In other words, at the time of signing the bond, Baruch was presented with an unequivocal confirmation that Herbert's engagement in the bond transaction was done lawfully, in accordance with its articles of incorporation, and that the transaction binds it for all intents and purposes.
Clause 5.9.2 of the bond also includes a similar representation, and states unequivocally that:
"The debtor and/or the mortgagees have received all the necessary agreements, authorizations and approvals in connection with their engagement with this bond and for the purpose of performing their obligations under it, including the mortgage of the mortgaged rights, and there is no need to obtain any additional agreements and/or approvals for this purpose." (emphasis added)
In this context, Section 282 of the Companies Law states that:
"A person who should not have known about the lack of approval for a transaction as required by this chapter is presumed to have received the approval of the board of directors that all the necessary approvals for the transaction have been received."
Indeed, the confirmation of Herbert's lawyer referred to the fact that the transaction was approved "only" by Herbert's board of directors and in accordance with its bylaws, and did not refer to the approval of the general meeting. However, since Segal himself serves as the sole director of Herbert, it is clear that entering into a transaction with him means that Segal hereby confirms, in his capacity as the "board of directors", that the transaction has received all the necessary approvals for the purpose of signing the bond and pledging the shares of Sawda. This is strengthened in light of clause 5.9.2 of the bond quoted above, according to which in order to create the lien there is no need to obtain certain additional agreements or approvals, so that it is difficult to accept the argument that Baruch should have known about the need to obtain the approval of the shareholders for the transaction, especially since the lawyer confirmed that Segal's signatures bind Herbert for all intents and purposes. In any event, it is not possible to determine that Baruch should have known about the lack of appropriate approval for the transaction when he was presented with confirmation that the transaction was binding on the company with which he had contracted.
- Even without relying on the presumption set forth in section 282 of the Companies Law, the burden of proving that Baruch knew or should have known about the lack of approval of the general meeting rests on Herbert's shoulders, since, as is well known, whoever raises a defense claim, has the burden of proving his claim (Civil Appeal 78/04 HaMagen Insurance Company in Tax Appeal v. Shalom Gershon Moving Ltd., at paragraph 13 (October 5, 2006)). In this context, Herbert presented the Registrar of Companies' approval for the transfer of shares in Herbert, according to which on June 8, 2023 (the day after the signing of the third addendum), the transfer of shares to Adv. Kobi Michael (Baruch's attorney) was registered in trust, and on June 26, 2023 (the day after the signing of the bond), the transfer of shares to Baruch in trust was recorded (Exhibit M/1). Herbert also referred to Baruch's affidavit of June 26, 2024, which was attached to his previous motion in the previous proceeding, which was heard before my colleague, the Honorable Justice A. Lushi-Abudi (and which was dismissed out of hand in a decision of July 11, 2024). In paragraph 22 of his affidavit, Baruch claimed that on April 13, 2023, he discovered, through the production of an updated company statement of Herbert, that Segal had "introduced" another partner to Herbert, namely Mr. Cohen.
I am not persuaded that in presenting these documents, Herbert met the burden imposed on her at all.