They opposed construction work and will be required to pay compensation of 3 million shekels?
Feb 10, 2019
Adv. Shlomi Hadar – John Geva, Geva, Hadar & Co., Attorneys at Law
A claim was brought before the Central–Lod District Court and heard before the Honorable Judge Yehezkel Kinner, seeking compensation in the amount of NIS 3,150,000 for damages allegedly caused to the plaintiffs as a result of various objection proceedings that delayed the construction of two buildings on land owned by the plaintiffs, as well as the issuance of Form 4 following their construction.
For example, after a building permit was granted, one of the defendants, acting in the name of the building’s residents, contacted the city engineer and the mayor, alleging that one of the plaintiffs was committing building violations and deviating from the building permit. These approaches led to the issuance of an administrative stop-work order, and subsequently a judicial stop-work order was also issued.
The defendants, who believed that the plaintiffs continued to commit building violations, also filed a civil lawsuit against the plaintiffs and sought interim relief. In the hearing held on the request for interim relief, a consent order was issued prohibiting construction in contravention of any building permit that had been issued or would be issued by the local authority.
The parties’ arguments
The plaintiffs argued, inter alia, that the defendants’ numerous objections delayed the construction of the buildings and the issuance of Form 4. This delay caused the plaintiffs substantial damages. It was further claimed that the defendants’ objections were unfounded and stemmed from a defect that the defendants themselves had created when constructing their own building, and therefore the groundless objections filed by the defendants constituted, among other things, negligence. In their summations, the plaintiffs further argued that the objections also amounted to an abuse of legal proceedings and a lack of good faith.
The defendants argued, inter alia, that cases in which a claim for compensation may be brought for damages caused as a result of conducting legal proceedings are rare, and that such claims require proof of a high behavioral threshold beyond that required in ordinary claims—and that this was not an appropriate case for such relief.
Discussion and decision
First, the court considered the plaintiffs' claim regarding the defendants' negligence. The court ruled that there is a duty of care between a party and its opponent, in a manner that may establish liability for the party's negligence when the opponent suffered damages as a result of the initiation of legal proceedings. In the circumstances of the case, it was determined that the defendants could have expected that the objections and proceedings they filed would cause a delay in construction as well as a delay in the issuance of Form 4, and the damages that resulted from this (i.e., a concrete duty of care was established in the circumstances of the case). The court relied on the Maritime Services Trade case and ruled that in a claim concerning damages caused to the plaintiff as a result of the defendant's initiation of legal proceedings against him, a breach of the duty of care will only arise where it is proven that the defendant's conduct amounted to "gross negligence" or "gross negligence" or "wilful misconduct."
In the circumstances of the case, it was determined that the plaintiffs failed to prove that the filing of the objections was done with malicious intent, in bad faith, or with gross negligence.
The court added that the mere filing of objections to applications for building permits or plans or the taking of proceedings in connection with planning proceedings cannot establish a tort of negligence against the filers of the objections or the person taking the proceedings, whether the objections are accepted or rejected. The right of every person to take one or another legal action, and the possibility that exists for the opposing party to file a negligence claim, requires that extra caution be exercised in everything related to such a claim, lest it deter a person from taking legal action. Therefore, it was determined that the standard of conduct that will be considered improper and will constitute grounds for filing such a claim should be a high standard. The court noted that the plaintiffs "ignore their own behavior, behavior that necessitated the procedures taken by the defendants," and added that the procedures taken during the period relevant to the lawsuit resulted from the plaintiffs taking legal action against themselves, performing work without a permit and then seeking to have it legalized.
In light of this type of conduct by the plaintiffs, which was not a one-time occurrence, but rather ongoing, it was determined that there is no reason why the defendants strongly opposed the requests submitted by the plaintiffs and took various steps to prevent such conduct. Finally, the court determined, more than necessary, that there is no causal connection between the alleged negligence and the damages claimed by the plaintiffs.
In conclusion
The lawsuit was dismissed and the conclusion leads to the conclusion that, except in extreme cases, the possibility of suing for filing legal or administrative proceedings is slim, which inevitably leads some litigants to resort to the successful method and initiate unsuccessful proceedings in the hope that this might be successful.
It should be remembered that in any legal proceeding conducted in the courts, it is right and important to do everything possible to hedge in advance against risks from legal proceedings - even if they turn out to be futile proceedings - that delay construction, and this within the framework of the contract system in each and every transaction (including a legal representation agreement for all stages of the transaction that will provide an appropriate response and reduce exposure to unexpected legal costs in futile proceedings), in addition to appropriate insurance that hedges additional risks in executing transactions, some of which also provide legal representation in relevant cases.
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