3 Representative Sackar cross-examination
What are the elements of this process of cross-examination?
First, the Bank’s counsel constructs a set of statements claimed to have
been presented to Dwyer and/or Baird (the operative phrase is ‘I would
suggest’). Such statements, if they had been uttered, would indicate that
Dwyer/Baird obtained a comprehensive exposure to the nature and risk of
unhedged foreign currency loans and thus there could be no reliance of the
plaintiff on the CBA for the consequences of the disaster that
subsequently befell him and his mother. No documents were offered to
support the veracity of the claim. Bank officers took no diary notes of
relevant meetings. The detailed nature and technical complexity of the
purported statements impart to the claims an air of
implausibility.
Second, Dwyer and/or Baird claim that they could not recall
such statements, or they deny that they were uttered.
Third, Sackar repeats the propositions, and the ‘can’t
recall’ or the denials are also repeated.
Fourth, Sackar shifts tack and then insists that
Dwyer/Baird did know or should have known the substance of these
statements, regardless of whether they had been made.
Fifth, the memory and/or motives of Dwyer/Baird are
questioned, compounding the attack on the credibility and integrity of the
plaintiff and his solicitor.
Sixth, having failed to elicit the ‘correct’ answer or to
elicit conflicting answers from Dwyer/Baird, Sackar moves quickly to a
separate matter but might return later to the same event and repeat the
process. The probable becomes suspect; the improbable becomes likely. Myth
and reality are inverted. Truth is determined here not by the quality of
the evidence but by the relative resources the respective parties can
commit to commanding the historical record for their own side.
4 Some contradictory elements of the cross-examination
Ironically, the general tenor of the exchange resulting
from Sackar’s lengthy cross-examination has contradictory elements. Sackar
was simultaneously attempting to pin on Dwyer a comprehensive knowledge of
(or, as a fallback, a comprehensive exposure to) foreign currency loans
yet also slating him for his incompetence.
A detached reader of the court transcript could only
conclude that Dwyer’s business skills were more intuitive than formal.
Dwyer’s record-keeping appeared to be far from adequate. His success as a
jewellery importer rested on his feel for the product and his personality.
On any matter requiring technical expertise, Dwyer relied on his
accountant or his solicitor. On all dimensions of foreign currencies,
Dwyer was totally out of his depth.
A related contradictory elements is that Sackar attempts to
construct an
environment permeated by both a prescience as to all possible scenarios
for some participants (including the implications of the float of the
dollar and the prospects of the decline of the Australian dollar during
1985) and an ignorance of other participants, an environment which was
supposed to simultaneously accurately inform and inaccurately mislead
Dwyer and Baird. It is the ideal world in which Sackar could, at his
discretion, impute either a state of informedness or a state of
uninformedness to Dwyer and Baird prior to their dealings with the CBA, so
that the subsequent experience of Dwyer as a CBA
foreign currency loan borrower could not be attributed to the CBA. The
Commonwealth Bank doesn’t appear in Sackar’s world, and the G documents
(the label given to CBA internal documents), for consistency, would have
to be passed off as forgeries.
Another significant imponderable in Sackar’s reconstruction
is how Dwyer and his mother came to obtain a foreign currency loan from
the Commonwealth Bank. The Dwyers’ business was in trouble, with the
jewellery importing component having gone into receivership in 1982
following a tsunamic fluctuation in the gold price and a subsequent
robbery of stock. The Dwyers needed to refinance existing commitments if
property was to be retained, and saw a low interest foreign currency loan
(following consistently inadequate advice) as their salvation. In Geoffrey
Dwyer’s phrase after approval from the
CBA, the foreign currency loan appeared to be ‘the greatest thing since
sliced bread’. Pending the viability of several new prospects (a new
importing contract; development of the building housing the retail
business), they could not afford domestic interest rates, and their
security was good but not exemplary – two of the demanding criteria by
which reputedly hard-headed bank officers were presumed to be judging
customers for the granting of a foreign currency loan.
Whence, then, the CBA foreign currency loan to the Dwyers?
The loan was obtained because Dwyer’s mother was on friendly relations
with a recently retired senior official, Mr James Gerathy, from the
Commonwealth Bank. Gerathy was, until his retirement in April 1984, Chief
State Manager for the Bank. In his capacity as a regular visitor to the
Dwyer’s Randwick shop (horse-racing was a common interest), Gerathy heard
of the Dwyer’s difficulties with their then bank, Westpac, and contacted
CBA personnel. A Bank-induced
statement from the retired banker (Gerathy, 1991) disputes some aspects of
the Dwyer’s account of events. But the indisputable fact is that the
Dwyers were given the foreign currency loan in atypical circumstances – no
representations were made to the Bank by the Dwyers (of which more below).
The transcript on this issue, covering 20 pages of feigned disbelief by
the inquisitorial counsel, is not merely instructive but adds some overdue
comic relief (1991a: 244ff).
Sackar: “You seriously want this Court to accept that a
loan of what turned
out to be just under one million dollars was organised without you
supplying any information at all to the Commonwealth Bank?
“That is correct.
Sackar: “I suggest you know that that is completely false.
…
Sackar: “ … you must have found this most extraordinary, that a close
friend of your mother’s was able to, what, just dip into the coffers of
the Commonwealth Bank and give you and your mother a million dollars?
“That is what happened.
…
Sackar: “First time you heard of a thing like that happening in your
business experience?
“True.
Sackar: “When you got along to see Mr Wyatt and Mr Rogers
you would have thought there was no need to do anything at all?
“That is exactly right.
…
Sackar: “Incredible story?
“That’s what happened.
…
Sackar: “So here you are a customer of Westpac facing threats from Westpac
and, what, the Commonwealth government puts its hand in its pocket for a
million dollars without ever hearing from you about what your business was
doing?
“That is what happened Mr Sackar.
…
Sackar: “You only knew him as of October ’83 and July of ’84 as a customer
who shared with your mother a mutual interest in porcelain?
“Correct. I might add he was quite fond of the horses and
my mother and Mr Gerathy used to talk at length about what was happening
at the races on Saturday.
…
Sackar:“ You must have thought he was Father Christmas to organise a loan
without you asking for it?
“He was a senior man in the Commonwealth Bank.
…
Sackar: “Neither you nor, to your knowledge, your mother ever asked Mr
Gerathy for a loan?
“In the true sense of the word.
…
Sackar: “Tell us what happened?
“Mr Gerathy likes buying a French loaf of bread, which is a
long
…
Sackar: “I am sorry to interrupt but did you go to the bakery with him,
did you?
“No, he goes every Saturday morning.
Sackar: “Just tell me what he did when he came into your
shop, no what he did when ...
“He came in with his regular loaf of Huspen bread or French
loaf or whatever you describe it as. He stood in the doorway of the shop
and said words to the effect that the funds were available from the
Commonwealth Bank to pay out Westpac.
Sackar: “Is that all he said?
“No, he said a few more words to my mother. I was about six
feet away on that particular occasion and he said, ‘As a matter of
pleasantries, would you get Geoff – I think he considered me to be a young
chap – to pop in to see Mr Wyatt’.
Sackar: “I want to suggest to you that that is rubbish, Mr
Dwyer
“Well, you ask Mr Gerathy.
Sackar: “You see, we have and I suggest to you that is
absolute nonsense that he never said any such thing to you at all and that
you know that what he did was no more than assist you to get an interview
with the Commonwealth Bank so that you could try and persuade them to
finance you.
“That is incorrect.
Sackar: “Incorrect, is it?
“It is.
Sackar: “So is this the truth: when you set off to visit Mr
Wyatt and Mr Rogers, you just thought you were going, as you would have
it, through the pleasantries?
“Exactly true.
…
Sackar: “And here is virtually a total stranger who has a mutual interest
with your mother in horse racing and porcelain who has not got a clue what
security you are going to offer the bank for the purposes of this loan and
who had not got a clue what your statement of assets and liabilities might
be but nevertheless, on your story, comes down Belmore Road on a Saturday
morning on behalf of the bank, you say, and just says, ‘Here is a million
dollars’. That is ridiculous, isn’t it?
“That’s what happened.”
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History of Banking Fraud:
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