I will also note that in the framework of this meeting, Ben Shabbat expressed his opinion that the third agreement – which is the last agreement signed between the parties – is the one that remains in force. Against this background, it is understandable Peleg's motivation to agree to the settlement, in which he waived the possibility of conversion but "saved" the other half of the commission, which is not anchored in the second and third agreements.
Moreover, in his testimony Ben Shabbat testified (as already cited above) that the issue of additional options was not raised at all in the framework of the meeting (see his testimony on page 105), testified that if additional issues had been raised they would have been discussed (see his testimony on page 106, lines 12-14), and in addition, he confirmed that in his understanding the agreement reached by the parties in the framework of that meeting was final (see page 106). This testimony of Ben Shabbat shows the finality that the parties themselves attributed to the agreements in the framework of the meeting of September 24, 2019, and it also negates the demand for an additional fee that was not agreed upon at this meeting.
- In my determination that there was no agreement between the parties that the plaintiff would be entitled to options to purchase the shares, in addition to the financial commission that can be converted into shares, three arguments raised by the plaintiff in support of her claims did not go unnoticed. The first is that evidence of agreement regarding the inclusion of this clause can be found in the fact that the clause was added to the fourth agreement; The second is that there was no reason to raise the demand for options at this stage, since in any case the options were blocked; and the third – and accordingly the consent as claimed by it – i.e., the payment of a monetary commission as well as the allocation of options for the purchase of shares, is customary in the field. In this latter context, the plaintiff further argued that the receipt of the options constitutes the largest "prize" in her fees, and therefore, it is clear that she insisted on receiving it and that she did not waive it. After examining these arguments , I did not find them acceptable , and therefore, they do not change my determinations.
- First, as to the plaintiff's attempt to attribute importance and weight to the addition of the clause to the fourth agreement and to the alleged agreement of the parties to "return" to the first agreement, which also includes the option component – as I have already written and detailed in paragraph 31 above of the judgment (and therefore I do not find it necessary to repeat the words but only to refer to the aforesaid), I do not believe that the addition of the clause to the fourth agreement was done by consent, and moreover, as I determined above, I did not find Peleg's claim on this matter to be reliable. However, in accordance with my determination above, this is an addition that was made by Peleg, knowing that Don objects to the addition of this clause and which was deliberately concealed from Don by Peleg. In light of this, I do not find any evidentiary weight to be attributed to the addition of the clause to the fourth agreement.
- Second, with regard to the blocking of the options, I will begin by noting that the claim regarding the blocking was made in vain and without any evidence being brought to support it in accordance with the law, i.e., an opinion. Moreover, with regard to Peleg, it became clear that his testimony on this matter constitutes hearsay testimony, since according to his testimony he had heard about it from Ananda and he himself is not an expert in regulation (see his testimony at page 131). I will note that when Don was asked about the blocking of options, he testified on page 36, lines 16-17: "A: I don't remember blocking performance shares, but blocking shares is two years." - i.e., in his testimony it is not possible to find support for this claim of the plaintiff. Moreover, and without derogating from the aforesaid, I am of the opinion that the plaintiff's claim that there was no reason to inquire about the options earlier, since in any case they could not be exercised, is inconsistent with her request on the matter in February 2020, a date on which it was not yet possible to exercise the options. This is taking into account that according to the plaintiff's own claim – in accordance with the regulation in Sydney, the options from the first offering were blocked for exercise and trading for two years from their grant, i.e., until January 29, 2021, while the options for the second offering were blocked until May 29, 2021. In other words, this argument of the plaintiff should not be accepted both because it was not proven and because in any case her subsequent conduct is inconsistent with this argument.
- Similarly, the plaintiff's third argument, according to which the practice in the context of the commission is to provide a monetary commission at the rate of 5% and options at the rate of 5%, is also rejected since it was argued in vain, and in general, no opinion was presented in support of the existence of that practice. To this, it should be added that both Ackerman and Peleg referred to this practice in the framework of their testimony. However, in this testimony I found it doubtful as to the date on which it was given. Whereas, already in the course of the hearing, I wondered how these two witnesses testified about the practice for the first time in their testimony, stating the same percentage in percentages, when at least Ackerman testified about this without being asked a question that was intended to give such an answer (see Ackerman's testimony on page 18, lines 5-13, who testified about the alleged practice without being asked about it). In light of this, I do not find it necessary to give weight to this testimony. My determination regarding the low weight that I believe should be given to this testimony of Peleg and Ackerman, is strengthened given that they testified that they were partners (i.e., that they had an interest in the outcome of the proceeding – see Ackerman's testimony on page 28, lines 2-3 and Ben Shabbat's testimony on page 90) and that they held joint meetings in order to prepare for their testimony, prior to their testimony (see Ackerman's testimony on this matter on page 20, line 1 and on page 35, and yes, I have commented on this matter on page 2, lines 1-22, as well as Ben Shabbat's testimony on page 96).
For the sake of completeness, I find it necessary to note that in the course of his testimony, Ackerman further claimed that the options were the real consideration. This is because, according to him, due to the obligation to convert the commission into shares, this fee was at risk. Thus, on pages 30-31, Ackerman testified that at the end of the day , they did indeed sell the shares they received while converting the financial commission into a profit, but according to him, if they had lost, there is no clause in the contract that would have compensated them for this loss, and therefore he claimed: "We risked $350,000 in the purchase of shares even before we received the commission. To say it was 5+5, it wasn't even 4.5+4.5, we took a risk here, and then in fact the net real value was the options - why should we give up on something like that? " (ibid. on page 31). Ackerman's argument regarding the level of risk taken by Peleg and his partners constitutes a distortion of reality. This is because the actual investment from the partners' pockets was in the amount of the $100,000 loan they gave to the company, while the balance of the investment in the amount of $230,000 in accordance with the CLA agreement was of the commission to which they were entitled. A reflection of this can be found in the correspondence between Feit and Don detailed in paragraph 21 above of the judgment, in which Feit complained that Peleg received a commission even before the IPO took place. Following this correspondence and this comment by Fayette – which was agreed upon by the parties – the procedure agreed upon by the parties was to receive a commission of $230,000 prior to the IPO, on condition that it would be reinvested in the company. It was also agreed that if the offering is not carried out, Peleg will have to return this amount, because it is not money that Peleg actually borrowed from his own pocket, but in practice – a commission that was reinvested. As for this agreement, it makes sense, since from the outset the plaintiff was entitled to the commission only in the case of fundraising. Therefore, it is clear that when the offering is unsuccessful, the plaintiff will have to return the commission that was paid to her in advance. In these circumstances, the plaintiff argued, and accordingly that the plaintiff endangered the commission she received, there is no substance to it, since, as stated, the plaintiff was not entitled to the commission at all in the event of lack of success.
- To summarize this chapter - in light of all the aforesaid and detailed, I have reached a conclusion and accordingly the parties did not agree at all to include clause 3.1.4 in the framework of the agreements between them, and this is a clause that was added by Peleg as part of an offer to the defendant, to which the defendant did not agree and after which the parties reached a different agreement – which was embodied in clause 3.1.2 – and out of mistake clause 3.1.4 was not omitted from the agreements between the parties.
Interpretation of Section 3.1.4
- My determination, and accordingly there was no intention to include clause 3.1.4 in the framework of the agreements between the parties, is sufficient to lead to the rejection of the plaintiff's claims that she is entitled to the allocation of options for the purchase of shares (or the value of these options in money). At the same time, for the sake of completeness, I am of the opinion that in any event, the interpretation of this section also shows that it does not contain what the plaintiff wishes to read – that is, this section does not embody the plaintiff's entitlement to receive options to purchase the company's shares in addition to the plaintiff's entitlement to convert the financial commission into the company's shares.
Before I turn to the interpretation of the section, I find it necessary to preface a few words with regard to the normative indications that should be applied in its interpretation. The issue of the interpretation of agreements and the way in which agreements should be interpreted has employed and preoccupies case law and the legislature, and over the years it has undergone developments. As regards this, as a preliminary summary of a brief review below, as part of the development, there was a kind of pendulum swing on the question of who would be given priority in the interpretation of agreements – whether to the language of the agreement or to the circumstances of the conclusion of the agreement. A central milestone in this regard is found in other municipal applications 4628/93 State of Israel v. Apropim Housing and Development in a Tax Appeal, IsrSC 49(2) 265 (hereinafter: "the Apropim case"). In the same matter, the pendulum swung in the direction of the external circumstances, and the court even ruled that even where the agreement is simple and clear on the face of it, the court is still obligated to examine the intentions of the parties and, if necessary, in accordance with the circumstances, to give preference to their intentions over the written ones as well. This rule has been criticized in case law and has even led to the amendment of the Contracts Law and the enactment of Amendment No. 2 to the Contracts (General Part) Law, 5733-1973, which amended the wording of Section 25(a) of the Contracts (General Part) Law, 5733-1973 (hereinafter: "the Contracts Law"), which states, after its amendment, that: