A: Yes.
Q: So I think that in time, you owe, until then everything was good, right?
A: Yes.
Q: So you didn't demand the money back. We didn't ask to receive,
A: No, what is it? We wanted this money to grow. Because he, that's what he promised.
Q: And after the rupture?
A: After the rift we demanded the money all the time, yes.
And later on:
Q: So when the rift started in 2012, you immediately demanded the money.
A: Yes, Saturn's parents also left. Shabtai also went and demanded money,
Later, after counsel for the defendant tried to explain to Tami that her words indicated that the cause of action had become statute of limitations, he asked her again as follows:
Q: So I'm telling you this, you never demanded that money,
A: All the time.
Q: Not in 2012 and not until this lawsuit was filed, and you didn't demand the money because you knew you didn't deserve anything, right?
A: We demanded it from the first moment. From the first moment. First of all, Saturn thought, and even for years, that someone (Shamicho) would repent and realize that he had not betrayed him. Shabtai tried to prove it to him. His parents, older people, his mother begged him too..." (see pp. 42-44 of the transcript).
- In the aforementioned circumstances, the plaintiff's claim that the defendant first denied his obligations in 2015, after causing Yossi's exit from the company (see paragraph 31 of the statement of claim) or that only in 2019, against the background of the involvement of the lawyers, did the defendant first deny the debt (see paragraph 130 of the plaintiff's summaries). Beyond the fact that there was a late change in the plaintiff's version of the date of the first denial, the testimonies of the plaintiff and his wife Tami show, as stated above, that already at the time of the rupture in 2012, it was clear that the defendant was refusing to pay the alleged sums, and attempts began to demand payment of the debt.
- The plaintiff's own testimony indicates that during the rupture in the relationship in 2012, he found out that "Micho is capable of turning over" on him as well, and that later, in 2013, the defendant began to harass Yossi, and in 2014 the situation escalated when Yossi resigned and financial disputes arose between Yossi and the defendant. The plaintiff testified that at this stage he asked the defendant to close the account between them, but does not mention anything about previous requests that were made, as appears from Tami's testimony, and why he did not turn to close the account at an earlier stage after the rift was created (see paragraphs 146-149 of the plaintiff's affidavit).
- The plaintiff testified that the defendant conditioned the execution of the financial accounting on Yossi's signature on documents in which he assumes responsibility for certain activities of the company, and that even after Yossi signed them, the defendant did not keep his promise and continued to deny him and his financial rights (paragraph 153 of the plaintiff's affidavit). In other words, the plaintiff himself describes an ongoing denial of the debt and not one that he became acquainted with for the first time.
- The plaintiff added that in the following period he tried to resolve the dispute peacefully through relatives and rabbis, since turning to the courts is not acceptable in the Georgian community to which he and the defendant belong. This was until, as noted, he realized in 2019 that there was no choice but to turn to the courts (see paragraphs 154-156 of the plaintiff's affidavit and at p. 77 of the transcript).
- These allegations regarding various attempts to reach understandings regarding the payment of the debt were not backed up by evidence or documents proving that they did indeed occur during the period. On the contrary, contrary to the plaintiff's claim that the meeting held in Russia on September 22, 2019 between him and the defendant dealt with the defendant's debts to the plaintiff, from the transcript of the conversation that was recorded and attached as an appendix to the defendant's affidavit, it emerged that it did not deal with the alleged debt at all, and in any case did not include a denial of this debt (this conversation will be expanded on later).
- In any event, even if I accept the plaintiff's version of the aforementioned attempts to reach peaceful agreements with the defendant, his choice to exhaust these attempts and not to exercise the possibility of turning to the courts, does not stop the statute of limitations.
- Thus, even if I accept the plaintiff's version regarding the oral agreements between him and the defendant and the execution of his part in the diamond transaction in the years 2010-2012, i.e., until the date of the rupture, it emerged from the totality of the testimonies that as of 2012, when the rift between the parties was created, the defendant refrained from paying the plaintiff the alleged debt. This is despite demands that were addressed to him to pay the debt as of that date. In this state of affairs, the facts that substantiate the debt claim were formed at that date, and the plaintiff could have filed a claim for payment of the debt due to the defendant's breach of the agreement from that date onwards. "And the significance is that 'the statute of limitations begins when the plaintiff has formed a 'power of action, ' which means that the plaintiff has a real possibility to file a claim and win the requested relief if he meets the factual burden of proof and the legal burden of substantiating his claim" (Civil Appeal 2919/07 State of Israel v. Atomic Energy Commission v. Guy-Lippel, IsrSC 66(2) 82, 116 (2010)). With regard to the beginning of the statute of limitations in contractual claims, a distinction must be made between a claim for enforcement or cancellation of a contract, and a claim for compensation. The statute of limitations for the purpose of a claim for enforcement or cancellation begins at the time of the breach of contract, since even then the plaintiff has a "mature cause of action" and can appeal to the court" (see Civil Appeal 9111/15 Margalit S.A. Vehicles Ltd. State of Israel [Nevo] (October 31, 2017)).
- According to Section 5 of the Statute of Limitations, the statute of limitations for a claim that is not in real estate is seven years. Therefore, when the claim was filed in December 2020, more than seven years after the date the cause of action arose in 2012, the claim allegedly became statute of limitations.
- The same is true of the claims about the very existence of the alleged partnership. As stated above, the plaintiff claimed that according to the defendants' claim in the statement of defense, some of the diamonds that are the subject of the transaction had not yet been sold until the year 2021, and therefore, it would be possible to determine the profits of the transaction and its relative share in them only after its execution is completed and only then the statute of limitations begins. This claim is inaccurate. As detailed above, the payment requirements that began in 2012 were not limited to receiving brokerage fees. These demands also related to the receipt of sums allegedly due from his activities in the framework of the alleged partnership during the period preceding the date of the rupture in 2012. This was after the plaintiff had finished supervising the diamond polishing operations in Russia and at the same time selling them (see chapter e, (3)(b) and (c) of the plaintiff's affidavit at paragraphs 109-110, 118, 126 and 131, and see also paragraph 143 of the plaintiff's affidavit and testimony at p. 82, line 38 to p. 83, line 12)). Therefore, there is also a statute of limitations for profits allegedly deriving from the partnership. In any event, this argument of the defendants is at most relevant with respect to the portion of the profit that has not yet been formulated. This is in contrast to the amount of brokerage fees and profits from the second transaction that were created up to 7 years before the lawsuit was filed.
- Notwithstanding the aforesaid, due to family ties, in light of the difference in the versions, and in order to remove any doubt, I do not see fit to dismiss the claim solely because of this procedural barrier of statute of limitations. As will be detailed in detail, a substantive examination of the plaintiff's arguments and the evidence also leads to the conclusion that the claim should be dismissed.
On the burden of proof
- As is well known, as a rule, in civil law, the burden is on the plaintiff to prove his claim. As stated, the plaintiff claimed his entitlement to receive the sum claimed on the basis of oral agreements between him and the defendant and not on written agreements. In the absence of a written agreement, the plaintiff has a heavy evidentiary burden to prove with concrete evidence the existence of these agreements. "When we are dealing with an oral agreement, the burden of proof is on the person who claims its existence and who wishes to prove its terms. Oral consent must be proven by sufficient evidence. This is an evidentiary hurdle, which the claimant will not easily overcome. In order for the court to make a positive determination regarding the existence of an agreement or its terms, the person who claims to do so must present to the court concrete evidence in support of his argument" (see: Cell (Center) 29538-12-14 D.M. Rothschild Complex Ltd. v. Erez Musacho, paragraph 57 [Nevo] (May 8, 2018) and the case law cited there).
- In the absence of a written agreement and in order to decide whether oral consent exists, the court must examine the circumstances relating to its acceptance, including the conduct of the parties and other parties involved in the matter. Thus, it was held that "the circumstances that will determine the existence of an oral agreement are the circumstances that relate to and surround the transaction that is the subject of the contract, including the conduct of the parties, the documents exchanged between them, and from which it is possible to learn about the transaction, when the court examines the commercial logic underlying the transaction and the meanings that accompany one or another interpretation of the proposed contract" (see: Civil Appeal (Tel Aviv District) 43884-04-14 Bynet K.H.M. v. Meuhedet Health Fund, Paragraph 10 (published in Nevo, March 30, 2015) and the case law cited there).
"The starting point in the discussion of this question is the absence of a written text that can be interpreted. The court is required, in such a case, to interpret the conduct of the parties and to pour content into it... In tracing the intentions of the parties, the commercial logic underlying the transaction and the meanings that accompany one interpretation or another proposed to the contract between the parties are important, as they appear in the perspective of this commercial logic (see: Civil Appeal 339/88, 428[4], at p. 539; Civil Appeal 565/85 [5], at p. 430). (See Civil Appeal 4956/90 Pazgas v. Gazit, IsrSC 46(4) 35).
- The conduct of the parties shows that they had a special relationship between them, as they were family members who had known each other for many years. As will be detailed in detail, the defendant did indeed share his business with the plaintiff and gave an explanation as to why he acted in this way. In this framework, he transferred significant sums of money to the plaintiff and his family. The aforesaid is not sufficient to meet the burden required of the plaintiff to prove his entitlement to receive the brokerage fees that he claims from the defendant, and that he is a partner in the diamond transaction for which he is entitled to pay 10% of the profits that he estimated at $16, 000, 000. It should be noted that the plaintiff's version was not consistent with the testimonies of other witnesses, including witnesses who were summoned to testify on his behalf; The plaintiff refrained from summoning a key witness who could have prima facie testified in his favor; His version of the manner in which the events occurred was even changed during the legal proceedings. The plaintiff relies in his testimony on the testimonies of family members, with the main source of their testimony being things that he himself presented to them.
- In addition, not only did the plaintiff not present written agreements to prove his claims, but he did not present any documents from which it is possible to learn about the aforesaid. Despite the fact that the relationship with the defendant ran aground in 2012, the plaintiff did not produce a single recording of the defendant from which there is any admission of his entitlement to receive the sums he claimed in the lawsuit. It would have been expected that at least demands or requests for payment would be documented in writing, in messages on mobile phones, etc. Moreover, the testimonies of the plaintiff's close family members regarding the demands for the money indicate that the plaintiff shared this matter with them. Under these circumstances, it would have been expected that correspondence and messages sent between them on this matter would be presented. Such things were not presented either.
The defendant's undertaking to pay brokerage fees to the plaintiff in the first transaction was not proven.