Ex-MK Yitzman Shiri Ordered to Pay NIS 100,000 for Bad Faith Lawsuit

Former Knesset Member Yitzman Shiri has been ordered to pay 100,000 shekels in legal costs to the Israel Land Authority (ILA) after his lawsuit was dismissed. The lawsuit, filed by Shiri's company "Munitin for the Advancement of Industry," sought the return of "excess use fees" charged by the ILA. Judge Amit Cohen of the Beersheba District Court ruled that the company and Shiri acted in bad faith.

Munitin had leased a plot in the Be'er Sheva industrial zone in the 1970s under an agreement restricting its use to "industrial and craft buildings for rent and/or lease." The company constructed the required buildings but, since 2005, has been leasing the plot for the display and sale of cars for the "Shlomo Sixt" rental company. Shiri purchased Munitin in 1999, meaning the entire period of alleged improper use occurred under his ownership. Munitin paid 3.5 million shekels for the years 2012-2019 and 5.2 million shekels in lease fees due to the change in use.

Shiri and Munitin argued that the ILA's failure to finalize a lease agreement for over 50 years caused them significant damages and that the ILA had obstructed them. They claimed the ILA's charges for excess use fees in 2019 were unlawful, asserting that displaying and selling cars was a permitted use. However, Judge Cohen found the original development agreement's language to be clear and unambiguous regarding permitted uses, stating that the purpose was the construction of industrial and craft buildings, not commercial car sales.

Cohen emphasized that Munitin knew it was not permitted to use the plot commercially. He stated the ILA is entitled to restrict land use according to its allocation agreements and that Munitin was allocated the plot without a tender specifically for industrial and craft buildings. The judge concluded that Munitin's attempt to reinterpret the agreement after more than 50 years, contrary to its explicit terms and the purpose of the allocation, constituted bad faith. He noted that Munitin had violated the agreement for years and benefited from the ILA's failure to enforce it, effectively profiting from its breach without proper payment.