Civil Appeal No. 4628/93
State of Israel
Against
Apropim Housing and Development (1991) Ltd.
In the Supreme Court sitting as a Court of Civil Appeals
[6.4.95]
Before Vice President E. Barak and Justices D. Levin, A. Matza
Appeal against the judgment of the Jerusalem District Court (Judge Z. A. Tal) of 2 June 1993 2 in Opening Motion 46/93. The appeal was accepted by a majority of opinions against the dissenting opinion of Justice A. Matza.
- Dotan, Senior Deputy Attorney of the Jerusalem District – on behalf of the Appellant; P. Goldstein – on behalf of the Respondent.
Judgment
Judge A. Matza: This is an appeal against the judgment of the Jerusalem District Court (the Honorable Judge Z. A. Tal), in which the court accepted the respondent's position and rejected the state's position regarding the correct interpretation of section 6(h)(3) of the "1990 Program Contract".
Program Contract
- At the end of 1990, the government decided to encourage the construction of apartments for new immigrants and other people entitled to housing. In order to promote this policy, the Ministry of Construction and Housing formulated an encouragement plan, the main of which
was the allocation of land for construction by the Israel Lands Administration, and its commitment to purchase from the contractors the apartments it would build, in whole or in part. As part of the steps to realize the incentive plan, a uniform version of a framework contract was prepared. The wording of this contract (the "Program Contract") constituted, henceforth, a binding basis for contractual engagements (for which "specific contracts" were also made) between the State (the Ministry of Construction and Housing) and various contractors and construction developers. The program contract imposed on the State an obligation to purchase from the contractor, at his request, a fixed quota of the apartments to be built, at a price that would be calculated in accordance with the provisions of clause 6(f) of the program contract (hereinafter – the calculated price).
With regard to the State's obligation to purchase from the contractor, at his request, the apartments to be built, the program contract distinguished between two types of projects: the first type included agreements for the construction of apartments in the requested areas; while the second type included agreements for the construction of apartments in development areas. The first difference between the types is in the quota of apartments that the state must purchase from the contractor: with regard to apartments of the first type, the state is obligated to purchase up to half (50%) of the number of apartments, while in the case of apartments of the second type, the obligation to purchase relates to all (100%) of the apartments it will build. Another difference between the two types is as to the date on which the contractor's right to demand from the State to fulfill its purchase obligation is perfected: clause 6(b)(1) of the contract indicates that with respect to apartments of the first type, the contractor has the right to demand that the contractor, as soon as possible, arise upon the completion of the construction of the building (in the language of the contract: "Stage 40"); whereas in respect of apartments of the second type, the contractor is entitled (in accordance with clause 6(b)(2) of the contract) to present his demand to the state already at the completion of the construction of the frame and partitions ("stage 18"). It should be noted that the program contract did not limit the period within which the contractor may present to the State his demand for the realization of the purchase undertaking, but (as will be clarified below) the delay in the presentation of the demand beyond defined time periods affects the scope of the contractor's entitlement to receive from the State, in exchange for the apartments, the full calculated price.
- Clauses 6(g) and 6(h) of the Program Contract define a number of cases in which the Contractor's right to receive from the State the full calculated price will be reduced, and in each of these cases the Program Contract determined the rate of reduction that the State will deduct from the calculated price. The substance of one of these cases, the one regulated in clause 6(h)(3) of the program contract, is the cause of the interpretive dispute in which the District Court ruled and which is the subject of the appeal before us.
Until I deal with the controversial interpretation of clause 6(h)(3), I will preface and cite, as written and in full, clauses 6(g) and 6(h) of the program contract: