Civil Claim in a Speedy Hearing (Herzliya) 27393-07-23 Kol Ramama Ltd. v. Homey Social Mortgages Ltd.

Judgment

1. before a monetary claim in the amount of ILS 34,575 in respect of the defendants' debt to the plaintiff.

Background and arguments of the parties

1. According to what is stated in the statement of claim, the plaintiff, a company that operates a radio station that caters to the ultra-Orthodox, religious and traditional audiences, signed an advertising agreement on February 26, 2020, with defendant 1, a company owned and managed by defendant 2, in which it undertook to pay the plaintiff the sum of ILS 34,575 in exchange for publications, the broadcast of sponsorship advertisements for the "Halacha Quiz" program and advertisements (hereinafter: the "Agreement" and/or the "Engagement").  The plaintiff fulfilled her contractual obligation, but defendant 1 did not pay the full consideration that was determined.  Since defendant 2, a shareholder, director and CEO of defendant 1, acted to deprive the plaintiff of his right, it is necessary to order that the veil of incorporation be lifted and that he be directly charged with the debt of defendant 1.
2. At the hearing, the plaintiff's representative, Mr. Ariel Deri, the plaintiff's CEO and marketing manager, stated that he was involved in approving the engagement in its second stage without being present at the agreement signing meeting.  According to him, the defendant approved the engagement and payments in a meeting with the plaintiff's marketing agent, Mr. Yitzhak Levy (hereinafter: "Mr. Levy") and even requested changes in the publications.  The plaintiff's representative stated that most of the engagement was managed by Mr. Levy.  To the best of his knowledge, some of the checks given by defendant 1 were paid and some were forfeited.  The witness did not recall exact amounts regarding the amount of the debt and the amount of payments made, but believed that at least two checks had been paid.  The plaintiff's representative confirmed that he met with another representative of defendant 1, Mr. Snir Cohen (hereinafter: "Mr. Cohen") at the defendant's offices in Yehud, but not with defendant 2.
3. Defendant 2 petitioned to dismiss the lawsuit against him.
4. According to what was stated in the statement of defense on his behalf, the plaintiff has no reason to charge him personally.  The plaintiff was not provided with a personal guarantee for the debts of defendant 1 on the part of defendant 2 and the exceptional conditions set forth in the Companies Law, 5759-1999 (hereinafter: the "Companies Law") for imposing personal liability on shareholders or directors are not met.  The ruling significantly reduces the cases in which it is possible to lift the veil of incorporation.  The statement of claim does not specify, even in a minimal way, why the specific case justifies a deviation from the rule of separate legal personality, and does not relate to specific omissions or acts committed by defendant 2 towards the plaintiff.  In addition, defendant 2 was not involved in the alleged engagement which, according to what emerges from Appendix 2 to the statement of claim, was made between the plaintiff and Mr. Cohen, another director of defendant 1.  Defendant 2 did not manage the company on an ongoing basis, even with many serious allegations against Mr. Cohen for his conduct in defendant 1.
5. At the hearing, defendant 2 stated that he knew nothing about the engagement because he was not active in the management of defendant 1.  According to him, Mr. Cohen managed defendant 1 and "stung" him with large sums of money.  Although he was a director and shareholder, he does not know about the engagement with the plaintiff.  Defendant 2 confirmed that the plaintiff provided services but did not know why defendant 1 did not pay its debts or annual fees to the Registrar of Companies.  Defendant 2 did not remember, and as a result, did not confirm, that he had signed checks in favor of the plaintiff.
6. No statement of defense was filed on behalf of defendant 1, and on May 20, 2024, a judgment was issued against her in the absence of a defense.
7. There is no dispute between the parties that an agreement was signed between the plaintiff and defendant 1 and there is no dispute that the plaintiff performed her part of the agreement without receiving the full consideration that was determined.  It therefore remains to decide the claim against defendant 2, the issue of his personal liability to defendant 1 by virtue of lifting the corporate veil.
8. The Ottoman Settlement [Old Version] 1916After reviewing the pleadings and their appendices, hearing the parties' testimonies and weighing the arguments of the parties against each other, I have come to the conclusion that on the basis of the provisions of the law, there is no choice but to dismiss the claim.  The following are my reasons in summary:

12-34-56-78 Chekhov v.  State of Israel, P.D.  51 (2)