Respondent's Response to the Appeal
- Threshold Argument
- At the beginning of his response to the appeal, the respondent made a threshold argument that the appeal should be dismissed in limine in light of the shameful claims raised by the appellants against the trial panel. According to the respondent, the appellants acted in contravention of Regulation 32 of the Civil Procedure Regulations, 5779-2018 (hereinafter: the Civil Procedure Regulations), which instructs that a statement of pleadings be drafted in a manner that does not derogate or lash. Therefore, the Respondent petitioned that the authority under Regulations 41(a)(4) and 147(a) of the Civil Procedure Regulations was exercised and that the appeal be dismissed for that reason alone.
- Arguments on the merits of the matter
- On the merits of the matter, the respondent argued that the judgment of the District Court was detailed and reasoned and based on findings of fact, in which it is not the way of the appellate court to intervene, except in exceptional cases, in which the present case does not relate to the public.
According to the respondent, there is no room to interfere with the trial court's determination that the non-compete agreement with Kahane was not an authentic agreement and that its main purpose was to reduce Kahane's tax liability.
According to the respondent, this conclusion arises from the fact that the acquiring company had no interest in paying Kahane for his personal undertaking not to compete with it, while the non-competition clause in the activity purchase agreement with Eisenberg applied to any party on its behalf, including Kahane. In this context, the respondent emphasized that Kahane had signed the letter of personal guarantee to secure Eisenberg's undertaking, including its undertaking not to compete with the acquiring company, and that the acquiring company had at its disposal various sanctions against Eisenberg and against Kahane to the extent that the non-competition clause was breached. Therefore, according to the respondent, it cannot be accepted that the acquiring company paid an additional consideration of 40% of the value of the entire transaction for Kahane's undertaking in the non-compete agreement.