The main facts that need to be addressed
- The Patriarchate's role in the fraud affair: The beginnings of the proceeding before us, as will be recalled, in a serious fraud affair involving land owned by the Patriarchate (hereinafter: the real estate). These lands are leased by the JNF until the years 2051-2052, and in view of the imminent expiry date of the lease, the JNF responded in 2000 through its subsidiary - Himanuta - to inquiries initiated by parties posing as realtors (hereinafter: the fraudsters), who presented a false representation that the Patriarchate was interested in executing a transaction to extend the land lease for a long period. Based on the aforementioned misrepresentation, Himanuta transferred $16 million to the fraudsters, and in addition $4 million to Adv. Weinroth, who served as the fraudsters' attorney, and in return received forged documents that supposedly anchor the "real estate transaction" (hereinafter: the fraudulent transaction). These documents were used by Himanuta to bring about the registration of warning notes in its favor regarding the rights in the land (hereinafter: the warning notes). It should be emphasized now: the patriarchate not only did not receive "a single cent" as a result of the fraudulent transaction (Criminal Case (Jerusalem District) 5243-12-10 State of Israel v. Sussman, para. 54 [Nevo] (September 11, 2012)), but it was not at all a "party" to the fraudulent transaction - a transaction made between the fraudsters and Himanuta (this event will be referred to hereinafter: the fraud or the fraudulent event).
- The negotiations for a "compromise": Following the fraud incident, indictments were filed against the fraudsters, and in parallel with their investigation, as early as 2000, the Patriarchate filed a claim in the Jerusalem District Court for declaratory relief, according to which the fraudulent transaction was invalid, and that the warning notes recorded in favor of Himanuta should be deleted (Civil Case 2307-00). [Nevo] hereinafter: the Patriarchate's claim). This lawsuit was conducted for many years (until it was received in a judgment of December 13, 2013), and at some point during these years, it was motivated, apparently by Adv. Weinroth (and this will be detailed below), negotiations between the Patriarchate and Himanuta in connection with the status of the land and the warning notes that were recorded on the basis of the fraudulent transaction (hereinafter: the negotiations or contacts). The main party on behalf of the Patriarchate who took part in the aforementioned contacts was Patriarch Theopoulos Giannopoulos (hereinafter: Patriarch or Patriarch Theopoulos), who was elected by the Holy Synod, the directing and executive supreme body of the Patriarchate (hereinafter: the Synod), to serve as Patriarch of Jerusalem on August 22, 2005. It is important to note that at the time of the negotiations with Himanuta, Patriarch Theopoulos had not yet received the official letter of recognition (High Berat; hereinafter: the letter of recognition) from the State of Israel, and this matter was one of the issues discussed in the framework of the agreement and dialogue between the parties (on the change of men that took place in the Patriarchate's representation as a trigger for negotiations, see Adv. Weinroth's affidavit, in paragraph 10).
- The evidence indicates that the contacts included a number of meetings that took place between 2005 and 2008 in various places, as well as correspondence between the parties' counsel during this period. As part of the negotiations, two possible compromise alternatives were discussed, according to one of which the Patriarchate would pay Himanuta in exchange for the deletion of the warning notes, the creations of the fraudulent event (hereinafter: the default agreement); Whereas according to the second, the Patriarchate will be willing to extend the lease of the land by the JNF in exchange for payment (hereinafter: the alternative agreement). On March 12, 2007, a meeting was held in Adv. Weinroth's office (the matter of which will be expanded below), during which the document at the center of this proceeding was read, and two appendices attached to it gave expression to the two aforementioned compromise alternatives. In particular, a mechanism was also established that ostensibly allows the Patriarchate to choose between these two alternatives, with the default being the payment of compensation to Hymanuta in the amount of $13 million to settle its claims in connection with the fraudulent transaction, and to delete the warning notes. Subsequently, on December 24, 2007, the Government of Israel granted the letter of recognition to the Patriarch, after which a number of other meetings and correspondence were held between representatives of the parties. There is no dispute that at this stage, after the letter of recognition was given, disagreements arose between the Patriarchate and Himanuta with respect to certain details in the outlines that were discussed, and these led to changes in the draft of the "Settlement Agreement" that was formulated up the road. Finally, after a meeting held on April 15, 2008, the Patriarchate withdrew from the negotiations.
- The motives of the main actors: There is no doubt, therefore, that there were indeed negotiations between the Patriarchate and Himanuta regarding the consequences of the fraudulent event, and that there was even considerable progress during these negotiations. The main question raised by the appeals in this case is whether these negotiations resulted in an agreement binding on both parties, and to the extent that the answer is negative, whether the Patriarchate's withdrawal from the negotiations was done in bad faith. In order to answer these questions, it is essential to understand the motives and interests, at least the overt ones, that guided the main players in these negotiations - Himanuta, the Patriarchate, and Adv. Weinroth.
- Himanuta, as noted, is a company that is under the control of the JNF, and it seems that there is no dispute that it fully represented the wishes and motives of the JNF in the framework of the affair (for this reason, and for the sake of convenience, I will also use the name of the JNF, under the name of Himanuta, from time to time). As the state's unofficial representative, Himanuta sought to derive from the contacts with the Patriarchate the extension of the lease period in the land, and to the extent that this was not possible, to remedy the damage caused by the fraudulent event to the highest possible amount (for the JNF's two-headed experience in this context, see paragraph 7 of the affidavit of Mr. Avraham Duvdevani, who served as associate chairman of the JNF's board of directors at the relevant times (hereinafter: Duvdevani)). In this context, it should be noted that this last goal of Himanuta's contacts with the Patriarchate, i.e., to heal the damage caused to it as a result of its fall into the trap of the fraudsters, can be learned from the sum that Himanuta intended to receive in the framework of these contacts - $13 million - which reflects the difference between the amount it spent as part of the fraudulent transaction and the amount returned to it until then ($7 million; see in this regard, For example, Adv. Weinroth's cross-examination, on p. 94 of the minutes of the hearing of February 15, 2018).
- As forpatriarchy, the evidence and the determinations of the trial court indicate that the latter's conduct in the framework of the negotiations was motivated by two main interests. One interest was her desire to delete the warning notes that were recorded in relation to the land in Himanuta's name, as part of the fraud incident. At the stage when the contacts between the parties took place, the legal fate of this registration, like the fraud incident as a whole, had not yet been decided (since the Patriarchate's lawsuit was decided, as may be recalled, only in 2013), when Himanuta refused to delete the warning notes, and used them as leverage to pressure the Patriarchate to get what it asked for. To this it should be added that at some point up the road, a business relationship was formed between the Patriarchate and a third party, a group led by Mr. David Sofer (hereinafter: Sofer and the Sofer Group, respectively), who was interested, among other things, in the acquisition of the lease rights in the land, when the consideration offered by him was supposed to cover, among other things, the "fees for the release of the warning notes" that the Patriarchate would pay to Himanuta (see the testimony of Mr. Sofer, on page 24 of the minutes of the hearing of November 26, 2019). The second interest lies in the Patriarchate's desire for the State of Israel to officially recognize the appointment of Patriarch Theopoulos, who was designated to be the new Patriarch of Jerusalem. Indeed, as the trial court held, it appears that "a sword [] was raised over the head of the patriarch" in this context, i.e., that the patriarch's desire for the state's recognition of his appointment served as leverage on the part of the JNF to promote the contacts that took place between the patriarchate and it (see paragraph 138 of the trial judgment, and the sources cited therein). It should be noted that the negotiations between the parties continued even after a letter of recognition was issued by the Israeli government (on December 24, 2017), but as noted, it is clear that this motive did not stand alone, and that the Patriarchate's desire to delete the warning notes worked alongside it.
NoteIt should already be noted that it is difficult not to get the impression that the source of the two motives mentioned is the pressure exerted on the patriarchy, even if indirectly, by the state authorities (through Himanuta), who aspired to conclude the fraudulent event by way of entering into an agreement.a settlement" with someone who, as stated, was not a party to the fraudulent transaction, While trying to rely on rights They didn't stand up to them at all. As forDelete the warning notesThus, the birth of these people was, as we recall, a sin. Indeed, as Himanuta emphasizes, at the stage when the parties conducted negotiations, a clear legal decision was not yet made regarding the validity of the fraudulent transaction. However, the evidence indicates that even before that, it was understood on the part of Himanuta "That the chances that this is a real deal will be decided are very low... Fringe, Small, Zero" (the words of Himanuta's counsel, Adv. Elhanani, in the course of his cross-examination, on p. 91 of the minutes of the hearing of December 14, 2017), and yet she chose not to delete the warning notes, and even to use them as leverage to pressure the Patriarchate. Asher For the official recognition of the PatriarchAfter all, Patriarch Theopoulos had nothing to do with the affair of The Scam (which took place while his predecessor, Patriarch Diodorus Krivalis, was on the throne), so that the binding of the recognition of his appointment in relation to his conduct in relation to the "compromise" negotiations was baseless, to say the least. Although I am prepared to accept that these pressures are not sufficient to determine that the very conduct of the negotiations amounts to bad faith on the part of the JNF, or that they are capable of upholding the elements of oppression or coercion as claimed by the patriarchy (and see paragraph 20 of my colleague's opinion, in this context), in my opinion there is no doubt that they should be taken into account in the framework of our discussion - and I will indeed do so later in my remarks.
- And now, Weinroth. There is no dispute that Adv. Weinroth played a central role in advancing the negotiations for a settlement, the matter of which is the focus of this appeal. Mainly, and alongside leading the negotiations between the parties (see paragraphs 10-12 of Adv. Weinroth's affidavit; as well as Adv. Elhanani's testimony, at p. 115 of the minutes of the hearing of December 14, 2017), it appears that he was an active party in formulating the particular, and subsequently initiated, designed, and hosted its reading (see: paragraphs 56, 72 and 142-143 of the trial judgment; testimony of Adv. Elhanani, at p. 59 of the minutes of the hearing of December 14, 2017; See paragraphs 20-24 below). It is therefore clear that Adv. Weinroth's personal attitude to the affair that is the subject of this proceeding, and to the legal dispute that arose in its wake, is a significant element for the purpose of our discussion.
- In this context, it should be clarified in a clear and sharp voice: Contrary to the impression that may arise from reading Himanuta's arguments, Adv. Weinroth cannot be regarded as a neutral mediator in the negotiations that took place between the Patriarchate and the JNF - far from that. Weinroth was a major player in the fraud affair regarding the patriarchy's lands from the very beginning, and he had a clear and tangible interest in the parties reaching an agreement after it exploded: in the first chapters of the plot, Adv. Weinroth was the one who contacted the relevant parties in the country on behalf of the fraudsters in order to set in motion the deal, which later turned out to be a fraudulent transaction, and he was the one who represented the fraudsters throughout the contacts that took place between the parties. This includes the preparation of the agreement that was at the center of the deception, until the "deal" was executed (see Criminal Appeal 4354/08 State of Israel v. Rabinovich, at paragraphs 9-10 of the judgment of Justice Miriam Naor and Justice Yoram Danziger [Nevo] (April 22, 2010)). Adv. Weinroth also served as a trustee for the transfer of the funds, and in this framework, Himanuta transferred the consideration money to him in the sum of $16 million, along with a total of $4 million for transaction costs - most of which remained in his pocket. When it was discovered that the transaction originated in forgery and fraud, the JNF sought to return to it, among other things, the salary received by Adv. Weinroth, but the JNF refused to do so. Against this background, and as Adv. Weinroth himself admitted, a settlement agreement between the Patriarchate and Himanuta was, at the time, a last resort for him to save the fees he received as part of the fraud affair (see Adv. Weinroth's affidavit, at paragraph 39; and his cross-examination, at p. 91 of the transcript of February 15, 2018). As detailed in my colleague's opinion, the final draft of the settlement agreement between the parties was attached to the text of the letter of protest, transferring Himanuta's rights of claim against Adv. Weinroth to the Patriarchy, when the latter, according to the evidence presented to the trial court, intended to exempt Adv. Weinroth from payment (see paragraph 93 of my colleague's opinion). In simple terms, the significance of the conclusion of an agreement between Himanuta and the Patriarchate, on the part of Adv. Weinroth, was ostensibly the conclusion of the fraud affair with regard to him, while leaving the fees he received in the framework of it in his possession. Moreover, Adv. Weinroth's personal interest did not end with the libels of the settlement agreement, but continued even within the framework of the present proceeding. As revealed in his testimony in the course of his cross-examination, if the claim against the Patriarchate is accepted and it is obligated to compensate Himanuta, then Adv. Weinroth's intention was to ask back the sum he transferred to the JNF as part of a settlement reached in the framework of the preliminary proceeding (which received the force of a judgment on January 14, 2013) - $5.5 million (see the minutes of the hearing of February 15, 2018, at p. 108; and see paragraph 100 of my colleague's opinion).
- Weinroth's activity in connection with the circumstances of this case must therefore be examined, taking into account the background described. This is both in view of his involvement in the earlier stages of the story, and given his clear interest in promoting the settlement agreement at the time, and in accepting Himanuta's claim afterwards. It should be said from now on: not a neutral intermediary, but a real interested party, whose conclusion that the agreement in question is valid serves him. As will be clarified later on, this conclusion also has weight in examining the validity of the particular.
With these clarifications in relation to the facts, we will briefly present the legal alternatives that exist to the classification of the particular.