Chapter 2 - Inaccurate and Incomplete
A criminal scheme devised by Telstra to minimize their losses was uncovered by the Senate in June 1997 (Refer to Senate page 5169 SENATE official Hansard – Parliament of Australia - (see TIO Evidence File No 3-A) more than two years after most of the arbitrations were concluded.
During the COT arbitrations, when the first appointed Telecommunications Industry Ombudsman (TIO), who was also the administrator to the arbitrations himself, and other TIO officials, threatened the last three COT claimants, Ann Garms, Graham Schorer and me that, if we did not formally agree to exonerate the arbitration financial advisors, Ferrier Hodgson Corporate Advisory (FHCA), from any liability in relation to their involvement in the arbitration process, as well as the arbitrator's technical consultants DMR, Australia (Telecommunications Industry Ombudsman / Chapter 5 Fraudulent conduct then there would be no arbitration and we would therefore be left with only one alternative, the enormous costs involved in taking Telstra to court for not providing us with a decent telephone service, even though Telstra (as a government organization) had a legal responsibility to provide us all with a service comparable to our competitors.
Corruption in Arbitration
On 6 December 1995, Derek Ryan, my arbitration accountant, wrote to the Shadow Minister for Communications, Senator Richard Alston, stating:
“Over the last 2 years I have acted as an independent accountant for Alan Smith and I prepared the independent assessment of his losses and damages which formed part of his submission to the arbitrator, Dr G Hughes.
“In response to accounting documents and evidence submitted to the arbitrator, he appointed Ferrier Hodgson Corporate Advisory (Vic) Pty Ltd.(‘FHCA’) to support him in assessing the losses and damages.
“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 or understand how the FHCA loss figures were determined. This effectively meant that it was impossible to challenge the assumptions, calculations and the time periods used in the FHCA report.” (See Open letter File No/45-E)
On the 22 December 1995, Derek Ryan wrote to TIO John Pinnock, noting:
“The Ferrier Hodgson Corporate Advisory (Vic) Pty Ltd (‘FHCA’) report was dated 3 May 1995 and I received a copy of the report on 5 May. After discussions with Alan Smith it was decided that I should reply to the report as soon as possible.
“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. …
“In 17 May I telephoned John Rundell and he stated that he was unable to discuss anything with me until the appeal period had expired. … 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.” (See Open letter File No/45-E)
On the day we signed our arbitration agreements, the official threatened the last three original COT claimants, Ann Garms, Graham Schorer and me. We were told that if we did not agree to exonerate the Telecommunications Industry Ombudsman financial unit FerrierHodgson Corporate Advisory (FHCA), which included John Rundell, the Arbitration Project Manager, and technical arbitration consultants DMR (Australia), from all liability for their involvement in the arbitration process, then there would be no arbitration. As a result, the claimants would be left with only one alternative: the enormous costs involved in taking Telstra to court.
As small businesses, we faced a daunting legal battle against a government-owned corporation with seemingly endless resources to fund its defence. Despite our best efforts, we were forced to exonerate FHCA and DMR (Australia) from all liability. Once clauses 25 and 26, i.e., the $250,000 liability caps, were removed, we could never pursue legal action against them for any negligence or intentional wrongdoing. Refer to Part 2 → Chapter 5 Fraudulent conduct.
Simply put, we three COT Cases were threatened to sign an altered version of their arbitration agreement, which was different from the one the arbitrator had faxed to Graham Schorer's solicitor, William Hunt and Alan Goldberg QC. This threat was made just 36 hours after the previous two versions of the agreement were faxed separately to the two named legal practitioners.
Graham Schorer was the spokesperson for the COT (Casualties of Telstra) group, who had been representing me for six months before my arbitration agreement was signed. During this time, I was struggling with mental health issues caused by my experiences in China. These issues surfaced after I received documents under the Freedom of Information Act (FOI) that showed Telstra had been intercepting my discussions related to China with the former Prime Minister of Australia, The Hon Malcolm Fraser.
The transcripts of the Australian Federal Police Investigation File No/1, specifically page 12, provide evidence that during my arbitration, the Australian Federal Police (AFP) discussed my business activities with me. Notably, the AFP posed 93 questions, indicating that my business operations had been monitored for at least two years before my 1994 arbitration, utilizing Telstra's telecommunications network. The continuous surveillance of my personal and professional activities by unknown parties using Telstra's network has resulted in the manifestation of severe China flashbacks. This unwarranted intrusion into my private life and business dealings is unacceptable.
As noted by the arbitrator in his written findings, I had no legal counsel leading up to or during my arbitration. On April 21, 1994, I signed my arbitration agreement, I was under the understanding it was an exact mirrored copy of the agreement Maureen Gillan, the first of the four claimants had signed on April 8, 1994, which had been and the copy that had been faxed to Mr Schorer's solicitor William Hunt and Alan Goldberg QC on April 19, 1994, which we had read and discussed throughout the previous 24 hours.
I only reluctantly agreed to one change in the agreement, which was to clause 10.2.2. I believed that only clause 10.2.2 had been removed and accepted that removal because I wanted to proceed with arbitration as quickly as possible. However, it was suicide to sign an arbitration agreement where the professionals administering the arbitration could not be sued for negligence or deliberate maleficence.
I contend that the previously stated omission disadvantaged Ann Garms, Graham Schorer, and me, as we were not apprised of the potential for reintroducing the aforementioned clauses into our existing arbitration. This constituted discrimination, as it would have permitted us to challenge the arbitration process during the designated appeal period in a fair and equitable manner. It is worth noting that the absent justice website demonstrates that I had the basis to sue both the technical arbitration consultants and the financial consultants in Chapter 1 - The collusion continues and Chapter 2 - Inaccurate and Incomplete
JOHN RUNDELL
Mr Rundell has never refuted Derek Ryan’s statement in a letter he wrote to John Pinnock (the TIO) in relation to my arbitration financial losses, which noted that: “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”, even though that statement: “… until the appeal period had expired”, reveals the true calibre of Mr Rundell’s attitude, i.e. he recognised the advantages for Telstra if the COTs were forced to wait for the appeal period to elapse before they even began to expose the t th. This sort of unethical conduct is currently being exposed in the media worldwide concerning KPMG, of which John Rundell was soon to become a partner.
The Third Damning Letter
Corruption in Arbitration
John Rundell's correspondence reveals a discernible pattern of inconsistency and lack of real detail integrity. Specifically, his letter dated 18 April 1995 wrongly stated that any technical report prepared by Lanes would be signed off and appear on the letter of DMR Inc. In his letter of 15 November 1995 to Mr Pinnock, he inaccurately declared that the billing issues were not left "open" despite subsequent confirmation to the contrary. Lastly, his letter to Mr Pinnock on 13 February 1996 acknowledged that the final report did not cover all material and working papers, in contrast to his prior assertion. These inconsistencies suggest that John Rundell was not the most appropriate Project Manager for my arbitration.
Had the arbitration liability caps in clauses 25 and 26 of my arbitration agreement not been removed, I could have sued John Rundell for negligence. No information was provided to me until after the statute of limitations period so I could use this letter and the removal of the liability clause in an appeal against Dr Hughes’ award. Mr Pinnock concealed it until 2002—outside the statute of limitations.
However, between 18 October 1995 and 4 October 1997, with the assistance of Mr John Wynack, Director of Investigations on behalf of the Commonwealth Ombudsman, I sought, under Freedom of Information (FOI Act) from Telstra, a copy of their arbitration file, which would have shown who had been involved in stopping me at all cost in proving my claims. Home Page File No/82 confirms Mr Wynack did not believe Telstra’s claim that it destroyed the file.
I also tried to access a copy of the same arbitration file held by the Telecommunications Industry Ombudsman (TIO), who, under the rules of the arbitration agreement, had to receive every single arbitration document as the administrator of the process. As the administrator of my arbitration – under law – the TIO had to retain a copy of those documents for at least six years, until 2002.
I reiterate, had the arbitration $250.000 caps liability caps in clauses 25 and 26 of my arbitration agreement not been covertly removed after the COT lawyers had voted on the unchanged clauses, I could have sued the arbitration consultants for negligence; no arbitration records were provided to me, until after the statute of limitations period had expired.
John Pinnock’s letter of 10 January 1996, in response to my request for these arbitration records, states:
“I refer to your letter of 31 December 1996 in which you seek to access to [sic] various correspondence held by the TIO concerning the Fast Track Arbitration Procedure. …
“I do not propose to provide you with copies of any documents held by this office.” (See Open Letter File No 57-C)
Ferrier Hodgson Corporate Advisory and Dr Hughes collaborated with Telstra to disregard the losses incurred by my singles club, which was my second business, as a separate business loss. Instead, the losses were only valued at the lower tariff I charged for school groups. This was unfair to my business as it caused a significant revenue loss that was not taken into account by the arbitrator. I provided detailed information about my singles club to FHCA in February 1995, but the actual working notes were removed from the report under instruction by Dr Hughes. These notes would have detailed the information about my singles club that I provided to FHCA. Unfortunately, this single club material was never returned to me after my arbitration was finalised. I would appreciate your assistance in obtaining the justice that my business deserves. Please consider visiting my website to learn more about the losses associated with my singles club patronage that were never considered by the arbitrator Open letter File No/45-E,
Single Club Losses Ignored
Corruption in Arbitration
The final FHCA financial report referred to by Derek Ryan and John Rundell only provides statistics from the school-camp bookings for valuing my losses. There is no reference to profits from the adult social club and singles-club bookings, even though they made up 47 per cent of my business and were charged more than four times the school rate. When FHCA eventually returned my claim documents, FHCA had a number of my singles club flyers, along with copies of various newspaper adverts regarding the adult weekends and copies of numerous testimonials from prospective adult patrons explaining their frustration at not being able to contact my venue by phone to make bookings. However, the more detailed calculation of the type of revenue earned from these single club weekends was not among the returned information.
On page seven of its final, 3 May 1995, financial-evaluation report, which both Telstra and I received, FHCA states:
“An analysis of the clientele of CBHC [Cape Bridgewater Holiday Camp] shows that only 53% were in fact schools.” (See Open Letter File No 57-A to 57-D)
There is an enormous difference between $30.82 for a two-night stay for school groups and $120.00 to $165.00 for a two-night stay for social club patrons. Knowingly downgrading my losses by a large percentage is verging on fraudulent, criminal conduct.
The potential Over Forties Single Club patrons’ testimonials are also referred to in the AUSTEL report of 3 March 1994:
“As Mr Smith points out, the RVA message had the potential to severely damage his business. An important point in relation to the possible financial impact of the RVA message on the Cape Bridgewater Holiday Camp service is the camp’s dependence on group bookings. In June 1992 the camp tariffs ranged from $1500 to $6000 per week, so the loss of even one booking because of the RVA problem could mean a substantial financial loss.” (See p33, point 85, Open Letter File No/6)
I also demonstrated to AUSTEL when their representatives visited my venue that singles club customers would regularly buy souvenirs before they left: purchasing printed Cape Bridgewater t-shirts, sweatshirts, postcards, headscarves and crafted driftwood plant arrangements. Schoolchildren didn’t have that sort of money and typically only bought postcards. FHCA ignored all the income I lost from lost singles-club bookings, i.e., the profit I made on the souvenirs as well as the $120 to $165 tariff per person for these customers.
John Rundell’s statement to Derek Ryan Open letter File No/45-E) that “FHCA had excluded a large amount of information from their final report at the request of the arbitrator” ties in with the excluded single club material, and my Echo tourism venture losses, which I provided, under confidentiality, to FHCA in February 1995, when it visited my busi ess. The submission of this singles club evidence into arbitration under confidentiality is discussed on this website. What has not wildly been discussed is it took six years after John Rundell made this statement that (Open letter File No/45-E) came to light.
Financial Claim Material not Assessed
Corruption in Arbitration
It is absolutely unacceptable that John Rundell provided an incomplete financial report to the arbitration process for my official arbitration response. His admittance to John Pinnock, the second officially appointed administrator to the arbitration that the report was incomplete, is nothing short of fraudulent. This rendered the whole arbitration process unjust, and had I been, we would not stand for it. Furthermore, it has been suggested that Derek Ryan, my financial accountant, was also informed of this fraudulent act by Rundell. Ryan claims to have removed a significant portion of the financial report under the arbitrator's direction, making it incomplete. This serious breach of trust should have been resolved in 1996 when John Rundell alerted John Pinnock about what he had done.
Despite his involvement in this deceitful conduct, John Rundell continues to operate an arbitration business with offices in Melbourne and Hong Kong. It is unacceptable that he is an Australian passport holder and a permanent resident of Hong Kong while operating in this dishonest manner. Additionally, he is on the HK International Centre mediation panel, which raises serious concerns about their standards.
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