New South Wales District Court CITATION: Stojkov v Predojevic as executor of the estate of the late Predojevic [2010] NSWDC 225 HEARING DATE(S): 16 August 2010 - 18 August 2010 JUDGMENT DATE: 7 October 2010 JURISDICTION: District Court - Civil JUDGMENT OF: Sidis DCJ 1) Verdict for the defendant. DECISION: 2) The plaintiff is to pay the defendant's costs of the proceedings. This order is suspended for a period of seven days to allow either party to relist the matter for argument on the issue of the appropriate basis upon which costs are to be assessed. 3) The exhibits are returned. CATCHWORDS: UNDOCUMENTED LOANS - Plaintiff claimed loans made from time to time - No loan agreement - Alleged borrower deceased - Requirement for careful scrutiny of plaintiff's evidence in such circumstances - Credit - Loans beyond the plaintiff's financial means - Improbability - Other rational explanations for payments made CASES CITED: Young v Queensland Trustees Ltd (1956) 99 CLR 560 PARTIES: Mile Stojkov (Plaintiff) Mirjana Predojevic as executor of the estate of the late Milan Predojevic (Defendant) FILE NUMBER(S): 2008/00314682 COUNSEL: Mr J Atkin (Plaintiff) Mr T Saunders (Defendant) SOLICITORS: Michael Evers & Co Solicitors & Attorneys (Plaintiff) UTR Law (Defendant) JUDGMENT 1 Mr Mile Stojkov claimed that he lent money to the late Mr Milan Predojevic between 2002 and 2005 in various payments totalling $247,500. He brought proceedings against Mrs Mirjana Predojevic, Mr Predojevic's widow and executor of his estate, to recover this sum with interest. 2 Mr Stojkov claimed that he lent the money from time to time at Mr Predojevic's request for the purposes of the business that Mr Predojevic conducted under the name Teralba Auto Wreckers on a property in Racecourse Road, Teralba. The business involved the purchase of old cars and the resale of car parts and scrap metals. 3 Mrs Predojevic rejected the claim, alleging that the payments were made by Mr Stojkov to Mr Predojevic in the course of their business relationship that involved the lease for a period of time of accommodation on the Racecourse Road site, the purchase of scrap metal for the purpose of Mr Stojkov's scrap metal business and the purchase by Mr Stojkov of second hand cars from Teralba Auto Wreckers. The business relationship 4 It was alleged that the business relationship between Mr Stojkov and Mr Predojevic was conducted with varying degrees of formalityi. There was no written agreement or other document that recorded any loan transactions involving the two men. 5 Mr Stojkov agreed that, aside from the alleged loans, there were three elements to his business relationship with Mr Predojevic and Teralba Auto Wreckers. 6 In 1999 he commenced business trading in scrap metal under the name Stojkov Scrap Metal. The business involved the purchase and sale of metals that he acquired from street collections, auctions and from Teralba Auto Wreckers. He sold the metals he collected to metal processors. 7 In 2002 he paid Teralba Auto Wreckers $35,000 for the right to collect non ferrous and specific ferrous materials from the premises at Racecourse Road, Teralba for a two year period from 30 July 2002 to 30 July 2004. This arrangement was documentedii and signed by Mr Stojkov and Mr Predojevic. The contract allowed Mr Stojkov unhindered access to the wrecking yard and use of various tools for the purpose of removal of materials that he was permitted by the contract to collect. 8 In August 2002 Mr Stojkov separated from his wife and moved into accommodation that was available at the wrecking yard. He lived there for a period of about four years, paying rent of $800 per month initially and subsequently $1,000 per month. 9 During the term of the business relationship, Mr Stojkov purchased a number of second hand cars from Teralba Auto Wreckers. On occasions Mr Predojevic bought cars for him at auctions. Mr Stojkov appeared to be a prolific purchaser of motor vehicles. Ms Chape, an administrative assistant, employed by Teralba Auto Wreckers, attached to her statementiii copies of 13 forms, required to be completed under the Roads and Traffic Authority Motor Dealer Act, recording sales of cars between 2001 and 2004 to Mr Stojkov. The loan transactions 10 Mr Stojkov, Mr Predojevic and Mrs Predojevic were all migrants to Australia from Serbia. Mr Stojkov met Mr Predojevic in about 1999. He said he developed a friendship with him. 11 Mr Stojkov said he first lent money to Mr Predojevic in late 1999 or early 2002 for the purpose of meeting a debt to the Commissioner of Taxation. The amount involved was $5,000. 12 Mr Stojkov gave details of subsequent payments he claimed he made to Mr Predojevic as loans between 2002 and 2005. Some of these payments were made with cash and others funded through his credit card account. 13 As to the terms upon which money was lent, Mr Stojkov said that Mr Predojevic promised to pay interest at the rates of interest charged to him on his Visa credit card account. Repayment was initially to be made within one to two months but as the time progressed Mr Predojevic said he would repay Mr Stojkov when he sold his business or developed and sold the Racecourse Road site. Mr Stojkov said he believed that Mr Predojevic had the capacity to repay the money he lent him because he arrived in Australia as a refugee and subsequently accumulated sufficient money to operate a successful business and acquire property including a home at Belmont. 14 There was no written contract between Mr Stojkov and Mr Predojevic concerning the loans. There was no written record of the payments allegedly received by Mr Predojevic or their purpose. Mr Stojkov said he saw Mr Predojevic record in his handwriting the payments he made but no such record was in evidence. 15 Mr Stojkov relied upon a number of conversations with Mr Predojevic, allegedly witnessed by Mrs Predojevic or her son Mile Predojevic. He relied on financial records of the business Teralba Auto Wreckers that recorded loans from him in 2002 and 2003 and on payments made to truck drivers, allegedly at the request of Mr Predojevic. He produced as evidence of payment copies of his credit card account statements that recorded payments to Teralba Auto Wreckers and other cash transactions totalling the amount he claimed was owed to him. The conversations 16 Mr Stojkov said the initial loan of $5,000 was made in late 1999 or early 2000iv at a time when Mr Predojevic was in debt to the Commissioner of Taxation. Mr Stojkov said Mr Predojevic told him that he would have to close the business if he did not have the funds to pay this debt. He said Mrs Predojevic was present at the time this request for a loan was made. This $5,000 loan was repaid within about one month and was not the subject of the claim. 17 In support of this part of his evidence Mr Stojkov relied on a letterv from Lambourne Partners, chartered accountants, to the Deputy Commissioner of Taxation dated 6 February 2002 referred to a tax debt and sought an extension of time for payment. The date of this letter and its reference to a tax obligation for the 2001 year indicated that it did not relate to the loan allegedly made in 1999 or 2000. 18 Mrs Predojevic denied that she was present at or a party to any conversation in the terms alleged by Mr Stojkov. She recalled a conversation in which Mr Predojevic asked for $5,000 after Mr Stojkov said he wanted a car or car parts. Mr Predojevic said he would return the $5,000 if he was unable to find a car. Mrs Predojevic said she was closely involved with the business of Teralba Auto Wreckers while Mr Predojevic was alive. She was aware of the 2002 tax debt but said Mr Predojevic paid it in instalments and that he would not borrow to pay it. 19 Mr Stojkov's wife, Mrs Vesna Stojkov said she was present at the Predojevic home at Elermore Vale with Mr Stojkov, Mrs Predojevic and Mr Predojevic. She said that when they were all present, Mrs Predojevic and Mr Predojevic separately expressed their gratitude for money lent by Mr Stojkov. She said she thought this conversation occurred at about the time of Orthodox Easter in 2002. 20 Mrs Predojevic denied that any such meeting took place. She said that the home at Elermore Vale was sold in June 2000 to purchase the Racecourse Road site and that she and her family lived at Racecourse Road until they moved to their home in Belmont in May 2002. She said Mrs Stojkov never came to the Belmont home. 21 The second conversation relied on by Mr Stojkov was said to have taken place on the premises of Teralba Auto Wreckers in 2005 or 2006. By this date Mr Predojevic was suffering from the advanced stages of bowel cancer and Mile Predojevic, his son, was becoming more involved in the business. 22 Mile Predojevic said he asked Mr Stojkov and Mr Predojevic: Is everything clean between you two?vi. Mr Stojkov initially agreed that he and Mr Predojevic both responded: Yes. He subsequently altered his evidence to state that his response was: Yes and no. 23 Mr Stojkov claimed that the conversation took place as he walked with Mr Predojevic from the office to a shed on the premises, with Mile Predojevic following behind them. He said he told Mr Predojevic that he should tell Mile Predojevic about the money that he lent him. Mr Predojevic's response was that he did not wish to put pressure on his son and he did not wish to tell him. When Mile Predojevic asked whether he owed money to Mr Stojkov, Mr Predojevic reassured him and said: Everything will be clean between us.vii Mile Predojevic asked him if that was correct and it was at this point that Mr Stojkov replied: Yes and no. 24 Both Mrs Predojevic and Mile Predojevic disputed this evidence. They said Mrs Predojevic was present when the conversation took place in the office of Teralba Auto Wreckers at Racecourse Road. They said that at the time of the conversation Mr Predojevic was too ill to walk the distance from the office to the sheds in the yard of the premises and that after the conversation took place he walked to a desk and sat down. 25 All parties agreed that the term clean was understood in Serbian to mean that there were no outstanding debts. 26 Mr Predojevic died in December 2007. Mr Stojkov said he expected to hear from his family concerning the repayment of the loan. Having not heard from them, he met with Mrs Predojevic and Mile Predojevic about three months after his death and told them his purpose was to finalise matters. He told them he was owed over $200,000. He claimed that Mrs Predojevic said she thought everything had been settled and that there were no documents. She said she needed to check the situation with the book keeper engaged by Teralba Auto Wreckers, Mr Slobodan Jankovic. Mr Stojkov claimed that Mile Predojevic acknowledged that his father said he owed him $200,000 but that he was not involved and he wanted nothing to do with it. 27 Mrs Predojevic and Mile Predojevic agreed that a meeting took place but disputed the terms of the conversation as stated by Mr Stojkov. They claimed that Mr Stojkov said Mr Predojevic borrowed $475,000 from him and that when Mile Predojevic reminded him of the conversation in which Mr Stojkov agreed that everything between him and Mr Predojevic was clean, he said they should give him $270,000. 28 Mr Stojkov in his second statementviii said that he told Mrs Predojevic and Mile Predojevic he was owed more than $400,000 including interest and that without interest the sum owed was $275,000. The financial statements of Teralba Auto Wreckers 29 The balance sheetix for the business operated under the name Teralba Auto Wreckers for the financial year ended 30 June 2002 showed a loan from Mr Stojkov of $55,000 as a non-current liability. The balance sheetx for the year ended 30 June 2003 showed a loan from Mr Stojkov of $78,500. 30 Mr Stojkov claimed that these records, although inaccurate as to the amounts owed to him, were evidence that he in fact lent money to Mr Predojevic. Mrs Predojevic could not explain these entries in the accounts of the business and Mile Predojevic said that he was not involved with the financial accounting of the business in the 2002 and 2003 tax years. 31 Mr Slobodan (Sam) Jankovic was employed part time as the book keeper for the business from 2000. He attended at Teralba Auto Wreckers' offices once a week and collected invoices and sales dockets in order to reconcile the accounts. These materials were then provided to Ms Michelle Brough, a certified practising accountant retained on his recommendation to prepare the annual financial statements for the business. 32 Mr Jankovic said that the sums of $55,000 and $78,500 represented money paid in advance by Mr Stojkov for scrap to be provided over a two year period. He said Mr Stojkov paid small amounts from time to time in advance for scrap metal that he collected when it suited him. He was not asked to provide invoices for these payments. He said Mr Predojevic told him that the 2002 contract provided for the sale of scrap by the kilogram or tonne. 33 Mr Jankovic said Ms Brough advised him to record the amounts as liabilities and to reverse them, which he did when Mr Predojevic told him that the agreement had come to an end. He then recorded the transactions as sales of the business. These sums, he said, were also included in business activity statements for the purposes of assessment of liability for goods and services tax. 34 Mr Jankovic was not able to explain the differences between the figures shown in the financial accounts and those Mr Stojkov claimed he paid by way of loan. He said that at times there was a deficit in the cash account of the business because Mr Predojevic gave Mr Stojkov cash on his credit card. 35 Some working papersxi of Brough Business Accountants dated July 2004 were in evidence. Against reference to the loan of $78,500 recorded in Mr Stojkov's name in the 2003 accounts, there appeared in handwriting the note: scrapsale.pd nil. Another document relating to Mr Stojkov's loan contained the note: Paid out per Sam. 36 Mr Jankovic agreed that the reference to Sam was to him and that it was probable that he provided the information recorded on those working papers. He denied that the handwriting was his. 37 Ms Brough did not give evidence. Mr Jankovic said he learned about six months prior to the hearing that she was living with her family in Spain. He did not make any further inquiry concerning her whereabouts. 38 The financial statements of Teralba Auto Wreckers for the following years made no reference to any loan from Mr Stojkov. The credit card statements 39 Mr Stojkov produced statementsxii for his credit card account with Westpac for the period March 2002 to February 2004 and February 2005 to March 2005 on which he highlighted transactions involving Teralba Auto Wreckers or cash withdrawals. He claimed that these entries totalled the sums he lent Mr Predojevic, subject to some adjustments for payments he conceded related to amounts paid pursuant to the 2002 contract or other business transactions. The arguments 40 Mr Stojkov argued that, having established through these materials that he lent money to Mr Predojevic, legal authorityxiii demanded that the defendant establish that the loan was repaid. He claimed that, in the absence of evidence that the loans were discharged by payment or sales of scrap, he was entitled to succeed on his claim. 41 He pointed out that the evidence relating to the cancellation of the loans appearing in the 2002 and 2003 accounts was oral and not supported by any primary business record of sales of scrap to him, such as invoices or ledgers. The only written record of transactions with Mr Stojkov was the 2002 contract in respect of which there was clear evidence of payment of the price of $35,000 referred to in the contract. 42 It was claimed that I should infer from her absence that Ms Brough's evidence would not assist the defendant. 43 An invoicexiv for $55,000 for sales between 1 June 2004 and 30 June 2005 could not be explained by any witness and was described by Mr Stojkov's counsel as curious. Ms Chape said she prepared the invoice at Mr Predojevic's request. She said she thought it dealt with sales for the 2005 financial year, although it was dated 1 June 2005. However, Mr Stojkov produced recordsxv of eftpos transactions that took place between May and July 2004 in sums that totalled $55,000. Mr Stojkov claimed therefore that the invoice did not provide evidence of loan repayments. 44 I considered that Mr Stojkov advanced too rapidly to the point of claiming that the evidence established that the loans were made as claimed. The first step to be taken, as pointed out by counsel for both parties, was to scrutinise Mr Stojkov's evidence carefully because it could not be tested against the evidence of Mr Predojevic. 45 Regretfully, much of his evidence did not withstand that scrutiny. In some cases, I rejected the evidence as untrue. In others I considered it improbable and in others, in the absence of independent corroboration, it was equally consistent with other rational hypotheses. Credit 46 Mr Stojkov drew attention to some aspects of the evidence provided in defence of the claim in arguing that I should prefer his evidence to that of Mrs Predojevic and Mile Predojevic. Although there were some deficiencies in the evidence provided in defence of the claim, there was much in Mr Stojkov's material to indicate that he was not honest in his evidence to the Court. 47 There was evidence of direct dishonesty on the part of Mr Stojkov as well as Mrs Stojkov. Although Mrs Stojkov attempted to minimise the discussion between them, it was clear from Mr Stojkov's evidence that they colluded in the preparation of her statement. Unfortunately, they provided the wrong address at which the conversation was claimed to have taken place. Mrs Stojkov initially attempted to overcome this difficulty by stating that the conversation took place in 2000 and not 2002. 48 I placed no reliance therefore on Mrs Stojkov's evidence concerning this conversation. Even worse, it cast doubt on Mr Stojkov's honesty generally. 49 Mr Stojkov and Mrs Stojkov consulted solicitors concerning a property settlement as a consequence of their separation. An application for consent ordersxvi made to the Family Court was completed and Mr Stojkov swore to the truth of its contents on 10 October 2005. He claimed that all loan payments were made by March 2005. There was no reference in the application to the loan of $247,500. Mr Stojkov was unable to explain its omission. Mrs Stojkov said she understood that at the time of the property settlement the loan amounted to $5,000. Mr Stojkov said he disclosed to his wife a loan of $100,000. 50 There were several inconsistencies in Mr Stojkov's evidence. 51 He said he lent the initial sum of $5,000 in 1999 or 2000 but relied on a letter dated 2002 about a tax debt incurred in 2001 as evidence in support of that loan. This inconsistency was the likely cause of the confusion in the evidence called from Mrs Stojkov. 52 I have already noted the change in his evidence concerning his response to Mile Predojevic's question as to whether all was clean between him and Mr Predojevic. 53 Mr Stojkov, when asked why, in response to requests for production of his business records, he produced no tax invoices for scrap metals he purchased from Teralba Auto Wreckers between 1999 and 2004, said he purchased no scrap until 2004. This was entirely inconsistent with earlier evidence and the contract for the supply of scrap in 2002 and 2003. 54 Mr Stojkov subsequently said he could produce records for scrap purchased between 1999 and 2004. He produced only two taxation recording booksxvii for part of the 2004 and 2005 years. 55 Mr Dederer and Mr Ristic were both drivers of vehicles that picked up cars that were purchased by Mr Predojevic at auction. Mr Stojkov said that on many occasions they came to him for money that they said Mr Predojevic sent them to get to pay for cars he bought at those auctions. Both denied that they did so. 56 In Mr Dederer's case Mr Stojkov said he gave him probably $1,000 on one occasion in the morning prior to an auction, probably in 2003. He kept no record of the transaction. He said he felt sad for Mr Dederer because he forgot the transaction. Mr Dederer said that on no occasion was he asked by Mr Predojevic to obtain cash from Mr Stojkov and on no occasion did he do so. He said he never attended at auctions, although he sometimes took cheques to the auctions. 57 Mr Stojkov said he gave Mr Ristic about $2,000 on one occasion in 2003 or 2004. This was money that Mr Predojevic wanted to purchase cars. He did not tell Mr Ristic he was lending it to Mr Predojevic. He said Mr Ristic probably forgot about it. 58 Mr Ristic denied ever collecting money from Mr Stojkov or being asked by Mr Predojevic to do so. He said Mr Stojkov never told him that he lent money to Mr Predojevic. He said he did not attend the car auction sales and he was never present when Mr Predojevic purchased cars at auctions. Improbable evidence 59 Mr Stojkov said he did not require the loan transactions to be recorded in a formal written agreement. He claimed that his relationship with Mr Predojevic was close and that Mr Predojevic was like a father to him. He therefore trusted him. There were two aspects of the evidence that rendered this attitude to the loan transaction improbable. 60 Firstly, the contract for the supply of certain metals over a two year period was documented. Mr Stojkov said that an associate of Mr Predojevic offered to prepare a document for them. I considered it improbable that the parties would go to the trouble of preparing a written contract involving the sum of $35,000 but leave undocumented the terms of loans that totalled $247,500. 61 Secondly, the evidence of Mr Blek, the car yard manager employed in 2003 was that Mr Predojevic did not trust Mr Stojkov. His statementxviii read: 10. On a number of occasions Milan said to me (about Stojkov) words to the effect "He's not trustworthy. Don't allow him anywhere without you". 11. On one occasion Milan said to me "Don't let the 'Gypsy' out the back". The "Gypsy" was a nickname Milan used for Stojkov. On a number of occasions during the day I found Stojkov out the back in areas of the yard that Milan did not want Stojkov to go to unsupervised. On each occasion I would say to him words to the effect "Why do you do this to me? You know you have been asked not to be here?" I recall on one occasion Stojkov replied: "Milan owes me", to which I said "If that's so, then how about we go and speak with Milan about it". In response Stojkov said words to the effect "No, its fine". 62 Mr Stojkov agreed that at times Mr Blek went with him into the car yard and counted parts that he collected. He felt that Mr Blek did not trust him. He agreed that he went unsupervised into the back area of the car yard against Mr Predojevic's directions. 63 Mr Stojkov agreed that told Mr Blek that Mr Predojevic owed him. He said he did not take up Mr Blek's suggestion that they go to speak with Mr Predojevic about it because Mr Predojevic did not want anyone to know about the loan transactions. If it was true that Mr Predojevic wanted to keep the loan transactions confidential, Mr Stojkov agreed that he breached this confidentiality. This explanation therefore could not be accepted. 64 His evidence concerning the basis on which he was to be repaid was confused. Initially he said repayment was to take place within one or two months. Subsequently he said Mr Predojevic told him he would repay him when he sold the business or his land. There appeared to have been no demand for payment, even in the face of failure to make any repayments or payments of interest and no attempt to regularise the relationship of lender and borrower when it was apparent that Mr Predojevic was suffering from a terminal illness. 65 Aside from the two taxation record books, Mr Stojkov produced no records concerning the source of an income that would permit him to lend the not inconsiderable sum of $247,500 to Mr Predojevic. In 2002 he owned a house at Charlestown jointly with Mrs Stojkov that was subject to a mortgage. The Family Court application indicated that its value in 2005 was $280,000. He had three dependent children. Mrs Stojkov was employed as a medical receptionist earning a modest income. Mr Stojkov himself was in receipt of workers compensation payments following a work injury. A letterxix from his solicitor to the solicitor acting for Mrs Stojkov indicated that he accepted a small lump sum payment in respect of this work injury and that: Mr Stojkov's ability to work in his scrap metal business has been severely affected by the consequences of the motor vehicle accident in November 2003. 66 His tax returns for the tax year 2001xx and the tax years 2002 to 2005xxi inclusive did not assist in explaining the source of income necessary to make the loans alleged. He claimed that in this period he was engaged in trading in shares as well as scrap metal. His share trading appeared to produce only losses. He said he earned a minimum of $100,000 net per annum from trading in scrap metal. His tax returns did not support this claim. The scrap metal business was not referred to in the tax returns for the years 2001 and 2002. The net returns from the business were shown as $100 in 2003, $3,425 in 2004 and $64,637 in 2005. 67 His income from other sources was similarly limited. The taxable income was shown as follows: 2001-------------------------------$13,866 2002-------------------------------$57,929 2003-------------------------------$50,632 2004-------------------------------$43,516 2005-------------------------------$63,516 68 This income was more consistent with the financial position disclosed in the documents relating to the Family Court application than with the position of a man capable of providing numerous cash and credit card payments on request by way of loan without documentation or an enforceable regime for repayment. A person would need to be foolhardy in the extreme to place himself in such a position. I did not regard Mr Stojkov as foolhardy. I regarded him as dishonest in his claim that he lent money to Mr Predojevic. Other rational explanations 69 Mr Stojkov relied heavily on the financial statements of Teralba Auto Wreckers that recorded the loan account in his name. He claimed that the failure to call Ms Brough to explain these records lead to the inference that her evidence would not have assisted the defence. I considered it unlikely that the accountant could add to the evidence provided by Mr Jankovic. It appeared that she relied on the information supplied to her by Mr Jankovic and that he in turn relied on what he was told by Mr Predojevic. 70 It was not put to Mr Jankovic that he was untruthful in his evidence. He stated that the loan accounts in Mr Stojkov's name were cleared when sales in amounts equal to the figure shown in those accounts were provided for in Teralba Auto Wreckers' tax returns. I could see no reason why a business would report additional income if in fact money was received into the business by way of loan. 71 Such a conclusion would suggest that as early as 2003 Mr Predojevic decided to pay tax on the funds represented by the loan accounts rather than repay money he allegedly continued to borrow from Mr Stojkov on a regular basis. Without having heard from Mr Predojevic and in the face of the rational explanation provided by Mr Jankovic, I was not prepared to conclude that he took this course. 72 I accepted that the contract providing for Mr Stojkov to collect certain metals during the period from 30 July 2002 to 30 July 2004 was a separate and independent transaction. It was argued that sales for scrap supplied under that contract could not be relied upon to cancel out the loan accounts. I did not accept this submission. There was no evidence as to the way in which the amount of $35,000 paid under this agreement was treated and it could well have been included in the amounts that accumulated to the $78,500 shown in the loan account at the end of June 2003. 73 Further, Mr Jankovic's explanation was supported by evidence that Mr Stojkov purchased scrap additional to that provided for in the contract. The contract provided specifically for the collection and sale of scrap nonferrous and specific ferrous materials. There was evidence that established that Mr Stojkov purchased materials in addition to those provided for in the contract. 74 Ms Chape issued the curious invoice of 20 June 2005 for $55,000. In response Mr Stojkov produced records of credit card transactions that amounted to precisely $55,000. He said they related to purchases of scrap. The first of these records was issued on 4 May 2004, that is, prior to the expiry of the period provided for in the contract. 75 Mr Blek said he was instructed by Mr Predojevic to count and record in writing the scrap that Mr Stojkov was taking. A call for the production of this record was not answered. He said that two or three times he processed credit card payments for Mr Stojkov when Mr Predojevic was not in the office. Mr Predojevic told him in advance the exact amount to be processed and the materials to be provided in exchange for payment. 76 Mr Blek agreed that Mr Predojevic told him that until 2004 he had a contract that allowed Mr Stojkov to take material. He did not remember whether Mr Predojevic gave him these instructions during the term of the contract. 77 The defence was not assisted by Mr Blek's uncertainty concerning the date of these instructions and the failure to produce the written record of the items he counted. However, Mr Blek's statement that he did not issue any receipt or tax invoice to Mr Stojkov in respect of these transactions suggested that they took place prior to the time when Ms Chape commenced issuing invoices in 2005 and 2006 for sales in respect of which Mr Stojkov was able to produce bank and credit card transaction records. 78 Ms Chape was employed by Teralba Auto Wreckers in 2002 and throughout the period of the relationship between Mr Stojkov and Mr Predojevic. She attached to her statement copies of receipts that she issued for rental payments between August 2003 and April 2006. She also attached invoices she issued for sales in 2005 and 2006. 79 She said she issued receipts if Mr Stojkov asked for them and provided that Mr Predojevic approved their issue. She said she was never asked to record a transaction as a loan and she at no time overheard any discussion between Mr Stojkov and Mr Predojevic concerning a loan. She saw no money change hands between the two men. 80 Mr Stojkov said he lent money to Mr Predojevic at regular intervals between 2002 and 2005. He relied on his credit card and bank statements to point to the payments allegedly made. They were all in round figures, the majority in sums between $3,000 and $5,000, although some were as low as $2,000 and others as high as $20,000. 81 These figures were not dissimilar to those for which Ms Chape provided invoices to Mr Stojkov, with the exception that GST was added when the invoices issued. These invoices were issued after Mr Stojkov's new accountant took over the preparation of his business accounts and asked for proper accounting records. 82 This material, coupled with Mr Stojkov's ability to produce records to match the $55,000 invoice, was suggested strongly that, where no record existed of payment for the purchase of scrap or motor vehicles, Mr Stojkov claimed the payments were made by way of loan to Mr Predojevic. Summary 83 I did not accept Mr Stojkov as a witness of credit. It was critical to the successful pursuit of his claim that he persuade the Court this his evidence could be relied upon. 84 It was clear that Mrs Stojkov's evidence was wrong and should be rejected. 85 Mr Dederer and Mr Ristic, who could have supported Mr Stojkov's claims, both denied any involvement in passing money between him and Mr Predojevic. 86 I considered it improbable that Mr Stojkov would allow such a considerable debt to accumulate without requiring some form of document to record its existence and its terms, particularly in circumstances where Mr Predojevic was suffering from a terminal illness. It was improbable that he would continue to advance money to Mr Predojevic in circumstances where the terms agreed upon between them as to repayment were not complied with and not even interest payments were made. 87 There was no evidence that Mr Stojkov had the financial means to lend the amounts claimed. 88 The explanation for the loan accounts appearing in the financial records of Teralba Auto Wreckers was rational, particularly in the light of evidence that established that Mr Stojkov purchased materials additional to those provided for in the 2002 contract. 89 The result was that I concluded that Mr Stojkov's claim that he lent money to Mr Predojevic was not made out and it was dismissed. ORDERS 90 Verdict for the defendant. 91 The plaintiff is to pay the defendant's costs of the proceedings. This order is suspended for a period of seven days to allow either party to relist the matter for argument on the issue of the appropriate basis upon which costs are to be assessed. 92 The exhibits are returned. -------------------------------------------------------------------------------------------- i Defence, pp 2(f) ii Exhibit A.75 iii Exhibit 5.C iv Exhibit B1[11] v Exhibit A.2 vi Exhibit 9A [15] vii Exhibit B2[6] viii Exhibit B2[5] ix Exhibit A.60 x Exhibit A.65 xi Exhibit A.80 xii Exhibit A.99-160 xiii Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 562, 569-570 xiv Part Annexure B, Affidavit of D Chape xv Exhibit A.76-79 xvi Part Exhibit 10 xvii Exhibits 11A and 11B xviii Exhibit 8 xix Part Exhibit 10 xx Exhibit 1 xxi Exhibit A.9-58 ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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