Thus it was also ruled in the matter of Civil Appeal Authority 5327/02 Orient Color Production and Production Company (1989) v. Continental Bank of Israel in Tax Appeal (Nevo, August 4, 2002) by the Honorable Justice (as he was then called) A. Rivlin:
"As to the main claim, even if the court grants the Applicants' request in full and determines that Applicant 1's debt to Respondent 1 amounts to NIS 5,287,902, this still does not, prima facie, detract from Respondent 1's right to realize the mortgage."
(See also my recent decision in liquidations (Tel Aviv District) 9307-10-22 Eitan Holdings in a Tax Appeal v. Commissioner of Insolvency Proceedings and Economic Rehabilitation, Corporate Department, at paragraph 44 (Nevo, May 14, 2025)).
- Therefore, it is sufficient to prove the very existence of a significant debt that has not yet been paid in order to justify an order to enforce the lien. As we shall see below, Baruch proved that there is also a significant debt that Segal did not repay until the deadline agreed upon between the parties.
- We will elaborate on what these things are supposed to mean. There can be no dispute that over the relevant years, Baruch transferred to Segal (through companies under his control or emissaries on his behalf) substantial sums of money originating from various business engagements. As early as 2011, the parties signed an appendix to the Herbert Samuel Agreement (Appendix 1 in response to the response. The agreement itself was not presented to me), from which it appears that Baruch lent a certain sum of money to a certain company called Talogo Limited, which is owned by Segal (which is not mentioned in the appendix). It was agreed that if the loan is not repaid, Baruch will be entitled to 66% of the profits that will be invested in the real estate project; If the loan is repaid, he will be entitled to 20% of the aforementioned profits. On October 19, 2015, Baruch asked Magal to repay half of the loan by November 10, 2015, and the other half by January 10, 2016. Segal did not deny the aforementioned debt, and replied that he apologized for the delay in repaying the loan, which stemmed from the difficulty in liquidating the assets in his holding, and that he intends to pay half of the required amount during the month of November (see the e-mail correspondence between the parties in Exhibit B/1). Baruch's letter of March 21, 2016 (Appendix 3 to the response to the response) indicates that Segal did not meet his obligations and that the real estate property that is the subject of the Herbert Samuel agreement was sold, and in any event, no evidence was presented to prove otherwise. Baruch testified in his interrogation that the debt was added "and rolled over" to the new transactions with Segal (p. 60, paras. 22-33 of the transcript). No evidence was brought on the part of Herbert that this debt was repaid at any time that would contradict what was stated in the aforementioned references.
- Subsequently, the pub that was placed as collateral for the same loan transaction was sold at the end of 2018. Shortly thereafter, on January 10, 2019, Baruch and Segal entered into an agreement with Zerubavel, which was labeled an "investment agreement", although in fact the parties intended to enter into another loan agreement. The agreement stated that Baruch would invest in the real estate project (through Segal), through a loan agreement that was converted into shares, the sum ranging from €1 million to €2 million. In the last paragraph of the agreement, it was also noted that "this agreement will be replaced by a full loan and mortgage agreement within 30 days from the date of signing this agreement.(See Appendix 4 to the Response to the Request). Although this agreement was not replaced by a new agreement at the end of the day (p. 19, paras. 23-25 of the minutes), it appears that the intention of the parties was to treat this agreement as a loan agreement with all that this entails, and the failure to prepare an additional document does not change the parties' agreements in the original agreement. It is clear, then, that this is not a "full" investment agreement, according to which the investor takes the risk that his investment will not bear fruit at the end of the day, but rather we are dealing with another loan agreement between Baruch (the lender) and Segal (the borrower).
- As noted, in response to the response, Baruch attached a number of references that, according to him, attest to the large sums of money that he transferred to Segal as part of the loans given to him. However, as detailed above, the parties are businessmen from whom a simple bank transfer from the personal account of one to the personal account of the other is from them onwards. References were presented, for example, to two "statements" in Hungarian and English regarding the transfer of funds, one in the amount of €181,409 and the other in the amount of €75,000 (and againstantitrust €256,409), to a person named Friedrich Wilhelm and to an entity called the Enosh Foundation, respectively (Appendix 7 to the response to the response). In addition, the "Schedule of Payments 10/2020" was attached as Appendix 8 to the response to the response, which purports to present all the financial transfers from Baruch to Segal by October 25, 2020. It was claimed that this table was attached as an appendix to the Zerubavel agreement and that Segal signed on the table, as well as confirmed on that handwritten agreement that he had received from Baruch the sum of NIS 2,947,749 by virtue of the agreement (however, Segal denied that it was his handwriting or signature, see p. 83, paras. 14-27 of the transcript). In addition, additional references were attached attesting to Baruch's position regarding various financial transfers to the faculty in the years 2021-2022 in a total amount of approximately NIS 531,000 (Appendix 10 to the response to the response). Although these documents were not translated into Hebrew, it is possible to learn from them (in accordance with the testimonies of the parties in their interrogations) about various financial transfers to the same third parties that accompanied the business relationship between Baruch and Segal.
- Indeed, there is no conclusive indication that each and every sum that was claimed to have come out of Baruch's pocket did indeed reach Segal's pocket at the end of the day. However, it is clear that Segal cannot build from this, since he is the one who caused the transfers to be carried out as they were made, in a different way. Thus, with regard to the transfer of the aforementioned sum of €256,409, Segal himself requested that the funds be transferred to the account mentioned in those "statements". Appendix 6 attached to the response to the response indicates that on January 9, 2019 (close to the conclusion of the Zerubavel Agreement), Segal asked Baruch's wife to transfer the sum of €75,000 to the account of the Enosh Foundation (the other owner of the rights in the pub alongside Segal, see p. 87, paras. 3-6 of the transcript). A day later, Segal sent another email to Baruch's wife, in which he attached bank account details that matched the account details mentioned in the declaration of the transfer of the sum of €181,409 to Mr. Friedrich Wilhelm. During his interrogation, Segal admitted that he was the one who requested that the funds be transferred in this way:
"Q: (Maayan) That's right, thank you. I refer you to Appendix 6. Appendix 6 - Please confirm that these are your correspondences, with Mrs. Baa, who is Yerah's wife.