The municipality offered ILS 5,845 in compensation for expropriation – the court ruled more than one million shekels

Thirty years ago, the Ashkelon municipality expropriated land that was used for agricultural purposes for road-building purposes • When the company asked for significant compensation, the municipality claimed the statute of limitation applied, and that the value was minimal and offered the owners of the company only a few thousand shekels • The court accepted the lawsuit and criticized the conduct of the municipality for showing no concern at leaving the plaintiff without 30 dunams of agricultural land for cultivation, with no prospect of profit from the zoning and building, and without compensation

05.04.2019 | Shlomit Tsur

The court accepted a lawsuit against the Ashkelon municipality, under which the latter had proposed to compensate a company from which it had expropriated 30 dunams (30,000 sqm) of agricultural land in the amount of ILS 5,845 only, and set the compensation at ILS 1.3 million, and in total ILS 2.3 million after addition of interest and linkage.

The company was represented by Adv. Miriam Donin-Shoob of law firm Hamburger Evron & Co., specializing in zoning and building law, and Adv. Keren Kimhi of law firm Keren Kimhi Nadulani.

The Hadari Ashkelon company leases agricultural land for cultivation on a large scale in Ashkelon. In 1974 the Ashkelon municipality changed the designation of 30 dunams of land, from agriculture to a road, in order to pave a road in Ashkelon’s northern industrial area. In 2003, the municipality expropriated the land.

The company was not compensated in respect for the change in designation from agriculture to a road and was not compensated for the expropriation. According to the law, compensation for a plan causing an injury may be claimed within three years of the plan’s approval and, in this case, the date had long passed. Only in 2015 did the company file a claim for compensation in respect of the expropriation in an amount of ILS 1.6 million. The amount of compensation demanded by the company was based on the guideline of the chief government appraiser, which determines that compensation in respect of expropriated land shall be calculated according to 10% of the value of the land in the vicinity of the expropriated land. The company demanded 10% of the value of land for industry in the vicinity, which stands at 38-48 shekels per square meter. The company claimed that the plan and the expropriation had worsened its situation and that it was therefore demanding compensation from the first square meter, without deducting 40%. It further demanded compensation in respect of injury to the land that was not expropriated, since following paving of the road, the agricultural land that remained under its ownership had been divided into two parts, making it difficult for planting and agricultural work.

In response, the municipality contended that the claim for compensation in respect of the change in designation had expired under the statute of limitation and that there had been undue delay in asserting the claim in respect of the expropriation. In addition, the municipality contended that the value of the road is zero, and alternatively, according to the land appraiser’s instructions, the company should receive compensation at the rate of 10% of the value of the agricultural land bordering the land expropriated at a value of 2-3 shekels per square meter. The municipality argued that the road paved in the expropriated area actually improved access to the land and so the municipality agreed to compensate the company for a maximum of ILS 5,845.

Be’er Sheva District Court judge, Shmuel Friedlander, thought differently than the municipality, as the decision he has now made makes evident, and when he accepted the suit. Friedlander even criticized the municipality: “The respondent is not concerned that it left the plaintiff without 30 dunams of agricultural land for cultivation, without any expectation of profit from zoning and building, and without compensation,” the judge ruled. “Or alternatively, with 5,845 shekels, which amount to 10% of the overall agricultural value of only 60% of the expropriated land, and assuming that the rest of the land was not affected by the expropriation. I, however, am concerned.  The public gained a road at the expense of the agriculture work of the plaintiff. It is appropriate that the public should complete the shortfall. Legal interpretation that the injured party is compensated by the party that becomes rich at his expense, is preferable to an interpretation under which he departs with his hands held above his head”.

Friedlander adopted the chief government appraiser’s guideline that compensation in respect of the road should stand at 10% of the value of the land in the area. Since the predominant land in the vicinity is for industry, Friedlander did not accept the municipality’s claim that the compensation should be derived from the value of the bordering land since it is agricultural. The judge therefore accepted the claim for compensation for the agricultural land that was expropriated at a rate of 10% of the value of land designated for industry, which stands at 38-48 shekels per square meter. Furthermore, Friedlander ruled that compensation would be applicable from the first square meter of the expropriated land without a 40% deduction. Concurrently, the judge rejected the request for compensation for the land that was not expropriated on the grounds that the injury to it following the expropriation was negligible. In total, the court set the amount of compensation to the company at 1.3 million shekels, as of 2003, and with the addition of interest and linkage, the judgment indicated that the total compensation payment to the company would be 2.3 million shekels.