How Canadian Estate Trustees Obtained Israeli Bank Records for an Ontario Case

Result: NIS 2,380,000 of transfers traced through an Israeli account and admitted in Ontario, with sworn evidence taken in Tel Aviv · Timeline: 9 months · Challenge: Canada sits outside the Evidence Convention · Authority: Directorate of Courts, Legal Assistance to Foreign Countries, Jerusalem · Financial Impact: NIS 2,380,000 traced

Background

Two sisters, appointed estate trustees by the Ontario Superior Court of Justice, were in litigation with their brother over their father's estate. The father had lived his last decade between Toronto and Herzliya. He held an Israeli current account for more than thirty years, sold his Herzliya flat through an Israeli lawyer some fourteen months before he died, and the sale proceeds never surfaced in the Ontario estate accounting. The brother, who held an Israeli power of attorney over the account, said the money had been spent on care. The Israeli bank would tell the sisters nothing at all, which is unsurprising: they were not the account holder, and the account holder was dead.

The gap between what the sisters could prove and what they suspected came to roughly NIS 2.4 million. Their Ontario counsel had already discovered that an Ontario order for production does not travel. A subpoena issued in Toronto has precisely as much force in Tel Aviv as a parking ticket from Tel Aviv has on Bay Street.

The Challenge

Most foreign litigants reaching into Israel use the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters of 1970. Israel ratified it and receives incoming letters of request through a designated Central Authority, and the route is well worn by American litigators. Canada never joined that Convention, and we found no bilateral civil procedure convention between Canada and Israel to fall back on. The Convention channel was therefore unavailable, and the file had to be built on the Israeli domestic statute instead.

That statute is the Legal Assistance Between States Law 5758-1998, and it is broader than the Convention it also implements. It governs a request for legal assistance made by any foreign state, not only by a treaty partner. Under Section 3 the competent authority to receive and decide on such a request is the Minister of Justice or an official designated by the Minister, and incoming civil requests are handled in practice through the Directorate of Courts (Hanhalat Batei HaMishpat), Legal Assistance to Foreign Countries, at 22 Kanfei Nesharim Street in Jerusalem. Section 5 sets out the grounds on which the request may be refused, and reciprocity sits among them, which is exactly the point a non-treaty request has to answer before it answers anything else.

Two Israeli objections were certain to be raised once the request landed. The bank would invoke its confidentiality duty to the customer, which in Israeli law is derived by the courts from the banking relationship rather than from a statute, and which for that reason yields to a court order in a way that a statutory secrecy rule might not. The lawyer who handled the Herzliya sale would invoke Section 48 of the Evidence Ordinance [New Version] 5731-1971, the advocate's privilege, over everything he had done for the father. Neither objection defeats a request. Both narrow it, and a request drafted as a sweep gets narrowed to nothing.

In Practice: Under Section 15 of the Legal Assistance Between States Law 5758-1998 the competent authority applies to a court for an order to take evidence in Israel at a foreign state's request, and Section 16 lets that court authorise a private Israeli advocate to conduct the examination, provided the advocate has been on the roll for at least five years, two of them in Israel. That authorisation is what allows foreign-style questioning to be accommodated at all. Requests are received by the Directorate of Courts, 22 Kanfei Nesharim Street, Jerusalem, which accepts English without a Hebrew translation, and six weeks is the realistic minimum between receipt of a signed letter and the summoning of a witness. Israeli counsel to draft, shepherd and attend runs NIS 15,000 to NIS 35,000 depending on document volume.

What We Did

We drafted the letter of request in Israel and sent it back to Ontario for issue, which is the reverse of the order most foreign firms expect. The reason is practical. The letter has to be signed by a judicial officer, so a version prepared by counsel and forwarded without a judge's signature is returned unprocessed, and the substance has to survive Israeli objections that Ontario counsel has no reason to anticipate. Drafting it first in the jurisdiction where it will be executed saves a full cycle, and a cycle here is measured in months.

The request asked for three things and no more. Statements and transfer records for the father's account covering the eighteen months before death. The identity of the payees on every transfer above NIS 50,000. And the sworn evidence of the Israeli advocate on one narrow question: where the sale proceeds of the Herzliya flat were directed on completion. We deliberately did not ask for his file. Asking for the file would have handed him Section 48 and closed the subject; asking where money went, an act performed rather than advice given, kept the question inside what an Israeli judge would order him to answer.

Because Canada is outside the Convention, the letter travelled through the diplomatic channel rather than court to court, with an undertaking of reciprocity from the Ontario side attached. Once it reached the Directorate of Courts, the file moved to an Israeli court, which made an order under Section 15 and authorised an Israeli advocate under Section 16 to take the evidence. The bank was served, appeared, and made its confidentiality objection, which the court disposed of by limiting production to the eighteen-month window and to transfers over the stated threshold. The advocate appeared and made his privilege objection, which was upheld as to advice and refused as to the destination of funds, precisely the line we had drafted towards.

The examination took two days in Tel Aviv. Section 18 puts the witness under the same obligations that apply to a witness before an Israeli court, and it allows the court to permit a representative of the requesting state to be present. Ontario counsel attended by arrangement and questions were put through the Israeli advocate conducting the examination.

The last stage was documentary, and non-residents almost always underestimate it. The bank produced its records in Hebrew. An Ontario judge cannot read them. Each exhibit went to a notarial translation at the fixed statutory tariff, NIS 251 for the first 100 words and NIS 197 for each additional 100 up to 1,000, and the notary's certificate on the translation then carried a Magistrates' Court apostille at about NIS 59 per certificate so that the package would be accepted for filing in Toronto without a further authentication fight. The mechanics of that chain are set out in our guide to apostilling Israeli documents, and the sequence matters more than the cost: translate, then certify, then apostille the certificate.

In Practice: Section 18 of the Legal Assistance Between States Law 5758-1998 places the Israeli witness under the same duties owed to an Israeli court and permits the court to allow a representative of the requesting state to attend the examination. Privilege is decided by Israeli law as it is taken, so Section 48 of the Evidence Ordinance [New Version] 5731-1971 protects an advocate's advice while leaving factual acts, such as where completion funds were remitted, open to question. Budget NIS 251 for the first 100 words of each notarial translation, NIS 197 for every further 100, and about NIS 59 for the Magistrates' Court apostille on each notarial certificate, then allow two to three weeks for the certification chain after the evidence is taken.

The Outcome

The records produced under the order traced NIS 2,380,000 out of the father's Israeli account in the fourteen months before his death, including the Herzliya sale proceeds, into two accounts the brother controlled. The advocate's evidence confirmed the completion instructions and the account they named. The material was admitted in the Ontario Superior Court of Justice and the estate action settled four months later, before trial, on terms that returned the traced value to the estate.

End to end the Israeli stage took nine months from the day the Ontario judge signed the letter to the day the certified package left Israel. That is not fast, and it was never going to be. What made it work was that the request asked narrow questions, answered the reciprocity point on its face, and reached the Directorate of Courts in a form an Israeli judge could act on without amendment.

Key Takeaways

What this case illustrates for non-residents in similar situations:

1. Canada's absence from the Evidence Convention changes the route, not the outcome. The Legal Assistance Between States Law 5758-1998 governs requests from any foreign state, so the request travels the diplomatic channel with a reciprocity undertaking rather than the court-to-court Convention channel.
2. Draft the letter of request in Israel and have it issued abroad. It must carry a judicial signature to be processed, and it must be phrased to survive Israeli confidentiality and privilege objections that foreign counsel will not see coming.
3. Ask for acts, not files. Section 48 of the Evidence Ordinance shields an Israeli advocate's advice. It does not shield where the money went, and a question aimed at the transfer rather than the retainer usually gets answered.
4. Israeli bank confidentiality bends to a court order. It is a duty the courts derived from the banking relationship, not a statutory secrecy rule, and a narrowed request with a date range and a value threshold is far more likely to be granted whole.
5. Budget the certification chain into the timetable. Hebrew records need notarial translation at the fixed tariff and an apostille on the notary's certificate before a foreign court will file them, which adds two to three weeks after the evidence itself has been taken.

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Facing a Similar Situation?

If a case in Canada, the United States or the United Kingdom turns on documents or testimony sitting in Israel, the request should be drafted with the Israeli objections already in mind, before your judge signs it.

Contact us for a confidential consultation about your Israeli legal matter.