|
1 Eliezer Davidson
2 Amir Davidson
vs
Eliezer Orenstein
This document was translated by computer software without human contact, so there may be significant errors in translation: please do not rely on the translation without obtaining appropriate advice with a certified Israeli advocate / lawyer
Supreme Court sitting as - civil appeals court
[5.12.91]
Before Judges A. Barak, S. Levin, T. Light
Companies Ordinance [New Version], תשמ"ג 1983, NK 764, Sections 235, 235 (a), 257 (5).
Mini - Ratio:
* Companies - relief in case of deprivation - conditions Lntinto
* Companies - dismantling - of the justice and integrity
They undermine a father and son, who own 50% of its shares. Although respondent has 50% of the shares in the company. The only deal is the company's - coffee, held boarders protected and provide five - ten families. Since the retirement of the appellant 1 (father) from his job due to his health, business is conducted by the respondent. Since his retirement Nacro relationship between the shareholders. Undermine applied for dismantling the company. Agreement of the parties were differences arbitrator decision, recommended the dissolution of leasing by the court. Respondent's request the court to require the county to purchase the shares undermine rejected. District Court, discussing the request for dissolution undermine society, ruled that the impasse created by the law does not conflict with the proper management of the business, but but disturbing undermine the rights of extraction; these rights can find Litvin through implementation of the provisions of the company, according to which must a shareholder who wishes to sell his shares, initially for sale to the rest Lhtzian shareholders and only then - conditions set forth policies - Lhtzian Sale market. Hence the appeal, revolved around the questions, if there is room to grant dissolution decree against the company, if the court would accept the arbitrator's recommendation to dismantle the company and if section 235 Companies Ordinance [New Version], תשמ"ג 1983, to influence the court's decision about dismantling.
The Supreme Court ruled: N.
A.. (1) There are no court may, for reasons of public interest, prescribe the provisions of the law regarding the dismantling of a (130 b).
(2) law, there may be a re-review it, because small companies reached a state of paralysis and stagnation, the court may grant a dissolution order "from the justice and integrity" as if it were a partnership, suppose that the connection between shareholders (like partners) created the expectation in their hearts trust each other, Ocshtzifiih dashed, every shareholder is entitled to cease the relationship - by the dissolution decree (the 136 - F).
(3) Even if the thesis, which states, the legal basis for the connection between the shareholders is a mere contracts, be determined, the special circumstances of the case Danan, owners Court anticipated the end of the connection by way of sale of their shares. Therefore, even if the said law thesis element, not the district court must (and perhaps not even permitted) to order the dismantling (and 130 - M).
(4) The issue in question should be reviewed after enactment of Section 235 Companies Ordinance [New Version] (130 M - 131 A).
At. (1) Speech discrimination "in section 235 Companies Ordinance [New Version] wide speech" minority oppression "(131 a - b).
(2) discrimination will be vulnerable whenever the legitimate expectations of the parties. Behavior is not even used the basis for removing the right to claim (131 B - C).
(3) company which is a kind of partnership is a legitimate expectation of the parties to joint management of the company. Therefore, behavior that harms this expectation may be the basis of prosecution for discrimination (131 C).
(4) ratio exists between the degree the court's willingness to accede to the request of dismantling and future way be interpreted Section 235 Companies Ordinance [New Version] (131 d).
Rulings - Dean of the Supreme Court mentioned: in
[1] AE 97/62 Hamra N. Palatin, et al, PD Tz 2.727
[2] AE 530/65 Eligolsoili v. Bank Hapoalim BM, et al, PD c. (2) .314
[3] AE 226/85 Shasha Securities and Investments Company Ltd v. Bank "foundations" Mortgage imprisoned Ltd. et al, PD Mb (1) .14
Rulings - English law mentioned: and
(. C.a). 530L.t 115 (1916) re Yenidje tobacco company limited [4]
. (. H.l). 492All E.r 2 [1972]. Ebrahimi v. Westbourne galleries, ltd [5]
Appealed the ruling - Dino District Court of Tel - Aviv - Jaffa (President A. Winograd) dated 11.4.89 Tel Aviv 1605/86. The appeal was rejected.
Y. Bertlr - named undermine;
S. Wiener - named respondent.
Stopped - Dean
Justice S. Levin N. .1 appeal this decision turned on the District Court of Tel - Aviv - Jaffa to reject a request to dismantle the company corona homes - Coffee Ltd. (hereinafter - the Company) on the basis of reason referred to in Article 257 (5) Companies Ordinance [text New], תשמ"ג - 1983 (hereinafter - command)
( "The court believes that oil is a society of justice and integrity dissolution").
Undermine - wishing they were father and son, who own 50% of its shares; Although respondent has 50% of the shares in the company. The only transaction of the Company is a - Coffee necessity 'Allenby 94
Tel - Aviv,
Protected boarders held a third party provider for five - ten families. Appellant - Father and Respondent are at an advanced age. First, it undermines the Respondent conducted an active business, but in 1983 the father retired from his job due to his health, and in fact continues the Respondent has run the business alone. Since retirement Nacro relationship between the shareholders. Filed on 10.6.86 seeking the liquidation request. On 30.7.86 the law was signed between the owners arbitration agreement, which transferred all their differences Lhcrato of retired Judge Sheila Isaac single arbitrator. Between the arbitrator's authority - it is said the agreement - he will be allowed to "recommend the dissolution of the (company - h 'to')". The agreement's validity was stopped - a lawyer, as it delayed all proceedings pending between the owners held accountable.
The switch can be ruled on 30.11.87; included a review of the relationship with the law, his conclusion was, further contacts among law has become impossible. Respondent's claim before the switch was, he may purchase the shares undermine under the provisions of Regulation 19 of the Regulations of the company. This regulation establishes a mechanism by which a shareholder must, seeking to sell his shares to others, first sale Lhtzian other shareholders and only then - under conditions prescribed in regulation - Lhtzian Sale market. The arbitrator rejected the argument in question stating, inter alia, the Respondent has not fulfilled the conditions of Regulation 19 Hdookniim and buy this "not idle the legal right of shareholders who take steps to dissolution of the company by the court steps to face the dissolution of the company ..." . After the arbitrator's attempts to reach a compromise failed, Dalit choice, recommended the dissolution of the company switch on - by the court.
Submitted a request to cancel the arbitrator ruled, and the court (decision dated 12.6.88) not consented to it.
Arbitrator's recommendation regarding the court, that "Gina's recommendation and set the court decides to dismantle the company please discuss ..."; about some other matters which the arbitrator decided not, been returned to the bag to complete. Decision - Dino decided to switch things supplementary question, referred to my husband's behavior and suggested the same opinion regarding validity of the first switch recommendation decision to dismantle the company. These matters will refer later in another decision.
Privately respondent actually petitioned the District Court charging undermine please buy the shares, and - on the basis of Article 235 of the Ordinance (um, 4397/88 Tel Aviv 64/88), but the request was denied: In the beginning, it was said decision, respondent is not apparent deprived, but lost to undermine respondent. "I do not think" - so it says - "that could deprive discriminatory according to Section 235 and request
(Ordinance) to buy the shares deprived "; However, the court chose not to decide a final question, who discriminatory and deprived, asked that before but apparently Ntlbna; Second, it is said in the decision, even applies to our case Section 235 of the Ordinance, no place to Settings, if There is another way, less extreme, to order the proper way to company management, if not properly administering the current absence of sufficient evidence in this matter there was no room to accede to the request for this too.
.2 Decisions about the appeal, given the month of liquidation case discussion, the President cited scholar
The factual allegations raised by the request element undermine decomposition. They argued, inter alia, respondent deposited the funds in his account private company that he refrains from having meetings managers, because he refuses to comply with the request to correct the company regulations, that he must be the business for a relative and refuses to undermine the insurance information, because he employs his sons in the business without permission undermine, that he alone determines the employee's salary on behalf undermine society that does not maintain a proper company accounts, business investment investor who employs their consent without their consent. On the other hand the President a survey respondent claims: and do not undermine any interest in business and their destination only to sell their shares, the controversy surrounding her grandfather only cost; Respondent was always willing to purchase the shares of undermine the mechanism by regulations set out in Article 19 but the company did not undermine Abu follow this ; undermine disturb respondent engaged in managing.
Regarding the detailed arguments of undermine, the Respondent argued, no change in business since retired from the appellant - the father of his work that undermine receive their share in profits that the business funds deposited in a bank account in the name of respondent appellant - the Father, that's not true that he refrains from having meetings managers and demand change regulations without foundation. Another respondent argued that the insurance in relation held even in the period worked appellant - the father in the business and also undermine themselves insured by the same insurance agent; All information on business - he claimed the respondent --
Standing of Laionm undermine any time; son of the respondent is employed in the business since 1980, during the joint management with undermine; Indeed, according to the contract between the owners were due to respondent court appellant - the father to participate in business together and now all the burden falls on the respondent Nablus.
More Aizcr District Court the respondent's contention that the business leased Ostzo dissolution may lead to loss of rights in the company's lease.
President's conclusion was also learned - switch conclusion - the continued relationship between owners Court is impossible and unwanted; However, he stated that "the dissolution of the partnership" is not necessarily - the dismantling of the company. He noted the references that were brought before him on - by undermine the current case that unlike those cases, not undermine - their consent - participants in managing business, managing the business on - by the Respondent as a business practice, good potential exists. On the basis of affidavits that were before the District Court and the arbitrator ruled Bible did not find the president learned undermine the basis for most claims against the respondent. The President went on and wrote in his decision on this matter: F "Fshita when (undermine) do not participate in managing the business practice that they know everything going on it; but the question is not if they know unless they can know and let them know, so long as Respondent was not persuaded hiding information from them or works affecting the Company or the rights of (undermine) - I do not think Sycamore (undermine) cause on this basis "(reference in parentheses: in my - that 'to').
The learned President's statement was therefore deadlock created between the law does not conflict with the proper management of the business, but but disturbing undermine the rights of extraction and that these rights can find Litvin through implementation of the provisions of Regulation 19 of the Regulations of the company. The district court summarized its conclusions as follows: and
"Court is six to dismantle dismantling companies is only a last resort when all other efforts have been thwarted and successful. Until I was convinced that through the sale of shares is not possible, I will give my hand to eliminate a good business, profitable Osolbnti breadwinner in many families with dignity - just because one side does not want another management ".
.3 After the verdict of the District Court can be stopped - Dean evacuation of the cafe against the company and the company had filed an appeal still pending. Respondent appealed the ruling granting the postponement current portfolio to determine the appeal, but in light of conclusion we did not see necessary.
.4 Undermine the appeal before us raises the following claims require reference: N. First, proven infrastructure that justifies making the factual version undermine the president learned that ignored the point that supposed decision switch; Second, the district court that the arbitrator ignored the recommendation to dissolve the company; Thirdly, the learned President was not Regulation 19 may need corrective company after the Respondent's contentions in this matter were rejected - by the arbitrator; Wednesday - Complex proven evidence required, as a matter of law, providing the company's dissolution decree. On the other hand the respondent supported the decision - Dino District Court, both regarding factual assertions and conclusions regarding law. He emphasized the enormous damage that could be caused both with law granting an order decomposition (loss of right to lease, and today: loss of chance to succeed on appeal); claims, the arbitrator's recommendation is not binding force, the Respondent claims rejection purposes of section 19 of the Regulations the company did not shut the lid to raise the claims process current; another respondent argued, among other things, there was no room to issue a warrant dismantling, if relief is available to undermine alternative (except definition of Regulation 19 of the Regulations) also filing a request under section 235 of the Ordinance, as well as undermine request was filed after that - attention in order to force the respondent to pay undermine their shares for a sum exceeding the value.
.5 District Court affidavits filed with the court, deny each other's behavior regarding each of them which were never investigated, and before us counsel quoted undermine arbitration switch mainly complementary to the learned President erred Lscnano Bmimtzaio factual; these quotes selectively quoted in part. It should be noted, the switch itself has determined, for reasons specified, assertions about the mutual financial claims between the owners do not require court decision (Article 12 supplemental verdict). The only thing, understand undermine claims, which I found really is that "(respondent) does in his coffee at home without consultation or consideration to (the appellant - the father) and he only attracts funds from society" (Article 22 of the judgment complements), but undermine omitted argument further quote: and "So apparently it went commencing deployment of (the appellant - the father) from society, but (the appellant - the father) was left with a right to withdraw from the company did not protest against this situation by the end of arbitration proceedings against the desire best avoided Mlmsoc money" (references in parentheses: My N - Q 'to'). Later on switch Secretary of undermine their claim - apparently accepted the - hands - that "now" past the respondent company funds only account respondent has control over it, but it also refused to switch on to intervene. Indeed, even if this issue not only learned President comfort, no
There is reason enough to significantly undermine the factual assertions of the District Court, served as a foundation for his decision. Other excerpts supplemental ruling, mentioned us on - by a lawyer undermine, to wit: In that same can communicate with each other due to lack of complete trust between them, not the cost or reduce, as the District Court stated, the continued relationship between the owners is an lawyer possible.
6 Another argument, second, the undermine had, remember, the mole was the District Court to accept the arbitrator's recommendation to dismantle the company, provided an arbitration agreement. Even this argument really is: and you know, there are court may, for reasons of public interest, prescribe the provisions of law regarding the dismantling of society, and the switch itself permanent decision - Dino complements (section 7), because it was clear to himself and to litigants and the court approved the arbitration agreement "that this recommendation requires strength legal validity ... not a recommendation but an examination opinion good advice, just moral. Found, the District Court was not about a recommendation, and what he had to rule according to law. Also undermine the third claim should be rejected: N. recall, was rejected - by the arbitrator Respondent's argument that he may buy the shares undermine, mainly because he did not fill Dookni manner after installation of instruction; in our opinion, the arbitrator ruled not prevented from trying to undermine and act as a If you fill it in regulation Dookni else said it; Needless to say, we do not express an opinion about the chances of this request, but we have signed the statement before us respondent conclusion, the use of this regulation - by undermine the proper way to solve it.
.7 President Dan learned not remedy decision can be connected to the company under section 235 of the Ordinance as an alternative to the request of liquidation, and, probably, since according to undermine his method must first exhaust the remedies available to them under Regulation 19 of the Regulations the Company; court did not have standing before us on the possible relationships between Article 235 above and remedies given shareholder regulations. before ruling house - this sentence following the re Yenidje tobacco company [4] (1916), limited because small companies reached a state of paralysis and stagnation, the court may grant a dissolution order "from the justice and integrity" as if it were partnership: In 97/62 AE
[1]; AE 530/65 [2]. Halacha is possible that there is room to review it again, suppose that the connection between shareholders (like partners) created an expectation of trust in their hearts with each other, Ocshtzifiih dashed, every shareholder is entitled to stop the conspiracy - by decree dissolution; Indeed, even if we accept the thesis, which states, the legal basis for the connection between the shareholders is purely contractual, we can determine, the special circumstances of the case before us, my husband court anticipated the end of the connection by way of sale of their shares, thus even if the said law thesis element, not the district court must (and perhaps not even permitted) to warrant dissolution. As we know, been criticized for the absolute comparison of partnership law issue before us: and. Ebrahim v compare: N. winding up on the just " , Westbourne dd Prentice
"The partnership analogy: In and Equitable ground; [5] (1972), galleries, ltd 107 (1973). Lq rev 89 each issue in question should now be reviewed after enactment of Section 235 (a) of the Ordinance, that: and
"Society's affairs were conducted in which there is discrimination because of some of its members, the court may, at the request of a friend, to give visibility seemed to remove the discrimination, including provisions according to which conducted affairs of the company or acquire in the future members of society, or the company itself, stock shares.
Review the history of enactment of said section and comparing the corresponding provisions of English law's excellent book is Dr. Charles Cohen, shareholders - claim rights to medicines (Bar Association, תשנ"א) 284 or higher; for the case before us we do not need to address the issue in question any scope. Enough to say, We accept the interpretation (p. 306 onwards), speech "deprivation" in section 235 wide speech "minority oppression", the interpretation given to this clause AE 226/85 [3] seems too narrow. The author thinks (this book, p. 303), and that we agree, that "Ifoh will be vulnerable whenever the legitimate expectations of the parties, even the behavior is the basis used to breach the right to demand because ...", and continues determines there, that --
"Company which is a kind of partnership is a legitimate expectation of the parties to joint management of the company. Therefore, the behavior that harms this expectation may be the basis of prosecution for discrimination."
Finally scholarly author rightly states (Name, p. 366), there is a relation between the degree of the court's willingness to accede to the request of dismantling and future way be interpreted Section 235; compared to this matter:,. 3 rd ed, sydney) bh Mcpherson, the law of company liquidation 139 (1987. O'donovan by j. Indeed, as noted above, we do not need to examine the issue in scope. In the end the fate of appeal that is truncated by specific factual circumstances. The question we should discuss it is whether undermine proved, there is reason to intervene judiciously - the opinion of the District Court; this regard to consider the following findings, most of whom remembered the appeal decision Subject: (a) The company continues to run the main points the way to undermine her completed; (b) that bring the connection between an end with the law; (c) there's no room, under the circumstances, to take the means of providing acute dissolution decree had not exhausted all alternative ways first; (d) Slanein has to consider the damage that could be caused to litigants all - loss of rights rent - if given an order against the company dissolution.
Considerations including the findings that are discussed and the circumstances did not seem to us, there is reason to issue the appeal decision Lhtarbotno; Therefore we do not need to discuss further claims lawyer husband have raised before us.
It seems to us, and Dean appeal rejected, and he declined. Undermine respondent pay attorney's fees 500, 7 NIS.
Justice A. Barak: I agree.
5129371 Justice T. Or: I agree.
Such decision was decided - the judge's Dino S. Levine.
Given today, as Kislev Tsn"b (5.12.91).
|
ADVOCATE ISRAEL
