Therefore, even if the municipality was of the opinion, at the time, that this was not the end of the story, and that after the zoning plan that applies to the land was changed and turned into an assisted living designation, the agreement would be approved, it was the municipality's duty to inform the company and to correctly reflect the position of the Ministry of the Interior, as it was communicated to it. All by virtue of the obligation that applied to it to act in good faith in the fulfillment of an agreement, a requirement that is binding on reality given the company's funds that were held by the municipality.
Promotion of the project and signing of the first addendum - from August 15,2017
- A few months after receiving the aforementioned letter from the Ministry of the Interior, on March 9,2017, the company (see P/12) approached the Municipality, requesting the approval of the Minister of the Interior and the approval of the change in the zoning plan, as well as to extend the planning and construction dates set out in the agreement (see, for example, clause 8.19 of the agreement), in accordance with the provision of clause 9 of the agreement, in which the municipality undertook to extend the planning and construction dates insofar as this arises from an act or omission of the company and is not under the control of the company.
When the Municipality did not respond to this letter, on May 8,2017, the Company sent another letter (see P/13), in which it again requested an extension of the deadlines, and also, in view of the delays in receiving the approvals by the Municipality, the return of the guarantee in the sum of ILS 1 million that the Company had given to the Municipality upon signing the agreement.
- Subsequently, when it was found that the conditions were not met at that time, the Company and the Municipality signed, on August 15,2017, a first addendum to the development agreement (hereinafter: "the first addendum") (see P/14), in which it was determined that the date for receiving the approval of the Minister of the Interior would be postponed no later than June 30,2018, and accordingly the date for the completion of the construction was extended (in accordance with clause 8.19 of the agreement).
- Even at this time, at the time of signing the first addendum, the municipality did not update the company regarding the Ministry of Interior's response of November 2,2016.
Even worse, at this time, the Municipality accepted the clear position of the Ministry of the Interior with respect to another tender that it wished to promote - the tender of the Amarta company - according to which the Ministry of Interior will not approve an engagement that does not correspond to the planning situation applicable to the land. (See letter dated February 1,2017 - Appendix 1 to the Company's summaries), as detailed below.