Case Number

HCJ 164/97

Date Decided

2-4-1998

Decision Type

Original

Document Type

Full Opinion

Abstract

Facts: The petitioner acquired a license from the Customs Authority to operate a licensing warehouse on land in dispute between it and the Port and Train Authority. The Customs Authority asked for proof that the petitioner had a right in the land, as required by the regulations, and in return it received an agreement that did not appear to address such a right. The Customs Authority granted the license anyway. When it became aware of the dispute over the land, it refused to renew the license. The central question is whether the petitioner had a duty to disclose the existence of the dispute to the Customs Authority, and more broadly, whether individuals owe a duty of fairness in their dealings with administrative agencies.

Held: All three justices held that the Customs Authority had a right to refuse to renew the license, each on different grounds. Justice Zamir held that not only does the government owe a duty of fairness to citizens, but citizens owe a reciprocal duty of fairness to the government, including a duty to disclose information material to a request for a license. Such duty stems from the social contract, in which citizen and government are partners in the democratic enterprise. The petitioner’s breach of such duty in failing to disclose material information of primary importance justified refusing to renew the license. President Barak held that the individual owes no general duty of fairness to the government. Any duty owed by the individual to the government must be specific to the issue in question and dependent on the proper balance between the interests of society as represented by the government and the rights and freedoms of the individual. The petitioner’s duty of disclosure owed to Respondents 1-2 stems from the fact that a proper exercise of governmental authority requires the individual to make appropriate disclosures to the government concerning material facts which serve as the basis for the governmental decision. Justice Cheshin held that in his or her dealings with the government, the individual bears no duty to disclose information at its own initiative. The government is better situated to know what information is material and to ask for it. The Customs Authority’s decision not to renew the license, however, does not warrant judicial intervention because the petitioner did not meet a material condition set by the Regulations regarding a right in the land.

Objection to order-nisi of February 25, 1997. Petition denied. Order-Nisi rescinded.

Keywords

Administrative Law -- Discretion, Constitutional Law -- Separation of Powers, Tax -- Customs

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