However, following the petition submitted by the company to the court, an agreement was reached that the matter would be brought before the city council, and the council approved the renewal of the engagement with the company and the second addendum to the agreement was signed.
- In light of the company's details of damages, the municipality claimed that the company had presented it with a false representation regarding its financial ability to finance the project - the purchase of the land and the operation of the protected housing, when in fact the company admitted that it relied on funding from third parties and had enacted rights in violation of the tender and the agreement.
It was argued that the company's loan agreement that it presented and on which it relies as a basis for proving its damages, included an agreement to sell the project to a third party, which is contrary to the objectives of the tender and the provisions of the agreement.
The Municipality rejected the company's claim for damages, arguing that it did not lift the burden of proof and did not prove the alleged damages, and did not attach references or professional opinions regarding components such as "loss of future profits", which is considered a speculative remedy. It was argued that the company did not prove actual damages caused to it and only claimed speculative damages, all without proving a direct causal connection between the municipality's actions and the alleged damages.
- With regard to the refund of the usage fees, it was argued that according to the provisions of the agreement, circumstances of the cancellation of the agreement due to the non-fulfillment of the suspension conditions will entitle the company to restitution with the addition of linkage differentials and no more.
It was argued that the company did not demand a refund of the usage fees from the municipality, in the hope that the Ministry of the Interior would change its decision. Therefore, it was argued, the company's right to restitution arose only from the date of its demand, after it had expressed its opinion thereof.
- The municipality claimed that following the cancellation of the agreement, it applied to the Ministry of Interior in July 2022 for the purpose of approving the NRE (unregistered budget), number 4432, in order to refund the use fees to the company. It was argued that the restitution was dependent on the approval of the NRE designated for this purpose by the Ministry of the Interior.
Only after the Ministry of Interior approved the NGO did the Municipality return to the company the usage fees paid by the company, in the sum of ILS 5 million, plus linkage differences to the price index from the date of each payment by the company until the date of cancellation of the agreement, as follows:
- In respect of a payment of ILS 4 million paid by the Company on April 6,2016, the sum was returned together with linkage differences from the date of payment until the date of cancellation of the agreement (February 18,2021) - in the sum of ILS 64,622.62.
- In respect of a payment of ILS 1 million paid by the Company on June 30,2016, the sum was returned together with linkage differences from the date of payment until the date of cancellation of the agreement (February 18,2021) - in the sum of ILS 11,013.17.
- There is no dispute that on April 4,2023, the Municipality refunded the Company the usage fees in the total amount of ILS 5,075,635.79 (including linkage differences to the Consumer Price Index as detailed above).
It was argued that the return of the VAT component is conditional on the affidavits cancelling the real estate transaction addressed to the Tax Authority, which the company refuses to sign.