Civil Case(Haifa) 56332-12-23 H. Fahoum & Co. – Engineering Services Ltd. v. Nahariya Municipality

Judgment

I have before me a monetary claim in the amount of ILS 850,000 relating to work that the plaintiff carried out for the defendant in two projects, for which he was not paid.

The parties' arguments in summary

1. The statement of claim claims that in March 2018, the defendant contacted the plaintiff and ordered planning for two intersections in Nahariya, the first at the Gilad Junction and the second at the Shazar Junction.  It was claimed that price quotes were submitted for both projects.  Regarding the Gilad Junction project, it was claimed that an agreement was signed between the parties in writing on June 27, 2018, and that the defendant had a balance of debt in the sum of ILS 135,000, including VAT (which is the third payment according to the agreement - 20% after the file was prepared for tender and execution).  Regarding the Shazar Junction project, it was claimed that no written agreement was signed and that the defendant refused to do so and even refused to pay the plaintiff the consideration to which it was entitled.  It was argued that there was no dispute regarding the full execution of the work by the plaintiff and that the problem arose in November 18 with the election of a new management in the municipality.  It was argued that the new management refuses to keep the promises made with the previous management on despicable claims that have no place in the relationship that existed between the plaintiff and the defendant and the trust that has been accumulated between the parties over the years.  It was claimed that the defendant had a debt balance in the sum of ILS 585,000, including VAT in respect of this project.  It was argued that the plaintiff's requests to the defendant for the required payment were to no avail.
2. In the statement of defense, it was claimed that with respect to the Gilad Junction project, an agreement was signed with the plaintiff for higher planning and supervision services.  In Appendix C to the agreement, it was determined that the consideration to the plaintiff would be ILS 450,000 (including VAT).  The terms of payment stipulate that 75% of the consideration, for the planning, will be paid upon completion of the preparation of the material for the tender, and 25% of the consideration, for supreme supervision, will be paid upon the delivery of the work by the executing contractor.  It was argued that in the end, after the completion of the tender proceedings and the selection of the executing contractor, the project was canceled and was not carried out.  It was argued that the plaintiff did indeed provide the defendant with planning services and therefore she is entitled to 75% of the contractual consideration.  It was claimed that the plaintiff did not carry out supreme supervision since the project as aforesaid was not carried out.  It was argued that contrary to the plaintiff's claim that she received from the defendant a total of only ILS 225,000, in practice she received from the defendant a total of ILS 337,500, which constitutes 75% of the contractual consideration, and therefore the defendant remained liable to the plaintiff for this project.

Regarding the Shazar Junction project, it was claimed that the plaintiff did indeed carry out the planning and supervision work, but that no agreement was signed with her regarding this project as required by the Municipalities Ordinance in this regard.  It was argued that anyone who wishes to enter into an agreement with a local authority must make sure to receive a legally signed undertaking and the authority cannot be obligated to negotiate and recognize engagements made without a signed agreement by the parties agreed to this by the municipality.  It was argued that insofar as the plaintiff worked without receiving a work order and a signed agreement as required by law, she had nothing to complain about but herself.  It was claimed that in 2019, the defendant sent the plaintiff a draft agreement in which it offered her consideration in the total amount of ILS 56,407 (3% of the payment to the executing contractor, which constitutes the municipality's customary consideration for planners in such a project), and the plaintiff refused the offer.