Civil Case (Tel Aviv) 58608-01-22 Dan Hershpang v. Bar Tarnovsky - part 6

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1.C.  Does the engagement amount to a "partnership" or a "joint venture" for the purpose of establishing a special relationship?

28. The next issue that needs to be decided is whether this agreement is sufficient to establish the special relationship necessary for the purpose of providing accounts. In general, the case law outlined a non-exhaustive list of special relationships that establish a right to provide accounts, including a relationship of agency, authorization, partnership or trust.  However, not every profit-sharing agreement or data-dependent payment agreement establishes a special relationship, and each case must be examined according to its circumstances (Civil Appeal Authority 8266/11 UBM v.  Maoz Travel Ltd.  (16.8.2012(; Civil Case (Tel Aviv District( 44549-11-15 Shaarei Information Ltd.  v.  John Bryce Training Ltd.  (7.8.2018().
29. According to the plaintiff, the agreement that was entered into formed a partnership relationship and, alternatively, a joint venture, which establishes grounds for providing accounts. After examining the arguments of the parties, I am of the opinion that the evidence in the case shows that even though the relationship did not rise to the level of a partnership in the formal sense, it was proven that there was a joint venture, which establishes a special relationship for the purpose of providing accounts.  The distinction between a partnership and a joint venture was discussed by the Supreme Court in other municipal applications 5876/06 Vertical Integration Ltd.  v.  Rada Electronics Industries Ltd., paragraph 11 (February 4, 2009( (hereinafter: Integration Matter), as follows:

"The fact that this is a collaboration limited to a specific business project distinguishes a joint venture from a partnership.  On the other hand, the characteristics mentioned distinguish the joint venture from a regular contracting contract, in which one party to the transaction provides services for a fee.  It is also worth emphasizing that an agreement in which the parties undertake to act to promote a common economic goal does not in itself turn the agreement into a joint venture."

30. Thus, it can be said that while a partnership is an ongoing business incorporation for the purpose of generating profits, by virtue of which a separate legal entity is created, the joint venture is expressed in a limited contractual agreement for a defined business engagement, such as a specific business project. In addition, the joint venture is characterized by the sharing of resources, joint control, and the division of profits and losses, but does not amount to a partnership in the formal sense.  In fact, while partners who operate within the framework of a partnership bind the entire partnership, in a joint venture the contractual engagement is limited to the defined project (see, David A.  Frenkel and Zvi Frank Partnership Law in Israel 61-63 (4th ed., 2025(; Civil Case (Central District( 33624-06-21 Berger v.  Dror, paragraph 49 (November 3, 2023(; Civil Case (Tel Aviv District( 2030-08-23 IBT Diamonds Ltd.  v.  Alon, paragraph 42 (March 20, 2025(; Civil Case (Shalom Tel Aviv( 60675-12-19 Schultz v.  Binstock, paragraphs 41-44 (March 6, 2023).  As noted in this context regarding integration:

"The term 'joint venture' was drawn from the business world and developed in response to the need to concentrate resources, capital and knowledge, especially where business entities seek to deal with large-scale projects...  Without setting too stringent conditions, it is possible to outline a number of characteristics that characterize the "joint venture" as a business institution, which the courts have insisted upon in recognizing them in certain organizations as a "joint venture." It can be said that in order for a business organization to constitute a 'joint venture', the organization must be in a contract, explicit or implied, attesting to the intention of the parties (two or more( to cooperate with respect to a defined business initiative to achieve a common goal (generating profits or co-production of a product or facility), in which there is a sharing of resources (capital, knowledge or skills( between them; there is joint control over the management of the venture (although this does not necessarily mean an equal percentage of control in the venture(; and there is a division of profits and losses between the parties to the venture."Ibid., paragraph 11).

31. In order to decide whether a special relationship has been formed between the parties that establishes a remedy of providing accounts, it is therefore necessary to examine the application of the six characteristics that were brought in the matter of integration with respect to the circumstances of the case before me. This application leads to the conclusion that the parties sought to operate within the framework of a joint venture.  First, the requirement to organize in the agreement is met.  Second, the parties sought to cooperate in relation to a defined business initiative.  In this context, the defendant confirmed that he contacted the plaintiff in order to offer him to join a specific project in which they would work to establish online stores selling protection products against the coronavirus.  The defendant also confirmed that he approached the plaintiff with this offer in light of his knowledge of setting up websites (Transcript, p.  46, s.  37).
32. In this context, it should be clarified that the agreement that was formulated spoke of a defined business initiative in relation to the cluster of sites as a whole, and not in relation to one site or another, as claimed by the defendant. As may be recalled, the defendant claims in this context that to the extent that an agreement was formed, it allegedly related to one site or another, while trying to distinguish between the six websites and the DB.  In my opinion, the defendant's attempt to claim that the parties' consent related to a particular site is inconsistent with the totality of the evidence and should be regarded as an artificial diagnosis.  Thus, when the project was launched, while the parties were in a state of uncertainty, they did not know that they would be required to establish a number of sites.  The parties' versions show that the establishment of the websites one after the other stemmed from a number of different considerations and factors, including technical failures, and that in fact, from the time the website was established, it was intended to replace its predecessors.  In addition, the defendant's argument that a distinction should be made between the DB to the rest of the sites, since this site supposedly offered different products.  This is because the defendant did not prove this claim with evidence.  On the other hand, I saw fit to adopt the plaintiff's version, who claimed in this context that the only difference between the DB His predecessors had it in that it allegedly generated profits.  In this context, the plaintiff testified in his cross-examination that:

"There is no talk of other agreements.  The venture is the same venture, the products are the same products, the sites are the same sites, so what has changed, what exactly has changed, that suddenly we are profiting, so you are not a partner that we are profiting? Nothing has changed, we are talking about the same sites, the same products, everything is the same.  And I continued to do the exact same thing.  So what has changed? Why, because at this point in time I'm out, why is it said where?" (Transcript, p.  23, paras.  27-32).

33. Moreover, in his testimony, the defendant first tried to claim that the plaintiff "was a partner in a website" (Transcript, p. 41, s.  35), but immediately afterwards he referred to all seven sites as a single entity, as follows:

"We chose the name after we agreed that he would start building the site.  It started with Life with Corona, after that it moved to Tuphir Merchant Titi Am Stock, that's the name of the site.  After that we moved on, there may have been another site, among other things, that Green Face Tax was opened, but it wasn't active.  The Titi M Stock has become Titi M Soppliers if I'm not mistaken but I'm not sure yes quite sure about it.  Then Titi am Suflier we were at huge losses from these sites, we couldn't sell almost anything.  And then we opened another website called DB Protective.  What else do you want to know?" (ibid., p.  42, paras.  1-8).

34. In addition, a review of the correspondence shows that the parties continued to act in connection with the DB Until January 2021. The defendant even confirmed in his testimony that the plaintiff took part in the construction of the DB (Transcript, p.  52, s.  11 - p.  54, s.  15).  This is while the statement of defense claims that in May 2020 he worked "together with two parties that are not a party to this proceeding" to establish a website DB (Section 26 of the statement of defense).  Finally, the defendant confirmed that an agreement had been entered into between the parties in connection with the venture, as follows: "There was an option to make a profit if the venture was successful and Dan complied with the things he undertook, as we determined at the beginning, so Dan would have received money" (Transcript, p.  66, paras.  13-15).
35. In this context, the development of the defendant's version against him should be credited. Thus, while in the statement of defense the defendant claimed that the plaintiff asked to be a partner in the site, He later stated that after he spoke with the plaintiff and told him about the venture, the plaintiff, for his part, asked to take part in the venture (paragraph 5 of the defendant's affidavit).  In addition, the defendant stated that he had decided, together with Polanski, to use the services of the plaintiff and that he was defined as a functionary (Name, at p.  6).  Later, the defendant notes that the plaintiff's share "in the venture from the very beginning was greatly reduced in relation to the original plans" (Name, paragraph 25( and confirmed that it was he who joined the plaintiff in the venture (Name, paragraph 38), and finally claimed that the plaintiff "perceived that he had ceased to be part of the project on the site dbprotective.com (Website DB - R.  G.  (" (Name, section 43).
36. Moreover, there are Stand up To the Defendant's Duty The Failure to bring relevant witnesses to testify in order to prove this claim. Thus, the failure to bring testimonies on behalf of the defendant's alleged partners in the venture, and in particular in relation to the circumstances of the establishment of a website DB, establishes a presumption against him that if they had testified, their testimony would have acted in accordance with his obligation.  Their failure to testify therefore strengthens the plaintiff's version, which I found reasonable and consistent with the fabric of the evidence (Civil Appeal 7300/21 Asraf v.  Bublil, paragraph 36 of the judgment of the Honorable Justice A.  Grosskopf And the References Name (12.3.2024().  The conclusion of the matter is therefore that the defendant's claim that the proposal related to a specific site and not to the project as a whole, is to be rejected, and the defendant's attempt to separate the site should not be accepted DB from the rest of the sites.
37. As to the other necessary conditions outlined in the matter of integration: there is no dispute that The business initiative that is the subject of the proceeding Intended for the purpose of generating profit. The premise is that the plaintiff petitions in his claim to receive the relief of providing accounts for the purpose of clarifying this very matter.  In other words, whether the venture generated profits or not, in view of its informative inferiority.  In this context, the plaintiff claims that the venture allegedly generated handsome profits, amounting to $200, 000 per month (Appendix 25 to the plaintiff's affidavit).  Although the defendant insisted on the claim that the venture did not generate profits, the claim that the venture generated profits at the relevant times and when the parties acted together cannot be ruled out.Transcript, p.  45, paras.  10-11; p.  66, paras.  35-36).  This, inter alia, took into account that the defendant in fact confirmed that a website that was not profitable and caused losses was closed and replaced with a new site and further confirmed that the website DB Remains active.  This version is consistent with the plaintiff's argument (in this context, see, for example, Transcript, p.  17, paras.  6-9).  In addition, in paragraph 26 of the statement of defense, the defendant noted that the activity within the framework of this site was "extensive and extensive", A description that is settled, on the face of it, with the existence of income.  In addition, the defendant testified in connection with the activity on the site DB Because "Dan (the plaintiff - R.  G.( wants to be active as soon as there is success" (Name, p.  51, s.  34), as if there was a success in the form of revenue.  In the same context, he claimed in correspondence dated August 31, 2020, that "for the past month and a half, we have earned $120, 000.  which is about the lid of the pit we were in" (p.  431 of the plaintiff's affidavit, correspondence dated August 31, 2020, at 2:41:03).

On the margins, and in everything related to According to the defendant's claim regarding the inadmissibility of the "Google Analytics" reports presented by the plaintiff, I am not required to decide it at this stage.  As emphasized above, in the first stage of a claim for the provision of accounts, the plaintiff is required to prove only a prima facie right of action, and he is not required to prove the amount of profits or their very existence at the level of proof required in a regular civil proceeding.  These reports were therefore presented as a prima facie evidentiary indication of the existence of income from the activities of the sites, and for this purpose, and together with the rest of the evidence detailed above, including the defendant's own confessions, Enough of them.  The question of the admissibility, weight and accuracy of the reports will be clarified, if necessary, at the second stage of the proceeding, after receiving the accounts and comparing them with the data that will be provided.  In any event, it is precisely the alleged discrepancy between the data of the reports and the defendant's claim of lack of profits that sharpens the need for the remedy of providing accounts, which is precisely intended to clarify these data in their entirety.

38. Further, the parties confirmed on a significant number of occasions, both within the framework of this proceeding and in real time correspondence, that there was a sharing of resources between the parties, in which the defendant managed the business activity, invested from his financial capital and was entrusted with raising the necessary investment funds, while the plaintiff invested in his professional qualities, and in general It's He set up websites and took care of their operation.
39. In addition to, the evidence further indicates that the parties had joint control over the management of the venture, even if not on equal terms. Indeed, the parties agreed that the venture would be managed by the defendant, including exclusive management of The financial field.  In this context, the plaintiff reiterated that "what does he (the defendant - R.G.), the senior partner, pay...  As far as I'm concerned, Bar had 80%, so he's the manager of the venture, he's the one who managed the money."Transcript, p.  30, paras.  22-23).  On the other hand, the importance of depositing the technical aspect in the hands of the plaintiff should not be underestimated.  The technical aspect was at the heart of the venture and included the establishment of the infrastructure, i.e., the online platform and its maintenance, in order to sell the products to customers.  In this context, it was argued and not hidden that the venture was based entirely on remote selling through websites, that the defendant approached the plaintiff in light of a lack of understanding of the field, and that he was the one who established the initial infrastructure for the venture and that its activity was necessary for the venture and the defendant (in this context, see the plaintiff's argument in the minutes, p.  8, paras.  35-36 and at p.  11, para.  15; p.  59, paras.  34-35; p.  65, S.  17).  In addition, the defendant testified that the plaintiff established the websites (see, for example, Name, at p.  42, paras.  14-20), and failed to substantiate the claim that the sites were established by other parties.  As a result, all the passwords and usernames in connection with the Sites were in the hands of the plaintiff, in a manner that expresses the degree of centrality and control of the plaintiff in the main asset of the venture - the websites.  It is not for nothing that the defendant complained that the plaintiff "held his assets" (Name, p.  71, paras.  21-25).
40. Moreover, Real-time correspondence attests to the fact that the parties saw themselves as working together in the venture and that the plaintiff's role in it was significant. This is in contrast to the defendant's claim that the plaintiff's role was limited to a negligible technical matter.  Although the plaintiff sometimes carried out "technical" actions easily and quickly, this does not detract from their importance.  The plaintiff played a significant role, and at the beginning of the joint activity, he even acted to locate a supplier for the purchase of a stock of masks (Transcript, p.  24, paras.  7-25).  In this context, the defendant insisted in real time on the importance of locating this entity (see, for example, pp.  40-41 and 77 of the plaintiff's affidavit), and even believed in real time that if the plaintiff decided to terminate his part in the venture, he would be entitled to compensation for doing so.Name, p.  85, correspondence dated March 29, 2020, at 14:58:24).  I will clarify that the defendant's claims in connection with damages allegedly caused as a result of this connection did not go unnoticed, but even these claims were made in vain and no evidence was brought in the matter (without deciding at this stage on the offset claim, which should be clarified, to the extent that the defendant insists on it, in the second stage of the proceeding, it will be noted that it was claimed without detail and without support; The defendant did not attach an expert opinion or any references to prove the alleged damage).  In any case, they do not change the fact that the plaintiff performed material actions to locate a doubt in order to receive the initial inventory.
41. Also, there is Stand up In this context, the development of the defendant's version against him. As may be recalled, the defendant initially claimed that the plaintiff had no connection to the venture, that he was a partner in the establishment of only one website, that he had not spoken with other parties in connection with the venture, or that he had not carried out any material activity in connection with it, but in his cross-examination he claimed otherwise (see, for example, Transcript, p.  57, paras.  15-16; p.  61, s.  38).  In addition, the intensity of the parties' correspondence from real time and Mishkan strengthens the plaintiff's version, according to which he took a substantial part in the venture and carried out a large number of significant actions in connection with it.  In addition, it was claimed and not hidden that the plaintiff carried out a significant number of actions, reflecting involvement and joint control of the venture, including promoting the site, purchasing and registering of "Domains" for the purpose of setting up the websites, performing graphic operations and maintaining the sites (Transcript, p.  30, Sat 4-18; paragraph 28 of the plaintiff's affidavit).  It therefore follows that the defendant's attempt to present the plaintiff's role as mere assistance is inconsistent with the totality of the evidence in the case.
42. In continuation of the above, it will be emphasized, Because The arrangement between the parties included a division of profits and losses: the defendant bore the financial investment, the plaintiff invested his energy, time and skills, and in the absence of profits, both bore the loss, each with the loss of his investment; On the other hand, a mechanism for distributing profits has been determined.
43. The conclusion regarding a special relationship that justifies giving accounts is strengthened even in light of the defendant's confessions. In fact, the defendant admitted on a number of occasions, both in real time and within the framework of the present proceeding, that the plaintiff is entitled to the relief of providing the bills.  Thus, for example, the defendant recognized the plaintiff's right in the following terms:

"The defendant: What do you want in a nutshell