Jaksic v Yim

Judgment (ex tempore) 1HIS HONOUR: On 26 September 2007, the appellant Peter Jaksic, who was the defendant in the proceedings in the Local Court, agreed to purchase from the respondent Ms Lisa Yim, who was the plaintiff in the Local Court, a Lexus motor vehicle for a sum of $63,000. To that extent their agreement was recorded in writing, but it was common ground before the Local Court and before this Court that they also orally agreed that, in order to facilitate the payment of the price by instalments, Mr Jaksic would entrust his bank debit card to Ms Yim who would draw on it from time to time and apply the proceeds so drawn to reduction of the debt. 2In order to record those repayments, Ms Yim maintained a ledger, which commenced with an entry on 15 October 2007, and continued over five pages to conclude with an entry on 16 April 2009 showing the remaining balance of the debt as $39,550. It was not and is not in dispute that, in addition to the amounts treated as paid in the ledger, Ms Yim made withdrawals of additional amounts. Although the precise amount was never agreed, the total withdrawals made by Ms Yim amounted to about $71,640, of which only $23,450 was recorded in the ledger as applied to the motor vehicle debt. The substantial dispute at first instance was whether as she contended she did so at the request of Mr Jaksic and provided the additional amounts withdrawn to him for his own use or whether (as Mr Jaksic contended), she did so without his authority and retained them for her own purposes. 3By statement of claim filed in the Local Court on 28 October 2009, Ms Yim sued Mr Jaksic for the amount of $39,550, such amount corresponding with the amount shown in the ledger as the outstanding motor vehicle debt. Her pleading included, in paragraph 2, the following: Up to and including 16 April 2009, the defendant has paid a total of $23,450 to the plaintiff and an amount of $39,550 is still owing to the plaintiff. 4Mr Jaksic filed a defence, in which he denied that allegation and asserted that he had paid the plaintiff the sum of $76,490; ultimately, Mr Jaksic modified his position and accepted that the sum paid was not more than $71,640. In addition, Mr Jaksic filed a cross-claim for $13,490, being the amount he alleged had been paid as, in effect, retained by Ms Yim in excess of the motor vehicle price of $63,000. 5In the Local Court, the evidence was heard on 21 July 2010. The proceedings were then adjourned to 25 October 2010 for addresses, following which the magistrate gave an ex tempore judgment. As to Ms Yim's claim, the magistrate said: Ms Yim claims the amount of $39,550 for monies outstanding as a consequence of an agreement made with Mr Jaksic for Mr Jaksic to purchase a Lexus motorcar for the sum of $63,000 and Ms Yim says that Mr Yaksic has paid the amount of $23,450 and owes the amount claimed. Mr Jaksic has filed a defence where he claims that he has paid the plaintiff the sum of $76,490. The parties agreed that there was an agreement in relation to the purchase and sale of the Lexus motor car. There is a written statement of agreement signed 26 September 2007. It is agreed, not as part of the agreement but that the arrangement for payment was that Mr Jaksic gave Ms Yim the card to his account allowing her to withdraw monies and, furthermore, that an account was kept which he signed indicating the amount that remained outstanding, that being exhibit 3 before the Court, and indicating that on 16 April 2009 the amount of $39,550 was outstanding. The defence is misconceived in that, firstly, it is agreed that certain monies which Ms Yim withdrew were applied to the payment for the car and Mr Jaksic has signed the series of payments and the date of payments. What he says is that Ms Yim also withdrew other monies which [s]he applied for her own purposes. However, this is a separate matter from the application of money for the car which has been agreed by the parties and evidence in writing. 6His Honour thereupon gave judgment on the claim in favour of Ms Yim for $39,550, and then proceeded to address the cross-claim: Mr Jaksic has lodged a cross-claim which goes to the allegation that Ms Yim withdrew monies in excess of the agreement and applied them to her own use. The cross-claim has not been properly pleaded in that the effect of what is alleged is that Ms Yim has committed a fraud. As a consequence of an allegation of fraud there is a high standard of proof, although the onus is on the defendant/cross-claimant to prove the matter on the balance of probabilities. Nevertheless, because of the nature of the allegation, even though it is not explicitly stated, it is one of fraud and therefore the onus is very high. Ms Yim says that she withdrew monies on a regular basis from the account of Mr Jaksic who was working at the time and had a direct debit from his employer made to the account and that he would see her from time-to-time and request money for petrol and other living expenses and including money for his son which she gave him and made a record from time-to-time in various places including on a calendar. It is the evidence of Mr Jaksic that he did no such thing but rather that he lived on the money that he obtained from refereeing, which is about $150 to $200 a week, and that he made no claim on the monies which Ms Yim withdrew other than the amounts which have been recorded in the amounts relating to the car. I found Ms Yim to be an honest witness. She gave honest explanations, in my view, to what had occurred. It is true to say that the record that was provided to the Court was not complete, however it was something that was done, at the time, in the circumstances of a friendship, a close relationship and then a friendship with Mr Jaksic where they socialised together and Ms Yim also made the point that she did not wish to bring matters relating to Mr Jaksic's character because of the fact [of] their history. Succinctly put, it really relates to Mr Jaksic's word against Ms Yim's word and that is insufficient for the Court to be satisfied on the balance of probabilities that Ms Yim withdrew money from the account of Mr Jaksic and misapplied it in the manner that he has stated. When one looks at some of the features of the matter, it is apparent that the bank statements were mailed to Mr Jaksic therefore he had the ability to monitor the withdrawals by Ms Yim and that tends to go to the Court being satisfied of Ms Yim's evidence that Mr Jaksic used to go over with her the amounts involved... (the tape ended at this point and later resumed)... the account relating to the car when he decided to do so. The other feature which I think you are saying is that Mr Jaksic had never sought to discuss the matter with Ms Yim or to communicate with her in any way prior to Ms Yim filing a statement of claim and then Mr Jaksic filing a cross-claim. 7Accordingly, his Honour gave judgment for the cross-defendant on the cross-claim. After a short argument as to costs, his Honour ordered that the defendant pay the plaintiff's costs, including the costs of the cross-claim, on an indemnity basis from 15 July 2010 and otherwise on an ordinary basis as agreed or assessed. 8By summons filed in this Court on 22 November 2010 Mr Jaksic seeks leave to appeal from the whole of the magistrate's decision. He appeared in person in person on the hearing of the appeal; Ms Muir of counsel appeared for Ms Yim. 9At first, upon reading Mr Jaksic's summons and the grounds of appeal expressed in it, and in hearing his oral argument, it appeared as if the appeal did no more than quarrel with the magistrate's preference for Ms Yim's evidence to his own. Had that been all there was to the appeal, it must have failed, as the preference of a Court on credibility grounds of one witness to another - particularly where, as here, apparently influenced by demeanour - is not an error of law, nor one of mixed fact and law. 10However, in the grounds of appeal contained in the summons there was a hint of a question of law, as there was in Mr Jaksic's submissions, insofar as it was alleged that the magistrate had overlooked (or failed to take into account) certain relevant evidence, which pointed in a direction opposite to his ultimate conclusion. 11I entirely accept that where a primary judge has made a finding contrary to certain evidence but without express reference to it, an appellate Court will not assume that the evidence has been overlooked or ignored, nor act on it to reverse the finding, unless it is satisfied that any advantage enjoyed by the primary judge is insufficient to explain the finding. In Abalos v Australian Postal Commission (1990) 171 CLR 168, McHugh J (with whom Mason CJ, Deane, Dawson and Gaudron JJ agreed) said (at 178): ... where a trial judge has made a finding of fact contrary to the evidence of a witness but has made no reference to that evidence, an appellate court cannot act on that evidence to reverse the finding unless it is satisfied "that any advantage enjoyed by the trial judge by reason of having seen and heard the witnesses, could not be sufficient to explain or justify the trial judge's conclusion" 12In SS Hontestroom v SS Sagaporack [1927] AC 37, Sumner LJ said (at 47): ... not to have seen the witness put appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility of reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case. The course of the trial and the whole substance of the judgment must be looked at, and the matter does not depend on the question whether a witness has been cross-examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for this judgment the trial judge's conclusions of fact should, as I understand the decisions, be let alone. 13I would doubt that a wrong finding of a matter of fact, even though liable to be overturned on the grounds referred to in Fox v Percy (2003) 214 CLR 118, would amount to an error of law, or an error of mixed law and fact. In order to establish an error of law, or an error of mixed law and fact, in the context of this case, Mr Jaksic must demonstrate that the judgment is unsupportable on facts incontrovertibly established by the evidence, or that no judge acting judicially and having regard to the whole of the evidence could have reached the conclusion that the primary judge did. Put slightly differently, there will be an error of law, or at least one of mixed fact and law, if the judgment given is one that was simply not open on the evidence. 14As will be apparent from the magistrate's judgment set out above, his Honour's acceptance of the plaintiff's claim was founded primarily, if not exclusively, on the ledger, which he said indicated "that on 6 April 2009 the amount of $39,550 was outstanding". In her primary affidavit of 18 June 2010, Ms Yim had said: 24. By about April 2009, I was upset because Peter was not making payments of $400-$500 every week. This was causing me financial stress. I had several conversations with Peter during the period from April 2009 to June 2009 which included the following exchange: Me: Peter, I really need you to pay on time. I have bills to pay. Peter: Ok, alright, I will pay. 25. When we had conversations in which I would ask Peter to pay me, he would change the subject. 26. In about September 2009, I instructed solicitors to pursue the balance of the purchase price which remained owing in respect of the Lexus. 27. At some time after 16 April 2009, I took Peter's debit card to an ATM and tried to withdraw funds. The ATM would not process the transaction and took Peter's debit card. 28. I had a conversation on the same day with Peter which included the following exchange on telephone: Me: I went to withdraw your weekly car repayment and the ATM took the card. Peter: I stopped my card because I don't want to pay you anymore. 29. Peter did not make any repayments after 16 April 2009. 30. On 24 September 2009, my solicitor sent Peter a letter asking him to repay the balance of the purchase price. A copy of this letter is at page 8 of LY-1. 15To sum up, Ms Yim said that by about April 2009 she was upset because Mr Jaksic was not making payments every week, causing her financial stress; that she had several conversations with him during the period between April and June asking him to pay; that at some time after 16 April 2009 she took the debit card to an ATM to try to withdraw funds but the ATM would not process the transaction and confiscated the card; that she had a conversation with Mr Jaksic that day in which he said "I stopped my card because I don't want to pay you any more"; that he did not make any repayments after 16 April 2009; and that on 24 September 2009, her solicitor sent him a letter of demand for the sum of $39,550. In that letter, Ms Yim's solicitor asserted: "Our client instructs us that an amount of $39,550 is still outstanding as at 16 April 2009 and to date no further repayments have been made by you. In good faith our client has made a number of requests for further repayments which you have ignored and she has also suggested to you that you may return the said vehicle to her in satisfaction of the loan which you have also ignored". 16Mr Jaksic's version was different. In his affidavit sworn in the Local Court proceedings on 17 June 2010 he said: 14. Between October 2007 and September 2009 Lisa withdrew money from my Commonwealth Bank account totalling the sum of $74,730 ... 15. In late September 2009 I received a letter from [Ms Yim's solicitors] stating that I owed Lisa $39,550 ... 16. I called Lisa and said: I received a letter from your solicitor saying I still owe a lot of money, which cannot be correct. She said, I don't want to talk any more. Talk to my solicitor. 17. I immediately went to seek legal advice after which I attended the Commonwealth Bank and closed the account to ensure that no further moneys were withdrawn until the issue could be resolved. 17A significant difference between these two versions is that, according to Ms Yim, her approach to her solicitor was triggered by the capture of the debit card by the ATM following a protracted period of failure to pay, whereas on Mr Jaksic's version, the debit card was cancelled only after he had received the letter of demand from Ms Yim's solicitors. Exhibit 5 before the Magistrate was material provided on subpoena by the Commonwealth Bank, with whom Mr Jaksic's relevant account was conducted. It included two letters from the bank to the court dated 6 July and 14 July 2010, in practically identical terms for relevant purposes. The gravamen of the letter, is that a keycard was issued to Mr Jaksic on 9 October 2007, with an expiry date of 9 November 2010, his previous card having expired on 7 November 2007. A replacement card was issued to Mr Jaksic bearing a different number on 1 October 2009, with an expiry date of 1 October 2013. From this evidence it is inescapable that the card of which Ms Yim had use was the card with the issue date of 9 October 2007, and that it was that card which was ultimately captured by the ATM. This is entirely consistent with Mr Jaksic being issued a new card with a different number on 1 October 2009. 18Also amongst exhibit 5 are the bank statements for the relevant account. They reveal no less than 22 occasions after 16 April 2009 and before 30 September 2009 on which withdrawals were made by use of the keycard at automatic banking machines, variously at Bonnyrigg, Chinatown, Darling Harbour and elsewhere. Those 22 withdrawals total $8,770, in other words, after the last entry in the ledger (16 April) and before the card of which Ms Yim had use was captured by the ATM (in late September 2009), it was used to withdraw $8,770, not one dollar of which is accounted for in the ledger. The last withdrawal was made on 28 September 2009, that is to say, four days after the solicitor's letter of demand to which I have referred. Accordingly, the documentary record corroborates Mr Jaksic's version and refutes Ms Yim's version in that respect. 19Ms Yim was to some extent cross-examined on those matters before the magistrate. At T28, she agreed in substance that there was only one card applicable to the account between October 2007 and, as was put to her, 9 November 2010 (although in fact it is now known that a second card was issued on 1 October 2010). The significance of that is that so far as she was aware, there was only one card at the relevant times prior to October 2010. In any event, in order to clarify the position, it was agreed the letter from the bank would be tendered, it was the letter that became exhibit 5 in the Local Court proceedings. 20At T41, after Ms Yim had been cross-examined at some length to the effect that not all the amounts withdrawn up to 6 April were reflected in the ledger, his Honour appears to have become somewhat annoyed, remarking at (T40.35): It is quite plain what her evidence is anyway. I don't know why we're flogging a dead horse here as far as I'm concerned; [it is] quite plain to me what happened. She took money out on pay day, she kept the money, she gave money to him as he wanted it and he allocated some of the money to repayments and when he did, a record was kept in the ledger. That's it in a nutshell. 21The following exchange then occurred between counsel for Mr Jaksic and his Honour: Counsel: That's not the way I read it your Honour. His Honour: That's the way I read it and unfortunately I'm the one who is going to make the decision. 22It seems to me that his Honour accurately encapsulated the substance of Ms Yim's evidence to that point, namely, that the total amounts withdrawn on any occasion were not reflected either by precise date or amount in the ledger, because some of that money was provided at Mr Jaksic's request to him for his personal use, and only the amount that she retained after that was recorded in the ledger and applied to the motor vehicle debt. But counsel for Mr Jaksic then turned to the position after 16 April. At T41.26, counsel asked: Q. If you would forward to 16 April 2009? You say that on that date the ATM machine took the card? A. No, at that time is still not - the ATM didn't took [ sic ] the card yet, until I see Edmond [her solicitor], he doesn't want to pay. 23Subsequently, Ms Yim said: "On 16 April this the last payment", consistently with what she had said in her affidavit. She was then asked (at T41.41): Q. Do you agree that your ledger book stops recording withdrawals on 16 April 2009? A. Well the problem is he have to go to Croatia and he had a girlfriend in Thailand, and all the expenses. I had to borrow my family the money for him to get air ticket to go to Croatia and even at 40 degrees hot weather, I walked to the Commonwealth Bank to get the bank cheque for him to that, that's why I didn't put any more the figure. He still give me the pay, but is more than he use. 24If this was intended to convey that payments after 16 April were not recorded because they were applied to a debt arising from a loan made by Ms Yim to fund Mr Jaksic's travel to Croatia, there was the difficulty, first, that on her own evidence that borrowing took place in 2008 (Mr Jaksic asserts it took place in 2006); and secondly, that on her own evidence it was in the order of $3,600, which could not account for the withdrawals of $8,770. 25Next, she was asked: Q. So you were still using his key card after April 2009? Is that what you're saying? A. Yes. I do, occasionally. Q. Up until when were you using it? A. Just before I see [the solicitor] just - I remember seeing [the solicitor] on 2009 September is it. Q. September? A. Yeah, just before then. He destroyed the card, I couldn't have any more to withdraw the money. But if you really want I can prove that in Commonwealth Bank I withdraw when the cash for him and he spend the money for go to Croatia holiday. 26She subsequently said the ATM took the card about two weeks before she saw the solicitor. When asked "Is there any reason then why you didn't say that some time in September 2009 that the ATM took Peter's card as opposed to you'd put a specific day on it some time after 16 April 2009 in your statement?", she answered "Because I was confused and also at that time I couldn't receive any money from him, I was stretched." 27Having got to that point, counsel then sought to put to the witness what seems to be the highly pertinent question "I put to you that the record, the ledger book that you had doesn't accurately reflect the amount of money that you in fact took out of Mr Jaksic's account?" His Honour then intervened: "For what?" Counsel replied: "For repayments of the vehicle?" His Honour said: "Don't bother answering that. Look, we've been over this many, many times what the arrangement was. If you can't comprehend it by now, bad luck. You're not asking that question. Get on to something else. Otherwise you will be looking at a costs order unless you move on." 28In the light of that intervention, counsel unsurprisingly regarded discretion as the better part of valour and moved on, having effectively been told not to pursue the question of the insufficiency of the ledger as a record in respect of the period after 16 April 2009. It may be that the magistrate did not then appreciate the significance of the discrepancy in the post 16 April 2009 period. 29It seems to me that while the Magistrate's acceptance of Ms Yim's evidence, to the extent that she said that when she made withdrawals, some of the amounts withdrawn were given to Mr Jaksic for his purposes and only the balance recorded by her in the ledger was, up to 16 April 2009, open to his Honour, it is inconceivable that after 16 April 2009 Ms Yim would have continued to make withdrawals to the tune of $8,870, and - in circumstances where she described her position as "stretched" - not retain a single dollar of it to be set against the motorcar debt. 30When one appreciates all of that evidence, it was simply not open to the magistrate to conclude that, as at the date when proceedings were commenced, or as at the date of judgment, the debt remained at $39,550. Alternatively put, in concluding that the signature of the ledger by Mr Jaksic on 16 April 2009 was effectively conclusive of the issue, the magistrate must have overlooked and disregarded evidence that was not only relevant but compelling, to the effect that further amounts had been paid in reduction of the debt since then. For that reason, the Magistrate's ultimate judgment for $39,550 must be wrong in law. 31There is another reason for reaching the same conclusion. As will be apparent from the judgment of the magistrate as set out above. His Honour took the view that Mr Jaksic's defence, that Ms Yim had been paid more than the amount shown in the ledger, was not in substance a matter of defence, but a separate matter to be agitated by cross-claim. On that basis, his Honour described the defence as "misconceived", as it was "agreed that certain monies which Ms Yim withdrew were applied to the payment of the car and Mr Jaksic has signed the series of payments and the date of payments". Not only does that fail to deal with the payments after 16 April; but also, in dealing with the cross-claim, the magistrate stressed that it was in substance an allegation that Ms Yim had fraudulently misappropriated money, that it was therefore a matter for Mr Jaksic to prove on the balance of probabilities, and - because of the gravity of the allegation - such proof needed to be to a "Briginshaw standard"; the result was that, as the Magistrate expressed his conclusion, there was "insufficient for the court to be satisfied on the balance of probabilities that Ms Yim withdrew money from the account of Mr Jaksic and misapplied it in the manner that he has stated". Even if the onus of proving that the funds had been paid to Ms Yim was borne by Mr Jaksic, the payments were proved and indeed, at least mostly, admitted. All that was in issue was whether they had been paid over by Ms Yim to Mr Jaksic, and on that she plainly bore the onus 32Ms Muir, who has courteously and capably said everything that could be said in response to the appeal, accepted in her written submissions that the additional payments were correctly pleaded as a matter of defence. Given the way in which the magistrate addressed the matter, this has significant consequences. Whereas the magistrate cast on Mr Jaksic the onus of proving, and to a high standard, that Ms Yim had misappropriated funds from his account, in law Ms Yim ought to have borne the onus of proving that she had not retained the funds admittedly withdrawn by her. Although Mr Jaksic would have had some evidentiary onus of pointing to evidence of payment, ultimately it was for Ms Yim to establish that she remained unpaid. 33The manner in which the magistrate approached these issues resulted in an incorrect approach as to where the onus of proof lay, exacerbated by the high standard of proof which was wrongly cast on Mr Jaksic. For that further reason, the judgment below was affected by error of law. 34As matters of credit loom large in the case in any event, and as I have not seen the parties give evidence, it is inescapable that the matter must be returned to the Local Court for a new trial. 35To the extent that it is necessary, I grant leave pursuant to (NSW) Local Courts Act s 40 to appeal from the judgment of the Local Court. I allow the appeal. I set aside the judgment and order of the Local Court. I remit the matter to the Local Court for determination conformably with this judgment. I order that the defendant in this court pay the plaintiff's costs of the appeal.