Case Number
LCA 8925/04
Date Decided
2-27-2006
Decision Type
Appellate
Document Type
Full Opinion
Abstract
Facts: Ahmed Alhamid died in a work accident. His estate and dependents (the respondents) filed a claim against the appellants for compensation. During the proceedings, the respondents reached a settlement with the appellants, according to which the appellants would pay a sum of NIS 100,000 to the respondents. This settlement was given the force of a court judgment on 22 February 2004. Three weeks later, the Supreme Court gave its judgment in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter ([2004] IsrLR 101). In that judgment the Supreme Court held that if a person is injured as a result of a tort and his life expectancy is shortened (the ‘lost years’), he is entitled to compensation for the loss of earning capacity in those years. The estate is also entitled to compensation for this head of damage, if the life expectancy of the injured person is shortened and he dies during the tortious act or soon after it. This decision overruled Estate of Sharon Gavriel v. Gavriel, which had been given twenty years earlier, and in which it was held that compensation would not be awarded for the ‘lost years.’
Following the decision in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter, the respondents applied to the trial court to cancel the settlement and to amend their statement of claim. Their application was granted. The appellants’ appeal to the District Court was denied. The appellants applied for leave to appeal to the Supreme Court, and leave to appeal was granted.
The questions before the court were whether the ruling in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter should apply retrospectively to events that occurred before that ruling, and if so, whether the respondents were entitled to cancel the settlement because of the subsequent change in the law.
Held: (President Barak) As a rule, case law has both retrospective and prospective effect. There is no reason why the ruling in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter should not apply retrospectively.
(President Barak) The question whether the respondents may cancel the settlement because of the (retrospective) change in the law should be resolved with reference to the doctrine of mistake in the law of contracts. The respondents’ mistake, however, was only a mistake in the ‘profitability of the transaction.’ Such a mistake is not a ground for cancelling an agreement, and therefore the settlement could not be cancelled.
(Vice-President Cheshin) As a rule, case law has only prospective effect. Retrospective application of case law is the exception to the rule. The plaintiff has the burden of persuading the court that considerations of justice require the relevant case law to have retrospective application. In the present case, considerations of justice supported the retrospective application of Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter.
(Vice-President Cheshin) The respondents did not make any mistake in real time. The question whether the law would change was not one of the risks that the parties took into account when they made the settlement. Consequently there was no basis in the doctrine of mistake for cancelling the settlement.
Appeal allowed.
Keywords
Contracts -- Mistake, Courts -- Retrospective Judgment, Torts -- Compensation
