Arcaba v K & K Real Estate Pty Limited

1. INTRODUCTION
2. In these proceedings the plaintiff sues the defendant for damages for breach of contract in respect of an agreement allegedly made between him and the defendant in about late November 2010 or early December 2010 whereby the plaintiff alleges that he agreed that in return for him not seeking immediate repayment of certain loan monies, the defendant would pay him the sum of $1,600,000 from the sale of properties by the defendant from its interest in a consortium that was established to develop land at a location known as Gledswood Hills (formerly known as Gregory Hills) in addition to repaying the loan monies (the Deferral Agreement).
3. At all material times, the defendant had an issued capital of two shares, one held by Michael Kordek Senior and one held by his wife, Maria Kordek.
4. The plaintiff's case is that on the abovementioned date the Deferral Agreement was entered into in discussions between Mr Michael Kordek Snr, a director and shareholder of the defendant company and himself.
5. The defendant denies that the Deferral Agreement was made as alleged, or at all, but admits the making of loan agreements which involved loan funds being provided by the plaintiff via one of his corporate entities totalling $195,000 to the defendant.

(i) Four loans

1. The plaintiff instituted these proceedings by way of Statement of Claim filed on 15 November 2013. An Amended Statement of Claim was filed, by leave, during the hearing on 18 March 2016. In paragraphs [4]-[11] of the Statement of Claim the plaintiff pleads and particularises the making of four loan advances by him through a corporate entity controlled by him to the defendant company. The four advances amounted to the abovementioned sum of $195,000 (consisting of four loans of $100,000, $50,000, $25,000 and $20,000).
2. The loan agreements were express oral agreements and they were all entered into at the plaintiff's business premises in Liverpool.
3. The loan agreements were negotiated by the plaintiff personally with Mr Kordek Snr acting on behalf of the defendant.
4. The plaintiff alleges that that the loan funds were to be applied by the defendant towards meeting legal fees and disbursements of the defendant incurred in instructing its legal representatives, Colin Biggers and Paisley (CBP), in relation to an agreement for the sale and purchase of land at Oran Park.
5. The plaintiff alleges that it was a term of the agreements that the defendant would repay the moneys when the legal proceedings were completed.
6. In relation to the Deferral Agreement, upon which the plaintiff sues, the plaintiff pleaded his claim in paragraphs [12],[13] and [14] as follows: "12. In or about late November 2010 or early December 2010 the defendant by Michael Kordek informed the plaintiff that the defendant had lost its Court case concerning the Oran Park land and that the defendant was unable to repay the money due to the plaintiff. 13. At the same time that the defendant informed the plaintiff of the matters in paragraph 12 above, the defendant by Michael Kordek and the plaintiff agreed that in return for the plaintiff not seeking immediate repayment of the First Loan, Second Loan, Third Loan or Fourth Loan, the defendant would pay the plaintiff the sum of $1,600,000 from the sale of properties by the defendant from its interest in a consortium formed to develop land at Gledswood Hills in addition to the sum of $195,000 borrowed ("Deferral Agreement") (emphasis added). Particulars (a) The Deferral Agreement was express and oral and entered into at the plaintiff's business premises at Moore Street Liverpool. (b) The Deferral Agreement was entered into by the plaintiff personally and by the defendant acting by Michael Kordek. 14. It was a term of the Deferral Agreement that the defendant would repay the First Loan, the Second Loan, and the Third Loan and the Fourth Loan as soon as it could and would pay to the plaintiff the sum of $1,600,000 when the project at Gledswood Hills was finalised and/or sold by the defendant."
7. The plaintiff in paragraph [23] of the Statement of Claim pleaded that the defendant had denied that it has any obligation to pay the plaintiff the amount of $1,600,000 or any additional sum pursuant to the Deferral Agreement and denied the existence of such an agreement. In that respect, reference was made to a letter from the solicitors for the defendant, CBP, to the solicitors for the plaintiff, Stojanovic Solicitors, dated 2 and 4 September 2013 in which any such agreement was disputed.
8. In paragraph [24] of the Statement of Claim the plaintiff alleged that the defendant was in breach of the agreements in respect of each of the four loans and he also pleaded in paragraph [25] that the defendant had repudiated the Deferral Agreement which repudiation had been accepted by the plaintiff. Accordingly, the plaintiff seeks damages in respect of the alleged breach of the Deferral Agreement: at [27].
9. The defendant at hearing relied upon an Amended Defence filed pursuant to orders made by Registrar Bradford on 6 May 2014.

(ii) Repayment of loans

1. It is not necessary to discuss at this point the full details of the Amended Defence other than to say that the defendant admitted the four loan advances and stated paragraph [12] that the defendant had offered to repay the total amount of $195,000 together with interest of $4,400 on 13 November 2010. The offer was said to have been made by Mr Kordek Snr. The defendant alleged that the plaintiff declined the offer: at [12].
2. The defendant company alleged in its Amended Defence that Mr Kordek Snr offered to pay the sum of $125,000 verbally in early October 2010 but the plaintiff declined to accept payment in that amount: at [17].
3. As at the date of these proceedings were instituted, an amount of $95,000 of the loan monies had been repaid by the defendant: (Statement of Claim [15]-[19]). Upon commencement of these proceedings, the plaintiff sought repayment of the remaining $100,000. This sum was repaid by the defendant on 24 January 2014.
4. The defendant pleaded that it had tendered monies in repayment of the First Loan: at [18]. Details as to the repayment of $95,000 of the total $195,000 monies owed by the defendant were set out at [15]-[19] of the Statement of Claim in the following terms: 1. On or about 25 January 2011 the defendant paid to the plaintiff the sum of $20,000 in partial repayment of the First Loan, the Second Loan, the Third Loan and the Fourth Loan. 2. On or about 27 January 2011 the defendant paid to the plaintiff the sum of $25,000 in partial repayment of the First Loan, the Second Loan, the Third Loan and the Fourth Loan. 3. On or about 10 October 2011 the defendant paid to the plaintiff the sum of $25,000 in partial repayment of the First Loan, the Second Loan and the Third Loan. 4. On or about 17 April 2012 the defendant paid to the plaintiff the sum of $11,000 in partial repayment of the First Loan, the Second Loan, the Third Loan and the Fourth Loan. 5. On or about 20 April 2012 the defendant paid to the plaintiff the sum of $14,000 in partial repayment of the First Loan, the Second Loan, the Third Loan and the Fourth Loan.
5. On 24 January 2014 the defendant repaid the remaining $100,000 to the plaintiff via electronic transfer from the National Australia Bank (Affidavit of Mr Kordek Snr [64] and p 144 of Exhibit MK-1).

Affidavit Evidence

1. The affidavit evidence for the plaintiff in the proceedings concerning the Deferral Agreement was given by the plaintiff in his primary affidavit sworn 5 May 2014 and two reply affidavits sworn by him on 13 February 2015 and 15 February 2016.
2. The defendant relied upon affidavit evidence being the affidavits of Mr Kordek Snr sworn on 30 September 2014 and 30 November 2015. The defendant also relied upon the affidavit of Mr Michael John Kordek Jnr, sworn 12 November 2015.
3. The plaintiff relied upon the affidavit evidence of the following witnesses: Mr Dennis Locke sworn 11 February 2015 and Mr Sasha Cubrilo sworn 13 February 2015.

The Contractual Issue

1. Given the nature of the Deferral Agreement relied upon by the plaintiff and the multiplicity of disputed issues of fact raised in these proceedings, it is appropriate at this point to outline the nature of the plaintiff's case and the nature of the defence to it.
2. As noted above, the plaintiff's case is that in or about late November or early December 2010 he and Michael Kordek Snr, on behalf of the defendant, entered into an oral contract for deferral of repayment of loans made by the plaintiff to the defendant. The alleged consideration of the Deferral Agreement alleged by the plaintiff was said to include a payment to be made by the defendant to the plaintiff in the amount of $1,600,000 upon finalisation of the Gledswood Hills Project or the sale or other finalisation of the defendant's interest in that project.
3. In the plaintiff's case it was stated that the alleged genesis of the Deferral Agreement was the defendant's loss in relation to the Oran Park litigation. As a result of that loss the plaintiff alleged that the defendant could not repay the $195,000 loan funds advanced in the period 4 August to 18 November 2010. In that context the plaintiff alleged that it was the defendant's inability to repay the $195,000 that led to the parties agreeing to the Deferral Agreement.
4. The defendant argued that the plaintiff's case altered from that alleged in the original Statement of Claim. In the Outline of the Defendant's Closing Submissions it was noted that the plaintiff alleged that the defendant, through Mr Kordek Snr, agreed: "…In return for the plaintiff not seeking immediate repayment of the First Loan, Second Loan, Third Loan or Fourth Loan [K & K] would repay [Mr Arcaba] the sum of $1,600,000 from the sale of properties by [K & K] or from its interest in the consortium formed to develop land at Gledswood Hills in addition to the sum of $195,000 borrowed (Emphasis added).
5. In the Outline of the Defendant's Closing Submissions at [6] it was stated that "Mr Arcaba's new pleaded case" asserted that the events or the circumstances which was to trigger the payment of the $1.6M had not been discussed but that they were to be implied. The defendant contended that the "belated amendment" to the Amended Statement of Claim had changed the agreement on which the plaintiff sued in an important respect, and that this undermined his credibility and his case.

(i) The Plaintiff

1. The plaintiff was born on 10 August 1964 in Rijeka, Croatia. He stated in his affidavit that in 1989 he completed a degree in economics at a University in Croatia and in 1993 he completed a Diploma in Chemical Technology. In 2001, he said he established a finance brokerage business using a corporate entity known as First Class Mortgages Pty Ltd.
2. He said that after 2001, following the establishment of his mortgage business, his clientele mainly consisted of persons of Serbian background who were looking for home loans. He said that he referred potential buyers to Mr Kordek Snr who in turn referred clients to him in order to arrange finance.
3. In 2005 he began working as a broker for the Commonwealth Bank of Australia (CBA) in a business referred to as Commonwealth Bank Mortgage Innovations. He said that this was mainly involved in obtaining residential home loans for customers. His office was located in Liverpool. The plaintiff said his association with the CBA ended in or about November 2011.
4. In August 2012, the plaintiff purchased a franchise for a real estate agency business in Liverpool. He said in evidence that he continued to conduct both the finance brokerage business and the real estate agency business.
5. As at 2010, the plaintiff had for about eight years been carrying on business as a finance broker through First Class Mortgages Pty Ltd. By March 2009 another company owned by Mr Arcaba, Mortgage Café (NSW) Pty Ltd had been appointed as a broker of Commonwealth Bank of Australia Loan Products (Exhibit 1).
6. The plaintiff had over a number of years acquired in the course of his business arrangements with the CBA considerable experience with loan products and real property mortgages and securities and had been a money-lender for some years.

(ii) Mr Kordek, Senior

1. Mr Kordek Snr had been involved in broadacre developments through the defendant and other companies for over 20 years.
2. In his affidavit sworn 30 September 2014 he stated that he had known the plaintiff for a number of years. They had initially met socially at the Bonnyrigg Sports Club. He believed that this occurred in 2005-2006.
3. At that time, he said the plaintiff was working with the CBA. He said that they met regularly at the Bonnyrigg Sports Club or at the Cucina Restaurant in Liverpool.
4. Mr Kordek Snr said that since the late 1980s, his primary business partner had been a Dr Morven Dan. Dr Dan died on or about 1 March 2012. He and Dr Dan established a company, Kordan (Australia). Dr Dan and he purchased and developed properties through different corporate entities, including Kordan (Australia).
5. In about October 2009 it came to Mr Kordek Snr's attention that a property at Oran Park was available for sale. It was unzoned but residential zoning Mr Kordek believed was going to be approved. An Expression of Interest for Oran Park was lodged soon after.
6. In due course, Kordan (Australia) made an improved offer for Oran Park at $5.6M. Kordan was to exchange contracts for the property on or about 8 December 2009. However, for various reasons, the process was delayed and the settlement of the property did not eventuate.
7. A Notice to Complete had been served by the vendor's solicitors. Mr Kordek Snr looked for alternative partners to Dr Dan, who had lost interest in the property.
8. On or about 8 July 2010 the defendant's solicitors received a Vendor's Notice of Termination. Mr Kordek Snr sought funding from different sources and on or about 12 August 2012 the company entered into a Joint Venture deed with another company as trustee of the Oran Park Unit Trust (Joint Venture).
9. On 5 August 2010 the defendant commenced proceedings in this Court seeking specific performance of the sale and purchase of the Oran Park Property.
10. Ultimately, the defendant was unsuccessful both at first instance and in the Court of Appeal. It sought Special Leave from the High Court. Special Leave was refused on 12 November 2010. As a result of these proceedings, the defendant had been required to pay the amount of $2,228,197.69 into court. The money was not released in full until about 26 August 2011. On that date $250,000 was released to the defendant.
11. Against that background, Mr Kordek Snr in his affidavit sworn 30 September 2014 gave evidence as to the amounts advanced by way of loan by the plaintiff to the defendant: at [50]-[62].
12. Following the dismissal of the Oran Park special leave proceedings by the High Court on 12 November 2010 the plaintiff said that he telephoned the defendant on four occasions. He said he had a conversation with the plaintiff along the following lines: KORDEK: "We lost the court case, Milorad." ARCABA: "I'm sorry to hear that." KORDEK: "I owe you some money. I have to give it back to you. With interest, it rounds to about $200,000." ARCABA: "I need to work out some accounts. Let's meet tomorrow." KORDEK: "Okay, let's meet at the Bonnyrigg Sports Club."
13. A few days later, on 18 November 2010, Mr Kordek Snr said he spoke with the plaintiff at the Bonnyrigg Sports Club about repayment of the loans. He said a conversation along the following lines took place: KORDEK: "I will repay you from the money that is being released from the High Court soon. Is that okay Milorad?" ARCABA: "Yes, of course, Michael."
14. Mr Kordek Snr denied the conversation which the plaintiff recounted in paragraph [28] of his affidavit.
15. Against this background the plaintiff's evidence and Mr Kordek Snr's evidence in relation to the Deferral Agreement is set out below.

2. The Plaintiff's Evidentiary Case
3. As noted in the plaintiff's written submissions at [7] the crux of the proceedings was whether the conversation, in which the Deferral Agreement was alleged to have been made, in fact occurred.
4. It was accepted, of course, that the plaintiff had the onus of establishing the alleged oral Deferral Agreement and its terms: Watson v Foxman (1995) 49 NSWLR 315 at [318] per McLelland CJ in Eq.
5. It was also accepted that the Court would need to carefully consider the reliability of the evidence given by the respective witnesses in terms of both the evidence given and the manner in which it was given.

The Oran Park Project

1. According to the plaintiff, in March 2010 Mr Kordek Snr attended his office in Liverpool. At that time the plaintiff was contracted to the Commonwealth Bank as a Mortgage Innovation Manager. He said that on that occasion the following conversation took place: KORDEK: "My company K & K Real Estate exchanged a contract in December 2009 for some land at Oran Park. I have paid 10%, and the price is about $5.6 million plus GST. K & K needs finance, can you help me with a loan to complete the purchase?" ARCABA: "I would need the financial statements for K & K, and tax returns for the last two years." KORDEK: "Business was slow in the last two years. K & K did very little development work and did not make much profit, and I don't have any financial statements." ARCABA: "Based on what you have told me, the Commonwealth Bank would not approve any loan. Your best option is to go through a finance company or private lender." KORDEK: 'I will think about it and speak to my partner who is putting 50% into the project." (at [13])
2. The plaintiff said a few days later Mr Kordek Snr came to his office at Liverpool and they had a conversation in the following terms: KORDEK: "I have got big problems, my partner is pulling out and I have to settle the purchase. I am in big trouble, I don't know what to do." ARCABA: "You may have to look for another business partner." KORDEK: "I would like to put anyone in tomorrow, who is willing to be my partner. Can you recommend anybody?" ARCABA: "I will speak to some people and let you know." (at [14])
3. According to the plaintiff, on the following day after that conversation he contacted a person who he knew by the name of Vic Petrovic, a solicitor from the firm, NSW Compensation Lawyers. He said he spoke to Mr Petrovic along the following lines: ARCABA: "I have a friend called Michael Kordek and his company is looking for a partner for a big development project at Oran Park." PETROVIC: "I have heard of the name. I would be interested." ARCABA: "I will arrange a meeting with you and Michael Kordek." (at [15])
4. The plaintiff said that after that conversation he arranged a meeting between Mr Petrovic and Mr Kordek Snr. This occurred in early April 2010 at Cucina Restaurant located across the road from his office. He said he introduced the two men and then left. He said he was not involved in any conversation between them on that occasion.
5. The plaintiff said that after the meeting between the two men, Mr Kordek Snr came to his office and they had the following conversation: KORDEK: "I really want to thank you for introducing Vic Petrovic to me. He has agreed to come in as a 50% partner. However, K & K needs a loan for its 50%." ARCABA: "As I said before you need to go through a finance company, and I think Paramount Mortgage Service at Bella Vista can help you. I will contact them and see if they can help you." (at [17])
6. The plaintiff said that he then contacted Paramount Mortgage Service and referred Mr Kordek Snr to that entity. He said he was not involved in any further dealings between Paramount Mortgage Services and Mr Kordek Snr.
7. After this referral the plaintiff said that Michael Kordek Snr rang him and said, "I got loan approval, I want to thank you let's go to lunch".
8. The plaintiff said later that day they went to the Cucina restaurant and he had the following conversation with Michael Kordek Snr: KORDEK: "I really want to thank you for all you have done, getting me the loan and Vic Petrovic as a partner." ARCABA: "I was happy to help." KORDEK: "Because of your help I can go ahead and I want to give you 5% in the project when it is complete." ARCABA: "Thank you, if you really think I deserve that, I appreciate it." KORDEK: "You really deserve it and you will get it." (at [18])
9. Following that conversation, he said they shook hands and finished their lunch.
10. The plaintiff said that in about late June or early July 2010, Mr Kordek Snr telephoned him and the following conversation took place: KORDEK: "The deal at Oran Park has not settled because of my delay, and the vendor wants to sell to someone else. I may have to go to court." ARCABA: "How is that possible?" KORDEK: "Because K & K didn't settle on time." (at [19])
11. The plaintiff in his primary affidavit sworn on 5 May 2014, set out evidence concerning the loan advances he arranged, and provided to the defendant. He said that the initial conversation concerning a loan was in or about July 2010 with Mr Kordek Snr who came to his office at Liverpool and they had a conversation as follows: KORDEK: "I need about $100,000.00 to cover the legal costs for K & K in the court case. Can you help? If you can, you will be paid back by K & K as soon as the court case is finished." ARCABA: "Yes I can, when do you need the money?" KORDEK: "As soon as possible." ARCABA: "I will let you know, and who do I make the cheque to?" KORDEK: "K & K Real Estate Pty Ltd." (at [20])

Gledswood Hills Project

1. It is the plaintiff's case that the alleged Deferral Agreement arose in the context of the Gledswood Hills Project.
2. Mr Kordek Snr in his affidavit sworn 30 September 2014 gave evidence as to the background to that project as follows: The project only came into existence from about December 2011. Mr Kordek Snr said he came to know of the property from discussions he had had with members of an entity, Sekisui House, that purchased a neighbouring property at Gregory Hills, but Mr Kordek Snr noted at [75] of his affidavit that before November 2011 he never referred to the project as "Gregory Hills" as distinct from "Gledswood Hills".
3. Mr Kordek Snr's evidence was that on or about 23 November 2010 a company, The Broadacre Development Company Pty Ltd, was set up (BADC). The name for BADC had originally been reserved in mid-July 2010 for the proposed Oran Park development.
4. On or about 29 November 2010 BADC exchanged contracts for a property that was located at 650 Camden Valley Way, Gregory Hills (soon to be known as Gledswood Hills), being properties 668 & 659 Camden Valley Way, Catherine Field. The purchases settled in or about February 2011.
5. In order to complete the purchase, BADC obtained a loan from NAB in the amount of approximately $3.1M.
6. BADC contracted as trustee of the Catherine Field Development Unit Trust. The defendant held 31 units in the unit trust. The other unit owners included a company which was referred to as Mr Petrovic's investment vehicle, with 31 units, Lulud Pty Ltd (Mr De Lutiis' company) with 31 units and Bella Vista Realty Pty Ltd (Mr Covington's investment company) with 7 units. The principals contributed part of the purchase price with the balance funded by the NAB.
7. The defendant company exited its interest from BADC in March 2012.
8. In February 2014 BADC sold Gregory Hills to an entity, Tribeca.
9. Accordingly the above corporate entities owned the shares in BADC and Masterton Homes (Masterton) was engaged for the development of the project in November/December 2012, Masterton being a contract home builder for the joint venture. Communications between the unit holders and Masterton, it was noted in the defendant's submissions, were copied to Messrs Petrovic, De Lutiis, Covington and Cavric (Mr Petrovic's offsider), but they were not copied to the plaintiff. This was relied upon by the defendant as being inconsistent with the plaintiff's contention that Mr Kordek Snr bound the defendant, K & K, to give him the value of 8 blocks in the development. The plaintiff's allegation of a Deferral Agreement, it was submitted, would, on his account, amount to "a private side deal" without Mr Kordek Snr informing his co-principals: Outline of the Defendant's Closing Submissions at [79].
10. Mr Kordek said that the defendant company had a 31% economic interest in BADC as did "Vic" (Vic Petrovic) and "Ned" (Ned Cavric). Mr Kordek said the defendant funded "Vic's share" of the deposit paid by BADC for Gregory Hills.
11. The plaintiff's affidavit evidence included reference to the making of the loan by or through him by way of a bank cheque dated 4 August 2010 for $100,000 drawn in favour of the defendant: at [21].
12. The plaintiff also referred to the second, third and fourth loans in [22]-[26] of his primary affidavit.

Plaintiff's Affidavit Evidence: The Gledswood Hills Project and the Deferral Agreement

1. In [28]-[30] of his primary affidavit the plaintiff gave the following evidence: "28 In late November 2010, Michael Kordek telephoned me. I had the following conversation with Michael Kordek:- He said: 'Milorad, I have bad news. K & K lost the court case, and the Oran Park project. The deposit is gone together with all legal costs. Can I come and see you?' I said: 'Sure, when do you want to come?' He said: 'Can I come soon?' I said: 'Yes, I will wait for you.' 29 About one hour after the above telephone conversation, Michael Kordek came to my office at Liverpool, and we had the following conversation:- He said: 'As I told you over the telephone, K & K lost the court case. I am in a very bad situation. The deposit is gone and the legal costs were so expensive. K & K has no more money and can't repay you now, or in the near future.' I said: 'Michael, what is the option for me. I gave your company $195,000.00. What is the solution, I need money as well.' He said: 'I am looking at another project at Gledswood Hills with Vic Petrovic, and some other partners. It is a very big project and K & K will have 31% in the project. We are getting approval for 160 blocks of land. Because of your help, I want to pay you back your money, and if you can wait we want to also pay you back with the value of 8 blocks of land.' I said: 'I am happy to wait for that kind of deal.' He said: 'I am expecting at least $300,000.00 per block.' I said: 'I accept your offer and will wait. But listen, I also want to be fair to you. It will cost you about $100,000.00 per block with the DA and all that goes with it. I am happy to accept $200,000.00 per block, so K & K pay me $1.6M on top of the $195,000.00.' He said: 'I am happy with your proposal, we have a deal.' We shook hands, and the conversation continued:- He said: For your comfort, I will tell my business partners to add your name to the documents. I said: 'Yes, I would appreciate that because I have taken your offer seriously and I may need to use my share, the $1.6M as security in any future financial transactions that I have with other parties.' He said: 'Milorad, don't worry, you can use that as security because you have a share in the project, on what we agreed.' 30 In January 2011 I was having some financial difficulties, and needed money to pay some of my creditors, I telephoned Michael Kordek and I had a conversation with him as follows:- I said: 'Michael, I am having some financial difficulties. Is there any chance to help me with some money?' He said: 'I will see what I can do because the projects in Ipswich and Middleton Grange are not performing how I expected. I will see if K & K has some money to pay you something.' I said: 'Whatever you can do would be appreciated. Can you at least give me something in writing as proof of my involvement in Gledswood Hills and that I would be getting $1.6M.' He said: 'I will do something about that.'"
2. The plaintiff's evidence was that a few days after this last conversation, Mr Michael Kordek Snr telephoned him indicating that he could pay $20,000 at that time and another $25,000 in a few days. The plaintiff said he gave him banking details.
3. On 25 January 2011, an amount of $20,000 was deposited into the plaintiff's ANZ bank account.
4. On 27 January 2011, a further amount of $25,000 was deposited into the plaintiff's bank account.
5. The plaintiff then gave an account of a conversation with a Mr Nenad Cavric in his office in February 2011. He said Mr Cavric was a lawyer working with Mr Petrovic. He said on that occasion the following conversation took place: ARCABA: "How is the project at Gledswood Hills going?" CAVRIC: "It's moving along and I am also a part of the project with Vic Petrovic, as a silent partner. I used my house as security to raise my share, and Vic put cash into the project and he holds 31%. I will show you how the shares are held in the project." (at [33])
6. The plaintiff then said that Mr Cavric wrote on his whiteboard and he recalled seeing names on the whiteboard and details of their shareholding in the Gledswood Hills Project. He said he did not see his name on the whiteboard, but saw the name K&K. He said he expected to see his name next to it. He said he had the following conversation with Mr Cavric: "I said: Why isn't my name listed because I have a share with K&K through Mr Kordek. He said: You will need to speak to Michael Kordek, because he only told me to put his company down and he would arrange your involvement between the two of you."
7. Mr Cavric did not give evidence. The failure by the plaintiff to call him as a witness was relied upon by the defendant as a basis for a Jones v Dunkel inference.
8. It is noted that the plaintiff had known Mr Cavric for some time, he having worked with Mr Petrovic: Plaintiff's First Affidavit at [32]. Mr Cavric had been closely involved in the Oran Park Project. He had an involvement with Mr Petrovic in that project and the Gregory Hills Project.
9. Following the meeting, the plaintiff said he met with Mr Kordek Snr either at his office or in the Cucina Restaurant and that they had the following conversation: "I said: 'Ned came to my office and he drew on my white board, the shares in the project. K & K was there, but my name was nowhere. I asked Ned why my name wasn't there and he told me to speak to you. What is going on?' He said: 'Milorad, it's too complicated with so many parties involved. You are included as part of the 31% share in K & K. You have my word and you should not have to worry about that.' I said: 'I trust you Michael, your word is enough.'" (at [34])
10. About this time, the plaintiff said that Mr Kordek told him that he was involved in two other projects, one in Ipswich Queensland and the other at Middleton Grange, near Liverpool. The projects were being conducted, according to the plaintiff's account of Mr Kordek's conversation, through Kordan (Australia) which had a 50% share.
11. Shortly after that conversation he said that Mr Kordek introduced him to a number of people associated with Masterton Homes.

Matters arising from the alleged conversations in paragraphs [29] and [30] of the plaintiff's primary affidavit

1. On the plaintiff's account of the conversation set out in paragraph [29] there was no reference as to how long the plaintiff was being asked to "wait" to receive repayment of the $195,000.
2. Secondly, there was no reference in the conversation as to timing of payment the amount of $1.6M, or as to the events that would trigger payment.
3. In submissions for the defendant it was observed that the plaintiff's evidence established that at the time of these alleged discussions, the plaintiff had had no experience of subdivision costs and there was then no definition or feasibility plan as to what would be involved in the project if development approval was given. The defendant contended that there was no basis established whereby the plainiff could have assessed costs of the development at $100,000 per block.
4. Notwithstanding the above matters, the plaintiff's evidence was that in the above discussions he said to Mr Kordek "I'm happy with your proposal, we have a deal".
5. As noted above, it was after this conversation that the plaintiff said he told Mr Kordek Snr that he would appreciate having his name added to "the documents" in case he needed to use his "share" of $1.6M as security in relation to future financial transactions.
6. There is no reference in the plaintiff's evidence as to what "documents" were being referred to and no statements as to how or when the "deal" would be documented.

The Plaintiff's Credibility: A Central Issue

1. In the absence of any reasonably contemporaneous memorandum or other record of the Deferral Agreement the plaintiff's credibility in terms of both his truthfulness and reliability essentially became a central issue in the proceedings. Fundamental to the defendant's defence case was the asserted inherent improbability of the plaintiff's case which asserted that in return for his agreement to extend the time for repayment of loans totalling $195,000, the defendant through Mr Kordek Snr volunteered to pay the plaintiff a very large amount of money, namely, a $1.6M share of profits from the Gledswood Hills development project.
2. By any measure such an arrangement would in broad terms represent an exceptionally generous outcome to the plaintiff for his agreement to extend the loan repayment date(s). The defence case challenged the claimed agreement at a number of levels. Additional to what was contended to be the inherent implausibility of any such alleged agreement, the defendant's case directed attention to the conduct (the relevant acts and omissions) of the plaintiff following the alleged making of the agreement sued upon - the post alleged contract conduct - which the defendant contended was inconsistent with an agreement having been made and contradictory of it.
3. The plaintiff was cross-examined over three days. In the course of the cross-examination a number of credibility issues were raised with him, some of which went to the plaintiff's motivation. For the purpose of analysis, these have been separated in the discussion that follows into five categories: 1. The plaintiff's business model and financial pressures; 2. The alleged promise to add the plaintiff's name to deeds concerning the project; 3. Caveats lodged on properties owned by "Kordek's interests"; 4. The plaintiff's delay in seeking legal advice in respect of the Deferral Agreement; 5. Mr Kordek Snr's alleged avoidance of the plaintiff between March 2011 and October 2011; and 6. Conversations between the plaintiff and Mr Kordek Junior in 2012.

(1) The plaintiff's business model/financial pressures

1. The plaintiff, as noted in the Introduction above, acted as a finance broker from approximately 2001. In or about March 2005 he became an authorised representative with CBA. In the period that he acted as a CBA representative he entered into a number of loan transactions in the name of corporate entities operated by him including in particular Mortgage Café. These related to residential home loan products. Whilst an authorised representative of CBA, the plaintiff was only permitted to broker products for the bank.
2. In cross-examination it emerged that over a period of years, the plaintiff operated what was referred to as a 'business model' borrowing funds from friends or other persons which he would then on-lend in the course of his business to others: (T 61-62). Over a period of time, the plaintiff or his corporate entities fell into default and failed to repay the loans. This resulted in various lenders who had advanced loans to him, threatening to take action, or actually taking action, to recover outstanding loan monies.
3. The plaintiff's difficulties were compounded, due to the fact that in a number of instances he encountered problems in recovering monies that he had advanced by way of loans from defaulting borrowers. This combination of circumstances progressively brought significant increasing financial pressures to bear upon the plaintiff over a period of years.
4. He was cross-examined at some length in relation to these matters. They were said to provide both an explanation and a motivation for what the defendant maintained was a "false claim" in the present proceedings: (T 40).
5. The plaintiff was cross-examined upon the following loan transactions: (i) Loans from Ray and Bonnie Miller and Beta Publishing Pty Limited Exhibit 2 is a copy of a letter written by Wright Lawyers and Associates dated 16 January 2013 addressed to the Senior Legal Counsel of CBA. In it, Wright Lawyers advised that their clients had entered into various loans in favour of the plaintiff over a period of 3 years (August 2008 to December 2010) for amounts totalling $500,000. The letter stated that the plaintiff had allegedly held himself out to be acting for and on behalf of the CBA with him using the bank's letterhead, business cards, facilities and technology information systems. Wright Lawyers advised that as at the date of the letter, their clients maintained that no interest had been paid by the plaintiff or his company on the monies that their clients had loaned to him on or about 25 October 2011. The letter stated: "(7) We confirm that Mr Arcaba was known to Mr Miller form [sic] approximately the middle of 2006 with Mr Miller having lent funds on a short term basis to Mr Arcaba [sic] Company First Class Mortgages (FCM)." The letter stated that Wright Lawyers understood that the CBA was aware of the plaintiff's actions while operating the Liverpool Mortgages Innovation Centre on behalf of the CBA. The letter foreshadowed legal proceedings. (ii) The Cubrilo Loan The plaintiff, via First Class Mortgages, borrowed loan funds from Jovas and Radojka Cubrilo on 23 December 2008. The plaintiff failed to repay the principal monies owing. (iii) The Maric Loan The plaintiff or one of his corporate entities borrowed $150,000 on 23 May 2008 from a Mr Velemir Maric. Mr Maric apparently made a complaint to police as to the failure by the plaintiff or any of his corporate entities to repay the loan monies. Included within Exhibit 3 is a copy of a statement dated 12 September 2011 in which the plaintiff confirmed that he had received from Mr Maric $50,000 and agreed to repay the money by 19 May 2011. The evidence indicated that the monies were eventually repaid (on 15 September 2011). (iv) The Spoljar Loan In about 2008-2009 the plaintiff borrowed $180,000 from Bartol and Ivana Spoljar. The plaintiff did not repay the loan monies on the due date and entered into an arrangement to repay by way of instalment payments. The plaintiff said that as at the date of his cross-examination, he had not repaid all the monies: (T 58: 35-40). Following the transaction entered into with Mr Maric, the plaintiff received a letter from the CBA addressed to him and Mortgage Café Pty Ltd dated 28 October 2011. The letter was entitled "Warning Letter". It referred to notification to the bank of a dispute arising from allegations made by Mr Maric relating to what was referred to as an "over the counter withdrawal made from his deposit account…on 23 May 2008 for the amount of $50,000…" The author of the letter stated: "You responded to the allegations in the above meetings and although it is common practice to lend money within the Serbian community, you did acknowledge that it was a conflict of interest to borrow funds from client Maric that you have provided products for. You also acknowledge your actions in borrowings [sic] funds from Commonwealth Bank clients Bonny & Ray Miller and Bartol & Ivana Spoljar who you have also provided products for is deemed a conflict of interest." The letter advised that, without prejudice to any existing rights that the bank had, it had continued ongoing accreditation of the plaintiff's company subject to matters set out on p 2 of the letter, one of which was that the plaintiff immediately cease entering into any future 'personal' borrowing arrangements with 'friends' who are clients of the Bank for which he also maintain a business relationship. In cross-examination it was put to the plaintiff: "Q. You're under an enormous amount of pressure at this time from Mr and Mrs Miller and Beta, aren't you? A. Yes. Q. And the pressure that you're under is that they want their money, don't they? A. Yes." (T 60: 35-50). As indicated above, the reference to "at this time" is a reference to October 2011, being the date of the CBA's abovementioned letter. The plaintiff admitted in cross-examination that Mr Cubrilo had been chasing him for repayment of loan monies and that he had received a letter from Mr Cubrilo's solicitor. It was put to him that CBA were not pleased with him as they had already given him a letter and a final warning. When asked what he had done with the money that he had raised, he replied "I lent money and I used it as capital in the company": (T 61: 20‑25). As to his method of operation it was put: "Q. So the business model, as it were, is to borrow from Beta or Mr and Mrs Miller and/or others such as the Cubrilos and Maric and others-- A. Yes. Q. -and on-lend to others at a higher rate. And is that right? A. Yes. Q. So the difference is your profit, effectively? A. Yes. Q. So you're a moneylender, effectively? A. Yes.": (T 61: 35-50). He agreed that his profit-taking depended upon people to whom he had loaned monies repaying him or his company but that the "model" broke down when people didn't repay him. "Q. So that if someone doesn't repay you, you can't repay your creditors, correct? A. Correct. Q. It becomes more difficult to repay your creditors? A. Yes. Yes, it is.": (T 62: 5-20). He agreed that the Cubrilos had not been "easily put off" as some others had been and that they had been pressing him for payment. The plaintiff replied: "A. Not really, but they're just asking. Q. Asking for payment? A. Yes. Q. How much did you owe them at that stage, about $700,000? A. Yes. Q. All they were doing was just politely asking you for payment? A. Yes.": (T 62: 40-63). He agreed that at that time, persons to whom he had lent money had not repaid loan monies. He agreed, when put to him, that a great deal of money had been lost, that hundreds of thousands of dollars had "disappeared". He answered in the affirmative: (T 64: 30-40). It was then put to him: "Q. Because you lent it without security? A. Correct. Q. And you had no way of repaying those to whom you owed money? 2011, 12, 13 and 14 and even today? A. Yes. Yes. Q. That has put an enormous financial strain on you, hasn't it? A. Which time? Q . 2011, 12? A. Yes, it is. Q. 13, 14 and 15? A. Yes. Q. An enormous financial strain on you? A. Yes. Q. This case is a bit of a lifesaver for you, isn't it? It enables you to re-establish yourself by winning this case and repaying your creditors, doesn't it? A. No. Q. That's not why you're running this case? A. No. Q. I want to put to you and give you an opportunity to answer it directly: you have fabricated this entire case for the purposes of getting a judgment in order to repay your creditors. A. It's not true.": T 64: 40-65. The plaintiff said that on the specified date he left the CBA and sold his business: T 65: 30-40. Exhibit 5 is a copy of a letter of termination addressed to the plaintiff from CBA dated 2 April 2012.

(2) The alleged promise to add the plaintiff's name to deeds relating to the Gledswood Hills Project

1. It was part of the defendant's case that, contrary to the plaintiff's evidence, there had been no discussion on the subject of adding the plaintiff's name "to the documents". As noted above, on the plaintiff's evidence, the conversation concerning the alleged Deferral Agreement and the statement as to his name being added "to the documents" occurred in late November 2010. On the defendant's case, the plaintiff however failed to take any active steps to ascertain or have confirmed that his name had been added to "the documents" as he alleged Mr Kordek Snr promised. Given the amount allegedly promised by Mr Kordek Snr ($1.6M) in relation to the plaintiff agreeing to defer repayment of an amount of $195,000 the question as to why the plaintiff did not press for the Deferral Agreement to be recorded in writing was raised with the plaintiff.
2. In cross-examination, he was asked what he understood by his name being added to "the deeds". The plaintiff replied: "A. To put me in the deeds, from my understanding, he promised me to put on the shared holding where he was 31 per cent, you know, put in my name and as a deal that he owed to me 1.6 from his share. That's my understanding, he promised me that." (T 138: 15-20).
3. A little later he was asked: "Q. No, I'm not asking for your understanding. I'm asking you something entirely different. Did he say to you, 'I will put you on the share and on the deeds'? On the share or on the deeds? What did he say to you? That's what we're trying to get to. A. Says to me, 'I put you in deeds of my 31 per cent share where he's saying that you will get $1.6M interest here and asking because to get something as a proof of that money from him owed to me I can use as a potential tomorrow, you know, security that I got it and expected some money in one or two years, you know, as my future transaction my business. Q. So a key term, which you say you discussed with him, of the agreement, was that you would be put in the deeds as security, correct? A. Correct. Q. Is that anywhere in your Statement of Claim? That's nowhere in your Statement of Claim, is it? A. It have to be." (T 138: 25-45).
4. It was put to him that there was no reference at all to that matter in the Statement of Claim, notwithstanding that he claimed that it was an "important term": T 139: 1-6.
5. He was then pressed: "Q. That's because you didn't instruct Mr Stojanovic to put that in your Statement of Claim. Correct? A. Correct. Q. So when you read and verified this, you were content from all the material allegations are fact, all the conversations, all the terms, all the material terms which you discussed with Mr Kordek Snr were correctly reflected in here? A. Yes. Q. So does it therefore follow that the omission of 'I will be in the deeds of security' was not something that was discussed or was not an important term of the agreement. Is that right? A. It is very important." T 139: 5-25.
6. In further cross-examination he was asked whether he had an understanding from his conversations with Mr Kordek Snr that "on the deeds" would require not only his agreement but also the agreement of others involved in the project, namely, Mr Petrovic, Mr De Lutiis and Mr Covington. The plaintiff replied that Mr Kordek Snr did not refer to that fact: (T 139: 45 to T 140: 10).
7. It is noteworthy that the plaintiff took no steps at this stage to seek any written confirmation of the Deferral Agreement, or that he would be entered in the "deeds" for the Gledswood Hills development project.
8. It was put to the plaintiff that his evidence concerning the entire Deferral Agreement referred to in paragraphs [12], [13] and [14] of the Statement of Claim, was a fabrication. He denied that proposition: (T 141: 20-25).
9. At a later point in his cross-examination, Mr Arcaba claimed that in his conversation with Mr Kordek Jnr in February 2012 he asked Mr Kordek Jnr to persuade his father to deliver on his promise: "To bring his father to me and bring his father to position that he put me on the 31 per cent in the paper together with another in his shareholding": (T 176: 35-40).
10. Mr Kordek Jnr disputed and denied that there had been any conversation between him and the plaintiff to that effect. Mr Kordek Jnr's account of his dealings with the plaintiff is discussed below.

(3) Caveats lodged by the plaintiff on properties owned by "Kordek's interests"

1. In June 2012 the plaintiff lodged individual caveats on two titles relating to properties owned by Kordek Real Estate Pty Ltd and K & K Real Estate Pty Ltd. Copies of the caveats were included in CB1 at [246]-[249].
2. In Schedule 1 to the first caveat (ending in numbers 068K) the facts said to support the estate or interest claim were: "The caveator in both caveats inserted in Schedule 1 the facts as supporting the estate or interest claimed in the following terms: 'the caveat or loan the sum of $750,000 to the registered proprietor'."
3. The plaintiff was cross-examined at some on the basis that the facts recorded in the caveats were inconsistent with the making of the Deferral Agreement.
4. On 29 June 2012 the solicitors for the two Kordek companies wrote to the plaintiff. A copy of the letter was included in CB1 at 250. The author of the letter of CBP Lawyers disputed the fact of loans for $700,000 having been made. The letter stated, "Firstly, our clients never borrowed any money from you and certainly never … advanced the amount of $750,000".
5. The letter from CBP Lawyers stated that, on instructions, an amount had been invested by the plaintiff in a project at Oran Park which was unable to proceed and such monies were not by way of a loan.
6. It was noted that in any event, the plaintiff had been paid an amount of $95,000 of the $195,000 amount which the plaintiff originally "invested" though there was no obligation for him to do so.
7. It was also observed that the arrangements that the plaintiff had in respect of the Oran Park project had nothing to do with K & K Real Estate Pty Ltd or Kordeks Real Estate Pty Ltd and that the plaintiff had never advanced any funds to them.
8. The letter required the plaintiff to withdraw the caveats.
9. On 10 July 2012 the plaintiff replied to the letter from CBP. A copy of the letter of 10 July 2012 is included in CB1 at 263. The letter stated: "I refer to your letter dated 29 June 2012. Your letter contains a number of factual errors. I loaned the money to K & K Real Estate Pty Ltd in order that it may pay your fees in relation to the Oran Park Project that was lost in the High Court. No doubt you will see the irony in the in present circumstances. I forward this amount of money at direction of Mr Michael Kordek, who is acting of [sic] behalf K & K Real Estate. The terms of my agreement with Mr Michael Kordek were that, in return for the loan of $195,000, K & K Real Estate would ensure that I would receive $750,000 when it was in funds or within two years at the latest. Alternatively, if the Oran Park Project was successful, Mr Kordek and K & K Real Estate would provide me with 5% of the gross proceeds of the Project. It is evident that the return of certain sums of money, ie the $95,000 evidences that there was an agreement between myself, Michael Kordek and K & K Real Estate. Accordingly I will be filing a Motion in the Supreme Court shortly to protect my interest and to fight lapsing order. If you would like to discuss any aspect of the matter, please contact my mobile …" (Emphasis added)
10. The plaintiff was cross-examined on the above letter by him to CCBP: at (T 207-212).
11. In relation to the reference to "the terms of the agreement" in the plaintiff's letter of 10 July 2012, he was questioned on inconsistency between his statements in his letter and his evidence concerning the Deferral Agreement: "Q. So is his Honour to understand from this letter that this agreement extends to Gregory Hill or Gledswood Hills? When you're talking about the 'terms of my agreement', that's the agreement that you say entitles you to 1.6 million dollars? A. Yes. It is. Q. It is? Why is there, then, no reference to a deferral of the payment of $195,000, the 1.6 million that you get and the repayment of the 195? Why is that not set out in this letter? A. Sir, I'm just, your Honour, I just reply this letter on request on, actually lodgement of caveat. And I was on that time so depressed, so upset, and I just got it given advice of the, I can't say advice, it's change opinion with Mr Nenad Cavric. And what he did to me on that morning, and I replied just to explain that 750 is being part of caveat amount what I put. And all the time we was meaning and thinking that Oran Park is fell, is gone, that our agreement stay what you see in after for Gregory, actually Gledswood, and I just answer to that company regarding what I did with one, actually two caveat. And I just referred that. And I can't say how I just use it if you can understand me, to appropriate answer for that request from me, I use a 750 here, meaning only for caveat amount what I put, what I say yesterday, I try to protect my situation because when I got that information from Nenad Cavric and another gentleman who told me they're selling the property, Nenad he told me another things, Nenad I feel sorry you because he left the country. And another things is not fair what he did to you because he's got it, I got it very confidential information, I got it, that he got it, he was paid by his share for Kordek company, by 40 million dollars. He make me very angry why he didn't come to you and pay your money back. He told me that, and after that I just gone in so big depression. Try to see, actually, you know, see how I'm just been tricked from him, he use me and he didn't from day 1 thought to do fair and correct what he promise me. And on that day when you see that letter, I've been paid just amount of 95,000. That means he even my money what I borrowed to him, 100,000, plus 1.6 he never come back. Actually they got it, I got it after 2 years, when he just send them letter. And another things, your Honour, Mr Kordek, when I sended that letter and I explain yesterday the full consequence and understanding what they mean caveat, that I been advised that I can't get any result because it was a interest of the property. But I try to make it noisy. And that time, maybe after one or 2 weeks I receive call from Mr Michael Kordek from Poland. And he call me, 'Mr Arcaba, Milorad, what you doing, I'm in very bad position, I'm very sick, I'm very, very sorry, what's that happened, I'm went to bad financial situation, that people over there'. I ask him 'who people' and after he told me 'they did so bad things to me and don't do that, what you doing, because you knew that it's not fair' ": (T 207: 8-45)
12. A little later, the plaintiff was further cross-examined about the agreement to which he referred in his correspondence with CBP: "Q. Can I ask you though, so that we're clear, what you say was to occur in return for the non-immediate payment of $195,000, you say in this letter you were to receive 750,000, when it was in funds or within 2 years. And then you then say there was an alternative and that was in relation to Oran Park project. But what I'm wondering, why do you say nothing about Gregory Hills or Gledswood Hills. Isn't that the most obvious thing to say to Mr Roomor, 'listen I'm due 1.6 million dollars, where's my money?'. A. Yes. I didn't. Q. You didn't. A. Meaning just for answer for that caveat of 750 what I put. Q. You didn't understand yourself to have the obligation to explain to Mr Roomor the nature of your claim against the Kordek's and K & K. You didn't think you needed to explained that? A. Yes. Q. But yet you explained the different claim you said you had against K & K and the Kordek's and that was for 750. Do you see that? A. Yes. Q. You mention nothing about Gregory Hills. A. I didn't. Q. The reason this letter says nothing about Gregory Hills or Gledswood Hills is because you never had any agreed or any part of the project. A. I had. Q. At 5%, 8 blocks, 1.6 million, or any of these permutations or combinations? A. It's not true. I had agreement.": (T 210: 15-45); see also (T 216: 10-15).
13. A little later, he was again asked about the caveats as follows: "Q. Do you remember yesterday when we, and I'm not traversing on old ground, your Honour, remember yesterday we had a conversation about how it is that each of the caveats had a $750,000 figure? A. Yep. Q. Do you remember yesterday, to paraphrase your answers you took a rough and ready valuation of two properties? A. Yes. Q. And you came to a figure that it would be, it was 1.7 or 1.5, but you were demanding 1.5. Here you only talk, here in the letter, in the fourth paragraph, you're only talking about 750,000? A. Because it's letter just related to one caveat. Q. That's false evidence isn't it? That's just a patent lie on your behalf now isn't it? A. No. Q. Can you go back to page 250 then. That's Roomor's letter isn't it. That's the letter you're replying to? A. Yeah. Q. Do you want to have a quick glance in that and in particularly the third last paragraph. A. Last paragraph. Q. Third last paragraph. A. Yes. I read it. Q. So this letter was about both caveats wasn't it? A. Correct. Q. Why did you just tell his Honour that you were only writing about one caveat? A. Because I, I probably missed it. I thought for only one, but is being two over there. Q. You're just happy to say anything that comes to mind aren't you? A. No. It's not true. HIS HONOUR: Q. Did you withdraw the caveats? A. Yes. I did.": (T 211: 31 to 212: 25).
14. On the issue of the caveats the plaintiff was challenged as to the inaccuracies contained within it as follows: "Q. I should formally put to you that what you wrote in this letter was not true, correct, the letter of 263? There was no debt of 750,000. Correct? A. Correct. Q. There was no debt of 750,000 times two as in the caveats. Correct? A. It's incorrect, it was that $1.6M. Q. Two times 750,000 is? A. Yeah, but Q. Two times 750,000 is? A. One and a half plus $100,000." (T 215: 36-49).
15. The plaintiff's attention was drawn to the fact that he had sworn statutory declarations stating, inter alia, that to the best of his knowledge the information and belief "…the caveator has a good and valid claim to the estate or interests set out in Schedule 1". It is plain, of course, that the statutory declarations in respect of the plaintiff's assertions as to the existence of an estate or interest in the specified properties contained deliberate falsehoods.
16. The plaintiff acknowledged in cross-examination that he knew what legal and equitable interests were: (T 186: 25-40) and that he had stated in the caveat that he had loaned the sum of $750,000 to the registered proprietor but admitted that in fact he had never lent either Kordek Real Estate Pty Ltd or K & K Real Estate Pty Ltd $750,000: (T 187: 5-11 and 189: 1-25).
17. In answer to the question how he could maintain that the statutory declaration was truthful, the plaintiff replied: "A. Your Honour, I'd been advised by one of the neighbour, Mr Michael Kordek, that he advise his friend that he buying his house, and I start to be very nervous, very in the panic, thinking that he try to sell everything to leave. I understand what I did here, and he's got a property, the KK in Cecil Hills. It's a residential house property and he's got another block of land but it was under another company name, Michael Kordek, and I knew that I can't use it, but I make, like, a noise to stop it, that process of the selling, and after that I withdraw. I did it by my knowledge and after all that thinking, stress, whatever, to protect my position to bring them back to the table to protect my interest in Gregory Hills regardless that another two property was over there. I did it, try to protect and make a noise to him, to his partner, to everyone, and I - on the request of his solicitor, it was withdrawn. I knew it. Nobody advised me for this. I did it by myself because I'm very desperate in my mind what he did to me, what he try to do, and it's not come to me to talk, to prepare to make some final agreement to put in this. All right. There's the reason why I did it." (T 189: 33-47).
18. He agreed to the proposition that he had completed and lodged the caveats in order "to bring pressure to bear": (T 192: 45-46). He was then asked: "Q. So is this a fair assessment: the end justifies the means, yes? In other words, anything that would force the Kordeks to do what you wanted, that was fair game, is that right? That's what these caveats are. It's a tactical weapon, isn't it? A. For me? Q. Yes. A. I just try protect, yes. Q. The caveat, a third of the way up, or a quarter of the way, the caveat 'or loan sum of $750,000 to the registered proprietor', yes? A. Yes. Q. Do you see that? Now, of course there was no loan of $750,000 to K & K Real Estate Pty Limited. Do you see that? A. Yes. Q. Do you agree with that? A. Yes. Agree": T 193: 1-16.
19. During his cross-examination, the plaintiff was asked: "HIS HONOUR Q. Mr Arcaba, I understand your evidence to be this: that the rationale behind lodging these caveats was to bring some pressure to bear on the defendant to deal with you-- A. Yes. Q. -in relation to what you said was the contract made in November 2010, whereby you were to be paid $1.6M? A. Yes, your Honour. Q. This caveats were lodged on or about 22 June 2012. Rather than using the devices of these caveats to bring pressure, why didn't you simply just instruct a solicitor, Mr Stojanovic or some other solicitor, to put the matter on the record. Just to write and demand that the contract you say that was made be honoured? A. Because I was scared when - if he sell it, he leave. Q. Sorry? A. I was scared if he selled it, you know, and he leave, because they already started talking that they - they leaving the country. Q. Is that your explanation for not-- A. No. Q. -coming out in the open, as it were and having a solicitor make a demand in terms there was an agreement made, a contract, that the terms of the contract were as you assert in these proceedings? And that you required the defendants to give an undertaking that they would honour the agreement, why didn't you do that? A. On a - I didn't do that because on that time I didn't have any documents to support and to prove that verbal agreement. I got it support and proof in the verbal from Ned Cavric and another people but I didn't on that time got it any evidence, because I didn't taught (sic) about that, I just tried to make a noisy to stop to sell it, to encourage to come back, talk with me": (T 194: 1-35).

(4) The plaintiff's delay in seeking legal advice in respect of the Deferral Agreement.

1. The plaintiff was asked why, as he had been talking to a lawyer (Mr Cavric) had he not sought legal action to be taken in respect of the Deferral Agreement: "Q. Why not simply say 'Ned, can you please write a letter to me on New South Wales compensation lawyers letterhead. Ned, tell them they owe me 1.6 million dollars.' Why not instruct him to do that? A. Because I couldn't find at that time that is being any positive effect because simply he left country. Because he left the country. Q. But K & K was still here. A. He left the country. He solded his interest, he didn't pay me money back and his son told me 'Don't call me anymore, talk with my father and you make a deal with my father, don't call me anymore'. And I just left, you know, and accept as a reality that I lost everything. That's the reason. Q. But you hadn't lost everything more than a year later. You issued proceedings against K & K? A. Correct. Q. So what I'm asking you, K & K Real Estate Proprietary Limited didn't get on the plane and go to Poland. They were still here. Why not get New South Wales compensation lawyers, Mr Cavric to write a letter demanding A. I don't know why. Q. You don't know why? A. No.": (T 213: 32 to 214: 5).
2. The plaintiff was further questioned on this aspect: "HIS HONOUR Q. I'm sorry, I thought the whole idea of using the caveats as a lever to get K & K to face up to its responsibilities to you under the contract you allege? A. Yes. Q. That was the reason you lodged the caveats wasn't it? A. Yes. The reason Q. Then why when you got the letter from Colin Biggers & Paisley at 29 June 2012 did you not use the opportunity? 'I've now got their attention. Now I'm going to let them know the true story about the deal or the contract that was made, whereby I was to be paid 1.6 million dollars'. Why didn't you then take it, take the opportunity, seize the opportunity to drive home the point that you were owed 1.6 million dollars under the contract you say was made? A. Your Honour, simply because I, I couldn't find any way that I can get it because he just left. And I just got it even advice, not advice, Ned Cavric, and his son he told me that KK doesn't have money and Mr Kordek he told me the company is like a going to bankruptcy, that he's a big financial problem. And I, I see now that I didn't use in that time that opportunity, maybe I should, but I didn't.": (T 214: 10-30).

(5) Mr Kordek Senior's alleged avoidance of the plaintiff: March 2011 to October 2011

1. It was part of the plaintiff's case that Mr Kordek Snr from about March 2011 to October 2011 took steps to avoid having contact with him, including his alleged failure to answer the plaintiff's telephone calls: Affidavit sworn 5 May 2014 at [40].
2. The plaintiff said that in about mid 2011 he attended the offices of NSW Compensation Lawyers at Liverpool. He said that he saw Mr Kordek Snr there and had a conversation with him in which the plaintiff claims to have said to him "I'm having a bad feeling that you have taken advantage of me, and I want to secure my $1.6M" and that Mr Kordek responded "At the moment, I am under huge pressure, but I promise you everything will be okay and you will get your money": Affidavit 5 May 2014 at [41].
3. Mr Kordek Snr strongly disputed the allegation that he avoided the plaintiff during this period or that he did not answer his telephone calls.
4. In cross-examination, it was put to the plaintiff that between March and October 2011 there were in fact 121 phone calls from Mr Kordek Snr to him. The plaintiff simply responded that that was not true and it was impossible: (T 222: 40-50).
5. He agreed that he attended a lunch on 29 April 2011 in the presence of Masterton personnel. Mr Kordek Snr was also in attendance. He was asked why he did not on that occasion confront Mr Kordek Snr for avoiding him and simply asking him "where's my money?" The plaintiff agreed that he did not say anything along those lines to him. A little later, the plaintiff said that he did not do so because he did not want to embarrass Mr Kordek Snr in front of others in attendance. When asked why he could not have taken him to one side and then raise the issue with him, he gave the following evidence: "Q. You couldn't call him to the corner and-- A. And because, because, because he told me, because he told me, 'Milorad, you don't worry, everything be fine, everything be fine, project going well'": (T 223: 50 to T 224: 5)
6. When it was then put to him that these words were, on his account, being spoken by the man who, he claimed, had been avoiding him for a period of some two months, the plaintiff responded "A. Yeah. He avoiding me to put, and come to make a, a, a agreement, onto this, what I expecting from him to protect me. I got it the security of 1.6 in his 31 per cent . That was the main reason why I said because -- Q. But why not simply say to him at the luncheon in a quiet corner 'why am I not getting documents protecting my 31% interest?'? A. He told me simply that 'it's little bit complicated now, but you don't worry'. When he told me little bit complicated from my understanding, that in arrangement and agreement how they set up that piece over there, it's something that he can't jump in, but I trust him that deals be, and I trust him that he do that by myself. And I - " (T 224: 6-16).
7. Mr Kordek Snr in his affidavit sworn 30 September 2014 disputed the plaintiff's evidence that he had avoided the plaintiff. In that respect, he stated at [101]: "…I was not difficult to get in contact with between March 2011 and October 2011. I had numerous communications with Milorad about Middleton Grange, over the telephone, in person and by email. I saw Milorad numerous times at either the Bonnyrigg Sports Club or Cucina Restaurant. Exhibited at pages 219 to 260 of exhibit MKS-1 is a series of emails showing communication between myself and Milorad in relation to Middleton Grange between March and October 2011. I continued to receive calls from Milorad until around 7 March 2012. Since the late 1980s, my mobile phone number has been xxx019. I have always known Milorad's number to be .xxx818."
8. In relation to email communications between Mr Kordek Snr and the plaintiff in 2011, the defendant relied upon copies of emails exhibited to Mr Kordek Snr's first affidavit at pp 219 to 260 of exhibit MKS-1. He said that those emails related to communications with the plaintiff between March and October 2011. An examination of the individual emails in question, establishes that there was email contact between Mr Kordek Snr and the plaintiff on the following dates: 30 April 2011; 10 May 2011; 16 May 2011; 5 June 2011 email from Mr Kordek Snr to multiple persons, including to the plaintiff's email address; and 25 July 2011 email from Mr Kordek Snr's email address to the plaintiff's email address.
9. The objective evidence as to the email correspondence directly calls into question the plaintiff's credibility in relation to his allegation that Mr Kordek Snr had been avoiding him in the abovementioned period in that he would not answer his telephone calls and stopped coming to his office. (See also his evidence in cross-examination at T171-2 and T222.)
10. At a social level, I note that the plaintiff sent an email on 2 April 2011 which stated "Bonnyrigg W Eagles play home games tonight AG. APIA 7.pm. See there in Vic Petrovic box": (CB4 at 1081).
11. The abovementioned luncheon held with the Masterton Homes personnel, of course, occurred in that period (29 April 2011). There is no evidence that explains why the plaintiff did not raise with Mr Kordek Snr the alleged failure to have recorded the plaintiff's alleged entitlement to $1.6M upon the sale of Mr Kordek Snr's interest in the Gledswood Hills Project.
12. When challenged as to why he failed to raise it with Mr Kordek Snr at the luncheon on 29 April 2011 "in a quiet corner", or as it was put, ask him "Why am I not getting documents protecting my 31 per cent interest?" the plaintiff's response at T 224: 10-16 was totally unconvincing, asserting that Mr Kordek simply responded "it's little bit complicated now, but you don't worry".
13. In cross-examination it was put to the plaintiff that emails and text messages in relation to attending the Bonnyrigg White Eagles game and in relation to the Middleton Grange Project were said to undermine his evidence: "Q. These are the texts to someone who's avoiding you, are they? A. Yeah. He avoid me on that time. Q. He avoid you? A. Yes. Q. But nevertheless you make arrangements to see him at the game and you just tell him that you also got buyers and you procured finance for four people to buy five blocks of land at Middleton Grange, yes? A. Correct. But he avoid me purposely for my affidavit where it says 'he avoid to come to put me on the deeds' and after that, you know, it is all that is here, true. I SMS'd to him because it's only one way to be in touch with him. And you say that he call me. Yes, he did. But he tried to avoid me because we've been on the regular basis nearly every day in the contact.": T 225: 40 to T 226: 5.
14. The plaintiff's evidence on this aspect was dissembling and obfuscating. His evidence in further cross-examination at T 226-227 is also noted.

(6) Conversations between Mr Michael Kordek Jnr and the plaintiff in 2012

1. The background to the exchange between Mr Michael Kordek Jnr and the plaintiff (discussed below) is that between December 2011 and January 2012 Mr Kordek Snr underwent a prostate operation. Mr Kordek Snr said he was bedridden for a period. In mid March 2012 he left Australia for medical treatment in Croatia and then went to Poland to be with his wife to convalesce and recover. He remained in Poland until 6 September 2014: affidavit of Mr Kordek Snr 30 September 2014 at [89].
2. According to Mr Kordek Snr from about late January 2012 he had a number of conversations with the plaintiff during the course of which Mr Kordek Snr said that the plaintiff said words to the following effect: "Michael, I need you to give me a piece of paper that says K & K owes me money. In return I will give you a piece of paper that says I owe K & K money. I need this paper, I will be murdered or I will go to gaol. I'm in big trouble." (Mr Kordek Snr's affidavit 30 September 2014 at [90])
3. Mr Kordek Jnr swore an affidavit in the proceedings on 30 September 2014. In it he stated that he is a director of the defendant company. His affidavit was made in response to the affidavit of the plaintiff sworn 5 May 2014.
4. Mr Kordek Jnr obtained his Real Estate Licence in 2004 and in 2006 graduated from the University of Sydney with a Masters of Professional Accounting.
5. From around 2008 he said he was the Accounts Manager of K & K and as such was responsible for recording all of the company's financial transactions and supplying information to K & K's accountants.
6. He became a director of K & K on or about 11 August 2010.
7. Mr Kordek Jnr set out a number of matters concerning the Oran Park Project, the Middleton Grange Project and loan advances from the plaintiff at [7]-[29] of his affidavit.
8. During his father's illness he said that he moved into his father's home/office.
9. At the end of January 2012 Mr Kordek Jnr said he received a call from the plaintiff. He says that they had a conversation to the following effect: "Milorad: 'Michael, I know your father is very sick, but I need his help with a serious financial problem I have. I owe a lot of money to some people and I haven't got enough money to pay them back. Could you please ask him to write me a piece of paper stating that K & K owes me $550,000 payable in 24 months? I just need this to show my creditors to get them off my back. Don't worry, I'll never actually ask K & K to pay me this money. Can you please do this for me?' Me: 'I will speak to my father about this for you. Please be patient. As you know, he is very ill.'"
10. According to Mr Kordek Jnr he had previously met the plaintiff once several years before. He said he was not privy to the deal that the plaintiff had alleged existed between him and his father, although he said he was aware of the fact that there were loans obtained through the plaintiff as recorded in the books of K & K. He said that as he was not privy to all the conversations between his father and the plaintiff he thought it prudent to speak to his father about it. He then set out the conversation he had with his father at [34] of his affidavit.
11. On 17 February 2012 by reason of his father's deteriorating health Mr Kordek Jnr was appointed under a General Power of Attorney.
12. Mr Kordek Jnr said that in February 2012 the plaintiff and he had a number of conversations and he set out the exchanges that he said took place at [36] of his affidavits. Mr Kordek Jnr's evidence included the following: "Milorad 'Can you provide me with a piece of paper?' Me: 'K & K cannot do this.' Milorad: 'Can we please meet so that I can explain my financial problems to you in detail. Some of the information I want to tell you is confidential and I don't want to tell you over the phone. Your father told me I was in the Oran Park project; that I was a part of it. When the court case was over, your father told me he would give me a 5% interest in the Gregory Hills project as a reward, as a bonus, for helping him with money to pay the legal fees of The Oran Park Court Case. He told me he would put my name on the deeds, but that the other partners would have to agree to it. But when I looked at the deeds, my name was not there! The other partners did not accept me. I trusted your father, and now that trust has cost me my life. You see, the problem I have now is that over the past 5 years, I've been borrowing money from the owner of the 'Vesti Newspaper'. I put the loans on Commonwealth Bank letterhead, but I accepted the loans into my private account. I owe him $700,000. I lent his money out to some Croatian guys, without any security, and now they've disappeared. Do you understand...I thought I had security in the Gregory Hills project, but my name is not there on the deeds! Now I don't have the money to pay back the owner of The Vesti Newspaper, and I'm scared I could be put into bankruptcy and I could also go to jail. My solicitor told me that if the owner of the Vesti newspaper ever lodges the loan agreements with the Commonwealth Bank, I would be fucked and it would kill my position. I'm so stressed. I'm in a panic. I'm on the drugs. Michael, I want to play....like a game. All I need from you is a piece of paper saying that K & K owes Milorad Arcaba $550,000 payable in 24 months. I can show this piece of paper to the owner of the Vesti Newspaper and, if he accepts it, this can buy me enough time for me to set up my new real estate business and make enough money to repay him. I'm going to call it something like 'First Class Real Estate'. If it all goes to plan, in 24 months, I'll be a free man. I will organise the other $150,000 I owe him privately. Don't worry, I'll never ask K&K to pay me this $550,000. I'll write another piece of paper to you saying that I, Milorad Arcaba, owe K & K $550,000, less whatever I haven't gotten back from the money I put into the Oran Park Project. I will do this, on the table, in front of my solicitor, so I can't walk out on it.'"
13. Mr Kordek Jnr gave an account of a further communication with the plaintiff on 7 March 2012. In paragraph [37] of his affidavit he stated: "On 7 March 2012, I received a text message from Milorad 'Please call me back'. Exhibited at page 95 of Exhibit MK-1 is a screenshot of the text message from my mobile phone. Rather than calling Milorad myself, I asked my dad to call him, even though he was seriously ill. My dad called Milorad and I overheard their conversation, which my dad put on loudspeaker, to the effect of: Milorad: 'Michael, you need to do something to help me. These people have taken my money and run. About $1.4 million dollars all up. I have the evidence against them, but they're gone. Now my wife has left me and there is a divorce settlement. My daughter asked me for money to buy a book and I told her to ask her mother because I don't have any money.' Dad: 'Milorad, please you can hear from my voice I am in a very bad condition. Can I speak to you later on?' Milorad: 'OK. I will speak to you later.' From about mid-March 2012 until January 2014, I did not discuss Milorad's communications with me with my dad out of concern for my father's health."
14. Mr Kordek Jnr set out conversations he had with the plaintiff concerning payments that had been made to him at [39]. On 17 April 2012 he caused a payment to be made to the plaintiff by direct deposit in the amount of $11,000 and on 20 April 2012 he caused a further payment to be made by direct deposit in the amount of $14,000.
15. Mr Kordek Jnr said that on 31 May 2012 he received a text message from the plaintiff "Please call me ASAP". He then said that he called the plaintiff and they had a conversation to the following effect: "Milorad: 'You must give me that piece of paper for $550,000. People have come around and put a gun to my head.' Me: 'Milorad, could you please write to me an email clearly stating exactly what it is you want me to write on this 'piece of paper'?' Milorad: (Silence) Me: 'Milorad, I'm sorry, but I can't play this game with you. The best I can do is get you back the remaining $100,000 you put into the Oran Park project, even though you lost it when the project failed, but there's no way I'll give you any 'piece of paper' for $550,000. I'm not going to get tangled up in your problems with the Vesti Newspaper and your other creditors. Please stop harassing me over this.' Milorad: 'Forget about that $100,000. It won't help me. It's not good to me. Please, I need that piece of paper!' Me: 'I'm sorry Milorad, I can't help you anymore. You need to sort out your own financial problems.'"
16. On 13 June 2012 Mr Kordek Jnr received another text message from the plaintiff to call him back. In paragraph [44] of his affidavit he said that he called the plaintiff and they had a conversation to the following effect: "Milorad: 'Please give me that piece of paper for $550,000. It's the only thing that will save my life.' Me: 'Look Milorad, you put $195,000 towards the Oran Park project, and lost it. K & K has already given you $95,000 to help you out. I'll give you the remaining $100,000 that you lost, but that's it. I'm not responsible for solving your financial problems for you.' Milorad: 'Don't you understand? That $100,000 won't help me! Just forget about that money OK. The only thing that will save my life is the piece of paper and I can see there's nothing I can say to make you give it to me. Well Michael, I can assure you this is not the last time you've heard from Milorad Arcaba!!!'"
17. Mr Kordek Jnr in his affidavit denied plaintiff's evidence in his affidavit sworn 5 May 2014 to the effect that he said: "I understand the agreement that you made with my father, but do you have any proof in writing?"
18. He further denied that the plaintiff said to him words to the effect "I now have a bad feeling that your father tricked me and you are here asking me for proof in writing and you are just trying to protect your father and K & K". He repeated that the plaintiff's request was for him to exchange financial statements whereby K & K would state that it owed the plaintiff $550,000, payable in 24 months but, in return, the plaintiff would state that he owed K & K $550,000 less the balance outstanding from the monies he advanced for the Oran Park Project: affidavit at 65.
19. In addition to Mr Kordek Jnr's affidavit evidence, the defendant tendered a USB flash drive containing two recorded private conversations, the first between Mr Kordek Junior and the plaintiff on 24 February 2012; and the second between Mr Kordek Senior and the plaintiff on 7 March 2012 respectively. Both conversations were recorded without the consent of the plaintiff.
20. The plaintiff objected to the proposed tender of the recordings and/or the transcripts of the recording upon the basis that they were illegally obtained contrary to the provisions of s 7 of the Surveillance Devices Act 2007. In essence, the defendant sought to tender the recordings so as to demonstrate that the plaintiff had said that he needed help with a serious financial problem and had sought assistance by asking Mr Kordek Junior to have his father write him a piece of paper stating that K&K owes him $550,000 payable in 24 months.
21. I admitted the recordings on 17 March 2016 and gave ex tempore reasons for doing so. The USB flash drive became Exhibit 12 in these proceedings and a transcript of the 24 February 2012 conversation was marked for identification as MFI 2.
22. The first conversation contained on the USB flash drive between Mr Kordek Junior and the plaintiff ran for approximately 52 minutes. The conversation almost exclusively consists of the plaintiff speaking to Mr Kordek Junior without interruptions or dialogue. Throughout the conversation, the plaintiff spoke in a calm tone. However, the conversation was without structure. It is often not clear to what precisely the plaintiff is referring to. I note, without seeking to extract the exact terms or words spoken in every exchange unless otherwise indicated, the following points arising from the recorded conversation: 1. From approximately minute 10 to minute 11, the plaintiff said that Mr Kordek Senior promised to help him with $500,000 to $700,000 because he "deserved it" for what happened with Oran Park; 2. From approximately minute 15 to minute 16, the plaintiff said that he wanted Mr Kordek Senior to pay him $550,000 in 24 months and it will be "like a play game that that money actually I owe to Miloard"; 3. At approximately minute 24, the plaintiff said that he never instituted legal proceedings against Mr Kordek Senior because he "can't do that…because I love him, because I love him and I respect all that relation and he told me, Milorad, you are the first person in my life who just gave me money without a piece of paper, you know that's the trust". I note that this portion of the conversation was not contained in the transcript of the recording (MFI 2); 4. From approximately minute 43 to minute 46, the plaintiff said that he "should be 5% in…Gregory Hills but I am not". Kordek Junior responds stating, "Yeah cause that, I mean, that's the bit that I'm trying to work out like because you're saying that you should have been in that deal, right?" and the plaintiff responds, "Because your father he told me that I'd be there with 5%". Mr Kordek Junior then asks, "And so, what then happened?" and the plaintiff responds, "Nothing after that they just make the deeds…" Mr Kordek Junior clarifies and asks, "So dad said, Milorad you're going to be part of this thing and then, it just didn't, nothing happened, so that's what happened?" The plaintiff said that Mr Kordek Senior said "you'll be there 5%... 6 blocks in 160…because it's like a bonus…because you bring me there, you brought them to me…we are going to make a deal together, you know I really appreciate it". Mr Kordek Junior again sought to clarify and asks, "So how did it work, so there was dad and you ah brought Vic and Ned?" The plaintiff said that he "brought Vic and Ned to your father…for Oran Park…and then after that they continued for this deal". The plaintiff refers to the "gift of 5%" that "did not happen" and that he "connect three people to make the dream come true".
23. The USB flash drive also contained a recorded telephone conversation between Mr Kordek Senior and the plaintiff on 7 March 2012. It appears that the recording does not begin until after the conversation had already commenced. The recording runs for approximately three minutes. In contrast to the previous recorded conversation, the plaintiff sounded to be quite agitated during this telephone call. The plaintiff is recorded as saying, "…I am expecting that we can do something together that you keep your word to help me but it is not happen [sic] what can I do, should I kill myself?" The plaintiff told Mr Kordek Senior that he wants to meet him in person and that he could be at his place in 45 minutes but Mr Kordek Senior declined saying, "It's not the right time, you know, it's not the right time. I ring you, I ring you because I remember you always be my friend, always was, always will be, and only a situation causing this problem, right? And you know, I feel so bad, you got no idea. You know my son he said to me, 'Look Milorad ringing me, you know what can I say, I don't know the situation and I can't say nothing and only you can talk to Arcaba'. I promise him I ring you, I ring you now, but I have to talk to you again afterwards not now". The plaintiff responded, "We have to do something, do you understand? Because it's a huge thing, I can be mentally gone, I can be gone…arrangements and deals between you and me it's gone…" Mr Kordek Senior said that he was ill and could not speak at the moment but that they would speak tomorrow".
24. I was impressed with Mr Kordek Jnr. He appeared to be a straightforward witness and was not shown to have been unreliable. The plaintiff's request to Mr Kordek Jnr was instead directed to obtaining a piece of paper from Mr Kordek Jnr that falsely represented that Mr Kordek Snr and/or the defendant owed him $550,000 in order to mislead creditors. The fact as I find it to be, that the plaintiff sought to enlist Mr Kordek Snr and Mr Kordek Jnr in a proposed deception upon the plaintiff's creditors reveals a preparedness in the plaintiff to resort to unprincipled, indeed dishonest, measures in order to deceive or mislead them.
25. The plaintiff's dishonesty in that respect, together with the making of false statements in his statutory declaration in support of the caveats discussed above indicates the need for extreme caution in undertaking a consideration of his evidence on other matters, in particular his evidence concerning the alleged Deferral Agreement itself.

The Evidence of Other Witnesses in the Plaintiff's Case

Evidence of Dennis Gregory Locke, Marketing Manager, Masterton Homes

1. Mr Locke swore an affidavit on 11 February 2015. He was cross-examined on 16 March 2016 at T 258-276, and re-examined T 276-278.
2. He said he met the plaintiff and Mr Kordek Snr in 2010. He had been introduced to Mr Kordek by Mr David Masterton, the CEO of Masterton Homes in respect of a development site at Middleton Grange.
3. Masterton Homes was involved in the Middleton Grange development providing house and land packages for the development.
4. He said that the plaintiff was provided with an office by Masterton Homes at its Warwick Farm premises which the plaintiff used on weekends to see potential customers for loans.
5. He said that in late 2010 or early 2011 he attended a lunch at the Cucina Restaurant. The plaintiff and Mr Kordek Snr were present as well as Mr Masterton and a Mr Bob Heymel, sales manager for Masterton Homes and four or five other persons. They were all sitting at a long table. Mr Kordek Snr was sitting on the opposite side of the table to his right. The plaintiff was sitting opposite him and was next to Mr Kordek Snr.
6. He said the discussions mainly took place in relation to the Middleton Grange Project. He said he saw the plaintiff and Mr Kordek Snr speaking to each other and he said he heard the words "Gregory Hills".
7. Mr Locke was aware of the proposed development of Gregory Hills. He said that after he heard the words "Gregory Hills" he heard Mr Kordek say to the plaintiff words to the effect of "Don't worry Milorad, you still have those eight blocks at Gregory Hills" at [15].
8. He said the tone of Mr Kordek's voice appeared to be gruff and slightly raised. He said he did not hear the plaintiff saying anything in reply, nor did he hear any further discussions concerning Gregory Hills.
9. Mr Locke, in cross-examination, said that the lunch on 29 April 2011 lasted for about two and a half hours and there were many topics of conversation including in particular the Middleton Grange Development. It was put to him that at the luncheon the Gregory Hills Project was mentioned on more than one occasion. He said that could have been the case.
10. It was put to him in cross-examination that he was mistaken as to his recollection as set out in paragraph [15] of his affidavit. He disagreed. He said he was unaware of the fact that the claim made by the plaintiff was not for eight blocks of land but a claim for $1.6M.
11. He said that he had first been asked to recall the conversation at the luncheon "way after the event": (T 275: 30-35). He later stated that would have been probably three or four months later.

Evidence of Sasha Cubrilo

1. Mr Cubrilo swore an affidavit on 13 February 2015 which was read in the proceedings.
2. He was cross-examined at T 322-345 and re-examined at T 345.
3. Mr Cubrilo stated that he had known the plaintiff for approximately 15 years. He met him through the Bonnyrigg Serbian Club and the Bonnyrigg White Eagles Soccer Club. He also had a business relationship with him involving a refinancing of a property that he bought in West Hoxton some five to six years prior to swearing him affidavit.
4. Mr Cubrilo stated that he recalled some time after Masterton Homes became involved at Middleton Grange he saw the plaintiff and Mr Kordek (an apparent reference to Mr Kordek Snr) at the Bonnyrigg Serbian Club. He said the conversation was in the following words: "Michael said: 'Don't worry, Milorad has 8 blocks in Gregory Hills and you can get one of them under the same deal'. Milorad said: 'Yes I have 8 blocks coming up at Gregory Hills from Michael, and you can have one of them to build on, under the same deal'. I said: 'Great, I can't wait, because as you know I have already sold my home'".
5. Mr Cubrilo said at [7] the reference to "same deal" was that Mr Kordek would allow friends to obtain a block of land in his development and they could build a house and would not have to pay for the land until the house was completed.
6. Mr Cubrilo's evidence was that he was first asked to recall the conversation referred to in him affidavit "probably a year ago": (T 340: 43-45). It was put to him that his account in paragraph [6] of his affidavit was incorrect. He maintained that it was correct.
7. He agreed in cross-examination that he knew that the plaintiff had borrowed money from Mr Cubrilo's parents. When it was put to him that the loan involved an amount of $150,000 he said he was not sure of the exact figure. When he was asked if the plaintiff had explained to him that it would be good for him to give evidence because if he won the case then he would be able to pay his parents back, he responded "No": (T 344: 10-20).

3. The Defendant's Evidentiary Case
4. Reference has already been made above to aspects of Mr Kordek Snr's evidence.
5. As has been noted, Mr Kordek Snr swore two affidavits in the proceedings, the first on 30 September 2014, the second on 20 November 2015. He was cross-examined at T 375-439 and re-examined at 439-441.
6. The cross-examination commenced with background material including Mr Kordek Snr's relationship with Dr Dan and the projects undertaken between them: (T 375-383); the Oran Park Project: (384-391); the plaintiff's introduction of Mr Vic Petrovic to Mr Kordek Snr: (T 394-395); loan monies advanced by the plaintiff: (T 398-400); and events in October and November 2010: (T 401-413).
7. It was put to him in cross-examination that, following the loss of the Oran Park case, K & K had no more money and could not repay monies advanced by the plaintiff. Mr Kordek denied that that was then the position: (T 411: 5-12). As discussed below, this is a matter addressed in the affidavit evidence of Mr Kordek Jnr.
8. Mr Kordek Snr also denied that he told the plaintiff that he was looking at another project at Gledswood Hills with Vic Petrovic and other partners and that it was a big project and that K & K would have a 31% share in it. Mr Kordek Snr denied the factual proposition asserted in the question: T 411: 1‑25. It was put to him: "Q. In late November or thereabouts, you called Milorad and told him you had bad news that K & K lost the court case and the Oran Park Project, the deposit was gone, together with all legal costs, and asked if you would come to see him. A. I did not. Q. You did go to see him, didn't you? A. I did not. Q. You told him then, as well as K & K losing the court case, that you were in a bad situation, the deposit has [sic] gone and the legal costs were so expensive, that K & K has no more money and can't repay you now or in the near future? A. I said no such thing. Q. And he said to you 'Michael, what is the option for me? I gave your company $105,000. What's the solution?' He needed money as well. That's what happened, isn't it? A. No. Q. And you said to him that you were looking at another project at Gledswood Hills with Vic Petrovic and some other partners. It was a big project and K & K would have 31% in the project. A. No, sorry. Q. You say you didn't say that? A. No. Q. And you said you were getting approval for 160 blocks of land and, because of your help, you want to pay back his money, and if he could wait, you would also pay him back with the value of eight blocks of land? A. Not true. The conversation never happened. Q. It was worth it to you then, wasn't it, to give up the very valuable eight blocks of land, because it actually could be the difference between financial ruin and Michael Kordek climbing back on top, regardless of Dr Dan pulling out. A. In respect to his Honour, the answer is not, but I could tell you-- Q. He said 'I'm happy to wait for that kind of deal' didn't he? A. No. No, because we never had the conversation. Why you keep asking me things that never, a conversation that never happened.": (T 411: 1‑36).
9. It was put to him that there was a discussion in which he said he was expecting at least $300,000 per block. He denied that he had said that to the plaintiff: (T 411: 45-50 to T 412: 1-10).
10. It was put that the plaintiff said to him: "'I accept your offer and we'll wait…I also want to be fair to you. It'll cost you $100,000 per block with the DA and all that goes with it, I'm happy to accept $200,000, so K & K can pay me $1.6M on top of the $195,000'. A. No Q. And you said to him 'I'm happy with your proposal, we have a deal'? A. No. Q. And you have solved the problem by making a big offer to a man who himself needed money. That's the case, isn't it? A. No. Q. You then shook hands with him, didn't you? A. How could I shake hands with a person that I didn't meet with? Q. The answer is 'no' sir.": (T 412, 5-20).
11. He agreed that following January 2011 the plaintiff spoke to him and wanted some money at that time: (T 412: 40-50).
12. Mr Kordek Snr was then cross-examined about amounts of money that he paid to the plaintiff: (T 412: 40 to T 413: 30). It was then put to him: "Q. And you have put him on the drip feed to keep him quiet, because you were still holding it together? A. Sir, no; the answer is no." (T 413: 31-38).
13. He was cross-examined as to the Christmas lunch that took place in 2010. It was put to him that the plaintiff spoke with the plaintiff at the lunch on the subject of "eight blocks". Mr Kordek denied that he spoke to him on that subject: (T 413: 45-50).
14. Mr Kordek Snr's evidence was that Mr Locke had "got it all muddled up, that he started dealing with him in March 2011 but he was giving evidence about something that happened in 2010": (T 414: 10-20).
15. He was asked whether he recollected something being said as to the plaintiff getting eight blocks of land at Gregory Hills at the lunch attended by Mr Locke. Mr Kordek Snr said that he absolutely did not say that: (T 414: 15-25). He denied saying "Don't worry, Milorad, you still have those eight blocks at Gregory Hills": (T 415: 45-50).
16. Mr McGrath, for the plaintiff, put to Mr Kordek Snr the evidence given by Mr Cubrilo as having heard him say in the course of the luncheon, "Don't worry, Milorad has eight blocks in Gregory Hills and you can get one of them under the same deal". Mr Kordek Snr said that he had never said that either to Mr Cubrilo, to the plaintiff or to anybody: (T 419: 30-35).
17. It was put to Mr Kordek Snr in cross-examination that his obligation was in fact to give the plaintiff $1.6M. Mr Kordek Snr rejected the proposition: (T 419: 35-40).
18. It was further put to him that he talked about eight blocks because he was expecting at that time to put through the subdivision following the development approval and to receive eight blocks for the plaintiff as part of: "…the sharing out of proceeds in K & K, is that right? A. No. Q. And you thought that eight blocks was what Milorad would cost you. That's right, isn't it? A. No." (T 419: 40-50).
19. He said he did not recall having said anything to Mr Cubrilo about the plaintiff having any interest in Gregory Hills: (T 420: 10-20).
20. He also denied in early 2011 speaking to the plaintiff at the Bonnyrigg Sports Club concerning a claim to interest or payment of money: (T 420: 15-30).
21. It was put to Mr Kordek Snr that the plaintiff had said to him that he knew he wasn't entitled to his $1.6M "yet" but that the plaintiff owed $700,000 to Mr and Mrs Miller and to "Peta". Any such conversation was denied by Mr Kordek Snr: (T 420: 30-40). It was then put that Mr Kordek Snr had said to the plaintiff words to the effect that: "…you couldn't do that (a reference to paying him $1.6M at that stage) but that you might be able to manage half a million or $550,000". Mr Kordek Snr responded "I never said that, sir": (T 421: 4‑5).
22. It was then put that the plaintiff asked him for a piece of paper but Mr Kordek Snr responded that he did not ask for a piece of paper at that point in time. At a different point in time he said he did, later in the year 2011 at the end of the year going into January 2012, but at the time suggested in question he had not asked him for a piece of paper. He said that the plaintiff commenced to tell him his "real woes" and "all his problems": (T 421: 5-20).
23. Mr Kordek Snr agreed that he plaintiff started asking for help in January 2011. The reference to the year 2011 it appears, was intended to have been a reference to January 2012: see (T 421).
24. Mr Kordek Snr was again cross-examined on discussions said to have taken place in approximately late November 2010 between the plaintiff and himself. It was put to him that he and the plaintiff had said that he had reached an agreement with the plaintiff as to $1.6M. Mr Kordek Snr rejected the proposition. He said there had been no such discussion: (T 422: 45 to T 423: 5).
25. It was put to Mr Kordek Snr that at the meeting in approximately late November 2010 Mr Kordek Snr had said to the plaintiff "for your comfort I will tell my business partners to add your name to the documents". Mr Kordek Snr denied saying that: (T 423: 20-26).
26. He also rejected the proposition that the plaintiff had said to him at this time that he would appreciate having his name on the documents as he may need to use his share, the $1.6M, as security in any future financial transaction. (T 423: 25-35).
27. He rejected the proposition that there was a request made by the plaintiff in early January (the question implied 2011) to have proof of his "involvement in Gledswood Hills" and that he would be getting $1.6M from the project or that he said that he would "…do something about that". Mr Kordek Snr said that the conversation did not occur: (T 423: 35-45)
28. Mr Kordek Snr rejected the proposition that the plaintiff came to him and said that Mr Cavric had put on a whiteboard the shares held in the Gledswood Hills Project but that his name was not included in the list and that Mr Cavric told the plaintiff to speak to Mr Kordek Snr: (T 426: 40-50).
29. Mr Kordek Snr said that he had had "hundreds of conversations" with the plaintiff in or about February 2011 but that "…never once did he mention anything about being put on any deeds": (T 428: 1-5).
30. Mr Kordek Snr also rejected the proposition that in February 2011: "…it would look terrible to Masterton Homes and others involved in the Gregory Hills Project if you appeared to be documenting in any way relatively small loans from Milorad Arcaba." (T 429: 15-20).
31. Mr Kordek Snr responded that it was of no consequence to him but that he had recorded in his books the loans that had been made by the plaintiff.
32. He again rejected the proposition that the plaintiff was seeking "a piece of paper" in respect of any interest in the Gledswood Hills Project: (T 429: 30-50).
33. It was put to Mr Kordek Snr that he had told the plaintiff that he was included as part of the 31% share K & K had in the Gledswood Hills Project. Mr Kordek Snr rejected that proposition: (T 430: 15-20). He also rejected that he said to the plaintiff that he should not worry about having the alleged interest in the 31% share documented. He denied that the plaintiff had told him that he trusted him and that his word was enough: (T 430: 20-35).
34. Mr Kordek Snr was then cross-examined in specific aspects of his own affidavit evidence at 434-439.
35. I closely observed Mr Kordek Snr during the course of his oral evidence. He, on a number of occasions, answered questions put to him in cross-examination with lengthy narrative statements which required me to intervene and direct him to confine himself to answering the questions put to him. At times he resumed his tendency to make long narrative statements requiring further directions being given to him. I have, of course, given close consideration to the question as to whether or not Mr Kordek Snr was deliberately obfuscating when at times he gave such lengthy answers. In that respect, I gained the clear impression that Mr Kordek Snr became excitable or emotional rather than setting out to obfuscate or deceive. I do not consider that his at times excitable and lengthy statements support a conclusion adverse to his credibility in terms of his truthfulness. I have rather assessed his evidence upon the substantive matters addressed in his affidavit evidence and oral evidence in evaluating his credibility in terms of both reliability and truthfulness. Overall I consider that he should be accepted as a credible witness.

Plaintiff's Submissions

1. The plaintiff relied upon written submissions dated 4 April 2016. These were supplemented with oral submissions at T 481-495. The plaintiff's written submissions helpfully set out the argument and contentions advanced on behalf of the plaintiff.
2. The plaintiff's case on the Amended Statement of Claim filed in Court on 18 March 2016 was based upon an alleged oral agreement which was said to have been subject to an implied term as to the time when the amount of $1,600,000 would become payable (i.e. on finalisation of the Gledswood Hills Project or the sale or other finalisation of the defendant's interest in that project). The plaintiff had alleged that the oral contract was repudiated by the defendant, such repudiation having been accepted by the plaintiff.
3. The legal principles that guide a determination as to whether or not parties intended to enter into a contract and, if so, on what terms, were addressed in the plaintiff's written submissions.
4. It was submitted for the plaintiff that the required objective determination as to the making of a contract involves a consideration, not only of the language used, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction, but not the participant's subjective beliefs: at [11].
5. Reference was made in the submissions to authority for the proposition that it is both appropriate and necessary to have regard to the commercial circumstances surrounding the exchange of the relevant communications and, in particular, to the subject matter of those communications: Allen v Carbone (1975) 132 CLR 528 at 531-2; [1975] HCA 14.
6. In the present case, the "key areas" were stated to include the surrounding circumstances at the material time and the purpose and the object of the transaction objectively assessed in the light of such circumstances.
7. Reliance was placed upon alleged "admissions" made by Mr Kordek Snr: at [13]. I will return to this aspect below.
8. The plaintiff's written submissions set out the background and surrounding circumstances in November and December 2010. I do not here reproduce those submissions, although I have carefully read and considered the matters set out in those paragraphs: at [19]-[22].
9. The submissions addressed the history of the four loans, dates and amounts, and circumstances in which each of the loans were made by the plaintiff: at [23]-[29]. Reference was also made to the evidence concerning the Oran Park Project, ultimately sold to a third party on 16 November 2010.
10. The plaintiff's written submissions referred to the evidence of Mr Kordek Jnr in his two affidavits (CB 1 at 128-144; 144 - with exhibits at 145 to 289; CB 2 at 279-600; and CB 3 at 601-632). Reference was made to Mr Kordek Jnr's evidence that the first that he had heard of an oral agreement whereby K & K (the defendant) would pay $1,600,000 from proceeds of which 31% interest in the Gledswood Hills Project was the initial letter from Stojanovic Solicitors dated 29 August 2013.
11. The plaintiff's submissions contended that Mr Kordek Jnr did not mention that he had made a recording of a conversations between the plaintiff and his father but that he had given an account of the conversation between him and the plaintiff "…that was more coherent and less favourable to Milorad Arcaba than the actual recording of part of that conversation" at [35].
12. At [36]-[39] submissions were made on behalf of the plaintiff as to Mr Kordek Jnr's evidence in the defendant's case which was said to be evidence directed at supporting the financial position of the defendant at the time of the alleged making of the Deferral Agreement. That evidence, it was noted, was directed to establishing that the defendant was sufficiently secure at that time, the defendant's case being that having regard to such evidence, it was unlikely that he would have entered into an agreement on such generous terms: at [36].
13. However, it was submitted that Mr Kordek Jnr admitted in cross-examination that he had not prepared the accounts of the defendant and was unable to explain why the Oran Park debt of some $5,500,000 did not appear as a liability in those accounts. It was also submitted that he did not understand the balance sheet of 30 June 2010 that was attached to his affidavit. Reference was made to a graph that had been produced by Mr Kordek Jnr as to "available funds" and relied upon this in his evidence to say that the defendant did have available funds to repay the $100,000 balance due to the plaintiff at the time the plaintiff lodged the caveats. The graph, it was noted, covered the relevant period and it was submitted it supported the plaintiff's argument that the defendant had very little cash at the relevant time.
14. It was submitted that Mr Kordek Jnr confirmed that the income of the defendant in the year ended 30 June 2009 was a little over $18,000 and in the year ended 30 June 2010 a little over $19,000. Mr Kordek had claimed that the difficulty concerning the defendant's funds being tied up in the Raceview and Middle Grange projects at the relevant time did not matter, as the defendant had lent more than $2 million to Kordan (Australia). The submission for the plaintiff, however, was that that this money had been spent on acquiring the Raceview property in Queensland and would not have been available: at [38].
15. It was submitted that Mr Kordek Jnr's evidence did not assist the defendant: at [39].
16. In relation to the position of the plaintiff as at the time of the alleged making of the Deferral Agreement, it was acknowledged that he also needed money in the second half of November and December 2010: at [40]. Reference was made to the plaintiff's affidavit evidence which included him saying to Mr Kordek Snr "What is the solution, I need money as well": at [28]-[29]. The cross-examination, it was submitted, did not challenge this but simply pressed the plaintiff to confirm it and that after some "confused exchanges" the plaintiff provided the confirmation.
17. It was submitted that the circumstances of the parties in or about November and December 2010 were such that each of them had an urgent need for money: at [41].
18. It was noted that the plaintiff's work brought him into contact with a lot of people in the property industry in south western Sydney and that the CBA and Masterton Homes formed a "major part of his plans for Gledswood Hills". Each of those entities had contact with him and it was submitted that it would have been "…a very difficult situation for the defendant if Milorad Arcaba had taken legal advice and issued a statutory demand to wind it up": at [42].
19. It was noted that Mr Kordek Snr stated "I can't sound like a bum with no money": CB3 at 723. The submission proceeded that, objectively, there was every reason for Mr Kordek Snr to do whatever he could to persuade the plaintiff to wait for his money: at [43].
20. By contrast, the plaintiff's submissions continued, these circumstances are inconsistent with Mr Kordek Snr's evidence in which he said he offered to pay $200,000 to Mr Arcaba on 13 November 2010 (CB2 at 302 [63]-[65]) and having received a response on 14 November 2010 that rather than returning the funds, the plaintiff wanted to give the defendant another $800,000: (CB2 at 302 [67]).
21. A number of submissions were made in relation to "the Deferral Agreement": at [45]-[58]. They include the following: 1. That there was a direct conflict of evidence between the plaintiff and Mr Kordek Snr as to whether the Deferral Agreement conversation occurred. 2. The onus was on the plaintiff to establish that the conversation occurred and to establish its terms: Watson v Foxman, supra, at 318 per McLelland CJ in Eq. 3. Resolution of conflicting evidence in cases of this kind should be undertaken in accordance with the approach in Polon v Dorian and Ors (2014) 102 ACSR 1; [2014] NSWSC 571. 4. Following the approach in Polon, the Court would need to carefully consider the reliability of the evidence given by the respective witnesses in terms of both the evidence itself and the manner in which it was given. 5. In following that approach, the Court would bear in mind inherent risks involved in making findings of fact based on the demeanour of witnesses.
22. Reliance was placed upon the affidavit evidence "…of the preliminary telephone conversation and of the conversation in late November or early December 2010 in which the Deferral Agreement was made": at [47]. The alleged content of the conversation was extracted into paragraph [48] of the plaintiff's written submissions.
23. I have, of course, carefully read all of the submissions in that respect but do not reproduce the full terms of them into this judgment. In relation to the direct conflict of evidence between the plaintiff and Mr Kordek Snr as to whether there was a Deferral Agreement conversation, it was acknowledged that the onus of proof in that respect of course, fell upon the plaintiff. In that respect reference was made to the observations in Watson v Foxman, supra, at 318. That, of course, was a case involving the application of principles in the assessment of evidence in a case involving civil proceedings in which allegations were made of misleading or deceptive conduct within the meaning of s 52 of the Trade Practices Act 1974 (Cth).
24. However, that said, the approach in Polon in the assessment of spoken words and whether they were misleading are, I accept, of assistance in the resolution of the conflict as to the central facts in the present case. In Watson v Foxman McClelland CJ in Eq cautioned as to the relatively subtle influences that can flow from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Additionally, as his Honour noted, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the process of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious considerations of what should have been said or could have been said. As McClelland CJ in Eq in Watson v Foxman stated: "…all too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience": at 319.
25. I accept, of course, the submissions made at [46] of the plaintiff's written submissions as to the need for careful consideration to be given to the reliability of evidence given by the respective witnesses, bearing in mind the inherent risks involved in making findings of fact based on demeanour of witnesses, that is, the danger of too readily drawing conclusions about truthfulness and reliability based solely or mainly upon the appearance of witnesses as they give evidence.
26. In the plaintiff's written submissions a number of matters in relation to the reliability of the plaintiff were identified, in that respect in particular, in [49]-[58] of the defendant's written submissions.
27. The matters to be taken into account were said to include the following: 1. That the plaintiff was born in Croatia in 1964 and came to Australia at the age of 31. 2. That he was cross-examined for some three-and-a-half days and that over that time it became evident that English was his second language and that his oral comprehension and speaking skills were imperfect. That, it was said, sometimes resulted in an unusual choice of words and a verbal style that involved some circumlocution. 3. Occasionally the plaintiff used the wrong word, but it usually became clear what he intended to say shortly afterwards. 4. He answered questions asked of him in a responsible way and cooperated in the court process. 5. He made admissions and concessions as appropriate. 6. He was forthright concerning aspects of his behaviour that did not show him in a good light, in particular, his decision to lodge caveats when he knew there was no proper basis for doing so. 7. He was steadfast in his recollection of events. 8. In cross-examination he recalled relevant matters that had not been the subject of his affidavit evidence. This included the Bonnyrigg Sports Club conversation with Mr Kordek Snr, in particular, his alleged discussion of the events that would cause the $1.6M to become due.
28. The cross-examination on the lastmentioned matters did not reveal any meaningful inconsistences: at [49]-[50].
29. It was noted that the critical conversation occupied very little of the plaintiff's cross-examination and that on the second day there was cross-examination on the pleading of the Statement of Claim in relation to the Deferral Agreement and that this appeared to be the focus of the questions: at [51].
30. The plaintiff's account of the "critical" conversation between him and Mr Kordek Snr is said to have included reference by Mr Kordek Snr to his intention to carry out a project at Gledswood Hills and yet the name Gledswood Hills was adopted later in time (the area had previously been known as Gregory Hills and was changed to Gledswood Hills at the end of 2011, i.e. well after the alleged critical conversation). In the plaintiff's submissions, this alleged discrepancy was said to be explicable by virtue of the fact that the name Gledswood had been associated with the land and the area since the 1880s: at [53].
31. The written submissions frankly and properly conceded that there were aspects of the plaintiff's evidence which had not been included in his affidavit evidence: see, for example, at [50].
32. Reference was made to the plaintiff's cross-examination at [54] of the plaintiff's written submissions. The following matters were noted: 1. It was put to the plaintiff in cross-examination that Mr Kordek Snr did not in fact consider that each of the blocks in the proposed development was worth $300,000 each as the plaintiff suggested. 2. It was put in submissions, however, that it is difficult to see how this could be relevant. It was also contended for the plaintiff that there was no evidence to support a lower value than $300,000. (As discussed below, the defendant relied upon an email from Mr Kordek Snr dated 17 November 2010 in which he indicated that the sale value fee lot was $240,000). 3. As to the alleged conversation including the plaintiff's statement that the cost of development per block would have been $100,000 it was put to the plaintiff in cross-examination that this was not an accurate figure. In submissions it was put that the figure was an estimate which was advanced by the plaintiff said to have been based on costs of another development. The premise of the cross-examination, it was submitted for the plaintiff, could not rationally affect the probabilities of the conversation occurring: at [55].
33. As to the event upon which payment under the Deferral Agreement would fall due, it was noted that the plaintiff's evidence that he had in fact discussed that aspect with Mr Kordek Snr was evidence that the plaintiff had only given in cross-examination. It was noted that the cross-examiner had pressed the plaintiff on why the evidence as to the timing or event that would trigger the payment of the $1.6M had not been referred to in his affidavit evidence: at [56]. The plaintiff did not give any direct explanation for the omission. The submission for the plaintiff in this respect was: "At T145 L40 to T146 L11 the cross-examiner pressed the witness on why this material was not in the affidavit and the witness repeated that it nevertheless occurred. This is direct evidence of the term as to the time of payment of the $1.6M."
34. It was submitted that the cross-examination of the plaintiff on the Deferral Agreement conversation would not lead the Court to doubt his evidence: at [57].
35. Specific submissions were made in respect of the evidence of Mr Locke: at [59]-[67] and of Mr Cubrilo at [68]-[73]. I do not here reproduce all of the submissions contained in those paragraphs. I have of course read and considered all of the material in those paragraphs.
36. In summary, the submission was that the Court would accept the evidence of both Mr Locke and Mr Cubrilo in relation to statements they each claimed were heard by them. The submission made in relation to the evidence of these two witnesses was in the following terms: "It is submitted that the evidence of Sasha Cubrilo should be accepted. It provides a reason for preferring the account of Milorad Arcaba concerning the making of the Deferral Agreement over the claim by Michael Kordek Senior that nothing occurred. Neither what was heard by Dennis Locke or by Sasha Cubrilo definitely supports the Deferral Agreement in terms. Nevertheless the references that they did hear suggest strongly that there was an agreement of some kind under which Michael Kordek Senior was to provide 8 blocks from the Gledswood Hills development. By contrast, the two recorded conversations are consistent with Milorad Arcaba's account. In his conversation with Michael Kordek Senior there were uncontradicted references to a deal between them and in the conversation between Milorad Arcaba and Michael Kordek Junior there were a number of references to the 5% formula and reference to $1.6M.": at [72]-[73].
37. It was submitted that Mr Locke was cross-examined on matters of marginal, if any, relevance and that the cross-examiner put to him that he was mistaken and did not hear the words that he said he heard spoken by Mr Kordek Snr at the luncheon (i.e. "Don't worry Milorad, you still have those eight blocks at Gregory Hills"). Mr Locke disagreed. It was submitted that no basis for a formal challenge to Mr Locke's evidence was advanced in the cross-examination.
38. It was observed that no suggestion was made to Mr Locke that that he was other than a partial witness: at [65]. It was contended that the "admission" attested to by Mr Locke is utterly inconsistent with Mr Kordek Snr's explanation that nothing happened. It was submitted that the "admission" clearly pointed to at least some aspects of the Deferral Agreement having occurred. It was argued that there was no other reasonable explanation for what Mr Kordek Snr said.
39. It was submitted that the evidence of Mr Locke should be accepted in its entirety. It was further submitted that based on this evidence, the Court should prefer the plaintiff's account of the Deferral Agreement conversation over Mr Kordek Snr's claim that there had been no such conversation: at [67].
40. It was submitted for the plaintiff that Mr Cubrilo was another independent witness who heard a similar "admission" made by Mr Kordek Snr at the Bonnyrigg Sports Club that was inconsistent with Mr Kordek Snr's claims: at [68].
41. It was noted although that Mr Cubrilo was cross-examined at some length about the Middleton Grange Project the relevance of this line of questioning was unclear. Mr Cubrilo stated that the reference to "the same deal" was based upon an arrangement Mr Kordek Snr had entered into with a Mr Veljovic some 25 years before.
42. It was submitted that the alleged statement made by Mr Kordek Snr as to the plaintiff having eight blocks in Gregory Hills was inconsistent with Mr Kordek Snr's claim that the Deferral Agreement never happened. It was submitted that Mr Cubrilo had good reason for asking and noting what was said by Mr Kordek Snr at the time, as he was interested in obtaining a block of land in Gregory Hills on favourable terms.
43. It was submitted that the evidence of Mr Cubrilo should be accepted. It provided a reason for preferring the account of the plaintiff concerning the making of the Deferral Agreement over the claim by Mr Kordek Snr that nothing occurred: Plaintiff's Written Submissions at [72].
44. In relation to Mr Kordek Snr's evidence, it was contended that he refused to engage with the process of cross-examination and attempted to lecture and chide rather than answer questions. When directed to answer questions directly, he apologised but did not change his approach: at [74].
45. In relation to the occasion about which Mr Locke gave evidence, Mr Kordek Snr stated that Mr Locke had "got it all muddled up". However, it was stated that he admitted that he talked about Gregory Hills but denied that he had referred to eight blocks: at [75]. It was noted that Mr Kordek Snr also denied that he said anything about eight blocks in front of Mr Cubrilo. It was submitted there does not appear to be any reasonable explanation as to why Mr Cubrilo might say such a thing if it were not true. It was submitted that Mr Kordek Snr's explanations are not sufficient to explain the evidence of Mr Locke and Mr Cubrilo.
46. The submission was that the Court would make findings of fact favourable to the plaintiff in terms set out at [77].
47. In terms of legal analysis a number of submissions were made at [79]-[89]. In summary it was submitted that the Court should find that the alleged Deferral Agreement conversation occurred and gave rise to a binding contract between the plaintiff and the defendant. To that end, it was submitted all the elements of a conventional contract were present: at [80].
48. It was additionally submitted that the terms of the loan were sufficiently certain to be enforceable. There was consideration provided on both sides (the defendant promising to pay $1,600,000 and the plaintiff agreeing to defer repayment of monies due to him) and the alleged agreement was a business contract which was given effect to, in part, by the parties. It was submitted that it is clear that there was an objective intention to be bound by the agreement.
49. Finally, it was submitted that the contract was subject of an anticipatory breach of a repudiatory nature which was accepted by the plaintiff.
50. Submissions were also made in relation to particular principles that apply in determining the assessment of damages at the time for due performance of the alleged agreement: at [87]-[89].

Defendant's Written Submissions

1. The defendant relied upon two sets of written submissions. The first was the Outline of the Defendant's Closing Submissions. The second was the Defendant's Response to Points Arising out of the Plaintiff's Written Submissions of 4 April 2016.
2. In the first set of written submissions a number of matters were raised as to the pleaded case on the Deferral Agreement at [5]-[6]. It was noted that the alleged genesis of the agreement was the defendant's loss in the Oran Park litigation. In that respect it was said that as a result of the loss, the plaintiff asserted that the defendant could not repay the $195,000 that he, the plaintiff, had advanced in the period 4 August to 18 November 2010.
3. The central allegation relied upon was reproduced at [5.3] of the defendant's written submissions.
4. It was noted at [5.4] that the plaintiff pleaded by an amended term of the alleged Agreement, that the defendant would pay the amount of $1.6M when the Gledswood Hills Project was finalised and/or the defendant's interest in the project was finalised or sold.
5. It was noted that the plaintiff's case had been that, though the time and circumstances triggering the payment of the $1.6M were never discussed, such a term was to be implied.
6. However, although not referred to in his affidavits, the plaintiff gave oral evidence in cross-examination in which he contended that the events upon which payment of the $1.6M was payable were in fact discussed between Mr Kordek Snr and himself when the Deferral Agreement was made. In that respect, as earlier noted, the plaintiff's written submissions at [56] adverted to what was contended amounted to "direct evidence" of the term as to the time of payment of the $1.6M.
7. The fact that such a term was not included in either of the plaintiff's affidavits, and was not the subject of any written record, it was submitted for the defendant, raises the question as to whether or not ultimately the evidence supports an express or an implied term as alleged (in the alternative) in the Amended Statement of Claim.
8. The defendant relied upon the contractual principle that subsequent conduct of a party can be examined to assist in the resolution of the question as to whether a contract was made at an earlier date. A number of decisions were cited in aid of the submission including the High Court's decision in Allen v Carbone, supra, at 532-3.
9. The defendant submitted that when the conduct of the plaintiff is examined in the present case it is clear that: 1. Other than in these proceedings, at no stage had the plaintiff asserted the existence of the contractual terms on which he now relies. 2. Other than in these proceedings, at no stage had the plaintiff called for performance of the contract terms on which he relies: at [20.1] and [20.2]
10. The reason or explanation for the absence of such conduct by the plaintiff, it was submitted, is the fact that no Deferral Agreement had been entered into.
11. The defendant submitted that, as the plaintiff relied upon conversations to establish the contract, there is a need to establish the alleged Deferral Agreement with a degree of precision that enables the Court to be satisfied as to the existence of an Agreement as claimed and as to the terms of such agreement: at [23].
12. It was submitted that on the plaintiff's own evidence, the Court could not be satisfied of the conversations relied upon to establish the Deferral Agreement.
13. The defendant contended that the evidence establishes that the plaintiff was not a witness of truth. Reliance was placed upon evidence directly concerning the Deferral Agreement to support this submission as well as evidence in relation to what were termed the less immediate matters set out in Schedule 1 to the defendant's written submissions.
14. The defendant, in particular, also relied upon the absence of any contemporaneous corroborating documents or other witness evidence that makes good the terms of the alleged Deferral Agreement. In the absence of such evidence it was submitted that the plaintiff's evidence should be rejected and on that basis, his case fails: at [27].
15. It was submitted that in a case such as this, the plaintiff's credibility is central. Both logic and objective facts, it was stated, were inconsistent with the existence of the agreement for which the plaintiff contends.
16. It was the defendant's submission that the plaintiff had not discharged the onus of proof in respect of the alleged Deferral Agreement. In support the defendant relied upon evidence in various segments or categories.

Amendments to Plaintiff's pleaded case

1. At the outset it was noted that the defendant had made clear that it came to meet the pleaded case and no other case: (T 6, 34-35; T 7, 13-17; and T 7, 36-37). However, the plaintiff sought to amend his pleaded case. His case in that respect was as follows: 1. The alleged genesis of the agreement was, as noted above, the defendant's loss in the Oran Park litigation. 2. As a result of that loss, the plaintiff alleges that the defendant could not repay the $195,000 that had been advanced by the plaintiff by way of four loans in the period 4 August to 18 November 2010. The plaintiff's case was that it was the defendant's inability to repay the $195,000 that resulted in the parties agreeing to a new bargain. 3. The plaintiff alleged that the defendant, through Mr Kordek Snr, agreed, in return for the plaintiff not seeking immediate repayment of the first, second, third and fourth loan advances, that he would pay "…the sum of $1,600,000 from the sale of properties by [K & K] or from its interest in a consortium formed to develop land at Gledswood Hills in addition to the sum of $195,000 borrowed." 4. That it was an implied term that the defendant would pay the amount of $1.6M when the Gledswood Hills Project was finalised and/or the defendant's interest in the project was finalised or sold: Amended Statement of Claim at [14A].
2. The defendant's submission was that the plaintiff had changed his case from being a wholly oral express contract, to one which was partly express and partly implied. It was submitted that this change in the pleaded case was significant because the verified pleadings of the plaintiff asserted that the circumstances triggering the payment of the $1.6M had never been discussed and was to be implied. The submission in this respect was: "…This belated amendment changes the agreement on which Mr Arcaba sues in an important respect, thereby undermining Mr Arcaba's case and his credibility.": Closing Submissions at [6].
3. The defendant's closing submissions addressed accepted principles in determining a claim based upon an alleged express oral agreement where there exists no contemporaneous documentary evidence in relation to the alleged agreement.
4. In that respect, the following were noted:

(1) Post alleged contract conduct.

1. The relevant case law authorities establish that subsequent conduct can be examined to assist in the resolution as to whether a contract was made at an earlier date. The "conduct" includes communications between the parties in dispute: the relevant authorities were referred to at [19] of the defendant's closing written submissions.
2. In the application of those principles in the present case, it was noted: 1. Other than in these proceedings, at no stage has the plaintiff asserted the contract terms on which he relies. 2. Other than in these proceedings, at no stage has the plaintiff called for performance of the contract terms on which he relies.
3. It was submitted that the reason for this is because the parties did not enter into the Deferral Agreement. It was further submitted indeed that the conduct and communications between the parties are wholly inconsistent with the existence of any agreement.

(2) The words spoken and the degree of required persuasion.

1. In this respect, conversations relied upon by the plaintiff to support his claim in contract set out in his affidavit evidence, it was submitted, did not occur. It was submitted that Mr Kordek Snr's evidence was not shaken on that point.
2. Given that the contract claim in the proceedings is based on conversations alleged to have occurred, the plaintiff, it was noted, was required to prove the words that were spoken in order to establish the Deferral Agreement and to do so with a degree of precision such that the Court can be satisfied as to both the existence and the terms of the Agreement to the civil standard.
3. Reliance was placed upon what was termed in the defendant's submissions "Mr Arcaba's linguistic manner and style" when considered in the context of the formal setting of the airing of the proceedings as well as, as recorded in the conversation of 24 February 2012 between him and Mr Kordek Jnr (an informal setting) makes clear, so it was argued, that Mr Arcaba did not communicate in the manner that is set out and is recorded at CB 1, 27-29. It was submitted that the language, and manner and tone as to the "critical conversations" and others in the affidavits, "are not those of Mr Arcaba": at [24].
4. Accordingly, it was submitted that on Mr Arcaba's own evidence, the Court could not be satisfied of the conversations relied upon by him to establish the Deferral Agreement. In addition, it was to be taken into account Mr Kordek Snr's denial that such conversations ever took place.

(3) Witness credit and objective evidence.

1. It was submitted that the Court would need to consider the credit of the parties' witnesses, in particular that of the plaintiff who carries the evidentiary burden. The submission was that the overwhelming evidence is that the plaintiff is not a witness of truth: at [26]. It was said, as noted above, that this was clear by evidence which bears directly on the Deferral Agreement, as well as evidence in relation to what were termed "less immediate matters" (referred to in Schedule 1 to the defendant's submissions).
2. It was accepted that truthfulness and reliability is not to be assessed solely from the demeanour of witnesses. Contemporaneous objective facts and "apparent logical events" it was submitted has just as important a role to play: at [28]. It was submitted in this case that both logic and the objective facts were inconsistent with the existence of the agreement for which the plaintiff contends.

(4) The Deferral Agreement.

1. The submission was that there was no agreement between the plaintiff and the defendant whereby the defendant granted or conferred upon the plaintiff an entitlement to $1.6M, whether on the pleaded terms or otherwise: at [30].
2. It was submitted that an analysis of the evidence establishes that the plaintiff's evidence produces no less than seven very different accounts of the agreement. Five of these accounts, it was said, arise out of the plaintiff's witness evidence, documents he created or the recorded conversation of 24 February 2012. A further two accounts are the accounts given by the witnesses Messrs Cubrilo and Locke. The evidence of the latter two witnesses it was said was led to corroborate the plaintiff's evidence but it was submitted that the evidence did not support the plaintiff's case: at [31].
3. The defendant's written submissions then identified the different versions or accounts of the alleged Deferral Agreement based on the evidence in the plaintiff's case.
4. Whilst I do not here set out the detailed points in relation to what was said to be versions 1 to 7 (at [32]-[76.4]) of the Outline of the Defendant's Closing Submissions, I have of course carefully considered the submissions and will refer to many of the matters therein discussed in the Consideration section of this judgment. That said, there are specific matters which the defendant identifies in paragraph [32] of the Outline of the Defendant's Closing Submissions relate to particular matters said to be objective facts that are inconsistent with the alleged oral agreement relied upon by the plaintiff. They include the following: 1. The plaintiff's account of the alleged conversation in late November 2010 in which he stated that Mr Kordek Snr referred to the property the subject of the proposed development as Gledswood Hills Project but that suburb was not assigned that name until December 2011. 2. Evidence that is inconsistent with Mr Kordek Snr having referred in the alleged Deferral Agreement conversation in November 2010 as alleged by the plaintiff to the development involving 160 blocks. The objective evidence (referred to below) established that Mr Kordek Snr had anticipated the development of 158 blocks. 3. The evidence that was inconsistent with Mr Kordek Snr having stated that the defendant could not repay, then or at any time in the near future, the loan advances made by the plaintiff. 4. The alleged statement of Mr Kordek Snr in which the plaintiff claims that the defendant promised that if he could wait, the defendant would repay with the value of eight blocks of land. The objective evidence as to the plaintiff's financial condition at that time makes it unlikely that he could wait. 5. The alleged statement of Mr Kordek Snr that he is expecting at least $300,000 per block was inconsistent with the evidence which indicates that Mr Kordek Snr was expecting $240,000 per block. 6. The objective evidence that establishes that Mr Kordek Snr's assessment of Development Application and associated costs would exceed $100,000, being the amount the plaintiff alleged was discussed with Mr Kordek Snr. 7. The objective evidence against the proposition that Mr Kordek Snr promised to add the plaintiff to the "documents" or "the deeds" given the plaintiff's experience/expertise in the drafting of loan documents and drafting mortgage securities. Had the conversation taken place, the plaintiff was well placed to take security for his position but did not. Additionally, in written communications between Mr Kordek Snr and his partners and prospective partners, the plaintiff was not copied into such communications. 8. If, as the plaintiff claimed, he explained to Mr Kordek that he might use his "share" (the $1.6M) as security in future financial transactions, then his taking of real estate security would have caused him to have documented his interest or "share" as a form of security but he did not do so.
5. In addition to the above matters, the defendant relied upon the inconsistency in the plaintiff's pleaded case in which initially he sought to allege in paragraph 14A to the Amended Statement of Claim, that the basis for the timing and circumstances of payment were not discussed but were to be implied. However, in cross-examination he claimed that the timing issue was discussed: at [33] and [34].
6. Finally in relation to the submissions made as to "Version 1" set out in [32] of the closing submissions, it was noted that the plaintiff gave an account of a "whiteboard" conversation that he had with Mr Cavric in February 2011. However, Mr Cavric, who was subpoenaed to give evidence, was not called to give evidence and an adverse inference should be drawn against the plaintiff that Mr Cavric's evidence would not assist him: at [36].
7. Submissions were also made on behalf of the defendant in relation to what was termed "Version 2: The recorded meeting between Mr Kordek Jnr and Mr Arcaba…" It was contended that the "extraordinary demands" made by the plaintiff upon Mr Kordek Jnr described or referred to his alleged agreement with the defendant in six ways during the course of one lengthy conversation. It is said that it was significant that during the conversation the plaintiff did not assert the agreement on which he sues, nor called for its performance: at [38]. These aspects will be dealt with below.
8. Included in the claimed six iterations of the alleged Agreement when the plaintiff met with Mr Kordek Jnr in January 2012 (paragraphs [40]-[54] of the Defendant's Closing Submissions) reference was made to a number of matters that will be discussed in the 'Consideration' below.
9. In relation to what was termed "Version 3: The caveatable interest…" the defendant's submission was that the lodging of the caveats by the plaintiff establishes that he was "…an untruthful witness or one who is reckless with his account of the salient events; either way, this Court ought not to accept his evidence": at [61].
10. It was submitted that the caveats were: "…the product of two knowingly false statutory declarations for which Mr Arcaba received s 128 certificates. When confronted with these false statutory declarations, Mr Arcaba refused to concede the position (T 189: 6-48). The false statutory declarations in these caveats identifying Mr Arcaba identify Mr Arcaba as a person prepared to do and say anything, provided it suits him. He cannot be believed on his oath.": [59].
11. It was also submitted that the caveats bear no resemblance to the Deferral Agreement on which the plaintiff sues in these proceedings: Closing Submissions at [60].
12. The defendant submitted that in the correspondence written by the plaintiff in his communications with CBP Lawyers over the caveats, nothing was mentioned by the plaintiff in his letter about an interest (monetary or in realty) in the Gledwood Hills Project. It was submitted that the letter does not support the plaintiff's case. It was noted that when confronted with this during cross-examination, the plaintiff could not explain why there had been no assertion in the letter of the terms of the Deferral Agreement or their non-performance: at [63].
13. In relation to what was termed "Version 6: The Cubrilo Account," there was a reference to an alleged statement attributed to Mr Kordek Snr to the effect that the plaintiff had an interest in eight lots (distinguished from the claimed value of eight lots). It was submitted on behalf of the defendant that what Mr Kordek Snr is asserted to have said is open to a number of interpretations including: 1. That he was offering Mr Cubrilo one of the plaintiff's blocks. This was said to be unlikely as the lots were not Mr Kordek Snr's to deal with. 2. That Mr Kordek was offering Mr Cubrilo "the same deal" as that which the plaintiff had with the defendant. It was submitted that the "deal" under which the plaintiff had his eight blocks in Gregory Hills was that "friends" (such as the plaintiff) were allowed to build a house without paying for the land until the house was completed. It was submitted that in essence the deal was that the deal the defendant had with the plaintiff was that the plaintiff was a builder: at [70]. 3. It was further submitted that the statement asserted was open to further interpretations, namely: 1. That the plaintiff was offering Mr Cubrilo one of his blocks on the same terms as the plaintiff had with the defendant. In this respect it was noted that, as a friend, the plaintiff had his eight blocks in Gregory Hills to build a house on, each without paying for the land until the house was completed. Under this scenario, the plaintiff was to pay for his eight blocks but not until he finished building dwellings on them. It was observed that this is not the plaintiff's case in the present proceedings. 2. That the plaintiff was offering Mr Cubrilo one of the defendant's blocks to build on the same basis as he had his eight blocks from the defendant (that Cubrilo could build on the defendant's block without paying for the land until the construction was completed). It was submitted this is an unlikely interpretation because it required the plaintiff to be volunteering to Cubrilo what is not within his gift to provide.
14. The submission for the plaintiff was that whatever the correct interpretation of the conversation which Mr Cubrilo accounts, it was not the agreement which the plaintiff pleads or which he deals with in his affidavit evidence: at [71].
15. It was further submitted that Mr Cubrilo is not a witness on whom the Court can rely. In that respect: 1. Mr Cubrilo's understanding of the "same deal" came from discussions with Mr Veljovic some 20-25 years earlier. When pressed as to what was meant by the "same deal" he could not explain the phrase: (T 339: 24-27). 2. Mr Cubrilo asserted that he became interested in Gregory Hills because of Masterton Homes' involvement in Middleton Grange and that this prevented him from developing there. It was submitted that this was not true. Masterton Homes only had one third of the lots at Middleton Grange. 3. Mr Cubrilo asserted that he had been a home owner in 2009-2010. Title searches, however, demonstrated that he had not been a home owner since 2003.
16. In relation to the evidence of Mr Locke in which he stated that Mr Kordek Snr said "Don't worry, Milorad. You still have those eight blocks at Gregory Hills" the defendant accepted that Mr Locke was an impartial witness and did his best to give accurate evidence: at [75]. However it was submitted that his evidence did not assist the plaintiff's case for the following reasons: 1. The plaintiff did not advance a case for eight blocks of land. 2. Mr Locke's reasoning for recalling Mr Kordek Snr making the eight block statement (that Gregory Hills was a competing development to Harrington Gardens) is objectively wrong: at [76.2]. 3. Mr Locke gave evidence that he did not get involved in contract negotiations means that he would not have known which was a competitor site and which was not and this casts doubt on his recollection. 4. Mr Locke was unsure about the date of the lunch and this meant that he may also have been mistaken about what was actually said at the lunch. He accepted that other topics of conversation, including the sale of broadacre lots, were discussed.

Repayment of the Loan Advances

1. The defendant submitted that the repayment of the four loan advances is not unequivocal conduct that supports the existence of the Deferral Agreement. It is equally plausible with and without the Deferral Agreement. Accordingly, it does not assist the plaintiff's case: at [77].

The Absence of a Written Demand

1. It was submitted that the plaintiff was repeatedly asked by the Court and during cross-examination why he did not write a letter of demand asserting the existence of the Deferral Agreement and its non-performance. He could not provide an added explanation for so simple a step: at [78].

Other Objective Facts

1. The Gregory Hills joint venture involved a number of interested parties, including Messrs Petrovic, De Lutiis, Covington and Kordek Snr, through their corporate vehicles as unit holders in the trust. The corporate vehicles owned shares in BADC. There was open and transparent communications with Masterton Homes in November/December 2010. These were not copied to the plaintiff. It was submitted this was inconsistent with the manner in which the plaintiff contends that Mr Kordek Snr bound the defendant to give him the value of eight blocks of the development: at [79].
2. It was further noted that the joint venturers of BADC mortgaged the Gregory Hills property to NAB to secure loan funding for the purchase. The joint venturers also gave corporate guarantees. It was submitted it was inherently implausible that an experienced developer knowing that BADC needed funding to complete the purchase and the need to provide security to the funder would "dilute its interest" in the project for the benefit of another, and yet not require that other (the plaintiff) to provide security to the NAB: at [80].
3. It was additionally submitted that the commerciality of the transaction for which the plaintiff contended, was one that converted $195,000 loan to $1.795M, an extraordinary multiple of 9. Further, it was submitted that the plaintiff was guaranteed $1.6M irrespective of the ultimate sale value of the lots or the associated costs of development. It was noted that this was in circumstances where the defendant had a net asset position of just under $7M as at 30 June 2010 and access to cash exceeding $1.2M in November 2010 (CB2 at 584; and CB 3 at 610-613). The submission for the defendant was that this was a commercially improvident transaction in the extreme and one that was unlikely that an experienced property developer such as Mr Kordek Snr would agree to: at [81].
4. It was submitted that the plaintiff's "wholly inconsistent conduct post the alleged agreement of late November 2010 and the objective facts eviscerate Mr Arcaba's case": at [83].
5. It was the defendant's submission that it was the plaintiff's unpaid debts "…which have forced him to invent the Deferral Agreement as a source from which to repay his creditors. Mr Arcaba has invented the existence of this Deferral Agreement because he formed the view that Mr Kordek Snr (the only person who had dealt with him on behalf of K & K) had fallen gravely ill and left Australia to convalesce in Poland…the naïve Mr Kordek Jnr who had no direct knowledge of the matters [and?] would not be able to withstand the case which Mr Arcaba brings."
6. It was submitted by the defendant that the proceedings should be dismissed with costs.
7. The defendant also relied upon the document entitled "The Defendant's response to points arising out of the Plaintiff's Written Submissions of 4 April 2016". I do not here reproduce all of the points therein made, other than to note: 1. That as to the financial position of the defendant as at November 2010, it was submitted, contrary to the plaintiff's submission, that the financial graphs annexed to Mr Kordek Jnr's second affidavit (CB 3 at 610-615) show that the defendant had approximately $1.2M of cash available to it. The defendant, it was submitted, was more than able to repay the debt of $195,000 and that neither Mr Kordek Snr nor Mr Kordek Jnr were challenged on this. 2. In relation to the "conditions for payment" it was contended that these had not been proved and no damages are due. 3. The defendant's primary case, it was noted, however is and remains that the conversations on which the plaintiff relies to establish the Deferral Agreement did not occur and on that basis, the case fails. 4. If, however, the Court were to find that the conversations did occur, then it was submitted that the conditions for payment have not been proved and nothing is due to the plaintiff: at [11]. This aspect, I note, has been referred to in the defendant's primary submissions above. 5. In the defendant's response to the points raised in the plaintiff's submissions, it was noted that the purchase of the Gregory Hills property was completed in February 2011, sold undeveloped to Tribeca in February 2014. It was submitted that there was no dispute between the parties about that and, at any rate, there was certainly no evidence to establish that Gregory Hills had been developed: at [11.1]. 6. It was submitted that the alleged conversations between Mr Kordek Snr and the plaintiff which ground the claim was put on the basis that the Gregory Hills property would in fact be developed and that this was the basis upon which the plaintiff contended that he gave the defendant $100,000 per lot reduction: at [11.3]. 7. It was submitted that there was no evidence contrary to the proposition that Gregory Hills has not been developed, nor, it was submitted, was there evidence that the defendant's interest in BADC had been sold: at [11.3]. 8. By reason of the matters set out at [11.1] to [11.4], it was submitted that there could be no repudiation of an agreement that remains executory (on the state of the evidence). On that basis, no damages are payable.

5. Consideration
6. In accordance with accepted principles, in a case such as the present where a party seeks to rely upon spoken words as a foundation for a cause of action based on contract, the conversation must be proven to the reasonable satisfaction of the Court and that any consensus reached was capable of forming a binding contract.
7. As earlier discussed, it has been observed that in cases involving reliance upon words spoken in the context of an alleged cause of action, in many cases (but not all) human memory of what was said in conversation is fallible for a variety of reasons, as observed by McLelland CJ in Eq in Watson v Foxman, supra. Ordinarily the fallibility of memory increases with the passage of time, particularly where dispute and litigation intervene, and the processes of memory are overlaid by perceptions of self-interest or conscious consideration of what could or should have been said.
8. The proceedings were conducted by the plaintiff largely upon the basis of the single factual issue as to the alleged making of the Deferral Agreement, as pleaded that: "…In return for the plaintiff not seeking immediate repayment of the First Loan, Second Loan, Third Loan or Fourth Loan, [K & K] would repay [Mr Arcaba] the sum of $1,600,000 from the sale of properties by [K & K] or from its interests in the consortium formed to develop land that Gledswood Hills in addition to the sum of $195,000 borrowed ('Deferral Agreement')": CB vol 4 at [13] (Amended Statement of Claim).
9. The determination as to whether or not the alleged Deferral Agreement was made, in circumstances in which no contemporaneous documentation to confirm it was made, has necessitated reliance by both parties on oral evidence and a significant volume of material in order to prove or disprove the alleged oral agreement.
10. Whilst ultimately the issue in the proceedings requires an assessment of the credibility of key witnesses, in particular of the plaintiff and Mr Kordek Snr, a large amount of the evidence was directed to proof of ancillary or collateral events and circumstances that were claimed as either confirming or negating and consistent or inconsistent with the making of the Deferral Agreement.
11. Whilst regard has been given to considerations of demeanour of the plaintiff, Mr Kordek Snr and Mr Kordek Jnr in giving evidence, the ultimate determination of the central issue largely depends upon the evidence given by each of them with regard to the central factual issue as to the alleged making of the oral Deferral Agreement and also to the collateral events and circumstances referred to the preceding paragraph.
12. Particular factual matters that have been the subject of consideration include the following:

(1) The absence of any note or record of the Deferral Agreement.

1. It was common ground that prior to 29 August 2013 (the date of a letter of demand from Stojanovic Solicitors) no note, memorandum, email or correspondence was made by either party concerning the Deferral Agreement or its terms. It was part of the defendant's case that the plaintiff was a person who had familiarity with lending practices, finance brokerage and loan securities. With business experience of that kind the defendant argued, and as I accept, had the defendant in fact agreed to pay such a substantial amount of money to the plaintiff ($1.6M) it would be expected that the plaintiff would require or insist upon it being evidenced it in some formal way such as a written contract or note, memorandum or correspondence.
2. Whilst the plaintiff and Mr Kordek Snr communicated from time to time by email, there are no emails or correspondence by or on behalf of the plaintiff before 29 August 2013 asserting or referring to the Deferral Agreement.
3. Accordingly, the letter from Stojanovic solicitors dated 29 August 2013, addressed to The Manager, K & K Real Estate, represents the first communication approximately two years and nine months after the alleged Deferral Agreement was alleged to have been made asserting its occurrence or existence.
4. The letter referred to instructions to the effect that Mr Kordek Snr on behalf of the defendant informed the plaintiff that his company had lost the court case concerning the Oran Park land. At p 2 of the letter it was stated that, following that information (without referring to any particular date), in accordance with Mr Stojanovic's instructions a further oral agreement was entered into by his client, the plaintiff, with the defendant.
5. The terms of the agreement, as asserted in Mr Stojanovic's letter was: "The agreement was oral, and provided that my client agreed, that in return for not seeking repayment of the earlier loans (totalling $195,000) your company would pay my client the sum of $1,600,000 from the proceeds of a 31% interest which your client had, in a consortium, formed to develop the land at Gledswood Hills, in addition to the sum of $195,000 borrowed.": (CB 1 at p 269).
6. It may be noted that there was no reference here to any terms that specified the event or circumstance in which the sum of $1.6M would become payable. That was a matter, as earlier noted, that arose in the course of the hearing on an application on behalf of the plaintiffs to amend the Statement of Claim to allege that the event or events upon which payment would become due under the alleged Deferral Agreement was the subject of either an implied or express term.
7. Accordingly, the absence of any record, note or memorandum of the Deferral Agreement in or about November 2010 or in the period of two years nine months thereafter by the plaintiff, an experienced businessman, is to be assessed in the absence of any satisfactory explanation for not having recorded the alleged oral agreement.

(2) The alleged promise by Mr Kordek Snr to note the plaintiff's interest in "the Documents" or "the Deed".

1. As extracted above, in paragraph [29] of his affidavit sworn 5 May 2014, the plaintiff set out the conversation he alleges took place in late November 2010 with Mr Kordek Snr which he contended constituted the Deferral Agreement.
2. On the plaintiff's own evidence at paragraph [30] of his abovementioned affidavit, he said that he was having "some financial difficulties" and needed money to pay some of his creditors. He said he asked Mr Kordek Snr for "something in writing" as proof of his involvement in the Gledswood Hills Project and that he would be receiving $1.6M.
3. The plaintiff's evidence was that he later Mr Kordek Snr told him "It's too complicated with so many parties involved. You are included as part of the 31% share in K & K. You have my word and you should not have to worry about that".
4. A part of the rationale, according to the plaintiff's evidence at [29] of his affidavit, sworn 5 May 2014, was to have his interest documented in the project, so that he could use his "share" or interest as a form of security. Though being pressed by his creditors there is no satisfactory explanation as to why the plaintiff did not take steps to create a written record of the Deferral Agreement and insist or require Mr Kordek Snr's acknowledgement of a contractual obligation to pay him $1.6M.
5. The fact that he did not is remarkable given the amount of money allegedly promised, his pressing financial circumstances and that the at the outset of he requested documentary evidence of the agreement so that he could use it to show to his creditors so as to reassure or placate them. Against that background, the plaintiff, in my assessment, failed to advance a believable explanation as to why he failed to insist that Mr Kordek Snr fulfil his alleged undertaking to have his interest documented. His evidence that Mr Kordek Snr deflected him by simply saying that, in effect, it was all too complex does not in my opinion provide or constitute a cogent or believable explanation.

(3) Subsequent conduct of the plaintiff

1. In addition to the plaintiff's failure to insist or pursue some form of written record or memorandum of the Deferral Agreement, his conduct in other respects raises a number of issues which go directly to his credibility concerning the alleged Deferral Agreement.
2. Whatever trust the plaintiff may have had in Mr Kordek Snr prior to June 2012, it became clear that that trust had dissipated or at least had begun to dissipate by the time he decided to caveat Kordek Properties (those of Kordek Real Estate Pty Ltd and K & K Real Estate Pty Ltd) in respect of monies ($750,000) which he claimed (wrongly) that he had loaned to the two companies, each of which was a registered proprietor of the land specified in the caveats. In other words, by June 2012 when he lodged the caveats, the trust he claimed that he had previously had in Mr Kordek Snr appears to have well and truly run its course. As earlier discussed, the plaintiff accepted in evidence that the facts stated in Schedule 1 to each of the caveats as supporting the estate or interest in the land described, were incorrect.
3. Following the letter dated 29 June 2012 from CBP denying that their clients ever borrowed the amount of $750,000, the plaintiff's reply dated 10 July 2012 asserted that the terms of his agreement with Mr Kordek Snr were "…that, in return for the loan of $195,000, K & K Real Estate would ensure that I would receive $750,000 when it was in funds or within two years at the latest".
4. The plaintiff's above reply letter to CBP does not refer to the alleged Deferral Agreement, but to an asserted agreement that, in return, he would receive $750,000 on the terms stated.
5. In the fourth paragraph to the plaintiff's reply letter to CBP, dated 10 July 2012, the plaintiff specifically stated that in return for the loan of $195,000, K & K Real Estate would receive an amount of money, namely, "…that I would receive $750,000 when it was in funds or within two years at the latest". There was no reference to any agreement to pay an amount of $1.6M.
6. In the context of these proceedings the omission of any reference by the plaintiff in his letter of 10 July 2012 to the alleged Deferral Agreement, is significant.

(4) The plaintiff's request to Mr Kordek Jnr for financial assistance

1. On the basis of the plaintiff's evidence in cross-examination as to his financial position in 2012, it is apparent that not only had he lost trust in Mr Kordek Snr but he was also under serious financial pressure from his creditors. On the evidence it may be seen that his phone call to Mr Kordek Jnr at the end of the January 2012 in which he sought financial support was driven by his serious financial position at that time.
2. As discussed above, Mr Arcaba told Mr Kordek Jnr in his call to him at that time, that he needed help "…with a serious financial problem I have": Affidavit of Mr Kordek Jnr sworn 30 September 2014 at [32]. In that telephone call he told Mr Kordek Jnr that he owed a lot of money to some people and he did not have enough money to pay them back. His request was: "…Could you please ask him (referring to Mr Kordek Snr) to write me a piece of paper stating that K & K owes me $550,000 payable in 24 months? I just need this to show my creditors to get them off my back. Don't worry, I'll never actually ask K & K to pay me this money. Can you please do this for me?"
3. I have earlier indicated that I generally accept Mr Kordek Jnr's evidence including in particular his evidence in relation to his recollection of this telephone call. The absence of any reference by the plaintiff in the telephone call to the Deferral Agreement or that the defendant was allegedly indebted to him bears directly, of course, upon the issue as to whether or not a Deferral Agreement was made as the plaintiff claimed. The amount of $550,000 referred to in the telephone call by the plaintiff was not said to have related to the Deferral Agreement or to any agreement. The fact that he wanted a piece of paper to say that that $550,000 was payable in 24 months confirms other evidence that the plaintiff's financial position was in fact at a critical stage and that he was seeking to establish a false position to represent to creditors. In the latter respect, the request by the plaintiff to Mr Kordek Jnr in the telephone call reflects badly upon the plaintiff, in effect, in seeking Mr Kordek Jnr's assistance in devising a stratagem that would falsely represent to creditors that K & K owed him a significant amount of money.
4. In relation to the conversation that Mr Kordek Jnr said he had with the plaintiff in February 2012 (at [36] of his affidavit) on Mr Kordek Jnr's account of the conversation, which I accept, the plaintiff did not assert the making of a promise by his father, Mr Kordek Snr that he would be paid $1.6M for extending the loans amounting to $195,000. His request once again was for a piece of paper stating that the defendant owed him $550,000 payable in 24 months. Again, in seeking Mr Kordek Jnr's cooperation, he was seeking to enlist his support to establish a deceptive and false stratagem when the defendant company was not in fact indebted to him for $550,000.
5. In summary, the request made by the plaintiff to Mr Kordek Jnr does not support and in many respects is materially inconsistent with the making of the alleged Deferral Agreement. Although at the time it appears on the evidence that the plaintiff had access to legal advice, no formal demand was made in 2012 of the defendant to honour any agreement and certainly not the alleged Deferral Agreement. This was despite his apparent loss of trust in Mr Kordek Snr and what appears through the 2012 to have been a deteriorating financial position for the plaintiff.

Amendment to the pleadings to rely upon an implied term

1. As discussed above, the plaintiff sought leave at the hearing of the proceedings to amend the Statement of Claim to rely in the alternative upon an implied term as to the event or events that would trigger the claimed obligation of the defendant to pay the amount of $1.6M under the alleged Deferral Agreement: Amended Statement of Claim dated 17 March 2016 at [13] and [14].
2. Amongst the many inconsistencies in the plaintiff's evidence, was his assertion as stated above, that there was an express agreement between Mr Kordek Snr and himself that the amount of $1.6M was to be paid upon a specified event, namely, either the finalisation of the Gledswood Hills Project or the sale of the defendant's share in the project.
3. On a significant matter such as this, it is difficult to accept that, not having previously given evidence in his affidavits of an agreement as to the events that would 'trigger' the payment of $1.6M, that the plaintiff, in the course of his cross-examination, gave evidence that he and Mr Kordek Snr discussed the events that would enable him to receive the benefit of $1.6M. It appears that he had not given instructions to his lawyers when his primary affidavit sworn 5 May 2014 was prepared that there had been any express agreement as to such an event or events that would trigger the alleged obligation to pay under the alleged Deferral Agreement.
4. The evidence of the plaintiff in the course of his cross-examination, to the effect that he and Mr Kordek Snr had in fact addressed and discussed the events or conditions upon which $1.6M became payable, had every appearance of evidence being manufactured in order to meet a perceived or potential weakness in his case.
5. During the course of the lengthy cross-examination of the plaintiff, I had an extensive opportunity to assess the plaintiff. Whilst making allowance for his less than perfect command of the English language, I was nonetheless left with the strong impression that he was both an unreliable witness and one who was prepared to adapt the evidence to meet the case which he sought to make out against the defendant.
6. The evidence concerning the plaintiff's strategic use of the caveats to bring financial pressure to bear upon the Kordek interests and his preparedness to enlist Mr Kordek Snr and Mr Kordek Jnr in a strategic and misleading strategy to hold off creditors constitutes evidence of that in doing so he was prepared to act in a less than honest and straight-forward manner if to do so would work to serve or advance his interests.
7. In relation to the evidence of Mr Locke and Mr Cubrilo relied upon by the plaintiff in support of his cause of action, as earlier noted, the submission on his behalf properly acknowledged that neither what was heard by Mr Locke or Mr Cubrilo definitely supports the Deferral Agreement in terms, however, it was suggested that it was some evidence probative of an agreement of some kind involving the provision of eight blocks from the Gledswood Hills development.
8. Accepting the evidence of both witnesses as to what they said they heard, their evidence did not provide the full conversational context in which the words were spoken. Whether or not at some point, Mr Kordek Snr and the plaintiff had discussed the subject of blocks of land in the development and if so whether any were to be acquired by or provided to the plaintiff, the evidence does not establish whether any such discussions were contractual in nature. In summary, the evidence of the two witnesses, in my opinion, cannot be considered to be determinative of the alleged oral agreement upon which the plaintiff relied in these proceedings.
9. The approach to be taken in a case such as the present, as earlier indicated, requires a close examination of the evidence in order to determine whether or not the evidence of an oral agreement is precise and cogent enough to warrant an affirmative finding. In Brooker v Friend & Brooker & Anor [2006] NSWCA 385, McColl JA observed at [134]: "The appellant's evidence was substantially unchallenged. However, it was not incumbent upon the primary judge to accept evidence he found either unconvincing or incredible: Bulstrode v Trimble [1970] VR 840 at [848]. In particular, to the extent that the appellant's case was based upon conversations, it was necessary that he prove those conversations with a degree of precision sufficient to enable the Court to be reasonably satisfied that they supported the relationship for which he contended, so that the primary judge could '…feel an actual persuasion of its…existence': Watson v Foxman at [318]-[319]; Lahoud & Ors v Lahoud & Anor [2006] NSWCA 169 at [91] (per Hodgson JA, Handley and Ipp JJA agreeing). Whether the appellant's uncontradicted evidence should be accepted as establishing the relationship pleaded depended on all the circumstances, including its inherent probability: Moukhayber v Camden Timber & Hardware Co Pty Ltd [2002] NSWCA 58 at [23], [28]-[30] per Heydon JA (Beazley JA and Santow J agreeing)."
10. In Commonwealth Bank of Australia v Shahen Serobian [2009] NSWSC 302, Hammerschlag J observed: "[362] Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the Court which means that the Court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the Court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (2000) 49 NSWLR 315 at 319."
11. See also Campbell v Campbell [2015] NSWSC 784 (Sackar J) at [73]-[79].
12. Having considered the evidence and the detailed submissions made on behalf of the plaintiff and the defendant, I am firmly of the view that the plaintiff has not discharged the onus of proof that he carries in these proceedings. I do not consider that the alleged Deferral Agreement was made through discussions between himself and Mr Kordek Snr or at all.
13. That is sufficient to dispose of the proceedings. However, in deference to the submissions made, I accept the further submission made on behalf of the defendant that it was incumbent upon the plaintiff to prove that the Gledswood Hills Project had been completed or alternatively that the defendant's share in the project had been sold and that neither such circumstances or contingencies were proved to have arisen.
14. As indicated above, the plaintiff in cross-examination was charged with having manufactured or fabricated a false claim against the defendant in these proceedings. On the basis and for the reasons stated in this judgment, the plaintiff has failed to discharge the onus of proof in relation to the alleged Deferral Agreement. On that basis, the claim must fail. It is unnecessary for the purposes of the disposition of this case to make any adverse findings against the plaintiff in relation to the issue raised in cross-examination that he has fabricated the claim. In particular, a finding to that effect could only be made in accordance with the Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 standard. It being unnecessary to make any finding in that respect, I do not do so.
15. Accordingly, I propose to make the following orders: 1. Judgment for the defendant against the plaintiff. 2. In accordance with the provisions of s 98 of the Civil Procedure Act 2005 and under UCPR Part 42.1 costs should follow the event. Accordingly, I make an order that the plaintiff pay the defendant's costs of the proceedings subject to any submission on costs made upon delivery of this judgment or upon the proceedings being re-listed for that purpose at 10.00am Wednesday 14 December 2016.

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