In this context, it is therefore difficult to say that membership in the association is done on a purely contractual basis. This was also determined in the judgment of the District Court in the case of Maccabi Ramat Gan:
"It seems that the Association's claim that its membership is 'voluntary' has some innocence; We are dealing with a de facto monopolistic body, whose membership is a condition for the ability of a professional soccer team to act as such. There is no competing league of equal status, and there are no other 'suppliers' to which a team, which has been refused by it, can turn to in order to receive the same service in the future [...]" (Maccabi Ramat Gan, at para. 40 of the judgment of Justice V. Alsheikh).
- The Association's publicity is also reflected in the fact that a significant part of its budget comes from public funds, whether from the allocations of government ministries or from the allocations of the Toto. As has already been ruled in the past, a private entity that is "nourished" by public support is not permitted to make its property as if it were a private entity for all intents and purposes (see, for example, The Matter of the Police Organization, in paragraph 7 of the judgment of Justice V. Alsheikh; Yes, R. Assaf Harel Dual Entities: Private Entities in Law Administrative 133-135 (2008)). This issue is also a relevant consideration for the purpose of classifying a body as a dual substance (see ibid., at pp. 161-166).
Moreover, the legislature has also regulated in the law certain aspects of the Association's activity. For example, the Sports Law imposes restrictions on the Association relating to medical examinations (Section 5 of the Sports Law); insurance (Section 7 of the Sports Law); the management and examination of books (Section 9 of the Sports Law); appropriate representation (Section 9A of the Sports Law), disclosure of information under the Freedom of Information Law, 5758-1998 (hereinafter: the "Freedom of Information Law") (Section 9B) to the Sports Law); the obligation to enact bylaws and regulate issues of discipline, internal judgment, transfer of athletes, and salaries and payments to various entities (section 10 of the Sports Law); and subjecting various appointments in the association to the conditions of eligibility set out in the law (sections 10a-10b of the Sports Law).
- Also The Non-Profit Organizations Law, which applies to all associations, including the Association, regulates certain aspects relating to the activity and conduct of an association that are not subject to its internal control (see, for example, Sections 9, 18, 19, 23 and29 to the Non-Profit Organizations Law). In the meantime, the law contains various provisions in relation to the association's institutions (see, for example, Sections 27, 30-31, 31A-31C, Section 4 to Chapter D of the Law), as well as additional provisions regarding the manner of its operation that cannot be stipulated. At the same time, the law also includes various dispositive provisions, which an association can stipulate in its bylaws (see, for example, Section 10 to the Non-Profit Organizations Law, which deals with registered articles of association and common bylaws, and Section 11 to the law dealing with changing the association's bylaws, name and goals).
In light of the combination described above of public and private characteristics, and as was also determined in the Giladi case, the association is a dual entity. As such, it is subject to at least the basic norms of public law (see High Court of Justice 731/86 Micro Daf v. Israel Electric Corporation Ltd., IsrSC 41(2) 449 (1987); Civil Appeal 294/91 Chevrat Kadisha Gehasha Kehilat Yerushalayim v. Kestenbaum, IsrSC 46(2) 464 (1992); see also Dafna Barak-Erez, Administrative Law – Economic Administrative Law, vol. 3, 19, 449-507 (2013)).
The Supervision and Control Mechanisms Applicable to the Association
- As I have clarified, one of the main issues that must be examined with regard to the question of the possibility of filing a derivative claim on behalf of an association relates to the supervisory mechanisms that apply to it.
In general, one of the goals of the Associations Law is to create a mechanism for government supervision of what is done in the non-profit organizations and "in order to ensure that the public that contributes from its private money and government funds knows that these funds reach their destination" (see Amendment No. 3 to the Associations Law, S.H. 5756-1996 1588, p. 276 (hereinafter: "Amendment No. 3 to the Associations Law"), which referred to the enactment of the Associations Law).
- As an association, the Association's activities are supervised first and foremost by Registrar of Non-Profit Organizations. The main role of the Registrar is to ensure that a non-profit corporation is managed properly and in accordance with the provisions of the law. Among other things, he must supervise that the Association's assets and resources, including the public funds given to it, are used to promote its goals (and for these purposes only) and for the benefit of those who benefit from the promotion of these goals.
Thus, a condition for requesting support from a government ministry is the presentation of a certificate from the Registrar of Associations. The Registrar of Associations is supposed to examine, in accordance with the procedures and criteria formulated by him, whether the association meets all the requirements of the law, and whether its assets and income are used solely to promote its goals. Moreover, the legislature has also authorized the Registrar of Associations to conduct periodic inspections of non-profits, and for this purpose he is entitled to authorize supervisors from among his ministry's employees (section 39B of the Associations Law) and to be assisted by an external examiner (sections 39C-39E of the Associations Law).