The Supreme Court upheld a judge's ruling in favor of a bank, despite the bank's being a creditor of her father

The Senior Attorney, his Daughter the Judge, and the Debts to Discount Tel Aviv Magistrate's Court Judge, Sigal Ressler-Zakai, presided over a monetary lawsuit against Discount Bank and denied it at the same time that a financial dispute was ongoing between the Bank and her father, the well-known attorney Yehuda Ressler • the District Court disqualified the Judge and overturned her judgment because of a "feeling of discomfort." The Supreme Court however did not see it as improper

30.11.15| Ma'anit Chen

ttorney Yehuda Ressler, a well-known lawyer in Israel, fell into heavy debt to Israel Discount Bank in recent years, until, in November 2014, it was decided that Ressler would vacate his office on King David Street in Tel Aviv so that it could be sold by the Bank to collect the debt. At the same time, and despite the creditor-debtor relations created between Att. Ressler and the Bank, the daughter of the renowned lawyer, a Judge in the Magistrate's Court in Tel Aviv, Sigal Ressler-Zakai, heard a lawsuit filed against Discount Bank and even denied it. The District Court overruled the Judge's decision out of a "feeling of discomfort." However, the Bank appealed to the Supreme Court, which accepted the appeal, overturned the decision of the District Court and ruled that Ressler-Zakai's judgment in favor of the Bank, her father's creditor, should be upheld.

The Supreme Court explained its decision by stating that no link had been proven between the branch of Discount Bank dealing with the affairs of Att. Ressler, and the branch of the Bank involved in Discount’s dispute with the plaintiff, which was heard by Ressler's daughter as the Judge. Judge Elyakim Rubinstein ruled that the judgement should not be reversed only for the sake of the appearance of justice, where there is no objective suspicion of bias. "The damage to the appearance of justice in this case, insofar as it is raised as a subjective element of 'discomfort,' does not attain a level that justifies reversing the ruling of Judge Ressler-Zakai," he ruled.

The appearance of justice

The affair began in 2007, when Gad Werkstell filed a compensation lawsuit for two million shekels against Discount Bank, claiming that the Bank had given a mortgage to a business partner of his, based on a document in which his signature had been forged. However, one Saturday, while the case was still pending, Werkstell went to the home of Justice Meir Shenhav, who heard the lawsuit in its early stages, and gave him an envelope with confidential documents, whose content remains unknown to this day. Following this, Justice Shenhav was forced to disqualify himself from presiding over the suit, and the Judge who received the case for hearing was Justice Ressler-Zakai.

After a time, Ressler-Zakai also received an envelope sent to her by Werkstell, allegedly sent by the Commissioner for Complaints against the Judiciary at the Ministry of Justice. Ressler-Zakai refrained from opening the envelope so the plaintiff's attempt to disqualify her failed. Ressler-Zakai heard the lawsuit to its end, and on April 1st 2014 handed down a judgment which rejected the claim against the Bank in full, on grounds of running of the statute of limitations and the absence of negligence on the part of the Bank.

Werkstell filed an appeal from the judgment of Ressler-Zakai to the District Court, wherein he stated that it had come to his attention that during the period preceding the judgment, the Judge's father, Att. Ressler, had been involved in a large financial dispute with Discount Bank, because of debts of millions of shekels in respect of a loan he had taken and which he had not been able to repay. In a separate motion that he later filed, the plaintiff sought to disqualify Judge Ressler-Zakai retroactively and to set aside her ruling in favor of the Bank. This, he argued, was out of a concern that the Judge had rejected his monetary claim against the Bank, in an attempt to cause the Bank to ease its treatment of her father in the financial dispute between them.

The District Court asked for Judge Ressler-Zakai's response to the disqualification motion. In her response, the Judge noted that she was not involved in the dispute between her father and the Bank, and was not even aware of it, as her father hid the matter from his family because of the shame he felt. After hearing the Judge, the District Court ruled last July that while it accepts her version, expression must also be given to the principle of the appearance of justice. The Court ruled that a "feeling of discomfort" exists due to the coincidence and the timings, and because of the fact that at the time of the judgment the Bank was conducting proceedings to liquidate the office of Att. Ressler who, for his part, tried to prevent the eviction.

The District Judge noted that as the Judge denied the motion of the plaintiff Werkstell to hear additional witnesses before handing down the judgment, there was actually a case for a flaw in the fact of Ressler-Zakai presiding over the case. Accordingly, the District Court accepted the disqualification motion and ordered the disqualification of Ressler-Zakai retroactively, set her judgment aside, and remanded the case to the Magistrate's Court for a new hearing before a different judge.

"An inappropriate approach"

Against the judgment of the District Court, the Bank, represented by Gabi Moyal-Maor of law firm Hamburger Evron & Co., filed a motion for leave to appeal to the Supreme Court, wherein it argued that there was no reason to disqualify Justice Ressler-Zakai retroactively on the single ground of the appearance of justice, at a time when it was unequivocally ruled that no real concern of bias existed. The Bank argued that the principle of the appearance of justice should be applied retroactively only in the most extreme of cases, and this is not such a case. According to the Bank, Werkstell's claims to the effect that the Judge could be influenced in her decisions by of the mere existence of a dispute between her father and the Bank, are nothing but unsubstantiated hypotheses, which are based on an improper perception of reality. The Bank further argued that cancellation of the judgment retroactively impairs the administration of justice to the parties to the case, who have been in litigation for many years, as well as the public interest of the finality of a case.

Justice Rubinstein accepted the Bank's arguments, reversed the judgment of the District Court, and ruled that this was an exceptional and rare case of a judgment being cancelled retroactively while under appeal, on the single ground of the appearance of justice and the test of real and subjective concern. He said that a bank is a large institutional body and naturally also judges (and/or their families) are among its clients. In addition, it was ruled that no link had been proven between the branches of the Bank – the one dealing with the affairs of Att. Ressler, as opposed to the one involved in the dispute against Werkstell. Rubinstein also noted that it is not possible to ignore the feeling of discomfort invoked by Werkstell's actions and his attempts to disqualify presiding judges.

Rubinstein made it clear that the question of trust in the judicial system has two sides – a subjective concern toward the plaintiff Werkstell, for which the judgment should be set aside, versus the degree of damage to be caused to the litigants, who have already been through prolonged proceedings because of the actions of Werkstell, and would have to now go through the process again from the beginning. As the District Court did not discuss the appeal arguments on their merit, the Supreme Court ordered the case remanded to the court of appeals in order to discuss them.