If this is not enough, the case law held that "there is no change in the situation of a defendant for the worse due to a change in objective circumstances that are not dependent on the plaintiff, as a change derives from the plaintiff's conduct. It follows that the dismissal of a claim on the grounds of delay may, in general, be possible where the plaintiff's lack of good faith or a real representation of a waiver or waiver of his right is what motivated the defendant to an act or omission that brought about a change in his situation for the worse" (Talmud Torah, at pp. 446-447). Therefore, even if we assume that over time Kost's situation has indeed changed for the worse, it has not yet been proven that this change was caused by improper conduct on the part of the liquidators or as a result of the existence of a representation regarding the waiver of the rights of the suit."
- Later in that paragraph of the appeal decision, it was determined that part of the delay in filing the lawsuit stemmed from the liquidators' desire to negotiate and negotiate with Kost in an attempt to make the legal process redundant. It was held that such conduct is appropriate and should be encouraged, and it should not be attributed to the plaintiff's duty as a "delay" that justifies blocking his way to the courts (ibid., at the end of paragraph 78):
"Finally, I will also note that I do not believe that the delay in filing the lawsuit stemmed from the bad faith conduct of the liquidators, and in any event, such a claim was not raised by Kost at all. It should also be noted that part of the delay in filing the lawsuit stemmed from the liquidators' desire to resolve the dispute by way of dialogue outside the court, and such conduct should be encouraged (see: Talmud Torah, p. 450; Civil Appeal 6407/14 Karmiel Local Planning and Building Committee v. Masri, para. 43 (August 29, 2016))."
- I also cannot accept the defendant's argument in its summaries that the delay caused real evidentiary damage due to the death of the chief bookkeeper, who according to it was defined as a "key witness" who could have supported the defense's arguments regarding the company's conduct in real time (ibid., at paras. 190-191). Similar to the plaintiffs' claim that in their opinion the "concealment" of the working papers that the defendant undertook to keep and deliver, and with the years of wasting time until she claimed that Yohanan Gav could no longer testify, the death of witnesses or the absence of documents do not in themselves justify blocking access to the courts, and their place, if any, in the level of evaluating the evidence and the weight that will be given to them (Civil Appeal 6426/13 Azrieli Group in Tax Appeal v. Antitrust Commissioner, In para. 10 [Nevo] (August 25, 2014); Yaakov Shaked, The New Civil Procedure 126 (2023)). I will also add that with regard to the loss of the working papers - and as I will explain later - the burden of maintaining these papers rests on the shoulders of the defendant, the auditing accountant; As for the death of the chief bookkeeper, there is sufficient evidentiary material to decide this claim even without his direct testimony, and this aspect did not deprive the defendant of the possibility of refuting factual claims.
- In the circumstances of the case, I have come to the conclusion that the alleged delay has no procedural effect of rejecting the claim, and it is possible at most that it will be examined from the evidentiary aspect.
- I cannot accept the defendant's argument that the non-inclusion of Fahn Kanna in the proceeding constitutes an obstacle to the clarification of the claim, and I accept the plaintiffs' argument in their summaries (ibid., paras. 176-181). Fahn Kanna served as the company's auditor until 2006 only, while the main dispute before me focuses on the reports for the years 2007-2009, which were audited and signed by the defendant. A plaintiff's choice of whom to sue is at his discretion, and the non-addition of another potential defendant does not in itself deprive him of the right of access to the courts or establish a procedural barrier. Insofar as the defendant believed that Fahn had acquired relevant liability, it had the option of taking appropriate action, including sending a third-party notice. Therefore, the failure to attach Fahn Kane does not block the investigation of the claim on its merits.
A note to conclude this section on an insolvency court approval
- With regard to the insolvency court's approval of the claim only about two and a half months after it was filed, the Supreme Court ruled in its appeal decision that this does not constitute an absolute obstacle and that this defect can be cured by obtaining retroactive approval, while taking the personal risk of the person filing the proceeding regarding expenses. Thus in the language of the appeal decision (para. 80):
"The absence of a certificate of insolvency from the court does not constitute a barrier to filing a claim, but rather means that the person filing the proceeding risks that if he does not succeed, he will have to bear the costs. Accordingly, it has long been held that "[]a defendant is not entitled to defend himself against a liquidator's claim except on the grounds that the court has not given the court's approval to file it" (Civil Appeal 3322/92 Fluke v. Zingel, para. 7 [published in Nevo] (December 2, 1993)). See also: Additional Civil Hearing 6300/14 Double K Fuel Products (1996) in Tax Appeal v. Gazprom Transgas Ochta Ltd., para. 8 [published in Nevo] (November 25, 2014); Civil Appeal 8166/11 Eli Reuven Construction and Investments Company in Tax Appeal (in liquidation) v. Ella & Sons Building Contracting Company (1972) Ltd., paragraph 28 (April 12, 2015))."