In practice, the Municipality concealed this material information and even made false representations to the Company on the basis of which the validity of the agreement was extended time and time again, all as will be detailed below.
- The examination of the Municipality's conduct will be examined in accordance with the course of events and events following the engagement with the Company, which I have seen to be examined according to the following steps:
- Ministry of Interior letter dated November 2,2016
- Signing the first addendum to the agreement
- Signing the Second Addendum to the Agreement
- Promoting the change in the zoning plan
- Letter from the Ministry of Interior from 2021.
Ministry of Interior letter dated November 2,2016
- Shortly after the signing of the agreement and receiving the approval of the Municipal Council for the engagement, dated June 14,2016, on November 2,2016, the Municipality's legal advisor, Adv. Cohen, received a letter from Mrs. Ravit Klepner, Director of the Department (Local Government) in the Civil Case District of the Ministry of the Interior. In the framework of this letter, the Ministry of Interior informed the Municipality that the agreement signed between the parties could not be approved, as it did not comply with the permitted purposes according to the current planning situation.
It was stated as follows: "Further to your request, for the approval of an agreement between the Bat Yam Municipality and V Equity Ltd., in the ILA 63 lot, and after its examination by the professional bodies of the Planning Administration - at the Tel Aviv District Planning Bureau, and with the opinion of Adv. Sarit Arieli Ben Simhon, the legal advisor to the District Committee, I would like to reply to you as follows:
- The agreement in question designates land with an area of approximately 1,700 square meters for the purpose of establishing an assisted living home (as defined in the Protected Housing Law), which will include at least 200 housing units.
- The land is part of Lot 63, which was allocated in Plan B/Mac/1/410, which was published in the Official Gazette for approval in June 2014, and has a total area of 48,361 square meters.
- Criminal Appeal Plan B/Mac/1/410, the designation of the land that applies to the land is "Public Buildings and Institutions for Education".
- The permitted uses are "educational institutions such as kindergartens, schools, daycare centers, entrance synagogues, Torah institutions, community buildings and other public buildings as specified in the main plan, as determined by the Bat Yam Local Committee" (section 4.5.1). The "main plan" is Plan B/410 (published for approval in the Official Gazette in 2008). The purposes set forth in it for public buildings are "schools, community centers, kindergartens, daycare centers and other public buildings" (section 11.8.1).
- Section 4.5.2 (1) relates specifically to the purposes of Area 63: "Area 63 shall be used for an education campus with a number of public buildings, public facilities, sports facilities, in accordance with a comprehensive construction and development plan that will be included in the entire platter."
- In light of the aforesaid, since the approved plan designated Area 63 as an Education Campus, I find that the agreement does not correspond to the permissible purposes according to the current planning situation.
- In light of this, it is not possible to approve the aforementioned agreement."
- This letter indicates that already in November 2016, the municipality received an explicit and negative response from the Ministry of Interior stating that the Minister of the Interior does not approve the agreement, since the agreement does not comply with the permitted purposes according to the planning situation.
There is no dispute that at the time the letter was received from the Ministry of the Interior, the procedures for changing the zoning plan had not yet been completed, and therefore the municipality believed, according to its claim, that if the zoning plan was changed, the approval process of the Ministry of the Interior would be advanced. Thus, Adv. Cohen notes on behalf of the Municipality in her affidavit, (paragraph 16 of Adv. Cohen's affidavit), that Ms. Ravit Klepner's statement of November 2,2016, "was understood and interpreted by defendant No. 1 according to the logic of things, namely, that after the zoning plan that applies to the land is changed and it becomes a designated designated for protected housing in accordance with Plan B/748, which was published for deposit on May 7,2018, the agreement will be approved."
- However, given the duty that the Municipality is obligated to act in good faith in the existence of an agreement, it was its duty to update the Company on any matter relating to the agreement, including the position of the Ministry of the Interior as it was conveyed to it, whether in the context of a contract with the Company or in the matter of another similar contract/tender, insofar as this position is relevant and has implications for the agreement in question.
It should be emphasized that on the face of it, the position of the Ministry of the Interior, in its aforementioned letter, was clear when it used the language that: "It is not possible to approve the aforementioned agreement." And when there is no statement of the kind that if the zoning plan is approved first, then the possibility of approving the agreement will be considered afterwards.