High Court criticises Beth Din over decade-long, £100k father v son dispute

The High Court has found a “serious irregularity” in a Beth Din judgment that ruled in favour of a father against his son in a dispute over money.

Three years ago, the Golders Green Beth Din of the Union of Orthodox Hebrew Congregations ordered Rabbi Saul Djanogly, a former director of London’s Sephardi Centre who now lives in Israel, to pay his father David £100,430.50 following a loan to set up a property business.

But the High Court overruled the rabbinic tribunal for failing to take account of whether the father’s original claim had been submitted too late to be valid under English law.

Under the 1996 Arbitration Act, a Beth Din is entitled to adjudicate in financial disputes if both parties agree to its role and is considered a far less expensive alternative to going to court.

But Rabbi Djanogly, disagreeing with the rabbinic tribunal’s verdict, appealed to the High Court.

According to the recently published decision of the the High Court, which said the dispute had a “very long history”, David Djanogly alleged that he had lent £125,000 to each of his two sons, David and Avi, in 1990 to start a property business called SAS. The company was wound up in 2010.

David “later came to allege that from about 1985 onwards he had lent about £610,000 to SAS itself and that Saul Djanogly, who assumed complete control of SAS from around 1992 onwards, wrongly contended that SAS had repaid David, when that was not the case,” the court said.

David, the court said, had historically been “relatively wealthy” but lost much of his wealth in the financial crash of 2007/8 and subsequently sought financial support from his sons.

Between 2007 and 2020, Saul had provided £170,000 in maintenance to his father but David contended he needed further support from Saul.

In 2013, David approached the then head of the Federation Beth Din, Dayan Yisroel Lichtenstein, who issued a ruling in 2016 that Saul should pay around £131,000 to his father and also £105,000 to his brother, finding that Avi had contributed more to his father’s upkeep than Saul. The dayan noted that this was a very sad case of a family that had allowed a dispute to grow into a “broiges”.

But Dayan Lichtenstein’s decision did not settle the row and in 2018 the Djanoglys agreed to the arbitration of the Golders Green Beth Din (GGBD).

In 2021, after nine hearings, David and his son Avi submitted a long document to the GGBD in which the father claimed that he had loaned £610,000 to SAS to buy properties.

Avi had repaid his father £125,000 from his personal funds, their submission said, which his father intended to return once he had received £610,000 from Saul.

According to the High Court’s summary, the claim “was predicated on the basis that Saul Djanolgy had misappropriated or wrongly used these monies in breach of the agreement whereby SAS was set up as a vehicle for property investment”.

However, Saul Djanogly rejected this account, having previously accused his father and brother of trying to “blacken my character”.

According to Saul, the SAS accounts in 2004 had shown that his father was no longer a creditor of the company. His father and brother’s claims against him did “not have any supporting written evidence”, he argued.

In March 2022, the GGBD made a final award, deciding Saul was liable to pay just over £100,000 to his father.

The Beth Din was still to decide on Avi’s claim against his brother and Saul’s counterclaims against his father and brother.

Although Mr Justice Miles, sitting in the Chancery division of the High Court, rejected some of the legal challenges made by Rabbi Djanogly against the Beth Din, he found that the rabbinic tribunal should have considered his defence that the father’s claim had been made too late.

Under the 1980 Limitation Act, a claim would normally have to be brought within six years of the relevant events.

While Rabbi Djanogly had raised the limitation defence, “there was nothing to suggest that the tribunal considered it,” Mr Justice Miles decided.

“The next question is whether this failure has caused a substantial injustice to Saul Djanogly,” the judge said. “I am satisfied that had the tribunal adopted a different means and addressed the limitation defence, they might have might well have reached a conclusion favourable to Saul Djanogly.”

Following the decision, Rabbi Djanogly said, “My fight for personal justice, although ultimately successful has been long, costly and arduous… The court found that I had suffered ‘serious injustice’ by the beth din award and that I was right to challenge it.”

The judgement, he added, was “also highly significant because it sends a clear signal to all religious courts whether Jewish, sharia or of other faiths acting as arbitrators in England that they are not above the law of the land as it relates to the proper conduct of an arbitration. In particular they are bound by the mandatory provisions of the Arbitration Act 1996 which are designed to protect the basic legal rights of the parties.”

Barry Samuels and Harvey Posener of GSC Solicitors, who acted for Avi Djanogly, said the High Court judgement was “on three preliminary issues only. The balance of the High Court action currently remains to be determined and is private under the High Court rules.

“It is therefore, like the arbitration before the Beit Din itself, the subject of a duty of confidentiality which has to be respected and limits any comments that can be made on the judgment.”

Saul Djanogly, they added, “completely lost on two of the preliminary issues and on the third — the Limitation Defence — the judge has only ruled that he is not satisfied that the dayanim considered the impact of the English Limitation Act, if any, on the claims being made against Saul Djanogly in the arbitration before the Beth Din.

“He has not made any ruling that the English Limitation Act defeated the claims being made under Jewish law in the arbitration and has therefore not yet ruled that the award should be set aside.”

The judge, they said, had invited the parties to “make submissions to him as to what the effect of his ruling should be and a date for the hearing of this is to be arranged”.