Depositing Checks for Immediate Repayment
- According to the plaintiff, upon the termination of the partnership relationship between him and Mr. Alfasi, he continued to market Paragon's products and purchase goods from it. In this framework, he purchased goods from Paragon, between January and March 2014, in the amount of approximately ILS 4.3 million, and gave Paragon checks for them, beginning in April 2014 onwards.
- However, in April 2014 or thereabouts, Paragon's manager approached the plaintiff and demanded that from that date onwards, the parties would switch to supplying goods in exchange for cash payment only.
- As a result, the plaintiff gave Paragon checks in the total amount of approximately ILS 5.3 million, which included payment for both goods supplied in the past and for future goods. It was expressly agreed between the parties that in return for the repayment of these checks, the previous checks that were delivered by him would be returned to the plaintiff.
- Subsequently, the parties reached a number of additional financial arrangements, including with the assistance of the plaintiff's uncle, and as part of each of them, Paragon was given checks, which were supposed to replace the previous checks that were given to her.
- According to the plaintiff, Paragon acted in bad faith and in an unjust and violating manner, when it deposited all the checks for repayment, in a total amount of millions of ILS, without returning to the plaintiff previous checks that were given by him.
- According to him, she acted in this way deliberately, by theft and fraud, with the aim of bringing about his collapse and the collapse of his business (see paragraphs 35-37 of the plaintiff's affidavit).
- On the other hand, Paragon claimed that between the years 2012-2014, the plaintiff himself and through Shira, and during part of the relevant period also in cooperation with defendant 2, purchased goods from it on a significant scale, but that the plaintiff breached all of his obligations to it, as well as the payment arrangements reached with him, and remained indebted in the amount of more than ILS 5 million, which has not been repaid to date.
- Paragon further argued that the plaintiff acted in procedural bad faith, where he concealed the fact that some of the issues and arguments raised by him in the framework of this proceeding had already been discussed and clarified in the framework of another proceeding that took place between the parties.
- The evidence in this case shows that at the time of the termination of the engagement, there was indeed a significant financial debt of Shira to Paragon.
- The letter of claim revealed that at certain stages, the partnership's current debt to Paragon reached approximately ILS 8 million. The plaintiff further claimed that the partnership was given a flexible credit facility of approximately ILS 5 million and that it was expected to repay the current debt to Paragon within a few years (see paragraph 21 of the statement of claim and paragraph 24 of the plaintiff's affidavit).
- CPA Keinan testified that according to the accounting statement of Shira in Paragon, it remained in debt in the sum of ILS 4,664,420, as of November 29, 2015, and this also emerged from the testimony of Mr. Dershewitz (see paragraph 6 of CPA Keinan's affidavit and paragraph 15 of Mr. Dershewitz's affidavit).
- The plaintiff himself also confirmed in the course of his interrogation that at the time of the termination of the engagement, Shira owed a debt to Paragon:
"... To the court's question, I certainly owed money. But I pay you on the condition that I continue to work..." (p. 25, paras. 13-14 of the minutes of the hearing of December 5, 2022).
- He also confirmed that he owes Paragon, personally, the sum of ILS 218,000 (see p. 23, paras. 29-30 of the minutes of the hearing).
- The evidence also showed that there had been previous proceedings between the parties, in relation to the checks that are the subject of the claim and the financial arrangements claimed by the plaintiff.
- Exhibit N/1 is a judgment given in Civil Case 50923-07-18, in which an objection to a request to execute a deed, submitted by the plaintiff, was discussed in respect of the check in the sum of ILS 218,513.21 that he delivered to Paragon. The claim was accepted while the court ordered the plaintiff to pay the full amount of the note to Paragon.
In the framework of the judgment, the court addressed the plaintiff's claims, according to which Paragon did not comply with the debt arrangements that were agreed with it, while stating the following: