Business
Accountability
Second cheek: If not enough for the owners of the halls with the beatings, another slap came
The "Advance Reimbursement Law" that was approved just before the dissolution of the Knesset is an illogical law, unrealistic and hurts the owners of the halls, who also suffered a heavy economic blow and did not receive assistance from the government.
And the customers?
They should not build too much on the refund because it is not expected to arrive
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Wedding
Adv. Liran Kolczynski
Thursday, 24 December 2020, 00:17
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The Advance Reimbursement Law passed on Tuesday, just before the dissolution of the Knesset, but on a practical level it is not at all certain that the couples who canceled the weddings will be able to implement it.
Most hall owners are already in economic collapse today and have closed their gates.
Therefore, the return of the advance money as provided by law will not reach the couples.
Even those who apply to the courts will not necessarily see money at the end of the proceedings.
This is because if the company Ltd. (the hall) no longer transfers payments to suppliers and employees, and is no longer rented (the hall itself), those who apply for the company's liquidation will probably "do good" to the hall owners. and assets.
those who still see the money they are actually employees, they can sue or file for National Insurance debt to get their money. the rest of the creditors (including couples) probably will not see a penny.
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Last minute happiness: Young couples whose wedding is canceled will receive a refund of the down payment
To the full article
The state did not help and most businesses collapsed.
Banquet hall owners' protest on May 17 (Photo: Yossi Steiner)
In practice, after the publication of the law in Reshumot, it is worthwhile to carefully examine the engagement agreements between the parties (the hall and the brides) regarding the conditions for canceling an event.
In most of the contracts made by the owners of the halls, it is stated that if the couple canceled the event on their own initiative less than 60 days before the date of the event, the advance will not be refunded.
The first couples to cancel the event for unjustified reasons at the beginning of the epidemic, when it was still possible to gather but in smaller quantities - between 100 and 250 guests - were forced to forgo the down payment.
Prior to the enactment of the law this week in the Knesset, the stipulating clause for repayment or non-refund of the advance was section 18 of the Contracts Law - in case the breach of contract is due to circumstances the violating party did not know about and did not have to know at the time of signing the contract.
Currently, although many lawsuits have been filed by couples for reimbursement and by the hall owners for the balance, only one ruling has been given, and that too in the Small Claims Court.
In the case of Yehezkel v. Keter Harimon Center for Events and Conferences Ltd. Since August this year, Judge Ilan Defedi ruled that the event could not be held due to the corona virus and the closure imposed.
This is an ultra-Orthodox plaintiff, and in light of the rabbi's instructions, he was denied the possibility of postponing the event to another date, which ultimately took place in the family circle in a private home.
The owner of the ballroom claimed that he was willing to hold the event at another time, but in light of the future closure the date was not up to him.
This, in addition to the economic distress that fell on the shoulders of the hall owners.
The judge ruled that the owners of the court must return the money paid by the couple.
It is important to note that in this case it is a virgin lawsuit in the first wave of the Corona and there were special circumstances, as it is a couple from the ultra-Orthodox sector and in light of the rabbi's instructions could not postpone the event to another date.
If the plaintiff had been secular or if the claim had been filed in the second corona wave, it is likely that the court would have ruled otherwise.
Under section 18 of the Contracts Act, the guiding justice is that the parties will attempt to minimize the damages and perform the contract in good faith.
In this case the aim is to reach an agreement on postponing the event to another date, a partial refund or another solution.
The flooding of the Consumer Council with requests from couples devoured the cards, because the issue came up on the public agenda, and Knesset members as public representatives behaved in a populist manner and enacted a law that severely harms and leads to the dissolution of companies owned by many ballrooms.
By the way, at the beginning of the negotiations between the Consumer Council and the owners of the halls, proposals were made according to which the cancellation fee would be 5 to 10 percent or a total of NIS 2,000 to NIS 3,000, whichever is lower.
It is important to note the spirit of things in the beginning: then the owners of the halls had the power, because the money was in their hands and the couples felt captive.
The couples then began canceling checks for non-payment and then the balance of power was balanced.
After the law was passed on second and third reading, the hall owners lost the battle but it is not certain that they will lose the "war".
Section 2 of the bill stipulates that if the event is canceled due to the corona, the hall owner will return the funds within 3 months from the date of the original event or starting October 1, 2020, whichever is later.
For the information of the MKs who raised their hand in favor of the law, the two dates have long since passed.
In practice, they will not really see money (Photo: Illustration)
There is a restriction in the law that if the owner of the hall has to, for example, return NIS 20,000 to a couple, he can deduct from that amount up to NIS 500 for "special expenses" that are not "current expenses".
Only that the Knesset members forgot to define in the law what "current expenses" are.
The logic is that current expenses are property taxes, rent, water and electricity and special expenses can be, for example, ordering cutlery, special meat beyond the regular menu, expenses for designing the hall, repairs, etc. Every reasonable person understands that NIS 500 offsets do not cover even 5 Percentage of the special expenses incurred by the hall owner for the invited event.
Another section of the law states that if within 3 months from the original date of the event the event could not be held, the hall owners would return the funds. In the light of the restrictions, even these days it is not yet known when they will be able to hold events.
Government authorities set restrictions and closures that directly harm the hall owners and do not compensate them. , Holds employees, pays taxes and provides employment to dozens of employees and suppliers.
Adv. Liran Kolczynski
Many will say that the owners of the halls have a lot of money, so "not terrible", but the down payment is intended to finance the current and fixed expenses of the hall owners, such as rent, electricity, water, property taxes and workers.
These funds have long since been paid.
It is true that the rest of the payments should be returned to the couples, insofar as it was really not possible to make the event and the parties acted in good faith.
The law attempts to solve a point problem related to couples and hall owners, but on the other hand causes irreversible damage to hall owners and vendors.
The populist Knesset members who initiated the law did not take into account how the hall owners would return to the couples the advances they received 9-12 months ago.
These are apparently funds that have already 'evaporated'.
At a time when the ballrooms were closed following the temporary order, no activity took place in them.
We would like to add that most businesses in Israel operate on a current cash flow and deferred funds.
What is actually happening is that already today most of the ballroom owners have collapsed and the consequences of this are that all the vendors who worked in front of them, such as photographers, workers, artists, sound people and the like, received uncovered checks.
The owners of the halls, for their part, are on their way to becoming unemployed.
During the Corona period the hall owners did not receive any help or assistance from the government that could have saved the world of events.
After the law was enacted this week in the Knesset, their damage will only increase.
The author is an attorney specializing in contracts, execution and commercial law
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