Background
Michal Lugasi initiated enforcement proceedings against her former husband, Yaakov Lugasi, to collect approximately NIS 257,000 in unpaid child support for their three minor children. An enforcement registrar appointed Adv. Emanuel Sharabi as receiver over an Ashdod apartment that had been registered in Yaakov’s name since 2009.
Yaakov’s father, Shalom Lugasi, sued in the Beersheba District Court for a declaration that he was the apartment’s true owner and sought an interim order stopping its sale. He asserted that he had paid the entire NIS 480,000 purchase price, that registration in his son’s name was merely formal, and that he had rented out the apartment and collected its rent since its purchase. The District Court denied interim relief, reasoning that the contemporaneous agreement appeared to establish a loan secured by the apartment rather than ownership, and that the harm to the children from delayed support collection outweighed Shalom’s financial harm. It also ordered him to pay NIS 15,000 in costs.
The Court’s Holding
Justice Gila Canfy-Steinitz treated the application for permission to appeal as an appeal and allowed it. Without deciding ultimate ownership, the Court held that Shalom had presented sufficient prima facie evidence of a claim warranting adjudication. He had paid the full purchase price directly to the seller; repayment of the purported loan was due only on his demand; all of Yaakov’s rights were pledged to him; Yaakov could not sell, encumber, lease, or transfer possession without his written consent; and Shalom had exclusively rented the apartment and collected the rent for years. The cumulative evidence required a full inquiry into whether the arrangement was unusually stringent security for a loan or instead preserved the substantive ownership rights in Shalom.
The balance of convenience also favored a stay. Selling the apartment to a third party could make restoration impossible and effectively defeat the declaratory action before trial. Moreover, after the District Court’s decision, NIS 262,649.39 was paid into enforcement, satisfying the overwhelming majority of the arrears that had driven the lower court’s balancing. The Supreme Court therefore stayed realization of the apartment until judgment in the ownership action or a further District Court order, vacated the NIS 15,000 costs award, and made no costs order on appeal.
Key Takeaways
- A claimant seeking interim relief need only present sufficient prima facie evidence of a cause of action, not prove the claim conclusively.
- Courts assessing beneficial ownership may consider the transaction as a whole and the parties’ conduct over time, rather than relying solely on registered title or document labels.
- An interim ruling should not permit an irreversible sale that would effectively determine or nullify the underlying ownership action.
- Material developments after the trial court’s decision—here, payment of nearly all the child-support arrears—may alter the balance of convenience on appeal.
Why It Matters
The decision illustrates the exceptional circumstances in which Israel’s Supreme Court will intervene in a trial court’s discretionary ruling on interim relief. Although unpaid child support carried substantial weight, that consideration materially diminished once nearly all the arrears prompting the enforcement sale were paid.
The ruling does not establish that Shalom owns the apartment. It preserves the property while the District Court determines whether the registered title reflects the true ownership arrangement.