A. Soundness of mind at the time of committing an offence is complementary to mental maturity as a condition for the criminal capacity of the perpetrator and is thus a condition for the criminality of his act. Accordingly, the perpetrator's mental disorder limits the criminality of his act, although not every such disorder has such radical legal consequences. If the disorder is cognitive, it must be such as to prevent the person from understanding the physical or social meaning of his conduct: if it is volitional, it must be such as to prevent him, at the time of his act, from choosing between performing the act and refraining from doing so. These are symptoms of mental disorder that negatives the criminal capacity of a person, and each of them is a necessary, but not a sufficient, condition. It is essential that this be due to a disease of the mind or an organic defect of reason. The disorder in question is therefore a radical one, and one that is also chronic if not permanent in nature, as opposed to temporary or less deep-rooted conditions such as a disturbed state, a trauma or emotional condition, impulsiveness in certain matters or urges that deviate from the normal in certain areas.

B. The following remarks are confined to the absence of criminal capacity on the volitional level, to which we shall refer in short as “volitional insanity’. This is the case where the person at the time of his act did not have a choice between acting or not acting due to a disease affecting his mind. This case is also referred to as the commission of an act as a result of an irresistible morbid impulse.

The right of citizens to demonstrate has been in the news of late. Recent events have led many citizens in Israel to take to the streets as a means of expressing their opposition to, and in some cases support of, government policies, actions or leaders. Following a pattern which is not unusual in Israel, some aspects of this issue have found their way into the courts and on to the table of the Attorney General. Thus, the refusal of the Jerusalem police to grant a permit for a demonstration through the main streets of the city, exactly one month after the tragic murder of Emil Grunzweig during a Peace Now demonstration, led the disappointed applicants, with the active support of the Association for Civil Rights in Israel (ACRI), to petition the Supreme Court. The Court overruled the police decision and ordered the police to grant the licence. On the 1st April, 1983, following repeated requests by the ACRI, the Attorney General issued directives reaffirming the right of citizens to demonstrate and clarifying the powers of the police to disallow or interfere with demonstrations. That one of the two dailies with the largest circulations in Israel saw fit to publish the full text of these directives in its holiday edition is an indication of the interest which the public has in the issue.

This was an Additional Hearing granted by leave of the President of the Supreme Court for the purpose of considering the incidence, ratione personae, of the good faith requirement established under sec. 12 of the Contracts (General Part) Law, 1973. The significance of the decision lay in the question of the liability of agents and company directors who negotiate contracts to which they are not themselves party. In particular, the Court was called upon to consider whether, on the basis of sec. 12, a company director negotiating a contract solely on the company's behalf could be held personally liable in relation to that contract, or whether he could seek refuge behind the corporate veil.

The respondent, David Castro (hereafter: the Purchaser), had negotiated with Yosef Pnini (hereafter: the Appellant) for the purchase of an apartment to be built by Pnidar, Development and Building Investments Company, Ltd. (hereafter: the Company). The Appellant was manager of the Company, and he and his wife were the sole stockholders. The Appellant and the Purchaser signed a standard-form preliminary agreement which the Company used for the sale of apartments in buildings that it constructed, and the Purchaser made all payments due for the purchase of the apartment. During the course of negotiations it was not revealed to the Purchaser that neither the Company nor the Appellant owned the property upon which the apartment was to be constructed.