Civil Case (Haifa) 73247-09-24 Tzachi Tarazi v. Carmel Porkosh - part 2

And now to the merits of the judgment.

17. An action for the provision of accounts is usually conducted in two stages: in the first stage, the court is required to determine whether the plaintiff is indeed entitled to accounts from the defendant, by virtue of the existence of a special relationship between him and the defendant that justifies the provision of accounts, and that he has the prima facie right to claim the funds for which he wishes to receive accounts. If the court determines that the plaintiff is entitled to the accounts, the court issues an order for the provision of accounts and moves on to the second stage, in which the defendant is required to convince that the accounts provided are adequate. Only then will it determine whether he is obligated to pay according to the accounts.  There is an obligation to pass the first hurdle before receiving the accounts, i.e., the obligation to prove the right to the accounts.  A prerequisite for the provision of accounts is proof, even prima facie, that the plaintiff has a right to sue with respect to the funds for which he wishes to receive accounts.  (See for example: Civil Appeal Authority 7220/09 Saving Finances Ltd.    Doron Cohen (Nevo 24.11.2009)).
18. A claim for the provision of accounts must be based on the existence of a special relationship between the plaintiff and the defendant that justifies the provision of accounts. "Thus, for example, the right to receive accounts is recognized when there is a relationship of mission, authorization, partnership or trust between the parties, but this list is not closed" (see, for example, Civil Appeal 8266/11 UBM v. Maoz Travels Ltd.  et al.  (Nevo, August 16,2012)).
19. The essence of Tzachi's argument was that it was agreed in a trust agreement that Carmel would be the sole shareholder in the company, while Tzachi would be a "hidden partner" in half of the company's rights and would serve as an active manager, together with Carmel, all so that it would not be possible to foreclose Tzachi's rights / the company's bank account due to his debts to third parties. In other words, Tzachi based his demand for the provision of accounts by virtue of a trust agreement, alternatively a partnership.
20. Section 1 of the Trust Law, 5739-1979 (hereinafter: the "Trust Law") defines a trust as follows: "A trust is an affinity to an asset according to which a trustee is obligated to hold or act in it for the benefit of a beneficiary or for another purpose." This definition will teach us that the examination of trust is examined according to two components: one, the trustee's connection to the asset, and two, the trustee's obligation to act in the asset for the benefit of the beneficiary or for another purpose. "Thus, in order to identify whether a trust has been created, two components must be discussed: one - the trustee's connection to the property, and the second - the duty imposed on the trustee to hold or act in the property for the benefit of the beneficiary or for some other purpose." (Civil Appeal 2976/12 Zion Bar-El v. Haim Yehuda Alexander Kaufman (Nevo 23.11.2014)). 
21. Section 2 of the Trust Law defines how a trust is created, as follows: "A trust is created by law, by a contract with a trustee or by an endowment." Notwithstanding the aforesaid, these are not fixed and closed ways. It is sufficient for the trustee to perform acts and actions that will attest that he has assumed the fiduciary duty. The following is the wording of the ruling: "The position of the case law is that these three ways do not constitute a closed list for creating a trust.  The case law recognized a trust by virtue of a court judgment, and even "a constructive trust [...]." (See Civil Appeal 5955/09 The Receiver v.  Marsha Tauber Tov, 66(1) 532 (2011) and the references cited therein).  "A trust contract can even be drawn up by implication, since the acceptance of a contract offer by a trustee does not have to be by means of an explicit notice on his part.  It is sufficient for the trustee to perform the contract or to behave in a manner that attests to that he has accepted the fiduciary duty" (see, for example, LA 7033/15 Anonymous v.  Anonymous (Nevo 1.9.2016)).
22. The case law recognized the existence of an implied trust, which is created by virtue of the intention of the parties and is learned from their behavior and actions, so that it can be concluded that although an asset is registered in the name of one person, the rights belong to another person. Implied trust is usually recognized in family relationships, in view of increased closeness and trust. "This situation is more common among close family members, whose relationship was based on absolute trust and full cooperation" (see, for example, Family Appeal (Tel Aviv-Jaffa District) 7583-07-25 B.S.  v.  L.S.  (Nevo, February 12,2026).
23. A trust agreement, like any other contract, can be made orally, in writing or in conduct, and it is even possible to recognize an implied trust, "[...] At the same time, the person claiming the existence of an implied trust still has a heavy burden on the evidentiary level, as does the burden of persuasion" (see, for example, Civil Case (Shalom Tel Aviv) 44026-03-16 Ruderman Aharon Roni v. Benaim Sigalit and Violet (Nevo, January 15,2020).
24. As is well known, a company is a separate legal entity. Section 1 of the Companies Law defines a "share" as follows: "a consolidation of rights in the company that are determined by law and the articles of association". Therefore, a shareholder is not a direct owner of the company's assets and the shareholder's asset is the share itself and the rights accompanying it.  The main rights accompanying the ownership of a share are the right to participate and vote at the general meeting, the right to influence the appointment of directors and decisions under the authority of the general meeting, the right to receive a dividend if the company decides to distribute it, the right to receive its proportional share of the company's surplus after its liquidation and the discharge of its debts, as well as the rights to review and information in accordance with the law and the articles of association.  It should be emphasized that the rights may vary according to the type of share, the articles of association and the arrangements that apply to the company.  (See the example Civil Appeal Authority 4958/15 Clalit Health Services v.  Yariv Aharon (Nevo 23.10.2017)).
25. In addition to the above, Section 1 of the Companies Law defines an "officer" as follows: "General Manager, Chief Business Officer, Deputy General Manager, Deputy General Manager, any person who fulfills such a position in the Company even if their title is different, as well as a director, or a manager who is directly subordinate to the General Manager." Therefore, a manager in a company is a person who is in charge of the management of the company or holds a managerial position in it.
26. Ownership of a share and management of a company are different classes. A company manager acts within the framework of his managerial role and makes decisions and performs actions for the company. A shareholder holds the share and its accompanying rights.  A shareholder is not necessarily a manager, and a manager is not necessarily a shareholder.  A person may be a shareholder without managing the company, while on the other hand, a person may manage the company, serve as an officer, or work in it without being a shareholder.  Mere involvement in management, working in the company, or receiving a salary does not in itself confer the rights deriving from the share.
27. Since the claim also raised a claim regarding partnership, I found it appropriate to bring the following lines as well. "[...] There is no normative corporate duality in our system. Each corporate framework excludes the other.  A corporation cannot be a partnership and a company at the same time.  [...] Conceptually, therefore, no partnership and a company can coexist.  Ostensibly, the existence of a company drops the ground under the argument of partnership" (Civil Appeal 1286/90 Bank Hapoalim Ltd.    Vered Clothing Ltd., IsrSC 48(5) 799 (1994)).  It should be noted that notwithstanding the aforesaid, over the years exceptions to this rule have been recognized, and in some cases it has been determined that a partnership can exist even when a different form of incorporation has been chosen, but at the same time it was determined that this decision will be made sparingly and not easily.  As it is written: "[...] The rule is that a form of incorporation that is not a partnership will negate the existence of a legal partnership between the parties.  However, in exceptional cases, for example when there are family members and there is a restriction on the transfer of ownership of shares, it will be possible to recognize the existence of a partnership relationship between shareholders in the company, when the burden is on the person claiming the existence of a partnership" (Civil Case (Tel Aviv District) 62482-12-19 Toby Peretz v.  Adi Leibowitz (Nevo 18.3.2025)), and also: "It is not superfluous to reiterate that this is not the usual case and that, as a rule, It is not easy for the court to classify a company as a quasi-partnership" (Civil Appeal 8712/13 Amir Adler v.  Shai Livnat (Nevo, September 1,2015).
28. There is no doubt that Tzachi and Carmel were partners in the partnership - 50% each. This partnership ended and the parties saw fit to continue operating together in the framework of a limited company. The tax invoice presented by the partnership to the company in the amount of ILS 198,000 (ILS 170,000 excluding VAT) for the sale of equipment, dated March 25,2021, attests to an accounting separation between the legal entities.  This is the Rubicon River.  The transition from activity within the framework of a partnership to the framework of a limited liability company cannot be ignored.  Carmel was defined as the owner of 100% of the company's shares and was even defined as a sole director thereof.  Tzachi is not mentioned in the registry at all. 
29. 00The registration of shareholders in the Registrar of Companies Registry constitutes prima facie evidence of the correctness of its contents, this is learned by virtue of section 133(a) and section 176 of the Companies Law, 5759-1999 (hereinafter: the "Companies Law"). Indeed, this evidence can be contradicted, however, a mere claim is not enough. Anyone who claims that the registration in the Registrar of Companies does not reflect the true ownership of the company, is required to present real evidence and bear a significant and heavy burden of proof.  This standard is intended to protect commercial certainty and to incentivize rights holders to ensure correct and accurate registration.

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30. and as it has been written in the past: "[...] The Register of Shareholders shall be prima facie evidence of the correctness of what is recorded therein" (section 133(a) of the Companies Law [...]). Prima facie evidence, as its name implies. It can be contradicted.  However, it imposes on the defendants the burden of doing so.  This is not a trivial burden, for if we are excessively lenient in this matter, there will be little value for the Registry, nor will there be much incentive for the rights holders in the company to ensure a correct and proper registration of their map of rights.  A judicial policy that seeks to promote commercial certainty justifies imposing a significant burden on those seeking to overcome the Registry.  It is always possible to raise such and other claims of ownership of shares in contravention of the Registry.  It is easy to raise claims, but the task of proving them cannot be a trivial matter.  (Civil Case (Tel Aviv District) 19412-11-18 Danny Eitan v.  Idan Avraham [Nevo] (March 8,2020)).
31. And also: "The first warning obligates us to give considerable weight to the registration of the company's shares. Section 133(a) of the Companies Law, 5759-1999 states that "the shareholders' register shall be prima facie evidence of the correctness of what is recorded therein". Hence, claims seeking to deviate from the registry must be carefully examined, since we must, as a legal system, encourage the orderly registration of agreements in relation to shares, real estate rights, trusts, etc.  Orderly registration in advance saves disputes and litigation retroactively (and this case will prove it).  It increases certainty and allows reliance.  Therefore, the burden imposed on the applicant to deviate from the registration, on the grounds of contradictory oral agreements, is heavy." (Family Appeal (Tel Aviv-Jaffa District) 63994-09-24 Anonymous v.  Anonymous (Nevo 14.9.2025)).
32. The starting point in this case is that which is registered with the Registrar of Companies, which testifies that Carmel is the holder of all the shares of the company. This starting point continues towards the second point, which is that the burden of contradicting what is registered in the Companies Register is heavy and significant, both because of its prima facie evidentiary power and because of a proper judicial policy that is intended to promote commercial certainty. These two points are joined by a third point, which is that proving a claim of a trust agreement that was made orally, alternatively implicitly, requires meeting a significant burden of proof.
33. My impression from the totality of the evidence and testimonies is that the parties had a very close relationship. Not only were they partners in the framework of the Parsley Partnership prior to the incorporation of the Radish Company, which is the company that is the subject of the lawsuit, they also managed the company jointly with the employees and suppliers, received the same salary, rented similar vehicles in leasing for each of them, were both exposed to expenses and income, and it seems to me that Tzachi proved that he was a manager in the company and not just a "simple employee". At the same time, I am of the opinion that Tzachi did not meet the increased burden of proof imposed on him to prove that he is a shareholder in a company whose shares are registered in the name of Carmel, and he did not meet the burden of proof with respect to a (hidden) trust agreement - the main cause of action.
34. There is no dispute that Tzachi did not present a written document that could have attested to a hidden trust agreement between him and Carmel in relation to the company's shares. There is no dispute that Tzachi did not present any other written or oral agreements (recording) between him and Carmel, and/or clear testimony from an external witness, which had the power to erode the registration of shareholders in the company and/or to indicate that "there was a hidden trust agreement" in relation to the shares.
35. As for CPA Karsanti, who handled the financial affairs of the parties over the years, both of the partnership that was joint with Tzachi and Carmel, and of the Radish company that was established afterwards, Tzachi claimed that before opening the company, he and Carmel consulted with CPA Karsenty regarding its establishment, for fear that foreclosures would be imposed on the partnership's expense. In his testimony, CPA Karsenty admitted that he had indeed spoken to him about the fact that the parties were looking for a solution and that Carmel would be the registered owner of the company instead of the partnership as a result of Tzachi's foreclosure problems. And this is how it was stated: "[...] Q: You say that Tzachi spoke to you that a company should be established, A: He wanted some solution, yes, yes.  Q: To find a solution to the problem they have, A: Yes.  Q: And Carmel also talked to you about starting a company, so what did they talk to you about starting a company? Who would be the owner of a company and what would the company be? A: They talked to me that Carmel would be the owner, but what was agreed between them? I have no idea, that's what they talked to me S: I mean, A: And that's what actually happened.  [...]".  (Prot.  of 07.01.2026, p.  8, paras.  17-26).
36. Rather, plans are separate and implemented. CPA Karsanti testified emphatically that he never recommended or advised the parties to establish a company in the structure of a hidden trust, because he was never aware of such an arrangement, and that if he had known of the existence of a trust on the part of Carmel for Tzachi, he would have been legally obligated to report it to the tax authorities and to mention this in the financial statements. As far as he is concerned, as a professional, Carmel is the sole shareholder and director of the company, and Tzachi was never presented to him as having any proprietary rights.  And this is how it was stated: "[...] Q: That is, you did not propose to them, listen, establish a company, A: Yes.  Q: And he will be the owner of the company, and Tzachi will be a partner, but a quiet partner, A: I don't give such advice, Q: (not clear) A: And if I had advice, it should have been recorded somewhere and I had to report it, even a partner who is quiet should report, there is trust, to write it in the reports somewhere where there is a mission or a trust or something, it didn't happen as far as I'm concerned.  [...]" (  of 07.01.2026, p.  8, paras.  27-34).  And also: "[...] A: And if an agreement or some protocol or something, Q: You should have reported.  A: That they are partners and they are 50,50 or 20, or I don't know what, I would have reported it as necessary.  [...]" (Prot.  of 07.01.2026, p.  9, paras.  3-6).  And also: "[...] A: I acted according to the information that I have.  Q: You said, OK, I don't have a written document, I don't pass it on? A: I didn't get any document, nothing, they didn't talk to me about disagreements between them or anything, Q: They never talked to you that they were partners 50 50? A: They didn't talk to me, they didn't talk to me.  Q: They didn't talk? A: No. Q: And you say that 10,000,000 percent? A: I say 10,000,000 percent, yes.  [...]" (Prot.  of 07.01.2026, p.  9, paras.  22-30).
37. Another claim made by Tzachi was that CPA Karsanti referred to him as the owner of the company, and if not, why did he send him a letter "personally" informing him of the increase in the fees that his office would collect from "Radish Investments Ltd" (P/3). CPA Karsanti did not know how to provide an unequivocal answer on the matter. He admitted that he had indeed sent the said letter, but noted that he had indeed dealt with Tzachi on "ongoing matters" (Prot.  of 07.01.2026, p.  14, paras.  14-21).  This argument indeed testifies that Tzachi was not a "simple employee" in the company, but rather a figure with management abilities in the company.  Such a letter was not sent casually to a regular employee.  At the same time, this letter does not indicate a trust agreement between Carmel and Tzachi, or alternatively, that Carmel and Tzachi actually saw themselves as equal owners of rights in the company.
38. Indeed, the testimony of the delivery manager (Or Zisberg) supports Tzachi's claim that he is the co-owner of the company. This testified that he saw Tzachi as the owner of the business and that he and Carmel were always presented as partners, as follows: "[...] A: But as far as I'm concerned, once again, I love Carmel and I have no problem with him, but unequivocally I always understood that Tzachi is the owner of the business, I don't know in terms of registrations and so on, Tzachi as far as I'm concerned was the owner of the business together with Carmel, they were always partners in meetings, even when we met, even in the presence of [...]." (Prot. of December 1,2025, p.  13, paras.  24-27).
39. On the other hand, at the level of payment of the funds, contractual agreements and internal conduct between Tzachi and Carmel, which is the essential and main one in his case, since it might have been possible to draw conclusions regarding the intentions of the parties among themselves, the delivery manager was unable to make a clear voice. And this is how it was stated: "[...] Q: Tell me, you say that checks you don't know who signed them? A: Yes. Q: You have no idea, you say that you didn't sign an agreement with them.  A: Right.  Q: Right.  You know how to say if you've heard, let's say so, if you've ever seen a document or something, what is the reference in the conduct that you know Tzachi is the owner? A: It's not my business, it's not my business, it's not my business.  Q: Was there a time when you asked Tzachi to sign something, and you told him Tzachi to come and sign? A: Again, it's none of my business, I explained.  Q: No, no, non-operational, I'm talking to you financially, you dealt with money.  A: I explained to you again, the initial acquaintance with Carmel was as if he was a partner, every such conversation and then it was with Tzachi as if he were a partner, beyond that I don't know in terms of documents, I don't have the right to know, you ask me something that doesn't make sense, I don't think anyone can know that.  [...]" (Prot.  of December 01,2025, pp.  15-16, paras.  1-27).
40. In this matter (with regard to the claims that Carmel presented to employees and/or suppliers that Tzachi is a "partner"), I have found it necessary to note that I cannot attribute significant evidentiary weight to this matter in relation to the relief sought. I will proceed from the assumption, for the purpose of the discussion, that Carmel presented Tzachi to third parties as a partner, but the statement of these in and of itself does not meet the threshold required to infer the existence of an existing trust agreement between Carmel and Tzachi, or alternatively to indicate a partnership, and hence Tzachi's rights in the company's shares. It seems to me that in an intra-business relationship, a manager (whether he is a shareholder or not) may present a person close to him who works with him, as his partner in the business sense, for the purposes of the ongoing operation and management of the business.  The use of this routine language ("this is my partner") does not establish legal rights between the parties themselves, and certainly when we are dealing with property rights.  Such general statements, in the absence of direct evidence regarding consent to hold the trust, rights in shares, the division of profits and losses, or joint bearing of rights and debts, cannot serve as a substitute for proving the alleged legal consent and cannot receive much weight for the purpose of proving the basic argument at the heart of the claim.
41. The testimony of the witness Shalom Ben Shimon leaned broadly towards Carmel's claims. At the same time, I took into account that that witness was still employed as an employee of Carmel and that the signs of truth did not testify that this was a witness with a high level of reliability. One way or another, this testimony did not help Tzachi's claims in the slightest.
42. With regard to the exchange of the many WhatsApp messages exchanged between Tzachi and Carmel over the years, which Tzachi presented on his behalf, which deal with regular reports on income, expenses, purchases of supplies and equipment, finances and even profits, these indeed attest to the joint, close and day-to-day management of the company by both of them, and hence Tzachi did indeed prove that the company was operated and managed jointly by him and Carmel. As I noted above, it is clear that this was not a simple employee-employer relationship, i.e., merely "giving instructions and executing". This is also compounded by the evidence regarding the identical salary paid to both of them by the company and by the employee of the vehicles that were rented for leasing.
43. On the other hand, the WhatsApp messages and the additional evidence that was presented (the WhatsApp messages mentioned above, the logo of the Celtia tattooed on Tzachi's arm, a copy of the pages calculating potential profits that Tzachi calculated, menus that Tzachi presented that included salad ingredients, the claim of joint management, the same salary, the rental of the same car in Leasing , the claim regarding the presentation of Tzachi and Carmel as partners, the witnesses who came to testify on Tzachi's behalf, etc.), are only specific evidence, which does not establish the degree of proof required for ownership of the company's shares, or alternatively, the claim of a partnership when Tzachi admits to a conscious choice that the incorporation was made by way of a limited company, with all that this entails. Moreover, evidence of this kind is by nature ambiguous and can be interpreted here and there. Thus, for example, identical salary and vehicle may result from equality in positions, from a business agreement, or as part of an increased consideration for investments and past actions.  Joint management of the business, or conversations in which the parties treat each other as equals or conduct themselves as if they were two owners of equal rights (a topic I have already elaborated on above), may reflect the operational relationship between the parties, the way in which labor is divided between them, or simply the way they chose to conduct themselves or with customers, suppliers, and employees in the routine of the business.  It seems to me that it is not enough to gather a number of WhatsApp messages, messages that were probably taken from a huge variety of messages and exchanges that took place over many years, messages that do not include clear and conclusive statements regarding a trust agreement and/or the secret holding of shares by Carmel for Tzachi, in order to contradict what is registered in the Companies Register.
44. Tzachi did not present that he had the power and authority to act on behalf of the company in the bank, that he had the power to make payments, that he had the power to take credit, loans and external financing, that he had signed substantial contracts with suppliers, etc. But even if he had the power to do so, these were only indications, since this power can also be given to senior employees. And as stated, these were not brought before me either.
45. In other words, with regard to the power and authority reserved for shareholders only, Tzachi did not prove that he made decisions regarding the distribution of profits or the withdrawal of dividends, or alternatively, that he demanded (and agreed) from Carmel the distribution of profits or dividends by virtue of that hidden agreement, because he could have prevented strategic decisions regarding the company, etc.
46. Tzachi's evidence does not present a clear and unequivocal picture of his rights to ownership of the company's shares by virtue of a hidden trust agreement, but rather leaves question marks as to their very existence, nature and scope. Where a plaintiff seeks to remove proprietary rights from a defendant, by virtue of a hidden and undocumented consent, it is only clear that the evidentiary ambiguity is not supposed to work in his favor. The opposite is true.  The more the evidentiary picture remains vague and the more the evidence allows for more than one interpretation, the weaker the plaintiff's ability to meet the burden imposed on him.  It should be said from now on that the doubt cannot serve as a substitute for proof, and the evidentiary deficiency cannot be filled by virtue of conjecture.  This is all the more valid when we are dealing with a claim that requires meeting an evidentiary burden that is defined according to case law as "heavy" and "significant".
47. In addition, Tzachi is a person who, according to his version, was the owner of a number of limited companies, or alternatively has an affiliation as an officer (director and/or CEO), even before the company that is the subject of the action was registered with the Registrar of Companies, including the cola company A.Y. Nesher Ltd. and Arbiv Concept Express Ltd.  It was proven that Tzachi knew how to make changes in other companies, knew how to make changes in the holding of shares in them, etc.  I did not see that Tzachi was a layman on the subject, lacking legal and/or business understanding.  Therefore, I wondered why Tzachi did not act to anchor his alleged rights, alternatively the implicit agreements between him and Carmel, in a positive manner.
48. It should be noted that it should not be forgotten that the parties are not relatives. In addition, Tzachi himself testified that at the time of the partnership's existence, foreclosures were imposed on the partnership's bank account (approximately ILS 47,000), and hence it is clear that there was an understandable concern on both sides of economic harm due to Tzachi's debts to third parties. In this situation, I am not persuaded that the two parties felt a heightened relationship of trust with each other in a harmonious and mutually beneficial manner.
49. I believed Tzachi's heart when he stood before me, laid out his arguments and spoke his words. At the same time, the parties have come together to this day, in an Israeli court. A basic rule in our legal system is that one who brings out the evidence from his friend, a rule that, unfortunately for Tzachi, is in compliance with his duty, a duty that he did not fulfill.
50. It seems to me that the affair illustrates the significant legal risk involved in leaving agreements relating to ownership in the company without a clear evidentiary anchor. Where two people maintain a business partnership between them, and later dissolve it, and then a limited liability company is established that is intended to continue the joint business activity, then oral understandings or mutual assumptions as to the identity of the rights holders in the company are not sufficient. The parties must explicitly and documentably regulate the manner in which ownership is divided, including the identity of the shareholders, their rights and holdings, and if necessary, also the existence of a trust or undertaking to hold shares for another party.  Failure to anchor as aforesaid creates a serious legal risk.  As time passes, and the documents, evidence, and memories dwindle, one of the parties may deny the agreements that existed between the parties in the first place, while the other party will be required to prove ownership that is not reflected in the Registrar of Companies or in a written document.  In such a situation, the evidentiary difficulty may decide the legal outcome, even if from a business and substantive point of view, the parties saw themselves from the outset as equal partners and owners of identical rights in the company.  Hence the importance of formal anchoring, and at least written anchoring.  Specific evidence may support a certain version, but its weight by its nature is limited, especially when it is not unequivocal and alternative explanations can be attributed to it.  It is difficult to base a proprietary right on them alone, and it is certainly difficult to see them as an evidentiary substitute for registering in the shareholders' register and in the articles of incorporation.
51. This is precisely the risk that a right holder is required to prevent in advance. A person who believes that he owns half of the company's shares, by virtue of a trust agreement, is required to ensure that the substantive consent is clearly expressed in the appropriate documents and records, whether formal or otherwise. Otherwise, in a time of dispute, and in retrospect, he may find himself trying to persuade from a series of partial and ambiguous indications, in the face of formal, clear and objective evidence in the form of the Registrar of Companies.  At the end of the day, the Registrar of Companies is intended, inter alia, to create certainty as to the identity of the rights holders in the company.  Anyone who chooses not to regulate his rights in the appropriate documents and records assumes a significant risk that in the event of a future dispute, the joint business conduct or circumstantial evidence will not be sufficient to prove the claimed right.  This is a risk that can and should be prevented in advance by means of a clear, written and documented legal arrangement.  And if informal, then at least, it is hidden.
52. Even though some of Tzachi's evidence and arguments were reasonable, they do not reverse the situation. A shareholder who holds his shares and this finds proper reflection and anchoring in the Registrar of Companies should not be required afterwards, from time to time, to anchor his proprietary rights in the shares again, as a means of security and fear of future claims that may arise against him and his rights. On the contrary.  Where a person wishes to attribute to himself a proprietary right in shares that are fully registered under a different name, and thus in effect dilute the rights of the registered owner, the burden of anchoring his claim with clear and convincing evidence, which indicates the existence of a concrete agreement to hold shares for him, is on him.  It is not enough to present circumstantial evidence, statements or behaviors that can reconcile the claim of trust, otherwise the proprietary certainty will be impaired, and the legal registry will lose its practical meaning.  The court cannot serve as a substitute for the responsible conduct of rights holders.  Every person who wishes to hold a significant proprietary right has the responsibility to anchor it in a clear and orderly manner, and the judicial process should not be turned into a substitute for the lawful enshrining of rights.
53. Before concluding, even though Tzachi did not meet the burden of proof regarding a trust agreement, in writing, orally or implicitly, even if he had met this burden, he could have faced an additional hurdle, which is reflected in section 30 of the Contracts (General Part) Law, 5733-1973, which instructs as follows: "A contract whose conclusion, content or purpose are illegal, immoral or contrary to public policy is void." Without setting any headlines, it seems to me that there is a difficulty in approaching the courts, when the alleged beneficiary claims that the trust agreement by virtue of which he bases his claim is intended to conceal property from creditors and prevent foreclosures. This argument amounts to an admission of proof of the improper purpose of the agreement, which may and may be defined as null and void by virtue of section 30 of the aforementioned Contracts Law. In other words, with regard to Tzachi's argument that the incorporation as a limited liability company is intended to avoid creditors' foreclosures, the creation of a corporate structure whose purpose is to conceal the rights of a debtor through a hidden partner, in order to keep assets out of the reach of his creditors, is certainly liable to act in the course of time to act specifically to the debtor's own obligation.
54. Between me and me, I was concerned that my judgment would deprive Tzachi of his ability to demand the funds he claimed to have invested in the partnership and which he did not receive (Tzachi's claim that he was entitled to indemnification and/or compensation for the investment in the partnership with Carmel in the sum of ILS 235,000 that was not returned to him upon the sale of the partnership to the company (paragraph 19.4 of the statement of claim)).
55. On re-examination, I found that this component was addressed in the judgment given in labor dispute 39789-07-24.

And to be precise, the statement of claim in labor dispute 39789-07-24, included the following requested relief: