Bank Finance
- Even if I assume that the parties agreed that it would be possible to finance the purchase by way of obtaining a joint loan from the bank, as the plaintiff positioned, this would not benefit her.
- As we have seen, the plaintiff did nothing to realize the route of receiving the loan from the bank. Danny Kochav confirmed that "I didn't do anything about the loan" (p. 18, line 25). According to him, the fact that the loan was taken from a branch of Bank Leumi in which he himself manages his business is sufficient to testify to his contribution to receiving the loan (ibid., line 23 and line 31). He also testified that Shuki Hazan, who was a partner with the plaintiff, contacted the bank (ibid., line 27). This, too, does not clarify why the plaintiff did not act to obtain the loan, since Shuki Hazan did not testify and the version that he asked to receive a loan on behalf of all the beneficiaries contradicts the testimony of Haim Hollander, according to which Shuki Hazan asked for a loan only for the plaintiff (p. 54, lines 27-32). Moreover, there is no dispute that the bank did not grant a loan to all parties, that the plaintiff did not sign the loan documents, that the plaintiff did not sign a guarantee for the loan that the fortress view received, and did not pay anything to repay the loan. When asked why he did not sign a guarantee, Danny Kochav replied that "It's possible that Shuki Hazan signed" (p. 19, line 2).
- Even if Shuki Hazan approached on behalf of the plaintiff and asked for a loan for the purchase of the shares by all parties, a claim that has not been proven, this is not enough. It was expected that the plaintiff would initiate an approach to the bank, to the other beneficiaries, to find out what collateral was required, etc., and not to sit idly by and wait for someone else to act. Indeed, the plaintiff knew that the defendant had paid at least part of the consideration herself before receiving the loan, and so did Yinon. It was clear that the plaintiff was supposed to bear the lion's share of the payments required to purchase the balance of the shares, and hence also the lion's share of the repayment of the loan that was given (as recalled, the plaintiff was supposed to pay ILS 7,500,000 together with its share of the purchase tax and the value-added tax).
- Danny Kochav was asked why he did not act to receive the loan, and his answer was that the agreement did not state who should handle the receipt of the loan (p. 20, line 20). His version that Shuki Hazan dealt with it was not proven, and as noted, it was contradicted in the testimony of Haim Hollander.
- It also emerges that even after the date for the payment of the balance of the consideration to the partnership had passed, the plaintiff did nothing to participate in the consideration payments. According to Danny Kochav, he learned during 2021 that he had received approval from the bank for the loan (section 13 of A/2). Danny Kochav did not know exactly when he found out about this, and as you may recall, the date of payment of the balance of the consideration was on February 15, 2021 (p. 21, line 5). The plaintiff did not demand to receive the loan documents and did not offer to pay her share of the loan repayments for many months. Although Danny Kochav stated that he asked for the loan documents so that he could pay (paragraph 14 of the 2020), there is no evidence that he applied in writing to receive the documents, that he offered payment or that the plaintiff made any payment.
- Danny Kochav stated that in May 2021 he received Haim Hollander's letter dated May 4, 2021 (Appendix 8 to T/2), but he has no explanation as to why he waited until May 2021. Moreover, even afterwards, he did not send any letter demanding receipt of the documents and did not offer any payment. In his testimony at the meeting on February 10, 2022, i.e., about a year after receiving the loan, he reiterated his demand to receive the documents, and only on February 14, 2022, as part of the plaintiff's letter of reply to the notice of cancellation of the trust, did she demand to receive the loan documents (Appendix 12 to A/2).
- This conduct of the plaintiff with regard to financing the purchase of the shares is inconsistent with her claim that it was agreed to finance the purchase by receiving a loan from the bank. If this had been the agreement, she would have had to do what was necessary to receive the funding.
Clause 2.12 of the trust agreement states:The parties will act to provide bank financing [...]". The section imposes an obligation on all parties to act to obtain the funding. These are ostensibly intertwined mutual obligations (see Civil Appeal 765/82 Alter N' Elani, IsrSC 38(2) 701 (1984)), and therefore if one of the parties does not fulfill its share of the joint undertaking, all remedies recognized by law are available to the other party as a result of the breach (see Civil Appeal 8316/21 Edeltech Holdings (2006) inTax Appeal N' Amos Luzon Group Entrepreneurship and Energy in Tax Appeal (14/8/2024), paragraph 6 of Justice Mintz's judgment).
- A party to a joint obligation who does not do what is necessary for the fulfillment of the obligation and sits idly by and waits for his friend to act, breaches his obligation. Moreover, even if the contractor performs part-time activity, he may be considered to have breached his obligation. In fact, the provision of section 2.12 does not obligate the parties to receive the loan from the bank, but rather to act jointly to receive the loan. This obligation imposes on each of them a duty to try to achieve the result, i.e., to receive the funding (see 2887/91 Gol v. Uriel, paragraphs 7-9 (September 28, 1995); Civil Appeal 3865/19 Eliassian v. Shebo, paragraph 31 of President Hayut's judgment (September 11, 2022); Civil Appeal 8389/17 Daniel Alex A.S. Presumptions in the Tax Appeal v. Laxel Establishment, paragraph 10 of the judgment of Justice Amit and paragraph 19 of the judgment of Justice Mintz (May 6, 2019)). A party to an agreement that did not do so did not act reasonably to comply with the obligation imposed on him, and will be considered a breacher.
- We will add that also by virtue of the duty of good faith imposed on the plaintiff as on any contractor (Section 39 30The Contracts Law (general part)), the plaintiff could not refrain from taking any action in order to obtain the loan necessary to finance the purchase (see on the obligation to perform a contract in good faith: High Court of Justice 59/80 Beer-Sheva Public Transportation Services in Tax Appeal v. The National Labor Court in Jerusalem, IsrSC 35(1) 828 (1980); Civil Case (Center) 22685-04-12 Hawassa gas station in a tax appeal vs. Paz Oil Company in a tax appeal (31/12/2014)).
- Therefore, even if the plaintiff was entitled to rely on the provisions of clause 2.12 of the trust agreement and request to finance the purchase of the shares by way of obtaining a loan from the bank, the plaintiff breached her obligation to act to receive that financing. The breach of the obligation to act to receive the funding also constitutes a breach of the trust agreement.
- It should also be recalled that the plaintiff had the right to demand after 12 months that the registration of the shares be transferred to her name, as stated in clause 4.8. to the trust agreement. The plaintiff did not do so and did not demand the shares before the cancellation notice. This is not reasonable behavior by the person who insists on enforcing the agreement, but rather shows that the plaintiff knew that if she insisted on receiving the shares, she would have to pay her share. It should also be recalled that according to clause 6 of the trust agreement, the beneficiaries undertook to pay, within 5 days from the date of receipt of the demand, "Any payment or expense that is imposed or will be imposed on a party for any reason whatsoever (The defendant - R.S.) In respect of his holding in trust in the shares of parties B, C and D At Nof HaMitzr Company, This is together with interest rates and indexation differentials.". The plaintiff was required to pay her share of the purchase, or at least her share of the loan repayments, and did not do so, and this too constitutes a breach of the trust agreement.
Conclusion
- As clarified above, the plaintiff did nothing to finance the purchase of the shares for her, did nothing to receive the bank financing for the purchase, and in fact sat idly by and waited for her partners to act for her and finance the acquisition for her. In doing so, it breached its obligations to finance the purchase, whether it was a commitment to direct financing or an undertaking to act for bank financing.
In light of the aforesaid, I have reached the conclusion that the claim should be dismissed.