Court Rules Diamond Merchant Must Pay Ex-Wife 4.4 Million Shekels
A Tel Aviv District Court rejected a diamond merchant's appeal, ruling he must pay his ex-wife 4.4 million shekels based on the separation date's asset value. The court also increased his payment by 200,000 shekels due to earning capacity gaps.
A Tel Aviv District Court recently dismissed an appeal filed by a diamond merchant challenging a ruling that he must pay his ex-wife approximately 4.4 million shekels as part of their property division. Judges Naftali Shilo, Sigal Jacobi, and Yhezkel Eliyahu ruled that the value of his company must be calculated according to the date of separation between the spouses, rather than its current, lower value. Simultaneously, they partially accepted an appeal filed by the wife, increasing the husband's payment obligation by about 200,000 shekels.
The couple married in the 1980s and acquired a house and two investment apartments in Tel Aviv during their marriage. The husband operated a diamond business through a company owned solely by him, while the wife, who holds two law degrees, worked for years managing the company's bookkeeping. In March 2020, the wife initiated legal proceedings against her husband and subsequently filed a property claim, alleging that he concealed a multi-million dollar diamond inventory from tax authorities. According to her, in recorded conversations, he admitted to possessing diamonds worth at least 20 million dollars.
A family court-appointed expert estimated the company's value, excluding real estate assets, at approximately 8.87 million shekels. Based on this opinion, the husband was ordered to transfer about 4.4 million shekels to the wife as part of the resource balancing process. Both parties were dissatisfied with the verdict and appealed to the District Court. The husband argued that since the tax reporting, diamond prices had dropped by tens of percents, and requested that the inventory value be calculated based on its actual realization date. He also asked to obligate his ex-wife to pay half of the interest and fines for a tax debt that allegedly grew to about 10 million shekels, accusing her of taking jewelry worth hundreds of thousands of dollars from the home.
Conversely, the wife argued that her former husband refused to transfer her share of the diamond inventory, meaning he should not now be permitted to deduct from the amount owed to her under the pretext that they lost value. She also requested compensation for earning capacity gaps between them. Indeed, Judge Shilo, who authored the ruling with the concurrence of his panel members, rejected the diamond merchant's arguments. He clarified that the company is owned by the husband, who continued to manage it after the breakup, and therefore any change in its value since then falls solely under his responsibility.
"He is entitled to both the honey and the sting," Shilo wrote. The verdict emphasized that the husband could have realized the diamonds close to the separation date and transferred half of their proceeds to the wife. Since he chose not to do so, there is no justification to harm her rights due to a claimed depreciation in value that was not proven anyway. The judges also rejected the merchant's demand to hold his ex-wife liable for half of the interest and fines accumulated on the joint tax debt, noting that the husband could have settled the debt by selling diamonds or one of the apartments.
Furthermore, his claim that the wife took jewelry worth hundreds of thousands of dollars from the house was dismissed because he failed to prove it. On the other hand, the wife's appeal regarding earning capacity gaps was accepted. Judge Shilo noted that despite her legal education, her professional experience is limited, and at her age, she will find it difficult to integrate into the job market. Consequently, 199,955 shekels were added to the husband's liability, coupled with shekel interest from the date of the expert opinion. Finally, the husband was ordered to pay his ex-wife legal expenses and attorney fees totaling 50,000 shekels.
