... A warning note must be written in favor of the buyer shortly after the transaction is executed, and this action is also not complicated and involves a cost of ILS 159. Issuing an updated document shortly after the transaction is executed and registering a warning note shortly after the transaction are two actions that have zero cost and have the power to prevent major damage and legal complications."
- Although it is possible to point to a different approach in case law on this matter, and see the opinion of the Honorable Justice Melcer (CA 580/10 Nir Cooperatives National Cooperative Association for Workers' Settlement v. Hod Hasharon Municipality [Nevo]) and the opinion of the Honorable Justice Rivlin (CA 8881/07 Lev v. Toby [Nevo]), it seems that the approach of the Honorable Justice Amit is a common approach in case law. For the application of this approach by the trial courts, see, inter alia, in Civil Appeal 62146-11-15 Abu Saleh v. Abu Raya et al., [Nevo] (May 18, 2021); Civil Appeal 21123-03-16 Sach v. Nassar et al., [Nevo] (May 21, 2018); Civil Appeal (Hai) 15200-05-21 Nader Fahmawi v. Sa'id Fahmawi, [Nevo] (9.3.23); Ceasel (Tel Aviv) 5332-11-20 Psagot Israel Ltd. v. Commissioner of Insolvency and Economic Rehabilitation Proceedings, [Nevo] (June 5, 2023).
- There is no dispute that the plaintiffs did not register a cautionary note regarding Ali's rights in respect of the gift transaction, despite the passage of 34 months until the date of the engagement in the contrary transaction. Nor can there be any dispute that a report of the transaction does not appear in the public land registry. It was not claimed, and in any case it was not proven, that there was an impediment to the registration of such a note. The rights inherited by Ali were transferred to his name in March 2022, and it was not claimed that they could not have been transferred to his name even earlier, nor was there any claim of objective difficulty in registering a warning note, certainly not after that date. The plaintiff was asked in his interrogation why they did not take care to record a warning note, and his answer was that he did not believe that such a thing would happen (p. 3). This answer, of course, is not sufficient.
- In the judgment given in CA 8559/15 Suleiman Abbas v. Oven Falls Ltd., paragraph 53 [Nevo] (May 27, 2018), the Supreme Court noted the reasonable period of time during which the first buyer must register a warning note, after which, it appears that thefailure to register a note, negligence or fault on the part of the owner of the first transaction, which can constitute justification for the application of the exception set forth in the Ganz rule. In the same matter, it was held:
"...Determining the reasonable time for a warning note to be filed by the first buyer depends on the circumstances and may vary from case to case. However, the practice is that the buyer writes a note of caution very quickly. However, in my opinion, a certain deviation - not a sharp one, from the degree of agility - should not be seen as negligence that blocks the priority of the first purchaser, and in this context Prof. M. Deutsch noted as follows: 'Given the accepted practice, according to which it is customary to take a note very quickly, it can be assumed that the 'reasonable time' is measured in terms of a few days or weeks" (see: Miguel Deutsch, "Judicial Discretion in the Law of Conflicting Transactions - Trends and Reflections," Sefer Or - Articles in Honor of Judge Theodore Orr, Law and Business 305 (2013); Miguel Deutsch 'The Burden of Registration of a Warning Note in Real Estate - The Ganz Rule and its Implications, Hapraklat 47 181 (5764-2004;...')".
- The plaintiffs themselves argued in the summaries that if it were not for the negligence and negligence of the lawyer who represented the parties in the gift transaction, by not registering a warning note, the claim would not have been born, since the warning note would have prevented the registration of ownership in the name of Mu'taz. The plaintiffs' claims against the person who represented them in the gift transaction will not save them in the relationship between them and the defendants (and I do not determine the question of the lawyer's negligence). On the contrary, this constitutes an admission of their own negligence in not registering the note.
- These statements strengthen the determination that the burden of proving the lack of consideration and good faith is on the plaintiffs. As noted, they did not lift the load.
- So far, I have referred to the contradictory deal between Ali and Mu'taz. Even if we wish to examine the gift transaction against the transaction between Mu'taz and Sa'id (the third transaction), I am of the opinion that the gift transaction has its hands on the bottom.
- Said gave a consistent and reliable version. He did not try to give details that he did not know and did not pretend to know all the details. This is an independent renovation worker, who has purchased quite a few lands in the area, and sold some of them. Sa'id said that he had no contact with Ali and that he did not know of any problem that would prevent the purchase of the land (Ali also claimed that he had no contact with Sa'id). He testified that Mu'taz approached him and interested him in the real estate, and explained to him that it was land that he was about to receive from his cousins. Sa'id gave the data of the land, a block and a plot, to Adv. Naamneh, who represents him on a regular basis, in other transactions as well, and he checked the rights at the registry office for him and drafted the purchase agreements after making sure that there was no impediment to purchasing the land.
- This conduct of Sa'id, who wished to rely on the examinations conducted by his lawyer, was not flawed. Sa'id's version that he did not know about any problem with the land or about the contradictory transaction is reliable to me. Sa'id testified, and on this matter as well, I accept his version, that if he had known about "the mess on this land" he would not have entered into it (p. 49 of the transcript). It was not claimed, and in any case not proven, that there was a clear economic interest or a special business opportunity for Said, which would justify him purchasing land that was the basis of a counter-transaction. I did not get the impression that there was any special need for Said to purchase this land specifically, in a way that would have led him to enter into a problematic deal. During the hearing, Sa'id also expressed his willingness to give up the land if the money he had paid would be returned to him (and this was also said in connection with the proposal made by the court). In other words, there was no logical reason for Sa'id to enter into a deal with Mu'taz when he knew or turned a blind eye to suspicious data regarding a contradictory transaction concerning the same real estate.
- The same is true of Adv. Na'amneh, who represented Sa'id and worked to arrange everything legally required for the purchase and transfer of the rights by Sa'id. The plaintiffs claimed that Adv. Naamneh knew, or should have known, about the gift transaction, and that this information should be attributed to Sa'id, but the claim was not substantiated or proven on the factual level, since no suspicious knowledge or indication of the existence of a contrary transaction was proven, and I did not find any reason why Adv. Naamneh should have been suspected of such a transaction. When it comes to regulated real estate, it is sufficient to examine the land registration document (see in this regard, CA 839/90 Raz Building Company Ltd. Ehrenstein, PD 45 (5) 739 and Cell (Chai) 61147-12-15 Faraj Salman v. Estate of the late Habib Samaan, [Nevo] (June 26, 2019)). There is also no logical reason for Adv. Naamneh to lead his (regular) client to a problematic transaction consciously.
- Therefore, I am of the opinion that whether we examine the contradictory transaction between Ali and Sayid, whether we view the second and third transactions as a single transaction, and examine it as a contrary transaction, or whether we examine the transaction between Mu'taz and Sa'id (the third transaction), the plaintiffs did not show that Ali's rights were acquired without consideration or in lack of good faith.
- When I arrived here, I will reiterate that we are dealing with competition between a gift transaction and a sale transaction. This competition, according to the case law, is not a competition between transactions of equal weight. The interest of the buyer is stronger than that of the recipient of the gift, since the buyer paid consideration for the right he acquired, as opposed to the recipient of the gift. In Civil Appeal (Hai) 297/04 Diab v. Diab, [Nevo], the Honorable Justice Amit, sitting in the District Court, ruled that there is room to prefer a sale transaction that is late in time, if it was made in good faith and in consideration, even if the late transaction did not end in registration. See also Civil Appeal (Hai) 56946-05-20 Hamad Mahmoud Gadir v. Ibrahim Ben Ali Hujairat [Nevo] (8 June 2021).
The Honorable Justice Amit reiterated this opinion in the Supreme Court, in the judgment given in CA 1405/19 [Nevo], which was mentioned above, saying: "... As to the classification of the first agreement in time as a gift transaction, it leads to the fact that the right of the first person who did not register a warning note is rejected because of the second's right to time, even if the second did not include his right to registration" (paragraph 8 of the judgment).
- See also the words of the Honorable Justice Amit in CA 3684/15 Estate of the late Nadim Kamal z"l v. Estate of the late Anisa Nahas z"l, [Nevo] where it was written: "I was of the opinion that when the first commitment in time is for a gift, preference should be given to the late purchaser while he acted in good faith and in return, even if the transaction with him did not end in registration. This is also due to considerations of justice and various considerations of legal policy" (section 7).
- From this perspective and an overview of the chain of transactions here, it is impossible not to attribute weight to the fact that the actual competition today is between the plaintiffs and Said. between a gift transaction for which a warning note was not registered, and a sale transaction that ended with registration, and even the purchaser of the right according to which he sold part of his rights in another transaction (the sale to Basel). Against the background of all of the above, including with regard to consideration and good faith, I am of the opinion that considerations of legal policy and considerations of justice also justify giving priority to the rights of Said and to all those who purchased from him.
Conclusion
- In light of the summary, I determine that the sale agreement dated December 1, 2022, between Ali (and his brother) andMu'taz prevails over the gift agreement between Ali and the plaintiffs, and hence I order the dismissal of the claim in all its components.
Since the warning note registered in favor of the plaintiffs regarding Mu'taz's rights was recorded in order to 'secure' the alleged right of the plaintiffs, on which the hearing in the judgment revolved, and after I determined that Ali's rights were transferred to Sa'id in valid transactions that prevail over the gift transaction between Ali and the plaintiffs, there is no longer room for the warning note registered in favor of the plaintiffs regarding Mu'taz's rights, and it is hereby cancelled (note dated November 9, 2023, According to deed No. 60114/2023/1).