In other words, even if we assume for the purpose of the discussion that the period of closures and severe restrictions (for which rent was paid from the redemption) would have met the conditions of expectation and impact - it is not possible to reach the conclusion that it formulates the conditions of effect even for the period relevant to the claim (as of July 2021; a period in which there were softened restrictions) because Babylon's expectations that it would be able to operate the leased property for a significant period of time at rent per revenue only in order to establish the playground were not realized.
Certainly, this is not a permanent impediment that completely disrupts the fulfillment of the contract, as required by case law (see, for example, Civil Appeal 5054/11 Sapir and Barkat Real Estate (Holiland) in Tax Appeal v. Adv. Yaakov Amster, at paragraph 35 [Nevo] (March 7, 2013); and compare in the circumstances of the Corona pandemic to an objection to the execution of a deed (Shalom B.Y.) 45354-04-22 Shomron v. Enav (November 22, 2022); Civil Case (Shalom Tel Aviv) 28260-05-20 Mandin in TaxAppeal v. M.N.M. Shahaf inTax Appeal [Nevo] (August 22, 2023); Civil Case 57787-06-20 Bolda v. Mizrahi [Nevo] (October 9, 2024); Civil Case (Shalom Tel Aviv) 18585-05-20 Champions Workshop in Tax Appeal v. Meitar Infrastructure and Communications Execution in Tax Appeal [Nevo] (December 12, 2024)). At most, in the circumstances of the case, it is a matter of non-fulfillment of Babylon's expectation. This expectation does not fall within the scope of the plaintiff's obligations in the agreement and is deeply rooted in the risks that Babylon assumed in the transaction (compare, the Isonik case at paragraph 39).
- In this regard, it is therefore possible to refer to the words of the Honorable Justice E. Stein in an application for leave to appeal that was rejected in the Isonik case, where it was held, inter alia: "The Applicant wishes to transfer to the Respondent, the owner of the land, part of the damage caused to her as a result of the Corona outbreak. This is a redistribution of contractual risks - a far-reaching move that lacks any justification" (Civil Appeal Authority 7637/22 La Rhine Development and Events in Tax Appeal v. Isonik Kid Systems inTax Appeal [Nevo] (November 17, 2022)). The same is true in our case.
The plaintiff's demand to charge Babylon a minimum rent according to the agreement is not in bad faith
- Babylon further claims in its summaries that Ravetz's demand to charge her a minimum rent according to the agreement as of July 2021 is in bad faith. It was claimed that the opening of the leased property was postponed for many months due to the impossibility of carrying out adaptation work for the purpose of qualifying the leased playground as a playground due to the 68 days of closure that preceded the opening, and that in the period following the opening of the playground for 154 days, the activity ceased completely as a result of the closures, which caused Babylon severe damage. According to Babylon, "the plaintiff's insistence on fulfilling the agreements as written and worded, and this under flexibility, even if slightly, in the terms of the lease in order to alleviate the defendants in their distress and due to the exceptional circumstances that characterized the coronavirus crisis, constitutes a serious lack of good faith - especially in view of the thwarting of the agreement" (paragraph 56 of the summaries). It was argued that the lack of good faith gives Babylon a remedy of denying the enforcement of the agreement, and at least the right to reduce it. The claim should be rejected.
- Admittedly, as noted, the evidence shows that Babylon did indeed expect a significant period in which the playground would operate as usual and without restrictions (the coronavirus), during which the rent to be paid would be from the revenue only in order to facilitate the consolidation of the business and its cash flow. In fact, there is no dispute that for this purpose the agreement stipulates the period of the first two years, during which the rent is derived from the redemption only (without the obligation of minimum rent), as also emerges from the testimonies of Aviel and Yoel (e.g., pp. 55, 81-83 of the transcript). There is also no dispute that this expectation was not realized, and it is also possible to accept as a matter of logic and common sense the claim that the circumstances of the Corona pandemic made it difficult to establish the business and harmed its revenues, to one degree or another, whether the business plan that was formulated and presented to the plaintiff - about which the plaintiff has various claims - was realistic or not.
- This conclusion can be reached even though Babylon did not present complete financial data, but rather meager data that was hardly supported by documents.
Among other things, Babylon did not present evidence to substantiate an investment of ILS 11,400,000 in the playground, as stated in the affidavits casually, without detail and without support in the documents (for example, paragraph 30 of Effi's affidavit), and in CPA Eini's cross-examination, she testified that Babylon's investment in the building was approximately ILS 2.4 million (out of an investment of ILS 6 million, which also included the plaintiff's investment) and the rest of the investment (approximately ILS 9 million) was in Babylon's equipment that she vacated upon her departure from the leased property (p. 99 of the transcript; Effi's testimony at p. 163).