ACCC investigation

Mr Graeme Samuel, AO


Australian Competition & Consumer Commission

This document has been prepared by Alan Smith, one of the inaugural members of a group originally called The Casualties of Telecom (now The Casualties of Telstra or COT).  For the past sixteen or so years, Alan has been ridiculed by a number of Government agencies, and his claims labelled vexatious and frivolous because those agencies had vested interests in hiding the truth from public scrutiny.  That all began to change, however, on 3rd October 2008 when Mr G Freidman, who was hearing Alan’s Administrative Appeals Tribunal claims, noted:

“Let me just say, I don’t consider you, personally, to be frivolous or vexatious – far from it. I suppose all that remains for me to say, Mr Smith, is that you obviously are very tenacious and persistent in pursuing the – not this matter before me, but the whole – the whole question of what you see as a grave injustice, and I can only applaud people who have persistence and the determination to see things through when they believe it’s important enough”.


This 45 -page document is a summary of much longer reports in relation to two Casualties of Telstra (COT) claimants: a 183-page report regarding Graham Schorer’s claims against Telstra, including 447 separate exhibits; and a 163-page report regarding Alan Smith’s claims against Telstra, including 486 separate exhibits.  This summary report has been prepared specifically to explain how, even in a democratic country like Australia:

1.          A legal arbitration process, administered under the Commercial Arbitration Act 1984 by the Telecommunications Industry Ombudsman (TIO) could still be hijacked by the defence, with complete disregard for the rule of law;

2.          It appears as though the Government appointed regulator (then called AUSTEL) was powerless to intervene and stop the COT arbitrations being hijacked, because of Section 70 of the Australian Crimes Act 1914?

3.          Three senior Telstra executives held positions on the TIO Board and the TIO Council at the same time as some of them were the subjects of the TIO-administered COT arbitrations.  We believe the positions that these Telstra executives held on the TIO Board and Council may well be why there has never been a proper or transparent investigation into Telstra’s conduct during the COT arbitrations, for example:  when two of the first four original COT claims were being assessed by the TIO-appointed arbitrator, a Senate Committee had already been investigating one of the Telstra TIO Board members for misleading the Senate regarding the telephone exchanges that the businesses of these two COT claimants were connected to – exchanges that were then also part of the COT arbitration investigations.  Telstra FOI documents show that, while Telstra’s Corporate Secretary was also a member of the TIO Board, he had been given the task of deflecting the Senate charges.

4.          In 1994, AUSTEL (now called ACMA), investigated and prepared draft reports regarding the telephone complaints that had been lodged by COT claimants Alan Smith and Graham Schorer.  It took sixteen years before Graham and Alan were finally given copies of these draft reports, in November 2007 and October 2008, and it was then clear that, back in 1994, AUSTEL had found, in both cases, that Telstra had misled and deceived Alan and Graham concerning their telephone problems. 

5.          Four Australian citizens can be assured that the legally binding arbitration agreements they have signed were drafted by the Special Counsel attached to the TIO, only to learn, after the agreements were signed, that the defendants in the case (Telstra) had actually drafted the agreement.

6.          The claimants involved in the legal arbitration could discover, years after the arbitration, that changes had been made to the ‘final’ version of the arbitration agreement, after it had been sent by the arbitrator to the claimants Solicitor for his legal opinion but before the Solicitor’s clients (the claimants in the case) had signed it, without the Solicitor or his clients ever being notified of the changes.

It is important to know that, although restrictions on public servants speaking publicly about their work were relaxed in 1974, it seems that public servants in AUSTEL and Ministerial offices have used various Sections of the Australian Crimes Act 1914 to allow them to withhold their knowledge of any wrong-doing they may have uncovered during their regulatory duties, for instance, while they were investigating valid complaints lodged by various COT claimants. It also seems that, during the COT arbitrations, public officials within the Government Regulator (then AUSTEL), could not report on crimes committed by Telstra during the COT litigation process because, according to Section 70 of the Australian Crimes Act 1914, no-one inside AUSTEL could publically comment on their awareness that Telstra was submitting false and/or flawed defence documents to support their arbitration defence.

The denial of natural justice to the COT Cases that arose as a result of a doctored Government Report being accepted as true evidence when the major findings against Telstra had been removed before it was submitted to the Government and arbitrator – a clear breach of AUSTEL’s statutory obligation to me (as one of the complainants whose matters were the subject of the AUSTEL’s investigations) under Section 335 (1) and 342 of the Telecommunications Act 1991 which states: (1)

“After concluding an investigation under subsection 335(1). AUSTEL may prepare and give to the Minister a report under this section. (2) After concluding an investigation under subsection 335 (3) AUSTEL must prepare and give to the Minister a report under this section. (3) A report under this section must cover: (a) the conduct of the investigation concerned; and (b) any findings that AUSTEL has made as a result of the investigation.”

In Alan Smith’s letter of 15th September 2010 to Kate Hebbard, Director, Communications Enforcement & Compliance Communications Group, (the ACCC) see Exhibit 62 Alan states:

“…This report and the accompanying exhibits will help you understand what really transpired during the COT arbitration process.  As with all COT matters, what you have is a very small business fighting large Government Corporations and Departments.  It would be bad enough if we had to fight Telstra alone, but we have also had to fight the Government Regulator AUSTEL because, as I have previously proved, they withheld vital evidence that, in my case, would have given me grounds to demand further investigation under the already signed Fast Track Settlement Proposal (FTSP).  If that FTSP had been allowed to proceed, rather than the claimants being forced to move to an Arbitration Process, and if AUSTEL had provided the draft version of their Cape Bridgewater Holiday Camp report to the Minister, the arbitrator, and me, there would not have been any need for an arbitration procedure because AUSTEL’s secret draft report had already found so adversely against Telstra.  After all, how could Telstra have argued against the legitimate findings of the Government Regulator, whose findings had been based on documents the regulator had sourced from Telstra?  All that would have been required would have been for the assessor to award quantum and ensure that my phone problems had all been fixed.

In summary – AUSTEL’s hiding of their true findings has cost me dearly and what the TIO, AUSTEL and now the ACMA have failed to understand is that it took eighteen months of my life and an enormous financial burden to complete my arbitration and all I was unknowingly doing was attempting to prove the facts that AUSTEL had already proved (in their draft report) while Telstra submitted false witness statements, under oath, denying there were any problems affecting my business!

Have the ACMA Chairman Chris Chapman, the ACMA Board or the TIO fully understood what happened as a result of AUSTEL concealing from the arbitrator and me what they knew to be the truth regarding my ongoing telephone problems?  Senate Estimate Committee Hansard records confirm that Telstra spent millions of dollars in legal fees defending COT claims when, as it has now been revealed, the claims of at least two and possibly eight COT claimants had already been proved, months before the claimants signed the arbitration agreement.

Have the ACMA Board, the TIO Board and the TIO Council fully understood how much it has cost tax payers for Telstra to defend the COT claims when Telstra was a fully-Government-owned corporation?  The cost to the taxpayer included the hiring of the TIO-appointed arbitrator; the TIO-appointed Special Counsel; and the TIO-appointed Resource Unit of DMR Canada and Lanes Telecommunications.  The Resource Unit alone worked on assessing claim and defence documents from 1994 to 1998 – and all this money was spent as part of process where the Government Regulator had already secretly found in favour of eight of the COT claimants.  If this isn’t in the public interest then I would like to know what is.

On top of all these expenses (plus the enormous cost to the claimants) you can then add the cost of investigations run by Senate Estimates Committee Hearings between 1997 and 1999 and the Commonwealth Ombudsman’s Office into the way Telstra refused to provide the claimants with the FOI documents they had a legal right to, particularly since the Government Regulator’s secret draft report had already determined that Telstra had been at fault all along.  The extra cost to the families who supported the COT claimants in this mammoth battle with the goliath Telstra Corporation simply can’t be counted but that cost was also increased enormously by the protection that AUSTEL provided to Telstra so they could withhold vital evidence during the TIO-appointed arbitrations.  If withholding the true findings of a Government Regulator’s official investigation from the relevant Minister, a legally appointed arbitrator and legitimate claimants during a Government-endorsed arbitration process, at the cost to the Australian public (as part-owners of Telstra when it was fully owned by the Government) of millions of dollars, is not a matter of public interest then I have to ask again, what is in the public interest?

 The issues detailed above are alarming, just on their own, and the enormous costs entailed could well have been avoided completely if the Government Regulator had exposed the evidence they uncovered in 1994 instead of hiding it, but this all pales into insignificance when you realise that the same Government Regulator is now demanding a $1,845.20 FOI fee to provide me with some of the very same documents that they must have acquired from Telstra in order to produce their draft Cape Bridgewater report, but which they hid from everybody involved in the arbitration – except Telstra.

Freedom of Information (FOI Act)

On 25th March 1994 Ms Philippa Smith, Commonwealth Ombudsman, wrote to Telstra’s CEO Frank Blount noting:

“…On 20 January 1994 I notified Mr Holmes that I had received complaints from three of the ‘COT Cases’, Mr Graham Schorer, Mr Alan Smith and Mrs Ann Grams, concerning Telecom’s handling of their FOI applications under the Freedom of Information Act (FOI Act). They said that they were concerned at the publicity and significant diversion of Telecom resources caused by recent release of certain information by Mr Smith and that the delay in release of documents was due to the need for Telecom to check all documents prior to release so that Telecom is alert to the possible use/misuse of sensitive information. Your officers also informed My Wynack (Commonwealth Ombudsman Director of Investigations) that they expected the vetting of the documents would take only a couple of days. Mr Smith informed my officers recently that Mr Black (Telstra) that no further documents will be released.”  

Exhibit 50-k below, confirms from official Senate Estimates (Hansard) dated 29th November 1994 that Senator Ron Boswell (National Party) asked Telstra’s David Krasnostein: –

“Why did Telecom advise the Commonwealth Ombudsman that Telecom withheld FOI documents from Alan Smith because Alan Smith provided Telecom FOI documents to the Australian Federal Police during their investigation.”

Telstra, AUSTEL and the Federal Government promised the first four COT claimants that Telstra would provide the them with all the documents they needed if they agreed to sign for arbitration.  Warwick Smith, the TIO, administered the arbitrations and Alan Smith’s arbitrator was Dr Gordon Hughes. Alan warned both these people, in writing, over several months, that Telstra was not providing the documents he was entitled to receive.  On 7th September 1995 the new TIO, John Pinnock, received a letter from Telstra’s Ted Benjamin, admitting that Telstra had withheld at least 40% of Alan Smith’s legally requested FOI documents until two weeks after the arbitrator had handed down his award but Alan did not receive a copy of that letter until 2002.  On 26th September 1997 Mr Pinnock advised the Senate:

“…In the process leading up to the development of the Arbitration procedures, the Claimants were told that documents would be made available under the Freedom of Information Act.”

The Australian Financial Review stated on 23rd March 1999 that: 

“… a Senate working party delivered a damming report into the COT dispute. The report focussed on the difficulties encountered by COT’s members as they sought to obtain documents from Telstra. The report found Telstra had deliberately withheld important network documents and/or provided them too late and forced members to proceed with arbitration without the necessary information”.  Senator Eggleston said: “They [Telstra] have defied the Senate working party.   Their conduct is to act as a law unto themselves”.

Exhibits E50-k and E50-l are attached to show just how badly this Telstra arbitration process has affected the lives of decent Australian citizens.  If a trained Victoria Police Detective Sergeant, who was only involved in our matters for two years or so, can be affected so badly, imagine what effect it has had on ordinary Australians (the COT claimants) who have spent sixteen years fighting to be heard.

E50-k is a sworn statement dated 10th August 2006, prepared by Des Direen, an ex-Senior Investigator with Telstra.  It discusses Mr Direen’s belief that Detective Sergeant Rod Kueris of the Victoria Police Fraud Squad, who was investigating Casualties of Telstra allegations of criminal behaviour by Telstra in 1999/2000, was under surveillance, including phone interception.  At the same time, Alan Smith told Detective Sergeant Kueris that he believed he had been followed from his Queens Road accommodation while he was helping the police with their investigations.  Points 20, 21 and 22 in Mr Direen’s statement also suggest that Alan’s telephone conversations were intercepted in 1993/94, and Australian Federal Police files confirm this to be so.

Not only did the AFP acknowledge that Alan’s phone conversations were intercepted but Alan himself also found evidence that Gordon Stokes, a local Telstra employee, was providing someone referred to as ‘Micky’ with lists of phone numbers that Alan had called over a certain period.  When Alan confronted Mr Stokes about this, at Mr Stokes’ Portland home, he was told that Mr Stokes was not the only Telstra employee listening in to Alan’s telephone conversations.  Although Alan raised this ‘Micky’ issue (FOI document folio K03273) with the arbitrator and Telstra’s Ted Benjamin this matter was never investigated.


During the Administration Appeals Tribunal (AAT) Hearing into Alan Smith’s FOI claims against the ACMA – the Respondents between July and October 2008, Alan provided both the AAT and the Chairman of the Australian Communication Media Authority (ACMA – previously called AUSTEL), and the entire ACMA Board, with conclusive proof that AUSTEL/ACMA has known since AUSTEL’s letter of 16th November 1994 that Telstra knew the Cape Bridgewater Holiday Camp SVT results they used to support their defence of Alan’s arbitration claims were false.  On the 3rd October 2008, the actual day of the Hearing Graham Schorer was called as a witness. Transcripts of his evidence record Graham declaring: 

“But as has been demonstrated here today everybody seems to feel as though, because these matters are a long time ago, that there is no public interest. What I am saying is that the public interest, and I believe that I have become a very good advocate of what is in the public interest as the spokesperson, is that these crimes that have been committed under the veils of secrecy and confidentialities are of public interest and no secret veil of confidentiality covers a criminal offence” see Exhibit 23-l.

In November / December 1993, Bell Canada International (BCI) officially advised AUSTEL that they had not found any major problems in the Telstra network in relation to the claims lodged by Difficult Network Fault (DNF) customers who were, by then, known as the Casualties of Telstra, or COT Cases

The first four COT claimants, Maureen Gillan, Ann Garms, Graham Schorer and Alan Smith had each signed a Fast Track Arbitration Procedure (FTAP) agreement by April 1994, as part of their attempts to have their Telstra-related telephone problems officially arbitrated via the TIO-administered FTAP process.  The COT claimants however, were never told that the Senior Telstra Executives who would represent the defendants in the arbitration (Telstra) were also members of the TIO Board and the TIO Council at the same time as they were representing Telstra in the COT arbitrations.  These four claimants were also not told that the TIO and the TIO staff would not intervene if they discovered, during the arbitration process, that Telstra was acting outside the law by:

a.           Submitting to the arbitration test results known to be false but still covered by sworn statutory declarations and witness statements; and

b.          Withholding relevant documents legally requested by the claimants until after the arbitrator had handed down his decisions.

On 31st December 1995, Alan Smith asked the TIO to provide Alan with copies of all the documents related to the original documents related to the COT arbitration process.  On the 10th January 1996, the TIO replied, noting: 

“I refer to your letter of 31 December 1995 in which you seek to access to various correspondence held by the TIO concerning the Fast Track Arbitration Procedure. I do not propose to provide you with copies of any documents held by this office. 

Seven years later, when Alan finally did receive some of the documents he had asked for, he discovered proof that, six weeks after the arbitrator had brought down his award, the TIO Special Counsel, Telstra the TIO and arbitrator were all corresponding between each other concerning the impracticable Cape Bridgewater Bell Canada International (BCI) tests.

In Canberra on 21st March 1995, Alan Smith spoke to Frances Woods and Cliff Mathieson of AUSTEL, who was the facilitator of the COT/Telstra Fast Track Arbitration Procedure (FTAP), telling Mr Mathieson (then AUSTEL’s Chief Engineer) that he believed the BCI Cape Bridgewater tests were fundamentally flawed and either AUSTEL and Dr Hughes (the arbitrator) or Telstra (the defendants) should therefore withdraw the BCI test results from Alan’s arbitration process.  Mr Mathieson replied that he understood the frustrations related to the BCI and SVT reports, both Alan’s frustration and that of other COT claimants too but, he said, AUSTEL was powerless to intervene and he was ‘unable’ to comment further on the matter.  At that time, although both Alan and Graham Schorer (COT Spokesperson) had officially signed for the FTAP as part of their attempt to have their ongoing telephone problems fixed, neither Alan or Graham were aware of Section 70 of the Crimes Act 1914 and the way it prohibited public servants from revealing anything they might know in relation to problems within or related to another Government Department.  At the time of the COT arbitrations, Telstra was fully Government-owned.

Before Neil Tuckwell was appointed as Chairman of AUSTEL in 1994, he had been a senior executive with Telecom New Zealand, a company then, with strong ties to Telecom Australia (now called Telstra) and, on 12th July 1995 (see Exhibit 30-i below), it was Mr Tuckwell and AUSTEL’s Cliff Mathieson (also an ex Telecom Australia employee) who, without being specific, advised Alan Smith’s solicitors (Tait’s) that the Bell Canada International (BCI) tests ‘might not have been conducted at all’, when Cliff Mathieson noted: 

“This letter responds to your correspondence dated 29 June 1995 (your reference Mr Ezzy.7.18) In relation to your client Mr Alan Smith. Mr Tuckwell, Chairman, AUSTEL, has requested that I reply on his behalf.

The tests to which you refer were neither arranged not carried out by AUSTEL. Questions relating to the conduct of the tests should be referred to those who carried them out or claim to have carried them out.”

It is difficult to imagine AUSTEL’s Chairman and Chief Engineer only providing half the details regarding tests that we now know could not possibly have ever been carried out because the CCS7 monitoring equipment that BCI reported they had used could not be facilitated at either the Cape Bridgewater RCM or Portland exchange.  Statements from Brian Hodge MBA of BC Telecommunications, who Telstra had employed as an engineer for twenty-nine years Exhibit 30-f and two Telstra witnesses Exhibit 30-e further confirm that BCI could not have carried out the tests they describe in their Cape Bridgewater report.  If Mr Tuckwell and Mr Mathieson weren’t worried about the Australian Crimes Act 1914 when they wrote this letter then what was it that stopped them from spelling out the truth sixteen years ago? Just imagine had either of these public servants told the truth to what they knew in 1995, Alan Smith’s matters that have festered since then would have been investigated and found correct in 1995

During the COT arbitrations, as part of Graham Schorer’s  role as the official COT Spokesperson, he had many discussions with members of the group regarding serious flaws in the BCI and Service Verification Tests (SVT) reports that were being used as evidence in the COT arbitrations.  The COT claimants believed that the fundamentally flawed BCI investigation and the SVT testing process had not uncovered any of the real and serious problems that were still being experienced by those COTs who still had businesses up and running:  four COT claimants had already lost their businesses by then, as a direct result of the ‘undetected’ telephone problems.

Alan Smith has compiled two reports titled Service Verification Tests (SVT):Telstra’s Misleading and Deceptive Conduct and Bell Canada International (BC)) Tests: Telstra’s  Misleading and Deceptive Conduct dated 8th August 2010 which has already been provided to Mr Samuel, AO, Chairman of ACCC on CD.  These reports show that not only did AUSTEL allow Telstra to limit the scope of the COT BCI and SVT tests but, in the cases of both Alan and Graham at least, they also allowed Telstra to limit the parameters regarding the Government Regulator’s mandatory testing standards so that the only complainants to be included in the testing process would be those that Telstra believed were suffering from telecommunications problems.  This meant that, even though AUSTEL had already advised the Federal Government that AUSTEL’s investigations showed that at least some of the problems being reported by the COT claimants were certainly quite ‘real’, the mandatory testing would still not include all those COT claimants that Telstra refuted could be suffering phone problems to the extent the COT Cases alleged.

Alan can provide further evidence confirming that twice during the COT arbitrations, AUSTEL warned Telstra that the Service Verification Testing Process that Telstra carried out on 29th September 1994, at the Cape Bridgewater Holiday Camp, was deficient, but Telstra was still allowed to submit to the arbitration the results of this deficient testing process, covered by Telstra affidavits swearing that the testing process had met all of AUSTEL’s regulatory standards.

Eventually various other COT claimants began complaining to Graham Schorer as (COT spokesperson) about the unethical way that Telstra carried out the Service Verification Testing Process and finally Graham refused to have these tests carried out at his business unless Telstra first connected a ‘call line identification monitoring device’ so Graham could see the results for himself, without having to rely solely on Telstra statements that the tests had been effective.  Telstra never did conduct any Service Verification Testing on Graham’s lines in 1994/95, the time period that the AUSTEL quarterly COT Case Report recommended. 

Exhibit 25-a (below) shows, on 28th November 1994, Telstra’s Peter Gamble wrote to AUSTEL’s Norm O’Doherty about an AUSTEL letter dated 16th November 1994 Exhibit 23-f, in which AUSTEL warned Telstra that the Cape Bridgewater Holiday Camp Service Verification Testing (SVT) process had been deficient.  Independent communications expert Brian Hodge, B Tech; MBA (B C Telecommunication) see Exhibit 30-f, and the attached CCAS data see Exhibit 23-a, confirm these deficiencies and prove that the required  regulatory Service Verification Tests that were supposed to have been carried out on all incoming calls to the Cape Bridgewater Holiday Camp were not carried out at all.  Mr Gamble’s letter to Mr O’Doherty states: 

“Norm, As agreed at one of our meetings and as confirmed in your letter of 16th November 1994, attached please find the detailed Call Delivery Test information for the following customers;

·          Bova – Ralphies Pizza, Mordialloc, Vic

·          Love – Loveys Restaurant, Dixons Creek, Vic

·          Main – Glen Waters Fish Farm, Glenburn Vic

·          Smith – Cape Bridgewater Holiday Camp, Vic

·          Turner – Gourmet Revolution, Moorabbin, Vic

·          Trzcionka – Trzcionka Hairdressing, Glenelg SA

This information is supplied to Austel on a strict Telecom-in-confidence basis for use in their Service Verification Test Review only and not for any other purpose. The information is not to be disclosed to any third party without the prior written consent of Telecom.

Mr Gamble’s letter appears to be a veiled and sinister attempt to use the Australian Crimes Act 1914 without actually naming it, and raises the following questions: 

o     Does the Crimes Act take precedent over Australian law?

o     Can Australian citizens actually be muzzled by the Crimes Act 1914 and therefore forced to conceal the truth about crimes they know have been committed against fellow Australians?

On 3rd October 2008, during an Administration Appeals Tribunal (AAT) Hearing into Alan Smith’s claim ACMA agreed to release to him, free of charge, all the FOI documents he had requested outside of the Act, Alan provided both the Chairman of the Australian Communication Media Authority (ACMA, and the entire ACMA Board, with conclusive proof that AUSTEL/ACMA has known since Mr Gamble’s letter of 16th November 1994 that Telstra knew the SVT results they used to support their defence of Alan’s arbitration claims were false.  This AUSTEL letter notes:

“The recent SVT results for Mr Alan Smith raises some issues on which AUSTEL requests clarification, as follows. (3) That Telecom will shortly provide, as requested in AUSTEL’s letter of 11 October 1994, a statement on: the deficiency of the current testing process for the “Call Continuity / Dropouts to Neighbouring LIC” test contained in the Service Verification Tests (SVT). This statement should also detail the action Telecom intends to take to address this deficiency,” see Exhibit 23-f.  

Exhibits 46-a and E46-b (below) use Telstra’s own Arbitration Briefing Report B003 to prove that, in 1995 / 96 Graham Schorer and Alan Smith were still lodging complains about the same type of telephone problems that were raised by AUSTEL with the then-Minister for Communications, the Hon David Beddall MP, in August 1993.  In other words – nothing had changed between 1993 and 1996, even though the 1994 arbitration process was supposed to have located and fixed these problems.

Exhibit 46-c (below), page 132 from Hansard records of a Senate Estimates Committee Meeting on 25th February 1994, report that the then-Shadow Minister for Communications, Senator Richard Alston, questioned the then-Chairman of AUSTEL regarding what he knew about the AXE telephone exchange recorded voice announcement (RVA) that had been causing major problems for Alan Smith’s business since 1992, by incorrectly advising callers that: “The number you are calling is not connected”.  This same RVA problem had been occurring at the Lonsdale AXE exchange that serviced Graham’s business between October 1995 to at least January 1996 see Exhibit 46-a

Page 133 of the same Hansard records confirms Senator Alston asking AUSTEL’s Robin Davey, in relation to Telstra’s Service Verification Testing Process: 

“Are you developing indicative performance standards to ensure that carriers provide an adequate phone service?” and Mr Davey replying:  “Yes, indeed. In the context of the COT Cases we are working specifically to get an agreement on a standard upon which we can sign off that the complaints, if they settle with Telecom, are receiving an adequate standard of telephone service at the time.”

When Senator Alston then asked:

“Will that be backed up by direction?” Mr Davey responded: 

“If necessary, yes.”

How are these issues connected to The Australian Crimes ACT 1914?

1.      The second paragraph at the start of this BCI issue reports that Cliff Mathieson either couldn’t or wouldn’t discuss with Alan Smith what he knew in relation to AUSTEL being aware that Telstra was using documents that Telstra knew were flawed, in their defence of a legal process facilitated by the Government. Mr Mathieson’s reluctance to continue this conversation with Alan suggests that the Crimes Act 1914 prohibited Mr Mathieson, a public servant at the time, from commenting on this matter, meaning that if the Crimes Act was used, unethically, to shield Telstra from being sued once AUSTEL had discovered that Telstra had falsified the Cape Bridgewater SVT report and used flawed BCI test results during the COT arbitrations.

2.      Pages 16, 17, 18 and 38 from Exhibit 45 (below) record proof, in AUSTEL’s own draft report, that, during Graham’s Federal Court Proceedings, Telstra knowingly deceived Graham regarding the Flexitel Telephone System that Telstra sold him but, at the time, this report was provided for comment to Telstra only, (and not to Graham), even though AUSTEL knew that Graham was in arbitration regarding the very same issues.

3.      On 11th January 1994, Telstra’s Steve Black wrote to the then-TIO, Warwick Smith (see Exhibit 17-c) who was, at the time, also the administrator of the COT arbitration process, noting that: 

“I also wish to confirm to you my previous advice regarding arrangements made with AUSTEL for the release of documents obtained from Telecom to the four customers currently proposed for the Fast Track arbitration process: Information obtained from Telecom, in the course of AUSTEL’s regulatory functions, and relevant to any parties involved in a formal arbitration process with Telecom under the control of the Telecommunications Industry Ombudsman (TIO) will only be released after consultation with the TIO and Telecom.”

In other words, Section 70 of the Australian Crimes Act 1914 may have swayed AUSTEL employees (public servants) that they could be charged if they disclosed to any of the COT claimants any adverse information regarding Telstra that AUSTEL uncovered during their normal regulatory duties and this was perhaps why Mr Mathieson told Alan that he was not allowed to discuss AUSTEL / Telstra issues with him.  This also means that any Government employee who knew anything adverse about Telstra / COT issues was bound by the Crimes Act 1914 to withhold that information from the claimants or to broadcast this knowledge publicly.

One example of Government officials and/or AUSTEL public servants withholding their knowledge of Telstra’s illegal acts carried out towards fellow Australians during the COT respective arbitration comes in a form of a letter dated 13th October 1994 see E50-a below. This AUSTEL FOI document folio 94/0269-05 (22) is a letter originally sent by a Telstra whistleblower (name deleted) to Parliament House Canberra, ACT 2600, and was received by the Office of the Hon Michael Lee, MP Minister for Communications.  This letter makes allegations against Steve Black and Rod Pollock, as the two Telstra executives who were involved in altering and removing information on discovery documents requested by the COT claimants under FOI.

This letter under the heading “Concerns and issues”, this document states: “1. Mr Steven Black, Group General Manager of Customer Affairs, who has the charter to work to address and compensate Telecom’s “COT” customers as well as the management of other customer issues related to Telecom, is involved in and initiates conduct and work practices that are totally unethical.  2. There are three main areas which Steve Black has sought to cover up the true facts of disclosure of customer information.  Particularly he has sought to cover up ‘broadcasting’ of the customer’s private information.”

·        Remove or change clear information on the position of liability

·        Diminish the level of compensation payable to COT customers

·        Dismissive of breaches in relation to matters regarding customer privacy.”

In other words, the Crimes Act 1914 Section 70 meant that AUSTEL and/or AUSTEL employees could not disclose their knowledge to the COT claimants the existence of this letter.

Please note: someone has added a hand-written comment on page one, pointing to Rod Pollock’s name and noting: Warwick Smith has been critical of Pollock on same issue.”  It should be noted that on the 16th May 1994, Alan Smith left irrefutable evidence with Sue Harlow (Deputy TIO) for her to pass on to Warwick Smith, together with his statutory declaration showing that he had also named Rod Pollock, as one of the Telstra employee’s who had removed information on requested documents and/or had not provided the correct documentation that should have accompanied existing received FOI documents E 50-b.  It is also important to point out that Sue Harlow when employed by AUSTEL after this incident while she was writing to Senator Alston on behalf of AUSTEL concerning both the TIO and AUSTEL’s concerns that Telstra was not participating in the arbitrations in an appropriate manner as they had previously advised AUSTEL they would (so as to avoid a Senate investigation) Mr Harlow made no mention of her knowledge that Telstra had altered information on requested FOI documents in an attempt to minimise their liability at the costs to the COT Cases claims. Had the Crimes Act 1914 – Section 70 not been in existence at the time Sue Harlow was writing to Senator Alston see Exhibit 43 concerning the COT FTAP process Ms Harlow or for that matter, other executives from AUSTEL may have found it appropriate to advise Senator Alston in 1996, that Telstra had acted unlawfully (outside of the law) towards the COT Cases and in doing so, the process had not afforded them natural justice.   

It is important to understand that, before Alan Smith and Graham Schorer signed the Arbitration agreement on 21st April 1994, Warwick Smith (TIO) already had both the Coopers & Lybrand and AUSTEL COT reports.  The AUSTEL report in particular explained the importance of the SVT process, which had been implemented by AUSTEL in response to recommendations in the Coopers report, to ensure that the phone services of any Difficult Network Fault (DNF) customers were operating to AUSTEL’s specified standards.

Important promises given to the COT Cases by AUSTEL and Telstra before they signed the FTAP that were not adhered to by Telstra. Has the provisions contained in the Crimes Act of 1914, been the reason why AUSTEL has been powerless to comment on Telstra’s unlawful conduct of submitting known deficient SVT defence documents? Does the Crimes Act of 1914 have precedent over any public servant disclosing their knowledge that a Government Owned Corporation has committed a criminal offence over a fellow Australia citizen? When Mr Rumsewicz’s report (see page 12 below) Exhibit 28 indicated that Telstra’s SVT process had not necessarily been accurate noting: “the statistical test being applied to the collected data is inappropriate”, should Telstra have been allowed to use this collected data to support their COT arbitration defence?

It has been established below in Exhibit 37-d that AUSTEL allowed Telstra to limit their mandatory parameter performance testing standards so that Telstra could meet their licence obligations and in doing so disadvantage some of the Cot claimants who had already signed for arbitration. It has also been established see Exhibit 23-a, to E23-f that regardless of Telstra deficient Service Verification Testing to some COT Cases businesses AUSTEL turned a blind eye and allowed Telstra to use these deficient results to support their arbitration defence. 

On 20th January 1994 AUSTEL’s Cliff Mathieson Specialist Advisor Networks and Michael Elswood, Manager of International Standards Section wrote to Telstra’s General Manger, Network Operations concerning the Service Verification Tests noting:

“Where test results do not meet the essential outcome, remedial action should be taken and the relevant tests repeated to confirm correct network operation.”  Exhibit 23-k

Page 89, 90, 91 and 92 at point 5.18, 5.29 and 5.32 of the 13th April 1994 AUSTEL COT Cases Report see Exhibit 51 states:

“…Mr Smith was the first of the original COT Cases to reach an initial ‘settlement with Telecom. It is understood that he: identified the type of faults which his business had experienced. Mr Smith has informed AUSTEL that his major concern and stipulated condition at the time of ‘settlement’ was that his service should operate, and continue to operate, at normal standards”.

“The fifth of the original COT Cases, Mr Schorer, had particular concerns about Telecom’s limited liability and the impact that the limitations was likely to have on any claim he might make for compensation arising from an inadequate telephone service.  

“The fact that faults continued to impact upon the businesses in the period following the settlement shows a weakness in the procedures employed. That is a standard of service should have been established and signed off  by each party. It is a necessary procedure of which all parties are now fully conscious and is dealt with elsewhere in this report. Its omission as far as the initial ‘settlement’ of the original COT Cases  were concerned meant that there was continued dissatisfaction with the service provided without any steps being taken to rectify it. This inevitably led to a dissatisfaction with the initial ‘settlement’ and to further demands for compensation. To avoid this sort of problem in the future, AUSTEL is, in consultation with Telecom, developing –

  • a standard of service against which telecom’s performance may be effectively measured;

  • a relevant service quality verification test.” Exhibit 51

On 27th April 1994, Telstra’s Steve Black wrote to Robin Davey Chairman of AUSTEL noting:

“Attached for your information, an updated draft of the standard Verification Test for use in the Telecom’s Public Switched Telephone Network. Once agreement has been reached of these Verification Tests, Telecom will be in a position to commence the testing of the services associated with COT customers, and ensure they meet the agreed requirements for a satisfactory service.”  Exhibit 52

AUSTEL: July 1994: Service Verification Test

“These tests are important for Telecom to be able to provide objective data about the end-to-end performance of its network in regard to the service of an individual customer on the date the test are conducted.

In its briefing, Telecom indicated (and we will seek confirmation and further detail in writing) that if the SVT indicates an unacceptable level of service then the required replacement of network equipment will be undertaken to bring that service to an acceptable standard,” See Exhibit 53 below.






23 Sep 92

Page 84 from the final April 1994 AUSTEL COT Cases Report notes at point 5.6 that:

“Given the extent of testing and monitoring which had taken place and Telecom’s failure to identify the cause of the faults over a period of years, AUSTEL supported the original COT Cases in their stance.” Point 5.7 notes: “Argument on the general theme continued. By letter dated 23 September 1992, Telecom’s Group Managing Director, Commercial and Consumer, informed Mr Schorer as spokesperson for the original COT Cases

“The key problem is that discussion on possible settlement cannot proceed until the reported faults are positively identified and the performance of your members’ services is agreed to be normal. As I explained at our meeting, we cannot move to settlement discussions or arbitration while we are unable to identify faults which are affecting these services. At this point I have no evidence that any of the exchanges to which your members are attached are the cause of problems outside normal performance standards. Until we have an understanding of these continuing and possibly unique faults, we have no basis for negotiation settlement.” see Exhibit 1-a (which is documented as E1-a), and Exhibit 2 as E2 and so on.

E1-b dated 29th October 1993 discusses the facsimile problems being experienced on Alan Smith’s designated facsimile service noting:

“During testing the Mitsubishi fax machine, some alarming patterns of behaviour were noted, these affected both transmission and reception. Even on calls that were not tampered with the fax machine displayed signs of locking up and behaving in a manner not in accordance with the relevant CCITT Group 3 fax rules.”

When E1-b is read in conjunction with exhibits E49-b, E40-d, E49-e and E50-m (see below), the word collusion fits the criteria.  E50-m is a letter dated 28th January 2003 from Gillian McKenzie TIO Investigator to Telstra, concerning the telephone/facsimile problems being experienced by the new owners of Alan’s business Darren and Jenny Lewis. In this letter Ms Mc Kenzie notes:

  • “Mr & Mrs Lewis claim in their correspondence attached that they purchased the Cape Bridgewater Coastal Camp in December 2001, but since that time have experienced a number of issues in relation to their telephone service, many which remain unresolved;
  • That the phone problems have decreased dramatically since Telstra Corporation rewired the business on 9 December 2002and disconnected the phone alarm bell, however he is still experiencing problems with receiving calls, and continued to have problems with his fax line.”

Alan Smith can provide documented proof that public servants in the office of Senator Richard Alston, when he was Minister for Communications, actually directly contacted Mr John Pinnock, the TIO, and Telstra, to ask how they (the Senator’s staff) should respond to Alan’s complaints to the Minister regarding the ongoing telephone faults.  Between 1996 and 2004, however, the only advice Alan ever received from the Minister’s office on these unaddressed telephone and facsimile problems was that:

“The issue raised in your letter are receiving attention and the Minister will be respond to shortly or “These are appropriately matters for the TIO or, “…I would, therefore, ask that you refrain from providing any further material until the Telecommunication Industry Ombudsman has provided advice on the material you have supplied to date.” 

It is interesting to note that, at the same time as Alan was receiving these letters, the Assistant Secretary, Networks Policy Branch of Senator Alston’s office was Mr Chris Chear, (ex Telstra employee) who is now a member of the Board of the ACMA, and Senator Alston’s Chief Advisor was Mr David Quilty, who is now a very senior executive with Telstra.  Then, when it finally seemed that these matters would be investigated in February 2006, by Senator Helen Coonan’s assessment process, the Minister’s office emailed the TIO, John Pinnock (on 18th January 2006) and Mr Quilty (on 3rd March 2006) asking how to address these issues.  The following information indicates that responses to these emails would have been negative.  ‘Incestuous’ seems to be the only word that describes this group of people who all have a vested interest in protecting Telstra at all costs.


20 Dec 93

Four weeks after Graham Schorer and Alan Smith had signed the Fast Track Settlement proposal on 23rd November 1993 Telstra was concerned that some of the exchanges that serviced the COT Cases would not meet the regulatory required conditions contained in their telecommunication licence see E2 Telstra internal email (FOI document folio A00354) notes:

“I understand there is a new tariff filing to be lodged today with new performance parameters one of which commits to 98% call completion at the individual customer level. Given my experience with customer disputes and the recent BCI study, this is a cause for concern. We will not meet this figure in many exchanges around Australia particularly in country areas.

As shown below in a further Telstra internal email FOI folio R04205 see the then acting Chairman of AUSTEL Bob Horton ex-Telstra employee allowed Telstra to minimise their mandatory parameters testing see E37-d which also notes:

“The powers to set mandatory performance standards that AUSTEL has been given could well be used in some sort of regulatory outcome from AUSTEL’s current COT case investigation.” 

It has clearly been shown below that regardless of AUSTEL warning Telstra’s on 11th October and 16th November 1994 that their Service Verification Testing did not meet the required regulatory outcome Telstra still submitted (under oath in a sworn statements) to the COT arbitrator that Telstra achieved a success rate of 99.8% even though NO SVT (incoming test calls) were generated to the business which was under investigation by the arbitrator see E23- e, E23-f and E23-g below.


18 Jan 94

Dr Hughes (arbitrator) advises Graham Schorer that the TIO has provided him with a document called “Telstra Corporation Limited – Fast Track Proposed Rules of Arbitration.”E3-a

On 3rd February 1994 Dr Hughes writes to Graham Schorer, enclosing a copy of the “Fast Track Arbitration Procedure” in which Dr Hughes alleges was drafted in consultation with Minter Ellison. E3-b

PLEASE NOTE: any document researcher of credibility will conclude that the arbitration agreement referred to by Dr Hughes was originally drafted by the Telstra Corporation.


3 to 17

Feb 94

On 24th October 1998, the then TIO John Pinnock provided Ms Pauline Moore, Secretary Senate Environment, Recreation, Communication and the Arts Legislation Committee (under Confidentiality) Telstra’s Proposed Rules of Arbitration. E4-a. This document except for cosmetic changes mirrors the agreement that Dr Hughes provided to Graham Schorer see above at E3-b.

In this file note E4-b William Hunt the legal advisor to Graham and Alan states:

“Pinnock will not make available the first draft of the fast track arbitration procedure sent early 1994 by the ten TIO to Bartlett of Minter Ellison. Telstra has refused to make the first draft available under FOI. Schorer says Pinnock has a copy and made it available to the Senate on a confidential basis.”

These two exhibits E4-a and E4-b, should be read in conjunction with Alan’s Smith’s letter to Ms Deirdre O’Donnell (TIO) dated 28th September 2009 see E58-a below.


17 Feb 94

Page 3, of the minutes from the pre-arbitration meeting confirms Dr Hughes made a commitment to Graham Schorer as spokesperson for COT, that if the COT four claimants went into the arbitration process FTAP: “…that as arbitrator, he would not make a determination on incomplete information”. In the case of Alan Smith Dr Hughes did make a determination on incomplete information.  E5-a


21 Feb 94

Graham Schorer is provided with a document by Dr Hughes, confirming there still had been no change to clause 10.2.2 of the Fast Track Arbitration Agreement. E6

At clause 24 in this document Dr Hughes notes:

“The Special Counsel and members of the Resource Unit seek an exclusion from liability for any act or omission, to the same as the arbitrator. Recommendation: agreed.”

Immediately below see E7, Telstra disagrees with this recommendation. Both Graham Schorer and Alan Smith are adamant that had they known Dr Hughes would secretly allow this amendment they would never have signed the agreement.  


23 Feb 94

This letter from Mr Black to Dr Hughes, referring to the above fax sent from Mr Black to Dr Hughes on 21st February 1994.  The letter also documents changes to the FTAP but makes no comment on the removal of the words ‘… each of the Claimants claims” from clause 10.2.2. Graham and Alan were not advised that clause 10.2. 2 had been altered.

Please note Steve Black states on page 3 of this letter:

“…Telecom is of the view that Special Counsel and the Resource Unit should be accountable for any negligence on their part in relation to the arbitration process, given that these parties are acting in their capacity as experts. Therefore, this clause should not be amended so as to include an exclusion from liability for Special Counsel and the Resource Unit.” E-7a

ItIt is most important to note that Graham and Alan believed that the Special Counsel, Ferrier Hodgson Corporate Advisory, and DMR Group Australia would be made accountable for any negligence on their part in relation to the arbitration process. It is also confirmed for the dates of 19th April 1994, (see below) that Dr Hughes’ Secretary was still of the opinion that the Special Counsel, and the Resource Unit would not be excluded from liability.

Telstra’s internal email FOI document folio D01166 dated 3rd March 1994 from Steve Black to David Krasnostein, of Telstra’s Legal Directorate, advises that, if Telstra was to walk away from the COT negotiations it could lead to a Senate enquiry.  Mr Black notes: “My course therefore is to force Gordon Hughes to rule on our preferred rules of arbitration.”E7-b This document is relevant to E-7a because exhibit 7-a (i.e. Telstra’s rules of arbitration stated that the Special Counsel, and the Resource Unit would not be excluded from liability. The same agreement that Telstra’s Steve Black was trying to force Dr Hughes to sign.


22 Mar 94 

Dr Hughes, Steve Black, Simon Chalmers Telstra Lawyer David Krasnostein, Peter Bartlett Warwick Smith and Jenny Henright TIO Secretary meet in private to discuss the FTAP process. Please note: there was no member of COT present at this meeting. Telstra’s minutes from this meeting confirms their understanding that Warwick Smith stated (“that he would not endorse the rules as fair unless clause 10.2.2 repeated clause 2(f) of the Fast Track Settlement Proposal”. The words “each of the Claimants claims” was removed see point   below from the original copied FTAP rules given to Graham see point 8 above, which then in return didn’t also repeat clause 2(f) of the FTSP E8-a

  1. When was the wording “each of the Claimants claims” removed from the FTAP rules which we signed 21st April 1994 see point 10 below, believing them to be the same FTAP rules we first agreed to 21st February and 17 March 1994 see point 6 & 9 above?
  2. When was Warwick Smith, advised of the removal of the wording “each of the Claimants claims” from the FTAP rules which in return rendered the agreement different to the rules he would not have endorsed had he been aware of these changes?
  3. Has Warwick Smith ever been advised of this removal?
  4. Is an arbitrator allowed to meet with the defendants and their lawyers without the claimants being present?
  5. Where are the arbitrator’s own minutes from this meeting?
  6. Why didn’t the COT Claimants receive a copy from the arbitrator?


22 Mar 94

This is a letter dated 22nd March 1994, which Peter Bartlett faxed, with attachments, to Graham.  This letter, headed Fast Track Settlement Proposal notes:

“Attached are the comments on the Telecom draft I delivered to Gordon Hughes on Friday 18 March.  Clearly a number of amendments suggested by Telecom are unacceptable.  If Gordon can receive your comments on the Telecom draft, he can form an opinion as to what, in his view, is fair and reasonable.”E8-b

On page 8 of this letter however Mr Bartlett does refer to clauses 24, 25 and 26 as still being under discussion, but makes no mention of any changes whatsoever.

When Dr Hughes wrote to Graham on 31st March 1994 (see E9-a below), nine days after Mr Bartlett, he simply noted:

“I am enclosing the latest draft of the Fast Track Arbitration Procedure which has been forwarded to me today by Messrs Minter Ellison Morris Fletcher…”

He does not make any reference to changes in clauses 24, 25 and 26, as can be seen from that document all three clauses were still intact, although the wording: “each of the Claimants claims’ from clause 10.2.2 had been removed without advising the COT Cases, Graham and Alan missed did not notice that 10.2.2 had been altered.

To summarise: 

  1. Peter Bartlett writes to Graham on 22nd March 1994, suggesting that clauses 24, 25 and 26 need further discussion.
  2. Dr Hughes writes to Graham on 31st March 1994, attaching the agreement, without any mention of any alterations to clauses 24, 25 and 26, or that the wording “each of the Claimants claims” in clause 10.2.2 had been removed.
  3. Peter Bartlett writes to Ann Garms, attaching the same FTAP agreement that Dr Hughes had sent to Graham, still with no mention of any alterations to clauses 24, 25 and 26, and 10.2.2
  4. Dr Hughes’ secretary, Caroline Friend, faxes to William Hunt and Alan Goldberg the same FTAP agreement that Dr Hughes sent to Graham and Peter Bartlett sent to Ann Garms, again with no mention of any changes to clauses 24, 25, 26 and 10.2.2.
  5. We have previously established that William Hunt used the agreement that was faxed to him by Caroline Friend in discussion with Minter Ellison on 20th April 1994 (the day after he received it) and that there is no record of either Ann Garms, Graham or Alan agreeing to the removal of, or alterations to, clauses 24, 25, 26 and 10.2.2. 
  6. The changes that were done secretly, without the claimants’ knowledge or consent, appear to have been done with the full knowledge of those who benefited from these deletions, Ferrier Hodgson Corporate Advisory and the Special Council, Minter Ellison.
  7. This cover fax sheet dated 22nd June 1994 from the TIO office to AUSTEL see E8-c proves that the $250,000.00 liability clause which had been secretly removed from both Graham and Alan’s arbitration agreements see point 1 to 6 above, was then re-inserted into this document (the arbitration agreements) for the following twelve COT claimants.
  8. These three letters, all dated 29th December 2008 see E8-d, confirm that Dr Hughes (the COT arbitrator), Peter Bartlett (Legal Counsel for the COT arbitrations), and Chris Chapman (Chairman of ACMA) were all told about the secret alterations that had been made to the arbitration agreement, but none of the claimants were given that same information.  Mr Chapman has still not explained why the Government Regulator allowed the liability clause to be removed from Graham and Alan’s agreements but re-inserted for the other COT claimants, thereby discriminating against Graham and Alan.  It does seem, however, that this discrimination is connected in some way to AUSTEL’s other acts of discrimination and bias, including the SVT issues discussed below, further supporting our claim that there is a need for an investigation into why the Regulator and some of their employees have been afraid to speak out regarding COT arbitration issues.

Points 7 and 8 above, should be assessed in relation to other information (see below), which shows that AUSTEL did not protect the rights of the COT claimants during the AUSTEL-facilitated arbitration process.

Exhibit 8-c above, which includes a letter to Peter Bartlett, refers to clause 11.2 on page six of the Special Rules of Arbitration for the second group of twelve COT claimants, proving that AUSTEL, Peter Bartlett and the TIO all knew that the $250,000.00 liability cap on claims against the TIO-appointed resource unit had been re-inserted into the agreement for the twelve COT claimants AND knew that the same liability clauses had been secretly removed from the agreement used for Graham Scherer and Alan Smith’s arbitration, to their severe determent.


31 Mar 94

Dr Hughes faxes both Graham Schorer the latest draft of the FTAP agreement E9

PLEASE NOTE: the wording “Each of the Claimants claims” has been removed from clause 10.2.2 on the attached page 8, but clauses 24, 25 and 26 are still intact on the attached page 12. The COT Claimants were not advised of these changes.


7 Apr 94

Mr Black’s letter to David Krasnostein : ”I have told Mr Bartlett that the only basis on which Telecom would attend a meeting is to formally sign the rules – no further discussion or negotiation to be entered into, …” suggests that perhaps Bartlett had expressed a view that the FTAP rules were not fair. 10-a


Please note: The AUSTEL COT Report referred to in this memo by Mr Black, was soon to become a public document. Alan Smith and Graham Schorer can only assume that the reason Telstra was “seriously” objecting to Dr Hughes seeing this report is that it refers only that the COT four were to be assessed under the AUSTEL facilitated ‘Fast Track Settlement Proposal’, with the other COT type complainants to be implemented into the yet to be devised ‘Special TIO Arbitration Agreement’. E10-a


12 Apr 94

Dr Hughes writes to Peter Bartlett noting:

“…Further in relation to clauses 25 and 26, both Ferrier Hodgson Corporate Advisory and DMR Inc are concerned about their potential liability. As the clauses presently read, they would be liable to a maximum of $250.000.00 per claim. This is likely to significantly exceed their professional fees in relation to each claim. Ferrier Hodgson’s preferred (and also the preference of DMR) would be a total exclusion of liability but, failing that, they would accept a lower cap more commensurate with their anticipated fees.

I appreciate that one claimant has already executed the agreement in its current form. The others will no doubt be pressed to do likewise over the next few days. I further appreciate you will be reluctant to introduce additional changes to the draft procedure at this delicate stage of negotiations but it of course fundamental that account be taken of the concerns raised by members of the Resource Unit. Perhaps the agreement should be executed in the current form and then agreement sought from the parties to vary the terms to take into account any proposals by Ferrier Hodgson or DMR which you agree are reasonable.”

PLEASE NOTE: There is no reference in this letter regarding the concerns or the rights of the claimants. E11


13 Apr 94

Page 12 of this copy of the Fast Track Arbitration Procedure agreement shows clauses 24, 25, and 26 firmly intact, was faxed from Peter Bartlett of Minter Ellison to Ann Garms (COT Case) the day after Dr Hughes letter see E11 – Please note: Mr Bartlett made NO reference in the covering facsimile to Ms Garms that this copy of the FTAP agreement was only a draft and that clauses 24, 25 and 26 would be removed before she signed the agreement. E12


19 Apr 94

When Caroline Friend, Dr Hughes’ secretary, faxed a copy of the arbitration agreement to William Hunt and Mr Goldberg, Ms Friend noted, on the fax cover sheets: “Further to my telephone discussion with Mr Graham Schorer of today’s date, at his request, I attach for your attention, a copy of the “Fast Track” Arbitration Procedure of 31st March 1994” see E9. It has now been established that, after these faxes had been sent, someone removed clauses 25 and 26 from the version of the document including altering clause 24 that was later presented to Graham Schorer and Alan Smith, without notifying Mr Hunt, Mr Goldberg, Graham or Alan of those alterations when they signed the agreement on 21st April 1994.

On the 19th and on the 20th April 1994, in the mid-afternoon of each day, Graham Schorer and Alan Smith discussed with William Hunt whether or not Graham and Alan should sign the FTAP.  Mr Hunt provides the copy of the agreement that he had received, via fax, from Ms Friend on 19th April 1994 (see point 9, above).  Graham was adamant that he did not want to sign the agreement because it was too legalistic and did not mirror the original FTSP agreement, but Mr Hunt suggested that it was probably the best they could hope for under the then-present circumstances.  Alan remembers that Mr Hunt also noted that, if they didn’t sign the agreement then, the process would be delayed even more than it had already been delayed and ‘who knows where you might end up’.  Alan and Graham believe strongly that, if Mr Hunt had known that clauses 25 and 26 were to be secretly removed including the alterations to clause 24, without their knowledge or consent, and that removal would relieve FHCA, DMR (Australia) and the TIO’s Special Counsel of any liability for negligence, conscious or otherwise, Mr Hunt would never have advised that Graham and Alan should sign the agreement.  They also believe that Mr Goldberg would have strongly gone against Graham and Alan signing the agreement had he known it was to be secretly altered after he had provided legal advice on it, before the agreement was presented to Graham and Alan for their signatures. E13


21 Apr 94

Graham Schorer and Alan Smith abandon the already-signed Commercial Assessment FTSP and accept that the Fast Track Arbitration Agreement they were about to sign was the same agreement they had been shown on 31st March, 13th April and 19th April 1994.

Why didn’t the TIO Special Counsel, the TIO, and/or the arbitrator advise Graham Schorer of Alan Smith to the alterations to clause 24, and the removal of clauses 25 and 26, when they signed the arbitration agreement? E14

It is clear from E13 above when compared to E14 that clauses 25 and 26 are missing and clause 24 has been changed.


25 May 94

Graham Schorer writes to Dr Hughes noting: “…Due to circumstances and events beyond the direct and/or indirect control of Graham Schorer plus other related claimants, companies etc, I am formally applying for an extension of time on behalf of Graham Schorer, plus other related claimants, companies etc, pursuant to clause 7.1 in the Fast Track Arbitration Procedure etc etc. The reason for this request are as follows:-

“…A substantial burglary in Golden’s premises on the 4 March, 1994 and the theft of vital   equipment and records.

One of two word processors with its laser printer and back up disks containing Golden’s sales quotas, customer agreements, facsimiles and all the correspondence facsimiles and most of the documentation relating to telephone service difficulties, problems and faults in relating to Graham’s present claim.”


On  On the 4th March 1994, approximately one and a half hours after Golden

      Messenger’s burglary E15, another COT claimants business, Dawson Pest Control, was also burgled. Mr Dawson later remarked that he found strange that the burglars only stole business records and Telstra related information. On the 11th October 1994, during Alan Smith’s (taped) arbitration oral hearing he informed the arbitrator that the Cape Bridgewater Holiday Camp booking information and banking statements  disappeared from his office. Telstra FOI documents provided to the Australian Federal Police in 1994, by Alan, confirmed that Telstra was able to document the dates when Alan would be in Melbourne, (away from his business), in one instance Telstra documented an intended Melbourne trip weeks before the intended trip.


10 Jun 94

AUSTEL’s John MacMahon writes to Steve Black stating: “…AUSTEL is continuing to receive complaints as to the quality of service from a number of the COT Cases

Mr Smith at Cape Bridgewater continues to express concern about the ability to receive and send facsimiles.

Mr Schorer at North Melbourne continues to claim that customers are reporting an inability to make a successful phone call to his business.


In the ‘Implementation of the Recommendations of the COT Cases Report’ the report states, on page 21:  “AUSTEL notes that DNF (Difficult Network Fault) customers have characteristically reported recurring faults over extended periods of time.”  

In regards to the adequacy of the telephone service provided to Alan Smith and Graham Schorer by Telstra, it is apparent from the enclosed information (see above and below), that the service was less than adequate. 


11 Jul 94

Telstra’s Steve Black writes to Warwick Smith (TIO) stating: “…Telecom will also make available to the arbitrator a summarised list of information which is available, some of which may be relevant to the arbitration. This information will be available for the resource unit to peruse. If the resource unit forms the view that this information should be provided to the arbitrator, then Telecom would accede to this request.”

The statement in Mr Black’s letter: “… if the resource unit forms the view that this information should be provided to the arbitrator,” confirms that both Warwick Smith and Mr Black, are fully aware that the TIO-appointed Resource Unit Ferrier Hodgson Corporate Advisory (FHCA) had also been secretly assigned to vet most if not all the arbitration procedural documents on route to Dr Hughes. In other words, if FHCA decided that a particular document was not relevant to the arbitration process, it would not be passed on to Dr Hughes, or the other parties E17-a

On page 5 of the Commercial Arbitration Act 1984, under Part 11 – Appointment of Arbitrators and Umpires it clearly states: (6) Presumption of single arbitrator

“…An arbitration agreement shall be taken to provide for the appointment of a single arbitrator unless –

(a)          the agreement otherwise provides; or

(b)          the parties otherwise agree in writing.

The Fast Track Arbitration Procedure FTAP (Agreement) signed by Graham and Alan, 21st April 1994, mentions only one arbitrator. There is likewise no written agreement in existence seen by Alan or Graham that allows a second arbitrator to determine what information the first arbitrator will see E17-b

E17-d and 17-e confirm Grant Campbell was working for the TIO at the time Alan Smith was submitting claim material of ongoing telephone and facsimile problems to the TIO office. E17-f is one of many TIO and Telstra documents that confirm that Grant Campbell was also working for (Telstra) the defendants in Alan’s arbitration.

In Alan’s letter dated 9th September 2010 to Clair O’Reilly, Senior Lawyer for the ACMA E60 Alan provided the following information under the heading Collusion:

“…During the TIO-administered COT arbitrations the TIO seconded a Telstra employee, Grant Campbell, to run the TIO’s fault-handling division.  During my settlement process, Mr Campbell even signed letters to Telstra on behalf of the TIO (then Warwick Smith), letters directly related to my Fast Track Settlement Proposal (FTSP).  Some of the letters that Mr Campbell signed advised Telstra that certain fault issues were not part of my arbitration even though they had already been included in my interim Statement of Claim.  Interestingly, this part of my claim vanished during my arbitration and was never sighted again.  Copies of these letters can be provided.  This is the same Grant Campbell who is missing from the staff list in the TIO’s annual report of 1993/94 and is not included in a photo of TIO employees that year – probably because he was not being paid by the TIO but by Telstra – the defendants of my claims.  This is also the same Grant Campbell who dealt with my claims of ongoing lock-up/billing fax and 008/1800 problems during the early part of my arbitration but then jumped ship and joined Telstra’s Customer Response Unit, which is the division of Telstra that he had previously written to while wearing his TIO hat, about what he said were not problems associated with my FTSP.  Then Mr Campbell began to work on addressing the same 008/1800 faults (the same ones I had raised with him when I believed he was employed by the TIO) on behalf of Telstra in relation to another COT complainant.


12 Jul 94

12th  Telstra’s Paul Rumble writes to Graham Schorer noting: “…I confirm my understanding that you wished to make an informed decision as to which documents were required and that you might take a few days in order to make an informed decision etc etc.” E18


9 Aug 94

Graham Schorer’s letter to Dr Hughes, arbitrator states: “…I am writing to you to confirm what progress has been made to date regarding documents being received under three different FOI applications. Documents relating to Graham Schorer and Golden FOI applications, consist of many duplicate copies and does not represent all of the documents applied for under the two F.O.I. applications, being 24 November 1993 and 21 April 1994. E19


9 Aug 94

Graham Schorer writes to Dr Hughes:  “I have enclosed a facsimile from Telecom, received at my premises on 26 July 1994, at 11.41 pm.  This facsimile states that Telecom has forwarded all of the documents that fall within my FOI application to the T.I.O. for forwarding to the Arbitrator.

Would the Arbitrator please advise in writing as to what date the documents were delivered to the Arbitrator’s premises.  Also please advise myself as to what arrangements that I need to comply with for the viewing of the same documents.” E20

Graham and Alan suspected then that the TIO-appointed Resource Unit was vetting documents. E17 above confirms their suspicions were on target.


11 Aug 94

Dr Hughes writes to Graham Schorer noting:

“…I acknowledge receipt of your facsimile dated 9 August 1994. No documents of the nature which you describe have been delivered to me. I do not wish to become directly (or indirectly) involved in your FOI application. At the time I cannot ignore the fact that your FOI application is relevant, or may be relevant, to the proper submission of your claim.” E21

What E19, E20 and E21 show is like Alan Smith, Graham Schorer did not receive the relevant documents from Telstra to enable Graham to submit a proper complete claim.



7 Sep 94

Dr Hughes writes to Graham Schorer noting:

“…It was never my intention that the submission of your claim be deferred indefinitely pending completion of your FOI claim. I have sought to avoid the costs and inefficiencies involved in a substantial amendment to your claim in the event that a significant amount of material becomes available after the claim is formally submitted.” E22-a

E22-b Alan Smith’s letter dated 18th September 1994 to John Wynack, Investigating Officer for the Commonwealth Ombudsman notes:

“Mr Wynack, I stress the urgent need for you to intervene on my behalf and enforce my FOI application, to demand that Telecom supply this Bell Canada Raw data to Dr Gordon Hughes under my FOI request and not through the Arbitration Procedure.”

This strange request by Alan was born from his belief that the arbitrator might to be receiving all relevant information Alan was sending him. 

PLEASE NOTE: Alan did not receive E17-a (see above) until May 1999. This letter dated 11th July 1994 from Telstra to Warwick Smith (TIO) confirms what Alan had suspected for some time that his claim material was not reaching its intended destination. This letter shows that the TIO Resource Unit Ferrier Hodgson Corporate Advisory (FHCA) had secretly been assigned by the TIO to vet what documents the arbitrator would receive and what would be discarded.

Alan can provide evidence confirming that on 2nd August 1996 (Fifteen Months) after his arbitration was deliberated on by Dr Hughes (arbitrator) FHCA advised Dr Hughes that they did withhold relevant documents from being addressed during Alan’s arbitration. This FHCA letter was also copied to the TIO office. Even though Alan has raised this letter with the TIO since it was received by in 2001, the TIO has refused to address this issue or the secret vetting of documents by FHCA.


29 Sep 94

Exhibit 23-a are two Telstra CCAS data records for the Service Verification Tests conducted at Alan Smith’s business 29th September 1994, confirms Telstra only tested calls going out of Alan Smith’s business and NOT the required regulatory outgoing SVT tests calls.

E23-b- Alan Smith writes to Ted Benjamin, copied to Dr Hughes, AUSTEL and Warwick Smith, confirming Alan’s concerns regarding Peter Gamble’s lack of professional integrity when conducting the SVT testing at the Cape Bridgewater Holiday Camp 29th September, 1994 see point 6 Above.

E23-c Alan Smith’s second letter to Ted Benjamin again discusses Alan’s concerns about the SVT-testing (see E23 b, above) and notes that Alan and his partner would send separate statutory declarations regarding the inappropriate conduct of the SV test process.

E23-d Ted Benjamin Responds to Alan Smith’s letter of the 10th October 1994, in the usual Telstra manner denying Mr Smiths claims.

E23-e AUSTEL’s letter to Peter Gamble confirming Telstra’s SVT (testing) process did NOT meet the regulatory SVT standards agreed to.

E23-f This letter from AUSTEL to Telstra’s Steve Black (copied to Peter Gamble) confirms Telstra’s SVT testing at Alan Smith’s holiday camp did not meet the regulatory standards.

E23-g This witness statement dated 12th December 1994 by Peter Gamble on behalf of Telstra’s arbitration defence of Alan Smith’s claim states the SVT process had met all the regulatory requirements when Peter Gamble knew this had NEVER been the case.

E23-h This statutory declaration by Telstra’s Steve Black dated 12th December 1994, states from his perusal of Telstra’s defence reports (which included the SVT process) were correct in all accounts. This statement was made regardless of Mr Black being aware the Cape Bridgewater SVT process had been deficient.    

E23-i Page 4 from Telstra’s Briefing report regarding Telstra’s defence notes:

“Telecom tests are recognised by AUSTEL as an appropriate measure of service performance. Tests undertaken on the Cape Bridgewater Holiday Camp (CBHC) service were successful on all lines.”

Please note: this is the report that Steve Black noted in his statutory declaration that:

“I have reviewed the Report and I am informed be each authors that the Report accurately states the facts stated in the Report.”

This is the same Steve Black who was alerted by AUSTEL on 16th November 1994 (one month previous) that the Cape Bridgewater Holiday Camp (tests) were deficient.


22 Nov 94

Telstra’s Peter Gamble writes to Graham Schorer noting:

“…An opportunity has become available for Telecom to carry out some specialised testing using a new piece of equipment which has only just become available. I am proposing that we use this equipment to carry out some tests on both your PSTN and ISDN services. The second unit will be moved between a number of locations which have been selected by taking note of your previous comments on locations where callers have been reported difficulties in contacting your business. The tests will be conducted by Wayne Parker and Jeff Thompson of Bell Canada International, who will also tabulate the results. The BCI staff will be assisted by two of my staff members, Mr Bruno Tonizzo and Colin Roberts E24-a.  

E 24-b, two of these Telstra SVT technicians Mr Bruno Tonizzo and Collin  Roberts mentioned in this document were the same technicians that had been present during the deficient SVT process at Alan’s premises on the 29th September 1994, i.e. Mr Bruno Tonizzo and Colin Robert’s along with Peter Gamble. See page 1 (Smith Case) and Peter Gambles witness statement dated 12th December 1994. Should Telstra have been using the same Telstra technical staff during the pending Golden Messenger SVT process which abandoned the deficient Cape Bridgewater Holiday Camp SVT (tests)? Again, here is further information in support of Graham’s valid reason for demanding Telstra had to connect service lines to call identification to his incoming service lines on the days that Telstra performed their SVT test calls.

E24-c  page 198 from the AUSTEL COT Cases Report, also supports Graham Schorer had valid reason for demanding call line identification when they state that:

8.79. “…Telecom’s conduct has been less than that which might be expected of a model corporate citizen –

    • in insisting on strict proof of a causal link between faults and their effect on a business when its own records are deficient in recording faults.”

8.80.   AUSTEL recommends that –

    • Telecom’s advice to its customers experiencing difficult network faults on the outcome of its monitoring/testing should state the limitations of its monitoring/testing regime.

Telstra certainly didn’t advise Alan Smith and the arbitrator Dr Hughes, about the limitations in their SVT monitoring/testing regime performed on Alan’s services during his arbitration.


On pages 3 and 10 in the Michael Rumsewicz report to AUSTEL dated 15th November 1994 when referring the SVT process E28 he notes:

“Customer calling profiles (which provide the basis of the Service Verification Tests test calling pattern) would be more accurate determined through the use, for instance of Telelec / CCS7 equipment.”

The Telelec / CCS7 equipment was supposed to have been used by Bell Canada International (BCI) when they performed their testing to the exchanges that Graham and Alan Smith’s  businesses was connected to. In the case of Alan Smith’s exchange the Telelec / CCS7 equipment couldn’t be used due to the type of exchange at Cape Bridgewater. Yet Telstra still maintain that the BCI Cape Bridgewater report is correct even though the report states that Telelec / CCS7 equipment was used. Mr Rumsewicz report supports proves just how important it was for Graham Schorer to have the right to demand that Telstra connect some type of call line monitoring equipment to his service lines when Telstra performed the SVT process.  


28 Nov 94

Exhibit 25-a Peter Gamble writes to AUSTEL’s Norm O’Doherty, General Manager Consumer Affairs, in response to AUSTEL’s previous letter on 16th November 1994 in which they questioned the deficiencies in the SVT process at the Cape Bridgewater Holiday Camp. However, this letter appears to be providing SVT information to AUSTEL, without ever having performed a second set of tests at the Cape Bridgewater Holiday Camp regardless of  the tests being deficient i.e:- 

“…Norm, As agreed at one of our meetings and as confirmed in your letter of 16th November 1994, attached please find the detailed call Delivery Test information for the following customers.

·         Bova – Ralphies Pizza, Mordialoc, Vic

·         Love – Loveys Restaurant, Dixons Creek, Vic

·         Main – Glen Waters Fish Farm, Glenburn Vic

·         Smith – Cape Bridgewater Holiday Camp, Vic

·         Turner – Gourmet Revolution, Moorabbin, Vic

·         Trzcionka – Trzcionka Hairdressing, Glenelg SA

This information is supplied to Austel on a strict Telecom-in-confidence basis for use in their Service Verification Test Review only and not for any other purpose. The information is not to be disclosed to any third party without the prior written consent of Telecom.

The detailed results of the Call Delivery Tests should be read in conjunction with the individual Service Verification Test Reports, which will provide further information on the origins and destinations, together with details of the time period to be used for the call analysis.”

You are already aware, the equipment which carries out the SVT Call Delivery Tests is able to hold the call for the required 120 seconds (as shown on the results sheets), but is unable to confirm that the call has been held past 40 seconds.”

Amazingly, it was only six months previous before AUSTEL received this advice from Peter Gamble on 28th November E25-a, about the deficiencies associated with Telstra’s SVT Call Line monitoring equipment, AUSTEL commented at point 8.80 in their April 1994 COT Cases Report that:    

AUSTEL recommends that –

    • Telecom’s advice to its customers experiencing difficult network faults on the outcome of its monitoring/testing should state the limitations of its monitoring/testing regime.

It is also shown in Peter Gamble letter to Graham Schorer on 22nd November 1994 E24-a, in an attempt to entice Graham to enter the SVT process, without ever providing him the same advice that six days earlier AUSTEL’s Norm O’Doherty, General Manager Consumer Affairs, informed Telstra’s Steve Black and Peter Gamble by letter see E23-f that the SVT tests carried out at Alan Smith’s business was deficient.

In other words, Peter Gamble and/or Telstra as the defendants in the COT arbitrations, were only prepared to advise the regulator in secret about the known deficiencies in their SVT monitoring equipment but not the claimants, and we again quote from this letter:

“This information is supplied to Austel on a strict Telecom-in-confidence basis for use in their Service Verification Test Review only and not for any other purpose. The information is not to be disclosed to any third party without the prior written consent of Telecom.”

Are we to assume that once again AUSTEL’s were muzzled because of the Public Service Privacy Act in Section 70 of Australian Crimes Act 1914, which prohibited AUSTEL from disclosing: “to any third party without prior written consent of Telecom” that they were relying on false tests results as arbitration defence material?


13 Dec 94

E26 Peter Gamble writes to AUSTEL’s Norm O’Doherty in relatio to his 16th November letter concerning the deficient SVT tests including only simulating the 1-800-tests calls noting:

“…Thus for both Mr Alan Smith and Mr Garry Dawson, the network equipment utilised for calls to the test 1-800 numbers were the same as that which would have been used for their 008 service.

Further in this letter on page 2 at point 4, Mr Gamble notes:

(4)“…In response to requests from customers for more rigorous end-to-end” testing procedure, a more detailed test specification was developed which aimed to generate 100 test calls to a customer’s service from five or six locations.

Two tests have been carried out using this procedure, one on Mr Colin Turner’s service, and one on Mr John Main’s service. However, there have been three key problem areas identified which apply both to the original demonstration tests and the revised procedure. The first has involved obtaining sufficient staff to carry out the test. Two alternative sources have been tried, but neither can be guaranteed on an ongoing basis, which is why the Test Program has not continued.

(5) “…When the Service Verification Test was originally developed it was understood that the NEAT units could hold a call for 120 seconds. However when detailed test schedules were being prepared it was discovered that while the NEAT system could hold a call for 2 minutes, it could not confirm a call hold time beyond the 45 seconds taken to perform the transmission test.

A proposed software modification to NEAT has been discussed with the supplier who initially offered a modification to be available by November 1994. This feature has now apparently, been delayed indefinitely. To meet the SVT requirement a variety of test call generating systems were investigated, but none was able to hold and confirm a test call for the required 2 minutes. Various modifications were considered and some tests carried out but they were unable to provide reliable results.

Telecom is currently concluding negations for the supply of a new

generation of call generating equipment, for which the ability to hold and confirm a call for 120 seconds is mandatory. Further information will be provided as it comes to hand.”


15 Dec 94

E 27 Graham Schorer writes to Steve Black RE: Proposed Telecom Verification Testing noting:

“…I refer you to our telephone conversation last week regarding this matter and as you recall, my drawing your attention to the Peter Gamble correspondence referring to the statement that there will be further testing conducted by Bell Canada using new American equipment especially designed for such types of testing.

During a more recent telephone conversation regarding many other matters, you informed me that Cliff Mathieson would not be available while the Bell Canada people would be still in Australia. I asked the question of you, why would Bell Canada’s presence in Australia be relevant if Cliff Mathieson, on behalf of Austel, was to conduct the tests.

I have finally managed to make telephone contact with Cliff Mathieson yesterday  

to discuss this matter with him in person and the outcome was as listed below:-

a)      He personally had no difficulty being involved in such testing program;

b)      Telecom would have to formally request of Austel for Cliff      Mathieson’s involvement in such testing; during a telephone conversation between you and I earlier this week, I informed you:-

a)      I had not been able to make contact with Cliff Mathieson;

b)      I was aware that Telecom/Bell Canada International had abandoned tests on Gary Dawson’s telephone service last Friday, 9 December 1994, and the official reason given that this new equipment does not like Australian conditions.

c)      I required in writing from Telecom the results and reason’s for such tests were abandoned.


15 Dec 94

On 15th December 1994, Mr M Rumsewicz submitted a report titled Report on Telecom Australia’s Verification Tests (G.001), which he had prepared on behalf of the Government Regulator, AUSTEL E28.  This report was based entirely on documentation provided by Telstra but still, on pages 3, 10 and 13 E23-i of this report, it shows that Mr Rumsewicz noted his concerns surrounding the SVT process. Therefore, AUSTEL should have notified either the TIO (administrator to the COT arbitrations) or the arbitrator to the concerns Mr Rumsewicz had in regards to the correctness of the SVT data being collected by Telstra. It is quite from the points raised below, that Telstra’s should not have used the results of their Service Verification Tests (SVT) in a legal process (the COT arbitrations) because those results were not conclusive.  E23-a (above) confirms that if the CCAS data regarding Telstra’s SV testing at Alan Smith’s business had been provided to Mr Rumsewicz in regard to even one single incident, then Mr Rumsewicz would have had to come to the conclusion that Telstra had ‘fudged’ the Cape Bridgewater Holiday Camp testing.


The COT arbitrations were facilitated by the Government Regulator then called AUSTEL.  Before the COT arbitrations began AUSTEL had already confirmed in the AUSTEL Cot Cases Report that when previously dealing with COT claimants, Telstra’s conduct had been “…less that which might be expected of a model corporate citizen.” Therefore, AUSTEL should never have allowed Telstra during their arbitration procedure as the defendants (under any circumstances), to provide Dr Rumsewicz with the raw SVT data before it had been scrutinised by either the TIO-appointed technical consultants AUSTEL.

PLEASE NOTE 1: Garry Dawson is another of the COT DNF customers used by Mr Rumsewicz to determine the validity of Telstra’s Service Verification Testing process, yet Ted Benjamin’s letter to Graham Schorer admits see E29-a that Telstra and Bell Canada International had to abandon the SVT process at Garry Dawson’s premises because of equipment failure.

Mr Benjamin’s letter to Graham Schorer, was in response to Graham’s previous letter to Steve Black on 15th December 1994, see E27 above, which notes on page 2 that:

“…I was aware that Telecom/Bell Canada International had abandoned tests on Garry Dawson’s telephone service last Friday, 9 December 1994, and the official reason given was that this new equipment does not like Australian conditions.”

It seems quite clear that the Dawson SVT process, like the SVT process carried out at Alan Smith’s business, was fundamentally flawed.


23 Dec 94

E 29-a Ted Benjamin writes to Graham: RE Proposed Telecom Verification Testing noting:

“…I refer to your letter 15 December (ref 1431) addressed to Mr Black. I note your comments. I advise that Telecom is unable to make comments specifically relating to Gary Dawson’s telephone service. However, in a general sense I can advise that the Bell Canada equipment utilised in the testing was a prototype. Some tests were carried out but, because Bell Canada and Telecom were not satisfied with the performance of the equipment in all respects it was decided not to continue with the tests.

As indicated previously, Telecom wishes to carry out Service Verification Testing on your PSTN and ISDN services. Your co-operation is sought.

We have looked at options as to who is available for the meeting and believe that for technical and historical reasons Mr Gamble is most suitable. He has expertise in Service Verification Testing, and is a highly respected engineer who understands your telephone service.”

This is the same Peter Gamble, Telstra’s highly respected engineer who just 11 days previously on 12th December 1994, swore under oath in Telstra’s arbitration defence that his Cape Bridgewater Service Verification Tests had exceeded the required regulators specifications, aware the SVT equipment used couldn’t facilitate the required in-coming Delivery calls.  


10 Jan 95

E 30-a Graham writes to Steve Black in response to Ted Benjamin’s letter 23rd December 1994, RE: Proposed Telecom Verification Testing – In Response to Golden’s Correspondence Dated 15 December 1994 Ref 1431: It is clear from Graham’s letter he sent a clear message to Telstra, his distrust of Peter Gamble see pages 3 to 7.

In The following Exhibits 30-b, 40-d, 40-e and 40-f (SVT) show that Alan Smith and Graham Schorer had every reason to doubt Telstra’s credibility when it came to monitoring equipment.


E 30-b  Robin Davey, AUSTEL’s Chairman, wrote to Telstra’s Corporate Secretary Jim Holmes, 7th September 1993 RE:COT Case Monitoring Arrangements noting:

“…I have similar concerns about you seeking AUSTEL’s approval of the monitoring equipment so long after we first asked tests to be done. There are concerns by some of the customers Telecom is to monitor about the effectiveness of the monitoring equipment. These concerns have been inspired, at least in part by comments made by Telecom employees to those customers, and of course, the problem experienced by Mr Smith when testing/monitoring equipment caused additional problems for him. The draft list of conditions for installation of monitoring equipment in the customers’ premises only serve to reinforce my view that your letter is an attempt to have “two bob each way” – if the testing does not favour Telecom you have laid a foundation for claiming that it is due to customer interference.”

E 30-c is page 24 from the first AUSTEL COT Cases Report dated July 1994 which notes under Recommendation : 18

Telecom acquire equipment suitable for monitoring the services actually received at a customer’s premises (cf: Coopers & Lybrand Recommendation 10 and Bell Canada International’s Rotary Hunting Group Study Recommendation 8.3.

Exhibit 30-d is page 53 from the December 1993, Bell Canada International Rotary Hunting Group Study Recommendation 8.3 which notes:

“On two occasions during the testing process, test equipment failures were experienced (AMERITEC AMIXT and ELMI Smart-10 which required a re-start of testing activities …and …a further recommendation, is to increase the supply of the more sophisticated trouble shooting test equipment such as the Tekelec CCS 7 equipment.”

This is the same Tekelec CCS7 equipment that E30-e and E30-f see Telstra witness statements by David Stockdale (8th December 1994) and Chris Doody (12th December 1994), confirm cannot be utilised at either the Portland exchange or the unmanned Cape Bridgewater RCM. The following statement made in the BCI Rotary Hunting Group Study Recommendation 8.3 “on two occasions during the testing process test equipment failures were experienced,” should be read in conjunction with Alan’s recollection of similar testing equipment failing while Telstra performed the SVT process at his premises.


AUSTEL noted on page 243 of the COT Cases Report E30-g that:

“AUSTEL has agreed to the study being so limited on the basis that other monitoring it had requested Telecom to undertake on AUSTEL’s behalf should provide AUSEL with the data on the efficacy of the customer access network.”

E30-h shows that, on behalf of Alan Smith, Taits of Warrnambool, Victoria (lawyers), contacted AUSTEL on 29th June 1995 regarding deficiencies in both the NEAT and BCI testing processes.  AUSTEL’s Cliff Mathieson’s response to Taits in his letter of 12th July 1995 see E30-1, noted however that:

“The tests to which you refer were neither arranged nor carried out by AUSTEL.  Questions relating to the conduct of the tests should be referred to those who carried them out or claim to have carried them out.”

Page 243 E30-g of the AUSTEL Report clearly shows that AUSTEL did have some control over the BCI testing, so why did they inform Tait’s differently? 

PLEASE NOTE: The late received ACMA FOI documents by Alan Smith, on 13th January 2009, shows Telstra and AUSTEL were aware at least by 11th October 1994, see also Exhibits 23-e, 23-f, 25-a, 26, and 28 that the SVT testing process should never have been used by Telstra as defence documents during the COT Case arbitrations.


12 May 95

Dr Hughes (arbitrator) writes to Warwick Smith, confirming Dr Hughes’ view that the arbitration agreement rules he had just deliberated in Alan Smith’s claim under had not allowed enough time for: “… the production of documents, obtaining further particulars, and the preparation of technical reports.”  Dr Hughes went further, actually apologising for: “… the brevity…” of his comments and noting that the time frame for the remaining arbitrations which incorporated A Garms, M Gillan and G Schorer would need to be longer than it presently contained in the agreement E31-a

On page 99 in this Senate Estimates Committee Hansard dated 26th September 1997 see E31-b,  John Pinnock (TIO) advised the Committee that:

“Firstly, and perhaps most significantly, the arbitrator had no control over the process, because it was a process conducted entirely outside the ambit of the arbitration procedures.”

On 23rd January 1996 Dr Hughes writes to John Pinnock (TIO) under the heading Institute of Arbitrators – Complaint by Alan Smith noting:

“I enclose copy letters dated 18 and 19 January 1996 from the Institute of Arbitrators Australia. I would like to discuss a number of matters which arise from these letters, including:

(a)   The cost of responding to the allegations;

(b)   The implications to the arbitration procedure if I make a full and frank disclosure of the facts to Mr James.”E31-c

What full and frank disclosure of the facts was Dr Hughes worried about?  


3 Aug 95

Dr Hughes writes to Ted Benjamin, copied to Mr Pinnock, Mr Bartlett and Mr Rundell, noting: I telephoned the claimant on 3 August 1995 in order to determine whether he was now in a position to proceed.” E32


  4 Sep 95

Dr Hughes writes to Graham Schorer, copied to Mr Benjamin, Mr Pinnock, Mr Bartlett and Mr Rundell, stating:

“I refer to our telephone discussion on 3 August last and would be pleased to know if you are yet in a position to indicate whether, and if so when, you intend proceeding with the submission of your claim documentation.” E33


6 Nov 95

Dr Hughes writes to Graham Schorer noting

“…If you anticipate a delay of considerable or indeterminate length, I will give consideration to the question of whether this arbitration should be abandoned,”E34

Dr Hughes makes no mention in his letter E34, that after handing down Alan Smith’s award on 11th May 1995, he wrote to Warwick Smith the day after on 12th May 1995 (see E31-a, above), warning the TIO that the arbitration agreement being used in the A Smith, A Garms, M Gillan and G Schrer arbitrations was not credible document in which to conduct an arbitration.


10 Nov 95

A comparison of pages 17 & 18 from the AUSTEL Quarterly COT Cases Report of 10th November (see E35) shows that whoever prepared the AUSTEL Report misled and deceived the then-Minister for Communications, Michael Lee MP, regarding the SVT process.  For example, on page 17 the AUSTEL Quarterly Report notes: (a) “Telstra has now completed its programme of Service Verification Tests on the sixteen DNF Customers referred to Telstra by AUSTEL, with the exception of three customers who have refused to allow the tests to take place.”  Graham Schorer was one of the three who “… refused to allow the tests to take place” but the report did not record that Graham had, by then, discovered that: (1) The SVT (tests) carried out at Alan Smith’s business were ‘fudged’ when Telstra had to abandon the process and (2) the SVT (tests) at Garry Dawson’s business were also abandoned.

Docment E49-a

Telstra’s own file notes dated 16 January 1998 however, shows this was not the case: (Alan Smith) was still experiencing telephone problems long after the completion of the SVT process, e.g. E49-a (below) shows that, when Telstra visited the Cape Bridgewater Holiday Camp fifty-two months after the SVT process had been carried out, their own records show the technicians noting that it ‘appeared from documents Alan provided’ that the problems he raised during his arbitration had continued to occur after the end of the arbitration.  All this information has been before AUSTEL and the TIO since 1998, forty-seven months after AUSTEL told Minister Lee (on 2nd February 1995) that: “All services on which the SVT was carried out have met or exceeded the SVT requirements.”   


24 Nov 95

This letter from William Hunt, Graham Schorer’s solicitor, to Dr Hughes, states:

“We refer to your letter of 6th November last to our client and subsequent correspondence.  The arbitration proceedings were entered into on a clearly acceptable basis that Telstra would supply required documentation under FOI provisions.  Our client cannot proceed without the relevant information being made available.  Our client is aware of the disastrous state of affairs as to the supply of FOI documents in the recent Smith arbitration wherein documentation was supplied shortly before and after you made your decision; it does not want to be similarly disadvantaged in its own proceedings.” E36


19 Jan 96

When exhibit E37-a is compared with E37-b it is clear that Telstra knew at the time they wrote this letter to Dr Hughes E37-a that: 

“I should note, however, that in the circumstances, Telstra faces great difficulty in attempting to place practical limits on the scope of its searches.  This is due both to the vague nature of Golden Messenger’s claim and the wide scope of your direction, which is broadly analogous to a direction for Telstra to give discovery of documents, a situation which was not envisaged when the parties entered into the Fast Track Arbitration Procedure,

That they had been concealing relevant information about his telephone problems from Graham since at least 1990.  

2nd Th   E37-b is a Telstra document dated 2nd November 1990 FOI folio C04550 and C04551 from Trevor Hill to Peter Gamble noting:

4) “Telecom needs to examine those documents pertaining to the tests carried out on North Melb exchange to determine if any of these documents have been generated as a result of an “Interception” If so, then Telecom will be precluded from disclosing them under the discovery process. (5) “The Australian Government Solicitor, on behalf of Telecom, has written to the solicitors acting for Golden Messenger seeking their undertaking not to disclose to their client or others the content of the report on the North Melb exchange”E37-b.

It is also important to put Telstra FOI documents folio C045501 and folio 001801 E37-c together with folio R04205 of 13th December 1993 E37-d, because document R04205 confirms that, while Telstra was involved in the COT FTAP process with the first four COT claimants, including Graham Schorer, Trevor Hill received a copy of a Telstra internal email with the Subject title of “AUSTEL Mandatory Performance Regulation”, this email noted that: “AUSTEL have agreed to limit the scope of Telstra’s mandatory testing performance”.  Taken together, these three documents, which all relate to Trevor Hill, show just how far Telstra was prepared to go in order to hide, from both the Federal Court and (four years later) the arbitrator, that in conjunction with Telstra the regulator AUSTEL had allowed this type of parameter performance limited testing (that should have been applied on all the Difficult Network Fault DNF customers) who had been registering complaints with both the regulator and Telstra for years.


25 Jan 96

Ted Benjamin writes to Graham stating:

“…At paragraph 17 the Claimants state that their business was connected to the Telstra Australia ISDN Network in December 1993 by Telecom Australia, but the service difficulties, problems and faults previously experienced still continued. Telstra understands that the PABX generates at the premises at which it is located and also generates reports which are sent to or generated at the premises of the company responsible for servicing that PABX. Those reports are relevant to the Arbitration to enable Telstra to distinguish between the telephone service difficulties, problems and faults attributed to the CPE, CAN and Network and misoperation by the Claimants.” E38

In other words, Telstra wanted documents from Graham but would not release the congestion traffic data for the exchanges that serviced the North Melbourne exchange that serviced Golden Messenger see E37.  Again, here is further evidence that Telstra breached the Supreme Court ‘rules’ in regards to the release of discovery.


   16 Feb 96

Graham Schorer’s solicitor, William Hunt, received a phone call from Amanda Davis, who had Power of Attorney for Maureen Gillan’s claim.  Maureen was one of the four COT claimants at the time.  William Hunt’s file note regarding this phone discussion notes:

“… Amanda Davis, who rang on the suggestion of Schorer.  She told me she had complained in effect to Bartlett of the legal support team to Hughes, that the administrator (the Telecom Ombudsman’s department) had been pressuring Hughes to produce results and get on with the matter generally.  She was putting it to Bartlett that any pressure on Hughes should be related to getting Telecom to produce results and not just to wind the matter up.

The impression I got was that Bartlett’s view was that the administrator had to keep out of the rights and wrongs of the disputation between the parties to the arbitration,” E-39-a

If Peter Bartlett div have the view that he should keep out of the rights and wrongs of the disputation between the parties to the arbitration”, why did he write to Warwick Smith on 28th April 1995 E42-c and E42-d (below) stating it would be unacceptable for Dr Hughes to contemplate the delivery of the Alan Smith award being delayed until Dr Hughes’ return from Greece?

What throws further confusion into the pressure being applied to Dr Hughes to complete his findings regardless as to whether the claimants have received the discovery documents they were promised comes in the form of a letter dated 18th April 1995 (see E39-b) from John Rundell the Arbitration Project Manager to Warwick Smith (TIO) noting: “It is unfortunate that there have been forces at work collectively   beyond our reasonable control that have relayed us in undertaking our work.”

Even though this letter was copied to both Dr Hughes and Peter Bartlett they still brought down a finding on the incomplete DMR & Lane technical report on the Alan Smith issues aware that is had been the “forces at work” that had caused the DMR & Lane report to remain incomplete.

E39-b) was not provided by the TIO to Alan Smith until 2002 (seven years after Alan’s arbitration).


18 Mar 96

Oren Zohar from FHCA the TIO-appointed Arbitration Resource Unit sends a fax to Dr Hughes stating:

“…Telstra has proposed that the meetings be held on Monday, Wednesday and Friday week commencing 25 March 1996. Graham Schorer has yet to confirm whether these dates are acceptable and he has advised that he will contact me once he has spoken with George Close and his solicitor, Bill Hunt,” E40


19 Mar 96

William Hunt’s file notes states:

“…At or about the same time Bell Canada had Telstra doing reports on its service in relation to Golden’s receipt of same. At or about the same time similar tests were being done on the Telstra equipment to Smith and the results of those cover the demonstration that they could not have been done.  As to the second Bell Canada test Schorer has on disk the Telstra abandoned certain tests as part from certain exchanges. One can only assume that the reports were unsatisfactory to Telstra or supportive of Schorer.” E41-a

E41-b This letter dated 9th December 1993 from Cliff Mathieson, Managing Director – Commercial Business to Telstra’s Ian Campbell discusses the many inaccuracies contained in the BCI Report and coincides with William Hunt’s file notes concerning the BCI tests. Although on page three of this letter Mr Mathieson notes:

“…Having regard to the above, I am of the opinion that the BCI report should not be made available to the assessor(s) nominated for the COT Cases without a copy of this letter being attached to it,”

TIO records show this letter was not provided to the COT arbitrator (Dr Hughes).  

The BCI exhibits E41-a and E41-b are also linked to the BCI ‘can of worms’ exhibits shown below as E42-a to E42-f.


22 June 96

This TIO Facsimile Cover Sheet from Pia Dia Mattina (TIO office) to Peter Bartlett (TIO-Special Counsel) discusses Dr Hughes 21st June 1995 letter to John Pinnock (see E 42-b) below, noting:

“Peter, could you please have a look at Hughes’ letter to Pinnock dated 21 June 95 re Alan Smith. John wants to discuss it on Monday, and what the approach should be re parties seeking to revisit issues post Arb’n (Arbitration). His position is not to open the can of worms, but would like to discuss strategy with you”. E42-a  

Please Note: a 16 page report consisting of 46 exhibits titled: “Bell Canada International (BCI) Telstra’s Misleading and Deceptive Conduct” dated 8th August 2010 was provided to Mr Graeme Samuel AO, Chairman of the ACCC which confirms the BCI (Cape Bridgewater Addendum) Report placed into evidence by Dr Hughes, was more than just fundamentally flawed.  This is the same BCI Report/information that would have opened the ‘can of worms’ had Alan’s claims been investigated by Dr Hughes during his arbitration or around the dates of 21st and 22nd June 1995.

In Dr Hughes letter referred to in E42-a attached here as E42-b states:

“I do not believe I have jurisdiction over this matter any longer, nor do I consider it appropriate for me to enter into correspondence with ether of the parties regarding the conduct of the proceedings or matters which may or may not have come to light subsequently to the delivery of my award.”

What Dr Hughes doesn’t say in this letter is that he was pressured by the TIO to bring down his award before he left to present a legal brief in Greece. E42-c is a letter from Peter Bartlett (TIO Special Counsel) who had been exonerated from any legal liability when the arbitration agreement was secretly altered to favour him and the Resource Unit.

In this letter from Mr Bartlett to Warwick Smith (TIO) see 42-c it states: Fast Track Arbitration – Smith.

“Further to our recent discussion, it seems to me that we should put to Gordon Hughes that we expect his award to be made prior to his departure on 12 May 1995. Attached is a draft letter to Gordon. It is in reasonable harsh terms.”

E42-d is the draft letter referred to by Mr Bartlett to Dr Hughes noting:

“I understand you are to present a paper in Greece in mid May. I would expect the Award would be delivered prior to your departure. It would be unacceptable to contemplate the delivery of the Award being delayed until after your return.”

E42-e this document is page 2 of the TIO-appointed technical consultants DMR & Lane TIO- draft Report (on Alan’s matters) dated 30th April 1995, provided to the Arbitrator stating:

“It is complete and final as it is. There is, however, an addendum which we may find it necessary to add during the next few weeks on billing, i.e. possible discrepancies in Smith’s Telecom bills”…and on page 3 notes…”One issue in the Cape Bridgewater case remains open, and we shall attempt to resolve it in the next few weeks, namely Mr Smith’s complaints about billing problems. Otherwise, the Technical Report on Cape Bridgewater is complete”

E42-f is the final report provided to Alan on 2nd May 1995 and in the second paragraph on page I of the alleged final DMR & Lane Report, (also dated 30th April 1995), is the wording: “It is complete and final as it is” is displayed on this page. However, on page 2 the wording as shown in the arbitrators copy (see E42-e above) i.e. One issue in the Cape Bridgewater case remains open, and we shall attempt to resolve it in the next few weeks, namely Mr Smith’s complaints about billing problems. Otherwise, the Technical Report on Cape Bridgewater is complete”, has been removed. 

In other words, even though DMR & Lane needed extra weeks to investigate Alan Smith’s billing claim documents which incorporated the Bell Canada International (BCI) impracticable tests results Alan’s billing claim information was not addressed.


Had Dr Hughes not been pressured into bring down his Award weeks before his consultants had completed their findings Dr Hughes’ statement in his letter to John Pinnock (TIO) at E42-b regarding the conduct of the proceedings or matters which may or may not have come to light subsequently to the delivery of my award,” the information that did come to light which confirms BCI did not conduct the Cape Bridgewater tests as shown in their report was received by Alan Smith from Telstra on 25th May 1995, while Dr Hughes was in Greece.

The statement in E42-a, above, that John Pinnock’s “position is not to open the can of worms,” shows how many people have been involved in keeping a lid on how corrupted Alan’s arbitration process really was.  


11 Jul 96

This letter from Sue Harlow (Member) AUSTEL to Senator Richard Alston attached the sixth AUSTEL COT Cases Report see E43 notes on page 12 under the heading Conduct of the Arbitrations –

“The TIO believes some comment on the behaviour and attitude of Telstra in the conduct of these Arbitrations is warranted. The TIO believes that Telstra has, in all claims, responded in an overly legalistic manner. It has shown a tendency to deny liability under every potential clause of action on the basis of perceived statutory and contractual immunities.”


22 Jul 96

Dr Hughes (arbitrator) wrote to William Hunt E44-a noting:

“…I have considered the submission of the parties Dr in relation to the request by the claimant for an adjournment of this arbitration until January 1997. The essence of the claimants request is that: Telstra has not been co-operative in responding to FOI requests but (as I understand how the argument is put) further information might be usefully produced it Telstra is granted an adequate period of time to produce it.

Telstra has responded by asserting:

·                           the arbitration agreement provides for the completion of steps within agreed time frames;

·                           the history of this arbitration demonstrates that Telstra has taken all reasonable steps to provide the claimant with relevant information.

After considering the matters raised by both parties, I have come to the following conclusion:

·                           it is not, however, essential that all relevant information be available to the claimant at the time the Statement of Claim is submitted;

·                           I do not believe the claimant would be prejudiced by submitting a claim based on information presently available to him,”   

On 17th February 1994 E44-b:  Graham Schorer, Telstra, Peter Bartlett, and Dr Hughes met to discuss the settlement v arbitration process. Telstra’s transcript of this meeting confirms that the COT claimants still wanted a commercial settlement process and not an arbitration procedure. On page three of the transcript, Dr Hughes stated that this course of action would be more effective and that, as arbitrator, he “… would not make a determination on incomplete information.

In the case of Alan Smith, as it turned out, Dr Hughes DID make his determination on incomplete information when he handed down his award even though his own technical consultants, DMR & Lanes, had asked for ‘extra weeks’ to complete their findings see E42-a and E42-f– a request that Dr Hughes denied.


26 Nov 96

Pages 16, 17, 18 and 38 from the AUSTEL draft finding on Graham Schorer – Golden Messenger is discussed below E45  

The George Afonezenko Telstra’s arbitration witness makes a number of statements regarding the Flexitel equipment in Telstra’s 26th December 1996 briefing B003 report see below E46-a and E46. These statements do not match the findings contained in the (AUSTELL draft (Golden Messenger) report on the same Flexitel equipment!  

This draft report had been provided to Telstra, but was withheld from Graham until October 2008. Pages 16, 17, 18 and 38 E 45, which support Graham’s claims that his business had suffered severely due to these unresolved problems are linked to Telstra’s B003 Briefing report E 46-a. It is clear that, if Graham had been given a copy of the draft report in March 1995, instead of 2008, he could have successfully challenged statements made by George Afonezenko regarding the Flexitel equipment.

The statement made by AUSTEL on page 38 of this draft report: 

“Golden Messenger has advised that its decision to accept a settlement and not proceed with legal action was made on the basis that it was not in the position to fund the legal action in the Federal Court. It should be noted that five years prior to the settlement, that is for the entire duration of the disputed period, Telecom maintained that the Flexitel System was satisfactory whilst internal correspondence from technical and legal staff acknowledged – the system did not meet Golden Messenger operational requirements (paragraphs 23, 24 and 25 refer) – Golden Messenger was likely to be successful in establishing that Telecom engaged in misleading and deceptive behaviour (Legal Briefing Paper, dated 1 July 1992, prepared by Principal Legal Officer) – The above findings do not support Telecom’s claim of COT receiving fair treatment.”


26 Nov 96

Telstra arbitration defence document provided to Graham Schorer, entitled Briefing Document B003 report dated 26th November 1996, (Appendix D page 18) Telstra notes at:

Point 4: “…From 10 October 1995 customers whose services were directly connected to LONU exchange would incorrectly receive a RVA when calling (03) 9287 70** (8 digit dialling). Customers connected to North Melbourne System-12 exchange (NMEE) to NMEX would incorrectly receive the RVA of 50% of all call attempts to (03 9287 70xx were trunked on 50/50 basis via LONU and North Melbourne AXE Telephone Exchange.  


E46-d shows that on 25th February 1994, Senator Richard Alston raised the AXE problems in the Senate Estimates Committee with the then Chairman of AUSTEL Robin Davey noting:

“I refer you to a minute from Telecom dated 2 July 1992 in relation to Mr Alan Smith of Cape Bridgewater – no doubt well known to you and to me. This minute says:

Our local technicians believe that Mr Smith is correct in raising complaints about callers to his number receiving a Recorded Voice Announcement saying that the number is disconnected. They believe that it is a problem that is occurring in increasing numbers as more and more customers are connected to AXE”.

The upgrading to AXE exchanges has continued apace since that time, has it not? Mr DaveyMy understanding is that it has, yes. Senator ALSTON – “On the face of that letter then suggests or implies that you will be having more and more complaints as a result – presumably some sort of overload.”

E46-f is a copy of a letter from Alan Smith’s dated 3rd November 2008 to Mr Chris Chapman Chairman of ACMA advising him that ACMA has still not released to Alan the AXE documents they were obliged to provide him under direction of Mr Friedman during the AAT hearing.


E46-g this letter dated 9th November 2008 from Alan Smith to Mark Hughes AAT Case Service Officer (copied to Mr Chris Chapman) shows that the AXE report requested by Alan as part of his AAT hearing has still not been supplied by ACMA. On page 3 of this letter Alan quotes from page 168 from the April 1994 AUSTEL COT Case Report which notes at point 7.40 “AUSTEL recently became aware that Telecom had prepared an internal document on the subject of this AXE fault on 21 March 1994 sought a copy from Telecom.” As of 2010, ACMA has still not abided by the orders given by Mr Freidman AAT and supplied Alan Smith a copy of this AXE report.

E46-h is page 168 from AUSTEL April 1994 COT Cases Report.


Not in date order

8th March 1995: Correspondence sent from AUSTEL to Telstra and Graham’s FTAP advisor (Garry Ellicott), regarding Graham’s FOI request to AUSTEL, which asked for access to documents held by AUSTEL see E48-a, E48-b and 48-c these three letters show that Graham was asking to see technical information that AUSTEL would have had to have received from Telstra during AUSTEL’s investigation into Graham’s (Golden Messenger) issues.


Not in date sequence

31st March 1994: This letter from AUSTEL’s General Manger, John McMahon see E47 to Graham notes:

“The Telecommunication Act 1991 requires, in effect, that where as a result of an investigation AUSTEL makes a finding that is adverse to a respondent it must afford the respondent an opportunity to make submissions in relation to the matter. Accordingly, AUSTEL will be making a copy of its draft report available to Telecom for its perusal at its premises on Wednesday, 6 April and Thursday, 7 April. As a matter of courtesy I would like to give to you and other directly interested parties the opportunity to view the draft report,”


The draft report shown to Alan Smith and Graham Schorer in AUSTELL’s Queens Road Melbourne offices during the lock-up period on 6th and 7th April 1994, was NOT the draft findings received by Alan in November 2007 and Graham in October 2008.


Not in date order

Letter dated 4th February 1998 from Telstra’s Ted Benjamin to John  Pinnock TIO attaching Telstra files notes following their 14th January 1998 investigations into the continuing phone problems affecting Alan Smith’s business.  These file notes confirm the telephone problems did continue to affect Alan’s business endeavours after his arbitration. E49-a

The attached three documents at E49-b confirm three professional people were prepared to acknowledge in writing their experience of ongoing telephone problems when receiving and/or sending faxes to Alan Smith up to at least 1998. E49-c Alan’s resident caretaker from 1997 to 2000 also documented the experiences with ongoing telephone problems. E49-d dated 4th September 2006 confirms Darren Lewis the new owner of Alan’s business also had ongoing telephone problems from when he purchased the business. E40-e dated 30th January 2000 from Dial A Secretary of Warrnambool (Victoria) also documents their problems with receiving and sending faxes to Alan’s business in 2000.


Not in date order

This letter E50-a dated 13th October 1994 from a Telstra whistleblower was received by Graham Schorer in 2001 under FOI from the then government regulator ACMA. Exhibits 50-b support the comments made in E50-a, that Telstra were altering relevant and/or removing information from discovery documents requested by the COT claimants in an attempt to minimise Telstra’s liability.

Again, why didn’t the Government Regulator and the TIO advise the COT Claimants about this letter? Why wasn’t this letter provided to the Senate Estimates Committee of 1997 to 1999 who were investigating Telstra’s withholding of FOI documents from the COT Cases?


Not in date order

Document E51, are pages 89 to 92 from the April 1994 AUSTEL COT Cases Report, clearly shows that the telephone problems that the claimants reported continued to occur because the SVT process was not in operation during the first COT settlement process in 1992.  When Neil Tuckwell then failed to ensure that the SVT process met the regulatory standards during the 1994/5 arbitrations, the COT claimants whose businesses were still suffering from the same major telephone problems that had sent them into arbitration in the first place, and who were complaining that now the SVT process was not being carried out correctly, continued to watch their businesses being destroyed for years after AUSTEL had told various Government Ministers that the SVT process had been ‘successfully’ completed.


Exhibit E23-j (see above) confirms on 25th February 1994 Robin Davey (then the Chairman of AUSTEL) told Senator Richard Alston (see Senate Hansard records at E23-j) that AUSTEL had developed a ‘network telephone standard’ and the telephone services of all the COT claimants would therefore have to reach this ‘standard’ before they were signed off, but Mr Davey’s predecessor, Neil Tuckwell, did not adhere to these standards. The SVT process conducted at Alan Smith’s business (the process that was abandoned) was not signed off.


Not in date order

This letter dated 27th April 1994 from Steve Black, Telstra’s arbitration defence coordinator to Robin Davey Chairman of AUSTEL notes:

Attached for your information, an updated draft of the standard Verification Tests for use in Telecom’s Public Switched Telephone Network.”

The tests have been prepared in consultation with Cliff Mathieson of AUSTEL and will form the basis for determining whether an individual telephone service is operating satisfactory. Once agreement has been reached on these Verification Tests, Telecom will be in a position to commence the testing of the services associated with COT customers. And ensure they meet the agreed requirements for a satisfactory service.” E52

Why, when this letter shows how important the SVT process was did AUSTEL still allow Telstra to submit known false SVT Cape Bridgewater Holiday Camp tests (under oath) as arbitration defence documents?


Not in date order

This AUSTEL document page 4 from the AUSTEL COT Cases July1994 report AUSTEL Comments: An important component of Telecom’s 4-stage fault handling process is the Service Verification Tests (SVT) These tests are important for telecom to be able to provide objective data about the end-to-end performance of its network in regard to the service of an individual customer on the date tests are conducted.E53

PLEASE NOTE: even though Chris Chapman Chairman of the ACMA and all Board members have been provided with the CCAS data for the 29th September 1994 SVT tests at the Cape Bridgewater Holiday Camp that clearly show NO SVT incoming tests calls were conducted at Alan’s business they have refused to address this issue. The TIO and Telstra have also refused to address this issue.


Not in date order

This AUSTEL document 9th November 1994 COT Cases Quarterly Report notes:

“AUSTEL will be revisiting the issues identified above and a range of other issues as part of our review of the SVT. Unfortunately AUSTELL has been continually frustrated in regard to monitoring this recommendation by Telecom’s slow and incomplete responses to requests for data necessary to the evaluation of the tests.   E54

PLEASE NOTE: when Alan Smith provided information to AUSTELL that Telstra actually abandoned the Cape Bridgewater Holiday Camp tests they only wrote to Telstra damming their SVT process as deficient but still allowed Telstra to rely on these deficient SVT tests in their arbitration defence of Alan’s claims.


Not in date order

This AUSTEL document page 21 from AUSTEL’s July 1994 Quarterly Report notes:

“AUSTEL notes: that DNF customers have characteristically reported faults over extended periods of time. Clarification will be required of the definition of ‘service repairs’ when a fault recurs after initially having been determined as “repaired. E55.

PLEASE NOTE: Alan Smith has written hundreds upon hundreds of letters to the TIO, his local Federal Member of parliament David Hawker MP, other Ministers and AUSTEL all since the end of his arbitration 1995 to 2002, literally begging someone to investigate the ongoing telephone billing lockup problems that were not addressed during his arbitration.

Has Section 70 in the Crimes Act 1914 prevented any of these parties from blowing the whistle on what really happened during the AUSTEL facilitated SVT process?


15 Sep 05

Senator Barnaby Joyce wrote to Alan Smith and Graham Schorer noting:

“…I am pleased to inform you that the Minister has agreed there needs to be finality of outstanding CoT cases and related disputes. The Minister has advised she will appoint an independent assessor to review the status of outstanding claims and provide a basis for these to be resolved.

I would like you to understand that I could only have achieved this positive outcome on your behalf if I voted for the Telstra privatisation legislation E56


16 Nov 06

Letter from Senator Joyce to the Hon Senator Helen Coonan noting:

“I must remain with my commitment to the people involved with the CoTs cases. The commitment is representing their frustration and finding a resolution to the issue.

The resolution to the issue, is referenced in your letter of 13th September 2005, where you state “I agree that there should be finality for all outstanding “COT” cases and related disputes. I believe that the most effective way to deal with these is for me to appoint an independent assessor to review the status of all outstanding claims.”E57-a

As of September 2010, Telstra nor the previous Coalition Government or Telstra so far have addressed the agreed unresolved Telstra COT Case issues.

The letter from Senator Helen Coonan dated 17th May 2007 to Alan E57-b notes:

“I have now made both formal and informal representations to Telstra on behalf of the CoTs. However, Telstra’s position remains that this is a matter that is most appropriately dealt with through a court process. I also appreciate the depth of feeling regarding the matter and suggest you consider whether any court proceeding may be your ultimate option.” 


28 Sep 09

Letter from Alan Smith to Ms Deirdre O’Donnell noting:

On 31st December I wrote to the TIO again, asking him to provide me with all ‘relevant pre-arbitration procedural documents’ that had been exchanged between Dr Hughes, the Resource Unit and the TIO’s office, including all ‘inter-arbitration correspondence’ that had been exchanged between the TIO and Dr Hughes.  This request was made because, at that point, I had remembered that the COT Spokesperson (Graham Schorer) solicitor had assured us that the agreement included clauses that guaranteed the TIO’s Special Counsel and the TIO-appointed Resource Unit would be liable for any proven act of negligence that occurred during the COT arbitrations but, when I went back to the agreement so I could show these clauses to my solicitors, Law Partners, I discovered that the clauses had somehow disappeared.  When I advised Law Partners that the clauses were missing, they suggested that perhaps the clauses had been attached to the agreement separately (annexed) and recommended that I check all the pre-arbitration material that was available from the TIO.  On 10th January 1996 however, the TIO responded to my request, noting that he did not “… propose to provide you with copies of any documents… . E58

No response has ever been received by Alan Smith regarding this letter.


The Institute of Arbitrators and Mediators Australia (IAMA) Ethics and Professional Affairs Committee are investigating Alan Smiths allegations regarding the conduct of the arbitrator (Dr Hughes) during Alan’s arbitration and, on 28th and 29th 2009, Alan notified Mr Paul Crowley, the CEO of the IAMA, that Alan’s submission on this matter was complete.  Since then (between October 2009 and September 2010) as a courtesy to the IAMA and to show them that these arbitration issues are still alive, Alan has forwarded to Mr Crowley copies of letters Alan has written to various parties involved in the arbitration, e.g. the TIO, the ACMA, Telstra and Mr Graham Samuel AO of the ACCC.  At this point Alan does not know when the IAMA Ethics and Professional Affairs Committee will hand down their findings.


1 Sep 10

In this letter from Alan Smith to Mr Graeme Samuel AO Chairman of the ACCC and Part-time member of the ACMA Board Alan noted that:      

“As I have noted in the closing statements in my letter to Mr Chapman, it is dangerous to be right when the Government is wrong but I know that AUSTEL, the Government Telecommunications Regulator, should never have allowed Telstra to pressure them into removing their true findings from the final version of their 13th April 1994 Report when the draft of the AUSTEL Cape Bridgewater Holiday Camp Report dated 3rd March 1994 (which I didn’t receive until November 2007, thirteen years after my arbitration) states that my business had been connected to an old and outdated RAX exchange that, according to Telstra’s own records, had been declared obsolete around 1984/1984 but was still in use at Cape Bridgewater until August 1991. E59


1 Sep 10

Alan Smith wrote to Mr Chapman Chairman of the ACMA and the Board noting that:

“My letter is not a Geoffrey Robertson hypothetical. This is a living, breathing public interest matter.

The following four examples entitled MELU RVA Fault, Heywood/Portland Register RVA Problem, Lightening Strike and ARK Exchange v RAX Exchange shows how the suppression of the AUSTEL draft Cape Bridgewater Holiday Camp report – stopped the arbitrator from correctly assessing the true value of the telephone faults that had affected the viability of my business”.E60


9 Sep 10

Alan Smith’s letter to Clair O’Reilly, Senior Lawyer for the ACMA confirms beyond all doubt that AUSTEL breached their statutory obligations towards Alan and possibly other COT Cases during the AUSTEL COT Case investigations. I this letter Alan also notes:

“When the FOI Act was formulated, no-one would have ever believed that a Government Regulator like AUSTEL would breach its statutory obligation to fellow Australian’s by deliberately withholding relevant information from a Government Minister and would allow another Government-owned Corporation (Telstra) to submit false statements to an arbitration process that had been endorsed by the government, under oath – which is what Telstra did when they stated that their Cape Bridgewater Holiday Camp SVT testing regime had met all of the Regulators specification when they had already been warned by that same Regulator that they did not meet the AUSTEL specifications.E61



     9 Sep 10   



Alan’s letter to Kate Hebbard, Director, Communications Enforcement & Compliance Communication Group ACCC is a clear enough message showing that Alan has legitimate claims against the Government Regulator for breaching their statutory obligation to him noting:

“Section 70 of the Crimes Act 1914, directs that any unauthorised disclosure of information by Commonwealth Officers is a breach of the Act. It certain the ACMA  public servants are afraid to disclose what they know concerning AUSTEL’s involvement in allowing Telstra to submit false evidence into an arbitration process because of the various provision of various sections of the Crimes Act 1914, then the Act needs to be changed.”

Since this report is personally addressed to you, Mr Samuel, I want to say, as one Australian to another, that when you put this report together with the letters I have sent to you in August and September, it will be clear that AUSTEL certainly did breach their statutory obligations to both Graham Schorer and me, and possibly to other COT claimants who were the subject of the same AUSTEL COT Cases investigations

I am now asking that you please consider this report and the attached exhibits before you decide whether or not to investigate the way so many public servants hid what they knew about AUSTEL’s true findings regarding the COT investigations and what has stopped those public servants from disclosing what they know.  If Section 70 of the Crimes Act 1914 or any other section of the Act is stopping public servants from broadcasting what they know concerning the unlawful way in which the COT arbitrations were conducted then the Act needs to be changed.

I would also like to ask you to please:

  1. Acknowledge the receipt of this report, even if you are unable to investigate these matters because of your position as a part-time member of the board of the ACMA; and
  2. Advise me regarding which Government agency would have the power to investigate this serious matter if it is not within your jurisdiction.

Thank you,





Alan Smith


16th September 2010


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