General Manager
20 Iyar 5756
May 9, 1996
Reference: 1396
In honor of
Gershon Schlissel
Secretary of the Vegetable Growers Association
Re: Compensation for the Cancellation of Potato Quotas
In connection with your question and the clarifications you requested related to compensation for the cancellation of potato quotas. Let me clarify:
In November 1994, the Ministry of Agriculture, the Ministry of Finance, the Vegetable Council and the Vegetable Growers Organization signed an agreement called "An Agreement on Compensation for Vegetable Growers, Following the Peace Accords."
In this agreement, in chapter 5, clause f, it was agreed that the amount of compensation to be given for a dunam of quota would be NIS 1,700.
It also states that it is possible to receive part of the compensation over the course of 3 years, and what is received will be deducted from the cost of canceling the quota.
According to what is stated in the aforementioned agreement, it is clear that at the end of the three years, i.e., in 1998, the growers are supposed to receive the amount designated for the cancellation of the quotas, minus the amount used during the three years, linked to the index.
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Jonathan is at his peak
General Manager
Copies: Dalia Harel - VP of Production and Economics
Ephraim Shalom - CEO of the Vegetable Council
Well, Mr. Basia, as the representative of the state and by virtue of his position as director general of the Ministry of Agriculture, writes to the growers that they are entitled – as they claim – to full compensation for the cancellation of the quotas. And that the words of the incumbent director general of a government ministry were like the whistling wind? Indeed, Mr. Bashia wrote what he wrote not only ante litem motam – that is, before the dispute arose in court – but also by virtue of his position as Director General of the Ministry of Agriculture. And the question is: Is there no country that is perceived for the statement of such a senior official as the director general of the ministry concerned? It should also be noted that Mr. Basia's letter preceded the government's decision to cancel its obligation to pay potato growers.
- In response to these affidavits, the State presented the affidavit of the representative of the Ministry of Finance, the Deputy Commissioner of Budgets, which was given in support of the State's response to the incentive to open the towers submitted to the District Court. In contrast to the detailed affidavits of the supporters of the towers' version, the affidavit of the representative of the Ministry of Finance was a formal affidavit confirming the state's arguments. And so, placing on one side the detailed affidavits in favor of the growers and with them the letters of Mr. Shochat and Mr. Basia, and on the other the formal affidavit of the treasurer, there is no doubt in my heart as to who is tipping the scales.
- Our opinion is, as stated, the opinion of the growers, to say that the grant to potato growers is intended to compensate them, at a fixed rate, for the cancellation of the production quotas they held. It seems that we can learn an analogy for our matter from another place. It is well known that the distinction made in criminal law between motif and intention is that the motif does not fall within the count of intention, even though it may and can testify to intention. The analogy for our case is self-evident: the motif – the far-fetched reason – for the abolition of the quotas was the agreement between Israel and the PLO – an agreement that opened the Israeli market to agricultural products from the Palestinian Authority. However, the immediate reason why the state took it upon itself to compensate potato growers was to cancel the quotas that supported the existence of the growers until the market opened. The quota system was a self-sustaining animal – it formed the basis for the main arrangements in the field of agricultural crops – and thanks to it, potato growers were able to sustain themselves. Against this background, the state authorities believed that the loss of that minister entitles the growers to compensation, hence the arrangement that was made. The abolition of the quota bill is what gave rise to the compensation arrangement, and as required by this, the growers are entitled to what they want.
- We will add that the conduct of the State after the conclusion of the agreement also supports the growers' version. Indeed, if the state had not believed that it was obligated to pay the growers, the government would not have been required to decide (on September 8, 1997) "to cancel the payment of compensation for the cancellation of potato production quotas due to the opening of imports from the territories of the Palestinian Authority..." If the government was of the opinion that the compensation to the potato growers depended on imports and that the contract did not obligate it to pay the potato growers the balance of the compensation, what is the reason for it decided to cancel its obligation to pay the growers what it was obligated to pay them? It is only that the government believed – and rightly so – that the potato growers were supposed to receive (in 1998) the "total payment" – so it was explicitly stated in the explanatory notes to the decision – and that it was required to cancel its obligation. Having seen the government's decision, there is therefore no doubt in our hearts that both parties – both the government and the growers – believed that the contract entitles the potato growers to compensation in the sum of NIS 1,700 without any connection to the import of potatoes from the Authority, and this was indeed the joint subjective opinion of the parties.
A Kind of Conclusion
- Thus, both the language of the contract, the circumstances and the supporting evidence, all of these lead to the conclusion that the intention of the contractors – which is the subjective purpose of the contract – was to compensate the potato growers in the amount of NIS 1,700 per dunam, similar to the compensation given to their friends who grew "other vegetables". Now that we have discussed that subjective purpose, we are no longer required to the objective purpose, but we cannot help but note that this too does not negate our conclusion so far. My colleague Justice Rivlin is of the opinion that the objective purpose of a contract-permission negates the possibility that the state will agree to pay compensation to growers except for their direct damages from imports. This conclusion was difficult for me, and I will answer the question: And what about the "other vegetables" growers? Why were they entitled to compensation without proving any damage? It is only that it was not the damage that led to the compensation of the growers. I cannot rule out that the state authorities decided on their own behalf to award compensation to the growers even without connection to the damage, as appears from clause 5 of the contract, in which the damage was not bound together, in principle, by compensation. It is possible, for example, that the state's decision was part of an overall negotiation; It is possible that the state asked to help the growers – and there is nothing wrong with that, too; And it is possible that other considerations were in front of her eyes. All of these fit well into the objective purpose of a contract-authority. Let us constantly remember that we are not talking about a regular commercial contract, but rather about compensating farmers for a state act. And about all this: Have we forgotten from my colleague that the compensation was paid – at least – also for the abolition of the quotas? And that a person from whom something of value was taken – and the quotas were a thing of value – is not entitled to compensation?
- I would therefore suggest to my colleagues that we accept the claims of the growers who are entitled to compensation from the state in the sum of NIS 1,700 per dunam due to the cancellation of the quotas for compensation from the state, regardless of any connection to the import of potatoes from the Palestinian Authority or to the damage caused, or not caused, to them as a result of such importation.
Was the state permitted in the circumstances of the case to retract its obligation in the contract?
- Now that we have come here, a question arises: Was the State permitted in the circumstances of the case to retract its obligation in the contract? My opinion in this context is the same as that of the Deputy President (ret.) Matza, and for his reasons. I am also of the opinion that in our case the conditions required for the release of the state from its obligation to potato growers were not met. True, the payment to the growers imposes a burden on the state treasury, but this burden, whatever it may be, is not sufficient to justify the release of the state from an explicit contract that it signed with its eyes open. The burden is on the state to honor agreements and commitments to which it has committed itself. The authorized representatives of the state negotiated and signed a contract that they signed consciously, deliberately, and after considering all the circumstances. and when the contract has been concluded and no real reasons have been found to get rid of its obligations, the state is obligated to fulfill it.
One last and important note
- One last thing, and it can be the main thing: the Apropim rule brought about a minor revolution in the laws of interpretation in general and in contract interpretation proceedings in particular. In the past, parties to a contract believed that they were masters of the private law they set for themselves; that subject to the law and public policy, they are the ones who decide what rights the contract grants and what obligations it imposes on the parties to it; And now it became clear to them – more precisely: after disagreements arose between the parties, it became clear to one of them – that a third partner had added himself to the intimate group, and that this partner – the court – was entering into a contract on the right and the left. And if we need examples of the court's deep intervention in the interpretation of a contract that the parties made between them, we will find these in the Apropim case and in the case before us.
However, it is a burden that we must say and also emphasize: these two cases that came before the court do not bear witness to the rule. It is important that we say this, and for this reason I have even decided to hold another hearing. Indeed, the judgment in the appeal was, in my opinion, inadvertently touched, and it is correct to reverse it according to it, but this is not the main thing. The main thing is that we should know and remember that there was no flaw in the Apropim rule in itself, even though it was possible to moderate the rhetoric that established the halakha. The difficulty lies in the spirit that Halakha responds to in all directions, a spirit of bursts that has begun to sweep away with it rules and laws that have been cast and have been with us for many years, and under which it has left us only general guidelines for the ways of interpreting a contract. But it is not the same wind that loses and destroys everything that stands in its way. The spirit is indeed an uncommon spirit, but we are in control of it. We have the power to imprison that spirit and restore it as a spirit found in the channels of the spirit that the law puts at our service. Indeed, our goal in our opinion is to stop the wind of bursts in its sweeping way, and to tame it so that we can derive from it the good in the law of Apropim. May our desire be in our hands.