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Chapter Three - Conflict of Interest

PLEASE NOTE as of July 2021, the following Conflict of Evidence Chapter 3 is still in draft format.

Absent Justice - Conflict of Interest

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

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

What has been decidedly the hardest decision for me to make since I began telling the COT storey is exposing the conflict-of-interest issue between Graham Schorer (Golden Messenger) and Dr Gordon Hughes. For Telstra (the defendants in those four arbitrations) to have allowed this the conflict-of-interest issue with existing before the four complainants signed the arbitration agreement in April 1994 suggests that Telstra saw an advantage to their defence by allowing it. I only uncovered this conflict-of-interest issue in 2008, after Graham Schorer asked me in August 2006 to write several reports concerning the COT story. 

After I had exposed to Graham/Golden how his conflict-of-interest with the arbitrator had benefitted him and not the other COT Cases and that this conduct by Dr Hughes was more than questionable and had the senate knew about this conflict of interest issue at the time of their 1997 to 1999 (Freedom of Information) investigations, this would have been enough for the senate to instigate a full-blown Senate hearing, and he wanted to the right the wrongs by submitting to the senate the reports I was writing.  This providing my reports to those senators he had met in Canberra would help him to live with what he had done. This was to be his redemption. He felt ashamed for having benefitted from his previous association with Dr Hughes, and the other COT Cases had not.

Some years into my research regarding Graham’s involvement in the COT arbitration’s I uncovered Dr Gordon Hughes had been assisting Graham/Golden in his Golden Messenger business enterprise as well as acting as his Federal court lawyer during the early part of Graham’s previous 1990 to 1993 court action against Telstra. These were the very same technical issues he was appointed by the TIO in 1994 to assess as arbitrator in all four COT claims against Telstra.

When I asked Graham to please explain why he had concealed this conflict-of-interest from me before arbitration as well as before commissioning me to write the COT story; he wrote the following document exhibit GS 565 file GS-CAV 459 to 489 as a compromise if I would continue with the project at hand.

For the second time within days, Graham again confided in me his sense of guilt for not exposing this conflict of interest during the period the Senator was investigating his Freedom of Information FOI matters which awarded him 3,600 million dollars. He felt guilty as the COT spokesperson for not having done more for the remaining (sixteen COT Cases who also had the same FOI problems with Telstra during their various litigation processes). I reiterate his paying for me to expose this whole dreadful saga was his way of righting his wrongs for not having done more as the COT spokesperson.

It is as important to look at this conflict-of-interest issue from the perspective of the other COT claimants as it is to look at it from Graham’s perspective because, as Graham’s earlier legal advisor in both his business ventures and his Federal Court Telstra matters. Because if Dr Hughes, as Graham alleges, he did know about the concealment of important documents Graham/Golden litigation against Telstra in the Federal court from 1990 to 1992, then we three COT Cases Ann Garms, Maureen Gillan and I were entitled to have been briefed on this matter. The fact that Telstra and the Establishment got away with this during a federal court action is one thing, but for Dr Hughes and/or members of the legal firm to which Dr Hughes was a senior partner appear to have also been party to this concealment brings a massive cloud over the COT four arbitration just three years later, when Telstra concealed similar documents from all of the four COT cases during their arbitration, in which Dr Hughes was the arbitrator. 

Possibly even worse for the other two COT Cases and I is that Dr Hughes allowed Graham/Golden an extra three or more years longer to access their documents from Telstra, over and above what he allowed us, three COT claimants, even though the official arbitration rules did not permit this. Dr Hughes only allowed me one extra week to access my documents from Telstra shows how this conflict of interest tainted the whole arbitration process.

Before the government communications regulator, AUSTEL (now AMA) endorsed Dr Gordon Hughes as the independent arbitrator they had a duty of care to advise the COT Cases in writing that Dr Hughes was not an experienced arbitrator and had not been graded by the Institute of Arbitrators Australia to perform such complex arbitrations as the COT four processes. AUSTEL did not. Could you inform us of this fact?

Dr Hughes himself also failed his duty of care as a pending arbitrator to COT Cases Ann Garms, Maureen Gillan, and me in writing as per the rules of the Victorian Arbitration Act that he had a conflict of interest with the fourth claimant Graham/Golden. And to add further salt to the COT Cases future wounds was that Graham Schorer, in his capacity as COT spokesperson failed to disclose to us three other COT Cases (refer to exhibit GS 565 file GS-CAV 459 to 489 that we should not send arbitration related faxes to Dr Hughes’ Melbourne office after the closing of business each day; otherwise, they may not arrive at their intended destination.

Front Page Part One File No/1 shows the arbitrator’s secretary advised Tony Watson (of Telstra’s arbitration defence unit) that on 23 May 1994, six of my claim documents did not reach the arbitrator's fax machine. Yet, I was charged on my Telstra account for those six faxes. Why was this matter not investigated? NO one from the arbitrator’s office or the TIO’s office allowed me to amend my claim so that the not received claim documents could be valued as part of my arbitration process.

Why didn’t Dr Hughes (as the arbitrator to my case) also explain to me as he did to Graham Schorer (refer to exhibit GS 565 file GS-CAV 459 to 489 that my 23 May 1994 faxed claim documents might be in his Sydney office? Did Dr Hughes believe by exposing this faxing problem with his Sydney office halt the arbitration process in my favour? Was Dr Hughes worried by exposing to me the flaws in his own two offices concerning the possibility this is where my other lost faxes ended up this admission would bring an end to him remaining the arbitrator to the COT arbitrations?

Firstly, had Graham (as the COT spokesperson disclosed to the COT Cases before, we signed our arbitration agreement, we would have been in our rights to demand Dr Hughes supply an efficient faxing system throughout our arbitrations.

Secondly, we could have used this faxing problem between Dr Hughes Melbourne and Sydney office to support any arbitration appeal in the period allowed in our arbitration agreement.

It is important to link these unaddressed lost arbitration faxes to both my case and that of Ann Garms (now deceased), because it is well written between us, lost many faxed arbitration-related documents.

Ann Garms (one of the other COT Cases) spent over $600,000.00 in her arbitration appeal in the Supreme Court of Victoria against Dr Hughes. Ann might have had a more favourable outcome of this appeal which she lost had she and her lawyers known of Dr Hughes admission to Graham Schorer before the commencement of our four arbitrations. 

Please visit our website for more stories of injustices experienced by other Australian citizens who have only ever wanted the truth to be exposed concerning their stand against the bureaucratic bubbling by the Australian justice system.

It is important that pages 14 to 31 in Graham’s manuscript are read in full because they explain Graham’s basic reasons for claiming that his Telstra Flexitel matter is still unresolved, even though he did ‘blindly’ accept a deed of release from the Telstra Corporation in April 1999, thereby ‘agreeing’ that all outstanding claims against Telstra had been resolved.  Unfortunately, this meant that the arbitration agreement signed by Graham and Telstra did not allow the arbitrator to assess those Flexitel issues, because they were matters that had been part of Graham’s previous Federal Court action against Telstra in 1990, and Graham had accepted a settlement in relation to that case. At that time though, Graham was not aware that the Australian Government Solicitor had already found and documented how Telstra had misled and deceived Graham over a number of years. Could this be one of the reasons for Telstra not allowing the Flexitel issue to be reopened, even though the other three COT claimants were allowed to reopen earlier issues (see  AUSTEL’s April 1994 final report), or was it because the arbitrator, Dr Gordon Hughes, had been one of Graham’s legal advisors for his 1990 Federal Court action against Telstra on this same Flexitel issue?

Pages 27 to 29 in our GS June 2013 report discusses a 2 November 1990 fax from Trevor Hill of Telstra’s Corporate Solicitors Office to Telstra’s Peter Gamble, regarding Telecom v Golden Messenger Federal Court Legal Proceedings, which notes, among other items:

 (5)   The Australian Government Solicitor, on behalf of Telecom, has written to the solicitors acting for Golden Messenger seeking their undertaking not to disclose to their client or others the contents of the report on the North Melb Exchange. To date, there has been no response. (Exhibit GS 448-A file GS-CAV 448 to 456):

Absent Justice - Conflict of interest issues are complex matters

Directly below this entry the report then discusses an internal Telstra minute dated 7 November 1990 that Telstra’s Peter Gamble, Manager, Business Network Planning, sent to Mr F Jones, Executive General Manager, Telecom Business Services (FOI Folio 001801), noting that:

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

These two documents, together with the Author’s Comment (4) on pages 27 to 28 of our GS June 2013 report, show that, regardless of whether or not Graham’s solicitors, Landers & Rogers, received a copy of the North Melbourne Telephone Exchange report during Graham’s early Federal Court action, Graham is adamant that HE did NOT see a copy of the letter from the Australian Government Solicitor (AGS) that is referred to in these faxes.

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

“During the period that I retained Landers & Rogers, at no stage was I informed by Gordon Hughes or any other member of Landers & Rogers staff, that Telecom or the Australian Government Solicitor contacted them with information regarding the North Melbourne exchange.

“Furthermore, had I known that Gordon Hughes had concealed knowledge of such an important document from me, I would not have accepted his appointment as the arbitrator in my arbitration process”. Exhibit GS 565 file GS-CAV 459 to 489

This AGS letter is important because, when Dr Gordon Hughes was appointed as the official arbitrator to the COT arbitrations, he did not declare his conflict of interest in relation to Graham’s previous Federal Court action against Telstra.

It is as important to look at this conflict of interest issue from the perspective of the other COT claimants as it is to look at it from Graham’s perspective because, as Graham’s earlier legal advisor in both his business endeavours and his Federal Court / Telstra matters, Dr Hughes knew about the various discovery documents that Landers & Rogers did receive from the AGS after 24 July 1990, just as he knew about the incorrectly installed, faulty Flexitel telephone equipment at Graham’s business premises.  Dr Hughes may possibly have thought he was helping Graham when he allowed an extra two (and, in one case, three) years for Graham to prepare his submission to arbitration, over and above what he allowed the other COT claimants, even though this extra time was not permitted in the official arbitration rules. In other words, it appears as though Dr Hughes actually allowed his own integrity to be compromised, which therefore left him a sitting duck, so to speak, because Telstra may well have then used this conflict of interest to their own advantage so that, in the end, Dr Hughes lost control not just over Grahams’ arbitration but overall the other COT arbitrations as well.

John Pinnock (TIO) later confirmed, however, in his address to a Senate Estimates Committee on 26 September 1997 exhibit GS 490 file GS-CAV 490 to 521, that this was certainly NOT the case noting:

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

The questions arising out of this official statement are:

Could it be that one of the reasons that Telstra accepted Dr Hughes’ previous association with Graham’s Telstra Federal Court action without raising it as a problem in relation to his appointment as COT arbitrator, was because they knew that this AGS letter had never surfaced after it was first sent to Landers & Rogers and so they, therefore, knew it had to have been deliberately concealed from Graham during his Federal Court proceedings?

AUSTEL’s COT Covert Findings

No report can be used as evidence in any court of law or arbitration unless it is properly backed by relevant supporting documents and all other necessary information.  If that can be done, then justice will be done.  It is now quite clear however that justice was NOT done in Graham’s case because, as the following points explain, AUSTEL’s March 1994 Golden Messenger report exhibits GS 450 and GS 453 File GS-CAV 448 to 456) proves that AUSTEL’s investigation into Graham’s complaints reached the conclusion that Telstra had knowingly misled and deceived him over the whole period of his claim but, even though they were the official decision-makers when investigating Graham’s case, AUSTEL still concealed their findings from the relevant Minister (the Hon Michael Lee MP) and the arbitrator throughout the whole of Graham’s arbitration.

Page 14 – In AUSTEL’s further draft findings on Golden Messenger (Exhibit GS 453 File GS-CAV 448 to 456):

“Telecom have maintained the position that network service was within acceptable standards despite having considerable information, obtained from internal investigations, that major problems did exist with the network and that these problems did impact  on the level of service provided to the customer”.

Page 23 – In AUSTEL’s further draft findings on Golden Messenger (Exhibit GS 453):

“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 GS 450 and GS 453 file GS-CAV 448 to 458) 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 (which AUSTEL had previously used to arrive at their findings) were being withheld from Graham. In other words, if AUSTEL had provided their adverse findings against Telstra (see Exhibit GS 450 and 453 in File GS-CAV 448 to 456) 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 AUSTEL had already proved

Exhibit (GS 462) is a copy of a transcript dated 27 October 1994 that has been sent by John Wynack, Director of Investigations for the Commonwealth Ombudsman, to AUSTEL’s John MacMahon (see page 7 in that transcript).  This transcript acknowledges that AUSTEL’s Bruce Mathews advised Mr Wynack, under oath, that AUSTEL provided Telstra with copy of AUSTEL’s March 1994 draft findings from their COT investigations. Since Graham didn’t sign his arbitration agreement until 21 April 1994, AUSTEL had plenty of time to provide him with a copy of that same draft document, which consisted of two separate reports Exhibits GS 450 and GS 453 file GS-CAV 448 to 458), which clearly details how Graham was misled and deceived over the full period of his claims.  This, therefore, provides the basis for good argument that AUSTEL breached their Statutory Obligation to Graham because it is obvious that, if Graham had received a copy of AUSTEL’s true findings, Graham would have immediately asked the Committee to investigate the matter because of the evidence that had been uncovered by AUSTEL.

A letter dated 28 October 1993, from Senator Richard Alston to Robin Davey, AUSTEL’s Chairman exhibit GS 466 file GS-CAV 459 to 489), notes:

“the opposition would reserve the right to consider the establishment of a Senate Select Committee if AUSTEL’s report raised matters of serious concern regarding outstanding problems or if there is evidence to substantiate the persistent complaints made by COT Case members, particularly Mr Schorer, of “misleading and deceptive conduct” on the part of Telecom”.  

After this 28 October 1993 letter was written, and under pressure from the Senate Estimates Committee, AUSTEL facilitated a new settlement process called the Fast Track Settlement  Proposal (FTSP) for the first four COT claimants, including Graham.

On 29 October 1993 however, Jim Holmes, Telstra’s Corporate Secretary, wrote to Graham, warning him that he was not allowed to raise the matter of the Flexitel System as part of his FTSP because he had already accepted a payment through the court, in relation to the Flexitel issue.  As shown above, when Graham agreed to accept this payment, which amounted to less than 10% of his actual losses at the time, he was not aware that the Australian Government Solicitor had advised Telstra (page 23 in AUSTEL’s adverse findings, GS 453) that:

“Golden Messenger is likely to be successful in establishing that Telecom engaged in misleading and deceptive conduct contrary to the Trade Practices Act and that the consequences 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 (GS 3, 4, 5, 6 and GS 10 file Exhibit GS 43 file GS-CAV 1 to 88) confirm that, by November 1986, both the Telstra Corporation and Philips (Australia) knew there were many deficiencies in the Flexitel Commander System.

On 18 July 1987 however, Telstra installed a new Flexitel Commander System at Golden Messenger, at a cost of $40,270.00 (GS 12).

On 18 November 1987 Mr P Nicolopoulos, for Telstra’s Chief General Manager, wrote to Mr Ron Jones, Philips Communications, Moorebank NSW stating:

“Further to our discussion, Telecom now requires your assistance in paying prizes for the sales competition for Flexitel.

The prizes being offered are gift vouches from Myers stores (also redeemable at Grace Bros, and Bone Bros.) or Safeway Stores (also redeemable at Woolworths and Big W). We expect the value of prizes to be approximately $30,000 over the next 12 months. …

The first payment, required immediately, is to the value of $1800 to be paid to Mr Stephen Johnson. Mr Johnson has selected vouches from Myers (Grace Bros) as his prize.

Please advise me when these vouchers will be available” (GS 15).

Correspondence dated 20 November 1986 (GS 4, above); 6 January 1987 (GS 5); 9 January 1987 (GS 6) and 10 April 1987 (GS 10) all prove that the Telstra Corporation and Philips Australia (the manufactures of the Flexitel system) were both aware of a number of serious deficiencies in the Flexitel system.

The letter dated 18 November 1987 (GS 15), proves that both companies were then busily promoting the Flexitel system, even though they had known about the many deficiencies with that system for more than a year. In other words, both Telstra and Philips were willing to promote this faulty equipment to Graham, and to other businesses who, like Golden Messenger, would therefore suffer the consequences of purchasing the promoted, faulty Flexitel system for many years to come. These businesses not only suffered the loss of a single call from a particular client, when that client was unable to get through to make a booking, they also lost all the repeat business that might have materialized as a result of that first contact.

According to Section 52 of the Australian Trade Practices Act under Part V – Consumer Protection Division 1 – Unfair Practices – Misleading or deceptive conduct

In relation to AUSTEL (now the ACMA) concealing their knowledge from Graham and the Minister that Graham had a valid claim against Telstra under Trade Practices Act 1974, suggests that the government regulator Commonwealth should treat this misleading and deceptive conduct towards Graham as a matter of some concern. In simple terms, the government regulator breached their statutory obligation to Graham, by concealing their knowledge of that Telstra had in-deed misled and deceived Graham’s under the Trade Practices Act.  

Exhibits GS 450 and GS 453 file GS-CAV 448 to 458) 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 (which AUSTEL had previously used to arrive at their findings) were being withheld from Graham. In other words, if AUSTEL had provided their adverse findings against Telstra (GS 450 and 453) 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 AUSTEL had already proved.

Exhibit GS 462 file GS-CAV 459 to 489 is a copy of a transcript dated 27 October 1994 that has been sent by John Wynack, Director of Investigations for the Commonwealth Ombudsman, to AUSTEL’s John MacMahon (see page 7 in that transcript).  This transcript acknowledges that AUSTEL’s Bruce Mathews advised Mr Wynack, under oath, that AUSTEL provided Telstra with a copy of AUSTEL’s March 1994 secret findings from their COT investigations. Since Graham didn’t sign his arbitration agreement until 21 April 1994, AUSTEL had plenty of time to provide him with a copy of that same draft document, which consisted of two separate reports (GS 450 and GS 453), which clearly details how Graham was misled and deceived over the full period of his claims.  This, therefore, provides the basis for good argument that AUSTEL breached their Statutory Obligation to Graham by concealing these more adverse findings against Telstra in their public April 1994 AUSTEL’s COT Cases report.

It is clear from Telstra FOI folio C04550 (seeGS-Conflict of interest 1-to 5) that the Australian Government Solicitor was writing to Graham Schorer’s legal team during his previous Telstra Federal Court Action between, 1990 and 1992.  Our conflict of interest page GS-Conflict of interest 1-to 5 confirms Mr Gordon Hughes and Michael Champion from Landers & Rogers (Mr Schorer’s solicitors) jointly received a letter from Mr Michael Shand Barrister confirming that Dr Gordon Hughes was heavily involved in Mr Schorer’s Telstra Federal Court action prior to him accepting his role as the COT cases Assessor land then later their arbitrator.

It was decidedly alarming to be presented with threats like this part-way through a Federal Court action and to say that Graham was completely devastated is an understatement but to also discover that an important letter that included vital information regarding this North Melbourne Exchange issue had been withheld from him by his own legal team during this Court action was absolutely shattering.

Graham’s AGS letter and the way it was hidden from him is important in relation to Alan’s story though because it is not only directly linked to the failure of Graham’s earlier Federal Court action against Telstra, but because it is also linked to the failure of Graham’s Fast Track Arbitration Procedure (FTAP) two years later, and because Dr Hughes also withheld similar reports and FOI documents from Alan during his FTAP.  The thing that Alan has never understood is, though, since Telstra had to have known that Dr Hughes had helped with Graham’s defence in the 1992 Federal Court action, why then did they accept his appointment as arbitrator for the COT arbitrations when they knew that his previous involvement with Graham meant that he had a serious conflict of interest?  Graham is absolutely adamant that he never saw this threatening AGS letter which clearly means that it was deliberately concealed from him by his own legal team, a team that included Dr Hughes, and Telstra must have known about that decision.  Could this be why they did not expose Dr Hughes’ conflict of interests as soon as he was proposed as the official arbitrator?  Could it be that someone connected to Telstra, someone interested in helping Telstra to come out on top at the end of the COT arbitrations, could see a way to use that secret conflict of interest to benefit Telstra and destroy the COTs claims?

Directly below this entry the report then discusses an internal Telstra minute dated 7 November 1990 that Telstra’s Peter Gamble, Manager, Business Network Planning, sent to Mr F Jones, Executive General Manager, Telecom Business Services (FOI Folio 001801), noting that:

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

These two documents, together with the Author’s Comment below show that, regardless of whether or not Graham’s solicitors, Landers & Rogers, received a copy of the North Melbourne Telephone Exchange report during Graham’s early Federal Court action, Graham is adamant that HE did NOT see a copy of the letter from the Australian Government Solicitor (AGS) that is referred to in these faxes.

This AGS letter is important because, when Dr Gordon Hughes was appointed as the official arbitrator to the COT arbitrations, he did not declare his conflict of interest in relation to Graham’s previous Federal Court action against Telstra.

It is as important to look at this conflict of interest issue from the perspective of the other COT claimants as it is to look at it from Graham’s perspective because, as Graham’s earlier legal advisor in both his business endeavours and his Federal Court / Telstra matters, Dr Hughes knew about the various discovery documents that Landers & Rogers did receive from the AGS after 24 July 1990, just as he knew about the incorrectly installed, faulty Flexitel telephone equipment at Graham’s business premises.

Graham and I have remained very close friends since we met in 1992, and when I uncovered this situation and asked him why he did not reveal this conflict of interest issues he wrote a statement which I later provided to the Institute of Arbitrators Mediators Australia at the request of Graham. The reason being is the possibility that because the North Melbourne Exchange AGS was never provided to Graham by Gordon Hughes while he was Graham’s Federal Court advisors maybe this is why Telstra allowed this conflict of issues to be disclosed. The fact that Dr Hughes had also concealed his knowledge from the four COT Cases it was Telstra’s arbitration agreement that was being used in the arbitration and NOT an arbitration agreement (Rules) that had been drafted independently might have also been the reason Telstra closed their eyes to Dr Hughes’ conflict of interest issues associated with Graham’s previous Telstra related Federal Court issues that we’re addressing the same issues less than four years later.

There is also another side to this conflict of interest issue. If Mr Schorer is telling the truth that he knew nothing about this government solicitors letter or that his legal team, which included Dr Hughes had been threatened that Telstra would not supply any further discovery documents unless Graham’s lawyers agreed to certain conditions then Dr Hughes should have surely acted differently to which he did when Telstra threatened me over similar withheld document issues (see page 180 Senate Evidence File No 31) dated  29 November 1994, which notes:

“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?”

After receiving a hollow response from Telstra, which the senator, the AFP and I all knew was utterly false, the senator states:

“…Why would Telecom withhold vital documents from the AFP? Also, why would Telecom penalise COT members for providing documents to the AFP which substantiate that Telecom had conducted unauthorised interceptions of COT members’ communications and subsequently dealt in the intercepted information by providing that information to Telecom’s external legal advisers and others?” (See Senate Evidence File No 31)

The rule of law cannot be brushed aside, nor covered up with the excuse that a failed arbitration process is collateral damage. The law is there to protect us all. All sixteen COT Cases as well as the five litmus tests cases should have been treated the same by the Senate working party and the government who commissioned them into investigated Telstra’s reluctance to provide discovery under the agreed FOI process.

These issues of Dr Hughes’ previously being both Mr Schorer’s business advisor as well as his adviser during Mr Schorer’s Telstra Federal Court stoush in 1990 to 1992, should have been addressed by the government when they endorsed our arbitrations. A written order for Dr Hughes to proceed as the COT arbitrator should have been sought by the government. It was not. Had I been aware that Dr Hughes had known Graham Schorer professionally the way he clearly did I would have opposed Dr Hughes’ appointment as arbitrator.

This Senate Hansard dated June 1997 (see page 5163, SENATE official Hansard – Parliament of Australia, shows Telstra employees rorted millions upon millions of dollars from Telstra shareholders: i.e., the government and Australian citizens, who then owned Telstra.

It is interesting to note here the connection to both the way various Telstra employees rorted millions upon millions of dollars from the public purse, and how the New South Wales police were investigating this very various serious matter, because Dr Hughes, the COT arbitrator, was a partner of the same law firm that helped some of the Telstra employees in New South Wales in relation to a number of different legal matters. When the COTs were signing their arbitration agreements, however, no-one ever revealed, on any level, Dr Hughes’ prior direct connections to Telstra and, as our story shows, this is not the only conflict of interest issue that plagued the COT arbitrations. While this particular conflict of interest issues might a strong argument that Dr Hughes should have alerted us COT Cases to this Telstra conflict issue, it is important we raise this issue here because it is another example where many of the COT Cases were not treated as equals by those who were soon to conduct our arbitrations. Just like the 16 remaining COT Cases which the senate and government conveniently forgot to include in the Senate working party FOI investigations. assessment process.

Dr Hughes may possibly have thought he was helping Graham when he allowed an extra two (and, in one case, three) years for Graham to prepare his submission to arbitration, over and above what he allowed the other three COT claimants, even though this extra time was not permitted in the official arbitration rules. In other words, it appears as though Dr Hughes actually allowed his own integrity to be compromised, which therefore left him a sitting duck, so to speak, because Telstra may well have then used this conflict of interest to their own advantage so that, in the end, Dr Hughes lost control not just over Grahams’ arbitration but overall the other COT arbitrations as well.

In other words, it appears as though the arbitrator actually allowed his own integrity to be compromised, which therefore left him a sitting duck, so to speak, because Telstra may well have then used this conflict of interest to their own advantage – so that, in the end, the arbitrator lost control not just over Grahams’ arbitration, but overall the other COT arbitrations as well. As shown above, in our introduction the TIO later confirmed, however, in his address to a Senate Estimates Committee on 26 September 1997 that:

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

The questions arising out of this official statement are:    

Could it be that one of the reasons that Telstra accepted this particular arbitrator’s previous association with Graham’s Telstra Federal Court action without raising it as a problem in relation to his appointment as COT arbitrator, was because they knew that this Australian Government Solicitors AGS letter had never surfaced after it was first sent to the now pending arbitrator and/or the legal firm to which he was a partner? In simple terms, this most crucial letter from the Australian Government Solicitor’s Office may well have changed the whole outcome of both Mr Schorer’s Federal Court action and his later arbitration.

We had to alterative other than to raise this conflict of interest matter 

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

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

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

I have attached the following legal paper prepared by BJORN GEHILE highlighted below as a testament (a guide) for the reader to understand the significance of what transpired during the COT arbitrations when the arbitrator did not disclose his previous association with Graham Schorer, spokesperson for the COT Cases.

22 SEP 2009

Challenging the arbitrator

BY BJÖRN GEHLE

Parties in an international arbitration should adopt due diligence when nominating the arbitrator to ensure the arbitrator is independent and impartial.

One of the most fundamental principles in international arbitration is that the arbitrator must be impartial and independent. This principle is embedded in most arbitration laws and rules, though different interpretations exist as to the exact meaning of those requirements. A question which often arises in this context is what can a party do when the impartiality or independent of an arbitrator is called into question.

The problem can be illustrated by using an example from a recent arbitration where the arbitrator (who was nominated by the respondent) disclosed that he was presently acting as co-counsel with the respondent's lawyers in an unrelated dispute.

The claimant also discovered that the arbitrator had previously acted together with the respondent's lawyers on two other occasions, a fact that was not disclosed by the arbitrator. The claimant was successful in challenging the arbitrator on the basis of his relationship with the respondent's lawyers and the arbitrator was removed from the tribunal and replaced.

Grounds upon which an arbitrator can be challenged

The possibility to challenge an arbitrator if certain requirements are met exists to protect the parties and the integrity of the arbitral process. Most leading arbitration rules contain provisions on what grounds arbitrators can be challenged as well as the procedure to be followed for such challenge (for example Article 14 of the Australian Centre for International Commercial Arbitration (ACICA) Arbitration Rules).

Arbitrators are commonly required to disclose prior to their appointment or confirmation any potential conflicts they may have. Naturally, there are different views as to what constitutes proper disclosure and what circumstances give rise to doubts as to the arbitrators' impartiality and independence.

Some common aspects an arbitrator may need to consider are, for example, the arbitrator's past or existing relationship:

·         with one or more of the parties;

·         with the parties' lawyers; and

·         with a potential witness.

However, a lack of impartiality or independence may arise from circumstances which, at the first, may appear far more remote than those mentioned above, for example:

·         the arbitrator's law firm representing (or having represented) one of the parties;

·         a family member of the arbitrator having a financial interest in the outcome of the dispute (for example as shareholder of one of the parties).

The existence and disclosure of the circumstances do not automatically disqualify the arbitrator as not being impartial or independent. Instead, the particular circumstances in each case need to be considered carefully in order to determine whether they suffice to disqualify the person from being the arbitrator in that dispute.

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

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

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

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

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

On the 30 July 2009, according to this letter, from Graham Schorer (COT spokesperson) to Paul Crowley, attached to a statutory declaration and a copy of a letter dated 4 August 1998 from Graham to me, Graham had a phone conversation with the arbitrator early in 1994 regarding lost COT faxes. During that conversation, the arbitrator explained, in some detail that

“Hunt & Hunt [The company’s] Australian Head Office of was located in Sydney and [the company] is a member of an international association of law firms. Due to overseas time zone differences, at close of business, [the company’s] Melbourne’s incoming facsimiles are night switched to automatically divert to Hunt & Hunt Sydney office where someone is always on duty. There are occasions on the opening of the Melbourne office, the person responsible for cancelling the night switching of incoming faxes from the Melbourne office to the Sydney Office has failed to cancel the automatic diversion of incoming facsimiles.”Burying The Evidence File 13-H.

On 29 November 2009, I wrote to the CEO of the IAMA regarding fresh evidence received from the office of the lawyer who represented COT spokesperson Graham Schorer in his earlier Federal court action against Telstra between 1990 and 1992. This now-deceased lawyer replaced Graham’s initial lawyer, who was appointed as the arbitrator for the first four COT arbitrations, including both Mr Schorer’s and my arbitration. The arbitrator, therefore, assessed the same documents and complaints he had previously been privy to when he was acting as Mr Schorer’s legal counsel between 1990 and 1992. This constitutes a clear case of conflict of interest. This is the same arbitrator the IAMA investigated in 2009.

Why didn’t Dr Hughes (as the arbitrator to my case) also explain to me as he did to Graham Schorer (refer to exhibit GS 565 file GS-CAV 459 to 489 that my 23 May 1994 faxed claim documents might be in his Sydney office? Did Dr Hughes believe by exposing this faxing problem with his Sydney office halt the arbitration process in my favour? Was Dr Hughes worried by exposing to me the flaws in his own two offices concerning the possibility this is where my other lost faxes ended up this admission would bring an end to him remaining the arbitrator to the COT arbitrations?

Firstly, had Graham (as the COT spokesperson disclosed to the COT Cases before, we signed our arbitration agreement, we would have been in our rights to demand Dr Hughes supply an efficient faxing system throughout our arbitrations.

Secondly, we could have used this faxing problem between Dr Hughes Melbourne and Sydney office to support any arbitration appeal in the period allowed in our arbitration agreement.

It is important to link these unaddressed lost arbitration faxes to both my case and that of Ann Garms (now deceased) because it is well written between us, lost many faxed arbitration-related documents.

During the first months of my arbitration when the Australian Federal Police was officially investigated the possibility COT Cases faxes were being intercepted had Graham Schorer or Dr Gordon Hughes alerted the AFP of the problems being experienced at the arbitrator's office when documents were faxed to their Melbourne office after the close of business each day, any investigation into these lost faxes might well, have uncovered that the arbitrators Melbourne office was not a safe haven for faxed arbitration documents because they ended up in the Sydney office.  

This diverting of faxes to Dr Hughes Sydney office was in operation at the time the Sydney office was acting on behalf of several Telstra employees, and it is possible that some of those Melbourne Telstra titled documents might have been mistakenly taken as Sydney Telstra related documents and not those diverted from Melbourne. 

Ann Garms (one of the other COT Cases) spent over $600,000.00 in her arbitration appeal in the Supreme Court of Victoria against Dr Hughes. Ann might have had a more favourable outcome of this appeal which she lost had she and her lawyers known of Dr Hughes admission to Graham Schorer before the commencement of our four arbitrations. 

 

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All of the main events as quoted in this unbelievable true crime story are supported by copies of the original freedom of Information documents linked in the text.

Clicking on these links with your cursor will automatically open a PDF of the exhibit/evidence that a crime was committed. Using this method and following the various file numbers discussed in our various pages, you will verify our story. Without those documents, most people would really struggle to believe that public officials and their lawyers committed the illegal offences they did.

Using the acquired evidence the way we have is possibly a world first.

ABSENT JUSTICE HAS IT ALL.

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“A number of people seem to be experiencing some or all of the problems which you have outlined to me. …

“I trust that your meeting tomorrow with Senators Alston and Boswell is a profitable one.”

Hon David Hawker MP

“Only I know from personal experience that your story is true, otherwise I would find it difficult to believe. I was amazed and impressed with the thorough, detailed work you have done in your efforts to find justice”

Sister Burke

“…the very large number of persons that had been forced into an arbitration process and have been obliged to settle as a result of the sheer weight that Telstra has brought to bear on them as a consequence where they have faced financial ruin if they did not settle…”

Senator Carr

“…your persistence to bring about improvements to Telecom’s country services. I regret that it was at such a high personal cost.”

Hon David Hawker

“Only I know from personal experience that your story is true, otherwise I would find it difficult to believe. I was amazed and impressed with the thorough, detailed work you have done in your efforts to find justice”

Sister Burke

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

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

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

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

Cathy Lindsey

“All that is required for evil to triumph is for good men to do nothing”

– Edmund Burke