Glideware Pty Ltd v Hadad & Anor

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST

S ECI 2022 04692

BETWEEN:

GLIDEWARE PTY LTD (ACN 081 692 462)	Plaintiff/First Defendant by Counterclaim
v
NIR HADAD	First Defendant/Plaintiff by Counterclaim
REGISTRAR OF TITLES	Second Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	13, 14, 15 and 20 November 2023
DATE OF JUDGMENT:	13 February 2024
CASE MAY BE CITED AS:	Glideware Pty Ltd v Hadad & Anor
MEDIUM NEUTRAL CITATION:	[2024] VSC 34

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EQUITY — Proprietary estoppel — Alleged representations made by the plaintiff that the defendant would obtain a beneficial interest in a valuable property — Whether the defendant reasonably relied on the alleged representations to his detriment — Where the contract of sale was signed by the defendant and his former wife but the plaintiff company was subsequently nominated as substitute purchaser and is the registered proprietor of the property — Defendant and his former wife lived at the property for several years and expended funds on repairs and upgrades to the property — Whether it would be unconscionable for the plaintiff to deny the defendant’s beneficial interest in the property — Held, no representation made and no detrimental reliance established.

EQUITY — Proprietary estoppel — Estoppel by acquiescence — Whether plaintiff stood by while defendant expended money on improvements to the property — Whether it is necessary for the defendant to establish that the plaintiff profited from the money and time expended by him on the property — Improvements to the property were vastly overstated — Whether the plaintiff knew of any mistaken assumption by the defendant as to the ownership of the property — Held that the plaintiff did not stand by and allow the defendant to expend funds on the property under a mistaken assumption as to the ownership of the property.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/Defendant by Counterclaim	Mr B A McLachlan with Ms X Teo	Arnold Bloch Leibler
For the First Defendant/Plaintiff by Counterclaim	Mr M A Black	Agar Legal
No appearance for the Second Defendant

HER HONOUR:

Introduction

These reasons concern the question of who is the true beneficial owner of a valuable residential property in Malvern (‘property’): the plaintiff, Glideware Pty Ltd (‘Glideware’) or the first defendant, Mr Nir Hadad and his ex-wife, Ms Paula Goldberger.[1] Mr Hadad claims that he and Ms Goldberger are the true beneficial owners of the property, and seeks a declaration that Glideware holds half of its interest in the property on trust for him.
[1]Mr Hadad and Ms Goldberger divorced on 31 August 2023.

Glideware is the registered proprietor of the property. Glideware is controlled by Ms Goldberger’s father, Mr David Goldberger, a wealthy businessman. Glideware purchased the property in late 2013, in its capacity as trustee of the David Goldberger No 2 Family Trust (‘trust’) for $4.45 million, and funded extensive renovations to the property over 2014 and 2015, which were carried out by a construction company controlled by Mr Goldberger. When the renovations were largely complete, Mr Hadad and Ms Goldberger and their three daughters moved into the property, where they have lived rent-free for a number of years. Mr Hadad ceased living at the property on 5 August 2022, following the breakdown of the couple’s marriage. Ms Goldberger and their teenage daughters continue to live at the property.

The marriage breakdown has been acrimonious. There are proceedings on foot in the Federal Circuit and Family Court of Australia (‘family law proceeding’) concerning the division of the property of the marriage, and in the Federal Court of Australia regarding the ownership and control of a number of companies of which both Mr Hadad and Ms Goldberger are shareholders and directors. An intervention order is in place which prevents Mr Hadad from attending the property.

On 21 September 2022, Mr Hadad caused a caveat to be lodged over the title to the property, claiming an interest in the property pursuant to an ‘implied, resulting or constructive trust’. On 16 November 2022, Glideware issued this proceeding seeking the removal of the caveat. At a hearing in early 2023, it was agreed to conduct a trial to determine on a final basis whether Mr Hadad held the interest claimed in the caveat in lieu of hearing the caveat removal application.[2] The outcome of the proceeding is, among other things, relevant to the issues in the family law proceeding, because if Mr Hadad is successful in making good his claims in this proceeding, the property will form part of the matrimonial pool of assets for division between him and Ms Goldberger in the family law proceeding.
[2]Given the nature of the evidence foreshadowed to be adduced at the caveat removal application, and the estimated length of the hearing of the caveat removal application (2 – 3 days).

The essence of Mr Hadad’s claim is that in 2013, when he and his family were living at a house in Kooyong Road, Toorak owned by the trust (‘Kooyong Road property’), he and Ms Goldberger wanted to buy their own property, and commenced looking for a new home for their family. They located the property, and decided that it would be suitable for their needs. Mr Hadad says that after they signed the contract of sale, he approached Mr Goldberger for advice regarding how best to finance the purchase of the property. Mr Hadad says that Mr Goldberger told him that one of his companies would purchase the property, which would be held on trust for Mr Hadad and Ms Goldberger. Mr Hadad agreed to this proposal, and, relying upon the promise made by Mr Goldberger, the family moved into the property and spent their own funds in connection with the property.

Mr Goldberger denies making any representation of the kind alleged by Mr Hadad, and says that Mr Hadad and Ms Goldberger lived in the property under the same arrangement that had been in place with respect to their occupation of the Kooyong Road property and, prior to that, an apartment in Toorak Road, South Yarra (‘South Yarra apartment’): that is, they lived rent-free in properties owned by corporate entities controlled by Mr Goldberger. Mr Goldberger says that Mr Hadad and Ms Goldberger were not in a position to buy the property, and the vast bulk of the improvements made to the property were funded by Glideware.

Ms Goldberger makes no claim to any beneficial interest in the property. She supports Glideware’s position in this proceeding.

Factual background and chronology of events

Mr Hadad and Ms Goldberger married in Israel in 2002. Shortly after they married, the couple moved to Melbourne. Mr Hadad and Ms Goldberger have three daughters together, with the eldest born in 2005, and a pair of twins born in 2006.

Following Mr Hadad and Ms Goldberger’s move to Melbourne, Mr Goldberger invited the couple to live rent-free at the South Yarra apartment. The South Yarra apartment was owned by a company of which Mr Goldberger was a director at the time. In late 2003, Glideware purchased the Kooyong Road property, demolished the house on the Kooyong Road property, and undertook the construction of a new house at the Kooyong Road property. Glideware financed the purchase of and the construction at the Kooyong Road property utilising funds borrowed from Stafford Corporation (Aust) Pty Ltd as trustee for the Stafford Station Trust (‘Stafford’). Mr Hadad and Ms Goldberger moved into the Kooyong Road property in about 2006, and lived there rent-free until they moved to the property.

Mr Goldberger, his wife Geinia and his younger daughter Leora Cohen are the directors of Stafford. ABL Finance Pty Ltd (a company associated with Mr Goldberger’s solicitors in this proceeding) and Goldwest Holdings Pty Ltd (a company associated with Mr Goldberger’s accountant, Mr Selwyn Greenberg) each hold one ordinary share in Stafford.[3] Westpac Banking Corporation (‘Westpac’), which has a facility agreement with Stafford, took security over the Kooyong Road property on 10 March 2004.
[3]The ASIC records show that each of ABL Finance Pty Ltd and Goldwest Holdings Pty Ltd own their shares in Stafford and Glideware beneficially. However, Mr Greenberg gave evidence that Goldwest Holdings Pty Ltd (which is controlled by him) holds its share on trust for Mr Goldberger. Nothing turns on that discrepancy for present purposes, for despite a suggestion in Mr Hadad’s written submissions that Mr Greenberg’s evidence should be treated with some caution, because he was in effect a part owner of the property, in the end there was no real dispute that Mr Goldberger is the ultimate controller and beneficiary of Glideware.

In or around 2013, Mr Hadad and Ms Goldberger had discussions about moving to a home more suitable for their growing family. Mr Hadad says that he and Ms Goldberger began looking for a suitable property to purchase and had conversations with Mr Goldberger to this effect. Mr Hadad says that he sought Mr Goldberger’s advice and opinion on purchasing a property given his extensive experience as a developer. Mr Goldberger, on the other hand, says that Mr Hadad and Ms Goldberger told him they wanted to live in a larger home, and that he discussed with them the prospect of selling the Kooyong Road property, and obtaining further finance from Westpac to fund the purchase of a new property.

Mr Hadad and Ms Goldberger inspected various properties around this time. Mr Goldberger says that he also inspected several properties with Ms Goldberger, including a property situated at Willow Street, Malvern which Ms Goldberger requested he purchase. Mr Goldberger says that he told his daughter that he would not purchase the Willow Street property as he considered that it was a poor investment.

Mr Hadad says that he had no discussions with Mr Goldberger about Mr Goldberger funding the purchase of the property prior to locating the property. Mr Hadad said that at the time he was running a profitable business, Octopus Media Pty Ltd (‘Octopus Media’),[4] such that he and Ms Goldberger were able to afford to purchase the property. Mr Hadad also said that, nevertheless, if he did require financial assistance, he would have been able to obtain assistance from his parents, who live in Israel. Mr Goldberger and Ms Goldberger both say that Mr Hadad did not have the financial resources to be able to afford the purchase of the property.
[4]Apparently Octopus Media is only one of a number of companies through which Mr Hadad operates his businesses, but for convenience, I will refer to the corporate entities associated with Mr Hadad (and Ms Goldberger) as ‘Octopus Media’, except where the context requires otherwise.

In his defence and counterclaim, Mr Hadad says that after he and Ms Goldberger signed the contract of sale, he then sought Mr Goldberger’s advice about the best way to finance the property and to deal with the paperwork for the purchase, and that Mr Goldberger responded by saying words to the effect that he would purchase the property for his daughter and son-in-law for them to own, and that it would be his grandchildren’s family home, provided that Mr Goldberger could nominate a company to hold the property on trust for them.

However, in his witness statement, Mr Hadad gave a different account of what he said was said to him by Mr Goldberger, saying that Mr Goldberger said words to the effect as follows:

I will buy it for you. You married my daughter and it will be my grandkids’ future home. I can put forward the deposit for you and buy it for you as long as you maintain it and take part in the costs of renovations and other things.

And also:

Do not worry about getting a mortgage, I will fund the purchase of the house.
Either me or one of my companies will fund the home for you, and you can treat the house as your own and do what you want to it.

Mr Goldberger gave evidence that he told Mr Hadad and Ms Goldberger that he would purchase the property for them to live in through Glideware. According to Mr Goldberger, this conversation took place before the contract of sale was signed. At no stage, Mr Goldberger says, did he tell Mr Hadad and Ms Goldberger that he would give the property to them. Mr Goldberger says that he had several conversations with Mr Hadad and Ms Goldberger together and individually over time where he explicitly stated that they were permitted to live in the property rent-free but that they did not have any ownership rights or entitlement to it. The exact sequence of events and the content of the conversations concerning the purchase of the property are the critical matters in dispute in this proceeding.

Mr Hadad and Ms Goldberger signed a contract of sale for the property in November 2013 for a purchase price of $4.45 million. The contract of sale is not in evidence, but it is not disputed that it included a term that allowed the nomination of a substitute purchaser. Mr Andrew Cossen, the former in-house counsel for the businesses controlled by Mr Goldberger, assisted with the paperwork for the purchase. Mr Sam Fink, the company secretary of Glideware at the time, but who is now deceased, contacted Mr Goldberger’s accountant, Mr Selwyn Greenberg, to inform him of the purchase of the property and asked him to ensure that the property would be owned by Glideware in its capacity as trustee of the trust.

A deposit was paid by Stafford and Mr Goldberger on behalf of Glideware on 5 December 2013, and settlement took place on 26 March 2014. On 5 February 2014, Mr Cossen emailed Mr Hadad attaching a section 27 deposit release statement, which was signed by Mr Hadad and Ms Goldberger and returned to Mr Cossen. At around that time, a real estate nomination form was also signed by Mr Hadad and Ms Goldberger, which nominated Glideware as the substitute purchaser under the contract of sale. Glideware paid the balance of the purchase price, stamp duty in the sum of $244,750 and the other costs associated with settlement.

On 10 February 2014, Westpac advanced $4 million to Stafford (‘2014 loan’) so that Stafford could then lend those funds to Glideware to complete the purchase of the property, which increased Stafford’s existing facility limit to $15 million. There is no written loan agreement between Stafford and Glideware. The 2014 loan was secured by a mortgage that Glideware granted over the property to Westpac, in addition to other existing securities. On 12 March 2020, Stafford entered into another facility agreement with Westpac whereby Westpac agreed to advance $11 million to Stafford (‘2020 loan’). The security provided under the 2020 loan included a guarantee and indemnity provided by Glideware and supported by the mortgage over the property. On 9 July 2021, the 2020 loan was increased to $12.5 million (‘July 2021 loan’), the security for which also included Westpac’s existing mortgage over the property. On 11 November 2021, the July 2021 loan was restructured and again included the property as security (‘November 2021 loan’). The property remains security for the November 2021 loan, under which approximately $12.5 million is outstanding.

The November 2021 loan is also secured by mortgages held by Westpac over the home owned by Mr Goldberger and his wife in Toorak, another home in Toorak owned by another family trust in which Mr Goldberger’s younger daughter lives with her husband, and two adjoining apartments in Surfers Paradise, Queensland, owned by another company controlled by Mr Goldberger.

Glideware has incurred $1,608,764.93 in borrowing costs since the property was acquired. Since the 2014 financial year, the property has been recorded in the financial statements of the trust as an asset on a ‘cost-plus’ basis, meaning that the value shown in the balance sheet of the trust reflects the acquisition costs of the property, the cost of the renovations to the property paid for by Glideware, and the cumulative interest paid by Glideware, rather than the market value of the property.[5] Mr Hadad and Ms Goldberger did not contribute to the acquisition costs of the property, and Mr Hadad and Ms Goldberger have not paid any borrowing costs, insurance premiums, land tax, rates or utility bills since they have lived at the property.
[5]The ‘cost plus’ value of the property in the accounts of the trust as at 30 June 2023 was $8,497,662.

On 16 July 2014, Glideware entered into a contract for the sale for the Kooyong Road property, and settlement took place on 3 February 2015. The proceeds of sale were paid to Glideware.

Mr Goldberger and his wife are also the directors of Golo Investments Pty Ltd (‘Golo Investments’). On 16 October 2017, a Division 7A loan agreement[6] was entered into between Mr Goldberger and Golo Investments. On 2 June 2020, a second mortgage over the property was granted to Golo Investments to guarantee Mr Goldberger’s performance of the Division 7A loan agreement. There are currently no funds outstanding under the Division 7A loan agreement.
[6]Mr Greenberg explained that a Division 7A loan agreement is an instrument by which a shareholder of a private company can document loans made by that company to them, to avoid those loans being characterised by the Australian Taxation Office as disguised dividends, thus being assessable as taxable income in the hands of the shareholder.

Following the acquisition of the property, substantial renovations were undertaken at the property. The renovations included an extension, a new kitchen, marble stone finishes, a staircase, new carpets and the replacement of the existing tennis court. According to a spreadsheet prepared by an employee of Mr Greenberg, between 2014 and 2016 Glideware spent $2.232 million on the renovations. The works were carried out by Peninsula Construction Group Pty Ltd, a building company owned by Mr Goldberger. Mr Goldberger says that most of these renovations were undertaken at the request of Mr Hadad and Ms Goldberger, and that he refused other requests by them to pay for specific works such as the construction of an al-fresco area and the installation of a sophisticated home entertainment system, because he believed that those works were unlikely to increase the value of the property.

Mr Hadad says that he also expended funds on renovation works and upgrades, including tree removal, the installation of audio-visual equipment throughout the property, the construction of an al-fresco area, and upgrades to the tennis court. The majority of the invoices for the renovation works alleged to have been paid for by Mr Hadad were addressed to Octopus Media, and were said by Mr Hadad to have been paid by Octopus Media.

Mr Hadad, Ms Goldberger and their children moved into the property in mid 2015.

Ms Goldberger says that also in around 2015, Mr Hadad spoke to her about purchasing a neighbouring property which was up for sale. Mr Hadad also had a discussion with Mr Goldberger about purchasing the neighbouring property, but Mr Goldberger refused to purchase this property. The neighbouring property was ultimately sold to a developer. Mr Hadad subsequently became aware of a multi-unit development planned for the neighbouring property. He objected to the proposed development and engaged legal representatives to act on his behalf in relation to the objection.[7] Mr Goldberger accompanied Mr Hadad to a local council meeting considering the proposed development and objections to the proposed development. The local council initially rejected the development application. However, the developer commenced a VCAT proceeding which successfully overturned the council’s decision, and the development went ahead. Mr Goldberger gave evidence that he refused to fund the legal costs associated with the objection, viewing it as an expensive and futile exercise.
[7]Mr Hadad paid approximately $80,000 to his solicitors over the period between June 2015 and February 2020 in connection with the objection. There is also evidence to suggest he paid an additional $50,000 in counsel’s fees in connection with the objection, but no fee slip is in evidence.

In or around 2018, Mr Hadad and Ms Goldberger were considering the purchase of an apartment in Noosa Heads, Queensland. Ms Goldberger asked Mr Greenberg whether she and Mr Hadad could mortgage the property to fund the purchase. Mr Greenberg gave evidence that he said to Ms Goldberger words to the effect ‘you can’t mortgage the property because it was bought in the name of the trust and it’s your dad’s trust’.

Mr Hadad and Ms Goldberger were also interested in purchasing an apartment in Tel Aviv. Mr Goldberger gave evidence that in about 2019, Ms Goldberger showed him a photograph of the apartment, and that Ms Goldberger and Mr Hadad told him that they wanted to borrow money against the property to finance the purchase of the apartment. Mr Goldberger said he responded to this request by throwing the photograph in the rubbish bin and telling them that they could not mortgage the property as it belonged to the trust, not them. Mr Hadad denied asking Mr Goldberger to borrow money against the property for the purchase of an apartment in Tel Aviv, saying that he would have been able to fund the purchase through Octopus Media. The purchase of the property in Tel Aviv did not ultimately go ahead, as, according to Mr Hadad, he did not think it was a good investment.

In around November 2019, Mr Hadad attended Mr Goldberger’s office, where they had a heated argument. Mr Goldberger gave evidence that he said words to Mr Hadad to the effect that the property was not his to mortgage and that it belongs to the trust. Mr Hadad denied that this was the subject of the disagreement and instead said that the disagreement concerned the neighbouring property. In particular, he says that Mr Goldberger did not allow him to purchase the neighbouring property and the argument was about this.

In early March 2021, Mr Hadad contacted the National Australia Bank (‘NAB’) about obtaining a mortgage to fund the purchase of a property in Noosa Heads. NAB provided Mr Hadad with a guarantor particulars form and requested financial statements for various companies related to Mr Hadad which were required as part of NAB’s serviceability assessment. The form and requested documentation were never returned to NAB. Mr Hadad said that he changed his mind regarding the purchase as it would not have been a good return on investment.

The pleadings

Glideware is the plaintiff in this proceeding, not the defendant, given that this proceeding originally commenced as an application to remove Mr Hadad’s caveat over the title to the property.

The amended statement of claim filed on 9 June 2023 concisely sets out Glideware’s claims. Glideware pleads that Mr Hadad:

(a)does not have any right, title or interest in the property, including as the beneficiary of any implied, resulting or constructive trust; and

(b) does not have any caveatable interest in the property.

In its prayer for relief, Glideware seeks:

A.An order that the Second Defendant, the Registrar of Titles, remove Caveat No. AW090845W from Certificate of Title Volume 04107 Folio 237.
B.A declaration that the First Defendant does not have right, title or interest in the Property, including as the beneficiary of any implied, resulting or constructive trust.

In his defence and counterclaim filed on 30 June 2023, Mr Hadad claimed, in summary, as follows:

(a) the property was purchased with Mr Goldberger’s knowledge and Mr Hadad and Ms Goldberger’s knowledge and understanding that the property would be their family home;

(b) Mr Goldberger offered to buy the property for Mr Hadad and Ms Goldberger provided that Mr Goldberger could nominate a company to hold the property on trust for them (‘representation’), and this offer was accepted;

(c) the following particulars were provided of the representation and the acceptance of the offer:

The offer was partly oral and partly in writing. In so far as it was oral it was contained in conversations between [Mr Goldberger], the First Defendant and Ms Goldberger after the contract to purchase the Property was entered into, which conversations were to the effect alleged. In so far as it was in writing it was constituted by the Contract of Sale of Real Estate.
…
The acceptance of the offer was oral and was contained in conversations between [Mr Goldberger], the First Defendant and Ms Goldberger after the contract to purchase the property was entered into.

(d) Mr Goldberger told Mr Hadad and Ms Goldberger to nominate Glideware as the purchaser of the property, and they subsequently did so;

(e) settlement took place on or about 26 March 2014, and Mr Hadad, Ms Goldberger and Glideware have since treated the property as their property, as demonstrated by Mr Hadad and Ms Goldberger:

(i)living in the Property rent free with their children since on or about 26 March 2014;
(ii)developing and improving the property including construction of a cabana, pergola and al fresco dining area, renovations to bedrooms and installation of a tennis court;
(iii)prosecuting litigation in relation to neighbouring development works which damaged the Property;
(iv)obtaining all necessary approvals to undertake development works and carrying out the approved works;
(v) maintaining the Property and making the day to day decisions as to its upkeep.

(f) by reason of the representation and the conduct set out in the above paragraphs, Mr Hadad, with Mr Goldberger’s knowledge, reasonably expected and believed that:

(i) he and Ms Goldberger could occupy and enjoy the property without paying rent;

(ii) the property was effectively owned by Mr Hadad and Ms Goldberger; and

(iii) the property was held by Glideware in its name on trust for and on behalf of Mr Hadad and Ms Goldberger;

(g) in reliance on the representation and conduct set out in the above paragraphs, Mr Hadad and Ms Goldberger expended labour and money on renovation works to the property before moving in and from when they began living at the property;

(h) Glideware stood by while, to its knowledge, Mr Hadad expended labour and monies on improvements to or in connection with the property without disputing Mr Hadad and Ms Goldberger’s entitlement to do so; and

(i) it would be unconscionable for Glideware to deny Mr Hadad’s beneficial interest in the property.

Mr Hadad’s counterclaim relied upon the matters summarised above, and sought a declaration that Glideware holds its interest in the property on a constructive trust for the benefit of Mr Hadad to the amount of one half of the value of the property. In the alternative to, or in addition to the declaration, Mr Hadad seeks equitable compensation.

Finally, while this was not pleaded in the defence and counterclaim, at the trial of the proceeding counsel for Mr Hadad submitted that Mr Hadad’s interest in the property should be treated (or valued) as if the property was unencumbered, submitting that Westpac had more than ample security available to it under the November 2021 loan agreement.

In Glideware’s defence to counterclaim filed on 17 July 2023, it admitted uncontroversial matters concerning the date of settlement of the purchase of the property, and that Mr Hadad, Ms Goldberger and their children lived at the property. Glideware otherwise denied that the representation was made, and denied the conduct said to underpin Mr Hadad’s belief that the property was owned by himself and Ms Goldberger and held on trust for and on their behalf. Glideware also denied that Mr Hadad acted on reliance on the representation and conduct, and denied that Glideware had stood by and allowed Mr Hadad to expend labour and money on the property.

The issues in the proceeding

Save with respect to one issue regarding the necessary elements of estoppel by acquiescence, the legal principles governing Mr Hadad’s claim in this proceeding are well settled and not in dispute. Rather, the key issue for determination is the factual dispute as to whether Glideware made any representations or engaged in any conduct which would give rise to any expectation on Mr Hadad’s part with respect to the property, and if so, whether Mr Hadad reasonably relied upon that representation or conduct to his detriment. Resolution of that issue largely depends upon an assessment of the credibility of the evidence given by the parties, bearing in mind that the onus of proof with respect to the issues in dispute rests with Mr Hadad.

In order to establish that he has an interest in the property, Mr Hadad would need to establish that:

(a) Mr Goldberger represented to him, or encouraged him to believe, that he would have an interest in the property;

(b) as a consequence, Mr Hadad reasonably believed that he had acquired, or would acquire in the future, an interest in the property;

(c) Mr Goldberger knew that Mr Hadad held that belief or expectation and would act or abstain from acting in reliance upon that belief or expectation;

(d) Mr Hadad reasonably acted to his detriment and/or changed his position in reliance upon Mr Goldberger’s statements; and

(e) the detriment incurred by Mr Hadad is such that it would be unconscionable for Glideware to assert its legal rights and not make good Mr Hadad’s expectation that he would have a proprietary interest in the property.[8]

[8]See Salehi v Salehi [2023] VSC 535 (‘Salehi’) [202], referring to Harris v Harris [2020] VSC 256 [173].

As for Mr Hadad’s claim that Glideware stood by while he expended money on the property, in Salehi v Salehi (‘Salehi’),[9] I identified the key elements of an estoppel by acquiescence as follows:
[9][2023] VSC 535.

(a)a mistaken assumption by the claimant as to their ownership of property;
(b)the claimant carried out improvements to property on the faith of the mistaken assumption;

(c) the true owner of the property knew of the mistaken assumption;
(d)the true owner deliberately failed to correct the mistaken assumption, at least prior to or contemporaneously with the making of the relevant improvements; and
(e)the true owner profited from the improvements carried out by the claimant acting under the mistake.[10]

[10]Ibid [212].

A preliminary issue arises out of Glideware’s submission that Mr Hadad has not pleaded any claim founded upon estoppel by acquiescence, and therefore should not be permitted to advance such a claim. I disagree. While it is correct that there is no express reference to the phrase ‘estoppel by acquiescence’ in Mr Hadad’s amended defence and counterclaim, I consider that, subject to the debate about whether it is necessary for Mr Hadad to establish that Glideware profited from Mr Hadad’s expenditure on the property, all of the material facts necessary to establish the cause of action have been pleaded. Mr Hadad has pleaded:

(a) Mr Hadad’s (reasonable) belief that he held an interest in the property;

(b) Mr Goldberger’s knowledge of that belief;

(c) the expenditure by Mr Hadad upon improvements to the property; and

(d) in subparagraph 5(o) of the amended defence and counterclaim, Mr Hadad pleads as follows:

The plaintiff stood by while, to its knowledge, the First Defendant expended labour and monies, and made the improvements and incurred the expenditure set out in sub-paragraphs 5(m) and (n) without disputing the First Defendant’s and Ms Goldberger’s entitlement to do so.

Accordingly, subject to the determination of the question of whether Mr Hadad needs to plead and establish that Glideware profited from the expenditure said to have been made by Mr Hadad in connection with the property, the necessary elements of a cause of action based upon estoppel by acquiescence have been pleaded in the amended defence and counterclaim.

In relation to the question of whether Mr Hadad needs to establish that Glideware profited from standing by while Mr Hadad spent funds on improving the property, Glideware observed that Mr Hadad had adduced no evidence whatsoever to the effect that the funds he had expended upon the property and the improvements he had made to the property profited Glideware in any way. However, counsel for Mr Hadad disagreed with the proposition that it was necessary for a claimant in the position of Mr Hadad to establish that Glideware profited from the resources he devoted to the property: he submitted that the better view is that all it is necessary to establish is that Mr Hadad incurred a material detriment. I will discuss the parties’ submissions in relation to this issue later in these reasons.

The witnesses

The parties relied upon an agreed court book comprising the pleadings, witness statements and the documents annexed to the witness statements. Evidence in chief was adduced by way of witness statement. Glideware relied on the witness statements of Mr Goldberger, Mr Greenberg, and Ms Goldberger. Mr Hadad relied upon a witness statement made by him. There was no order for discovery made in the period leading up to the trial, and neither party issued any subpoenas.

That said, given the nature of the relationships between the main protagonists, who are related by blood or marriage, and the nature of Mr Hadad’s claims, founded as they are upon alleged oral representations or upon the conduct of Mr Goldberger in silently standing by while Mr Hadad and Ms Goldberger made improvements to the property, means that the absence of documentary evidence is unsurprising.

Ultimately, the resolution of the issues in this proceeding turns upon the credibility of the witnesses called by the parties. Prior to turning to the evidence of each of the witnesses in some detail, I will make some general observations about the manner in which each of the witnesses presented in Court. However, when doing so, I am mindful of the caution in the following passage of the decision of the High Court in Fox v Percy:[11]

Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical.[12]

[11](2003) 214 CLR 118.

[12]Ibid [31].

One further evidentiary issue bears mentioning before turning to the evidence in more detail. In its written outline of opening submissions, Glideware submitted that: ‘the burden rests upon [Mr Hadad] to establish, with persuasive, if not compelling evidence that the alleged representation was made to him.’

Glideware referred to a statement made by me in Salehi[13] to like effect, in the context of determining whether a woman had promised her brother and sister-in-law a residential property with a value representing a substantial proportion of her asset portfolio. As indicated during the course of the trial of this proceeding, those words were not intended to suggest that some special standard of proof applies in cases where an oral representation is said to give rise to a proprietary estoppel. Rather, it was merely an observation regarding the fairly obvious proposition that people do not generally give away valuable properties, even to family members, and accordingly, the principles discussed by the High Court in Briginshaw v Briginshaw[14] need to be kept in mind when evaluating claims of this nature.
[13][2023] VSC 535, [274].
[14](1938) 60 CLR 336. See also s 140(2) of the Evidence Act 2008 (Vic).

The primary witness for Glideware was Mr Goldberger. Mr Goldberger presents as a rather taciturn man, who gives the impression of not feeling it necessary to say anything beyond what needs to be said to convey what needs to be conveyed. He is clearly very unhappy with Mr Hadad’s conduct, in part at least because of what he considers to be the unmeritorious claim made by him in this proceeding, and by Mr Hadad’s conduct towards his daughter generally. He was at pains to repeat on a number of occasions that he did not trust Mr Hadad, and made a number of references in his evidence to Mr Hadad’s alleged infidelity to Ms Goldberger, including in circumstances where the question asked did not call for his opinion upon that issue.

During the course of giving his evidence, Mr Goldberger did on occasion fail to directly answer the question being put to him, instead giving evidence which might be perceived to be supporting Glideware’s case. However, he did not give the impression that he was reconstructing his evidence: on a number of occasions he was prepared to concede that he could not recall a particular matter or conversation, or that he did not know the answer to a question. Further, Mr Goldberger, while being a person who is used to controlling his environment and his affairs, is clearly a ‘big picture’ man. I accept that he relies upon his employees, sub-contractors, and professional advisors to do the necessary legwork to put his plans into effect, which tends to explain his vagueness about some details of the relevant transactions.

Counsel for Mr Hadad submitted that Mr Goldberger was a difficult witness. I can see why that submission was advanced, but it seems to me that the nature and tone of some of Mr Goldberger’s evidence under cross-examination reflected his distaste and disdain for Mr Hadad and his conduct (including his conduct in bringing this claim), rather than being necessarily indicative of a failure to tell the truth. Mr Goldberger’s conduct in the witness box does not necessarily cause me to conclude that he was an unreliable witness.

Mr Greenberg has been Mr Goldberger’s external accountant for over 35 years, having purchased the late Mr Fink’s accountancy practice in 1987. He is well versed in Mr Goldberger’s financial affairs, explaining that the network of trusts and companies established by his firm and Mr Goldberger’s legal advisors was primarily for asset protection purposes. He usually received his instructions from Mr Fink, at least up until Mr Fink’s death some 18 months prior to the trial.

In his closing submissions, counsel for Mr Hadad accepted that Mr Greenberg was a reliable witness. I agree.

Ms Goldberger was the final witness called by Glideware. Ms Goldberger was a wary witness, although that wariness may have been explicable by nerves. On some occasions, she gave evidence to the effect that she did not recall a conversation or event put to her, when one might have anticipated that she would have given evidence that the conversation or event did not happen. Some of the evidence she gave lacked credibility, although that evidence concerned relatively inconsequential matters. By way of example, she appeared to deny having had anything to do with the intervention order taken out by the police against Mr Hadad, which seems somewhat implausible. She said that the changes to the property after Glideware purchased the property were largely aesthetic, rather than structural, which is inconsistent with Mr Goldberger’s evidence, and the evidence about how much money was spent renovating the property. It was odd that she could not recall signing the contract of sale, and that her lawyers in the family law proceeding have not provided her with a copy of a valuation report for the property commissioned by and addressed to them and Mr Hadad’s solicitors. She resisted accepting that the photographs taken at the property in July 2023 for the purposes of preparing a valuation report for the family law proceeding accurately portrayed the property, for no apparent reason, and gave contradictory evidence about her involvement in the renovations of the property organised and funded by Glideware.

I accept that Ms Goldberger does have a powerful incentive to support Glideware’s position in this proceeding, given the acrimonious nature of her marriage breakdown, and given that she is entirely dependent upon her father for her accommodation, and also, at least until the finalisation of the family law proceeding, for her day to day living expenses. To be fair, in her evidence she conceded as such. I also accept the submission advanced by counsel for Mr Hadad that it was not necessary for him to put that contention to Ms Goldberger on every occasion Ms Goldberger was asked a question: I accept that counsel for Mr Hadad squarely put to Mr Goldberger that her evidence was tailored to support Glideware’s position because of her dependence upon her father and her hostility towards her ex-husband. However, that Ms Goldberger has an incentive to give false evidence does not necessarily mean that her evidence must be false. After all, there are no truly disinterested witnesses in this proceeding. However, given her partisanship, and the anomalies in her evidence described in paragraph 56 of these reasons, I accept that I need to treat Ms Goldberger’s evidence with some caution.

In contrast with Ms Goldberger’s wariness, Mr Hadad gave his evidence in a confident, even effusive manner. Like Mr Goldberger, he exhibited a tendency to give non-responsive answers to questions which sought to bolster his case. His explanations for why he had not produced certain documents to the Court, particularly financial records in support of reasonably important aspects of his claim (such as documents which would have supported his contention that he would have been able to afford to purchase the property without the assistance of Mr Goldberger) were less than compelling. And I agree with the submissions made by counsel for Glideware to the effect that the sometimes subtle, but material changes in the various versions of his evidence about the critical conversation (or, on one version of events, critical conversations) undermined the credibility of Mr Hadad’s evidence upon a critical issue.

There were other inconsistencies in Mr Hadad’s evidence which, while not concerning matters of great significance, also gave me cause to treat Mr Hadad’s evidence with a great deal of caution. By way of example, in his amended defence and counterclaim, Mr Hadad said that he and Ms Goldberger arranged for a tennis court to be installed at the property. However, photographs in evidence showed that there was an existing tennis court at the property at the time the property was purchased, albeit in poor condition. Mr Hadad referred to the tennis court in his evidence, and relied upon a quotation for the cleaning, repair and possible resurfacing of the tennis court in 2017. Mr Hadad agreed that this quotation was for the repair and resurfacing of a refurbished tennis court, which had been fully refurbished during the course of the main renovations, almost certainly at Glideware’s expense. Mr Hadad’s particulars also contended that he and Ms Goldberger organised and paid for the importation and installation of a German kitchen at the property, but in his evidence under cross-examination, Mr Hadad conceded that while Ms Goldberger organised the importation of the kitchen, Glideware paid for the kitchen. Given that these items were likely to be reasonably costly, these inconsistencies are not insignificant.

Another example arose when Mr Hadad was asked about his conversations with Mr Goldberger about the property and whether Ms Goldberger was present during those conversations, as stated in his defence and counterclaim. Mr Hadad said that at the time, he was speaking to Mr Goldberger three times a day, and that Ms Goldberger was ‘not involved in the nutshell of the actual deal’. Apart from the fact that it seems unlikely that Mr Hadad and Mr Goldberger would be speaking three times a day about the purchase of the property, Mr Hadad’s departure in his evidence from the allegation that Ms Goldberger was present during the material conversation or conversations is a significant departure from his pleaded case, assuming that the defence and counterclaim was drawn upon his instructions.

Further, during the course of cross-examination, Mr Hadad sought to explain away the inconsistency of his evidence about the cost of the al-fresco area he and Ms Goldberger installed with the invoices relied upon by him to evidence those costs, which showed that most of the works charged for were referable to the Octopus Media business, not the property. When taken to the bundle of invoices said to be related to the construction of the al-fresco area, Mr Hadad said ‘I – I’m just reading with my limited English’.[15] While Mr Hadad speaks with a heavy accent, this was the first suggestion that Mr Hadad was impeded in any way by any deficiency in his English language skills.
[15]Transcript of proceedings,T285 L4-5 (15 November 2023).

All of the above matters, along with, among other things, the failure of Mr Hadad to put forward any documentary evidence regarding his financial position at the relevant time (which is discussed in more detail later in these reasons), have substantially undermined Mr Hadad’s ability to make good his claims in this proceeding.

The evidence
Mr David Goldberger

In his witness statement, Mr Goldberger gave evidence, in summary, as follows:

(a) he did not tell Mr Hadad and Ms Goldberger that he would give the property to them, saying ‘[i]f I did decide to gift [sic] a property to any of my children, I would put the property in their name, rather than the name of my trust entities’;

(b) in 2013, Mr Hadad and Ms Goldberger told him that they wanted to move to a larger home;

(c) he inspected several houses with Ms Goldberger, including a property in Willow Street, Malvern, which he told Ms Goldberger he would not purchase, because he considered that it was a poor investment;

(d) he inspected the property, and told Mr Hadad and Ms Goldberger that Glideware would purchase the property;

(e) he gave evidence about how the purchase of the property was funded, and that Glideware funded the renovations at the property. He identified a spreadsheet prepared by Greenberg & Co listing the amounts said to have been paid by Glideware for the renovations. The majority of the renovation expenses were incurred at the request of Mr Hadad and Ms Goldberger;

(f) he gave evidence that from time to time Mr Hadad and/or Ms Goldberger requested that he fund other works and furnishings at the property. He agreed to do so where he thought it would improve the value of the property, but not on other occasions. He stated as follows:

For example, I recall telling Nir and Paula that I would not pay for an al fresco dining area, surround sound cinema system, or furniture from King Living. I also told them that I would not fund a planning objection concerning a proposed development next to the Malvern Property. My view was that any such objection was likely to fail and any litigation would be expensive and a waste of time.

(g) in relation to the ownership of the property, Mr Goldberger stated as follows:

I have never gifted the Malvern Property to Nir or Paula. I have never told either of them that the Malvern Property would be gifted to them. I have said to them on multiple occasions words to the effect “I don’t give gifts”.
I have also never told Nir or Paula that Glideware or any other entity holds or would hold the Malvern Property on trust for Nir and Paula.
To the contrary, I have had conversations with Nir and Paula, both individually and together, in which I have told them that they are not entitled to any property owned by a trust that I control. I have explicitly told them that they were allowed to live in the properties owned by my trust entities but that they did not have any ownership rights.

Glideware relied upon a further witness statement of Mr Goldberger, made in reply to the witness statement of Mr Hadad. In this witness statement, Mr Goldberger:

(a) denied that he said the words said by Mr Hadad to have constituted the representation, and said that he discussed with Mr Hadad and Ms Goldberger selling the Kooyong Road property in order to purchase the property, which was what happened;

(b) at the relevant time, he was regularly propping up Octopus Media financially;

(c) a reason why he would not have said and did not say that he would buy a house for Mr Hadad and Ms Goldberger was because for various reasons he did not trust Mr Hadad at that time, and he would not have made gifts of real estate to a son-in-law that he did not trust; and

(d) in response to Mr Hadad’s assertion that he believed that the property belonged to him and Ms Goldberger, Mr Goldberger deposed as follows:

…I reject Nir’s assertion that he believed that the Malvern Property was his and Paula’s. …In about the November before Covid (that is, in about November 2019), Nir came to my office. We had a heated debate in Hebrew and English about various issues, including the Malvern Property. He shouted at me. Nir said words to the effect of “You don’t trust me. You didn’t buy [the neighbouring property] because you don’t trust me. You won’t let me mortgage [the property] because you don’t trust me.” I responded with words to the effect of “It’s not your property to mortgage. If you wanted [the neighbouring property] you could have bought it yourself, but you didn’t have the money. I wasn’t going to invest another $3.5 to $4 million on another property. There’s no way. I don’t trust you. I don’t trust anyone. And I don’t buy anyone properties. You are living in the property and that’s all. The property is not yours and will never be yours. It belongs to the trust.” The argument was so loud that colleagues came past my office to check that everything was okay.

Under cross-examination, Mr Goldberger confirmed that he is the main decision maker regarding purchases of property and how those purchases are funded for Glideware and the other entities he controls. For example, he made the decision to purchase the Kooyong Road property, and the decision to demolish the house on the property and to construct a new house. Mr Hadad and Ms Goldberger made no improvements to the Kooyong Road property, because they did not need to make any improvements.

Mr Goldberger gave evidence that Mr Hadad and Ms Goldberger told him that they were looking to move to a larger property, something more suitable for their growing family. He refused to purchase the property in Willow Street for them, and told them to look for something else. They did so, and then told him about the property.

Mr Goldberger agreed that his version of events was that Mr Hadad and Ms Goldberger knew at the time that he inspected the property that he would purchase the property, because they had to show it to him before signing the contract of sale. He never saw the contract of sale, and does not know why Mr Hadad and Ms Goldberger signed the contract of sale instead of Glideware. He believes that he would have told them to nominate Glideware as the purchaser in the contract of sale, but he does not expressly recall doing so.

Mr Goldberger agreed that after Mr Hadad and Ms Goldberger signed the contract of sale for the property, Mr Hadad came to him to speak to him about the paperwork and finance for the purchase of the property. However, Mr Hadad did not ask him to purchase the property: it had all been settled prior to the execution of the contract of sale that Glideware was going to purchase the property.

Mr Goldberger denied saying the words attributed to him in Mr Hadad’s witness statement. Rather, he said words to Mr Hadad to the following effect:

I’ll buy the house for you to live in with my daughter and the kids, and I will build it, renovate it, and it’s for you to live with my daughter while you are married to my daughter.[16]

[16]Transcript of proceedings, T77 L26-29 (13 November 2023).

Mr Goldberger accepted that what was later described by Mr Hadad’s counsel as the ‘marriage condition’ was not referred to in his witness statement, and went on to say, forcefully, that ‘it’s not a gift, I don’t give gifts’.

Mr Goldberger agreed that he also told Mr Hadad and Ms Goldberger that they could live at the Kooyong Road property as long as they wished. He made no such promises with respect to the South Yarra apartment, because it belonged to a partnership, not to him personally.

Mr Goldberger rejected the proposition that Mr Hadad was the project manager for the renovations at the property, saying words to the effect that Mr Hadad did not know anything about building, and he had construction people to take care of such matters. Mr Goldberger said that he made most of the decisions regarding the renovations at the property, with little input from Mr Hadad and Ms Goldberger. He can recall in broad terms what was done during the course of the renovations.

As for the neighbouring property, they all became aware that the property was up for auction. Mr Goldberger said that Mr Hadad wanted him to buy the neighbouring property. He also became aware of the development proposal, and that Mr Hadad wanted to object to the development proposal. He personally did not object to the development proposal, as he thought it could improve the value of the property, but Mr Hadad could do whatever he wished. He was aware that Mr Hadad had instructed solicitors, and that there was a VCAT proceeding, but he was not told about the outcome. He did not know that Mr Cossen had been provided with documents concerning the VCAT proceeding, but he recalls hearing about the second VCAT proceeding and the outcome. He agreed that Mr Hadad told him that he wanted to pursue the objection because he considered that the development would reduce the value of the property, but later said that Mr Hadad pursued the objection because ‘he hated the guy’,[17] and that Mr Hadad did so without any consultation with him.
[17]Who I assume to be the owner and developer of the neighbouring property.

Mr Goldberger could not recall trees being removed from the property. He was taken to an email from Mr Hadad to him in 2015 attaching the necessary permits. He could not recall whether the trees were removed by Mr Hadad or his own construction crew.

Mr Goldberger was taken to the agreement for the 2014 loan, and confirmed that the proceeds of sale of the Kooyong property were used to reduce the balance owing under the Westpac facility. He confirmed that, given its value, the property which he and his wife own and live in is sufficient security for the November 2021 loan.

Mr Goldberger rejected the contention that he never said the words ‘I don’t give gifts’ to Mr Hadad. He said that he told Mr Hadad and Ms Goldberger on a number of occasions that they had no ownership rights with respect to the property when they wanted to mortgage the property to buy real estate in Israel and Noosa Heads. He told Mr Hadad on many occasions, ‘No, you can’t mortgage the property, it belongs to the trust’. By this time he believed that Mr Hadad wanted to mortgage the property to take money out of the family, and he did not trust him. He also said words to similar effect to Ms Goldberger, because she wanted to mortgage the property too.

Mr Goldberger was asked about the occasions where he had appointed Mr Hadad as a director of companies where he wanted to conceal his involvement in a particular transaction. He agreed that he had done so on occasion, and that Mr Hadad had signed documents as a director, but he also had Mr Hadad sign letters by which he resigned as a director of the relevant company once the transaction was complete, because he did not trust him.

Mr Goldberger agreed that all of the bills associated with the property were sent to his office. The bills for his granddaughters’ school fees were sent to Mr Hadad and Ms Goldberger, but he paid them, because he wanted his grandchildren to have a Jewish education.

Mr Goldberger was asked about the Division 7A loan agreement he entered into with Golo Investments in 2017, which is secured by a mortgage over the property. Mr Goldberger gave evidence that he was told by Mr Greenberg that it needed to be done, but he did not understand why it needed to be done, and still does not. He does not know why it took two and a half years for the mortgage securing the Division 7A loan to be registered. He knew that the Division 7A loan had nothing to do with the financing of the property.

Mr Goldberger denied that the Division 7A loan had anything to do with a deteriorating relationship between him and Ms Goldberger at the time it was executed in 2017. He said that his relationship with Ms Goldberger did not deteriorate at that time, although his relationship with Mr Hadad did deteriorate at that time, because Mr Hadad was having an affair in Israel. He did not enter into the Division 7A loan to stymie any claims by Mr Hadad and/or Ms Goldberger to the property.

Mr Goldberger gave evidence that he does not have a copy of the contract of sale for the property. He accepted that Mr Cossen probably did, but he has left the business, and he does not know what happened to his records. He rejected the contention that the conversation he had with Mr Hadad about the purchase of the property was after Mr Hadad and Ms Goldberger signed the contract of sale. He denied telling Mr Hadad that he should put the property into a trust in case he had problems with his business. He again denied telling Mr Hadad that the property would belong to him and Ms Goldberger.

Mr Goldberger agreed that he pays all of Ms Goldberger’s bills, because she does not have any money. He said that Mr Hadad took the Octopus Media business and cut Ms Goldberger out, and told their daughter to steal her credit card, so now Mr Goldberger pays for all of her expenses. He agreed that he was very upset with Mr Hadad, because of financial matters, and his disloyalty, but denied that he wanted to hurt Mr Hadad financially.

Finally, Mr Goldberger was asked about the argument he had in late 2019 with Mr Hadad. He disagreed that the argument was about the breakdown of the relationship between Mr Hadad and Ms Goldberger, because the relationship had not broken down by that time. Rather, the argument took place because Mr Hadad was angry about the property: he wanted the property, so he could leave his family and go off with another woman.

Mr Selwyn Greenberg

Mr Greenberg has been the accountant for Mr Goldberger and his associated entities since 1987, when he purchased Mr Fink’s accounting practice. Until 2021, he was also the accountant for Mr Hadad and Octopus Media. In his witness statement, Mr Greenberg gave evidence, in summary, as follows:

(a) as to his professional relationship with each of the parties, and the corporate history of Glideware;

(b) in his experience, when Mr Goldberger decided to buy a property, he, or the late Mr Fink, would instruct him to facilitate the purchase of the property through a trust controlled by Mr Goldberger;

(c) he explained how the purchase of the property was funded, and that on 5 December 2013, Stafford paid $400,000 towards the deposit for the purchase of the property, with the balance of $45,000 paid by Mr Goldberger from a private account;

(d) he said that on 16 July 2014, Glideware entered into a contract of sale for the Kooyong Road property, and the proceeds of sale were received by Glideware;

(e) he caused one of his employees to compile a spreadsheet showing the costs of the renovations to the property paid for by Glideware and the borrowing costs associated with the property, which were calculated as 39 percent of the interest payable on the Westpac facility;

(f) he deposed as follows:

In around 2018, I had about two phone conversations with Paula during which she asked for advice about financing the purchase of an apartment in Noosa, Queensland. On both occasions she asked me whether she and Nir could mortgage the Malvern Property to fund the purchase. On both occasions I said to Paula words to the effect, “you can’t mortgage the property because it was bought in the name of the trust and it’s your dad’s trust”.

In all of my dealings with David and Glideware, David has made no statement or given any indication to me that Paula or Nir had any interest in the Malvern Property. David has always treated the Malvern Property as trust property to which Paula and Nir have no right or interest. I would not have recorded the Malvern Property as an asset in the financial statements of the Family Trust if that was not the case.

(g) he explained how the purchase of the property was financed by the extension of the Westpac facility, and explained how the Westpac facility agreements were restructured in 2020 and 2021; and

(h) in relation to the Division 7A loan agreement, and the mortgage to Golo Investments registered on 2 June 2020, he said that there are presently no funds outstanding under the Division 7A loan agreement.

Under cross-examination, Mr Greenberg accepted that he had not mentioned in his witness statement that a company controlled by him, Goldwest Holdings Pty Ltd, is one of two shareholders in Glideware. He said that Goldwest holds its share in Glideware on trust for Mr Goldberger, as part of Mr Goldberger’s estate planning process, and Mr Goldberger makes all of the decisions regarding Glideware’s financial affairs.

Mr Greenberg gave evidence that he believed Mr Fink initially approached him about the property. Mr Fink was then the company secretary of Glideware. He knew that the Kooyong Road property was owned by Glideware, and he understood that the property would replace the Kooyong Road property. Mr Greenberg disagreed that there was no need for him to obtain any instructions regarding the property, because with all of Mr Goldberger’s major asset purchases, Mr Fink would always call him to provide instructions as to how the asset was to be accounted for.

Mr Greenberg was taken to the documents concerning the 2014 loan, and confirmed that the proceeds of sale for the Kooyong Road property were used to reduce the balance owing under the Westpac facility.

Mr Greenberg was taken to the spreadsheet said to evidence the sums paid by Glideware for the renovations at the property, and said that the spreadsheet was prepared by one of his employees. This employee has handled Mr Goldberger’s affairs for 34 years, so he believes the spreadsheet would be accurate.

Mr Greenberg gave evidence that he does not prepare loan agreements for internal transactions (such as the loan between Stafford and Glideware). There is no document showing the allocation of the funds borrowed under the Westpac facility between the different security properties. However, the share of the loan referable to the property is reflected in the financial statements for the trust. He accepted that the accounts of the trust did not show any liability attaching to the Kooyong Road property.

Mr Greenberg was taken to references in the financial statements for the trust to now obsolete financial standards, and said that must have been an oversight, and said that the financial statements have no taxation consequences.

Mr Greenberg gave evidence about the Division 7A loan agreement and its purpose. The Division 7A loan agreement would have probably been entered into on the advice of Mr Fink, not at the request of Mr Goldberger. The loan needed to be secured in order to fulfil its purpose, and the property was a property which was available to be secured. He would not have had any involvement in the registration of the mortgage to Golo Investments, and as such, cannot explain the delay in the registration of the mortgage.

Mr Greenberg confirmed the evidence in his witness statement regarding his conversation with Ms Goldberger regarding mortgaging the property. What he told Ms Goldberger was based upon his knowledge that the property was owned by the trust.

Mr Greenberg confirmed that he had also been Mr Hadad’s accountant until about two years ago. He confirmed Mr Hadad’s evidence that part of the Octopus Media business was sold for $8.7 million in 2007, and that the balance was sold for $16 million in 2016.

Ms Paula Goldberger

Ms Goldberger also made a witness statement in reply to Mr Hadad’s witness statement. In her witness statement, Ms Goldberger deposed, in summary, as follows:

(a) she denied Mr Hadad’s assertion that in 2013 she and Mr Hadad wanted to own their own home and had decided to buy a property for their family;

(b) rather, she initiated the idea of moving to a new home, because she wanted a home with ground level access to a garden and outdoor entertaining area;

(c) she said that she and Mr Hadad did not have the money to buy their own home;

(d) she discussed moving to a new home with Mr Goldberger, who said he would have to sell the Kooyong Road property to purchase another property, as he was ‘not sitting on two houses at the same time’;

(e) Mr Goldberger has never given any real property to her as gifts, and the properties in which she has lived over time have all been owned by trusts controlled by Mr Goldberger;

(f) she deposed as follows:

Nir and I have never had any discussions to the effect that he and/or I owned the Malvern Property. From time to time, particularly in the past three years, Nir would bring up the issue of ownership of the home and get agitated on each occasion when I reminded him that the Malvern Property was owned by a trust and did not belong to us. We always knew that it was owned by Glideware. Glideware bought the property, and paid for the renovations to the property before Nir and I moved in. I never had any discussions with my dad or Nir to the effect that the property belonged to me and/or Nir. I never regarded the Malvern Property as a gift from Glideware or my dad - I never had any discussion with my dad to this effect.

(g) since she and Mr Hadad moved to the property, all utility bills and rate notices have been sent to Mr Goldberger’s office for payment.

In relation to Mr Hadad’s assertion that he was able to fund the purchase of the property, Ms Goldberger deposed that while she was not privy to the details of Mr Hadad’s financial position (and, she said, he actively withheld information about his financial position from her), she made the following observations:

(a) all of the properties in which she and Mr Hadad have lived over the course of their marriage have been owned by trusts controlled by Mr Goldberger;

(b) Mr Goldberger has paid for all of her children’s childcare fees, kindergarten fees, and private school fees, and she has a credit card which Mr Goldberger pays off;

(c) she referred to an incident in 2021 when Mr Hadad became angry after a school fee bill was delivered to the property;

(d) before she and Mr Hadad moved to the property in 2015, substantial renovations were done at the property, which were managed and paid for by a trust controlled by Mr Goldberger; and

(e) she was present during a conversation in 2015 when Mr Hadad asked Mr Goldberger if he (that is, Mr Goldberger) would purchase the neighbouring property. Mr Goldberger said words to the effect that:

You’re not in a financial position to buy it. I am not buying it. There is nothing to discuss. This is not a conversation. It’s not happening.

Ms Goldberger disagreed with Mr Hadad’s assertion that if he needed financial assistance to purchase the property, he would have been able to obtain that assistance from his parents, for the following reasons:

(a) Mr Hadad’s parents never provided or offered to provide them with any financial assistance to purchase any property in Australia, and Mr Hadad told her many times that they would not do so, because the couple lived in Australia, not Israel;

(b) Mr Hadad’s parents made it obvious to Ms Goldberger that they were not happy that Mr Hadad had married her; and

(c) Mr Hadad’s mother was a retired social worker, and his father was a retired fireman.

In response to Mr Hadad’s evidence about his conversation with Mr Goldberger in which Mr Goldberger was said to have made the representation regarding the property, Ms Goldberger said that she was not privy to any such conversation, and said that ‘the words Nir attributes to my dad are not the sort of language my dad uses’.

Ms Goldberger gave the following evidence in relation to Mr Hadad’s objection to the development proposal at the neighbouring property:

I was present when my dad said to Nir words to the effect of: “You should not object. You are fighting a losing battle.” Whenever Nir complained to me about Rigby Cooke’s invoices, I said to him words to the effect of: “Why are you bothering? No one is asking you to spend money. Why are you doing this for a property that does not belong to us? This is dad’s property.” At no point did Nir say to me that he thought the Malvern Property was ours. I recall raising this with my dad, and him saying words to the effect of “I don’t understand why he’s doing it. I didn’t tell him to do it. He is just wasting time and money because he’s not going to get anywhere.”

Ms Goldberger said that Mr Hadad’s evidence to the effect that they did not ask Mr Goldberger for assistance to purchase a property at Noosa Heads was incorrect, stating as follows:

I asked my dad if we could use the Malvern Property as security to fund the purchase of the Noosa Heads property. He rejected my request and said words to the effect, “No, you can’t do that because this is not your property. You cannot use it as security. There is a mortgage on the property. It belongs to the trust and it’s not going to happen.”

Ms Goldberger’s cross-examination commenced with questions about the intervention order preventing Mr Hadad from visiting the property. She denied that she had taken out the intervention order or that she had requested the police to take out the intervention order.[18] She accepted that the dissolution of her relationship with Mr Hadad was ‘a very unfriendly break-up’. When it was put to her that it would be her preference for Mr Goldberger to own the property rather than for Mr Hadad to have a half share of the property, she denied that she would do anything to cause financial difficulties for her ex-husband.
[18]In Victoria, applications for intervention orders are often made by a police officer, not the person seeking to be protected by an intervention order. However, I assume that Victoria Police would generally initiate an application after receiving a complaint from an interested party.

Ms Goldberger confirmed that she was the person that initiated the search for a new home in 2013, and the reasons why, but that she also involved her husband and father, as she and Mr Hadad were unable to do anything about finding a new home without the assistance of Mr Goldberger. They would sometimes all go out together to inspect properties.

Ms Goldberger denied that she had any conversations with Mr Hadad about purchasing their own home. She had no idea as to whether Mr Hadad could afford to buy the property. He never told her how much he had received from the sale of the two tranches of the Octopus Media business.

Ms Goldberger gave evidence that she did not recall who attended the first inspection of the property. She recalls her father saying that it looked like a good buy. She did not recall who were the parties to the contract of sale, or signing the contract of sale.

She said that since the purchase of the property, the house on the property has changed aesthetically, not structurally. The renovation works were funded by Mr Goldberger, but she was involved in the decision making for the renovations. She denied ever seeing the valuation report prepared for the purpose of the family law proceeding, which was addressed to both her solicitors and Mr Hadad’s solicitors.

Ms Goldberger said that she did not recall any conversation where Mr Hadad told her that Mr Goldberger told him that he would buy the property for them. She disagreed with the proposition that she knew that the property belonged to her and Mr Hadad, and denied siding with her father in this proceeding because she wants his continued financial support, saying that she does not want to inflict damage upon her ex-husband, because what assets he has are hers too.

Mr Nir Hadad

In his witness statement, Mr Hadad gave evidence regarding the background to the purchase of the property, and the representations said to have been made by Mr Goldberger (see paragraphs 15 and 16 of these reasons). He said that he located the property with the assistance of Abercromby Real Estate, and inspected the property with a builder friend of his, and separately with Mr Goldberger. Both told him that it was a good buy. In relation to the funding of the purchase, Mr Hadad deposed as follows:

Prior to locating the Malvern Property and inspecting it I had no discussions with David about funding the purchase of the property we were going to buy because I was running a profitable group of companies called Octopus Media and was able to afford to finance and purchase the Malvern Property, and the other alternative properties we had looked at. Although, I knew I could have secured a mortgage and serviced it myself through Octopus Media, if I needed financial assistance, I planned on asking my parents who lived in Israel.

In his witness statement, Mr Hadad also gave evidence about his expenditure (or perhaps, more accurately, expenditure by Octopus Media) upon improvements to the property and otherwise in connection with the property. This expenditure and effort included the following:

(a) obtaining approvals from the local council to remove trees from the property in June 2014, and engaging with the local council about an overhanging tree in 2017;

(b) payments to Rigby Cooke Lawyers totalling $81,929.92 between June 2015 and February 2020 in connection with the objection, and $6,545 to a planning consultant. Mr Hadad deposed as follows:

I discussed the Planning Permit objection on many occasions with David and also Mr Cossen, his in-house solicitor. David also accompanied me to Council meetings in relation to the objection, and where I spoke as the owner of the Malvern Property.
At no stage did David say to me that he thought the Planning Permit objection was a waste of time, was likely to fail, or that I should not spend my money on it. Neither did Mr Cossen.

(c) installing a theatre room and other audio-visual equipment at the property in 2015, at a total cost of $70,192;

(d) sundry works and upgrades to the property between 2015 and 2022 totalling $114,439 and €9,796.40; and

(e) in relation to the al-fresco area constructed at the rear of the property, Mr Hadad deposed as follows:

I also engaged and paid a builder, Tony Nicotera to build an alfresco area at the Malvern Property at a cost of $55,000.
I spoke to David about the works Paula and I were proposing to do in relation to the alfresco area, and told him what we were planning. At no stage did he tell me not to do the works, or that they would not add value to the Malvern Property.

Mr Hadad denied that he and Ms Goldberger sought assistance from Mr Goldberger to purchase a property at Noosa Heads, saying that he was earning sufficient income from Octopus Media to service a mortgage to buy that property. He identified the financial statements for Octopus Media for the financial year ended 30 June 2021 (‘2021 accounts’).

Mr Hadad said that he was involved in other business ventures with Mr Goldberger where Mr Hadad would be appointed as a director of one of Mr Goldberger’s companies for the purpose of a transaction, and Mr Goldberger would ask him to resign his directorship of the relevant company after the completion of the transaction.

In relation to the question of detriment, Mr Hadad deposed as follows:

If the Plaintiff is held to be the proper owner of the Malvern Property then Paula and I will suffer significant detriment. If I had known that David did not intend for the Malvern Property to be mine and Paula’s at the time the contract to purchase was entered into I would never have nominated the Plaintiff as substitute purchaser. I would have completed the purchase with funds available from my Octopus Media group of companies, as well as borrowings that the group would have been able to obtain.
Had I completed that purchase then Paula and I would have had ownership of a valuable asset that would have appreciated in value since 2015. Instead, I am faced with the prospect that I have no home to live in, and no home that can form an asset to be split between myself and Paula in the Federal Circuit and Family Court proceedings.
If I had known that David did not intend to honour his statements made at the time of purchase of the Malvern Property I also would not have expended the sums that I did on upgrading the Malvern Property. The Plaintiff will receive the benefits of those upgrades if it is held to be the proper owner of the Malvern Property.

Under cross-examination, Mr Hadad agreed that when he first moved to Melbourne he lived in the South Yarra apartment, which he knew was owned by one of Mr Goldberger’s companies. He accepted that he did not have any interest in the South Yarra apartment or the Kooyong Road property. He recalls buying furniture for the South Yarra apartment and the Kooyong Road property.

Mr Hadad agreed that he always lived rent-free at properties owned by Mr Goldberger or his companies, and as such, it was open to him to put his own money towards other things, such as investments.

Mr Hadad gave evidence that he knows quite a bit about how Mr Goldberger operates, and that he knows that Mr Goldberger holds a lot of his properties in trust arrangements. He knows that Ms Goldberger’s sister and her husband live at a property in Toorak owned by Mr Goldberger, probably rent-free.

Mr Hadad rejected the contention that all that was planned in 2013 was an upgrade to their housing situation. At that time, he had a successful advertising business, and every young couple wants to own their own home.

Mr Hadad gave evidence that Mr Goldberger made the representation to him after he and Ms Goldberger signed the contract of sale for the property. He could not recall the location where the conversation took place, but remembers the conversation very clearly. It was in this context that he gave evidence that the conversation took place on a Thursday, during an inspection of the property, the day prior to the date nominated by the real estate agent as the deadline for him and Ms Goldberger to give an answer about whether they wished to purchase the property (see paragraph 165 of these reasons).

Mr Hadad was taken to his amended defence and counterclaim and his witness statement, and the different conditions said to have been imposed by Mr Goldberger upon the purchase of the property. Mr Hadad confirmed that the condition imposed by Mr Goldberger was that referred to in his witness statement: that is, that Mr Hadad and Ms Goldberger were allowed to carry out any renovations they wished, and were required to maintain the home and take care of it.

Mr Hadad gave evidence that Mr Goldberger had been like a father to him for 20 years, given that he had no family in Australia, and that he trusted Mr Goldberger absolutely. He reiterated that he remembered his conversation with Mr Goldberger about the property very clearly, as that is why he signed the contract of sale in his own name. Glideware was not mentioned at that time. It was only after the contract of sale was signed that Glideware was first mentioned by Mr Cossen, Mr Goldberger’s lawyer, who he trusted.

It was put to Mr Hadad that in his affidavit in the family law proceeding, he had alleged that Mr Goldberger had gifted the property to him and Ms Goldberger. Mr Hadad explained that the use of the term ‘gift’ (which was not referred to in his witness statement in this proceeding) was really a translation issue, because the conversation between him and Mr Goldberger was conducted in Hebrew, not English.

That Mr Hadad and Ms Goldberger signed the contract of sale was also said by Mr Hadad to be consistent with what was a material difference between this transaction and the arrangements with respect to the South Yarra apartment and the Kooyong Road property, being that this was the first occasion where a specific property was purchased at the request of Mr Hadad and Ms Goldberger. In the case of the South Yarra apartment, Mr Hadad and Ms Goldberger moved in to a property which had been developed by and was owned by Mr Goldberger and his business partner. In the case of the Kooyong Road property, the couple only moved there after Glideware had purchased the property, made the property available to Mr Goldberger’s sister to live in for a period of time, and then arranged for the construction of a new house on the property. In contrast, when Glideware purchased the property, Mr Hadad and Ms Goldberger had input into the selection of the property, and input into the renovations, albeit that Mr Goldberger had the final word in respect of both the purchase of the property and the renovations.

I accept that the circumstances in which the property was identified and purchased and came to be occupied by Mr Hadad and Ms Goldberger were somewhat different than the circumstances in which they came to occupy the South Yarra apartment or the Kooyong Road property. However, in the absence of any persuasive evidence that Mr Goldberger represented to Mr Hadad and Ms Goldberger that they would hold a beneficial interest in the property, the difference perhaps is more explicable by the couple’s changing life stages and family circumstances than any change in Mr Goldberger’s intentions as to how major assets were to be held within the family. When Mr Hadad and Ms Goldberger moved into the South Yarra apartment, they were newly married, and had just returned to Australia. At the time they moved into the Kooyong Road property, they had no doubt needed more space, having had three children in two years. By the time they commenced searching for the property, they had three growing children, such that their needs and aspirations may have changed again.

Accordingly, without anything more, the involvement of Mr Hadad and Ms Goldberger in the selection of the property and the execution of the contract of sale did not confer any ownership rights with respect to the property.

Mr Hadad relied upon his expenditure upon improvements to and in connection with the property as providing powerful support for his contention that, contrary to the case with respect to the South Yarra apartment and the Kooyong Road property, he had a beneficial interest in the property. After all, he asked rhetorically, why would he spend money on the property if he did not believe that it was not his own?

The following analysis of the documents in the court book and Mr Hadad’s evidence regarding his expenditure on the property makes two presumptions in favour of Mr Hadad: first, that the invoices rendered by suppliers in evidence were actually paid by someone other than Glideware, and that funds expended by Octopus Media can be treated as being expenditure by Mr Hadad and Ms Goldberger.

Expenditure upon the objection to the development proposal[27]
Rigby Cooke invoices   $81,929.92
Senior counsel  $50,000.00
Planning consultant  $6,545.00
Other expenditure in connection with
[27]Between 2015 and 2020.
[28]While not claimed as such, a review of four invoices show that funds were spent on consulting reports and repairs and cleaning associated with the development of the neighbouring property. It is possible that the developer of the neighbouring property would have been liable to pay some of these expenses, but there is no evidence about this.
the development proposal[28]  $23,365.10
Other major improvements
Al-fresco area  $55,000[29]
[29]Some time was spent during the course of Mr Hadad’s cross-examination seeking to undermine Mr Hadad’s contention that he spent $55,000 on the al-fresco area at the property. Counsel for Glideware successfully established that the quotations and invoices relied upon by Mr Hadad did not verify this claim, but I am not sure how much turns on this, save for being yet another example of Mr Hadad’s somewhat cavalier approach to giving evidence. It is apparent from the photographs in evidence that the al-fresco area exists, and Mr Goldberger’s evidence is that he was not prepared to pay for it, so that I can assume that it was paid for by Mr Hadad and Ms Goldberger and/or Octopus Media. However, some of the invoices included in the sums recorded under ‘other improvements’ may relate to the al-fresco area.
Audio-visual equipment and installation in 2015               $70,192
Tennis court  $1,320 for repairs in 2021, quotation for $11,946 in 2017.[30]
[30]There is no evidence as to whether all of the cleaning, repairs and resurfacing referred to in the latter quotation were actually carried out.

Repairs and maintenance  $1,928.67
Other improvements[31]
2015      $18,311.65
2016      $17,730.62
2017      $7,521.88
2018      $9,377.20
2019      -
2020      $1,909.44
Total other improvements       $38,850.79
Total expenditure:  $327,811.48

[31]Excluding movable furniture and other chattels, but including expenditure on lighting fixtures and interior design services.

While I accept that not all of the expenditure referred to above has been verified, and that there is likely to have been some double counting, the above analysis shows that the amounts spent by Mr Hadad and Ms Goldberger in connection with the property were not trivial.

However, that this expenditure was made does not necessarily advance Mr Hadad’s case. Significantly, a substantial part of this expenditure was referable to items that Mr Goldberger expressly stated that he was not prepared to fund, such as the audio-visual system and the al-fresco area.

The timing of the construction of the al-fresco area and the installation of the home automation and entertainment system (being in the latter part of 2015) is consistent with Mr Goldberger’s evidence that while Mr Hadad and Ms Goldberger had input into the renovation process, Mr Goldberger was the final decision-maker concerning the property. Presumably, once Mr Goldberger rejected the requests by Mr Hadad and Ms Goldberger to incorporate the construction of the al-fresco area and the installation of the home automation and entertainment system in the main renovations funded by Glideware, Mr Hadad and Ms Goldberger decided to fund and arrange those improvements themselves fairly soon after moving in to the property, because they were important to their enjoyment of the property.

Further, I agree with the submissions advanced on behalf of Glideware to the effect that, in circumstances where Mr Hadad and Ms Goldberger were living in the property rent-free and indefinitely, it is unsurprising that they would have chosen to spend their own funds on improvements which were relatively modest (at least in comparison with the scale of the improvements made by Glideware to the property) but were important to them for lifestyle reasons, such as the home entertainment system and the al-fresco area.

Further, I do not consider the claimed expenditure upon repairs and maintenance to amount to significant detriment. Some of the expenditure claimed was relatively modest (for example, expenditure on refrigerator repairs and pest control), and other, more substantial expenditure, such as repairs to the tennis court surface, were clearly attributable to the family’s use of the property.[32] While ordinarily in an arm’s length tenancy arrangement the owner of the relevant property would be responsible for repairs and maintenance, it is not improbable that the lines of responsibility would be less strictly demarcated in an informal family arrangement such as the present case.
[32]The quotation for the repairs to the tennis court referred to the repairs being necessary because of damage caused by the erection of a marquee on the property.

Accordingly, accepting Mr Hadad’s evidence as to what he spent on the property at face value, the expenditure of money on repairs and maintenance, which I accept is usually a necessary incident of home ownership, does not of itself establish any entitlement (or belief as to any entitlement) to the property in the circumstances of the current case. Given that Mr Hadad and Ms Goldberger have not had to pay a cent in rent, utility bills, or care and education costs for their children for some 20 years, and given that they were generating at least a reasonable income from Octopus Media, it hardly seems unreasonable or unlikely that they would dip into their own resources from time to time to pay for incidental expenses associated with their occupancy of the property, rather than simply sending the bills to Mr Goldberger for every item of expenditure connected with their occupation of the property.

Finally, while I accept that, all other things being equal, the expenditure by Mr Hadad on the legal and other fees associated with the objection to the development of the neighbouring property is consistent with a belief on his part that he was an owner of the property, I accept that there is an alternative explanation for his dogged pursuit of the objection, being a concern about the impact of the development upon his enjoyment of the property. That said, had the position with respect to the question of whether the representation was made been a little less clear cut, I may have reached a different view regarding the significance of Mr Hadad’s expenditure upon the objection, given the significant sums of money involved, albeit spread over a five year period.

Accordingly, for all the reasons set out above, and in particular, by reason of my concerns about the reliability of Mr Hadad’s evidence, I do not accept that the representation was made. While I do accept that Mr Goldberger told Mr Hadad and Ms Goldberger that he, or an entity associated with him, would purchase the property, I do not accept that he made any representation to the effect that Mr Hadad and Ms Goldberger would occupy the property in accordance with any arrangement other than what had occurred in the past.

Given my findings regarding the question of whether the representation was made, I will deal with the remaining elements of Mr Hadad’s cause of action based upon the alleged representation reasonably briefly.

In order for Mr Hadad to establish that he had acted to his detriment in reliance upon a belief or assumption engendered by a representation made by Mr Goldberger, it would be necessary for Mr Hadad to establish that his belief or assumption was reasonably held. However, in my view, even if Mr Hadad’s evidence about what was said to him by Mr Goldberger is accepted, I do not consider that any such belief was reasonably (or even genuinely) held by Mr Hadad. The words attributed by Mr Hadad to Mr Goldberger could not, in my view, have been construed as amounting to a representation to convey a beneficial interest in the property, particularly viewed in the context of the arrangements with respect to the previous properties.

In any event, even if what Mr Goldberger said raised any belief, or even just hope, in Mr Hadad’s mind that he and Ms Goldberger would have a beneficial interest in the property, what happened after the purchase of the property would have dispelled any such belief or hopes. It is not in dispute that immediately following the purchase of the property, Mr Goldberger arranged for one of his companies to carry out, and for Glideware to fund, substantial renovations to the property. While Mr Hadad has expressed some doubt as to whether the renovation costs were as high as that contended for by Glideware, and submitted that the information contained in the spreadsheet relied upon by Glideware was unverified, it could not be seriously in dispute that Glideware paid for substantial renovations to the property.

It seems to me to be unlikely in the extreme that Mr Hadad could reasonably believe that Glideware would not only purchase a valuable property for him and Ms Goldberger, but also spend nearly half as much again on renovations to the property.

As for the question of whether Mr Goldberger knew of any belief or assumption on Mr Hadad’s part, there is absolutely no evidence that, prior to around 2018 or 2019, that Mr Goldberger had any inkling that Mr Hadad and Ms Goldberger had any belief that they had any interest in the property. Indeed, it was not put to him that he had any such knowledge or belief, or that he had decided to give Mr Hadad and Ms Goldberger the property, and had told them so, but had changed his mind.

Indeed, there was no reason for Mr Goldberger to consider or even suspect that either Mr Hadad or Ms Goldberger were operating under a belief that they held a beneficial interest in the property. Even if the words attributed to Mr Goldberger were spoken by him, then, viewed in their context, all they meant was that Mr Goldberger agreed to purchase the property for Mr Hadad and Ms Goldberger to live in. He had no reason to believe that there would otherwise be any change to the status quo, or any motivation for there to be any change in the status quo. Accordingly, I do not accept the submission advanced Mr Hadad to the effect that if I found that Mr Goldberger used the words attributed to him by Mr Hadad in his witness statement, then Mr Goldberger must have known that Mr Hadad would rely upon their promissory effect. While I accept that Mr Goldberger told Mr Hadad that he would buy the property, and possibly even said the words ‘for you’, I do not consider that taken in their proper context, those words would amount to an actionable representation. Even if they could be characterised as such by others, I do not accept that Mr Goldberger could or would have understood Mr Hadad to have characterised them as such.

I accept the evidence of Mr Goldberger and Ms Goldberger (which was corroborated by Mr Greenberg), that in 2018 and 2019 the couple requested that they be able to use the property as security to fund the purchase of properties in Queensland and Israel. While these approaches of themselves evidence an understanding on the part of Mr Hadad or Ms Goldberger that they had no entitlement to the property (otherwise, why would they need to request permission to deal with it), or at the very least, suggests that they were oblivious as to the true position. However, even if those requests could be characterised as giving Mr Goldberger notice of any belief or assumption on their part, which I doubt, then the responses of Mr Greenberg and Mr Goldberger would have promptly disabused them of any such belief or assumption. Instead, this evidence tends to support Glideware’s contention that no such belief or assumption was held by Mr Hadad and Ms Goldberger, or either of them. After all, if they truly believed that the property was theirs, or had been promised to them, and had conducted their affairs in reliance upon that promise or belief, then surely they would have pushed back upon Mr Goldberger’s refusal to allow them to exercise one of the rights associated with a proprietary interest in the property, being the right to use the property as security for borrowings for further investments.

As for the question of the detrimental reliance, for the reasons outlined in the section of these reasons concerning whether the representation was made, I do not accept the counter-factual posed by Mr Hadad, being that had Mr Goldberger not made the representation, he and Ms Goldberger would have purchased the property themselves.

The complete absence of any cogent evidence of Octopus Media’s financial position in 2013 and 2014, in circumstances where such evidence would have been available to Mr Hadad to produce, has been discussed earlier in these reasons. I can only assume that adducing such evidence would not have been helpful to Mr Hadad’s case. Further, Mr Hadad’s failure to purchase the neighbouring property only a year or two after Glideware purchased the property, despite clearly feeling strongly about the development of the neighbouring property, is inconsistent with his contention that he had sufficient funds to purchase the property at the relevant time.

I accept that expenditure by Mr Hadad (or Octopus Media) upon improvements to the property (see paragraph 226 above) could constitute relevant detriment. However, for the reasons discussed earlier in these reasons, I am not satisfied that those funds were spent in reliance upon any assumption they held about the ownership of the property. In the case of the al-fresco area and the home entertainment system, these were improvements that the couple wanted to make because they would improve the amenity of the property, but Mr Goldberger refused to pay for them. As observed by counsel for Glideware, given that the property was to be their ‘forever’ home, it is quite reasonable to infer that, in the face of Mr Goldberger’s refusal, that they decided to do those works themselves.

Finally, if my conclusions regarding the making of the representation are found to be wrong, and Mr Hadad has reasonably relied to his detriment upon any representation by Mr Goldberger with respect to a beneficial interest in the property, I consider that there is a real doubt as to whether, in all of the circumstances, it would be unconscionable for Glideware to deny Mr Hadad’s beneficial interest in the property. The question of what might have been an appropriate remedy had Mr Hadad’s claim been made out will be discussed in more detail later in these reasons, but for present purposes, it seems to me that requiring Glideware to convey a half interest in the property to Mr Hadad, unencumbered, would be quite disproportionate to the relatively modest detriment incurred by Mr Hadad, even taking his evidence as to what he spent on improvements to and in connection with the property at its highest and best.

Estoppel by acquiescence

Mr Hadad contended that, even if I could not be satisfied that the representation was made, then Mr Hadad can rely upon the conduct of Mr Goldberger in standing by while Mr Hadad and Ms Goldberger spent funds on improvements to the property, knowing that Mr Hadad held the mistaken belief that he held a beneficial interest in the property. As will be seen from what follows, many of the factual findings I have made with respect to the representations claim are also relevant to the claim based upon estoppel by acquiescence.

Mr Hadad submitted that even if I were to reject Mr Hadad’s claim that he relied upon an express representation made by Mr Goldberger, he has made out the necessary elements of an estoppel by acquiescence, as follows:

(a)Mr Hadad has formed an assumption that he and Ms Goldberger were the owners of the Malvern Property (assumption);
(b)Mr Goldberger knows Mr Hadad has formed that assumption (representation by silence). Whilst Mr Goldberger denies any such knowledge that denial only holds weight if it is accepted that Mr Goldberger did not make the statements attributed to him by Mr Hadad. If Mr Hadad's version of events is accepted then Mr Goldberger must have known that Mr Hadad formed the assumption, based on Mr Hadad's subsequent expenditure on the Malvern Property;
(c)Mr Goldberger’s continued silence caused Mr Hadad to continue to hold the assumption (reliance);
(d)Mr Hadad incurred the expenditure on the Malvern Property based on the assumption he had formed (inducement);
(e)Mr Hadad would suffer detriment as outlined above if Mr Goldberger were permitted to depart from the assumption (detriment);
(f)It would be unjust for Mr Goldberger to resile from the assumption (unconscionability).

Mr Hadad took issue with the proposition that a key element of the cause of action of estoppel by acquiescence is that Glideware profited from the improvements carried out by Mr Hadad acting under his mistaken assumption as to his interest in the property. Mr Hadad submitted as follows:

It is not a requirement of the law of estoppel by acquiescence that the owner must be placed in a materially better position in order for an estoppel to arise. Statements in relation to “preventing the owner from profiting by mistake” either overstate or oversimplify the issues in relation to “profit”. It must be kept in mind that proprietary ·estoppel, whether by encouragement or acquiescence, is directed to preventing unconscionable conduct by the true owner. Having set up a state of affairs, either by making statements or remaining mute when something should be said, the owner can not then resile from the consequences of the state of affairs they have created. It is not necessary to take an accounting to determine if remaining mute has led to an improvement in the owner’s position for an estoppel to arise.

In any event, Mr Hadad submitted that it is open to the Court to find that the works paid for have added to the value of the property, albeit in a presently unquantifiable amount.

Glideware submitted that Mr Hadad could not have assumed, reasonably or otherwise, that he and Ms Goldberger were the true owners of the property, and that the improvements and contributions made by Mr Hadad to the property have been vastly overstated. Glideware submitted that Mr Hadad adduced no evidence that Mr Goldberger knew of any mistaken assumption by Mr Hadad with respect to the ownership of the property, or that Mr Goldberger deliberately refrained from correcting Mr Hadad’s mistaken assumption. Mr Hadad has adduced no evidence that Glideware had profited from any expenditure by Mr Hadad on the property.

In relation to the question of whether Mr Hadad was required to establish that Glideware had profited from Mr Hadad’s expenditure, or merely that he had incurred a detriment, counsel for Glideware noted that his researches have not identified any authority where it has been held that the requirement for the true owner to have profited from the expenditure is not a necessary element of the cause of action.

Mr Hadad referred to the decision of Ward CJ in Eq in E Co v Q[33] in support of the proposition that the Court’s focus should be on the detriment incurred by the claimants, not the profit realised by the estopped party. Her Honour observed as follows:

As a preliminary matter, it can be noted that there is some support in the cases for the view that, while an estoppel by encouragement may give rise to an equity in a plaintiff to have an expectation enforced (Sidhu v Van Dyke at [82]), an estoppel by acquiescence is generally concerned with preventing a defendant from profiting from a plaintiff's mistake (see, for example, the discussion in the fourth edition of MGL at [17-090]; [17- 110]-[17-115]).
There is academic opinion to the effect that such a distinction is, at most, “no more than a prima facie guide to appropriate relief” (see JD Heydon and MJ Leeming, Cases and Materials on Equity and Trusts (8th ed, 2011, LexisNexis) at [18. 1 OJ) and much can be said for the view that seeking “a single ‘right’ approach” to the question of remedy “inevitably runs the risk of oversimplification, in part owing to the very different factual situations which may generate a proprietary estoppel” (Spencer Bower at [12.182]).[34]

[33][2018] NSWSC 442.

[34]Ibid [1174]-[1175].

Given the factual findings that I have made, and will make in respect of Mr Hadad’s claims, it is strictly speaking not necessary for me to resolve the question of whether my statement of the necessary elements in Salehi[35] was correct, or whether it went too far. Of course, when it comes to estoppel by representation or encouragement, there is no requirement that the legal owner profited from the detrimental reliance of the recipient of the representation or encouragement, and, in the case of an estoppel by representation, the necessary detriment may not necessarily involve expenditure upon improvements to the relevant property.
[35][2023] VSC 535 [212].

However, it seems to me that it is tolerably clear from the authorities that in cases of estoppel by acquiescence, the necessary detriment must be expenditure on improvements to the property, not expenditure merely in connection with the property, or other detriment, such as the foregoing of other opportunities.

Accordingly, in the current case, it is only the funds spent by Mr Hadad on actual improvements to the property that are relevant to the question of whether Glideware is estopped from denying Mr Hadad’s beneficial interest in the property. Even if Mr Hadad’s evidence to the effect that he could have afforded to purchase the property is accepted (which it is not) then that lost opportunity would not constitute relevant detriment. Further, I cannot see how expenditure upon furniture and other movable chattels or repairs and maintenance could be considered relevant detriment.

I do accept that the expenditure upon the objection to the development of the neighbouring property falls into a grey area: while the expenditure did not affect the physical fabric of the property, it was arguably targeted at preserving the capital value of the property.

I accept that there are sound reasons for focussing upon the detriment incurred by those labouring under expectations or assumptions rather than the benefits to the owner of the property, including a degree of consistency in the application of equitable principle. However, it is arguable that there are sound reasons for, in effect, imposing a higher bar upon claimants where the true owner has not actively encouraged the claimant to assume that the claimant has a beneficial interest in the property, but has simply stood passively while the claimant spent money on the property, labouring under a mistaken belief as to its ownership. After all, the doctrine of estoppel by acquiescence represents an exception to the general principle that if one party spends money on the property of another, the prima facie position is that there is no acquisition of an interest in the property concerned. Something more must be present: the question is whether mere knowledge of the true owner of the mistaken belief and the claimant’s reliance upon that belief is sufficient, or whether it is also necessary that the true owner benefits from the expenditure.

Perhaps the most satisfying way of reconciling the distinction (if it exists) between the necessary elements of a claim based upon estoppel by acquiescence and other forms of proprietary estoppel is to recognise the ‘profit’ element as something which powerfully influences the question of whether it is unconscionable for the true owner to assert their beneficial ownership of the relevant property. After all, if a person acting under a mistaken assumption as to their interest in a property spends a modest sum of money on additions or alterations to a property which were not requested or encouraged by the true owner, and have had no material impact on the value of the property, then it may seem somewhat incongruous for it to be held to be unconscionable for the true owner to deny the claimant a proprietary interest in the relevant property.

However, in the end, the discussion above is somewhat academic, in that I am not satisfied that Mr Goldberger stood by and acquiesced in Mr Hadad making improvements to the property knowing that Mr Hadad believed he had a beneficial interest in the property. While I accept that by about 2018 or 2019 Mr Goldberger may have become alert to the possibility that Mr Hadad and/or Ms Goldberger held such a belief by reason of the requests they made to use the property as security for further real estate investments, by that point in time, most of the expenditure which truly amounted to improvements upon the property had already been incurred, as can be seen from the analysis in paragraph 226 of these reasons.

Where a claimant seeks to make a good claim based upon estoppel by acquiescence, the owner’s knowledge of the claimant’s mistaken assumption, and their inaction in standing by while possessing that knowledge, is critical to making good their cause of action.[36] There is no evidence whatsoever that at least prior to 2018 or 2019, when the question of using the property as security was first raised by Mr Hadad and Ms Goldberger, that Mr Goldberger knew, or even suspected, that Mr Hadad and/or Ms Goldberger were labouring under any mistake as to the ownership of the property. As discussed earlier in these reasons, I accept that it was never Mr Goldberger’s intention that the property be owned by any party other than the trust. I also accept that Mr Goldberger had no reason to believe that Mr Hadad and Ms Goldberger understood the arrangements with the property to be any different from the arrangements with respect to the South Yarra apartment and the Kooyong Road property.
[36]E Co v Q [2018] NSWSC 442 [989].

There was also no evidence to suggest that Mr Goldberger knew, or ought to have known that Mr Hadad spent substantial sums of money on improvements to the property. First, only a portion of the funds spent were spent on actual capital improvements to the property, such as lighting fixtures and the al-fresco area. The rest of the expenditure was on chattels, such as furniture, and services, such as interior design services and minor repairs, and there is some doubt as to whether the home automation and entertainment system can properly be considered to be improvements to the property, as presumably the hardware can be relocated. Secondly, while one would expect that Mr Goldberger would be aware that an al-fresco area had been constructed and a home entertainment system installed at the property, that does not equate to knowledge of any misunderstanding by Mr Hadad and Ms Goldberger regarding their interest in the property. He was entitled to assume that they paid for those improvements themselves because they wanted them done, despite his refusal to pay for them. Thirdly, even if the funds spent by Mr Hadad on legal and other costs associated with the objection to the development of the neighbouring property could be characterised as ‘improvements’, I see no reason to doubt the evidence of Mr Goldberger and Ms Goldberger that Mr Hadad was off on a frolic of his own in that regard.

Accordingly, even setting aside the question of whether Mr Hadad has to establish that the funds spent by Mr Hadad on actual capital improvements to the property enhanced the value of the property, the necessary elements of an estoppel by acquiescence have not been made out. In particular, as discussed earlier in these reasons, Mr Hadad has failed to establish that in the period leading up to and including the period in which the majority of the funds he devoted to actual capital improvements were spent (being late 2015), that Mr Goldberger had any idea that Mr Hadad mistakenly believed that he and Ms Goldberger were the true owners of the property.

Accordingly, Mr Hadad’s claim that he and Ms Goldberger are entitled to a beneficial interest in the property because Mr Goldberger stood by and allowed them to make improvements to the property fails.

Issues regarding remedies

In the preceding sections of these reasons I have held that Mr Hadad has failed to establish that Mr Goldberger made any representation or engaged in any conduct which induced Mr Hadad to reasonably believe that he and Ms Goldberger were the true owners of the property. I have also concluded that, if any such representation was made, then Mr Hadad has failed to establish that as a consequence of his reliance upon that representation, he and Ms Goldberger lost the opportunity to purchase the property themselves. I have also held that Mr Goldberger did not stand by and acquiesce in Mr Hadad making improvements to and otherwise spending funds in connection with the property knowing that Mr Hadad and Ms Goldberger had a mistaken assumption as to their interest in the property.

However, I do accept that, if, contrary to my findings, the representation was made, and that Mr Hadad held a reasonable belief concerning his interest in the property, then he has incurred some relevant detriment in reliance upon the representation. However, the relatively modest extent of that detriment, compared with the funds spent by Glideware on the property, and compared with the benefits that Mr Hadad has derived from his rent-free occupation of the property, means that, even taking Mr Hadad’s case at its highest and best, then providing Mr Hadad with a half share of the property, unencumbered, would be a disproportionate remedy in all of the circumstances.

In Salehi,[37] I considered the question of the appropriate remedy where the claimant had spent funds upon improvements to the property, where the true owner knew that the claimant laboured under a mistaken belief to their interest in the property, stating as follows:

[The claimant] is correct to say that in cases where a party has established a claim for an equitable interest in land based upon an estoppel by representation or conduct, the prima facie remedy is to give effect to the expectation engendered by the representation or conduct. However, the position may be different if the detriment established by the claimant is modest and/or readily quantifiable, or where third party interests would be affected by an order for conveyance of the property concerned, or where giving effect to the representation would be completely disproportionate to the claimant's outlay in reliance upon the expectation induced by the representation or conduct.[38]

[37][2023] VSC 535.

[38]Ibid [216].

In Delaforce v Simpson-Cook,[39] Handley AJA referred to the decision of the England and Wales Court of Appeal, in Jennings v Rice,[40] where Robert Walker LJ stated as follows:

... there is a category of case in which the benefactor and the claimant have reached a mutual understanding which is in reasonably clear terms but does not amount to a contract ... In such a case, the court’s natural response is to fulfil the claimant’s expectations. But if a claimant's expectations are uncertain, or extravagant, or out of all proportion to the detriment that the claimant has suffered, the court can and should recognise that the claimant’s equity should be satisfied in another (and generally more limited) way.[41]

[39](2010) 78 NSWLR 483.

[40][2002] EWCA Civ 159.

[41]Ibid 114.

Handley AJA also referred to the decision of the House of Lords in Thorner v Major,[42] where Robert Walker LJ said that:

... equitable estoppel [by contrast with contract]. .. does not look forward into the future [it] looks backwards from the moment the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.[43]

[42][2009] 3 All ER 945.

[43]Ibid 975.

Whether a claimant’s rent-free occupation of the relevant property is relevant to the question of the appropriate remedy depends upon all of the circumstances. In Donis v Donis,[44] the fact that the claimant had benefited from rent-free accommodation was found to have been far outweighed by what were found to have been the life changing consequences of the claimant’s reliance upon the relevant representation. However, there have been other cases where a claimant’s rent-free occupation of property has been held to have, in effect over time, diminished or even exhausted any equity in the property created by the claimant’s detrimental reliance upon the representation or conduct.[45] Ultimately, as I said in Salehi:[46]

...the question before the Court is what remedy is necessary to alleviate the unconscionable conduct of the estopped party, and in doing so, the Court has the benefit of hindsight when evaluating whether to make good the relevant expectation or to award some lesser remedy, and in some cases, grant no relief at all.[47]

[44](2007) 19 VR 577.

[45]See, for example, Sledmore v Dalby [1996] EWCA Civ 1305.

[46][2023] VSC 535.

[47]Ibid [229].

In the current case, putting Mr Hadad’s case at its absolute highest and best, he and Ms Goldberger have spent (largely via Octopus Media) $327,811.48 in connection with the property over an eight year period, that is, about $40,000 per year. That sum is imperfectly verified, may include some elements of double counting, and includes expenditure on some items which might not strictly speaking be considered to be improvements. This sum represents less than four percent of the sum of $8,497,662 spent by Glideware in connection with the property as at 30 June 2023, which excludes council rates, land tax, and Mr Goldberger’s personal contribution to the payment of the deposit.

Over that period of time, Mr Hadad has had the benefit of rent-free accommodation in a valuable property. He accepts that, until his illness in early 2023, after he left the property, he was able to work and earn money, and was not hampered from doing so by anything associated with his occupancy of the property. That he chose to spend the funds freed up by his family’s rent-free occupation of the property on consumption rather than investment is not something that can be laid at the feet of Glideware.

Accordingly, even if Mr Hadad had established that he had acted to his detriment in reliance upon any representation or conduct of Mr Goldberger, this would be one of those cases where it would not be difficult for a court to find that the requirements of good conscience would not require the recognition of a beneficial interest in the property. At its highest, there may be some argument that there should be some reimbursement of the funds Mr Hadad has outlaid in connection with the property, given that the intervening circumstances means that he is no longer able to enjoy the benefits of that expenditure, but any calculation would need to take into account the fact that, on Mr Hadad’s own case, those funds were the funds of both Mr Hadad and Ms Goldberger.

For these reasons, it is not necessary for me to deal with Mr Hadad’s submission to the effect that any remedy afforded to Mr Hadad should be crafted to ensure that any interest he holds in the property should be treated as being unencumbered by any mortgage.

Proposed orders

Accordingly, I will make orders declaring that the first defendant does not have any right, title or interest in the property, including as the beneficiary of any implied, resulting or constructive trust. I will order that the Register of Titles remove the caveat over the property, and dismiss the counterclaim. I shall hear further from the parties on the question of costs.

SCHEDULE OF PARTIES

S ECI 2022 04692
BETWEEN:
GLIDEWARE PTY LTD (ACN 081 692 462)	Plaintiff/First Defendant by Counterclaim
- v -
NIR HADAD	Defendant/Plaintiff by Counterclaim
REGISTRAR OF TITLES	Second Defendant

[2024] VSC 34

13 February 2024