Niccolò Machiavelli is famous for his clever political plans in his book The Prince written in 1513.
This is the story of a modern day Machiavellian plan.
The scene is a restaurant bearing his name, Machiavelli Ristorante Italiano in Clarence Street Sydney.
The players are the restaurant manager and the investor.
The plot The players jointly purchased the restaurant for a price of $850,000, of which $450,000 was paid in cash to an associate of the seller, which the manager paid, and $400,000 was paid under a proper Contract, which the investor partly financed.
The business was awash with cash: the staff wages were paid in cash stuffed into envelopes, suppliers were paid in cash and the players paid $1,000 a week to each of their families in cash. They kept two sets of books - the tax books without the cash entries and the true books with the cash entries.
The players started to argue. The manager sidelined the investor by blocking online access to the financial accounts by making them read-only.
The Machiavellian Plan The investor decided on a plan to force the manager to buy him out for $600,000 by using the threat of liquidating the business as his bargaining lever. The manager refused. The investor went to court to ask the court appoint a liquidator claiming he was being oppressed because access to the financial accounts was restricted.
The result Justice Black was appalled by the cash transactions and the tax evasion. He decided not to help either the investor or the manager and refused to make court orders for a buy out or for the appointment of a liquidator. Justice Black would have referred the court file to the Australian Taxation Office had the parties not voluntarily disclosed the true position to the ATO before the hearing.
The moral The courts won't help people with Machiavellian plans if they are running a cash business.