The Christian Brothers Catholic order on Thursday obtained a moratorium on all claims against it, halting a civil trial that was due to begin in three weeks in the Victorian supreme court. The trial, involving survivor Curtis Hogan, who alleges he was abused by three Christian Brothers at St Patrick's primary school in Ballarat, will likely be abandoned, according to his lawyers at Ken Cush and Associates.
Moratorium Halts Multiple Trials
The moratorium, granted in the New South Wales supreme court, stops 10 trials scheduled for July and 18 slated for August. The Christian Brothers claims it is about to run out of money and wants to set up a scheme to sell about 36 properties for $216 million to partially meet estimated liabilities of $774 million from current and future abuse claims.
Survivors and their lawyers expressed shock at the sudden nature of the court bid. Sangeeta Sharmin, principal solicitor at Ken Cush and Associates, told the Guardian: “The ambush from the Christian Brothers, who have been preparing this application for months but served firms with documents at 4:30pm for a hearing commencing at 10:00am the next day, has had no regard whatsoever to the impact on individual cases across Australia.”
Asset Transfers Under Scrutiny
Many survivors have expressed alarm at how the Christian Brothers moved assets to Edmund Rice Education Australia (EREA), an independent entity that operates former Christian Brothers schools. Property records show vast holdings transferred for as little as $1, including multimillion-dollar homes in Sydney. The Australian Financial Review reported that EREA received transferred land worth $891 million, now potentially worth $2 billion, though the Christian Brothers estimates the transfers at $540 million.
Court documents reveal $95 million of college land in Queensland, $85 million in New South Wales and the ACT, $134 million in Victoria, and $227 million in Western Australia and South Australia were transferred. The Christian Brothers had also settled 21 claims worth $11.4 million but had not yet made payment prior to the moratorium.
Federal Government Voices Concerns
On Thursday, lawyers for the federal government voiced concerns about the “disturbing” asset transfers. Minister for Social Services Tanya Plibersek expressed serious concern in parliament, stating: “Growing up, I was taught that there was one church and one god, not multiple corporate entities that transfer assets for purposes that are yet to be made clear.”
Jodie Harris, partner at Arnold, Thomas & Becker, said: “Our clients are rightly asking the question: if the Christian Brothers claim they cannot pay, why aren’t the Trustees of Edmund Rice Education Australia held responsible? Today, EREA owns and operates the very schools where so many children were abused. They command an annual income of more than a billion dollars and have had hundreds of millions of dollars in property effectively gifted to them. How is it fair or right that they cannot help pay for the damage caused by the Christian Brothers?”
Christian Brothers’ Response
The Christian Brothers says it is not attempting to stop survivors from suing EREA or scrutinising the property transfers. A spokesperson said: “We reiterate again that neither the moratorium … nor the proposed creditors scheme of arrangement, are intended to in any way act as an impediment to claimants wanting to bring actions against EREA.” The spokesperson added that they have sought “financial assistance from EREA and other Catholic institutions to continue to respond to those who have been harmed.”
EREA stated that the property sales were part of a slow, ongoing process to transition schools, delayed due to complex land transfers. The moratorium will allow survivors to consider the property sell-off scheme, with the court to return in August. If survivors and other creditors do not agree, the Christian Brothers have warned they will go into liquidation, leaving even less funds for creditors.
Ciara White, abuse lawyer at Slater and Gordon Lawyers, said survivors face an agonising choice. The scheme would generate $216 million to meet more than $770 million in liabilities. “That’s 25 cents to the dollar,” White told the Guardian. “As a proposition to our clients, it’s gut-wrenching. Many have been waiting for decades, and for this compromise to be handed to them – it’s devastating.”
*A pseudonym has been used to protect the survivor’s identity.
