I will discuss each of these arguments below.
The claim that there was an agreement to offset
- According to the defendants, in January 2020, it was agreed with Gil, a relative of Sarel's, that the loan money would remain in the hands of RBA to offset the alleged debts. As will be detailed below, this claim has not been proven.
- The claim was raised by Rafi in his affidavit, without being supported by any evidence, written or oral testimony.
- On the other hand, Gil stated in his affidavit that his goal was to try to understand why Rafi refrained from repaying the loan. He did not present himself as a person authorized to present, and certainly not to agree to a compromise proposal of one kind or another, and/or to link the repayment of the loan to other disputes related to additional collaborations between Sarel and Rafi (paragraph 8 of the affidavit).
- This was also confirmed by Sarel in his affidavit (paragraph 46), and this was evident from Shachar's testimony (transcript of March 17, 2025, p. 214, paras. 17-27).
- Gil was cross-examined and was not asked about the offset at all. He confirmed in his testimony that Rafi had raised claims before him regarding his joint company with Sarel and Shahar, but he was not asked, and in any case did not mention anything, about the alleged agreement to offset. According to case law, when a party refrains from cross-examining a witness on a substantive and controversial point, this refusal works to his detriment and may be considered as consent to the version raised in the main interrogation (see Criminal Appeal 9141/10 Avraham Stuart v. State of Israel (Nevo, 28 April 2014)).
- In these circumstances, the defendants did not meet the burden of proof imposed on them to prove that there was consent, as aforesaid, to the offset, and the claim in this regard is rejected.
Claim to lift the curtain
- According to the plaintiffs, all the rights relating to our case should be lifted and attributed to Rafi, Sarel and Shahar themselves, in accordance with the provisions of section 6 of the Companies Law. In other words, it is sought to lift the "inverted" veil and attribute a company's right to its controlling shareholder.
- In light of the result that I have reached, as will be detailed later in the judgment below, with respect to the coin claim that was rejected by me on all its grounds and which is the basis for the offset, I have not found it necessary to elaborate on this argument.
- However, it should be noted that the case law has determined that attributing a right to a shareholder, i.e., lifting the veil in favor of the shareholder, is very unusual and will be used sparingly. Thus, according to the Supreme Court, other municipal applications 7957/13 from Derech Oz in the Tax Appeal v. Tel Aviv Tax Assessor (Nevo, November 1, 2018, para. 79):
"Naturally, attributing a right to the shareholder, i.e., lifting the veil in favor of the shareholder, is a rare manifestation of the principle of lifting the veil. At its core, lifting the veil is defined as a process that is intended to benefit plaintiffs who have been harmed by the improper use of the company's separate legal personality by the shareholders. As a rule, the shareholders who initiated the incorporation are supposed to be aware of the limitations of the operation of an artificial personality, and therefore they will also be denied, for the most part, from the possibility of suing for the lifting of the corporate veil in their favor. However, in rare situations, external parties (other than the company, or its shareholders) will take advantage of the aforementioned legal structure. In these situations, it is therefore justified to lift the corporate veil in favor of the shareholders..."
- In our case, the claim that there was a mixing of assets between the personal businesses of Sarel and Shahar and those of the companies they own, and on the basis of which the lifting of the veil was sought to be carried out, was made in general terms and not proven. This is especially true with regard to the relationship between Excalibur and Sarel and Shahar, in her case, it was not claimed at all, and in any case it was not proven, that there was any mixing of assets between her assets and those of Sarel and Shahar, and certainly that there was a mixing of assets that justified the execution of the reverse lifting of the veil, i.e., to attribute Excalibur's right to collect the loan money, to Sarel and Shahar themselves.
The Claim for Damages for Breach of Contract
- In addition to obligating the defendants to repay the loan money, the plaintiffs petition to require the defendants to pay damages in the sum of ILS 300,000 for breach of contract and for losses incurred by them as a result of the non-repayment of the loan, including the need for loans in order to cope with the resulting lack of pocket.
- The claim was made in vain. Not a single piece of evidence was presented of the damage or loss caused to the plaintiffs as a result of the breach of the loan agreement. The loan agreement is also silent regarding the award of agreed damages in the event of a breach.
- In these circumstances, and since the burden of proof is on the plaintiffs, their claim for compensation is dismissed.
- The Coin Claim - Civil Case 35413-12-21
- The claims in this lawsuit relate to two main cases:
- The first is the coin venture affair (Cybertrade Company).
- The second is the affair of the digital currency called "Sirin Labs".
- In relation to the two affairs, the plaintiffs (Rafi and Adirim) claim that they were the victims of a series of fraudulent acts by Sarel and Shahar, which robbed them of their money and caused them financial damage and loss of profits.
Below I will relate to each of the parashiot.