House money source ‘unknown’

Press, 25 November 1982, Page 6

House money source ‘unknown’

PA Auckland A Rotorua architect yesterday told the Australian Royal Commission into drug trafficking that he did not know the sources, of the $250,000 for the construction •of the luxury Bay of Islands house of the convicted drug leader, Alexander James Sinclair (formerly Terence John Clark). •• v • • Mr John Leary, of Okere Falls, Rotorua, was the only witness to be heard in public on the third day of .the commission’s Auckland sittings. The one-man commission. Mr Justice Stewart, which has heard evidence in Australia, is investigating the financial, professional, and other help given in New • Zealand to Sinclair.

Sinclair was. convicted in Lancaster, England, last year of the murder of Christopher Martin Johnstone, formerly .of Auckland, and also for drug offences. Mr Leary told Mr D. S. Morris, counsel assisting the . commission, that he had made, a valuation of the property at Okiatd Point, near Russell, at the request . of his, brother, an Auckland ' lawyer; Mr Eb Leary. As a result; he had a’telephone /ball from’ Sinclair , to go to, the Bay of Islands' to.discuss ' the building of a hew house: •: Mr Leary said he-was not present: at anv discussions

involving the finance or the purchase money or its source. He later . received instructions to draw up plans and make the necessary documentation for the building of the house. Mr Leary said Sinclair told him -that he would like to spend $250,000 on the house. He (Mr Leary) had. been given an- "open hand,? but any expenditure above' that amount .would have to be approved by Sinclair. Mr Leary said he overheard the. terms of the sale of the lease of the land at $30,000. His brother and a fellow lawyer, Mr Bill Boyd, of T. J. Doole and Associates, a Parnell law firm, were also present. The two lawyers were acting for Sinclair at that, stage. Mr Boyd did the conveyancing. Mr Leary agreed with Mr Morris that , was a large sum of money to spend, but he had not made inquiries of Sinclair’s ability to pay. “He told me himself he was in business,” Mr Leary ibid the commission. “Import and export of fish and furniture were two of the things he mentioned.” . . Mr Leary said his brother had told , him that Sinclair 7 had been acquitted on a drugs charge. - . .. Mr Morris: When this man -told you he imports and exports, did it not cross your mind about the drugs

. charge? Mr Leary: No. , Mr Leary asked for a i $lOO9 retaining fee, which was paid in cash. He insisted , on cash because he had “had : enough dud cheques the year . before.” He said there was another ;• $2OO and a. further $lOO ’ received in cash at later . dates. That was the total he . received in cash. , v Mr Leary said he opened up a building account in his , name to pay the workers at the site. The men were paid . cash and the account was , funded by deposits from T. J.

Doole and Associates. He said he had gone to Australia .twice since he • knew Sinclair, the first time B to discuss the house and to buy building materials, the ;.. second for a holiday. Mr Leary said he always believed that the account was funded by T. J. Doole ? and Associates. |. ■’ To questions by his HonI our, Mr Leary said he was on | a 10 per cent fee of the total I cost of the building, which [.would have amounted to l ';525,000. ’ He, had received I three- payments of $6OOO he I ! had requested from T. J. I Doole. This money was paid j to him personally. Mr Leary denied a suggestion by Mr Morris that a previous witness had - recalled to the commission that Mr Leary had said that when the job was finished he was going to destroy all the ’ documents relating to it. He also denied he had told a former employee that he had . seen. Sinclair pull out $5OOO cash Trom his pocket,. . To Mr Morris, Mr Leary denied that he had brought money into New Zealand in a suitcase dr had told 'the ; workers on the house that fluids were coming out of: a solicitor’s trust account to pay for the job. He had not made inquiries into, the source of the funds because he had been told that Sinclair

would put the money into the trust account.

Mr Leary said that in 1980 the Inland Revenue Department told him that any money sent by Sinclair to continue work on the house would be confiscated, but debts could be paid. Mr Leary said he had sought $5OOO as a fee for looking after the property for the last year.

To the question of how he determined the fee of $5OOO, Mr Leary said: “I plucked that figure out of a hat. I thought-that is what I had been worth to him for looking after his place at considerable inconvenience.”

He had not yet received that payment for which he billed Sinclair.

Mr Leary said the building account was now empty. He estimated that $250,000 had been spent on the property. Asked by his Honour what the house would sell for, Mr Leary said, “I don’t know. I don’t think anyone would want it.”

Pressed for clarification, he said the house was too big and it was starting to deteriorate.

At the end of the sitting yesterday, Mr Leary produced photo-copies of bank statements relating to the building account. . The commission will continue today.