Background
T.P.C. Trading and Industry Ltd. imports lead-acid batteries into Israel. The Ashdod Customs House classified the batteries as vehicle-type batteries under customs tariff item 85.07.102000/3, triggering a customs duty liability of approximately NIS 18.5 million and requiring Standards Institute approval before the goods could be released. T.P.C. contended the batteries were deep-cycle backup/UPS batteries properly classifiable under the lower-duty tariff item 85.07.209000/5. After unsuccessful attempts to persuade the Customs House to reclassify, T.P.C. filed a declaratory judgment action in the Central-Lod District Court seeking cancellation of the duty demand.
The first pre-trial conference took place on June 30, 2025. Neither party had submitted a pre-trial request list, and no discovery complaints were raised at the hearing. Customs House counsel’s remarks at the conference were understood by the court to indicate that document disclosure had already been completed. On July 11, 2025, the court ordered both parties to file primary witness affidavits and exhibit binders. T.P.C. complied on October 30, 2025, submitting three expert opinions, financial statements for 2019–2023, and two affidavits containing seven attachments. Three days later, T.P.C. sought leave — with the Customs House’s consent — to add a small number of further documents that had been difficult to locate; the court approved that request on the same day.
On December 24, 2025 — roughly six weeks after T.P.C.’s evidence was complete — the Customs House filed a motion to strike the evidence from the record, arguing that no formal discovery had ever been exchanged, that the attachments, financial statements, and additional documents had never been disclosed, and that its earlier consent to the supplemental filing had been given mechanically without realizing the documents were previously unseen. The District Court (Judge Brand) granted the motion in large part on January 13, 2026, excluding most of the disputed documents and retaining only the financial statements as indispensable to the proceedings. T.P.C. sought leave to appeal to the Supreme Court.
The Court’s Holding
Justice Ruth Ronen treated the leave application as a full appeal and allowed it. She began by confirming that Rules 57–58 of the Civil Procedure Rules 2019 make document disclosure automatic: within thirty days of the last pleading, each party must, on its own initiative, exchange a verified affidavit listing all relevant documents in its possession or control, and must then make those documents available for inspection. This represents a deliberate departure from the prior 1984 rules, under which discovery was triggered only by a formal demand from the opposing party. The automatic regime was designed to eliminate satellite litigation over discovery orders and to advance proceedings efficiently.
However, Justice Ronen held that the automatic obligation does not preclude parties from mutually — including implicitly — agreeing to waive formal discovery. Courts will generally honour such procedural agreements. On the facts, the evidence of mutual waiver was compelling: the Customs House itself never filed a discovery affidavit, never produced a single document in discovery, raised no discovery issue in its pre-trial request list, said nothing about it at the June 2025 conference, and took no formal step of any kind until six weeks after T.P.C.’s evidence had been submitted. Sending email reminders did not amount to asserting the right; the Customs House’s own complete inaction demonstrated it had agreed, at minimum implicitly, to forego discovery.
The Court further held that a party who has itself defaulted on discovery obligations is poorly placed to seek the Rule 60(c) sanction — exclusion of the opposing party’s undisclosed evidence — against the other side for the same default. Because the parties had mutually waived discovery, there was no breach to sanction, and the district court’s exclusion order was set aside. The small tranche of supplemental documents filed on November 3 — just one business day after the main submission — was treated as an integral part of T.P.C.’s overall evidence rather than a belated addition. All excluded documents were ordered restored to the case file. No costs were awarded to either party.
Key Takeaways
- Under the 2019 Civil Procedure Rules, document disclosure is automatic and mandatory, not contingent on a formal demand — a significant structural change from the prior 1984 regime.
- Notwithstanding the automatic obligation, parties may mutually waive pre-trial discovery by express or implied agreement; courts will respect such agreements, and a waiver can be inferred from consistent inaction by both sides.
- A party that has itself failed to conduct discovery cannot invoke Rule 60(c)’s evidence-exclusion sanction against the opposing party for the same failure; equitable symmetry between the parties’ conduct is relevant to whether the sanction should apply.
- Late-filed supplemental evidence submitted within a single business day of the main filing will generally be treated as part of that filing rather than as a separate, untimely submission.
- Rule 60(c) exclusion is a serious sanction; courts must consider whether accepting the opposing party’s position would effectively bar the defaulting party from presenting any evidence at all — a result that may be disproportionate, especially where evidence is submitted before the opponent files its own affidavits.
Why It Matters
This decision clarifies an important practical gap in Israel’s revised civil procedure framework. While the 2019 rules imposed automatic discovery duties to streamline litigation, the Supreme Court confirms that parties retain the freedom to structure their own proceedings, including by implicitly agreeing to dispense with formal disclosure. For litigants and counsel, the ruling provides a strong incentive to act promptly and consistently: a party that sits on its own discovery obligations and waits until after evidence is filed to raise a disclosure objection risks being found to have waived the very right it seeks to enforce.
The case also has significance in the customs and tax litigation context specifically. The Customs House argued that importers have an inherent informational advantage over the taxing authority and should be held to strict disclosure at the earliest possible stage. Justice Ronen did not disagree with that principle in the abstract, but held it cannot override a procedural waiver that the authority itself effectively conceded through its own inaction. Practitioners handling importation disputes and administrative tax litigation should take note that procedural rights — including the right to compel discovery — must be actively asserted or they may be treated as abandoned.