Civil Case (Center) 31902-02-21 Excalibur Online Ltd v. Raphael Ben Arar, Israel Police - part 18

(Transcript of March 17, 2025, p.  233, question 1)

And later on in Q.  7-10:

"Q.  So Yaniv received all of the company's assets and he holds assets worth 10 million shekels, and you decided not to sue him for holding these assets.  Only he owns these assets, right? You decided not to sue him.

1. We decided not to sue him."
2. The plaintiffs also had no plausible explanation as to why the lawsuit was filed only in 2024. Shahar was asked why they waited 5 years when the lawsuit was filed, and he replied:

"For two reasons.  The first reason is that we first wanted to deal with real money that we gave Rafi a loan and he didn't pay it back to us.  That was the lawsuit we filed.

Afterwards, Rafi filed a lawsuit against us, and there we discovered other things that we didn't know, we didn't know before.  We didn't know that Rafi actually made a new website together with Yaniv and Oren and receives income there.  We didn't know all this..." (p.  233, paras.  14-18).

This is also because, as stated, the claims were already made in the statement of defense that was filed in the coin lawsuit, about two years before the lawsuit was filed.

208. From Shachar's aforementioned reply, it appears that the plaintiffs had no intention of filing this lawsuit, and it was filed only after Rafi and Adir filed the coin claim.
209. The considerable delay, together with the fact that no claim was filed against the main debtors, and it does not appear that there is an intention to file such a claim, cast a heavy shadow on the sincerity of the claims raised, and may indicate that the claim is a "tactical claim", which is intended to constitute a weight against the coin claim only.
210. However, it is a well-known rule that dismissal of a claim in limine without hearing the case on its merits is an extreme remedy, all the more so when it comes to dismissal in limine for reasons of delay, the use of which is reserved for exceptional and extreme cases only (see Civil Appeal Authority 7940-12-24 Megiddo Regional Council v.  Bliss Dar in Tax Appeal (Nevo, 13 January 2025)) and I am not convinced that this case is one of those cases.  Therefore, I will discuss below, the arguments on their merits.

The claim that Rafi transferred the sum of ILS 570,000 to his custody without permission and authority

211. The plaintiffs petition to obligate the defendants to pay CyberLogic, jointly and severally, the sum of ILS 380,000, plus interest differentials and linkage lawfully for illegally taking funds in the amount of ILS 570,000 from CyberTrade.
212. According to the plaintiffs, on February 15, 2018, Rafi decided, unilaterally, without authority, in violation of the founders' agreement, and despite the fact that he was not a shareholder in Cybertrade, to withdraw the sum of ILS 570,000 into his personal account through an accountant and Ettori, who claimed that she had free access to CyberTrade accounts.
213. According to the defendants, the withdrawal was made with their knowledge, consent and approval of Sarel and Shahar as authorized signatories to the account.
214. Admittedly, the defendants did not present written confirmation of the alleged consent, but there is other evidence to support it.
215. The withdrawal was made following an email message dated February 15, 2018 sent by CPA Vatori to Bank Hapoalim, to which Sarel is also addressed. This email was preceded by another email from the same day the bank was asked to convert foreign currency to shekels in the amount of ILS 570,000.  This notice is also addressed to Sarel (Appendix 25 to Sarel II's affidavit).
216. In other words, the operation was not carried out in the dark. Sarel would have written to those notices and there is no doubt that they were received by him, since he attached them to his affidavit.
217. Insofar as the operation was indeed carried out without the approval of Sarel and Shahar, it was expected that they would write to Rafi or the bank and ask them to stop the operation. This was not done by them.
218. CPA Vatori also testified that any transfer made to the account required approval from Israel and Shachar (transcript of March 19, 2025, p. 32, paras.  20-23).  This was also testified by Rafi (p.  128, paras.  9-12).  This argument, on the face of it, makes sense, since Sarel and Shahar are the only authorized signatories in the account, especially when it comes to such a large sum.  This is also given that the transfer was not made online, but rather as part of a direct contact with the bank.  The plaintiffs did not deny this claim and did not try to deal with it.  They could have summoned a representative of the bank to testify about this, but they did not do so, and the matter, as stated, is in accordance with their obligation.
219. The plaintiffs also did not present evidence that they complained about this in real time, and as noted, they demanded this sum with great delay. It can be assumed that if the action had indeed been carried out without authority, as they claim, this would have been reflected in Scripture.
220. In light of the above, the claim that the operation was carried out without their knowledge and without the consent of Sarel and Shahar was not proven. As noted, it appears that they knew about the withdrawal in real time and did nothing to stop or cancel it.
221. The parties also disagree on the question of whether the withdrawal was for the purpose of balancing the composition of the loans or not. Prior to sending the messages to the bank, CPA Vatori sent an email to Shahar, Sarel and Rafi, in which she informed her that she intended to balance the balance of the loans (Appendix 24 to Sarel II's affidavit).  It was not claimed, and in any event, no evidence was presented to this effect, that Sarel and Shahar objected to this, in real time.  Later, the notices were sent to the bank, which also did not encounter any objection from Sarel and Shahar.  They are presumed, especially in light of the amount in question, that if the continuation were contrary to the agreements, they would have tried to stop it or cancel it.  This was not done by them.  They also did not see fit to sue Rafi for this sum for more than 6 years, until the coin claim was filed.  In these circumstances, it appears that this argument was raised only as a counterweight to the coin claim.  Moreover, the claim was also not proven, given that a single action was presented, without describing the circumstances behind the email message sent by CPA Vatori regarding the performance of the balance, and without presenting the full picture of the account.
222. In these circumstances, the claim in this matter is dismissed.

Loss of investment funds in Cybertrade

223. According to the plaintiffs, Rafi fraudulently stole the software product code and CyberTrade's customer database from them and established a new commercial website behind their backs, together with Yaniv and Oren, using the software code developed by Cybertrade.
224. Therefore, they petitioned to instruct the defendants to pay CyberLogic (which provided the owner's loan to CyberTrade), jointly and severally, the sum of ILS 2,201,118, together with interest and linkage, in accordance with law, for the loss of the investment funds in Cybertrade by virtue of Section 10 of the Contracts Law (Remedies for Breach of Contract), 5731-1970, the tort of theft and by virtue of Section 192 of the Companies Law.
225. The fact that a new website called ZET10 has been opened in partnership with Rafi, Yaniv and Oren, without Sarel and Shahar, is not controversial.
226. There is also no dispute that the system and code were transferred to Yaniv and Oren and that this transfer was carried out with the knowledge and consent of Sarel and Shahar.
227. However, there is a dispute as to the circumstances that led to the transfer of the system and the software code to Yaniv and Oren. While the plaintiffs claim that these were transferred in order for Optimotech (Yaniv and Oren) to repay their debt to Cybertrade, which they claim amounts to €1,871,434, the defendants deny the alleged debt and claim that the code and system were transferred as part of an agreement reached with Yaniv, specifically for the purpose of reimbursing the money invested by Yaniv, Oren and Opimotek in CyberTrade.
228. The agreement reached with Yaniv was not presented.
229. The main debtors - Yaniv, Oren and Optimotek - are not sued.
230. The reckoning with Yaniv, Oren and Opimotek is controversial, and not proven. A single Excel report prepared by an employee of Yaniv and Oren named Kirill Holikov was presented, in several versions, which are not identical.  The employee Kirill was not summoned to testify, even though he could have shed light on this matter.
231. Beyond the single excel report, no accounting documents, an opinion from an accountant, or any other accounting evidence were presented.
232. In these circumstances, and since the full picture has not been presented, there is difficulty in clarifying the accounting system with Yaniv, Oren and Optimotek, and since they have not been sued, there is no room for clarification in this lawsuit, especially when it comes to a complex and extensive accounting that requires a complex factual clarification to decide.
233. In addition, it has not been proven what compensation Yaniv, Oren and Optimotech had to pay for the system and the code, if any. It is precisely from the correspondence between Yaniv, Oren and Sarel dated December 13, 2018 (Appendix 41 to Rafi's affidavit) that Sarel himself claimed that the code and the system were transferred "without asking for a penny".  According to Sarel:

"....  Millions have been invested in this system and I trust you and suggest you take the code to use without asking for a penny....  I don't know people who pass a system at this level like this, and Oren will also approve of it..."

234. In addition, no expert opinion was presented that the newly established website is based on CyberTrade's system and its customer base.
235. Insofar as the plaintiffs have claims of debt owed by Yaniv, Oren and Optimotech to Cybertrade, they must file a separate claim against them (a derivative claim or a personal claim, I do not express a position on this matter) and in the framework of which it will be possible to ascertain whether the system and code were stolen from Cybertrade or transferred as part of the accounting between the parties. To the extent that it is determined that the system and the code were indeed stolen, the way will be open for the plaintiffs to sue Rafi and Adirim for their part and involvement in this theft, to the extent that they were.
236. There is no place, in the framework of an indirect claim against a shareholder and an officer, to clarify the claims against a third party, who is not a defendant.
237. This is all the more so when the claim is based, inter alia, on grounds of lifting the veil, which, as is well known, its use is extremely cautious and reserved for exceptional cases, and of breach of fiduciary, which is doubtful whether it gives rise to a personal claim by shareholders (as opposed to the company) against another shareholder and officer of the company (CA 741/01 Kot v. Estate of the late Yeshayahu Eitan (Nevo, 19.5.03)).
238. In light of the aforesaid, the claim in this matter is dismissed.

Optimotech's Clearing Funds Debt

239. In the framework of this ground, the plaintiffs petitioned to instruct the defendants to pay Pool Position and Wiz Star, jointly and severally, a total of ₪326,666.67, the value of which as of the date of the debt was created, the sum of ILS 1,311,534, plus interest and linkage differentials in accordance with law, in respect of the relative share of plaintiffs 4 and 5 in the debt of the clearing funds.
240. According to the plaintiffs, as part of the agreement between Rafi, Oren and Yaniv from May 2019, Rafi received from Miniv and Oren a total of at least €490,000, in two different installments, out of a debt owed by Optimotech to Cybertrade.
241. In this claim, the plaintiffs rely on a correspondence between Rafi and Oren on WhatsApp (Appendix 13 to Sarel II's affidavit).
242. Rafi and Oren denied in their testimony that the money was paid to Rafi or anyone on his behalf.
243. The plaintiffs did not present evidence that the funds were actually received in the account of Rafi or anyone on his behalf, and even from the correspondence on which they rely, it does not explicitly emerge that the funds were paid to Rafi or anyone on his behalf.
244. In these circumstances, the plaintiffs did not meet the burden imposed on them to prove that Rafi received the money, and the claim in this matter is rejected.

Theft of investment funds in currencies

245. The plaintiffs petitioned to instruct Rafi to pay Sarel and Shahar a total of $262,245, the value of which as of the date the debt was created, amounting to $902,122, plus interest differentials and legal linkage, for the theft of the investment funds in currencies.
246. According to the plaintiffs, Sarel and Shahar transferred to Rafi the balance of the investment in the coins that had accumulated in the digital wallet in order to transfer it to Yaniv, according to the agreement formulated between Yaniv and Rafi, but the funds remained with Rafi and were not transferred to Yaniv.
247. There is no dispute that the balance of the funds in the digital wallet was transferred to Rafi. However, it was not proven that the funds were indeed not transferred to Yaniv.
248. In order to prove their claim, the plaintiffs refer to the testimony of Yaniv (transcript of March 19, 2025, p. 76, paras.  18-20) in which he was asked:

"Q.  Okay, let's stop here for a second.  So you actually get a digital wallet, right? That it has $400,000, something like that, $397,000, right?

1. No."
2. It is not clear from the answer whether Yaniv answered in the negative whether he received the digital wallet or whether he referred in his answer to the value of the wallet, as presented in the question.
3. According to the plaintiffs, Rafi confirmed in his testimony that there is no evidence that Yaniv received the digital wallet, but a review of his testimony, to which the plaintiffs refer (transcript of March 19, 2025, pp. 132, paras.  22-28 and p.  133, paras.  1-3), shows that Rafi insisted that the digital wallet was transferred to Yaniv.  Although he did not know how to present a reference to this, he referred to a WhatsApp correspondence between him and Sarel dated March 12, 2019 (Appendix 57 to Sarel's affidavit), in which Rafi writes to Sarel: "I gave him the tracer (the digital wallet - Y.S.).  I have a warranty for $360,000 of that amount.  He also signed the agreement for me.  Good luck," and Sarel replies, "Okay." In other words, in real time, Rafi informed Sarel that he had transferred the digital wallet to Yaniv, and Sarel accepted it.
4. No real correspondence was presented in which the plaintiffs complained that the digital wallet was not transferred to Yaniv, and no written evidence was presented that the digital wallet remained with Rafi.
5. Under these circumstances, it is not possible to determine what happened to the funds.
6. If the digital wallet was indeed transferred to Yaniv, the place to clarify this is in a separate lawsuit against Yaniv, in which the accounting system with him will be clarified.
7. In light of the above, this argument is also rejected.

Stealing software maintenance costs

255. The plaintiffs petitioned to oblige the defendants to pay, jointly and severally, to Pool Position and Wizz Star the sum of ₪33,333, which as of the date the debt was created, amounting to ILS 126,032, plus interest differentials and linkage in accordance with the law, for the theft of CyberTrade's software maintenance funds.
256. According to the plaintiffs, Rafi pocketed $50,000 that Miniv received on February 27, 2018, in cash, for the maintenance of CyberTrade's software costs, in exchange for transferring them to CyberTrade.
257. Rafi did not deny in his affidavit that he had received the aforementioned sum, but claimed that it remained in his hands in agreement as part of the calculations made between the parties. He further claimed that an inquiry he conducted revealed that on February 26, 2018, Sarel and Shahar exchanged the sum of $118,200 into shekels without his knowledge and without giving him his share (paragraphs 115-116 of his affidavit), and attached a copy of a voucher from the change addressed to Sarel (Appendix 47 to Rafi's affidavit).
258. In his second affidavit, Sarel presented his correspondence from that day with Rafi (Appendix 21 to Sarel's second affidavit), in which Rafi states that he had closed all the accounts at the exchange and that he would come the next day to make an account. Sarel replied: "Okay."
259. From the aforesaid, it appears that there were accounts between the parties and it is not possible to separate the sum of ₪50,000 that remained in Rafi's hands from the accounting as a whole, just as it is not possible to isolate the sum of ILS 104,000 claimed by Rafi from the funds that were exchanged.
260. Therefore, neither the plaintiffs nor Rafi were able to prove that the aforementioned sums were stolen and the claims in this matter are dismissed.

The Result

261. In light of all of the above:
262. The loan claim is accepted (except for the claim for compensation for breach of contract).
263. The defendants (Rafi and RBA) must pay, within 30 days from today, the sum of US₪647,000 at the dollar rate as of May 17, 2017 (ILS 3.6076), together with interest at the rate of 10% for 12 months, as of May 17, 2016. Interest and linkage differentials will be added to the aforementioned amount as required by law from the date of filing the claim until the actual payment.

• In addition, the defendants will bear the plaintiff's expenses in the sum of ILS 150,000, which will be paid within 30 days from today.

1. The deposits that Excalibur deposited in this case in the total amount of ILS 75,000 were returned to her through her counsel. In addition, the self-obligation that the depositor has made is hereby canceled.
2. The coin lawsuit, with all its affairs and grounds, is dismissed.
3. The lawsuit, case 16633-03-24, is also dismissed.

• Since both the coin claim and the claim that is the subject of file 16633-03-24 were dismissed, and since it became clear that they are nothing but "tactical" claims, I do not make an order for costs to both parties in respect of these claims.

262. The right to appeal to the Supreme Court as a matter of law.

Granted today, December 17, 2025, in the absence of the parties.