PABST & PABST (No.2)

[2020] FCCA 3110

FEDERAL CIRCUIT COURT OF AUSTRALIA

PABST & PABST (No.2) [2020] FCCA 3110

Catchwords:
FAMILY LAW – Application pursuant to s79A to set aside consent orders made in 2017 – whether orders procured by fraud effected by parties’ accountant or otherwise by the wife or her agents – husband retracting sworn admissions that he had signed the orders – whether orders constituted part of a scheme to evade tax fomented by parties’ accountant – whether orders vitiated for other reasons – court completely rejecting all suggestions of fraud and/or other improper conduct by the wife and/or the accountant – s79A claim devoid of merit – application dismissed.

Legislation:

Family Law Act 1975 (Cth), s.79A

Corporations Act2001 (Cth), s.127

Applicant: MR PABST

Respondent: MS PABST

File Number: DGC 4210 of 2018

Judgment of: Judge Burchardt

Hearing dates: 17 & 18 September 2020

Date of Last Submission: 26 October 2020

Delivered at: Dandenong

Delivered on: 20 November 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 be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Pabst & Pabst (No.2) 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. By an amended application filed 18 September 2019 the applicant husband (the parties are divorced but it is convenient to refer to them as husband and wife, as they do in their own materials) seeks to in effect set aside orders made on 6 March 2017.  While the application is made in the alternative, either pursuant to the Family Law Rules to extend time to review the orders made by Registrar Mestrovic on 6 March 2017 or alternatively pursuant to section 79A of the Family Law Act 1975 (Cth), the net effect is the same. It should be noted that as the case has been run it is really the section 79A application that is the substance of the matter. The respondent wife strongly resists the application on all fronts.

2. The basis of the application as it finely crystallised at trial was expressed by counsel as being on the grounds of fraud, suppression of evidence, false evidence and other circumstances.  All of these of course are denied by the wife. 

3. For the reasons that follow, I am completely unpersuaded that the husband’s attacks upon the 2017 orders are established and it follows that the application will be dismissed.

Agreed or Non-Controversial Matters

1. It should be noted that the parties have not been shy in the filing of affidavit materials, much of which is repetitive.  From this welter of materials the following narrative is not in my view controversial.

2. The husband was born in 1961 and subject to anxiety is in good health.  The wife was born in 1961 and although she has had some health difficulties once again overall her health is unremarkable.  The parties married in 1982 and have two children Ms X born in 1990 and Ms Y born in 1992.  These children are largely irrelevant to the matter before the Court.

3. In 1993 the parties established A Pty Ltd (“A Pty Ltd”) as a means of investing in properties and they have bought and sold quite a number of properties since.

4. In 2003 the parties separated because the wife discovered multiple infidelities on the husband’s part.  In 2004 the wife, with whom the children continued to live, bought her current home at D Street, Suburb G.  She had started a business with a partner in 1987 and paid that partner out in the sum of $100,000 in the year 2000.  Before that however they had bought a property at H Street, Suburb G which has at least since the date of dissolution of the partnership been wholly in the wife’s name.

5. In 2014 the wife bought a holiday home in Town C with the assistance of her parents.  It is conceded by the husband that the wife’s father provided $100,000 towards the purchase, but there is a dispute as to whether he provided a further $100,000 for stamp duty and ancillary matters.  That property has subsequent to final separation been substantially developed by the wife with the assistance of her brother to whom she owes a very substantial amount of money as a result.  The property is the subject of a caveat lodged by the husband.

6. By the time of separation the parties also relevantly owned a property at J Street, Suburb G where the husband presently lives; a property at K Street, Suburb G;  and a houseboat, fishing boat, jet ski and speed boat, all situated at Town L.

7. The property narrative has taken us ahead of ourselves.  Following separation as earlier indicated in 2003, the parties reconciled in 2007 and remained living together until final separation in about September 2014. Since that time the husband has been living in the J Street, Suburb G property.

8. The parties entered into negotiations in 2016 at which time both parties had legal representation and ultimately towards the end of 2016, with the assistance of their then joint accountant Mr F, the parties submitted proposed consent orders to the Family Court.  Registrar Mestrovic did not accept the proposed orders and wrote to inform them of this.  Subsequently orders were made in March 2017 as earlier indicated.

9. The controversy in this case in large parts concerns the circumstances in which the agreement was indeed forwarded to the Court, including the critical question as to whether or not the husband actually signed it, and of course as to whether the agreement should be set aside for other reasons.

The Submissions and Evidence Made At Court

1. It is not my practice generally to move at an early point to what was said at court.  Ordinarily I traverse the affidavit material and exhibits first.  Because of the way this case has been run however, in this instance it is more profitable to start with what they said.  I have of course read the parties (voluminous) affidavits carefully and have regard to them, but in the light of the way the case progressed it is not necessary to traverse them. The oral and documentary evidence material tendered to the court is what this case is all about. .

2. What follows is taken from my notes and is self-evidently not a transcript but does I believe sufficiently accurately denote the matters I found significant.

The Opening and Evidence of the Applicant Husband 

1. Following some initial skirmishes between counsel which it is not necessary to recite counsel for the husband opened his case. Counsel noted that he was seeking to set aside final orders made by Registrar Mestrovic on 6 March 2017. In December 2016 the application had been refused. The husband says he was not a party to a letter sent by Mr F to the solicitors who lodged the orders, in which the prior minute was amended. The application was pressed under section 79A of the Act on grounds as earlier indicated of fraud, suppression of evidence, false evidence and other circumstances. Alternatively what was sought was a review pursuant to Rules 18.08 and 1.14 of the Family Law Rules. The applicant would need an extension of time to do this and counsel referred to relevant authority in this regard.

2. The husband was focussed on the submission forwarded to the Court in 2017. There was a question as to how the value of the wife’s business was calculated. There was a query as to whether goodwill was considered and a query as to whether the wife’s financial statement had been disclosed. Documents had been called for and not provided. There was a conflict between the evidence of the wife and Mr F about goodwill. The husband says that the wife’s business was worth over $1 million when it was valued at $75,000. There was a query whether the agreement (i.e., the agreement supporting the final orders) was signed. The husband originally said he had indeed signed but had changed his position. A couple of signatures were not his and a couple were not the wife’s. There was an email from the wife’s solicitors saying that the signatures were missing. Counsel pointed to section 127 of the Corporations Act2001 (Cth) and queried whether the document had been signed by the company (which was a party to the agreement). There was a question as to what tax liabilities there were then extant and what the parties were told by Mr F. The husband said he was not told of tax consequences of the agreement. There was a question of whether the wife’s business value was disclosed. The false evidence was the submissions letter in January 2017 from the accountant.

3. In respect of other circumstances there was a question of whether the husband had obtained legal advice before signing both the first and second set of minutes.  There was a question as to whether Mr F had a conflict of interest.  Did the wife’s solicitor have a conflict of interest?  The parties’ property interests are still intermingled and the wife’s position is unclear.  Ms B, the solicitor appointed by the Court to undertake the applicant’s tax returns, says that there is $90,000 of income tax payable and also capital gains tax on a property at M Street.  There was possibly $20,000 of capital gains tax in addition.  Ms B says that the transfer of real estate would provoke an ordinary dividend and the wife would be liable for tax in the 2017 and the husband also.  There was a call for the wife’s 2017 tax returns.  It was asserted that the Town C property was worth $600,000.

4. The applicant was called and adopted his affidavits as true and correct.

5. Under cross-examination the husband confirmed that the relationship started in 1982, with separation in 2003 and reconciliation in 2008, followed by final separation in June 2014.  He agreed that between 2003 and 2008 the parties had separately bought property but did not agree that separation took place because of his affairs.  He denied family violence.  He accepted that the parties bought their first property in N Street, Suburb G in 1982 for $46,000 and that the wife’s parents gave her $15,000 towards this.  Otherwise they had no significant assets at the start of the relationship.  The wife started her business with a partner in 1987 and the children were born in 1990 and 1992.  They bought the property at H Street, Suburb G for $104,000 in 1997 and the wife still has it.  In 2000 the wife paid out her partner for $100,000.  In 2000 the parties sold N Street, Suburb G for $200,000 and bought a further property.  He denied however that they put any of those monies towards his buying two machines.  The husband set up A Pty Ltd through his accountant.  Rent was paid to the company from a unit in K Street, Suburb G of $1,400 per month and the statements went to him.  He denied controlling the rents.  Funds were distributed but are now into his account.  They were shared to pay the joint mortgages.  The P company was registered in 2001.  He had not bought two machines at that time.  The P Company was deregistered in 2012.  It was deregistered because of tax problems and there was $81,750 which was not paid.  He registered O Company just before the P Company was deregistered.  That business’ tax bills were never paid. 

6. His daughters were sexually assaulted in 2002 and the perpetrator was jailed for four years.  In 2003 he bought a property at Town Q and lived there from 2004.  He stayed there after the first separation until 2008 but then lived with the wife and the children.  Town Q was then rented and rental funds went into the pool.  It was not just applied to his mortgages between 2009 and 2014.  The first separation was in September 2003 but they lived under the same roof until April 2004.  In 2003 they sold land for $360,000 (at Suburb R) and he gave the wife $304,000 from the proceeds.  There were $304,000 in clear funds after the mortgage was discharged.

7. The houseboat was bought for $185,000 in 2003 and then renovated.  It was valued between $400,000 and $450,000 in 2015.  He did not recall the wife’s parents giving $30,000 for the boat.  He had a mortgage on the houseboat.  The wife bought D Street, Suburb G after separation for $425,000 with a mortgage of $210,000.  The Town C property was bought by A Pty Ltd.  She bought it with his input.  He agreed that the wife’s parents contributed $100,000.  It was put to him that the wife’s parents also provided $100,000 for stamp duty and associated costs.  The husband responded that his father-in-law told him that he had given $100,000 for the property.  He disagreed the property was placed in the name of A Pty Ltd on the advice of Mr F.  The whole family used the property.  The loan on Town C was in the wife’s name.  It was put to the husband that in effect he had not assisted with renovations to Town C.  He said that he aided in the renovations which were minimal and he did not believe her parents had contributed.  The wife paid the Town C mortgage.  He paid gas and electricity on D Street, Suburb G which at the time they were in his name.  The wife paid the D Street, Suburb G mortgage and paid the mortgage on the business.  He had bought a factory which he sold in 2011.  A Pty Ltd owned the property and retained the proceeds.  Rentals went to the company of which the wife was also a director.  He had bought J Street, Suburb G in 2007 for $170,000 through A Pty Ltd.  J Street, Suburb G was rented by O Company. 

8. He moved back into D Street, Suburb G in 2008.  The wife continued to pay the mortgage.  In 2009 they took out a line of credit with Westpac.  It was to enable a purchase of property for the children.  The wife was the guarantor on the loan.  It started off as a mortgage but he paid it with the rentals received.  It was refinanced after eight years.  He denied that the wife paid for the line of credit after 2014 but when pressed admitted that he owed $23,000 on that loan.  He did not believe the wife had tried to close this account but it was closed in July of this year.  He still owes $23,000.

9. When he sold the factory in 2011 for $225,000 the proceeds were distributed.  Some of it was used to pay tax.  When it was put to him that he had not completed tax returns from 2013 onwards the husband said he was unable to answer without checking.  He believed it might be 2015 and 2016 but could not be sure.  He was at court on 9 October 2019 when orders were made by consent for him to prepare all his tax returns.  He said they had been prepared but not lodged.  Once they are lodged payment is due.

10. Rental receipts from Town Q had been $370 a week.  In 2014 Town Q was sold for $530,000.  He did not retain the proceeds.  In mid 2014 he left D Street, Suburb G and moved to Town C for six months.  After a couple of months he then went to J Street, Suburb G.  He paid some contributions while he was at Town C.  The wife paid the outgoings for a couple of months.  They discussed property settlement in 2015.  Robert Wood are still his lawyers.

11. He conceded the wife’s assertion in paragraph 36 (exhibit R1 (“court book”) page 138) that both parties engaged lawyers to negotiate a property settlement in early 2015.  He conceded that in June 2015 the wife obtained valuations of D Street, Suburb G, the business premises and the houseboat.  He also conceded that in May 2015 his personal tax return for 2013 was lodged by Mr F.  He conceded that he had been overseas between June and August of 2016.  He conceded that in February 2016 the A Pty Ltd tax return for 2009 was lodged.  He denied however that that was the last dealing he had with Mr F.  He said Mr F did not stop being his accountant in 2016.  He had invoices well after 2016 from Mr F.  He had engaged Ms B as his accountant in 2018. 

12. The husband conceded receiving draft consent orders from Mr F in November 2016.  He said Mr F was not involved in his tax affairs after the 2013 year.  He had not asked Mr F not to submit a return for his business for the 2014 year.  The consent orders dated 2 December 2016 he signed each page.  He conceded his address was J Street, Suburb G.  Mr F had told him to get legal advice.  He went to Go To Court Lawyers.  He never got any advice and the lawyers gave him a refund.  He did not like their advice.  He could have gone to another lawyer but chose not to.  He signed on 9 December 2016 and there were agreed valuations.  He had two superannuation funds.  His S Bank super account was unknown to him at the time and had about $60,000 in it.  Initially he agreed there was no superannuation split.  Each retained their vehicles and chattels. 

13. Counsel traversed the table of assets and liabilities received by the parties at page 1 and following of the Court book.  Under that he obtained 49.2 per cent of the pool.  At that point in time values were agreed.  He agreed at paragraph 8 of his affidavit affirmed 14 December 2018 (exhibit R1 page 108) that he had said, “We finalised our consent orders on 6 March 2017 to effect a partial property settlement which was agreed to in order to help our potential financial problems relating to A Pty Ltd.”  He said however that he did not believe he signed each page of the orders.

14. Counsel took the husband to exhibit R1 page 142 and he conceded that in that at paragraph 62 he had asserted that he had signed the second minutes of proposed orders on 1 March 2017.

15. Counsel took the husband to page 120 of the Court book which are the orders dated 6 March 2017.  He had signed on each page.  J Street, Suburb G and the K Street, Suburb G unit went to him and Town C went to the wife. 

16. It was put to the husband that both parties signed every page.  He said that at that time he believed yes.  His opinion has since changed.  The values of $75,000 for each of their businesses was agreed through Mr F.  A Pty Ltd was added.  His business had been allotted $75,000 for plant and equipment and hers included goodwill also.  The houseboat was valued at $450,000.  The $580,000 figure included ski boats, fishing boat and jet ski.

17. The husband denied ever receiving the letter from Registrar Mestrovic dated 17 January 2017 (“CB -118”).  Counsel took the husband to court book 18 which are photographs of his mail box.  He agreed it is a freestanding metal structure.  His factory is down the driveway.  He passes it going in and out.  It is keyed.  He does not use it and uses a post office box.  He disputes signing in March 2017.  Mr F (Mr F) emailed him or sent materials to the post office box.

18. Counsel took the husband to court book 123 and he agreed that it was the intention of the parties to end their disputes. 

19. The signatures “CB-29” to “CB-33” (being part of the report of Mr T) are all his signatures.  The husband said he did not sign the consent orders.  He had not signed on every page.  The signature court book 122 for A Pty Ltd is not his signature and the signature at court book 123 could be his.  The signature for A Pty Ltd on court book 124 is not his but the signatures on court book 125 are both his.  He had not raised this matter and this issue in his first two affidavits.  He only raised it in his 2020 affidavits.  It was not raised in October 2019.  He was not aware of this until the following day and was not aware of what Ms B had provided. 

20. The husband conceded that he signed the transfer of land at court book 97 which transferred the J Street, Suburb G property to him.  It was consistent with the consent orders.  The unit in K Street, Suburb G could not be transferred because he did not have the finance.  J Street, Suburb G was transferred unencumbered.

21. The husband was taken to court book 23 including an email from him to the wife dated 30 June 2017 where he asserted, “I signed those papers 4 months ago!  And on those papers it states once signed settlement is agreed!  You can’t have it both ways bitch.”  He conceded sending this message.

22. When taxed with Mr F’s email to Ms U of V Associates and her response both on 1 March 2017 (“CB-21”) the husband denied that he had signed three copies.  He did not sign the documents at Mr F’s.

1. The husband conceded collecting the certificate of title for J Street, Suburb G at court book 101 on 17 July 2017.  The K Street, Suburb G unit is still in A Pty Ltd.  He had sought to refinance in 2018 unsuccessfully.  There are a number of reasons why finance was not available.  He has not bothered to refinance in the last 18 months.

2. It was put to the husband that the wife resigned from A Pty Ltd in 2017.  He said that he only found out when he went to the bank.  The idea was that A Pty Ltd would cease.  This was not prevented because of his tax difficulties.  The building at Town C had been demolished. 

3. The husband conceded that in November 2018 he became aware that the wife had a new partner.  He conceded that he had sent the text messages at court book 66 to 79.  He is not sure if he has the remote for the garage.  He took the lawnmower in November 2017.  He took eight boxes of her documents to her house and took his lawnmower.  He used the remote control to access the backyard but has not seen it.  He has not spoken to the wife since.  His application was then made in December 2018 and he had put caveats on all of the wife’s properties which stopped her from refinancing.  These were removed after the last hearing and she refinanced and paid out the line of credit. 

4. The husband conceded that there had been a freezing order made on him in March 2019 but denied selling a boat subsequently.  He accepted that he was ordered to do his tax returns in October 2019 but these are completed but not filed.

5. Counsel revisited the question of the signatures on the orders and he confirmed that he disputed the signatures on A Pty Ltd on pages 122, 124 and 125 but “CB-123” could be his.  He disputed the wife’s signatures at “CB-123”.

6. The husband confirmed that he was keen to settle and was still keen to do so in March 2017. 

7. There was no re-examination.

The Opening and Evidence of the Wife 

1. Counsel confirmed that the only order sought was the dismissal of the application.

2. The wife was called and adopted her affidavits as true and correct.  Her business is closed for COVID but was hoping to reopen.  She is presently on JobKeeper.  Her affidavit sworn 6 May 2020 was true and correct.  She paid out the Westpac line of credit in July 2020.

3. Under cross-examination the wife confirmed that all her affidavits were true and correct.  She had first met Mr F (Mr F) when they first married.  He became their joint accountant after two or three years of marriage.  They used to socialise with him.  Mr F was also the accountant for the P company which was placed in voluntary liquidation.  She was not part of that and not involved in his P business.  The wife conceded that a prior business of hers had liquidated.  The office manager had attended to this.  It was put to her that this was a phoenix company but she said did not know what that meant.  The wife’s business had been established at Suburb G from 2004 to 2012.  It was then placed into voluntary liquidation.  Mr F was the accountant.  She was unaware that this was the same liquidator as that of the husband’s business.  She started a new business.  This was W Pty Ltd.  Mr F was the accountant.  The old business had owed the Australian Tax Office but this was not paid. 

4. Mr Pabst had activated A Pty Ltd with Mr F.  She was put on as a director.  The discussions were between Mr Pabst and Mr F and not her.  Town C was put in the name of A Pty Ltd.  It was bought by her and her parents.  The husband had not been involved as they were separated.  She had been in a jet ski accident.  She was 10 days over her licence and the police had told her to divest her interests because one of the victims might sue her.  Town C was placed into A Pty Ltd and the vendor wanted a quick settlement.  A Pty Ltd was the quickest way to purchase it.  It was put that there was no valuation when Town C was transferred to her but the wife said that there was.  She got the valuations when they agreed to separate.  It was from a real estate agent in Town C in 2015 to 2016.  There were no appraisals of the two properties the husband got. 

5. Mr F did all the tax.  She did not know if she had paid FBT and had not discussed this with Mr F.  She had never discussed division 7A loans.  The settlement discussions started in 2015.  She was speaking with Mr F in late 2015.  She was not involved in the taxes of A Pty Ltd and he had never discussed this with her.  Mr F only took instructions from Mr Pabst. 

6. The wife was cross-examined about the company tax return set out at page 1 of exhibit A1 (the husband’s bundle of documents).  She said this was the first time she had seen it and was not aware of it at all.  None of this information ever came to her.  They were trying to remove the three properties from the company.  A Pty Ltd sold M Street but she did not know about CGT.  She had no input into the purchase or sale of the property.  All the information went to Mr Pabst’s factory. 

7. The wife was cross-examined about emails at exhibit A1 page 8.  The wife said she knew nothing about this (being emails passing between a finance company and Mr F).  She said they were separated in 2016 and were not talking.  Mr F never discussed Mr Pabst’s matters with her.  When asked how K Street, Suburb G could have been valued at $500,000 in the materials presented to the Court the wife could not answer.  She said you will have to ask Mr Pabst that.  She did not value J Street, Suburb G because she had no access to it.  The husband owned his motor vehicle at the time of settlement.  He supplied Mr F with his figures.  Mr F wrote the application.  She and the husband were there at the time.  She did not know if his car was subject to finance.  The valuations were the same.  There were no tax returns for the husband’s business.  They were looking at recent sales in the same area.  She was unaware that you need to have a valuation before a transfer can take place from a company to an individual.  She and Mr Pabst went to Mr F and agreed which properties they would keep.  Mr F mentioned stamp duty and CGT.  Mr Pabst said they needed final orders to avoid this.  Mr F said he would check with his solicitors.  She leaves it to the professionals.  That is Mr F’s job.  There possibly were discussions about GST.  There were never discussions about division 7 loans.  She follows the accountant’s advice.  Both of them trusted the accountant.  She said she does read what she signs and then said that she reads most things.  She conceded, in my view readily and to her credit, that she had changed her evidence.

8. The wife said she was not in a rush.  They wanted to get on with their lives.  He had re-partnered.  She does not understand disclosure and discovery.  She was asked to get the valuations she was asked to.  The businesses were not valued.  They were not requested.  They both agreed.  Mr F drafted the application and had taken information from them both.  There was a lot going on at the time.  Negotiations were in his office.  His home is on top of his office.  Mr F’s solicitor was Mr Z.  She dealt with Ms U from V Associates.  Mr F was checking whether the tax advice was correct.  She had no idea what Mr F asked V Associates. She did not accept that there was any suggestion they were told they needed to discretely close the company down.  She does not accept that the figures were wrong.  The debt was correct.

9. The wife was cross-examined about the values attributed to the various properties.  She conceded that D Street, Suburb G was valued at $800,000.  She was unaware of an appraisal by Mr AA for $850,000 but said that some of Mr AA’s valuations were incorrect.  J Street, Suburb G was valued at $230,000 but was worth more.  So far as the valuation of her Motor Vehicle 1 at $30,000 was concerned she had looked at carsales.com for the value.  The wife was taken to page 31 of exhibit A1.  She conceded that there were three loans on D Street, Suburb G amounting to $210,000, $198,000 owing on Town C and $120,000 on her business.  The Westpac credit was $142,000.  The total of $360,000 was Town C plus the business. 

10. The wife conceded that item 55 there was no entry for income tax liabilities.  Once Mr Pabst had done his tax they were going to revisit that but he has not done his tax for five years.  The value of his business was never discussed with her.  They were separated.  He must have got the value from Mr Pabst. 

11. The discussion about the value of her business was the goodwill of her business was her.  She could not recall discussions with Mr F about value.  Her business started in 1987 and she works on it.  Her daughter Ms Y does too.  She is not sure if Ms Y is a director.  She was cross-examined in some detail about her employees and their names.  She could not say how many were on JobKeeper.  There were probably 10 with her and Ms Y.  They would be open six days a week and from 9.00 till 9.00 on Wednesdays and Thursdays.  They do online sales too.  The business is not worth $1 million.  Brokers would tell you this. 

12. The husband had two to three employees when they married but she did not know how many he had in 2016 to 2017.  She probably had 10 in 2017 including herself and three apprentices.  She had two to three part time employees. 

13. The handwritten document said it was a 50/50 split and they both agreed.  She did not remember 55/45 in the typed form.  She did not recall discussions.  All she knows is what was in the orders.  Mr F was acting for both of them and the company.  An invoice in 2018 was for the consent orders.  She forwarded the email to Mr Pabst.  Mr F does not discuss the husband’s business with her.

14. The wife conceded receiving an email from Mr F on 1 November 2016 (A1 page 16).  This was to do with A Pty Ltd.  They had agreed to keep the businesses out.  They had agreed not to get their businesses valued.  They both signed what was put in front of them.  They had discussed getting valuers but the husband did not want professional valuers.  She was prepared to go halves.  She got the estate agent to value Town C.  The valuation had been supplied to everyone.  There were valuations for Town C, D Street, Suburb G, the business and the boat.  She could supply the Town C valuation if counsel wanted it. 

15. The wife bought out her partner in 2003 to 2004.  She paid her $100,000 and took out a loan.  Mr F assisted her.  The accountant and solicitor worked out the figure. The wife said she had a stillborn child at the time.  The business itself was part of the purchase. I should interpolate and say that the wife’s answers about this aspect of the matter struck me as being somewhat evasive. 

16. Both she and Mr Pabst signed.  They agreed the valuations on that day.  There were no significant discussions with Mr F about the value of the business. 

17. Counsel took the wife to page 48 of exhibit A1.  She confirmed that Ms U was her lawyer.  She has no conduct with Mr Z whatsoever, (I should say that Mr Z appears to be a reference to Mr Z also of V Associates solicitors).

18. When cross-examined about “CB-21” (the March 2017 emails between Mr F and Ms U) the wife said she did not know what the husband did.  She said they both knew they went back.  She went back a second time.  They both knew they had to sign.  They both signed in December 2016. 

19. It was put that in November 2016 she withdrew $42,000 on a line of credit and the wife agreed.  She borrowed it.  She was paying it back.  It was a loan.  In the consent orders it did say that each party would be responsible for any liabilities.  She had bought a machine for the business.  She then went on to say that the $42,000 could be borrowing for the children.  These answers had somewhat the appearance of being made up on the run. 

20. The wife did believe that the husband received the letter from Registrar Mestrovic. 

21. Counsel took the wife to exhibit A2 page 109.  The wife said this was about tax.  He had dumped the land tax on her. 

22. The wife knew she had received a copy of the letter from Mr F to V Associates at exhibit A2 page 86 dated 30 January 2017.  She signed the orders.  They went to Mr F’s office a number of times.  Sometimes they discussed on the phone.  She went to Mr F’s office two to three times.  It was a very simple procedure.  She agreed that there was no financial statement for the husband’s company.  She did not know what plant and equipment the husband had. 

23. When cross-examined about page 82 of exhibit A2, an email from Mr F to Mr Pabst dated 21 February 2017, the wife could not answer.  The company was to disappear.  This was not saying it should not pay tax.  It was put to the wife that she had failed to comply with orders but she denied this and said she had signed everything she had been asked to sign.

24. The wife was cross-examined about an email she sent to the husband on 30 June 2017 (exhibit A2, page 109). She conceded this did not say it was a fifty-fifty split.  She had not obtained $1 million more than the husband.  Her business is not worth $1 million more.  It was a pretty even split.  It was in the consent orders that she would remove herself from A Pty Ltd.  They both knew they had to get their properties out of A Pty Ltd. 

25. The wife conceded the email at 120 of exhibit A2 was from Mr F on 24 February 2018.  This was just to end it all.  It was just a bill. 

26. The wife was asked if she had been to the husband’s factory in October 2018.  She said Mr Pabst sent her a message.  He told her they needed to divorce and that she could not continue to call herself Pabst.  She went to his factory and they had a discussion.  He asked her if she was seeing anyone and she said she was keeping her options open.  The next day, the children told him that she had met someone and he abused her.  When it was put to her that the husband said there was one property not in his name, the wife said they never discussed anything like that.  The wife was pressed as to her assertions as to the husband’s infidelities and said that he was unfaithful throughout the relationship.  She became labile at this point, and it was necessary to take a short adjournment.

27. The wife does not know the value of the D Street, Suburb G property now.  Nor does she know Town C.  There have been no updated values.  The husband has not done his tax returns, and tax is not settled.  The business has been closed for three months, and she has a lot of debt. 

28. It was put to her that the husband was concerned that when he lodges his tax returns, this could give rise to several hundred thousand dollars of liability.  The wife says he has not done his returns.  The returns will have to be presented, and they must pay what they must pay.

29. In re-examination, the wife was asked about the date of the ski accident (in the light of the fact that it had been put that the wife had put Town C in the name of A Pty Ltd to avoid a potential exposure to liability).  She said the accident was in late 2003, or 2002.  She had bought D Street, Suburb G in 2004. 

The Evidence of Mr F

1. Mr F adopted his affidavits as true and correct.  He confirmed that he had sent to the Court the orders which were ultimately dated 6 March 2017, at “CB-120” and following.  All of it was signed by all of the parties.  Ms Pabst signed in front of him, but he could not remember about the husband.

2. Mr F also confirmed that he sent the email dated 1 March 2017 to Ms U, of V Associates at “CB-21”.  It was given to the solicitor on the Monday evening.  He believed he had also provided it previously, as he had sent a bundle of documents.  He remembered that Mr Pabst came back to sign the missing few pages over the next few days.  On 6 March, the solicitor asked for the originals.  He further confirmed that the table of assets at “CB-12” was correct and was a fair and accurate position of both parties, which both parties had agreed to. 

3. Mr F confirmed the last tax return he had prepared for the husband’s business, O Company, was on 21 October 2015, which was for the year ending 2013.  This was the same as for his individual tax.  He had never done a tax return for A Pty Ltd.  He lodged a no tax necessary return for 2009 on 17 February 2016.  He has not undertaken any further work for any of these entities.  He has seen a preliminary profit and loss statement from Ms B from 2009, but has never spoken with Ms B.  They have only communicated by email.  There is no capital gains transfer tax due on transfers due to court orders.  There is a rollover provision.  Dividend calculation only arises if there are franking credits.

4. Under cross-examination, it was put to Mr F as to whether he had sent the email on 1 March 2017 (“CB-21”).  He said he had sent that some time ago.  He printed and scanned it.  He had not blocked the top of it, dated 12.39.  He thought he had already sent it.  This week he had sent it, and he thought he had sent it to Ms U.   The signatures of the husband were on the documents.  Telephone call was the preferred form of contact with Mr Pabst. 

5. It was put to Mr F in plain terms that he had forged the signatures on the documents, and he responded that this was absolute nonsense.  He said that when Mr Pabst came back for signing, he thought that Mr Pabst might need to take the documents to V Associates.  They were not sent on 1 March.  On Monday the 6^th, they had still not arrived at the solicitors.  He was unable to say how the documents got to the solicitors.  Mr F was cross-examined about paragraph 12 of his affidavit filed 8 October 2019.  He confirmed that in it, he was referring to V Associates.  At that time, they were using the combined solicitor.  This went on until the point where the husband needed separate legal advice.  Ms U was the solicitor.  It was the start of the process of using consent orders.  He thought this started in about March 2016.  Mr F was cross-examined about the emails dated 1 March 2017 to Ms U (“CB-21”).  He said he had not copied either of the parties.  The lawyer was acting for both of them.  The lawyer was requesting the three copies.  Mr Pabst delivered them to him.  He asked rhetorically why he would send them to Mr Pabst again.  He had not sent the email from Ms U timed at 12.39 pm on 1 March 2017 to Mr Pabst.  Mr Pabst came to him to re-sign.

6. Mr F was cross-examined about paragraph three of his affidavit affirmed 15 July 2020.  He confirmed that he stopped doing accounts after he completed the O Company 2013 return.  This was the final return for O Company.  He was the run-around person assisting the parties to get the process completed.  He had attempted to get finance for the husband to purchase Suburb G, but this was unsuccessful.  He has skills in business valuation but is not a qualified business valuer.  He valued their businesses.  He guided both Mr Pabst and Ms Pabst as to what the value of their businesses were.  Both parties agreed with the valuations.  He had looked at Ms Pabst’s books.  There were written-down values from 2016.  He had no idea about the husband’s plant and equipment, although he knew he had some new equipment.  In 2013, the husband had plant and equipment.  He discussed the extra plant that had been bought with Mr Pabst and raised the value of the business to $75,000.  So far as the valuation of Ms Pabst’s business was concerned, there was not much goodwill.  It was loss-making for 20 years.  He received the written-down value from 2016, which was $63,397.  Goodwill took this up to $75,000. 

7. Mr F was cross-examined about paragraph 32 of his second affidavit, in which he asserted that the husband signed the amended consent orders on 1 March 2017.  It was put to him in plain terms that Mr F had forged the husband’s signatures, and Mr F responded, “Absolute nonsense.”  When it was put to him that the three copies were all forged, he denied it.  He said none were forged. 

8. Mr F said he was the accountant for P Company.  This was put into liquidation.  He could not remember what assets were moved to the new company.  The company had not paid tax, which was why there was a voluntary liquidation.  It was put to him that the same process was followed with the wife’s business.  That was put into voluntary liquidation, and there was a new company.  He did not remember whether this was because of taxation.  When it was put to him that he had proposed the same thing be done with A Pty Ltd, Mr F denied this profusely.  He could not remember the date upon which the name of A Pty Ltd was changed.  He was the accountant for A Pty Ltd.  The objective was property holding.  A Pty Ltd also owned Town C.  It could have been a family home or a development property.  When it was put to him he had had conversations about FBT in respect of the Town C property with Ms Pabst, he said that this was less than six times.  He said he had less than six conversations about division A – 7A tax.  There was no methodology to calculate such tax, because there were no balance sheets.  When it was put to him that there were conversations about a rollout leading to declared ordinary individual dividend (if I understood these technicalities correctly), Mr F said, “You have to quantify it before you declare it, and you need to know whether there are franking credits.”  No-one has any idea what the net distributable amounts are.  There is a substantial risk it cannot be quantified.

1. I should interpolate and say that Mr F answers to some of these questions was dismissive and sarcastic.  He plainly regarded the propositions being put to him as being radically unsound. 

2. Mr F was cross-examined about the company tax return for A Pty Ltd 2009 (exhibit A-1, page one).  He said he had no information to suggest that A Pty Ltd had any income.  He had no information about rent, expenses or outgoings.  He knew some parcels of land were owned but did not know what they were used for.  He did not remember M Street being sold.  He had not been involved with A Pty Ltd from 2009 to 2016.  He had not received any documents about any activities of A Pty Ltd.  He was involved in trying to refinance Suburb G.  The finance company valued it at $460,000.  And it was put that this was then valued at $500,000 in the spreadsheet.  Mr F said this was based on realestate.com documents provided by the clients.  He could not remember if D Street, Suburb G was appraised was $850,000.  They would have had information of comparative values.  He had not seen an appraisal Mr AA.  The parties gave him the real estate documents.  The values he ascribed were accurate to the information he was given.  He did not verify that there was a debt.  He relied upon the information given to him.  He conceded there was no reference to the line of credit in the draft orders.  He was unaware of Mr Pabst’s tax liability.  Mr Pabst had not done returns since 2013. 

3. When it was put to him that it was his plan that they get the real estate out of A Pty Ltd, and liquidate A Pty Ltd to avoid tax, Mr F denied this very strongly.  He said words to the effect that he would not put his accountancy qualifications, his taxation qualifications and his profession at risk in such a fashion for a tiny amount of money involved in such improper conduct (by way of the fees he would have received).  The husband was free to call him at night.  He told the husband to go to Go To Court Lawyers.  The husband rang at night to complain about them, and he got a refund.  Mr Pabst had been offered the opportunity to get independent advice.  He was not satisfied.  He asked Mr F for someone.  He said he did not know anybody but would find one.  Before V Associates, the husband had Robert Wood.  He had no idea what searches the husband had undertaken in respect of solicitors.  This had not been done to avoid a conflict of interest.

4. Mr F confirmed that he had not sent the letter dated 30 January 2017 to V Associates, to Mr Pabst.  It went by email to Ms U.  Mr F was adamant that he believed he had kept all parties involved.  He would not have known the figures provided to the Court if he had not been given them.

5. Mr F was taxed with Ms B’s conclusions but indicated that he simply did not agree. 

6. In re-examination about the 2009 A Pty Ltd return, Mr F said he had not provided this to Mr Pabst.  There was nil tax.  He did not remember if Mr Pabst asked him, or whether it was an ATO demand that provoked the return.  You can always amend tax returns.  It was Ms U from V Associates who told Mr F that the husband should get independent advice. 

7. It should be noted that, at this point, it was indicated that the evidence was closed by counsel.  Counsel for the husband indicated he would not seek to rely upon the affidavits of Mr T and Ms B.  Thereafter, the matter proceeded by way of written submissions. 

Some Brief Observations about the Witnesses

1. The husband impressed me as being a person of strong will and a dominant personality with, in some respects, a quite excellent memory for dates and amounts – the values of properties and the like was impressive.  Nonetheless, this is a matter to which I shall return, some aspects of his evidence were not credible.

2. I have commented unfavourably upon several aspects of the wife’s evidence, but conversely, she was in the main a good witness who was generally responsive to the questions put.  Her endeavours to distance herself from all matters of detail relating to the finances of her business might seem to sit oddly with her apparent success as a businesswoman (she was on the local business council for a period of time).  Nonetheless, bearing in mind that apparently her business, despite its successes –paying out her partner and paying off the property where the business is situated – appears to have been somewhat precarious.  I should say that I accept, to a considerable extent, she leaves the formal accounting issues concerned with both her own private finances and her business largely in the hands of others.

3. Mr F was at times sarcastic and dismissive to some of the questions put to him.  Nonetheless, his did respond directly to the questions put to him, and to the extent that he was somewhat combative, this is perhaps understandable.  He is after all a professional person who has been accused in plain terms of forgery and – not put in terms, in substance – of seeking to advise clients, and indeed conspire with them, to unlawfully avoid their taxation obligations.  His sense of affront, in my view, was understandable. 

The Particular Issues The Case Raises – Did Mr F Forge The Documents Submitted To The Court?

1. The answer to this outrageous assertion can be put shortly.  I have heard and seen Mr F give his evidence.  He has roundly denied forging anything and I accept that evidence.  I note that Mr T’s report described Mr F’s signature, in any event, as being completely different to other signatures that Mr T was provided.

2. Not only was Mr F’s evidence given with complete conviction, but it makes sense.  Why would Mr F, for the small amount of fees he was charging for facilitating the consent orders before the Court, put his entire career at risk?  He would be committing the offence of forgery, he would have been conspiring against the interests of clients he had known for a long time and, as he rightly says in relation to the assertions that he improperly sought to assist the parties to minimise their tax, he was clearly aware of the unlawfulness of such a proposition and roundly rejected it.  Mr F’s denials are consistent with any objective analysis of the circumstances.  I repeat.  He did not forge anything.

Did Anybody Else Forge The Documents Submitted To The Court?

1. At this point, it is appropriate to turn to the paper trial that proceedings have produced.  It is plain from everything everyone says that the parties were moving towards some resolution of their financial affairs in 2016.  It is common cause that they executed the first set of proposed orders sent to Registrar Mastrovich on 22 December 2016.  This was after the husband’s aborted visit to Go To Court Lawyers earlier in December, which were concluded, at the very latest, by the email from Ms DD to Mr Pabst indicating the refund of his payment (CB-149).  It is also clear that this followed discussion about getting the properties nominally owned by A Pty Ltd to the parties free of stamp duty (see email from Mr F to the wife dated 1 November 2016, exhibit A-1, page 16).  Mr Pabst was plainly aware of these developments and appears to have been relatively keen to proceed (see emails 15 November 2016, exhibit A-1, page 45).  Mr Pabst’s attitude is further illustrated by his email to Mr F dated 12 December 2016 (exhibit A-2, page 82) where, in relation to his discussions with Go To Court Lawyers, he relevantly said:

   I really don’t give a toss.  Just want this over with.

2. Following receipt of the correspondence from Registrar Mastrovich dated 17 January 2017 rejecting the proposed minute of orders, Mr F wrote to V Associates on 30 January 2017 (exhibit A-2, page 86) explaining the values of $75,000 for each business, and the value of $580,000 placed on the houseboat and associated speedboats.  He also explained that the extra $300,000 received by the wife was directly related to the gift received by her of $200,000 from her parents, in relation to the purchase of Town C.

3. It is clear that on 1 March 2017, Mr F emailed Ms U saying (at exhibit “CB-21”):

   Finally, I have been able to get both parties to sign the documents presented.  I have attached a copy.  I will send three copies to you via priority overnight express.  Hopefully we can put finality to this part of the process.

4. The response from Ms U on the same day relevantly said:

   I will arrange to file the orders online.  I see that Mr Pabst has not signed the orders as director on behalf of the company on parts of the consent orders.  This may be an issue, but we can see how we go unless you can arrange for him to sign them in the next day.  We have until Friday to file the documents.

5. From this exchange, it is immediately and, in my view, conclusively apparent that Mr Pabst did indeed sign the 1 March 2017 orders in his personal capacity.  He failed, however, to sign each page in his capacity as a director of A Pty Ltd.  This, in my view, is entirely consistent with Mr Pabst’s approach to his affairs.  He has not lodged any tax returns since 2013, because he is concerned that when he does, he may have to pay tax.  He has sworn on two occasions that he did sign all of the documentation and only changed his position, so to speak, at a very late stage.  Even then, he has equivocated at time as to whether or not he in fact signed the documents.

6. He says he did not sign on pages “CB-122”, “124” and “125”.  In my view, what is far more probable than otherwise is that Mr F (whose evidence I make it clear I accept in any event) got Mr Pabst to come back again, and Mr Pabst signed the documents.  The fact that he in effect signed twice explains the inconsistencies referred to by Mr T. 

7. Even if I am wrong in this conclusion, and I firmly believe I am not, it is in my view in the ultimate a matter of no moment.  The fact is that Mr Pabst executed the 1 March 2017 orders in his own name, and plainly intended to be bound by them.  Indeed, he texted the wife relatively shortly thereafter, calling her a bitch and telling her to get on with it.

8. Put shortly, there was no forgery and no fraud, not only by Mr F but by anyone else.

9. I should make it clear additionally that I fully accept the wife’s evidence that she signed all the documents in the consent orders.  I have heard and seen her give her evidence, and I accept it.

Should the Agreement be Set Aside Pursuant to Section 79A on the Basis of Misrepresentations as to Values, and The Absence of Tax Liability?

1. Insofar as the agreement presented to Registrar Mastrovich was based on an assertion that the final excess allotted to the wife reflected her parents’ $200,000 contribution to the Town C property, I can state my conclusion straightforwardly.  Although the evidence is by no means wholly consistent (as solicitors on behalf of the wife had asserted that $135,000 was advanced (“CB-151”)) I have heard and seen the wife give her evidence.  I accept that she was separated from the husband at the time and he would therefore have had no direct involvement with the purchase of the Town C property.  Indeed, the husband’s own evidence as to this matter rises no higher than an asserted hearsay assertion made by the wife’s father.  I accept that the wife’s family contributed $200,000 towards the purchase and renovation of the Town C property.  The assertion that there was any misleading component in the draft orders and the explanation for them is one I reject (the $200,000 was also acknowledged in notation D to the orders ultimately submitted (“CB-124”)).

2. Notwithstanding some occasional vacillation by the wife in her evidence, I am satisfied that there were no material misrepresentations in any of the figures provided by the parties in the lead-up to and the execution of the final orders.  I accept that the figure given for loans may at one point have included both the debt on Town C and the line of credit as the wife said.  The values provided for the various properties and additionally for the boat and ancillary matters seem to me on the materials to be well within the range to the extent that there is one, and I have no doubt that the wife is correct to say that these values were agreed between them.

3. It is clear from the materials taken as a whole both parties wanted to bring this matter to a finality in late 2016, and into 2017.  There is a discernible measure of haste and eagerness to proceed, most particularly in the husband’s emails from time to time. 

4. Taken overall, one might well come to the conclusion that the responses to Registrar Mastrovich’s queries were designed to massage the matter through to finality when the parties between themselves had already agreed in principle what was going to happen.  The deal, as it was plainly envisaged by both the husband and wife was that she would retain the D Street, Suburb G property, the business (and her business carried on from it) and Town C.  The husband was to keep J Street, Suburb G and unit five, and his business.  He furthermore kept the houseboat and the ancillary chattels at Town L.

5. Notwithstanding that the ultimate outcome has about it something of a utilitarian air, I should make it clear again that I accept Mr F’s evidence.  The methodology on which he assessed the values of the business may ultimately have been flawed, but this was only because he was acting on such information as was given to him by the parties.  To the extent that the husband’s case rests on the supposition that the wife’s business was grossly undervalued, I reject it.  The wife has denied this and I accept her denial.

6. To the extent that there was any greater gain to the wife, I accept that this reflected the considerable benefit of the funds injected by her parents.  Furthermore, although these is no mention of it in any of the documents, the fact is that the wife still had the primary care of the two children of the marriage, who were by then in their mid to late teens.  Some adjustment might have been contemplated as reasonable in any event. 

Fraud

1. The husband’s written submissions place the impropriety of what is said to be a scheme to avoid the proper payment of tax at the forefront of their submissions.  It is submitted that Mr F (and potentially the parties – although they trusted and relied upon their long-time accountant) tried to avoid the proper payment of tax – which would be a miscarriage of justice.

2. I should make it clear, although one might perhaps have inferred this from what I said earlier, that I reject this assertion.  First of all, any question of impropriety in relation to taxation obligations is first and last a matter for the Australian Taxation Office.  Were I convinced of such misconduct, I would of course refer the matter to that office.  I am not in the slightest convinced that this was the case.  There is no proper basis for setting the orders aside even if there was a collateral endeavour to avoid taxation liability.  The proper course would be to refer the matter to the ATO.  However, and having said this, I find Mr F’s explanations about this question entirely believable, and indeed, they only make common sense.  First of all, Mr F has denied any improper conduct in the strongest terms.  He was plainly outraged by the proposition put to him.  I believe him.  Furthermore, the essence of what Mr F had to say about taxes generally was in my view credible.  This takes us to the third aspect of the alleged misrepresentation, namely the failure to take account of taxation issues in the terms of settlement.

3. It is clear that Mr Pabst’s taxation circumstances were far from clear in 2016 and 2017.  Indeed, they are similarly unclear even now in 2020.  He is not a man who takes the lodging of taxation returns in any way seriously.  Mr F described Mr Pabst as evasive and difficult in relation to taxation matters in his affidavit material, and he was not, as far as I can recall, challenged as to that assertion in cross-examination.  Mr F’s observations are consistent with the objective march of events.  The wife herself said that they proposed to sort out tax later on, when the husband had done his returns, but he has not.

4. To the extent that any question of taxation liability in terms of Ms B’s observations is concerned, once again I found Mr F’s explanations entirely credible. He said there were a number of matters that need to be known before there was any question of assessing how much tax might arise, and his scepticism as to whether there would indeed be any tax payable was, in my view, credible. To the extent that that there may be unforeseen consequences arising out of what may at some future point be taxation liabilities on the part of the parties, this arises essentially out of the husband’s own conduct. He must have been aware of the inadequacies in his taxation position in 2016 and 2017. It does not in any way engage as a matter attracting merit pursuant to section 79A.

The Conduct of the Lawyers

1. It is clear that the endeavour to resolve the parties’ financial position in 2016 commenced as a joint effort.  I accept Mr F’s evidence that he was go-between – or the “run-around man”, as he put it.  It seems that, towards the end of 2016, Mr F may have been becoming somewhat more aligned with Ms Pabst.  A number of his emails are addressed directly to her and only, as it were, copied or further provided to the husband thereafter.  They used V Associates, who were in effect Ms Pabst’s solicitors, although it would appear from the materials that Mr F may have used them from time to time as well.  It should be noted that both the husband and the wife had separate solicitors earlier in the piece.  The picture that emerges to me is that it was foreseen that the firm of V Associates would craft the draft orders.  Only thereafter was it apparent that Mr Pabst would need to be sent to see different solicitors.  As I find, this did not arise out of any kind of improper conduct on the part of anyone concerned.  Rather, the matter was proceeding in effect as a joint venture, but then the parties realised (or more accurately, more probably, their advisors) that in order to submit the orders to the Court, there would need to be independent legal advice for both parties.  The husband was quite properly referred to a firm of lawyers in Suburb EE, but he did not get on with them.  There was nothing whatever to prevent Mr Pabst getting independent legal advice.  He had already been told to do so.  To the extent that he failed thereafter to do so, that was entirely a matter for him.  I am not prepared to find, and indeed completely reject, that V Associates had a conflict of interest.  To the extent that they may have perhaps unwittingly acted for both parties, in my view nothing turns on this because the husband was indeed directed to get separate legal advice but failed to do so.

Whether Mr F Acted for Both Parties Improperly

1. It is clear that Mr F was indeed acting on behalf of both Mr and Mrs Pabst throughout this process.  Whether this amounts to a conflict of interest in accounting terms, I am not able to say, as no expert evidence has been led.  Nonetheless, the conduct of Mr F needs to be seen in context.  He was the long-term advisor of both Mr and Mrs Pabst.  They had socialised with him.  I would infer that they were personal friends.  They wanted him to arrange a deal whereby the split of properties could take place.  This involved, of course, exiting three properties from A Pty Ltd, something Mr F was keen to suggest they do in such a fashion as to avoid CGT.  The materials do not suggest that there was anything unlawful in this regard.  It was clearly to the benefit of both Mr and Mrs Pabst that this should be so.  It is clear that both parties wanted the agreement to take place, and indeed the husband subsequently acted on it by enabling the transfer of the J Street, Suburb G property into his own name and collecting the title documentation.  In my opinion, there is nothing improper in the conduct of Mr F.  Furthermore, it did not mislead the parties.  The business valuations came from what they told him, and while of course, as I have said, there is a utilitarian air to the fact that they are both valued at the same, this in fact reflected the deal the parties had in their own minds had already adopted – namely, that each of them would keep their own business.

Conclusion

1. These reasons for judgment are, it must be obvious, somewhat higgledy-piggledy.  They alight from area to area, perhaps, in a fashion that I would have preferred to have avoided.  Nonetheless, it should be noted that the emphasis in the case seemed to me to vary from time to time in the materials filed with the Court, the questions put to the witnesses and then the written submissions put.  I have endeavoured to traverse each and every complaint made by the husband, but it should be noted that I have not commented on each and every thing that the parties put before me.

2. It is important, perhaps, to stress at the end the overarching conclusion that I have reached and why it is that it militates so decisively against granting the husband the relief that he seeks.  I have no doubt whatsoever that the parties both wanted to resolve their financial matters in 2016.  It took a long time.  Both were keen to have it finished.  The deal they clearly came to was that I have already described, but which for completeness I will repeat.  The wife was to retain her home in D Street, Suburb G, her business, and the Town C property to which her parents had made so significant an initial contribution.  The husband was to keep the J Street, Suburb G factory and K Street, Suburb G, together with his very valuable houseboat and ancillary matters.  Each of them was to keep their business.  Each of the parties knew, at least in vague outline, that there were ancillary tax matters to be dealt with.  Each of them knew, of course, that their properties were to an extent (and the wife’s more considerably so) encumbered with mortgages, and the wife was to discharge the line of credit, something she has ultimately been able to do. 

3. Because the solicitors acting for the parties could not give both of them independent advice, the husband was referred to another firm of solicitors whose advice he did not obtain because he had a poor interaction with them.  He had no intention of getting further legal advice.  He elected not to do so. 

4. Registrar Mastrovich did not accept the original deal, and raised questions which were answered, in my view honestly, by Mr F.  This led to the final set of orders which were freely executed by both the husband and the wife.

5. What ultimately changed, of course, was the fact that the wife re-partnered.  One only has to look at the text messages that the husband sent the wife when he found out that she had re-partnered to see where he was coming from.  The emails in exhibit R1 show him desperately seeking in November 2019 to resuscitate his relationship with the wife, and her ultimately telling him that it was all over, and he should move on.  His application to this court was filed very shortly thereafter and I find that this was motivated by a sense of grievance in which the husband’s controlling personality played a considerable part. 

6. I should note finally, and I have overlooked it thus far, that the husband’s assertion that he never received the response from Registrar Matrovich is not one that I am prepared to accept.  This is partly because, having seen and heard him give his evidence, I do not believe him.  But it is buttressed by the objective facts.  The photographs at “CB-18” and “CB-19” show a freestanding set of post boxes at the front of the premises where the husband lives.  He says that he did not have mail delivered there because it was likely to be eaten by rodents or destroyed by weather.  These explanations, in my view, are fanciful.  Mr F says he always used that address for the husband, and I accept that evidence.  Whether he has received that letter and simply paid it no attention, or whether he has been untruthful, I am quite unable to say.  I think, given his general insouciance as to his affairs, and his eagerness to get the matter completed, it is more probable that he did receive it but paid it no attention.  In either event, such a letterbox would overflow with materials from time to time, with junk mail and the like.  It is just utterly improbable that the husband did not routinely clear it. 

1. In my view, despite the tenacity and skill with which the husband’s case has been pursued, in an overarching sense it is devoid of merit on all fronts.  The application will be dismissed.

I certify that the preceding one hundred and twenty (120) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate: 

Date: 20 November 2020