Case Number

CrimA 845/02

Date Decided

10-10-2007

Decision Type

Appellate

Document Type

Full Opinion

Abstract

Facts: The respondents were indicted on charges relating to the making of a restrictive arrangement under the Restrictive Trade Practices Law, in which the first and third respondents, through their respective directors, the second and fourth respondents, agreed to divide the imported meat market between them and fix minimum prices for the meat products that they sold. To further this venture they formed a company, Tnuva – Meir Ezra Imports and Marketing Ltd (TME). The respondents argued in the trial that the arrangements that they made did not constitute restrictive arrangements for the reason that they were made within the context of TME within which the respondents were not competitors. The District Court rejected this argument and held that the arrangement was a restrictive one.

Notwithstanding this finding, the District Court went on to acquit the respondents after the Court had been satisfied that the respondents had made the restrictive arrangement as a result of a mistake of law. The trial court accepted the respondents’ claim that they had relied on the advice of their lawyers, according to which the arrangement that they made within the context of TME was not prohibited by the law. Under s. 34S of the Penal Law, a mistake of law constitutes a defence in criminal cases, if the mistake is ‘reasonably unavoidable.’ The District Court held that the respondents’ reliance on their lawyers’ advice made their mistake ‘reasonably unavoidable,’ and it therefore acquitted them.

The state appealed.

Held: The defence of a ‘mistake of law’ contains two elements: a subjective element, that the defendant did indeed make a mistake of law, and an objective element, that the mistake was ‘reasonably unavoidable.’ The defence is an exception to the fundamental rule that ignorance of the law is no defence, and it is therefore a narrow one. It should be interpreted narrowly because of the dangers that it presents to the public interest.

The mistake does not need to be absolutely unavoidable, but only ‘reasonably unavoidable.’ The defendant needs to take reasonable measures to avoid the mistake, but not every possible measure. The defence need not rely on the opinion of a competent authority, but may be based on the advice of a private lawyer. However, not every advice of a private lawyer will give rise to a defence of a mistake of law.

Where a defence of a mistake of law relies on the advice of a lawyer, the reliance claim should itself satisfy the test of reasonableness. This test is applied with reference to the specific defendant, the possibilities available to him for ascertaining the legal position and the legal questions in the case. Where the legal question is complex and the law unclear, it is more reasonable to rely on professional advice. By contrast, where the question is less complex and the conduct under scrutiny lies closer to the heart of the relevant offence, it will be less reasonable to rely on legal advice as a justification for that conduct.

The reasonableness of the reliance also depends on the status and professional experience of the defendant. A person holding a senior office is expected to be more familiar with the laws relevant to his job. In such circumstances, blind reliance on legal advice is less reasonable.

The court laid down four criteria for determining whether a mistake of law based on legal advice is ‘reasonably unavoidable.’ First, the legal advice should be based on all the relevant facts. Second, the lawyer consulted should have expertise in the relevant field. Third, the legal advice should be a serious legal opinion, and it should therefore usually be in writing. Fourth, the advice of a private lawyer is only significant if there is no possibility of obtaining a prior opinion of a competent authority as to the interpretation of the relevant law.

In this case, the restrictive arrangement made by the respondents concerned the very essence of the prohibition of restrictive arrangements, namely the fixing of prices and a division of the market. The respondents had prior experience in the field of restrictive arrangements. Therefore, reliance on an oral and unreasoned legal opinion, which did not consider the distinctions between the present case and previous cases and did not address concerns raised by the director-general of the Antitrust Authority, did not constitute a ‘reasonably unavoidable’ mistake. Moreover, as senior directors, the second and fourth respondents should have been personally aware of the problematic nature of the TME venture from the viewpoint of restrictive trade practices law. Even if their mistake of law was a sincere mistake, as the District Court held, their reliance on the legal advice given to them, which did not examine the matter in depth or state the reasons for its conclusions, was unreasonable.

In the circumstances, the respondents’ legal mistake, even if made in good faith, was not ‘reasonably unavoidable.’

Appeal allowed.

Keywords

Criminal Law -- Mistake

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