It seemed reasonable to give travel agents suspected of defrauding the NT Health Department a chance to "make amends" and pay money back, former Northern Territory health minister Robyn Lambley has told the Supreme Court.
Ms Lambley began giving evidence in the trial of former NT police commissioner John McRoberts, who has pleaded not guilty to attempting to pervert the course of justice between May and November 2014.
Mr McRoberts is accused of trying to deflect a travel agent fraud investigation, which had marked Xana Kamitsis, who Mr McRoberts had been in a sexual relationship with, at the top of a list of "high risk" targets.
Investigators were looking into the conduct of 27 travel agents, suspected of invoicing the NT Health Department under a pensioner concession scheme for inflated flight costs.
The court heard Ms Lambley met with Mr McRoberts, then NT chief minister Adam Giles and then NT Health Department chief executive Len Notaras in late June 2014.
Mr McRoberts led a discussion about "next steps" for investigating the travel agent rorting, including a so-called civil strategy, Ms Lambley told court.
"He advised that in the first instance it would be better to not proceed with a criminal investigation, that in the first instance it would be better to send letters to all the travel agents identified, giving them notice that there had been an overpayment," Ms Lambley said.
Giving the travel agents a chance to "make amends" seemed reasonable at the time, according to Ms Lambley.
During cross-examination, Mr McRoberts' lawyer Anthony Elliot drew attention to Ms Lambley's lack of diary notes from that time.
"When I was dismissed from cabinet by chief minister Giles my diaries and my notebooks disappeared," Ms Lambley said.
"I kept notes on almost everything I did. They disappeared. They were removed from my possession."
NT finances questioned in court
Earlier, former NT under treasurer Jodie Ryan — now the NT Chief Minister's Department chief executive — told court she was surprised and "a bit annoyed" about the civil strategy proposal.
"Mr McRoberts indicated that he didn't think there would be enough evidence and therefore we might be going down a civil route, which might involve writing to the travel agents," Ms Ryan said.
Ms Ryan was also questioned at length about the state of the NT's finances in 2014 and whether NT Police was under financial pressure.
She said the situation wasn't "perilous", as suggested by Mr McRoberts' lawyer.
"The finances of the NT have been in a difficult state since the global financial crisis," Ms Ryan said.
"I wouldn't describe it as being in a perilous state at that time, compared to what we have now."
The court also heard evidence from former NT Health Department risk and assurance services director Dean Gardiner, who was responsible for reporting suspected fraud and corruption within the department to the chief executive.
Mr Gardiner told the court his travel agent fraud investigation file went missing.
"I've got no idea what happened to my investigation file," he said.
"It was kept in my office in a locked drawer."
