CAV Part 1, 2 and 3

CAV Part 1, 2 and 3

For the purpose of this report, I shall refer to myself as either Alan Smith or Alan.

Accessing the evidence

When this manuscript telling the COT story was first contemplated (see Absent Justice My Story) it quickly became clear that it would be very difficult to believe that a saga like this could continue for twenty or so years, in a democracy like Australia, but there are untold numbers of official documents that prove the truth of the story, every step of the way and copies of those actual documents are included throughout the book.  It is the documents that help to explain the frustration that the COTs have had to deal with, for all those years.  When the arbitration process was first suggested, the COTs, who would officially be ‘the complainants’, expected a qualified, arbitrator, an ombudsman who would search for the truth. Unfortunately, those expectations couldn’t have been further from reality!

Back in 2007, before Graham Schorer (Golden Messenger – Courier Service) and Alan Smith (Cape Bridgewater Holiday Camp) ever thought of putting their story into a book, they began to compile a database to record the thousands upon thousands of documents they were collecting, and, since then, between them, they have completed eight separate, detailed reports, each one with a multiple of supporting documents.  Four of those reports are directly related to Graham (GS) and Alan (AS) and four are related to other people who were involved in the COT saga, e.g. various public officials, the TIOs’ office and a number of government ministers.  As the process of putting their story into a publication the reader could clearly understand it became clear that this was going to be even more complex than anyone had expected and, so that Graham and Alan could be positively sure of the facts, they also set up a separate database to keep track of all the people who were important to their cases. Each individual record in this database includes a separate document describing how that person is connected to the COT story, a list of their professional qualifications and at least one FOI or other official document related to each individual.  That profile database now covers 171 individuals.

The same simple document numbering system is used throughout our reporting; any document referred to by a number preceded by GS relates to Graham and anything preceded by AS relates to me.  If ‘CAV’ is included after those initials, this indicates that the documents are filed in our main database under ‘Consumer Affairs Victoria.

All the main statements made in our story are supported by Exhibit documents which have been transferred onto the CD which has been enclosed with our story.  Each entry in our story (e.g. GS 1 etc.) refers to an Exhibit with the same number (e.g. Exhibit 1 supports entry CAV GS 1) and the Exhibits on the CD are divided into separate website links > GS-CAV 1 to 88GS-CAV 89 to 154-A – GS-CAV 155 to 215 – GS-CAV 216 to 257 and AS – CAV 1 to 47 – AS-CAV 48-A to 91 – AS-CAV 92 to 127 – AS-CAV 128 to 180 etc

We have recorded at least ten lines, and sometimes three-quarters of a page of information for each person and supported that information with at least one FOI or other document related to each individual we researched.  That profile database now includes 182 individuals. We have decided to detail this research and record-keeping as a testament to the amount of work that has gone into preparing our final story.

Although we originally planned to produce this story as just that a story, we quickly found that the details are easier to follow if they are sorted into separate topics and in date order, because each of those individual topics has been spread out over many years.  The topics we have chosen include, among others, the general deception and corruption that contaminated the TIO administered arbitrations; the illegal interception of many documents legally submitted to the arbitration by the claimants; the details of documents that were lodged with the arbitration but never addressed or referred to in the awards; discovery documents that were requested under the agreed process of the Freedom of Information Act but were either not supplied, supplied in part format, wrongfully withheld under legal professional privilege and/or defaced/blanked out rendering the document illegible, undecipherable and documents that were apparently somehow lost in the fax system and therefore never reached the arbitrator.  Taken together, these topics all contributed to the end result – an entirely undemocratic arbitration process.

It is most important for the reader to understand how difficult it has been to write an unbelievable story for who in their wildest dreams would truly believe lawyers, not just one lawyer, but many would go against the teachings they agreed to abide by when at university when they were studying to become lawyers. Who, even though it has become clear from the many corruption scandals that have shaken the very foundation of State and Federal Parliament in 2013 that as they go through this story they will observe that any matter of importance in Alan’s story and/or in the Graham Schorer addendum Conflict of Interest segment at the conclusion of this story is supported by evidential material which can be accessed from the accompanying CD as discussed aforementioned above.

When Graham signed his 1999 Deed-of Release, he was not aware that the Telstra Corporation and the Government Communications Regulator had withheld their knowledge that Graham’s claim had already been substantiated by the Australian Government Solicitor in 1990. This meant that Telstra and the Communications Regulator deliberately chose to let Graham go through an expensive and complicated arbitration process by choosing not pass on the information that it was secretly known that his claim was valid.  This led to Graham wasting a further NINE years of his life as he attempted to prove something that the Government regulator AUSTEL had already proved to be true, which is really mind-blowing on its own but then, in 1999, after this facade had been executed, he was forced, under threat, to accept less than 30 per cent of his arbitration claim, and he was denied reimbursement of the costs that this facade had cost him; this goes well beyond all reason.

When Graham signed this Deed of Release he also agreed that he would not continue any further claims against Telstra and so before we tell the rest of Graham’s terrible story, we want to be 100% sure that we can expose what Telstra and the government communications regulator collectively did to thwart the justice Graham has been denied.  This is why we are now in the process of seeking legal advice from the current Government in relation to whether Telstra was actually allowed to conceal such important information from the arbitrator, before Graham signed the arbitration agreement in an attempt to prove what the Australian Government Solicitors had already proved, i.e. that Graham’s case was completely justified, and that there was, therefore, no need for him to prove again what had already been officially proved and accepted.

After the Government Communications Regulator’s 1993 and 1994 investigation into Graham’s communications complaints had uncovered what Telstra had been concealing from Graham for more than three years, and the Regulators themselves ALSO concealed this fact from Graham, both before and during his arbitration, well that is truly beyond contempt.

It is these issues that, in September 2018, we are currently seeking legal advice about, before we continue on with Graham’s story.

Was the concealment collusion?

COT Case Graham Schorer shows in our Open Letter File No/35 link > 20130627133948062. that, although the Australian Government Solicitor (AGS) warned Telstra that Graham Schorer (COT spokesperson), of Golden Messenger Courier services, had a valid claim against them for misleading and deceptive conduct under section 52 of the Australian Trade Practices Act and advised Telstra should settle with Mr Schorer, Telstra ignored the AGS. For the next NINE years, Telstra went on a deliberate campaign to destroy Mr Schorer’s credibility and his finances even though they knew the AGS was right.

On age 23 of the government communications regulatory draft findings on Golden Messenger (see 20130627133948062: it notes:

“Telecom Minute of 30/3/88 states that advice from Legal and Policy Headquarters indicate that Golden Messenger appeared to have a case against us…and…the Australian Government Solicitor had advised Telecom that Golden Messenger is likely to be successful in establishing that Telecom engaged in misleading and deceptive conduct contrary to the Trade Practice Act and that consequence of lost calls or calls not getting through was likely to lead to an immediate loss of business in relation to that call and potential loss of future business from the customer”.

Exhibits 20111025143553046 and 20130627133948062. were not released to Graham until October 2008, fourteen years too late to be used in his arbitration or during the Senate Estimates Investigation into why relevant documents were being withheld from Graham during his arbitration. In other words, if AUSTEL had provided their adverse findings against Telstra to Graham and the Senate Estimates Committee during that 1997/1999 Committee investigation, it would be fair to say that the Committee would have immediately ensured that Telstra didn’t pressure Graham into accepting compensation of only 33% of his arbitration claim and that 33% did NOT include the thousands upon thousands of dollars Graham had wasted on legal fees to prove something that the government regulator had already proved.

Stretched to the limit 

The Telstra briefing note in Conflict of Interest shows, at point 5, that the Australian Government Solicitor, on behalf of Telstra, wrote to Graham’s legal advisors instructing them “not to disclose to their client [Graham Schorer] or other the content of the report on the North Melbourne Exchange”. It is important to note the author of this exhibit later became chair of the Telecommunication Industry Ombudsman board: the same TIO office that administered the COT arbitrations.

This shows that people holding a higher level of service within Australia’s telecommunication industry are fully aware of how the system took Graham’s business life, destroyed it and then sat by while he was forced to spend hundreds of thousands of dollars in legal fees in a process that lasted for FIVE GRUELLING YEARS in proving his claim, while fully aware his claims were proven correct by none other than the Australian Government Solicitor and the government communications regulator. Even worse is that the receiver of  briefing note copied this briefing note to a person in another department in Telstra and noted:

“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.”

This point 5 is point 5 in the enclosed briefing note that confirms Graham’s lawyers were actually being threatened by the Australian Government Solicitors not to disclose this North Melbourne Exchange report to their client, Graham.

Of course, Dr Gordon Hughes, one of the lawyers being threatened, later became the COT arbitrator, four years after this event. Amazingly, Dr Gordon Hughes never openly disclosed to the COT cases his prior involvement in this Telstra matter nor the threats made by the AGS.

While this conflict of interest matter is alarming enough, equally alarming is that the receiver of the Conflict of Interest exhibit is also the author of this briefing paper at An injustice to the remaining 16 Australian citizens/ see bottom of page under the heading Conflict of Interest. This same person (Peter) was also named in the Senate estimates on 24 June 1997, by a Telstra whistleblower, as advising him that the first five COT cases (naming Graham as one of the five) had to be stopped at all cost from proving their claims see Senate – Parliament of Australia.

This same person (Peter), therefore knew full well that Graham’s arbitration claim had already been proved to be valid by none other than the Australian Government Solicitor but still Graham’s arbitration went ahead, as soon as he had formally signed for the Fast Track Settlement Process on the 23 November 1993.  Then, because no-one told Graham at the time that his claims were actually accepted as valid, the tormenting, legalistic process continued, without respite, until April 1999. It is impossible to even begin to calculate the damage this caused to Graham’s life, both for his business life and for his private life, mentally and physically, as he was forced to live through so many years with this stress constantly mounting. Those within the Telstra Corporation, and within the Government communications regulatory department, who stood by and allowed this stressful process to drag on for more than five long years, while they all knew that Graham was right and Telstra was wrong, should be charged for Crimes against humanity, which is defined as ‘certain acts that are deliberately committed as part of a widespread or systematic attack or individual attack directed against any civilian or an identifiable part of a civilian population.’ (See > Crimes against humanity – Wikipedia).

The first Peter on page 39 in the Senate Hansard – Parliament of Australia is the ex-Telstra employee, who lied under oath in his witness statement provided to the arbitrator hearing my case (see Telstra Falsified SVT Report). Amazingly, the Telstra executive Ted Benjamin names on page 39 of this report was also a TIO council member, who admitted to the following Senate Estimates hearing on 26 September 1997 (see page 109 > COMMONWEALTH OF AUSTRALIA – Parliament of Australia) as not disclosing his conflict of interest when attending TIO council meetings where COT case issues were discussed, fed privileged TIO council-discussed material to fellow Telstra executives as the following exhibit > TIO Council Conflict of Interest 30 Nov 1993 shows. A detailed explanation of this damning exhibit can be read by clicking onto > Chapter One Telecommunication Industry Ombudsman).

As far as the COT cases receiving their basic legal rights as claimants during their TIO-administered arbitrations, that right was NEVER afforded them see page 99  COMMONWEALTH OF AUSTRALIA – Parliament of Australia by the Commonwealth who originally endorsed our arbitrations.

Letter to the Prime Minister 

In Alan’s letter of 28 October 2013 to the Hon Malcolm Turnbull MP, Federal Minister for Communications (AS 1052) he noted:

“I am sure that you, as a very smart lawyer, will be able to see, once you have read the enclosed document addressed to Dr Hughes and Mr John Rundell titled Alan Smith – Characterisation of misconduct summary October/November 2013, and the Exhibits on the enclosed CD that my claims are not frivolous and I am not a vexatious litigant.

As you would know, the Commissioner’ in both the Fitzgerald and Justice Woods Royal Commissions clearly specified that it was totally unacceptable for police divisions to be allowed to investigate allegations of misconduct within those divisions. These two Royal Commissions, including the Independent Commission Against Corruption and the Australian Crime and Misconduct Commission, further confirm that what the first TIO allowed to happen during the COT arbitrations should NEVER have been tolerated, in any sense of the word. It is alarming enough to learn that TIO allowed Telstra (the defendants) to attend monthly TIO Board and Council meetings when COT arbitration issues were  discussed (see Senate Estimates Committee Hansard dated 26 September 1997), and  brokered a secret deal with Telstra so that the TIO’s Arbitration Resource     Unit would be given the power to decide which documents the arbitrator would see during the arbitration and which would be concealed but there were other, similarly appalling events that the TIO appeared powerless to stop taking place during my arbitration.

On 12 February 2014, the Hon Malcolm Turnbull wrote to Mr Daniel Tehan MP, Federal Member for Wannon (AS 1025) noting:

“I refer to your correspondence dated 6 December 2013 on behalf of Mr Alan Smith concerning consumer issues. Mr Smith has contacted this portfolio on a number of occasions in relation to various issues, which have been previously considered by the Department of Communications. These matters were first raised in 1988 and over the last 20 years all avenues for consideration both within Telstra and the Government have been exhausted.

As there is no new information raised in the correspondence from Mr Smith, I am unable to provide further assistance in this matter”.

This letter is a perfect example of the sort of merry-go-round that I have been dealing with for more than twenty-two years, a situation that has been solely created by the Australian Government and their minders, even though these minders know that my claims are valid.  An important issue that is not discussed in the Malcolm Turnbull letter is that although Mr Turnbull’s minders, who are all public servants, know that someone with access to the government carriers networks hacked into and screened faxes travelling to and from the premises of the COTs and their lawyers and advisors, and even Mr Turnbull’s minders know that if this screened confidential material was then passed on to the defendants (who owned the network)  it would have provided them with an advantaged gained illegally. And yet Mr Turnbull’s minders are is still prepared to say that: “… all avenues for consideration both within Telstra and the Government have been exhausted”.  Is the author of Mr Turnbull’s letter actually implying that it is OK for the previous defendants in the arbitration to investigate itself for hacking into the claimants faxed claim material during those arbitrations in which those defendants were party to?  How can Mr Turnbull suggest that a self-investigation legitimately proves that the previously owned government telecommunications carrier has no case to answer, when my Exhibits in our Main Evidence File No 7 & 8) prove that this hacking did take place?  We have to go no further that the Murdoch News of the World hacking scandal in the UK to find answers to those questions because surely neither the British public nor the British Government would ever have allowed the Murdoch’s to investigate their own hacking? And yet, here in Australia, the Government simply accepts whatever this Corporation says as fact, without question.

When the Hon Malcolm Turnbull signed his 12 February 2014 letter, including his comment that: “… all avenues for consideration both within Telstra and the Government have been exhausted”, did he not remember his own involvement as a lawyer in the famous Peter Wright Spycatcher trial (Mr Wright was a former Assistant Director of M15)?  Since Mr Turnbull had once been a qualified, practising, leading Barrister in cases such as the Spycatcher trial, surely he would know that the Telstra’s destruction of evidence needed in a legal proceeding was a serious crime, so why has he allowed Telstra to investigate themselves in relation to my claims?

In October 2007, after meeting with me and two reliable witnesses, Consumer Affairs Victoria (CAV) asked that I prepare the evidence supporting my claims in the manner currently presented in absentjustice.com (CAV folder files, AS CAV and GS CAV). Peter Hiland, Consumer Affairs Victoria (CAV) senior barrister, read much of my submission. He then asked one of the witnesses – a very prominent ex-senior member of the Victorian police who had held the position of commander, as well as the Order of Australia – for the same evidence to be provided on a CD so as CAV members could appreciate the true extent of the cover-up that transpired before, during and after the COT arbitrations. I, of course, I created the CD because Mr Hiland clearly remarked that, as a barrister serving with the Victorian government, he had been waiting for this type of evidence for more than a decade. However, over the next 18 months, the investigation folded and my advisor and I were told the government was no longer interested. I raise this CAV issue because, in 2008, I submitted the same evidence, still titled AS-CAV and GS-CAV, to the Australian Communications and Media Authority in order to gain further Freedom of Information documents from the Australian government through the office of the Administrative Appeals Tribunal. In this way, the evidence on this website absentjustice.com has been in the public domain since 2007 and in front of three government agencies; not one of those agencies refuted my CAV evidence. In fact, transcripts, dated 3 October 2008, show Mr GD Friedman, senior member (judge), upon hearing my Administrative Appeals Tribunal case No V2008/1836 (after reading my 169-page Statement of Facts and Contentions describing the relevance of my CAV evidence, stated:

“Let me just say, I don’t consider you, personally, to be frivolous or vexatious – far from it.

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

Please note: for the purpose of this report I have continued to refer myself as either Alan Smith or Alan.

A number of government agencies seem to have been complicit in a cover-up of Telstra shortfalls. For well over 20 years, Alan and Graham Schorer (COT spokesperson) have been attempting to get Telstra to take responsibility for financial losses that businesses incurred due to faulty telephone and fax lines.

Cape Bridgewater Holiday Camp – Golden Messenger 

Alan believes the skills he gained during his time at sea and working as a chef and steward, together with experience accumulated during many and varied catering jobs, provided him with a good base on which to build his own business.

Before Alan moved to Cape Bridgewater, and for the first three months after he moved there, he visited many Victorian metropolitan and country schools, including the Wimmera and south-west regions, Geelong and Warrnambool, and distributed 2,000 brochures about his camp.  The camp coordinators at these schools were most interested in the package he presented.

After opening the business with all the promotional time and effort noted above, Alan was surprised to find that he was not receiving the number of enquiries he expected.  Particularly since many prospective customers indicated they would phone as soon as they checked available dates, etc.  Alan wondered if this lack of incoming phone enquiries meant there was a problem with the phone lines?  A number of friends soon confirmed this, telling Alan and his wife, Faye, that they were receiving constantly engaged signals or, alternatively, a phone message saying that his phone was disconnected

Alan’s FOI and discovery issues caused severe problems, not only for Alan but also for the arbitrator, which meant that Alan’s matters were arbitrated on the arbitrator only had limited material in which to use to make a determination on Alan’s claim. John Pinnock (administrator of Alan ’s arbitration), addressed the Senate on 26th September 1997, saying

“… it is enough to say that the process was always going to be problematic, chiefly for three reasons. Firstly, and perhaps most significantly, the arbitrator had no control over that process, because it was a process conducted entirely outside the ambit of arbitration procedures.”

The Arbitration Agreement Alan signed, on 21st April, 1994 states:-

10.2:    “In relation to the Claimant’s loss, the Arbitrator:

10.2.1:   will take into account the Claim and Defence Documents, any Reply and supporting documents, written evidence and submissions made by the parties and, if applicable, any sworn or affirmed oral evidence presented to the Arbitrator by the parties to the arbitration together with any information obtained by the Resource Unit or any advice given to him by the Resource Unit.

10.2.2: will make a finding on reasonable grounds as to the causal link between the alleged service difficulties, problems and faults in the provision to the Claimant of telecommunication services and the losses claimed and, as appropriate, may make reasonable inferences based upon such evidence as is presented by the parties together with any information obtained by the Resource Unit or any advice given to him by the Resource Unit. Unless the Arbitrator is able to conclude that Telecom caused the loss claimed, there will exist no basis for a claim against Telecom.

11. The Arbitrator’s reasons will be set out in full in writing and referred to in the Arbitrator’s award.”

No written finding was ever made by the arbitrator or the TIO-appointed technical consultants as to the validity of Alan’s arbitration claims or whether they believed Telstra rectified the problems and faults Alan raised in his arbitration.

CHAPTER ONE

2nd & 6th September 1988:  Telstra continues to record Alan’s complaints as the phone problems worsen.  Often the line remained dead (locked up) for some time after a call was terminated.  This problem often was not noticed until they lifted the receiver to dial out of the business. AS – CAV 1

25th October 1988:  This Telstra handwritten fault document, FOI folio K25232, states:-

“52 Fail (17.3%)..

“Congestion Tone always dropped back to internal comm – get local congestion tone…

“Busy tone 30-50% GS-CAV 28-A

Alan Smith’s Cape Bridgewater Holiday Camp was routed through an unmanned RCM multiplexer system, at Bridgewater, to the Portland AXE exchange.  Graham Schorer’s business, Golden Messenger is also serviced by an AXE exchange.  Although not dated, the following Telstra documents are believed to have been produced around this period.

Exhibit GS CAV 28-B titled National Network Operations – Melbourne discusses the AXE Ericsson exchanges and insufficient CL as a cause of congestion – a problem North Melbourne exchange suffered.

(4) TNE:-

“Congestion being experienced in AXE exchanges due to shortage of CL, PD and RE ‘individuals’ has been brought to the attention of TNE so that designers can be made aware of the problems.”

Exhibit GS CAV 28-C, titled CL Record insufficiencies, states:-

“If there are insufficient CL records then the AXE will send congestion to the A party.”

Exhibit GS CAV 28-D is a 2nd July 1992 Telstra Internal Minute, from Mark Ross, Customer Services Manager, to Network Operations.

Exhibit GS 28-E is an internal memo dated 29th November 1993 from National Network Investigations to Harvey Parker, Group Manager Director of Commercial and Consumer.

This statement made in the internal minute:-

“Please find enclosed documentation in regard to a Grade of Service Complaint from Mr Alan Smith of Cape Bridgewater.

“Our local technicians believe that Mr Smith is correct in raising complaints about incoming callers to his number receiving a Recorded Voice Announcement saying that the number is disconnected.

“They believe it is a problem that is occurring in increasing numbers as more and more customers are connected to AXE,

and the statement made in the Telstra internal memo:-

“As the performance quality of the network is directly translated to customer satisfaction and cost and quality of Fault Management, caution is also expressed about the decision on which switch should be used for FMO. I have long held the view the AXE switch provides an inadequate and crude Fault Analysis & Diagnostic tools [sic]. Attempts to have improvements incorporated have been acknowledged, but nothing has changed,”

confirm there were problems associated with the Ericsson AXE system.

It is also interesting to note, that in the official AUSTEL COT Cases Report dated April 1994, at point 7.40 – AUSTEL states:-

“…AUSTEL recently became aware that Telecom had prepared an internal document on the subject of this AXE fault and on 21 March 1994 sought a copy from Telecom.”

A copy of this AXE report was not provided, under FOI, to either Graham Schorer (COT spokesperson) or Alan Smith.

The AXE Ericsson exchange problems (see also below for the dates of 16th July 1997, 24th July 1997, 20th August 1997 and 16th September 1997), were one reason the COT cases suspect the TIO-appointed Arbitration Technical Consultants, Lane Telecommunications, had a conflict of interest before they were removed from the arbitration process.

6th & 10th January 1989:  Telstra continues to record our complaints.  As the weeks go by and Alan’s business, which should have been flourishing by now, begins to vanish before their eyes.  Alan and Faye begin to wonder if they should have moved to Cape Bridgewater at all.  Family arguments ensue as Alan pushed to sell their family home in Melbourne (with its in-ground swimming pool and spacious back yard) and asked his wife, Faye, to give up her thriving dressmaking business.  Alan does not lay the entire blame for his 20-year marriage breaking up on Telstra’s doorstep, but the constant stress created by prospective customers not being able to reach them on the phone in Cape Bridgewater was certainly a major factor.  When Alan now looks at Telstra FOI documents, confirming Telstra knew, all along, that their phone problems were caused by the poor network into Cape Bridgewater (while they continually denied the problem), he finds it really difficult to accept.  If Telstra had addressed the rural phone problems in Cape Bridgewater when he first raised them, he might well still have a marriage and contact with both his children.

Faye and Alan split up

20th October 1989:  Finally, Faye leaves and after Alan gets through the first awful weeks with the support of friends, he begins to assess his new, single, situation and it becomes obvious that running the business alone was going to take a lot of time and energy.  However, local Telstra technicians assure him, there are no real problems with the Cape Bridgewater exchange and that, once the new RCM exchange was installed, any lingering minor congestion problems will be eliminated.  After Alan and Faye split up (see AS – CAV 2), the telephone problems continued (see AS – CAV 3 to 5).  Telstra knew there was a major fault, as these exhibits show, but chose to conceal these facts.

A brief overview of Alan arriving at Cape Bridgewater with his wife and family are recorded in his condensed manuscript

Trade Practices Act 1974

Part VA – Liability of manufacturers and importers for defective goods

“Commonwealth mandatory standard, in relation to goods, means a mandatory standard in respect of the goods imposed by a law of the Commonwealth. …

“mandatory standard, in relation to goods, means a standard:

  • for the goods or anything relating to the goods; and
  • that, under a law of the Commonwealth, a State or a territory must be complied with when the goods are supplied by their manufacturer, being a law creating an offence or liability where there is such non-compliance.”

A number of Telstra senior employees knew before they sold the Flexitel System to Graham Schorer, that the system had limitations and software constraints.  Please consider the following points shown immediately below, regarding Alan Smith’s EXICOM TF200 touchphone problems.  These problems may seem unrelated to Graham Schorer’s Flexitel issues, but there are similarities:  Telstra not only provided a known-faulty product to Golden Messenger, they also provided a known-faulty product to Alan Smith.

  1. The information shown in this report confirms some Telstra employees agreed that (1) there were congestion problems at the exchanges that serviced Graham’s business, Golden Messenger, and (2) the Flexitel System installed at Graham’s premises by Telstra did not have the capacity to handle the number of calls coming into the business.
  2. It is also confirmed, in Alan Smith’s CAV Chronology and supporting material, that numerous internal Telstra file notes and correspondence show that, like Graham, Alan’s business suffered as a result of congestion at his local exchange, which serviced the unmanned RCM system at Cape Bridgewater. Also, like the Flexitel software problems in Graham’s case, it was widely known throughout Telstra that there were major lock-up problems with their EXICOM TF200 phones.  Yet, Telstra’s laboratory technicians denied this known problem was part of Alan’s issues, even going as far as conjuring up a report stating that all the problems with Alan’s EXICOM TF200 were caused by ‘wet and sticky’ beer spilt inside the phone.
  3. In Alan Smith’s case, after Telstra replaced his faulty EXICOM TF200 with another EXICOM, Alan’s business continued, as Graham Schorer’s had, to suffer from problems with the phone system. In Alan’s case, the arbitrator and the arbitration technical consultants appointed by the Telecommunication Industry Ombudsman failed to address the lock-up problems:  apparently, because they believed Telstra’s laboratory TF200 ‘wet and sticky beer’ report (see Tampering With Evidence)

The following points further support the similarities between Graham Schorer and Alan Smith’s cases:

  1. On 20th November 1986 as mentioned above, Ray Shenton of Philips (Australia) faxed Telstra, information confirming the Flexitel System had a number of problems eight months before Telstra sold the Flexitel to Graham Schorer.
  2. Telstra internal memos and minutes, dated between 6th and 9th January 1987 (see above), also confirm Telstra’s awareness that the Flexitel System had a number of limitations.
  3. In the Ted Benjamin Target file Appendix 32 and supporting documents provided to the CAV LGE Targets, there is enough material showing that the lock-up problems, experienced by Alan Smith with the Telstra-supplied EXICOM TF200, were not caused by a spillage of beer into the phone.
  4. Exhibit GS 49-B to 88, FOI folio R37911. The last paragraph states: “This T200 is an EXICOM and the other T200 [that was connected to Alan Smith’s] is an ALCATEL, we thought that this may be a design ‘fault???’ with the EXICOM so Ross tried a new EXICOM from his car and it worked perfectly, that is, released the line immediately on hanging up.  We decided to leave the new phone and the old phone was marked and tagged…”

The problem Alan Smith experienced with the old EXICOM TF200, which was tagged and taken away, was it locked up intermittently after a terminated call.  One of the side effects was, while the EXICOM was in a locked-up state, people could hear Alan in his office sometime minutes after he had placed the receiver back in the cradle (terminated the call).

Exhibit GS CAV 50, (Telstra FOI folio D01026/27) confirms, like the Flexitel system, Telstra knew there were lock-up problems affecting the EXICOM T200 machines manufactured after week 7 1993, in moisture-prone areas. This document confirms one of the known lock-up side effects was that, while the line was in this lock-up mode, the calling or called party could hear room noise after the call had terminated.  Other evidence on file, concerning Telstra’s faulty equipment still in use, suggests that a large portion of these faulty EXICOM phones were re-deployed back into the system.

It would be unreasonable for Telstra Senior Executives to assume that local Telstra staff would have meteorological experience, or be aware that coastal regions like Cape Bridgewater, where Alan Smith had his business, have early morning to early afternoon moisture.  While it is evident, from documentation, Alan had problems with the EXICOM TF200, collected 27th April, 1994 the new EXICOM left behind was still in service on his 55 267230 line until at least 1999, when it was removed to the camp kiosk.  Although Alan provided the arbitrator with electronic data showing this locking up fault continued after the installation of the new EXICOM, the arbitrator did not allow the arbitration technical consults to test this service line. Had the arbitration process done this they would have perhaps found that the EXICOM phones, themselves, were part of the cause of this locking up fault.

SUMMARY – FLEXITEL & EXICOM

3rd July 1992:  Peter Taylor, Telstra’s Warrnambool Manager, sends Alan a letter, stating:-

As you requested the following is a copy of your fault history on service 267267. Unfortunately Ican only provide details for the past 12 months due to change in your data base.” (See AS – CAV 17)

Why were these documents withheld from Alan, when he asked him for all fault records since 1989?  This misleading and deceptive advice can be found in AS – CAV 5, under the heading Telecom Secret (FOI 44008).  Telstra used this during the settlement.  Other documents confirm there were records going back to 1989.

Alan was seriously misled by Telstra during this settlement process and when he accepted Telstra’s offered payment.

From soon after settlement, on 11th December 1992 and through to early 1993, Alan continued to experience intermittent problems with incoming STD calls cutting out: 80 per cent of his incoming calls were STD calls.  On 3rd February 1993 Alan complained to Telstra that the phone was frequently giving only one ring and, when he picked it up, the line was dead.

12th July 1993: Telstra FOI documents M34204 – M34205 (AS – CAV 18) confirm Alan was complaining of cut-offs in March 1993.  This Telstra document states there were 45,993 degraded minutes yet, in the Arbitration Technical Report, DMR and Lane (30th April 1995) refer to only 405 degraded minutes.  The Technical Report also claims there were only 43,500 errored seconds (ES) when the Telstra document shows 65,535.  It appears DMR and Lane played down the actual number of faults.

Three pages from the 13 April 1994 AUSTEL COT Report (pages 163 to 165) confirm, from the new RCM installation at Cape Bridgewater in August 1991 until at least July 1993, numerous problems affected the RCM at Cape Bridgewater. (AS – CAV 19)

At this point, it is important to raise the issue of a witness statement, sworn by Gordon Stokes of Telstra, and used in the FTAP (12th December, 1994).  In part 2 of this statement, Mr Stokes states:-

“I transferred to Network Operations Portland in 1989 and between 1990 and 1994 I was responsible for maintaining switching equipment at the Portland exchange.”

Mr Stokes further states:-

“After the Portland to Cape Bridgewater RCM systems were installed, I became aware that the performance of the systems could be measured using the facility known as CRC.  I checked the CRC error counters regularly between the date the RCM systems were installed and February 1994, when I left Telecom.  Checking the CRC counters in this way was normal maintenance practice.  I can recall checking the CRC counters prior to March 1993.  When I checked the CRC counters pre-March 1993, I did not observe any errors that could have impacted upon the telephone service provided to Cape Bridgewater customers.  A typical reading for each RCM system was 5 to 10 errored seconds, no degraded minutes and severely errored seconds.” (AS – CAV 20)

If Mr Stokes did check the RCM regularly, as he states, why didn’t he notice that the fault alarm system had not been installed after the RCM replaced the RAX exchange in August 1991, 20 months before?  Furthermore, Mr Stokes’ statement does not correlate with a report, made after a visit to the Portland exchange by the Melbourne pair-gain support group, which states:-

“At this stage we had no idea over what period of time these errors had accumulated.”

If Mr Stokes’ Witness Statement is correct, he “checked the CRC counters pre-March 1993” and he “did not observe any errors”, then 65,535 errored seconds and 45,993 degraded minutes must have accumulated in the three days between 28th February and 2nd March…

Throughout 1993, I continued to receive numerous letters, from clients and business associates’ documenting frustrating experiences of attempting to contact me by phone (see also document 15).  The stress became increasingly difficult to bear.  Although I often tried to convince myself that the problems were diminishing, in reality, nothing was improving at all

26th August, 1992: Casualties of Telecom/Telstra (COT)

The first formal meeting of the Casualties of Telstra takes place, at the Ibis Melbourne Hotel, comprising Graham Schorer (official spokesperson), Alan Smith, Ann Garms, Bruce Dowding (representing Sheila Hawkins) and Amanda Davis (AUSTEL’s General Manager for Consumer Affairs).  Three representatives of Telstra attend to discuss the ongoing phone problems being experienced by COT members.  During this meeting, the COT cases advise Telstra they now know, contrary to what they were individually advised by Telstra in the past, that they are NOT the only businesses in their areas complaining about faults with their telephones.  Telstra fault documents confirm that during October and November 1992, alone, 14 Cape Bridgewater residents had complained to Telstra about problems with their phones. (AS – CAV 8)

One of the Telstra’s representatives at this 26th August, 1992 meeting, Ted Benjamin, is later appointed as Telstra’s Arbitration Liaison Officer for Graham and Alan’s respective arbitrations.  The Alan Smith CAV Chronology LGE file and supporting documentation show that the TIO should never have allowed Mr Benjamin the position of Arbitration Liaison Officer while he was still a member of the TIO council, because the TIO’s office was the administrator of the COT arbitrations.

Telstra’s Minutes of this 26th August 1992 meeting states:-

“Graham Schorer said that, from COT’s perspective the purpose of the meeting was to put two questions to Telecom, which COT ‘required’ to be answered by 2.12pm the same day.  The questions are shown at attachment 1, but in essence asked Telecom to guarantee that the service of the five foundation members would be rendered fault-free within 28 days and that Telecom would resolve any questions of compensation to said members within the same period.” (GS 56, p2)

1st September, 1992:  Ms Pittard, Telstra’s General Manager, writes to Alan, stating:-

“We believe 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.” (AS – CAV 12)

18th September, 1992:  Mr Beard, Telstra’s Service Manager, writes to Alan, stating:-

“We believe that the quality of your telephone 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. (AS – CAV 13)

Telstra FOI document R01444 confirms Telstra documented people experiencing the RVA recorded message, saying Alan’s service was not connected, from at least March 1992.  This document also confirms that a Heywood resident, Mrs Saville, also complained of the same RVA fault when trying to ring Alan on 2nd September, 1992 and that the fault was not fixed until 7th October, 1992. (AS – CAV 11)

13th October, 1992:  Exhibit AS – CAV 7 shows that, around 13 October, 1992 one of Telstra’s Portland technicians, Gordon Stokes, connected an ELMI monitoring machine at the RCM exchange at Cape Bridgewater and linked it to a ‘sister’ machine so they could ‘talk’ to each other and carry out tests to see which calls terminated successfully at the camp.  This equipment was connected to the camp’s kiosk phone, which could be answered either in the kiosk via the kitchen, or in the main office.  Over this period, Alan continued to complain that calls were being registered as reaching his business, when they hadn’t.  On some occasions, calls shown on the ELMI tapes as having been answered, weren’t and, on other occasions, calls which had actually managed to get through and were successfully answered appeared on the ELMI tapes as ringing but not being answered.

Alan has included two examples of calls on 13th October 1992, which registered on the ELMI tapes as successful: one at 1.40 pm and the other at 3.04 pm.  In fact, both these calls dropped out when answered, so they certainly did not connect successfully.  According to Gordon Stokes, whose Witness Statement is discussed above, there was no ELMI equipment connected at Alan business at that time – but they must have been, or Alan wouldn’t have the tapes.

As these kinds of faults continued and were denied by local staff, things got worse instead of better.  At the time, my then-partner Karen often had to bear the brunt of anger from those people who did manage to get through, because she answered the phones every second or third day while I attended COT meetings in Melbourne.  It did not really come as a surprise to learn that Karen had decided to move into a rented house in Portland.

AUSTEL COT Cases Report

On 13th April, 1994 (see below), AUSTEL provided the then-Minister for Communications, the Hon Michael Lee, with the AUSTEL COT Cases Report, which discusses the telecommunication problems experienced by Graham, Alan and other COT members in detail.  Most of the information in the report was supposed to provide an unbiased view of the issues AUSTEL had investigated by accessing, from Telstra, each COT member’s telecommunication faults registered with the carrier.

The information shown in the Alan Smith CAV Chronology LGE file and supporting CAV documentation confirms that Telstra (throughout the COT arbitrations) continued to withhold documents from the claimants.  AUSTEL was also unable to access all the information they requested from Telstra to enable them to prepare a fully detailed report.

Point 5.46 on page 95 of the AUSTEL report states:-

“Where, as part of its direction, AUSTEL sought to obtain detailed information on each of the exchanges involved in terms of performance standards, actual performance, maintenance requirements and achievements, Telecom initially responded with advice in terms of a few generalisations. Very specific requests were necessary to obtain data which a co-operative approach may well have been expected to deliver. Indeed, throughout this inquiry it has been apparent that Telecom has chosen to interpret AUSTEL’s request for information in the narrowest possible terms. The net effect of this was to minimise the amount of relevant data it put before AUSTEL and lengthen the process necessary to extract it.”

Point 2.29 on page 34 states:-

  • “Since the five original COT Cases came to AUSTEL’s attention, fourteen complainants have approached AUSTEL alleging that –they have experienced service difficulties and faults similar to those experienced by the original COT Cases
  • they have received similar treatment in Telecom’s handling of their complaints.”

Point 3.45 on page 59 states:-

“Accordingly, at the same time as AUSTEL’s was pursuing its investigation it also used its best endeavours to facilitate a Fast Track Settlement Proposal for four of the COT Cases with the object of using the outcome of the Fast Track Settlement Proposal procedure as a model for resolving other individual disputes. Outcomes in that regard are detailed elsewhere in this report.”

Point 5.7 on page 84 states:-

“Argument on that general theme continued. By letter dated 23 September 1992, Telecom’s Group Managing Director, Commercial and Consumer, informed Mr Schorer as spokesperson for the original Cot Cases

  • ‘The key problem is that discussions on possible settlement cannot proceed until the reported faults are positively identified and the performance of your members’ services is agreed to be normal. As I explained at our meeting, we cannot move to settlement discussions or arbitration while we are unable to identify faults which are affecting these services.’ ”

Point 5.25 on page 89 states:

“Mr Smith was the first of the original COT Cases to reach an initial ‘settlement’ with Telecom. It is understood that he –

  • identified the type of faults which his business had experienced
  • indicated the incidence of the faults by way of –
    • statements by individuals who had sought unsuccessfully to contact him
    • demonstrating a reduced effectiveness of advertising he had undertaken.

“Telecom has acknowledged at least some of the faults impacting on Mr Smith’s business as well as having access to relevant fault records and monitoring data.  It was also aware of the extent of the problems and difficulties at its local exchange servicing his business.”

AUSTEL found merit in what Graham and Alan said, regarding their continuing phone problems, and this is why AUSTEL supported the suggestion that Graham and Alan have their matters assessed commercially rather than legalistically.  The following information shows, however, that Telstra (assisted by the newly appointed TIO) hijacked the commercial settlement process in favour of Telstra’s preferred Rules of Arbitration.

Point 5.29 on page 90 states:-

“The fifth of the original COT Cases, Mr Schorer, had particular concerns about Telecom’s limited liability and the impact that the limitations were likely to have on any claim he might make for compensation arising from an inadequate telephone service. Instead of seeking compensation in those terms, he pursued a claim in the courts under the Trade Practices Act 1974. In simple terms, Mr Schorer claimed Telecom –

  • sold him a particular type of customer equipment which was unable to meet his needs (which were known to Telecom)
  • made claims for the equipment which the equipment was not able to deliver

While Telecom defended the action, it did make a payment into court with a denial of liability. On the advice of his solicitor, Mr Schorer concluded that he could not afford to fund continuation of the case and he decided to accept the payment into court

BROKEN PROMISE

AUSTEL COT Cases Report – Continuing Faults

Point 5.30 on page 91 states:-

“Understandably the original Cot Cases, having reached an initial ‘settlement’ involving –

compensation for past losses

restoration of an adequate telephone service expected that they might be able to resume their business activities afresh.”

Point 5.32 on page 91 states:-

“Unfortunately that did not prove to be the case. Soon after his initial ‘settlement’ Mr Smith reported continuing problems to AUSTEL. Even prior to her settlement, Mrs Garms reported continuing faults to AUSTEL. The decision by Mrs Garms and Mrs Gillan not to report faults to Telecom in order to hasten a financial settlement is noted above. Mr Schorer continued to report faults to AUSTEL throughout the period.

Point 5.32 on page 91 states:-

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

  • a standard of service against which Telecom’s performance may be effectively measured
  • a relevant service quality verification test”

The original (commercial) negotiation process leading up to the AUSTEL-facilitated Fast Track Arbitration Procedure (FTAP), see point 5.32, states no future assessment process can be signed off until Telstra demonstrated that their verification testing had located and fixed the phone problems that affected the COT cases’ businesses.  One of the main reasons why Graham Schorer and Alan Smith signed the FTAP was because Telstra agreed to carry out the Service Verification Tests (SVT), as specified by AUSTEL, and to prove, to AUSTEL’s satisfaction, that the services provided to them were now up to network standard.  Leading up to the signing of the Arbitration Agreement on 21st April, 1994 and before the final COT report was provided to the Minister for Communications on 13th April, 1994, Alan and Graham attended a two-day, lock-up, confidential viewing of the incomplete draft of the report at AUSTEL’s headquarters in Queens Road, Melbourne.  At this meeting, Robin Davey, AUSTEL’s chairman, reminded Graham and Alan of commitments made in a letter dated 23rd September, 1992 from Telecom’s Commercial Consumer Group Managing Director to Graham, which states:-

“As I explained at our meeting, we cannot move to settlement discussions or arbitration while we are unable to identify faults which are affecting these services.”

At the time of this AUSTEL lock-up meeting, Graham and Alan were refusing to move from the commercial agreement to arbitration.  It was at this point of time, that Mr Davey stated that the original agreement to properly identify the phone and fax faults still stood, because an assessor (or arbitrator) would not be able to hand down findings if the problems and faults that sent the claimants into the process in the first place had not been rigorously tested.  At this lock-up meeting, Mr Davey also alerted Graham and Alan to sections of the AUSTEL report where AUSTEL clarified that Service Verification Testing would be conducted on Difficult Network Fault (DNF) customers, which is how the COT claimants had been classified.

It never occurred to Alan Smith, that Telstra would stoop so low as to conjure up a false report of the SVT they carried out at his business (as part of their arbitration defence) but, as Alan’s CAV Chronology LGE file shows, this is exactly what happened – even after AUSTEL wrote twice to Telstra, on 11th October and 16th November 1994, advising Telstra the tests carried out at Alan’s business premises were deficient.

In Graham’s case, he always believed that Telstra would NOT honour their commitment given to AUSTEL, regarding conducting their SVT according to AUSTEL’s specifications, and therefore he refused the SVT process until further guidelines were put into place.  No such guidelines were ever implemented during Graham’s arbitration.

In the AUSTEL COT Case Report, at point 5.48 and regarding Telstra’s testing, AUSTEL states:-

“Telecom’s approach to the required testing regime was also less than positive. AUSTEL had required the testing to occur in business hours. Telecom maintained that it interpreted this requirement according to the nature of the business and, had it done so in good faith, it would have been acceptable. That was not, however, the outcome. In one case (Mr Schorer of Golden Messenger) only 15 percent of the test calls related to the complainant’s business hours, an approach scarcely consistent with Telecom’s advice that it wanted to establish the ‘fundamental integrity’ of the approach and that it wanted the results to be ‘beyond reproach’.”

26th August, 1992:  (as referred to above)  The first formal meeting of the Casualties of Telstra is held at the Ibis Hotel in Melbourne.  Graham Schorer was elected as official spokesperson prior to the meeting.  During this meeting, the COT cases advised Telstra that they now knew that, contrary to what Telstra advised each member individually in the past, they were NOT the only businesses in their areas complaining about faults with their telephones.

Telstra’s minutes taken during the meeting at the Ibis Motel states:-

“Graham Schorer said that, from C.O.T.’s perspective the purpose of the meeting was to put two questions to Telecom, which C.O.T. ‘required’ to be answered by 2.15pm the same day. The questions are shown at attachment 1, but in essence asked Telecom to guarantee that the service of the five foundation members would be rendered fault-free within 28 days and that Telecom would resolve any questions of compensation to said members within the same period,” (P 2 at AS – CAV 56)

Another document also confirms that a Heywood resident, Mrs Savill, also complained of the same RVA fault when trying to ring Alan on 2nd September, 1992.  Document R01444 confirms the fault was not fixed until 7th October, 1992. (AS – CAV 14)

Telstra fault documents confirm that, during October and November 1992 alone, 14 Cape Bridgewater residents complained to Telstra about problems with their phones.

1st September, 1992:  (also noted above) Ms Pittard, Telstra’s General Manager, sends Alan a letter:-

“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.” (AS – CAV 12)

Ms Pittard was aware there were ongoing faults before the 1992 settlement meeting.

18th September, 1992:  (also noted above) Mr Beard, Telstra’s Service Manager writes to Alan:-

“We believe that the quality of your telephone 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.” (AS – CAV 13)

It is now clear he knew at the time that the information he supplied Alan in this letter was false.

Please combine the above segment with the FOI information supplied below.

Exhibit (GS 59):  Document Number: R26401 – R26485 (Table A), provides an almost-complete description of requested FOI documents, including when each document was completed, what it refers to and who produced it.  Six pages list 48 separate documents, from 1992, that Mr Schorer requested.  All are marked as either ADV or LPP.

We now know that hundreds (if not thousands) of T, ADV and LPP documents were wrongly withheld from Graham during his arbitration.  In particular, the 48 LPP documents raise a number of questions including:-

  1. Telstra states, in their B003 Briefing Report of 26th November, 1996, in reference to 21st and 22nd October 1992:“Telstra has no information as to whether this number was in fact engaged.”Telstra wrongly withheld non-legal information under T, ADV and LPP rules, suggesting that Telstra could have withheld fault information related to these ‘engaged’ calls too. Could Graham Schorer have used this information, if it had been properly made available to him, to challenge Telstra’s defence regarding these particular ‘engaged’ calls?  How many other faults, and fault reports, were unlawfully withheld under T, ADV and LPP?
  2. Page 1 of this FOI schedule also refers, at 8.10.92, to:-“Schorer, Golden Messenger Correspondence file for AGS R26401 – R26845, Document number R26450 – R26452, Facsimile transmission to Telecom, Technologies from AGS. Exemption LPP.”Why would Telstra withhold from Graham, during his arbitration, a fax from the Australian Government Solicitor to Telstra Technologies (who are NOT legal specialists), unless it was a document that could have helped Graham to prove his claims?

In the Alan Smith CAV Chronology LGE file, Alan provides evidence confirming technical information was also withheld from him, during his arbitration, under LPP.

Telstra FOI folio C05313, as shown in Chapter 2, for 16th March 1993, shows that Freehill Hollingdale & Page (Telstra’s solicitors) and Duesburys (accountants) used Equity Adjusters – a private investigator agency – at the time Graham Schorer was contemplating litigation against Telstra.  The information discussed in the Telstra LPP FOI schedule, regarding Equity Adjusters (see 30.10.92), like so many other non-legal FOI documents, was also withheld from Graham under LPP.

23rd November, 1992:  Don Lucas, of Telecom Commercial Victoria/Tasman region, writes to Alan advising that the RVA MELU fault only lasted for three weeks and was fixed by 19th March, 1992. (AS – CAV 15).

Another Telstra FOI document, K02643, which Alan received during his arbitration under FOI, confirms that Telstra considered this particular RVA MELU fault to be apparent from the cutover from the old exchange to the new RCM at Cape Bridgewater, i.e., from August 1991 to at least 19th March, 1992. (AS – CAV 16).

Another document that Alan received from Telstra, under FOI and dated July 1991, confirms Telstra knew, before they installed the new RCM at Cape Bridgewater in August 1991, that numerous problems affected the old RAX exchange prior to this cut-over.  This document clearly states that there were 11,000 errors per hour in direction A and 216 errors per hour in direction B, when the specified level allowed for was 72 errors per hour in both direction A and direction B.

In his letter, Mr Lucas also states that another software ‘register’ problem, relating to RVA local faults, only lasted from 2nd to 7th October ,1992, while other documents received under FOI R01444 (AS – CAV 14) confirm Telstra knew that this fault was apparent from at least 2nd September, 1992.

Further documents, received from the Australian Communications Authority (“ACA”) (2001) and dated 2 March, 1994 from AUSTEL to Telstra, also show the local ‘register’ RVA fault at Heywood and the RVA MELU fault had both lasted many weeks longer than Telstra told Alan during his 1992 settlement period.

11th December, 1992:  Alan provides Telstra with three letters from clients who documented their issues when trying to contact his business (AS – CAV 9-A).

During Alan’s settlement with Telstra, he produced several letters that he wrote to the local rural fault centre at Hamilton, somewhere between June 1988 and September 1989 (refer Cape Bridgewater Holiday Camp documents), as well as letters from the operators of the MS Empress of Tasmania, Heywood Primary School, Collingwood Halfway House and the Haddon Community Health Centre.  Many organisations experienced difficulties contacting Alan because of the RVA phone message and wrote to him concerning this.  John Wynack, Commonwealth Ombudsman office, wrote to Telstra 11th November, 1994 asking why Telstra never returned “a number of files relating to his contacts with Telecom prior to 1991”?

DOCUMENTS C04006, C04007 and C04008

Brief summary:  when these three documents are compared to other Telstra FOI documents and those discussed here, it is obvious that, on settlement day (11th December, 1992), Telstra’s Victorian General Manager – Commercial, Ms Rosanne Pittard, knew Telstra provided Alan with a poor phone service for at least three or four years.  Telstra were aware of the problems with Alan’s phone line from April 1988, when he lodged his first complaints. (AS – CAV 21)

Document 24 was used during Alan’s arbitration claim to answer Telstra’s Interrogatories.  Pages 11, 12 and 22 include references to:

  • Copies of letters, dated from as early as 1991, from people who had first-hand experience of the phone problems Alan had to deal with. These people included business clientele, friends and associates;
  • Contemporaneous notes Alan made regarding his phone problems;
  • Surveys of phone users in the general area; and
  • Copies of correspondence relating to other peoples’ problems with their own telephone services in the Portland/Cape Bridgewater area.

When Alan arrived at the meeting with Ms Pittard on 11th December, 1992, he reminded her of correspondence he received from her office, in September and November 1992, stating the phone faults were rectified.  Yet documents C04006, C04007 and C04008 show there were a number of facts that were not provided to him during these settlement negotiations, including references to:

  1. Callers hearing an RVA message when lines into Cape Bridgewater were congested (document C04006).
  2. Issues with the wiring and cabling in Cape Bridgewater.
  3. Telecom’s history of poor performance in the area.
  4. Alan’s service problems being network related and covering a period of three to four years (document C04007).
  5. Alan’s phone service, overall, suffering from a poor grade of network performance over a period of several years, with some difficulty in detecting exchange problems in the eight months before these documents were written.

22nd December, 1992:  Telstra FOI documents, folio G95136 to G95138, are minutes taken during a scheduled conference held to discuss ongoing communication problems within the Telstra network.  These documents were only supplied to Graham Schorer on13th October, 1998 under pressure applied by the Senate working party to Telstra, and were never made available to the COT cases during their respective arbitrations.  The importance of these minutes may well have influenced a different set of findings during the COT cases’ arbitrations as they confirm there were RVA faults and lock-up problems within the Telstra’s network at the time Graham and Alan’s had complained of same. (GS CAV 60)

Much of the technical equipment used by Telstra during the ’80s and ’90s was manufactured by Ericsson (Australia).  The RVA faults and lock-up problems, in many cases, were related to Ericsson equipment, including AXE exchanges.  We raise the Ericsson-manufactured telecommunication equipment issues here as Ericsson play a major role in the Lane Telecommunication conflict of interest matters discussed below.

CHAPTER TWO

Freehill Hollingdale & Page, AUSTEL and Telstra

Denise McBurnie, of Freehill Hollingdale & Page, wrote to Ian Row, Telstra’s Corporate Solicitor, on 10th September, 1993, discussing strategies to deal with the COT claimants.  Telstra FOI document N00749 is the first page of this strategy and states:-

“Both Freehills and Duesburys would be happy to assist you should any further presentations to Telecom management be required on any of the matters raised in the issues paper or with regard to any other matters concerning management of ‘COT’ cases and customer complaints.” (AS – CAV 39-A)

Ms McBurnie names Duesburys as assisting Freehills in this matter.  Duesburys were also involved with the employment of private investigators (paid by Telstra) in relation to Graham Schorer and possibly other COT claimants.

In June 2000, renowned Legal Professional Privilege expert, Associate Professor Suzanne McNicol, provided the COT claimants with the following legal opinion regarding Freehills’ COT Case Strategy document:-

“There is also some potential prima facie evidence of … i.e. knowingly making false or spurious claims to privilege.  For example, there is a potential structure set up for the possible abuse of the doctrine of legal professional privilege in the faxed document entitled ‘COT’ Case Strategy, marked ‘Confidential’ dated 10 September 1993 from Ms Denise McBurnie of Freehill Hollingdale & Page, Melbourne Office to Mr Ian Row, Corporate Solicitor, Telecom Australia.” (AS – CAV 39-B)

7th January, 1993:  This internal Telstra note ( GS-CAV 61) states:-

“You are aware that the COT issue is hotting up again. [Redacted] and Rosanne Pittard are to deal with the media/politicians on this subject. I will be dealing with AUSTEL as necessary.”

“Would you please ensure that all other parties in your state are aware of this so that we don’t trip up.”

Was this statement made after it had been revealed Rosanne Pittard withheld vital network fault information from at least one COT claimant during settlement?  During June 1993, AUSTEL wrote to Telstra condemning this particular type of misleading and deceptive conduct.

2nd February, 1993:  This letter from Frances Wood, AUSTEL’s Manager – Service Quality, to Telstra’s Corporate Secretary, Jim Holmes, confirms that a draft terms of reference for a commercial assessment process for the COT cases was being considered.  On page three of this letter, Ms Wood states:-

“It was AUSTEL’s understanding – and that of the COT Cases – that the reason there was emphasis placed on an independent assessment instead of an arbitration was exactly so that business losses could be assessed and relative causation estimated.”

“These draft terms of reference do not give the assessor that task. Quite the contrary: he or she is charged to look at points such as –

  • the duty of each claimant to mitigate any loss
  • any efforts of Telecom directed at minimising the alleged loss of the Claimant”

“It is surprising that Telecom should have though these terms of reference would be acceptable to Mrs Garms … or that they would be perceived as ‘in good faith’ by a third party.”

Acceptable terms of reference

  • that the assessor should reach a judgement as to –

the adequacy of the complainants’ telephone service

the business losses of the two claimants since establishing their businesses at their present locations

the causes of these losses (including the general economic environment, and local circumstances, and the effects of the telephone service). …”

“As stated at the outset, these draft terms of reference do not fulfil the promise of good faith.  Unless terms of reference showing there good faith in the process are provided by Thursday 4 February, it is AUSTEL’s intention to report to the Minister under the terms of section 36 (c) of the Telecommunications Act 1991 that it believes, according to the information currently available to it, in these cases that Telecom has treated these customers unfairly and continues to do so, and that AUSTEL’s best efforts at resolving the issues have failed.” (GS CAV 62)

Please note: throughout this chronology of events, we will quote Ms Woods’ letter and AUSTEL’s understanding that the COT cases’ Fast Track Settlement Proposal was a commercial assessment process and the assessor was to make a judgement on the:

  • “adequacy of the complainants’ telephone service”.

3rd February, 1993:  Telstra FOI documents, folio G95148 to G95152 (GS CAV 63), are minutes of a scheduled conference held to discuss ongoing communications problems within the Telstra network.  These documents were only released to Graham Schorer on 13th October 1998, under pressure applied by the Senate working party, and were withheld from the COT cases during their respective arbitrations.  The importance of these minutes and the various similar monthly minutes could well have brought a different set of findings in the COT case arbitrations, as GS 63 confirms Telstra knew there were lock-up problems in the network.  Ericsson equipment and AXE exchange issues were also raised during this conference meeting.

10th February, 1993:  This letter from Jim Holmes to Graham, FOI folio R17155, discusses the future settlement proposals for Ms Garms and Ms Gillan, and mentions only an ex gratia-type settlement, not arbitration. (GS CAV 64)

15th February, 1993:  Ian Row, Telstra’s Corporate Solicitor writes to Mr Schorer acknowledging that the process for settling the COT cases will be an independent assessment process.  He writes:-

“I am also instructed to advise that Telecom has no difficulty in accepting your recommendation that Mr Gordon Hughes, current President of Law Institute Victoria be appointed as the independent assessor.” (GS CAV 65)

16th February, 1993:  Telstra’s Jim Holmes writes to Graham again and states:-

“Importantly you will note that Telecom has included a reference to the possible use of Mr Archibald QC’s services. Separately we have agreed to Gordon Hughes to be the Independent Assessor (if available and willing).” (GS CAV 66)

18th February, 1993:  Telstra FOI documents, folio G95153 to G95159 (GS 67) are minutes taken during another scheduled conference held to discuss ongoing communication problems within the Telstra network. These documents were also withheld during the COT cases’ arbitrations.  This minute further confirms the lock-up problems that Graham and Alan complained of were not imaginary.

  •   “(3)Discussion of recent faults

“MELH
IOG-11B EX-A node restarted and remained in isolated blocked state. Attempts to recover the node by reloading and deblocking node A were unsuccessful.”
(Folio G95156)

  • “The variations in data in different regions across the county raise concerns about the repeatability and consistency of the data regeneration program (ELISA). Martin Spear advised that a conversion prerequisite is that data is checked to be at a defined /36 standard. The standard exists and work has been initiated for South Melbourne (SMEX).

The problems experienced when taking the AX62 model to /66 has reduced confidence in the ELISA data regeneration program. … Another attempt must also be made to convert AX62 by Ericsson.” (Folio G95157)

  •   “The number of software blocks with used correction area greater than 75% is a continuing concern. Colin Campbell advised of an upcoming CNA which will address some of the critical blocks.” (Folio G95158)

4th March, 1993:  This letter (FOI folio R20297) to Telstra’s Rosanne Pittard from Denise McBurnie of Freehills confirms Freehill Hollingdale & Page and Duesburys (accountants) were reporting on Graham’s matters. (GS CAV 68)

10th March, 1993:  Rosanne Pittard’s internal letter to David Oertel, Managing Director of Telecom Commercial, states:-

“Mr Graham Schorer of GM Holdings trading as … Golden Messenger initiated legal action against Telecom regarding misrepresentation under the Trade Practices Act for the sale of a Flexitel in 1987.  The Flexitel is a key-system/PABX hybrid which subsequently proved to be unpopular with limited application.  Mr Schorer’s firm also experienced some network faults and congestion.  The extent of GM’s claim is currently some $2m plus costs plus statutory interest. …”

“I have briefed solicitors on the following strategy:

  • Newsolicitors appointed (Freehill, Hollingdale and Page) and work schedule agreed …
  • Payment into court to be made. This effectively limits our liability for legal costs should we lose. …”

“I will still do everything in my power to avoid this matter going to Court without making irresponsible payment.”

“Your approval is therefore sought for payment of $250,000 to the Federal Court of Australia in the knowledge that other payments may follow.” (GS CAV 69)

15th March, 1993:  This letter from Denise McBurnie of Freehills to Telstra’s Rosanne Pittard, FOI folio C05313, confirms that Equity Investigators were involved on behalf of Telstra, Duesburys and Freehills concerning GM Holdings.  Denise McBurnie states:-

“I apologise for the state of the handwritten statement in the Investigator’s Report.”
(GS CAV 70)

AUSTEL found the Australian Government Solicitor (AGS) wrote to Equity Adjusters, the private investigators mentioned in Telstra’s FOI schedules T, ADV and LPP, on 30th October, 1992 regarding Graham Schorer – Golden Messenger.  AUSTEL concealed this from Mr Schorer until 2008.

Again, the Investigator’s Report referred to by Denise McBurnie, in her correspondence with Equity Adjusters, was never provided to Mr Schorer in any of Telstra’s FOI releases.

16th March, 1993:  Telstra FOI folio C05306 confirms that Telstra provided Freehills with a list of addresses and phone numbers of those involved in the GM dispute.  The fact that private investigators were now involved suggests the list of names and addresses supplied by Telstra to Freehills were probably provided to Equity Investigators. (GS CAV 71)

April 1993:  Telstra FOI folio 102019-102020, entitled Terms of Reference for an Independent Assessment, is given to two COTs (Ann Garms and Maureen Gillan), stating:-

“The Terms of Reference for the Independent assessment are as follows:

  • The Independent Assessor shall initially establish whether faults existed in the telephone services provided to the Claimants and whether such faults resulted in losses to their individual businesses, the financial damage (if any) to the businesses caused by those faults and a reasonable amount of compensation for such damage.
  • In establishing whether faults existed, the Independent Assessor must also establish the relevant dates at which certain faults are alleged to have occurred.
  • The Independent Assessor shall determine the business losses of the Claimants since first reporting telephone faults in their respective businesses in their present locations.” (GS CAV 72)

This document confirms the COT case matters were supposed to be a commercial loss assessment process not arbitration.

6th April, 1993:  This letter from Denise McBurnie (seconded from Freehills), FOI folio 001901, to Andrew Moyle, confirms Freehill Hollingdale & Page were firmly entrenched in Graham Schorer’s matters.  Please note: Telstra seconded Andrew Moyle, during 1993, from Freehills to handle the COT case issues. (GS CAV 73)

8th April, 1993:  This letter, FOI folio R20084, from Denise McBurnie to Telstra’s Rosanne Pittard regarding GM matters, notes:

“I have been advised by Freehills that in addition to Duesburys’ account, they are yet to receive accounts from senior and junior counsel and the private investigators.

Could you please attend to payment of the enclosed account.” (GS CAV 74)

The above two aforementioned letters, C05313 and R20084, support the COT members suspicions that they were under surveillance, from late 1992 through to at least early 1993.

During this same period, Cathy Ezard (now Alan’s partner), was a professional associate of Alan’s.  Cathy signed a Statutory Declaration, dated 20th May, 1994 explaining a number of sinister happenings when she attempted to collect mail on Alan’s behalf from the Ballarat Courier Newspaper office (AS – CAV 22).  This declaration leaves questions unanswered as to who collected Alan’s mail and how did they know there was mail to be collected from the Ballarat Courier mail office.  On both occasions, when this mail was collected by a third person, Alan had telephoned Cathy, informing her the Ballarat Courier notified Alan there was mail addressed to Alan waiting to be picked up.

On pages 12 and 13 transcript, from the AFP inquiry into Alan’s allegations that Telstra unlawfully intercepted his telephone conversations, the AFP state at Q59:-

“And that, I mean that relates directly to the monitoring of your service where, where it would indicate that monitoring was taking place without your consent?” (AS – CAV 23-A)

21st April, 1993:  Telstra internal email FOI folio C04094 from Greg Newbold, to numerous Telstra executives and discussing COT cases latest”, states:-

“Don, thank you for your swift and eloquent reply.  I disagree with raising the issue of the courts.  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 complaints remain vexacious [sic].” (GS CAV 75)

27th April, 1993:  Telstra FOI folios G95165 to G95167 state:-

“The list of outstanding /66 faults was discussed and prioritised with the result being the new ‘Top Ten’ lists,”

thus confirms problems and faults in Telstra’s network at the time Graham was registering his complaints. (GS CAV 76)  Please note the reference to Ericsson AXE exchange problems in this document.

Billing Problems

21st May, 1993:  Alan’s 008 billing account for this date demonstrates how Alan proved conclusively that Telstra charged him for calls that did not connect to his service during the period the MCT equipment was installed on his service line, due to the 90-second delay/lockup period after each successful terminated call.  These short duration calls existed from prior to this date right through until August 1996, as is shown in our reporting.

Why did Telstra’s 008 account, for 21st May, 1993 show 5-second to 20-second calls terminating at Alan’s business (one after another) when the MCT equipment disallowed this to happen?  Mrs Haddock from Melbourne tried to ring Alan on this particular day and later wrote of her concerns. She was one of the people who referred to a woman’s voice, on what she thought was Alan’s answering machine, when she arranged her bookings. As Alan recorded the answering machine message with his own voice in late 1992, who did Ms Haddock leave her particulars with?

BRIEFCASE SAGA

3rd June, 1993:  Two Telstra technicians, David Stockdale and Hew Mackintosh, visit Alan’s business, to investigate his continuing complaints regarding his phone service, and inadvertently leave behind a briefcase.  The contents of this briefcase confirmed Telstra knew, before Alan’s settlement on 11th December, 1992 that major faults existed in their network, but they did not disclose this to Alan during his settlement (see documents AS – CAV 3, 4 and 5, and AS – CAV 9-B).

9th June, 1993:  This letter, from AUSTEL to Telstra, is also part of the “briefcase saga” as it confirms AUSTEL was concerned Telstra may have misled Alan during his settlement, because of the evidence Alan found in the briefcase.  On page one, paragraphs four and five, when referring to Alan’s allegations that Telstra withheld this information from him on 11th December, 1992 this letter states:-

“Further he claims that the Telecom documents [found in the briefcase] 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. …”

“In light of Mr Smith’s claims of continuing service difficulties, I will be seeking to determine with you a mechanism which will allow an objective measurement of any such difficulties to be made. ( GS-CAV 76)

Similarly, Telstra also advised Graham there were no known problems affecting his service, even though he later received FOI documents confirming otherwise.

16th June, 1993:  AUSTEL’s John MacMahon, General Manager Consumer Affairs, writes to Graham stating:-

“Attached is a draft letter which I intend to send to Telecom concerning the issues you have put to me.

I would appreciate your filling in the details of your current complaints and suggesting any other correction or omissions which you believe should be in the letter.” (GS 77)

16th June, 1993:  This draft letter from AUSTEL to Telstra’s Dennis Hambleton, Director of Regulatory, states:-

“Mr Schorer maintains that he continues to experience a range of significant problems with his telephone system…” ( GS-CAV 78)

16th and 22nd June, 1993:  The Telecommunication Industry Ombudsman (TIO) Board and Council are formed.  The TIO office was to deal with the ongoing phone problems and faults as a separate identity to AUSTEL.

This page marked Appendix B, from the first TIO Annual Report, for 1993/94, confirms Telstra’s Ted Benjamin (who was involved in the COT matters since1992), was appointed to the TIO council on 22nd June 1993.  Telstra’s Corporate Secretary, Jim Holmes, and Telstra’s Corporate Affairs Officer, Chris Vonwiller, were appointed to the TIO Board on 16th June, 1993. AS-CAV 48-B)

It is important to highlight the names of Jim Holmes and Ted Benjamin, as they both played very important roles in the COT arbitrations as will be seen below.

17th June, 1993:  Ms Rosanne Pittard’s memo, Telstra FOI folio K03281, is remarkable:-

“I refer to our telephone conversation regarding the material contained in Mr Macintosh’s briefcase.”

“Please find attached a letter from AUSTEL requesting information regarding that incident.  Whilst I can respond to the details regarding the information provided to him at the time of settlement I cannot comment on the variation between what Mr Smith was told and the contents of the Network Investigation files.” ( GS-CAV 79)

The 9th June 1993 AUSTEL letter (above), and this internal Telstra memo shows Telstra was prepared to deceive the COT cases concerning their telephone services.

17th June, 1993:  AUSTEL’s General Manager of Consumer Affairs writes to Telstra’s Dennis Hambleton stating:-

“Mr Schorer maintains that his telephone service continues to be affected by the following faults –

  • caller receives a recorded voice stating that the number has been disconnected
  • caller receives engaged signal when all or most lines are free
  • caller receives a ring tone when no ring is heard by the operator and all phones are manned
  • line drops out when call is answered. “ (GS-CAV 80)

7th July, 1993:  This internal Telstra email, FOI folio C04054, discusses whether Telstra should speak to Clinton Porteous, a journalist with the Herald Sun, and attempt to stop him listening to Graham Schorer regarding Telstra’s network problems.  The email states:-

“I propose that we consider immediately targetting key reporters in the major papers and turn them on to some sexy ‘look at superbly built and maintained network’ stories.”

This suggests that Telstra had a number of ways of deflecting the reporter’s focus from Graham Schorer’s evidence. (GS-CAV 81)

12th July, 1993:  Telstra FOI documents M34204 – M34205 (18) confirm I was complaining of cut-offs in March 1993.  Telstra states there were 45,993 degraded minutes yet the DMR and Lanes Arbitration Technical Report (30th April, 1995) refers to only 405 degraded minutes.  The Technical Report also claims there were only 43,500 errored seconds (ES), when the Telstra document shows 65,535.  It seems DMR and Lanes played down the actual number of faults.  These are just two samples of this type of evidence.

The three attached documents from the AUSTEL COT Report of 13 April, 1994 (see pages163 to 165) confirm that, after the new RCM was installed at Cape Bridgewater in August 1991, numerous problems affected the RCM at Cape Bridgewater (19) until at least July 1993.

At this point, it is important to raise the issue of a witness statement that Telstra’s Gordon Stokes swore and used in the FTAP in 12 December 1994. At point 2 of his Statement, Mr Stokes states:-

“I transferred to Network Operations Portland in 1989 and between 1990 and 1994 I was responsible for maintaining switching equipment at the Portland exchange.”

Mr Stokes further states:-

“After the Portland to Cape Bridgewater RCM systems were installed, I became aware that the performance of the systems could be measured using the facility known as CRC.  I checked the CRC error counters regularly between the date the RCM systems were installed and February 1994 when I left Telecom.  Checking the CRC counters in this way was normal maintenance practice.  I can recall checking the CRC counters prior to March 1993.  When I checked the CRC counters pre March 1993 I did not observe any errors that could have impacted upon the telephone service provided to Cape Bridgewater customers.  A typical reading for each RCM system was 5 to 10 errored seconds, no degraded minutes and severely errored seconds.” (20)

If Mr Stokes did check the RCM regularly, as he states, why didn’t he notice the fault alarm system was not installed after the RCM replaced the RAX exchange in August 1991, 20 months before?  Furthermore, Mr Stokes’ statement does not correlate with a report, made after the Melbourne pair gain support group visited the Portland exchange, which states, “At this stage we had no idea over what period of time these errors had accumulated.”

If Mr Stokes’ Witness Statement is correct in that he “checked the CRC counters pre-March 1993, [and] I did not observe any errors”, then 65,535 errored seconds and 45,993 degraded minutes must have accumulated in the three days between 28 February and 2 March.

Throughout 1993, I continued to receive numerous letters from clients and business associates, documenting their frustrating experiences when they attempted to contact me by phone (see also document 15).  The stress became increasingly difficult to bear and, although I tried to convince myself that the problems were diminishing, in reality nothing was improving at all.

28th July, 1993:  AUSTEL’s John MacMahon writes to Telstra:-

In my letter of 9 June I asked for a copy of all documentation left inadvertently at Mr A Smith’s premises. … It has now been suggested that there was other documentation in that file. Would you please clarify this issue and if so, arrange for a copy of the other documentation to be made available to me immediately.” (AS-CAV 33)

30th July, 1993:  Telstra internal facsimile, FPO folio R00660, from the Manager of Co-ordination and Performance Reporting to Telstra’s Corporate Secretary, J Holmes, states:-

“In relation to Cot Cases, Austel appear to now [be] making a number of separate, but related, approaches to Telecom – viz – Regulatory, Your Office and Ken Beattie in Queensland.  It is [a] difficult, and potentially dangerous, arrangement in which to control the flow of information to Austel.” ( GS-CAV 82) 

3rd August, 1993:  This letter from AUSTEL to Graham states:-

“In conversations with you I have mentioned the measures we have taken to ascertain the level of phone service you are receiving. This note will formally advise you of the situation. We have sought from Telecom –

  • details of the performance standards set for the exchange to which you are connected and the actual performance over the past 12 months
  • a copy of the fault record for the past 12 months and for the 50 consumers with numbers both above and below yours
  • a description of the supervisory/monitoring equipment used in the most recent 12 months to monitor the standard of service, when it operated and relevant conclusions.” (GS-CAV 83)

During Graham’s FTAP, he was not provided with the information AUSTEL sought from Telstra via this letter.  As shown above and below, Telstra withheld technical and general internal information under the guise of Legal Professional Privilege (LPP), therefore the material sought by AUSTEL may well have been withheld under LPP.

4th August, 1993:  The minutes from this meeting confirm Graham Schorer met with three Senior AUSTEL representatives, Chair Robin Davey, Mr Elsegood, AUSTEL Technical Advisor Monitoring Carrier Unit and John MacMahon, General Manager – Consumer Affairs.  This document states:-

  1. Mr Schorer had sought the meeting to present documentation he had which he alleged supported his view that Telecom had acted in a misleading and deceptive manner.
  2. He commenced by drawing attention to a range of Telecom documents he had obtained through the court process. He undertook to give a copy of all those and other relevant documents to AUSTEL. …
  3. Mr Schorer said he had some problems with AUSTEL’s approach involving testing – he had a particular concern that it did not address the possibility of calls not reaching the exchange. …
  4. Mr Schorer mentioned that reporting faults to 1100 elicits the response that it can only respond where AXE equipment is involved.” ( GS-CAV 84)

Please note:  Graham Schorer was finally provided with Telstra FOI documentation, through the Commonwealth Ombudsman office and Senate Working Party investigation (see FOI folio G95136 to G95205, issue date 13/10/1998), confirming there were numerous problems affecting Ericsson AXE exchange equipment, including known lock-up problems and incorrect RVA faults being experienced throughout the Telstra network.

12th August, 1993:  A singles club enquiry has Alan worried.  This letter confirms Ms Espinoza’s recollection of the same, constantly engaged problems she experienced while trying to book a weekend.  (AS-CAV 34-A)

Alarmingly, Telstra FOI document K03870, dated 17th June (assume 1993), refers to the same Rita Espinoza and her friend Elisie Stenoya (AS-CAV 34-A).  This document not only records the two personal phone numbers of these two ladies, it also confirms Telstra was fully aware of the times Alan’s office worker left the business while Alan was in Melbourne.  This document does not state any other place, only Melbourne.  Alan used to visit Melbourne on a regular basis during 1992 to 1993 (visiting singles club owners who might be interested in using the Cape Bridgewater for their next club get-away).  Did Telstra even know where Alan stayed, with whom and which clubs he visited?

17th August, 1993:  The phone problems continue.  Ms Cullen from Daylesford, Victoria attempts to phone Alan’s business but reaches a dead line each time (AS-CAV 35-A).  Once more, Alan is charged for these attempts as four short duration calls on his 008/1800 service (AS-CAV 35-B).  All this evidence was submitted into arbitration, but never addressed.  When Ms Cullen finally made a booking and arrived in February 1994, Ms Cullen’s partner wrote of the problems they both experienced when trying to use the camp’s coin-operated Gold Phone service (AS-CAV 35-C).

19th August, 1993:  Telstra FOI folio R10606, confirms that Telstra’s Ms Pittard contemplated seeking legal advice regarding how to withhold COT FOI information under Legal Professional Privilege:-

“The request for files and other documents are onerous. … How much do they want? A warehouseful is not out of the question.  Who will copy these?  I don’t have resources or money for agency people to spend time photocopying.  Will Austel pay? (The last question was a joke – I know the answer.) …

I believe we should quarantine any papers associated with legal action, refuse to supply papers associated with settlements and refuse to supply any papers marked Legal professional privilege – but we should seek legal advice on same.”

The results of the tests are of a concern to me. What confidentiality will be guaranteed? Austel has had close contact with these customers – what will ensure they don’t pass test results on? What are the legal implications if they do? …”

“If they conclude that Telecom was in some way negligent or at fault, there are serious implications for our liability; we could be vulnerable to some form of action by the COTS – would the Austel report be admissible as evidence?”

“What promises have been made to the COTS as a result of the testing? None I
hope.”

“The testing at customer premises causes great difficulties for us.  (GS-CAV 86)

The sentences marked in bold (our emphasis) above, refer to a number of tests carried out by Telstra at various COT cases businesses.  This email also suggests that Ms Pittard was in charge of most of the COT cases’ issues and the tests.  Why then, is Ms Pittard so concerned of the test results being made available to the COT cases or to AUSTEL?

August 1993:  This Telstra FOI document folio A58983 is not dated but appears produced before, and no later than, August 1993, even though it relates to the forthcoming settlement proposals. This document states:-

  • “Reports just in – confusing/contradicts strong efforts – unsatisfactory results.
  • Most cases need more investigation.
  • First must resolve and identify problems.
  • Settlement discussions cannot proceed until problems identified.” (GS 87)

TELECOM SECRET – COT CASES AND AUSTEL

19th August, 1993:  This internal Telstra memo from Harvey Parker, Group General Manager – Commercial and Consumer, states:-

“Austel’s direction has enormous workload implications (notwithstanding technical constraints and misunderstandings) and also has significant legal complications.  Some of the material sought is under Legal Professional privilege. (GS-CAV 88)

Please note: AUSTEL’s request for documents from Telstra, was ONLY associated with the COT cases telephone exchange material, i.e., technical information surrounding Telstra’s testing of the exchanges and the customer premises and all relevant known fault information concerning the COT businesses.  AUSTEL did not request Telstra to supply any documentation pertaining to legal issues.

Mr Harvey’s statement:-“Some of the material sought is under Legal Professional privilege,” confirms COT service fault information was being held under LPP and echoes Rosanne Pittard’s FOI folio R10606 discussed above, also dated 19th August 1993, i.e.,

“Some of the documents on the files are Telecom Secret, some are Legal professional privilege.”

When assessing these two (19th August, 1993) documents with the Freehill Hollingdale & Page strategy, dated 10th September, 1993 by Denise McBurnie (discussed below), it seems reasonable to assume that, as Telstra withheld relevant fault information from both AUSTEL and the COT cases (during their respective arbitrations), the arbitrator was unable to correctly assess ALL relevant fault information.

23rd August, 1993:  A Telstra internal email discussing The Briefcase (FOI R09830) states:-

“The files on Smith and Dawson have been provided to Austel via Craig Downing of Regulatory at the request of Austel following a meeting with Austel on the issue.  The other papers were not requested and not provided. …”

“Subsequently it was realised that the other papers could be significant and these were faxed to Craig Downing but appear not to have been supplied to Austel at this point.”

“The loose papers on retrofit could be sensitive and copies of all papers have been sent to Ross Marshall.” (AS – CAV 37-A)

Please note: In the Arbitrator’s award, dated 11th May, 1995 the arbitrator, Dr Hughes, states:-

“The claimant has not asserted that the settlement reached was inadequate, unreasonable or unfair and there is no basis in fact or law for setting aside or avoiding the settlement reached by Telecom and the claimant in respect of all claims prior to 11th December 1992.

In making an award of compensation, it is necessary for me to take into account the amount paid by Telecom to the claimant by way of settlement on 11th December 1992. Particulars of this payment are set out in part 3.3(a) of these reasons. I have taken this payment into account.”

Alan’s response to Telstra’s Arbitration Defence of 12th December, 1994 shows the settlement process, engineered by Ms Pittard on 11th December, 1992 was administered deceptively.  To further support Alan’s allegations that Telstra misled him during the settlement of 11th December, 1992 Alan provided Dr Hughes with a list of FOI documents, including an AUSTEL letter stating if Telstra withheld fault documentation from Alan, during his settlement, then they misled him. AUSTEL previously withheld fault documents themselves – C04006, C04007 and C04008 (AS – CAV 5).

In Alan’s reply to Telstra’s arbitration defence on this deceptive conduct Alan states, on {p2}:-

“I would submit that for Ms Pittard as General Manager of Telecom Commercial Victoria/Tasmania to take these actions and execute these actions is one of negligence and a breach of statutory duty”

and on {p4}:-

“Mr Arbitrator you would find that Telecom has been negligent in their dealings with my phone service and the actions of Ms Pittard in refusing me historical fault information prior to the settlement was not only negligent, misleading anddeceptive, it was also unconscionable conduct.”

Why did Dr Hughes say that Alan did not complain about the settlement process when Alan had clearly documented how unreasonable and unfair the whole settlement process had been?

1st September, 1993:  This internal Telstra email (FOI folio A08232), from Don Pinel to Rosanne Pittard, states:-

“Ian has asked to put together a small team urgently to look at imaginative technical options for the COT customers to address their concerns.” (AS – CAV 37-C)

This email does not suggest Telstra believes the COT cases’ complaints are false.

8th September, 1993:  A further Telstra internal email (FOI folio A02303), from Don Pinel to Ross Marshall, regarding RVA on calls to connected numbers, states:-

“There seems to be an opinion that calls from ARE or ARF to AXE have a protocol problem that results in significant call failures. Do you have any info on this?”
(AS – CAV 38)

Both Alan and Graham’s business were routed off AXE exchanges.

10th September, 1993:  Internal Telstra FOI document A04958 states:-

“Connection of monitoring equipment at Schorer’s premises requires AT&T attendance as they hold site maintenance contract. …”

“MacMahon embarrassed, apologetic etc re stuff-up at Schorer’s”. (GS-CAV 92)

Freehill Hollingdale & Page

10th September, 1993:  This document, FOI folio N00749 to N00760, from Denise McBurnie to Telstra’s Corporate Solicitor, Ian Row, confirms Ms McBurnie advised Mr Row it would be appropriate to hide relevant COT information under Legal Professional Privilege.  FOI folio N00750 confirms Ms McBurnie appears to have singled out four of the COT Cases businesses Golden Messenger, Tivoli Theatre Restaurant, Japanese Spare Parts and the Cape Bridgewater Holiday Camp, for Legal Professional Privilege. (GS-CAV 93)

Associate Professor Sue McNicol, Australia’s leading specialist in Legal Professional Privilege, has assessed the document titled COT Case Strategy, Prof McNicol advised that by using this strategy to withhold non-legal FOI documents under Legal Professional Privilege, Telstra knowingly made false or spurious claims to privilege. (GS-CAV 94).

September, 1993: This internal Telstra email FOI folio K24548, appears to have been produced around the month of September 1993, and states:-

“It would be best to avoid COT Case member, Mr Graham Schorer of Golden (Messenger) to avoid embarrassment as you say. His main numbers are 03 329 7355 and 03 329 7255, but he has several rotary groups and about 40 lines in total.”

“Please prepare the results for the Corporate Lawyers under legal professional privilege and limit distribution of the results.” (GS-CAV 96)

14th September, 1993:  Telstra’s Jim Holmes writes to AUSTEL’s John MacMahon, stating:-

“A further problem has arisen with the monitoring of Golden Messenger, for whom as you are aware, connection of monitoring was delayed due to the numbers initially advised by Austel not being the right ones.  On Friday 10 September staff attempted to connect the new numbers but found that the terminal blocks provided at the Golden Messenger PABX do not allow for the parallel connection of additional wires.  There is therefore no obvious access point to allow monitoring at the customer’s premises. Further approaches are being explored in conjunction with the PABX supplier but at this stage no solution has been found.” (GS-CAV 97)

15th September, 1993:  Telstra internal memo FOI folio K34881/K34882 states:-

“The Golden Messenger PABX exchange lines use the same signalling between the PABX and exchange as a normal telephone service. Clear down works as follows:

“1. Incoming Call to PABX from the network

  • If only the distant A party restores the line is cleared forwarded to the PABX exchange line appearance at the terminating exchange [sic]. The PABX exchange line goes to line lock-out condition and the PABX extension receives busy tone until the PABX extension clears.
  • If only the B party clears (PABX extension clears) the PABX will open the loop to the exchange. The exchange circuit goes into time supervision.  After 90 seconds a Force Release signal is sent to the A parties [sic] originating exchange.  This clears the connection orward and sends the PABX exchange line circuit to line lock-out and the PABX extension receives busy tone until it clears.”

“The above assumes normal categories apply. Malicious Call Trace category changes the above to give control of release to the B party.  The issues relevant to Mr Schorer’s concerns are:

  1. In case 1(b) – for 90 secs after the PABX extension hangs up on an incoming call the exchange line is held in the line-lock-out condition and cannot be reused.
  2. The Forces Release signals within the Telecom network are not passed to the PABX on ring down circuits.
  3. In-dial PABXs have different signalling arrangements and would normally receive clear down signals from the Telecom exchange.”

“Case 1(b) does not explain Mr Schorer’s service difficulties as while the exchange line is held in the line lock-out condition, new incoming calls would be offered to other exchange lines in the PABX group.” (GS-CAV 98)

Below (25th January, 1994) it will be seen that there were problems in the CAN servicing Golden Messenger.  It is also highlighted below that AUSTEL allowed Telstra the privilege of instructing Bell Canada International (BCI) they need only to test the inter-exchange network servicing the COT customers – and not the CAN.

15th September, 1993: This Telstra email FOI folio R03173, subject “Access to Files” states:-

“The Corporate Solicitor’s office has two files in relation to the COT cases.

  1. A general COT case file and
  2. The litigation file relating to Golden Messengers.”

“All material on these files ought to be claimed as legal professional privileged.” (GS 99)

17th September, 1993:  Telstra’s Corporate Secretary Jim Holmes’ email to Telstra’s Don Pinel (FOI folio A00097), regarding the COT project team, states:-

“We have an arrangement with Freehills.  No separate contract is needed.  Go straight to Andrew Moyle.” (GS 100)

21st September, 1993:  Don Pinel sends an email to Jim Holmes, stating:-

“Met at length with Freehills this morning (Ian Row was there).  I have arranged for Denise McBurnie to provide leagal [sic] input to the project and suggested that she come to tomorrow’s meeting to meet the players and pick up the threads.”
(GS-CAV 101)

23rd September, 1993:  This internal Telstra email from Don Pinel to Rosanne Pittard and Corporate Secretary Jim Holmes, FOI folio R03022, advises the Project Team that all correspondence from COT (and similar) customers should be channelled through Denise McBurnie of Freehills.  He states:-

“Would you please ensure that with all customers that are, (or have the potential to become) serious complaints, correspondence is processed through Freehills with initial acknowledgement by the Region.” (GS-CAV 102)

27th September, 1993:  This letter from Graham Schorer to Robin Davey, AUSTEL Chair, explains Mr Schorer’s concerns regarding directions to register any further phone complaints through Andrew Moyle of Freehills.  Mr Schorer states:-

“Mr Moyle informed me that any future communique with Telecom had to be placed in writing and sent directly to him to enable the information to be acted upon immediately.” (GS-CAV 103)

28th September, 1993:  Robin Davey writes to Telstra’s CEO Frank Blount, stating:-

“Telecom now appears to have a done a ‘back flip’ by instructing its solicitors, Freehill Hollingdale & Page, to inform Mr Schorer that he must ‘…address any concerns of a legal nature involving our client and your business, direct…’ to their office. While Freehill’s [sic] letter of 27 September 1993 … to Mr Schorer states that ‘…does not in any way preclude… [him] … from addressing non legal matters through the normal channels of communications previously agreed…’ between him and Telecom, it places Mr Schorer in the impossible position as a layman of having to distinguish between ‘concerns of a legal nature’ on the one hand, and non legal matters’ on the other. …”

“As indicated in my letter to Mr Campbell, there is a strong feeling among the COT Cases of a lack of good faith on Telecom’s part.  If Freehill’s letter correctly reflects Telecom’s instructions it can only serve to reinforce that feeling.” (GS-CAV 104)

And, Telstra’s internal email, FOI folio C02840, subject COT media latest states:-

“Steve Lewis (Australian Financial Review) is following up on his own yarn NOT with the Davey letter to the Minister but with the Davey letter to the CEO raising concerns about our use of Freehills.” (GS-CAV 106)

September, 1993:  Telstra FOI document marked Sept folio R00524 notes that, on occasions, it might be desirable to install recording equipment at customer’s premises and states:-

“All technical reports that relate to customer’s services are to be headed ‘Legal Professional Privilege’, addressed to the Corporate Solicitor and forwarded through the dispute manager.” (GS-CAV 107)

28th September, 1993:  This Telstra internal email FOI folio A03254, from Don Pinel to Jim Holmes, with the subject Letter to Schorer, states:-

“One point not covered that you may like to consider is the question of ‘duress’. This has been raised in a number of places and requires rebuttal.”

“Perhaps I am getting too legalistic and defensive but we can’t afford to let anything get away. However, our best option is still to force these cases down a legal, structured path.” (GS-CAV 108)

1st October, 1993:  This document from Denise McBurnie to Telstra’s Don Pinel, confirms that Freehill’s were also writing to Mr Alan Smith, on behalf of Telstra. Ms McBurnie states:-

“I enclose a copy of the letter sent to Mr Alan Smith at 1.16 pm today.  I also confirm that I telephoned Mr Smith on phone number 055 267 267 and spoke to Mr Smith who confirmed that he had received the facsimile.” (GS-CAV 109)

5th October, 1993:  The draft of the COT Fast Track Settlement Proposal (FTSP) from AUSTEL’s Robin Davey states, at point 40:-

“Finally, if the attached letter (Attachment ‘D’) dated 7 July 1993 from Freehill, Hollingdale & Page to one of the COT Cases’ solicitors is indicative of the way that Freehill, Hollingdale & Page have approached the COT Cases in the past, I would be more than a little concerned if they were to have a continuing role.” (GS-CAV 110)

11th October, 1993:  Telstra internal email H36291 confirms Telstra’s knowledge of the 1800 network billing problems Peter Zeagers to Nigel Beaman:-

“I am receiving a disturbing number of reports of instances where the 1800 prefix ‘does not work’ in the network.” (AS 122-D)

14th October, 1993:  This internal Telstra email FOI folio R03331, is discussing how to minimise the problems experienced by the COT claimants. It states:-

“We need to focus Austel’s attention as much as possible on the current rather than the past level of service delivered to Cot Cases. …”

“My view is that Telecom’s response to this issue should reflect the advice from Denise McBurnie, Freehill, Hollingdale & Page, Solicitors.” (GS-CAV 111)

19th October, 1993:  This document from Denise McBurnie to Don Pinel and titled Legal Professional Privilege Confidential/Commercial In Confidence, includes the following:-

“Duesbury & FHP continuing of evaluating [redacted by Telstra] claim – final report to Telecom will be privileged and will not be made available to [redacted by Telstra]”

“Telecom preparing report for FHP analysing data available on [redacted by Telstra] services (ie. CCAS, Leopard, CABS and file notes) – this report will be privileged and will not be made available to (blank).” (GS-CAV 112)

It is clear from the above letters of 14th and 19th October, 1993 that Telstra had no intention of listening to Robin Davey’s concerns about Freehills having a continuing role in the COT case issues.

25th October, 1993:  This internal Telstra email, FOI folio A06541, headed Recording of Customers Calls, states:-

“I understand that the Telecom has authority under the act to monitor (listen to and/or record) customer telephone conversations as part of the fault management process.”

During Graham Schorer’s Fast Track Arbitration Procedure, Telstra advised Dr Hughes, the arbitrator, on 11th November, 1994 that they would address the interception issues raised by Mr Schorer.  Telstra’s arbitration defence confirms they didn’t address these issues at all. (GS-CAV 113)

29th October, 1993:  Internal Telstra email, folio A05592, states:-

“I can confirm your understanding that Telecom may listen and record telecommunications for carrier operational purposes which includes installation, the operation and maintenance of the network and for tracing of, for example, malicious calls. Otherwise it is illegal to record a telephone conversation without the knowledge of the parties to that conversation.” (GS-CAV 114)

At this time, Telstra internal FOI document K01489, confirms that while Telstra were testing Alan’s Mitsubishi fax machine (using the office of Golden Messenger as the testing base):-

“some alarming patterns of behaviour were noted”,

and,

“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. … Even if the page was sent upside down the time and date and company name should have still appeared on the top of the page, it wasn’t [sic].” (AS – CAV 44)

Telstra FOI documents K03750, K03751 and K03752 attached as (AS – CAV 44) confirm this testing was generated from a Xerox telecopier installed in Graham’s office.  These three documents include technical information showing the interoffice lock-up problem between their two offices.

The 1992 to 1995 fax interception issues are concerning as, on 31st July 2001, Alan received a number of startling FOI documents from ACMA.  One of these eight page documents was originally faxed to the arbitrator’s office fax line 03 6148730 at 05:56 on 15 February 1995.  The information contained in this combined document shows that during the period in which Telstra and AUSTEL investigated the briefcase saga, Telstra’s local Portland technician Gordon Stokes, monitored Alan’s fax line to see who he was faxing information to after the briefcase was inadvertently left at Alan’s premises.  FOI document K03273 says:-

“Micky, This is a note from Gordon Stokes, if you want me to type up some info please advise ASAP. The information regarding the telephone numbers called by this customer following this incident are available from Network Investigation and my information was verbal from Gordon Stokes.”

When collated with Mr Stokes’ other diary notes in the briefcase, this leaves very little doubt: the faxing side of my business was not private.

FAST-TRACK SETTLEMENT PROPOSAL (FTSP)

The COT four, Ann Garms, Maureen Gillan, Graham Schorer and Alan Smith, provided AUSTEL with proof that Telstra continued to deny their businesses still suffered from phone faults, or at least, Telstra denied the extent of these faults and their incorrect charging.  Alan also provided AUSTEL with proof of the unethical way Telstra conducted his previous settlement on 11th December, 1992.  Finally, AUSTEL began to look for an appropriate process to finalise all these outstanding matters and so, Ann, Maureen, Graham and Alan began negotiations for the drawing up of the FTSP.

Because of the proof provided to AUSTEL, confirming problems continued after the settlements and court actions, AUSTEL looked towards the reporting of Coopers & Lybrand, who were now auditing the way Telstra previously dealt with legitimate COT complaints.  It was during this time that Robin Davey made a statement to the four COT cases stating that before an assessor can bring down a finding on COT matters, end to end testing of services at premises will have to be implemented to ensure the matters are fixed. The COTS later learnt this process was to be Service Verification Tests (SVT).  Robin Davey assured Graham Schorer and Alan Smith that Telstra had to provide conclusive evidence to the assessor, before the assessor could bring down any technical and/or compensatory findings.

1st November, 1993:  Telstra internal email, H36293, from Christopher Peck was forwarded to Nigel Beaman. It states:-

“All Admin groups are being inundated with complaints from customers who have advertised their numbers as 1800 but their customers are simply unable to get through to them.  I have also spoken to our fault staff out at Waverley who are also being inundated with the same complaints.” (AS – CAV 45A)

5th November, 1993:  Telstra internal memo, H36178, from Telstra’s Greg Newbold, Group Communications Manager, alerts Harvey Parker, Group Managing Director of Commercial and Consumer, about the short-duration, post-dialling delays affecting Telstra’s 1800 customers.  Mr Newbold states:-

“Bruce is concerned that the matter requires fixing at a national network level not just on a fault by fault basis.  He also raises the question whether we should be actively promoting 1800 in the current circumstances.” (AS – CAV 45B)

Please note: Alan was never informed that Telstra was aware that Alan’s 1800 complaints were valid nor advised by Telstra to withdraw his 1800 advertising until they fixed the problem.

CONFLICT OF INTEREST – PART 1

10 November, 1993:  Warwick Smith, TIO discloses confidential information.  Telstra FOI document A05993, is marked CONFIDENTIAL Subject – Warwick Smith – COT cases.  In this Telstra email addressed to Telstra’s Corporate Secretary Jim Holmes, copied to Frank Blount Telstra’s CEO, author Chris Vonwilla, Telstra’s Corporate Affairs Officer states:- (AS – CAV 48A)

“Warwick Smith contacted me in confidence to brief me on discussions he has had in the last two days with a senior member of the parliamentary National Party in relation to Senator Boswell’s call for a Senate Inquiry into COT Cases.”

“Advice from Warwick is:

  • Boswell has not yet taken the trouble to raise the COT Cases issue in the Party Room.
  • Any proposal to call for a Senate Inquiry would require, firstly, endorsement in the Party Room and, secondly, approval by Shadow Cabinet.
  • This would appear highly unlikely at this stage, given Boswell’s apparent lack of interest in raising it within the Party Room.
  • The intermediary will raise the matter with Boswell, and suggest that Boswell discuss the issue with Warwick Smith. Warwick sees no merit in a Senate Inquiry.”

“He has undertaken to keep me informed, and confirmed his view that Senator Alston will not be pressing a Senate Inquiry, at least until after the AUSTEL report is tabled.”

“Could you please protect this information as confidential.” (GS-CAV 116)

Exhibit (AS-CAV 48-B) confirms Chris Vonwiller and Jim Holmes were both members of the TIO Board, when this email went into circulation.  Exhibit (AS-CAV 48-C) confirms Ted Benjamin was also reporting confidential information he was privy to, as a TIO council member, back to Senior Telstra Executives.

11th November, 1993:  This letter from Freehills’ Denise McBurnie to Telstra’s Don Pinel, under the heading Draft Austel Submission Legal Professional Privilege, discusses a draft of the AUSTEL COT report. Ms McBurnie states:-

“In light of this approach, we emphasise that, while we have endeavoured to minimise any ‘dangerous’ admissions of liability which may have appeared in the draft Submission…”

The letter then discusses the many issues related to Telstra’s possible breaches of the Trade Practices Act 1974, in connection with COT matters. (GS-CAV 117)

12th November, 1993:  This letter from Russell Berry, Freehills, confirms Telstra’s secondment of Freehills’ Simon Chalmers.  As shown below, Mr Chalmers was involved in the release of FOI documents to Graham Schorer and Alan Smith during their respective arbitrations. (GS-CAV 118)

Remember, the TIO, Warwick Smith, and his legal counsel, Peter Bartlett, were provided with the draft Fast Track Settlement Proposal (FTSP), which outlined AUSTEL’s concern if Freehills had a continuing role in the COT matters.  The fact that Telstra used Freehills in their arbitration defence of Graham and Alan Smith’s arbitration, confirms Warwick Smith and Peter Bartlett did not adhere to those concerns.

GS 119 shows the type of FOI documents (not legal documents) that were withheld from Graham Schorer under Legal Professional privilege – using the advice given to Telstra on 10th September, 1993 by Denise McBurnie (Freehills).

17th November, 1993:  This internal Telstra email to Jim Holmes and Ted Benjamin, folio A05254, shows that yet another so-called independent report was about to be sanitised, when the writer of this email states:-

“Am now raising with Sekuless the merits/demerits of holding back the BCI [Bell Canada International] info for a ‘cleansing’ program immediately after the mess of Coopers.” (GS-CAV 120)

CHAPTER THREE

Fast Track Settlement Proposal

18th November, 1993:  By signing the FTSP, Mr Holmes agreed that Graham Schorer’s matters were to be settled through a non-legal commercial assessment process.  This document concludes by stating:-

“This proposal constitutes an offer to all or any of the COT Cases referred to in Clause (1)(a), which will lapse at 5pm on Tuesday 23 November 1993. This offer may be accepted by signature below and sending advice of such signature to AUSTEL or the Telstra Corporate Secretary before that time.” (GS-CAV 121)

23rd November, 1993:  Graham Schorer and Alan Smith sign the AUSTEL-facilitated FTSP. (GS-CAV 122)

AUSTEL’s COT CASES REPORT:

At point 5.30, 5.31 and 5.32 in this report, Robin Davey, chair of AUSTEL, states:-

5.30     “…Understandably the original COT Cases, having reached an initial ‘settlement’ involving –

  • compensation for past losses
  • restoration of an adequate telephone service

expected that they might be able to resume their businesses activities afresh.”

  • “…Unfortunately that did not prove to be the case. Soon after his initial ‘settlement’ Mr Smith reported continuing problems to AUSTEL.  Even prior to her settlement, Mrs Garms reported continuing faults to AUSTEL.  The decision by Mrs Garms and Mrs Gillan not to report faults to Telecom in order to hasten a financial settlement is noted above.  Mr Schorer continued to report faults to AUSTEL throughout the period.”
  • “…The fact that faults continued to impact upon the businesses in the period following the settlement shows a weakness in the procedures employed. That is, a standard of service should have been established and signed off by each party.  It is a necessary procedure of which all parties are now fully conscious and is dealt with elsewhere in this report. Its omission as far as the initial ‘settlement’ of the original COT Cases were concerned meant that there was continued dissatisfaction with the service provided without any steps being taken to rectify it.  This inevitably led to a dissatisfaction with the initial ‘settlement’ and to further demands for compensation.  To avoid this sort of problem in the future, AUSTEL is, in consultation with Telecom, developing –
  • a standard of service against which Telecom’s performance may be effectively measured
  • a relevant service quality verification tests. (see AUSTEL COT Case Report)”

25th November, 1993:  A Telstra memo, regarding short-duration calls, states:-

“The following is an assessment of the individual disputes highlighted by Mr Smith. From the information given, little more can be offered for explanation than ‘This is not the way it should work, we need to investigate to find cause’. …”

  1. Calls to Traralgon, being charged on busy.

“This situation should not have occurred.” …

  • Calls to RVA. …

“being charged for RVA is not a correct operation…” (AS – CAV 46A)

30th November, 1993:  This Telstra internal memo, FOI document folio D01248, is from Telstra’s Group Manager of Customer Affairs and TIO Council Member to Ian Campbell, Customer Projects, Executive Office.  With the subject TIO AND COT, this was written seven days after Graham signed the TIO-administered FTSP.  In this memo, Mr Benjamin states:-

“At todays [sic] Council Meeting the TIO reported on his involvement with the COT settlement processes – it was agreed that any financial contributions made by Telecom to the COT arbitration process was not a matter for Council but was a private matter between Telecom, AUSTEL and the TIO.”

“I hope you agree with this.”

At the bottom of this memo, Ian Campbell has added a handwritten comment:-

“Don Pinel … Seems ok to me. When I spoke to Warwick [Smith] I suggested that at least for the first group…” (GS-CAV 124-A)

Senate Hansard information dated 26th September, 1997 (GS-CAV 124-B) confirms that:-

  1. Ted Benjamin, Telstra’s main arbitration defence liaison officer in Graham and Alan’s arbitrations, was also a member of the TIO Council; and
  2. During a Senate hearing into COT issues, the then-new TIO, John Pinnock, agreed that Mr Benjamin had not removed himself from council discussions of COT matters:-

Senator SCHACHT “Mr Benjamin, you may think that you have drawn the short straw in Telstra, because you have been designated to handle the CoT cases and so on. Are you also a member of the TIO Board?”

Mr Benjamin “I am a member of the TIO council.”

Senator SCHACHT “Were any CoT complaints or issues discussed at the council while you were present?”

Mr Benjamin “There are regular reports from the TIO on the progress of the CoT claims.”

Senator SCHACHTDid the council make any decision about CoT cases or express any opinion?”

Mr Benjamin “I might be assisted by Mr Pinnock.”

Mr Pinnock“Yes.”

Senator SCHACHT Did it? Mr Benjamin, did you declare your potential conflict of interest at the council meeting, given that as a Telstra employee you were dealing with CoT cases?”

Mr Benjamin“My involvement in CoT cases, I believe, was known to the TIO council.”

Senator SCHACHT No, did you declare your interest?”

Mr Benjamin“There was no formal declaration, but my involvement was known to the other members of the council.

Senator SCHACHT “You did not put it on the record at the council meeting that you were dealing specifically with CoT cases and trying to beat them down in their complaints, or reduce their position; is that correct?”

Mr Benjamin “I did not make a formal declaration to the TIO.”

Exhibit (GS-CAV 124-C) is page 19 from the in-camera Senate Hansard dated 9 July, 1998, where Senator Schacht asks Ted Benjamin the following question:-

Senator SCHACHT Mr Benjamin, when did you first get involved in dealing with CoT cases?”

Mr Benjamin“In 1994.”

As shown above (see the date of 26th September, 1992) Mr Benjamin has been involved in dealing with the COT cases since 1992, not 1994.

The above information shows a TRULY independent person should have administered the COT arbitrations and, if that had been the case, it is most likely that the COT arbitrations would have been carried out in an appropriately democratic manner.

In the immediate segment below, it is clear that Telstra favoured the Telstra-funded TIO in preference to the Government-funded Regulator, AUSTEL, when dealing with the COT case issues.  When we combine these two documents, dated 30th November and 3rd December 1993, the reasons why become clear.

3rd December, 1993:  This internal Telstra email, FOI folio A01924, states:-

“Now that the TIO has been officially ‘launched’ it would be appropriate for Austel to change its approach to customer complaints and start referring them to the TIO rather than dealing with them in AUSTEL. …”

“Rather than writing to Davey on this it might be better handled either by a phone call or alternatively a phone call or letter from the TIO to Davey.”

“It is desirable that the growing stream of complaint to AUSTEL, followed by request for files and other records is stopped.” (GS-CAV 125)

On the surface, this seems to be quite a harmless proposal, but there is an underside to the suggestion that the TIO should investigate customer complaints, rather than AUSTEL. Consider the Telstra email of 10th November, 1993 (above) from Telstra’s Chris Vonwilla to Telstra’s hierarchy, confirming that TIO Warwick Smith discussed, with Mr Vonwilla, in-confidence government issues regarding the COT claimants.  It is important to highlight the fact that the TIO Board, which included Chris Vonwilla and Telstra’s Corporate Secretary, Jim Holmes, dominated Warwick Smith, and Warwick Smith was nominated as the administrator of the COT arbitrations even though Telstra were the defendants in the COT arbitrations.  In the Alan Smith CAV Chronology LGE file, Alan discusses Telstra file notes that show Telstra wanted the TIO to become involved in the continuing phone problems at Cape Bridgewater which, they hoped, would take Senator Alston (then the Communications Minister) and David Hawker MP out of the equation.  The TIO appears to have favoured Telstra throughout all the COT arbitrations, with little or no regard for the principles of justice.

AUSTEL (now ACMA) is a fully Federal Government-funded organisation and, until Robin Davey retired as Chair, it was almost 100 per cent independent.  The TIO is, on the other hand, funded by the carriers and, during the COT arbitrations, Telstra, Optus and Vodafone were the only carriers on the Board and Council.  How can an administrator be truly independent when he is paid by the organisation on trial (Telstra) in the case he is administrating?  Telstra was certainly on trial in the COT arbitrations and the COT claimants were the plaintiffs.

Please observe the Golden Messenger – CAN Measurement FOI document, folio K34734, discussed below at 25th January, 1994 which states:-

“[F]ollowing the measurements taken on the CAN for Golden Messenger today, two potential problems have been located.

  1. They are: 329 7009 has a probable high resistance joint or similar problem.
  2. 329 7734 has a double jumper on the main frame cable pair side (cable 6 pair 1666).”

Question: Were the 4th December, 1993 and 25th January, 1994 CAN/cable pair documents related to the continuing problems experienced by Golden Messenger?

Answer: Because Telstra concealed numerous non-legal Golden Messenger issues under LPP, the CAN/cable pair issues could not be investigated – even under a Federal Government facilitated Arbitration Process.

Note, in the AUSTEL COT Cases Report (dated April 1994, on page 243, at point 11.8), AUSTEL states:-

“Prior to receiving Telecom’s response to the Bell Canada International report as outlined in paragraph 11.6 above, AUSTEL had written to Telecom informing it that the claim in the Bell Canada International report to the effect that Telecom’s customers received a grade of service that meets global standards goes too far because the study was an inter-exchange study and did not extend to the customer access network – AUSTEL had agreed to the study being so limited on the basis that other monitoring it had requested Telecom to undertake on AUSTEL’s behalf should provide AUSTEL with the data on the efficacy of the customer access network [CAN].”

Also note, on page 246, point 11.18, in the AUSTEL COT Cases Report, AUSTEL states:-

“Telecom responded to AUSTEL’s letter 16 December, 1993 referred to in paragraph 11.10 above in the following terms – As you may be aware, Telecom has extensively tested the CAN.  These results indicated a satisfactory level of performance.”

6th December, 1993:  This internal Telstra memo from Ted Benjamin to Mr H Parker, Group Managing Director of Commercial and Consumer, states:-

“The survey found that 4% of the 2644 small business (ie. Commercial) customers surveyed perceive that they have experienced incoming call problems over the past month which they regard as Significantly or Very significantly affecting their business.” (GS-CAV 126)

Comment:

As shown above, Mr Benjamin was a TIO Council member as well as a very Senior Telstra Executive, therefore, he should have been neutral when providing the survey statistics to Mr Parker.  Numerous Telstra FOI documents show that the word perceive was consistently used by Telstra employees to suggest it was the customer’s equipment at fault, and not Telstra’s network.  On 23rd March, 1999 after a two-year investigation by a Senate Estimates committee, Senator Alan Eggleston advised the Australian Financial Review that, where the COT cases FOI issues were concerned, Telstra acted as a law unto themselves.

7th December, 1993:  Telstra’s Ian Campbell writes to Warwick Smith TIO and administrator to the FTSP stating:-

“The person within Telecom responsible for the final decisions on resourcing procedural arrangements, assessor/s and access to material is myself…”

There is no mention in this letter of arrangements concerning an arbitrator/s. (GS-CAV 127)

16th December, 1993:  This letter, from Denise McBurnie (Freehills) to Alan Smith, states:

“I refer to your letter of 6 December 1993 and our subsequent telephone conversation. …”

“With respect to your comment concerning a customer from Mount Gambier, South Australia, who has reported to you that he had difficulty contacting you on your 008 service, if you are able to provide our client with more details (such as the caller’s telephone number) our client may be able to investigate and comment further on the problem which this customer reported to you.” (GS-CAV 128)

Telstra never explained why this Mt Gambier customer, and numerous other customers, were all experiencing the same problems, and neither did Freehills.  What this document does confirm is that, in the case of Alan Smith (where his telephone problems and faults were concerned), he had to deal directly with Freehills’ before a resolution was reached.

17th December, 1993:  Len Budge, Manager of TELCATS (Telstra’s Office of Customer Affairs) sends an internal memo to Harvey Parker, Group General Manager of Commercial and Consumer, stating:-

“For your information please find enclosed the final Cot market research report which was delivered to Austel this week. As indicated in the draft, 4% of the small business customers surveyed indicated that they were experiencing incoming call difficulties which they judge as significantly, adversely affecting their business.”
(GS-CAV 130)

This four per cent of small business customers experiencing incoming call difficulties is addressed below, at 11th April, 1994.

21st December, 1993:  Ian Campbell’s letter to Warwick Smith, TIO and administrator to the FTSP, confirms the proposal is an assessment and discusses the appointment of an assessor. (GS-CAV 131)

Ian Campbell is the same person referred to in the AUSTEL COT Cases Report, see point 5.7. He wrote to Mr Schorer, on 23rd September 1992, stating:-

“The key problem is that discussion on possible settlement cannot proceed until the reported faults are positively identified and the performance of your members’ services is agreed to be normal. As I explained at our meeting, we cannot move to settlement discussions or arbitrations while we are unable to identify faults which are affecting these services.”

Telstra writes to Warwick Smith TIO Re FTSP

Also on 21st December, 1993:  Telstra and Warwick Smith discuss the Fast Track Settlement Proposal (FTSP).  Please note: there is no mention in this letter of an arbitrator being appointed, only the appointment of an assessor because the process “is a flexible, quasi-judicial process”. (AS-CAV 48-E)

Alan submits his first FTSP FOI request (AS-CAV 48-E):-

“Dear Mr Holmes

“As you are aware of the Fast Track Settlement, you will understand this request. I am applying directly to yourself for All documentation, files and records relating to my business, the Cape Bridgewater Holiday Camp.”

“This request is made under FOI. …”

“These documents are required within 14 days, to enable the Cape Bridgewater Holiday Camp to present our settlement submission.”

Please note: this letter was copied to Mr Robin Davey, chair of AUSTEL (who facilitated the FTSP), and Senators Richard Alston and Ron Boswell, who both advised me, through Graham Schorer, to enter into the FTSP settlement arrangement.

7th January, 1994:  This letter from Warwick Smith to Graham Schorer, mentions only an assessor, not an arbitrator. (GS-CAV 132)

And, this internal Federal Government memo from Tom Dale, of Minister Lee’s office, states:-

“I spoke with Warwick Smith in light of today’s press reports that he is investigating the telephone monitoring allegations. …”

He also mentioned that the fast-track claim settlement process was not getting anywhere due to the COT cases knocking back the TIO’s proposals for people to determine their claims. We should not give the Minister the impression that the fast-track would fix things: it is far from certain.” (AS-CAV 48-F)

The issue being discussed, whether the “fast-track” would fix these matters should have, in Alan’s case, been addressed before he went into the FTSP.  Robin Davey, AUSTEL Chair, had already explained to the previous Minister, the Hon David Beddall MP, on 26th August, 1993 advising him that Telstra were aware of faults still affecting Cape Bridgewater.

Exhibit AS-CAV 48-G to 91 states:-

Cape Bridgewater

Telecom has admitted existence of unidentified faults to AUSTEL.”

Alan’s questions to the Telecommunication Industry Ombudsman, John Pinnock, have always been:-

  • Why was this admission by Telstra to the Government Regulator, AUSTEL, and the advice given by AUSTEL to the Minister regarding these unidentified faults in existence in Cape Bridgewater, hidden from Alan and his technical advisors during his arbitration?
  • Why did AUSTEL and the Government allow Telstra to submit, under oath, in their arbitration defence of Alan’s claims, that, during Telecom’s fault investigations at Cape Bridgewater in 1993 and 1994, they found no faults that would affect Alan’s business endeavours?

10th January, 1994:  This letter from Telstra’s Steve Black to Warwick Smith, TIO, had a copy of Telstra’s Preferred Rules of Arbitration attached that was faxed to Telstra on the same day by Freehills. The letter included the comment:-

“You no doubt appreciate that there is a need for such rules and procedures to be set before any ‘Fast Track’ review is commenced.  That is because the ‘Fast Track’ agreements signed by Mr Schorer, Mrs Garms, Mrs Gillan and Mr Smith, only constitutes agreements to enter into an arbitration process.” (GS-CAV 133)

Whoever persuaded Steve Black to write this statement (that the agreement only constitutes agreement to enter arbitration), did so, knowing they were misleading Warwick Smith, at the detriment of the COT cases.

When Warwick Smith met the COT cases, on 11th January,1994 (see below), he was made aware of the previous commitment given to Mr Schorer, by Ian Campbell, that the FTSP cannot fully proceed until Telstra positively identified the problems and faults affecting the COT cases’ businesses.  Warwick Smith was adamant that any continuing problems and faults raised by the claimants would be investigated prior to the assessor and/or arbitrator making his decision. The CAV Chronology – LGE Alan Smith file confirms neither Warwick Smith nor Telstra abided by this commitment.

11th January, 1994:  This letter from Steve Black to Warwick Smith refers to an assessor being appointed to provide an independent and impartial perspective.  This letter confirms Mr Black’s personal preference was for one assessor.  The process was only ever intended to be an assessment. (GS-CAV 134)

The COT cases alerted Warwick Smith, (TIO) and administrator of the FTSP, during January 1994, that AUSTEL’s chair Robin Davey had assured them that Freehill Hollingdale & Page, would no longer be involved in their Fast Track Settlement Proposal as he instructed Telstra, on 3 October, 1993 that Freehills were not to be involved.  Yet, in January 1994, Telstra appointed Freehills as their arbitration defence lawyers to Alan and Graham’s arbitration under the nose of Warwick Smith.  In fact, Simon Chalmers of Freehills was seconded by Telstra in January 1994 as their official FOI co-ordinator (scrutineer) of what FOI documents should be provided to the COT cases and which ones should be withheld.

COT requested documents vetted prior to delivery

11th January, 1994:  Warwick Smith, (who was supposed to be independent of Telstra during the FTSP COT process) receives a letter from Telstra’s Steve Black, which states:-

“It was agreed at a meeting between Mr Graeme Ward and Mr Steve Black of Telecom and Dr Bob Horton and Mr Neil Tuckwell of AUSTEL on 7th January 1994 that:

  • Information obtained from Telecom, in the course of AUSTEL’s regulatory functions, and relevant to any parties involved in a formal arbitration process with Telecom under the control of the Telecommunications Industry Ombudsman (TIO) will only be released after consultation with the TIO and Telecom.” (GS-CAV 135)

Clearly the TIO, although officially acting as the administrator of the COT arbitrations, were working with Telstra and the Australian Regulator to ensure ONLY material that was first scrutinised by Telecom and the TIO would be passed on to the COT members.

A further alarming document, relating to the vetting of COT information, from Steve Black to Warwick Smith and dated 11th July, 1994, states:-

“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 proved to the arbitrator, then Telecom would accede to this request.” (AS-CAV 62-B)

Please note: None of the COT cases were advised that the TIO-appointed Resource Unit would be allowed to vet what arbitration documentation they thought were relevant to the process before introducing it to the arbitration process.

In Alan Smith’s case, the TIO-appointed arbitration Resource Unit, Ferrier Hodgson Corporate Advisory (FHCA), withheld regulatory information and arbitration material that should have been provided to the arbitrator and Alan Smith.  FHCA has since admitted (2nd August, 1996) to withholding AUSTEL regulatory letters, exchanged between AUSTEL, Telstra and the arbitrator during October and December 1994, which were all relevant to Telstra’s defence and Mr Smith’s claim.

11th January, 1994:  Telstra’s Paul Rizzo, writes a similar letter to AUSTEL’s acting Chair, Mr Bob Horton. He states:-

“Information obtained from Telecom, in the course of AUSTEL’s regulatory functions, and relevant to any parties involved in a formal arbitration process with Telecom under the control of the Telecommunication Industry Ombudsman (TIO) will only be released after consultation with the TIO and Telecom.” (GS-CAV 136)

12th January, 1994:  A further letter from Steve Black to AUSTEL’s John MacMahon states:-

“In accordance with our agreement reached in the meeting with yourself and your Chairman, these documents will be released through the TIO at the appropriate stage of the arbitration process.”

“It is my view that the appropriate time for release is after the assessor is appointed and the procedural rules for the arbitration process have been agreed by all parties.”

“However, as indicated in our agreement, this decision will be taken in consultation with the TIO.” (GS-CAV 137)

Alan and Graham attend the first COT FTAP meeting

12th January, 1994:  Alan and Graham attend the Melbourne office of the TIO, Warwick Smith.  At this meeting, Peter Bartlett confirms the arbitrator can only make a final determination based on documents provided to him, in accordance with the Arbitration Agreement.  This confirms the COTs’ understanding that only through an arbitration process could they obtain all the documents needed to submit their claims. (AS-CAV 65)

Numerous documents in the main CAV Target files confirm the continuing problems with Alan’s fax line and show how this affected the submission of his claim at the time of the FTSP and FTAP, including raising the question of how his business losses could be commercially assessed if the phone and fax problems were still apparent.  It was a futile exercise until Telstra fixed the problems and faults.

Because of the complexity of the issues the arbitrator was to address, it was agreed to base the arbitration rules on the original commercial FTSP; the rules of the arbitration agreement (FTAP) would incorporate the rules of the original FTSP.

When Robin Davey, then AUSTEL Chair, assisted with drafting the original FTSP rules, he was fully aware of Telstra’s unethical behaviour, during Alan’s settlement of 11th December, 1992 and of their conduct towards Graham Schorer.  He was also aware of the allegations regarding Telstra’s phone bugging and misleading conduct and he knew these issues were independent parts of Graham and Alan’s overall complaints.  Mr Davey therefore wanted the FTSP rules to be drafted to allow for all these individual issues, including Graham’s problems and Alan’s commercial settlement process, to be properly and separately assessed under the FTSP.  This was achieved by including clause 10.2.2, which covered the way the claimants could present their claims.  This clause initially referred to “each of the Claimants’ claims” and was twofold in meaning:  it allowed claimants to present separate and different causal links between the alleged service’s difficulties, problems and faults (such as billing errors, phone bugging etcetera).  These were to be assessed separately, based on the evidence each COT case presented.  In this way, the FTSP assessor could also look at evidence regarding the way Telstra previously misled the COT four in their individual settlements.

Alan later followed these guidelines when preparing his claim but was surprised to find Dr Hughes did not cover the individual sections in his award – nor did he prepare any written findings on these separate issues.  Alan later discovered that clause 10.2.2 was removed from the arbitration rules, without the permission or knowledge of the claimants.  There is no correspondence in existence, from either the TIO or the arbitrator, to indicate that COTs ever agreed to the removal of this important clause.

12th January, 1994:  Telstra file note FOI folio K00269 – Legal and Professional Privilege –states:-

“Ted Benjamin called. He wants us to collect information together for Golden Messengers in a similar fashion to what is being done for Cape Bridgewater under FOI.  The assumption is that either the arbitrator or Mr Schorer will be looking for the information soon as a result of the fast track arbitration process.” (GS-CAV 138)

Compare this Legal Professional Privilege document with evidence above confirming Ted Benjamin provided confidential TIO-council information to Telstra employees, on 30th November, 1993 and he later admitted to John Pinnock TIO, on 7th September, 1995, that Telstra withheld 40 per cent of the requested FOI documents from Alan Smith and the arbitrator (see CAV John Pinnock Target file).  It appears the same withholding of documents was about to happen to Mr Schorer.

12th January, 1994:  John Rundell, of FHCA (the newly appointed FTSP Resource Unit), provides Graham Schorer with curricula vitae for:

  1. Paul Howell, DMR Group Inc – Corporate, Montreal
  2. Jan Blaha, DMR Group Australia Pty Ltd (GS-CAV 139)

In the draft of Alan Smith’s Arbitrator’s Award (see CAV Relevant Information File), at point (i), Dr Hughes states:-

“[P]ursuant to paragraph 8 of the arbitration agreement, I had power to require a ‘Resource Unit’, comprising Ferrier Hodgson, Chartered Accountants, and DMR Group Australia Pty Ltd, to conduct such inquiries or research as I saw fit.”

In the final version of the Arbitrator’s Award (see CAV Relevant Information File), Dr Hughes had added to point (i) so it now reads:-

“[P]ursuant to paragraph 8 of the arbitration agreement, I had power to require a ‘Resource Unit’, comprising Ferrier Hodgson, Chartered Accountants, and DMR Group Australia Pty Ltd, to conduct such inquiries or research as I saw fit. By consent of the parties, the role of DMR Group Australia Pty Ltd was subsequently performed jointly by DMR Group Inc. and Lane Telecommunications Pty Ltd.”

On 24th May, 1994 Peter Bartlett provided Graham Schorer with a copy of the Confidentiality Undertaking, signed by Jan Blaha, DMR Group Australia Pty Ltd, but it was not until late February 1995 that Warwick Smith, TIO, told the COT claimants DMR Group Australia Pty Ltd pulled out of the arbitration procedure because of a conflict of interest.  The TIO never explained when this conflict of interest was discovered. The claimants were then forced to accept Paul Howell, DMR Group Inc. (Canada) as the substitute TIO-appointed Principal Technical Consultants, with Lane Telecommunications Pty Ltd as their assistants.

Questions:

  1. Did DMR Group Australia Pty Ltd want to change their corporate identity to DMR Inc. on 12th April 1994 because, right from the outset, they believed that, as DMR Inc. (Canada) was offshore and not affiliated financially with the Australian arm of DMR, there would be no liability problems if Telstra issued a court injunction in relation to DMR’s technical findings? If they did change their corporate identity so they could work with DMR Inc. (Canada) and thereby avoid the risk of a messy Australian legal challenge by Telstra, then Jan Blaha should never have signed the Confidentiality Agreement.
  2. Why was Graham Schorer given the CV of Paul Howell, of DMR Group Inc., on 12th January, 1994 before Graham and Alan even signed the FTAP but after they had accepted DMR Group Australia Pty Ltd, on 9th March 1995?
  3. Why did DMR Group Australia Pty Ltd ask, through Ferrier Hodgson, for their business name to be changed to DMR Group Inc. before signing the Arbitration Confidentiality Agreement?

These points suggest that all the parties to the arbitration, except the claimants, were aware of a link between DMR (Australia) and DMR (Canada), before we signed the FTAP.

14th January, 1994:  This letter to Graham Schorer, from Warwick Smith, advises Dr Hughes is to be the assessor to the FTSP. (GS-CAV 140)

Telstra FOI document K00604, subject Voice monitoring of Priority Investigation Services, confirms the local Portland Technical Officer was tapping Alan’s telephone conversations from at least June to August 1993.  The local Portland Technical Officer during this period was Gordon Stokes. (AS-CAV 48-H)

The phone bugging and privacy issues were issues Alan raised with Warwick Smith, during the FTSP.

17th January, 1994:  Warwick Smith sends out a media release confirming Dr Gordon Hughes is the assessor to the FTSP. (GS-CAV 141)

18th January, 1994:  Telstra internal memo, FOI folio R11698, marked Telecom Confidential, from David Stockdale to Simon Chalmers, who was seconded from Freehills, states:-

“I feel obliged to voice concerns I have regarding the information being provided regarding the investigations of Cape Bridgewater and Golden Messengers courier service.” (GS-CAV 142)

AUSTEL acting Chair, Bob Horton, writes a scathing letter to Mr Schorer, stating:-

“As the TIO Fast Track concept does not challenge nor change any of the parties’ rights and responsibilities, the implication that there has been a deal done between Telecom and AUSTEL to the detriment of the COT case members or that Telecom has imposed ‘an instruction’ on AUSTEL is clearly nonsense.” (GS-CAV 143)

This letter from Dr Hughes, to Graham Schorer notes:-

“I have been provided by the TIO with a document entitled ‘Telstra Corporation Limited – “Fast TrackProposed Rules of Arbitration.’ I have not yet formed a view as to the suitability of this proposal.” (GS-CAV 144)

Minutes taken during an Arbitration Meeting, on 17th February, 1994 (see below) records, on page 3:

“Mr Schorer was disturbed that once Mr W Smith was in place, there was a document prepared by Telecom of proposed rules for the arbitration. Mr Schorer considered Telecom was already moving away from the spirit of the FTSP, Mr Bartlett and Mr Hughes both stated they had not received this document [the FTAP] and had not read it and that it was irrelevant.”

The letter Dr Hughes received from the TIO on 10th January, 1994 one month before this meeting (see above), proves that Dr Hughes had already been provided with Telstra’s proposed Rules of Arbitration, so why did he tell this meeting the exact opposite?

Why would an independent assessor assess the defendant’s suggestions before reading the rules of the FTSP process, which the independent regulator, AUSTEL, drafted and which were already signed by both parties to the process as the rules to be used by the assessor?

COMMENTARY:

  1. Dr Hughes was appointed as the assessor.
  2. The FTSP rules regarding a review of the commercial assessment process were already modified, in conjunction with AUSTEL, to ensure the document and process would be workable. A mutually accepted, modified version of the settlement agreement was already signed and was a non-legalistic process that both parties agreed to as a one-off agreement.  It was not the same as the TIO/Telstra proposed method of arbitration.
  3. Dr Hughes did not provide any written comments on his views regarding the Arbitration Agreement until after he had finalised the first arbitration – Alan Smith’s. At this point, in his letter of 12th May, 1995 to Warwick Smith, Dr Hughes advised that the Arbitration Agreement was not credible and needed revising for the remaining COT claimants.

19th January, 1994:  AUSTEL’s Dr Bob Horton writes to Telstra’s Steve Black stating:

“Your letter of 17 January asked AUSTEL to seek in formal terms Telecom’s provision of all voice monitoring tapes in its possession relating to the COT Cases. …”

“Please ensure that all relevant tapes are provided to AUSTEL as a matter of urgency, as we believe they may be of relevance to AUSTEL’s review which is proceeding apace [sic], as we have previously indicated.” (GS-CAV 145)

As shown in Dr Hughes letter to Mr Schorer, dated 10th November, 1994 (see later), Telstra is:-

“therefore, prepared to classify the allegations of unauthorised telephone tapping as falling within the description of ‘alleged service difficulties and faults’.”

Neither Telstra nor Dr Hughes addressed the unauthorised telephone tapping issues in Graham’s arbitration.

Graham Schorer writes to Ms Jill Cardiff, Commonwealth Ombudsman’s Office, raising his concerns about the release-of-documentation deal stating:-

“We view this as an extremely serious matter and ask that you

20th January, 1994:  This Telstra internal memo from Trevor Hill to Alan Humrich, FOI folios B00421, B00424 and B00425, discuss the same type of lock-up problems with the RAM relays, which Graham Schorer previously brought to AUSTELs attention in early 1994.  This document entitled Summary statement on PBX groups for BCI report ‘Rotary Hunting Group Study’ , states:-

“The resultant investigations revealed that relay armatures were sticking due to a phenomena termed ‘wear frit’ or ‘fretting’ where airborne oil and dust and/or ferric oxide particles combined with moisture are attracted to the magnetic zone. … This paste tends to grasp the armature backstop as an anchoring point, the relay armature being held un-opened by the paste.”
(GS-CAV 146-A)

When Bell Canada International (BCI) carried out their PBX study on 14th December, 1993, at the North Melbourne exchange that serviced Golden Messenger, it appears Telstra failed to provide BCI with document B00219/220.  In Telstra’s CAN FOI document folio K34734, dated 25th January, 1994 (discussed below), it is confirmed that five auxiliary lines to Golden Messenger all had potential problems (i.e., 329 7009 – 329 7734 – 3329 0331 – 329 0731 and 329 0056). However, what is most important about exhibit GS 146-b is that, on page 41 of the BCI PBX Rotary Hunting Group Study, BCI listed the same five lines referred to in folio K34734 as all being workable PBX auxiliaries.  There is no mention of the potential problems associated with these five lines, which suggests BCI did not test the Customer Access Network (CAN) after all.

This Chronology of Events shows Mr Schorer and Alan Smith had valid reasons to challenge the authenticity of the BCI and Telstra’s SVT processes.

Ms Cardiff responds to Graham’s letter of the 19th January, 1994 stating:-

“I am seeking Austel’s comments on the substance of your complaint and I shall contact you again as soon as we have considered its response.” (GS-CAV 147)

The TIO Warwick Smith, administrator to the FTSP, AUSTEL’s Robin Davey, author of the FTSP, and a number of Senior Government Ministers from both sides of Parliament, were assured by Telstra that they would provide the original COT four cases all the material they requested under FOI, in support of their claims to be lodged under the FTSP.  However, by now Telstra had threatened the COT cases that unless they sign a new Arbitration Agreement, they will not get the documents to support their individual settlement claims. (AS-CAV 51)

AUSTEL’s Cliff Mathieson and Michael Elsegood countersign a very important letter, regarding the SVT tests, to Telstra’s Mr A Humrich, general manager of central region network operations. The letter states:

“As discussed late last year with Mr J Gitsham, the following comments are offered on your draft set of verification test for public switched telephone services with recurring service difficulties. …”

“Where test results do not meet the essential outcome, remedial action should be taken and the relevant tests repeated to confirm correct network operation.” (GS-CAV 149)

This confirms what Robin Davey promised the COT four, before they signed the FTSP.  Would AUSTEL and the Federal Government be in a position to force Telstra to test a service, again, if the SVT tests proved negative?  In my case the answer was NO.

21st January, 1994:  AUSTEL’s Bob Horton writes to Telstra’s Paul Rizzo, Group Managing Director, stating:-

“In my letter of 13 January, 1994 I questioned the existence of an integral formal agreement on the distribution of material relevant to the COT cases. The purported existence of such an agreement was brought to my attention by Mr Black at our meeting on 7 January, 1994 as a mechanism by which documentation could be released, where it was relevant to the arbitration process associated with the TIO. …”

“I can only conclude that any such formal agreement was only a developing idea on the part of Mr Black.” (GS-CAV 150)

This internal Telstra memo Folio R15696 states:-

“Simon Chalmers, is from Freehill Hollingdale & Page, Telecom’s solicitors.  I suggest that you action this request not just for the two customers mentioned but also for Mr G Schorer and Mr A Smith. Information that has previously been sent to the Viewing Room will be accessed from there.” (GS-CAV 151)

FOI document folio K00094 is an email discussing CCAS connections and includes the statement:-

“several faults have been reported as originating from this number.”

“312 3796 is the Operations Manager for Golden Messengers they have reported difficulties in getting thru to G.M. frequently [sic].” (GS-CAV 152)

24th January, 1994:  This letter from Frank Shelton of Minter Ellison to Dr Hughes, confirms Mr Shelton’s involvement in changing the original AUSTEL-facilitated commercial FTSP document into an Arbitration Agreement, which eventually became a highly legalistic process.  At this time, Mr Shelton was also president of the Institute of Arbitrators Australia. (GS-CAV 153)

In his letter of 12th May, 1995 (see below) to Warwick Smith, Dr Hughes writes they “did not allow sufficient time in the Arbitration Agreement”.  He was referring to Frank Shelton’s revised version of the AUSTEL-facilitated FTSP, which became the FTAP Arbitration Agreement.  Obviously, Dr Hughes believed the mistakes in the Arbitration Agreement document meant the arbitration itself lacked credibility and he blamed those who prepared the document for this situation.  Dr Hughes’ letter of 12th May, 1995 was concealed from Graham Schorer during his arbitration and, before that, from Alan Smith during his arbitration appeal period and neither was it provided, by Mr Pinnock, on 26th September, 1997 when he advised the Senate that Dr Hughes had no control over the arbitration procedures (discussed later).

Warwick Smith writes to Ms Fay Holthyuzen, Assistant Secretary, Regulatory Branch, Parliament House, attaching a public media release stating Dr Gordon Hughes had been appointed as the assessor to the COT FTSP.  Please note:  There is NO mention in this media release of an arbitration process. (AS-CAV 49-B)

25th January, 1994:  The following Telstra internal email FOI folio K34734, from Peter Gamble to Alan Humrich, exposes some of the CAN problems experienced by Golden Messenger:-

“Following the measurements taken on the CAN for Golden Messenger today, two potential problems have been located. …

  • 329 7009 has a probable high resistance joint or similar problem.
  • 329 7734 has a double jumper on the main frame cable pair side (cable 6 pair 1666)”.

“Would you please arrange for these to be followed up urgently.”

“There are also three errors in FACS – the cable pairs listed are incorrect – as follows:

  • 329 0331
  • 329 0731
  • 329 0065”

“An attempt to locate the correct data was made, but without success. Accordingly, measurements were not taken on these three pairs.”

This confirms Peter Gamble was aware of the CAN problems affecting Golden Messenger services, yet Telstra’s briefing B003 report page 12 {p-d}, for 1 January, 1994 to April 1995 records no CAN problems, affecting 03 329 7009 or 03 329-7734. This is a further example of Telstra being selective when documenting facts.

Question:

Why does Telstra’s briefing B003 paper only refer to two phone auxiliary potential problems, when FOI folio K34734 states:-

“There are also three errors in FACS – the cable pairs listed are incorrect – as follows – 329 0331 – 329 0731- 329 0065. An attempt to locate the correct data was made, but without success,”?

Telstra’s briefing B003 report relevant to pages 12 {p-d) and 12 {p-e} are attached to Graham Schorer – CAV Relevant Information file exhibit 6, part 4 and 6 respectively.

Comment:

In the AUSTEL COT Cases Report at point 5.32, on page 91 AUSTEL states:-

“The fact that faults continued to impact upon the businesses in the period following the settlement shows a weakness in the procedure employed.”  

The following condensed sample of fault complaints lodged by Mr Schorer and staff confirm the weakness in the procedure employed were still there during the Fast Track Arbitration Procedure.

Telstra’s fault records show:

  • 20/1/94: Telstra FOI folio P37898 (Golden Messenger) “Caller received RVA from Sth Yarra to 2860055.”
  • 20/1/94: Telstra FOI folio R37898 (Golden Messenger) “Not receiving ring on 2860055.”
  • 21/1/94 to 7/2/94: Telstra’s FOI folio R37897, R37896, and R37895 confirm six different fault complaints were lodged with Telstra, by Graham or a staff member, during this period.
  • 7/2/94: Telstra FOI folio R37894 (Golden Messenger) states: “No dial tone on 3292896, has been tested and appears to be open one side in the exchange. NDT – No Dial Tone.”
  • 22/3/94: Telstra FOI folio K00047 (GM Holdings) states, “the originating caller will not receive ring tone from the network untill [sic] the network receives a ‘call-confirmation’ or ‘call alert message’ from the PABX. If this tone/message is not received then the caller would receive either RVA or Busy tone.”
  • Telstra fault document dated 2nd May, 1994 – SVC03 states: “Mr Schorer rang to say all 68 lines are out; has to be Telecom. Exchange tested again and proved to be in the CPE.”
  • 19/4/94: Telstra FOI folio K00028 (Golden Messenger) author states: [redacted] requested me to ring both numbers which I did at 1530 and also received eng[aged] signal. NRR – Not Receiving Ring.”
  • 2/5/94: Telstra fault record SVC03 states: 30/04/94 18:18 Mr Schorer rang to say all 68 lines are out.”
  • 21/3/94 to 29/6/94: Telstra FOI documents folio R37884 to R37893, confirm Mr Schorer and/or his staff lodged a further 19 fault complaints between these dates. (GS 154-b)

The above dates and quotes are derived from Telstra’s own fault documentation and can be supplied on request.

Please compare the above CAN issues with the AUSTEL information directly shown below.

In the AUSTEL COT Cases Report (dated April 1994) AUSTEL states:-

“Prior to receiving Telecom’s response to the Bell Canada International report as outlined in paragraph 11.6 above, AUSTEL had written to Telecom informing it that the claim in the Bell Canada International report to the effect that Telecom’s customers received a grade of service that meets global standards goes too far because the study was an inter-exchange study and did not extend to the customer access network – AUSTEL had agreed to the study being so limited on the basis that other monitoring it had requested Telecom to undertake on AUSTEL’s behalf should provide AUSTEL with the data on the efficacy of the customer access network (CAN). (See page 243, point 11.8)

Comment:

Even as late as November 2007, Telstra had still not tested Golden Messenger’s CAN as they should have, according to the agreement between Telstra and AUSTEL that allowed BCI to limit their testing in regards to Golden Messengers’ business phone lines.

Graham originally agreed to the Service Verification Testing (SVT) on the condition Telstra provide “Call Line Identification” on all answered test calls: this process alleviated possible tampering with the test results.  Telstra, however, refused to comply with this request.

As shown in Chapter 1, under the heading Broken Promise, there were serious deficiencies in the SVT process at Alan Smith’s business; yet Telstra still used the corrupt test results to support their arbitration defence claims that the lines into Alan’s business were operating correctly.  In his CAV LGE information for 29th September, 1994, in relation to these SVTs, Alan Smith proves, using Telstra’s own Call Charge Analysis System (CCAS) data, the tests carried out on all three of his business lines were, beyond any doubt, fundamentally flawed.  The only conclusion can be that Telstra refused to carry out the SVT calls at Golden Messenger, with Call Line Identification operating for each test call, because they did not want to risk introducing a microscope into the process lest it reveal the same problems Telstra experienced when testing Alan’s business.

Please note:  on 27th July, 2007 Brian Hodge, B Tech, MBA (B.C. Telecommunications), assessed the November 1993 Bell Canada International (BCI) Addendum Cape Bridgewater tests and the 29th September 1994 SVT Cape Bridgewater tests, including the CCAS data report.  He concluded both the BCI and Verification Testing processes conducted at Cape Bridgewater were fundamentally flawed.  Mr Hodge held a number of senior positions during his 28 years as a Telstra employee, including assessing CCAS data.

LIVE VOICE MONITORING OF PHONE CALLS

1992 to 1994

From mid-1992 until January 1994, Peter Turner from the Australian Social Centre (ASC) in Hartwell, Victoria, acted as Alan’s agent for the over-40s singles-club weekends away due to the number of complaints registered by hopeful holiday weekenders regarding the difficulties of reaching Alan by phone, see document (AS – CAV 21).

During two separate periods from May to July 1993, two different ladies told Alan they left messages on Alan’s answering machine regarding their intended travel to Cape Bridgewater.  Both these women remarked on the female voice on the answering machine, while the voice on the camp’s answering machine was Alan’s.  One of these women particularly asked if Alan ever gave out client details or passed details of female clients to men clients?  He reassured her that this certainly would never happen, without seeking her permission first.  She said, since speaking to Alan, she had received strange and vaguely suggestive phone calls and the caller clearly knew she was single.  Alan suspected, from discussions with other clients who also mentioned leaving a message with a female, that Telstra was live monitoring some of his phone calls.

Documentary Proof of Voice Monitoring

Telstra documentation provided by Alan Smith, to the Australian Federal Police (AFP) confirms Telstra admitted to live-voice monitoring of Alan’s phone conversations.  The AFP were advised Telstra only listened to Alan’s telephone conversations from June to August 1993.  Questions raised on page 6 of the AFP transcript taken during Alan’s interview on 26th September, 1994 shows the AFP were amazed that:

  • Telstra was able to document the actual name of the company (the O’Meara bus line) Alan was discussing work with a tender during 1992, before June and August 1993 (AS – CAV 23-B).
  • Telstra FOI document A10148 also confirms COT telephone conversations were taped (AS – CAV 23-C).
  • Arbitration document, DMR & Lane’s report, further confirms that a Malicious Call Trace (MCT) was placed on both Alan’s 055 267 267 and 055 267 230 services, late in May 1993. The MCT equipment is a totally different monitoring device than the phone interception device (the EOS) that Telstra admitted to using to listen to Alan’s telephone conversations.  The MCT equipment was disconnected on 19th August, 1993 and September 1993 (AS – CAV 23-D).

The MCT equipment locks the line for 90 seconds after each successful call and therefore no other call can ring through until this lock-up is released.  Documents, submitted to arbitration, show at least 81 calls connected to Alan’s 267 267 line during this MCT period, but, with the equipment in place, this is impossible.  This evidence was also provided to AUSTEL on 19th December, 1995. Alan wonders if some of these calls were actually diverted (and connecting) to some other location and if so, did these calls reached a female voice?  Karen Gladman was no longer living at Cape Bridgewater by this time and her voice was removed from Alan’s answering machine over Christmas of 1992.  Whose voice were these callers hearing?  Could someone have taken a copy of Karen’s voice when it was on Alan’s answering machine and used it somewhere else?

Gordon Stokes, Telstra’s Portland technician, admitted in a witness statement, on 12th December, 1994 that he used EOS listening equipment to intercept Alan’s calls. (See Allen Bowles’ interception file)

27th January, 1994:  With no official guidance from Warwick Smith (the administrator to the FTSP), on how the COT cases should submit their claims to the assessor, Alan submits an interim-type testament of the problems and faults his business is experiencing.  Alan states:-

“I present these summaries for your viewing. This should give an insight into some of the difficulties experienced during my years when trying to run a telephone dependant business.”

Exhibit (AS 322-A) shows this letter, with attachments, was addressed to Warwick Smith (administrator), Dr Hughes (assessor), Peter Bartlett (special counsel to Warwick Smith) and John Rundell (FHCA).  Although this letter is addressed in more detail, below it is important to point out the following:-

Neither the administrator, assessor, nor the resource unit passed any of the claim material Alan provided, on 27th January, 1994 during the FTSP, into the Fast Track Arbitration Procedure. Furthermore, in Alan’s letter of claim, dated 15th June, 1994, Alan’s advisor, Garry Ellicott, reminded Dr Hughes of Alan’s interim claim supplied to him in his letter of 27th January, 1994. (AS 322-A).

As Warwick Smith, Peter Bartlett and Dr Hughes forced the COT four to abandon the already-signed FTSP and agree to the new Fast Track Arbitration Procedure, it was their responsibility to carry over my interim claim material from the previous settlement process to the arbitration procedure.  They did not do so. (AS 322-A).

28th January, 1994:  From mid-1993 until January 1994, Telstra Senior Management instructed Alan to document all his complaints directly to Denise McBurnie, of Freehill Hollingdale & Page, Telstra’s solicitors.  In one letter from Ms McBurnie, dated 28th January, 1994 and sent in response to Alan’s complaints regarding the ongoing telephone problems, she states:-

“As the information provided originally in your letter dated 12 November 1993 was of a limited nature, no specific response was possible to your allegations concerning over charging and short duration calls.”

In closing, she adds,

“As noted above in Telecom’s response to the questions raised in your paragraph 2, Telecom has not found any evidence of network faults applicable to and which could affect your service during the period to which you refer.” (AS 59)

The attached Telstra documents, see AS – CAV 35, 36, 37 and 38, show either Telstra misled Freehills regarding the 1800 national billing software problem, or Freehills misled Alan.  It is evident the information Freehills supplied Alan, via their client Telstra, does not match Telstra’s archival billing evidence.

Robin Davey prepared the AUSTEL draft FTSP document, dated 5th October, 1993 for Ian Campbell of Telstra.  At point 40 in this document, Mr Davey makes his concerns regarding Freehills having any involvement with the Fast Track Settlement Procedure clear.  He states:-

“If the attached letter dated 7th July 1993, from Freehill Hollingdale & Page to one of the COT cases solicitors is indicative of the way Freehill Hollingdale & Page have approached the COT cases in the past, I would be more than a little concerned if they were to have a continuing role.”

During the process of drafting the FTSP rules, and right up to the time Warwick Smith (TIO) became involved in the FTSP, AUSTEL was very concerned at the requirement for Alan and Graham to report their phone complaints to Ms McBurnie, before Telstra did anything about fixing the ongoing problems.  It seems that an important point has been lost here:  AUSTEL was a government-funded regulator and they made it clear Freehills should not be used in COT matters, yet this made no difference: Warwick Smith allowed Telstra to continue to use Freehills anyway.

Also, during the early negotiation FTSP period, Ms McBurnie wrote to Ian Row, Telstra’s Corporate Solicitor, on 10th September, 1993, (FOI document N00749) re COT cases Ann Garms, Maureen Gillan, Graham Schorer and Alan Smith.  She instructed him on how to hide documents under Legal Professional Privilege.  This certainly supports Robin Davey’s concerns about Freehills.  Remember, renowned legal professional privilege researcher Suzanne McNicol’s legal opinion, dated 30 June, 2000 on page 17 states that Freehills (4) knowingly made false or spurious claims to privilege. (AS-CAV 61)

As mentioned above, one of the conditions of the agreement was that Telstra would provide the COTs with any discovery documents needed to support our claims. Because there were no court guidelines regarding discovery documents within the FTSP, they were to be supplied under the Freedom of Information Act.  Both AUSTEL and the Commonwealth Ombudsman’s office agreed this was the only way the COT four could successfully present their claims.  Senate Hansard records of February 1994 show, however, Telstra at first refused to comply with this arrangement, unless the COTs paid fees amounting to thousands of dollars.  The government opposition and AUSTEL applied pressure to Telstra, on behalf of the COTs, and, finally, they agreed to provide the COTs with the documents they needed, free of charge.

30th January, 1994:  Telstra FOI document K01398 confirms that Telstra’s Tony Watson knew a RCM fault was the cause of the lock-up problem Alan complained of, but Telstra’s Bruce Pendlebury told him not to investigate this fault. (AS-CAV 58)

31st January, 1994:  A copy of Alan’s phone/fax account for 055 267230, when compared with these two Telstra CCAS documents, FOI number K01410 and K01411, confirm someone within Telstra handwrote the names of people Alan spoke to or faxed at this particular time.  Transcripts from Alan’s interview with the AFP, on 26th September, 1994 (AS-CAV 50-B), show the AFP were alarmed Telstra gathered private information about Alan including documenting the names of people Alan rang on a daily basis.  This CCAS data information was supplied to Warwick Smith and the Commonwealth Ombudsman’s office.

3rd February, 1994:  This Telstra facsimile header sheet from network operations to Bruce Pendlebury, subject Golden Messenger, states:-

“No known reason for double jumper. …”

“We can speculate – T’fers

          – old customer on tie pair some-time ago

          – pair change whatever”

“The important point is the other end was vacant.”

“THE JUMPER HAS BEEN REMOVED.” (GS-CAV 155)

Graham suspects the reason the double jumper “end was vacant” was because the open end had been connected to an interception listening device – a device that was removed during the AFP enquiry in Graham’s interception allegations.

Alan writes to the Minister for Communications, Minister Lee, stating:-

“To date these past days, I have registered a statutory declaration and sent it to both Telecom and Austel.  This was written in relation to my experience of getting an engaged signal from Golden Messenger courier services in-coming telephone service.  This service has 30 in-coming lines.  If this service had been fully engaged due to customer demand, Mr Schorer, spokesperson for C.O.T. would be dancing with joy.  However, this is not the case.  His customers are repeatedly complaining about his lines being engaged.” (GS-CAV 156)

This letter from Dr Hughes, to Mr Schorer, advises:

“I am enclosing my proposal as to the “fast-track” arbitration procedure.

This procedure has been devised in consultation with Messrs Minter Ellison Morris Fletcher, solicitors for the Telecommunications Industry Ombudsman. The proposed procedure is acceptable to the Ombudsman and members of the Resource Unit.”

“I would be grateful if you would let me have your comments on the proposal as soon as possible.” (GS-CAV 157)

Comment:

At this point, we have Telstra’s lawyers, Freehills (the company the Regulator advised Telstra should no longer be involved in COT matters), the TIO’s Solicitors and the Resource Unit, all devising the rules for and arbitration process after both Telstra and COT claimants signed a binding assessment review.

This letter from Graham Schorer to his legal advisor, William Hunt, refers to a letter Mr Hunt received from Dr Hughes regarding Frank Shelton’s Arbitration Agreement, supposedly revised from the initial commercial agreement.  Graham states he is:-

“personally rejecting the document in total, as this is not an arbitration procedure and I do not intend to be part of an arbitration procedure and I am also informed that the other C.O.T. Case Members do not intend and never agreed to be involved in an arbitration procedure. …”

“We were all advised by Austel that we were entering into an assessment process which was vastly different to an arbitration procedure.” (GS-CAV 158)

7th February, 1994:  Robin Davey, AUSTEL chair, writes to Ann Garms stating:-

“The thrust of the Fast Track Settlement Proposal was review and assessment. This may be seen by contrasting the words in the Fast Track Settlement Proposal with their emphasis on ‘a review’ and on ‘an assessor’” (GS-CAV 159)

8th February, 1994:  Warwick Smith writes to Graham Schorer stating:-

“Now that we have settled the appointments of assessor and resource unit…”

There is NO mention of the appointment of arbitrator in this two-page letter. (GS-CAV 160)

The Hon Michael Lee Minister for Communications writes to the Minister for Justice, the Hon Duncan Kerr:-

“I am writing to inform you that members of the group known as the Casualties of Telecom (COT) have contacted my Office regarding the Australian Federal Police inquiries into voice monitoring by Telstra of their telephones.”

“Both Mr Graham Schorer and Mr Alan Smith of CoT have informed my Office that they have information on Telstra’s activities in relation to these matters.” (AS 52-A)

Australian Federal Police are provided with the interception tapes

9th February, 1994:  Ms Jill Cardiff, Commonwealth Ombudsman’s Office, writes to Graham Schorer concerning his complaint that Telstra, AUSTEL and the TIO brokered a document-clearance arrangement regarding the release of documents to the COT cases.  In this letter, Ms Cardiff states:-

“The TIO recalls that he received a call from Mr Black to seek his views. The call was received at his home around mid-morning on 7 January. While the TIO gained the impression from the conversation that the call was being made during a meeting with Austel, he did not actually hear or speak to any other person during the call.”

“Of more significance, however, I have established that the meeting between Telecom and Austel did not take place until the afternoon of 7 January, which was some hours after the conversation between Mr Black and the TIO was conducted.” (GS-CAV 160)

What is established, from a letter from Steve Black to Warwick Smith, dated 11th July, 1994 (see below), is the TIO-appointed Resource Unit was given authority to filter arbitration documents, provided by Telstra (during the arbitration process), before passing material to the arbitrator and claimants.

10th February, 1994:  AUSTEL’s John MacMahon writes to Telstra’s Steve Black, stating:-

“Yesterday we were called upon by officers of the Australian Federal Police in relation to the taping of the telephone services of COT Cases.”

“Given the investigation now being conducted by that agency and the responsibilities imposed on AUSTEL by section 47 of the Telecommunications Act 1991, the nine tapes previously supplied by Telecom to AUSTEL were made available for the attention of the Commissioner of Police.” (GS-CAV 162)

15th February, 1994:  Dr Hughes’ letter to John Rundell, TIO-appointed Arbitration Project Manager from Ferrier Hodgson Corporate Advisory (FHCA), states:-

“I refer to our conference on 11 February and confirm I am agreeable in principle to the following amendments to the draft ‘Fast-Track’ Arbitration Procedure.” Please note: when reading this document the words “each of the Claimant’s claims” at clause 10.2.2, are still present in the agreement. (GS-CAV 163)

Comment:

  1. Graham Schorer and Alan Smith did not attend the conference on 11th The COT claimants, or their representatives, were not invited.
  2. In this letter, Dr Hughes is already agreeing to an amendment to the FTAP without even looking at the already agreed and signed FTSP.

17th February, 1994:  Robin Davey, AUSTEL Chair, writes to Telstra’s Steve Black, stating:-

“The thrust of the Fast Track Settlement Proposal was review and assessment. This may be seen by contrasting the words in the Fast Track Settlement Proposal with their emphasis on “…a review…”and on “…an assessor…”with the words in the Proposed Arbitration Procedure which was attached to the Fast Track Settlement Proposal.” (GS-CAV 164) 

Graham Schorer, Telstra, Peter Bartlett and Dr Hughes meet to discuss the settlement arbitration process.  Telstra’s transcript of this meeting confirms the COT claimants still wanted a commercial settlement process – not an arbitration procedure.  On page three of the transcript, Dr Hughes states arbitration would be more effective and that, as arbitrator, he could give appropriate directions for the production of documents” and he “would not make a determination on incomplete information”. (GS-CAV 165)

Comment:

In Alan Smith’s case, Dr Hughes DID make his determination on incomplete information when he handed down his award, even though Dr Hughes’ own Technical Consultants, DMR and Lane, asked for extra weeks to complete their findings – a request Dr Hughes denied.  Dr Hughes also did not access documents for Alan Smith, under the discovery process, despite being aware Telstra did not provide this information under FOI.  This is a complete about-face from the statement he made to the COT claimants in this meeting.

It was not until 1998, three years after the arbitrator deliberated on Alan’s case, that he received the FOI documents from Telstra that recorded this clandestine gathering. Telstra, their lawyers, Dr Hughes and the TIO’s office all attended this meeting, without ANY representative of the COTs present, therefore the meeting was unlawful. Graham and Alan had no opportunity to contribute to whatever discussions took place at this meeting and will never know how accurate (or otherwise) the minutes were. They will never even know if a second set of minutes exists somewhere.  The FTAP rules were changed to exclude the words “each of the Claimant’s claims” and clauses 25 and 26 were removed and alterations made to clause 24.  The secret changes to this legal document, the Arbitration Agreement, probably occurred at this clandestine meeting.  Dr Hughes attended this meeting, while COT claimants were in preliminary negotiations regarding the forthcoming arbitrations:  this is no different to a judge meeting in his chambers with the defence team, but, without the presence of the plaintiff in the matter, and planning how the judge will conduct the trial.

This meeting, when coupled with Telstra’s letters of 11th January and 11th July, 1994 to Warwick Smith, indicates the COT claimants had absolutely no chance of success, from the moment they were forced to abandon the FTSP.  It is of great concern that the TIO apparently agreed to COT-requested documents being first vetted by AUSTEL and the Resource Unit before they were passed onto the COT claimants (AS 62 and AS 63).  Fancy the defendants (Telstra) discussing what documents were relevant with the administrator of the process (the TIO)!

What is interesting to note from the author of these minutes is the statement:-

“Mr Smith stated that he would not endorse the rules as fair unless clause 10.2.2 repeated clause 2(f) of the Fast Track Settlement Proposal.”

See last paragraph {p1}.  Are the COTs to assume that because the words from the Arbitration Agreement at clause 10.2.2 each of the Claimant’s claims, which were derived from clause 2(f) of the Fast Track Settlement Proposal, Warwick Smith would not have endorsed our arbitration process had he been alerted to this removal?

In Graham Schorer’s case, Dr Hughes continued to arbitrate on his matters after 12th May, 1995, after he wrote to Warwick Smith and declared the Arbitration Agreement not credible.

Please note Robert McGregor of Freehills signed off these Minutes, on behalf of Telstra.

Telstra’s Steve Black writes to Dr Hughes, stating:-

“Telecom agrees with the general spirit of our proposal procedure, but disagrees with the specific clauses set out below.” (GS-CAV 166)

Dr Hughes and Warwick Smith seemed to forget this wasn’t Telstra’s proposal.  It was not Telstra’s kindness that brought COT claimants to the negotiation table: it was an unwritten agreement that the COT claimants would not push for a Senate inquiry into their allegations of Telstra’s misleading, unconscionable conduct, and the reasons why COT claimants were still experiencing phone problems after previous settlements and court actions.

During 1993, Telstra was forced to admit to the Senate that they had lost more than 1.2 billion dollars’ worth of cabling and conduit infrastructure that was supposedly somewhere ‘in the ground’ but which was suspected to have never been installed.  This was touted as part of the reason the COT claimants and others were still experiencing phone problems.  Even today, this missing 1.2 billion dollars’ worth of infrastructure is still unaccounted for, an expense that, in the 1980s, came out of the purses of Australian taxpayers.

Over the years, a number of sources have suggested the spiralling costs in the late-1990s occurred because the copper wire was simply not in the ground.  Even if the original copper wire was obsolete, the conduit could have been used to thread optic fibre cable through this already installed infrastructure, instead of Telstra having to dig new trenches.  All the additional costs came as a direct result of the ‘missing’ cabling/infrastructure not being put in place in the late-1980s.  Furthermore, Telstra admitted (see 17th December, 1993 above), that four per cent of all their customers complained of COT-like problems.  Perhaps all those problems were caused by ‘missing’ conduit infrastructure.

During late 1993 and early 1994, the COTs had the momentum to have many different issues investigated by the Senate.  If the claimants had continued down this road, instead of accepting the FTSP, the missing infrastructure would have been addressed in the public domain, along with solving the continuing phone problems experienced by the COT cases, instead of being addressed in camera.  All these issues would have created serious embarrassment for Telstra.

By 17th February, 1994 with the momentum for a Senate enquiry lost, and with the TIO, Warwick Smith, feeding secret, in-confidence coalition party-room information to Telstra (see 10th November, 1993 above), including advice that the proposed Senate investigation into COT matters appears unlikely, Telstra was enabled to manipulate the Australian justice system for their own benefit and to the detriment of the COT claimants.

FOI document folio D01248 confirms Telstra’s Ted Benjamin, also a TIO Council member, supplied Telstra’s hierarchy with in-confidence, TIO-COT-related information he acquired during a TIO council meeting.  Mr Benjamin was Telstra’s Arbitration Liaison Officer for most of the COT arbitration process.  It is now obvious the only chance the COT claimants ever had of getting a fair assessment of their losses or getting their phone problems fixed would have been via a Senate enquiry. (AS-CAV 48-C)

The COT claimants were only looking for a fair chance at an independent review of their past problems and an end to the continuing phone and fax problems they battled with every day, but since they took the wrong road – the FTSP and not a Senate enquiry – this did not occur.

At point 1.6 on page 2 in the AUSTEL COT Cases Report, AUSTEL states:-

“Until recently, Telecom’s approach to the COT Cases might reasonably have been perceived by the COT Cases as one of indifference. But, more recently, the COT’s persistence, AUSTEL intervention, Ministerial involvement, the threat of a Senate inquiry and adverse publicity has resulted in Telecom adopting a more positive, conciliatory approach.”

At point 1.18 on page 6 in the AUSTEL COT Cases Report, AUSTEL states:-

“When the initial settlements were reached with the original COT Cases, the standard of service then applicable was not objectively established and there is a reason to believe that difficult network faults may have continued to affect their services.”

Telstra FOI document folio 902905, thought to be dated around this period, states:-

“Experience with Crossbar common control equipment has shown that the operational life, before major upgrades are required, is closer to 20 years that 40 years due to :-

  • Increasing and higher traffic rates than expected.
  • Low maintenance effort.
  • Under dimensioning of some ranks of equipment. …”

“Also a number of relays have been found to have a short operational life due to factors such as:

  • Number of Operations per year.
  • Sequence of springsets and contacts.
  • Design problems causing contact erosion. …”

“The following conditions have been observed when an exchange reaches a relay wear crisis point:

  • Service to customer is degraded.
  • Current indicators do not highlight the problem area.
  • Existing resources, using normal maintenance practices cannot rectify all
    faults and problems.”
    (GS-CAV 167)

21st February, 1994:  Dr Hughes writes to Graham Schorer, attaching the agreed changes to the Arbitration Agreement.  This letter documents changes to the FTAP but makes no comment on the removal of the words of “each of the Claimant’s claims” from clause 10.2.2. (GS-CAV 168)

Please note Dr Hughes states on page 4, Clause 24, of this letter:-

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

23rd February, 1994:  This letter from Mr Black to Dr Hughes refers to Dr Hughes’ recommended amendments on 21st February 1994.  The letter also documents changes to the FTAP but also makes no comment on the removal of the words “each of the Claimant’s claims” from clause 10.2.2.  Graham and Alan were not advised that clause 10.2. 2 was altered.

Please note, Steve Black states, in this letter:-

“Telecom is of the view that Special Counsel and the Resource Unit should be accountable for any negligence on their part in relation to the arbitration process, given that these parties are acting in their capacity as experts. Therefore, this clause should not be amended so as to include an exclusion from liability for Special Counsel and the Resource Unit.” (GS-CAV 169)

Graham and Alan believed the Special Counsel, Ferrier Hodgson Corporate Advisory, and DMR Group Australia would be held accountable for any negligence on their part in relation to the arbitration process.

It is also confirmed, for the dates of 19th April, 1994 (see below), Dr Hughes’ office was still of the opinion that the Special Counsel, and the Resource Unit would not be excluded from liability.

24th February, 1994:  In this Telstra internal email, FOI folio A13980, Kevin Dwyer responds to Peter Gamble’s statement of:-

“Ericssons are said to have suggested that call loss could be up to 15%.”

Mr Dwyer states:-

“You are quite correct in your thought that the anecdotal reference applies more to AXE than ARE-11. ‘Lockup’s are generally well-known as a problem in AXE exchanges, not only in Australia but in overseas countries as well.
(GS-CAV 170)

The reference, in this document, regarding the known lock-up problems with the AXE exchange is most important, as both Graham and Alan’s businesses were routed through an Ericsson AXE.  As shown below, during the COT arbitrations, Ericsson (Australia) purchased Lane Telecommunications, the TIO-appointed Technical Arbitration Resource Unit.

25th February, 1994:  Frank Shelton, Minter Ellison Morris Fletcher, writes to Dr Hughes, enclosing two separate variations to the proposed Fast Track Arbitration Procedure.  The two individual versions of the FTAP referred to in Mr Shelton’s letter (171) is attached to the Graham Schorer (CAV Relevant Information File).

The Communications Minister’s Office writes to Telstra’s Jim Holmes:-

“Attached are copies of correspondence received by the Hon Michael Lee MP from Mr Alan Smith of Cape Bridgewater Holiday Camp, Victoria, outlining further difficulties he is having with his telephone and facsimile service.”

“I ask that you investigate Mr Smith’s allegations and take all appropriate steps to resolve his problems.” (AS-CAV 54-A)

Why didn’t Telstra’s Corporate Secretary, Jim Holmes, (who was also a TIO Board member), alert Minister Lee that Telstra had advised AUSTEL, on 26th August, 1993 of the existence of unidentified faults affecting Mr Smith’s service? (AS-CAV 48-G)

This Government internal minute to the Communications Minister, regarding complaints by Alan Smith, says:-

“The Australian Federal Police has been asked to investigate possible breaches of the Telecommunications (Interception) Act 1979 and it would be inappropriate for you to make any further comments of details of the allegations while the matter is before the Federal Police.”

“A draft letter to Mr Smith has been cleared by Legal and General Branch of the Department. …”

“We have provided both Telecom and AUSTEL with copies of Mr Smith’s letters requesting that they investigate his allegations…” (AS-CAV 54-B)

In March 1994, during this negotiation period, a number of documents faxed from Peter Bartlett at Minter Ellison (the TIO’s legal counsel) did not arrive at Alan’s office.  Page 33 of Alan’s claim document, CBHC (Cape Bridgewater Holiday Camp) Part 1, shows he advised the arbitrator of at least three businesses who complained of not receiving faxes from Alan during the FTSP negotiation period. CBHC Part 1 was an 80-page, bound document Alan submitted to the FTSP, but Ferrier Hodgson Corporate Advisory (FHCA) did not pass it on to DMR and Lanes for their assessment. (AS-CAV 66)

3rd March, 1994:  Steve Black emails David Krasnostein, and copies to Telstra’s CEO Frank Blount, stating:-

“As discussed it appears that Gordon Hughes and Peter Bartlett are ignoring out joint and consistent message to them to rule that our preferred rules of arbitration are fair and stop trying to devise a set of rules which meet all the COTs requirements. …”

“My course therefore is to force Gordon Hughes to rule on our preferred rules of arbitration.” (GS-CAV 172)

Comment:

Clearly, at this stage, Dr Hughes and Peter Bartlett were not happy with the FTAP rules: so, what made them later change their minds and agree that the Telstra-designed FTAP was a fair process?  What pressure was applied to Dr Hughes to force him to rule on Telstra’s preferred Rules of Arbitration?  What made Dr Hughes agree to Frank Shelton’s revised FTAP?

3rd March, 1994:  Confirmation from AUSTEL to Steve Black, that the Regulator was adamant that:-

“if the Fast Track Settlement Proposal is to be effective then the COT members must be given access to the documentation in Telecom’s possession necessary for them to prepare their cases”. (GS-CAV 173)

AUSTEL’s COT INVESTIGATION

On 21st November 2007, Alan Smith received from the ACMA, under FOI, a copy of AUSTEL’s original draft findings regarding the telephone problems experienced by the Cape Bridgewater Holiday Camp during 1988 to 1994.  Copied below are some of the page numbers and points in the report.  If AUSTEL (the Government Regulator) could not gain access to documents from a fully owned Government Corporation, such as Telstra was during this official, Government-funded investigation, then what hope did the COT claimants ever have?  Did AUSTEL have a regulatory obligation, as the facilitators of the FTAP, to abandon the signing of the agreement until Graham and Alan received the documentation they were promised they would receive if they signed the FTAP?  The following list identifies some areas where AUSTEL had problems accessing Telstra records on Alan’s service:

  • Point 43 on page 20 notes:-

“As no fault report records remain in existence from Cape Bridgewater residents prior to this period, or these records have not been provided to AUSTEL, it is difficult to gauge the level of problems in the area which should have been to [sic] known to Telecom based on their own routing reporting data.”

  • Point 48 on page 22 notes:-

“AUSTEL has been hampered in assessing Telecom’s dealings with Mr Smith by Telecom’s failure to provide files relating to Mr Smith’s complaints.”

  • Point 71 on pages 28 and 29 notes:-

“AUSTEL has not been provided with the documents on which the conclusions in this briefing summary were reached, such as fault reports from other Cape Bridgewater subscribers over this period or the details of the final selector fault. It would have been expected that these documents would have been retained on file as background to the summary. It can only be assumed that they are contained within the documentation not provided to AUSTEL.”

  • Point 140 on page 49 notes:-

“It should be noted that AUSTEL’s investigation of matters relating to the RCM problem has been hampered by Telecom’s failure to make available to AUSTEL a file specifically relating to the Pairs Gains Support investigation of the RCM. The file was requested by AUSTEL on 9 February 1994.”

  • Point 160 on page 55 notes:-

“It should be noted that it is hoped that a number of issues in regard to the Cape Bridgewater RCM will be clarified when Telecom provides the documentation requested by AUSTEL.”

  • Point 5.46 on page 95 in the final AUSTEL COT Cases Report notes:-

“Where, as part of its direction, AUSTEL sought to obtain detailed information on each of the exchanges involved in terms of performance standards, actual performance, maintenance requirements and achievements, Telecom initially responded with advice in terms of a few generalisations. Very specific requests were necessary to obtain data which a co-operative approach may well have been expected to deliver. Indeed, throughout this inquiry it has been apparent that Telecom has chosen to interpret AUSTEL’s request for information in the narrowest possible terms. The net effect of this was to minimise the amount of relevant data it put before AUSTEL and lengthen the process necessary to extract it.”

3rd March 1994:  Telstra was now ignoring the signed FTSP.

This Telstra internal email FOI D01166, states:-

“As discussed it appears that Gordon Hughes and Peter Bartlett are ignoring our joint and consistent message to them to rule that our preferred rules of arbitration are fair.…”

“My course therefore is to force Gordon Hughes torule our preferred rules of arbitration.” (AS-CAV 55)

BCI tests

Prior to the COT four signing the FTSP, Telstra called in Bell Canada International Inc. (BCI) to study a number of the service lines and exchanges that were allegedly causing the problems the COT’s businesses experienced.  After the completion of the BCI tests, AUSTEL and the COT cases argued the actual faults and problems they complained of were not highlighted correctly in the testing process.  The problem was that, if BCI found a fault while they were testing they halted the test at once and fixed the problem before they re-tested.  Therefore, even though they found faults along the way, their final report specified that the Telstra network had a clean bill of health and there was NO RECORD OF THE FAULTS THEY FIXED DURING THE TESTING PROCESS.

The COT members asked how, in the name of justice, could they use this report in support of their claims, when it showed the Telstra network operating up to network standard when, for up to eight years BEFORE the BCI tests, they had been forced to operate their businesses with phone systems suffering from major faults?  Even though Telstra knew of the COT protests in relation to the BCI report, it was still used to support Telstra’s defence of a number of the COT cases.

10th March, 1994:  A Federal Government handwritten memo by Julie Martinsen, titled Commercial-in-Confidence and Size of the complaints problems, states:-

“I raised the telephone business survey with Rob Davey referred to in Hansard (Senate Estimates Committee 25/3/94) with John MacMahon (AUSTEL)

  • it was apparently run by (T) at AUSTEL’s request in an attempt to see how widespread the problems are
  • (T) provided the results to AUSTEL as ‘Commercial-in Confidence’
  • They will be covered in AUSTEL’s report.
  • 10% of those surveyed said they had experienced the same sorts of problems (as the Cot people)
  • 4% (I’m not sure if this is the total or of the 10% said they had been affected seriously or very seriously.”

“This is the basis for AUSTEL’s view that the size of the problem is significantly greater that (T)’s claim of 50.” (GS-CAV 174)

23rd March, 1994:  The Hon Minister Lee MP writes to Alan:-

“Thank you for your letters of 3 February 1994, concerning problems with your telephone and facsimile service. …”

“I have also arranged for your letters to be sent to senior management in Telecom with a request that they fully investigate your allegations. …”

“It would be inappropriate for me to comment on any allegations of improper monitoring while the matter is under investigation by the Federal Police.”
(AS-CAV 63-A)

25th March, 1994:  The Commonwealth Ombudsman, Ms Philippa Smith writes to Telstra’s CEO Frank Blount, concerning the complaints raised by Graham Schorer and Alan Smith. Ms Smith advises Mr Blount of her concerns that Telstra had stated to John Wynack, Director of Investigations:-

“that they were concerned at the publicity and significant diversion of Telecom resources caused by the recent release of certain information by Mr Smith and that the delay in release of documents was due to the need for Telecom to check all documents prior to release so that Telecom is alert to the possible use/misuse of sensitive information.”

Ms Smith later says:-

“It is unreasonable for Telecom to require the participants to make further assurances while Telecom was considering the Agreement and thereby denying the participants the opportunity to consider the rules that Telecom wished to have included in the Agreement.” (AS-CAV 64)  

The Commonwealth Ombudsman’s Office can confirm the first (limited) bundle of FOI documents Alan received, in February 1994, were heavily censored, many with large sections blacked out and others supplied without a covering schedule, making it incredibly difficult for lay people to understand the significance of the information. Again, it appears this information was censored in agreement between AUSTEL, the TIO and Telstra in an attempt to minimise Telstra’s liability.

On 5th January, 1995 Ms Philippa Smith, conducted an official investigation into Mr Schorer’s complaint that Telstra acted unreasonably regarding his November 1993 FOI applications (see below).

January/March 1994 – still no relevant FOI documents to support Cot claims

According to Graham and Alan’s memory of the FOI situation between January and March 1994, the TIO advised them the only way for them to proceed was to sign for arbitration.  Why didn’t the TIO show the same concerns as Ms Philippa Smith (AS-CAV 64) and condemn Telstra for threatening four small businesses that if they didn’t sign the new preferred Rules of Arbitration, then Telstra would not supply the documents they needed to support their claims?

Was the TIO siding with Telstra from the outset?  Was the TIO mischievously involved in allowing Telstra to withhold COT-requested FOI documents until the COT cases signed for the FTAP?  How many documents were destroyed (or simply not provided to the COTs) under this clandestine operation?  Of all the breaches of law, so far uncovered during the COT arbitrations, this is probably the worst one, alongside the altering of the clause in the agreement.  It is alarming that the defendants, the administrator, the administrator’s Resource Unit and the Telecommunications Regulator all appear to be party to this secret agreement of vetting what documents the claimants receive and what should be withheld from them AND the arbitrator!

No one was prepared to listen to Graham and Alan’s argument that they had already signed a Commercial Assessment Agreement on 22nd November, 1993 (AS-CAV 51).  At first Graham and Alan flatly refused to be a party to Telstra’s preferred Rules of Arbitration, as it was evident Telstra was attempting to force the COT four down the legal track so that their cases would not be commercially assessed.

Other details of these meeting minutes show Dr Hughes

“stated that he was aware of a dispute between the parties but did not have any idea as to the nature, and indicated that, from this point in time, there were two ways to proceed in relation to the problem of outstanding documents.

  1. the procedure is put on hold until all the documents are exchanged in accordance with the FOI procedure; or
  2. the arbitration procedure commences and then the arbitrator gives appropriate productions of documents.”

Point 2 was Alan’s main reason for finally agreeing to sign for arbitration, because Telstra had only provided him with a very limited quantity of documents.  But, as can be seen from the arbitration process itself, Dr Hughes went back on his commitment to access documents from Telstra.

7th April, 1994:  This Telstra Internal FOI Schedule Review Decision: Schorer confirm Telstra withheld two technical documents both dated 7.4.94 under Legal Professional Privilege, i.e:-

  1. Internal Fax to St Albans Exchange Management Group from Telecom Australia Solicitor.
  2. Fax Transmission duplicating test of Internal Fax of 7.4.94 to St Albans Exchange Management Group from Telecom Australia Solicitor records substance of D03767. (GS-CAV 177)

Telstra’s Steve Black writes to David Krasnostein, saying:-

“I have told Mr Bartlett that the only basis on which Telecom would attend a meeting is to formally sign the rules – no further discussion or negotiation to be entered into.”

This suggests Bartlett expressed a view that the FTAP rules were not fair. (GS-CAV 178)

Did both Peter Bartlett and Dr Hughes know that clause 10.2.2 was altered to favour Telstra’s defence?

In an internal memo R11908 Steve Black states:-

“Peter Bartlett tells me that Graham Schorer is putting pressure on Gordon Hughes to read the AUSTEL Report and see if it contains anything which would necessitate a change in the Arbitration Rules. I told Mr Bartlett to tell Dr Hughes that Telecom would seriously object to such a course of action.” (AS-CAV 68)

It appears Mr Black was concerned at Graham pushing Dr Hughes to read the AUSTEL Report, because the report states the first four COTs’ matters were to be heard under a review/settlement process and only the remaining COT claimants were to have their matters heard in a yet to be devised special TIO Arbitration Agreement. . If Dr Hughes had read the AUSTEL Report, he would have known the four COT’s were never intended to go into arbitration.

8th April, 1994:  The fax header accompanying the following letter was from Simon Chalmers, seconded from Freehill Hollingdale & Page by Telstra, on 12th November, 1993.  This fax header sheet confirms he faxed the two following letters to both Russell Berry and Denise McBurnie of Freehills.  This and the letter following, dated 9th April, 1994 suggest AUSTEL, the Australian Communications Regulator, was far from truly independent but rather could be convinced to alter their official findings, as Steve Black has requested in many of the points in this first letter. For example, at point 4 (on page 3), Mr Black writes:-

“The Report, when commenting on the number of customers with Cot-type problems, refers to a research study undertaken by Telecom at Austel’s request. The Report extrapolates from those results and infers that the number of customers so affected could be as high as 120,000.”

At point 2.68 in the AUSTEL Cot report, the 120 thousand COT-type complaints was changed to read 50 or more, therefore the official AUSTEL COT report, provided to the minister, says 50 or more. (GS-CAV 179)

9th April, 1994:  In this letter Mr Black states:-

“In relation to point 4, you have agreed to withdraw the reference in the Report to the potential existence of 120,000 COT-type customers and replace it with a reference to the potential existence of ‘some hundreds’ of COT-type customers.”

As noted immediately above, the official report refers to 50 or more COT-type faults, confirming that Mr Davey was further pressured to change his real findings. (GS-CAV 180-A)

Telstra FOI folio 101115 to 101117 states:-

“A total of 8% of all businesses stated they had experienced problems themselves; 5% had, by inference from comments made by callers assumed they had problems; and 8% claimed they had both experienced problems themselves and also received comments from callers regarding difficulties in getting through to the business.

73% of customers who felt the problems associated with incoming calls has seriously affected their business had reported the problems to Telecom with varying degrees of success regarding resolution.(GS-CAV 180-C )

On 6th December, 1993 (see above), Telstra’s Ted Benjamin warned Telstra’s Group Managing Director, Harvey Parker, that 4 per cent of the 2,644 commercial business customers surveyed by TELCATS (on behalf of Telstra) reported experiencing significant phone problems that affected their businesses.

Four per cent of 2,644 means 106 businesses experienced COT-type problems – a significant number.  Four per cent of all Telstra’s commercial business customers, nationwide, would be well over 120,000 – the number that AUSTEL’s chair, Robin Davey, wanted to include in the AUSTEL COT report, rather than the 50 or more customers Telstra insisted on.  Robin Davey’s original calculations were correct.

IMPORTANT

Graham and Alan’s Technical Advisor, Mr George Close, was forced to use the AUSTEL COT report findings during Graham and Alan’s arbitrations because Telstra was not supplying the documents they had requested under FOI.  Therefore, Mr Close’s technical findings were based on flawed information and were therefore incorrect.  Letters dated 16th and 25th August, 1994 (see below) confirm that, on behalf of Alan and Graham, Mr Close asked the arbitrator, under the Arbitration Agreement discovery process, to seek from Telstra all the relevant BCI information Telstra used to arrive at their findings.  Even though Dr Hughes accepted the BCI report into evidence (see 2nd May, 1994 below), he did not ask Telstra for any BCI discovery documents on behalf of Alan or Graham.

13th April, 1994:  AUSTEL Chair Robin Davey advises the Hon Michael Lee, Minister for Communications:-

“AUSTEL had agreed to the study being so limited on the basis that other monitoring it had requested Telecom to undertake on AUSTEL’s behalf should provide AUSTEL with the data on the efficacy of the customer access network.” (AS-CAV 57)

Please note:  prior to Graham Schorer and Alan signing the FTSP, they alerted AUSTEL that they were still experiencing phone and fax problems.  Alan was adamant the RVA message faults, which wrongly advised customers calling his 008/1800 number that the line was disconnected, was crippling the singles club side of his business.  Alan’s arbitration reply to Telstra’s interrogatories see (CAV Relevant Information File P-4, Exhibit 10) confirms he received 80-plus letters, from clients and tradespersons, all documenting their experiences when trying to contact him.  The RVA billing problem was threefold: First Alan lost the incoming call.  Second, he was charged for the non-connected call.  Third, Telstra allowed Alan to continue to promote his business using the 008/1800 service (wasted advertisement costs) while aware the RVA post-dialling problems would not bring Mr Smith any business.

14th April, 1994:  Ann Garms writes two letters to Warwick Smith, one handwritten, the other typed.  It is clear from both letters that Ms Garms, Alan Smith and Mr Schorer, did not want to abandon the FTSP and enter into an arbitration process. (GS-CAV 181 and 182).

AUSTEL’s General Manager for Consumer Affairs, John MacMahon writes to Ann Garms stating:-

“This letter is to confirm that the Fast Track Settlement Proposal drafted by AUSTEL and signed by Telecom on 18 November 1993 and by you 23 March 1993, refers to an assessment” process and an “assessor” and makes no reference to “arbitration” or to an “arbitrator”. (GS-CAV 183)

Ann Garms also writes to Warwick Smith, with the three signatures of Graham Schorer, Alan Smith and herself. She states:-

“We are all in agreement that we wish to be assessed by Dr Gordon Hughes under the Fast Track Settlement Proposal authorised by AUSTEL and signed by Mr Jim Holmes, Corporate Secretary of Telecom on 18 November 1993, and by COT members on 23 November 1993.”

“We acknowledge the confirmation by AUSTEL on 14 April 1994, that the Fast Track Settlement Proposal confirms the assessment process for COT members. (Copy enclosed.) (GS-CAV 184)

Warwick Smith responds to Ann Garms:-

“I am not sure where Alan Smith or Graham Schorer are with regard to proceeding. They have been in regular contact with Peter Bartlett, but I still hope the matter can proceed and am of the view the Procedure endorses the ‘Fast Track’ Agreement and is important for the arbitrator in his role.”
(GS 184)

It is quite clear from Warwick Smith’s comments in this letter that he dismissed Mr Schorer and Alan Smith’s signatures in the letter he is now responding to.

15th April, 1994:  Warwick Smith writes to Mr Schorer, stating:-

“I met with Mr Bartlett last evening. He will arrange a meeting with Dr Hughes on his return to seek his position on what I understand to be the desire of ‘COTS’ on the Procedure and ‘Fast Track Settlement’.” (GS-CAV 185)

19th April 1994:  This is a three-page brief to Mr A H Goldberg, Q.C., from William Hunt, on behalf of Graham Schorer. According to a hand-written note in the top right-hand corner, Mr Goldberg’s office was contacted by Hunt Solicitors at 2.43 pm.
Open letter File No 54-C page 12, file 186-A and 186-B in exhibit GS-CAV 155 to 215

It is clear from the fax imprint on these two documents from Dr Hughes’ secretary, Caroline Friend, to Mr Goldberg and William Hunt, that they were faxed between 1:20 and 2:00 pm on 19th April, 1994.  Each fax included an unsigned copy of the Arbitration Agreement, (see exhibit GS-CAV 514 file GS-CAV 490 to 521GS-CAV 186-A and GS-CAV 186-B).  Ms Friend sent the faxes from her office after Graham Schorer asked his solicitor, William Hunt, for advice in relation to signing the Arbitration Agreement that was drawn up by Frank Shelton of Minter Ellison.  Mr Hunt contacted Dr Hughes’ office and asked Ms Friend to send one copy to Mr Goldberg and one to Mr Hunt, for assessment.  On 21st April, however, before Graham received any information from Mr Goldberg or Mr Hunt, Graham and Alan met Peter Bartlett (the TIO’s Legal Counsel) in the Minter Ellison offices.  Mr Bartlett informed them the TIO would withdraw from administering the already-signed Fast Track Settlement Proposal if Graham and Alan did not sign the Arbitration Agreement by close of business that day.  Had Peter Bartlett provided Graham and Alan with a copy of the altered agreement earlier in the day, and allowed them to take it away for discussion, a comparison between the altered version and the version faxed to Mr Goldberg and Mr Hunt would have uncovered the secret alterations to the agreement Graham and Alan were being pressured to sign.  This was not the agreement that Caroline Friend faxed to Mr Goldberg and Mr Hunt 36 hours earlier see exhibit GS-CAV 514 file GS-CAV 490 to 521

Continued on: Consumer Affairs Victoria Part-2

Please note: the following exhibits (which we might have missed into the text of the chronology of events above) can be accessed by placing the cursor over the relevant number range in order to access that exhibit.

For the purpose of this report, I shall refer to myself as either Alan Smith or Alan. – PART 2

CHAPTER FOUR

Fast Track Arbitration Procedure

21st April 1994:  Mr Schorer, Ms Garms and Alan Smith all sign the arbitration agreement under duress.  Under instruction from Warwick Smith, Peter Bartlett threatens all three that if they did not sign the FTAP that day, the TIO would refuse to continue in his role as administrator.  The signing of the agreement and the pressure applied by Mr Bartlett and the TIO is addressed throughout Alan’s absentjustice.com webpage.

The phone and fax problems continue

22nd April 1994:  Alan returns to Cape Bridgewater to find two notes on his desk, reporting staff registering two more phone faults.  Alan faxes three 008/1800 incorrectly charged billing accounts to AUSTEL.  AUSTEL’s fax journal registers three faxes from Alan, lasting from 01.40 to 02.22 seconds, but only blank paper appears (AS-CAV 70).  Where did the information on these faxes end up?  How can fax transmit through to the receiving end, without the sender’s identification, date and time on the facsimile sent displayed on the document received?

From late in October 1993 until 26th April 1994 numerous people reported that, after Alan hung up his end of the phone line, they could still hear him talking in his office. These people included Graham Schorer, clients and friends, including Cliff Mathieson (AUSTEL) and Peter Gamble (Telstra).  It was bad enough that they could hear what Alan was saying, but it is worse to realise that Alan was being charged at STD rates, as though the call was still connected.  This TF200 phone shared a line with his fax machine.

Cliff Mathieson and John MacMahon, General Manager – AUSTEL’s Consumer Affairs Department, were both part of the AUSTEL Management team involved in the preparation of the AUSTEL COT Report.  During Alan’s assessment/arbitration processes, they asked Alan to pass on to them anything he uncovered that would support the evidence he had already provided regarding the lock-up and short duration problems on his 800/1800 line.

26th April 1994:  Alan telephones Mr Mathieson using the EXICOM TF200 which was connected to his 055 267 230 service.  During their conversation, Alan mentions the lock-up problems he was experiencing and describes how numerous people commented on this strange phenomenon.  Mr Mathieson suggests Alan put the receiver back in the cradle and count aloud to 10 before picking it up again to see if it was still connected (and it is). They then try counting to 15 seconds: the line remains open.  Mr Mathieson suggests Alan take the phone off the 055 267 230 line and switch it with the phone that was connected to his 055 267 267 line.  More tests confirm that the lock-up fault still occurs on this different TF200 ALCATEL phone.  Mr Mathieson agrees that the fault must be originating in the exchange and suggests that, since Alan is in arbitration, Alan should bring this fault to the attention of Peter Gamble, Telstra’s Chief Engineer.

Alan switches the phones back to their original lines and phones Mr Gamble but does not tell him Mr Mathieson and Alan have already tested both phones on the 055 267 230 line.  Mr Gamble and Alan then carry out similar tests on the 055 267 230 line. Mr Gamble says he will arrange for someone to collect the phone, for testing purposes, the following day.  Telstra emails, see FOI K00940 dated 26th April 1994 show they believe this lock-up fault was being caused by a heat overload problem in the RCM exchange at Cape Bridgewater (AS-CAV 72).  This document also suggests Mr Gamble believed the problems were caused by heat in the exchange.

This is the same Peter Gamble whose SVT equipment couldn’t perform the AUSTEL required Service Verification Tests correctly (at Alan’s business during his arbitration) and who later swore under oath in Telstra’s arbitration defence that the tests were ALL successful.

27th April 1994:  Telstra collects Alan’s faulty TF200 EXICOM telephone.  During the FTAP, Alan received Telstra document R37911 under FOI.  This document shows Ross Anderson, a Telstra technician from Portland, tested the TF200 EXICOM fax phone at least 18 times without it once displaying this lock-up fault.  Had he first visited the RCM at Cape Bridgewater (10 minutes away) to release hot air from the RCM un-manned exchange?  In his Witness Statement to the FTAP, he acknowledges connecting a fan to the RCM to alleviate the heat problem.  Further documents in the CAV Target Files suggest the problem may have been related to moisture or a combination of both moisture and heat. (AS-CAV 73)

The Call Charge Analysis (CCAS) data for the 27th April 1994 shows that after Alan’s faulty EXICOM is collected and a new EXICOM installed in his office, there is still a lock-up problem affecting his service.  The CCAS data shows that, at 22:23 hours, an incoming caller waited for 3,599 seconds (59min:59sec) before the call was answered.  This CCAS data also suggests that, after Alan answered this phantom caller, he talked for a further 14,718 seconds (4hr:5min:18 sec). (AS-CAV 74).

In his official report, George Close, Alan’s technical advisor, uses the limited amount of Telstra’s own data, received under FOI during the FTAP, to show the lock-up fault was apparent from at least December 1993 through to February 1994.  He calculates that 863 hours were unavailable over 77 days, due to this one fault (AS-CAV 75).  Mr Close also found a similar pattern of faults in other FOI documents relating to Alan’s Gold phone coin-operated service, which recorded a fault rate of 59 per cent over the same period.

During the FTAP, Alan also received Telstra FOI documents K01031, 32, 33, K00957 and K01398, which further substantiate the relationship between the fault and the exchange.  First, in document K01398, Tony Watson of Telstra states:-

“Probably caused by RCM, no need to investigate. Spoke to Bruce, who said not to investigate also.”

Then, in document K01032, Bruce Pendlebury, Telstra’s Fault Manager tells Jim Holmes, Telstra’s Corporate Secretary, three test calls to Cape Bridgewater appeared to be answered, but no conversation took place.  Did Telstra even care about Alan’s problems?  How could three test calls be designated successful if they were not answered at the receiving end?  How did the technician know what the receiving person was (or was not) hearing?

According to Telstra archival documents, this lock-up fault was apparent on Alan’s phone/fax line as early as August 1993.  The new owner of Alan’s business, Darren Lewis, provided a Statutory Declaration and other testaments to the Hon. David Hawker MP, stating that the lock-up problems on the fax line were severe at least up until November 2002.

It is interesting to note at this same point of time, I was a volunteer for the Cape Bridgewater Country Fire Authority CFA. (see Tampering With Evidence page) shows that during my arbitration Telstra twisted the reason I could not be present for the testing of my TF200 telephone at my premises on a scheduled meeting on the morning of 27 April 1994. Telstra only reported in their file notes (later submitted to the arbitrator) that I refused to allow Telstra to test the phones because I was tired. There was no mention in these file notes that I advised the fault response unit that I had been fighting an out-of-control fire for 14 hours or that my sore eyes made it impossible to observe such testing by Telstra. I fought the fire from 6 pm to 9 am.

Also on Tampering With Evidence page, it shows that not only did Telstra set out to discredit me by implying I was just too tired to have my TF200 phone tested, but after Telstra removed the phone, it was tampered with before it arrived at Telstra’s Melbourne laboratories: someone from Telstra poured beer into the phone. Telstra then alleged, in its arbitration defence report, that sticky beer was the cause of the phone’s ongoing lock-up problems, not the Cape Bridgewater network. This one wicked deed, along with the threats I received from Telstra during my arbitration, is a testament that my claims should have been investigated years ago.

So, even though I carried out my civic duties as an Australian citizen, over and beyond by supplying vital evidence to the AFP, as well as fighting out-of-control fires, I was still penalised on both those occasions during my arbitration.

And then, as if all this un-addressed skulduggery and secret plotting have not been difficult enough to live with for these past twenty-four years, let us take a look at the senior Telstra engineer who organised the removal of my tampered-with TF200 phone and then arranged things so that it would be held in his office from that day, 27 April 1994, until 6 May 1994 when, finally, it actually reached Telstra’s laboratories. It is important to look at this engineer because it turns out, this was the same Telstra Chief Arbitration Engineer who swore under oath, in his Witness Statement of 12 December 1994, that the Service Verification Testing process that he conducted during my arbitration had met all of the mandatory Government requirements but, somehow, the CCAS data for the day in question does not show that any SVT processes as being conducted at all, neither in connection to my phone lines nor according to Government specifications nor, for that matter, according to ANY specifications at all. Then the plot thickens, because it turns out that this is also the same Telstra engineer who, during a Senate Committee hearing on 24 June 1997, (see Absentjustice chronology of events part two was named by an ex-Telstra employee (Lindsey White) as the person who told Mr White that I was one of the Five COT Cases, who had to be stopped at all cost from proving our arbitration claims and, astonishingly, this is, again, the same Telstra engineer who visited my business on 6 April 1995 with the TIO-appointed arbitration resource unit, but then refused to conduct any of the suggested tests on the service line, at my business, that this tampered-with TF200 had been connected to.

2nd May 1994:  Dr Hughes writes to John Rundell (Arbitration Project Manager) of Ferrier Hodgson Corporate Advisory (FHCA) stating:-

“I am anxious for these matters to proceed as expeditiously as possible. In the circumstances I believe it would be appropriate for the Resource Unit to familiarise itself with documentation which will unquestionably be placed in evidence, namely:

  1. Bell Canada International Inc, ‘Report to Telecom Australia’, 1 November 1993;
  2. Coopers & Lybrand ‘Review of Telecom Australia’s Difficult Fault Policies and Procedures’, November 1993;3Telecom Australia
  3. ‘Response to Coopers & Lybrand Report and Bell Canada International Report’, December 1993
  4. AUSTEL, ‘The COT Cases: AUSTEL’s Findings and Recommendations’, April 1994.” (GS-CAV 187)

6th May 1994:  While the Commonwealth Ombudsman Ms Philippa Smith’s letter of 20th January 1994 (GS-CAV 148) is addressed in Chapter 2, it is important to remember Ms Smith’s statement that, if the FTSP was to be effective, Telstra had to supply FOI documents to the COT claimants in a timely manner.  Ms Smith also raised these issues again with Telstra’s Frank Blount, on 6th May, 1994 stating:-

“I should be grateful if you would now respond to the outstanding matters raised in my letter of 25 March 1994 ie

  1. Comment on my views that:
  • it was unreasonable for Telecom to impose a condition for release of certain documents that the participants make further assurances that they will participate in the FTSP; and
  • it was unreasonable for Telecom to require the participants to make the assurances while Telecom was considering the agreement related to the FTSP (the Agreement) and thereby denying the participants the opportunity to consider the rules that Telecom wished to have included in the Agreement.”

“Please inform me whether Telecom intends releasing information to Mr Smith, Mrs Garms, Mr Schorer and Ms Gillan in accordance with the undertaking in Mr Black’s letter to Mr Schorer dated 27 January, 1994(copy attached) and subsequently confirmed in communications to my officers by Mr Black and Mr Rumble.” (GS-CAV 188)

Telstra had still not complied with the agreed release of the COT FTSP documents under the agreed FOI Act.

The arbitrations FTSP rules (agreement) Ms Philippa Smith refers to are Telstra’s preferred Rules of Arbitration, which Telstra agreed to release to Graham (through FOI), once the COTs signed the Arbitration Agreement.  It is interesting to note Mr Pinnock would only supply Ms Moore, Secretary Environment, Recreation, Communications and the Arts legislation committee a copy of Telstra’s preferred Rules of Arbitration under confidentiality. (GS-CAV 321)

Believe it or not!

Before Alan and Graham signed for arbitration, Warwick Smith, Peter Bartlett and Dr Hughes all assured them the documents they required from Telstra would begin to flow through to them once their signatures were on the agreement.  The Arbitration Agreement was secretly altered just 36 hours before it was signed.

By May 1994, one month before Alan had to submit his claim, the flow of documents had all but dried up and so he arranges to go to Melbourne on 14th May 1994 to look at some FOI documents that Telstra stated they would show him, in their offices.

14th May 1994:  Alan arrives at Telstra’s Exhibition Street FOI viewing room at 9:00 am, as previously arranged, to view FOI documents that Telstra had sent him without schedules.  Alan is introduced to Telstra FOI staff, including George Sutton and Rod Pollock.  He is informed he has the room until 6 pm.  Alan also arranged this meeting so he could apply for other material he had requested, but not received.

Rod Pollock offers fabricated reasons to explain why documents Alan had received some days before were heavily censored by blanking out information.  Alan receives some of the documents he should have received under his December 1993 and February 1994 FOI requests.  Mr Pollock provides some heavily blanked-out documents, including about 56 fax cover sheets, with attached documents.  One of the documents refers to the MELU Exchange that caused Alan massive problems between August 1991 and March 1992, so he asks Mr Pollock if he could supply the document, without the blanking out.  Mr Pollock leaves and Alan continues to check the documents provided.

Alan has some of the documents that Telstra had previously supplied with him.  He notices faxes that were only half received in the past are now not only incomplete, but they are attached to documents they had no connection to.  Some of the 56 fax-cover sheets he had seen before, now have completely different material attached.  Nothing seemed to match.  For example, documents relating to a fault in 1991 were attached to a fault record dated 1993 that stated no fault had been found.  Alan is so alarmed at this discovery, that he phones Detective Superintendent Jeff Penrose of the Australian Police and describes the situation to him.  At his suggestion, Alan prepared a Statutory Declaration and provided it to both the TIO and the arbitrator. (GS-CAV 189-A)

16th May 1994:  A TIO file note, which Alan received late in December 2001 (under the TIO policy privacy Act), confirms Alan’s visit to the TIO’s office (two blocks from Telstra House) and his request for a witness to accompany him back to the Telstra viewing room to see the altered documents for themselves. Exhibit GS-CAV 189-A marked Warwick and URGENT confirms Alan Smith left some of the censored/blanked out FOI documents with the deputy TIO, Sue Harlow.  In the last paragraph of this document the deputy TIO, Sue Harlow, refers to the proof Alan left confirming Telstra altered information on the supplied documents, noting, “He left an example of this with us (also attached).”

Even though the TIO was acting as an administrator to Alan’s arbitration, they refused to send anyone back with him.  As already noted, on 11th January and 11th July 1994 Telstra’s Steve Black wrote to Warwick Smith regarding the TIO-appointed Resource Unit and AUSTEL censoring Telstra documents before the COT claimants were allowed to use them to support their claims.  Perhaps this is why no one from the TIO’s office would help investigate this discovery matter?

When assessing the following segment, remember that Graham Schorer had still not agreed to submit his final arbitration claim, as Telstra had not provided him with all the relevant information he needed to support his claim.

In Alan’s Statutory Declaration, Alan names Rod Pollock as one of the culprits who had not supplied him with the correct FOI documents.  Compare this statement with the following statement made by Graham Schorer under oath

“On 29th September, 1994 two Senior Commonwealth Ombudsman officers, Mr Hind and Mr Wynack, interviewed Graham Schorer regarding the non-supply or drip supply of FOI documents. Under oath, Graham states:-“I rang a gentleman by the name of Rod Pollock

and I put the question to him. All he would say to me was, ‘Graham, my instructions are you get no documents until such time as you’re fully immersed in the arbitration procedure.’ I said, ‘Whose instructions?’ He said, ‘I can’t tell you that; but I can tell you that I’ve got instructions you won’t get them until that happens. (AS-CAV 78)

On the 13th October 1994, a Telstra whistleblower (possibly Lindsay White) wrote to Minister Lee stating that Steve Black and Rod Pollock were altering and changing the information on the COT cases’ requested FOI documents, in their attempt to minimise Telstra’s liability. In the side column of this letter, someone has handwritten the statement:  “Warwick Smith has been critical of Pollock on some issues.  

The FOI identification numbering on this letter is AUSTEL’s, the regulator during the COT arbitrations; perhaps someone from AUSTEL handwrote this statement?

On 6th May 1994 prior to the revealing of the Steve Black and Rod Pollock’s FOI issues, Ms Philippa Smith wrote to Telstra’s Frank Blount stating:-

“Mr Black replied on your behalf on 31 March 1994, but his letter addressed only some of the matters I raised.”

“I should be grateful if you would now respond to the outstanding matters raised in my letter of 25 March 1995 ie

  1. Comment on my views that:
    • it was unreasonable for Telecom to impose a condition for release of certain documents that the participants make further assurances that they will participate in the FTSP; and
    • it was unreasonable for Telecom to require the participants to make the assurances while Telecom was considering the agreement related to the FTSP (the Agreement) and thereby denying the participants the opportunity to consider the rules that Telecom wished to have included in the Agreement.
  2. Provide information about the steps Telecom has taken to locate files containing information relating to Mr Smith’s contacts prior to June 1991 and the personal files which allegedly were destroyed.” (AS-CAV 80)

18th May 1994:  Alan writes to Dr Hughes, asking him to extend his claim preparation time to 15th June 1994 due to Telstra’s delaying FOI tactics.  Dr Hughes replies to Alan’s request on 23rd May 1994 advising him that Telstra has agreed to an extension until 15th June 1994 but says Telstra’s “Mr Rumble has indicated that Telecom would be opposed to a further extension of time beyond 15 June 1994.”
(AS-CAV 81)

LOST CLAIM DOCUMENTS

Alan faxes Dr Hughes further claim material

23rd May 1994:  This fax billing account confirms five attempts of Alan’s office to fax this information to Dr Hughes failed (AS-CAV 82).  Telstra’s B004 defence document stated the fax couldn’t get through because Dr Hughes’ fax machine was busy.  If this is so, why was Alan charged for the five calls?

MISSING FAXES

After numerous faxes sent from Alan’s office to Dr Hughes do not get through, Alan becomes more and more agitated.  He had no idea where these faxes might be disappearing to, or why.

Documentation obtained from Ferrier Hodgson Corporate Advisory (FHCA) and the TIO-appointed arbitration Resource Unit confirm numerous documents forwarded to Dr Hughes’ office did not appear on their list of documents as being received.  See Dr Hughes (attachment 3) in main Dr Hughes target files.

COMMENTARY:

Between Alan signing the Fast Track Settlement Proposal, 23rd November, 1993 and realising Dr Hughes’ office was not getting all of his transmitted faxes, he participated in these official inquiries and investigations:-

  • The Coopers & Lybrand investigation.
  • The AFP investigation, which was still in progress.
  • The AUSTEL investigation into his matters.
  • The Commonwealth Ombudsman investigation into Alan’s FOI matters, which was not completed until May 1997, two years after Alan’s arbitration was deemed finalised.

Question:

How could anybody believe that it was reasonable to expect Alan and Graham to successfully prepare their claims while they were involved in the above investigations?  In Graham’s case, he was also involved in the Senate Working Party investigation, from 1997 to 1999, while the TIO was pressuring him to submit an arbitration claim.

25th May, 1994:  Graham Schorer writes to Dr Hughes:-

“Due to circumstances and events beyond the direct and/or indirect control of Graham Schorer plus other related claimants, companies etc., I am formally applying for an extension of time on behalf of Graham Schorer plus other related claimants, companies etc. pursuant to Clause 7.1 in the ‘Fast-Track’ arbitration procedure…”

“The reason for the request are as follows:-

  1. A substantial burglary in Golden’s premises on the 4 March, 1994 and the theft of vital equipment and records. …
  2. The inability to commence using outside resources to assist in preparation of the interim statement of claim etc. until such time as they are in receipt of new confidentiality clauses.The equipment stolen on 4th March comprised:

(a)   One of two word processors with its laser printer and back up disks containing Golden’s sales quotas, customer agreements, facsimiles and all the correspondence facsimiles and most of the documentation relating to telephone service difficulties, problems and faults relating to our present claim.” (GS-CAV 190)

Please note:

On 4th March 1994 approximately one-and-a-half hours after Golden Messenger’s burglary, another COT claimant’s business, Dawson Pest Control, was also burgled. Mr Dawson remarked he found it strange the burglars only stole business records and Telstra-related information.  On 11th October 1994 during Alan Smith’s arbitration Oral Hearing he informed the arbitrator that the Cape Bridgewater Holiday Camp booking information and banking statements had disappeared from his office.  Telstra FOI documents provided to the Australian Federal Police in 1994, by Alan, confirm Telstra was able to document dates when Alan would be in Melbourne (away from his business).  In one instance, Telstra documented an intended Melbourne trip, weeks beforehand.

Telstra charges for calls not answered by Alan or staff

3rd June 1994:  Alan is working in his lounge (adjacent to the office) with Wendy Trigg, a bus service operator, when the 055 267 267 phone in his office rings with two short bursts and stops before he can reach it.  The line is dead when he picks up the receiver.  Since this is a problem he has experienced for some months, he immediately rings Telstra’s 1100 fault line in Bendigo.  Mrs Trigg observes (and later documents) the process.

Alan uses his fax phone to phone Telstra.  This equipment is on a separate line to his 008/1800 free-call service, which is the line he is complaining about.  He asks the fault operator if she will phone his free-call number and see if she has problems getting through.  Moments later, while Alan was still holding on the fax line, there is a faint, one-ring burst on his free-call line.  Both Mrs Trigg and Alan hear this short ring but when he picks up the receiver, again, the line is dead and so he doesn’t bother to speak and hangs up the phone.

A few moments after Alan hangs up the free-call phone, the Telstra operator comes back to his fax phone and announces someone answers the free-call line, and it sounded like “Cape Bridgewater Holiday Camp”.  Alan hadn’t mentioned anything about the holiday camp, so who answered the call?  Where was her call answered, and by whom?

Alan rings 1100 again and asks the same operator if she wondered why he didn’t say more when he answered her test call?  Why didn’t he say something like ‘It looks like the phone’s OK after all’?  Alan then spoke to the operator’s supervisor and records show that all up, he was on the phone for 12 minutes and seven seconds.  Mrs Trigg provided her testimony to the arbitrator.

The following day Alan books “Powerhouse Productions of Portland” to produce a professional video, including a six-minute interview, explaining this incident.  Graham Sawyer interviews him, asking a set of prepared questions.  See Alan’s letter to Dr Hughes dated 21st June 1994 concerning this issue (AS-CAV 83).

10th June 1994:  AUSTEL’s John MacMahon writes to Steve Black, stating:-

“AUSTEL is continuing to receive complaints as to the quality of service from a number of the COT Cases

  • Mr Smith at Cape Bridgewater continues to express concern about his ability to receive and send facsimiles.
  • Mr Schorer at North Melbourne continues to claim that customers are reporting an inability to make a successful phone call to his business.” (AS-CAV 84)

The Implementation of the Recommendations of the COT Cases Report (see Alan Smith CAV Service Verification Test LGE File), states, on page 15:-

“The role of the Service Verification Tests (SVT) in the determination of the adequacy of a DNF service is that the SVT clearly have to be conducted well before 30 May 1995 to meet the requirement of recommendation 25. For example, if the SVT indicate an unacceptable level of service then a considerable amount of time may be required to rectify the service in question, particularly if major replacement of exchange equipment is required to bring the service to the accepted standard.”

In regards to the adequacy of the telephone service provided to Golden Messenger by Telstra, it is apparent from the exhibits (see above), that the service was less than adequate.

Telstra’s Paul Rumble threatens Alan

31st June 1994:  Mr Rumble is angry that Alan has supplied a number of Telstra FOI documents to the AFP, to assist the AFP in their interception investigations.  Mr Rumble rings Alan and says Telstra will not supply him the rest of the relevant claim material needed unless Alan promises not to supply any more FOI documents to the AFP.  Due to the stressful situation Alan is in, including no support from the arbitrator or the TIO, he gives his word to Mr Rumble, in blind hope he can reach an early end to this dreadful saga.

4th July 1994:  Alan responds to Mr Rumble’s threats in a letter:-

“I gave you 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.” (AS-CAV 85)

At the time of writing this letter, Alan did not intend to provide the AFP with any further FOI documents.  However, when the AFP came back to Cape Bridgewater on 26th September, 1994, they started asking a number of questions concerning this Paul Rumble letter.

Page 12, of the AFP transcript of Alan’s second interview at Q57, states:-

“The thing that I’m intrigued by is the statement here that you’ve given Mr Rumble your word that you would not go running off to the Federal Police etcetera.”

It is clear from the AFP statements in this transcript that they believe Telstra is intercepting Alan’s telephone calls without his knowledge or consent. (AS-CAV 86)

On 29th November, 1994 Senator Ron Boswell asked Telstra’s Legal Directorate, David Krasnostein, numerous questions concerning the AFP investigations into Telstra’s interception of the COT telephone conversations. Included is this question:

“Why did Telecom advise the Commonwealth Ombudsman that Telecom withheld FOI documents from Alan Smith because Alan Smith provided Telecom FOI documents to the Australian Federal Police during their investigation?” (AS-CAV 87)

Alan informed Dr Hughes and Warwick Smith that Telstra had breached the Privacy Act including confirmation that Mr Rumble refused to supply him with any further FOI documents until Alan agreed not to pass the information on to the Australian Federal Police (AFP).  Neither Graham nor Alan received ANY support from either Dr Hughes or Warwick Smith, regarding access to documentation.

11th July 1994:  Steve Black 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 Mr Black’s letter:-

“If the resource unit forms the view that this information should be provided to the arbitrator”,

confirms both Warwick Smith and Mr Black were fully aware that the TIO-appointed Resource Unit, Ferrier Hodgson Corporate Advisory, were secretly assigned to vet most, if not all, the arbitration procedural documents en route to Dr Hughes.  If FHCA decided a particular document was not relevant to the arbitration process, it would not be passed to Dr Hughes, or the other parties. (AS-CAV 590)

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.”
(GS-CAV 193-B)

The FTAP agreement Graham and Alan signed, on 21st 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 will see.

12th July 1994:  Telstra’s Paul Rumble writes to Graham Schorer saying:-

“I confirm my understanding that you wished to make an informed decision as to which documents were required and that you might take a few days in order to make an informed decision.” (GS-CAV 194)

15th July 1994: Graham Schorer responds to Paul Rumble’s letter, noting:

“Regarding the meeting of Thursday 7 July 1994, which commenced at 10.00 am.”

“The meeting opened with Schorer tabling a tape recorder to record the meeting.”

“Schorer stated that he did this on the understanding that Telecom, in their own internal documents (obtained under FOI), have recommended Telecom employees recording Telecom customer’s conversations without other parties’ knowledge. Therefore Telecom should not be adverse to the meeting being recorded with Telecom’s knowledge.”

“Telecom rejected the use of the tape recorder on the basis of it being inappropriate under the circumstances.”

And when referring to the 7 July, 1994 meeting, Graham states:-

“Schorer went on to say that there was a serious flaw in the Bell Canada testing results of Alan Smith’s service. Telecom’s internal documents stated that all tests required a minimum of 30 seconds between test calls to allow the network to reset itself.”

“Some of the tests done on Alan Smith’s service had a time separation of approximately 7 seconds between test calls.”

“Furthermore, in the testing of Golden’s service, Bell Canada conducted most of the testing at times and delays when North Melbourne exchange was in idle capacity, and outside Golden’s normal operating hours.”

18th July 1994:  Dr Hughes accepts the BCI report as Arbitration Evidence.  This letter, from Dr Hughes to Paul Rumble, states:-

“On 13 July 1994, the Resource Unit requested copies of the Bell Canada Report, the Coopers & Lybrand Report and the Telecom response to these Reports. The purpose of the request was to enable the Resource Unit to commence perusing relevant background documentation.” (AS-CAV 88)

19th July 1994:  Steve Black writes to Graham Schorer, stating:-

“The purpose of this letter is to acknowledge that I have received a cheque for $2,000 made payable to Telstra Corporation Limited and delivered by your Courier this afternoon.”

“I have not yet had time to read your letter and respond. However I note one comment that refers to the information provided to the arbitrator. This information has been supplied to the arbitrator for onforwarding to you under the rules of the procedure.” (GS-CAV 196)

Questions arising out of the above 11th and 19th July 1994 letters:-

  1. What motivated Mr Black, to send Graham’s FOI released documents directly to Dr Hughes and not to Graham?
  2. Were these Telstra-released FOI documents labelled: “To the Attention of the Resource Unit?”
  3. How many other similar Telstra-released FOI documents have ended up at the arbitrator’s office labelled: “To The Attention of the Resource Unit”, and NOT forwarded onto the other COT claimants?

21st July 1994:  Steve Black writes to Graham Schorer, stating:-

“I refer to your letter dated 19 July 1994 which refers to the information provided to the TIO under the ‘Fast Track’ arbitration procedure for onforwarding to yourself. …”

“I have noted your statement that, “if … [Telecom is] supplying the information as part of the arbitration process on [Telecom’s] own account, then [Telecom] should be supplying Schorer with copies as a matter of right and it should not be dependent on whether I ask the arbitrator to supply it or not and whether or not it is without charge.” (GS-CAV 197)

22nd July 1994: Warwick Smith writes to Steve Black, stating:-

“I refer to your related letters of 15 and 19 July 1994 and your two letters of 20 July 1994, the six boxes of documents which have been delivered to the TIO office, and your request that these be forwarded to Mr Schorer, ostensibly under the Fast-Track Arbitration Agreement.”

“In contacting Mr Schorer by phone on 19 July and again on 21 July 1994 to arrange delivery of these boxes, he categorically declined to receive them, stating that he wished to receive his documents under FOI, and not through any other avenue. …”

“The documents will be held at the TIO office until you indicate what should be done with them.” (GS-CAV 198)

29th July 1994:  On page 4 of AUSTEL’s first Quarterly Report Status of implementation of recommendations of COT Cases report, under the heading Service Verification Tests, it states:-

“In its briefing, Telecom indicated (and we will seek confirmation and further detail in writing) that if the SVT indicates an unacceptable level of service then the required replacement of network equipment will be undertaken.” (GS-CAV 199)

9th August 1994:  Graham Schorer’s letter to the arbitrator, Dr Hughes, states:-

“I am writing to you to confirm what progress has been made to date regarding documents being received under three different FOI applications.”

“Documents relating to Graham Schorer and Golden Application consist of many duplicate copies and does not represent all of the documents applied for under the two FOI Applications, being 24 November 1993 and 21 April 1994.”

“I will advise the Arbitrator in writing what action I intend…” (GS-CAV 200)

Graham Schorer also writes to Dr Hughes:-

“I have enclosed a facsimile from Telecom, received at my premises on 26 July 1994, at 11.41 pm.”

“This facsimile states that Telecom has forwarded all of the documents that fall within my FOI Applications to the TI.O. for onforwarding to the Arbitrator.”

“Would the Arbitrator please advise in writing as to what date the documents were delivered to the Arbitrator’s premises. Also please advise myself as to what arrangements that I need to comply with for the viewing of the same documents [sic].” (GS-CAV 201)

IMPORTANT

Grant Campbell: Alan Smith’s CAV Chronology file and the TIO Abuse of Power exhibit both confirm Grant Campbell signed official TIO letters on behalf of Warwick Smith (TIO) during the FTSP.  Mr Campbell was acknowledged as Manager of Disputes, which included Alan’s faxing and FTSP problems.  Although the TIO’s Annual Report of June 1994 includes a list of all the staff employed in the year to that date, Mr Campbell’s name is not on that list as a TIO employee.

Pia Di Mattina was seconded from Minter Ellison around the same time that Grant Campbell apparently assisted Warwick Smith in the administration of the COT arbitrations, but Ms Mattina’s name is not on the TIO’s employee list either.

Since Ms Mattina was only seconded to the TIO’s office, it is likely that Minter Ellison continued to pay her salary – but who picked up the wage bill for Grant Campbell?  From Alan Smith’s CAV list of contacts and supporting targets it is obvious that, in January 1995, just a week or so after apparently working with the TIO’s Arbitration Unit, Mr Campbell was working in Telstra’s Arbitration Unit, with Ted Benjamin.

Neither Graham nor Alan were ever told exactly when Mr Campbell defected to Telstra, the defendants in their arbitrations.  Who knows what confidential arbitration material Grant Campbell had access to before he went to Telstra?  Was the vetting of arbitration documents by a TIO officer on the agenda of the TIO and Telstra before Alan and Graham signed the FTAP?  Exhibit GS-CAV 193-A confirms both the TIO and Telstra knew documents would be vetted by the TIO’s Resource Unit before they were passed on to the arbitrator and the claimants, (if they were lucky)!!

12th August 1994:  Alan writes to Dr Hughes, and copies the letter to Paul Rumble (AS-CAV 89).  Because the BCI report was to be used as arbitration library material, see (AS-CAV 88), Alan reminds Dr Hughes Telstra have still not supplied Alan with the relevant raw data BCI used to support their reporting.

15th August 1994:  Alan again writes to Dr Hughes, and again copies to Paul Rumble.  He asks Dr Hughes to convene a meeting so the Resource Unit and the claimants can view technical documents that Telstra are withholding under legal profession privilege:-

“I forwarded you a very interesting document last week which was tabled under this Professional Privilege Act. That document was of a network fault. That document has since been viewed by John Wynack, Commonwealth Ombudsman, FOI as being illegal under the Act to be umbrellaed [sic] in legal privilege documents.” (AS-CAV 90)

16th August 1994:  Dr Hughes writes to Paul Rumble:-

“I enclose copy facsimile from George Close & Associates Pty Ltd, undated but received 12 August 1994.”

“You will note Mr Close is seeking information to which he has apparently not yet had access. Presumably this may lead to a formal application by one or more of the Claimants pursuant to clause 7.5 of the ‘Fast-Track’ Arbitration Procedure.” (AS-CAV 91) Exhibit AS-CAV 92 includes Mr Close’s letter.

Dr Hughes again favours Telstra

On the same day, Dr Hughes writes a second letter to Paul Rumble:-

“As requested in my covering facsimile enclosing a copy of Mr Close’s letter, I would be grateful if you would provide me with your initial reaction to the request so that I can consider appropriate directions on the matter.”

“Mr Smith also makes a second request, that is, for me, the Resource Unit and certain claimants to view privileged information in the possession of Telecom. I am seeking further clarification of this request from Mr Smith but my inclination is to disallow it.” (AS-CAV 92)

The 17th February 1994 Arbitration Minutes, confirm Mr Bartlett stated the reason for starting the arbitrations was so the arbitrator could order the production of documents, as some of the COT cases had still not received their FTSP documents.  Dr Hughes stated:-

there were two ways to proceed in relation to the problem of outstanding documents:

  • the procedure is put on hold until all the documents are exchanged in accordance with the FOI procedure; or
  • the arbitration procedure commences and then the arbitrator gives appropriate directions for the production of documents.”

“Dr Hughes indicated that one party can ask for documents once the arbitration has commenced. … and that as arbitrator, he would not make a determination on incomplete information.(AS-CAV 53)

Why did Dr Hughes break his commitment to the COT cases?

Please note:  these are two examples of the type of technical material that was withheld from Alan under LPP.

“Poor performance of Telecom – historically March data problem, local Portland problem fixed in October”

“Slow resolution by Telecom of past problems of Smith – both technical and claims …”

Smith Grade of Service Complaint, Fax cover sheet from B Watson to M Ross, (LPP)”

“Smith Service Grade Complaint, Minute from R Denmead to B Watson (LPP)” (AS-CAV 93)

With AUSTEL’s letter of 9 December 1993 before them, Telstra still used the BCI Report as Arbitration Defence Material.  What is just as alarming, is that regardless of Dr Hughes, Warwick Smith and the TIO- appointed Resource Unit being provided with this same BCI information, they still allowed the BCI Report to be placed into evidence. (GS-CAV 195)

Again, on the same day, Dr Hughes sends a third letter to Mr Rumble. He states:-

“If Mr Smith does seek to rely upon the raw data or the results of any analysis of the raw data, and if such information is to be made available to him, then I could not accept his submission as being ‘complete’ as at 18 August 1994.” (GS-CAV 202-C)

At the time of writing this letter, Dr Hughes had already provided the BCI Report to the Resource Unit (on 24th May 1994) for their perusal.  It is important to show Dr Hughes clarified in this letter by stating:-

“if Mr Smith does seek to rely upon the raw data or the results of any analysis of the data”

(then Alan’s claim was not complete), yet, he still brought down his findings on Alan’s in complete submission.

25th August 1994:  Paul Rumble responds to Dr Hughes’ letters of 16th August:-

“Mr Smith has requested ‘all raw data associated with the Bell Canada testing’. …”

“I have obtained files containing some test results and working documents belonging to Bell Canada International which they created while preparing their Reports, and subsequently left with Telecom. I have been informed by Bell Canada International that they have not retained any other files containing such documents. These files consist of approximately 700 pages plus six disks of data.” (GS-CAV 203-A)

The 700 pages and six disks, containing Bell Canada International data, referred to by Mr Rumble has never been provided to Alan Smith.  When Graham requested this BCI information, Ted Benjamin informed him on 7th March 1995 that it was still unavailable. (GS-CAV 213)

Paul Rumble responds to another of Dr Hughes’ letters:-

“I have obtained files containing some tests results and working documents. … These files consist of approximately 500 pages.” (AS-CAV 95)

28th August 1994:  Alan again writes to Dr Hughes re FOI BCI matters.  This letter acknowledges Alan contacted Telstra’s Mr Stockdale:-

“as I wanted to identify which person in National Network Investigations was advising in writing the Telecom staff responsible for making decisions to exempt or delete information from me under the FOI procedures on the basis that the information contained in the documentation that he was supplying would be considered harmful to Telecom…” (AS-CAV 94)

13th September 1994:  Paul Rumble writes to Dr Hughes:-

“I refer to my letter of 25 August 1994 concerning Mr Smith’s request for ‘all raw data associated with the Bell Canada testing’, and your reply later that day. …

“Telecom has not received any direction from you to supply any of Bell Canada International documents to Mr Smith…” (AS-CAV 96)

16th September 1994:  Alan responds to Telstra’s Interrogatories.  This 42-page reply is addressed to Dr Hughes.  Pages 15 and 16 questions Telstra as to how Alan can respond to the BCI information requested, as per the interrogatories.  Alan’s answer to Telstra’s question 14:-

“28th October 1992 produce this raw data to the resource team and I shall prove calls came in as answered but they were not. Go on, prove I am wrong. If I am right, then you produce all raw data that I have asked for, including Bell Canada.  If I am wrong, then let the Assessor decide and make a judgement for 1992.”

Telstra’s question 2 could have been better answered on the BCI matter had Alan received the BCI raw data under FOI and or through Dr Hughes. (AS-CAV 97)

18th September 1994:  Alan’s letter to Mr Wynack, of the Commonwealth Ombudsman’s Office, concerns the BCI FOI documents.  Again, Alan condemns Telstra for the way in which they are not abiding by the FOI Act, or the spirit of the Arbitration Agreement.  This letter is copied to Dr Hughes, Paul Rumble and Warwick Smith. (AS-CAV 98)

Please note:  During the entire arbitration process, from 21st April 1994 to 11th May 1995, Alan never received a letter from either Dr Hughes or Warwick Smith, advising they were concerned Telstra was not providing him with the relevant FOI documents he needed to support his claim.

20th September 1994:  Telstra’s FOI schedule pertaining to Graham’s FOI requests shows that an FOI document, dated 20th September 1994 entitled Extract – Litigation Cots Fast Track pt 4 – Emails between Joy Geary and Paul Rumble and Jessie Lewis was withheld from Graham and Alan under the heading Exempt in Full.  The schedule notes:-

“This document contains a confidential communication between a lawyer and client created for the dominant purpose of giving or receiving legal advice.” (GS-CAV 203-B)

Telstra’s Paul Rumble was Graham and Alan’s Arbitration Liaison Officer and Joy Geary, Telstra’s FOI Officer, so this FOI information should not have been withheld from Graham and Alan.

Could this exempt FOI document be associated with the Bell Canada information that Graham and Alan were seeking from Mr Rumble?

21st September 1994:  Dr Hughes writes to Paul Rumble:-

“I confirm I have not directed the production by Telecom of any Bell Canada International documents.”

“At this stage I would be encouraging Mr Smith to defer any request for discovery until Telecom’s defence documents have been submitted.” (AS-CAV 99)

Did Dr Hughes not think Alan was entitled (as the claimant) to be provided with the correct information so he could properly support his reply to Telstra’s interrogatories and his claim?

As mentioned previously, Graham Schorer swore under oath that Rod Pollock told him:-

“Graham, my instructions are you get no documents until such time as you’re fully immersed in the arbitration procedure.”

The TIO File notes for 14th and 16th May 1994 shows Alan Smith also warned the TIO’s office and the arbitrator Dr Hughes, that Rod Pollock did not provide Alan with the correct FOI documentation he requested during his time at Telstra’s FOI viewing room.  The TIO internal memo dated 16th May 1994 confirms that Alan left samples of altered documents with the deputy TIO, Sue Harlow.

As shown below for the date 13th October 1994 a Telstra whistleblower wrote to Parliament House Canberra, alleging that Steve Black and Telstra’s Rod Pollock were the two main offenders who were altering information of FOI documents legally requested by COT claimants, in an attempt to minimise Telstra’s liability.   In the margin of the first page of this document, someone has added a hand-written comment:  Warwick Smith has been critical of Pollock on some issues.

29th September 1994:  Peter Gamble, Telstra’s Arbitration Engineer, experiences problems getting verification-testing equipment to work correctly at Cape Bridgewater.  He blames Alan’s telephones, saying the phone in the camp kiosk, connected to the phone line, is causing the problems.  Cathy Ezard (Alan’s partner) and Alan disagree:  they disconnected the phone themselves when the Telstra technicians initially arrived on site.  They both later prepare and sign Statutory Declarations confirming their belief that Mr Gamble was wrong and that it appeared there were problems with the verification equipment.  Both documents are forwarded to Dr Hughes.

Documents received (2001) under FOI from the ACA

Two documents are particularly relevant to the SVT problems:

11th October 1994:  AUSTEL writes to Peter Gamble regarding the deficient SVT and asks what Telstra intends to do about this deficiency. (AS-CAV 123)

16th November 1994:  AUSTEL writes to Steve Black of Telstra outlining its concerns regarding the deficiencies in the SVT process conducted at Cape Bridgewater, with particular emphasis on the simulated 008/1800 calls. (AS-CAV 124)

Even though AUSTEL expressed serious concerns about obvious deficiencies in the SVT process, Telstra still used the test result to support their arbitration defence. Telstra’s CCAS data, for the testing that took place at Alan’s premises on 29th September 1994 confirms none of the tests on his three business lines met the Regulator’s requirements.

Brian Hodge, B Tech, MBA (B.C. Telecommunications) declared, in his 27th July 2007 Report, the SVT process conducted by Peter Gamble, 29th September 1994, was fundamentally flawed.

Telstra’s own billing records, including documentation given to Telstra by John Wynack of the Commonwealth Ombudsman’s office, show Telstra continued to incorrectly charge Alan on his 008/1800 line up until at least 1997.  Finally, as a direct result of this faulty charging, Alan asked Telstra to disconnect this service.  All the continuing complaints about the bill faults during Alan’s arbitration should have prompted John Rundell, of Ferrier Hodgson Corporate Advisory, to re-assess the merit of the SVT process.  Instead, FHCA blamed the limited timeframe in the Arbitration Agreement for the reason why the Technical Resource Unit was unable to investigate technical issues like the billing faults.

Mr Rundell wrote to TIO John Pinnock, on 15th November 1995 alleging Alan only raised the billing faults in April 1995 (AS-CAV 104).  Four transcript pages, 91 to 94, from the Oral Arbitration Hearing on 11th October 1994 that John Rundell attended, confirm Alan discussed the billing problems that were attached to his letter of claim dated 15th June 1994.  Why did Mr Rundell deceive the TIO about when Alan raised the billing problems? (AS-CAV 105)

If Telstra had been honest and advised Dr Hughes that AUSTEL alerted Telstra’s Arbitration Liaison Officers to deficiencies in the SVT at Cape Bridgewater, and then repeated the tests, it would have been obvious to Telstra, or the Technical Resource Unit, that major faults were still occurring on the 008/1800 service, the Gold Phone service and the facsimile line.  The arbitration would have been halted immediately, as the arbitrator could not hand down his award if the phone faults, which sent Alan into arbitration in the first place, were not fixed.

30th September 1994:  Warwick Smith writes to Graham Schorer, stating:-

“Telecom have changed some of the management team for the COT process. Today I asked Mr Ted Benjamin to accompany me to briefly meet Dr Hughes formally. Yesterday Mr Benjamin, in my presence, received an overview of the current position from Mr Peter Bartlett and Ms Di Mattina. … At this critical stage the impact of such a change needs to be minimal and advantage the process. I hope this will be the case.(GS-CAV 204)

This letter does not advise Graham that Mr Benjamin has been a TIO Council member since June 1993.  This letter shows, once again, an illicit meeting of parties involved in the COT arbitration, without any COTs or their representatives being present.  Of interest, contrast these meetings with Dr Hughes’ statement to Mr James, President of the Institute of Arbitrators Australia, on 16 February 1996:-

“Mr Smith’s assertion … that a technical expert, Mr Read, refused to discuss technical information at his premises …is correct – in this regard, Mr Read was acting in accordance with his interpretation of my direction which prohibited him from speaking to one party in the absence of the other party…” (AS-CAV 503)

Was there one rule for the complainants and another for the defendants?

2nd October 1994:  Alan complains to Ted Benjamin about the deficient SVTs conducted at his premises.  On 6th October 1994, Telstra writes to Dr Hughes, asking him to order Alan to comply with their interrogatories and

“direct the claimant to provide Telecom, on or before 20th October 1994, with the particulars set out in Schedule 1 of this letter, and the documents set out in Schedule 2 of this letter”.

But some of the documents they were seeking could only be supplied by Telstra themselves, under one of the many FOI requests which they had not yet complied with!

Letters exchanged between Dr Hughes and Telstra, on 15th and 21st July, and 16th August 1994 together with two letters on 25th August 1994 (five letters in all) show Dr Hughes was well aware Telstra admitted some of the information Alan was seeking was stored in their archives.  Why didn’t Dr Hughes order Telstra to produce these documents so Alan could complete his claim?  Why was Dr Hughes not concerned about the copied 2nd October 1994 letter condemning the SVT process?  Who was protecting Alan’s rights?

How could Alan reply properly to Telstra’s interrogatories and complete the final presentation of his claim, when the arbitrator had not accessed the information Alan required, despite promising to do so on 17th February 1994?

By the end of August 1994, Alan suspected Paul Rumble’s threat of withholding FOI documents, if Alan assisted the AFP, was being played out.  What was really behind Telstra’s reluctance to supply the documents Alan needed? – was this anything to do with his previous contact with the AFP?

  • When Telstra advised the arbitrator that at least some of the documents Alan wanted to be were held in their archives, why didn’t the arbitrator order Telstra to pass them on to Alan?
  • How did Telstra know, on 7th April 1994 that Alan would be away from his business on the following 5th August to 8th August 1994?
  • Why was Telstra live monitoring Alan’s business during the arbitration process?
  • Was Telstra involved in the disappearance of Alan’s booking and banking records?

The transcript of a second interview with the AFP on 26th September 1994 confirms Telstra records, held by the AFP, proved Telstra was indeed bugging Alan’s phones. Was Telstra retaliating because Alan dobbed in Paul Rumble?

3rd October 1994:  Graham Schorer drafts a response to Warwick Smith’s letter of 30th September 1994 (above).  Graham’s solicitor, William Hunt, advises Graham to edit it before sending it because of the risk of being accused of slander, by Mr Benjamin, Mr Rumble or Ms Geary.  The letter was finally reduced to two pages and faxed to Warwick Smith on 5th October, with copies also going to Telstra’s CEO (Frank Blount), the TIO’s Legal Counsels (Peter Bartlett and Pia Di Mattina), the Arbitration Project Manager (John Rundell) and the Arbitrator (Dr Gordon Hughes).

Even after William Hunt’s advice, Graham’s letter still condemned Mr Rumble’s actions:-

Mr Rumble’s conduct and treatment towards the CoT Members involved or attempting to become involved in the arbitration process, in the opinion of the individual C.o.T. Case Members, failed to meet the minimum standards of conduct regarding adequacy, reasonableness and fairness.”

“It should be noted that Mr Rumble performed his duties under the directions of the senior Telecom Group General Manger of Customer Affairs controlling the whole unit that directly interfaces with CoT Members, Mr Black.” (GS-CAV 204-B)

Graham was already in receipt of a previous letter, dated 4th July 1994 from Alan Smith to Paul Rumble (copied to the AFP, Dr Hughes and Warwick Smith) in which Alan raised concerns regarding Mr Rumble threatening Alan into promising not to provide FOI documents to the AFP.  Mr Rumble implied that continuing to provide information to the AFP would result in Telstra stopping the supply of the FOI documents Alan needed to support his claim.  Alan’s claim was never investigated. The Alan Smith CAV Chronology LGE file, and supporting documents including a copy of the transcript of the AFP interview with Alan on 26th September 1994 reveal the AFP’s clear concern regarding Mr Rumble’s threats.  Exhibit GS-CAV 204-C contains page 180 from Senate Hansard records for 29th November, 1994 and records Senator Boswell asking Telstra:-

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

In Graham’s letter of 3rd October 1994, Graham also raises Steve Black’s involvement in the matters discussed, as Mr Rumble answered to Mr Black.  Further, on 13th October 1994 (see below), a Telstra whistleblower identifies Steve Black as one of the culprits attempting to minimise Telstra’s liability by altering information on FOI documents legally requested by various COT claimants.  This accusation further supported Graham’s claims regarding Mr Black as well as Graham’s challenge of the appointment of Ted Benjamin to replace Mr Rumble as Telstra’s Arbitration Liaison Officer.  Graham did not know Mr Benjamin was already a TIO Council member, and, as shown above, on 30th November 1993 provided confidential TIO council COT-related information to Telstra’s hierarchy after attending a TIO Council meeting.

Also noted above, Dr Hughes, Peter Bartlett and John Rundell, all received a copy of Graham’s October 1994 letter to Warwick Smith, therefore all four were a party to Graham’s concerns, yet nothing was done.  Later, Mr Rundell wrote to Warwick Smith (18th April 1995) copying to Dr Hughes and Peter Bartlett, alerting, “It is unfortunate that there have been forces at work collectively beyond our reasonable control that have delayed us undertaking our work.  Even more amazing – Dr Hughes also wrote to Warwick Smith (12th May, 1995) and declared the Arbitration Agreement to be not “a credible process”.

Did the Paul Rumble/AFP issue stop the arbitration process?  NO.

Did the allegations of Steve Black and Rod Pollock tampering with documents initiate an investigation into the arbitration process?  NO.

Did the “forces at work” letter result in the arbitration process being postponed until the matter could be investigated?  NO.

Did Dr Hughes’ letter declaring the Arbitration Agreement to be not credible stop the arbitration process?  NO.

All this indicates that, in his letter to Warwick Smith, Graham was obviously correct to challenge Paul Rumble and the appointment of Ted Benjamin.

Steve Black writes to Graham stating:-

“Subject to the confirmation of the consent and availability of the Arbitrator I confirm my agreement to meet with him, Mr Smith, Mrs Garms and yourself on Wednesday 5 October 1994, or such other date as the Arbitrator is available. …”

“The purpose of the meeting is to address the means by which these Arbitrations may be progressed promptly. In particularly the meeting will focus on issues relating to the production of documents both by Telecom and between the parties.” (GS-CAV 205)

Even though Graham Schorer and Alan Smith continued to raise the production of document issues with Dr Hughes from February 1994, the meeting of 5th October 1994 never took place.  In Dr Hughes’ letter to Warwick Smith, dated 12th May 1995 (see below), he actually blames the poor timeframe in the Arbitration Agreement for the production of documents, as one of the reasons the Arbitration Agreement was not credible.

Although Dr Hughes did not convene this meeting to discuss the production of documents between the aforementioned parties, as will be seen from the oral hearing discussed below, a meeting to discuss Telstra’s request for documents from Alan was convened.  Are we to assume some sort of favouritism by the arbitrator?

During the AUSTEL COT report period, in April 1994, Cliff Mathieson, a Technical Advisor to AUSTEL, asked Alan to keep AUSTEL informed of any evidence he found during his arbitration, that might assist AUSTEL in their investigations into 008/1800 billing and short-duration call problems.  AUSTEL actually wrote to Telstra’s Steve Black on 10th June 1994 (on Alan’s behalf), expressing concern at the problems he was experiencing with sending and receiving faxes.  To keep AUSTEL up to date, Alan writes to them, on 3rd October 1994 providing evidence, using Telstra’s own data, which showed they charged Alan for two non-connected recorded voice faults (RVA) on 27th May 1994.  Alan’s evidence was supported by the fact that the person who complained about these two faults was his Arbitration Claim Advisor, Gary Ellicot, ex-national crime detective.

This letter to AUSTEL on 3rd October 1994 later became pivotal to Alan’s increasing anger, particularly when he then received the following information from Dr Hughes in a letter dated 15th November 1994:-

“As I have indicated previously, I believe it would be inappropriate for me to order the production of documents in connection with the preparation of your claim, until Telecom has submitted it defence. I will then understand the parameters of the claim.” (AS-CAV)

Alan’s frustration is clear from his response, dated 27th November 1994:-

“I refer to your letter dated 15 November, 1994.”

“In paragraph three you have noted that, if newly released F.O.I. material is made available by Telecom, and if that makes it necessary for me to amend my claim, I should advise you accordingly.”

“I have continually corresponded with both yourself and Telecom about my concerns with regard to the conduct of Telecom Management; Simon Chalmers; Freehill, Hollingdale & Page and their delaying tactics. Their drip feeding procedure, where the release of these F.O.I. documents is some twelve months late, has disadvantaged me in the preparation of my submission under the Fast Track Arbitration Procedure.”

“Newly released documents on their own may only show limited evidence, painting a small picture. However, had this newly released F.O.I. material been released some twelve months ago, as it should have been under the F.O.I. Act, this material, when combined with documents already released, would have helped in many instances to further the point made on certain issues.”

“Telecom Management, by using this destructive system, has disadvantaged C.O.T. and its members throughout this Arbitration Procedure. By not allowing all the evidence to be viewed by C.O.T., Telecom has stopped us from substantiating all our claims with all the available material. ‘A Jigsaw Puzzle Can Only Be Finished When All The Pieces Are Tabled’: and didn’t Telecom Management play this to a break! …”

“So, in response to your letter of 15th November, 1994: How can I amend my claim? Telecom have already had five months to view my first submission as presented in June, 1994, and three months to view my second submission presented in August, 1994. I am already living on borrowed time, in more ways than one, and each delayed week is having an effect, particularly where advertising for next year is concerned – this has already been disadvantaged. …”

“I do not have the resources to have a professional team view these additional F.O.I. documents which have just been released by Telecom. I have spent time writing reference to these examples and enough is enough. All future F.O.I. that has not been provided will have to stay put. I am today mentally exhausted and unable to continue taking part in Telecom’s façade, their Merry Go Round.”

“I thank you for your time, and that of the Resource Team.” (AS-CAV 119)

This letter was sent the following day, 28th November, and that evening, totally overcome with anger and frustration, Alan smashed a single barrel shotgun that had been given to him by his father-in-law, Noel Wagner, some 16 or 17 years earlier.

LODGEMENT OF ARBITRATION CLAIM

The first part of Alan’s claim was lodged with Dr Hughes on 15th June 1994.  Paul Rumble, of Telstra’s Customer Response Unit and Graham Schorer, COT spokesperson, were also at that meeting.  At the time, Alan makes it very clear to Dr Hughes and Mr Rumble that:-

  • The FOI documents Telstra had supplied had not been numbered so Alan numbered them, from 1 to 2,158.
  • It was extremely difficult to submit a complete claim when Telstra provided so much heavily censored documentation without schedules.
  • Because of these problems, Alan would, therefore, be submitting further documents to support his submitted claim,
  • George Close, Alan’s technical advisor, had not yet received the relevant technical data requested under FOI and so his report would be somewhat delayed.

The Arbitration Agreement states the arbitrator should pass the claim onto Telstra WHEN THE CLAIM IS COMPLETE, and allow Telstra one month to complete their defence.  George Close was not able to submit his report until late in August 1994, but a letter from Dr Hughes to Mr Rumble on 22nd June shows Dr Hughes sent Alan’s interim claim to Telstra on 15th June.  Since Alan’s claim was not complete until George’s report was submitted, this meant Dr Hughes was arranging for Telstra to have at least two months, from first receiving Alan’s interim claim, to present their defence.  As it happened, Telstra did not submit their defence until 12th December 1994 – almost six months after receiving Alan’s interim claim.  How much more one-sided can a process be?

This 13-page document, dated 30th March 1995 from FHCA to Warwick Smith, is submitted in full in the CAV Peter Bartlett Target.  Two relevant pages confirm FHCA noted that Alan’s claim was not formally certified as complete until November 1994. (AS-CAV 103)

What this FHCA letter doesn’t say is, that due to Telstra withholding FOI documents from Alan, Alan was still drip-feeding claim material to Dr Hughes, but this material was never assessed.

10th October 1994:  Alan again complains to Telstra regarding the SVT tests.

Like his letter of 2nd October 1994 (AS-CAV 106), this SVT complaint was also copied to Dr Hughes and Warwick Smith.  Likewise, it received no response (AS-CAV 107).

Alan’s one-sided Oral Hearing

11th October 1994:  Back to the Oral Hearing with Telstra, see (AS-CAV 101).

When Alan is unable to comply with Telstra’s interrogatories, Telstra asks the arbitrator to convene an Oral Hearing, which he does.  Dr Hughes advises Alan to attend this hearing alone as Telstra’s lawyers won’t be involved but, as the transcript of this gruelling, five-hour, non-stop examination shows, Telstra is actually represented by two officers who have some sought of legal expertise: Steve Black and Ted Benjamin. Note, the FTAP rules prohibit cross-examination.

The transcript of this hearing also shows Dr Hughes accepts Alan’s claim material as factual and enters it into evidence.  Claim document SM18 is highlighted and discussed at great length at this hearing.  Evidence, inadvertently provided by Dr Hughes’s secretary in August 1995, confirms documents SM 18 & SM 19 do not appear on the list of assessed documents, in the DMR and Lane Report.  See Alan Smith Relevant Information File, exhibit 5, DMR and Lane Report.

Comparing Alan’s summary at exhibit AS-CAV 322-A to F  with exhibit AS-CAV 108 shows the comprehensive log of complaints he provided to the arbitrator during his arbitration. Page 2 in the DMR and Lane report states: “A comprehensive log of Mr Smith’s complaints does not appear to exist.” (AS-CAV 322-C)  The listed numbers in the far-right column of AS-CAV 108 comprise the number of the claim document as well also a cross-reference to a brief description of the document.  How much more comprehensive could the first 10 pages of this 12-page document be?

Transcript pages 37 to 41 (AS-CAV 106) show Dr Hughes explaining that if Alan wants him to address the phone bugging issues in his claim then Telstra had the right to order him to provide relevant information to support the claim.  Twice Alan confirms he wants the phone bugging and privacy issues to remain in his claim.  Steve Black’s letter to Warwick Smith, dated 17th October, 1994 regarding the voice-bugging issues, states:-

“Mr Smith has also raised Telecom’s fault investigation procedures (including voice monitoring) as an issue in his claim which is under arbitration. Telecom is currently in the process of responding to that claim under the agreed arbitration procedure.” (AS-CAV 109)

Please note:  Neither, Telstra (in their defence) nor Dr Hughes (in his award) addressed the phone-bugging claim issues, even though the Arbitration Agreement, clause 11, states, “The Arbitrator’s reasons will be set out in full in writing and referred to in the Arbitrator’s award.” (AS-CAV 110)

On 27th October, and again on 3rd November 1994, Alan wrote to Telstra seeking relevant CCS7 and CCAS Bell Canada International data (AS-CAV 111 and AS-CAV112).  Some of this data was included in documents supposedly held in Telstra’s archives and Telstra had previously advised the arbitrator the documents were ready for release (AS-CAV 96 and AS-CAV 99).

The transcript shows Alan’s claim document (“Smith 18”).  The arbitrator and Alan spoke at great length about this billing document (AS-CAV 101).

Telstra Minimise their Liability

13th October 1994:  The Office of the Hon Michael Lee, MP, Minister for Communications, receives AUSTEL FOI document folio 94/0269-05 (22): a Telstra whistleblower letter, originally sent to Parliament House, Canberra.  This letter alleges two of Telstra’s executives, Steve Black and Rod Pollock, were involved in altering or removing information on documents requested by the COT claimants under FOI.

Please note:  someone has added a handwritten comment on page one, pointing to Rod Pollock’s name and noting, “Warwick Smith has been critical of Pollock on some issues.”  In the Alan Smith – CAV Chronology LGE file, Alan provides documentation confirming that, on 16th May 1994 he left irrefutable evidence with Sue Harlow (Deputy TIO), for her to pass on to Warwick Smith.  He also left his Statutory Declaration naming Rod Pollock as one of the Telstra employees who removed information on requested documents or didn’t provide the correct documentation that should have accompanied existing received FOI documents.  Did Alan’s evidence force Warwick Smith to ask questions prompting the whistleblower to come forward? (GS-CAV 206)

Comment:

Warwick Smith must have told someone – either in Government or in a regulatory position – that two different sources named Rod Pollock.

The whistleblower’s letter was passed to Graham Schorer by the Regulator (then the ACA, now ACMA) during the Major Fraud Group inquiry.  Despite this type of information being available to both the TIO and the arbitrator, still, nothing was done during Alan and Graham’s arbitrations to investigate these FOI matters.

In this letter under the heading, “Concerns and Issues”, this document states:-

“Mr Steven Black Group General Manager of Customer Affairs who has the charter to work to address and compensate Telecom’s ‘COT’ customers as well as the management of other customer issues related to Telecom is involved in and initiates conduct and work practices that are totally unethical. …”

“There are three main areas which Steve Black and his senior executives have sought to influence and manipulate:

  • Remove or change clear information on the position of liability
  • Diminish the level of compensation payable to COT customers
  • Dismissive of breaches in relation to matters regarding customer privacy.”

“In relation to the Robert Bray case Steve Black has sought to cover up the true facts of disclosure of customer information. Particularly he has sought to cover up ‘broadcasting’ of the customers [sic] private information.”

10th November 1994:  Dr Hughes writes to Mr Schorer:-

“Telecom has indicated in its letter of 26 October 1994 that it is ‘keen to have all issues in dispute’ dealt with in the arbitration process. It is, therefore, prepared to classify the allegations of unauthorised telephone tapping as falling within the description of ‘alleged service difficulties, problems and faults’. …”

“If you submit a claim which makes no reference to the allegations of unauthorised telephone tapping, and if Telecom makes no comment about the exclusion of such allegations, then they will fall outside the scope of this arbitration.” (GS-CAV 207)

Alan Smith raised the issue of his phone being illegally tapped on 15th June 1994 in his Letter of Claim, in his response to Telstra’s interrogatories on 16th September 1994 and during his Oral Arbitration Hearing on 11th October 1994.  Since Alan’s phone tapping issues were never addressed in his arbitration, did Dr Hughes ever intend to address Graham Schorer’s phone tapping issues? (or did he plan to ignore them, as he ignored them in Alan’s case?).

The wording “alleged service difficulties and faults” is incorporated into clause 10.2.2 of the Arbitration Agreement.

This letter from Dr Hughes further confirms his knowledge that the phone bugging issues were part of the arbitration procedure and were to be addressed by Telstra during the procedure.  Why did Dr Hughes allow Telstra not to address the information contained in Alan’s arbitration claim, which confirmed the AFP transcript stated Telstra had listened to Alan’s phone conversations without his knowledge or consent?

11th November 1994:  John Wynack, Director of Investigations at the Commonwealth Ombudsman’s Office, writes to Frank Blount, Telstra’s CEO.  The letter is copied to Dr Hughes and Warwick Smith and indicates how desperate Alan was becoming.  Alan believes that Mr Wynack made it quite clear to Mr Blount that he would be more than a little concerned if Alan’s allegations were proved correct regarding Telstra deliberately blanking out information on documents previously supplied under FOI and withholding relevant documents from Alan.  Mr Wynack’s concerns were justified. (AS-CAV 114)

In Dr Hughes’ draft award on page 4 at 2.3, he states:-

“Although the time taken for completion of the arbitration may have been longer than initially anticipated, I hold neither party and no person responsible. Indeed, I consider the matter has proceeded expeditiously in all the circumstances. Both parties have co-operated fully.(AS-CAV 115)

What is amazing about this draft award, inadvertently provided by the TIO office 2001, is that at the side column of this clause someone has handwritten Do we really want to say this?”  Did someone believe the arbitration process was not being as transparent as it should have been?  In the final award, there is no clause 2.3. Comparing both the draft and final awards show that the technical findings are the same; however, it is evident, from a date discussed in the draft, the technical findings were prepared before the TIO appointed DMR Canada as the Technical Consultant.

Telstra admitted, to Mr Pinnock on 7th September 1995 it withheld at least 40 per cent of the documents Alan requested during his arbitration until after Dr Hughes deliberated on his claim. (AS-CAV 116)

It is significant that Dr Hughes knew Telstra were not abiding by the FOI Act, including not abiding by the agreed Process of Discovery.  On page 4 of John Pinnock’s report to the Senate, dated 26th September 1997 he states:-

“In the process leading up to the development of the Arbitration procedures, the Claimants were told that documents would be made available under the Freedom of Information Act.” (AS-CAV 117)

As per section 15(1) of the Ombudsman’s Act 1976, Ms Philippa Smith, Commonwealth Ombudsman, released her findings regarding Graham Schorer’s FOI complaints against Telstra:-

121:     “In my opinion, Telecom acted unreasonable in failing to notify Mr Schorer that the (FOI) fee was waived when Mr Schorer met Telecom’s condition by signing the FTAP on 21 April 1994.”

138:     In my opinion, Telecom, it was unreasonable for Telecom to impose the condition in the letter of 15 March 1994 to Mr Schorer that it would provide certain documents after receiving confirmation that the FTSP was to proceed.”

140:     “In my opinion, Telecom acted unreasonable in refusing access to those documents for a further five weeks. (Delay in granting access to the files mentioned in B above)”

151:     “In my opinion, it was unreasonable for Telecom to delay sending the documents while the solicitors examined them for contentious issues. (Verification of exemptions)”

155:     “In my opinion, it was unreasonable for Telecom to delay sending the documents while the solicitors examined the documents to verify that exemptions had been applied wherever possible.”

Ms Smith’s full report is attached to Graham Schorer’s CAV Relevant Information file exhibit 9.

Alan Smith writes to Dr Hughes (GS-CAV 209), copying a letter from John Wynack, also dated 11th November 1994 to Telstra’s CEO Frank Blount, which states:-

“At the request of Ms Geary, I am notifying you of the details of the complaints made to the Ombudsman by Mr Alan Smith. …

24.3.94            Telecom claimed that documents given to Telecom by Mr Smith in 1992 had been destroyed or lost.

Telecom unreasonably refused to give any further documents to Mr Smith.

Telecom has lost or destroyed a number of files relating to his contacts with Telecom prior to 1991. …

5.5.94              Telecom unreasonably delaying providing access to many documents. …

7.11.94            Telecom unreasonably refused to provide the ‘Portland/Cape Bridgewater Log Book associated with the RCM at Cape Bridgewater’ for the period 2 June 1993 to 6 March 1994.” (GS-CAV 209-B )

Dr Hughes plays arbitrator

21st November 1994:  After sending his letter of 15th November (AS-CAV 118), but before Alan’s reply is drafted, Dr Hughes writes to Alan again, with the following statement:-

“If I form the view, or if the Resource Unit forms the view, that there are any relevant documents in the possession of either party which have been deliberately or inadvertently withheld, I shall make an appropriate order for production.” (AS 120)

In relation to this statement, consider the whistleblower’s letter, of 13th October, 1994 previously discussed:-

“Circumstances and past actions of senior staff within Telecom have made it necessary to bring your attention to some very concerning facts that can no longer be ignored or dismissed.”

“We hesitate to bring the following instances to your attention but decided it was necessary as this situation is far too serious to be allowed to continue, and attempts we have made within the organisation to bring our concerns to light have fallen unheard. …”

“The management of COT customers by Rod Pollock is nothing more than an unprofessional, adversorial approach towards customers. …”

“Their general position has been to sit behind legal word and its many interpretations in so doing avoiding full disclosure of information [sic]. …”

“There are three main areas which Steve Black and his senior executives have sought to influence and manipulate:

  1. Remove or change clear information on the position of liability.
  2. Diminish the level of compensation payable to COT customers.
  3. Dismissive of breaches in relation to matters regarding customer’s Privacy.” (AS-CAV 79)

Rod Pollock and Steve Black were Telstra’s Liaison Officers in Alan’s arbitration.  The situation becomes even more fraught because Rod Pollock was in charge of the release of FOI documents during Alan and Graham’s arbitrations – a fact that probably goes a long way towards explaining why so many requested documents were never supplied!  Rod Pollock wrote to Dr Hughes, informing him Telstra had the information Alan was requesting.  What was going on between Dr Hughes and Rod Pollock to make Dr Hughes ignore this?  Why didn’t Dr Hughes order Telstra to provide this material for Alan and Graham’s Technical Advisor when he, George Close, had asked for it as part of his report preparation?

Warwick Smith’s name is handwritten on this 13th October letter to Parliament and, as the TIO, he was the administrator of my arbitration.  Alan and Graham believe that, along with AUSTEL, Warwick Smith probably received a copy of this letter.  Why where the COT claimants never alerted to the existence of this letter?  Being unaware of this accusation of unlawful acts by senior Telstra staff severely disadvantaged them in their claim attempts, and the right to have the matter addressed legally.  Was Dr Hughes also aware of this letter?

After Alan’s arbitration, he received a letter from Telstra under FOI.  This letter, arbitration number L69364/5, confirms that Dr Hughes wrote to Telstra on 30 November, 1994 stating:-

“Whilst I am prepared to grant an extension of time in the Smith arbitration, I am doing so in the hope that in the spirit of co-operation, Telecom will use its best efforts to submit its defences in Garms and Valkobi on or before the same date.”

“If Telecom is able to submit all three defences on or about the same date, I shall prevail upon the claimants to submit their replies (if any) prior to Christmas. …”

“I do not propose forwarding a copy of this letter to the claimants as I do not consider it appropriate for me to discuss any individual’s claim with other Claimants.” (AS-CAV 121)

This certainly appears to indicate that Dr Hughes was willing to grant extra time in Alan’s arbitration as a trade-off in relation to Telstra’s defence on the other two COT claimants, Garms and Valkobi, who were, like Alan, still waiting for documents so they could finalise their claims.  On the other hand, how could any of them be expected to successfully submit their replies (if any) by Christmas, when Dr Hughes knew Telstra had still not supplied the documents they needed to support their claims? Nothing adds up.

In Alan’s own case, it also seems that Dr Hughes had completely forgotten his previous letter of 21st November (see above).

Telstra’s own records of Alan’s complaints show that he was still suffering the same problems that sent him into arbitration in the first place, right through his arbitration until 1995.  How could Alan’s 15th June 1994 letter of claim be successfully investigated when the problems and faults were still prevalent on the day the arbitrator brought down his technical findings contained in his award?

Four letters the FHCA admitted to withholding from Alan during his arbitration

  1. 4th October 1994: AUSTEL’s Bruce Matthews letter to Steve Black asking questions of Mr Black regarding the discrepancies in Alan’s 008 service line and (on average) 11 per cent incorrect charging on his facsimile 267230 line. (AS-CAV 126)
  2. 11th November 1994: Ted Benjamin’s response to Bruce Matthews’ letter, noting, “Each of the questions put by you in your letter of 4 October, 1994 will be answered as part of Telecom’s defence to Mr Smith’s claims lodged under the Fast Track Arbitration (AS-CAV 127)
  3. 1st December 1994: Bruce Matthews’ letter to Ted Benjamin, stating, I note that your letter states that ‘Each of the questions put by you in your letter of 4 October 1994 will be answered as part of Telecom’s to Mr Smith’s claim lodged under the Fast Track Arbitration Procedure.’ ” (AS-CAV 128)
  4. 16th December 1994: Ted Benjamin’s letter to Dr Hughes, with the three letters (AS-CAV 126, AS-CAV 127, and AS-CAV 128) Mr Benjamin states:-

“The question has also been raised of whether discussion between yourself and Austel on the content of the claim and defence in Mr Smith’s arbitration might itself breach the confidentiality rules of the Fast Track Arbitration Procedure.”

“The simplest way forward may be for Mr Smith and Telecom and yourself to all confirm in writing that this information can be provided to Austel if this meets with your approval.” (AS-CAV 129)

Alan received none of these letters during his arbitration.

Clause 6 of the Arbitration Agreement states:-

“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.” (AS-CAV 130)

Sue Hodgkinson, FHCA, wrote to Dr Hughes, (15 MONTHS) after Alan’s arbitration, on 2nd August 1996 admitting to withholding the above letters.  This is addressed in more detail later.

5th December 1994:  Graham Schorer writes to Dr Hughes stating:-

“Telecom have knowingly violated the FOI Act and their obligations to supply myself with Telecom documents in accordance with my valid FOI applications. …

Telecom even gave an undertaking to the Chairman of Austel, Mr Robin Davey to pass on to myself and the other COT members on the 22nd November 1993 that Telecom undertook to fast track mine and the other COT members FOI applications prior to Mr Davey emphasising that Telecom were serious in withdrawing from all negotiations if I the other COT members did not sign the fast track seminar proposal by 5.00 pm Tuesday, 23rd November 1993. …

Peta of Warwick Smith’s office can substantiate that Telecom is knowingly misleading other COT members regarding Telecom supply of documents [sic].” (GS-CAV 210)

TELSRA’s FLAWED DEFENCE DOCUMENT B004

Page 26 (index)

23rd June 1994Smith reported he received a call from Canberra.  A minute after hanging up, phone received one burst of ring. Few mins later Schorer rang from 287 7099.  Said he had just called & received busy tone. Smith believes his phone takes up to 90 secs to release.”

23rd June 1994Smith reported that his 008 number service had long post dialling delays and the phone would give 1-2 bursts of ring after he finished a call.” (AS-CAV 122-A)

Page 50

“On 19th August 1994, Smith reported that the Australian Federal Police had been trying to call him from Canberra via his 008 number and got busy for 1 hour at approximately 11.10 am.” (AS-CAV 122-B)

These three examples show Telstra defending faults Alan registered AFTER he submitted his letter of claim.  The faults were not fixed and the arbitration, set up by AUSTEL to fix the phone problems and compensate the claimants, certainly failed, in Alan’s case at least.  How could the arbitrator arrive at an accurate compensation figure when it was obvious the faults were going to continue after he had finished his award?

IMPORTANT

Exhibits AS-CAV 122-C, AS-CAV 122 -D and AS-CAV 122-E are three Telstra FOI documents confirming Telstra was aware this post-dialling delay 008/1800 fault was a national RVA problem in October and November 1993 (also see exhibits AS – CAV 35 to 37).  Also, exhibit AS-CAV 122-F is a letter from AUSTEL to Telstra’s Steve Black, dated 27th January 1994 alerting him to the same type of 008 short-duration calls Alan’s customers were complaining about.  This included a Statutory Declaration provided to AUSTEL by Ms Tina Velthuyzen declaring having heard repeatedly a recorded message when ringing Alan’s 008 number.  The recorded message stated the number you are calling is not connected.  Ms Velthuyzen’s sworn testament is exhibit AS – CAV 39. Exhibit AS-CAV 122-G is a Telstra internal letter, dated 25 November 1993 stating:-

“The following is an assessment of the individual disputes highlighted by Mr Smith. From the information given, little more can be offered for explanation than ‘This is not the way it should work, we need to investigate to find the cause.’

When Frank Blount, Telstra’s CEO, left Telstra in 1996 he co-published a manuscript entitled, Managing in Australia.  On pages 132 and 133, the author exposes the problems Telstra were hiding from their 1800 customers:

___

“[A] young woman arrived in his office whom Blount learned was a bright MBA graduate with responsibility for the 1-800 product. Again, Blount recalls the conversation:

Blount:          ‘I want to talk about the 1-800 service.’

Staff:              ‘Yes sir’

Blount:          ‘There are some issues that have arisen on the product management side, specifically maintenance of the product, fixing some problems with it how it is billed.’

Staff:              ‘I know the type of things you are talking about, sir, because we studied product management in school, but, strictly speaking, my job was to launch the product. I have no way of knowing how it performs once it has been launched.’

“Blount was shocked, but his anxiety level continued to rise when he discovered this wasn’t an isolated problem. …”

“The picture that emerged made it crystal clear that performance was sub-standard.” (AS-CAV 122-I)

And here Alan was in 1994/95, in a legal nightmare with the arbitration procedure having already cost him in excess of a $200,000 dollars (to prepare his claim), and here was Telstra, Australia’s largest Corporation, hiding their knowledge and awareness regarding this 1800 problem!

Boo4 and Verification testing

Peter Gamble’s witness statement

Concerning the Service Verification Tests (SVT), Peter Gamble states, at point 38:-

“The service passed all of the Customer Specific Line Tests and the two Public Network Call Delivery Tests that were carried out.” (AS-CAV 122-H)

On 27th July 2007 Brian Hodge, B Tech, MBE; Technical Consultant, provided Alan with a Technical Report (see Appendix 1) confirming Telstra’s own CCAS data for the SVT tests do not support Mr Gamble’s Witness Statement.

Two letters (AS-CAV 106 and AS-CAV 107, mentioned previously) confirm this Statutory Declaration is very far from the truth.  Both Cathy and Alan are still willing to swear under oath that they gave one of the three technicians so many documents confirming the problems were not fixed that the young lad was aghast, and Peter Gamble, the Chief Engineer in charge, pulled the lad away in embarrassment.  Alan has already referred to the problems Peter Gamble had with trying to get the SVT equipment to function and Alan’s believes, if Telstra had re-tested his phone lines correctly, they would have discovered the faults were still evident.  As already reported, Telstra later knowingly used the results of this SVT in their defence despite AUSTEL advising them the tests were deficient.

Exhibit AS-CAV 123, a letter from AUSTEL to Peter Gamble, dated 11th October 1994 confirms the SVT (testing process) was deficient.

A 16th November 1994 letter from AUSTEL to Steve Black, confirms the Regulator wanted Mr Black to provide information as to what Telstra intended doing in regards to the deficient tests conducted at the Cape Bridgewater Holiday Camp. (AS-CAV 124).

Telstra’s 12th December 1994 defence included numerous inaccuracies and misleading Witness Statements.  The flawed defence documents are discussed throughout this Chronology, but it is important to refer to Telstra’s letter to Dr Hughes, on 23rd December 1994 which includes this statement:-

“The purpose of this letter is to update you on the status of a voluntary review that Telecom had conducted of exemptions applied to documents referrable to requests made by the above persons for access under the Freedom of Information Act.”

The names referred to were Smith, Garms and Gillan.  Eleven days after Telstra submitted their defence, they had still not provided Alan with the documents he needed.  This meant Telstra only had to defend part of the claim that Alan could have submitted if Telstra abided by the FOI Act.

20th December 1994:  Telstra’s letter to Alan, titled FOI – Internal Review, notes:-

“I refer to Telecom’s letter to you dated 16 December 1994 which was delivered with a box of documents being specific to your telephone service.”

Why did Telstra wait until after they had submitted their Defence before they provided this FOI information?

Please note: between 4th October and 16th December 1994 Telstra and AUSTEL generated enough letters between them (and copied to Dr Hughes) the devil himself would be convinced there were “forces at work” intent on stopping Telstra and Dr Hughes from addressing Alan’s billing claim documents. (AS-CAV 125)

23rd December 1994:  Questions are raised regarding Ian Joblin’s Witness Statement.

Ian Joblin was a Clinical Psychologist appointed by Telstra to ascertain the state of mind of the COT claimants.  Before he interviewed Alan, Telstra supplied him with at least one copy of the Cape Bridgewater Addendum BCI Report that they knew was flawed, but which supported their case.  As noted previously, under the Bell Canada report heading, Telstra wrote to Bell Canada about problems with this report.  If Alan had seen a copy of Telstra’s letter to Bell Canada, he would not only have had grounds to challenge the report itself, because of its numerous faults, but he could also have challenged the arbitration, and Ian Joblin’s Witness Statement.

In a letter dated 23rd December 1994 Telstra notified Dr Hughes they had supplied Mr Joblin with “1AJ-I”, before he assessed the state of Alan’s mental health.  Further Telstra evidence has since been provided to the Australian Government and AFP in support of this.  According to Mr Joblin’s Witness Statement, he also received “IAJ-2” as well.  In this letter, Telstra writes:-

“I note that the copy in Telecom’s set of defence documents is signed and complete and cannot understand how an unsigned copy went to you.” (AS-CAV 144)

Question:

Why didn’t the Arbitrator or Administrator correctly investigate the illegal act of a Witness Statement being submitted during an arbitration process when it was only signed by Telstra’s solicitor, and not Ian Joblin, the witness?

FOI Documents withheld until after Telstra submitted their defence

24th December 1994:  After Telstra submits their arbitration defence, Alan receives three Telstra FOI document, C04006, C04007 and C04008, confirming Telstra was aware of these previous problems (AS – CAV 5).  Even though Alan attaches these documents to his reply to Telstra, it appears the TIO-appointed Technical Consultants, DMR and Lane, did not receive them.

It is most important to recap below, the devastation these problems caused Alan and his then-partner, Karen Gladman.

Not long after Karen moved in, it became blatantly obvious the phone problems were not fixed by the installation of the new exchange.  People were still reporting:-

  • they couldn’t get through to the camp on the phone and that either the line rang as if they weren’t there, and the answering machine didn’t pick up; or
  • they received a constantly engaged signal.

Many were reporting reaching the recorded message (RVA) stating that the phone line was not connected.  Telstra FOI document C04006 acknowledges the RVA was often heard if lines into Cape Bridgewater were congested.  Why were Karen and Alan told this was NOT a problem?

In January 1992, aware the phone problems were not resolved, in an attempt to battle on Alan and Karen decided to contact various over-40s singles clubs, by mail and personal visits, to entice them to visit Cape Bridgewater on weekends for social gatherings with other similar clubs.

Alan personally visited clubs such as “the Australian Singles Centre” in Hartwell, “Phoenix Singles” in Camberwell, “Frenze” in Box Hill, “Capers” in the City of Knox and “Partners in Dining” @ Warrnambool.  After each visit, Alan heard, from at least one (and sometimes three or four people), stories about the numerous problems they encountered in trying to secure a booking or make an enquiry of their business by telephone.

The RVA stating: “The number you are calling is not connected,” was, in Alan’s opinion, the most insidious and damaging of all the faults.  Telstra’s Senior Management agreed with Alan on this one!  Telstra FOI documents A03544 and C00757 confirm their concerns regarding the RVA fault. Document C00757, written on 3 November 1993 states the words of this RVA message needs to change as this message tends to give the caller the impression that the business they are calling has ceased trading, and they should try another trader”. (AS – CAV 6)

The correspondence discussed for the dates of 4th October and 11th November 1994 confirms callers were still hearing the RVA faults at the holiday camp as late at May 1994, one month into Alan’s arbitration and five years after Telstra acknowledged this was a major network fault.  Telstra file notes, dated 16 January 1998 confirm this issue and are held in Government archives.

28th December 1994:  Alan faxes two letters to Dr Hughes asking for access to all CCS7 and CCAS data, including all the Bell Canada working notes for the tests at Cape Bridgewater on 5th, 8th and 9th November 1993, because he is concerned Telstra misled the arbitration process with this report.  Alan concludes this letter saying:-

“This information sought by the Cape Bridgewater Holiday Camp, is vital to assess Telecom’s defence of their Network during the Bell Canada testing period.” (AS-CAV 131)

Dr Hughes faxes Alan’s letters to Ted Benjamin noting:-

“As you are aware, I have the power under clause 7.6 of the Fast-Track Arbitration Procedure to order the production of documentation.” (AS-CAV 132)

At no time, during Alan’s arbitration, did Dr Hughes execute this power.

Late delivery of FOI documents

6th January 1995:  Alan again asks Dr Hughes to access numerous documentation from Telstra so Alan can respond to their defence. Alan states the information is needed “to substantiate incorrect details as presented in Telecom’s Defence Documents”.

Alan received no reply because, as he discovered on 12th January, Dr Hughes was away on holiday and there was no one in his office who would help Alan regarding an extension of time to submit his reply to Telstra’s defence.  Alan states in the postscript:-

“I am now disadvantaged even further. It is the 6th January, 1995, and still my own Resource Team have not been provided with Telecom’s defence on disk.” (AS-CAV 133)

Alan had only one month after Telstra’s submission of their Defence, on 12th December, to prepare and lodge his reply.  Of course, this was the busiest time of the year for Alan’s business.  To make the situation even worse, Telstra released 24,000 FOI documents that Alan received on 24th December.  Was this time line pre-planned to cause him the most possible trouble in preparing his reply?  Did Telstra plan to dump all these documents on Alan at his busiest time AND while the arbitrator was away on holidays?  Did Telstra deliberately use the two-week Christmas legal fraternity shut down for lawyers for this document dump?

And so, under enormous stress, Alan, without access to the arbitrator, began to sort through all these documents in the hope that he would find something to help him with the preparation of his reply – which he finally managed to lodge on 20th January 1995 incomplete.

13th January 1995:  Ted Benjamin writes to Dr Hughes:-

I refer to your letter dated 27 (sic) December 1994 enclosing a copy of a letter dated 28 December 1994 from Mr Smith. …”

Mr Smith has now requested CCAS and CCS7 call statistics for the dates 5 November, 8 November and 9 November 1993. Telecom has not denied Mr Smith access to these documents but is unable to provide documents which do not, as far as I am aware, exist for the specific dates requested by Mr Smith.” (AS-CAV 134)

The BCI report, used by Telstra as defence material and provided to the Resource Unit by the arbitrator as arbitration library material, states they used the CCS7 data at Cape Bridgewater RCM to trap the tests calls generated on 4, 5, 6, 8 and 9 November 1993.  It has now been confirmed by Brian Hodge, B Tech, MBA, in his Report dated 27th July 2007 that the RCM system could never have facilitated the CCS7 data which the BCI Report states captured the 13,000 successful tests generated to Cape Bridgewater.  Brian Hodge provided a detailed report: see Alan Smith CAV Relevant Information file exhibit 12.

Therefore, Ted Benjamin was correct when he stated the CCS7 data for those dates did not exist.  Which exchange received these alleged 13,000 BCI tests?

On 26th May, 1995 two weeks after Dr Hughes brought down his award, Telstra supplied Alan with FOI documents numbered N00005, N00006 and N00037.  These documents confirm Telstra knew, as early as 23rd August 1994 (three months before they submitted the BCI tests as Defence material), that at least one day’s testing was impracticable (AS-CAV 135 and AS-CAV 136).  Brian Hodges’ Report confirms NONE of the five tests could have been generated through the CCS7 equipment.

TF 200 report

The TF 200 report was one of the main documents submitted by Telstra in their Defence.  It refers to the same EXICOM TF200 problem originally raised with Cliff Mathieson of AUSTEL, on 26th April, 1994 and which Alan referred to previously as-CAV 71 to 74.  Mr Mathieson believed the fault was in the RCM exchange at Cape Bridgewater.

Telstra’s Peter Gamble tested Alan’s TF200 at his Melbourne office on 26th April and, after testing the phone, reported he believed a heat build-up in the unmanned Cape Bridgewater RCM was causing the problem. (AS-CAV 71) and (AS-CAV 72) also support this theory.

Telstra fault records, FOI R37911, show Ross Anderson, a Portland Telstra technician, collected the EXICOM phone on 27th April and used it to make 18 test calls, without encountering any lock-up faults at all (AS-CAV 73).  Mr Anderson then forwarded the phone to Telstra’s laboratories for further testing.  Amazingly, the phone took nine days to reach the laboratory, arriving on 6th May and waiting another four days before laboratory testing commenced.  The report included a number of photos of the dissected phone and stated the phone arrived at the laboratory in a very dirty condition and contained a sticky substance.

The laboratory staff concluded beer in the phone had caused the lock-up faults, which, remember, Ross Anderson was unable to find on the day he took the phone from Alan’s premises).  The full 29-page TF200 report is attached to the Ted Benjamin file Appendix 32.

This B004 report uses part of the TF200 report as Defence material. Pages 68 and 69 of Telstra’s main B004 arbitration report, state:-

“A brown sticky liquid substance which contained chemicals typically found in beer was found in the T200. This was causing the switch hook mechanism in the T200 to lock up. It is the customer’s responsibility to ensure that foreign substances are not introduced into their CPE (reference document to 4.02 which includes a detailed report of analysis of T200 which is also known as a TF200.” (AS-CAV 137 and AS-CAV 138)

After Alan received this report, he asked Dr Hughes to access, on his behalf, all the laboratory working-notes from Telstra, so Alan could discover how the laboratory technical staff arrived at their conclusion.  On 3rd March 1995, Alan wrote again with the same question.  On 12th April 1995 Telstra gave Dr Hughes another copy of the original completed report that they had already submitted in their Defence.  On 17th April 1995 Alan wrote to Dr Hughes yet again, expressing his disgust at the 35 days it took Telstra to supply the wrong document, and saying:-

“I believed, when I asked the Arbitration Process to access, from Telecom, all written, original notes regarding the TF 200 (267 230), that this would include all original report notes and the contents of the TF 200 report, however, all I received from your office, by courier, was a copy of the report, in printed form, which had already been viewed in Telecom’s Defence documents.”

TF200 saga continues

On 28th November 1995 six months after Dr Hughes deliberated on Alan’s claim, Telstra finally sent some of the laboratory working notes and graphs, under FOI.  One file note, FOI A64535, dated 26th May 1995 confirms Telstra twice tested a TF 200 by pouring beer into it and leaving it overnight.  The note recorded the beer had dried out within 24 hours.  The second set of tests states the beer dried out within 48 hours. Since Alan’s TF 200 was removed from his premises 13 days before it was tested, hence the ‘beer’ residue is clearly suspect.

The Ted Benjamin Appendix 32 file confirms many discrepancies in Telstra’s TF200 Defence Report.  These documents alone, if supplied during Alan’s arbitration, would have been enough evidence to initiate an investigation by the Arbitration Technical Resource Unit.  Even the graphs show a wet substance of a high level, tested on the 25th, was almost dry by the 26th.  Yet, Telstra only submitted their first manufactured report to the arbitration, alleging the fault was caused by beer while knowing the time frame between uplifting the phone from Alan’s premises to testing at the laboratory means this is impossible.

A brief summary before we get back to January 1995

  1. Brian Hodge, Technical Consultant, declared the BCI report, used in Alan’s arbitration as defence and library material, is fundamentally flawed.
  2. AUSTEL and Brian Hodge both declared the SVT process, conducted at Alan’s premises, on 29th September 1994 was deficient.
  3. Telstra’s late-received laboratory working notes for the TF200 investigation do not coincide with Telstra’s TF200 Arbitration Report.

25th January 1995:  Alan writes to Dr Hughes providing accompanying material confirming his 008/1800 account shows Telstra has a billing software problem in their network at least up and until 13th January 1995 – four months after Telstra submitted the deficient SVT tests. (AS-CAV 139)

30th January 1994:  Alan again writes to Dr Hughes, explaining many alarming facts and noting:-

“A ruling regarding information associated with the Defence Documents being presented in this manner must be addressed. I had no intention of drip feeding information to the Arbitration Dr Hughes, once my final Submission had been completed.”

“It is now thirteen months since the first of four FOI applications was presented to Telstra and yet, even after all this time, Telecom have not supplied the material sought: NNI documentation, technician’s diary notes, ELMI raw data, CCS7, CCAS and EOS data and voice monitoring fault records. Very little of this information has been supplied under the Arbitration Procedure.” (AS-CAV 146)

Alan also writes to John Wynack, Director of Investigations at the Commonwealth Ombudsman’s Office, noting:-

“Even at this late date, Telecom are still withholding documents requested under my FOI applications.” (AS-CAV 148)

In this same letter, Alan details other inaccuracies being reported by Telstra. For example, in regard to Commonwealth Ombudsman officer, Ms Jill Cardiff:-

“Telecom states that on 2/10/92 a faulty register was found and fixed five days later. This is again incorrect. The fault was detected on the 2/9/92 and fixed some 35 days later.…”

“We have faults down-played on the 2/9/92 by 30 days, we have deceptive and misleading statements to Ms Jill Cardiff, and now also to Ms Fay Hothuzen [sic].  It appears that Telecom will stop at nothing, just to starve C.O.T. and its members from gaining the truth.”

1st February 1994:  Dr Hughes writes to Ted Benjamin re Alan’s 30th January letter:-

“I enclose copy letter received from the claimant dated 30 January 1995.”

“…I have the right to request that information and, if necessary, issue a subpoena.”

“I emphasise I have not formed any view of the matters raised in the claimant’s letter of 30 January 1995.” (AS-CAV 146)

15th February 1995:  Alan’s letter to Dr Hughes again raises the SVT problems, noting:-

“My previous letters to you in January 22nd and 26th also confirmed we were still experiencing problems with our service lines.”

“As you are aware the verification testing was prepared in consultation with Austel and was to form the basis for determining whether the CoT cases individual telephones service was operating satisfactory at the time of our arbitration. Out previous statutory declarations confirmed the testing was not conducted as they should have under the agreed testing process.” (AS-CAV 140)

16th February 1995:  Any reasonable person would have to conclude, after reading Graham Schorer’s letter of 5th December 1994 and his letter to Dr Hughes (GS-CAV 211), there was something radically wrong with the way the arbitration procedure was conducted.  Even a non-legal-minded person would conclude there were forces at work, beyond the Arbitrator’s reasonable control, that interfered with the arbitration process.  Why did Dr Hughes ignore all these signs?  As shown below, Dr Hughes, Warwick Smith and Peter Bartlett, also ignored John Rundell’s letter, dated 18th April 1995 warning them all there were forces at work that delayed the arbitration process. Did they act on this information or the information shown in Graham’s letter?  NO.

21st February 1995:  Sussan Hodgkinson, of FHCA, visits Cape Bridgewater.  Alan and Cathy provide Ms Hodgkinson with a number of documents proving the business is much more than just a school holiday camp.  Alan has never seen this information again, not even after FHCA supposedly returned all of Alan’s submitted arbitration material.

2nd March 1995:  Graham writes jointly to Telstra’s Joy Geary, Steve Black and Paul Haar, regarding the non-supply of the Bell Canada FOI information, including numerous complaints associated with the non-supply of further relevant FOI documents. (GS-CAV 212)

3rd March 1995: Alan writes to Dr Hughes, attacking the TF200 report:-

“I believe, as I have already stated in my reply to Telecom’s Defence Documents, that Telecom must show not only the phone and original photos taken of the phone when it was given to the laboratories, but also all evidence used by the laboratories to derive this information.” (AS-CAV 141)

Point 5.8 (a) in the Arbitrator’s Final Award is titled Faults Caused by Claimant.

The author states, “A simple example is said to involve the claimant leaving the phone off the hook.” (AS-CAV 143).

Why was the issue of a spilt liquid removed from the final award?  Did the author or Dr Hughes secretly investigate the TF200 report issue and discover the report was manufactured?  (By viewing many statements in Alan’s and other COT cases’ awards, it appears there was more than just Dr Hughes making the findings.)

7th March 1995:  Ted Benjamin responds to Graham’s letter of 2nd March, noting:-

“I refer to your letter 2 March 1995 in which you state that Telecom has omitted to discover and supply raw data and summary reports that Telecom compiled on diskette and the working papers of the Telecom technicians associated with the monitoring testing programme being:-

  • The monitoring testing preformed [sic] by Telecom in accordance with Austel directive;
  • The monitoring and testing programme performed by Telecom technicians under the directives of Bell Canada International that became the first of the Bell Canada Reports produced in November 1993.”…

“On 22 February 1995 a set of data disks that Telecom had sought … were received. … We are currently arranging for them to be converted to DOS and once the data has been checked for privacy implications, (some of the files do not relate specifically to you or to the other 6 signatories of COT’s Shared Access Agreement), they will be forwarded to you.” (GS-CAV 213)

17th March 1995:-  The Australian Senate writes to Graham Schorer.  Under the heading of “Telecommunications (Interception) Amendment Bill 1994”, it states:-

“Thank you for agreeing to participate in the Committee’s hearing on 21 March in Canberra. …”

“The Committee members who will be attending on the day will be Senators Cooney (Chair), Spindler (Deputy Chair), Ellison, Evans, Vanstone, McKieran and O’Chee.”

“The hearings are conducted with minimum formality. Witnesses are usually grouped in blocs although we suggest that you be available at the commencement of the hearing. You may wish to give some consideration to making a brief statement, 10 – 15 minutes …” (GS-CAV 214)

Alan Smith, Graham Schorer, Ann Garms and Robert Bray (from Ballarat) all spoke at this hearing and all introduced documents to support their claims that Telstra voice monitored their phone lines.

Before Alan left Melbourne to go to Canberra for this hearing, he phoned Warwick Smith regarding the evidence Alan obtained from AUSTEL, Telstra and the Australian Federal Police, and passed onto Dr Hughes and the TIO’s office, regarding Telstra’s interception of Alan’s phone conversations.  Alan called the TIO because he was concerned his appearance before the Senate Committee Hearing might interfere with the arbitration process, particularly regarding the phone interception matters. Warwick Smith assured Alan his arbitration interception issues were confidential, but stressed it was important to provide the evidence to the Senate Committee as well.

Not long after this conversation, Alan and Warwick Smith had a chance meeting at Tullamarine airport, and these same interception issues were discussed again.  At this point the TIO told Alan that, before his appointment as administrator of the COT arbitrations, the TIO believed the COT claimants, including Graham Schorer, were paranoid in their belief they were all under surveillance or being voice monitored, but since he had seen the evidence going through his office he had changed his mind.  This comment is interesting, because it shows the evidence the COT claimants were supplying was convincing, but it also raises the question of who, within the TIO’s office, was reading and vetting the claim material before it was passed on to the arbitrator?  More importantly, is this question of the TIO’s office possibly vetting interception documents relating to the letter Steve Black wrote to Warwick Smith on 11th July, 1994 which acknowledges Telstra was to submit material to the Resource Unit, who would decide, whether the material was relevant for Telstra to pass to the arbitrator (see GS-CAV 201)

In Sussan Hodgkinson’s letter to Dr Hughes on 2nd August 1996 (discussed later), she states:-

“At the time of the letter from Austel, Mr Smith’s telephone problems were being addressed in the Arbitration. Due to a number of factors including confidentiality, it was felt not appropriate to answer Austel’s comments in detail, in particular the issue was under consideration in the Arbitration, As agreed the Resource Unit did not respond to the Austel letter.” (AS-CAV 220)

However, what Ms Hodgkinson does not reveal in this letter, is the FHCA opened another letter addressed to him, this time from Telstra dated 16th December 1994 which had multiple attachments for him to assess as part of Alan Smith’s arbitration.  In other words, while Ms Hodgkinson was assessing Graham Schorer’s arbitration issues during August 1996, she was also misinforming Dr Hughes about the 16th December 1994 letter.

24th March 1995:  It is important to point out the following issues showing that Alan’s phone interception issues were not addressed during his arbitration and, although Graham Schorer’s phone interception issues were briefly discussed in the CAV LGE Telephone Interception LGE target documents, the following issues were not being covered in any detail:-

  • From February to September 1994, the Australian Federal Police interviewed Graham and Alan a number of times regarding the alleged illegal interception of their telephone conversations.
  • Warwick Smith and Peter Bartlett agreed that, under the Arbitration Agreement, the claimants could submit their interception issues to the arbitrator, as part of their claims.
  • Evidence included in Alan Smith’s CAV LGE Telephone Interception target documents (see attached) confirm Telstra wrote to Warwick Smith, on 17th October, 1994 agreeing to address the voice monitoring issues raised by Alan Smith in his arbitration claim, as part of Telstra’s defence of Alan’s claim.
  • On 10th November, 1994 Dr Hughes wrote to Graham Schorer notifying him that Telstra agreed to address his allegations of phone interception as part of Telstra’s defence of Graham’s arbitration claim.
  • Telstra did not address the phone interception issues, in either Alan Smith’s nor Graham Schorer’s arbitrations.
  • The Commonwealth Ombudsman’s office confirmed Telstra were defective in their supply of FOI documents during Graham Schorer and Alan Smith’s arbitrations and Telstra FOI schedules confirm Telstra withheld interception information from Alan under Legal Professional Privilege (LPP). The Commonwealth Ombudsman’s Office and the Senate Working Party agreed Telstra were defective in their supply of FOI documents during Graham Schorer’s arbitration and Telstra FOI schedules confirm that Telstra withheld numerous non-legal and privacy related documents from Graham, also under LPP.
  • On 24th March 1995 Warwick Smith stated publicly:- I have been asked to enquire as to whether or not there has been a breach of internal privacy arrangements by Telecom” and he had “conducted interviews with Telecom employees”, but he had “yet to conclude that enquiry”.

It would be reasonable to assume that, while the Australian Federal Police (AFP) were investigating the COT interception issues, they might have discussed some of these matters with Warwick Smith.  Although clearly, they would have limited this to matters relevant to Warwick Smith as the administrator of the COT arbitrations.  It is most unlikely the AFP investigators would have allowed or instructed Warwick Smith to interview Telecom employees regarding these same interception issues, as that would have cut across the AFP investigations.

In his public statement of 24th March, Warwick Smith also stated:-

“There are still matters of concern. The recent decision by the director of Public prosecutions not to proceed with a prosecution, following an Australian Federal Police investigation into voice monitoring issues raises questions which have already been canvassed elsewhere and are not appropriate for me to discuss.”

Warwick Smith’s public statement, regarding being asked to “enquire as to whether or not there has been a breach of internal privacy arrangements by Telecom”, indicates he was investigating the interception issues as the administrator of Alan and Graham’s arbitrations.  However, he did not consult Alan or Graham’s Arbitration Technical Advisors nor provide either Alan or Graham with an opportunity to challenge (as was their right) any statements made by Telstra’s employees.  This indicates Warwick Smith took it upon himself to interview Telstra employees regarding interception matters and therefore, this part of the arbitration process was conducted in camera by the administrator (and, it also now seems, by the arbitrator too), without allowing the claimants their legal right to challenge the information Telstra provided to the administrator, even though the transparency process in the Arbitration Agreement provided the claimants with a right to challenge evidence submitted by the defendant.

Warwick Smith’s public statement re “I am yet to conclude that enquiry” confirms the TIO’s office would have on record a report regarding the interception issues the four original COT claimants raised with him and the arbitrator, as part of their arbitration claims.  Such a report should have been provided to the COT claimants and the arbitrator during their respective arbitrations.  Graham and Alan are entitled to a copy of this report since they both raised these interception issues during the TIO-administered arbitration process.

It is also important to point out that, while the AFP was officially investigating the COT interception issues, both Graham and Alan were expected to provide information to the AFP and the arbitration, at the same time, which leads to the question of how any layperson could be expected to carry out such complex tasks?  Telstra was also working with the AFP on the same matters the arbitration administrator, Warwick Smith, was secretly investigating (see Alan Smith – CAV Relevant Information file).

30th March 1995, Sue Hodgkinson reports to Warwick Smith

This report by Sue Hodgkinson of FHCA, to Warwick Smith, TIO, confirms Warwick Smith and his Resource Unit were fully aware Alan did not receive the bulk of his requested FOI documents until two weeks after Telstra submitted their Defence.  In this letter, Ms Hodgkinson states:-

“Alan Smith … has included volumes of documents and the direct relevance of all this information is difficult to ascertain. Nonetheless, Smith has gone to a lot of trouble to assemble his FOI information which, as you may be aware, was not provided in full by Telecom until 23rd December 1994. …

  • Smiths [sic] claim was formally certified as complete in November 1994. …
  • On 13 December 1994, Telecom delivered its defence to the Arbitrator.
  • Smith has stated verbally to myself that, on 23 December 1994, he received 90 kilograms of FOI material. As his claim was ‘finalised’, he did not have the ability to examine these documents and add to his claim.” (AS-CAV 103)

With regard to Ms Hodgkinson’s difficulty in understanding the relevance of the material Alan submitted, these were highly technical documents that were presented to him by Telstra, (in apparently unrelated batches).  Many documents didn’t even arrive until long after Alan had submitted his claim.  It is actually amazing that he managed to make any sense out of them at all!

That Alan’s claim was certified as complete in November 1994 is correct, according to the Resource Unit.  This means that the attachments Alan later forwarded to Dr Hughes were never addressed.

The last point made here by Ms Hodgkinson, regarding the weight of the documents delivered to Alan on 23rd December 1994 is also correct:  Alan was aware of the weight because they were delivered to him by air-freight; however, her comment regarding his ‘ability’ to assess the documents is not completely accurate.  Alan recalls asking her how the arbitrator could expect any claimant to look through all this information in the 11 days he had left to reply to Telstra’s Defence of his claim.  Part of Alan’s assessment process would have had to include the revision of documents provided in separate batches that were delivered in February, May, July, August, September and November 1994.  It was like an enormous jigsaw puzzle: worse, it was like an enormous jigsaw puzzle without any defined edges!

Furthermore, these documents often turned out to contradict each other, as the following example illustrates:-

Telstra stated, in their B004 Defence Report, on page 25, that a lightning strike on 21/11/92 damaged RCM equipment and the fault lasted four days (AS-CAV 149).

DMR and Lanes’ Technical Evaluation Report agrees with this, on page 23 where, under the heading “RCM 1 Failure due to lightning strike 21st November 1992 Affected Service for Four Days”, is stated at point 2.8:-

“A lightning strike on 21st November damaged the Cape Bridgewater RCM equipment:  Telecom received 22 customer complaints from CB customers for No dial tone, No ring received, noisy.  No complaint was identified from CBHC, however RCM 1 was affected and this was the unit CBHC services were on.  The condition affected services for 4 days, before restorative action was taken, which may have been less than successful…” (AS-CAV 150)

After Alan had lodged his interim Letter of Claim, he received Telstra FOI document K01173, which paints an entirely different picture, confirming that, contrary to the two reports above, he DID report this fault.  K01173 is dated 9th February 1993 and states:-

“I contacted Don Bloomfield (Portland Customer ops) to discuss Alan Smiths [sic] problems. It is his opinion, and this is supported by data retrieved from OPAS, that there were problems in the RCM caused by a Lightening [sic] strike to a bearer in late November. these problems (damaged PCB’s etc) appeared to be resolved by late January…” (AS-CAV 151)

On page 33 in the Arbitrator’s Award, Dr Hughes goes one step further.  He states:-

“damage was caused to Cape Bridgewater RCM equipment by a lightning strike on 21 November 1992, resulting in a variety of complaints which affected services for 4 days before restorative action was taken. The restorative action ‘may have been less than successful’… (AS-CAV 152)

This shows that, at least in this instance, Telstra provided incorrect information that not only affected the Arbitrator’s decision but also swayed the Technical Resource Unit into believing a long-standing problem only existed for four days, instead of 60 or more days.

In the Dr Hughes CAV Target page 44, Alan shows, at point 3, another startling downplaying of the actual faults affecting his business, due to the incorrect information supplied by Telstra in their defence. He states:-

“At point 2.23, headed ‘Calls Directed to RVA, March 1992’, Mr Read only uses Telstra’s defence figures. If he had read the AUSTEL information, or my fault material, Mr Read would have seen that this fault lasted for eight months and not the 16 days he reported. This particular MELU exchange fault is discussed more in Exhibit 9 of the Benjamin file.”

Some of the information supporting this MELU fault is available at exhibits (AS – CAV 12) and (AS – CAV 13).  Page 21 of the DMR and Lane findings, states this MELU fault lasted “for at least 16 days and possibly longer” (AS-CAV 153).  On page 32 of the Arbitrator’s Award, states this fault lasted for 16 days and possibly longer (AS-CAV 154).

In Telstra’s Arbitration Defence and in the DMR and Lanes Report they acknowledge this MELU RVA, the recorded message saying the number you have called is not connected, was fixed on 16th March 1992.  The cutover from the old RAX to the RCM was in August 1991.  Therefore the fault had lasted between 7 and 8 months, NOT 16 days.

Alan tried to explain this kind of problem, and the disadvantages that came with it, to Ms Hodgkinson.

The downplaying of the MELU fault could have been avoided as this information was submitted in Alan’s claim.  Unfortunately for Alan, during the FHCA vetting process, they decided this part of Alan’s submission to DMR and Lanes was irrelevant to Alan’s overall claim.  Remember, Warwick Smith and Steve Black saw nothing wrong in allowing FHCA to view this type of material and judge its worth or relevance, before supplying it to the arbitrator! (AS-CAV 590)

Telstra also acknowledged that, in 1991 and 1992, between 33 and 50 per cent of all metropolitan calls from Melbourne to Cape Bridgewater went through the MELU route.  Alan believes any reasonably minded person would conclude that the recorded message, telling prospective clients for seven to eight months that the number they dialled was not connected, would have far more reaching repercussions than if the massage lasted for only 16 days.

David Read’s controversial visit to Cape Bridgewater

6th April 1995:  Due to David Read’s previous involvement with Telstra Management (Alan and Graham were led to believe at the time he had been a Telstra employee for some 20 years), the COT cases argued that Lanes should not have been assessing their matters.  Warwick Smith compromised on their involvement, agreeing that Lanes would only assist DMR Group (Canada), who would be the Principal Technical Consultants.  Warwick Smith’s letter of 9th March 1995 further confirms this (AS-CAV 161).  However, suffice to say, while he was in Cape Bridgewater, Mr Read did not make one visit to assess the phone configuration Alan complained of, regarding the incoming lines to the Camp Kiosk and the extension line to his office.

It is well documented that Alan continued to complain about phone and fax problems throughout his arbitration, and after, including complaints to local technicians where Alan enquired about the phone alarm system, and associated wiring, which was installed by Telstra during ELMI monitoring of his service lines in 1991/2.  Although Alan asked Mr Read to look at this wiring and some of the evidence he had which proved incorrect billing on all his phone lines, Mr Read made it quite clear Dr Hughes ordered him not to look at any new evidence during his site visits.  Dr Hughes later confirmed these orders in a letter to Laurie James, President of the Institute of Arbitrators (AS-CAV 157).  Mr Read did relent and peruse one of the examples Alan had showing two calls to Alan’s 800/1800 service on 13th January 1995 that was wrongly charged to his account by Telstra.

Mr Read insisted he only had limited time before he flew out of Portland that evening. Here Alan was, still in an arbitration process that had been dragging on for 18 months, from 23rd November 1993, and the Technical Resource Unit, appointed by the TIO, couldn’t spend three or four hours investigating the wiring at Alan’s premises??  Mr Read wouldn’t even make half a dozen test phone calls to his 008/1800 line, or the gold phone customer service line, to see if Alan’s continuing complaints about the poor service were valid.  Was his reluctance to investigate the equipment installed and supplied by Telstra due to the deficient Verification Tests that Telstra unlawfully used in their defence?  At the conclusion of his visit, Alan was astounded to see Mr Read drive off with Peter Gamble, Telstra’s Arbitration Technical Engineer, who had also attended the meeting with Mr Read.

A newspaper article in the Portland newspaper on 8th November 2002 reported the new owner of the Holiday Camp, Darren Lewis said he had experienced several problems with the phone and fax service since taking over the Cape Bridgewater Holiday Camp (AS-CAV 167).  The significance of raising a 2002 issue here is that the following exhibit relates to a TIO letter, dated 28th January 2003, describing that since Telstra rewired Mr Lewis’ business “the phone problems have decreased dramatically” (AS-CAV 168).  Had David Read inspected the same wiring when he was asked on 6th April 1995, he would no doubt have condemned the wiring and had it replaced under the umbrella of the arbitration process.

12th April, 1995:  Ted Benjamin writes to Dr Hughes regarding the TF200.

“I refer to your facsimile of 7 March 1995 and the attached facsimile of the letter of 3 March 1995 from Mr Smith. …”

“I advise that Telecom is prepared to make available the further data being sought by the Claimant. …”

“A copy of the Technical Report is enclosed.”

Please note:  it took over a month for Telstra to respond to a simple request for Further and Better Particulars, and when they did finally respond they provided a replica of the information they had already provided in their Defence on 12th December 1994. (AS-CAV 158)

Ted Benjamin writes to Dr Hughes

13th April 1995:  This letter is in response to the letter from David Read of Lane Telecommunications dated 31st March 1995.  Please note Ted Benjamin states:-

“Attached is a copy of a facsimile from Peter Gamble of Telecom to David Read of the Resource Unit dated 31 March 1995.  It is being made available to you for your information and in case you consider Mr Smith should be provided with a copy.”

This letter, dated 31 March (AS-CAV 156), confirms David Read contacted Peter Gamble and discussed relevant technical issues concerning the increase of Call Line Identification (CL) at the Warrnambool AXE exchange during March 1993.  What discussions followed between Mr Gamble and Mr Read after this telephone conversation, and what information was provided regarding the Warrnambool AXE exchange CL issue? What other information did Mr Gamble provide Mr Read?  Was it information similar to the MELU or TF200 issues?  How many other private telephone conversations occurred in this fashion, discussing technical issues that neither Alan’s Technical Advisor, George Close nor Alan were privy to?

On 16th February 1996, Dr Hughes wrote to the president of the Institute of Arbitrators, Laurie James. Dr Hughes stated:-

“Mr Smith’s assertion on page 4 that a technical expert, Mr Read, refused to discuss technical information at his premises on 6 April 1995 is correct – in this regard, Mr Read was acting in accordance with his interpretation of my direction which prohibited him from speaking to one party in the absence of the other party at any site visit.” (AS-CAV 157)

17th April 1995:  Alan provides evidence to Dr Hughes and copies to Ted Benjamin:-

“I refer to Mr Benjamin’s letter of 12th April 1995, addressed to Dr Gordon Hughes, points 1 and 2.”

“I believed when I asked the Arbitration Procedure to access, from Telecom, all written, original notes regarding the TF200 (267 230) that this would include all original report notes and the contents of the TF200 report, however, all I received from your office, by courier, was a copy of the report, in printed form, which had already been viewed in Telecom’s Defence documents.” (AS-CAV 159)

The attachments accompanying Alan’s letter to Dr Hughes probably swayed the author of the Arbitrator’s Award (AS-CAV 142) to remove the segment “damaging the equipment by spilling a liquid into it”.  Of course, no one in Alan’s office spilt any sought of liquid into the TF200 and beer does not form a sticky liquid as Alan’s testing has proved.  Alan’s tests also confirm beer in a vessel (Alan used a TF200) dries within a very short period of two days.  Telstra had Alan’s TF200 from 27th April 1994 and it was not provided to the laboratory until 10th May 1994. Why did Telstra wait 15 days before sending the TF200 to its laboratory?

18th April 1995:  John Rundell (FHCA) writes to Warwick Smith.  Alan did not receive this until 2001, under the TIO Privacy Policy Act.  This document advises:-

“Paul Howell, Director of DMR Inc. Canada arrived in Australia on 13 April 1995 and worked over Easter Holiday period, particularly on the Smith claim. Any technical report prepared in draft by Lanes will be signed off and appear on the letterhead of DMR Inc.” (AS-CAV 160)

This letter is relevant for the following points:

  • DMR (Australia) signed an agreement with TIO Warwick Smith in April 1994 (as displayed in the arbitration agreement) to act as the independent Arbitration Technical Resource Unit.
  • On March 9, 1995 Warwick Smith advised Alan that DMR Australia was unavailable to provide locally based technical assistance and confirms Paul Howell of DMR Canada was appointed as the Principal Technical Advisor to the Resource Unit. Lane, based in Adelaide, would assist Mr Howell.  “Could you please confirm with me in writing that you have no objection to this appointment so the matter can proceed forthwith.” (AS-CAV 161).
  • Please note: the 18 April 1995 statement by Mr Rundell confirms he was prepared to transfer Lane’s technical findings onto the letterhead of DMR Canada as a guise that Mr Howell prepared the Final Report.
  • AS-CAV 162 confirms Mr Howell, on 21st March 1995, only received three of Alan’s 22 submitted claim documents along with Telstra’s Defence.
  • AS-CAV 163 confirms FHCA advised Mr Howell, on 5th April 1995 that David Read would have his draft Technical Report prepared by 7th April 1995.
  • Dr Hughes’ Draft Award, on page 3 at (i) and (j), states:-

“pursuant to paragraph 8 of the arbitration agreement, I had power to require a ‘Resource Unit’, comprising Ferrier Hodgson, Charted Accountants, and DMR Group Australia Pty Ltd, to conduct such inquiries or research as I saw fit;”

“on 21 February 1995, by which time I was satisfied that the submission of all relevant material by both parties was complete, I instructed Ferrier Hodgson (and, through them, DMR) to conduct certain inquiries on my behalf …”
(AS-CAV 164).

However, Dr Hughes’ final award states, at (i) and (j):-

“pursuant to paragraph 8 of the arbitration agreement, I had power to require a ‘Resource Unit’ comprising Ferrier Hodgson, Charted Accountants, and DMR Group Australia Pty Ltd, to conduct such inquiries or research as I saw fit. By consent of the parties, the role of DMR Group Australia Pty Ltd was subsequently performed jointly by DMR Group Inc. and Lane Telecommunications Pty Ltd;”

“on 21 February 1995, by which time I was satisfied that the submission of all relevant material by both parties was complete, I instructed the Resource Unit to conduct certain inquiries on my behalf …” (AS-CAV 165).

In summary, AS-CAV 160 to AS-CAV 165 show:-

  1. Paul Howell didn’t receive the Technical Claim and Defence Material until 21st March 1995. (AS-CAV 162)
  2. Paul Howell and David Read weren’t officially appointed by the TIO until 9th March 1995 and/or officially accepted by Letter of Consent (AS-CAV 161).

All the technical findings, in both the Draft and Final Awards (except for the removal of the alleged liquid spillage segment), are the same.  However, in the Draft Award, the author states he called on DMR Group Australia Pty Ltd to conduct inquiries (who were sacked prior to 21st February 1995 for conflict of interests).  As DMR Canada was not appointed as a replacement until 9th March 1995 and didn’t receive the Technical Claim and Defence Material until 21st March 1995 how could DMR Canada have prepared the technical findings in the Final Award, when the technical findings in both awards are one of the same?

18th April 1995:  This letter, from the TIO-appointed Arbitration Project Manager, John Rundell, of Ferrier Hodgson Corporate Advisory, to Warwick Smith (copied to Peter Bartlett and Dr Hughes) states:-

“It is unfortunate that there have been forces at work collectively beyond our reasonable control that have delayed us in undertaking our work.”

Neither Graham Schorer nor Alan Smith were ever told about these “forces at work” nor were they ever warned that, under the noses of the Arbitration Administrator and his Legal Advisor, Peter Bartlett, unnamed forces were allowed to infiltrate and manipulate the arbitration process. (AS-CAV 160)

27th April 1995:  Ted Benjamin writes to Dr Hughes, including attachments.  The information referred to was never provided to Alan nor his Technical Advisor, George Close.  This letter includes seven points that were apparently sourced by DMR and Lane directly from Telstra, without any formal request directed through the transparency process of the arbitration.  This letter is discussed in more detail in the Dr Hughes Target file.  Had George Close and Alan received a copy of this letter during the arbitration procedure, they would have been entitled to request from Telstra, through Dr Hughes, copies of the technical data to which Mr Benjamin refers in this letter:  they were not afforded this opportunity. (AS-CAV 166)

28th April 1995:  Warwick Smith and Peter Bartlett conjure a draft letter, dated 28th April 1995 confirming Warwick Smith and his legal counsel, Peter Bartlett, are prepared to pressure Dr Hughes to conclude Alan’s award quickly:-

“However, I understand you are to present a paper in Greece in mid May.”

“I would expect that the Award would be delivered prior to your departure.”

“It would be unacceptable to contemplate the delivery of the Award being delayed until after your return.” (AS-CAV 169)

This letter further supports Alan’s assertions that the arbitration was not a transparent process and that the arbitrator was not independent.  It is also clear that Warwick Smith and Peter Bartlett had no regard for justice, or for Alan’s right to present the facts as they really were.

28th April 1995:  Mr Schorer writes to Ms Lesley Gordon, AUSTEL’s FOI co-ordinator:-

“Austel know from their own experience, as a result of the Austel investigation and report, the relevance, and more importantly, the importance and dependency of myself to receive the documentation contained in the following Austel categories:-

  1. Early papers/drafts COT Case Report. 6 files.
  2. Bell Canada, Coopers and Lybrand Reports and assoc papers. 4 files.
  3. Telecom internal docts. 4 files.
  4. Monitoring and testing: general. 5 files.
  5. Telecom monitoring, qualitative maint. difficult network fault data. 2 files.” (GS-CAV 216)

By 28th April 1995 Alan Smith and Graham Schorer had still not received all the required raw Bell Canada International data requested under FOI.

DMR and Lanes present their Technical Evaluation Report

30th April 1995:  There were many problems with this report, not the least being that DMR and Lane skipped a six-month period of Alan’s claim, from August 1994 to April 1995, including only assessing 23 faults claim examples from 200 fault complaints (see point 3 in the conclusion).  They also failed to investigate or address numerous bound volumes of evidence that demonstrated Telstra’s continuing incorrect charging on all of Alan’s phone lines.

The DMR and Lane report, dated 30th April 1995, which Alan has hand-marked Arbitrators copy, and the Final copy, both contain lists including the words,

“The information provided in this report has been derived and interoperated from the following documents.”

Any person would expect both reports, dated the same day, cover the same 23 assessments and include the same technical information.  The arbitrator’s list of sourced documents is minus 13 bound claim documents (comprising over 3,000 documents) that appear on the Final Report List.  Who added the 13 sets of claim documents to the final list?

In the DMR and Lane Report, provided to Dr Hughes, there is one difference – although not a technical matter.  Included on page 2 of this report are the words:-

“There is, however, an addendum which we may find it necessary to add during the next few weeks on billing, i.e. possible discrepancies in Smith’s Telecom bills,”

and on page 3,

“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.”

The report Dr Hughes provided for Alan’s official written response (as directed by the Arbitration Agreement) was different from the report stating extra weeks are needed to finish and therefore it is incomplete.  Not only had an extra 13 volumes of sourced documents been added, but the reference to billing discrepancies had been removed, along with the reference to the report being incomplete.

Questions:

  1. How could the report Alan received be complete, when the arbitrator’s version, of the same date, stated extra weeks were needed to complete it?
  2. How can two reports have identical technical findings when their conclusions were apparently reached after one of the reports assessed 3,000 more claim documents than the other?
  3. How can a report that sourced 3,000 more claim documents (mostly consisting of billing claim material) not disclose one single billing issue as being addressed?
  4. Who disallowed DMR and Lane the extra weeks they needed to complete their report?

3rd May 1995:  Dr Hughes writes to Alan, advising he has five days to respond to the DMR and Lane Report.  Alan is forced to prepare his response himself since he can no longer afford to pay his Technical Advisor.  Even though he has no technical expertise in the telecommunications field, he is still able to refute many of the assertions in this so-called independent report, but has to agree with some assessments, due to his inexperience in technical issues.

Alan could not understand why the billing part of his claim was not addressed in the report.  He didn’t completely solve this until January 2001, when he discovered John Rundell, of FHCA, had written to the TIO on 15th November, 1995 advising the TIO that FHCA ordered DMR and Lanes NOT to investigate Alan’s billing evidence. AS 104).  Mr Rundell and FHCA caused all Alan’s heartache and worry as he attempted to put together a response to a highly technical report.

At point 2.23 in this report DMR and Lane state:-

“Continued reports of 008 faults up to the present.  As the level of disruption to overall CBHC [Cape Bridgewater Holiday Camp] service is not clear, and fault causes have not been diagnosed, a reasonable expectation is that these faults would remain ‘open’. (AS-CAV 170)

Why didn’t DMR and Lane diagnose the fault causes for these billing problems?

5th May 1995:  Dr Hughes writes to Alan noting:-

“I refer to your telephone message of 4 May and your facsimiles of 4 and 5 May, 1995 and advise I do not consider grounds exist for the introduction of new evidence or the convening of a hearing at this stage.”

He also reiterates his previous instructions:-

“any comments regarding the factual content of the Resource Unit reports must be received … by 5:00pm on Tuesday 9 May 1995”. (AS-CAV 171)

Alan’s facsimile of 4th May 1995 advises Dr Hughes FHCA did not take into account a similar type of business, Camp Rumbug (with a reliable phone and fax service), which he had helped set up in Foster Gippsland (Victoria). (AS-CAV 172)

Alan also asks Dr Hughes to look at the late evidence he had provided to Sue Hodgkinson.  This evidence confirmed that the operators of six other camps wrote to Cathy and Alan supporting that booking two different groups into a camp at the same time, was a good way to create more revenue and would also encourage group bookings in the future.  Dr Hughes’ would not accept this, labelling it as “new” evidence (AS-CAV 171).  Alan raises the same issues again in a second letter faxed to Dr Hughes on 5th May, 1995 but to no avail (AS-CAV 173).  Pages 100 to 102 from the Oral Arbitration Hearing held on 11th October 1994 confirm Alan attempted to submit similar evidence, eight months earlier, but this was not allowed.  The transcripts of the Oral Hearing confirm the sensitivity of the information Alan was attempting to submit. (AS-CAV 174).

The phone/fax account for 4th October 1994 (AS-CAV 175) shows that Alan phoned Dr Hughes’ office at 5:06 pm and spoke for 5 minutes and 11 seconds.  Alan believes he made this phone call to discuss Telstra’s reluctance to provide FOI documents and to request a meeting to discuss the matter further (AS-CAV 100).  Alan believes he detailed his reasons for not submitting the list of names and addresses of the singles club patrons with his letter of claim, because of the sensitivity of the private information.  Dr Hughes should remember this conversation, as it was his suggestion that Alan brings the singles club material to the Oral Hearing for discussion.  What changed Dr Hughes’ mind between this phone conversation and the Oral Hearing?

These documents, including the contact information for the singles club patrons, were relevant to Alan’s claim as they showed the business clientele Alan was losing and proved Alan was losing more than only the “school market” because of the continuing phone problems.

Why did FHCA only look at the school-booking rate per head when valuing the lost camp bookings?  A student price per two night stays, during 1993/94, with all meals provided cost approximately $30 per person.  A singles club patron staying two nights cost approximately $140-$160 per person.

Important:

As the TIO allowed FHCA to assess the validity of information, before deciding whether it should or should not be provided to the arbitrator, this appears to be the root cause of Dr Hughes’ failure to see the most relevant information.

9th May, 1995:  DMR Corporate lodges its response to the FHCA Financial Report. Alan’s accountant, Derek Ryan, of DMR Corporate, makes it very clear that, in his professional opinion, the FHCA Financial Report was factually incomplete and this made it impossible for him to address how FHCA arrived at its findings.

Derek Ryan was so incensed with the FHCA Report that, without Alan’s knowledge, he wrote to the then Shadow Minister for Communications, Senator Richard Alston, on 6th December 1995 to alert him to what Mr Ryan believed was a miscarriage of justice.  In this letter, Mr Ryan noted:-

“The FHCA report was inaccurate and incomplete. I have since been advised by a staff member of FHCA that a large amount of information was excluded from their final report at the request of the arbitrator. This has left the report in an incomplete state and it is impossible for anyone to re-calculate how the FHCA loss figures were determined” (AS-CAV 177-A).

Alan has the full 39-page letter referred from Derek Ryan, dated 9th May 1995 to Dr Hughes.  Only pages 1 and 39 are exhibits, because of the voluminous nature of the document (AS-CAV 178-A).

Dr Hughes brings down his award on incomplete information

11th May 1995:  Both the draft and final award can be located in the Ted Benjamin exhibits 4 and 5 and exhibits 6 and 7 of the Alan Smith CAV Relevant Information file.

It is evident, from these two awards, that Dr Hughes was provided false and misleading information by persons who did not want the truth of Alan’s case disclosed.

12th May 1995:  Dr Hughes writes to Warwick Smith.  Alan only received a copy of this letter (see Dr Hughes and Warwick Smith Targets) from the TIO’s office in 2001/2, and he has so far only touched briefly on its significance.  A more in-depth study of this letter raises the following questions: (AS-CAV 180)

Dr Hughes states, “as far as I could observe, both Telecom and Smith co-operated in the Smith arbitration”.

  • How could he make such a statement when he had received written notification that the Government Solicitors were brought in to force Telstra to comply with FOI requests by three COT members?
  • How could he make such a statement after seeing a copy of John Rundell’s letter of 18th April, 1995 to the TIO, which stated: “It is unfortunate that there have been forces at work collectively beyond our reasonable control that have delayed us in undertaking our work.”

Why was Dr Hughes afraid to expose the truth?

Also in this same letter, Dr Hughes makes the following comments, which all needs to be explained by the TIO’s office: (GS-CAV 217)

  • “the time frames set in the original Arbitration Agreement were, with the benefit of hindsight, optimistic;”
  • “in particular, we did not allow sufficient time in the Arbitration Agreement for inevitable delays associated with the production of documents, obtaining further particulars and the preparation of technical reports; …”
  • “In summary, it is my view that if the process is to remain credible, it is necessary to contemplate a time frame for completion which is longer than presently contained in the Arbitration Agreement.”

On receipt of this letter, as the Administrator of the Arbitrations, Warwick Smith should have abandoned the process and intervened to allow a review and allow Alan more time to obtain further particulars, produce documents and prepare his technical

report.  John Rundell’s letter to Mr Pinnock on 15th November,1995 (refer John Pinnock Target), regarding the inadequate time frame and how it affected the completion of the DMR and Lane Technical Report, adds further weight to the allegation that the process was severely flawed.

12th May 1995:  Dr Hughes writes to Graham Schorer, copied to Warwick Smith, Peter Bartlett and others stating:-

“I am departing today for two weeks leave.  When I return, I intend convening a directions hearing in order to determine whether the parties wish this arbitration to proceed.”

“I would be interested to receive any comments from you (or Telecom) in the meantime.” (GS-CAV 218)

There is no reference in this letter stating:  It is my view that if the process is to remain credible, it is necessary to contemplate a time frame for completion which is longer than presently contained in the Arbitration Agreement.

24th May 1995:  Mr Benjamin’s letter to Alan, re late-released FOI documents, again confirms Alan and Graham had no chance of ever receiving justice.  Two weeks after Dr Hughes deliberated on Alan’s claim, Telstra released 745 new FOI documents under the heading “Your FOI Request of May 1994”, and includes the following:-

“Further documents have recently come to light that fall within your FOI request of 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.” (AS-CAV 183)

Twelve months after Alan originally asked for these documents, Telstra finally considers it important that he gets them – too late!  And the arbitrator had gone to Greece.

Among the papers in this FOI release, Alan found two particularly relevant documents, numbered N00005/6 and N00037 (AS-CAV 135 and AS-CAV 136).  Document N00005/6 is a letter dated 6th September 1994 from Telstra to Gerald Kealey of Bell Canada International in Ottawa, which confirms that the BCI tests conducted at Cape Bridgewater on 5th November 1993 were impracticable.

N00037 is an internal Telstra memo dated 23rd August 1994 which also acknowledges the BCI tests conducted at Cape Bridgewater on 5th November 1993 were impracticable.  Even though documents N00005/6 and N00037 note the BCI tests conducted at Cape Bridgewater on 5th November 1993 were impracticable, none of the BCI tests conducted from 5 to 9 November could have been conducted, because the CCS7 equipment could not be operated at Cape Bridgewater or the Portland Exchanges.

These two documents support Alan’s claim:  Telstra should not have used the BCI Report as defence material or as library material for the arbitration process, as it was flawed.  Telstra knew the report was impracticable as far back as August 1994, yet they used it to support their assertion that the telephone network into Cape Bridgewater was operating well.  This was more than just unethical.

Brian Hodge, B Tech; MBA (BC Telecommunication) declared in his 27th July 2007 Technical Report, NONE of the five-day tests BCI allege were generated through the CCS7 trapping data could have terminated at the unmanned Cape Bridgewater RCM.

Letters received in 2001/2

Among the material Alan received in 2001/2, under the TIO Privacy Policy Act, were a number of documents confirming TIO Mr Pinnock allowed numerous episodes of Telstra’s unethical conduct, during Alan’s arbitration, to remain un-addressed.  One of these was a letter dated 7th September 1995 from Telstra to Mr Pinnock (AS 116), which suggests the BCI test results they used to support their defence, were impracticable. Why did Telstra withhold this knowledge until after Dr Hughes had brought down his findings?  In the Arbitrator’s Award, he clearly notes he accepted the BCI report into evidence; therefore, he read the report and believed it was a true and correct document.

Another alarming document was a fax cover sheet from the TIO to Peter Bartlett of Minter Ellison, regarding some of Alan’s letters to Dr Hughes and his consequent letter to Mr Pinnock on 21st June 1995.  This sheet asks, in reference to Alan’s arbitration, “what the approach should be re parties seeking to revisit issues post [Arbitration].  His position is not to open the can of worms…” (AS-CAV 184)  This document suggests Alan’s arbitration process was certainly not administered as transparently or as lawfully as it should have been.

1st June 1995:  The file note created by William Hunt, Graham Schorer’s solicitor, states:-

“In relation to the Bell Canada reports, the situation is apparently is [sic] that Bell Canada were engaged to give an appraisal by Telecom. Bell Canada asked Telecom to run certain tests for them and Telecom did that. …”

“It is claimed by Steven Black that that material does not belong to Telecom and it was handed back to Bell Canada and Telecom are not in a position to get it from Bell Canada and they don’t have copies of it.” (GS-CAV 221)

Exhibit GS 203A confirms, on 25th August 1994, Telstra had copies of the Bell Canada information.  Why did Mr Black state otherwise?

5th June 1995:  William Hunt’s file note states:-

“Re Schorer & Cot Cases. Pursue Schorer & Thorpe to get authority to write to the Commonwealth Ombudsman about the inability or refusal to provide us with the tests that were conducted for purposes of both Schorer and for Smith. In particular I am to concern myself that the material has not been made available for inspection and it should be because it belongs to Telecom not to Bell Canada.” (GS-CAV 220)

19th June 1995:  William Hunt’s file note states:-

“On 17th May attending Mr Harry Thorpe [Golden Messenger’s accountant] who phoned and I dictated to him an answer to Gordon Hughes letter of 12th May which didn’t arrive until 16th. We discussed that Alan Smith had got a very poor settlement, namely a $400,000.00 less 80 of which $135[,000] was then taken out in cost to people who assisted him.”

“I said we should consider whether we may be better off scrapping without letting this arbitration be scrapped and going public in litigation and complaints about the FOI lack of documentation received.” (GS-CAV 222)

19th June 1995:  William Hunt’s file note states:-

“Schorer rang me on Friday 16th June saying that he was not going back to Warburton but he would be still under the clinical psychologist and would be coming in to see me next Thursday.” (GS-CAV 223)

Both Alan and Graham, at various times, have received professional counselling associated with trying to come to terms with the way Telstra, the TIO, and those appointed by the TIO to assist them in the TIO-administered arbitration, treated them.

21st June 1995:  Dr Hughes writes to TIO John Pinnock and copies the same to Telstra.  Dr Hughes attaches three letters from Alan Smith, written during his arbitration, requesting Dr Hughes seek, on Alan’s behalf (under the discovery process), all the BCI information supporting their alleged successful tests at Cape Bridgewater.  Alan does not receive a copy of this correspondence, from Dr Hughes to Mr Pinnock and Telstra, during his arbitration even though the defendants (Telstra) received it.

27th June 1995:  John Pinnock writes to William Hunt, stating:-

“As you may be aware, this arbitration has in effect been in abeyance for some months.  This has apparently been due to the Claimant’s outstanding request for documentation, and Mr Schorer’s ill health.”

“We have not heard from Mr Schorer for some time, and would be grateful if you could advise us as to how he intends to proceed.” (GS-CAV 224)

Likewise, there is no reference in this letter regarding, It is Dr Hughes’ view that if the process is to remain credible, it is necessary to contemplate a time frame for completion which is longer than presently contained in the Arbitration Agreement.

29th June 1995:  On behalf of Alan, Taits Solicitors in Warrnambool writes to AUSTEL, asking for information associated with the BCI and NEAT testing process conducted at the Cape Bridgewater RCM in November 1993. (AS-CAV 185)

On 12th July 1995 Cliff Mathieson, of AUSTEL, replied:-

“The tests to which you refer were neither arranged nor carried out by AUSTEL. Questions relating to the conduct of the test should be referred to those who carried them out or claim to have carried them out. (AS-CAV 186)

But, Cliff Mathieson wrote to Telstra on 9th December 1993, before Telstra used the BCI report as Defence Material, advising Telstra must provide the “assessor(s)” of the COT processes with a copy of his letter regarding the BCI tests, which he declared did not go far enough.  This letter was NOT provided to Dr Hughes, as AUSTEL had directed, which makes Telstra’s use of the BCI Report even more unconscionable conduct.

4th July 1995:  Telstra writes to Ms Philippa Smith, Commonwealth Ombudsman.  Ms Joy Geary, of Telstra Corporate Legal Directorate, reluctantly acknowledges Telstra were indeed defective in supplying FOI documents during Alan’s arbitration. This letter can be found at the back of the Ted Benjamin Exhibit 4, entitled Examples of Telstra’s abuse of Legal Professional Privilege (LPP).

Ms Geary’s 4th July 1994 letter is related to the 29th June 1995 letter discussed above, because had Telstra abided by the FOI Act, Taits would never have had to write that letter.

3rd August 1995:  Dr Hughes writes to Ted Benjamin, copied to Mr Schorer, Mr Pinnock, Mr Bartlett and Mr Rundell noting:-

“Mr Schorer advised me that due to a combination of factors, including the current state of his health, the commercial pressures imposed by his business and an impending FOI claim, he is unable to submit a claim at present.
(GS-CAV 225)

Again, there is no reference in this letter alerting these parties, that, as an arbitrator, Dr Hughes believes “if the process is to remain credible, it is necessary to contemplate a time frame for completion which is longer than presently contained in the Arbitration Agreement”.

7th August 1995:  John Pinnock writes to Alan Smith regarding the impracticable BCI tests. He states:-

“You have also claimed that on 26 May 1995 you received further FOI documents from Telstra which, you state, would have assisted your claim significantly. …”

“As Administrator of the FTAP, I have a duty to ensure the integrity of the procedure. Your complaints go to this issue, and accordingly, I would be pleased if you would provide me with:

  • all documents supplied to you by Telstra on or after 26 May 1995 together with covering letters, schedules or annexures which may identify those documents.
  • a concise explanation of the significance of the further FOI documents released by Telstra; in particular, specific instances which support your contentions in (a) and (e) above.
  • Any other evidence which supports the above contentions.” (GS-CAV 226)

In the CAV Alan Smith – John Pinnock Conspiracy to pervert the course of justice LGE file and the TIO – Target file, it is shown Alan Smith provided Mr Pinnock with a comprehensive list and the required documents to Mr Pinnock.  Alan is still waiting for him to carry out his “duty” as the administrator of Alan’s arbitration and to correctly respond to Alan’s reply.

8th August 1995:  Alan writes to Ted Benjamin concerning Telstra knowingly using the flawed BCI tests in their defence as well as withholding FOI documents until after Dr Hughes deliberated on his claim. (AS-CAV 196)

9th August 1995:  Alan submits yet another FOI request to Ted Benjamin, re the T200 report.  As neither Telstra nor Dr Hughes accessed, on Alan’s behalf, the working notes regarding Telstra’s ‘beer-in-the-phone’ TF200 report, Alan makes a fresh FOI request, with the appropriate $30 application fee, for these documents.  This letter was also copied to Mr Pinnock, who plays a continuing roll in this TF200 saga. (AS-CAV 188)

21st August 1995:  Mr Pinnock is provided with a copy of a letter allegedly sent by Gerald Kealey of BCI Canada to Steve Black of Telstra on 11th August 1995 (AS-CAV 189 and AS-CAV 190-A).  A number of Telstra Executives would have known this letter contains false and misleading information.  Yet this letter was provided to the Senate in an attempt to stop its investigation into Alan’s claims that Telstra knowingly used impracticable test results to support their arbitration defence (AS-CAV 191).  Was the Gerald Kealey letter a manufactured document?  This letter does not have any BCI identification on the letter at all.

Attached as exhibit AS-CAV 190-B, is a copy letter from Bell Canada International (BCI) to Telstra’s Alan Humrich, dated 14 December, 1993 on a BCI letterhead.  Why did Gerald Kealey type his letter on a blank piece of paper?

In Mr Black’s letter to Mr Pinnock he states:-

“I refer Dr Hughes’ letter to you dated 21 June, 1995 which enclosed a copy of a facsimile from Mr Smith to Dr Hughes dated 20 June 1995. Dr Hughes copied his letter to Telstra.”

Attached to Alan’s 20th June 1995 letter to Dr Hughes (AS-CAV 192) were three other BCI-related documents showing Alan had reason to raise the flawed BCI tests during his arbitration (AS-CAV 193, AS-CAV 194, and AS-CAV 195).

Did Dr Hughes copy this BCI information to Telstra because he believed Alan’s claims were valid?  After all, he was now supplying correspondence that he didn’t address during Alan’s arbitration onto Telstra.

24th August 1995: Ted Benjamin responds to Alan’s letter 8th August 1995 noting:- I refer in particular to the last paragraph of your letter in which you state that Telstra had ‘…internal knowledge that the Bell Canada International Addendum report was not a true and correct document’. Telstra rejects outright your claim…” (AS-CAV 197)

4th September 1995:  Dr Hughes writes to Graham Schorer, copied to Mr Benjamin, Mr Pinnock, Mr Bartlett and Mr Rundell.  He notes:-

“I refer to our telephone discussion on 3 August last and would be pleased to know if you are yet in a position to indicate whether, and if so when, you intend proceeding with the submission of your claim documentation.” (GS-CAV 227)

At no time, during Graham’s arbitration, was he advised Dr Hughes believed a new Arbitration Agreement should be drafted.

20th September 1995:  The Senate Hansard shows under Matters of Public Interest – Telstra:-

Senator BOSWELL (Queensland –Leader of the National Party of Australia) states:-

“At the moment there are customers of Telstra who, for many years, have also been casualties of Telstra. For years they have experienced problems with dead lines, lines dropping out, busy signals when it was not busy and many more. …”

“One Commonwealth Ombudsman’s report on delays in FOI information condemns Telecom’s denial of documents in the following words:

It was unreasonable for Telecom to require the participants to make further assurances while Telecom was considering the arbitration agreement and thereby denying participants the opportunity to consider the rules that Telecom wished to have included in the agreement.
(GS 228)

3rd October 1995:  AUSTEL writes to Telstra’s Steve Black, re 008/1800 faults.

“I write concerning charging discrepancies raised in 1994 by Mr Alan Smith of Cape Bridgewater Holiday Camp regarding his 008 service, and the wider issues these discrepancies raise for Telstra’s 008/1800 customers. …”

“To date, AUSTEL has not received a response from Telstra which allays AUSTEL’s concerns about this issue.” (AS-CAV 201)

This letter was copied to John Pinnock.

From August 1995 to October 1995, Mr Pinnock wrote a number of letters to Telstra’s Ted Benjamin, asking why Alan had not received the BCI information during his arbitration. It appears (see CAV LGE Target files) that even though Mr Pinnock was concerned Alan wasn’t receiving the relevant information after his arbitration, he stopped his enquiries into the BCI matters.

28th November 1995: Mr Pinnock informs Alan:-

“You have sent approximately 25 letters to the TIO in the last month. …”

“If you continue to write to me seeking that I take action which you know I cannot and will not take, you will only be frustrated and disappointed by my lack of response. …”

“The Resource Unit have provided clarification of the reasons for the deletion of references to a potential addendum on possible discrepancies in your Telecom bills from the final Technical Report as follows:

  • ‘At a late stage of the Arbitration process, at the time of the Technical Evaluation Report, there was discussion about billing issues which had been raised by Mr Smith.  A draft of the Technical Evaluation Report therefore included references to the billing matters, which it was thought might require further work beyond the time of issue of the Report.’ (This letter is available in J Pinnock File No/11-E)

23rd October 1995:  Portland solicitors Bassett & Sharkey, write to John Pinnock, stating Alan believes Telstra used BCI test results known to be impracticable to support their arbitration defence and he requires answers. (AS-CAV 198)

26th October 1995:  Minter Ellison, for the TIO, drafted a letter to reply to Bassett & Sharkey.  This letter included the statement:-

“Although the Arbitrator had a copy of the Bell Canada Report, it does not appear to have ever formally been put into evidence.”

This was false and misleading because both Minter Ellison and the TIO’s office also had a copy of Telstra’s arbitration defence and a copy of the arbitrator’s award where he states the BCI was placed into evidence. (AS-CAV 199)

6th November 1995:  Five months after Dr Hughes wrote to Warwick Smith, on 12th May 1995, noting that:-

“if the arbitration agreement was to remain credible, it is necessary to contemplate a time frame for completion which is longer than presently contained in the Arbitration Agreement”,

Dr Hughes wrote to Graham Schorer, asking Graham to advise him:-

“within 7 days when you expect to complete the submission of your claim.”

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

Regardless of Senator Richard Alston being advised of the flaws in the arbitration agreement, the regulator AUSTEL and TIO continue with the arbitrations.

9th November 1995:  Mr Pinnock responds to Bassett & Sharkey.

“If Mr Smith feels the process was flawed or the Award tainted, he has legal avenues available to him.” (AS-CAV 202)

In his letter to Mr Pinnock, on 15th November 1995 Mr Rundell states:-

“A second matter involved 008 calls. Again, this matter was current at a late stage (April 1995) of the Arbitration process.” …

“As no further progress was likely to be made on these matters, the formal version of the Technical Evaluation Report did not leave the billing issues open.” (AS-CAV 104)

Although the billing issues were certainly still ongoing in April 1995, this letter implies they were not referred to before.  This is inaccurate: the billing issues were included in Alan’s letter of claim that he lodged on 15th June 1994.  Furthermore, the transcript of the Arbitration Oral Hearing, on 11th October 1994 also shows both FHCA and the arbitrator were given huge amounts of evidence regarding wrongly calculated accounts charged to Alan’s phone services over many years. (AS-CAV 105)

As for the “Technical Evaluation Report” not leaving “the billing issues open”, both the draft Technical Evaluation Report and the formal version clearly left this issue wide open, as can be seen from the following point, which appears in both versions of the report:

“2.23 Continued reports of 008 faults up to the present. As the level of disruption to overall CBHC service is not clear, and fault causes have not been diagnosed, a reasonable expectation is that these faults would remain ‘open’.”

10th November 1995:  AUSTEL’s Cliff Mathieson writes to the Hon Michael Lee, Minister for Communications, attaching AUSTEL’s fifth quarterly COT Case Report, which states, on page 3:-

“The TIO has observed that the progress of arbitration for both the original four complainants and the other group involved in the Special Arbitration Procedure has been significantly hampered. The TIO attributes this to –

  • delays in the provision of documentation and information by Telstra to the various customers under Freedom of Information entitlements;
  • delays on the part of the claimants in advancing their claims; and
  • the legalistic approach adopted by Telstra in its defence against these claims.” (GS-CAV 230)

24th November 1995: This letter from William Hunt, Graham Schorer’s solicitor, to Dr Hughes, states:-

“The arbitration proceedings were entered into on a clearly accepted basis that Telstra would supply required documentation under FOI provisions. Our client cannot proceed without the relevant information being made available. …”

“Our client is aware of the disastrous state of affairs as to the supply of FOI documents in the recent Smith arbitration wherein documentation was supplied shortly before and after you made your decision; it does not want to be similarly disadvantaged in its own proceedings. (GS-CAV 231)

20th December 1995:  TIO John Pinnock writes to Derek Ryan. He notes:-

“In that letter you state, among other things, that “I have since been advised by a staff member of FHCA that a large amount of information was excluded in their final report at the request of the arbitrator.”

I have been informed by Ferrier Hodgson Corporate Advisory that it is not in fact the case that a large amount of information, or indeed any information, was excluded from the Resource Unit’s report at the request of the Arbitrator.” (AS-CAV 177-B)

22nd December 1995:  Derek Ryan responds to Mr Pinnock’s letter, noting:-

“On May 8th 1995 I telephoned FHCA and spoke to John Rundell and requested a meeting to discuss how the FHCA loss figures were determined. He was reluctant to talk to me at that time however we set a tentative date of 17 May 1995 for us to discuss this matter again. …”

“My response to the FHCA report was lodged on 9th May 1995.

“On 17th May, I telephoned John Rundell and he stated that he was unable to discuss anything with me until the appeal period had expired. During that telephone conversation I told him I was unable to recalculate the FHCA figures and that I felt the report was deficient in that regard. He then stated that he understood my problems and that FHCA had excluded a large amount of information from their final report at the request of the arbitrator.”
(AS-CAV 178-B)

That John Rundell told Mr Pinnock, “I did advise Mr Ryan that the final report did not cover all material and working notes, (AS-CAV 179) suggests Derek Ryan’s two letters (AS-CAV 177 and AS-CAV 178) are closer to the truth that anything Mr Rundell will admit.  See also Derek’s letter to Ms Caitlin English, Consumer Law Centre Victoria (AS-CAV 176).

Why did John Rundell respond like this?

In the letter from John Rundell of FHCA to Mr Pinnock, dated 13th February, 1996 admitting Mr Rundell’s Financial Report was incomplete, Mr Rundell all but accuses Alan of causing criminal damage to his personal property and notes the Brighton CIB were intending to interview Alan.  When Alan found this comment, he contacted the Brighton CIB and was told that they never intended to interview him regarding this matter and, in fact, they had no record of Alan on their files at all.  This further supports Alan’s assertions:  John Rundell is not a credible witness and should therefore never have been in charge of the distribution and assessment of Alan and Graham’s arbitration claim documents. (AS-CAV 179)

IMPORTANT POINTS TO CONSIDER:

  • Derek Ryan’s report was dated 9th May, 1995.
  • Dr Hughes and FHCA would have needed all of the following days, 10th May 1995 to digest and discuss Derek’s reply to the final FHCA Report. This is the same final FHCA Report that John Rundell advised Mr Pinnock, on 13th February 1996 that he did advise Mr Ryan that the final report did not cover all material and working notes”.
  • Dr Hughes submitted his award on 11th May 1995.

Derek Ryan never received a response from Dr Hughes to confirm he received Derek Ryan’s official response. Did FHCA receive Derek’s Ryan’s report first, due to their vetting arrangement, and decide it was irrelevant?

22nd November 1995:  Ted Benjamin again refutes Alan’s BCI claims.  Mr Benjamin states:-

“I note that you raised issues in relation to the Bell Canada International testing results in the arbitration process.  As you are aware, the arbitration process dealt with the complaints by you in relation to your telephone service. … Telstra does not propose to comment further or enter into debate with you on these matters.” (AS-CAV 200)

28th November 1995:  Alan makes a telephone call to Dr Hughes’ residence to inform him that his latest FOI application, dated 9th August 1995 which he asked Ted Benjamin to process (AS-CAV 188), yielded amazing results.  Alan’s FOI application sought all working notes showing how Telstra laboratory staff concluded “sticky” beer was the cause of his EXICOM TF200 phone lock-up problems.  The TF200 information Alan now received was a completely different set of testing results than the ones Telstra used in their arbitration defence (see Ted Benjamin Appendix 32).  Dr Hughes wasn’t home and Mrs Hughes informed Alan that he was away on business.  Alan was immediately concerned Dr Hughes would have told his wife about Alan’s continued frustration with his arbitration and so, when she asked who was calling, Alan worried she would become upset if he gave his real name.  He quickly decided to use the first name he could think of that was unlikely to upset her, but who he was sure Dr Hughes knew – John Rundell.  The result of this telephone call is discussed in more detail below.

10th January 1996:  Mr Pinnock writes concerning Alan’s requests for documents that might enable him to appeal the Arbitrator’s Award.

“The arbitration of your claim was completed when an award was made in your favour more than eighteen months ago and my role as Administrator is over.”

“I do not propose to provide you with copies of any documents held by this office.” (AS-CAV 203)

18th January 1996:  Alan writes to Mr James, President of the Institute of Arbitrators, condemning the way Dr Hughes conducted his arbitration. (AS-CAV 204)

19th January 1996:  Telstra’s letter to Dr Hughes states:-

“I should note, however, that in the circumstances Telstra faces great difficulty in attempting to place practical limits on the scope of its searches. This is due both to the vague nature of Golden Messenger’s claim and the wide scope of your direction, which is broadly analogous to a direction for Telstra to give discovery of documents, a situation which was not envisaged when the parties entered into the Fast Track Arbitration Procedure.” (GS-CAV 232)

On the next page of this letter, Telstra lists some 26 different locations from where approximately 66,000 documents and computer disks were sourced to accommodate Graham’s arbitration requests.  Telstra doesn’t explain, however, that these 66,000 documents included multiple copies of the same documents from these 26 different locations.  Even the intervention of the Senate Working Party from 1997 to 1999 did not result in Graham receiving the real exchange material he needed, i.e. the CENTOC – TRAXE congestion-monitoring data for the outer exchanges servicing the North Melbourne exchange that Graham’s business was connected to.  How could any of the COT claimants be expected to accurately calculate the extent of lost calls if they were not given these important monitoring data documents?  Rather than 66,000 documents, many duplicated, Graham needed a single 52-page weekly congestion chart for each year of his 10-year claim – a total of some 520 pages or more would have sufficed.  Why did none of the COT claimants ever receive these CENTOC – TRAXE charts through their numerous FOI requests?

It is shown below, for the date of 14th March, 1997 Telstra knowingly withheld CENTOC – TRAXE data (half-hourly recordings) during Alan Smith’s arbitration under Legal Professional Privilege.

A Telstra Arbitration Defence Document, provided to Graham Scherer, entitled Briefing Document B003 Report and dated 26th November, 1996 notes:-

  1. “From October 1995 customers whose services were directly connected to LONU exchange would incorrectly receive a RVA when calling (03) 9287 70xx (8 digit dialling). Customers connected to North Melbourne System-12 exchange (NMEE) would incorrectly receive the RVA on 50% of call attempts to (03) 9287 79xx as calls from NMEE to NMEX were trunked on 50/50 basis via LONU and North Melbourne. …
  2. “Traffic Observation data available for the codes (03) 286 & 287 xxxx and (03) 9286 & 9287 xxxx shows that the percentage of callers dialling new 8 digit codes was less than 20% in October 1995 and less than 50% in December 1995. (GS-CAV 233-A)

In regards to this same Lonsdale fault, Telstra notes on page 15:-

“On 19January 1996 the Claimants’ complained that at 4:30pm they attempted to ring their own (03) 9287 7000 number following a clients [sic] complaint of receiving RVA intermittently. The fault was traced to incorrect data at LONU exchange on 10 October 1995.” {Ref: J05771 to J05774}

“A detailed analysis of this fault is provided in ‘Investigations, Analysis and Supportive Data’. The estimation of the impact attempting to the Claimants’ ISDN services is:

  • for 10 October to 12 December 1995, approximately 0.12% call loss from the Melbourne (03) network attempting to call the Claimant’s ISDN services; and
  • for 13 December 1995 to 23 January 1996, 0.23% call loss from the Melbourne (03) network attempting to call the Claimants’ ISDN services.

Therefore the data error in Lonsdale had negligible effect on call delivery to the Claimants’ ISDN services and no effect to their PSTN services. The Claimants’ outgoing calls were not affected.” (GS-CAV 233-B)

COMMENTARY 1

It is important to compare the Graham Schorer Lonsdale exchange RVA call-loss problems with the Alan Smith Lonsdale exchange RVA call-loss problems that were discussed during Alan’s arbitration in Telstra’s B004 Briefing document.  It is unknown if Telstra misled the arbitrator regarding the Lonsdale exchange RVA software problem Graham experienced.  However, it knowingly misled the same arbitrator regarding the Lonsdale exchange MELU RVA problem regarding Alan’s claims when Telstra noted:-

“Telecom investigated these complaints and located data entry error at its MELU Windsor Trunk Exchange (‘MELU’).”

“The error was made on 4 March 1992 and was located by test calls that were made by staff at Telecom’s Lonsdale exchange. … Whilst it was initially thought that the problem may have existed for a 6 week period, subsequent investigations confirmed its existence for a total of 16 days (refer witness statement of Hew MacIntosh and David Stockdale.” (GS-CAV 233-C)

At Exhibit 9 in the Alan Smith – Ted Benjamin Target file, Alan uses Telstra’s own file notes, together with correspondence he received from various people, to show this Lonsdale exchange RVA software error problem had existed for eight months (not 16 days), with a call loss of 50% (not the 33% Telstra claimed).

On 21st November 2007, Alan received a 74-page draft report prepared by AUSTEL on 3rd March 1994 from the Australian Communication Media Authority (ACMA), regarding Alan’s claims against Telstra.  At point 103, this report is most critical of Telstra for misleading and deceptive statements in relation to the MELU Lonsdale exchange RVA problem, noting:-

“It is apparent from Telecom’s documentation that no investigation of the duration of the MELU data error problem would have been initiated without the persistence of Mr Smith’s complaints on the matter.” And, the next point states, “The assessment provided to Mr Smith that up to 50% of STD calls from Melbourne to the Cape Bridgewater Holiday Camp would have been affected by the MELU RVA problem appears to be accurate.” (GS-CAV 233-E)

COMMENTARY 2

As mentioned above, in Telstra’s Briefing Document B003 report, point 8, page 18, Telstra stated:-

“Traffic Observation data available for the codes … shows that the percentage of callers dialling new 8 digit codes was less than 20% in October and less than 50% in December 1995.”

Where did Telstra’s Arbitration Defence Unit obtain this data code percentage information?  No such data code percentage information was ever supplied to Graham under FOI or discovery.

Exhibit GS-CAV 233-f states:-

“It is important to note that material that is not produced for this request cannot be used in Telecom’s defence.”

Regardless of Telstra’s knowledge that it could not rely on information in their defence that was not supplied to the claimant, it still did.

23rd January 1996:  Dr Hughes writes to John Pinnock, re Laurie James, and notes:-

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

  • the cost of responding to the allegations;
  • the implications to the arbitration procedure if I make a full and frank disclosure of the facts to Mr James. (AS-CAV 205)

Why wasn’t Dr Hughes fully frank with Laurie James?  Why didn’t Dr Hughes inform Laurie James, he had already advised Mr Pinnock’s predecessor Warwick Smith, that the arbitration agreement was flawed and needed revising?

25th January 1996:  Ted Benjamin writes to Graham, stating:-

“At paragraph 17 the Claimants state that their business was connected to the Telstra Australia ISDN Network in December 1993 by Telecom Australia, but the service difficulties, problems and faults previously experienced still continued.

Telstra understands that the PABX generates reports at the premises at which it is located and also generates reports which are sent to or generated at the premises of the company responsible for servicing that PABX. Those reports are relevant to the Arbitration to enable Telstra to distinguish between the telephone service difficulties, problems and faults attributed to the CPE, CAN and Network and misoperations by the Claimants.”(GS-CAV 234)

Telstra wanted documents from Graham but would not release the CENTOC – TRAXE congestion traffic data for the exchanges servicing the North Melbourne exchange that serviced Golden Messenger.

In the AUSTEL COT Case Report at point 8.56, 8.58 and 8.59 AUSTEL notes:-

“As Coopers & Lybrand concluded – Telecom placed an unreasonable burden on DNF cases to provide evidence to substantiate claims for situations where all telephone fault information that could reasonably assist to determine loss should have been held by Telecom. To determine settlement of a dispute Telecom is considered to be entitled to obtain information on business performance from customers. In relation to information on the nature of complaints and their incidences, it is Telecom’s responsibility to collect the information and we believe Telecom unreasonably used its inability to adequately document faults and tests for causes as a defence against claims.”

At point 8.58, AUSTEL states:-

“If a customer objects to a Telecom offer, it is not uncommon for the customer-Telecom negotiation process to be terminated and the customer to be told to deal only with Telecom’s lawyers. For example, on 27th September 1993 Mr Schorer, one of the original COT Cases, received from Telecom’s solicitors a facsimile in the following terms –

‘I confirm that we act for Telecom Australia. As discussed we have been instructed by our client to request that you address any concerns of a legal nature involving our client and your business, direct to this office marked to my attention.’ ”

At point 8.59, AUSTEL further states:-

“Mr Schorer subsequently wrote to AUSTEL expressing considerable frustration with the arrangement proposed in Freehill Hollingdale and Page’s facsimile.”

AUSTEL then noted under the heading, Letter dated 28 September 1993, AUSTEL to Telecom:-

Point 8.60

“Coopers & Lybrand also share AUSTEL’s concerns about Telecom’s propensity to insist that its customers deal with its lawyers rather than with the relevant officials within Telecom. It said – ‘Telecom’s use of legal advisers to handle DNF customers was inappropriate.’ ”

Yet, on 26th January 1996, three years after AUSTEL wrote this letter, Graham was still having to deal with Freehill Hollingdale & Page, this time as Telstra’s Arbitration Defence Counsel.

2nd February 1996:  William Hunt’s file notes confirm he spoke with Mr Bongiorno’s office (an expert on discovery), leaving a message associated with Graham’s arbitration discovery issues.  On 1st February, Mr Bongiorno returned Mr Hunt’s call citing a precedent set in “the case Conlan v Landsworth re. Copsey’s Carlton Inn Hotel reported 1970 Law Reports on page 293. There was a decision on the question of discovery apart from the case itself as a whole. The ruling on discovery was apparently made on the 17th or 18th June, 1969. Copy judgements can be found in the Supreme Court library.” (GS-CAV 235-A)

Attached to this file note are three separate similar cases to that of Graham Schorer, where discovery should have been provided on request. (GS-CAV 235-B)

The Australian Digest – Discovery And Inspection Of Documents states:-

  1. “Government communications to obtain legal advice – Improper use of regulation-making power alleged.} – Held, that where there was prima facie evidence that a government’s communications with its legal advisors came into being as part of a plan to defeat the interests of a class by deliberately using regulation-making power for a purpose outside the enabling Act, sufficient colour existed to displace the usual privilege attaching to the professional legal advice.

{(1984) 3 FCR 534; 55 ALR 545 affd.}

A-G (NT) v Kearney (1985) 158 CLR 500; 59 ALJR 749; 61 ALR 55 (HC) (GS-CAV 235-C)

5th February 1996:  The transcript from the Direction Hearing confirms William Hunt asked Dr Hughes:-

“Would you be kind enough to have identified for the record who is here?”

Dr Hughes-

“We have Telstra Mr Benjamin and Peter Gamble; from the resource unit, Sue Hodgkinson and Lauren Zohar from Ferrier Hodgson Corporate Advisory, and Andrew Crouch from Lane Telecommunications. We have from the telecommunications industry ombudsman’s office Mr Pinnock, for the ombudsman, and Ms Di Mattina, assisting Mr Pinnock.” (See Graham Schorer CAV – Relevant Information file exhibit 4)

On page 3 of this transcript, Dr Hughes notes:-

“Recapping what brings us here, we had a directions hearing last on 14 December 1995 and at that directions hearing, I directed that Telstra provide or make available such relevant documentation in its possession that had otherwise been available pursuant to FOI and that this documentation be made available on or 16 January 1996. Subsequently, I received advice from Telstra on 16 January 1996 that it had been carrying out extensive document searches and that those searches were continuing but in the time available it had not been possible to finalise the production of documentation.”

Also on page 61 and 62 of this transcript, Dr Hughes states:-

“Telstra has put us on notice that if they believe that the claim is stalled at any stage due to unreasonableness on the part of the claimant, they will be making the appropriate application and it’s a matter we deal with when and if it arises.”

Summary of issues arising from meeting on 5th February 1996

Exhibits 1 to 8 in the Alan Smith – John Pinnock Conspiracy to Pervert the Course of Justice LGE 5 – CAV file confirm Dr Hughes, Mr Pinnock, Ms Mattina and Ted Benjamin (all present at the Directions Hearing on 5th February) knew Telstra knowingly used this flawed BCI material and evidence of this knowledge was hidden from Dr Hughes until after he handed down his award on Alan’s arbitration.  Why, with all the information regarding the flaws in the BCI report before them, did Dr Hughes and Mr Pinnock allow Telstra to decide what they would and would not provide regarding the BCI information under discovery?

In numerous letters sent by Telstra’s Ted Benjamin to Dr Hughes, Mr Benjamin states he believes Telstra supplied all the relevant information Graham Schorer asked for.  Yet, the letter of 11th July 1994 confirms Telstra’s Steve Black and TIO Warwick Smith agreed between them Telstra would provide all documents pertaining to the arbitration to the resource unit for vetting purposes, and the decision on whether that material should be passed to the arbitrator depended on whether or not the resource unit believed the information was relevant.  By allowing the resource unit this final power over the exchange of evidence, this hidden agreement between Telstra, the TIO and the resource unit, allowed the resource unit to become the de-facto arbitrator.  None of the COT claimants were told of this before they signed the Arbitration Agreement.  How many documents Graham asked for under FOI were scrutinised and rejected by FHCA? (therefore never reaching Graham or the arbitrator).

It is now proven FHCA secretly vetted and discarded numerous documents during Alan’s arbitration because, in FHCA’s opinion, they were not relevant to the arbitration (see 2nd August 1996 below).  Perhaps the documents Graham expected to receive, under his many FOI requests lodged between 1993 and 1996, were also secretly vetted and discarded by FHCA?  In Alan’s case, some of the material FHCA vetted in his arbitration, and discarded as irrelevant, was again inspected on 14th January 1998 by Telstra’s Lyn Chisholm (see Alan Smith – John Pinnock Target file) and her minutes of that meeting show this discarded material was in fact most relevant to Alan’s claim.

15th February 1996:  Dr Hughes writes to Mr Pinnock regarding a draft of a letter he proposes to send to the Institute of Arbitrators in response to one of Alan’s complaints. He states:-

“I would appreciate your confirmation that there is nothing in the proposed letter which would embarrass your office or jeopardise the current arbitrations.”

“You may consider it appropriate for you to provide an independent letter of support. This is of course a matter for your discretion.” AS-CAV 206

Why would Dr Hughes need a letter of support if he had nothing to hide?

Dr Hughes spins a tall story to Laurie James

16th February 1996:  There are many inaccuracies in this letter, but the most important is at point 1 on page two, where Dr Hughes states:-

“contrary to Mr Smith’s assertion on page 3, his 24,000 (sic) documents were all viewed by me, Ferrier Hodgson Corporate Advisory, DMR Group Inc (Canada) and Lane Telecommunications…”

This statement, however, is wrong and highlights just how far Dr Hughes was prepared to go to cover up the unconscionable way Alan’s arbitration was conducted. AS-CAV 157)

For the record:

The 24,000 FOI documents, referred to by Dr Hughes in his letter to Mr James, relates to Alan’s original letter to Senator Evans (also copied to Laurie James).  On page 4 of this letter, Alan alerts Senator Evans to the 24,000 documents, stating:-

“As a result of viewing the previously referred to 24,000 late FOI documents and sorting them into bound volumes it became apparent that there were still many areas I could not include in my written submission since I did not have enough technical knowledge.” (AS-CAV 208)

On page 3, Alan states:-

“Telstra presented their defence on 12th December 1994. At this time I was still waiting for FOI documents to be supplied. Eleven days after Telstra presented their Defence I was finally supplied with 24,000 plus documents. The first notification I had of these documents arriving was a phone call from Kendall Airways on 23rd December 1994, announcing that 72-74 Kilograms of documents, addressed to me, had arrived at the Portland Airport.”

It is obvious from Dr Hughes’ letter to Laurie James that he was concerned about the content in Alan’s letter to the senator, and the ramifications if the truth was revealed.

16th February 1996:  Graham Schorer’s solicitor, William Hunt, receives a phone call from Amanda Davis, who had been AUSTEL’s General Manager of Consumer Affairs, but now had Power of Attorney for Maureen Gillan’s claim.  Maureen was one of the four COT claimants.  William Hunt’s file note says:-

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

“The impression I go [sic] was that Bartlett’s view was that the administrator had to keep out of the rights and wrongs of the disputation between the parties to the arbitration.” (GS-CAV 236)

Alan Smith has attached to his CAV – Warwick Smith Arbitration LGE file, at point 12, two letters that relate to this pressure being applied to Dr Hughes to produce results quickly, rather than pressure being applied to Telstra to produce the FOI information they were duty-bound to provide to the claimants.  These letters are dated 28th April 1995 and both relate to Alan’s Fast Track Arbitration.

Letter 1, from Peter Bartlett to Warwick Smith:-

“Further to our recent discussion, it seems to me that we should put to Gordon Hughes that we expect his Award to be made prior to his departure on 12 May 1995.”

“Attached is a draft letter to Gordon. It is in reasonably harsh terms.”

“Could you please consider whether a letter in this form, or an amended form, should go to Gordon.” (GS-CAV 236-B)

Letter 2, draft letter attached to Letter 1:

“I am becoming increasingly concerned at the delays in the finalisation of this matter. …”

“I understand you are to present a paper in Greece in mid May.”

“I would expect the Award would be delivered prior to your departure.”

“It would be unacceptable to contemplate the delivery of the Award being delayed until after your return.” (GS-CAV 236-C)

Even though the TIO-appointed Technical Resource Unit, DMR and Lane, clearly stated their draft report of 30th April 1995 was incomplete, this reference was removed from the draft and the doctored report was then provided to Alan and his technical advisors as the final and complete version of the report.  Either Dr Hughes conformed to Peter Bartlett’s request of 28th April 1995 or he made his own decision to bring down an award prematurely on an incomplete report before he went to Greece: either way, Alan’s claim suffered.

While this despicable act in relation to Alan Smith’s claim is of grave concern, Dr Hughes was also Graham Schorer’s arbitrator and the issue here is that pressure was still being exerted on Dr Hughes to complete Maureen Gillan’s claim.  The most important section of Mr Hunt’s file notes is his record of Amanda Davis saying that:-

“The impression I go [sic] was that Bartlett’s view was that the administrator had to keep out of the rights and wrongs of the disputation between the parties to the arbitration.”

Although Ms Davis does not appear to be critical of Mr Bartlett, it does seem somewhat alarming that Mr Bartlett seems to be laying some of the blame (for delays and interference in the process) on the administrator, when previously it was Mr Bartlett himself who was directly interfering in Alan Smith’s arbitration (see 28th April 1995)

CHAPTER FIVE

Who benefited from exonerating FHCA, DMR and Special Counsel?

Although the 19th April, 1994 Arbitration Agreement issue was addressed previously, it is important to link it to the issues raised by Amanda Davis, when Caroline Friend, secretary to Dr Hughes, faxed a copy of the FTAP Agreement to lawyers, Mr Goldberg and William Hunt (see Graham Schorer CAV Relevant Information file, exhibit 2), Mr Hunt was seeking a legal opinion on the agreement before Graham Schorer and Alan Smith were to sign it on 21st April 1994.  The following three clauses are included on page 12 of this version of the agreement received via Caroline Friend:-

Clause 24: Neither the Administrator nor the Arbitrator shall be liable to any party for any act or omission in connection with any arbitration conducted under these Rules save that the Arbitrator (but not the Administrator) shall be liable for any conscious or deliberate wrongdoing on the Arbitrator’s own part.

Clause 25: The liability of Ferrier Hodgson and the partners and employees of Ferrier Hodgson for any act or omission in connection with any arbitration conducted under these rules (other than in relation to a breach of their confidentiality obligations) shall be limited to $250,000 jointly.

Clause 26: The liability of DMR Group Australia Pty Ltd and the directors and employees of DMR Group Australia Pty Ltd for any act or omission in connection with any arbitration conducted under these rules, other than in relation to a breach of their confidentiality obligations) shall be limited to $250,000 jointly.

In the agreement presented to the COT claimants for signing two days later, on 21st April 1994, clauses 25 and 26 were removed and only some of the wording was added to clause 24

The final version of Clause 24 reads: Neither the Administrator, the Arbitrator, the Special Counsel, a partner or employee of the legal firm of which the Special Counsel is a partner, a member of the Resources Unit, Ferrier Hodgson or a partner or employee of Ferrier Hodgson, DMR Group Australia Pty Ltd shall be liable to any party…”

Clause 24 now had a different meaning to that presented by the original three separate clauses and it freed Peter Bartlett and Minter Ellison from any risk of being sued for misconduct in their role as Legal Advisors to the process and thereby provided no incentive for them to ensure the COT claimants were involved in a fair and just process.

The altered clause 24 also has the original $250,000 liability cap against FHCA and DMR removed from the Arbitration Agreement faxed to Mr Goldberg and William Hunt on 19th April 1994.

It is important to consider:

  • Graham Schorer sought a legal opinion from Mr Goldberg, through Mr Hunt, regarding what the COT claimants were led to believe was the final version of the Arbitration Agreement. Changes were later made to that agreement: i.e., the removal of clauses 25 and 26 and alterations to clause 24.  This meant the legal opinion given to Graham and Alan was provided on a document that was later secretly altered, apparently by the Legal Counsel who would most benefit from the alterations.
  • On 19th April 1994, when Mr Goldberg and Mr Hunt were assessing the not-yet-altered version of the agreement, they could not have known alterations would be made AFTER they had completed their assessment, neither did they know that another clause, 10.2.2, had already been changed by the removal of the words “each of the Claimants’ claims”. Neither Graham Schorer nor Alan Smith knew of this change either.
  • On 21st April 1994, the day Graham Schorer and Alan Smith signed the FTAP in the Special Counsel’s office, no reference was made to the alterations by Mr Bartlett or anyone else. The claimants were told they had to sign the agreement before the close of business that day because Mr Bartlett’s instructions were that the TIO would not administer the already-signed Fast Track Settlement Proposal – the earlier commercial agreement.

Questions:

  • Would Mr Hunt have advised Graham and Alan to sign the altered agreement, had he received that document instead of the one faxed by Caroline Friend?
  • Would Dr Hughes have advised Graham and Alan to sign the altered agreement, had he been aware it was not the agreement he and Caroline Friend, believed he was to arbitrate under?

20th February 1996:  Telstra provides Dr Hughes, with a list of the names of the 48 telephone exchanges that routed through the North Melbourne exchange, which serviced Golden Messenger. (GS-CAV 237)

11th March 1996:  At point 11, on page 15 of Telstra’s Briefing Document B003 report (Appendix E) is noted:-

“On 11 March 1996 the Claimants’ complained of receiving 3 different recorded voice announcements (RVA’s) when calling mobile 019 925xxx and 041xxxxx. The Claimants’ advised of the exchange code heard at the end of the RVA’s. The exchange code given appeared to be a Mobile Network exchange. Clear codes indicate that the fault existed in privately maintained equipment. {Ref: J05314 to J05315 & J05137 to J05141}” (GS-CAV 238)  

18th March 1996:  Oren Zohar, from FHCA (the TIO-appointed arbitration resource unit), sends a fax to Dr Hughes stating:-

“Telstra has proposed that the meetings be held on Monday, Wednesday and Friday week commencing 25 March 1996. Graham Schorer has yet to confirm whether these dates are acceptable and he has advised that he will contact me once he has spoken with George Close and his solicitor, Bill Hunt.” (GS-CAV 239)

21st March 1996:  Dr Hughes responds to Oren Zohar’s fax, stating:

I am prepared to be present at the proposed informal meeting

I do not consider the meeting should be transcribed. (GS-CAV 239)

  • Why was Dr Hughes concerned about a simple directions hearing being transcribed?
  • Was Dr Hughes worried because Alan Smith was raising the arbitration issues with Laurie James, the President of the Institute of Arbitrators Australia?

On 18th and 19th January 1996, Alan Smith raised a number of complaints with Laurie James concerning the unethical way in which his arbitration was conducted (see Dr Hughes Target file for this date).

In the Alan Smith CAV – Dr Hughes Target file for the date of 16th February 1996 it is shown that Dr Hughes’ letter of 16th February 1996 misled Laurie James concerning Alan’s arbitration.  There is also no reference in this letter from Dr Hughes admitting he had advised the TIO, on 12th May 1995 the Arbitration Agreement was not credible (see also GS-CAV 239-D).

The fact that Dr Hughes was seeking advice from Mr Pinnock, on what he should or should not disclose to Laurie James, (about the conduct of the COT arbitrations) during the time he was arbitrating on Graham arbitration raises more questions about Hughes’ independence.

19th March 1996:  William Hunt’s file note states:-

“At or about the same time Bell Canada had Telstra doing reports on its service in relation to Golden’s receipt of same.  At or about the same time similar tests were being done on the Telstra equipment  relating to Smith and the results of thoses [sic] cover the demonstration that they could not have been done. …”

“As to the second Bell Canada test Schorer has on disk the [sic] Telstra abandoned certain tests as to part from certain exchanges. One can only assume that the reports were unsatisfactory to Telstra or supportive of Schorer.”(GS-CAV 240)

25th March 1996:  George Close, Graham’s Technical Advisor informs Graham:-

“You are aware, I have been assisting a number of CoT members in preparing their technical submission that demonstrates reasonable causal link between telephone service difficulty and faults experienced to call losses to be used in support of their claims being processed under arbitration. …”

“Telstra’s Use Of Final Testing Results As Evidence:

Telstra has only employed successful final test call run results as a defence in response to all CoT claim submissions made under Arbitration.

These final tests comprise over 50% of the Telstra defence evidence to establish the Integrity of Telstra equipment, bearers, network performance and the degree of congestion. …”

(b)Prior to performing final testing, a series of pre-dial test are carried out and subject to the resulting grade of service experienced, a decision is made to either run the final tests, fix the fault(s) or block out the offending service (for future fixing).”

“Thus by Telstra using only final test runs as defence evidence attesting to be proof of service levels provided in response to a complaint made without including the pre-dialled test results places Telstra in a classic win-win situation as the final test runs by design are meant to produce a successful result once the complaint has been fixed. …”

“In essence, the use of Telstra’s final test results should be totally disregarded as evidence unless pre-dial information, tests and faxes accompany the final test results attested under statutory declaration.” (GS-CAV 241)

It’s interesting to note that in the AUSTEL COT Case Report, at point 5.48, is stated:-

“Telecom’s approach to the required testing regime was also less than positive. AUSTEL had required the testing to occur in business hours. Telecom maintained that it interpreted this requirement according to the nature of the business and, had it done so in good fault, it would have been acceptable. That was not, however, the outcome. In one case (Mr Schorer of Golden Messenger) only 15% of the test calls related to the complainant’s business hours, an approach scarcely consistent with Telecom’s advice that it wanted to establish the ‘fundamental integrity’ of the approach and that it wanted the results to be ‘beyond’ reproach.”

27th March 1996:  Mr Pinnock assists Dr Hughes in his letter to Laurie James, President of the Institute of Arbitrator (Australia).  Mr Pinnock also attacks Alan’s credibility by knowingly misinforming Mr James regarding Alan ringing Dr Hughes’ wife one morning, noting:-

“Mr Smith has admitted to me in writing that last year he rang Dr Hughes’ home phone number (apparently in the middle of the night, at approximately 2.00am) and spoke to Dr Hughes’ wife, impersonating a member of the Resource Unit.(AS-CAV 209)

Who advised Mr Pinnock that Alan telephoned at approximately 2.00 am?  The telephone account for the evening in question confirms Alan called at 8:02 pm (AS-CAV 210).

Questions:

  • Why did Mr Pinnock not send Laurie James a copy of the alleged letter from Alan to him admitting Alan telephoned the arbitrator’s wife at 2.00 am in the morning?
  • Did Mr Pinnock deceive Mr James (because this letter never existed) because he and Dr Hughes did not want any investigation by the Institute of Arbitrators into issues that should have been addressed (but were not) during Alan’s arbitration?

28th March 1996:  Mr Pinnock writes to David Hawker MP in response to Alan’s allegations to Mr Hawker, that the incorrect billing issues he raised in his claim were not investigated, addressed or fixed during his arbitration. Mr Pinnock states:-

“It is incorrect for Mr Smith to assert that the TIO has avoided dealing with over-charging practices. My office refers questions of general charging practices to AUSTEL and deals with particular problems itself. Mr Smith’s allegations of over-charging for his service formed part of the claim submitted to the Arbitrator. Consequently, this matter was dealt with in his arbitration.” (AS-CAV 211)

Of course, the matter was not dealt with in Alan’s arbitration and AUSTEL advised Mr Pinnock so, on 3rd October 1995 by giving the TIO a copy of AUSTEL’s letter to Telstra, which stated the billing faults Alan raised in his claim were NOT addressed (AS-CAV 201).  Mr Rundell of FHCA also admitted, in writing, to John Pinnock that he asked DMR and Lanes, (the Technical Resource Unit), NOT to investigate or address the billing documents Alan Smith submitted in his claim (AS 104).  Mr Pinnock has not behaved independently or impartially in Alan’s matters.  Knowingly lying to David Hawker MP, Alan’s local Federal Member of Parliament, is beyond contempt.

Telstra disconnected Alan’s Gold Phone in December 1995, even though they knew that he was refusing to pay only the refuted faulty part of this account that originated in the exchange at Cape Bridgewater.  Alan arranged for Telstra to disconnect his 008/1800 number in December 1997, because of the endless billing and short duration calls generated on that line which apparently could not be fixed.

Brief Billing Summary

Alan jumps 18 months in this particular billing summary to show it took from Mr Pinnock’s letter to Mr Hawker of 28th March 1996 until October 1997 to convince Mr Hawker to investigate the continuing billing problems, which were twofold.

  • The lines often locked-up for periods unnoticed. It was quite common for Cathy and Alan, after terminating a call, to lift the receiver only to find the line still open.
  • This billing fault also disallowed intended calls to receive an engaged signal.

27th May 1996:  Mr Pinnock writes to Alan noting:-

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 service. As this matter was raised in your claim, it would have been considered by the Arbitrator, regardless of Telstra’s failure to respond. …”

“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-CAV 215)

As with AS-CAV 213, Telstra waited until five months after Dr Hughes deliberated on Alan’s claim before attempting to address the 008 billing arbitration issues.

25th June 1996:  Alan writes to Mr Pinnock noting:-

Your statement to Mr Laurie James, President of the Institute of Arbitrators, regarding a telephone call to Dr Hughes. ..”.

“To date I have had no response from you, personally, as to why you chose to tell Mr James that I phoned Dr Hughes’ residence at 2.00am on 29th November 1995 and that, in making this alleged call, I behaved unethically. (AS-CAV 216)

When Alan later received a copy of this letter back from the TIO’s office, a handwritten note had been added, stating:-

John, we are still waiting on a response from Gordon [Hughes] on this.”

Although Mr Pinnock apologised, in a roundabout way, for writing to Laurie James in this manner, Alan has never received any reason as to why Mr Pinnock was intent in blackening Alan’s name as he did.

It would be reasonable to conclude that the Institute of Arbitrators, would believe an Ombudsman, (the TIO) over Alan, who was making a number of allegations against the conduct of his arbitration.

Why isn’t anyone listening to Graham and Alan?

26th June 1996:  Alan pens another letter to Mr Pinnock, in disgust:-

“I find it very sad to be in possession of so many FOI documents which support my allegations that many, many copies of internal correspondence I forwarded to Dr Hughes during the FTAP was never seen by the Resource Unit or Telstra.”

“It is equally sad that copies of Telstra letters, which were also part of the FTAP, were not forwarded to me.” (AS-CAV 217)

When this letter was later returned from the TIO, it also had a handwritten note 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.”

Exhibit AS 64 is a letter dated 25th March 1994 from Philippa Smith to Mr Blount.  This is important because, in the third paragraph on page three, Ms Smith confirms Mr Bartlett and Warwick Smith knew Telstra were holding up the settlement/arbitration process at that stage.  Even after Graham and Alan had signed the settlement (FTSP) agreement, when Alan approached Warwick Smith regarding FOI documents Telstra was not providing, he advised Alan that, as long as he submitted the documents into arbitration, this would help facilitate the process and assist the arbitrator.

It is now obvious many of the documents that Dr Hughes, Graham and Alan should have seen, may well have been vetted and discarded by FHCA.

11th July 1996:  Sue Harlow from AUSTEL writes to Senator Richard Alston, Minister for Communications. She notes:-

“I am pleased to provide AUSTEL’s sixth status report on Telstra’s progress in implementing the recommendations of AUSTEL’s April 1994 The COT Cases Report. …”

Also included in AUSTEL’s report is a report by the Telecommunication Industry Ombudsman (TIO) on the Status and Progress of the Fast Track, Special and Standard Arbitration Procedures. “The TIO is critical of Telstra’s behaviour and attitude in relation to these arbitrations.”

Sue Harlow, Deputy TIO (during Alan’s arbitration), left a note for Warwick Smith on 16th May 1994 saying:-

“Attached is a fax received from Alan Smith regahttps://www.absentjustice.com/wp-admin/edit.php?post_type=pagerding access to FOI documents at Telecom.”

“Smith is alleging that documents are not in chronological order and blanking done for earlier FOI inspections has made the collection of appropriate documentation uncertain and diminished the opportunity for him to satisfactorily present his case.”

“Mr Smith has demanded a TIO member be present at today’s examination of papers by him at Telecom. …”

“He left an example of this with us…” (AS-CAV 78)

No one came from the TIO’s office the next day to assist me in inspecting the documents.

On page 12 of AUSTEL’s report, under the heading Conduct of the Arbitrations, is:

“The TIO believes some comment on the behaviour and attitude of Telstra in the conduct of these Arbitrations is warranted. …”

“The TIO believes that Telstra has, in all claims, responded in an overly legalistic manner. It has shown a tendency to deny liability under every potential clause of action on the basis of perceived statutory and contractual immunities. It has provided large and detailed defences, often out of proportion to the size or complexities of claims. It has lodged lengthy and detailed request for further and better particulars in most arbitrations. In short, while the arbitration procedure has sought to relax the legal burdens, Telstra’s conduct has certainly not. …”

“There have also been considerable delays in the provision of claim and defence materials and further information from both claimants and Telstra. Telstra has taken excessive time in the provision of material requested under FOI.” (GS-CAV 242)

22nd July 1996:  Dr Hughes writes to William Hunt, noting:-

“I have considered the submission of the parties in relation to the request by the claimant for an adjournment of this arbitration until January 1997.”

“The essence of the claimant’s request is that: …

  • Telstra has not been co-operative to date in responding to FOI requests but (as I understand how the argument is put) further information might be usefully produced it Telstra is granted an adequate period of time to produce it.”

“Telstra has responded by asserting:

  • the arbitration agreement provides for the completion of steps within agreed time frames;
  • the history of this arbitration demonstrates that Telstra has taken all reasonable steps to provide the claimant with relevant information; …”

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

  • it is not, however, essential that all relevant information be available to the claimant at the time the Statement of Claim is submitted; …
  • I do not believe the claimant would be prejudiced by submitting a claim based on information presently available to him;” (GS-CAV 243)

Please note: the FTAP agreement, at clause 10.2.2, states:-

“The Arbitrator will make a finding on reasonable grounds as to the causal link between the alleged service difficulties, problems and faults in the provision to the Claimant’s telecommunication services and the losses claimed.”

As mentioned previously, on 20th February 1996, Telstra provided Dr Hughes with a comprehensive list of the 48 separate exchanges that were routed through to the North Melbourne telephone exchange servicing Golden Messenger

If Telstra wouldn’t provide Graham Schorer with the CENTOC-TRAXE congestion data for those 48 exchange routes, how could Dr Hughes expect Graham to be able to prove call losses associated with those 48 exchanges? For example, if 15 of the 48 exchanges suffered 14 per cent congestion during peak hours (en-route to the North Melbourne exchange) and 18 of the remaining 33 exchanges suffered eight per cent congestion in peak hours, how could Graham differentiate between a reasonable causal link for the lost calls without the CENTOC-TRAXE data for all 48 exchanges?

30th July 1996:  Mr Pinnock drafts a letter intended for Alan (AS-CAV 219).  Alan did not see a copy of this letter until 2001/2.  The handwritten list in the top right corner of this letter included dates that coincided with a number of arbitration letters that were withheld from both Dr Hughes and Alan during his arbitration AS 129).

COMMENTARY:

  1. The letters referred to are attached at Exhibit AS 127 to Exhibit AS 129.
  2. The handwriting exhibit (AS-CAV 219) looks to be the same as Ms Di Mattina’s handwritten note referring to “opening a can of worms”, on the TIO document (AS-CAV 184).
  3. Alan only received these letters under the TIO Privacy Policy Act, late in 2001 and early in 2002.

Ms Sussan Hodgkinson’s Memorandum to Dr Hughes

2nd August 1996:  In this memo, Ms Hodgkinson knowingly misinforms Dr Hughes when she states:-

“I refer to your letter dated 31 July 1996 (received 1 August 1996) concerning Mr Smith’s letter dated 25 June 1996. I have not received a copy of Mr Smiths [sic] letter however I have reviewed Matt Deeble’s summary and provide the following information concerning Mr Smith’s allegations: …”

“At the time of the letter from Austel, Mr Smith’s telephone problems were being addressed in the Arbitration. Due to a number of factors including confidentiality, it was felt not appropriate to answer Austel’s comments in detail, in particular the issue was under consideration in the Arbitration. As agreed the Resource Unit did not response to the AUSTEL letter.” (AS-CAV 220)

One of the documents, dated 16th December 1994 in this memorandum was addressed to Dr Hughes and had three AUSTEL and Telstra billing documents attached (also see AS-CAV 129).

The Arbitration Agreement’s clause 6 is clear regarding the supply of documents to the defence and claimants.  “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.” (AS-CAV 130)

Mr Deeble, who Ms Hodgkinson refers to, was a lawyer seconded from Minter Ellison to the TIO’s office.  Why didn’t Mr Deeble provide Ms Hodgkinson with a copy of Alan Smith’s letter to Mr Pinnock on 25th June 1996?  Also, when Mr Deeble received a copy of Ms Hodgkinson’s letter of 2nd August 1996 why didn’t he immediately advise the TIO and Dr Hughes that Ms Hodgkinson was incorrect when she wrote only one AUSTEL letter was withheld from Dr Hughes?  Alan Smith provided examples of numerous letters sent by Telstra to Dr Hughes that were withheld during Alan’s arbitration.  The evidence included handwritten notes by John Pinnock regarding how serious this withholding of documents from Graham and William Hunt was, during Graham’s arbitration.  This evidence was not released until 2001 when Mr Pinnock provided documented proof to Alan confirming how seriously the TIO saw these issues.

16th August 1996:  Mr Pinnock writes to Alan re his concerns that Mr Paul Howell, author of the DMR and Lane Technical Report, didn’t sign off on the report.

“I note that the Arbitrator was not obliged to forward a copy of this covering letter to you, as it did not, strictly speaking, form part of the Technical Evaluation Report.” (AS-CAV 221)

Alan does not believe Paul Howell signed this letter on 30th April 1995.

Exhibit (AS-CAV 222), is a copy of a Statutory Declaration Alan provided Senator Helen Coonan’s office 23rd February 2006.  Alan states:-

“I collapsed with a suspected heart attack and was rushed to hospital by ambulance. On my return, five days later, Mr Paul Howell of DMR Canada telephoned me at home. I had not spoken to Mr Howell before, but he told me he had heard that I had been in hospital and was phoning to wish me well. Mr Howell then went on to tell me that my arbitration was the worse process he had ever been associated with and that, had it been conducted in North America, it would never have been allowed to continue under such an atrocious administration. I told him I appreciated his concern, but was disappointed with his technical report and asked him why he had not signed it off. He relied in words to the effect that he hadn’t signed the report.”

Question:

If Paul Howell was telling Alan the truth – that he did not sign off his report – then who wrote the 30th April 1995 letter and forged Mr Howell’s signature?  The 30th April 1995 letter was attached to the 16th August 1996 letter provided to Alan by Mr Pinnock (AS-CAV 223).

15th October 1996:  Dr Hughes writes to William Hunt, noting:-

“I agree with Telstra that it is important for this arbitration to be brought to a conclusion. Whilst I express no view as to the adequacy of otherwise of the claim documentation, Telstra is accurate in its assertion that any lack of particularity in the claim documentation may be to the disadvantage of the claimant. …

“On the question of the production of further particulars by the claimant as requested by Telstra, and the production of further documentation by Telstra as foreshadowed by the claimant, I find it unnecessary to express any view at this stage. It should be emphasised that the Arbitration Agreement does not provide for discovery but I do have the power under 7.6 to require either party to produce further documentary information.” (GS-CAV 245)

Telstra’s Minutes of 17th February 1994 Arbitration Hearing confirm after Mr Schorer stated, “that he needed documents from Telecom to prepare his case and without this material, he could not go into arbitration”, Dr Hughes advised Mr Schorer (in front of Peter Bartlett, TIO legal counsel) that:-

  • the procedure is put on hold until all the documents are exchanged in accordance with the FOI procedure;
  • the arbitration procedure commences and then the arbitrator gives appropriate directions for the production of documents.

These Minutes then go onto state:

“Mr Hughes indicated that one party can ask for documents once the arbitration has commenced. Mr Hughes advocated this course of action as more effective and that as arbitrator he would not make a determination on incomplete information.”

It is most relevant that we compare Dr Hughes’ statement to William Hunt:-

“I should emphasise that the Arbitration Agreement does not provide for discovery,” (GS-CAV 245)

with his previous statement made to Warwick Smith on 12th May, 1995:-

“we did not allow sufficient time in the Arbitration Agreement for inevitable delays associated with the production of documents, obtaining further particulars – request for further particulars are, I think, unavoidable – although the emphasis in the arbitration process is upon a quick resolution of the dispute,” – and – “It is my view that if the process is to remain credible, it is necessary to contemplate a time frame for completion which is longer than presently contained in the Arbitration Agreement.”  

Surely, by now, Dr Hughes would have realised that he should have refused to continue with an Arbitration Agreement that was not credible because it did not allow enough time for discovery.

28th October 1996:  William Hunt responds to Hughes’ letters of 15th October and 22nd July 1996, noting:-

“In your letter of 22nd July 1996 you stated:–

‘It is not however essential that all relevant information be available to the claimant at the time the statement of claim is submitted. …”

“‘I do not believe the claimant would be prejudiced by submitting a claim based on information presently available to him.’ …”

“As you are aware, the claimant has been making, for a considerable time, requests to Telstra pursuant to the Freedom of Information Act to supply information about its various service faults and difficulties upon which his claim is based.”

“According to our instructions those requests for information have either not been complied with, or inadequately complied with.”

“We note further that in your letter dated 15th October 1996 you state that you find it unnecessary to express a view on the question of the production of further documentation by Telstra at this stage. …”

“The claimant has ascertained that Telstra holds on four discs an index of all information held by it relating to service difficulties and faults and technical matters. He has made a request for the discs pursuant to the Freedom of Information Act but they have not been forthcoming. The information indexed on the discs would, the claimant believes, cover the matters which form the technical basis of his claim. …”

“According to our instructions it is believed the four discs would have been easily located within the Telstra organization, and there is no valid reason why they should not be made available promptly.” (GS-CAV 246)

1st November 1996:  Dr Hughes writes to William Hunt, noting:-

As indicated previously, I may well exercise my discretion under rule 7.6 to require the production of further documentation from Telstra. I am most reluctant to do so, however, until I have at least received Telstra’s defence. This will enable me to assess the parameters of the claim and form my own view (perhaps after receiving submissions from the parties) as to what further documentation, if any, should be provided.” (GS-CAV 247)

Please note the phrase used by Dr Hughes:-

“This will enable me to assess the parameters of the claim and form my own view”,

should be compared with the phrase he used in his letter to Warwick Smith, 12th May 1995 when he states:

“In summary, it is my view that is the process is to remain credible, it is necessary to contemplate an time frame for completion which is longer than presently contained in the Arbitration Agreement.”

Dr Hughes should have disclosed his view regarding the inadequate timeframes in the Arbitration Agreement to all parties associated with the arbitration.  This is the very reason Graham was still unable to submit a complete claim.

1st November 1996:  John Pinnock puts William Hunt on notice, stating:-

“I understand that you have responded to the Arbitrator in relation to his directions of 15 October 1996. I understand that a copy of this correspondence was provided to Telstra but not to this office or to Mr Peter Bartlett, the Special Counsel to the Administrator.”

“I advise that clause 6 of the Fast Track Arbitration Rules provides that a ‘copy of all documents are correspondence forwarded…by a party to the Arbitrator shall be forwarded to the Special Counsel’. The common practice in other arbitrations has been for a copy of documentation and correspondence to also be provided to the TIO as Administrator of the procedure.

“In future, would you please provide copies of your formal correspondence in this matter to the Arbitrator, Telstra, the TIO and the Special Counsel.” (GS-CAV 248)

27th November 1996:  John Pinnock writes to William Hunt, stating:-

“I enclose two copies of Telstra’s Defence in the above matter consisting of six sealed boxes. These documents were received by my office on 26 November 1996.

“I also enclose a copy of Telstra’s covering letter setting out the volumes contained in these boxes. Would you please advise me if you have not received all the documents set out in that letter.”

“Please note that Telstra is still to provide certain documents. They will be forwarded to you as soon as they arrive at the TIO.” (GS-CAV 249)

Please note: clause 6 of the Arbitration Agreement only states:-

“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.”

28th November 1996:  William Hunt’s file note records:-

“I rang Mr Pinnock to ask why he is writing me letters, why matters are coming to me through him. I rang about 4.15 pm and was told by the receptionist that he wasn’t available. …”

“I later spoke to Mr Pinnock who rang me back and told me that it was part and parcel of the requirements under the arbitration procedure whereby Telecom had to send up things through him and he wouldn’t be reading it all unless he was required to for some person. Ditto with Ferrier Hodgson.” (GS-CAV 250)

Why was it so important for the TIO to receive the claim and defence documents before Dr Hughes?  In Alan Smith’s arbitration, numerous claim and arbitration procedural documents disappeared en route to Dr Hughes office, before he was able to assess this material.  Were similar documents about to disappear in Graham Schorer’s arbitration as well?

In his letter of 11th July 1994 to Warwick Smith, Steve Black wrote:-

“If the resource unit forms the view that this information should be provide to the arbitrator, then Telecom would accede to the request.”

Telstra and the Resource Unit were working together and the Resource Unit had access to Telstra information before it was actually released into the arbitration process.  The Resource Unit made decisions about the relevance of the material before they directed Telstra to provide the information to the arbitrator.

Exhibit 13, in Graham Schorer’s CAV Relevant Information file, contains 14 letters between Steve Black, Warwick Smith, AUSTEL and the Commonwealth Ombudsman’s office, showing Graham had good reason to question the TIO’s office.

10th January 1997:  John Pinnock writes to Alan Smith:-

“I refer to your letter 31 December 1996 in which you seek to access to [sic] various correspondence held by the TIO concerning the fast Track Arbitration Procedure.

The arbitration of your claim was completed when an award was made in your favour more than eighteen months ago and my role as Administrator is over.

I do not propose to provide you with copies of any documents held by this office.” GS-CAV 251)

15th January 1997:  Graham submits his reply to Telstra’s defence, stating:-

“Because of the format of the Telstra defence as it is in narrative style, it is difficult to distinguish between that which is argument or proposition (as distinct from factual evidence) and that which is a formal statement of defence. In consequence the Claimants in this reply refer only to Telstra’s ‘Principal Submissions’ and to its ‘Legal Submissions’.” (Graham Schorer – CAV Relevant Information file exhibit 12)

24th January 1997:  Graham Schorer writes four startling letters (see GS-CAV 252) to the three people mentioned here.

“I enclose my correspondence to

  • Mr Ted Benjamin (our Ref. 3060) re Bell Canada documents not discovered identified and supplied.
  • Mr John Pinnock (our Ref. 3057 and Ref. 3059) re Arbitration costs and other related matters.
  • Ms Melanie Bleazby (our Ref. 3058) re FOI requests. …”

“Based upon Telstra’s current response to my recent FOI application (already requested under Arbitration and covered within the scope of my 21 April 1994 FOI application), it would appear Telstra had introduced another new face to add to the confusion while their conduct goes from bad to worse.” (GS-CAV 252)

Dr Hughes knew some of the information Telstra did not supply to Graham related to the Bell Canada International test results, in relation to the North Melbourne telephone exchange.

Dr Hughes’ letter of 2nd May 1994 shows Telstra gave the BCI Report to Dr Hughes and he supplied it to the Resource Unit to assess as part of the arbitration procedural information.  In his award concerning Alan’s matter, Dr Hughes refers to accepting both reports into evidence during Alan Smith’s arbitration

As mentioned previously, Dr Hughes, Mr Pinnock, Mr Benjamin and Ms Di Mattina were all provided with evidence proving that, when Telstra used the BCI Cape Bridgewater Addendum Report as defence material, they already knew that the tests were fundamentally flawed.  Although the information concerning the flaws in the BCI Cape Bridgewater Report was received after Alan’s arbitration, Dr Hughes should have immediately instructed Telstra and the TIO Legal Counsel to withdraw all the BCI information from all of the arbitration procedures.

4th February 1997:  Dr Hughes writes to William Hunt, stating:-

“I have now had an opportunity to peruse the claim, defence and reply documentation.”

“A number of outstanding matters must now be addressed in order that this arbitration can proceed. Each party had foreshadowed in previous correspondence that it requires information from the other; in addition, I pointed out in my letter of 15 October 1996 that, upon receipt of the initial submissions of the respective parties, I would be in a position to make my own assessment as to whether further documentation (if any) should be produced by either party. …”

“I accordingly invite each party to advise me within seven (7) days as to whether it still requires the production of information or other material from the other party and, if so, I require a full description of that information or other material.” (GS-CAV 253)

Who’s kidding who?

4th February 1997:  John Pinnock writes to Alan Smith, stating:-

“I reject completely your assertion that Dr Hughes and David Read ‘conspired to breach the rules of the Arbitration’”.

“Similarly, I reject your assertion that there was or ever has been a conflict of interest between Mr Benjamin’s membership of the TIO Council and any role he may have had in relation to the supply of FOI documents.” (GS-CAV 254-A)

Exhibit GS-CAV 254-B shows Dr Hughes did breach the arbitration rules by corresponding with Telstra during the COT arbitrations without copying that correspondence onto the claimants.

Although Mr Pinnock rejected Mr Benjamin’s membership of the TIO Council created a conflict of interest, this is not the way Senator Schacht saw the situation (see Senate Hansard records of 26th September 1997 discussed shortly).  This conflict of interest was also evident when Mr Benjamin, on 30th November 1993 during the COT Fast Track Settlement Proposal, chose to relay various COT issues, discussed during a TIO Council Meeting he attended, back to his colleagues at Telstra’s Head Office.

12th February 1997:  Exhibit GS-CAV 255 is a 12-page letter from Telstra to Dr Hughes mirroring a similar request for the production of documents and further better particulars in Alan Smith’s arbitration.  It was the same production of documents, obtaining further particular issues, that concerned Dr Hughes when he wrote to Warwick Smith 12th May, 1995 stating:-

  • “the time frames set in the original Arbitration Agreement were, with the benefit of hindsight, optimistic;
  • In particular, we did not allow sufficient time in the Arbitration Agreement for inevitable delays associated with the production of documents, obtaining further particulars and the preparation of technical reports;

“In summary, it is my view that if the process is to remain credible, it is necessary to contemplate a time frame for completion which is longer than presently contained in the Arbitration Agreement.”

And here he was, still troubled about the production of documents and obtaining further particulars using the same Arbitration Agreement he condemned 15 months prior.

14th February 1997:  William Hunt responds to Dr Hughes’ letter:-

“We refer to your letter of 4th February, 1997 herein. Prior thereto on 24th January last, Mr Schorer on behalf of the Claimants herein, had sought an immediate meeting with the Administrator (Mr Pinnock) to discuss, inter alia, matters affecting the FTSP and the FTAP which prevent the Claimants from obtaining essential information from Telstra through FOI procedures. …”

“Alternatively and preferably it is requested a Directions Hearing be scheduled for that day (or later as may suit you or Telstra’s convenience) to discuss and make submissions to you on the problems created for the Claimants by the continuing lack of material being made available to the Claimants under FOI procedures.” (GS-CAV 256)

14th February 1997:  Graham Schorer’s letter to Telstra’s John Armstrong, copied to John Pinnock, Dr Hughes, Peter Bartlett, Ferrier Hodgson, Lane Telecommunications, John Wynack and William Hunt, states:-

“Further to our correspondence dated 24 January 1997 Ref.3060, it is drawn to Telstra’s attention that after 23 November 1993, Mr Ian Campbell, on behalf of Telstra, undertook to Graham Schorer to arrange the immediate supply of the documents, working papers, work orders, instructions, memos etc created by Telstra employees who were involved in supporting and/or performing the tasks devised by Bell Canada to test specific parts of the Telstra network that formed the basis of the first of the Bell Canada Reports.” (GS-CAV 257)

This letter would have made it quite clear to all those who received it that the TIO should never have allowed Telstra to submit this report to the arbitrator.  Dr Hughes and John Pinnock, who were among those receiving this letter, also received a letter dated 20th June 1995, from Alan Smith, confirming Telstra also used the BCI Cape Bridgewater Addendum Report as defence material despite knowing it was fundamentally flawed.  It remained in the COT process and then, on 14th February 1997, 44 months after Dr Hughes and John Pinnock were alerted to the flaws in the report, it is again being challenged by another COT claimant.

Once Alan Smith’s letter of 20th June 1995 reached Mr Pinnock and Dr Hughes, they should have immediately told Telstra it was illegal to use a material known to be flawed and to withdraw all the Bell Canada reports relating to the remaining COT claimants until an independent audit of the BCI reports could be conducted.  Had Mr Pinnock and Dr Hughes directed Telstra to withdraw the BCI reports, then they would have reduced some of the problems associated with the poor timeframe issues related to Graham’s discovery matters. Since neither Mr Pinnock nor Dr Hughes ordered the withdrawal of the flawed BCI reports, they both contributed to the problems with Graham’s discovery process.

18th February 1997:  Dr Hughes responds to William Hunt’s letter of 14th February 1996 noting-:

“In its response of 12 February, Telstra submitted that it had no case to answer; in the alternative, it requested the production of further specified information from your client.

In the absence of a submission by your client relating to the production of further information from Telstra, I propose to proceed with a ruling as to what documentation, if any, must now be produced by each party.”

“My determination could be along any of the following lines:

  • one or both parties are to produce additional material, as specified by me. In relation to your client, this may or may not be the documentation requested by Telstra in its letter of 12 February 1997. In the case of Telstra, I would take into account past submissions by your client; or
  • neither party need produce further documentation, and the Resource Unit to now proceed with its own assessment of the financial and technical issues; or
  • neither party need produce further documentation, no Resource Unit involvement is required and the matter will proceed to a final award forthwith; or
  • in accordance with Telstra’s submission, there is no case to answer and the claim is dismissed.” (GS-CAV 258)

24th February 1997:  Mr Pinnock writes to Alan, noting:-

“Since the Arbitrator delivered his award, you have written many letters to me asserting, variously, that the Arbitrator, and/or the Resource Unit, erred in their duties under the Arbitration agreement.” (AS-CAV 225)

25th February 1997:  William Hunt responds to Dr Hughes’ letter of 18th February 1997, stating:

“The FTSP arose from an acceptance by Austel that the Claimants had cause for complaint against Telstra, that reasonable proof of the nature and extent of the complaint could come only from within Telstra, and that it was reasonable in Telstra’s interest for the sorting out of the dispute and the amount of compensation payable (if any) to be kept confidential. …”

“In your letter of 4th February to the parties in dispute, and to others you wrote thus:

‘I am prepared to make a ruling on this matter but would prefer the parties to reach agreement. In any event, I require submissions from each party as to what documents or other material should now be produced.’”

“Based on long running and fruitless experience in dealing with Telstra about the provision of necessary information under FOI procedures the Claimants feel it would be impossible to reach any even faintly useful agreement with Telstra about ‘what further documentation (if any) should be produced’…”

“Because of the continual lack of information being provided by Telstra (whether or not under FOI procedures or as indicated by you) the Claimants simply cannot at present usefully supply you with a list of all the documentation it requires or provide you with ‘a full description of that information or other material’.”

“The Claimants again respectfully request you re-consider your rulings contained in your letters of 4th and 18th February, and schedule a Directions Hearing for 11th March or later as you may consider appropriate to enable submissions to be made to you on the problems created for the Claimants by the continuing failure of Telstra to supply information in breach of the basis on which the FTSP and FTAP were entered into.” (GS-CAV 259 to 323)

Continued on Consumer Affairs Victoria (CAV) Part 3

For the purpose of this report, I shall refer to myself as either Alan Smith or Alan. It is also important to point out that Part 3 of our CAV reporting is still being edited as of April 2020:- thank you

Part 3

26th February, 1997:  A 54-page transcript of a meeting held on this day is attached to the Graham Schorer Relevant Information document, at exhibit 7.  John Pinnock, Graham Schorer, William Hunt, Peter Bartlett, Lucy McCullagh (Minter Ellison) and John Armstrong (Telstra) attended the meeting, regarding a variety of issues associated with the FTSP and the FTAP.

Page 15 records Graham telling Mr Pinnock:

“Now, also at that meeting, it was disclosed for the first time, it was # # disclosed on the previous day, on 20th [20th April 1994], that Ferrier Hodgson and DMR Australia refused to accept the appointment as the Resource Unit under the FTAP, while having indemnified Telstra for amounts awarded as penalties of whatever for failure to act impartially – I don’t know the correct wording, but it was in the draft up the left column.

Please note

On 20th April 1994 Graham and Alan Smith met with Graham’s solicitor, William Hunt, to discuss the latest FTAP agreement (dated 31st March 1994) which was faxed to Mr Hunt the previous day by Caroline Friend, Dr Hughes’ secretary (see Graham Schorer’s Relevant CAV Information file exhibit 17).  Graham, Alan and Mr Hunt discussed whether the $250,000 liability cap for FHCA and DMR (Australia) was enough, considering the size of the claims, and finally agreed it was better than no amount at all.  Graham and Alan cannot recall why the Special Counsel was not named in the agreement (nor had a liability cap for conscious or deliberate negligence or wrongdoing), but they believed the Special Counsel’s role, as the Legal Advisor to the process, worked similarly to the arbitrator’s liability. See clause 24:-

“Neither the Administrator nor the Arbitrator shall be liable to any party for any act or omission in connection with any arbitration conducted under these rules save the Arbitrator (but not the Administrator) shall be liable for any conscious or deliberate wrongdoing on the Arbitrator’s own part.”

Pages 21 to 24, of the 26th February 1997 transcript records Graham raising concerns regarding the impartiality of some people involved in the process, particularly the close relationship between Telstra representatives and certain members of Ferrier Hodgson Corporate Advisory (FHCA) as correspondence to the arbitrator, was passing via the TIO’s office to FHCA without being copied to the COT claimants.  On page 24, Graham explains to Mr Pinnock, “That’s correspondence between either the Resource Unit, Telstra and/or the arbitrator without the COT 4 being a recipient of that correspondence.

Mr Pinnock maintains that according to his knowledge, all the material passed through his office (at least since he was appointed as Ombudsman) was copied to the other party when it was appropriate unless human error had been involved.  Graham does not hold Mr Pinnock responsible for anything occurring before Mr Pinnock was appointed, but he is most concerned about information not being correctly passed on now (including documents requested under FOI)

Finally, Mr Pinnock admits that he knows of at least one letter Telstra addressed to Dr Hughes in August 1994 that was not copied on to Alan Smith.  He states:-

“It certainly is not cc’d to Alan, at least on the face of the document, whether Gordon Hughes subsequently sent it to Alan I couldn’t tell either, I mean that would depend on looking at his files, the point of it however, and I’ve noted this myself the Telecom letter actually seeks a direction from Gordon Hughes as to a procedure or process issue under the arbitration and if such a direction was sought and Gordon was prepared to give he certainly wouldn’t have given it without first inviting Alan Smith to comment on it.”

The discussion continues:

Graham: “Not necessarily, and what I’m also saying is if Telstra had sought a direction of the arbitrator it should have been cc’d to Alan it should be cc’d.”

Mr Pinnock: “I understand that but you’re saying that it is selective.”

Graham: “Of course I am.”

Mr Pinnock: “All right now, well what’s your example to show that it is selective as opposed to an oversight?”

This discussion raises the following questions about this meeting:

  1. Why didn’t Mr Pinnock admit he knew Alan Smith’s arbitration was totally derailed by FHCA withholding relevant inter-procedural arbitration billing claim documents from AUSTEL to Dr Hughes and/or Telstra and from Telstra to Dr Hughes, during December 1994? (See Dr Hughes Billing issues LGE 6)
  2. Why didn’t Mr Pinnock admit that, between November and December 1994, Telstra sent Dr Hughes a letter that incorporated three separate attachments, regarding the billing faults Alan raised in his claim, and which confirmed Telstra advised AUSTEL they would address these faults in their arbitration defence? Ultimately, they only addressed these faults secretly with AUSTEL, on 16th October 1995 five months after Alan’s arbitration was deemed to be complete. (See Alan Smith – Steve Black Target file)
  3. Why didn’t Mr Pinnock admit the 16th October 1995 submission to AUSTEL was accompanied with a witness statement, dated 12th December 1994 which Telstra knew was flawed?
  4. Why didn’t Mr Pinnock admit he added his own handwritten note to one of the letters Alan Smith had written to him in relation to the withholding of these very same documents (see 26th June 1996), noting:-

“These are quite serious allegations. We need to respond to specific letters Smith says weren’t forwarded or received and provide answers on each”? (See John Pinnock Conspiracy to Pervert the Course of Justice LGE 5)

  1. Why didn’t Mr Pinnock admit he knew FHCA wrote to Dr Hughes (copied to the TIO’s office), on 2nd August 1996 admitting to withholding the aforementioned letters from both Dr Hughes and Alan Smith? (See John Pinnock Conspiracy to Pervert the Course of Justice LGE 5)

Had Mr Pinnock made these admissions during this meeting, particularly with Telstra’s Legal Representative (John Armstrong), the TIO’s Legal Representative (Peter Bartlett) and Graham’s Schorer’s solicitor (William Hunt) all present, then a proper investigation would have had to have been convened – and such an investigation would have validated Graham’s concerns.

27th February 1997:  It appears from William Hunt’s file notes, he believes even Mr Pinnock is now wondering where the discovery and production of document issues are heading:-

“In support of Pinnock’s own views as well as what was put to him by me, he will ring Gordon Hughes to advise that with Telstra’s and his permission, I am to ring Hughes on Thursday or Friday afternoon – the idea being that the problem of obtaining information from Telstra via FOI is to be abandoned in effect by getting it specifically under directions from Dr Hughes and that there will be a need to get certain information first before usefully any further information can be obtained.” ( GS-CAV 260)

Dr Hughes responds to William Hunt’s letter of 25th February 1997 (incorrectly referring to 26th February 1997).  In this response Dr Hughes notes:-

“At this stage, I am not inclined to hold an oral hearing to discuss ‘the continuing failure of Telstra to supply information in breach of the basis on which the FTSP and FTAP were entered into’.”

It appears Dr Hughes forgot the commitment he made to Graham and the other COT cases, on 17th February 1994 “that as arbitrator, he would not make a determination on incomplete information’. ( GS-CAV 261) 

3rd March 1997:  Ted Benjamin writes to Dr Hughes, re Schorer Arbitration – Golden Messenger:

“I refer to your letter 18 February 1997 and the Claimants’ letter dated 25 February 1997. …

Considering the options you outlined in your letter dated 18 February 1997Telstra does not propose, at this stage, to respond in detail to the Claimants’ request for documents as such a response may be irrelevant.” (GS-CAV 262)

5th March 1997:  Dr Hughes replies to Ted Benjamin, noting:-

“As foreshadowed, I propose giving directions regarding the production of documents by each party. This may or may not involve a direction that Telstra produce documents.” (GS-CAV 263)

12th March 1997:  Ted Benjamin writes to Dr Hughes, stating:-

“I refer to your letter dated 5 March 1997 in which you foreshadowed giving directions in relation to the production of documents, and allowed the parties until today to provide you with their submissions by way of comment.”

“As Telstra has not completed its submission, I propose that subject to your consent, the parties be allowed until close of business this Friday 14th March 1997.” (GS-CAV 264)

14th March 1997:  While misleading Graham, in regards to the type of information that should be readily available to him, i.e., the CENTOC – TRAXE exchange congestion data information, Mr Benjamin states:

“I understand the tables of data at page 137 of the AUSTEL Report to have been compiled from Traffic Observation (TROB) data, which was specifically extracted and analysed for AUSTEL in the course of preparing its report of April 1994.”
(GS-CAV 265-A)

Various official Senate Hansard recordings of March 1999 show Senators Alan Eggleston, Kim Carr and Chris Schacht all damned Telstra for withholding these types of important technical documents from the COT cases during their arbitrations.

Attached as Exhibit GS-CAV 265-B is page 30 of an Excel spreadsheet, marked Legal Professional Privilege – Telecom Confidential, listing an array of technical fault information associated with Alan Smith’s complaints raised with Telstra in February 1993.  Telstra only supplied this Excel information and numerous similar files to Alan in October 1997, under pressure applied by the Senate.  At points 755 and 758 in this document, is evidence confirming TRAXE – CENTOC – Traffic Data Acquisition Report half-hour summaries were in existence during Alan’s arbitration.  However, like much of the technical information relevant to Alan and Graham’s arbitrations, this was withheld from them under Legal Professional Privilege.

14th March 1997:  Ted Benjamin writes to Dr Hughes noting:-

“I refer to your letter dated 5 March 1997 in which you indicated that you proposed giving directions in relation to the production of documents. …”

“The above information/documents have been the subject of Freedom of Information requests made by the Claimants. …”

“These files are clearly subject to a claim for legal professional privilege as they were prepared at Telstra’s solicitors [sic] request, for the sole purpose of use in this arbitration. Telstra has not waived its privileged [sic] in these files and is not prepared to release the whole files to the Claimants. However, Telstra is concerned that the Claimants are using these files (amongst other things) as an excuse for not progressing the arbitration.” (GS-CAV 266) 

17th March 1997:  Graham Schorer writes to Dr Hughes:-

 Enclosed herewith please find a List of Documents now sought from Telstra if you, as Arbitrator, are prepared to direct same to be made available.”

“Please note that this list is part only of the documents required. As soon as I complete the List I will forward same to you.”

“Based on experience, and especially that of other CoT members, I anticipate that when certain documents are made available, it may be then necessary to seek additional documents as the documents supplied might indicate ought to be released. (GS-CAV 267)

1st April 1997:  Dr Hughes writes to Ted Benjamin:

“I have perused the submissions of each party in relation to the production of further documents by the other.”

“I have noted the offer by Telstra, in its letter of 14th March 1997, to make available certain computer disks requested by the claimant, subject to specific conditions. In this regard, I note Telstra asserts the disks are subject of legal professional privilege.”

“I presume Telstra maintains the position espoused in its letter of 12 February 1997, namely, that there is no basis for making an award in the claimant’s favour and that I should find accordingly. …

“I am not in a position to judge whether Telstra’s claim of legal professional privilege is well founded. I do believe, however, that there is no reason why the disks should not be made available under the conditions proposed by Telstra. This will clearly be the most expeditious manner of progressing this arbitration.” (GS-CAV 268)

Dr Hughes addresses a mirrored copy letter to William Hunt.

2nd April 1997:  Graham Schorer writes to Dr Hughes:

“I note Telstra still asserts that the requested disks are the subject of legal professional privilege.”

“I still maintain Telstra are wrongly claiming these disks are the subject of legal professional privilege which is in accordance with the legal advise [sic] I have received. …”

“I understand you are only prepared to direct Telstra to supply the requested disks to myself if I totally accept your qualifications which are:

  1. prior to release of the disks to the claimant, the claimant (through his representatives) must acknowledge in writing that by releasing these modified files, Telstra has not waived its privilege in relation to the whole files or any subsequent versions and that the claimant will not raise any argument to the contrary; and
  2. the claimants will treat the files and the information contained in them as confidential and shall only use them for the purposes of this arbitration.

“In order to enable me to finalise my claim and progress my arbitration, I accept the Arbitrator’s qualifications and undertake to treat the files and the information contained in the disks as confidential and shall only use the information contained in the disks for the purpose of this arbitration.”(GS-CAV 270)

9th April 1997:  Ted Benjamin raises his concerns with Dr Hughes, stating:

“I am not satisfied that the undertaking provided by Mr Schorer in his facsimile of 2 April 1997 adequately responds to the issues raised in your letter of 1 April 1997.

“While Mr Schorer states that he accepts the qualifications set out in your letter he does not positively state that he acknowledges that Telstra is not waiving its privilege in relation to the whole files or any subsequent versions of that he acknowledges that he will not raise any argument to the contrary.

“This matter could be simply addressed by Mr Schorer or Mr Hunt writing to you and stating that, further to Mr Schorer’s letter of 2 April 1997, Mr Schorer:

  1. Acknowledges that by releasing the modified files, Telstra has not waived its privilege in relation to the whole of the files or any subsequent versions and that Mr Schorer will not raise any arguments to the contrary; and
  2. that Mr Schorer will treat the files and the information contained in them as confidential and shall only use them for the purposes of this arbitration.”
    (GS-CAV 271)

15th April 1997:  Dr Hughes writes to Mr Benjamin:

“I acknowledge receipt of your letter 9 April 1997. I do not necessarily agree that the claimant’s response is inadequate. I would be prepared to accept that the intention of his letter dated 2 April 1997 is to accept the conditions initially proposed by Telstra.

“Given that you have raised concerns, however, I shall ask Mr Hunt to seek a brief written confirmation from his client that he is willing to provide an acknowledgment and undertaking in the terms set in your letter of 9 April 1997.”(GS-CAV 272)

17th April 1997:  Graham writes to Dr Hughes. Graham reluctantly agrees to Telstra’s terms of 9th April 1997:

“This letter is not to be taken as an acknowledgement that Telstra does have the privilege it claims nor is this letter to be taken as an acknowledgment to my detriment or the detriment of any of the claimants in this arbitration in respect of any matters the subject of FOI procedures already set in hand or which may later be set in hand.” (GS-CAV 273)

18th April 1997:  Dr Hughes writes Ted Benjamin:

“Assuming Telstra is stratified with the claimant’s acknowledgment, I would expect Telstra to make the disks available to the claimant within 48 hours as directed in my letter of 1 April 1997.” (GS-CAV 274-A)

Ted Benjamin responds

“On the basis of the acknowledgement set out in that letter and in Mr Schorer’s letter of 2 April 1997, Telstra will make the disks available to Mr Schorer, by no later than close of business 21 April 1997.”(GS-CAV 274-B)

Graham Schorer writes to Dr Hughes:

“I am concerned that Telstra will supply Golden disks with data deleted as suggested in Telstra’s 14 March 1997 correspondence to the Arbitrator.”

“Golden’s discovery upon Telstra does encompass all of the data contained within the disks that Telstra have in their possession.

“Telstra has contested Golden’s right to discovery by claiming legal professional privilege. …

  • Golden has never agreed to Telstra’s condition for Telstra to delete data from the unabridged disks,
  • nor are Golden prepared to accept disks containing an abridged version of the data contained in the original disks.
  • Golden has met all of Telstra’s undertakings on the basis that Golden are provided with the unabridged mirrored copy of the original disks.”(GS-CAV 275)

William Hunt’s file note says:

“On 21st April several times attending Schorer who phoned having sent an example of the disk discovery. Two columns were heavily blacked out rendering the disks of no value at all. Extrapolated from the computer disks on to type they turn out to be useless for this purpose

I suggested that he consider an application to the Court or to the Appeals people.” (GS-CAV 276-A)

24th April 1997:-  Graham Schorer writes to Dr Hughes in disgust concerning what he received under the Fast Track Arbitration discovery process (see GS-CAV 277-C).

“The Telstra disk supplied to GOLDEN in accordance with your directive has had 9 columns of data deleted, leaving only 6 columns of data of little relevance to GOLDEN.”

Mr Benjamin writes to Dr Hughes, setting out Telstra’s further concerns about Graham Schorer:

“The letter of 14 March 1997, which was copied to Mr Schorer, made it clear that only the modified files would be released to the Claimant.”

“It is therefore incorrect for Mr Schorer to contend that he has met all of Telstra’s required undertakings and should therefore be provided with an unabridged version of the disks.” (GS-CAV 277 )

28th April 1997:  William Hunt drafts an FOI request for Graham

“The suggested alterations to the draft are:

“Re: Paragraph 1

All agenda and minutes of Telstra meetings related to identifying various methods or ways by which Telstra could investigate and maintain electronic (or other) surveilance [sic] of CoT members’ activities.”

“Re: Paragraph 2

All E-mail messages, notes, diary entries of or to Mr Frank Blount, Mr Doug Campbell, Mr Paul Rizzio, Mr David Krasnostein, Mr Jim Holmes, Mr Michael Montalto, Mr Charlie Zoi and any other Telstra personnel which relate or refer to engagement and/or use by whatever means by Telstra of services by INGE Detective Agency.” (GS-CAV 278-A)

8th May 1997:  Graham Schorer’s request (under FOI) for all documentation regarding Telstra’s employment of Inge Detective Agency Pty Ltd, re their surveillance of the COT cases, was the result of information the COTs received regarding Telstra having or compiling a file on the COT cases for their internal intelligence network. (GS-CAV 278-B)

Exhibit GS 278-c comprises two pages from the Graham Schorer & Alan Smith Fax Interception Exhibit 3 file, prepared for Allen Bowles in January 2007.  It is quite clear from reading these two pages that Alan and Grahams’ business and/or private residences were under electronic surveillance via Telstra’s unauthorised fax-screening process, at least up to 1999.  The actual documentation that was intercepted via this screening process is attached to Exhibit 3.  It is ironic that the only documents that were intercepted, before being sent to the original destinations are only Telstra-related information

The CAV John Pinnock – Interception of facsimile transmissions LGE 2 targets show electronic surveillance was still in progress in December 200

20th May 1997:  Mr Benjamin writes to Dr Hughes:

“On 4 February 1997 you requested submissions from the parties as to the further documentation they required to be produced.

“Mr Schorer has also sought a direction with respect to the provision of the entire version of the disks 1Schorer.xls, 2Schorer.xls and MGSchor2.xls. Telstra responded to the concerns raised by Mr Schorer on 24 April 1997. However, no ruling has been made.” (GS-CAV 279)

22nd May 1997:  Dr Hughes responds to Ted Benjamin’s letter:

“I acknowledge receipt of your letter 20 May 1997.”

“On 1 April 1997, I directed that Telstra provide specified computer disks to the claimant, subject to certain qualifications. The qualifications included an undertaking to be provided by the claimant.

“The claimant subsequently provided an undertaking which acknowledged that Telstra had not waived its privilege in relation to the contents of the diskettes. …

“The claimant suggested that Telstra should make an unbridged version of data available to me so that I could decide whether Telstra was entitled to claim legal professional privilege. …”

“The claimant’s query relates to whether the claim of legal professional privilege is well founded. …”

“I propose directing that Telstra produce the disks to me in an unabridged form and provide such co-operation as necessary to enable me to inspect the contents and determine whether the claim for legal professional privilege is well founded.” (GS-CAV 280)

27th May 1997:  John Pinnock advises Graham Schorer:

“I have recently been advised that Lane Telecommunications business has been purchased from Pacific Star by Ericsson Australia.”

“Lane Telecommunications will remain an independent telecommunications consultancy, forming part of the Services Corporate Business Unit of Ericsson Australia.” 

Comment:

The Ericsson ARE, ARF and AXE inter-exchange equipment used by Telstra to service the exchanges that COT cases’ businesses connected to was the root cause of most of their telecommunications problems. How fortunate was it for Ericsson to have COT cases’ claim fault material readily available, after the purchase of Lanes?

30th May 1997: Ted Benjamin responds to Dr Hughes’ letter of 22nd May 1997.

“As stated in my letter of 24 April 1997, the entire disk was prepared at the request of Telstra’s solicitors for the sole purpose of the arbitration. Telstra claims privilege for the entirety of the disk. Telstra is not, and has never asserted that only parts of the disk are privileged. …”

“The analysis was performed for the purpose of assisting Telstra in the preparation of its Defence in this arbitration.”

“In these circumstances, neither Telstra nor its independent legal advisors can see how there can be any serious argument as to whether privilege has been properly been claimed. …”

“However, Telstra is concerned that if you were to view the material you may find it difficult in practice, to put the material wholly out of your mind in making your Award in this arbitration. I am advised that it is for this reason the judges are generally most hesitant to review the documents where a claim for privilege is made, unless these is legitimate cause to doubt the validity of the claim. …”

“Notwithstanding the above, in order to expedite the matter I enclose:

  1. Masked disk sent to Mr Schorer;
  2. Unmasked disk;

I look forward to receiving your ruling.” (GS-CAV 282)

12th June 1997:  Dr Hughes responds to Ted Benjamin’s letter and states:

“Clearly I need to be satisfied that the diskettes in question were prepared at the request of your solicitors for the sole purpose of this arbitration. Are you able, and do you wish, to provide further evidence in support of your contention that this was the sole purpose for which the diskettes were prepared?” (GS-CAV 283)

13th June 1997:  William Hunt writes to Dr Hughes concerning his letter to Mr Benjamin:

“We are in receipt this morning of your copy letter dated 12th June, 1997…”

“On information supplied by our client, we believe that Column E of the printout of the diskettes as made available by Telstra is not privilege from disclosure.”

“It would appear that the description is simply a description of documentation which already was in existence before there was any arbitration proceedings on foot.”

“As such it should not be privileged from production.” (GS-CAV 284)

18th June 1997:  Telstra’s Corporate Secretary, Mr Montalto writes to Alan:

“In those letters you have made allegations as to Telstra’s conduct in relation to a report prepared by Bell Canada International. I am advised that you raised these same allegations in your arbitration claim made against Telstra. I am advised further that you again raised these allegations with the Arbitrator after an award had been delivered and referred those matters to the Telecommunication Industry Ombudsman. Telstra responded to the Ombudsman’s queries in relation to this matter.” (AS-CAV 230)

Telstra to appear before the Senate Estimates Committee – Arbitration

19th June 1997:  Telstra’s Legal Directorate, on behalf of Ted Benjamin, writes to Mr Schorer under the heading, “Confidentiality Waiver for Senate Estimates Committee”:

“Telstra is to appear before a Special Parliamentary Committee of the Senate on 24 June 1997.”

“Telstra will be asked questions relating to the ‘Casualties of Telecom’ cases. You may have been invited to appear before the committee. …”

“Telstra views its obligation of confidentiality seriously. Telstra will not disclose any confidential information regarding the arbitration process before the parliamentary committee unless you, and the Arbitrator and the Administrator specifically agree.”

The above statement by Mr Benjamin, “Telstra views its obligation of confidentiality seriously,” would be laughable if it wasn’t so serious, considering it was Mr Benjamin, who on 30th November, 1993, freely supplied confidential TIO council COT case information to Telstra’s hierarchy after a TIO Council Meeting. (GS-CAV 285)

23rd June 1997:  Dr Hughes writes to Ted Benjamin in response to the letter of 19th April 1997, under the heading Confidentiality Waiver For Senate Estimates Committee Schorer Arbitration.” He states:

“I consider it would be inappropriate for me to waive the requirements for Telstra to comply with its confidentiality obligations in this arbitration.

“I consider the requirements for confidentiality to be a fundamental feature of this arbitration and the other COT Case arbitrations. A waiver for the purpose outlined would potentially undermine both the integrity of past rulings and my ability to continue the present arbitration involving Schorer.” (GS-CAV 286)

Comment:

It appears Dr Hughes didn’t understand the integrity of the COT arbitrations were already compromised when he continued to use an Arbitration Agreement he had previously deemed ‘not credible’ (12th May 1995)

Roger Levy (Telstra Consultant) provides a Statutory Declaration stating:

“one of the things that needed to be done, before work could substantially begin in preparing Telstra’s defence, would be to organise the vast quantities of documentation pertinent to Mr Schorer’s complaints which had been provided to Mr Schorer under the Freedom of Information Act.  Leo Gore, the solicitor of FHP then responsible for this Arbitration, directed me to arrange for this documentation to be indexed in an Excel spreadsheet…” (GS-CAV 287)

Comment

When Mr Levy refers to documents “which had been provided to Mr Schorer under the Freedom of Information Act”, he does not indicate Graham actually received all the documents under FOI that Mr Levy provided to Freehill Hollingdale & Page, i.e., all the information Mr Levy used to produce the Excel files

In Alan Smith’s case, CENTOC – TRAXE data was entered into Excel files (confirming Telstra had sourced that data from somewhere), which also confirms the CENTOC – TRAXE data was available to Telstra’s lawyers when they prepared their Excel files.  Alan only received the Excel files on disk because of intervention by the Senate, 28 months after the end of Alan’s arbitration, and he was never provided with the actual CENTOC –TRAXE data documents, only information indicating the data exist somewhere but was being withheld under Legal Professional Privilege.  Had Alan been given the Excel disk when Telstra conducted their Service Verification Tests, he would have been able to compare the SVT data with the actual CENTOC – TRAXE data.  That comparison may have helped him prove Telstra used Statutory Declarations, sworn by two Senior Telstra Executives, despite those Statutory Declarations containing information known to be false (see Dr Hughes Verification issues LGE 7).  Instead, the false Statutory Declarations were used in Alan’s arbitration and were not challenged, to the serious detriment of Alan’s claim

24th June 1997:  Dr Hughes receives a letter from Telstra’s Legal Directorate, on behalf of Ted Benjamin:-

“I enclose a confidential Statutory Declaration of Roger Laurence Levy.”

“This statutory declaration relates to the circumstance of the creation of the Schorer disks. As such, the statutory declaration should not be provided to Mr Schorer. A copy of this letter has been sent to Mr Schorer without the statutory declaration.”

“Given the time that has elapsed since the disks were created, Mr Levy is most appropriate person currently retained by Telstra to make the declaration. For your information, the Group General manager, Mr Steven Black and Ms Joy Geary Special Counsel Dispute Resolution are no longer employed by Telstra. Mr Gore, the solicitor at Freehill Hollingdale & Page (FHP) primarily involved in the matter is no longer employed by FHP.” (GS-CAV 288)

In 2001, renowned Australian FOI Associate Professor Suzanne McNicol provided a legal opinion to the COT cases, stating Telstra’s use of legal professional privilege in these COT technical issues was spurious and illegal.

A Senate Hansard exhibit (GS-CAV 289), on page 77, confirms Senator Carr stated to Ted Benjamin:

“In terms of the cases outstanding, do you still treat people the way that Mr Smith appears to have been treated? Mr Smith claims that, amongst documents returned to him after an FOI request, a discovery was a newspaper clipping reporting upon prosecution in the local magistrate’s court against him for assault. I just wonder what relevance that has. He makes the claim that a newspaper clipping relating to events in the Portland magistrate’s court was part of your files on him.”

Senator SHACHT “It does seem odd if someone is collecting files. That is a matter that has nothing to do with his telecommunications business. It seems that someone thinks this is a useful thing to keep in a file that maybe at some stage can be used against him.” 

Senator CARR“Mr Ward, we have been through this before in regard to the intelligence networks that Telstra has established. Do you use your internal intelligence networks in these CoT cases?

As shown, on 15th March and 8th April 1993 Telstra was already involved in internal intelligence networking in 1993, when Freehill Hollingdale & Page employed Equity Investigators to investigate Graham’s Schorer’s business affairs.  Facsimile interception files confirm someone with access to Telstra’s network was still electronically intercepting legal correspondence between Graham and his lawyer as late as 199

30th June 1997:  Graham Schorer writes to Dr Hughes, regarding Roger Levy’s Statutory Declaration letter he received from Telstra 24th June, 1997:

“The contents of Mr Levy’s Statutory Declaration contradicts what I have directly been told by the person who alleges to have created the Excel spreadsheet file.” 

“The delay in my ability to obtain a Statutory Declaration from this person is due to an event taking place before this person will sign a Statutory Declaration.” (GS-CAV 290)

7th July 1997:  Dr Hughes’ letter to Mr Benjamin shows he is blind to the fact that he has already compromised the integrity of the arbitrations.  Dr Hughes’ statement to Ted Benjamin:-

“Accordingly, I direct that Telstra make available to the claimant, in unabridged form, the materials described in my direction of 1 April 1997,”

appears to have been the reason Mr Levy alters his previous statutory declaration. (GS-CAV 291)

11th July 1997:  Ted Benjamin writes to Dr Hughes:-

“I attach a supplementary statutory declaration of Roger Levy.

“The declaration corrects the period for which Mr Levy has been a consultant to Telstra and seeks to clarify the time at which work on the disks commenced.” (GS-CAV 292-A)

“I, ROGER LAURENCE LEVY … do solemnly and sincerely declare:

  1. I commenced at Telstra on 15 November 1994, not in October 1994 as stated in paragraph 2 of my earlier declaration. …
  2. When I commenced at Telstra, rudimentary work had already commenced compiling the Excel spreadsheet. I do not know precisely when that work commenced.” (GS-CAV 292-B)

Ted Benjamin was no stranger to discrepancies in Statutory Declarations signed off by Telstra witnesses during the COT arbitrations.  On 21st March 1997 Mr Pinnock wrote to Mr Benjamin stating

“I would appreciate your advice concerning the matters raised by Mr Smith, in particular and arising out of your letter of 23 December 1994 to Dr Hughes:

  • any explanation for the apparent discrepancy in the attestation of the witness statements of Ian Joblin
  • were there any changes made to the Joplin statement originally sent to Dr Hughes, compared to the signed statement?”

(GS-CAV 293-a)

The matter concerning why Telstra allowed Freehills, its external lawyers, to sign a Statutory Declaration without the witness being present was never addressed by Dr Hughes during Alan’s arbitration.  That this serious breach of law was never correctly investigated, in Alan’s arbitration, left the door open for Telstra and its lawyers to offend again.  Could some Telstra witness statements, submitted during Graham’s arbitration, have also been signed by Freehills, before being forwarded onto the witnesses to sign

Exhibit (GS-CAV 293-B) is a letter dated 26th June 1998 from Senator Bill O’Chee to Telstra’s Graeme Ward, regulatory and external affairs, stating

“I note in your letter’s last page you suggest the matter of the alteration of documents attached to statutory declarations should be dealt with by the relevant arbitrator. I do not concur. I would be grateful if you could advise why these matters should not be referred to the relevant police.

There was no transparent outcome to this

15th July 1997:  William Hunt responds to Dr Hughes’ letter to Telstra of 7th July 1997 requesting Dr Hughes to grant more time for his client to “make appropriate submissions”. (GS-CAV 294)

16th July 1997:  Ted Benjamin writes to Dr Hughes stating:

  1. “Telstra notes your direction and that you will provide the unabridged version of the disk to the Claimant;
  2. “In making that direction you have not made any ruling as to whether Telstra’s claim that the three computer files, namely 1schorer.xls, 2schorer.xls and mgschor2.xls are privileged is well founded. You have further made no judgement as to whether the individual documents described in those files are relevant to the proceedings or whether the individual documents could be subject to a claim of legal professional privilege.(GS-CAV 295)

16th July 1997:  John Pinnock explains his concern to William Hunt:

“Lane is presently involved in arbitrations between Telstra and Bova, Dawson, Plowman and Schorer. The change of ownership of Lane is of concern in relation to Lane’s ongoing role in these arbitrations.

“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.” (GS-CAV 296-A)

On 9th March 1995 the TIO appointed Lane as the Technical Resource Unit for the TIO-administered COT arbitrations (GS-CAV 296-B).  During the next two years, Lane assessed the COT claimants’ technical claims but, during the same period, Lane was purchased by Ericsson as stated previously.  Alan and Graham maintain that, once this contact with Ericsson had occurred, the TIO was obliged to arrange for the COTs’ technical claims to be re-assessed to ensure Lane had not hidden any known problems with the Ericsson AXE exchanges Graham and Alan’s businesses were routed through.

Lane prepared the draft of their Cape Bridgewater Report on 6th April 1995 before Paul Howell of DMR Canada arrived in Australia.  In the final DMR and Lane Cape Bridgewater Report (dated 30th April 1995), 22 of the 23 faults discussed relate to problems Alan experienced before 1994 even though, when David Read of DMR had visited Cape Bridgewater on 5th April 1995 Alan showed him Telstra’s list of 72 complaints registered by various Cape Bridgewater residents between February and August 1994.  None of Alan’s up-to-date 1994/95 evidence of the ongoing billing problems associated with the Cape Bridgewater RCM system, which routed through the Portland Ericsson AXE exchange equipment, were ever addressed.  What was the point of the TIO commissioning a Technical Unit to view the ongoing problems experienced by claimants like Alan and Graham, if the Technical Consultants only addressed historical problems and not the problems still affecting the COT cases

17th July 1997:  Freehill Hollingdale & Page provides its legal opinion to Sue Laver, Telstra’s Legal Directorate, stating:

“We refer to your instructions to advise whether the database of information produced for the purpose of preparing Telstra’s defence in the Schorer Arbitration and which is contained on computer disk (the ‘Telstra Disk Document’) is subject to legal professional privilege.” (GS-CAV 297)

24th July 1997:  Graham and Alan are not the only ones with a nagging doubt about the true independence of Lane Telecommunications.  In John Pinnock’s letter to Ann Garms, he states:

  1. “By letter dated 14 November 1995 I advised you that I did not have the power to dismiss the Arbitrator or the Resource Unit. I advised that pursuant to the Commercial Arbitration Act 1984 (Vic) the Supreme Court has the power to remove an arbitrator in certain circumstances. …”
  2. “In November 1995 you had concerns regarding the independence of Lane. By letter dated 6 November 1995, having made considerable enquiries of the relevant parties on the issue of independence, I advised you of my view that your concerns regarding the independence of Lane were unfounded. …”
  3. “On 8 March 1995 you advised the TIO that Mr David Read of Lane was unacceptable on the basis that he was a former employee of Telecom. However on 13 March 1995 you advised the TIO that ‘after meeting with Mr David Read I feel confident that he and his company Lane Telecommunications Pty Ltd possess the necessary integrity, professionalism and expertise to do justice to the assessment of our Claim.’” (GS-CAV 298)

Mr Pinnock did not reveal to Ms Garms that Alan Smith had provided him irrefutable evidence confirming David Read acted either on his own volition or in concert with DMR (Canada), when addressing only 23 of Alan’s 200 claims (fault) documents.  (See Alan Smith CAV Chronology file).

25th July 1997:  Dr Hughes writes to Ted Benjamin

“Taking into account the matters which you raised, I direct that in addition to the files embraced by my direction of 7 July 1997, Telstra make available to the claimant its current version of those files on or before 29 July 1997. (GS-CAV 299)

Dr Hughes also writes to William Hunt:-

“I refer to your letter of 15 July 1997 and would be pleased to receive your submission regarding my proposal for the future conduct of this arbitration by 5.00pm on 30 July 1997.” (GS-CAV 300)

29th July 1997:- Ted Benjamin supplies Dr Hughes with the Excel disk and states:-

“I note that there may be duplication in the summaries contained in the disk. Like the earlier disk supplied to Mr Schorer these files are Telstra’s working summaries of the documents. Those summaries do not stand in the place of any formal document provided to you in the course of this arbitration.(GS-CAV 301)

7th August 1997:  Graham Schorer faxes William Hunt a number of printout samples extracted from the first and second disks received from Telstra.  These examples (GS-CAV 302-A), do not compare with the original Excel disk information (GS-CAV 302-B) Alan Smith downloaded when he received his files in October 1997, and which confirm Telstra regularly checked Alan’s service provided by using the CENTOC – TRAXE traffic reports

Comparing his material to Graham’s, Alan believes Telstra provided Alan with the correct, complete Excel spreadsheets because they were released 28 months after his arbitration and so Telstra did not feel they posed any sort of threat.  The comparison between Alan and Graham’s spreadsheets reveals Alan’s spreadsheets include more details than Graham’s. Alan’s spreadsheets include columns recording when the fault was logged, who responded to the fault and when, while Graham’s spreadsheets don’t include this information, indicating Graham’s may have been edited before release.  If Telstra had revealed it was using CENTOC – TRAXE reports to measure the traffic through the 48 exchanges routed through to the North Melbourne exchange, these reports might have shown how bad the congestion still was.

18th August 1997:  Sister Maureen Burke, IBVM, principal of Loreto College, Ballarat, writes to Alan:

“Thank you for the opportunity to read the working draft of your book and to view your promotional video.

“Only I know from personal experience that your story is true. 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.” (AS-CAV 231-A)

Alan first met Sr Burke in March 1992, when she was attempting to organise a trip to the holiday camp for a group of underprivileged children from the Ballarat region. When she had been unable to contact Alan by phone, over a couple of weeks, she decided to drive the three hours to visit instead.  She arrived just after Alan’s partner (at that time), Karen Gladman, handled a phone call from an irate singles club patron who had also been trying to ring the camp for weeks.  Karen had just worn the full brunt of this man’s fury and was in the office, in tears.  After speaking to Karen, Sr Burke suggested Karen needed to see a counsellor and that it would be in the best interest of both of them if Karen left Cape Bridgewater.  Sr Burke believed she could arrange counselling for Karen in Warrnambool.  Over the next two or three years from then on, Sr Burke was instrumental in keeping Alan calm and helping him control his anger towards Telstra

Twelve months after Sr Burke’s charity camp, another sister from Loreto College (Sr Karon Donnellon) attempted, unsuccessfully, to phone Alan to arrange another camp. She finally wrote

“During a one week period in March of this year I attempted to contact Mr Alan Smith at Bridgewater Camp. In that time I tried many times to phone through.

“Each time I dialled I was met with a line that was blank. Even after several re-dials there was no response. I then began to vary the times of calling but it made no difference.”(AS-CAV 231-B)

Alan received some similar 80-plus letters over the years, from people with similar complaints to Sr Donnellon, but they appear to have been withheld from DMR and Lane (the TIO-appointed consultants) during Alan’s arbitration, even though he submitted them to the arbitrator as supporting material.  He also covered his Letter of Claim with a Statutory Declaration as per clause 6 of the Arbitration Agreement, which states

“All written evidence shall be in the form of an affidavit or statutory declaration.

  • Why would DMR and Lane state, in their report, “A comprehensive log of Mr Smith’s complaints does not appear to exist”? ( AS-CAV 322-C )

If DMR and Lane did not see the letters and Alan’s comprehensive log of fault complaints, who withheld this information from them?

11th August 1997:  On behalf of Telstra’s John Armstrong, Telstra’s Legal Directorate writes to the Commonwealth Ombudsman, John Wynack, stating:-

“Further, as directed by the Senate, Telstra has sought advice as to its claim for privilege.  A copy of that advice is enclosed…” (GS-CAV 303-A)

In an advice document, Rod Kearney states, at point 3:

“As the FOI delegate making the decision, I considered the spreadsheets were privileged for two reasons, firstly, because they were created solely for the purposes of developing Telstra’s defence to Mr Schorer’s claim under the Fast Track Arbitration Process, and secondly, because the spreadsheets were new documents which had been created to provide advice to Telstra’s solicitors as to the content and relevance of the documents in the context of Telstra’s defence. … I decided that legal professional privilege applied.” (GS-CAV 303-A)

We do not know whether Mr Kearney is qualified to make such legal professional privilege decisions but exhibit GS-CAV 303-B is an internal Telstra memo, dated 21st January 1994, and notes, under the heading, “Request for Telecom Records”:-

“The attached request is referred for your action. The author of the request, Simon Chalmers, is from Freehill Hollingdale & Page, Telecom’s solicitors. I suggest that you action this request not just for the two customers mentioned but also for Mr G Schorer and Mr A Smith. Information that has previously been sent to the Viewing Room will be accessed from there. It is important to note that material that is not produced for this request cannot be used in Telecom’s defence.

Exhibit GS-CAV 303-C is an earlier internal Telstra fax, dated 17th January, 1994 from Simon Chalmers to Duncan Wallace stating, under the heading “Requests for Telecom records – Mr Alan Smith/Mr Graham Schorer”

“I need your assistance to ensure that all documents, memos, notes, outputs of network monitoring or testing, and all other records (‘records’) concerning Mr Alan Smith’s or Mr Graham Schorer’s telephone services…

When Rod Kearney wrote to Mr Wynack (see 11th August 1997), it seems he was not aware of technical information, regardless of who prepares it, does not fall under legal professional privilege.  Graham should have had access to the same technical information Telstra’s solicitors used to prepare Telstra’s defence

14th August 1997:  Dr Hughes writes to William Hunt

“Mr Schorer has commented that at best an interim technical evaluation could only proceed ‘on the evidence {submitted} to date by Telstra’. I do not agree with this observation. …

“The first step in the process would be for the resource unit to assess the nature and content of material submitted to date, prior to referral to the technical expert for evaluation.” (GS-CAV 304-A)

“Accordingly, Idirect that

  1. the evidence submitted by the parties to date now be referred to the Resource Unit;
  2. the Resource Unit examine the materials submitted to date and inform me whether, in their opinion, further material should be produced by either party before a technical evaluation takes place;
  3. subject to (b), or may the materials submitted by the parties be referred to Mr Howell for technical evaluation;
  4. noting that Mr Howell may not be able to reach a conclusive opinion the progress of this matter be reviewed by me upon receipt of an interim technical evaluation report from Mr Howell;
  5. in the meantime, Telstra advise me by 20 August 1997 whether any modifications to the disks enclosed with its letter to me of 29 July 1997 involved the deletion of any material and, if so, specifying what material was deleted.”

COMMENT:

To the casual observer, Dr Hughes’ letter may seem quite reasonable, but to the COT claimants who suffered because Dr Hughes was too weak to ensure Telstra acted honestly and the Resource Unit remained independent, it is a smokescreen.  Dr Hughes and the people this letter was copied to (except, perhaps, Ted Benjamin) must have known that, in his incomplete Draft Report dated 30th April 1995, Paul Howell advised Dr Hughes

“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.

Mr Howell added he would “attempt to resolve it in the next few weeks”. (See CAV Relevant Information file, Alan Smith, exhibits 5 and 6.)  Dr Hughes forwarded the same report to Alan Smith, with the same date but without the reference to the report being incomplete, and instructed Alan to respond within five days

Dr Hughes’ statement that “Mr Howell may not be able to reach a conclusive opinion…” would also be laughable, if it was not such a hollow statement

18th August 1997:  Dr Hughes’ instructs Sue Hodgkinson:

“You have previously been forwarded a copy of my letter to Mr Hunt dated 14 August 1997.

“I now wish to formally instruct you to examine the material submitted to date with a view to submission, as soon as practicable, of the technical materials to Mr Howell for technical evaluation.” (GS-CAV 304-B)

As shown above, see 2nd August 1996, Ms Hodgkinson knowingly misled Dr Hughes in her memo regarding Alan Smith’s arbitration.  It is unbelievable the TIO’s Office did not severely reprimand Ms Hodgkinson for her gross misconduct in Alan’s arbitration, and it is beyond contempt for the TIO to compound this incident by allowing Ms Hodgkinson to assess the validity of inter-procedural documents in Graham’s arbitration.  Did Ms Hodgkinson hide relevant documents from Dr Hughes in Mr Schorer’s arbitration at the detriment of his claim

Exhibit GS-CAV 304-C is a combined list comprising only one-third of Alan Smith’s claim documents submitted into arbitration and a list of Telstra’s defence documents (that assessed those claim documents on this restricted list).  This list was attached to the DMR and Lane report of 30th April 1995 and provided as a draft for Dr Hughes to assess

Exhibit GS-CAV 304-D is the same list of documents but includes an additional 13 of Alan’s claim documents, which were supposed to have also been assessed by Telstra in their defence and DMR and Lane in their evaluation of Alan’s claim and Telstra’s defence of his claims.  This second list was provided to Alan to convince him that FHCA passed ALL of Alan’s claim documents on to Telstra, DMR and Lane, when the list at exhibit GS-CAV 304-C proves otherwise

Alan Smith’s CAV Relevant Information file shows that in both DMR and Lane reports, dated 30th April 1995, all the technical information is exactly the same – word for word.  A further comparison of these two reports (when reading in conjunction with Telstra’s defence) confirms none of the 13 extra documents was assessed. Someone from FHCA acted unconscionably in withholding Alan’s documents from being addressed by Telstra and DMR and Lan

Alan has matched these lists to his Telstra fax/phone account to determine which claim documents he faxed to Dr Hughes and which were then copied on to Telstra under the agreed rules of supply.  He discovered Telstra did not receive at least 41 separate sets of information that Alan faxed to Dr Hughes’s office

Exhibit GS-CAV 136 confirms an arrangement existed between Telstra, Warwick Smith and FHCA, to vet arbitration documents prior to being delivered to Dr Hughes.  Are we to assume that some of the 41 documents were vetted and then destroyed before reaching Dr Hughe

Again, Mr Pinnock acted unethically when he allowed FHCA, DMR and Lane to continue as the official Resource Unit in Graham’s arbitration, once Alan provided the evidence he did

20th August 1997:  John Pinnock writes to Graham

“At the TIO meeting held at Minter Ellison on Tuesday 29 July 1997, it was agreed that a new technical advisor to the Resource Unit would have to be appointed to your arbitration, to replace Lane Telecommunications. The new advisor will assist Mr Paul Howell.” (GS-CAV 305)

Alan says Derek Ryan first suggested he see lawyer Ben Dunn.  After that first visit, Mr Dunn decided he would help Alan, pro-bono, to prepare a brief for presentation either for Senator Alston or the Telstra Board

20th August 1997:  Ben Dunn writes to Alan confirming his belief that Alan was “less than fairly dealt with by Telstra and the arbitrator”.

Not long after he wrote this letter, Ben Dunn would not agree to meet Alan, nor would he return Alan’s phone calls.  Even his office secretary seemed to be annoyed with him on one occasion when Alan had travelled from Portland only to discover that Mr Dunn couldn’t be found. (AS-CAV 231)

Alan passed a copy of Mr Dunn’s letter to Steve Boswell (Senator Boswell’s son), who was working at the time as a young solicitor in Minter Ellison’s Sydney office.  Steve later phoned Alan to offer assistance, but Alan decided not to accept, as by this time, Senator Boswell and Senator Alston had left him off the Senate’s litmus test A-list investigation (discussed in October below) into the COT arbitrations and he didn’t want to cause issues between father and so

25th August 1997:  Dr Hughes appears to have given up regarding the disk issues when he states to Ted Benjamin

“Following my letter to Mr Hunt of 14 August 1997, a copy of which was forwarded to you, I had subsequent discussions with Mr Hunt in which he requested on behalf of his client that the unmodified original diskette, which was the subject of my order of 7 July 1997, be made available. The purpose of the request is to enable the claimant to compare the original diskette as supplied which was subjected to modification by Telstra.

“In view of my directions of 14 August 1997, which I consider to be adequate, I do not propose directing that you comply with this request. At the same time, it may assist in the arbitration process if you were to comply with the request.” (GS-CAV 306)

27th August 1997:  Graham writes to John Wynack of the Commonwealth Ombudsman’s Office

“It would appear that the Arbitrator has failed to grasp the significance to GOLDEN in not being supplied by Telstra with the unabridged, unmasked, unmodified original diskette containing the Excel files in accordance with his original directive.” (GS-CAV 307)

John Wynack responds to Mr Schorer

“I did, however, inform Ms Laver that I would pass on to you the above information and also Ms Laver’s opinion that she believes that Telstra has complied with the Arbitrator’s directions in respect of the computer files.” (GS-CAV 308)

16th September 1997:  Graham Schorer writes to John Pinnock.  This letter is one of a number of letters refusing the TIO’s pressured to accept Paul Howell of DMR Group, Canada, as the TIO-appointed Technical Advisor to Graham’s arbitration. (GS-CAV 309)

John Pinnock responds to Graham

“I look forward to receiving a nomination from you for a replacement for Lanes, as soon as possible

I remind you, however, as noted in the Arbitrator’s letter of 14August 1997 to your solicitor, that the Resource Unit currently comprises Mr Paul Howell.” (GS-CAV 310)

John Pinnock addresses the Senate, Part 

26th September 1997:  Mr Pinnock writes to The Senate Environment, Recreation, Communications and the Arts Legislation Committee, regarding many deficiencies in the COT arbitration process

“[O]ne of the potential deficiencies should have been obvious from the outset. …

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

“For present purposes, it is enough to say that the process was always going to be problematic, chiefly for three reasons 

“Firstly, the arbitrator had no control over the process, because it was conducted entirely outside the ambit of the Arbitration Procedures. …

“Finally, as I have remarked previously, the Arbitrations have been bedevilled by the inability of the parties to treat the disputes as matters of a commercial nature and to put behind them the atmosphere of mutual suspicion and mistrust that had built up over a long period of time.” (AS-CAV 232-A)

Exhibit AS-CAV 232-B contains pages 109 and 110 from the Senate Hansard of 26th September, 1997 – the day Mr Pinnock discussed these issues.  Observe the following questions raised by Senator Schacht at this Senate Hearing and the answers given by both Ted Benjamin and Mr Pinnock

Senator SCHACHT“Are you also a member of the TIO board?

Mr Benjamin“I am a member of the TIO council

Senator SCHACHT“Were any CoT complaints or issues discussed at the council while you were present

Mr Benjamin“There are regular reports from the TIO on the progress of the CoT claims.

Mr Pinnock addresses the Senate, Part

From 23rd November 1993 when Graham Schorer signed the Fast Track Settlement Proposal (FTSP), he continued to lodge FOI requests for all of Bell Canada International’s (BCI) working notes, data and test information related to the two Telstra-co-ordinated BCI tests of the North Melbourne and associated telephone exchanges.  No relevant material was ever provided during his arbitration.  The Alan Smith CAV Chronology file and supporting material also show that although Alan lodged numerous similar FOI requests, he was never provided with any CCS7 data for 055 267211 (Cape Bridgewater PTARS) or working notes showing how BCI arrived at its findings in the Cape Bridgewater study during his arbitration, either

Exhibit 8 in Graham Schorer’s CAV Chronology file is a copy of a Senate Hansard Report, from pages 94 to 152.  On pages 99 to 100 (see also exhibits GS-CAV 312-A to 323 & GS-CAV 312-B), Mr Pinnock discusses the problems the COT claimants encountered when they attempted to access documents from Telstra.  Yet, he fails to mention Alan Smith proved to Mr Pinnock’s predecessor, Warwick Smith, there were many instances of Telstra’s unethical behaviour during the COT arbitrations, including altering and changing the information on requested documents in an attempt to minimise Telstra’s liability.  This Senate Hansard Report is relevant to Graham’s arbitration, as well as Alan’s because it shows Mr Pinnock was very selective regarding what he chose to reveal to the Senate.  In relation to problems with the arbitration, the TIO implied, wherever possible, that the COT claimants were as much at fault as Telstra

On page 100 of the Hansard report, in relation to arbitration technical reports – the most important issue in the entire COT arbitration process – Mr Pinnock states:

“Those delays have also been exacerbated by extensive arguments by both sides, but particularly by the claimants, as to the accuracy and merits of the technical evaluation and financial evaluation of reports produced by the resource until, so much so, I might say, that the resource unit has almost been in danger of being dragged into the fray when the original intention of the process was for it to be exclusively and really a matter for advice to the arbitrator.” (GS-CAV 312-B)

All the health and financial problems that followed for 10 years after the Schorer and Smith arbitrations may well have been avoided if Mr Pinnock had told the Senate, on 26th September 1997, that:-

  • Someone with access to the arbitration agreement secretly altered some sections of the document, after the original version was provided to Graham’s legal advisors for assessment, without ever advising any claimants of these changes, and
  • These alterations exonerated the resource unit and the special counsel from any liability arising from conscious negligence, to the detriment of both Alan Smith and Graham Schorer. This removed any incentive for the resource unit and the special counsel to look after Graham and Alan’s common interests.

QUESTION 

Why did Mr Pinnock tell the Senate the resource unit was “in danger of being dragged into the fray”?  He knew, on 11th July 1994, the TIO and Telstra agreed together, without consulting the claimants, the resource unit would assess arbitration documents and decide which were relevant before passing them (or not) to the arbitrator (See Graham Schorer CAV Relevant Information file exhibit 13).  This decision immersed the resource unit in the arbitration process (i.e., “the fray”) almost from the very beginning

For the TIO to allow Telstra to use the resource unit as a second arbitrator for the vetting of what information the arbitrator should see and/or not view, contravenes the Commercial Arbitration Act 1984 (see exhibit-GS-CAV 313 unless all parties have agreed to this in writing.

QUESTION 

How could Mr Pinnock tell the Senate

“perhaps the most difficult issue, and one that has bedevilled the arbitrations almost from the beginning, was the inability of the parties to treat these disputes as matters of a purely commercial nature” and the parties to the arbitration “were unable to put behind them the attitude of mutual suspicion and mistrust”

His predecessor, Warwick Smith, was advised on 18th April 1995:-

“It is unfortunate that there have been forces at work collectively beyond our reasonable control that have delayed us in undertaking our work.” (See Alan Smith – Warwick Smith Target)

QUESTION 3

Why didn’t Mr Pinnock inform the Senate that if his predecessor had investigated who “these forces at work” were, that were interfering in this Government-facilitated arbitration process, and eliminated those forces in 1995, the COT arbitrations might have stood a better chance of bringing some sort of justice to the claimants!

QUESTION 4

When Mr Pinnock was addressing the Senate in relation to Alan Smith’s case, why didn’t he advise the Senate he knew Commonwealth Ombudsman Ms Philippa Smith wrote to Frank Blount, Telstra’s CEO, on 6th May 1994 noting:

“it was unreasonable for Telecom to impose a condition for release of certain documents that the participants needed to make further assurances that they will participate in the FTSP; and

“it was unreasonable for Telecom to require the participants to make the assurances while Telecom was considering the agreement related to the FTSP (the Agreement) and thereby denying the participants the opportunity to consider the rules that Telecom wished to have included in the Agreement.” (GS-CAV 188)

QUESTION 

Why didn’t Mr Pinnock tell the Senate that:

  1. Derek Ryan of DMR Corporate wrote to Mr Pinnock, as the administrator of Alan Smith’s arbitration, on 2nd December 1995 advising

“I worked all day Saturday and Sunday with Alan Smith trying to interpret the FHCA report. After this work I considered that the report was incomplete as the calculations of the FHCA loss figures were not included in their report. …

“On 17 May I telephoned John Rundell and he stated that he was unable to discuss anything with me until the appeal period had expired. During that telephone conversation I told him that I was unable to recalculate the FHCA figures and that I felt that the report was deficient in this regard, he then stated that he understood my problems and that FHCA had excluded a large amount of information from their final report at the request of the arbitrator.”

  1. John Rundell later wrote to Mr Pinnock (13th February 1996) confirming he advised Mr Ryan “that the final report did not cover all material and working papers”

QUESTION 6

Why didn’t Mr Pinnock tell the Senate he knew the technical resource unit’s draft report regarding Alan Smith’s case stated extra weeks were needed to complete the work and this request was mischievously deleted from the draft, and the draft was presented as a final report (in the same way that the FHCA Financial Report was presented as a final report

Mr Pinnock also states

“On an objective and dispassionate analysis in my view of the procedures, there are nevertheless benefits that have been derived, particularly for the claimants, although I am the first to admit that they do not necessarily agree with my view on these matters”

QUESTION 

Why didn’t Mr Pinnock tell that Senate that, long after the arbitration process was supposed to fix the claimants’ telecommunications problems, the businesses of at least two of the claimants, Graham Schorer and Alan Smith, continued to suffer from exactly the same problems that led them to arbitration

QUESTION 

In Alan Smith’s case

  1. Telstra’s Peter Gamble’s witness statement noted:-The SVT, carried out in September 1994, showed that the service passed the Customer Specific Line Tests and the Public Network Call Delivery Tests. My overall conclusion based on the analysis of the selected performance parameters outlined above is that in the periods covered by these investigations (which commenced in July 1991 and concluded in September 1994), Mr Smith’s service met appropriate performance levels and therefore appeared, in my opinion, to be operating satisfactorily” and,
  2. On page 23 of the arbitrator’s award, at point (j), the arbitrator states:-

“Another important statement on behalf of Telecom is made by Peter Henry Gamble who was involved between July 1991 and September 1994 in a series of investigations and analyses of the claimant’s complaints. His overall conclusion was that during the period in question, the claimant’s service ‘… met appropriate performance levels and therefore appeared, in my opinion, to be operating satisfactorily’.” (see Dr Hughes Verification Issues LGE 7

What would the arbitrator have put at this point in his award if he had known Mr Gamble’s opinion was based on information known to be false, including the fabricated September 1994 SVT tests

QUESTION 

On page 101 of this same Senate Hansard Report exhibit, Mr Pinnock notes

“Turning to what I regard as the benefits – firstly under the fast track arbitration procedure, the claimants had the significant benefit of Telstra effectively waiving any statutory immunity it may have otherwise been entitled to plead in legal proceedings.”

If Telstra were waiving their statutory immunity why, in Alan Smith’s case, on page 16 of the arbitrator’s award, at point (a), would the arbitrator note Telstra referred to statutory immunities, e.g.

“Statutory Immunities: In its defence documentation, Telecom makes reference to statutory immunities contained in the Telecommunications Act 1975 section 101 and the Australian Telecommunications Act 1989 section 30.”? (GS-CAV 314)

On page 127 of this same Senate Hansard Report Senator Boswell asks John Pinnock:

“Could Mr Schorer make a request that he wants disclosure of the documents?

Mr Pinnock“Yes. As long as he can say, ‘I want the arbitrator to order Telstra to produce documents relevant to my arbitration’, he is entitled to make such an application. It would have to have some degree of specificity, obviously. The arbitrator is not going to be able, with confidence, to make an order that Telstra produce all relevant documents. One would need some boundaries to the request. However, the power has always been there. I might say, Senator, that in the early days when Mr Schorer and I were discussing this matter, we clashed very much on this point.”

Senator BOSWELL“In what way

Mr Pinnock “I put to Mr Schorer precisely what I put to the Senate committee today about the deficiencies of the FOI process. I said that I was of the strong view that applications for documents ought to be made under the arbitration procedures and, equally forcefully, Mr Schorer put to me that the CoTs had always been promised by all concerned that access to documents would be made and that the best way to do that was under FOI.

Senator SCHACHT“I ask Mr Wynack: with all the requests that you have made to Telstra on FOI, have you felt that there has been any deficiency in your powers, even though it may be a belated process, to finally get the information that you need?

Mr Wynack “I do not believe that there is any deficiency in our powers. I think that our extremely limited resources have limited the processes we can apply to investigations.” (GS-CAV 315)

What Mr Wynack didn’t disclose to Senator Schacht, is that, on 22 April, 1997 he wrote to Telstra’s John Armstrong, Legal Directorate Office, stating

“I refer to your letter of 21 April 1997 to Alan Smith concerning the assessment of the amount of compensation payable to Mr Smith.

“I note with concern that you sent a copy of that letter to the TIO. Please inform me as soon as possible why you have made the TIO privy to what I understood to be a confidential process involving Mr Morgan, Telstra, Mr Smith and the Ombudsman.” (GS-CAV 317)

It is clear from the content of Mr Wynack’s letter that John Pinnock was privy to confidential information that had nothing to do in his role as TIO.  Remember, Dr Hughes wrote to John Pinnock, on 21st June 1995 and attaching a letter from Alan Smith on 20th June 1995 confirming Telstra knowingly used flawed defence documents in Alan’s arbitration.  (See Dr Gordon Hughes and John Pinnock Conspiracy to Pervert the Course of Justice LGE 5

However, Dr Hughes 21st June 1995 letter of concern regarding this matter was only copied to Mr Pinnock and Telstra

It appears, from Mr Wynack’s letter of 22nd April 1997 and Dr Hughes’ letter of 21st June 1995, John Pinnock, Dr Hughes and Telstra had a three-way relationship that Mr Pinnock did not disclose to the Senate

4th October 1997:  John Wynack writes to Telstra regarding Alan’s FOI request of 18th October 1995 which has still not been fully responded to.  Mr Wynack asks Telstra to inform him “of the actions which Telstra has taken to ascertain the whereabouts of the specific the file which Ms Gill described as the ‘arbitration file’”. (AS-CAV 233)

8th October 1997:  The Hon Peter Costello writes to Alan

“I am quite seriously concerned about the allegations you make regarding the Telecommunications Ombudsman, Telstra Senior Management, the Arbitrators and the Resources Unit attached to the Arbitration. Any information you have of allegations of impropriety should be brought to the attention of Senator Alston and the Australian Federal Police.” (AS-CAV 234)

When Alan contacted the parties as suggested by Mr Costello, they all declined to become involved

23rd October 1997:  Senator Schacht’s office faxes Senator Ron Boswell the proposed terms of reference for the Senate Working Party, for their investigation into the COT arbitration FOI issues.  This document shows two lists of unresolved COT case FOI issues to be investigated:  five on Schedule A and 16 names of Schedule B.  Graham Schorer’s name is on Schedule A, while Alan Smith’s name is on Schedule B (GS-CAV 318-A). This list states:

“1.       The working party must develop a list (“List”) of all document which

  • were reviewed by Telstra in the course of preparation of its defence;
  • were brought into existence after Telstra prepared its defence, but which would in the opinion of Telstra’s solicitors have been reviewed by Telstra if it were preparing its defence today; or
  • were lost or destroyed before Telstra prepared its defence, but which would in the opinion of Telstra’s solicitors have been reviewed by Telstra if they had been in existence at the time Telstra was preparing its defence,

including documents in relation t

  • the:
  • arbitration cases
  • responses to requests under FOI; and
  • appeals in respect of cases already decide

described in Schedule A to these terms of reference. 

  • if the Working Party becomes aware of relevant case additional to those listed in the Schedule, or relevant documents, the Working Party will advise the Senate Environment Recreation, Communication and the Arts Legislation Committee in writing of these cases or documents and the reasons why the Working Party considers they are relevant. The Working Party will not proceed with any investigation of such additional cases or documents unless and until the Senate Environment, Recreation, Communications and the Arts Legislation Committee so agrees in writin
  • the Senate Environment, Recreation, Communications and the Arts Legislation Committee reserves the right to amend the Schedules to this document.

It is important to point out in the heading of the Senate Schedule, the 16 other COT case names are shown in the Senate Schedule B as described below:

“Unresolved Matters, Including The Amount Of Settlement Offered Or Paid In Respect Of Persons Listed In Schedule B.”

Graham was told the five claimants in list A were to be investigated first, as they were to be used as a ‘litmus test’:  it would take too long to investigate all 21 cases, including the 16 on the B list, and that would impact on the privatisation of Telstra.  It has since been proved Graham never received anywhere near the number of FOI documents he should have received in response to his various FOI requests, even with the Senate Working Party’s involvement.  If the Government of an alleged democratic country couldn’t obtain documents from a Government-owned Corporation like Telstra, then what hope did any of the COT cases and the arbitrator have of obtaining documents?

IMPORTANT

Alan Smith travelled to Parliament House in Canberra before the A list was even formed and saw how shocked Mr Pinnock was when Graham Schorer introduced Alan to him during a breakfast meeting in the motel.  Alan believes his name was left off the A list as a direct result of his comment to Mr Pinnock (during this breakfast meeting) that he would, at last, be able to have the unlawful conduct by the arbitrator, Telstra and the resource unit properly addressed by the pending Senate investigation

Mr Pinnock could not risk a Senate investigation into Alan’s FOI issues, as that would have uncovered Mr Pinnock and Dr Hughes’ agreement, during January and February 1996, to hide the very same FOI issues from the Institute of Arbitrators and Graham Schorer’s Directions Hearing on 27th February 1997.  Mr Pinnock could not allow Alan Smith’s FOI issues to be investigated by the Senate because an investigation would show FOI documents Alan did not receive, during his arbitration, proved Telstra knowingly used flawed reports and test results to support their defence

24th October 1997:  John Pinnock writes to Ms Pauline Moore, Secretary Senate Environment, Recreation, Communications and the Arts Legislation Committee, noting:

“I refer to previous correspondence and discussions with the Committee’s Research Officer, Ms Ducker, concerning a series of questions put on notice by Senator Boswell and arising out of the Committee’s proceedings of 26 September 1997…” (GS-CAV 318-B)

“The COT Arbitration Procedures contain provisions relating to the confidentiality of the proceedings, which bind the parties. Those provisions also bind the Arbitrators, the Resource Unit, the Special Council and the TIO in my role as Administrator.

Please note: only Telstra and the COT claimants signed the Confidentiality Agreement.

Mr Pinnock also notes:-

“Accordingly, I ask that the answers given below to the questions on notice be treated as confidential by the Committee and not published:

  1. In November 1995 I received correspondence from a COT member expressing concern about the Technical Resource Unit. The COT member:
  • expressed concern that the purchase by Pacific Star of Lane Telecommunications compromised the independence of the Technical Resource Unit;
  • stated that there were inaccuracies and biases evident in the Lane Telecommunications/DMR Technical Evaluation Report;
  • requested the Telecommunications Industry Ombudsman to dismiss the Resource Unit.
  1. On 6 November 1995 I was advised by Steve Black of Telstra that Lane Telecommunications and Pacific Star had already worked together on several Pacific Star contracts in Queensland and Western Australia and for the Federal Government.” 

and at point 6, 8, 9 and 10

6Apart from the evidence I gave to the Committee on 26 September 1997 concerning the purchase of Lane Telecommunications by Ericsson Australia. I have recently been advised by one of the Arbitrators (Dr Hughes) that he will be transferring his legal practice to Blake Dawson, Waldron, Solicitors. I am aware that that form is currently acting for Telstra in relation to a number of matters. Arrangements are being made to discuss with Blake. Dawson, Waldron any possible conflicts of interest. …

8. It is my recollection that I have never stated in person or by telephone to individual COT members and/or their representatives that the arbitration has failed.

9. Yes, from time to time I received complaints from foundation COT members, concerning a range of matters, including alleged non-compliance with the rules of the Fast Track Arbitration Procedure by Telstra and/or the Arbitrator and/or the Technical and Accounting Resource Unit. Identifying individual instances of complaints and detailing the response taken will require a huge amount of administrative resources in searching TIO files\

10. Yes, I have refused to provide COT members with a copy of Telstra’s Preferred Rules of Arbitration. A copy of this document was not provided because it was of historical interest only, and the COT members did not advance any argument as to why it was relevant to their arbitration. A copy is provided for the information of the committee.

Mr Pinnock’s letters would take considerable time:  in this context, it is more useful to address specific statements, such as those pertaining to the non-compliance with the rules of the Fast Track Arbitration Procedure by Telstra and the arbitration units.  The situation regarding the financial unit is addressed in Alan Smith’s CAV Chronology of Events and elsewhere in this document.

Point 10 in Mr Pinnock’s letter is, however, most important and is addressed in the following list.

Exhibit GS-CAV 153 is a letter dated 24th January 1994 from Mr Shelton of Minter Ellison to Dr Hughes, the arbitrator, noting:-

“Following our meeting on Thursday last, I now enclose revised Procedure for your consideration.

Exhibit GS-CAV 171 is a letter dated 25th February 1994 from Mr Shelton to Dr Hughes, detailing amendments made to the Fast Track Arbitration Procedure by Mr Shelton.

Exhibit GS-CAV 172 is an internal Telstra email dated 2nd March 1994 noting:

“My course therefore is to force Gordon Hughes to rule on our preferred rules of arbitration.”

Exhibit GS-CAV 175, dated 22nd March 1994 is the transcript of a secret arbitration meeting attended by Telstra and their lawyers (Simon Chalmers and David Krasnostein from Telstra’s Legal Directorate), Dr Hughes (Arbitrator), Peter Bartlett (the TIO’s Special Counsel) and Warwick Smith (TIO).  The COT claimants were not represented and were not even aware of this meeting until late in 1998.  At point 2 in this transcript, Telstra notes:

“Mr Smith [the TIO] stated he would not endorse the rules as fair unless clause 10.2.2 repeated clause 2(f) of the Fast Track Settlement Proposal…

Exhibit GS-CAV 319 is a copy of Telstra’s Preferred Rules of Arbitration, which was attached to Mr Pinnock’s letter to Ms Pauline Moore (see exhibit GS-CAV 318-B).  With the exception of some minor cosmetic changes, this document is exactly the same as that allegedly drafted by Mr Shelton, proving Telstra’s threat to force Dr Hughes to use their preferred rules of arbitration, was no idle threat.

Exhibit GS-CAV 320 is page two from the award Dr Hughes handed down on 11th May, 1995 in Alan Smith’s case.  In this document, at point (h), the arbitrator notes:-

“at my request, an arbitration agreement was prepared by Mr (now Judge) Frank Shelton of Messrs Minter Ellison and settled by Messrs Minter Ellison in consultation with me, Telecom and the four COT case members concerned;

It may be argued that Frank Shelton’s amended agreement was prepared collectively by Mr Shelton, Dr Hughes and the COT claimants and only included some clauses from Telstra’s preferred rules.  Although, it is clear that almost all of the amended FTSP agreement was based on Telstra’s preferred rules.  Page 9, point 8(a)(bb)(ii), was taken directly from the AUSTEL-facilitated Fast Track Settlement Proposal clause 2(f), i.e., “will make a finding on reasonable grounds as to the causal link between each of the Claimants claims and the alleged faults or problems”, which was also in Telstra’s preferred rules. (GS-CAV 319)

Did Warwick Smith and John Pinnock refuse to provide the COT claimants with a copy of Telstra’s preferred Rules of Arbitration because it would reveal Frank Shelton’s agreement was almost (except for some cosmetic changes) the same agreement as Telstra’s Preferred Rules (and that someone altered clause 10.2.2)?  Therefore Warwick Smith, the TIO, should have kept to his promise to withdraw his endorsement of the rules? (GS 175)

OR perhaps it was because Warwick Smith and John Pinnock were concerned the COT claimants and their advisors might compare Telstra’s FTSP rules, Minter Ellison’s Arbitration Agreement and the final FTAP Agreement Graham Schorer and Alan Smith signed, and discover yet another alteration was made to the version provided to Dr Hughes, so that Minter Ellison (as Special Counsel) and the two resource units (FHCA and DMR) were exonerated from any liability resulting from negligence or wrongdoing?

The original FTSP was originally based on the AUSTEL-facilitated commercial review (which was never intended to be a legalistic arbitration) and the TIO, Telstra, the TIO’s Special Counsel and the Assessor, Dr Hughes, were all involved to some degree in turning the commercial review into a highly legalistic and unworkable arbitration process.  After all this, Dr Hughes wrote to Warwick Smith on 12th May 1995, warning the TIO that the whole process was not credible and the TIO told the Senate on 26th September, 1997 that the arbitrator had NO control over the process.  This secret alteration to the Arbitration Agreement, either by Warwick Smith and Peter Bartlett alone, or with Dr Hughes’ assistance, took away the only life-raft the COT claimants had – the right to sue the Special Counsel, FHCA or DMR (Australia) for misconduct

Graham’s solicitor, William Hunt, showed concern in his file notes (see 8th December, 1997 below) because Mr Pinnock wouldn’t provide him a copy of Telstra’s preferred rules noting:

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

“Schorer is convinced that it will show a complete programme altering the intention of the fast track settlement proposal and commercial assessment which was the subject on the November 1993 arrangement

Please note: The Senator, who finally provided Graham with a copy of Telstra’s Preferred Rules, is not named here in order to protect his/her identity.

27th October, 1997:  Graham Schorer writes to John Wynack, attaching a letter dated 11th January, 1994 to AUSTEL from Telstra’s Paul Rizzio, Group Managing Director, Finance and Administration. (GS-CAV 321-A & GS-CAV 321-B).  In his letter, Graham provides Mr Wynack with evidence proving Telstra advised AUSTEL it would not provide documents for the COT claimants until the claimants formally entered the TIO-administered arbitration process.  Paul Rizzio’s letter, and letters to Warwick Smith (see Graham Schorer CAV Relevant Information file, exhibit 13), confirm Telstra also advised Warwick Smith of this.

The draft AUSTEL Report regarding Alan Smith, the Cape Bridgewater Holiday Camp and the local exchange was not released to Alan before or during his arbitration (although it was released to Telstra).  Alan finally received a copy in November 2007.  Even after Alan signed the Arbitration Agreement (which was one of the provisions under which the draft findings would be released), he still wasn’t provided with a copy of the draft.  If he had been correctly provided with a copy of the Draft Report before the end of his arbitration, (and if the arbitrator had seen it), the Arbitrator’s Award would have been quite different.

The letters from Telstra to AUSTEL and Warwick Smith state:

  • “Information obtained from Telecom, in the course of AUSTEL’s regulatory functions, and relevant to any parties involved in a formal arbitration process with Telecom under the control of the Telecommunications Industry Ombudsman (TIO) will only be released after consultation with the TIO and Telecom.
  • The AUSTEL draft report will be expedited to ensure that it is available at an early stage of the arbitration process.
  • The AUSTEL draft report will be released to the parties involved in the fast track arbitration process for comment in accordance with a process agreed with the TIO, and only after each party has signed a formal document committing to keeping the contents of the report confidential and giving an undertaking not to comment either privately or publicly on the report until after it has been released publicly by AUSTEL.” (GS-CAV 136)

28th October, 1997:  Mr Pinnock writes to Ted Benjamin re Mr Alan Smith:  Dispute 1800 Charges, and notes:-

“For your information I enclose a copy of a letter received from Mr Smith.

“I would appreciate your detailed advice concerning call charges for Mr Smith’s 1800 line, in particular whether Telstra agrees that this matter was not addressed in Mr Smith’s arbitration.” ( AS-CAV 212)

Alan has never seen a response to this letter, but Ted Benjamin wrote to AUSTEL’s Bruce Matthews on 11th November, 1994 confirming Telstra would address the billing faults raised by Alan Smith, in their defence of his claims lodged under the FTAP

Other correspondence provided to Mr Pinnock by AUSTEL on 3rd October, 1995 and referred to previously, shows he was advised Telstra had still not addressed the billing issues then, five months after Dr Hughes deliberated on Alan’s claim.  Telstra responded to AUSTEL’s letter on 16th October, 1995, again confirming that the 008/1800 billing issues were never addressed in Alan’s arbitration and also confirming Telstra was trying to address these same issues from Alan’s arbitration, including short duration and RVA calls, and fax faults in secret – outside the legal structure of the FTAP. (AS-CAV 213)

By AUSTEL allowing Telstra to address arbitration matters outside of the arbitration procedure, without giving Alan right of reply, has made a further mockery of the FTAP.  Was it unlawful, under the Victorian Commercial Arbitration Act, for the defendant Telstra to secretly address arbitration issues raised by a claimant outside the legal forum of the agreed-arbitration procedure?

Please note

In its attempt to convince AUSTEL Alan’s complaints about the billing issues were not valid, Telstra attached a Witness Statement to the 16th October, 1995 letter, which was originally signed by Ross Anderson, a local Portland technician on12th December, 1994 and attached it to Telstra’s legal submission provided to Dr Hughes.  Ross Anderson was the technician who collected Alan’s TF200 telephone from Alan’s premises on 27th April, 1994 – yet the phone did not reach Telstra’s laboratories until 10th May, 1994.  In Alan’s reply to Telstra’s Arbitration Defence, he provided evidence to the arbitrator that either Mr Anderson lied under oath, or his negligence as a technician attributed to the problems in the phone system. (AS-CAV 73)  This raises another issue that has never been addressed – Telstra’s use of a tainted Witness Statement in an attempt to stop AUSTEL from further investigating Alan’s valid complaints

During this same period in October 1997, the Senate became involved and expressed outrage that Telstra had knowingly altered (blanked out) relevant sections of documents being supplied to the COTs under FOI.  Particularly in relation to Telstra’s Excel files that were being given to Alan, but which he had not sighted during his arbitration.  Under pressure from the Senate, Telstra provided some 200 previously unseen documents.  Commonwealth Ombudsman records support this

Alan prepared a report titled Telstra’s Falsified BCI Report, using many of the late received Excel files as support.  In 2016, eight copies of this report, along with supporting exhibits, were provided to members of Telstra’s Board.  As previously discussed, Technical Consultant Brian Hodge, BTech, MBA (BC Telecommunications) concluded BCI could NOT have generated the 13,000 (through the CCS7 system) because the unmanned Cape Bridgewater RCM could not facilitate this test call-trapping device

Fault data associated with Alan’s complaints should never have been withheld from him under the cloak of legal professional privilege.  Graham and Alan believe these few examples alone show how disadvantaged he was by not receiving the documents he should have received during his arbitration procedure.  If these documents had been provided, he would have had grounds to ask Telstra for Further Particulars

Put together the Excel files that Telstra didn’t supply under FOI or discovery, together with the documents that were not provided to DMR and Lane, by the TIO-appointed resource unit, and it is clear why Alan and Graham are still fighting for a correct assessment

This list of documents, produced by using Telstra’s schedules of Alan’s claim material (which it received from DMR and Lane), does not match up with the list of material Alan forwarded to arbitrator Dr Hughes for Telstra.  Alan matched these lists to his Telstra fax/phone account to determine which claim documents he faxed to Dr Hughes and which were then copied to Telstra under the agreed rules of supply and discovered Telstra did not receive at least 41 separate sets of information Alan faxed to Dr Hughes’s office.

Exhibit AS-CAV 62-B confirms an arrangement existed between Telstra, Warwick Smith and FHCA, to vet arbitration documents prior to being delivered to Dr Hughes.

Telstra’s Arbitration Liaison Officer, Steve Black, wrote to the TIO Warwick Smith on 11 July, 1994 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 [sic]. 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.”
(AS-CAV 179-B)

The statement, “If the resource unit forms the view that this information should be provided to the arbitrator”, confirms that both the TIO and Telstra were aware the TIO-appointed resource unit was 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 to the arbitrator or other parties.  This particular secret deal has been linked to further clandestine dealings.

Are we to assume that some of Alan’s 41 documents were vetted and then destroyed before reaching Dr Hughes?

Note: The TIO did NOT have the authority to introduce a separate deal into a process being conducted according to a written legal agreement.

Revisiting FHCA’s conduct

As previously discussed, on 6th December, 1995 Derek Ryan, Alan’s arbitration accountant from DMR Corporate, Melbourne, was so incensed with the inaccuracies in FHCA Financial Report that, without Alan’s knowledge, he wrote to Senator Alston to alert him to what Mr Ryan believed was a miscarriage of justice.  He notes:-

“The FHCA report was inaccurate and incomplete.  I have since been advised by a staff member of FHCA that a large amount of information was excluded from their final report at the request of the arbitrator.” (AS-CAV 177-A)

On 20th December, 1995 John Pinnock wrote to Mr Ryan refuting his allegations in his letter (AS-CAV 177-B).  Derek Ryan responds to Mr Pinnock, naming John Rundell as the FHCA person who advised of this incomplete report see (AS-CAV 178-B).

Also discussed previously, John Rundell wrote to Mr Pinnock on 13th February, 1996 stating:-

“I did advise Mr Ryan that the final report did not cover all material and working papers.” (AS-CAV 179)

Steve Black’s aforementioned letter to the TIO dated 11th July, 1994 appears to be relevant to most document issues being discussed here, i.e., FHCA altering reports, the removal of information from technical reports under the guidance of FHCA and the withholding of vital inter-procedural arbitration documents from Alan by FHCA.

Questions:

  • What happened to the material Telstra supplied to FHCA, which, in FHCA’s opinion was not relevant to the arbitration?
  • Why did Warwick Smith not advise Graham and Alan, prior to signing the Arbitration Agreements, that FHCA, as the Resource Unit, would be vetting material provided by the defence before it reached the arbitrator?
  • Was it appropriate for Warwick Smith, as the Arbitration Administrator, to give FHCA technical priority over Graham and Alan’s own technical advisor George Close, as to what was of relevant technical importance and to be seen by the arbitrator, and what was not??
  • Was FHCA’s involvement with the vetting of documents between Telstra, the claimants and Dr Hughes also related to why DMR and Lane’s list of Alan’s supposedly assessed claim documents were only added after they submitted their incomplete report as the Final Report?
  • Is it usual in an arbitration process such as Alan’s, to have two incomplete reports (the FHCA financial report and the DMR and Lane report) provided to the claimant and their professional advisors for official written comment?

Exhibit AS 220 confirms FHCA wrote to Dr Hughes (copying the same to the office of TIO), on 2nd August, 1996 admitting to withholding a number of arbitration procedural documents from Alan Smith during his arbitration.  As can be seen from exhibit AAS 217, the TIO appeared concerned about this, but has never addressed this matter.

7th November, 1997:  John Pinnock again writes to Ms Pauline Moore, secretary to the Senate Environment, Recreation, Communication and the Arts Legislation Committee, noting:-

“I refer to your letter of 31 October 1997, seeking further advice, on behalf of the Committee, arising out of my answers to Questions on Notice. …”

“I also note that the Committee wishes me to identify any documents provided in response to questions from the Committee, that I request remain confidential and to provide reasons for my request. …”

I set out my reasons for seeking confidentiality in relation both to information and documents supplied in that letter.” (GS-CAV 321)

Question:

The TIO held his position as a privately funded ombudsman.  A substantial part of the funding for his position came from the party under investigation in the COT arbitrations.  His only role in the COT arbitrations was as administrator.  The arbitrations were supposed to have been conducted transparently according to the Commercial Arbitration Act 1984 (Victoria).  How could Mr Pinnock therefore ask that any information or documents ‘remain confidential’?

Alan Smith and Graham Schorer believe the Senate Environment, Recreation, Communication and the Arts Legislation Committee should be advised it has now been proved that:-

  1. The TIO’s office knows – (at least in Alan’s arbitration, if not the other COT arbitrations) – the TIO-appointed Technical Resource and Financial Resource Units’ Reports either omitted important issues or were incomplete when they were provided to the claimant as if they were the Final Reports. The claimant was formally advised to respond to the incomplete versions of the reports, without being advised of the flaws in the reports.
  2. The TIO’s Office and/or its Special Counsel were party to the removal of two important clauses from the Arbitration Agreement, after the agreement was provided by Dr Hughes’ office to Solicitors Hunt and Goldberg as the final agreement, for legal advice regarding whether or not Graham and Alan should sign the agreement.

The Senate Environment, Recreation, Communication and the Arts Legislation Committee should be required to provide all the documentation they received from the TIO’s Office between 1995 and 2000, regarding the COT arbitration process.

7th November, 1997:  Mr Pinnock writes to Ms Catelli, of the Department of Communications.  This letter is in response to Alan’s letter to the Minister alleging his arbitration wasn’t conducted in a transparent manner.  Mr Pinnock makes no reference to Dr Hughes continuing to arbitrate using an agreement he knew was not credible, but instead, advises he has “considered each and everyone [sic] of these various allegations which I have found to be without substance”. (AS-CAV 235

Important:

Mr Pinnock made this statement five weeks after he condemned the COT arbitration procedures to the Senate and the Minister’s Office, on 26th September 1997, and stated:-

“One of the potential deficiencies should have been obvious from the outset. This deficiency revolves around the vexed question of the best method of enabling the Claimants to obtain documents held by Telstra. For present purposes, it is enough to say that the process was always going to be problematic, chiefly for three reasons, firstly, the Arbitrator had no control over the process, because it was conducted entirely outside the ambit of the Arbitration Procedures.”

17th November, 1997:  Wally Rothwell, Deputy TIO, writes to Alan confirming Mr Pinnock wrote to Telstra on 28 October regarding charges related to his fax line. (AS-CAV 236)

21st November, 1997:  Graham writes to William Hunt:-

“Enclosed is a copy of the Preferred Rules of Arbitration Telstra provided to the then TIO, Mr Warwick Smith, on or before 12 January 1994, entitled “Telstra Corporation Limited – ‘Fast Track’ Proposed Rules of Arbitration”, plus an interesting letter.”

“When I have the time, I am going to check the Clauses and wordings of this document against the Clauses and wording in:-

  1. the arbitration process mentioned in the AUSTEL letter of 18 November 1993 to Garms, Gillan, Smith and Schorer;
  2. the “Draft” of the Fast Track Arbitration (FTAP) allegedly drafted by Sheldon of Minter Ellison forwarded to the C.o.T.s in early February 1994;
  3. the Final Draft of the Fast Track Arbitration Procedure.” (GS-CAV 322)

26th November, 1997:  Graham writes to John Pinnock

“Re: Dr Hughes’ transfer of practice to Blake Dawson Waldron creating potential conflict of interest. …”

“In order to protect my self interest, I can no longer support Dr Hughes being the Arbitrator in my arbitration against Telstra. …”

“As my arbitration has been declared, in effect, a “mistrial”, and the offer of professional mediation is on the Agenda, I agree to meet you and Telstra on Tuesday, 2 December 1997 to discuss this and the fall back positions to be adopted if it, for any reason, fails to produce resolution.” (GS-CAV 323)

Mr Pinnock removes Dr Hughes as Graham’s arbitrator.

Regarding Telstra’s non-compliance with the FOI Act, prior to and during the arbitrations, and their conduct (GS-CAV 318-A):-

  1. In 1997, the Senate Environment, Recreation, Communications and the Arts Legislative Committee set up a Working Party to examine the COT arbitrations, with the assistance of the Commonwealth Ombudsman’s Senior Investigating Officer, Mr John Wynack. Even this intervention, by the Federal Government, could not force Telstra to supply all relevant FOI documents requested by Graham Schorer during this Senate investigation.  Therefore, what hope did Graham or any of the COT claimants have of acquiring the documents they were promised when they signed for arbitration?
  2. On 26th September, 1997 Mr Pinnock advised the Senate Environment, Recreation, Communications and the Arts Legislative Committee:-

“In the process leading up to the development of the arbitration procedures – and I was not a party to that, but I know enough about it to be able to say this – the claimants were told clearly that documents were to be made available to them under the FOI Act.”  (GS-CAV 312-A, also see GS-CAV 311)

Even after this statement, still no public investigation was conducted into how Telstra (a Government-owned Corporation during Graham Schorer and Alan Smith’s arbitrations) were able to control the arbitration process to their benefit and the claimants’ detriment.

  1. With all this information before them, why did the Federal Government condone the hiding of these FOI/arbitration matters, under the cloak of in-camera Senate Hansard privilege?
  2. If the Senate Working Party found nothing wrong with how the COT arbitrations were conducted, why did Senator Alan Eggleston, (Chair of the Senate Environment, Recreation, Communications and the Arts Legislative Committee), write to Alan Smith, on 16th August 2001, to warn him that he could be charged under the Parliamentary Privacy Act if he exposed in-camera Senate Hansard reports on the Senate Working Party’s investigation into the Telstra COT FOI arbitration matters?
  3. Why is the Commonwealth Ombudsman’s Report, prepared by John Wynack in relation to the Senate Working Party, being withheld from public scrutiny? What is in Mr Wynack’s Report, that caused the Coalition Government to classify it as parliamentary privileged?
  4. How can the TIO’s Office continue to maintain their TIO-administered COT arbitrations were conducted lawfully and transparently even when the Government of the day had to cover their Hansard reporting of 6th and 9th July, 1998 regarding the COT arbitration fiasco, as in-camera privileged information?

CHAPTER SIX

3rd December, 1997:  Graham writes two identical, but separate, letters to David Hoare, Chair of the Telstra Board and Michael Montalto, Telstra’s Corporate Secretary:-

“With reason, C.o.T. members believe many of Telstra’s recent answers provided to The Senate are neither true nor fair answers to specific questions asked of it by individual Senators.

“The attached Appendix, with supporting documents, sets out the reason for the C.o.T. members’ belief.” (GS CAV 325-A and GS CAV 325-B)

Had David Hoare and Michael Montalto correctly addressed some of the important issues raised in the appendix, most, if not all, of the problems continuing to plague the COT claimants could have been solved then.  For example, appendices one and two show Graham proved to the Telstra Board that the Alan Smith Bell Canada Addendum tests were impracticable, yet Telstra still used the results of those tests to support their defence of Alan’s arbitration claim.  Alan’s chronology shows DMR and Lane never investigated any of the faults Alan claimed continued to occur after the Bell Canada tests were completed.

Had the Telstra Board correctly investigated Graham’s evidence, they would have agreed with Brian Hodges MBE (Technical Consultant), in his report of 27th July, 2007, when he concluded BCI could not have conducted the tests at Cape Bridgewater and thus all Cape Bridgewater BCI tests were fundamentally flawed (see Alan Smith’s Relevant Information file).

The CAV Conspiracy to Pervert the Course of Justice LGE 5 files for John Pinnock and Dr Hughes show, on 20th June, 1995 Alan Smith provided both of them with the same evidence that Graham provided to Mr Hoare and Mr Montalto.  On the following day, 21st June, Dr Hughes wrote to Mr Pinnock (and copied to Telstra) regarding Alan’s BCI evidence.

Did Mr Hoare and Mr Montalto receive Alan’s letter of 20th June, 1995 regarding the BCI evidence, and Dr Hughes’ letter to Telstra on 21st June?  Perhaps the Telstra Board deliberately allowed Telstra to use the flawed BCI Defence Material in the COT arbitration process – and then allowed Telstra’s misleading and deceptive answers to the Senate, on 26th September, 1997 to go unanswered, because it wanted to avoid a major inquiry into Telstra’s use of false evidence in a process conducted under the auspices of the Commercial Arbitration Act, Victorian Supreme Court. (See Senate Hansard and Graham Schorer Relevant Information files, pp 23 and 24)

5th December, 1997:  Graham again writes:-

“CoT members believe many of Telstra’s recent answers provided to The Senate are neither true nor fair answers to specific questions asked of it by individual Senators.” (GS CAV 324)

Although this letter is only a draft of the 5th December, 1997 letter (GS CAV 336) and it is referred to in Part 1 of the Chronology, it is included for reference.

Graham Schorer writes to John Wynack:-

“Enclosed with this facsimile is the interim List describing the types and classes of documents Telstra need to discover in order to identify their existence in its list of documents to enable it to comply with the Senate Committee Terms of Reference. Equally, these are some of the same documents the Claimant, GOLDEN, needs to establish reasonable causal link between telephone service difficulties, problems and faults it experienced and call losses.” (See Graham Schorer CAV Relevant Information file, exhibit 14)

8th December, 1997:  William Hunt’s file note shows just how concerned he was for Graham to end this dreadful Telstra saga:-

“I have recommended to Schorer that he settle for almost anything that would be of use to get on with his business. He says he can quantify his call losses without any doubt (I would need to be shown this to believe it. What he cannot determine is the cause of the call losses being the fault of Telstra and rate. This is always spoken about as being showing evidence of the cause or link between Telstra and the losses. It is not a question of quantifying causes or links it is a question of identifying in simple language that calls were lost because Telstra did not provide a service that enabled the calls to be received when made. …”

“It should be noted that there is something in incongruous and unfair in Telstra being the case directly or indirectly of Schorer’s losses being able to set up ‘its prepared rules of arbitration’ to dispose of the fast track settlement procedures…” (GS CAV 327-A)

IMPORTANT

Part 1 of this Chronology does not reveal how ill Graham became as he watched his business struggle to survive.  Not because of his business decisions, but because, like the other COT claimants, he had no control over the communications system linking him to his existing and prospective new customers.  As the COT spokesperson, Graham learned, early in the claims process, Telstra had to hide, at all costs, the network problems resulting from their incompetence in not reading the signs regarding business and residential telecommunications growth as a result of population/immigration growth – millions more than the Telstra Board expected.  All the extra telecommunications traffic, created by population growth in the cities and in numerous rural hamlets, which became major tourist attractions, put a severe strain on Telstra’s old and obsolete copper wire:  it was lasting only 20 years instead of the expected 40!  The combination of population growth and corroded copper wire caused communications congestion because Telstra’s Board didn’t do their calculations properly, and ordinary Australian business people (like Graham and Alan), suffered as a result.

After more than 10 years of attempting to run a telephone-dependent courier business, Graham attended his first counselling session on 18th November, 1996 in an attempt to control his anger in relation to the situation he found himself in due to the ongoing Telstra saga.  By 7th June, 1999 Graham had attended 107 counselling sessions.

When William Hunt noted he “recommended to Schorer that he settle for almost anything that would be of use to get on with his business”, Mr Hunt did not realise that, like Alan Smith’s business, Graham’s business was still experiencing telephone problems.  Bell Canada should have tested the lines properly at both Alan and Graham’s telephone exchanges:  the faults would have been uncovered if the tests had been carried out correctly.  Proper initial testing would also have shown Telstra hid the problems during the COT arbitrations, under Legal Professional Privilege or Telstra in-confidence, or simply by stating the problems did not exist.

How could anyone, particularly the Government of the country, reasonably expect a small-business person like Graham, to enter into a process as complex as a Senate Working Party at the same time as they were in an arbitration process and trying to run a business?

Graham’s letter of 29th September, 1997 to Ms Pauline Moore, secretary to the Environment, Recreation, Communications and the Arts Senate Committee, discusses Senate Hansard records of 26th September, 1997.  On page 2, at point 2 under the heading “Quantum of Claim”, Graham notes:-

“The claimant’s Interim Claim for loss, as at 30 September 1996, is a minimum $4.3 million to a maximum of $12.6 million.” (GS CAV 328)

Even though Graham provided the Senate Committee Secretary with his interim loss figures to September 1996, Telstra later pressured Graham into taking a May 1999 offer of $3.8 million without any forensic valuation of the costs involved in trying to get Telstra to simply provide the telecommunications service the Government assured all Australians they had a right to!

An accurate valuation was never provided regarding the consequential future losses resulting from prospective customers not being able to contact Graham’s business, or from the effects of bad advertising, spread by word-of-mouth among customers and prospective customers of Golden Messenger, as a direct result of the seriously faulty telephone service provided by Telstra.

There was never any investigation into Graham’s claim the Government Regulator started with a review of past and present problems and then, with the assistance of the TIO, converted the review into the commercial Fast Track Settlement Proposal (FTSP) and then the Fast Track Arbitration Process (FTAP), putting Telstra in control of the procedure.  In the end, even John Pinnock, the TIO, had to admit the arbitrator had no control over the arbitration process!

Back in September/October 1993, Graham convinced Ian Campbell, then Group General Manager of Telstra’s Commercial and Consumer Division, it would be cheaper and more successful, all round, if Telstra would just negotiate with the claimants, without any admission of liability, and appoint an assessor to take a case by case approach, so no precedent would be set and there would be no problems with quantum or call-loss calculations.

Because of these discussions with Graham, Mr Campbell and AUSTEL’s Robin Davey arranged the FTSP.  The process disintegrated, however, when legal gurus, within and outside Telstra, saw a way to make a fortune out of litigation instead of a simple commercial loss assessment, such as that commonly used by insurance loss assessors around the world.

By 1998, Graham was in a highly legalistic nightmare, having been forced out of the FTSP and almost to his knees in desperation.  Telstra’s legal parties saw Graham was becoming more frantic and denied the existence of any relevant FOI documents to support his claim, knowing that when they then offered him what would seem like a lifeline, he was almost guaranteed to accept any amount.  The following information shows just how far Telstra, and those allegedly employed as independent umpires, were prepared to go – to cover their tracks!

Had John Pinnock told the Senate Working Party, at the beginning of that process, that Warwick Smith (Mr Pinnock’s predecessor), Peter Bartlett and Dr Hughes were warned by FHCA’s John Rundell, on 18th April, 1995 the arbitration process was being derailed by “forces at work” beyond the control of the TIO-appointed arbitration resource units, then the Senate Working Party would have had to investigate this and the FOI matters.

Had Mr Pinnock told the Senate Working Party Dr Hughes also warned Mr Pinnock’s predecessor that, if the arbitration agreement was to remain credible, it had to be revised – but Warwick Smith ignored this advice and continued with the process:  it would be reasonable to conclude the Senate Working Party would have taken this matter seriously and included it in their further investigations.

Exhibit (GS CAV 329) is a Telstra facsimile dated 7th November, 1997 to the Senate Legislation Committee providing answers to the Senate concerning how many COT-type complaints were in existence during the previous financial year.  On page 3, is written:-

“During the last financial year the total costs of providing advice for legal matters including costs of the Telstra Legal Directorate and litigation and arbitration costs resulting from disputes and claims was approximately $52 million. Of this amount approximately $40 million was spent with external service providers including legal firms and patent attorneys.”

Telstra’s answer to the 1997-8 Estimates Hearing, question 112 shows Telstra were prepared to spend three times the total of the actual original claims, on lawyers and legal advisors.  This very damning issue is highlighted in our conclusion.

QUESTION:

  1. Why did Telstra force Graham and Alan out of the already signed FTSP commercial agreement that Telstra’s Group General Manager Commercial Business, Ian Campbell, thought was the best way to go for all concerned?
  2. Did the highly paid lawyers suggest Telstra should go legal instead of settling the claims commercially

It is clear from the answer given by Telstra, to the 1997-98 Estimates Hearing, the lawyers won and the COT cases’ lost.

12th December, 1997:  Graham writes to John Wynack, Commonwealth Ombudsman’s Office:-

“Enclosed is copy of the correspondence sent to all Senators and a copy of correspondence sent to all Telstra Board Members, including Appendix and index of support documents, plus all support documents. …”

“[D]ocuments now in the possession of C.o.T. confirm there was an agreement reached between Telstra and the then TIO, Mr Warwick Smith, on or before 12 January 1994, for a legalistic arbitration process to be used with the C.O.T. Four who signed the FTSP…”

“This is one of many examples of how Telstra used misleading, deceptive and unconscionable conduct against C.o.T. members to gain an unfair advantage in the dispute resolution process. Telstra’s unfair advantages gained by unethical tactics and unlawful conduct is resulting in C.o.T. members being financially disadvantaged.”

“This conduct must be investigated and exposed for what it is in order to make Telstra accountable and be restrained in the future from engaging in like conduct.” (GS CAV 330-A)

The Bell Canada tests, carried out on 1st & 10th November, 1993 and the Cape Bridgewater addendum tests that Graham labelled as fundamentally flawed in this letter, were also discussed on pages 107 and 108 of the Hansard records of the Senate Meeting on 26th September, 1997 attended by the TIO, John Pinnock (GS CAV 330-B).

Exhibit GS CAV 331-A is a Statutory Declaration, dated 6th November, 1995 which was sworn by Mr John Main, a COT claimant.

“I spoke to Ms Pia Di Mattina from the Telecommunications Ombudsman’s Office at approximately midday today.”

“She advised me that the Bell Canada International Inc Report to Telecom Australia dated 1 November 1993 and the addendum dated 10 November 1993 were flawed documents.”

QUESTION:

When Mr Pinnock addressed the Senate on 26th September ,1997, why didn’t he report one of his officers, Ms Di Mattina, told John Main the BCI reports were flawed in November 1995?

In Graham’s letter to Jenny Fox, Senator Schacht’s secretary, on 19th November, 1997, Graham notes:-

“Telstra’s and John Pinnock’s recent answers to The Senate in response to Questions on Notice do not give a true and fair representation of events. In a number of instances, answers are misleading and/or contained statements that contradict fact.”

“During Telstra’s and John Pinnock’s recent appearances before The Senate, they both provided The Senate with explanations/account of the Telstra arbitrations, which was not a true and fair representation of events. …”

“C.o.T members were invited to appear before The Senate on 24 June 1997. They were told The Senate would give C.o.T. members an opportunity to give the Senators their version of events that did or did not take place, plus be available to answer questions.” (GS CAV 331-B)

Relying on this promise, Graham and Alan paid their own travel and accommodation expenses, believing they would finally be able to expose the Telstra/TIO arbitration fiasco, once they arrived in Canberra, but as Graham further notes:

“Unfortunately, no C.o.T. member was given an opportunity to provide The Senate with the C.o.T. version of events that have or have not taken place or address the misleading and inaccurate statements made to The Senate by Telstra and Mr Pinnock in their opening statements or response to questions.

Had the Senate allowed access to the sort of information included in Graham Schorer and Alan Smith’s individual Chronologies, surely it would have had no alternative but to call for an official Senate Enquiry into why the TIO-administered arbitration process, initially facilitated by the Government Regulator, was administered and conducted by the arbitrator outside the auspices of Australia’s accepted and democratic process of law.  The Senate did investigate the five litmus COT cases FOI issues, but nothing else.  Was the Senate pressured not to further investigate why the process was not conducted according to the agreed process?

15th December, 1997:  Graham writes to John Wynack:-

“I wish to include other items on the Agenda under the following:-

  1. Bell Canada International

Is there any reason why Telstra:-

  1. has not provided the C.o.T.s with, and
  2. will not provide the C.o.T.s with

the working papers, testing data and other relevant information created before, during and after the testing of the Telstra network relating to the Telstra test calls performed in accordance with the Bell Canada International (BCI) requirements before BCI completed its November 1993 Report and its attached Appendix, or for the Working Party to consider if the information is relevant?” (GS CAV 332)

19th December 1997:  John Wynack writes to Graham:-

“Attached is the letter I sent to the Senate ERCA Committee re the Working Party’s activities.”

“I decided not to send the appendix which you sent to me late yesterday as I do not think it relevant to the purpose of the letter and I think that those issues should be the subject of debate in the Working Party in the first instance.” (GS CAV 333)

The attached letter Mr Wynack refers to is to Senator John Tierney.

29th December, 1997:  Dr Hughes writes to William Hunt on the letterhead of Blake Dawson Waldron.

“[D]ue to a perceived conflict of interest arising from my commencement at Blake Dawson Waldron, I shall forthwith cease to act as arbitrator…”

“I noted the following reservations and qualifications expressed by the parties

  • Mr Schorer has reservations as to whether the arbitration should continue;
  • Mr Benjamin has some reservations as to whether a mediation should be commenced;
  • Mr Schorer’s objects to the involvement of Mr Howell as technical expert (although this is an issue which has previously been addressed by me).”
    (GS CAV 324)

7th January, 1998:  John Wynack writes to Graham:-

“Attached is a copy of a letter Telstra sent to me on 5 January 1998, in which they suggest that I write to Bell Canada International asking that BCI provide to the Working Party certain documents relating to its reports which were published in 1993.”

“I should be grateful for your comments on Telstra’s suggestion. Should you decide to request me to write to BCI, please provide details of the documents you think BCI might hold which are covered by the Working Party’s Terms of Reference.” (GS CAV 335)

9th January, 1998:  Graham responds to Mr Wynack:-

“Ann Garms and Graham Schorer have discussed this matter and are both in agreement that it would be improper and would not be appropriate for the Chairman of the Working Party to write directly to Bell Canada International to request information.” (GS CAV 336)

MOST IMPORTANT

Of the five COT claimants selected for the Senate Working Party litmus-test process, Graham was the only one still running his business.  It was unreasonable to expect him to be the major player and spokesperson for the whole group, while preparing his own arbitration claim and operating his business.  It is clear from the numerous letters and other documents that Graham prepared, between 1997 and 1999, his arbitration and his business both suffered as he attended to Senate Working Party business.

Because scores of letters, exchanged between Graham, John Wynack, Telstra, individual Senators and the Senate Working Party, discuss all five of the COTs involved in the Senate Working Party process, it has been impossible to separate out references to Graham alone.  This correspondence is collated into a separate file, in date order, and is available for perusal.

Telstra’s Ms Chisholm and Mr Carless

14th January, 1998:  Telstra’s Lyn Chisholm and Peter Carless arrive at Alan’s residence (not the camp) and discuss the continuing fax lock-up problems and billing faults associated with the line remaining connected after sending a fax.  Alan provides fax journal printouts that do not match Telstra’s accounting for those calls.  They also discuss the just-disconnected 1800 billing service and the problems experienced during and after Alan’s arbitration.  Alan provides examples showing the Commonwealth Ombudsman’s Office officially provided Telstra with a document confirming the Ombudsman’s Office made 43 calls to Alan’s 1800 line, until February 1997, yet Telstra charged him for 96 calls from the office.

When AUSTEL’s Darren Kearney visited the camp, on 19th December 1995 he commented to Cathy that he had never seen such well-documented evidence.  “It’s unbelievable!” he said.  He subsequently took some of the arbitration billing claim documents that were not addressed during the arbitration back to Melbourne.  Alan believes Lyn Chisholm and Phil Carless had the same thought and he later followed Ms Chisholm’s suggestion and provided some of this evidence, via the TIO’s office, to Telstra.  Alan’s records confirm he continued to provide evidence of fax and phone problems, occurring throughout 1998 and 1999, to the TIO’s office and Mr Pinnock advised him these billing issues were still being investigated.  Other letters confirm Mr Pinnock was advising both Mr Hawker and the Minister’s office that these matters were still under consideration as late as February 1999.

Alan was never told, however, Telstra provided both the Minister for Communication’s Office and the TIO with copies of Lyn Chisholm’s file notes, confirming her opinion the billing faults he raised in his arbitration continued after his arbitration.  This would have given Alan good grounds to appeal the Arbitrator’s Award.

22nd January 1998:  Ms Toni Ahkin, Communication Minister’s Office, writes to Mr Pinnock:-

“Further to our recent phone conversation I am forwarding Telstra’s transcript of its meeting with Alan Smith, held on 14 January 1998 concerning his claim of overcharing on his 1800 number [sic].” (AS-CAV 239)

23rd January 1998:  Ms Toni Ahkin again writes to Mr Pinnock:-

I am forwarding copies of our proposed replies (that will be sent to the Minister’s office today) to David Hawker and Alan Smith in response to recent Min Rep’s concerning the arbitration process and overcharging on Mr Smith’s 1800 number.”

This fax suggests John Pinnock received a draft copy of the information regarding Alan’s arbitration and billing problems, for his comment, before the Minister or David Hawker received it. (AS-CAV 240)

4th February 1998:  Ted Benjamin writes to Mr Pinnock noting:-

“Telstra has examined the information forwarded by your office with regard to Mr Smith’s 1800 telephone service and is currently conducting an investigation into Mr Smith’s complaints.”

Attached to this letter is a three-page file note from Telstra’s Lyn Chisholm. This attached file note raises a number of questions:-

  1. Why were these file notes only provided to Ms Ahkin (and possibly the minister and Mr Pinnock), but not provided to Alan until December 2001? (and only then because of the then-new Privacy Policy Act)?
  2. Why wasn’t Alan told that Lyn Chisholm noted the billing faults he raised in his claim appeared to continue after his arbitration, when the Minister’s office and Mr Pinnock WERE told? This documented proof was what Alan needed to appeal his Award.
  3. When Lyn Chisholm alerted the Minister’s office and Mr Pinnock about the ongoing billing problems, why didn’t they initiate an enquiry?
  4. Ms Ahkin’s fax of 23rd January confirmed Mr Pinnock would see the Minister’s response to Alan’s complaints before David Hawker. Consider a Telstra FOI document, I00265, dated 16th October, 2002 and noting, regarding Darren Lewis, the new owner of Alan’s business:-

Hopefully, the TIO will become involved and that will take the Minister and Member [David Hawker MP] out of the equation.”(AS-CAV 242)

This document suggests Mr Pinnock has a lot to answer regarding to the problems that continued in Cape Bridgewater for so long.

COMMENTARY – Most important (1):

Regarding checking AUSTEL on dates: Mr Benjamin’s statement, “Telstra responded to investigations undertaken by Austel on 16 October 1995,” relates to correspondence from AUSTEL on 4th October, 1st December 1994 and 3rd October 1995.  It is a misleading and deceptive comment.

Please note: The 16th October 1995 response Ted Benjamin is referring to, is when Telstra addressed Alan’s arbitration 1800 billing issues outside the legal arbitration arena. (AS 213)

The letter of 4th October is exhibit AS-CAV 126.  Mr Benjamin wrote to Bruce Mathews of AUSTEL, on 11th November 1994 noting:-

“Each of the questions put by you in your letter 4 October, 1994 will be answered as part of Telecom’s defence to Mr Smith’s claims lodged under the Fast Track Arbitration Procedure.” (AS-CAV 127)

When he wrote his letter of 4th February 1998 Mr Benjamin knew Telstra waited until five months after Alan’s arbitration before addressing the same billing faults he previously told AUSTEL would be addressed under arbitration.

COMMENTARY – Most important (2):

There are far-reaching ramifications from AUSTEL allowing Telstra to address arbitration matters without allowing Alan his legal privilege of responding to this document, as he would have been able to if Telstra submitted this document in their arbitration defence.  Imagine the outcome if Alan was able to challenge the information contained in this 16th October 1995 document had it been submitted in the arbitration.

Page one, second paragraph letter dated 4th February, from Mr Benjamin to Mr Pinnock, notes:-

“Telstra will not be investigating complaints relating to the period before the Arbitration award that was handed down on 11th May, 1995 as Telstra considers that this matter was included in the arbitration and is finalised.”

How can Mr Benjamin make such statement when, on the next page he admits Telstra addressed the 4th October and 1st December 1994 matters on 16th October, 1995 – five months after 11th May, 1995 (the end of the arbitration)?

26th February 1998:  Wally Rothwell, Deputy TIO, writes to Alan advising his office has received Alan’s letters, of 17th & 18th February, regarding billing information withheld from Alan during his arbitration. Mr Rothwell notes:-

“the Ombudsman has asked me to seek the opinion of the Special Counsel to the TIO under the FTAP, as to whether the aspect raised in those letters are matters which were or should have been decided by the Arbitrator in the Award he made”. (AS-CAV 243)

In her letter of 2nd August 1996 to Mr Deeble of the TIO’s office, Sue Hodgkinson admitted, to Dr Hughes and the TIO’s office, billing documents WERE withheld from Dr Hughes and Alan, during his arbitration (AS 220).  Therefore, Dr Hughes could not address billing issues nor include them in his award.

Mr Pinnock’s statement is confusing, as he told Mr Hawker on 28th March 1996 the faults were addressed in Alan’s arbitration.  Again, Mr Pinnock concealed his knowledge of FHCA admitting, on 15th November 1995, DMR and Lane did not address the 008 billing problems nor diagnose the causes of the faults, but left the problems “open” (see the Technical Report).

27th February 1998:  John Pinnock writes to Graham and Ted Benjamin:-

“On 22 December 1997, Dr Hughes held a Directions Hearing in this matter.

Subsequently, Dr Hughes advised the parties, the Administrator, the Special Counsel and the Resource Unit that:

  • due to a perceived conflict of interest he had ceased to act as Arbitrator;
  • the arbitration should continue with the appointment of a new Arbitrator by the Administrator;
  • the Resource Unit should suspend further work pending directions from a new Arbitrator.

The parties then held discussions about the possibility of a mediated settlement. However, to date nothing concrete has emerged from these discussions.

Advice from the Special Counsel confirms

  • the Arbitration remain on foot;
  • as Administrator, I should appoint a new Arbitrator;
  • the Arbitrator must give directions about the release of the Preliminary Technical Evaluation Report prepared by Mr Paul Howell at the direction of Dr Hughes and now held by the Resource Unit.” (GS CAV 337)

Note:   Graham never received a copy of the Preliminary Technical Evaluation Report by Paul Howell.

Paul Howell’s Preliminary Report could only have been compiled from Telstra’s technical information because Graham was unable to submit his technical claim, as he had still not received ALL his relevant requested FOI information.  In Alan’s case, Paul Howell only assessed 23 claim documents from the 200 plus Alan submitted (see his report of 30th April 1995 page 37).  Perhaps Paul Howell was contemplating doing the same in Graham’s arbitration?

6th March 1998:  William Hunt’s file note contains his recollection of a discussion with Graham, concerning Graham’s belief he was forced under duress to sign the Arbitration Agreement.  Mr Hunt noted Graham as saying:-

“I rang Hughes and said ‘this is nonsense, you’re considering a proposition when it shouldn’t even be considered. We’re a commercial assessment process not arbitration’. He said ‘well that’s the way I’m playing it’ (or words to that effect).”
(GS CAV 338)

Mr Anthony Hodgson, Chair of Ferrier Hodgson misleads Mr Alan Cameron, Chair of the Australian Securities Commission

17th March 1998:  Even though Ferrier Hodgson’s John Rundell wrote to Mr Pinnock on 15th November 1995 advising him DMR and Lane had NOT addressed Alan Smith’s billing claim documents (AS 104), Mr Hodgson told Mr Cameron, “DMR and Lanes did address all of the claim documents submitted to the Arbitrator.” (AS-CAV 249)

18th March 1998:  These file notes were prepared by parties other than William Hunt and Graham, confirming the author was present during this Direction Hearing administered to appoint a new arbitrator to assess Graham’s claims. (GS CAV 339)

25th March 1998:  John Pinnock writes to Graham:-

I refer to the meeting at the TIO on Tuesday, 17 March 1998.

At the conclusion of this meeting I gave various directions in relation to the future conduct of your arbitration. I note that two of the dates by which certain actions were to be taken by the parties fall on a weekend. To prevent any misunderstanding, I now summarise my directions, providing revised dates where required:

By Friday, 15 May, 1998 the parties are to have provided one another and the TIO with detailed curriculum vitaes for nominations for the appointment of a new Arbitrator.(GS CAV 340)

On 26th March 1988 Peter Bartlett writes to John Pinnock:-

1.       Appointment of new Arbitrator

1.1       Clause 1 of the Fast Track Arbitration Procedure (‘FTAP’) states that:

‘This procedure provides arbitration pursuant to the Commercial Arbitration Act 1994 Victoria), as amended (“the Act”).

1.2       Clause 3 of the FTAP states that the Arbitration:

‘will be administered independently by the TIO…(“the Administrator”) and conducted by Dr Gordon Hughes…(“the Arbitrator”.)’. …

  1. Arbitration remains on foot

2.1       We advise that the Schorer and Telstra Arbitration remains on foot despite Dr Hughes ceasing to hold office. The Act provides that when an arbitrator ceases to act, either the court or person with the requisite power shall appoint a new arbitrator. Neither the Act nor the FTAP provide that the Arbitration shall cease if an Arbitrator ceases to hold office.” (GS CAV 341)

Since Mr Bartlett was the legal advisor to the arbitration and John Pinnock was the administrator of the process, why didn’t they apply to the Supreme Court of Victoria and ask for an enquiry into Telstra’s conduct during Graham’s arbitration?  The legal architects of the Victorian Commercial Arbitration Act in 1984 would not have envisaged a situation, like that surrounding the COT arbitrations, where the arbitrator and administrator allow:-

  1. the defendants to use documents they knew were flawed to support their defence;
  2. the official Arbitration Resource Unit to submit a half-completed report for the claimant’s response.

Surely the legal architects of the Arbitration Act would not have envisaged an arbitrator and administrator would allow the Australian Federal Police to run their own investigation into the same arbitration issues at the same time?  How could both investigations take place at the same time when the documents were supposed to be held under strict confidentiality by the arbitration process?

Graham’s 12 counselling sessions during January and March 1998 (GS CAV 327-B) had little effect in mitigating the damage done by the TIO, the TIO’s Legal Counsel and the arbitrator, as they allowed Telstra’s conduct to continue throughout most, if not all, of Graham’s arbitration.  In fact, the damage done to Graham is immeasurable.

21st April, 1998:  William Hunt’s file note discusses the following:-

“On the Thursday before Good Friday (9th April) I had made special arrangements with Mr Schorer to be available to go through the material that he had been working on for purposes of the ‘working party’ for the Senate representations he was wanting to make. …”

“On Friday morning 17th April in the middle of the morning he rang me and asked for urgent help to provide copies of documents that he had prepared for the submissions to the arbitrator Hughes.” (GS CAV 342) 

In regards to Mr Hunt’s file note, concerning Graham’s representations to the Senate Working Party, Graham submitted the following submissions to the working party while he was still corresponding to the other parties in the arbitration process:-

  1. 3rd December 1997 to 11th January 1998, 5 letters and 82 attachments;
  2. 12th January 1998 to 10th February 1998, 8 letters and 210 attachments;
  • 11th February 1998 to 16th March 1998, 6 letters and 98 attachments;
  1. 17th March 1998 to 5th April 1998, 3 letters and 28 attachments;
  2. 6th April 1998, to 22nd April 1998, 8 letters and 199 attachments.

22nd April, 1998:  John Pinnock writes to Dr Hughes:-

“The TIO proposes to appoint a new arbitrator as soon as possible. Until such an appointment is made, I consider that it would be appropriate for the TIO, as administrator, to hold for safe keeping all the documents and correspondence submitted to you, as well as your own files, in relation to this Arbitration.” (GS CAV 343)

4th May, 1998:  William Hunt faxes Graham a list of seven legal experts he considers a possible replacement for Dr Hughes.  The relevance of this letter is discussed below. (GS CAV 344)

15th May, 1998:  Lyn Chisholm, writes to Mr Pinnock noting:-

“I refer to your correspondence of 25 March, 1998 regarding the appointment of a new Arbitrator and Technical Resource Unit.”

“I attach for you copies of curriculum vitaes for Mr Geoff Nettle QC, Mr Julian Burnside QC and Mr Jonathan Mott for consideration.” (GS CAV 345)

18th May, 1998:  John Pinnock writes to Graham:

“I confirm that by Friday 15 May 1998, the parties were to have provided one another and the TIO with curriculum vitae for nominations for the appointment of a new Arbitrator. I have to date received no such documentation.”

“I request that you immediately provide me with your nominations for the appointment of a new Arbitrator.” (GS CAV 346)

IMPORTANT

Between the dates of 3rd December, 1997 to 6th April, 1998, Graham corresponded with the Senate Working Party at least 29 times and provided 617 attachments to his correspondence. Over approximately the same period Graham received the following correspondence from the Working Party:-

1st December, 1997 to 31st December, 1997:  3 letters and attachments;

2nd January, 1998 to 30th January, 1998:  12 letters and attachments;

2nd March, 1998 to 25th March, 1998:  29 letters and attachments;

4th February, 1998 to 28th February, 1998:  20 letters and attachments;

2nd April, 1998 to 30th April, 1998:  25 letters and attachments;

5th May, 1998 to 13th May, 1998:  7 letters and attachments.

During this time Graham attended four Working Party Oral Hearings, and here was John Pinnock on 18th May, 1998 stating:-

“I have to date received no such documentation.”

Graham did send this documentation.  Where is it?

The TIO and his Legal Counsel failed to grasp that they had a duty of care to see the process was conducted transparently and ethically.  The arbitrator, Dr Hughes, failed to understand that once he realised that the Arbitration Agreement he condemned as not credible, as it didn’t allow claimants their proper entitlements to access documents from Telstra or allow reasonable time for the preparation of technical reports, he should have refused to carry on as arbitrator.

Had Dr Hughes’ letter of 12th May, 1995 to Warwick Smith reached the TIO Board and Council, stating:-

“it is my view that if the process is to remain credible, it is necessary to contemplate a time frame for completion which is longer than presently contained in the Arbitration Agreement”

The Board and Counsel would have immediately aborted the process until a new agreement was drafted.

It is a national disgrace and a mark against the Australian legal system:  Dr Hughes, Warwick Smith and John Pinnock did not act legally, via the Supreme Court of Victoria, in compelling Telstra to abide by the original agreement reached between the parties before the COT cases signed for arbitration (that they would get the relevant documents they needed through the FOI process).  The Senate became involved but, due to their own work load, it could only partially assist some of the COT cases.

It is a sad indictment that even Senator Richard Alston, wouldn’t apply force on Telstra to supply the relevant documents needed by the Working Party, so Graham could complete his claim for a negotiated settlement and have his claim of between $4 – $12 million professionally valued.

19th May, 1998:  In William Hunt’s file note he writes:-

“On today’s date I had conversation with Schorer and with Lyn Chisholm and Harry Thorpe [Graham’s accountant] on the telephone at Golden’s office. The upshot was that Benjamin is still holding back on agreeing to the proposition for stage one of Chisholm’s proposals because of fear that the arbitration would be blamed and he would be criticized in Parliament.” (GS CAV 347-A)

21st May, 1998:  John Pinnock writes to David Hawker, Federal Member for Wannon noting:-

“As you may be aware, Mr Smith has written to this office on numerous occasions concerning aspects of his Arbitration which was completed in May 1995.”

“The vast majority of Mr Smith’s complaints seek, in effect, to review the conduct of the Arbitrator, or the Resource Unit or both, as well as the Arbitrator’s Award.

“Recently, Mr Smith has raised a question as to whether the Arbitrator’s Award dealt with his complaint that he had been overcharged on his 008 (now 1800) freecall service.  As this is a matter which I can properly consider, I have made preliminary enquiries of Telstra and have also sought advice from Mr Peter Bartlett, Special Counsel, Minter Ellison. (AS-CAV 245)

IMPORTANT

Graham’s business losses were supposed to be assessed by an arbitration process, conducted transparently, ethically and according to the Commercial Arbitration Act (Victoria).  Yet, it is quite clear that the defendants in the arbitration – Telstra – controlled the arbitration process, not the arbitrator (Dr Hughes) or the administrator (the TIO’s office).

On 26th September, 1997, just nine months earlier, Mr Pinnock explicitly told the Senate:-

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

On 25th May, 1998 Ted Benjamin blatantly refutes the value of Graham’s claim.  The same Ted Benjamin who was previously condemned by the Senate for his conflict of interest: as Telstra’s Arbitration Liaison Officer (as well as a sitting member of the TIO Council), while the TIO’s office administered the COT arbitrations.

On top of relevant information being altered and blanked out in legally requested FOI documents and the drip-feeding of FOI documents (usually not those specifically requested), in order to withhold vital FOI documents from the claimants, Telstra – not the arbitrator – was running the arbitration and deciding what it would pay the claimants.

25th May, 1998:  This facsimile document from William Hunt’s office to Graham’s office was intercepted via Telstra’s fax-screening process. This will be discussed shortly (GS CAV 348-B)

Exhibit GS CAV 349, entitled Graham Schorer & Alan Smith Fax Interception Exhibit 3, prepared for Allen Bowles, January 2007, is a four-page document describing information showing legal documents between William Hunt, Graham and Alan’s offices were intercepted via Telstra’s fax-screening process during 1998, without their written authorisation.

Graham’s May/June 1998 settlement offer is similar to Alan’s 11th December, 1992 settlement offer, with Telstra dictating what the claimant should receive during settlement and appearing to know the minimum a claimant will accept, in order to stay financially afloat.

Exhibit GS CAV 350 contains pages from Alan’s arbitration reply, dated 18th January, 1995 to Telstra’s arbitration defence.  On page 3, Alan states to Dr Hughes:-

“I feel it is an appropriate time to indicate to you my interpretation of events of 11 December 1992, my date of settlement. I recall that I arrived at 10.00 am and left for lunch at 12.10 pm I arrived back at 1.00 pm and finished at approximately 2.15 to 2.30 pm. I would make mention that I had no legal representation and was completely on my own. I recall using the telephone twice. The affair, the bizarre type of negotiations, started at bargain basement style: $20,000.00 was offered, then $40,000.00 and then Ms Pittard [Telstra’s commercial general manager] left the room. On her return, she showed me two letters of guarantee that my phone was now up to network standard.”

Towards the end of page 3, Alan notes:-

“I recall that Ms Pittard deliberately stated that Telecom had time on their side which in my opinion Ms Pittard was attempting to say that Telecom would stretch me financially in respect to getting to Court.”

On page 4 of Alan states:-

“Mr Arbitrator you would find that Telecom has been negligent in their dealings with my phone service and the actions of Ms Pittard in refusing me historical fault information prior to the settlement was not only negligent, misleading and deceptive, it was also unconscionable conduct. Mr Arbitrator you would also have to wonder about Ms Pittard’s statementthat I had unlimited use of a telephone and that she was aware that in her absence I made several telephone calls during the negotiation period. Was Ms Pittard that concerned about me that she had this telephone monitored?” (See also GS CAV 351)

26th May, 1998:  Graham writes to Telstra’s Graeme Ward, Group Director Regulatory and External Affairs, unaware Mr Ward was also a sitting member of the TIO Board during part of the early period of Graham’s arbitration.  Graham notes:-

“GOLDEN believe [sic] its immediate compensation, without incurring further time and costs, for matters referred to and covered by the arbitration process originally agreed to as a Fast Track Settlement Procedure in November 1993 should not be less than $7.183 million.”

“Notwithstanding the $4 million limit imposed late as set out above, and on the basis that Ms Chisholm was genuine in her discussions with me on 13th May last and was acting with the knowledge and authority of some of her superiors in Telstra and that in consequence Telstra was in good faith indicating its readiness to make substantial concessions if GOLDEN could likewise respond then GOLDEN is prepared to accept $3.8746 million in full settlement of all the matters referred to in the arbitration proceedings or covered by or arising there out up to the present time.” (GS CAV 352)

As shown in exhibit GS CAV 349, Telstra intercepted faxes of Graham’s legal advisor William Hunt during the time Telstra and Graham were under confidential negotiation to settle all outstanding issues the arbitration process failed to settle.  While Graham states:-

“Ms Chisholm was genuine… and acting with the knowledge and authority of… superiors in Telstra and… Telstra was in good faith indicating its readiness to make substantial concessions”,

It is blatantly clear Telstra was NOT acting in good faith at all, otherwise they would not have intercepted legal correspondence between client and lawyer.

28th May, 1998:  Graham writes to Ted Benjamin noting:-

“Telstra’s advise [sic] that the 1st of June 1998 is the earliest it can arrange for the inspection of GOLDEN’s accounts, documents, and discuss GOLDEN’s methodology used to calculate its claim, is acceptable to GOLDEN.” (GS CAV 353)

Ted Benjamin writes to Graham in response to his letter to Mr Ward of 26th May:

“In respect to the conditions you have placed at point 2), Telstra will need to seek advice from its professional legal and accounting advisors and therefore reserves its rights to disclose contents of documents to the above mentioned parties solely for the purpose of assessing Goldens [sic] claim. (GS CAV 354)

The fax imprint at the top of Ted Benjamin’s letter shows the letter was faxed back to Graham at 16:28, after Mr Hunt read the document.  Exhibit GS CAV 355 (a previous faxed document from Mr Hunt’s office, dated 4th May, 1998) shows William Hunt’s usual fax identification display:  May 04 ’98 61 11:55AM 61 3 96706598 – yet Ted Benjamin’s letter see (GS CAV 354) shows a very different fax identification font and style.

A more detailed explanation of these faxes issues are explained in more detail in exhibit GS CAV 349.

29th May, 1998:  Senator Alston writes David Hawker MP, noting:-

“I understand that Mr Smith gave Telstra an undertaking in January 1998 that he would provide Telstra with any documentation he had in his possession supporting his claims. The Telecommunications Industry Ombudsman has also advised that the matter is still under consideration.” (AS 246)

2nd June 1998: Lucy McCullagh, Minter Ellison, on behalf of Mr Pinnock writes to Graham:-

“We refer to the above meeting and regrettably advise that the tape recording made of this meeting is inaudible due to radio interference.”

“Fortunately, Lucy McCullagh took notes throughout the meeting. As a formal transcript is not available, we request that you peruse the enclosed draft minutes and provide us with your comments and amendments in order for us to prepare a final set of agreed minutes.” (GS CAV 356)

9th June, 1998:  Wally Rothwell, Deputy TIO, writes to Alan:-

“The purpose of my intended meeting with Mr Hughes is to clarify whether he did consider the 1800 issues during the arbitration. …

“The Ombudsman’s advice to me though, is that he is only prepared to discuss or investigate the 1800 matter of overcharging and the Gold Phone issue if that appears to be necessary, after I have looked into it initially.” (AS-CAV 247)

Question:

How could Dr Hughes have considered the technical issues when:

  • DMR and Lane state, at point 2.23 in their technical report, “the level of disruption to overall Cape Bridgewater Holiday Camp (CBHC)” was not clear and the “fault causes” remained undiagnosed and, therefore, they expected “these faults would remain ‘open’”.
  • There was no provision in Dr Hughes’s award for future damages that might arise out of the faults DMR and Lane admitted were not investigated; and
  • DMR and Lane admitted, in their official Arbitration Report, they only assessed approximately 11 per cent of the faults Alan registered.

10th June, 1998:  Graham writes to Neil Mounsher, Manager Telstra’s Customer Response Unit:-

“Point 1

“It is my understanding that Mr Crofts [Telstra’s accountant] considers the GOLDEN claim is worth between $.6M to $1.2Million. …

“In my opinion, the amounts being considered by Mr Peter Crofts are less than what was alleged to be on offer in 1996.

“Point 2

“GOLDEN’s basic losses – $8, 333,000.00

“When these losses are discounted by 53.85% = $3.846 Million.

“Point 

“Loss of jobs (see Schedule)                           $5,003,000.00

‘Loss of Goodwill (see Schedule                     $1,198,000.00

“Interest Foregoing (see Schedule)                 $2,132,000.00

“Total GOLDEN                                            $8,333,000.00

“Total – Integrated Transport Service $2,777,000.00

“TOTAL                                                        $11,110,000.00

“Legal costs (not being FOI)                               $60,000.00

“FOI                                                                  $431,000.00

“Court costs ($200,000.00 taxed)                        $80,000.00

“G Schorer – injury, loss of health, etc           $1,000,000.00 plus

“GRAND TOTAL                                         $12,681,000.00” (GS CAV 357)

17th June, 1998:  Graham’s five page letter to Mr Pinnock, does not agree with the Arbitration Meeting Draft Minutes dated 22nd May, 1998 prepared by Minter Ellison.

“The GOLDEN response has been made in consultation with Mr William Hunt in order to address all of the deficiencies within the Minter Ellison Draft.” (GS 358)

Wally Rothwell, Deputy TIO, again writes to Alan:-

“I understand that you are going through a hard time at the moment and, while I cannot guarantee a successful outcome of your 1800 complaint, hope that you can bear with this delay.” (AS-CAV 248)

18th June, 1998:  Ted Benjamin writes to John Pinnock:-

“I have received a letter dated 17 June 1998 from Mr Schorer attaching his proposed amendments to the minutes of the above meeting.”

“Telstra does not agree with Mr Schorer’s suggested amendments to paragraphs 20 and 21. It believes that the minutes should remain as is, because they more accurately reflect the meeting proceedings than do Mr Schorer’s proposed amendments.” (GS CAV 359)

18th June, 1998:  Telstra’s Neil Mounsher responds to Graham’s letter of 10th June 1998, noting:-

“Notwithstanding the above, Telstra is not prepared to let the arbitration process be unduly delayed and I have been instructed to seek the appointment of a new arbitrator. I enclose a copy of Telstra’s letter to the TIO on this matter.” (GS CAV 361)

19th June, 1998:  Graham writes to John Pinnock:

“At 11:44 am Friday, 19 June 1998, my office received a Telstra facsimile dated 18 June 1998, addressed to the TIO, containing comments on my response to the errors within and omissions from the Draft Minutes of 22nd May 1998 meeting. …”

“It is unfortunate for all present at the meeting that the Draft of the brief notes taken by Lucy McCullagh do not record all of the key words used and key statements made by each party at the meeting. Telstra’s assertion the Draft should remain as is cannot take place because it does not mirror the meeting’s procedures and content.”

“The only action the TIO is entitled to take is to produce a set of Minutes that includes reference to my correction of the errors and the omissions of the key words/key statements made by individual parties, plus record Telstra’s belief the Minutes should remain as is, on their stated grounds they believe the Draft ‘more accurately reflect the meeting proceedings than do Mr Schorer’s proposed amendments’.

Please advise what action the TIO intends to take.” (GS CAV 362)

Had Mr Pinnock admitted to himself and the ACA (formerly AUSTEL), both he and Dr Hughes failed the claimants, and had Mr Pinnock handed Graham’s claim back to the ACA where the whole process began, the ACA would have had to declare all four arbitrations and settlement processes null and void.

The ACA would have had the power to do this because AUSTEL originally appointed Mr Pinnock’s predecessor to administer the original, signed, commercial-settlement agreement and AUSTEL endorsed that agreement.  Had Mr Pinnock handed Graham’s arbitration claim back to the ACA, his claim would have been properly valued, on the merits of the evidence, but instead Graham was told to accept Telstra’s offer, regardless of whether or not it came anywhere near Graham’s claim amount.

Was Graham still in the Fast Track Arbitration Procedure under the control of the TIO or did the appointment of the Senate Working Party mean his claim was now under the control of the working party?  It certainly seems that, at least up to this point, Telstra was in control – not the TIO or the Senate Working Party.  By June 1998, Mr Pinnock already knew the arbitrator had no control over the arbitration.

Graham again writes to John Pinnock:-

“I agree with your previous statements made in words to the effect, the TIO does not have the power to appoint a new Arbitrator under circumstances where the parties do not agree on who should be appointed, again repeated at the 22 May 1998 meeting.”

“After re-reading the previous correspondence between AUSTEL, TIO and myself, and my other notes on the same matter, it is quite clear the TIO’s only option is to refer this matter back to the ACA (formerly AUSTEL).” (GS CAV 363)

Please note: Because of Graham’s ill health during May and June 1998, much of the Senate Working Party correspondence was administered by other COT members, although Graham did receive 14 letters in May and June 1998, while he was trying to find a suitable arbitrator that was acceptable to all parties.

Ted Benjamin also writes to John Pinnock:-

“I note that, despite recent efforts, the parties have been unable to agree to date upon an Arbitrator to replace Dr Gordon Hughes.”

“The Arbitration has now been in limbo for some months as a result, a situation which clearly cannot be allowed to continue indefinitely. (GS CAV 364)

IMPORTANT COMMENTARY

Graham was still seeing a counsellor four times a month, to help him cope with this TIO and Telstra fiasco.  Did John Pinnock, the TIO Board and the TIO Council, expect anyone to believe they were looking after Graham’s welfare as a claimant in an arbitration supposedly being conducted under the Commercial Arbitration Act (Victoria)?

It was not revealed, in the Alan Smith CAV Chronology or the Graham Schorer Chronology part 1, that, during Graham’s arbitration, on a number of occasions, friends found Graham on his office floor crawled up into a foetal position and shaking.  Is it any wonder Graham is a shell of the man he used to be before he took part in the alleged TIO-administered transparent arbitration process?

CHAPTER SEVEN

FAXING PROBLEMS CONTINUE

29th June 1998:  William Hunt writes to Alan about lost faxes:-

“There are enclosed six sheets of paper which are the material received by fax from you this morning. I have numbered each of the pages at the bottom in ink and signed my name on the two blank pages.”

“There is a seventh separate page which is read-out from our fax machine as at quarter to three this afternoon.” (AS-CAV 249 and AS-CAV 250)

COMMENTARY

Exhibit AS-CAV 250 includes Telstra FOI document K01489, dated 29th October 1993:

“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. A half A4 page being transmitted from this machine resulted in a blank piece of paper 4cm long, the relevant protocol printout in sample #2 shows that the machine sent the correct protocol at the end of the page. Even if the page was sent upside down the time and date and company name should have still appeared on the top of the page, it wasn’t.

Please consider the following examples:

  • Exhibit AS 253 dated 24th July, 1998 confirms Chrissy Hawker recorded her experience of receiving similar half pages, including blank pages while working for Alan during 1998.
  • Exhibit AS 254 dated 24th July, 1998 confirms Ronda Fienberg likewise recorded similar experiences when receiving faxes from Alan’s office between August 1994 and July 1998.
  • Exhibit AS 255 dated 25th July, 1998 confirms Robert Palmer recorded experiencing similar transmission problems (over a two year period) when receiving faxes from Alan’s office.
  • Exhibit AS 270 dated 30th January, 2000 confirms Margaret Van Run, recorded experiencing fax problems while working over the Christmas period of 1999.
  • Exhibit AS 250 dated 21st January, 2003 confirms Darren and Jenny Lewis (the new owners of Alan’s business) wrote to David Hawker MP concerning their experiences when sending faxes.
  • Exhibit AS 250 dated 23rd January, 2003 confirms Mr and Mrs Lewis raised their faxing complaints with John Pinnock, TIO.
  • Exhibit AS 250 dated 29th January, 2003 from Senator Alston’s office to David Hawker MP, states:-

“Thank you for your representations of 20 January 2003 on behalf of Mr Darren Lewis concerning Telstra services.

The issues raised in your letter are receiving attention and the Minister will respond to you shortly.

Graham and Alan believe their telephone calls and facsimiles were intercepted during their respective arbitrations, and during the Senate Working Party investigations. Consider the fax identification footprints in (GS CAV 365).

Exhibit GS CAV 367 is a four-page document detailing the information on file showing someone with access to Telstra’s network was intercepting Telstra-related correspondence leaving Alan Smith’s office and his residence, via his facsimile service, from 1998 to 2002

30th June, 1998:  John Pinnock writes to Graham:

“It is unfortunate that the tape recording of our meeting on 22 May 1998 failed. I do not agree that the draft of the notes of the meeting do not record all key words used. However, that is a matter of opinion.”

“While I believe that the notes fully record the essential points of the meeting, it seems to me that the parties will have to add their own addenda to the minutes in respect of any aspect with which they disagree. …”

“I do not propose to refer this matter back to the Australian Communications Authority. …”

“While I assume that the document entitled ‘Telstra Corporation – Fast Track Proposed Rules of Arbitration’ which you provided to Mr Bartlett on 22 May 1998 is a copy of the document provided to Warwick Smith on or before 12 January 1994, I cannot be certain it is. (GS CAV)

COMMENTARY

Exhibit GS 144, in Graham’s Chronology part 1, is a letter dated 18th January, 1994 from Dr Hughes, to Graham:-

“I have been provided by the TIO with a document entitled ‘Telstra Corporation Limited – “Fast Track” Proposed Rules of Arbitration’. I have not yet formed a view as to the suitability of this proposal.”

Exhibit GS CAV 343  contains a letter from John Pinnock to Dr Hughes, dated 22nd April, 1998 which notes:-

“The TIO proposes to appoint a new arbitrator as soon as possible. Until such an appointment is made. [sic] I consider that it would be appropriate for the TIO, as administrator, to hold for safe keeping all documents and correspondence submitted to you, as well as your own files, in relation to this Arbitration

Question 1

If Mr Pinnock couldn’t be certain the document Graham provided to Mr Bartlett was a mirrored copy of Telstra’s ‘Fast Track’ Proposed Rules of Arbitration, why didn’t he check the arbitration files supplied back to him by Dr Hughes?

Any forensic document researcher would agree if comparing both the final Arbitration Agreement we signed and the agreement Telstra sent to the TIO, that the Arbitration Agreement used in the arbitration process was based on Telstra’s rules and not on an independent agreement.

Exhibit GS 318-b, in Graham’s Chronology part 1, is a letter from John Pinnock to Ms Pauline Moore, Secretary Senate Environment, Recreation, Communications, and the Arts Legislation Committee, noting:-

“Yes, I have refused to provide COT members with a copy of Telstra’s Proposed Rules of Arbitration.  A copy of this document was not provided because it was of historical interest only, and the COT members did not advance any arguments as to why it was relevant to their arbitration. A copy is provided for the information of the committee.”

Question 2

Does this suggest the copy of Telstra’s Proposed Rules of Arbitration, provided by Mr Pinnock to the Senate, might not be a true and correct copy of the one supplied to the Arbitrator 18th January, 1994? 

8th July 1998:  Graham discusses his previous phone call, of Monday, 6 July 1998, with Telstra’s Neil Mounsher:-

“I am confirming in writing I did not terminate the Telstra-GOLDEN 3-Part Agreement which Telstra initiated, nor did I imply I was going to terminate the agreement. …”

“The outcome of the proposed meeting between Telstra and GOLDEN, tentatively scheduled to take place on Friday, 19 July 1998, may result in Telstra re-committing to participate in Part 2 and Part 3 of the agreement between the parties.”

“I await advice as to whether the proposed Friday, 10 July 1998 meeting will take place.” (GS CAV 369)

Please note

During July and August 1998, Graham was heavily involved in preparing a Confidentiality Agreement for the Senate Working Party, so commercial sensitive Telstra documents uncovered by Graham, Ann Garms, Ralph Bova, Ross Plowman and Anthony Honner would remain confidential to their claims.  This agreement was seen to be fair, considering the five COT cases were only the litmus tests for the remaining 16 and the other claimants would have similar opportunities for accessing their required previous-non supplied FOI documents

However, at the disgust of many, including the Commonwealth Ombudsman’s Office, Senator Richard Alston, Minister for Communications, Information, Technology and the Arts, went back on the Schedule B list agreed terms of reference.  The remaining 16 were never afforded the opportunity to view at least some of the relevant information previously withheld from them by Telstra and which might provide them the opportunity to successfully win an appeal process.

Graham was saddened by Senator Alston’s about-turn decision: after all, the whole COT group had suffered at the hands of Telstra and their sympathisers.

16th July, 1998:  Wally Rothwell writes to Alan:- 

“I further outlined your concerns about fax pages which you considered did not reach the arbitrator, during your arbitration, and the mysterious blank pages.  …”

“With regard to the 1800 and Gold Phone matters, I have received information from Mr Bartlett and have asked Dr Hughes about his consideration of the matters during arbitration.” (AS-CAV 251)

Alan has never seen this “received information from Mr Bartlett”.

22nd July, 1998:  Telstra’s John Armstrong writes to Graham.  While the Senate Working Party process has been kept separate from this Chronology, it is important this letter is highlighted, as the content is relevant to Alan Smith’s arbitration process as well.

Under the heading, National Network Management Centre Logbooks, Mr Armstrong states:-

“Also provided in addition to the above, is an example of a National Network Management Centre (NMC) Logbook. The NMC is responsible for monitoring traffic levels and blockages within the Telstra network and taking action to limit or redirect traffic as necessary. … The logbooks listed in the attached table are the record of events controlled or monitored by the NMC from 20 July 1984 to 4 June 1998.”
(GS CAV 370)

24th July, 1998:  Alan writes to Wally Rothwell re lost faxes during his arbitration: 

“Another chronological list of faxes which have been lost in transit to Dr Hughes is enclosed. …” 

“The pieces of the puzzle are beginning to fit together now that it appears that neither the Arbitrator or the resource team actually saw all the claim documents I believed I had submitted and which I intended Telstra to address in their defence of my claims.” (AS-CAV 252)

25th August, 1998:  Mr Pinnock writes to Alan noting:-

“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. (AS-CAV 257)

1st September, 1998:  Graham’s letter to Mr Pinnock again criticises the TIO and Peter Bartlett’s office for their failing to correctly address the misleading and deceptive conduct of Graham and Alan knowingly being misinformed by the TIO and Dr Hughes, concerning the Fast Track Arbitration Rules being drafted by Minter Ellison, when Telstra’s own lawyers drafted the agreement.

The evidence, shown in Graham’s Chronology part 1, confirms someone with access to Minter Ellison’s office altered the Arbitration Agreement, without notifying Graham or Alan, after copies of the agreement were provided to their legal advisors, William Hunt and Alan Goldberg, for advice. (See Graham Schorer Exhibit 2, Relevant Information file.)

16th October, 1998:  The Hon David Hawker, MP, writes to Mr Pinnock:-

“I would appreciate your assistance in resolving Mr Smith’s complaint.

I look forward to receiving your advice in due course.” (AS-CAV 258)

Exhibit AS-CAV 262 confirms Mr Pinnock is still investigating the billing issues in February 1999, even though he knew these issues were not addressed in Alan’s arbitration.

19th October, 1998:  Ted Benjamin submits his sworn Affidavit to the Court (on behalf of Telstra) in the Matter of an Arbitration under the Commercial Arbitration Act, between Telstra Corporation Limited and Graham Schorer

It is important to point out some discrepancies in this affidavit i.e.

Point 4:  “The FTAP was prepared after Dr Hughes advised the parties that his functions could most be effectively be discharged if he was appointed as Arbitrator rather than assessor,” is incorrect because:-

  • Dr Hughes did not make that statement until the FTAP meeting attended by Graham on 17th February, 1994 see Graham’s Chronology part 1 exhibit (GS 165); and
  • Telstra faxed Warwick Smith a copy of their Telstra Proposed Rules of Arbitration on the 10th January, 1994

Point 20:  “On 12 May 1995 the Arbitrator indicated to the Claimants that he had not heard from them for some time and that he would be convening a directions hearing in order to determine whether the parties wished the arbitration to proceed,” is misleading as is the letter itself because:

  • on 12th May, 1995 Dr Hughes also wrote to Warwick Smith without copying the same to Graham noting: “In summary, it is my view that if the process is to remain credible, it is necessary to contemplate a time frame for completion which is longer than presently contained in the Arbitration Agreement.” (GS 217)

Why didn’t Mr Benjamin state in his Affidavit that the Arbitration Agreement was not credible, or wasn’t he aware?

If Mr Benjamin wasn’t aware, as a sitting TIO Council member, does this mean the TIO Board and Council are also unaware their officers were administering the COT arbitrations on an agreement that Dr Hughes damned “not credible” on 12th May, 1995?  Did Mr Pinnock keep Dr Hughes’ letter to himself?

Point 42:  “On 14 August 1997 the Arbitrator made directions in relation to the involvement of Mr Paul Howell of DMR Group Australia Pty Ltd, in accordance with Clause 8.1 of the FTAP.”

  • This statement is incorrect as Paul Howell was commissioned in Canada, during March 1995, from DMR Group Canada Pty Ltd.
  • DMR Group Australia Pty Ltd was sacked from the FTAP, in February/March 1995, because it had a conflict of interest.

Point 48: “On 22 May 1998, I attended a further meeting at the TIO. Mr Schorer and his solicitor were also present. Again, the purpose of the meeting was to attempt to progress the arbitration by appointing a new arbitrator.”

Remember, the 22nd May, 1998 Minutes referred to were originally compiled from handwritten notes prepared by Ms Lucy McCullagh of Minter Ellison.  Graham was advised Minter Ellison’s tape-recording equipment apparently failed to record the meeting.  John Pinnock and Ted Benjamin accepted these Minutes as a true and correct account of the meeting and Graham’s interpretation of events were irrelevant. (GS 358)

IMPORTANT COMMENTARY

Alan Smith has maintained, during, and for years after his arbitration, the problems and faults raised in his claim continued until he and his partner Cathy were forced to sell their business, because Telstra and the TIO would not investigate their valid claims.

The importance of exhibit GS CAV 370 is that, with the attachments, it shows that, if the Senate had not been involved in the COT FOI investigation, Graham would not have received this relevant log-book information.

Exhibit GS CAV 371 is John Wynack’s letter, dated 11th November, 1994 to Telstra’s CEO Frank Blount, noting:-

“At the request of Ms Geary, I am notifying you of the details of the complaints made to the Ombudsman by Alan Smith.”

On page 2, it is noted for the date 7/11/94:-

“Telecom unreasonably refused to provide the ‘Portland/Cape Bridgewater Log Book associated with the RCM at Cape Bridgewater’ for the period 2 June 1993 to 6 March 1994.”

Alan Smith wanted this logbook to show Dr Hughes, Arbitrator, that the Cape Bridgewater exchange trunked off the Portland AXE, was still suffering with phone problems, even though the Bell Canada International (BCI) tests stated otherwise.

Exhibit GS CAV 372 is a sworn Statement by Des Direen, an ex-Telstra Protective Services Officer, dated 10th August, 2006 confirming at points 20, 21 and 22 that:-

“20. …I had cause to travel to Portland in western Victoria in relation to a complaint involving suspected illegal interference to telephone lines at the Portland telephone exchange.” 

“21. As part of my investigation, I first attended at the exchange to speak to staff and check the exchange log book which was a record of all visitors to the exchange and a record of work conducted by the technical officers.”

“22. When I attended at the exchange, I found that the log book was missing and could not be located. I was informed at the time by the local staff that a customer from the Cape Bridgewater area south of Portland was also complaining about his phone service and that the log book could have been removed as part of that investigation.”

Alan Smith has never been provided the Portland/Cape Bridgewater Log Book.  By Telstra withholding this vital information from Alan, he was stopped from using up-to-date documentation that would assist him to show the arbitrator the problems and faults were still ongoing

Arbitration v Senate Working Party, which way should Graham go

From August to the end of 1998, John Pinnock was still hiding the fact that the TIO-administered arbitrations failed to provide most of the claimants the information to support the true extent of their phone problems and faults.  During the same period, very little was being achieved through the TIO Office in regards to Graham’s arbitration matters.  Graham was now working extensively with Telstra via the Senate Working Party (hence very little correspondence worth noting).

COMMENT 1 

Exhibits GS CAV 375 and GS CAV 376 confirm Paul Howell, was from DMR (Canada) and Warwick Smith was using DMR Group (Canada) in September 1994.

  • Exhibit GS CAV 376 is a letter from Warwick Smith to Alan Smith, dated 9th March,1995:-

“As the executive of DMR Group Australia Pty Ltd is unavailable to provide locally based technical assistance, I propose to utilise the services of Mr David Read and Mr Chris Soutter of Lane Telecommunications (based in Adelaide) who are suitable qualified and independent.”

“Messrs Read and Souter will assist Mr Paul Howell of DMR Group Inc (Canada)…”

  • Exhibit GS CAV 377 is a letter from Warwick Smith to Mr and Mrs Main, dated 27th September, 1994:-

“I am yet to formally appoint an Arbitrator to be involved to hear any cases… However, already established is a Resource Unit made up of a representative of the senior accounting firm Ferrier Hodgson and DMR Group, who are Canadian communication experts.”

COMMENT 2

In 2001, under the TIO Privacy Policy Act, Alan received a document dated 18th April, 1995 from John Rundell of FHCA to Warwick Smith.  This document advised:-

“Paul Howell, Director of DMR Inc Canada arrived in Australia on 13 April 1995 and worked over the Easter Holiday period, particularly on the Smith claim. Any technical report prepared in draft by Lanes will be signed off and appear on the letterhead of DMR Inc.” (AS-CAV 160) 

The following points explain the relevance of this letter:

  • DMR (Australia) signed an agreement with TIO Warwick Smith, in April 1994, (as stated in the Arbitration Agreement) to act as the independent Arbitration Technical Resource Unit.
  • On March 9 1995, Warwick Smith advised Alan DMR Australia was unavailable to provide locally based technical assistance. Paul Howell of DMR (Canada) was to be appointed as the principal technical advisor to the resource unit and Lane (based in Adelaide) would assist Mr Howell:-“Could you please confirm with me in writing that you have no objection to this appointment so the matter can proceed forthwith”. (GS CAV 376)
  • In his letter, Mr Rundell confirms he was prepared to transfer Lane’s technical findings onto the letterhead of DMR (Canada) as a guise that Paul Howell prepared the final Report. (AS-CAV 160)
  • Document AS-CAV 162 confirms Paul Howell, on 21st March, 1995 only received 3 of Alan’s 22 submitted claim documents, along with Telstra’s defence.
  • Document AS-CAV 163 confirms FHCA advised Mr Howell, on 5th April, 1995 that David Read (of Lane) would have his draft Technical Report prepared by 7th April, 1995.
  • Dr Hughes’ draft Award, on page 3 at (i) and (j), states:-

“pursuant to paragraph 8 of the arbitration agreement, I had power to require a ‘Resource Unit’, comprising Ferrier Hodgson, Charted Accountants, and DMR Group Australia Pty Ltd, to conduct such inquiries or research as I saw fit;”

“On 21 February 1995, by the time I was satisfied that the submission of all relevant material by both parties was complete, I instructed Ferrier Hodgson (and, through them DMR) to conduct certain inquiries on my behalf;” (AS-CAV 165)

  • Dr Hughes’ final Award states, on pages 3 and 4 at (i) and (j):- 

“pursuant to paragraph 8 of the arbitration agreement, I had power to require a ‘Resource Unit’ comprising Ferrier Hodgson, Charted Accountants, and DMR Group Australia Pty Ltd, to conduct such inquiries or research as I saw fit. By consent of the parties, the role of DMR Group Australia Pty Ltd was subsequently performed jointly by DMR Group Inc and Lane Telecommunications Pty Ltd;”

“On 21 February 1995, by which time I was satisfied that the submission of all relevant material by both parties was complete, I instructed the Resource Unit to conduct certain inquiries on my behalf;” (AS-CAV 165)

Summary of Documents (AS-CAV 160 to 165):-:

  1. Paul Howell didn’t receive any of the technical claim and defence material until 21st March 1995.
  1. Paul Howell and David Read weren’t officially appointed by the TIO until 9th March 1995 and/or officially accepted by Letter of Consent.

All the technical findings, in both the draft and final Awards (except for the removal of the alleged liquid-spillage segment), are the same.  However, in the draft Award, the author states he called on DMR Group Australia Pty Ltd by 21st February, 1995 to conduct inquiries.  As DMR (Canada) was not appointed until 9th March, 1995, and didn’t receive the Technical Claim and Defence Material until 21st March, 1995 (see AS 162), how could the technical findings in the final Award have been prepared by DMR (Canada) when the technical findings in both awards are the same?

QUESTIONS: 

  1. Is there a link between DMR Group (Australia), Lane Telecommunications and Dr Hughes, all having a conflict of interest (after their appointments), to Graham’s arbitration?
  2. Why did it take Warwick Smith from September 1994 to March 1995 to inform Graham and Alan that DMR (Canada) would be appointed as their Technical Resource Unit?

Exhibit EJB1 is the Fast Track Arbitration Procedure (agreement) signed by Graham 21st April, 1994.  However, as has now been proven, this agreement was not the one Dr Hughes’ office faxed to Graham’s legal advisors, William Hunt and Alan Goldberg, for their attention and advice.  There is no correspondence showing Graham or Alan were notified of these alterations before they signed the agreement.

While not yet substantiated, it appears Telstra knew of these alterations either before, or during, Graham and Alan’s arbitrations.

In the Supreme Court of Victoria Court of Appeal, a judgement was handed down by Judges P Winneke, P Phillips and J Kenny, on 30th April, 1998 which notes {p4}:-

CATCHWORDS:

Unilateral mistake – Claim for rectification – Deletion of material provision – Solicitors acting – Mistake by solicitor – Actual knowledge of other party – Failure of other party to bring mistake to mistaken party’s attention [our emphasis] – Assessment of witnesses by trial judge – whether findings of trial judge justified order for rectification. …

“Of course the respondents faced considerable difficulties in their claim for rectification, not the least being that clause 10.9 had been deleted by their own solicitors; it was not something sought or even suggested by the appellants. Moreover, there were subsequent negotiations over clause 2(1)(f) which might have been expected to draw the respondents’ attention to the mistake over clause 10.9, if such it was; secondly, the relevant board, acting for the respondents, authorised the execution of the shareholders’ agreement and indeed the other agreements, in the form in which they were finally settled by the respondents’ solicitors and those solicitors were certainly not unaware of the deletion of clause 10.9…”

“In a careful and comprehensive judgement, the trial judge examined the evidence, such as it was, and resolved all of the issues of fact were necessarily involved in the respondents’ suit, Thus he found that the inclusion of a right of pre-emption such as that accorded by clause 10.9 was of fundamental importance to the agreement.”
(GS CAV 379 t)

COMMENT:

Mr Benjamin’s Affidavit, for Justice Gillard, does not include any of the following:-

  1. A Commonwealth Ombudsman’s investigation, which showed Telstra’s administration of Graham’s FOI releases, during Graham’s arbitration, was defective.
  2. A Senate enquiry, on 6th and 9th July 1998 which:-
    1. examined Telstra’s defective supply of relevant information to Graham during his arbitration, and
    2. asked why Telstra was still not providing the documents the Senate Working Party requested.
  3. The Senate’s expressed anger that, as late as July 1998, Telstra showed disdain to the arbitration process by not supplying the relevant documents needed by the claimants.
  4. The Senate’s criticism that Telstra was also showing disdain to the Parliament.
  5. Mr Benjamin’s attendance as a witness at the Senate enquiry at point 2.

QUESTIONS: 

  1. Even if Justice Gillard appointed a new arbitrator, what chance did Graham have of ever receiving the relevant documents needed to support his claim when, as late as July 1998, the Australian Parliament couldn’t get Telstra to supply the most relevant documents to the claimants?
  2. Why didn’t Ted Benjamin include, in his Affidavit, the truth of the situation in July 1998, when Senator Schacht attacked a number of statements made by Ted Benjamin?

{P 31 & 32} – Senator Schacht attacks a number of statements made by Ted Benjamin:

Senator SCHACHT One of the 16 complained they were starved into submission, but that is another point:

Senator BOSWELL “…To make a statement like that –

CHAIR Senator Boswell.

Senator BOSWELL“…No, I am sorry, Madam Chair, but this is just outrageous. You are abusing the privileges of this parliament when you make those statements. You drove them out. You drove them into submission and you drove them into starvation. How you can have the audacity to come before this parliament and blatantly say that? You are really a disgrace, the whole lot of you.” 

CHAIRSenator Boswell, will you withdraw that?”

Senator BOSWELL “…Madam, I withdraw that, but I do say this: this has got a unity ticket going right through this parliament. This has united every person in this parliament – something that no – one else has ever had the ability to do – and Telstra have done it magnificently. They have got the Labor Party, they have got the National Party, they have got the Liberal Party, they have got the Democrats and they have got the Greens – all united in a singular distrust of Telstra. You have achieved a miracle.”

CHAIR“…I just remind you, Senator Eggleston, that it is an in camera hearing of the committee. I would view seriously any information going out of this committee room – so seriously that I would pursue it to the end. (See Senate Hansard Reports in Graham’s Relevant Information file, exhibit 15, pages 31 and 32)

Please note: Graham asked Justice Gillard if the Court could wait until after the Senate investigation before appointing a new arbitrator, but Justice Gillard refused to wait and appointed an arbitrator, unaware of the existence of the Senate Hansard in-camera records.  At this point, Graham and the other claimants had long given up on any hope of having their claims independently assessed and this is why Graham was looking seriously at the minimal financial lifeline Telstra was then offering.

4th November 1998:  Wally Rothwell writes to Mr Peter Bartlett, noting:-

“In light of Dr Hughes’ response, the Ombudsman has asked to seek your advice as to whether you would therefore be of the opinion that both matters were, for all intents and purposes, addressed in the arbitration.” (AS-CAV 259)

Remember, on 28th April 1995 Peter Bartlett drafted a letter to TIO Warwick Smith (see separate list re W. Smith CAV Target), pressuring Warwick Smith to write to Dr Hughes, before he left for a two-week trip to Greece, noting that:-

“It would be unacceptable to contemplate the delivery of the Award being delayed until after your return.”

Further, on 30th April 1995 DMR and Lane presented the draft of their Arbitration Technical Report to Dr Hughes, noting the report was still incomplete and stating they needed extra weeks to investigate the billing faults raised in Alan’s claim.  The extra weeks needed to complete this report were denied, even though Alan’s billing claim documents confirmed the phone problems were still occurring. The draft of the Technical Report was then altered and Dr Hughes presented it as the final and complete Report, still dated 30th April 1995.

5th November 1998:  Graham writes to Mr Neil Jepson (now deceased) Barrister and Solicitor, Major Fraud Group, Victoria Police:-

“In following up on the outcome of my Monday, 12 October 1998 interview… The supply of these documents may assist the Victorian Police Major Fraud Group’s investigation.”

“Enclosed is a Draft copy of letters I will be sending to other C.o.T. members. As you will note, the letter seeks supply of Telstra and others’ documents in their possession, which should be included in these files I am providing to you.” (GS CAV 380)

Exhibit GS CAV 381 is a sworn Statement by an ex-police officer, Robert Hynninen.  Although dated 8th August 2006 is most relevant to the Major Fraud Group investigation.  Mr Hynninen  was also in attendance when Des Direen made a similar statement (see the exhibit (GS CAV 372), regarding the parties associated with the COT case – Major Fraud Group investigations being under surveillance, including the interception of their telephone conversations.

11th November 1998:  Ms Southwell, of the Communications Minister’s office, writes to Mr Pinnock:-

“Could you also please advise on a likely time-frame for finalising Mr Smith’s claim of overcharging on his 1800 number.

“A meeting has been proposed between Mr Smith and Senator Ian Campbell and your response will form the basis for the proposed meeting.” (AS-CAV 260)

29th January 1999:  Mr Dunstone, of the Communications Minister’s Office, writes to Mr Pinnock:-

“I would be grateful if you could advise the status of the TIO’s investigation into Mr Smith’s claim of overcharging – I understand this matter has been before the TIO for some years.” (AS-CAV 261)

10th February 1999: Mr Pinnock writes to The Hon David Hawker, MP, in response to a letter from Mr Hawker on 11th December 1998:-

“The only matter outstanding which the TIO is considering is whether the Arbitrator considered Mr Smith’s claim for overcharging on his then 008 service when he made his Award.” (AS-CAV 262)

This confirms Mr Pinnock still hadn’t told Mr Hawker the TIO-appointed Arbitration Resource Unit admitted NONE of Alan’s billing claim documents was ever investigated and/or addressed during his arbitration.  It also confirms that, although Mr Pinnock appears to have received advice from both Dr Hughes and Peter Bartlett on these very same issues, at this time he was still considering the matters.

COMMENTARY:

John Rundell’s letter, dated 15th November 1995 to Mr Pinnock supports the Resource Unit’s admission that the billing faults were not addressed.  Mr Rundell states the arbitration did not allow enough time for a full investigation.  This letter also states, incorrectly, that Alan did not raise the billing faults until April 1995, while transcripts from Alan’s Oral Hearing (AS 105) and letters between AUSTEL and Telstra (AS-CAV 126) confirm otherwise.

Dr Hughes referred to the lack of time allowed in the Arbitration Agreement in his letter to Warwick Smith, dated 12th May:-

“the time frames set in the original Arbitration Agreement were, with the benefit of hindsight, optimistic;”

“in particular, we did not allow sufficient time in the Arbitration Agreement for inevitable delays associated with the production of documents, obtaining further particulars and the preparation of Technical reports;” (AS-CAV 180)

This was the same poor time frame Dr Hughes and Minter Ellison supposedly drafted into the Arbitration Agreement in the first place.  The same inadequate timeframe stopped DMR and Lane from getting the extra weeks they needed to properly investigate the continuing billing problems so that Telstra could address them before Dr Hughes handed down his award.  Poor presentation of Alan’s claim was not what caused his business to continue to suffer after the arbitration: it was the bad decisions of Dr Hughes and Minter Ellison when they drafted the agreement and the “forces at work” that were “collectively beyond the reasonable control” of the TIO-appointed Resource Unit.

10th February 1999:  Mr Pinnock misleads, again, regarding Alan’s continuing billing complaints when he replies to Mr Mark Dunstone.

“Mr Smith, however, raised issues in 1998 which I considered merited investigation, viz. whether the Arbitrator had, in his Award, dealt with Mr Smith’s claim that he had been overcharged on his 008 (now 1800) telephone service as well as complaints concerning his fax line. The TIO has carried out some preliminary, if protracted, investigation of the former claim…” (AS-CAV 263) 

Mr Pinnock discussed these same billing issues with AUSTEL, on 3rd October 1995 and with FHCA’s John Rundell, on 15th November 1995.  Why did Mr Pinnock state Alan only raised the billing issues in 1998?

16th February 1999:  The late Neil Jepson writes to Julian Burnside QC:-

“I have been requested to write to you in your capacity as the arbitrator in the dispute between Telstra and Mr Graham Schorer.”

“The Victorian Police Major Fraud Group has received a number of complaints from persons, collectively known as the COT people, including a complaint from Mr Schorer. These complaints relate to the conduct of Telstra in connection with its defence of the claims the subject of the arbitration.”

“These complaints are currently being assessed to ascertain if any criminal offences have been committed and if it is established that such offences have been committed the complaints will be fully investigated with a view of bringing criminal prosecutions.” (GS CAV 382)

On page 2 of a Report entitled Facsimile Interception, Alan notes:-

“There were two occasions, during the Major Fraud Group’s investigation of the Telstra/Cot issues, when documents faxed to Neil Jepson’s office never arrived.”
(GS 367)

22nd February 1999:  Graham writes to Mr Tony Shaw, ACA (formerly AUSTEL) Chair:-

“After the release of the AUSTEL C.o.T. Cases Report in April 1994, AUSTEL declared it was a C.o.T free zone and unilaterally refused to investigate any C.o.T. complaint about Telstra’s network performance and corporate conduct. The complaints being referred to AUSTEL were part of its legislative charter and within its jurisdiction. …”

“We formally request a meeting with you in Melbourne to present material to support the validity of our previous assertions made to and not addressed to AUSTEL/ACA. Monday, 1 March 1999 is our preferred option for the date of the meeting.” (GS CAV 383)

24th February 1999:  Graham again writes to Tony Shaw, seeking confirmation regarding the 1st March 1999 Meeting and noting:-

“Mr Cliff Matherson [sic] has made contact to suggest a meeting date of 3rd or 4th of March 1999.” (GS CAV 384)

25th February 1999:  AUSTEL’s Cliff Mathieson, replies to Graham’s letter of 24th February 1999:-

“No referrals regarding systemic network problems and faults have been received. However, in 1995/96 the TIO raised with AUSTEL matters relating to deficiencies in Telstra’s handling of fault reporting and recording processes. …”

“In reference to your request for a meeting, relevant ACA staff are not available 1 March 1999. Given that we have brought you up to date regarding the matters raised in your letter, there seems little point in proceeding with a meeting as requested.”
(GS 385)

Cliff Mathieson, on 21st March 1995 during the Canberra Senate Telecommunications (Interception) Amendment Bill 1994 debate, informed Alan Smith, in front of AUSTEL’s Frances Wood, the BCI Cape Bridgewater tests could not have been performed as detailed in the report (see also GS CAV 385).  However, Mr Mathieson failed in his duty of care as an Official Representative of the Communications Regulator, as he should have told the TIO and Dr Hughes the BCI tests were more than just flawed, before Dr Hughes handed down his award in Alan’s case, but he did not.

26th February 1999:  Alan Smith’s fax account (GS CAV 386) confirms he faxes three separate documents to Graham’s office (at 10:55 am, 11:20 am and 01:37 pm).  Graham’s facsimile journal for this date confirms there was no 11:20 pm document received by Graham. (GS CAV 387)

The Graham Schorer and Alan Smith facsimile interception files (see exhibits 2 and 3), confirm faxing problems between Graham’s & Alan’s offices were nothing new. These files confirm sensitive legal (client to the solicitor) Telstra-related documents were intercepted prior to being forwarded on by Telstra to the intended destination.

26th February 1999:  Alan Smith writes to the co-ordinator of the Public Interest Law Clearing House, on the advice of John Phillips, Chief Justice of the Supreme Court of Victoria noting:-

“Back in August 1992, Austel, the Telecommunication Regulator, became involved, and Freedom of Information (FOI) documents show that Amanda Davis, then the General Manager for Consumer Affairs at Austel, also suffered from incorrect charging when making contact with my business. This continuing fault had existed on my phone line from 1988/89 and so, in December 1992, I had Telstra connect another service to handle a 1800 freecall number, in the hope that it would give prospective customers easier access to my business. …”

“There are documents in the draft of my book which show that Telstra wrote to Austel on 11/11/94 stating that they would address this incorrect charging in their defence of my arbitration claims but this never happened. …”

“What is more, Telstra also wrote to the arbitrator on 16/12/94, confirming that they had informed Austel that they would address the incorrect charging in the defence of my arbitration claim…”

“…the incorrect charging to my 1800 account continued right through my arbitration and for at least a further 20 months after the ‘completion’ on my arbitration on 11/5/95.” (GS CAV 388)

26th February 1999:  Graham again writes to Tony Shaw:

“I refer to our correspondence dated 22 February 1999 and 24 February 1999, and ACA’s response dated 25 February 1999. The ACA correspondence states, at the end of its letter on page 2, ‘…Given that we brought you up to date regarding the matters raised in your letter, there seems little point in proceeding with a meeting as requested.’ …”

“Both AUSTEL and the ACA have been advised of/supplied with C.o.T. documentary evidence proving the existence of systemic difficulty, problems and faults with the Telstra network, including network and Telstra billing software negatively impacting on Telstra’s subscriber’s [sic]services and charges. …”

“The ACA’s current decision not to accept a briefing from the C.o.T.s on this matter and not investigate this complaint, requires the ACA to provide a written statement to C.o.T. Cases Australia.” (GS CAV 389)

9th March 1999:  Alan Smith writes to John Pinnock, noting:-

“As you can see from this one example, my fax problems continued for some considerable time after the completion of my arbitration.” (GS CAV 390)

10th March 1999:  Graham again tries to get Tony Shaw to investigate the valid COT complaints regarding Telstra’s defective network.  Alan Smith CAV Chronology file and supporting information confirm he also notified the TIO and the ACA, that the COT arbitration process failed to investigate any of the continuing phone problems and faults that continued past his arbitration. (GS CAV 391)

11th March 1999:  AUSTEL’s Cliff Mathieson responds for Tony Shaw (the elusive ACA Chair):-

“The TIO’s relationship with AUSTEL was set out in section 339 of the Telecommunication Act 1991 and provided for the reference of complaints to the TIO. Therefore, with the establishment of the office of the TIO, AUSTEL referred all complaints within the jurisdiction of the TIO to that office in accordance with the clear intent of the legislation. Accordingly, the ACA rejects the basis for your request for an investigation.”

“As the C.o.T. complaints are still before the TIO, my suggestion is that you provide the TIO with all of  [sic] relevant evidentiary material which you state is in your possession to assist in the progress of the arbitration or its related processes.”
(GS CAV 392-A)

15th March 1999:  Graham again writes to the elusive Tony Shaw:-

“I refer to the ACA’s letter dated 11 March 1999, in response to C.o.T. correspondence dated 22 February, 24 February, 26 February and 10 March 1998.

  • Records should contain the C.o.T.s objection to the AUSTEL’s appointment of the TIO as Administrator of the AUSTEL Fast Track Settlement Proposal process.

The C.o.T. Cases Australia’s complaints/assertions made to AUSTEL and the ACA that the TIO:-

  • is acting in a bias manner as Administrator, …
  • has, in written statements to Parliamentary members and others, made misleading and false statements to the determent of the individual C.o.T. members ” (GS CAV 393)

15th March 1999:  Graham writes to Senator Richard Alston:-

“C.o.T. Cases Australia and its members have concerns and reasons to challenge the continuance of the TIO’s administration of the Telstra’s arbitrations. …”

“As Telecommunications Minister, please provide written advice of which Government Agency must investigate this serious complaint.”

“Senator Alston, will you, as Minister, support your advice within a written recommendation the Agency you nominate must investigate this matter?” (GS CAV 394) 

29th March 1999:  Graham writes to the Hon Tony Staley, TIO Council Chair:

“Individual C.o.T. members, during the last five years, have drawn the respective Telecommunication Industry Ombudsman’s attention to matters of Telstra’s corporate conduct.”

“From C.o.T. members’ perspective, these matters have not been correctly addressed nor did individual members receive a written response from the respective Telecommunications Industry Ombudsman setting out how the TIO intended to address these matters.” (GS CAV 395) 

12th April 1999:  William Hunt file notes record a telephone call from Alan.  Alan explains that Graham is hesitant to take the money offered by Telstra because he feels he is letting Alan down.  Alan is very concerned about Graham’s mental health and wants Graham to take the money. (GS CAV 396)

14th April, 1999:  GS CAV 397 shows a conversation between William Hunt and Anthony Honour and Graham Schorer.  Mr Honour suggests Graham lowers his baseline settlement amount by $350,000.  Graham does not agree.  Graham states, “I am not prepared to prostitute my claim any further,” should be seen in relation to his agreement to take part in the proposed Senate investigation into Telstra’s conduct during the COT arbitrations.  This primary investigation led to the formation of the Senate Working Party and this is why Graham wrote to Pauline Moore, Secretary of the Environment, Recreation, Communications and the Arts Legislation Committee, on 29th September 1997 to advise Ms Moore that his losses were between $4.3 and $12.6 million. (GS 328)

At this stage, Graham was burnt out, both physically and emotionally, and owed thousands and thousands of dollars to the various professionals who had helped in the now-crumbling arbitration.  This left him with no real alternative but to accept the $3.8 million Telstra offered.  The financial documentation in relation to the Deed of Release that Graham signed is attached to Graham’s CAV Relevant Information file as exhibit 16-a).

25th April 1999:  Alan Smith’s writes to the Hon. Tony Staley:-

“The enclosed FOI document, No. M33445, titled “Meeting to Discuss Fast Track Rules of Arbitration”, 22 March 1994, was forwarded to me last Monday, 19 April 1999. …”

“This meeting was clearly called to discuss the rules of the COT arbitrations and, since there were no representatives of COT present, the arbitrator should not have been there either. The situation is no different to a defendant (in this case, Telstra) in a court action meeting with the Judge to pass on instructions regarding how the matter before the court should be addressed. …”

“I would be grateful if you could explain to me why the TIO allowed the meeting to take place without any input from the members of COT. (GS CAV 398-A) 

26th May 1999:  Mr Pinnock writes to Alan:-

“I refer to numerous letters addressed to the Chairman of the TIO Council, the Hon Tony Staley, and which I have forwarded to him. 

The Chairman has asked me to advise you that Council will discuss the matters raised in your letters at its next meeting scheduled for 21 June 1999.” (AS-CAV 264) 

Alan has never received a response to the outcome of that meeting.

2nd June 1999:  John Pinnock, writes to the Hon. Tony Staley, regarding the pending Brian Purton-Smith arbitration, and noting:-

“I am even more strongly of that view today. In part my position has hardened because of the many problems and deficiencies to the Arbitration process.” (AS-CAV 266)

Mr Pinnock didn’t tell Mr Staley, however, that 36 hours before Graham Schorer and Alan Smith signed the Telstra-established Arbitration Agreement, two very important clauses were removed without Graham or Alan’s knowledge.  Then, also without their knowledge, the clauses were later put back into the agreement for the remaining 12 COT claimants to sign.  Mr Pinnock was, although, correct in his assessment that the process had “many problems and deficiencies”.

IMPORTANT COMMENTARY

Between 29th April and 12th July 1999 in the lead-up to Graham finally accepting less than a third of his estimated losses, numerous letters were exchanged between Graham, William Hunt, Telstra and Telstra’s solicitors (Freehill Hollingdale & Page). The arbitrator and the TIO-appointed Technical Resource Unit never assessed the validity of Graham’s claim – including the phone problems that continued to occur at his business.

If Telstra and the TIO had told Graham someone with access to Minter Ellison’s offices had secretly removed clauses 25 and 26 from the agreement, and altered clause 24 to favour Minter Ellison, Ferrier Hodgson and DMR Group, Graham would never have signed the Deed of Release: he would have taken the matter directly to the Supreme Court of Victoria.  Graham would also never have written to the Senators in the Senate Working Party (see exhibit 16-b, Graham’s Relevant Information file) thanking them for their assistance and a fair outcome, had he been aware of the deceptive conduct of so many.  Exhibit 16-b is a letter from Senator Carr, dated 7th July 1999 thanking Graham for his kind words.  Had the Senate been advised Graham and Alan signed the FTAP agreement believing it was the agreement their lawyers had viewed and accepted as the official agreement, when it was altered at the last minute, the Senate would have dealt with the COT issues differently.

The indisputable evidence of the alterations to clause 24 and the removal of clauses 25 and 26 from the Arbitration Agreement before Graham and Alan signed it, and the later reversal of these changes for the remaining 12 claimants, is attached to Graham’s CAV Chronology file, at exhibit 17, entitled Agenda 9th January 2008.

13th July 1999: The Hon. Tony Staley writes to Alan Smith:-

“The Ombudsman has briefed the Council on various complaints which you have made concerning the Fast Track Arbitration Procedure (FTAP) and concerning the conduct of the Arbitrator, Special Counsel, the Resource Unit and the TIO in his role as Administrator of the COT Arbitrations. …”

“I also note that, to the extent that many of your complaints raise what may be considered legal issues, you have never exercised any rights to appeal the Award under the Victorian Commercial Arbitration Act (Vic).” (GS CAV 399)

GS 400 is a letter dated 26th May 1999, from John Pinnock to Alan:

“I refer to numerous letters addressed to the Chairman of the TIO Council, The Hon Tony Staley, and which I have forwarded to him.”

“The Chairman has asked me to advise you that Council will discuss the matters raised in your letters at its next meeting scheduled for 21 June 1999.

The letters that were to be discussed by the Council on 21st June 1999 were dated 19th and 25th April, and are GS CAV 398-A and GS CAV 398-B.  Although Alan asked, on a number of occasions, for a copy of the list of issues actually discussed by the Council at this meeting, particularly in relation to Alan’s matters, he has never received a copy of that list, nor an explanation of why the Council will not supply the list.

In Alan’s letter (GS CAV 398-B), he notes:-

‘Both your own office, and the then TIO, Warwick Smith, were aware that the rules that we signed on 21 April 1994 had not been drawn up independently, as we were led to believe, but had, in fact, been drawn up by Telstra and their Legal Counsel, with only a few minor cosmetic alterations made later.”

COMMENT

Had the TIO Council correctly compared the final arbitration rules to Telstra’s proposed agreement and Minter Ellison’s draft agreement (from Telstra’s Proposed Rules) it would have seen the rules Dr Hughes’ office worked with, (just before Alan and Graham signed the final agreement) were different to the Telstra/Minter Ellison rules presented to Graham and Alan for signature.

It would be reasonable to assume that, once the TIO Council discovered the discrepancies between the clauses, the Council could have immediately initiated an enquiry into those discrepancies.

19th July 1999:  David Smith, of Corrs Chambers Westgarth, writes to Graham:-

“We have been provided with a copy of your letter to Mr Rohan, the Chairman of the Board of the TIO Ltd, dated 17 June 1999. …”

“We understand that you also telephoned HLB Mann Judd, the auditors of the TIO Ltd, on 15 June 1999 and said words to the effect that action was being commenced against the TIO. We understand that you used the word ‘fraud’ and made a statement to the effect that the TIO engaged in collusion with Telstra to disadvantage the C.o.T. …”

“We are instructed that the TIO Ltd, having made due internal enquiries, it unable to identify any basis on which civil or criminal claims might be brought against the TIO Ltd or its officers, employees or agents in connection with any matter relating to the arbitration procedures you and other of the C.o.T have been involved in with Telstra and in relation to which the TIO Ltd has played the role of administrator.” (GS CAV 401)

However, GS CAV 402, from Graham to Ms Mason of the TIO Board, shows the Major Fraud Group are satisfied there is sufficient evidence to investigate the TIO’s conduct and recommend a task force be assigned.

Towards the end of August 1999 through to 2001, Graham threw himself into trying to steer his business out of the problems it had suffered through the phone problems and 14 years of litigation with Telstra.  Much of this period was also taken up assisting with providing material to the Major Fraud Group, Graham had compiled lever-arch files of evidence supporting COT case members including Graham and Alan’s allegations their respective arbitrations had not been conducted transparently or independently.

The Alan Smith CAV Chronology file and supporting information show much of the damning evidence against Telstra and the arbitration process was never provided by the TIO during the police enquiry.

Graham and Alan believe that had all the material they now have, had been available to them during the Major Fraud Group investigation, this material would have supported the Major Fraud Group greatly in furthering their investigations.

21st September 1999:  Alan writes to John Pinnock concerning his continuing fax problems.

“Since the problems with my fax line were not addressed in my arbitration procedure I would be grateful if you would now ask Telstra the following questions:

  • How can they charge me for a fax delivery to Mr Schorer’s office when it did not arrive there?
  • Since, according to my Telstra account, I dialled the correct number when I sent this fax, and since it clearly did not go to that number, where did this fax go to?” (AS-CAV 266)

It is important to note Alan provided Mr Pinnock with a copy of Graham’s fax journal and his Telstra account proving, yet again, the fax problems were just as bad in 1999, as they were prior to and during his arbitration

19th October 1999:  Mr Pinnock writes to Alan, noting:-

“I have reviewed the resources which the TIO has devoted to dealing with your extra ordinary [sic] number of complaints and letters over the past years and advise you that I do not propose to take any further action in relation to these matters.” (AS-CAV 267)

Cathy and Margaret Van Run provide testaments

24th October, 1999:  AS 268 is an excerpt from a Statutory Declaration Cathy sent to David Hawker MP:

“Mr John Pinnock (Telecommunication Industry Ombudsman) has refused to address a number of Alan’s complaints.”

“Living with this type of no win situation has left both Alan and I exhausted and unsure if we can trust our business future.” (AS 268)

Cathy and Alan continued to experience this type of problem until they sold their business in December 2001

28th October 1999:  the Hon. Tony Staley writes to Alan stating:

“The Ombudsman has repeatedly advised you in the past of your rights of appeal in relation to the Award of the Arbitrator, advice which you have not followed.” (AS-CAV 269)

30th January 2000:  Dial-A-Secretary has problems faxing to Alan’s office:-

“On the 28th December, 1999 I was contacted by Alan Smith from Cape Bridgewater Holiday Camp re doing some computer work for him. … Alan rang and we organised for him to fax the work through. One page and a small portion of the next came through and then the line disconnected. Alan tried numerous times to get the fax through, but to no avail and he eventually had to make other arrangements for the work to be done nearer to him.”

“On 5th January 2000 Alan again contacted me regarding doing some work for him. He tried so many times over a period of about 3½ hours and finally the work came through.” (AS-CAV 270)

Attached to AS-CAV 270 is Alan’s fax account for this time showing Telstra charged for these non-transmitted calls

12th February 2000:  Alan writes to Ray Bell, author of the TF200 Report and asks him to consider his position:-

“Many years ago, in the Court of Tiflis of then Empire of Russia, the following legal precedent was set: 

‘…that no man can take advantage of his own wrong, and that it is a principal of Law that no action can be maintained on a judgement of a court either in this country or in any other, which has been obtained by fraud of the person seeking to enforce it. That the defence is good…’ (AS-CAV 271)

9th May 2000:  Alan Smith writes to Ms Roslyn Kellcher (ACA acting Chair), clearly defining where Telstra broke the law during his arbitration, including detailing where the arbitrator and/or TIO treated his valid allegations with utter contempt. (AS-CAV 274)

22nd May 2000:  Graham writes to Kathryn Taylor, (FOI, Legal Group, ACA) requesting an array of documents still not seen by Graham or Alan.  Graham notes:-

“It is not appropriate for the ACA to transfer all or part of this request to Telstra. Transfer of all or part of this request would prevent the discovery of notes and comments made by Austel and/or ACA Officers on the copies of documents distributed in draft form prior to sending or received correspondence distributed for comment and/or action.” (GS CAV 404)

23rd May 2000:  John Pinnock writes to Alan Smith:-

“You have requested me, as Administrator of your Arbitration, to supply you with a copy of the first mentioned letter. I have caused an exhaustive search of your Arbitration files held by the TIO but have been unable to find the letter. It may be that it is on other equally voluminous files held by the TIO relating to the original AUSTEL Cot report. …”

“The construction you place on the letter is incorrect.” (GS CAV 406-A)

3rd June 2000:  Alan Smith writes to Kathryn Taylor requesting FOI documents:-

“No 94/0269-06”

“This document, originally addressed to the Hon, Michael Lee’s office on 13/10/94, was recently supplied by the ACA to the members of COT. Both pages have information blacked out. …”

“At point 4 of this letter, the writer confirms that Steve Black and his senior executives had sought to influence and manipulated the Cot arbitrations in the following ways:

  • Remove or change information regarding Telstra’s liability
  • Diminish the level of compensation payable to COT customers
  • Dismiss breaches in relation to matters of customer privacy.”

“Clearly Telstra’s defence unit knowingly committed a number of unlawful acts in an attempt to ‘diminish the level of compensation payable to COT customers.’ …”

“All this information shows clearly that an injustice has taken place in the COT arbitrations. The ACA should now be seen to be cooperating in an effort to minimise any future suffering of the COT members. To this end, I now seek, from the ACA, a full and complete copy of the document of 13/10/94…” (GS CAV 405)

Please note:    The ACA never provided a full and complete (un-blanked) copy of this document.

13th June 2000:  ACA’s Frank Nolan writes to Alan:-

“I refer to your letter of 9 May 2000, in which you raise yet again a number of concerns relative to your Fast Track Arbitration Procedure and subsequent events.

You raised similar issues in a letter to the [ACA] dated 26 January 2000. In his response to that letter dated 15 February 2000, Neill Whitehead indicated the ACA’s position with respect to such issues. 

This position has not changed, and I have nothing further to add save to emphasise that it is not of the ACA’s role to pursue these matters and that it does not intend doing so.” (AS-CAV 273) 

Philippa Smith, Commonwealth Ombudsman wrote to Jim Holmes, Telstra’s Corporate Secretary (who was also a TIO Board Member at the time) on 20th January 1994:-

“I received complaints from three of the ‘COT Cases’, Mr Graham Schorer, Mr Alan Smith and Ms Ann Garms, concerning TELECOM’s handling of their applications under the Freedom of Information Act (FOI Act)… 

All three assert that they require the information to support their submissions to the imminent review in accordance with the Fast Track Settlement Proposal (FTSP) agreed between TELECOM and AUSTEL, and endorsed by the then relevant Minister.” (GS CAV 408)

During the drafting of the COT Cases Report (April 1994), the COT claimants questioned AUSTEL’s chairman, Robin Davey, about this endorsement and were told that it would guarantee the Government’s commitment to have all COT claims properly assessed by the appointed assessor.  This endorsement meant the Government Regulator, now ACA had a responsibility to investigate Graham and Alan’s valid claims as to the previous regulator, AUSTEL were the facilitators of Graham and Alan’s Assessment and Arbitration Processes.   Frank Nolan’s statement in his letter of 13th June 2000 is therefore quite wrong, the ACA did have a duty (as the facilitators of the process) to pursue these matters.

Pandora’s Box?

10th October 2000:  Kathryn Taylor replies to Graham:-

“I refer to your numerous requests for information under the Freedom of Information Act 1982, in which you sought access to documents relating to correspondence between the ACA/Austel, the TIO, Telecom/Telstra, the arbitrators and the Minister for and/or Department of Communications

I have decided to release this information to you in full.” (GS CAV 409)

29th October 2000:  Alan writes to the Hon. David Hawker’s secretary, Megan Campbell:-

“In support of these allegations of phone taping I have enclosed two documents. ..

In relation to problems with my mail, I enclose a copy of a letter recently sent to me from the Portland Post Office, and dated October 28, 2000. This letter confirms that overnight mail that I had posted had not arrived at its intended destination five days later.” (AS-CAV 274)

19th December 2000:  Alan alerts Senators to what he uncovered from the TIO’s latest release of documents under the Privacy Act.  This letter discusses his concern regarding privacy issues, mail either lost completely or having been opened by persons unknown before delivery including phone interception issues, as well as Telstra FOI documents confirming they carried out surveillance of COT case premises and the TIO’s office reluctance to investigate their valid claims. (AS-CAV 275)

Perhaps some of Alan’s arbitration claim documents, which do not appear on the Arbitrator’s List of Documents received, were lost during road transit as well as through Telstra’s fax-streaming process

11th January 2001:  Alan writes to David Hawker MP advising that:

“…Phil Corless [sic] and Lyn Chisholm (both from the same department as David Thomson) did subsequently visit my business early in 1998 and were both provided with evidence confirming that Telstra had, in fact, billed me incorrectly on the following three on my business phone lines:

  1. Facsimile service 55 267 230
  2. Free call 008/1800 service
  3. Goldphone service 55 267 260” (AS-CAV 276)

5th April 2001:  Ms Kirsten Musgrove writes to Graham

“I refer to your recent request for access to an anonymous letter headed “Received 13 October 1994”. …

“I attach a legible copy of the above letter as completion of your request”. ( GS-CAV 411)

The duplicate of this letter, originally sent by the ACA, was more heavily censored than the copy now released.  This shows Telstra was illegally altering and removing relevant information on documents requested by COT claimants.

Before ruling in Telstra’s favour, had Justice Gillard seen this document showing Telstra altering relevant information on documents defendants requested, during an arbitration process conducted under the same Supreme Court, he would have had to allow the Senate investigations to conclude, before forcing Graham to continue the arbitration.  The very issue Graham raised, in his legal argument with Justice Gillard, was Telstra’s defective supply of FOI documents.  With the 13th October 1994 letter and Alan Smith’s Statutory Declaration attesting to Rod Pollock altering information on documents requested by Alan, the same Rod Pollock named in the 13th October 1994 letter (see  GS-CAV 411), Justice Gillard would have had to rule in Graham’s favour.

Had Graham been given this grace of time by Justice Gillard, he would have had longer to find someone to arbitrate his claim and would not have been under the same pressure he was when he finally accepted Telstra’s lifeline!

7th June 2001:  Ms Musgrove responds to Graham’s FOI requests, noting:-

“Due to the magnitude of the request it was decided to process each box as the documents are discovered.” ( GS-CAV 412)

19th June 2001:  Graham writes to Ms Musgrove, noting:-

“On examining the documents and the enclosed Schedule, it appears that the ACA are using a processing method, of these individual and precise FOI requests, in a manner that makes it impossible for a third party to identify which FOI request including which part of that request, the document has been supplied in response to.” ( GS-CAV 413-A)

12th July 2001:  Ronda Fienberg, a Melbourne-based secretary and Alan do a number of line tests on the incoming and outgoing fax line.  Both Cathy and Graham also experienced the same lock-up problems when doing similar line tests during this period.  This note from Ronda clarifies there were lock-up problems still apparent on Alan’s business service lines. (AS-CAV 277)

Please note: this was the same type of lock-up fault Telstra acknowledged was a moisture-related problem the EXICOM TF200 experienced.  On 27th April 1994 Telstra removed an “alleged drunken TF200 from the camp premises” and installed a similar EXICOM TF200.  Could this second EXICOM have been part of Alan’s problem?

9th August 2001:  Alan Smith writes to the ACA Chair, Tony Shaw:

“I consider the ACA has failed to correctly respond to my written complaints, in particular, the reported conduct during Austel/TIO/Telstra/Fast Track Settlement Proposal/Fast Track Arbitration Procedure.

The ACA’s decision is ignoring the following facts:-

  • Austel/ACA is the Federal Government appointed guardian of all Australian Telecommunication consumers.
  • Austel purposely drafted the Fast Track Settlement Agreement. …
  • Austel now the ACA, as the Telecommunications Regulator, under it legislative charter was an involved partly during the processing of the Fast Track Settlement Proposal, Fast Track Arbitration Procedure and Special Arbitration. …

Due to ACA’s refusal to fulfil its Regulatory Obligation to me, as a telecommunications consumer, with a legitimate complaint about the conduct of the TIO, the TIO Resource Unit, the appointed Arbitrator and Telstra, I am now seeking the intervention of others to have the ACA compelled to comply with its legislative charter.

As part of my decision, enclosed is an authorisation for Graham Schorer as spokesperson for CoT Cases Australia to act on my behalf.” ( GS-CAV 413-B)

The phone issues continue:  2002

In January 1991, Telstra forwarded an open offer setting out Telstra’s agreement to additional Terms and Conditions offered to Golden Messenger, Graham’s business, as an inducement to connect to the Telstra ISDN network for the receipt of incoming calls.  Golden Messenger relied on that agreement – and still does.

As part of Telstra’s accelerated upgrade of the analogue PSTN network to a digital network, Telstra installed digital exchanges, manufactured by companies other than Ericsson, which had the capacity within the individual exchanges to provide both PSTN and ISDN services.

In September 1993, when Telstra were required to install the optic fibre ISDN link, Telstra attempted to connect a copper wire at Graham’s business.  This prompted Graham to contact Telstra regarding the undertakings and commitments they provided the company as part of their supply of the ISDN deal in 1991.

In 2002, Telstra informed Graham they were now ready to switch off his old system (which originally cost Graham in excess of $80,000 to install) and connect him to another service. Once again, Golden Messenger and Telstra locked horns in another costly court battle. As the wrongs and rights of this whole affair are voluminous, these matters are not discussed here.

Legal material giving a brief overview of this matter is attached for reference as exhibit 18 in Graham’s CAV Chronology file.

By 2002/3, Graham and Alan had accumulated thousands of FOI, and other relevant documents, which were previously available (during their respective arbitration and appeal periods) but never supplied when requested.  The collected documents blatantly show some sinister dealings and prompted Graham to involve Allen Bowles to seriously investigate Alan and Graham’s arbitration matters.

During this period, Senator Len Harris (One Nation) pushed to have some of the COT issues reopened and settled via the intervention of Senator Richard Alston.  Phone calls to Alan Smith’s residence and meetings with Senator Harris nearly achieved this, as did Graham commissioning legal expert David Bailey, to draft the terms of reference of this review (see 23 September 2003).

CHAPTER EIGHT

Threats from a Senator

16th August 2001: Senator Eggleston threatens Alan with possible legal action, noting:-

“The fact that you have received unauthorised confidential committee documents is a serious matter, but if you disclose these documents to another person, you may be held in contempt of the Senate.” (AS-CAV 278)

Some of the Senate documents referred to by Senator Eggleston are in-camera Hansards, dated 6th & 9th July 1998 showing a group of Senators attempting to address Telstra’s conduct during and after the COT arbitrations.  Note: Ted Benjamin was Telstra’s Liaison Officer to Graham and Alan’s arbitrations, while a member of the TIO Council at the time.

Hansard:

“Can you see the whole thing is unfair?” …

“When I said ‘starve people into submission,’ Mr Benjamin shook his head in opposition to my comment, which he is fully entitled to do. I agree with you, Madam Chair, about the difficulty of those who have had their cases resolved under arbitration. Many of them will tell you that, if they did not accept it, they could not fight on. Some people are fighting on.” (AS-CAV 278)

With statements like this from Australia’s sitting Senators regarding Telstra, is it any wonder Alan has been threatened the way he has?  Of course, the Coalition Government didn’t want Telstra’s unethical conduct towards the COT cases exposed while they were selling off this government asset

14th September 2001:  Senator Nick Minchin’s secretary writes to Alan noting:-

“I have been in contact with the office of the Hon Richard Alston, the Minister for Communications, Information Technology and the Arts, and I have been advised that a reply will be sent to you shortly addressing the matters you have raised.” (AS-CAV 279)

18th October 2001:  John Neil, ACA Executive Manager, writes to Alan:-

“I advised you on 30 July 2001 that it is not the role of the ACA to address these matters. I note you have previously raised them with other authorities including the Commonwealth Ombudsman’s Office and the Victorian Police.

I do not propose to engage in further correspondence with you on these matters.” (AS-CAV 280)

7th November 2001:  Senator Brett Mason writes to Alan, stating:-

“As advised in my first contact with you, the Minister for Communications, Information Technology and the Arts had undertaken to investigate your concerns and respond to you on behalf of the Coalition. (AS-CAV 282)

28th December 2001:  Alan writes to a number of Government Ministers, noting:-

“As you are already aware, I recently sold my business, the Cape Bridgewater Holiday Camp and Convention Centre. The new owner Jenny and Darren Lewis took over on 23rd December 2001.”  AS-CAV 282 

Alan explains Mr and Mrs Lewis are experiencing phone problems and then says:

“How is it that, although the TIO, John Pinnock, is more than fully aware of the problems I have faced because of Telstra (problems which lasted for fully five years after the so-called ‘completion’ of my arbitration), he has never done anything to assist me?”

19th February 2002:  Alan offers to provide Senator Richard Alston with fresh evidence via David Hawker’s office concerning his continued allegations.

“Ms Sue Owens, Barrister, received the following information from the Telecommunication Industry Ombudsman’s office early this year. The information confirms the role played by the TIO’s office in covering up criminal behaviour by Telstra, and others, during my arbitration.

Would you prefer me to forward this fresh evidence to your office or to Senator Alston’s office?” (AS-CAV 283)

15th March 2002:  David Hawker MP writes to Alan:-

“I have ensured the Minister for Communications and Information Technology is aware of your offer to provide fresh evidence.” (AS-CAV 284)

27th March 2002:  David Hawker’s writes on behalf of Senator Alston, saying:-

“I have received an interim response from the Minister for Communications, Information Technology and the Arts, Senator the Hon Richard Alston MP, which informs me the matter is currently receiving attention and will be responded to shortly.” (AS-CAV 285)

12th July 2002: Senator Alston responds to David Hawker MP:-

“As the material provided by Mr Smith relates to the arbitration undertaken by Dr Gordon Hughes of Hunt and Hunt, under the administration of the Telecommunications Industry Ombudsman (TIO), I have referred your letters to the TIO for advice.” (AS-CAV 286)

17th July 2002:  The Minister’s Office writes to Alan regarding his offer to provide irrefutable evidence his arbitration was not conducted transparently by the TIO-appointed Arbitrator and Resource Unit:-

“I would, therefore, ask that you refrain from providing any further material until the Telecommunications Industry Ombudsman has provided advice on the material you have supplied to date.” (AS-CAV 287)

14th October 2002:  Senator Alston’s Office writes to David Hawker MP:-

“Thank you for your representations of 23 September 2002 on behalf of Mr Alan Smith concerning Telstra. 

The issues raised in your letter are receiving attention and the Minister will respond to you shortly.” (AS-CAV 288)

16th October 2002:  Telstra FOI folio 100264, concerns Mr Lewis’ phone faults and confirms the new owner of Alan’s business is having phone problems:

“Customer has contacted MP again re service as he is not receiving calls on message bank or *10#. Customer is aware previous owner of business also had problems with service [sic]. Customer said he was told by Telstra that there was a problem in his exchange.” (AS-CAV 289)

18th October 2002:  Telstra FOI folio 100266 re the Lewis phone problems, says:-

“The TIO have now raised a Level 1 complaint on behalf of Mr & Mrs Lewis. The TIO have specifically mentioned in their correspondence that the TIO have previously investigated a number of complaints raised by Alan Smith the previous account holder for this service.” (AS-CAV 290)

8th November 2002:  This Portland Observer newspaper article, entitled Holiday camp still plagued by phone and fax problems, says:-

“The telecommunications problems which plagued former Cape Bridgewater Holiday Camp operator Alan Smith continued to beset current owner Darren Lewis.” ( GS-CAV 414)

Although Alan Smith’s phone problems began in 1988, it is now believed many of the phone and fax problems that occurred, at least from 1991 on, were caused by moisture and were exacerbated by heavy rainfalls in the area.  Cape Bridgewater faces the Southern Ocean and always has had a moisture problem.  This was not taken into account nor discussed, in any of the technical findings of the arbitrator or his Technical Resource Unit, even though Alan included this information in his submissions.

Please note: The Cape Bridgewater Holiday Camp was also connected to a single ‘copper pair’ (see Senator Harris’ media release at exhibit  GS-CAV 415).

When Senator Len Harris meets with Alan Smith and other COT claimants, Alan provides information regarding the problems Graham has experienced over the years, in his role as COT spokesperson, as well as the problems the new owners of Alan’s business are still having to contend with, including the business still being connected to the Telstra network via a single pair of wires.  Senator Harris is extremely shocked at this information and prepares a press release for the following day, on behalf of the COTs.  It was significantly censored before it was released, showing just how much power Telstra could wield, as part of their strategy, to downplay the COT claimant’s valid claims.

14th November 2002:  Senator Len Harris (One Nation) sends out his media release entitled, Alston Praying For Continued Drought.

“In other words, sell the whole shooting bag before it rains and let someone else worry about fixing it. …”

“In light of evidence presented by the Communications Electrical Plumbing Union to a senate inquiry then to the Estens inquiry, other court submissions and a large dose of anecdotal evidence from Telstra employees, there seems no doubt the copper and lead network could implode with the onset of rain.”

“Numerous reports from regional areas that have recently received rainfall, reveal the subscriber fault rate has doubled and tripled due to lack of proper maintenance, faulty materials and understaffing. …

  • Faulty materials such as Hi Gel 3M 442, that has corroded copper joints
  • Contractors cutting corners with cable installation
  • Management giving capital works an economic priority order for replacing faulty cables and equipment i.e. those exchange areas that produce the most profit given priority for repair or replacement. This process could preclude most country areas. …”

“In city and country telephone exchange areas, low gas alarms, sometimes 200 or more a day, are sending technicians in a scurry from exchanges to manholes across the city or country roads and back. …”

“According to the union the CAN or Customer Access Network (customer land lines) accounts for 50 to 60 per cent of Telstra’s fixed costs, ie maintenance bill, but generates the lowest rate of return. …”

“Some ind