...
- Return of the Theft
In a claim filed for theft, the court may, according to the circumstances, order the return of the theft, in addition to any other medication prescribed in this Ordinance or in lieu of such remedy.
- The tort of theft consists of a number of elements: unlawful transfer; for personal use; of movables, which the plaintiff has the right to possess (Civil Appeal 7225/19 Estate of the late Haj Ahmed v. Estate of the late Haj Ahmed, paras. 54-55 of the judgment of Judge (as he was then called) Amit (Nevo 26.6.2022); Civil Appeal 8232/09 Polaron System Israel in Tax Appeal v. Mishkan Properties Brokerage Ltd., para. 19 of the judgment of Judge (as she was then declared) Hayut (Nevo, January 28, 2014)).
- Section 2 of the Torts Ordinance defines the term "movables" in the Ordinance as "inanimate or animal, including money, fruit of trees and vines, grains, vegetables and other crops, and water, whether in a slip or in a connection." Hence, Israel's checks and funds are movable for the purposes of the tort of theft. There is also no dispute that the checks were drawn from the accounts registered in the plaintiff's name, so that he has the right to hold them. The central questions are whether the transfer was carried out illegally (i.e., whether Rami and Ofer exceeded Israel's authorizations) and whether these funds were used for their own use. I will discuss them in their order.
- I found that Rami and Ofer exceeded Israel's permissions regarding the use of the checks he deposited in their hands, for the benefit of their own enrichment. Israel allowed the two to use the checks for the benefit of the business and for its operation, and I found no evidence that he allowed them to use it for their personal expenses. Similar things arose from Ofer's interrogation and affidavit, who himself noted that, at least in advance, Israel permitted the use of these funds solely for the benefit of the joint business (and this is regardless of whether he received other explanations in retrospect - which I will discuss later). See Ofer's testimony at p. 834, paras. 11-28 of the transcript:
- Did Israel leave you the checks so that you could use them to make other payments that are not related to the business, or only for the needs of the business?
- Israel left these checks at the station and paid all kinds of supplies from which they had to buy goods and they had to pay a check and it was impossible to pay it on a regular basis 30 or 90...
- For other purposes, other things that are not related to the suppliers of the business or the employees of the business, did he tell you that you have permission or permission to draw up these checks, to use these checks?
- You're trying to bring it to the place, he knew about every check that came out, everything was recorded in an Excel report and every day he would go through it (...) and even when I would leave in the evening he would know about every check that came out, everything was recorded in an Excel report and every day he would go over it.
Similar things also arise from Ofer's affidavit (para. 33), in which he stated that he had assisted in "writing checks for suppliers," and that "the plaintiff decided to entrust me with signed checks in order to save himself unnecessary trouble, which is reflected in daily signatures on checks for the purpose of paying the invoices and expenses of the business."
- The defendants argued in their summaries that there is a presumption that the person who issued a note that was missing material details allowed the holder to fill in the details, and that this presumption would be contradicted only if the ransom proved in granting the authorization that the details were not filled in in accordance with his request. I agree with the statement in principle, but in my opinion, the plaintiff met the threshold required in the civil proceeding to prove that the details were not filled in in accordance with his authorization.
- Indeed, the main defense argument, which is also presented in the plaintiffs' summaries, is that the plaintiff signed the checks himself and did not limit them "to the beneficiary only", and also that it is illogical that he did not supervise them (paragraphs 68-72 of the defendants' summaries). I cannot accept the first argument: the mere fact that the plaintiff did not restrict the checks more closely does not lead to the conclusion that he intended to allow the defendants a free hand, and certainly not to allow payments that are not supposed to support the joint business.
- The second argument, according to which it is difficult to believe that the plaintiff did not supervise hundreds of checks that came out of his pocket for many months, indeed raises difficulties and questions. This cannot be denied, and this was also evident from the questions addressed to the prosecutor during his interrogation, inter alia by the court. The plaintiff insisted that he was a simple person who had blindly trusted the defendants, and that mere innocence explained his lack of action on the matter (paragraph 2 of his summaries). See also pp. 338-340, and in particular p. 340, paras. 9-14:
"At the height of my innocence and at the height of my stupidity, I didn't check and trust them, and then in retrospect I realized that this was the mistake I had made. And I trusted them very much (...) I let a person into my house, both to eat and sleep, and when I went to sleep he stole my house, he stole everything that was in the house. I put full trust in this person and this is the result, it is exactly the same result."
- The plaintiff also insisted that he did not understand the meaning of the term "bankrupt", that he did not know how to "ask the right questions" and that he did not understand that the bankrupt's funds would eventually leave his business, insofar as they entered into the partnership (p. 341, paras. 1-30, and in particular Q. 15). As I also commented in real time, this thesis is not without probleMs. It is clear that there is no need to be a lawyer or a lawyer in order to understand that an insolvent person has debts, and that an engagement with him carries risks.
- However, from here to the conclusion that each expense was authorized and with the plaintiff's knowledge - there is a long way to go. In the Buchnik opinion, it was determined that the financial deficit arising from the withdrawal of funds from the business amounted to approximately ILS 2.6 million, of which there were no invoices or references to the withdrawals of Rami, Ofer, Charlie and other checks that were registered in favor of laundry workers (whose salary, as may be recalled, the defendants were supposed to pay). These sums amount to hundreds of thousands of shekels. Some of these workers later approached Israel, claiming that they did not receive the money promised to them, and one even filed a lawsuit on the matter and settlement agreements were signed (see paragraphs 121.4-121.3 of the plaintiff's summaries).
- I therefore do not accept the defendants' argument "on the only question that requires a decision", according to their definition (see paragraph 26 above) and their position that the actions carried out in the joint business were done with the knowledge and opinion of the plaintiff. Beyond the fact that this position is contrary to all business logic, as I have detailed above, then it is inconceivable that the plaintiff gave permission to withdraw funds from his account and take them not for the purposes of the business. In this regard, I refer 80 to the Buchnik opinion, in which the following was determined:
"An analysis of the checks that were withdrawn from Mor Marketing's bank accounts during the relevant period, the copies of the checks (inside and back) that were included in the plaintiff's exhibits, and information that I located on the Internet, shows that 461 checks in the amount of ILS 5,284,846 were drawn in favor of various entities, including currency service providers ('NPMs'), the defendants themselves, minority employees of the business, and companies that are ostensibly not among the suppliers of the business."