Summary of the parties' arguments
The Applicant's Arguments
- According to the Applicant, Bezeq, led by its officers, outlined an orderly policy aimed at thwarting the reform. Bezeq's ongoing and deliberate violation of the regulator's directives led to the Ministry of Communications imposing a financial sanction on it, which caused it to lose a pocket of NIS 8.5 million.
The applicant claimed that he had met the burden imposed on him for this preliminary stage of the proceeding, and had laid a preliminary evidentiary foundation justifying the acceptance of the application. According to him, Bezeq has a prima facie cause of action against its officers who breached their duties of care and fiduciary. It was also argued that the officers exceeded their authority, and that their actions and omissions also constitute negligence and breach of statutory duty in a manner that establishes a cause of action against them. The Applicant further noted that Bezeq claimed in bad faith that the officers were given letters of exemption and indemnity, even though this is not the case.
- Claims regarding the company's conduct before the reform came into effect - The Applicant claimed that Bezeq took advantage of the five years between the beginning of the reform in 2010 and its entry into force in early 2015 in order to try to thwart the reform and its advancement. During these years, the company operated under the impression that the Ministry of Communications was "working for it." The Applicant referred to the letters that Bezeq sent to the Regulator, which in his opinion illustrate the aforesaid (see Appendices 7-8, 10 to the Application).
The Applicant emphasized that Bezeq's petitions to the various courts in which it claimed that there was a lack of proper conduct in the conduct of the Ministry of Communications in connection with the reform were rejected. Bezeq, led by its officers, chose to take the law into its own hands, while pretending to decide which directive from the regulator it will approve and adopt and which it will not. The regulator repeatedly "hinted" to Bezeq that its conduct violated the provisions that apply to it, but the regulator chose to continue its conduct with blatant disregard for the instructions given to it.
- Claims regarding the company's conduct after the reform came into effect - The Applicant added that after the reform came into effect, the company's officers and employees continued to act to thwart it. These actions began on February 17, 2015, as appears from the summary document of the hearing dated February 18, 2015, sent by the Director General of the Ministry of Communications on February 19, 2015, a document dealing with complaints regarding Bezeq's conduct (Appendix 28 to the application).
The Applicant emphasized that Bezeq's violations of the Regulator's directives were systematic violations. He claimed that an evidentiary basis had been laid for the claim that Bezeq's management had defined a clear policy intended to thwart the reform. According to the Applicant, this is not a matter of failed conduct by one junior level or another, but rather an orderly policy dictated by Bezeq's senior officers. Bezeq's attempt in its response to disconnect between the conduct of its officers in implementing the reform and the financial sanction imposed on it as a result of this conduct – a sanction that is the final result of the improper conduct of the officers.
- The Applicant noted that the role of the company's officers is to do everything possible to prevent harm to the company, when their activities must be carried out within the limits of the law. In practice, Bezeq was of the opinion that the implementation of the regulator's directives was a matter of its choice. If Bezeq's officers are not held accountable for the damages they caused to the company, this will encourage future managers to violate the provisions of the law. The Applicant added that Bezeq's officers could not stand the protection of the business judgment rule, since they had deliberately violated a provision of the law.
The Applicant further argued that he did not abandon any of his arguments in the Request for Disclosure and that the Regulator's point of view was not the one that guided him in filing the Request for Disclosure. He further argued that all the documents and details whose disclosure was requested in the application are relevant, and their acceptance will enable him to examine whether to file a derivative lawsuit on behalf of Bezeq against its officers. According to his approach, there is no basis for the claims raised by Bezeq in relation to his good faith, when he has no interest other than the success of the request for disclosure and the request to certify the claim as a derivative (to the extent that it is filed), for the benefit of the company and its shareholders.