Was the Executor’s $760k Gold Bullion Purchase a Prudent Investment or Criminal Theft?

Based on the authentic Australian judicial case R v MILEWICH [2022] SADC 70, this article disassembles the Court’s judgment process regarding evidence and law. It transforms complex judicial reasoning into clear, understandable key point analyses, helping readers identify the core of the dispute, understand the judgment logic, make more rational litigation choices, and providing case resources for practical research to readers of all backgrounds.

Chapter 1: Case Overview and Core Disputes

Basic Information:

• Court of Hearing: District Court of South Australia
• Presiding Judge: Her Honour Judge Telfer
• Cause of Action: Criminal Law (Aggravated Dishonest Dealing with Documents; Aggravated Theft)
• Judgment Date: 6 June 2022

Core Keywords:

• Keyword 1: Authentic Judgment Case
• Keyword 2: Criminal Law
• Keyword 3: Theft by Executor
• Keyword 4: Wills and Estates
• Keyword 5: Forgery Allegation
• Keyword 6: Circumstantial Evidence

Background:

This criminal trial by Judge alone concerned two serious allegations against an accused man in his capacity as the son and later, the executor of his mother’s estate. The first charge alleged that the accused dishonestly produced a forged will, purported to be his mother’s final testament, with the intent to deceive his sister about her inheritance. The second, and more significant charge, alleged that after being appointed executor under a different, valid will, the accused committed theft by using over $760,000 of estate funds to purchase approximately 14.5 kilograms of gold bullion.

Core Disputes and Claims:

The case presented two central questions for the Court to determine beyond a reasonable doubt:

1. Dishonest Dealing with Documents: Did the accused produce a 2013 will knowing that the signature on it was not his mother’s, with the dishonest intention of causing a financial detriment to his sister? The Prosecution’s case hinged on proving the signature was a forgery.

2. Aggravated Theft: Did the accused’s act of converting a substantial portion of the estate’s cash proceeds into untraceable gold bullion constitute a dishonest appropriation of property belonging to the estate’s beneficiaries, with the intent to permanently deprive them of it? The Defence contended this was a legitimate, if unconventional, investment made to protect the estate’s value during protracted family legal disputes.

Chapter 2: Origin of the Case

The matter originates from the final years and subsequent passing of Nadia Milewich, a woman of Russian origin who had built a life in Australia. She had three children: two sons, Nicholai (the accused) and Walter, and a daughter, Svetlana. Upon her death on 10 August 2013, she owned two properties free of any mortgage: one in Cheltenham where she lived with her son Walter, and another in Queenstown, where the accused resided rent-free. Her daughter, Svetlana, lived separately with her own family.

The family harmony, already strained, fractured completely in the aftermath of Nadia’s death. Initially, the accused presented a will dated 7 July 2013. This document dramatically altered the family’s inheritance landscape. It bequeathed the Queenstown property directly to the accused, the Cheltenham property to Walter, and left Svetlana with a cash gift of only $60,000. This was a significant departure from what was understood to be his mother’s long-standing intentions.

Svetlana, immediately suspicious, particularly of the signature on the document, refused to accept its validity. This triggered a period of tense negotiations between the siblings, conducted through their respective lawyers. The dispute eventually led to the accused abandoning the 2013 will and instead seeking a grant of probate for an earlier will from 1995. This much older will directed that the entire estate, including both properties, be liquidated and the proceeds divided equally among the three children.

On 23 March 2016, the accused was formally appointed executor based on this 1995 will. The two properties were sold, and on 28 November 2016, net proceeds of $982,756.84 were deposited into a newly opened estate bank account, to which the accused was the sole signatory. The very next day, the events giving rise to the second, more serious charge occurred. The accused electronically transferred $760,100 from the estate account to a gold dealer, City Gold Bullion, using the funds to purchase 46 bars of untraceable gold bullion. He took personal possession of the 14.5 kilograms of gold and, the day after, closed the estate bank account permanently. This single transaction, effectively converting over three-quarters of the liquid estate into a portable, untraceable asset, became the central focus of the criminal prosecution for theft.

Chapter 3: Key Evidence and Core Disputes

Prosecution’s Main Evidence and Arguments:

• The 2013 Will: Alleged to be a forgery. The Prosecution relied heavily on the testimony of the accused’s sister, Svetlana, who stated she was familiar with her mother’s handwriting and that the signature on the 2013 will was not genuine.
• Contradictory Witness Testimony: The Prosecution highlighted inconsistencies in the recollections of the two men, Mr Cirocco and Mr Gonis, who had witnessed the 2013 will, suggesting it was possible the document had been pre-signed before they arrived.
• Motive for Forgery: The 2013 will vastly favoured the accused, securing his rent-free home, which provided a powerful motive for him to create or use a fraudulent document.
• The Gold Purchase: The timing (one day after receiving funds), the conversion of traceable cash into untraceable bullion, the purchase being in the accused’s personal name, and the failure to use the dealer’s secure storage were all presented as circumstantial evidence of a dishonest intention to steal the funds.
• Alleged Admissions: The accused’s nieces testified that he had made statements to the effect that he controlled the money and would not reveal its location, which the Prosecution argued showed a consciousness of guilt.

Accused’s Main Evidence and Arguments:

• Eyewitness Testimony: The Defence relied on the evidence of Mr Cirocco, a witness to the 2013 will, who testified under cross-examination that he saw the accused’s mother sign the document in his presence.
• Lack of Expert Evidence: The Defence highlighted that the Prosecution had not called any expert handwriting analyst to prove the signature on the 2013 will was a forgery, relying solely on the opinion of a financially interested family member.
• Executor’s Power to Invest: It was argued that under the Trustee Act 1936 (SA) and the terms of the 1995 will, the accused, as executor, had the power to invest estate funds. The purchase of gold, it was submitted, was a legitimate (albeit unusual) investment intended to preserve the value of the estate while civil litigation by his sister was ongoing.
• No Obligation to Distribute: As legal proceedings regarding a family provision claim were still on foot, the accused was under no legal obligation to distribute the funds, thus no inference could be drawn from his failure to do so.

Core Dispute Points:

1. The Signature: Was the signature on the 2013 will authentic? The case pitted the direct eyewitness testimony of an attesting witness against the contrary opinion of the deceased’s daughter.
2. The Intent: Was the purchase of gold an act of theft intended to permanently deprive the beneficiaries of their inheritance, or was it a bona fide, if ill-advised, investment strategy undertaken by an executor?

Chapter 4: Statements in Affidavits

In criminal proceedings, particularly a trial by Judge alone, the primary evidence is given orally by witnesses in court, who are then subject to cross-examination. Unlike civil litigation, where parties often rely heavily on detailed affidavits that stand as their main evidence, this case proceeded in the traditional criminal manner.

While affidavits may have been used in preliminary stages or in the concurrent civil proceedings in the Supreme Court concerning the estate, they were not the central feature of this criminal trial. Instead, the Court’s focus was on the live testimony of the nine prosecution witnesses. The core of the case was built on what these individuals said in the witness box, how they responded to questioning, and the credibility the Court assigned to their recollections of events that had occurred many years prior. This process allowed the Judge to directly assess the demeanour and reliability of each witness, a critical factor when determining issues of fact beyond a reasonable doubt.

Chapter 5: Court Orders

Prior to the final hearing, the Court made several key procedural determinations that shaped the conduct of the trial:

• Trial by Judge Alone: The accused elected to have his case heard by a Judge sitting without a jury, pursuant to section 7 of the Juries Act 1927 (SA). This means the presiding Judge acted as the finder of both fact and law.
• Vulnerable Witness Provisions: The Court granted permission for the accused’s sister, Svetlana Liemareff, to give her evidence with the assistance of a one-way screen. This special arrangement, made under the Evidence Act 1929 (SA), was put in place to assist the witness, and the Judge formally directed herself not to draw any adverse inference against the accused from this measure.

Chapter 6: Hearing Scene: Ultimate Showdown of Evidence and Logic

The trial was not a showcase of extensive legal argument but a meticulous examination of memory, motive, and credibility. The central showdown revolved around the events of 7 July 2013, the day the disputed will was signed.

The Prosecution’s case for forgery rested almost entirely on the firm assertion by the accused’s sister that the signature was not her mother’s. However, this position was directly contradicted by the testimony of the two witnesses, Mr Cirocco and Mr Gonis. While their memories were imperfect concerning the precise sequence of events, Mr Cirocco, a long-term friend of the accused, became more certain under cross-examination. He maintained that he saw Nadia Milewich apply her signature to the document, albeit slowly. The Court was therefore faced with the testimony of an independent eyewitness against the opinion of a beneficiary who stood to gain financially if the will were invalidated.

The evidence regarding the theft charge painted a picture of deeply suspicious conduct. The swiftness of the transaction—transferring over three-quarters of a million dollars the day after it landed in the estate account—was striking. The choice of asset, untraceable gold bullion, and the accused’s decision to take personal possession of 14.5 kilograms of it rather than use secure storage, strongly suggested an intention to conceal the funds. However, the defence successfully created a crucial crack of doubt. They argued that these actions, while unorthodox, were not inconsistent with an attempt to protect the estate’s value from market fluctuations during a protracted legal battle.

The Judge’s reasoning focused on the high standard of proof required in a criminal trial. For the forgery charge, the direct evidence of an eyewitness could not be dismissed lightly. For the theft charge, the Court had to be satisfied that the accused’s actions were not just a breach of his duties as an executor, but were criminally dishonest. In assessing this, the Judge made a critical observation on the distinction between suspicion and proof beyond reasonable doubt. Her Honour stated:

The circumstances in which the transaction was made makes me deeply suspicious of the accused’s intent. A state of suspicion however is not the same as satisfaction beyond a reasonable doubt.

This statement was determinative. It acknowledged the questionable nature of the accused’s conduct while simultaneously upholding the foundational principle of criminal law: suspicion, no matter how strong, is not enough to secure a conviction. The prosecution had to exclude any reasonable possibility consistent with innocence, and in this, they failed.

Chapter 7: Final Judgment of the Court

Having analysed the evidence and applied the relevant legal principles, Her Honour Judge Telfer delivered the final verdicts:

• Count 1 (Aggravated Dishonest Dealing with Documents): Not Guilty.
• Count 2 (Aggravated Theft): Not Guilty.

Chapter 8: In-depth Analysis of the Judgment: How Law and Evidence Lay the Foundation for Victory

Special Analysis

The jurisprudential value of this judgment lies in its disciplined application of the “beyond reasonable doubt” standard to a highly suspicious, circumstantial case. It serves as a powerful reminder of the distinction between conduct that may give rise to civil liability (such as a breach of an executor’s duties) and conduct that constitutes a criminal offence. The Court demonstrated that even where an accused offers no evidence and their actions appear secretive and self-serving, the onus remains squarely on the Prosecution to negate any reasonable hypothesis consistent with innocence.

Judgment Points

• Weight of Lay Opinion vs. Eyewitness Testimony: The Court was unwilling to convict on a charge of forgery based solely on the lay opinion of an interested party (the sister), especially when it was directly contradicted by the sworn evidence of an eyewitness to the signature. This underscores the high value placed on direct observational evidence.
• No Adverse Inference from Silence: The Judge correctly directed herself that no adverse inference could be drawn from the accused’s decision not to give evidence at trial or answer police questions upon his arrest.
• Suspicion is Not Proof: The Judge’s core finding on the theft charge—that deep suspicion is not a substitute for satisfaction beyond reasonable doubt—is a foundational principle of criminal justice. This case is a textbook example of its application.

Legal Basis

The judgment was fundamentally grounded in the elements of the offences as defined by the Criminal Law Consolidation Act 1935 (SA), particularly sections 130 (definitions of property and dishonesty), 131 (dishonesty), 134 (theft), and 140 (dishonest dealing with documents). Crucially, the defence case relied on the powers of investment granted to a trustee under section 6 of the Trustee Act 1936 (SA) to create a plausible, non-criminal explanation for the accused’s conduct.

Evidence Chain

The Prosecution’s case failed because the chain of inference was broken at a critical link for each count.
* Count 1 (Forgery): The chain was broken by the evidence of the attesting witness, Mr Cirocco. His testimony that he saw Nadia Milewich sign the will created a reasonable doubt that the signature was forged, a doubt which the sister’s lay opinion could not overcome.
* Count 2 (Theft): The chain was broken by the inability to exclude a non-criminal explanation. The accused’s statutory power as an executor to invest funds, combined with the context of ongoing civil litigation over the estate, created a reasonable possibility that his motive was asset preservation, not theft. The Court held:

I am unable to exclude beyond a reasonable doubt that the accused purchased the gold bullion as an investment pending the resolution of civil proceedings. That possibility would mean that the following elements are not satisfied: That the dealing was dishonest (as defined in section 131); and or That the accused intended to permanently deprive the owner of the property, or make a serious encroachment on the owner’s proprietary rights.

This passage encapsulates the entire reasoning for the acquittal on the theft charge. It shows that once a single reasonable hypothesis consistent with innocence remains, the prosecution’s case must fail.

Analysis of the Losing Party’s Failure

The Prosecution’s case faltered on two key fronts:
1. Over-reliance on Lay Evidence for Forgery: For a serious allegation like forgery, relying solely on the opinion of a financially interested witness, without corroborating expert handwriting analysis, proved to be a fatal weakness, especially when contradicted by an eyewitness.
2. Inability to Negate the “Investment” Hypothesis: For the theft charge, the Prosecution could not definitively prove a criminal intent. While the actions were unorthodox and secretive, they were not, in themselves, illegal for an executor to perform. The Prosecution failed to present evidence that could conclusively rule out the possibility that the accused was acting, however misguidedly, in what he believed was the best interest of preserving the estate’s capital.

Implications

1. The High Bar of Criminal Proof: This case vividly illustrates that actions which appear morally wrong or deeply suspicious do not automatically equate to criminal guilt. The standard of “beyond reasonable doubt” is a high and exacting one.
2. The Duties of an Executor are Complex: Being an executor is a position of significant trust and legal responsibility. While the accused was acquitted of criminal charges, his actions likely exposed him to significant civil liability for breaching his duties to the beneficiaries.
3. The Perils of DIY Estate Planning: The conflict originated from a disputed, home-made will that did not have the safeguards of independent legal advice, medical assessments of capacity, or professional translation—all issues a solicitor would have addressed.
4. Evidence is Everything: A court’s decision is not based on feelings or suspicions, but on the evidence presented. The direct testimony of an eyewitness, even one with a hazy memory, can outweigh strong circumstantial indicators to the contrary.
5. Criminal vs. Civil Law: An acquittal in a criminal court does not mean the end of the matter. The beneficiaries still have the right to pursue the executor in a civil court for the return of the assets, where the standard of proof is lower (“on the balance of probabilities”).

Q&A Session

• Q1: Why wasn’t the accused convicted if his actions were so suspicious and secretive?
  • A: In criminal law, the prosecution must prove guilt “beyond a reasonable doubt.” This means the judge must be sure of guilt. In this case, while the accused’s actions were highly suspicious, the defence was able to raise a “reasonable possibility” that he was not acting dishonestly, but was instead trying to invest the estate’s money to protect its value. Because this possibility could not be completely excluded, the standard of proof was not met, and the judge was required by law to acquit him.
• Q2: Does this mean the sister and other brother lose their inheritance?
  • A: Not necessarily. This was a criminal trial. The judgment notes that the sister, Svetlana, had already commenced separate civil proceedings in the Supreme Court under the Inheritance (Family Provision) Act. She can continue that action. Furthermore, as beneficiaries, she and her brother can sue the accused in a civil court for his actions as executor. In a civil case, they would only need to prove their case “on the balance of probabilities” (i.e., more likely than not), which is a lower standard than in a criminal trial. They could argue he breached his duties as a trustee, and a civil court could order him to return the assets to the estate.
• Q3: Why was the evidence of the sister about the signature not enough to prove forgery?
  • A: The sister’s evidence was her lay opinion. While she was familiar with her mother’s signature, her evidence was directly contradicted by Mr Cirocco, who was an independent eyewitness to the signing of the will. He testified that he saw the mother sign the document. When a court is faced with conflicting direct evidence like this, it creates doubt. Without further expert evidence, such as from a forensic handwriting analyst, the judge could not be satisfied beyond a reasonable doubt that the signature was a forgery.

[Appendix: Reference for Comparable Case Judgments and Practical Guidelines]

1. Practical Positioning of This Case

• Case Subtype: Criminal Law – Alleged Theft by an Executor & Forgery of a Will
• Judgment Nature Definition: Final Judgment

2. Self-examination of Core Statutory Elements

This case involved a crossover of two major legal areas. The required elements for each are outlined below.

⑥ Wills, Estates and Succession Law
* Core Test (Validity): The primary dispute around the 2013 will concerned its formal validity, specifically whether the signature of the testator was genuine. The Court also implicitly considered the issues that were not pursued but which were present in the facts:
* Testamentary Capacity: Did the testator have the mental capacity to understand she was making a will and the effect of its provisions? The evidence of her cognitive decline and dementia raised this as a major issue, which is why her solicitor advised obtaining a medical certificate.
* Undue Influence or Duress: Was the testator coerced or unduly influenced by a beneficiary (in this case, her son, the accused) to make the will in his favour? The circumstances of the accused being present and acting as an interpreter raised this possibility.
* Core Test (Family Provision Claims): This was not part of the criminal trial but was running in parallel civil proceedings. The test is:
* Has the deceased failed to make “adequate provision” for the proper maintenance, education, or advancement in life of the applicant (in this case, her daughter Svetlana)?
* In assessing this, a court considers the applicant’s financial position, their relationship with the deceased, the size of the estate, and the deceased’s moral obligation to provide for them compared to other beneficiaries.

⑧ Criminal Law and Traffic Law
* Core Test (Elements of the Offence): The Prosecution was required to prove both the physical act (Actus Reus) and the mental element (Mens Rea) for each charge.
* Theft: The Actus Reus was dealing with the property (transferring the funds). The Mens Rea was the dishonest intention to permanently deprive the beneficiaries of it. The case failed because the Mens Rea could not be proven beyond reasonable doubt.
* Dishonest Dealing: The Actus Reus was producing the allegedly false will. The Mens Rea was knowing it was false and intending to deceive. This failed because the foundational fact—that the will was false—could not be proven to the required standard.
* Core Test (Standard of Proof): The core of this judgment rests on the application of the criminal standard of proof. The evidence must exclude any “reasonable doubt.” If a reasonable explanation consistent with innocence exists, the accused must be acquitted.
* Core Test (Sentencing): As the accused was acquitted, sentencing principles did not apply. However, had he been convicted, aggravating factors under Section 21A of the Crimes (Sentencing Procedure) Act (or equivalent SA legislation) would have included the significant breach of trust as an executor and the large sum of money involved.

3. Equitable Remedies and Alternative Claims

While this was a criminal case, the factual matrix is rich with potential civil and equitable claims that the beneficiaries could pursue against the executor.

• Breach of Trust / Breach of Fiduciary Duty: An executor owes a strict fiduciary duty to the beneficiaries of the estate. This includes the duty to act in their best interests, to not profit from the position, to keep proper accounts, and to preserve estate assets.
  • Application: The accused’s conduct of converting the entire liquid estate into a high-risk, untraceable asset, taking personal possession of it, and failing to account for its whereabouts would almost certainly constitute a serious breach of his duties. The beneficiaries could sue him personally in a civil court to account for the funds and to make good any loss to the estate. The fact he was acquitted of the crime of theft is not a defence to a civil claim for breach of trust.
• Unjust Enrichment / Constructive Trust:
  • Application: If the accused has used the estate funds (the gold) for his own benefit, the beneficiaries could argue that he has been unjustly enriched at their expense. A court could impose a constructive trust over the gold or any property acquired with it, meaning that legally, the accused would be deemed to be holding it on behalf of the beneficiaries, not for himself.

4. Access Thresholds and Exceptional Circumstances

• Regular Thresholds:
  • Family Provision Claims: In South Australia, an application under the Inheritance (Family Provision) Act 1972 must generally be made within 6 months from the date of the grant of probate. In this case, the sister’s legal team correctly filed her application just within this strict time limit.
• Exceptional Channels (Crucial):
  • Out of Time Claims: While the 6-month limit for family provision claims is strict, courts do have the power to grant an extension of time in certain circumstances, such as where the applicant was not aware of their rights, was under a disability, or where the estate has not yet been distributed.
  • Suggestion: Missing a deadline in estate litigation is not always fatal. However, it creates a significant legal hurdle. It is critical to seek legal advice immediately upon learning of a death in the family to ensure all time limits are met, as seeking an extension requires a separate, and often costly, court application.

5. Guidelines for Judicial and Legal Citation

• Citation Angle:
  • It is recommended to cite this case in legal submissions where the prosecution’s case is largely circumstantial and relies on drawing inferences of dishonest intent from suspicious conduct. It is a prime authority for the principle that a non-criminal, albeit irresponsible or foolish, explanation for an accused’s conduct can be sufficient to raise a reasonable doubt.
• Citation Method:
  • As Positive Support: When defending an accused executor or trustee, this authority can be used to argue that unorthodox investment decisions, even if secretive and ultimately in breach of civil duties, do not automatically meet the high criminal standard for theft without clear evidence of an intention to permanently deprive.
  • As a Distinguishing Reference: If an opposing party cites this case to suggest suspicious behaviour is not enough, one could distinguish it by pointing to additional factors in the current matter, such as explicit admissions of theft, evidence of the funds being spent for personal use, or a complete lack of any plausible investment rationale.

Conclusion

Everyone needs to understand the law and see the world through the lens of law. The in-depth analysis of this authentic judgment is intended to help everyone gradually establish a new legal mindset: True self-protection stems from the early understanding and mastery of legal rules.

Disclaimer

This article is based on the study and analysis of the public judgment of the District Court of South Australia (R v MILEWICH [2022] SADC 70), aimed at promoting legal research and public understanding. The citation of relevant judgment content is limited to the scope of fair dealing for the purposes of legal research, comment, and information sharing.

The analysis, structural arrangement, and expression of views contained in this article are the original content of the author, and the copyright belongs to the author and this platform. This article does not constitute legal advice, nor should it be regarded as legal advice for any specific situation.

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