Civil Case (Tel Aviv) 44767-04-14 Israel Alhalal v. Rami Geva Mikulitsky - part 3

The plaintiff's reply summaries

41. In accordance with the right granted to him, the plaintiff submitted reply summaries in which he claimed that the defendants included in their summaries partial, distorted and tendentious quotes from the minutes; that they included a new factual version, which constitutes a change and expansion of the front, according to which an agreement for business cooperation was reached, as opposed to the version according to which Rami was an employee of the plaintiff's salaried employee; according to the plaintiff, since the defendants chose to lie on such a material point, the presumption of falsehood mentioned in other municipal applications 765/18 Hayun v. Hayun should be applied to them (Nevo, May 1, 2019).  The plaintiff protested the defendants' attempt to portray him as a wealthy man, a shrewd and sophisticated businessman.  The plaintiff rejects the claims of forgery in the business documents and explains that all that is done is to complete financial data and trace the correct situation in practice.  He also rebuffed the defendants' claims regarding his unreliability and failure to bring witnesses.
42. The plaintiff concluded the summaries of the reply with the following words:

 "The plaintiff hopes that this long and painful affair, which taught him a great lesson, will end on a positive note, through a judgment that will enable him on the one hand - to protect himself from the holders of unknown checks who are still circulating 'outside,' and on the other hand - to serve as a means for him to share his damages, even if only partially."

Discussion and Decision - and First to the Summary Decision

43. Indeed, this is a long and painful affair, as the plaintiff signed the summaries of the reply on his behalf. At the same time, I have come to the conclusion that the version of each of the parties is not without contradictions, perplexities and doubts.  On the one hand, I do not accept the plaintiff's version that this is an innocent person who fell victim to a sophisticated act of sting; On the other hand, I do not accept the argument(s) of the defendants, who seek to distance themselves completely from that complicated, illogical and unnecessary financial activity - unless the underlying purpose is inconsistent with the provisions of the law and acts in their own interest.
44. Any reader with eyes in his head will ask himself why a legitimate car wash business, with a respectable clientele (see Appendix 3 and 5 to the plaintiff's affidavit, clients such as Dan Transportation, Tor Bos, Shlomo Sixt and others), who pays by bank transfer and not in cash (section 107A(6) of the court's expert opinion), works in such a crooked and untraceable manner? Why is it that a business whose income during the period of activity amounts to approximately ILS 1.9 million and is supposed to earn up to 60% (see paragraph 55 of the court's expert opinion), so that its expenses should not exceed ILS 1 million, distribute more than 700 checks that are signed in advance "on the part", without limitation "to the beneficiary only", in a total amount of ILS 6.6 million? Why are invoices in the amount of ILS 2.8 million canceled? Why are there so many accounting operations without receipts? Why is there a need for such a massive plucking of cash?
45. It seems that the affair is not only long and painful, but also sad and involves clearly illegal acts, when this is not the place to bring those involved to justice - paying the workers in the dark; 'inflating' activity cycles in order to approve loans; running a business (behind the scenes) during bankruptcy; false registrations; Moreover, there are actions that are lawful from them onwards. He should say immediately - this is not the place to discuss these acts, as stated.  At the same time, this is how this "joint business" was conducted.  At this stage, I am required to decide only on the internal level of relations, between the plaintiff on the one hand and the defendants on the other.  This judgment does not have the power to decide the rights of third parties vis-à-vis any of the parties involved (as the plaintiff actually seeks in the last paragraph of his summary), and I do not believe that any of them is an innocent lamb.
46. However, I have come to the conclusion that in terms of internal relations, the plaintiff was indeed "blinded" by the possibility of expanding his small business to market cleaning products and developing into a business that profits four times as much, as presented to him by Rami; This attractive opportunity to expand the business caused the plaintiff to cooperate with Rami, even though he knew that he was complicated with debts and therefore had to be managed through his own accounts; The plaintiff was indeed tempted to sign checks for the part, but he believed that they would be used only for the expenses of the business, and certainly not for the payment of the debts of the defendants or any of them to third parties. I have come to the conclusion that the plaintiff did not give permission to make payments that are not related to the business, and in this sense his money was stolen, and this theft must be returned.  I will explain these assertions.

The essence of the "partnership"/"cooperation"/"joint business", which operated through Mor Marketing

47. Much text was spilled on the question of the nature of the relationship between the plaintiff and Rami and their definition - from "partnership"; "Business Cooperation"; and a "joint business." The parties disagreed as to whether the plaintiff purchased Nitza's share in that "partnership", as the plaintiff claimed, or whether he repaid Rami's debt to Nitza from the proceeds of the joint business, out of a desire to win Rami's contribution to the expansion of his business (as the defendants claim in their summaries). In view of the conclusion I have reached, I am of the opinion that the question of whether we are dealing with a partnership in the legal sense, or whether we are dealing only with "business cooperation", is of no importance, and I will elaborate.
48. From the arguments of the parties and from the evidence it appears that, at the very least, there was business cooperation between the parties. There is no dispute about the fact that the plaintiff was stationed at the "Front", and the entire activity was carried out through his authorized dealer number and through his bank accounts.  This was done for the simple reason that Rami was bankrupt at the time; All of his assets are vested in a trustee appointed by the Lod District Court.  Needless to say, all of Rami's income is supposed to be reported to the trustee; Any independent business activity must obtain the approval of the trustee; Reports are supposed to be on a monthly basis; The monthly payment paid by Rami, the debtor, is supposed to be affected by the amount of his income.  All of these are basic concepts in bankruptcy law, and will be examined, if necessary, in the bankruptcy case.
49. The method according to which Rami places another party at the "front" is not alien to him, and this is what emerged from the evidence. Rami admitted in his summaries that he did not run an independent business, because he was bankrupt.  I have come to the conclusion that in order to manage the car wash business, which was nicknamed "Dribbon" (see Exhibit P/27), Rami operated in the past under the auspices of Sigalit, and later through Nitza, whom he also left in debt.  Regarding the identical pattern of action, see paragraphs 22-27 of Nitza's affidavit; Sections 5-7 of Shachar's affidavit; It is easy to discern that the activity is defined as a "joint business"; This is carried out through a non-bankrupt instructive dealer; There is a desire to expand the business and take out state-guaranteed loans.  See also in this context the testimony of Nitza, who describes a series of events very similar to the matter before me (p.  892, paras.  10-34; p.  893, paras.  1-8):
50. You admit in section 27 that he cannot operate the business with a bank account of a licensed dealer, you said that here as well. Right?
51. Yes.

(...)

1. You weren't worried that this whole business was run from your and your son's account, right? Have you opened a joint account?
2. I opened an account of Paz (..) Shachar Paz.
3. A joint account on both of you at Discount Bank (...) in fact this account in which you operated the business, right?
4. Yes.
5. And you also gave Rami a credit card for that account, right?
6. Yes.
7. And then you also gave him checkbooks?
8. No (...) Absolutely not, never (...) every check I wrote.

Finally, as she clarified in her answers, Nitza was left with debts in the amount of half a million shekels (p.  903, questions 28-33; p.  904, question 1):

1. How much are you losing from Rami? (...) How much did Rami cost you?
2. What I borrowed was what I lost.

(...)

1. About half a million shekels.
2. Yes.
3. Rami used the same method through Sigalit's bank account, and see her testimony in the framework of an objection to the execution of a note (Ashkelon) 42107-02-12 Atias v. Tubul (Nevo, March 4, 2012) in the minutes that were submitted and marked P/16:

"In retrospect, what happened with Mr. Geva...  I want to explain the situation I found myself in.  Mr. Geva is a married man.  I've been going through a tedious divorce process for 10 years.  Mr. Geva turned out to be a crook...  We worked together, there were checks that I gave in my business, when he transferred his business to me with a clear sting, which was interrogated by the police...  In April 2009...  I'll try to get a little early, since 2006 Mr. Geva had several businesses when he knew me.  Today, in retrospect, I understand that it was a scam and a sting...  He handed over his girlfriend to me in order to sort out the scam he had done.  Today, in retrospect, when I write and do one and another and not in this chaos, I begin to understand what happened here.  I was a woman with a wealth report at the bank.  The first time I was restricted was in April 2009 at Bank Leumi."

51. See her interrogation at pp. 4-5 of Pro.  P/16, which indicate that we are dealing with a "rebroadcast", and unequivocally support the plaintiff's thesis:
52. Please explain to the court why you write in section 2 that you gave open checks to Mr. Geva and together with him you started operating a business for washing cars without water, and you give it in December 2009 and at later dates: "intended to pay the expenses of the business." Explain why that after you are burned in the banks, you claim that you have started to suspect your spouse and your father gives you a small and limited window for your personal needs only, why do you sign an open check for the business?
53. The car wash business was conducted in 2007-9, in my opinion, at Bank Leumi, in the account of the Geva Point company in a tax appeal, and not as I am being asked here. The business accounts of the car wash business fell at Bank Leumi, due to the fraud I underwent.  This account was not opened for the purpose of the business.

To the court's question, the checks I gave Mr. Geva were only in the event that there was an urgent case in the field and I would not be there and would not be there, certainly and certainly it was in the amount of a few hundred or a roof of 1000 ILS because I could not give more than that.  That's the only thing.  What's more, I was in the midst of distress and those few checks were supposed to be my mouth to eat falafel or a puncture and there was nothing I could do.  We must not forget that he kept walking on me with the affair and all the tricks he did to me.  For this purpose, they were given to him, and certainly not what he did to them...  (my emphases).

52. When Rami confronted in his testimony with Sigalit's words and the judgment given in her case, and with the fact that he did not declare it, he only claimed that he was not familiar with the judgment (p. 529, paras.  24-34):
53. I wasn't there at all, I don't know what you're talking about, brother, I wasn't there, I don't know what it is.
54. Don't you know? Don't you know that too?
55. No.
56. So there is a judgment here at the end of the judgment against you in a third-party notice, "The third party must pay, the defendant sends the following notice the sum of such and such" You are not familiar with this judgment.
57. No (...) I don't know what it is at all, I'm seeing it for the first time.
58. In this context, it is worth noting that the similar allegations made by Ofer and his wife against Rami are also noted. In this case, too, Rami claimed that he did not know what it was about (p.  532, paras.  11-28; p.  533, paras.  1-9 and 20-23):
59. Your brother Ofer and his wife are also in bankruptcy proceedings, right? Or they were.
60. I have no idea, ask them.
61. Don't you know? Do you know that Ofer and his wife also claim that you got them into bankruptcy? Don't you know? I want to read to you, to introduce you.
62. What should I be thankful for?
63. Do you know that your brother came to you with claims that you got him into trouble?
64. I don't know who he spoke to (...) and I don't know what they talked about (...) When will he come up here, interrogate him (...) I'll say again, do you hear me? I'm Rami Geva, I've never taken a loan from Ofer, do you understand? Never before this far, okay? On the contrary, I didn't take it.
65. And Tzipi his wife to take?
66. I don't, I have no interest in her, and I didn't take anything from her.
67. Ofer was questioned about these words in his testimony, and repeated them in an unambiguous manner (p. 820, paras.  19-34):
68. And is it true that you were in such a close relationship that you also lent him money, to Rami?
69. I brought him money, not money - I gave him checks, because Rami got into trouble and all kinds of creditors started coming to his house, and yes, I helped him, yes.
70. How much?
71. Sums that would have simply been issued by checks and the money had to be brought. It didn't work out and I got into trouble.
72. And is it true that you and your wife got into trouble, your wife was also in trouble because of the affair?
73. Because our account was shared.
74. And following these checks that you gave to Rami, you entered, you and your wife, got into bankruptcy proceedings? Is it correct to say that?
75. Yes.
76. I note that the possibility of bringing "methodical testimony" was recognized in principle in an earlier ruling of the Supreme Court and reaffirmed by it in recent years, "to the extent that the similar acts are 'close' to the fact that the subject of the statement of claim, in terms of the matter or in terms of time" (Civil Appeals Authority 2555/20 Satellite Services (1998) in the Tax Appeal v.  Ill 2000 Marketing and Management Ltd., para.  19 of the judgment of Justice Grosskopf and the references therein (Nevo, July 16, 2020) (hereinafter: "the Idol 2000 case"); For further information, see also Yaniv and Aki, Law of Evidence, vol.  2, 990-992 (2020)).  However, it was clarified that the purpose of the civil legal proceeding is not to decide the nature and nature of the parties, but rather to investigate the event of the dispute (Ill 2000, at para.  20).  In the case at hand, I am of the opinion that the past cases show the essence of the cooperation between the plaintiff and Rami and strengthen me in my determinations, since they are identical in the matter and close in time.
77. In addition to the past cases, which reinforce the "business structure" between the plaintiff and Rami, there are other findings that lead to the same conclusion. First, I will mention that Rami claimed both in his statement of defense and in his affidavit that he was an "employee" in the plaintiff's business.  This version completely collapsed in his interrogation (see paragraphs 89-91 of the plaintiff's summaries) and was abandoned in his summaries, where a new version appeared, see what is stated in paragraphs 3 and 28 above.  This substantial contradiction and the sound of a suppressed and belated version that constitutes a change of front are sufficient to deflect the defendants' claims.
78. Second, I did not find any business logic (as far as business logic can be found in the unfortunate series of events described above) in the defendants' version, while the plaintiff's line of thought can be understood. If we accept the defendants' version in their summaries (and ignore the change in the façade and the contradiction to what was stated in the statement of defense and the affidavit), then the plaintiff agreed to repay Rami's debt to Nitza in exchange for Rami's "help" in the business, all this while the business risk was fully placed on the plaintiff.  The plaintiff ostensibly agreed to this, knowing that Rami was in financial difficulties, and even handed over checks to him 'on the portion'.  I am of the opinion that such a version is clearly illogical, especially when Rami claims and repeatedly claims that the plaintiff is a shrewd businessman.  Is there a shrewd businessman who would agree to such a structure of cooperation?
79. On the other hand, there is such logic in the plaintiff's line of thought - until his meeting with Rami he ran a small business with a modest sales turnover (see his motive in Shahar, paragraph 5-7 of his affidavit); The car wash business offered to him by Rami is tangential to his field of activity (marketing of cleaning products); I am convinced that he was presented with a representation according to which the business is likely to generate an income of approximately ILS 280,000 per month (see Appendix 2 to the statement of claim, which details the calculation of the profits that the business will allegedly earn). I will also note that in this section we are dealing with a legitimate business - washing vehicles in the yards of respected customers such as Dan Transportation, Tor Boss and Shlomo Sixt (see the price quotes for customers that were attached in P/8); Contracts are signed with customers; Payment is made by bank transfer and not in cash; The tension of profits is high, as confirmed by the court's expert.
80. Therefore, the plaintiff's version that he believed that he had an opportunity to expand his business by creating a "behind-the-scenes" partnership with Rami - who has knowledge and expertise in the field, is the entity that will operate in the field vis-à-vis customers, suppliers and employees, while the plaintiff provides the financial platform for this and enables him to operate through his accounts - is logical, which is consistent with the evidence and with Rami's past activity, who used to act in this way with Sigalit and with Nitza and Shahar. I do not believe that the agreement (Appendix 131) contradicts this conclusion, but rather is consistent with it - in the tripartite relationship, between the plaintiff, Rami and Niza, the plaintiff agreed to repay the debt to Nitza - since in any case Rami had no possibility of repaying this debt.  On the level of internal relations, the plaintiff was of the opinion that the payment, which was supposed to be spread over 24 months, would be made from the business's revenues, and in any event, by means of this payment, he was purchasing Nitza's share in an existing business, by converting existing contracts with respected customers.
81. In addition, and alternatively, reading the exchange of emails between Rami and Niza, mediated by Grunler (see Appendix 134 to the plaintiff's affidavit), it seems that parts of the agreement do not faithfully reflect the transaction, to put it mildly. From the document of principles that was exchanged between them, it is clear that "Nitza sells the activity" (see paragraph 1 of the Agreement of Principles);Israel undertakes to pay Nitza the sum of ILS 500,000, which constitutes 50% of the company's value," and from what is stated in the margin of the "Agreement of Principles" document provides an explanation of the way in which the parties chose to conclude the transaction, in order to avoid a tax event: "The sum of ILS 500,000 was given as a loan to Rami Geva for the purpose of establishing the business, and Israel's payment to Nitza constitutes the repayment of this loan.  Therefore, it is tax-exempt."
82. In addition, my conclusion - which explains why the plaintiff was "blinded" by Rami's promises, chose to enter into a joint business with him and agreed that the business activity would be carried out through his own accounts - finds further support in Rami's statement of June 23, 2013 (P/7), which he shared with Israel, according to which he intended to earn ILS 180,000 a month. Rami confirmed that the proposal appeared to be written in his own handwriting, but claimed that it was "something that I took out for myself with a sense of humor, it is not directed at anyone (...) during the day at least twice a day I tell myself a joke and I burst laughing with myself (...) I think this is one of those jokes." He also claimed that "I write things for myself and paste them for my inspiration, so I, this Rami Geva, will earn ILS 180,000 every month" (p.  561, paras.  13-34).  I do not accept this explanation, and I am convinced that such statements are intended to entice the plaintiff to cooperate with Rami and to allow the latter to work through his accounts, as he had seduced Sigalit and Nitza in the past.
83. If I summarize my conclusions so far, then this is the business structure agreed upon by the plaintiff and Rami: the plaintiff purchases Nitza's share in the car wash business for ILS 500,000, which will be paid in 24 installments, out of the proceeds of the business. The financial activity will be done through the plaintiff's accounts, since Rami is bankrupt; Rami is in charge of the operational side of the car wash business; Ofer helps him on the administrative side; The expenses of the joint business will be paid out of the plaintiff's accounts, and all the proceeds will flow into this account; The plaintiff relied on the forecast given by Rami regarding the activity cycle (Exhibit 7) and believed that he had a "bonanza".
84. This conclusion provides an explanation for the plaintiff's agreement to deliver to the defendants about 700 checks, signed on the part. At this point, I came to the conclusion that the plaintiff believed in Rami and Ofer and believed that these checks would be used to pay the expenses of the joint business and not for any other purpose.  Admittedly, the plaintiff knew that some of the payments were made "in cash", by way of cashing the checks, but I accept his explanation that he agreed to this in light of Rami's representations that there are employees who receive wages only in this way (see his testimony at p.  348, paras.  12-17).
85. As I will elaborate below, I am not at all convinced that the plaintiff gave his consent in advance that the checks that were given, or the cash given in connection with their liquidation, would be used by the defendants not for the purposes of the joint business, all while the activity was carried out solely from his accounts. Such a possibility is manifestly unreasonable and does not coincide with the sophistication that the defendants seek to relate to the plaintiff.  Against the background of my conclusions above, the grounds for fraud and theft must be examined.

Grounds for theft and fraud - were the conditions fulfilled in the case at hand?

65. Sections 52 and 55 of the Torts Ordinance instruct as follows:
66. Theft

Theft is when the defendant unlawfully transfers for his own use movables that the plaintiff has the right to possess, by the defendant taking them, detaining them, destroying them, giving them over to a third person, or otherwise depriving them of the plaintiff.