I will preface by saying that after hearing the arguments of the parties, I heard the testimonies, I examined the evidence, and in all that was brought before me, I was satisfied to accept the claim of the Champions Workshop in part, and to accept the claim of Meitar in part, and I will explain;
In summary of the claims of the Champions Workshop and the Drive Islands
- The Champions Workshop fulfilled its obligations under the lease agreement in full and on time, from the signing of the agreement, until the events that are the subject of the lawsuit. Meitar's attempts to claim that the Champions' Workshop violated the agreement and systematically paid the rent late were refuted, and there is no basis for her claims, including the agreed compensation.
- Meitar sought to create a negative image of the Champions Workshop, according to which the real reason for the evacuation of the property was not due to the coronavirus crisis, but rather to the allegedly systematic conduct of the Champions Workshop, which was late in paying the rent, and supposedly dragged Meitar into expenses regarding an alternative tenant. This is as a result of financial difficulties.
- In light of the COVID-19 crisis, on March 12, 2020, the World Health Organization declared COVID-19 a "global pandemic." Emergency regulations were published, which restricted the public. In light of the above, all the employees of the Champions' Workshop were placed on unpaid leave. The garage that was in the leased and the sales agency in it ceased to operate completely. Therefore, the deal of the Champions' Workshop ceased to function, the revenues dropped to zero, and it was clear that it was not possible to continue paying the rent. This is an unforeseen circumstance.
- One would have expected Meitar to show consideration for the Champions' Workshop. However, Meitar showed an aggressive approach, and demanded that the rent be settled immediately.
- Moreover, Meitar refused to return the rent to the Champions' Workshop for the relative share of March 2020; demanded the full rent for April 2020, and warned that if the payments were not paid, it would submit the bank guarantee for forfeiture. Also, she requested that she be paid the agreed compensation.
- Meitar's claim, according to which the leased property was operated by the Champions' Workshop during the lockdown, has been proven to be false. It should be emphasized that Meitar did not show any consideration for the Champions Workshop, and did not propose any reduction in rent. Moreover, no evidence was attached that rent was reduced in the case of another tenant.
- In light of Meitar's conduct, which did not show consideration and did not offer a reduction in rent, the Champions Workshop was forced to vacate the property due to the thwarting of the lease agreement.
- It should also be noted that Meitar acted to forfeit the bank guarantee, and did not allow the Champions' Workshop to vacate the air conditioners in the leased property at a value of ILS 85,118.
- Counterclaim - In the statement of claim, Meitar petitioned the component for rent in the sum of ILS 761,547, while at the time of the hearing of the evidence, it reduced this component to the sum of ILS 233,849, for a period of 7 months. And all this, without amending her statement of claim. The Champions Workshop insists on its objection to the "amendment", as stated, since it is a different cause of action.
- On the merits, Meitar did not act to reduce the damage. Meitar did not take any step, as early as possible, in order to locate an alternative tenant, and it was not proven that such an attempt was made.
Meitar located a tenant and signed a lease agreement with him only on September 21, 2020, when the lease stood empty for about 5 months. In this context, it should be noted that Meitar leased 535 square meters in the amount of ILS 21,000, which indicates that there was no reduction on Meitar's part.
- Meitar falsely invents that the Champions' Workshop caused "damages" to the leased person, which was not proven by her. And yes, the opinion of the Hindu appraiser should not be accepted, with regard to the alleged damages, in light of his investigation.
In summary of Meitar's arguments
- The Champions' Workshop took the law into its own hands, and under the guise of the Corona pandemic, blatantly violated the lease agreement, thus causing financial damage to Meitar and physical damage to the tenant. Therefore, we must be obligated and Ai Drive, which gave a guarantee for the obligation of the Champions Workshop.
The Champions Workshop stopped paying the rent on its own in April 2020; abandoned the leased property at the end of April; It did not restore the leased property to its former state, and allowed significant damage afterwards. It also uprooted and took away the air conditioning systems, in violation of the provisions of the lease agreement.
- The coronavirus crisis was exploited by the Champions' Workshop, in bad faith, to terminate the lease ahead of time, against the backdrop of economic difficulties and internal conflicts, even before the outbreak of the pandemic.
It should be emphasized that at the end of April 2020, the Israeli economy returned to activity, and the government compensated business owners for their losses. In this context, it should be noted that the Champions Workshop has decided to violate the agreement and take advantage of the situation to escape from the lease agreement. Shortly after the abandonment of the leased property, the Champions' Workshop opened the same business in the industrial zone in Binyamina. Later, the Champions' Workshop abandoned the rented property in Binyamina as well.
- The Corona pandemic did not "free" the Champions Workshop from its positive existence. The purpose of filing the lawsuit on behalf of the Champions Workshop is part of a losing tactic, in an attempt to disguise its actions.
- Levy was chosen to testify, even though he is not the owner of the Champions Workshop, nor does he serve as its director or director. Moreover, Levy did not manage the business of the Champions' Workshop in the leased house, and was not personally involved.
- The Champions' Workshop made a conscious and deliberate decision to stop paying the rent. This did not happen without a choice. Anavi stated that no one on behalf of the Champions Workshop approached him with a request to reduce the rent or temporarily suspend their payment. Levy did not present a contradictory version on this matter.
- The Champions' Workshop violated its obligations under the lease agreement, without any justification. The only defense argument on which the Champions Workshop relies is the thwarting claim. It was ruled that we are not dealing with thwarting.
- The defense of thwarting is set forth in section 18 of the Drugs Law, and it provides the violator with protection from an enforcement or compensation lawsuit, temporary and limited in scope, when three cumulative conditions are met, the burden of proof of which rests on the person claiming to thwart. The first condition is the expectation condition, the existence of circumstances that the breacher did not know and should not have known about at the time of entering into the contract; The second condition requires that the performance of the contract has become impossible or fundamentally different from what was agreed; The third condition is the preclude clause, in which the breach could not have prevented the circumstances for which the existence of the agreement was thwarted; The Champions Workshop did not meet these three conditions. The Champions Workshop did not find itself in a situation of thwarting, but rather initiated the termination of the lease agreement, and cannot rely on the coronavirus pandemic as a justification for non-payment of rent, and/or as a justification for unilateral notice of the termination of the agreement and the abandonment of the tenant.
- Meitar did everything in its power to minimize its damages, and acted to bring in an alternative tenant, as soon as possible.
- Meitar insists on receiving the agreed compensation, as stated in clause 24(b) of the lease agreement, which stipulates three months of rent.
In summary of the answer of the Champions and Islands Drive workshop
- Meitar fabricated about delays in the payment of rent that did not exist and were not created.
- Meitar raises atmospheric claims, and understands that an analysis of the assassination claim requires acceptance of the Champions Workshop's claim. Meitar is trying in every way to present the leased property as detached from the coronavirus pandemic, while all the evidence indicates the exact opposite.
- The claim of thwarting must be examined in real time, and not retroactively. In any case, the Champions Workshop could not have anticipated the Corona pandemic; could not have prevented the pandemic; The implementation of the agreement, in light of the pandemic, was impossible, and at least fundamentally different from what was agreed upon between the parties. A similar result can be achieved in other ways, and not only by accepting the claim of thwarting.
- The Champions Workshop acted appropriately and responsibly, when it vacated the property, due to an inability to make use of it. And yes, Meitar showed no desire to be flexible.
- From the perspective of justice, too, there is no justification for placing the responsibility for the COVID-19 pandemic and its consequences on the shoulders of the Champions Workshop alone.
- Another way to reach the result of rejecting a Meitar claim is based on the principle of good faith. This principle makes it possible to deviate from the provisions of an agreement, and to soften the rigidity of the contractual relationship.
- The counterclaim was not amended, Meitar claims in its summaries claims damages that are not the damages claimed by it in the statement of claim, and this is an extension of the front.
Discussion and Decision
- As mentioned, the main questions that require a decision are whether the Champions Workshop was entitled to terminate the lease agreement, in light of the coronavirus crisis; the issue of thwarting; whether the Champions Workshop is entitled to receive the value of the air conditioners it installed in the leased property; whether the Champions Workshop is entitled to a refund of half of the rent for the month of March 2020; whether the Champions Workshop is entitled to receive the forfeited guarantee for the months of April and May 2020; what is the fate of the counterclaim? i.e., whether the Champions Workshop should be obligated during the lease period until the replacement tenant enters; whether Meitar is entitled to the agreed compensation;
As stated above, after hearing the arguments of the parties, I heard the testimonies, and examined the evidence, and in all that was brought before me, I am satisfied to accept in part the claim of the Champions Workshop, and to accept in part the claim of Meitar, and I will explain;
- It should be noted that between the Champions' Workshop and Meitar , a lease agreement was signed, dated 03.01.2017.
There is no dispute that the Champions' Workshop left the leased property before the date set in the lease agreement. However, there is a dispute as to whether she left lawfully. In addition, there is disagreement as to the reason for leaving the leased property - whether due to the financial situation and internal disputes in the Champions' Workshop, or only due to the coronavirus crisis.
- According to the Champions Workshop, she left the rented property, following the coronavirus crisis. According to her, Meitar sought to create a negative image of the Champions Workshop, according to which the real reason for the evacuation of the property was not due to the coronavirus crisis, but rather to an allegedly systematic conduct in delaying rent payments, which supposedly dragged Meitar into expenses regarding an alternative tenant. This is as a result of financial difficulties.
- On the other hand, Meitar claims, in summary, that the Champions' Workshop stopped paying the rent on its own in April 2020; abandoned the leased property at the end of April; It did not restore the leased property to its former state, and allowed a lot of damage after it. It also uprooted and took away the air conditioning systems, in violation of the provisions of the lease agreement. According to her, the Champions Workshop took the law into its own hands, and under the guise of the Corona pandemic, violated the lease agreement, thus causing financial damage to Meitar and physical damage to the tenant.
- First, Meitar's claims that the Champions' Workshop violated the lease agreement, even before the coronavirus crisis, have no substance, as will be explained below.
Anavi stated (paragraph 8 of his affidavit) that Meitar's lawyers contacted the Champions' Workshop regarding non-payment of rent back in 2017. In his testimony, Anavi testified that this was a mistake in his affidavit, and according to him, the warning letters for the Champions' Workshop were in 2018 (p. 28 of the transcript, line 15).