The defendant argues that the registration of the relief in the statement of claim as an enforcement remedy is intended to evade the payment of a fee as required for a monetary remedy , which is in fact the operative remedy. This, according to him, is contrary to the case law, which obligates the plaintiff to pay a fee according to the nature of the final requested relief. As a result, it is requested to order the deletion of the cause of action and the relief in limine, or, alternatively, on the merits of the matter.
- Finally, the defendant declares that there is no objection on his part that the plaintiff will sell her shares to a third party, insofar as the controlling shareholders of defendant 2 or a related party to them are not involved. This, according to him, is subject to the fulfillment of the plaintiff's obligations to act in accordance with the provisions of the agreement (section 62 of the amended statement of defense).
Discussion and Decision
Threshold Claims
- In the present proceeding, the defendant raises three main arguments for dismissing the claim in limine. First, it was argued that the plaintiff was trying to unlawfully evade the payment of a fee as part of her request to enforce the option clause in the agreement [paragraphs 12, 66 of the amended statement of defense; paragraphs 41 of the defendant's summaries]. Second, the defendant insists that the company was not joined as a litigant, which prevents the plaintiff from receiving remedies that directly affect it - including the liquidation of the company by dividing its assets in kind [paragraph 6 of the amended statement of defense, paragraph 32 of the defendant's summaries]. Finally, the defendant is of the opinion that the addition of defendant 2 to the action was done in bad faith while improper cooperation with the controlling shareholders of defendant 2 [paragraph 10 of the amended statement of defense, paragraph 35 of the defendant's summaries].
- I did not find in the defendant's arguments regarding the addition or non-addition of defendants to detract from the decision in this judgment. With regard to the addition of defendant 2 to the present proceeding, the defendant did not establish any ground on which the court should intervene in such a joining. Even if the combination was done intentionally and in bad faith, as the defendant claimed in his summaries [paragraph 35 of the defendant's summaries], the defendant did not mention the implications of the matter for the proceeding in question and for the aforesaid decision. There is no concrete legal cause of action in his pleadings that stems from the alleged improper combination of defendant 2.
- With regard to the non-joining of the company as a litigant, it may limit the scope of the remedies that can be granted in the circumstances of the case, due to the consequences that may apply to it without its ability to defend itself before the court. However, as will be explained below, the decision in this judgment is limited to the shareholders' agreement to which the company is not a party.
- With regard to the fee claim, the rule is that a remedy in which the court is requested to give instructions for the purchase of shares, even without specifying their nature and essence and without estimating the value of the shares, is an operative remedy, and this has practical implications for the classification of the payment of the fee [see: Civil Appeal Authority 9920/17 Cyril Cohen Solel v. KEYRUS SA FRANCE, at paragraph 13 of the judgment (Nevo, April 12, 2018) (hereinafter: "the Solel case")]. In a claim filed under section 191 of the Companies Law, which includes elements of monetary relief, a fee must be paid for it [Solel case, at para. 10; Civil Appeal Authority 783/05 Nili Anavi v. Eyal Koren (Nevo, June 20, 2006) (hereinafter: "the Anavi case")]. The question of classification of the payment of the fee is examined in accordance with the circumstances of the case, when it is customary to examine, inter alia, whether the relief requested is a direct monetary remedy; and whether the party entitled to declaratory relief will be required to file an additional action for the granting of operative relief [see: the Solel case, at para. 11; the Anavi case, at para. 8(9) of the judgment of Justice A. Rubinstein].
In the circumstances of the case, it appears that the provision of an order to enforce the option clause in the agreement, which is inherent in the purchase of shares at price conditions that are expressly given for monetary expression, constitutes a claim for monetary relief that requires payment of a fee in accordance with Regulation 6 of the Courts Regulations (Fees), 5767-2007 (hereinafter: the "Fees Regulations"). Upon the issuance of an order to enforce the option clause, the plaintiff will in fact be entitled to the monetary value of its shares without having to file an additional lawsuit on behalf of the court. Moreover, the wording of the remedies requested by the plaintiff in her summaries attests to her desire to receive direct monetary relief [see paragraphs 91.2-3 of the plaintiff's summaries]. While we are dealing with a remedy that forces the defendant to purchase the plaintiff's shares, the practical significance is the transfer of money from the defendant to the plaintiff [see: Civil Appeal Authority 8223/22 North Star Entrepreneurship in Tax Appeal v. Galileo Tech Ltd., at paragraph 27 of the judgment of Justice R. Ronen (Nevo, January 1, 2023)].