Supreme Court Dismissed Both Appeals in Dispute Over Swiss Account

How the Dispute Arose

Mordechai Ben David and Benda Magnetic Ltd. operated a joint venture with Yael and Ilan Glassman, and Michal and Ronen Reichlis. The original lawsuit, valued at NIS 6,052,369, addressed, among other things, Ben David’s claim that he had transferred $420,000 to the partners into an account in Switzerland and had given them an additional $40,000 in cash. The District Court determined that the evidence presented did not prove that the defendants had received the funds, and on May 5, 2010, ordered Ben David to pay them NIS 1,702,210, plus linkage differentials and interest.

The Previous Judgment by Consent of the Parties

Both parties appealed the original judgment, but agreed that the Supreme Court would determine the amount by way of settlement under Section 79A of the Courts Law [Consolidated Version], 5744-1984. In a judgment issued on April 4, 2012, payment of NIS 950,000 at its value as of December 21, 2010, was ordered; the amount later reached NIS 2,600,000. Ben David subsequently sought to set aside the final judgment, claiming that a change in Swiss legislation would enable the disclosure of information about the bank account.

Why the Action to Set Aside the Judgment Was Dismissed

The new action was heard by the Tel Aviv–Jaffa District Court in CC 12852-09-14. The Court permitted use of the mechanism provided for in the Legal Assistance Between States Law, 5758-1998, but the plaintiff was unable to obtain evidence of fraud: the account holder, Rafael Naveh, objected to the disclosure of the banking information, and the plaintiff failed to provide the information required to summon him. On February 18, 2020, the Court dismissed the action, ruling that after more than five years without new evidence, the principle of finality of litigation outweighed the plaintiff’s interest in continuing to search for evidence. Ben David was ordered to pay costs of only NIS 5,000.

What the Supreme Court Decided

The Supreme Court dismissed both appeals—CA 2455/20 and CA 2785/20. It explained that a final civil judgment may be set aside because of fraud or new evidence only in rare and exceptional circumstances, and that the evidence must carry real weight, affect the outcome, and have been unobtainable earlier through reasonable diligence. The Court also refused to admit a new private investigator’s report: the applicant did not explain why it had not been submitted to the District Court and did not establish that it was of material significance. The cross-appeal filed by the other party seeking an increase in costs was also dismissed, but at the conclusion of the proceedings Ben David was ordered to pay the respondents an additional NIS 25,000 in costs.

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