It is further clarified that the lawsuit against Sharon is to be dismissed, and therefore the plaintiffs' appeal in relation to it is dismissed.
- I would also suggest to my colleagues that Pinkowitz and the insurance company (jointly and severally) be charged with the plaintiffs' expenses (as defined in paragraph 4 above) and their attorney's fees in the total amount of ILS 750,000 for today. CPA Milner will bear the plaintiffs' expenses and their attorney's fees in the total amount of ILS 100,000, together with the aforementioned charge of Pinkovich and the insurance company.
I will also suggest that no order be made for expenses in the relationship between the plaintiffs and CPA Shaporan, since he was obligated to pay compensation but his appeal was partially accepted.
As for the three directors who were found to be indebted, I would suggest that they should not be charged separately for the plaintiffs' expenses, since their liability was found to be covered by the insurance.
Finally, it is proposed to charge the plaintiffs for Sharon's legal expenses, including attorney's fees, in the total amount of ILS 20,000.
It is clarified that the ruling on expenses and attorney's fees relates to both instances.
| Judge |
Judge Y. Amit:
- The trial court reached the conclusion that the directors are exempt from liability in light of their advanced age and because they do not understand anything about the materials at hand; that CPA Milner is exempt from liability because he relied on Pinkovich; and that the liability is passed on to the plaintiffs-appellants, since as shareholders they should have paid attention to the failed functioning of the directors and demanded their replacement. These conclusions cannot stand up to fundamental concepts in corporate law. A director cannot defend himself on the grounds that he does not understand and does not have the necessary skills, or that his advanced age did not allow him to show interest in what is being done. On the contrary, these are precisely the reasons for which liability should be imposed on the directors, and I therefore agree with the judgment of my colleague Justice Zilbertal.
- The company's directors, most of whom have already passed away, were good people who wanted to contribute to the management of the village, as if the interests of the residents were close to their hearts (two of them were members of the kibbutz and apparently did not work in order to receive a salary), and they had served in their positions for nearly 35 years without being replaced. Rebas, for example, a social worker by profession, worked in the village for about thirty years as a social worker, and he did not even pretend to claim that he understood a thing or a half about financial matters. As Reeves's counsel fairly argued before us, the directors who "set foot in the First World War" were not rewarded for their actions as directors and they saw what they did as a moral mission.
Reading this, it seems that the directors in the company belonged to a different generation, and they were not aware of the changes that had taken place in legislation and case law regarding the roles and responsibilities of the director in the company. For our purposes, what I said in another parasha is appropriate: