Roberts v Mawabe Pty Ltd

[2025] NSWSC 374

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Roberts v Mawabe Pty Ltd [2025] NSWSC 374

Hearing dates:

10 December 2024

Date of orders:

22 April 2025

Decision date:

22 April 2025

Jurisdiction:

Equity

Before:

Slattery J

Decision:

Orders made allowing expert evidence to be adduced by the plaintiff although the parties are encouraged to seek to agree to a single court-appointed expert to be appointed under UniformCivil Procedure Rules 2005 r 31.46. But the plaintiffs are directed to modify the questions proposed for the expert to take account of the reconciliations undertaken by the defendants. No amendment to pleadings required in the short term. Plaintiffs will be required to elect once the evidence is complete and before the matter is set down for hearing to (a) apply to transfer the proceedings to the Federal Circuit and Family Court of Australia, (b) commence proceedings in the Federal Circuit and Family Court of Australia and apply to transfer them to this court, or (c) eliminate the claim for relief under Family Law Act s 90K. Subject to further submissions (in respect of which the parties will be at risk as to costs) the order for costs of the present application will be that the plaintiffs’ costs of the application will be part of the plaintiff’s costs of the proceedings, if and only if, the plaintiffs are otherwise successful in the proceedings.

Catchwords:

CIVIL PROCEDURE — Expert evidence – Leave to adduce –– the first plaintiff is the former wife of the second defendant and the other 5 plaintiffs are their children – the first defendant is the corporate trustee of their family trust – the first plaintiff and the second defendant divorced in 2016 and their matrimonial property dispute resolved by agreement in 2017 – under that agreement certain payments were made to the plaintiffs and the second defendant took sole control of the first defendant trustee company – the plaintiffs claim that the first defendant has failed to pay distributions from the family trust that were due to them and payable between 2004 and 2021 – the plaintiffs allege that this nonpayment was part of a dishonest and fraudulent scheme made between the first defendant and the second defendant to unlawfully divert trust income that would otherwise have been distributed to the plaintiffs – defendants contend that the plaintiffs have received full payment of amounts due to them from the first defendant – accounting dispute about what income is due from the first defendant to the plaintiff and whether what income that is found to be due has been paid to the plaintiffs – contentious allegations in the plaintiffs’ and the defendants’ evidence about what is due to the plaintiffs and whether it has been paid – plaintiff applies for liberty to adduce expert evidence – choice of the best methodology to resolve the accounting dispute in accordance with the objectives of Civil Procedure Act 2005 Part 6.

CIVIL PROCEDURE — Pleadings — Amendment – proceedings within the jurisdiction of the Supreme Court for relief brought on behalf the beneficiaries in relation to the administration of a trust – defence pleads that the claim is not maintainable because of the 2017 settlement made and approved under Family LawAct 1975 s 90D and 90G – reply joins issue as to whether the 2017 settlement should be set-aside under the Family Law Act s 90K for fraudulent nondisclosure – issue raised of the Court’s own motion – whether an issue within the jurisdiction of the Federal Circuit and Family Court of Australia and not the Supreme Court should be struck out to avoid the raising of false issues at trial or whether it may be permitted on terms requiring the cross-vesting of applicable Family Law Act jurisdiction for the proceedings in this Court.

Legislation Cited:

Civil Procedure Act 2005, Part 6

Family Law Act1975 (Cth), ss 90D and 90G

Jurisdiction of Courts (Cross Vesting) Act 1987, s 5

Limitation Act 1969, s 48

Uniform Civil Procedure Rules 2005, rr 31.19, 31.46

Cases Cited:

Erceg v Erceg [2017] NZLR 320 and [2017] NZSC 28

Fisher v Nemeske Pty Ltd (2016) 257 CLR 615

Hancock v Reinhardt (2015) 13 ASTLR 1; [2015] NSWSC 646

Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 541

Rouse v IOOF Australia trustees Ltd (1999) 73 SASR 484

Schmidt v Rosewood Trust [2003] 2 AC 709

Stephens Travel Pty Ltd v Qantas Limited (1988) 13 NSWLR 331

Webster (Trustee) v Murray Goulburn Cooperative Ltd (No 3) [2020] FCA 990

Yeshiva properties No. 1 Pty Limited v Marshall (2005) 219 ALR 112; [2005] NSWCA 23

Category:

Consequential orders

Parties:

Margaret Denise Roberts (First Plaintiff)
Luke John Waller (Second Plaintiff)
Zachary Alan Waller (Third Plaintiff)
Joshua James Waller (Fourth Plaintiff)
Declan Leigh Waller (Fifth Plaintiff)
Rebecca Paige Margaret Waller (Sixth Plaintiff)
Mawabe Pty Ltd (ACN 109128832) as trustee for the Waller Family Trust (First Defendant)
Bernard Waller (Second Defendant)

Representation:

Counsel:
S Kelly (Plaintiffs)
D Grieve KC (Defendants)

Solicitors:
Wockner Lawyers (Plaintiffs)
RBHM Commercial Lawyers (Defendants)

File Number(s):

2021/226486

Publication restriction:

No

JUDGMENT

1. The first plaintiff, Margaret Roberts, and the second defendant, Bernard Waller were once married and are now divorced. Ms Roberts and Mr Waller had five children who are respectively the 2^nd to 6^th plaintiffs. The children are the beneficiaries of a discretionary trust of which the first defendant, Mawabe Pty Ltd (“Mawabe”) is the trustee.

2. By these proceedings Ms Roberts seeks to recover trust distributions which she claims accrued for the benefit of the children over various years between 2004 and 2020, but which she says have only been partly paid to them. Mr Waller and Mawabe contend that all trust distributions declared for the benefit of the children have been paid to them.

3. Two issues arise on the present application: whether in conformity with Supreme Court Practice Note Equity 5 and Uniform Civil Procedure Rules 2005 (“UCPR”) r 31.19 whether Ms Roberts is entitled to adduce expert evidence at this stage of the proceedings, given that the proceedings were commenced in 2021 and whether the pleadings need to be amended to present the real issues for determination.

4. The proceedings were argued on 10 December 2024. Mr S Kelly appeared by AVL from Queensland for the plaintiff instructed by Geoffrey Wockner of Geoffrey Wockner Partners. Mr D Grieve KC represented the defendants instructed by Michael James Horton of RBHM Commercial Lawyers. The present application arises out of the plaintiffs’ Request for Expert Evidence Directions under the practice note.

5. The background to the issues requires a short historical account of aspects of the divorce settlement between Ms Roberts and Mr Waller and the system of recording of the distributions which have been declared for the benefit of the children followed by reference to the pleaded issues and some of the present evidence in support of the respective cases of the plaintiffs and the defendants.

6. The pleadings have gone through several iterations. The current version of the Statement of Claim is the Fourth Amended Statement of Claim filed on 30 September 2024 but for convenience in these reasons it will be described as the Statement of Claim. Similarly, the first and second defendants’ Defence to the Fourth Amended Statement of Claim also filed on 30 September 2024 will be referred to as the Defence. The plaintiffs also rely upon a Reply, which although filed in November 2023 was treated by the parties as a Reply to the Defence.

A Divorce and Contested Distributions from Family Trust

7. Ms Roberts and Mr Waller were married in September 1996. He worked as an architect soon after their marriage. Ms Roberts had been working full-time as a teacher until the birth of their first child in 1999. They had five children between 1999 and 2008.

8. They were divorced in August 2016. Property proceedings under the Family Law Act took place between them, which settled in December 2017 ("the 2017 settlement"). This involved an agreement implemented by consent orders in the Federal Circuit Court of Australia (as it then was known). After his divorce from the plaintiff, Mr Waller remarried Ms Eomji Gu.

9. Soon after their 1996 marriage, Mr Waller commenced work as an architect with the Sydney architectural firm, Nettleton Tribe, which provides its professional services from business’ premises located in the North Shore of Sydney. Nettleton Tribe distributes remuneration and profits to its owners and employees through a trust structure comprised of two trusts. The first trust is the "Nettleton Tribe Practice Trust ("the NTP trust"), the trustee of which is Nettleton Tribe (Partnership) Pty Limited (“the NTP Trustee”). The second trust owns the business premises from which Nettleton Tribe practises. Fathom Investments Pty Limited is trustee of that trust, the Fathom Investment Trust No. 5 ("Fathom 5 Trust"). Mr Waller was a director of trustee of the NTP trust but not of the Fathom 5 Trust.

10. Mr Waller set up a family trust in June 2004 (“the family trust”) to receive distributions from the NTP Trust and the Fathom 5 Trust for himself and his family and for other family financial purposes. The first defendant, Mawabe Pty Limited ("Mawabe") was appointed trustee of the family trust, which is constituted by a trust deed dated 8 June 2020. Ms Roberts says as a practical matter Mr Waller administered this trust and was the author of its distributions for the family, whilst she committed herself to the raising of their children. The family trust was a discretionary trust, which empowered Mawabe to hold the trust fund for the beneficiaries both as to capital and income on trust for the beneficiaries.

11. As to capital, Mawabe held that capital on trust, "for such are the beneficiaries shall be living at the distribution date [so as defined] as the trustee in its absolute discretion shall determine and in such shares or proportions among them or to the exclusion of such one or others as the trustee shall determine and in default of determination equally among such of the first corpus beneficiaries as shall be living at the distribution date”.

12. As to income, Mawabe held on trust the “income derived in each financial year, for such of the beneficiaries as shall be living in such financial year is the trustee in its absolute discretion shall determine in each year and in such proportions among them or to such one or more of them to the exclusion of such other or others as the trustee may determine”.

13. In the financial years between the 2004 financial year ("FY 04") and the 2021 financial year (“FY 21”), the NTP Trust and the Fathom 5 Trust each declared that Mawabe was entitled to trust income. These trusts (called collectively for convenience called in these proceedings “the upstream trusts”) declared their income on an accruals basis to their beneficiaries, including Mawabe, and distributed that income on an accruals basis to those beneficiaries.

14. When the trustees of the upstream trusts declared Mawabe’s entitlements to income without paying those entitlements, the trustees of the upstream trusts accrued liabilities to pay the declared income distributions to Mawabe. Not all the income entitlements were paid either immediately, or in the same financial year as the upstream trusts had declared the income and distributed it on an accruals basis. The upstream trusts often, indeed mostly, paid the accrued distributions in financial years after the upstream trusts’ declarations of income and accrual of distributions to Mawabe.

15. One example of this will suffice. In in FY 04, the trustee of the NTP Trust declared distributions of $17,572.02, which was not paid that financial year but left an accrued balance owed to Mawabe of $17,572.02. In FY05, the NTP Trust declared an entitlement to income distribution of a further $19,314.95. But that year, FY05, only $16,354.65 was paid to Mawabe, leaving a balance due to Mawabe in FY05 of $20,532.32 (being $17,572.02 + $19,314.95 - $16,354.65). This process of deferred payment by the distributing trusts occurred throughout the whole period under examination from FY04 to FY21.

16. During the period between the upstream trusts’ annual declarations of Mawabe’s entitlement to income and the payment of that entitlement to Mawabe in later years, the upstream trusts recorded the unpaid balance as a loan of the unpaid balance to Mawabe. The upstream trusts are said to have paid that balance to Mawabe in later years.

17. Mawabe and Mr Waller say that in the various financial years when the upstream trusts declared and accrued income for the benefit of Mawabe that Mawabe also declared and accrued equivalent income for the benefit of the plaintiffs. Mawabe and Mr Waller also say that when the accrued income was paid by the upstream trusts to Mawabe in discharge of the upstream trusts’ loans to Mawabe, that Mawabe also ultimately discharged the loans that it had created for the benefit of the plaintiffs. Such loans to the plaintiffs reflected the balance from time to time of the income Mawabe had accrued for the benefit of the plaintiffs and the income Mawabe had paid to the plaintiffs.

18. Similarly, after Mawabe declared its beneficiaries’ entitlements to income, the income not immediately paid to the plaintiffs was recorded as loans from them. The defendants claim these loans were fully discharged in subsequent years.

19. The plaintiffs claim in these proceedings that Mawabe did not pay to Ms Roberts and the children all the income that Mawabe received from the upstream trusts. The defendants dispute this. The defendants appear to accept that all the income accruing to Mawabe and received by Mawabe from the upstream trusts should have been paid to the plaintiffs. They say that Mawabe first accrued all such income to the plaintiffs and subsequently paid all such income to the plaintiffs. They seek to demonstrate in a detailed affidavit sworn by Mr Waller on 15 March 2024 that Mawabe paid to or applied for the benefit of the plaintiffs all the monies which Mawabe received from the upstream trusts.

20. The plaintiffs contend that they did not receive all this income. They further contend that Mr Waller’s affidavit is not sufficiently clear to demonstrate that such income was paid, or applied, for their benefit. At a practical level this is the core contest between the parties. Whilst there are many sub contests about how this difference arises, this is one of the central issues to be resolved in the proceedings.

21. The plaintiffs’ Statement of Claim seeks by way of primary relief (prayer for relief 1) the following:

“The sum of the distributions of trust income made to the plaintiffs from the Waller family trust in the 2004 to 2021 financial years, but remaining unpaid, as money had and received.”

22. Should the underlying facts be established by the plaintiffs, the framing of the plaintiffs’ claim against Mawabe as one for money had and received is correct in law in the circumstances of this case. The general rule is that the beneficiary cannot bring a common-law action for money had and received against a trustee for monies to which the beneficiary is entitled, while the trustee retains trust duties to perform, because equitable defences and equitable set off remain available until completion of the trust: Fisher v Nemeske Pty Ltd (2016) 257 CLR 615 at [81] (“Nemeske”) and Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 541 at [67] (“Roxborough”).

23. But there is an exception to the general rule. A trustee such as Mawabe or the upstream trusts who admits having unconditional obligation to pay a specified amount of money to a beneficiary (such as after a declaration of income accrued in a financial year or in a discretionary trust) can become liable to a common-law action by the beneficiary to recover that amount as money had and received, the effect being to overlay the equitable relationship of trustee and beneficiary with the legal relationship of debtor and creditor: cf Nemeske at [105] and Roxborough at [67].

24. The many sub contests between these parties include issues such as the following: what exact distributions of accrued income were made by the upstream trusts; what amounts of accrued income were actually paid to Mawabe by the upstream trusts, and how and when; what residual shortfalls can be identified between declared and paid income from the upstream trusts; what accrued distributions of income were declared by Mawabe and did they match the accruals of income from the upstream trusts; what amounts of declared income by Mawabe were actually paid in full and whether and when any shortfalls have been made up; how to account for benefits claimed to have been paid to beneficiaries from a joint bank account with the Commonwealth Bank of Australia (CBA) containing mixed funds from the family trust, from Mr Waller and elsewhere; what tax was paid on behalf of beneficiaries of the family trust in various financial years.

25. One of the chief sources of contention between the parties is how to account for payments out of the joint CBA account. Mr Waller says in his affidavit evidence that he applied funds from that account for the benefit of Ms Roberts and the children and he has undertaken a detailed reconciliation based on his assertions that he has done so. The plaintiffs say that they cannot tell or test from the available evidence whether these funds were applied for their benefit and that Mr Waller’s reconciliations are really nothing more than mere assertion on his part. It may only be possible to test which of these contentions is true by some kind of sample audit of payments from the CBA account under the guidance of an expert.

26. Other complicating factors arise. The CBA account and other accounts into which funds were paid were mixed with Mr Waller’s salary and other cash flows related to him in the family. If the funds in the CBA account were indeed mixed trust funds and funds of Mr Waller or of other family members then the onus is upon him to separate out what is his from the trust funds: Stephens Travel Pty Ltd v Qantas Limited (1988) 13 NSWLR 331, at 346.

27. Then there is a question of as to whether the CBA account does constitute trust funds, or whether it is just a joint account administered by the married couple. This will be another issue at trial. At this stage Mr Waller’s affidavit evidence looks on the surface to be a reasonable attempt to explain and reconcile distributions from the family trust as being applied for the benefit of the plaintiffs in some detail. But without being able to test his reconciliations against the underlying primary accounting documents and materials to which his reconciliation refers it is difficult to decide where the truth lies in the assertion and counter assertion of these proceedings. That will ultimately a matter for a trial judge.

28. The other relevant allegations in the Statement of Claim and the competing contentions of the parties are discussed during the Court’s consideration below. In the broad, the parties positions are as follows. The plaintiffs seek to instruct the experts in accordance with a series of questions attached as annexure B to Mr Kelly’s submissions. The defendants will admit at most that an expert could be engaged to comment upon certain reconciliations that Mr Waller has done.

Consideration

29. A trustee such Mawabe is an accounting party. It is a fundamental obligation of the trustee to give the beneficiaries a full and candid account of their stewardship of the trust, including by the provision of appropriate financial accounts. The duty to account encompasses a duty to keep records, a duty to report to the beneficiaries or the Court and a duty to pay amounts the trustee is obliged to pay the beneficiaries: Hancock v Reinhardt (2015) 13 ASTLR 1; [2015] NSWSC 646 at [339].

30. In a discretionary trust the beneficiaries right to inspect trust documents and to an account rises from the trustee’s duty to properly manage the trust property and to keep the beneficiary informed and render accounts to beneficiaries: Erceg v Erceg [2017] NZLR 320 and [2017] NZSC 28. But a trustee has a general discretion to refuse to disclose information on the grounds that disclosure is not in the interest of the beneficiaries as a whole: Rouse v IOOF Australia trustees Ltd (1999) 73 SASR 484 at [100].

29. On this application the Court does not have to enter any contest about the obligations of a discretionary trustee to provide accounts and disclosure of documents. Mawabe’s approach has been more helpful here as Mr Waller has tried to provide an account through his affidavit of March 2024. The issue of disclosure by trustee of discretionary trusts is a vexed one and has been much debated in United Kingdom and Australia: see Schmidt v Rosewood Trust [2003] 2 AC 709 and Webster (Trustee) v Murray Goulburn Cooperative Ltd (No 3) [2020] FCA 990 (at [110]).

30. The Court has decided to allow the plaintiffs to call expert evidence. The plaintiffs have appropriately sought directions under the Uniform Civil Procedure Rules 2005 (“UCPR”), r 31.19 and notified their intention to adduce expert evidence at the trial and otherwise complied with Practice Note SC Eq 5 paragraphs [12] to [15].

31. The first criticism made by the defendants is that the plaintiffs’ application is very late, coming as it does in the second half of 2024 in proceedings that date from 2021. This criticism is not persuasive.

32. The delay in seeking directions under UCPR r 31.19 must be acknowledged. But it is not as though the parties have been sitting on their hands in this case. The last two years have been occupied with the parties drafting extensive affidavits about Mawabe’s accounts in an apparent endeavour in part to avoid the present course of engaging an accounting expert. Ms Roberts’ affidavit of 22 June 2023 is itself a very detailed document of 423 pages, of 241 paragraphs, which is supported by internal schedules and a large documentary exhibit (Exhibit MDR–1).

33. Mr Waller’s reply affidavit of 15 March 2024 is an equally detailed document which attempts to review and extract every relevant transaction, by reference to trust account and CBA and other bank statements. He has attempted to cross-reference, in his trust reconciliation, the date and number of the relevant bank statements into which monies have been paid or transferred. He annexes a substantial exhibit, Exhibit BW-1, and attempts to reconcile transactions against the materials in MDR-1. In reply in an affidavit dated 20 May 2024, Ms Roberts seeks to reply to Mr Waller’s 15 March affidavit.

34. Whilst the parties were undertaking this, they were not engaging independent accounting experts. Some of the delay can be attributed to that cause. But the parties’ work has been useful and could now be placed in the hands of an expert. Thus, delay is not an obstacle in this case to the Court to allowing expert evidence.

35. Secondly, the Court’s comparison of the competing affidavit evidence between Ms Roberts and Mr Waller raises the spectre of a final hearing being conducted with assertion and counter assertion about how various monies were applied by Mr Waller upon being distributed by Mawabe to and then from the joint bank account maintained by the parties at the CBA, among other contests. It is difficult to understand how a Court will be able to conduct a final hearing of these proceedings within any reasonable timeframe to resolve such issues based on objective evidence, when the assertions about the reasons for various expenditures are at times of a general nature on both sides. In order to manage the proceedings at final hearing, the Court is likely to benefit from expert accounting assistance to either:

1. reduce the volume of contests by assertion; or

2. organise the contest into clearly defined categories for decision.

38. This in some cases should be able to be done by cooperation between the lawyers for parties. But the way the materials are presented in this case it seems more likely that an accounting expert will have to undertake that task for the Court’s benefit. On the balance, the Court is likely to be assisted by the provision of such expert evidence.

39. Thirdly, the Amended Statement of Claim, in paragraphs [30] to [32], makes serious allegations of fraud and dishonesty against Mr Waller and Mawabe. The party making those serious allegations is offering to adduce expert evidence. The allegations of dishonest and fraudulent design do not descend to identifying which precise transactions are dishonest but speaks in generalities of not distributing accrued income, recording false loans, paying trust funds to persons other than beneficiaries, paying trust funds to Mr Waller, failing to pay distributions, and making false income tax deductions. In fairness to Mr Waller and Mawabe, given the extent to which they have sought to explain the affairs of the family trust in Mr Waller's 15 March 2024 affidavit, the case of dishonest and fraudulent design should be tied down more precisely.

40. An expert will be able to assist in sifting transactions that fall inside or outside this fraud case. Cases in equity, even claiming accessory liability on the grounds of dishonest or fraudulent design where dishonest knowledge is of central importance require a distinct statement of what is charged as with all allegations of fraud: Yeshiva properties No. 1 Pty Limited v Marshall (2005) 219 ALR 112; [2005] NSWCA 23. This further weighs in favour of allowing expert evidence.

41. Fourthly, there is a partisan lack of objectivity, as might perhaps be expected, in parts of Ms Roberts’ and Mr Waller's affidavits, such that the Court may later lack confidence in either of them as witnesses. The Court may be placed in the invidious position of having to embark on some accounting exercise itself. The Court should not be left at risk of being in that position without the benefit of expert evidence. The court envisages a trial judge been given an unreasonably onerous task unless expert evidence is available to the court. Expert evidence should be permitted for this reason as well. But the question arises as to what the scope of that expert evidence should be.

42. But the scope of the evidence should be narrower than the plaintiffs’ claim. The plaintiffs’ UCPR, r 31.19 request for expert evidence directions is so wide that it seeks an audit of the affairs of the family trust from 2004 to 2020. In Mr Kelly's submissions of 12 November 2024 an attempt was made to narrow the question to be put to the expert by reference to 7 questions, or questions generally to that effect. A difficulty with those questions is that they still take the approach of apparently ignoring Mr Waller's attempted reconciliations set out in his 15 March 2024 affidavit.

43. It is important that the work that Mr Waller has done, which is clearly substantial, should not be wasted. Large legal costs have been incurred on both sides in attempting to advance the evidence for the Court so far. The Court does will require the expert to expressly consider Mr Waller’s evidence somewhat in the manner that Mr Grieve KC submitted should occur. Mr Grieve KC raised the question of whether the Court should consider whether reconciliations contained in the exhibits to Mr Waller’s 15 March 2024 affidavit are correct and, if not in what precise respects they were in error. Whilst those precise questions need not be asked in the instructions to the expert who is engaged, the expert instructions should be modified to consider Mr Waller's reconciliations. Otherwise, the expert evidence will risk creating a battle of the experts, with Mr Waller calling his own expert. In other words it’s important that the expert engaged consider both sides accounting attempts.

44. That in turn leads to the question of whether if the questions are modified in a manner which the Court sets out in these reasons that it may be possible for the expert to become a Court-appointed expert under UCPR, r 31.46. But in default of that agreement the Court will allow Ms Roberts to call expert evidence provided the questions are modified to consider Mr Waller’s reconciliations. The orders below reflect this. If the parties cannot agree upon a reformulated set of questions to the expert then the Court will settle those questions for the parties. The directions below reflect this approach.

The Pleadings Raise a Jurisdictional Question

45. The Court’s examination of the pleadings to deal with the issue of expert evidence also led the Court to raise with the parties the following jurisdictional issue that arises from the pleadings. The issue was identified but not resolved during submissions. This section of these reasons makes directions about this jurisdictional issue, so it does not interfere with the orderly trial of the proceedings.

46. In Mr Waller’s Defence he pleads that Ms Roberts’ entitlements to make any claim of the type set out in the Statement of Claim was merged in proceedings in the Federal Circuit Court of Australia (as it was then known) (the “family proceedings") and an associated deed of agreement made between Ms Roberts and Mr Waller dated 11 December 2017 and consent orders. These are all part of the 2017 settlement. The defence says that the claims between Ms Roberts and Mr Waller are raise res judicata and subject to issue estoppel and estoppel by deed and were otherwise released by the deed and related consent orders constituting the 2017 settlement.

47. The Defence recites that Ms Roberts commenced the family proceedings in November 2016 in which she claimed 80% of the value of the assets of the family trust and claimed that all other assets of the marriage and property of the parties be divided so the wife receives a sum equivalent to an 80% share of that matrimonial property. The Defence recites that Ms Roberts said in her evidence that she did not know the value of the assets of the family trust at the time of the family law proceedings. Mr Waller's evidence placed a value on the family trust of a little under $900,000 and described some of the assets of the trust and its procedures.

48. The Defence gives particulars that the beneficiaries of the family trust had an average total income during FY16 (the last financial year before the conduct of the family law proceedings) of $14,971. The Defence gives particulars that the 2017 settlement consent orders required distribution of monies to Ms Roberts and the children some of which were sourced from the assets of the family trust and required Ms Roberts to be removed as a beneficiary and appointor from the trust. The Defence further pleads that in the 2017 settlement deed of agreement that the parties agreed as to how their "property, financial resources… and liabilities are to be divided between them" (Paragraph I of the 2017 settlement deed) and that they were satisfied after due enquiry made by each of them “that information given to the other concerning their respective financial affairs to children correct”: (Paragraph Y of the 2017 settlement deed).

49. The Defence further pleads (Paragraph 19) that if Mawabe owed money as trustee of the family trust to any of the plaintiffs, such monies were debt owed as a trustee and must have been taken into consideration when determining the value of the trust for the purposes of the 2017 settlement deed and consent orders (paragraph 19). 34   The Defence pleads that by reason of the December 2017 settlement agreement, Ms Roberts ceased to have any entitlement to receive (a) any further distribution from Mawabe and (b) any entitlement to be provided with information concerning the family trust.

50. The Defence further pleads

1. that the claims in the Statement of Claim are statute barred under Limitation Act 1969, s 48 to the extent that the claims are founded on acts or omissions occurring more than six years prior to the filing of the Statement of Claim

2. that no distributions were paid to the children by Mawabe for FY17 to FY21 but that all entitlements of Ms Roberts and the children arising from any distributions which had occurred up to and including FY16 and the 2017 settlement will "have been applied for that to the benefit of such plaintiffs”.

3. that Ms Roberts acknowledged expressly that she had received all information concerning distributions from the family trust and that she and the children are estopped from denying (as they do in these proceedings) their receipt of benefits from Mawabe, by reason of (a) the terms of the 2017 settlement agreement and (b) the related detriment suffered by Mr Waller and Mawabe in arranging to fund the 2017 settlement agreement.

51. Building on these defences, the Defence pleads that by the operation of the Family Law Act 1975 (Cth), ss 81, 90B, and 90G and the Family Law Act generally, that Ms Roberts has through the 2017 settlement exhausted her rights against Mawabe and Mr Waller under the Family Law Act and that she has not raised any challenge to the 2017 settlement deed and consent orders within the time period allowed for challenge under the Family Law Act. The Defence contends she has thereby waived any right she may have had to claim against the financial resources of Mr Waller.

52. The Reply answers the Defence by relying upon the substantive plea of Mr Waller’s alleged involvement in a dishonest and fraudulent design, which is pleaded in the Statement of Claim. The Reply pleads that

1. the matters at issue in the present proceedings were not at issue in the family proceedings as they were hidden from Ms Roberts as part of the defendants’ dishonest and fraudulent design,

2. the 2017 settlement entered pursuant to Family Law Act s 90D was obtained by fraud and nondisclosure of material matters and unconscionable conduct by the defendants and is liable to be set aside pursuant to Family Law Act s 90K,

3. disputes that the effect of the 2017 settlement was to prevent Ms Roberts from having any entitlement to distributions from Mawabe,

4. but if the 2017 settlement on its proper construction was to prevent Ms Roberts from having entitlement to receive distributions from Mawabe, it was an implied term of the 2017 settlement that a dishonest and fraudulent design to conceal information from her would not prevent Ms Roberts from receiving future distributions from Mawabe

5. the limitation period defence is contested on the basis that the information constituting the plaintiffs’ cause of action was concealed by the defendants as part of the alleged dishonest and fraudulent design, which included the alleged concealment of information.

53. The Reply suggests that the plaintiff may seek to set aside the December 2017 settlement under the Family Law Act by the exercise of jurisdiction conferred on the Federal Circuit Court and Family Court of Australia. That plea will not be able to be entertained in these proceedings in the Supreme Court as they are presently constituted. Unless these proceedings are reconstituted this pleading must either be relinquished or struck out in the Supreme Court because this Court does not have jurisdiction to grant relief under Family Law Act s 90K. And it is highly undesirable for separate proceedings to take place in two jurisdictions dealing with the same issue of fraudulent nondisclosure at the time of entry into the 2017 settlement. The Court needs to know, even for accounting purposes, whether the 2017 settlement is binding or not.

54. If the plaintiffs wish to press the contentions in the Reply to set aside the 2017 settlement, they must either (a) seek to transfer these proceedings to the Federal Circuit and Family Court of Australia under the Jurisdiction of Courts (Cross Vesting) Act 1987 s 5, or (b) apply to revive the proceedings between Ms Roberts and Mr Waller in the Federal Circuit Court and Family Court of Australia and transfer an application to set aside the 2017 settlement into this Court to be heard with these proceedings.

55. This issue should not be allowed to languish, but it need not be addressed immediately. It may be that as the evidence and issues in these proceedings are refined that this Reply pleading does not need to be pursued further. The expert evidence should be allowed to be called and the matter reviewed at that point. But the Court will direct that before these proceedings are set down for hearing, if appropriate jurisdiction is not conferred upon the Supreme Court, that the plaintiffs will be required to elect whether they wish to rely upon paragraph 5(d) of the Reply.

56. Should the plaintiffs elect to continue to maintain their case based on upon paragraph 5(d) of the Reply and if they otherwise satisfy the requirements set out here for doing so, they may need to amend the Reply in any event. A claim to set aside an agreement such as the 2017 settlement should not be in a Reply but because it claims relief it should be contained or repeated in some initiating process.

Conclusions and Orders

57. The Court has considered what is an appropriate order for costs given the result of this application. The plaintiffs have had a measure of success, and the Court has granted them leave to adduce expert evidence. But it was not unreasonable of the defendants to oppose that course as the cost effectiveness of that course is doubtful, when the defendants have attempted to explain Mawabe’s accounts for period in contention. The fair and appropriate order seems to the Court therefore to be one in which the successful party in these proceedings (whoever that might be) should be able to recover the costs of the present application but not otherwise. But the Court has not heard the parties on this question. If any party wants to contest that costs outcome that party will have 14 days to do so at that party’s risk as to costs.

58. For these reasons the Court makes the following orders and directions:

1. GRANTS leave to the plaintiff to adduce expert evidence based substantially upon the questions proposed by the plaintiffs but modified to require wherever possible the expert to utilise and comment upon the accounting reconciliations undertaken by Mr Waller and annexed to his affidavit of 15 March 2024;

2. DIRECTS the parties to endeavour to agree upon the questions to the expert pursuant to (1) and whether the expert should be appointed under UCPR r 31.46 and if they cannot agree within seven days the Court will settle the questions in accordance with these reasons;

3. DIRECTS that when the Court is considering setting these proceedings down for hearing the plaintiffs will be required to elect whether they will to continue to maintain their case in this Court based on upon paragraph 5(d) of the Reply and they may only maintain such a case on the basis that appropriate jurisdiction to do so is conferred on this court by applications made under the Jurisdiction of Courts (Cross Vesting) Act 1987 s 5;

4. ORDERS that each party’s costs of the present application will be that party’s costs in the proceedings, unless either party applies within 14 days for a different costs order; and

5. GRANTS liberty to apply.

Amendments

23 July 2025 -

[10] deleted "2024" and inserted "2020"

[13] capitalise "NTP [T]rust"

[18] amended to read "recorded as loans from them"

[24] typographical error

[31] amended last sentence to read "The issue of disclosure by trustees of discretionary trusts..."

[39] amended first sentence to read "the Amended Statement of Claim..."

[44] typographical error

[45] second sentence, inserted "was"

[51] first sentence, amended to read "...she has not raised..."

[51] second sentence, amended to read "The Defence contends she has..."

[53] second sentence, amended to read "... these proceedings in the Supreme Court as they are presently..."

[53] last sentence, insert commas

[55] second sentence, amended to read "...allowed to be called and the matter..."

[57] fourth sentence, typographical error and amended to read "... party in these proceedings"

[57] last sentence, typographical error.

Decision last updated: 23 July 2025