A fracas is alleged to have broken out between the man, his wife and his lover in a nearby car park.
No one was injured but both a Ford Ranger and Ford Transit van were found damaged nearby as was a yellow Kia.
Police were called about 1pm on December 30 and a 58-year-old woman was arrested.
She was taken to Taree Police Station and was released without charge pending further investigation.
A 57-year-old man and a 40-year-old woman - believed to be the owner of the Kia - spoke to police at the scene but were not arrested.
A police source told Daily Mail Australia that the incident was "domestic".
A witness, who wished to remain anonymous, said the woman drove her 4x4 "head-on" into the husband's girlfriend's car.
The witness also claimed the wife assaulted both her husband and his mistress after they got out of their cars.