It should be emphasized that we are not dealing with an event in which esoteric agreements between parties are not "translated" into a monetary sum, but rather with someone who claims to have paid millions of shekels for those rights.
- The plaintiff petitioned for the provision of accounts on the basis of the claim regarding the location of the record of the purchase of the franchise from Paragon, but he himself did not see fit to present a signed balance sheet of Shira Company, or other accounting documents, on his part, from which it was possible to learn that the transfer of funds was made for the purpose and for the purchase of a franchise.
In fact, the plaintiff chose not to present the accounting books of Shira Company, and allegedly they did not record the alleged payment for the purchase of the franchise. Where a company under the control of the plaintiff does not see fit to record in its books such a significant expense for such a significant activity, it is not clear why the plaintiff believes that there is justification in law to require Paragon to produce data from its accounting books.
- Moreover, the plaintiff's testimony showed that he also did not report to the Income Tax Authority about the purchase of the franchise, as did Shira (see p. 8 of the minutes of the hearing of January 23, 2019 and p. 28, paras. 12-34 of the minutes of the hearing of December 5, 2022).
- The plaintiff further confirmed in his cross-examination that he had never received an invoice for the purchase of the franchise and that such an invoice had not been issued (see p. 29, s. 34 - p. 30, s. 1 of the minutes of the hearing).
- In contrast to the arguments of the plaintiff's committees, the defense evidence was also submitted, from which a completely different picture emerged.
- The testimony of Paragon's accountant, who has served in his position since the day of Paragon' s establishment, Mr. Haim Keinan, revealed that he was never informed by Paragon's CEO or shareholder of the sale of a franchise for the sale of the company's products, with all that this entails.
According to him, Payment for a franchise requires a different registration than that which is carried out during the ongoing sale of the company's products And that in the books of the company that were made by him, no sums were recorded in respect of the sale of such a franchise. According to him, He first heard the claim regarding the sale of the franchise to the plaintiff only after the lawsuit was filed.
In addition, he testified that the company's numbers show that during the relevant period its products were also sold to customers other than the plaintiff (see paragraphs 3-5 of his affidavit).
- Shlomo Haberman, the CEO of Paragon at the relevant time and today, and Mr. Pini Darshewitz, a shareholder in Paragon, both testified that Paragon never entered into a franchise or exclusivity agreement for the marketing of its products, neither with the plaintiff or the defendants nor with anyone else, and that this is contrary to the company's policy (paragraphs 5 and 6 of Mr. Haberman's affidavit and paragraphs 10-12 of Mr. Dershowitz's affidavit).
- These contradictory testimonies, combined with the plaintiff's lack of evidence, made it very difficult to adopt the plaintiff's version regarding the purchase of the franchise in exchange for the payment of the defined sum of ILS 3,750,000.
Payment of the funds, manner of their registration and purpose
- Where no agreement or additional evidence was placed before me that could support the plaintiff's version of the purchase of the franchise, there was room to further examine for the purpose of what the various sums that were actually paid, whether by the partnership or by the plaintiff, where there is no dispute that these and other sums were indeed paid, and where prima facie, At least a significant portion of those sums were paid close to the date when the partnership began operating as a distributor for Paragon.
- As stated, in the statement of claim, the plaintiff claimed that this sum was paid in full for and for the purpose of purchasing the franchise from Paragon (in this regard, see, for example, paragraph 11 of the statement of claim).
- However, a reading of the plaintiff's cross-examination is sufficient to show considerable discrepancies between what is stated in the statement of claim and his developing version. This is the case with regard to the identity of the party who paid the funds, so with regard to their purpose, and so with regard to the parties' agreements regarding the use to be made of those funds.
- Thus, for example, with regard to the question of who is the entity/entity which, according to the plaintiff himself, received the franchise from Paragon and was the owner, the plaintiff claimed, in one place, that he purchased the franchise personally, and even took personal loans for this purpose (see, for example, pp. 28, 25-28 and 29, paras. 1-9 of the minutes of the hearing of December 5, 2022; p. 37, paras. 28-29 and 38 s. 1-9 of the minutes of the hearing of December 7, 2022). He also testified that there is no record anywhere of money that Shira paid for the franchise and that it cannot claim to have purchased it (see p. 40, paras. 13-15 of the minutes of the hearing of December 7, 2022).
Elsewhere, the plaintiff claimed that it was the partnership that purchased the franchise and that it was also entitled to sell it (see paragraphs 17.1.3 and 17.1.4 of his affidavit and testimony at pp. 39 and 19-25 and 40 s. 20 of the minutes of the hearing of December 7, 2022).