Israeli Court Roundup: Inflation-Linked Ketubah, Real Estate Commission Dispute, and Pension Fund Profits
A weekly legal roundup from Globes highlights three recent rulings with broader financial implications. The most striking case came from the rabbinical court, which ordered a husband to pay his wife about NIS 700,000 in ketubah money after linking the amount to inflation, and also to reimburse her family money used to buy the marital home. In a separate case, a Tel Aviv court forced a homebuyer who tried to bypass a broker to pay the full commission plus an equal contractual penalty. A labor court in Jerusalem meanwhile ruled that an employer without a Section 14 pension arrangement could keep investment gains accumulated in employees’ severance fund.
In the rabbinical case, the couple married in 2000 and had three children before divorcing. They had bought a home for $163,000, using $100,000 from the wife’s parents as initial financing. The wife argued that her husband had been unfaithful, had not contributed economically, and should return the family’s money as well as pay the ketubah. The judges accepted her version, writing that she managed the household and raised the children alone while he spent money on trips abroad and on other women. They said, “It is clear that the man cared only for himself and his desires.” The ketubah, originally NIS 420,000, was indexed over 25 years to NIS 692,000, and the husband’s share of the parental loan became NIS 346,000. Together, NIS 1.04 million will be deducted from his share of the jointly owned apartment, effectively leaving the wife with the home. His appeal to the Rabbinical High Court was rejected.
In the brokerage dispute, Rehaus Israel showed an Ashdod apartment to a buyer and sent him an offer, but he later completed the purchase directly with the seller for NIS 3 million and paid a reduced fee to the seller’s representative. He had signed an agreement to pay a 2% brokerage fee, but refused. Judge Adi Hadar found that the broker was the “efficient cause” of the deal because she showed the property three times, connected the buyer to the sellers’ representative, and forwarded the offer. The buyer was ordered to pay NIS 70,200 in commission, another NIS 70,200 as a contractual penalty, and NIS 22,360 in legal costs, bringing the total to NIS 144,876 plus indexation and interest.
In the labor case, two longtime Joint employees were told that the organization could deduct investment gains from their severance fund when they were fired. The court held that because their arrangement was not covered by Section 14 of the Severance Pay Law, the employer owned the profits in the pension or severance account and could offset them against the employees’ end-of-service payments. The ruling clarifies that Section 14 is what normally transfers the fund gains to the worker, while older arrangements may leave those gains with the employer.
