Justice Prevails: Court Orders Indemnity and Dismisses Corporate Claims in High-Stakes Family Financial Feud

🔍 Introduction

In Pacek & Saltzer (No 4) [2025] FedCFamC1F 252, the Federal Circuit and Family Court of Australia addressed complex intersecting issues of family and corporate law. Justice Wilson was called upon to enforce prior consent orders relating to indemnity and the execution of legal documents, while also determining the relevance of corporate indemnity prohibitions under the Corporations Act 2001 (Cth). The case brings to the fore a critical intersection of family law property proceedings and corporate governance, especially concerning director indemnities arising from court orders.

📘 Facts & Issues

Facts

• Ms Pacek (wife) and Mr Saltzer (husband) were engaged in complex financial proceedings post-separation.
• On 17 October 2024, the Court made orders requiring Mr Saltzer (both personally and as a director of multiple companies) to indemnify Ms Pacek and execute various documents.
• Despite ample opportunity, Mr Saltzer failed to execute the documents, prompting Ms Pacek to apply under s 106A of the Family Law Act 1975 for a Registrar to execute them instead.
• Two Supreme Court of Victoria proceedings initiated by Mr Saltzer’s companies against Ms Pacek were transferred to the Federal Circuit and Family Court.
• Mr Saltzer attempted to argue that s 199A of the Corporations Act 2001 invalidated the indemnities.

Legal Issues

1. Can a registrar execute documents in place of a party refusing to comply with court orders?
2. Does s 199A of the Corporations Act prohibit court-ordered indemnities from companies to directors?
3. Should the two Supreme Court proceedings be dismissed under r 10.22 of the Family Law Rules?

⚖️ Application of Law

1. Registrar Execution – s 106A FLA
2. Justice Wilson found that over five months had passed without execution of the required documents, and that Mr Saltzer had no genuine legal objection, but was rather obstructing the process. The Court held that the Registrar must execute the documents to enforce the 17 October 2024 orders.
3. Section 199A Corporations Act – Statutory Construction
4. Mr Saltzer’s late reliance on s 199A was scrutinised. Justice Wilson observed:

• s 199A prohibits indemnities for certain liabilities incurred as an officer of a company, but only where such liabilities are already established.
• No liability had been established against Ms Pacek.
• The indemnities arose from court orders, not voluntary corporate acts, and thus fell outside the mischief targeted by s 199A.
• The Court highlighted the distinction between public and private companies, and found that the policy rationale behind s 199A did not apply to family-controlled private companies such as those in this case.

1. Dismissal of Supreme Court Proceedings
2. The Court dismissed the cross-vested proceedings:

• The claims had been rendered nugatory by the orders for execution and indemnity.
• Keeping these proceedings alive would contravene the efficiency principles under s 95 of the Family Law Act.
• Dismissal was proper under r 10.22 of the Family Law Rules.

🧠 Judgment Analysis & Reasoning

Justice Wilson’s reasoning was firmly rooted in legal principle, procedural fairness, and judicial efficiency:

• The argument based on s 199A was not raised during the appropriate hearing on 30 September 2024, and thus fell afoul of the Metwally principle: that a party cannot introduce new legal arguments post-judgment absent exceptional circumstances.
• The Court stressed the need for compliance with consent orders and the binding nature of those orders once judicially endorsed.
• It dismissed the idea that corporate indemnity provisions could override a judicial order, affirming the supremacy of court-ordered resolutions in family property matters under s 90AE of the Family Law Act.
• The Judge cited numerous authorities, including Whitlam, Wallaby Group, and Sunbird Plaza, and traced the legislative evolution of indemnity law from English precedents through Australian reforms.

📌 Take-Home Lesson

This case underscores that:

• Parties to family law proceedings must comply with consent orders or risk judicial enforcement under s 106A.
• Corporate law provisions like s 199A of the Corporations Act cannot be opportunistically invoked to undermine family court orders post-factum.
• Courts will prioritise procedural fairness and the finality of litigation over late-emerging legal arguments.
• Family law courts have robust powers to enforce complex financial orders, even when they intersect with corporate obligations.