Since the project took longer than expected, and the parties arose from both parties controlled by the receiver and by reasons controlled by the group, the board hereby decides that the engagement will be terminated without mutual claims.
(This document will be referred to hereinafter: the waiver of claims, and it was attached as Appendix 7 to the statement of defense on behalf of defendants 1-2).
Like clause 6.6 of the second agreement, this document is also at the heart of one of the disputes between the parties, in view of the plaintiffs' claim that they have the right to offset their debt to lend the contractor to them due to delay in delivery. Therefore, I will address it later (see chapter e(3)(2), paragraph 101 onwards below).
- As stated, both the first and second agreements stipulated that the liability of the class members is "all together and each separately", but clause 6.6 of the second agreement established provisions that enable the conversion of the mortgage registered on the land as a whole into an individual lien in relation to each member's share, after it is possible to do so, and the erasure of the lien if the debt attributed to that member is paid. Naturally, there were members of a class who wished to act in accordance with these provisions, if only to bring about that their rights would be registered and free from encumbrance.
Indeed, some time after receiving the occupancy certificate, a procedure began to register the individual rights of each group member in his share of the land. At the same time, the group committee examined documents presented by the defendants in relation to the costs of the venture and its financing. Including Through professionals on his behalf, And on June 24, 2020, he signed a document entitled "Criminal Appeal Card, Agreement to [Y]v" (hereinafter: The Ticketing, Appendix 15 to the statement of claim and Appendix 3 to the statement of defense on behalf of defendants 1-2). This card, which was issued by virtue of the aforementioned clause 6.6, details the amount of the debt of each group member as well as the total debt that stood at NIS 37,351,000, as of May 31, 2019, i.e., shortly after receiving the occupancy certificate.[3] One of the disputes between the parties is, As mentioned, Can the plaintiffs dispute the amounts of the ticket?, and this In view of clause 6.6 of the second agreement.
- Subsequently, some of the class members signed additional agreements with the defendants, in order to enable the registration of their individual rights while exhausting claims regarding the balance of the debt. According to what is stated in the additional agreements, they were also terminated following insolvency proceedings in which one of the group's companies found herself. In the framework of the agreements, it was noted, inter alia, that the position of the lenders is that the liability of the group members for the total amounts of the debt is jointly and severally, but that they will be satisfied with the payment of the debt attributed to the signatory member, while receiving a guarantee from the contractor for the debt of the group company that has encountered difficulties as aforesaid. In return, the group members who signed the additional agreements waived any claim regarding the manner in which the amount of debt attributed to them was calculated, and even undertook to pay NIS 50,000 if they breached their obligation. In addition, in order to obtain the contractor's guarantee for the debt of that group company, it was agreed between them and the contractor to exhaust the mutual claims, including with regard to a delay in delivery or construction defects until that date (see Appendix 21 to the statement of claim and Exhibit A/3).
From a material point of view, therefore, in the framework of the additional agreements, the defendants waived Towards the Signatories On their claims of liabilitym Together and separately Total Debt, and were satisfied with paying the specific debt attributed to each of them; On the other hand, those signatories waived claims regarding the manner in which their specific debt was calculated, as well as claims regarding late delivery and construction defects up to that date.
- The plaintiffs did not agree to sign the same additional agreements. According to them, the defendants sent them letters of warning for payment from time to time, but on the other hand, they did not specify the amounts of debt they attributed to them, and when they stated the required amounts, they were unfounded. It was argued that this conduct prevented the plaintiffs from bringing about the erasure of the lien, and did not allow them to carry out transactions with their rights in the land in order to repay the debt (see Appendices 22-24 to the statement of claim; Appendices 16-20 to the affidavit of plaintiff 1; appendices 1-2 to the affidavit of plaintiff 2; and Appendix 1 to the affidavit of plaintiff 3, which was also attached as Appendix 6 to the statement of protection of the lenders).
- Subsequently, plaintiff 1 filed an action against the defendants and against the two other brothers of the Barzili family, Gilad and Boaz, and petitioned for various remedies. This claim was dismissed by consent, while mutual transfer of documents was agreed, including the defendants' documents related to the venture and its financing, as well as details of the calculation of the plaintiff's alleged debt balance (Civil Case 18260-10-20; see Appendices 21-23 to Plaintiff 1's affidavit). Some time later, the lawsuit was filed here.
- The main arguments
- As stated, in the current form of the claim, the plaintiffs' main remedy is to declare the amount of each of their debts to the defendants (see decision of July 3, 2024).
- In the statement of claim, the plaintiffs raised a series of claims against the defendants, including regarding funds that were supposedly included in the loan amounts by virtue of the second agreement, but were not actually transferred to the contractor at all. However, an opinion on behalf of the court's expert appointed in the proceeding, as detailed below, addressed this matter and removed the ambiguity that existed regarding it. Therefore, today the plaintiffs also do not dispute that the sums claimed by the defendants were indeed transferred for the purpose of financing the construction of the project.[4]
- At this time, the plaintiffs' arguments regarding the manner of calculating the debt are, first, that their liability is personal to the defendants, each as his relative share in the total debt of the class members, as opposed to liability "jointly and severally" with all the members of the class, which means that the plaintiffs owe the defendants the total balance of the debt. In this context, it was argued that although the first agreement and the second agreement stipulate that the liability of the class members is "jointly and severally", the provision of clause 6.6 of the second agreement changes this from the date of registration of the individual liens on the rights of each member. The plaintiffs find support for this in the conduct of the defendants, who cling to a card that, as aforesaid, attributes to each class member a specific part of the debt, and even agreed to exempt other class members from their liability for the debt of all the class members, in accordance with the additional agreements made with them (para. 14 above).
It was also argued that with regard to the calculation of the total amount of the debt, the interest amounts determined in each of the agreements should be reduced: the interest on the loan in the amount of NIS 628,168 in the first agreement should be reduced so that it stands at the "maximum cost rate of the credit", in accordance with the provisions of the Fair Credit Law, 5753-1993 (hereinafter: Fair Credit Law); and the nominal interest in the amount of NIS 2,700,000 in respect of the loan for the construction of the venture in the second agreement - A loan whose amount does not meet the restriction mentioned in the law - It must be reduced due to the breach of the disclosure obligations in section 3 of the law. It was argued that the provisions of the second agreement contain a real lack of clarity regarding the amounts of interest on the various parts of the loan, and that the remedy should be a reduction in the interest rate, so that instead of the aforementioned interest, a uniform interest rate of 7% per year will be imposed. This lesson was taken because it is a lesson The interest rate determined in relation to the other sums made available for the purpose of the venture by virtue of that agreement, at the stage after the termination of the skeleton which was referred to in the agreement as the "second phase" (See paragraph 7 above).
- It was further argued that the plaintiffs have the right to offset their debt to lend the contractor's debt to them due to the delay in the delivery of the apartments, since the contractor and the lenders operate as one economic unit.
With regard to the debt claimed on its merits, it was noted that according to the dates set in the third agreement, the occupancy certificate was supposed to be given on May 13, 2017, but in practice the approval was given As mentioned Only in May 2019, we were about 24 months late. According to the provisions of the agreement, the group members are entitled to compensation in the amount of NIS 150,000 for each month of delay starting from the fourth month, and therefore the contractor's obligation to all the group members is NIS 3,150,000 as of the date of the delay, and NIS 75,000 for each member separately. It was also argued that the delay justifies not obligating the plaintiffs to pay interest to the lenders for the period of delay, since otherwise the defendants would benefit from their failure to complete the works on time, which prevented the earlier repayment of the debts by selling the apartments or pledgeing them.