Civil Case (Center) 26264-12-20 Sal Or Construction Company Ltd. v. Shmuel Golovok

Judgment

I have before me a lawsuit concerning a real estate sale transaction on Yohanan the Cobbler Street in Kfar Saba.  The land, which had previously been used as a leather processing plant, was sold to the plaintiffs for the purpose of building a gas station.  After the completion of the transaction, disputes arose between the parties, against the background of the plaintiffs' claim that during the negotiations, material information regarding the contamination of the land was concealed from them, and that as a result, they suffered heavy damage.

Background

1. The defendant, Shmuel Golovok, was at the relevant times in the claim the owner of the rights in the land known as Plot 56 in Block 7607 at 12 Yohanan HaSandler Street, Kfar Saba (hereinafter - the Real Estate). From 1955 to 2006, a leather processing factory operated on the land.

The factory closed in 2006.  Subsequently, the land was leased to third parties, and other businesses operated on the property, including a 44X car workshop and trailer parking.  In 2011, the defendant, with the assistance of his son Idan Golobok (hereinafter: Idan), began the process of obtaining a building permit for the construction of a gas station and a commercial building on the land.

2. On August 1, 2013, a building permit was granted under conditions for the construction of a gas station, a commercial building and offices (hereinafter: the approval in principle). Among other conditions, a requirement was made to obtain an opinion from the Regional Environmental Protection Unit and to prepare a soil inspection report.
3. On August 11, 2014, an agreement was signed (hereinafter - the Agreement) between Basket Or Construction Company Ltd. (Plaintiff 1), Eli Orin Investments Ltd.  and Daushin Assets Ltd.  (hereinafter - the Additional Companies), together with Sharon Darshan Ltd.  (Plaintiff 3) and the Defendant.  In accordance with the provisions of the agreement, plaintiffs 1 and 3 and the other companies (hereinafter - the purchasers) purchased the land in exchange for payment of the sum of ILS 11, 000, 000.  Clause 3 of the agreement stipulates a conditional condition for the entry into force of the agreement - receipt of a building permit from the local committee for the construction of the gas station and the commercial building until January 15, 2016 (or to a postponed date agreed upon by the parties) - otherwise the agreement will be void retroactively (hereinafter - the suspended condition).  In the agreement, the defendant declared, among other statements, that "at the time of signing the agreement, the seller was not aware of the existence of underground waste and/or any environmental hazards originating from the land and/or any antiquities and/or any land pollution and/or any other pollution in the land" (clause 4.15).
4. On December 17, 2015, the parties to the agreement signed an "Appendix to the Sale Agreement" in which the date for the fulfillment of the suspension condition was postponed to March 15, 2016. The dates set for the payment of the consideration were also postponed.
5. On March 6, 2016, a building permit was issued for the construction of a gas station and a commercial building, and the next day the defendant sent it to the buyers' attorney.
6. In December 2016, the additional companies sold their rights in the land to plaintiffs 1 and 3 and to plaintiff 2 - Yodai Bina Development and Investments Ltd. (plaintiffs 1-3 hereinafter collectively - the plaintiffs).
7. On April 30, 2017, and after a number of extensions were given to them, the plaintiffs paid the full consideration stipulated in the agreement, and possession of the land was handed over to them.
8. The plaintiffs entered into an agreement with Sadash-Fuel and Oil Agents Ltd. (hereinafter: Sadash) in a lease agreement according to which they would build the gas station on the land and Sadash would lease the land on a long-term lease.
9. The plaintiffs began carrying out the work to demolish the old factory. When the excavation work began, there was concern that the soil might have been contaminated.  The plaintiffs' representative contacted Idan and then discovered that in 2015 the defendant had hired the services of ESD to inspect the property, but had not completed the inspection, and that they had to obtain additional approval from the Ministry of Environmental Protection as a condition for construction.  Later, the plaintiffs found out that the land was indeed contaminated.
10. On May 5, 2019, Sedesh notified the plaintiffs of the cancellation of the agreement. On December 31, 2019, the plaintiffs sold the land to Sadash for the sum of ILS 15, 500, 000.
11. The Ottoman Settlement [Old Version] 1916The plaintiffs approached the defendant, claiming that he had concealed material information regarding the land from them. They also claimed that the discovery of the contamination forced them to deal with considerable costs of conducting land surveys and taking measures to clean up the land and remove the contamination.  In addition, they had to deal with significant delays in the planned project due to the same pollution.  These delays led to loss of revenue and a decline in the value of the land.

12-34-56-78 Chekhov v.  State of Israel, P.D.  51 (2)The defendant replied to the plaintiffs that they were well aware of the condition of the land and its past uses; that the responsibility for inspecting the land and the risks involved in its purchase was transferred to the purchasers within the framework of the agreement; and that he acted in good faith and with full transparency throughout all stages of the transaction.