Schools body in talks to sever ties with Catholic order marred by abuse

Edmund Rice Catholic schools considering cutting ties with abuse-plagued Christian Brothers In short: The Trustees of Edmund Rice Education Australia, is looking to part ways with the Christian Brothers after agreeing to take on its child abuse payouts. In June, the order announced it was running out of money for survivors and applied to stop all litigation on compensation claims, some of which were in the final stages. What's next? A lawyer says survivors may have to wait up to two years to receive settlements due to new legal barriers. The national organisation set up by the Christian Brothers, which runs 61 Catholic schools across Australia, is considering severing its ties with the order amid mounting tensions over compensation to victims of child sexual abuse. Relations between the Trustees of Edmund Rice Education Australia (TEREA) and the Christian Brothers have become strained after the order did not disclose relevant information about its financial position. For nearly a decade, the Christian Brothers transferred school properties worth hundreds of millions of dollars to TEREA, typically for free or for as little as a dollar. The entity oversees schools attended by 44,000 Australian students that received $732.7 million in taxpayer funding last year. In June, the Christian Brothers applied to have all child abuse litigation against it stopped as it was running out of money and facing imminent insolvency. The child abuse royal commission estimated that historically 22 per cent of Christian Brothers were alleged paedophiles. After initially resisting attempts to make it liable for the abuse claims, TEREA agreed to take responsibility for current and future payouts under a revised compensation scheme. When Four Corners asked TEREA chair Stephen Brown why, given the alleged child abuse and broader financial difficulties, TEREA did not go to Rome to request breaking away from the Brothers, he said the trustees were now discussing the future governance of the organisation. He said it was a "seminal moment" for TEREA. "Over the next 12, 18 months, the province of Christian Brothers in Australia will be out of the way or removed," Mr Brown said. "We will define a narrative; we will define the governance structure that's appropriate for the schools in this country." Any change of this nature would need the approval of the Vatican. In March, the order met with the schools body. Mr Brown said it asked for $1.5 million a year to support its elderly members in the community. Mr Brown said he was never told this could include paying eight Brothers who are convicted paedophiles. He said he only learned from Four Corners that the Christian Brothers covered the living costs of these men. "We will not be giving any money derived from the public purse," Mr Brown said, adding TEREA had rejected the request for funds. "Parents of this country work hard … We will not be seeing any of that money being supportive of Christian Brothers who are paedophiles." The Christian Brothers did not answer Four Corners' questions about whether it had asked TEREA for this money. Still, they said under a proposed scheme of arrangement, ongoing care of the retired brothers would come from the sale of assets and "no taxpayer funds or school fees paid by parents will be used for the future care and living needs of any Christian Brother". Mr Brown said TEREA was also not told that the Christian Brothers were facing insolvency. An actuarial report commissioned by the Christian Brothers' lawyers in December estimated that the order faced $774 million in current and future legal liabilities for child abuse claims. Its province leader, Brother Gerard Brady, swore in an affidavit to the NSW Supreme Court on June 23 that the order went to numerous Catholic entities, including TEREA, archbishops and even the Holy See to explore "third party support". He wrote that the "purpose" of meetings with TEREA and other Catholic bodies between January and March was to "provide information" in relation to the "severe financial position and expectation that [the Christian Brothers] will be facing insolvency in the near term". Mr Brown told Four Corners he had no recollection of this information being provided in the meeting. "I do not recall that matter being prosecuted, in terms of insolvency," Mr Brown said. The CEO of Edmund Rice Education Australia, Liam Smith, later confirmed that he, too, did not recall any mention of insolvency in the meeting. Mr Brown said at an earlier meeting in January with Edmund Rice Education Australia's president, Michael Slattery, the Christian Brothers had expressed that it was experiencing some financial difficulty, but did not discuss "the extent of it" and there was no request for support for survivors. The Christian Brothers did not answer Four Corners' questions about what information it had provided to TEREA. 'They ruined my life' Caught in the middle are hundreds of survivors around the country with active claims against the Christian Brothers, including 21 with agreed settlements that have not been paid. Damian Davies was a 15-year-old schoolboy with an angelic voice when he won the popular Channel Nine talent program, New Faces, in 1981. But the following year, he alleges he was assaulted and digitally raped by the principal of Edmund Rice College in Wollongong, Christian Brother Peter Lennox. "They ruined my life," Damian said. "It's affected me on every level since I was that young boy to the old man that you see before you now." Damian turned to drugs and alcohol to numb the pain. He believes his brother, who later died by suicide, was also abused at Edmund Rice College. He has been clean for years, but the damage he did to his body has had lifelong consequences, and he is now gravely ill. In June, Damian's solicitor Hassan Ehsan from Turner Freeman was in the final stages of negotiating his claim with the Christian Brothers when the order announced it faced insolvency. All cases, including those where survivors had settled but were just waiting to have the money transferred into their accounts, were put on hold. While the order was visiting Catholic entities asking for money because it was going broke, it was continuing to negotiate with survivors and gave them only one day's notice that it was applying to put the cases on hold. Survivors and their lawyers were shocked to learn that, on TEREA's estimate, the Christian Brothers had, from 2013, transferred $891 million of school property to it, typically for free or for the nominal sum of one dollar. It has been estimated that the property is now worth closer to $2 billion. It included some of the most valuable land in the country — including Waverley College in Sydney's eastern suburbs and St Kevin's College in Melbourne's exclusive Toorak. Victims and their lawyers have compared the Christian Brothers' legal strategies to those of a corporation. "James Hardie comes to mind, the big tobacco cases in the US," Mr Ehsan said. "As someone told me a long time ago, follow the money." Damian believes the order is waiting for survivors like him to die. "If we die, it goes away. They don't have anything to answer," Damian said. "I think the delay tactics are to either hope we just go away and forget all about it, or to die." TEREA chair Stephen Brown apologised to Damian for the delay in his settlement being reached. "I'm here to say to that man, sorry," Mr Brown said. "We need to act according to the mission which we're given. Which is to act with justice. "I'm here to say clearly to the victim-survivors and their supporter people, we're going to be working with them." TEREA has now approved a binding agreement to become the defendant in these cases if the revised creditors scheme is approved. Lawyer Judy Courtin, whose firm represents 37 Christian Brothers survivors, said for all TEREA's commitments, it had put so many legal barriers up that it seemed "an impossible task" to get the scheme approved. She said TEREA was insisting on approval from Christian Brothers creditors, planned to seek separate guidance from the NSW Supreme Court, and wanted some properties to be sold before those survivors who are waiting for settlements could receive their money. Dr Courtin said NSW laws brought in after the royal commission mean all of this was "completely unnecessary". She feared survivors could be left waiting another year or two to get their settlements. "The additional psychiatric harm this is causing our clients … is hideous," Dr Courtin said. "We have people who are suicidal, we have people who are dying. It is another whole round of hideous institutional abuse and trauma. "There is no need at all for these dear people to continue to wait, to have this hanging over their head, to have this big question mark, 'Will I even get paid at all?'" Mr Brown said TEREA's legal advice was that these procedures had to be followed. "We will go through the process and we, at the bottom of this, will make it right to victim survivors," he said. Late on Friday, a spokesman for TEREA told Four Corners it had secured a line of credit to fast-track payments to survivors who had reached a settlement but were waiting for the money to be transferred. Global tactics The Christian Brothers' approach to compensation isn't limited to Australia. As the financial crisis unfolded here, the order's legal strategy was also drawing scrutiny in its birthplace of Ireland. In Ireland, the Christian Brothers established the Edmund Rice Schools Trust in 2008, the year after the Australian order set up Edmund Rice Education Australia. Solicitor Philip Treacy, who has represented many Christian Brothers victims in Ireland, says in his experience, it is the only Catholic order that has refused to nominate a defendant. Under Irish law, it means a victim is forced to sue every living person who was a member of the order at the time of their abuse. "This is a matter of choice," Mr Treacy said. "And the implications then for plaintiffs, clients of ours who were victims of the most heinous criminal acts, they're then faced with this strategy, which is completely unnecessary. "And whilst it's strictly speaking legal what they're doing, it is, to quote the words of a judge recently in Ireland, it's morally bankrupt." The head of the Christian Brothers congregation in Ireland, Brother David Gibson, released a statement saying, "regrettably protracted litigation diverts and depletes resources available for future claims and serves only to enrich the legal firms focusing on protracted litigation". James Gallen, a legal academic from Dublin City University who has examined the responses of religious orders to the abuse crisis across the world, said the tactics in Ireland and Australia were mirrored elsewhere in the world — for instance, in the United States and Canada. "They've declared themselves bankrupt in some jurisdictions such as the United States," Dr Gallen said. "They have used every procedural safeguard and obstacle to maximise their reputation and avoid survivors being able to access them in Canada. "I think the adaptive nature of the strategy across countries and across time is designed to exhaust survivors. "It's designed to turn people away and wear, wear people down." Watch Four Corners' full investigation Christian Brothers Inc. tonight from 8:30 on ABC TV and ABC iView.