"In summary, the evidence shows that Rosenbaum and Samuel did indeed commit fraud by establishing Company B in order to avoid paying royalties to the state. Therefore, both the companies and Samuel and Rosenbaum, who served as officers of the companies, can be liable for the full financial liability imposed on them. It should be emphasized that imposing personal liability on officers does not mean lifting the corporate veil of the companies and therefore there is no need to look for a reason to do so by virtue of section 6 ofthe Companies Law, 5759-1999 (see: Civil Appeal 313/08 Nashashibi v. Rinrawi, IsrSC 66(1) 398 (2010); and regarding the imposition of personal liability on officers for acts of fraud: Civil Appeal 1569/93 Maya v. Penford (Israel) Ltd., IsrSC 48(5) 705, 743 (1994); Civil Appeal 407/89 Tzuk Or in Tax Appeal v. Car Security Ltd., IsrSC 48(5) 661 (1994)). Rather, the officer is liable for his own actions, and the companies are personally liable for the actions of the officers (see: Civil Appeal 324/82 Bnei Brak Municipality v. Rotbard, IsrSC 45(4) 102, 130 (1991)).
When the officer's liability rests on liability in torts due to a tort he committed, there is no need to lift the veil since the officer is personally liable for his actions (see, for example, Civil Appeal Authority 7875/06 Zeltz v. Hachsharat HaYishuv Insurance Company in a Tax Appeal (November 29, 2009); Civil Appeal 407/89 Tzuk Or in Tax Appeal v. Car Security Ltd., IsrSC 48(5) 661, 697 (1994); Civil Appeal 313/08 Nashashibi v. Rinrawi, IsrSC 66(1) 398 (2010); Civil Appeal 6507/11 Loki Construction Enterprises in Tax Appeal v. G. d. Eagle Services Company in a Tax Appeal [Nevo], March 11, 2014); Civil Appeal 9183/99 Fenigstein v. Makeover Members Company No. 1 (Quarries) Ltd., IsrSC 58(4) 693, 701 (2004); Civil Appeal 8133/03 Yitzhak v. Lotem Marketing Ltd., IsrSC 59(3) 66, 74-75 (2004))."
- It should be noted that in the framework of the case law, the opinion was also voiced according to which it is also possible to impose personal liability on organs by virtue of section 12 of the Torts Ordinance, which deals with wrongdoers jointly and states:
"For the purposes of this Ordinance, a person who participates, assists, advises or tempts himself to an act or omission that has been done or is about to be done by another person, or commands, permits or approves them, shall be liable for them.”)See the Nashashibi matter mentioned above). While it was determined that this section "expands the scope of those liable for torts". In this regard, it was determined that the provision that appears in section 12 is "a general provision. Therefore, it is applied to an organ and an officer in the company" (see: The Tzuk Or case, at p. 697). It was further held that within the framework of section 12 of the Torts Ordinance , organs or officers of a company can be regarded as aiding in the commission of a tort and therefore imposing personal liability on them in torts (see: Civil Appeal Authority 10700/05 M.D. Naor Building and Investments in Tax Appeal v. Niv [Nevo] (March 30, 2006), at section 4). With regard to the mental element that is required for the purpose of imposing liability under section 12 of the Torts Ordinance, it was held that the existence of a mental element of awareness must be shown (see: The Tzuk Or case, at p. 703), and in this context it was held that a person who takes part in an act that ultimately leads to damage will be liable as an accomplice to the tort act, if when he joined the perpetrator of the act he knew what he was going to be going towards (see: Civil Appeal 6871/99 Rinat v. Rom [Nevo] (April 21, 2002) at paragraph 9 of the judgment of Justice [as he was then called] A. Rivlin).
- From the above, it emerges that the options for charging the negotiators on behalf of the company - in the "Lifting the Curtain" track or in the "Personal Liability" track - are two parallel options that can be used in each of them. As will be detailed below, I am of the opinion that Shabbat can be held responsible in any of the tracks - that is, both by virtue of personal responsibility for his own activity and by virtue of lifting the veil. My reasons will be detailed below.
- I will begin by imposing personal responsibility on Shabbat for his activity.
In this regard, it appears from the evidence that at the basis of the fraudulent scheme towards the plaintiff is the concealment of the real party with which the plaintiff contracted - while the representation presented to the plaintiff is that she is in contact with an entity called OFM (in connection with which the plaintiff and its employees were even presented with many false representations). However, in practice, it became clear that this was an entity that was doubtful whether it was incorporated as a company; It has been proven that there is a connection between it and Global, Shabbat and BDB; and I believe that it was used in order to remove liability for damages to potential customers from Global and Shabbat, in such a way that those customers will have difficulty finding the real factor that stood in front of them in their engagement.