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Fraudulent Treacherous Conduct

A criminal scheme devised by Telstra to minimize their losses was uncovered by the Senate in June 1997 (Refer to Senate page 5169 SENATE official Hansard – Parliament of Australia - (see TIO Evidence File No 3-A) more than two years after most of the arbitrations were concluded.

Bribery and corruption, including misleading and deceptive conduct, destroyed the COT arbitrations  while the powerful bureaucrats Australian attempted to fight this fire with the talk of change. This bribery and corruption plagued the COT cases’ government-endorsed arbitrations, and is the reason absentjustice was born.

It is most important for you the reader of  that the while numbered exhibits 1 to 10 are in the footnotes in the body of the book by pressing that number it will only take you to Indix file where all the exibits are exposed below. It is for you the reader if you wish to check the numbered exhibit to clarfy the point I am making to access that documents yourself  

I do not expect the reader to view all the exhibits below which validate my story. They are there as reference material for those who might doubt some of the more unbelievable statements concerning Australia's corrupt government agencies and the lawyers who assisted the Telstra Corporation to minimize the compensation owed to the Casualties of Telstra arbitration and mediation claimants.  It only became obvious to me when I started writing the story that not many people would believe what happened to the COT Cases during their government corruption and the dirty deeds used by the government to cover up these horrendous injustices committed against 16 Australian citizens.happen during an arbitration endorsed by the Australian government. 

The exhibits below are available for quick reference for those who might doubt my claims. In the world outside of Australia as well as in it would have been believed that a government in a democracy, namely the previous Liberal government which lost power in May 2022, would be capable of being so corrupt and uncaring towards the ordinary working-class Australian (see robodebt

This type of uncaring conduct is nothing new to the previous Liberal government as my story shows. The reader only has to click on Chapter 7- Vietnam-Vietcong, and they will see how a Liberal Sir Robert Menzies and then Holt government during the Vietnam War was prepared to sell Australian wheat to Communists China in the 1960s, aware some of it was being redeployed to North Vietnam where Australia's conscripted young soldiers and those of New Zealand and the USA were being killed and maimed by the North Vietnamese Guerrillas.

Learn about government corruption and the dirty deeds used by the government to cover up these horrendous injustices committed against 16 Australian citizens.

In simple terms, the Liberal government like the robodebt Australia's working class citizen was expendable i.e.; collateral damage

Example 1:  File AS 942 - AS-CAV 923 to 946 

Example 2 :  File 34-C - AS-CAV Exhibit 1 to 47

AS-CAV Exhibit 1 to 47 – AS-CAV Exhibit 48-A to 91AS-CAV Exhibit 92 to 127AS-CAV Exhibit 128 to 180AS-CAV Exhibit 181 to 233AS CAV Exhibit 234 to 281AS-CAV Exhibit 282 to 323AS-CAV Exhibit 324-a to 420AS-CAV Exhibit 421 to 469 – AS-CAV Exhibit 470 to 486AS-CAV Exhibit 488-a to 494-e –AS-CAV Exhibits 495 to 541AS-CAV Exhibits 542-a to 588AS-CAV Exhibits 589 to 647AS-CAV Exhibits 648-a to 700 – AS-CAV Exhibit 765-A to 789AS-CAV Exhibit 790 to 818AS-CAV Exhibit 819 to 843AS-CAV 923 to 946 – AS-CAV Exhibit 1150 to 1169AS-CAV 1103 to 1132AS-CAV Exhibit 1002 to 1019AS-CAV Exhibit 996 to 1001 – GS-CAV Exhibit 1 to 88GS-CAV Exhibit 89 to 154-bGS-CAV Exhibit 155 to 215GS-CAV Exhibit 216 to 257GS-CAV Exhibit 258 to 323GS-CAV Exhibit 410-a to 447GS-CAV Exhibit 448 to 458 GS-CAV Exhibit 459 to 489GS-CAV Exhibit 490 to 521GS-CAV 522 to 580GS-CAV Exhibit 581 to 609



All our mini stories are told in this story and on this website can be obtained by clicking on the many chapters and downloads from those chapters.,  Misconduct in Public Office Chapter 4 - Government spying, Australian Federal Police Investigations,  Corruption in Arbitration 1r, Chapter 2 - Inaccurate and Incomplete, etc. Clicking on these links automatically opens a PDF of the exhibit. By using this method and following the file numbers, you can verify our story. We could not have successfully composed this publication or my website without these exhibits to prove our story. The corruption and injustices perpetrated against the Casualties of Telstra (COT cases) by those in various administrative roles, under the umbrella of legally administered arbitrations, are so overwhelming that we would have lost clarity had we placed all in one manuscript. So, as you read this publication, regularly check the evidence on the website and the numbered exhibits to ensure you truly appreciate the enormity of what you are reading.

How Telstra and its legal arbitration defence team perverted the course of justice by using such dubious strategies as intercepting relevant faxes as the following shows:

The fax imprint across the top of this letter (Open Letter File No 55-A) is the same as the fax imprint described in the Scandrett & Associates fax interception report (see Open Letter File No/12 and File No/13), confirming faxes were intercepted during the COT arbitrations. The question the Telecommunication Industry Ombudsman (TIO) and the Federal Attorney-General has still not answered is:

Was this letter actually faxed to my office by the TIO. to assist me in any pending appeal process and, if not, why was such an important letter deliberately kept from me during my designated appeal period? 

One of the two technical consultants attesting to the validity of this fax interception report emailed me on 17 December 2014, stating:

“I still stand by my statutory declaration that I was able to identify that the incoming faxes provided to me for review had at some stage been received by a secondary fax machine and then retransmitted, this was done by identifying the dual time stamps on the faxes provided.” (Front Page Part One File No/14)

It is also clear from Front Page Part One File No/1File No/2-A to 2-EFile No/3File No/4 and Front Page Part One File No/5, that numerous documents faxed from my office to the arbitrators office did not reach their intended destination.

Failing to deliver crucial FOI documents (or delivering them months and even years too late, often so highly censored that little intelligible remained), even destroying documentary evidence and fabricating evidence was never investigated or stopped by the arbitrator. No findings on these corrupt practices by Telstra were broadcast in the arbitrator's award. Comparing the draft findings in the arbitrator's award and those in his final award, it becomes obvious he had been barred from exposing these corrupt practices.

Both these two conflicting awards by Dr Gordon Hughes (the arbitrator) were provided on request from the Institute of Arbitrators Mediators Australia Ethics and Professional Affairs Committee in July 2009 (see Chapter 11 - The eleventh remedy pursued - legal abused part 3). The IAMA Ethics and Professional Affairs Committee, even though they called twice between July and November 2009 for further supporting evidence (See Burying The Evidence File 13-B to 13-C), it is thirteen years since the IAMA agreed to investigate Dr Gordon Hughes and the corruption in my arbitration. It is January 2023, and findings need to be released. 

How the central points of our claim at arbitration was ignored by the arbitrator and how no amount of effort to have these points addressed bore any fruit. How, in the course of all these travesties, the regulatory bodies — Austel (for the government) and the TIO (for the carriers) — failed to exercise any control over Telstra to the point where they could reasonably be seen as acting in concert.

Together, these travesties spell a breakdown of justice, way out of proportion to the problem we began with — people asking that their phone services be guaranteed to work to a reasonable standard so that they can reliably conduct their businesses.

Each of the COT members assumed, as most telephone users would assume, that their phone faults would be quite easily found and fixed by Telstra's skilled technicians. But 'No fault found' was the constant refrain, and the problems continued unabated throughout the course of our arbitrations, and for years afterwards, with disastrous effects on our businesses. This seemed incomprehensible: everyone had a phone the system is supposed to work for everyone. What was going on?

And why did it seem everyone was protecting Telstra, turning a blind eye to what was unlawful behaviour? Withholding important discovery documents in an arbitration procedure is unlawful. Tampering with evidence in the arbitration is unlawful (see Tampering With Evidence). Relying on defence documents that are known to be flawed in arbitration is unlawful. The TIO and Austel often refused to act; Members of Parliament, when in Opposition, were happy to provide support for the COT cause, but as soon as the government was theirs, that support vanished. No one was prepared to make Telstra accountable. It was enough to make the most level-headed person suspect conspiracies.


This is the story of a group of ordinary small-business people fighting one of the largest companies in the country. The story of how for years Telstra refused to address the many phone problems that were affecting the capacity of the COT Four to run their businesses, telling them 'No fault found,' when documents in this publication and on our website show they were found to have existed as our story shows.

How Telstra and its legal arbitration defence team perverted the course of justice by using such dubious strategies as intercepting relevant faxes, failing to deliver crucial FOI documents (or delivering them months and even years too late, often so highly censored that little intelligible remained), even destroying documentary evidence and fabricating evidence.

How the central points of our claim at arbitration was ignored by the arbitrator and how no amount of effort to have these points addressed bore any fruit. How, in the course of all these travesties, the regulatory bodies — Austel (for the government) and the TIO (for the carriers) — failed to exercise any control over Telstra to the point where they could reasonably be seen as acting in concert.

Together, these travesties spell a breakdown of justice, way out of proportion to the problem we began with — people asking that their phone services be guaranteed to work to a reasonable standard so that they can reliably conduct their businesses.

Each of the COT members assumed, as most telephone users would assume, that their phone faults would be quite easily found and fixed by Telstra's skilled technicians. But 'No fault found' was the constant refrain, and the problems continued unabated throughout the course of our arbitrations, and for years afterwards, with disastrous effects on our businesses. This seemed incomprehensible: everyone had a phone the system is supposed to work for everyone. What was going on?

And why did it seem everyone was protecting Telstra, turning a blind eye to what was unlawful behaviour? Withholding important discovery documents in an arbitration procedure is unlawful. Tampering with evidence in the arbitration is unlawful (see Tampering With Evidence). Relying on defence documents that are known to be flawed in arbitration is unlawful. The TIO and Austel often refused to act; Members of Parliament, when in Opposition, were happy to provide support for the COT cause, but as soon as the government was theirs, that support vanished. No one was prepared to make Telstra accountable. It was enough to make the most level-headed person suspect conspiracies.

My name is Alan Smith. This is the story of my battle with a telecommunications giant and the Australian Government, a battle that has twisted and turned since 1992, through elected governments, government departments, regulatory bodies, the judiciary and the Australian telecommunications giant, Telstra. This story commenced in April 1988 and is still, in 2023, being ignored by the government.

While this  COT story is not unlike that attached to Unprecedented Government Corruption, it does not have the same exhibits and images supporting the many different statements on It.

I needed to tell two stories, one for publication and the other for the government to read to enable them to understand the parameters of what happened in their endorsed arbitrations.

Chapter 1

No Fault Found


Have you ever had a reason to complain about your phone bill?

Has a friend insisted they have telephoned you, and you had not answered, even though you know you were right beside the phone at the time?

Has anyone expressed amazement at how much time you spend on the phone or prospective clients rebuked you for being unprofessional and not answering your phone when you know it has not rung for days and you have hardly made any outgoing calls?

If you have experienced even one of these situations, you will understand why I sometimes feel I have lived through a nightmare. I experienced all these problems and more for almost ten years. I am still seeking an equitable resolution of them.

The saga began in late 1987 when my wife Faye and I bought a holiday camp accommodation business perched high above Cape Bridgewater, near Portland on the southwest coast in country Victoria. The Cape Bridgewater Holiday Camp had been run as a school camp, and we intended to turn it into a venue for social clubs and family groups as well as schools.

The Camp was a decidedly phone-dependent concern, the phone was the preferred access to us for city people — and our big mistake when we fell in love with the place was to fail to look-into the telephone system. In those days there were no mobile coverage and business was not done via the internet or by email. In fact, the business was connected to a phone exchange installed more than 30 years before and designed specifically for 'low-call-rate' areas. This antiquated and unstaffed telephone exchange had only eight (8) lines. It was never intended to handle the volume of calls made by a larger population plus holiday makers when Faye and I took over the business. In blissful ignorance, we went ahead with the sale of our home in Melbourne, and I took early retirement benefits to raise the money to invest in what we expected to be a new and exciting venture.

I knew this was a business I could run successfully. From the age of 15, when I went to sea as a steward on English passenger/cargo ships, I had worked in areas that prepared me for the hospitality trade. In 1963 I jumped ship in Melbourne to work as an assistant chef in one elite hotel after another, then two years later, I joined the Australian Merchant Navy. By 1975, I had been a chef on many Australian and overseas cargo ships and now returned to land.

Faye and I had married in Melbourne in 1969, and I worked freelance in the catering industry and on tugboats while I studied for a hotel/motel management diploma. I had already taken on the management of one hotel/motel and pulled it out of receivership to be re- leased. By 1987, at the age of 44, I had enough experience behind me to be confident that I had the skills and knowledge to turn a simple school camp into a successful multifaceted concern.

I made personal visits to almost 150 schools and shires to extol the virtues of the Camp, and in February 1988, had some 2000 colour brochures printed and distributed. Then we waited for the phone to ring with inquiries, in vain. There was not even a modest 1% inquiry rate as a result of this marketing exercise.

By April we were beginning to realise the problem might lie with the telephone service. People asked why we never answered our phone or were suggesting we install an answering machine to take calls when we were away from the office. We had an answering machine, but even after installing a new one, the complaints continued, coupled with comments about long periods when the phone was giving the engaged signal.

As time went on, call 'drop-outs' added to our problems when the line just went dead in the middle of a call. If the caller hadn't yet given us contact information and didn't ring back, we lost that contact. Between 19 April 1988 and 10 January 1989, Telstra logged nine separate complaints from me about the phone service plus several letters of complaint. A typical response to my 1100 call (the number you called when there was a problem) was a promise to check the line. A technician was sent out on rare occasions, whose response was inevitable 'No fault found' while my problems continued unabated.

Eventually, we discovered that the business's previous owner had endured the same problems and had complained equally unsuccessfully about them. In 1988, when I was beginning to marshal my case against Telstra, I obtained several documents through the Freedom of Information Act (FOI). According to a document headed 'Telstra Confidential: Difficult Network Faults PCM Multiplex Report', with a sub-heading '5.5 Portland Cape Bridgewater Holiday Camp', Telstra was aware of the faults in early 1987.

Harry, our next-door neighbour, sympathised; his daughter, ringing from Colac, often complained about how difficult it was to get through to her parents. Fred, another local and once the owner of Tom the Cheap grocery chain, suffered from similar problems to ours for many years. He commiserated, saying, 'But what can you expect from Telstra when we're in the bush?' Well, I expected better than this, and certainly, we were promised better than this.

We encouraged people to write, but the telephone culture was endemic. People wanted an immediate response. As bookings dwindled instead of increasing, I began to feel I hadn't properly researched the pros and cons before moving to Cape Bridgewater.  I was beginning to question what I had done, asking Faye to agree to sell the family home so that I could satisfy my ambition to run my own business. It was not the fun I had anticipated. I was operating in a state of constant anger, a very unamusing Basil Fawlty.

We went touring South Australia to sell the concept of our Camp through the Wimmera area, but responses were few. Was it the phone to blame? How could, we be sure? The uncertainty itself added to the stress.

Sometimes the culprit was blindingly obvious. On a shopping expedition to Portland, 20 kilometres away, I discovered I had left the meat order list behind. I phoned home from a public phone box, only to get a recorded message telling me the number was not connected! I phoned again to hear the same message. Telstra's fault centre said they would look into the matter, so I went about the rest of the shopping, leaving the meat order to last. Finally, I phoned the Camp again, and this time the phone was engaged. I decided to buy what I could remember from the list and hope for the best; however, I was not surprised when I got home to learn the phone had not rung once while I had been out.

Anyone who uses a telephone has at some time reached a recorded voice announcement (known within the industry as RVA): 'The number you have called is not connected or has been changed. Please check the number before calling again. You have not been charged for this call.' This incorrect message was the RVA people most frequently reached when trying to ring the Camp. While Telstra never acknowledged what I later discovered among 1994 FOI documents, an internal Telstra memo stating: -

'This message tends to give the caller the impression that the business they are calling has ceased trading, and they should try another trader.'[1]

Another Telstra document referred to the need for

a very basic review of all our RVA messages and how they are applied … I am sure when we start to scratch around, we will find a host of network circumstances where inappropriate RVAs are going to line.'[2]

It seems the 'not connected' RVA came on whenever the lines in or out of Cape Bridgewater were congested, which, given how few lines there were, was often.

For a newly established business like ours, this was a major disaster. Still, despite the memo's acknowledgement that such serious faults existed, Telstra never admitted the existence of a fault in those first years. And with my continued complaints, I was treated increasingly as a nuisance caller. This was rural Australia, and I was supposed to put up with a poor phone service — not that anyone in Telstra was admitting that it was poor service. In every case, 'No fault found' was the finding by technicians and linesmen.

The frustration was immense, coupled with uncertainty. Were our problems no more than general poor rural service compounded by the congestion on too few lines going into an antiquated exchange? The Camp was, at that stage, the only accommodation business being run in Cape Bridgewater. Obviously, we relied on the phone more than most people in the area. But if there was some specific fault, why weren't the technicians finding it?

The business was in trouble, and so were we. By mid-1989 we were reduced to selling some shares for our operating costs. Here we were, a mere 15 months after taking over the business, and we were beginning to sell off our assets instead of reducing the mortgage. I felt like a total failure.  Neither of us was able to lift the other's spirits.

I decided to do another round of marketing in the city. I would give it all I had. We both went. Was it masochism that made me ring the Camp answering machine, via its remote access facility, to check for any messages so that I could respond to them promptly? Whatever it was, all I could get was the recorded message: 'The number you are calling is not connected or has been changed. Please check the number before calling again. You have not been charged for this call.' On the way home, just outside Geelong, we stopped at a phone box, and I tried again. Now the line was engaged. Perhaps somebody was leaving a message, I thought. Ever hopeful.

There were no messages on the answering machine. And nothing to be gained by asking why I had received an engaged signal. How many calls had we lost during the days that we were away? How many prospective clients had given up trying to get through because a recorded message told them the phone was not connected? Anger and frustration were very close to the surface.

Near the end of October 1989, our twenty-year marriage ended. I had already been taking prescribed drugs for stress; that afternoon, I added a quantity of Scotch and hunkered down in one of the cabins. Faye, understandably, was seriously concerned and called the local police, who broke into the cabin to 'save' me from me. They took me to the hospital, and I am forever grateful to the doctors who confirmed that I wasn't going 'nuts' and who sent me home the following day. My friends Margaret and Jack from Melbourne decided that Margaret would come home with me to 'bail me out'. The fun, however, had just begun.

Margaret and I arrived back at the Camp to be confronted with a disaster area. Faye had left the night before, following advice from various people that she needed to be in a 'safe house'. Doors had been left unlocked, meat from the deep freeze was left out on benches, and various items had mysteriously vanished. And, according to the Camp diary, 70 students from Monivae Catholic College in Hamilton were due to arrive in two days, booked in for five days and four nights. Without Margaret's assistance, I would have been wiped out.

Mourning the end of my marriage, the very thought of shopping was a mountain I didn't want to climb. What to feed 70 students plus staff? By the time I got my head around what to order, it was Sunday evening, and the Monivae group were due the following day. Then the hot water service broke down!

The staff were not happy about cold showers! Even so, for the next five years, Monivae College returned two and sometimes three times a year. Their support throughout this awful period helped me keep trading.

And, of course, Margaret's support. She carried so much through that first week. Aware that I was holding on by my fingernails, she suggested Brother Greg, one of the Monivae teachers, come to the house to talk to me. It was an inspired suggestion, and we talked well into the night, Margaret too, working through many things, from early childhood experiences to the end of twenty years of marriage.

In the weeks that followed, my phone problems continued unabated. I began keeping a log of phone faults, recording all complaints I received in an exercise book, along with names and contact details for each complaint and a note regarding the effect these failed calls were having on both the business and on me.

One day the phone extension in the kiosk was dead. The coin-operated gold phone in the dining room, which was on a separate line, had a normal dial tone, so I dialled my office number, only to hear the dreaded:

'The number you have called is not connected or has been changed. Please check the number before calling again. You have not been charged for this call.'

I was charged for the call because the phone did not return my coins! Five minutes later, I tried again. This time the office phone appeared to be engaged (it wasn't), and the gold phone happily regurgitated my coins.

I used this testing routine frequently over the next months and registered every fault I found with Telstra. The situation was beginning to tell on me. Why was this still happening after so many complaints? Could Telstra really be this incompetent? Or was there something worse going on? Had I made too much of a nuisance of myself? But that was ridiculous. Under the circumstances, I had behaved impeccably politely … when in fact, I had fantasies of sheer violence at times.

Now I was no longer one half of a working husband and wife team, and I started 1990 digging into my pitifully low financial reserves to pay staff or risk losing everything. I was suffering what is commonly known in the world of finance as a 'consequential resultant loss' — Faye was no longer contributing her unpaid labour. I now had to pay her a yearly dividend on her financial investment in the business.

The future looked grim. Telstra did not attempt to remedy the faults or at least no attempt that made any difference. The constant refrain of 'No fault found' was wearing very thin. I found it hard not to dwell on how many prospective customers night be lost because they couldn't reach me by phone. Nor was it long before the legal vultures were circling. I hadn't met my financial agreement with Faye, and her solicitor was demanding money. I was having trouble meeting my own legal costs, let alone finding any extra. My son's school fees were overdue, and to pay some of the mounting debts, I sold the 22-seater school bus I had originally used to ferry customers around and purchased a small utility in its place.

On the positive side, I had met a woman called Karen, who lived in Warrnambool. Our relationship developed to become quite serious. When Karen knew I was about to wind up my business because I couldn't raise funds to make any more payments to Faye, she put her house up as security for a loan, thereby giving me two years of breathing space. She believed in me, and she believed in the capacity of the Camp to succeed. She wanted to be a partner in it. This was early in 1991.

Things were starting to look up, especially when I discovered that a new exchange was to be installed later in the year at Cape Bridgewater. I was hoping this would alleviate all the problems of congested lines. It was just a question of time. Karen moved in with me, and we worked together with new energy to pull the business out of the doldrums.

In August that year came another joy when I got the first confirmation from someone within Telstra that they knew my phone problems were real. I felt such a relief that the faults were, at last, being acknowledged, and I asked for my new friend's name. I was so happy; I didn't even really register any perturbation when all he could tell me was that he worked at the fault centre in Hamilton.

According to Telstra's own file note:

Alan Smith rang 15/8/91 re service 267 267. Incoming callers are receiving engaged signal when it's not engaged …

This has been a continuing problem and he is losing a lot of business.

I said it appears from the fault history that the problem may be in the exchange and that the next RCM exchange 21/8 would solve these problems but that I would check this out with the techs.

I also said we would have a look at the service now to try and get it working correctly until cutover.[3]

At last, someone in Telstra had given me something to hang on to. When Karen sold her house, a part of the proceeds went towards paying my legal fees and my debt to Faye. I paid Faye out, and Karen's name was now officially on the title to the business. We counted the days to the installation of the new exchange.

But the triumph of a new exchange when it came at the end of August 1991 was the briefest of victories. It made not the slightest difference. The telephone problems continued just as before. However, now exacerbated by the dreadful disappointment that the war wasn't over at all. Increasingly, people reported complaints of recorded voice announcements, and I continued to complain to Telstra about faults which seemed to me to be getting worse, not better. I asked technicians if a new exchange didn't correct the problems, then where could the faults lie? Their response was unbelievable: 'No fault found.' They simply refused to engage with my question. I cursed the fact that I had no contact details for the one person who had acknowledged that there were faults. I did not see the file note he wrote until 1995.

New bookings continued to be rare. The Camp was getting in need of painting and upgrading. The business looked sad and bedraggled, and so people who passed by were not interested in stopping. And when we did have a booking, cash flow was a problem, making it tricky to put food on the table. We somehow always managed, but it was very stressful. Karen was starting to see her investment going down the drain, and the strain on her came to a head while we were in the middle of organising a charity camp for under-privileged children.

Despite the financial precariousness of the enterprise, I had from the start sponsored the stays of under-privileged groups at the Camp. It was no loss to me really: sponsored food was provided through the generosity of a number of commercial food outlets, and it cost me only a small amount in electricity and gas.

In May 1992, we held a charity week for kids from Ballarat and South-West Victoria, organised largely by Sister Maureen Burke, IBVM, Principal of Loreto College in Ballarat. Arrangements regarding food, transport, and any special needs the children might have, had to be handled over the phone, and of course, Sister Burke had enormous problems making phone contact. The Calls were either ringing out or she was getting a deadline — no sound at all. Finally, after trying in vain all through one week, she decided to drive the 3½ hours to make the final arrangements.

Just as she arrived at the Camp, Karen took a phone call from a very angry man who wanted information about a singles weekend we were trying to set up. This caller was quite abusive. He couldn't understand why we were advertising a business but never answered the phone. Karen burst into tears. She had reached the end of her tolerance, and nothing I could say was any help. When Sister Burke appeared in the office, I decided absence was the better part of valour and removed myself, leaving the two women together. Much later, Sister Burke came out and told me she thought it probably best for both of us if Karen were to leave Cape Bridgewater. I felt numb. It was all happening again.

But it wasn't the same as it had been with Faye. Karen and I sat and talked. True, we would separate, but I assured her that she would lose nothing because of her generosity to me, that I would do whatever was necessary to buy her out. We were both relieved at that. Karen rented a house in Portland, and we remained good friends, though, without her day-to-day assistance at the Camp, which had given me space to travel around, I had to drop my promotional tours.

Later I sent two copies of the early draft of this book one to Sister Maureen Burke IBVM   who wrote back, 'Only I know from personal experience that your story is true; otherwise, I would find it difficult to believe.' the other to Senator Kim Carr who stated:

I continue to maintain a strong interest in your case along with those of your fellow ‘Casualties of Telstra’. The appalling manner in which you have been treated by Telstra is in itself reason to pursue the issues, but also confirms my strongly held belief in the need for Telstra to remain firmly in public ownership and subject to public and parliamentary scrutiny and accountability.

Your manuscript demonstrates quite clearly how Telstra has been prepared to infringe upon the civil liberties of Australian citizens in a manner that is most disturbing and unacceptable” (refer Arbitrator Evidence File No 66)



Chapter 2

Casualties of Telstra


In July 1992, Karen rang to tell me she had heard of a restaurant in Melbourne suffering the same phone problems that were crippling me.

I felt a great comfort in hearing this and knew I needed to meet the owner. Making phone contact with the restaurant was difficult; eventually, I got through to Sheila Hawkins, proprietor of The Society restaurant in Bourke Street, in the centre of the city. We arranged to meet, and I travelled to Melbourne in early August.

It was so good to talk to someone who experienced similar problems. And there were more of us. Sheila knew of an Ann Garms who ran the Tivoli Theatre Restaurant in Brisbane, who was also having serious telephone problems. Back in Cape Bridgewater, I rang Ann to discover she was coming to Melbourne the following week to register her own complaints with Austel, the Australian Telecommunications Regulator. We arranged to meet together with Sheila. I went into the city again for the meeting, where Ann mentioned another Brisbane business in similar trouble — a car parts company run by Maureen Gillen. Like Ann's business, Maureen's was trunked off the Fortitude Valley exchange. Sheila, meanwhile, had contacted Graham Schorer, who somehow ran the Golden Courier Service out of North Melbourne — despite a very bad phone service.

Finally, our little group gathered together at Sheila's restaurant in Bourke Street, except for Maureen, who couldn't make the journey from Brisbane. It was Sheila who suggested we call ourselves COT — Casualties of Telstra. This was one of her last actions with the group as she withdrew shortly after due to ill-health.

At the top of the list of problems we held in common were those three little words: 'No fault found.' It wasn't just that we all had to put up with ongoing service faults. Telstra's evasion of responsibility in this regard made those faults a nightmare. Telstra had a duty to deliver us service up to a recognised network standard, and by failing to 'find' their faults, they were effectively avoiding carrying out their statutory obligation.

In October 1992, COT had its first official meeting with Telstra at the Ibis Hotel in Melbourne. We were a united and optimistic group of small-business telephone users on our way down the path to justice. We had no idea what a long haul we were in for. Indeed, this first meeting felt eminently successful. Telstra sent three executives; they treated us courteously, and we felt that our claims were being taken seriously. We were seen and treated as a concerned group of small-business people who Telstra had consistently ignored. We asked for Austel (the government regulator) to be the 'honest broker' in our matters, and the executives agreed to this. They took the documentary evidence we had brought, and at the end of the meeting, we were left with a sense that it was all soon to be resolved.

After that initial meeting, there were a number of meetings with Telstra and Austel. Based as he was in the city, Graham Schorer was the COT representative. Under pressure from Austel, Telstra was acknowledging that faults existed, though they still held back from admitting the scale of faults we knew to be true — and indeed, as it turned out, that they too knew it to be true.

Guaranteed to Network standard

Meanwhile, in July 1992, I was obliged to ask Telstra to guarantee that my phone service was up to standard. A bus service wanted such a guarantee (in case of urgent communication needs) before it would contract to bring groups to the Camp. Although I did not see how Telstra could guarantee such a thing based on current performance, I thought a guarantee might have some use as leverage.

Not one but two guarantees eventually arrived (in the event, both too late to secure the contract with the bus company). The first stated that my phone service was indeed 'up to network standard':

Whilst our recent tests indicate that your service is now performing to normal network standards, I am initiating a further detailed study of all the elements of your service and the tests which have been conducted.[4]

The second stated:

We believe that the quality of your service can be guaranteed and although it would be impossible to suggest that there would never be a service problem we could see no reason why this should be a factor in your business endeavours.[5]

Now I need to jump ahead of myself here. Material that I did not have access to at the time now reveals something of what was going on in the telephone exchange while my business was sinking.

In 1994 we COT members all ended up involved in arbitrations with Telstra. According to the rules of arbitration, Telstra had a legal obligation to provide us with relevant documents under the Freedom of Information Act.

You will hear a lot more about this in due course, not least about the unreasonable time it took for FOI document requests to be delivered (often years too late). Enough to say here, that in an FOI release in mid-1994, I received documents referring to the general congestion problem at Cape Bridgewater.

The second paragraph of a document titled 'Subject PORTLAND – CAPE BRIDGEWATER PCM HBER' of 12 July 1991 was of particular interest:

When the 'A' direction of system 2 was initially tested, 11,000 errors per hour were measured. In the 'B' direction, approximately 216 errors per hour were measured, 72 errors per hour is the specified number allowable.

This level of error was, in fact, known at least as early as February 1990, the very time my complaints were being stonewalled. And nor was it acknowledged to me at the time of writing (July 1991). And in the new exchange, the problems continued, as another document, titled 'Portland — Cape Bridgewater — RCM System' showed, referring to the information logged in March 1993, long after Telstra had first reported these massive error rates:


Initial error counter readings, Portland to Cape Bridgewater direction:



System 1

System 2

System 3

















At this stage we had no idea over what period of time these errors had accumulated.[6]


The second page of this document explains why they 'had no idea over what period of time these errors had accumulated':

The alarm system on all three RCM systems had not been programmed. This would have prevented any local alarms being extended back to Portland.

They didn't know how long these errors had been accumulating because, from 18 August 1991, when the new exchange (RCM) was installed at Cape Bridgewater, the fault alarm system had been left unconnected. Since this was an un-manned exchange, no one could know when faults occurred — except, of course, us poor, defenceless customers.

Meaning that in September 1992, when Telstra management had written to me stating that the quality of my telephone service was guaranteed as up to network standard, they had failed to realise that this alarm had not been connected. Even the local telephone technicians were oblivious to the call loss due to the unconnected alarm system in the exchange. What kind of investigation into the faults I had reported over several years does this demonstrate? A farcical one. How, for several years, could they fail to notice that the alarm wasn't connected?

A compensation deal

The formation of COT had come not a moment too soon for me. The frustration of struggling with problems that seemed immune to complaints and about which I could do nothing but complain could finally be shared. I had lost faith in my own judgement by this time; I had let down two different partners who had trusted me, and I was now borrowing from friends just to keep the Camp running on a day to day basis. Through all of this, of course, the phone faults implacably continued.

The COT group continued to negotiate with Austel and Telstra.  In late 1992 our combined pressure finally produced results: Telstra approached me with a proposal for a compensation payout which included a confidentiality agreement to the effect that I would not disclose the value of any settlement which resulted from this. I signed this agreement on 11 December 1992, and I have honoured my word not to disclose the amount of the payout without prior approval by Telstra.

That same day, I went to Telstra's city fault centre, where the area general manager and I began a long discussion regarding the extent of my financial losses over the four and a half years since I first complained about the phones. This manager and I were the only people involved in this discussion. I provided her with copies of numerous letters I had received from clients and tradespeople, describing their experiences trying to ring me. I explained how I had calculated the sum of my losses.

On a number of occasions, the manager left me alone to examine the documents she had given me. As she left on the first occasion, she explained that she would close the door so I could read in private and added that I was free to use the telephone if I needed to discuss anything with my advisors. There was a direct outside line available at all times, so I wouldn't need to speak to an operator within the building. I made use of the phone a couple of times to ring Karen and talk over the offer; together, we calculated how much I needed to repay her.

The documents provided by the manager were mostly hand-written and included copies of the so-called 'guarantees' I had received. According to one of the documents,[7] there was only a 'single' fault, lasting only three weeks, that triggered the recorded message (RVA) that my number was not connected. This document claimed that the RVA probably caused me to lose only about 50% of all incoming calls over these three weeks. Other documents referred to a minor fault in the phone exchange at Heywood plus some other minor faults which may have contributed to some call loss. The manager told me Telstra agreed to accept responsibility for these faults if I agreed to their offer.

I protested and reeled off again the continuing and constant complaints I had been getting from customers. Her response was a simple 'take it or leave it': this was Telstra's last offer, she told me, and the only other avenue I could follow would be court proceedings. Her final comment was along the lines that, 'Telstra has more time than you have money to fund court proceedings.' Reluctantly, but feeling I had no other choice, I accepted. My reluctance was well justified.

By August 1993 came my first bundle of FOI documents from Telstra. In it, astonishingly, it was a Telstra minute of 2 July 1992, which revealed that local Telstra technicians regarded my complaints as correct about the 'service disconnected' RVA on my line. Not only that, the observation was made that the problem 'is occurring in increasing numbers as more and more customers are connected …' Senator Alston raised this document in Senates Estimates in February 1994, demanding a response from Austel. No response was forthcoming, and nowhere else did this revelation gather any advance for my cause.

And two years later, I received a copy of an FOI document headed Telecom Secret.[8] This was a copy of the notes brought by the manager to the settlement meeting. The opening page, reproduced here, shows all too clearly that Telstra knew how solid my case was. The manager had blatantly misled me into agreeing to sign.

The document goes on to state: -

'Mr Smith's service problems were network related and spanned a period of 3–4 years,' and, 'Overall, Mr Smith's telephone service had suffered from poor grade of network performance over a period of several years; with some difficulty to detect exchange problems in the last 8 months.'

My acceptance of the offer notwithstanding, I continued to experience faults in my phone service. Particularly call drop-outs when, part-way through a conversation, the line would simply go dead, and short duration rings when the phone would ring once or twice and then stop, with no-one there if we picked up the receiver. Finally, in October of 1992, the area general manager arranged for two testing machines (called 'Elmi' machines) to be installed, one at the local Cape Bridgewater exchange and the other at my office.

On 13 October, I reported four calls dropping out at 1.20, 1.40, 2.00 and 3.00, and an occasion when I had answered the phone to find a deadline. Despite the Elmi machines, the Telstra technicians found no faults that they could detect as they had in so many instances before. What was going on?

It was two years before I got any elucidation from Telstra, and even then, it shed no light on the matter. In 1994, in a bundle of FOI documents I received was a hand-written file note stating: -

'We had the Elmi disconnected at the RCM [exchange] and were installing it at Mr Smith's house, and the CCAS showed no evidence of above [not receiving ring] 1.20, 1.40, 2.00 and 3.00.'[9]

This was simply not the case at all; I knew they were not installing it at my house at this time; it was already installed. So I asked Telstra to supply their Elmi print-outs from September–October 1992. Some weeks later, many documents arrived, including tapes that show that the call drop-outs and dead lines that I had experienced appeared on Telstra's monitoring equipment (CCAS) records as answered calls at approximately 1.30 pm and 3 pm.

I could not fathom why a local technician would state that the Elmi equipment was disconnected at the exchange and installed at my house when these two print-outs show that it was installed and operating at both locations incorrectly. I could only assume that all this reflected the competence and capacity of Telstra's fault centre, as well as the accuracy of their records and reportage. That thought alone was very worrying when you are reliant on the telephone.

And now I began to suspect that there might not be a simple answer to the phone faults, just waiting to be discovered and fixed. It looked as if the problems were endemic throughout the organisation and its infrastructure.  

As I struggled from the end of 1992 to the New Year of 1993, I began to wonder if 'settling' with Telstra had been such a good idea. Nothing had changed. I had been forced to re-finance, incurring more set-up fees, and because I still couldn't afford to maintain the Camp properly and the place was looking decidedly abandoned. I felt as if I had been abandoned too. Both the buildings and I were tired, run-down and in need of a face lift!

The other COT members were no better off. Maureen and Ann had also accepted settlements directly from Telstra, while Graham had his through the courts. And for each of us, poor and faulty phone service continued unabated.

My only source of strength at this time was from my fellow COT members. One Saturday evening, a couple of Scotches left me in tears of complete frustration. I knew I was easily capable of running the Camp as I pictured it but instead, I was trapped in a vicious cycle. Without customers, I would soon be completely broke, but the customers couldn't reach me because the phones didn't work. Right then, Graham Schorer rang, urging me to hang in there, convinced that we would win out in the end.

Yes, some calls did get through, in what proportion I shall never know, though perhaps the rate is indicated by the following story. In personal desperation, I decided to ring Don Burnard, a clinical psychologist the COT members had contacted when we started creating the group. Dr Burnard had written a report regarding our individual conditions, noting the breakdown in our psychological defences due to the excessive and prolonged pressures we endured:

All of these clients have been subjected to persistent environmental stress as a result of constant pressure in their business and erratic patterns of change in the functioning of their telephones which were essential to the success of their businesses.

I rang Dr Burnard for support, but my conversation with his receptionist was interrupted three times by phone faults. Later I received a letter from his office, saying:

I am writing to you to confirm details of telephone conversation difficulties experienced between this office and our residence mid-morning this day, 5 May 1993. At approximately 11.30 am today Mr Alan Smith telephoned this office requesting to speak with Don Burnard. Mr Burnard was not available to take his call. During this time the telephone cut out three times. Each time Mr Smith telephoned back to continue the call.

Ann Garms and Graham Schorer had, by now, become my comrades in arms in this war we were fighting, and we had many group discussions as we tried to find a way to deal with the evasions and deceptions of Telstra management. But we were simply three small-business people struggling against the might of a huge corporation. Not encouraging odds! We wondered if we could ever be in a position to expose Telstra's unethical corporate strategies and continued and apparently deliberate mishandling of our complaints. And Ann, like myself, had begun to suspect that our phone lines were being bugged. I will return to this later once we were able to provide evidence that our concerns were valid.

Early in 1993, as a spokesperson for COT, Graham Schorer met with Robin Davey, the chairman of Austel (the telecommunications industry regulator), to discuss our way forward. Austel was sympathetic to our situation. It recognised we had been let down in our settlements and sought to establish a standard of service against which Telstra's performance could be objectively measured in any future settlements.

Meanwhile, COT decided it was time to try to inform the Australian Senate of our plight. We sent submission after submission, with supporting FOI documents, and followed through with visits to Canberra, financed from our already depleted pockets, to meet with ministers who were sympathetic to our case.

By now, I had accumulated more than seventy letters from customers who had been unable to reach me by phone. This example, from a Year 7 co-ordinator for Hamilton High School (now Bainbridge College), who brought his group along every February from 1990, is typical:

“I wish to acknowledge in writing the repeated difficulty I have had contacting Alan Smith at the Cape Bridgewater convention centre by telephone. In the week 1st to 5 March, I made 5 or 6 attempted phone calls to Alan but I was unable to get through, indeed the line was 'dead'. This was extremely frustrating and had I not been aware of Alan's phone problems, I would have used another camp site”.

Astonishingly, one letter, dated 17 May 1993, was from a senior Telstra technical engineer, who wrote regarding his own experience of trying to ring me:

“On the 24/2/93, I received a phone call from a technician at Portland who stated he had been given a fault from (1100 fault dept.) indicating a customer in Ballarat had trouble calling your business 055 267 267. I then attempted to ring 055 267 267 myself, the ring was tripped after several bursts, i.e. 'answered', and I received a loud noise similar to a radio carrier noise and a very faint 'Hello'’.

At last, a second person inside Telstra acknowledged that I had a problem with the phone service! The engineer had even given me his name. Yet in the course of their defence of my arbitration claims, Telstra proffered a Witness Statement from this man (made in December 1994) that included no reference to this (see Summary of events/Chapter Two to Five)   

Was the engineer pressured to stay quiet during my arbitration? I don't know. Certainly, not all Telstra engineers or technicians treated COT complaints in good faith. Another Telstra technician, who experienced major problems during his official fax testing process on 29 October 1993, nevertheless advised the arbitrator that I had no problems with that service, even though the Telstra document that discusses these faults notes:

During testing the Mitsubishi fax machine, some alarming patterns of behaviour were noted, these affecting 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.[10]

In a similar incident, an FOI document regarding a complaint I lodged about my own phone service bears a hand-written note which states: 'No need to investigate, spoke with Bruce, he said not to investigate also.'[11]

Where was this attitude coming from? If from higher management, it seems an odd way to do business: exacerbating our problems so that we would only complain more.

In the first five months of 1993, I received another eleven written complaints, including letters from the Children's Hospital and the Prahran Secondary College in Melbourne. The faults had now plagued my business, unabated, from April 1988 to mid-1993.

By now, due to COT's pressure in Canberra, a number of politicians had become interested in our situation. The question was, would these politicians actually take any action on our behalf, or would they protect the 'milking cow' of the Telstra corporation?

In June 1993, the Shadow Minister for Communications, the Hon. Senator Richard Alston was showing an interest. He and Senator Ron Boswell of the National Party both pushed for a Senate Inquiry into our claims and, an ex-Telstra employee recently told me they were very close to pulling it off. If this Senate Inquiry had got off the ground, heads in Telstra might have rolled, but this didn't happen, and those same 'heads' continue to control Telstra to this day.

Even though Senator Boswell is based in Queensland and most of the remaining members of COT are in Victoria, he has continued to offer his support. David Hawker MP, my local parliamentary member, was another who saw his 'duty of care to his constituents and so answered our call for help. He took my claims seriously — indeed, he took the problem of poor phone service in his electorate seriously and was appalled at its extent. Mr Hawker sent me letters of support, put relevant people in touch with me, organised assistance for me, and has continued to go into battle on COT's behalf for ten years now.

Non-connecting calls

While the politicians tried to launch a Senate Enquiry, COT continued to lobby Austel for assistance. Yet another telephone issue was affecting my business. In February 1993, I installed an 1800 free call number to encourage telephone business and experienced problems right from the start. Many calls to this number were not connecting; the caller heard only silence on the line and typically hung up. The business was potentially losing a client, but adding insult to injury, I was charged for these non-connecting calls. Even worse, in many instances, the caller heard a recorded announcement from Telstra to the effect that the number wasn't connected. I first knew this problem was occurring through people reporting their difficulties trying to reach me. After this, I checked my bills carefully.

According to Telstra's policy, customers are charged only for calls that are answered. Unanswered calls are not charged and include:

… calls encountering engaged numbers (busy), various Telstra tones and recorded voice announcements as well as calls which 'ring out' or are terminated before or during ringing.

Between February and June 1993, I provided Austel with evidence of erroneous charging on unanswered calls on my 1800 service (in fact, it went on for at least another three years after that). John MacMahon, General Manager of Consumer Affairs at Austel, wanted a record of all non-connected calls and RVAs that were being charged to my 1800 account. In order to provide that, I needed the data from my local exchange.

Both Austel and the Commonwealth Ombudsman's Office were aware that I made repeated requests of Telstra, under the rules of FOI, to provide me with the relevant data. Yet, despite the involvement of these institutions, Telstra held out on me. In the end, it was more than a decade later that I received any of the relevant information, and that was through Austel. And, of course, it was too late by then. The statute of limitations on the matter had long expired.

I did not understand then, nor do I understand why Austel, as the government regulator of the telecommunications industry, could not demand that data from Telstra.

From June 1993, I had proof that Telstra knew the faulty billing in the 1800 system was a network problem from its inception.[12]



Chapter 3

The Briefcase


I should have known better. It was just another case of 'No fault found.' We spent some considerable time 'dancing around' a summary of my phone problems. Their best advice for me was to keep doing exactly what I had been doing since 1989, keeping a record of all my phone faults. I could have wept. Finally, they left.

A little while later, in my office, I found that Aladdin had left behind his treasures: the Briefcase Saga was about to unfold.


The briefcase was not locked, and I opened it to find out it belonged to Mr Macintosh. There was no phone number, so I was obliged to wait for business hours the next day to track him down. However, what there was in the briefcase was a file titled 'SMITH, CAPE BRIDGEWATER'. After five gruelling years fighting the evasive monolith of Telstra, being told various lies along the way, here was possibly the truth, from an inside perspective.

The first thing that rang alarm bells was a document that revealed Telstra knew that the RVA fault they recorded in March 1992 had actually lasted for at least eight months — not the three weeks that was the basis of their settlement payout. Dated 24/7/92, and with my phone number in the top right corner, the document referred to my complaint that people ringing me get an RVA' service disconnected' message with the 'latest report' dated 22/7/92 from Station Pier in Melbourne and a 'similar fault reported' on 17/03/92. The final sentence reads: 'Network investigation should have been brought in as fault has gone on for 8 months.'[13]

I copied this and some other documents from the file on my fax machine and faxed copies to Graham Schorer. The next morning I telephoned the local Telstra office, and someone came out and picked the briefcase up.

The information in this document dated 24 July 1992 was proof that senior Telstra management had deceived and misled me during previous negotiations. It showed that their guarantees that my phone system was up to network standard were made in full knowledge that it was nowhere near 'up to standard'.

It is noted that Telstra's area general manager was fully aware at the time of my settlement on 11 December 1992 that she was providing me with incorrect information. This information had influenced my judgement of the situation, placing me at a commercial disadvantage, but the General Manager, Commercial Victoria/Tasmania, was also aware of this deception.

The use of misleading and deceptive conduct in a commercial settlement such as mine contravenes Section 52 of the Australian Trade Practices Act. Yet this deception has never been officially addressed by any regulatory body. To get ahead of my story here, even the arbitrator who handed down his award on my case in May 1995 failed to question Telstra's unethical behaviour.

I took this new information to Austel, and on 9 June 1993, Austel's John MacMahon wrote to Telstra regarding my continuing phone faults after the settlement and the content of the briefcase documents:

Further he claims that the Telecom documents contain network investigation findings which are distinctly different from the advice which Telecom has given to the customers concerned.

In Summary, these allegations, if true, would suggest that in the context of the settlement, Mr Smith was provided with a misleading description of the situation as the basis for making his decision. They would also suggest that the other complainants identified in the folders have knowingly been provided with inaccurate information.

I ask for your urgent comment on these allegations. You are asked to immediately provide AUSTEL with a copy of all the documentation, which was apparently inadvertently left at Mr Smith's premises for its inspection. This, together with your comment, will enable me to arrive at an appropriate recommendation for AUSTEL's consideration of any action it should take.

As to Mr Smith's claimed continuing service difficulties, please provide a statement as to whether Telecom believes that Mr Smith has been provided with a telephone service of normal network standard since the settlement. If not, you are asked to detail the problems which Telecom knows to exist, indicate how far beyond network standards they are and identify the cause/causes of these problems.

In light of Mr Smith's claims of continuing service difficulties, I will be seeking to determine with you a mechanism that will allow an objective measurement of any such difficulties to be made.

I can only presume that Telstra did not comply with the request 'to immediately provide AUSTEL with a copy of all the available documentation which was apparently inadvertently left at Mr Smith's premises,' on 3 August 1993.  Austel's General Manager, Consumer Affairs, wrote to Telstra requesting a copy of all the documents in this briefcase that had not already been forwarded to Austel.[14]

I sent off a number of Statutory Declarations to Austel explaining what I had seen in the briefcase.

On 27 August 1993, Telstra's Corporate Secretary, Jim Holmes, wrote to me about the contents of the briefcase:

Although there is nothing in these documents to cause Telstra any concern in respect of your case, the documents remain Telstra's property. They, therefore, are confidential to us … I would appreciate it if you could return any documents from the briefcase still in your possession as soon as possible.

How blithely he omitted any reference to vital evidence which was withheld from me during their negotiations with me regarding compensation.

Flogging a dead horse

By the middle of 1993, people were becoming interested in what they heard about our battle. A number of articles had appeared in my local newspaper, and interstate gossip about the COT group was growing. In June, Julian Cress from Channel Nine's 'Sixty Minutes' faxed me:

Just a note to let you know that I had some trouble getting through to you on the phone last Thursday. Pretty ironic, considering that I was trying to contact you to discuss your phone problems.

The problem occurred at about 11 am. On the 008 number I heard a recorded message advising me that 008 was not available from my phone and your direct line was constantly engaged.

Pretty ironic, all right!

A special feature in the Melbourne Age gave my new 'Country Get-A-Ways' program a great write-up. It was marketing weekend holidays for over-40s singles in Victoria and South Australia: an outdoor canoe weekend, a walking and river cruise along the Glenelg River and a Saturday Dress-up Dinner Dance with a disco as well as a trip to the Coonawarra Wineries in South Australia with a Saturday morning shopping tour to Mt Gambier. I began to feel things were looking up for the Camp.

It was too much to hope for that my telephone saga was coming to an end. A fax arrived on the 26 October 1993, from Cathine, a relative of the Age journalist who wrote the feature:

Alan, I have been trying to call you since midday. I have rung seven times to get an engaged signal. It is now 2.45 pm.

Cathine had been ringing on my 1800 free-call line. I had been in my office and there had been no calls at all between 12.30 and 2.45 that day. What was going on? (Telstra's data for that day shows one call at 12:01, lasting for 6 minutes and another at 12:18, lasting for 8 minutes). I cannot express how frustrating this was; there seemed to be no end to it in sight. But I was determined not to let the bastards get me down. Their lies and incompetence had to be exposed. That day shows one call at 12:01, lasting for 6 minutes and another at 12:18, lasting for 8 minutes). I cannot express how frustrating this was; there seemed to be no end to it in sight. But I was determined not to let the bastards get me down. Their lies and incompetence had to be exposed.

I stepped up my marketing of the Camp and the singles weekends, with personal visits to social clubs around the Melbourne metropolitan area and in Ballarat and Warrnambool. I followed with ads in local newspapers in metropolitan areas around Melbourne and in many of the large regional centres around Victoria and South Australia. I also placed ads for the Get-Away holidays in the 1993 White Pages — or rather, I tried to: the entries never made it into the telephone books. I complained of this to the TIO (the Telecommunications Industry Ombudsman), who attempted to extract from Telstra an explanation for my advertisements being left out of 18 major phone directories.

As the Deputy TIO said in his letter to me of 29/3/96, he believed his office would simply 'be flogging a dead horse trying to extract more' from Telstra on this matter. (In fact, the TIO is an industry body supervised by a board, the members of which are drawn from the leading communications companies in the country: Vodaphone, Optus and, of course, Telstra.)

Between May and October of 1993, in response to my request for feedback, I received many letters from schools, clubs and singles clubs, writing of the difficulties they had experienced trying to contact the Camp by phone. The executive officer of the Camping Association of Victoria, Mr Don MacDowall, wrote on 6 May 1993 to say that 10,000 copies of their Resource Guide, which I had advertised, had been directly mailed to schools and given away. Mr MacDowall had said the other advertisers with ads similar to mine had experienced an increase in inquiries and bookings after distributing these books. So it seemed evident to him that the 'malfunction of your phone system effectively deprived you of similar gains in business.' He also noted that he had himself received complaints from people asking why I was not answering my phone. All in all, during this period, I received 36 letters from different individuals as well more than 40 other complaints from people who had tried, unsuccessfully, to respond to my advertisements. The Hadden & District Community House wrote in April 1993:

Several times I have dialled 055 267 267 number and received no response dead line. I have also experienced similar problems on your 008 number.

Our youth worker, Gladys Crittenden, experienced similar problems while organising our last year's family camp, over a six month period during 1991/1992.

In August 1993 Rita Espinoza from the Chilean Social Club wrote:

I tried to ring you in order to confirm our stay at your camp site. I found it impossible to get through. I tried to ring later but encountered the same signal on 10 August around 7 – 8.30 pm. I believe you have a problem with the exchange and strongly advise you contact Telstra.

Do you remember the same problem happened in April and May of this year?

I apologise but I have made arrangements with another camp.

A testing situation

Late in 1993, a Mrs Cullen from Daylesford Community House informed me that she had tried unsuccessfully to phone me on 17 August 1993 at 5.17, 5.18, 5.19 and 5.20 pm, each time reaching a deadline. She had reported the fault to Telstra's Fault Centre in Bendigo on 1100, speaking to an operator who identified herself as Tina. Tina then rang my 1800 number, and she couldn't get through either. Telstra's hand-written memo, dated 17 August 1993, records the times Mrs Cullen tried to get through to my phone and reports Tina's failed attempt to contact me.

A copy of my itemised 1800 account shows that I was charged for all four of these calls, even though Mrs Cullen never reached me. All this information was duly passed to John MacMahon of Austel and, soon afterwards, Telstra at last arranged for tests on my line. These were to be carried out from a number of different locations around Victoria and New South Wales. Telstra notified Austel that some 100 test calls would take place on 18 August 1993 to my 1800 free-call service.

First thing that morning I answered two calls from Telstra Commercial, one lasting six minutes and another lasting eleven minutes, as they set up in readiness for the test calls expected that day. Over the rest of that day, there were another eight, perhaps nine calls from Telstra, which I answered. My 1800 phone account arrived, showing more than 60 calls charged to my service some days later. I queried this with Telstra, asking first how I could be charged for so many calls which did not ring, and next, why I should be paying for test calls anyway. In hindsight, I should have asked how more than 60 calls could have been answered in just 54 minutes when the statement shows that some of these calls came through at the rate of as many as three a minute.

Telstra wrote to Austel's John MacMahon on 8 November 1993, informing him that I had acknowledged answering a 'large number of calls' and that all the evidence indicated that 'someone at the premises answered the calls.' Austel asked for the name of the Telstra employee who made these so-called successful calls to my business, and I have also asked for this information, but Telstra didn't respond.

Then on 28 January 1994, I received a letter from Telstra's solicitors in which they referred to 'malicious call trace equipment' Telstra had placed — without my knowledge or consent — on my service between 26 May and 19 August 1993. This was the first I'd heard of it. This device, they explained, apparently caused a 90-second lock-up on my line after a call was answered, meaning that no further call could come into my phone for 90 seconds after I hung up.

This information put another complexity on the matter of those four calls from Mrs Cullen I was charged for in the space of a single 28 seconds and the 100 test calls from Telstra. Even supposing I could answer the phone at such a fast rate, the malicious call tracing equipment, apparently attached to my line at that time, was imposing its 90-second delay between calls, making the majority of these calls impossible. Telstra management, of course, had nothing to say about this.

What was going on? As far as I could tell, most of those 100 test calls simply weren't made; indeed, they couldn't have been made.

Late in 1994, I received two FOI documents concerning these calls. K03433 and K03434 showed 44 calls, numbered between 8 and 63, to the Cape Bridgewater exchange, nine of which had tick or arrow marks beside them. More than once, I asked Telstra what the marks represent but received no response. However, I presume that a technician made these marks against the calls I actually received and answered. A note on K03434 read:

Test calls unsuccessful. Did not hear STD pips on any calls to test no. The TCTDI would not work correctly on the CBWEX (Cape Bridgewater Exchange). I gave up tests.

The technicians themselves gave up on their testing procedure! The second series of tests conducted a year later in March 1994 fared little better. Telstra's fault data[15] notes that only 50 out of 100 test calls were successfully connected. This information was of no use to me at the time, however, as it was withheld from me until September 1997. All I was to hear in 1994 was the old refrain: 'No fault found.'

Only one official document drew attention to the incapacity of Telstra's testing regime, and this was the Austel Draft Report regarding the COT cases, dated 3 March 1994, which concluded:

Cape Bridgewater Holiday Camp has a history of services difficulties dating back to 1988. Although most of the documentation dates from 1991, it is apparent that the Camp has had ongoing service difficulties for the past six years, which has impacted on its business operations, causing losses and erosion of the customer base.

In view of the continuing nature of the fault reports and the level of testing undertaken by Telecom doubts are raised on the capability of the testing regime to locate the causes of faults being reported.[16]

This conclusion would have been a triumph for all the COT members and me — IF we had known of it. But this draft report, based upon the evidence we provide to Austel, was kept from COT members until 2007, long after it could have done us any good.

By law, this Draft Report should have been presented to the Minister for Communications, but it was never tabled or made public. The following month, the ‘final’ edited report was released,[17] with significant alterations made at the behest of Telstra — including a general (and sometimes specific) watering down of findings and the deleting of this conclusion.

The details of this draft report and the ramifications of withholding it are discussed in depth later. Suffice to say here that if I had had access to its findings in March 1994, my case would have very likely been resolved in short order. Instead, along with my fellow COT members, I was pushed into a legalistic process in which Telstra, with its teams of lawyers, held all the cards.


Chapter 4

Towards a Settlement Proposal


Telstra management was trying to force COT members into court, well aware that their highly paid lawyers would eat us alive. We became increasingly sure that this was their plan, and indeed, our suspicions were confirmed, years later, by some extraordinary documents which belatedly came our way.

The author of this internal Telstra memo to senior executives on 21 April 1993, for instance, referred to raising the issue of court with us:

That carries an implied threat not only to COT cases but to all customers that they’ll end up as lawyer fodder. Certainly that can be a message to give face to face with customers and to hold in reserve if the complainants remain vexatious …[18]

The aim could only be construed as to wear us down and ‘hang us out to dry’ as an example to others who might wish to bring future complaints. And a copy of a Telstra email dated 28 September 1993, while referring to the ‘duress that the COT members are suffering’, goes on to say:

… we can’t afford to let anything get away … our best option is still to force these cases down a legal structured path.[19]

Once Telstra management decided claimants were becoming ‘vexatious’, this was the time to threaten legal action. Behind its public face of a supposedly benevolent, government owned corporation acting for the good of the public — an organisation Australians were being exhorted to trust with radio and television advertisements bombarding us night and day — Telstra management intended to turn legitimate claimants into ‘lawyer fodder’ if they persisted with their claims.

And suppose there was any remaining doubt as to Telstra’s attitude to complainants. In that case, I offer this from an investigation by the Senate Estimates Committee into Telstra’s conduct during the COT arbitrations in 1994, where Senator O’Cheer and Senator Schacht are asking questions of Telstra whistle-blower Lindsay White:

Mr White: In the first induction – and I was one of the early ones, and probably the earliest in the Freehill’s area – there were five complainants. They were Garms, Gill, and Smith, and Dawson and Schorer. My induction briefing was that we – we being Telecom – had to stop these people to stop the floodgates being opened …

Mr White: There was never any reference to time, ‘as quickly as possible,’ but the induction process was, as I said before, that the first five had to be stopped at all costs.

Senator SCHACHT: … Can you tell me who, at the induction briefing, said ‘stopped at all costs’?[20]

Mr White named the same Telstra technician who, two years previously, had submitted false evidence to the arbitrator when advising him that Telstra’s service verification tests conducted at my business had met all of Austel’s requirements even though Austel had advised him the testing was grossly deficient.

But again I am getting ahead of my story. In November 1993 I complained to Austel’s John MacMahon that Telstra’s General Manager (Commercial) had instructed both Graham Schorer and me to direct all future phone complaints, in writing, through a firm of solicitors in Collins St, Melbourne.[21] This strategy was intended to wear us down or force us to hire our own legal practitioner to deal with Telstra’s solicitors. The time and effort involved in documenting and following up the ongoing faults while trying to run a failing business certainly wore me down and therefore worked in Telstra’s favour. Sometimes I waited up to two weeks for a response from their solicitors.

In the meantime, I struggled to keep focus on what COT was pushing for: a Senate Inquiry into Telstra’s unethical treatment of our small group of claimants — which we finally achieved in 1997. A letter of support for the Senate Inquiry from a worker at D. Madden & Co of Warrnambool (Lawyers), dated 10 November 1993, gave added heart to my decision to fight on. (My name had been passed to Madden & Co by Mr David Hawker, the local Member of Parliament, with regard to a public meeting COT was organising.)

I am writing in reference to the proposed Senate Committee Investigation into Telstra.

As you are aware, I am employed as a telephonist with a large legal firm in Warrnambool. In the course of my employment, and particularly during the months of July and August this year, numerous service faults have been brought to my attention. These problems include:

1.        Calls being disconnected during conversation.

2.        Recorded messages informing Melbourne clients and callers that the number has been disconnected when the correct number was dialled.

3.        An engaged signal received by callers despite a number of lines being available.

4.        Complaints from callers that the line has rung out when no ringing tone has been received at the number dialled.

Our firm duly contacted Telstra on a number of occasions in an effort to have these fault rectified. However, Telstra technicians were constantly unable to identify the numerous problems and subsequently remedy our complaints.

On 12 November 1993, I faxed a copy of this letter to Telstra’s solicitors, together with more information on incorrect charging, in the course of which having occasion to write to the Collins Street solicitors:

On trying to fax you the information you received this morning I had quite some difficulty in getting all the pages through at a given time. Note the page errors which I have enclosed.

By now Austel was concerned at Telstra’s approach to our complaints, particularly their use of outside solicitors. In October 1993, Austel’s chairman Robin Davey told Ian Campbell of Telstra’s Commercial division that Austel would not be happy if outside solicitors were used in future COT matters. Mr Davey’s polite suggestion fell on deaf ears, however and, through to 28 January 1994, Telstra continued to insist that I register my complaints through their solicitors. Later, when Telstra submitted their defence of my arbitration, these same solicitors also acted as their defence counsel.

At the end of 1993 the COT group was lobbying hard on two counts. First, we were pushing for settlements in the form of a Commercial Assessment that would properly address the financial losses our businesses had suffered. This would be a specifically non-legalistic process. The Labor government of the time had endorsed it as the most appropriate path towards justice in our cases.

At the same time it seemed that there was a strong possibility that a Senate Inquiry would be set up. Two Senators in particular were pushing for this, the Shadow Minister for Communications, Senator Richard Alston, and Senator Ron Boswell. We had informed Senator Alston’s office that we were hearing from many other unhappy Telstra customers around Australia. The faults they reported indicated that problems within the Telstra network were more widespread than Telstra would have the government know. All this information we passed to Austel and to Senator Alston.

The BCI report, November 1993

As an initial step in the process towards a commercial settlement, Austel arranged for an international expert to be brought to Australia to review our claims. Bell Canada International Inc (BCI), technical telecommunications specialists from Ottawa, Canada, arrived to run tests on phones connected to the businesses belonging to the various COT members. In my case, these tests were allegedly carried out between 4 and 9 November 1993, a period when faults on my line were particularly troublesome.

At the conclusion of their tests BCI produced a report which found that Telstra’s network more than met global performance standards and that Telstra had ‘all the tools, skills and procedures it needs to detect and locate troubles reported by COT customers.’ The report said that the faults found in the course of their Cape Bridgewater testing (involving ‘more than 15,950, test calls using artificial call generating and answering equipment’) were insignificant and would not manifest in the types of problems reported by COT customers. So, the lines into the Cape Bridgewater exchange were up to world standard. Terrific.

Incredibly, BCI technicians had come halfway around the world to give an expert opinion on the Cape Bridgewater problems, and they didn’t test the Cape Bridgewater line into my business 18.5 kilometres from the Portland exchange.

In the event, it turned out they didn’t even test the lines into the Cape Bridgewater exchange, as the equipment they brought was apparently incompatible for the task. (Instead, they tested the lines into another exchange nearby, but which had nothing to do with my line.) Therefore any conclusion they produced had to be a fabrication.

I did not have this information at the time. In October 1997, the issue was raised in Senate Estimates, and Telstra was questioned as to the validity of the purported testing. Telstra affirmed the validity of BCI’s testing with supporting documentation that could only have been fabricated as I have shown on a number of grounds, not least that BCI’s equipment did not work at that exchange.[22] Was Telstra ever brought to account for this? No.

The BCI report was not acceptable to Austel on a number of grounds. Austel’s Cliff Matherson wrote to Telstra’s Commercial General Manager, spelling out its deficiencies over three pages, and ended:

… 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.[23]

Telstra, however, was not inclined to comply, and wrote to Austel’s Robin Davey:

The conclusion to be reasonably made from these events is that Austel publicly judges the BCI report ‘Fails to live up to the expectations raised by the terms of reference.’

Reasonable inferences might be drawn about deficiencies in the competence, professional standing and integrity of BCI, and the competence and integrity of Telstra and myself in the conduct of the study and representation of the findings …

Considering the above circumstances, Telstra cannot agree to attach a copy of Austel’s letter of 9 December to the BCI report if the latter is made available to the assessors nominated for the COT cases.[24]

And, indeed, in my arbitration, Telstra did use the defective BCI report to support its defence of my claims and did not attach a copy of Cliff Matherson’s letter for my arbitrator.[25] The ethics of this were never addressed, either by the Hon Richard Alston, Minister for Communication or by the TIO, though I made sure both were aware of the circumstances.

What level of shared interest may have existed between BCI and Telstra, I do not know. Letters exchanged between them in late 1994 acknowledged that the BCI tests, as reported in their Cape Bridgewater report of 10 November 1993, were problematic. (I did not, of course, have access to these letters then; it was several years later before they were provided to me.)

In a letter to Mr Kealey of Bell Canada, Telstra referred to the tests run from the Richmond digital exchange to the Portland exchange test line. These tests detailed in section 15.23 of the BCI report as ‘impracticable.’[26]  This was (at least partly) because Telstra were themselves conducting ‘NEAT’ testing to the same test line in Cape Bridgewater, at the same time on the same days. The BCI test report[27] shows that all their testing took place between 28 October and 8 November, between 8 am and 10 pm, with the exception of a single day.[28]

Under those circumstances, it was not possible for either set of tests to provide accurate results. This is because, as Telstra’s letter to Austel itself explained,[29] each NEAT test takes up to 100 seconds and, while it is occurring, no other test of any kind can take place. And, just for the sake of argument supposing it could, the BCI tests needed 15 seconds between each call to reset the system, otherwise the second call would get a false engaged signal. Examining the test reports from both Telstra and BCI, it is glaringly apparent that there was nowhere near enough time to fit in the calls listed. The BCI report alone shows a total of 1675 + 328 calls made to the exchange test number at Cape Bridgewater from two separate locations in the Melbourne metropolitan area, over the same time period. This means the BCI testing could not have taken place at the time claimed in their report. My conclusions here are confirmed in a technical report prepared at the request of COT in 2007 by Brian Hodge, who on a number of grounds concluded that the Bell Canada tests could not have been performed as stated.[30] (Mr Hodge had been a senior technician for Telstra for nearly 30 years before becoming a freelance telecommunications consultant.)

Whether the BCI Report was falsified or its inaccuracies were the result of confusion or incompetence, I cannot say. Certainly, a culture of confusion surrounded both BCI and Telstra’s reporting. Even Austel was confused. In its COT Cases report I found:

Telstra’s more recent assessment of the effect of the Cape Bridgewater RCM fault on Mr Smith’s service not only conflicts with the contemporaneous report quoted in paragraph 7.31 above, but also does not accord with Telstra’s contemporaneous GAPS record for September 1992 which shows a significantly higher complaint rate of ‘call drop out’ and ‘no ring received’ for customers who were reliant on the defective plant than those dependent on the remainder of the Cape Bridgewater RCM.[31]

In June 1994 I challenged Telstra to prove that I was wrong in my allegations about the inaccuracies of the BCI report. Their silence was as usual deafening.

Two weeks after my arbitration had been completed and my appeal time had totally expired I received key FOI documents confirming precisely my suspicions about the BCI testing. A letter dated 6 September 1994, from Telstra to Bell Canada, states:

Specifically, the start and finish times for the test run from Richmond digital exchange (RCMX), test line 03 428 8974, to Portland exchange, Cape Bridgewater RCM (CBWR) number range, test line 055 267 211 (detailed in section 15.23 of the report) are impracticable. The number of calls made during the test run could not have been completed within the time span shown and the test run would have clashed with other test runs performed within those times.[32]

In fact, I believe the statement made was based on my correspondence on the matter. An internal Telstra email (which I did not see until several years later), headed ‘Smith Query on BCI Tests’, supports this:

Mr Smith is correct in the suggestion implied in his query that the test results recorded in the ‘Addendum – Additional Tests’ part of the BCI report to Telecom, 1 November 1993, are impracticable.[33]

I wrote to BCI in Canada three times regarding the errors in their test report but never received a reply.

Telstra knew from the start how unreliable was the BCI report they provided to the Senate in 1993 to support their assertion that their network into the Cape Bridgewater exchange was up to world standard. In fact, Telstra continued to mislead the Senate for many years about the true standard of their network.[34] And it was not only Telstra. Austel had been the first to bring up the deficiencies in the BCI report. It could have spoken out publicly against Telstra’s misuse of the report in the arbitrations, but it never did.

Of course, any ordinary punter reading BCI’s report would be ready to believe that Telstra’s phone network was up to standard because BCI is an international, highly regarded communications company. Because BCI said that thousands and thousands of test calls were made to the exchange, my phone was connected to a 99.5% positive result. The first conclusion of the ordinary punter would have to be that my claims were unsubstantiated, even wacky.

But these ‘thousands’ of calls were not made, could not have been made as I have shown, and Telstra knowingly provided a flawed document to support their defence. This is classified as perjury in a legal process. So why hasn’t Telstra been brought to account for their actions?

For years I have canvassed the Communications Minister and the TIO to have the BCI report withdrawn from Telstra’s defence, but my requests have fallen on deaf ears. The TIO and the various government ministers I have notified of the problems with this report have failed in their Duty of Care — they should have ensured this report was withdrawn from the Public Domain as soon as they were alerted to the serious flaws it contained.

COT is vindicated by audit

For all its faults, Austel was trying to be the honest broker, and it pressured Telstra to commission an audit of its fault handling procedures. Telstra engaged the international audit company of Coopers & Lybrand to report on its dealings with complaints like those raised by COT members. Coopers & Lybrand’s report conveys serious concern at the evidence we presented of Telstra’s unethical management of our complaints.

The Coopers report did not go down well with Telstra. The Group Managing Director of Telstra wrote to the Commercial Manager:

… it should be pointed out to Coopers and Lybrand that unless this report is withdrawn and revised, that their future in relation to Telstra may be irreparably damaged.[35]

These are strong words from the most senior manager below the CEO of a corporation that had a monopoly on the telecommunications industry in Australia. Austel tabled the Coopers & Lybrand report in the Senate, but with some significant changes to what had appeared in the draft report. Regardless of those changes, Coopers were still damning in their assessment to what had happened to the COT Cases.

The following points are taken directly from the Coopers & Lybrand report:

2.20    Some customers were put under a degree of pressure to agree to sign settlements which, in our view, goes beyond normal accepted fair commercial practices.

2.22    Telstra placed an unreasonable burden on difficult network fault cases to provide evidence to substantiate claims where all telephone fault information that could reasonably determine loss should have been held by Telstra.

(2)       Fault handling procedures were deficient in terms of escalation criteria and procedures, and there is evidence that in some cases at least, this delayed resolution of these cases.

3.5      We could find no evidence that faults discovered by Telstra staff which could affect customers are communicated to the staff at business service centres who have responsibility for responding to customers’ fault reports.

We COT four at last felt vindicated; we were no longer alone in claiming that Telstra really did have a case to answer.

A Fast Track (Commercial Assessment) Settlement Process

To summarise. Senators Alston and Boswell had taken up COT’s cases with Telstra and Austel in August 1993, saying that if they were not swiftly resolved there would be a full Senate Inquiry. Telstra agreed to cooperate, and Austel was authorised to make an official investigation into our claims.

As a result of their investigation, Austel concluded that there were indeed problems in the Telstra network and that the COT four had been diligent in bringing these issues into the public domain. It looked like four Australian citizens, without any financial backing, had won a significant battle. Sometimes, we thought, David wins over Goliath, even in the twentieth century.

Because we were all in such difficult financial positions, Austel’s chairman, Robin Davey, recommended that Telstra appoint a commercial loss assessor to arrive at a value for our claims. These claims had already been found generally to be valid in Austel’s Report,[36] and it only remained for an assessor to determine an appropriate settlement based on the detailed quantification of our losses.

This ‘Fast Track Settlement Process’ was to be run on strictly non-legal lines. This meant we were not to be burdened with providing proof to support all of our assumptions, and we would be given the benefit of the doubt in quantifying our losses. This was the process Austel specifically deemed appropriate to our cases. Telstra was to give us prompt and speedy access to any discovery documents we needed to enable us to complete our claims as quickly as possible.

Telstra also agreed that any phone faults would be rectified before the assessor handed down any decision regarding payouts. After all, what good would a commercial settlement be if the phone faults continued? At last we began to feel we were getting somewhere. Robin Davey also assured us that any costs we might incur in preparing our claims would be considered as part of our losses, so long as our claims were proved. However, he would not confirm this assurance in writing because, he explained, it could set an unwanted precedent.

Telstra was anxious about setting precedents. On 18 November 1993, Telstra’s Corporate Secretary had written to Mr Davey pointing out that:

… only the COT four are to be commercially assessed by an assessor.

For the sake of convenience I have enclosed an amended copy of the Fast Track Proposal which includes all amendments.

To facilitate its acceptance by all or any of the COT members I have signed it on behalf of the company. Please note that the offer of settlement by this means is open for acceptance until 5 pm Tuesday 23 November 1993 at which time it will lapse and be replaced by the arbitration process we expect to apply to all carriers following Austel recommendations flowing from this and other reviews.[37]

In effect, we four COT members were given special treatment in terms of having a commercial assessment rather than the arbitration process. By this time Austel was dealing with another dozen or so COT cases. We four were being ‘rewarded’ for the efforts we had made over such a long period of suffering business losses. On the other hand, we were also being pressured by this rush — we would lose the option for a commercial assessment if we didn’t sign by 23 November, a mere five days away. The problem was, we were reliant on the supporting documents we needed for our claims. For these we were dependent on Telstra’s good will, and their track record gave us no confidence in that. We were also concerned about the lack of written assurance regarding compensation for preparational and other expenses.

On 22 November we turned for advice to Senator Alston, Shadow Minister for Communications. His secretary, Fiona, sent him an internal memo headed ‘Fast Track Proposal’, in which she conveyed our concerns:

Garms and Schorer want losses in Clause 2(c) to include its definition, ‘consequential loss arising from faults or problems’ although Davey verbally claims that consequential losses is implied in the word ‘losses’ of which he has given a verbal guarantee he will not commit this guarantee to writing.

COT members are sceptical of Davey’s guarantee given that he will not commit it to writing. On top of this, COT alleges that Telstra, in the past, has not honoured its verbal guarantees and so does not completely trust Davey.

COT want your advice whether or not COT should demand that clause 2(c) include a broader definition of losses to include consequential losses.

COT was hoping for your advice by tomorrow.

There was no response from Senator Alston.

Graham, Ann, Maureen and I signed the FTSP the following day, hoping we could trust Robin Davey’s verbal assurances that consequential losses would be included and that Telstra would abide by their agreement to provide the necessary documents. I included a letter with the agreement, clearly putting my expectations of the process:

In signing and returning this proposal to you I am relying on the assurances of Robin Davey, Chairman of Austel, and John MacMahon, General Manager of Consumer Affairs, Austel, that this is a fair document. I was disappointed that Mr Davey was unwilling to put his assurances in writing, but am nevertheless prepared to accept what he said.

I would not sign this agreement if I thought it prevented me from continuing my efforts to have a satisfactory service for my business. It is a clear understanding that nothing in this agreement prevents me from continuing to seek a satisfactory telephone service.

Despite nagging doubts, we felt a great sense of relief once we had sent off the agreement. The pressure on all four of us had been immense with TV and newspaper interviews as well as our ongoing canvassing of the Senate. And I had never stopped hammering for change in rural telephone services, at least in Victoria.

In December 1993 David Hawker MP, my local federal member, wrote to congratulate me for my ‘persistence to bring about improvements to Telecom’s country services’ and regretted ‘that it was at such a high personal cost.’

This was very affirming, as was a letter from the Hon. David Beddall MP, Minister for Communications in the Labor Government, which said, in part:

Let me say that the Government is most concerned at allegations that Telecom has not been maintaining telecommunications service quality at appropriate levels. I accept that in a number of cases, including Mr Smith’s, there has been great personal and financial distress. This is of great concern to me and a full investigation of the facts is clearly warranted.

A number of other small businesses in rural Australia had begun to write to me regarding their experiences of poor service from Telstra detailing problems with their phones and various billing issues. I contacted Telstra management myself on a number of occasions, putting on record my requests for these matters to be resolved. I believe this was a responsible reaction to the letters I was receiving.

Rural subscribers wrote to TV stations and newspapers supporting my allegations that, with regard to telephone services, rural small-business people and the general public suffered a very bumpy playing field compared to our city cousins. David M. Thomson & Associates, Insurance Loss Adjusters in Ballarat, wrote to the producer of Channel 7’s ‘Real Life’, a current affairs program:

I have watched with interest the shorts leading up to tonight’s program as I have similar problems to the man at Cape Bridgewater.

Our office is located in Ballarat and due to Telstra structure the majority of our local calls are STD-fee based.

On many occasions we have been unable to get through to numbers we have dialled, often receiving the message ‘This number is not connected’ or similar messages which we know to be untrue.

Clients report that they often receive the engaged signal when calling us and a review of the office reveals that at least one of our lines was free at the relevant time.

We have just received our latest Telstra bill which in total is up about 25–30% on the last bill. This is odd because our work load in the billing period was down by about 25% and we have one staff member less than the previous billing period.

A letter to the Editor of Melbourne’s Herald-Sun, read:

I am writing in reference to your article in last Friday’s Herald-Sun (2nd April 1993) about phone difficulties experienced by businesses.

I wish to confirm that I have had problems trying to contact Cape Bridgewater Holiday Camp over the past 2 years.

I also experienced problems while trying to organise our family camp for September this year. On numerous occasions I have rung from both this business number 053 424 675 and also my home number and received no response – a dead line.

I rang around the end of February (1993) and twice was subjected to a piercing noise similar to a fax. I reported this incident to Telstra who got the same noise when testing.

(Because of a number of reports regarding this ‘piercing noise’, Ray Morris from Telstra’s Country Division arranged to have my service switched to another system. Unfortunately this did not help.)

TV stations reported that their phones ran hot whenever they aired stories about phone faults. People rang from all over the country with complaints about Telstra’s service. This support from the media and the general public boosted our morale and gave us more energy to keep going as a group. We continued to push to have these matters addressed in the Senate.

Muzzling the media

We were getting a good amount of media coverage, even though it appears likely that some journalists were being asked by Telstra to ‘kill’ certain stories.

A memo between executives within Telstra back in July, entitled ‘COT Cases Latest ’, states, in part:

I disagree with raising the issue of the courts. That carried an implied threat not only to COT cases but to all customers that they will end up as lawyer fodder. Certainly that can be a message to give face to face to customers to hold in reserve if the complainants remain vexatious.[38]

We are left to wonder how many Telstra’s customers like the COT Cases, who once they went into arbitration and/or mediation, ended up as lawyer fodder with broken homes and businesses destroyed?

A TV news program was also a target:

Good news re Channel —— News. Haven’t checked all outlets but as it didn’t run on the main bulletin last night, we can be pretty certain that the story died the death. I wish I could figure which phrase it was that convinced —— not to proceed. Might have been one of ‘(name deleted) pearls.[39]

The name deleted was Telstra’s Corporate Secretary at the time. I have omitted the identity of the TV station and reporter. We too can only wonder what it was that convinced a respected journalist to drop a story.

It transpired that the same area general manager who deliberately misinformed me during the settlement process in 1992–93 was one of the two Telstra staff appointed to ‘deal with the media/politicians’ regarding COT issues. Would she misinform the media the way she misinformed me, I wondered.

A memo between executives within Telstra back in July1993, entitled ‘Cot Wrap-Up’, states, in part:

I think it should be acknowledged these customers are not going to become delighted. We are dealing with the long-term aggrieved and they will not lie down.

Further, I propose that we consider immediately targeting key reporters in the major papers and turn them on to some sexy ‘Look at superbly built and maintained network’ stories.

I advise that Clinton be targeted for some decent Telstra exclusive stories to get his mind out of the gutter. Prologue Evidence File No 24 to 39

We ‘long-term aggrieved’ are left to wonder just who ‘Clinton’ was and why his mind was considered to be in the gutter.

Another most startling document which I received long after my arbitration Telstra FOI folio 101072 to 10123 titled “In-Service Test Performance for The Telecom Australia Public Switched Telephone Service (Telecom Confidential) notes:

“The performances tabulated below have been formulated to aid dispute investigation and resolution. The information contained herein is for internal Telstra Corporation use only and must not be released to any third party, particularly AUSTEL.” (refer 101072 Arbitrator File No 63)

If AUSTEL had known that this document included the words“must not be released to any third party, particularly AUSTEL”, perhaps their public servants might not have perjured themselves in defence of Telstra’s arbitration claims that all the Service Verification Testing at my business on 29 September 1994 had met all AUSTEL’s specifications? And I believe those public servants certainly did perjure themselves, not only in their 2 February 1995 letter but again in the third COT cases quarterly report to the communications minister, the Hon Michael Lee MP. Refer to Main Evidence File No/2 and File No 3 which confirms that, at my premises at least, Telstra definitely did not carry out their arbitration Service Verification Testing (SVT) to AUSTEL’s mandatory specifications, at all.

Why didn’t AUSTEL on behalf of the government advise the arbitrator of these untruths?

During this story as well as on my website, I have raised the issue of the government communications regulator writing to Telstra before the COT arbitrations began to warn them that the government would be quite concerned if a certain legal firm had any further involvement with the COT settlement/arbitration process. I also raised my concern when the arbitration agreement faxed to the TIO’s office on 10 January 1994 bore the abbreviated name of this very same legal firm, despite the government assuring us this firm would NOT have a continuing role to play.

This FOI document (refer to Arbitrator File No/80), dated in the month of September 1993, was released to me by Telstra under FOI too late for me to use in my arbitration claim may well have persuaded the arbitrator to have allowed me more time to access documents from Telstra. As this document was released to me after my arbitration, one would have to assume it relates to my ongoing telephone problems i.e.

“All technical reports that relate to the customer’s service are to be headed “Legal Professional Privilege”, addressed to the Corporate Solicitor and forwarded through the dispute manager.”

This Legal Professional Privilege document must be related to the threats I received from Telstra that if I did not register my phone complaints with these same lawyers (in writing) then Telstra would not investigate those complaints.  

Threats, and more threats continued unabated throughout this terrible Telstra ordeal.


Chapter 5

Sold out


On 17 January 1994, the Telecommunications Industry Ombudsman (TIO) distributed a media release announcing that (name deleted) would be the assessor to the four COT Fast Track Settlements processes. The TIO did not say that, as I had feared, Telstra was not abiding by their agreement: they were not supplying us with the discovery documents critical for establishing our cases.

Telstra was treating us with sheer contempt, and in full view of the TIO and assessor. We were beginning to believe that no single person, and no organisation, anywhere in Australia, had the courage to instigate a judicial inquiry into the way Telstra steamrolled their way over legal process.

To be fair, Austel’s chairman, Robin Davey, expressed his anger to Telstra about their failure to supply us our necessary documents, but it was to no avail. By February 1994, Senator Ron Boswell asked Telstra questions in the Senate, again to no practical avail. (Questions about this failure to supply FOI documents were raised in the Senate on a number of occasions over the following years, by various Senators, whose persistence ultimately paid off for some members of COT but, unfortunately, not for me.)

Worse than this, however, was a new problem for us COT four. The assessor had somehow been persuaded (presumably by Telstra) to drop the commercial assessment process he had been engaged to conduct and adopt instead an arbitration procedure based on Telstra’s arbitration process. Such a procedure would never be ‘fast-tracked, and was bound to become legalistic and drawn out. Telstra knew none of us had the finances to go up against its high-powered legal team in such a process. This was the last thing we COT members wanted. We had signed up for a commercial assessment and that’s what we wanted.

Graham Schorer (COT spokesperson) telephoned the TIO, to explain why the COT four were rejecting the arbitration process. Our reasons were dismissed. The TIO said he had been spending too much time on his role as administrator of our FTSP; that his office had already incurred considerable expense because of this role (Telstra was slow in reimbursing those expenses). He went onto say that his office had no intention of continuing to incur expenses on our behalf. He told Graham that if we did not agree to drop our commercial agreement with Telstra, Telstra would pull out all stops to force us into a position where we would have to take Telstra to court to resolve our commercial losses.

Moreover, if we decided to take legal action to compel Telstra to honour their original commercial assessment agreement, he (the TIO) would resign as administrator to the procedure. This action, he insisted, would have forced an end to the FTSP and left us with no alternative but to each take conventional legal action to resolve our claims.

The TIO had sold us out.

We implored the TIO to let us continue with the original FTSP agreement, but our pleas fell on deaf ears. Austel was no help either, and by April 1994, we had no choice but to prepare ourselves for an arbitration process. The first step was to familiarise ourselves with the rules of arbitration, unaware that Telstra’s lawyers had drafted them.

We had had been told, Austel had been told, and the Senate had been told that the arbitration agreement rules had been drawn up specifically for the purpose, independently of Telstra, by the President of the Institute of Arbitrators of Australia. We asked for a copy of these rules, which had already, apparently, been supplied to the TIO’s office, but the TIO refused our request, saying that it was ‘irrelevant to our cause’ More than once we asked the TIO for a copy, to no avail. We were told we should trust the arbitrator. And so, foolishly, we did. We really had no choice. We were all exhausted, stressed and clutching at straws. Singly and as a group we were vulnerable to the mute force of Telstra’s corporate power.

The rules included a confidentiality agreement that prevented anyone involved in the arbitration process from discussing the conduct of the arbitration process. In other words, if either party committed an offence of a criminal nature, this confidentiality clause would effectively stop an investigation, thereby allowing a cover-up. In my case, even though the TIO and the arbitrator were aware Telstra had perverted the course of justice during my arbitration, this confidentiality clause has so far stopped any investigation into this unlawful conduct. 

Signing for arbitration, April 1994

On 21 April 1994 when we signed the documents to launch the new arbitration procedure, we still hadn’t seen the rules of arbitration. Not only did we want to see what we were in for, we wanted to make sure that the rules really were different from Telstra’s ‘proposed rules’. Our concerns were of no interest to the TIO however and so, as lambs to the slaughter, we signed on the dotted line. Later we discovered that the set of rules that had been supplied to the TIO’s office was actually headed "Telstra Corporation- Limited 'Fast Track' Proposed Rules of Arbitration". No wonder he had not wanted us to see it. The assurance we had been given as to the drafting of the rules had been a complete lie. Was anybody interested? I don’t need to give the answer to that.

My time now was focused on preparing my case for arbitration. In April 1994, Austel released its report on the COT cases,[40] and I used its findings and recommendations as a basis for my claims. I thought its findings in relation to my case were a lot milder than the original submissions I had made, but I learned that Austel had apparently had to tone it down because Telstra had threatened to enforce an injunction tying the report up for years. Austel had agreed to the amendments demanded by Telstra so that we COT four could have access to information in the report to prepare our claims. I did not know then of the ‘secret’ draft that I mentioned at the end of Chapter Three. This I did not discover until 2007.

In the meantime though, the Austel Report did confirm something for me. While I was hearing a constant refrain of ‘No fault found’ from Telstra, technicians were recording the truer picture. On occasions when I had rung to report the phone ringing once or twice, followed by no connection, officials had refused to acknowledge the fault, but in its report, Austel showed a different story:

In the period February to April 1993 Telstra staff responding to complaints lodged by Mr Smith of the Cape Bridgewater Holiday Camp recorded in their notes that there was a fault known to exist in AXE (digital) switching equipment which could give rise to a single burst of ring, followed by a busy tone to a caller and dial tone to the called party.[41]

This was supported by quotes from technicians on the complaint forms:

‘This problem occurs intermittently throughout the network and although it is recognised as a problem there appears to be no one person or group involved in resolving it.’

‘I believe this may be tied up with the axe network problem which gives only one burst of ring and the calling party gets busy tone.’[42]

A new fault

Even as I began to assemble my claims, there was a new fault to include. This was the ‘hang-up’ fault. While Telstra was refusing to send me documentary evidence for my claim, I was ringing their engineers about testing this hang-up fault, creating no doubt more evidentiary material that would be denied to me.

Since August 1993, I had complained to Telstra that customers and friends alike were commenting on the peculiar behaviour of my direct line, which was also a fax line. After I had hung up from calls I had initiated, they could (if they were slower to hang up) still hear me moving around the office. Because of all the other problems I was dealing with, I hadn’t paid much attention to this, but I needed now to come to grips with it.

On 26 April 1994, I phoned Cliff Matherson, a senior engineer at Austel, who suggested we carry out a series of tests. First, I was to hang up and count out loud, from one to ten, while he listened at his end. I did this; he heard me right through to the number ten and suggested we try it again but count even further this time. Again, he could hear me right through the range I counted. Next, he suggested I remove the phone from that line and replace it with the phone connected to my other line (they were both the same Telstra phones, Exicom model T200). We repeated the test, with the same results. According to Mr Matherson (and it was also apparent to me) this proved that the fault was not in the phone itself, but somewhere in the Telstra network. His next suggestion was that I ring Telstra, which I duly did.

I explained to the Telstra engineer that I could count to 15 or more after hanging up, and that the person at the other end could hear me. I didn’t mention that I had tested two different phones because I was well aware that Telstra had a strong inclination to blame the customer’s equipment first. I was interested to see what he would come up with first.

I performed the same tests with the Telstra engineer, with the same results, and he promised to send a technician to collect the phone the next day. An internal email in March 1994 shows that Telstra’s engineer was aware, before the phone was even tested, that heat in the Cape Bridgewater exchange was causing the fault; the email also adds to the evidence that Telstra was aware of phone faults in the exchange, even while I was preparing my claim for arbitration.

I am concerned to note that heat may be part of the problem. I had occasion earlier this year to get involved in another ‘ongoing’ case involving an RCM with a heat problem at Murrumbateman (just outside Canberra). I do note, that one of the symptoms from the Murrumbateman case was ‘Not Receiving Ring,’ something Alan Smith at Cape Bridgewater has been complaining about for some time.[43]

When my Telstra account is compared with Telstra’s data for this period, the call hang-ups and incorrect charging were occurring from at least August 1993 right up until the phone was taken away on 27 April 1994. The phone itself was an Exicom, manufactured in April 1993, and later proved to be a player in one of the many sub-plots of this saga. But that story comes later.

Preparational costs


In May 1994, A huge bundle of FOI documents finally arrived from Telstra, originally requested by me in December 1993, five months after they should have been provided under the then FOI Act. The legality requirements under the Act states quiet clearly that those supplying that requested information had 30-days in which to release the documentation being sought.  However, Telstra has always been a law unto themselves with little the government seemed to be able to quash. ‘Wonderful,’ I thought, ‘now we’re getting somewhere.’ I was wrong. According to the FOI act, documents should be supplied in some sort of order, numbered, and preferably chronological. These documents had no numbering  system, and were not in chronological order. Many were unreadable, with so much information blanked out that they were totally worthless. This would have driven even the most hardened lawyer to the wall with frustration. How could I support my claim with material like this?

A law student to assist would have been a God send. The mountain of documents threatened to engulf me entirely, especially knowing that Telstra’s enormous legal team stood by, waiting to pounce on every slightest crack they could manufacture in the claim documents I submitted.

I sought out the TIO and his legal counsel, explaining my lack of confidence and reiterating Robin Davey’s belief that a non-legalistic hearing was the best and fairest way for us to present our cases. The TIO could only console me with ‘Do the best you can,’ while his legal counsel assured me that the process was fair.

It was at this point of time that I decided I had no choice but to seek professional help. I began by approaching a firm of loss assessors in nearby Mt Gambier who had acted for me after some storm damage at the camp some years earlier. The assessor remembered that he had had a lot of trouble contacting me by phone. After discussing my current position, I decided that my problems were outside his area of expertise. I continued my search for assistance in the Melbourne metropolitan area, approaching four different companies specialising in communications. Three didn’t even respond in writing and the fourth simply wished me luck in finding someone who would be brave enough to go up against Telstra.

After this, I approached George Close in Queensland. George had technical expertise in the telecommunications area and was already working on Ann Garms’s case. He agreed to take mine on too, observing that we would get more of an insight into how Telstra was operating this way. Once Telstra became aware that we had secured George’s services, they approached him too, with an offer of work. It would seem they were trying to close off all avenues for us. George, however, at 70 years of age, was having none of that. He replied to Telstra that it would create a conflict of interest and, bless his beautiful heart, he declined their offer.

I also needed someone to help put the whole claim together. Finally, I located Garry Ellicott, an ex-National Crime Authority detective with a loss assessor company, Freemans, in Queensland. A final member of my team was Derek Ryan, a forensic accountant.

I felt cautiously optimistic. Government ministers, Austel, even the auditors, all agreed that the COT cases were right and Telstra was wrong. But we still had our backs against the wall. We were all in financial trouble and we were getting no financial assistance from anywhere. I was raising money by selling camp equipment and borrowing from friends.

When we signed on for an FTSP in November 1993, it was not for a legal arbitration. There was no allowance made for us to pay the legal professionals necessary to support our cases, and nor was such allowance made when the plan was switched on us. Had I known that professional fees would ultimately mount to over $200,000, I would never have agreed to the arbitration, even if the TIO and Telstra had held two guns to my head.

Under surveillance

I raised enough cash to bring Garry Ellicott to the camp for a few days in May 1994 to observe what was going on with the phones. During his stay, Garry commented that he believed I was being watched, or rather, listened in on. His background as bodyguard for US President, Jimmy Carter, gave him some experience in this area during his visit to Australia.

I already had experienced several instances of Telstra accumulating personal information about me — details of who rang me, when they rang and from where, when staff left my business, even my movements. In April 1994, Telstra's Melbourne fault reporting officer seemed to be aware of my movements four months in advance when he wrote an internal memo to another member of staff:

Mr Alan Smith is absent from his premises from 5/8/94 – 8/8/94. On other occasions when he has been absent there have been documented complaints received (usually months later) involving NRR[44] etc …I intend on this occasion to document his absence and file all data I can collect for the period. That way we should be prepared for anything that follows.[45]


Telstra has never explained how this Telstra fault officer came by this information, nor how he also knew I had spoken to the former Australian Prime Minister, Mr Malcolm Fraser, on the phone, and when that conversation took place.[46] (AS86 exhibit AS-CAV 48-A to 91).

This person insists I told him about this conversation but this is not true. I told him no such thing.

In an internal Telstra memo around the time of the ‘briefcase saga’, the unidentified writer, a local Telstra technician, offers to supply a list of phone numbers I had rung.[47] I had previously learned that the writer was listening in to my private conversations and, when I challenged him with this information, he informed me he was not the only technician in Portland listening in.

Not long into our arbitrations, Graham Schorer (in his official role as COT spokesperson) received two phone calls within a couple of days, both from young people. They told Graham they knew we were in arbitration with Telstra and wanted to alert him to what they had discovered when they hacked into Telstra’s email network. They had found documents confirming that there were people close to our arbitration – as well as Telstra – who were acting unlawfully towards us. Both times they rang they asked if we would like them to send us that evidence.

Graham and I discussed the offer of the first call, but we finally said NO on the second call although we were interested in what Graham had heard. We were concerned this might be a set-up by Telstra and therefore if we agreed to accept this promising material, then both our arbitrations might be declared null and void.

Since then, Andrew Fowler and Suelette Dreyfus have each published book referring to Julian Assange’s hacking into Telstra’s Lonsdale Telephone Exchange in Melbourne, which Graham’s business and mine were trunked through. Was it Julian Assange and his friends who had contacted us? His concerns about the COT cases not getting the justice we were entitled to, certainly matches his profile.

In hindsight, we probably should have accepted that very kind offer. We might well have been able to use that evidence against Telstra all those years ago, and perhaps we would not be here writing our story 20 or more years later.

This side of the COT story can be accessed by viewing our website and clicking onto our Hacking - Julian Assange page.  

Federal Police investigation

Other members of COT also experienced this ‘voice monitoring’. In a Telstra internal memo relating to the Tivoli Theatre Restaurant, owned and run by Ann Garms in Brisbane, is the comment:

Tests looped … maybe the bug has slipped off. Looks like a job for super sleuth Sherlock Kelly? (See to exhibit 2 file Phone/fax bugging 1 to 8)

An ongoing Telstra fault record relating to the Tivoli Restaurant provides surprisingly interesting reading when it makes reference to the Federal Police investigation:

John Brereton (Fed Police) initially stated a particular person was paying money for 3 people + others in Telstra to manipulate some services … Why was Federal police stopped from investigating the Tivoli Case …

Why did John Brereton start to deny everything and then volunteer for service in New Guinea for 2 years …”

Why did AA of Protective Services initially accede to my request to borrow a Bug scanning device for the 12th Night and Tivoli, then suddenly change heart (See exhibit 1 file Phone/fax bugging 1 to 8)

In January 1994, COT members informed the Minister of Communications of our suspicions of Telstra bugging, after which things happened very quickly. The Minister ordered an investigation by the Federal Police (AFP), and on 10 February 1994 Austel wrote to the Telstra Manager in charge of the COT arbitrations:

Yesterday we were called upon by officers of the Australian Federal Police in relation to the taping of the telephone services of COT cases.[48]

On 25 February, Senator Alston, then Shadow Minister for Communications, asked Austel’s Mr Robin Davey in the Senate Estimates Committee hearing on COT issues:

Mr Davey, Why did not Austel immediately refer COT’s allegations of voice recording to the Federal Police instead of waiting for the Minister to refer the matter to the Attorney General and then on to the Federal Police?[49]

Be that as it may, when the AFP interviewed Austel, they were provided with documents showing that Telstra had listened in to my phone conversations.

In a letter to Telstra in February 1994, John MacMahon, General Manager, Consumer Affairs, Austel, acknowledges receipt of nine audio tapes from Telstra and notes that these tapes, which are related to the ‘taping of the telephone services of COT Cases,’ had been passed on to the AFP. No warrant was ever issued by the Federal Court for this taping, neither was a warrant issued in either of the Australian states in which the taping took place. Clearly, therefore, this taping was carried out unlawfully. Further, it was carried out during a legal resolution process involving the COT members.

Despite these investigations, no findings of Telstra’s surveillance or monitoring activities have ever been officially presented. At the time of writing, Telstra has still not been held to account, even for those which took place when Telstra was in arbitration with me. If the AFP or the government had pursued these questions, I would not still be searching for answers today.

On a number of occasions during 1994 I was interviewed by the AFP on this matter, and while they were unable to show me the documents and tapes Austel had given them, it seemed to me they were taking my problems with Telstra and my arbitration seriously. In one interview, I showed them an FOI document which conveys that the writer knew where the caller usually rang from even though, on this occasion, the caller was phoning from a different number, ‘somewhere near Adelaide’. The police were concerned about how a caller was able to be identified if he called from another number.

Constable (name deleted) of the AFP affirmed for me that Telstra had provided them with evidence of this ‘live monitoring’, which had gone on for some time:


… you were live monitored for a period of time. So we’re quite satisfied that, that there are other references to it.[50]  

Senator Alston also put a number of questions on notice for the Senate Estimates Committee, to be answered by Telstra. These are the questions most pertinent to the COT claimants:

5.    Could you guarantee that no Parliamentarians, who have had dealings with ‘COT’ members, have had their phone conversations bugged or taped by Telstra?

9.    Who authorised this taping of ‘COT’ members phone conversations and how many and which Telstra employees were involved in either the voice recordings, transcribing the recordings or analysing the tapes?

10.  On what basis is Telstra denying copies of tapes to those customers which it has admitted to taping?

11.  (A) How many customers has Telstra recorded as having had their phone conversations taped without knowledge or consent since 1990?

       (B) Of these, how many were customers who had compensation claims, including ex-Telstra employees, against Telstra?[51]

In all the FOI documents I have searched, I have never seen these questions answered.

Other FOI documents I presented to the Australian Federal Police show that Telstra officials were making notes on who I rang and were keeping records including the names of other organisations, clients and friends. Even my ex-wife did not escape — her name was listed also. I kept the TIO informed of such developments, but at no point did he ever make any response on the matter.

An extraordinary intervention

At the end of March 1994, I got an extraordinary phone call. Frank Blount, Telstra’s CEO, their top man, rang me, wanting to know what I thought was the underlying cause of my telephone problems. Presumably, he had taken this upon himself to find the cause of my complaints. He was understanding, respectful and courteous, and I told him I thought that both Portland and Cape Bridgewater exchanges had been suffering from congestion for years. He gave me his word that he would investigate my theory, and it turned out he was a man of his word.

‘Cape Bridgewater COT Case’, an internal Telstra email dated 6 April 1994, shows the result of his influence:

Following previous lost call analysis of the Z route between Warrnambool node and Portland AXE–R (PORX) it was decided to increment this route from 30 to 60 CCTS …

Could you please ‘fast track’ this project due to the sensitivity of the current COT case at Cape Bridgewater (off PORX).

Another, dated 7 April 1994, followed with:

At 4.55 pm on 6/4/94 I was informed by Network Ops that the route into the Portland exchange would be increased by 30%. The work was to be completed prior to midnight that day. This should alleviate any problems Mr Smith or anyone else in the area has been experiencing with congestion into the area for some time.[52]

(In fact, an extra 30 circuits into Portland (30 to 60 CCTS) represented a 100% increase in the phone route into Portland exchange, not 30%. But either way, the increase in lines was appreciated allowing more 008/1800 customers to finally connect to my business)

It needs to be remembered too that much of the business income that I lost in connection to my social and single club setup was directly related to my then-ongoing telephone free-call 008/1800 service problems and, coincidentally, many of the social club patrons who had been unable to get through to me on the phone (which meant, of course, that they couldn’t book in), came from Ballarat, Melbourne and South Australia.

On one of these many occasions, AUSTEL took up an investigation, on my behalf, and that revealed the problem I had raised with Telstra, in the past, about Ballarat’s telephone public phone system, a problem that had, until then, lasted for more then two years and, as AUSTEL actually states at point 115 AUSTEL’s Adverse Findings), if it had not been for my persistence in demanding that Telstra investigate my complaints about Ballarat’s telephone system (even though I wasn’t even living there then), this fault that turned out to be a problem in Telstra’s public phone system, would have continued to affect the Ballarat region long after the two years it had already existed in the network

Break-ins and losses

From the sublime to the ridiculous. It was also March 1994 when Graham Schorer and another COT member suffered break-ins and lost business-related documents. That made all of us a lot more vigilant. I found no evidence of a break-in, but I did notice two diaries covering the period 1987 to 1989 were missing. I decided to remove my official business diaries from my office, and from then on I transferred information to them on a weekly basis from my wall calendar and unofficial notebooks.

During his visit, Garry Ellicott and I spent five nights trying to decipher the pile of Telstra discovery documents. It was during his visit I discovered further losses: exercise books in which I kept official booking records; a number of bank statements and my bank pay-in books for 1992/93. I cannot account for these losses. It is possible they were also missing in March, and I simply didn’t notice their absence. Without these records, I was hard pressed to produce full and correct financial statements for my forensic accountant, Derek Ryan, and was reduced to scavenging information from wall calendars and other unofficial sources. When Garry returned to Queensland I got him to take the work diaries with him for safe-keeping.

The fallout from all this became evident some weeks after my oral arbitration hearing in October 1994, when the arbitrator asked for my annual diaries for assessment. Garry sent them directly to his office. Soon after that, Telstra submitted their defence of my claims. Then, two months later, in February 1995, Telstra advised the arbitrator that they had found discrepancies in my diaries, claiming I had added entries after the date that the calls and incidences recorded had actually occurred.

I have explained over many years as to how, and why, I’d had to copy fault complaint records into the diaries from exercise books, and affirmed that nonetheless, my chronology of fault events was true and correct. I have since reminded him and the arbitration project manager  that during my oral arbitration hearing I had practically begged to be allowed to submit these fault complaints notebooks (as the transcripts of this meeting show[53] (refer: AS74 exhibit AS-CAV 48-A to 91). But as the transcripts show Telstra had objected to the submission of these facts and the arbitrator had asserted, without viewing them, that they were irrelevant.

Nevertheless, when it came to his summary in relation to these diaries, the arbitrator stated: 

… I have considered, and have no grounds to reject the expert evidence provided by Telecom from Neil William Holland, Forensic Document Examiner, who examined the claimant’s diaries and because of numerous instances of non-chronological entries, thereby causing doubt on their veracity and reliability.[54] -- (In the award, at point 5.3)

I contend that if the arbitrator had allowed these notes taken from my exercise books as evidence, and provided them to Telstra’s Forensic Documents Examiner, Mr Holland would have had a clear understanding of what the exercise books really were and would have realised there was no attempt at deception. On a similar note, I suppose that some readers might be wary of accepting all I write here as truth, as I am aware that some of it seems so outlandish.

Yet during his time as Minister for Communications in the early 1990s, Senator Kim Beazley was concerned at how Telstra’s Protective Services Unit spied on its own technicians and other employees, documenting their movements while they were on sick leave, so I do not think it unreasonable that we COT members believed we also were being spied on.

For one instance, in July 1992 I had asked Telstra for a written guarantee that my phone service was up to network standard. I wrote this request to Telstra without ever mentioning the name of the bus company who had asked for the guarantee, but in 1994, among documents sent in response to one of my FOI requests, I found a copy of the letter I had written, on which the name ‘O’Meara’ had been scrawled. Had Telstra been listening to my phone conversations? If so, this was spying, way back in 1992, long before the arbitration process began. These issues of an individual’s right to privacy and a corporation’s manipulation of the system go to the core of Australian democracy.

Trying to produce a claim in some readable form when the story was so complex, multi-layered, and complicated by long-delayed access to necessary information, was extremely difficult. My phone and fax lines became life-lines to Garry Ellicott in Queensland.

When Garry attempted to ring me on 27 May 1994 on my 1800 service he twice reached a recorded announcement telling him my number was not connected before he finally got through. When Garry rang Telstra fault centre to complain about these voice messages the operator told him she could not register the fault because the complaint had to come from the customer. Garry’s response was understandably blunt. ‘How,’ he asked, ‘can the customer complain if he doesn’t know I’m trying to reach him? How can he complain if he is not aware that his incoming callers believe he’s no longer trading?’ When my telephone account arrived I had, of course, been charged for both failed calls. 

On the subject of these recorded announcements, the Austel report observed:

Monitoring equipment at the exchange will not identify this condition as the call will either not be received at the terminating exchange or it will be seen as a call existing from the exchange. Complementary equipment at the customer’s premises will not record a call being received in either of the above circumstances

I had been fighting for more than six years and still I was caught in a game of ‘catch up tennis’. As each new fault appeared I had to lodge an FOI request for Telstra data and each request would take at least 30 days to bring results. No sooner had I faxed information to the arbitrator detailing the previous month’s faults than more occurred and I had to wait, again, for another 30 days to get copies of Telstra’s records. If anyone heard my tales of frustration, they apparently didn’t care.


Chapter 6



It is time I introduced Cathy. We met in 1993 when she brought a group of underprivileged children to the camp from Ballarat. She was a very warm and competent coordinator in the field of family support. We stayed in touch after that, and she assisted me from Ballarat in various camp operations over the next year or so. Then in May 1994, she agreed to come and work at the camp while I concentrated on my arbitration. By the end of the year, we were partners.

Her assistance was timely, for in the course of preparing for my arbitration came new nightmares. I discovered things I thought I’d faxed to my advisers or to the arbitrator had not got through. I was regularly contacting Austels two nominated representatives with evidence of pages of my faxes which came out at the receiver’s end as blank pages, often with a small symbol at the top of each page, on the left or the right.

And, of course, Telstra charged me for these blanks (as it also continued to charge me for unconnected 1800 calls), each of these pages appearing on my Telstra account in terms of minutes to transmit. I asked Telstra repeatedly, in writing and through various legal processes, why these pages should arrive at the other end as blanks, but I never received an answer.

I told my arbitrator I believed he was not receiving all the faxes I was sending him. Regarding one instance, on 23 May 1994, Telstra insisted the problem had occurred because the arbitrator’s fax was busy when my fax was attempting to get through. Whatever happened to my fax, hearing a busy signal and trying again? And besides, why was I charged for the call? In fact, my phone account showed, on this day, charges for seven non-connected calls to the arbitrator’s office. The question is, where did those seven faxed claim documents end up? It is clear who benefited from their disappearance, but still, the arbitrator was not interested in investigating this.   

Because of the need to be in constant contact with Garry Ellicott and George Close, my claim advisors in Queensland, my Telstra account for this period reached more than $16,000 by May 1995. My home account was another $2000. Telstra, meanwhile, had set up a special office just to deal with the COT arbitrations, and in 1996 admitted that the COT arbitrations had, up to then, had cost Telstra in excess of $18 million. All this to fight a small group of small-business people who were looking only for Australian justice!

Meanwhile, we were asking the Commonwealth Ombudsman to investigate why Telstra would not supply our discovery documents. The longer we were kept waiting, the longer our advisors and researchers were kept waiting, and the more it cost us to participate in this so-called ‘fast tracked’ procedure. Telstra seemed deliberately delayed the supply of the discovery documents, giving them more time to prepare their defence or giving their legal unit more time with the discovery documents before our advisors saw them. Either way, it seemed to me the whole arbitration was being orchestrated by Telstra as an exercise in thwarting any investigation into their dubious conduct. Certainly an exercise in power imbalance, with the arbitrator weighing in on their side in a myriad of ways.

In June 1994, I was obliged to ask the arbitrator for extra time to prepare my claim and was allowed one extra week. By contrast, the records show that Telstra was allowed an extra 72 days. A Telstra representative was in the arbitrator’s office when Graham Schorer and I arrived with my interim claim documents on 15 June 1994. My documents were taken away by Telstra’s defence counsel. I could not understand how the arbitrator could allow Telstra access to my interim claim documents when he knew I was still waiting for vital discovery documents to complete my submission. Moreover, the arbitration rules were clear that Telstra was allowed only one month to prepare their defence of my claim, but they did not present that defence until 12 December 1994, six months later.

On 11 July 1994, Steve Black, Telstra’s arbitration resource unit, writes to Warwick Smith, 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 Telstra’s letter: -

 “if the resource unit forms the view that this information should be provided to the arbitrator.

This confirms that both the TIO and Telstra were aware that the TIO-appointed resource unit had been assigned to vet most, if not all, the arbitration procedural documents en route to the arbitrator.

If the resource unit decided a particular document was not relevant to the arbitration process, it would not be passed on to the arbitrator or other parties. This particular secret deal has been linked to further clandestine dealings and is discussed further on our website link  (see Telecommunication Industry Ombudsman/Chapter Four.  Could this secret deal be directly related to the very important 24 January 1995 arbitration letter, which is discussed later in our story which the TIO states did not exist when our exhibit file shows it did exist and was clearly received at the arbitrator’s office as the 24 January 1995 fax-footprint shows,

The Telecommunications Industry Ombudsman (TIO) is an Australian National Telecommunications Industry Regulator, which seems like a good idea except that this Ombudsman is funded by the telecommunication carriers themselves, which means that it can hardly be called impartial, on any level, but particularly when they are involved in an arbitration, and their wages are actually paid by the defendants in that arbitration!

It is also important to point out that page 5 of the Commercial Arbitration Act 1984, under Part 11 – Appointment of Arbitrators and Umpires 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 arbitration agreement the four COT Cases, signed in April, 1994 mentions only one arbitrator.  They have never seen any written agreement that allows a second arbitrator to determine what information the first arbitrator and claimants will see.

Service Verification Testing, September 1994

Meanwhile, on 29 September 1994, Telstra’s Chief Engineer brought Service Verification Testing (SVT) equipment to the Camp. Telstra was obliged to prove that there were no longer any phone problems. Right from the start, this engineer experienced major problems getting the equipment to work on any of our three separate lines. Nevertheless, he went ahead with his testing.

No calls were able to reach the camp, so Telstra technicians at the exchange were generating calls for testing purposes. Whatever the results, they had to be totally meaningless because the fact was true incoming calls were not received. On 2 October and 10 October, I complained to Telstra about these deficiencies in the verification testing and sent copies to the arbitrator, the TIO, and Austel. There was no response whatsoever to our statutory declarations.

However, six weeks later, Austel responded, writing to Telstra expressing concerns about the SVT testing process as it was conducted on 29 September.[55] The testing did not meet Austel’s mandatory specifications for testing. Telstra’s own CCAS data for this day confirms that not one of the tests carried out on my three lines met Austel’s testing requirements.[56].

Nevertheless, Telstra went ahead and presented the test results in their arbitration defence. Concluding that my services were now at network standard, along with a sworn statement by this particular engineer that the tests had met all of Austel’s requirements when Telstra's Falsified SVT Report[57] shows they did not meet those requirements at all.

I do not know what to call this act of blatant, intentional misrepresentation. Certainly not ethical, and I’m sure it was not legal. Why did I not do anything about this? Because I did not learn about it until 2002, seven years later and neatly outside the statute of limitations.

Had the arbitrator been made aware of the said deficiencies that Austel had raised regarding the SVT testing and that the testing could not have produced the mandatory success rate, the arbitrator, would have been duty-bound to find in my award.  In doing so, Telstra was operating outside their licence agreement by not supplying a level playing field to operate my business on the same terms as my competitors.

Austel, for its part, seemed quick to forget its letter of 16 November. In its quarterly report on the COT Cases to the Minister for Communications and the Arts in February 1995, it withheld its true findings and stated baldly that:

All six of the telephone services subjected to the Services Verification Tests have met or exceeded the requirements established.[58]

What happened to Austel to make it change its tune?

My oral hearing was arranged for 11 October 1994. This hearing followed the submission of the interim claim documents. It was for the purpose of determining for the arbitrator what other information each party might need to supply to assist the process — the documents I needed to access from Telstra, and vice versa. I also asked that Telstra’s failure to supply FOI documents in a proper and timely fashion be raised at the hearing.

The arbitration rules allowed me legal representation if Telstra had legal representation, but where would I find the money to pay a lawyer who wouldn’t buckle under the power of a corporation as huge as Telstra? At least 43 of Australia’s largest legal firms were, at that time, on the payroll of Telstra in one way or another, making them unavailable to any COT member.

In August, five months into the arbitration process, the TIO, in his role as administrator to the arbitration, informed me that the arbitrator himself was a senior partner in a legal firm that was also working for Telstra at the same time. I protested that this surely represented a conflict of interest, but the TIO assured me this was normal practice; he wanted merely that I confirm, in writing, that I had been informed of this situation. Five months too late. What could I do? I saw no choice but to continue with the arbitration and participate in the oral hearing.

I had been advised by the arbitrator that Telstra would not have a lawyer present at the oral hearing, which was a relief, and I went to the hearing believing this would be, more or less, a meeting of equals. How foolishly wrong I was. On Telstra’s side of the table sat two of Telstra’s top executives, both men with legal training. I felt like David up against Goliath. How could I not have known it would be like this?

During the hearing, I produced four-fault logbooks containing, amongst other things, the contact information of over-40s singles clients who had not been able to reach my business by phone. I asked to have these books accepted into the procedure. I had not submitted them earlier, I explained because the information had been given in confidence. I trusted that by submitting them directly into the care of the arbitrator, the information would be secure. The supplied books demonstrated conclusively that I had, in fact, lost business calls as a direct result of faulty phone service. It also detailed that I had also missed out on the opportunity to set up a singles club which would have been another business to augment my income and keep the camp going.

Telstra insisted that the information was not relevant and should therefore not be accepted. The arbitrator concurred, and I was not allowed to submit the logbooks. At this point, I finally admitted to myself that the arbitrator was not acting impartially, nor had he been from the beginning.

The FOI issue wasn’t even touched on in the oral hearing. The arbitrator was supposed to facilitate the timely provision of requested documents to me, and many times I had asked for his assistance in this, but none of my requests was fulfilled; I suspect he didn’t even pass them on. However, he did direct me to provide some 40 extra documents and pages of attachments and further particulars that Telstra had requested through the same discovery process. I complied on every single occasion, at my own expense, but, in return, I received none of the relevant documents I had requested. Something was very wrong with this whole process.

I had been fighting for justice for more than six years. Fighting a losing and costly battle, simply because I wanted to set up business in a rural hamlet that Telstra’s senior board saw no benefit in upgrading. The oral hearing made me realise that I was truly on my own in this: the arbitrator couldn’t be relied on to be independent. I warned the other COT members of what they, too, might face. We had been conned. The TIO’s office had assured us — and the Senate — that this would be a non-legalistic process. They were taking me to the cleaners.

Over the next two months before Telstra lodged their defence of my claim, I continued to search through all the material I had, looking for something, anything, to help improve my position, hoping to find the elusive discovery documents I needed.

Interim submission

In my interim claim, I submitted a list of 183 separate faults between late 1989 and early 1994. Most of the entries on this list included the names and addresses of the people who had registered complaints with me. I also submitted copies of another 42 examples of faults logged by Telstra’s own fault centres in one 8-month period alone, from January to August in 1993. On top of these, I included for assessment more than 70 letters I had received from people over the years, describing their difficulties in reaching me by phone. Some of these letters were written by Telstra’s own employees who had felt compelled to tell the truth about what they knew of my phone problems.

Yet despite this mass of material, the arbitrator's ‘independent’ technical resource unit said in their report that ‘... a comprehensive log of Mr Smith’s complaints does not appear to exist.’ The current 2015, Senator Barry O'Sullivan (Queensland National Party) can vouch that the material was submitted by his partner at the time, Garry Ellicott. What happened to it?

The list of letters of support written to me did not appear on the list of documents received by the resource unit. Presumably, they had not been seen by the arbitrator either. This was a bitter blow. What happened to them? (See Prologue/Chapter One)

The AFP and Mr Rumble

The Federal Police came to Cape Bridgewater to interview me in February 1994 regarding the fact that Telstra was intercepting COT case phone conversations. The evidence we COT members had assembled had convinced Austel and the Minister of Communications that Telstra had a case to answer. Under the Telecommunications Act 1991, Telstra was obliged to provide Austel, the regulator, with any data pertaining to the interception of telephone conversations with the four COT cases. Telstra had supplied nine audio tapes, which Austel then passed to the AFP.

The Federal Police wanted all documentary evidence I could supply of Telstra having intercepted my fax or telephone conversations, and I made copies of several FOI documents for them to take away. This was to have serious consequences for me.

At the end of June 1994, Telstra’s main 'thug' we shall call him 'dog' rang me about my complaints regarding the slow delivery of FOI documents I needed for preparing my arbitration claim. I had complained to the Commonwealth Ombudsman, who was now leaning on Telstra. But the 'dog' astounded me when he told me the slowness of delivery was due to Telstra needing to ‘vet’ the requested documents for any ‘sensitive material’ — because I had passed the material on to the Federal Police. This was preposterous on at least two counts. First, the slow delivery had been going on since my first request for FOI documents. Second, it was my civic, if not legal, duty to cooperate with any police investigation. It was certainly not a subject that a telecommunication corporation should have any jurisdiction over.

But that wasn’t all. The 'dog' then said that I would not be provided with any further documents if I continued to pass them on to the AFP. This I understood as a clear threat to withhold critical FOI documents necessary to support my arbitration claim. I assured him I would not. A few days later, I wrote to affirm this with the 'dog':

I gave my word on Friday night that I would not go running off to the Federal Police etc., I shall honour this statement and wait for your response to the following questions I ask of Telecom below.[59]

And indeed, I had no intention of providing the AFP with any more FOI documents. When the AFP visited me again in September 1994, I showed them a copy of my letter to the 'dog', which they found very interesting as their transcript of the interview shows:

The thing that I’m intrigued by is the statement here that you’ve given 'the dog' your word that you would not go running off to the Federal Police, etcetera.[60]

But I did, in July, write to inform the arbitrator that Telstra had threatened to withhold further FOI documents because I had supplied them to the Australian Federal Police to help with their investigations into Telstra’s interception of my telephone conversations. The arbitrator did not respond to my letter, nor did he comment when the issue was raised in parliament.

On 29 November 1994, Senator Ron Boswell asked Telstra’s Legal Directorate:

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 investigations?

Why would Telecom withhold vital documents from the AFP? Also, why would Telecom penalise COT members for providing documents to the AFP which substantiate that Telecom had conducted unauthorised interceptions of COT members’ communications and subsequently dealt in the intercepted information by providing that information to Telecom’s external legal advisers and others?[61]

That Telstra’s Legal Directorate had no answer for these two questions was understandable. That the arbitrator could not even ask the questions why I should be penalised for carrying out my civic duty in an official police investigation was not. Months before he handed down his award, my arbitrator's silence told me that the result would not favour my complaints of ongoing telephone and faxing problems.

But it is not just the arbitrator who let me, and the course of justice, down. No one in the TIO office, Austel, or the government was prepared to investigate either.

And what about the threats made against me by Telstra management before I went into arbitration that if I did not raise my phone complaints in writing with (Telstra's outside lawyers) then Telstra would not investigate those complaints.  

Why didn't the arbitrator combine these threats made against me as a serious breach against my civil liberties as an Australian citizen?

Why weren't these threats  addressed in the arbitrator's written findings?


Chapter 7

Telstra’s defence

Telstra’s response to my claim arrived on 12 December, a bound document entitled ‘Telstra’s Legal Submission (1994)’. I felt sickened before I even opened it. I still hadn’t received most of the FOI documents I had requested, and here they were, making a response based on little more than half of my submission.

That was the least of their perfidies. Here arises the infamous story of the sticky beer in the phone.

Previously, in Chapter Five, I related the story of how Mr Mathieson of Austel helped me test two different Exicom model TF200 phones on one line to determine if the ‘lock-up’ fault I had been experiencing was being caused by the phone or the phone line. These ‘lock-ups’ had meant that people on the other end of the phone could hear what was going on in my office after I had hung up. When we had completed these tests, Mr Matherson was quite adamant that we had proved that the fault was in the line because it occurred with both phones. I later acquired documents that Telstra was aware that this fault often occurs in moisture-prone areas like Cape Bridgewater.[62]

My copy of Telstra’s Legal Submission, however, included a 29-page report titled ‘T200’. This document argued that the ‘lock-up’ problem with my phone/fax had been caused by spilt beer, found inside the phone's casing.

For the record, the phone was removed from my office on 27 April 1994 but not received into Telstra’s laboratories until 10 May 1994. According to the supplied photographs, they showed the outside of the phone was very dirty and, and according to the technicians, when they opened the phone up, the inside was ‘wet and sticky’. Analysis of the wet and sticky substance showed that it was beer and the conclusion was that the ‘beer’ had caused the ‘hook switch’ to lock up.[63] So, my drinking habits were the cause of my phone problems. The technicians didn’t know that Mr Mathieson and I had tested two different phones on that line and found the same fault.

Moreover, when the phone left my office, it was quite clean — so how did it arrive at the laboratories in such a filthy state? If the ‘beer’ was not deliberately introduced, how did it get inside the phone? It certainly wasn’t even accidentally spilt there by me.

I put in a request with the arbitrator for a copy of the laboratory technician’s notes to see how they arrived at their conclusion. I explained I had appointed my own forensic document researcher to look over the documents. In response, I received another copy of the original report — another instance of one rule for COT claimants and another for Telstra. Only a few weeks before, the arbitrator had allowed Telstra’s forensic document researcher access to my personal diaries.

I cannot begin to explain the anger that simmered inside me. I needed to expose the lengths Telstra had gone to with this ‘beer-in-the-phone’ farce. I knew they had faked the evidence, but I couldn’t prove it. And no matter who I contacted about this — Senators, the arbitrator, the arbitrator’s secretary — no one cared to know.

Telstra was even saying ‘beer-in-the-phone’ was the cause of my ongoing fax problems, so I set about accessing Telstra’s technical analysis data covering the times when my fax problem was at its worst. This data showed that the ‘lock-up’ fault occurred in the network system since at least August 1993. So I asked the arbitrator to ask Telstra how ‘beer’ could stay wet and sticky inside my phone from August 1993 to May 1994.

In fact, this data wasn’t even necessary to prove my case. Telstra had supplied a new phone to replace the one they took away, and it was no surprise to me that, according to their own data, the lock-up problem remained after the ‘dirty’ phone was replaced. It was still a problem when I sold the business in 2001.

As to Telstra’s assertion that the telephone was ‘very dirty’, it is fortuitous that, just before the technician took the phone away for testing, I had attached a white label to the front advising staff this was the phone to use. It was perfectly clean, as the photo Telstra took when it arrived at its laboratory shows. They had failed to keep track of their deception. You don’t need a forensic document specialist to see the difference between the two photos provided by Telstra, reproduced here as (Main Evidence File No/17 and the Arbitrator File No/30). Yet I could find no-one willing to challenge Telstra on tampering with evidence in a legal process, which is a criminal act.

I had urgently and constantly requested the Exicom/TF200 laboratory testing results for my arbitration, which was not supplied by March 1995, so I lined up Paul Westwood, of Forensic Document Services to investigate my suspicion that Telstra’s TF200 report was fraudulent. The arbitrator, however, refused to appoint him, and there the matter remained, until November 1995, six months after my arbitration was declared final, when there came another instalment of the ‘beer in the phone’ saga.

In a bundle of FOI documents, a laboratory report showed that Telstra had carried out two investigations into my TF200. The second (on 24–26 May 1994) was two weeks after the first (10–12 May), and it proved that the first one — whose results had been provided to the arbitrator — was a total fabrication. Someone in Telstra had realised the first report was in some way dodgy and had authorised the second.

The second report, handwritten by Telstra laboratory staff, included graphs and photos, and it showed that when wet beer was introduced into the TF200 phone, it dried out completely in 48 hours. My phone, found to be ‘wet and sticky’ in the first report, had not been tested until 14 days after being taken from my office. There was no way it could have been ‘wet and sticky’ after two days, let alone two weeks.

So Telstra management knew, when they submitted that first report as part of my arbitration, that their second laboratory investigation had proved the first one was (to say the least) unreliable.[64] But even with this freshly received evidence in November 1995 (five months after the conclusion of my arbitration), the TIO refused to investigate. Receiving vital evidence which I should have received during my arbitration mattered not to those administering the COT arbitrations.

Beyond the beer in the phone deception, many other misleading statements were made under oath by Telstra’s defence unit and their technicians and included in their Legal Submission. Most disturbing of these were the signed Statutory Declarations made by some of the local technicians. They knew from experience that Telstra’s network system into the local exchange was not up to standard. These technicians who still signed these legal documents insisted everything (except for some minor, everyday type faults) had been all right during the period covered by my claim.

One local technician went so far as to say that he knew of no other business in the Cape Bridgewater area that reported the type and number of phone problems that I had. His statement even included mention of a friend, a stock farm agent, who had never had phone problems in Cape Bridgewater. When I checked Telstra’s own fault data, however, this very friend had, in fact, complained seven times in a matter of weeks during early 1994, including complaints about his fax line.[65]

Another three local technicians stated under oath that back in 1988 when I moved to the area, the old RAX exchange at Cape Bridgewater had five incoming and five outgoing lines. Any ensuing congestion would not have affected my service much during business hours. In fact, the exchange had only four lines in and out, and Telstra’s archives show congestion was a problem between the Cape Bridgewater and Portland exchanges.[66]

The worrying thing is that if these three technicians truly believed their story, they were not very good at their jobs. Someone should have noticed there were only eight final selectors!

My reply to Telstra’s defence, January 1995

By chance, it was during this time I saw the American movie Class Action, the story of a pharmaceutical company that knew the dangerous side-effects of one of its drugs but continued to sell the drug anyway. A chemist preparing a report for the company finds a flaw in the drug production, and the company chose to ‘lose’ the report rather than spend the money to correct the flaw—business as usual. What struck me about this story was how the pharmaceutical company swamped the lawyer representing the patients with thousands of documents at the very last minute. The lawyer had a very hard job finding a key report in time. According to the movie, this process of ‘burying’ important documents is called ‘dumping’.

Just before Christmas, and eleven days after they had submitted their legal defence, Telstra ‘dumped’ approximately 24,000 discovery documents on me — the very documents I had been waiting for to make my submission complete. And, of course, the material I needed was buried in masses of irrelevant documents.

Clearly, this was a ploy. Telstra thought that by supplying them after I’d made my submission, it wouldn’t have to defend those documents, especially given I had only two weeks in which to submit my reply to Telstra’s defence.

The festive season is always the busiest time for bookings. Fortunately, Cathy had, by this time, moved into the camp house. Without her assistance, I would never have survived through this time. Christmas slid past in a blur, and I found myself with still thousands of discovery documents to sort through. It was a miserable job.

On 6 January, I sent the arbitrator a list of procedural documents I needed to support my response, asking him to request these documents from Telstra. By my deadline, however, I was still waiting and had to file my response without them. I was at a loss to know where to turn for help. Again and again, I was faced with the same tactics. Stonewalling and silence. (The documents I requested did eventually turn up two years later.)

However, the arbitrator did respond to a letter I sent asking for more information about the Bell Canada report. In his reply on 23 January 1995, he said: ‘Telecom does not consider it has any further information of relevance in its possession.’ He asked me to respond to this within 24 hours in order to ‘be certain that there is no confusion between the parties as to the documentation which is being sought.’[67]

I did respond, within 24 hours, asking for all the raw data Telstra had concerning the BCI testing at Cape Bridgewater. And heard no more about it. No data, no response of any kind.

My fax account shows that my response left my office and travelled to the arbitrator’s fax machine. Twelve months after my arbitration procedure was completed, I learned that Telstra did not receive this response. Then, on 28 June 1995, I learned that the arbitrator, apparently, had not received the fax either. The newly appointed TIO, wrote to me:

Dr Hughes provided you with a copy of this submission on 23 January 1995, noting that Telecom did not consider it had any further information of relevance in its possession. (The arbitrator) then invited you, within twenty-four hours to respond to Telecom’s submission. Our files does [sic] not indicate that you took the matter any further.[68]

This level of displacement is astonishing. What happened to my fax? I might have imagined it simply got lost in the ether. In August 1995, three months after my arbitration, within a bundle of documents sent from the arbitrator’s office, was a copy of the actual letter I sent to Dr Hughes, with the fax-footprint: ‘24-01-1995 – 15:12 – FROM CAPE BRIDGE HDAY CAMP TO 036148730’. Confirming the arbitrator's office did receive it as Front Page Part One File No/2-A to 2-E shows.

Despite this irrefutable proof, the TIO’s office has refused to provide me answers to why this most important BCI letter was never acted on. Had it been, the whole outcome of my arbitration might have been different.

A visit by FHCA

In February 1995, I was visited by people from the financial arbitration unit (we shall call them - FHCA) to assess my financial losses resulting from the failures in my phone service. A representative from Telstra came separately and was delayed by poor landing conditions at the local airport. FHCA was supposed to provide a list of who they interviewed and where they went on their trip to Cape Bridgewater, and I had been led to believe that they provided just such a list to Telstra, but I never saw any documentation myself.

Under the arbitration rules, neither the resource unit, the technical advisory unit or FHCA was allowed to be alone with Telstra or with me. Still, there was not much we could do about the two-hour delay between the time the FHCA and the Telstra people arrived, except for FHCA’s solitary inspection of the general area. When the Telstra representative finally arrived, I saw FHCA’s true colours: everything I said was ignored or negated. FHCA already had fixed ideas about this case. The way they played down my business in front of the Telstra representative clearly indicated what was to come.

Bearing in mind that FHCA and Telstra were not supposed to spend time together without me, I had arranged lunch at the camp. However, my offer was declined and the others all adjourned to the Kiosk by the beach, contrary to the rules of the arbitration. What could I do? They all returned later and left together for Melbourne.

Well into 1995, I was still struggling to collate all the FOI documents I was still receiving, so late into the process, into some sort of sensible order. As I understood it, the arbitrator was not accepting any more material in support of my claim. However, I was still being charged for calls that never connected, and I hoped for another oral hearing. I phoned the arbitrator to ask for access to the technical resource unit, for their help in best presenting all this evidence of ongoing problems; I explained that I could not afford to pay my own technical adviser any longer.

The arbitrator told me that the technical resource unit would be visiting Cape Bridgewater shortly and we could discuss the presentation of my material then. Before that visit occurred, however, DMR Australia pulled out of the process and a new technical unit was commissioned by the TIO’s office: (we shall call them LS Telecommunications), run by a man who had worked for Telstra for 20 years. (DMR Australia) had pulled out because Telstra offered them valuable contracts and DMR saw a conflict of interest. I had to wonder: did Telstra deliberately set up this ‘conflict of interest’ situation? And, how could DMR pull out of a signed contract?)

Although we have addressed the following Ericsson v Lanes Telecommunications ownership in our Prologue above, it is such an important conflict of interest issues that affected most if not all the COT arbitrations. We needed to again highlight this terrible situation as we have done below.   

The TIO’s letter of 16 July 1997, to William Hunt, Graham Schorer’s solicitor advised that Lane was presently involved in a number of arbitrations noting that: ‘the change of ownership is of concern’ and that...’

The first area of concern is that some of the equipment under examination in the arbitrations is provided by Ericsson.…

The second area of concern is that Ericsson has a pecuniary interest in Telstra. Ericsson makes a large percentage of its equipment sales to Telstra which is one of its major clients.

It is my view that Ericsson’s ownership of Lane puts Lane in a position of potential conflict of interest should it continue to act as Technical Advisor to the Resource Unit. …

The effect of a potential conflict of interest is that Lane should cease to act as the Technical Advisor with effect from a date shall [sic] be determined. (See exhibit GS 296-a file GS-CAV 258 to 323)

What is just as alarming is: how long was Lane in contact with Ericsson before Ericsson purchased Lanes? Is there a link between Lanes ignoring my Ericsson AXE claim documents and the purchase of Lanes by Ericsson during the COT arbitration process?

In Chapter Seven of the AUSTEL COT Cases Report, dated April 1994, AUSTEL notes my business and a number of other COT businesses suffered major network problems associated with Ericsson AXE equipment. At point 7:40, when discussing my AXE Ericsson problems, it notes:

“AUSTEL recently became aware that Telecom (Telstra) had prepared an internal document on the subject of this AXE fault and on 21 March 1994 sought a copy from Telstra.” (See Exhibit 9 - AXE Evidence File 1 to 9)

This is the Ericsson AXE problems I wanted Lane to investigate while they were at Cape Bridgewater. Only Lane, and perhaps the arbitrator and Telstra might be able to shed some light on the subject to why neither of them would discuss these serious Ericsson AXE problems. My claim documents clearly showed the Ericsson NEAT testing equipment that Telstra used at Cape Bridgewater gave our readings that were impracticable. No one commented during my arbitration on this irritable evidence I provided to the process.

Ann, Graham and I told the TIO we did not want our claims assessed by an ex-Telstra employee and so DMR Group Canada was brought in to lead the process, with Lane merely assisting. As it turned out, however, and contrary to the written agreement given by the TIO, Lid did 99.5% of the assessments. Once more the TIO had misled the COT Cases.

One of the most important statements made by the second appointed administrator to the COT arbitrations John Pinnock, was his statement to Senate Estimates Committee on 26 September 1997 (see page 96 COMMONWEALTH OF AUSTRALIA - Parliament of Australia


Lane Telecommunications, which is one part of the technical component of the resource unit, has withdrawn from the process as a result of a conflict or perceived conflict of interest after being purchased from Pacific Star by Ericsson Australia, the major supplier of equipment to Telstra, including equipment whose performance is central to some of the claim.

What prompted Mr Pinnock to use the wording in the Senate ‘perceived conflict of interest’ when he had already written to the COT Cases lawyer stating it was his view that Ericsson’s ownership of Lane puts Lane in a position of potential conflict of interest should it continue to act as Technical Advisor to the Resource Unit’?

Senator Richard Alston, the then Shadow Minister for Communications, had challenged Ericsson’s AXE equipment. In his question on notice in the Senate on my behalf, only a month before I entered arbitration (see point 25 exhibit 4-B, in file Misleading and Deceptive Conduct File 4-A to 4-L).

The government should have halted the sale of Lane because exhibits 4-E and 4-D in Misleading and Deceptive Conduct File 4-A to 4-L show Ericsson believed the problems with its AXE equipment could represent between 15 and 50 per cent call losses in some exchanges. That is a damning admission.  

It’s important we move forward two years at this point of time in our story to the 24 June 1997, so as we can view the statements made on pages 36 and 38 of official Senate - Parliament of Australia/Hansard records. These show an ex-Telstra employee and then-Whistle-blower, Lindsay White, told the committee (under oath) that, while he was assessing the relevance of the technical information which had been requested by the COT claimants, that:

"In the first induction - and I was one of the early ones, and probably the earliest in the Freehill's (Telstra’s Lawyers) area - there were five complaints. They were Garms, Gill and Smith, and Dawson and Schorer. My induction briefing was that we - we being Telecom - had to stop these people to stop the floodgates being opened."

Senator O’Chee then asked Mr White - "What, stop them reasonably or stop them at all costs - or what?"

Mr White responded by saying - "The words used to me in the early days were we had to stop these people at all costs".

Senator Schacht also asked Mr White -"Can you tell me who, at the induction briefing, said 'stopped at all costs" .(See Front Page Part One File No/6)

Mr White - "Mr Peter Gamble and a subordinate of his, Peter Riddle. That was the introduction process”.

It is clear from Mr White's statement he identified me as one of the five COT claimants that Telstra had singled out to be ‘stopped at all costs’ from proving my claim against Telstra’. One of the named Peter's in this Senate Hansard is the same Peter Gamble who submitted a false witness statement to the arbitrator concerning the failed SVT testing at my premises on 29 September 1994. The same Peter Gamble who on 6 April 1995 arrived at my Cape Bridgewater holiday camp, and together, we collected a representative from Lane from the airport.

The three of us inspected the exchanges at Cape Bridgewater and Portland and had discussions with the local technician (the one with the stock farm agent friend who never had problems with his phone), when Telstra documents show otherwise.

While the Lane representative was in Cape Bridgewater, I attempted to raise the incorrect billing issues. But apparently, the arbitrator had instructed Lane not to assess any new claim material. I was angry, for the arbitrator had assured me that if I discovered any new information among FOI documents, that information could be presented to the technical resource unit when they came to the camp. I had worked night after night to have my evidence prepared before the technical team arrived and it was clear to me that this new information clearly supported my allegations. I was so angry, to the point of excusing myself to dry reach in my residence adjacent to the holiday camp.

Neither the Telstra official Peter nor the Lane representative was prepared to comment on this evidence during my arbitration, although I was assured that the matter would be addressed. They left shortly after this, together — and without me, which was in direct breach of arbitration rules. Who knows what private conversations may have taken place between them? On so many counts, now, I was convinced that the arbitration was a sham, with the single aim of ‘shutting me up’ to stop the floodgates being opened." That was how serious the Ericsson problem was.

But after they left I had an idea. The Commonwealth Ombudsman’s Office had been supportive of my allegations concerning Telstra’s failure to supply discovery documents in a timely manner. Throughout this whole awful saga they had, again and again, proved themselves to be impartial and concerned primarily with natural justice.

The Commonwealth Ombudsman’s Office was preparing a report on Telstra’s tardy provision of COT’s discovery documents under the FOI Act, and I guessed that it would keep a copy of every document I had faxed them or they had faxed me. I, therefore, asked them to use my 1800 number for any calls to me because I guessed they would also document any calls they made concerning my complaints. I was betting that the Commonwealth Ombudsman’s Office’s tally of those calls would not match up with my 1800 account.

And indeed, two years later, on 28 February 1997, the Commonwealth Ombudsman’s Office presented a document to Telstra, covering all communications between my office and theirs, as part of their report to Telstra’s Corporate Customer Affairs Office. This report documented all faxes to and from me and all calls to and from my office — they made 43 calls to my 1800 account.

Bingo! Over this same period, Telstra charged me for 92 calls from the Ombudsman on my 1800 account. In their investigation, the Commonwealth Ombudsman’s Office confirmed these events.[69]

So, it had been a sound idea, not that it helped my case. Telstra has still not refunded me for these wrongly charged calls at the time of writing, nor made any attempt to explain the discrepancy. Nor has this matter been investigated by the TIO’s office. However, the Commonwealth Ombudsman’s data demonstrated that incorrect charging on both my 1800 line and my fax line (in every instance, favouring Telstra) continued for at least 18 months after the arbitrator handed down my ‘award’. Since this incorrect charging was one of the issues I raised in the arbitration, and it was not addressed or included in the ‘award’, I do not consider the arbitration procedure is yet complete. I have written several letters to the TIO’s office about this matter, to no avail.

It was clear from the following statement made by Telstra in FOI folio A00354 that senior management were concerned just how bad their rural network was i.e.

I understand there is a new tariff filing to be lodged today with new performance parameters one which commits to 98% call completion at the individual customer level.

“Given my experience with customer disputes and the BCI study, this is a cause for concern. We will not meet this figure in many exchanges around Australia particularly in country areas”.

A further Telstra FOI document folio P03022 is an internal email dated 23 September noting:

“In the current climate Telecom needs to be particularly careful with its correspondence to the CoT customers. I have engaged (this legal firm) to participate on an “as required” basis in this matter and it is appropriate that all correspondence from the CoT (and near CoT) customers should be channelled through (the person I had to register my phone complaints with) for either drafting of the reply from Telecom or for the reply direct from (this same lawyer) as our agent.”(Arbitrator File No/81)

It goes on to say:

“Would you please ensure that with all customers that are, (or have the potential to become) serious complaints, correspondence is processed through (Telstra’ outside lawyers) with initial acknowledgement by the Region.”


Chapter 8

My Award


The arbitrator was due to hand down his award on 11 May 1995. Before that day, though, came the DMR/Lanes report on the technical losses and the FHCA financial report. The dire content of both these documents prepared me for a very poor final result.

DMR/Lanes report

On 2 May I received the TIO-technical report, dated 30 April 1995, on my business's phone faults over the period of my claim. Outrageously, this report left out more than half my claim documents. Despite numerous requests, the TIO would not investigate why both the arbitrator and the TIO consultants allowed so much of my claim material to be left out or authorised a supposedly independent technical resource unit to ignore claim documents in a legal procedure.

All the incorrect charging issues had been ignored, as had the issues of lost faxes and phone faults that continued throughout the arbitration process, which were even then still losing me business. Nor had they touched the ‘lost’ incoming calls, charged for but not received.

There were some concessions in the report. The TIO consultants did acknowledge that they had not assessed all my claim documents. And they did find a number of my claims to be proven and found against Telstra on a few issues, but to nowhere near the extent that could be reasonably expected based on my claim documents. For just one example, I cite material related to my gold phone, taken from a section covering the telephone exchange, referred to as RCM 1, which my coin-operated gold phone was connected to for most of the time. (The DMR/Lanes report drew on Telstra’s own data and records.)

2.2      There were consistent problems with the RCM system. Mr Smith’s services were carried on RCM No 1 until February 1994. This system had a track record of problems, and the RCM system components were the subject of several design corrections (Work Specifications). These issues were likely to cause a range of problems (as reported) over the period August 1991 to February 1993 (a period of 18 months) when Mr Smith’s services were transferred off RCM 1 and service improved. Specific problems caused are covered in later paragraphs (ref: 2.8, 2.9, 2.21).

           ASSESSMENT – Service was less than reasonable.

2.8      RCM 1 failure due to lightning damage. Lightning damage to communications equipment would be expected from time to time in this area. Reasonable service relates to the time taken to return the service to normal. A reasonable expectation would be repair within less than the 4 days actually taken.

           ASSESSMENT – Service was less than reasonable.

 2.9     Evidence of problems with services on RCM 1 had been sufficient to cause Telecom to move the CBHC services away from RCM 1 to RCM 2 and 3. Later when the RCM equipment was examined by Melbourne staff, evidence of severe error levels had accumulated on the counters in the transmission equipment (particularly RCM1). After corrective action these severe error levels were no longer accumulating.

           ASSESSMENT – Service was less than reasonable.

So far, so good. But then the report summarises the situation:

Intermittent effects on the gold phone resulted in it being removed from RCM 1 11 days after potential cause (lightning strike damage to RCM 1). At the time of removal the actual equipment fault had not been found, although testing was continuing. This seems to have been a reasonable action and timescale under the circumstances.

ASSESSMENT – A reasonable level of service was provided.[70]

So, while at 2.8, four days was deemed an unreasonable time-frame for repair, in the summing up they find eleven days was reasonable. Moreover, the ‘11 days’ is itself in error. The lightning strike occurred in November 1992 and the fault wasn’t rectified until late January 1993, which amounts to almost three months out of service, not 11 days.

But these are just details. In total, there were four paragraphs dealing with the gold phone, and in each one service was assessed as less than reasonable. And yet the summary assessment was positive. This is not even logical, let alone fair. It is incomprehensible that they gave the gold phone a positive assessment, since they acknowledge at 2.2 that RCM 1 ‘had a track record of problems’. My claim documented more than six years of continuous customer complaints about the gold phone, in diary notes and letters. Ah yes, these were among the documents they did not assess.

I challenged DMR/Lane’s assessment of my gold phone and supplied both Telstra and the TIO’s office with conclusive evidence, including Telstra’s own documentation, of continuing problems with the gold phone. To no avail. In December 1995, I had finally had enough, and I refused to pay the gold phone account until its faults had been acknowledged. Telstra’s response was to cut the phone off.

FHCA financial report

FHCA’s financial report was even more of a nightmare. It was incomplete; it did not show the workings, which resulted in their findings to downgrade my true losses by as much as 300 per cent in some areas. It was so incomplete, it was difficult to challenge it, for there was nothing substantial to grasp. The errors of logic were painfully elemental.

For instance, although the FHCA report acknowledged that my business accommodated social clubs as well as school groups —

 ‘An analysis of the clientele of Cape Bridgewater Holiday Camp shows that only 53% were in fact schools’

….(sic) it based its calculations of business losses on the lower end of my revenue base, the $30 per two overnight rates for school groups, compared to the $120 to $160 charged for the 47% that were fully catered social club patrons. Given an approximately fifty-fifty split of school and other groups, this downgraded my losses by a minimum of at least 300 per cent.

Derek Ryan, my forensic accountant, was shocked at its handling of the arbitration procedure and wrote a 39-page report to the arbitrator detailing the failings he had found in it, including actual errors. For a couple of instances:

1.        The FHCA report does not include any detailed workings so we have endeavoured to recalculate the FHCA figures given their assumptions and the base figures which were included in our report dated 21 June 1994.

           Our recalculated figures are still higher than the FHCA figures and we are unable to determine the reason for this.

2.        We believe that the FHCA report contains many inaccuracies and in the main area of loss quantification is simply wrong. The main calculation of loss has been considerably understated by an error logic.

           The error of logic appears to arise from the fact that FHCA reduce the total bed capacity by the night utilisation of 48% (to give available bed capacity) and FHCA then apply the bed occupancy rates to the available bed capacity. It is incorrect to reduce the total bed capacity by both of these factors.[71]

Derek received no response from the arbitrator, so he contacted the project manager of my claim at FHCA, to ask how he had arrived at his findings. The project manager explained that he had instructions from the arbitrator to exclude a large amount of information from his final report. This meant the so-called independent arbitrator had forced the so-called independent financial assessors to ‘doctor’ their report. Derek wrote to Senator Richard Alston, Minister for Communications and the new TIO, to express his professional disappointment with FHCA. He considered their conduct detrimental to my claim because, since their report was incomplete, he had no firm base on which to formulate his response or, indeed, to challenge the report.

Six years later, and too late to make any difference, I received from the TIO’s office a copy of a letter dated 13 February 1996, from the Project Manager of FHCA to Mr the TIO, written evidence that the FHCA financial report was incomplete: ‘...I did advise Mr Ryan that the final report did not cover all material and working notes.’[72]  I very much doubt that the TIO informed Senator Alston of this admission by FHCA.

Instead of the TIO Mr Pinnock providing this letter to me, within the statute of limitations period so I could use it in an appeal against the arbitrators’ award, Mr Pinnock concealed it until 2002 – outside the statute of limitations.

However, between 18 October 1995 and 4 October 1997, with the assistance of Mr John Wynack, director of investigations on behalf of the Commonwealth Ombudsman, I sought, under FOI, from Telstra a copy of their arbitration file on my matters. Home Page File No/82 confirms Mr Wynack did not believe Telstra’s claim that it destroyed the file. I also tried to access a copy of the same arbitration file held by the TIO office, which, as the administrator of my arbitration – under law – had to retain a copy for at least six years: until 2002. Mr Pinnock (the administrator) of my arbitration in his letter, of 10 January 1997, in response to my request, states:

I refer to your letter of 31 December 1996 in which you seek to access to [sic] 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. (See Open Letter File No 57-C)

It became obvious by this time of the February 1996 letter, that the TIO arbitration resource unit and the arbitrator had collaborated with Telstra in ensuring my singles club (my second business) would not be assessed as a separate business loss and did not take into account the higher revenue loss of my single club dollar, but only valued my losses at the lower tariff I charged for school groups. However, I wanted something more substantial – perhaps the actual working notes, which were removed from the FHCA report under instruction by Dr Hughes (see Open letter File No/45-E), and would have detailed my singles club information that I provided FHCA in February 1995. This single club material was never returned to me after my arbitration was finalised. The losses associated with my singles club patronage (which were never taken into account by the arbitrator) are also discussed in the Front Page Part Two page.

The Award, May 1995

On 11 May 1995, the arbitrator handed down his award. He found in my favour on a number of instances, but these were based only on old fault reports; he didn’t address the ongoing problems which I had constantly advised him of and which he was obliged by the terms of Austel’s COT Cases Report to address. The award seemed to presuppose that I no longer had any problems with my phone service and that all had been addressed and made up to standard. How he could have come to this conclusion is incomprehensible to me.

The award gave me little over ten per cent of my claim. After I had taken into account all the expenses, I accumulated just to bring the phone problems to the attention of Austel and the Senate and submitting my claim to the arbitrator, I was left with about four per cent.

It was not the case that my claim was inflated. Another accountant, Barry O’Sullivan from Freemans, once treasurer of the LNP in Queensland and now a senator, valued my claim at an almost identical amount.

I am not allowed to speak of the amount of the award, but there are things I can mention. In his award, the arbitrator said he ‘had to take into account the decrease in tourism’ in my area as one of the factors possibly contributing to lost business at the camp. This was outrageous; he was trying to explain my business losses in terms of a decrease in tourism, when all the objective evidence was pointing to an increase in tourism in my area.

Even the FHCA Report recorded an increase in numbers of tourists visiting the Portland region (from 1,396,000 in 1991/92 to 1,565,000 in 1993/94). This increase (which I referred to in my claim documents) was supported by figures supplied by the Department of Conservation and the Environment and by the Victorian Tourism Domestic Monitor. So on what conceivable grounds had the arbitrator decided there had been a decrease in tourism in the area?

Speaking of the FHCA Report, the losses as calculated were taken on board. The arbitrator made his award based on those faulty calculations.

The arbitrator appears to have based his award on the assumption that Telstra’s defence claims were undisputed fact. He says, under the heading ‘Faults Caused By Claimant’:

(c)     Telstra nevertheless maintains that most reported faults were attributable to mis-operation by the claimant or by his callers or to normal wear and tear on the equipment they were using.

(d)     In this regard I have noted for example, the Statutory Declaration by ——,[73] a senior technical officer (grade 1) who concluded that specific fault allegations involving the claimant’s answering machine, cordless phone, and facsimile machine could only be attributable to operator error. I have also noted a statement by ——, senior Telstra technician officer grade 2, to the effect that reported facsimile machine faults were attributable to customer error.[74]

My claim documents clearly indicated that the faults which plagued my business right through my arbitration (1994–95) and for years afterwards were NOT due to operator error. The arbitrator was treating my assertions and Telstra’s assertions completely differently. Of course, the arbitrator could not know when one of us was not telling the truth, and he could only deal with the material placed before him; but he should not have assumed, without investigation, that it was I who was the unreliable party. I find this all the more reprehensible given that I was so often forced to complain of Telstra’s deceptive or underhanded behaviour.

I knew Telstra was lying. Many of the documents cited in this book are evidence of the fact that Telstra knowingly lied in its defence of my arbitration, but at the time I needed it, I did not have the hard evidence. And even when the evidence started coming to hand, it was not accepted — not by the arbitrator, nor by the TIO, and sometimes not even by Austel. They didn’t want to know. But it was their job to want to know.

Just for the record, Telstra’s own archival material contradicts the assertions of the technical officer made under Statutory Declaration in point (d) above. The following internal fault record, in relation to my fax line (the name of the technician has been blanked due to an FOI stipulation) notes:

… rang to advise me had found several problems with the RCM system Mr Smith was previously connected to. The major problem was caused by faulty termination of resistors on the bearer block protection another problem was caused by non modified channel cards, a full report will be submitted by Len in the next week.[75]

Both the engineer the memo was addressed to, and the National Facsimile Support Centre, experienced fax problems when attempting to send faxes to my business. As far as I can tell, the technical officer committed an act of perjury in a legal arbitration process.

Whether the TIO believed this perjured information or not is irrelevant. As administrator to my arbitration, he had a duty of care to give equal attention to my claims and concerns, and this I believe he did not do. While I mainly did not have evidence to hand in the course of my arbitration, once it did come to hand (months or years afterwards through delayed FOI documents), I brought it to the attention of the TIO and urged him to investigate. He therefore has no excuse for not being aware of the unlawful way in which this procedure was conducted and should have convened his own investigations into the matters raised.

I felt completely shattered, but I had to keep going, I had customers to deal with. Six days later, however, nature took over. In front of a group of campers, some sixty children and staff, I collapsed. An ambulance delivered me to hospital and, at first, it was suspected that I had suffered a heart attack. Five days in hospital followed and the final diagnosis was stress.

On my first day home I received a call from the FHCA project manager. He wanted me to know that he was aware things had not turned out quite as I had hoped. He believed I now had to put it all behind me, get on with my life and show ‘them’ what I could do.

I am still wondering who ‘them’ was. And why, really, he had rung. By this point, my appeal time had elapsed. Had he heard about my collapse and had an attack of conscience? During this conversation, he also informed me that the executive manager of my case with DMR was also going to ring me; and so, he did.

The Canadian DMR manager said something like: ‘I was sorry to hear you had been ill and I hope you get better soon. This has been the worst process I have ever been a party to. This sort of situation would never have happened in North America.’

I was so stunned at this statement that I later forwarded a signed Statutory Declaration of my memory of it to various government ministers. I wrote to DMR in Canada for clarification but received no response. Tantalising possibilities that went nowhere. I was clutching at straws. After so many years and such a high cost, it was hard to let go in the face of such a disappointing and unjust result.

On 23 May 1995, another 700 or so FOI discovery documents arrived. Why now? What was Telstra playing at? I could have used the material twelve months ago to support my claim. Ten days ago, I could have used them to support an appeal against the award. Now, the only way I could use them was if I took the matter to the Supreme Court of Victoria, an alternative that was entirely beyond my financial means, as Telstra well knew.

Mr Benjamin’s letter to me re late-released FOI documents again confirm that the COT Cases had no chance of ever receiving the justice the government assured us we would have if we went into arbitration with Telstra. This letter from Telstra’s Ted Benjamin, who was also Telstra’s arbitration defence liaison officer, held the position as a TIO Council member. I did not uncover this until the Senate exposed this conflict-of-interest issue during an official COT case FOI investigation conducted by the Senate between September 1997 and March 1999. In fact, the official Senate Hansard available on my website shows Mr Benjamin admitting he had never disclosed his conflict of interest as Telstra's official arbitration officer when the TIO office discussed COT arbitration matters at their monthly meetings.

Mr Benjamin failed to advise the same 26 September 1997 Senate FOI investigation that he had waited in my case twelve months before releasing the FOI documents that would have supported many unaddressed issues raised in my arbitration. On opening this evidence, I remember saying to myself, if only I could have received these most relevant documents during my arbitration or even four weeks previous during my designated arbitration appeal period, I would have been able to successfully appeal part of the arbitrators' award.

On opening this evidence, I remember saying to myself, if only I could have received these most relevant documents during my arbitration or even four weeks previous during my designated arbitration appeal period, I would have been able to successfully appeal part of the arbitrators' award.

However, this was wishful thinking. In the covering letter from Mr Benjamin dated 24 May 1995 under the heading “Your FOI the request of May 1994” includes the following: 

“Further documents have recently come to light that fall within your FOI request of May 1994.

Copies of these documents are enclosed. At this time a table has not been prepared giving decisions in relation to these documents as it was considered by Telecom more important you receive copies of the documents now.” (Refer to exhibit AS 183 File AS-CAV 181 to 233

It was clear from some of these documents that Telstra was fully aware they had a national network billing software problem. Was this the reason Telstra withheld these relevant billing documents for the whole period of my claim?


Chapter 9



Among the issues not addressed in my arbitration award was that of Telstra’s incorrect charging. Five months after my award came down, Austel visited Cape Bridgewater view the documents that had not been addressed by the arbitrator. These amounted to six bound volumes of evidence I had accumulated to support my case. The Austel people appeared to be quite stunned at the six volumes and commented that they had never seen so much evidence, presented in such detail. (In fact, over the years leading up to my arbitration, I had continually provided evidence to Austel of Telstra’s incorrect charging.) Finally, they left, taking the volumes with them.

Austel allowed Telstra to address the material in the absence of any mediator such as the arbitrator and I was given no opportunity to respond. I wasn’t even officially notified of Telstra’s response, I had to wait for an FOI document, which I received by chance in 2001. The information Telstra had provided to Austel in a letter in October 1995,[76] defending itself against my itemised problems, was full of false claims. Had I been given the chance to show the comparison with my data, I could have proved this. But I was not given the chance, and Telstra’s version was privileged over mine with no further investigation. What sort of a way was this to provide justice? I was denied my legal right of challenge. The faulty billings continued.

Meanwhile the daily running of the camp was almost beyond me. Cathy was handling the work almost entirely on her own. All the marketing and promotional expertise I had built up over the years was of no help: I had no reserves of energy to call on, and more importantly, perhaps, I no longer believed any good could come of it. I was in a state of despondency, stewing on my situation. How could this be happening to me in Australia in the 1990s? Wasn’t this supposed to be a democracy? It felt like something out of Kafka.

I decided I had to do something, so for a start, I requested the return of all my claim documents (as per the rules of the arbitration) and waited with growing anger for weeks before deciding to drive to Melbourne and collect them myself in August 1995. I don’t know why I expected to have my request met at this time, in truth, I was spoiling for a fight. And indeed, my documents were not ready, the arbitrator’s secretary, Caroline informed me, and the arbitrator was not available.

I was not polite. I demanded she get my documents at once and reminded her I had put in my request three months before. ‘I am not leaving this office without those documents,’ I shouted. ‘Call the police if you want to, I don’t care. You have my property and I want it back now.’ At last a young lad appeared wheeling a trolley loaded with boxes. He asked me to sort out which were my claim documents; I simply took the lot.

It was a revelation. Among the documents were some I’d never seen before, and they were very interesting, to say the least. By the rules of my arbitration, any information supplied by one party must be automatically circulated to the other party and to the TIO’s legal counsel. Among the material I took from the arbitrator’s office that day, however, was an envelope full of documents and loose papers, none of which had ever been forwarded to me.

A letter from Telstra to the arbitrator had been sent with three attachments, letters sent between Austel and Telstra, between October and December 1994. Telstra wrote:

You will note from the correspondence that Austel has requested Telstra to provide information relating to charging discrepancies reported by Mr Smith for short duration calls on his 008 service. These issues form part of the subject matter of Mr Smith’s claim under the Fast Track Arbitration Procedure.

The simplest way forward may be for Mr Smith and Telstra and yourself to all confirm in writing that this information can be provided to Austel if this meets with your approval.[77]

Now, if this was the way to go, why didn’t I receive some indication of this from the arbitrator? I received no correspondence from him at all on this matter.

In its letter of 1 December 1994, Austel had indicated that other Telstra customers in the Portland area had also complained about incorrect charging on their 008 services, and Austel raises this concern in their letter of 8 December:

A major consideration in Austel’s pursuit of the issue raised by Mr Smith was the likelihood that these problems, if proved to exist, would almost certainly affect a number of other Telstra customers.

In direct breach of the rules, the arbitrator did not forward these letters to me during the arbitration. And, as I have already told, the arbitrator made no finding in his award regarding the substantial evidence of incorrect charging in my claim documents.

In a letter of 11 November 1994 Telstra told the arbitrator and Austel that it would address these incorrect charging issues in their defence. That Telstra failed to do so, and that the arbitrator permitted this, I believe constitutes a conspiracy between the arbitrator and Telstra. Further incriminating documents in this cache I had unwittingly stumbled upon, supported the notion that there was a conspiracy afoot.

The DMR/Lanes report revisited

Among the documents inadvertently provided to me by the arbitrator’s office, I found another version of the DMR/Lanes technical report for my business. On the title page of the version I received back in April 1995, the second paragraph consists of one short sentence: ‘It is complete and final as it is.’ The second paragraph on the equivalent page of the arbitrator’s report has more to say: ‘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.’

Again, in the arbitrator’s copy (on page 3), the fourth and fifth paragraphs state:

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.

This information is missing from my version of the report. Did the arbitrator and DMR/Lanes think I would forget about the billing issues if they didn’t remind me? To discover that DMR/Lanes intended to address the billing issues but mysteriously omitted this from the final version of their report just sealed my conviction that I was the victim of a conspiracy in this arbitration.

And it was here, under the heading ‘Cape Bridgewater Documentation’, I found the astonishing statement I mentioned in an earlier chapter: ‘A comprehensive log of Mr Smith’s complaints does not appear to exist.’

Were they playing games with me? I certainly had provided one! At times my life felt like one huge comprehensive log of complaints. Austel had been stunned at my volumes of evidence. I had images of my supporting documents being tossed into some ‘too-hard basket’ and I was fed up with it. Secure in their government jobs, had they any idea what we COT claimants were going through, what this meant to us?

What is so disturbing about these additions to the two conflicting DMR & Lane 30 April 1995 reports is that all 23 technical finding in each report are identical. When these two identical reports are read in conjunction with the Lane 6 April 1995 report they are likewise the same. What this shows is that Lane not only produced 99.9% of the findings in all three reports they also conveniently failed to address my ongoing billing faults. What cannot be argued after viewing the two DMR & Lane 30 April 1995 reports is that at point 3 in both: it note:

About 200 fault reports were made over December 1992 to October 1994. Specific assessment of these reports other than covered above, has not been attempted. There are 23 faults shown in both reports that were investigated, none were faults registered In the arbitrators award (findings) he notes that my claim was over a 6 and half year period from April 1988 to December 1994. This shows that DMR & Lane assessed less than two years of a six and half year claim.  To save arguing which faults which year was assessed and which was not, I again repeat as I have repeated on my webpage as well as in this book. Did Lane only assess less than a third of those faults registered because to have assessed ALL of my which I might add amounted to over 600 for the six and half years (which the government regulator agrees) was one of the worse of all of the COT Cases is because to have assessed this amount of faults Lane would have had to acknowledge the Ericsson equipment was fault ridden. It appears as thought it was best to purchase Lane and all of their computer files of all of the COT Cases complaints so that there is no record in existence of the real problems the government was soon to inherit once the National Broadband Network (NBN) went into play.    

FOI avalanche

As if to rub my face in my defeat, months after the arbitrator had handed down his decision in my arbitration, I was still receiving hundreds, even thousands, of discovery documents. Some of them I had requested years ago, and would have been most useful in supporting my claim, but by this time, of course, they were of no use any more.

As these documents kept arriving I found it impossible to just shut the door on the saga and walk away. I became increasingly convinced that I had been the victim of a deliberate act of sabotage, and not only in relation to obvious things like the ‘beer in the phone’ episode. Why, I wondered, did the arbitrator not make any finding regarding all the lost faxes I had reported, both before and during the arbitration process, some of which involved valuable evidence that was somehow lost in Telstra’s network, en route to the arbitrator’s office for assessment by the resource unit and Telstra’s defence unit.

How had the arbitrator not seen through Telstra’s attempt to make me appear as a drunk by saying that my fax problems were caused by alcohol. How was it not obvious to the arbitrator that Telstra wanted the faulty line to be hidden from the resource unit in case they stumbled on the truth that it was Telstra’s lines that were causing the problems?

In 2001, six years after the fact, I received from the TIO’s office a letter Dr Hughes wrote to Warwick Smith on 12 May 1995.[78] In this letter, the arbitrator observes that the arbitration agreement was not a ‘credible’ process to have used in my arbitration. If Warwick Smith had passed this letter on to me at the time I could have challenged the arbitrator’s findings. How could an appeal judge rule against the arbitrator’s own advice to the administrator that the rules of the agreement used in the process ‘had not allowed sufficient time for delays associated with the production of documents, obtaining further particulars and the preparation of technical reports’? It was terribly frustrating to get this documentary support too late.

Playing politics

David Hawker, my local federal MP, had supported me, and the issue of rural telecommunication services, since 1992. In 1995, before the Liberal government came into power, he arranged for some of the COT members to meet with the then Shadow Minister for Communications, Senator Richard Alston, in his office in Canberra.

Senator Alston had taken an interest in the COT cases from very early on, and in this meeting he was supportive of my claims regarding the unethical conduct by various parties associated with the administration of my arbitration, including my claims that Telstra had been listening in to my private phone calls during the arbitration. Senator Alston had been under the same illusions as the COT four that the arbitration would be a non-legalistic and fast-tracked process. He expressed his concern that FOI discovery documents showed that Telstra knowingly used flawed and fabricated test results to support their defence of my claim, and that they had allowed the 10 November 1993 flawed BCI Addendum Report on Cape Bridgewater to remain in the public domain.

After the Coalition victory in 1996 Senator Alston became the Hon. Senator Richard Alston, Minister for Communications and the Arts. At this point his office asked me to supply them with a full report on my claims and the allegations I had made against Telstra over the years, along with any allegations I had about the conduct of the arbitration. I set about producing the report they needed: just to produce a chronological listing of events took 82 pages which I bound into a book, supported with a separate volume of attachments indexed to the main document. A copy of this report was sent to Senator Alston and another to the Commonwealth Ombudsman’s office.

Regrettably, since Senator Alston was appointed to a position which gave him the power to instigate a full inquiry into the many issues raised by the COT cases, nothing more happened in this matter beyond a letter of acknowledgement in September 1996.

The Exicom T200 and beer-in-the-phone reprise

Another FOI document received too late proved that Telstra was well aware of the moisture problems associated with the Exicom T200 that resulted in billing faults exactly such as I had experienced, faults that my arbitrator and Telstra refused to address in my arbitration. This same document, an internal memo, suggests that Telstra re-deployed phones they knew were faulty and returned them back into service to other unsuspecting customers, because they would ‘still have to be deployed in areas of lower moisture risk.’[79] The memo is not dated, but other information in it puts it around 1993–94.

Given that these phones were known to malfunction in moisture-prone areas, I cannot fathom why Telstra thought they would work in a coastal area such as Cape Bridgewater. Or why, when I began to complain of the billing problems they didn’t simply say, ‘Oh, sorry Mr Smith, this is not the right phone for you.’ What a lot of trouble that would have saved.

I wonder how many of these faulty T200 phones are still being used by unsuspecting Telstra customers in places of high moisture content, for instance, fish and chip shops, bakeries, industrial kitchens, or heated swimming pools etc. — and how many of these customers are incorrectly charged for calls they did not receive, as I was for so long.

I also wonder about the legality of redeploying products known to be faulty — though it seems the Telstra Corporation is exempt from the Trade Practices rules covering other corporations and businesses in Australia.

After so many let downs, imagine my happiness when, in November 1995, six months after the arbitrator handed down his award, I received in another bundle of FOI documents, the laboratory reports I mentioned in Chapter Seven, in which Telstra carried out tests on my T200 fax/phone at their laboratory to see how long beer would stay wet inside the phone casing. To read that Telstra laboratory staff themselves had proved that beer could not have stayed wet and sticky for 14 days (the time between the phone leaving my premises and it arriving at the laboratory) was incredibly exciting.

It was already evening time, but in the heat of the moment, I rang the arbitrator’s home number. His wife answered and told me he was overseas and not due home for some days. Caught on the back foot and thinking it likely the arbitrator had discussed at least some aspects of my arbitration with his wife, I imagined that if she knew who was calling, she might be afraid I was going to be troublesome. On the spur of the moment, I gave her another name, one I knew the arbitrator was familiar with — that of the FHCA project manager. According to my telephone account, this call was made at 8.02 pm on 28 November 1995 and it lasted 28 seconds.

Later, I told the TIO about my exciting find, and how I had I had tried to contact the arbitrator to pass on the news, explaining also why I gave Mrs Hughes the FHCA project manager’s name instead of my own, so as not to alarm her. I asked him what he would do with this proof that Telstra had fabricated the beer in the phone story. The TIO responded flatly that my arbitration had run its course and he did not intend to involve his office in any further investigation. He said I should go to the Supreme Court of Victoria if I wanted to take it further.

The Institute of Arbitrators

Since the TIO would not act, it was time to find some other way of addressing the unethical conduct of Dr Hughes, the arbitrator. On 15 January 1996 I addressed my complaints to Laurie James, President of the Institute of Arbitrators Australia.

I had a number of complaints regarding the fact that the arbitrator had not operated within the ambit of the Arbitration Act. I provided evidence that the TIO and Telstra had also met in private, without a representative of the COT group, during the planning stages of our arbitration. The arbitrator and his resource unit also met with Telstra in private, before we signed for the arbitration. These meetings broke the rules of arbitration, and we will never know what was discussed in them. We can assume, however, that it was not to the advantage of COT members.

Also, when the TIO and his legal counsel began to pressure the COT four into abandoning the commercial process (the FTSP) and signing for arbitration (the FTAP), no-one informed us that the appointed arbitrator was not graded by the Institute of Arbitrators. I learned this from Mr Nosworthy, President of IAMA in 2001, who told me Dr Hughes was not a graded arbitrator at the time of my arbitration. In fact, while he was engaged with the COT cases, Dr Hughes sat for, but failed, his grading examination.[80] Technically, he was not qualified to handle any arbitration, let alone one that was so complex and far-reaching as ours. This information was relayed to Senator Alston and the TIO, but to no effect, and no-one has yet satisfied me as to why an unqualified arbitrator was chosen to oversee such a vast process and why he was permitted to continue, after failing his examination.

Mr James worked quickly, for on 23 January 1996 Dr Hughes wrote to John Pinnock (the new TIO) under the heading ‘Institute of Arbitrators – Complaint by Alan Smith’ saying:

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

  1. the cost of responding to the allegations
  2. the implications to the arbitration process if I make a full and frank disclosure of the facts to Mr James.[81]

I would give a lot to see what that ‘full and frank disclosure’ might consist of. I couldn’t ask at the time, however, as I did not get a copy of this until 2001. What I did get next was something shocking and upsetting.

In February 1996 I received a letter from the President of the Institute of Arbitrators, Mr Laurie James, with a copy attached of a letter he had received from the TIO. The TIO had written to Mr James to say that my complaints about the arbitrator were ill-founded. The TIO backed up this assertion by relating a very different version of the events I have just described. In his letter, the TIO stated falsely that I had rung the arbitrator’s home at 2 o’clock in the morning. He also told Mr James that I had given a false name.

With its implications that a man who rang anyone at the socially unacceptable time of 2 am was possibly unstable, or a threat to the peace, this seemed like a gratuitous attempt to blacken my name. Why else would the TIO take an innocent incident and try to turn it into something sordid? The TIO is supposed to be unbiased. He must have known that his correspondence would bring my character into question. And if he was prepared to do this in my arbitration, what about the arbitrations still going on for other members of the COT group. Who was he actually supporting — the Australian public or the telecommunications carriers?

The TIO had also forwarded a copy of this letter to the arbitrator, who would have asked his wife for her version of the incident. I believe that, all things being equal, his wife would confirm that I rang at 8 pm and that I was perfectly polite. But who knows, perhaps the arbitrator and the TIO cooked up the 2 am version between them.

Mr James was not inclined to follow through with my complaint, so the TIO had achieved his aim.

So that was the consequence when I thought I had found dynamite with the confirmation that someone within Telstra had tampered with my Exicom T200 phone and that Telstra staff had perjured themselves in Statutory Declarations defending their beer-in-the-phone story.  

I had thought that anyone interested in justice would feel no option but to review my case. Instead, the person whose position it was to address this, chose instead to try to discredit me. And it was not the only attempt. I am not sure who stooped lower, the TIO or the arbitrator, as the concluding part of this story illustrates.

It was not until 2001, five years after the event, that I received from the TIO, through FOI, a copy of a letter dated 13 February 1996, written by John Rundell of the Technical Resource Unit to Mr Pinnock (TIO), which sheds some light upon the fate of my complaint to the Institute of Arbitrators. This is the story of the second serious attempt to discredit me.

In the letter, Mr Rundell acknowledges that the FHCA financial report was incomplete (‘… the final report did not cover all material and working notes’[82]), but he then goes on to make an astonishing assertion that the Victoria Police Brighton CIB was about to question me in relation to criminal damages to his property.

In fact, the Victoria Police Brighton CIB never considered me a suspect in relation to any crime, and letters held by the TIO’s office confirm this. Nonetheless, John Rundell’s letter to the TIO implied that I was about to be charged for criminal damage. What is more, those false allegations were then sent on to a third party, Dr Hughes (the arbitrator), who then attached a copy of the letter in his response[83] to Mr Laurie James, President of the Institute of Arbitrators Australia, who was investigating my complaints.

At the very least this constitutes massive defamation of character. And it very likely prejudiced Mr James against my case. Of course, I had no idea of the existence of this letter at the time. Over the years since I became aware of this defamation I have made continuous complaints to the TIO and relevant government ministers. None of this has resulted in any apology or retraction, but that should not surprise the reader.

Senate Estimates

This has been a highly legalistic arbitration: by June 1997, Telstra had paid more than 18 million dollars to defend itself against the COT claimants. What chance did we have when we had to rely on Telstra documents to support our claims and the person in charge of distributing those documents also sat on the council of the TIO?

During question time at a Senate meeting on 24 June 1997, Telstra was questioned regarding its tardy supply of FOI documents to the COTs. By this time the Commonwealth Ombudsman had completed her findings relating to Telstra’s administration of the supply of discovery documents to Ann Garms, Graham Schorer and myself. She found against Telstra. This finding resulted in a Senate review of the cases of Graham and Ann, but not of my case. It has never been explained why I was left out, though it has been suggested that my ongoing phone problems represented a can of worms no-one wanted to open in public.

In this same Senate meeting, the Shadow Minister for Communications, Senator Chris Schacht, raised the issue of the $18 million that Telstra had paid out in legal fees during the COT arbitrations in contrast to the $1.74 million that the COT claimants had collectively received to that point:

The thing that really is annoying is that the lawyers got millions, you paid them millions to go through all of this process and the claimants got $1.7 million — we know who won this case.

… you went through a process of hanging people out to dry for a long time.

Senator Carr, Labor, then said to Telstra’s Graeme Ward:

I have a document here, headed up ‘TELSTRA SECRET’, which suggests that some time ago you were being advised that Mr Smith was likely to secure a substantial payment through a legal arbitration process. Is it not the case that probably it would have been in your commercial interest to have settled long before you did?

Telstra’s Ted Benjamin, who had been in charge of the COT arbitrations and responsible for supplying us our FOI discovery documents, was also a member of the counsel to the TIO’s office. He replied to Senator Carr:

We could not reach a final settlement with Mr Smith before the matter went to arbitration. It was then taken over by Austel in its investigation into what became the COT Report.

A neat side-step. And the issue was left basically unanswered.

The question of whether Telstra’s withholding of FOI documents was a deliberate ploy occupied a Senate Estimates Committee from September 1997 to January 1999. By that time there were 21 COT cases, and five of these, including Ann Garms and Graham Schorer, were chosen for investigation. If it was found proved with these five that Telstra had acted deliberately such that their arbitrations had been compromised, then it would be assumed true for the remaining COT cases.


On 26 September, the TIO Mr Pinnock was called before the Senate Estimates Committee to answer questions about the conduct of the arbitrations. He made an extraordinary statement:

 … the arbitrator had no control over that process, because it was a process conducted entirely outside the ambit of the arbitration procedures.

This was an incredible reversal from the TIO’s office, and one that should have given me joy. Under oath, he was finally agreeing with what I had been saying for so long.

The Senate investigation proceeded over the next 20 months and delivered a decision that Telstra had indeed deliberately withheld FOI documents to the detriment of the COT claimants. But while this was proved for the five test cases, the decision to pass on the benefits to the remaining COT cases was reversed. The five won a total award of several million dollars between them from this Senate Inquiry, and the other sixteen got nothing.

On 23 March 1999, when this Senate investigation was over, the Chairman of the Committee, Senator Alan Eggleston, made a press release:

A Senate working party delivered a damning report into the COT dispute. The report focussed on the difficulties encountered by COT 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.’[84]

In fact the TIO Board and Council had hidden two important issues from the Senate Estimates Committee: (1) The Board and Council knew that the TIO-appointed Resource Unit also stopped the COT claimants from receiving relevant documents during the arbitration process and (2) The TIO and the defendants (Telstra) let this happen by allowing the Resource Unit to decide which documents they thought were relevant for the arbitrator to view and which they thought should be withheld from the process.

So many people were concerned about what had happened to the remaining sixteen COT cases, at least one Senator showed support. Two Victorian Police officers had acquired in camera Hansard records for 9 July 1998, where it was noted that to award only those five cases under investigation would be an injustice for the remaining sixteen. They gave me a copy of the Hansard pages, which was frustrating as I was unable by law to use the information in them to pursue justice. Indeed, when I tried to use these privileged documents to support my continued request for access to FOI documents, I was threatened twice by Senator Eggleston that if I disclosed the content of these privileged reports I could be held in contempt of the Senate – a two year jail sentence.

Questions and more questions

There are still many questions I am waiting to be answered by Telstra. The Commonwealth Ombudsman’s office has been attempting to extract replies from Telstra on my behalf, with some success, particularly on the more trivial matters, but more often with no success at all. For a typical instance, early in the arbitration process I had asked, under FOI, to see documents explaining just how the rules of the arbitration had been arrived at, particularly the first draft of these rules. When Ms Philippa Smith, the Ombudsman, relayed this request to Telstra she received the following reply:

Telstra has been unable to locate Mr Black’s further general files which include copies of the correspondence received from Hunt and Hunt in relation to the development of the Fast Track Arbitration Process and I am told that these files, along with other documents, were disposed of by his personal assistant sometime after he left Telstra’s employ.

It seems the more mundane letters can be located but important evidence relating to my arbitration can be lost forever. This missing evidence could well have proved that the so-called ‘independent’ rules which the members of COT signed, were not independent at all.

Many documents mysteriously disappeared and many organisations disassociated themselves from my arbitration over the years. When, in January 1995, I raised the question of the role of the previous President of the Institute of Arbitrators in the drafting of the rules of my arbitration, I was advised by the current President of the Institute that:

The Institute of Arbitrators Australia has absolutely no connection with the arbitration between Telstra and yourself.

Yet the TIO and my arbitrator stated in writing that the President of the Institute (later a County Court judge) in 1994 independently drafted the rules of the arbitration. Who do we believe?

In my case alone, when Telstra listed the documents they received as part of my claim their list is 43 documents short of the number I forwarded to the arbitrator. Where are these missing documents?

Document (Burying The Evidence File 1) dated 16 May 1994, is a copy of my sworn statement faxed on this day to Detective Superintendent Jeff Penrose of Australian Federal Police (AFP) in which I note:

"At approximately 4.20 pm yesterday, I spoke to Detective Superintendent Jeff Penrose (Federal Police) regarding my concerns about what had taken place.

My purpose for being at Telecom House was that when Telecom had originally supplied the FOI documents, they had somehow failed to supply the adjoining documentation that should have accompanied some of these Fax Header Sheets (fifty six (56) header sheets in all)

It is now my concerns were justified...and [sic] In the office provided for me, that because much of the FOI documentation was so blanked out that it was hard to march the correct correspondence to the Telecom Header Sheets in question.  

The moment I brought to their attention the irregularities regarding the two faxes in question there was an immediate urgency to terminate my presence and I was asked to leave at 40.40 pm".

This was the reason I phoned Detective. Superintendent Jeff Penrose of the Australian Federal Police and described the situation to him.  Mr Penrose responded with words to the affect that:

‘… it is illegal to destroy documents during a discovery process’ and went on to explain that my attendance at Telstra’s office certainly qualified as an official ‘discovery process’.



Chapter 10

And the faults continue


The issues drag interminably on. Are they waiting for me to give up and go away? My faxing problems have never stopped. If documents are sent by courier and don’t arrive, we have recourse through the courier company. If documents sent by fax through Telstra’s network are lost however, it would seem there is no recourse.

The missing faxes

In June 1998 I asked five different businesses to write about the fax problems they encountered with me. Hawker’s Secretarial Service in Portland said, ‘… being the only secretarial service in Portland, my fax machine is a valuable tool in my office and as to date I have never experienced problems with any of my other clients.’ These letters were passed to the TIO’s office. But it is not just the ongoing problem that bothered me. It is the custom I lost.

On 1 July 1998 I wrote to the Deputy TIO, Mr Wally Rothwell regarding faxes that had been ‘lost’ in transit in the course of my arbitration, or which were delivered, but were unreadable. Since the time of my arbitration I have been trying to get this issue addressed.

I copied on to Mr Rothwell a number of faxes returned to me from the arbitrator’s office once the arbitration had been completed. These faxes had arrived at the arbitrator’ office as only half pages or as blank pages. There were also bank statements I faxed to Ferrier Hodgson, which arrived at their office with no details showing. I asked the TIO how FHCA could have assessed my financial position correctly when some of the documents I sent them arrived blank. Predictably, there was no response from the TIO.

On 30 July 1998, the Australian Federal Police wrote that they were unable to help me track down my missing faxes, and on 18 August 1998, the Attorney General wrote that he too could not be of assistance. If the Federal Police and the Attorney General’s office are not concerned about the loss of legal documents in transit via a fax machine, then who can help me?

I also wrote to the TIO and the Minister for Communications, asking them to instruct the arbitrator’s office and the TIO’s legal counsel to supply me with a copy of the ‘missing’ claim documents, under the rules of the arbitration which Telstra and I both signed.

Points 6, 7.2 and 25 of the FTAP rules state:

6.    A copy of all documents and correspondence forwarded by the Arbitrator to a party or by a party to the Arbitrator shall be forwarded to the Special Counsel. A copy of all documents and correspondence forwarded by a party to the Arbitrator shall be forwarded by the Arbitrator to the Special Counsel and the other party.

7.2  The Claimant shall within 4 weeks of receipt of written notice from the Administrator pursuant to Clause 5 that he has received completed and signed Request for Arbitration forms send to Telecom and to the Arbitrator in duplicate, its Statement of Claim and any written evidence and submissions (‘the Claim Documents’) in support of that claim.

25   Within 6 week of publication of the Arbitrator’s award, all documents received under this Procedure by the parties, the Administrator, the Resource Unit and/or the Arbitrator and all copies thereof, shall be returned to the party who lodged such documents.

If they adhered to the FTAP rules, Telstra and the TIO’s legal counsel should have had copies of everything I sent to the arbitrator, whether I sent it by mail or fax. And according to the same rules, the TIO was bound to instruct Telstra or their legal counsel to supply me with the ‘missing’ documents. The only conclusion I can draw from this is that the TIO must be aware that the majority of my claim documents never reached Telstra’s defence unit or the legal counsel in the first place, and therefore knows it is pointless to direct them to return these documents to me. Very little in the actions of the TIO has reassured me or the other members of COT as to the capacity for impartiality of that office in its role as standing between us and Telstra.

On 26 February 1999, I sent three faxes to COT member, Graham Schorer: the first and third of these arrived at Graham’s office as intended but the second did not. Graham’s fax journal shows the two faxes which were received, marked with an arrow. According to my Telstra account, I was duly charged for the long-distance transmission of all three. If I hadn’t happened to phone Graham to discuss the document which didn’t arrive, we might never have discovered it had ‘gone walkabout’ between our faxes. Now most people would accept a single incident like this as just a ‘blip’ in the system. Unfortunately this has happened on too many occasions, and it was happening back in 1994 over the months during which I was lodging my claim with the arbitrator.

We also have to wonder how many other similar occurrences have not been noticed over the years and how many individual or business people send faxes and never discover that they didn’t arrive at their intended destination and so happily pay their Telstra accounts.

Still trying to get my original claims addressed

On 17 February 1998, I sent the TIO a bound submission detailing my continued and ongoing incorrect charging by Telstra. The submission started with the beginning of my arbitration and included copies of pages of the transcript of the oral hearing conducted on 11 October 1994 with Telstra, the arbitrator and myself, and a representative of the TIO, showing that my claim documents relating to incorrect charging were accepted into the arbitration procedure. There were several pages explaining the significance of the material I was submitting, so many that, on page 94, the arbitrator is reported as stating during the course of the oral hearing, ‘I don’t think we need any further examples.[85]

Yet even with this mountain of evidence the TIO still stated that the problem began only ‘at a late stage of the arbitration process.’ It’s as if it would stick in his throat to actually present my case on its own terms, impartially. On the positive side, the TIO did respond. He asked Telstra whether they agreed ‘that this matter was not addressed’ in my arbitration. Wake up! I felt like yelling, not for the first time. Of course, at the time of writing this, I have yet to receive Telstra’s response. I’m not holding my breath. I can only suppose that a judgement against Telstra in the matter of incorrectly charging their customers on a regular basis would set a dangerous precedent. I pay the price, while Telstra avoids facing the issue at all costs. And behind Telstra stands the TIO, and Austel, and the government.

In 1998 I also sent the transcript of the 1994 oral hearing to the TIO and the Minister for Justice, alerting them to how, at that time at least, the arbitrator agreed to address Telstra’s tapping of my phone lines and listening to my private phone calls during the arbitration procedure.

Arbitrator to Smith: ‘... effectively any reference in your claim documents to date regarding unlawful phone tapping will be treated by me and the resource unit as unsubstantiated and therefore not relevant for the purpose of determining whether you’re entitled to compensation.’

Me: ‘No, I will leave it in the claim because —’

Arbitrator: ‘You understand if you leave it in your claim, Telecom is entitled to ask what is the basis for this allegation?’

Me: ‘Right, Okay, yes, all right.

Arbitrator: ‘So you want to leave the allegation in?

Me: ‘I will leave the allegation in.’[86]

But these claims were not addressed, either in my award, or by the TIO, or indeed by the Minister.

If Telstra is allowed to get away with eavesdropping on businesses while it is government owned, then what does the future hold for Australia once it is completely privatised, with no government control at all? Even now, how many other businesses are having their private matters watched? How many overseas investors are being ‘bugged’ without their knowledge? How many businesses fighting a take-over bid have their private information passed around to whoever might benefit from a bit of inside knowledge? How many faxes are copied to someone other than the intended recipient?

An article on electronic security in the Melbourne Age of 10 October 1998 reported that it was possible for anyone with access to Telstra’s network to monitor faxes as they are sent and to keep copies without the sender’s knowledge. This article also pointed out that telephone operators can eavesdrop on calls and Telstra can access all calls, though this is supposed to be under strict controls.

After three more years of telephone complaints after my award was handed down — of line-locks, dead-line problems, missing faxes and the 1800 billing problems — Telstra finally sent two representatives to see me at Cape Bridgewater on 14 January 1998. By this time I had put together a mass of evidence consisting largely of Telstra’s own data and my itemised accounts. The two Telstra representatives explained they were liaising with the TIO’s office regarding my complaint that my arbitration had not addressed a number of issues raised in my original Letter of Claim. They considered my evidence sound and took it away with them. In their notes of this meeting they said:

… Mr Smith produced various printouts of CCAS data in comparison with his Telstra accounts. In many instances the calls add up however, in some cases there appeared to be differences in the duration of the call time. I note that the examples given by Mr Smith at the meeting spanned the period of the Arbitration and after the conclusion of the Arbitration.[87]

Senator Alston wrote to David Hawker my Member of Parliament on 27 February 1998 and again on 29 May 1998 telling him that Telstra was examining the documentation with a view to resolving my concerns. Things were looking promising, I thought.

Then in a letter dated 9 June 1998, the Deputy TIO referred to an intended meeting with the arbitrator, in order to ‘clarify whether he did consider the 1800 issue during the arbitration.Pay attention, I felt like shouting. There had never been any doubt about this. A 15 November 1995 letter from the TIO-appointed Arbitration Project Manager to the TIO[88] was quite clear that NONE of the billing issues, including the 1800 issues, were ever investigated during my arbitration. And on 3 October 1995 Austel wrote to Telstra, with a copy to the TIO, asking why the billing issues I raised during my arbitration had NOT been addressed.[89]

In July 1998 seven letters passed between the TIO office and me,[90] all proving that many of my claim documents which my Telstra account shows were faxed to the arbitrator’s office in 1994–95 had either not arrived, or had arrived in a damaged state. Yet on 25 August 1998, Mr Pinnock (TIO) wrote to me:

The only issues that I am considering, as the former Administrator of your arbitration, are the alleged overcharging for your 1800 service and matters pertaining to your Gold Phone service, and whether they were considered in the final award.[91]

There is no mention of my complaints of lost faxes, not even an explanation of why he is not considering them. I have to wonder, is there some reason behind this omission? My submission was very clear about the importance of the issue of the lost faxes. Why was he avoiding it? Mind you, nor did he address the issues he said he was considering.

In June 1996 I had written to advise the TIO that four 1800 billing claim letters addressed to the arbitrator had not been provided to me during my arbitration. On 2 August 1996, in response to that letter,[92] the Resource Unit admitted to the TIO and the arbitrator that they had indeed withheld these letters. In 2002 I received back a copy of my letter to the TIO dated 26 June 1996, and found that the TIO had added a handwritten note at the bottom of this letter, stating:

‘These are quite serious allegations. We need to respond to specific letters Smith says weren’t forwarded or received and provide answers on each.’

I have sent some sixty to seventy letters to the TIO since 1996, asking his office to follow up on these ‘serious allegations’ (which are in fact not allegations, but the truth). The TIO’s office has refused bluntly, and reminds me that if I am not satisfied I can take them and the arbitrator to court, well aware that I do not have that sort of money.

I call this criminal collusion. What is more, as I have already shown, Austel and the TIO allowed Telstra to secretly address these same four 1800 billing documents in October 1995, five months after the end of my arbitration. Had the TIO and the defendants concocted some deal so these billing documents could be hidden from the arbitrator and me? And why? So that Telstra could address them outside of the arbitration, compromising my legal right to challenge Telstra’s defence of these documents.

Telstra’s CEO, Frank Blount, admitted the breadth of this 1800 billing problem in his 1999 book Managing in Australia. Not only the billing, but most aspects of the performance of the 1800 ‘product’ were, as the book notes, ‘sub-standard’, and Blount’s response, when apprised of this, was one of ‘shock’.[93]

And Telstra management certainly knew this four years earlier when they knowingly supplied the government regulator with grossly inaccurate information in my arbitration, and indeed when the Resource Unit’s technical consultants refused to investigate the evidence regarding my 1800 line.

Finally I have had enough

In June 2001 I put the business up for sale and in December that year Darren Lewis took possession. Cathy and I kept the property next door. I believed that the problems with Telstra had become a personal vendetta and that they would disappear when I was no longer involved. Alas, that was not the case.

From March 2002, Darren Lewis wrote numerous letters to the TIO, complaining of fax related problems of a similar nature to those I had suffered. Mr Lewis received the support of the Hon David Hawker, who wrote to him in October 2002:

Given the serious communications problems encountered by the former proprietor of your business (Mr Alan Smith), I intend to make representations on your behalf directly to the Federal Minister for Communications and Information Technology.

In November 2002 the Channel 9 Sunday Program featured the camp in a story on various COT cases and Telstra. Following the program, I received a letter from a Barry Sullivan:

After viewing the Sunday programme, I realise the similarities your business and others had with Telstra ten years ago with the similarities our building business had, when we lived at Bridgewater. During a period of time between the late 1980s and early 1990s we had considerable amount of difficulty with our phone. Our phone problem had such a negative effect on our building business over a period of time that our work dried up.[94]

I had not come across Barry Sullivan’s case during the time of my arbitration. In fact, Austel had passed on to Telstra information regarding other Cape Bridgewater residents who were experiencing ongoing telephone problems similar, to the ones I had experienced but kept this information from me (and presumably the arbitrator) during my arbitration. By the new millennium though, the issue was well and truly public. Under the headline ‘Plans afoot to attract tourists’ the Portland Observer wrote on 8 August 2003:

The Cape Bridgewater Tourist Association is planning a major swimming event each New Year’s Day in a bid to attract tourists to the area. At their meeting on Tuesday, association members also expressed continuing problems with the telecommunications into the area.

One operator Denis Carr said he had been told Telstra was rectifying the problem.

I hope he wasn’t holding his breath.

Meanwhile, things were not improving for Darren Lewis. In November 2002 an article in the Portland Observer noted:

The telecommunications problems which plagued former Cape Bridgewater Holiday Camp operator Alan Smith have continued to beset current owner Darren Lewis. Mr Smith is a founding member of the Casualties of Telstra. Mr Lewis said this week he had experienced several problems with the phone and fax service since taking over the Cape Bridgewater Holiday Camp last year.

‘Telstra admits there is a fault and they are trying hard to solve it,’ he said.[95]

But in January 2003, Darren Lewis was obliged to write to the TIO John Pinnock:

As well as speaking to David Hawker’s representative this morning, I also had a disturbing discussion with Tony Watson, the Telstra fault technician assigned to my case. Mr Watson informed me (in a roundabout way) that he is reluctant to supply me with any more information in relation to our phone faults because he knows I am in contact with Alan Smith, the previous owner of the business.[96]

Was Telstra afraid I might attempt to reopen my arbitration? Or was Mr Watson still holding a grudge against me because of something that was supposed to have been addressed in my arbitration nine years before? Either way, it is outrageous that Darren Lewis had to suffer such treatment — and that such treatment is basically endorsed by the government, which refuses to confront Telstra.

Back to the politicians

In 2002 there was another attempt to initiate a government investigation into the travesties around the COT arbitration cases, this time by Senator Len Harris of Queensland, who wanted to see justice for the sixteen COT cases who missed out following the Senate Inquiry. The Senator was advised the government would look into those cases he had raised, but no investigation ever took place. The same issues were raised again, three years later, by the newly elected National Party Senator, Barnaby Joyce, who had just toppled Senator Harris for the same Senate ticket. Both Senators, representing two different parties, felt strongly about the denial of natural justice in the COT cases and were determined to redress it.

In July 2005 Senator Joyce agreed to add his vote to ensure the sale of Telstra went through the Senate, but only on the condition that the unresolved arbitration issues of the COT cases were properly and officially dealt with. But, once he had cast that crucial vote, the Minister for Communication Helen Coonan did a back-flip on her word and the COTs were shafted yet again. Senator Joyce was livid, and for a year demanded the justice he had paid for, but in vain.

In March 2006 Minister Coonan did, however, agree to a government process in which public servants would conduct a commercial assessment. Only two (out of what were then fourteen) COT cases agreed to this process, and I was one of them. The other twelve had no illusions that their claims would be truly independently assessed.

To support my claim that my arbitration had NOT rectified my phone and faxing problems the Hon. David Hawker, then Speaker in the House of Representatives, submitted a statutory declaration by Darren Lewis, the new owner of the business:

After Telstra rewired the business including disconnecting a Telstra installed faulty phone alarm bell, we were informed Telstra had found other problems and believed whoever had installed the wiring had done an unprofessional job. Internal Telstra documentation provided to me by Alan Smith confirmed Telstra themselves had done the wiring. Jenny and I noticed that although our incoming call rate had more than doubled once this wiring had taken place Telstra was still unable to provide a satisfactory reason as to why we were still having problems.

Telstra informed us we had what is commonly known in technical words as a line in lock-up rendering our business phone useless until the fault is fixed. It was then that the local technician informed me that as strange as it might seem he believed that because our business was on optical fibre and so close to the Beach Kiosk (junction box) this could very well be part of the problem ... It was on this note that the technician informed me that although it was a backward step he was going to investigate the possibility of moving the business off the optical fibre and back onto the old copper wiring.[97]

Despite such strong confirmation of my case, Senator Coonan wrote to me on 17 May 2007 regarding her representation to Telstra on my behalf:

Telstra is not prepared to undertake an alternative means of pursing this matter. I also appreciate the depth of feeling regarding the matter and suggests you consider whether any court proceedings may be your ultimate option.

I can only wonder at the power Telstra wields: it seems impregnable.

The sad fate of Darren Lewis

By February 2007, the situation at the Cape Bridgewater Holiday Camp had deteriorated to the extent that Mr Lewis was feeling suicidal. Ms Howard of the Portland Psychiatric Services visited me to ask if Telstra had ridiculed my telephone problems as Darren was saying they were now doing to him.[98] I confirmed that they had, and provided her with evidence of such treatment and worse.

I believe that Darren first became concerned about the possibility that his phone conversations also may have been illegally listened to when he discovered my accreditation file in the camp office, where I had inadvertently left it when handing the Camp over to Darren. This file included Australian Federal Police/Telstra intercept documents, including one dated 14 April 1994 from Telstra to the AFP, notifying them that Telstra had installed equipment in the Portland exchange so that a bell would ring whenever I received an incoming telephone call, so that the person on duty could then listen in on those conversations. I provided this Risk Management Plan (exhibit AS 629 file AS-CAV 589 to 647) to the Australian Government as well as the Administrative Appeals Tribunal during my 2008 Freedom of Information hearing - No V2008/1836.

About six weeks after Ms Howard’s visit, Darren came to tell me he was considering selling up, but was worried about what to tell prospective buyers about the telephone problems. He accepted that when I had sold the business to him I had firmly believed that Telstra would fix the problems once I was no longer involved, and he agreed that he had also expected this to happen. But he felt now that he could not sell the business without divulging the continuing nature of those problems.

The Portland Coastal Real Estate Agency recorded two offers for the Camp, of $1,300,000 in April 2007 and $1,200,000 in June, before Darren withdrew the property from the market. Technical guru Brian Hodge, who had previously worked for Telstra for 29 years, inspected the place and provided Darren with a report in July 2007, which noted that the faults were actually getting worse.

Towards the end of 2008 Darren was before the Federal Court because of overdue taxes and was filing paperwork for bankruptcy.

In 2008, Darren Lewis wrote to the Federal Magistrates Court stating:

I was advised by Ms McCormick that the Federal Magistrates Court had only received on 5th December 2008 an affidavit prepared by Alan Smith dated 2 December 2008. PLEASE NOTE: I originally enclosed with Alan Smith’s affidavit in the (envelope) overnight mail the following documents:

  1. Two 29 page transparent s/comb bound report titled SVT & BCI – Federal Magistrates Court File No (P) MLG1229/2008 prepared by Alan Smith in support of my claims that I had inherited the ongoing telephone problems and faults when I purchased the Cape Bridgewater Holiday Camp
  2. Two s/comb transparent bound documents titled Exhibits 1 to 34
  3. Two s/comb transparent bound documents titled Exhibits 35 to 71 (the attached 71 Exhibits was enclosed in support of Alan Smith’s 29 page report);
  4. Three CD Disks which incorporated all of the submitted material.

“On learning from Ms McCormick that the information discussed above in points 1 to 4 had not been received by the Federal Magistrates Court I again had a stress attack seizure, a problem I have been suffering with for quite some time due to the predicament I now find myself in and the disbelief that once again my mail has been intercepted. I have attached herewith dated 3rd December 2008, a copy of the Australia Post overnight mail receipt docket numbers SV0750627 and SV0750626 confirming the total cost to send the above aforementioned information was $21.80. I am sure Australia Post would confirm that a large amount of documents would have been enclosed in these two envelopes when they left Portland. (See My Story Evidence File 12-A to 12-B)

Australia Post will not charge any postage fee for an overnight parcel unless they stamp and retain it. Since neither of these parcels arrived at their proper destination with all of the information originally enclosed, those documents must, therefore, have been ‘lost’ between the Portland Post Office and the Magistrates Court.

As I have reported throughout this webpage numerous Telstra COT related arbitration documents (like those lost on route to the Federal Magistrates Court in December 2008) were also lost during 1994/95 on route to the arbitrator hearing my case.

As Darren’s letter shows, I helped him prepare his bankruptcy appeal against the Australian Taxation Office (for back taxes) using my own evidence that the Telstra Corporation, knowingly submitted two false and fundamentally flawed Cape Bridgewater reports to the arbitrator during my arbitration, to deliberately mislead the arbitrator into believing that there were no more ongoing phone problems affecting my business.

I use the two following Telstra FOI documents, folio I00271 and I00265 (see Our Saga File N0 3-A to 3-C) as a testament that the TIO knew my ongoing billing faults continued for years after my arbitration. Government records showing the TIO misled and deceived government ministers, over many years, concerning the validity of my claim. Telstra FOI document folio I00271 (File N0 3-A), dated 24 October 2002 has been used here to support that the TIO was fully aware of the ongoing telephone and faxing problems being experienced by Darren and Jenny Lewis after they purchased my business. This document folio I00271 states:

“The TIO have now raised a level 1 complaint on behalf of Mr & Mrs Lewis. The TIO has specifically mentioned in their correspondence that the TIO has previously investigated a number of complaints raised by [blank-blank] the previous account holder for this service in which similar issues were raised.”

The blanking out of my name does not hide the fact that I was the previous account holder of that telephone service.

The second Telstra FOI folio, I00265 (File N0 3-B), dated 24 October 2002, states:

“David Hawker MP has written to Senator Alston on 10 October and included a 3 October letter from Darren and Jenny Lewis. This 3 October letter has been cc'd to the TIO but does not seem to have made its way into Telstra yet. I will follow in Cicero and respond accordingly. Hopefully, the TIO will become involved, and that will take the Minister and Member out of the equation.”

I have highlighted FOI folio I00265 because it is a good example of how valid claims against Telstra was so easily be hidden from the relevant Minister in government, i.e., if the TIO became involved. 

It is clear from the above statement that these ongoing faults at Darren and Jenny Lewis.’ business would remain hidden if the then Minister (which was then-Senator Richard Alston) and the Member (which was The Hon David Hawker were kept “out of the equation.”

These were the same ongoing telephone faults that the arbitrator failed to investigate during my arbitration.

In August 2009 Darren and Jenny Lewis walked off the property as the result of a bankruptcy court order. The camp was sold for less than $600,000, even though the local real estate broker could have sold it two years previous for $1.2 million dollars (refer Cape Bridgewater Eco-Tourism Venture -) 



Chapter 12

Summing up the years


There is something in me that won’t let me walk away, that won’t accept defeat. For several years after my ‘award’ was handed down, I continued to make my case against the issues in my arbitration that were never addressed by the arbitrator; in every case to no avail.

Over the same years, the COT members have sent updated information supporting our various claims to Warrick Smith, Richard Alston, Amanda Vanstone and other appropriate ministers, officials, politicians and senators. I have provided documented proof, again and again, that my arbitration was not carried out according to the principles of natural justice. In 2014, I briefed the Hon. Tony Abbott, Prime Minister, the Hon. Malcolm Turnbull, Minister for Communications.

I have twice gone to the Administrative Appeals Tribunal seeking documents I had been promised for my arbitration, with limited success.

Three times I have complained to the Institute of Arbitrators. The first I have already described in Chapter 9. Then in 2001 the Institute agreed to investigate fresh evidence. This was the time Mr Nosworthy informed me the arbitrator was not qualified in the course of my arbitration. Despite this, the Institute found there was no case to answer. Finally in July 2009, the Institute of Arbitrators Mediators Australia (IAMA), again agreed to investigate further fresh evidence. Among other items of evidence, I submitted the words of the TIO at the Senate Estimates Committee, that the ‘process conducted entirely outside the ambit of the arbitration procedure.’[99]

In October 2009, I sent the IAMA further evidence from forensic technical consultants attesting that someone with access to Telstra’s network had been screening and intercepting claim documents pertaining to at least four separate COT arbitrations. This material showed that for at least seven years after my arbitration was concluded someone was screening and intercepting faxed documents leaving my residence and my business before redirecting that information on to its intended destination.[100] The arbitrator had officially agreed to address this issue of interception, but he did not. Under the terms of arbitration, he was legally bound to provide findings on all materials, but he made no reference to interception at all. This was clearly a matter for the IAMA. But their response when I proffered the supporting documentation was less than enthusiastic:

Presently, IAMA does not require this further documentation to be sent. However, the investigating persons will be notified of these documents and may request them at a later date[101]

No one has requested them.

I have had to ask myself, is it only me who sees the enormity of this interception of confidential, arbitration-related documents? Is it only me who is bothered about how many other Australian arbitration processes may be subject to this type of hacking, secretly and illegally screening documents before they arrive at their intended destination?

But I am not alone. One of the two forensic technical consultants attesting to the validity of their findings in that report, wrote to me on 17 December 2014:

I still stand by my statutory declaration that I was able to identify that the incoming faxes provided to me for review had at some stage been received by a secondary fax machine and then retransmitted, this was done by identifying the dual time stamps on the faxes.[102]

The last I heard from the IAMA Ethics and Professional Affairs Committee was in 2014. Despite their agreement to investigate, they refused to hand down any findings. I have asked them on many occasions and their refusal is implacable.

I went to the TIO to complain, but his response was brusque: ‘Your arbitration is over.’

One bright note did follow from the AFP investigation into the COT cases. Even though I was unable to benefit from their work, when the AFP reported to the Minister that COT claimants’ phone conversations had been intercepted, this led to amendments in the Telecommunications Interception Act in 1995, aimed at protecting users’ privacy.

So, it is true, my arbitration is over. Even so, I am still hopeful for justice from a system that promised to give it to us.

We COT members feel we have been let down by every government office we have approached for help in the face of a stonewalling Telstra and an uncooperative TIO. It is as if we are too small fry. Our problems don’t matter. We may receive replies from the relevant minister or department, but there is no follow up, no teeth in them. Only the Commonwealth Ombudsman has consistently performed its role in accordance with the principles of what is lawful and just. Ministers when in Opposition are helpful, but once they are in government, we become non grata again.

When I look back over the years since my ‘award’ was handed down I recall many moments when I contemplated giving up the fight. But how could I when the ‘award’ left out, ignored or dismissed so much? When the terms of the ‘award’ were based on fabrications and lies as blatant and easily uncovered as saying tourism numbers in my region had dropped over the period of my claim, when all the statistics showed an increase. When the chairman of Austel promised us consequential losses would be included in any awards made, but this did not happen? How could I after all the financial loss involved in preparing my case, and the business I lost, so that I was forced to re-mortgage three times just to stay in the fight to bring these matters to the attention of the Australian public and the communications minister?

If Telstra had addressed the issues of lost faxes and eavesdropping, I would probably have accepted the award — indeed, if the arbitrator had addressed the issue of lost faxes and eavesdropping, I would probably have accepted, albeit reluctantly. If the arbitrator had addressed the incorrect charging, I would have accepted. And if the arbitrator had raised the issue of Telstra using falsified and impracticable documents as part of their defence, I would not have questioned his integrity. If he had been appropriately qualified, I would have had more grounds for confidence in him. As it is, on so many grounds outlined in this book, the arbitrator was far from impartial and therefore not an independent adjudicator in my arbitration. But on all these issues my claims were effectively silenced — by being ignored.

As we have shown above and on my website, AUSTEL acted in concert with Telstra and removed the truth from their final AUSTEL COT Cases April 1994 public-release report so it read there were only 50 or more COT-case type of consumer complaints, instead of the more than 120,000 COT-type complaints their findings originally showed. This concealment by the government allowed the problems to escalate. The ongoing Australian Nation Broadband Network (NBN) fiasco, described on my website Bad Bureaucrats File No/11 – Part One and File No/11 – Part Two), show some of the problems experienced during the NBN roll-out between 2013 and 2018.

The same NBN issues are associated with the copper-wire network problems that the COT cases and other small-business operators suffered from, more than two decades ago.

In the latest covid-19 pandemic in Australia, small-business operators were offered a handout by the government: a Job Keeper Payment scheme, to help keep them trading. There was no such scheme for the COTs and other small businesses experiencing ongoing phone problems. Instead, the COT cases had to spend hundreds of thousands of dollars in arbitration fees (I spent well over $200,000) for the arbitrator and his technical consultants to locate the fault causes of the existing problems and demand Telstra rectify them. My story shows the arbitrator did not demand Telstra fix the ongoing problems: he only allowed his technical consultants (see Prologue/Chapter One) to investigate historic phone complaints, and not those still affecting my businesses.

What this Job Keeper scheme adopted by the Australian government and similar schemes adopted by other governments around the globe so that small business operator can survive this pandemic is that these governments recognize the closing down of a business due to this Covid-19 problem then restarting it again and then limiting how many customers those businesses are allowed to open their doors to shows the governments do under the catastrophic effect this has on the business. While it is clear on most occasions these schemes have saved the small business operator over the last twelve months; they never afforded the COT Cases such a scheme. Even though the arbitrator disallowed his technical consultants the extra time they alerted him was needed to investigate these ongoing problems that was still affecting the viability of those businesses as this story shows.

Chapter 13

Conflict of interest

No author should write only part of a story based on fact while leaving out a relevant part of the story because it might be seen as detrimental to another person in the story. A full factual account of what happened during the COT arbitrations is necessary: both the good and the bad.

So, I must raise a conflict of interest that clearly affected the whole outcome of the first four arbitrations. I felt it was best to leave this issue to last.

What has been decidedly the hardest decision for me to make since I began telling the COT storey is exposing the conflict-of-interest issue between Graham Schorer (Golden Messenger) and Dr Gordon Hughes (the COT arbitrator)

In the government regulatory communications authority - The COT Cases AUSTEL’s report of April 1994 at point 6.67 it states:

“the arbitrator is to be a person of clear impartiality, independence and integrity with expertise in relevant legal, technical and accounting issues to them and with experience in commercial assessment and arbitration.”

Letters provided by me to the government in 2008 and again 2011show Dr Hughes (the arbitrator) did not have expertise in commercial assessment and arbitration. I fact in my case, information I received from the Institute of Arbitrators Mediators Australia advises that Dr Hughes did not get his arbitration grading until well past the end of my arbitration. One letter I received from the Mr J L Muirhead, President of the Institute of Arbitrators Australia dated 10 September 1996 states:

“The Institute is a learned society whose principal functions is the training, examination and grading of arbitrators. It will also nominate suitable arbitrators from its list of graded, practising arbitrators if required to do so by the parties. It selects nominees of appropriate of technical expertise and grading (i.e. experience) from its published list.

I am advised by our Chief Administrative Officer that no reference was made to us in the appointment of the arbitrator in the matter in which you were involved and there is always a risk in these circumstances.”     

Senate Evidence File No 3 confirms that Telstra’s lawyers faxed their own drafted arbitration agreement to Warwick Smith, Telecommunications Industry Ombudsman (the administrator to our arbitrations) on 10 January 1994, before Dr Hughes was officially appointed on 17 January 1994. So, the government was misled into believing the arbitrator drafted the agreement when Telstra’s lawyers drafted it. The deception does not stop there.

This is the same arbitration agreement that Dr Hughes advised Warwick Smith was not a credible document to use in the arbitration process (see Open Letter File No 55-A-to 55-C) but still used it when he made his determination on my claims.

What (Introduction File No/15) also shows is, that the government was advised the Arbitration “rules would be based on the Victorian state Arbitration Act”, but on 26 September 1997, John Pinnock (the new TIO) advised the Senate and the government that the arbitration process “that the arbitrator had no control over the process because it a process conducted entirely outside the ambit of the arbitration procedures”. (See Arbitrator File No/71)

So, the collusion surrounding who drafted the agreement and the alleged qualifications of the arbitrator including his conflict-of-interest with one of the claimants (Graham Schorer) is still being hidden in 2021. How long is it going to take before the TIO office, and the Australian government finally accept that the first four COT arbitrations were NOT conducted in the manner the government and the claimants were led to believe they would be conducted if those claimants abandoned their already existing commercial assessment process?

The COTs, AUSTEL and the Senate were told that the president of the Institute of Arbitrators of Australia had drawn up the arbitration agreement rules specifically for the purpose, and independently of Telstra. The four COT Cases asked for a copy of these rules, which had already, apparently, been supplied to Warwick Smith’s office, but Warwick Smith refused their request, saying that it was ‘irrelevant to their cause’. More than once Ann Garms, and I have commented they asked Warwick Smith either singular or as a group for a copy, to no avail.

On 27 October 1998, more than three years after Ann Garms, Maureen Gillan and me had gone through arbitration the new TIO wrote to Pauline Moore, secretary of the Senate committee noting, that he had also refused to supply various members of COT  with a copy (see Senate Evidence File No 14).

The Cots were told they should trust Dr Gordon Hughes. And so, foolishly, they did. They really had no choice. They were all exhausted, stressed and clutching at straws. Singly and as a group, they were vulnerable to the force of Telstra’s corporate power.

The rules included a confidentiality agreement that prevented anyone involved in the arbitration process from discussing the conduct of the arbitration process. If either party committed an offence of a criminal nature, this confidentiality clause would effectively stop an investigation and thereby allow a cover-up. In my case, even though Warwick Smith and Dr Hughes were aware Telstra threatened me on more than one occasions during my  arbitration as well as tampered with evidence (see Tampering With Evidence) this confidentiality clause has so far stopped any investigation into this unlawful way in which our arbitration were conducted.

How this conflict-of-interest between Dr Hughes (the arbitrator) and Graham Schorer exposed itself.

A letter from Michael Shand barrister at Owen Dixon Chambers (Melbourne) to Landers & Rogers for the Attention of Mr Gordon Hughes or Mr Michael Champion’s secretary dated 15 June 1990 (Exhibit GS-448-A file GS-CAV 448 to 458) confirms Mr Gordon Hughes and a number of lawyers from Landers & Rogers were heavily involved in Graham Schorer's Telstra Federal court action against Telstra in 1990 to 1993. This letter from Mr Michael Shand, confirms that Mr Gordon Hughes was one of the principal lawyers involved in Mr Schorer’s Telstra Federal Court action prior to accepting his role as the COT cases arbitrator in January 1994.

Why did Telstra ignored Dr Hughes’ conflict of interest associated with Graham’s previous Telstra-related Federal Court action addressing the same telecommunication issues less than four years later? Did they allow Dr Hughes to become the COT arbitrator aware that just four years previous damning evidence against Telstra had been withheld from Mr Schorer by his legal in which Dr Hughes was the Principal advisor and therefore he or his arbitration unit might be called upon during the COT arbitrations to withhold similar damning documents from being assessed during the COT arbitrations.

The fact that Dr Hughes' arbitration resource unit have admitted withholding relevant Telstra related arbitration documents from being investigated during my own arbitration (see Open letter File No/45-H and Open letter File No/46-F to 46-K) suggests there is more to Telstra allowing Dr Hughes to become the COT arbitrator than meets the eye.

This internal Telstra fax (see following link Exhibit GS-448-A file GS-CAV 448 to 458) dated 2 November 1990 was a fax from Telstra’s Corporate Solicitors Office to Telstra’s then recognised chief technical engineer, regarding Telecom v Golden Messenger Federal Court Legal Proceedings, which notes, among other items:

(3)  Telecom will also need to inspect any documents lodged by Golden Messenger as part of its (GM’S) discovery obligations.

(4)   Telecom needs to examine those documents pertaining to the test carried out on North Melb Exchange to determine if any of those documents have been generated as a result of an “interception”. If so, then Telecom will be precluded from disclosing them under the discovery process. I intend to ask (name deleted) of network investigations to undertake this task.

(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 contents of the report on the North Melb Exchange. To date, there has been no response.    

A further internal Telstra minute dated 7 November 1990 that Telstra’s, Manager, Business Network Planning, sent Telstra's Executive General Manager, Telecom Business Services (FOI Folio 001801), noting that:

"It would appear that any concerns over the disclosure of the adverse report on the North Melbourne Exchange can now be set to rest as it will not be released until point (5) has been complied with" (refer exhibit GS-43 file GS-CAV 1 to 88

On 21 November 2012 Graham Schorer produced a letter of understanding that included:

"During the period that I retained Landers & Rogers, at no stage was I informed by Gordon Hughes or any other member of Landers & Rogers staff, that Telecom or the Australian Government Solicitor contacted them with information regarding the North Melbourne exchange.

Furthermore, had I known that Gordon Hughes had concealed knowledge of such an important document from me, I would not have accepted his appointment as the arbitrator in my arbitration process" (refer to exhibit GS-565 file GS-CAV 522 to 580. 

This 'Australian Government Solicitor' letter is important because, when the arbitrator was appointed as the official arbitrator to the COT arbitrationshe did not advise Graham Schorer of this AGS letter or the fact that documents were concealed from Graham during his Federal Court action by his own legal firm to which Dr Hughes was a partner.

Worse, if that is at all possible concerning this conflict of interest issue is, that the person who received the 2 November 1990 letter link, and then wrote his own interpretation of that same matter (see exhibit GS-43 file GS-CAV 1 to 88

These two documents, together in exhibit GS-43) file GS-CAV 1 to 88), was also named by a Telstra whistle-blower, Lindsay White, as the person who had told him (see pages 36 and 38 of Senate – Parliament of Australia), that the first five COT Cases, including Graham Schorer and me ‘had to be stopped at all cost’ from proving their 1994 arbitration claims.  It is therefore interesting to find that four years earlier, in November 1990, this same person was already aware that the 'adverse report on the North Melbourne Exchange' had been concealed from Mr Schorer during a Federal Court action against Telstra.

So, when Mr Hughes (now Dr Hughes) was first asked to arbitrate on the COT arbitrations of 1994, shouldn’t he have immediately declared his conflict of interest because of his involvement in Graham's previous Federal Court action between which commenced in 1990 and finished in 1993?

Advised the government and the Telecommunications Industry Ombudsman (the official administrator of the forthcoming arbitrations) that he was already aware that Telstra had threatened his office, back when he was assisting Graham in that Telstra-related Federal Court action, which was connected to exactly the same Telstra technical issues he was now being asked to arbitrate on.

These two documents exhibit GS-448-A file GS-CAV 448 to 458 and  exhibit GS-43) file GS-CAV 1 to 88) are directly related to the adverse findings of Telstra’s own investigations into the North Melbourne Exchange servicing Graham’s Golden Messenger courier business. Had Graham seen this AGS letter, concerning these adverse findings, he would hardly have accepted (two hundred thousand dollars) paid by Telstra when his official claim was for (two million dollars). The acceptance of the two hundred thousand dollars included exonerating Telstra from all liability. No sound-minded person, sitting on evidence such as the Australian Government Solicitors’ letter saying Telstra was grossly negligent under Section 52 of the Trade Practices Act and recommending settlement with Mr Schorer, would have accepted only 10 per cent of his claim.

If Graham's Federal Court legal team did not withhold that AGS letter, then who did? It is clear from exhibit GS 448-A file GS-CAV 448 to 458) and exhibit GS-43) file GS-CAV 1 to 88 that Telstra sent this AGS letter to someone.

This confusion with the AGS letter, the adverse findings Graham never saw and Dr Hughes’ involvement in Graham's previous Federal Court action, is the reason why most legal processes conducted in a democratic country (such as Australia professes to be) do not allow the type of conflict of interest that took place during the COT arbitrations. Why was this conflict of interest allowed to fester itself during the COT arbitrations?

I reiterate once again, when the arbitrator officially accepted his role as the COT arbitrator in January 1994, without disclosing this conflict of interest, he, compromised all four COT arbitrations.

In 2008, Graham’s Lawyers in Melbourne gave me numerous documents, concerning Graham’s 1990-1993 Federal Court action against Telstra, as well as three separate files, 16 legal manila folders and eight large storage boxes of Graham’s 1994-1999 Telstra arbitration.

If either the government or the TIO appointed a consultant to assess these two sets of documents, they would conclude that Dr Hughes (when he became the 1994 arbitrator to Graham’s arbitration) which lasted more than three years. Dr Hughes (as arbitrator over those three years) would have been assessing the same Telstra-related documents he previously assessed as Graham’s legal advisor during his earlier 1990 to 1993 Federal Court action against Telstra.

Thus, Dr Hughes (the arbitrator) would have once again observed Graham suffered a miscarriage of justice during his Federal Court action. Perhaps this is why either subconsciously or deliberately, he allowed Graham three years longer than he allowed me to access FOI documents from Telstra, during our respective COT arbitration’s.


The various pages in AUSTEL's (withheld report) prove quite clearly that Graham Schorer as the proprietor of Golden Messenger, was deliberately misled and deceived in several ways, on at least three separate occasions:

In July 1987, when Telstra installed the Flexitel system (an internal incoming call switching device) at his business premises, which was routed through the North Melbourne telephone exchange, they already knew it was faulty.

Why did AUSTEL ignore assurances made by their own Chairman, Robin Davey, to a Senate Estimates Committee, on 2 September 1993 (refer to GS 565 file GS-CAV 459 to 489), six months before his Government-endorsed Fast Track Settlement Proposal (FTSP) began?  Mr Davey had assured the Committee that if AUSTEL found that Telstra had knowingly misled and deceived their customers (and as we now know – they DID find in relation to Graham’s allegations/claims), under the Trade Practices Act, those matters would be dealt with in a settlement process.

It is important that Graham’s Flexitel (an internal incoming call switching device) must be fully understood because it was not allowed to be addressed in Graham’s arbitration process.

Unfortunately, this meant that the arbitration agreement signed by Graham and Telstra did not allow the arbitrator to assess those Flexitel issues because they were matters that had been part of Graham’s previous Federal Court action against Telstra in 1990, and Graham had accepted a settlement about that case. Yet as strange as it might seem, the arbitrator could address the many deficiencies in the North Melbourne telephone exchange to which this Flexitel was trunked through because that part of Graham’s arbitration was not part of the 1990 to 1993 Federal Court action. However, as the following Australia Government Solicitors letter shows, the North Melbourne telephone exchange was also part of 1990 to 1993 Federal Court action. Nothing makes any sense.

What does make sense is that Dr Hughes allowed Graham/Golden an extra three or more years longer to access his FOI documents from Telstra, over and above what he allowed us, three other COT claimants, even though the official arbitration rules did not permit this. Dr Hughes only allowed me one extra week to access my documents from Telstra shows how this conflict of interest tainted the whole arbitration process.

When I asked Graham to please explain why he had concealed this conflict of interest from me before arbitration as well as before commissioning me to write the COT story in he wrote his 21 November 2012 letter of understanding (refer to exhibit GS-565 file GS-CAV 522 to 580. 

For the second time within days after I had questioned him on these serious matters, Graham again confided in me his sense of guilt for not exposing this conflict of interest during the period the Senator was investigating his Freedom of Information FOI matters which awarded him 3,600 million dollars.

Lost arbitration faxes

Before the government communications regulator, AUSTEL (now AMA) endorsed Dr Gordon Hughes as the independent arbitrator, they had a duty of care to advise the COT Cases in writing that Dr Hughes was not an experienced arbitrator and had not been graded by the Institute of Arbitrators Australia to perform such complex arbitrations as the COT four processes. AUSTEL did not. Could you inform us of this fact?

Dr Hughes himself also failed his duty of care as a pending arbitrator to COT Cases Ann Garms, Maureen Gillan, and me in writing as per the rules of the Victorian Arbitration Act that he had a conflict of interest with the fourth claimant Graham. And to add further salt to the COT Cases future wounds was that Graham Schorer, in his capacity as COT spokesperson failed to disclose to us three other COT Cases (refer exhibit 717 file CAV Exhibits 701 to 756) that we should not send arbitration related faxes to Dr Hughes’ Melbourne office after the closing of business each day; otherwise, they may not arrive at their intended destination.

Front Page Part One File No/1 shows the arbitrator’s secretary advised Tony Watson (of Telstra’s arbitration defence unit) that on 23 May 1994, six of my claim documents did not reach the arbitrator's fax machine. Yet, I was charged on my Telstra account for those six faxes. Why was this matter not investigated? NO one from the arbitrator’s office or the TIO’s office allowed me to amend my claim so that the not received claim documents could be valued as part of my arbitration process.

Why didn’t Dr Hughes explain to me as he did to Graham Schorer (refer exhibit 717 file CAV Exhibits 701 to 756) that my 23 May 1994 faxed claim documents might be in his Sydney office? Did Dr Hughes believe by exposing this faxing problem with his Sydney office halt the arbitration process in my favour?

What we do know is, Dr Hughes concealed this faxing problem from us three COT Cases, except his past client, Graham Schorer.

Firstly, had Graham disclosed to the COT Cases before we signed our arbitration agreement, we would have been in our rights to demand Dr Hughes supply an efficient faxing system throughout our arbitrations.

Secondly, we could have used this the faxing problem between Dr Hughes Melbourne and Sydney office to support any arbitration appeal in the period allowed in our arbitration agreement.

It is important to link these unaddressed lost arbitration faxes to both my case and that of Ann Garms (now deceased), because it is well written, she lost many faxed arbitration-related documents as well as me.

Ann Garms spent over $600,000.00 in her arbitration appeal in the Supreme Court of Victoria against Dr Hughes. Ann might have had a more favourable outcome of this appeal which she lost had she and her lawyers known of Dr Hughes admission to Graham before the commencement of our four arbitrations. 

On 16 February 1996, Dr Hughes wrote Laurie James, President of the Institute of Arbitrators Australia. Mr Pinnock knowingly misinforms Mr James stating:

"contrary to Mr Smith's assertion on page 3, his 24,000 (sic) late FOI documents were all viewed by me and Ferrier Hodgson Corporate Advisory, DMR Group Inc. (Canada) and Lane Telecommunications".  

Chapter fifty-one explains, however, how Dr Hughes went on to mislead and deceive Mr James about these 24,000 documents that the arbitrator and his team could not possibly have read and collated. So why did the arbitrator choose to tell Mr James he had assessed all those documents?   If either Mr James or Senator Evans were planning an investigation into those 24,000.00 documents that were withheld from Alan so that, when he eventually got them, it was too late in submitting them to the arbitration, then it could only have been the arbitrator’s wrong and misleading advice to Mr James, which the TIO then copied to Senator Evans, that thwarted those plans.  So far, the arbitrator has managed to get away with this misleading, deceptive, and unconscionable conduct.

7 May 1996: Mr Pinnock writes to Alan.

"If you have complaints about the conduct of your arbitration procedure, I suggest you seek legal advice on the availability of review or an appeal. …

In your letter of 3 May 1996, you request that I ask Telstra why they chose not to defend allegations raised in your claim regarding your 008 services.

I advise that any further request by you for a review or investigation of (or comment on) the substantive issues in your completed arbitration will not be answered".   (AS 215)

If Dr Hughes had exposed his conflict of interest with Dr Hughes as well as advising Mr James that, is he has so far given twelve months longer to access the same type of documents from Alan a twelve-month period that went on be 3 years. Laurie James may well have instigated an investigation into my claims.

For Dr Hughes to have been fully aware that I had been so severely disadvantaged by this withholding of FOI document but still advise Laurie James contrary to what Dr Hughes knew about the ongoing threats I had received concerning these withheld documents, was clearly discriminative against me once he allowed Graham Schorer more than 36 months longer than he allowed me access to.


Arbitration:- Hearing to settle a civil dispute.

ARK:- A type of  Telstra telephone exchange, designed in the 1970s, still in use in a number of areas up to the time of the COT claims (see also RAX)

Austel:- The Australian Telecommunications Regulator (the ‘umbrella’ organisation)

BCI:- Bell Canada International Inc, technical telecommunications specialists from Ottawa, Canada

CAN:- Customer Access Network (the line from a customer’s telephone to the nearest connection to their local exchange).

Casualties of Telecom:- see ‘COT’

Casualties of Telstra:- see ‘COT’

CCAS:- Telstra’s ‘Call Charge Analysis System’ used for testing purposes

CEO:- Chief Executive Officer


Assessment:- Binding agreement, decided without legal intervention


Ombudsman:- The Commonwealth Ombudsman is responsible for investigating complaints about Commonwealth Government departments and authorities

Consequential Losses:- Losses which follow as a result of a particular action or situation (eg, loss of income or profit resulting from a faulty phone service which means that customers can’t reach a business and so take their custom elsewhere as a result)

COT: Casualties of Telstra (formerly Casualties of Telecom); a group of small-business people who banded together because all their businesses suffered from major telephone problems which they had not been able to have corrected by Telstra

COT four:- The inaugural members of the COT group:  Ann Garms, Alan Smith, Graham Schorer and Maureen Gillam

Discovery Documents:- Legal term indicating documents relating to compulsory disclosure of facts (often ordered by a court)

Elmi:- Telstra monitoring equipment used to check the phone lines from the local exchange to the customer’s premises

Erlings:- Telecommunications measurement system used to evaluate the number of calls a specific exchange can handle at any one time

FHCA:- Ferrier Hodgson Corporate Advisory (accounting and liquidation firm)

FTAP:- Fast Track Arbitration Procedure — the second process set up in an attempt to settle the COT claims

FTSP:- Fast Track Settlement Process, a specially designed, non-legalistic commercial assessment process, specifically designed for the original four members of COT

FOI:- Australia’s Freedom of Information Act which, for a small fee, allows any citizen to request copies of documents pertaining to themselves or their business, from any Government department or instrumentality

Hansard:- The unofficial name given to the daily printed reports of Australian parliamentary debates.  This is a verbatim transcription of proceedings.  Although members of parliament are permitted to improve the grammar or clarity of what they have said, they are generally not permitted to change the content

Litigation:-A legal hearing

MP:- Member of Parliament

MUX:- Telephone equipment at a local exchange

Natural Justice:- A legal philosophy which is instinctively known to be right and fair

NCA:- National Crime Authority

NEAT testing:- Ericson’s evaluation test for accuracy in the transmission between the network and the exchange (RCM).  While this equipment is connected to the line no other testing can take place.

Procedural documents:- Documents used in a legal process


PTARS:- Telephone testing system which is installed in a local exchange to count the number of calls on a designated line

R00 faults:- When the phone rings once or twice and then stops before it can be answered

RAX:-A type of Telstra telephone exchange, designed in the 1940s / 1950s, specifically for low-call-rate areas only (see also ARK)

RCM:-Modern unmanned local telephone exchange mainly used in rural areas

RVA:-Recorded Voice Announcement, e.g. “This number is no longer connected”

STD:- Subscriber Trunk Dialling:  timed calls, charged according to the distance between the connected telephones

Telecom:-Australia’s monopoly, Government telecommunications company (later became Telstra and was partially privatised in 1997)


Industry Ombudsman:-see TIO

Telstra:-Australia’s monopoly, Government telecommunications company (previously called Telecom; partially privatised in 1997)

TIO:-The Telecommunications Industry Ombudsman’s office is an industry funded ‘watch dog’ operation that resolves complaints made against telecommunications carriers and service providers.  It was set up in 1993.  The TIO has 650 member organisations and 13 investigation officers who deal with an average 1200 complaints a week.                                    

WRIT:-A written document issued to an official directing him/her to act (or abstain from acting) in a certain way


Example 1:  File AS 942 - AS-CAV 923 to 946 

Example 2 :  File 34-C - AS-CAV Exhibit 1 to 47

AS-CAV Exhibit 1 to 47 – AS-CAV Exhibit 48-A to 91AS-CAV Exhibit 92 to 127AS-CAV Exhibit 128 to 180AS-CAV Exhibit 181 to 233AS CAV Exhibit 234 to 281AS-CAV Exhibit 282 to 323AS-CAV Exhibit 324-a to 420AS-CAV Exhibit 421 to 469 – AS-CAV Exhibit 470 to 486AS-CAV Exhibit 488-a to 494-e –AS-CAV Exhibits 495 to 541AS-CAV Exhibits 542-a to 588AS-CAV Exhibits 589 to 647AS-CAV Exhibits 648-a to 700 – AS-CAV Exhibit 765-A to 789AS-CAV Exhibit 790 to 818AS-CAV Exhibit 819 to 843AS-CAV 923 to 946 – AS-CAV Exhibit 1150 to 1169AS-CAV 1103 to 1132AS-CAV Exhibit 1002 to 1019AS-CAV Exhibit 996 to 1001 – GS-CAV Exhibit 1 to 88GS-CAV Exhibit 89 to 154-bGS-CAV Exhibit 155 to 215GS-CAV Exhibit 216 to 257GS-CAV Exhibit 258 to 323GS-CAV Exhibit 410-a to 447GS-CAV Exhibit 448 to 458 GS-CAV Exhibit 459 to 489GS-CAV Exhibit 490 to 521GS-CAV 522 to 580GS-CAV Exhibit 581 to 609

Below are the Exhibit numbers discussed in this book  Fraudulent, Treacherous Conduct Book 2 which can be accessed from the above Exhibits File

[1] Telstra internal memo, 3 November 1993 (AS6 file AS1 to 47).

[2] 26/9/1993 (AS6 file AS1 to 47).

[3] Telstra file note 15/8/91 (AS4 file AS1 to 47).

[4] 1 September 1992 (AS12 file AS1 to 47).

[5] 18 September 1992 (AS13 file AS1 to 47).

[6] 12 July 1993 (AS30 file AS1 to 47).

[7] Points 73 to 109 AUSTEL’s Adverse Findings confirms the RVA problems went for years (not days) as Telstra advised the senate and arbitrator (under oath) was the case.

[8] (AS5 file AS 1 to 47).

[9] 13 October 1992 (AS11 file AS 1 to 47).

[10] AS767-A file AS-CAV 765-A to 789

[11] Telstra memo 25 November 1993 to the Corporate Billing Directorate in Brisbane (AS1154 file AS-1150 to 1169).

[13] Telstra fault record (AS1003 file AS-CAV-1002 to 1019).

[15] AS694 file AS 648 to 700

[16] Draft Austel Report, 3 March 1994 AUSTEL’s Adverse Findings.

[17] The COT Cases, Austel’s Findings and Recommendations, April 1994 (is a public report).

[18] 21 April 1993 (AS1163 file AS-CAV 1150 to 1169 

[19] 28 September 1993 (AS1164 file AS-CAV 1150 to 1169 

[21] Telecom memo, 15/11/93 (AS927 file AS-CAV-923 to 946).

[23] Austel to Telstra letter, 9 December 1993 (AS1166 file AS-CAV 1150 to 1169).

[24] AS1167 file AS-CAV 1150 to 1169.

[25] FOI request of 18 October 1995 (AS226 file AS-CAV 181 to 233 ).

[26] 6 September 1994 (AS1168 file AS-CAV 1150 to 1169).

[27] Bell Canada International Report, 10 November 1993.

[28] Austel Report: The COT Cases, Table 7.1, p. 157, and points 7.21–7.23.

[29] Cited in Brian Hodge Report (Main Evidence File No 3)

[30] Brian Hodge Cape Bridgewater report (Main Evidence File No 3).

[31] Austel Report: The COT Cases, p. 165, point 7.33.

[33] 23 August 1994 Exhibit 9-C Telstra’s Falsified BCI Report.

[36] The COT Cases: Austel’s Findings and Recommendations, April 1994 (public report).

[37] Exhibit 121 file  GS-CAV 89 to 154-A

[39] 9 June 1993 Arbitrator File No/93 

[40] The COT Cases: Austel’s Findings and Recommendations, April 1994 (public report).

[41] ibid., point 7.39.

[42] ibid.

[43] Internal Telstra email, 26 April 1994 (AS 72 file AS 48-A to 91).

[44] NRR: not receiving ring.

[45] 7 April 1994, 2.05 pm, AFP Evidence File No 8).

[46] AFP transcript, question 58 AS-CAV 48-A to 91).

[47] June 1993 (AS518 file AS 495 to 541).

[48] Austel letter to Telstra’s Group General Manager (AS52-B file AS 48-A to 91).

[49] Senate Hansard records 25/2/94, p. A133 file AS 128 to 180.

[53] Arbitrator’s transcript, pp. 100–102 (AS74 file AS 48-A to 91).

[54] In the award, at point 5.3. (While this wording is not grammatical, it is quoted verbatim.)

[55] 16 November 1994 (AS 124 file AS-48-A to 91

[56] AS541 file AS-495 to 541

[57] I also provided this sworn statement contained to the Prime Minister’s office and the AFP in 2014.

[58] 2 February 1995 (AS 573 file AS-542 to 588).

[59] 4 July 1994, letter to Telstra’s (AS 85 file AS-48-A to 91)

[61] Australian Senate Hansard, 29 November 1994, p. 12 (AS 87 File AS-48-A to 91

[62] AS1000 file AS-CAV-996 to 1001

[63] Telstra’s T-200 Report (Tampering With Evidence).

[64] AS634 file AS-589 to 647

[65] AS147-B file AS-128 to 180

[66] AS1126; AS1127 file AS-1103 to 1132

[67] AS665-B file AS-648 to 700

[68] AS665-A file AS-648 to 700

[69] (Exhibit 238 file AS-CAV 234 to 281 confirms on page two, I raised these Commonwealth Ombudsman billing issues with Telstra’s Lyn Chisholm on 14/1/98

[71]  Prologue/Chapter Two

[72] AS179 file AS-128 to 180 and Prologue/Chapter Two

[73] Names have deleted to protect individual Telstra employees. The author and other COT claimants believe that a number of Telstra employees were pressured by the Telstra Corporation into giving false statements in support of Telstra’s defence.

[74] Cape Bridgewater Holiday Camp award, p. 28.

[75] 19/3/94 (AS1153 file AS-1150 to 1169 -).

[77] 16 December 1994 File 46-J - Open letter File No/46-A to 46-l

[78] AS205 file AS-181 to 233

[79] AS 179 file AS 128 to 180

[80] Letter from Nosworthy file AS173 - CAV Exhibits 701 to 756

[81] File AS 205 - AS-CAV 181 to 233.

[82]  File AS 179 - AS-CAV 128 to 180

[83]  File AS 157 - AS-CAV 128 to 180

[84] Financial Review, 23 March 1999.

[85] Letter from the Attorney General Department, 18 August 1998.

[86] Arbitration transcript, pp. 31 and 32 (File AS101-AS-CAV 92 to 127).

[87] File notes, AS 498 AS-CAV 495 to 541

[88] File AS 104 - AS-CAV 92 to 127 

[89] File AS 201- AS-CAV 181 to 233

[90] File AS 788A to AS 792B - AS-CAV 765-A to 789.

[91] File AS 257 AS-CAV 234 to 281.

[92] File AS 220 AS-CAV 181 to 233

[93] Frank Blount, Bob Joss, Managing in Australia, 1999, pp. 132–3.

[94] 8 November 2002 File AS643 - AS-CAV 589 to 647

[95] 7 November 2002 File AS167 - AS-CAV 128 to 180

[96] 23 January 2003 File AS565 - AS-CAV 542 to 588

[97] 4 September 2006 File AS520 - AS-CAV 495 to 541 -

[98] 23 February 2007 AS 629 file AS-CAV 589 to 647)

[100] January 2009 Open Letter File No/12, and File No/13 .

Absent Justice Ebook

Read Alan’s book
A true story

  1. Spying during the COT arbitration by public servants were tolerated by the Australian government during the COT arbitrations as well as during their own business dealin, including the use of electronic surveillance equipment, to gain an illegal advantage over litigants during court proceedings and private negotiations. See Chapter 4 Government spying/Scandrett & Associates facsimile interception report, Open Letter File No/12 and File No/13.
  2. Unaddressed threats carried out by the Telstra Corporation against the COT Cases during their arbitrations. See Senate Evidence File No 31
  3. Withholding important discovery documents in an arbitration procedure: Absent Justice Part 2 - Chapter 14 - Was it Legal or Illegal?
  4. Tampering with evidence in the arbitration: Tampering With Evidence.
  5. Relying on defence documents that are known to be flawed: Telstra’s Falsified BCI Report); 
  6. AUSTEL (for the government) concealed vital evidence from the arbitration process that would have won my case:  AUSTEL’s Adverse Findings at points to 212.
  7. The arbitrator ordered the removal of vital evidence from two reports: Refer to Chapter 1 - The collusion continues and Chapter 2 - Inaccurate and Incomplete
  8. Organized crime via the Telstra network, i.e. telephone calls and faxed documents intended for one business being redirected to another with the proceeds of that directed information earning the criminals involved millions of dollars in ill-gotten gains Refer to Chapter 4 Government spying and Australian Federal Police Investigations-1Fraud allegations against Telstra during the COT arbitrations were registered with the Major Fraud Group Victoria Police by Barrister Sue Owens, only to be squashed under pressure by the Australian government (see following transcripts Major Fraud Group Transcript (2)) 
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“Only I know from personal experience that your story is true, otherwise I would find it difficult to believe. I was amazed and impressed with the thorough, detailed work you have done in your efforts to find justice”

Sister Burke

“I am writing in reference to your article in last Friday’s Herald-Sun (2nd April 1993) about phone difficulties experienced by businesses.

I wish to confirm that I have had problems trying to contact Cape Bridgewater Holiday Camp over the past 2 years.

I also experienced problems while trying to organise our family camp for September this year. On numerous occasions I have rung from both this business number 053 424 675 and also my home number and received no response – a dead line.

I rang around the end of February (1993) and twice was subjected to a piercing noise similar to a fax. I reported this incident to Telstra who got the same noise when testing.”

Cathy Lindsey

“…the very large number of persons that had been forced into an arbitration process and have been obliged to settle as a result of the sheer weight that Telstra has brought to bear on them as a consequence where they have faced financial ruin if they did not settle…”

Senator Carr

“…your persistence to bring about improvements to Telecom’s country services. I regret that it was at such a high personal cost.”

The Hon David Hawker MP

“A number of people seem to be experiencing some or all of the problems which you have outlined to me. …

“I trust that your meeting tomorrow with Senators Alston and Boswell is a profitable one.”

Hon David Hawker MP

“…your persistence to bring about improvements to Telecom’s country services. I regret that it was at such a high personal cost.”

Hon David Hawker

“All that is required for evil to triumph is for good men to do nothing”

– Edmund Burke