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Court rejects damages claim against receiver
Rishon LeZion court rejects heir's damages claim against receiver, finding no breach of duty in asset realization. Receiver acted professionally and properly.
The Execution Officer Assaf Avni from the Rishon LeZion court dismissed a request to charge a receiver with damages, filed by the heir of a deceased debtor, and ruled that the receiver acted professionally and properly throughout the asset realization process.
The request was filed by the heir of the debtor, of blessed memory, against the receiver appointed to realize a shop. Within the request, it was claimed that the receiver was negligent in his duties, attempted to sell the property for a price lower than its real value, did not report rental income, and was responsible for fines imposed on the applicant.
In his decision, Registrar Avni rejected all the applicant’s claims and ruled that no breach of duty by the receiver was proven. “In order to establish grounds for charging a receiver under Section 58 of the Law, it is necessary, therefore, to prove 3 cumulative conditions: First, a breach of duty by the receiver under Chapter E of the Execution Law… Second, it must be proven that the breach was done without “reasonable justification” on the part of the receiver.
Finally, it must be proven by admissible evidence, damage caused due to the alleged breach. The burden of proof in the request rests on the applicant – the plaintiff, from the beginning of the proceedings to its end, as one who seeks to extract from another. However, the burden of persuasion rests on the receiver, to prove “reasonable justification” for his conduct.”
The registrar ruled that no breach of duty by the receiver was proven. The receiver acted in accordance with the registrar’s instructions, reported regularly and orderly, and the sale of the property was carried out at an appropriate price of ₪1,520,000 plus VAT, after it was approved by the registrar.
“The receiver acted in this case in a high-quality, professional, and impeccable manner, ensuring to report regularly to the registrar and obtain his prior approval for every action,” the decision stated. “The satisfaction with the receiver’s performance in this proceeding was expressed by two judges (Judges Passo and Ego and the undersigned) who awarded the receiver the maximum fee in light of his professionalism, diligence, proper fulfillment of his role, his successes, and achievements in the proceeding. Note: The receiver acted in this proceeding far beyond that of a reasonable receiver, and had to contend with intensive and extensive legal opposition, a significant part of which was unjustified and frivolous (according to the rulings in the appeals, all of which were rejected).
The registrar also addressed the applicant’s conduct and noted that she was represented throughout the proceedings, objected to every action of the receiver, and raised inaccurate claims. “It emerges from the file, even from a review of the parties’ summaries and subsequent submissions, that the applicant made abusive use of legal proceedings… The applicant unnecessarily complicated and prolonged the proceedings and hindered their progress and conclusion from the very beginning. The vast majority of the applicant’s claims against the receiver were raised towards him in bad faith and contrary to the actual facts, without any basis.”
At the end of the proceedings, the applicant was ordered to pay legal expenses in the amount of ₪39,000 plus VAT.
For the full decision click here
