Civil Appeal Authority (Haifa) 30353-06-26 Appeal Financial Case – Supreme Court Masha Naor v. Interactive Brokers LLS - part 5

It was also argued that the trial court attributed decisive weight to the absence of a formal corporate relationship (such as a parent-subsidiary company), while ignoring Microsoft's ruling, which states that the test is substantive-functional of "the same matter" and not a formal test of the ownership structure or manner of incorporation.

13. It was argued that the trial court ignored the email message dated 04.08.2023 from respondent 1, which referred the applicant to the direct handling of respondent 2 as the competent authority in her case. This evidence fundamentally changes the factual basis on which the previous determinations were based.
14. It was further argued that the determination of the trial court that the applicant erred in her interpretation that the invention under Regulation 163(c) is "for reasons of convenience only" ignores the purpose of the regulation - to ease and remove procedural barriers vis-à-vis foreign corporations in the era of globalization, as clarified in the Supreme Court's ruling in the Globalkov case.
15. It was argued that the testimonies and evidence, including the statement of respondent 1 and the confessions of the CEO of respondent 2, show that respondent 2 constitutes an integral part of respondent 1's activity in Israel, markets and promotes its services, accompanies customers, provides support services and assists in operations relating to the trading account, while generating direct profit. This relationship satisfies the tests of "same interest" and "constructive presence."

1. It was also argued that the decision of the trial court violates the applicant's right of access to the courts, since it obligates the applicant to make an invention outside the scope and imposes a heavy and unreasonable burden on it, and is inconsistent with the principles of international private law in the era of globalization, when the Israeli forum is the appropriate forum in view of the relevant connections.
2. Finally, it was argued that the respondents created a procedural mechanism that allows them to enjoy extensive business activity in Israel (Hebrew service, commission collection, ongoing contact), while avoiding legal exposure in the Israeli forum and choosing not to register as a foreign company.  This conduct, and in particular the change in the position of respondent No. 2 regarding the withdrawal of funds after a declaration in an affidavit, as provided in the framework of a civil lawsuit in a fast-track hearing 30923-10-22 [Nevo] in which the Applicant accepted the court's recommendation to delete her claim on the basis of this statement, constitutes an abuse of a corporate structure for the purpose of blocking access to the courts.

Summary of Respondent 2's Arguments

18. Respondent No. 2 argues that the application should be deleted or rejected, both due to material procedural defects and on its merits. It was argued that the application exceeded the permitted 9-page quota, and was filed without an affidavit, even though it included many factual claims.

On the merits of the matter, it was argued that the application does not point to a legal error in the decision of the trial court, but rather seeks to give preference to the Applicant's interpretation of the evidence and the testimony of the Respondent's Director General over the findings that were determined.  The trial court held a hearing, heard witnesses and examined the evidence and arguments, and ruled on the issue of estoppel and the question of the fulfillment of the conditions of Regulation 163(c) of the Civil Procedure Regulations.  The Applicant did not point to evidence that the court ignored, but rather wishes to give different weight to the evidence that was examined.

19. It was argued that the Applicant's claim that the Trial Court did not act in accordance with the instructions of the previous appellate court is inconsistent with the course of the proceeding; the Trial Court held a hearing, heard the Applicant and the Respondent's CEO, and examined the claim of estoppel and then the question of the invention on its merits in accordance with Regulation 163(c). The fact that he reached the same result does not mean that he did not follow the instructions.  The trial court ruled that the applicant was silenced from once again raising the argument that respondent 2 serves as respondent 1's representative in Israel for the purpose of producing court documents, based on the sequence of previous proceedings between the parties.
20. Respondent No. 2 argues that the nature of the relationship has not been proven to justify recognizing it as a "representative" of Respondent No. 1 for the purpose of invention, since the relationship between them is purely technical and service-based, and there are no relations of ownership or control. Respondent 2 does not make decisions for Respondent 1, does not conduct its activities in Israel and is not authorized to represent it.  Respondent 2's activity is limited to providing support services and technical customer service to some of Respondent 1's customers, and this activity does not indicate that Respondent 2 is acting on behalf of Respondent 1 in a manner that justifies attributing to it a constructive presence in Israel.  Respondent 1 is the one who operates the trading platform and handles the financial and regulatory matters.
21. It was further argued that no ground was presented for intervention in the determination that the claim does not relate to "the same matter" since the claim deals with decisions made by respondent 1 with respect to the applicant's account, whereas respondent 2 is not involved in these substantive decisions. The Applicant wishes to define the term "the same matter" at a level of too broad abstraction.

It was argued that the evidence on which the Applicant relied, such as the email message and the testimonies of the Director General of Respondent 2, do not establish representation.  Referring a client to receive service from a local entity is not equivalent to authorizing that entity to manage an account, hold funds, or represent the foreign corporation in a legal proceeding.

22. It was further argued that the judgment in the Microsoft case does not help the Applicant, since in that case a material connection was examined between the local company's activity and the products and services that were at the core of the claim. In our case, the claim does not deal with the technical support services of respondent 2, but rather with substantive decisions relating to the applicant's claim, which are under the control of respondent 1 and are outside the scope of respondent 2's activity and authority.

It was also argued that general arguments regarding the right of access to the courts and good faith do not establish grounds for intervention, and cannot replace the proof of the conditions set forth in Regulation 163(c).  The decision of the trial court does not prevent the applicant from filing her claim or clarifying it on its merits, but rather determines that it is not possible to provide the statement of claim to respondent 1 through respondent 2.

23. 00Respondent 2 does not deny the business relationship or the services it provides, but rather insists on the distinction between providing support services to customers and representing Respondent 1 in connection with its affairs in Israel. Insisting on this distinction does not amount to abuse of a legal proceeding.  Respondent No. 2 consistently insisted throughout the proceedings that it has no access to the clients' funds, has no authority to make decisions in their matter, and is not involved in compliance decisions, restriction of accounts or other operational decisions.

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24. In my decision of June 17,2026, I ordered that the application for leave to appeal be served to respondent 1 through respondent 2, without this expressing a position on the subject in dispute. Respondent 1 did not submit a reply on its behalf.

Discussion

25. After reviewing the application for leave to appeal and the response of respondent No. 2, I have reached the conclusion that the application for leave to appeal should be considered as if permission had been granted, and an appeal was filed. I have also reached the conclusion that the appeal should be accepted in the sense that it should be clarified that respondent 2 is a representative on behalf of respondent 1, who represents it regularly in connection with its affairs in Israel, and therefore the invention of the statement of claim for respondent 2 is an invention by means of a representative of respondent 1.  The following are my reasons.

1. The explicit determination of the Honorable Justice Ziegler in the judgment given in Civil Appeal Authority 30353-06-26 [Nevo], which was submitted against the decision of the trial court of December 1,2024, necessitated a decision on the basis of the factual basis that was brought before the trial court.  In her judgment, the Honorable Justice Ziegler noted that "a review of the arguments of the parties in this application and the proceedings that took place before the trial court shows that a great deal of factual data was raised related to the conduct between the respondents, the nature of the relationship between them and its meaning for the purpose of the term 'representative' and how the interface between the two respondents works (for example: the email that the applicant received from respondent 1, a presentation on the website of respondent 2, etc.).  It is difficult to decide the matter without factual clarification, and the decision of the trial court does not directly address the arguments of the parties and the documents to which they referred, in a way that no real and reasoned decision was made as to the nature of the relationship between the two respondents and whether they meet the test of case law."
2. Admittedly, the trial court also discussed the evidence that was brought before it during the hearing that took place after the judgment was rendered in the appeal, and on the basis of which it reached the conclusion that the conditions set out in Regulation 163(c) were not met, but did so, as it put it, "beyond necessity" and based the main part of its decision on its conclusion regarding the existence of a estoppel following the decision of the Honorable Justice Baum in a civil suit in a quick hearing 30923-10-22 [Nevo] and to a certain extent also on the settlement agreement that received the validity of a judgment in another previous proceeding (Civil Case (Tel Aviv District) 48651-03-21) [Nevo].

28. As is well known, in order for a company estoppel to exist, four cumulative conditions must be met:

The company that arises in each of the litigations is the same company, with its legal and factual components; litigation took place between the parties in all matters relating to this company; the litigation ended with an explicit or implicit decision and a positive finding was made about it; the decision in the company was essential for the purpose of the first judgment [Prof.  Nina Salzman, Ma'aseh Beit Din in Civil Proceedings (1991), 141; Civil Appeal 4087/04 Gura v.  Bank Leumi Le-Israel Ltd.  [Nevo] (September 8,2005)].