In accordance with its obligations under the agreement, immediately after the signing of the agreement, the company paid the municipality the full usage fees in the amount of ILS 5 million plus VAT, i.e., antitrust the company paid the municipality a total of ILS 5.850 million. (See paragraph 16 of the affidavit Wechter; paragraph 6 of the affidavit of my sons of David).
The payment of the usage fees to the municipality was made in two stages:
On April 6,2016, the company paid the municipality a total of ILS 4 million plus VAT (ILS 4,680,000), and in addition, after the council's approval was received on June 14,2016, the company paid the municipality an additional ILS 1 million plus VAT (ILS 1,170,000). In addition, the company provided the municipality with a personal guarantee in the amount of ILS 1 million and began planning the project, for which it invests a lot of money and resources.
- The municipality began planning procedures to change the zoning plan, but the planning track it took was not approved by the district committee.
- In accordance with what is required by law (Section 188 of the Municipalities Ordinance [New Version]), the approval of the Minister of the Interior is required for the transaction. However, there is no dispute that on November 2,2016, the Minister of the Interior refused to approve the transaction, claiming that the land is intended for public buildings and institutions, and that the change in its designation requires the approval of the Minister of Finance and the Planning Bureau at an unforeseen date, and therefore he cannot approve a sale agreement of land intended for residential use while it is not. (See Appendix A to the statement of claim)
The municipality did not update the company about the interior minister's response.
- On January 29,2017, the new zoning plan for deposit was approved.
- On March 9,2017, the company contacted the municipality demanding the approval of the Minister of the Interior and the change in the zoning plan, and to extend the planning and construction dates. On May 8,2017, the company again approached the municipality with a request for an extension of the deadlines and the return of the guarantee.
Signing of the first addendum to the agreement dated August 15,2017
- A few months after the date of signing the agreement, and in circumstances in which the municipality was unable to obtain the approvals it was required to present, in accordance with the terms of the agreement, and following an exchange of letters on the matter between the parties, on August 15,2017, the company and the municipality signed the first addendum to the development agreement, in which it was determined, inter alia, that the date for receiving the approval of the Minister of the Interior would be postponed no later than June 30,2018, and the date for receiving approval of the change in the zoning plan would be postponed until no later than 12 months after receiving the approval of the Minister of the Interior.
The guarantee deposited by the company was returned to it.
- On December 6,2017, a meeting was held at the municipality, in which it was agreed that the company would advance the update of the measurement of the land for the purpose of depositing the zoning plan, and that the municipality would apply to the Ministry of the Interior for the minister's approval.
According to the company, the municipality informed it that the approval of the Minister of the Interior would be examined only after the change in the zoning plan, which includes the change in the use of the land in a manner that would enable the approval of the transaction, and that due to the delay in receiving the approval of the change in the zoning plan, there was a delay in receiving the approval of the Minister of the Interior in any case. It was claimed that in practice, the municipality did nothing to promote the plan.