Tel Aviv District Court
Civil appeal 19263-07-24 Fuchs Kurland vs. STAPLES INVESTMENT CO LIMITED
Civil appeal 4147-07-24 STAPLES INVESTMENT CO LIMITED and others vs. Fuchs
Before the honorable judges Yona Atedgi, presiding judge, Ariel Zimmerman, Tal Levi-Michaeli
Appellants in 4147-07-24 and Respondents in 19263-07-24
- Staples Investment Co Limited
- Josef Ivan
By Advs. Ilan Sela and Victor Ben-Haim
Vs.
Respondent in 4147-07-24 and Appellant in 19263-07-24
Ztiki Kurland Fuchs
By Advs. Doron Afik, Yair Aloni and Shelly Wilner
Judgment
The honorable judge A. Zimmerman:
A pair of appeals concerning the judgment and decisions of the Tel Aviv Magistrate Court (the honorable judge Adi Hadar) in Tel Aviv case 71333-11-21. Our judgment was given following the hearing that took place today in the appeals.
1. In the background of things, in a nutshell (when the parties filed with the Court contentions that are not required for the appeals, which are quite simple): A claim in the amount of ILS 2.2 million filed by Staples Investment Co. Limited (Hereinafter: "Staples"), domiciled in the Pacific island of Samoa, Mr. Joseph Ivan, holder of an American passport (Hereinafter: "Ivan"), and Attorney Victor Ben Haim, in 2021, against Mr. Ztiki Kurland Fuchs (Hereinafter: "Fuchs") and Dom Spiro LLC (Hereinafter: "Dom"), registered in the Cook Islands. A judgment against Dom on the claim was issued in the absence of a defense on its behalf. Attorney Ben Haim was removed as a plaintiff. Staples and Ivan remained, they are the plaintiffs in the proceedings in the lower Court, on the one hand, and Fuchs is the remaining defendant in the same proceedings, on the other.
2. The plaintiffs were ordered to provide a guarantee to secure the expenses of the defendants (of which Fuchs remained) in the amount of ILS 50,000 (Hereinafter: "Guarantee"). During hearing of evidence, the plaintiffs moved to hear Ivan's testimony by a visual conference, and their repeated motions in the matter were rejected, and finally on March 25, 2024, they were charged with expenses in the amount of ILS 7,500 (Hereinafter: "Expenses in The Interim Proceedings"). The plaintiffs did not pay the expenses. Fuchs moved to transfer the funds for the expenses in the interim proceedings from the Guarantee, and to supplement the amount of the Guarantee with the original amount. The Court
allowed the plaintiffs to respond. They ignored it. The Court therefore granted the motion, on May 13, 2024, and ordered the completion of Guarantee amount by June 1, 2024, warning that if the amount was not deposited, the claim would be stricken off. There was therefore a Guarantee balance of ILS 42,500 (Hereinafter: "Balance of the Guarantee"), which the plaintiffs were required to complete to its original amount. They did not do so, and in today's hearing their current attorney clarified: Due to an internal dispute between the client and the attorney who represented in that proceeding, regarding the question of which of which should bear the Expenses in the Interim Proceeding. Fuchs moved on June 3, 2024 for a judgment due to non-completion of the Guarantee and to transfer Guarantee funds, in the amount of ILS 42,500, as legal expenses and attorney's fees. The Court ordered on that day that if the plaintiffs do not make a deposit by June 13, 2024, Fuchs could move again for a issuance of a decision. The plaintiffs ignored it. Fuchs moved again for a judgment.
3. On June 16, 2024, a verdict was issued under which "A review of the financial file indicates that the amount of the guarantee was not completed to the required amount, as the plaintiffs did not make the required deposit despite being warned in the previous decision. Therefore, the Court strikes-out the claim and orders the secretariat to transfer the balance of the guarantee to the defendant for his expenses. Insofar as the defendant seeks to collect the guarantee by his attorney, he shall submit a power of attorney to that effect" (Hereinafter: "Judgment"). The Judgment does not make separate reference to expenses; it can therefore be understood that Balance of the Guarantee was set as the defendant's expenses in the proceedings.
4. Fuchs submitted a power of attorney. The plaintiffs filed an "Urgent motion to stay execution" pending a decision on the appeal; the Court granted the motion. The defendant move for reconsideration of that decision; the Court rejected the motion, noting, inter alia, that "only ILS 8,000 is at issue," even though the Balance of the Guarantee was ILS 42,500. A variety of steps were taken, including the plaintiffs' attempt to act at the appellate Court as well, and there is no need to go into detail.
5. On July 3, 2024, the lower Court issued another decision, not at the initiative of the parties, but following a motion from the secretariat regarding the fate of Balance of the Guarantee. At this stage, it was noted, it became clear to the Court that it had erred regarding the Balance of the Guarantee: It assumed that the Guarantee was ILS 15,000 (and by implication - the Balance of the Guarantee was ILS 7,500), and therefore ordered in the judgment to transfer the remaining Balance of the Guarantee to the defendant, without paying attention to the fact that the amount was ILS 42,500, not ILS 7,500; and that it was not for nothing that the Court had already mentioned the amount of ILS 8,000 in its previous decision. "The Court amends the error and determines that the secretariat must transfer to the defendant the amount of ILS 8,000 from the Guarantee." It ordered the amount of ILS 34,500 to be withheld, on its own initiative, because "the defendant believed, and rightly so, that under to Judgment he was entitled to the amount of ILS 42,500 and not the amount of ILS 8,000." This amount is still withheld (Hereinafter: "Decision to Amend the Judgment").
6. Appeals from that side and the other: Staples and Ivan appealed on July 1, 2025 (before the Decision to Amend the Judgment) the judgment ordering the striking-off, a judgment they contended to have been given without allowing them to respond and may cause them harm in the form of wasted time and loss of fees and expenses they incurred; and three interim decisions, two regarding the visual conferences and one regarding the completion of the Guarantee amount. Fuchs responds to this, in essence: Exceptionally problematic trial conduct for three years and the decision to strike-off was duly made as were the interim decisions.
7. And to Fuchs appeal, in essence: The Court did not have the authority to amend its judgment on its own initiative and reduce the expenses from ILS 42,500 to ILS 8,000, after it has left the bench, and its decision does not constitute the correction of a clerical error, within the meaning of section 81(a) of the Courts Law [consolidated version], Tashma-1981. Staples and Ivan replied, among arguments irrelevant to the proceedings (including the Court's reference to newspaper clips about Fuchs): Certainly within its jurisdiction.
8. A hearing was held today, no understandings were reached (and this is always the right of the parties), hence the judgment. Without elaborating on the parties' many arguments, which are not relevant to the matter, the decision is clear.
9. To Staples and Ivan's appeal: With regard to the decision to strike-off the claim, they agree that it is the full authority of the Court to act as it did, and indeed so: The Court is authorized under the provision of Regulation 41(a)(3) of the Civil Procedure Regulations, Hathashat-2018 (Hereinafter: "Regulations") to order the striking-off of the claim when a party repeatedly fails to comply with the Court's orders. The appellants' argument focuses solely on matters of "proportionality" (their definition in the hearing). But there is no reason to interfere with the Court's decision. A review of the sequence of events in the proceedings (and Fuchs reviewed elements of it in his response) indicates extremely problematic procedural conduct on the part of the appellants, and difficulty in abiding by, or complying with, the Court's decisions. But the issue of the Guarantee, on which we will focus, alone, was sufficient for the purpose of the striking-off decision: A decision dated May 3, 2024, regarding the response regarding the completion of the Guarantee, which the appellants ignore; A decision dated May 13, 2024 regarding the completion of the Guarantee by June 1, 2024 and a warning that if they do not do so, the claim will be stricken-off, which the appellants ignore (and explained in today's hearing: in view of the internal argument between the client and his lawyer, which is not of interest to the Court or the opposing party); A decision dated June 3, 2024 regarding Fuches' motion for a judgment and payment of Balance of the Guarantee as expenses, which the appellants ignore; and another motion was submitted after grant of permission by the Court and the judgment regarding the striking-off, on June 16, 2024, when only then did the appellants awoke and considered moving for a stay of execution. They missed the deadline: This is a clear situation in which the Court, which numerous decisions were completely ignored by the appellants (along with previous problematic trial conduct) was entitled to exercise its discretion and at the end of the warnings
to order the striking-off of the proceedings (see: Yaakov Shaked New Civil Procedure Code 291-292, 304 (Third Edition, 2023) (Hereinafter: "Shaked")). It should be noted: Striking-off, not dismissal, and there is no res judicata, only a loss of fees and expenses (although the appellants attempted to expand on additional damage today in the hearing). The appellants did not present any basis to intervene in this decision. And now that the striking-off is in order, there is no need to discuss their contentions as to the interim decisions, which it is noted that are well-founded on their merits.
10. Fuchs’ appeal remains. The result of the judgment of June 16, 2024 (before its amendment) is that Fuchs is to receive expenses in the amount of ILS 42,500 (as the lower Court itself noted, in the amendment decision). Whether it is found that the Court did not have the authority to issue the decision on July 3, 2024, reducing these expenses from the outset, or whether we deal, as we have the authority in the appellate Court, with the question of the appropriate expenses in connection with the proceedings in the lower Court in the exceptional circumstances of the case here, the result is one: that the appeal will be accepted in full, and the expenses will be set at ILS 42,500, as requested.
11. I will first clarify, in the opinion of Staples and Ivan, that this is a “clerical error” that the lower Court was authorized to amend by virtue of the provision of Section 81(a) of the Courts Law: very doubtful, even if there is no need to decide under the aforementioned circumstances. The Court frankly stated the errors related to all matters of expenses. However, these errors are very difficult to correct, as "a mistake in language, a calculation error, a slip of the pen, an accidental omission, an addition at random, and the like," as stated in the section, all as construed in caselaw (see: Shaked, at pp. 504-499). It should be noted that the lower Court did not even consider referring to the aforementioned legal provision in its decision. In our case, the judgment did not include any explicit reference to the issue of expenses, except for a provision on the transfer of the balance of the Guarantee to the defendant (who did indeed mvoe for the transfer of the Balance of the Guarantee, an amount of ILS 42,500 as he explicitly stated in his request, as expenses). The amount of expenses that the Court ultimately determined (ILS 8,000) is not even the same as the Balance of the Guarantee that it imagined to exist in the case, according to its own words. Until the lower Court discovered on the day of July 3, 2024, what is the amount of correct Balance of the Guarantee (contrary to the original assumption, which was not mentioned in the judgment), then it would have been quite difficult under the circumstances of the case to independently decide that the expenses would be set at ILS 8,000, even if this figure was already mentioned (and not explicitly as expenses) in another decision given after the judgment. In particular, when the parties are already arguing between themselves about the expenses, and the appellants have already filed their appeal.
12. In any case, even if we were to reach the conclusion that the Decision to Amend the Judgment manages to be pushed to the limits of a "clerical error", and that the Decision to Amend the Judgment was given with authority, there was room for the appellate Court to intervene in the matter. This, under the circumstances of the case and the unusual sequence of events described, combined with the fact that the various decisions were not actually reasoned in everything related to determining the amount of expenses. While when
the trial Court systematically gives its opinion on the issue of expenses, the appellate Court will rarely be required to review the matter, when there is a series of changing decisions, and none of them deal with the justification of expenses, there is a place for the appellate Court to give its opinion. The judgment under appeal is devoid of any reference to costs (except for Fuchs' actual credit of costs in the amount of ILS 42,500, when it was determined that Balance of the Guarantee would be transferred to him). The amount of costs was subsequently reduced in a harsh manner. There is no reasoning on the question of the amount of costs - high or low. It is time for the Court of Appeal, which is authorized to make any decision that needed to be made (Section 146(a)(1) of the Regulations), to give its opinion on the matter of costs. Here, the scope of the claim (ILS 2.2 million), the sequence of proceedings (which reached the point of hearing of evidence), and the effort required, all of which easily justified costs that do not fall short of the amount of ILS 42,500, and could have established even higher costs (and it should be noted, as a benchmark for matters of costs: First, at the time of determining the Guarantee for costs, the Court sought to set them at ILS 50,000, given the complexity and scope of the proceedings, its decision of May 19, 2022; and secondly, at the time of imposing a verdict againt Dom in the absence of defense, expenses were charged based on the minimum rate of the Bar Association, i.e. above the amount charged here). However there is no need to be precise: Fuchs (who it seems to have been clear to him that he would not be able to be reimbursed from Staples and Ivan except from the Balance of the Guarantee for expenses) moved for expenses equal to the Balance of the Guarantee in the amount of ILS 42,500, and even in his appeal moves for his grant of expenses in this amount, which will be defined as his expenses in the proceedings in the lower Court.
13. The result of the above, if my position is accepted: Staples and Ivan's appeal will be dismissed. Fuches' appeal will be granted. The amount of expenses in connection with the proceedings in the lower Court will be set at ILS 42,500, as actually determined in the judgment of June 16, 2024, before its amendment in the decision of July 3, 2024. The amount of the Guarantee that was withheld by the Magistrate Court (decision dated July 17, 2024) until the appeal is decided will be transferred to Fuchs via his attorney. As for the expenses in connection with the appeals, that of Staples and Ivan which was rejected, and that of Fuchs which was accepted: this will be set at ILS 25,000 in connection with the Staples and Ivan appeal which was rejected, and ILS 15,000 in connection with the Fuchs appeal. Both of these - taking into account the scope of resources that Fuchs had to invest in connection with each of the appeals, the degree of procedural complexity involved in having to deal with everything that happened in the lower Court, and with regard to the appeal of Staples and Ivan - taking into account the financial scope of the claim, which the appeal seeks to revive. In total, Staples and Ivan will bear Fuchs’ expenses in the amount of ILS 40,000.
[Signature]
Ariel Zimmerman, Judge