May 28, 1988

IT WAS a year since Andrew Kalajzich had reached one of the brightest pinnacles of his career - having been appointed by the then Premier, Mr Wran, as one of the inaugural Tourism Commissioners for NSW.

It was three years since Andrew Kalajzich had achieved his dream of running an international hotel on the Manly waterfront when, in December 1982, the Manly Pacific International Hotel had been opened by Mr Wran.

And it was only hours after Andrew and Megan Kalajzich had been to an Australia Day function in Manly.

He was the lion of Manly, the fishmonger's son made good, and she the smiling, attractive wife who supported his every move.

Some short time after 1 am on the morning of January 27, 1986, Franciscus Wilhelmus Vandenberg, former grocer, foundry worker, hotelier, arrived at a ground-level side door at No 31 Fairlight Crescent, Fairlight. He was armed with a cut-down .22 calibre rifle.

Taking off his shoes, Vandenberg pushed gently and the door opened. He entered a rumpus room, took care not to step in a puddle of water caused by faulty plumbing and climbed a wooden staircase.

At the top, he turned into the open door of the master bedroom, seeing in the gloom the silent, prone figures of Megan and Andrew Kalajzich beside each other on the queen-size bed.

He might have heard the clinking of yacht masts riding serenely in the water below or the noise of the ocean outside the Heads, directly in line with the balcony, and the sliding glass door from the master bedroom that opened on to it.

The only other noise came from the radio which had been left on. Elsewhere in the house, Kalajzich's son, Andrew jun, 21, and mother-in-law May Carmichael were asleep.

Vandenberg walked into the space between the bed and the built-in wardrobe. His eyes, weak as they were, became accustomed to the darkness.

Andrew and Megan Kalajzich had not been in bed for long, Megan Kalajzich at about 12.50, her husband after hearing the 1 am pips on the bedside clock radio. Megan apparently had gone straight to sleep.

The 50 centimetres of the rifle, with its 20 cm silencer, gave him little room to move. The muzzle was a matter of 10 cms from the Megan Kalajzich's head. He pulled the trigger, twice.

The noise rebounded off the walls. Blood spurted from Megan Kalajzich's head as her eyes opened in horror and her mouth gasped. Kalajzich immediately rolled off the bed. Vandenberg shot twice at the space where his head had been.

With Kalajzich on the floor, Vandenberg turned, went back out the bedroom door and escaped.

Kalajzich saw the gaping face of his wife. On his account later to police, he grabbed his pillow to staunch the flow of blood, although police evidence later showed the pillow was not moved.

Kalajzich ran down the steps to the door, ostensibly to check whether the murderer was still inside the house. He returned. Megan Kalajzich was mortally wounded. Kalajzich dialled his hotel, the Manly Pacific International, asking for help, then rang an emergency telephone number.

The Kalajzich dream was shattered. The man who was often held up as the penultimate example of what a newcomer to this country could achieve was to struggle on for more than two years in the half-light of uncertainty.

It ended this week when the NSW Supreme Court found him guilty of his wife's murder.

There always was an element of instability in Kalajzich. A complex, able man, who had the drive and vision - and the ruthlessness - to rise above his humble origins, he could never, even at the height of his success, dispel the darker suggestions about his life and activities.

His glittering image never quite married the reality some businessmen saw -of a mean, vindictive manipulator who turned everything he touched to his own advantage, and used anything, including politicians, to further his goals.

He was the man who had "put Manly on the map", bringing an international hotel where fellow businessmen were still running shops. But he managed to antagonise local commerce to the point of rebellion.

Megan, whom nobody ever spoke poorly of, fell in with anything he aspired to. She would have made most men happy.

He had extensive psychiatric treatment over problems that quite clearly involved his marriage and his wife. She stayed with him when other women might well have gone.

But Kalajzich on at least two occasions found other women more attractive -enough, it seemed, to overcome the combined influences of psychiatry and marital support.

He misled one of them into thinking he was going to marry her. And before the murder, a purple, scented letter from a correspondent, never publicly revealed, turned up at his door.

Kalajzich lived in a harbourside home with one of the most breathtaking outlooks in Sydney. From his early 30s he rose commercially and socially. But he managed, 15 years ago, to drive the family car over a cliff with his wife and son inside.

Despite everything that life had to offer him, and despite being admired, even adored by many, he conceived the idea of having his wife murdered.

The saga began in 1939, when Andrew Kalajzich's father, Andrew sen, and mother, Olga, migrated to Australia from Yugoslavia with their first-born, Tony.

The second youngest of 11 children in a family of winegrowers, Andrew sen had decided to join two brothers who had already come to Australia. He arrived penniless, and went into the fish shop business.

Andrew Kalajzich was born in the Crown Street Women's Hospital in 1941. A sister, Olga, was born subsequently. The family, still in the fish trade, moved to Chatswood.

Young Andrew was drawn quickly into business. In an interview he gave years later, he said: "Many an afternoon was spent cleaning potatoes, working alongside my parents."

In the late 1940s, the family moved again, to Palm Beach, then in 1955 to The Corso, Manly, where they opened a shop, Ocean Foods.

Ocean Foods, which changed location to bring it closer to the promenade, was a success. It is still there today.

Andrew Kalajzich was married in 1962 to a dental nurse, Megan Carmichael, only daughter of Mrs May Carmichael. They had a daughter, Michelle, and a son, Andrew jun.

By 1966, when he was 25, Andrew Kalajzich and his brother opened a seafood restaurant, K's Snapper Inn, in South Steyne, Manly.

The family bought several other shops and upstairs offices in the corner of The Corso and South Steyne, a shrewd and profitable move, according to a local real estate agent.

Ocean Foods and K's Snapper Inn boomed. Megan worked as a hostess in the restaurant.

Kalajzich had big ideas. He saw in Manly, situated between the Harbour and ocean, far more potential than had ever been accorded it. He had ideas about development of the ocean front, the Corso and tourism.

But sadly, according to evidence that came out years later in the Coroner's Inquest into Megan Kalajzich's death, there was another element in his life.

According to the evidence, he became infatuated with one Marcellina Iurman, a Yugoslav girl from South America, who worked weekends in Ocean Foods.

In 1973, aged 32, Kalajzich was elected president of the Manly Chamber of Commerce and set about revitalising the area.

The family moved into the beautiful, multi-storeyed harbourside home in Fairlight. But his private life continued to slide.

Kalajzich and Miss Iurman, according to evidence at the Coroner's inquest into Megan Kalajzich's death, continued their relationship. She had gone back to South America for a year to get away from it.

"Miss Iurman gave evidence in the inquest about her relationship with Kalajzich," said Detective-Sergeant Bob Inkster, of Manly Police, who handled the murder investigation.

"She gave evidence that she went back to Brazil because she could see that her relationship with him was bound for doom and could not be because he was a married man.

"It did not come out that she was acting as a woman scorned. Her honesty in the witness box impressed everyone."

Miss Iurman returned to Australia in September, 1973. Three days later, a most astonishing thing happened.

In Commonwealth Parade, near his home, the road moved along the edge of a 10-metre drop on to rock shelves and the harbour. It is easily negotiated by drivers who regularly use the road.

On September 9, driving his wife and son along Commonwealth Parade towards Fairlight, Kalajzich, on the account he gave to police, felt sick.

Instead of stopping the car and putting on the hand-brake, he jumped out the driver's door and left the car in motion. The car careered over the embankment, bounced down the cliff-front and landed on rocks.

Sergeant Inkster said the car, had it not followed the curvature of the road, could have landed in water. Megan and Andrew jun were uninjured.

A Manly police constable attended the accident and drove Megan and Andrew jun home. He said Kalajzich had been taken to hospital by ambulance, suffering from shock.

He also said Mrs Kalajzich had told him the couple were "experiencing difficulties".

Sergeant Inkster said: "It was treated at the time as a traffic accident. But following that Mrs Carmichael was asked by Megan to move in with them. It was blatantly obvious Megan Kalajzich was a dependent person."

That month, Kalajzich began consultations with a Mosman psychiatrist, Dr Donald Hill. Kalajzich told him about the car accident, saying his head hurt when he thought about it.

The treatment was to last for five years and Dr Hill said in later evidence that it appeared Kalajzich was resolving his problems. Whatever benefits Kalajzich was getting, they did not resolve his problem over how he felt for Miss Iurman.

According to evidence in the Coroner's Court, Miss Iurman said that in 1974 Kalajzich had led her to believe that he had divorced Megan and was "a free man".

She said that in 1975 or 1976 - she could not remember which year -Kalajzich had proposed to her and she suggested they buy a ring and Kalajzich bought one. She had asked him to have his name engraved on it.

One day, he had told her they would be married the next day at the Boulevard Hotel. She had obtained official forms for the wedding, signed them and given them to Kalajzich, along with her passport.

But he had failed to turn up to collect her. He returned the passport. She never saw the ring again.

Kalajzich saw Dr Hill until 1978. Megan Kalajzich saw him on a couple of occasions.

In the meantime, Kalajzich's public life was prospering. Re-elected president of the Chamber of Commerce year after year, he had the firm support of two vice-presidents, newsagent John Humphrey and lawyer Brian Symons.

The chamber set up a Tourist Promotion Committee which Kalajzich chaired. Manly Council became involved. The committee came to comprise three representatives of the council and three from the chamber, with Kalajzich as chairman.

Andrew and Tony Kalajzich decided to redevelop the site of an existing hotel, the Manly Pacific, into something which was in the international class. They felt the idea was a good one. No other such hotel in Sydney took advantage of Sydney's magnificent beach frontages.

The Kalajzichs, who had already committed themselves, approached the State Bank, which backed the venture. Development started in November, 1980.

The result, valued at $16 million, was the Manly Pacific International Hotel, consisting of 14 storeys, 180 rooms, four restaurants and bars, a nightclub, and initially 250 employees.

It was a triumph of foresight, determination, enterprise: good enough for the State Bank in its 1983/84 annual report to feature on its front cover.

Kalajzich was on the crest of a wave. "It was a huge gamble to build a hotel here and I don't think I was fully aware how difficult it would be," he said at the time.

Kalajzich drove a Mercedes and traded it in for a Jaguar. He was pictured with State politicians, including ministers.

The children had a good Catholic education. Andrew jun went to St Augustine's College. Michelle went to a local Catholic college.

Charitable events such as dinner dances and annual Melbourne Cup functions were held at the Manly Pacific with money going to, for example, the Manly Youth Centre or a senior citizens' association.

Megan Kalajzich fitted in with grace and dignity. A pretty brunette, stylish and well-groomed, she took part in social and charitable occasions.

A friend of the family said: "She was a gentle, ladylike person. Never heard her say a nasty word about anyone. Everyone had complimentary remarks about her. But she certainly was no socialite. She was not at all pushy."

But privately, there was more trouble. In 1982, Miss Iurman reappeared and, according to evidence at the original committal proceedings against Kalajzich, the two had sexual intercourse on a number of occasions.

According to Paul Dracakis, a former member of the Manly Chamber of Commerce, a vindictiveness and meanness which Kalajzich demonstrated in his business life was reflected in his private life.

He said: "Kalajzich was ambitious and all Megan wanted was a family life. They were going two different ways."

There were also rumblings of discontent in the business community about how far and how fast he was moving, and about a presumptuousness and arrogance in his personal style which had not been apparent in his earlier, and humbler, days.

A Balgowlah real estate agent and former member of the Manly Chamber of Commerce told the Herald that Kalajzich, if brimming with goodwill at charity and community events, was quite different when crossed.

"Andrew changed when he went to the pub," the agent said. "I was chairman of the membership committee of the Chamber of Commerce but I would ring him up and he would never ring me back. I think he was a little man in a big job. When I started to criticise him at the meeting he started to rant and rave."

Dracakis, acknowledged as Kalajzich's bitterest critic, had no hesitation in condemning him.

"He intimidated a number of people," he said. "He intimidated anyone who spoke against him. He was pushing too hard and he was not consulting the business community. He was riding over the wishes of small business.

"On one occasion, when a businessman was going to speak against him at the Chamber of Commerce, he had a group of heavies sitting in the public gallery.

"With one of the bakers, he threatened to cut off the orders for him supplying bread to his hotel if the baker did not do what he wanted to do.

"Everything was for himself. He was right in with the council and he had some powerful political friends. Kalajzich had people licking his boots. He would give people who were powerful free meals and tickets to places."

Lionel Bray, pharmacist and present secretary of the Manly Chamber of Commerce, said: "He was the big businessman. The hotel was going to be the saviour of Manly. But we are all small businessmen. They got to the point where they could not stomach him and the way he was going."

Few would deny Kalajzich's term in office brought benefits.

Neil Pickup, manager of the Manly Travel Centre on Manly Wharf, said: "The job he did for Manly was fantastic. He had enough guts to invest in Manly when a lot of people were not investing in Manly."

The present president of the Manly Chamber of Commerce, Mr Cooper Wright, said: "Andrew Kalajzich initiated the promotion of Manly. He saw potential way back 10 or 12 years ago."

Despite this, by 1983 resentment in the business community was ready to boil over. Moves were made to depose him as president.

It was mooted at the chamber that proxy votes would be taken from businessmen who did not want to or could not attend the meeting where the positions of president and vice-presidents would be decided.

Kalajzich initially rejected the idea of having proxy votes counted. The Manly Daily, which was represented on the chamber, paid for a legal opinion that proxy votes in these circumstances were valid.

The Balgowlah real estate agent said: "The feeling against him was very bad. It was so bad that at the election they just swept the three of them off the top.

"I got 15 proxies and Paul Dracakis got 40. People just said: 'What do you want us to do?' They were fed up with the way things were going."

Mr Dracakis said: "I was there to get rid of him. There were 139 votes in the ballot and he only got 29 of them."

The deposing of Andrew Kalajich, together with Mr Humphrey and Mr Symons, was traumatic for some of Kalajzich's supporters.

The estate agent said: "Andrew Kalajzich's words to the chamber were: 'Is this all I get?'"

In retrospect, the troubles even then did not stop with Kalajzich's failure to hold his position in the chamber.

In November, 1984, Tony Kalajzich pulled out of his Manly Pacific International partnership with his brother for reasons still not clear.

He told the Herald that, since the murder, the family had declined to make public comment.

Pat Pedula, former treasurer of the Chamber of Commerce under Andrew Kalajzich's presidency, said there was pressure on Kalajzich to return to a more moderate lifestyle.

He said: "Andrew Kalajzich put so much time into community activity that the family got fed up with it and said: 'Come back to us.'"

In January, 1985, the then Minister for Sport and Tourism, Mr Cleary, confirmed Kalajzich as one of seven commissioners on the newly-formed NSW Tourism Commission.

He was appointed for a two-year term. In an interview at the time, Kalajzich said: "In effect, we will run tourism in New South Wales."

In his position of power and influence, Andrew Kalajzich might have seen his wife as being too homely, not exciting enough.

A relationship is alleged to have developed between Kalajzich and his secretary and executive assistant at the hotel, Marlene Watson.

Mark Blackmore, managing director of Blackmore Laboratories, a health products company at Balgowlah, said too much had been made of the relationship.

He said: "Marlene Watson was married to a man who had become a paraplegic as a result of a car accident. She pushed him round for years and years.

"I did not see any evidence that she was thick with Andrew. They were supposed to be out somewhere dancing cheek to cheek. I happened to be present one night when they were together at a function and I can tell you that that is a load of rubbish.

"Whether she was romantically involved I don't know. If she got romantically involved it was after he was in jail."

After Kalajzich had been remanded in custody last year, police were told of an attempt by a business contact of Kalajzich to smuggle a letter to him without the letter going through the normal system.

Sergeant Inkster said: "It was a letter by Marlene Watson. It was a lengthy letter of endearment. The following day I went to her unit and she surrendered her typewriter. We were able to prove the letter came from that typewriter."

The relationship became an issue at the trial, although Ms Watson, according to Sergeant Inkster, indicated she would not be a co-operative witness. She was was not called to give evidence.

The Herald, having a look at the Kalajzich's former home in Fairlight, met a woman living nearby who said that before the murder she had received mail for Kalajzich mistakenly put into her letterbox.

"The letter was scented," she said. "It was a purple envelope."

"I took it up and I met the mother-in-law. I said: 'Are you Mrs Kalajzich?'She said: 'No, I am not'.

"I said: 'This letter has come for him'. She said: 'Oh, I don't know where they are. He just comes and goes, you know.'"

On January 11, 1986, Megan Kalajzich had just returned home to 31 Fairlight Crescent, put her car into the lockup garage at street level above her home when a man hooded with a balaclava approached and put a rifle to her head.

The rifle failed to discharge. The gunman struck her on the back of the head with the rifle and she fell down a flight of steps.

Sergeant Inkster, then acting Divisional Detective-Sergeant at Manly, gave the investigation to two detectives.

"The two I had assigned to the case had great difficulty in getting in touch with Andrew Kalajzich. They told me they had left messages for him and spoken with his wife. She was quite amazed as to why he had not got in touch with us.

"I left the assault matter in the hands of the two men. We could not take it any further. He seemed to show a disinterest in the thing. You can now see why. I would have expected him to have come to me to have questioned me what I had done about it."

On the Australia Day, 1986, function at Manly, which Andrew and Megan Kalajzich attended, there were as always different perceptions of them.

Paul Dracakis said: "Andrew did not spend more than five minutes with her. When the function ended, she left with the Humphreys, not with Andrew."

A politician's wife said: "On Australia Day, 1986, the Kalajzichs were a perfectly happy and normal couple."

But the signs of recent trauma were still apparent for those who scrutinise d Megan Kalajzich more closely.

She had the bruises from the January 11 assault on the back of her neck. A friend said: "Megan showed signs of being afraid. She had wanted to know what the attacker wanted."

The Kalajzichs went that evening to their weekender at Cottage Point, in the Pittwater area, to spend several hours with John and Jeanette Humphrey.

They returned to Fairlight about 11pm, where they watched television for a time. Megan retired to bed, followed by her husband. Soon after, Megan Kalajzich's life ended.

The house at 31 Fairlight Crescent was vacated by Andrew Kalajzich and his surviving family after the murder. It was sold in July, 1986, to a couple who had come from the country.

Last year, following Andrew Kalajzich's arrest for the murder, attempted murder and conspiracy to murder his wife, the Manly Pacific International Hotel was sold to a syndicate of Chinese businessmen.

Bookmaker Bruce McHugh, through his property investment company, last year bought Sea Foods in The Corso and K's Snapper Inn in South Steyne.

Members of the Kalajzich family continue to live in the area.

Kalajzich was incarcerated last year after his bail was revoked and was brought each day from the Metropolitan Remand Centre, Long Bay, to the NSW Supreme Court, Taylor Square.

Slimmer than in his heyday, he pleaded not guilty to the charges against him.

During a tedious 11-week trial, Kalajzich sat in the dock listening intently, taking notes, rarely looking at the co-accused, Kerry Orrock, beside him.

Behind sat an apparently loyal row of family and friends. They included his son-in-law, Jim Economides, daughter Michelle, Tony Kalajzich and Joan Thorburn. Kalajzich's solicitor, Mr John Webb, a long-time professional and business associate, sat at the bar table.

Andrew jun, 21, a Crown witness in the first days of the trial, did not reappear until the closing address for his father.

Kalajzich's aged parents, Andrew sen and Olga, remained away until the closing stages.

What thoughts they all had might never be known. Probably they all hoped the nightmare would end somehow. In their heart of hearts, they might all have asked just one question: "Why did it have to happen?"