Clause 6.7 of the Agreement further stipulated that
Without prejudice to the aforesaid, any borrower who repays his debt in full, subject to the provisions of this agreement, will be allowed to receive from the lender a letter of exclusion from the mortgage and after receiving the board's approval that he has repaid his debts in full.
As will be detailed below, two of the main disputes between the parties are related to the interpretation of the provision of the aforementioned clause 6.6: the question as to what is required by the status of the card to be issued by the board in accordance with the clause, and the question of whether the clause teaches that at the stage of registering the specific liens, the liability regime "jointly and severally" set out in the agreement is supposed to change to a "several" liability regime, so that each member of the group Will be responsible Only for the individual debt attributed to him.
- The third agreement, which was entered into on the same day between the members of the class and the contractor, bears the title of "Contract for the Execution of Construction Works" (hereinafter: the third agreement, and it was attached as Appendix 8 to the statement of claim). The agreement stipulated, inter alia, that the contractor would carry out all the work necessary for the construction of the venture, until approval of occupancy ("Form 4"), in exchange for the sum of NIS 25,000,000, which, as recalled, is the amount of the credit facility provided by the lender for the purpose of construction (clauses 7 and 12 of the agreement; Appendix D to the agreement; as well as the definition of the term "works" in clause 1.4 of the agreement). It was agreed that the payments would be made in accordance with the progress of the works, according to monthly accounts submitted by the contractor and approved by the supervisor, and that it would be possible to withhold 5% of the amount of each account to secure the contractor's obligations by virtue of the agreement (Appendix D and clause 9.1 of the agreement). It was also agreed that the works would be completed within 24 months, which would begin 14 days after the date of arranging the financing for the project, and that a delay of up to 90 days would not constitute a breach (clause 10.1 of the agreement). It was also noted that in the event of a change in plans, an additional payment and an extension of deadlines would be agreed upon "according to the circumstances and nature of the change" (clause 7.3 of the agreement). It was also agreed that a delay in completing the works would lead, inter alia, to the contractor being obligated to pay the sum of NIS 150,000 per month for all the members of the group starting from the fourth month, in accordance with the provisions of the agreement (clause 16.8 of the agreement).
B(2) The establishment of the venture and the main events that followed
- The financing for the project was arranged on the day of the signing of the third agreement, by virtue of the second agreement signed on the same day. Therefore, the date of the commencement of the works after 14 days was 13 May 2015, and the date on which the work was supposed to be completed, after 24 months, was 12 May 2017.[2]
- On May 19, 2015, the contractor contracted with another company for the purpose of carrying out the works (Appendix 7 to the affidavit of plaintiff 1). The work began, and their progress was documented in the performance accounts prepared by the contractor (see Exhibit N/2; some of the accounts were also attached as Appendix 8 to the affidavit of Plaintiff 1). It should be noted that the members of the group did not appoint a supervisor on their behalf.
- The work was completed in 2017, but the occupancy approval was given only on May 19, 2019, i.e., about two years after the date set in the agreement (For reasons for this, I will refer to in chapter 5(3)(3), paragraph 114 and hereafter below).
On May 2, 2019, shortly before the approval of occupancy was granted, Signed by the members of the group committee on a document, which was also signed by the contractor, in which it was stated, inter alia, that