Civil Case (Tel Aviv) 46886-06-22 Netra Economic Consulting Ltd. v. Strix Drones Ltd. - part 3

Moreover, the plaintiff's own evidence makes it difficult to accept the alleged thesis.  First, Amit's message to Zohar was at 10:37 a.m.  and it was sent in response to a request initiated by Zohar to clarify Unicorn's position at 9:52 a.m.  that day (p.  113 of the plaintiffs' evidence).  In other words, the response that Unicorn is not interested in investing is given within a short time (less than an hour) and before that Zohar is an entrepreneur and not a colleague.  This conduct in itself raises a difficulty in the thesis claimed.  Second, in Netra's demand letter dated August 3, 2021 (p.  129 of the plaintiff's exhibits), the plaintiff admits that Amit rejected the possibility of investing in the company as early as October 20, 2020 (shortly after the introductory request dated October 19, 2020, and about 20 days prior to the aforementioned written response); a significant period of time prior to the acquaintance between Niv and Shuki, which according to the written documentation was on November 9, 2020.  I will note, in this context, that in the letter of demand, Netra also writes that Amit refused to hold a meeting in which Zohar suggested that Niv make a presentation about the company.  Zohar refrained from referring to these facts in his affidavit, but as stated, this was written in the plaintiff's letter of demand (in paragraph 5.5), and in the absence of reference to this in the affidavit, considerable weight should be given to this correspondence from real time, which serves the plaintiff's thesis obligation.  I note that there is no reason to give weight in this context to Zohar's testimony in the cross-examination, which took place between him and Amit on October 28, 2020 (pp.  12, 15 of the transcript), when Zohar gave this information for the first time in the cross-examination without mentioning it in the affidavit, and when this information was allegedly hidden from the contents of the demand letter of August 3, 2021.  The letter that Netra sent in real time therefore strengthens the reliability of Amit and Shuki's version regarding the sequence of events that led to the investment, including the coincidence between the timing of Amit's last response to Zohar close to the date on which the process that led to the transaction initiated by Shuki began.

34. The plaintiff's arguments in the summaries regarding the correspondence from November 15, 2020 in the correspondence thread (she was given an explanation that was not contradicted in Niv's testimony that it was a mistake) and the questions raised in the plaintiff's summaries regarding the various answers of Amit and Shuki in the cross-examination are not sufficient to raise the burden of contradicting their version, which is backed up by many correspondence from real time (Exhibits 1, 2, 3, 4, 8, 9, 11, 12 to the defendant's exhibits).
35. The plaintiff also cannot build on the fact that significant witnesses - Weintraub and especially Amit - were not summoned to testify on behalf of the defendant, in the circumstances of the case. Although it seems more natural that the defendant would have summoned Weintraub and Amit to testify in view of the connection with them and the investment in the company, these are not witnesses under her natural control, and the defendant's claim of unpleasantness that would have resulted from their summoning to testify as far as she is concerned for the purpose of dealing with the plaintiff's fee claim is not unacceptable.  The plaintiff, for her part, claimed in her summaries that she did not summon Amit to testify because she believed that his testimony was expected to be biasedin favor of the defendant due to his interest in the company.  It is doubtful whether this is a convincing reason, and it could have been summoned and petitioned to be cross-examined.  In any event, even if it was possible to accept the plaintiff's argument that these are witnesses under the defendant's control, this would not change the conclusion that the thesis in her mouth cannot be accepted.  This is in the absence of contradictory evidence on the part of the plaintiff; and in view of the many correspondence that have been attached from time to time that support Niv and Shuki's version as aforesaid.
36. The plaintiff was therefore unable to lift the burden of contradicting the version of Niv and Shuki and to lead to a preference for the thesis that was claimed in her summaries based solely on circumstantial evidence, the strength of which is very limited, as aforesaid.
37. I will note, in this context, that certain aspects of Niv and Shuki's testimonies raised difficulties. Shuki, as appears from his affidavit, is a man with extensive experience in the capital market who has held and still holds very senior positions (paragraph 2 of the affidavit).  Shuki's answers regarding his own fee agreement were evasive and raised difficulties.  Niv, as it appears from his affidavit and the materials in the file, is also a talented person and a serious businessman.  His testimony regarding the fact that he did not approve of Netra contacting Unicorn caused discomfort and was difficult to accept, as stated.  These difficulties, however, do not establish a general finding regarding the unreliability of Niv and Shuki's version in a manner that can substantiate the plaintiff's alleged thesis, which was not even explicitly presented to Niv and Shuki in the cross-examination, as was rightly claimed in the defendant's summaries, and taking into account the totality of the evidence.

Interim Summary: The main factual findings on the basis of which the claim should be examined

38. Therefore, the plaintiff's entitlement to fees for the transaction with Unicorn should be examined according to the following factual basis:
    • The company approved Unicorn as an investor in September 2020.
    • Zohar's referral to Weintraub and Amit regarding a possible unicorn investment in the company did not yield an investment. The plaintiff's action was to contact and transfer information to Weintraub, who passed the information to Amit, and later Weintraub connected Zohar directly with Amit, who informed Zohar within a very short time that Unicorn was not interested in the investment.

I will note, in this context, that although there is no direct evidence to this effect, the circumstantial evidence (Appendices 24-25 to the plaintiff's evidence) is sufficient to establish a factual finding, on the balance of probabilities in a civil trial, that information that Zohar passed on to Weintraub passed through him to Amit and did not reach Amit in any other way.  This is a logical conclusion and is reinforced by the lack of evidence on the part of the plaintiff that she approved the transfer of materials to Amit through other parties as well, and in light of Niv's testimony in the cross-examination regarding the importance of authorizing the transfer of materials as a condition for their transfer.

• It was Shuki's work that led to Unicorn's investment in the company together with a group of investors.
• The plaintiff's claim that the rejection of the investment by Amit in the response he gave to Zohar was in order to exclude the plaintiff as a mediator should be rejected.

39. Based on these factual findings, the plaintiff's entitlement to legal fees should be examined.

Third Company: The answer to the question of whether a causal connection between the plaintiff's actions and the investment is in the affirmative

40. The main dispute that arose between the parties is whether the agreement requires a causal connection between Netra's actions and the investment in the company as a condition for entitlement to legal fees, and if so, what is the nature of the necessary causal connection.
41. The plaintiff's position is that according to the agreement, it is sufficient that the company approved the investor and that the consultant referred the investor to it and thus created acquaintance (and according to the plaintiff, a written reference is sufficient). On the other hand, the defendant's position in essence is that a causal connection is required of a significant contribution of the investment advisor's actions in the company, and that a reference is not sufficient.

Rejection of the plaintiff's position that the use of the term "following " in the agreement means "after" (as a reflection of the order of actions)

42. According to the plaintiff, the use of the word "following the agreement" means "after". In other words, according to the agreement, the intention in the agreement is that any investment that comes after the advisor is referred to an approved investor will entitle it to legal fees, and there is no need for any connection between its actions and the investment of that actual investor.  This position is intended to provide a response to the defendant's claim that a causal connection is required.
43. I do not believe that it is possible to accept the plaintiff's linguistic position regarding the meaning of the word "in the footsteps". One of the meanings of the word "in the way" according to the dictionaries "Avnion" and "Milog" (the free Hebrew dictionary on the Internet) is "as a result of" according to Avnion; And according to the Hebrew Academy's website, the word "in the aftermath" is "a preposition to indicate cause, effect of".  This is also the interpretation that is predicted to be natural to the reader of the text in our case.
44. Although the various dictionaries recognize the possibility that the word "Akevot" will be given the meaning of "other or after" (according to "Avnion") and "after" (according to the website of the Hebrew Academy), as the plaintiff claims, the attempt to apply such a linguistic meaning in the context at hand and in the sense that the plaintiff seeks to apply - of a purely chronological order of actions - cannot stand. In Milog, the reference in this context is to the interpretation "after someone or something" or "in the way of, in a way that continues," and the contexts cited as examples are "the police conducted a prolonged chase after the suspect" and "the son followed his father." In "Avnion", the meaning of "after" is explained by the word "in someone 's footstep".  The Hebrew Language Academy's website provides the following examples to illustrate the use of the word "in the after" in the sense of "after": "More companies raised prices in their wake"; "He chose the profession following his parents"; "His translation follows in the footsteps of the previous translators"; "Following the midrash, Rashi interprets the verse as follows."
45. In none of the dictionaries was the word "after" given the meaning of "after" in the sense of a mere order of actions in time; the meaning that the plaintiff wishes to call the wording of the agreement. Indeed, in a simple, intuitive and natural reading of the text, the obvious meaning of the word "after" in the agreement usedis of cause and effect, while attributing the meaning of "after" to the word "in the after" does not fit the context, and at the very least is predicted to be forced.  This is also the case according to the testimony of Zohar himself, who in fact confirmed in the cross-examination that the idea that the word "in the trace" might mean "after" was born only after a pre-trial hearing in which the difficulty in the plaintiff's position in this context was discussed (p.  9 of the transcript, paras.  30-38).
46. The conclusion is, therefore, that the word "following " in the agreement is presumed to be in the sense of "cause and effect" reflecting a causal relationship. As can be seen from a perusal of the provisions of the agreement (cited above), the plaintiff's entitlement to fees under clause 3 of the agreement is in the case of "a capital raising or transaction: an amount in cash equal to 5% of the amount of the raising/transaction...".  A "transaction" is defined in section 2 and also includes "raising capital...  or any other transaction between the company and an investor/business partner." The definition of "investor/business partner" refers to an investment or transaction "following the advisor's referral during the engagement period or during the additional period, as stated in section 3 below [my emphasis - L.  C]".  Hence, according to the provision of clause 3 of the agreement, which refers to the definition of a "transaction", which refers to the definition of "investor/business partner", a causal connection is required, according to the language of the agreement, between the consultant's referral and the transaction as a condition for the plaintiff's entitlement to legal fees.

The exclusivity clause and the requirement of causal connection do not allow for the conclusion of a common subjective intention.

47. The agreement, however, also stipulates in clause 3 dealing with fees that its provisions will also apply in the case of a transaction with "an investor/partner that was first executed at the end of twenty-four (24) months after the end of the engagement period... [defined in section 1 for 12 months - L.C.]." The plaintiff refers to this period as the "tail period".  Clause 8 of the agreement adds that "the advisor has exclusivity with respect to each investor"; and clause 9 of the agreement further states that each of the parties may bring about the termination of the agreement with a notice that will not detract from the company's obligation to pay Netra.
48. The question that arises is what is the significance of the exclusivity set forth in clause 8 of the agreement with respect to an investor approved by the plaintiff and how, if at all, is it consistent with the requirement of causal connection set forth in clause 3 of the agreement? Insofar as the understanding of the exclusivity clause is that if a transaction was entered into during the engagement period or during the tail period, the plaintiff is entitled to remuneration in any event, as it claims, this prima facie contradicts the requirement of the causal connection vis-à-vis that investor under clause 3 of the agreement.
49. I have not found in the positions and evidence of the parties an explanation that provides a convincing answer to the apparent difficulty in reconciling the requirement of a causal connection with respect to a particular investor under the agreement and the exclusivity clause in relation to that investor under the agreement.
50. According to the plaintiff, as Zohar also testified, the exclusivity clause reflects an agreement that she is entitled to fees for any transaction of the company with an investor that the company approved for a period of 3 years. The exclusivity is allegedly intended to prevent disputes over fees.  According to this argument, the defendant is not prevented from entering into a transaction without the assistance of the plaintiff, but if it does so, it will be obligated to pay legal fees in any case.  The plaintiff also seeks to support this argument with regard to the reporting obligation imposed on the company under clause 3 of the agreement for a period of 24 months after the engagement period (which she calls the "tail period"), which according to the plaintiff indicates that she is entitled to legal fees even if the transaction is made at a late stage - after the engagement between the parties has ended (paragraphs 7-9 of the affidavit).
51. In Niv's affidavit there is no reference to the meaning of the exclusivity clause and to the question of how it is consistent with his understanding that a condition for the plaintiff's entitlement to fees is that the investment is following the plaintiff's referral (as a demand of cause and effect). In this context, I will note that both in Zohar's affidavit and in Niv's affidavit, there is no indication that they discussed the question that is the subject of the dispute prior to the signing of the agreement; Nor were any drafts that were replaced.  With regard to the exchange prior to the agreement, Niv testified in the cross-examination that was spoken by telephone that "to bring this investor to carry out actions, and to examine him and to agree on him" (pp.  32, 34-38) and that Zohar explained that he was required to "act, and bring, and take care of, and sit with you, and present and bring demonstrations..." (p.  37 of the transcript, paras.  12-16).  This understanding is supported by the provisions of clause 1 of the agreement regarding Netra's obligations to promote a transaction and assist in the negotiations.  Niv also testified orally that Netra does not have exclusivity in bringing in investors (p.  35 of the minutes).  He did not, however, provide a real answer that reconciles the apparent difficulty between exclusivity with respect to a particular investor under clause 8 of the agreement and the requirement of a causal connection.  Niv testified that he was not sure that he noticed this matter in real time (p.  37 of the transcript) and in view of the cumbersome wording of the agreement, even though it is only a short document of two pages, it cannot be said that his testimony on this matter is illogical, given that the parties did not negotiate the agreement with the help of lawyers.  Later in the interrogation, Niv referred to the significance of the long entitlement period of 24 months after the 12 months of the engagement, and testified that in his understanding, if Netra had made a connection and left the picture at the company's request, then she would have been entitled to legal fees (pp.  38-39 of the transcript).
52. In the defendant's summaries, counsel sought to point out that the exclusivity clause on which the plaintiff relies is "circular" in the sense that exclusivity applies to "any investor" and the definition of "investor" includes the requirement that the transaction is "following the advisor's referral". It was further argued in the defendant's summaries (without anchoring in Niv's testimony) that the exclusivity clause refers to a case where there was one investment following the plaintiff's referral during the period of the agreement (one year) - then the plaintiff is entitled to remuneration for additional investments (in the additional period - two years later).  The defendant further argued in its summaries that the plaintiff's interpretation of exclusivity is illogical in the sense that it is not possible for the plaintiff to be granted exclusivity, on the one hand, and on the other hand, she will be entitled to wages while sufficing with a reference after which she will adopt a "sit and do not do" approach.  There is no logic, it is argued, in granting exclusivity to someone who is not obligated to promote a deal.
53. I do not believe that it is possible to accept the position of any of the parties as providing a satisfactory solution that reconciles the exclusivity clause with respect to a particular investor and the requirement of a causal connection with respect to that investor. On the one hand, it is not possible to accept the plaintiff's position that only a referral is required, after which any transaction with the investor will be remunerated.  This position is inconsistent with the use of the term "in effect", which reflects a connection of cause and effect, as stated, and this is further strengthened when the exclusivity clause itself is "circular", as the defendant claims, in the sense that it itself uses the term "investor" and therefore contains the requirement of a causal connection.  I will note that the "tail clause" and the duty to report are not persuasive as to necessarily justify the defendant's position because they may be relevant where negotiations began following the referral of the consultant who did not formulate an agreement during the engagement period, but after a long period of time ("the tail period").  On the other hand, the defendant's position in its summaries also limits the applicability of the exclusivity clause, which is not anchored in the evidentiary material as Niv's understanding of the agreement in real time, nor does it raise a difficulty in the language of the agreement.
54. My conclusion, therefore, is that it is not possible to determine, in the circumstances of the case, a joint subjective intentions of the parties regarding the question of the plaintiff's entitlement to fees where an approved investor entered into a transaction with the company without a causal connection to the plaintiff's action.
55. In the margins, I will note that I am aware of the provisions relating to a brokerage agreement that includes exclusivity under the Real Estate Brokers Law, 5756-1996 (hereinafter - the "Realtors Law"), as well as the reference in the Supreme Court's rulings to the meaning of exclusivity with regard to the requirement that the realtor be the effective factor as a condition for eligibility for wages, and in a manner that there is no contradiction between this requirement and the exclusivity granted to the realtor (see Civil Appeal 4036/16 Barel Properties Group in Tax Appeal v. Ofir Binyamin [Nevo] (July 20, 2016) (hereinafter - the "Barel case")).  It seems to me that there is a difficulty in deriving equally from these provisions and the case law that interpreted them for our purposes.  This is both because the Realtors Law is a cogent law that does not apply in the circumstances of the case and embodies consumer purposes, as was ruled in the Barel case, and because in the Realtors Law we are talking about general exclusivity for the realtor in a particular property, whereas in this case exclusivity was defined with respect to a specific client and not the general exclusivity to which the Realtors Law relates.

The positive law leads to a preference for the defendant's position that a causal connection is required

56. The ambiguity arising from the requirement of a causal connection with respect to a particular investor, on the one hand, and the exclusivity clause with respect to that investor, on the other hand, negates, as stated, an interpretive conclusion regarding the common subjective intentions of the parties in the question in dispute. The rules of interpretation lead, however, to the preference of the defendant's position that a causal connection is required between the plaintiff's referral and the engagement in the transaction.
57. First, it is necessary to examine whether the position of one of the parties is preferable according to the objective purpose of the agreement. The objective purpose of a contract is based on "the values, objectives and interests that a contract of the type or type of contract entered into is intended to fulfill [...].  The exam is objective.  The question is not what the parties intended for the specific contract; The question is what is the 'intention' of reasonable parties.  This purpose is determined by taking into account the nature of the contract and its type, taking into account the values (such as - justice, reasonableness, equality) of our legal system.  Within the scope of the objective purpose, we proceed from the assumption that a presumption (praesumptio juris) is - a rebuttable presumption - that the parties seek to realize a purpose that is just, efficient, reasonable and reasonable" (Civil Appeal 4869/96 ML inTax Appeal v.  The Harper Group, Opinion of Justice A.  Barak [Nevo] (April 9, 1998)).
58. The plaintiff argued in the supplementary argument that the nature of the agreement between the parties, according to which the remuneration is only for a result, leads to the fact that her interpretive position should be preferred. This is not a convincing argument.  Business-commercial logic may also support the position that the agreement is conditional on the outcome only, taking into account the amount of fees at the rate of 5% of the investment.  Therefore, the plaintiff's argument cannot be accepted as tipping the scales to the conclusion that her position is superior to considerations of business-economic logic.  In this context, I will note that a serious evidentiary basis regarding the practice regarding investment brokerage agreements in start-up companies has not been laid, in the absence of an expert opinion regarding what is customary regarding investment brokerage in these contexts.  An individual agreement of Shuki that was presented that was drafted after Zohar's general testimony - which should be treated as the sole testimony of a litigant - that this is a "Stantz" agreement that circulates in the capital market also do not establish an evidentiary basis regarding what is customary.
59. In the absence of priority for the plaintiff's position in examining the objective purpose, the dispository law should be resorted to, whether as one that reflects the presumed intentions of the fair and reasonable parties, or as a supplementary provision to a contract that is lacking (see, Civil Appeal Authority 6388/19 Phoenix Insurance Company in Tax Appeal v. Ron Hoffman, paragraph 93 of the opinion of Justice A.  Grosskopf [Nevo] (June 22, 2023) and the references therein; Gavriel Shalev and Effi Zemach Contract Law 12 (2019); Civil Appeal 3190/99 Shuker v.  R.M.  Ra'anana for Construction and Rental Ltd., IsrSC 55(3) 127, 140 (2000)), whether by analogy.
60. In accordance with the case law - even before the Real Estate Brokers Law was enacted, 5756-1996 - where there is a brokerage agreement but the details of which have not been agreed upon, the rules set forth in the case law will apply as a condition for the payment of brokerage fees, one of which is that the realtor was the "effective factor" that led to the engagement in the transaction (see, Civil Appeal 2144/91 Moskowitz v. Esther Yad, as Executor of the Estate of the late Tuvia Yad, IsrSC 48(3) 116, 122 (20.9.1994); The Barel case, at paragraph 19).  This rule was applied even when it came to a business brokerage that was not in real estate - even then, a condition for claiming brokerage fees, in the absence of any other agreement, is that the broker be the effective factor in entering into the transaction (see, Civil Appeal 2708/14 Israeli v.  Aharoni, para.  8 [Nevo] (December 6, 2015) (hereinafter - "Israeli Matter"); Civil Appeal 5876/06 Vertical Integration in Tax Appeal v.  Rada Electronics Industries Ltd., para.  17 [Nevo] (February 4, 2009)).  I will further note that according to case law, the requirement that the mediator be the effective factor is more stringent than the requirement for a causal connection (see, Israeli case, at paragraph 8).  This ruling expresses the positive law.
61. The dispositive law, therefore, supports the defendant's position that a causal connection is required; a requirement that is more lenient than the requirement of the effective factor that was determined in case law and in the Real Estate Brokers Law. This is in view of the lack of clarity in the wording of the agreement, and the absence of an evidentiary basis that leads to the preference of one of the parties' position in the perspective of the subjective intentions at the time of the conclusion of the agreement or the objective intentions, as well as the lack of proof of practice in the relevant market.

The rule of interpretation against the drafter also leads to a preference for the defendant's position that a causal connection is required

62. Even if I assume that the dispositive law does not lead to a preference for the defendant's position, the conclusion that the defendant's position that a causal connection is required should be preferred remains the same. This is in accordance with the rule according to which when it is not possible to trace the intentions of the parties, the interpretive rule regarding the interpretation of the agreement against the position of the party that had priority in shaping its terms (section 25(b1) ofthe Contracts (General Part) Law, 5733-1973)).  Regarding the rationale for the application of the interpretive rule, according to which ambiguity in the agreement should be attributed to the obligation of the party to the agreement, which had priority in shaping its terms, it is stated (Interpretation of the Contract, pp.  638-639):

In such a contract, it can be assumed, the controlling party took good care of its own interests.  There is no one like him who knows the uncertainty of the language, and it is presumed that he acted in the most vigorous manner to secure his rights.  It can also be assumed that the controlling shareholder used his full power to take for himself all the benefits and rights that he wanted at the time of entering into the contract.  In any event, he had the power to take those rights and benefits for himself if he so wished.  It is not appropriate to grant him benefits and additional rights in an interpretive manner.  Indeed, if the controlling shareholder foresaw the right or the benefit of which he now claims, why did he not make sure to make an explicit provision in this regard, since he had the power of control? Did he seek to conceal the matter from the other party, fearing that the latter would not enter into the contractual engagement? Did he wish to reserve the interpretive option for himself in the future?...  Moreover, the controlling shareholder is usually in the best position to know the uncertainty of the text and to take care of his own interests for the future.

63. The plaintiff was the one who designed the terms of the agreement, and of course she also had priority in designing the terms as the provider of the services, and accordingly - she is the one who must be familiar with the nuances related to entitlement to legal fees. The agreement could have been drafted clearly and simply written that any transaction with an investor that the defendant approved within a period of three years would be entitled to legal fees, subject to the sending of an inquiry or the transfer of materials.  However, this is not how the plaintiff drafted the agreement.  The plaintiff drafted a cumbersome and difficult toread andunderstand agreement that contains drafting difficulties, and at least a lack of clarity, on this matter, as aforesaid.  In the absence of a conclusion that priority should be given to its interpretation in light of a real-time understanding (which has not been proven as aforesaid) or other interpretive considerations, the lack of clarity in the wording should be attributed to its obligation, andaccordingly - to interpret the agreement against it in the sense that a condition for receiving fees is that the investment transaction was made "following the plaintiff's referral".  This is despite the difficulty in reconciling this position with the exclusivity clause, which was also vaguely worded (and its meaning was not clarified in the agreement) (compare, in the context of attorney-client fee agreements to Civil Appeal 9648/16 Orhitech GIS inTax Appeal v.  Avitan, para.  39 [Nevo] (February 28, 2018), Civil Appeal 9648/16 Meir Zeiger, Adv. v.  The Company for the Rehabilitation and Development of the Jewish Quarter in the Old City of Jerusalem Ltd., Paragraph 38 [Nevo] (November 3, 2021), Civil Appeal Authority 7394/07 Ghannam v.  Faour, paragraph E(4) (October 8, 2007); Civil Appeal Authority 3740/08 Grand House BTax Appeal v.  Feuchtwanger, para.  10 [Nevo] (September 15, 2008); and in the context of brokerage agreements, see Civil Case (Shalom K.S.) 2103/08 Menashe v.  Aharon, para.  19 [Nevo] (October 23, 2011), Civil Case in Fast Track Procedure (Shalom J.M.) 35756-10-13 Fadida v.  Zechariah [Nevo] (November 23, 2014)).

Conclusion: The plaintiff is not entitled to fees for the transaction with Unicorn according to the provisions of the agreement

64. The terminology "following the counsel's referral" implies, as stated, in the circumstances of the case, a cause-and-effect connection. The plaintiff's position that it is sufficient that she forwarded to the unicorn fund through Amit is inconsistent with the necessary causal connection.
65. The evidence shows, as stated, in the balance of probabilities in a civil trial, that there is no connection between the plaintiff's application to Unicorn and the investment that was ultimately made. Unicorn rejected the plaintiff's application of October 19, 2021 the next day, as appears from the plaintiff's letter of demand (Exhibit 32 of the plaintiff's evidence).  Zohar's response to another inquiry was also answered in less than an hour - that Unicorn had no interest in investing in the company (Exhibit 27 of the plaintiff's evidence).  As stated, it is possible to accept the plaintiff's position that the company's materials were transferred to Unicorn through Weintraub, but this does not change the conclusion that the investment did not follow the plaintiff's request - even if only slightly.  The documentation in the case shows that Amit, the manager of Unicorn, even refused tohold a meeting with thedefendant to examine an investment after receivingand receiving the plaintiff's application and materials that she transferred.  No move was initiated - not exploring, certainly not negotiations - that could have led to the investment following the plaintiff's request.  The door was closed to the plaintiff and she accepted it and did not continue her efforts to persuade her.  The dynamic that led to Unicorn's investment in the defendant, as appears from the evidence material, had no connection whatsoever to the plaintiff's actions and stemmed from the sequence of events as described in the affidavits of Niv and Shuki and backed up by many correspondence from real time.  Shuki was the one who set the move in motion and led the formulation of the deal, when the deal that was ultimately made was not only a unicorn deal but a group of investors; Those who were also referred to as a "group of friends" (paragraph 15 of Shuki's affidavit; p.  118 of the plaintiff's evidence).  In this sense, too, there is no connection between the plaintiff and the transaction that was formulated in the format of a group of investors, and not only with a unicorn; A transaction that there is no evidence that the plaintiff could have helped formulate.
66. The conclusion is, accordingly, that the transaction was not made following the "plaintiff's referral", and accordingly - the plaintiff is not entitled to legal fees under the provisions of the agreement between the parties.

Fourth Company: The Defendant Breached the Duty to Report, but This Violation Shall Not Lead to Financial Relief

67. There is no dispute that the defendant reported the transaction to the plaintiff only after it was formulated, as emerged from Niv's testimony. The plaintiff claimed that the defendant breached the reporting obligation set forth in clause 3 of the agreement in the sense that in real time it did not update the plaintiff regarding the contacts and negotiations with Unicorn.  The defendant, for its part, argued in the supplementary argument that there was no duty to report because the duty to report only applies to "entities or persons related to the raising of capital or debt referred by the consultant." According to the defendant, Unicorn was not referred by the plaintiff; Her application was refused and the defendant did not know at all about those requests made by the plaintiff to Unicorn.  It was also argued that the plaintiff cannot be expected to report given that the obligation to report is intended to apply where negotiations are taking place that are taking place following the mediation, and this is not the situation here.
68. In the circumstances of the case, it is not necessary to decide the question of whether the defendant breached the duty to report, because there is a real argument that even if a duty to report was breached, this breach does not lead to the granting of relief to the plaintiff, in the circumstances of the case.
69. A review of extensive court rulings shows that when a client violates the duty to report to the realtor in order to bypass the broker and prevent him from paying brokerage fees, the broker may be entitled to brokerage fees even if it is found that he was not the effective factor in the engagement in the transaction. This was the case, for example, in other municipal applications 5786/15 Azorim Development and Building Investment Company in Tax Appeal v.  Hassan [Nevo] (September 3, 2017).  In that case, it was determined as a finding that the defendant prevented the realtor from serving as a mediator in the transaction after he brought the parties together, and later in that meeting, he acted proactively in appeals to both parties in order to promote a transaction, but the defendant excluded him from the developments in the negotiations in bad faith in order to distance him from the negotiations and in order to avoid paying legal fees.
70. Our matter is very different, as I said. The evidence indicates that the plaintiff's appeals to Unicorn did not even "open the door" to any discourse.  They did not initiate an initial meeting or interest that led to the beginning of probing for a deal.  The plaintiff's requests led to a dead end, and the plaintiff, for her part, accepted this, as stated, and shortly afterwards abandoned the direction of investing in a unicorn fund company.  Nor is there an indication in the evidence material, as stated, that the dynamics that led to Unicorn's investment were intended to circumvent the plaintiff as an intermediary.  It is therefore not possible to say that in the circumstances of the case, the defendant or anyone acting on his behalf acted in bad faith in order to prevent the plaintiff from being entitled to legal fees.
71. I will add further that there is substance to the defendant's argument that even assuming that the duty to report was breached in the circumstances of the case, this does not grant financial relief to the plaintiff on the grounds that she did not suffer any damage as a result of the breach. This is in the absence of any indication that the plaintiff led or could have led to the initiation of a process that would lead to the transaction with Unicorn as it was formulated; A transaction that, according to the evidentiary material, was created, as a result of the actions of Shuki and the formation of the investor group, and where the plaintiff herself abandoned this channel after the negative response she received from Unicorn in September and October 2020, and did not even inform the defendant about it.  The plaintiff's argument in the supplementary argument that if the duty to report had been fulfilled, it would have enabled her to "be involved and carry out all the necessary actions" is therefore a general argument and the evidence lacks any anchoring of any possible benefit in such involvement of the plaintiff.
72. Even this line of argument of a breach of the duty to report does not lead to the acceptance of the claim; Not even in part.

A note before finishing

73. I will note, prior to the signing of the judgment, that if a direct connection had been created between Unicorn and the company as a result of the plaintiff's referral (such as a business meeting; the beginning of probing or negotiations), it might have changed the conclusions of the judgment. It is possible that such an action would have been sufficient to satisfy the requirement of causal connection under the agreement, and at the very least, it is possible that in such circumstances there would have been room to attribute the presumption of evidentiary damage against the defendant or to bring to the conclusion that the duty to report was breached in a manner that prevented the necessary causal connection.  Since this is not the case according to the existing evidence and the conclusion, on the balance of probabilities in a civil trial, is that the defendant did not have an "arm and a foot" in initiating the transaction, as the defendant rightly claimed, as well as the absence of an indication that the plaintiff could have contributed something to the formulation of the transaction, there is no need to address all of this.

Conclusion

74. Therefore, the claim is dismissed. The plaintiff will bear the defendant's expenses and attorney's fees in the total amount of ILS 25,000 .  In determining the expenses and fees, I gave my opinion to the amount of the claim; the number of meetings held; The scope of the material in the case is not large, and the fact that the factual clarification in the case was simple and the legal questions were focused.  Given that the defendant is a company and in the absence of an indication that it does not deduct input tax - I did not take VAT into account.

The right to appeal by law.