Secondand mainly, even assuming that the interpretation of the sixth term is the same as the defendants' position, the specific provisions relating to the repayment dates show that with regard to these dates, the parties separated the credit facility from the interest. Thus, clause 3.3.1.1 states that the lender will lend "funds in the amount of the credit facility and the costs of the credit facility.". It is clear that the interest amount is not part of the loan, Hence, for the purposes of the section, it is not included in the term "credit facility". Also Clause 3.3.1.2 explicitly states that "the payment of interest shall be paid by the borrowers to the lender no later than the date of completion of the project...", i.e., a concrete date was set for the payment of the sum of NIS 2,700,000, which is the date of completion of the project and not earlier.
The defendants claim that this interpretation, according to which the fixed interest in the amount of NIS 2,700,000 will be paid only upon completion of the venture, is inconsistent with the lender's desire to terminate the financing engagement already after the completion of the construction of the skeleton, to the extent that the members of the group succeed in obtaining bank financing (for this desire, see, inter alia, clause 3.3.1.8 of the agreement). I don't think so. As part of the engagement, each party anchored the things that were important to it, and that the other side was willing to accept them. Among other things, the lender anchored in clause 3.3.1.8 its desire to refrain from continuing financing after the end of the skeleton, but this does not indicate that it was agreed that by that stage all the sums that had already been made available to the members of the group, including the interest on them, should be repaid.
Therefore, the expert was rightly of the opinion that the arrears interest on the interest in NIS 2,700,000 should be added only from the date of completion of the venture.
E(2)(2)(4) The third part of the loan – the second phase
- As already noted, the lender made it clear that it prefers to finance the construction work only until the skeleton is completed, and that after this stage the group members will enter into an agreement with another financing entity (clause 3.3.1.8 of the second agreement). However, the agreement also includes a reference to a situation in which such an engagement will not be formulated, and establishes provisions regarding the financing of the works in the stage after the completion of the skeleton, which, as aforesaid, was referred to in the agreement as "the second phase" (and it should be noted that the defendants' argument, according to which despite what is stated in the agreement, it should be determined that the first phase was completed and the second phase began even before the completion of the skeleton, was not accepted, as stated in the paragraph 77 above).
- These provisions are enshrined in clause 3.3.2 of the agreement, the wording of which seems to have been clearer: clause 3.3.2.1 stipulates that the interest for amounts to be paid in the "second phase"[15] will be at the rate of 7% per annum, "from the end of the month in which the work was carried out until the completion of the project"; clause 3.3.2.2 stipulates that the lender will pay the additional amounts in accordance with the contractor's monthly reports to be approved by the supervisor; and clause 3.3.2.3 stipulates that the repayment date will be 30 days from the end of the venture (clause 3.3.2.4 grants the group members the right to early repayment, and it is not our business).
- The expert noted that the defendants added the interest amounts to the amounts already mentioned on the dates of the performance reports, and even before the actual transfer of the sums. In doing so, the defendants did indeed act unlawfully, since it is clear that interest should not be added before the loan amounts are made. Clause 3.3.2.1, which stipulates that the interest will be calculated "as of the end of the month in which the work was performed", should be interpreted as referring to the situation in which the amount was actually made available at that stage, in accordance with the performance reports and as stated in clause 3.3.2.2 thereafter. The section is intended to emphasize the distinction between the amounts of the first phase, which bear an interest rate of 7% only from the date of the end of the skeleton, and the amounts of the second phase, which bear such interest from the time of their payment.
- In their summaries, the defendants did not raise arguments that have any weight against the expert's conclusion, except for the fact that the board approved the total amount of the debt (the defendants' summaries on page 30 of the transcript of the hearing of September 10, 2025, lines 19-29). As already noted, I do not believe that this approval can replace the provisions of the agreements and their obvious interpretation.
- Therefore, there was no defect in the expert's calculations with regard to the sums provided by the defendants in the framework of the second phase.
E(2)(2)(5) Summary of the Reference to the Amounts of the Debt by Virtue of the Second Agreement
- From the entirety of the above discussion, it appears that there is no reason to intervene in the expert's calculations with respect to the amounts owed by virtue of the second agreement, except for those NIS 18,000 that should be considered as part of the first part of the loan by virtue of the second agreement, and to calculate the interest rates for them accordingly, as stated in the paragraph 68
E(2)(3) Consequences of non-compliance with the provisions of the Third Agreement regarding a Delay
- Clause 9.1 of the third agreement stipulates that the class members have a right to lien at the rate of 5% from each "partial account that will be submitted and approved by the supervisor for the contractor", and that these sums will serve as a "performance guarantee" until the completion of the project (it should be noted that clause 9.2 establishes provisions regarding a 2% lien in relation to the subsequent period, but the plaintiffs did not raise claims under it).
- There is no dispute that in practice the aforementioned sums were paid to the contractor and were not transferred to the members of the group. The plaintiffs claim that the sums are not supposed to bear interest, since in fact the defendants benefited from them without a legal right (page 9 of the transcript of the hearing of October 18, 2025, lines 31-36). The defendants did not raise arguments in this regard in their summaries. However, before the expert, the defendants argued that the right to lien depends on the approval of the accounts by a supervisor, and since no such person has been appointed, it is not available to the members of the class. In the affidavit of the lender's representative, it was also claimed that the group committee did not protest the payment of the sums to the contractor, and that it was not in the lender's business to insist on the rights of the class members in their relations with the contractor (paragraphs 74-77 of the affidavit of Boaz Barzili on behalf of the lenders).
- It seems that it is not for nothing that the defendants did not repeat these arguments in their summaries.
As to the first argument, the agreement does not condition the right of lien on the existence of a supervisor. The statement in clause 9.1 that the right exists with respect to an account "to be submitted and approved by the Supervisor..." It is intended to clarify, for the benefit of the contractor, that the lien will be calculated from the amount that is supposed to be paid, and not from another higher amount (such as an account that was submitted and not approved). In any case, in the absence of the supervisor, the lien should apply to any amount actually paid, depending on the accounts. This conclusion arises not only from the language of the agreement, but also from the purpose of the lien, which was intended to serve as a security for the execution of the works. Such assurance is also required, and perhaps especially, in the absence of a supervisor (see also the expert's words in paragraph 108 of his opinion).