L – ATHOL JAMES’S RENOVATIONS IN 1993

Julia Gillard responds to an advertisement

143. From about March 1993 a Melbourne builder, Athol James, carried out building works at Julia Gillard’s house at 36 St Phillip St, Abbotsford. He did this because Julia Gillard responded to an advertisement he placed in the local paper. Julia Gillard said in her interview with Peter Gordon and Geoff Shaw on 11 September 1995 that she obtained three quotes and picked the lowest one, from Athol James. Athol James initially gave a number of quotes for replacing a window in the living room with four hinged doors and making other repairs. In due course he also renovated the floors.237 Athol James was punctilious in his record keeping, issuing written quotes and invoices.

Bruce Wilson funds Athol James

_{237 Gillard MFI-1, p 148.}

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The job was very clear in my mind because as a builder it has been over the years said to us, “They don’t build houses like they used to”. And I’ve said each time, “Yeah, it’s just as well they don’t”. And I quoted the state of the house in Abbotsford.

Julia Gillard’s denial

147. Julia Gillard denied this. In her first witness statement she said: 244 ‘I paid Athol by cheque. I never said to Athol that Bruce Wilson was paying for his work and I did not obtain cash from Bruce Wilson for the work Athol James undertook.’

Deficiencies in Athol James’s recollection

148. Senior counsel for Julia Gillard submitted that Athol James was first asked to remember the events of 1993 in 2013. That was true.245 But it does not follow that he was incapable of remembering correctly the essential parts of his testimony.

149. Senior counsel for Julia Gillard submitted that it was unlikely that Julia Gillard would have given Athol James ‘detail about intimate personal financial matters such as allegedly telling him that Mr Wilson was going to pay for the work, that he would provide cash to Ms Gillard and then Ms Gillard would pay Mr James by cheque.’246 But stating how payment would be effected is not an ‘intimate personal financial matter’. And even if it were, Julia Gillard got on well with Athol James. In the 11 September 1995 interview she said that he ‘sort of lived at my place for a

_{244 Julia Gillard, witness statement 1, 10/6/14, para 5.
245 Athol James, 11/6/14, T:337.30-35.
246 Outline of Submissions on behalf of Ms Julia Gillard, 17/11/14, para 21.}

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substantial period of time’.247 Counsel for Julia Gillard’s submission that it was ‘inherently unlikely’ that Athol James was told these things is not valid.

150. Senior counsel for Julia Gillard next submitted that she paid each of Athol James’s invoices by cheque. That is true.248 They then submitted:249

     That evidence does not support, and tends to contradict, the evidence of Mr James that Ms Gillard received cash in his presence for the purpose of paying Mr James’ accounts. More significantly, Ms Gillard is unable to go to those records to refute the claims.

151. On the last point, it may equally be said that it is not possible to go to the records to see whether they confirm the claims. That does not of itself absolve the Commission from the duty to make a finding one way or the other, if possible, on the basis of two bodies of clear but conflicting evidence. Of course it is accepted that Julia Gillard has made all possible efforts to locate the bank records. So has the Commission. Underlying this submission seems to be a suggestion that if Julia Gillard were given cash by Bruce Wilson at her home in the presence of Athol James, she could have used it to pay him at once instead of paying the cash into the bank and giving him a cheque later. That suggestion was then amplified:250

     It is inherently unlikely that if cash was provided in his presence as alleged by Mr James for the purpose of paying for renovations, that money would

_{247 Gillard MFI-1, p 149.
248 Athol James, 11/6/14, T:340.8-11; Julia Gillard, 10/9/14, T:840.19.
249 Outline of Submissions on behalf of Ms Julia Gillard, 17/11/14, para 6. 250 Outline of Submissions on behalf of Ms Julia Gillard, 17/11/14, para 22.}

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have been deposited into a bank account and payment then made by cheque. Payment by cheque is far more consistent with Ms Gillard’s account that she paid for all her renovations from her own money which was either derived from a bank loan or from her salary.251 It is known that each and every payment made by Ms Gillard to Mr James was made by cheque.252 Ms Gillard’s evidence was that all the renovations were paid by cheque.253 If, as Mr James claims, the cash was available and Mr James was present when the cash was available, it is improbable that Ms Gillard would bank that money purely so she could pay him by cheque.

152. Julia Gillard answered this submission herself: ‘I am sure that in our big wide world that there are tradespeople who take cash and don’t issue receipts. It was my practice to pay by cheque.’254 Further, it is unlikely that Athol James would have had an invoice ready-prepared for Julia Gillard to pay out of the wads of cash that suddenly made an unexpected appearance on two occasions.

153. Then senior counsel for Julia Gillard submitted that there ‘were a number of significant inconsistencies’ in Athol James’s evidence ‘that go to the reliability of this account’.255

154. The first of the ‘significant inconsistencies’ is that Athol James first said he would not accept cash as payment,256 but then ‘conceded that cash payments would be “good”’.257 When the whole passage from which the two short pieces of transcript

_{251 Julia Gillard, witness statement 4, 10/9/14, para 26. 252 Athol James, 11/6/14, T:340.8-11.
253 Julia Gillard, 10/9/14, T:840.23.
254 Julia Gillard, 10/9/14, T:843.1-3.}

_{255 Outline of Submissions on behalf of Ms Julia Gillard, 17/11/14, para 23. 256 Athol James, 11/6/14, T:335.35-37.}

_{257 Outline of Submissions on behalf of Ms Julia Gillard, 17/11/14, para 23(a), referring to Athol James, 11/6/14, T:336.13.}

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referred to by senior counsel for Julia Gillard is read, no significant inconsistency emerges.258

Q. Was it your practice to insist on payment by cheque?

A. Yes. I didn’t insist on it but that’s the way we always received it.

Q. So if someone had offered cash or had cash available to pay you, would you accept it?

A. No.

Q. So if someone said, “I’ve got $2,000 here in cash to pay your invoice,” you’d say, “I won’t accept that. I insist on a cheque”; is that your evidence?

A. Well we normally didn’t have any – if it was cash it’d only come off the invoice, it wouldn’t be something hidden.

Q. No, I didn’t suggest there was anything improper about it.

A. No.

Q. No doubt you would declare the cash received in the same way you would declare payment received by cheque?

A. That’s true.

Q. But did you have some difficulty with the concept of receiving cash payment?

A. No.

Q. Would you have regarded cash payment as preferable, particularly if it was to be made immediately?

A. Oh, it would be good.

155. To say that payment by cash would have been ‘good’ is not inconsistent with saying that payment was always by cheque. And to say that payment by cash would have been good is not inconsistent with saying it would not have been accepted,

_{258 Athol James, 11/6/14, T:335.31-336.13.}

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particularly since payment by cash had apparently never been offered; even if there is an inconsistency, that latter circumstance means it is not a significant one. In this and other respects one must remember that the witness was 84 years old, giving evidence after a tiring journey from Melbourne, and talking about his practice 21 years ago.

156. The second of the ‘significant inconsistencies’ relied on by senior counsel for Julia Gillard is that in his statement to the Commission, Athol James said that he did not remember going to the Abbotsford property to quote for the job, but in his oral evidence he said he did have that recollection.259 Athol James’s explanation was that since preparing his statement he had seen a photograph of the house and he now recalled his first visit. He said: ‘it became clear to me when I saw the house and things come back to you after a time.’260 That is a satisfactory explanation, according with day-to-day human experience.

157. The third of the ‘significant inconsistencies’ is that Athol James initially stated that the five or so invoices he rendered to Julia Gillard during 1993 were posted to her,261 but he subsequently stated that he believed that he handed Julia Gillard the invoices.262 When this discrepancy was pointed out to him he said that it was

_{259 Athol James, 11/6/14, T:341.26-41. 260 Athol James, 11/6/14, T:341.45-46 261 Athol James, 11/6/14, T:336.24-25. 262 Athol James, 11/6/14, T:343.3-6.}

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162. Senior counsel for Bruce Wilson advanced a similar analysis in more detail.272 Counsel assisting answered this argument as follows:273

Cheque numbers 802203 and 802207 for the amounts of $2,000 were drawn on the Association’s cheque account in favour of R Blewitt on 23 December 1992 and 5 April 1993 respectively.274 On 13 May 1993, Mr Blewitt paid Slater & Gordon the amount of $2,000 in respect of disbursements.275 The remaining $2,000 remains unaccounted for.

Similarly, cheque number 802206 dated 18 March 1993 for the amount of $6,000 was drawn on the Association’s cheque account in favour of R Blewitt.276 This amount was received by Mr Blewitt on the same day.277 On 3 April 1993, the amount of $6,000 was withdrawn from Mr Blewitt’s account.278 This amount also remains unaccounted for.

On 10 February 1993, Mr Blewitt banked a cheque made out to him for the amount of $25,000 drawn on the Association’s cheque account.279 Of this amount, $23,000 was subsequently used to pay the deposit for the purchase of the Kerr Street property. The remaining $2,000 remains unaccounted for.

Mr Blewitt gave evidence that around this time he had a recollection of Mr Wilson coming to Perth. He said he recalled cashing a cheque and giving Mr Wilson cash.280 Any of the amounts referred to in the preceding paragraphs could have been provided by Ralph Blewitt to Bruce Wilson.

A further cheque for the amount of $50,000 was drawn on the account on 7 September 1993, two weeks after Mr James’ invoice for $2,986 was issued. Mr Blewitt gave evidence that he gave this money to Mr Wilson.281 Mr Wilson accepted that he had received $15,000 of this

_{272 Submission on behalf of Bruce Wilson, 14/11/14, paras 6.2-6.6.
273 Counsel Assisting’s Submissions in Reply, 25/11/14, paras 45-49. 274 Ian Cambridge, witness statement dated 27/5/14, 10/6/14, para 325. 275 Blewitt MFI-1, p 44.
276 Ian Cambridge, witness statement dated 27/05/14, 10/6/14, para 325. 277 Blewitt MFI-1, p55.
278 Blewitt MFI-1, p55.
279 Blewitt MFI-1, p 118.
280 Ralph Blewitt, 12/05/14, T:50.21-22.
281 Ralph Blewitt, 12/05/14, T:71.19-23.}

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of a significantly younger man: he had only just retired. His demeanour in the witness box was excellent. He seemed very alert and intelligent, despite the fatigue of a trip from Melbourne to Sydney and a certain weariness towards the end of his stay in the witness box, which lasted about an hour and involved questioning by three experienced senior counsel.

Assessing Athol James’s testimony

170. On what basis could Athol James’s evidence be rejected?

171. One possibility is that he was a liar, motivated by malice towards Julia Gillard or self-interest. The other possibility is that though not deliberately untruthful, he was unreliable on the question of receiving two wads of cash and hearing Julia Gillard say that Bruce Wilson was paying for the work.

172. There is nothing whatever to support the view that Athol James was a liar. Indeed, senior counsel for Julia Gillard and senior counsel for Bruce Wilson did not submit that he was, and they certainly never cross-examined along those lines. It is plain that he was giving evidence out of duty, not desire. As already noted, he gave a satisfactory explanation as to why his memory of the particular job was ‘very clear’. Julia Gillard’s description of him as ‘having sort of lived’ at her place for a substantial period of time suggests that they got on reasonably well. Julia Gillard very handsomely said of him that ‘he did the work diligently and

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Gillard’s long and distinguished political career was soon to begin blooming. Sometimes witnesses can convince themselves by some obscure process that an event happened when it did not, or did not happen when it did, but this usually flows from self- interest. There was no self-interest prompting Athol James into anything of this kind. It is submitted that the points of detailed criticism mentioned above do not require the rejection of Athol James as a reliable witness. If anything, his evidence would have been less credible if he had professed to have a precise and perfectly self-consistent recollection of every detail, as if his mind had the precision of a perfectly engineered machine. He was a careful and meticulous person in business, as appears from the records he maintained. Under skilled and searching cross- examination, he gave his evidence in a clear, cautious and responsible fashion. Athol James had every opportunity to see and hear transactions involving Bruce Wilson. His memory appeared to be clear and accurate. His articulation of what he remembered made him a most compelling witness.

Assessing Julia Gillard’s testimony

174. But, it might be asked, why should Julia Gillard’s denials not be accepted? Why should her generally sound and credible evidence be rejected in this one instance? The best answer to those questions is a blunt one. Julia Gillard had been maintaining ever since 1995, in one way or another, that she had paid for all the repairs to her house. She did so on 11 September 1995 in the interview with Peter Gordon and Geoff Shaw. In that interview she said in a qualified way: ‘I believe all of the work was paid for

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by me.’287 She did so again in her press conference of 23 August 2012, this time in an unqualified way: ‘I paid for the renovations on my home in St Phillip Street in Abbotsford.’288 She did so once more in her press conference of 26 November 2012: ‘I am confident that I paid for the renovations on my home.’289 She coupled that statement of confidence with the following ringing challenge: ‘If anybody has a piece of evidence that says I knowingly received money to which I was not entitled for my renovations, please feel free to get it out. If anybody’s got it, it’s only been 20 years.’290

175. Athol James did have that piece of evidence. Its existence was unknown in 1995 and during the 2012 press conferences. But it was not he who responded to the challenge. When the Victorian police officers traced him through Julia Gillard’s reference to him in the 11 September 1995 interview and questioned him he provided the piece of evidence which she challenged ‘anybody’ to produce. He did not volunteer it. The detectives found it by their own exertions.

176. That placed her in an unenviable position. When at the 11 September 1995 meeting, she put the matter in terms of belief, not certainty, in the passage referred to above, there was some room left to manoeuvre. On that occasion she also said: ‘I can’t categorically rule out that something at my house didn’t get paid

_{287 Gillard MFI-1, p 150 (emphasis added). 288 Gillard MFI-1, p 160. See also p 167. 289 Gillard MFI-1, p 178. See also p 181. 290 Gillard MFI-1, p 178.}

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for by the association or something at my house didn’t get paid for by the union.’291 That, too, left room for manoeuvre. But in later statements she said in effect that further consideration in the light of a thorough examination of her documents removed any doubt. One problem with this is that it ignores the real issue. The real issue is not: ‘Did Julia Gillard pay those who worked on her house in full by cheque?’ It is agreed on all hands that she did. The real issue is: ‘What was the source of the money she used to pay them?’ That latter question may well not be capable of answer by simply examining economically phrased documents from tradesmen and comparing them with impressions of what work was done. Her evidence to the Commission did confront that latter question. She answered it by saying: ‘All payments made for renovations on my property were from my own money which was either derived from a loan from the bank or my salary.’292 Athol James contradicted that. Julia Gillard’s position at the 11 September 1995 interview was compatible with Athol James’s evidence. But her later positions were not. By adopting those positions she had dug herself into an inflexible trench which she could not manoeuvre away from.

177. Julia Gillard had two available courses, both dangerous. One was to admit that her memory in 2012 was not perfect and that the tentativeness of 1995 had been the correct position. Had she followed that course, she could have said that she did not remember the incidents that Athol James testified to, that she

_{291 Gillard MFI-1, p 153.
292 Julia Gillard, witness statement 4, 10/9/13, para 26.}

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doubted that they happened, but that she could not absolutely deny them. The other was to deny completely what Athol James said. It is regrettable that matters have come to this. To take the first course would have detrimental aspects: she would have had to backtrack from earlier statements. But to take the second placed her in a direct contest of probative value with Athol James. That is always a perilous position for a witness. He said he remembered certain events. She said, not that she does not remember the events, but that they never happened. He had no interest to serve in saying what he said. He had no advantage to be gained. It was nothing to him who paid for the renovations. He was a reluctant witness. She, on the other hand, had every reason to deny what he said. What he said was fatal to the stand she took at the Prime Minister’s press conferences in 2012. She could either climb down or fight. She chose to fight. Thus she said:293

Q. You told him on a number of occasions that Mr Wilson was paying for the renovations?

A. That’s completely untrue.

Q. Because Mr Wilson was in fact paying for the renovations - -

A. That’s just not true, Mr Stoljar.

Q. - - that’s right, isn’t it?

A. Just not true.

Q. You also told Mr James that as Bruce brought you cash, you would be in a position to pay his bill?

A. That’s just not true. 293 Julia Gillard, 10/9/14, T:850.23-36.

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178. Julia Gillard was in many ways a satisfactory witness. But the manner in which she uttered these words denying what Athol James said seemed to be excessive, forced, and asseverated. There was an element of acting in her demeanour. She delivered those words in a dramatic and angry way, but the delivery fell flat. She protested too much. She chose to fight him. It was a fight in which there could be only one winner. Unfortunately, she lost that fight. Athol James’s testimony is to be accepted over hers. He was a witness of truth. His version of events was correct.

179. There is a benign explanation for Julia Gillard’s testimony and there is a less benign explanation. Behind each explanation lies the fact that, unlike Athol James, she had a strong motive to see her version of events accepted.

180. The benign explanation is that the testimony proceeded from velleity. She wanted it to be the case that she had paid for all the renovation work. Over 20 years, subconsciously, she convinced herself that it was the case. So dearly cherished an outcome became inexpugnably part of her mentality. The advent of Athol James’s evidence collided with the mental state she had developed. Hence she rejected it. And she necessarily also had to reject more general propositions, as when she said that she had never seen Bruce Wilson with significant amounts of cash.294

181. The less benign explanation is that she knew her testimony was false. It might have been knowingly false in the sense that she

_{294 Julia Gillard, 10/9/14, T:849.36-37.}

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remembered the key events happening, but chose to deny them. Or it might have been knowingly false in the sense that she could not remember one way or the other whether the key events happened, but chose to deny them. In each case she was telling a knowing untruth about her mental state. It is not possible to decide which it was, and it does not matter which it was. Athol James signed his statement on 23 May 2014. Julia Gillard became aware of it soon afterwards. It must have come as a great shock. She provided a draft witness statement denying the relevant allegations before he gave oral evidence on 11 June 2014. That draft witness statement preserved consistency with her earlier position that she had paid for all her own renovations. Julia Gillard was very intelligent. She was very determined. She was strong willed. She was proud. She had considerable self- perception. These factors make it very unlikely that her testimony proceeded only from some unconscious transmogrification of the truth proceeding from velleity. She knew that Athol James’s testimony was inconsistent with the position she had developed over the years up to 2012. One solution was to accommodate his testimony by climbing down to the extent of reverting to her 1995 position. But a cleaner solution was absolute denial. She had strong motives to adopt the cleaner solution. It would be very hard for her to admit error in a stance she had been maintaining throughout her public life. It would be very hard to make any concessions to her numerous enemies. It would be very hard for her to complicate the simple stance of denial which she had adopted during her public life with any qualifications or exceptions – for once one retreat was made, her enemies would suspect that others might soon follow. She must have thought that

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her status in public life would outweigh the word of an utterly obscure and aged man like Athol James. That mental state corresponded with a submission by her own counsel that the Commission should ‘give significant weight to Ms Gillard’s good character and reputation. The Commission has little or no evidence before it of the character or reputation of Messrs James or Hem. In the context of these proceedings there is no reason to prefer their evidence over that of Ms Gillard.’295 Taking together the incorrectness of her evidence, the strength of her motives, and her demeanour in giving evidence, the inference is strong that she consciously chose to adopt the clean course of flat denial.