ACRI requested to join Supreme Court proceedings as an "amicus curiae" on the matter of housing discrimination.
This is a request for permission to appeal on behalf of a construction company, which was deemed to have discriminated against an Arab buyer. Both the Magistrate's Court and the District Court ruled that the Prohibition of Discrimination in Products and Services Law applies to a company selling apartments, as it entails the provision of a product. The company requested permission to appeal and argued that the legislator did not intend to apply the law to the housing sector, based on a sentence that appeared in explanatory notes to the bill.
In the application to join, we detailed the aims of the Prohibition of Discrimination Law, and indicated how the application of the law to commercial factors in the residential sector is consistent with the language and purpose of the law. We are of the opinion that a determination must be made once and for all that the law applies to the sale of apartments, as well as any other product, and that uncertainty on the matter in lower courts must cease.
On February 10, 2019, the Attorney General submitted his position on the matter, in which he refrained from deciding whether the Prohibition of Discrimination Law applies to construction companies that sell apartments. On the one hand, his position does not prevent the law from applying to the sale of apartments, and the application of the law even complies with the purpose of the law. On the other hand, he believes that the legislator’s subjective intention at the time of the law’s enactment was not to apply it to the real estate domain.
However, the Attorney General stated that, regardless of the Prohibition of Discrimination Law, construction companies must not discriminate between buyers for improper reasons such as nationality. In his opinion, the prohibition stems from the Prohibition of Discrimination clause that is signed before the State upon receiving land for construction, and from the duty of good faith in negotiations around signing a contract.
According to ACRI's position, the fact that the Attorney General also believes that discrimination is illegal diminishes the dispute over the question of the "pipeline" through which the prosecution will be brought for clarification. In this matter, the Prohibition of Discrimination Law has clear advantages over the indirect application model, which enables the application of the duty of equality to be applied through contract and tort laws. The Prohibition of Discrimination Law makes it easier for plaintiffs to claim compensation without proof of damage, and also enables rights organizations to file claims. An amendment to the law even grants victims of discrimination the right to free legal aid with lawsuits. All of these are advantages that will be denied to victims of housing discrimination if it is determined that their means of assistance is through the filing of a contractual or tort claim. In addition, the Supreme Court previously sided with the application of equality to private relations by means of vague terms such as good faith, but the laws on the matter are very limited in view of the enactment of laws prohibiting explicit discrimination in the field of products, services, and employment. Thus, hopefully the court will not cause unnecessary difficulties to victims of housing discrimination, and will enable them to file lawsuits against construction companies and discriminatory entrepreneurs through the main route — the Prohibition of Discrimination in Products and Services Law.
The judgment on the appeal was given on August 18, 2019. In the opinion of the three judges, the appeal by the company was rejected, but the judges disagreed on the applicability of the Discrimination Prohibition Law to companies selling apartments. Judge Mazuz believed that the law applies to construction companies, and that the term “product delivery” also applies to the sale of apartments, in accordance with ACRI’s position. Judge Stein held that the law did not apply to construction companies, and that the term “product delivery” did not apply to real estate. Judge Handel left the question open for a future case.
Judge Handel joined Judge Stein's position that, in any event, the company could not discriminate against Arabs because it had won state land and was subject to the “Prohibition of Discrimination” Law, and so a claim for compensation for contractual misuse of rights or wrongdoing in contract negotiation can also be filed against the company.
The ruling leaves open the dispute over the applicability of the “Prohibition of Discrimination” Law, but removes any doubt about the ban on construction companies to discriminate regarding state land.
LCA 10011/17 Mitel Engineering and Services Ltd. v. Khaled Salman
Attorney: Gil Gan-Mor
Application to join the proceedings as an amicus curiae (Hebrew), 2.12.2018
The Attorney General’s position (Hebrew), February 2019
For further information (Hebrew)