In order for a litigant to succeed in the first stage of his claim for the provision of accounts, he must point to two points: the existence of a special relationship between him and the defendant, which justifies the payment of bills, and the fact that he ostensibly has the right to claim the funds for which he is suing for the payment of the accounts (Civil Appeal 5444/95 Bnei Motarnot HaGalil Association v. Archbishop Maximus Sloem, IsrSC 51(4) 811; 819 (1997); Civil Appeal 4724/90 A.S.T. Funds in Tax Appeal v. United Mizrahi Bank, IsrSC 46(3) 570, 584 (1992); Civil Appeal 4087/04 Moti Gora v. Bank Leumi Le-Israel in a Tax Appeal ([published in Nevo], given on September 8, 2005)).
As a rule, a plaintiff is not entitled to request an order to provide accounts in order to clarify how much the defendant owes him. A claim for the provision of accounts must be based on the existence of a special relationship between the plaintiff and the defendant that justifies the provision of accounts. Thus, for example, the right to receive accounts is sold when there is a relationship of agency, authorization, partnership or trust between the parties, but this list is not closed. (The Fruit Council, at p. 345; Uri Goren Issues in Civil Procedure 220 (Tenth Edition, 2010) (hereinafter: Goren)...".
- In our case, Draco did not meet any of the burdens imposed on her. It did not prove the existence of a special relationship that justifies the provision of accounts, and did not prove the right to claim the funds for which it is requesting the accounts.
No special relationship has been proven that justifies giving accounts
- The legal source for filing a claim for the payment of accounts was clarified after the establishment of the State, for the first time in a judgment given in 1951 in the Supreme Court in Other Municipal Applications 89/49 in the case of Miriam Popko v. Rachel Hamdi [Nevo] (hereinafter: the "Popko case"), where the court noted that such a claim has two sources. One source is criminal appeal of the law, and the second source is based on equity rights. According to the source of the rights in the law, the licensor can request accounts against his licensee, the sender against his agent and the partner against his partner, while on the basis of rights that are honest, the person who benefits from the trust assets can sue against the trustee. The difference between the two sources was with regard to statute of limitations and delay, whereas in the matter of a claim by virtue of the law, the rules of limitation applied, whereas a claim by virtue of rights in good faith did not apply to a statute of limitations, but rather the rules of delay applied, but with the enactment of the statute of limitations, there was a change in the law, and also a criminal appeal claim of rights that in good conduct can be rejected due to the statute of limitations, but this does not prejudice its rejection due to delay (Dr. Sussman, Civil Procedure, Seventh Edition, 567).
- In our case, there is no relevance to the question of limitation and delay, since it was not raised and in any case there was no room to raise any argument in this context, and the rule was brought for its main purpose, namely, the obligation that the plaintiff must present the legal source for which she is suing for the provision of accounts.
- Draco did not refer to the source of the right in detail. She claimed that she had a legal right to receive the accounts, but beyond the general argument she did not refer to the law from which this right derives, according to her.
- In its summaries, Draco raised a general argument that this is a special relationship - an "authorization" included in the list of proceedings in which the relief of providing accounts can be granted, as determined in the case of UBM (paragraph 28 of the summaries).
- However, the basis for suing for the provision of bills in the matter of authorization is that of the licensee against the licensee , and not the other way around, and in this context see the Popko case above.
It should be noted that the basis of the law is in accordance with the provisions of the Courier Law, 5725-1965, when the emissary is an authorization granted in writing or in a criminal appeal, and in accordance with the provisions of section 8 of the Law, the emissary must provide any information or any document relating to the subject of the emissary and also provide an account of his actions.
- The agent in our case is Draco, who was authorized to negotiate with Yes, a criminal appeal from the letter of authorization, and therefore she has a duty of loyalty to the sender, which is Luster, and a duty to disclose her accounts to the extent that they were made in relation to the act of the courier.
- Thus, the plaintiff did not present any source of law or honesty that would obligate Luster to provide accounts.
- Beyond the necessity, it should be noted that even if we were to relate to the duty of disclosure in respect of special relations in general (and I do not state so), the mere signing of the authorization letter is not sufficient to attest to the existence of a special relationship between the parties. After the authorization letter was signed, it appeared that Draco had cut off all contact with Luster for eight months. As if that were not enough, she chose to market the products of other companies to Lis, instead of marketing Luster's products, and only after hearing that Luster's products were being promoted through Excel, did she contact Luster, claiming that she had to comply with the preliminary agreement between them.
This conduct, which did not ultimately lead to the expected agreement whereby Draco markets Luster Lease products and receives payment for this marketing, shows that a special relationship has not yet been established between the parties. To be precise, even in such a case, it is not clear who is the one who owes a fiduciary duty and who will be the one who has to pay his bills. But in any case, I am not required to do so.
- The cause of action for the provision of accounts is based on an obligation of the defendant that is recognized under the substantive law, such as a partnership agreement, an agency agreement, an agreement one of the conditions of which is the provision of commission, the licensee and the licensee, the trustee and the beneficiary. (Adv. Moshe Keshet, Procedural Rights and Civil Procedure in Civil Law, Rule and Practice, 15th Edition, Volume 2, 1111).
- In other words, an agreement with the defendant is required that expresses the remuneration to which he is entitled for the cooperation - payment of commissions, payment in percentages, payment according to the volume of transactions, etc. Not every initial agreement to negotiate the sales and payments in the future will lead to the conclusion that this is a special relationship that establishes grounds for providing bills.
- In this context, it should be clarified that the judgments that Draco cites in her summaries actually indicate an ongoing special relationship that requires disclosure of accounts, since without it it is not possible to file a lawsuit, and this is unlike our case.
- Thus, for example, in the case of Civil Appeal Authority 7220/09 Saving Finance v. Doron Cohen [Nevo], in which agency relations were recognized as justifying a claim for providing accounts, there was a claim by agents who claimed that they had served as such for about 10 years, when as part of the relationship between them and the defendants it was agreed that the agents would receive a commission of 30% of the financing profit received from the clients who came to the defendants through the plaintiffs' mediation.
In other words, this is a special relationship between the parties that requires disclosure of the accounts in order to examine the receipts due to the plaintiffs. In his affairs, as mentioned, such a relationship has not yet developed and certainly no agreement has yet been reached on the receipts that Draco of Luster receives.
- Similarly, in the Bohadana case (Civil Case (Tel Aviv) 43640/03 Leah Globus Agencies in a Tax Appeal v. Miri Bohadana [Nevo]), there was talk of a claim for the provision of accounts for the relationship between the agency and its representative for five years, which were based on an agreed-upon system of payment of commissions as a percentage of the income.
- With regard to the reference in the matter of opening incentive 26318-11-12 Jarni Productions in the Tax Appeal v. Edri [Nevo] , I note that from a perusal of the transfer of a place of hearing, it appears that no discussion was held at all on the question of the obligation to provide the accounts, which the court referred to at the end in an unexplained paragraph. However, it is precisely an appeal filed by the plaintiff in relation to the fact that the receipt of the accounts was limited to the period from the date of signing the agreement until the date of filing the claim, was rejected because a claim for the provision of accounts requires a special relationship of trust (Civil Appeal 7099/13 Jarni v. Maor Edri [Nevo]).
Moreover, in the Jarney case, the consideration due to the plaintiff was determined in the agreement between the parties, and it was an agreement that was executed and required a special relationship of trust between the parties, as aforesaid. What is not the case here is when an agreement was not signed in relation to the consideration due to Draco, and in fact the letter of authorization was not realized at all.
- Draco also refers to the Shor case (National Labor Court Hearing 56-3-140 ICL Chemicals for Israel in Tax Appeal v. Shor [Nevo]) and quotes from it in part as if the relief of providing accounts can also be granted "in an ordinary business contract, which does not require special trust or in claims against a completely foreign party."
However, the above quote regarding "a claim against a completely foreign party" is truncated and misleading. The full quote refers to "claims against a completely foreign party based on copyright infringement" (my emphasis. M.C.). And for good reason, since the judgments cited there as an example all relate to the Copyright Law, 1911, in which section 6 speaks of civil remedies against copyright infringement, one of which is the provision of bills, and then it is a legal right and we should not learn from this for our purposes.