The notice of the non-conformity can be found in the conduct of the parties in November 2017, when Idan sent various documents to Kalfon at Calfon's request, and even added additional documents that he found. Among other documents, a survey of the land carried out by ESD on behalf of the defendant was sent to Kalfon. Following this, a conversation was held between Kalfon and Lord, in which Kalfon clarified that he did not know about the survey at all. Immediately afterwards, a conversation took place between Kalfon and Vered and Idan in which Vered explained to Mr. Kalfon that it was her job to produce the report so that Mr. Kalfon would receive the approval from the Environmental Unit, she asked Idan directly whether the land was contaminated and he replied that he could not know this and confirmed that the necessary tests had not been carried out under the building.
The fact that after the discrepancy was discovered, the plaintiffs did not involve the defendant or Idan in the proceedings related to the completion of the land survey does not negate the cause of action.
Duty of Disclosure - Provisions of the Contracts Law
- In addition to the breach of the cogent duty of disclosure, which is enshrined in section 16 of the Sale Law, the defendant's conduct amounts to the performance of a contract in bad faith, contrary to the provision of section 39 of the Contracts Law (General Part), 5733-1973. The principle of good faith applies the requirement to act in good faith in the fulfillment of all the provisions of the contract, and requires parties to the contract to act fairly and honestly. One of the expressions of the principle of good faith is the prohibition on a party to an agreement to act in a manner that will harm the spirit of the transaction and its goals: "When a party to a contract conducts itself in a manner that harms the fulfillment of the contract and its purpose, it undermines the principles of the contract and thereby thwarts the will of the parties, and therefore it must be said that it is acting in bad faith. One of the derivatives of this rule is the duty regarding cooperation in order to fulfill the reasonable expectations of the other party to the contract" (Civil Appeal 1966/07 Ariel v. Egged Members Pension Fund Ltd. (September 8, 2010)).
In our case, in the period of time between the conclusion of the agreement and the date on which the agreement was perfected, the defendant is not exempt from the duty of disclosure; The defendant knew very well that the execution of the land survey was postponed and that he did not fulfill the condition set out in the approval in principle, but chose not to update the purchasers with information that is essential to the agreement. The defendant's silence and concealment of the information harms the spirit of the transaction and its goals, and therefore it amounts to bad faith conduct.
- In summary, the defendant breached the duty of disclosure imposed on him by virtue of section 16 of the Sale Law and even acted in bad faith. The defendant knew that a material condition for receiving a building permit for the gas station - the completion of the land survey and the approval of the Ministry of Environmental Protection - had not been completed, and that there was a clear requirement not to begin construction before the survey was completed and final approval was received. The defendant knew of this discrepancy at the time of the "termination of the contract", i.e., at the time of the fulfillment of the suspension condition, and chose not to disclose it. This information was essential and essential for the purchasers, and could have had a significant impact on their decision to enter into the agreement. In doing so, the defendant gave the plaintiffs a property that was substantially different from the one he undertook to deliver, and violated the core of their expectations from the transaction. The defendant cannot exempt himself from this obligation on the grounds that the purchasers are experienced, on the claim of "AS IS", or by not contacting immediately. This conduct establishes the plaintiffs' right to compensation for the damages caused to them.
The Damage
- The plaintiffs are petitioning for monetary compensation for a number of damages: the damage caused as a result of the cancellation of the agreement with Sadash; financing expenses due to the additional time until the land is cleared; expenses related to the renewal of the building permit; and expenses related to payment to various consultants.
- The plaintiffs claim that they were forced to sell the land to Sadash for ILS 15.5 million, while the land was worth ILS 19.5 million. In the statement of claim, they claimed the sum of ILS 4 million, which they claimed was "the difference in the value of the land." In support of this claim, the opinion of the appraiser Avi Shayo was submitted.
- The defendant makes a number of claims in connection with the damage. One of them is the absence of rivalry with plaintiff No. 2, since she is not a party to the original agreement. This argument should be rejected. The right to sue for breach of contract is assignable in accordance with the Assignment of Obligations Law, 5729-1969. The additional companies assigned to plaintiff 2 their full rights in the land, including the rights and grounds deriving from the sale agreement. The assignment of the right was attached to the amended statement of claim. By virtue of this protest, plaintiff 2 stepped into the shoes of the other companies for all intents and purposes, and the damages due to the delay and the arrangement of the licensing were consolidated during the period when plaintiff 2 was the owner of the rights. Therefore, it has a direct cause of action against the defendant, even if the assignment was made after the acquisition of the rights.
The defendant further argues that the declarant on behalf of those with knowledge of her intelligence did not appear for the interrogation and that his affidavit continues, and therefore her claim should be dismissed. I also found this argument to be rejected; The factual and legal framework of all the plaintiffs is the same. If the other plaintiffs prove the claim, then plaintiff 2 is a partner in this success.
- Other claims of the defendant are related to the damages claimed. The defendant claims that not only were the plaintiffs not harmed, but they also earned ILS 4.5 million from the sale of the land. He emphasizes that in their summaries, the plaintiffs abandoned the main claim of damage regarding the "difference in the value of the land" and raised a new claim regarding "loss of cash flow", which constitutes an expansion of a prohibited front.
The defendant argues that the opinion of the appraiser Shayo is unreliable, does not conform to the guidelines for the evaluation of gas stations, and that it has other flaws, such as the use of an extremely low discount rate and the failure to reduce the entrepreneurship component. He emphasizes that this appraisal contradicts a previous objective appraisal (the Odells appraisal), which valued the value of the real estate at a much lower level. The defendant supported his claims regarding the value of the land in the opinion of the appraiser Gil Kedar, who estimated its value as of July 5, 2017 in the sum of ILS 11, 390, 000.