Civil Appeal Authority 11519/04 Yaffa Levkowitz v. Bank Hapoalim Ltd.

Application for leave to appeal against the decision of the Tel Aviv-Jaffa District Court of 18.11.04 inMiscellaneous Applications Civil 22778/04 granted by the Honorable Vice President Y.  Zaft

On behalf of the Applicant:      Adv. S.  Grossman

On behalf of the Respondent:    Adv. G.  Stern

1. I have before me an application for leave to appeal against the decision of the Tel Aviv District Court (the Honorable Judge Y. Zaft) of November 18, 2004, in which the Applicant's application for a temporary injunction to stay the proceedings for the realization of a mortgage registered in favor of the Bank-Respondent (hereinafter - the Bank) on the residential apartment of the Applicant and her spouse (hereinafter - the couple) was denied.
2. The couple, through intermediaries, took two loans from the bank, the total value of which amounted to ILS 957,000, which were intended to finance the business activity of the applicant's spouse. In order to ensure the repayment of the debt, two mortgages were registered in favor of the bank.  It should be emphasized that the mortgage forms were signed in the presence of the applicant's spouse's lawyer.  When the couple was unable to meet the repayments set out in the loan agreement, the bank began proceedings to realize the mortgage on the apartment.  As part of these proceedings, a receiver was appointed for the couple's rights in the apartment, and a date was even set for their eviction from the apartment.  On November 8, 2004, the Applicant filed an action for a declaratory judgment according to which the mortgage registered on her part of the apartment should be removed.  As part of the action, the Applicant filed a motion to stay the proceedings for the realization of the mortgage, which was rejected by the lower court on November 18, 2004.  The trial court was of the opinion that the Applicant's chances of winning the claim were not high.  This was based on the evidence that was placed before him, from which it emerged that the Applicant was aware that she was being signed on the mortgage documents in order to secure the repayment of the loans.  In addition, it was determined that the Applicant's application was tainted by a lack of cleanliness, as it concealed from the court the fact of the existence of two previous requests to delay the mortgage realization proceedings submitted by the Applicant to the Head of the Execution Office (on 20 June 2004) and to the Family Court (on 25 August 2004).  In addition, the court was of the opinion that the balance of convenience was also tilted in favor of the bank.  However, beyond the letter of the law, the court decided to delay the eviction date until the approval of the sale agreement for the apartment.
3. The main argument made by the Applicant is that she was not aware of the significance of signing the mortgage deeds, which entails the waiver of all the protections granted to her by virtue of the law. According to the Applicant, the Bank acted improperly when it failed to meet its obligation to explain to its customers the nature of the documents they sign and the risks involved.  In her view, the bank's action was not only done in bad faith, but also inconsistent with the disclosure and fiduciary duties imposed on it, whether by virtue of case law or by virtue of the law.  Therefore, the Applicant is of the opinion that the trial court erred in determining that her chances of winning the claim are slim.  Yes, it objects to his determination that she acted with a lack of cleanliness at the time of filing the claim.  As for the balance of convenience, it was argued that this balance is tilted in her favor, since if she is evicted from her apartment as part of the realization of the mortgage, then she and her children will be left homeless.
4. I did not find room to intervene in the decision of the trial court. From the material that was laid out before me, it indeed emerges, as the court below held, that the applicant did not have the wisdom to point to the existence of a prima facie right.  According to the accepted law, there is a presumption that a person's signature on a document is in fact evidence that he has given his consent to the content of the document, after reading and understanding its essence (Civil Appeal 467/64 Switzerland v.  SandorIsrSC 19(2) 113, 117).  This is certainly true when we are dealing with such essential documents, such as a mortgage deed (see in this regard, Civil Appeal 1548/96 Union Bank of Israel v.  LupoIsrSC 55(2) 559; Civil Appeal 6645/00 Arad v.  Even, IsrSC 56(5) 365, 375-376).  In her interrogation, the Applicant admitted to an affidavit that she was aware that she had signed forms for pledging her rights in the residential apartment.  This, while she wrote in her affidavit that she understood that she was signing a guarantee for loans taken by her spouse.  However, she claimed that the significance of signing the documents and the consequences that derive from it were not sufficiently clarified to her.  In this regard, it has already been ruled that signing a mortgage document blindly relying on the advice of an attorney or spouse does not in itself constitute a sufficient reason to determine that the agreement is invalid (Civil Appeal 1548/96 above).  Moreover, according to the provisions of Regulation 16(a) of the Real Estate Regulations (Management and Registration), 5739-1969, before the mortgage is approved, the lawyer is obligated to explain to the couple the nature of the transaction they are about to execute and the legal consequences deriving from it.  The bank may assume upon receipt of the mortgage deed signed by an attorney that these explanations were indeed given to the couple.  Moreover, since the applicant signed the mortgage deed in front of a lawyer who did not represent the bank or at the bank's branch, it cannot even be claimed that she was misled by the bank at the time of signing.  In addition, I am of the opinion that the Applicant has not been able to refute the ruling of the trial court regarding the lack of cleanliness involved in the application.
5. I am prepared to assume that in terms of the balance of convenience, the scales are tilted in favor of the Applicant. This is not enough, when in the matter of the prima facie right, the bank has a conspicuous upper hand.

6. Therefore, the law of the motion to dismiss is absolute. Since no response has been requested regarding the application for leave to appeal, no order for costs will be made.

Granted today, 30 Sivan 5765 (7.7.05).