The parties disagree with each other as to whether the meeting of the board of directors of August 3, 1997, in which they were present, was continuous, but the directors on behalf of the respondent, and they decided on their own not to approve the registration of the shares in the name of Milmus, was legal and valid. However, there is no dispute, and there can be no dispute, that Milmus purchased the shares and held them prior to their listing in the name of the Registration Company. However, even after they were registered in the name of the Listings Company, Milmus remained the owner of the shares as aforesaid.
I said above that if Milmus had approached the court, after the respondents' refusal to register the transfer of the shares to her, in August 1997, if due to the absence of a register of the shareholders or for some other reason, it is possible that there would not have been a need for this entire hearing, and the liquidation application could have been heard on its merits.
- An examination of the decision of the directors on behalf of the respondents shows that even assuming that the two directors on behalf of the respondents were authorized not to approve the transfer of the shares or to register Milmus as the shareholder it acquired from the foreign companies, and I will elaborate on this below, no reason was given for the aforesaid refusal, and it is not clear why the transfer of the shares and their registration as aforesaid should not be approved. It is inconceivable that even then, in August 1997, the directors on behalf of the respondents "guessed" that the intention of Milmus was to bring about the liquidation of the company or to dispossess Benny Cohen of their life's work, as they claim today. Exclusive discretion for refusal under Regulation 23 of the Company's Articles of Association is not unlimited, and since no reason for the refusal has been specified – there is no escaping the conclusion that the refusal is arbitrary, and was not done for substantive reasons.
- The Applicant claims that at the meeting of the Board of Directors at which the request to register the shares in the name of Millmus was denied, there was no legal quorum of directors. Moreover, the Applicant complains that the two directors on behalf of the Respondents were accompanied by their lawyer, while the attorney for the representatives of Milmus was not present at the meeting, and thus, according to Milmus, the Respondents' counsel violated the "Rules of the Bar Association", while "violating equality" in the Board of Directors. It is true that the beginning of the meeting was in a legal quorum, when the directors on behalf of both parties were present, and I do not see the need to discuss, for the purpose of this application, the question of whether the presence of the respondents' counsel without the presence of the applicant's counsel at the meeting constitutes a violation of the rules of the Bar Association; Plainly, which I do not need to do in the hearing of this interim motion. When the representatives of Milmus rehabilitated and left the meeting of the board of directors on August 3, 1997, I am of the opinion that there was no reason to continue the discussion, when in order to make such an important decision that grants status to the holder of half of the shares in the company and its board of directors, it was appropriate and should have been done in the presence of the "other party", which is the party injured by a decision made in the "status of one party" and its entire purpose is not to give a "foothold" to the other party. In other words, a decision refusing to approve the registration of shares in the name of Milamus.
Moreover, the Applicant argues that the statutory quorum at the meeting of the Board of Directors, as stated in Regulation 86(b) of the Company's Regulations, is three directors who are present themselves or are represented by their substitutes. Indeed, this regulation raises the question of "no decision" at the meeting of the board of directors, which representatives of Milamus were present at the time of the decision according to the two directors on behalf of the respondents.