A: Because we were 50-50
[...]
Q: Okay. Why did you split exactly half by half in the revenue?
A: Because we were partners. What do you mean? So how much will we share?
[...]
Q: So you were just a warehouseman?
A: Mostly, not only, mainly.
Q: A warehouse man who draws a salary like a director?
A: What is it like? I am a 50 percent partner. What is it like?
Q: Okay
A: Why like?
Q: Okay. Did each of you contribute to society in the same way?
A: He's his and I'm his.
[...]
The Honorable Judge Anisman: You are partners in all intents and purposes.
A: I said
The Honorable Judge Anisman: Yes
A: He was the brain...
The Honorable Judge Anisman: Only each one contributes my expertise.
A: I said. He was the brain.
Q: Okay
A: I was the one who had to do with the warehouse."
- Moreover, in the version of the Registrar of Companies of Don Gilley, Mr. Rosen is also listed as a director and owns half of its shares (Exhibit 9 to the file of exhibits on behalf of the plaintiffs).
- Therefore, and on the basis of the evidence and testimonies heard before me, I reject the defendants' argument that Mr. Rosen served only as a warehouse in Don Gilly and that his role was purely operational, and I find it to be determined that Mr. Rosen, who served as a shareholder and director of Don Gilley, was active in all levels of the company's activity in a substantial and continuous manner, with all the implications involved and accompanying thereof.
- In light of the fact that Mr. Rosen is a director and a full partner together with Mr. Ginley in the management of Don Gilley, the possibility of imposing personal liability by virtue of contract law and, alternatively, by virtue of tort law, should be examined.
- The possibility of imposing personal liability by virtue of contract law on an organ in the company was recognized only in the most exceptional cases, such as situations in which it is responsible for the breach of contract, due to bad faith conduct on its part, and it was determined that personal and subjective guilt must be proven, and an objective test of good faith is not sufficient [see: Civil Appeal 10362/03 Barazani Services and Transactions in Tax Appeal v. Ben Rahamim Brothers (North) Ltd., paras. 16-17 (Nevo, October 20, 2009); Civil Appeal 313/08 Nashashibi v. Rinrawi, IsrSC 66(1) 398, 423 (2010); Civil Appeal 8232/09 Polaron System Israel v. Mishkan Properties Brokerage Ltd., para. 33 (Nevo 28.1.2014) and references therein].
- The rule regarding the imposition of personal liability on a shareholder or officer of a company, for breach of contract by the company, was discussed at length in the Ashdod City Center case, where it was held (in paragraph 65 of the judgment of the Honorable Justice Danziger) that:
"When a plaintiff who has entered into a contract with a company files a lawsuit against the company and also adds to the claim an organ or officer of the company - in which he claims that the company breached the contract with him, and in addition claims that there is justification for imposing personal liability for that breach not only on the company itself but also on the organ or officer of the company in accordance with the principle of good faith - he must prove that this is an exceptional case that justifies taking such a step. That is, a case that falls within the scope of those 'rare cases such as fraud' or a case in which the organ or officer is 'personally (subjective) guilty of acts or omissions'.