R v Gadaloff [1999] QCA 286

[1999] QCA 286

Court of Appeal (Qld)|1999-09-24|Before: McPherson JA, Thomas JA, Cullinane J, Chesterman J

View original source

At a glance

Source facts

Court

Court of Appeal (Qld)

Decision date

1999-09-24

Before

McPherson JA, Thomas JA, Cullinane J, Chesterman J

Source

Original judgment source is linked above.

Judgment (33 paragraphs)

[1]

1 THE COURT: The applicant Garth Gadaloff was on 26 October 1998 convicted in the Supreme Court on pleas of guilty to charges (1) of dishonestly applying to his own use a sum of money belonging to Brisbane City Council, with the added circumstances of aggravation that it exceeded $5,000, and that he was an employee of the Council; (2) that he with Narelle Gadaloff engaged in money laundering contrary to s90(1) of the Crimes (Confiscation) Act 1989; and (3) that he also engaged in that offence with a named fellow employee. After the applicant had pleaded guilty, Chesterman J heard submissions from counsel and, on the following day 27 October 1998, sentenced the applicant to imprisonment for eight years on count 1, and for four years to be served concurrently on counts 2 and 3. His Honour also sentenced the applicant to concurrent terms of imprisonment for one year on two charges of possessing tainted property, which had with the consent of the applicant been removed from the magistrates court, and to which the applicant also pleaded guilty.

[2]

2 On the same occasion, his Honour sentenced Narelle Gadaloff, who is the wife of the applicant, to imprisonment for two years for money laundering, with concurrent terms of one year each in respect of two charges of possessing tainted property, to all of which she had also pleaded guilty on that occasion. Applications dated respectively 28 October and 4 November 1998 (CA 384 and 395 of 1998) by the applicant and his wife for leave to appeal against those sentences were heard and dismissed by the Court of Appeal on 23 November 1998.

[18]

11 It may be accepted that Mr Boe was initially enthusiastic about the prospects of defending the charges, and of obtaining funds for doing so, or so he led the applicant to believe. Having viewed the video film of the applicant which the Council had obtained, he at first formed the opinion that it failed to establish the guilt of the applicant. The real problem for the defence, as perceived by Boe, was, however, to account for the "assets-rich" position of the applicant and his wife. Unless some reliable alternative explanation could be offered for the apparently disproportionate wealth of the applicant or his wife, a jury would, he believed, readily reach a conclusion that the applicant had been misappropriating Council parking meter money. The first question to be considered was whether evidence of their wealth (including the sum of nearly $800,000 in cash in the security deposit boxes) was admissible in the prosecution case against the applicant and his wife, and, on that question, Mr T D Martin SC was briefed to advise. He did so orally in the first instance, and then confirmed his advice in a written opinion dated 1 October 1998. In it, he advised that the existence of the Gadaloffs' assets including their "enormous cash reserves", as he described them, compared with their relatively meagre salaried income, was "admissible as circumstantial evidence and ... highly probative". Mr Martin went on to say that, "in the absence of an explanation in evidence at trial as to the legitimate source of the cash and assets of Mr and Mrs Gadaloff, I believe it is likely that a Weissensteiner direction would be given" (Weissensteiner v The Queen [1993] HCA 65; (1993) 178 CLR 217). By that, counsel said he meant that failure to explain, in circumstances where an innocent person would be expected to offer an explanation, is according to that decision capable logically of being treated as conduct proving or tending to prove guilt. Here, Mr Martin added, if an explanation of the source of the cash and assets was embarked upon, the explanation would need to be convincing to a jury, and would require "cogent independent and/or documentary evidence" in support of the explanation. Otherwise, if the explanation were not convincing, a jury would readily convict.

[21]

14 Whatever the source of this US $1.3 million, Mr Gadaloff claims to have brought the money back with him in a trunk from Frankfurt to Australia where he kept or invested it in the manner described. Unfortunately he has no record or other evidence of his having received it in the way he claims. His aunt is now dead; his cousin Julia cannot be located; and he now has nothing to show that he received the money in Germany. What the applicant said he at one time had in his possession were hidden records of the conversion of US into Australian dollars. Regrettably, he destroyed all those records when the police began searching his house. All he was left with, or has produced to his solicitor or this Court, were copies of telephone statements recording many international calls to Russia and many other places abroad, including Britain, Austria, Germany and elsewhere. These statements bear dates from 1990 onwards. Of course any member of the public who is prepared to pay for it is free to place telephone calls to almost anywhere in the world. The applicant's telephone statements fall well short of being evidence of the kind Mr Martin SC had in mind when, in his advice on 1 October 1998, he referred to cogent independent or documentary evidence in support of the applicant's explanation of his wealth or its source. Moreover, according to the applicant's account of it, he exchanged the money for Australian dollars over time at various banks in Brisbane and elsewhere. One would have thought it would not have been impossible to locate banking records of exchange transactions having been carried out at banks which the applicant said he attended for that purpose; but he made no inquiries about that possibility. It is difficult to accept that any rational juror would have been persuaded to accept evidence of telephone calls being made to Russia and elsewhere in 1990 or 1991 as sufficient to substantiate the applicant's explanation of his wealth, or even to raise a reasonable doubt that the Council parking meter revenue was not its real source. This is in effect what Mr Boe proceeded to tell the applicant and his wife.

[23]

16 There is a diary note ex AB6 of the conference that took place on 1 October 1998. According to that exhibit, Boe began by summarising the evidence as it appeared from the police brief against the applicant and his wife. He referred to Mr Martin's advice and to the need for them to make a decision on that day as to the course they would be taking. The matter was listed for mention in the Supreme Court on the following day. He said that, in order to defend the prosecution, they needed to provide documents that could prove where the money came from as well as independent evidence from witnesses. There was, he advised, at present no supporting evidence in the documents provided. If the applicant and his wife went to trial, Mr Boe said he considered they would be convicted. He explained that, if they went to trial, a head sentence of 10 years could be expected for the applicant without any recommendation for parole, and that the sentence for Narelle Gadaloff would be three to five years with no parole recommendation instead of two and a half to three years. If they pleaded guilty there was a chance they would keep the house, and a "slim" chance of keeping Narelle out of gaol with a suspended sentence. In the course of the conference, which was interrupted several times to enable the Gadaloffs to go away and consider their position, Boe telephoned Mr Fuller of counsel for the Crown, who confirmed that the prosecution would be seeking a 2½ to 3 year sentence in the case of Mrs Gadaloff with no early recommendation for parole. He was asked to confirm this in writing and he did so in a facsimile which was accompanied by a written statement from the Council to the effect that if the Gadaloffs "entered guilty pleas tomorrow" and proceeded promptly to sentencing, the Council would not request Mr Fuller to seek a custodial sentence in respect of Mrs Gadaloff. The Council would be prepared to settle the civil proceedings, but on terms that the claim be admitted and any interest of the applicant and his wife in their extensive property be surrendered "save for the matrimonial home at 29 Denver Road".

[27]

20 The applicant submitted that the Council was never in a position to prove how much money had been taken and by whom. There were, he said, others who were helping themselves to parking meter money at that time. The insuperable obstacle in the way of conducting a successful defence nevertheless remained the overwhelming difficulty of satisfactorily explaining the very considerable assets in the possession or power of the applicant and his wife. There must be few jurors or anyone else in Australia who have been paid $1.3 million in cash by their aunts. Before us, the applicant suggested that it was the duty of the solicitor to assemble the evidence required to verify the applicant's assertion that he had received the money from his Russian relatives. Plainly, however, the solicitor must, at the very least, be told where to look and what to look for. There is no indication that anything was ever given to other members of the Gadaloff family as their share of the family fortune. Nothing tangible by way of dates, places or occasion was ever provided to Mr Boe. What is perhaps more to the point, no details were given of banking institutions where or when the amount of US $1.3 million was changed into Australian dollars. It was not part of the duty of the solicitors, unless instructed and paid to do so, to make inquiries at every bank across the country to find out if they had any record of the applicant or anyone else having exchanged currency there over the years in question. The only bank which the applicant specifically identified as a place at which he engaged in some of the currency exchanges was the Commonwealth Bank in the Queen Street Mall, Brisbane. He made no inquiries there to see if he was remembered as having exchanged any amounts, because, he said, no one would have remembered his having done so. The exchange process was, he claimed, carried out in amounts always of less than $10,000 because the applicant did not want the government "snooping around" his business, and it involved using banks as far afield as Hobart and South Australia. However, the applicant did not explain the methods used to transmit the money to those places beyond saying that there were records of "dozens" of telephone calls having been placed by him for "years and years" about exchange rates. In evidence, before us, he seemed unwilling to condescend to detail. He said the task of inquiring whether the banks with which he had done business had retained any records of such transactions just seemed to him to be "insurmountable". If that was so, he could hardly have expected his solicitors to undertake it. His affidavit material on this application is replete with detail about alleged wrongdoings on the part of the Council and its employees, but scant of particulars about the money from his Russian relatives, its origins, and the process of exchanging into local currency in Australia.

[32]

25 Exhibit AB-A2 does, however, disclose the applicant's intense hostility toward the Brisbane City Council. Such an attitude is understandable having regard to the alacrity with which the Council withdrew its earlier expressed statement of intention to except the matrimonial home from the assets it claimed to retain in satisfaction of its civil claim in action no 7649 of 1997. It did so soon after Boe communicated the applicant's intention of pleading guilty to the offences charged. Even after it had done so, however, the applicant had ample opportunity to change his previously declared intention of pleading guilty to the charges against him. Despite knowing what the Council had done, he pleaded guilty to all of the charges on which he was arraigned on 26 October 1998. We are satisfied that he did so in the exercise of a free choice in his own interests. There is no reason to doubt that heavy financial and family pressures were operating on him and causing him stress at the time. Being under stress or tension may, as Lee J said in R v Chiron [1980] 1 NSWLR 218, 241, of itself induce a desire to confess misdeeds which might otherwise be held in check; but the applicant's pleas of guilty on 26 October were, on the impression we have formed of the evidence, not induced by any intimidation, duress, improper pressure or harassment by his solicitors or anyone else, but were the product of his realising that he was, or would be proved to be, guilty at trial. It is true that he also complained of two or more occasions on which he was either threatened or assaulted in the period after being dismissed from his employment; but there is no evidence capable of justifying his suspicion that the Council was responsible for those actions. Nor is there any reason for suspecting that those incidents materially influenced his decision to plead guilty on the date in question. If, as he believed, he still held a "dangerous" card against the Council, it was one that he did not play, or that failed to deter the prosecution.