Here, too, what is stated in paragraph 7 of CPA Sitton's opinion is supported: "According to an appendix to the cooperation agreement between BDI and V Equity, it was determined that Mr. Dean Wachter is entitled to initiation fees of ILS 4 million upon receipt of the building permit for the project. Since the project was not carried out, Dean Wachter suffered a loss of initiation fees."
I saw fit to reject the company's claim for these damages. A building permit for the project was not issued, and therefore the entitlement of plaintiff No. 2 to this payment on the face of it did not arise.
Beyond the aforesaid, all those concerned were aware of the fact that this was a high-risk transaction in view of the fact that its advancement required the approval of the Minister of the Interior and the change in the plan that applies to the land.
The fact that the Municipality, in bad faith, continued to hold vital and substantial information, over a long period of time without disclosing it to the Company, has no connection or effect on this component, for even if the agreement had been cancelled in the preliminary stages of the transaction, as the Company claims would have happened if it had known in real time of the Minister of the Interior's refusal to approve such a transaction, it would not have been entitled to payment of initiation fees that it promised to pay to a third party, Lochter.
Loss of business opportunities
- In addition, the company claimed the loss of business opportunities in which it could have contracted. It was claimed that plaintiffs 1-2 were experts in the establishment of housing clusters, and that in addition to the cluster that was supposed to be built in Bat Yam, they worked to establish a housing cluster on Dolinsky Street in Rehovot, so that they could have used the same funds held by the municipality, for the purpose of locating and engaging in other transactions, all the more so, that in those years the prices of the land were significantly lower than their prices today, so that it was possible to achieve a very high return with the same amount held by the municipality all those years.
- Furthermore, it was claimed that based on the signing of the agreement with the municipality, the company entered into an agreement with KBI Holdings Ltd. (hereinafter: "KBI") regarding KBI as a partner in the project, and commercial terms were even agreed with it for the partnership transaction. Among other things, it was agreed that for the purpose of purchasing a partnership in the project (50%), KBI would pay the company a total of ILS 25 million plus VAT, and it was also agreed that if the project approved the construction of more than 240 housing units, then the company would receive a premium in accordance with the final number of units that would be approved, in the amount of up to ILS 3 million.
It was argued that the company saw this engagement as an exceptional business opportunity that was not realized due to the conduct of the municipality (see paragraphs 76-78 of the Wachter affidavit as well as a copy of commercial terms - a preliminary document between the company and KBI (P/45)).