Section: 2.4.2 Transactions by some Ministers and others
Part: (e)
Hinze was chairman of the Albert Shire Council from 1957 until 1966 when he was elected to Parliament as the member for the South Coast. He was elevated to Cabinet on 24 October, 1974, as Minister for Local Government and Electricity. On 23 December 1974, he became the Minister for Local Government and Main Roads too, and on 29 July 1980 he also became Minister for Police. On 23 December, 1980, Racing administration in Queensland was added to his responsibilities. He lost the Police portfolio on 6 December, 1982.He was also a businessman with diverse interests and, with his wife, controlled a number of private companies. While a Minister of the Crown, Hinze, his wife or one or other of their companies was paid or lent more than $1.5 million by a number of individuals and companies involved in dealings with the Government, often in matters for which Hinze was ministerially responsible. In some instances, according to his evidence,the sources of the money were total strangers whose very existence has not been able to be verified. Some of those with whom Hinze dealt, and with whom he was friendly, were people of great commercial expertise and extreme wealth. Yet many of their transactions with Hinze shared the common characteristic that they were utterly non-commercial. Proper documentation was rare and in some cases there were no documents or documents were backdated, and loans were granted without security. Interest was another point of regular disinterest, and few formal arrangements were made for loans to be repaid.
Between 1 July, 1983, and 30 June, 1987, a total of $815,056 described as “loans forgiven” and “loans written off’ was processed through the Hinze Group financial accounts to the credit of individual accounts of Hinze and his wife. The details are as follows:
Additionally, loans totalling a further $200,904 were forgiven or written off in the financial accounts of various Hinze companies by 30 June, 1987:
As at 30 June, 1987, the financial accounts of various Hinze group companies showed that $500,000 remained outstanding in respect of the following loans. Some, at least, had either been forgiven or were not intended to be repaid:
Hinze, his wife and family companies also received other benefits, for example, the exclusive use of a Gold Coast penthouse for almost three years, rent free, and later the exclusive use of the same penthouse at a rental of $1.00 per month with a five year option to purchase the property at a price almost certain to be far less than its value if the option was exercised. Soon after Hinze lost his place in Cabinet after the current Premier took office in late 1987 during the course of this Inquiry, interests associated with Hinze received a further windfall of $1.8 million in a transaction which was undocumented until later and related to land in which neither Hinze, his wife, nor any of their companies had had any beneficial interest. What follows are some details of some transactions, in which Hinze, his wife and family companies had an interest.
(i) Kornhauser; the Paradise Centre Project
Hinze and Kornhauser had been close friends for some time. In the late 1970's Kornhauser set out to transform the old Surfers Paradise Hotel site in the heart of the Gold Coast into a major hotel, accommodation, car parking, entertainment and commercial complex known as the Paradise Centre. A Kornhauser controlled company, H.S.P. (Nominees) Pty. Limited, owned the Surfers Paradise Hotel land and adjoining land.By August, 1979, Kornhauser was faced with two problems. There was opposition within the Gold Coast Council, which was re-established after an Administrator (who had carried on the Council's business in the late 1970's) had approved the project. Secondly, there was the concern whether the project was permissible or workable under existing legislation.Hinze made a forceful telephone call to the Town Clerk while the Council was meeting that month, which effectively ended the Council's opposition.Between August and November, Hinze, in his capacity as Minister for Local Government and Main Roads, wrote to the Minister responsible for the material legislation, the then Minister for Justice and Attorney-General, Lickiss, urging a review of the legislation and amendments to the legislation to allow the Kornhauser development to proceed.
On 14 April, 1980, Cabinet decided that approval be given to the introduction of the Registration of Plans (H.S.P. (Nominees) Pty Limited) Enabling Bill, which was passed by Parliament three days later and became law on 12 May. On 16 April, 1980, between the Cabinet decision and before the Bill had passed through Parliament, H.S.P. Nominees Pty. Limited made a payment of $200,000 through a Kornhauser intermediary to Lowanna Pty. Ltd., a Hinze family company, which passed the money to Waverley Park Stud Pty. Ltd., another Hinze family company, Lowanna Pty. Ltd. gave Kornhauser’s intermediary security for the loan, and Hinze and his wife also guaranteed the loan. However, there was no public record of the transaction, and the use of the Kornhauser intermediary meant that even the internal records of the Hinze group omitted any reference to H.S.P. Nominees Pty. Limited, the Kornhauser company associated with the Paradise Centre project. Hinze denied in evidence any connection between the loan and the surrounding events. On 23 July, 1980, Hinze assumed the Police portfolio, in addition to his other responsibilities. As Minister for Police, he became associated with the proposal for a casino licence at the Gold Coast, including the application with which Kornhauser was associated. Reference had already been made to some aspects of that matter, including Hinze’s membership of the Ministerial Committee appointed to supervise the implementation of the Cabinet decision to introduce casinos. Applications for the casino licence proposed for the Gold Coast closed at the end of July, 1981. Twentyeight applications were received including one from Paradise Corporation of Queensland Pty. Ltd., in which H.S.P. (Nominees) Pty. Limited was a significant shareholder. The panel of Treasury and Works Department officials assisting the Ministerial Committee evaluated the applications, and eliminated 24 of the 28 entries, including Paradise Corporation of Queensland Pty. Ltd. The remaining four applicants were then recommended by the panel to the Ministerial Committee for its assessment. The Ministerial Committee was of the opinion that three of the applicants eliminated by the panel should be added to the short list, including Paradise Corporation of Queensland Pty. Ltd. Two other applicants were later added by Cabinet. On 29 September, 1981, the $200,000 loan was repaid with interest.
On 7 February, 1982, Hinze and Lewis dined together. Hinze was to send a letter the following day to the then Treasurer, Edwards. Lewis made changes to the draft of the letter which presented a more favourable impression of Kornhauser. However, early in March, 1982, the Paradise Corporation of Queensland Pty. Ltd. application was withdrawn.In January, 1983, Kornhauser wrote to Bjelke-Petersen asking for further legislation to enable Stage 2 of the Paradise Centre project to proceed, pointing out that the legislation would assist him greatly in obtaining funding for the project. Kornhauser sent a copy of his letter to Bjelke-Petersen to Hinze, and sought his assistance. On 24 May 1983, a member of Kornhauser’s staff sent a lengthy submission in support of further legislation to the Co-ordinator General at the Premier’s Department.On 28 June, 1983, Cabinet gave approval for the preparation of a Bill to cover the proposed stage 2 of the Paradise Centre. On 17 November, the then Minister for Justice and Attorney-General, whose department was responsible for the legislation recommended that Cabinet approve a draft Bill, the Registration of Plans (Stage 2) (H.S.P. [Nominees) Pty Limited) Enabling Bill, which was passed by Parliament on 30 November. On 15 November, 1983, two days before the Cabinet decision, H.S.P. (Nominees) Pty. Limited paid $50,000 to a Hinze family company. The sum was recorded in the books of that company as a loan. No interest was paid and no repayments were made until February, 1988, after Hinze had been omitted from Cabinet by the current Premier when he took office in the course of this Inquiry.
(ii) Gemini Court
In mid 1980 Lowanna Pty. Ltd. had obtained options over a number of parcels of land at Burleigh, the zoning of which permitted the construction of home units, and had paid deposits on some contracts to purchase portions of the land. There was some local opposition to a “high-rise” development. The present Mrs. Hinze, then Fay Jeanette McQuillan, had been involved in the acquisition of the rights over the property, and continued to be interested in the project as it developed. (It is convenient to refer throughout to the present Mrs. Hinze by that description).Hinze also participated in the project, although public records did not indicate that he had any interest in it.There were four companies involved. Colwal Pty. Ltd., which later was to take an assignment of Lowanna’s interests and acquire the land, was incorporated in June, 1980. The shareholders were the solicitor for Hinze and his family interests, John David Andrew Punch, and a law clerk employed by the solicitor, and the directors were Hinze’s accountant, Robert Eugene Murphy, and Mrs. Hinze.Documents were prepared for the transfer of the shares in Colwal Pty. Ltd. to Hinze, but the transfer was never recorded. Kanni Pty. Ltd. is another Hinze family company, which had Murphy and Mrs. Hinze as its directors in the latter part of 1980. On 30 October, Kanni Pty. Ltd. was appointed the trustee of a discretionary trust, the Abeyance Trust, the potential beneficiaries of which were Hinze, Mrs. Hinze and the Hinze company, Waverley Park Stud Pty. Ltd. The other two companies involved were Nathan Investments Pty. Ltd., a company associated with Thiess, and Eblana Pty. Ltd., a company associated with a major Gold Coast builder and entrepreneur, Ronald, Ewan McMaster.
In November, 1980, Lowanna assigned its rights over the land to Colwal, which later refunded to Lowanna the amount of the deposits which it had paid. On 20 November, Hinze, Mrs. Hinze, Thiess, McMaster and others travelled to Canberra where a joint venture agreement was entered into between Colwal Pty. Ltd., Kanni Pty. Ltd., Nathan Investments Pty. Ltd., and Eblana Pty. Ltd. The joint venture agreement provided for profits and losses to be shared equally between Kanni Pty. Ltd., Nathan Investments Pty. Ltd. and Eblana Pty. Ltd., and made provision for a management committee of which Hinze was appointed a member. Colwal’s role was to acquire the land, construct the building, and sell the units. In due course, it completed the purchase of the land and repaid to Lowanna the deposits which it had paid, and the project proceeded. As has already been noted, during the second half of 1980, tenders were invited for an authority to prospect coal in the Winchester South area. Prior to the closing date for tenders, 2 January, 1981, one applicant for the authority to prospect was a consortium which included Drayton Mining Development Pty. Ltd., a company with which Thiess was associated. In that month, after a journalist had spoken to him, a solicitor advised Hinze to remove the name of Mrs. Hinze from any public record which associated her with Colwal Pty. Ltd.
Documents were prepared and backdated to show that Mrs. Hinze and Murphy had resigned as directors of Colwal months earlier, had been appointed alternative directors only from 18 September, 1980 to 25 November, 1980, and had been neither directors nor alternate directors since that time. The inaccurate documents were lodged with the Commissioner for Corporate Affairs. On 9 February 198 1, the terms of the Abeyance Trust were varied to remove Hinze as a potential beneficiary. Thereafter the beneficiaries were Mrs. Hinze and Waverley Park Stud Pty. Ltd., in which Hinze owned half the shares. By March 1981, construction of the building was well advanced. In that month, the Winchester South authority to prospect was awarded to the consortium including the Thiess company Drayton Mining Development Pty. Ltd. Hinze attended the Cabinet meeting at which that matter was discussed and participated in the discussion and the decision without disclosure of his association with Thiess. Later, he made statements which, to say the least, did not comprehensively reveal the position in relation to his association with the Gemini Court project. On 11 March, 1982, a deed of variation of the joint venture agreement was executed, new management arrangements were made, and a management committee was empowered to allocate units in the building to any of the joint venturers. On 15 March, Hinze attended a meeting of the management committee at which it was agreed that one penthouse would be reserved for Kanni Pty. Ltd. and one for a company associated with Thiess, Drayton Investments Pty. Ltd.
By June, 1982, Nathan Investments Pty. Ltd. had paid $250,000 to Kanni Pty. Ltd. which was described as a loan. In some documentation, the creditor is shown as Nathan Investments Pty. Ltd., and in other documentation the creditor is shown as Colwal Pty. Ltd. as nominee for the Gemini Court Joint Venture.In March and April, 1982, questions, were raised in Parliament concerning the involvement of Hinze in the Gemini Court project, and reference was made to the topic in the media. According to one report, Hinze told a journalist that neither he nor his family had any connection with Colwal Pty. Ltd. On 2 April, 1982, the first annual return for Colwal Pty. Ltd., which related to the period ended 3 December 1981, was lodged with the Commissioner for Corporate Affairs. The return showed the only shareholders in Colwal Pty. Ltd. as Nathan Investments Pty. Ltd. and Eblana Pty. Ltd. The Gemini Court project was completed by the end of 1982, by which time the Gold Coast property market had fallen considerably. The joint venturers were concerned that a loss would be sustained.Thiess took possession of one of the penthouses and the other was decorated and furnished in accordance with Mrs. Hinze’s requirements and passed into the possession of Hinze and his wife. For almost three years, they retained exclusive possession of that unit and paid the body corporate charges.They paid no rent, although the owner of the unit continued to be shown as Colwal Pty. Ltd. The balance sheet for Colwal Pty. Ltd. as at 30 April 1983 showed liabilities in excess of assets. In May 1984, a further transaction was entered into. Another company, Nikraine Pty. Ltd. was lent $200,000, at least $100,000 of which emanated from a company associated with Thiess. The shareholders and directors of Nikraine Pty. Ltd. were members of Hinze’s solicitors’ firm. Nikraine Pty. Ltd. on-lent the $200,000 to Kanni Pty. Ltd. There was no public record which could have revealed Hinze’s interest in the transaction, although he personally guaranteed repayment of the loan. The security granted by Kanni Pty. Ltd. to Nikraine Pty. Ltd. was an unregistered mortgage over some land owned by Kanni Pty. Ltd. which was already the subject of a registered mortgage and which, in the following years, was the subject of other and registered dealings.
For example, long term leases in favour of other parties were registered over parts of the land, and the registered mortgage was released and another registered mortgage granted over the land to another party. The mortgage in favour of Nikraine Pty. Ltd. remained unregistered throughout. Further, as is later mentioned, the indebtedness of Kanni Pty. Ltd. to Nikraine Pty. Ltd. was gradually written off. Late in 1985, the penthouse occupied by Mr. and Mrs. Hinze was transferred to Camelot Investments Pty. Ltd., another company associated with Thiess, for $350,000. Camelot Investments Pty. Ltd. entered into a transaction with Essvee Pty. Ltd., a company controlled by Mrs. Hinze. Essvee Pty. Ltd. was granted both the tenancy of the unit at a rent of $1.00 per month and an option to be exercised within five years to purchase the unit for $350,000, the same price as was paid for it by Camelot Investments Pty. Ltd. in 1985. According to internal records of family interests associated with Thiess, the arrangement involved a detriment to Camelot Investments Pty. Ltd., as the trustee of a Thiess family trust, in excess of $200,000. Meanwhile, by late 1985, it was apparent that the joint venture had lost a substantial amount. The balance sheet for Colwal Pty. Ltd. as at late September 1985 showed a total deficiency of more than $6 million. Arrangements were made for Eblana Pty. Ltd. to withdraw from the joint venture upon terms which do not require discussion. Effectively, interests associated with Thiess took over the project and the balance of the units, a number of which were still registered in the name of Colwal Pty. Ltd. It seems that by late 1985 it had been informally decided that Kanni Pty. Ltd. would not be required to contribute to the losses of the joint venture, but the arrangement had not been formalized. Early in 1986, Hinze’s solicitors asked Nathan Pty. Ltd. to confirm that neither it nor Kanni Pty. Ltd. had any claim upon the other arising out of the joint venture.
On 18 February, 1986, a reply was received, which included the following passage:
“Nathan has been more than considerate in its dealings with Kanni to date, and
does not wish at this stage to enter into any further paperwork to formally release
Kanni from obligations under the joint venture agreement which may not have
been discharged by Kanni at the date of dissolution of these arrangements.
As indicated to you, it is extremely unlikely that these provisions would ever be
exercised.”
By 30 June, 1986, $100,000 of the indebtedness of Kanni Pty. Ltd. to Nikraine Pty. Ltd. had been written off in internal Hinze records.On 22 January, 1988, Hinze’s solicitor wrote to the Commissioner of Stamp Duties advising that Nikraine Pty. Ltd. did not appear to have any assets or liabilities. Despite what had been said in February 1986, the first demand upon Kanni Pty. Ltd. was made during the course of this Inquiry.On 7 April, 1988, Camelot Investments Pty. Ltd. sold the Gemini Court penthouse over which Essvee Pty. Ltd. had an option to Mrs. Hinze. A deposit of $1,000 was paid, and later a mortgage to secure the balance of $300,000 was executed in favour of Camelot Investments Pty. Ltd. On 9 August, 1988, more than two years after the dissolution of the joint venture, accountants acting on behalf of Thiess’ interests wrote to Kanni Pty. Ltd. asserting that the joint venture accounts as at 30 June 1987 indicated that “a contribution of $2,470,345” was outstanding from Kanni, and asking to be advised of ‘‘. . . a timetable for the settlement of this amount”. By the conclusion of the material section of the evidence at the public sittings of this Inquiry late in 1988, Kanni Pty. Ltd. had not repaid the $250,000 received from Nathan Pty. Ltd., the $200,000 received from Nikraine Pty. Ltd., or contributed the more than $2 million for which it was said to be responsible in respect of the losses of the joint venture. In his evidence before this Inquiry, Hinze explained the transactions associated with the Gemini Court project by reference to the friendship between himself and his wife and Thiess.
To be continued.......
Part: (e)
Hinze was chairman of the Albert Shire Council from 1957 until 1966 when he was elected to Parliament as the member for the South Coast. He was elevated to Cabinet on 24 October, 1974, as Minister for Local Government and Electricity. On 23 December 1974, he became the Minister for Local Government and Main Roads too, and on 29 July 1980 he also became Minister for Police. On 23 December, 1980, Racing administration in Queensland was added to his responsibilities. He lost the Police portfolio on 6 December, 1982.He was also a businessman with diverse interests and, with his wife, controlled a number of private companies. While a Minister of the Crown, Hinze, his wife or one or other of their companies was paid or lent more than $1.5 million by a number of individuals and companies involved in dealings with the Government, often in matters for which Hinze was ministerially responsible. In some instances, according to his evidence,the sources of the money were total strangers whose very existence has not been able to be verified. Some of those with whom Hinze dealt, and with whom he was friendly, were people of great commercial expertise and extreme wealth. Yet many of their transactions with Hinze shared the common characteristic that they were utterly non-commercial. Proper documentation was rare and in some cases there were no documents or documents were backdated, and loans were granted without security. Interest was another point of regular disinterest, and few formal arrangements were made for loans to be repaid.
Between 1 July, 1983, and 30 June, 1987, a total of $815,056 described as “loans forgiven” and “loans written off’ was processed through the Hinze Group financial accounts to the credit of individual accounts of Hinze and his wife. The details are as follows:
Russell
Hinze
|
Fay
Hinze
|
Total
|
|
(a)
Pabbay Pty Ltd
(1983/84)
|
$33,500.00
|
$33,500.00
|
$67,000.00
|
(b)
Pabbay Pty Ltd
(1983/84)
|
____
|
$1,146.00
|
$1,146.00
|
(c)
T/T Short Punch & Greatorix
(1983/84)
|
$10,000.00
|
_____
|
$10,000.00
|
(d)
Pabbay Pty Ltd
(1984/85)
|
$100,000.00
|
$100,000.00
|
$ 200,000
|
(e)
Nathan (Colwal Pty Ltd)
(1984/85)
|
$12,5000
|
$125,000.00
|
$250,000.00
|
(
f ) Syd
Truscott
(1984/85)
|
____
|
$45,000.00
|
$45,000.00
|
(g)
C T Simmons
(1984/85)
|
____
|
$30,000.00
|
$30,000.00
|
(h)
Nikraine Pty Ltd
(1986/87)
|
$49,400.00
|
$49,400.00
|
$98,800
|
(i)
Norm Rix
(1984/85)
|
$113,110
$431,010
|
_____
$384,046
|
$113,110
$815,056
|
Additionally, loans totalling a further $200,904 were forgiven or written off in the financial accounts of various Hinze companies by 30 June, 1987:
(a)
Cowrie Corporation Pty Ltd (1
983/84)
(b)
Leslie Corporation Pty Ltd (1983/84)
(c)
Fine Braid Leslie Partnership (1 983/84) |
(a) $80,000
(b) $100,000
(c) $20,904
$200,904 |
As at 30 June, 1987, the financial accounts of various Hinze group companies showed that $500,000 remained outstanding in respect of the following loans. Some, at least, had either been forgiven or were not intended to be repaid:
(a)
Cooper, Korbl (G. Herscu)
(b) Noeur Pty Ltd (J. Bartlett) (c) Nikraine Pty Ltd (Thiess/McMaster) (d) Seymour Developments Pty Ltd (K. Seymour) (e) HSP Nominees Pty Ltd (E. Kornhauser) |
(a) $ 100,000
(b) $ 100,000
(c) $ 100,000
(d) $ 150,000
(e) $ 50,000
$500,000 |
Hinze, his wife and family companies also received other benefits, for example, the exclusive use of a Gold Coast penthouse for almost three years, rent free, and later the exclusive use of the same penthouse at a rental of $1.00 per month with a five year option to purchase the property at a price almost certain to be far less than its value if the option was exercised. Soon after Hinze lost his place in Cabinet after the current Premier took office in late 1987 during the course of this Inquiry, interests associated with Hinze received a further windfall of $1.8 million in a transaction which was undocumented until later and related to land in which neither Hinze, his wife, nor any of their companies had had any beneficial interest. What follows are some details of some transactions, in which Hinze, his wife and family companies had an interest.
(i) Kornhauser; the Paradise Centre Project
Hinze and Kornhauser had been close friends for some time. In the late 1970's Kornhauser set out to transform the old Surfers Paradise Hotel site in the heart of the Gold Coast into a major hotel, accommodation, car parking, entertainment and commercial complex known as the Paradise Centre. A Kornhauser controlled company, H.S.P. (Nominees) Pty. Limited, owned the Surfers Paradise Hotel land and adjoining land.By August, 1979, Kornhauser was faced with two problems. There was opposition within the Gold Coast Council, which was re-established after an Administrator (who had carried on the Council's business in the late 1970's) had approved the project. Secondly, there was the concern whether the project was permissible or workable under existing legislation.Hinze made a forceful telephone call to the Town Clerk while the Council was meeting that month, which effectively ended the Council's opposition.Between August and November, Hinze, in his capacity as Minister for Local Government and Main Roads, wrote to the Minister responsible for the material legislation, the then Minister for Justice and Attorney-General, Lickiss, urging a review of the legislation and amendments to the legislation to allow the Kornhauser development to proceed.
On 14 April, 1980, Cabinet decided that approval be given to the introduction of the Registration of Plans (H.S.P. (Nominees) Pty Limited) Enabling Bill, which was passed by Parliament three days later and became law on 12 May. On 16 April, 1980, between the Cabinet decision and before the Bill had passed through Parliament, H.S.P. Nominees Pty. Limited made a payment of $200,000 through a Kornhauser intermediary to Lowanna Pty. Ltd., a Hinze family company, which passed the money to Waverley Park Stud Pty. Ltd., another Hinze family company, Lowanna Pty. Ltd. gave Kornhauser’s intermediary security for the loan, and Hinze and his wife also guaranteed the loan. However, there was no public record of the transaction, and the use of the Kornhauser intermediary meant that even the internal records of the Hinze group omitted any reference to H.S.P. Nominees Pty. Limited, the Kornhauser company associated with the Paradise Centre project. Hinze denied in evidence any connection between the loan and the surrounding events. On 23 July, 1980, Hinze assumed the Police portfolio, in addition to his other responsibilities. As Minister for Police, he became associated with the proposal for a casino licence at the Gold Coast, including the application with which Kornhauser was associated. Reference had already been made to some aspects of that matter, including Hinze’s membership of the Ministerial Committee appointed to supervise the implementation of the Cabinet decision to introduce casinos. Applications for the casino licence proposed for the Gold Coast closed at the end of July, 1981. Twentyeight applications were received including one from Paradise Corporation of Queensland Pty. Ltd., in which H.S.P. (Nominees) Pty. Limited was a significant shareholder. The panel of Treasury and Works Department officials assisting the Ministerial Committee evaluated the applications, and eliminated 24 of the 28 entries, including Paradise Corporation of Queensland Pty. Ltd. The remaining four applicants were then recommended by the panel to the Ministerial Committee for its assessment. The Ministerial Committee was of the opinion that three of the applicants eliminated by the panel should be added to the short list, including Paradise Corporation of Queensland Pty. Ltd. Two other applicants were later added by Cabinet. On 29 September, 1981, the $200,000 loan was repaid with interest.
On 7 February, 1982, Hinze and Lewis dined together. Hinze was to send a letter the following day to the then Treasurer, Edwards. Lewis made changes to the draft of the letter which presented a more favourable impression of Kornhauser. However, early in March, 1982, the Paradise Corporation of Queensland Pty. Ltd. application was withdrawn.In January, 1983, Kornhauser wrote to Bjelke-Petersen asking for further legislation to enable Stage 2 of the Paradise Centre project to proceed, pointing out that the legislation would assist him greatly in obtaining funding for the project. Kornhauser sent a copy of his letter to Bjelke-Petersen to Hinze, and sought his assistance. On 24 May 1983, a member of Kornhauser’s staff sent a lengthy submission in support of further legislation to the Co-ordinator General at the Premier’s Department.On 28 June, 1983, Cabinet gave approval for the preparation of a Bill to cover the proposed stage 2 of the Paradise Centre. On 17 November, the then Minister for Justice and Attorney-General, whose department was responsible for the legislation recommended that Cabinet approve a draft Bill, the Registration of Plans (Stage 2) (H.S.P. [Nominees) Pty Limited) Enabling Bill, which was passed by Parliament on 30 November. On 15 November, 1983, two days before the Cabinet decision, H.S.P. (Nominees) Pty. Limited paid $50,000 to a Hinze family company. The sum was recorded in the books of that company as a loan. No interest was paid and no repayments were made until February, 1988, after Hinze had been omitted from Cabinet by the current Premier when he took office in the course of this Inquiry.
(ii) Gemini Court
In mid 1980 Lowanna Pty. Ltd. had obtained options over a number of parcels of land at Burleigh, the zoning of which permitted the construction of home units, and had paid deposits on some contracts to purchase portions of the land. There was some local opposition to a “high-rise” development. The present Mrs. Hinze, then Fay Jeanette McQuillan, had been involved in the acquisition of the rights over the property, and continued to be interested in the project as it developed. (It is convenient to refer throughout to the present Mrs. Hinze by that description).Hinze also participated in the project, although public records did not indicate that he had any interest in it.There were four companies involved. Colwal Pty. Ltd., which later was to take an assignment of Lowanna’s interests and acquire the land, was incorporated in June, 1980. The shareholders were the solicitor for Hinze and his family interests, John David Andrew Punch, and a law clerk employed by the solicitor, and the directors were Hinze’s accountant, Robert Eugene Murphy, and Mrs. Hinze.Documents were prepared for the transfer of the shares in Colwal Pty. Ltd. to Hinze, but the transfer was never recorded. Kanni Pty. Ltd. is another Hinze family company, which had Murphy and Mrs. Hinze as its directors in the latter part of 1980. On 30 October, Kanni Pty. Ltd. was appointed the trustee of a discretionary trust, the Abeyance Trust, the potential beneficiaries of which were Hinze, Mrs. Hinze and the Hinze company, Waverley Park Stud Pty. Ltd. The other two companies involved were Nathan Investments Pty. Ltd., a company associated with Thiess, and Eblana Pty. Ltd., a company associated with a major Gold Coast builder and entrepreneur, Ronald, Ewan McMaster.
In November, 1980, Lowanna assigned its rights over the land to Colwal, which later refunded to Lowanna the amount of the deposits which it had paid. On 20 November, Hinze, Mrs. Hinze, Thiess, McMaster and others travelled to Canberra where a joint venture agreement was entered into between Colwal Pty. Ltd., Kanni Pty. Ltd., Nathan Investments Pty. Ltd., and Eblana Pty. Ltd. The joint venture agreement provided for profits and losses to be shared equally between Kanni Pty. Ltd., Nathan Investments Pty. Ltd. and Eblana Pty. Ltd., and made provision for a management committee of which Hinze was appointed a member. Colwal’s role was to acquire the land, construct the building, and sell the units. In due course, it completed the purchase of the land and repaid to Lowanna the deposits which it had paid, and the project proceeded. As has already been noted, during the second half of 1980, tenders were invited for an authority to prospect coal in the Winchester South area. Prior to the closing date for tenders, 2 January, 1981, one applicant for the authority to prospect was a consortium which included Drayton Mining Development Pty. Ltd., a company with which Thiess was associated. In that month, after a journalist had spoken to him, a solicitor advised Hinze to remove the name of Mrs. Hinze from any public record which associated her with Colwal Pty. Ltd.
Documents were prepared and backdated to show that Mrs. Hinze and Murphy had resigned as directors of Colwal months earlier, had been appointed alternative directors only from 18 September, 1980 to 25 November, 1980, and had been neither directors nor alternate directors since that time. The inaccurate documents were lodged with the Commissioner for Corporate Affairs. On 9 February 198 1, the terms of the Abeyance Trust were varied to remove Hinze as a potential beneficiary. Thereafter the beneficiaries were Mrs. Hinze and Waverley Park Stud Pty. Ltd., in which Hinze owned half the shares. By March 1981, construction of the building was well advanced. In that month, the Winchester South authority to prospect was awarded to the consortium including the Thiess company Drayton Mining Development Pty. Ltd. Hinze attended the Cabinet meeting at which that matter was discussed and participated in the discussion and the decision without disclosure of his association with Thiess. Later, he made statements which, to say the least, did not comprehensively reveal the position in relation to his association with the Gemini Court project. On 11 March, 1982, a deed of variation of the joint venture agreement was executed, new management arrangements were made, and a management committee was empowered to allocate units in the building to any of the joint venturers. On 15 March, Hinze attended a meeting of the management committee at which it was agreed that one penthouse would be reserved for Kanni Pty. Ltd. and one for a company associated with Thiess, Drayton Investments Pty. Ltd.
By June, 1982, Nathan Investments Pty. Ltd. had paid $250,000 to Kanni Pty. Ltd. which was described as a loan. In some documentation, the creditor is shown as Nathan Investments Pty. Ltd., and in other documentation the creditor is shown as Colwal Pty. Ltd. as nominee for the Gemini Court Joint Venture.In March and April, 1982, questions, were raised in Parliament concerning the involvement of Hinze in the Gemini Court project, and reference was made to the topic in the media. According to one report, Hinze told a journalist that neither he nor his family had any connection with Colwal Pty. Ltd. On 2 April, 1982, the first annual return for Colwal Pty. Ltd., which related to the period ended 3 December 1981, was lodged with the Commissioner for Corporate Affairs. The return showed the only shareholders in Colwal Pty. Ltd. as Nathan Investments Pty. Ltd. and Eblana Pty. Ltd. The Gemini Court project was completed by the end of 1982, by which time the Gold Coast property market had fallen considerably. The joint venturers were concerned that a loss would be sustained.Thiess took possession of one of the penthouses and the other was decorated and furnished in accordance with Mrs. Hinze’s requirements and passed into the possession of Hinze and his wife. For almost three years, they retained exclusive possession of that unit and paid the body corporate charges.They paid no rent, although the owner of the unit continued to be shown as Colwal Pty. Ltd. The balance sheet for Colwal Pty. Ltd. as at 30 April 1983 showed liabilities in excess of assets. In May 1984, a further transaction was entered into. Another company, Nikraine Pty. Ltd. was lent $200,000, at least $100,000 of which emanated from a company associated with Thiess. The shareholders and directors of Nikraine Pty. Ltd. were members of Hinze’s solicitors’ firm. Nikraine Pty. Ltd. on-lent the $200,000 to Kanni Pty. Ltd. There was no public record which could have revealed Hinze’s interest in the transaction, although he personally guaranteed repayment of the loan. The security granted by Kanni Pty. Ltd. to Nikraine Pty. Ltd. was an unregistered mortgage over some land owned by Kanni Pty. Ltd. which was already the subject of a registered mortgage and which, in the following years, was the subject of other and registered dealings.
For example, long term leases in favour of other parties were registered over parts of the land, and the registered mortgage was released and another registered mortgage granted over the land to another party. The mortgage in favour of Nikraine Pty. Ltd. remained unregistered throughout. Further, as is later mentioned, the indebtedness of Kanni Pty. Ltd. to Nikraine Pty. Ltd. was gradually written off. Late in 1985, the penthouse occupied by Mr. and Mrs. Hinze was transferred to Camelot Investments Pty. Ltd., another company associated with Thiess, for $350,000. Camelot Investments Pty. Ltd. entered into a transaction with Essvee Pty. Ltd., a company controlled by Mrs. Hinze. Essvee Pty. Ltd. was granted both the tenancy of the unit at a rent of $1.00 per month and an option to be exercised within five years to purchase the unit for $350,000, the same price as was paid for it by Camelot Investments Pty. Ltd. in 1985. According to internal records of family interests associated with Thiess, the arrangement involved a detriment to Camelot Investments Pty. Ltd., as the trustee of a Thiess family trust, in excess of $200,000. Meanwhile, by late 1985, it was apparent that the joint venture had lost a substantial amount. The balance sheet for Colwal Pty. Ltd. as at late September 1985 showed a total deficiency of more than $6 million. Arrangements were made for Eblana Pty. Ltd. to withdraw from the joint venture upon terms which do not require discussion. Effectively, interests associated with Thiess took over the project and the balance of the units, a number of which were still registered in the name of Colwal Pty. Ltd. It seems that by late 1985 it had been informally decided that Kanni Pty. Ltd. would not be required to contribute to the losses of the joint venture, but the arrangement had not been formalized. Early in 1986, Hinze’s solicitors asked Nathan Pty. Ltd. to confirm that neither it nor Kanni Pty. Ltd. had any claim upon the other arising out of the joint venture.
On 18 February, 1986, a reply was received, which included the following passage:
“Nathan has been more than considerate in its dealings with Kanni to date, and
does not wish at this stage to enter into any further paperwork to formally release
Kanni from obligations under the joint venture agreement which may not have
been discharged by Kanni at the date of dissolution of these arrangements.
As indicated to you, it is extremely unlikely that these provisions would ever be
exercised.”
By 30 June, 1986, $100,000 of the indebtedness of Kanni Pty. Ltd. to Nikraine Pty. Ltd. had been written off in internal Hinze records.On 22 January, 1988, Hinze’s solicitor wrote to the Commissioner of Stamp Duties advising that Nikraine Pty. Ltd. did not appear to have any assets or liabilities. Despite what had been said in February 1986, the first demand upon Kanni Pty. Ltd. was made during the course of this Inquiry.On 7 April, 1988, Camelot Investments Pty. Ltd. sold the Gemini Court penthouse over which Essvee Pty. Ltd. had an option to Mrs. Hinze. A deposit of $1,000 was paid, and later a mortgage to secure the balance of $300,000 was executed in favour of Camelot Investments Pty. Ltd. On 9 August, 1988, more than two years after the dissolution of the joint venture, accountants acting on behalf of Thiess’ interests wrote to Kanni Pty. Ltd. asserting that the joint venture accounts as at 30 June 1987 indicated that “a contribution of $2,470,345” was outstanding from Kanni, and asking to be advised of ‘‘. . . a timetable for the settlement of this amount”. By the conclusion of the material section of the evidence at the public sittings of this Inquiry late in 1988, Kanni Pty. Ltd. had not repaid the $250,000 received from Nathan Pty. Ltd., the $200,000 received from Nikraine Pty. Ltd., or contributed the more than $2 million for which it was said to be responsible in respect of the losses of the joint venture. In his evidence before this Inquiry, Hinze explained the transactions associated with the Gemini Court project by reference to the friendship between himself and his wife and Thiess.
To be continued.......
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