Toni McHugh
Toni McHugh

School mates 'knew nothing' of Baden-Clay affair

TWO school mates of Gerard Baden-Clay went to Toowoomba Grammar with have testified they knew nothing of their friend's affair.

Robert Cheesman and Stuart Christ told Brisbane Supreme Court they might have met Toni McHugh but could not remember and did not know of the affair until after Allison went missing.

Mr Cheesman and Mr Christ each lent the Baden-Clays $90,000 as a cash injection for their troubled real estate business in early 2011

"He suffered some setbacks with the floods and other issues with a declining real estate market," he said.

"His partners wanted to exit the business and he saw it as an opportunity to take back full control of the business."

Mr Cheesman was groomsmen at Mr Baden-Clay's wedding and chose Mr Baden-Clay as his best man.

He said they had been friends since 1983 when they met in high school.

Mr Cheesman said he and two other friends - Christ and Peter Cranna - sat down in February, 2011, going through the business figures to see how Mr Baden-Clay ended up in financial trouble.

He said they spent that month getting forecasts for the future too before they all put in $90,000 each in a series of installments.

"The business was clearly in trouble but I saw it had a way out," he said.

Mr Cheesman said the business expenses were too high and part of the loan deal was that Mr Baden-Clay would sort those problems out.

He said that cash flow "at that stage it was very bad".

Mr Cheesman, an accountant, said the loan agreement, which was never formalised because "we never got around to it" was for 10% interest which Mr Baden-Clay paid for the first few months.

But he said he was still owed the $90,000 in 2012.

"I was fairly heavily involved (in the business) until about when Allison returned to the business," he said.

"I would review all the payments going out.

"I was mainly checking for waste, I didn't want to see any waste.

"At that time (I withdrew), I was comfortable with what was going on."

Mr Cheesman said he and Gerard were speaking several times a week "at the height of it".

Under cross-examination from defence barrister Michael Byrne, Mr Cheesman agreed he had carried out "rigorous investigations" before lending any money.

"We wanted to held Gerard and Allison out but we were expecting to get the money back based on our investigations," he said.

"He was definitely optimistic about the business.

"We wouldn't have lent him money unless we believed we would get it back.

"He was more optimistic than I was.

"I was still comfortable there was enough wriggle room, the business would still make a profit and he would pay us back in a reasonable time.

Allison Baden-Clay.
Allison Baden-Clay. QT file image

Mr Cheesman said he was mindful of how Mr Baden-Clay's personal finances were structured.

He said he knew the businesses could go broke and there was no personal risk to the Baden-Clay family.

Mr Cheesman said Allison was also optimistic - noting she had admirable ambitions.

He said she knew Allison wanted a son and knew her depression was affecting their relationship.

"I knew she was suffering depression and he was finding it hard," he said.

"I always got the impression he shouldn't have been talking about.

"He occasionally opened up but then would close down again."

Mr Cheesman said he and Mr Baden-Clay had been successful businessmen, once named in Business Review Weekly as the top 100 fastest growing companies.

He said he spoke to Mr Baden-Clay's father Nigel on April 20 when Allison was reported missing about whether they should hire a lawyer.

"He was concerned there was a lot of police, they were surrounding police him and asking a lot of tough questions," he said.

"I blew him off and I said it wasn't necessary and the focus was on finding Allison."

Mr Christ, who has known Mr Baden-Clay since 1985 or 1986, said they went to school and university together.

The business development manager said his children attended Brookfield school with the Baden-Clay children.

"We've been very close over the years," he said.

"In recent years, probably not as close."

Mr Christ said he received a call from Mr Baden-Clay in late February, 2011, "saying the business wasn't going so well".

"I then went over to see Gerard that night or a couple of nights later to find out what was going on," he said.

"The business had been going quite well and they had just expanded rapidly into new business premises.

"They hired a whole bunch of new sales staff and the floods hit so the cash flow stopped.

"In late February, 2011, without a further cash injection, the business would have been in severe trouble.

"There was simply no cash in the bank to pay the bills.

"Over a period of months the three of us injected funds into the business and kept a strong eye on expenditure.

"We pushed the business to reduce expenditure.

"The idea was that it would get them out of short term trouble.

"That over a period we would be paid 10% interest per month until that accrued to $180,000.

"So we were repaid $90,000, the principal, and $90,000 in interest. That was it, books cleared.

"The idea was that he would pay back as soon as he could.

"We spoke to Allison regularly and she was very much aware of this.

"Allison became more involved in the business in late, 2011.

"That actually gave us a lot of comfort."

Mr Christ said they "became a lot more comfortable the business would continue" in late 2011.

Gerard Baden-Clay
Gerard Baden-Clay

Bruce Flegg says he was asked for $400,000 loan by Baden-Clay

UPDATE: MOGGIL MP Bruce Flegg has testified that Gerard Baden-Clay asked him for a $400,000 loan to pay out his business partners in his real estate business.

He said he recalled a phone call in December, 2011, and they agreed to meet up because he had a bottle of wine for him.

"Gerard indicated to me that he had a situation in his business, that the situation involved the money that he owed to business partners," he told Brisbane Supreme Court.

Dr Flegg said he believed the partners had left the business and Mr Baden-Clay wanted to keep ownership of the business, including the rent roll, so he needed to raise $400,000.

"It was really in the nature of a favour," he said.

Dr Flegg said he asked whether Mr Baden-Clay was asking for an equity partner, someone to buy a share of the business to replace the outgoing business partners.

He said that would be a more appealing proposition but Mr Baden-Clay told him he did not want an equity partner.

"He wanted to keep his equity at whatever level it was at the time, he didn't want another partner coming in," he said.

Dr Flegg said Mr Baden-Clay approached him later at a Kenmore Chamber of Commerce meeting and asked him to step outside.

"Gerard seemed to be annoyed with me," he said.

Dr Flegg said Mr Baden-Clay believed he had told someone else his business was in trouble.

"I assured him I hadn't said anything about our previous conversation with anyone," he said.

Dr Flegg said Mr Baden-Clay left him a voice message on March 6, 2012, when he was in the middle of an election campaign.

"It's a 24 hour a day thing and you don't have time to deal with any other matters," he said.

Dr Flegg's friend Sue Heath phoned Mr Baden-Clay on his behalf and she relayed a second request for a loan.

He said he had a quick phone conversation a few days later and it was short.

"It wasn't going anywhere," he said.

Defence barrister Michael Byrne asked whether the loan request was out of the ordinary.

"It was probably out of the ordinary but not dramatically left field," he said.

"Perhaps it did (surprise me) a little but not greatly."

Dr Flegg agreed he was likely trying to fund purchase of a New York property at the time Mr Baden-Clay asked for a loan.

Dr Bruce Flegg.
Dr Bruce Flegg. Brett Wortman

MP Bruce Flegg describes scream night Allison killed

MOGGIL MP Bruce Flegg has described hearing a "reverse crescendo" female scream the night Allison Baden-Clay was allegedly murdered in her Brookfield home.

Dr Flegg, who has had a "friendly relationship" with Allison's husband Gerard for "some years", told Brisbane Supreme Court that it was "strongly suggestive of a reduced level of consciousness".

He said he was on the phone to his friend Sue Heath when he heard the scream on April 19 and asked her if she heard it.

"I'm quite certain it was a female voice," he said.

"I've had a lifetime as a medical practitioner and I've had countless experiences with death and reduced level of consciousness due to injury, substances or anesthesia.

"It was a single, reverse crescendo in volume, tapering off, and what I would described as having an involuntary quality.

"It was very strongly suggestive of a reduced level of consciousness.

"There's a difference between people screaming at each other in an argument and someone who lets out a sound when their conscious state is altered."

Dr Flegg said the scream was short, about two or three seconds long.

He said he believed the scream came from the direction of the Brookfield showgrounds.

"The acoustics of the area are that you can hear things very distinctly from the showgrounds," he said.

"You can even hear individual voices from that distance even though you might frequently not hear things that are closer to your home.

"I remember the particular incident very clearly because it was distressing and I'm not one to be distressed by what I hear."

Dr Flegg said he went to the front door to see if there was anything outside his Brookfield home but he could not see anything.

He said he went to speak to the man living with him at the time but he was asleep.

"At that point in that hallway, I heard exactly the same sound again," he said.

"The tone and nature were exactly the same.

"Similar (length) but certainly not longer, if anything maybe shorter."

"I would say of the order of 2-3 minutes (apart)."

Dr Flegg said the minutes were not as long as five minutes apart but more than one minute.

He said the screams would have been just before 11pm according to his phone records.

"I don't have any doubt about what I heard but I have doubt about how far away it would have been," he said.

"I heard nothing else that evening and that would probably be the case most evenings."

Dr Flegg said it was a "disturbing event" and he was agitated.

Under cross-examination from defence barrister Michael Byrne, he said he would be surprised if the screams came from the Baden-Clay house given how far away it was from him.