In addition, this amount of interest is the main consideration for the lender, and as such it is an essential component of the second agreement; The members of the group did indeed receive the loan for which interest is paid, in the amount of many millions; And the project was also finally completed, when committee member Mr. David said that "miracles that we will eventually have a building" because before the engagement with the defendants "it was really a minute... In a second, the house would have gone" (page 72 of the transcript of the hearing of September 10, 2025).
Admittedly, There was a power gap between the sides, Among other things Against the background of the difficulties of the group members in obtaining funding for the establishment of the venture. However It should be remembered that there were more than forty members of the group; who received legal services from a lawyer who served as their trustee; who took non-bank financing, after their attempts to obtain other financing were unsuccessful; andIt is reasonable to assume that they were aware of the consequences of this move, including in terms of credit costs. The defendants also showed that for each class member, the nominal cost of the interest in the nominal amount agreed upon was approximately NIS 64,285, i.e., an amount that is not significantly higher than the amount that each member paid in advance to plaintiff 2 for the organization of the group (see the testimony of plaintiff 2 on page 14 of the transcript of the hearing of September 10, 2025, lines 32-36, and the testimony of Mr. David on page 73 of the same transcript, lines 21-22).
In these circumstances, even if it had been determined that a provision had been violated Section 3(b) Law Fair Credit, I do not believe that this justifies granting the plaintiffs the relief they petitioned, and interfering so significantly in an essential component of the agreement between the parties.
- In light of the above, it is necessary to determine the interest rates on the various parts of the loan in accordance with the provisions of the second agreement, as well as to determine the amounts attributed to each part. For this purpose, I will address the calculations made by the expert on behalf of the court in his opinion, and the defendants' arguments against the assumptions made by the expert for the purpose of his calculations.
E(2)(2)(1) The amount to be attributed to the first part of the loan
- According to clause 3.1 of the second agreement, the first part of the loan was supposed to be in the amount of NIS 300,000, and it was intended to repay a specific debt of the class members to plaintiff 6, with the interest rate for which was 15% per annum.
- In practice, the sum made available for the purpose of repaying the debt to this plaintiff was NIS 318,000 (see Appendix 6 to the affidavit of Boaz Barzili on behalf of the lenders). The expert was of the opinion that in these circumstances, the NIS 18,000 surplus should be attributed to the third part of the loan, for which the interest rate is lower (see paragraphs 113-114 of the opinion).
- On this matter – which the expert also believed was not a clear part of his professional expertise (see page 100 of the transcript of the hearing of September 10, 2025) – my position is different. It is reasonable to assume that the sum of NIS 318,000 was transferred to plaintiff 6 after it became clear that the updated balance of the debt was somewhat larger than the amount designated for this purpose in the second agreement. This is not a large gap, and in these circumstances the parties should be seen as having agreed that the amount originally agreed upon in the framework of the first part of the loan would be slightly increased, in order to achieve the goal of repaying the debt in full to plaintiff 6. It appears that the classification of the entire amount transferred to plaintiff 6 in the framework of the first part is preferable to its artificial liquidation, while attributing part of it to the first part and part to the third part, which is intended at all for a different purpose of financing the ongoing construction costs.
- 00It should not be ignored that when the expert sought to understand by virtue of what the excess amount was given, the defendants referred it to clause 3.3.3.1 of the agreement, which relates to the third part of the loan (paragraphs 91-94 of the opinion). However, this was not the position of the defendants before, and it is not their position now. The expert also rejected the claim, and rightly so (ibid.). Against the background of the undisputed factual basis, which shows that the entire sum was transferred to plaintiff 6 at once, I do not believe that the fact that the defendants claimed otherwise at a certain stage, when their claim was not accepted and they themselves retracted it, justifies reaching a different conclusion.
- Therefore, the total debt for the first part of the loan should be NIS 318,000 plus interest at a rate of 15% per year.
e(2)(2)(2) The amount to be attributed to the second part of the loan
- According to clause 3.2 of the second agreement, the second part was supposed to be in the sum of NIS 300,000, and it was intended to finance the costs of the consultants and the supervisor, with the interest rate for it being 15% per annum.
- In practice, the defendants attributed to the second part of the loan the sum of NIS 672,599 (although in light of the amount included by Boaz Barzili in his affidavit on behalf of the lenders, the sum that will be taken into account is NIS 663,000; see Appendix 5 to the affidavit, as opposed to page 3 of the affidavit relating to the "Consultants-Planners Loan" and "Additional Planners' Payment"; and see also paragraph 129.1 of the opinion).
- The expert audited the sums attributed by the defendants to this part, and concluded that the sums that could be attributed to him amounted to a maximum of NIS 253,000. The expert was of the opinion that the remaining sums should be attributed to the third part of the loan, which, as stated, was intended to finance the costs of building the venture in general, and that the interest rates for it were lower (paragraphs 129.3 and 130 of the opinion). The defendants disagree with the expert's position.
- Contrary to what was stated above regarding the first part of the loan, I am of the opinion that the expert's position on this matter should be accepted.
First, while the first part of the loan is intended for the specific purpose of repaying a debt to plaintiff 6, which is distinguished from actions to establish the venture, the second part is intended to make payments to a variety of consultants. This is a broad goal, and by its very nature the distinction between it and the "construction expenses" that the third part is intended to finance is liable to be ambiguous. This ambiguity should be attributed to the duty of the defendants, who, as stated, had priority in shaping the terms of the second agreement, and who controlled the manner in which the sums they provided in the framework of the loan were classified. Therefore, amounts that can be classified one way or the other, and there is no concrete agreement on their classification, should be classified in such a way that the interest rate on them will be lower.