Kalenik v Apostolidis & Ors [2009] VSC 208 (29 May 2009)

ZORICA KALENIK	Plaintiff

v

JOHN IOANNIS APOSTOLIDIS & ORS	Defendant

JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 - 5, 9 - 12, 16 – 19, 23 - 26 February 2009 2 - 4, 10 – 13, 16, 18 - 20, 23 – 26, 30, 31 March 2009 1, 8, 21, 29, 30 April 2009 7 May 2009
DATE OF JUDGMENT:	29 May 2009
CASE MAY BE CITED AS:	Kalenik v Apostolidis
MEDIUM NEUTRAL CITATION:	[2009] VSC 208

PROPERTY – De facto relationship – Adjustment of property interests under Part IX of the Property Law Act 1958 (Vic) - Relevant principles – Adjustment order made.

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C Gunst QC with Mr R Edmunds	Leo Dimos & Associates

For the Defendant	Mr S Wilson QC with Dr D Kovacs	David Tonkin & Associates

1 In early February 1993 the plaintiff, Zorica Kalenik, met the first defendant, John Apostolidis also known as ‘Jannis’ or ‘Janni’. For convenience I will call Mr Apostolidis ‘the defendant’ and will refer to Ms Kalenik and Mr Apostolidis jointly as ‘the parties’. The other defendants are companies owned and operated by the defendant, through which he conducts business and owns real estate and other assets.

2 The parties commenced living together as if they were husband and wife at some stage during 1993. There is a substantial factual dispute as to when this occurred. The plaintiff says that she moved in with the defendant on a particular day in or about early May 1993. The defendant says that the plaintiff moved into his home on a gradual basis commencing in November or December 1993. The significance of this dispute will become apparent.

3 At the time the parties commenced living together, the plaintiff was unemployed and in receipt of unemployment benefits. She owned, subject to a mortgage, a half-interest in a house with her mother and had little else in the way of assets. At this time, the defendant owned, subject to a mortgage, a house in his own name and a furniture retailing business. The business was conducted by a company owned by the defendant, DSK Holdings Pty Ltd, from leased premises. It was at that time a fledgling business of modest value. For convenience, I will refer to it as ‘the business’ or ‘the defendant’s business’.

4 The defendant was assisted in the conduct of the business by his brother Ken Apostolidis. As appears hereafter, Ken had the capacity to be a material witness as to relevant events. However, although he was present in Court throughout the conduct of the trial, neither party chose to call him as a witness.

5 During the course of the seven year relationship between the parties, the profitability of the business grew very substantially. At the time the relationship ended, the defendant was a successful retailer of furniture, in particular imported leather furniture, from business premises owned by another company owned by him, Azura Pty Ltd.

6 The plaintiff did not obtain any significant outside employment during the course of her relationship with the defendant. She says that this was because she worked full-time in the business for six of the seven years that the parties were in a relationship. The plaintiff contends that her work in the business, and her intellectual input into business decisions made jointly with the defendant and others, constituted substantial contributions to the growth of the business. The defendant flatly denies that the plaintiff worked in the business, participated in any significant business decisions or otherwise contributed to the growth of the business.

7 The plaintiff also contends that she contributed financially to the business, by persuading her mother to agree to the sale of the house owned by them, on the insistence of the defendant, and then making her share of the net sale proceeds available to the defendant when requested by him for business purposes. Once again, the defendant flatly denies this. He says that the plaintiff made no financial contribution whatsoever to the business at any time.

8 The plaintiff also contends that she made significant contributions to the household expenses of the parties. Once again, the defendant rejects this outright. He contends that the plaintiff was wholly supported by him throughout the course of their relationship and was, in effect, ‘a kept woman’.

9 The defendant contends that the plaintiff did not reside continuously with him from 1993, when they first moved in together, until March 2000 when they finally separated. He contends that the plaintiff would often be absent from his home for days or weeks following a series of arguments in what was a stormy relationship and that, for two periods during 1995 and 1996, the plaintiff moved out of his home for periods of eight months and four months respectively while he conducted a relationship with another woman who subsequently had his child. Further, the defendant says that he and the plaintiff were effectively separated under the one roof for the final year of their relationship, with the plaintiff moving into a separate bedroom and sexual relations ceasing. During this time, the defendant says that he conducted a relationship with a different woman. The plaintiff flatly denies all of the defendant’s assertions in this regard. She contends that she lived with the defendant on a continuous basis, sharing the same bed and having regular sexual relations, until the defendant informed her that the relationship was over and, in her words, she was ‘thrown out’ in March 2000. The plaintiff said that the only gap in the relationship was for a period of about three days in January 2000.

10 The parties finally separated on 17 March 2000 in fairly extraordinary circumstances. In January 2000, the defendant first met his current partner, Amanda Simpson, over the internet. In February 2000, the defendant travelled to America and met Ms Simpson in person for the first time. By early March 2000, the defendant had invited Ms Simpson to come and live with him in Australia, Ms Simpson had agreed, and the defendant had told the plaintiff that she had a week or so to leave his home because their relationship was over and he had found a new woman.

11 In November 2000, the plaintiff commenced this proceeding. In summary, the plaintiff claims that she made significant financial and non-financial contributions to the growth of the defendant’s assets during the course of their relationship. She seeks adjustment orders under s 285 of the Property Law Act 1958 (Vic). The plaintiff contends that she is entitled to no less than one-half of the value of the defendant’s assets, both personal and business, at the time of their separation in March 2000. As appears below, the defendant’s assets in March 2000 exceeded $10 million. The plaintiff places heavy reliance upon the fact that, notwithstanding her alleged contributions to the growth of the defendant’s assets, she left the relationship with virtually nothing. She had savings of approximately $50,000, a modest motor vehicle purchased for her by the defendant during the course of the relationship and $10,000 in cash given to her by the defendant when she left.

12 The plaintiff’s claim is made under Part IX of the Property Law Act 1958 (‘the Act’), which allows for the making of adjustment orders in favour of one ‘de facto partner’ against the other following the termination of a de facto relationship.

13 Section 275 of the Act defines a ‘de facto relationship’ as the relationship of a man and a woman ‘living or having lived together as if they were husband and wife although not married to each other’.

14 Section 279 of the Act permits a court to make an order for the adjustment of interests with respect to the property of one or both of the de facto partners after the end of their relationship. The jurisdiction of the court to make an adjustment order is subject to conditions. For the disposition of this case, the relevant conditions are: (1) that the parties lived together in a de facto relationship for a period of at least two years;[1] and (2) that (subject to a power to extend the time) the proceeding was commenced within two years after the day on which the relationship ended.[2] These two conditions explain the relevance of the factual dispute between the parties as to the date of commencement of their de facto relationship and the defendant’s allegation that the plaintiff ceased living with him for a period of approximately eight months in 1995 and four months in 1996. If the defendant’s assertions are correct, that the de facto relationship between the parties did not commence until November or December 1993 and that it was first terminated for a period of approximately eight months in 1995, an issue would arise as to whether the first period of cohabitation of less than two years before the parties commenced living together again in about September 1996 could be taken into account and, if so, whether an extension of time would be necessary for leave to bring this proceeding in respect of that earlier period. However, for the reasons given below, I reject the defendant’s evidence in this regard. Accordingly, the existence of these conditions has no relevance to the overall disposition of the case. However, it is necessary to refer to them at this stage in order to give relevance to the factual dispute canvassed below.

15 In any event, as appears below, there is no dispute that the parties lived together as if they were husband and wife for a period in excess of two years commencing in or about September 1996. On this basis, it is acknowledged by the defendant that, even on his version of events, the Court has jurisdiction to make an adjustment order if the plaintiff establishes a case for the making of such an order.

16 The power to make an adjustment order is contained in s 285(1) of the Act, which provides:

17 As can be seen, the Court is invested with a discretion to make an adjustment which is just and equitable. However, although the discretion is a broad one, there is a statutory direction that it must be exercised ‘having regard to’ contributions of the kind mentioned in paragraphs (1)(a) and (b). Paragraph (1)(c) is not relevant in this case as there was no written agreement between the parties.

18 Further, in making an adjustment order, the Court is directed ‘so far as is practicable’ to make orders that will be final, ending the financial relationship between the de facto partners and avoiding further proceedings between them.

19 Although the Court is vested with a wide discretion in formulating an adjustment order which is just and equitable in the circumstances of a particular case, the authorities indicate that the Court should exercise that discretion by proceeding through a three-step process. In Giller v Procopets,[3] Neave JA approved and applied the following description of the three-step process by the New South Wales Court of Appeal in Kardos v Sarbutt:[4]

20 In this case, there is substantial dispute about each stage in the three-step process. As to the first step, the principal dispute concerns the value of the defendant’s business at the date of separation and, consequent upon that, whether the defendant’s assets at the separation date included a large amount of cash which is otherwise unaccounted for in the evidence. As to the second step, apart from a measure of agreement as to the homemaker contributions of the plaintiff, there is substantial dispute regarding every part of the evidence. In particular, the defendant denies that the plaintiff ever worked in the business or provided any input into the significant business decisions responsible for the rapid growth in value of the business. At the third stage, the defendant contends that any contributions made by the plaintiff, whether as homemaker or to any minor extent in relation to the business, have been adequately compensated for by the fact she was ‘kept’ at the expense of the defendant for the whole of the period of cohabitation and, in addition, was provided with a motor vehicle and $10,000 when the parties separated. In contrast, the plaintiff contends that she is entitled to not less than one-half of the defendant’s assets.

21 In seeking more than one-half of the defendant’s assets, the plaintiff relies heavily upon statements in the authorities to the effect that an adjustment to property interests to reflect a homemaker contribution may be increased if that contribution was made more arduous by reason of domestic violence by the other de facto partner. In this regard also, the relevant authorities were reviewed by Neave JA in Giller v Procopets.[6] Neave JA accepted that the existence of both verbal and physical abuse was a relevant matter to take into account in assessing the homemaker contributions of a de facto partner. Where such conduct is established, it may increase the weight to be given to the homemaker contribution in determining a just and equitable adjustment order.

22 Each party also seeks to rely upon the principle that adverse inferences should be drawn against the other by reason of certain ‘litigation misconduct’. It was submitted that this litigation misconduct leads to the inference that the other party did not have any real confidence in the strength of that party’s case. In this regard, reliance was placed upon the following statement by Gillard J in Li v The Herald & Weekly Times Pty Ltd:[7]

23 It is for this reason that much focus was placed by the parties in evidence upon alleged subornation of perjury, alleged failure to discover documents which were obviously relevant and alleged threats made by the defendant against the plaintiff. Of course, these matters are, in any event, relevant in assessing the credit of the parties.

24 What has been written to this stage of these reasons is sufficient to understand the relevance of the evidence which was adduced and the factual issues which must be resolved in order to make a determination.

25 The Court’s fact finding task in this case is an extremely difficult one. This is because the relevant events took place between 9 and 16 years ago, because nearly every important fact is in dispute, and because there are very few contemporaneous documents to assist in the task. Further, as appears below, I do not accept that either the plaintiff or the defendant was a credible witness. The evidence of each of them was a tangled web of truths, half-truths, mistaken recollections, inconsistencies, exaggeration, understatement, evasion, dissembling, concoction and deliberate lies. The witnesses called to corroborate their respective cases were unsatisfactory in many respects and, with only a few exceptions, it is unsafe to rely upon their evidence. Further, key witnesses who were available to give evidence did not do so; in particular, the defendant’s brother Ken Apostolidis, who sat in the courtroom during virtually the whole of the trial but was not called by either party to give evidence.

26 In these circumstances, the Court is left with the unenviable task of deciding between two versions of events which are directly inconsistent. Given the polar extremes of some aspects of the evidence, it is sometimes necessary to find that one or other party, or a witness, has told deliberate lies. Finally, it should be noted that some aspects of the evidence are confused and incomplete, with the result that it is not possible to make all findings of fact fit together. Some anomalies remain. Where this is so, I have made findings on the evidence considered as a whole.

27 The plaintiff commenced her evidence theatrically. She paused for some time and stared first at the Bible and then at me, in an apparent attempt to convey that the oath meant a great deal to her, and then took the oath. During the course of giving evidence, she emphasised her religiousness by stating that she was a strict Catholic. Whether or not that is so, I am well satisfied that she told lies on many occasions.

28 There were many occasions when the plaintiff became tearful. On only some of those occasions am I satisfied that the tears were genuine. I accept the submission made by senior counsel for the defendant that the plaintiff’s tears were often an act; and that the plaintiff only genuinely cried when caught lying on significant matters, or when inconsistencies with her other sworn evidence contained in affidavits or answers to interrogatories was exposed. However, even then, the plaintiff would recover almost instantly, moving rapidly from tears to a bright demeanour, especially if a subject matter about which she felt confident was raised.

29 As appears below, I am satisfied that the plaintiff’s evidence was based in large part upon a rehearsed script. There were many occasions when she forgot the script or used scripted responses at inappropriate times. Further, as part of the scripting, the plaintiff attended Court each day in company with one or two security guards. The obvious purpose of this was to portray that she was in fear of the defendant, and to support her allegations that he has assaulted and threatened to kill her.

30 In assessing the plaintiff’s evidence that she contributed significantly to strategic decisions made with respect to the defendant’s business, it is relevant to note that the plaintiff presented throughout her evidence as a woman very unsophisticated in all things financial.

31 Against the background of these general observations as to the plaintiff’s demeanour, I proceed to consider some specific matters concerning her credibility as a witness.

32 The plaintiff admits that she has told lies to government social security agencies. She seeks to justify some of these lies by stating that the defendant forced her to tell them under threat of violence to her, her family or friends. Further, the plaintiff acknowledged she told other lies to assist herself and the defendant to jointly build up their assets or, in one case, because she was ‘just trying to help’ her mother. For reasons which appear below, I do not accept that any of the lies were told by the plaintiff under threat of violence or other coercion. It follows that the plaintiff is a person prepared to lie for the purposes of financial gain to either herself or her family when it suits.

33 There is other false evidence given by the plaintiff which she does not admit is untrue or, if she does admit it is untrue, she attributes either to honest mistakes made by her or to the negligence or misunderstanding of her lawyers, both past and present.

34 Further, there is much evidence given by the plaintiff which may have some basis in truth but, because she has chosen to exaggerate and embellish the evidence to a very significant degree, must be rejected for that reason alone. Where the probabilities favour there being some element of truth underlying the exaggeration, I have made findings accordingly.

35 The incredible nature of some of the plaintiff’s evidence, and the fact that it is replete with exaggeration and embellishment, was obvious when it was given and is obvious from reading the transcript of it. Many parts of her evidence have been quoted in full as a demonstration of this.

36 The plaintiff’s efforts to denigrate the defendant at every opportunity, including by way of many non-responsive answers to questions, are littered throughout her evidence. It is not only the content of this evidence, but the plaintiff’s demeanour in giving it, which reveals an extraordinary level of bitterness and hatred towards the defendant. This must be taken into account in assessing the credibility of her evidence.

37 The plaintiff was a repeatedly non-responsive witness. Although often reminded and admonished for not providing a responsive answer to the question asked of her, the plaintiff continued to volunteer irrelevant material, almost always with the obvious purpose of denigrating the defendant. Senior counsel for the defendant described these occasions as ‘gratuitous sledges’ and I agree that this is an apt description. The plaintiff herself acknowledged that she understood what she was doing and said she would endeavour to answer the questions in a responsive manner, but continued to engage in this practice throughout the course of her evidence. I am satisfied that this was a deliberate strategy of the plaintiff and that she chose to ignore the clear directions given to her to provide responsive answers to the questions asked of her. For example:

(1) when asked to describe the defendant’s assets at the time she started living with him, the plaintiff said that the defendant told her, on a number of occasions commencing in ‘around 1995’, that he had opened a safety deposit box in a different name during the 1980s, and that he explained to her the reason for the existence of the safety deposit box in the following terms:

The words were, "I'm putting cash into these safety deposit box. I also have a Greek passport in there. I also have jewellery that I could cover you with in there that I have stolen from the Hilton Hotel." I said to him, "Janni, are you in any trouble?" He said, "Zorica, I hate the tax man with a vengeance. He said, "Zorica, all judges and anyone with a degree are all stupid. I can and have got away with everything I've ever done. I look at myself in the mirror, I practise it, and it's a funny thing, Zorica, I even believe my own lies."

(2) during the course of giving evidence about her own contributions to the furniture business, the plaintiff drifted off the subject matter and volunteered that the defendant engaged in the dishonest business practice of paying cash for ‘seconds’, which were usually damaged in some way, and passing them off as new and undamaged. She said that the defendant would touch-up scraps and chips with coloured felt marker pens. The customers would often complain and this lead to the defendant being taken to the Small Claims Tribunal on numerous occasions. She gave an elaborate description about how she questioned the defendant about the morality of this practice and was told by him that he did not care. She gave evidence of the defendant ‘on many occasions’ rehearsing in front of the bathroom mirror before attendances at the Tribunal and stating to her on one particular occasion, while laughing:

“You know, Zorica, it’s amazing, I am such a good liar that I even believe my own lies. All these judges are so f-ing stupid ... they, you know, what’s the point in a qualification? You know, they’re poor as dirt, I don’t have qualifications and look at me.”

(3) when cross-examined about the serious matter of alleged rapes by the defendant, the plaintiff volunteered that, before raping her, the defendant would ‘normally ... read Mein Kampf for a while’.

38 The cross-examination of the plaintiff revealed a large number of prior inconsistent statements made by her in the various versions of her statement of claim, her answers to interrogatories and an affidavit sworn by her in connection with an interlocutory application in the proceeding. The inconsistencies were in many respects of a most significant kind. It is obvious that this was well-known to the plaintiff and her lawyers. Accordingly, during the course of evidence in chief, evidence was led from her to the effect that her former solicitors were incompetent and that they were responsible for the mistakes and inconsistencies. In framing his questions, senior counsel for the plaintiff identified a small typographical discrepancy in her answers to interrogatories and used this as a touchstone for the plaintiff to give evidence about the incompetence of her previous solicitors and, in particular, about the circumstances in which her answers to interrogatories were sworn. I found the evidence unconvincing at the time it was given. As cross-examination progressed, it became obvious that it was wholly unconvincing.

40 The plaintiff was then taken to her answers to interrogatories, which she acknowledged contained her signature. She was then asked:

41 The plaintiff’s attention was then directed by her senior counsel to an obvious typographical error, which the plaintiff identified as being ‘absolutely wrong’. She was then asked to explain the circumstances in which the answers to interrogatories were sworn:

43 The plaintiff’s credibility is also undermined by an agreement which she entered into in December 2004 with Ken Apostolidis. By that agreement, the plaintiff agreed to pay Ken Apostolidis, in return for assistance with funding of this proceeding, one-half of the net proceeds of any judgment recovered by the plaintiff against the defendant. This extraordinary agreement was entered into in the following circumstances. The plaintiff had assisted Ken Apostolidis in his case against the defendant by providing a witness statement. The agreement recites that both the plaintiff and Ken Apostolidis were ‘unhappy with the settlement that Ken was forced to accept’ in that proceeding. From the recitals contained in the agreement, and the evidence as a whole in this proceeding, I have no hesitation in finding that at the time the plaintiff entered into this agreement with Ken Apostolidis it was intended that Ken Apostolidis would give evidence on behalf of the plaintiff in this case. In these circumstances, any agreement to share the proceeds of any judgment obtained in this proceeding with Ken Apostolidis was improper. I have no doubt that the existence of this agreement would not have been discovered by the defendant were it not for the subsequent dispute between the plaintiff and Ken Apostolidis. If Ken had given evidence for the plaintiff, this agreement would have remained secret to them.

44 At some stage in late 2007 or early 2008, the plaintiff and Ken Apostolidis had a falling out. The plaintiff contends that Ken Apostolidis did not provide the promised financial assistance to enable her to prosecute this proceeding. By 14 February 2008, when the plaintiff’s outlines of evidence were served on the defendant, there was no outline of evidence in respect of Ken Apostolidis.

45 The plaintiff’s credibility as a witness is also undermined by the role of Brian Pollett. In early 2001, soon after the commencement of this proceeding, the plaintiff met Brian Pollett. They commenced a relationship and, in or about May 2002, began living together. From May 2001, Mr Pollett has assisted the plaintiff and her lawyers in the prosecution of this proceeding.

46 When describing the circumstances in which she swore her answers to interrogatories in March 2002, the plaintiff said that she was accompanied by ‘my business adviser’,[10] a reference to Mr Pollett. The defendant contends that the only ‘business’ conducted by the plaintiff at any relevant time is the business of this case, and that the plaintiff’s case has ‘grown like topsy’ since the involvement of Mr Pollett. It is contended that Mr Pollett’s involvement has resulted in the plaintiff’s alleged contributions to the growth and acquisition of the defendant’s assets increasing in significance over the course of numerous amendments to the statement of claim, in outlines of evidence and in the plaintiff’s oral evidence.

47 Further, the defendant contends that Mr Pollett assisted the plaintiff to craft a case based upon a ‘script’, to be followed by her and her witnesses, which seeks to dishonestly maximise the extent of the plaintiff’s contributions to the growth and acquisition of the defendant’s assets, to paint the plaintiff as a paragon of virtue and to demonise the defendant at every opportunity.

48 The evidence discloses that Mr Pollett has paid money over at least five years to a witness, Bill Nedelcu, upon whom the plaintiff placed much reliance. Mr Nedelcu admitted that he had been paid regular amounts of money by Mr Pollett between approximately 2002 and the commencement of the trial and that, by about April 2008, the amounts had totalled approximately $5,000 to $6,000. However, he said that these amounts were paid by way of charity to a friend who was in financial difficulty, and not to secure favourable evidence. The plaintiff confirmed this. Further, Mr Nedelcu made the extraordinary allegation that he had been abducted by the defendant at gunpoint and forced to swear an affidavit recanting the outline of evidence prepared on his behalf by the plaintiff’s lawyers. These bizarre events are referred to in detail below.

49 Mr Pollett did not give evidence. It was submitted on behalf of the plaintiff that he was not a relevant witness to any of the events in issue, as he had not even met the plaintiff until after she had separated from the defendant. Although it is true that Mr Pollett could not have given relevant evidence as to the events in question, he could have given relevant evidence as to allegation that he paid money to Mr Nedelcu to give false evidence. An allegation of that kind gives rise to a clear exception to the ‘collateral evidence rule’, which usually prevents witnesses being called on issues going only to credit or other collateral matters.[11] Mr Nedelcu swore in his recanting affidavit that:

50 It is not to the point that Mr Nedelcu gave evidence that he swore his recanting evidence under duress, alleging that he had been abducted at gunpoint by the defendant. The defendant denied that this was so. The plaintiff placed a great deal of reliance upon the evidence of Mr Nedelcu as to the issues in the proceeding. In these circumstances, given the admitted payments made by Mr Pollett to Mr Nedelcu over a substantial period of time, I would have expected the plaintiff to call Mr Pollett to rebut the suggestion that the payments were made to secure favourable evidence in support of the plaintiff’s case. There is no doubt that Mr Pollett could have given very relevant evidence concerning these issues. Further, he was in telephone contact with Mr Nedelcu during the time which it is alleged Mr Nedelcu was kept at the defendant’s home following his alleged abduction.

51 In her evidence in chief, the plaintiff was asked about payments made to Mr Nedelcu by Brian Pollett. When first asked, the plaintiff responded that Mr Pollett had given money to Bill Nedelcu in the last few months ‘to help him with accommodation and with food, as Bill Nedelcu was on the run and in hiding from Jannis’. The plaintiff said that the amounts involved were approximately $200 every week or two. At the time this evidence was given, the plaintiff had been placed on notice that Mr Nedelcu had previously alleged that Mr Pollett had paid him approximately $5,000 to $6,000 to give favourable evidence on behalf of the plaintiff. The plaintiff’s evidence was incomplete and misleading. In cross-examination, it became apparent that she well knew that Mr Pollett had been paying sums of money to Mr Nedelcu on a regular basis for many years.

52 Further, as appears below, I find that by February 2008 Mr Pollett had agreed to pay Mr Nedelcu another $25,000 from the proceeds of any judgment recovered by the plaintiff.

53 In these circumstances, I find that the payments made by Mr Pollett to Mr Nedelcu were intended to influence Mr Nedelcu’s evidence as to relevant events. I reject the evidence of the plaintiff that the payments made by Mr Pollett to Mr Nedelcu were simply charity to a friend in need ‘to help him with accommodation and with food’, and that there was never any question of an intention to influence Mr Nedelcu’s evidence. The credibility of Mr Nedelcu is dealt with below. For the reasons there given, I did not find him a credible witness. No reliance can be placed upon his evidence as to material events, or otherwise.

54 The pervasive role of Mr Pollett in the preparation of the plaintiff’s case, and the evidence to be given by her and witnesses called on her behalf, is demonstrated by an extraordinary document prepared by Mr Pollett. The document is in the form of a spreadsheet and is headed ‘ESTIMATED DISBURSEMENTS & COSTS INCURRED TO FIGHT THE SUPREME COURT CASES OF ZORICA KALENIK’. For convenience, I will call the document ‘the Pollett spreadsheet’. The Pollett spreadsheet was provided to the defendant by his brother, Ken Apostolidis, in circumstances discussed below.

55 It was submitted on behalf of the plaintiff that the Pollett spreadsheet should not be admitted into evidence because, on its face, it was obviously prepared for a without prejudice purpose. It was submitted that the evidence established that there was a dispute between the plaintiff and Ken Apostolidis at the time the Pollett spreadsheet was prepared on 15 February 2008. It was then submitted that the obvious purpose of the spreadsheet was to understate, in a misleading fashion by ‘a whole lot of expenses that are plainly loaded’, the amount which Ken Apostolidis could expect to recover from the proceeds of any judgment recovered by the plaintiff against the defendant. During the course of final submissions, I rejected this submission. There was no evidence to support the assertion that the document was given to Ken as a bona fide offer to compromise a dispute between himself and the plaintiff. Neither Mr Pollett nor Ken Apostolidis was called to give evidence to that effect. Nor did the plaintiff say this was the case.

56 The Pollett spreadsheet is an extraordinary document. It assumes the enforceability of the plaintiff’s agreement to pay Ken Apostolidis one-half of the net proceeds of any judgment recovered by her against the defendant. It is in spreadsheet format, forecasting the net proceeds of gross judgments in the plaintiff’s favour of between $4 million and $9 million. The commencing forecast of a judgment in the sum of $4 million appears to have been chosen because the spreadsheet estimates that the plaintiff will incur costs and expenses of at least $3,568, 445 in prosecuting this case to judgment. In estimating those costs, Mr Pollett has recorded various unpaid legal fees, estimated future legal fees to be incurred, and the anticipated fees payable to an external litigation funder. In addition, Mr Pollett has recorded the following matters, each of which casts doubt upon the credibility of the plaintiff’s case as a whole, of the plaintiff as a witness, and of other witnesses called on her behalf.

57 First, the Pollett spreadsheet records an obligation by the plaintiff to repay her mother $160,000, because she had lent the plaintiff approximately $10,000 and her home had been encumbered by $150,000 in respect of the legal costs of this proceeding. For an unexplained reason, the Pollett spreadsheet assumes that the amount payable to the plaintiff’s mother will be double that obligation – an amount of $320,000. The plaintiff’s mother was a witness at the trial.

58 Second, the Pollett spreadsheet records many disbursements apparently funded by Mr Pollett to that time, and the fact that Mr Pollett had guaranteed the payment of the plaintiff’s legal expenses until external litigation funding was secured. The Pollett spreadsheet records in this regard:

59 There are many disbursements listed in this Pollett spreadsheet. They are for significant amounts, as follows:

(1) Payment of disbursements to ‘Barristers etc’ - $15,000. For some reason, unexplained in the document, Mr Pollett has grossed up the amount payable to him in respect of these disbursements by doubling the amount paid by him, thus seeking $30,000 from the proceeds of any judgment.

(2) Disbursements concerning Bill Nedelcu. The entry in the Pollett spreadsheet is in some respects ambiguous. The first entry is for $25,000. This amount has also been grossed up by doubling it to $50,000 payable from any judgment recovered by the plaintiff. A further disbursement of $11,250 is stated to be ‘not charged’. The description of this disbursement indicates that this is the amount, plus interest at 15 per cent, paid by Mr Pollett to Mr Nedelcu at 15 February 2008. The description is in the following terms:

(3) Initial business valuation fee paid by Mr Pollett of $1,800. Again, this has been doubled to $3,600 in the amounts to be received by Mr Pollett from any judgment.

(4) Disbursements of $20,000 paid to the plaintiff’s present solicitors. This amount has also been doubled in the projected receipts for Mr Pollett.

(5) Bank fees of $8,000 paid by Mr Pollett in respect of home loan applications. Again, the amount has been doubled in the projected receipts by Mr Pollett.

(6) Estimated interest totalling $47,770 paid by Mr Pollett in respect of moneys borrowed against the security of the plaintiff’s mother’s home, presumably for the purpose of paying legal costs. Again, these amounts have been doubled in the projected receipts by Mr Pollett from any judgment recovered.

(7) $23,100 in respect of another loan apparently taken out by Mr Pollett in connection with the funding of this proceeding. Once again, this amount has been doubled in the projected receipts to Mr Pollett.

60 The next entry in the Pollett spreadsheet is truly extraordinary. Mr Pollett claims a ‘Management Fee’ for work done by him in preparing this proceeding for trial. The full entry for this item reads as follows:

61 For this work, Mr Pollett claims 5 per cent of any judgment recovered ‘net after [litigation funder’s] disbursements deducted’. The amounts are substantial, commencing at $181,500 for a $4 million judgment in favour of the plaintiff and growing to $431,500 in respect of a $9 million judgment. In the spreadsheet, Mr Pollett seeks to justify this fee by stating that it ‘[s]hould be $600,000’ (which would equate to $100 per hour for his time) but notes that the percentage fee would result in him recovering only $30.26 on a $4 million judgment, growing to only $71.80 on a $9 million judgment.[13]

62 Further, Mr Pollett offers the following justification in the spreadsheet for payment of a 5 per cent fee to him:

63 It was submitted on behalf of the defendant that the pervasive role of Mr Pollett, who is not a lawyer, in managing the plaintiff’s case:

64 I accept that submission. From May 2001, when the plaintiff met Mr Pollett, the plaintiff’s case has, as submitted on behalf of the defendant, ‘grown like topsy’. The amount of her alleged financial contributions to the business has increased substantially, allegations of financial contributions to household expenditure were introduced for the first time, allegations of physical violence (which are not contained in any court document prior to the service of outlines of evidence) were introduced, and the nature and extent of the plaintiff’s alleged non-financial contributions to the business have increased in both time and content. Further, notwithstanding that relevant events occurred as long ago as between 1993 and 2000, the recollections of witnesses are in many relevant respects strikingly similar, and sometimes almost identical, on key evidentiary matters relied upon by the plaintiff. The presentation of the plaintiff’s case as a whole has the flavour of having been ‘scripted’, as contended by the defendant.

65 The plaintiff made a number of attempts to downplay the significance of her relationship with Mr Pollett. For example, the plaintiff initially sought to deny that she had ever had a sexual relationship with Mr Pollett. That evidence was false. I am satisfied that, at least for some period, the plaintiff had a sexual relationship with Mr Pollett. The plaintiff commenced living with Mr Pollett after her first car accident in May 2002. She said:

66 In the end, under cross-examination, the plaintiff admitted that she had a sexual relationship with Mr Pollett. She attempted to justify her previous denials by an apology to the Court, stating that she ‘was extremely distraught and upset’ and had been trying to be as accurate as she could in her evidence. I do not accept that explanation. The plaintiff repeatedly denied having had a sexual relationship with Mr Pollett and evaded questions directed to that issue prior to finally accepting that she had done so.

67 Nor do I accept the plaintiff’s evidence as to the role played by Mr Pollett in the preparation of her case. She sought to downplay his involvement, describing it as no more than providing her with linguistic and technical assistance. This is totally inconsistent with the Pollett spreadsheet.

68 I also reject the plaintiff’s denial of having seen the Pollett spreadsheet. Before the Pollett spreadsheet was put to her in cross-examination, the following exchange occurred:

69 I am satisfied that the plaintiff had seen the Pollett spreadsheet and gave this ambiguous and evasive answer because of a concern that Ken Apostolidis may have given it to the defendant.

70 The defendant presented as an arrogant, cold, obsessive and competitive man. He had an off-putting demeanour of constantly seeking eye contact with me and endeavouring to hold that eye contact. He was precise in many things and deliberately vague on others. He gave his evidence in an off-hand manner, continually swivelling his chair and happy to paint himself as an unpleasant person where he thought it would assist his case. For example, although I am satisfied that he had some real emotional attachment to the plaintiff at some times, he endeavoured to present a picture of the plaintiff as merely his ‘sexual partner and [live-in] person’. When questioned about the frequent arguments between the parties, he said that each would provoke the other. He gave the extraordinary evidence:

71 The defendant also presented as a short-tempered man and there were occasions when he displayed this in the courtroom, both during his evidence and at other times during the trial. However, given the extremely serious and sordid nature of the allegations made against him by the plaintiff, I allow him some latitude in that regard. When his temper flared up, he was able to compose himself very quickly and go on with his evidence.

72 The defendant adopted the consistent practice of simply denying the truth or accuracy of any statement in a document which did not accord with his case; whether the document was something prepared by him or other employees of his business, or an official document.

74 The plaintiff alleged that the defendant engaged in tax fraud throughout the course of their relationship, particularly in the later years once the defendant’s business was well established and earning significant profits. She alleged that the defendant routinely took large amounts of the cash receipts of the business for his personal use and application, and that none of this cash was declared as income to the Commissioner of Taxation. The defendant denied this point blank. He said that all of the cash receipts of the business were banked or otherwise properly accounted for, and that no tax was avoided. For the reasons given below, I reject the defendant’s denials of tax fraud. I find that he gave deliberately false evidence on this issue and that this effects the whole of his credibility as a witness.

75 Further, the defendant has been convicted of a number of criminal offences, many involving violence, threats of violence, and abusive language. In an endeavour to downplay the significance of these convictions upon his credibility, and upon his propensity to react violently when provoked, the defendant gave evidence in chief in which he sought to explain and, in some respects, trivialise the circumstances giving rise to his convictions. This evidence was misleading and reflects very poorly upon the defendant’s credibility as a witness generally. I am satisfied that he deliberately attempted to downplay the significance of his convictions, and I reject his evidence that he does not remember the circumstances giving rise to these convictions, especially the most recent.

76 It is unnecessary to set out all of the evidence in which the defendant sought to trivialise the facts underlying his convictions. The following example suffices.

77 In November 2006 the defendant was convicted at the Sunshine Magistrates’ Court of making a false document to the prejudice of another person and stalking another person. On this occasion, the defendant pleaded not guilty. His conviction followed a contested hearing.

78 In his evidence in chief, the defendant said that he was in fact innocent of the charges and had been wrongly convicted. He also sought to downplay his involvement in the circumstances leading up to the events underlying the convictions, stating that he did not meet the customers until he saw them at Court. He initially repeated this evidence in cross-examination. However, later he acknowledged that he had in fact been involved in the underlying dealings with the customers which gave rise to the circumstances of the convictions.

79 In short compass, a dispute arose between the defendant and some customers who were dissatisfied with a white leather couch which they had ordered. A deposit of $2,000 had been paid using the male customer’s credit card, and a telephone number had been left with the defendant. Following the dispute arising, the male customer sought to use his influence as a senior bank employee to have the $2,000 deposit transaction reversed. An argument between the defendant and the male customer then ensued.

80 In his evidence in chief, the defendant said that his conviction was based upon a false accusation that he had used the male customer’s credit card details to order a subscription to a sports magazine in the customer’s name. He said that he was convicted because his fingerprint appeared on the subscription coupon which had been torn out from a magazine. He explained that his fingerprint was on this coupon because he keeps magazines for display purposes in his furniture showroom. He said that this coupon was the false document upon which his conviction was based. He said that the stalking conviction was based solely on him mailing that coupon to the magazine company.

81 By this evidence, the defendant sought to trivialise the offences for which he was found guilty. In cross-examination, a different story emerged.

82 The defendant was asked in cross-examination as to whether his evidence in chief concerning this offence was a full statement of the circumstances surrounding the offence. The defendant evaded the question, stating ‘I may have something left out, but in that case I’m not sure what I left out, but you can ask me please ...You can refresh my memory’.

83 Senior counsel for the plaintiff then proceeded to put the police brief in respect of the offences to the defendant. As the issue had been opened in evidence in chief, I allowed this course to be taken. It quickly became apparent that there was much more to these offences than the defendant had stated in evidence in chief. The defendant said that he had forgotten these other allegations, but I do not accept that this is so. The convictions are the most recent in his criminal history. It may be that he was not convicted of all of these allegations. However, that is not to the point. His credit is undermined because, I am satisfied, he deliberately endeavoured to conceal the full scope of the allegations by pretending that he did not remember them.

84 The defendant’s credibility is also seriously undermined by his extraordinary conduct and evidence concerning the maintenance and use by him of safety deposit boxes. When he was asked as to whether he maintained any safe deposit boxes in Melbourne, the defendant responded ‘of course’. He proceeded to give evidence of having maintained two safety deposit boxes with the Commonwealth Bank since the early 1980s, a further safety deposit box with the Westpac Bank from the late 1980s or early 1990s, and a further safety deposit box with a private company, the name or address of which he could not recall, from the late 1990s or, more probably, after the year 2000. In further cross-examination, after he had thought about it overnight, he revealed the existence of a second safety deposit box at the private company. It was not until the defendant was prompted as a result of internet searches made by Court staff that he was able to remember the name or address of this private company. The defendant said that the bank safety deposit boxes were kept in his own name because banks required full identification details to be given, but that he opened the two safety deposit boxes with the private company in a false name because, on an impulse, he realised that the private company did not require the same formal level of identification.

85 The defendant gave evasive and non-responsive evidence when initially asked about the contents of the safety deposit boxes. When it was put to him that he used the Commonwealth Bank safety deposit boxes to store jewellery stolen by him while he was employed at the Hilton Hotel, the defendant snapped. He turned to senior counsel for the plaintiff, glared and pointed a finger at him and shouted ‘You take that back. You take that back.’ This flash of anger was the subject of rebuke by the Court. The defendant’s conduct in this regard provides some insight into his character, and some support for the submission made on behalf of the plaintiff that he is a man easily stirred into angry verbal responses.

86 Both parties sought to draw an advantage from the failure of the other to call witnesses who would be expected to be called by the other party. In some cases, this is obvious. For example, Mr Pollett. It is only the plaintiff who could have been expected to call him; he is wholly in her confidence. For the reasons given above, I have inferred that his evidence would not have assisted the plaintiff’s case on the issues identified.

87 There are other witnesses who were not called, who could have given relevant evidence on one or more issues in the case, and who fall clearly within the expectation that one party or other would have called them if their evidence would have assisted that party. For example, the plaintiff’s sister Vesna Kustra and her mother’s partner Con Kazatzoglou. Both of these witnesses were clearly in the confidence of the plaintiff and it is to be expected that she would have called them if their evidence would have assisted her case.

88 Similarly, the defendant could have been expected to have called a number of witnesses, including the woman with whom he alleges he had a relationship during 1999, Natalie Brown, and his Malaysian business partners in the company Dalcy (M) SCN BHD. The evidence these witnesses could have given, and any consequent inferences, is considered below.

89 There are also some witnesses who the defendant clearly made insufficient attempts to locate for the purpose of attending to give evidence. In this regard, I refer to the mother and sister of Meghan Courtney, the woman with whom the defendant had a relationship in 1995 and 1996 and who bore his child in October 1996. This issue is considered below.

90 However, in relation to a number of other potential witnesses, some of whom were very important, the facts point in more than one direction as to which party would have been expected to have called them to give evidence. In this category are Ken Apostolidis, the defendant’s other brother Anestis Apostolidis, the defendant’s sister Anna-Maria Schonenveld, and the defendant’s close business associate and fellow shareholder in Dalcy, Steve Yong. By far the most important of these missing witnesses is the defendant’s brother Ken Apostolidis, closely followed by Steve Yong.

91 It was submitted on behalf of the defendant that Ken Apostolidis was a person who was ‘in the camp’ of the plaintiff from the time the plaintiff ceased cohabitation with the defendant. This was because Ken had his own dispute with the defendant, arising out of the defendant excluding him from the business shortly prior to the plaintiff ceasing to live with the defendant. Thereafter, litigation was commenced by Ken against the defendant, and the plaintiff was to give evidence on Ken’s behalf. However, that proceeding was settled before any evidence was given. Notwithstanding this, it is apparent that Ken Apostolidis continued to assist the plaintiff in her case until they fell out some time in late 2007 or early 2008.

92 It was submitted on behalf of the defendant that, at this time, outlines of evidence had already been exchanged for the purposes of the trial fixed in April 2008. Notwithstanding this, the plaintiff had not filed or served a witness statement on behalf of Ken Apostolidis. This indicated that, while Ken Apostolidis was in the camp of the plaintiff, a decision was made by her lawyers that he could not give any evidence which would assist her.

93 Following the fall-out, it is apparent that Ken Apostolidis has maintained an interest in this case. He was present in Court throughout the trial, with only rare exceptions, and stated from the floor of the Court that he was interested in attending because he wished to enforce a written agreement with the plaintiff, under which he was entitled to share in one-half of the net proceeds of any judgment ordered in her favour in this proceeding.

94 On the other hand, Ken has assisted the defendant in connection with the trial; in particular, by providing the defendant with some very relevant documents. First, he provided the defendant with a copy of the abovementioned agreement with the plaintiff. Second, he provided the defendant with a copy of the Pollett spreadsheet.

95 Furthermore, during the course of the proceeding I have observed Ken Apostolidis in the courtroom. He has at times spoken cordially with the defendant. At other times he has spoken cordially with Mr Pollett.

96 I am not satisfied that it can be concluded with any sufficient probability that Ken Apostolidis is a person who it would be expected one party, and not the other, would have called to give evidence. On the one hand, he was clearly in the camp of the plaintiff until he fell out with her at some stage in late 2007 or early 2008. Taking the evidence as a whole, I am not satisfied that this falling out was after February 2008, when outlines of evidence were served on behalf of the plaintiff. I do not accept that any inference can be drawn from the fact that the plaintiff did not serve an outline of evidence in respect of Ken Apostolidis at that time. On the other hand, since he fell out with the plaintiff it is clear that Ken has provided at least some assistance to the defendant for the purposes of the trial of the proceeding. In particular, he provided the defendant with the two critical documents referred to. In these circumstances, I can understand the reluctance of each party to call Ken Apostolidis.

97 However, that is not an end of the matter. The authorities indicate a divergence of view as to the approach to be taken by a court when a witness is equally available to both sides, and neither side chooses to call the witness. One view is that espoused by Wilcox J in Claremont Petroleum NL v Cummings.[16] In that case, Wilcox J stated:

98 An alternative view is that inferences may still be available against one or both parties. In Earle v Castlemaine District Community Hospital,[18] the Full Court of this Court considered a case where it was contended that the witness was equally available to both parties. On the facts of the case, it was held that the witness was not equally available to both parties. Accordingly, the submission that no inference was available against the party who would have been expected to call the witness was rejected. Nevertheless, Little J considered whether it was correct to lay down a uniform rule that no adverse inference could be drawn against either party where a witness was equally available to be called by both. Little J said that no such general rule should be laid down:

99 The view expressed by Little J has since been adopted in this Court in CGU Insurance Ltd v CW Fallaw & Associates Pty Ltd,[20] and in the Federal Court in AMP Services Ltd v Manning.[21]

100 In this case, I have decided that no adverse inference should be drawn against either party for the failure to call Ken Apostolidis. He is a person of shifting allegiances and each party could reasonably be expected to have been wary of calling him to give evidence. Although he wished to give the appearance of seeking to enforce his agreement to share in the proceeds of this proceeding, and I was informed from the bar table that he has in fact commenced proceedings for this purpose against the plaintiff, he has nevertheless sought to assist the defendant in his defence of this case and has been regularly observed by me conversing cordially with the defendant and exchanging friendly glances with him.

101 The relevant factors placing Ken in one camp or the other are evenly balanced. The actions taken by Ken which are adverse to the defendant’s interests include suing his brother in this Court (it is common ground that this was a bitterly contested proceeding and there was a very heated exchange between Ken and the defendant once the proceeding had been dismissed following the conclusion of a settlement); reporting the defendant to the police and making statements adverse to the defendant’s interests; providing photographic and video evidence to the plaintiff for use in this proceeding; agreeing to provide funding to the plaintiff in return for a half-share of the proceeds of any judgment recovered, and advancing approximately $45,000 for that purpose; and refusing to waive privilege over the plaintiff’s witness statement in his proceeding against the defendant. The conduct of Ken which indicates that he is not someone who the plaintiff would be expected to call includes the plaintiff’s allegations (which were not challenged) that Ken commenced seeing the defendant again in late 2007; that Ken did not provide the promised funding which was the basis of the plaintiff’s agreement to pay him a half-share of the proceeds of the proceeding; the falling out between Ken and the plaintiff as a result; the plaintiff’s assertion that Ken has recently threatened her; the conduct of Ken in providing the plaintiff’s agreement with him and the Pollett spreadsheet to the defendant; and the commencement of proceedings by Ken against the plaintiff.

102 The next witness who was not called, in order of importance, was Steve Yong. The role of Mr Yong is explained below. There is no doubt that he could have given important evidence on relevant issues, in particular the extent to which the plaintiff worked in the business, whether the plaintiff participated in any significant business decisions, and whether the defendant had engaged in tax fraud. There was no evidence that Mr Yong had had a falling out with the defendant; this was put to the defendant by counsel for the plaintiff and he denied it. In these circumstances, Mr Yong – who lives in either Melbourne, Malaysia or a combination of both and does not appear to be unavailable for any reason – was equally available to both parties to call to give evidence. No party offered an explanation for their failure to call him as a witness.

103 The plaintiff could have been expected to call Mr Yong because there is no evidence that he bears her any ill will. Indeed, he provided her with a (false) letter stating that she was employed by Imex on a particular wage, in order to assist the plaintiff to obtain some finance over a property bought in her name on trust for her mother. In these circumstances, the failure of the plaintiff to call him as a witness is unexplained.

104 As to the defendant, Mr Yong was his previous business associate or business partner. It is likely that the defendant did not call him as a witness because of the damage which he could do to the defendant on the issue of tax fraud.

105 In my view, the plaintiff’s failure to call Steve Yong as a witness should lead to an inference being drawn against her that she feared his evidence would not assist her case as to the extent of her involvement in the business. I can think of no other explanation. Having regard to my findings on the issue of tax fraud, the plaintiff could not have feared to call him for that reason. The question remains: why did she not call him to support her evidence of contributions to the business? As appears hereafter, there are other reasons for rejecting the plaintiff’s evidence on this issue. However, the inference which I draw against her in this regard adds to my degree of satisfaction in making those findings. For the avoidance of doubt, in the absence of such an inference being available, I would in any event have made those findings.

106 An adverse inference should also be drawn against the defendant. For the reasons stated below, I am satisfied to a high degree that he engaged in tax fraud. Although it is unnecessary to rely upon an inference that the evidence of Steve Yong would not have assisted the defendant on this issue, I nevertheless draw that inference. It is another factor which supports my strong view on that issue.

107 The next witness to consider is the defendant’s other brother, Anestis. In order to meet a submission that she failed to call Anestis Apostolidis to give evidence on her behalf, evidence was given that the plaintiff and her legal advisers had made efforts to contact Anestis but had been unable to locate him. In these circumstances, they sought to rely upon a witness statement and affidavit of Anestis prepared in 2003.

108 I am not prepared to draw any inference adverse to the plaintiff based on the failure to call Anestis as a witness. I accept that neither she nor her lawyers know how to locate him. On the other hand, the defendant, although initially evasive on the subject, admitted that he has a belief as to the whereabouts of Anestis, that he is in Melbourne and that he believes that he could ‘find him’. The defendant denied having any ongoing dispute with Anestis.

109 The plaintiff’s application to rely upon the witness statement and affidavit sworn by Anestis Apostolidis in 2003 was based upon s 55(5)(c) of the Evidence Act 1958 (Vic). That sub-section provides for the admission of evidence in a document where the maker of the relevant statement ‘cannot with reasonable diligence be found or identified’. However, that does not mean that the statement thereby becomes admissible. The Court retains a discretion under s 55(9) to reject any statement ‘if for any reason it appears to it to be inexpedient in the interests of justice that the statement should be then admitted’. This is such a case. The evidence of Anestis contained in the witness statement and affidavit should not, in the interests of justice in this case, be admitted. This is a case which depends almost entirely upon credit. Counsel for both parties urged upon me the consequent need to allow lengthy oral evidence to be given and even lengthier cross-examination. The weight to be attached to the evidence of Anestis in the absence of cross-examination, or even oral evidence in chief, would be of so little weight that the interests of justice would not be served by admitting his untested witness statement or affidavit.

110 The other witnesses are of lesser importance and the issue of any inference arising from the failure to call them is considered below during consideration of the evidence.

111 The plaintiff was born on 6 April 1961. She is presently 48 years of age. Her parents were both Croatian immigrants. Her father died in 2001. Her mother, Maria, is still alive. She has two younger sisters, Vesna and Jasenka. She is and has at all relevant times been in regular contact with her mother and Jasenka, but has less current contact with her sister Vesna.

112 The plaintiff moved to Melbourne in 1973 at the age of 12, and has resided in Melbourne since that time.

113 The plaintiff was first employed in the furniture trade after leaving school aged 16. She worked at ‘Bartolo Home Furniture’ in St Albans and said that she gained experience in furniture sales, selection of product and store displays. She worked there for three years until she married Graham Scott, a policeman, in 1980. She was then aged 19. The marriage lasted for approximately eight years and they parted on good terms. There were no children of the marriage.

114 The plaintiff said that during her employment at Bartolo Furniture she learned a great deal about the furniture sales industry, including selling techniques, dealing with product representatives, strategies to choose appropriate furniture, fabrics and colours and ‘all other things that one does such as writing out receipts and whatnot in a business such as that.’ In giving this evidence, and other evidence, the plaintiff attempted to portray herself as a woman who had considerable experience in the furniture retailing industry before she met the defendant and as a woman who was capable of providing the defendant with assistance in the development of his furniture retailing business.

115 The plaintiff is of the Catholic faith and made much in her evidence of being ‘a strong Catholic’ to whom marriage and children are very important.

116 In the second half of 1991, the plaintiff and her mother purchased a home at 9 Byfield Street, Reservoir, for the sum of $107,000 (the ‘Byfield Street home’). The plaintiff was living at this house when she met the defendant in February 1993.

117 Following her divorce, the plaintiff had a series of jobs as a sales assistant in the retail industry. When she met the defendant, she was employed as a sales assistant by ‘Jack in the Box’, a retailer of up-market gifts and homewares.

118 The defendant, John Ioannis Apostolidis, also known as Jannis or Janni, was born in Greece on 1 September 1961 of Greek parents. He is presently 47 years of age. He grew up in Belgium and migrated to Australia in 1981. He has two brothers, Anestis and Kyriakos, otherwise known as Ken. The defendant also has two sisters. The eldest, Georgia, is now deceased. The surviving sister is Anna Maria.

119 The defendant was educated in the Dutch language, as he grew up in ‘the Flemish heartland of Belguim’. Later, his parents moved to Brussels, and he became fluent in French. Having lived in Australia for 28 years, the defendant is also fluent in English, albeit with a heavy accent and some difficulties with tense. He also speaks Greek. In order of proficiency, he speaks Dutch, French, English and Greek. On the other hand, his brothers and younger sister, Anna Maria, were educated in French, which is their primary language. Accordingly, the defendant converses with them primarily in French. The defendant said that he spoke with his brothers about business matters in French at all times.

120 When he arrived in Australia, the defendant initially worked as a welder in factories. He subsequently worked night-shift at the Hilton Hotel in Melbourne as a porter, and later as a waiter at the Southern Cross Hotel. In August 1989 he started working at ‘Cut Price Furniture’, a furniture shop located at 21 Atherton Road, Oakleigh. He learned the furniture business and decided to commence his own.

121 Soon after his arrival in Australia in 1981, the defendant was married to Zoe Apostolidis (nee Kotsiou) in January 1982. Their son, David, was born in September 1982. The defendant and Zoe separated in the late 1980s and their marriage was later dissolved.

122 In about August 1990, the defendant opened his own furniture retail shop at 49 Atherton Road, Oakleigh. The business was known as ‘Janni’s Furniture and Bedding’. Later in 1990, the defendant opened another furniture retail shop in nearby Portman Street, Oakleigh. Subsequently, that second shop moved into the ‘Central Shopping Centre’ in Oakleigh and became known as ‘Central Furniture’. The businesses were conducted by a corporate entity, DSK Holdings Pty Ltd. In order to comply with the Corporations Law at the time, the defendant held 99 per cent of the shares and his brother, Ken, held 1 per cent of the shares.

123 The defendant was operating both shops at the time he met the plaintiff and commenced a relationship with her.

124 The businesses were run by the defendant with the assistance of his two brothers. Ken worked full-time in the business until he fell out with the defendant in about January 2000. The defendant described Ken as ‘my assistant’ and said he did mainly manual work. Anestis worked less frequently and, according to the defendant, did so when he felt like it. He was not paid a regular wage. According to the defendant, he was paid ‘token money’ when he worked.

125 According to the plaintiff, Anestis worked ‘for us’ until approximately 1994 when, as a result of ‘a huge argument’ between Anestis and the defendant, there was a physical altercation between them during which Anestis accused the defendant of cheating him and ‘everyone you’ve ever known to make yourself rich’. As a result, the defendant returned some money to Anestis and, according to the plaintiff, ‘we never saw Anestis again. It was – that was it.’

126 The defendant denied that he had a heated argument with Anestis or that Anestis lent him any money in connection with his business. The defendant said:

127 In January 1992, the defendant purchased a home at 13 Dowling Road, South Oakleigh (sometimes called ‘Clarinda’), for $220,000 with a loan of $100,000 (the ‘Dowling Road home’). The defendant was living at this house when he met the plaintiff.

128 The plaintiff met the defendant on 13 February 1993, a date that she described as ‘the evening before Valentine’s Day’. It was an arranged meeting at the suggestion of her mother’s de facto partner, who the plaintiff referred to as ‘my step-father’, Con Kazatzoglou. Con knew the defendant because he delivered furniture to the defendant’s business.

129 The plaintiff was not challenged in cross-examination as to the accuracy of her recollection that she first met the defendant on 13 February 1993. The plaintiff’s evidence was supported by that of her mother, Maria. Maria’s evidence in this regard was also not challenged in cross-examination. In cross-examination the defendant said that he did not recall when he first met the plaintiff. He speculated that it could have been March, April or even May. I find that the meeting took place on or about 13 February 1993.

130 The arranged meeting was attended by the plaintiff, her mother, her ‘step-father’ Con, the defendant and his brother, Anestis. It was at the Preston RSL Club. The plaintiff said that she found the defendant ‘extremely forward’ and ‘a little bit too over the top and ... I wasn’t happy to see him again.’

131 The plaintiff said that the defendant then began ‘calling and calling and calling’ on the telephone every day, sometimes two or three times a day. Eventually, he persuaded her that they should go out to dinner. The plaintiff thought that they dined at the Southern Cross Hotel, that the defendant told her he had previously worked there as a waiter, and that he appeared ‘very proud of the fact that he could pull out large amounts of cash to show to the waiters that still knew him and also [to] impress me with the amounts of money he was pulling out’.

132 The plaintiff said that this dinner occurred approximately three weeks after they met, in late February or early March 1993.

133 There followed a romance in which the defendant impressed the plaintiff. She said that he was ‘extremely charming’ and acted like a gentleman. He initially made no sexual moves towards her, gave her flowers and paid for extravagant meals with champagne. He appeared to have a good sense of humour and the plaintiff became attracted to him. There was no cooking done during this period and the plaintiff did not visit the defendant’s home for some months.

134 According to the defendant, he gave his business card to the plaintiff when they met at the Preston RSL and she called him approximately three to five weeks later. At this time, the plaintiff was still involved with another man, whom she described as a ‘soccer fanatic’, and the defendant was involved with another woman, Kay Corbett.

135 The defendant could not recall where he first took the plaintiff on a date. He said that he picked her up from her home and took her to dinner and then dropped her back home. He said it was at a local restaurant. He was prepared to concede that it was possible that, during the initial dating period, he took the plaintiff to dinner at the Southern Cross Hotel or at the Melbourne Oyster Bar, but did not believe he did. He denied the plaintiff’s evidence about a lavish dinner at the Southern Cross Hotel and him trying to impress his ex-work colleagues with large amounts of cash.

136 The defendant said that he and the plaintiff dined mainly in Chinatown, although he did have a recollection of dining with her at the restaurant on the 40th floor of the Sofitel Hotel.

137 Soon after the plaintiff met the defendant, on 26 March 1993, ‘Jack in the Box’ closed and the plaintiff became unemployed. As a result, the plaintiff applied for unemployment benefits. The application is dated 1 April 1993. The plaintiff said that she made this application because she needed money in order to pay the mortgage on the Byfield Street home. She commenced receiving payments of $282.07 per fortnight from Centrelink. As appears below, the plaintiff continued to receive unemployment benefits long after she was entitled to do so.

138 The plaintiff alleges that she and the defendant commenced cohabitating as de facto partners in May 1993. The defendant denies this and contends that they did not commence living together as de facto partners until in or about December 1993. This issue is resolved below.

139 The plaintiff said that from the time she commenced living with the defendant she performed all of the domestic duties including shopping, cooking, cleaning, laundry, ironing and like matters in the homes which they shared. There is no dispute that this is so, although the defendant says the plaintiff has exaggerated her domestic role.

140 Further, the plaintiff says that she also performed the role of ‘step-mother’ to the defendant’s son, David, when he was staying with them on weekends and for half of every school holiday period. According to the plaintiff, she and the defendant’s ex-wife, Zoe, developed a good relationship as a result of their respective roles in caring for David. The defendant and Zoe acknowledged that the plaintiff had contact with David, but said that the plaintiff has exaggerated the frequency and closeness of that contact. These issues are resolved below.

141 By a letter dated 8 June 1993 from Centrelink, the plaintiff was informed that her unemployment benefits (called a ‘Jobsearch allowance’) were being reviewed by the Department of Social Security. By this time, according to the plaintiff, she was living in a full-time de facto relationship with the defendant and was jointly interested in the business. In her evidence in chief, the plaintiff admitted that she told lies throughout the Centrelink review document which she posted back on 21 June 1993. She lied when she said that her “marital” status had not changed. She lied when she said she did not have a partner who was employed. She lied when she said that her accommodation details had not changed (the letter was addressed to her at 9 Byfield Street). She lied when she said that her income details had not changed. Her case is that she was working in the business by this time. As a result of these lies, her unemployment benefits continued.

143 Later, on 20 July 1993 the plaintiff signed as true and correct a record of interview with an officer of the Department of Social Security. From the content of the statement, it is apparent that someone had given information to the Department, or the Department had otherwise come to understand, that the plaintiff may have been living in a de facto relationship with the defendant. The plaintiff denied this and otherwise made other false statements in the statement which she signed. She said that she told lies in this statement at the insistence of the defendant because of his great hatred for the Tax Office. She said that before she went to the interview at which the statement was taken, she discussed the forthcoming interview with the defendant, and he made the following statements:

144 At the time the documents were completed, and the plaintiff continued to receive social security benefits, she was on extremely good terms with the defendant. She described him at this stage as her ‘Prince Charming’. He had not yet been violent to her in any way, shape or form. Accordingly, there was no threat made to the plaintiff to engage in this dishonesty. In short, the plaintiff admitted in her evidence in chief to deliberately defrauding the Commonwealth Government of social security benefits from about June 1993 until, at least, the commencement of alleged violence and threats against her by the defendant in late February 1994. The only excuse which the plaintiff can offer for this dishonest conduct is that she needed the money to pay her mortgage over the Byfield Street property and for joint living expenses with the defendant. Further, she says that she was prepared to engage in this dishonest conduct because it would assist herself and the defendant to jointly swell their assets. To say that this reflects poorly upon the credibility and character of the plaintiff is a gross understatement. Her obviously criminal conduct will be referred to the Attorney-General to take such steps as he feels appropriate, including referring the matter to the appropriate Commonwealth Government authorities.

145 The plaintiff’s evidence that one of the reasons for her lying to the Department of Social Security in June 1993 was that the defendant told her she could cease claiming unemployment benefits when the home owned by her and her mother was sold is obviously false. Even on her own version of events, there was no suggestion in June 1993 that she and her mother would sell their home. This obvious error made by the plaintiff provides an example of her giving rehearsed evidence, as if in accordance with a script.

146 In any event, following the receipt of the net sale proceeds of the sale of the Byfield Street property, the plaintiff continued to receive unemployment benefits. She said that she only continued to seek and retain these benefits because the defendant insisted that she do so. She gave the following evidence:

147 In the end, the unemployment benefits ceased when, according to the plaintiff, in about April 1995 she was required by the Department of Social Security to attend a job interview at Myer Chadstone. The relevant events are described below.

148 The defendant denied any knowledge of or participation in the receipt of unemployment benefits by the plaintiff. He said that he had ‘absolutely no idea that she was on any benefits’ until some months after a trip to Bali in December 1994. At that time, the defendant intentionally opened a letter addressed to the plaintiff and noticed that it concerned unemployment benefits. He said that he discussed this with her and that ‘I was made to believe it’s none of my business and I did not pursue it any further.’

149 I reject the defendant’s evidence in this regard. I find that, from at least May 1993 when he commenced cohabitating with the plaintiff, he had full knowledge that the plaintiff was receiving unemployment benefits to which she was not entitled. It is wholly unnatural that de facto partners would not discuss such an important matter.

150 The plaintiff gave evidence of the defendant proposing marriage to her in November 1993 and giving her a ring to seal that proposal. She said that she accepted. The defendant denies making any proposal of marriage, although he does acknowledge giving the plaintiff a ring at some stage. This issue is resolved below.

151 During November 1993 the defendant commenced looking for larger business premises. Premises at 1/200 Princes Highway, Dandenong, were located and a preliminary deposit was paid in December 1993. Two days later, the plaintiff and her mother placed their Byfield Street home on the market for sale. The plaintiff contends that the defendant asked her to sell the Byfield Street home in order to provide funds for the expansion of his business consequent upon the acquisition of the property at 1/200 Princes Highway, Dandenong. The defendant denies this. This issue is resolved below.

152 On 17 December 1993 a contract of sale was entered into for the purchase of 1/200 Princes Highway for the sum of $600,000. This contract was not proceeded with, and a subsequent contract was entered into for a purchase price of $580,000.

153 On 24 December 1993, the plaintiff and her mother signed a contract note for the sale of the Byfield Street home.

154 According to the plaintiff, the defendant visited the Byfield Street home on only two occasions before the settlement of its sale. The plaintiff said that about two weeks after the Byfield Street home had been sold, the defendant visited her mother at the property for the first time. She said that both she and Jasenka were living there at the time. She said that the defendant asked her mother to invest (‘put in’) her half of the sale proceeds of the Byfield Street home into the business and said to her ‘Maria, if you do this, you will become a very wealthy woman and you will help us greatly build our joint future together. You will be helping your daughter a lot more.’ The plaintiff said that her mother refused this request. The defendant denies saying the words alleged. The defendant said that he at no time asked Maria Kalenik to invest her share of the proceeds of sale of the Byfield Street home in his business. He gave his evidence as though Maria Kalenik played no part in his life, notwithstanding his relationship with the plaintiff, and volunteered ‘I didn’t meet the lady many times’.

155 According to the plaintiff, the defendant did not sleep one night at the Byfield Street home at any time. I accept her evidence in this regard.

156 The sale of the Byfield Street home was settled on 7 February 1994. Following settlement, the plaintiff received approximately $102,000 into her Bank of Melbourne passbook account, being the net sale proceeds. The plaintiff withdrew $51,100 and paid it to her mother, as her one-half share. She retained the balance in her Bank of Melbourne passbook account (‘the passbook account’). At this stage, the balance was $51,202. The plaintiff said that, following the payment to her mother, the defendant took possession of her Bank of Melbourne passbook (‘the passbook’) ‘almost immediately’.

157 The plaintiff said that she was prepared to hand possession of the passbook to the defendant because he promised her that their respective assets were owned jointly by them and they would be together for the rest of their life:

158 The plaintiff said that the defendant thereafter maintained control of the passbook until the passbook account was closed in October 1997. The only time the passbook was in the plaintiff’s possession was when she was given it by the defendant for the purpose of making a specific withdrawal at his agreement or direction. As soon as the agreed withdrawal was made, she returned the passbook to the defendant. According to the plaintiff, withdrawals were made for domestic expenditure on joint living expenses, for David’s requirements (including school fees, uniforms and clothing) and for business purposes. The defendant wholly denies this. He said that the passbook at all times remained in the plaintiff’s possession and she made withdrawals from it as she saw fit for her own purposes. He said that he provided her with a weekly cash allowance for their joint domestic expenditure. These issues are resolved below.

159 Following the receipt of the sale proceeds of the Byfield Street property, the plaintiff says that the defendant changed from being ‘Dr Jekyll to Mr Hyde’. According to the plaintiff, within a week or two of the defendant taking possession of the passbook, he commenced regularly beating, raping and subjecting her to verbal abuse for the duration of their relationship. In the plaintiff’s words:

160 The defendant denies all allegations of violence, rape and sexual assault. These issues are revolved below.

161 On 16 March 1994 the shelf company incorporated at the request of the defendant, Azura Pty Ltd, entered into a contract to purchase 1/200 Princes Highway. By this time, the defendant had entered into a contract to sell his Dowling Road home.

162 On 26 March 1994, settlement of the sale of the Dowling Road home took place. The defendant rented a unit at 1/3 Banksia Street, Clayton, and moved there with the plaintiff to live (the ‘Banksia Street unit’).

163 The plaintiff alleges that she was actively involved in preparing the Dowling Road home for sale and was present during inspections by prospective purchasers. This is disputed by the defendant

164 The plaintiff’s sister, Jasenka, gave birth to her second child on 1 April 1994. A few days later, the defendant accompanied the plaintiff to visit Jasenka in hospital. Apart from this occasion, the defendant had no definite recollection of meeting either of the plaintiff’s sisters. He acknowledged that there was one other occasion when he went to visit one of her sisters, but could not recall whether this was Jasenka or Vesna.

165 A further contract of sale was entered into by Azura Pty Ltd for the purchase of 1/200 Princes Highway on 20 April 1994. The defendant continued his efforts to obtain finance for the purchase. In the course of doing so, it became apparent that it would be necessary for the defendant’s brother Ken, and his wife Anna, to provide a mortgage over their residence. They agreed to do so. This mortgage was discharged in about early 1998, when the defendant refinanced the borrowings secured on the premises. Also, at about this time, Ken was removed as a director and shareholder of DSK and Azura, as the law was altered to permit single person companies.

166 The purchase of 1/200 Princes Highway, Dandenong was settled on 27 May 1994. The defendant was able to complete the settlement by the use of the net proceeds of sale of the Dowling Street home, a bank loan of $415,000 and use of the DSK overdraft facility of $20,000. None of the plaintiff’s moneys were used to effect settlement. For convenience, I will hereafter refer to this property as the ‘Dandenong shop’.

167 In about January 1995, the defendant commenced importing containers of furniture manufactured in Malaysia. He dealt principally with a manufacturer called “Casina” and another called “Virtual Couches”.

168 In or about April 1995, the defendant and Steve Yong, a full-time employee of the defendant at the Dandenong shop, set up an importing company called Imex Pty Ltd. The purpose of Imex was to reduce sales tax liabilities. The defendant owned 55 per cent and Mr Yong owned 45 per cent. The defendant had a majority interest because his company, DSK, paid all of the expenses of Imex. During the period that the defendant cohabited with the plaintiff, Imex imported leather lounges and other furniture from Malaysia and, on occasion, from Thailand. Imex ceased trading in June 2000 when the GST was introduced and there was no longer any sales tax benefit from operating a separate importing company. At about this time Mr Yong ceased his business association with the defendant.

169 In or about April 1995, the plaintiff was required by the Department of Social Security to attend a job interview at Myer Chadstone. According to the plaintiff, prior to this interview the defendant said to her words to the effect of: ‘You make sure you go in there dressed badly, look scruffy and you make sure that you do not come back home with a job. You are needed at our business.’

170 The plaintiff said that she ignored this direction and presented herself well and ‘actually got the job’. However, she worked there for no more than about two months. According to the plaintiff, the defendant insisted that she resign, following another violent episode.

172 While the plaintiff was giving this evidence, she broke into tears. In particular, she saved her heaviest tears for the description of the defendant ripping her blouse in front of David. However, in cross-examination, the plaintiff admitted that she could not in fact recall whether the defendant ripped her blouse on this occasion. This says much about the unreliability of the plaintiff as a witness. Even if it be accepted that there was a violent episode at this time, it demonstrates that the plaintiff has a proven propensity to embellish her evidence by alleging violence inflicted upon her by the defendant.

173 According to the plaintiff, notwithstanding the defendant’s firm attitude that she should remain on social security benefits for as long as possible so as to get money back from the taxation authorities, she made no further application for unemployment benefits and the defendant did not insist that she do so.

174 The defendant denied any knowledge that the plaintiff worked for Myer Chadstone for a short period in about April 1995. He denied ever having driven her to or from that workplace, and specifically denied the incident in which he allegedly ripped her blouse. He said ‘I have never assaulted that woman in any way. Never.’

175 In May or June 1995, the defendant commenced a relationship with a woman named Meghan Courtney. They subsequently had a child together. Both the defendant and Meghan Courtney gave evidence that the plaintiff ceased living with the defendant while they conducted a relationship for two periods. First, for about eight months between May/June 1995 and February 1996. Second, for about four months between May/June 1996 and September 1996. The plaintiff denies that was so, and contends that she lived with the defendant on a continuous basis throughout those periods.

176 Further, as appears below, the plaintiff met Meghan Courtney on a number of occasions. There are substantial disputes as to when these meetings took place, where they occurred and what occurred. There are also substantial disputes in relation to the dealings between the plaintiff and the defendant in the aftermath of the plaintiff’s alleged dealings with Meghan Courtney. All of the issues concerning Meghan Courtney are resolved below.

177 There is no dispute that the plaintiff lived with the defendant between February 1996 and May/June 1996. During that period, she accompanied the defendant on a trip to Malaysia.

178 In April 1996 the defendant commenced trading from a second shop in the Forest Hill Chase Shopping Centre (‘the Forest Hill shop’). From this time, Steve Yong left his full-time position working at the Dandenong shop and commenced working full-time at the Forest Hill shop. The defendant secured a favourable rental agreement from the manager of the shopping centre, Bill Edwards.

179 During the course of her relationship with the defendant, the plaintiff undertook two courses. The first of these was a part-time floristry course which she undertook for 21 hours during August 1997.

180 At some stage during 1997, the name of the business conducted from the Dandenong shop was changed from Central Furniture to ‘Leather Lounges Direct’. This name change resulted from the direction in which the defendant’s business was progressing, involving principally the sale of leather lounges imported from Malaysia, and also from the fact that the defendant commenced a closing down sale in respect of the Central Furniture business. This closing down sale was commenced because a very favourable opportunity to lease the Dandenong shop to the McEwans Hardware Company became available. However, when that opportunity fell through, the defendant determined to continue trading from the Dandenong shop. The fact that a closing down sale under the name of Central Furniture had been conducted was a motivating factor in the change of name to Leather Lounges Direct.

181 In about August 1997, the defendant became interested in a Malaysian company, Dalcy (M) SDN BHD. This company arose out of discussions between the defendant, Steve Yong and the factory manager of Virtual Couches. The idea was that Dalcy would manufacture leather lounge suites in Malaysia and DSK would purchase all of Dalcy’s output.

182 The plaintiff said that she packed the defendant’s suitcase when he went overseas to establish Dalcy. She described a small men’s black clutch bag in which the defendant had crammed $100 bills to such an extent that it was completely full and she needed to assist him to zip it up. From the plaintiff’s description this bag appeared to be about 30 centimetres by 20 centimetres and about 10 centimetres deep.

183 The defendant denied this evidence. He said that, in return for agreeing to purchase all of the production, he was given a 20 per cent interest in Dalcy. He said that he contributed no cash.

184 Until about 2000, when the defendant relinquished his interest in Dalcy, DSK purchased all of the production by Dalcy. However, this was not all of the furniture imported by DSK. The defendant said that DSK purchased ‘much more from other sources than Dalcy.’

185 In about October 1997, the defendant purchased a Mitsubishi Mirage motor vehicle for the plaintiff, at a cost of $16,700. Up to this time, the plaintiff had been using his Ford motor vehicle, as he usually took the truck used by the business when he drove to work. The defendant said that he bought the car for the plaintiff because he was exasperated that she would not buy one from her own money. The car was registered and insured in the plaintiff’s name, with the defendant paying for all costs. She took the car when the parties separated in March 2000.

186 On 13 December 1997, the defendant signed a contract of sale to purchase a residential property at 11 Yarrabee Court, Mount Waverley, for $290,400. The defendant obtained a mortgage loan from the Commonwealth Bank in the sum of $150,600 in order to complete the purchase. No moneys of the plaintiff were used for the acquisition of the Yarrabee Court property.

187 Commencing in February 1999, the plaintiff engaged in a full-time course in beauty therapy. The course lasted until November 1999. It appears that the course was five days a week during the day. The defendant paid for the course.

188 The defendant contends, and the plaintiff denies, that from in or about March 1999 until the end of their relationship in March 2000, he and the plaintiff were effectively separated under the one roof. This issue is resolved below.

189 The Forest Hill shop closed in late March 1999. The defendant then commenced trading from a shop situate on Frankston-Dandenong Road. That shop was called ‘Salotti Italia’. ‘Salotti’ means lounges and ‘Italia’ means Italy. This shop traded until about June 2000. Towards the end of this period of operation, the defendant also operated a warehouse on the corner of Frankston-Dandenong Road and Abbotts Road on a month to month basis.

190 As appears above, the plaintiff commenced a beautician’s course in about February 1999. She applied for an Austudy allowance on 12 April 1999. She obtained the allowance and was paid it until November 1999, when she completed the beautician’s course. According to the plaintiff, it was the defendant’s idea that she make an application for Austudy benefits. She gave the following evidence:

191 As with the application for continued unemployment benefits, the plaintiff told lies throughout her application for the Austudy benefit. However, she did answer some questions correctly. In particular, even though she says that she had been specifically instructed by the defendant, under threat of violence, that she should not reveal her true address or contact details, she recorded in her application form that she was residing at 11 Yarrabee Court, Mount Waverley, her true address, and gave the telephone number for that address. She gave an implausible explanation for doing this:

192 The plaintiff was asked what the Austudy money was used for in 1999. She gave the following evidence:

193 This evidence was obviously false. By 1999, the Bank of Melbourne passbook had been closed for some time, and the proceeds invested by the plaintiff in a term deposit. This is another example of the plaintiff’s evidence being rehearsed in accordance with a script, and the script being applied to the wrong set of circumstances.

194 If the plaintiff’s explanation as to the reason why she applied for the Austudy benefit and retained it is correct, she may have some excuse for her behaviour. However, as appears below, I do not accept the plaintiff’s evidence of repeated assaults by the defendant on her. Accordingly, this is yet another example of the plaintiff engaging in deliberate dishonest conduct for the purpose of stealing money from the Commonwealth Government. The plaintiff said that she feels extremely guilty about what she has done, but that affords no excuse.

195 The defendant denied that he had any knowledge or involvement in the plaintiff’s application for Austudy benefits. He said that he did not learn of the fact that the plaintiff had applied for and received an Austudy benefit until he found it out during the course of this proceeding. I reject that evidence. I find that the parties were a de facto couple at this time and that they naturally discussed such an important issue.

196 The plaintiff said that she began to mistrust the defendant following her discovery that the defendant had in fact fathered a child with Meghan Courtney. Accordingly, while he was overseas in September 1999, she took into her possession 55 books of the business (the ’55 books’). She said that she was in “the fax room” at the business premises and noticed the 55 books in cardboard boxes in that room. This was unusual, because the remainder of the books were kept in the storeroom. The plaintiff said that she was in the fax room because the facsimile machine beeped and, when she went to check it, she saw the cardboard box with the 55 books in it and ‘on an impulse ... decided to take them to protect [her] interests’. She said that she believed the defendant would have left the 55 books in the fax room, because none of the sales staff were allowed to go into that room.

197 The plaintiff was asked why she did not take more than the 55 books, which relate only to a relatively short period of the operation of the business. She responded that she did not wish to be observed by other staff going into the storeroom and taking books away, as she was afraid that the defendant might find out and become ‘extremely violent towards me’.

198 The 55 books were not discovered by the plaintiff to the defendant until March 2008, shortly before the trial of the proceeding was then due to commence in April 2008. In circumstances where the proceeding was commenced in November 2000, the plaintiff was required to explain why she had not discovered the 55 books until this late stage. Her response in evidence in chief was that she took the 55 books away and put them into her mother’s garage for storage. She said that she then ‘forgot about them completely’. She proffered the following explanation for forgetting about such critical documents:

199 This explanation is totally unacceptable. It bears all the hallmarks of fabrication and I find that it is just that. From the time she commenced this proceeding, it appears that the plaintiff has been concerned with virtually nothing else. It has become an obsession for her and Mr Pollett.

200 In cross-examination, the plaintiff gave an even more unbelievable explanation for not having discovered the 55 books. It was put to her that she did not commence the medication which allegedly interfered with her memory until at least May 2002, when she was involved in the first car accident. By that time, this proceeding had been on foot since November 2000, a period of nearly 18 months. In these circumstances, the plaintiff was required to explain why it was that she did not bring the 55 books to the attention of her lawyers prior to the time at which she commenced taking the allegedly memory-altering medication. She gave the following explanation:

201 Later in her cross-examination, the plaintiff made it plain that she deliberately refrained from giving the 55 books to her lawyers, on the stated basis that she was only being represented by a junior solicitor in whom she had no trust:

202 I have no hesitation in rejecting this explanation as a further concoction by the plaintiff.

203 The evidence does not enable a firm conclusion as to how or when the plaintiff obtained possession of the 55 books. As appears below, there is no dispute that the 55 books relate to the defendant’s business. Further, as appears below, I reject any challenge to their authenticity. However they were obtained, they are important objective evidence in resolving the allegation that the defendant has engaged in tax fraud, and in determining the true level of profitability of the business for the purposes of valuing it at the date of separation.

204 The plaintiff acknowledges that she left the Yarrabee Court home for a period of three days commencing on 28 January 2000, following an incident when the defendant returned from an overseas trip.

205 According to the plaintiff, the defendant arrived home early from his trip to Malaysia and the following events transpired:

206 The plaintiff says that she then collected some things, made arrangements to secure the home and went and stayed with her sister, Vesna, for three days. Vesna was not called to give evidence.

207 According to the plaintiff, she resumed living with the defendant after a three day period in the following circumstances:

208 I have no hesitation in rejecting this evidence. Although there may have been an argument during which the defendant was verbally abusive and threatening towards the plaintiff, and a glass door may have been cracked or broken during the course of the argument, I do not accept that the defendant punched the plaintiff or otherwise assaulted her during this altercation. The reasons for this appear below when dealing with the plaintiff’s allegations of violence in detail.

209 Further, I do not accept the plaintiff’s evidence as to the telephone conversation with the defendant on her mobile phone. By this time, the defendant had already commenced internet contact with his current partner, Amanda Simpson. He left Australia and travelled to visit her in America only 26 days later. On his return to Australia in early March, the defendant told the plaintiff that she had to leave his home because he had found another woman who was going to come and live with him. In these circumstances, it is highly improbable that, at this time, the defendant would have encouraged the plaintiff to return and live with him or that he would have done so by the use of threats. I reject the plaintiff’s evidence.

210 According to the plaintiff, the defendant asked her to leave their home on the Friday before St Patrick’s Day, 17 March 2000, ‘as he stated to me that he had found a new lady on the internet who was American. Her family was in oil and they were very rich and I had a week in which to get out.’

211 The defendant said that he finally asked the plaintiff to leave his home in the following terms:

212 The plaintiff did not leave immediately. In the few days that she remained at the defendant’s home, it appears that relations between them were relatively amicable. There was a discussion about the defendant paying money to the plaintiff, with the plaintiff first asking for about $20,000, the defendant offering nothing and then an amount of $10,000 being paid by the defendant to the plaintiff in cash. The plaintiff was also allowed to take the car which had been paid for by the defendant. During this period, the plaintiff and the defendant ate out at a restaurant on at least one occasion.

213 At the time that the parties separated, the defendant was conducting two businesses through DSK. First, the business of Leather Lounges Direct at the Dandenong shop. Second, the business of Salotti Italia in Frankston-Dandenong Road. He may also have been operating the warehouse on the corner of Abbott Street and Frankston-Dandenong Road at this time. However, nothing turns on this.

214 Four days after the parties separated, the plaintiff filed an application in the Magistrates’ Court for an intervention order against the defendant. In that application, the plaintiff alleged that her de facto relationship with the defendant ended on 17 March 2000 when ‘[she] left the relationship’. She made the following allegations of violence in her complaint and summons:

215 Coincidentally, or perhaps not, the plaintiff lodged her complaint and summons for an intervention order and obtained an interim ex parte order on the same day that Ms Simpson arrived in Australia to commence living with the defendant. Given the agreement between the parties that it was the defendant who terminated the relationship and asked the plaintiff to leave, it is inconsistent that the plaintiff would allege in her complaint that she left the relationship.

216 Reliance was placed upon the fact that the allegations of violence contained in the plaintiff’s application for an intervention order were made promptly after the parties separated. For the reasons given below, I do not accept the plaintiff’s evidence that the defendant assaulted her throughout the course of their relationship or that he ever raped her at knifepoint. At this stage, it is sufficient to note that the plaintiff made no allegation of rape in her application for an intervention order and that the interim intervention order obtained by her ex parte was discharged following a contested hearing in early April 2000. At that time, the magistrate must have taken the view that the plaintiff’s evidence of assault, and of her fearing continued assault or violent behaviour towards her, was of insufficient credibility to justify the continuance of an intervention order.

217 The defendant gave evidence as to the contested hearing of the plaintiff’s application for an intervention order. The defendant said that he recalled the plaintiff giving evidence that she had separated from him ‘on many occasions’ and that she ‘mentioned the 1995, 1996 separations’. I do not accept this evidence of the defendant. The issue of any separations during the course of the relationship between the parties is unlikely to have been relevant to the plaintiff’s application for an intervention order. The issue was whether the defendant had been violent towards the plaintiff or had threatened to be violent in the future. Further, for the reasons appearing below, I reject the defendant’s evidence as to the alleged separations during 1995 and 1996.

218 On 19 April 2000, solicitors then acting for the plaintiff sent a letter of demand to the defendant. In that letter, the plaintiff’s solicitors gave the defendant notice that she wished to pursue a ‘property settlement’ and sought that the defendant provide copies of relevant financial statements and tax returns for himself, DSK, Azura and Imex. No mention was made of Dalcy. Further, the defendant was asked to produce documentary evidence concerning the amount outstanding on the mortgages over the Yarrabee Court home and the Dandenong shop. Some reliance was placed upon this letter as evidencing that the plaintiff well knew about the structure of the defendant’s business, because she was able to name DSK, Azura and Imex. There is no weight in this submission. I do not consider it further.

219 After the plaintiff ceased living with the defendant, she continued to have a relationship with other members of his family. In particular, she remained friends with the defendant’s younger sister, Anna Maria, the defendant’s brother Ken and his wife Anna (until the recent dispute which is referred to above) and his older sister, Georgia (now deceased).

220 The plaintiff also gave evidence of a close relationship with the mother-in-law of Ken Apostolidis, Loula Gabrielidis. This evidence was led for the purpose of establishing that the plaintiff had a close family relationship with the defendant and his extended family, and also to demonstrate that Loula Gabrielidis is in a position to give relevant evidence about her observations of the plaintiff at the business premises. It was submitted that it is likely that she would have been present there from time to time because of the involvement of her son-in-law, Ken, and his wife, Anna. For reasons given below, I reject the evidence of Ms Gabrielidis.

221 By June 2000, the defendant had lost the lease of the premises from which the Salotti Italia business was conducted and was operating his second business from the warehouse property on the corner of Abbotts Road and Frankston-Dandenong Road. According to the defendant, it was not until shortly before this time that he learned of the opportunity to purchase the premises at 7/200 Princes Highway, Dandenong, on the opposite corner of the same complex in which the Dandenong shop is located. At this time, the Abbotts Road property was rented on a month to month basis, and the defendant was conscious that he needed another warehouse. He decided to purchase 7/200 Princes Highway. He paid $1,150,000 plus stamp duty and other costs. He paid cash and put the property in the name of a new company, Yarrabee Investments Pty Ltd.

222 From 1 July 2000, the defendant’s business was conducted by Yarrabee Investments Pty Ltd. It was submitted on behalf of the plaintiff that this shows conduct by the defendant intended to take assets out of her reach, following notice having been given of her intention to pursue a ‘property settlement’ claim against the defendant. I reject this submission. The defendant was at all times the sole beneficial owner of DSK, which conducted the business until 30 June 2000. He was also the sole beneficial owner of Yarrebee Investments Pty Ltd at all relevant times. If the plaintiff is entitled to an adjustment order in her favour in respect of the defendant’s assets, the business always remained one of the defendant’s assets through either DSK or Yarrabee Investments.

224 In early 2001, the plaintiff met Brian Pollett for the first time. As appears above, from soon after this time, Brian Pollett commenced assisting the plaintiff to manage her affairs, in particular this proceeding.

225 In 2002 Ken Apostolidis commenced proceedings against the defendant claiming a half-share in the business.

226 In May 2002 the plaintiff was involved in the first of two motor vehicle accidents in which she was injured. She says that she has been physically unable to work ever since.

227 In 2003, the trial of the proceeding brought by Ken Apostolidis against the defendant commenced. After a few days, it was settled. The plaintiff had agreed to be a witness for Ken Apostolidis. However, she did not give evidence prior to a settlement being reached. The plaintiff agreed that, at this stage, she was on very friendly terms with Ken Apostolidis.

228 In December 2004, the plaintiff and Ken Apostolidis entered into an agreement pursuant to which the plaintiff agreed to pay Ken Apostolidis half of the net proceeds of any judgment obtained by her in this proceeding. As appears above, the plaintiff contends that Ken Apostolidis has breached the agreement and she disputes that she is bound by it. Ken Apostolidis maintains that the agreement is enforceable and wishes to enforce it in the event that the plaintiff is successful and recovers a judgment in this proceeding.

229 According to the plaintiff, her relationship with Ken Apostolidis ceased to be a friendly one and became an unfriendly one from approximately late 2007 when, according to the plaintiff, Ken Apostolidis ‘started to see Janni quite a lot and I begged him not to do it and he just wouldn’t stop.’

230 The plaintiff said that her relationship with Ken Apostolidis deteriorated from that time and that in ‘possibly early 2008’ Ken Apostolidis threatened to kill her at her home by saying to her ‘Zorica, you are dead.’ I reject that evidence. I find that it was designed to distance the plaintiff from Ken Apostolidis in an endeavour to support the submission that adverse inferences should be drawn against the defendant for failing to call him as a witness.

231 In January 2006, the plaintiff was involved in a second motor vehicle accident in which she was injured. By this time, she was already unable to work as a result of her injuries arising from the first motor vehicle accident.

232 In 2007, a fire started in a property adjacent to the Dandenong shop. As a result, the remaining business records of DSK, which were stored at those premises, were destroyed.

233 The plaintiff said she went to the defendant’s Dowling Road home for the first time in early May 1993. The plaintiff described the events which took place in the following extraordinary terms:

234 The plaintiff said that she then took the defendant’s car, drove to her home, collected her belongings consisting of clothing, toiletries, jewellery and some crockery and kitchenware and returned to the defendant’s home where she commenced living with him as his de facto wife.

235 According to the plaintiff, she remained living with the defendant as his de facto wife on a continuous basis, at various addresses, from this time until 17 March 2000. The defendant disputes this, and says that there were substantial breaks in their relationship for some months. In addition, the defendant said that the plaintiff would leave his home ‘at many times ... for a few days to a week or even sometimes to nearly two weeks’. The defendant said that these occasions arose following arguments when he would ‘actually kick her out’ or, on other occasions, ‘she would just slam the door at me and go away.’

236 The plaintiff’s evidence that she commenced living with the defendant as his de facto wife in May 1993 was supported by her mother, Maria, and by her sister, Jasenka.

237 Maria Kalenik said that she had a specific recollection that the plaintiff commenced living with the defendant in ‘around May 1993’ because it was only three months after they met, which was in February 1993. She said:

238 If Maria is a credible witness, this is a credible reason for a mother to give for remembering the date that her daughter commenced living with a man. Such a fact is likely to stick in the mind of a mother, even after a long period of time has elapsed.

239 It was submitted on behalf of the defendant that this objectively reasonable reason given by Maria Kalenik for recalling May 1993 as the date her daughter went to live with the defendant was contradicted by evidence given by her in cross-examination, and should in any event be rejected because Maria Kalenik was an untruthful witness on this and other issues.

240 These submissions raise for consideration the general credibility of Maria Kalenik as a witness. Counsel for the plaintiff made submissions on the basis that Maria was an honest witness whose evidence should be accepted on all issues. Counsel for the defendant submitted that Maria Kalenik ‘is a social welfare fraud’ and a person with a motive to lie, both because of her interest in avoiding prosecution for that conduct and because she has a substantial financial interest in the outcome of the proceeding. Further, it was submitted that Maria gave evidence which indicated that she had been coached on the issues in the proceeding, including issues raised only during the course of cross-examination while there was an order for witnesses out of court, and that her evidence accorded with ‘the script’ prepared for the plaintiff’s case.

241 The evidence does not permit any conclusion to be drawn as to whether or not Maria Kalenik obtained social security payments under false pretences because she was living with Con Kazatzoglou at any relevant times. I make no such finding. Nor should any inference to that effect be made based upon the failure to call Con Kazatzoglou as a witness.

242 However, I accept that Maria Kalenik had a good reason to lie if she was so inclined. She has a very substantial interest in the outcome of the proceeding. She acquiesced in her daughter encumbering her home with a loan of approximately $150,000 for legal fees associated with this proceeding. The result was that her home had to be sold to repay the financier. She also lent another $10,000 to the plaintiff which according to the Pollett spreadsheet remains unpaid. The only prospect which she has of recovering her daughter’s consequent debts to her is if the plaintiff succeeds in recovering a substantial judgment in this proceeding from the defendant.

243 Further, I accept the submission that Maria Kalenik had obviously discussed the evidence in the case with the plaintiff, or at least with Brian Pollett, before she gave her evidence. I note that Maria lives with plaintiff and Mr Pollett. She gave a number of non-responsive answers to questions which indicated that discussions of the evidence had taken place. In particular, she volunteered that she had been to the Department of Social Security to discuss her social security status. The only way that she could have known of this issue was if the evidence in the case in relation to it had been discussed with her by somebody. Her denial that this was so reflects poorly upon her credibility as a witness. There were other aspects of her evidence where she volunteered non-responsive information, always in accordance with the script.

244 It is also necessary to be cautious in considering Maria’s evidence because of difficulties arising from the fact that she is a frail and elderly woman who appeared extremely nervous in giving evidence, that she gave her evidence with the aid of an interpreter, that there were difficulties in translation and, allied to difficulties in translation, because she was asked a number of lengthy and convoluted questions in cross-examination which gave rise to uncertainties and misunderstandings. Indeed, the interpreter at one stage interrupted the flow of cross-examination with the plea ‘could you please state your sentences shorter so you can be 100 per cent sure that it will get across’.

245 I conclude that much caution must be exercised in considering Maria’s evidence. Unless it is corroborated by other credible evidence, or otherwise accords with the probabilities, I will in general reject it. However, notwithstanding this, I do not accept the defendant’s submission that the inconsistencies between the evidence of the plaintiff and Maria on this issue should lead to the rejection of their evidence.

246 It was submitted that Maria Kalenik gave evidence in cross-examination which was inconsistent with the plaintiff’s version of events in two respects. First, that Maria acknowledged that the plaintiff did not decide to move in with the defendant and in fact move in with him on the very same day. Second, that when she was cross-examined, Maria gave a different reason for remembering that it was in May 1993 that her daughter moved in with the defendant.

247 I accept that the first inconsistency exists. As submitted on behalf of the defendant and as appears below, Maria’s version is the more plausible. It accords with that of the defendant. However, this aspect of the plaintiff’s evidence relates to the circumstances of her moving in with the defendant, not to when this actually occurred.

248 As to the second alleged inconsistency, the following exchange took place in cross-examination:

249 I accept that Maria was referring to the sale of the Byfield Street home in December 1993. However, reading the transcript of her cross-examination as a whole, it is apparent that there is a high degree of confusion arising from long and uncertain questions and from difficulties in translation. When the matter was finally put to her, Maria separated her recollection of the time that her daughter left home and the time that she and her daughter sold the Byfield Street home. Each of these events was ‘hard’ for Maria:

250 The plaintiff’s evidence as to the date she moved in with the defendant was also supported by her sister, Jasenka. Jasenka said she recalls that it was in about May 1993 that her sister moved in with the defendant to live because, soon afterwards, she moved in to the Byfield Street home. Jasenka recalled that this was on a date near the baptism of her daughter. The certificate of baptism is dated 6 June 1993. Jasenka said that, from this time until the Byfield Street home was sold and that sale was settled in February 1994, she resided at the Byfield Street home. She said that during this period the plaintiff was living with the defendant.

251 As with Maria, if Jasenka is a credible witness, she has an objective reason for being able to place an approximate date upon the time when the plaintiff commenced living with the defendant.

252 It was submitted on behalf of the defendant that Jasenka Kalenik was a dishonest witness whose evidence as a whole should be rejected. In particular, reliance was placed upon the fact that she has prior convictions for crimes of dishonesty arising from her unauthorised use of a credit card on two occasions. The owner of the credit card was not a complete stranger, but a friend. Her only justification for committing these crimes is that she needed the money at the time. That is no excuse for such dishonest acts.

253 Further, the evidence given by Jasenka was given in an aggressive and confrontational manner and contained numerous references to the script. I found her to be an unsatisfactory witness whose evidence should not be accepted unless corroborated by other credible evidence or in accordance with the probabilities.

254 For the reasons stated above, I found both Maria and Jasenka to be unsatisfactory witnesses in a number of respects. However, taking the evidence as a whole, I see no reason to disbelieve them on this issue. Their evidence is consistent with that of the plaintiff, the reasons given by them for remembering the approximate time that the plaintiff commenced living with the defendant are objectively credible reasons, and there are other aspects of the evidence which support them on this issue. These are dealt with below.

255 The defendant disputes the whole of the evidence given by the plaintiff concerning the breakfast conversation, and disputes that he and the plaintiff commenced living together from May 1993. According to the defendant, they first had sex at the Byfield Street property. Following this, he and the plaintiff spent time together without living together at both of their houses in the period between May and December 1993. He said that they stayed together mostly at his home, and not the plaintiff’s. This was not a continuous arrangement but was that of a ‘boyfriend and girlfriend’ who slept over at each other’s homes. When they slept at the plaintiff’s home, her mother was not there.

256 The defendant said that, as time went by, the sex and sleeping over at their respective premises increased in frequency to between two and four nights a week. He said that he did not commence continuous cohabitation with the plaintiff until she finally moved out of her own home in February 1994, following its sale in December 1993. He acknowledged that the plaintiff usually lived with him at his home from the time that the plaintiff sold her home in December 1993, but said that she often went back to stay at her home pending the settlement of its sale.

257 The defendant described the process of the plaintiff moving into his home to live on a continuous basis as ‘a gradual process’ over the final months of 1993 and the early months of 1994 until settlement of the sale of the plaintiff’s home. He said that he was in a relationship with Kay Corbett until late 1993 and that the plaintiff did not commence living with him during the period of his relationship with Ms Corbett. His evidence of a continuing relationship with Ms Corbett in late 1993 was supported by Michael Stamatopoulos, who said that he recalled meeting the defendant and Ms Corbett on a social occasion in late 1993. He said he recalled this was about the time he split with a long-standing girlfriend. As appears below, I have doubts about the veracity of Mr Stamatopoulos’ evidence. However, even if it is accepted on this issue, it does not mean that the plaintiff and the defendant were not living together at this time. It means only that the defendant was still seeing Ms Corbett from time to time during late 1993. This is consistent with other unfaithful behaviour by the defendant while he was admittedly living with the plaintiff.

258 I find that the plaintiff moved into the defendant’s home and commenced living with him as his de facto partner in or about May 1993. I reject the plaintiff’s evidence that this all happened on one day, after the breakfast conversation referred to above. I find that that evidence is one of the plaintiff’s concoctions or, at the very least, a gross exaggeration. However, whether or not she moved in on the same day as the alleged breakfast conversation is not to the point. At some stage in about May 1993 she moved in. I make this finding for the following reasons.

259 First, the plaintiff’s evidence that she commenced cohabitation with the defendant in May 1993 is supported by the pleadings. The proceeding was commenced in November 2000. The plaintiff has always alleged that the de facto relationship commenced ‘in or about May 1993’. In his initial defences, the defendant admitted that this was so. It was not until the fifth version of his defence, filed in November 2007, that the defendant asserted for the first time that the parties did not commence living together until ‘late 1993’. The defendant was unable to give a satisfactory explanation as to why the commencement date of the de facto relationship was admitted for a six year period prior to this. I reject his explanation that it was not until 2007 that he commenced taking this proceeding seriously, because until that time he believed (on legal advice) that the plaintiff was unlikely to recover any substantial amount against him. Whatever may be said of the quality of the legal advice given to him by his previous solicitors, he was well represented by counsel during the course of the early pleadings and it is extremely unlikely that counsel could be confused between having a sexual relationship with a partner, but not living with them, and living together with that partner as a ‘de facto partner’ within the meaning of the Act.

260 Second, the plaintiff’s evidence in this regard is also supported by objective evidence. In May 1993 someone thought that she was living with the defendant as his de facto partner. An anonymous complaint was made to Centrelink alleging that this was the fact, and that the plaintiff had commenced working full-time in the defendant’s business. Further, in October and November 1993, the plaintiff attended the dentist and the dental accounts give her address as that of the defendant.

261 Third, the defendant is a man with a history of cohabiting with women whom he has known for a short period. He married his ex-wife, Zoe, only a few months after arriving in Australia. The explanation put forward for that is that Zoe was pregnant, and that he did the right thing by her in marrying her. A similar explanation could be put forward for his own evidence that he decided to live with Meghan Courtney once he knew she was pregnant in 1996. However, no pregnancy was involved with his existing partner, Amanda Simpson. He met her on the internet in January 2000, met her in person for the first time in America in February 2000 and she moved into his house as his de facto partner in March 2000.

262 Fourth, as appears above, the plaintiff’s evidence that she moved into the defendant’s home and commenced living with him on a continuous basis as his de facto partner in and from May 1993 was supported by that of her mother, Maria, and of her sister, Jasenka. Each of them gave a logical reason to recall the timing of the event.

263 According to the plaintiff, after many informal proposals of marriage, the defendant finally made a formal proposal to her in November 1993. The plaintiff gave the following evidence about the engagement:

264 During the course of giving this evidence, the plaintiff became tearful. To my observation, the tears were not real but feigned as part of the plaintiff’s theatrical performance.

265 After the plaintiff had the ring re-sized, she returned to the furniture shop where, according to her, the defendant said:

266 The ring was produced in Court and a photograph and valuation of it were placed in evidence. The Court did not retain possession of the original ring and it is not an exhibit. It has the appearance of being an engagement ring. There is no dispute that a ring was given, although the defendant is unsure whether the ring which was produced is that ring.

267 The plaintiff said that others were present when the defendant proposed to her at the Atherton Road shop. In her oral evidence, she said that both Anestis and David were present. She said ‘David then yelled out, “I have a new Mum”...’ and that Anestis said ‘Welcome to the family, my sister-in-law, I’m very happy for you both.’ This evidence was inconsistent with the plaintiff’s outline of evidence and with her answers to interrogatories. In her answers to interrogatories, the plaintiff said that only David was present. In the plaintiff’s outline of evidence she said that Anestis was also present, but made no reference to him saying anything. She said that Ken came to the shop that evening and that it was Ken who welcomed her to the family by stating “Welcome to the family my sister-in-law.” The marriage proposal was obviously a matter of great significance to the plaintiff. Not only did she say in oral evidence that it was Anestis who welcomed her to the family, but she then explained that Anestis is younger than Ken and identified Ken by pointing to him sitting in the Courtroom. I do not accept her evidence in cross-examination that both Ken and Anestis welcomed her to the family in the same terms. Apart from again seeking to blame her solicitors, both past and present, the plaintiff was unable to provide any satisfactory explanation for the inconsistencies in this important aspect of her evidence.

268 According to the plaintiff, she and the defendant went to visit her mother at the Byfield Street property to inform her of their engagement. She described the visit as follows:

269 From this time, the plaintiff wore the ring given to her by the defendant on her left ring finger. She said that she wore it continually until March 2000 when she was, in her own words, ‘thrown out’ by the defendant. The defendant said he had no idea what finger she wore the ring on. I find that the plaintiff in fact wore the ring on the ring finger of her left hand. There is photographic evidence of this.

270 The plaintiff said that the defendant asked her to marry him on numerous occasions, ‘at last 50 times I suppose’, both before and after the formal proposal in November 1993. She gave examples of significant events such as the purchase of properties, and also referred to marriage proposals ‘many times over dinner’ and during visits to Crown Casino. The plaintiff said that at such times she asked the defendant when they would be married and gave the following evidence:

271 The defendant again denied the plaintiff’s version of events. He gave the following version of the circumstances in which the ring was purchased:

272 The defendant said that the plaintiff accompanied him to collect the ring once it had been re-sized by the jeweller. He described the circumstances in which he gave it to her as follows:

273 The defendant denied that there was any reason for him to defer marrying and honeymooning with the plaintiff because there was no-one he could trust to run his business. He referred to numerous occasions on which he travelled overseas, sometimes for up to a month, while he was living with the plaintiff. While he was overseas, he trusted the store managers to run his business. I accept the defendant’s evidence in this regard. It provides another example of the extent to which the plaintiff has gone to embellish and exaggerate her evidence.

274 I reject the plaintiff’s evidence concerning the alleged engagement and proposals of marriage. Although I am satisfied that the plaintiff wished to marry the defendant, and that the issue may have been discussed between them, the actual evidence given by the plaintiff is simply incredible. On her version of events, she was able to have the ring re-sized on the spot. That is not probable. Further, the inconsistency between the plaintiff’s evidence, her outline of evidence and her answers to interrogatories is significant. In her oral evidence, the plaintiff simply forgot the script. I do not accept that lawyers made mistakes in preparing her answers to interrogatories by failing to include Ken or Anestis as being present as witnessing the proposal. Nor do I accept that the plaintiff’s current lawyers made a mistake when they prepared the plaintiff’s outline of evidence referring to Ken Apostolidis, and not Anestis, welcoming her to the family as “my sister-in-law”. The plaintiff’s evidence concerning the announcement of the engagement to her mother was an unlikely account. It is highly improbable that the defendant would announce his engagement and accompany that announcement by a statement to the effect that from that time ‘everything that we owned, we owned jointly together’. Further, the plaintiff’s evidence that the defendant fobbed her off with the statement that they could not be married until he had someone he could trust to run the business makes no sense. The evidence discloses that the defendant travelled frequently and left others to run the business in his absence. Finally, the fact that there was no engagement party is of some significance.

275 The defendant said that he separated from the plaintiff in ‘about mid-1995’ and that the plaintiff did not cohabit with him again until February 1996. The defendant said that the plaintiff was on one of her short absences at this time and that he telephoned her:

276 In November 1995, the defendant and Meghan Courtney spent a week on Hamilton Island and, later, spent a few days together on the Gold Coast.

277 During late January or early February 1996, probably early February, the defendant and Meghan Courtney spent five days together in Sydney. During this time, a child was conceived. Soon after this trip, Meghan Courtney terminated her relationship with the defendant.

278 The plaintiff said that she believed the defendant was on business trips at the times he was away with Ms Courtney.

279 The defendant said that, during the course of his relationship with Meghan Courtney at this time, he continued to have telephone conversations with the plaintiff. Sometimes he would ring her and sometimes she would ring him. The defendant said that, in the course of one of these conversations, which must have been in February 1996 if it occurred, the plaintiff ‘became aware that I’m single and she asked to move back in with me until she found a place to stay, and I said yes.’ At this time, the defendant said that he believed the plaintiff was living with her mother and her partner, Con.

280 In March 1996, the plaintiff accompanied the defendant on a business trip to Malaysia. Steve Yong and his wife and child also attended. Following the business aspects of the trip, the plaintiff and the defendant spent two or three days at an island resort. The plaintiff says that she was fully involved in all business aspects of this trip. The defendant denies that this was so and says that she merely accompanied him.

281 In about April 1996, the defendant, through DSK, commenced operating a furniture retail shop in the ‘Forest Hill Chase’ shopping centre. The manager of the shopping centre with whom he dealt was Bill Edwards. Following discussions with Mr Edwards, the defendant organised a ‘good deal’ on which he could obtain cheap rent on the basis that he could give three months’ notice to vacate or be given three months’ notice to vacate. In the events which transpired, the Forest Hill business was conducted by the defendant for three years from 1996 to 1999.

282 The defendant contends that he and the plaintiff separated again in or about May or June 1996 and did not recommence cohabitation until about September 1996. The defendant gave an account of Meghan Courtney telephoning him and asking to see him. He met her in a pizza restaurant where she told him that she was pregnant. As a result of this conversation, the defendant said that he reconciled with Meghan Courtney. He then told the plaintiff that Meghan Courtney was pregnant and that he wanted to live with her. There was then an argument between him and the plaintiff. A few days later, the plaintiff moved out of his home and Meghan Courtney moved into his home. Again, the plaintiff asserts that this is a ‘complete and utter lie’.

283 The defendant said that Meghan Courtney set up a baby room in his home during this period:

He said that this was all done at his expense and with his consent, and that some of the baby items were left at his home by Meghan Courtney when she left in September 1996, shortly before Jessica was born on 11 October 1996.

284 According to the plaintiff, during the course of June 1996, the defendant’s sister, Anna Maria, moved into the Banksia Street premises and resided with the plaintiff and the defendant for about 15 months. The defendant disputes this. He said that Anna Maria did not move into the Banksia Street unit until after Meghan Courtney had left in September 1996. Anna Maria was not called as a witness. Redacted correspondence from Anna Maria to the plaintiff was put in evidence. The form of the correspondence indicates a close, personal relationship between the plaintiff and Anna Maria. Correspondence of this kind was sent by Anna Maria during the course of the plaintiff’s relationship with the defendant and thereafter. Anna Maria is obviously well-disposed towards the plaintiff. However there is no evidence that she had a falling out with the defendant and she could have been called by either side.

285 According to the defendant, Meghan Courtney lived with him at the Banksia Street unit until in or about September 1996 when she again left him. She left behind a pram and other baby equipment. The defendant says that, shortly thereafter, the plaintiff returned to live with him at the Banksia Street premises. The defendant was asked as to the circumstances in which the plaintiff moved back into his home. He said that he did not recall the exact time that this occurred, but that it was ‘not long’ after Meghan Courtney left. He said that he could not recall any conversation between himself and the plaintiff as to where she had been living since she left in May or June 1996. All that he could recall was that the plaintiff was ‘not happy where she was’ and that she asked if she could stay at his home until she found somewhere else to live. He described this as ‘more or less a repeat pattern’, a reference to other occasions on which he says the plaintiff had moved out of his home during the course of their relationship only to return.

286 The defendant was asked as to his motivations in allowing the plaintiff to return and live with him after Meghan Courtney moved out. His response was direct:

287 At the time of giving this evidence, the defendant was off-hand and made facial and bodily gestures indicating that the plaintiff had never been anything more to him than a convenient sexual partner. This is consistent with his later evidence that he had no real emotional attachment to the plaintiff at any time, and that she was merely his ‘sexual partner and [live-in] person’. For reasons stated elsewhere, I find that this evidence understates the level of his emotional attachment to the plaintiff for much of their relationship.

288 The defendant’s evidence of his relationship with Meghan Courtney, and of the plaintiff moving out of the Banksia Street unit during the two periods of that relationship, was supported by Meghan Courtney. Ms Courtney gave evidence in a direct and articulate fashion. There was no material inconsistency. Although there were some limited occasions on which she appeared initially reticent to reveal the full extent of the defendant’s wrong-doing, and she has good reason to bear resentment towards the plaintiff, there was nothing about her demeanour as a witness which indicated that she was not endeavouring to tell the truth to the best of her recollection. Obviously enough, she could not recall everything about events which occurred about 13 years ago. However, when she had a positive recollection, she had a good reason for that. Her evidence was as follows.

289 Ms Courtney confirmed that she met the defendant in approximately May 1995. She had been travelling overseas when she was required to return to Australia urgently upon the sudden death of her brother in January 1995. She had a positive recollection of difficulties in obtaining a flight home, and that she did so on 31 January 1995. When she returned, she went to live with her mother in rural Victoria. After a few months, by approximately May or June 1995, she recalls ‘wanting to rebuild my life and I just remember stepping out off the farm, if you like, ... stepping back into reality around that time.’

290 Ms Courtney recalled meeting the defendant when she went shopping for furniture at the Dandenong shop. She said that there was mutual attraction and that she flirted with him. Over the next week to 10 days, they saw each other regularly and she commenced having a sexual relationship with him.

291 Ms Courtney agreed with the defendant’s description of their relationship at this time. She said that, although it varied, she spent four or five nights a week with the defendant and that this was equally split between their respective homes. On the nights that she slept at the Banksia Street unit, Zorica was not present. She described the Banksia Street unit as one which ‘didn’t have a woman’s touch to it but there were signs that there had been a woman living there at some stage’. She said that this pattern continued until she split with the defendant in early February 1996, as appears below.

292 Ms Courtney agreed with the defendant’s evidence that she holidayed with him at Hamilton Island and the Gold Coast in November 1995 and in Sydney at the end of January or the beginning of February 1996. Following the Sydney trip, she decided that ‘we weren’t compatible and that’s when I decided to end our relationship.’ She described the relationship as a difficult one and referred to the defendant as being angry on occasions. There were obviously many arguments in what was a volatile relationship.

293 Ms Courtney said she discovered that she was pregnant not long after returning from Sydney. The baby was conceived during the Sydney trip. About three months later, in May or June 1996, she contacted the defendant and they met at a pizza restaurant. She told him she was pregnant, he said that he missed her and that he wanted them to get back together. She said that, as a result:

294 Ms Courtney described living at the Banksia Street unit during this period. She said that she brought a number of personal items, including furniture, to the Banksia Street unit and that, together with the defendant, she set up a nursery for the forthcoming baby. She described the contents of the nursery and, in particular, her attachment to a ‘beautiful elaborate wall hanging’ and a ‘beautiful mobile’ which had been handmade by her mother.

295 During the time that she was living with the defendant, she would sometimes visit him at one or other of the Dandenong or Forest Hill shops. There was no regular pattern to this. Sometimes three times a week, sometimes not at all during the course of a week. On no occasion did she ever see the plaintiff working at the shops.

296 Ms Courtney said that she lived with the defendant at the Banksia Street unit for a period of about three and a half months until, about four weeks prior to the birth of her daughter, she decided to again terminate her relationship with the defendant. She said that they were simply ‘not compatible at all’. She again referred to their relationship as being a volatile one, either ‘very good or it was very bad. There was never, ever any sort of status quo, so to speak’. She denied that there was any violence from the defendant towards her, but acknowledged that there were many arguments.

297 Ms Courtney said that her mother and her sister assisted her to move out of the Banksia Street unit. The move was by carload, and possibly trailer-load, and they did not move all of the baby items on the one day. Subsequently, before she could remove the balance of the baby items, she was hospitalised for her pregnancy and remained in hospital until her daughter was born.

298 Ms Courtney said that about five weeks after the birth of Jessica she attended at the Banksia Street property to retrieve the remainder of Jessica’s nursery items. She said that she was unsuccessful in her attempts and that, on two occasions, she met with the plaintiff. Ms Courtney gave the following evidence concerning her first encounter with the plaintiff:

299 Ms Courtney described her second encounter with the plaintiff in the following terms:

300 Ms Courtney said that she made a third attempt to retrieve her baby items. She said that she attended at the Banksia Street unit, knocked, and then tried her key (which she had retained) when there was no answer. The locks had been changed and she ‘just gave up at that point’.

301 Ms Courtney said that the three attempts to retrieve the baby items all occurred within a 7 to 10 day period. Her evidence indicated that this was towards the end of November 1996.

302 The plaintiff denies that these meetings took place. According to the plaintiff, she first met Meghan Courtney some time in 1997, at which time Meghan Courtney did not identify herself or make any allegations concerning her relationship with the defendant. She described this first meeting as follows:

303 The plaintiff said that she met Meghan Courtney on a second occasion about one week later. She gave the following evidence:

304 As a result of this conversation with Meghan Courtney, the plaintiff said that she telephoned the defendant and the following conversation took place:

305 According to the plaintiff, she did not speak with Meghan Courtney again until a few months after Easter in 1998. She gave the following evidence about this occasion:

306 The plaintiff said that the final time that she met Meghan Courtney was in about August 1999, approximately three or four weeks before the defendant travelled overseas in September 1999. She gave the following evidence:

307 The plaintiff said that she could recall the approximate date of this final meeting with Meghan Courtney because it was this meeting which caused her to lose trust in the defendant. She said ‘I started to have – the trust was no longer there’. She agreed with the proposition that she did not find the defendant’s explanation as to why he had undergone a vasectomy convincing ‘because I was on the pill ... and he had no reason to have a vasectomy if he was only having sexual intercourse with me.’

308 The defendant denied all of the evidence given by the plaintiff concerning Meghan Courtney. He said that the plaintiff knew all about Meghan Courtney and the baby. He said that he had no discussions with the plaintiff concerning his vasectomy and had no reason to do so at that time because ‘she was not my sex partner’. He denied the incident involving the plaintiff grabbing his testicles.

309 Ms Courtney denied all of the plaintiff’s evidence concerning the dealings between them. She said that the only contact she ever had with the plaintiff was that which she described in her evidence, regarding her attempts to retrieve her baby items in late 1996. As to the allegation by the plaintiff that she attended at the Yarrabee Court home and spoke with her there, Ms Courtney was firm in her denial that she had never visited the Yarrabee Court home when the plaintiff was present. Indeed, she had a firm recollection of first visiting the Yarrabee Court home shortly prior to the arrival of Amanda Simpson, the defendant’s present partner, some time in early 2000.

310 The evidence given by the plaintiff and Meghan Courtney cannot be reconciled - one of them has concocted a story and told deliberate lies about it. There is no possibility of mistaken recollection. It was submitted on behalf of the plaintiff that all of the evidence of Ms Courtney should be rejected and that of the plaintiff accepted. The following matters were relied upon.

311 First, it was submitted that the plaintiff has always been consistent in her pleadings, maintaining that she lived with the defendant on continuous basis from May 1993 to March 2000. It was submitted that the defendant, in contrast, did not articulate the periods during which he says the plaintiff moved out of his home for many years, and that it was not until the amended defence filed 30 November 2007 that the defendant first committed himself to the two periods of separation for which he now contends, from ‘around May 1995 to around February 1996’ and from ‘around May 1996 to around September 1996’.

312 I accept that the defendant’s pleadings were not specific for many years and that is a factor to be considered in resolving this issue. However, from his very first defence he contended that the parties ‘separated on several occasions including for approximately eight months in around 1995 and 1996’. Viewing the history of the pleadings as a whole, it is evident that this was a reference to a period when the defendant contended that he was in a relationship with Ms Courtney. Although reference was not made in the defence to Ms Courtney by name, the fact that the defendant contended he lived with ‘another person with whom he had a daughter born on 11 October 1996’ first appeared in the pleadings in 2001. The fact that the specific periods which are now alleged, and as to which Ms Courtney has sworn, were not put forward until November 2007 is explicable on the basis that, until this time, Ms Courtney was not co-operating with the defendant in the preparation of his defence in these proceedings. She said that about two or three years ago, the defendant first asked her to help him with his defence. She agreed with the suggestion that she ‘brushed him off’ on this occasion, indicating that they ‘didn’t communicate that fantastically’ at the time. However, at a later time when they were having a calmer conversation, the defendant again raised the possibility of her helping him with his defence and she agreed to provide an outline of evidence to the defendant’s solicitors. This was probably towards the end of 2007, when orders were first made for the filing of outlines of evidence. In the course of this process, Ms Courtney must have given specific instructions to the defendant’s solicitors, thus enabling the amended defence containing specific dates of the relationship between Ms Courtney and the defendant to be filed in November 2007.

313 I accept that the history of the pleadings reflects poorly upon the reliability of the defendant’s recollection on this critical issue. No satisfactory explanation was given as to why the defendant had apparently forgotten that there were two substantial periods when the plaintiff had allegedly moved out of the Banksia Street unit ‘around 1995 and 1996’. However, if Ms Courtney is an honest witness, the pleadings do not reflect poorly upon the reliability of her recollection. She had good reason to recall the approximate dates, by reference to important events in her life and objectively established facts. In particular, the sudden death of her brother requiring her to return from overseas on 31 January 1996, her move to Melbourne following a period spent with her mother in the country comforting her after her brother’s death, the fact that she left the defendant shortly after a five day trip to Sydney on which she conceived her daughter and the date of her daughter’s birth.

314 Second, it was submitted on behalf of the plaintiff that the objective evidence favours the plaintiff’s version of events, and is inconsistent with Ms Courtney’s version of events.

315 Reliance was placed upon the lack of any document establishing that Ms Courtney ever lived at the Banksia Street unit, such as letters addressed to her there or medical bills relating to her pregnancy. Although this factor has some weight, it is very limited. Ms Courtney said that she was living at the Banksia Street unit for a period of approximately three and a half months, or fourteen weeks, only. I accept that it is unlikely that she would retain any letters or bills addressed to her at that address nearly 13 years ago. She said that she did receive some letters and bills, but that they have long since been discarded. She is not a party, was not required to give discovery and did not commence assisting the defendant in the preparation of his defence until late 2007. By that time, any relevant documents establishing her residence at the Banksia Street unit would have likely been discarded.

316 Reliance was also placed upon the fact that there is not one photograph depicting Ms Courtney at the Banksia Street unit. Ms Courtney did not find this unusual. She said that she and the defendant ‘had a few photos’, that she ‘didn’t get to keep the photos’ and that it was not until after her daughter was born that she ‘became photo happy’. The lack of a photograph carries little weight.

317 Reliance was also placed upon the fact that there is no evidence from any other witness that they ever saw Ms Courtney living at, or even present at, the Banksia Street unit during the relevant period when she says the plaintiff was absent in 1995 and 1996. Of course, this submission does not concern ‘objective facts’, but depends upon the credibility of the witnesses relied upon. Reference was made to the evidence of David Apostolidis that he could not recall meeting Ms Courtney at the Banksia Street unit, and only recalled meeting her after her daughter was born. For the reasons stated elsewhere, I do not find that David Apostolidis was a reliable witness in any respect. His recollections as a young boy are an unsafe basis upon which to proceed on any important matter. Reference was also made to the evidence of Ms Gabrielidis, who said that she visited the plaintiff at the Banksia Street unit during 1995 and 1996, and to the evidence of Jasenka Kalenik, who said that she would frequently telephone the Banksia Street unit and speak with the plaintiff there during this time. For reasons stated elsewhere, the credibility of these witnesses is open to serious question and caution is required. However, there is no contrary evidence, such as from Ms Courtney’s mother, sister or a close friend.

318 Reliance was also placed upon four cash deposits of $2,000 each, made into the plaintiff’s passbook account on 3 May, 20 May, 12 June and 24 June 1996. It was submitted that the Court should accept the plaintiff’s evidence that these cash deposits constituted amounts given to her by the defendant. It was submitted that the defendant is not likely to have made such payments to the plaintiff if he was then cohabiting with Ms Courtney. For reasons appearing elsewhere in this judgment, I have found that the source of these cash deposits into the plaintiff’s passbook account was money provided to her by the defendant. I accept that this fact is relevant in weighing all of the evidence on the issue under consideration. In particular, the payment on 24 June 1996 would appear, on any view of the dates of alleged cohabitation at this time, to be within that period.

319 Reliance was also placed upon the video evidence depicting the plaintiff at the Dandenong Road shop on 31 May and 11 June 1995. In the absence of hard evidence as to specific dates, this evidence cannot carry much weight. The evidence of Ms Courtney and Mr Apostolidis is that their relationship commenced in May or June 1995. Ms Courtney said that it became a sexual relationship between a week and ten days thereafter. It is unlikely that the defendant immediately asked the plaintiff to leave the Byfield Street unit after the commencement of sexual relations with Ms Courtney. Even if he did so, it is unlikely that she left immediately. The fact that the plaintiff was filmed at the Dandenong Road shop on 11 June 1995 is not necessarily inconsistent with the evidence given by Ms Courtney and the defendant. The fact remains that the critical dates are not known with any exactitude. The evidence is as to approximate dates only, and this is understandable given the lapse of time.

320 Reliance was also placed upon the fact that the plaintiff accompanied the defendant to Malaysia between the 3rd and 9th of March 1996. It was submitted that it would be unlikely that this trip would have occurred so soon after the plaintiff returned to live with the defendant in February 1996, if that was the case. I do not accept that submission. The defendant travelled to Malaysia frequently, and said that this trip was a holiday to Penang. However, whether the trip was a holiday, as the defendant said, or a business trip, as the plaintiff said, is not to the point. I see nothing improbable in the defendant taking the plaintiff with him on the trip if he had just been left by Ms Courtney. It is consistent with him wanting female companionship on the trip.

321 Reliance was also placed upon a photograph of the plaintiff attending the christening of Sophia Apostolidis, the first child of Ken and Anna Apostolidis. The photograph depicts the plaintiff with her arm around David Apostolidis, in a group photograph outside the church. The plaintiff is also depicted at the celebratory family meal. The caption to the photograph states ‘Sophia’s christening circa Sept 1996’. This is a date placed upon the photograph by or on behalf of the plaintiff. In dating the photograph ‘circa Sept 1996’, the plaintiff and her advisors obviously had this issue in mind. Senior counsel for the plaintiff opened the significance of the photograph for this issue, stating that it was inconsistent with the evidence that Ms Courtney was living with the defendant from September 1996. In her evidence in chief, the plaintiff was asked a leading question about the date of Sophia’s christening:

322 This is the only evidence of the date of the christening. This is surprising given the importance placed upon the date of the christening in opening address and final submissions. The date of the christening is something which should be easily ascertainable by objective evidence, such as a baptism certificate or church records. However, neither party sought to lead evidence on this issue, or to seek to re-open to do so once the issue was identified in final submissions as an allegedly critical issue. In the absence of a specific date, I do not think that the presence of the plaintiff at the christening carries much weight in resolving the issue under consideration. Even if it be assumed that the christening was as early as 1 September 1996, this would not be fatal to acceptance of Ms Courtney’s evidence. By this time, the plaintiff had known the wider Apostolidis family for over two years, and had become friendly with them. The fact that she may not have been living with the defendant at the time of the christening is not conclusive in determining whether or not she was invited to attend the occasion. This is consistent with the events following the final termination of the relationship between the parties, when the plaintiff continued to see and socialise with members of the defendant’s immediate family (for example, Ken, Anna and Anna-Maria) and also his extended family (Loula Gabrielidis).

323 Finally, as to objective evidence, substantial reliance was placed upon the passbook. It was submitted that if the plaintiff had moved out of the Banksia Street unit during the two periods contended for by the defendant and Ms Courtney, and that she had possession of the passbook as contended for by the defendant, it is inconceivable that the plaintiff would not have withdrawn money from her passbook account in circumstances where she had no job, no social security payments and was not being supported by the defendant. Attention was drawn to the fact that the passbook records only insignificant withdrawals during these two periods. In the first period (May/June 1995 to February 1996) the only withdrawals were for $60, $20 and $50 in cash and a cheque for $258.70. During the second period (May/June 1996 to September 1996) the passbook account does not record any withdrawals by the plaintiff.

324 The objective passbook evidence favours the plaintiff’s version of events. If she had ceased living with the defendant during the two periods, and was living with her mother and step-father as the defendant contends, it is unlikely that they fully supported her and that she had no need to access the substantial funds standing to the credit of the passbook account. There was no evidence that the plaintiff’s mother or step-father had the financial capacity to support the plaintiff during such periods, and it was not put to the plaintiff or her mother that this occurred.

325 It was submitted on behalf of the defendant that no inference should be drawn against his version of events because there is no substantial change between the pattern of withdrawals from the passbook account during, on the one hand, periods of agreed cohabitation between the parties and, on the other hand, during the two periods of alleged separation. I do not accept this submission. The fact that the plaintiff’s withdrawals during periods of cohabitation were not substantial is in no way inconsistent with drawing an inference, for the reasons stated, from the lack of any substantial withdrawals during the two periods of alleged separation.

326 Third, it was submitted on behalf of the plaintiff that Ms Courtney had reason to lie because she depends upon child support payments from the defendant, which were only formalised about four years ago, well after the commencement of this proceeding. The child support payments paid to Ms Courtney are of a modest amount. She said that she was more interested in ensuring regular and consistent access rights to enable her daughter to fulfil her wish to see her father, rather than in obtaining money from the defendant. However, this evidence sits uneasily with her evidence that the defendant did not pay any, or any regular, maintenance for his daughter during substantial periods prior to the formal arrangements being implemented. The defendant’s niggardly approach to paying maintenance placed Ms Courtney under such financial pressure that she had to ‘hock’ her possessions, including jewellery given to her by the defendant, in order to survive from day to day. Further, the defendant now pays private school fees for his daughter and is much more amenable to requests for payments to fund her other needs. This is in stark contrast to his earlier behaviour in this regard. Ms Courtney obviously wishes this lately acquired benevolent attitude of the defendant to continue. I accept that this provides a motive for her to lie if disposed to do so.

327 Fourth, it was submitted that Ms Courtney’s evidence was open to question because she was a person who exercised her right to claim that certain questions may tend to incriminate her. I reject this submission. Adverse inferences should not be drawn against a witness because the witness exercises the fundamental right to object to answering questions on the ground that the answer may tend to incriminate them. Further, the matters about which Ms Courtney claimed the privilege have nothing to do with the issues under consideration. The Court is unable to reach any conclusion, even a tentative one, on the issues giving rise to the claim for privilege.

328 Fifth, it was submitted that no satisfactory explanation had been given for the failure to call Ms Courtney’s mother or sister to corroborate her evidence that she lived with the defendant and that they assisted her to move out of the Banksia Street unit in September 1996. There is force in this submission. Following the issue being raised in cross-examination of Ms Courtney, the defendant’s solicitors contacted her the next day and asked her to provide names and contact details for her mother and sister. Ms Courtney refused. According to the solicitor’s affidavit, Ms Courtney gave the following reason:

329 The reference to allegations of attempted murder of Bill Edwards concerns an ongoing police investigation into the possible involvement of the defendant and Ms Courtney in that crime. The investigation had lain dormant for many years until it was revived during the course of the trial of this proceeding. Both the defendant and Ms Courtney obviously believe that the plaintiff is, directly or indirectly, responsible for the investigation re-commencing. Each of the plaintiff, the defendant and Ms Courtney has been interviewed by police in connection with the investigation.

330 The solicitor then swore that the defendant was unable to assist him to locate Ms Courtney’s mother or sister and that searches of the White Pages and the electoral roll revealed no success.

331 Having regard to the importance of this issue in the case, I do not accept that this is a sufficient explanation for the failure to call the mother or the sister. The trial continued for a number of weeks after reference was first made to the whereabouts and availability of the mother and sister to give evidence. If the defendant truly wished to secure their attendance to corroborate Ms Courtney’s evidence, Ms Courtney could have been served with a subpoena to give further evidence and the Court could have directed that she provide full names and contact details for her mother and sister. The failure to call them as witnesses assists the plaintiff’s case on this issue, facilitating the drawing of inferences on the available evidence.

332 Taking the evidence as a whole, I reject the evidence of the defendant and Ms Courtney that the plaintiff ceased living with the defendant during the two periods alleged. I find that the plaintiff continued to live with the defendant during these periods. This conclusion involves rejecting the evidence of Ms Courtney, a witness whose demeanour could not be faulted and who was unshakeable in cross-examination. However, the catalogue of factors relied upon by the plaintiff leads me to reject her evidence. In particular, the history of the pleadings, the failure to call her mother or sister to corroborate her evidence, the existence of a credible motive for Ms Courtney to lie and, of most if not decisive significance, the lack of any significant withdrawals from the plaintiff’s passbook account during the two relevant periods, lead me to this view.

333 There remains for consideration the two competing versions of the contact between the plaintiff and Ms Courtney. I reject the evidence of both of them on this issue. Ms Courtney’s evidence cannot be accepted because I have found that the plaintiff continued to reside at the Banksia Street unit. Accordingly, there is no possibility of Ms Courtney’s baby items being in those premises. I reject the plaintiff’s evidence as either total concoction or a mixture of truth and concoction to such an extent that it is impossible to disentangle the two. The evidence was full of such improbabilities that no reliance can be placed upon it.

334 The defendant denies that the plaintiff lived with him continuously from the end of his relationship with Ms Courtney until March 2000 when they finally separated. He said that the plaintiff continued to leave him on occasions, for numerous days ‘but maybe 10 days longest.’ The defendant said that these separations usually followed a fight between him and the plaintiff. Further, the defendant said that he ceased having sex with the plaintiff about a year prior to March 2000.

335 The defendant said that in about March 1999 he became involved with another woman, Natalie Brown. He said that, from this time:

336 The plaintiff also denies this as being ‘completely untrue’. According to the plaintiff, she and the defendant continued to share the same bed and to have regular sex until she was thrown out in March 2000. The only separation between her and the defendant was for a three day period in January 2000. This incident is dealt with below.

337 The plaintiff’s evidence that she continued to share the same bed with the defendant until she was thrown out in March 2000 was not challenged in cross-examination. However, in his cross-examination, the defendant said for the first time that the plaintiff slept in a separate bedroom during, approximately, the last year of their relationship. When it was put to the defendant that he had never said this before, he said that it was implicit in his consistent evidence that he had ceased having a sexual relationship with the plaintiff in the last year of their cohabitation. I reject this explanation. If the plaintiff was sleeping in a separate bed during the last year of the relationship, that is an important matter which the defendant could not have failed to instruct his lawyers about. I accept the plaintiff’s evidence in this regard.

338 Further, I reject the defendant’s evidence that Natalie Brown would at times stay overnight with him at the Yarrabee Court home during 1999. The existence of Natalie Brown was first revealed on day 18 of the trial when the defendant said that he was ‘involved with another person’ in 1999. No explanation was given for this alleged relationship not being referred to in the defendant’s outline of evidence.

339 It was submitted on behalf of the defendant that his evidence concerning Natalie Brown should be accepted because it was corroborated by two witnesses. Reliance was placed upon the evidence of Michael Stamatopoulos and Nigel Jupi.

340 Mr Stamatopoulos said that he recalled meeting Natalie Brown twice during 1999 when he met socially with the defendant and once at his furniture factory. I refer below to the unsatisfactory nature of Mr Stamatopoulos’ evidence. However, even if it is accepted, and the defendant in fact had some relationship with Natalie Brown during 1999, it does not establish that she ever stayed overnight at the Yarrabee Court home or that the defendant ceased having sex with the plaintiff during 1999.

341 Mr Jupi gave unsatisfactory evidence concerning Natalie Brown. He was confused as to when the defendant had a relationship with her. To his recollection, Natalie Brown was the defendant’s girlfriend before the defendant met Meghan Courtney. That is obviously wrong. No reliance can be placed upon Mr Jupi’s evidence. In any event, like the evidence of Mr Stamatopoulos, it would not corroborate the defendant’s evidence that he ceased having sex with the plaintiff during 1999 and that Natalie Brown would sometimes stay overnight at the Yarrabee Court home. Mr Jupi’s credibility as a witness is also criticised below.

342 Finally, on this issue, there is the failure to call Natalie Brown. There is doubt as to whether she in fact exists. No explanation was given for not calling her. One asks the obvious question, if Meghan Courtney was called why was Natalie Brown not called? I reject all of the defendant’s evidence concerning Natalie Brown and concerning the plaintiff living in a separate bedroom at the Yarrabee Court home for approximately the final year of their relationship. I accept that the frequency of sexual intercourse between the parties may have decreased during this period, but this does not mean that they were separated under the one roof as contended for by the defendant.

343 The plaintiff has maintained throughout the proceeding that the only time she separated from the defendant was for three days in late January 2000. The defendant has consistently maintained that the plaintiff would leave their homes on a periodic basis for short periods of up to ten days at a time. There is no objective evidence to assist in resolving this dispute. It is unnecessary to resolve the issue. Mere temporary absences such as those alleged do not mean that a de facto relationship is at an end.[29] In my view, occasional breaks for short periods, followed by resumption of cohabitation may demonstrate the strength of a relationship and the emotional attachment which it involves.

344 Apart from a dispute as to the value of the furniture business at the time the parties commenced living together as a de facto couple, there is no significant dispute as to the assets of the parties at this time.

(1) her half-share in the Byfield Street home. The best evidence of the value of her half-share is the amount received into her passbook account in February 1994 – a sum of $51,500; and

(1) his equity in the Dowling Road home. The best evidence of its value is the sale price in May 1994 of $231,500. Although there is no settlement statement available, he had a mortgage over the home of approximately $100,000. I find that his equity in the Dowling Road home was approximately $130,000;

(2) the value of the defendant’s business at that time. For reasons given below, I find that the defendant’s business had a value of $75,000 at the commencement of the de facto relationship between the parties;

(4) a new motor vehicle which had been recently acquired, jewellery, furniture, and other personal effects. There was no evidence as to the value of these assets and, as the matter is not important in the overall disposition of the case, I simply ignore them.

347 In summary, putting to one side jewellery, furniture and personal effects, the plaintiff had assets of $51,500 and the defendant had assets of $130,000 (Dowling Road), $75,000 (the business) and $15,000 (cash), making a total of $220,000.

348 On a date which the plaintiff could not recall, but which was before she moved in with the defendant in May 1993, the plaintiff said that she was taken by the defendant and shown his shop at 49 Atherton Road, Oakleigh. The plaintiff described what she saw in terms obviously designed to denigrate the quality of the business premises and to be highly critical of the defendant’s business strategy at the time. She gave the following evidence:

349 The plaintiff gave other like evidence, often in non-responsive answers. For example, she sought to portray the business as buying second-rate furniture, ‘touching it up with textas and selling it for full price’ and described the Atherton Road premises as looking like ‘a very cheap second-hand store’.

350 The plaintiff supported this evidence by reference to photographs taken by Ken Apostolidis in approximately August 1990, depicting the exterior and interior of the shop. The plaintiff said that the shop ‘bore a similar appearance’ to that depicted in the August 1990 photographs when she first saw it in about April 1993.

351 The defendant denied this evidence. He referred to his business card which depicted a photograph of good quality furniture and said that the only occasions on which he would ‘touch up’ a scratch or mark on furniture was when it was minor and as a result of, for example, transport. He described this process as ‘normal in the industry’.

352 In common with other issues, I find that the plaintiff’s denigration of the defendant’s business is grossly exaggerated. This aspect of the plaintiff’s evidence was obviously intended to serve two purposes. First, to reduce the value of the defendant’s assets at the commencement of the de facto relationship between the parties. Second, to lay a foundation for the plaintiff’s evidence, which is rejected below, that she played a significant role in the decision to alter the nature of the defendant’s business in such a way that it grew in value during the course of the de facto relationship.

353 Viewing the evidence as a whole, including evidence from the defendant’s suppliers to the effect that the furniture sold by them to the defendant was new and of good quality, I find that the defendant’s business at the commencement of the de facto relationship involved the sale of furniture and bedding of a range of qualities; from the cheap and lower quality end of the scale to new furniture of good quality. This product range was sufficient to generate reported sales of approximately $625,000 in the year ending 30 June 1993. Further, as appears below, I am satisfied that it is likely the defendant was taking modest amounts of cash from the business at this stage. His business was one of modest value with the potential to expand. However, as appears below, the large growth in the value of the business was due to significant business decisions made during 1994 after the defendant relocated his business to the Dandenong shop, the risks taken by the defendant and the defendant’s hard work for seven days a week.

354 The commencing value of the defendant’s furniture business was the subject of disagreement between expert valuers called to give evidence on behalf of the respective parties. Whatever view is adopted, the defendant’s business had a relatively low value at the time of the commencement of his de facto relationship with the plaintiff. The range between the experts is between $5,000 at the lowest (the opinion of the plaintiff’s expert) to approximately $136,000 at the highest (the opinion of the defendant’s expert on a particular assumption). Having regard to the large value of the business at the time the parties separated, the commencing value assumes little significance in the overall disposition of the case. However, there is a dispute to be resolved.

355 At the time of the commencement of the de facto relationship, the defendant’s business did not have a proven record of sustained reported profits. In the financial years ending 30 June 1991 and 30 June 1992 it reported small losses. In the financial year ending 30 June 1993 it reported its first profit, in the modest sum of $8,578. In that year, the defendant declared $20,610 as his total salary from DSK.

356 Having regard to this modest trading history, the plaintiff’s expert did not accept that there was a sufficient history of maintainable profits to value the business on a future maintainable profits basis. He valued the business on a realisation of net assets basis, in the sum of approximately $5,000.

357 On the other hand, the defendant’s expert was of the view that, following some small adjustments for motor vehicle expenses, there was sufficient history of maintainable earnings to capitalise at a modest rate and reach a value of approximately $50,000.

358 Both of these valuations were done on the basis of the reported earnings of the business for the financial years ending 30 June 1991, 1992 and 1993. No allowance was made for the possibility that the defendant was, even at this early stage, removing cash from the business. However, both experts recognised that it was a fact of commercial life at this time that retail businesses involved the receipt of cash and that, at least to some extent, cash income was often not reported by business owners. Notwithstanding this, it was commonplace for purchasers to rely upon representations by the business owner as to the actual takings, as opposed to the reported takings, and to pay prices calculated on this basis.

359 The experts agreed that, if there was cash taken by Mr Apostolidis from the business in the period leading to the commencement of the de facto relationship between the parties, that would have a material effect upon the value of the business. However, they agreed that there was no reliable way to estimate the amount of any cash taken by the defendant at this time. There were no available records to justify such an estimation, and the nature of the business altered from 1995. The defendant’s expert made an attempt to estimate the cash taken by the defendant in the year ending 30 June 1993 by reference to records which indicate the possible amount of cash taken from the business by the defendant in the year ending 30 June 1998; and to value the business at approximately $136,000 on this basis. However, on analysis, he accepted that this was not an appropriate way to proceed, primarily because the business in 1998 was different from the business in 1993.

360 In all the circumstances, the Court is left to determine the matter on probabilities. Taking the evidence as a whole, I find that the defendant is likely to have taken cash out of the business in the period leading up to the commencement of the de facto relationship, which cash was not reported as income in DSK’s financial statements or tax returns. However, that cash would not have been of a significant amount, given the fledgling nature of the business and the modest lifestyle then being undertaken by the defendant. Further, when the defendant decided to expand the business into new premises soon after the commencement of the de facto relationship with the plaintiff, he needed to sell his home in order to fund the purchase of new premises.

361 In all the circumstances, I find that the defendant’s business did have a sufficient history of profits to justify valuing it upon a capitalisation of future maintainable profits. It was a business with a future, even if it had remained at the Atherton Road premises and continued to trade in the same manner as it had adopted until that time. Based upon the reported profits, the defendant’s expert valued the business on this basis at approximately $50,000, applying a multiple of between 2 and 2.5 to maintainable profits. Taking into account a modest amount for unreported cash takings, which I would estimate at $10,000 per year, and applying a multiple of 2.5, I would increase that value by $25,000. I find that the commencing value of the defendant’s furniture business was approximately $75,000. As appears below, this makes little difference to the outcome of the case.

362 Valuation of the furniture business at the time of separation of the parties in March 2000 is complicated by the allegation that DSK’s financial statements and tax returns understate the profits earned by it in the conduct of the furniture business during the period 1993 to 2000. It is the plaintiff’s case that the defendant engaged in systematic tax fraud during this period by taking cash receipts from the business for his own personal use, thus causing the financial statements and taxation returns of DSK, and the defendant personally, to be false. The defendant denies this. For the reasons appearing below, I accept the plaintiff’s case. I find that the defendant engaged in systematic tax fraud from at least 1 July 1993 until 30 June 2000. I do not make this finding lightly. I recognise that it is a serious finding to make and requires the appropriate degree of satisfaction.[30] There is in this case clear and cogent proof that the defendant has received substantial amounts of cash from the takings of the business which were not accounted for in DSK’s financial statements and tax returns. My reasons will be referred to the appropriate authorities for investigation and the taking of any necessary action.

363 The Court’s task in making findings as to the value of the furniture business has been hampered by the destruction of the primary business records maintained by DSK at relevant times. The evidence discloses that primary business records, in particular DSK’s duplicate copies of invoices issued by it in respect of sales, and certain ‘diaries’ kept by DSK, may not have been retained by DSK for the statutory seven year period, as required by s 286(2) of the Corporations Act 2001 (Cth). Furthermore, any relevant business records which were or may have been retained for the statutory period were destroyed by fire in July 2007, some six years after the commencement of this proceeding.

364 It was submitted on behalf of the defendant that no inference can be drawn against him for the failure to discover these primary accounting records because no issue of tax fraud was raised prior to the fire. Until that time, the plaintiff had been content to rely upon the tax returns and financial statements for DSK and the personal tax returns of Mr Apostolidis. I do not accept that this provides an acceptable explanation for the failure to discover obviously relevant documents. The fact that the plaintiff may not have been insisting upon discovery of these primary documents is not to the point. As appears below, the defendant well knew that the tax returns and financial statements of DSK, and his own tax returns, were false because they understated income received in cash. In these circumstances, the defendant had a general obligation to discover these highly relevant documents. This is yet another factor which impacts negatively upon the defendant’s credibility as a witness generally. However, as appears below, it is unnecessary to draw an inference that there was deliberate failure to discover relevant documents in order to support a finding that substantial amounts of cash sales made by DSK were unaccounted for in its financial statements and tax returns. Such a finding is supported by other evidence and inferences to be drawn from that evidence. However, the defendant’s failure to discover relevant documents provides further support for the finding.

365 In determining whether or not there were cash takings of the business at relevant times which were not banked or otherwise accounted for, the central factual issue concerns the accuracy of hand-written entries in a series of exercise books. These entries record sales transactions of DSK and the manner in which DSK received payment in respect of those sales. The defendant referred to these exercise books as ‘diaries’ and the case was conducted on the basis that this was a convenient way to describe them.

366 The only diaries which are available form part of the 55 books belatedly produced by the plaintiff in March 2008, some six weeks before the trial was then due to commence. For reasons given above, I reject the plaintiff’s evidence as to the circumstances in which she obtained possession of the 55 books and as to her reasons for not discovering them earlier. However, the fact remains that the 55 books, including the diaries, constitute relevant contemporaneous records relating to the business transactions of DSK during a relevant period. The defendant acknowledges that this is so. However, the defendant contends that the diaries are inaccurate and cannot be relied upon as evidence of the level of sales made by DSK during the periods covered or as to the amount of cash received by DSK during those periods.

367 The accuracy of the diaries as a business record was first raised during the course of the plaintiff’s evidence in chief. It is unnecessary to refer to that evidence, other than to say that I do not accept that the plaintiff had any knowledge of the purpose of the diaries at the times they were prepared. Her evidence that the diaries were maintained for a purpose of keeping both her and the defendant informed as to the financial transactions of the business is, for reasons appearing elsewhere as to the extent of her involvement in the business, improbable and I reject it. In any event, when the issue was first raised, senior counsel for the defendant informed the Court that it was the defendant’s case that the diaries constituted:

368 The defendant acknowledged that books in the form of the diaries were maintained by DSK on a daily basis during the whole of the period of its operation until the introduction of the GST on 1 July 2000. He also agreed that the diaries record sales and receipts by DSK and that, in about 50 per cent of cases, the diaries record a reconciliation of the day’s takings. That reconciliation was prepared from the duplicate invoices. Notwithstanding this evidence, the defendant denied that the diaries were intended to record the sales and receipts of the business. He maintained that the diaries were ‘not an accurate accounting book’ and that the only accurate records of the sales and receipts of the business were the duplicate invoices. When asked as to the purpose of the diaries, he responded:

369 When asked as to what record, apart from the diaries, was maintained in respect of cash receipts of the business, he responded that he knew exactly how much cash was received each day and that, in addition to the diary, he had ‘a separate booklet that I collected the correct amount’. He said that this booklet was separate from the diaries. Having regard to my findings below concerning the diaries, I reject this evidence as improbable.

370 The defendant acknowledged that, except on occasions when cash taken at the Forest Hill shop may have been banked before it was given to him, he took possession of all of the cash takings and kept the cash in a roll in his pocket. He maintained that he kept his own cash separate from the takings of the business, although he acknowledged that he did not often own a wallet. He said that he now owns a wallet, but when asked to produce it in the witness box said he did not have one on him that day. The defendant acknowledged that the cash takings would often remain in his pocket while he attended the Crown Casino at night. As appears below, the defendant was a heavy gambler and experienced gambling losses which could not have been funded by the level of income disclosed in his personal income tax returns.

371 As appears below, the accounting experts engaged by the parties agree that, if the diaries are an accurate record of sales and receipts of the business during the periods covered, the financial statements and tax returns of DSK for the financial year ending 30 June 1998 understate its income by $1,425,575. As appears below, the experts agreed that, on their analysis of the available records, and assuming the diaries are accurate, cash receipts of $1,257,272 were not banked in the 1997/1998 year. The experts reached these agreements following a detailed examination by each of them of the available diaries and other available DSK records for that financial year, a conference between them, and the preparation of a joint report.

372 It is necessary to note that not all of the diaries are available for the financial year 1997/98. Separate diaries were maintained for the Dandenong shop and the Forest Hill shop. Diaries are available for both shops for the 11 month period from August 1997 to June 1998 (the ‘relevant period’). The relevant period represents a very significant period of trading.

373 Further, it was common ground that the available diaries disclose that sales at the Dandenong shop were approximately four times greater than those at the Forest Hill shop, thus enabling inferences to be drawn as to the likely level of sales (and cash received) at the Dandenong shop in July 1997 and, indeed, for the whole financial year.

374 As appears below, although the experts agreed upon many things in their joint report, substantial disputes remained. The first such dispute was as to the accuracy of the entries contained in the diaries. The defendant’s expert maintains that the accuracy of the entries contained in the diaries cannot be relied upon because of various errors, anomalies and uncertainties. The plaintiff’s expert maintains that the diaries were obviously intended to be an accurate record of the sales transactions of the business and that, subject to adjustments agreed with the defendant’s expert to account for some acknowledged errors, they are an accurate reflection of the trading undertaken by the business. This difference of opinion is resolved below in favour of the plaintiff’s expert.

375 In his evidence, which is not entirely consistent, the defendant gave a number of reasons as to why he contends that the diaries do not contain an accurate record of DSK’s sales and receipts.

376 First, he expressed the belief that the diaries have been falsified in some unspecified way. He said that, although he kept diaries at all times between 1990 and 30 June 2000, he believed that the diaries in evidence had been falsified after they were stolen from his business premises. No evidence was led to support this assertion and its only possible basis was that the diaries for the Dandenong shop were completed by a number of different people, unlike the diaries for the Forest Hill shop which were almost all in the handwriting of Steve Yong. In the absence of any evidence from a handwriting expert, or expert evidence from the accountants supporting the defendant’s belief, I reject this possible explanation. I find that all entries in the diaries were made contemporaneously in the course of DSK’s business.

377 Second, the defendant made reference to paying wages in cash during the period covered by the diaries in evidence. However, he said that a cheque was drawn for the amount of those wages and banked into DSK’s account. That matter is considered below.

378 Third, the defendant placed considerable reliance upon occasions when a customer would lose their original invoice (‘the docket’) or would change their mind and wish to purchase a different product. In those circumstances, the defendant said that a new invoice would be issued (‘we re-wrote another docket ... re-wrote this as a sale again’) but in such circumstances ‘a refund was never written up and so on’.

381 The defendant returned to this topic when he was asked about the fact that the diaries for the Dandenong shop contain entries made by him and also by other salesmen. In response, he volunteered a non-responsive answer:

382 Taking the defendant’s evidence on this issue as a whole, he took every opportunity to cast doubt on the accuracy of the diaries and to emphasise his position that the duplicate invoices were the only accurate record of the sales and receipts of the business. The defendant said specifically, on a number of occasions, that all of the cash takings of the business were banked or otherwise accounted for and that the financial statements and tax returns of DSK were accurate. The only exceptions to this were his evidence that wages were paid in cash, and thus may not have been accounted for as either receipts or expenses of the business, and that, on rare occasions, stock was purchased in cash and not declared as either a receipt or an expense of the business. As stated above, I will deal with the payment of cash wages when considering the expert evidence. I will also consider the relevance of any cash payments for stock. However, at this stage, I note that the defendant himself placed little reliance upon cash payments for stock as an explanation for any discrepancy between the receipts recorded in the diaries, if accurate, and the financial statements and tax returns of DSK.

383 The issue of cash payments for stock was first raised by senior counsel for the defendant, and not by the defendant himself, in the following circumstances. The defendant was being pressed in cross-examination as to the level of cash receipts and the manner in which those receipts were applied. I raised with counsel for the plaintiff the possibility of testing the defendant’s evidence by taking a short sample period for which both the relevant diary and the relevant pay-in book of DSK is available. A comparison could then be made between the amount of cash receipts recorded in the diaries and the amount of cash banked according to the pay-in books. When I made this suggestion, the defendant’s partner, Amanda Simpson, approached senior counsel for the defendant and appeared to give him urgent instructions. Senior counsel for the defendant then rose and said that he wished to raise a matter in the absence of the defendant so as to avoid a waste of Court time. After the defendant withdrew, senior counsel for the defendant informed the Court that he was instructed ‘that suppliers and deliverers of goods were in fact quite often paid out of cash, and of course you have the wages too.’[33] Senior counsel for the plaintiff acknowledged that this was a difficulty in the comparison exercise which I had suggested. However, when the defendant returned to Court and was asked about this, he said that suppliers and delivery-men were only paid in cash ‘very rarely’ because he maintained a running account with them and would pay on a weekly or monthly invoice. For example, he said that the supplier “Patra” was paid by cheque and, only on rare occasions, by cash. On those rare occasions, the defendant said that he would give Patra the cash, write a cash cheque for that amount but endorse the cheque butt to record a payment to Patra.

384 This incident demonstrates the weakness of the defendant’s case on this issue. In truth, he had no satisfactory explanation for the large difference between the cash receipts recorded in the diaries and the income recorded in DSK’s financial statements and tax returns. The defendant and those assisting him were floundering around trying to find explanations which might explain the discrepancy. As appears below, they were assisted in this by the expert called to give evidence on behalf of the defendant. Like the defendant, the expert sought to search for possible mistakes in, and anomalies arising from, the diaries in order to challenge their accuracy.

385 The defendant’s personal taxation return for the 1997/1998 year is also instructive. In that year, the defendant declared a taxable income of only $27,248. Reference to objective facts concerning expenditure by the defendant during the financial year reveals that the defendant’s declared income was obviously understated by a very significant amount. The only rational explanation is that the defendant was taking large amounts of cash from the business and applying that cash for his personal purposes. Some of the relevant objective facts are set out below.

386 During the 1997/1998 financial year, the defendant paid all of the joint household expenses of the parties. The evidence indicates that this was between $300 to $400 per week; or $15,000 to $20,000 per year.

387 During the 1997/1998 financial year, the defendant purchased the Yarrabee Court home. He paid a deposit of approximately $140,000. He assumed the liability for the $150,600 mortgage.

388 During the 1997/1998 financial year, the defendant gambled heavily at Crown Casino. According to the casino computer records, the defendant gambled on 160 days in the calendar year 1997, bought chips of over $500,000, and had winnings of approximately $79,000. In the 1998 calendar year he gambled on 90 days, purchased more than $650,000 in chips, and lost $47,800. Although the defendant sought to challenge the accuracy of the Crown Casino records, I am not satisfied that the challenge was a valid one. This is yet another example of the defendant refusing to acknowledge documentary evidence which is against his interests. However, even if the chip buy-ins which are recorded include winnings, and other persons such as the defendant’s brother gambled using his account from time to time, the fact remains that the defendant was gambling amounts far beyond the means of a person who honestly declared a taxable income of only $27,248 in the 1997/1998 financial year. In the 1998/1999 financial year the defendant’s gambling increased significantly. Although he declared a taxable income of only $49,633, he gambled on 114 days, bought chips of $2,352,900, and lost $280,400.

389 During the 1997/1998 financial year, the defendant purchased a Mercedes Benz motor vehicle for approximately $100,000 and for perhaps as high as $130,000. The defendant acknowledged that he bought the car with ‘company money’ but sought to say that all relevant taxes were paid and the whole transaction was recorded in some proper way. However, the car was registered in his name, was never recorded in the asset register of DSK and the defendant’s loan account with DSK contains no entry to reflect the fact that DSK paid for the purchase price. It appears that the purchase price was paid, at least to a substantial proportion, in cash or by bank cheques purchased from cash.

390 When these matters were brought to the attention of Mr Stevens, the accountant for DSK and the defendant, he appeared most concerned. In particular, Mr Stevens said that the defendant’s gambling habits and losses could not possibly have been sustained on the defendant’s declared salary from DSK.

391 I have examined the diaries. It is obvious that the diaries for the Forest Hill shop have been kept quite meticulously by Mr Yong. They have the appearance of being prepared so as to faithfully account to the defendant, as the business owner, for all financial transactions. The diaries in respect of the Dandenong shop are untidy and less formally kept. The defendant said that he did not prepare all of them, and I accept that evidence. It was put to me in final address that approximately 42 per cent were prepared by the defendant and that the balance of the diaries were prepared by other employees at the Dandenong shop.

392 The sales transactions recorded on the duplicates were recorded in the diaries by invoice number, by the amount paid in respect of that invoice and by the method of payment – cheque, cash or credit card. For the Forest Hill shop, and on occasions for the Dandenong shop, the day’s takings were reconciled in writing in the diaries and that written reconciliation was signed or initialled. Although there are not written reconciliations for all days, those that exist disclose the obvious purpose of the diaries; to record the takings of the business and to ensure that those takings as recorded in the duplicate invoices reconcile with the cheques, daily credit card statements (which were often stapled into the diary), and cash. In the absence of duplicate invoices, I find that the diaries are the best available evidence of the takings of the business.

393 Based on the evidence as a whole, the objective facts point strongly towards a finding that the diaries were intended to be an accurate record of the sales and receipts of DSK’s business during the 1997/1998 financial year. A finding to this effect is supported by the plaintiff’s expert but rejected by the defendant’s expert. For the reasons appearing below, I prefer the evidence of the plaintiff’s expert. Indeed, I would have been prepared to make such a finding in the absence of any expert evidence.

394 Further, it is necessary to consider the expert evidence in order to identify agreed adjustments which are required to be made in respect of the entries recorded in the diaries, to consider whether further adjustments should be made as contended for by the defendant’s expert and to reach a conclusion as to the value of the business on 17 March 2000 when the parties separated.

395 The experts prepared a number of reports. First, they prepared separate reports valuing the business at varying times. Second, they prepared further separate reports after the plaintiff’s expert had analysed the diaries. Third, they prepared an initial joint report, which I found unhelpful. Fourth, a second joint report was prepared in response to a detailed order made by the Court following consultation with the parties.

396 Further, with no objection from the parties, the experts gave their evidence concurrently. Each was sworn and their respective reports, as well as the joint reports, were placed in evidence. They were then examined and cross-examined on an issue-by-issue basis. In the course of this process, the reasons for their disagreement on some issues, as expressed in the joint report, were amplified and explored, and some measure of further agreement was reached. I found this process of great assistance in identifying the real issues for resolution.

397 The first issue is the extent to which the diaries can be relied upon as an accurate record of the sales and receipts of the business during the relevant period.

399 The experts were first asked to identify the financial transactions recorded in the diaries. The competing views were as follows.

400 The defendant’s expert, Bruce Wilkinson, said that, in his opinion, the diaries were ‘not used as a prime accounting document’ because:

402 On this issue, I have no hesitation in preferring the opinion of Mr Sincock. My reasons are as follows.

403 First, it will be apparent from my own analysis of the evidence and the diaries that I have reached the same conclusion as Mr Sincock, independent of expert evidence.

404 Second, I reject Mr Wilkinson’s opinion that the diaries contain ‘numerous’ and ‘significant’ errors and duplications. As Mr Sincock’s opinion makes plain, that is not the case. There are a limited number of errors in the diaries, with an insignificant effect upon their overall accuracy. The experts have no difficulty in agreeing upon the necessary adjustments to take account of any errors or duplications. The existence of some errors, duplications or anomalies does not mean that the diaries were not intended to record the sales and receipts of the business. It demonstrates only that some errors were made in the process.

405 Third, Mr Wilkinson sought to cast further doubt on the veracity of the diaries by questioning whether the invoices listed in the diaries, and the amounts listed in the first column opposite those invoices, represented sales. He said that, in his opinion, the amounts stated were ‘not sales but a combination of orders, sales, receipts and quotes.’ I reject this evidence. An examination of the diaries revealed only two quotations, each of which was clearly marked and was not counted by the experts as a sale in reaching their joint opinion as to the total volume of recorded sales. In any event, the distinction between an order and a sale is one only of timing, and Mr Wilkinson agreed that this was so. He endeavoured to meet this by surmising, without evidence, a significant time gap between order and receipt of the sale price.

406 Fourth, viewing Mr Wilkinson’s evidence as a whole and comparing it with that of Mr Sincock, I prefer the evidence of Mr Sincock. On this issue in particular, Mr Wilkinson adopted the regrettable approach of an advocate, rather than an expert.

407 The next matter on which the experts were asked to express a joint opinion was the amount of sales recorded in the diaries for the relevant period. Here, too, Mr Wilkinson sought to complicate issues and cast doubt. He did so by referring to his opinion that some of the amounts referrable to invoices in fact referred to orders or quotes only, and to the existence of some errors and duplications. For the reasons given above, I do not accept that any significant doubt is cast upon the accuracy of the diaries by these matters. When adjustments are made for the identified errors and two quotations, Mr Wilkinson agreed with Mr Sincock that the diaries record total sales of $5,338,417 for the relevant period.

408 On the assumption that the diaries are intended to record the sales and receipts of the business during the relevant period, and subject to the necessary adjustments which were agreed upon and made by the experts, Mr Wilkinson agreed with Mr Sincock that the diaries record total receipts for the relevant period of $5,299,489, comprised of:

(4) $394,807 of unspecified receipts (being a mixture of cash, cheque and credit card).

409 Mr Wilkinson placed some reliance upon the agreed figure for amounts received by cheque, in the sum of $1,026,431. He drew attention to the fact that the available banking records disclose that cheques totalling $1,200,314, an extra $173,883, were banked during the relevant period. This caused him to express the opinion that the total amount of cheques recorded in the diaries ‘is wrong’ and that:

This opinion provides another example of Mr Wilkinson’s approach of trying to identify errors and uncertainties in the diaries, however insignificant, and then using them to form the basis of an opinion that the diaries are wholly unreliable. This is in accordance with the way in which the defendant went about giving evidence concerning the diaries. The discrepancy between the amount of cheques recorded as having been received, and those recorded as having been banked, is easily explained. The experts have agreed that $394,807 is recorded in the diaries as having been received during the relevant period by an unspecified means. It is likely that this amount includes the extra cheques of $173,883 which were banked during the relevant period.

410 The experts agree that the diaries record cash payments to suppliers of stock of approximately $81,000 for the relevant period. In the context of the issues, this is not a significant amount. The experts have taken it into account and made appropriate adjustments in reaching their conclusions.

411 The experts agree that the diaries record other legitimate expenses paid for in cash totalling $46,258 for the relevant period. As with the stock purchases, this is not a significant amount and appropriate adjustments have been made.

412 The experts agree that the diaries record only limited payments of cash wages. A total of $21,585 is recorded, with the amounts being almost equal for the Dandenong shop and the Forest Hill shop. It is obvious that the diaries do not record all of the wages paid, either in cash or otherwise. The issue of wages is referred to in detail below.

413 Putting to one side the question of wages paid in cash, and deducting amounts for stock purchases and other legitimate business expenditures made in cash as recorded in the diaries, the experts agree that DSK understated its income in its financial statements and tax return for the 1997/1998 financial year by $1,425,575.

414 The experts agree that the diaries record cash payments being made to the defendant of $306,281, comprised of $285,606 paid to him from the cash takings of the Forest Hill shop, and only $20,675 from the cash takings of the Dandenong shop. As appears above, it is agreed that the sales and receipts at the Dandenong shop during the relevant period were approximately four times those at the Forest Hill shop. On this basis, the cash takings at the Dandenong shop are likely to have been approximately four times those of the Forest Hill shop. If a similar proportion of the cash takings at the Dandenong shop was paid to Mr Apostolidis, I calculate that approximately $1,140,000 would have been paid to him ($285,000 x 4). The resulting figure of $1,425,000 ($1,140,000 plus $285,000) approximates the understatement of income calculated by the experts for that financial year.

415 I turn to consider the expert opinions as to the value of the DSK business at the time of separation of the parties. In summary, the experts agree upon the methodology of valuation, by capitalising estimated future maintainable profits, but disagree as to the appropriate capitalisation rate and as to the amount of future maintainable profits.

416 The dispute as to the amount of future maintainable profits centres on a disagreement between the experts as to the likely amount of wages paid in the business for the 1997/1998 financial year.

417 In Mr Sincock’s opinion, no adjustment is necessary to the amount of wages claimed by DSK in its financial statements and tax return as a deduction against income. In that year, DSK reported total wage expenses of $182,170. Mr Sincock supported his opinion by reference to his experience that business owners usually claim all wages paid as a deduction so as to minimise their taxable income.

418 Mr Wilkinson disputes this approach to determining the likely wages paid by DSK during the 1997/1998 financial year. In his opinion, a business with sales of the magnitude of DSK at that time, and subsequently, is more likely to have a total wages bill, including the wage of the business owner, of approximately 15 per cent of gross sales. On this basis, he estimates that the wages figure of $182,000 stated in the financial statements and tax return of DSK is understated by nearly $300,000. The 15 per cent figure is based upon industry averages for a business of this kind.

419 I prefer the evidence of Mr Sincock on this issue. It accords with the evidence in the case as to the number of employees in the business and the level of their wages. The DSK cheque stubs which are available for the 1997/1998 financial year show a total of seven employees, including the defendant, his brother Ken and Mr Yong, all being paid a wage of $390 per week until 14 March 1998, and then $450 per week for six of the seven employees. The seventh employee remained on $390 per week. Taking an average tax rate of 20 per cent in respect of these employees, and assuming that the $390 per week salary was paid from the commencement of the financial year, this yields a result broadly consistent with the reported wages in the financial statements and tax returns. If all of the seven employees were paid $390 per week after tax until 14 March 1998, and $450 per week after tax from that time, Mr Wilkinson agreed that the average wage for the year would have been approximately $405 per week. Adding tax of approximately $100 per week on the gross income of each employee (making an average gross income of $505 per week per employee) equates to a total wages bill of $183,820 for the financial year. This arithmetic is consistent with the evidence in the case. Mr Stevens said that the business ‘didn’t have a big staff’, and I accept that this is so. My general impression of the defendant is that he is unlikely to have been generous in payments to his staff. The fact that he did not pay any maintenance for his daughter for many years supports that general impression. Accordingly, no adjustment is necessary to increase the amount of reported wages when determining the average profitability of the business for the purposes of its valuation.

420 With the rejection of Mr Wilkinson’s evidence that the diaries do not, even when adjustments are made for identifiable errors, constitute a reliable record of the cash sales and receipts of the business, and rejection of his opinion that the wages expenses of the business should be substantially adjusted, there remains little significant difference between the experts as to an appropriate valuation of the business at the time of separation in March 2000.

421 Both experts agree that an adjustment needs to be made for a commercial salary to the defendant in an amount of $75,000.

422 In estimating the future maintainable profits of DSK as at the date of separation, Mr Sincock has assumed that the reported income and expenses of DSK were understated in the years ended 30 June 1999 and 30 June 2000 in a similar proportion to the understatement for the year ending 30 June 1998, in respect of which there are diaries available for almost the complete year. This involves increasing the reported sales by 32.4 per cent in each of the three years, increasing the cost of goods sold by 2.5 per cent for each year to take account of cash payments for stock and other legitimate expenses, and arriving at an adjusted net profit before tax. Mr Sincock has then taken an average of the net profit before tax in each of these three years and estimated future maintainable profits before tax at $2,335,000 per annum. I accept this calculation of future maintainable profits.

423 That leaves the dispute between the experts as to the capitalisation rate. The choice of a capitalisation rate is largely a matter of impression based upon experience and professional judgment. Mr Sincock identified a range of capitalisation rates between 3.5 times and 4 times maintainable profits, based upon the fact that the business had been experiencing solid sales growth and good profitability over the relevant three years. Adopting a mid-point, he valued the business at March 2000 in the sum of $8,756,250. To this he added the sum of $1,267,000, representing surplus disclosed assets of DSK. This resulted in a total value of $10,023,250.

424 Mr Wilkinson adopted a lower capitalisation rate of 3.4 times. However, that capitalisation rate was chosen on the assumption that his substantial adjustment for extra wages expenses was accepted. In his oral evidence, Mr Wilkinson accepted that Mr Sincock’s capitalisation rate was a reasonable one if his own thesis that the wages should be substantially increased above the reported levels was rejected. On that basis, he said that he would ‘have to agree that probably four times is a reasonable multiple.’

425 There is no dispute that DSK had net non-operating assets, or surplus assets, of at least $1,267,000 as at June 2000.

426 On this basis, I adopt a round figure for the value of DSK as at the date of separation on 17 March 2000 of $10,000,000.

427 It was submitted on behalf of the defendant that, in considering the assets of the parties at the end of their relationship, account must be taken of both actual and contingent liabilities. Accordingly, it was submitted that if, contrary to the submissions made on behalf of the defendant, the Court concluded that the defendant had avoided tax by failing to declare cash income, the amount of the tax which was avoided, together with interest and penalties payable to the Taxation Commissioner, should be deducted from the value of the business. I accept this submission. Such a result is in accordance with authority, commonsense and justice.

428 The issue has been considered in the Family Court on a number of occasions. The authorities were recently reviewed by the Full Court of the Family Court in Commissioner of Taxation and Worsnop.[38] In that case, the Full Court considered a case where the assets of the parties to the marriage were insufficient to pay the whole of the outstanding tax liability. Accordingly, the Full Court was required to determine whether the trial judge’s order that only one-half of the assets be paid to the Commissioner of Taxation was a proper exercise of discretion. No such issue arises in this case. It is clear from the evidence as a whole that the defendant has continued to successfully operate his business and to grow his assets since March 2000. I find that he has sufficient assets to pay any assessed tax, interest and penalties. He also has sufficient assets to pay the amount which I find hereafter is necessary to compensate the plaintiff for her contributions to the joint asset pool of the parties.

429 In circumstances such as the present, where there is no competition between the parties and the Taxation Commissioner due to an insufficiency of assets, the analysis of the cases by the Full Court in Worsnop is consistent with the recognition of contingent liabilities to the Taxation Commissioner for primary tax, interest and penalties in identifying the net asset pool of the parties, as required by s 285 of the Act. This is especially so in circumstances where the claimant for an adjustment order knows or ought to know of the tax avoidance committed by the respondent to the claim.[39] In this case, there is no question of the plaintiff having knowledge of the tax avoidance. It is her claim that she witnessed it throughout the course of the de facto relationship with the defendant and she has vigorously pursued a case based upon tax fraud during the trial of this proceeding.

430 However, I do not accept the defendant’s submission that an adjustment should be made against the value of the business for interest accruing on unpaid tax beyond the date of separation in March 2000. From that day onward it was for the defendant to determine whether to make a voluntary disclosure and to pay unpaid tax, penalties and interest which were assessed. The decision not to do so was his alone. He had sufficient assets at his disposal to pay if he chose to do so.

431 The experts have provided the Court with an agreed spreadsheet setting out the amount of unpaid tax for the financial years ending 30 June 1996, 1997, 1998, 1999 and 2000. The spreadsheet also calculates the interest payable on that unpaid tax and the likely penalties. The spreadsheet assumes acceptance of Mr Sincock’s evidence as to the likely amount of undeclared income in those financial years. For the reasons stated above, I accept that evidence. Further, I accept the joint opinion of the experts that the unpaid tax is likely to be assessed against the defendant personally, and not just DSK, and thus to attract a taxation rate of 48.5 per cent and not the company tax rate payable by DSK. I also accept the experts’ opinion as to the likely level of penalties.

432 The spreadsheet enables the appropriate adjustment to be calculated as at 31 March 2000, only two weeks after the date of separation. I adopt that as an appropriate date. Subject to some adjustments mentioned below, the spreadsheet discloses a contingent liability of the defendant for unpaid tax and interest as at 31 March 2000 of $3,387,398, calculated as follows:

1996	Unpaid tax and interest	$379,738
1997	Unpaid tax and interest	$615,086
1998	Unpaid tax and interest	$691,848
1999	Unpaid tax	$733,470
2000	Unpaid tax	$967,256
	Total	$3,387,398

433 There is no unpaid interest in respect of the 1999 or 2000 tax years. This is because the final date for DSK to pay its tax in each of those years was 15 May 2000 and 2001 respectively. Each of these dates is after the 31 March 2000 date which has been adopted for calculations. In my opinion, the unpaid tax for these two years should be discounted back to 31 March 2000, at an interest rate of 10 per cent. This results in an adjustment of $8,450 in respect of the unpaid tax for the 1999 year and $107,850 for the unpaid tax in respect of the 2000 year, making a total adjustment of $116,300. Accordingly, I find that the amount of unpaid tax and interest to be adjusted at 31 March 2000 was $3,271,098 ($3,387,398 minus $116,300).

434 To this figure, it is necessary to add penalties. However, I do not accept the defendant’s submission that all of the penalties should be adjusted against the value of the business. As at the date of separation on 17 March 2000, tax for the 1999 and 2000 years was not yet due and payable. In those circumstances, it is only the penalties for the years 1996, 1997 and 1998 which should be taken into account. Those penalties total $688,289.

435 On this basis, I conclude that the net value of the defendant’s business at the date of separation was $6,040,613, calculated as follows:

Assessed business value	$10,000,000
Less unpaid tax and interest	$3,271,098
Less penalties	$688,289
Net business value	$6,040,613

436 It was submitted on behalf of the defendant that the value of the business should be reduced by 50 per cent, to take account of the plaintiff’s position in supporting Ken’s case that he was entitled to 50 per cent of the business. I reject that submission. However, Ken’s claim was a contingent liability of the business at the separation date. It was settled for $500,000 including costs. The business value should be reduced by that amount, to $5,540,613.

437 Given that a substantial degree of estimation by both the experts and myself is involved in reaching this net value, at both the valuation stage and in considering the likely amount due for unpaid tax, interest and penalties, I will round this amount down to a net value of $5,500,000.

438 This is not an end to the issues arising from my finding that the defendant avoided the payment of substantial amounts of tax. Not only must the business be valued on that basis, but it is also necessary to take into account the fact that the defendant received substantial amounts of cash in the years ending 30 June 1996, 1997, 1998, 1999 and until 17 March 2000. For the purposes of his valuation, Mr Sincock has estimated that this cash totals $6,345,452 for the period to 30 June 2000. I adjust that figure down to account for the period 17 March to 30 June. The estimated cash for the year ending 30 June 2000 is $1,994,344 or $5,463.95 per day. The period 17 March to 30 June is 105 days. A deduction of $573,700 is therefore required. This reduces the total estimated cash from $6,345,452 to $5,771,752. I will round this to $5,750,000.

439 It was submitted on behalf of the plaintiff that the whole of this cash should be added to the asset pool, because the reported profits of the business were sufficient to enable the acquisition of the other assets of DSK and the defendant. I accept that some allowance needs to be made for the unreported cash receipts of the business, but not to the full extent contended for by the plaintiff. The defendant’s declared personal income in his tax returns was insufficient to fund the acquisition of a number of his assets, each of which the plaintiff submits should be taken into account in identifying the asset pool. I find that these assets were acquired with cash, sourced from cash receipts of the business, and thus there would be double-counting if the cost of these assets were included in addition to the cash used for their acquisition. In this regard, I make the following adjustments:

Personal living expenses of the parties for five years at $1,000 per week	$260,000
Purchase of the Yarrabee Court home ($140,000 deposit plus approximately $20,000 in mortgage repayments)	$160,000
Cash purchase of Mercedes Benz	$100,000
Total	$520,000

440 Further, an adjustment needs to be made to allow for a commercial wage to the defendant. The defendant’s declared income was significantly less than the wage to which he was commercially entitled as a business owner working seven days a week. The rest was (notionally) taken in cash. His declared salary income for the years ending 30 June 1996 to 2000 totalled approximately $200,000. Adopting an average commercial salary of $75,000 per year for five years gives a total of $375,000. A further adjustment of $175,000 is required.

441 There are other items of expenditure which were no doubt incurred but which have not been included, or do not have a value attached to them, in the list of personal assets of the parties. These items include clothing, jewellery, medical expenses, insurance, costs associated with owning the Yarrabee Court home, costs associated with running motor vehicles, the acquisition of the plaintiff’s motor vehicle, holiday costs, costs of eating out on a regular basis and other trappings of a very comfortable lifestyle. I will adopt a further figure of $1,000 per week for these likely expenses, making another $260,000 for the five year period.

442 Further, the evidence discloses that the defendant lost significant amounts from gambling during this five year period. The Crown Casino records indicate that the total losses in the period approximated $240,000, as follows:

1995	$834 DR
1996	$7,393 CR
1997	$79,114 CR
1998	$47,800 DR
2000	$280,400 DR
Net loss from gambling	$242,527

444 I do not accept the submission made on behalf of the plaintiff that the gambling losses of the defendant involve waste. The defendant was obviously a hard-working man who, for his own reasons, chose to spend his leisure time gambling. Having regard to the level of income in truth earned by the defendant, his gambling losses should be taken into account as part of his justifiable expenses of ‘entertainment’.

445 Accordingly, the amount of cash estimated by Mr Sincock (adjusted to 17 March 2000) needs to be adjusted by the total amount of $1,195,000, calculated as follows:

Adjusted cash	$5,750,000
Less Day to day living expenses	$260,000
Less Purchase of Yarrabee Court home	$160,000
Less Cash purchase of Mercedes Benz	$100,000
Less Commercial wage adjustment	$175,000
Less Estimated further ‘lifestyle’ expenditure	$260,000
Less Net gambling losses	$240,000
Total cash	$4,555,000

446 Having regard to the degree of estimation which is involved, I will round this down to $4,500,000.

447 Accordingly, I conclude that the net value of the business at the separation date on 17 March 2000, and of the unreported cash or undisclosed assets acquired from cash, was $10,000,000:

Net value of the business	$5,500,000
Adjusted cash or undisclosed assets	$4,500,000
Total	$10,000,000

448 During the course of the relationship, the defendant acquired significant assets, as follows:

(1) the Yarrabee Court home. It is agreed that his equity in this home was $261,100 at the separation date;

(2) through Azura, the Dandenong shop, being the commercial property situate at 1/200 Princes Highway, Dandenong. It is agreed that the equity in this property was $746,644 at the separation date;

(3) surplus cash in Imex of $102,789. This was distributed to the defendant as a dividend in 2003. It was submitted on behalf of the defendant that this is double-counting because the assets of Imex are included in the valuation of the business conducted by DSK. I reject that submission. Imex was conducted as a separate entity and the amount of this cash has not been taken into account by the experts in valuing the business conducted by DSK;

(4) a Mercedes Benz motor vehicle. The plaintiff estimates its value at $70,000. The defendant estimates the value at $50,000. The matter is not significant in the overall disposition of the case and I adopt a mid-point of $60,000; and

450 It was submitted on behalf of the plaintiff that there were other assets which have not been disclosed to the plaintiff or to the Court. There were various suggestions by the plaintiff of the defendant maintaining bank accounts, businesses and investments in other countries. In the absence of any evidence to this effect, I make no finding. In any event, this would involve double-counting as the likely amount of cash retained by the defendant from the takings of the business has been calculated above.

451 It was also submitted on behalf of the plaintiff that assets acquired by the defendant after the separation date should be included, because they were purchased from the assets of DSK or the defendant. Reference was made to the acquisition of 7/200 Princes Highway, Dandenong, in July 2000 for the sum of $1,150,000, and the acquisition of the property adjoining the Yarrabee Court home for the sum of $700,000. Other assets were also referred to. I reject these submissions. The defendant’s assets at separation were those stated above and I proceed on that basis.

452 Based on the above, the defendant’s assets at the separation date totalled $11,177,933, calculated as follows:

Net value of the business	$5,500,000
Adjusted cash or undisclosed assets	$4,500,000
Other assets	$1,177,933
Total	$11,177,933

453 The plaintiff’s assets at the separation date were, by comparison, very modest. She had bank accounts totalling approximately $50,000 and the $10,000 in cash given to her by the defendant, a total of $60,000. She also had the motor vehicle which had been purchased for her by the defendant, with a value of approximately $8,000. There was also the engagement ring and her personal effects. In total, she had no more than $75,000 and I so find. I reject the defendant’s submission that the plaintiff had a beneficial interest in a property resided in by her mother but owned by the plaintiff. The evidence discloses the plaintiff had no beneficial interest in that property.

454 Senior counsel for the defendant described his instructions as to the plaintiff’s role in the business in the following terms:

455 The plaintiff contends that she made very significant contributions to the defendant’s business, that she has not been sufficiently compensated for those contributions, and that she is accordingly entitled to an adjustment order that the defendant pay her an amount of not less than one-half of the value of his business as at March 2000 when they separated. Having regard to the very substantial value of that business when compared with the domestic assets of the parties, this aspect of the plaintiff’s claim is by far the greatest in dollar terms. Unsurprisingly, the issue generated a great deal of evidence from both sides as to the extent of the plaintiff’s contributions, raising many factual disputes of varying significance to the overall disposition of this aspect of the case. It is unnecessary to resolve all of those disputes.

456 The plaintiff’s claims in this regard raise three central issues for determination. First, whether or not the plaintiff made any direct or indirect financial contributions to the growth of the business. Second, whether or not the plaintiff worked in the business and, if so, to what extent. Third, whether or not the plaintiff directly or indirectly participated in significant business decisions which resulted in the growth of the business, particularly in respect of the decision made in 1994 to commence importing furniture from Malaysia.

457 The plaintiff said that it was the defendant who persuaded her to sell her Byfield Street home. She said that the defendant approached her and said there was no sensible reason for her to continue owning a property with her mother when she was living with him and they were planning to buy another property, and that the defendant said ‘We also need the money to fit out the new business’. The plaintiff said she was not happy with the defendant’s suggestion that she sell the Byfield Street home because her mother was living there at the time with her sister, Jasenka, who was newly pregnant, and Jasenka’s young daughter. She was concerned about where they would go. When she expressed these concerns to the defendant, he convinced her to sell. She gave the following evidence:

458 The defendant denied any involvement in, or discussion with the plaintiff about, the decision to sell the Byfield Street home. He said that the plaintiff simply told him that she intended to sell it and that he did not recall the rest of that conversation. I do not accept this denial. It does not accord with the probabilities. By 6 December 1993, the defendant had located the Dandenong shop premises and paid a preliminary deposit in respect of it. On 7 December 1993 the defendant instructed his solicitors to acquire a shelf company to purchase that property. On the next day, 8 December 1993, the plaintiff and her mother appointed a real estate agent to sell the Byfield Street home. It would be a remarkable coincidence if there was no connection between these events. Something must have made the plaintiff and her mother decide to sell the Byfield Street home.

459 It was submitted on behalf of the plaintiff that the obvious reason was the financial need of the defendant at this time. The defendant was embarking upon a very large expansion of his business, involving an expensive purchase of real estate in circumstances where there was no certainty that he could obtain funding to complete the purchase. It was submitted on behalf of the defendant that there was another, more probable reason: that the plaintiff’s mother Maria was, in the plaintiff’s own words, by this time living ‘more permanently’ with Con, and that it made sense for the plaintiff and her mother to separate their financial interests in the Byfield Street home.

460 I do not accept the defendant’s submission. The plaintiff’s mother did not in fact move in and live permanently with Con following the sale of the Byfield Street home. She lived first in rented accommodation with Jasenka and her daughter and then purchased another home in Sunshine. I find that the defendant must have wondered whether he had ‘bitten off more than he could chew,’ and considered that he may need access to some cash while he established his business at the Dandenong shop. In fact, the defendant had difficulty in obtaining finance for the purchase of the Dandenong shop and needed to fund the final $20,000 of the purchase price by access to the DSK overdraft facility. This indicates that finances were tight and the defendant had good reason to ask the plaintiff to place herself in funds in case he needed access to them. I find that the Byfield Street home was sold at the defendant’s request to provide a fund upon which he could draw if needed for his business.

461 As appears above, the plaintiff alleges that following receipt of the net sale proceeds of the sale into her passbook account, an amount of $51,200, the defendant at all relevant times retained possession of the passbook. For the reasons given below, I do not accept that evidence. However, that is not the end of this issue. The plaintiff further alleges that the moneys standing to the credit of the passbook account were applied at the direction of the defendant for two purposes: to assist him with cash needs of the business, and to pay most of the joint household expenses of the parties. The defendant denies this. Further, the plaintiff alleges and the defendant denies that some cash deposits into her account were made at the request of the defendant, and were subsequently withdrawn at his request, in order to ‘hide cash money away’ from the Tax Office because of his ‘great hatred for the tax man’.

462 I will deal first with the alleged use of the plaintiff’s money towards payment of the joint household expenses of the parties. This issue also raises for determination the factual dispute as to who controlled the passbook at relevant times.

463 The plaintiff said that she did not make any withdrawal from the passbook without first obtaining the defendant’s direction or consent. This included small withdrawals which were made for groceries and daily living expenses. Although the plaintiff conceded that the defendant gave her cash from time to time for living expenses, she said that it ‘wasn’t a lot of money ... he wanted to use the money out of this [pass]book as well, for whatever reason I don’t know’. The plaintiff said that, in the main, the money for household expenditure came from the passbook and not from cash given to her by the defendant for that purpose. When she had insufficient cash for household expenses, the plaintiff said that she would have to ask the defendant and he would give her the passbook with a direction that she could only take out a specific amount and then return the passbook to him. She said this was the invariable practice. In respect of purchases which were made, she said that she was required by the defendant to provide him with all of the receipts and that he took possession of them and put them in his brief case.

464 The defendant denied that he had possession of the passbook as alleged by the plaintiff. He said that the plaintiff retained possession of her passbook at all times and that all transactions recorded in the passbook were made at the plaintiff’s discretion without his input. He denied that the plaintiff used the passbook for joint living expenses, as he regularly gave the plaintiff cash for this purpose.

465 I accept the defendant’s evidence that the plaintiff retained possession of the passbook at all relevant times. First, I reject the plaintiff’s evidence that most of the household expenses were paid for from her passbook account. This is directly inconsistent with the plaintiff’s answers to interrogatories on this issue, where she swore that:

466 Second, it is highly improbable that the defendant would provide this level of cash for weekly household expenses and then require the plaintiff to use her passbook account for other insignificant amounts on a regular basis, requiring her to request possession of the passbook, go to the bank, return the passbook to him and satisfy him that she had only taken out the amount which he allowed. This makes no sense. For example, the passbook records the plaintiff making numerous small withdrawals, only a few days apart, during the period March, April and May 1994. On 29 September 1994 the passbook records a withdrawal of $30 in cash. On 4 October 1994 the passbook records a withdrawal of $20 in cash. It is highly unlikely that the defendant was in control of the passbook at these times. Similar examples can be found in February 1995 ($50 cash), March 1995 ($40, $20, $10 and $40 in cash), and so on.

467 Third, putting to one side the large withdrawals, which the plaintiff swore were for business purposes, or to repay cash hidden in her passbook account from the Tax Office, there are many other periods where the withdrawals which are recorded were insufficient to maintain the household and are sporadic in nature. For example, very little was withdrawn in the period March, April and May 1994. Further, there were no withdrawals of any substance in the period May 1995 to the closure of the passbook account in October 1997. The only significant withdrawals were $240 cash on 6 May 1995, $450 cash on 1 March 1996 and $10,000 on 11 April 1997 (which was immediately followed by a cash deposit of $10,000 three days later and can thus be disregarded).

468 Fourth, it was not until the final version of her statement of claim, in March 2008, that the plaintiff alleged for the first time that the moneys standing to the credit of her passbook account were used for household expenses.

469 I turn to the alleged withdrawals from the passbook account for business purposes.

470 In respect of some large amounts which were withdrawn, the plaintiff said that she could recall what they were for. She gave an example of a cash withdrawal of $9,500 on 8 June 1994. She said that this was for carpeting of the Dandenong shop. She referred also to a cash withdrawal of $10,000 on 8 September 1994. She said that this withdrawal was for part payment for the sign ‘Central Furniture’ on the front of the Dandenong shop.

471 The plaintiff’s evidence that she contributed $10,000 towards an electric sign was denied by the defendant. Cheque butts evidencing payments by DSK of $23,000 to the sign manufacturer and installer were placed in evidence. The defendant said that there were two signs erected and that together they cost about that amount. This was confirmed by the evidence of the manufacturer/installer. However, apart from the cheque butts, there is no documentary record of the transactions concerning the two electric signs.

472 The defendant said that the only discussion which he had with the plaintiff concerning the use of her money in the passbook account was at a time ‘well into 1994’ when he encouraged the plaintiff to use her money to buy another house. The defendant gave the following evidence concerning this conversation:

473 Although the defendant denied that he ever had possession of the plaintiff’s passbook, he acknowledged that there are some numbers on the passbook which are in his handwriting. He said that he wrote these numbers on the passbook during the course of a conversation in which he suggested to the plaintiff that she should use her money to purchase a home. The defendant gave the following evidence:

474 I do not accept this evidence. I find that the plaintiff lent moneys from her passbook account to the defendant during 1994, at his request, for business purposes. Although the plaintiff may be mistaken as to the precise purposes of these loans, I am satisfied that the defendant did ask her to advance him money for business purposes during 1994 while he was establishing his business at the Dandenong Road shop. My reasons follow.

475 First, the making of such loans is consistent with my finding above that the plaintiff agreed to the sale of the Byfield Street home in order to obtain funds to assist the defendant in the expansion of his business in the event they be required.

476 Second, as appears above, the acquisition of the Dandenong Road shop stretched the defendant’s financial resources. He put all of his own money into the purchase (including the net proceeds of sale of his home), borrowed extensively on security including the guarantee of his brother Ken and his wife (supported by a mortgage over their home), and drew down $20,000 on DSK’s overdraft facility. When the defendant moved into the Dandenong Road shop there were obviously associated expenses, including for electric signage and other matters. Although the landlord paid for works such as painting and erection of a dividing wall, it does not follow that the plaintiff is lying when she says she believes her contributions went towards such works. There were many things happening at the time, and the defendant may have put his requests forward to the plaintiff in terms which were not entirely accurate, or which gave rise to misunderstandings.

477 Third, the plaintiff’s initial pleadings (as particularised) alleged loans to the defendant for his business in the sum of $36,210 in 1994, and repayments thereafter of $21,000. This left a balance of $14,210. At the time these allegations were made, the plaintiff’s recollection of events would have been at its freshest. I find that the particularised loans and repayments are the best evidence of the assistance given by the plaintiff to the defendant in his business during 1994 and the subsequent repayment by the defendant of the amounts advanced to him. The balance of $14,210 was probably repaid by the defendant’s parting payment of $10,000 to the plaintiff and the car retained by her. The defendant was coy when asked about the extent of negotiations leading to the calculation of the $10,000. I do not accept that he has no recollection as to how that sum was arrived at.

478 The passbook account was closed on 14 October 1997 with a credit balance of $42,996. That amount was then transferred into a term deposit account in the name of the plaintiff with the Commonwealth Bank. From that time, the term deposit account remained unused until the end of the relationship between the parties in March 2000. The plaintiff said that this was because, in October 1997, she and the defendant agreed to ‘leave this money in there, not to touch it’ for the purpose of saving it as a contribution towards the purchase of the premises at Unit 7/200 Princes Highway, Dandenong, then known as ‘Mike’s Gym’, to enable expansion of the business. Since the cessation of their relationship, the defendant has in fact proceeded to purchase 7/200 Princes Highway, Dandenong, and it has become his main retail premises.

479 I reject the plaintiff’s evidence in this regard. By October 1997 the defendant’s business was flourishing, and he had no further need to access the plaintiff’s funds. Even if the Mike’s Gym premises had been identified at this time as a property to be acquired in the future, the defendant did not require the plaintiff’s funds to do so. The lapse of a number of years before the Mike’s Gym premises were acquired by the defendant is another objective factor against accepting her evidence on this issue.

480 However, notwithstanding my finding that the plaintiff made some loans to the defendant for the purposes of his business, I reject the plaintiff’s evidence that these loans or contributions totalled $55,450. The plaintiff was unable to explain why her initial allegation that she lent $36,210 to the defendant came to be amended over various iterations of her statement of claim to an allegation that she ‘provided’ a total of $55,460 to the defendant to assist him in operating and improving his business, and that this provision of funds was by way of contribution of capital to a business in which she now contends she was a part owner. I accept the defendant’s submission that it is likely the plaintiff was unable to explain the amendments to her allegations because she was not responsible for them. The amendments are in my view likely to have been the result of the involvement of Mr Pollett who, for reasons given above, from soon after he met the plaintiff in 2001 assumed effective control of the proceeding on behalf of the plaintiff, and sought to influence its outcome by maximising the extent of the plaintiff’s contributions.

481 It is unnecessary to determine whether a number of substantial deposits and withdrawals from the passbook account were made at the direction of the defendant to ‘hide money’ from the Tax Office, as alleged by the plaintiff. In late 1994 and early 1995, when the defendant was establishing the business at the Dandenong shop, this may be so. However, in later years, the large amounts of cash retained by the defendant make it unlikely that he would have used the passbook account for this purpose. Further, the payments could have been for loan repayments or the plaintiff’s private dealings. I find that these deposits and withdrawals were probably a mixture of these things. However, wherever the truth lies, these matters do not affect the overall disposition of the plaintiff’s claims.

482 Before the plaintiff met the defendant, she had some retail experience. Her first employment, between the ages of approximately 16 and 19, was in furniture retailing. Subsequently, she worked in a series of retail jobs which involved dealing with customers and explaining the merchandise on offer, including expensive imported Italian dinnerware and other up-market products. I accept this evidence. I reject the defendant’s attempt to denigrate the plaintiff’s retail experience by stating that she did not, to his knowledge, work at any time in the furniture retail industry and that she only worked part-time in selling up-market products. The plaintiff’s evidence in this regard was not seriously challenged in cross-examination and the defendant could have no knowledge as to her prior work history. His assertion that the plaintiff only pretended that she had previously worked in the furniture industry demonstrated that he, like the plaintiff, is prepared to issue gratuitous insults whenever he thinks it will assist his case.

483 The plaintiff said that, from the day after she returned with her possessions and began living with the defendant in May 1993, she commenced working seven days a week in the defendant’s furniture business at Atherton Road.

484 The plaintiff said she worked at the business premises for seven days a week until about 1998 when she reduced her days to ‘at least five days’ per week. She said that this was because David was getting older and required more of her time as his studies became more difficult and he had to be collected from school more often.

485 During the initial period when the plaintiff says that she worked seven days a week, the plaintiff said that she would attend the business premises and work on a daily basis unless performing household duties or looking after David. The plaintiff said that she would travel to the business premises with the defendant most of the time, although there were occasions when the defendant would have driven the delivery truck home and they would go to work separately.

486 By 1999, the plaintiff acknowledged that she was not working in the business that often because she was doing her beautician’s course. However, the beautician’s course had holidays consistent with school holidays, and during that period she said that she was ‘in the business all times then’. Further, she said that she was ‘in the business after hours but not every day after my schooling hours, as I had a lot of studies I had to do, and they were done at home. I did no study at the business.’

487 The plaintiff acknowledged that, by the year 2000, she had ceased working in the business. She gave the following explanation for this:

488 According to the plaintiff, the defendant explained his change in attitude to her working outside the business in the following terms:

489 Later, the plaintiff said that the defendant said to her that the reason for his change in attitude was:

490 I do not accept the plaintiff’s evidence as to the defendant’s involvement in her decision to undertake the beauty therapy course. It is more likely that the plaintiff simply grew tired of her relatively menial role in the business and decided to do something else; and the defendant did not object. The plaintiff’s attempt to elevate her purpose in undertaking the beauty therapy course, to help young acne sufferers, is just another of the plaintiff’s false embellishments designed to portray herself in the most positive light.

491 In her evidence in chief, the plaintiff described her work in the business in the following way:

492 The plaintiff was asked to give an account of a typical working day when she worked in the business. She gave a long-winded explanation full of irrelevant material which was clearly designed to denigrate the defendant at every opportunity. In summary, the plaintiff described her working day as involving following matters:

(1) travelling to the business premises with the defendant and purchasing breakfast for them and the staff on the way;

(4) doing all of the cleaning, including vacuuming, dusting, cleaning the toilets and other matters;

(7) attending with the defendant at the premises of wholesale suppliers to buy stock;

(9) banking cheques and cash at a nearby bank on a regular basis. She said she was the person who mainly did the banking because she would be out buying lunches;

(10) buying the ingredients for and preparing staff lunches and other refreshments such as afternoon tea;

(11) taking books and records to the accountant for the business, Hugh Stevens, about once every three months.

(13) preparing floral arrangements to assist in presenting the stock in an attractive setting.

493 In order to bolster her evidence that she worked in the business, the plaintiff produced a very basic business card for the Atherton Road business which bore her first name only. The business card has the symbol of a compass on it. The plaintiff said that the defendant gave her these business cards and explained the significance of the compass symbol in the following terms:

494 The plaintiff said that these business cards were printed on a machine in the lobby of a cinema after a conversation in which the defendant said to her ‘My darling, I think it’s about time we get some business cards printed out for you’. The plaintiff said that this was in or about early 1994. I do not accept this evidence. If the plaintiff was involved in the business to the extent she claims, it is extremely unlikely that the defendant would have provided the plaintiff with business cards bearing no resemblance to those produced for himself and the other employees of the business. Those business cards were professionally printed and included photographs. Further, it is highly unlikely that the defendant would have given the plaintiff a business card in the circumstances described by her, particularly given her evidence that she was not allowed to answer the phone or write on any business documents. I find that the business card produced by the plaintiff is likely a fabrication by her and has nothing to do with the defendant.

495 The defendant denied that the plaintiff had any significant involvement in the furniture business. He spoke of the plaintiff’s alleged contributions in a derisory fashion.

496 He acknowledged that the plaintiff and Ken’s wife, Anna, visited the Dandenong shop when it was being set up and, on that visit, both of them engaged in some vacuuming for a brief time before they left. This is depicted on video film taken at the time.

497 The defendant said that the plaintiff did not work inside or outside of the business. She would frequently ‘visit’ him at one or other of the furniture shops and, at those times, she sometimes did some dusting or purchased lunch for him or staff members, placed fresh flowers in the Dandenong shop on one or possibly two occasions following the completion by her of the floristry course in 1997, and may have been asked to do the banking on one or two occasions.

498 As to the banking, it was common ground that none of the many deposit slips which are available and in evidence bear the plaintiff’s handwriting or initials, although many of the deposit slips are incomplete and a significant portion of them are not initialled. Notwithstanding this, the lack of any evidence of the plaintiff’s handwriting or initials on the deposit slips supports the defendant’s case that the plaintiff did little of the banking. I am not satisfied that the plaintiff performed the banking on a regular basis.

499 The defendant denied that the plaintiff played any role whatsoever in dealing with customers of the business. He stated adamantly that ‘She has never sold anything’. He said this was because ‘She has no product knowledge. She was not interested in product knowledge.’

500 The defendant acknowledged that, at times, the plaintiff would speak with customers. However, he said that this had nothing to do with the plaintiff being involved in any sale or attempted sale. He denied that the plaintiff engaged in a practice of greeting customers and putting them at ease, by discussing mundane things like the weather, making pleasant comments about a customer’s child and so on. He said that, rather, any interactions between the plaintiff and customers were incidental and no different to two customers exchanging pleasantries as they browsed in the shops. The defendant refused to acknowledge that, in the course of such conversations, the plaintiff would have a pleasant manner in dealing with the customers with whom she spoke. He said that the plaintiff ‘had a normal manner. She was not rude and she was not nice. She talked to people.’

501 The defendant denied that the plaintiff had any role whatsoever in dealing with sales representatives or in choosing stock for the business. He acknowledged that she dropped documents off to the accountant, Hugh Stevens, on about three occasions.

502 In order to bolster her claim to have been working in the business, the plaintiff gave evidence concerning her knowledge of the grades of leather which were available for use on lounges. She said that she accompanied the defendant on a business trip to Malaysia in 1996 and took part in conversations about the quality of the lounges to be manufactured:

503 The defendant referred to the plaintiff’s evidence concerning grades of leather with derision. He said, ‘She had no idea what she was talking about’. In particular, he denied that the plaintiff understood the concept of ‘split leather’ and what it is used for. In this context, the defendant gave the following evidence:

504 I was initially minded to reject the defendant’s criticisms of the plaintiff’s product knowledge in this regard. When he was cross-examined on this issue, it became apparent that the use of split leather was known in the furniture industry in early 1995 when the first container of imported leather lounges was received by DSK. The defendant acknowledged that about one-half of the lounges which were delivered contained some split leather on the non-movable parts. This was an issue for him and there is a video of him referring to the fact that deliveries containing some split leather were not in accordance with his order.

505 However, reading the plaintiff’s evidence on this issue as a whole, it is apparent that she was of the belief that split leather was simply ‘the cheapest quality’ of leather, to be used as an alternative to superior grades of leather such as full grain, sanded or buffed leather. I accept the defendant’s evidence that this is not the use of split leather at all. Indeed, although counsel for the plaintiff initially put it to the defendant that split leather was ‘an inferior sort of leather, not as durable as full grain leather’, he then put that split leather is ‘not so flexible as full grain leather’ and is accordingly unsuitable for use on movable parts of furniture, such as the seat. Reading the cross-examination as a whole, it is plain that no challenge was made to the defendant’s evidence as to the use of split leather on non-movable parts of leather furniture only. The plaintiff did not seem to appreciate this distinction when she gave evidence. I accept the defendant’s submission that it is more likely than not that the plaintiff did not have good product knowledge in this regard, and that she had simply picked up on the reference to split leather in the video.

506 Further, I find that the plaintiff had no special knowledge of styles of leather furniture. When asked to describe the different styles of leather lounges she gave evidence which anyone who visited a furniture shop selling leather lounges could give:

507 In relation to whether the plaintiff worked in the business, as for other issues in this case, there is a chasm between the two rival versions of events. Each party called a number of witnesses to corroborate their respective versions.

508 The plaintiff called her mother, Maria, her sister, Jasenka, and Loula Gabrielidis. For the reasons stated above, I found both Maria Kalenik and Jasenka Kalenik to be generally lacking in credibility as witnesses. Their evidence needs to be approached with extreme caution. For the reasons appearing below, I found Loula Gabrielidis to be a witness of virtually no credibility at all.

509 Maria Kalenik gave evidence that she visited the Atherton Road shop, and for a short while after it opened the Dandenong shop, about once a week in company with her friend, Con, while he was delivering furniture. She said that she observed the plaintiff working in the shop on each occasion that she attended. At the Atherton Road shop, she said she observed that:

511 I do not accept the evidence of Maria Kalenik in this regard. For the reasons already stated, she was an unsatisfactory witness. Further, her evidence on this issue was formulaic. It appeared to have been scripted. For example, Maria Kalenik described the plaintiff’s role of bringing fresh flowers to the shops and arranging them as ‘decorating’. That is the exact same term used by Loula Gabrielidis. It is unlikely that two people would have a similar description for buying and arranging flowers, unless they had been coached to say so.

512 Jasenka Kalenik gave limited evidence concerning the plaintiff’s role in the business. She said that she would ring the plaintiff at the shop and that the defendant would tell her that the plaintiff was with a customer or doing the banking. She was an unsatisfactory witness and I do not accept her evidence in this regard.

513 Loula Gabrielidis said that she regularly visited her son-in-law, Ken Apostolidis, at the Atherton Road shop, the Dandenong shop and the Forest Hill shop. She said that she observed the plaintiff working in the business on these occasions. Her evidence followed the script. Although she gave evidence with the assistance of an interpreter, she interrupted the interpreter during one answer and said she observed the plaintiff ‘[bring] coffee, bring the lunch, make decoration and things like that in the shop.’ Later, speaking of her observations of Zorica at the Dandenong shop, she said that ‘all the times she do something, or cleaning or this, talking, help, decoration.’ In common with Maria Kalenik, she described ‘decoration’ as ‘do the flower arrangements’. She gave similar evidence of her observations at the Forest Hill shop. She said that she saw the plaintiff ‘talk with the customers, and usually what she can do to the Atherton Road, decoration and things like that’.[44] On this occasion, she said that ‘decoration’ meant ‘She knew how to arrange it. She would put down carpets, rugs. To look better.’

514 Loula Gabrielidis was a most unsatisfactory witness for a number of reasons. Throughout her evidence she was desperate to volunteer evidence which she perceived, and which I infer she was told, would assist the plaintiff’s case. To a certain extent, she was able to engage in this practice because she was giving evidence through an interpreter. However, I am in no doubt she understood that she was giving non-responsive answers to questions.

515 If Ms Gabrielidis is to be believed, she was present on many occasions and able to give evidence of direct observation of the plaintiff working in the business. However, there is no evidence to corroborate her presence at the shops and I reject her evidence that she attended them frequently. I find that her evidence was based upon hearsay, not direct observation. She was an argumentative, non-responsive witness who, although she sought to deny it in cross-examination, bore an obvious hatred for the defendant. By contrast, she described the plaintiff as ‘the best girl in the world ... she’s my second daughter’.

516 Loula Gabrielidis had reasons for lying. She lent money to her son-in-law, Ken Apostolidis, to invest in the Atherton Road business. That money has not been repaid. She advanced Ken Apostolidis a further $30,000. Ken gave that money to the plaintiff for legal costs. That money has also not been repaid. When asked what she expected to receive from the proceeds of any judgment recovered by the plaintiff against the defendant, she responded ‘only my money’.

517 Further, Ms Gabrielidis gave evidence, usually in non-responsive answers, about things which she could not have observed directly. For example, she said that after Zoe Apostolidis left the defendant, the defendant went around to her home ‘banging on the doors’. This could only be hearsay.

518 Loula Gabrielidis also gave inconsistent evidence on some issues. For example, she said that although it was not a celebration or engagement party, there was an occasion shortly after the engagement of the plaintiff and the defendant when the entire family went out for dinner. Later she changed that to lunch. When the inconsistency was pointed out she returned to her former evidence that it was dinner. No other witnesses gave evidence of such an occasion.

519 The defendant called a large number of witnesses to corroborate his version of events on this issue. Nearly all of them had a motive to lie. Most had existing or past financial dealings with the defendant and some owed him a debt of gratitude for these. Some were friends, some family members. Others had so little opportunity to observe the extent of the plaintiff’s work activities, or had such poor memories, that no weight can be attached to their evidence. There is one witness, the accountant Hugh Stevens, who stands apart. His evidence was honestly given. However, it does not wholly support the defendant’s version of events, and provides some limited support for the plaintiff’s version.

521 Excepting Mr Stevens, the following witnesses for the defendant gave evidence to the general effect that the plaintiff did not work in the business, either at all or in any meaningful way. Their evidence is comprised of their recollections as to observations made many years ago. They were not asked to turn their minds to these matters until late 2007 or early 2008. This alone places significant doubt upon the reliability of their evidence. Further, for the reasons stated below, I place no significant weight on their evidence on this issue on other grounds:

(1) Ramos Zenelli. Mr Zenelli sold mattresses to the defendant at the Atherton Road shop and subsequently at the Dandenong shop. In the period 1992 to some time in 1994 or 1995, he said that he visited the defendant once or twice a week, and thereafter about once a week or once a fortnight. He seemed an honest enough witness. However, he said that he made quick deliveries through the back door of the Atherton Road premises, delivered mattresses to a separate storage area at the Dandenong Road shop, and could not even remember seeing Ken Apostolidis at the Dandenong shop (which must be wrong if he had any reasonable opportunity to observe those present). He said ‘Look, this is a long time. No remember everything. This is 20 years now.’ He obviously had a poor memory of events and I place no weight on his evidence.

(2) Tina Shen. Ms Shen also sold mattresses to the defendant. She supplied him with mattresses in the period between 1993 and 31 March 1999 when the Forest Hill shop closed. She said that she attended the Atherton Road shop and the Dandenong shop every second or third week until Forest Hill was opened in 1996. She then visited Forest Hill with this same regularity. On her evidence, she had a reasonable opportunity to observe whether the plaintiff was present and, if so and she was interested, to see what tasks she was performing. However, it is obvious that she feels a debt of gratitude to the defendant because he was an early customer who assisted her to establish her business. She is also a friend who dines with him annually at the time of furniture shows. Further, she said that she ceased supplying mattresses to the defendant in about 2000. However, for no apparent reason, the defendant resumed ordering substantial quantities of mattresses from her in or about early 2008, just prior to her attending at the defendant’s solicitors for the purposes of giving instructions for an outline of evidence. She is a compromised witness upon whom I place no reliance.

(3) Trevor Long. Mr Long has an extensive history of dealings with the defendant. He initially worked for a furniture supplier, delivering furniture to the Atherton Road shop and then the Dandenong shop. His opportunity to observe the plaintiff at the Atherton Road shop was very limited, as he double-parked his truck in the street while making deliveries. He was present at the Dandenong shop for longer periods, but was occupied moving furniture during the whole of the time he was present. Between 1996 and 2000, he worked as a salesman for the defendant, primarily at the Forest Hill shop, but also worked approximately one day a week at the Dandenong shop. In September 2005 he resumed full-time employment with the defendant and has worked for him ever since. He relies upon the defendant for continued full-time employment. He gave his evidence in an arrogant fashion and had obviously discussed his evidence with the defendant and other work colleagues. I place no reliance upon his evidence.

(4) Lazarus Papa. Mr Papa worked for the defendant from 1996 at the Forest Hill shop until it closed in March 1999 and then at the Dandenong shop from that time until 2002. While he was working at the Dandenong shop, he had little opportunity to observe the plaintiff who was by then undertaking her beautician’s course and subsequently separated from the defendant. He was not initially on the defendant’s witness list and no outline of evidence was served for him until a month or so after the trial commenced. He gave evidence that he telephoned the defendant about possible work early this year. Notwithstanding that the defendant told him that business was ‘very quiet’ the defendant re-employed him for four days a week from 28 February 2009. His outline of evidence was filed soon after. He has a reason to be in the defendant’s debt, and continues to rely upon him for employment. Further, reading his evidence as a whole, it is clear that he did not pay much attention to the plaintiff when he observed her at the shops. I also found him to be an evasive witness, and I place no weight on his evidence.

(5) Paul Bongiorno. Mr Bongiorno’s evidence is of no weight. At its highest, he had a limited opportunity to observe the plaintiff at the Atherton Road shop prior to October 1993. However, he was then aged 20, studying full-time and only working at the Atherton Road shop a couple of nights a week from late in the afternoon and sometimes on weekends. Further, his relationship with the defendant has recently altered. He said that he saw the defendant very irregularly from the time he ceased working for him in October 1993 until about March 2008 when he was contacted by him to give evidence. Since that time, and as recently as during the first month of this trial, he has socialised with the defendant about once every three months.

(6) Jim Michaels. Mr Michaels was the contractor who installed electric signage at the Dandenong Road shop. He had a very limited opportunity to observe the plaintiff. He said that he sometimes went inside the shop and spoke with the defendant. Further, there is doubt as to the duration of his presence at the Dandenong Road shop. The first sign was erected over a period of no more than two weeks. He agreed that he was trying to get the sign up as quickly as he could, because he had scaffolding on site, which was presumably costing him money. The second sign was erected over ‘quite a few months’, although there is no suggestion that he was present at the Dandenong Road shop for the whole of this period. He was obviously back and forth between jobs over this period. His evidence carries no weight.

(7) Ross Chambers. Mr Chambers had very limited opportunity to observe the plaintiff working in the business. He did not commence working at the Dandenong Shop until August or September 1999, when the plaintiff was attending her beautician’s course. His only opportunity to observe the plaintiff would have been on weekends, when the plaintiff says she was working in the shop as she had no studies. Further, Mr Chambers has a poor recollection of other events occurring at this time. For example, he could not recall that the defendant went overseas at about the time he started working for him. Further, he said that 1999 was a very stressful time in his personal life for reasons which he gave. Mr Chambers appeared an honest witness, however his mind was on other things during 1999, he had limited opportunity to observe the plaintiff and no weight can be given to his evidence.

(8) Zoran Milosovich. Mr Milosovich is a friend of the defendant. He worked for him as a shop manager between October 1997 and 2004. He spent approximately two-thirds of his time at the Dandenong shop and the remainder at the Forest Hill shop while it was operating. Reading his evidence as a whole, it is obvious that he had discussed the issues in the case with the defendant and his work colleagues. He acknowledged speaking with the defendant and Mr Long about the case. In this context, he volunteered information which was non-responsive to questions and sought to minimise the relationship between the plaintiff and the defendant at every opportunity. Further, he obviously knew that there was an issue concerning the accuracy of the diaries contained in the 55 books. He sought to emphasise mistakes and inaccuracies in the diaries and the importance of the duplicate invoices as the more reliable accounting record. I found him a most unsatisfactory witness. His demeanour showed that he was extremely nervous when asked anything about the plaintiff or the diaries. He was flushed, uncomfortable and sometimes shaking. He often bit his lip. I place no weight on his evidence.

(9) Nigel Jupi. Mr Jupi was a previous employer of the defendant and has been his friend for many years. He had an extremely limited opportunity to observe the plaintiff at the defendant’s business premises. He admitted that he knew that the defendant wanted him to give evidence minimising the extent of his relationship with the plaintiff. Further, his evidence concerning the defendant’s alleged relationship with a woman called Natalie Brown was simply wrong. In his evidence in chief, he said that the defendant had a girlfriend called Natalie before he had a relationship with Meghan Courtney. Following the luncheon adjournment and during the course of cross-examination, he gave the opposite evidence; saying that Natalie Brown was a subsequent girlfriend to Meghan Courtney. I find that it is likely he spoke with the defendant over the luncheon adjournment. I place no weight on Mr Jupi’s evidence.

(10) Michael Stamatopoulos. Mr Stamatopoulos is the son of the owner of the Patra Furniture business. Patra was a major supplier of the defendant in the period 1990 to 2000. Mr Stamatopoulos said that he visited the Atherton Road and Dandenong shops once or twice a month for about 20 minutes to half an hour but that the frequency of his visits declined over time. He was an unsatisfactory witness. Although there was no mention of it in his outline, he said that he had seen the defendant with Kay Corbett in late 1993 and with Natalie Brown during 1999. Notwithstanding his limited opportunity to observe the plaintiff, he was prepared to deny that she had any involvement in the business. Finally, he has a motive to support the defendant’s version of events. The defendant provided the Patra business with substantial orders until Patra folded in 2000. He then became unemployed until he commenced working for the defendant in 2004. He was struggling financially and living with his parents. Then, in 2005, he commenced operating his own furniture business. Reading his cross-examination as a whole, I infer that he received some assistance from the defendant to open that business. For example, he purchased his initial stock of 15 lounges from the defendant. In these circumstances, little weight can be placed on his evidence.

(11) George Mantzis. Mr Mantzis is the owner of a substantial furniture manufacturing business. His company ceased dealing with the defendant during 1998. For no apparent reason, the defendant commenced placing substantial orders with his company in July 2008. Records produced from his company show $1.2 million of sales to the defendant in the nine month period to March 2009. Although he had very little opportunity to observe the plaintiff at the defendant’s business premises he readily made denials about her involvement in the business. I place no weight on his evidence.

(12) Meghan Courtney. Ms Courtney said that the plaintiff was not present when she attended at the defendant’s business premises. My reasons for rejecting her as a truthful witness appear elsewhere in these reasons.

(13) Rudi Germijns. Mr Germijns is a close friend of the defendant. They have known each other since childhood in Belgium. He still resides in Belgium. He has travelled to Australia for the purposes of this case on a number of occasions. He sought to minimise the extent of any involvement which the plaintiff could have had in the defendant’s business by portraying her as an idle woman who did not work. He was a most unsatisfactory witness. In particular, it was clear that he had discussed his evidence with the defendant, with whom he has stayed on the occasions he has come to Australia for the purposes of this case. When he was asked about the defendant’s business, and in particular as to whether he ever discussed the sale of leather lounge suites in Belgium with him, he denied any knowledge of the defendant’s business and exploded with the following remarkable evidence:

I found this evidence wholly unbelievable. The closeness of his relationship with the defendant is such that he must have discussed business matters with him. He said that he visited the defendant at his business premises on numerous occasions while he was in Australia. His explosion, which was not in response to any particular question, obviously relates to knowledge by him that the plaintiff has alleged that he has been receiving commissions from the defendant in respect of furniture sales in Belgium. He was a witness of no credibility and I reject all of his evidence.

522 There remains for consideration the evidence of the defendant’s accountant, Hugh Stevens. Mr Stevens presented as a careful and conservative man. He no longer has any business dealings with the defendant. He said that he visited the defendant at his business premises on a quarterly basis, for between half and one hour at most. On the 28 occasions that he visited the defendant’s business premises during the course of the defendant’s seven year relationship with the plaintiff, he said that he saw the plaintiff between 6 and 12 times. He said that he could not recall if she was working in the business and, reading his evidence as a whole, it is clear that he did not observe her sufficiently to form a conclusion about this. He said that she made him coffee on occasion, at the defendant’s request, and that he spoke with her on a social basis and not about the business. I accept Mr Stevens’ evidence. He did not appear to feel under any debt of gratitude to the defendant event though the defendant had provided him with business over many years. Indeed, as his cross-examination progressed and he came to understand the amount of cash taken out of the business by the defendant, particularly in respect of his gambling, he appeared to lose respect for the defendant and became even more forthcoming in his evidence about material issues.

523 The evidence of Mr Stevens supports a finding that the plaintiff was present at the defendant’s business premises with some regularity. On his quarterly visits, he saw her on about one-third of the occasions. This evidence is in contrast to the evidence of the other witnesses called on behalf of the defendant to corroborate his version of events, that the plaintiff was rarely or never present at the business premises. However, the evidence of Mr Stevens is directly contradictory to the plaintiff’s evidence that she was working full-time in the business from May 1993 until early 1999. Further, I accept the evidence of Mr Stevens that the plaintiff only delivered books and records of the business to him on one isolated occasion. Once again, the plaintiff has exaggerated the extent of her involvement in a business task. Mr Stevens also denied other evidence given by the plaintiff about conversations with him. I accept his denial.

524 The plaintiff also relies upon video and photographic evidence of her at the Dandenong Road shop. I have reviewed all of that evidence. It carries little weight. It is consistent with the evidence given by and on behalf of both plaintiff and defendant. For example:

(1) There is a video clip of the plaintiff picking up something from the defendant’s desk in the Atherton Road shop. The plaintiff alleges that this depicts her collecting a bundle of cash and cheques to be banked by her. The defendant contends that the plaintiff is seen picking up a folded magazine and then walking off. I think the defendant’s submission is more likely to be correct but nothing turns on it. The defendant concedes that the plaintiff may have done the banking on odd occasions. If such an occasion was caught on the video then this would be consistent with both versions.

(2) There is video evidence of the plaintiff vacuuming the floor during the course of the Dandenong shop being set up prior to opening. There is no dispute that this took place.

(3) There is a video taken in July 1994 which depicts the plaintiff speaking with a customer. After a short while, the plaintiff is joined by a male staff member, possibly Anestis, and she then walks towards a desk with the customer and that staff member. Once again, this video image is consistent with both versions of events. It was the plaintiff’s own evidence that she was not able to complete any of the paperwork, as the defendant insisted that all paperwork would be completed by male employees. The defendant acknowledges that the plaintiff was present at the Dandenong shop on occasion and that she would talk to customers.

(4) There is a video taken on 31 May 1995 depicting the arrival and unpacking of the second container of imported leather lounge suites from Malaysia. The plaintiff, the defendant and Ken are shown sitting on a leather chair in turn and bouncing on it, as if testing it for comfort or strength or both. This is also consistent with both versions of events. The plaintiff was living with the defendant at this time. The arrival of a container from overseas was a significant event, which was early in the importing arrangements. That the plaintiff was present and sat on some of the furniture once unpacked is an entirely neutral fact.

(5) There is a video on 1 June 1995 depicting the plaintiff at the Dandenong shop with the defendant’s sisters and some children. This is another neutral fact.

(6) There is some video footage of floral displays in the Dandenong Road shop. There is no dispute that there were occasions on which the plaintiff brought fresh flowers to that shop. Further, the defendant says that artificial flowers were often used. The video footage is insufficiently precise to tell whether the flowers are artificial or fresh.

525 In reaching conclusions on this issue, the plaintiff’s answers to interrogatories are significant. She was asked to provide the usual particulars of all financial and non-financial contributions made by her to the acquisition, conservation and improvement of the furniture business. She gave the following answer:

526 The truth of this answer was verified by the plaintiff on oath in early 2002, at a time when the facts would have been clearer in her mind. This was before she had become injured in any car accidents and taken any of the resulting medications which she contends affected her memory for a period of time. As appears above, I reject her attempt to distance herself from her answers to interrogatories on the grounds that they were negligently prepared by her lawyers and that she either did not swear to the truth of them on the bible or that she was misled into swearing them. The answer is inconsistent with the plaintiff’s allegation that she worked for seven days a week initially and then five days a week until the commencement of her beautician’s course. It is much more likely to be close to the truth than her oral evidence before me and I so find.

527 Further, the plaintiff did not say in her answer that she was engaged in selling furniture to customers. The answer says attending to customers.

528 The plaintiff also placed some reliance on a letter signed by Steve Yong on Imex letterhead stating that the plaintiff was employed by Imex. The plaintiff misleadingly used this letter in connection with a finance application to the Commonwealth Bank in respect of the purchase of a property in her name, for her mother to live in. Mr Yong was not called to give evidence. No weight should be attached to this letter. The defendant denied knowledge of it and I accept that denial as according with the probabilities. In any event, it was false. The plaintiff was never employed by Imex or DSK.

529 Taking the evidence as a whole, and having regard to my credit findings above, I find as follows. The plaintiff attended the business premises frequently on an ad hoc basis, whenever requested by the defendant or at her own volition. Her attendance was for two or three days a week on average. She did not attend the business premises on a regular daily basis for five or seven days a week as she said in evidence. When she was there, she made herself useful by performing whatever tasks were requested by the defendant or which she became accustomed to performing. It is likely that these tasks included cleaning to varying degrees (including cleaning toilets when necessary), running errands as requested, buying or making coffee, lunches and snacks for the defendant and his staff, bringing in fresh flowers on some occasions and greeting customers to put them at ease.

530 However, I do not accept that the plaintiff was involved in concluding sales. I reject as implausible her evidence that she was allowed to make sales but not allowed to write up any business records because she was female. The absence of her handwriting on any business record of the defendant’s business is powerful evidence that she did not conclude any sales as she says she did.

531 I find that the plaintiff also assisted the defendant in hosting overseas business associates from time to time, as she deposed in her answers to interrogatories. Further, although I do not think that she played any significant role, I find that the plaintiff would accompany the defendant when he was visiting furniture suppliers and would discuss with him the choice of appropriate furniture colours, fabrics and the like. This is a natural thing for her, as the defendant’s partner and a person who assisted in the business, to do.

532 The contributions made by the plaintiff as discussed above were not, as the defendant contends, wholly insignificant. When she was present at the business premises, she performed a useful role and the defendant took the benefit of that. Apart from paying their joint living expenses, the defendant provided no compensation to the plaintiff for these contributions.

533 The plaintiff contended that her contributions to the business went beyond financial contributions and working in the business. She said that she participated in the making of significant business decisions, as a result of which the business flourished. In this connection, the plaintiff said she also accompanied the defendant on business trips to Malaysia, where significant decisions were made as to the future conduct of the business.

534 The plaintiff acknowledged that her contribution to the business did not involve her making any financial decisions as to prices, margins and other financial matters. All of this was done by the defendant. Notwithstanding this, the plaintiff endeavoured to portray herself as fully involved in many aspects of the business and as an equal partner with the defendant.

535 She said that she and the defendant jointly decided on ‘styles and colours and fabrics in bed at night’ throughout the relationship because they wanted to succeed in building ‘a successful business together’. The plaintiff said that these discussions were in accordance with their overall business strategy of building up the business, and referred to the compass symbol on the business card which she said the defendant had prepared for her:

536 The plaintiff said that the decision to import higher quality furniture was made in the course of discussion between the defendant, herself, Steve Yong and, to a lesser extent, Ken Apostolidis. She said that this decision made an extreme difference to the business because ‘We went from very, very small margins to extremely large margins in quite a short period of time.’ The plaintiff sought to claim credit for this rapid growth in the business, on the basis that it was her idea for the defendant to cease selling locally-made furniture and to commence importing ‘more prestigious overseas-manufactured and imported furniture’. She said that the defendant ‘took a little bit of convincing’, and gave the following evidence:

537 The plaintiff also sought to portray herself as being fully involved in the setting up of Dalcy and Imex, and the businesses conducted by them. However, she was unable to give evidence to support this. The best that she could do was to recall visiting Malaysia in 1996 on two occasions with the defendant and Steve Yong. She recalled that she met ‘Michael and Steve, Steve being another Steve (than Steve Yong)’ while in Malaysia but was only introduced to them on a first name basis and never knew their surnames at that time. She said that she recalled that Michael ended up having a partnership in Dalcy but that ‘the other Steve’ did not, or does not, continue to have an interest. She said that while in Malaysia she visited furniture factories, furniture retailers, looked at styles of different types of furniture and different qualities of leather and that it was ‘a business trip’.

538 The defendant denied that the plaintiff accompanied him on any business trips. He said the two occasions on which the plaintiff accompanied him overseas were on holiday to Penang and to Kuala Lumpur. On the latter trip, his sister Anna-Maria also attended. It was Christmas 1996 and business was closed in Kuala Lumpur. Accordingly, although he met some business colleagues during the trip, he denied that the plaintiff did so and denied that she visited any factories in Kuala Lumpur because there were no factories operating at that time. Although I accept that the plaintiff may have attended business meetings in Malaysia with the defendant on occasions, I do not accept that she played any meaningful part in the business discussions.

539 The plaintiff was asked in cross-examination as to her knowledge of the shareholding structure of Dalcy. She was reminded at this time that Dalcy was the manufacturer of furniture in Malaysia and Imex was the local import company. The plaintiff gave an answer which indicated that she thought that the shareholders in Dalcy were the defendant as to 55 per cent and Steve Yong as to 45 per cent. That answer was wrong. That is the shareholding structure in Imex, the importing company. The plaintiff was given another opportunity to correct her evidence but again gave the wrong answer. This is one of the many occasions when it was apparent that the plaintiff had informed herself about relevant details from reading documents obtained on discovery, learned a ‘script’ and been unable to recall that script accurately. I find that she had no involvement in the setting up of Dalcy or Imex.

540 The plaintiff was asked questions in examination in chief about her current physical condition arising from injuries suffered by her in two motor vehicle accidents in May 2002 and January 2006. The plaintiff said that she has been unable to work since the first motor vehicle accident in May 2002. The plaintiff was then asked:

541 When asked as to the relevance of this evidence, the following exchange occurred between senior counsel for the plaintiff and the Court:

542 I do not accept that the plaintiff participated in any meaningful way in the making of significant business decisions concerning the defendant’s business. Having observed the parties in Court over the course of nearly three months, both as witnesses for many days and as litigants in Court, I have reached a firm view that the plaintiff is unlikely to have had the intellectual or business capacity, experience or understanding to have had any meaningful input into significant commercial decisions concerning the direction of the defendant’s business. She is and was a woman of limited education and intelligence. She had limited experience as a retail sales person. Nothing more and nothing less. There were many occasions during her evidence where her lack of any business understanding or acumen was apparent.

543 On the other hand, the defendant presented as an intelligent but obsessive businessman, who had learned his business from humble beginnings as a salesman of cut-price furniture. He may have been assisted in the decision to change the direction of his business by discussions with Steve Yong or his brother Ken, but that is of no assistance to the plaintiff on this issue. Taking the evidence and my observation of the parties as a whole, it is extremely improbable that the plaintiff provided any meaningful intellectual input into the rapid growth of the defendant’s business during the period of their cohabitation. I find that she did not.

544 The plaintiff gave elaborate (and probably exaggerated) evidence about the extensive searches made by her, at the direction of the defendant, to locate the Yarrabee Court home. The defendant denied this evidence and said that he was the sole person responsible for locating that home for purchase.

545 The plaintiff said that she had substantial input into the renovation of the Yarrabee Court home once purchased. She said that she chose all of the fittings and fixtures installed during the renovations, dealt with retailers in that regard, chose curtain fabrics and paint colours and supervised the renovations generally. She also gave evidence of contributions by her mother and sisters in making and hanging sheer curtains throughout the house and thoroughly cleaning the house after the renovations were completed. Once again, the defendant denied that this was so. He said that he was responsible for the choice of all of the fixtures and fittings, fabrics and colours, and the supervision of the renovations.

546 The plaintiff also said that she worked in the garden during the course of the renovations, doing light work such as planting some roses and other plants, sowing some grass and installing a small sprinkler system. She acknowledged that she was helped by Zoe’s parents, who did the heavy work, including moving boulders and pruning. Zoe’s parents gave evidence that they did not see Zorica during the course of the work that they did and that all of the work was done by them. However, the two versions are not necessarily inconsistent and it is not necessary to consider the issue further.

547 Considering the evidence as a whole, I find that the plaintiff has played a significant role in relation to the choice of the Yarrabee Court home and its renovation. First, the plaintiff had the available time. This is because she was admittedly responsible for the homemaker role and she was not, like the defendant, working full-time in the business. Second, at the time that the Yarrabee Court home was located, purchased and renovated, the relationship between the parties had settled over some years. As indicated elsewhere in this judgment, I do not accept the defendant’s evidence that he had no emotional attachment to the plaintiff at any time and that she was simply his ‘sexual partner and[ live in ] person’. The choice and renovation of a new home was an important event in their relationship. It is probable that the plaintiff had a very considerable input and I so find. It is not necessary to determine the precise extent of that input. The plaintiff’s contribution in this regard should be given appropriate recognition.

(11) Plaintiff’s domestic contributions as homemaker, partner, carer/step-parent

548 The plaintiff gave evidence that she performed all of the usual homemaker tasks including all shopping, cooking, cleaning, laundry and maintaining the garden. The defendant did not deny that the plaintiff did many of these things, however he said that the plaintiff had over-emphasised her role. For example, he said that the plaintiff’s evidence concerning cooking in the home was exaggerated, as they would mainly purchase take-away food or eat out at local restaurants. He said that the plaintiff cooked at home possibly once a week on average, although he conceded that there were weeks when they would eat at home more regularly during the week.

549 The defendant denied that the plaintiff cooked him meals on the nights that he attended at the casino. He said that, on these nights, he would eat at the casino, where food was free in the Mahogany Room. The defendant said that the plaintiff ceased all cooking in the home from 1999, when they were effectively separated under the one roof and had ceased having any sexual relations. The defendant agreed that, on the rare occasions that they had guests for dinner, the plaintiff would do the cooking.

550 The defendant acknowledged that the plaintiff did the shopping, cleaning and laundry during the times that she lived with him. He acknowledged that she kept a clean house. He said that he did his own laundry while she was not with him, and that otherwise the house did not get dirty because he was working or at the casino.

551 I reject the defendant’s attempts to downplay the plaintiff’s homemaker role. Although they may have eaten out on occasion, and he spent many evenings at the casino, that was the defendant’s choice. There is no dispute that the plaintiff performed the homemaker role and did so competently. For reasons given elsewhere in rejecting the defendant’s evidence that the parties were effectively separated under the one roof in 1999, I also reject the defendant’s evidence that the plaintiff’s homemaker role ceased, or was substantially diminished, during the final year of their de facto relationship.

552 The plaintiff’s contributions in this regard should be assessed on the basis that she was solely responsible for performing the homemaker role and that she did so well. This must have freed the defendant up and made it easier for him to focus upon his work commitments seven days a week. The plaintiff’s contributions in this regard were not token and require recognition.

553 The plaintiff placed great emphasis on her relationship with the defendant’s son, David. She gave evidence that she cared for him deeply, that there was a real affinity between them, that he sometimes called her ‘Mum’, that they were virtually inseparable while he was in the care of the defendant and that she performed the role of a “stepmother” to him during those times. This included attending to his physical and emotional needs and protecting him from verbal and physical assaults from his father.

554 The defendant’s case is that the plaintiff has grossly overstated her contributions relating to the care of David, and that he never assaulted his son, either verbally or physically.

555 There were particular aspects of the plaintiff’s evidence as to what she did for David which were in dispute. For example, the actions which the plaintiff said she took in connection with her obtaining medical assistance for David in respect of an allergy which was causing him bad wheezing in the evenings. The plaintiff gave detailed evidence as to what she did, and of how David’s mother, Zoe, had been unable to afford to take him to the doctor. As a result, the plaintiff said that she took David to a general practitioner and then to a specialist and the issue was resolved. The defendant said he could not recall such an incident. Nor could David. Zoe denied that this incident occurred, and said she attended to all of David’s medical needs.

556 In further support of her evidence emphasising the extent of her role as a stepmother to David, the plaintiff gave evidence of a trip taken by herself and David to Bali in December 1994. The plaintiff said that the trip was planned for herself and David alone, and that she was surprised when the defendant arrived in Bali the day after they did.

557 The defendant denied the plaintiff’s account of the Bali trip. He gave objectively credible evidence that he booked the trip at the last minute and, accordingly, had to travel later on a separate flight. It was pre-arranged that he would travel and meet the plaintiff and David in Bali. That is what happened. All of the arrangements for the airfares and accommodation were made by him. I accept the defendant’s evidence in this regard. The plaintiff’s evidence has no credible ring to it. The defendant’s evidence was supported by that of his ex-wife, Zoe. She recalls the trip and recalls giving consent for David to accompany his father and the plaintiff.

558 The defendant frankly acknowledged that he is not a ‘good father’. He said that he rarely took David to social occasions or to sporting events. He referred to the Bali trip as a special occasion. The defendant said that the result of his failings as a father were that David spent nearly all of his time with his mother. However, the defendant acknowledged that David would visit the shop on many afternoons after school and that he would stay with him, usually on weekends, about once a week.

559 In her evidence in chief, the plaintiff alleged for the first time that she had looked after David for about three months, at a time she could not recall, when Zoe was ‘getting to know Brad’, a reference to Zoe’s current partner. This significant event was not referred to in the plaintiff’s outline of evidence, and she had no explanation for why this was so. The defendant denied that there was any occasion on which David came to stay with him and the plaintiff for an extended period of about three months, either when Zoe was forming her relationship with Brad or at any other time. Zoe also denied this and I accept her evidence in preference to the plaintiff on this issue.

560 The plaintiff also alleged that there was a period of approximately one month when she and the defendant cared for David when Zoe went to Greece. Although the plaintiff could not recall it, this was in 1997. This evidence was denied by Zoe and by her parents. According to them, the grandparents looked after David initially and, when the grandmother also travelled to Greece to meet up with Zoe, the grandfather and Zoe’s sister, who resided with them, took over David’s care. I reject the plaintiff’s evidence that she and the defendant looked after David for the whole of this one month period. The evidence given by the grandparents and Zoe is more probable. However, I find that it is likely that David stayed with the plaintiff and the defendant more frequently during this period than at other times.

561 The defendant acknowledged that the plaintiff and David appeared to have a good relationship. However, he denied that he ever heard David refer to the plaintiff as ‘Mum’ or ‘Mummy’. He said that David has ‘always been Mummy’s son’ and that Zoe played that role alone.

562 Further, the defendant said that he and the plaintiff saw less of David as the years went by. He said that, as David got older, the pattern of him staying with him on weekends ‘became less frequent ... he was less interested in coming and spending time with me in the shop ... he prefers to spend time with his friends.’ The defendant thought this was from the time David was 15 or 16 years old. That would make it from 1997 or 1998 until the end of his relationship with the plaintiff. This evidence was supported by David and accords with the probabilities of the behaviour of a 15 or 16 year old boy.

563 The defendant acknowledged that there were occasions on which David spent time with him and the plaintiff, and with the plaintiff alone. He gave evidence of attending with the plaintiff and David at go-kart racing on approximately five occasions and said it was possible that the plaintiff took David go-kart racing without him. He also gave evidence of attending the movies with David and the plaintiff and acknowledged that the plaintiff would often take David to the movies on her own. He could not recall a number of other events which the plaintiff recalled attending with David, such as the Michael Jackson concert, the Royal Melbourne Show, Moomba or the Zoo.

564 David gave evidence that he had little recollection of events in his life involving the plaintiff during the period 1993 to March 2000. There is nothing surprising about this. I accept that a young boy would not recall the details of events so long ago. On the other hand, I am satisfied that David adopted a flippant approach to his evidence and had been coached, probably by the defendant, to downplay the significance of the plaintiff’s relationship with his father and with him. Unsurprisingly, like all of the defendant’s witnesses, he described the plaintiff as his father’s girlfriend. Later, he labelled her ‘my dad’s so-so girlfriend’. His evidence that the defendant did the cooking when he stayed over at his various homes was obviously false and I reject it. In general, he sought to understate the plaintiff’s involvement with him, and made concessions grudgingly about the time he spent with her and the things she did for him.

565 In these circumstances, I place little weight on the evidence given by David. Like his father, he sought to understate the plaintiff’s involvement with him. However, as appears above, I do accept that the frequency of his contact with the plaintiff, and the defendant, reduced as he grew older.

566 It is unnecessary to resolve all of the factual disputes concerning the plaintiff’s relationship with David. The evidence contains a mixture of exaggeration and understatement. However, one finding can be confidently made. The defendant was a poor father and, while David was in his custody, he cast his care principally upon the plaintiff; while he attended to his work commitments and gambling activities. I find that the plaintiff’s role in caring for David was significant in contributing to the defendant’s ability to work without fulfilling his parental responsibilities. Further, the plaintiff ensured that David had some family life by taking him to ceremonial and celebratory occasions in both the Kalenik family and the Apostolidis family. Taking the evidence as a whole and considering the probabilities, I find that David spent a significant proportion of most weekends, and some time during school holidays, with the plaintiff and the defendant. The plaintiff’s contributions in this regard should be recognised and given adequate compensation.

(12) Were the plaintiff’s domestic contributions made more arduous by violence and abuse inflicted by the defendant?

567 The plaintiff said that she was ‘beaten constantly’ by the defendant during the course of their relationship. She said that the first beating took place in ‘very early March’ 1994 in the following circumstances:

568 According to the plaintiff, following this assault, the defendant’s brother, Ken, telephoned. She gave the following evidence of their conversation, which she overheard:

569 As is apparent, the alleged beating took place while Ken and Anna Apostolidis were present at the home. As appears above, neither was called to give evidence.

570 According to the plaintiff, following the initial beating, the defendant apologised to her. Notwithstanding this apology, the plaintiff said that the defendant continued to physically and verbally assault her throughout the next six years of their relationship. She was asked how often she was physically assaulted by the defendant over that six year period and replied ‘I’ll be fair here and say once a month.’ If that evidence is correct, it follows that the plaintiff was subjected to physical violence from the defendant on approximately 72 occasions over a six year period. Notwithstanding this, there is no evidence of the plaintiff ever complaining to police or seeking or receiving medical treatment as a result of these assaults. She gave the following explanation as to why:

571 The plaintiff said that she was scared to go to either a doctor or to the police because, if she did so, the defendant had threatened to cause her physical harm or to kill her. Her explanation was in the following terms:

572 The plaintiff said that the assaults would take place as a result of a variety of factors. She sought to portray the defendant as someone who had a violent temper and would subject her to physical violence for no good reason. She gave the following examples.

573 The plaintiff recounted a physical assault by the defendant which was caused by her failure to have fresh bread to serve with dinner:

574 The plaintiff also gave an example of an assault during the night when she woke the defendant up when she went to the bathroom:

575 Further, the plaintiff also said that she was repeatedly raped and the subject of other non-consensual sexual abuse during the course of her relationship with the defendant. She gave the following evidence:

576 Once again, the defendant flatly denied the allegations of rape and other non-consensual sexual abuse. When her evidence was put to him, he responded:

577 The allegations of rape and sexual abuse did not surface until the plaintiff filed and served her outline of evidence in February 2008. They were never pleaded, nor was any form of physical violence. Further, there are some incidents, such as the shaving incident, of which no notice was given prior to the plaintiff giving evidence in chief. In respect of that incident, the plaintiff’s evidence was that she was too embarrassed to even tell her lawyers about it.

578 The plaintiff was asked ‘what sorts of things’ would provoke physical assaults upon her by the defendant. She responded that such incidents occurred when the defendant came home from work angry, when he came home from the casino very late at night angry and, at times, when he would suddenly change from being ‘extremely charming and then from that ... change into a monster.’

579 When asked if there were any specific instances which would cause the defendant to lose his temper, she could think of only one:

580 The plaintiff was asked as to why, notwithstanding the violence allegedly inflicted upon her by the defendant and his constant verbal abuse towards her, she continued to live with the defendant until she was ‘thrown out’ by him in March 2000. She gave the following evidence:

581 The plaintiff’s allegations of violence, rape and sexual abuse raise another direct clash on the evidence. The defendant denies that he ever assaulted, raped or sexually abused the plaintiff in any way whatsoever. Someone is lying. There is no possibility of mistaken recollection. This is particularly so having regard to the nature of the allegations and the alleged frequency of the defendant’s conduct. It is, of course, possible that the defendant engaged in violence, rape and/or sexual abuse with less frequency and to a lesser extent than the plaintiff alleges and that the plaintiff has exaggerated the extent of the defendant’s conduct on this issue as she has in other instances. I have considered this possibility and decided to reject it. Any allegation of such conduct requires exact proof and a high degree of satisfaction, having regard to the seriousness of the allegations. Taking the evidence as a whole, I am not prepared to find that the defendant was physically violent towards the plaintiff, raped her or sexually abused her as she alleges. My reasons are as follows.

582 First, as appears elsewhere in these reasons, the plaintiff was a most unsatisfactory witness. In the absence of credible corroboration, either by contemporaneous documents or credible testimony, I am not prepared to accept her evidence on such a serious set of allegations. I am satisfied that her hatred of the defendant is such that she is prepared to manufacture allegations against him. I accept that the defendant was also a most unsatisfactory witness and that he told deliberate untruths on a number of matters. However, on this issue, he does not bear the onus of proof and there is no objective evidence to support the plaintiff’s case.

583 Second, if there was violence, rape and sexual abuse of anything like the extent for which the plaintiff now contends, it is to be expected that these allegations would have been pleaded or particularised at an earlier stage, or at least brought to the attention of the defendant in some formal way. However, there is no evidence of this. The defendant did not seek particulars of any alleged violence, rape or sexual assaults because none were alleged against him in any of the six versions of the statement of claim. Nor did he interrogate in respect of such allegations because none were made.

584 The only reference to violence in the court documents prior to the service of outlines of evidence is the plaintiff’s answer to an interrogatory enquiring after the dates of any occasions on which the plaintiff and the defendant separated in the period May 1993 to March 2000 and the circumstances of any such separation. In answer to that interrogatory, the plaintiff swore that there was only one period of separation during the course of the relationship, of approximately three days commencing on 28 January 2000. The plaintiff’s evidence about the circumstances giving rise to this separation is quoted above. It concerns the occasion on which the defendant allegedly ‘smashed a very large glass door’ and threatened to harm the plaintiff when he got home from work that night.

585 I accept the submission made on behalf of counsel for the defendant that there are material differences between the version of events deposed to by the plaintiff, which is quoted above, and the sworn answer to the interrogatory in which the plaintiff gave a description of this event. In her sworn evidence before me, the plaintiff said that, before the defendant smashed the glass door, he punched her in the eardrum and she fell to the floor. There is no reference to this in the answer to interrogatory. In her sworn evidence before me, the plaintiff said that the glass door was smashed by the defendant prior to him threatening to harm her when he got home from work that night. In the sworn answer to interrogatory, this threat was made first and the defendant ‘then slammed a glass door on his way out, causing it to smash.’[47] Further, in answer to this interrogatory, the plaintiff took the opportunity to give a non-responsive answer that ‘the defendant had been threatening and verbally abusive to me throughout that relationship’.[48] As senior counsel for the defendant pointed out in final submissions, there was no reference to any prior assault or violent act by the defendant towards the plaintiff during the relationship. Threats and verbal abuse are not violence or assault.

586 Third, I do not accept the evidence given by the plaintiff’s mother, Maria Kalenik, her sister, Jasenka Kalenik, or Loula Gabrielidis that they observed bruising on the plaintiff which was caused by assaults by the defendant. Mrs Gabrielidis said that the plaintiff told her that she had a black eye and bruising because ‘John hit me’. Maria Kalenik said that she saw bruises on her daughter which were covered with makeup and that ‘I’m not silly to don’t know what’s going on’. Jasenka Kalenik said that the plaintiff visited her at one time with a bruised and puffy face which was covered with makeup and that, when she asked about it, the plaintiff refused to discuss it with her. I reject this evidence because of the general unsatisfactory nature of the evidence given by these witnesses. It does not provide credible corroboration.

587 In any event, if such bruising was noticed on a few occasions, it would not be sufficient to have any substantial relevance to the exercise of the Court’s discretion to take the underlying assault or assaults into account on the ground that performance of the plaintiff’s homemaker or domestic role was made more arduous by any such assault. There was no evidence from the plaintiff that this was so. Indeed, the plaintiff did not even say it was so in respect of the repetitive violence, rapes and sexual assaults which she alleges.

588 Fourth, I do not accept the submission made on behalf of the plaintiff that the defendant’s criminal record discloses that he has some ‘speciality’ in violence towards women and, in particular, dragging women about by the hair. Reliance in this regard was placed upon the evidence given by Ms Courtney as to her altercation with the defendant, during which she acknowledged that the complaints made by her against the defendant included the defendant pushing her to the ground and then pulling her up by the hair. To the contrary, the fact that this conduct of the defendant is recorded in a contemporaneous document, to which the plaintiff had access,[49] is likely to be the source of the plaintiff’s allegations, which I find are untrue, that the defendant dragged her about by the hair on one or more occasions. I accept that the defendant is, as counsel for the plaintiff submitted, an angry, violent and controlling man. I accept that he has a criminal record for violent acts. However, with the exception of this isolated incident with Ms Courtney, there is no evidence of the defendant engaging in violence against women, domestic or otherwise, before the Court. In particular, there is no evidence that the intervention orders obtained by other women against the defendant were based upon violent conduct by him towards those women. Although the plaintiff made such allegations and obtained an interim intervention order against the defendant, that interim order was discharged after a contested hearing.

589 Fifth, notwithstanding the alleged frequency of violence inflicted upon her by the defendant, there is no evidence of the plaintiff ever seeking medical treatment as a result of injuries allegedly inflicted upon her, or of her ever making a complaint to police about her allegations of violence, rape or other sexual assault. The plaintiff’s explanation for this is set out above. It is a highly improbable explanation and one which bore all the hallmarks of having been scripted. She had obviously told her mother about this. When asked why she didn’t tell the police that her daughter was being assaulted by the defendant, Maria Kalenik too readily volunteered a reference to the defendant paying police.

590 Seventh, the plaintiff gave an unbelievable explanation for continuing to live with the defendant, with a view to marrying him and having children with him, notwithstanding the alleged violent assaults, rapes, other sexual abuse and persistent assaults upon David which required her to intervene and protect him and, in turn, be further assaulted. Reading the plaintiff’s evidence on this issue as a whole, it is apparent that her professed reason for continuing to live with the defendant, and to hope for marriage and children with him, was that she felt that she had no choice in the matter. In her evidence in chief she said that the defendant ‘continuously said to me if I ever tried to leave him he would kill me or have someone else kill me.’ In cross-examination she said:

591 I do not accept this evidence. Taking the evidence as a whole, it is highly improbable that the defendant would have made such statements to the plaintiff. Whatever level of emotional attachment the defendant may have had to the plaintiff, it was not such that it would lead him to make a statement of that kind. I am satisfied that the plaintiff has manufactured this evidence in order to have a scripted response to another obvious question to be put to her in cross-examination. The plaintiff’s position is best reflected in the following exchange:

592 It was submitted on behalf of the plaintiff that her explanation for staying with the defendant should be accepted. Reliance was placed upon some comments made by Gaudron and Gummow JJ in Osland v R concerning the general characteristics of ‘battered women’.[50] Reference was also made to similar statements by academic commentators.[51] It was submitted that the plaintiff met the general description of women who suffer from ‘battered woman syndrome’ and that this bolsters the credibility of her evidence. I do not accept this submission. No psychiatric evidence was led to establish that the plaintiff suffered from any such psychological condition. If the plaintiff were otherwise a credible witness, there may be some force in the submission. However, given the view I take of the plaintiff’s credit, this submission does not need to be considered any further.

593 Eighth, I am satisfied that the plaintiff well understood that allegations of violence against the defendant would, if established, increase the amount which she may recover in this proceeding. When the issue was first raised with her in cross-examination, she said that she was seeking more than half of the defendant’s assets, including his business assets, ‘because of the way I was beaten constantly’.

594 Ninth, the plaintiff’s evidence, referred to above in these reasons, concerning the assault involving her blouse being ripped in front of David when the defendant collected her from work at Myer, is wholly unsatisfactory. The plaintiff had no explanation for not mentioning this assault in her answers to interrogatories dealing with the defendant’s request that she cease working at Myer. The plaintiff referred only to verbal abuse and anger in her answer to this interrogatory.

595 Reference to the role of Mr Nedelcu in the case has been made above. He was called as a witness for the plaintiff. His outline of evidence contained corroboration of many aspects of the plaintiff’s case, and he gave oral evidence which was generally consistent with that outline. However, for the reasons stated below, I attach no weight to his evidence. Further, my findings as to the conduct of both the plaintiff and the defendant towards him bolsters my view that neither is a witness to be believed in the absence of agreement between them, credible corroboration, consistency with objectively established facts or the probabilities arising from the evidence as a whole.

596 I have already set out the relevant facts concerning payments made, or promised, by Mr Pollett to Mr Nedelcu. As I have there concluded, the making of these payments reflects poorly on the credibility of the plaintiff’s case.

597 I turn to consider the other evidence concerning the dealings by the parties with Mr Nedelcu.

598 Mr Nedelcu is a Romanian man in his mid-50s. He has lived in Australia for the past 29 years. In the 1990s, he ran a concreting business and lived in Oakleigh. In the early 1990s, he purchased furniture from the defendant. He said that they became friends. He would call in to see the defendant at his business premises a few times each week and they would socialise. In the course of his friendship with the defendant, he came to know the plaintiff. The defendant denied that Mr Nedelcu was ever a friend, describing him simply as ‘somebody I knew’.

599 Mr Nedelcu is presently an invalid pensioner, having been injured in a motor vehicle accident about three years ago. He has an outstanding claim against the Transport Accident Commission as a result of that accident. As appears below, that claim has been resolved in part. At the time of the motor vehicle collision, he was employed as a used car salesman.

600 Mr Nedelcu presented as a fairly intelligent person who had no difficulty in understanding the English language. He did not require an interpreter. Unlike other witnesses, he was able to comprehend lengthy questions put to him in cross-examination by senior counsel for the defendant, including questions containing one or more assumptions. However, when he was confronted with previous statements made by him which were inconsistent with the evidence he wished to give, he readily resorted to disowning the prior statements on the basis that he must have been confused. In most instances, I am not satisfied that this is so.

601 I observed Mr Nedelcu closely while he gave his evidence. During his evidence in chief, he was expressionless except for eye movement directed at senior counsel for the plaintiff or to the Bench when answering. He gave his evidence in chief in a moderate tone and a direct manner. This demeanour altered significantly when he was cross-examined. He presented as a most unsatisfactory witness.

602 Further, it is obvious that Mr Nedelcu is a gambling addict. It appears that whatever money comes into his possession is quickly frittered away on poker machines and other forms of gambling. He is a person who constantly needs money for day to day living expenses as a result. In these circumstances, he is someone who is extremely vulnerable to giving evidence in accordance with the wishes of those who have supported him financially, or who he feels may do so in the future if his evidence suits their case. In this regard, it is obvious that both plaintiff and defendant have been trying to win his favour.

603 Mr Nedelcu admitted to 12 charges of obtaining financial advantage being proved against him. He received, without conviction, a community based order for these offences. The offences related to occasions when Mr Nedelcu became drunk while at gambling venues and wrote cheques totalling about $4,000 for which he knew there were insufficient funds in his account. He said that he repaid all of the amounts within about six weeks, as he was then working. On its own, this would not be enough to reject Mr Nedelcu as a credible witness. However, in all the circumstances, it is a contributing factor to my conclusion that he is an unreliable witness who has, at times, told deliberate untruths.

604 Mr Nedelcu was subjected to intense cross-examination. During the course of that cross-examination, he gave some most unsatisfactory answers which, as appears below, I find were untruthful. He started sweating, sighing and rubbing his brow, flicking nervously through the documents placed before him, and taking a long time to answer questions which I am satisfied he well understood but was reluctant to answer. In these circumstances, Mr Nedelcu asked for a break to compose himself. The following exchange occurred:

605 As Mr Nedelcu did not appear to be in any extreme difficulty, I acceded to a request by senior counsel for the defendant to ask him a few more questions before the break was taken. Mr Nedelcu appeared to have no difficulty in understanding or answering those questions. He was then given a 15 minute break. However, he did not return to give evidence on that day. Following the short break, the Court was informed that Mr Nedelcu was unwell and that an ambulance had been called for. At the commencement of the next day’s hearing, the Court was informed by senior counsel for the plaintiff that he had been released from hospital and had been advised to rest that day. Senior counsel stated:

606 Mr Nedelcu did not attend on the following Monday as anticipated. He was again unwell. He returned to the witness box some days later and his cross-examination was completed.

607 During the course of the relationship between the plaintiff and the defendant, Mr Nedelcu was more a friend of the defendant’s than of the plaintiff. However, following the plaintiff commencing this proceeding and commencing her relationship with Mr Pollett, she and Mr Pollett befriended Mr Nedelcu and they became close friends. For example, the plaintiff and Mr Pollett recognised Mr Nedelcu’s birthday and celebrated Christmas Day with him on one occasion.

608 On the other hand, apart from running into him at the casino on a few occasions, the defendant ceased to have any connection with Mr Nedelcu for many years following the termination of his relationship with the plaintiff.

609 This proceeding was listed for hearing in April 2008. In anticipation of that trial, which did not then proceed, directions were made for the exchange of outlines of evidence. When the plaintiff’s outlines of evidence were served upon the defendant’s solicitors, they included an outline of the proposed evidence, favourable to the plaintiff’s case, to be given by Mr Nedelcu. The outline was dated 14 February 2008 and served soon after.

610 In his evidence in chief, Mr Nedelcu said that the contents of this outline of evidence were true and correct. However, later in February 2008 Mr Nedelcu made a handwritten statement, and then swore an affidavit, in which he substantially recanted the proposed evidence set out in his outline.

611 Mr Nedelcu sought to explain the recanting statement and affidavit by extraordinary evidence. He said that they were procured after the defendant arrived at his home without prior notice, showed him a handgun in his belt and then drove him to his solicitor’s office. Mr Nedelcu said he made the statement and swore the affidavit because he feared the defendant would kill him if he did not.

612 Mr Nedelcu’s handwritten statement was prepared for him by a solicitor introduced to him by the solicitor acting for the defendant, David Tonkin. Mr Tonkin also gave evidence, as did the solicitor who prepared the statement, Timothy Davies of the firm Oakley, Thompson & Co.

613 In his evidence in chief, Mr Nedelcu was asked how the handwritten statement came to be prepared and signed by him. He gave a rolled-up answer:

614 Following this general answer, Mr Nedelcu was asked a number of specific questions, in which it became apparent that this event took place shortly before he attended at the Royal Melbourne Hospital for a gall bladder operation. He said that the defendant made no prior contact with him and:

615 There were then some leading questions about the gun. Mr Nedelcu said the gun was a black, flat magnum gun which the defendant had ‘in his belt line’ on the left side. At this stage, the following exchange occurred:

616 Upon arrival at the solicitor’s office, Mr Nedelcu said that he was introduced to Mr Tonkin by the defendant. Mr Tonkin then introduced Mr Nedelcu to Mr Davies, although Mr Nedelcu could not remember Mr Davies’ name. Mr Nedelcu said that the defendant showed Mr Nedelcu’s licence to Mr Tonkin and said ‘this is Bill Nedelcu’.

617 Mr Nedelcu said that it was the defendant who then took him into another room where he met Mr Davies. The defendant then left Mr Davies and Mr Nedelcu together. At this time, Mr Davies already had a copy of Mr Nedelcu’s outline of proposed evidence. Mr Nedelcu then recounted how the handwritten statement came to be prepared:

618 Mr Nedelcu was asked why he was prepared to go to the defendant’s house and responded that the defendant told him ‘You have to come with me. From now on you do whatever I tell you to do.’ Mr Nedelcu said that he was not told how long he would have to stay at the defendant’s home.

619 Four days later, on 29 February 2008, Mr Nedelcu again attended at the offices of Oakley, Thompson & Co. At this time, he swore an affidavit in virtually identical terms to the handwritten statement. However, there is one substantial difference between the handwritten statement and the sworn affidavit. In paragraph 6 of the affidavit, Mr Nedelcu deposed:

620 The final sentence of this paragraph was not included in the handwritten statement.

621 The impression created by Mr Nedelcu’s evidence in chief was that Mr Nedelcu had been forced to stay with the defendant in the period between signing the handwritten statement and swearing his recanting affidavit. This was revealed as a false position. In cross-examination, Mr Nedelcu accepted that the defendant drove him home at about 1:00 am on the morning following the signing of the handwritten statement, and that he remained in his own home until the defendant collected him four days later on 29 February and drove him to the offices of Oakley, Thompson & Co. Further, Mr Nedelcu acknowledged that, after he swore the affidavit, the defendant drove him home where he remained until he went into hospital on 4 March 2008.

622 Mr Nedelcu said that his conversations with the defendant on the day he swore his recanting affidavit were to the following effect:

623 Following his hospitalisation, Mr Nedelcu said that he took a taxi home and remained in his own home for between seven and 10 days. He said that the defendant then came and took him to his home and said to him ‘From now on until the trial you stay with me.’ From this time, until some weeks after the April 2008 trial date was vacated, Mr Nedelcu said that he was forced to stay with the defendant. He said that the defendant then drove him home. This was sometime in May 2008.

624 During the period that he was at the defendant’s house, Mr Nedelcu spoke on the telephone with the plaintiff and Mr Pollett. He said that the defendant forced him to make these calls and to tape them. He said that the defendant instructed him to ask the plaintiff ‘how much money they are going to give me if they be the winners’. The tape recordings were played to the Court. In one of them, the plaintiff is obviously feigning surprise in response to a request by Mr Nedelcu as to ‘How much is for me when you going to get money?’ Her response, ‘What are you talking about Bill?’, was obviously not genuine. Both participants knew or suspected that the conversation was being taped and there was playacting throughout.

625 Further, Mr Nedelcu said that the defendant asked him to arrange a meeting at Mr Nedelcu’s home with Brian and Zorica ‘to tape them’ and set up a recording device for this purpose. However, neither the plaintiff nor Mr Pollett accepted the invitation to attend. By this time, it was clear that they were suspicious of Mr Nedelcu’s motives.

626 On 1 December 2008 Mr Nedelcu attended at the offices of the plaintiff’s solicitors and took part in a recorded interview. The recording was transcribed. In the interview, Mr Nedelcu was asked about his allegations that the defendant had abducted him in February 2008.

627 In his evidence in chief, Mr Nedelcu said that he lived at home after the 2008 trial date was vacated until 15 December 2008, when he left for Western Australia and stayed there until about two weeks before he gave his evidence. Mr Nedelcu said that he travelled to Western Australia at this time because, with the trial date fixed for early February this year, he feared the defendant and said ‘I’ve been on the run since 15 December.’

628 During the course of his evidence in chief, Mr Nedelcu made no reference to having any contact with the defendant in the period after his alleged abduction had ceased, in May 2008, until the time he gave evidence. In cross-examination, it was revealed that there was significant contact. Nor did Mr Nedelcu give any evidence in chief about the contact which he had with the plaintiff and Mr Pollett during this period.

629 The defendant produced a number of documents belonging to Mr Nedelcu. First, there was a statement for his bank account covering the period 19 July 2008 to 16 January 2009. Second, a birthday card from the plaintiff and Mr Pollett to Mr Nedelcu in respect of his birthday in June 2007. Third, a Christmas card from the plaintiff and Mr Pollett for Christmas 2007. Fourth, various photographs depicting the plaintiff and Mr Pollett celebrating Christmas with Mr Nedelcu in 2006, another celebratory function and other photographs. Mr Nedelcu denied that any of these documents were in the defendant’s possession with his authority. He said that the defendant had taken the keys to his home when the defendant abducted him.

630 Further, at the time the trial commenced, the defendant had possession of two pre-paid mobile phones owned by Mr Nedelcu. Each of those phones required credit to be purchased so as to make the phone operative. Mr Nedelcu said that the defendant took these mobile phones from him, without his permission, in or about September 2008. In his evidence in chief, Mr Nedelcu gave no explanation for the circumstances in which these mobile phones were taken by the defendant. In the course of his evidence on this topic, Mr Nedelcu volunteered that ‘the silver one never been used’. Mr Nedelcu said that the other phone was used to speak with the plaintiff and Mr Pollett to record his conversations with them.

631 In his evidence in chief, Mr Nedelcu denied that he was paid money by Mr Pollett in return for giving evidence in support of the plaintiff’s case. When he was asked to explain ‘how much and when and for what’ Mr Pollett paid him money, he gave the following evidence:

632 Mr Nedelcu said that he gave his bank details to Mr Pollett to enable him to make payments directly into his account when he required money. His bank statement, produced by the defendant, shows that there are many occasions on which small amounts like those paid by Mr Pollett appear as credits in Mr Nedelcu’s account, followed by immediate withdrawal of those amounts, often at casinos and other gambling venues. The bank statement also shows that Mr Nedelcu received over $10,000 from the Transport Accident Commission on 24 September 2008. Mr Nedelcu said this was in respect of the pain and suffering aspect of his injury claim. Within days, the whole of that money had been dissipated. Mr Nedelcu said that he did not pay any of this money to the plaintiff or to Mr Pollett in repayment of the amounts they had advanced to him. He said that the money was paid to ‘other people’.

633 When Mr Nedelcu was cross-examined, many inconsistencies and untruths in his evidence in chief were revealed. It is unnecessary to refer to all of them. The principal matters were as follows.

634 First, Mr Nedelcu was evasive when asked to recount the circumstances in which he came to attend at the offices of the plaintiff’s solicitors on 1 December 2008 and take part in a recorded interview. Mr Nedelcu initially sought to say that his attendance at the plaintiff’s solicitors was at his own suggestion. However, following further questioning, he admitted that Mr Pollett had said words to the effect of ‘look, I think it would be a good idea if you came and spoke to our solicitor about this’. Mr Nedelcu conceded that he did not want to admit this, and that he said that the meeting took place at his own suggestion because he was trying to distance himself from the allegation that he had attended at the plaintiff’s solicitors under the influence of Mr Pollett. Mr Nedelcu acknowledged that Mr Pollett was present at the plaintiff’s solicitors when he attended for the interview, and sat waiting outside while the interview took place. Mr Nedelcu offered no explanation as to why this was necessary.

635 Second, during the course of the interview with the plaintiff’s solicitors, Mr Nedelcu gave a different account of his abduction to that which he gave in evidence. In the account given to the plaintiff’s solicitors, Mr Nedelcu inferred that he was abducted for one continuous period and held against his will for the whole of that period. That was false. Mr Nedelcu was, even on his own evidence to the Court, abducted on three separate occasions: (1) on 25 February 2008, for the purpose of making his handwritten statement; (2) on 29 February 2008, for the purpose of making his recanting affidavit; and (3) a week or so after he had been discharged from hospital on 10 March 2008, when he remained at the defendant’s home until early May 2008. Mr Nedelcu could offer no explanation for these inconsistent versions of the alleged abductions.

636 Third, during the course of his interview with the plaintiff’s solicitors on 1 December 2008, in which he informed them about his abduction, Mr Nedelcu made no reference to the fact that, during his abduction, he had been taken to a solicitor and forced to make the recanting statement and affidavit. Mr Nedelcu could offer no satisfactory explanation as to why he did not tell the plaintiff’s solicitors of these events. They were central to the purpose of the abduction and could not have been something about which Mr Nedelcu forgot. I reject his evidence that he did not inform the plaintiff’s solicitors of these matters because ‘I didn’t think of that at that time.’

637 It was put to him that he did not inform the plaintiff’s solicitors of these matters because he did not want the plaintiff and Mr Pollett to know that he had recanted the evidence contained in his outline, as he feared this would lead to Mr Pollett ceasing to pay him money. Mr Nedelcu replied that he understood the question and ‘It’s not true’. I reject this evidence. I find that Mr Nedelcu did not tell the plaintiff’s lawyers about the recanting statement and affidavit because he wished to continue receiving payments from Mr Pollett. I do not accept his rejection of this reason.

638 Fourth, in his interview with the plaintiff’s solicitors, Mr Nedelcu told a story about the defendant attending at his home when he abducted him in company with other men. He said that another man accompanied the defendant to the door of his apartment and that he saw other men down below. In giving his account of the abduction to the Court, he made no mention of any other men being present. It was put to him that the other men were mentioned to the plaintiff’s solicitors in an endeavour to embellish the abduction story. Mr Nedelcu denied this. I reject that denial. If Mr Nedelcu was abducted as he says he was, against his will and at gunpoint, it is unlikely that he would have forgotten such important details when recounting the episode in evidence.

639 Fifth, it was revealed in cross examination that Mr Nedelcu had many opportunities to make complaints about the abduction and the fact that he had been forced to swear a false affidavit. On his own evidence, he was in his own premises for four days between the making of his handwritten statement and the swearing of his affidavit. He was then in his own premises for another four or five days before he went to hospital. While he was in hospital, Mr Pollett visited him on a couple of occasions, as did the defendant. Further, on 25 March 2008, at the suggestion of Mr Tonkin, he was interviewed by police concerning his allegations to Oakley, Thompson & Co that he had been bribed by Mr Pollett to give evidence favourable to the plaintiff. He had no satisfactory explanation as to why he did not inform the police officer of his abduction and forced swearing of a false affidavit, or as to why he did not seek assistance and protection from the police.

640 Sixth, in his interview with the plaintiff’s solicitors, Mr Nedelcu said that he ceased to be in fear of the defendant once he was released from his custody after the trial date had been vacated. While acknowledging that the transcript of his interview with the plaintiff’s solicitors is accurate, and records him as stating that he was not frightened of the defendant from the time that he was taken home by him, he denied that this was so and said that he had been frightened at all times. He could give no explanation as to why he would have told the plaintiff’s solicitor that he was not frightened from that time, and said simply ‘I cannot remember I did that’. This was a reference to a failure to remember that he had told the plaintiff’s solicitor that he had ceased to be frightened.

641 Seventh, Mr Nedelcu could not give a satisfactory explanation as to why his affidavit, in addition to the material contained in his handwritten statement, contains the added sentence:

Although Mr Nedelcu maintained his position that the money was not paid to him to give favourable evidence to assist the plaintiff’s case, he acknowledged that he had in fact been paid approximately $5,000-$6,000 by Mr Pollett up to the time he swore his recanting affidavit in February 2008. He was given ample opportunity to provide an explanation as to why he volunteered this information to Oakley, Thompson & Co. He understood what was being put to him but had no explanation.

642 Eighth, in cross-examination Mr Nedelcu contradicted his evidence in chief that he did not willingly give his mobile phones to the defendant. Mr Nedelcu agreed that the defendant obtained possession of his two mobile phones in circumstances where they had both run out of credit and, accordingly, the defendant gave Mr Nedelcu a ‘cashed up’ phone to use in return. The clear implication from his evidence in chief was that the defendant had simply taken his mobile phones from him against his will.

643 Ninth, some printouts of text messages contained on Mr Nedelcu’s mobile phone were put to him in cross-examination. From these text messages, it is apparent that a dispute developed between Mr Nedelcu, Mr Pollett and the plaintiff in the period 17 to 20 March 2008. This was at the time that Mr Nedelcu alleges he was abducted by the defendant for the second time.[54] The text messages concern a demand by Mr Pollett that Mr Nedelcu return to him business cards provided by Mr Pollett to Mr Nedelcu in respect of a business, or a proposed business, conducted by Mr Pollett. The text messages read:

644 Although he initially denied it, when pressed Mr Nedelcu accepted that these text messages demonstrated that he was no longer wanted by Mr Pollett and the plaintiff.

645 It was put to Mr Nedelcu that the plaintiff and Mr Pollett were cross with him at this time because they believed or suspected that Mr Nedelcu had decided to ‘switch camps’ and assist the defendant. Mr Nedelcu denied this. However, I do not accept this denial. Mr Nedelcu frankly admitted that, at this time, Mr Pollett stopped sending him money for a period and that he was not in contact with the plaintiff or Mr Pollett for some weeks thereafter.

646 Tenth, cross-examination revealed that Mr Nedelcu had continuing contact with the defendant from the time that he was returned home by the defendant in May 2008. Mr Nedelcu admitted that he attended at the defendant’s business premises in Princes Highway, Dandenong, that he made numerous telephone calls to the defendant at the shop leaving messages for him to contact him, and that he socialised with the defendant, his current partner Amanda, and a friend of the defendant’s from Belgium, in August 2008. This included gambling and dining in restaurants. It was put to Mr Nedelcu that ‘you were all just friends, weren’t you, having a good time?’ Mr Nedelcu responded ‘I have no choice, Your Honour, I have to do whatever John tell me. I have to do whatever John say to me because that’s why I was scared for.’ I do not accept this evidence.

647 Eleventh, Mr Nedelcu initially denied that he was paid any money by Mr Pollett between the time he received the text messages saying that he was no longer wanted and the time he attended at the plaintiff’s solicitors for the recorded interview on 1 December 2008. That evidence was false. When this was put to Mr Nedelcu, he said ‘I just got a bit confused there.’ I do not accept that was the case.

648 Twelfth, it was directly put to Mr Nedelcu that the credits recorded in his bank account all came from Brian Pollett. He denied that this was so and said that ‘very little’ of these amounts came from Mr Pollett. He said that many of these amounts came ‘from my friends’. He was unable to give any surnames and only reluctantly gave some first names of these friends. He said ‘I cannot remember the family name. It was people who chased the gambling with us.’ When it was put to him that this evidence was inconsistent with his estimate at February 2008 that he had received between $5,000 and $6,000 over a five year period from Mr Pollett, he gave the unsatisfactory response ‘I am confused. I can’t remember.’

649 Thirteenth, Mr Nedelcu acknowledged that his recanting statement and affidavit are not blanket denials of his earlier outline of evidence prepared to support the plaintiff. The written statement and affidavit contain a detailed breakdown, accepting some parts of his outline of evidence, including some matters adverse to the defendant, and rejecting others. This indicates that he did not give instructions to Mr Davies under threat of death or violence from the defendant. He was exercising judgment as to what was true and what was not, or at least pretending to do so.

650 Fourteenth, it was put to Mr Nedelcu that his evidence contained in the written outline was the product of conversations between himself and Mr Pollett, before he went to see the plaintiff’s solicitors for the purposes of giving instructions for the outline. Mr Nedelcu was evasive in answering questions on this topic. Ultimately, his position was that ‘I say we discussed some things but not everything that’s written there.’ However, when this evidence was put back to him in the very next question, he again became evasive, commenced rubbing his brow and fidgeting in the witness box, and responded ‘I cannot remember’. It was not long after this that Mr Nedelcu said he was feeling unwell and could not continue.

651 The defendant’s evidence concerning the circumstances in which he dealt with Mr Nedelcu from February 2008 is also unconvincing.

652 The defendant forcefully denied the allegations of abduction and threats of violence against Mr Nedelcu. He described the allegations made by Mr Nedelcu in this regard as ‘an absolute gigantic, gigantic fantasy.’ In particular, he denied that he had a firearm with him at any time he dealt with Mr Nedelcu.

653 As I have said, the defendant denied that Mr Nedelcu was ever a friend of his. He said that he ‘was somebody I knew’, and that he had limited contact with him during the time that he operated the Atherton Road store.

654 In his evidence in chief, the defendant said that he knew Mr Nedelcu had indicated an intention to give evidence on behalf of the plaintiff which was unfavourable to the defendant’s case. He read the outline of Mr Nedelcu’s evidence which was served on his solicitors on or about 14 February 2008. At this time, apart from occasionally bumping into Mr Nedelcu at the casino, the defendant had not seen Mr Nedelcu for some years.

655 According to the defendant, on 25 February 2008 he received an unsolicited telephone call from Mr Nedelcu in which Mr Nedelcu said he wished to speak with him. Following this conversation, the defendant said that he and his current partner, Amanda Simpson, immediately left to visit Mr Nedelcu at his apartment in Kensington. The defendant said that he needed to press the intercom button twice, once on the ground floor and once on the fifth floor, in order to obtain access to Mr Nedelcu’s apartment. The defendant said that the following conversation between he and Mr Nedelcu then transpired:

656 The defendant then telephoned his solicitor, Mr Tonkin, and insisted that he see him immediately. He said that he was ‘uncomfortable that Bill may change his mind for another day’.

657 Amanda Simpson did not witness this conversation. She remained in the defendant’s car while he went up to speak with Mr Nedelcu.

658 The defendant then introduced Mr Nedelcu to Mr Tonkin and the events described by Mr Nedelcu took place. Once Mr Nedelcu had signed the handwritten statement in the presence of the independent solicitor, Mr Davies, the defendant drove Mr Nedelcu home.

659 Later, on 29 February, the defendant again attended at Mr Nedelcu’s home and collected him. He drove him to Mr Tonkin’s office where Mr Nedelcu swore the recanting affidavit. The defendant then drove Mr Nedelcu home.

660 There was telephone contact between Mr Nedelcu and Mr Apostolidis over the next few days. Then, on 4 March 2008, Mr Nedelcu was admitted to hospital. He was visited by the defendant on three occasions. The defendant did not visit Mr Nedelcu out of any friendship or concern for his welfare. He visited him because he thought that it would be in his interests to remain on good terms with Mr Nedelcu, so that he would expose the conduct of the plaintiff and Mr Pollett concerning payments to Mr Nedelcu at trial.

661 After Mr Nedelcu was released from hospital, arrangements were made for him to see police officers at Mr Tonkin’s premises in order that he be interviewed in connection with his allegations that he had been paid money by Mr Pollett to give evidence in support of the plaintiff’s case. This interview took place on 25 March 2008.

662 At this time, the defendant said that Mr Nedelcu asked him ‘for a variety of reasons, if he can come and stay with me.’ The defendant described Mr Nedelcu’s expressed reasons in the following terms:

663 In any event, not out of any friendship or concern for Mr Nedelcu’s welfare, but in order to ensure that he did not again change his evidence at the trial, which was then fixed for 21 April 2008, the defendant said that he allowed Mr Nedelcu to come and stay with him. He said that Mr Nedelcu stayed with him from that time until a week or two before he and Amanda left Australia on 18 May 2008 for an overseas trip.

664 The defendant said that, during the time that he stayed with him, Mr Nedelcu had no restrictions placed upon him as to his movements, and slept in the defendant’s daughter’s bedroom. The defendant said that he went to work each day and that Amanda, who doesn’t work, was either at home or out shopping or doing other things. During this period, the defendant said that he drove Mr Nedelcu to the doctor’s on a number of occasions. He also recalled that Mr Nedelcu cooked meals at his home on a few occasions. During this period, Rudi Germijns, a friend visiting from Belgium, was living next door in the house which the defendant had by then purchased. The defendant, his son David, Mr Germijns and Mr Nedelcu went out on a number of occasions to play the poker machines and have dinner. The defendant did not like poker machines, but went to keep Mr Nedelcu happy.

665 After Mr Nedelcu left the defendant’s home, the defendant said he continued to speak to him on the telephone on many occasions for the balance of 2008. He said that Mr Nedelcu would usually call asking him for money. The defendant gave him $50 here and there.

666 In the period August/September 2008, the defendant continued to socialise with Mr Nedelcu at poker machine venues and restaurants on a fairly regular basis. He was usually accompanied by Amanda Simpson, sometimes his son, David, and another friend from Belgium, Billy Roustam. Again, the defendant was quite clear about his motivations for continuing to see Mr Nedelcu. It was not out of friendship but rather, as he said:

667 At some stage in late 2008, the defendant obtained possession of two mobile phones owned by Mr Nedelcu. During the course of this trial, those mobile phones were seized by the police in relation to a separate matter. They were subsequently produced to the Court pursuant to a subpoena issued on behalf of the defendant.

668 As appears above, Mr Nedelcu gave evidence of telephone calls made by him on his mobile phones to Mr Pollett and the plaintiff during the time that he was staying with the defendant between February and May 2008. Mr Nedelcu said that he was forced to make these telephone calls, and to record them on the defendant’s mobile phone, at the insistence of the defendant. The defendant denied that this was so and said that he was not present when Mr Nedelcu made these telephone calls. I reject this evidence. I have no doubt that the defendant would not have allowed Mr Nedelcu to use his mobile phone under any circumstances. I find that the defendant encouraged, if not demanded, that Mr Nedelcu make the telephone calls to Mr Pollett and the plaintiff with a view to obtaining admissions from them about the payment of further funds to Mr Nedelcu. The defendant provided his mobile phone to Mr Nedelcu to enable these conversations to be recorded and I find that it is more probable than not that the defendant was present when the calls were made.

669 The defendant also gave evidence that Mr Nedelcu showed him a video recorded on his mobile phone of Mr Nedelcu having sexual contact with the plaintiff. To the best of his recollection, this occurred in September or October 2008. He gave the following evidence:

670 I reject this evidence. I find that it is a fabrication designed to blacken the plaintiff’s name. The mobile phones, when produced, contained no such video footage. The defendant says that he obtained these mobile phones in about September or October 2008 for the purpose of preserving evidence to be used against the plaintiff. He says that he checked the mobile phones for SMS messages which may be damaging to the plaintiff’s case, but made no attempt to check that the incriminating video footage was still there. I have not doubt that, if the defendant’s evidence was true in this regard, he would have checked to see that this video footage remained on the mobile phones at the time that he took possession of them.

671 Further, in making these findings, I take into account the fact that although the defendant, according to his own evidence, has known of the damaging video footage since September or October 2008, it was not until the plaintiff was about to leave the witness box that senior counsel for the defendant was instructed, in Court and for the first time, as to the existence of the video footage. I reject the defendant’s explanation that he did not see the significance of this video footage until this time. Mr Nedelcu was always going to be called as a witness for the plaintiff. Any financial or sexual relationship between the plaintiff and Mr Nedelcu was obviously relevant to the credibility of Mr Nedelcu’s evidence.

672 As I have said, the evidence of and relating to Mr Nedelcu reflects badly on all concerned. I have already made findings with regard to the purpose of the payments made by Mr Pollett to Mr Nedelcu. The payments were made for the purpose of securing favourable evidence from Mr Nedelcu. As to Mr Nedelcu himself, his credibility was affected by the receipt of those payments and by the other matters discussed above. In these circumstances, I reject his evidence that he was abducted at gunpoint and forced to make his recanting statement and affidavit under fear of death. His evidence provides no safe basis to make a serious finding of that kind. That does not mean that I accept all of the defendant’s evidence. He was also a most unsatisfactory witness.

673 I do not believe either Mr Nedelcu or the defendant about the events surrounding the making of Mr Nedelcu’s recanting statement and affidavit and Mr Nedelcu’s subsequent period of residence at the defendant’s home. The issue is one which, for the purposes of deciding this case, bears upon credit only. In circumstances where the credibility of both the defendant and Mr Nedelcu is seriously undermined for other reasons given elsewhere in this judgment, it is unnecessary to make a finding as to Mr Nedelcu’s allegations. However, even accepting the defendant’s own version of events undermines the credibility of his case. In circumstances where Mr Nedelcu was obviously in need of money on a day to day basis, and was thus susceptible to giving favourable evidence to those who paid him money, it was improper of the defendant to have him staying at his home and to then entertain him at his expense thereafter. Unlike the plaintiff, he did not even profess to have any friendship with Mr Nedelcu which could possibly justify his actions.

674 The plaintiff also claimed that the defendant has made threats to kill her since the end of their relationship. She recounted an incident after the settlement of the proceeding brought by Ken Apostolidis against the defendant seeking a half share in the business. She recalled a heated exchange in French between Ken and the defendant in the courtroom following the announcement of the settlement and the trial judge leaving the court. The plaintiff was in the courtroom because she was to be a witness for Ken Apostolidis. Following this loud and aggressive argument between the brothers, she said that the defendant turned to her, pointed at her and said in English ‘You’re dead’. She said that he did not use as aggressive a tone as that which he had been using in his conversation with Ken.

675 I do not accept this evidence. The defendant’s solicitor, Mr Tonkin, was present at the time of the alleged threat and denied that the threat was made. I accept his evidence.

676 The contributions of the plaintiff are the subject of findings above. They may be summarised as follows.

677 First, the plaintiff performed the homemaker role with competence. This role included a significant contribution towards preparing the Dowling Road home for sale, searching for the Yarrabee Court home and involvement in the renovation of that home. These contributions by the plaintiff were beneficial to the welfare of the defendant and, in addition, constituted non-financial contributions to the acquisition of assets by the defendant by ensuring that he could focus on the business seven days a week.

678 Second, the plaintiff made significant and regular contributions to the welfare of the defendant’s son David. Once again, these contributions have two aspects. The defendant was relieved of his own parental responsibilities and was able to rely upon the plaintiff providing a caring environment for his son while he was the defendant’s responsibility. Further, the plaintiff’s role in this regard also ensured that the defendant could focus on the business.

679 Third, the plaintiff sold the Byfield Street home at the request of the defendant. She made her net proceeds of that sale available to the defendant on his request at a critical time in the development of the defendant’s business. Although I am satisfied that the defendant would nevertheless have proceeded to purchase the Dandenong shop, and to thereafter change his business model, the ability of the defendant to draw upon the plaintiff’s money must have given him some comfort at a time when large borrowings had just been undertaken to purchase the Dandenong shop. The ability of the defendant to borrow money from the plaintiff during 1994 gave the defendant confidence in committing to capital items such as the two large electric signs at the Dandenong shop.

680 Although the defendant substantially repaid the plaintiff all moneys advanced to him, no interest was paid. In the meantime, the plaintiff was out of the property market at a time of high growth. In that regard, although I am not satisfied that the plaintiff worked full-time in the business, the understanding of the parties was that she would work in the business from time to time as requested by the defendant and he acquiesced in her not obtaining full-time employment. In the absence of paid employment, the plaintiff was unable to use what funds were available to her for the purchase of an investment property, as the defendant said he suggested.

681 Fourth, the plaintiff contributed by working in the business, although not to the extent that she contended. The work which she performed was useful and unpaid.

682 It was submitted on behalf of the defendant that the plaintiff received adequate compensation because she enjoyed a good standard of living during the course of the relationship; all of her needs were provided for by the defendant without financial contribution by her and she was given $10,000 and a car when the relationship ended. Reference was made to the fact that the defendant paid all of the costs and expenses relating to the homes in which the parties resided, paid all of the joint living expenses of the parties, took the plaintiff on holidays, provided her with a motor vehicle and all running expenses, and gave the plaintiff sufficient moneys to pay for clothing and other necessities. In my view, this submission ignores the plaintiff’s work in the business, the fact that she sold the Byfield Street home and made the proceeds available for loan to the defendant for his business, and gives only token recognition of the plaintiff’s role as a homemaker and carer of David.

683 Taking the evidence as a whole, I am not satisfied that the plaintiff was adequately compensated for her contributions to the defendant’s assets, direct and indirect, or for her homemaker role. I proceed to consider what orders are necessary to ensure that the plaintiff’s contributions are sufficiently recognised and compensated for.

684 The discretion to make an adjustment order under s 285(1) of the Act has been described as ‘a holistic value judgment in the exercise of a discretionary power of a very general kind’.[55]

685 Notwithstanding the general nature of the discretion, it is accepted that the Court should proceed in accordance with the three-step process identified by the New South Wales Court of Appeal in Kardos v Sarbutt,[56] as approved and applied by Neave JA in Giller v Procopets.[57]

686 As to the first step, the Court normally values the property of the parties at the date of the trial.[58] However, there is no general rule that this course should be followed. In this case, there is no issue. The parties agreed that the property should be valued at the date of separation and that any adjustment order made by the Court should reflect the contributions made to the assets at that time. In addition, subject to some conditions which are unnecessary to mention here, it was also agreed that any adjustment order would carry interest from the separation date. The calculation of interest is to await further argument.

687 As to the second step, the evaluation and balancing of the respective contributions of the parties, a number of principles are established.

688 First, homemaker contributions are to be given appropriate recognition, notwithstanding that it may not be possible to link those contributions to the acquisition, conservation or improvement of any property. This is plain from s 285(1)(b) of the Act.[59]

689 Second, homemaker contributions are not to be treated in a token way or by reference to the commercial value of those contributions.[60] Each case must be determined by reference to its own particular circumstances.

690 There are a number of cases where the homemaker role has been assessed as equal to the breadwinner role in the context of making adjustment orders under s 285(1) of the Act. For example, in Kenyon v Akeroyd,[61] the Court of Appeal in this state treated the two roles as equal. The facts of Kenyon v Akeroyd differ markedly from this case. The parties had children and this necessitated that the role of Ms Kenyon be principally that of homemaker. In addition to her homemaker role, Ms Kenyon was responsible for the idea of subdividing some land which yielded a profit, did all of the necessary work to affect that subdivision, did the bookwork for Mr Akeroyd’s logging business on a weekly basis for about two years, worked part-time in the business and managed the agistment of stock on the parties’ land. The relationship lasted approximately 11 years. In these circumstances, the Court held that it would be neither just nor equitable to view one party’s contribution as more valuable than that of the other party, and concluded that their contributions were reciprocal and equal.[62]

691 Third, the evaluation and balancing of the respective contributions is not to be undertaken by ‘a reductionist process analogous to the taking of partnership accounts’.[63] This is because some contributions are readily capable of evaluation in monetary terms, and others, such as those made in the capacity of homemaker and parent, are not.[64]

692 As to the third step, it is important to note that the Court is concerned to make an adjustment order which is just and equitable ‘having regard to’ the contributions of the parties of the kinds specified in s 285(1) of the Act. Accordingly:

693 In formulating an adjustment order, the Court may take what has been described as a ‘global’ approach or an ‘asset by asset’ approach or a combination of both. The authorities indicate that it may be appropriate to apply the rigour of an asset by asset approach as a cross-check against an adjustment arrived at using the global approach, to ensure that the result is just and equitable in all the circumstances.[66] However, it is not necessary for such a check to be undertaken in every case.[67]

694 I have decided to adopt a global basis in the formulation of an appropriate adjustment order. I adopt this basis because the plaintiff’s contributions are not readily capable of evaluation in monetary terms. In particular, her role as homemaker and carer for David and the strategic value of the loans made by her to the defendant in connection with the business at a vulnerable time are incapable of monetary assessment. It is not simply a matter of calculating interest for the time that the loans remained unpaid. They were of greater significance than that.

695 However, having regard to the high value of the defendant’s business, I will perform a rough estimation of the monetary value of the plaintiff’s contributions in order to ensure that she does not obtain an unjust share of the business. In this regard, it is important to note that the business was the defendant’s. He owned it prior to the commencement of the relationship. He was the one who applied his assets, skills and business talents to its growth. The plaintiff’s contributions, while not wholly insignificant, were incidental.

696 I will exercise my discretion to make an order under s 285(1) of the Act that the defendant pay the sum of $500,000 to the plaintiff.

697 I have performed the following asset-by-asset cross-check to ensure that the amount of $500,000 is not unjust or inequitable in all the circumstances.

698 First, the plaintiff’s role as homemaker justifies granting her compensation equivalent to one-half of the net value of the Yarrabee Court home. This is an amount of $130,000.

699 Second, the plaintiff worked in the business for about six years. She was unpaid. I estimate the value of her work at about half of that of a full-time employee. The available evidence demonstrates that by 1998 full-time employees were being paid approximately $505 per week. If the value of the plaintiff’s services were about half that, and less in the early years, she performed unpaid work worth approximately $70,000 over six years.

700 These amounts total $200,000. This leaves $300,000 as compensation in respect of the plaintiff’s direct and indirect contributions to the business.

701 Third, the plaintiff’s contributions as homemaker, carer of David, and in providing the strategic loans to the defendant, justify allowing her some compensation in respect of the growth in value of the furniture business, the cash receipts of the business retained by the defendant, and other business assets acquired by the defendant. These assets total approximately $11 million. $300,000 equates to approximately 2.7 per cent of the value of these assets. This represents fair compensation to the plaintiff and is neither unjust nor inequitable in all the circumstances of the case.

702 The plaintiff made a further or alternative claim for a declaration that the defendant and/or companies associated with him hold property on a constructive trust for her. Reliance was placed upon the recent decision of Kaye J in Cressy v Johnson (No 3) in which the relevant authorities were reviewed.[68]

703 In this case, it is unnecessary to consider this aspect further. The remedy of a constructive trust is unnecessary in the circumstances of this case, and would operate unfairly to the defendant. As the plaintiff has established a right to an adjustment order under s 285(1) of the Act, the Court has ample power to protect the plaintiff against possible dissipation of assets by the defendant in order to defeat execution upon the plaintiff’s judgment entitlement. At present, the plaintiff’s position is protected by caveats lodged over real property. There is a counter-claim for the removal of those caveats.

704 In my view, having regard to the dim opinion which I take of the defendant’s credibility and business practices, this is an appropriate case in which to make orders under s 291(1)(g) of the Act in aid of enforcement of the plaintiff’s judgment. That can be done by the making of appropriate injunctions restraining, to the extent necessary, disposition or further encumbering of real property owned by the defendant, Azura and/or DSK. I will hear the parties as to the form of such injunctions. When those injunctions are in place, the plaintiff’s caveats should be removed.

705 In the event that the judgment is not satisfied by the defendant, the Court retains the power under s 291(1)(b) of the Act to order the sale of property owned by the defendant and companies associated with him, and to make orders for the distribution of the proceeds of sale to satisfy the judgment.

706 For the reasons given above, there will be judgment for the plaintiff in the sum of $500,000. I will hear the parties as to the form of the judgment, the calculation of interest and costs. As discussed above, I will make orders restraining the disposition of assets in aid of enforcement of the plaintiff’s judgment. The formulation of those injunctions will need to await the Court’s determination as to the amount of interest to which the plaintiff is entitled and the resolution of costs issues. It is only at that time that the Court will have sufficient information to determine the extent of injunctive relief which is necessary to protect the plaintiff’s position pending payment of the judgment sum, interest and any costs to which she may be entitled. In the meantime, the caveats provide the plaintiff with adequate protection.

707 For the reasons stated above, I will refer the plaintiff’s conduct concerning the receipt by her of social security and Austudy benefits to the appropriate authorities to take such action as they think appropriate. I will also refer the defendant’s conduct concerning his own taxation affairs, and those of DSK, for consideration by the appropriate authorities. I reject the submissions made that such referrals should not take place. These matters were not minor irregularities. They were the result of deliberate and repeated conduct engaged in by the parties.

[13] The hourly rates are in fact stated as one-half of that amount, attributable to each of the plaintiff and Ken Apostolidis.

[25] Or words to that effect. The transcript records that this evidence was ‘indistinct’.

[51] Julie Stubbs and Julia Tolmie, ‘Falling short of the challenge? A comparative assessment of the Australian use of expert evidence on the battered woman syndrome’ [1999] MelbULawRw 27; (1999) 23 MULR 709.

[54] Mr Nedelcu’s hospital records indicate that he was released on 10 March 2008. He gave evidence that he was abducted a second time between seven and 10 days after his discharge from hospital.

Supreme Court of Victoria

Kalenik v Apostolidis & Ors [2009] VSC 208 (29 May 2009)