An additional sanction was established in clause 6(h)(2) of the contract, which states that:
"In the event of the realization of the purchase obligation after 18 months from the end of the execution period, an amount of 2% will be deducted from the price of the apartment, which will be determined as stated in subsection (1) above, for each month following the end of the aforesaid 18-month period."
This section also does not state that it relates to a particular type of project, and therefore I cannot agree with the conclusion of the learned judge of the first instance, to which my colleague, Justice Matza, is also a partner, according to which section 6(h)(2) applies only to projects of the first type. This section, like its predecessor, is drafted in general, and therefore, according to its plain meaning, it applies to both types of projects.
The purpose of this section is clear: to prevent the contractors from delaying too long in submitting the demand for realization and to prevent the creation of a situation in which the contractors leave in their hands for more than a year and a half after the end of the execution period a stock of apartments, which may be in various stages of construction, do not sell them on the free market, but also do not demand the realization of the undertaking from the government. In such a case, the main purpose of the agreement, which is to enrich the stock of apartments in Israel, is erased. Therefore, the said "sanction" was determined, according to which after the passage of a year and a half from the end of the execution period, 2% of the price of the apartment will be deducted for each month of such delay.
The next "supervision clause", which is the disputed clause in our case, is section 6(h)(3), which states as follows:
"In the event of the realization of a purchase undertaking in projects for which a purchase undertaking is given at the rate of 100% after the end of the execution period, an amount of 5% for each month following the execution period will be deducted from the price of the apartment to be determined as stated in subsection (1) above."
- The Appellant asks us to determine that the aforementioned clause 6(h)(3), according to the intention of the parties, was intended to be the parallel arm of the supervision instrument set out in clause 6(g), i.e., that the clause should be interpreted in such a way that with respect to companies building in development zones, which have received a purchase undertaking of 100% and the date of realization is at the end of stage 18, 5% of the price of the apartment will be deducted for each month of delay in completing the construction. The first level interpreted this section as referring to the delay in submitting the application for the realization of the purchase undertaking, and not to the delay in the execution of the construction. In the opinion of the learned judge, the wording of this section is identical to the previous one (section 6(h)(2)), and therefore the conclusion is that it also relates to the delay in filing the application for realization, except that it deals only with projects of the second type, while section 6(h)(2) deals with projects of the first type.
- As a result of this interpretation, a situation has been created whereby with respect to projects of the second type, there is no sanction for delay in the execution of the construction. There is no doubt that this result is illogical, since there is no logic in imposing a sanction for delay in completing construction for projects of the first type, and not to impose a parallel sanction on projects of the second type. With regard to projects of the second type, such a sanction is required by virtue of all the more so, since the benefits given to the contractors engaged in them are much more significant, and hence a more significant means of supervision are also required.
The learned judge of the first instance was aware that as a result of the way he interpreted the contract, a situation would arise in the absence of a sanction for delay in the execution of construction with respect to projects of the second type, but he was of the opinion that: