Civil Lawsuit in a Rapid Hearing (Tel Aviv) 65691-01-24 Premium Credit Solutions Group Ltd. v. Sharon Ragforker

Background

1. I have before me a claim on the grounds of promissory note, for the payment of an alleged fee debt in the amount of ILS 46,215.
2. On May 11, 2023, the defendant, Mr. Sharon Ragporker, approached the plaintiff, Premium Credit Solutions Group in a tax appeal (a company that provides advice and support in raising credit and loans for the private and business sectors), and entered into an agreement with it to raise a non-bank loan in the amount of approximately ILS 716,000 against an apartment for sale that was under receivership at the time.
3. As part of that engagement, the defendant signed a work order agreement (hereinafter - the "Agreement") as well as a promissory note in the amount of ILS 39,500 plus a tax appeal in favor of the plaintiff, which is limited to the amount of the fees she was entitled to under the agreement (hereinafter - the "Promissory Note").
4. The proceeding begins with a claim for the realization of the promissory note filed by the plaintiff against the defendant at the Execution Office. After the defendant was granted permission to defend himself, the claim moved to a speedy hearing (decision of February 5, 2024).

Summary of the parties' arguments

5. According to the defendant in the objection motion, the company took advantage of the terrible distress he found himself in following a severe financial entanglement, in which Mizrahi-Tefahot Bank was appointed receiver of the residential apartment owned by him and his wife in Be'er Sheva. While the defendant claimed that he was able to meet the monthly mortgage repayment payments to Mizrahi Tefahot Bank, he was unable to repay debts that amounted to approximately ILS 250,000 to Obligo.  In this situation, a family father who was about to be thrown out of his home became "easy prey" for the plaintiff and the agreement that is the subject of our discussion was signed.
6. In his summary, he further claimed that the plaintiff presented herself as someone who solved financing problems while undertaking to provide credit at an attractive interest rate, when her representatives would aggressively pressure him every day to sign an engagement agreement without giving him a reasonable opportunity to review it before concluding it.
7. According to him, during the evidentiary hearing, the exceptional terms of the loan that was approved for him were clarified - an effective interest rate of 17.52% (three times the standard in banks) with a monthly repayment of ILS 9,490, while the total family income of him and his spouse was ILS 11,000. The plaintiff contacted only 4 financing bodies out of 75 with whom she has employment relations, the loan referred to the sum of ILS 650,000 instead of ILS 250,000, and the interest obtained was a biting interest rate of 19.14% in violation of the law.
8. He claimed that the agreement was null and void due to oppression, since the plaintiff knew about his distress, took advantage of it and obtained a loan for him under draconian conditions and extreme unreasonableness. The plaintiff also alleged that the plaintiff violated the provisions of the Fair Credit Law and public policy by requesting that in addition to the interest transaction she brokered for him, she also sought to collect excessive fees.
9. Hence, according to him, there is no legal or moral basis for demanding payment.
10. The defendant further claimed that while he did everything required under the agreement with the plaintiff and the plaintiff's representative even admitted that the defendant had given him all the documents in order to obtain approval in principle for granting a loan, the plaintiff did not fulfill all of its obligations in the agreement, the plaintiff's representative admitted that the document presented was not "approval in principle" and the plaintiff did not prove at all that the defendant was invited to sign a loan agreement.
11. The defendant refused to take the loan under the conditions presented because he was under the impression that it was a destructive transaction, and did not actually take the loan. At the end of the day, he was drafted into the war and received a loan from Mizrahi-Tefahot Bank in the amount of ILS 200,000 in order to pay Obligo the debt to it and thus return to a normal life path.  Even the aforesaid, according to his claim, is sufficient to nullify the plaintiff's entitlement to any legal fees.
12. The plaintiff, for her part, denied the defendant's claims and insisted that he had not met the burden of contradicting the presumption of obligation to pay by virtue of the promissory note to which he signed.
13. According to her, the rule is that anyone who signs a deed is liable for it. The defendant does not deny that he signed the promissory note, and insofar as he claims the absence of a debt, the burden is on him to prove it, in accordance with section 29(a) of the Banknotes Ordinance [New Version] (hereinafter - the "Banknotes Ordinance").  The plaintiff also referred to sections 84(a) and 89 of the Banknotes Ordinance.  According to her, the defendant did not meet this burden in the circumstances.
14. According to the plaintiff, the defendant approached her on his own initiative and signed an agreement with her for the provision of consulting and accompaniment services in raising credit, up to the sum of ILS 716,000, while placing as collateral for the transaction an asset owned by him and his wife in the amount of ILS 1,150,000, which was at that time in receivership.
15. According to her, the agreement signed by the defendant is a fair agreement, according to which the plaintiff's fees are paid in a gradual manner in accordance with the pace of the work being performed. The defendant does not deny that he signed the agreement, and no conditions of oppression were fulfilled - neither in signing the agreement nor in the terms of the agreement itself.
16. The plaintiff further claimed that she worked extensively and invested the best of her time, expertise and professionalism in order to broker the most attractive loan for the defendant in his special circumstances (receivership, execution cases, etc.). Among other things, the plaintiff approached various financing entities with a request for a loan along with all the relevant documents.  While some of the companies she approached refused to grant the loan, one company (Delta Capital Group) approved the granting of a loan and the defendant received approval in principle to provide a loan in the amount of ILS 650,000.
17. According to her, the defendant signed the same approval in principle with his spouse and son as guarantors for the repayment of the loan in favor of the financing company, during a frontal meeting with that company. Notwithstanding the aforesaid, at this point the defendant decided to disappear in breach of the engagement agreement he had signed and without paying the plaintiff the consideration to which it was entitled.
18. The plaintiff further claimed that at the same time she succeeded in obtaining the defendant a reduction of ILS 50,000 in his debts vis-à-vis his large creditor and also succeeded in convincing the receiver of the defendant's apartment to reduce his fees by 10%. The plaintiff claimed that she also acted in an attempt to help the defendant redeem his pension funds and found the legal constellation to do so, and all this without her being obligated to do so - but the defendant did not move forward.
19. According to her, despite the provisions of clause 18 of the agreement, according to which the fees will be paid to her in two parts, first ILS 500 as seriousness fees paid by the defendant at the time of signing, and the balance in the amount of ILS 39,500 plus a tax appeal within 7 working days from the date of receipt of the approval in principle - the defendant refrained from doing so. The agreement explicitly states that the plaintiff's entitlement to her salary is not contingent on the actual granting of the credit, but only on receiving approval for it.  Once approval in principle is obtained, her entitlement to her wages arises, and therefore her claim must be accepted in full.

Discussion and Decision