by David Murray
Setback
Their trip to Brisbane had been meant to be brief. Allison and Gerard had intended to continue their overseas travels in the New Year and had left their belongings in a UK warehouse. But while they were home, Flight Centre sought out Allison to return to work. She met with the company’s new HR manager in November 1999 and took a part-time job helping prepare the company’s annual overseas conference.
A journalist and photographer from Ipswich’s Queensland Times caught up with Allison in April 2000 for a profile on the child ballet star and former Miss Brisbane. The report that ran in the paper said she was ‘filled with bright prospects when considering her future’, but her own words made it clear she was at a crossroads.
‘At the moment, I’m at a fairly transitional period in my life,’ Allison told the paper. ‘I’ve always had goals and this is the next big step. It’s a strange time; it’s been good to just sit back and have the time – and then be able to say which direction to go in.’
Once Allison was back on the Flight Centre payroll, Gerard started trying to get work in the company too. He applied for a manager’s position but was unsuccessful. Eventually, he found a spot on a new venture. Keith Stanley, Flight Centre’s marketing boss, was putting together a team to explore the growing power of the internet. The new division was called Global Online and in March 2000 – four months after Allison returned to Flight Centre – Stanley gave Gerard a 12-month contract to work on the offshoot.
Stanley remembers Allison glowingly from their work together in her HR role. ‘She was very talented,’ he tells me. ‘She had … a really open, honest sort of personality and people naturally liked her. In a HR role, that’s obviously an advantage. She was very, very highly regarded by everybody.’
Gerard, on the other hand, he found ‘very posh’. Says Stanley, ‘He was very self-confident. He was proud of his Baden-Powell heritage … When he came back it was just timing really. I was looking to pull a team together, I wanted someone who had retail experience in the Flight Centre model and he had that. We’d been given the budget to do this test and he was there and we had the job. It could have been him or someone else.’
Although internet travel would eventually explode, this pioneering foray into the field was a disaster for the company. Gerard and his team attempted to create a viable online travel business and failed. Like many early online start-ups, they burned through money without generating the revenue to justify their existence. In August 2000, the small division was axed and staff given their marching orders. Gerard was abruptly sacked with the rest of the team.
It was difficult for Gerard to accept that despite signing him up for 12 months, the company was letting him go after six. He felt the rug had been pulled from under him, that it had failed to honour its promise.
Gerard and his colleagues were the first Flight Centre redundancies. Word of the failed internet division’s spending spread like wildfire through the company. The rumour mill went into overdrive and some put the division’s churn in the millions of dollars, with nothing to show for it apart from a few desks. Stanley confirms that the operation was ‘running a lot of cash’ but can’t recall an exact amount. No one in particular was responsible for the failure, he assures me. The timing simply wasn’t quite right. ‘The company wasn’t really ready for it and the internet wasn’t ready for it either.’
Others may have taken the dismissal on the chin and moved on, or lobbied for a different role. But Gerard came out swinging. He consulted a lawyer, and then sued the company for breach of contract. A statement of claim was lodged in the District Court in Brisbane five days before Christmas. In it, Gerard claimed the firing was ‘without reason or adequate reason’. He asserted that he had been planning to return to live and work in the UK before being enticed to work at Flight Centre. Up until then he had been ‘gainfully employed’ in Switzerland and the UK. In all, he demanded Flight Centre pay him $59,500.
‘He challenged the company, that’s fair enough, that was his right,’ says Stanley, ‘but if I remember rightly it didn’t go anywhere.’
Only two documents were ever filed – Gerard’s claim and the company’s notice of intention to defend the claim. The issue disappeared off the radar.
There must have been an element of panic in the Baden-Clay household as Christmas approached that year. Gerard and Allison were renting a three-bedroom townhouse in Gubberley Street, Kenmore. They were a stone’s throw from his parents, Nigel and Elaine, who had moved to Kenmore from their previous home at Wavell Heights.
All around Brisbane, homes were decked out with fairy lights, tinsel and Christmas trees, and families were preparing for beach holidays. It should have been an exciting time for Gerard and Allison because by December 2000, three years after their wedding, Allison was three months pregnant with their first child. But excitement about the impending new arrival was tempered by the sacking.
With a baby on the way, Gerard had to figure out how to make a living and what to do with his life. They had some Flight Centre shares to tide them over for a while, and Gerard started doing some stockmarket trading from a makeshift office in their garage.
Allison and Gerard’s first child was born on 3 July 2001. Allison had gone through a rough patch emotionally during the pregnancy. Her mother, Priscilla, drove up from the Gold Coast to help out after the birth. Priscilla was surprised to find a baby monitor in the kitchen was rigged up with a connection to Gerard’s garage office. Gerard could hear anything going on in the home. Priscilla told family that when she went to speak to Allison, her daughter put her finger to her lips for her to be quiet. Outside, Allison told her mum Gerard could hear everything. Gerard separately explained the monitor was there so Allison only needed to call his name and he would be by her side. Priscilla thought Allison was coping about as well as any new mum, and didn’t like the idea of Gerard listening in all the time.
If adapting to parenthood wasn’t smooth sailing, Gerard’s working life seemed to be floundering. His stockmarket dabbling from home hit trouble when al-Qaeda launched terror attacks in the United States on 11 September 2001. The travel industry was in turmoil, and the couple’s investments were at risk, so in a panic they sold their Flight Centre stocks that day.
Gerard was at a first-aid course to prepare for a new job when the terror attacks happened. He had been accepted to chaperone students from Brisbane Boys’ College (BBC) on a trip to India and Nepal. After the hijacked planes were flown into the World Trade Center in New York, the parents at BBC baulked at sending their children overseas, and the job fell through.
Despite being the sole breadwinner, having a six-month-old baby, an anxious wife and no real job, Gerard decided to join his brother, Adam, on a holiday to Europe at the end of 2001. Allison was left to cope with the baby on her own; luckily, she had the support of her parents.
On his return, Gerard battled away in the home office for a while, trying to turn a dollar. He would soon become aware of exciting changes in Brisbane property. Suddenly, the previously sedate real estate market was turbocharged. Backyards were turning into goldmines and there were opportunities aplenty for those willing to paddle their own canoe.
Boom
Once upon a time – and not such a long time ago – the thought of anyone paying upwards of $250,000 for an average house in Brisbane drew gasps of surprise. ‘Quuuarter-of-a-miiiillion dollars,’ people would drawl, rolling the staggering figure around on their tongues. To understand how the Brisbane housing boom of the 2000s shook the city, it’s helpful to have a sense of the calm that preceded it.
In 1990, the median house price in Brisbane was $118,000. Over the next decade it grew, steadily but unspectacularly, to hit $173,000 in 2000 – an increase of 46 per cent. By comparison, over the next seven years, from 2000 to 2007, the median house price jumped a jaw-dropping 160 per cent to reach $450,500. After a decade of growth averaging just below five per cent, the city’s real estate market was suddenly clocking up annual increases of 25 p
er cent.
Interstate and overseas migration to the Sunshine State and a shortage of supply were cited as reasons for the frenzied buying. The federal government’s First Home Owner Grant, introduced in 2000, also buoyed the market. Rather than putting buyers off, the rapid price rises seemed to trigger a wave of panic buying as the momentum built on itself. And it wasn’t just prices that were up. The number of houses changing hands soared to record levels too. In 1998 fewer than 16,000 houses were sold in Brisbane, for a combined total price of $2.8 billion. In 2003 upwards of 23,000 homes sold for $8.2 billion. For those who got in on the ground floor, a real estate agent’s licence was as good as a licence to print money.
Brian Mason would one day come to feature in the Baden-Clay investigation. Long before that, his timing was superb. With a background in the building industry, he joined the ranks of real estate agents servicing Brisbane’s western suburbs in 1996. In his first year, effectively an apprenticeship, he made only $16,000 in commissions. The following year, he’d found his feet and earnt a respectable $60,000. By the time the boom started to hit, he was well placed to ride the wave.
As someone who had worked through leaner times, Mason was agog. He kept expecting the incredible ride to come to an end, but the buyers kept on coming. Mason would hold four open houses on a Saturday and have contracts on three by the end of the day. The next day he’d be fielding calls from anxious buyers who missed out. He teamed up with another agent and between them, from 2001 to 2008, they wrote up to $900,000 in commissions a year. Not bad for a bloke with just a few years’ experience up his sleeve.
The pickings were especially good in Brisbane’s western suburbs, which boasted some of the city’s most expensive real estate. In 2007, Brookfield topped a list of Brisbane’s priciest suburbs – ahead of Ascot and Hamilton – with a median house price of $1.3 million.
Agents were living large. Mason bought a Mercedes – his boss a Bentley. If Mason wanted a Harley he bought it, with cash. He went to Europe for a month to see family. While he was away, he made $50,000 from sales without lifting a finger. Houses were virtually selling themselves.
The biggest jumps in the median Brisbane house value were in 2002 (26.5 per cent) and 2003 (27.3 per cent). Gerard Baden-Clay watched the growth in amazement and set his mind on a new career. He was late to the party, and far from alone.
For years, the number of real estate agents had remained static in Queensland. From 1995 to 2002 there was a nine per cent increase in the number of licensed agents, and a five per cent decrease in real estate salespeople. It was a different story in 2003, the year Gerard joined the industry. That year alone, there was a 29 per cent increase in the number of licensed real estate agents – from 4493 to 5795 – and a 92 per cent jump in the number of registered salespeople, as Gerard became – from 5533 to 10,628.
He was but one of a crowd of newcomers flocking to property to make the most of the incredible price hikes and frenzy of sales, like prospectors in a modern-day gold rush.
Keeping it in the family
2003
Ray Leech and Jason Arnott were hiring, and there was a lot to like about Gerard Baden-Clay when he first walked into their real estate business. The duo had launched their agency, Raine & Horne Kenmore, only the previous year at Shop 3/2105 Moggill Road. It was a no-frills brick building, a couple of doors down from a busy Coffee Club franchise.
For their launch, a Black Thunder van from FM radio station B105 had rolled into the car park, Nickelback dominating their airwaves with ‘How You Remind Me’. Ads in the Westside News publicised the occasion as ‘the biggest free barbecue Kenmore has ever seen’. Only in real estate could some humble sausages be promoted with such fanfare.
Leech had launched six real estate offices during his career and Arnott had been a popular local agent for 16 years. It was their first business together and the plan was to build it up fast and offload it for a premium.
In their search for staff they had run job ads in the bulging classifieds of the local newspapers, and in walked Gerard. He had no property experience but was well spoken and presented, university educated and had a background in sales from his previous job at Flight Centre. He ticked the boxes. So much so that the two partners had the distinct impression it was Gerard doing the interviewing.
There were two other agencies he was seriously considering, he told them. Gerard’s confident pitch impressed the pair. Real estate was, after all, the ultimate confidence game. But there was a catch, and it was a big one: Gerard didn’t come alone. If Leech and Arnott wanted him, Gerard told the startled agents they would have to hire his parents too.
During their combined decades in the real estate game, the two partners had seen many curious things, but they had never known an agent to include his parents as a condition of employment. The new office had only a handful of staff. Bringing in three members of the same family could upset the balance. Then again, three heads were surely better than one. The partners decided to give the unconventional arrangement a shot; however, Leech had a firm condition of his own: ‘That’s fine. I don’t mind paying you a retainer. But I’m not going to pay your mother and father. You have to subcontract them on your own,’ he said.
It was three for the price of one. Gerard accepted. He had a foot in the real estate game, with his parents along to tie his laces.
From the day the Baden-Clays arrived, it was apparent to the rest of the staff the family was an exceptionally tight-knit unit. Gerard’s open affection with his parents was the first surprise for workmates. Gerard, Nigel and Elaine would hug and kiss each other warmly and often, in the office and in public. Leech marvelled at the big bear hugs Gerard and Nigel would exchange whenever they saw each other.
‘Genuinely close,’ he thought, ‘totally genuine.’
Equally conspicuously, Gerard addressed his parents as ‘Mummy’ and ‘Daddy’ around the office and in front of clients. Arnott noticed that Gerard seemed to consult his parents before any decision. It all took some getting used to.
While other agents slogged away on their own, Gerard had the unique benefit of having his parents to share the load. One of the toughest challenges in real estate is securing listings; that is, finding properties to sell. It is especially hard for novices, who need to build a client base from scratch with no word of mouth.
Gerard largely left this grinding, mundane side of his new job to his parents. Nigel and Elaine, who were not getting any younger, did most of the legwork. This included the hard yards of working the phones and venturing out into the Brisbane heat to put pamphlets in letterboxes and door-knock house-to-house looking for sellers. The lifeblood of a real estate business, any agent will tell you, is sellers not buyers. The more the merrier.
Nigel and Elaine would round up a prospective client, and Gerard would step in to close the deal. His role was to convert the leads – to get potential clients to sign on the dotted line with him, exclusively. Then he would take the properties to the market and get them sold.
Nigel and Elaine were both about to hit their 60s and should have been retiring somewhere, but they’d had a setback and needed money. Nigel had progressed, over the years, from working in life insurance sales to building up a financial planning business. However, his planning for his own financial future hadn’t worked out well. He had sold his business as part of his retirement plan, but only ever received an initial payment; the rest never came through. Nigel and Elaine’s retirement income and nest egg were non-existent. That was how Gerard and his parents came to be working together in real estate. They were all registered real estate salespeople, which required them to work under a licensed agent.
Nigel and Elaine were gladly doing all that grunt work. The couple put their eldest son on a pedestal. They predicted that Gerard would become a superb businessman. Gerard was lucky to have Nigel and Elaine with him. The efforts of the parents freed Gerard to spend more time networking and building his profile.
Raine & Horne Kenmore may have bee
n a new business when the Baden-Clays arrived but it was already doing a bustling trade. Leech had signage rights to the building so swathes of commuters saw the Raine & Horne name as they moved in and out of the western suburbs along Moggill Road.
The Coffee Club franchise, two doors away, drew all important foot traffic past the office. Often café customers would pause to browse the properties in the window. Leech, Arnott and their team were making the most of their contacts, giving the business a flying start. Gerard, Nigel and Elaine were perfectly placed to learn the ropes.
While Gerard was making headway in a new career, Allison was working her way through her own issues. She had fallen pregnant again, with the couple’s second daughter. She was thrilled to learn she was having another child, but felt a return of overwhelming feelings of anxiety. It had been a battle, on and off, for years. It was finally time to do something about it. In September 2003, at 26 weeks, she knew she needed help and went to see a psychiatrist, Dr Tom George, after a referral from a GP.
Working from rooms in Everton Park in Brisbane’s north, Dr George had more than 30 years’ experience. In this first consultation Allison detailed her increasing anxiety and low mood. Frequent panic attacks included a highly unsettling incident when she was driving with her daughter in a baby seat in the back. On that occasion behind the wheel she had managed to pull over before passing out, but had progressively avoided driving since. She was fearful further episodes might cause her to faint and harm her unborn baby. Her confidence level had dropped, she felt far less energetic than usual and was worried her pregnancy might not go as well as expected.
Allison told Dr George she had experienced the same symptoms during her first pregnancy. She told him of her history. The hallucinations from taking Lariam. The anxiety going back to childhood. Other family members battled anxiety, she added. A miscarriage the previous year had been tough. Gerard’s presence at home – after he had been axed from Flight Centre – had been a source of reassurance. She was anxious about being alone.