Haddad & Assaf - [2023] FedCFamC1F 217

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Haddad & Assaf [2023] FedCFamC1F 217

File number(s): MLC 8768 of 2020

Judgment of: HARTNETT J

Date of judgment: 31 March 2023

Catchwords: FAMILY LAW – PROPERTY – Financial Agreement dated 24 November 2017 – Where the wife sought the Financial Agreement be declared binding and enforced as if an order of the court – Where the husband sought the agreement be set aside under s 90K of the Family Law Act 1975 (Cth) for common mistake and/or because the parties, by their subsequent conduct and agreement, had abandoned the Financial Agreement – Where the husband claimed the Financial Agreement voidable – Where there had been partial compliance of the Financial Agreement by the parties – Where the husband had given broad indemnities to the wife – Where the wife had sought compliance by the husband with the Financial Agreement– Where common mistake not made out – Where the application of the husband on the grounds of abandonment does not succeed – Financial Agreement upheld.

Legislation:
Evidence Act 1995 (Cth) s 140

Family Law Act 1975 (Cth) ss 71A, 78, 79, 90B, 90C, 90D, 90G, 90J, 90K, 90BB, 90KA, 90UC, 90UD, 90UL, Part VIII, Part VIIIA, Part VIIIAB

Payroll Tax Act 2007 (Cth)

Taxation Administration Act 1997 (Cth)

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)

Cases cited:
Balodis & Balodis [2021] FamCA 499

Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337

Commissioner of State Revenue v Optical Superstore Pty Ltd [2019] VSCA 197

Fewster & Drake (2016) 56 Fam LR 38

Graham & Squibb (2019) 59 Fam LR 299

Hoult v Hoult (2013) 50 Fam LR 260

Jafari v 23 Developments Pty Ltd [2019] VSCA 201

Kostres v Kostres (2009) FLC 93-420

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451

Sanger v Sanger (2011) 46 Fam LR 275

Taylor & Johnson (1983) 151 CLR 422

Division: Division 1 First Instance

Number of paragraphs: 144

Date of last submissions: 31 October 2022

Date of hearing: 29 August 2022 – 2 September 2022

Place: Melbourne

Counsel for the Applicant: Mr Puckey KC and Dr Matta

Solicitor for the Applicant: Hargreaves Family Lawyers

Counsel for the Respondent: Mr Bartfeld KC and Mr Schmidt

Solicitor for the Respondent: VicLaw Lawyers
ORDERS

MLC 8768 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MS HADDAD

Applicant

AND:
MR ASSAF

Respondent

ORDER MADE BY:

HARTNETT J

DATE OF ORDER:

31 MARCH 2023

THE COURT ORDERS THAT:
1.The Court declares that pursuant to s 90G(1B) of the Family Law Act 1975 (Cth) the financial agreement entered into between the Applicant and the Respondent on 24 November 2017 is binding on the Applicant and the Respondent as parties to the agreement and is to be enforced as if it were an order of the Court pursuant to s 90KA(c) of the Family Law Act 1975 (Cth).
2.The application of the husband to set aside the Financial Agreement entered into between the husband and wife on 24 November 2017 is dismissed.
3.The application of the husband for orders pursuant to s 79 of the Family Law Act 1975 (Cth) is dismissed.
4.The application of the wife for enforcement and costs be listed for hearing on a date to be fixed.
5.The matter be listed for mention on 18 April 2023 at 9.30am before Justice Hartnett by Microsoft Teams.
6.The parties are at liberty to seek an alternate mention date by contacting chambers seeking such other date.

Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Haddad & Assaf has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
PRELIMINARY

The applicant wife (“the wife”), in her Amended Initiating Application filed 3 August 2022, sought that the Financial Agreement (“FA”) entered into on 24 November 2017 between the wife and the respondent husband (“the husband”), within the meaning of s 90C of the Family Law Act 1975 (Cth) (“the Act”), be declared binding pursuant to s 90G(1B) of the Act. Further, that the FA be enforced as if it were an order of the Court pursuant to ss 90KA(c) of the Act with payments of interest being made pursuant to s 90KA(b) of the Act. Otherwise, the wife sought orders as set out in Annexure A to these reasons for judgment.
The husband in his Amended Response to Initiating Application filed 22 August 2022, sought that a declaration be made, that the FA made pursuant to s 90C of the Act, be set aside pursuant to s 90K(1)(a) and/or s 90K(1)(b)-(c) and (e) of the Act. Otherwise, the husband sought orders that in the alternative the FA be declared (pursuant to s 90KA of the Act) either invalid; and/or unenforceable; and/or ineffective; and that such property orders that are required to effect an equal division of the net value of the parties’ property pursuant to s 79 of the Act be made.
The proceeding involved no claimed lack of satisfaction in relation to the FA on the basis of those matters as set out in s 90G(1)(a)-(ca) of the Act. The binding nature of financial agreements is not, however, determined solely by reference to those matters.
On 22 July 2022 the Court ordered, relevantly, that:
2. All extant applications for final orders be adjourned for hearing…solely in relation to the threshold question of whether the Financial Agreement dated 24 November 2017 (the Financial Agreement) be set aside.
At the commencement of the final hearing, the husband’s case was that the FA was affected by common mistake of the parties or unilateral mistake by one of them. On the second day of the hearing, King’s Counsel for the husband abandoned the argument of unilateral mistake.[1] I observe that likewise, in the husband’s case outline and written closing submissions, the husband’s grounds of fraud (s 90K(1)(a) of Act), impracticability to carry out the agreement (s 90K(1)(c) of Act), and unconscionability (s 90K(1)(e) of Act) were also abandoned.
[1] Transcript 2 September 2022, p.93 lines 22-23.
In closing submissions filed 23 September 2022, the husband made clear that he proceeded on those grounds as set out below, he submitting, relevantly, that:
[the wife’s application] must fail, for the following reasons…:
1.1. The BFA should be rescinded because the making of the agreement was affected by common mistake, rendering the agreement voidable.
1.2. The BFA should be rescinded as the parties have abandoned its terms and entered into a new agreement, rendering the BFA voidable.
1.3. In the exercise of the Court’s discretion, the BFA should not be enforced because of subsequent actions of the parties which would render any enforcement order unjust and inequitable.
MATERIAL RELIED UPON
The wife relied upon:
(1)her Amended Initiating Application (Family Law) filed 3 August 2022;
(2)her affidavit of evidence in chief filed 3 August 2022;
(3)her affidavit in reply filed 22 August 2022;
(4)affidavit of the her solicitor, Ms Georgia Hargreaves, filed 24 August 2022;
(5)affidavit of Mr B (C Group) filed 27 June 2022;
(6)her Case Outline filed 26 August 2022; and
(7)written closing submissions filed 14 October 2022.
The husband relied upon:
(1)his Amended Response to Initiating Application filed 22 August 2022;
(2)his affidavit filed 22 August 2022;
(3)affidavit of his solicitor, Mr Mohamed Ragab, filed 18 August 2022;
(4)his Case Outline dated 26 August 2022; and
(5)written closing submissions filed 23 September 2022 and 31 October 2022.
Ms Georgia Hargreaves (“Ms Hargreaves”) and Mr Mohamed Ragab (“Mr Ragab”) were not required for cross-examination by either of the parties. Their evidence was unchallenged.
LEGAL PRINCIPLES
The subject FA was made pursuant to s 90C of the Act as contained in Part VIIIA of the Act. As described by Gill J in Balodis & Balodis [2021] FamCA 499 at [91]:
Part VIIIA provides a statutory scheme whereby past, present or future parties to a marriage may contractually bind themselves in respect of property adjustment (or no property adjustment) in a manner that ousts the jurisdiction of the court under Part VIII, pursuant to s 71A.
The circumstances in which the Court may set aside a FA are, relevant to this proceeding, contained within s 90K and 90KA of the Act.
Section 90K of the Act is, relevantly, as follows:
(1)A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:
…
(b) the agreement is void, voidable or unenforceable; or
…
Section 90KA of the Act provides:
The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a)subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and
(b)has power to make an order for the payment, by a party to the agreement to another party to the agreement, of interest on an amount payable under the agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of Court; and
(c)in addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.
The Full Court in Kostres and Kostres (2009) FLC 93-420 explained the effect of the legislation being considered (at [128]-[129]):
We accept that in determining whether the agreement is valid, enforceable or effective, the general law relating to contracts, as well as principles of equity, are to be applied. That must be done to give effect to the parties' intentions at the time of the making of the agreement, and in the context of the statute. The legislature has been careful to include strict requirements if a financial agreement is to be binding, including the requirement of independent legal advice. In those circumstances it is clear the legislature envisaged, because of the nature of these agreements and the removal of the Court's supervisory role, that parties would receive legal advice about the necessity for their intentions to be accurately and clearly reflected in the actual terms of the agreement.
While, for the purpose of construing the agreement a court should, as in the context of a commercial agreement, apply an objective test of a reasonable bystander to the construction of an agreement, it cannot give meaning to an agreement whose terms are so imprecise or ambiguous the parties' intent cannot be discerned. This is particularly so when regard is had to provisions of Part VIIIA in the overall context of the Act.
The objective test (as referred to in the above citation) had been earlier confirmed by the High Court of Australia in Taylor v Johnson (1983) 151 CLR 422, as being a test not concerned with the actual intentions of the parties to a contract.
Mason J in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 set out the test at [352] when he observed:
…[W]hen the issue is which of two or more possible meanings is to be given to a contractual provision we look, not at the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.
The High Court in Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22] reiterated that consideration should be given “not only to the text of the documents, but all the surrounding circumstances known to [the parties], and the purpose and object of the transaction.”
Whether a financial agreement is binding is to be considered, relevantly, pursuant to ss 90G (1A) and (1B) of the Act which provide:
(1A)A financial agreement is binding on the parties to the agreement if:
(a)the agreement is signed by all parties; and
(b)one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c)a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d)the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e)the agreement has not been terminated and has not been set aside by a court.
(1B)For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application ) by a spouse party seeking to enforce the agreement.
The parties to a financial agreement may enter into another financial agreement under the same part of the Act, (namely Part VIIIA or Part VIIIAB, Division 4). Those parties must however include in the new agreement, a provision that terminates the previous agreement.[2] Otherwise a termination agreement can be entered into between the parties being an agreement that simply terminates a financial agreement, without replacing it.[3]
[2] Family Law Act 1975 (Cth) ss 90B(4), 90C(4), 90D(4), 90J(1)(a), 90BB(4), 90UC(4), 90UD(4), 90UL(1)(a).
[3] Family Law Act 1975 (Cth) ss 90J(1)(b), 90UL(1)(b).
A termination agreement is required to terminate any financial agreement whether or not it is a binding financial agreement.[4] In order for the parties to terminate a financial agreement, they must comply with conditions which are essentially the same as those required for a financial agreement to be binding.[5] A court has power to dispense with the same formal requirements as it has in respect of a binding financial agreement.[6] Following the termination of a financial agreement, a court may make such order as it considers just and equitable, including if appropriate, an order for the transfer of property in order to preserve or adjust the rights of any interested person.[7]
[4] Family Law Act 1975 (Cth) ss 90J(1), 90UL(1).
[5] Family Law Act 1975 (Cth) ss 90J(2), 90UL(2).
[6] Family Law Act 1975 (Cth) ss 90J(2A), 90UL(2A).
[7] Family Law Act 1975 (Cth) ss 90J(3), 90UL(3).
The standard of proof in the proceeding is the balance of probabilities.[8] Statements of fact in these reasons are findings of fact unless the context indicates otherwise.
[8] Evidence Act 1995 (Cth) s 140.
BACKGROUND
The husband was born in 1964 and was 57 years at trial. The wife was born in 1969 and was 53 years at trial. The husband is a health professional and company director. The wife is an office manager.
The parties commenced their relationship in 1989 and were married in 1991 in City D, Country F. The parties emigrated from Country F to New Zealand in 1995 and then in 2000, they emigrated to Australia. During the marriage two children were born, namely, Ms G, born 1991 and Mr E, born 1998. Both are now adults. In December 2016, after a period of cohabitation approaching approximately 26 years, the parties separated on a final basis. In mid-2018, a Divorce Order was made. A short time later, in 2018, the parties Divorce Order took effect. The wife and the husband have both since remarried.
During the marriage, relevantly:
(a)in early 2007, the Assaf Family Trust was established by deed with H Pty Ltd as trustee. A short time later, in 2007, the parties purchased (through the company entity) the J Business in Suburb K;
(b)in early 2012, the L Trust was established by deed with M Pty Ltd (“the company”) as trustee. The parties purchased (through the company entity) the M Business in N Town; and
(c)in mid-2012, the P Trust was established by deed with P1 Business (the second company) as trustee. The parties purchased (through the second company entity) the P1 Business.
The wife worked in the J Business, the M Business and the P1 Business (later trading as the P1 Business and the P2 Business) as the manager, and accounts officer. The husband worked in the three businesses as a health professional and was the sole company director until such time as he and the wife became co-directors of the three businesses.
The parties considered the above entities contained in [24(a)-(c)] to be the “Assaf Group”.
In late 2015, the parties purchased, through their company entity Q Pty Ltd, the trustee of the Q Family Trust, a 50 per cent interest in a vacant block of land at R Street, N Town, Victoria (“the N Town Land”) with a view to developing the land by the addition of a further business. The remaining 50 per cent interest was purchased by two third party companies. Q Pty Ltd secured the purchase of its 50 per cent ownership in the land with two loans, one with the Commonwealth Bank of approximately $249,000 and secured against the parties’ former matrimonial home in Suburb S, and the other as advanced by the National Australia Bank (“NAB”) of approximately $840,000 but as held jointly by the three registered proprietors such that the 50 per cent share of such liability of the husband and wife was $420,000. This liability was secured against the N Town Land.
In late 2017, the settlement of the sale of the parties’ former matrimonial home at T Street, Suburb S occurred and, as set out in Clause 6 of the FA:
The parties each agree and acknowledge that they have each received the sum of $875,738 being one half of the net sale proceeds of the property at [T Street, Suburb S].
RELEVANT PARTS OF THE FINANCIAL AGREEMENT
On 24 November 2017, after negotiations had occurred between the parties which included the involvement of each of their respective solicitors and the Assaf Group’s accountants at AF Limited, the parties entered into the FA. Some of the more relevant Recitals and Clauses are set out hereafter.
Recitals G and H of the FA set out the assets, resources and liabilities held by the parties in part through trust structures. They were as follows:
G. The parties have assets, resources and liabilities held by them personally or through Trusts in which they are beneficiaries as se out in Recital H, as follows:
1.   Net sale proceeds of property at
[T Street], [Suburb S] VIC   $1,751,477
2.   [U Street], [Suburb V]
QLD  E$ 400,000
less mortgage  ($ 355,997)     E$44,003
3.   Unit at [W Street], [Suburb Z]  $455,000
less mortgage  ($377,950)      E$77,050
4.   [BB Street], [Suburb DD], QLD  E$475,000
less mortgage  ($356,997)      E$118,003
5.   The [Businesses]
(a)   [M Business]
(b)   [P1 Business]
(c)   [J Business]      E$5,500,000
less mortgage  ($350,000)
less taxation liability  ($NK) E$5,000,000
6.   Property in [CC Estate], [City AX] [Country F]       E$220,000
7.   Property at [EE Street], [Suburb FF]  E$2,270,000
less mortgage  ($1,800,000)
Plus savings held in offset             $400,000        E$870,000
Held by [GG Family Trust]
8.   [1 HH Street], [Suburb JJ], QLD  E$620,000
less mortgage  $862,495        (E$42,495)
9.   [2 HH Street], [Suburb JJ], QLD   E$625,000
less mortgage  ($662,495)      (E$37,495)
Held by [KK Investments Trust]
10.   [LL Street], [Suburb MM] VIC   E$620,000
less mortgage  ($388,997)      E$231,003
11.   [NN Street], [Suburb OO]     E$420,000
less mortgage  ($359,997)      E$60,003
Held by [PP Trust]
12.   [QQ Street] [Suburb RR]–  $1,030,000
less mortgage  (E$730,000)     E$300,000
13.   [SS Street], [Suburb TT]       E$600,000
less mortgage  (E$540,000)     E$60,000
14.   [UU Street], [Suburb VV]  $450,000
less mortgage  (E$405,000)     E$45,000
15.   [WW Street], [Suburb XX]   $330,000
less mortgage  (E$300,000)     E$30,000
16.   [YY Street], [Suburb ZZ]      E$500,000
less debt ([Mr Assaf] has used his share
of the [T Street] proceeds to pay down)       (E$430,000)     E$70,000
17.   [AB Pty Ltd]  E$4,000
TOTAL NET ASSETSE$8,800,549
H. The parties have in place the following Trust structures through which some of their assets are held:
(i)[KK Investment Trust]
Trustee: [KK Pty Ltd], of which [Ms Haddad] is the sole Director and 100% shareholder. One of the beneficiaries of this Trust is [AB Pty Ltd],of which [Mr Assaf] is the sole Director and 100% shareholder.
(ii)[L Trust]
Trustee: [M Pty Ltd] (trading as [M Business]), of which [Ms Haddad] and [Mr Assaf] are co-Directors and each hold 50% of the shares.
(iii)[P Trust]
Trustee: [P1 Business] (trading as [P1 Business]), of which [Ms Haddad] and [Mr Assaf] are co-Directors and each hold 50% of the shares.
(iv)[Assaf Family Trust]
Trustee: [H Pty Ltd] (trading as [J Business]), of which [Ms Haddad] and [Mr Assaf] are co-Directors and each hold 50% of the shares.
(v)[GG Family Trust]
Trustee: [AC Pty Ltd], of which [Ms Haddad] and [Mr Assaf] are co‑Directors and [Ms Haddad] holds 100% of the shares.
(vi)[Q Family Trust]
Trustee: [Q Pty Ltd], of which [Ms Haddad] and [Mr Assaf] are co‑Directors and each hold 50% of the shares.
(vii)[PP Trust]
Trustee: [PP Pty Ltd], of which [Mr Assaf] is the sole Director and holds 100% of the shares.

Recital J of the FA provides:
The settlement reached between the parties is intended to represent an approximately equal division of their assets.
Recitals L, T and U are as follows:
L. The parties have conducted negotiations between themselves and through their legal practitioners in their desire to contract out of the provisions of Part VIII of the Act in relation to all claims against each other for property settlement and for periodic or lump sum spousal maintenance. This Agreement is intended to cover, and be in substitution for, the parties’ respective rights and obligations in relation to property settlement and spousal maintenance.
…
T. Before signing the agreement, each party was provided with independent legal advice from a legal practitioner about:
(a) the effect of the agreement on the rights of that party; and
(b) the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement.
U. Having had the benefit of that advice, the parties freely and willingly enter into this Agreement.
Recital X states:
The parties understand and consent to all the terms of this Agreement and each party believes the terms of this Agreement to be fair, just, reasonable and conscionable.
Clause 1 of the FA states:
The Recitals to this Agreement are incorporated in, and form part of this Agreement.
Clause 7 provides that:
Within 90 days of the date of this Agreement, [Mr Assaf] to pay, or cause to pay, [Ms Haddad] the sum of $2,000,000 (“the [Business] Payment”).
Clause 8 provides that:
Contemporaneously with receipt of the [Business] Payment, at [Mr Assaf's] expense, the parties each do all such acts and things and sign all such documents as are required:
(a)To give proper effect to [Ms Haddad's] resignation from any office or other position that she holds in:
(i)        [M Pty Ltd];
(ii)       [P1 Business]; and
(iii)      [H Pty Ltd].
Collectively known as "[The Companies"]
(b)For [Ms Haddad] to transfer to [Mr Assaf] any shareholding she has in [The Companies];
(c)To cause [Ms Haddad] to transfer and/or assign to [Mr Assaf] any entitlement or interest she has (including but not limited to any loan account) in:
(i)        The [L Trust];
(ii)       The [P Trust];
(iii)      [Assaf Family Trust];
collectively known as "the [Business] Trusts";
(d)For [Mr Assaf] to pay and indemnify [Ms Haddad] for any liability (past, present or future) in respect of [the companies] and the [Business] Trusts referred to at 8(a), and (c) above, including but not limited to any liability triggered by the provisions of this Agreement; and
(e)To cause [Mr Assaf] to use his best endeavours to procure a formal release of [Ms Haddad] from all guarantees which she may have given for or on behalf of [Mr Assaf] and/or in relation to [the companies] and/or the [Business] Trusts.
Clause 9 provides that:
In the event that [Mr Assaf] seeks to sell any part of [the companies] and/or the [Business] Trusts prior to paragraphs 7 and 8 being complied with:
(a)[Ms Haddad] shall do all such reasonable acts and things to give effect to such sale;
(b) [Mr Assaf] shall pay all costs associated with such sale;
(c) The net proceeds of any such sale shall be divided equally between [Ms Haddad] and [Mr Assaf];
(d)[Mr Assaf] shall pay and indemnify [Ms Haddad] against liability of whatsoever nature and kind relating to the sale, including but not limited to any liability incurred in [Ms Haddad's] name or otherwise as a result of the sale; and
(e)Any amount received by [Ms Haddad] pursuant to paragraph 9(b) shall be by way of instalment for, and shall be deducted from the [Business] Payment to be paid to [Ms Haddad] by [Mr Assaf] pursuant to paragraph 7.
Clause 10 provides that:
In the event that the parties agree to enter into a contract of sale, such that [Ms Haddad] sells her interest in [The Companies] and/or the [The Business Trusts] to [Mr Assaf], as an alternative to the arrangement outlined in paragraph 8 above:
(a)[Mr Assaf] shall meet all costs associated with such sale, of whatsoever nature and kind; and
(b)[Mr Assaf] shall pay and indemnify [Ms Haddad] against any liability incurred as a result of such sale (including but not limited to any taxation liability incurred in her name).
Clause 11 provides that:
Within 90 days of the date of this Agreement, [Mr Assaf] to pay, or cause to pay, [Ms Haddad] the sum of $110,000 (“the [Country F] Payment”)
Clause 12 provides that:
Contemporaneously with receipt of the [Country F] payment, [Ms Haddad] will do all such acts and things necessary to transfer her interest in the property held at [CC Estate] [City AX], in [Country F] (“the [Country F] Property”) to [Mr Assaf], at his expense.
Clause 13 provides:
That [Mr Assaf] pay and indemnify [Ms Haddad] in relation to any and all liabilities of whatsoever nature and kind relating to the [Country F] Property.
Clause 14 provides:
That within 90 days, the parties do all such acts and things and sign all such documents as are required to cause:
(a)[Mr Assaf] to transfer all of his right, title and interest in the following real properties to [Ms Haddad], at her expense:
(i)[U Street], [Suburb V] in the State of Queensland, being the land more particularly described in certificate of title Lot […], Plan SP […];
(ii)Unit at [W Street], [Suburb Z], in the State of Queensland, being the land more particularly described in certificate of title Lot […], Plan […]; and
(iii)[BB Street], [Suburb DD], in the State of Queensland being the land more particularly described in certificate of title Lot […], Plan SP […]
Collectively known as “[Ms Haddad's] Real Properties”
(b)The mortgages encumbering [Ms Haddad's] Real properties to be discharged and/or refinanced into her sole name contemporaneously with the transfers;
(c)[Ms Haddad] will use her best endeavours to procure a formal release of [Mr Assaf] from all guarantees which he may have given for or on behalf of [Ms Haddad] and/or in relation to [Ms Haddad's] Real Properties; and
(d)[Ms Haddad] to pay and indemnify [Mr Assaf] in relation to all liabilities of whatsoever nature and kind relating to [Ms Haddad's] Real Properties.
Clause 16 provides that:
Within 90 days of the date of this Agreement, [Mr Assaf] to pay, or cause to pay, [Ms Haddad] the sum of $241,940 (“the Investment Properties Payment”).
Clause 17 provides that:
Contemporaneously with receipt of the Investment Properties Payment and at [Mr Assaf’s] expense the parties shall do all such acts and things and sign all such documents as are required to:
(a)Transfer [Ms Haddad’s] interest in the following real properties to [Mr Assaf]:
(i)[1 HH Street], [Suburb JJ] in the State of Queensland, more particularly described in Certificate of Title Lot […], Plan RP […];
(ii)[2 HH Street], [Suburb JJ], in the State of Queensland, more particularly described in Certificate of Title Lot […], Plan RP […];
(iii)[LL Street], [Suburb MM], in the State of Victoria, more particularly described in Certificate of Title Volume […] Folio […];
(iv)[NN Street], [Suburb OO] in the State of Queensland, more particularly described in Certificate of Title Lot […], Plan SP […]; and
(v)[QQ Street], [Suburb RR] in the State of Queensland, more particularly described in Certificate of Title Lot […], Plan GTP […].
Collectively known as “[Mr Assaf's] Real Properties”
Clause 19 provides that:
From the date of this Agreement, for a period of twelve months, [Mr Assaf] will pay or cause to be paid to [Ms Haddad] the sum of $2,000 per week (on Monday of each week) into a bank account nominated by [Ms Haddad].
Clause 20 provides that:
Until such time as [Mr Assaf] has paid each of the [Business] Payment, the Investment Properties Payment and the [Country F] Payment in full, to [Ms Haddad], [Mr Assaf] shall pay or cause to be paid:
(a)to [Ms Haddad] the sum of $15,000 per month by way of profit distribution into [Ms Haddad’s] bank account and [Ms Haddad] shall pay any tax liability incurred in her name as a result therefrom; and
(b)all expenses of and relating to [Motor Vehicle 1] (registration […]), including repayments of finance, registration and maintenance, as and when they fall due.
Clause 21 provides that:
The parties agree that [Mr Assaf] shall be at liberty to continue to draw $15,000 per month by way of profit distribution and [Mr Assaf] shall meet any taxation liability incurred in his name as a result therefrom.
Clause 24 provides that:
[Mr Assaf] shall pay and indemnify [Ms Haddad] and keep her effectively indemnified against any and all liability of and in relation to:
(c)[AB Pty Ltd];
(d)       [Mr Assaf's] Companies;
(e)       [Mr Assaf's] Family Trusts; and
(f)       the [Business] Trusts
(“the [Assaf] Group”)
INCLUDING but not limited to:
(i)any debt of the [Assaf] Group
(ii)all unpaid income taxation assessed or hereinafter assessed against [Ms Haddad] of and in relation to any income and/or payment derived or deemed to have been derived by her from any entity and/or trust in the [Assaf] Group; and/or
(iii)any other liability of whatsoever nature arising in relation to the [Assaf] Group together with all proceedings, costs, claims, demands, interest, penalties and fines in respect thereof.
Clause 26 provides:
That on or before [late] 2017 the parties will do all such acts and things and sign all such documents as are required to cause the following bank accounts to be closed and/or transferred to [Mr Assaf’s] sole name and the balance of funds be divided equally between the parties:
(a)BSB […] Account number: […25];
(b)BSB […] Account number […99]; and
(c)BSB […] Account number […13].
Clause 44 provides that:
Each party acknowledges and warrants to the other that as is recorded in Clause U of the Recitals and confirmed in the Statements annexed hereto that they have had individual advice from their respective legal advisors in relation to:
(a)The effect of the Agreement on the rights of that party; and
(b)The advantages and disadvantages, at the time the advice was provided, to that party of making the Agreement.
MATERIAL FACTS
On 13 March 2015, the parties appointed Mr AD of AE Partners as the Assaf Group tax and accounting advisor. Mr AD subsequently joined the partnership of AF Limited which entity then became the Assaf Group accountants. The parties continued to engage Mr AD throughout 2015 and until 2017, and thereafter and continuing, other accountants at AF Limited.
In or around March 2015, the parties met with Mr AD who raised his concerns with them about the possibility of payroll tax applying to service providers’ payments as made by the Assaf Group. Subsequently, Mr AD prepared a flowchart for the parties setting out the then legal arrangement of the Assaf Group and a proposed legal arrangement in substitution, which provided for payments to service providers by the client, and service payments from service providers to the three businesses.[9]
[9] Annexure 3 to the Wife’s Tender Bundle.
On 20 March 2015, Mr AD emailed the parties and referred them to AG Lawyers. AG Lawyers was copied into the email. The sole purpose of that referral was for Mr AH to restructure the contracts between the Assaf Group and the service providers engaged in the businesses owned by the parties through their entities, in order to alleviate or avoid the risk of attracting payroll tax as payable by the Assaf Group.
On 24 March 2015, Mr AH emailed the parties enclosing a cost agreement requesting that the husband sign it in his capacity as then sole director of H Pty Ltd. Thereafter, the wife attended upon Mr AH in furtherance of the advice received by the parties from Mr AD.
On 25 September 2015, and contrary to the husband’s affidavit evidence that the wife sent such email, which he conceded at trial was not truthful evidence, the husband emailed Mr AD, copying in the wife, and asking four questions about minimising any potential payroll tax liability in relation to the service providers’ payments as made by the parties various entities.[10] That email stated:
[10] Annexure 4 to the Wife’s Tender Bundle.
Dear [Mr AD],
Hi how are you hope you are well .
In regards to the payroll tax for the [service providers] I got 4 questions:
1)if they work part time does that solve the problem?
2)And what is the max hours to be considered part time.
3)if we let them work in 2 different [businesses] that we own, part time in each, is that safe to claim it’s part time ? And we don’t have to face a payroll tax ?
4)if the [service providers] insisted not to sign is that our problem still ? Can we get a stat Dec that we tried but they refused and this may save us?
Thanks for your help.
Regards
[Mr Assaf]
Sent from my iPhone
On 27 September 2015, Mr AD replied to the husband’s email, copying in the wife and advising the husband:
The issue is that under the current arrangement, the [service provider] is essentially your employee – this makes the payment to the subject to payroll tax [sic]. The revised contracts try to change the structure of the arrangements, such that the [service providers] are running their own business and you provide them with management services, for which they pay you.
…
It will be up to you then to decide whether or not to remit payroll tax on those payments. If you don’t remit payroll tax and the SRO discover, there is likely to be penalties – possibly 10% but more likely 20-25% plus interest.
On 29 September 2015, the parties had a telephone conference with Mr AD to discuss the possibility of payroll tax arising from payments made by their entities to service providers working in their businesses and the legal arrangements of the service providers so working.
On 23 December 2016, the parties separated.
On 6 March 2017, the husband’s solicitor Mr Ragab, of VicLaw Lawyers, whom the husband had engaged to assist him in his family law dispute with the wife, received a letter advising that AL Lawyers (the wife’s former solicitors) acted for the wife. The parties around this time commenced negotiations in respect of an alteration of their property interests which they hoped to incorporate in a Binding Financial Agreement.
On 28 July 2017, the wife met with Ms AM and Ms AN (both also at AF Limited), in relation to matters of 2016 compliance queries and payroll tax. By this time, Mr AD was no longer providing advice to the parties and the parties were being advised by other accountants at AF Limited.
On 2 August 2017, the State Revenue Office (“SRO”) issued a letter addressed to the husband notifying him of an investigation under the Taxation Administration Act 1997 (Cth) in relation to “a known or suspected tax default of [H Pty Ltd] and any associated businesses…The aim of the investigation is to assess compliance with the Act for the period 1 July 2013 to the current financial year” (“the SRO letter”). The letter provided notice that an investigation into payroll tax on payments to service providers, as distinct from administration staff, had commenced. The SRO alleged that the service providers were employees subject to payroll tax.
The SRO letter was sent to a Suburb O address at which the parties no longer resided. It was the wife’s evidence that mail going to that address was redirected to the husband’s residential address. The husband denied receipt of this letter.
On 14 August 2017, Ms AN emailed the wife confirming AF Limited were looking into the parties entities voluntary disclosure for payroll tax for the businesses, and requested a generic copy of the agreement then in place with the service providers.
On 15 August 2017, the wife responded to Ms AN, and copied Ms AM and Ms AO, also at AF Limited, into the email, with the subject line “Re Agreement with [Service Providers]”. That email stated, relevantly:[11]
[11] Exhibit AS-1.
Hello All
[Ms AM]. we will not do this at this stage
[Mr Assaf] is in the process of buying me out snd [sic] [Mr X] is assisting with that.
It’s the best way moving forward
I will then be hired at a high salary to run the group
Can we finalise 16 asap, pls
[Mr X] is doing the [business] loan.
We then suggested having a financial controller to set all these things in place and have a structured accounts system. We will have bank accounts th [sic] cover tax and other liabilities
We will call you to discuss today.
On 17 August 2017, Ms AM, Ms AN and Mr AP (also at AF Limited) met with the husband solely. Discussed were matters of 2016 compliance, and “various tax advice as required”.[12]
[12] Exhibit DA-1.
On 28 August 2017, the wife received an email copy of the SRO letter at the J Business email address in her capacity as office manager, and forwarded the SRO letter to AF Limited.
On 4 September 2017, Mr AQ, the internal bookkeeper for the Assaf Group, forwarded the SRO letter to the wife who forwarded Mr AQ’s email and SRO letter attachment to Ms AM at AF Limited. On the same day, the wife sent Ms AM a copy of a payroll tax registration summary prepared by Mr AQ in late 2017 under the wife’s direction.
On 5 September 2017, the parties attended a meeting at AF Limited with Ms AM, Mr AP, and Ms AO. That meeting was noted by AF Limited, in the tax invoice rendered by AF Limited to the Assaf Family Trust of 3 October 2017, as being in relation to “2016 compliance and advice as required for payroll tax and family law income tax impacts”.[13] The husband, in his evidence, agreed those topics as referred to by AF Limited in the tax invoice, were discussed on 5 September 2017.[14] It was, however, disputed between the parties whether the question of payroll tax on service providers’ payments, and the SRO letter, was discussed at this meeting. The wife’s evidence was that the SRO letter and its contents, namely payroll tax on service providers’ payments as made by the Assaf Group, was discussed specifically. The husband asserted only the question of administrative staff payroll tax was discussed on that occasion, and not payroll tax as applicable to service providers. He conceded that the SRO letter notified the parties of a pending investigation into payroll tax for service providers’ payments, but otherwise denied that this was a topic of conversation during the 5 September2017 meeting. When put by King’s Counsel for the wife that the SRO letter was forwarded to AF Limited by the wife the evening prior, being 4 September 2017, and whether, in those circumstances, the husband was seriously contending that the contents of that letter were not discussed at the meeting on 5 September 2017, in circumstances also where there was a discussion about payroll tax on administrative staff, the husband responded, “I don’t really remember at all. I don’t remember that there was any discussion about this letter.”[15] Further, when asked by King’s Counsel for the wife whether the wife was telling the truth (that payroll tax on service providers’ payments was discussed) the husband responded “I don’t know. Do you have a proof?”.[16] When considering the evidence of the husband and wife, I prefer the evidence of the wife over that of the husband as to this matter, and find the SRO letter and the issue of payroll tax on service providers as payable by the Assaf Group, in the context of the totality of the material facts, was discussed by the parties at the 5 September 2017 meeting held between the parties and their advisers at AF Limited. Further, I find the parties had both been aware of the possibility of payroll tax applying to service providers’ payments, as made by the Assaf Group, since 2015.
[13] Exhibit DA-1.
[14] Transcript 2 September 2022, p.118 lines 21-41.
[15] Transcript 2 September 2022, p.114 lines 42-43.
[16] Transcript 2 September 2022, p.115 line 42.

On 6 September 2017, the wife met with the parties advisers at AF Limited whom I accept the husband and wife had agreed would, on behalf of the Assaf Group, correspond with the SRO about payroll tax matters as applicable or not to service providers’ payments made by the Assaf Group.
On 26 September 2017, Mr AP sent to the parties for their consideration, a proposed submission on behalf of the Assaf Group to the SRO, which canvassed why payroll tax on service providers ought not be levied against the Assaf Group, for their consideration. The parties were content for the submission to be forwarded to the SRO.
On 26 September 2017, AF Limited replied by correspondence to the SRO on behalf of the Assaf Group, asserting that the contractual arrangement between the service providers and the Assaf Group were not employment contracts, and therefore not subject to payroll tax.
On 8 November 2017, the sale of the former matrimonial home (as referred to in [27] above), which acted as security for the Commonwealth Bank loan for the N Town Land, settled. The parties did not pay out that loan. Rather, the Commonwealth Bank required the parties to hold $600,000 in a joint Commonwealth Bank account as security for the outstanding loan for the N Town Land. Those monies remain in the joint account of the parties (account number …13) and the Commonwealth Bank loan, at trial, had been reduced to approximately $238,000 (from $250,000).
In the course of the parties negotiations as to a financial agreement, an agreement was reached between the parties solicitors as early as March 2017, that the wife’s former solicitors would prepare a draft financial agreement for the husband’s consideration and approval. Further, that there would be some liaison between the wife’s former solicitors and Mr AD at AF Limited to better understand the corporate structure and the businesses.
Ultimately, a number of drafts of the FA were exchanged between the parties so that by September 2017, a final draft of the FA was in place, and the parties met with their then accountant, Ms AM, to discuss the draft.
On 17 November 2017, the wife’s former solicitors sent a ‘working draft’ of the proposed FA to the husband’s solicitors, and advised that Ms Hargreaves had spoken with Ms AM. Ms AM was copied into that correspondence. Ms Hargreaves advised the husband’s solicitors that “[Ms AM] intends to peruse the document and advise whether there are any accounting issues involved in the proposed settlement, from her perspective”.[17]
[17] Husband’s affidavit filed 22 August 2022, Annexure AS-1.
Both parties had received advice from their respective lawyers as to the contents of the draft FA and the positives and negatives within the FA in respect of each of them. In particular, within the draft FA was an indemnity given by the husband to the wife. In cross-examination by King’s Counsel for the wife, the husband and Mr Puckey had the following exchange as to that indemnity:[18]
[18] Transcript 2 September 2022, p.120 lines 22-45; Transcript 2 September 2022, p.121 lines 1-10.
Mr Puckey: was not altered in the period – in the different drafts. It was the same -- -?
Husband: Yes.
Mr Puckey: - - - all the way through?
Husband: Yes, yes.
Mr Puckey: And you read it, didn’t you?
Husband: Yes.
Mr Puckey: Yes. And your understanding was that you were taking responsibility for all the liabilities related to [the Business Trusts], didn’t you?
Husband: Yes.
Mr Puckey: Yes?
Husband: Yes.
Mr Puckey: And in particular, you knew that you were taking on responsibility for tax?
Husband: Yes.
Mr Puckey: And in particular, you knew you were taking on responsibility for payroll tax?
Husband: Be specific, please.
Mr Puckey: We will get there?
Husband: Yes. Yes.
Mr Puckey: Do you agree?
Husband: Yes, yes, yes.
Mr Puckey: Yes. Because you knew – you’ve said you knew there was payroll tax on the staff payments, right?
Husband: I – I knew, yes, exactly.
Mr Puckey: Right. And your solicitors completed a certificate that is attached to the affidavit – I beg your pardon. Attached to the binding financial agreement?
Husband: Yes.
Mr Puckey: It’s a certificate of independent legal advice. Do you remember that document?
Husband: Yes.
Mr Puckey: And what it says is that your solicitor sat down with you before you signed the agreement and advised you about the effect of the agreement?
Husband: Yes.
Mr Puckey: And you understood that advice, didn’t you?
Husband: Yes.
Mr Puckey: Right. And there was a meeting between you and your wife and both sets of solicitors on 24 November to sign the agreement?
Husband: Yes.
On 24 November 2017, the parties by agreement, attended at the offices of the wife’s former solicitors, with their respective lawyers. The unchallenged evidence of the wife’s solicitor, Ms Hargreaves, as to the discussions had between the parties’ respective solicitors that day, is that Ms Hargreaves told Mr Ragab, relevantly, that:
(a)Ms AM had advised the parties to enter into an ‘in principle’ settlement and wait to formalise it;
(b)Ms AM had provided an estimate of her fees of between $10,000 to $20,000 to confirm her advice and further advised that she would need her outstanding fees paid;
(c)Ms AM had a concern about the drafting of some of the clauses and that as it was it may trigger some kind of tax event…;[19] and
(d)It was a matter for the husband as to whether he proceeded with obtaining AF Limited’s advice “as [the wife] was basically indemnified against any liabilities that would occur”.
[19] Affidavit of Georgia Hargreaves filed 24 August 2022, paragraph 9.
Mr Ragab then sought instructions from his client and advised Ms Hargreaves that notwithstanding the advice of AF Limited, the husband proposed to sign the FA. The husband conceded in his evidence that he was aware at the time that AF Limited sought to charge an additional $10,000 to $20,000 for further advice on the FA.
On 24 November 2017, before the parties executed the FA, Ms Hargreaves and Mr Ragab jointly spoke with Ms AM as to any comments she may have had on the draft FA. Both solicitors agreed that in those discussions, there was no discussion between Ms AM, Ms Hargreaves and Mr Ragab on the subject of payroll tax.
The parties executed the s 90C of the Act FA. Contained in that FA were broad indemnities given by the husband to the wife pursuant to Clauses 8(d), 24(i), and 24(iii) of the FA as set out above. At that time, there was no payroll tax liability. There was a possibility that payroll tax would be assessed for payments made to doctors. There was an expectation by the husband of an amount of between $47,000 and $250,000 of payroll tax for administrative staff.
On 12 December 2017, Ms AO of AF Limited emailed both parties, via their separate email address, stating:
Hi [Mr Assaf] and [Ms Haddad]
Please see below email correspondence from the State Revenue Office (SRO) with regards to Payroll Tax review.
Given the 2017 compliance has not yet been started, we’re going to send through some management accounts.
….
Could you kindly review and provide your approval to provide the information to the SRO along with the Financial Information for FY15 and FY16
…
On 12 December 2017, the husband authorised AF Limited to give information to the SRO.
In March 2018, the wife changed her legal representation from AL Lawyers to Hargreaves Family Lawyers. Ms Hargreaves continued to be the solicitor with the care and conduct of the matter.
Husband’s default under the FA
On 29 March 2018, a letter was sent from the wife’s solicitors to the husband’s solicitors noting the husband had not complied with the FA by making a payment of $2 million to the wife. Accordingly, the wife had not transferred her interest in the three businesses to the husband. Nor had the wife resigned from her office holdings and transferred her shareholdings in the companies and trusts operating the businesses. The wife sought payment.
On 27 April 2018, the husband’s solicitors responded stating:[20]
…our client is actively considering his options to finalise this matter sooner. We therefore confirm that if our client’s attempts to secure a mortgage to pay your client out does not come to fruition, he may consider selling one of the [businesses] to settle this matter sooner.
…you and your client will appreciate, any rush decision to dispose of an asset, a property or a [business], will, most likely, reduce the overall expected proceed of the sale and this will, in turn, reduce the parties’ expected profit from selling the asset…
[20] Exhibit DA-4.
On 10 May 2018, the husband’s solicitors emailed the wife’s solicitors requesting, amongst other things that the wife, in accordance with the FA, discharge the mortgages over the Queensland properties she retained.
On 15 May 2018, the wife’s solicitors again wrote to the husband stating:[21]
This matter need not press on, but your client’s failure to comply does nothing to support the resolution. The parties could have elected to wage war in the Family Court before now. Our client considers she has done what she can to avoid that stoush. Unless your client begins to comply with his obligations, out client will have no choice.
[21] Transcript 2 September 2022, p.142 lines 16-20.
On 18 May 2018, the husband’s solicitors wrote to the wife’s solicitors requesting the wife sign documents for the transfer of assets to the husband pursuant to the terms of the agreement. This request related to the various entities and investment property interests that were to be transferred from the wife to the husband in accordance with the FA.
On 21 May 2018, the husband’s solicitors wrote to the wife’s solicitors indicating that the $600,000 withheld by the Commonwealth Bank was the collective money of the parties and requesting that the wife not remove money nor access the parties joint accounts. That correspondence also contained a discharge of mortgage in compliance with the FA and indicated that the husband was still endeavouring to complete documents to transfer the Country F property in accordance with the FA.
On 4 June 2018, the wife’s solicitors again email the husband’s solicitors seeking confirmation of when the husband would comply with the FA noting that pursuant to the agreement the husband was to have refinanced his affairs by early 2018. That correspondence again put the husband on notice of the wife’s intention to institute proceedings seeking enforcement of the FA.
On 19 June 2018, the husband’s solicitors wrote to the wife’s solicitors advising that the husband was “in an advanced negotiation with a prospective buyer to sell one of his [businesses]” and that his broker was “negotiating a mortgage for [Mr Assaf] and we expect some feedback from the broker shortly.”[22] The same letter stated, “Please be advised that [Mr Assaf] is currently under financial strain and his options to make a large lump sum payment to your client is not viable”. The letter went on to say “Please be advised that should [Mr Assaf’s] application for a mortgage be granted and/or he successfully sells one of his [businesses], [Mr Assaf] will use most, if not all, of the funds he may attain from such mortgage or sale to pay for your client’s share.”[23]
[22] Wife’s affidavit filed 3 August 2022, paragraph 23.
[23] Wife’s affidavit filed 3 August 2022, paragraph 24.
On 2 July 2018, the husband’s solicitors wrote further to the wife’s solicitors. In relation to the proposed sale of one of the husband’s businesses, the letter stated, “should this contemplated sale go ahead, we confirm our client’s instructions that he will transfer most, if not all, of the proceeds of sale to your client.” The letter also advised that the husband was “currently using more than one broker to negotiate a mortgage with various banks”.[24]
[24] Wife’s affidavit filed 3 August 2022, paragraph 25.
On 20 July 2018, the husband paid the wife $45,000 in reduction of his obligation under the FA. He had proposed that he would make such payments monthly. On that day, his solicitors wrote to the wife’s solicitors indicating that the husband was under financial strain and requesting the wife’s ‘indulgence’ setting out the following offer:[25]
Given your client’s intention to purchase a new [business], our client is offering, subject to further terms and conditions to be settled between the parties and their respective legal representative, [M Pty Ltd] to be transferred to your client in full satisfaction of your client’s share of the settlement.
Alternatively, if your client’s [sic] rejects our client’s offer and she proceeds with purchasing another [business], as previously requested in our letter to you dated 19 June 2018, we request your client’s undertaking that she doesn’t hire any of [Mr Assaf’s] current staff, whether in managerial positon, Administrative staff or [service providers] for at least 24 months after the date each relevant staff resigns or leaves our client’s business.
[25] Exhibit DA-4.
On 27 July 2018, the solicitors for the wife sought the husband comply with his obligations under the FA noting “in the absence of a satisfactory arrangement that will provide our client with tax free interim instalments pending the sale and/or refinance of your client’s affairs to enable his compliance with the Binding Financial Agreement, we hold instructions to urgently issue an application to the Family Court of Australia”.[26]
[26] Wife’s written closing submissions filed 14 October 2022, paragraph 60.11.
On 10 October 2018, the solicitors for the wife again wrote to the solicitors for the husband seeking the husband’s compliance with the FA, including that periodic payments of $45,000 per month be paid to the wife.[27]
[27] Wife’s written closing submissions filed 14 October 2022, paragraph 60.12.
In late 2018, the husband sold the “P1 Business and P2 Business”, realising net proceeds of $1,254,773.46. In early 2019, settlement of the “P1 Business and P2 Business” sale occurred and the net proceeds were deposited into the husband’s solicitor’s trust account pending further implementation of the FA. The husband’s solicitors subsequently received $21,047.40 from the net proceeds to pay an invoice, as rendered by those solicitors to the husband, despite the parties agreement that all proceeds would remain held on trust for the parties and an acknowledgement by the husband’s solicitors that monies would remain in trust “subject to both parties reaching an agreement”. No agreement was reached for payment out to the husband’s solicitors at that time. The wife did not consent to this payment.
On 24 April 2019, the wife received a further part payment of the monies owed to her under the FA of $570,000 (by agreement between the parties) from the proceeds of sale held in the trust account of the husband’s solicitors. This left an amount owing to the wife pursuant to the FA of $1,385,000. The parties agreed to further distribute the proceeds of sale in trust and $100,000 was paid to the husband; $31,777 was paid towards an M Business server expense; and $23,295.82 was paid for a P Pty Ltd BAS liability.
It is not in dispute that in the period between when the husband was to make the $2 million payment to the wife pursuant to the FA, and 4 August 2020, being 8 days prior to the husband filing his Initiating Application, the wife constantly sought the husband’s compliance with the FA. Further, that the wife specifically put the husband on notice that she would issue an enforcement application unless the husband complied with his obligations “under the terms of the BFA” on the following dates: 21 December 2018; 13 February 2019; 4 April 2019; 7 April 2020; and 4 August 2020”.[28] In cross-examination the husband said as to this lack of compliance by him:[29]
Mr Puckey: So for those years of ’17, ’18, ’19, the [businesses] were operated by you, and both my client and you were – despite the agreement, continued to be co-owners because you hadn’t met your obligations, so therefore she hadn’t signed out of those entities. Right?
Husband: Yes, that’s true.
[28] Wife’s written closing submissions filed 14 October 2022, paragraph 61.
[29] Transcript 2 September 2022, p.130 lines 22-25.
And further:[30]
[30] Transcript 2 September 2022, p.138 lines 30-46 – p.139 lines 1-11.
Mr Puckey: Do you agree with me that whilst all of this was going on, she was waiting for her $2 million. She was waiting also for the $110,000 in respect of [Country F]?
Husband: Yes. That’s my […] apartment. Yes.
Mr Puckey: And she was waiting also for the $240,000-odd in respect of the investment payment – property payment?
Husband: Yes. Yes.
Mr Puckey: Yes?
Husband: I didn’t say I’m not going to pay.
Mr Puckey: Right. Now, just - - -?
Husband: We were engaged in agreements all the time.
Mr Puckey: [Mr Assaf], stop and listen to the questions?
Husband: Okay.
Mr Puckey: Of that sum of $2.35 million, you paid $45,000?
Husband: Yes. Yes.
Mr Puckey: And the only other payment you made was the $570,000 that came after the [P1 Business] was sold. Correct?
Husband: Yes.
Mr Puckey: All right. Do you agree with me that you were also refusing to implement the division of the Commonwealth Bank joint account with the $600,000 in it?
Husband: What do you mean refusing? I never refused anything.
Mr Puckey: Well, let’s do it this way. It’s still sitting there in the bank account, isn’t it? The 600?
Husband: Do you know why?
Mr Puckey: Do you agree with me it’s still sitting there?
Husband: Yes.
Mr Puckey: Okay. And do you agree with me that under the provisions of the binding financial agreement it was supposed to be divided in two?
Husband: Yes.
And further:[31]
[31] Transcript 2 September 2022, p.140 lines 44-46 – p.141 lines 1-8.
Mr Puckey: Do you agree that your wife was constantly writing through the solicitors demanding what she was owed under the agreement?
Husband: I don’t actually disagree on that.
Mr Puckey: You don’t disagree?
Husband: Yes.
Mr Puckey: So you agree?
Husband: Yes.
Mr Puckey: Okay. Thank you. And you were responding to those demands with two things. One, you said, “I’m having trouble raising the money”; right?
Husband: Yes.
Mr Puckey: Yes. And, two, you said, “Let’s see if we can do it another way”, didn’t you?
Husband: Not exactly, but it can buy time.
On 1 July 2019, by earlier agreement also of May 2019 between the parties, the wife assumed operational and management control of the M Business. In doing so, she paid all expenses, including income tax in respect of the business and retained all and any net profits of the business from that date and continuing as at the date of trial. She was in receipt of all income via a transfer from the L Trust to a Family Trust controlled by her. The husband otherwise remained a director of the M Business and an owner of the business, noting that it operates under the husband’s name. This agreement was entered into between the parties to ensure the wife would receive those periodic payments due to her under the terms of the FA as set out in Clauses 20-21. The husband had complied with Clause 19 of the FA in the 12 months of its operation post execution of the FA, and had likewise complied with Clauses 20 and 21. He was struggling, he claimed, to continue making the payments due under Clause 20 in particular, and accordingly, so that the wife would receive those periodic and other payments, he and the wife agreed to her operational and management control of the M Business and receipt of income and profits pending resolution of the default of the husband under the FA, such that the terms of the FA would be carried out. This agreement also required the wife to work in the business in order to receive the monies she received.
The husband claimed such operational and management control by the wife was also in full satisfaction of her entitlements under the FA. When cross-examined as to the wife’s operation of the M Business the husband’s evidence was as follows:[32]
[32] Transcript 2 September 2022, p.153 lines 1-41.
Mr Puckey: … So from July ’19, it was transferred to your wife in accordance with what you call the subsequent agreement, that is, in order to satisfy her capital obligations and – and entitlements under the agreement, she gets to take over the management of that [business], yes?
Husband: Yes.
Mr Puckey: Keep it in the family?
Husband: Yes.
Mr Puckey: All right. And part of the agreement that you allege is that that spelled the end of two of your obligations. One was the obligation to pay the periodic amount, the $15,000 a month. That came to an end because she now had the [business], right?
Husband: Yes.
Mr Puckey: And secondly, you were saying, “I then don’t have to pay you the value of the [business] that you have now got. That comes off the settlement that I owe you.” Correct?
Husband: Yes.
Mr Puckey: And there was – there were discussions or what have you between you and a figure of $1.5 million was agreed as the value that would come off her settlement, correct?
Husband: It was 1.8, but she insisted 1.5 and I agreed at the end.
Mr Puckey: Right. And that was the agreed figure that came – that was to come off?
Husband: Yes.
Mr Puckey: Okay. Now, do you agree that that arrangement was made via correspondence between the solicitors?
Husband: Yes, it – it - - -
Mr Puckey: Yes?
Husband: It started from – from home and then we have to go through – because I wasn’t really communicating, so it went through solicitors.
Mr Puckey: Do you agree with me that the annual accounting for that arrangement required resolutions to be passed to distribute the income of the [business] out of [L Trust] to a trust controlled by my client, as the [Haddad Trust]?
Husband: Yes, we sign on that recently.
Mr Puckey: Yes. What had to happen was that in the years – she takes over on 1 July ’19, and so when 2020 – 30 June 2020 came around, there had to be resolutions signed to transfer the income from the trust – from the [L Trust] - - -?
Husband: Yes.
Mr Puckey: - - - across to her trust, as the [Haddad Trust]?
Husband: Yes.
Mr Puckey: Yes. And those arrangements were made between her accountant and [AF Limited], weren’t they?
Husband: Yes.
Mr Puckey: And you signed off on those resolutions each year from 2020 and 2021?
Husband: I don’t remember which year I signed on, really. I don’t remember but I don’t deny it.

There remained no transfer of the asset to the wife.
On 4 March 2020, $90,000 was transferred by the husband’s solicitors from the funds held in trust on behalf of the parties, without the wife’s consent, to meet payment of outstanding invoices rendered to the husband solely by AF Limited.
It is otherwise common ground that between 2017 and 2020, the husband sold off assets that he was to retain under the FA to retire debt. He also sold properties, acquired by him solely, (following the entering into by the parties of the FA) using his entitlements to the net proceeds of sale of the FMH and/or his income and profit distributions from the operation of the three businesses initially, then the remaining (at that time) two businesses. The parties also engaged in negotiations as to other ways of the husband meeting his obligations under the FA. The wife, who did not have the money she was entitled to under the FA, was unable to refinance, and so also sold two of the three properties she was to retain under the FA.
In March 2020, the Court of Appeal in Victoria determined Commissioner of State Revenue v Optical Superstore Pty Ltd [2019] VSCA 197 which determined that funds from a taxpayer/trustee to employees or beneficiaries through a trust does not deprive those funds of meeting the criteria of ‘paid or payable’ under the Payroll Tax Act 2007 (Cth) – thus they are subject to payroll tax. This decision impacted the Assaf Group, in regards to the ongoing investigation by the SRO into payroll tax owed.
On 26 March 2020, some three years after the execution of the FA and its partial and progressive implementation, in correspondence to the wife, the husband raised payroll tax as an issue saying, relevantly, “that there has been a ‘depreciation in the value of the parties’ asset pool’ and inviting the wife to ‘reconsider her position in accepting her share in the Payroll tax debt to avoid a very real prospect of the matter being in a stalemate’”.[33]
[33] Wife’s written closing submissions filed 14 October 2022, paragraph 36.
On 2 April 2020, AF Limited sent a letter to the husband setting out the payroll tax for each business between 2014 and 2019. In that letter the tax liability of each business was set out as follows:
(1)J Business $1.5 million
(2)P1 Business $400,000; and
(3)M Business $573,000.
On 10 June 2020, the husband’s solicitors wrote to the wife’s solicitors forwarding the AF Limited letter from 2 April 2020 and indicating that AF Limited had recently estimated the total payroll tax debt to be $2.466 million.
On 12 August 2020, the husband commenced proceedings by the filing of his Initiating Application.
On 7 December 2021, by agreement of the parties, a further sum of $149,786.83 was withdrawn from the jointly held funds in the husband’s solicitors trust account, to discharge the husband’s 25 per cent share of the parties 50 per cent share of the balance then owing on the matured NAB mortgage encumbering the vacant block of land at N Town. The wife had previously met her 25 per cent share out of her own personal funds. At trial, approximately $290,000 remained in the husband’s solicitors trust account as held on behalf of the parties.
On 28 June 2022, the SRO issued a Notices of Assessment with respect to payroll tax which asserted that H Pty Ltd and associated businesses, being the entities operating the businesses, owed a total of $3,932,465.57 in payroll tax. This included a 25 per cent penalty component.
On 20 July 2022, the wife was substituted as the applicant in the proceeding.
On 26 August 2022, the wife’s solicitors, Y Lawyers, sent with the approval of the husband’s solicitors, a submission to the SRO objecting to the payroll tax assessment for the financial years 2014 to 2021. The purpose of the submission was to avoid or minimise the amount of payroll tax and any penalties required to be paid by the husband. The wife so acted to support the husband, but not to assume any liability which is his pursuant to the FA
CONSIDERATION
What is contended by the husband is that the FA is affected by a common mistake of the parties such that it is voidable and/or unenforceable. Further, that a new agreement has been entered into between the parties, such that the parties have abandoned the FA and on this ground, it is also voidable.
To the extent or if at all the husband asserted that the FA ought be set aside because it did not achieve a just and/or equitable distribution of the property of the parties, that submission cannot succeed. Both parties choose to enter into the FA to intentionally oust the operation of Part VIII of the Act. They made a commercial decision, as they were entitled to do. In some circumstances, parties choose to do so at their peril. They, or one of them, make a poor decision.
If the Court is to uphold the FA, there is no dispute between the parties that a sum of approximately $1.737 million will be required to be paid by the husband to the wife (consisting of the remaining business payment, Country F payment and investment properties payment) as set out in the terms of the FA, plus interest since the date such payments were payable.
Common Mistake
Both parties at the time of entering the FA, recorded their agreement to be fair, just, reasonable and conscionable, and drafted so as to produce an approximately equal division of the parties’ assets. It is in that context, that the husband argues it would now be unjust and unconscionable for the wife to assert that she is entitled to be indemnified for the whole of the payroll tax liability as assessed against the Assaf Group. The husband argues that the parties acted under a common mistake in relation to the quantum of the payroll tax liability of the three businesses. Additionally, the husband argues that “the FA was conditioned upon the underlying assumption that it provided for an approximately equal division of the total value of the parties’ property.”[34] He submits that “by pressing for the indemnity, the wife is acting unconscionably.”[35]
[34] Husband’s written closing submissions filed 23 September 2022, paragraph 33.
[35] Husband’s written closing submissions filed 23 September 2022, paragraph 43.
At the time of entering into the FA, I find both parties were clearly aware of the Assaf Group’s potential exposure to liability for payroll tax in respect of service providers’ payments as made by the Assaf Group. From 2015, this potential liability was a matter of discussion between them and their accountants.
In November 2017, the husband and wife wished to enter into a FA. The husband wanted to retain the businesses. The wife agreed to that course but required the husband to provide her with a complete – being an unlimited, unrestricted – indemnity with respect to any and all liabilities of the businesses of the Assaf Group. That included the possibility of a future liability, unquantified, for payroll tax on the payments made to service providers engaged in the businesses. As the factual history described above indicates, events occurred thereafter, namely the risk became a reality, which lead the husband, some years after the execution of the FA, and after significant partial compliance with it by the parties, to consider the FA as unjust and unfair. Whatever the husband may now think, or however he came to view the FA, the husband is bound by what it is the parties agreed upon in the FA, subject to their being any satisfaction by the Court that the parties have set aside and/or terminated the FA in accordance with the governing legislation.
The husband’s evidence was that at the time of the execution of the FA, he anticipated there to be a payroll tax liability in relation to the administrative staff of the businesses of between approximately $47,000 and $250,000. His evidence was further that he was not aware of a payroll tax issue in relation to the Assaf Group’s engagement of the service providers. In cross-examination, he denied knowing that at the time he executed the FA, there was an investigation in relation to payroll tax on service providers’ payments as made by the Assaf Group. Further, in response to a question asked of him by King’s Counsel for the wife, “You were well aware of the risk that the SRO would assess the businesses for payroll tax on the service providers’ payments?” the husband replied “No”.[36]
[36] Transcript 2 September 2022, p.99 lines 14-15.
Thereafter, the husband again denied knowledge of the payroll tax investigation into the Assaf Group in the following exchange:[37]
Mr Puckey: Well, don’t duck out of the question. When you signed the binding financial agreement in 2017, I want to suggest that between September and December at all times, you were fully aware of the investigation by the SRO into payroll tax on [service providers’] payments with your [businesses]?
Husband: No.
[37] Transcript 2 September 2022, p.107 lines 30-34.
The husband’s evidence was also, however, that there were investigations occurring, about which he knew, with respect to payroll tax on service providers’ payments by the Assaf Group but he did not, in his evidence, categorise them as requiring any admissions as to his knowledge of the SRO investigation, stating “it wasn’t, like, brought to me, like, as if that serious investigation was said, ‘Don’t worry about it. The contracts are right and the structures are right’”[38] Further, he conceded that he was aware, by at least 2015, that he would have to pay tax on payments to service providers if they were deemed employees.
[38] Transcript 2 September 2022, p.96 lines 1-3.
I find that the husband was not truthful as to the evidence given by him under cross-examination as set out in [119] and [120] above. Likewise I find the husband was not truthful in his affidavit evidence where he deposed “[Service providers’] payments being subject to payroll tax was not envisaged by me, and unknown to me at the time of executing the Financial Agreement”.[39]
[39] Husband’s affidavit filed 22 August 2022, paragraph 95.
The evidence supports the wife’s claim that both parties were aware of the investigation underway into the Assaf Group’s potential liability for payroll tax for service providers from at least 5 September 2017. The husband’s evidence is wholly inconsistent with the advice he received in 2015 and onward from Mr AD, and the discussions had by the parties with AF Limited on 5 September 2017. I find that each of the husband and wife knew the risk of their liability for payroll tax on service provider payments. I find the parties knew the risk of the imposition of significant penalties. Indeed a penalty of up to 25 per cent which has since been imposed by the SRO. What the parties did not know, a fact agreed by them, was the dollar value of that potential liability and penalty. This was not a common mistake made by them. It was an agreed, uncertain and unquantified liability, that was not, at the time of the execution of the FA by the parties, an actual liability. Regardless, at the time of execution of the FA, the husband offered an indemnity to the wife to secure that which he wanted – the businesses, and the income and capital derived from that retention. He assumed the risk of a potential liability, not quantified, and not then existing. The liability was perhaps first said to exist and be quantified in early 2020, and was crystallised when the notice of assessment of liability was issued by the SRO on 28 June 2022.
The wife does not cavil with the fact that the agreement reflected in the FA was for the parties to divide their assets approximately equally. It is not in dispute that at the time the parties executed the FA the parties each had 50 per cent of the net assets as valued at the relevant time. In addition, the husband gave an indemnity to the wife (contained in Clause 8), which some five years after the execution of the FA, has resulted in the husband becoming liable for payroll tax to the SRO. In the period post the execution of the FA, the parties negotiated with each other in the process of the wife seeking the husband’s compliance with the FA. Whilst they contemplated a new agreement that did not satisfy the legislative requirements for a financial agreement, that agreement was directed to the performance of the terms of the FA by both parties in the context of the husband’s default. The wife remained ready, willing and able at all times to perform the contractual terms of the FA executed by the parties.
I am satisfied that the husband was aware of the legal structures of the businesses and of the payroll tax issue on service provider payments, in circumstances where the businesses were run under his professional status and the parties were both aware of the possibility, and subsequent investigation, of payroll tax liability and possible penalties prior to signing the FA. Whilst the crux of the husband’s case really became that both parties did not know the quantum of the tax liability, and that was the common mistake, I reject that argument. I find that the husband obtained those assets he desired and in doing so, accepted a risk of future potential liability in respect of them. He gave the indemnity he did knowing there was a risk of not only payroll tax but also, as raised by Mr AD back in 2015, of significant penalties. Throughout this period I am mindful that the husband always had accounting advice, and legal representation, and at the time of signing the FA had solicitors who advised him on the draft FA and the final FA that was ultimately signed by both parties.
I find the wife, in the circumstances which preceded and followed the execution of the FA by the parties did not act unconscionably and in particular does not do so by seeking the husband’s compliance with Clauses in the FA wherein he provided her with indemnities.
Has the agreement been abandoned?
The further argument advanced by the husband was that the FA had been abandoned by the parties.
I do not find that the wife abandoned her rights and/or entitlements pursuant to the FA or at all, and nor do I find or infer an objective intention of the parties to abandon the FA. The wife, by her conduct, repeatedly sought the husband’s performance of the terms of the contract. The husband, by his conduct, up until 2020, did in fact partially perform the FA, and also sought the wife’s compliance with various terms. Furthermore, I accept the submissions of King’s Counsel for the wife that until early 2020, the husband did not identify any reason or cause to set aside the FA. Indeed, the husband deposed that the implementation of the ‘Subsequent Agreement’ was a result of awaiting tax advice in the husband transferring his interest in M Business to the wife, awaiting the financial year 2018/2019 financial documents, the removal of the husband as guarantor from the wife’s properties and the wife transferring her interest in the Country F property to the husband contemporaneously with the corresponding payment.[40] The husband remains in default of Clause 7 of the FA. He has, I accept, “sought to ameliorate his breach by transferring his interest in the [M Business] to the wife at an agreed value of $1,5000,000.”[41]
[40] Wife’s written closing submissions filed 14 October 2022, paragraph 14.
[41] Wife’s written closing submissions filed 14 October 2022, paragraph 11.
Further, I find the parties have not “either agreed or sought to agree on an entirely new bargain which constitutes a fundamental departure from their original bargain”[42]. There is no evidence that supports that position. I also reject the husband’s laches argument given the material facts and circumstances of this case so obviously do not support such an argument.
[42] Jafari v 23 Developments Pty Ltd [2019] VSCA 201 at [192].
My reasons for these findings are below.
The husband’s evidence was that the parties enacted a subsequent agreement whereby the wife took over the M Business on 1 July 2019 and retained all income and profit generated by the business; the P1 Business was sold (which I note was provided for in the FA); and the P1 Business net proceeds were divided between the parties so that instead of receiving one half each, the wife received $570,000 and the husband $100,000, with other payments out, also being made by agreement of the parties. King’s Counsel for the husband submitted that whether intended or not, the husband and wife made a subsequent agreement and abandoned the FA.
In the alternative, King’s Counsel for the husband submitted that by the wife’s Amended Initiating Application filed on 3 August 2022, the wife must be aware that if the FA is upheld, that the orders she seeks, cannot be made pursuant to s 71A of the Act. Thus, by at least 3 August 2022, the wife had abandoned the FA by way of the relief she sought in these proceedings. I do not accept this submission. The wife makes such application in the alternative and making such application, whether capable of success or not, did not result in an abandonment of the FA or in the substitution of a new agreement between the parties which impugned the FA.
In my view, the evidence discloses that the objective intentions of the parties were not to enter into an entirely new agreement. Nor to abandon the FA. An examination of the correspondence between the parties respective solicitors, its ongoing nature, and the fact of the parties compliance with the majority of the terms of the FA (under the agreement, the following Clauses have been complied with in full: 6, 14(a), 14(b)-(d) in relation to the Suburb V and Suburb Z Properties), 15, 17(a)-(c), (f), 18-23, 26 in relation to two accounts, 31, 34 and 35), together with the arrangements made co-operatively between the parties going, fundamentally, to the means by which the husband could meet his obligations pursuant to the FA, discloses an objective view of the parties intentions which militates against a finding that the parties had abandoned the FA by inferred agreement as asserted by the husband.
The evidence also demonstrates, particularly where some of the FA Clauses, such as Clauses 11-13, required the husband to take action prior to the wife completing her part, and where the wife had written to the husband via the parties’ respective solicitors on numerous occasions seeking compliance, that the wife has continued to intend that the FA between the parties be upheld.
Further, the husband’s evidence was that despite being in control of $2.951 million net profit in the 2018 and 2019 financial years, he could not pay the wife her payment due pursuant to Clause 7 of the FA, and nor could he (ongoing) meet her periodic payments and other expenses due (Clauses 20 and 21). He agreed however that the wife continued to seek such payments and he intended to make the payments, but not strictly in accordance with the FA but rather by attempts as proposed by him to compensate for his default.
By May 2019, the wife was still owed $1,735,000 in accordance with the FA. The husband at that point had the ability to sell another business (as provided for in Clause 9) in his control, to be able to pay the wife. Instead, on 1 May 2019, he allowed the wife to assume operational and management control of M Business. By agreeing to take over the M Business in July 2019, and to receive its business income, the wife gave up her entitlement to spousal maintenance ($15,000 a month); accepted partial satisfaction of the outstanding monies owed to her; and otherwise received an income for the work she was doing for the business. The evidence is that the parties tentatively agreed on a $1.5 million capital value of that asset pending a single expert valuation. No new financial agreement was entered into; no termination agreement was executed, or formed part of a new financial agreement as executed by the parties; and no concluded new agreement whether within the legislative framework of Part VIIIA of the Act, or outside it, was completed. Both parties remain the directors of the M Business as a result of the husband not having met his obligations under the FA. There has been no transfer of the ownership of the business. The husband has had access to all the M Business documents whilst the wife has had operation of the business, and full access to the NetBanking of the business.

The wife was, and remains, willing, to return the M Business management to the husband, and has persisted in seeking compliance by the husband with the FA.
King’s Counsel for the husband submitted that “the actual effect of the Subsequent Agreement is to impugn the Financial Agreement. That does not mean that the power of the Court is now excluded in relation to the Subsequent Agreement. It is submitted that the actual effect of the abandonment is that the FA should be found to be voidable and, as such, it should be set aside under s 90K(1)(b). It is only then that the Court’s power to make property orders is restored.”[43]
[43] Husband’s written closing submissions filed 31 October 2022, paragraph 19.
What that submission really seems to be suggesting, is that there has been a variation of the FA that has fundamentally altered the terms of the FA such that the parties no longer intend to act in accordance with it, and in essence have made the FA incapable of practical effect. Because, in my view it is abundantly clear that the evidence does not support any suggestion of abandonment of the FA by the wife. Nor in fact the husband, who cannot claim abandonment with respect to the completed parts of the FA, nor in respect of the agreed to arrangements made by the parties to ensure the wife receives her entitlements pursuant to the FA. The husband seeks simply to be relieved of an obligation contained within the FA, adverse to him. None of this supports an abandonment claim.
CONCLUSION
I am satisfied that the requirements of s 90G(1A) of the Act are met.
A financial agreement cannot be set aside simply because its terms are subsequently seen to be unfair to one of the parties,[44] or even because the terms of the agreement were unfair to one of the parties right from the start.[45] If they were. As the Full Court of the Family Court has said of parties agreeing to inequitable terms in a binding financial agreement, ‘Sometimes they choose to do so unwisely, as is their prerogative’.[46]
[44] Sanger v Sanger (2011) 46 Fam LR 275 at [86].
[45] Hoult v Hoult (2013) 50 Fam LR 260 at [200], [310]; Fewster v Drake (2016) 56 Fam LR 38 at [65].
[46] Graham v Squibb (2019) 59 Fam LR 299 at [70].
This proceeding arose from the husband’s desire to be released from his indemnity obligations as set out in the, as I find it, binding financial agreement. The wife should not suffer as a result of accommodations made by her to ensure the husband’s ultimate compliance with the FA as entered into between the parties. The husband should not benefit from his non-compliance.
I shall accede to the application of the wife.

I certify that the preceding one hundred and forty-four (144) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett.
Associate:
Dated: 31 March 2023
ANNEXURE A
1.That the Financial Agreement entered into between the Applicant Husband Wife and Respondent Wife Husband pursuant to Section 90C of the Family Law Act 1975 (Cth) (Act) on 24 November 2017 (Financial Agreement) be declared binding pursuant to Section 90G of the Act.
2.Pursuant to section 90KA(c) of the Act, the Financial Agreement executed by the parties be enforced as if it were an order of the Court.
3.That pursuant to section 90KA(b) of the Act the Husband pay the Wife the following amounts:
a.The sum of $1,385,000 pursuant to Clause 7 of the Financial Agreement plus interest pursuant to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) accruing from 22 February 2018;
b.The sum of $110,000 pursuant to Clause 11 of the Financial Agreement plus interest pursuant to the Rules accruing from 22 February 2018; and
c.The sum of $241,940 pursuant to Clause 16 of the Financial Agreement plus interest pursuant to the Rules accruing from 22 February 2018.

(the Payments).
4.That the parties forthwith, and within three (3) business days of the date of these Orders, do all such things and sign all documents to instruct Viclaw Lawyers to release the monies held in trust for the parties in the sum of approximately $493,700.64 $289,913.81 to the Wife in partial satisfaction of the Payments.
5.That the parties forthwith, and within three business dates of the date of these Orders, do all such things and sign all documents to instruct the Commonwealth Bank of Australia to discharge the loan secured by the funds held in the joint account number …13 and thereafter distribute the balance of funds (approximately $351 ,000) to the Wife.
6.The Husband shall pay or cause to be paid the Payments to the Wife, less any amount received pursuant to paragraphs 5 and 6 herein, within 60 days of the date of these orders (the Due Date).
7.Under the indemnities provided by the Husband in favour of the Wife pursuant to Clauses 8(d) and 24(i) and 24(iii) of the Financial Agreement, the Husband pay, or cause to be paid, all liabilities incurred by the Wife since 24 November 2017 in respect of:
a.M Pty Ltd as Trustee for the L Trust;
b.P1 Business as trustee for the P Trust; and
c.H Pty Ltd as trustee for the Assaf Family Trust.

8.Without admission as to the necessity of same, the Wife will do all acts and things, and sign all documents to reasonably co-operate with the Husband in relation to the State Revenue Office Payroll Tax Notices of Assessment through any objection process, VCAT proceeding, Supreme Court proceeding and/or Court of Appeal proceeding provided always the costs of and incidental to those proceedings (including those incurred in connection with the Wife's co-operation) are paid solely by the Husband.
9.The Husband and the Wife forthwith do all acts and things and sign all documents as are necessary to cause their 50% interest in the land at R Street, N Town, in the State of Victoria being the whole of the land more particularly described in Certificate of Title … Folio … (N Town Land) registered in the name of Q Pty Ltd (as trustee for the Q Family Trust) and for the purposes of the sale;
a.The parties shall offer AJ Pty Ltd and / or AK Pty Ltd the first option to purchase their 50% interest for $760,000, with the option to remain open for acceptance for 21 day from the date of these orders, and with settlement to be completed within 60 days of written acceptance (the Option);
b.If the Option is not exercised, and if the Parties are unable to agree on the appointed selling agent within 14 days thereof, the Wife shall nominate in writing three (3) selling agents to the Husband, with details of their commission, proposed method of sale, and advertising campaign, and the Husband shall select one within seven (7) days;
c.The reserve rice shall be as a reed and in default of agreement in accordance with the written recommendations of the selling agent;
d.The settlement period be no more than 90 days unless expressly agreed between the parties or at the written request of the purchaser;
e.The Parties shall co-operate with the selling agent: and
f.The Parties will jointly retain Mr AS of AT Company to conduct the conveyance on behalf of Q Pty Ltd.

10.At settlement of the sale of the N Town, the proceeds of sale shall be paid in the following manner and priority:
a.Firstly, in payment of 50% of the costs, commissions and expenses (including advertising expenses) payable on the sale:
b.Secondly to discharge 50% of the registered mortgage number … in favour of the National Australia Bank Limited (noting that no monies are owing under the mortgage) and any other encumbrance affecting the N Town Land (save and except in relation to any Caveat lodged by or on behalf of either party. which shall be discharged at the sole expense of the party on behalf of whom it was lodged);
c.Thirdly, of 50% in payment of any mandatory adjustment or withholding required at law;
d.Fourthly, to Q Pty Ltd portion of any capital gains tax payable on the sale;) Fifthly, Q Pty Ltd 50% share of the balance then remaining be divided as follows:
i.To the Wife, 50% plus $223,906.36;
ii.The balance then remaining to the Husband.

11.Within 60 days of the settlement of the sale of the parties' interest in the N Town Land, the Parties shall do all acts and things and sign all documents as may be required to appoint Mr AU of AR Partners at their equal expense to wind up Q Pty Ltd and the Q Family Trust and they shall each sign all documents reasonably requested of them within seven (7) days of a written request.
12.That in the event that either party refuses or neglects to execute any deed or instrument, a Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument upon the request of the non-defaulting party in writing and an Affidavit sworn by the solicitor for the non-defaulting party constituting sufficient evidence of the default.
13.The Husband pay the Wife's costs of and incidental to this proceeding.

IN THE ALTERNATIVE
14.That the Financial Agreement entered into between the Applicant Wife and Respondent Husband pursuant to Section 90C of the Family Law Act 1975 (Cth) (Act) on 24 November 2017 ("Financial Agreement") be declared binding pursuant to Section 90G(1 B) of the Act.
15.Pursuant to section 90KA(c) of the Act, the Financial Agreement executed by the parties be enforced as if it were an order of the Court.
16.That pursuant to section 90KA(b) of the Act the Husband pay the Wife the following amounts:
a.The sum of $1,385,000 pursuant to Clause 7 of the Financial Agreement plus interest pursuant to the Rules accruing between 22 February 2018 and 1 May 2019;
b.The sum of $110,000 pursuant to Clause 11 of the Financial Agreement plus interest pursuant to the Rules accruing from 22 February 2018: and
c.The sum of $241,940 pursuant to Clause 16 of the Financial Agreement plus interest pursuant to the Rules accruing from 22 February 2018.

(the Payments).
17.For the purposes of Order 16:
a.Within 60 days of the date of these Orders (the Due Date), the Husband and the Wife (personally, or in their capacity as Directors/ Officeholders) do all acts and things and sign all documents (electronic or otherwise) as are required to transfer the business trading as M Business (the Business) to the Wife, or to an entity or entities nominated by the Wife, at the value attributed to the Business by Ms AV of AW Company in partial satisfaction of the Payments: and
b.Within three (3) business days of the date of these Orders, the Husband and the Wife do all such things and sign all documents to instruct Viclaw Lawyers to release from the monies held in trust for the parties ($289,913.81) such sum as is required to discharge the Payments, with the balance to be paid to the Husband.

18.The Husband shall pay or cause to be paid the balance of the Payments to the Wife, less any amounts received pursuant to paragraph 21 herein, if any by the Due Date.
19.Under the indemnities provided by the Husband in favour of the Wife pursuant to Clauses 8(d) and 24(i) and 24(iii) of the Financial Agreement, the Husband pay, or cause to be paid, all liabilities incurred by the Wife since 24 November 2017 in respect of:
a.M Pty Ltd as Trustee for the L Trust;
b.P1 Business as trustee for the P Trust; and
c.H Pty Ltd as trustee for the Assaf Family Trust.

20.Without admission as to the necessity of same, the Wife will do all acts and things, and sign all documents to reasonably co-operate with the Husband in relation to the State Revenue Office Payroll Tax Notices of Assessment through any objection process, VCAT proceeding, Supreme Court proceeding and/or Court of Appeal proceeding provided always the costs of and incidental to those proceedings (including those incurred in connection with the Wife's co-operation) are paid solely by the Husband.
21.That the arties forthwith and within three business dates of the date of these Orders do all such things and sign all documents to instruct the Commonwealth Bank of Australia to discharge the loan secured by the funds held in the joint account number …13 and thereafter distribute the balance of funds equally between the parties.
22.Pursuant to section 79 of the Act, the Wife pay to the Husband $305.493 (the N Town Payment) by the Due Date.
23.Contemporaneously with the N Town Payment:
a.Pursuant to section 78 of the Act, it be declared that the Wife holds 50% of the legal and equitable interest in the land at R Street, N Town, in the State of Victoria being the whole of the land more particularly described in Certificate of Title … Folio … (N Town Land) registered in the name of Q Pty Ltd (as trustee for the Q Family Trust);
b.The Husband do all acts and things and sign all documents (electronic or otherwise) prepared at the expense of the Wife as are required to cause the following in relation to Q Pty Ltd as trustee for the Q Family Trust:
i.The resignation by the Husband from any office that he may hold in Q Pty Ltd to have effect from the date of these Orders:
ii.The transfer by the Husband to the Wife (or her nominee) of any shares the
iii.Husband may hold in Q Pty Ltd;
iv.The removal of the Husband as a beneficiary of the Q Family Trust; and
v.The waiver by the Husband of any beneficial entitlement he may have, or have had, in Q Pty Ltd and / or the Q Family Trust.

24.That in the event that either party refuses or neglects to execute any deed or instrument, a Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument upon the request of the non-defaulting party in writing and an Affidavit sworn by the solicitor for the non-defaulting party constituting sufficient evidence of the default.
25.The Husband pay the Wife's costs of and incidental to this proceeding.

File number(s):	MLC 8768 of 2020
Judgment of:	HARTNETT J
Date of judgment:	31 March 2023
Catchwords:	FAMILY LAW – PROPERTY – Financial Agreement dated 24 November 2017 – Where the wife sought the Financial Agreement be declared binding and enforced as if an order of the court – Where the husband sought the agreement be set aside under s 90K of the Family Law Act 1975 (Cth) for common mistake and/or because the parties, by their subsequent conduct and agreement, had abandoned the Financial Agreement – Where the husband claimed the Financial Agreement voidable – Where there had been partial compliance of the Financial Agreement by the parties – Where the husband had given broad indemnities to the wife – Where the wife had sought compliance by the husband with the Financial Agreement– Where common mistake not made out – Where the application of the husband on the grounds of abandonment does not succeed – Financial Agreement upheld.
Legislation:	Evidence Act 1995 (Cth) s 140 Family Law Act 1975 (Cth) ss 71A, 78, 79, 90B, 90C, 90D, 90G, 90J, 90K, 90BB, 90KA, 90UC, 90UD, 90UL, Part VIII, Part VIIIA, Part VIIIAB Payroll Tax Act 2007 (Cth) Taxation Administration Act 1997 (Cth) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited:	Balodis & Balodis [2021] FamCA 499 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 Commissioner of State Revenue v Optical Superstore Pty Ltd [2019] VSCA 197 Fewster & Drake (2016) 56 Fam LR 38 Graham & Squibb (2019) 59 Fam LR 299 Hoult v Hoult (2013) 50 Fam LR 260 Jafari v 23 Developments Pty Ltd [2019] VSCA 201 Kostres v Kostres (2009) FLC 93-420 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 Sanger v Sanger (2011) 46 Fam LR 275 Taylor & Johnson (1983) 151 CLR 422
Division:	Division 1 First Instance
Number of paragraphs:	144
Date of last submissions:	31 October 2022
Date of hearing:	29 August 2022 – 2 September 2022
Place:	Melbourne
Counsel for the Applicant:	Mr Puckey KC and Dr Matta
Solicitor for the Applicant:	Hargreaves Family Lawyers
Counsel for the Respondent:	Mr Bartfeld KC and Mr Schmidt
Solicitor for the Respondent:	VicLaw Lawyers

MLC 8768 of 2020
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MS HADDAD Applicant
AND:	MR ASSAF Respondent

ORDER MADE BY:	HARTNETT J
DATE OF ORDER:	31 MARCH 2023