PABST & PABST

[2020] FCCA 1965

FEDERAL CIRCUIT COURT OF AUSTRALIA

PABST & PABST [2020] FCCA 1965

Catchwords:
FAMILY LAW – Property – where husband seeks that time be extended to file an application to review the orders made on 6 March 2017 or alternatively that pursuant to section 79A(1)(a) and/or section 79A(1)(b) of the Family Law Act 1975 (Cth), the orders made 6 March 2017 be set aside – where the wife seeks summary dismissal of the husband’s application pursuant to section 45A of the Act – where the husband now asserts he has real issues as to whether he signed any or all the relevant pages of the orders made on 6 March 2017 and that there has been fraud and false evidence –application for summary judgment dismissed – costs of application reserved.

Legislation:

Family Law Act 1975 (Cth), ss.45A, 79, 79A

Cases cited:

General Steel Industries Inc. v Commissioner for Railways (NSW) (1964) 112 CLR 125
Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60

Applicant: MR PABST

Respondent: MS PABST

File Number: DGC 4210 of 2018

Judgment of: Judge Burchardt

Hearing date: 17 July 2020

Date of Last Submission: 17 July 2020

Delivered at: Dandenong

Delivered on: 23 July 2020

REPRESENTATION

Counsel for the Applicant: Mr Trim

Solicitors for the Applicant: Robert Wood and Associates

Counsel for the Respondent: Ms Paull

Solicitors for the Respondent: WL Lawyers

ORDERS

1. The application for summary judgment is dismissed.

2. Costs of the application be reserved.

3. The matter be adjourned to this Court for final hearing before Judge Burchardt on … 2020 at 10.00 am, with an estimated hearing time of 2 days.

4. The party responsible for the payment of any fee including a setting down or hearing fee pay or cause to be paid such of the Fees as shall be payable by that party in accordance with, and within the time specified in, the Federal and Federal Circuit Court Regulations 2012.

5. The Husband remove all caveats over the parties’ properties forthwith.

6. There be liberty to apply.

IT IS NOTED that publication of this judgment under the pseudonym Pabst & Pabst is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 4210 of 2018

MR PABST

Applicant

And

MS PABST

Respondent

REASONS FOR JUDGMENT

1. On 6 March 2017, consent orders were made in the Family Court of Australia between the parties to this proceeding and a company of which they were formerly both owners. The orders are annexed to the most recent affidavit of the applicant husband (the parties are divorced but it is convenient to keep this nomenclature) on 6 July 2020. They purport to show Mr Pabst’s signature on each page.

2. On 14 December 2018, the husband filed an application which was subsequently amended on 18 September 2019. In that amended application, the husband seeks that time be extended to file an application to review the orders made on 6 March 2017 or alternatively that pursuant to section 79A(1)(a) and/or section 79A(1)(b) of the Family Law Act 1975 (Cth) (“the Act”), the orders made 6 March 2017 be set aside. It should be noted that in oral submissions it is the section 79A matter that has been accentuated.

3. The amended application also seeks that there be an adjustment to the parties’ interests in property to effect an equal division of the current net value pursuant to section 79 of the Act and although an application to transfer to the Family Court of Australia was mentioned, it has not since been pressed.

4. The parties have filed copious affidavit material from time to time. The husband’s initial position was that he signed orders of 6 March 2017 but in an affidavit filed 13 March 2020 at paragraph 62 he retracts that admission and asserts “I have serious issues as to whether in fact I had ever signed the Minutes of Consent Orders which are dated 1 March 2017”.

5. The matter has been the subject of extensive delays caused by problems with tax returns of Mr Pabst and the company A Pty Ltd. The Court on 9 October 2019 adjourned the matter to Final Hearing on 30 April 2020 on the application of the husband and appointed Ms B to do the relevant tax returns on behalf of both parties. For reasons deposed to by Ms B, they have not yet been completed.

6. The April trial did not proceed but the matter was adjourned on 6 May 2020. On that date, counsel for the wife made an oral application foreshadowing an intention to seek the summary dismissal of the husband’s application pursuant to section 45A of the Act which I then adjourned for hearing on 17 July 2020. This judgment arises from this course of events and deals only with the summary dismissal application. It should be noted that the bar under section 45A is no longer as high as it was previously perceived to be as described by the High Court in cases like General Steel Industries Inc. v Commissioner for Railways (NSW) (1964) 112 CLR 125. The moving party has to show that the respondent has no reasonable prospects of successfully prosecuting their case and to prove that does not have to show that the respondent’s position is hopeless and doomed to fail. It should also be noted that in considering the merits of the matter at what is necessarily an impressionistic level, the Court is obliged to draw all reasonable inferences, but only reasonable inferences, in favour of the non-moving party (see Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60 per Gordon J at [132]).

7. I do not propose to issue a lengthy judgment on this matter. Subject only to any renewed application to transfer the matter to the Family Court of Australia (and there has been no mention of it since the amended response was filed as long ago as September 2019), I am likely to be the trial judge. I propose to say as much but not more as is necessary to dispose of the matter.

8. The husband’s essential position, as things now stand on his most recent affidavits, produces the following relevant narrative. The parties separated in 2014. At that time, their company A Pty Ltd (“A Pty Ltd”) owned a number of properties. A Pty Ltd had a line of credit which at that point was open to use by both the husband and the wife.

9. The minutes of proposed consent orders were originally filed with the Court but were rejected by Registrar Mestrovic who inter alia expressed confusion as to how the proposed orders could be just and equitable when they provided for one party to have $300,000 more than the other.

10. Registrar Mestrovic’s letter to the solicitors for the wife and Mr Pabst was dated 17 January 2017 and as I have just indicated stated “On the information provided I do not see any rationale for the applicant receiving nearly $300,000 more than the respondent when on the face of it she earns slightly more than him; to that extent I do not consider the orders to be just and equitable”.

11. The husband says he did not receive this letter because it was posted to a postal address where he did not collect his mail and which was likely to be damaged by rodents or bad weather.

12. Following Registrar Mestrovic’s letter revised versions of the draft orders were sent back and these led to the orders already referred to which have precipitated these proceedings. The husband now says that he has real issues as to whether he signed any or all of the relevant pages. His counsel did not shrink as I understand the matter from asserting fraud on the part of the wife and/or her agents. These are serious matters, all the more so when in an earlier affidavit the husband had deposed that he had indeed in fact signed the relevant orders. On any view of the matter, this will be a forensic difficulty for him at trial.

13. The husband additionally asserts that an assertion that the wife’s family had provided $200,000 along the way to the purchase of the property in Town C is not true. He also asserts that the mortgage attributed to a property owned by the wife at D Street, Suburb E in the document sent to the Court was wildly inaccurate. The wife’s explanation for this is that she may have included in the composite figure not only the then mortgage of approximately $210,000 but also the relevant debt in the line of credit in the sum of about $120,000. The figures are indeed commensurate.

14. The husband also complains that because no tax returns have been lodged in respect of A Pty Ltd from 2009 to 2019, and he has not nor has the company he controls lodged tax returns from 2014 to 2019, the situation as at the date of the orders was not as it was represented. It appears from the materials that there may be GST owing because A Pty Ltd might appear to have been receiving monies paid by way of GST but not forwarding them to the Australian Tax Office. It is also asserted that there may be Capital Gains Tax arising out of the settlement proposed by the March 2017 orders.

15. The wife strongly resists the application. She points to the fact that the husband has radically changed his story at the last moment. She points to what she says is a pattern of sloth and delay and obstruction on the husband’s part. She asserts that his application in December 2018 was motivated not by any proper distain for the March 2017 orders but rather by the fact that he learnt that she was then in a new relationship. It would appear from the materials that the wife did indeed enter into a new relationship which became known to the husband at about that time.

16. The husband goes on to submit as he did through counsel in the hearing before me that the property pool is now worth approximately $5,000,000 and he has only 20% of it. The wife asserts the property pool is worth $2,800,000 and should be divided 55/45 and now says 50/50.

17. The husband roundly submits that there has been fraud and false evidence. There are other complaints made about the role of the former account for A Pty Ltd, Mr F.

18. I should make it clear that I regard the delay on the husband’s part as being of significant concern. It counts against him. His explanations for his failure to comply with his taxation obligations appear, at the level of analysis that this interim decision necessarily represents, to be thoroughly unsatisfactory. Indeed, the affidavit of Ms B suggests that she approached the taxation responsibilities of the husband and his business entity in a similarly lackadaisical way over a protracted period of time.

19. The husband’s case will on any view face significant forensic difficulties arising out of the fact that he has now deposed to a significant error in an earlier affidavit. Nonetheless, the fact is that he has sworn that he did not execute the March 2017 orders. This is a very serious and significant matter. In my view, it is not one that can be dismissed on a summary basis. Only one of two explanations are tenable. Either he did sign the documents or he did not. He complains that he did not have legal advice and of course that is another relevant consideration. It needs to be tested by the evidence.

20. Furthermore, the nature of the pool as at the date of the orders is not at least to my mind entirely clear. I cannot say with a requisite degree of assurance that the husband may not prove that the pool might either not have been as it was described in the draft orders and in the correspondence that surrounded it and/or that it did not reflect the equal resolution of the matter that the wife says it did.

21. In those circumstances and not without some considerable hesitation, I think that the application for summary dismissal cannot be upheld. Nonetheless, this lamentable matter needs to now progress smartly to resolution. I propose to list the matter for mention so that trial directions can be made for an effective and speedy trial of the husband’s application. I should make it clear that what will be before the Court on that occasion is the husband’s application to set aside the orders. Only if he is successful in setting aside those orders will it be appropriate to embark on the far wider forensic issues that would fall for determination in considering what a just and equitable property settlement between the parties might now be.

22. I do not propose to make any costs orders in respect to the section 45A application. In a sense its ultimate success or failure will be determined in the trial in the sense that I will make a final conclusion as to whether or not the orders were forged or in some other fashion inappropriate or improper. The application was certainly not devoid of prospects of success given the husband’s late amendment to the critical issue as to whether or not he actually executed the 2017 orders. It would be wholly inappropriate for the wife to pay on an interim basis the costs of that application. The costs of the interim application will be reserved.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate: 

Date: 23 July 2020