Despite the difference in terms of the scope of disclosure made to plaintiffs 1-2 compared to plaintiffs 3-7, I have not found that plaintiffs 1-2 are entitled to a broader relief, since the analysis regarding the alternative remedies is equally good for both groups of plaintiffs.
An illegal contract or a contract for the sake of appearance
So yes. I am convinced without a doubt that in the contracts that were entered into between the plaintiffs and defendant 4, lower sums were recorded than those actually paid by the plaintiffs, with the aim of enriching the coffers of defendant 4 and the transfer of the Goren hearing place and deceiving the tax authorities.
In the case law, the question arose as to how a contract stating false sums in order to defraud the tax authorities should be classified, whether it is an illegal contract that will be determined under sections 30 and 31 of the Contracts Law, or whether it is an ostensible contract under section 13 of the Contracts Law. In Shalev and Tzemach's book, it was noted that the question of the placement of a contract within the scope of section 30 or section 13 of the Contracts Law is not purely academic. Section 31 of the Contracts Law contains possibilities for balancing the interests of the parties to the invalid contract, such as an exemption from restitution or an obligation to fulfill, which do not exist in the case of a contract for the sake of appearance (Gabriela Shalev and Effi Zemach Contract Law 309 (Fourth Edition, 2019).
When the court comes to invoke an illegal contract, this does not mean that it must necessarily declare it null and void, as required by section 30 of the Contracts Law, since, although according to section 31 of the law, the court may consider the need to deter the public from entering into invalid contracts, but on the other hand, it must do justice between the parties to the illegal contract and prevent a situation in which a party to the contract can evade fulfilling its obligations. With regard to a contract whose purpose is to defraud the tax authorities, it seems that the exception inherent in section 31 of the Contracts Law is made frequently (Civil Appeal 533/80 Edrei v. Gedaliahu, IsrSC 36(4) 281 (1982)).