Still, even given this more stringent picture, I found that the vast majority of the claims raised by the plaintiffs against the defendants should be rejected. This is subject to one matter - which is Ms. Or's demand to advance payments from some of the group members, even though the time has not come for this. The demand for payment was unlawful, and this was clearly unlawful, since it was in complete contradiction to the explicit provisions in the agreements. In this matter, and in view of the fact that the defendants are confidants of the class members, they should have taken action. They could not suffice with directing the members of the group to review the agreements in order to find the answer themselves. Here I found that Adv. Nof, as someone who served as the significant legal entity, should have been held responsible, which should have led to an order that these payments should not be paid, until the issue is thoroughly clarified.
I accept that Adv. Nof acted in subjective good faith. He took the partial step he took, in view of his position of interests vis-à-vis the wishes of the group organizer on the one hand, and the interests of the group members on the other. Still, what matters here is not the subjective good faith, but the duties of objective beliefs. And from this perspective, it appears that sufficient weight has not been given to the duties of trust towards the members of the class.
- As will be seen along the way, the defendants are right in their complaint that the plaintiffs' claims have arisen, in many cases, to widen the façade. Despite this, I have tried to discuss things on the merits in most cases. And the result I have reached is that the lawsuit should be accepted in a small part and dismissed for the most part. With all the understanding of the plaintiffs' great frustration, I am satisfied that this is the outcome that the law dictates.
- I will turn to examine things as they are.
The defendants did not represent the plaintiffs for the purpose of negotiating and signing the agreements to join the purchasing group
- The first basic question, among many, to be decided is whether the defendants - Adv. Nof and Adv. Aharonson - represented the person who wished to join the acquisition group, already at the stage of negotiations to join it.
My answer is no.
- In this regard, it should be understood that the process of joining most of the purchasing group lasts over several meetings. Usually, at the first meeting, those who wish to join the group sign a form in which they are given the details of the relevant conceptual unit, the floor on which it will be located, the number of rooms, and in what direction it will prospectus. The estimate of its cost, the component of the cost of construction, the component of payment for the land, the marketing fees, and more were also noted. On this occasion, a "seriousness fee" was usually paid, and a follow-up meeting was scheduled for the purpose of signing the other agreements, including the sale agreement.
This first meeting was done with Greeny City's salespeople, as indicated in the upper right corner of the application form, in which the "Agent Name" field is hand-filled. It is not established that in each and every case the defendants' attorneys were also present at this event, but it cannot be ruled out that in some cases they participated in the meeting if they were present.
- In any event, the question of the defendants' representation is regulated by the provisions of the contractual system that the plaintiffs reviewed - or could have reviewed - before joining the class:
- The representation agreement (entitled "Ordering Legal Services - Commitment to Pay Fees") is only about two pages long. It explicitly stated in a number of paragraphs that the defendants do not represent the plaintiffs for the purpose of negotiating and signing the agreements, and also establishes conditions of exemption from liability and waiver, which I will refer to separately.
Paragraph 3(a) of the agreement explicitly states:
- For the avoidance of doubt, I hereby declare that I am aware that your fees do not include expenses and payments such as:
(a) any legal treatment involved in filing appeal proceedings... and that your firm does not represent us or advise us in negotiations in connection with the signing of the partnership agreement (as opposed to drafting the agreement according to the marketer's instructions) and does not represent us in any case of dispute with the manager/marketer (i.e., Greeny City Ltd.)...[emphasis added]