"As a side note, it should be noted that in my opinion, the signing of mortgages should be done at the bank's branches and in front of the bank's representatives (and not in the homes or place of business of the mortgages through the mortgagees' representatives), when the bank's representatives will be responsible for the disclosure of all the relevant details to the mortgages."
I will also join his recommendation.
All that was said was known: banks are subject to disclosure duties, and breach of these obligations entails a violation of the validity of the agreement that was signed, due to the customer's ignorance. The bank's obligation is to provide the customer with significant information, based on the perception of the power disparities between them resulting from information gaps. The provision of the information is intended to bridge the gap between the bank and the customer, which is likely to maximize the benefit inherent in the transaction. for both sides and even for the economy as a whole (Plato-Shinar, supra, at pp. 211-212). In our case, as stated, this is not a figure whose importance can be disputed. The amount of the existing debt is a material figure that belongs to the framework of the duty of disclosure in the narrow sense, and the bank cannot exempt itself from disclosure of this figure. It seems that the bank can only complain about itself, for not making it clear to the respondent that at the time it signed the mortgage, there was already a debt law investigation in the account in the amount of about half a million ILS. The bank must conduct an orderly procedure in which all the relevant details of the mortgage transaction, and especially the debt, will be brought to the attention of the other party to the mortgage contract, and especially the debt first, if there is one, which the mortgage is also intended to guarantee.
- To be precise: the bank is interested in giving loans and making a profit on them. Providing loans is one of the bank's main activities. However, the bank needs adequate collateral against the loans it grants. The bank has a customer who has accumulated debts and is seeking credit in a private or business account. The bank demands collateral and the customer offers to mortgage an apartment shared by the customer and his wife. In this situation, which is a common situation, there is a built-in conflict of interest between the bank and the customer's wife. The bank knows that the disclosure of the extent of the debts in the account can lead the customer's wife to refuse to mortgage the apartment. The bank may sometimes get its hands on its head regarding past debts. The bank may wish not to disclose past loans, but the customer's wife needs the information in order to make an informed decision. Experience shows that even though there are no secrets between many spouses, the client will not always disclose all the information to his wife. Sometimes, unfortunately, it will also give false information. This is where the bank's duty of disclosure towards the other contractor, the customer's wife, comes into play. The disclosure of the information will enable the other caller to make a decision that is aware of the required data. The bank's obligation to disclose is sufficient to resolve the inherent conflict of interest.
- At this point, the bank further argued that the district court ignored the court's ruling Peace According to which the respondent was aware of the debts created by her husband, and if so, this is irrelevant whether he was obligated to update the Respondent regarding the credit status of the account, or not. In any event, according to the appellant, these are data that were known to the respondent. In my opinion, if it was indeed proven that the Respondent knew about the existence of a debt in the Trust Account, such as the size of the debt (not even exactly); It was also proven that the bank knew this, and indeed there was no reason not to recognize the validity of the mortgage deed. As I noted above, the duty of disclosure is a purposeful obligation. The duty of disclosure is intended to disclose information where the knowledge of this information is not within the knowledge of the party to whom disclosure is obligated. On the other hand, when the information is open, and when both parties know it, there is no point in applying a "procedural" disclosure duty that is detached from the actual knowledge of the parties. However, in our case, no such knowledge on the part of the respondent was proven. The District Court noted that it was aware of the Magistrate's Court's determination that the Respondent knew that she and her husband had debts. However, it was also held that "In light of the manner in which her husband managed the accounts and transferred money from one account to another, [the respondent's - M.N.] knowledge of the amount of the debt, if at all, in the account is also highly doubtful". In other words, the bank was unable to prove that the respondent was otherwise aware of the amount of the debt, and that it was only for this reason that the bank considered itself exempt from bringing the matter to its attention. As for the Magistrate's Court's rulings, determinations to which the Bank referred extensively, all that was determined in this context was that the Respondent knew that the couple "had debts", and this in light of the Respondent's testimony in court according to which her husband told her "that they spend more than any average family". This testimony does not constitute evidence that the respondent knew the amount of the debt, in the account of the private company, even approximately, at the relevant date. Either way, the Magistrate's Court's findings were given in the framework of a decision regarding temporary relief, and therefore we are dealing only with prima facie findings.
- As to the arguments regarding the meaning of the signature by the lawyer: this procedure is of the utmost importance, the reason and purpose of which are not prejudiced by the aforesaid. According to the Real Estate Regulations, the lawyer before whom the deed was signed has a very important role. The lawyer, as also Attorney Tulchinsky did in our case, testifies that a certain mortgagee appeared before him and that after the lawyer identified him and explained to him the essence of the transaction he was about to carry out and The legal consequences arising from it, and after he was convinced that this had been properly understood for the mortgagee, the mortgagee signed the mortgage deed of his own free will. The explanation regarding the nature of the transaction and its legal consequences is very valuable. However, it was rightly held that signing in front of a lawyer does not exempt the bank from its own obligations. The Bank He wishes to rely on the Real Estate Regulations as exempting him from liability for the mortgagee's knowledge of the existence of a previous debt, whenever the signature procedure detailed in the Regulations has been fulfilled. However, the Real Estate Regulations regulate the process of registering a transaction with regard to signing before a lawyer and before the Land Registrar. The Real Estate Regulations, whether they were fulfilled or not, do not exempt other parties from their own obligation (inter alia, according to other legislation). It seems that the present case illustrates the reason for this very well: Attorney Tulchinsky fulfilled his duty and approved the signature of the respondent and her husband on the mortgage deed before him, only after he gave them the explanation necessary for their signature. However, as he was an external lawyer, Attorney Tulchinsky could not provide the Respondent with any information regarding the extent of the credit taken by the husband prior to signing the mortgage. The bank should have filled the aforesaid gap with the respondent's knowledge. To be precise: the bank claimed that there was no reason to attribute weight to the identity of Adv. Tulchinsky as an external lawyer to the bank. In this regard, it should be clarified that the fact that he is an external lawyer has no significance in itself. At the heart of the judgment was the question of whether the bank would inform the respondent of the amount of the debt. In this regard, if the bank had proved that the issue of the amount of the debt was brought to the attention of the respondent in one way or another, the question of whether the lawyer before whom the note was signed would not have been of any importance. Even a lawyer who works for a bank who does not know that there is a debt will not discharge the bank's obligation. As to the arguments regarding the failure to summon Attorney Tulchinsky and the husband to testify, I will briefly note that these testimonies did not assist the bank. Moreover, as mentioned, Attorney Tulchinsky, being an external lawyer, could not know the amount of the existing debt.
- From the above, it emerges that even though the respondent knew - contrary to her claim - that she was signing a mortgage deed and even signed the transaction in front of a lawyer - this transaction cannot be given full validity, in view of the non-fulfillment of the duty of disclosure with respect to a material and fundamental figure of the transaction. Indeed, Possible, as the bank claimed, that the respondent was aware that it was signing a mortgage transaction and that it was signed by it as a function of the economic interests it had at the time. Moreover, it is possible that the respondent knew that the couple had debts at the time, and it is even possible that she had information regarding the scope of the various debts. But in our case, we are dealing with speculations. What has been proven is that the bank did not bring to the attention of the Respondent that at the time of signing the account there was already a past debt of close to half a million ILS. In this transaction, the Respondent agreed to mortgage her and her children's residence, in exchange for an unlimited credit in the sum. It is not excessive to demand that the bank clarify to the respondent the existence of the debt and its amount. There may be circumstances in which the claim of a party to the contract with the bank that he signed the mortgage transaction voluntarily will not be accepted, but this is invalid due to a breach of the duty of disclosure. It all depends on the concrete circumstances that have been assumed.
I will clarify that in my opinion, the disclosure of the information does not raise a problem in the area of the bank's duty of confidentiality towards its customer: the bank, which is in a position of power, can tell its customer - if you give me sufficient collateral Otherwise There will be no need to disclose information. However, if you wish to mortgage a joint apartment between you and another - receipt of the mortgage is conditional, as far as the bank is concerned, on your approval to provide full information to the other contractor. The customer, who needs to register a mortgage, will agree to the disclosure (or give some other collateral).