have not always been observed and in view of the repeated attempts to erode them, as aforesaid. Moreover it should be borne in mind that any decision to implement the Law in a particular case is, in any event, subject to judicial review.

 

33.       We would also note that insofar as the competent authorities believe that there is a justified need to acquire ownership of property of the type under consideration, they have available to them means other than the Absentees' Property Law that enable them to do so. Thus, for example, the Acquisition Ordinance and various provisions of the Planning and Building Law, 5725-1965 (see, for example, chapter 8 of the said Law, which concerns expropriations). Hence, the restraints that have been prescribed above do not block the way of the authorities to acquire rights in the properties under consideration by virtue of other statutory arrangements, provided that there is justification therefor, and that the conditions prescribed by law are fulfilled. Clearly, statutory tools like those mentioned are preferable to implementing the Absentees' Property Law. In other words, the Absentees' Property Law should only be applied, if at all, after all the other options under the various different expropriation statutes have been exhausted. This is in view of the problems that the Law raises and the fact that the other arrangements that we have mentioned are generally more proportionate.

 

34.       Prima facie, a ruling similar to that reached by us could also have been reached by the course delineated in the Ganimat case, that is to say by adopting a new approach to the interpretation of the Absentees' Property Law along the lines of the Basic Laws, despite the Validity of Laws rule in section 10 of Basic Law: Human Dignity and Liberty. However, since the determinations with regard to the Absentees' Property Law and its interpretation do not depend upon the Basic Law, there is no need to consider a move based on section 10 as aforesaid (see HCJ 7357/95 Barki Feta Humphries (Israel) Ltd v. State of Israel, IsrSC 50(2) 769, 781 (per Justice M. Cheshin) (1996)). As aforesaid, my decision does not relate to the constitutional aspect or the validity of the provisions of the Absentees' Property Law, but is at the administrative level concerning the way in which the powers by virtue thereof are exercised. Incidentally, it should to be noted that human rights existed before the Basic Laws, and those rights are, in my opinion, more than sufficient to lead to the conclusion that we have reached.

 

The Application of the Judgment in Time

 

35.       The final issue that is left for us to address is that of the of this judgment application in time. In our decision of September 11, 2013, we permitted the parties to supplement their briefs in regard to the application in time of a possible judicial finding that the Law does not apply in respect of residents of Judea and Samaria who have properties in East Jerusalem. Ultimately, our conclusion is, as aforesaid, that although the Law does apply to such properties, it is subject to very stringent restraints with regard to its exercise. Nevertheless, in view of the possible implications of our other finding that, in general, the powers under the Law should only be exercised in very exceptional cases, we think it proper to consider the application in time of this judgment (see HCJ 3514/07 Mivtahim Social Insurance Institute of the Workers Ltd v. Fiorst, para. 33 and the references there (per President (ret.) D. Beinisch) (May 13, 2012)). Although the parties' arguments related to the commencement date of a (possible) rule that the Law does not apply in the instant situations, they are still relevant to the rule laid down with regard to the way in which the Law is implemented. Consequently, we shall briefly cite the parties' main arguments on the application in time, insofar as they are relevant to the ruling that we have ultimately reached.

 

36.       The Respondents oppose the possibility that a case-law rule – if laid down – according to which the Law does not apply in respect of properties in East Jerusalem of the residents of Judea and Samaria would apply retrospectively. In their view, the practice of interpretation applied by them for many years, in accordance with the case law, should be respected. By that practice, the Custodian has been vested with many properties and he has transferred some of them to third parties over the years. According to them, at the present time it is difficult to produce accurate data on the number of properties, out of all the properties that have been transferred to the Custodian, which belong to the said category. In addition, they emphasize that various parties have relied on the said interpretation, and the Respondents also insist on the need for certainty and stability where rights in land are involved. They warn that adopting such an interpretation with retrospective application would lead to extensive litigation and might also have implications at the political level. The Appellants, for their part, reject the Respondents' position. They argue that there is nothing to stop applying a new interpretation to a statute that substantially harms a particular population merely on the ground that it was customary for many years. In addition, according to them, the position of the State authorities in this respect has not been consistent and uniform throughout the years, and at certain times it has departed from the "customary practice" asserted by the Respondents. In their view, following the judgment in the Dakak case, the practice changed and it cannot be said that a "customary regime that is clear to everyone" is involved. Moreover, the Appellants assert that the Respondents did not substantiate the plea that the rule should not be applied retrospectively, or supply any factual data in support of the argument that changing the rule of law "backwards" will infringe the interest of reliance. Furthermore, in the Appellants' opinion, under the circumstances, the interest of changing the law supersedes the interest of reliance. In this regard, they state that the amount of land involved is fixed and is not going to change, and that third parties who, by the actions of the Custodian, have enjoyed property rights that are not theirs should be deemed as unjustly enricheds.

 

37.       Having considered all the factors in this respect, we have reached the overall conclusion that the holdings of this judgment should only be applied prospectively (for a discussion on delaying the avoidance of an administrative decision and relative avoidance, see CFH 7398/09 Jerusalem Municipality v. Clalit Health Services, paras. 29 and 51 (April 14, 2015)). This is in the following sense: if by the time of the handing down of this our judgment, the competent authorities have not done any act in accordance with the Law in respect of a property in East Jerusalem whose owner is a resident of Judea and Samaria, then henceforth the powers by virtue of the Law should not be exercised, except in extraordinary cases and even then after exhausting other options, for example under the Acquisition Ordinance. If it is indeed decided to take action in accordance with the Absentees' Property Law, the same will necessitate obtaining prior authority from the Attorney General himself and also from theGovernment or its ministerial committee. As already mentioned, absentees' property is automatically vested in the Custodian from the moment that it fulfils the definition of "absentees' property", and the same does not necessitate the taking of any action by the Custodian. Consequently, the question of what is "an act in accordance with the Law" as aforesaid might arise. I mean the exercise of any power under the Law that is subject to judicial review, which has been performed by the competent authorities in, or in respect of a property, provided that there is written documentation thereof. It should be emphasized that "the requirement of writing" is a precondition for finding that a particular property is exempt from the application of the determinations in this judgment. The acts, the commission of which will lead to the conclusion that the property is subject to the previous law, will, for example, include steps to care for, maintain, repair or develop the held property, as mentioned in section 7 of the Law; moves that have been taken in the management of a business or partnership instead of the absentee (sections 8, 24, 25 of the Law); transferring the rights in the property to another, including to the Development Authority; discharging debts or performing obligations relating to absentees' property (as provided in section 20 of the Law); the Custodian's presenting written requirements in respect of the property to its owner (for example as provided in section 21(e) of the Law or section 23(c) of the Law; the issue of orders (for example of the type mentioned in section 11 of the Law); the giving of certificates (such as certificates under sections 10 and 30 of the Law); and incurring expenses and conducting legal proceedings in respect of the property. Moreover, the new rule will of course not apply to properties that constitute "held property", namely property that the Custodian actually holds, including property acquired in exchange for vested property (see section 1(g) of the Law). It should be emphasized that these are mere examples of acts in respect of properties as regards which further to their commission this judgment will not apply, and it is not an exhaustive list.

 

38.       The foregoing new requirements that are to be met henceforth will not apply where, prior to the award of the judgment, powers have already been exercised in accordance with the Absentees' Property Law in respect of particular property. In such cases, the law that applied prior to this judgment will apply. In such connection, the authorities will of course be bound by the restrictive policy that the Attorney General laid down with regard to the implementation of the Law in those cases. This means that where an act as described above has already been done in respect of a property of the type with which we are concerned, the mere fact that the new rules that we have laid down have not been performed will not be regarded as a defect, and certainly not a defect that would to lead to the avoidance of the decisions or acts that have been made or done in respect of the property. This finding is intended to contend with the concern that has been raised with regard to retroactive changes of the rules that applied to the land policy in East Jerusalem and to avoid "reopening" transactions made in respect of those properties, with the difficulties involved therein both materially and evidentially. In this context, we have taken into account the possibility that in a substantial proportion of cases, transactions that have long been completed and even "chains" of transactions will be involved. A different ruling might have led to ownership chaos, the flooding of the courts with lawsuits, the impairment of legal certainty and the infringement of a very large public's reliance interest. It should be noted that this approach is also consistent with the spirit of section 17 (a) of the Law, which provides that transactions that have been made by the Custodian in good faith in respect of property that was mistakenly regarded as vested property shall not be invalidated (for a discussion of this section, see, for example, Makura Farm, pp. 17-25; CA 1501/99 Derini v. Ministry of Finance, para. 4 (December 20, 2004); CA 5685/94 Amutat ELAD El Ir David v. Estate of Ahmed Hussein Moussa Alabsi, Deceased, IsrSC 53(4) 730 (1999), in which it was held that the Custodian had acted in an absence of good faith in respect of realty in East Jerusalem that he sold to the Development Authority, and the transaction was therefore invalid).

 

39.       In any event, the cases concerning absentees' property, in respect of which action has already been taken as aforesaid by the Custodian, should be resolved by means of "the release course" prescribed in sections 28 and 29 of the Law. The problems of implementing the Law in respect of properties of the type under consideration should also be borne in mind by the competent entity when deciding on the release of properties (see also Golan, p. 646). In other words, where it is sought to release one of the said properties to which this judgment does not apply, the Special Committee and the Custodian ought to give substantial weight to the difficulties involved in viewing them as "absentees' property", and also to the restrictive policy that is to be adopted, in accordance with which the Law is to be implemented in respect of them. Consequently, preference should be given to the release of property in specie. To complete the picture, we would mention that we have been informed by the Respondents in the hearings in these proceedings that rules have been laid down for the exercise of the Special Committee's discretion in accordance with section 29 of the Law with regard to the release of absentees' property in East Jerusalem of Judea and Samaria residents. According to them, the rules have been formulated along the lines of the Attorney General's position described above. The Respondents believe that a fitting solution will thereby be given in the majority of the cases under consideration, leaving room for the necessary flexibility in sensitive deliberations of this type. We have not considered it appropriate to relate to the actual rules that have been established, as they are not the focus of these proceedings, and bearing in mind that the power to address those matters is vested in the High Court of Justice (see Lulu, para. 8). Insofar as there are objections to the rules that have been laid down, they should be heard in the appropriate proceedings, rather than in the instant ones.

 

The Cases before Us

 

40.       Against the background of these general statements, we shall now rule on the cases before us. Implementing the findings mentioned above in the concrete cases before us leads to the conclusion that the properties under consideration do indeed constitute absentees' property. Properties are involved that are situated in the area of Israel, within the meaning of the Law, whose owners are residents of Judea and Samaria. Hence, the alternative of section 1(b)(1)(ii) of the law is fulfilled in respect of them. Consequently, the Appellants' pleas in both appeals aimed against the finding that Property 1 and Property 2 are absentees' property are dismissed.

 

            The Appellants' alternative application in CA 5931/06 is for us to order the release of Property 1 in accordance with section 28 of the Law. As a condition for exercising the power to release property, a recommendation of the Special Committee under section 29 of the Law is necessary (see also Golan, p. 641). As aforesaid, incidental to these proceedings, the Committee deliberated about the release of Property 1. According to the Respondents, the land involved in the dispute was sold to third parties on "market overt conditions" and the Custodian now only holds the proceeds of sale. The Special Committee recommended releasing the proceeds received for the property only to those of the Appellants who are residents of Judea and Samaria and still alive, and supplemental particulars in respect of the Appellants who have died were requested. As already mentioned, the way in which the Committee's powers have been exercised is subject to review by the High Court of Justice rather than this Court sitting as a court of civil appeals (Lulu, para. 8). Hence, insofar as the Appellants in CA 5931/06 have complaints with regard to the Special Committee's decision, the instant proceedings are not the appropriate forum. In any event, and without making any ruling, we would comment that, under the circumstances, it appears that ruling on the rights in Property 1 necessitates factual enquiry and the consideration of legal questions that were not decided in the judgment of the District Court or argued before us. That being the case, the application to order the release of the property involved in CA 5931/06 is dismissed.

 

            The Appellants in CA 2038/09 have applied for us to order the avoidance of Property 2's seizure and its restitution to them, inter alia in view of their arguments in respect of the Respondents' conduct in the case. As aforesaid, from the moment that a property fulfils the conditions for being "absentees' property", the rights in it are vested in the Custodian, including the power to seize the property. Having determined that "absentees' property" is involved it can only be returned to its original owners in the ways delineated in the Law, with the emphasis on the possibility of release under sections 28-29 of the Law. We would mention that the Special Committee also deliberated upon the release of Property 2. The Committee recommended the release of the parts of the property that had not been seized for the construction of the security fence, and to transfer the consideration for the part seized to the Appellants, who are residents of Judea and Samaria and, according to it, those who held it continuously until its seizure. In accordance with the foregoing, insofar as the Appellants in CA 2038/09 have complaints in such respect or with regard to the seizure of the property for the construction of the fence, the the instant proceedings are not the appropriate forum. Such being the case, the Appellants' application in CA 2038/09 that we order the avoidance of the seizure of the property involved in the appeal and its restoral to them is dismissed.

 

Conclusion

 

41.       Accordingly, my opinion is that there is no alternative but to conclude that the Absentees' Property Law applies to properties in East Jerusalem owned by residents of Judea and Samaria who enjoy or hold them. This is despite the considerable problem raised by treating them as "absentees' property". In this context, we should be conscious of the fact that the strict implementation of the Law's provisions to residents of Judea and Samaria is also likely to lead to serious results as regards residents of Judea and Samaria who are Israeli nationals, whose property in Israel is prima facie regarded as "absentees' property". Alongside this, the substantial difficulties are of significance in the context of exercising the powers under the Law in respect of such property. Consequently, I would suggest to my colleagues to find that the competent authorities must, in general, refrain from exercising the powers by virtue of the Law in respect of the properties under consideration. As such, I have not considered it appropriate to seal the fate of such property and prevent any possibility of implementing the Law in regard to that property. Our assumption is that there may be cases, albeit exceedingly rare, in which it might be justified to take such steps in respect of properties in East Jerusalem of the residents of Judea and Samaria. In those cases, the performance of any act in accordance with the Law will necessitate obtaining prior approval from the Attorney General himself and a decision of the Government or its ministerial committee. This amounts to the adoption of the restrictive policy assumed by the Respondents over the years, with a certain stringency in the form of adding the requirement for the Government's approval. This judgment, and in particular the finding with regard to the restrictions obliged when exercising the powers by virtue of the Law in respect of such property, will only apply prospectively, in the following sense:

 

            (a)       If by the time of the handing down of this judgment, the competent authorities have not done any act by virtue of the Absentees' Property Law in respect of a particular property in East Jerusalem owned by a resident of Judea and Samaria, the findings prescribed in this judgment will apply. Accordingly, the authorities will not be able to take steps in accordance with the Law in respect of the property without the prior authority of the Attorney General and without the approval of the Government or its ministerial committee. In mentioning an "act by virtue of the Law" we mean any act that is subject to judicial review and an act in accordance with the Law, like in the non-exhaustive list of acts contained in para. 37 above, provided always that there is written documentation.

 

            (b)       These requirements will not apply in cases where, prior to this judgment, acts in accordance with the Law were done by the competent authorities in respect of property in East Jerusalem owned by a resident of Judea and Samaria. In those cases, the previous law will apply, including the restrictive rules that have been laid down by the Attorney General in respect of the exercise of the said powers. This means that non-performance of the new conditions that we have just prescribed will not, per se, be regarded as a defect in the administrative act, and will not be such as, per se, to lead to the avoidance of the steps taken in respect of the property or to the "reopening" of transactions already made in respect of it. In such cases, the way is open to release the absentees' property along the course prescribed in sections 28-29 of the Law. When the competent authorities come to decide on the release of such properties, they must take into account the great problem involved in those properties being "absentees' property".

 

42.       In the cases before us, I would suggest to my colleagues that we dismiss the appeals. Under the circumstances, there shall be no order for costs.

 

Justice S. Joubran

 

1.         I agree with the thorough and comprehensive opinion of my colleague, President (ret.) A. Grunis, but would like to add a few words on the application of the Basic Laws as a tool in the interpretation of old legislation. In my opinion, a ruling similar to that of my colleague the President (ret.) could have been reached by an interpretation of old legislation "in the spirit of the Basic Laws", as I shall explain below, and as my colleague Deputy President E. Rubinstein has detailed in his opinion in these proceedings.

 

2.         In my view, the Basic Laws give the judge an appropriate tool of interpretation when questions of interpretation in respect of the provisions of law arise. The Validity of Laws provision in section 10 of Basic Law: Human Dignity and Liberty provides that "this Basic Law shall not affect the validity of any law in force prior to the commencement of the Basic Law". That is to say that so long as there was existing law prior to the commencement of the Basic Laws, its validity is preserved. However, in my opinion, it is not to be inferred from that provision that the Basic Laws are not to be used as a tool for the interpretation of existing law when that law is not clear and its validity is in any event dubious. The Basic Laws have given our legal system an arrangement of fundamental principles, which I believe can, and frequently should, be referred to when we are reviewing the proper interpretation or legal policy.

 

3.         Using the Basic Laws as an interpretive tool can, in my opinion, give substance to the principles and rights that are under consideration in existing legislation, and properly analyze the balance between them. I believe that such will not impair the validity of the existing law but will conceptualize their substance in a more balanced and organized discourse (cf. CFH 2316/95 Ganimat v. State of Israel, IsrSC 49(4) 589, paras. 7-12 of the opinion of Justice M. Cheshin (1995) (hereinafter: Ganimat)). So too, for example, Basic Law: Freedom of Occupation distinguishes between the validity of provisions of legislation and the interpretation of the provisions that "will be made in the spirit of the provisions of this Basic Law" (section 10 of Basic Law: Freedom of Occupation). According to Justice (as he then was) A. Barak, this is obliged as an interpretive conclusion in the context of Basic Law: Human Dignity and Liberty even without an express provision (and see: Ganimat, para. 6 of the opinion of Justice A. Barak). In this respect, his statement there is apt:

 

            "The constitutional status of the Basic Law radiates to all parts of Israeli law. This radiation does not pass over the old law. It, too, is part of the State of Israel's law. It, too, is part of its fabric. The constitutional radiation that stems from the Basic Law affects all parts of Israeli law. It necessarily influences old law as well. In truth, the validity of the old law is preserved. The radiation of the Basic Law upon it is therefore not as strong as it is upon new law. The latter might be avoided if it is contrary to the provisions of the Basic Law. The old law is protected against avoidance. It has a constitutional canopy that protects it. However the old law is not protected against a new interpretative perspective with regard to its meaning. Indeed, with the enactment of the Basic Laws on human rights there has been a material change in the field of Israeli law. Every legal sapling in that field is influenced by that change. Only in that way will harmony and uniformity be achieved in Israeli law. The law is a set of interrelated tools. Changing one of those tools affects them all. It is impossible to distinguish between old and new law as regards the interpretative influences of the Basic Law. Indeed, all administrative discretion that is granted in accordance with the old law should be exercised along the lines of the Basic Laws; all judicial discretion that is granted in accordance with the old law should be exercised in the spirit of the Basic Laws; and in this context, every statutory norm should be interpreted with the inspiration of the Basic Law" (Ganimat, para. 7 of the opinion of Justice A. Barak).

 

            My view is similar to that of Justice A. Barak and I believe, as aforesaid, that in the event that a question of interpretation arises in respect of the provisions of the law, recourse should be made to the Basic Laws, and inspiration drawn from them. In his opinion, my colleague the President (ret.) did not consider the said interpretative approach (and see para. 34 of his opinion, above) but since in the instant case we still reach a similar ruling by his method, I shall add my voice to his opinion.

 

4.         Together with all the foregoing, I concur with the opinion of my colleague President (ret.) A. Grunis.

 

Justice Y. Danziger

 

            I concur in the opinion of my colleague President (ret.) A. Grunis, who proposes to dismiss the appeals before us without any order for costs.

 

            Like my colleague, I too believe that, as a rule, the competent authorities should avoid exercising the powers by virtue of the Absentees' Property Law, 5710-1950 in respect of properties in East Jerusalem whose owners are residents of Judea and Samaria and hold or enjoy them.

 

            As regards those exceptional cases – "exceedingly rare" as my colleague defines them – when there might be justification for exercising the power, I concur with the solution proposed by my colleague, according to which the exercise of the power should be conditional upon obtaining prior approval from the Attorney General, accompanied by an approbative decision of the Government or its ministerial committee.

 

            I therefore concur in the opinion of my colleague, including his findings with regard to the prospective application of the restraints therein, as set out in paras. 41(a) and (b) of his opinion.

 

President M. Naor

 

1.         I concur in the judgment of my colleague President (ret.) A. Grunis. In my opinion, it is very doubtful whether there can, in fact, be an "exceedingly rare" case, in the words of my colleague, where it will be justified to implement the Law in respect of properties in East Jerusalem of the residents of Judea and Samaria.

 

2.         I would explain that in my view, even someone whose case has already been considered in the past by the Special Committee is entitled to apply to it again further to the fundamental observations in this judgment. As my colleague has noted, its decision is subject to review by the High Court of Justice.

 

Deputy President E. Rubinstein

 

A.        I accept the result reached by my colleague President (ret.) A. Grunis in his comprehensive opinion. This is a complex issue which involves the intricacies of the political situation in our region for which a solution has unfortunately not yet been found, and it touches on other issues involved in the dispute with our neighbors, including the refugee question, which is one of the most difficult issues, and the definition of "absentees' property" has a certain relevance thereto. As evidence of this is the fact that, over the years, various different parties have considered the matter, including attorneys general, as my colleague described, and they have sought a modus operandi that will be as fair as possible to all those concerned. That is to say that they will not go into the delicate political issues that go beyond the legal action but will be cautious and moderate in the operative implementation of legal absenteeism; and as my colleague now proposes, the same should only be with the approval of the Attorney General and the Government or a ministerial committee. That is to say that it will be considered very carefully.

 

B.        An example of the complexity and intricacy involved in the matter of absenteeism, which generally awaits the end of the dispute, is the need that arose when the peace agreement with Jordan was made in 1994 (and I would duly disclose that I headed the Israeli delegation in the negotiations on the peace agreement with Jordan) to enact the Implementation of the Peace Agreement Between the State of Israel and the Hashemite Kingdom Law, 5755-1995. The Law dealt with various matters, but section 6 prescribed as follows:

 

            "(a)     Notwithstanding as provided in the Absentees' Property Law, 5710-1950, with effect from Kislev 7, 5755 (November 19, 1994) property shall not be considered absentees' property merely because of the fact that the owner of the right thereto was a citizen or national of Jordan or was in Jordan after the said date.

 

            (b)       The provision of subsection (a) shall not alter the status of property that became absentees' property in accordance with the said Law prior to the date specified in subsection (a)"

 

            (See CA 4630/02 Custodian of Absentees' Property v. Abu Hatum (2007), para. K, which my colleague also cited.)

 

            Note that in section 6(b), as quoted above, it was provided that "the watershed" for the changes was the date of the peace agreement and no change was made to what preceded it; and in the explanatory notes on section 6 (Draft Laws 5755, 253), it was stated that "the status of properties that were absentees' property before the peace agreement will not alter". Section 6 therefore resolved difficulties that might have arisen in accordance with the legal position existing after making the peace agreement but not in respect of the past – "what was, will be" until times change. So too, mutatis mutandis, in the instant case, cautiously and moderately.

 

C.        I would also concur in principle with the observation of my colleague Justice S. Joubran with regard to the use of the Basic Laws on rights as a tool for the interpretation of the legislation to which the Validity of Laws provision in Basic Law: Human Dignity and Liberty (section 10 of the Basic Law) applies. It provides that "this Basic Law shall not affect the validity of any law in force prior to the commencement of the Basic Law". Basic Law: Human Dignity and Liberty has been with us for more than two decades. During that period, this Court has time and again repeated the rule laid down in Ganimat to which my colleagues have referred, to the effect that "the constitutional radiation that stems from the Basic Law affects all parts of Israeli law. It necessarily influences old law as well" (para. 7 of the opinion of Justice (as he then was) A. Barak; see also A. Barak, “Basic Laws and Fundamental Values – the Constitutionalisation of the Legal System Further to the Basic Laws and its Effects on Criminal Law,” in Selected Writings I 455, 468-469 (5760) (Hebrew)).

 

D.        Further thereto, this principle has been applied in the interpretation of ordinances, statutes and regulations that predate the Basic Law. Thus, for example, it has been held that the Contempt of Court Ordinance (1929) and the Religious Courts (Enforcement of Obedience) Law, 5716-1956 should be interpreted "in light of the provisions of the Basic Law", MCA 4072/12 Anonymous v. Great Rabbinical Court, para. 24 of the opinion of Justice Zylbertal (2013); so too the Crime Register and Rehabilitation of Offenders Law, 5741-1981 (CFH 9384/01 Nasasreh v. Israel Bar, IsrSC 59(4) 637, 670 (2004); The Execution Law, 5727-1967 (CA 9136/02 Mr. Money Israel Ltd v. Reyes, IsrSC 58(3) 934, 953 (2004); The Protection of Privacy Law, 5741-1981 (HCJ 8070/98 Association for Civil Rights in Israel v. Ministry of the Interior, IsrSC 58(4) 842, 848 (2004); the Defence (Emergency) Regulations 1945 (HCJ 8091/14 Center for the Defence of the Individual v. Minister of Defense, paras. 18 and 27 (2014); and so on and so forth. This is ethically anchored in what, in a different context, I happened to call "the spirit of the age" (AA 5939/04 Anonymous v. Anonymous, IsrSC 59(1) 665 (2004)), that is to say, giving case-law expression to the social developments in various spheres.

            It should be emphasized that this has also been laid down concretely with regard to the right of property, which stands at the center of the instant case. In fact, even before the well-known finding of Justice Barak in Ganimat, and even prior to the "constitutional revolution" in CA 6821/93 United Mizrahi Bank Ltd. v. Migdal Cooperative Village, IsrSC 49(4) 221 (1995) [http://versa.cardozo.yu.edu/opinions/united-mizrahi-bank-v-migdal-cooper..., Justice – as he then was – S. Levin held as follows: "With the enactment of Basic Law: Human Dignity and Liberty the normative weight of the right of property has risen to the position of a fundamental right. The provision in section 3 of the said Law that 'there shall be no infringement of a person's property' also carries weight when we come to interpret existing provisions of law…" (ALA 5222/93 Block 1992 Building Ltd v. Parcel 168 in Block 6181 Company Ltd, para. 5 (1994); and see also A. Barak, Legal Interpretation, volume III – Constitutional Interpretation, 560-563 (5754) (Hebrew); S. Levin, The Law of Civil Procedure (Introduction and Fundamentals), 33-35 (second edition, 5768-2008) (Hebrew)).

 

E.         And now to the case before us. There can be no question that the language of the Absentees' Property Law, 5710-1950 is not consistent with the right of property in section 3 of Basic Law: Human Dignity and Liberty. That infringement is, in the instant case, compounded by section 2 of the Absentees' Property (Compensation) Law, 5733-1973, which, as the President (ret.) stated, does not permit residents of the territory of Judea and Samaria to claim compensation for the properties that have been transferred to the Custodian of Absentees' Property. Indeed, under the provision of section 10 of the Basic Law we do not set upon a review of the constitutionality of the infringement: whether it is consistent with the values of the State of Israel, whether it is for a proper purpose and whether it is proportional (section 8 of the Law); and my colleague discussed at length the purpose of the Law and its answer to a complex problem that has not yet been resolved, but it can be said that what is called the "right of return" argument, with all its extensive derivatives, cannot be resolved by judicial interpretation. At the Camp David Summit in 2000, I was a member of the Israeli delegation and chaired the subcommittee that dealt with the subject of the refugees, and there was no doubt in Israel's position (which was also supported by the USA) that denied the very basis of that right as being "national suicide". Indeed, based on the case law that the Court has restated numerous times as aforesaid, the provisions of the relevant statute are to be interpreted in accordance with Basic Law: Human Dignity and Liberty. In the instant case, it appears that my colleague the President, despite not expressing an opinion on interpretation along the lines of the Basic Law in accordance with that stated in Ganimat, did in fact draw, what in my opinion is, a proper balance in accordance with the Basic Law when he determined the application of the Absentees' Property Law to the properties involved herein, and that in the instant circumstances, limited use should be made of the Absentees' Property Law, subject to various authorizations and approvals, and after the options included in other statutes have been exhausted (para. 33 of the President's opinion). I have considered it proper to add the foregoing in order to emphasize the importance of the determination in Ganimat and the scope of its application.

 

F.         Given the foregoing, I therefore concur in the opinion of my colleague President (ret.) A. Grunis, which balances between not upsetting a complex legal position, on the one hand, and great caution on the other, by means of a dual safety belt in operative decisions concerning the implementation of the Law in individual circumstances.

 

Justice H. Melcer

 

1.         I concur in the opinion of my colleague President (ret.) A. Grunis and with the remarks of my colleagues. Nevertheless, I am allowing myself to add a few comments of my own.

 

2.         My colleague President (ret.) A. Grunis writes in para. 20 of his opinion, inter alia, as follows:

 

            "In my opinion, it is certainly possible that at least some of the arrangements in the Law (the Absentees' Property (Compensation) Law, 5733-1973 – my clarification – H. Melcer), were they enacted today, would not meet the constitutional criteria. Nevertheless, in the instant case, the provisions of the limiting paragraph are not such as to help or to alter the conclusion with regard to the application of the Law in the cases under consideration here. This is in view of the Validity of Laws rule in section 10 of Basic Law: Human Dignity and Liberty, according to which the Basic Law does not affect the validity of any law that existed prior to its entry into force. This provision does not make it possible to find that any provision of the Law is void ".

 

            In para. 34 of his opinion President (ret.) A. Grunis goes on to say, in respect of the conclusions reached by him:

 

            “Prima facie, a ruling similar to that reached by us could also have been reached by the course delineated in the Ganimat case, that is to say by adopting a new approach to the interpretation of the Absentees' Property Law along the lines of the Basic Laws, despite the Validity of Laws rule in section 10 of Basic Law: Human Dignity and Liberty. However, since the determinations with regard to the Absentees' Property Law and its interpretation do not depend upon the Basic Law, there is no need to consider a move based on section 10 as aforesaid (see HCJ 7357/95 Barki Feta Humphries (Israel) Ltd v. State of Israel, IsrSC 50(2) 769, 781 (per Justice M. Cheshin) (1996)). As aforesaid, my decision does not relate to the constitutional aspect or the validity of the provisions of the Absentees' Property Law, but is at the administrative level concerning the way in which the powers by virtue thereof are exercised. Incidentally, it should to be noted that human rights existed before the Basic Laws, and those rights are, in my opinion, more than sufficient to lead to the conclusion that we have reached.”

 

 

            Although it was not necessary in all the circumstances herein specifically to consider a move based on section 10 of Basic Law: Human Dignity and Liberty, the same was possible, and it also supports the result and is even proper, as was stated by my colleagues: Deputy President E. Rubinstein, Justice S. Joubran and Justice E. Hayut.

 

            Prof. Aharon Barak recently developed an approach of this type in the interpretation given by him to section 10 of the said Basic Law in his paper, Validity of Laws (an article that is due to be published in the Beinisch Volume – hereinafter referred to as "Validity of Laws"). Further to Prof. Barak's said article, I too stated in my opinion in FH 5698/11 State of Israel v. Mustfafa Dirani (January 15, 2015), as follows:

 

            "Even if the 'Validity of Laws' section contained in Basic Law: Human Dignity and Liberty did apply here, in my opinion that does not mean that the law that has been assimilated as aforesaid, has been "frozen" and it can certainly be altered (according to its normative source and the power to do so) by interpretation or 'adaptation' to the normative environment that has been created further to the values of the Basic Laws, or due to changing times in the world (especially in a case such as this, which involves the war on terror), because 'validity is one thing and meaning is another', see HCJ 6893/05 MK Levy v. Government of Israel, IsrSC 59(2) 876, 885 (2005). In such a case, the "adaptation" or "alteration" should have regard to the 'respect provision' contained in section 11 of Basic Law: Human Dignity and Liberty, and the 'limiting paragraph' of the said Basic Law. See Aharon Barak Human Dignity, The Constitutional Right and Its 'Daughter' Rights, volume I, 392-396 (5774-2014) (Hebrew); Barak, Validity of Laws, the text at footnote 23, and also page 24 ibid. Along these lines, one should also read the development, made by my colleague the President, of the rule that the lawsuit of an enemy national should not be tried by 'adapting it' to the present day and the necessary war on terror, in accordance with the requirements of section 8 of Basic Law: Human Dignity and Liberty" (ibid., para. 16).

 

3.         The practical difference between the foregoing two courses is of importance with regard to the future (in respect of the present, both ways lead to the same result, as aforesaid).

 

            The constitutional course, just like the international-law course, might perhaps in future – if peace settlements are reached with our neighbors – open a way to special arrangements at various different levels on a reciprocal basis, including mutual compensation, as part of a broader package, in view of "the regulatory takings" (to use the American terminology), and the taking of Jewish property in similar circumstances in Arab countries. A somewhat similar process was given expression in legislation further to the making of the peace agreement with Jordan in 1994, of which my colleague the Deputy President, Justice E Rubinstein was one of the architects (see the Implementation of the Peace Agreement Between the State of Israel and the Hashemite Kingdom Law, 5755-1995), and also in some of the countries of Eastern Europe after the changes of regime that occurred there.

 

            Section 12 of the Prescription Law, 5718-1958 (hereinafter: "the Prescription Law”) may be relevant in this respect in the appropriate conditions and with reciprocity. It provides as follows:

 

"In calculating the period of prescription, any time during which the plaintiff was the guardian or ward of the defendant shall not be taken into account".

 

            Also relevant are other provisions of the Prescription Law – section 14 of the statute (which specifically mentions property vested in the Custodian of Absentees' Property in the definition of "party"), and also section 16 of the same law which talks of extending the prescription period after the interruption has ended – in the instant case, according to sections 12 and 14 of the Prescription Law. (For an interpretation of the said sections, see Tal Havkin, Prescription, 213-216, 221-227, 239-240 (2014)(Hebrew)).

 

4.         In conclusion, I would say that the future and the hope that it embodies for peace settlements at this stage raise nothing more than expectations, while the present unfortunately dictates, at most, the legal result that my colleague President (ret.) A. Grunis has presented, in which we have all concurred.

 

Justice E. Hayut

 

1.         I concur in the judgment of my colleague President (ret.) A. Grunis and also the comment by my colleague Deputy President M. Naor, who casts great doubt with regard to the very existence of an "exceedingly rare" case that would justify the implementation of the Absentees' Property Law, 5710-1950, in respect of properties in East Jerusalem that belong to residents of Judea and Samaria. I also share her approach that persons whose case has been considered by the Special Committee in the past should be permitted to apply to it again to review their case in accordance with the principles that have been delineated in this judgment.

 

2.         The examples presented by my colleague President (ret.) A. Grunis in para. 18 of his opinion well illustrate the great difficulty raised by the Law because of its broad scope, alongside the great problems that arise at the international and administrative law levels with regard to its application in cases like those before us (see para. 28 of my colleague President (ret.) A. Grunis's opinion). These difficulties have led us to choose the course of "a rule that is not to be taught"[2] or, to be more precise, "a statute that is not to be taught". This course is perhaps an inevitable necessity given the rigid statutory position that currently exists (cf. Attorney General Directive No. 50.049 of January 1, 1972 with regard to the filing of indictments for an offence of homosexuality in accordance with section 152 of the Criminal Code Ordinance, 1936. Also compare Crim.App. 4865/09 Adv. Avigdor Feldman v. Tel Aviv District Court, paras. 7-8 (July 9, 2009)), but it is important to emphasize that it, too, raises considerable problems because in countries such as ours where the rule of law applies, the provisions of law and the values that the State seeks to apply and enforce are expected to be compatible.

 

3.         Finally, I would concur with the comments of my colleagues Justice S. Joubran, Justice E. Rubinstein and Justice H. Melcer as regards the principles of interpretation to be applied in respect of the legislation that preceded the Basic Laws to which the Validity of Laws provision applies (see, for example, section 10 of Basic Law: Human Dignity and Liberty). These principles of interpretation were considered by this Court in CFH 2316/95 Ganimat v. State of Israel, IsrSC 49(4) 589 (1995), since when it has applied them again in its rulings more than once. In the instant case, my colleague President (ret.) A. Grunis, has, in his own way, reached a result that is consistent with these principles of interpretation, and I have therefore seen no need to expand on the matter.

 

            Decided unanimously as stated in the opinion of President (ret.) A. Grunis.

 

            Given this 26th day of Nissan 5775 (April 15, 2015)

 

 

 

 

 

The President (ret.)

The President

The Deputy President

 

 

 

 

 

Justice

Justice

Justice

Justice

 

 

           

 

 

           

 

                                                                                                                       

 

[1]       Translator’s note: The  Hebrew version of the Absentees' Property Law uses the term "Eretz Israel" (the Land of Israel) which refers, at least in this context, to the territory that became the State of Israel, the West Bank and the Gaza Strip after the 1948 War of Independence. The authorized translation of the Law, prepared at the Ministry of Justice, upon which this translation is based, translates the terms "Eretz Israel" as "Palestine" and "Eretz Israeli" as "Palestinian".

[2] Translators note: A talmudic concept, see, e.g: Babylonian Talmud, Tractate Shabbat 12b; Tractate Eiruvin 7a; Tractate Bava Kama 30b.

Full opinion: 

Amir v. The Great Rabbinical Court in Jerusalem

Case/docket number: 
HCJ 8638/03
Date Decided: 
Thursday, April 6, 2006
Decision Type: 
Original
Abstract: 

[This abstract is not part of the Court's opinion and is provided for the reader's convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.] 

 

This petition puts to the test the question of the Rabbinical Court's authority to adjudicate a property dispute between a couple after the divorce proceeding between them has been completed, and it focuses on an alleged breach of the divorce agreement by one member of the couple. Is the matter within the jurisdiction of the Rabbinical Court or is it within the power of the civil judicial instance; and if the Rabbinical Court does indeed have authority to adjudicate the matter, what is the source of the authority and from where does this authority derive? Is it from the law; is it from the parties' agreement in arbitration or otherwise? And what is the nature of this authority?

 

The Supreme Court, sitting as the High Court of Justice, granted the petition and held (per Her Honor Justice A. Procaccia, with the concurrence of His Honor Vice President (Ret.) M. Cheshin and His Honor S. Joubran) that –

 

The High Court of Justice's intervention in religious court decisions is limited to extreme cases of ultra vires, infringement of the principles of natural justice, departure from the provisions of law aimed at the religious court or when equitable relief is necessary where the matter is not within the jurisdiction of another court or tribunal.  The subject matter of the petition justifies this Court's entertaining the matter on grounds of the Rabbinical Court's exceeding the jurisdiction vested in it.

 

The Rabbinical Court is a state judicial instance, which was established by virtue of the Rabbinical Courts Jurisdiction (Marriage and Divorce) Law, 5713-1953 (hereinafter: "the Rabbinical Courts Jurisdiction Law"), and it derives its power and jurisdiction therefrom, and it has only those jurisdictional powers that the state law has given it.

 

The original powers of the Rabbinical Court were set in the Rabbinical Courts Jurisdiction Law and they are built of exclusive powers by virtue of the law and powers that are parallel to the civil court and the Rabbinical Court that are vested by virtue of the parties' agreement. The case law has recognized the existence of the judicial instance's inherent ancillary power that derives from the original power of the Rabbinical Court by virtue of the law, and in special circumstances grants it jurisdiction to again hear a matter upon which it has ruled in the past.

 

Is the Rabbinical Court vested with jurisdiction to decide a dispute by virtue of the parties' agreement, where such jurisdiction is not in the scope of the statute that empowers the Rabbinical Court or within the ancillary powers that are vested in it? The parties' agreement to vest jurisdiction in the Rabbinical Court might take on two guises: one, simple agreement, irrespective of the provisions the Rabbinical Courts Jurisdiction Law; the other, agreement intended to empower the Court to deliberate and decide on a dispute as an arbitrator. A court's jurisdiction is vested by law and it has no power to derive it from the parties' agreement except were the law itself has seen fit to recognize such agreement in certain circumstances as the source of jurisdiction. A similar approach is also taken with regard to the judicial instance's power to adjudicate by way of arbitration. Since the state judicial instance merely has the subject matter jurisdiction conferred to it by statute, it is not vested with power to deliberate and adjudicate a matter as an arbitrator by virtue of the parties' agreement, unless it has been expressly given that power by statute. The Rabbinical Court does not have power to hear and decide a matter that is not one of those that is within its exclusive jurisdiction in accordance with the statute or within its parallel jurisdiction, even if the parties have given their agreement to its jurisdiction. According to the same way of thinking, the Rabbinical Court has no power to decide a dispute as an arbitrator by virtue of an arbitration agreement between the parties in a matter which by its nature is not within its legal jurisdiction.

 

Is the respondent's answer against the petitioner within the bounds of the Rabbinical Court's subject matter jurisdiction? The respondent's cause of action is the enforcement of a contractual indemnity provision concerning property in the divorce agreement that obtained the force of a judgement of the Rabbinical Court, further to which the parties' divorce was completed. The source of the Rabbinical Court's exclusive jurisdiction in matters of marriage and divorce in accordance with the Rabbinical Courts Jurisdiction Law does not apply because the subject of the claim is a property matter after the dissolution of the parties' marriage and a matter of "marriage and divorce" is not involved. Nor is it a matter "connected with a divorce suit". The respondent's cause of action is a new one, the subject of which is the enforcement of a divorce agreement or an application for the enforcement of a divorce award, based on a divorce agreement. The Rabbinical Court does not have jurisdiction either by virtue of the parties' agreement pursuant to section 9 of the Law, which deals with the Rabbinical Court's parallel jurisdiction that is vested by virtue of the parties' agreement in matters of personal status according to article 51 of the Palestine Orders in Council or the Succession Ordinance. Subject matter jurisdiction under section 9 is limited solely to the matters mentioned in it – matters of "personal status" as defined in the Palestine Orders in Council or the Succession Ordinance. In a dispute that does not relate to those matters, even the parties' agreement cannot vest jurisdiction in the Rabbinical Court. The Rabbinical Court therefore has no original jurisdiction to hear the respondent's claim.

 

The Rabbinical Court does not have "ancillary" inherent jurisdiction to try the respondent's claim. In the instant case, the Rabbinical Court's ancillary jurisdiction, insofar as it relates to setting aside a divorce award by reason of a defect in making the divorce agreement, that might have given the Rabbinical Court ancillary jurisdiction to try its revocation, is of no relevance. Similarly, the Rabbinical Court has not acquired ancillary jurisdiction by virtue of a material change in circumstances after making the divorce award that justifies setting aside the divorce agreement and the divorce award since the respondent's claim is for the specific performance and enforcement of the divorce agreement. Again, the Rabbinical Court's ancillary jurisdiction to retain jurisdiction in a matter pending before it until the proceedings conducted before it are concluded will not vest it with jurisdiction. The second respondent finally and unconditionally adjudicated herein and awarded the force of judgement to the divorce agreement. A property dispute that has arisen between the parties after the award of judgement gives rise to a new cause of action and necessitates the institution of new proceedings in accordance with the jurisdictional framework prescribed by law.

 

Nor does the Rabbinical Court have jurisdiction to hear the matter by virtue of the doctrine of "continuing jurisdiction". Continuing jurisdiction is vested where an instance has tried a particular matter in the past and in special circumstances need has arisen to set aside or modify an earlier decision due to a material change that has occurred in the circumstances upon which the original decision was based.  The claim seeks to enforce the agreement and has no place in the continuing jurisdiction vested in the Rabbinical Court.

 

The Rabbinical Court does not have ancillary jurisdiction to try the new cause arising further to the divorce agreement in order to interpret the agreement. Having completed and exhausted its power to rule on the matter of divorce, it no longer has ancillary power to interpret the divorce agreement or the divorce award. Moreover, in the instant case no question of interpreting the divorce agreement has arisen and a claim for its enforcement has been brought instead.

 

A rabbinical court cannot be empowered to decide a dispute between litigants in arbitration, in a matter that is not within its subject matter jurisdiction according to the statute. In the instant case, it also appears from the divorce agreement that its contents cannot be construed as an arbitration clause, equal to "an arbitration agreement" between the parties. The power of an arbitrator to decide a dispute between parties derives from an arbitration agreement. The condition precedent for arbitration is the existence of an agreement to refer a dispute to arbitration. If parties have agreed to refer disputes between them to the decision of some entity but it is not clear that a decision in arbitration is involved, then there is no arbitration agreement.

 

By deciding the respondent's lawsuit against the petitioner for the enforcement of a contractual indemnification provision in the divorce agreement, the Rabbinical Courts exceeded the power vested in them by law. Consequently, the decisions of the first and second respondents are void.

 

 

 

Voting Justices: 
Primary Author
majority opinion
majority opinion
majority opinion
Full text of the opinion: 

In the Supreme Court

Sitting As the High Court of Justice                                             HCJ 8638/03

 

Before:

His Honor, Vice President (Ret.) M. Cheshin

Her Honor, Justice A. Procaccia

His Honor, Justice S. Joubran

 

 

 

 

 

 

 

 

The Petitioner:

Sima Amir

 

 

 

 

v.

 

 

 

The Respondents:

1. The Great Rabbinical Court in Jerusalem

 

2. The Regional Rabbinical Court in Jerusalem

 

 

3. Yoseph Amir

 

 

 

 

 

 

 

On Behalf of the Petitioner:

Adv. Michael Korinaldi

 

 

 

 

On Behalf of the Third Respondent:

Adv. Nechama Segal

 

 

 

 

On Behalf Of the Rabbinical Courts System:

Adv. S. Jacoby

 

 

 

 

 

JUDGEMENT

 

Justice A. Procaccia

 

1.         This petition puts to the test the question of the Rabbinical Court's authority to adjudicate a property dispute between a couple after the divorce proceeding between them has been completed, and it focuses on an alleged breach of the divorce agreement by one member of the couple. Is the matter within the jurisdiction of the Rabbinical Court or is it within the power of the civil judicial instance; and if the Rabbinical Court does indeed have authority to adjudicate the matter, what is the source of the authority and from where does this authority derive? Is it from the law; is it from the parties' agreement in arbitration or otherwise? And what is the nature of this authority?

 

2.         The petition concerns the petitioner's motion to vacate the decisions of the Great Rabbinical Court in Jerusalem – the first respondent – of May 4 and June 9, 2003, which dismissed the petitioner's appeal against the judgment of the Regional Rabbinical Court of Jerusalem – the second respondent – of May 27, 2002, and its decisions of March 5, 2001 and June 18, 2002.

 

Background and Proceedings

 

3.         The petitioner and the third respondent (hereinafter: “the respondent") were married in 1980 and have three children. Their relationship became unstable and they motioned the Regional Rabbinical Court of Jerusalem in 1992 in order to arrange for divorce proceedings. As part of that proceeding, the couple requested the Regional Rabbinical Court to approve a divorce agreement that they had made. In the agreement, the couple agreed on the act of divorce, the custody and support of the children, and various financial and property arrangements, as follows: the three children would be in the custody of the wife until reaching the age of 18 (clause 3); the husband would pay child support in the sum of NIS 1,000 per month for all three of the children until they reach the age of 18; the sum of the child support as set in the agreement would not be increased, and in exchange, the husband would transfer his share of the couple’s apartment to the wife, including his share of the apartment’s contents and the gold objects, ownership of which would all be transferred to the wife (clauses 4(a) and (b)); the husband also undertook to discharge the balance of the mortgage loan each month (clause 6(c)). The agreement also included a condition whereby the wife undertook not to sue the husband in any court for an increase in child support, either directly or indirectly, and if the husband were sued, the wife would compensate him in such a way that he would receive half of the apartment, half of its contents and half of the gold (clauses 4 and 5 the agreement). Taking out a stay of exit order inhibiting the husband's departure from the country would also be deemed a breach of the agreement and lead to the same result (clause 13). In order to secure the wife's obligation in accordance with the agreement, a cautionary note would be registered against the apartment, pursuant whereto one half of the apartment would be transferred into the husband's name if he were sued to increase child support. The relevant provisions of the agreement are as follows:

 

                        "4.       Child Support

 

                                    (e)       For the avoidance of doubt and without prejudice to the generality of the aforegoing, child support under the agreement shall unequivocally cover all the children's needs without exception… until the children reach the age of 18.

 

                                    The mother undertakes not to sue the father in any legal instance for an increase in child support or for the satisfaction of any of the children's needs without exception beyond what the father has undertaken in this agreement, either directly (herself) or indirectly (through any institution, entity, authority, person and/or in the name of the minor and/or anyone who now and/or in future has an interest), and if the husband is sued, the wife shall compensate him and he shall receive one half of the apartment, one half of its contents and one half of the gold. The obligation is in perpetuity.

 

                                    …

 

                        5.         Indemnification

 

                                    (a)       The mother undertakes and takes it upon herself not to sue the father in any legal instance whatsoever for an increase in child support or for the satisfaction of any of the children's needs without exception beyond what the father has undertaken in this agreement, either directly (herself) or indirectly (through any institution, entity, authority, person and/or in the name of the minor and/or anyone who now and/or in future has an interest).

 

                                    (b)       If, contrary to the abovementioned, the father is sued for an increase in child support and/or satisfaction of any of the children's needs, whether the lawsuit is brought by the mother and/or the mother in the name of the children or by an entity, authority, institution and/or anyone who now and/or in future has an interest, beyond what the father has undertaken in this agreement, then the mother undertakes to transfer one half of the apartment into the father's name and one half of its contents and one half of the gold. The obligation is in perpetuity.

 

                                    (c)       To secure the wife's obligations in this agreement, a cautionary note shall be registered, pursuant whereto one half of the apartment shall be transferred into the husband's name if the husband is sued to increase child support…"

 

            The agreement also includes a provision with regard to the exclusivity of the Rabbinical Court's jurisdiction in the event of a dispute between them after the divorce, in the following terms:

 

                        "9.       Cancellation of Mutual Claims And/or Complaints

 

                        …

 

                        10.       …

 

                        11.       If after the divorce, differences arise between the couple, they undertake to file the lawsuit solely in the Rabbinical Courts.

 

                        12.       …

 

                        13.       The wife undertakes not to take out a stay of exit order preventing the husband's departure from the country, and taking out such an order shall constitute a breach of this agreement, and the husband shall be entitled to obtain one half of the value of the apartment, of the contents and of the gold.

 

                        …"

 

            The divorce agreement was given the effect of judgement by the Rabbinical Court, and on May 26, 1992 the couple was divorced.

 

4.         About five years later, in June 1997, the couple's children (through the petitioner) filed a child support motion against the respondent in the Jerusalem Family Court (FC 10330/97). The motion was mainly intended to increase the child support upon which the couple had agreed in the Rabbinical Court to NIS 6,700. This was, inter alia, due to the petitioner's claim that the respondent was not paying the mortgage payments as undertaken by him in the divorce agreement. In the answer of defense, the respondent defended the claim on its merits. According to him, he was living off a general disability pension of NIS 1,200 per month, from which he was paying child support. The Family Court (per Judge N. Mimon) held in its judgement that the children's monthly support should be increased to a total of NIS 2,000 for both minor children together, and the sum of NIS 500 for the other child until his enlistment to the IDF; with respect to the minors, it was further held that from the time they reached the age of 18 until they completed their service in the IDF, the child support for them would be reduced by NIS 700, and upon completion of their military service the liability for their support will be terminated; if they do not enlist, the liability for them would be terminated when they reach the age of 18. With regard to the other child, upon his enlistment to the IDF and until his discharge, support of NIS 300 would be payable for him.

 

            On September 20, 1997, about three months after the motion to increase child support was filed in the civil court, the respondent filed a motion in the Regional Rabbinical Court of Jerusalem "for a declaratory judgement and specific performance" of the divorce agreement. In the motion, he pleaded that the petitioner had breached the divorce agreement several times and in several different aspects, as follows:

 

                        "8        (a)       The defendant (the petitioner – AP) filed a motion to increase child support in the name of the minors before this Honorable Court on February 28, 1993 – a motion that was dismissed by the Court

 

                                    (b)       The defendant filed another motion on November 6, 1994 and at the end of that motion the wife again applied for an increase in child support.

 

                                    (c)       The defendant motioned for a stay of exit order that was cancelled on July 21, 1997.

 

                        9.         (a)       The defendant went further, and when she saw that her motions were being dismissed by the Honorable Rabbinical Court, she  filed a motion to increase the child support in the name of the minors in FC 10330/97 in the Jerusalem Family Court.…

 

                                    (b)       As part of the motion in Family Court, the wife applied for a stay of exit order that the Court approved.

 

                                    (c)       Moreover, at about the time she filed the motion, the defendant filed a motion for a stay of exit order on July 22, 1997, after the previous order inhibiting departure from the country had been set aside, and the Chief Execution Officer approved it".

 

            He pleaded that the wife had therefore breached clauses 5 and 13 of the divorce agreement. On the basis thereof, the respondent sued the wife for one half of the apartment and its contents and one half of the gold.

 

5.         After filing his motion to the Regional Rabbinical Court, the respondent traveled abroad for more than two years and abandoned his motion. After returning to Israel, he renewed the motion in the Rabbinical Court. The petitioner pleaded in her defense, that the subject of the motion was " breach of a divorce agreement" and according to the law laid down in HCJ 6103/93 Sima Levy v. The Great Rabbinical Court in Jerusalem, PD 48(4) 591 (hereinafter: "Sima Levy Case") the Rabbinical Court did not have jurisdiction to adjudicate the motion. As for the merits of the motion, the petitioner argued that the respondent had come to court with unclean hands because he had breached the divorce agreement by not paying the mortgage payments as he had undertaken in the divorce agreement. The Regional Rabbinical Court, in its decision of February 25, 2001, referred the issue of jurisdiction raised by the petitioner to the Rabbinical Courts' then legal counsel on rabbinical jurisdiction, Adv. E. Roth, for his opinion.

 

            During the same month (February 2001) the petitioner filed a lawsuit in the Jerusalem Family Court against the respondent for "declaratory judgement as to the revocation of the indemnity provision in the divorce agreement" (FC 10331/97). This was based, inter alia, on the argument that the respondent breached the divorce agreement by not paying the mortgage payments as he had undertaken in the divorce agreement. The petitioner further requested that the Court declare the revocation of clauses 11 and 13 of the divorce agreement, pleading that they were "contrary to public policy and the law". The respondent argued in his defense that the claim should be summarily dismissed due to the proceedings conducted on the same issues in the Rabbinical Court.

 

            On March 4, 2001, and before the Family Court had awarded its decision on the respondent's motion for the summary dismissal of the petitioner's claim, the opinion of the legal counsel on rabbinical jurisdiction, Adv. Roth, was filed in the Rabbinical Court. In his opinion, with reference to clause 5(b) of the divorce agreement, the Rabbinical Court did not have jurisdiction to adjudicate the respondent's motion after the divorce. Nevertheless, he believed that clause 11 of the divorce agreement could be treated as an arbitration clause in accordance with the Arbitration Law, 5728-1968 (hereinafter: "the Arbitration Law"). By virtue of the rules of arbitration, the Rabbinical Court is empowered to adjudicate the suit as an arbitrator in accordance with the rules and restraints governing an arbitrator. He further added that, in his opinion, it was unnecessary for the couple to sign an arbitration deed, since clause 11 of the divorce agreement constituted an arbitration deed in all respects.

 

            Following the opinion of the legal counsel, Adv. Roth, the Regional Rabbinical Court decided on March 5, 2001 that it was vested with jurisdiction to adjudicate the respondent's suit "since in the Court's opinion clause 11 constitutes an arbitration deed".

 

            On May 14, 2002, and before the Regional Rabbinical Court's judgement had been awarded in the respondent's suit, the Family Court awarded its decision in the respondent's motion for the summary dismissal of the petitioner's suit. It reviewed the question of the Rabbinical Court's jurisdiction to try the respondent's claim, whether as a court empowered by virtue of statute or as an arbitrator, but it decided to stay the award of its decision on jurisdiction on the ground that:

 

                        "Mutual respect of legal instances requires that after a decision has been awarded by the Rabbinical Court holding that it has jurisdiction to adjudicate the suit that has been filed with it as an arbitrator, the award of a decision on jurisdiction should be stayed until the proceedings in respect of jurisdiction have been exhausted by the plaintiff, who will perhaps wish to act by applying on appeal to the Great Rabbinical Court or by applying to the High Court of Justice to clarify whether her position with regard to jurisdiction will be allowed, or even by motioning to vacate an arbitral judgment as provided in section 24 of the Arbitration Law…"

 

            On May 27, 2002, the Regional Rabbinical Court awarded its judgement in the respondent's motion. The court was divided in its opinion between the three judges, and the decision was made, in the words of the judgement, in accordance with –

 

                        "the third opinion, which was the decisive one of the three, since there are several doubts regarding the interpretation of the agreement, and there is a doubt as to whether it constitutes a breach according to Halachic authorities and the circumstances. Therefore, the case should be decided according to the law, and if the apartment has already been transferred into the wife's name, it is not possible to take away her ownership of the apartment because of a doubt, and of course the wife is liable to comply with all of the obligations in the divorce agreement.... If the apartment has not yet been transferred, it is not possible to order the plaintiff ... to transfer his share of the apartment into the wife's name ....

If the plaintiff has already signed a power of attorney and delivered it to the wife, it would appear that the wife cannot be precluded from exercising the power of attorney in order to transfer the plaintiff's share of the apartment into the wife's name…. On the other hand, if the husband still needs to sign transfer documents and the like, he should not be made to help transfer the dwelling into the wife's name in any way whatsoever….

With regards to the gold objects that the wife has received, it would also appear that she cannot be made to return them to the husband because they are in her possession and in this way her possession is valid…"

 

            As mentioned above, according to the Rabbinical Court's decision of March 5, 2001 it decided the respondent's suit as an arbitrator, but on June 18, 2002 it awarded another decision that was headed "Clarification", according to which:

 

                        "The Rabbinical Court makes it clear that it was the Rabbinical Court that approved the agreement and that there was an undertaking that all matters involved in the agreement would be tried solely by the Rabbinical Court. Therefore, since both parties undertook in the agreement, and the Rabbinical Court also approved the agreement, the Rabbinical Court consequently has jurisdiction to hear and adjudicate the matter, and the Rabbinical Court awarded the judgement by virtue of its jurisdiction, and there was no need for the Rabbinical Court to adjudicate the same as arbitrator, and although the Rabbinical Court could also adjudicate the matter as an arbitrator, the Rabbinical Court also had jurisdiction to try the matter as an adjudicating court in accordance with the aforegoing".

 

6.         The petitioner appealed to the Great Rabbinical Court against the Regional Rabbinical Court's judgement of May 27, 2002. Her main plea in the appeal was that the Regional Rabbinical Court did not have jurisdiction to adjudicate the respondent's suit, either as a competent court by virtue of the law or as an arbitrator, and its judgement is therefore void. As to the actual merits, she argued that the Regional Rabbinical Court had made an error "of judgement" and "disregarded facts" by not giving proper weight to the fact that it was the respondent who was in breach of the divorce agreement by not making the mortgage payments as he had undertaken in the divorce agreement. Consequently, on that ground too, on the merits of the case, the Regional Rabbinical Court's judgement should be vacated. The respondent also appealed to the Great Rabbinical Court against the said judgement.

 

            The Great Rabbinical Court, in its decision of May 4, 2003, dismissed the petitioner's appeal with respect to jurisdiction and held that the interpretation of the divorce agreement indicated that it concerned the couple's agreement for "property in consideration for child support". That interpretation affects the substance of the complaint that the respondent filed to the Rabbinical Court, and it demonstrates that it is a suit to revoke the divorce agreement as opposed to a motion for the enforcement of an indemnity provision. That being the case, the Rabbinical Court had jurisdiction to adjudicate the respondent's motion by virtue of its original (primary) authority because "indemnification was not involved, but property and child support and the connection between them, and those matters of property division and child support are certainly matters of personal status that are governed by section 9 of the Rabbinical Courts Jurisdiction Law". The Rabbinical Court was also vested with original (primary) jurisdiction to adjudicate the suit in view of clause 11 of the divorce agreement, which provides that if differences arise between the petitioner and the respondent after the divorce, the two undertake to file the motion solely to the Rabbinical Courts. The Rabbinical Court mentions that at the hearing, the respondent also pleaded avoidance of the Get and the divorce because according to him the Get had been given by mistake. Consequently, on that ground too, the Rabbinical Court had original (primary) jurisdiction to adjudicate the claim. According to the Rabbinical Court, it also had jurisdiction by virtue of its "continuing" jurisdiction, because the respondent was "applying expressly for the revocation of the property arrangement as a result of a change in circumstances concerning child support". Finally, the Great Rabbinical Court held that the jurisdiction to adjudicate the respondent's suit was vested in the Regional Rabbinical Court, when "the jurisdiction is the essential jurisdiction vested in the Rabbinical Court, rather than jurisdiction by virtue of the Arbitration Law". The Great Rabbinical Court adjourned the deliberation on the appeal itself to a later date.

 

            On June 9, 2003 the Great Rabbinical Court awarded another decision, this time with regard to the respondent's appeal against the Regional Rabbinical Court's judgement. In its decision, the Great Rabbinical Court ordered the matter to be remitted to the Regional Rabbinical Court for it to try the argument, which had not been tried in the Regional Rabbinical Court, that the petitioner had breached the divorce agreement by suing for increased child support in the Regional Rabbinical Court in 1993.

 

The Petition

 

7.         In her petition before us, the petitioner seeks to set aside the decisions of the Great Rabbinical Court and the Regional Rabbinical Court, according to which the Rabbinical Court had jurisdiction to adjudicate the respondent's motion, both as original (primary) jurisdiction and by virtue of an arbitration clause.

 

            This Court issued an order nisi in the petition.

 

The Parties' Arguments

 

8.         The petitioner's essential argument in her petition herein is that the Rabbinical Court lacks jurisdiction to adjudicate the property dispute that has arisen between her and the respondent in respect of the divorce agreement that was made between them. According to her, the Rabbinical Courts are not vested with original (primary) jurisdiction to adjudicate the suit. Moreover, they do not have continuing jurisdiction to hear the respondent's suit. The respondent's motion to obtain one half of the property, which was transferred to the wife, is based on the cause of enforcing an indemnity provision in the divorce agreement. This cause is based on a plea of breach, if one occurred, after the divorce agreement was made and the judgement of the Rabbinical Court giving it force and effect was awarded, and after the couple had been duly divorced. A subsequent breach of the divorce agreement in respect of property after the parties' divorce cannot be bound in retrospect with the divorce agreement and the judgment that materialized in the past. From the divorce and onwards, motions that relate to the breach of the divorce agreement are not a part of matters of personal status. The Rabbinical Court therefore lacks jurisdiction to adjudicate them, and jurisdiction in respect of them is vested in the civil court. Moreover, it was argued that the respondent himself breached the divorce agreement by not paying the mortgage payments as he had undertaken to do in the divorce agreement. His breach of the agreement has civil-financial character, which also demonstrates that his suit after the divorce is subject to the jurisdiction of the civil, rather than religious, court. The petitioner further pleads that clause 11 of the divorce agreement does not amount to an arbitration clause and does not purport to establish an agreement for arbitration. Instead, its wording and contents merely demonstrate its determination, by agreement of the parties, to which court the couple's motions after the divorce should be filed. This agreement, per se, does not vest jurisdiction in the Rabbinical Court. In view of all of this, and based on other grounds too, upon which we shall not focus, the Rabbinical Courts' decisions on jurisdiction are void.

 

9.         The respondent's position in his petition is that the Rabbinical Court is vested with jurisdiction to adjudicate the suit he filed to it. In this respect, he relies on the provision of the divorce agreement, according to which the parties expressly agreed to vest the Rabbinical Court with jurisdiction to try any future dispute between them concerning the agreement. He pleads that, according to case law, a matter that can be bound from the outset with the divorce suit, such as property matters, and it was agreed in the divorce arrangement to vest jurisdiction in the Rabbinical Court in respect to them, is also within its jurisdiction after the divorce. He further asserted that the meaning of the cause of the action that he filed was the revocation of a conditional undertaking given under the agreement, as opposed to the enforcement of a contractual indemnification arrangement. That is to say that the respondent entered into a conditional undertaking to transfer property to the petitioner in consideration for the child support being set in a binding amount and not being increased, and for motions not to be brought in this matter. Since that condition had not been fulfilled, the property undertaking that he had given is void. A contractual indemnification provision is not to be treated in the same way as a conditional property undertaking, with regard to which the Rabbinical Court has continuing jurisdiction even after the divorce. Alternatively, it is argued, the Rabbinical Court has jurisdiction to entertain the respondent's suit according to the law of arbitration, by virtue of clause 11 of the divorce agreement, which constitutes an arbitration agreement, even if the word "arbitration" is not mentioned in it.

 

Judgment

 

10.       This Court's intervention in the decisions of religious courts is limited to extreme cases of ultra vires, infringement of the principles of natural justice, departure from the provisions of law aimed at the religious court or when equitable relief is necessary where the matter is not within the jurisdiction of another court or tribunal (sections 15(c) and (d)(4) of the Basic Law: the Judiciary; HCJ 323/81 Vilozni v. The Great Rabbinical Court, PD 36(2) 733; HCJ 1689/90 E'asi v. The Sharia Court, PD 45(5) 148, 154-155; HCJ 1842/92 Blaugrund v. The Great Rabbinical Court PD 46(3) 423, 438; HCJ 5182/93 Levy v. The Rehovot Regional Court PD 48(3) 1, 6-8).

 

            The subject matter of the petition herein justifies this Court's entertaining the matter on grounds of the Rabbinical Court's exceeding the jurisdiction vested in it for the reasons explained below.

 

The Question

 

11.       The couple signed a divorce agreement containing property and child support arrangements. In the scope of the property arrangements, they agreed to limit and not increase child support. They added a condition according to which if motions to increase child support were filed by the wife, directly or indirectly, or if she took out stay of exit orders, these actions would have certain property consequences. The parties further agreed that if differences arose between the couple after the divorce, they undertook to conduct the claims solely in the Rabbinical Courts. Indeed, after the divorce, disputes did arise between the parties following motions to increase child support that were brought against the husband, and stay of exit orders were taken out. Further thereto, the husband filed a suit in the Rabbinical Court claiming a breach of the divorce agreement by the wife and requesting to receive one half of the property because of that breach. In those circumstances, after the couple's divorce, is the Rabbinical Court vested with jurisdiction to adjudicate the husband's property suit, which is based on an alleged breach of the divorce agreement by the wife? Or is the exclusive jurisdiction to deliberate and adjudicate that claim vested in the civil court?

 

            The subsidiary questions that are to be decided can be divided into two:

 

            First is whether the Rabbinical Court has jurisdiction by virtue of the law to adjudicate a property claim based on a breach of the divorce agreement after the divorce has been completed, by virtue of one of the following:

 

            (a)       Original-primary jurisdiction by virtue of statute to hear and adjudicate issues pertaining to the divorce;

 

            (b)       the Court's "ancillary" jurisdiction to adjudicate matters connected with the divorce after its completion, as interpreted and expanded by case law.

 

            The Second is whether the Rabbinical Court has jurisdiction to decide a property claim based on the breach of a divorce agreement by virtue of the parties' agreement, and what legal significance is to be given to this agreement.

 

            We shall consider these questions.

 

The Starting Point

 

12.       The starting point underlying the analysis of the Rabbinical Court's scope of jurisdiction is based on several fundamental assumptions:

 

            First, the Rabbinical Court is a state judicial instance, which was established by virtue of the Rabbinical Courts Jurisdiction (Marriage and Divorce) Law, 5713-1953 (hereinafter: "the Rabbinical Courts Jurisdiction Law"), and it derives its power and jurisdiction therefrom. As such a state judicial instance, the bounds of the Rabbinical Court's powers are defined and fashioned in accordance with the state law.

 

            Second, every state judicial instance, including the religious court, has merely those jurisdictions that the state law has granted it; it is the statute that established it, and it is the one that defined its powers and assigned them to it. In doing so, the statute assumed, as part of the basic concept of democratic government, that in the granting of judicial powers also lay judicial limitations. Anything that has not been granted to the judicial instance is outside and beyond its power, and it must not surpass its acknowledged boundaries and into areas that have not been entrusted to it and go beyond its responsibility. That is the principle of legality that characterises the structure of democratic government, upon which rests the perception of the status of the government authorities, including the courts. It is on the basis of this principle that the realm of jurisdiction that is vested in the state judicial instances, of which the Rabbinical Courts form part, extends.

 

            Third, the definition of the judicial powers of the various different courts, including the Rabbinical Courts, derives from statute, and statute is subject to interpretation by case law. The case law's interpretation of the extent of the powers vested in the judicial instance is intertwined with the provisions of the statute as the primary source of the power vested in the judicial instance, and it is intended to serve its purpose. In reviewing the boundaries of the religious court's power we shall therefore assume that the religious court is vested with the powers that have been granted to it by the statute, as they have been interpreted by case law, and it has only what the law has given it. As the Court stated (per Justice Landau) in HCJ 26/51 Menashe v. The Chairman and Members of the Rabbinical Court in Jerusalem, PD 5 714, 719:

 

                        "The Rabbinical Courts of our country exist in accordance with the general law, which determines their place in the state courts system, and the questions relating to the spheres of their jurisdiction should generally be resolved in accordance with the same principles as govern other courts".

 

            This is what distinguishes Rabbinical Courts from arbitrators, internal tribunals and voluntary tribunals, which are not established by virtue of statute but mainly by virtue of contract or regulations, and the scope of their jurisdiction is determined pursuant thereto. These entities are essentially governed by the principles of the private law that creates them and they are not part of the country's state judicial system.

 

            As Justice Zamir stated in HCJ 3269/95 Yosef Katz v. The Jerusalem Regional Rabbinical Court, PD 50(4) 590, 602:

 

                        "The Rabbinical Court is established by virtue of statute and its jurisdiction derives from the statute. Its budget comes from the State Treasury and its judges receive salaries like state employees; it sits in judgement beneath the symbol of the State and it writes its judgements on State paper; the orders that it issues speak in the name of the State and are enforced by the State. The Rabbinical Court is not a private entity but a state institution. It is therefore subject to public law and review by the High Court of Justice. Amongst other things, the Rabbinical Court is obliged to respect and observe the fundamental principle that governs every government agency, namely the principle of legality. According to that principle, the Rabbinical Court has nothing other than the power granted to it in accordance with the statute" (emphasis added).

 

            In this respect Justice Cheshin stated in the Sima Levy Case (ibid, p. 616):

 

                        "The legal system takes a grave view of a judicial entity acting beyond the bounds set for it by the law; hence, the case law holds that a lack of subject matter jurisdiction plea stands out and the court will consider it at any stage of the litigation, even where a party first raises it on appeal".

 

            (See also HCJ 816/98 Eminoff v. Eltalaff, PD 52(2) 769, 796-7; HCJ 512/81 The Hebrew University Archaeology Institute v. The Minister of Education, PD 35(4) 533, 543-4; HCJ 30/76, MF 150/76 Siho v. The Karaite Jewish Community Religious Court, PD 31(1) 15, 17-18.)

 

            The state judicial system, and its various different courts, both civil and religious, is built on common norms that govern all its agencies. Thus, for example, it has been held in the past that the fundamental principles that govern civil judges also apply to rabbinical judges. The rabbinical judge, like the civil judge, is part of the judicial authority and in his position he is subject to the same basic rules as obligate any judicial officer:

 

                        "He is not an arbitrator between parties who voluntarily apply to him. He operates by virtue of state law and his authority extends over the whole public with all its diversity, opinions and views. Like a civil judge, a rabbinical judge enjoys independence in matters of judgement. The laws concerning conditions of service, immunity, appointment, discipline and the like that govern the rabbinical judge are very similar to those that govern a civil judge. Like the civil judge, so too the rabbinical judge must, by his action, ensure the public's trust in his judgement. The public is not only the religious public. The rabbinical judge deals with the whole people and he must by his conduct ensure the trust of the whole people, both secular and religious". (Per Justice Barak in HCJ 732/84 MK Tzaban v. The Minister of Religious Affairs, PD 40(4) 141, para. 16.)

 

            In this context, case law has also drawn a clear distinction between a person's fitness as a rabbinical judge of the Israeli Rabbinical Court and his fitness as a community rabbi. On enactment of the Dayanim (rabbinical judges) Law a clear separation was created between judicial and rabbinic functions, and a mix between the two in judicial work is no longer consistent with the concept of state law. In the words of the Minister of Religious Affairs Warhaftig, when he presented the Dayanim Law draft on first reading in the Knesset, as cited in the Tzaban Case:

 

                        "With the establishment of the State of Israel we adopted this course. We distinguished between those functions and separated between rabbis and rabbinical judges" (Knesset Proceedings Session 5457, 1954, p. 2182).

 

 

 

            As Justice Goldberg added on this subject in the Tzaban Case:

 

                        "The main power of the Rabbinate rests in its traditional authority over those who come 'to seek God', whilst the rabbinical judges' authority when sitting in judgement does not depend on the wishes of the litigants but is enforced in the context of the judicial system prescribed for it by the legislature. In this sphere, the rabbinical judges perform the function of 'judging the people', with its varied opinions and views".

 

 

            The religious function of the rabbinical judge as rabbi is not intertwined with the judicial function that he performs as a rabbinical judge and is separate from it. The Rabbinical Court cannot therefore rely on its religious power in order to assume jurisdiction in a matter that exceeds its powers and authorities in accordance with state law (Schiffman, Family Law in Israel, 5755, Vol. I, p. 42).

 

            Against this background there is difficulty with the argument that is sometimes made that the Rabbinical Court might perform a dual function: on the one hand, a state judicial function imposed upon it by virtue of state law, and on the other hand, a religious court in monetary matters by virtue of the parties' agreement. Like any public entity that performs a function in accordance with the law, so the Rabbinical Courts, which operate by virtue of statute must also discharge the responsibility owed by them by virtue of statute and decide the matters entrusted to them. As part of the state judicial system, they possess only the jurisdiction that the statute has placed in their hands. That is the essence of the principle of legality that underlies public administration and the judicial system (Katz Case, ibid, p. 607); hence, even if Jewish law and tradition permit a Rabbinical Court to adjudicate and decide disputes in a certain manner, that does not suffice to authorize it to do so because "the Rabbinical Court, as a state institution, must act within the authority vested in it by state law" (Katz Case, ibid, p. 607). To the same extent, a civil court, which is part of the judicial authority, may not assume an authority or function that does not derive from state law (Tzaban Case, ibid, p. 152).

 

            It is against this background that we shall examine the question of the Rabbinical Court's jurisdiction to decide the respondent's property suit against the petitioner based on a breach of the divorce agreement, and the relief deriving therefrom. A comprehensive analysis of the issue of jurisdiction in a similar context can be found in the judgement of Justice Cheshin in the Sima Levy Case and it will guide and direct us.

 

The Rabbinical Court's Original – Primary Jurisdiction

 

13.       The original primary powers of the Rabbinical Court were set in the Rabbinical Courts Jurisdiction Law and they are built on two tiers: exclusive powers by virtue of the statute; and parallel powers of the civil court and the Rabbinical Court that are vested by virtue of the parties' agreement. The exclusive powers comprise matters of marriage and divorce, as well as matters that are duly bound up in the motion for divorce, including wife and child support. Parallel jurisdiction that is vested by agreement relates to matters of personal status in accordance with article 51 of the Palestine Orders in Council and the Succession Ordinance. The relevant provisions are as follows:

 

                        "1.       Jurisdiction in matters of marriage and divorce

 

                        Matters of marriage and divorce of Jews in Israel, nationals or residents of the State, shall be under the exclusive jurisdiction of rabbinical courts.

 

                        …

 

                        3.         Jurisdiction in matters incidental to divorce

 

                        Where a suit for divorce between Jews has been filed in a rabbinical court, whether by the wife or by the husband, a rabbinical court shall have exclusive jurisdiction in any matter connected with such suit, including support for the wife and for the children of the couple.

 

                        …

 

9.         Jurisdiction by consent

 

In matters of personal status of Jews, as specified in article 51 of the Palestine Orders in Council, 1922 to 1947, or in the Succession Ordinance, in which a rabbinical court does not have exclusive jurisdiction under this Law, a rabbinical court shall have jurisdiction after all parties concerned have expressed their consent thereto."

 

The Rabbinical Court's powers – both the exclusive ones (marriage, divorce and matters bound with divorce) and the jurisdiction in accordance with the parties' agreement in matters of personal status – are original-primary powers by virtue of the statute to hear and rule on the matters that fall within the scope of those powers.

 

Power Ancillary to Original Jurisdiction

14.       The Case law has recognized the existence of a judicial instance's inherent ancillary power that derives from the original power of the Rabbinical Court by virtue of the statute and in special circumstances grants it jurisdiction to again hear a matter upon which it has ruled in the past. Such is, for example, the jurisdiction of the civil and religious courts to vacate a judgement awarded by them that is based on an agreement between the parties, in the making of which there has been a defect. Such a material defect might lead to the revocation of the agreement and therefore also to revocation of the judgment that rests upon it, and the instance empowered to decide its revocation is the one that rendered the judgment (HCJ 124/59 Glaubhardt v. The Haifa Regional Rabbinical Court, PD 13 1490; CA 151/87 Artzi Investment Co. v. Rachmani PD 43(3) 489, 498-500). Additional expression of such ancillary jurisdiction occurs when there is a material change in the circumstances of the matter, that has occurred after the award of judgement by consent, which makes its continued performance unjust (Sima Levy Case, ibid, pp. 605-6; CA 442/83 Kam v. Kam PD 38(1) 767, 771; CA 116/82 Livnat v. Tolidano PD 39(2) 729, 732; CA 219/87 Rachmani v. Shemesh Hadar, Building Company Ltd et al. PD 43(3) 489, 498-500). The recognition of this ancillary jurisdiction is intended to bring about a proper balance between the judgment’s finality on the one hand, and the interest not to leave in effect a judgment, the enforcement of which has become extremely unjust due to a change in circumstances. Inherent jurisdiction is also vested in the judicial instance, including the Rabbinical Court, to retain jurisdiction in respect of a matter that is pending before it until the proceedings have been completed. So long as final judgement has not been awarded, jurisdiction continues until the judicial court has completed its work. Once a final, unconditional judgment has been awarded, the work is completed (Sima Levy Case, p. 607; CA 420/54 Ariel v. Leibovitz PD 9 1337; ALA 2919/01 Daniel Oshrovitz v. Yael Lipa (Fried) PD 55(5) 592; J. Zussman, The Civil Procedure (seventh edition, 5755) 550).

One of the expressions of ancillary jurisdiction relates to the existence of the Rabbinical Court's "continuing jurisdiction", the essence of which is that, under certain conditions, where the Rabbinical Court has in the past heard a particular matter, its continuing jurisdiction to hear it again will be recognized. The continuing jurisdiction also derives from the inherent power of the judicial instance. Its basic purpose is to give expression to the duty of mutual respect and the need for harmony between judicial instances where there is parallel jurisdiction between them, and in order to avoid parties running from one judicial instance to another. It has nevertheless already been explained that continuing jurisdiction is not intended to undermine or derogate from the original powers vested in the judicial instances in accordance with statute. Its purpose is essentially "to vest power to vacate or modify an earlier decision due to a change that has occurred in the circumstances upon which the first decision was based" (per Justice Cheshin in the Sima Levy Case, ibid, p. 608, 610). Such are matters of child support and custody, which by their nature are subject to material changes of circumstance, and the original judicial instance therefore has inherent jurisdiction to reconsider them when the appropriate conditions arise.

It should be made clear that no inherent power has been recognized for a civil or religious court to exercise its original authority again in order to interpret a judgement awarded by it. Hence, a Rabbinical Court that has granted a divorce does not have inherent jurisdiction to interpret the divorce agreement and the judgement that awarded it force and effect (Sima Levy Case, ibid, pp. 612-13).

These are the characteristics of the original jurisdiction that is vested in the Rabbinical Court in accordance with the statute, alongside its ancillary powers that are sparingly exercised in special circumstances by virtue of its inherent jurisdiction, in order to complete the judicial act and make it a complete and just deed.

We shall now examine the question of whether the Rabbinical Court has jurisdiction to adjudicate a dispute by virtue of the parties' agreement, where such jurisdiction is not set in the statute empowering the Rabbinical Courts, and is not within the scope of the ancillary jurisdiction vested in it.

The Rabbinical Court's Jurisdiction by Virtue of the Parties' Agreement

15.       The parties' agreement to vest jurisdiction in the Rabbinical Court might take on two guises: one, simple agreement to grant the Court jurisdiction in a particular case, regardless of the provisions the Rabbinical Courts Jurisdiction Law; second, agreement intended to empower the Court to hear and rule on a dispute as an arbitrator. Can such agreement by the parties vest power in the Court that is not granted to it by the empowering statute or embodied in its ancillary powers?

The Israeli state judicial system and the various different judicial instances, derive their powers from statute. It is the statute that establishes them, it is what delineates the bounds of their activity and it is what defines the sphere of their subject matter and territorial jurisdiction. This is also the case in respect to the civil judicial instances; and so it is with respect to the special judicial systems, including the courts of Israel's different religious communities. These include the Rabbinical Courts in Israel.

By defining the powers of the various different judicial instances in Israel, the statute intended not only to delineate the function and responsibility of the system and its various different arms. It also sought, at the same time, to deny the power of a judicial instance to hear and adjudicate a matter which it was not charged with by the statute and which is not within its inherent jurisdiction. The definition of the judicial instances' powers has a dual dimension, both positive and negative: it constitutes a source of power and responsibility on the one hand, while denying the exercise of authority and power that have not been so conferred; the judicial instance has only what the statute that established it has vested in it, and insofar as it has been made responsible to adjudicate disputes within the scope of the power vested in it, it is under a duty that derives from the statute and the concept of democratic government not to try or adjudicate a matter that is beyond its statutory power.

A preliminary and mandatory condition for the satisfactory activity of any judicial system is a clear and exhaustive definition of the framework of powers and the apportionment of functions that rest with its various different instances. Without an exhaustive and specific definition of powers the systemic structure, built in accordance with the statute, is blurred and the stability of its functioning is not secured. The harmony necessary in the area of operation of the different judicial arms and the relationship between them is impaired; the allocation of professional, administrative and budgetary resources to the different instances is disrupted, and direct harm might occur to the efficacy of the judicial system and the level of judicial performance. The uniqueness of the responsibility owed by the judge, which requires the existence of a clear framework of authority, alongside which is the responsibility and duty to rule, becomes blurry. Thus, recognizing the power of a judicial instance to adjudicate matters, the power and responsibility for which have not been legally transferred to it, might materially disrupt the internal balance required in the structure of the judicial system and severely undermine its standing and performance.

A consequence of the aforegoing is that the power of a judicial instance, as such, be it civil or religious, is acquired by law and it has no power to be derived from the parties' agreement, except where the statute itself has seen fit to recognize such agreement in certain circumstances as a source of the power to adjudicate. Thus, for example, with regard to the effect of the parties' agreement, the law has distinguished between the apportionment of subject matter jurisdiction and territorial jurisdiction between judicial instances. It is willing to acknowledge, in certain conditions, the parties' agreement as a valid source for changing the territorial jurisdiction that has been prescribed. Section 5 of the Civil Procedure Regulations, 5744-1984 provides that when an agreement between parties as to the place of jurisdiction exists, the lawsuit will be filed to the court in that area of jurisdiction. The relative flexibility regarding territorial jurisdiction, and the willingness to recognize the parties' agreement as the source of such jurisdiction, stems solely from the statute and derives its power from its provisions. That is not the case in respect of subject matter jurisdiction. Generally, the law does not recognize that the parties' agreement has power to depart from the rules of subject matter jurisdiction, as crafted by state legislation.

A similar approach is also taken with regard to the judicial instance's power to adjudicate by way of arbitration. Since the state judicial instance merely has the subject matter jurisdiction conferred to it by statute, it is not vested with power to hear and rule a matter as an arbitrator by virtue of the parties' agreement, unless it has been expressly given that power by statute. In general, a judicial instance is not supposed to adjudicate a matter that is referred to it as arbitrator. However, in certain circumstances, the law has expressly recognized the power of a civil instance to adjudicate a dispute in departure from the ordinary rules of procedure. Thus, for example, in the area of small claims, section 65 of the Courts Law (Consolidated Version), 5744-1984 provides that if a lawsuit has been filed in the small claims court, the judge may, with the parties’ consent, try the claim as arbitrator, and the provisions of the Arbitration Law will govern the matter, with certain restrictions; in addition, a court hearing a civil matter has been empowered, with the parties’ consent, to decide a matter before it by way of settlement (section 79A of the Courts Law) or to refer a matter, with the parties' consent, to arbitration or conciliation (sections 79B and 79C of the Courts Law). The said authorities are all vested in the court by virtue of statute. They assume that the subject of the dispute is within the subject matter jurisdiction of the court hearing the case and they give it special procedural means that are intended to facilitate and expedite the process of deciding the dispute and bringing about a just result. The various judicial instances have not been generally empowered by law to hear and decide matters that are not included in the scope of their subject matter jurisdiction by virtue of the parties' agreement, either as arbitrators or otherwise. Since such authority has not been conferred to them, it is, ipso facto, denied and does not exist.

The Rabbinical Courts are an integral part of the Israeli judicial system. They were established by virtue of the Rabbinical Courts Jurisdiction Law and they derive their power and authorities from the state statute. They have nothing other than what is vested in them by the statute, and they are subject to the set of powers of the statute in their judicial work, as interpreted over the years by case law. Along those lines, this Court has held in the Katz Case that the Rabbinical Court is not empowered to issue a Letter of Refusal in monetary matters that is intended to compel a party to submit to the Rabbinical Court's jurisdiction by ostracizing and disgracing the recalcitrant party; and in HCJ 2222/99 Gabai v The Great Rabbinical Court PD 54(5) 401, the opinion was expressed that the Rabbinical Court lacks legal authority to issue a forced settlement decision, without the parties' consent, thus forcing a judgment on the parties without determining facts on the basis of evidence, if it is unable to decide in accordance with the law.

It emerges from this that the parties' agreement as such cannot, per se, grant jurisdiction to the Rabbinical Court, unless, it has been recognized by the law as a primary source of authority. Thus, the parties' agreement has been recognized as a source of the Rabbinical Court's jurisdiction pursuant to section 9 the Rabbinical Courts Jurisdiction Law, in matters of personal status of Jews pursuant to article 51 of the Palestine Orders in Council or according to the Succession Ordinance, which are within the parallel jurisdiction of the Rabbinical Court and the civil instance. Nevertheless, the Rabbinical Court does not have power to hear and decide a matter that is not of the kind found within its exclusive jurisdiction in accordance with the statute or within its parallel jurisdiction, even if the parties have given their consent to its jurisdiction. Such agreement does not derive from a legally recognized source of authority in the law and it cannot, per se, vest jurisdiction in a state judicial instance.

The Rabbinical Court's Jurisdiction by Virtue of an Arbitration Agreement

16.       According to the same line of reasoning, the Rabbinical Court has no power and authority to decide a dispute as an arbitrator by virtue of an arbitration agreement between the parties in a matter, which by its nature is not within its legal jurisdiction. The Court has not been vested with jurisdiction by law to decide disputes as an arbitrator and the parties' agreement cannot vest it with such power.

The issue of the Rabbinical Court's jurisdiction to arbitrate financial and other matters that go beyond the powers granted to it in accordance with the Rabbinical Courts Jurisdiction Law has caused consternation and confusion over the years. It appears that, in reality, the Rabbinical Court assumes the role of arbitrating matters that are beyond the scope of its subject matter jurisdiction (Katz Case, ibid, pp. 606-8; CA 376/62 Bachar v. Bachar, PD 17(2) 881, 882, 885; CA 688/70 Doar v. Hamami, PD 25(2) 396, 399; M. Alon, Jewish Law – History, Sources and Principles, third edition, vol. III, 5748, 1529). Justice Barak considered the inherent difficulty of a state judicial instance's need to adjudicate a dispute by arbitration where it was not empowered to do so by law, saying:

"The first possible argument is that the motion to the Rabbinical Court is like that to an arbitrator and embodied in the Arbitration Law, 5728-1968. That possibility – which has used in practice and can be encored as a year-long custom - raises serious problems in principle. Thus, for example, it can be asked whether it is proper for a judicial entity, whose powers are prescribed by law, to assume additional judicial powers, by being empowered as an arbitrator. Is it conceivable that parties would motion the magistrate’s court to try a pecuniary claim, that is outside its jurisdiction, as an arbitrator? From the state's point of view, is it justifiable to use judicial time and tools (whether of the civil or religious courts) for matters outside the jurisdiction that the law has granted the judicial authorities? Is there no fear that the public be confused as to which decisions the judicial instance has awarded as the government and those that it has awarded as arbitrator?"

(HCJ 3023/90 Jane Doe (a minor) v. The Rehovot Regional Rabbinical Court PD 45(3) 808, 813-14; see also S. Ottolenghi, Arbitration, Law and Procedure (fourth edition, 5765) 167-8; Schiffman, ibid, vol. I, 37.)

In HCJ 2174/24 Kahati v. The Great Rabbinical Court, PD 50(2) 214, this Court (per Justice Dorner) once again referred to the practice, adopted from time to time by the Rabbinical Courts, of deciding disputes as arbitrators in matters that are not within their jurisdiction. It expressed skepticism with respect to the validity of the practice. However, as in the previous case, it again left this question open without making any conclusive ruling, since such a ruling was not necessary in that case (cf. Aminoff, ibid, pp. 792-3).

17.       There is indeed an inherent difficulty in recognizing the Rabbinical Court's power to decide a dispute in a matter on which it has not been given jurisdiction by law (cf. Ottolenghi, Dispute Resolution by Alternative Means, Israeli Law Yearbook, 5752-5753, p. 535, 550-1). In the past, the Mandate government empowered the Rabbinical Courts to act as arbitrators by means of section 10(d) of the Israel Knesset Regulations of 1927, but upon the establishment of the State, the “Israel Knesset”, within its meaning under the Mandate, ceased to exist and it was held that those Regulations no longer had any force or effect (Crim. App. 427/64 Yair v. The State of Israel PD 19(3) 402; HCJ 3269/95, ibid, p. 622-3; Schiffman, ibid, p. 39). It cannot therefore be argued that the said section might serve as the source of the Rabbinical Courts' power as arbitrators. Moreover, upon enactment of the Arbitration Law, it was proposed that an arbitration decision made by a religious court when ruling as an arbitrator would in all respects, except with regard to the appeal, be treated as a judgement of the court sitting in accordance with its jurisdiction prescribed by statute, and that the award would not require confirmation under the Arbitration Law. That proposal was not accepted (Knesset Proceedings 5728, pp. 2966-7).

It is indeed difficult to settle the governing perception that views the judicial system as an arm of government, which derives its power and authority from statute, while acknowledging the possibility that the selfsame system can acquire other subject matter authorities deriving merely from the parties' agreement that do not originate from the empowering law. The Israeli Rabbinical Courts, that are part of the Israeli judicial system, integrate with the said perception and, like the other judicial instances, operate in accordance with the principle of legality of the arms of government (see the dissenting opinion of Justice Tal in the Katz Case, distinguishing between the power of religious courts as a state authority and the power they have, in his opinion, by virtue of Jewish law, which is not connected with state law).

18.       Apart from the essential difficulty inherent in the judicial decision of the Rabbinical Court as an arbitrator, which is not consistent with the principle of legality of the government authorities, other difficulties arise from the said procedural practice. The practice blurs the spheres of the Court's own activity in respect of the procedural basis upon which its decision rests: is it a decision within the scope of the Court's state power that is subject to review by the High Court of Justice in accordance with section 15 of the Basic Law: the Judiciary, or is it an extra-statutory power that is built on a different foundation originating from the parties' agreement and subject to review by a different judicial instance, like the District Court, in accordance with the Arbitration Law (cf. Jane Doe Case, ibid, para. 7)? In more than a few cases the parties might misunderstand the nature of their agreement to vest jurisdiction in the Rabbinical Court as they do not always understand the meaning and implications of their consent. Moreover, usually, in the course of such adjudication, strict attention is not paid to enquiring into the existence of an arbitration agreement or the application of the Arbitration Law and the rules pursuant thereto, such, for example, the mechanism for the confirmation and revocation of an arbitral award and the role of the District Court as the competent instance in accordance with the Arbitration Law (Ottolenghi, ibid, p. 168; Dichovski, The Standing of a Rabbinical Court Dealing with Property Law As Arbitrator, The Jewish Law Yearbook 16-17 (5750-5751) 527; MF 268/88 Delrahim v. Delrahim, DCJ 49(3) 428; SC 2329/99 Kfir v. Kfir, PD 55(2) 518, para. 5). An arbitral judgment made by the Rabbinical Court frequently does not undergo confirmation or revocation proceedings in the District Court as required by the Arbitration Law for the purpose of its execution, and the Rabbinical Court has no power to confirm an arbitral judgment (Kahati, ibid, p. 220; HCJ 5289/00 Mograbi v. The Great Rabbinical Court, Takdin Elyon 2000(2) 581; Kfir Case, ibid, para. 5). Furthermore, a situation in which the District Court, by virtue of the Arbitration Law, might oversee the Rabbinical Court's decisions as an arbitrator might harm the proper balance between the instances and aggravate the tension between the civil and religious judicial arms (A. Porat, The Rabbinical Court As Arbitrator, Kiriat Mishpat II (5762) 503, 521-4; Dichovski Case, ibid, p. 529).

The Rabbinical Court, purporting to act as an arbitrator between the parties, still operates under cover, and with the characteristics, of its state role. To that end it makes use of the court's physical and organizational system, which is financed by the state; it adjudicates disputes as an arbitrator in the scope of the court calendar, as part of its ordinary work; the overall services, the organizational and professional arrangement and the government budget are also used by it in that function, which by its nature does not have a state character. The time that it should devote to matters of personal status in its official capacity is partly assigned by it to a different judicial function that is not for the state, despite appearing to carry the state seal in the eyes of the public at large, who finds it difficult to distinguish between the judicial function and the extra-statutory function performed by the Court. This intermingling of functions is inconsistent with the principle of legality and a correct definition of the functions and powers of a state judicial instance (Katz Case, ibid, p. 608; Schiffman, ibid, pp. 37-8).

19.       Mention ought to be made to the approach of Prof. Shochatman in his paper entitled The Rabbinical Courts' Jurisdiction in Matters Other Than Personal Status (Bar Ilan University Yearbook on Humanities and Judaism, vols. 28-29 (5761) p. 437, p. 449 et seq.). As he sees it, the Rabbinical Court might acquire jurisdiction by virtue of the parties' agreement in matters outside its jurisdiction in accordance with the Rabbinical Courts Jurisdiction Law by virtue of section 15(d)(4) of the Basic Law: the Judiciary, thereby acquiring jurisdiction as an arbitrator. According to that Law, which defines the High Court of Justice's power to review religious courts, the question of a religious court's jurisdiction can only be referred to this instance when it was raised at the first opportunity. The author infers from this that where there is prior agreement between the parties to vest subject matter jurisdiction in the religious court, a party who has so agreed may not later dispute jurisdiction. By virtue of that preclusion the religious court acquires subject matter jurisdiction, and the High Court of Justice is itself precluded from intervening therein. According to this approach, such an agreement vests subject matter jurisdiction and is not limited solely to matters of personal status. It might encompass numerous spheres that are beyond the subject matter jurisdiction of the religious court, as defined in the Rabbinical Courts Jurisdiction Law.

I cannot agree with this position. The interpretation expressed by Prof. Shochatman assumes that it is possible to recognize the existence of subject matter jurisdiction of an Israel state judicial instance by means of the parties' consent, combined with the doctrine of preclusion and estoppel that prevents someone who has agreed to jurisdiction from later disputing it. That approach is fundamentally inconsistent with the principle of legality that obligates judicial instances, including the religious courts. It is not consistent with the starting point whereby subject matter jurisdiction is vested in a judicial instance by a positive arrangement, and its existence is not to be inferred by an indirect interpretation of provisions of law concerning estoppel and preclusion. The Rabbinical Court's powers are granted to it by virtue of the Rabbinical Courts Jurisdiction Law and they cannot be added to by an indirect interpretation of statutory provisions, the purpose of which is not the vesting of power. Moreover, it has already been held (in Sima Levy Case, ibid, p. 618-19) that the element of preclusion emerging from section 15(d)(4) of the Basic Law: the Judiciary was not intended to vest in the Rabbinical Court subject matter jurisdiction that is not vested in it by virtue of the Rabbinical Courts Jurisdiction Law. The said preclusion is based on the assumption that the matter being adjudicated by the Rabbinical Court is of the type that are within the parallel jurisdiction of the civil court and Rabbinical Court, and regarding the latter, jurisdiction is conclusively consummated if both parties have agreed to it. In those circumstances, and only in them, a party's prior agreement or silence, or subsequent denial of jurisdiction, might lead to preclusion with respect to a lack of jurisdiction argument in the High Court of Justice - that and nothing more. An interpretation that takes the doctrine of preclusion out of context, and assumes the existence of a potentially unlimited Rabbinical Court subject matter jurisdiction, the final consummation of which is dependent only upon the parties' agreement, is directly opposed to the principle of legality, upon which the concept of democratic government is based. It is inconsistent with the subject matter jurisdictions vested by statute in the arms of government, including the judicial system.

Alternative Decision-Making Systems

20.       The need of various different circles in the religious world to entertain alternative systems for the resolution of disputes is proper and recognized. Indeed, alternative rabbinical judicial systems that are not associated with the state rabbinical judicial system, which decide disputes between litigants in the community, are recognized. They can be granted powers to act as arbitrators by agreement of the parties. The need of different communities for alternative dispute resolution systems specific to them can be met by reference to internal arbitration frameworks that are not part of the state judicial system, within which disputes can be settled by virtue of the parties' agreement. This alternative course to litigation in the state judicial instances can be developed and strengthened in accordance with the different needs and preferences of the communities. This was considered by Justice Zamir in the Katz Case (ibid, p. 606), who stated:

"As is known, there are still observant Jews who prefer to litigate in matters of property according to religious law before a religious court rather than the state court. The state's law does not preclude that, if both parties to the dispute so desire, and it is even willing to give the force of arbitration to such litigation, if the litigants fulfil the provisions of the Arbitration Law. Indeed, in practice, such courts exist in various communities around Israel, not by virtue of state law or as official institutions but as private entities. That is, for example, the case of the rabbinical court of the Edah Chareidis [the Haredi Community] in Jerusalem. However… in these cases we are not dealing with a private entity but a state court, and the law applies to it just as any other of the state's courts. Like any court, in fact, like any government agency, the Rabbinical Court is also subject to the principle of legality, meaning that it has nothing other than what was granted to it by the law… In this respect, the Rabbinical Court in Jerusalem is distinguished from the rabbinical court of the Edah Chareidis in Jerusalem. The Israeli Rabbinical Court, which has jurisdiction in accordance with the Basic Law: the Judiciary, is not like one of the rabbinical courts of the Jewish communities in the Diaspora. Unlike them, it has the power and authority of a government institution. So too, unlike them, it is also subject to the restrictions that apply to any government institution".

Consensual Resolution – Looking to the Future and to the Past

21.       The scope of the Rabbinical Courts' subject matter jurisdiction to decide a dispute by virtue of the parties' agreement outside the framework of the law looks to the past and the future. It calls into question the validity of the Court's rulings based on the parties' agreement outside the scope of the statute, not merely henceforth, looking to the future, but also with respect to the past. The outlook to the future seeks to find a binding definition of the limits of the Rabbinical Court's jurisdiction and to strictly observe those limits hereafter. However, the outlook to the past calls into question the binding legal validity of the Rabbinical Court's decisions that have been made over the years by virtue of the parties' agreement as aforesaid. That issue is far from simple; there is no need to decide it here, and it will wait until its time comes.

From the General to the Particular

22.       Let us return to the respondent's suit against the petitioner in the Rabbinical Court and examine whether it is within the subject matter jurisdiction of the Rabbinical Court; the test of jurisdiction depends on the nature of the cause of action, and whether the cause falls within the jurisdiction of the Rabbinical Court.

The Cause of Action – Enforcement of a Contractual Indemnity Clause

23.       The respondent's cause of action in the Rabbinical Court is the enforcement of a contractual clause concerning property, which is contained in the divorce agreement that was made between the couple for the purpose of the divorce proceedings. It provided that if the respondent were sued for an increase in child support and the satisfaction of any of the children's needs or if a stay of exit order was granted at the initiative of the wife, then the petitioner would compensate him, in the language of clause 4(e) of the agreement, with half the property. That provision is also mentioned in clause 5 of the agreement, which is headed "Indemnification", and according to the substance of the provision, and also its location and wording, it is an indemnity clause. The respondent sues for the enforcement of a property condition for his indemnification due to a breach of contract by the wife, and he gave expression thereto by heading his claim as one for "specific performance". That is to say, we have here a property claim for the enforcement of the contractual indemnity clause in a divorce agreement that received the effect of a judgement of the Rabbinical Court and further to which the parties' divorce was completed.

The Rabbinical Court's Jurisdiction to Adjudicate a Property Claim for the Breach of a Contractual Indemnity Clause in a Divorce Agreement after the Parties' Divorce

Does the respondent's suit, according to its cause, fall within the scope of one of the sources of the Rabbinical Court's jurisdiction? Because of the great similarity between the instant matter and the case of Sima Levy, we shall draw guidance and direction from that case.

 

 

Original – Primary Jurisdiction

24.       The source of the Rabbinical Court's exclusive jurisdiction in matters of marriage and divorce, as provided in section 1 of the Rabbinical Courts Jurisdiction Law, does not apply in the instant case because the subject of the suit is a property matter after the dissolution of the parties' marriage and a matter of "marriage and divorce" is, no longer involved. Nor is it a matter "connected with a divorce suit", including support for the wife and children, within the meaning of section 3 of the Law. After divorce, a property claim in respect of the breach of an indemnity clause is not connected with the divorce suit, which has ended and no longer exists. The respondent's cause of action is a new one, the subject of which is the enforcement of a divorce agreement or an application for the enforcement of a divorce judgment, based on a divorce agreement. The cause is based on the breach of a divorce agreement after the award of the divorce and completion of the couple's divorce, and such a new cause is naturally not to be bound up with the matters that were in the past connected with the divorce suit.

With regard to the property cause of action, which surrounds the breach of an indemnity clause of a divorce agreement, the Rabbinical Court does not have jurisdiction by virtue of the parties' agreement pursuant to section 9 of the Law, which deals with the Rabbinical Court's parallel jurisdiction that is vested by virtue of the parties' agreement in matters of personal status according to article 51 of the Palestine Orders in Council and the Succession Ordinance. Section 9 of the Rabbinical Courts Jurisdiction Law raises the question of whether jurisdiction can be vested in the Rabbinical Court by consent in a matter included in its parallel jurisdiction after completion of the divorce, or whether its jurisdiction pursuant to that provision is limited solely to matters within its parallel subject matter jurisdiction that arise in connection with, and until, the divorce and its completion, but not afterwards. Whatever the answer to this question, it is in any event clear that the subject matter jurisdiction pursuant to section 9 is limited solely to the matters mentioned therein, that is, matters of "personal status" as defined in the Palestine Orders in Council and the Succession Ordinance. In a dispute that is not within the bounds of those matters, even the parties' agreement cannot vest jurisdiction in the Rabbinical Court (Schiffman, ibid, vol. I, p. 37; Jane Doe Case, ibid, p. 812). The power of the parties' stipulation is restricted solely to the matters defined by the statute (MF 358/89 Zalotti v. Zalotti PD 43(4) 41, 42; Porat, ibid, p. 510).

Clause 11 of the divorce agreement in this matter looks to the future, and provides that if differences arise between the couple after the divorce, then they undertake to bring their claims solely in the Rabbinical Courts. That agreement is effective only to vest jurisdiction in the Rabbinical Court pursuant to section 9 of the Law in respect of matters of personal status according to article 51 of the Palestine Orders in Council or the Succession Ordinance. A property claim for the enforcement of a contractual indemnity clause in a divorce agreement is not a matter of personal status within the meaning of the Palestine Orders in Council or the Succession Ordinance, and thus, the parties' contractual agreement in respect of such a dispute cannot vest jurisdiction in the Rabbinical Court pursuant to section 9 of the Law.

The Rabbinical Court therefore does not have original jurisdiction to adjudicate the respondent's claim.

"Ancillary" Inherent Jurisdiction

25.       Does the Rabbinical Court have "ancillary" inherent jurisdiction to adjudicate the respondent's claim? The answer is in the negative.

            In the instant case, the Rabbinical Court's ancillary jurisdiction is irrelevant insofar as it relates to the revocation of a divorce award because of a defect in the making of the divorce agreement. It is not a defect of fraud, mistake, deceit, duress or similar that occurred in the making of the agreement and that might have given the Rabbinical Court ancillary jurisdiction to consider its revocation.

            Similarly, the Rabbinical Court has not acquired ancillary jurisdiction by virtue of a material change in circumstances after granting the divorce judgment that allegedly justifies revoking the divorce agreement and the divorce judgment in order to achieve a just result. On the contrary, the respondent's suit is for the specific performance and enforcement of the divorce agreement, not its revocation. Although, in the Great Rabbinical Court, the respondent pleaded that his suit was to revoke the divorce agreement because, according to him, the Get had been given by mistake (the Great Rabbinical Court's decision of May 4, 2003). These arguments were made as an "embellishment" at a late stage of the trial and do not reflect the real cause of action; the motion to revoke the divorce agreement and the act of divorce is inconsistent with the respondent's claim in his suit to compensate him with half the property (the apartment, the contents and the gold), which is nothing other than a claim for the enforcement of the divorce agreement (cf. CA 105/83 Menashe v. Menashe PD 38(4) 635; Yadin, The Contracts (Remedies for Breach of Contract) Law 5731-1970, Second Edition, 5739, p. 44).

            Again, the Rabbinical Court's ancillary jurisdiction to retain jurisdiction in a matter pending before it until the proceedings conducted before it are concluded will not vest it with jurisdiction in this case. The Regional Rabbinical Court had granted a final and unconditional judgment and awarded the effect of judgement to the divorce agreement. Indeed, the divorce agreement does contain an indemnification provision, which by its nature looks to the future, but this fact cannot transform a judgement that gave effect to a divorce agreement into a judgment that is not final, leaving the Rabbinical Court with jurisdiction that has not yet been exhausted to continue adjudicating with respect to the divorce agreement's future performance in this property matter. A financial-property dispute that has arisen between the parties after the award of judgement gives rise to a new cause of action and necessitates the institution of new proceedings in accordance with the jurisdictional framework prescribed by law (see Sima Levy Case, pp. 607-608; CA 468/85 Dondushanski v. Don PD 40(2) 609; D. Bar Ofir, Execution - Proceedings and Law (Sixth Edition, 2005, pp. 164-5)).

            Nor has the Rabbinical Court acquired jurisdiction to hear this matter by virtue of the doctrine of "continuing jurisdiction". It should be kept in mind, that continuing jurisdiction is vested where an instance has tried a particular matter in the past and, in special circumstances, a need has arisen to vacate or modify an earlier decision due to a material change that has occurred in the circumstances upon which the original decision was based such, for example, in matters of child support and custody. The instant case is fundamentally different. The motion does not seek to modify or revoke the divorce agreement made between the parties. On the contrary, it seeks to enforce the agreement, and such a claim has no place within the continuing jurisdiction vested in the Rabbinical Court. A decision on property matters is a final one and not a matter for continuing jurisdiction, as the Court stated in Sima Levy (Justice Cheshin, ibid, p. 611):

                        "As distinct from decisions concerning the payment of support or child custody – which by their nature are not final and the doctrine of continuing jurisdiction applies to them – a decision on a property matter is in principle a final one" (emphasis added).

            The property aspect of the divorce agreement, including the indemnification clause, and the divorce judgment that gave it effect, are therefore not within the Rabbinical Court's continuing jurisdiction.

            And finally, the Rabbinical Court does not have ancillary jurisdiction to adjudicate the new cause that arose following the divorce agreement in order to interpret the agreement. Firstly, the Rabbinical Court, having completed and exhausted its power to rule on the matter of divorce, no longer has ancillary power to interpret the divorce agreement or the divorce judgment (cf. HCJ 897/78 Yigal v. The National Labour Court, PD 33(2) 6, 7; CA 5403/90 The State of Israel v. RAM Revhiat Ibrahim PD 46(3) 459). Moreover, in the instant case, the question of the agreement’s interpretation hasn’t risen as such, but a claim for its enforcement has been brought instead. Hence, the Rabbinical Court does not have ancillary jurisdiction in this respect either.

            In conclusion: the Rabbinical Court does not have primary original jurisdiction, or ancillary inherent jurisdiction, to adjudicate a property claim for enforcement of a contractual indemnification clause in a divorce agreement that has given the effect of judgement, once the couple's divorce has been completed.

The Rabbinical Court's Jurisdiction by Virtue of Consent

26.       As can be recalled, clause 11 of the divorce agreement provides that differences between the couple after the divorce are to be adjudicated solely in the Rabbinical Courts. The couple's agreement as such cannot vest the Rabbinical Court with jurisdiction where there is no legal source for it. The agreement in this case concerns something that is not a matter of personal status according to section 9 of the Rabbinical Courts Jurisdiction Law, and it was therefore given for this purpose outside the scope of the law, and is ineffective.

            Indeed,

                        "where the subject of the litigation is not within the jurisdiction of a particular judicial entity, no agreement in the world has power to grant the entity jurisdiction that the statute has not given it; it is the statute that gives and it is the statute that takes away" (Sima Levy, p. 617).

            The Regional Rabbinical Court's decision of June 18, 2002 and the Great Rabbinical Court's decision of May 4, 2003, according to which the Rabbinical Courts have jurisdiction in principle to try the claim by virtue of the law, are inconsistent with its provisions.

The Rabbinical Court's Jurisdiction by Virtue of an Arbitration Arrangement

27.       It was further argued that clause 11 of the divorce agreement is an arbitration provision that vests the Rabbinical Court with power as an arbitrator to adjudicate the respondent's claim of a breach of the agreement's indemnification provision. Although not strictly necessary, we have considered the question in principle of whether a Rabbinical Court can be empowered to decide a dispute between litigants in arbitration, in a matter that is not within its subject matter jurisdiction according to the statute. We have answered that question in the negative and the answer is applicable to the case herein.

            In the instant case, the conclusion that the Rabbinical Court lacks jurisdiction to try the matter as an arbitrator is also reinforced by another reason. Studying the contents of clause 11 of the divorce agreement shows that it cannot be construed as an arbitration clause, equal to an "arbitration agreement" between the parties. It is well known that the power of an arbitrator to decide a dispute between parties derives from an arbitration agreement. Without an arbitration agreement, no arbitration arises. An "arbitration agreement", according to the Arbitration Law, is "a written agreement (between parties) to refer to arbitration a dispute that arises between them in the future, whether an arbitrator is named in the agreement or not" (section 1 of the Arbitration Law). The condition precedent for arbitration is therefore the existence of an agreement to refer a dispute to arbitration. If parties have agreed to refer disputes between them to the decision of some entity but it is not clear that a decision in arbitration is involved, then there is no arbitration agreement (ALA 4928/92 Aziz Ezra Haj v. Tel Mond Local Council PD 47(5) 94; Ottolenghi, ibid, pp 9-41).

            In this case, the parties undertook to refer any disputes arising between them after the divorce solely to the Rabbinical Courts. No intention can be inferred from that agreement to refer such disputes to the Rabbinical Court qua arbitrator. In Jane Doe (para. 6 of Justice Barak's opinion), as in the case herein, the couple mistakenly believed that their consent to the Rabbinical Court's adjudicating disputes connected with the divorce agreement could vest it with power to decide as a state judicial instance, rather than as an arbitrator. Indeed, the wording and contents of clause 11 of the divorce agreement do not demonstrate the parties' intention to treat it as an arbitration clause purporting to empower the Rabbinical Court to act as arbitrator. Consequently, even if we assumed that the Rabbinical Court could be empowered to act as an arbitrator in matters in which it has no original or ancillary jurisdiction by virtue of the law, there is still no effective arbitration agreement, as pleaded.

A Note before Closing

28.       The issue of the Rabbinical Court's power to adjudicate by virtue of the parties' agreement, outside the scope of the law, has arisen in earlier contexts in the past, and although different opinions have been expressed in such respect by the courts, no binding decision has been necessary in connection therewith. This absence of a ruling has permitted the continuation of a procedural practice that is inconsistent with the organizational structure of the courts and the division of powers between them in accordance with state law. This custom has enabled a judicial practice that is inconsistent with the principle of the administration's legality and the legality of the judicial system. The time has come to move from the stage of expressing an opinion to the stage of making a ruling, which is necessary to ensure the proper function of the judicial system within the scope of its powers, and thereby to protect the basic foundation that defines the boundaries of its activity based on the principle of legality and the rule of law. This will not harm, in a any way, the need and ability of various social groups to entertain alternative resolution systems outside the state judicial instances, based on the principles of arbitration regulated by law or on the basis of other agreed and recognized rules of procedure. However, at the same time, it is necessary to safeguard, and protect against blurring the boundaries between the state judicial systems and alternative resolution systems that are built on the parties' agreement, in order to protect the proper operation of the different arms of the judicial system and the public's confidence in the way in which its powers are exercised and its judgments.

Conclusion

29.       By deciding the respondent's lawsuit against the petitioner for the enforcement of a contractual indemnification clause in the divorce agreement, the Rabbinical Courts exceeded the power vested in them by law. Consequently, the decisions of the Regional Rabbinical Court and the Great Rabbinical Court in the respondent's claim are void. The result is that the order nisi that has been awarded should be made absolute. The respondent shall bear the petitioner's professional fees in the sum of NIS 12,000.

 

Vice President (Ret.) M. Cheshin

 

            I concur.

 

Justice S. Joubran

            I concur.

Therefore, held as stated in the opinion of Justice Procaccia.

Awarded today, this eighth day of Nissan, 5766 (April 6, 2006).

 

___________________

___________________

___________________

Vice President (Ret.)

Justice

Justice

 

Eitanit Construction Products v. State

Case/docket number: 
HCJ 6971/11
Date Decided: 
Tuesday, April 2, 2013
Decision Type: 
Original
Abstract: 

[This abstract is not part of the Court's opinion and is provided for the reader's convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.] 

 

This is a motion challenging the constitutionality of section 74 of the Prevention of Hazards from Asbestos and Harmful Dust Act, 2011 (“Asbestos Act”). The motion is directed primarily at the obligation of the moving party (“Eitanit”), an asbestos-cement factory in the Nahariya area, to shoulder the cost of half the project’s expenses, up to NIS 150m.

 

The High Court of Justice (written by Justice Hendel, and with Chief Justice Grunis and Justice Zylbertal concurring) dismissed the motion and ruled that section 74 of the Asbestos Act infringes on Eitanit’s right to property but does not discriminate against it. The Court held that section 74 applies only to industrial waste that is a result of Eitanit’s factory work processes. Since Eitanit’s right to property was infringed, the High Court of Justice only addressed the issue of whether the infringement was acceptable under the limitation clause of section 8 of Basic Law: Human Dignity and Liberty. The High Court of Justice relied heavily on comparative law, because, among other considerations, this is a new legal issue with an obviously universal aspect, and because no aspects unique to Israel were demonstrated. Additionally, the High Court of Justice emphasized that this was a matter of judicial review, rather than administrative review, which impacts the extent of permissible discretion by the Knesset.

 

The High Court of Justice clarified that the source of rights infringement is primary legislation, that is, a statute that was enacted by the Knesset in a proper procedure. The Court rejected Eitanit’s claim that this is not a “statute” in terms of the limitation clause because it is a specific, personal statute. It is a formalistic test, which inquires mainly whether the infringement upon basic rights was done in or by authorization of primary legislation. Here, the answer was in the affirmative. The High Court of Justice found that the purpose of section 74 of the Act was to launch a project to remove asbestos waste from the Western Galilee. This is a worthy and important purpose, which fits the values of the State of Israel. The High Court of Justice was prepared to assume that a secondary purpose of the Asbestos Act was realizing the principle of “the polluter should pay” and found this, too, to be a worthy and appropriate purpose.

 

The High Court of Justice addressed whether the means identified in section 74 of the Asbestos Act was proportionate. First, the High Court of Justice examined the rational connection, considering both purposes, and held that for both there is a fit between the means and the purpose. As to whether these were the least restrictive means, the High Court of Justice found that the option of “self implementation” that Eitanit proposed would not realize the purpose of section 74. Additionally, the Court found that the mechanism the legislature chose includes checks and balances that minimize the harm for Eitanit. As for the narrow proportionality test, the Court held that section 74 of the Act does not specifically target Eitanit, but the focus on Eitanit is a result of the reality caused by Eitanit itself.

 

On the issue of strict liability, the Court ruled that although it is a problematic and harsh regime, three considerations reduce its difficulty: considerations of justice and fairness, deterrence and assuming costs, the evidentiary difficulty in fault-based liability systems; support for strict liability in many countries around the world; and a certain dimension of Eitanit’s factual awareness regarding asbestos harms. The High Court of Justice found the Asbestos Act is one of narrow active application. It applies for an existing situation, but this is no ordinary active application: all the factual elements have existed in the past, and section 74 does not apply to the future. It was also found that had the Act been completely applicable retroactively, that would not have been determinative, but rather another factor in the constitutional balance. The Court found three mitigating factors: the element of expectation or knowledge of risk, the scope of the danger, and the rise in many countries’ support for retroactive liability. In summary, the Court ruled that, although the infringement of Eitanit’s rights should not be disregarded and the legislature created a new landscape, the infringement passes constitutional muster under the tests set in the limitations clause. 

Voting Justices: 
Primary Author
majority opinion
majority opinion
majority opinion
Full text of the opinion: 

 

In the Supreme Court as High Court of Justice

 

HCJ 6971/11

 

Before:                                    The Honorable President A. Grunis

                                    His Honor Justice N. Hendel

                                    His Honor Justice Z. Zylbertal

 

The Petitioner

 

                                    1.         Eitanit Construction Products Ltd.

 

                                    v.

 

The Respondents:

 

                                    1.         The State of Israel

                                    2.         The Knesset

                                    3.         Minister of Environmental Protection

                                    4.         Minister of the Treasury

5.         Mate Asher Municipality

                                    6.         Israel Union for Environmental Defense

                                    7.         Association for Quality of Life and the Environment in

Nahariya

 

                                    Petition for Temporary Injunction and Interim Order

 

Date of session:           23th Elul 5772; October 9, 2012

 

                                    Adv. Pinchas Rubin

                                    For the Petitioner

 

                                    Adv. Sharon Rotanshker

                                    For Respondents 1, 3-4

 

                                    Adv. Avital Semplinski

                                    For the Second Respondent

 

                                    Adv. Eitan Maimoni

                                    For the Fifth Respondent

 

                                    Adv. Keren Halperin-Mosseri

                                    For the Sixth Respondent

 

                                    Adv. Moshe Goldblat

                                    For the Seventh Respondent

 

 

 

 

Judgment

 

Justice N. Hendel

1.A petition against the constitutionality of section 74 of the Prevention of Hazards from Asbestos and Harmful Dust Act, 2011 (“Asbestos Act”) is before us. This section declares the launch of a project to remove asbestos waste from the Western Galilee (“The Project”). The petition objects primarily to the requirement that the Petitioner, Eitanit Construction Products Ltd. (“Eitanit”), to shoulder half of the expenses of the project, up to NIS 150m.

General Background – Asbestos:

2.Asbestos is an umbrella term for a group of fiber minerals, with high insulation and resilience properties. Because of these qualities, for hundreds of years asbestos has been widely used for industrial purposes, such as producing protective gloves and other gear, acoustic insulation boards and more.

Currently, it is known that crisp asbestos, that is: asbestos in ground or powder state, is a dangerous substance that may cause cancer. Crisp asbestos releases tiny fibers into the air, which enter the respiratory system and harm lung tissue. Among the first diseases recognized as linked to asbestos was asbestositis: the shrinking and scarring of lung tissue, which causes shortage of breath and a decline in lung functions. Another disease is mesothelioma: a cancerous tumor that harms the lungs, heart and abdomen.

The petition before us, as will be explained below, deals with a material called asbestos-cement. It is a compound made of approximately 10% asbestos and 90% cement, in hard from. Out of this asbestos-cement mixture products such as pipes and boards may be manufactured. As long as the asbestos-cement remains in hard from, the asbestos fibers are contained in the cement. This may change when the asbestos cement – or the product manufactured from asbestos-cement – is eroded, cracked or broken, then the dangerous asbestos fibers are released into the air.

Awareness of the dangers of asbestos has grown over time. As early as the beginning of the 20th century, information about the prevalence of asbstositis among workers exposed to asbestos has accumulated. Later reports proliferated about different cancers among asbestos workers. In 1976, after a comprehensive examination of the scientific material, the International Agency for Research of Cancer (IARC) recognized asbestos as a substance certain to cause cancer in humans (Class I). Additional research indicated that health risks were caused not only to asbestos workers but to those who live in close proximity to asbestos mines, as well as family members of asbestos workers (generally, for an updated review of asbestos risks by IRAC, see Monographs.iarc.fr/ENG/Monographs/vol100C/mono100C-11.pdf)

The Petitioners and the Asbestos Industry

3.In 1952 Eitanit set up an asbestos-cement factory in the Nahariya area (“the factory”). Work in the factory included two stages: in the first stage, the factory imported raw asbestos to Israel and made asbestos-cement out of it. In the second stage, final asbestos-cement products, such as pipes and boards, were manufactured. The factory was closed in 1997.

Over the years, and during production processes, a significant amount of industrial asbestos waste was amassed in the factory (“the waste”). Eitanit disposed of the waste in two ways: one, it sold or gave away the waste to third parties, which I will refer to as end users, that used the waste primarily for surfacing, for instance to pave roads or parking lots. Second, Eitanit buried the waste in the ground. The first method of removing the waste – that is, selling or giving it away, probably stopped around the late 70’s.

In any event, the waste was distributed in dozens of locations around the Western Galilee. Both the waste that was buried and the waste that was used for surfacing risks area residents’ health to this day. The waste is partly crumbled, causing asbestos fibers to be released into the air. Additionally, the daily use of the surfaces which were covered with asbestos uncovers masses of crisp asbestos and create a health hazard. Surveys commissioned by the State revealed that the asbestos waste distributed in the Western Galilee amounts to about 30,000 cubed meters and the State evaluates that the clean soil that was polluted by this waste amounts to about 150,000 cubed meters The Petitioner, however, believes that the ratio between the waste and the polluted soil is 1:3, not 1:5.

The Previous Proceedings Regarding the Petitioner:

4.The petition before us deals, as mentioned, with a project to remove asbestos waste that arguably came from Eitanit’s factory. But this is not the first round of proceedings on this matter between Eitanit and State authorities.

As some point, Eitanit began to remove some of the asbestos waste to a site within Shlomi municipality (Hanita mine), without permit or license to do so. In 1981 the Ministry of Health demanded Eitanit cease from this practice and the site was closed. Consequently, Eitanit buried waste at the Sheikh Danon site, also without permit or license. In March 2002 the Ministry of Environmental Protection (“the Ministry”) issued conditions for temporary permits that would allow restoring the site at Sheikh Danon. In a petition by Eitanit against the Ministry, which was dismissed, the court pointed out that the demand to require Eitanit shoulder the cost of the site’s restoration is “natural and obvious” (AP 589/02). Ultimately, in 2003, after additional legal proceedings, the Sheikh Danon site also closed.

In 1998, after the factory was shut down, the City of Nahariya initiated a project to build an amusement park called “The Children’s Land.” The park was meant to be located on the beach, adjacent to the closed factory. When it was revealed that the area was polluted with asbestos, the Ministry issued a decree to preserve cleanliness, according to section 13b of the Maintenance of Cleanliness Act 1984. The City of Nahariya announced it would clean the area from asbestos, and consequently sued Eitanit for reimbursement of costs. In 2007 the dispute between the City and Eitanit regarding that area was settled.

In 2005 the Minister of Environmental Protection (the Minister) met with representatives of Eitanit and of the City, in an attempt to reach an agreement for co-funding asbestos waste removal from the Western Galilee. The attempt failed. In May 2007 negotiations between the parties resumed. Eitanit proposed, among others, that it remove the waste on its own. In November 2008, the Ministry notified Eitanit of a decision that the State would no longer facilitate a mutual agreement.

In December 2008 the Asbestos Act memorandum was distributed. The Act aimed to resolve a whole host of environmental issues around asbestos hazards in Israel. Among others, the Act included a specific section that addressed the project of removing asbestos waste from the Western Galilee. This is section 59 of the bill, which eventually became section 74 of the final Act and is the section at the center of this petition. We will address the Act and the section in further depth. Briefly, the section required Eitanit to fund half the project to remove asbestos waste from the Western Galilee. In 2009 the bill passed its first reading, and was referred to the Interior Committee and the Environmental Protection Committee. Eitanit’s representatives attended the committee’s meetings, and presented their arguments against the proposed arrangement. In March 2011, the bill passed its second and third readings.

Simultaneously, the Ministry published a tender to select a corporation that would manage the removal project. Negotiations were conducted with Eitanit, along with others, and in December 2009, it proposed participating in the project at the cost of NIS 10m, a sum that was later updated to NIS 15m. There were big gaps between parties regarding calculating costs, including due to different estimations of the amount of soil polluted and of the cost of removal. In November 2010, when the negotiation was complete, the Ministry of the Treasury notified Eitanit that its financial proposal for the project was rejected and Eitanit responded by withdrawing the proposal altogether.

In June 2011, after the Act’s publication, Eitanit complained to the Minister of Environmental Protection that section 74 creates extraordinarily important constitutional problems. It suggested the Minister institute regulations that would prevent, or at least reduce, the infringement of Eitanit’s rights. In response, the Minister emphasized that the constitutional issues were already discussed comprehensively and thoroughly before the bill passed. Later, in August 2011, the Minister provided Eitanit with a draft of instructions for implementing section 74 for its review. The draft did not satisfy Eitanit, and correspondence between the parties continued. Eventually, in September 2011, the Minister signed the final version of the instructions. Once Eitanit concluded it had exhausted the proceedings to temper section 74, without a satisfactory minimization of its harm, it filed the petition before us.

On the Prevention of Hazards from Asbestos and Harmful Dust Act (Asbestos Act)

5.The Asbestos Act was designed to reduce the environmental and health hazards caused by asbestos or by other harmful dusts. The purpose is ensuring an adequate environment under the principle of preventative care and the improvement of quality of life and the environment (section 1).

The Act expressly prohibits manufacture, import, possession and use of asbestos in any way and for any purpose, unless permitted by the Act (section 3). The Act regulates the continual use of existing asbestos in public places and factories (sections 4-8). The Act prohibits anyone from creating an asbestos hazard, that is: causing the existence of asbestos fibers in the air, and requires the creator of the hazard to remove it at their own expense (sections 10-11). The Act also regulates methods for handling asbestos, including the granting of licenses and working with asbestos (chapters E-F). There is also an option to apply several of the Act’s provisions to other materials that may be defined as harmful dust (section 71).

Section 74 was designated to address the asbestos hazards in the Western Galilee. This is the section the petition before us focuses on. The language of the section is as follows:

“(a)            In this section –

“the project to remove asbestos from the Western Galilee” – a project to locate, remove, and bury asbestos waste which originated from a factory for asbestos manufacture in the Western Galilee, which was buried or distributed in a radius of up to 15 KM from the factory, except for land owned by asbestos companies, at an extent and measures instructed by the Minister in consultation with the Minister of the Treasury, and as it pertains to the funding aspects of the project, with the consent of the Minister of the Treasury;

“Asbestos Companies” – companies that manufactured asbestos in the Western Galilee prior to the day this Act came into effect.

(b)              The project of asbestos removal from the Western Galilee will be funded through the State budget, payments from asbestos companies, and payments from local authorities within whose jurisdiction the project will take place (“local authorities”).

(c)              A separate account will be managed in a trust to preserve cleanliness and will be used to fund costs, direct or indirect, of the project for asbestos removal from the Western Galilee (in this section – “the separate account”).

(d)             The Minister, with the Minister of the Treasury’s consent, after providing the local authorities and the asbestos companies the opportunity to present their arguments, will order the sums that the local authorities and the asbestos companies will transfer into the separate account and the schedule for payments, as long as the entire sum from asbestos companies will be equal to the entire sum from the state budget and the local authorities combined. However, the entire sum from the asbestos companies may not exceed NIS 150m.

(e)              While setting payment sums and schedules according to section (d), the Minister will consider, among others, the scope of the state budget dedicated to funding the project generally, the sums already actually expended, and regarding local authorities – the identity of property rights holders in the land where asbestos is found, the use of these lands and the extent of the authorities’ responsibility over them, as well as the local authorities financial state.

In other words, a project for the removal of asbestos waste from Eitanit’s factory that was buried or distributed in a radius of up to 15 KM from the factory would be launched. In this regard “asbestos waste” includes asbestos that was broken, cracked or fractured, or broken as well as asbestos that is unused (as defined in section 2). It should be noted that the statute does not explicitly mention Eitanit’s name, but instead uses general language – “asbestos companies” and “a factory for asbestos manufacture”. Still, as will be clarified below, there is no dispute that the statute in effect targets only Eitanit and its factory; it is the only company in the Western Galilee area that manufactured asbestos.

The project would be funded from three budgetary sources: the State, the local authorities in whose jurisdiction the project will take place, and Eitanit (who, as mentioned, is not explicitly mentioned by name in the section.) The Minister will establish the extent and process of the project. Additionally, the Minister will set the sums that the local authorities and that Eitanit will transfer, once their arguments are heard. Setting the amounts of participation is subject to two restrictions. First, the sum that Eitanit transfers will be equal to the total sum the State and the local authorities transfer, combined. Second, the sum Eitanit transfers must not exceed NIS 150m.

In September 2011 the Minister signed the implementation instructions. They stipulate that the project will take five years, and will be executed by a managing company chosen by tender. A local authority’s participation will be calculated as 10% of the removal cost, through equally valuable operations, including restoration. To set the sums required from Eitanit, the company will receive itemized reports of expenses every three months, along with a detailed report of the sites where the removal was done and the amount of waste removed. Eitanit will have 30 days to respond to each bill (annexure 20 to the State’s responding papers.)

The Parties’ Arguments

6.Eitanit claims, in essence, that section 74 infringes its right to property and rights to equality, without passing the conditions of the limitations clause.

The infringement on property rights manifests in the very imposition of financial burdens, exacerbated by the severe and retroactive responsibility without demonstrating fault or liability. The infringement of equality was caused by discriminating against Eitanit compared to others – asbestos importers, end users and future polluters – who have been partially or fully absolved from any liability regarding asbestos waste.

The infringement of property and equality does not pass, as the argument goes, the tests set by the limitations clause. It is not an infringement or restriction by statute, as this is personal legislation. It is not for a worthy purpose that befits the values of the State of Israel, as Eitanit was retroactively tainted as a lawbreaker without evidence it actually did pollute the land. And finally, the infringement is not proportional: the statute does not advance the end of channeling the conduct of offenders or to deter them, so that there is no rational connection between the ends and the selected means. Other less restrictive means were available, for instance: allowing Eitanit to execute the project on its own or valuing its participation in funding the project according to the extent of its liability. In any case, the benefits of this section are minimized compared to the harms caused to Eitanit.

Ultimately, Eitanit asks we void section 74. Alternatively, it suggests other remedies, in the following order of preference: directing the Minister to set regulations that would de facto release Eitanit from the mandates of section 74, allowing more proportional means (such as paving paths or performing other aspects of the project by Eitanit), directing the Minister to hold a proceeding where Eitanit could be heard and the Minister would be able to consider the extent of its liability regarding the entire area effected by the project.

7.The State emphasizes that section 74 is designed to apply only to industrial waste that resulted from Eitanit’s factory’s operations. It does not apply to complete asbestos-cement products that were purchased by end users and then disassembled and discarded, but only to the waste that Eitanit produced.

The State is willing to assume that the statute infringes upon Eitanit’s property rights. However it disputes the infringement to the right to property: it raises misgivings as to whether the right to equality should apply to corporations, and argues that in any case Eitanit’s right to equality was not infringed here as there is a relevant difference between Eitanit and the other entities it had identified.

The State continued its constitutional analysis on this foundation. The infringement is by statute, albeit personal legislation. The infringement is for a worthy purpose – the removal of serious environmental hazard in the Western Galilee. The statute relies on the principle of “the polluter must pay” that derives from rationales as efficiency, deterrence, and justice. As for the issue of proportionality, there is an obvious connection between the ends – cleaning the Galilee from asbestos waste, and the means – launching the project. The mean selected is mild, as Eitanit shoulders only about half of the project’s cost, and in any case no more than NIS 150m. The proposal that Eitanit itself will clear the land was discussed between the parties for a long period of time, but turned out to be impractical and ineffective. Finally, the benefit derived from the statute (eliminating proven health risks) far outweighs the harm caused to Eitanit, if any.

8.Many of the sites intended for waste removal are located within the territory of the local authority of Mate Asher, the Fifth Respondent. In its response to the petition, the local authority emphasized that Eitanit turned a substantial profit from selling asbestos-cement waste, though it knew in real time, or at the very least should have known – about the dangerous outcomes of asbestos exposure. The local authority additionally notes that the basic rights on which Eitanit hangs its hat, if any, should yield to the rights to life and to bodily integrity of those actually and potentially harmed by asbestos.

The Sixth and Seventh Respondents are public non-governmental organizations active in environmental preservation and protection. They reiterate that the statute was born out of all the failed attempts to consensually address Eitanit’s financial liability. In this regard, the Respondents refer to the principle of extended producer responsibility (EPR), which would have manufacturers responsible for their products’ environmental impact during the entire life cycle of the product. This principle is applied in different contexts in many of the OECD states, an organization of which Israel is now a member.

9.To paint a complete picture, we should note that on October 9, 2012 a hearing was held for this petition. At the end of the hearing we ordered the parties to notify the Court, within 60 days, whether a settlement was possible. On November 16, 2012, the Respondents notified the Court that they believe any arrangement different to that which the legislature mandated in section 74 would be inappropriate. We must therefore rule on this petition.

It should also be noted that Ms. Ayelet Bruner has moved to join as respondent. As the motion explains, her husband – a resident of Kibbutz Kabri, which is adjacent to the factory – died of mesothelioma due to asbestos dust exposure, and Ms. Bruner has therefore filed a tort suit against Eitanit and the State. Ms. Bruner argues that she holds additional evidence that Eitanit and the State notified here at the relevant times about the risks of asbestos. Under the circumstances her arguments were included, explicitly or implicitly, in the other parties’ arguments, and thus we do not believe it appropriate to formally join her to the petition.

Discussion and Ruling

I. Comparative Law

10.The issue before us is universal. It stems from the connection between humanity and the land. In more detail, it is a result of the conflict between humanity’s desire to control the environment and the cost of this progress.

The dialectics that arise because of humanity’s ambition to develop and evolve is addressed in Jewish law, and is timeless. Its roots can be found in the first human himself. In the Book of Genesis, man is commanded: “be fruitful and multiply and inherit the earth” (Genesis 1, 28). In his monumental manifest, “The Lonely Man of Faith,” written almost 50 years ago, Rabbi Yosef Dov Halevi Soloveitchik mentions that in the beginning of the Book of Genesis there are two descriptions of the creation of man to emphasize his two facets. The first man, described in chapter 1 of Genesis, about whom it was said that he was “created in God’s image” (Genesis, 1, 27), is creative. “He engages in creative work, trying to imitate his Maker … In doing all this, Adam the first is trying to carry out the mandate … "to fill the earth and subdue it." … man’s dignity, manifested in man’s awareness of his responsibility and ability to fulfill his duty, cannot be realized as long as he does not control his surroundings… there is no dignity without responsibility, and one cannot shoulder responsibility as long as one cannot fulfill the commitments involved… we have obtained the following triple equation: human dignity-responsibility-majesty.” (The Lonely Man of Faith, J.B. Soloveitchik, Tradition Magazine (summer 1965), Rabbinical Council of America. Hebrew translation by Mossad HaRav Kook Publishing, 8th edition, 2002, pp. 13-18.) Control over the environment – a mixed blessing. In conquering nature, humanity is impressive in its creativity and progression from one generation to the next. However, its comprehension is limited. Humanity cannot know, at the same time it controls the environment, what toll this “progress” may take.

Jewish law was even sensitive to this aspect. The rule is – do not destroy (Talmudic Encyclopedia, volume 3, under “do not destroy”, in Hebrew – “Bal Tashchit”.) Originally, the prohibition is on destroying fruit-bearing trees during a wartime siege: “should you siege a city many days in order to fight and conquer, you shall not destroy its trees.” (Leviticus 20, 19-20). However, Jewish law’s sages interpreted the prohibition broadly. The Book of Education (=Sefer ha-Chinnuch), that summarizes all 613 commandments (authored in the 13th century, likely by Rav Aharon Levi of Barcelona), explains the reasons and application of this commandment:

“The root of the commandment is known to be teaching us to love good and utility and stick to it, and in turn good will stick to us and we will distance from all evil and destruction. It is a way of the pious and men of action, peace lovers, those who rejoice in the good of people and bring them closer to the Torah, who will lose not even a mustard seed, and will grieve any loss or destruction that they come across, and if they could they would rescue anything from ruin with all their might.” (Torah portion of “Judges” [=Shoftim].)

Rav Shneor Zalman of Lyadi, (founder of Chabad Russia in the 18th century) believes the “do not destroy” prohibition applies even to the abandoned:

“Just as one must be careful of loss, damage or harm to one’s body, so must he be careful of loss, damage or harm to his funds. And anyone who breaks tools or clothes or demolishes a building or clogs a pool or discards food or spoils anything else that should be enjoyed by people is violating the commandment ‘do not destroy’… even if abandoned.” (Shulchan Aruch Harav, Choshen Mishpat…)

Therefore the matter is not preserving the property rights of others in the private sense, but of the environment as a right to property.

The above functions as normative background to the issue at hand. In recent years, all around the world, countries have been required to face different dilemmas regarding the environment. A significant portion of these dilemmas incorporates legal, economical and moral aspects, among others. Among these, the removal of polluting waste – the issue at the core of this petition – is a matter that carries real weight. Asbestos, specifically, has proven to be a strong, efficient material, with many uses. Over time, its harm was discovered to tremendously outweigh its utility.

Since the 20th century, different countries have faced the problem of cleaning the environment from asbestos, determining who must shoulder the burden of implementing and funding the task. Therefore, I found it fit to turn to the relevant legal framework in several key countries overseas. Of course, we should not automatically apply those here. But because of the universal character of the issue before us, I believe there are benefits to paying attention to legal trends in the world. It should be noted, before presenting the legal situation in other countries, that the legislation I mention applies to asbestos as part of a broader group of polluting or dangerous materials.

11.In 1980 the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) was passed in order to address environmental hazards. CERCLA was designed to regulate the removal of polluting materials from dangerous waste sites that were abandoned or stopped operating. It places the obligation to fund the cleaning process on the creator of the hazard (see Karen S. Danahy, CERCLA Retroactive Liability in the Aftermath of Eastern Enterprises v. Apfel, 48 B 509, 530 (2000)). Below we focus on two elements of CERCLA that are particularly pertinent to the case at hand: strict liability and retroactivity.

The case law has found CERCLA to establish strict liability. There is no question whether, and to what extent the hazard creator violated its duty of reasonable care or is in any way blameworthy for the risk it created. Therefore the creator of the hazard will be liable even without proof that a duty of care was not fulfilled (Alexandra Klass, From Reservoirs to Remediation: The Impact of CERCLA on Common Law Strict Liability Environmental Claims, 39 Wake Forrest L. Rev. 903 (2004) and see Israel Gilad, Tort Law – Liability’s Limits, 1190 B.H.S. 167 (2012), which addresses the distinction between strict liability and absolute liability, where the latter “is not subject to any defenses.”) Although the principle of strict liability was not written explicitly into CERCLA, the case law found that the legislative history – including minutes from committees and general discussions in the House of Representative and Congress – reveal this was the legislature’s intent (see New York v. Shore Reality Corp., 759 F.2d 1032, 1042 (2nd Cir. 1985); General Elec. Co. v. Litton Indus. Automation Sys. Inc., 920 F.2d 1415, 1418 (8th Cir. 1990); Burlington N. Santa Fe Ry. V. United States, 556 U.S. 599, 608 (2009)).

The strict liability standard did not appear out of nowhere. At common law, strict liability is a prevalent standard for particularly dangerous tortuous activity. A British judgment from the 19th century, Rylands v. Fletcher, considered a water reservoir that exploded and flooded a neighboring coalmine (Rylands v. Fletcher, L. R. 3 H.L. 330 (1868)). The House of Lords held the defendant liable, though no negligence by him was proven, because the reservoir was found to be “likely to do mischief if it escapes.” Nowadays, the second and third Restatement of Torts notes that whoever conducts abnormally dangerous activity will be liable for damages resulting from that activity, even if maximal precautions were taken (Restatement (Second) of Torts § 519(1) (1977); Restatement (Third) of Torts: Liability for Physical and Emotional Harm § 20 (2010)). This is the historical-legal foundation from which CRECLA’s strict liability standard stems.

Based on the legislative history, the case law and the scholarship presented about CERCLA, another reason for strict liability arises: conventional legal methods have failed to combat the occurrence of polluting waste. This reason, which is rooted in the legal realism school of thought, has helped to shape legal policy. Among other considerations in favor of placing strict liability are reasons of justice: in the absence of blameworthiness, it is justified to place a risk on the party who created that risk and has financially benefited from it (Lynda J. Oswald, Strict Liability of Individuals Under CERCLA: A Normative Analysis, 20 B.C. Enntl. Aff. L. Rev. 579 (1993)). While the legislation has been opposed for placing liability without fault, the position that allocating costs to the polluter was found to outweigh placing those costs on all of society. This was also due to the link between the polluter and harm, both in terms of creating that harm and in terms of profiting from it.

From another perspective, one might ask what is the economic benefit in placing liability without fault? Where is the deterrence in this? The answer is in the distinction between cost internalization and cost externalization. Under this theory, whoever handles material that pollutes or is likely to pollute should consider the possibility of strict liability. To reduce potential future costs, such party would initiate from the get-go research and experimental activity the produce a more cost-effective and environmentally friendly product, or at least one that has less potential for harm. The polluting party, who has expertise and capabilities, is in a better position to take such preventive measures. Under this approach, it is strict liability that creates deterrence (for more, see Mark Wilde, Civil Liability for Environmental Damage: A Comparative Analysis of Law and Policy in Europe and the United States (2002); Lucas Bergkamp, Liability and Environment: Private and Public Law Aspects of Civil Liability for Environmental Harm in an International Context (2001)).

As mentioned, CERCLA imposes liability even on whoever produced and distributed dangerous materials before the legislation’s enactment, though this activity was permissible at the time. CERCLA had to face facts already on the ground. In this context, too, the American statute did not explicitly create retroactive liability. American law, it should be reiterated, includes a rebuttable presumption that legislation does not apply retroactively, unless the legislative intent was clearly different (Landsgraf v. Usi Film Prods., 511 U.S. 244 (1994); Eastern Enterprises v. Apfel, 524 U.S. 498 (1998). However, the case law recognized CERCLA’s retroactive application, realizing this was clearly the legislative intent. It was understood from the statute’s language, its history and the payment mechanisms it established (U.S. v. Hooker Chem. & Plastics Corp., 680 F. Supp. 546 (W.D.N.Y. 1988); U.S. v. Olin Corp., 107 F.3d 1506 (11th Cir. 1997)).

CERCLA’s retroactive application survived judicial review. The case law held that this aspect of the statute did not violate due process, because of its rational and legitimate purpose to clear sites that are no longer in operation of their dangerous waste. Additionally, the legislation was not arbitrary or irrational because it burdened the entity that polluted and profited from that pollution (U.S. v. Ne. Pharm. & Chem. Co., 810 F.2d 726, 732-34 (8th Cir. 1986)). The case law found that without retroactive application achieving the legislation’s purpose – cleaning existing waste – is impossible. We should note the similarities between these tests to those in Israeli law’s limitation clause.

12.In 2004, a directive was passed by the European Union (“EU”) regarding the liability for environmental harms: Environmental Liability with Regard to the Prevention and Remedying of Environmental Damage (ELD). The core principle of the directive is “the polluter must pay” – whoever caused environmental harm through their actions must shoulder the financial consequences.

The ELD’s instructions do not require EU member states to set retroactive application. Put differently: liability applies to environmental damage even if it occurred before the statutory prohibition came into effect. As to the scope of liability, the ELD directive distinguishes between categories. The first is that of strict liability and it applies to harm caused by dangerous activities listed in the directive’s third appendix. The second category is of fault-based liability, and it applies to all other activity that may have caused harm to nature reserves or protected animal species. Notably, earlier versions of the directive expressed support for broader application of strict liability. In 1993 the Commission issued a “green document”, a non-binding working paper of sorts, that detailed the justifications for a strict liability standard for environmental damage (Commission Green Paper on Remedying Environmental Damage (COM 1993) 47 final (May 14, 1993)). Consequently a semi-binding principles document, a “White Paper” was issued in 2000 (Commission White Paper on Environmental Liability (COM 2000) 66 final (Feb. 9, 2000)). This document discussed at length the evidentiary challenges of a fault-based standard, which may be resolved by a strict liability standard, and argued that there is greater level of justice in imposing strict liability on polluters. Additionally, the doctrine of cost internalization was emphasized as a measure of deterrence.

In reality, European countries adopted various approaches (on the legal state in Europe, see: Chris Clarke, Update Comparative Legal Study (2001); Robert v. Percival, Katherine H. Copper & Matthew M. Gravens, CERCLA in a Global Context, 41 SW. L. Rev. 727 (2012); N.S.J. Koeman, Environmental Law in Europe (1999). Sweden imposes strict liability for any pollution that harms or may harm people and the environment (Sweden Environmental Code, 1998). Such is the law in Switzerland, which is not a member of the EU (Environmental Protection Act of 1983, §4), and in France (Percival, Cooper & Gravens, 740). Holland distinguishes between two pieces of legislations: the statute from 1982 (Soil Clean-up (Interim) Act of 1982) applies retroactively from 1975 onward, because a polluter from that date forward ought to know it may be liable for its actions. This means that should the state remove pollution created after 1975, it may demand the polluter to shoulder costs, as held by the Holland Supreme Court (State v. Van Wijngaarden and State v. Akzo Resins (24.4.1992)). The legislation from 1994 focuses on administrative orders for removal of hazards. The agency employs this legislation, with a degree of success, to order a polluter or landowner to remove pollutions created before 1975. There is also a mechanism of environmental insurance shared by Dutch insurance companies (Nederlandse Milieupool), which aims to provide coverage, including for costs incurred by removing pollution, through direct payments to end users (Percival, Cooper & Gravens, 744; Wilde 203). In Spain, the relevant statute (Wastes Law tit. V (B.O.E. 96, 1998)) places responsibility for cleaning the polluted site on the polluter. This is retroactive and strict liability. In 1998 Germany adopted the federal statute that regulates protection of land from pollution (The Federal Soil Protection Act). The Act establishes strict liability, but the scope of actual compensation may be reduced according to the extent of the polluters’ liability. In Finland, new legislation from 2000 (Environmental Protection Act) applies strict liability on any kind of pollution, but not retroactively. The situation in Britain is highly similar to the legal situation in the United States under CERCLA. The British Environmental Protection Act of 1995 imposes retroactive strict liability for removal of hazards, regardless of the time the pollution was created and without an exhaustive list of polluting materials.

In Canada, relevant environmental legislation is not federal. Generally, legislation in most of Canada’s provinces is based on the principle of “the polluter must pay” while adopting strict liability standards. In Saskatchewan, legislation imposes strict liability to remove hazards on their creator (Environmental Management and Protection Act). In Nova Scotia, anyone who releases polluting material into the environment is obligated to reverse the pollution and remove the polluting material (Nova Scotia Environment Act, 1994-1995 S.N.S., ss. 67(2), 68(2)). The most restrictive standard of liability is that of British Columbia (Environmental Management Act, S.B.C.). This statute requires the manufacturer of a dangerous material, or anyone interested in that dangerous material’s removal, to remove it, as well as places retroactive strict liability upon them for the removal and rehabilitation of the polluted area. The statute clarifies that this obligation applies even when no legislation prohibited pollution at the time the pollution was created.

The Constitution of South Africa guarantees the right of each person to an environment that is not harmful to health or welfare (S. Afr. Const. §24(a), 1996). Following this right, South Africa’s National Environmental Management Act of 1999 (NEMA) requires anyone who has polluted or harmed the environment to remove that hazard and rehabilitate the damaged area. The statue does not explicitly establish strict liability, but the South African High Court (Transvaal Provincial Division) ruled that strict liability applies to owners of polluted land. However, the court ruled that the legislation is not retroactive as the legislature did not intend as such (Chief Pule Shardrack VII Bareki and Others v. Gencor Limited and Others (2005)). 

13.To end this part, let us recall that the environmental policy termed “Extended Producer Responsibility” (ERP) is widespread in Europe. This policy aims to extend the manufacturer’s liability to a product’s entire life cycle, even after the product is out of the manufacturer’s possession, or is no longer in use. It is rooted in the expectation that a more suitable policy would incentivize manufacturers to factor in, as early as when a product is being designed, environmental concerns such as improving the prospects for recycling the product, reducing the use of materials, etc. (see an overview by the OECD: www.oecd.org/env/tools-evaluation/eprpoliciesanIsrSCroductsdesigneconomictheoryandselectedcasestudies.htm).

In practice, the EPR doctrine brings different policy tools together: burial tolls, deposits, subsidies, and other taxes. Therefore, for example, in 1994 the EU issued a directive regarding packaging waste. The directive regulates manufacturing packages, as well as sets quantity goals for collecting and recycling packaging waste (for more on implementing the EPR policy in European Union countries see: Aaron Ezroj, Extended Producer Responsibility Programs in the European Union, 20 Colo. J. Int’l Envtl. L. & Pol’y 199 (2009)).

14.In summary, the overview above reveals different and similar components. As far as imposing strict liability on the polluter, a consensus emerges, certainly regarding inherently dangerous materials such as asbestos. Of course there are countries that have tied the extent of that strict liability to the level of fault. As for retroactive application, it appears there are different approaches: those who support retroactive application and those who oppose it. The implication of this review on our case will be clarified below.

II. Constitutional Analysis

15.We now turn to examining the constitutionality of section 74 in Israeli law. First we must consider the rights Eitanit argues were violated. Then we may discuss whether that violation, if any and to what extent, passes the tests established in the limitation clause of section 8 of Basic Law: Human Dignity and Liberty.

A. The Violated Rights

(1). The Right to Property

16.The right to property is enshrined in our law in section 3 of Basic Law: Human Dignity and Liberty. This right is accorded to corporations as well (see HCJ 4885/03 Israel Poultry Farmers Organization, Cooperative Agricultural Union Ltd. v. the Government of Israel, IsrSC 59(2) 14, (2004) at para 41 of Justice Beinisch’s opinion and citations there.)

The State agrees that section 74 infringes Eitanit’s right to property. In any event, this point needs no elaboration. I will only remark that according to Eitanit its property rights are violated not only by imposing financial obligations, but also by imposing a seemingly retroactive obligation without examining whether Eitanit is at fault. I will address these to aspects of section 74 in depth below.

(2) The Right to Equality

17.Eitanit’s argument is twofold. First, it should enjoy constitutional protection of its right to equality. Second, this right has been violated.

Still, the first prong is not at all simple. In Israel, constitutional protection of equality rights flows from the constitutional protection of human dignity. This is because the right to equality is not explicit in the Basic Laws. It is a hybrid model of sorts, in the sense that violations of equality rights are recognized only in the – rather broad – context of harms to human dignity. In regards to the latter the case law has adopted the approach that the constitutional protection covers not only humiliation or indignities, but also other aspects closely related to human dignity. For our purposes, this means that the constitutional protection of equality applies only to discrimination that humiliates and disgraces, or discrimination that is closely linked to human dignity (HCJ 5427/02, Movement for Quality of Government v. the Knesset, IsrSC 61(1) 619, at para 38 of President Barak’s opinion (2006); HCJ 6304/09 L.H.B v. the Attorney General, at para 76 of Justice Procaccia’s opinion (Sep. 2, 2010)). In this view, it is doubtful whether the constitutional right to equality should extend to a legal entity that is not flesh and blood (compare: HCJ 4593/05 United Mizrahi Bank Ltd. v. the Prime Minister, at para 10 of President Barak’s opinion (Sep. 9, 2006); HCJ 956/06 Israel Bank Union v. Minister of Communication, at p. 12 of Justice Hayut’s opinion (March 25, 2007); Ofer Sitbon, On People, Corporations, and everything in between, Kiryat HaMishpat 8, 107 (2009)).

In the case before there is no need to decide the general issue of the scope of constitutional protection for corporations’ equality rights. The reason for it is that I believe, as detailed next, Eitanit was not discriminated against at all. Incidentally, there may be instances where discrimination or lack of equality in the corporation context would require consideration. Two examples suffice: first, a statute that taxes a company owned by Arabs differently than a company owned by Jews. Even if the State would argue that the taxation applies to the corporation and not the individual, this is a matter that must be adjudicated. This example is easier because although there is discrimination between corporations – it is based on grounds involving people. The second example, which is the more pertinent for our purposes, is that of a corporation that claims a certain tax is imposed only on that corporation and not on any other corporation in the country. The argument is clear and notable, and renders discussion. However the violation, to the extent it exists, is not one of human dignity as applied to a corporation but of the right to property. The approach that infringements upon human dignity do not apply to a corporation, does not absolve the state from its duty to fend off the argument that the statute infringes upon the right to property, even if that infringement stems from a discrimination claim. Clearly, fleshing out the infringement upon property is different than fleshing out a direct infringement upon equality. The State may overcome the argument about violations of property rights in at least two ways: first, that there is no violation, and second, that the violation withstands the limitations clause. In our case, to me, the State’s response on this point is satisfactory even if we assume that a corporation has a constitutional right to equality, and this is also true when we explore the lack of equality in the context of infringement of property rights.

18.On one hand, Eitanit claims it suffered discrimination because it was required to shoulder the costs of removing asbestos waste discarded by asbestos importers. Additionally it is required to bear removal costs instead of those who have purchased final asbestos-cement product from Eitanit over the years, used them, and ultimately discarded of them. Obviously, there are financial ramifications to this.

Yet these arguments must be rejected in light of the statute’s language. The “waste population” subject to section 74 is industrial waste that came from operations at Eitanit’s factory. This definition excludes two types of waste: (a) completed asbestos-cement products, such as pipes and boards, that have been passed on to end users and then dismantled, discarded and gradually became waste (“the first exception”); (b) asbestos waste that came from production processes of others besides Eitanit (“the second exception”). These two exceptions are not included in the definition of “waste population” to which section 74 applies.

To clarify, the record reveals that professionals can easily distinguish asbestos waste that originated in production processes from completed asbestos-cement products that have been discarded post-use (the first exception). First, asbestos waste is a batter-like, non-homogenous mix that comprises of lumps and excess raw asbestos, cement, board and pipe debris made out of asbestos-cement. Additionally, some of the waste sites are built in layers: a layer of waste, above it a layer of soil, then again a layer of waste, and so on. In some sites the sacks used to bring in the waste were visible. These techniques indicated the methodical and lengthy process of waste removal, through burial or surfacing. These are not  random or accidental piles of asbestos-cement products that have been worn out and discarded absentmindedly.

This said, the language of the statute releases Eitanit from paying for the second exception – asbestos waste that originated in the production processes of others. This raises a separate question: how do we know that Eitanit will not be required to pay for waste that did not come from its own factory, under the second exception? There are several indications for this. First, section 74 targets only waste found in a radius of 15 KM from Eitanit’s factory. Second, Eitanit’s factory was at the time the only factory in Israel to process raw asbestos into final asbestos-cement products. The industrial waste from these production processes has unique characteristics, as discussed above. Other factories processed completed asbestos-cement products, and thus their industrial waste would have been consistent of only asbestos-cement and dust. Third, there is no evidence that other factories had indeed removed their waste in the same manner Eitanit did. Fourth, there is no evidence that asbestos importers operating in Israel alongside Eitanit at the relevant time, distributed asbestos in the area, and in any event the State clarifies that those importers used materials for acoustic and thermal isolation without cement. Fifth, in a survey from 2007, different witnesses reported out of their personal knowledge purchasing or receiving the waste from the factory and scattering it in the ground. These finding have been confirmed, the State argues, by soil samples and drilling.

The mounting of all this evidence, along with the above findings about the type of waste and its systematic discarding, indicates – to me – that there is a “presumption of burial” against Eitanit in the context of section 74. This presumption means that asbestos waste with certain common characteristics, that was buried in systematic and organized methods, all in a limited and confined area in the factory’s vicinity, would have come out of Eitanit’s factory. Lest we forget: this is a rebuttable presumption. After all, the legislature afforded Eitanit a right of hearing before the Minister, about specific areas where waste did not originate from Eitanit’s factory (according to section 74(d) of the Act and according to the instructions by the Minister – see above section 5, and the State’s attorney declaration that the content of the objection and the relevant instruction’s interpretation – p. 9, line 28 of the hearing transcript).

To summarize, the Act requires Eitanit to bear the cost of removing industrial waste that originated from the operations in its factory. Eitanit’s arguments in this regard cannot be addressed to the legislature, as the legislature expressly stipulated that Eitanit is only responsible for its own waste. These arguments may be relevant, at most, at the administrative level, if and when there are challenges to the Act’s implementation, and not at the clearly constitutional level we are concerned with here.

19.The argument regarding the end users, who received asbestos waste from Eitanit and used it to cover soil, is more complicated. Analytically, Eitanit’s argument is twofold. First, Eitanit was required to pay while the end users were exempted from direct payments. Second, Eitanit was required to pay for waste from which the end users also benefited. In my mind, the answers to the first aspect effectively resolve the difficulties in the second aspect. The main point is there is a relevant difference that justifies distinguishing the end users, who were not directly required to bear costs, and Eitanit. Recall that not every distinction is prohibited discrimination. Warranted distinctions, which are based on a relevant difference, will not usually be seen as prohibited discrimination (for example see the matter of LHB, para 77; HCJ 10203/03 The National Census Inc. v. The Attorney General, para 53 of Justice Procaccia’s opinion (August 20, 2008)). To me, there are three differences between Eitanit and the end users: the awareness test, the control test, and the profit test. Each and every one of these independently, let alone put together, constitutes a relevant difference that separates Eitanit from the end users and that warrants the distinction between them – from both aspects.

First, it appears from the material before us, that in the relevant time period, Eitanit had a notable advantage of information compared to the end users. This advantage manifested, primarily, in scientific knowledge that existed – or should have existed – for Eitanit even at that time about the potential health risk posed by asbestos waste. Indeed, there is no intention to find fault in Eitanit on neither the criminal or tort levels. Rather the presumption is that Eitanit must pay due to strict liability, not as a result of a finding that it breached any duties of care. However, the focus is on Eitanit’s awareness of potential risk caused by asbestos compared to other entities – the end users – to whom it asks to be considered similarly situated. The relevance of the awareness issue will be discussed more below.

In May 1969 Professor Schilling visited Eitanit’s factory. At the time, Professor Schilling headed the Department for Occupational Health at the London School of Hygiene & Tropical Medicine. After his visit, Professor Schilling authored a report, which was attached as Annexure 7 to the Respondents’ reply. In the report, Schilling points to severe health risks that are caused by exposure to dust in asbestos factories, including asbestositis, lung cancer and mesothelioma. He emphasized that the factory must take immediate precautions to reduce the risk of these diseases’ development.

In 1970, an organization of Israeli occupational doctors dedicated a conference to issues of employees and asbestos-cement factories. During the conference, an article written in collaboration with the factory representatives was presented. This article was submitted as Annexure 8. As early as the opening paragraph, the authors state that there is “clear awareness of health risks caused by asbestos and the prevalence of cases of asbestositis on one hand, and cancer on the other.

In April 1976, Yekutiel Federman, one of the holders of controlling interest in Eitanit, sent a letter to the factory manager, Mr. B. Friedrich. In that letter Mr. Federman states that: “The asbestos industry is currently the target of a witch hunt… Should we receive a positive report that proves the allegations are exaggerated and are not serious, and that it is more dangerous to walk down a street breathing in gas emissions from cars, and this report will be prepared by the Ernst Bergman Foundation, which is renowned in the science community, we will be able to combat the attacks academically and scientifically.” This letter, too, demonstrates that Eitanit was aware, at this stage if not sooner, of the scientific claims that were common at the time about the severe health risks caused by asbestos.

What is more, certain aspects of that time’s labor laws indicated the dangers of asbestos. As early as 1945 the British Mandate defined asbestositis as an occupational disease. This meant that a diagnosis of a factory worker with the disease was required to be reported. Additionally, the employment of women and teenagers in processing asbestos or its industrial use was prohibited. These directives were incorporated into Israeli law in the early 1950s. In 1964 The Safety at Work Regulations (Medical Examinations of Workers with Asbestos Dust, Talc and Silicon) 1964 were legislated. The Regulations set restrictions on the ways asbestos workers were employed, and required that workers receive periodic medical examinations. In 1978 The Safety at Work Regulations (Restrictions on Spraying Asbestos) 1978 were added. Those prohibited spraying crisp asbestos for isolation purposes. All of these were in force during the same period when, by Eitanit’s own admission, it passed on the waste to the end users, let alone when the waste was buried in the ground. Later, in 1984, the old Regulations – from both 1964 and 1978 – were incorporated into The Safety at Work Regulations (Occupational Hygiene of the Public and Workers with Harmful Dust) 1984. The new Regulations additionally prohibited the use of asbestos to pave roads. In 1988 this prohibition was expanded to manufacturing, importing and selling asbestos for road paving.

On the other hand, we do not have a sufficient factual foundation about the scope and depth of the end users’ awareness of the health risks caused by asbestos waste. However, on its face, it is doubtful that Eitanit and the end users are in the same category as far as what was known or should have been know. For decades, Eitanit imported raw asbestos, processed it into asbestos-cement, and manufactured final products from it. In effect, it was the dominant – if not only – entity in this industry. By virtue of this position Eitanit was likely familiar in real time with the relevant scientific research about Asbestos’ health risks. Not only did Eitanit apparently follow the developments, but was an active observer in the research (see, for example the article from 1970 and the Mr. Federman’s letter from April 1976, mentioned above). As an employer of asbestos workers, Eitanit was also subject by law to different duties that reflected the health risks asbestos posed. The end users, on the other hand, are in a different category. The material shows that they were not manufacturers of asbestos, nor were they industrial factories, but mainly the towns, kibbutzes and private persons in the area. These are probably not experts in asbestos, asbestos employers or workers, or even active in the scientific research scene.

Analogously, tort law attributes significant weight to knowledge gaps between parties. For instance, a doctor’s duty to disclose to clients stems from the presumption that there are major knowledge gaps between the parties, though their scope may change from case to case (see for this topic, CA 2342/09 Joubran v. Misgav Ledach Hospital (April 6, 2011)). Similarly, the scope of an insurance agent to a consumer depends, among others, on whether there are information gaps between the consumer and the insurance agent or insurer (LCA 5696/06, Saif vs. Mari, para 14 (Sep 21, 2009)).

Truth be told, factoring in the knowledge gaps between Eitanit and the end users is only part of a broader context. Eitanit is distinct from the end users because the products and waste left a factory it owns. This fact points to the material difference between Eitanit and the end users – Eitanit is the manufacturer of the waste. The end users were Eitanit’s customers. These are two different groups that must be distinguished. The distinction is consistent with the principles of EPR, mentioned above. The duties placed on manufacturers are not as the duties placed on the user. The manufacturer has control over the product’s design, assembly, and finalization. In any event is it highly logical to place extended liability on the manufacturer and placing financial burdens upon it, both for reasons of justice and fairness and of economic efficiency. In the matter at hand, the control test has an additional aspect. It is appropriate to weigh the fact that arises from the record, that Eitanit sold the waste for a low price, sometimes giving it away. This, too, solidifies the link between Eitanit and the waste, including that which is not on factory grounds, but in the land around it up to 15 KM. The awareness test thus connects to the control test and to economical aspects, and we must not neglect the profit test.

Applying economic approaches to law, it is clear that Eitanit and the end users are not similarly situated, as a function of the profit test. Comparative case law, primarily American case law, finds merit in placing the costs of asbestos removal on the manufacturing corporation because of its status as manufacturer. This consideration is relevant not only from an economical stand point, which may justify shifting the financial burden of removing hazards to the manufacturer’s shoulders, but also for reasons of justice and fairness. From this perspective, there is no discrimination against the petitioner but achieving the statutory purpose of “the polluter must pay.” We come back to this point when examining the issue of a worthy purpose which is, of course, one of the tests established by section 8 of Basic Law: Human Dignity and Liberty.

To summarize this point: there were knowledge gaps – actual and theoretical – between Eitanit and the end users. Moreover, Eitanit, as a manufacturer is clearly distinguishable from the end users. This distinction reflects the difference between the two aspects of the control test, as well as the profit test. The combination of all these – awareness, control and profit – establish, in my view, a relevant difference between Eitanit and the end users, in terms of its obligation to share up to half of the costs of removing the waste.

20.Eitanit additionally, claims it suffered discrimination compared to the local authorities. Eitanit bases its claim on the right to be heard by the Minister which section 74 grants the local authorities and which allows them to reduce the rate of their participation in funding the project. In reality, an arbitrary and low rate of only 10% was set in regulations which go as far as permitting “payment” of this rate by provision of services. Eitanit, on the other hand, was denied the option of carrying out the project on its own.

Here, too, I believe Eitanit and the local authorities are not similarly situated. There is a relevant difference between Eitanit and the local authorities, based on reasons stated above: Eitanit is the manufacturer of the waste, and created its implications. The local authorities, as the record reflects, are not even part of the “end users” addressed earlier. Their link to the waste is indirect, and they are merely a default in funding the project. Furthermore, the mechanism set in the Act splits the costs equally between Eitanit (on one end) and the local authorities and the state (on the other end.) Each and every Shekel that is reduced from the local authorities’ obligations will be added to the bill served to the State. Put together, the local authorities and the State will fund only half of the project’s cost. The result, therefore, is that – willing or not – taxpayers will directly shoulder at least half of the project’s costs. For this reason, too, the discrimination claim must fall.

21.Finally, Eitanit claims it was discriminated against in comparison with future polluters. It argues the Act stipulates that anyone creating asbestos hazards will bear the costs of removal according to their share of liability, and they will be permitted to remove the hazard (section 11(e) of the Act). Additionally, a bill for Prevention Soil Pollution and Restoration of Polluted Grounds 2011 (“the bill”) is pending before the Knesset. The bill, Eitanit maintains, is more lenient toward owners of polluted properties and considers the extent of their fault. Contrastingly, Eitanit bears the brunt of a strict liability standard regardless of fault and it is denied the opportunity to remover the waste on its own.

Regarding the claim of discrimination in terms of the bill, I see no reason to discuss a claim of discrimination in a bill that has yet to have been passed. As far as the discrimination claims about other statutory provisions go, I do not find it necessary to examine these provisions in detail, nor to consider whether they are discriminatory against Eitanit or perhaps favor it. This is because the project of removing asbestos waste from the Western Galilee merits regulation unique to it. I will elaborate on this point below, in relation to the argument that the Act constitutes personal legislation. As an aside, recall that the new asbestos statute prohibits manufacture of asbestos products, places full responsibility for pollution on the polluter, and only allows the polluter to remove the waste independently with the property owner’s consent. On its face, it does not appear that the statutory arrangement that applies to the petitioner is clearly more egregious than statutory arrangements that will exist going forward. Quite the contrary.

22.To conclude this part, I accept Eitanit’s argument that section 74 infringes upon its property rights. However, Eitanit’s argument about a violation of its equality right, insofar that it is a right independent of the property right, and this for the reasons described above. Based on these conclusions, I move on to examine whether the infringement on Eitanit’s right to property passes the tests set in the limitations clause of section 8 of Basic Law: Human Dignity and Liberty, entitled “Violations of Rights”:

“There shall be no violation of rights under this Basic Law except in legislation befitting the values of the State of Israel, designed for a worthy purpose, and to an extent no greater than required or by such a law enacted with explicit authorization therein.”

B. Violation of Rights In Legislation Or By Explicit Authorization Therein

23.Eitanit’s position is that the said violation of the right to property (and in its view the right to equality, too) is not in legislation or by authorization in legislation, because the Act constitutes personal legislation, with a specific target – Eitanit. Eitanit maintains that a statute that is not generally applicable cannot be considered legislation for the purposes of the limitations clause.

I cannot accept Eitanit’s position. Recall that the case law found the prong “in legislation or by authorization therein” to be a formalistic test that seeks whether the infringement upon basic rights was done by primary legislation or was authorized by primary legislation (see the matter of The National Census, para 9 of President Beinisch’s opinion; the matter of L.H.B, para 104 to Justice Procaccia’s opinion; see also Aharon Barak, Interpretation in Law Volume 3 – Constitutional Interpretation, 489-498 (1994)). To compare, section 5 of the European Covenant of Human Rights addresses ways to limit liberties, including a requirement that the limitation is done in legislation, or in the Covenant’s language: “in accordance with a procedure prescribed by law). Similar language appears in section 10(2) of the Covenant regarding limits on free speech. The European Court of Human Rights pronounced, in various contexts, on the interpretation of “in legislation,” and concluded that in order for a particular provision to be considered legislation for these purposes, it must be clear and accessible, that is, published to everyone (see: Tonilo v. San Marino & Italy, §46 (26.6.2012); Telegraaf Media v. Netherland, §§89-102 (22.11.2012)).

The piece of legislation at hand is a product of extended preparation. After passing the Knesset’s first reading, the Act was considered by the Knesset’s Interior and Environmental Protection Committee. The Committee dedicated over ten meetings to discuss the details of the Act. During the discussions, the constitutional issue was also examined. Eitanit argued boisterously, but its arguments were rejected. Once the Committee completed is process, the Act passed in second and third readings and was published officially. This in mind, the argument that the final produce is not legislation must fail. It appears Eitanit’s arguments about the lack of the Act’s general application repeat, in a sense, the arguments about discrimination against it – arguments I have addressed at length above – or, in a different sense, are claims about the Act’s wrongful purpose, claims that I will address below. And again recall: the Act does not expressly mention Eitanit or its factory. Instead, it uses terms such as “asbestos companies” and “factory for the manufacture of asbestos.” It is true, however, and undisputed, that only Eitanit meets the definitions in section 74. This matter might increase the need to guarantee the Act is proportional and does not overly infringe Eitanit’s property rights. Still, that the Act effectively only applies to Eitanit is not in and of itself sufficient for a finding that the Act is not “legislation.”

C. For a Worthy Purpose Befitting the Values of the State of Israel

24.What is the purpose of section 74, and is this purpose worthy and befitting? Section 1 states the Act’s general purpose: to minimize asbestos hazards in Israel. This is also the source for section 74’s actual purpose: to launch a project for the removal of asbestos waste from the Western Galilee. The explanations that accompanied the Act’s bill, as well as the State’s response in this petition, described how this severe and unique environmental hazard was formed in the Western Galilee. A very large amount of asbestos waste was scattered or buried in many dozens of sites. Some of the waste is buried deep underground, and some is used in surfacing trails, private gardens, agricultural land and the like – all, as mentioned, in dozens of different locations. I elaborated upon the harms caused by this waste in depth, and it is unnecessary to repeat it all here. The purpose of section 74, therefore, is to remove or reduce as much as possible this health risk, which in some ways is a “time bomb” threatening the health and welfare of many of the area’s residents. There is no doubt then that it is a worthy and important purpose, and the sooner it is achieved, the better.

This purpose is not only worthy, but also befits the values of the State of Israel as a Jewish and democratic State. I recently discussed Jewish law’s approach to protecting the environment, from a religious and civil perspective (HCJ 1756/10 The City of Ashkelon v. The Minister of the Interior (January 2, 2013)). I specifically mentioned Jewish law’s approach to attending to waste and the financial mechanisms it put in place in order to achieve this.

Additionally, the purpose of section 74 is worthy because it realizes area residents’ rights to health and to quality environment. There is no need here to go into the constitutionality or the scope of these rights (see: HCJ 3071/05 Luzon v. The Government of Israel (July 28, 2008); HCJ 11044/04 Solomtin v. The Minister of Health, paras 11-13 to Justice Procaccia’s opinion (June 27, 2011); Daniel Sperling and Nissim Cohen, The Impact of The Arrangements Act and Supreme Court Decisions on Health Policy and the Status of the Right to Health in Israel, Laws (4) 154, 218-225 (2012)). All these are complex, serious and weighty questions, but they are irrelevant to the case at hand. All that matters here is that cleaning waste is meant to remove a grave hazard that threatens the health of residents, and it is a welcome initiative. As presented above, this concern to the health of residents is typical of democratic states, which have invested substantial efforts in regulating removal in modern environmental legislation.

25.The State presents an additional reason for the way section 74 sets the funding mechanism: the principle of “the polluter must pay”. Truthfully, I am not convinced this principle is in fact the purpose of the Act in terms of the limitations clause. Arguably, this principle justifies choosing this particular mechanism, rather than the legislative goal. Put differently: it is the justification for the means chosen to achieve the end. Therefore, the principle must pass the limitations clause in the context of proportionality, not in terms of purpose. Yet the state explicitly argues that the Act has the purpose of realizing the principle of “the polluter must pay” (p. 9 of the record). However, even under this approach the principle is not a single purpose, but is intertwined with the central purpose, which is cleaning the Western Galilee from Asbestos Waste.

As I said, I doubt whether the principle of “the polluter must pay” is a purpose – even secondary – of the Act. It is possible this position, which upgrades the means to the level of an end, is meant to boost the legitimacy of the selected funding mechanism. Another possibility is that the State grabbed the bull by its horns. In other words, being aware of the distinct difficulties presented by the principle of “the polluter must pay” and by applying it, the State categorized it as a secondary purpose, willing to subject it to the proper constitutional review. But, as I will clarify, I cannot accept that this categorization of the principle as an end will injure Eitanit and prevent it from examining the proportionality of the funding mechanism established in section 74. For the purpose of ruling in this petition, I am willing to assume – for the sake of a complete discussion – that the principle of “the polluter must pay” is a secondary purpose of the Act in terms of the limitations clause. This approach demands that the matter be subject to a strict review of proportionality. Lest we forget, the worthy purpose test is but a threshold requirement (Aharon Barak, Proportionality in Law, 297 (2010)). That is, in the absence of a worthy purpose, a statute must fail constitutional review. For this reason precisely the worthy purpose test is not conclusive. It is not the end of the enquiry, but its beginning. The difficult task of constitutional review is yet before us. As former President Barak wrote: “It is a mistake to examine constitutionality of means through the lens of the end’s constitutionality. It would be too premature” (Id. at 299). Thus we must first evaluate whether the principle of “the polluter must pay” is indeed a worthy purpose befitting the values of the State of Israel. This discussion is separate from the discussion whether the principle of “the polluter must pay” and its application in the present case is proportional, given that it places strict liability, and does so retroactively.

The principle of “the polluter must pay” is simple. Whoever caused the pollution will fund its removal and be liable for harms that have and will continue to be caused. This principle stems also from efficiency reasons, with the premise that placing the financial burden on polluters will incentivize them to minimize the scope of the pollution. The goal is to reduce the amount of waste to be removed and to encourage the polluter to take precautions and develop “green” technology. This economical approach finds support in the theory of costs internalization. Coupled with the considerations of justice, which dictate that it is unfair for the polluter, who has profited from polluting, would deflect costs toward the public (see: Marsha Glefi, Ruth Plato-Shinar and Amichai Kerner, Lenders’ Liability for Environmental Hazards Caused by Borrowers, The Attorney (50) 439, 443-47 (2010); Isaschar Rozen-Tzvi, Who The Hell Does This Waste Belong To? Waste Removal and Environmental Justice in Israel, Law Research (23) 487, 553-54 (2007)). This approach was recognized by many democratic states, as reviewed above.

We will note that in Jewish law, too, the basic obligation of waste management is placed on the waste’s owner. It is thus generally prohibited to remove raw materials – such as rocks and dust – or actual waste into public spaces, and the owner is expected to be liable in torts, or subjected to fines (Tosefta Bava Kamma 2; Tosefta Bava Metzia 11, Babylonian Talmud, Bava Kamma 30, 1; Maimonides, Yad ha-Chazaka, Hilchot Nizke Mammon 13, 13-17; Shulchan Aruch, Choshen Mishpat, 414, 2; also see my opinion on the matter of The City of Hulon.)

The principle of “the polluter must pay” is well established in our current law. It is also the answer to the Petitioner’s claim that section 74 is out of place in the legal landscape. The Prevention of Environmental Hazards Act (Civil Suits) 1992, authorizes courts to order anyone who causes environmental hazards to cease from doing so, to correct the hazard, or to restore, and this regardless to the level of fault, if any (section 2-4.) Additionally, a string of legislative amendments in this vein was incorporated into The Environmental Protection Act (The Polluter Must Pay) (Legislative Amendments) 2008. Further, in terms of industrial waste, the principle of “the polluter must pay” translates into a similar principle of “manufacturer responsibility”. That practical meaning of this is that the costs of taking care of and recycling waste will generally be placed upon the factory that manufactured the polluting products in its production processes (see above regarding EPR policies). This has many aspects in the new environmental legislation in Israel. We will mention here The Environmental Care for Electric and Electronic Equipment and Batteries Act 2012, The Regulation of Care for Packaging Act 2011, The Beverage Container Deposit Act 2001 – amended in 2010 to set quotas for bottle collection by manufacturers, The Removal and Recycling of Tires Act 2007, and The Preservation of Cleanliness Act 1984 – amended in 2007 to set a mechanism for burial tax (see the matter of The City of Hullon, para 31 of Justice Barak-Erez’s opinion).

Incidentally, the State points out that the principle of “the polluter must pay” is reflected in statutes that were already in effect when Eitanit created the asbestos waste. For instance, section 54(1) to The People’s Health Ordinance, num. 40 of 1940 stipulates that the local authority or the ministry are authorized to order a person who created a hazard to remove it. For these purposes, a hazard is any place whose state or use endanger or damage public health (section 53).

To summarize, Eitanit does not dispute that the purpose of the Act insofar that it is to remove asbestos waste from the Western Galilee is a “worthy social purpose” (see section 107 of the petition). The Petitioner’s primary opposition is for the principle of “the polluter must pay”, particularly in terms of the strict liability standard and the retroactive application. In this context, Eitanit challenges the efficiency of applying the principle of “the polluter must pay” and the fairness in applying it. Therefore, assuming that “the polluter must pay” is a worthy purpose because of its contribution to ecology, the question remains whether the funding mechanism is proportional. This question leads us to the main issue, which is the establishment of retroactive and strict liability.

D. Proportionality

26.The last requirement of the limitations clause is that the infringement of a constitutional right is “to an extent no greater than required”. This is the proportionality requirement. The case law has articulated three sub-prongs for evaluating the proportionality of infringements of constitutional rights: the rational connection test, the least restrictive means test, and the cost-benefit test (narrow proportionality). 

Before we begin, recall that the proportionality criterion does not dictate selecting only one mean to achieving the legislative end. There is a collection of – perhaps many – alternative measures, all of which may in themselves be proportional. These measures are different in terms of the scope of their infringement on constitutional rights, as well as how they may achieve the legislative purpose. This creates a range of proportionality within which the legislature may operate. The legislature has room to maneuver, and it may choose certain alternatives over others so long as they sit within the range of proportionality (compare: HCJ 2605/05, The Academic Center for Law and Business v. The Minister of the Treasury, para 46 of President Beinisch’s opinion (November 19, 2009)).

(1) Rational Connection

27.Under the first proportionality sub-test, we must examine whether there is a logical link between the Act’s purpose and the means selected to achieve it. As I have discussed above, for purposes of our discussion, the Act has two goals: to clean the Western Galilee of asbestos waste, and to realize the principle of “the polluter must pay”. These are the legislative ends. The means that legislature selected is the mechanism set in section 74, specifically its funding aspect (which is at the core of this petition). We will explore the link between the selected means and each of the purposes.

28.Regarding the first purpose, I do not find it necessary to elaborate, because the link here between the means and the end is practically obvious. The first purpose is to remove asbestos waste from the Western Galilee. The selected means is the relevant project, arranging for its budget and funding and authorizing the Minister to establish operative regulations. The means leads directly to the end.

29.As for the second purpose, the case is more complex. Eitanit raises a string of questions about the link between the funding mechanism established and the principle of “the polluter must pay”. Eitanit’s criticism includes four arguments. First, Eitanit claims there is no evidence it scattered the waste. Second, Eitanit is subjected to strict liability, and it is required to pay for conduct that was not legally proscribed at the time. Second, Eitanit maintains that a significant portion of the waste was distributed by the end users and not by Eitanit. Third, Eitanit challenges the strict liability imposed upon it, along with the requirement to pay for conduct that was not statutorily prohibited at the time. Fourth, Eitanit argues that it must pay for past-conduct such that the aspect of channeling behavior and deterrence is non-existing here. Retroactive payment, Eitanit believes, is also unfair. Therefore there is no link, to Eitanit, between the type of payment the Act imposed upon it and the principle of “the polluter must pay”.

The first argument raises a factual issue, which I have addressed above. Repeated briefly, the accumulation of several indications demonstrates that there is a “presumption of burial” against Eitanit in terms of section 74: the asbestos waste, that has similar characteristics, was buried by organized and systematic techniques, and all in a limited area around the factory. Even if this not an absolute presumption, Eitanit has the opportunity to argue that the waste in a specific location did not originate in its factory. To what extent a petitioner may attack the factual basis for the Act is a good question. I my view, such attack is not identical to attacking the factual basis for an administrative decision, or even to an administrative petition in the High Court of Justice, or to a factual dispute between parties of the civil or criminal case. Yet, as mentioned before, the broad legal issue need not be decided here, as the factual basis is well substantiated. The truly relevant question is what this factual basis means.

The second argument does not negate the rational connection between the means and the end either. It is true that some of the waste was layered on the ground by the end users. However, one of the important justifications for the principle of “the polluter must pay” is cost internalization by whoever benefited from creating the pollution. In our case, Eitanit fits this criterion because it profited from the production processes that resulted in buildup of industrial waste. Additionally, it profited – albeit indirectly – from passing the waste from the factory on to the end users. In any event, there is a clear rational link between the means – mandating that Eitanit share the cost of removing the waste – and the relevant purpose – the principle of “the polluter must pay”. Eitanit’s arguments on this point may be seen from a different angle that focuses the discussion on the question of equal burden. In other words, why would Eitanit alone shoulder the financial burden and not the end users? The answer is twofold. First, there is no discrimination between Eitanit and the end users. I discussed this in depth above. Second, the possibility of a different allocation of financial burdens as to reduce the harms to Eitanit. I will discuss this below, when analyzing proportionality’s second and third sub-prongs.

The third and fourth arguments revolve round the strict liability and its retroactive application. Regarding the rational link between the means – the funding mechanism – and the secondary purpose – the principle of “the polluter must pay,” it seems that imposing payments on the entity that created the hazard and benefited from it advances this purpose and puts it into practice. Refer to the discussion above as to how the principle of “the polluter must pay” is based on justice and fairness. It is only reasonable and logical that whoever created a hazard and was the primary beneficiary of it would be the one required to pay for it. In this context, it would be appropriate to combine the two purposes the State finds in the Act. It is necessary, as Eitanit also agrees, to remove the asbestos waste from the Western Galilee. The legislature elected, as did other legislatures in democratic states, to impose special costs on the asbestos company – the manufacturer and direct profit-maker – compared to others, including the public.

To sum up this point, this is not a case where the means do not promote the end. The contrary is true. Recall that the “the rational connection test, like the worthy purpose test – is a threshold test. It is not a balancing test. It does not weigh the worthy purpose against the infringement” (Proportionality in Law, p. 387). However, there is the approach that the first sub-prong is not technical: “this sub-test is not satisfied with the existence of a merely technical causal connection between the means and the end. Therefore the requirement for a rational link is designed, among others, to restrict arbitrary, unfair or illogical means” (HCJ 2887/04 Abu Madigam v. Israeli Land Authority, IsrSC 62(2) 57, para 37 of Justice Arbel’s opinion (2007)). In my own opinion, the natural place for testing the justice and fairness of a means is in the contest of the second sub-prong, and more so in the third sub-prong. That said, I am willing to assume that in extreme cases where the means’ arbitrariness and unfairness are obvious this should be considered even in the first sub-prong. This certainly is not the case: here, applying the second and third sub-prongs will shed light on the extent of justice and fairness in the chosen means.

(2) The Least Restrictive Means

30.We now approach proportionality’s second sub-test. The question before us is whether, of all the alternative means that may achieve the purpose of the Act, the means selected is that which least infringes Eitanit’s right to property. Put differently, we ask whether there is a less restrictive alternative that will similarly achieve the Act’s purpose (compare HCJ 10202/06 The City of Nahariya v. The West Bank Military Commander, p. 12 (November 11, 2012)).

In this context, Eitanit identifies two alternatives for the mechanism established by the Act. One is to “repair” the sites where the waste serves to cover the land. The second is allowing Eitanit to execute the removal project on its own. We will explore each alternative.

31.The first alternative is only generally argued by Eitanit, without adding details that can illuminate the primary relevant question: is it expected to achieve the same purpose while harming Eitanit less. Recall, that, as Eitanit presented things, re-covering and sealing the paths that were surfaced with asbestos is a partial solution to the waste problem at best. Whether this is a real fix, including for the paths themselves, is doubtful. Moreover it is unclear to Eitanit what the solution for other types of waste, such as waste that was buried underground. We cannot therefore find that the suggested alternative would sufficiently accomplish the Act’s purpose of cleaning the Western Galilee from asbestos waste, while lessening the harm to Eitanit.

32.We are left with the second alternative: Eitanit’s consent to removing the waste independently, instead of paying for removal (the “self-removal” alternative). However, the Petitioner did not meet its burden to prove that this alternative will serve the Act’s purpose adequately.

The task of removing the asbestos waste was discussed among the parties for a long time. Eitanit’s proposal to remove the waste, through a sub-contractor it will employ, was also subject to discussion. After several rounds of negotiation, the proposal was rejected. I will here refer to a detailed and reasoned letter that Mr. Oshik Ben-Atar, a senior deputy to the Accountant General, sent to Eitanit in November 2010, in which the State notified Eitanit that its self-removal proposal is impractical. The letter states that Eitanit estimated the project to cost between NIS 166-300m, if not more (see also section 120 of the petition). These are substantial gaps that elicit concerns that Eitanit’s low estimate will prevent it from completely and successfully executing the project. This is coupled with the doubt that Eitanit has, on its face, little incentive to execute the project as best as possible. This is also because it is not expected to profit from executing the project and it has no incentive to conduct thorough surveying and locating all the polluted sites.

Eitanit maintains the recently completed removal of asbestos from a certain area, under State supervision, and the costs of that removal was approximately 65% lower than the costs estimated by the State. The State, on the other hand, maintains that the experience with Eitanit in this regard is not positive. The State supervises Eitanit’s work to restore waste sites in Sheikh Danon and in Shlomi, as well as work to remove asbestos waste in other areas. These projects have been found to have professional deficiencies, and these deficiencies have caused major delays in the projects.

I do not intend to rule on the factual disputes between the parties, as if this were a civil dispute or an administrative petition. Such a ruling is not necessary for our purposes. We are concerned with section 74 of the Act, not with administrative or appellate review. The question before us is whether there is an alternative means that will impose less harm upon Eitanit, while achieving the legislative purpose behind section 74. From this perspective, Eitanit has not met its burden. I am not persuaded that the self-removal option will lead to the end that inspired enacting section 74 – cleaning the Western Galilee from asbestos waste. We were even presented with material that supports the State’s position, or at the very least demonstrates its logic.

33.The perspective we so far employed has been negative: whether there are alternatives that achieve the statutory purpose while lessening the harm caused to Eitanit. Eitanit emphasized this approach. However, the issue can be examined, simultaneously, in a positive perspective: whether the mechanism elected by the legislature includes checks and balances that reduce the harm caused. In this contest there are five elements: (1) Eitanit would be required to pay no more than half of the estimated removal costs – half, perhaps less but certainly no more; (2) In any event, Eitanit’s funding obligation shall not exceed NIS 150m; (3) The funding mechanism the legislature selected, along with supplementary instructions from the Minister, ensure that this is not a fine or a compensation. Eitanit’s financial obligation will be used to (partially) cover the costs of removal alone; (4) The relevant removal project is limited to a radius of 15 KM around the factory. Section 74 does not compel Eitanit to participate in funding the removal of asbestos waste if that waste is in locations beyond that area. Finally, the Minister’s instructions create a mechanism of supervision and checks that will allow Eitanit to challenge each and every payment it is required to submit in terms of specific waste sites.

The five elements mentioned are no hypothesis or creative interpretation. These are checks and balances built into the explicit language of section 74 and its supplementary instructions. They reduce the harm caused to Eitanit’s property, while still achieving the primary purpose of cleaning the Western Galilee of asbestos waste and the secondary purpose of “the polluter must pay” (to the extent this purpose exists).

The elements above can be categorized through three questions: how much, for what, and how. “How much”: 50 percent, which shall not exceed NIS 150m. In examples from the United States and from other countries, some legislation required funding up to 100 percent, without setting a maximum amount. The gap in the amount is substantial. It is another rebuttal for Eitanit’s argument that it would have been appropriate to impose some liability for removing the waste upon the end users. As mentioned before, I am not persuaded that the maximum amount set does not reflect a fair estimate of potential costs. Moreover, even were the Petitioner to dispute the estimates for removal, because the State bears half the costs, it has no interest in inflating costs. “For what”: for cleaning a defined area. The significance of this is that there is no penalty or sanction. Restricting the project that Eitanit must fund further supports the conclusion that the means of imposing liability is not an end unto itself. The “for what” element is joined by the scope of the territory – a 15 KM radius around the factory. This area is not only limited but also reflects the history of Eitanit’s conduct in terms of distributing industrial asbestos waste. This history include the fact that Eitanit buried some of the asbestos waste, as well as passed it on to the end users in the area for very low cost, or no cost at all. This supports the assumption that implementing the principle of “the polluter must pay” is neither arbitrary nor irrational. The third question is “how”: the section includes an internal mechanism that ensures that Eitanit is able to present its position as to the periodical invoices it would receive. The reservations Eitanit may raise in this context are not limited to calculations, but also to the issue of whether particular piles of waste in fact originated in its factory. The State stipulated this in section 121 of its responding papers. This element contributes to the proportionality of the selected means. The internal mechanism emphasizes supervision rather than top-down orders.

(3) Narrow Proportionality

34.We are thus left with the third and last sub-prong of constitutional review: the narrow proportionality test. This tests measures the appropriate ratio “between the public benefit of a statute subject to constitutional review and the infringement of a constitutional right caused by that legislation (the matter of The Academic Center, para 50 of President Beinisch’s opinion; see also HJC 2651/09 Association for Civil Rights in Israel v. The Minister of the Interior, para 22 of Justice Naor’s opinion (June 15, 2011). It weighs cost against benefit in the constitutional sense – social gain versus infringement of rights.

The case law expressed the view that “this is the most important of the three sub-prongs” (Justice Dorner in HCJ 4541/94 Miller v. Minister of Security, IsrSC 49(4) 94,140 (1995)). Either way, it is not a threshold test. Being the last obstacle in the constitutional journey a spotlight is pointed at this test. Though it is termed “narrow proportionality” is it not narrow at all. It poses a special challenge to judges. In my view, and precisely because of it, the test may develop over time – including setting standards for its application – more than the other sub-tests.

In any event – in our case – it is crystal clear that the Act is immensely beneficial. Therefore, it may be determined that the section is unconstitutional only if the infringement on Eitanit’s property rights – the other side of this equation – is so great that it eclipses the benefit.

By imposing financial obligation, section 74 infringes upon Eitanit’s right to property. Its arguments articulate three aspects that exacerbating the infringement: (1) the Act is personal; (2) the Act imposes strict liability; (3) the Act is retroactive. For each aspect, I first present the substance of the harm argued, then the actual scope of the harm: has the Act crossed the constitutional line and thus must be struck down; is the harm indeed as severe as argued or can it be mitigated by elements of the Act. This analysis will illuminate the constitutionality of the ratio between the cost and the benefit.

Personal Act

35.It is undisputed that even though the Act does not explicitly mention Eitanit, it is personal legislation as it effectively applies specifically to Eitanit.

In a broad sense, one of the basic traits of a statute, that in principle distinguishes it from other arbitrary norms, is its general application. This trait usually manifests in application over a non-specific group of subjects, or in that the statue mandates, prohibits or authorizes constant or organized conduct (aspects discussed by H. L. A. Hart, The Concept of Law (1961); see also Chaim Ganz, On The Generality of Legal Norms, Iyunei Mishpat (17) 579, 579-85 (1992)). This distinction constitutes one of the differences between a law that addresses the public at large and a judicial decision that addresses a single individual. Therefore, arguably, though this is a statute enacted through the proper legislative process, substantively, it is so flawed that it infringes Eitanit’s right to property.

I respond to this with the justification for Act targeting only Eitanit. It is not a question of numbers, that is, how many are subjected to the Act, and the fewer the number, the more personal the statute. Rather, we must ask whether there is good reason for applying a statute only to a limited group. The examination must be done carefully when few are concerned, let alone when only one factory is.

What is the context around section 74? It appears there is no arbitrariness, whim, or specific persecution. The legislature prioritized a project for cleaning the Western Galilee. The section was designed to respond to a unique situation – extensive accumulations of asbestos waste, in a defined geographical area, that was created systematically by one dominant entity. Eitanit presented no arguments to the effect that this is not exclusive to the Western Galilee. It should also be noted that Eitanit enjoyed its status as a lone and dominant manufacturer in the local asbestos market.

The heart of the matter is that Eitanit’s special position is not born of legislation but of reality. Presumably, and as reflected in comparative foreign legislation, in a more sizable country, the market would include more than one player. And yet, the Israeli Act was designed to remove the waste through the shared – but not full – participation of the entity that created it and profited from it. That this is a single entity does not compromise justice or fairness. From this perspective, I do not believe that the fact that Eitanit was a single factory indicates, in constitutional terms, excessive infringement of property rights. In my opinion, these considerations mitigate the alleged harm caused by the sections lack of general application. I will also note that to the extent that Eitanit claims that the Act’s lack of general application is discriminatory, I cannot accept this argument for the reasons detailed at length above, when discussing the issue of infringement of equality.

Incidentally, the Israeli legal code already includes complete statues that are clearly personal. For instance, President Haim Weitzman Act (Retirement and Estate) 1953 sets the retirement amount that was paid to the first President’s widow. Another example is the Bank Shares Settlement Act 1993, which addressed the nationalization and privatization processes of the four big banks at the time (Leumi, HaPoalim, Discount, and Mizrahi), in light of the bank shares crisis of the 1980s. These examples support the argument that unique situations calls for unique legislation, and may even justify personal statutes.

Strict liability

36.The Petitioner points to another factor that exacerbates the infringement upon its property: the de facto strict liability standard. In other words, the legislature imposed upon Eitanit liability for polluting activity it committed in the past, though on its face these activities did not constitute breaching any duty of care at the time, and in any event no court found otherwise. Eitanit argues this aspect exacerbates the infringement upon its property rights.

It is true that on its face, strict liability raises concerns and warrants examination. In my view though, three factors mitigate, or balance out, the constitutional challenge involved in imposing strict liability.

First, the support for imposing strict liability in comparative law, which I elaborate on further below. Second, imposing strict liability in the context of removing polluters relies on weighty considerations. I mentioned justice and fairness, along with the economic rationales of deterrence and cost internalization. Another justification is the evidentiary challenges that follow from a fault-based standard, and may be avoided through a strict liability standard (see above the discussion of European and American law). Third, I believe that in this case there is a unique element that takes a little bit of the sting out of strict liability. Foreseeability is a relevant consideration when it comes to strict liability. Thus in American law, for instance, The Third Restatement of Torts explains that strict liability for abnormally dangerous activity is desirable. Activity is found to be abnormally dangerous when several cumulative conditions are met including that the activity creates a foreseeable and highly significant risk of harm, and that the activity is not one of common usage even when the actor has taken reasonable precautions (Restatement (Third) of Torts: Liability for Physical and Emotional Harm §20 (2010); see further Gilad, p. 1293-97). In light of this, foreseeability sets the limits of strict liability in one sense, and justifies the imposition itself, in another. It should be noted that the Restatement is not binding law in the United States, but it is considered to reflect the current state of the law and is commonly used in American case law. It is also true that in the United States, waste pollution is regulated in specialized legislation. However, in my opinion, the above is relevant for constitutional challenges to strict liability.

Jewish law may serve to clarify the point. The Mishna states, in the context of torts, that “one will always err, whether by mistake or on purpose, whether awake or asleep” (Babylonian Talmud, Bava Kamma 26a). This is a type of strict liability. Maimonides qualifies the scope of liability:

“When do we say that the person asleep must pay? When two who slept side by side, and one of them rolled over and injured the other or ripped his clothing. But if one was asleep and another joined him and lay by his side – the person coming last is the wrongdoer, and if the person asleep caused the injury, the latter would be absolved. And likewise if a pot were placed next to the sleeping person and the latter broke it, he would be absolved, as the person who placed the pot is the negligent wrongdoer” (Mishneh Torah, Book of Torts, Hilchot Chovel U’Mazzik 1, 11.)

This teaches us that if, for example, a person sleeps in another’s home by a lamp and during their sleep they strike and break it, they must break it. However, if after a person has fallen asleep, someone places the lamp by their side, and during the night the sleeping person breaks it, they are not liable for the damage. The relevance to our matter is that even with a strict liability standard, putting an object in play without the knowledge of the injuring party, may absolve them from responsibility. This approach is reminiscent of the innocent owner defense: under the CERCLA, a landowner is not liable if at the time they purchased the land they “did not know, and had no reason to know, that they had any hazardous substance” (42 U.S.C §9601(35)(A)(i)).

In our case, the material shows that Eitanit’s activity with the waste was not conducted without any foreseeability or knowledge about the harms of asbestos. I have discussed this, when examining the knowledge gaps between Eitanit and the end users. Professor Shilling’s report from 1969 detailed the health risks caused by exposure to asbestos dust, including asbestositis and cancer. An article from 1970, authored in collaboration with representatives from Eitanti’s factory, states that there is “clear awareness of health risks caused by asbestos, and the prevalence of asbestositis cases on one hand, and of cancer on the other.” A letter from 1976 by Mr. Yekutiel Federman, one of Eitanit’s controlling shareholders, addresses the scientific research of the time that discussed asbestos health risks. Additionally, Eitanit, as an employer of asbestos workers, was subject to different labor laws that acknowledged the risks caused by asbestos: defining asbestositis as a vocational disease, prohibitions against employing teens and women in asbestos factories, the requirement for periodical medical examinations, and so on.

This means, in other words, that Eitanit had a certain extent of factual foreseeability or knowledge about asbestos health risks. It should be noted, to clear any doubts, that I am not dealing here with the necessary bar to meet the burden of proof for tort, criminal or other liability. This is not the topic of discussion, nor is it the standard. We are concerned with constitutional review. The issue at hand is what the scope of harm Eitanit has been caused is, and particularly – what weight should be attributed to imposing strict liability. In this view, the indicators I have listed should not be ignored, as they demonstrate Eitanit’s foreseeability or knowledge – even some – and all to the extent relevant for the matter at hand.

As a court comes to examine whether there is constitutionality of the infringement caused by imposing financial obligations on Eitanit, I believe that even partial knowledge lessens the infringement of her property rights. Put differently, even in the absence of liability or in the existence of strict liability, the link between the liable party and the conduct still warrants scrutiny. Put differently still: had section 74 imposed liability on a different company that did not manufacture asbestos in the relevant time period, or did so but not in the Western Galilee, the concerns around section 74 would significantly multiply. And again recall that section 74 does not impose on Eitanit tort or criminal responsibility. The statute does not convict, taint, or even attribute liability to Eitanit. And the means chosen is not a fine or compensation. It is designed to remove asbestos waste from the Western Galilee. Of course, this does not mean that the legislature may impose liability arbitrarily and as it sees fit. Therefore section 74 must be tested according to the limitations clause. We believe, as explained above, that there is a link between Eitanit and the waste that justifies the strict liability standard set in the section.

To summarize, though strict liability poses difficulties, considering the circumstances as a whole, the existence of similar standards regarding removal of dangerous buried waste in many other countries, the justification of “the polluter must pay”, the element of Eitanit’s knowledge or foreseeability about the specific harms and risks, and the type of financial obligation that is not a fine or compensation but the cost of cleaning the area in order to halt the development of serious harms to the residents and the environment, it seems that the benefits outweighs the infringement of the right.

Retroactive Legislation

37.A separate issue arises as to the temporal application of the Act. Eitanit claims that this is retroactive legislation, and therefore increases the infringement of its property rights. By this logic a retroactive statute comes into effect after conduct was complete, but changes the rules of the game for the future. The State, though, believes that the statute applies actively, and thus Eitanit’s claim is mitigated. That State’s position is that retroactive legislation cannot be precluded in every scenario. Who is correct about this? The issue of temporal application is complex. Therefore, first we generally present the relevant terms. Then we analyze the issue in the context for section 74, including the extent of harm to Eitanit.

Retroactive legislation changes for the past the legal status of activity that occurred before the legislation came into effect. Retrospective legislation changes for the future the legal consequences of activity that occurred before the legislation came into effect. Prospective legislation changes for the future the legal statues of activity that will occur after the legislation comes into effect.

To illustrate the differences, consider the following hypothetical: Reuben smokes a cigarette in a public space on January 1, 2012. At the time this was not prohibited. On February 1, 2012, a statute was enacted that imposes a steep fine on smoking in public places. If the new statute applies only on whoever smokes in public places from February 2, 2012 on, this is a prospective statute. If however, the statute stipulates that it came into effect on January 1, 2012, it is a retroactive statue. It alters the legal status of Reuben’s smoking, and subjects him to a fine. However, the statute is retrospective if it stipulates that anyone who smokes between January 1, 2012 and the day the statute was enacted did not commit any offence, but is required to participate in a class offered by the Ministry of Health about the harms of second-hand smoking. The statute did not alter for the past the legal status of Reuben’s smoking – which is not an offense – but did change for the future the consequences of his action. In this case, the unique status of a retrospective statute is obvious: the statute clarifies that Reuben did not commit an offense and the consequences he must face are not a fine or penalty, which is inconsistent with retroactive legislation. Reuben would still have to bear certain consequences for his past conduct, which is inconsistent with prospective legislation. It should be noted that this distinction, between retrospective application and retroactive application, is not acceptable by all, but has been established in the jurisprudence of this Court and in several other legal systems, such as Canada (for more on these definitions, see CA 1613/19 Arviv v. The State of Israel, IsrSC 46(2), 765 (1992); Aharon Barak Interpretation in Law, vol 2 – Legislative Interpretation, 609-45 (1994); Yoram Margaliot, Discrimination in Regulating Financial Savings and its Proposed Solution, Mishpatim 31, 529, 552-56 (2001); Yaniv Rosnai, Retroactivity: More Than Just ‘A Matter of Time’!, Law and Business 9 395 (2008); Daphne Barak-Erez Administrative Law, vol 1, 351-52 (2009)).

Another categorization that may be relevant for our purposes is active legislation: a piece of legislation that changes for the future the legal consequences of a situation that already existed the day the statute came into effect. Obviously, active legislation is closely linked to retrospective legislation. The difference between the two is that active legislation applies to situations that exist in the present, whereas retrospective legislation applies to activity that has already concluded in the past. For the hypothetical above, assume that the new statute would believe the impact of smoking in public places to leave residue for two months, and impose obligations accordingly – this is active legislation. It is another way to justify obligating whoever had smoked in a public place a month prior to the statute’s effect to participate in the course, as the hypothetical goes.

In his book, Professor Barak presents another example to illustrate the difference between retrospective application and active application. The difference depends on the purposive interpretation of the relevant statute:

“Take a new statue that stipulates that anyone convicted of an offense cannot serve as a Knesset Member. Would the term ‘anyone convicted of an offense’ point to an activity or a situation? Would applying the statute on anyone who was convicted of an offense before the law came into effect constitute retrospective application?... If the statutory purpose is to set an additional sanction – beyond the criminal sanction – for anyone convicted, then it addresses the activity that led to the conviction in the past. Applying the new law to such activity constitutes retrospective application of the statute. However, if the statutory purpose is to ensure public trust in elected officials and government institutions, then it addresses the situation of ‘convicted’. Applying the new statute on a situation that existed before the statute came into effect and continues to exist in the present does not constitute its retrospective application” (Aharon Barak Interpretation in Law, vol 2 – Legislative Interpretation, 628 (1994).

38.Equipped with these tools, where does the case before us fall? Section 74 of the Act requires Eitanit to shoulder the costs of removing waste it buried in the ground or passed on to the end users. On one hand, this is not retroactive application: the section does not change the past, and does not define Eitanit’s past conduct as an offense or as conduct that creates liability in torts. On the other hand, this is not prospective application, as we are concerned with removing existing waste and not waste that will accumulate in the future. The question is therefore whether this is active or retrospective application. On one had, arguably, this is active application: the Act addressed a current situation – waste that threatens public health. This is the State’s position. Alternatively, it can be argued that this is retrospective application: the Act changes the legal consequence of the burial and giving away that Eitanit did in the past, and imposes a new sanction on Eitanit. This is, effectively, Eitanit’s position.

The dispute between the parties is not merely theoretical, and the categorization of section 74’s temporal application holds constitutional significance, because the four main categories of temporal application – prospective, retrospective, active, and retroactive – may be organized along a “spectrum of legitimacy”. This spectrum reflects how we treat a piece of legislation. The premise for the “spectrum of legitimacy” is as such: the more the statute sends its tentacles significantly toward the past – so do more concerns come up about the statute’s legitimacy. The intuition behind this has many rationales: the rules of the game must be clearer from the outset, for reasons of justice and fairness, and the legislature should not be permitted to change them retroactively. Additionally, retroactive changing of rules compromises public trust in the legislature, limits the statute’s ability to channel future behavior, and undermines stability and certainty. It should be emphasized that a statute should not automatically struck down only for its location on the spectrum. Yet the justification for a statute’s temporal application must be more persuasive (this is not so for criminal legislation, see section 3 of the Penal Law 1977; a similar state exists in Canada: Canadian Charter of Rights and Freedoms §11(g), in India: Constitution of India, §20(1), in South Africa: Constitution of South Africa, Chapter 2 – Bill of Rights, §35(3)(1), and in Norway: Kongeriket Norges Grunnlov, §97).

On one end of the “spectrum of legitimacy” we find prospective application. This is more acceptable because it has no impact on past actions or past situations. On the other end we find retroactive application. This application is the type most difficult to swallow because it pulls the rug from underneath activity that has already been concluded and changes its legal meaning. Active application is situated between retrospective application and prospective application, because it applies to situations that are rooted in the past but that continue into the present. Therefore, in some sense, it is more acceptable and reasonable than retrospective application, which entirely addresses actions that have ended in the past. Thus the relative importance of the issue before us, about the categorization of section 74 – retrospective or active?

I have given much thought to this question. It is true that the Act applies to an existing situation. We are concerned with removing waste that is already buried in the ground, or is used to cover it in order to create different types of surfaces (roads, pavement, etc.). In this sense, the law applies actively. Yet I believe that categorizing section 74 under active application misses the point. Recall that this is not a case where only several of the factual elements have occurred in the past. Here, all the factual elements have occurred in the past: the waste has already been buried or placed as surfaces. In such a case, I doubt whether active application in the traditional sense is appropriate (compare: CA 6066/97 The City of Tel Aviv-Yaffo v. Even Or, IsrSC 54(3) 749, 755 (2000)). Moreover, section 74 does not address the future at all. Consider, for comparison, the example by Professor Barak that I presented above, about the new law that would stipulate that anyone convicted of a crime would be excluded from serving as a Member of Knesset. Such a hypothetical statute is partly concerned with the past (people who have already been convicted), and partly concerned with the future (people who would be convicted in the future). However, section 74 is not future facing at all. It addresses asbestos waste that Eitanit buried in the distant and not so distant past. The section does not address, and neither does it purport to do so, the burial of asbestos waste going forward. This is the concern of other sections of the Act, but not section 74. It is possible, then, that we are faced with a new category – narrow active application. Going back to the “spectrum of legitimacy”, I believe section 74 and the category of narrow active application are closer to the legitimacy position of retrospective application than to that of active application. Either way, the probability that section 74 is not an obviously retroactive statute, weakens Eitanit’s claim regarding the extent of the infringement of its property rights.

Still, without deciding the theoretical question of the Act’s categorization, we must keep in mind that even were this a strictly retroactive statute – and that is certainly not the case here – it should not mean that statute must be automatically struck down. We would still need to examine the entirety of arguments, factors, and considerations regarding the statute, in light of the limitations clause, including the statutory purpose, its benefits and its infringements of protected rights (compare: HCJ 1149/95, Arko Electric Industries Ltd. v. The Mayor of the City of Rishon L’Tzion, IsrSC 54(5) 547, para 10 of Justice Strasberg-Cohen’s opinion (2000); HCJ 4562/92, Sandberg v. The Broadcast Authority, IsrSC 50(2) 793, para 33 (1996)). In other words, the analysis I have conducted so far regarding temporal application is yet another consideration in the cost-benefit analysis. Indeed, another consideration but not a decisive one.

In my view, balancing benefit against the infringement of rights, there are three considerations that support the former and tip the scale against the harm caused by the statute’s retroactive application. Again, I do not believe this is per se retroactive application, but for purposes of convenience and brevity I will so term it. Of course this is not merely a matter of convenience: section 74 and its unique formulation, reeks of retroactivity, even if it should not be categorized as such.

As for the first consideration, my position above regarding the element of foreseeability characterizes Eitanit’s conduct to a certain extent. This has implications not just for issue of strict liability, but also for that of retroactivity. United States courts, as explained, interpreted CERCLA as having retroactive application, even though this is not explicit in its language, and though American law has a rebuttable presumption against retroactive application. One reason for this interpretation was linked to the foreseeability element: “While the generator defendants profited from inexpensive wasted disposal method that may have been technically ‘legal’ prior to CERCLA’s enactment… it was certainly foreseeable at the time that improper disposal could cause enormous damage to the environment.” (U.S. v. Monsanto Co., 858 F. 2d 160, 174 (4th Cir. 1988))

Put differently, while it is true that waste removal activity was formalistically permitted at the time, it was still possible even then to expect that such activity would cause grave harm to the health of residents and to the environment. In other words, foreseeability or awareness of the harm is some justification for imposing “retroactive” liability. We see a similar line of thinking in Holland, as I explained above. The Dutch Supreme Court ruled that a law from 1982 applies retroactively from January 1, 1975 onward. This date was chosen because starting then every polluter should have been aware that it was likely to be liable for polluting. Therefore, foreseeability or expectation of harm – not in the criminal or civil sense, but for the purposes of constitutional review – may justify retroactive application.

This is coupled with a second consideration: the extreme harm to the public. This risk is not reduced over time, and it must be addressed. Doing so increases the social benefit that comes out of section 74, even if it holds quasi-retroactive elements. Ignoring the risk caused by asbestos amounts to exposing citizens to a ticking time bomb. No wonder the legislature seeks solutions. Removing asbestos waste is an urgent priority. Failing to do so is not an option – “You shall not overlook” (Leviticus 22, 3). Regardless, the responsibility for an asbestos hazard already created will be quasi-retroactive. Therefore the question is not whether to impose retroactive liability, but whom to impose it upon (including the option of distributing costs between different parties). Of the options to impose financial obligations on the polluting corporation and imposing it on the public, fairness requires that we opt for the former. Indeed, the Israeli legislature’s solution, regulated through section 74, is designed so that at most only half of the expenses are placed on Eitanit.

Regarding the third consideration, we turn again to comparative law. Many countries – though not all of them – have recognized retroactive application. This position, as explained above, is primarily justified by fairness and necessity.

I am not ignorant to the fact that in terms of section 74 there is some link, perhaps even intermingling, of the concerns about retroactivity with the concerns about strict liability. This is understandable. As far as the infringement of Eitanit’s property right, retroactivity and strict liability walk hand in hand. The two, together and separately, raise concerns about imposing financial burdens on Eitanit for actions that were not impermissible when taken, and were not even found to constitute a breach of any duty of care. Ultimately, we must look into the details of section 74. This examination reveals that, on one hand, there is no finding of fault, but on the other hand, there are policy reasons, as mentioned, that warrant the conclusion that the infringement is outweighed by the benefits.

39.For the purposes of the third sub-test, the narrow proportionality test, three of Eitanit’s arguments were emphasized for the difficulties they create: personal legislation, strict liability, and retroactive application. Having analyzed each of these arguments independently, it appears the extent of the harm is not as great as initially thought. The additional conclusion is that Eitanit failed to demonstrate that the infringement upon its property rights surpasses section 74’s extensive benefit to the public.

Remarks Before Summarizing

40.Before I finish applying the limitations clause to this case, I should emphasize two important points. These were weaved throughout the constitutional analysis, but it would be appropriate to bring them to the fore of the discussion in order to acknowledge their significance.

The first point is the comparative law one. We are concerned with a legal area completely new to Israeli law. The issues raised here, were raised in similar dress in many other countries. Asbestos, as a member in the group of dangerous and polluting materials, is a problem that crosses borders. When a court subjects a case like this to constitutional review, I believe there is significance to the fact that many countries have walked a similar path to that of section 74. Caution is warranted when looking abroad as the Israeli system is independent. 65 years from the country’s founding, Israeli law can be seen as a dynamic creation with a life of its own. Israeli law defines the question, and supplies the answer. However, beyond the fact that this is an issue common to Israel and to other countries, I have not seen the matter to be unique – certainly not clearly or obviously – to Israel and distinct from that in other countries around the world. This is not to say that the State has absolved itself by demonstrating that the statue legislated here is consistent with international consensus. But by the same token, it cannot be said that comparative law is an irrelevant consideration, particularly when it reveals that other countries’ constitutional jurisprudence regarding similar statutes enriches our constitutional discussion. The project of comparison supports the state’s argument that section 74 is constitutional. This is a factor that should be taken into account here (and see CA 1326/07 Hammer v. Amit, para. 34 of Deputy President Rivlin’s opinion (May 28, 2012), re wrongful birth). However, this is certainly no substitution for independent constitutional review under section 8 of Basic Law: Human Dignity and Liberty.

Substantively, the above review of the legal state in Western countries reveals one clear point: that a standard of strict liability is common and acceptable in the context of removing dangerous and polluting materials. Thus in the United States, where the courts found the legislative intent behind CERCLA was to establish a strict liability standard. The European Union’s Directive, the ELD, recommends imposing strict liability on harm caused by dangerous activities listed in the third annexure. This type of liability was de facto imposed in Sweden, France, Holland, Germany (to some extent), Finland and the United Kingdom. This is also the case in many other countries that are not members of the European Union, such as Switzerland, Canada and South Africa. Retroactivity is less common, compared to strict liability, but it exists, too. In the United States CERCLA’s retroactivity passed judicial review. So did the statutes of British Columbia. Some European states adopted retroactivity as well, including Spain, the United Kingdom, and Holland (to some extent).

We have seen the commonalities. We have noted that they are material. To the relevance of this, I move onto the second point. We are concerned with constitutional review, rather than administrative. The test is not reasonableness, but the limitations clause in section 8 of Basic Law: Human Dignity and Liberty. The range of possibilities is broader, though in order to remain within this range a statute must meet the specific conditions the legislature set in the limitations clause. A court is aware of its own limits, but also of its responsibility. As noted, there is no single legislative fix for a legal problem. But in our case, it was possible to reach a statutory framework that would have passed constitutional review. Section 8 is the key. In our case, my opinion is that the State is correct that the legislature overcame all the obstacles.

Summary

41.The petition before us focused on the constitutionality of section 74 of the Asbestos Act, and of the project it launched to remove asbestos waste from the Western Galilee.

First, we must locate the rights infringed. My conclusion is that section 74, with which we are concerned, infringes Eitanit’s property rights. Indeed, the State conceded this right is infringed. Still, I do not believe that section 74 discriminates against Eitanit compared with other entities: the legislature did not obligate Eitanit to pay for final asbestos-cement products that were discarded by the end users, nor for asbestos waste that originated from other factories’ manufacturing processes. The “waste population” that is, the waste to which section 74 applies, includes only the industrial waste that came from the production processes in Eitanit’s factory.

In this context, I explained why Eitanit’s participation in removing the waste that was used for covering surfaces is justified over that of the end users. I believe there is a significant and relevant difference between Eitanit and the end users, which is based on three tests: the awareness test – Eitanit had an obvious advantage in knowledge compared to the end users. For decades Eitanit was Israel’s primary importer, manufacturer and marketer of asbestos. By virtue of this position Eitanit was familiar with the scientific research on asbestos risks and was also subject to the different statutory obligations that reflected these health risks. Under the control test, Eitanit is the manufacturer while the end users were the consumers or customers. As a manufacturer, Eitanit controlled the production of waste and its distribution, and in any event there is much logic in placing the financial burden on it. Under the profit test, there is clear justification for requiring the corporation that produces asbestos, and which more than any other entity had profited from the activity that caused the polluting hazard, to shoulder the costs of removal. All these reasons hold even more force in terms of the distinction between Eitanit and the local authorities, which do not even constitute “end users.”

Once I have concluded that Eitanit’s right to property was infringed, the issue became whether the infringement could pass muster under the limitations clause of section 8 of Basic Law: Human Dignity and Liberty. The comparative law in the background of this analysis was reviewed at length, among others because this is a novel legal issue that carries clear universal aspects and because no unique characteristics were presented for the Israeli context. Another point that should be emphasized is that we are charged with constitutional review, not administrative review. This influences the breadth of the Knesset’s discretion.

I first clarified that the infringement was made through primary legislation, that is, a statute that the Knesset passed appropriately and legally. Eitanit’s argument that this is not a “statute” for the purposes of the limitations clause because it is a personal statute is incorrect. It is a formal test that inquires mainly whether the infringement upon basic rights was made in primary legislation or according to such legislation. In this case, the answer is in the affirmative.

In the next step we explore the purpose of section 74. The sections’ primary purpose is to launch a project for the removal of asbestos from the Western Galilee. This is encompassed in the statute’s broader purpose: minimizing asbestos hazards in Israel. There is no doubt that this is an important and worthy purpose, befitting the values of the State of Israel. Indeed, it appears even Eitanit does not dispute this. I tend to think that this is the sole purpose of the statute. However, the State articulates another purpose: realizing the principle of “the polluter must pay.” I, myself, believe that this principle justifies the funding mechanism selected in the Act, rather than its purpose. Yet for the sake of a comprehensive analysis I assumed that “the polluter must pay” was a secondary purpose of the Act. Here, too, I find this to be an appropriate and befitting purpose: “the polluter must pay” principle relies on important and worthy rationales – efficiency considerations, cost internalization, justice and fairness – and it is even reflected in Jewish law and an array of recent pieces of legislation in Israel.

Is the means selected in section 74 proportional? I first examined the issue of the rational connection, in terms of each of the two purposes. As for the primary purpose, the link between the means and the end are obvious: the project directly leads to achieving the end of cleaning asbestos waste from the Western Galilee. As for the secondary purpose – “the polluter must pay” – here, again, I find a fit between the means and the end: placing financial obligations on Eitanit, which profited from burying the waste or passing it on to the end users, achieves the end of “the polluter must pay.” Even the legislature’s choice to impose a kind of retroactive and strict liability advances the principle of “the polluter must pay,” primarily from the perspective of justice and fairness.

The next step is the least restrictive means test. Here, the main alternative that Eitanit proposed is the self-performance, that is, that Eitanit or a contractor it would hire would remove the waste independently. However this option was already discussed by Eitanit and the State for a long period of time and was ultimately rejected. Under such circumstances I was not persuaded that the self-performance alternative would achieve the purpose behind section 74 – cleaning the Western Galilee from asbestos waste. Additionally, from a positive perspective, the mechanism the legislature opted for incorporates checks and balances that limit the harm to Eitanit. Eitanit would not be required to fund more than half of the removal project’s estimated costs, and in any event no more than NIS 150m. The funding mechanism insures that this is not a fine or compensation, but rather a fund dedicated to removing the waste. The removal project is limited to a radius of 15KM around the factory, and in any case there is a mechanism for checking and monitoring the length of the project, which allows Eitanit to challenge any requirement to pay for specific waste piles.

The final step is the narrow proportionality test. In this context I emphasized three points at the heart of Eitanit’s claims. On the generality issue, it is undisputed that section 74 specifically targets Eitanit, and Eitanit alone (aside from the State and the local authorities.) Only that the focus on Eitanit is not a whim that took over the legislature, but an outcome of the reality that was created by Eitanit itself. The section was designed to address a unique situation: a large amount of waste, in a defined geographical area, created systematically by one dominant entity – Eitanit.

On the issue of strict liability, it is true that on its face this is a harsh standard that raises questions and concerns. However, three considerations alleviate these difficulties. First, there are weighty justifications for strict liability, primarily justice and fairness, deterrence and cost internalization, as well as the evidentiary challenges of a fault-based standard. Second, there is support for strict liability in many European countries, in the United States, and in other countries. Third, a certain extent of factual expectation or awareness by Eitanit regarding the risks of asbestos (of course, not in the tort or criminal sense.)

Finally, in the issue of the Act’s temporal application, my conclusion is that the Act carries a narrow active application. Though it does apply to an existing state of affairs, there is no active application in the regular sense. All the factual elements have materialized completely in the past and section 74 does not at all address the future. Regardless, even if this was a completely retroactive statute – this is not a determinative factor, but merely another consideration in the constitutional fabric. At this point I discussed three mitigating elements: first, the expectation or knowledge element regarding the risk. Second, the scope of the risk; the finding that failure to treat the asbestos waste leaves many citizens exposed to a ticking time bomb in terms of their health. We cannot leave things as they are. In weighing imposing costs on Eitanit against imposing costs on the public, Eitanit’s connection to the waste as its producer puts the thumb on the scale, or at least allows for it. And third, the support for imposing retroactive liability in the United States and in other countries (such as Spain and Britain.)

We cannot ignore the infringement on Eitanit’s rights, or that the legislature created a new regime. However, it is my view that the infringement upon Eitanit’s constitutional rights – as an outcome of section 74 – passes the tests of the limitations clause.

Final Thoughts

42.Such is the way of the law. It is challenged by an ever-changing reality that requires the legislature to find solutions for problems that in one way or another threaten society. To achieve this purpose, occasionally there is need to design statutes that rely on new perspectives on legal principles. This was also the case in the past, and we shall present several examples of this.

The common law found it difficult to find legal justification to impose upon a stranger the duty to assist another person in distress. Still, for certain circumstances where official rescue services are far removed, the law has created obligations to rescue, for example the duty to save lives at sea, imposed on ships passing by (Scaramanga v. Stamp, 5 C.P.D. 295, 304-305 (1880); The Beaver, 3 Chr. Rob. 292 (1801); Sophie Cacciaguidi-Fahy, The Law of the Sea and Human Rights, 1 Panoptica Vitoria 1, 4-5 (2007)). Another example is the possibility of filing class action suits. Given the concern that absent a primary injured party who suffered damages in substantial amounts injuring parties would continue their harmful behavior, the law has developed this new procedural tool and recognized the possibility to file suit on behalf of a large group of injured parties. The novelty is both in the legal possibility to create a group of plaintiffs, who in large part did not express any position on the matter, and in the economical consequences even for a strong defendant (see the Class Action Act, 2006). Another example is the development of corporate law, on different levels. First, the recognition of a corporation’s independent status as a separate legal entity and the elimination of stock holders’ personal liability was a legal novelty and was a significant incentive to use the legal tool of incorporation. Later in legal history the pendulum swung back, to some extent. The legislature began imposing various obligations on the organs and office holders of corporations, such as duties of care and trust, based on understanding the web of interests that dictate their actions (Irit Haviv-Segal, Corporate Law, chapter 10 (2007); P. M. Vasudev, Corporate Law and Its Efficiency: A Review of History, 50 American Journal of Legal History, 237 (2010)).

As we can see, the law has gone through an evolution. To fit the it to reality, laws were passed that on their face strayed from the legal norms that were familiar and entrenched up to that point. It seems that our case, too, as part of Israel’s new environmental legislation, joins this list. The great potential for harm that asbestos waste causes and the complexity of the issue demand a solution that does not move on the currently acceptable axis of tort liability. As a rule, finding solutions to intricate problems is not necessarily a legal compromise in the sense of giving in. This is how the law advances. Hand in hand, in the constitutional era of recognizing rights, it is the role of the Court to make sure that the legislature’s selected solution meets the constitutional standards of the limitations clause. The mere existence of a problem does not open the gate for any solution. Judicial work is subtle, but necessary. In a constitutional regime, one would hope that the legislature would exercise better care. It would be aware that Basic Laws look over its shoulder “watches through the windows, peeking through the cracks (Song of Songs 2, 9.) It would strive to withstand constitutional review. This hope does not always materialize. In our case, section 74 includes elements that reflect the legislature’s attempt to meet constitutional standards. This attempt has been successful.

43.Ultimately, I would propose to my colleagues to reject the petition, and under the circumstances and the merits to require Eitanit to pay costs and attorneys’ fees as follows: for respondents 1, 3 and 4 together a sum of NIC 100,000; to respondent 5 and respondents 6-7, a sum of NIS 70,000 for the entire group; and for respondent 2 a sum of NIS 25,000.

 

___________________

Justice

 

 

 

President A. Grunis

I concur.

 

 

___________________

President

 

 

 

 

 

Justice T. Zylbertal

I concur.

 

 

___________________

Justice

 

 

Decided according to the judgment of Justice N. Hendel.

 

Handed down today, April 2, 2013.

 

 

 

 

 

 

ACUM v. EMI

Case/docket number: 
CA 5365/11
Date Decided: 
Tuesday, September 3, 2013
Decision Type: 
Appellate
Abstract: 

[This abstract is not part of the Court's opinion and is provided for the reader's convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.] 

 

In 2004 the Director-General of the Antitrust Authority determined that the activity of ACUM (a corporation that operates to manage its members’ copyrights in musical works in Israel) constitutes a monopoly on managing copyright over musical works. In 2011 the Antitrust Tribunal (“the Tribunal”) approved the activity of ACUM as a cartel, subject to a series of requirements (“the permanent requirements”), which would be in force for five years starting from the date of their approval. The disputes at the center of the appeals related to the requirement that at least a third of ACUM’s board of directors consist of external directors (the ACUM appeal) and the requirement regarding the exclusion of rights in a work from management by ACUM. It was argued that the mechanism was overly narrow, as consent of all joint owners of a work is necessary for exclusion, or for segmentation under the four specific categories that permit partial exclusion of the rights (the EMI Israel appeal).

 

The Supreme Court (opinion written by Justice D. Barak-Erez, Justice Z. Zylbertal and Justice E. Rubinstein concurring) dismissed both appeals on the following grounds –

 

The requirements for ACUM’s operation should balance the authors’ property rights in their works with the public interest in a market free of monopolistic effects, a unique interest when in the context of a market of works, which inherently must be accessible to the public (albeit for payment). The analysis focused on two issues: the requirement to appoint public directors and the scope of the rights exclusion mechanism. Both should be examined from the unique perspective that combines the purpose of copyright law with that of antitrust law, considering the balance that both fields of law must achieve between individual property rights and economic interests, on the one hand, and the general public interest, on the other hand.

 

Regarding the requirement that at least a third of appointed members to the board of directors be external public directors (the practical meaning of which was the appointment of a total of four such directors), ACUM failed in its challenges to both the requirement itself and the number of external directors it was obligated to appoint.

 

The appointment of public directors is one of the mechanisms that facilitates supervising a company’s conduct and that of its directors and controlling shareholders. It helps deal with the various representative problems associated with its activity. Their appointment also adds a professional dimension to the company that would increase its adequate management; the appointment of public directors to ACUM’s board is consistent with the purpose of the cartel’s approval. Although ACUM is not a public company, it effectively manages a resource that has clear public aspects, and in fact those aspects of ACUM’s activity are the basis for the cartel's approval. At the same time ACUM’s monopolistic characteristics and its status as a cartel in the copyright of musical works per se grant it a public dimension. The requirement to appoint public directors to provide another layer of supervision over ACUM’s activity is therefore warranted by and inherent to the rationale of the cartel’s approval from the point of view of protecting both authors and users. The Court added that making the cartel’s approval subject to the appointment of public directors, even when a public corporation in the ordinary sense is not involved, has already been done in the past, for example with respect to the recycling corporation. Moreover, the public directors might represent cross-group interests that carry broader considerations as to the general interest of artists as a whole, rather than representing the interest of certain artists groups, which may conflict. Moreover, without laying down rigid rules, there is prima facie basis for the argument that the importance of a public director is in fact greater in a corporation like ACUM, which is not led by a clear control group and has diverse ownership.

 

In fact, ACUM itself also acknowledged the advantages of appointing public directors, and the updated language in its articles of incorporation now requires the appointment of two public directors. The basic aspect of the dispute, which had to a certain extent become one of extent and degree, had thereby been somewhat resolved. In this respect, the Court believed that the proportion of directors that was fixed – one third of the total members of the board – was not excessive or unreasonable, considering the character of ACUM as a corporation with diverse ownership and especially in light of the concern for abuse that always exists regarding a cartel.

 

Under the circumstances, there is no need to rule on whether ACUM should be regarded as a hybrid entity, and in any event a complete discussion of the criteria for recognizing an entity as such is unnecessary.  However, it is not superfluous to note that ACUM’s activity does fit many of the factors mentioned in case law as indicative of a hybrid entity. Those factors, even if insufficient to categorize ACUM as a hybrid entity in the ordinary sense of the term, do shed further light on the basic justification of the Director-General’s requirement. Although the appointment of public directors is not ordinarily considered one of a hybrid entity’s duties, the fact that ACUM is an entity that owes important duties to the public can serve as a factor in how the Director-General of the Antitrust Authority exercises power when subjecting a cartel to requirements.

 

Two questions were at the root of the dispute regarding the requirements about the rights exclusion mechanism. First, whether the requirement for consent by all joint owners of a work in order to exclude it from ACUM’s catalog is justified or whether that power should be held individually by each of the artists; and secondly, how delicate and precise should the “segmentation” mechanism be in the scope of the exclusion ability, in light of distinctions between a work’s different types of use.

 

As a point of departure it can be assumed that works of the type that ACUM manages are often ones to which several artists share the rights. Conditioning exclusion upon the consent of all rights owners will undoubtedly burden the individual artist who seeks to exclude her own work. However, this is not an undue burden considering the purpose of the permanent permit.

 

The most important tool available to ACUM in the collective management of the rights is the grant of a sweeping license, known as a “blanket license,” which permits the licensee to use ACUM’s entire catalog. From the perspective of transaction costs, the advantages of a blanket license are the primary reason for ACUM’s activity, despite the conflicts with antitrust law. Given the typical ownership structure of a musical work, an exclusion ability that is not conditional upon the consent of other owners effectively means that a single author, regardless of their role in creating the work, may exclude the entire work from ACUM’s blanket license system.  Thus, a user who wishes to make lawful use of the work would have to negotiate with the excluding author in addition to acquiring the blanket license from ACUM.  Such a state of affairs would greatly limit the benefit the cartel provides the user public to the point that it is doubtful whether the cartel is indeed “in the public interest” in terms of section 9 of the Antitrust Law. Furthermore, accepting that consent by all joint owners of the work is not necessary in order to exclude it might also allow for some of the artists’ opportunistic exploitation of the exclusion, creating “extortion” or “free-riding” problems.

 

Ultimately, even in the narrow exclusion regime joint artists can contractually regulate the scope of the work’s exclusion from collective management in advance. Indeed, the narrow exclusion regime merely provides the default for the inclusion of a joint work in ACUM’s catalog. Insofar as the authors wish to regulate decision-making differently in managing joint works, they are at liberty to do so. Presumably such an arrangement, which would be made in a timely manner and before any of the parties is in a position to potentially exploit or become a free rider, would help to limit the coordination challenges in obtaining consent for excluding joint work, as detailed by EMI Israel and Anana. Therefore, the default prescribed – that in the absence of agreement to the contrary between owners of rights in a joint work, all of their consent is necessary in order to exclude it from management by ACUM – is a proper one.

 

Finally, the Court considered the rights exclusion mechanism that enables artists to exclude their rights in some – rather than all – uses but only in one of four specific alternatives – “exclusion packages” that make limited “segmentation” possible according to types of use. The dispute between the parties revolved around the precision of the necessary segmentation. While the current segmentation mechanism essentially distinguishes between audio and audio-visual uses, EMI Israel (supported by Anana) also wished to distinguish between use in “old media” – like television and radio – and use in “new media” – like Internet and cellular phone services.

 

Here, the Court held that the exclusion mechanism approved by the Tribunal should be upheld, subject to the question of excluding “new media” – on conditions and restraints – being comprehensively reviewed during the cartel approval’s renewal proceeding.

 

The distinction between “new” media and “old” media raises fundamental and practical difficulties. The issue is a developing one and more experience and study are necessary to achieve a proper balance. The world of communications is characterized by constant, rapid technological development. In light of this reality the distinction between “old media” and “new media” is not a binary dichotomy, nor is it permanent or stable.

 

Reviewing the implications of excluding “new media” shows that there is not necessarily any justification for completely prohibiting excluding works from “new media” uses. Nevertheless, there are clear indicators that the same applies only to a limited exclusion mechanism, which focuses on certain types of “new media” uses and strives to minimize harm to users. Such exclusion mechanisms cannot be based merely on the technological distinction between “old media” and “new media” and allow a sweeping exclusion of all uses of the latter, as EMI Israel and Anana propose. In any event, examining the possibility of another “new media” exclusion category and fashioning the boundaries of that category should be done with care after studying interested parties’ positions about the issue and all the relevant facts. As mentioned, this is a matter that the Antitrust Tribunal ought to consider when the extension of the cartel’s approval comes before it. This position is also supported by a factor that concerns the temporary nature of the approval – for only five years. At the end of that period (two years of which have already elapsed), the Tribunal will reconsider approving the cartel, at which time it can also reconsider the extent of the exclusion mechanism’s “segmentation,” in light of the five years’ experience gained with a “narrow” exclusion mechanism. International experience could also enrich the set of information available to the Tribunal.

 

In conclusion, the Court dismissed the appeals, deciding not to intervene in the requirements attached to the cartel’s approval. Currently, the requirements for the permanent permit, including those challenged in the appeals, are all necessary to dispel the concerns naturally raised by a cartel concerning the collective management of copyright. These conditions are necessary to ensure that the cartel’s benefit to the public does indeed exceed the harm perceived from it. At the same time, the possibility remains that the proper balance between the rights of authors and the general public interest might in the future dictate a result different from that reached by the Tribunal in terms of integrating the distinction between different types of “new media” and “old media” in the rights exclusion mechanism.

Voting Justices: 
Primary Author
majority opinion
majority opinion
Author
concurrence
Full text of the opinion: 

In the Supreme Court

Sitting As a Court of Civil Appeals

CA 5365/11

CA 5489/11

 

Before:

His Honor, Justice E. Rubinstein

His Honor, Justice Z. Zylbertal

Her Honor, Justice D. Barak-Erez

 

 

 

 

The Appellant in CA 5365/11 and the Ninth Respondent in CA 5489/11:

 

ACUM – The Association of Composers

 

 

v.

 

 

The Appellant in CA 5489/11 and the Ninth Respondent in CA 5365/11:

 

EMI Music Publishing Ltd

 

 

v.

 

 

The Respondents:

1. The Director-General of the Antitrust Authority

 

2. The Association of Restaurants in Israel

 

3. Partner Communications Company

 

4. The Association of Function Hall & Garden Owners

 

5. Golden Channels

 

6. Matav Cable Communication Systems

 

7. Tevel Israel International Communications

 

8. Anana Ltd

 

9. EMI Music Publishing Ltd

       

 

Appeals against the judgment of the Antitrust Tribunal in Jerusalem on June 2, 2011 in AC 513/04 by Her Honor Judge N. Ben-Or

 

Date of Session:

Nisan 3, 5773 (March 14, 2013)

 

 

On behalf of the Appellant in CA 5365/11 and the Ninth Respondent in CA 5489/11:

Adv. Uri Sorek, Adv. Assaf Neuman

 

 

On behalf of the Appellant in CA 5489/11 and the Ninth Respondent in CA 5365/11:

Adv. Michelle Keynes

 

 

 

 

 

On behalf of the First Respondent:

Adv. Uri Schwartz, Adv. Yael Sheinin, Adv. Elad Mekdasi

 

 

On behalf of the Third Respondent:

Adv. Eyal Sagi, Adv. Amir Vang

 

 

On behalf of the Fourth to Seventh Respondents:

Exempt from appearance and representation

 

 

On behalf of the Eighth Respondent:

Adv. Ronit Amir-Yaniv, Adv. Ido Hitman

 

 

 

JUDGMENT

 

Justice D. Barak-Erez

 

1.         Which principles should guide the activity of ACUM with regard to the management of copyright in musical works in Israel? This question has been presented to us in full force against the background of the finding by the Director-General of the Antitrust Authority that ACUM’s activity creates a cartel, in order to review the conditions prescribed for the approval of the cartel in a way that will balance the rights of authors with the general interest of works being used in public.

 

Background and Previous Proceedings

 

2.         “The Association of Composers, Authors and Publishers,” known as ACUM, is a corporation that operates in order to manage the copyright of its members – lyricists, composers, arrangers, translators, and others – in Israel. ACUM members transfer their rights in their works to it, whilst ACUM acts on their behalf in order to license the use of those works in consideration for royalties that it collects for its members. Ordinarily, the licenses that ACUM grants are sweeping licenses ("blanket licenses") that permit licensees to make use of the whole repertoire of works managed by ACUM (mainly by making them accessible to the public in various ways). In addition, ACUM is bound by agreements with foreign copyright collective management entities (hereinafter "affiliates"), by virtue of which it administers in Israel the rights that are managed by the affiliates abroad.

 

3.         On April 30, 2004 the Director-General of the Antitrust Authority (hereinafter "the Director-General") published a ruling pursuant to section 34(a)(1) of the Antitrust Law, 5748-1988 (hereinafter "the Antitrust Law" or "the Law") according to which ACUM’s activity involves the creation of cartels (both between ACUM members and between ACUM and the affiliates) and a declaration under section 26(a) of the Law that ACUM’s activity as a cartel creates a monopoly in the market of managing copyright in musical works (or more precisely, with regard to management of  broadcasting, public performance, copying, recording, and synchronization rights in those works). The decision was made by the then Director-General, Mr. Dror Strom. However, it also reflects the position of the officers who have succeeded him, Ms. Ronit Kan and currently, Prof. David Gilo, as detailed below. Reference to the position of the Antitrust Authority will henceforth be made without specifically referring to those successors, using the general title – the Director-General.

 

4.         At that stage, ACUM instigated legal proceedings before the Antitrust Tribunal (hereinafter "the Tribunal") – an appeal against the determination of the Director-General that its activity involves cartels (AT 512/04) or, alternatively, an application for the approval of a cartel in accordance with sections 7 and 9 of the Antitrust Law, on the grounds that the cartel's approval is necessary in the public interest (AT 513/04). Both proceedings were heard together. Subsequently, to ACUM’s request, the appeal it filed was withdrawn, leaving only its application for approval of the cartel. The Director-General did not oppose the cartel's approval considering the public importance involved in ACUM's activity, as explained below, but the Tribunal was moved to set conditions to the approval so as to protect not only the public interest but also the individual rights of authors.

 

5.         To make its continued activity possible until completion of the litigation, ACUM filed a request for a provisional permit for operation of the cartel. The Tribunal granted the request and on December 28, 2004 it granted a provisional permit for ACUM’s activity subject to certain conditions (hereinafter "the Provisional Permit"). As detailed below, those conditions regulated, inter alia, situations in which authors could exclude rights in certain works from ACUM’s management so that those authors, rather than ACUM, would themselves deal with granting licenses to exercise those rights (hereinafter "the Exclusion Mechanism"). Over the years the Provisional Permit was extended from time to time based on of the Director-General’s recommendation, various amendments and modifications introduced to its terms. The last of those provisional permits (before the Tribunal's judgment), granted on February 24, 2009, introduced several significant changes, including making the Exclusion Mechanism "tougher," as detailed below.

 

6.         In addition to the position of the Director-General, oppositions to the cartel's approval were filed to the Tribunal by several other entities, including the Association of Function Hall & Garden Owners, Partner Communications Company (hereinafter "Partner"), the Association of Restaurants in Israel, and several cable companies – Golden Channels, Matav and Tevel (hereinafter "the cable companies") (whose activity has since been consolidated).

 

7.         At a later stage, an application to join the proceedings was made by two publishers that represent authors, the publishers themselves being members of ACUM – Anana Ltd (hereinafter "Anana") and EMI Music Publishing (Israel) Ltd (hereinafter "EMI Israel"). Those applications, like the time when they were made, were explained by the changes that had been made to the Provisional Permit’s conditions on February 24, 2009 as regards the Exclusion Mechanism. On December 1, 2009, the Tribunal partially allowed the applicants to join the proceedings in the sense that it permitted each of the two applicants to file a brief document with reference to the conditions that were acceptable to them and to make summations without extending the existing factual basis of the discussion.

 

8.         In its decision of January 25, 2009, the Tribunal stated that by consent of the parties it would rule based on the parties’ summations and supplemental oral arguments, without hearing evidence. The decision further stated that all of the parties agreed to ACUM's approval as a cartel, and took issue merely with regard to the terms of that approval. Consequently, the conditions of the Provisional Permit of February 24, 2009 (hereinafter "the Provisional Conditions") would serve as point of reference for the parties' positions. Accordingly, each of the parties filed its reservations regarding the Provisional Conditions in such manner that enabled the Tribunal to decide which of the conditions would be adopted as is within the permanent conditions, and which would be modified.

 

9.         On June 2, 2011 the Tribunal approved ACUM’s activity as a cartel, subject to a series of conditions (hereinafter "the Permanent Conditions"), which would remain in force for five years from the date of their approval. The Tribunal stated that the basic premise for reviewing the parties' arguments with regard to the conditions was that the anticipated benefit from the cartel substantially exceeded the damage likely to be caused by it, as required by section 10 of the Antitrust Law. In this context, it was explained that ACUM’s activity benefited not only its members – copyright owners (hereinafter "the authors") but also the general public who uses the works it manages (hereinafter "the users"): on the one hand, the sweeping licenses permit the users to make use of the whole repertoire of works that ACUM holds, thereby sparing the public from having to locate the owners of various rights and to negotiate individually with each of them; on the other hand, the sweeping licenses also benefit the authors since they streamline (and, to a great extent, enable) collection of royalties and enforcement of their rights.

 

10.       Since all parties agreed on principle to the approval of the cartel, the Tribunal hearing focused on the nature of the conditions to which the approval should be subject in order to dispel concern as to its abuse with regard to authors or users. The point of departure for the hearing was, as aforesaid, the Provisional Conditions, some of which were agreed upon by all parties, whilst others were in dispute. The disputes on which the appeal before us focuses pertain to the conditions prescribing the extent of the duty owed by ACUM to appoint external directors and the extent of ACUM members’ ability to exclude their rights from its management, as detailed below.

 

11.       Other controversies, including those concerning the definition of acts that would be construed as an abuse of ACUM's position and the way in which ACUM should act in taking legal action against users, were ultimately not considered by us since only few of the arguments concerning them were raised within the written appeal, while the arguments before us did not in fact concentrate on them.

 

12.       The appointment of external directors – the position of the Director-General was that a condition should be added to the Permanent Conditions to the effect that ACUM should appoint external directors in a proportion of no less than one third of the total members of its board and those directors would be responsible for the internal plan to enforce antitrust law that ACUM is obliged to implement (in accordance with section 10 of the Provisional Conditions). ACUM objected to this requirement, on the grounds, inter alia, that it is not a public company where the appointment of external directors is necessary in order to protect minority rights, and in any event ACUM's articles of association ensure due representation for each category of its members, and even guarantee numerical balance between the categories.

 

13.       The Tribunal accepted the Director-General's position on this matter, noting that a corporation for the collective management of copyright naturally raises concern as to the abuse of power against the authors themselves. Appointing a substantial number of external directors and entrusting them with the internal enforcement plan, it was held, would help deal with that concern, especially considering the fact that the corporation's members are dispersed and lack management expertise. The Tribunal also attributed importance to the fact that from ACUM's position in the proceedings it appeared that ACUM itself acknowledged the need to appoint external directors and was willing to do so even before the Tribunal’s judgment in order to reinforce the "managerial, professional, economic character of ACUM's board of directors".

 

14.       The extent of ACUM members’ ability to exclude rights from ACUM’s management – the Provisional Permit that ACUM had originally obtained (in 2004) included, in section 2.3 of the Provisional Conditions, a mechanism permitting a member to give notice "at any time, of his desire to assume all or any of the copyright with regard to any of his works, with regard to all users or specific categories of users," such that the works included in the notice would cease to be part of ACUM's repertoire, and copyright ownership would revert to the notifying member (hereinafter "the broad exclusion mechanism"). Underlying this mechanism was the concept that a “liberal” option to exclude any right in a work, even specifically, would intensify competition and increase the authors' power against ACUM. Later on, based on the experience accrued from the implementation of this arrangement, the Antitrust Authority reached the conclusion that the broad exclusion mechanism was not yielding the anticipated results with regard to enhancing market competition, and in contrast was aggravating the concern for abuse of the exclusion ability. For example, it turned out, according to the Director-General, that the broad exclusion mechanism that enabled interested authors, inter alia, to exclude from ACUM's management merely the use of "new media" (such as mobile phones and the Internet) and to leave it with the power to grant sweeping licenses for broadcasting rights only in "traditional media" (like television and radio), might undermine the justification for ACUM's existence as a corporation whose purpose is to reduce the substantial transaction costs involved in individually contracting with each of the authors. Accordingly, in 2009 the exclusion mechanism in section 2.3 of the Provisional Conditions was limited in two ways: first, the Provisional Conditions provided that an exclusion notice could only be given with the consent of all joint authors in a collective work whose exclusion was sought (for example, the lyricist, the composer of the music, and the arranger); second, it was provided that partial exclusion, namely exclusion of some of the uses of the work, could only be done in accordance with four "exclusion baskets" concerning different categories of use (hereinafter "the narrow exclusion mechanism"): presentation of the work in an audio format (for example radio broadcasting); its presentation in an audio-visual format (for example in a television program); copying the work; and recording it. The narrow exclusion mechanism therefore did not permit the author to exclude the work in various formats at his discretion, as specifically chosen by him (for example, excluding the work's use only with regard to mobile phones).

 

15.       The Director-General's position, joined by ACUM, Partner, and the cable companies on this issue, was that the narrow exclusion mechanism should be included in the Permanent Conditions. In contrast, EMI Israel and Anana believed that the broad exclusion mechanism should be adopted with regard to both aspects that distinguish it from the narrow exclusion mechanism and they challenged both the requirement for unanimous consent of all authors of a joint work and the restriction of exclusion according to "exclusion baskets."

 

16.       EMI Israel pleaded that the narrow exclusion mechanism improperly infringed on the constitutional property rights of the authors it represented, both because the predefined "exclusion baskets" limit the prerogative of the right’s owner to permit or prohibit certain uses of his work, and because the vast majority of musical works managed by ACUM are jointly owned by several authors. Under these circumstances, it was argued, making the exclusion conditional upon the consent of the other owners in fact negates the ability of a given author to permit or prohibit the use of his work. EMI Israel further asserted that adopting the narrow exclusion mechanism would compromise the competition among ACUM's members in the sense that only large corporations would be able to afford managing rights outside of ACUM, while individual authors would not be able to bear the financial and logistical burden it involves.

 

17.       Anana pleaded that adopting the narrow exclusion mechanism would lead to infringement on its reliance interest, given the fact that, relying upon the wording of the broad exclusion mechanism, it had already excluded works it managed from ACUM's repertoire with regard to the use of "new media" that it would now have to restore. In addition, it made a series of arguments concerning the restrictions set forth in the narrow exclusion mechanism – a lack of distinction between authors whose contribution to a joint work was significant and authors whose contribution was negligible (who nevertheless obtain a de facto veto right to exclude the work); impairing the ability of authors to maximize their profits; as well as infringing on the moral aspect of the author’s right (in the sense that an author who wishes to preclude the use of his work for religious, image-related, or moral reasons would find it difficult to do so under the narrow exclusion regime). Anana further contended that making the exclusion conditional upon the consent of all joint authors effectively makes it a dead letter since joint authors would frustrate any attempt to reach the necessary agreements.

 

18.       The Tribunal held that the approval should be made conditional upon a narrow exclusion mechanism and in that respect it adopted the position of ACUM and the Director-General (joined by Partner and the cable companies). The Tribunal explained that such exclusion mechanism provided an appropriate answer to the necessary balance between enhancing market competition and protecting the individual author's proprietary right. The Tribunal went on to state that a corporation for the collective management of copyright is in any event not intended to enable its members to realize their rights in full. On the contrary, such arrangement is based upon a waiver of complete and total freedom with regard to the works in consideration for reducing the cost of managing and enforcing copyrights. EMI Israel and Anana, the Tribunal held, were in fact seeking to enjoy the benefits of belonging to a cartel without bearing the costs. The Tribunal further explained that copyright grants an author a monopoly that may harm the general public, a concern which is intensified when authors are incorporated in a cartel. Therefore, there is no reason to avoid subjecting the cartel's approval to conditions that restrict the individual author's proprietary right in his work.

 

19.       As aforesaid, the Tribunal ultimately approved ACUM's activity as a cartel, subject to a series of conditions, including those mentioned above. The two appeals before us – the appeal by ACUM and the appeal by EMI Israel – were filed against its said judgment – as detailed below.

 

The Appeals

                       

20.       ACUM's appeal (CA 5365/11) concerns, as aforesaid, only one aspect of the Tribunal's judgment – the condition regarding the duty to appoint external directors. Its arguments in this respect are directed both against the basic obligation to appoint external directors and against their number.

 

21.       EMI Israel’s appeal (CA 5489/11) originally revolved around several of the other conditions to which the Tribunal made the permanent permit subject, but at the hearing before us EMI Israel concentrated its arguments on the details of the condition regulating the rights exclusion mechanism. It should be noted that Anana, which did not appeal the Tribunal’s judgment, appeared at the hearing as a respondent and in that capacity it presented arguments in support of EMI Israel's basic position.

 

22.       Generally, EMI Israel believes that the narrow exclusion mechanism impairs the protection of the authors' rights and reinforces ACUM's monopoly. More specifically, EMI Israel pleads that implementing the narrow exclusion mechanism would lead to infringement on authors' proprietary rights and would impair the possibility of creating a competitive copyright market. According to EMI Israel, the protection of copyright necessitates both recognition of the power of each author to implement the exclusion mechanism with regard to a work he helped create, even without obtaining the other authors’ consent, as well as authors’ right to exclude their works outside of the "exclusion baskets" that necessitate "crude" and imprecise choices that do not express important distinctions, primarily the distinction between "old" media (like radio and television) and "new" media (such as mobile phones).

 

23.       On the other hand, the Director-General believes that both appeals should be dismissed. He supports the Tribunal’s judgment and emphasizes that the conditions it approved are required in order to protect authors and users against the monopolistic power of ACUM and in order to protect the public interest involved in the use of the works.

 

Our Ruling

 

24.       Having reviewed the parties' arguments we have reached the conclusion that both appeals should be dismissed. We are convinced that, at the moment, the Permanent Conditions, including the conditions against which the appeals have been addressed, are all necessary in order to dispel the concerns raised inherently by a cartel related to the collective management of copyright. These conditions are necessary in order to ensure that the cartel’s benefit to the public will exceed the perceived damage from it. Indeed, as detailed below, reviewing the parties' arguments has made it clear that the distinction between "new" and "old" media within the exclusion mechanism is an evolving issue, the regulation of which should be monitored. However, as noted, the approval and its conditions have been set for a period of five years, of which two have already passed (as the conditions relating to the narrow exclusion mechanism were approved by the Tribunal in June 2011). At the end of that period, it will be possible to revisit the conditions and the way they are being implemented in order to make decisions towards the future. In that sense, our ruling reflects the facts presented in the proceedings, including the experience accumulated in the Israeli market and its existing uses of copyright.

 

The Normative Framework: Between Copyright Law and Antitrust Law

 

25.       Two normative frameworks frame our discussion: copyright law – as a framework that seeks, inter alia, to balance the author's rights in his work and the public interest to enjoy the fruit of the work for the benefit of all, in order to promote culture and knowledge; and antitrust law – which recognizes, inter alia, the possibility of approving a cartel, subject to conditions aimed at protecting the public from the abuse of monopolistic power. Copyright law is currently governed by a relatively new statute – the Copyright Law, 5768-2007 (hereinafter "the Copyright Law"), which replaced the relevant British Mandate statute, while the issues concerning the activity of cartels are regulated by the Antitrust Law.

 

26.       The activity of ACUM should be evaluated and examined according to these two perspectives. As mentioned in the introduction to our judgment, ACUM was established for the collective management of copyright in musical works. From the perspective of copyright, that management should be for the benefit of authors and in the name of protecting their rights, but without neglecting the public's ability to enjoy the works; from the perspective of antitrust law, that management, which constitutes a cartel and monopoly, should be for the benefit of the public and should ensure that public access to the works is not unreasonably denied. More specifically, in order to comply with the provisions of sections 9 and 10 of the Antitrust Law with regard to the approval of a cartel, it has to be ensured that the benefit to the public from such collective management substantially exceeds the damages that it might cause to all or some of the public.

 

27.       In many ways, the controversies that have arisen before us pinpoint once again the dilemmas that underlie copyright law. Recognition of copyright is aimed at encouraging the creation and dissemination of expression but also at balancing this benefit against the costs of limiting access to protected works (cf: Guy Pesach, The Theoretical Basis for the Recognition of Copyright, 31 Mishpatim 359, 410 (2001)). In the words of Vice President (retired) S. Levin:

 

            "In Anglo-American law the basic justification for these laws is perceived as the desire to provide an incentive to the author in order to achieve maximum access to the work by the public at large. This is the heritage of Israeli copyright law" (CA 326/00 Holon Municipality v. NMC Music Ltd, PD 47(3) 658, 671 (2003)).

 

Copyright Management Corporations: ACUM as a Test Case

 

28.       The case before us should be examined not only in light of the general principles of copyright law, on the one hand, and antitrust law, on the other hand, but also in light of the experience accumulated from copyright management through corporations established for such purpose. ACUM is a local corporation that was established back in pre-state Israel (see: Michael Birnhack, Colonial Copyright: Intellectual Property in Mandate Palestine 185-186 (2012)). Nevertheless, more broadly speaking it is merely one of many examples of corporations known as "copyright collection societies" or collective management organizations" (hereinafter "collective management corporations"). Such corporations operate in many countries and thereby provide an answer to a genuine need of authors who cannot routinely manage the grant of licenses to use their works, collect royalties, and enforce copyright law on those who infringe their rights. These corporations manage the rights of many authors collectively and thereby contribute to reducing the costs of negotiating with users and reducing enforcement costs. At the same time, the mechanism of collective management also benefits the public who uses the works because it allows bringing these works to the public on a regular basis. The collective management corporation typically offers users "a blanket license" in relation to the corporation's whole repertoire, thereby saving them the need to negotiate individually with each of the authors of works included in the repertoire. Such users are for the most part broadcasting stations owners, producers, hall owners, and others, through whom the works are made accessible to the public at large (see: Ariel Katz, Monopoly and Competition in the Collective Management of Public Performing Rights, 2 Din Ve'Devarim 551 (2006); Guy Pesach, Associations for the Collective Management of Rights – Another Look at Effectiveness and Fairness, 2 Din Ve'Devarim 621 (2006) (hereinafter "Pesach"); Walter Arthur Copinger, Copinger on Copyright, pp 1790-1794 (16th ed., 2011) (hereinafter "Copinger")).

 

29.       Alongside recognizing the fact that collective management corporations are a well-known and widespread phenomenon, the concern that accompanies their activity is also acknowledged. Collective management of copyright involves a significant challenge from the perspective of antitrust law, considering the fact that it has centralized characteristics and therefore raises the concerns involved in the creation of a cartel, including the concern of acquiring and abusing monopolistic market power, either by demanding high royalties or in other ways. Against those disadvantages, we usually weigh the necessity of such activity for effectively managing copyright and it is therefore common to regard collective management corporations as "natural monopolies" (and, to a certain extent, something of a necessary evil) and to allow them to operate subject to supervisory mechanisms and regulation (see: Ariel Katz, The Potential Demise of Another Natural Monopoly: Rethinking the Collective Administration of Performing Rights, 1 J. Comp. L. & Econ. 541, 544-548, 551-553 (2005) (hereinafter "Katz"); Copinger, pp 1798-1800). It is along these lines that the activity of the two major collective management corporations in the U.S. – the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc (BMI) – is regulated by special judicial orders ("consent decrees") as part of antitrust law. These orders, whose conditions are revised from time to time, place collective management corporations under a host of constraints in order to ensure their compliance with the competition criteria set forth in antitrust law (for a discussion of the supervisory mechanisms of collective management corporations in the U.S., see: Stanley M. Besen, An Economic Analysis of Copyright Collectives, 78 Va. L. Rev. 383 (1992).) Similarly, collective management corporations that operate in Europe are under supervision, subject to the antitrust law of the European Union (see: Lucie Gaibault & Stef Van Gompe, Collective Management in the European Union, in Collective Management of Copyright and Related Rights 135 (2nd edition, Daniel Gervias ed. 2010); Copinger, pp 1801-1808).

 

The Conditions in Dispute: Public Directors and the Exclusion Mechanism

 

30.       As already mentioned, the controversy before us does not concern the basic authority for ACUM’s operation as a cartel but rather the conditions that have been prescribed for its activity, or, more precisely, two of these conditions. In that sense, the discussion is based on the accepted notion, explained above, which views collective management corporations as something of a "natural monopoly," the existence of which is essential but their activity necessitates supervision and restraint in order to protect the public from the potential negative effects of substantial market power being accumulated by a single entity. The conditions for ACUM’s operation should therefore express the balance between the proprietary right of authors and the public interest in a market free of monopolistic influences, which acquires a unique aspect with regard to the market of creative works that naturally need to be accessible to the public (albeit for a fee).

 

31.       Ultimately, the hearing in this case revolved around two matters: the requirement to appoint directors, and the scope of the rights exclusion mechanism. Both of these need to be examined from the unique point of view that combines the purposes of copyright law with those of antitrust law, paying attention to the balance that both those sets of laws seek to achieve between individual proprietary rights and economic interests, on the one hand, and the public interest, on the other hand.

 

The Appointment of Public Directors: Between the Public Interest and the Interest of the Rights Owners

 

32.       The first condition that was prescribed for the approval of the cartel was to appoint public directors who will constitute a third of the total number of board members (which in practice means appointing four such directors). As aforesaid, ACUM has objected to this condition both in principle and in practice.

 

33.       In principle, ACUM asserted that it is not a public company and therefore there is no justification to enforce on it a supervisory mechanism appropriate to public companies. In this context, it was further asserted that its board of directors includes a delicate balance between all the sectors ACUM represents, which in itself ensures protection of the public interest (article 30.2 of ACUM's current articles of association provides that the company's board of directors shall consist of nine members that include two lyricists, a writer, two easy listening composers, one composer of concert music, one publisher, and two external directors). ACUM also noted that its corporate governance is dispersed and therefore does not raise an "agency problem" of the type with which the mechanism of external directors is designed to deal. ACUM also asserted that in any event it has in place adequate mechanisms to resolve potential disputes and conflicts of interest, including an internal arbitration mechanism as well as the Permanent Conditions that prohibit ACUM from discriminating between its members. According to ACUM, the appointment of public directors would "dilute" the authors' control over their property rights. In practice, ACUM further noted the costs involved in the appointment of the requisite number of public directors, which lead ACUM to be willing to appoint no more than two public directors.

 

34.       According to the Director-General, the need to appoint public directors stems from two factors: first, it will help ensure that ACUM serves the interests of all its member authors, taking into account the interests of individual authors rather than only the group interests of certain categories of authors. Second, the appointments will ensure that at least some of the directors have professional skills in the area of corporate management.

 

35.       With regard to the proportion of public directors on the board, the Director-General's position is that the requirement that no less than a third of the board would be comprised of external directors is justified, since the need for external directors is specifically greater under ACUM’s circumstances, where the corporate structure is dispersed and lacks a distinct controlling shareholder. In this respect the Director-General went on to explain that, in his opinion, ACUM's members need even more protection than "ordinary" shareholders, considering the fact that their livelihood depends on the corporation and they cannot sell their shares to "realize their profits."

 

36.       Having reviewed all this, we have reached the overall conclusion that ACUM's case in this respect should be dismissed.

 

37.       The appointment of public directors – that is, directors who are not employees or shareholders of the company – is one mechanism which allows supervising the behavior of the company, its managers, and its controlling shareholders and helps dispel the various agency problems involved in its activity (see: Irit Haviv-Segal, Company Law, 429, 438 (2007) (hereinafter "Haviv-Segal")). It can be said that the essential contribution of the public director lies in the "external dimension" that he brings to the board's work – as someone who reviews matters referred to the board from a broad, objective, and balanced perspective that also takes into account the public implications of its activity. The provisions of section 240(a1)(1) of the Companies Law, 5759-1999 (hereinafter "the Companies Law"), according to which a public director shall have professional skills or accounting and financial expertise, ensure that his appointment will add a professional dimension to the company that will contribute to its satisfactory management (see: Joseph Gross, The New Companies Law, 386-387 (Fourth Edition, 2007) (hereinafter "Gross")).

 

38.       The mechanism of appointing public directors is typically operated in the context of the activity of public companies – section 239 of the Companies Law requires a public company to appoint at least two public directors, whilst sections 114 and 115(a) of that Law require a public company's board of directors to appoint an audit committee from amongst its members, on which all the public directors shall serve. In addition, there are laws that impose a duty to appoint public directors to serve on the board of certain corporations whose shares are not held by the public, but whose activity has other public importance. Thus, for example, a mutual fund must appoint at least five directors to serve on its board and the proportion of public directors is the same as required of a public company (see: section 16(a) of the Joint Investments Trust Law, 5754-1994); while an insurance company, as defined in the Control of Financial Services (Insurance) Law, 5741-1981, must appoint public directors who will constitute a third of the total members of its board (see: section 2(1) of the Control of Financial Services (Insurance) (Board of Directors and Its Committees) Regulations, 5767-2007). In addition, the board of directors of a company that manages provident funds is required to appoint an investment committee for each fund it manages, the majority of committee members being qualified to serve as public directors (see: section 11(a) of the Control of Financial Services (Provident Funds) Law, 5765-2005).

 

39.       Having reviewed the case, we are satisfied that the condition concerning the appointment of public directors to serve on ACUM's board is consistent with the purpose underlying the approval of the cartel. Although ACUM is not a public company, it does essentially manage a resource that has clear public aspects. From the point of view of the authors, ACUM provides an essential service, without which it would be difficult for them to produce financial benefit from their works. In many ways, that is also the case from the point of view of the public at large: the protected works belong to the authors (and to whoever has acquired rights in them) but it is important that they are used in such a way that will also benefit the general public. Indeed, these public aspects of ACUM's activity underlie its approval as a cartel. At the same time, ACUM's monopolistic characteristics and its status as a cartel in the domain of musical copyright grant it a public dimension in and of themselves. The requirement to appoint external directors to provide a further layer of supervision over ACUM's activity is therefore called for and inherent to the rationale of the cartel's approval in order to protect both authors and users. It should be noted that making the approval of a cartel conditional upon the appointment of external directors, even when the corporation in question is not a public corporation in the ordinary sense, is not unprecedented. Thus, for example, the approval as a cartel of the recycling corporation that was established as a joint venture of manufacturers and importers of soft drinks in Israel was made subject to a similar condition (see section 4 of the Conditions for the Operation of the Recycling Corporation, as approved in AT (J'lem) 4445/01 Shufersal Ltd v. The Director-General of the Antitrust Authority (November 5, 2001)). The same applies to the approval as cartels of two other collective management corporations: the Israeli Federation of Independent Record Producers Ltd. (hereinafter "PIL") (see section 11.3 of the Conditions for the Operation of the Israeli Federation of Independent Record Producers Ltd., as approved in AT (J'lem) 3574/00 The Israeli Federation of Independent Record Producers Ltd. v. The Director-General of the Antitrust Authority (April 29, 2004)), and the Israeli Federation for Records and Cassettes (hereinafter "IFPI") (see: section 13.3 of the Conditions for the Operation of the Israeli Federation for Records and Cassettes Ltd, as approved in AC (J'lem) 705/07 The Israeli Federation for Records and Cassettes Ltd. v. The Director-General of the Antitrust Authority (February 3, 2011).

 

40.       With regard to authors' protection, there appears to be grounds to the argument concerning the importance of protecting the common interests of ACUM's members, regardless of the “category” to which they belong. Public directors can express "cross-category" interests that concern the benefit of authors generally in their relationship with ACUM, as opposed to the benefit of particular categories of authors. Moreover, without laying out hard and fast rules, it can be said that there is prima facie grounds to the assertion that the importance of the public director institution is in fact greater in a corporation characterized by dispersed ownership, in the absence of controlling shareholders, as is the case with ACUM. The agency problem in companies of this type is characterized by interest gaps between management and shareholders (as opposed to interest gaps between the controlling shareholder and minority shareholders, which are typical of companies that have controlling shareholders). Some view the appointment of public directors as a central mechanism for dealing with such gaps (see Haviv-Segal, pp 438-439). Clear expression of this distinction can be found in the First Schedule to the Companies Law, which contains suggested provisions for the corporate governance of public companies. Paragraph 1 of the Schedule prescribes the recommended percentage of independent directors, distinguishing between companies that do and do not have controlling shareholders. With regard to the latter, the Schedule provides that a majority of the directors should be independent, whilst in the former it provides that it is sufficient for a third of the directors to be independent.

 

41.       Furthermore, even assuming that the present structure of ACUM's board of directors faithfully represents its member authors, that structure does not prima facie guarantee that the protection of authors will also take into account the public interest more broadly. Indeed, a public director's fiduciary duty to the company is no different than that of an ordinary director, in the sense that he too must act for the benefit of the company (see: Gross, p. 406; cf: CA 610/94 Buchbinder v. The Official Receiver, para. 43 (May 11, 2003)). However, the public director will presumably represent a broader, more objective point of view, cognizant of the public implications of the corporation's activity.

 

42.       Moreover, as already explained, the appointment of public directors also has great importance as regards guaranteeing a minimum number of directors with professional managerial skills. In fact, ACUM itself acknowledged the professional advantages of appointing public directors even before the Tribunal's judgment was handed off and the revised version of ACUM's articles of association now require the appointment of two such directors. The fundamental aspect of this controversy has thus somewhat eroded and it has become a matter of extent and degree. We believe that the proportion of directors set forth in the Permanent Conditions – a third of the board members – is not excessive or unreasonable, considering ACUM’s character as a corporation whose ownership is dispersed and especially given the lingering concern of abusing monopolistic power.

 

43.       This discussion, which is "internal" and concentrates on corporate and antitrust law, can be supplemented by an "external" discussion, based on the significance that entities with public aspects have from the perspective of public law. According to this Court's case law, a private corporation whose activity has clear public aspects might be regarded as a "hybrid" entity, which places it under additional duties over and above those it is subject to in accordance with private law. Care must be taken not to overextend the category of hybrid entities in order to avoid eroding the significance of acknowledging a public status and blurring the lines between the public and private spheres. Moreover, under the current circumstances, there is no need to rule on whether ACUM should be regarded as a hybrid entity and a complete discussion of the criteria for the recognition of an entity as hybrid is unnecessary. However, it should be noted that ACUM's activity does entail many of the criteria mentioned in previous case law as characterizing a hybrid entity. Thus, for example, in HCJ 731/86 Micro Daf v. Israel Electric Corporation Ltd PD 41(2) 449 (1987) (hereinafter "Micro Daf"), where the question of hybrid entities was discussed for the first time – in the context of the Electric Corporation's activity – the factors taken into account were the monopolistic aspect of the corporation's activity, the nature of the resource it manages, and the fact that statutory powers have been entrusted to it. These factors were not considered an "exhaustive list" and since then entities which lacked those characteristics, at least to the same extent, have also been recognized as hybrid (see: CA 294/91 Jerusalem Community Hevra Kadisha Burial Society v. Kastenbaum PD 46(2) 464 (1992)). For further discussion, see: Daphne Barak-Erez, Administrative Law vol. 3 - Economic Administrative Law 463-492 (2013)). With regard to ACUM, the monopolistic aspect of its activity is beyond dispute. In Israel, although there are other collective management corporations, including the abovementioned PIL and IFPI, the product they supply – licenses for the broadcasting and public playing of sound recordings – does not substitute the product ACUM supplies. As the Director-General stated in his declaration, ACUM has no direct competitors in its relevant market and although formally nothing stops authors from managing their works themselves, few of them find such course of action practical or worthwhile, so that in fact the vast majority of works for which royalties are paid in Israel are under the management of ACUM. The same applies to the implications that the resource managed by ACUM has on the general public. Although the licenses that ACUM offers are acquired by a relatively small category of users, those licenses feature the right to play the works in public (or make them otherwise available to the public). Hence, they have a very significant effect on public access to the works. In other words, the public aspect of ACUM's activity also derives from the fact that the product it supplies is not in fact the musical works themselves but rather the collective management mechanism, which facilitates (and to a great extent enables) playing those works in public and therefore constitutes a product of clear public importance. Finally, although ACUM does not exercise statutory powers, its approval as a cartel entrusts it with power that derives from a statutory decision established in the Antitrust Law. These characteristics, even if they are insufficient to define ACUM as a hybrid entity in the ordinary sense of the term (and, as aforesaid, we have no need to rule on this issue), do support the basic justification for the Director-General's requirement under the current circumstances. Indeed, the appointment of public directors is ordinarily not imposed on a hybrid entity. However, the fact that ACUM constitutes an entity that owes important duties to the public can serve as a factor in the Director-General's decision to subject a cartel to conditions.

 

The Rights Exclusion Mechanism

 

44.       The other condition at the center of the litigation before us concerns, as aforesaid, the rights exclusion mechanism. Underlying the controversy were two questions: first, is the requirement for the consent of all joint authors of a work in order to exclude it from ACUM's repertoire justified or should that power be held by each of the authors individually? Second, how delicate and precise should the "segmentation" mechanism be with regard to the exclusion ability, as regards the distinction between different types of uses? We shall clarify those questions below.

 

The Rights Exclusion Mechanism: the Consent of All Authors or a Personal Right?

 

45.       The requirement that the exclusion of the work should be conditional upon the agreement of all its authors prima facie imposes a constraint on the right of each of the authors to control the rewards of his work. For that reason it has been criticized by EMI Israel and Anana. In contrast, the position of the Director-General and ACUM is that making the exclusion conditional upon the consent of the other authors is essential to protect both users and authors. The main argument regarding the protection of users relates to the concern that a "liberal" exclusion mechanism that would give an independent exclusion right to each author would impair ACUM's ability to offer sweeping licenses and thereby undermine the basic justification for its existence from the perspective of public interest. With regard to the protection of authors, it is asserted that the ability to exclude rights without the agreement of the other authors would encourage abuse of that power by "powerful" authors at the expense of the other authors of the work. ACUM explained that if each author of a joint work could exclude his rights from ACUM’s repertoire without the agreement of the other authors, it would grant veto power to that author to prevent works from being used by those to whom other authors wish to grant permission. ACUM also emphasized that where the rights in a work are vested in several authors veto power will forever be involved and the remaining question is only which veto power is least damaging: that of an author wishing to prevent the work's exclusion and leave it with ACUM's repertoire, or that of the excluding author to prevent any use of a work contrary to the position of the other authors. According to ACUM, the former is infinitely preferable. Having reviewed the case, we have reached the overall conclusion that we accept the position of the Director-General and ACUM in this respect.

 

46.       We accept as a starting point for our discussion the (reasonable) assumption that the rights in the type of works that ACUM manages are often shared by several authors. This can be illustrated by the typical case of a song. According to copyright law, every song is made up of several independent works, the rights in each of which are vested in different authors – the words of the song are a literary work owned by the lyricist; the music is a musical work owned by the composer. Moreover, there are also cases in which several composers or lyricists collaborate in the process of creating a work and in such cases the circle of rights owners expands even further. Considering this situation, it is easy to understand EMI Israel and Anana's grievances: making the exclusion power conditional upon the agreement of all authors undoubtedly burdens the individual author who seeks to exclude his work. However, this does not suffice. The question before us is whether this burden is justified, considering the purpose of the permanent permit – and our answer to that question is in the affirmative.

 

47.       In order to discuss this question it is necessary to return to the original reasons that led to managing rights through a corporation like ACUM. The most important tool available to ACUM for the collective management of rights is the grant of a sweeping license known as a "blanket license," the advantages of which in terms of transaction costs constitute the basic reason that legitimates ACUM's activity, despite difficulties in terms of antitrust law. Extending the ability to exclude rights from ACUM's management will naturally impair its ability to offer blanket licenses and thereby reduce the public benefit from its operation as a cartel. Over-extending that possibility will impair the public benefit from ACUM’s activity to such extent that it will no longer be the case necessarily that the benefit substantially exceeds the potential damages to the public interest from the cartel's operation. Having considered matters, we are satisfied that the grant of a personal "exclusion right" to each author would amount to such over-extension. Considering the typical ownership structure of musical works, an exclusion mechanism that is not conditional upon the agreement of the other authors effectively means granting authority to a single author, regardless of his part in the work, to exclude the work as a whole from ACUM's blanket license regime. Thus, a user who wishes to make lawful use of the work would have to negotiate with the excluding author in addition to acquiring the sweeping license from ACUM. Such a state of affairs would greatly limit the benefit of the cartel for users to the point of raising doubts as to whether the cartel is indeed "in the public interest," as required by section 9 of the Antitrust Law whenever a cartel is approved.

 

48.       Furthermore – accepting the position whereby the consent of all the authors of a joint work is unnecessary to exclude it would also raise difficulties for the relationship between the authors themselves as it may enable some of the authors – usually the more "powerful" ones – to exploit their exclusion power at the expense of the other authors. This may occur in situations where the user has already acquired most of the rights to use the work by means of a blanket license and merely needs to "supplement" the excluded right. This may give rise to phenomena of "extortion" and "free-riding," so that the remaining owner of the right will demand exceptionally high license fees for his share. We have already discussed the problem of such a state of affairs from the user's point of view. However, in truth, the problem also exists from the perspective of the excluding author making excess profit at the expense of the other authors. This difficulty is intensified in light of the fact that the ability to exclude rights from ACUM's management – given the complexity involved in negotiating with users individually – would essentially be of benefit to powerful rights owners, like large publishers, as opposed to individual, independent authors.

 

49.       It should be noted that we have so far used the expression "joint authorship" in order to describe all the cases in which the rights in a particular song are shared by several authors, although in fact it is prima facie possible to distinguish between two models of joint authorship. One model, of "joint authorship in indefinite shares," relates to two or more authors who collaborated in such way that it is impossible to distinguish the share of each of them in the finished work. In such a case, the work is considered a "joint work" according to section 1 of the Copyright Law. The other model, of "joint authorship in definite shares," involves a finished product, like a song, which is made up of several units, each of which was created by a different author and is a protected work in itself (for example the words of the song, which were written by one author, constitute a literary work; while the music, which was composed by another author, constitutes a musical work). The authors in such a case are not regarded as joint authors according to the Copyright Law, despite the fact that their relationship is substantively founded upon sharing. It is interesting to note that the American copyright law does distinguish between works where the shares of the various authors are inseparable and works where the shares of the various authors are interdependent. Nevertheless, both situations are considered "joint work" (see: Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 6.4 (2002) (hereinafter "Nimmer"). In any event, for the purpose of the present discussion concerning the ability of authors to exclude rights from ACUM’s management we need not consider this distinction. In both cases, splitting the licensing authority would place practical obstacles for using the joint work.

 

50.       In fact, the controversy before us derives not only from the different interests that the various parties represent but also from the fact that the Copyright Law does not expressly regulate the issues to which joint authorship gives rise (see: Michael Birnhack, A Cultural Reading: the Law and the Creative Field, Authoring Rights: Readings in Copyright Law 83, 105-106 (Michael Birnhack & Guy Pesach, Editors, 2009) (hereinafter "Birnhack"); Gilad Wexelman, Corporate Creation and Cooperative Creation, Authoring Rights: Readings in Copyright Law, 167, 177-178 (2009) (hereinafter "Wexelman"). Cf  Margaret Chon, New Wine Bursting from Old Bottles, Collaborative Internet Art, Joint Works and Entrepreneurship, 75 Or. L. Rev. 257 (1996)). In fact, the only arrangement the Law establishes with regard to joint works (as defined in section 1) relates to the period of protection of the work, which is measured according to the age of the surviving joint author, plus 70 years (section 39 of the Copyright Law).

 

51.       Additionally, reference to comparative law does not yield an unequivocal answer, considering the numerous potential approaches to this issue. Thus, for example, subject to certain restrictions, the law in the U.S. vests each of the joint authors with an independent right to permit use of their work even without the consent of the other authors, provided that they are paid their proportional share of the profit produced from the work (see: Nimmer § 6.10; Russ VerSteeg, Intent, Originality, Creativity and Joint Authorship 68 Brooklyn L. Rev. 123, 149-150 (2002)). In contrast, according to the approach prevailing in English law, the agreement of all authors is necessary in order to permit use (see: Copyright, Design and Patents Act 1988, section 173(2). See also: Copinger, p 334.) For the purpose of the ruling before us, we must be cognizant of the fact that the variety of existing approaches regarding copyright management of joint works attests not only to the great complexity of the matter but also to the fact that recognizing authors' proprietary rights does not inherently dictate a particular result.

 

52.       Since there is no specific regulation of the issue of jointly owned copyright within the Copyright Law, we may turn to legislation in other contexts concerning the joint ownership of property rights. Detailed regulation of this sort exists regarding the joint ownership of land in sections 27 to 36 of the Land Law, 5729-1969 (hereinafter "the Land Law"). According to section 9(e) of the Movable Property Law, 5731-1971 (hereinafter "the Movable Property Law"), arrangements concerning joint ownership of land essentially apply to movable property too, "save as may be otherwise provided in a co-ownership agreement." By virtue of section 13(a) of the Movable Property Law, such arrangements also apply to joint ownership of "rights." Nevertheless, reference to the Land Law with regard to the legal regime governing joint authorship should be made with care. As Prof. Michael Birnhack has noted:

 

            "Even if a model of joint authorship is prescribed, the socio-legal institution can be designed in various ways, ranging from management based on the decisions of all owners, through consent-based management, to each author having freedom of use. Selecting the appropriate point on this range should be influenced by an understanding of the law concerning the creative process and the reciprocal relationship between joint authors, between each of them and the work, or anywhere else where the work and its significance are formed" (Birnhack, p 106).

 

Similarly, Dr. Gilad Wexelman has also written:

 

            "A joint work raises problems of a different type, when compared with the joint ownership of tangible resources and applying the doctrines that exist regarding joint ownership of tangible resources to joint authorship is therefore improper and inappropriate. These doctrines do not provide the necessary solutions for joint authorship. The inference deriving from this is that it is appropriate to adopt a broader, different conception of the joint authorship process, rather than a conception influenced by the private property model" (Wexelman, p 178).

 

53.       One way or the other, before we seek to draw an analogy based on the arrangements relating to joint ownership of land, it is important to emphasize that we need not consider the legal regime that governs the relationship between joint authors as an independent issue. The question of joint authorship should be analyzed in the case before us merely in the particular context of a joint work's management by a collective management corporation like ACUM – which naturally goes beyond the default rules that apply to joint authorship. In any case, under the circumstances,  reference to the existing legal arrangements regarding the management of joint rights should serve merely as a framework and a starting point for the discussion.

 

54.       The arrangement prescribed in the Land Law concerning joint ownership is based on a concept of management by majority decisions, except for matters that go beyond ordinary management and use, in which unanimous agreement is required. In this respect, section 30 of the Land Law provides:

 

            (a)       The owner of a majority of the shares in any joint property may determine all matters relating to the ordinary management and use of the property.

 

            (b)       A joint owner who considers himself aggrieved by a determination under subsection (a) may apply to the Court for directions and the Court shall decide as seems just and expedient under the circumstances of the case.

 

            (c)       Any matter outside the scope of ordinary management and use requires the consent of all the joint owners.

 

55.       The joint owners of a land can agree upon a different method for the management of their rights but, as provided in section 29 of the Land Law, this is the arrangement that applies "unless otherwise provided in a joint ownership agreement" (subsection (c)) (see also: CA 810/82 Zol Bo Ltd. v. Zeida PD 37(4) 737 (1983); CA 663/87 Nathan v. Greener PD 45(1) 104 (1990)).

 

56.       At the same time, section 31(a)(1) of the Land Law provides that each joint owner may, without the consent of the other joint owners, make reasonable use of the joint property, provided that he does not prevent another joint owner from conducting such use. In other words, none of the joint owners of land may stop his fellow owners from using the property, so long as it applies to reasonable use.

 

57.       What can be learned from these arrangements for the case in question? Applying the arrangement prescribed in section 30, mutatis mutandis, leads to the conclusion that the requirement of a "unanimous" decision is appropriate insofar as management or use out of the ordinary is involved. It can therefore be argued that the management of copyright through an entity like ACUM is the ordinary, accepted method worldwide for the management of individual authors' rights, and departing from that arrangement therefore constitutes an "extraordinary" decision outside the ordinary realm of rights management. It should therefore be made unanimously, exactly as provided by the conditions that have been approved.

 

58.       Indeed, as stated above, the considerations relevant to joint ownership of land are not necessarily apt with respect to joint authorship. Thus, for example, the arrangement contained in the Land Law can be seen as "hostile" to a state of joint ownership, recognizing that joint ownership of land may burden its efficient management. Section 37 of the Land Law therefore provides that "each joint owner of immovable property is entitled at any time to demand the dissolution of the joint ownership." Yet, joint authorship is not a "pathological" condition. On the contrary, the process of authorship frequently involves collaboration – either direct or indirect – between several authors and dissolving the joint authorship should not be regarded as socially desirable. It is also likely to be more difficult to appraise the value of the work for the purchase of one of the joint authors' shares than severing the joint ownership of land. Consequently, as already mentioned, the analogy from the Land Law should be drawn with all due care. However, even taking into account the difference between joint ownership of land and joint authorship, it does appear that the requirement of unanimous consent for the exclusion mechanism is proper. Particularly because joint authorship is a "natural" condition and typical of many works, it is appropriate to be apprehensive about an exclusion mechanism that is based on each of the authors having an individual right of action, reinforcing the status of strong authors and burdening public access to the works, as explained below.

 

59.       Examining the rule with regard to the reasonable use of jointly owned land also leads, prima facie, to a similar conclusion. By drawing an analogy based on section 31(a)(1) of the Land Law it can be inferred that leaving the work under the management of ACUM constitutes reasonable use, considering the fact that it is the typical, widespread method for the collection of royalties. According to this logic, there appears no justification for adopting an exclusion mechanism that enables a joint author, who so desires, to prevent his fellow author from making reasonable use of the work, by excluding it from the collectively managed repertoire.

 

60.       It should be noted that this Court has previously considered the question of collaboration between joint authors, in CA 1567/99 Sivan v. Sheffer PD 57(2) 913 (2003) (hereinafter "Sivan"). Under the circumstances of that case, we recognized the right of each of the joint authors to terminate a contract that had been made in connection with the use of the rights when the contract was breached. Can it therefore be inferred that it would be proper in the current case to permit each of the joint authors to individually decide on exclusion? Despite the apparent similarity between the situations, in fact they are quite different and the conclusion should therefore be different too. In Sivan the issue was the rescission of a contract due to its breach and ipso facto it was possible to rely on the principle that whosever right has been infringed on is not required to forgive the infringement. This result is supported by considerations deriving from the law of obligations and in particular from the issue of multiple creditors. In contrast, in the case at hand, the question is posed for the purpose of delineating the ordinary rules of management, in the absence of any alleged breach. The relevant considerations are thus different, and so is the result that they dictate. Indeed, in Sivan the Court has made a clear distinction between these two questions. In fact, it noted that it was not ruling on the question of unilateral exercise of copyright in a joint work, which is more similar to the present case, and it went on to state that section 31(a)(1) of the Land Law prima facie makes it possible to adopt a flexible approach in such cases (Sivan p 942).

 

61.       Taking a broader view, it appears that the position presented to us by EMI Israel and Anana does not give proper weight to the effect of high transaction costs and free-riding in the management of multiple ownership resources, a phenomenon referred to as "the tragedy of the anti-commons" alongside the better-known term "the tragedy of the common property" or "the tragedy of the commons" (see generally: Michael Heller, The Tragedy of the Anticommons: Property in the Transition from Marx to Markets, 111 Harv L. Rev 621 (1998); James Buchanan & Yong J. Yoon, Symmetric Tragedies: Commons and Anticommons, 43 J. L. & Econ. 1 (2000)). Indeed, the narrow exclusion mechanism that the Tribunal approved appears more suitable for dealing with these phenomena. In connection with joint authorship, “the tragedy of the anti-commons” is manifested in sub-optimal use of the work as a result of uncoordinated behavior by its owners. In a legal regime where a license to use a particular work necessitates the agreement of all its owners, each of the owners might act to maximize his own profits by claiming a high fee for agreeing to its use, without considering the negative externality that such behavior for the other owners. Ultimately many users will find it difficult to meet the overall price required of them and the work will be used to a lesser extent, thus harming both the joint authors and the public, whose access to the work has been limited. It is common to believe that the solution to this problem is one of the major advantages embodied in the activity of collective management corporations (see: Katz, p 561; Francesco Parisi & Ben Depoorter, The Market for Intellectual Property: the Case of Complementary Oligopoly in The Economics of Copyright 162, 168-169, Wendy J. Gordon & Richard Watt eds. 2003 (hereinafter "Parisi & Depoorter")). Since dealing with the market failings associated with joint authorship is one advantage that justifies the monopolistic activity of corporations like ACUM, great importance is attributed to the design of an exclusion mechanism that will not frustrate that advantage by vesting veto power in each joint author who wishes to preclude use of a joint work.

 

62.       Ultimately, even under the narrow exclusion regime joint authors can agree in advance, contractually, on the scope of their understandings with regard to the work's exclusion from collective management. In fact, the narrow exclusion regime merely provides the default with regard to the inclusion of a joint work in the repertoire managed by ACUM. Insofar as the authors wish to agree on a different decision-making mechanism with respect to the management of joint works, they are at liberty to do so. Presumably such an arrangement, made before any of the parties is in a position for extortion or "free-riding," will help limit the coordination difficulties asserted by EMI Israel and Anana with regard to obtaining the consents necessary for the exclusion of a joint work. In view of the aforesaid, the default mechanism prescribed – according to which in the absence of an agreement between the joint authors to the contrary, the consent of all authors is necessary to exclude the work from management by ACUM – is appropriate.

 

The Rights Exclusion Mechanism: the Degree of Segmentation and the Distinction between New and Old Media

 

63.       As mentioned above, the arguments by EMI Israel and Anana also revolved around the fact that the "exclusion packages" defined in the Permanent Conditions do not distinguish between uses for the purpose of "old media" and uses for the purpose of "new media." In this respect Anana reiterated the case that it made before the Tribunal concerning the impairment of authors' ability to exhaust the full financial potential embodied in their works by excluding the works from management by ACUM solely with regard to "new media," and concerning the damage caused to Anana itself, having prima facie relied upon the previous exclusion mechanism in excluding rights that it will now have to restore to ACUM’s management.

 

64.       In contrast, the Director-General and ACUM argued before us that categorizing the necessary permissions according to types of media will allow ACUM members to abuse their power against users by forcing them to purchase specific uses (for example using the work on a cellular platform) in addition to the general fee for the license awarded through ACUM. In addition, ACUM mentioned that the adoption of a "liberal" exclusion regime enabling a precise "segmentation" of the excluded uses of any work would involve a significant logistic and financial burden on its ability to manage copyright of its repertoire.

 

65.       Deciding between the conflicting positions in this respect has proven to be more complex than the parties' arguments revealed. In truth, as we explain below, both positions are extreme and fail to fully address the difficulties they entail. Consequently, at present, we believe that the exclusion mechanism approved by the Tribunal should be upheld, provided that the question of excluding "new media" – subject to conditions and constraints – will be comprehensively reviewed towards the renewal of the cartel’s approval. We shall explain our said position.

 

66.       The present exclusion mechanism, as expressed in section 2.3 of the Permanent Conditions, enables an author to exclude his rights completely, in respect of all their potential uses. Moreover, the mechanism allows excluding the rights in respect of some of the uses, yet solely in accordance with one of four alternatives – "the exclusion packages" that stand at the center of the discussion. Because of their importance, we shall lay them out in full below:           

 

            "2.3.1  Excluding the rights for audiovisual broadcasting, including synchronization and recording for the purposes of such broadcasting, and including the provision of interactive and/or on demand services and any similar service, including by television, Internet, telephony or mobile phone.

 

            2.3.2   Excluding the broadcasting rights by means of audio, including recording for the purposes of such broadcasting, and including the provision of interactive and/or on demand services and any similar service, including by television, Internet, telephony or mobile phone.

 

2.3.3   Excluding the right of copying. For the avoidance of doubt, it is clarified that excluding the right of copying does not include the right of copying for broadcasting purposes.

 

2.3.4   Excluding the right of imprinting and/or recording. For the avoidance of doubt, it is clarified that excluding the right of imprinting and/or recording does not include the right of imprinting and/or recording for broadcasting purposes".

 

67.       The alternatives at the center of the present controversy are the first and the second (and to a limited extent also the fourth, insofar as the exercise of the right of copying is aimed at integrating a musical work in the soundtrack of an audiovisual work). These alternatives deal with uses that make the work available to the general public – its broadcasting on television or radio, making it accessible by means of "streaming" technology, which enables viewing or listening to content through the Internet without copying it to the user's computer, and the like. The main distinction that the exclusion mechanism makes in this context is between presenting the work by audiovisual means and presenting it by audio only. Thus, for example, given the present situation, an author can be represented by ACUM for the purpose of playing songs on the radio but not for using them in the format of television content.

 

68.       Presumably, maximum protection of the author's rights and his financial interests should have enabled every author to make specific exclusion decisions as much as possible – even with reference to a specific work in a particular use. Along these lines, ACUM's present exclusion mechanism permits, as aforesaid, limited "segmentation" by types of use. However, it has been argued before us that this does not suffice. The dispute revolved around the degree of precision required by segmentation. While the present segmentation mechanism essentially distinguishes between audio and audiovisual uses, EMI Israel (supported by Anana) also wishes to distinguish between "old media" – like television and radio – and "new media" – such as the Internet and cellular phone services. This position was presented to us as warranted by technological progress and the launching of new channels to use works, as well as the protection of the author's prerogative to manage the works he owns. However, as we explain below, this position raises fundamental and practical difficulties and thus cannot be adopted in the format in which it was presented.

 

69.       It should be stated that the question of excluding "new media" should first be considered in light of the two perspectives that fashion the discussion as a whole – that of copyright law and that of antitrust law. However, in this context, it is important to bear in mind another point of view which relates to the interface between law and technology and focuses on the adaptation of the legal framework to technological developments as well as its implications to future technological development, for better or worse (see and compare: Dotan Oliar, The Copyright-Innovation Trade-Off: Property Rules, Liability Rules and Intentional Infliction of Harm, 64 Stan. L. Rev. 951 (2012)).

 

70.       At the outset, we should consider the fact that the ability to exclude "new media" that EMI Israel seeks to adopt relies primarily on a technological distinction between "old" and "new" communication platforms. This distinction is replete with difficulties. The world of communications is characterized by constant, rapid technological development. More importantly, the technological aspect of this area is characterized by a phenomenon sometimes called "technology collapse": with the development of technology the walls that separate various media platforms gradually collapse and different types of technology "collapse" into each other, creating new interfaces. Thus, for example, a movie that is distributed through the Internet is also available for viewing on a smartphone, while traditional radio stations also broadcast songs and programs by streaming technology over the Internet. Given this technological reality, the distinction between "old media" and "new media" is not dichotomous, nor is it permanent or stable. In fact, EMI Israel and Anana did not even explain how these categories should be defined in their view, and settled for giving clear-cut examples (such as using a song as a ringtone), which were insufficient to delineate the boundaries of the distinction. Their case therefore left many practical questions unanswered. For example, no explanation was given as to whether the transmission of television broadcasts through the Internet to be viewed on smartphones would, according to the proposed approach, require a license for "new media" or "old media" or in any event how would this example be classified to one category or the other. The rapid, constant development of new communication technology guarantees that questions of this type will not remain theoretical. In this context, we should note the interesting case of the American company MobiTV, which at the beginning of the 21st century developed technology that enabled receiving satellite or cable broadcasts and viewing them on mobile phones. A dispute (which gave rise to several legal proceedings) arose between MobiTV and ASCAP, one of the two largest collective management corporations in the U.S. The dispute concerned the purchase of a blanket license necessary to legitimate the transmissions, as a result, among other things, of MobiTV's objection to being charged a "new media" rate even though the content it offered its customers was the same as broadcast by traditional means (although ultimately the judgment did not rule on this question directly. See: United States v. ASCAP, 712 F. Supp. 2d 206 (SDNY 2010)). With regard to the controversy relating to the classification of MobiTV's services as "new media," see also its preliminary response in the legal proceeding it initiated (Applicant Mobitv, Inc's Pre-Trial Memorandum at 25, United States v. ASCAP, 712 F. Supp. 2d 206 (SDNY 2010)).

 

71.       Insofar as the distinction between "new media" and "old media" is intended to extend to situations in which the content of radio and television programs is transmitted through the Internet to computer screens or by cellular phone services to mobile phone screens, adopting this distinction is likely to have a "chilling effect" on the use of the works in "old media" too. This is because users would presumably refrain in advance from integrating excluded works in productions intended for "old media," if only given their concern of future marketing constraints in "new media." Thus, for example, when a television program is produced, certain songs might not be included in it – as a cautionary measure – so as not to impair the possibility of broadcasting the program over the Internet too. Such indirect implications are not always clear "in real time" to an author who wishes to exclude his work, but recognizing them might also be weighed against the distinction proposed by EMI Israel and Anana.

 

72.       Another aspect to be considered is the likely implications of the exclusion mechanism on cyberspace users. In their arguments before us EMI Israel and Anana concentrated on institutional and corporate users, such as large communications companies, thereby presenting only a partial perspective on the matter in dispute. However, the exclusion mechanism they sought to adopt is not intended to apply only to such users. In fact, a sweeping exclusion of "new media" uses is likely to lead, without distinction, to difficulties for small website operators, including, for example, Internet radio operators, for which the ability to contract with collective management corporations constitutes a lawful, practical way for making regular use of a wide variety of works (and indeed some believe that the activity of collective management corporations is of especial importance for authorized use of musical works over the Internet. See, for example: Daniel Gervais, The Landscape of Collective Management Schemes 34 COLUM. J. L. & ARTS 591, 601 (2011) (hereinafter "Gervais, Landscape"). For a discussion of the importance of collectively managing works in a digital environment, see also: Recommendation 2005/737/EC on collective cross-border management of copyright and related right for legitimate online music services [2005] OJ L276/54 (hereinafter "the 2005 EC recommendation"); Proposal for a Directive of the European Parliament and of the Council on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market (July 11, 2012) (hereinafter "the 2012 proposed directive"). See also Copinger, pp 1816-1826).

 

73.       The effects of the requirement to distinguish the use of new technologies on making works accessible to the public should also be considered in view of past experience in similar contexts. Thus, for example, in New York Times Co. v. Tasini 533 US 483 (2001) (hereinafter "Tasini"), the US Supreme Court considered whether a newspaper (the New York Times) could upload articles by freelance writes to a computer database. After lengthy litigation, the US Supreme Court accepted the position of the writers who argued that the license previously given to the newspaper was merely for the purpose of printed publication, as opposed to electronic media. Following the judgment the newspaper had to acquire permission from the writers to publish their articles in the database. Yet, since the newspaper believed that taking such action would not be financially viable, the result in practice was the removal of the articles from the database, thereby denying public access to them. We do not need to go into the merits of the judicial ruling in Tasini insofar as it relates to the understandings between the newspaper and its writers at the relevant times. In fact, the ruling in Tasini is not directly relevant to the technological aspects of the publication format and is instead focused on whether uploading the articles to a general computerized database (of numerous articles from various newspapers and journals) could be construed as a newspaper publication (indeed, in another case of similar circumstances the Supreme Court of Canada held that a newspaper could copy articles published in its printed edition to digital CDs containing articles of that newspaper alone. See: Robertson v. Thomson Corp. 2006 SCC 43 (2006)). Nevertheless, the results of this case embody an important lesson. Taking the broader view it teaches us that an arrangement that does not take into account the dynamic nature of uses might prove to burden and damage the public interest. Taking a forward-looking view, it appears that experience teaches us that it is difficult to base licenses for use on a distinction between technologies as this might subsequently frustrate broad access to cultural assets (see also: Francesco Parisi & Catherine Sevcenko, Lessons from the Anticommons: The Economics of New York Times Co. v. Tasini, 90 Ky. L. J. 295 (2001-2002)).

 

74.       What is the experience of other legal systems regarding the exclusion of "new media"? On the face of it, this is an important question, considering the fact that the challenges of technology in the area of copyright are by no means unique to Israel. However, for the reasons detailed below, the benefit of a comparative study has proven limited at the present stage of developments in the area.

 

75.       Truth be told, reference to legal developments in Europe and the U.S. shows that the exclusion of "new media" is often recognized as possible. Presumably, this reinforces the position of EMI Israel and Anana. However, studying matters in depth indicates that this experience has limited application to the case before us, because, among other reasons, the issue under consideration here is still in the early stages of formulation, trial, and controversy in other systems too.

 

76.       The two major collective management corporations in the U.S. – BMI and ASCAP – recently permitted two of their members (including global EMI) to exclude the rights owned by them from collective management for the purpose of certain aspects of the works' use in "new media" (as detailed on their websites – http://www.bmi.com and http://www.ascap.com). Yet, it is important to note that the ability to do so is embodied in the decisions of the corporations themselves rather than the result of external regulation. Moreover, the American rights management corporations operate in a different way than ACUM in the sense that they manage only one type of rights – public performance rights, which concern the permission to perform the work in public, to broadcast it, or to make it available to the public (but not the permission to copy the works or integrate them in audiovisual productions). That is, the starting point for the exclusion is a market of rights that is more "split" than the market in which users and authors operate in Israel. This background is likely to influence the factors relating to the desirable exclusion mechanism. Subsequently, it should be noted that reference to the exclusion of "new media" from administration by collective management corporations in the U.S. is not made in "all or nothing" terms, and in fact includes certain restrictions. For example, BMI's most up to date announcement on the matter (as published on its website) has clarified that the ability to exclude "new media" is aimed at cases where the work's use necessitates more than one type of license, while ASCAP has emphasized in addition that exclusion is possible with regard to making works accessible to the public exclusively through "new media," and does not apply to users that are broadcasters. Finally, and this is a major point, it cannot be ignored that some of the decisions on these matters are very recent (for example, BMI's announcement, of February 11, 2013, was published long after the litigation between the parties before the Tribunal had ended). It is therefore difficult to draw inferences from other legal systems' sustainable experience in this area. In fact, it can be said that at this stage the secondary effects of the "shock waves" that the new reforms have created for users have not yet been fully clarified, although the existence of such "shock waves" is already apparent. For example, we may point to a new development – lawsuits brought by users against management corporations to reduce the fee charged for a "blanket license," since "the blanket" no longer covers "new media" too (for instance, the claim brought against ASCAP by a large Internet radio company called Pandora at the end of 2012, which is still pending. For reports in the media about the case, see, for example: Don Jeffrey, Pandora Media Sues ASCAP Seeking Lower Songwriter Fees (November 6, 2012, available at http://www.bloomberg.com/news/2012-11-05/pandora-media-sues-ascap-seekin... Ed Christman, Pandora Files Motion to Keep Low Publishing Rates (June 20, 2013) available at http://www.billboard.com/ biz/articles/news/digital-and-mobile/1567890/pandora-files-motion-to-keep-low-publi-shing-rates).

 

77.       In principle, European law permits a rights owner to join a collective management corporation even when he seeks to reserve the use of the rights on the Internet or through CDs (see: Commission Decision of August 6, 2002 in case COMP/C2/37.219 Banghalter/Homem Christo (Daft Punk) v. SACEM. See also: section 5(3) of the 2005 Commission recommendation and the 2012 proposed directive, mentioned above). Nevertheless, it is important to bear in mind that this arrangement is also the result of factors irrelevant to Israeli reality, primarily the desire to reach a standard, coordinated pan-European regulation where there are multiple collective management corporations.

 

78.       Another factor that should be mentioned parenthetically involves the broader context in which the exclusion mechanism is embodied, with regard to the acceptance of the Conditions towards authors' freedom of action and freedom of choice. In this context, for example, it is significant that the Permanent Conditions ensure the right of each of ACUM’s members to contract with users individually and to offer them individual licenses to use certain works alongside the management of those works by ACUM, without excluding them from its repertoire (section 2.4 of the Permanent Conditions). This is similar to the U.S. practice and different from the norm in Europe, where most collective management corporations require exclusivity from their members in respect of all rights in their work (see: Gervais, Landscape, p 598). Indeed, it is possible that this course of action will not be frequently used and it is likely to be significant mainly from the perspective of users who do not require blanket licenses but rather individual licenses for certain works. However, from a more general perspective, this mechanism creates something of a balancing effect on ACUM's coercive power (see also and compare: Parisi & Deporter, pp 170-172).

 

79.       More generally, it can be said that EMI Israel and Anana’s requirement to allow a sweeping exclusion of "new media" uses was based on the assumption that they are entitled to enjoy the fruits of the cartel while realizing the financial potential embodied in the works they manage to its fullest. That is a mistake. Indeed, once ACUM's activity was recognized as a cartel, which raises concern of abuse of monopolistic power against the public, it can no longer be said that ACUM members are entitled to fully exercise their proprietary rights while enjoying the benefits of the cartel. Although the cartel has been approved, its approval was made subject to conditions. Those conditions bear a price that ACUM and its member authors must pay in order to balance the excess benefits such membership confers and to ensure that the public is protected against the concerns involved in the cartel's activity. In fact, what we have previously stated regarding the exclusion of a work without the consent of all joint authors is also appropriate with regard to the issue of segmentation – the adoption of a segmentation mechanism that enables the exclusion of works based on a technological distinction between new and old media, without reservation, might reduce the benefit that ACUM’s activity yields for the public to such extent that may undermine the justification of its approval as a cartel.

 

80.       We can therefore sum up and say that even if the ability to exclude "new media" uses should not be outright dismissed, EMI Israel and Anana have at present failed to lay a substantial foundation for the considerations and details of the exclusion mechanism they wish to adopt, regarding, inter alia, the ability of such a mechanism to provide an answer to the concerns indicated above. For that reason, we cannot accept their position. We should parenthetically emphasize that we have not ignored the possibility that the ability of an author to manage his works independently in the realm of "new media" might prove to be significant for some authors, including "small" or independent ones. The Internet is a flexible technological platform that is far more accessible to private agents than traditional media. It allows direct, convenient, and relatively easy communication between the rights owner and the individual user and thereby yields more direct patterns of consumption, sometimes dramatically reducing transaction costs and thus enabling "small" authors to profit from their works without the assistance of collective management mechanisms (see: Casey Rae-Hunter, Better Mousetraps: Licensing, Access and Innovation in the New Music Marketplace, Journal of Business & Technology Law 7(1) 35, 39 (2012)). However, this is merely one of many considerations and it has not been argued before us. Thus, for example, in contrast, the ability to exclude "new media" might actually be damaging to small authors in particular given the "dilution" it would generate in the value of blanket licenses. Consequently, as a general rule and as already mentioned, the question of "new media" should be revisited comprehensively as part of the cartel's re-approval at the end of the five-year period allotted to it. This is based on the understanding that one cannot rule out in advance the possibility that a delineated and limited format of "new media" exclusion (insofar as such a format is proposed in the future) might enable interested authors greater independence in the management of their works, without impairing the interests of the public at large, to an extent that will undermine the reasons underlying the cartel's approval.

 

81.       In other words, the precise definition of the "exclusion category" sought in respect of "new media" is likely to have a decisive impact on whether the overall exclusion mechanism yields a balanced result. An important, albeit not the only, aspect of this definition relates to the phenomena of "technology collapse" and "content leakage" that we have already considered. As previously mentioned, a sweeping, generalized definition of "new media" regarding the exclusion ability would yield uncertainty in respect of the scope of the excluded uses, might lead to many users being charged double fees (not only by ACUM but also by authors themselves), and would create a "chilling effect" from the users’ perspective, as they might refrain from including an excluded work in productions intended for "old media" based on their concern that new media marketing will be limited in future. In contrast, a narrower definition of excludable uses, particularly a definition that focuses on uses designated for new media (for example the production of a ringtone based on an existing tune) would help reduce the awkwardness that numerous exclusion possibilities yield, moderate the negative effects of "content leakage" between different technological platforms from the users’ perspective, and reduce the damage caused to their financial interests. In this context, we may add that part of the negative experience accumulated from the operation of the broad exclusion mechanism (in the scope of the Provisional Conditions for ACUM’s activity before their 2009 amendment) resulted from the fact that it granted complete flexibility with regard to the exclusion format and did not consider the significance of the term "new media" nor did it regulate the boundaries of the exclusion options related to it.

 

82.       To complete the picture it should be noted that the issue of excluding rights in "new media" from collective management as part of a cartel's approval in Israel has not arisen for the first time in ACUM’s case. As already mentioned, the Tribunal had authorized in the past the activity of two other collective management corporations that were also considered a cartel – PIL and IFPI. In both cases the conditions for the approval regulate the corporation members’ ability to exclude rights from collective management in accordance with a predetermined "exclusion basket," and include several categories concerning various Internet and mobile phone uses (see: section 3.3 of the conditions for the operation of IFPI and section 2.2 of the conditions for the operation of PIL). Recognition of this is prima facie relevant to the discussion. However, we should consider the fact that both those entities deal with the management of producers rights (the owners of sound recordings), an area which is not identical to the area in which ACUM operates (management of composers, songwriters, and arrangers rights). We expected the parties before us to refer to this comparison – one way or the other – but they failed to do so. Each of them clung to the position of "all or nothing" and sided, respectively, either with a complete exclusion of "new media" or an absolute negation of the ability to exclude new media uses. Thus, the option of excluding "new media" and the conditions for it were not fully addressed.

 

83.       What emerges from all the aforementioned is this: reviewing the implications of excluding "new media" shows that it is not necessarily justified to completely negate the option to exclude works for the purposes of "new media." Nevertheless, there are clear indications that this applies only to a limited exclusion mechanism, which concentrates on certain types of "new media" uses and strives to minimize the harm caused to users. Such an exclusion mechanism cannot be based merely on a technological distinction between "old media" and "new media" which allows a sweeping exclusion of all uses of the latter type – as proposed by EMI Israel and Anana. In any event, examining the possibility of another exclusion category concerning "new media" and fashioning the boundaries of that category should be done with care after studying the positions of all interested parties and all the relevant facts. As aforesaid, this matter is for the Tribunal to consider when the extension of the cartel's approval arises. Our position is also supported by the temporary nature of the approval – for only five years. At the end of that period (two years of which have already passed), the Tribunal will revisit the approval of the cartel, at which time it can also reconsider the scope of the exclusion mechanism's "segmentation," on the basis of five years’ experience with the operation of a "narrow" exclusion mechanism. That experience will join with lessons already learned from the operation of an unlimited exclusion mechanism (as part of the Provisional Conditions) and will help the Tribunal evaluate the possibility of adopting a balanced, intermediate alternative that will permit the exclusion of limited uses for the purposes of "new media," without undermining ACUM’s purpose as a collective management corporation. Presumably, by the time the Tribunal considers the extension of the cartel's approval, international experience on this issue will also be established which will enrich the set of facts before the Tribunal.

 

84.       To sum up, our opinion is that the conditions for the permanent approval should be left as they are for the time being, including the issue of excluding works for the purposes of "new media," based on the assumption that the Tribunal will be able to revisit this issue when the current conditions expire. It should be emphasized that this does not express any substantive holding regarding the result to which the Tribunal should reach on this or any other issue, beyond the general statement that the possibility of permitting a limited, well-defined exclusion of "new media" uses should not be ruled out. On the basis of the up-to-date facts laid out before it, the Tribunal will presumably reach a correct decision regarding the proper and most effective way to do so, insofar as it deems fit to follow such path.

 

Conclusion

 

85.       The appeals before us revolved around ACUM’s activity, yet they necessitated a broad discussion with regard to the collective management of copyright, considering not only the complexity of jointly owned works that derive from the talents of several authors but also the complexity of the variety of uses in a constantly changing technological world. At the present time we have reached the overall view that according to the facts before us we should not intervene in the conditions attached to the cartel's approval – from the perspective of balancing the proprietary rights of all authors against the public interest of accessibility to works that are part of the general cultural repertoire and it is therefore important to avoid placing substantial barriers to their use. We have not ruled out the possibility that in future the proper balance between authors’ rights and the public interest might dictate a different result with respect to integrating the distinction between different types of "new media" and "old media" in the rights exclusion mechanism. To a great extent, this issue represents the challenge of collectively managing rights in the modern era with its changing technological and business environment, where the practice of collective management is more essential than ever but also raises more serious difficulties and complexities than ever. The answer to these challenges (both with regard to "the segmentation mechanism" and with regard to other matters discussed before us) lies in a delicate, changing balance between the relevant interests. As we have mentioned, this balance might be affected by changes in technological platforms and business practices, by studying new information, and by lessons derived from ACUM’s activity in Israel and the operation of collective management corporations worldwide.

 

86.       In conclusion, I would suggest to my fellow justices to dismiss both appeals. ACUM would bear the Director-General's costs in the amount of NIS 20,000. EMI Israel would bear the Director-General's costs in the amount of NIS 40,000 and Partner's costs in the amount of NIS 10,000.

Justice Z. Zylbertal

 

I concur.

 

Justice E. Rubinstein

 

A.        I concur with the comprehensive opinion of my colleague, Justice Barak-Erez.

 

B.        Without wishing to gild the lily, I would like to add brief remarks. We are dealing with ACUM, a special entity established in 1936, during the British Mandate, to protect the rights of authors and artists in their intellectual property and it is as though it has always been a fundamental Israeli institution. Indeed, perhaps if we could start over today it would have been possible to think of other ways of organization for this purpose, not necessarily a private company, but such is the situation we are facing, in which we are called upon to have our say. However, even given the current situation, the challenges of dealing with the rights of those in need of ACUM’s services are ever-changing, especially with the dynamic technology, and it is not without reason that my colleague qualified the second part of her opinion with regard to the exclusion mechanism, by looking to the future.

 

C.        With regard to public directors, the Tribunal was indeed right in its decision. In my opinion, the more the better, provided that these directors do their work faithfully as agents of the public and it is to be hoped that this is the norm, in which case the financial expense involved is justified. Regarding their duties, see Prof. J. Gross, Directors and Officers in the Era of Corporate Governance (Second Edition, 2011) Chapter I, p 1 et seq and the references there; and see also Amendment No. 8 to the Companies Law (2008) with regard to the possibility of appointing independent directors; I. Bahat, Companies, 12th edition, 5771-2011, 386. My colleague described in detail the circumstances of this case but also added notes drawn from general public law, namely when a particular entity appears to be hybrid, and as derived from this analysis – the fact that ACUM is similar to that model in view of its duties to the public, without deeming it necessary to rule that it is indeed a hybrid entity. I myself would tend to say that we are indeed dealing with a hybrid entity, whether we take a relatively narrow view of it, through the eyes of its direct beneficiaries, or a broader view of the general population of users; see also my comments in ALAA 1106/04 Haifa Local Planning and Building Committee v. The Electric Corporation (2006), paras. C and D.

 

D.        The author A. Harel in his work Hybrid Entities – Private Entities in Administrative Law (5768) enumerates (pp 118-125) criteria for analyzing the hybrid nature of an entity, including a vital public function, providing a service to the public, not-for-profit activity, a monopoly, the concentration of great power that might be abused, and functional public funding. When dealing with a monopoly, as in the case before us, although ACUM is incorporated as a private company, it is painted in bold colors of hybridity, in particular considering the narrow choice given to individuals (ibid, 115). Indeed, in a rapidly changing world of varied technological possibilities for using works, the interest of authors and artists, as well as the general public, is one of fairness towards everyone; see also D. Barak-Erez, Citizen, Subject, Consumer and Government in a Changing Country (2012), 119, 121, who characterizes an entity as hybrid, when, inter alia, it serves as an actual substitute for government involvement. In the case before us, as implied above, the matter could have presumably been dealt with through a regulatory framework and this component justifies, in my view, a thorough discussion of the issue of public representatives. Indeed, before us is a private company, yet this is merely its framework and shell while its content is significantly broader; even the name attests to its belonging to the public realm – the Association of Composers, Authors and Publishers. ACUM's articles of association (as last approved on July 21, 2013 according to its website) include external directors and the controversy consists merely of their number. According to its website, ACUM presently has approximately 7,500 author members; don’t they deserve extensive protection against a potential clash of interests between various groups within the company?

 

E.         Now a few words on the role of external directors, which is the current legal term, or public directors; as we know, the Companies Law, 5759-1999 refers to an external director (article five, sections 239 et seq) but the literature uses this expression interchangeably with public director, as it was termed in the Companies Ordinance (section 96(b)(c)). Indeed, according to the learned author J. Gross (Directors and Officers in the Era of Corporate Governance (2011) 92), the external director "does not represent the regulator or the general public. He owes a fiduciary duty to the company and to it alone and he only has to bear the interest of the company in mind"; and see also Dr. O. Haviv-Segal, Company Law (2007) 438. However, even if this narrow definition is correct in principle, without going into a comprehensive discussion, the current case involves a special instance of a "private-non-private" company, which does not strive to maximize its profits. In this context, see by analogy the statement by Haviv-Segal, ibid, about the external director’s function in restraining "opportunistic behavior" by a controlling shareholder or management: "in this respect the external director can be regarded as the representative of the public shareholders on the company's board of directors." We should also mention (Gross, p 93) that the external director "brings with him knowledge, experience, and objective judgment and might balance the various views within the company, especially when the board of directors is made up of several cohesive groups"; he is "removed from the shareholders' personal interests… can express objective opinions in cases where differences have arisen between various groups in the company and balance the different interests in the company…". By analogy, this statement is presumably consistent with the present case, despite ACUM's "private" corporate framework. Therefore, the external directors have a particularly important role from the broad, overall perspective of the interests of ACUM's members generally as well as the public at large; see also Hadara Bar-Mor, Corporate Law III (5769-2009) 307-309. Thus, we should not intervene in the ruling of the Tribunal on this matter.

 

Regarding my colleague's remarks concerning the rights exclusion mechanism and old and new media, what can be inferred from them is a lesson in complexity and arbiter humility. We are dealing with money and maximizing authors’ benefit but the question is whether the baby won’t be thrown out with the bathwater. My colleague pointed out the difficulties and her conclusion is that more experience and study is necessary in order to reach a proper balance (see para. 82). My sense is that this appears difficult and challenging; the technological means are constantly changing before our very eyes, along with their implications to the issue before us, and hence solutions are likely to be short-lived. The regulator, the Director-General of the Antitrust Authority, has an extremely important role in this respect since the Tribunal has only what its eyes can see, while the Director-General is equipped with available monitoring tools. Finally, this summer I have had the opportunity to serve as a "secondary partner" in three intellectual property decisions. Their common denominator is the complexity caused by time, complexity of different types, technological and economic. Studying the fascinating collection CopyrightReadings in Copyright Law (M. Birnhack & G. Pesach, 5769-2009) reveals a variety of insights that will concern us a great deal in the future. Apart from the need to plough through the specific material, the constant changes, perhaps more than in any other area of civil law, also place the courts, and equally so – the regulatory entities, under weighty responsibility. The tension between property and competition, and between the long, short and medium term, poses real challenges. The professionalism of the regulators – be it the Patent Office or, as aforesaid, the Director-General of the Antitrust Authority – helps courts in making their rulings but does not relieve them of their responsibility. In these matters comparative law may also be useful. The bottom line is that this judgment ought to be a starting point for lessons to be learned; over, but not done.

 

Held as per the opinion of Justice D. Barak-Erez

 

September 3, 2013 (Elul 28, 5773)

Full opinion: 

Hass v. IDF Commander in West Bank

Case/docket number: 
HCJ 10356/02
Date Decided: 
Thursday, March 4, 2004
Decision Type: 
Original
Abstract: 

Facts: The Machpela Cave is believed to be the burial site of Abraham and Sarah, Isaac and Rebecca, Jacob and Leah. As such, it is holy to Jews and Moslems. Over the years, the site has seen acts of violence by members of one religion against the other, resulting in casualties.

On Sabbaths and festivals, large numbers of Jews, sometimes in the thousands, go from the nearby town of Kiryat Arba to the Machpela Cave on foot, since the use of vehicles is prohibited by Judaism on these days. They go to the Cave  by means of the ‘worshippers’ route,’ a narrow passage that is not wide enough for security or rescue vehicles to pass in case of a terrorist attack.

 

The IDF commander in Judaea and Samaria decided to widen the worshippers’ route, and for this purpose he made an order to requisition private land and to demolish certain buildings along the route. The petitioners challenged the constitutionality of this order.

 

Held: In view of the constitutional importance of the freedom of religion and the freedom of worship, a certain violation of property rights may be allowed to facilitate the freedom of worship. The buildings scheduled for demolition are uninhabited, and the widening of the route was kept to the absolute minimum, to allow only unidirectional traffic. In these circumstances, the requisition order satisfies the test of constitutionality.

Voting Justices: 
Primary Author
majority opinion
majority opinion
majority opinion
Full text of the opinion: 

HCJ 10356/02

1.       Yoav Hass

2.       MK Musi Raz

3.       ‘Yesh Gevul’ Movement

v.

1.       IDF Commander in West Bank

2.       State of Israel

 

HCJ 10497/02

Hebron Municipality and others

v.

1. Major-General Moshe Kaplinsky, IDF Commander in Judaea and Samaria

2.       Civilian Administration for Judaea and Samaria

3.       Government of Israel

 

 

The Supreme Court sitting as the High Court of Justice

[4 March 2004]

Before President A. Barak and Justices M. Cheshin, A. Procaccia

 

Petition to the Supreme Court sitting as the High Court of Justice

 

Facts: The Machpela Cave is believed to be the burial site of Abraham and Sarah, Isaac and Rebecca, Jacob and Leah. As such, it is holy to Jews and Moslems. Over the years, the site has seen acts of violence by members of one religion against the other, resulting in casualties.

On Sabbaths and festivals, large numbers of Jews, sometimes in the thousands, go from the nearby town of Kiryat Arba to the Machpela Cave on foot, since the use of vehicles is prohibited by Judaism on these days. They go to the Cave  by means of the ‘worshippers’ route,’ a narrow passage that is not wide enough for security or rescue vehicles to pass in case of a terrorist attack.

The IDF commander in Judaea and Samaria decided to widen the worshippers’ route, and for this purpose he made an order to requisition private land and to demolish certain buildings along the route. The petitioners challenged the constitutionality of this order.

 

Held: In view of the constitutional importance of the freedom of religion and the freedom of worship, a certain violation of property rights may be allowed to facilitate the freedom of worship. The buildings scheduled for demolition are uninhabited, and the widening of the route was kept to the absolute minimum, to allow only unidirectional traffic. In these circumstances, the requisition order satisfies the test of constitutionality.

 

Petitions denied.

 

Legislation cited:

Basic Law: Human Dignity and Liberty, ss. 3, 8.

Palestine Order in Council, 1922, art. 83.

Protection of Holy Places Law, 5727-1967, s. 1.

 

Israeli Supreme Court cases cited:

[1]      HCJ 4212/02 Gussin v. IDF Commander [2002] IsrSC 56(4) 608.

[2]      HCJ 7015/02 Ajuri v. IDF Commander in West Bank [2002] IsrSC 56(6) 352; [2002-3] IsrLR 83.

[3]      HCJ 393/82 Jamait Askan Almalmoun Altaounia Almahdouda Almasaoulia Cooperative Society v. IDF Commander in Judaea and Samaria [1983] IsrSC 37(4) 785.

[4]      HCJ 6860/01 Hamada v. Israel Insurance Pool [2003] IsrSC 57(3) 8.

[5]      HCJ 3286/00 Association for Civil Rights in Israel v. IDF Commander in Judaea and Samaria (unreported).

[6]      HCJ 2461/01 Canaan v. IDF Commander in Judaea and Samaria (unreported).

[7]      HCJ 591/88 Taha v. Minister of Defence [1991] IsrSC 45(2) 45.

[8]      HCJ 2717/96 Wafa v. Minister of Defence [1996] IsrSC 50(2) 848.

[9]      HCJ 69/81 Abu Ita v. Commander of Judaea and Samaria [1983] IsrSC 37(2) 197.

[10]    HCJ 24/91 Timraz v. IDF Commander in Gaza Strip [1991] IsrSC 45(2) 325.

[11]    HCJ 401/88 Abu Rian v. IDF Commander in Judaea and Samaria [1988] IsrSC 42(2) 767.

[12]    HCJ 834/78 Salama v. Minister of Defence [1979] IsrSC 33(1) 471.

[13]    HCJ 302/72 Hilo v. Government of Israel [1973] IsrSC 27(2) 169.

[14]    HCJ 619/78 El Talia Weekly v. Minister of Defence [1979] IsrSC 33(3) 505.

[15]    HCJ 1005/89 Agga v. IDF Commander in Gaza Strip [1990] IsrSC 44(1) 536.

[16]    HCJ 5016/96 Horev v. Minister of Transport [1997] IsrSC 51(4) 1; [1997] IsrLR 149.

[17]    HCJ 390/79 Dawikat v. Government of Israel [1980] IsrSC 34(1) 1.

[18]    HCJ 5688/92 Wechselbaum v. Minister of Defence [1993] IsrSC 47(2) 812.

[19]    HCJ 987/84 Euronet Golden Lines (1992) Ltd v. Minister of Communications [1994] IsrSC 48(5) 412.

[20]    HCJ 72/86 Zaloom v. IDF Commander for Judaea and Samaria [1987] IsrSC 41(1) 528.

[21]    HCJ 469/83 Hebron National United Bus Co. Ltd v. Minister of Defence (unreported).

[22]    HCJ 4363/02 Zindah v. IDF Commander in Gaza Strip (unreported).

[23]    HCJ 448/85 Dahar v. Minister of Interior [1986] IsrSC 40(2) 701.

[24]    HCJ 2481/93 Dayan v. Wilk [1994] IsrSC 48(2) 456; [1992-4] IsrLR 324.

[25]    HCJ 1514/01 Gur Aryeh v. Second Television and Radio Authority [2001] IsrSC 55(4) 267.

[26]    HCJ 650/88 Israel Movement for Progressive Judaism v. Minister of Religious Affairs [1988] IsrSC 42(3) 377.

[27]    HCJ 3267/97 Rubinstein v. Minister of Defence [1998] IsrSC 52(5) 481; [1998-9] IsrLR 139.

[28]    HCJ 292/83 Temple Mount Faithful v. Jerusalem District Police Commissioner [1984] IsrSC 38(2) 449.

[29]    HCJ 7128/96 Temple Mount Faithful v. Government of Israel [1997] IsrSC 51(2) 509.

[30]    HCJ 2390/96 Karasik v. State of Israel [2001] IsrSC 55(2) 625.

[31]    CA 5546/97 Kiryat Ata Local Planning and Building Committee v. Holtzman [2001] IsrSC 55(4) 629.

[32]    LCA 214/88 Tawil v. Deutch [1990] IsrSC 44(3) 752.

[33]    HCJ 270/87 Kando v. Minister of Defence [1989] IsrSC 43(1) 738.

[34]    HCJ 153/83 Levy v. Southern District Commissioner of Police [1984] IsrSC 38(2) 393; IsrSJ 7 109.

 

For the petitioners in HCJ 10356/02 — Y. Arnon, Y. Niv.

For the petitioners in HCJ 10497/02 — S. Licker.

For the respondents — Y. Gnessin.

 

 

JUDGMENT

 

 

Justice A. Procaccia

The question

1.    The Jewish inhabitants of Kiryat Arba wish to realize their right to pray at the Machpela cave, which is regarded as a holy site by Judaism and Islam. Pedestrian access from Kiryat Arba to the Machpela Cave passes along a route that is approximately 730 metres long (hereafter — ‘the worshippers’ route’). A large number of pedestrians — men, women and children — pass along this route every Sabbath and festival on their way to pray at the Machpela Cave. In the area adjacent to the worshippers’ route, murderous attacks were made in recent years by terror organizations. Because of the security risk that threatens the pedestrians on the route, the IDF Commander in Judaea and Samaria (hereafter — ‘the area commander’) wishes to adopt various measures to improve the security of those passing along the route. For this purpose, he wishes, inter alia, to widen the path in the northern part of the route and to protect it in various ways. He also wishes to widen the path at the southern part by the Machpela Cave in order to allow security and rescue vehicles to pass, something which is currently impossible because of the narrowness of the path. In order to widen the path along the route, it is necessary to requisition areas of land along the route, and to carry out a partial demolition of two buildings and part of an additional building that are situated in the southern part of the route and are uninhabited. In order to give effect to these measures, the area commander issued a requisition and demolition order. The legality of this action by the area commander is subject to judicial review in this proceeding. We will examine the scope of his authority to issue the order, and we will consider in this regard the question of the relationship between the worshippers’ right of movement and worship  and the property right of the owners of the land situated in the area of the order.

Background

2.    On Friday evening, 15 November 2002, shots were fired by a terrorist cell at the security forces and worshippers who were walking along the worshippers’ route from Sabbath prayers at the Machpela Cave to their homes in Kiryat Arba. In the battle that ensued between the terrorists and the security forces at the site, twelve security personnel from the IDF, the Border Police and the Kiryat Arba Duty Unit were killed. As a result of this event, and against the background of several previous terror incidents that occurred near that place, the area commander decided to adopt measures to increase the level of security on the worshippers’ route in order to protect the safety and lives of those using it on the way to prayers. The main steps were widening the path and carrying out actions required for this purpose. In order to carry out this plan, on 29 November 2003 the area commander issued an ‘Order for the Requisition of Land’ (hereafter — ‘the requisition order’), in which he ordered the requisition of parcels of land lying adjacent to the route, and the destruction of several buildings along the path. Originally, the order was intended to allow the following measures to be carried out: in the northern part of the route (which extends from the ‘Pishpesh’ route to the crossroads of the ‘Zion,’ ‘Erez’ and ‘Goren’ routes) — building a concrete defence wall to protect the worshippers against flat-trajectory shooting from the east and also widening the road for the purpose of paving a walkway for pedestrians that will be protected by a concrete barrier whose purpose is to prevent pedestrians from being trampled by a vehicle travelling on the road. At the junction itself, a change is planned in the level of the routes crossing it, in order to prevent an obstruction of vehicles at the junction, which in itself creates a security risk. The southern part of the route is a very narrow passage that passes mainly by the houses of the eastern casba of Hebron, and it leads to the Machpela Cave. This passage, because of its narrowness, does not allow vehicles to transverse it. Along it there are abandoned buildings that may be used as a refuge for terrorists and may endanger the lives of pedestrians that pass by, sometimes in their thousands, on their way to prayers. Here the original order planned a widening of the passage to a total width of eight metres, in order to allow the passage of military vehicles and rescue vehicles for the purpose of accompanying and protecting the worshippers, and for the purpose of rescue in case of an attack. In order to allow such a widening, it planned the destruction of approximately 13 abandoned buildings that are situated alongside the route. The order was for a limited time.

The petitions

3.    Before us are two petitions against the requisition order. In one petition the petitioners are the ‘Yesh Gevul’ Movement and some of its activists, and in the other petition the petitioners are the Hebron Municipality, the Hebron Buildings Renovation Association, and a group of owners of rights in the land included in the requisition order. The petitions attack the legality of the requisition order and allege that it is unreasonable in the extreme and disproportionate in view of the purpose for which it was made, in view of the severe harm to the property of the owners of rights in the land along the route and in view of the planned harm to the buildings which have an unique archaeological value. It is alleged that the order was issued by the area commander for improper reasons, and the security reason that was given for making the order is a smokescreen for a predominantly political motive whose main purpose is to create territorial continuity between Kiryat Arba and the Machpela Cave by means of establishing a promenade that will, in the future, allow the expansion of Jewish settlement in the area. In this regard, it was alleged that there is no real objective connection between the attacks that occurred in the area and the measures planned within the framework of the requisition order, including the demolition of the houses, and since the area governed by the order was previously declared a closed military area and was emptied of its inhabitants, it is not required for security purposes. The petitioners from among the inhabitants of Hebron emphasized in their arguments that the implementation of the order is likely to lead to the destruction of an important part of the historical city of Hebron, which includes buildings from the Mamluk period and other houses intended for conservation, and that the antiquities law that applies in the area does not allow such activities for archaeological reasons. This claim was supported in a professional opinion given by persons involved in the conservation of ancient buildings and in an expert architectural opinion.

It was also argued by the petitioners that the requisition of the land and the demolition of the buildings governed by the order is contrary to international law that requires the area commander to exercise his authority to ensure order and security in the occupied area within the framework of article 43 of the Hague Convention of 1907 (hereafter — the ‘Hague Convention’) and is contrary to article 53 of the Geneva Convention Relative to the Protection of Civilian Persons in Time of War, 1949 (hereafter — the ‘Geneva Convention’) which prohibits the destruction of the real estate assets of civilians in an occupied area unless this action is essential and required for military operations. The requisition order is also contrary to the international law that governs the conservation of archaeological assets. According to their position, the order also does not satisfy Israeli constitutional law, because it results in an unbalanced result when weighing the right of the worshippers to realize their freedom of religion and worship against the right of the landowners along the route, who are entitled to protection of their property. The owners of the property rights among the petitioners also argue that their right to be heard and to challenge the legality of the order before the area commander was not upheld.

The original position of the State

4.    In the original response of the State to the petitions, it was argued that the sole purpose of the requisition order was security-oriented, and it did not serve as a disguise for achieving any other purpose. It was made in direct response to the continuing risk of terrorist acts, which consistently threatened the Jewish inhabitants who used the worshippers’ route, and in view of the responsibility of the IDF commander to ensure their safety. In order to increase security measures along the route, discretion was exercised carefully and various alternative ways were considered for the pedestrian passage of worshippers to the Machpela Cave on Sabbaths and festivals, and the most strenuous efforts were made to minimize, in so far as possible, the harm to the local inhabitants and the owners of rights in the land adjoining it. Eventually it was found that using the route was the most appropriate solution, as compared with the other options, in view of security needs on the one hand, and the need to restrict the extent of the harm to the local inhabitants on the other.

In response to the petitioners’ claim that their right to challenge the order before the area commander was not upheld, it was argued that the proper steps were taken to make the requisition order known to the owners of rights concerned. A reasonable period of time was allowed for submitting objections, but no such objections were submitted during the time allocated for this before the filing of the petitions.

In the normative sphere, it was argued that the authority of the military commander to requisition land in the occupied area is based on article 43 of the Hague Convention, which establishes a duty to maintain security in the occupied area, and on the proviso in article 23(g) of the Convention which provides a qualification to the prohibition against the demolition of enemy property when this is required for combat purposes. Article 52 of the Hague Convention allows land to be requisitioned for the purpose of ensuring order and public security even when there is no combat, and this also serves as a basis for the action that was carried out. The duty to conserve cultural assets that is enshrined in international law does not preclude recognition of urgent security needs that in certain circumstances override the duty to conserve cultural assets as aforesaid. By virtue of these sources, the area commander is authorized, and even obliged, to protect the security of the pedestrians on the worshippers’ route, and the making of the requisition order falls within this authority and responsibility. This order satisfies the constitutional test in view of the security needs required along the route within the framework of the worshippers’ right of worship, and the inevitable harm to the property of the petitioners as a result is proportionate in view of the fact that we are concerned with buildings that were abandoned some time ago, and in view of the existence of a right to financial compensation for this injury. The action of the IDF commander reflects a proper balance between the various values involved in this case, and it is essential to the public interest, it is reasonable and proportionate, and there are no grounds for intervention in order to change it.

The sequence of proceedings

5.    On 18 December 2002, an order nisi was made in the petitions, whereas an interim order that prohibited the demolition of buildings in accordance with the requisition order was restricted so that it would not apply to the northern part of the route up to the crossroads. Within this framework, additional time was given to the owners of the rights to object to the requisition order. Of the 13 owners of rights in the houses that were schedules for demolition under the original order objections were filed with regard to six buildings. One building that was found to be inhabited was excluded from the requisition order.

Before a decision was made with regard to the petitions, the area commander was asked by the court to reconsider other possibilities for the plan of action under the original order, in order to minimize the harm that it was expected to cause the inhabitants of the neighbourhood, such as sealing houses instead of demolishing them, stationing soldiers in order to protect the route when pedestrians pass, directing worshippers to an alternative route, and the like.

Approximately six months after the decision of the court in this respect, the State gave notice, first, that other possibilities for the pedestrian route of worshippers to the Machpela Cave that do not use the worshippers’ route were reconsidered. These were found to be unsuitable, either because they involve too great a risk to the pedestrians, or because preparing the route requires greater harm to the property owners, or because they involve a risk of increasing friction between the Jewish worshippers and the Muslims who come to pray in the Cave. The great risk involved in such friction was discussed in the Report of the Commission of Inquiry on the Massacre at the Machpela Cave in Hebron (hereafter — ‘the Shamgar Commission Report’). In the opinion of the area commander, these defects make the other possibilities for the pedestrian route of the worshippers to the Machpela Cave on Sabbaths and festivals unsuitable, and the worshippers’ route remains the most reasonable option from the viewpoint of the conditions of the terrain and the scope of the measures required in order to safeguard the area.

In such conditions, the area commander decided that there was no alternative to increasing the security of the worshippers’ route itself as the pedestrian route for large numbers of pedestrians, and that for this purpose the requisition order was needed. He also decided, after a reconsideration, that the stationing of soldiers at security positions or the sealing of houses was insufficient, and the widening of the route and the unavoidable demolition of a small number of buildings were required. Notwithstanding, after a reconsideration, it was decided to reduce significantly the scope of the harm to the owners of the property in the area, as compared with the original requisition order. While the original order refers to the widening of the route to a total width of eight metres, according to the revised position a widening of the route to a total width of only 4 metres is sufficient. This width provides the minimum required to allow the passage of security vehicles in one direction. Even though, in the opinion of the area commander, such a minimal widening of the route involves a certain security risk in that it does not allow two-directional traffic of vehicles along the route, he is currently prepared to be satisfied with a more limited widening of the route that will allow only unidirectional traffic, in order to minimize the damage to the owners of the lands adjacent to the route. The reduction of the width of the route also involves a significant reduction in the number of structures that are scheduled for demolition. Whereas the original plan spoke of the demolition of 13 buildings, today the plan calls for a partial demolition of two buildings and a part of a third building that are situated at the ends of the route and are abandoned. The demolition will be carried out under professional supervision to protect, in so far as possible, important archaeological foundations and to restrict the extent of the harm to the buildings to a minimum. It is also planned to seal entrances to additional uninhabited buildings along the route, to install nets in inhabited buildings, to pave a part of a path that has not yet been paved in order to safeguard against the laying of mines, and to place lamp posts and guard posts along the route. With regard to the northern part of the route, the State undertook not to extend the route to more than two metres from the two sides of the road (court record of 23 November 2003). In order to make the aforesaid revisions to the original plan, an appropriate amendment of the requisition order was required.

The essence of the order in its limited format as it is brought before us for review is, therefore, the following: in the northern part of the route — widening of the road to an amount of two metres from each side; in the southern part of the route — widening the road to a total width of four metres; a partial demolition of two buildings and a part of an additional building; the requisition of parcels of land alongside the route, as required for the purpose of widening it.

Decision

Right to be heard

6.    The owners of the rights in the land claim that their right to challenge the validity of the requisition order before the military commander, before they filed their petition, was not upheld.

No-one disputes the existence of a right to be heard that is available to anyone who may be harmed by an executive act. There is no need to expand upon the importance of this right, which is firmly rooted in Israeli administrative law. However, in the circumstances of this case, the right of the petitioners to be heard was not violated. The order, according to its wording, regulates the details of how it should be published and the ways in which it should be delivered to the owners of the rights who may be harmed by its provisions. The provisions of the order were carried out in this respect. The requisition order was distributed in the area designated for the requisition, and it was affixed to each of the buildings scheduled for demolition. It was delivered to the mayor of Hebron and the legal adviser of the municipality. Copies of the order were deposited at the Hebron liaison office and at the other offices of the competent Israeli and Palestinian authorities in the area. The fact that the order had been made was announced in the media. In addition, a tour of the route in the order was made, with the participation of military personnel and representatives of the owners of the rights in the land, and time was given to those persons who were likely to be harmed to challenge the order before the area commander. Before filing the petitions, no challenges were filed within the time period fixed for this. Within the framework of the hearing of the petitions, additional time was given to the petitioners to file their challenges. At this stage of the proceedings, challenges were filed with regard to some of the buildings scheduled for demolition under the original plan. These challenges were examined by the State. In view of the aforesaid facts, the petitioners’ right to be heard and to file objections was satisfied within the framework of this proceeding.

Legality of the requisition order

7.    The requisition order that was made involves the requisition of private land and the demolition of buildings, and it constitutes a legal act that harms the petitioners’ property rights. The legality of this act should be examined within the framework of international law, local law and Israeli law that all apply to the actions of the area commander (HCJ 4212/02 Gussin v. IDF Commander [1], at p. 609; HCJ 7015/02 Ajuri v. IDF Commander in West Bank [2], at p. 382 {117-118}).

The question that must be answered is whether the requisition order, in its reduced version, satisfies the criteria required for its legality, or whether it suffers from a defect that justifies judicial intervention to set it aside or amend it. In considering this question, we will examine the source and scope of the area commander’s authority to make the order under discussion; we will consider whether there is a basis for the petitioners’ suspicion that irrelevant motives led to the making of the order; and we will scrutinize the various values and rights that conflict in this case — freedom of worship and the right of movement, the protection of human life, the protection of private property rights — in order to determine whether these were balanced against each other properly within the framework of the order, and whether the order satisfies the rules of constitutional law.

The area commander’s responsibility and scope of authority

8.    The executive powers of the area commander derive from several sources: the rules of public international law that concern belligerent occupation; the local law that prevails in the area, which is composed of the law prior to the military occupation and new local legislation that was enacted by the military administration; and the principles of Israeli law (HCJ 393/82 Jamait Askan Almalmoun Altaounia Almahdouda Almasaoulia Cooperative Society v. IDF Commander in Judaea and Samaria [3], at para. 10; HCJ 6860/01 Hamada v. Israel Car Insurance Pool [4], at paras. 6-7). Within the sphere of international law, his actions are subject to the laws of war that determine what is permitted and what is prohibited for the commander of a military force who is responsible for an area under belligerent occupation (Ajuri v. IDF Commander in West Bank [2], at p. 358 {87}; HCJ 3286/00 Association for Civil Rights in Israel v. IDF Commander in Judaea and Samaria [5]; HCJ 2461/01 Canaan v. IDF Commander in Judaea and Samaria [6]; Jamait Askan Almalmoun Altaounia Almahdouda Almasaoulia Cooperative Society v. IDF Commander in Judaea and Samaria [3], at p. 793). Within the framework of Israeli law, he is subject, inter alia, to the rules of public law, including the rules of natural justice and administrative reasonableness (HCJ 591/88 Taha v. Minister of Defence [7], at p. 52).

Israel’s belligerent occupation of the occupied territories is subject to the main norms of customary international law that are enshrined in the Hague Convention. The question to what extent the Geneva Convention applies in this sphere has not yet been finally determined, but the humanitarian principles have been adopted de facto by the State and the area commander, and therefore we will assume that they apply in our case (cf. Jamait Askan Almalmoun Altaounia Almahdouda Almasaoulia Cooperative Society v. IDF Commander in Judaea and Samaria [3], at para. 11).

The Hague Convention authorizes the area commander to act in two main spheres: the first is to ensure the legitimate security interest of the occupier, and the second is the ensure the needs of the local population in the area under belligerent occupation. The local population for this purpose includes both the Arab and Israeli inhabitants. The first need is a military need and the second is a civilian-humanitarian need. The first focuses on concern for the security of the military force that is occupying the area, and the second concerns the responsibility for preserving the welfare of the inhabitants. Within the latter sphere, the area commander is responsible not only for maintaining order and ensuring the security of the inhabitants but also for protecting their rights, especially their constitutional human rights. The concern for human rights lies at the heart of the humanitarian considerations that the area commander must consider. According to art. 43 of the Hague Convention, the force in control of the occupied area has the responsibility to take all the steps that it can to re-establish and guarantee, in so far as possible, public order and security in the area, while respecting the law in force in the area, in so far as possible. In carrying out his duty to maintain order and security, the area commander must therefore ensure the essential security interests on the one hand, and protect the interests of the civilian population in the area on the other (Jamait Askan Almalmoun Altaounia Almahdouda Almasaoulia Cooperative Society v. IDF Commander in Judaea and Samaria [3], at p. 794). A proper balance is required between these two focal points of responsibility. Indeed, ‘the laws of war usually create a delicate balance between two magnetic poles: military needs on the one hand, and humanitarian considerations on the other’ (Y. Dinstein, ‘Legislative Authority in the Administered Territories,’ 2 Iyunei Mishpat (1973) 505, at p. 509). In his considerations, the commander must concentrate on the needs of the area; he should not take into account the concerns of the country that holds the area under belligerent occupation, as a result of which he is exercising his authority.

The authority of the area commander to make orders for security needs, including an order concerning the requisition of land, is established both in international law and in Israeli law. These orders are law in Judaea and Samaria (HCJ 2717/96 Wafa v. Minister of Defence [8], at p. 851; HCJ 69/81 Abu Ita v. Commander of Judaea and Samaria [9], at pp. 228-230).

Requisition of land

9.    The requisition of land may be an essential step in the realization of the area commander’s powers and responsibility. It may be required both in order to realize military and security concerns, and in order to realize the duty of the commander to protect the interests of the civilian population in the area.

The laws of war in international law prohibit the requisition or demolition of private property in an area under belligerent occupation unless it is essential for combat purposes. According to article 23(g) of the Hague Convention, the occupying power is forbidden:

‘To destroy or seize the enemy’s property, unless such destruction or seizure be imperatively demanded by the necessities of war’ (emphasis supplied).

Article 52 of the Hague Convention provides that no requisition of land shall be made in an occupied area, except for military purposes. This article has been interpreted broadly in case law as applying also to the need to requisition land in order to establish military positions and outposts, and also in order to pave roads for the purpose of protecting Israeli inhabitants living in the area (HCJ 24/91 Timraz v. IDF Commander in Gaza Strip [10]; Wafa v. Minister of Defence [8], at p. 856; HCJ 401/88 Abu Rian v. IDF Commander in Judaea and Samaria [11]).

Article 53 of the Geneva Convention prohibits the destruction of any real estate or movable property that belongs to an individual or to the State by the occupying force, subject to the following exception:

‘except where such destruction is rendered absolutely necessary by military operations.’

In J. Pictet’s commentary on the Geneva Convention (1958, at p. 302), he explains the nature of the aforesaid reservation as follows:

‘The prohibition of destruction of property situated in occupied territory is subject to an important reservation: it does not apply in cases “where such destruction is rendered absolutely necessary by military operations.” The occupying forces may therefore undertake the total or partial destruction of certain private or public property in the occupied territory when imperative military requirements so demand. Furthermore, it will be for the occupying power to judge the importance of such military requirements. It is therefore to be feared that bad faith in the application of the reservation may render the proposed safeguard valueless; for unscrupulous recourse to the clause concerning military necessity would allow the occupying power to circumvent the prohibition set forth in the convention. The occupying power must therefore try to interpret the clause in a reasonable manner: whenever it is felt essential to resort to destruction, the occupying authorities must try to keep a sense of proportion in comparing the military advantages to be gained with the damage done’ (emphases supplied).

In the spirit of the aforesaid commentary, before he decides to requisition or to demolish civilian property in the occupied territory, the military commander is required by international law to exercise very scrupulous consideration. He is entitled to do this where essential military-security needs so demand, and when the requisition balances proportionately between the importance of the military need and the extent of the damage that is likely to be caused to the property owner by the requisition. Within the framework of this balance, he should consider, inter alia, the existence of alternatives that may prevent any harm to individual rights (Timraz v. IDF Commander in Gaza Strip [10], at para. 4; HCJ 834/78 Salama v. Minister of Defence [11]). The requisition of property as aforesaid will also be possible in exceptional cases where it is required in order to provide essential living requirements of the population living in the area; thus, for example, a need was recognized to requisition private land for the purpose of paving roads and access routes to various places in the area. In exceptional cases, a certain harm to private property may be possible for the purpose of providing a proper defence to other constitutional human rights of the population living in the area, where these conflict with the property right of the individual in a specific case. But it is always a condition for the legal validity of such harm that it satisfies the proper balance test which is required in accordance with the criteria determined by constitutional law.

Alongside the rules of international law, the rules of internal Israeli law that apply to the area commander require that the property of the inhabitants of the area may not be harmed unless such harm is intended to achieve a purpose which falls within his powers, and an essential need makes this necessary. This power, both from the viewpoint of international law and from the viewpoint of Israeli public law, should be exercised for a proper purpose, reasonably and proportionately, after a careful and measured balance between the necessity of the purpose that he wishes to achieve and the nature and scope of the harm involved in achieving it.

10. This court exercises judicial review of the legality of the discretion exercised by the area commander as someone who holds a public office by law. In this review, the court does not replace the discretion of the commander with its own discretion, and it does not make itself an expert in security and military matters in the place of the commander (HCJ 302/72 Hilo v. Government of Israel [13]). Even under international law the military commander has broad discretion to decide the scope of the necessity (C.C. Hyde, International Law (second edition, vol. 3, 1947), at p. 1802). The role of judicial review is to stand on guard and ensure compliance with the legal rules that determine the limits of the area commander’s discretion (Ajuri v. IDF Commander in West Bank [2], at para. 30; HCJ 619/78 El Talia Weekly v. Minister of Defence [14], at p. 512). We must be scrupulous when considering the legality of the discretion exercised by the area commander, including whether the considerations underlying his action are relevant, reasonable and proportionate, in view of all of the circumstances of the given case (HCJ 1005/89 Agga v. IDF Commander in Gaza Strip [15], at p. 539).

Levels of scrutiny of the requisition order’s legality

11. The arguments of the petitioners necessitate an examination of the legality of the requisition order in its restricted format on two levels: first, whether the reason underlying the making of the order is a real security concern, or whether the motive for it is intended to achieve another purpose, such as creating territorial continuity between Kiryat Arba and the Machpela Cave for the purpose of strengthening the Jewish settlement in the area of Hebron.

Second, we must examine to what extent, assuming that the requisition order was made for relevant security reasons, the decision of the commander satisfies the constitutional balance test, in permitting harm to the private property of one person in order to allow proportionate security measures to be adopted for the purpose of helping to achieve the right of worship and prayer of another person at a holy place.

Purpose of the order to increase security measures and irrelevant considerations

12. According to the basic principles of administrative law, an administrative authority is obliged to exercise its powers on the basis of relevant considerations only. It must take into account facts and data that are relevant to the case, including relevant values and principles only. It is prohibited from considering an irrelevant consideration (HCJ 5016/96 Horev v. Minister of Transport [16], at p. 34 {183}; I. Zamir, Administrative Authority, 1996, at pp. 741-742). Taking an irrelevant consideration into account may result in the decision being set aside where it can be assumed that, had the irrelevant consideration not been taken into account, the decision of the authority would have been different (HCJ 390/79 Dawikat v. Government of Israel [17], at p. 20). Identifying the relevant considerations for exercising the authority is based on the purpose of the authorizing legislation (HCJ 5688/92 Wechselbaum v. Minister of Defence [18], at p. 824; HCJ 987/84 Euronet Golden Lines (1992) Ltd v. Minister of Communications [19], at p. 432).

The area commander denies the existence of a concealed political motive for making the order, and insists that the plan to widen the worshippers’ route, requisition the parcels adjacent to the route and demolish the buildings, all of which is included in the order, is essential for security needs and vital for the protection of the lives of the persons using it.

The action of the military commander in making the requisition order has the presumption of administrative propriety as long as no factual basis has been established to the contrary. In our case, no sufficient factual basis has been established for the claim that the considerations of the area commander in issuing the order in its narrow format were motivated by irrelevant considerations and a concealed purpose that is not really the addition of essential security measures on the worshippers’ route. The right of worshippers to walk from Kiryat Arba to the Machpela Cave on Sabbaths and festivals has not been denied. The commander, as the person responsible for the security of the inhabitants and public order in the area, and as the person responsible for protecting the safety of the inhabitants of the area — both Jews and Arabs — is of the opinion that it is essential to increase security measures along the worshippers’ route in order to protect the pedestrians who use it. This position is explained, inter alia, against the background of the large number of persons who use the route, and the major security risks involved in it in view of its topographic characteristics. This position is not prima facie unfounded and it is supported by bitter experience associated with the terror attacks that have occurred in the area of the route and which have claimed human lives. The position of the commander, prima facie, is reasonable from the viewpoint of logic and clear reasoning. No major effort at persuasion is required to prove the existence of a major security risk created by the passage of thousands of pedestrians in an area infamous for terror attacks, whose alleys are so narrow that a vehicle cannot pass along certain parts of them, and abandoned buildings next to it may serve as hideouts for terrorists. These topographic features justify, prima facie, the adoption of measures to increase the security of the pedestrians in the passage. They do not support the claim that an improper, concealed motive is what led to the making of the order. A separate question is to what extent, assuming that it is indeed a security motive that underlies the order, it satisfies the constitutional test as to the manner in which it balances between the freedom of religion and right of worship of the worshippers on the one hand, and the right of private property of the petitioners on the other.

Constitutional balance: realization of the right of prayer and worship in conditions of relative security against a relative violation of the right of private property

13. The essence of the requisition order is the adoption of security measures along the worshippers’ route in order to protect, albeit in a relative degree, the lives of the pedestrians on Sabbaths and festivals. In order to achieve this purpose, a requisition of land is required alongside the route, as well as a partial demolition of two buildings and a part of an additional building which are uninhabited. Is the military commander authorized to make a requisition order for the purpose of increasing the security of the worshippers who use the route, in order to allow them to realize their right to pray at the holy site under conditions of relative security, where this involves a violation of the right of private property, and does this satisfy the constitutional test?

Responsibility of the military commander for the safety of the inhabitants of the area

14. In addition to the responsibility of the area commander to ensure the security of the military force that he commands, he must ensure the safety, security and welfare of the inhabitants of the area. He owes this duty to all the inhabitants, without any distinction as to their identity — Jews, Arabs or foreigners. The question whether the residency of various parts of the population is legal does not come before us today for a determination. Their very residency in the area leads to the duty of the area commander to protect their lives and their human rights. This is part of the humanitarian sphere for which the military force is responsible in a belligerent occupation (HCJ 72/86 Zaloom v. IDF Commander for Judaea and Samaria [20]; HCJ 469/83 Hebron National United Bus Company Ltd v. Minister of Defence [21]; HCJ 4363/02 Zindah v. IDF Commander in Gaza Strip [22]; Gussin v. IDF Commander [1], at para. 6). The duty of the commander to ensure proper living conditions in the area extends to all spheres of life and goes beyond security matters and immediate existential needs. It applies to the varied living requirements of the inhabitants, including medical needs, sanitation, economic concerns, education, social needs and other needs that people require in modern society. It applies also to measures required to ensure ‘growth, change and development’ (Jamait Askan Almalmoun Altaounia Almahdouda Almasaoulia Cooperative Society v. IDF Commander in Judaea and Samaria [3], at para. 26). Within the framework of his responsibility for the welfare of the inhabitants of the area, the commander must also concern himself with providing proper protection for the constitutional human rights of the inhabitants of the area, within the limits that the conditions and circumstances in the area allow. Such protection applies to all the population groups that live there, Jews and Arabs alike. Included among the protected constitutional rights are the rights to freedom of movement, freedom of religion and worship, and property rights. Sometimes this protection requires a decision between conflicting human rights. Such a decision requires a balance that satisfies the constitutional test, namely the existence of a proper purpose and proportionality in the harm to one right in order to allow the relative realization of the other right. In making the requisition order, the area commander is seeking to increase the security measures for pedestrians on the worshippers’ route on their way to the Machpela Cave. Thereby he is seeking to allow the realization of their constitutional right to freedom of religion and worship in conditions that provide protection to life, albeit relatively. In doing so, a relative violation of the petitioners’ private property rights was necessary. Is the balance that was made a proper and proportionate one?

Freedom of movement and freedom of religion and worship

15. The inhabitants of the area have a constitutional right to freedom of religion and worship. This is the case for the Arab inhabitants and it is also the case for the Jewish inhabitants who live there. The inhabitants of the area also have the right of freedom of movement, by means of which it is possible to realize, inter alia, the right of access to holy places. The right of movement and access to holy places is of great constitutional strength (Horev v. Minister of Transport [16], at p. 49 {202-203}; HCJ 448/85 Dahar v. Minister of Interior [23], at p. 708; HCJ 2481/93 Dayan v. Wilk [24], at para. 17 {341}). In this case, the freedom of movement is closely associated with and incorporated in the right to realize freedom of religion and worship. It is a value that is intended to realize the right of Jewish worshippers to go on foot to the Machpela Cave on Sabbaths and festivals.

The freedom of worship as an expression of freedom of religion is one of the basic human rights. It is the freedom of the individual to believe and to act in accordance with his belief, by observing its precepts and customs (HCJ 1514/01 Gur Aryeh v. Second Television and Radio Authority [25], at p. 277; HCJ 650/88 Israel Movement for Progressive Judaism v. Minister of Religious Affairs [26], at p. 381; HCJ 3267/97 Rubinstein v. Minister of Defence [27], at p. 528 {200}). This freedom is related to a person’s realization of his own identity. This freedom recognizes the desire of a believer to pray at a holy site. This recognition is a part of the broad constitutional protection given to the right of access of members of the various religions to the places that are holy to them, and the prohibition against injuring their sensibilities with regard to those places (s. 1 of the Protection of Holy Places Law, 5727-1967). The freedom of religion is regarded as a branch of freedom of expression in the sphere of religious belief. It was recognized by the legislator already in art. 83 of the Palestine Order in Council, 1922, and in the Declaration of Independence, which states that freedom of religion and conscience will be guaranteed to every citizen of the State. This freedom has been recognized in case law as a constitutional basic human right (HCJ 292/83 Temple Mount Faithful v. Jerusalem District Police Commissioner [28], at p. 454; Israel Movement for Progressive Judaism v. Minister of Religious Affairs [26], at p. 381; HCJ 7128/96 Temple Mount Faithful v. Government of Israel [29], at pp. 522-523; Gur Aryeh v. Second Television and Radio Authority [25], at pp. 276-277).

The freedom of religion and worship is granted as a constitutional right to the population living in the territories, both Jews and Arabs. It is regarded as a constitutional right of supreme status that should be realized in so far as possible in view of the conditions prevailing in the territories, while protecting the safety and lives of the worshippers. Increasing the security measures for the pedestrians along the worshippers’ route is intended to allow Jewish inhabitants to exercise their constitutional right to pray at a holy site.

Prayer at the Machpela Cave: a constitutional right of worship of Jews and Moslems

16. According to Jewish, Christian and Moslem tradition, the Machpela Cave is the site where Abraham and Sarah, Isaac and Rebecca, Jacob and Leah are buried, and according to some non-Jewish traditions, Joseph too is buried there. According to the tradition, the building of the Cave is located on a burial plot that Abraham acquired in order to bury his wife, and there all the other patriarchs and matriarchs, with the exception of Rachel, were buried. Historical and archaeological research has not clearly discovered who built the building of the Machpela Cave, although most researchers attribute it to King Herod and associate it with the Idumeans (for an extensive survey of this subject, see the Shamgar Commission Report, supra, at pp. 95 et seq.).

The Machpela Cave was regarded as a holy site and a place of worship already in the period of the Mishnah, after the destruction of the Temple. Praying by Jews at the Cave is recognized today in decisions of the political echelon. In 1967 the government made several decisions regarding the reinstatement of praying by Jews at the Machpela Cave on Sabbaths, and it made arrangements for coordinating the prayers of Jews and Moslems at the Cave, together with proper security measures for protecting Jewish worshippers (Shamgar Commission Report, at pp. 99 et seq.). Later it was decided that Jews would be entitled to enter the Cave also on Friday evening, for the Sabbath Eve prayers. As of 1972, the areas of prayer in the Cave were determined anew in a decision of the government, and the areas for Jewish prayers were extended. This extension resulted from a growth in the Jewish settlement in the area, and the founding of Kiryat Arba, which increased the number of people wishing to pray at the Cave. On 4 August 1975, the government made a decision regulating the arrangements for entering and leaving the Cave, and the division of prayer times in the various areas, in order to reduce friction between Jewish worshippers and Moslem worshippers.

Over the years, the prayers in the Cave have, from time to time, been accompanied by violent friction between Jews and Arabs, which sometimes resulted in loss of life on both sides. The height of these conflicts occurred in the massacre at the Machpela Cave in 1994, when dozens of Moslem worshippers were murdered. Recognition of the Cave as a holy site for both Jews and Moslems led the government and the army, in coordination with the Moslem representatives, to determine arrangements that would allow those who wished to realize the right of prayer at the Cave to do so, whether Moslems or Jews. In this context, security arrangements were made to split the times and places for prayer between believers of the two religions, with the intention of ensuring that the basic rights of prayer of the two sides would be upheld (Shamgar Commission Report, at pp. 107 et seq.). After the massacre at the Machpela Cave, the Commission of Inquiry recommended that the arrangements for prayers at the Cave for members of the two religions should be maintained, with particular care to separate Jews and Moslems physically for security reasons, and with a reinforcement of security measures that were intended to protect the worshippers of the two religions against attacks of one group against the other.

The main conclusions of the Shamgar Commission concerned the prayer and security arrangements required in the precincts of the Cave itself. This case involves similar issues in the sense that it concerns aspects of the security of the Jewish worshippers on their way to the Cave, as a part of the realization of their right to freedom of worship at a holy site. But the premise is that freedom of religion and worship is not an absolute freedom but only a relative one. A balance must be found between it and other rights and values that are worthy of protection, including the value of private property (per President Barak in Temple Mount Faithful v. Jerusalem District Police Commissioner [28], at p. 455; A. Barak, Legal Interpretation, vol. 3, at p. 225). Against this background, the question before us is whether the need to ensure the safety of the worshippers justifies taking measures that include the requisition of land and the demolition of houses that are privately owned.

Property rights

17. The right of private property in the land and buildings that are the subject of the requisition order is a protected constitutional right. It is recognized in international law, including in the Hague Convention and Geneva Convention. It has achieved a constitutional status in Israel in s. 3 of the Basic Law: Human Dignity and Liberty (HCJ 2390/96 Karasik v. State of Israel [30] at pp. 712, 716; CA 5546/97 Kiryat Ata Local Planning and Building Committee v. Holtzman [31], at p. 641). The individual’s property right does not cease to exist even in wartime (Gussin v. IDF Commander [1], at para. 4). The right of property has additional weight when it concerns a person’s home (LCA 214/88 Tawil v. Deutch [32], at p. 754). In this case, we are not dealing with homes that are inhabited, since the buildings that are scheduled for demolition were abandoned years ago. We are dealing with buildings with an archaeological value whose historical value should be protected (HCJ 270/87 Kando v. Minister of Defence [33], at p. 742). The area commander has a duty, under the rules of international law, including the Hague Convention for the Protection of Cultural Property in the Event of Armed Conflict, 1954, to protect the cultural treasures in an occupied territory, including assets of archaeological value. He must act in this matter in accordance with the basic principles of administrative law.

            A person’s right to property is not an absolute right. It is a relative right. It may be violated where other desirable social purposes need to be promoted, and these include the advancement of different constitutional basic rights of others (Ajuri v. IDF Commander in West Bank [2], at p. 365 {97}). What is the scope of the violation that is permitted to the property right as a constitutional right in such a conflict of rights?

            Two-stage balance: first stage — freedom of religion and worship versus the value of protecting human life; second stage — the freedom of worship versus the value of protecting private property

            18. A confrontation between conflicting constitutional rights is usually a direct and frontal confrontation that requires balancing and weighing in one stage. But sometimes the conflict is more complex, and it may involve not only a conflict between constitutional human rights but also a conflict between them and between another general social value — such as the value of preserving public safety and security, which, in the circumstances of the case, enters into the required balancing process. In such a case, a need may arise for a two-stage balancing between the rights and values in order to decide the question whether the administrative act satisfies the constitutional criteria. The case before us is an example of the latter possibility. It first raises the question as to what is the proper method of balancing the right of the worshippers to realize the freedom of prayer at a holy site against the value of protecting human life which the area commander is responsible to protect. If, within the framework of this balance, it transpires that in the circumstances of a given case there is no possible proper balance between the freedom of worship and the value of protecting life, then the latter value prevails and the right of worship gives way on account of the importance of the value of life. However, if it transpires that it is possible in the circumstances of a certain case to find a balance between the aforesaid constitutional right and the value of protecting human life by adopting increased security measures, then a second question arises as to whether the violation of another constitutional right such as the right of private property, which is necessitated within the framework of those measures, satisfies the rules of constitutional balancing in its conflict with the right of prayer at a holy site.

            The first stage of the balancing: the right of worship versus the value of protecting human life

            19. Realization of a constitutional right may involve a danger to public safety and security. This risk also includes a risk to the safety and security of someone who wishes to realize the constitutional right. There exists an obvious public interest in maintaining order and security in society. This as an essential condition for protecting life and human existence. The protection of human life is a condition for realizing individual rights and therefore this protection is of greater importance than the constitutional right, where there exists a real probability, in the sense of a ‘near certainty,’ that realizing the right will lead to serious harm to public safety (per President Barak in Temple Mount Faithful v. Jerusalem District Police Commissioner [28], at p. 454). The public interest in protecting human life affects the scope of the constitutional right and its relative importance vis-à-vis other values. Where the realization of the constitutional right will lead to a near certainty of serious harm to public safety, the constitutional right will give way to public safety (Dayan v. Wilk [24], at p. 472 {341-342}). This has been held for many years with regard to the right of Jews to pray on the Temple Mount in Jerusalem, when it was found that realization of the right de facto would almost certainly lead to an eruption of large-scale disturbances, which might become uncontrollable, both in Israel and abroad.

            But the existence of a risk to public order and security that can be anticipated from the realization of the constitutional right does not justify, in every case, the absolute denial of its realization. We should aim, in so far as possible, to achieve a proper balance between the needs of protecting public safety and the value inherent in the realization of the constitutional right, by creating an infrastructure of measures that will reduce the likelihood of the harm. The need and ability to make such a balance derive, on the one hand, from the strength of the constitutional right of the individual, and, on the other hand, from the range of measures available to the competent authority to satisfy the needs of public order and security, which are required as a precondition for realizing the constitutional right.

            The freedom of religion is a constitutional basic right of the individual, with a preferred status even in relation to other constitutional human rights. The freedom of worship constitutes an expression of freedom of religion, and it is an offshoot of freedom of expression. ‘A person expresses himself within the sphere of religious belief by means of religious worship’ (per Justice Zamir in Temple Mount Faithful v. Government of Israel [29], at pp. 522-523). The constitutional protection given to freedom of worship is therefore similar, in principle, to the protection given to freedom of speech, and the constitutional balancing formula that befits the one is also applicable to the other (Temple Mount Faithful v. Jerusalem District Police Commissioner [28], at p. 456). We are concerned with a constitutional right of great strength whose weight is great when it is balanced against conflicting social values.

            Where the realization of the right of worship creates a near certainty of the occurrence of serious and grave damage to public safety and there is no solution to such a collision by means of the use of reasonable measures that will make the danger more remote, then the value of public safety will prevail and the constitutional right will yield to it (Barak, Legal Interpretation, vol. 3, pp. 225-226). But where there are reasonable measures that can reduce the danger of the harm, the authorities can and should resort to these, especially where they are confronted with a constitutional right of special weight. Thus, the greater the constitutional right on the scale of rights, the greater is the need to exhaust all available reasonable measures by means of which it is possible to reduce the danger to public safety.

            The worshippers who wish to go to the Machpela Cave by foot on Sabbaths and festivals wish to realize a constitutional right of freedom of worship in a holy place. This right is of special importance and weight on the scale of constitutional rights. But the public interest to ensure the security and safety of the worshippers, when passing along the worshippers’ route, against the danger of attacks that directly threatens them conflicts with the realization of the right of worship. It is the responsibility of the area commander to protect the route and those using it against danger to human life. In order to satisfy the security interest as aforesaid, the area commander considered two alternatives: to prohibit the use of the route by worshippers on foot from Kiryat Arba to the Cave on Sabbaths and festivals, or to allow this use and to take various measures that will increase the security of the area. In view of the constitutional importance of the right of prayer in a holy place, the commander saw fit to allow the use of the route and to adopt increased security measures. This balance, prima facie, satisfies the test of reasonableness. Whether the measure of harming private property in order to achieve the aforesaid purpose satisfies the constitutional test is another question.

Second stage of the balancing: the right of religion and worship versus the right of private property

20. There may be situations in which a relative harm to one constitutional right is possible in order to realize another constitutional right, in conditions that will ensure relative protection of human life. This is conditional upon the relative balancing of these constitutional rights against one another, as dictated by the circumstances of the case. This balance sometimes requires a conceptual definition of the constitutional rights in accordance with a scale of importance and strength in order to examine whether one right has preference and superiority to the other, or whether they are of equal importance and standing. Sometimes this conceptual examination will become redundant whether it is found that a balance that was made de facto also satisfies the constitutional criteria required for the purpose of a balance between constitutional rights that are of equal standing and rank to one another.

In the special circumstances of this case, there is no need to adopt a decisive position with regard to the conceptual ranking of the right of worship and the right of property in order to decide the question of how to balance between them in a case of a conflict. In view of the facts of the concrete case, the balance between them satisfies the test of constitutionality (HCJ 153/83 Levy v. Southern District Commissioner of Police [34], at p. 400 {115-116}). Even if we assume, for the purposes of this case, that we are concerned with constitutional rights of equal standing and importance, even so, in the horizontal balance between them, sometimes a certain reduction of one will be possible to allow the relative realization of the other. This reduction satisfies the test of constitutionality if it befits accepted social values, is intended for a proper purpose and is not excessive in its scope, in the spirit of the limitations clause in s. 8 of the Basic Law: Human Dignity and Liberty. These principles today form a link between the Basic Law and all the rules of public law (Horev v. Minister of Transport [16], at pp. 41-43 {193-195}). They reflect a general balancing formula that assumes that where constitutional rights of an equal standing are concerned, complete protection should not be given to one right at the expense of a complete violation of the other right, but we should seek to uphold them jointly by allowing a reciprocal reduction of each of them.

From the general to the specific

21. The area commander has the responsibility for the security of the military force in the area under his command, as well as for maintaining order and ensuring the security and welfare of the inhabitants living there. Of paramount importance in the responsibility for the population of the area is the duty to ensure the safety and security of the inhabitants’ lives. The responsibility of the commander includes not only the duty to ensure that the inhabitants’ lives are secure, but also the responsibility to protect the human rights of all the inhabitants of the area, whether Arabs or Jews. One of the constitutional human rights that deserves protection is the right of freedom of religion and worship. Within the scope of this right, the Jewish inhabitants wish to give expression to their faith by praying at the Machpela Cave, which is a Jewish holy place. The realization of this right on Sabbaths and festivals requires walking from Kiryat Arba to the Machpela Cave. The risk of terror attacks and the topographic conditions require, as a condition for making this journey on foot, the existence of minimum security conditions to protect the worshippers against attacks. These conditions require the adoption of special measures to achieve this. Realization of such measures involves harm to the right of private property of the Arab inhabitants of the area, whose land is situated along the route. The property right of these inhabitants also has a recognized constitutional standing.

In making the requisition order, the area commander sought to make a proportionate balance between the conflicting constitutional rights, in order to allow the realization of the right of prayer at a holy place in conditions of relative security for those persons passing along the route.

All the possibilities for a pedestrian route of the worshippers were considered, and it was found that, with the exception of the worshippers’ route, every other alternative was far more costly in terms of the security risks to the worshippers and the harm and damage anticipated to the inhabitants of the area. When the worshippers’ route was found to be the preferable route, the area commander reduced to a minimum the harm to private property along the route. In the northern part, he reduced the width of the route to two metres from each side. In the southern part of the route he reduced the widening of the route to a total width of four metres. This widening will allow only the unidirectional passage of rescue vehicles, as opposed to the possibility of bidirectional traffic that was previously considered. This reduction diminishes the harm to property, on the one hand, and allows only a minimum of security measures for the worshippers, on the other. All the buildings that are the subject of the requisition order are abandoned and uninhabited. One house that was found to be inhabited was excluded from the requisition order and the route of the passage was changed accordingly. The reduction of the area of widening the southern route currently requires a partial demolition of two buildings and a part of an additional building, which have not been inhabited for many years. The demolition does not involve the eviction of persons from their homes. The aforesaid demolition is supposed to be supervised by professionals in the fields of conservation of buildings and archaeology, in order to protect the cultural-historical values of the area, in so far as possible. The owners of the property have a right to payment for the use thereof and compensation for the requisition and the demolition. The requisition order is limited in time. When the security position changes and calm prevails in the area, the presumption is that the order will not be extended and property that has been requisitioned and can be returned will be returned to its owner.

The balance between the conflicting constitutional rights is not easy or self-evident in the circumstances of this case. It involves aspects of rights of human expression by means of realizing religious belief and worship, which conflict with rights and values concerning a connection to land and property; in addition to all of these, there is a general value of responsibility for protecting human life. The point of equilibrium between all of these factors is hard to find. Nonetheless, in the final analysis it would appear that the requisition order in its narrow format satisfies the test of constitutionality, by finding a relative balance between the constitutional rights. It allows the right of worship to be realized while providing relative protection to the security of the worshippers, which is made possible by harm to the conflicting right of private property in a limited degree, which is accompanied by financial compensation. It does not conflict with accepted social values, it is done for a proper purpose and it is not excessive. If the area commander were to refrain from causing the relative harm to property rights, this would mean failing to adopt essential security measures for the protection of the persons walking along the route. If this were the case, it would make it necessary to deny the right of the worshippers to go to the Cave on Sabbaths and festivals absolutely, because of the lack of adequate security measures to protect their safety. Such a denial would constitute an absolute and improper violation of the freedom of worship to pray at a holy site and a serious violation of the freedom of movement and access required in order to realize freedom of religion. Alternatively, it would lead to allowing the passage of the worshippers along the route without the special security measures that are required in the circumstances of the case, thus increasing the immediate risk to the safety and lives of men, women and children using the route, sometimes in their thousands. These alternatives create considerable difficulty in themselves. Against this background, the upholding of the right of worship in conditions of relative protection for the security of the worshippers, by means of relative harm — which has been reduced to a minimum — to the property rights of the owners of the rights along the route, satisfies, in the special circumstances of this case, the conditions for the constitutional balance in a way that is not unreasonable.

Consequently I find no ground for intervention in the discretion of the area commander in making the requisition order in its narrow format, in accordance with which the order is going to be amended.

Outcome

22. On the basis of the aforesaid, I propose to my colleagues that we deny the petitions and recognize the validity of the requisition order in its narrow form, as set out in the written notice of the State dated 7 August 2003, and in the statements of counsel for the respondents during the hearing in the court on 23 November 2003, with regard to the scope of the widening of the route in its northern part. We have made a note of the respondent’s statement that an amending order will be made to the original requisition order in the spirit of the aforesaid notices of the State.

 

 

President A. Barak

I agree.

 

 

            Justice M. Cheshin

I agree.

 

Petitions denied.

11 Adar 5764.

4 March 2004.

Morar v. IDF Commander in Judaea and Samaria

Case/docket number: 
HCJ 9593/04
Date Decided: 
Monday, June 26, 2006
Decision Type: 
Original
Abstract: 

Facts: The petitioners, who represent five Arab villages in the territory of Judaea and Samaria, claimed that the respondents unlawfully deny Palestinian farmers in those villages access to their agricultural land. The petitioners also claimed that the respondents do not act to prevent attacks and harassment perpetrated by Israeli inhabitants of the territory of Judaea and Samaria against Palestinian farmers and do not enforce the law against the Israeli inhabitants. In reply, the respondents explained that the agricultural land was closed only when it was necessary to protect the Palestinian farmers from harassment by Israeli inhabitants. The respondents also notified the court of the actions taken by them to enforce the law against Israeli inhabitants in Judaea and Samaria.

 

Held: The measure of denying Palestinian farmers access to their land for their own protection is disproportionate. The proper way of protecting Palestinian farmers from harassment is for the respondents to provide proper security arrangements and to impose restrictions on those persons who carry out the unlawful acts.

 

Law enforcement in Judaea and Samaria is insufficient and unacceptable, since the measures adopted have not provided a solution to the problems of harassment. The respondents were ordered to improve law enforcement procedures to deal with the problem properly.

Voting Justices: 
Primary Author
majority opinion
Author
concurrence
Author
concurrence
Full text of the opinion: 

HCJ 9593/04

Rashed Morar, Head of Yanun Village Council

and others

v.

1.         IDF Commander in Judaea and Samaria

2.         Samaria and Judaea District Commander, Israel Police

 

 

The Supreme Court sitting as the High Court of Justice

[26 June 2006]

Before Justices D. Beinisch, E. Rivlin, S. Joubran

 

Petition to the Supreme Court sitting as the High Court of Justice.

 

Facts: The petitioners, who represent five Arab villages in the territory of Judaea and Samaria, claimed that the respondents unlawfully deny Palestinian farmers in those villages access to their agricultural land. The petitioners also claimed that the respondents do not act to prevent attacks and harassment perpetrated by Israeli inhabitants of the territory of Judaea and Samaria against Palestinian farmers and do not enforce the law against the Israeli inhabitants. In reply, the respondents explained that the agricultural land was closed only when it was necessary to protect the Palestinian farmers from harassment by Israeli inhabitants. The respondents also notified the court of the actions taken by them to enforce the law against Israeli inhabitants in Judaea and Samaria.

 

Held: The measure of denying Palestinian farmers access to their land for their own protection is disproportionate. The proper way of protecting Palestinian farmers from harassment is for the respondents to provide proper security arrangements and to impose restrictions on those persons who carry out the unlawful acts.
Law enforcement in Judaea and Samaria is insufficient and unacceptable, since the measures adopted have not provided a solution to the problems of harassment. The respondents were ordered to improve law enforcement procedures to deal with the problem properly.

 

Petition granted.

 

Legislation cited:

Basic Law: Human Dignity and Liberty, 5752-1992, ss. 2, 3, 4.

Security Measures (Judaea and Samaria) (no. 378) Order, 5730-1970, s. 90.

 

Israeli Supreme Court cases cited:

[1]        HCJ 302/72 Hilo v. Government of Israel [1973] IsrSC 27(2) 169.

[2]        HCJ 6339/05 Matar v. IDF Commander in Gaza Strip [2005] IsrSC 59(2) 846.

[3]        HCJ 10356/02 Hass v. IDF Commander in West Bank [2004] IsrSC 58(3) 443; [2004] IsrLR 53.

[4]        HCJ 2612/94 Shaar v. IDF Commander in Judaea and Samaria [1994] IsrSC 48(3) 675.

[5]        HCJ 7957/04 Marabeh v. Prime Minister [2005] (2) IsrLR 106.

[6]        HCJ 3680/05 Tana Town Committee v. Prime Minister (not yet reported).

[7]        HCJ 3799/02 Adalah Legal Centre for Arab Minority Rights in Israel v. IDF Central Commander [2005] (2) IsrLR 206.

[8]        HCJ 1730/96 Sabiah v. IDF Commander in Judaea and Samaria [1996] IsrSC 50(1) 353.

[9]        HCJ 2753/03 Kirsch v. IDF Chief of Staff [2003] IsrSC 57(6) 359.

[10]     HCJ 1890/03 Bethlehem Municipality v. State of Israel [2005] IsrSC 59(4) 736; [2005] (1) IsrLR 98.

[11]     HCJ 2481/93 Dayan v. Wilk [1994] IsrSC 48(2) 456; [1992-4] IsrLR 324.

[12]     HCJ 7862/04 Abu Dahar v. IDF Commander in Judaea and Samaria [2005] IsrSC 59(5) 368; [2005] (1) IsrLR 136.

[13]     HCJ 292/83 Temple Mount Faithful v. Jerusalem District Police Commissioner [1984] IsrSC 38(2) 449.

[14]     HCJ 7052/03 Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [2006] (1) IsrLR 443.

[15]     HCJ 2056/04 Beit Sourik Village Council v. Government of Israel [2004] IsrSC 58(5) 807; [2004] IsrLR 264.

[16]     HCJ 2725/93 Salomon v. Jerusalem District Commissioner of Police [1995] IsrSC 49(5) 366.

[17]     HCJ 531/77 Baruch v. Traffic Comptroller, Tel-Aviv and Central Districts [1978] IsrSC 32(2) 160.

[18]     HCJ 5016/96 Horev v. Minister of Transport [1997] IsrSC 51(4) 1; [1997] IsrLR 149.

[19]     HCJ 4769/95 Menahem v. Minister of Transport [2003] IsrSC 57(1) 235.

[20]     HCJ 61/80 Haetzni v. State of Israel (Minister of Defence) [1980] IsrSC 34(3) 595.

[21]     HCJ 551/99 Shekem Ltd v. Director of Customs and VAT [2000] IsrSC 54(1) 112.

[22]     HCJ 153/83 Levy v. Southern District Commissioner of Police [1984] IsrSC 38(2) 393; IsrSJ 7 109.

[23]     HCJ 2431/95 Salomon v. Police [1997] IsrSC 51(5) 781.

[24]     HCJ 3641/03 Temple Mount Faithful v. HaNegbi (unreported).

[25]     HCJ 166/71 Halon v. Head of Osfiah Local Council [1971] IsrSC 25(2) 591.

 

For the petitioners — L. Yehuda.

For the respondents — E. Ettinger.

 

 

JUDGMENT

 

 

Justice D. Beinisch

The petition before us concerns the right of access of the residents of five Arab villages in the territory of Judaea and Samaria (hereafter: the territory) to their agricultural land. The original petition was filed on behalf of the residents of three villages (Yanun, Aynabus, Burin) and later the residents of two additional villages (A-Tuani and Al-Jania). According to what is alleged in the petition, the respondents — the IDF Commander in Judaea and Samaria (‘the IDF Commander’) and the Commander of the Samaria and Judaea District in the Israel Police (‘the Police Commander’) are unlawfully preventing Palestinian farmers, who are residents of the petitioning villages, from going to their agricultural land and cultivating it. They claim that the respondents are depriving them of their main source of livelihood on which the residents of the petitioning villages rely and that this causes the residents serious harm. It is also alleged in the petition that the respondents are not acting in order to prevent attacks and harassment perpetrated by Israeli inhabitants of the territory of Judaea and Samaria against Palestinian farmers and that they do not enforce the law against the Israeli inhabitants.

The course of the proceedings in the petition and the arguments of the parties

1.    Since the petition was filed at the end of 2004, it has undergone many developments. We shall discuss below, in brief, the main events in the course of the petition.

On 24 October 2004 the petition was filed for an order nisi ordering the respondents to show cause as to why they should not allow the residents of the petitioner villages, and the residents of the territory of Judaea and Samaria in general, to have access to their land throughout the year, and particularly during the olive harvest and the ploughing season. The court was also requested to order the respondents to show cause as to why they should not take the appropriate action in order to ensure the security of the Palestinian farmers when they cultivate their land.

The petition that was filed was of a general nature but it also contained an application for concrete and urgent relief, since at the time when the petition was filed the olive harvest had begun. After an urgent hearing of the petition was held on 1 November 2004, arrangements were made between the parties in order to resolve the existing problems and to allow the harvest to take place in as many areas as possible. These arrangements were successful and from the statements that were filed by both parties it appears that a solution to the petitioners’ problems was found and that the specific difficulties that were raised in the petition were mostly resolved.

2.    On 9 December 2004 an application was filed by the petitioners for an order nisi to be made in the petition. In this application the petitioners said that although the urgent and specific problems that arose during the current harvest season had been resolved, the petition itself addressed a ‘general modus operandi, which was practised by the security forces in extensive parts of the territory of the West Bank, as a result of which residents are denied access to their land.’ It was alleged that because the IDF Commander was afraid of violent confrontations between Palestinian farmers going to work on their land and Israeli inhabitants, the IDF Commander is in the habit of ordering the closure of Palestinian agricultural areas, which are defined as ‘areas of conflict.’ This denies the Palestinians access to their land and deprives them of the ability to cultivate it. It was argued that denying them access to their land is done unlawfully, since it is not effected by means of an order of the IDF commander but by means of unofficial decisions. It was also argued that the justification given for closing the area is the need to protect the Palestinian farmers against acts of violence against them by Israeli inhabitants. In addition to this, it was argued in the petition that the respondents refuse to enforce the law against the Israeli inhabitants who act violently towards the Palestinian farmers and their property.

On 14 January 2005 the respondents filed their response to the application. In the response, it was emphasized that according to the fundamental position of the Attorney-General, the rule is that the Palestinian inhabitants in the territory of Judaea and Samaria should be allowed free access to the agricultural land that they own and that the IDF Commander is responsible to protect this right of access from hostile elements that seek to deny the Palestinians access to their land or to harm them. The respondents stated that following meetings between the defence establishment and the Attorney-General, a comprehensive examination of the areas of conflict was made, and the purpose of this was to examine whether it was essential to continue to impose restrictions on access to agricultural areas and on what scale and for how long such restrictions are required. The respondents also said that where it transpires that areas of conflict make it necessary to continue to impose restrictions upon access, these will be declared closed areas and a closure order will be made with regard thereto in accordance with s. 90 of the Security Measures (Judaea and Samaria) (no. 378) Order, 5730-1970 (the ‘Security Measures Order’). At the same time it was stated that nothing in the aforesaid would prevent the closure of an area by virtue of an unwritten decision when the defence establishment had concrete information of an immediate and unforeseen danger to the Palestinian residents or the Israeli settlers in a specific area, if the entry of Palestinian farmers into that area would be allowed. In conclusion it was argued that in view of the fact that the immediate needs of the petitioners had been satisfied and in view of what is stated above with regard to the issue of principle addressed by the petition, there was no basis for examining the petitioners’ arguments within the scope of this proceeding and the petition should therefore be denied.

3.    On 1 March 2005 a hearing was held in the presence of the parties, at the end of which it was decided to make an order nisi ordering the respondents to show cause as to why they should not allow the residents of the villages access to their agricultural land on all days of the year and why they should not adopt all the measures available to them in order to prevent the harassment of the residents of the petitioning villages and in order to ensure that they could work their land safely.

4.    In their reply to the order, the respondents discussed the difficult security position in the area and reviewed some of the serious security incidents that recently took place in the areas adjacent to the petitioners’ villages. The respondents said that in many places in Judaea and Samaria Israeli towns had been built close to Palestinian villages and that this proximity had been exploited in the past to carry out attacks against the Israeli towns. The respondents also said that during the ploughing and harvesting seasons the fear of attacks increases, since at these times the Palestinian farmers wish to cultivate the agricultural land close to the Israeli towns and hostile terrorist elements exploit the agricultural activity in order to approach the Israeli towns and attack them. In view of this complex position, the respondents discussed the need to impose balanced and proportional restrictions on both the Israeli and the Palestinian inhabitants of Judaea and Samaria in order to minimize the loss of human life on both sides. The respondents again emphasized that the principle that guides their action is the duty to allow the Palestinian residents in Judaea and Samaria free access to their agricultural land and the duty to protect this right. The respondents gave details in their reply of the rules that they have formulated in order to implement this principle and the respondents mainly emphasized the change that has occurred in the security outlook in so far as dealing with the areas of conflict is concerned: whereas in the past the prevailing outlook was that all the areas of conflict — both those characterized by harassment of Palestinians by Israelis and those where the presence of Palestinians constituted a danger to Israelis — should be closed, now areas of conflict are closed only where this is absolutely essential in order to protect Israelis (para. 16(a) of the statement of reply). According to the reply, the Palestinians will no longer be protected against harassment by Israeli residents by means of a closure of areas to Palestinians but in other ways. The methods that will be adopted for the aforesaid purpose are an increase in security for the Palestinian farmers, operating a mechanism for coordinating access to the agricultural land and closing the areas of conflict to prevent the entry of Israelis into those areas at the relevant times. The respondents also said that the problematic areas of conflict, whose closure was required in order to protect the Israeli residents, would not be closed absolutely during the harvesting and ploughing seasons, but in a manner that would allow the Palestinian farmers access to them, by coordinating this and providing security. During the rest of the year, the Palestinians would only be required to advise the DCO of their entry into the areas of conflict. The respondents argued that the aforesaid principles have led to a significant reduction in the restrictions on the access of Palestinians to their land, both with regard to the size of the area that is closed and with regard to the amount of time during which the area is closed. Thus, with regard to the village of Yanun (which is represented by the first petitioner), it was decided to close a piece of land with an area of only 280 dunams, instead of 936 dunams in 2004; with regard to the village of Aynabus (the second petitioner), no land would be closed at all (after in the original reply of the respondents it was said that an area of 218 dunams would be closed); with regard to the village of Burin (the third petitioner), two areas amounting to only approximately 80 dunams would be closed; with regard to the village of A-Tuani (the sixth petitioner), three areas amounting to approximately 115 dunams would be closed; and in the area of the village of Al-Jania (the seventh petitioner), several pieces of land with a total area of 733 dunams would be closed.

With regard to the second part of the petition, which concerns law enforcement against Israeli residents, the respondents discussed in their reply the efforts of the police to prevent acts of harassment at the points of conflict, both from the viewpoint of prevention before the event (which mainly concerns increased deployment in the areas of the conflict at the relevant times) and from the viewpoint of law enforcement after the event (by maximizing the investigation efforts and filing indictments).

 5.   The petitioners filed their response to the respondents’ reply, in which they claimed that nothing stated therein changed the prevailing position, in which the Palestinian residents were refused free access to their land. The alleged reason for this is that they continue to suffer a de jure denial of access to their land — by virtue of closure orders, which the petitioners claim do not satisfy the tests of Israeli and international law — and a de facto denial of access, as a result of attacks and harassment on the part of Israeli inhabitants. The petitioners also complained of the continuing ineptitude of the police treatment of Israeli lawbreakers.

6.    After receiving the respondents’ reply and the petitioners’ response to it, two additional hearings were held in the case, and at the end of these the respondents were asked to file supplementary pleadings, including replies to the petitioners’ claims that there is no access to the agricultural land during the current harvesting season and that nothing is done with regard to the complaints of residents of the petitioning villages with regard to harassment against them. In the supplementary pleadings of 26 September 2005, the respondents discussed at length the deployment of the army and the police for the 2005 olive harvest. In reply to the questions of the court, the respondents said, inter alia, that in the course of the deployment a plan is being put into operation to determine days on which security will be provided for the areas of conflict, which has been formulated in coordination with the Palestinians; that several control mechanisms have been formulated with the cooperation of the civil administration, the police and the Palestinian Authority, whose purpose is to provide a solution to the problems that arise during the harvest; that the forces operating in the area will be strengthened in order to guard the agricultural work; that the police forces have taken action to improve their ability to bring lawbreakers to justice; that orders have been issued to the IDF forces, emphasizing the fundamental principle that the farmers should be allowed to go to harvest the olives and that they should ensure that the harvest takes place in a reasonable manner; and that there was an intention to make closure orders for Israeli areas only, together with restriction orders for certain Israeli inhabitants who had been involved in the past in violent actions.

In addition to the aforesaid, the respondents said in their reply that following another reappraisal of all the relevant factors and circumstances in the area, they had revised their position with regard to the use of closure orders directed at the Palestinian residents. The respondents said that the reappraisal was carried out against the background of the tension anticipated during the withdrawal from the Gaza Strip and in view of the concern that the olive harvest was likely to be characterized by many attempts on the part of Israeli inhabitants to harm Palestinian residents. According to the revised position, in addition to the security need to make use of closure orders where this was required in order to protect the security of the Israeli inhabitants, there was also a security need to make use of closure orders when the main purpose was to protect the Palestinian residents. At the same time the respondents informed the court that, in view of the aforesaid parameters, it had been decided in the reappraisal of the issue not to make closure orders for the land of the villages of A-Tuani and Yanun. The respondents also said that in the land of the villages of Burin and Al-Jania only areas amounting to approximately 808 dunams would be closed. Against the background of all of the aforesaid, the respondents were of the opinion that there was a significant improvement in the access of the Palestinian farmers to their land.

In an additional statement of the respondents, it was argued that the question of law enforcement against the Israeli settlers was being treated seriously both by the defence establishment and by the interdepartmental committee for law enforcement in the territories, which operates at the State Attorney’s Office. In this context the respondents discussed, inter alia, the efforts that were made to increase the supervision of security officers in Israeli towns and to increase supervision of the allocation of weapons to Israelis in the area, and the steps taken by the police in order to deal with offences carried out by Israeli inhabitants. They also addressed the handling of specific complaints that were made with regard to the villages that are the subject of the petition.

7.    The petitioners, for their part, filed on 30 November 2005 an additional supplementary statement, in which they said that during the olive harvest season of 2005 there had indeed been a certain change for the better from the viewpoint of the respondents’ deployment. In this regard, they discussed how greater efforts had been made by the civil administration to coordinate with the Palestinians the dates of the olive harvest, and that more requests by Palestinians to receive protection were granted. At the same time, the petitioners said that the results on the ground were not always consistent: whereas in the villages of Yanun and Al-Jania most of the farmers did indeed succeed in obtaining access to their land in order to carry out the harvesting on certain days during the season, this was not the case in the other petitioning villages, in which there was no real change in the access to the land. In any case, the petitioners argued that in general the situation remained unchanged, since the Palestinian farmers cannot access their land in the areas of conflict freely on a daily basis, both because of violence on the part of the Israeli inhabitants and because of various restrictions that the army imposes. The petitioners emphasized that this modus operandi, whereby as a rule the Palestinians are denied access to their land, except on certain days when protection is provided by the forces in the area, is the complete opposite of the right to free access, since, in practice, preventing access is the rule whereas allowing access is the exception.

8.    Shortly thereafter, on 2 January 2006, the petitioners filed an application to hold an urgent hearing of the petition. This was in response to several very serious incidents in which more than two hundred olive trees were cut down and destroyed on the land of the village of Burin. In the application it was stated that despite repeated requests to the respondents, no activity was being carried out by them at all to protect the petitioners’ trees and that no measures were being taken to stop the destruction of the trees. It was also claimed in the application that the ploughing season was about to begin and that the respondents were not taking the necessary steps in order to allow the residents of the petitioning villages safe access to their agricultural land and were not taking any action to prevent attacks and harassment by the Israeli inhabitants.

9.    In consequence of what was stated in the application, the petition was set down for a hearing. Shortly before this hearing, a statement was filed by the respondents, in which it was claimed that the incidents in which the olive trees were ruined were being investigated intensively by the competent authorities, but at this stage evidence has not been found that would allow the filing of indictments in the matter. It was also stated that the phenomenon of violent harassment by Israeli residents against Palestinian farmers had recently been referred to the most senior level in government ministries and that a real effort was being made to find a solution to the problem. In addition, it was stated that the Chief of Staff had orders several steps to be taken in order to reduce the phenomenon of the harassment of Palestinian farmers, including increased enforcement at the places where law and order were being violated, adopting administrative measures against lawbreakers and reducing the number of weapons held by the Israeli inhabitants of Judaea and Samaria. It was also stated that the deputy prime minister at that time, Mr Ehud Olmert, ordered the establishment of an inter-ministerial steering committee that would monitor the law enforcement operations carried out as a part of the measures taken to prevent acts of violence perpetrated by Israeli inhabitants in Judaea and Samaria.

10. At the last hearing that was held before us on 19 January 2006, the parties reiterated their contentions. The petitions again argued against the ineffectual protection afforded by the respondents to the Palestinian farmers who wish to have access to and cultivate their agricultural lands and against the forbearing approach adopted, according to them, towards the lawbreakers. The petitioners indicated in their arguments several problematic areas, including improper instructions given to the forces operating in the area, a failure to make orders prohibiting the entry of Israelis into the Palestinian agricultural areas, and so forth. The respondents, for their part, discussed the steps that were being taken and the acts that were being carried out in order to ensure that the residents of the petitioning villages had access to their lands and that they were protected.

Deliberations

General

11. The petition before us has raised the matter of a very serious phenomenon of a violation of the basic rights of the Palestinian residents in the territories of Judaea and Samaria and of significant failures on the part of the respondents with regard to maintaining public order in the territories. As we have said, the claims raised by the petitioners are of two kinds: one claim relates to the military commander denying the Palestinian farmers access to their land. In this matter, it was claimed in the petition that the closure of the area deprives the Palestinian residents of their right to freedom of movement and their property rights in a manner that is unreasonable and disproportionate and that violates the obligations imposed on the military commander under international law and Israeli administrative law. It was also claimed that it was not proper to protect the Palestinian farmers in a way that denied them access to their land. In addition it was claimed that closing the areas to the Palestinians was done on a regular basis without a formal closure order being made under section 90 of the Security Measures Order and therefore the denial of access to the land was not based upon a lawful order. The main additional claim that was raised in the petition addressed the failure of the respondents to enforce the law in the territories of Judaea and Samaria. The essence of the claim was that the respondents do not take action against the Israeli inhabitants in the territories that harass the Palestinian farmers and harm them and their property. In addition to these general claims, the petition also includes specific claims that required immediate action in concrete cases where access was being denied, and these claims were dealt with immediately (see para. 1 above).

The proceedings in the petition before us were spread out over several hearings; the purpose of this was to allow the respondents to take action to solve the problems that were arising and to find a solution to the claims raised before us, under the supervision of the Attorney-General and subject to the judicial scrutiny of the court. We thought it right to give the respondents time to correct what required correction, since there is no doubt that the reality with which they are confronted is complex and difficult and that the tasks imposed on them are not simple. Regrettably, notwithstanding the time that has passed, it does not appear that there has been any real change in the position and it would seem that no proper solution has been found to the serious claims of the Palestinian farmers concerning the violation of their right to cultivate their land and to obtain their livelihood with dignity, and to the injurious acts of lawbreaking directed against them. At the hearings that took place before us, a serious picture emerged of harm suffered by the Palestinian residents and contempt for the law, which is not being properly addressed by the authorities responsible for law enforcement. Therefore, although some of the claims that were raised in the petition were of a general nature, we have seen fit to address the claims raised by the petitioners on their merits.

Denying access to land

12. The territories of Judaea and Samaria are held by the State of Israel under belligerent occupation and there is no dispute that the military commander who is responsible for the territories on behalf of the state of Israel is competent to make an order to close the whole of the territories or any part thereof, and thereby to prevent anyone entering or leaving the closed area. This power of the military commander is derived from the rules of belligerent occupation under public international law; the military commander has the duty of ensuring the safety and security of the residents of the territories and he is responsible for public order in the territories (see art. 23(g) and art. 52 of the Regulations concerning the Laws and Customs of War on Land, which are annexed to the Fourth Hague Convention of 1907 (hereafter: ‘the Hague Regulations’); art. 53 of the Convention relative to the Protection of Civilian Persons in Times of War, 1949 (hereafter: ‘the Fourth Geneva Convention’); HCJ 302/72 Hilo v. Government of Israel [1], at pp. 178-179). This power of the military commander is also enshrined in security legislation in section 90 of the Security Measures Order (see, for example, Hilo v. Government of Israel [1], at pp. 174, 179; HCJ 6339/05 Matar v. IDF Commander in Gaza Strip [2], at pp. 851-852). In our case, the petitioners do not challenge the actual existence of the aforesaid power but the manner in which the military commander directs himself when exercising his power in the circumstances described above. Therefore the question before us is whether the military commander exercises his power lawfully with regard to the closure of agricultural areas to Palestinian residents who are the owners or who have possession of those areas.

In order to answer the question that arises in this case, we should examine the matter in two stages: in the first stage we should seek to ascertain the purpose for which the power to close areas is exercised by the military commander, and we should also examine the various criteria that the military commander should consider when he considers ordering a closure of areas in the territories. In the second stage we should examine the proper balance between these criteria and whether this balance is being upheld in the actions of the military commander in our case.

The purpose of adopting the measure of closing areas

13. According to the respondents’ position, the purpose of adopting the measure of closing areas is to help the military commander carry out his duty of maintaining order and security in the area. Indeed, no one disputes that it is the duty of the military commander to ensure public order and the security of the inhabitants in the area under his command. Article 43 of the Hague Regulations sets out this duty and authorizes the military commander to take various measures in order to carry out the duty:

     ‘The authority of the legitimate power having in fact passed into the hands of the occupant, the latter shall take all the measures in his power to restore, and ensure, as far as possible, public order and safety, while respecting, unless absolutely prevented, the laws in force in the country.’

See also HCJ 10356/02 Hass v. IDF Commander in West Bank [3], at pp. 455-456 {64-65}. It should be emphasized that the duty and authority of the military commander to ensure security in the territory apply with regard to all the persons who are present in the territory that is subject to belligerent occupation. This was discussed by this court, which said:

     ‘… In so far as the needs of maintaining the security of the territory and the security of the public in the territory are concerned, the authority of the military commander applies to all the persons who are situated in the territory at any given time. This determination is implied by the well-known and clear duty of the military commander to maintain the security of the territory and by the fact that he is responsible for ensuring the safety of the public in his area’ (per Justice Mazza in HCJ 2612/94 Shaar v. IDF Commander in Judaea and Samaria [4], at p. 679).

(See also HCJ 7957/04 Marabeh v. Prime Minister [5], at para. 18, and HCJ 3680/05 Tana Town Committee v. Prime Minister [6], at paras. 8-9).

As we have said, the respondents’ argument is that the closure of the areas is done for the purpose of maintaining order and security in the territories. It should be noted that within the scope of this supreme purpose, it is possible to identify two separate aspects: one concerns the security of the Israelis in the territories and the other the security of the Palestinian residents. Thus in some cases the closure of the areas is intended to ensure the security of the Israeli inhabitants from the terror attacks that are directed against them, whereas in other cases the closure of the areas is intended to ensure the security of the Palestinian farmers from acts of violence that are directed against them. We shall return to these two separate aspects later, but we should already emphasize at this stage that in order to achieve the two aspects of the aforesaid purpose the military commander employs the same measure, and that is the closure of agricultural areas owned by the petitioners and denying the Palestinian farmers access to those areas.

The relevant criteria when exercising the power to close areas

14. As a rule, when choosing the measures that should be adopted in order to achieve the purpose of maintaining public order and security in the territories, the military commander is required to take into account only those considerations that are relevant for achieving the purpose for which he is responsible. In our case, when he is called upon to determine the manner of adopting the measure of closing areas, the military commander is required to consider several criteria.

On the one hand, there is the value of security and the preservation of the lives of the residents of the territories, both Israelis and Palestinians. It is well-known that the right to life and physical integrity is the most basic right that lies at the heart of the humanitarian laws that are intended to protect the local population in the territories held under the laws of belligerent occupation (see HCJ 3799/02 Adalah Legal Centre for Arab Minority Rights in Israel v. IDF Central Commander [7], at para. 23 of the opinion of President Barak). This right is also enshrined in Israeli constitutional law in ss. 2 and 4 of the Basic Law: Human Dignity and Liberty, and there is no doubt at all that this is a right that is on the highest normative echelon (see HCJ 1730/96 Sabiah v. IDF Commander in Judaea and Samaria [8], at p. 368; HCJ 2753/03 Kirsch v. IDF Chief of Staff [9], at pp. 377-378). All the residents of the territories — both Palestinians and Israelis — are therefore entitled to enjoy the right to life and physical integrity, and a fundamental and primary criterion that the military commander should consider when deciding to close areas is the criterion of the protection of the life and physical integrity of all the residents in the territories.

The petition before us concerns agricultural areas that are owned by Palestinian inhabitants and that are closed by the order of the military commander. Therefore, the right to security and the protection of physical integrity is opposed by considerations concerning the protection of the rights of the Palestinian inhabitants, and in view of the nature of the case before us, we are speaking mainly of the right to freedom of movement and property rights. In the judgment given in HCJ 1890/03 Bethlehem Municipality v. State of Israel [10], we said that the freedom of movement is one of the most basic human rights. We discussed how in our legal system the freedom of movement has been recognized both as an independent basic right and also as a right derived from the right to liberty, and how there are some authorities that hold that it is a right that is derived from human dignity (see para. 15 of the judgment and the references cited there). The freedom of movement is also recognized as a basic right in international law and this right is enshrined in a host of international conventions (ibid.). It is important to emphasize that in our case we are not speaking of the movement of Palestinian residents in nonspecific areas throughout Judaea and Samaria but of the access of the residents to land that belongs to them. In such circumstances, where the movement is taking place in a private domain, especially great weight should be afforded to the right to the freedom of movement and the restrictions imposed on it should be reduced to a minimum. It is clear that restrictions that are imposed on the freedom of movement in public areas should be examined differently from restrictions that are imposed on a person’s freedom of movement within the area connected to his home and the former cannot be compared to the latter (see HCJ 2481/93 Dayan v. Wilk [11], at p. 475).

As we have said, an additional basic right that should be taken into account in our case is, of course, the property rights of the Palestinian farmers in their land. In our legal system, property rights are protected as a constitutional human right (s. 3 of the Basic Law: Human Dignity and Liberty). This right is of course also recognized in public international law (see HCJ 7862/04 Abu Dahar v. IDF Commander in Judaea and Samaria [12], at para. 8 and the references cited there). Therefore, the residents in the territories held under belligerent occupation have a protected right to their property. In our case, there is no dispute that we are speaking of agricultural land and agricultural produce in which the petitioners have property rights. Therefore, when the petitioners are denied access to land that is their property and they are denied the possibility of cultivating the agricultural produce that belongs to them, their property rights and their ability to enjoy them are thereby seriously violated.

15. Thus we see that the considerations that the military commander should take into account in the circumstances before us include, on the one hand, considerations of protecting the security of the inhabitants of the territories and, on the other hand, considerations concerning the protection of the rights of the Palestinian inhabitants. The military commander is required to find the correct balance between these opposite poles. The duty of the military commander to balance these opposite poles has been discussed by this court many times, and the issue was summarized by President Barak in Marabeh v. Prime Minister [5] as follows:

     ‘Thus we see that, in exercising his power under the laws of belligerent occupation, the military commander should “ensure public order and safety.” Within this framework, he should take into account, on the one hand, considerations of the security of the state, the security of the army and the personal safety of everyone who is in the territory. On the other hand, he should consider the human rights of the local Arab population’ (para. 28 of the judgment [5]; emphases supplied).

See also Hass v. IDF Commander in West Bank [3], at pp. 455-456 {64-65}.

16. There is no doubt that in cases where the realization of human rights creates a near certainty of the occurrence of serious and substantial harm to public safety, and when there is a high probability of harm to personal security, then the other human rights yield to the right to life and physical integrity (HCJ 292/83 Temple Mount Faithful v. Jerusalem District Police Commissioner [13], at p. 454; Hass v. IDF Commander in West Bank [3], at p. 465 {76}). Indeed, in principle, where there is a direct conflict, the right to life and physical integrity will usually prevail over the other human rights, including also the right to freedom of movement and property rights. The court addressed this principle in HCJ 7052/03 Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [14], where it said:

     ‘When there is a direct confrontation and there is a concrete risk to security and life, the public interest indeed overrides protected human rights, and the same is the case where there is a concrete likelihood of a risk to life’ (para. 11 of my opinion [14]).

Notwithstanding, the balance between the various rights and values should be made in such a way that the scope of the violation of the rights is limited to what is essential. The existence of risks to public safety does not justify in every case an absolute denial of human rights and the correct balance should be struck between the duty to protect public order and the duty to protect the realization of human rights. The question before us is whether the manner in which the military commander is exercising his power to close areas for the purpose of achieving security for the Israeli residents on the one hand and the Palestinian residents on the other properly balances the conflicting considerations. We shall now turn to consider this question.

The balance between the relevant considerations

17. As we have said, in order to achieve the purpose of preserving security in the territories, the military commander adopts the measure of closing agricultural areas that are owned by Palestinians and in doing so he violates the right of the Palestinian residents to freedom of movement on their land and their right to have use of their property. We therefore discussed above the purpose for which the military commander was given the power to close the areas and the relevant criteria for exercising this power. Now we should consider whether the military commander properly balanced the various criteria and whether the measures adopted by the military commander satisfy the principle of proportionality that governs him in his actions.

18. The centrality of the principle of proportionality in the actions of the military commander has been discussed by this court many times (see, for example, HCJ 2056/04 Beit Sourik Village Council v. Government of Israel [15], at pp. 836-841 {293-298}). The manner in which the military commander exercises his power to close agricultural areas in the territories inherently results in a violation of the rights of the Palestinian residents and therefore this violation should satisfy the principle of proportionality. According to the proportionality tests, the military commander has the burden of showing that there is a rational connection between the measure adopted and the purpose (the first subtest of proportionality); he is required to show that, of the various appropriate measures that may be chosen, the measure adopted causes the least possible harm to the individual (the second test); and he is also required to show that adopting the aforesaid measure is proportionate to the benefit that arises from employing it (the third subtest).

19. According to the aforesaid tests, is the harm caused to the petitioners as a result of the closure of the agricultural land by the military commander proportionate? The proportionality of the measure is examined in relation to the purpose that the military commander is trying to achieve with it. ‘The principle of proportionality focuses… on the relationship between the purpose that it wants to realize and the measures adopted to realize it’ (Beit Sourik Village Council v. Government of Israel [15], at p. 839 {296}). In our case, the respondents claim that the closure of the areas is done for one purpose, which has two aspects: in certain circumstances it is for the protection of the Israeli inhabitants and in other circumstances it is for the protection of the Palestinian farmers. There are cases where the purpose is a mixed one, and the closure is intended to protect the lives of all the inhabitants, both Israeli and Palestinian, and in these circumstances the discretion of the military commander will be examined in accordance with the main purpose for which the power was exercised. Accordingly, we should examine the manner in which the military commander exercises the power of closure with regard to all of the aforesaid circumstances. First we shall examine the proportionality of the use of the power to close areas with regard to the purpose of protecting the security of the Israeli inhabitants and afterwards we shall examine the proportionality of the use of this measure with regard to the purpose of protecting the security of the Palestinian farmers.

Protecting the security of Israeli inhabitants

20. In so far as the protection of the security of the Israeli residents is concerned, the respondents argued that in order to achieve this purpose, in a period when brutal and persistent terrorist activity is taking place, the closure of areas near Israeli towns so that Palestinians cannot enter them is needed in order to prevent the infiltration of terrorists into those towns and the perpetration of acts of terror against the persons living there. The respondents explained that the access of the Palestinian farmers to agricultural land adjoining the Israeli towns is exploited by the terrorist organizations to carry out attacks against the Israeli towns, and that the presence of the Palestinian farmers on the land adjoining the Israeli towns serves the terrorists as a cloak and helps them to infiltrate those areas. The proximity of the agricultural land to Israeli towns is exploited particularly in order to carry out attempts to infiltrate the Israeli towns, for the purpose of carrying out attacks in them, and also for the purpose of long-range shooting attacks. Because of this, the respondents explained that there is a need to create a kind of barrier area, into which entry is controlled, and thus it will be possible to protect the Israeli inhabitants in an effective manner.

After considering the respondents’ explanations and the figures presented to us with regard to the terror activity in the areas under discussion in the petition, we have reached the conclusion that the measure of closing areas adjoining Israeli towns does indeed have a rational connection with the purpose of achieving security for the inhabitants of those towns. As we have said, the protection of the security of the Israeli inhabitants in the territories is the responsibility of the military commander, even though these inhabitants do not fall within the scope of the category of ‘protected persons’ (see Marabeh v. Prime Minister [5], at para. 18). The proximity of the Palestinian agricultural land to the Israeli towns, which is exploited by hostile terrorist forces, presents a significant risk to the security of the Israeli residents, and contending with this risk is not simple. The closure of the areas from which terrorist cells are likely to operate, so that the access to them is controlled, is therefore a rational solution to the security problem that arises.

With regard to the second test of proportionality — the least harmful measure test — according to the professional assessments submitted to us, no other measure that would be less harmful and that would achieve the purpose of protecting the security of the Israeli residents was raised before us. The military commander is of the opinion that the unsupervised access of Palestinians to areas that are very close to Israeli towns is likely to create a serious threat to the security of the Israeli inhabitants and there is no way to neutralize this threat other than by closing certain areas to Palestinians for fixed and limited periods. The military commander emphasized how the closure of the areas to the Palestinians will be done only in areas where it is absolutely essential and that there is no intention to close areas of land beyond the absolute minimum required in order to provide effective protection for the Israeli inhabitants. The military commander also said that the period of time when the areas would be closed to the Palestinian residents would be as short as possible and that the periods when access was denied would be limited. The military commander emphasized that he recognizes the importance of the right of the Palestinian farmers to have access to their land and to cultivate it and that making closure orders from time to time would be done while taking these rights into account and violating them to the smallest degree. The military commander also emphasized the intention to employ additional measures in order to ensure the protection of the rights of the Palestinians and that by virtue of the combination of the various measures it would be possible to reduce to a minimum the use of closure orders. From the aforesaid we have been persuaded that the military commander took into account, in this regard, the absence of any other less harmful measure that can be used in order to achieve the desired purpose. The other measures discussed by the respondents are insufficient in themselves for achieving the purpose and therefore there is no alternative to using also the measure of closing areas that adjoin Israeli towns for a limited period, in order to provide security.

With regard to the third test of the principle of proportionality — the proportionate or commensurate measure test — the benefit accruing to the Israeli inhabitants from the closure of the areas, from a security perspective, and the protection of the value of preserving life without doubt exceeds the damage caused by employing this measure, provided that it is done in a prudent manner. It should be remembered that, according to the undertaking of the military commander, the closure of the area will not cause irreversible damage to the Palestinian farmers, since by prior arrangement they will be allowed to have access to all of the agricultural land and to carry out the necessary work.

Consequently our conclusion is that subject to the undertakings given by the respondents, exercising the power to deny the Palestinians access to the areas that are very close to Israeli towns, in so far as this derives from the need to protect the Israeli towns, is proportionate. Indeed, the use of the measure of closing the areas inherently involves a violation of basic rights of the Palestinian residents, but taking care to use this measure proportionately will reduce the aforesaid violation to the absolute minimum.

21. It should be re-emphasized that the actual implementation of the military commander’s power to close areas should be done proportionately and after a specific and concrete examination of the conditions and character of the risks that are unique to the relevant area (cf. HCJ 11395/05 Mayor of Sebastia v. State of Israel (not yet reported)). In this regard it should be noted that, before filing the petition, the respondents defined a range of 500 metres from the boundaries of an Israeli town as the necessary security limits for the closed area, but following the hearings that took place in the petition this range was reduced and in practice areas were closed within a range of between only 50 and 300 metres from Israeli towns, as needed and according to the topography of the terrain, the nature of the risk and the degree of harm to the Palestinian residents in the area. Determining the security limits in the specific case is of course within the jurisdiction of the military commander, but care should be taken so that these ranges do not exceed the absolute minimum required for effective protection of the Israeli inhabitants in the area under discussion, and the nature and extent of the harm to the Palestinians should be examined in each case. In addition, whenever areas are closed it should be remembered that it is necessary to give the Palestinian residents an opportunity to complete all the agricultural work required on their land ‘to the last olive.’ It should also be noted that closing the areas should be done by means of written orders that are issued by the military commander, and in the absence of closure orders the Palestinian residents should not be denied access to their land. Nothing in the aforesaid prejudices the commander’s power in the field to give oral instructions for a closure of any area on a specific basis for a short and limited period when unexpected circumstances present themselves and give rise to a concern of an immediate danger to security that cannot be dealt with by any other measures. But we should take care to ensure that the power to order the closure of a specific piece of land without a lawful order, as a response to unexpected incidents, should be limited solely to the time and place where it is immediately required. In principle, the closure of areas should be done by means of an order of which notice is given to whoever is harmed by it, and the residents whose lands are closed to them should be given an opportunity to challenge its validity. Within the limitations set out above and subject thereto, it can be determined that closing areas close to Israeli towns is proportionate.

Protecting the security of Palestinian farmers

22. As we said above, the purpose of maintaining order and security in the territories has two aspects, and for each of these we