In addition to the aforementioned compensation, the plaintiff petitioned to obligate the defendants to pay the expenses he incurred due to the act of fraud and the conduct of the criminal proceeding, in the total amount of ILS 27,020 (a total of 7,020 attorney's fees, and a total of ILS 20,000 in a monetary fine).
Our eyes see that the compensation claimed by the plaintiff includes both types of compensation, anticipation/subsistence compensation (the value of a legally built apartment) and reliance compensation (the expenses of the criminal proceeding and loss of income from the apartment). However, the two types of compensation mentioned above cannot coexist because they are based on conflicting interests, since the subsistence compensation is based on the assumption/expectation that an agreement has been made between the parties for the sale of a residential apartment with a lawful building permit, while the expenses incurred in the criminal proceeding and loss of income are based on the assumption that it is an "apartment" without a lawful building permit (see Civil Appeal 3805/17 Kibbutz Kramim - Antipod Investments in a Tax Appeal [Nevo] (June 25, 2019). Moreover, the combination of the two types of compensation mentioned above, subsistence compensation and reliance compensation, which includes loss of opportunity, may lead to double compensation.
Therefore, the following discussion will focus on the expectation/existence compensation.
- As I determined above, the defendant breached the sale agreement entered into between it and the plaintiff (see paragraph 34 above), and in these circumstances, the plaintiff was entitled to receive positive damages, subsistence compensation, by virtue of Section 10 to the Drugs Law, which place it where it would have been if the agreement had been fulfilled and not violated by the defendant. This is compensation for the damage caused to the plaintiff as a result of the breach and its consequences, and which the defendant saw or should have seen in advance at the time of entering into the agreement, as a probable result of the breach as stated in section 10 of the Drugs Law. Therefore, The plaintiff is entitled to compensation from the defendant that reflects the value of the ownership rights in the "apartment" as an apartment built according to a lawful building permit, in the sum of ILS 650,000, in accordance with the opinion of the appraiser on his behalf, Mr. Volkan. It should be noted here that the appraiser on behalf of defendant No. 2 (Adv. Manor), Mr. Haim Ben Ari, also estimated the market value of the property as a permit-built apartment, as of October 31, 2020, within the limits of the sum of ILS 648,000.
- About Adv. Manor - Counsel for defendant No. 2 (Adv. Manor) argued that, to the extent that a charge is imposed on Adv. Manor, this obligation is supposed to express the harm to the plaintiff's reliance interest, while referring to the Supreme Court's ruling, which determined that the compensation imposed for the tort of negligent misrepresentation is, as a rule, negative compensation, reliance damages, whose purpose is to return the injured party to the state in which he would have been had it not been for the act of wrongdoing. It is not intended to fulfill the expectations of the injured party that were not fulfilled due to the tort.
However, in our case, in addition to the tort of negligence, Adv. Manor is liable to the plaintiff for the tort of deception/fraud enshrined in section 56 of the Torts Ordinance (see section 36 above), and in the Zalesky case it was held that in circumstances where the tort involves an act of fraud, there is justification for awarding positive damages (subsistence damages). Thus it is written in the aforementioned parasha: