The significance of the confession in the amended indictment is that the activity of the plaintiff and defendant 1 must be examined before their aforesaid illegal actions - whether it constitutes a partnership, despite the existence of a company in which they operated (at first - not raising horses in tax appeals and then Udan services). The manpower corporations, however, replaced these, in order to enable the plaintiff and defendant 1 to circumvent the regulatory limitations.
I have no evidence before me that the establishment of the manpower corporations in or around 2005 was intended to turn an activity within the framework of a company into a partnership, or caused it, and the plaintiff did not claim this either.
Hence, for the purpose of discussing the claim of partnership, the fictitious and criminal activity of the plaintiff and defendant 1 as expressed in the amended indictment is of no importance.
- Was the plaintiff able to prove a partnership despite the existence of limited liability companies?
- As stated, according to the above rulings, ignoring the activity in the corporate framework of a company in a tax appeal and determining that it is a partnership will be done in special and exceptional circumstances.
I will add that, as stated, all the tests for the existence of a partnership enumerated above, which the plaintiff discusses in his summaries at length, must be examined with the exception of the existence of another corporate structure with all that this entails in case law, when the plaintiff and defendant 1 operated through corporations from the beginning, even before the establishment of the fictitious corporate structure in 2005.
Therefore, the line of argument raised by the plaintiff in his summaries, which is based on a careful review of the tests for the existence of a partnership and an attempt to show that they have existed, is not acceptable to me, since he assumes that we are dealing with a situation in which there is no other corporate structure, which is contradictory, and this is not the case.
- After hearing the testimonies and reviewing the evidence, I have reached the factual conclusion that there are no exceptional circumstances that justify ignoring the existence of the formal corporate structure. It was found factually that the parties did not agree to establish a partnership between them. As explained below, I found that the testimony of the plaintiff and his witnesses should be rejected, and that the testimony of defendant 1 and the witness on his behalf should be Here are my reasons.
E1. The amended indictment presents activity in the corporate structure of companies in tax appeals
- The facts according to the amended indictment according to which the parties were convicted are not in dispute. None of the parties asked for permission to conceal them (according to section 42A of the Evidence Ordinance [New Version], 5731-1971).
- The plaintiff claims that the amended indictment presents him and defendant 1 as partners and that in the plea bargain "we both admitted that we were full partners and bore full responsibility" (paragraph 76 of the affidavit).
However, a review of the amended indictment presents a different picture. It is attributed to the plaintiff and defendant 1 in fact control of the management and ownership of these companies, but they are not defined as partners.
- For the sake of illustration and due to the importance of the matter, I will turn to the amended indictment:
In paragraph 1 thereof, the plaintiff and defendant 1 are described as "the actual controlling shareholders of a number of companies between the years 2005-2012...";