As for the second claim, as will be explained below, the defendants should be regarded as a "single business economic entity" in their relations with the plaintiffs (see chapter E(3)(1), paragraphs 95-100 below). Therefore, they had to ensure that the amounts were transferred in accordance with the provisions of the agreements. The silence of the group committee does not indicate that it agreed to grant the contractor a benefit that she was not entitled to.
- The conclusion is therefore that the provisions of the third agreement were not properly complied with, since the withholding amounts were not transferred to the class members and were instead paid to the contractor or anyone on its behalf. What is the implication of this situation?
Contrary to the plaintiffs' claims, the second agreement does not stipulate that the lien amounts are not part of the loan. Therefore, once the sums were made available as a loan, the lender is entitled to interest on them (see also paragraph 109 of the expert opinion).
However, if the sums had been transferred to the group members as required, they could have invested them and receive fruits for them. From another angle, the sums came into the hands of the contractor without a legal right, and therefore she must return the pleasure she enjoyed (see Section 1 to the Unjust Enrichment Law, 5739-1979; See also the expert's testimony on page 126 of the transcript of the hearing of September 10, 2025, lines 26-35). As mentioned, In relations with the plaintiffs, the contractor and the lenders are one economic entity, Therefore, the contractor's duty is the duty of the lenders.
- It therefore appears that the amount of interest should be deducted from the amounts of the debt to the defendants in accordance with the law applicable to the lien amounts, in relation to the period from the date of the transfer of each and every sum until the receipt of the occupancy certificate, at which point the right of lien for the purpose of an "performance guarantee" on which the plaintiffs relied ends. This sum reflects the loss of profit for the plaintiffs, as well as the benefit that the defendants should have assumed from receiving the sums and the possibility of using them.
- In the margins, it should be noted that in clause 9.4 of the third agreement, it was determined that "this chapter will be frozen and will not be implemented as long as the project is financed by a non-bank entity". It is possible that the clause could have had an impact on the above conclusion, but the defendants did not raise arguments on the matter, and in any case I am not required to do so.
- I have therefore clarified how, in my opinion, the amounts of the debt to the lenders should be calculated, in accordance with the provisions of the law and the provisions of the agreements. Now we must turn to the next question, which is the balance of liabilities between the plaintiffs and the contractor and its impact on the debt to the lenders.
(3) Are the plaintiffs entitled to claim the offset of the contractor's debts to them for delay in delivery and an exemption from interest for the period of delay?
- The plaintiffs claimed that from the amount of their debt to the lender, they were entitled to offset a debt owed by the contractor to them due to the delay in delivering the apartments. The plaintiffs also argued that due to the period of delay, they should be exempted from interest for the lenders, since during this period the impediment to repaying the loans, by way of the sale of the apartments or their lien, stemmed from the defendants. This argument requires addressing three sub-questions:
First, whether the contractor and the lenders should be treated as a "single business economic entity" in their dealings with the plaintiffs, in a manner that allows each of them to attribute the debts of the other;