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- The Petitioner's arguments focus on two levels. The first level concerns arguments to invalidate the Petitioner's proposal and the Committee's decision in light of the provision of section 59 of the Regional Councils Order and the rule prohibiting any conflict of interest. The second level relates to the manner in which the bids in the tender are evaluated and scored. It should be noted that in the petition the petitioner also raised additional claims, such as extraneous considerations and a defect in the protocol, but it seems that she abandoned them in the hearing, and in any event, no real basis was laid for them. I will therefore address below the two levels of argument that the Petitioner focused.
The Rule Regarding the Prohibition of Conflict of Interest - General:
- A basic rule in administrative law prohibits a public servant from being in a situation of conflict of interest between his public position and another interest in the matter before him, whether personal interest or otherwise (High Court of Justice 6299/21 Lawyers Association for the Promotion of Good Administration v. Kaabia Abash Hajajra Local Council (November 8, 2023)).
- There are three main reasons for the prohibition of conflict of interest. The first is the duty of loyalty of the public figure towards the public, which requires him to act fairly and in good faith, and to consider only relevant considerations relating to his position in the performance of his duties. The second is to prevent corruption in the public service and ensure proper administration. The third is the preservation of the public's trust in the public service and the fact that its actions are based solely on reasons of the public interest. In the latter context, real weight is given to appearances, as stated in the case law: "... The issue of visibility is also of great importance, since the appearance of justice and the public's trust in the administrative authority are important values that the laws of public law seek to protect from any precautions" (Appeal Petition/Administrative Claim 2378/12 Metropoli-Net in Tax Appeal v. Kochav-Yair Tzur-Yigal Local Council (September 12, 2019), para. 8).
- The prohibition on conflict of interest is preventive. It applies not only to an action that was done in a conflict of interest, but also to the very existence of a conflict of interest. Therefore, its applicability does not derive from the question of whether in practice the decision made was influenced by the conflict of interest and whether proper discretion was exercised. In this way, it differs from the administrative rule that prohibits the consideration of extraneous considerations or bias, which requires proof that in fact there was a defect in the aforesaid discretion exercised. The question being examined is whether there is a potential conflict of interest between the role of the public servant and a personal or other matter relating to him. This examination is made from an objective perspective of the point of view of a reasonable person who knows the details of the matter. It should be noted that the question of what is the level of probability required within the framework of the prohibition of a conflict of interest, a "real possibility" or perhaps a "reasonable concern", has been discussed more than once in case law without an unequivocal decision (High Court of Justice 531/79 Likud faction in the Petah Tikva Municipality v. Petah Tikva Municipal Council, IsrSC 34 (2) 566); Appeal Petition/Administrative Claim 24684-08024 Electra Afikim in Tax Appeal v. Superbus Transportation and Tourism in Tax Appeal et al . (October 20, 2024), paragraph 17 and the references therein).
- The prohibition regarding being in a conflict of interest is expressed in a long list of pieces of legislation on various matters. However, this is a rule that is a settled and rooted rule in Israeli administrative law, and its application does not require an explicit statutory prohibition (High Court of Justice 2419/94 Fried v. Mayor of Tirat Carmel (August 22, 1994), para. 3). According to case law, the absence of a statutory prohibition on a conflict of interest in a particular subject or field, or the existence of a partial statutory arrangement, does not necessarily indicate a negative arrangement regarding the applicability of the rule. In the absence of a clear indication that the statutory arrangement is exhaustive and creates a negative arrangement, the assumption will be that it does not detract from the application of the general principle prohibiting conflicts of interest (Likud faction, ibid., at p. 573). Therefore, when there is a statutory provision in the matter at hand, it must first be examined whether it falls within the scope of the matter. If this is not the case, it is necessary to continue to examine whether this indicates a negative arrangement with respect to the applicability of the rule prohibiting conflicts of interest and its applicability to the merits of matters in the specific circumstances.
Engagement of a local authority with an employee of the authority/his relative - Section 59 of the Regional Councils Order:
- The issue at the center of the dispute between the parties relates to the question of whether an engagement between the Council and a company owned by the spouse of the Council employee is prohibited by law.
- From a factual point of view, and as appears from the petition and its attachments and letters of reply, the owners of Ron Avodot are the spouse of the council employee and his brother, each of whom holds 50% of the company's shares. The spouse also serves as a director of the company and has the right to sign it (the company's bid in the tender, section 20; Appendix 3 to the petition).
- The issue of a contractual engagement between a local authority and an employee of the authority/his relatives is regulated by legislation dealing with various types of local authorities: municipalities (in sections 174 and 175 of the Municipalities Ordinance [New Version], hereinafter – the Municipalities Ordinance), local councils (in section 142 of the Local Councils Ordinance, 5711-1950, hereinafter – the Local Councils Ordinance) and regional councils. Our concern here is with a regional council, for which the law is found in section 59 of the Regional Councils Order, which states as follows:
"A council employee shall not, either directly or indirectly, neither by himself nor by his spouse, agent or partner, have any part or benefit in any contract or business done with, for or on behalf of the council, except for the matter that the employee has in his employment agreement or in the general agreement of the council's employees, and other than the contract regarding the receipt of services provided by the council to the residents; An employee should not be regarded as having a share or benefit as aforesaid, if his connection to the Council's business is as stated in section 89A(b) with respect to the members of the Council."