P.A. (Jerusalem) 222/08 S. A. v. S. D. [published in Nevo], paras. 260, 270, 2 February 2010).
Burden of proof on the claim of "admission and dismissal" (non-disclosure of an asset that is claimed to be a gift)
- When one spouse claims rights in the property that was not disclosed in the agreement, and the defendant admits that the asset exists and that he did not disclose it, but claims "dismissal" - i.e., that the asset is not balanceable because it was given to him as a gift and is therefore excluded under section 5(a)(1) of the Property Relations Law - the "acknowledgment and dismissal" rule applies.
- The defendant admits the facts that establish the prima facie cause of action (the existence of an asset that was acquired during the marriage and was concealed from the plaintiff), but adds facts that expropriate the right (that it is a gift). In this situation, the burden of persuasion shifts fully to the defendant to prove that it is indeed a gift that was received in a manner that excludes it from the mass of the joint assets.
See CA 6681/21 Sarit Kilker v. Oved Nissim Noam [July 12, 2023].
From the general to the individual
- In light of the principles detailed above, I will examine the arguments of the parties and the conclusions that arise from them.
The value of the defendant's business - Algentman Ltd.
- The plaintiff claims in her pleadings and affidavits that the defendant deceived her and presented her with a false misrepresentation that XXX Ltd. is in "enormous debts", losses and financial difficulties. According to her, she agreed to sign a full waiver of her rights in the company as part of the prenuptial agreement in 2018 only because of her reliance on this false representation. She adds that the defendant presented her that the business was in the same poor condition as it was in 2015, when the profits of the business were small and unprofitable.
- As to the real value of the company, the plaintiff claims in her motions that its value has risen steadily in contravention of the defendant's representations. It claims that already in 2015, the value of the company was at least "ILS 1, 000, 000" (while the value of the realization of the assets alone was ILS 500, 000). It further claims that in 2018 the value of the company increased to at least ILS 2, 000, 000 (when only the value of the realization of the assets exceeded ILS 1, 000, 000).
- In her oral interrogation, the plaintiff testified: "There was a waiver on my part knowing that this business is in debt, and this business is in losses, and the store itself is also in debt." She explained that only after she discovered facts that had been hidden from her, such as the existence of additional franchised stores and accounts at CHASE Bank in the United States, did she realize that the defendant had also lied to her about the state of the business. Therefore, it petitions for the cancellation of the agreement on the grounds of error and deception and for a balance of resources that includes the value of the company.
- On the other hand, the defendant claims in his statement of defense and affidavits that the plaintiff knew very well that this was "an active and profitable business in an unambiguous manner". The defendant refers to the protocol of the approval of the agreement in court, in which the plaintiff explicitly declared: "I understand that there is a situation where his company is worth more and it is possible that the agreement expresses a greater waiver on my part and I have no problem with that." The defendant claims that this statement completely omits her claim that she believed that the company was in debt, and testifies to a conscious, full and voluntary waiver.
- 00The defendant also argues against the valuation of the company. In this regard, his arguments should be rejected since he did not send clarification questions to the expert and did not ask him to be questioned about his opinion.
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- I find that the plaintiff's argument that her consent to give up the balance of the company should be revoked should be rejected. The plaintiff was familiar with the company and its activities and could have checked the company's data before signing the agreement. Moreover, in the 2015 agreement, which was not approved by the court but reflects the parties' agreements at the time it was made, it was agreed that "in accordance with what was said by Mr. Y. If there are few and unprofitable profits in his existing businesses, it was decided by A. Not to open the businesses and everyone will remain exclusively for businesses that belong to him without any judgment and no appeal... It is agreed that all stores including the name, inventory, goodwill, equipment, or anything that belongs to and is related to the clothing industry of Y. It is agreed that everything related to the cosmetics business will be exclusively owned by A. '"
- From the above, it appears that the parties agreed on a separation of property in their business as early as 2015, and this was reflected in the 2018 agreement that was approved, when the plaintiff stated for the record: "I understand that there is a situation where his company is worth more and it is possible that the agreement expresses a greater waiver on my part and I have no problem with that."
- In this situation, the plaintiff is bound by the consents and since she could have conducted independent examinations regarding the company and chose not to do so, she is silenced from arguing against the consent.
See CA 690/88 Hedi Rubin v. Shimon Rubin, IsrSC 44(3) 459, 462.