Background
Tzipora Navon filed a third-instance application for permission to appeal arising from insolvency proceedings. A dispute arose over the amount of security she was required to deposit for the proceeding. Navon maintained that the applicable amount was NIS 3,000 under Item 10 of the Third Schedule to Israel’s Civil Procedure Regulations, 2018.
Item 10 sets NIS 3,000 as the security for an application for permission to appeal under the Insolvency and Economic Rehabilitation Law, or under the Bankruptcy Ordinance, when filed by “a debtor in that proceeding.” Navon was not the debtor in the underlying insolvency proceeding. Alternatively, she asked the Court to reduce the security under Regulation 135(b), relying on the focused nature of her application and her status as a third party.
The Court’s Holding
Registrar Ron Goldstein held that Item 10 did not apply because Navon was not the debtor in the insolvency proceeding. The language of the Third Schedule was unambiguous: the reduced-security provision applies only to appellate proceedings brought by the debtor. The Registrar rejected Navon’s argument that the phrase “filed by a debtor in that proceeding” modifies only matters brought under the former Bankruptcy Ordinance and not those brought under the Insolvency and Economic Rehabilitation Law.
The Registrar explained that the provision’s purpose is to assist debtors who may lack the means to furnish security, and that Navon’s interpretation would create an unjustified distinction between debtors under the former Bankruptcy Ordinance and individuals proceeding under the newer insolvency statute. The ordinary NIS 25,000 security prescribed by Item 7 for third-instance appellate proceedings therefore governed.
The Registrar also declined to reduce the amount under Regulation 135(b). Because standardized security amounts promote procedural efficiency, departures based on a proceeding’s scope, complexity, or circumstances generally require features markedly different from comparable cases. Navon’s brief assertions about the application’s narrow scope and her third-party status did not meet that standard. She was ordered to deposit NIS 25,000 by October 8, 2026, failing which the proceeding could be dismissed without further notice. No costs were awarded.
Key Takeaways
- The reduced NIS 3,000 security under Item 10 applies only when the person seeking permission to appeal is the debtor in the underlying insolvency proceeding.
- A non-debtor bringing a third-instance application in the Supreme Court is subject to the ordinary NIS 25,000 security under Item 7.
- A reduction based on the proceeding’s character or circumstances requires a clearly exceptional departure from comparable cases; conclusory claims that the matter is focused or that the applicant is a third party are insufficient.
Why It Matters
The decision confirms a strict reading of Israel’s standardized appellate-security schedule in insolvency matters. The reduced amount protects debtors facing financial hardship, not every litigant whose appeal arises from insolvency proceedings.
It also underscores that discretionary adjustments under Regulation 135(b) are exceptional. Parties seeking a reduction must substantiate the grounds for departing from the prescribed amount rather than rely on general descriptions of the appeal or their procedural status.