Caselaw

Civil Case (Tel Aviv) 32654-12-19 A. Danan Fire Fighting Systems Ltd. v. Lahavot Manufacturing and Protection (1995) Ltd. - part 20

January 18, 2018
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Loss of profits: general and the relevant period

  1. In the statement of claim טענה This is for loss of income and loss of gross profit, and in this regard it demanded the sum of ILS 2,668,126.
  2. The amount of the claim (paragraph 34.2 of the statement of claim) is a combination of the alleged loss of gross profit in the field of hoods (installation and service) - ILS 671,268 (clauses 33.2-33.1 of the statement of claim; the amount of revenue claimed to have been withheld in this regard: ILS 2,685,101), and the alleged loss of gross profit in the field of buses (installations, starting, granting of annual approvals and repair of ongoing malfunctions) - ILS 1,996,858 (paragraphs 33.4-33.3 of the statement of claim; the amount of income claimed to have been withheld in this regard: 2,863,200 ₪).
  3. At the summary stage, the claim and demand for the loss of gross profit in the field of hoods remained as ILS 671,268. This is not the case in the field of buses.  The claim of loss of gross profit in the bus sector, which referred in the statement of claim to ILS 1,996,858, stands at the summary stage at ILS 6,761,856 (paragraphs 53.3-53.2 of the summaries).  The total amount of the claim has not changed.

Danan writes that in contrast to the amount stated in the statement of claim regarding hoods, which was based on real data provided by Flames, the amounts stated regarding the bus sector were based on data from the Central Bureau of Statistics (CBS), and it turned out that this was an underestimation compared to the real data.  According to the testimonies that were heard, the data of the buses were also transferred from Lehavot to Danan prior to the filing of the claim, but it did not use them for the purpose of calculating the remedy claimed, possibly due to the format in which they were transferred (pp.  342, para.  24 - pp.  343, para.  21).

  1. A demand for compensation for profits withheld is a demand for subsistence compensation, the customary compensation remedy for breach of an agreement, And it will be examined on its own merits.
  2. One of the aspects that must be examined regarding a requirement Such Compensation is the relevant period for calculation.

Danan's claims for compensation for loss of profits relate to the period known as "6/16" to "6/18".

  1. The beginning of this period (6/16) is apparently related to the contractual date intended for the transition to the second stage (12 months from the beginning of the agreement), i.e., approximately 28.6.2016 (paragraph 1 of the present summaries). See also a description of the agreements between the parties regarding the transfer of documents for a period beginning on June 28, 2016 (paragraph 31 of the statement of claim).

The end of the period that is the subject of the demands (6/18) is apparently related to the end of the agreement period (36 months), i.e., June 28, 2018 or thereabouts.

  1. The answer to the question of whether 6/16 is the appropriate date for the commencement of a claim for loss of profits depends on the discussion above and below.

Regarding the termination of the period: Above it was found that the notice of termination of the agreement was given by law and that the agreement was supposed to end on January 16, 2018.  Therefore, in any case, there is no relevance to the requirements relating to the period after this date.  Whether or not you say that the agreement was breached by Lehavot in the manner alleged by Danan, the maximum that can be required to put Danan in the position it would have been in had it not been for the breaches, is until the date intended for the termination of the agreement, January 2018.

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