22. Coordinating Matrimonial Property Regimes Across National Borders: Israeli and Comparative Perspectives

In this chapter, matrimonial property includes the spouses’ general rights and duties relating to the family home, household goods, bank accounts, and all other movable and immovable property, acquired during the marriage. Not included are maintenance obligations, the succession rights of a surviving spouse, and business enterprises set up between spouses. The following abbreviations apply: CC (civil code) and PILA (Private International Law Act).

Proposal for a Council Regulation on jurisdiction, applicable law, and the recognition and enforcement of decisions in matters of matrimonial property regimes, COM(2011) 126/2 (March 16, 2011), at http://​ec.​europa.​eu/​justice/​policies/​civil/​docs/​com_​2011_​126_​en.​pdf. Accessed 4 September 2016. In February 2015–March 2016, 17 EU member states addressed a request to the Commission indicating their wish to establish enhanced cooperation between themselves in the area of jurisdiction, applicable law, and the recognition and enforcement of decisions in matters of matrimonial property regimes and jurisdiction, applicable law, and the recognition and enforcement of decisions regarding the property consequences of registered partnerships. In response to this request, the Commission adopted a Proposal for a Council Decision authorizing enhanced cooperation in the area of jurisdiction, applicable law, and the recognition and enforcement of decisions on the property regimes of international couples, covering both matters of matrimonial property regimes and the property consequences of registered partnerships – COM(2016) 108 final, http://​ec.​europa.​eu/​justice/​civil/​files/​property_​enhanced_​cooperation_​en.​pdf Accessed 4 September 2016. By now, Council Regulation (EU) 2016/1103 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes, has been adopted, OJ [2016] L 183/1. Cf., also, Council Decision (EU) 2016/954 of 9 June 2016 authorising enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions on the property regimes of international couples, covering both matters of matrimonial property regimes and the property consequences of registered partnerships, OJ [2016] L 159/16, adopted by 18 EU Member States.

There are however certain restrictions, intended to prevent certain acts of disposal by spouses taking place without the consent of the other spouse. A case in point is the sale of the family home by the spouse who owns the home, an act which requires, in some jurisdictions, the consent of the other spouse – cf. Boele-Woelki et al. (2013), pp. 68 ff.

From the value of the assets acquired by each spouse during the marriage, the debts that the spouse had incurred are subtracted. Also, account is taken of excessive gifts, dissipation of assets, and other acts that a spouse may perform in order to diminish the value of his acquisitions to the detriment of the other spouse.

For a table of the various default regimes, as well as the regimes from which the spouses may choose in the various European states, cf. Boele-Woelki et al. (2013), pp. 12–16.

Regarding the advantages and disadvantages of each default regime, cf. Boele-Woelki et al. (2013), pp. 25 f.

For a comparative study of the rules obtaining in England and Wales, Scotland, and Ireland, cf. Boele-Woelki et al. (2009), pp. 1073–1129.

White v. White [2001] 1 AC 596 (House of Lords), Conjoined Appeals (Eng.)

Regarding the exercise of the English courts’ discretion when dealing with assets upon divorce or dissolution, cf. Probert and Harding (2015), pp. 174–178; Lowe and Douglas (2015), pp. 826–933.

Regarding postnuptial agreements, cf., MacLeod v. MacLeod [2008] UKPC 64; regarding both prenuptial and postnuptial agreements, cf. Radmacher v. Granatino [2010] UKSC 42.

Most recently, this has been confirmed by the Supreme Court’s decision in Ruth Turgeman Lachman v. Discount Bank Ltd., CA 8497/06, Nevo electronic database (4 August 2008). The case concerned Jewish spouses, married in France in 1969, while domiciled there, who subsequently, in 1996, immigrated to Israel. The Court held that, since they had married before the Law came into effect, the community of property regime applied to all of their matrimonial property, regardless of their domicile in France at the time of their marriage. The Court held that there was no need to prove the property regime under French law.

Friedmann (1977), p. 142.

Yakobi v. Yakobi and Knobler v. Knobler, Joint Civil Appeals 1915/91, 2084/91, and 3208/91, 49(3) PD 529 (13 August 1995).

For the first approach, see Ploni v. Plonit, Application Family Appeal 4951/06, tak-Supreme [takdin electronic database] 2006(2), 3829 (14 June 2006), where the Family Court held, on the basis of contract law and an implied contract between the spouses, that all assets belonged to both spouses. For example, the apartment, which had been the husband’s property before the marriage, served as the matrimonial home. According to the District Court, this fact in itself sufficed to create a representation to the other spouse that it would become community property, if the other spouse has no apartment of her (or his) own. The Supreme Court denied the husband’s motion to appeal; Strik v. Strik, Family Case (Tel-Aviv) 20644/96, tak-Family 2004(1), 276 (9 February 2004); V.T. v. A.T., Family Case (Tel-Aviv) 65441/98, 65442/98, tak-Family 2000(3), 98 (14 September 2000); For the second approach, see Abu Romi v. Abu Romi, Application for Permission to Appeal 8672/00, 56(6) PD 175 (27 August 2002), per Justice Strassberg-Cohen, in which the married couple lived together for 14 years, raising seven children, in an apartment belonging to the husband before their marriage. The Supreme Court denied the wife any share in the apartment, since such a claim could not be based upon the resources-balancing arrangement (the apartment belonged to the husband before the marriage), which the Court considered the only one available under current Israeli law. Furthermore, the Court rejected the possibility that the wife could rely on any other cause of action (e.g., in contracts), since it considered that such action, too, was precluded by the Spouses Property Relations Law.

Cf. Shifman (1996), p. 399; Weisman (1997), pp. 199–201.

Jacqueline Salah Halil v.Bassam Hana Halil, CC (District Court, Nazareth) 11/95, Nevo electronic database (27 May 1996), citing also Samia Huri v. Nissim Huri, CC (District Court, Nazareth) 385/93 (nyr).

Cf., e.g., Ploni v. Plonit, Application for Permission to Appeal (Israel Supreme Court) 7172/12, Nevo electronic database (24 December 2012), in which it was held that § 8(2) of the Spouses Property Relations Law provides the court, when distributing the assets between the spouses, with flexibility, which necessitates creative thinking, to enable, in appropriate, exceptional, factual situations, the application of principles of distributive justice, in preference over sharing the assets equally; ‘A.N. v. ‘A. ‘A.N., Family Appeal (District Court, Tel-Aviv) 16334-11-13, Nevo electronic database (9 Sept. 2015), in which the Court held that, following the adoption of the Spouses Property Relations Law, matrimonial property has become subject to three property regimes: the general laws, the balancing of resources, and the community of property in specific assets. The three regimes do not contradict each other but are complementary, and there is no hindrance to prevent a spouse from bringing a proprietary claim on the basis of any of those, even if that spouse has failed in a claim on the basis of the others.

The English translations of the Swiss PILA are taken from Bucher and Tschanz (1995).

Most recently, this has been confirmed by the Supreme Court’s decision in Ruth Turgeman Lachman v. Discount Bank Ltd., CA 8497/06, Nevo electronic database (4 August 2008). The case concerned Jewish spouses, married in France in 1969, while domiciled there, who subsequently, in 1996, immigrated to Israel. The Court held that, since they had married before the Spouses Property Relations Law came into effect, the community property regime applied to all of their matrimonial property, regardless of their domicile in France at the time of their marriage. The Court held that there was no need to prove the property regime under French law.

Regarding the application of the community of property to couples married while domiciled in a foreign country, cf., e.g., Ze’evi v. Ze’evi, CA 627/70, 26(2) PD 445 (8 August 1972); Bareli v. Succession Tax Commissioner, CA 135/68, 23(1) PD 393 (12 March 1969); Svirsky v. Svirsky, CA 529/76, 31(2) PD 233 (31 January 1977).

Those range from implying an agreement by the spouses to apply a community of property regime to their matrimonial property simply from the fact that they immigrated to Israel, where such a rule applied to spouses – Justices Elon, Barak, and Kahan in Azugi v. Azugi, CA 2/77, 33(2) PD 1 (9 May 1979), and Justices Goldberg and Dorner in Nafisi v. Nafisi, Further Hearing 1558/94, 50(3) PD 573 (25 August 1996) (who, to that end, had to presume that such an agreement could be implied from the mere decision to immigrate to Israel, since the assets had been purchased before immigration took place in fact and also applied a “constructive” change of domicile, one that had already taken place when the decision was made rather than upon immigration in fact); cf. also Justice Barak in Azugi and in Nafisi. In the latter case, Justice Barak states that §15, being a choice-of-law rule, is just a dispositive rule, which only applies if the parties did not make an agreement that provides otherwise. In casu, Barak implied an agreement on community of property from the principle of good faith which should be used to complement the unexpressed intentions of the parties, as well as from the basic principle of equality between spouses. According to Barak, spouses, acting in good faith, must accept the idea of community of property on the basis of equality. By contrast, Justice Heshin refused to imply an agreement on community of property in Nafisi, in the absence of any evidence demonstrating that the parties might have contemplated such an arrangement in fact. Instead, Heshin considered the community of property regime to reflect an Israeli internal ordre public (it may be wondered, of course, how come an internal ordre public can be used to override a choice-of-law rule, not to mention that even Israeli law has deviated from this rule in the Law which applies a resources-balancing regime). Alternatively, Heshin was ready to apply what he termed the “foreign court theory,” accepting a “double renvoi” from the law of Iran (where the spouses were married and subsequently domiciled for 39 years) and consequently applying Israeli law, regardless of the fact that Iranian law had not been proven at all, neither in substance nor as regards its choice-of-law rules.

§15, Spouses Property Law provides that the matrimonial property is governed by the law of domicile at the time of the marriage, unless the spouses made an agreement providing otherwise, and that agreement was made in accordance with the law of their state of domicile when that agreement was made. In Azugi v. Azugi, CA 2/77, 33(2) PD 1 (9 May 1979), the Supreme Court held that, since the term “property agreement” (used in §2 as the only means of contracting out of the resources-balancing arrangement) was not used in §15, this means that, for the purpose of §15, any agreement would do – also an oral one or one that can be implied from the circumstances. It is submitted that §15 did not use “property agreement,” as in §2, because the governing law may have different requirements, and the agreement has to be made according to the lex causae, which would not be Israeli law if the state of domicile at the time of making the agreement was a foreign country.

This rule can be derived from the Supreme Court decisions, e.g., Azugi v. Azugi, CA 2/77, 33(2) PD 1 (9 May 1979), Nafisi v. Nafisi, Further Hearing 1558/94, 50(3) PD 573 (25 August 1996).

This rule is confirmed by statements made by all Justices, as well as the literature criticizing the decisions – cf. Fassberg (2000), p. 133; Schuz (2001), pp. 446–447.

This rule is a multilateral formulation of the unilateral rule applied by the Supreme Court to couples who had immigrated to Israel – cf. the cases Azugi, Nafisi, Kurd v. Kurd, Originating Summons (Jerusalem) 355/93, 127/95, tak-District 96(1), 1528 (26 March 1996), more recently T.L. v. T.Z., Family Case 13270-72/06 (Jerusalem), Nevo electronic database (30 October 2008). Regarding the unilateral rule, cf. Fassberg (2000), pp. 133 f. It is noteworthy that Justice Barak in Nafisi endorses full retroactivity over a rule that would leave intact property rights acquired under the former matrimonial property regime applying to the spouses (partial mutability), stating that it is difficult to distinguish between property acquired in the former domicile and property acquired in the new domicile. However, in Nafisi, all of the property was acquired while the couple was still domiciled in Iran (a period which lasted 39 years following their marriage).

This rule was applied in Awalid v. Awalid, CA 291/85, 42(1) PD 215 (15 February 1988), and in A.H. v. L.B., Family Case (Tel-Aviv) 23990/01, Nevo electronic database (20 May 2002; final judgment, 27 December 2004) – in each of these cases, the spouses were domiciled in France at the time of their marriage, where they also made a matrimonial property agreement on their marriage day (in the first case) and in contemplation of marriage (in the second case).

Regarding the restrained application of the external public policy brake in Israeli law, cf. Einhorn (2012), paras. 91 ff., with further references.

These were the facts in a case decided by the Israel Supreme Court – Mordechai Sasson v. Zohar Sasson, CA 7687/04, 59(5) PD 596 (16 February 2005).

The English translations of the Dutch CC are taken from Warendorf et al. (2009).

Boele-Woelki (2009), p. 1194.

Mordechai Sasson v. Zohar Sasson, CA 7687/04, 59(5) PD 596 (16 February 2005).

Ella v. Ella, [2007] EWCA Civ. 99.

Kremen v. Agrest (No. 11), [2012] EWHC 45 (Fam.)

1984 Chapter 42, accessible at http://​www.​legislation.​gov.​uk/​ukpga/​1984/​42

§3, Rabbinical Courts Jurisdiction Law.

Cf. Einhorn (2012), para. 612.

Cf. Ha-Geves A. Sinai (1989) v. The Lockformer Co., Application Permission to Appeal 2705/97, 52(1) PD 109 (26 January 1998). In a subsequent case, the Supreme Court noted that legal advisors should make parties aware of the change that has taken place in Israeli law, regarding the falling into disfavor of arguments suggesting that Israel is a forum non conveniens, in view of technological developments and the “upgrading” of international commerce – Ashborn Company for Agencies and Commerce Ltd. v. CAE Electronics Ltd., CA 9725/04, tak-Supreme 2007(3), 3574 (4 September 2007).

Siehr (2014); Einhorn (2012), para. 1162.

Einhorn (2015/3).

Cf. the decision of the Family Court in Jerusalem that declared itself forum non conveniens in a matrimonial property dispute between Israeli spouses who got married in a Jewish ceremony in Israel in 1990, divorced in Israel in 2002, after concluding a postnuptial agreement, where the dispute relating to trust arrangements made in London, while the spouses were living and working there, with respect to shares of a company incorporated in Guernsey – Sh.G.Sh. v. A.M.A., Family Case (Family Court, Jerusalem) 14922/05, Nevo electronic database (17 May 2009).

Ploni v. Plonit, Case 6982-42-1 (Rabbinical Court, Haifa) (27 April 2008); The Rabbinical Court refers in its decision also to the decision of the Family Court in Kfar Saba in D.S. v. R.S., various civil applications (Family Court, Kfar Saba) 2938/06 (26 September 2006), in which the Family Court held that it was competent to adjudicate a dispute between spouses who had emigrated from Israel to the USA, on the basis of their prenuptial agreement concluded in Israel, where both spouses were domiciled at the time of their marriage.

Cf. Shalem, paras. 27.8–27.12, with further references.

1984 Chapter 42, accessible at http://www.legislation.gov.uk/ukpga/1984/42

1984 Chapter 42, accessible at http://www.legislation.gov.uk/ukpga/1984/42

Lowe and Douglas (2015), pp. 830 ff.

The Law Commission (2013), Matrimonial Property Impact Assessment, http://​www.​lawcom.​gov.​uk/​wp-content/​uploads/​2015/​03/​lc343_​matrimonial_​property_​impact-assessment.​pdf. Accessed 4 September 2016.

Siehr (2005), p. 25.