Westburn Advisory liquidator Shumit Banerjee alleges in a statement of claim that the Stojics were part of a “scheme” that dated back to at least April 2015 and transferred money owed to the ATO and creditors to related entities in uncommercial payments.
“The company had failed to comply with all of its obligations in relation to Commonwealth and state taxes, including, without limitation, in respect to its ongoing obligations to remit PAYG,” he said in the Federal Court document.
The Stojics have denied the alleged scheme and said they were not directors of the company.
Connie Stojic’s lawyer, Graham Lancaster, said the liquidator began proceedings three years ago and “has not been able to establish his case to date”.
“Our client has filed a defence in the proceedings denying any liability, denying that there was a scheme as alleged, and denying that she was a director,” he said.
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He said she did not wish to comment further as the matter was before the court and until there was a ruling “all allegations are theoretical in nature and unsubstantiated”.
Eastside is understood to have done work for second-tier builders including Hutchinson, Richard Crookes, Taylor Constructions and Parkview.
Mr Banerjee alleges that Eastside took over the business of Mr Stojic’s old formwork companies, which traded under the name Rediform from 2008 to 2017 before they collapsed owing at least $4 million in PAYG tax.
During that time, his wife bought luxury coastal homes, including a five- bedroom, five-bathroom house in Maroubra with a six-car garage, gym, swimming pool, cinema and ocean views.
Ms Stojic sold the house for $14 million in 2021, smashing the suburb’s record sale price at the time.
She currently owns a South Coogee home with a resort-style pool that was bought for $3.8 million in 2021, without a mortgage. It is now estimated to be worth about $5 million.
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Ms Stojic told liquidators that much of the Maroubra home’s $14 million sale went to pay for the mortgage, business loans, suppliers and secured creditor Australian Invoice Finance.
The ATO previously pursued Rediform and Dane Stojic for significant tax debts in 2015 and 2016, imposing garnishee notices on its client Hutchinson Builders and issuing four director penalty notices on Mr Stojic totalling $519,000.
However, before Rediform wound up, Mr Banerjee alleges the Stojics set up Eastside Formwork to take over its business and installed Mohammed Zaidan as a straw director “so that neither Dane or Connie would be personally liable to the [ATO] commissioner”.
Meanwhile, a labour hire entity called Inestimable Holdings engaged Eastside’s 260 workers from July 2018 to at least April 2019.
During liquidator examinations in 2021, Mr Stojic said an accountant from Sydney firm Wentworth Williams introduced him to an adviser who would assist in the “structure of the business” and to potentially grow Eastside.
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That adviser, who was later arrested and charged with tax fraud in a separate matter, discussed engaging Inestimable, Mr Stojic said.
The initial director of Inestimable, whose only client was Eastside, was an accountant who worked with the adviser and has since pleaded guilty to a separate multimillion-dollar tax fraud involving labour hire.
He quit as Inestimable’s director on the same day he was appointed, replaced by a female director who liquidators say they cannot locate.
Both men cannot be named for legal reasons.
The ATO soon began issuing garnishee notices for Inestimable’s unpaid taxes, which ended up totalling $3 million, and Eastside Formwork started employing the workforce directly as a result.
But by July 2020, Eastside Formwork ceased operating and the CFMEU conducted a successful campaign to pressure builders, including Hutchinson, Parkview and Taylor, to pay for its workers’ unpaid wages.
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That same month the union signed off on a new agreement with Mr Stojic under his firm Eastside Formwork Group, which took over Eastside Formwork’s business.
In December 2020, Eastside Formwork Group went into liquidation owing the ATO $1.6 million.
Mr Banerjee alleged in his statement of claim that EFG and Eastside were part of the same scheme that also involved the company, Eastside Holdings, whose sole director was Connie Stojic.
Eastside Holdings would invoice Eastside Formwork for materials – supplied to EH by third parties – with a margin of 10 to 15 per cent that the liquidator claimed had no commercial justification.
Eastside Formwork also paid some $9 million to Buildquip, whose sole director was Connie Stojic, for materials charged out at a rate per square metre that the liquidator said was not industry practice and exceeded the fair market value of the materials.
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Eastside Formwork also paid Dane Stojic a net $414,347 that Mr Banerjee alleged was not justified with invoices.
In her defence, Ms Stojic said the payments to Buildquip and EH were for “a legitimate business practice” and denied there was a common industry practice for charge-out rates.
During liquidator examinations, Mr Zaidan said he took advice from the firm’s accountant at Wentworth Williams and had believed that all taxes had been lodged.
However, he said: “I was at the mercy of Dane who was really running the business.”
Mr Stojic denied he was a shadow director and said he met Mr Zaiden through Wentworth Williams, which had also done the accounts for Rediform.
“I had had enough with the contracting industry and he [Zaidan] was interested in becoming the director and making some money,” he said in the examination.
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Mr Stojic was declared a bankrupt in October 2022.
No trial date has been set for the case. However, Federal Court Justice John Halley found in 2022 that Mr Stojic has shown a “persistent pattern of non-co-operation and evasion” in failing to comply with liquidator requests to deliver the company’s books.
While the ATO is the biggest creditor, it has not provided funding for the court action and Mr Banerjee is understood to be engaging litigation funders.
