Civil Claim 36383-03-10 Hazan v. Tefahot Bank: claim to enforce arrangements in a mortgage enforcement dismissed (2015)

What this page is based on

This page is based on the full text of the judgment in Civil Claim 36383-03-10, as published on a law firm's website. We did not find the judgment on the courts' website. In the heading of the judgment the defendant is "Tefahot Israel Mortgage Bank Ltd"; the publishing website presents the case as a claim against Bank Mizrahi Tefahot. The names of the bank employee, the receiver and counsel have been omitted.

Background: a mortgage enforcement that lasted years

The judgment was given on 2 August 2015 by the Jerusalem Magistrates' Court, Judge Einat Avman-Muller. According to the judgment, the couple Moshe and Pnina Hazan took a loan from the bank in 1994 against a charge on their home in Tzur Hadassah. Because of arrears, the bank took steps to collect the arrears as early as 1996, and in 2000 a mortgage enforcement file was opened at the Execution Office and a receiver was appointed to sell the house.

Many proceedings followed. The couple's claim against the receiver was dismissed on 7.3.2010, and a damages claim they had filed against the bank in the District Court was struck out, after which this claim was filed. The sale of the house was approved and the couple were evicted, but according to the judgment they moved into a caravan on an adjacent plot. The buyers asked to cancel the sale, and the sale was cancelled. According to the receiver's testimony, the enforcement proceedings were still continuing when the judgment was given.

What each side argued

The couple argued that the bank had undertaken several times that the house would not be sold, and that four agreements had been made between them: in August 2001, November 2001, December 2004 and February 2006. According to the claim, the bank agreed to let them return to the house, cancel exceptional interest, reschedule the debt and compensate them, and failed to do so. They asked to enforce the agreements and to be compensated for their eviction, the loss of their property and distress, and a 50% psychiatric disability of the female plaintiff was also claimed, based on her own expert. The amount of compensation claimed is not stated in the judgment.

The bank argued that there had been no agreements or undertakings at all, that the claim of agreements was raised belatedly and had not been made in the earlier District Court proceeding, and that the couple had rejected every settlement offer made to them.

What the court decided

The court found that over the years the bank had made genuine attempts to end the proceedings by agreement, but that at no stage was an enforceable agreement formed. On each of the alleged agreements:

August 2001: a letter from the bank offered to return the borrowers to the mortgage track if they paid the arrears, NIS 138,470, within 30 days. The court held that even if this was an offer, there was no evidence that the borrowers told the bank they accepted it, so no contract was made. It also noted that the approach to the bank had been made without mentioning that the sale of the house had already been approved, and that the bank withdrew once the mistake came to light.

November 2001: a payment of NIS 10,000 on 27.11.2001 was made, according to the receiver's letter and to a letter from the plaintiff himself, on account of the debt and not as part of an arrangement.

December 2004: at a meeting with the bank no concrete offer was made, only a promise to look into options. It then emerged that approval of the sale was pending before the Supreme Court.

2006 to 2009: only a general outline was raised. On 9.7.2009 Judge M. Ravid of the District Court proposed a settlement that included a reduction of NIS 200,000 in the debt, and the couple rejected it, by their account because they were not willing to give up their claim against the receiver.

Since no agreement was proved, the court did not discuss damages, noting that no evidence of their amount was brought and that the female plaintiff did not file an affidavit. The claim was dismissed, and the couple were ordered to pay costs and legal fees of NIS 7,500 out of the security deposit. At the end of the judgment, the judge expressed the hope that the matter would be resolved by a comprehensive settlement.

What it means for customers

The judgment shows that, in mortgage enforcement, conversations, meetings and general proposals are not an agreement. A borrower who receives a written offer from the bank should accept it in writing, within the stated deadline, and keep a record. A payment received "on account of the debt" does not necessarily show an arrangement. This is a Magistrates' Court judgment decided on its own facts, not a binding precedent, and it says nothing about the bank's conduct in other cases. Related guides: mortgage arrears before enforcement and enforcement proceedings against the bank.

Sources

• Civil Claim 36383-03-10 Hazan v. Tefahot Israel Mortgage Bank, full text of the judgment (law firm website, Hebrew)

Frequently asked questions about court rulings against Mizrahi Tefahot Bank

Source grade: Full text, verified. This article was written from the text of the decision itself.

Verified against the full text of the judgment, published on a law firm's website (not on the courts' website). Judge Einat Avman-Muller. The amount of damages claimed is not stated in the judgment. The sources we opened contain no information on an appeal.

Sources

1. https://ygoldlaw.co.il/litigation-lawyer/ruling/%D7%97%D7%96%D7%9F-%D7%A0-%D7%91%D7%A0%D7%A7-%D7%9E%D7%96%D7%A8%D7%97%D7%99/

How to cite

Civil Claim 36383-03-10 Moshe Hazan and Pnina (Perla) Hazan v. Tefahot Israel Mortgage Bank Ltd, Jerusalem Magistrates' Court, 02.08.2015. Source: Net HaMishpat (Israeli courts database), case Civil Claim 36383-03-10 Moshe Hazan and Pnina (Perla) Hazan v. Tefahot Israel Mortgage Bank Ltd.