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Chapter Two - Inaccurate and Incomplete

Absent Justice - The Godfather

On the 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)

During the COT arbitrations, when the TIO himself, and other TIO officials, threatened the first four COT claimants 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, 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.

As small businesses, none of us could afford to even think about entering into what was sure to be a drawn-out and expensive legal process with a government-owned corporation with a bottomless public purse available to fund their defence and so we were forced to agree to exonerate FHCA from all liability.  This meant, of course, that we could never sue FHCA for negligence in connection to our arbitrations. Then, when those arbitrations began, it was like being caught at the wrong end of a shooting range for the COTs because FHCA were also, secretly, appointed to decide which discovery documents the arbitrator would see and which would be concealed from assessment altogether.

So, as we follow what is now being uncovered at the Banking Royal Commission, with a number of financial organisations being exposed for corrupt and unlawful conduct, we COTs can’t help but link that directly to our experiences when we attempted to expose FHCA’s so-similar conduct during our arbitrations, when their assessment of our financial situations so-clearly minimized Telstra’s liability, but no-one in government would investigate how this deplorable situation was allowed to continue.

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 truth.  It is this sort of gutless behaviour that is currently being revealed, in 2018, courtesy of a Royal Commission Enquiry into Australia’s big banks.

Australian Securities Commission

Please view exhibits  Open letter File No/45-A to 45-I. Compare those exhibits with Open letter File No/46-A to 46-L to File No/47-A to 47-D, then compare those exhibits with Chapters One to Three in our Prologuepage. Anthony Hodgson, the chair of Ferrier Hodgson Corporate Advisory (the arbitration financial resource unit), wrote to Alan Cameron, chair of the Australian Securities Commission (see Open letter File No/45-I), on 17 March 1998, and advised that I was wrong: ALL of my claim documents were addressed during my arbitration. The exhibits aforementioned above show this was clearly misleading and deceptive conduct by Mr Hodgson. If he wrote on advice he received within his own corporation, then his own company members and partners within profoundly misled and deceived him.

Had the Australian Securities Commission not been misled and deceived in March 1998, less than three years after my arbitration concluded, and instead made a finding that my claims were justified, as the attached exhibits on show, then I could have challenged at least one of the sections in the arbitrator’s award, as 1998 was well within the statute of limitations time-frame allowed.

The Third Damning Letter 

This letter dated 13 February 1996, from Mr Rundell to Mr Pinnock (see point 2 above) was written in response to Mr Ryan’s allegation. Mr Rundell states, “I did advise Mr Ryan the final report did not cover all material and working papers.” (See Open letter File No/45-E). But instead of Mr Pinnock providing this letter to me, within the statute of limitations period so I could use it 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 FOI, from Telstra a copy of their arbitration file on my matters. Home Page File No/82 confirms Mr Wynack did not believe Telstra’s claim that it destroyed the file. I also tried to access a copy of the same arbitration file held by the TIO office, which, as the administrator of my arbitration – under law – had to retain a copy for at least six years: until 2002. Mr Pinnock’s letter, of 10 January 1997, in response to my request, states:

“I refer to your letter of 31 December 1996 in which you seek to access to [sic] various correspondence held by the TIO concerning the Fast Track Arbitration Procedure. …

“I do not propose to provide you with copies of any documents held by this office.” (See Open Letter File No 57-C)

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

Single Club Losses Ignored

Absent Justice - Prologue Singles Club
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, at all, 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. I discovered, 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. But, the more detailed calculation of the type of revenue earned from these single club weekends were not amongst that returned information.

On page seven of its final, 3 May 1995, financial-evaluation report, which both Telstra and I received, FHCA state:

“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 was also able to demonstrate 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 (see 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 business. The submitting of this singles club evidence into arbitration under confidentiality is discussed in this website.

The arbitration project manager, who we were forced to exonerate from all liability in connection with our arbitrations, allowed an ex-Telstra employee from Lane Telecommunications to prepare the majority of the technical findings, despite the four claimants being promised someone from DMR Group Inc (Canada) would be the principal consultant. This is damning enough but, in my case, this same exonerated arbitration project manager also advised the TIO the billing issues were not left open, when DMR and Lane did leave them “open” and didn’t investigate the fault cause of those billing problems (see Arbitrator Chapters Thirteen and Fourteen also discussed on this website and Introduction File No 1-B). The project manager advised, in his 15 November 1995 letter (Introduction File No 1-A), the reason these billing faults were not investigated was because “this matter was current at a late stage (April 1995) of the Arbitration process”.

However, the project manager knew I submitted these billing claim documents on 27 January 1994 (see Open letter File No/46-A) and was aware the government communications regulator demanded advice from the arbitrator, on 8 December 1994 (Open letter File No/46-I), as to whether I raised these billing issues as a claim. Evidence confirms Dr Hughes did not respond to the regulator on this matter. Further confirmation, in Open letter File No/46-J, confirms Telstra also discussed these billing issues with Dr Hughes, on 16 December 1994. Pages 91 to 94 in the transcripts of my oral arbitration hearing of 11 October 1994 (see Open letter File No/45-B) confirm I discussed these same billing claim documents at great length with Dr Hughes. I state, on page 93 and after I used Telstra’s own call analysis data for a 10-second call, “…I was charged for 4 minutes and 15 seconds”. Dr Hughes then states, “I don’t think we need any further examples.” John Rundell attended this five-hour meeting. Had Mr Pinnock been told the truth all those years ago, i.e., that NONE of my billing claim documents were addressed (through NO FAULT of my own), Mr Pinnock could have asked the arbitrator to reopen this part of my claim.

It is clear from the existing exhibits on this website that what we are stating here has already been shown to be correct and that the proposed Echo Tourism venture which was all part of my losses associated with the now proven ongoing phone problems was not assessed at all.

Prologue Evidence File No/16: is an appraisal of the same Australian All Eco Tourism venture, originally planned to begin in 1992/93. Because of my still-ongoing telephone problems, the venture had to be put on hold until Telstra could guarantee the Cape Bridgewater Holiday Camp had a reliable phone service. Cleaner Production Australia, who provided this appraisal, and Robert Palmer (an education consultant and the project manager referred to throughout this appraisal) both wrote about the ongoing problems they experienced whenever they attempted to contact the holiday camp by phone, between 1991 and at least July 1998, three years after my arbitration process was supposed to have fixed the phone problems.

This appraisal also describes the planned arrangements to set up the environment project and how it was finally halted completely in 1998, as the problems with the phone service were still causing serious problems for my business. The Hon David Hawker MP and numerous other government officials are all aware of my continued complaints that the arbitration process did not fix my phone and faxing problems at all. In February 1995, I provided a list of the interested parties wanting to be included in my proposed venture along with Robert Palmer, Education consultant who was to manage the project itself had also done his homework. The aforementioned list (chart) showing BP Australia, Greyhound Bus Lines (Australia), Sanitarium Foods, Grundy National Television Group and Portland Aluminium had all agreed to fund a project, based around my holiday camp, designed to bring international students from Japan to Australia. As part of that sponsorship programme, Portland Aluminium even agreed to move two portable buildings from their Portland ‘village’ to my holiday campsite. Those buildings would accommodate approximately 80 people altogether and would include toilets and showers: assistance that would save me many thousands of dollars over the 10-year period of the planned project. The Shire of Glenelg also met with me on two separate occasions to see how best we could include them, as part of the project.

John Rundell’s statement (see above) to Derek Ryan (see 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 business. The submitting of this singles club and echo tourism evidence into arbitration under confidentiality has never been transparently investigated (see Cape Bridgewater Eco-Tourism Venture).

I again state:- the fact that the Australian Federal Police officially warned me I could not expose my Singles Club material during my arbitration as I had done with my other claim documents until their investigations into Telstra’s authorization into Telstra’s interception of my telephone conversations and faxes was NEVER taken into consideration by FHCA or the arbitrator when their assessment of my financial losses was handed down.

Most important commentary 

On the advice of Constable Melanie Cochrane and Superintendent Detective Jeff Penrose, in February 1994, I deferred from providing the then-assessor Dr Gordon Hughes (who later became the arbitrator) with confidential personal information, i.e., name and addresses of the members of my singles club or visitors to my holiday camp and convention centre. At this time, the AFP was investigating how Telstra employees had gained knowledge of singles-club patrons’ identities and recorded them in Telstra memos, which I received under my December 1993 FOI release. I abided by this official AFP advice and later asked the arbitrator if my singles-club information could be provided to him only, and not Telstra, while they were under AFP investigation. This led the arbitrator to rule that my singles-club evidence was irrelevant, even though 47 per cent of the holiday camp and convention centre’s revenue was derived from my singles and social club patrons (see above). That revenue was the equivalent of bringing in 300 per cent more than the school tariff.

When the TIO and arbitrator continued to arbitrate on my matters while the AFP was also investigating how the defendants (Telstra) gained private information about my clients, they were directly responsible for devaluing my arbitration claim by more than 300 per cent. That part of my arbitration should have been put on hold until after the AFP made an official finding.

When I referred this matter to AUSTEL’s John McMahon, general manager of consumer affairs, and advised him of the AFP’s advice, he stated it was out of AUSTEL’s jurisdiction now that it was under arbitration and that as the AFP was investigating these same matters, under direction from the Minister for Communications, I had a civil duty to assist the AFP.

My arbitration claim was caught in the middle of two investigations: one by the AFP and the other by the arbitrator, and there was no one willing to defer my singles-club revenue issues until after the AFP concluded its investigations. That side of my business revenue was NEVER investigated, even though these losses were due to:

  1. Incoming 1800 calls being diverted away from my business to a still-unknown location;
  2. The 1800 billing faults and lock-up faults, which continued to affect my business revenue for more than two years after my arbitration concluded;
  3. The 47 per cent of my singles and social club revenue, which was never assessed by the arbitrator as the above segment shows, because I was advised I could not submit this part of my claim until after the AFP concluded its investigation.

The Fourth Damning Letter 

Dr Hughes wrote to the TIO on 23 January 1996, noting:

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

(a) the cost of responding to the allegations;

(b) the implications to the arbitration procedure if I make a full and frank disclosure of the facts to Mr James.”. (See Open letter File No/45-D)

Absent Justice - Prologue

It is confirmed from Chapter Three in our Prologue page (see below) that not only were these 24,000 documents not viewed by Dr Hughes and his resource unit it was he who refused me the extra time I had requested to submit two reports (into arbitration) which I had collated from these late received 24,000 FOI documents aware because they actually were supposed to have been freighted to Brisbane airport instead of the Portland airport 1,200 miles in the wrong direction (as we have stated below). Dr Hughes lies to Laurie James cost me dearly and continues to cost me dearly until these lies are investigated.

Had Dr Hughes sidestepped John Pinnock, and instead made full disclosure of the true facts surrounding my claims, the matters I am discussing on would have been addressed in 1996. By reading all of Open Letter File No/51-A to 51-G and Chapters One to Four in our Prologue page, you can decide for yourself who is telling the truth concerning these late-released 24,000 alleged-read documents.

Because the poor timeframes in the arbitration agreement did not allow for the late submission of information, such as my singles club material, Dr Hughes granted the remaining three COT cases, Ann Garms, Maureen Gillan and Graham Schorer, more that 13 months longer than he allowed me, in which to submit late-received material. Why didn’t Dr Hughes advise Laurie James of this? All four of us signed the same arbitration agreement in April 1994.

Australian Federal Police Investigations and Chapters One to Five in this Prologue page provide more detail regarding the privacy issues regarding the names, addresses and phone numbers of my over-40s singles club members. I was officially advised by the AFP to NOT provide the arbitrator and Telstra with these details while Telstra was still being investigated for unauthorised interception of my telephone conversations. These interceptions included incidences where female members’ personal data was recorded: Telstra could have only obtained this information by intercepting my telephone conversations or faxes. Telstra’s admission to the AFP about this unauthorised monitoring is recorded in our Australian Federal Police Investigations page.

What is so important concerning the two mini-reports I had compiled from these non-submitted 24,000 documents which Dr Hughes would not allow me to submit into arbitration (see Chapter 3 Home / Prologue) is when Dr Hughes submitted his final findings in his award at 2.1 d he notes:

"...I considered it essential that both parties had every reasonable opportunity to place relevant material before me, regardless of the time frame set out in the arbitration" 

If this was true, then why did Dr Hughes refuse to allow me the extra time on 4 and 5 May 1995, to submit these two mini-submissions" (see  (see Chapter 3 Home / Prologue) below.

The Fifth Damning Letter 

This letter from Dr Hughes to the TIO on 15 February 1996 appears to be inciting (instigating) Mr Pinnock to commit a wrongful act of writing an untruth to Laurie James:

“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.” (See Arbitrator File No/43)

If Dr Hughes had conducted my arbitration in accordance with the ambit of the arbitration procedures, why would he seek confirmation from the TIO?

Introduction File No 1-E confirms John Rundell advised the TIO, on 13 February 1996, the arbitration financial report, addressing my losses and which he was responsible for ensuring was factual in every detail, was not a complete report when submitted into arbitration for response by both Telstra and my financial adviser. In his same letter, the project manager states, “You should be aware that the Brighton CIB to interview Mr Smith in relation to criminal damage to my property…” When I read this comment, six years after it was written, I contacted the Brighton CIB (Victoria Police) who said they never intended to interview me regarding this matter and, in fact, they had no record of me being a suspect in any criminal matter at all.

When I explained to Mr Alan Cameron, the Chair of the Australian Securities Commission, that I had not only lost the Holiday Camp business as a direct result of the arbitrator only allowing his resource unit access to 11% of the claim material I had submitted or, at the very least, that the arbitrator had only allowed the resource unit to value 11% of my claim material Mr Cameron was most concerned.  And he was even more seriously concerned when he learnt that NONE on my Over 40s Singles Club material (which made up part of my second business) had been assessed either, not by the arbitrator and not by Ferrier Hodgson Corporate Advisory (the financial arbitration unit).  Then, on 17 March 1998, A. G Hodgson, the Chair of Ferrier Hodgson Corporate Advisory, wrote to Mr Cameron, claiming that DMR & Lane (the technical resource unit) did address all of the claim documents I had submitted to the Arbitrator, even though it is perfectly clear from Prologue/Chapters One and Two that NONE of my billing claim documents or my Singles Club losses was taken into consideration at all when the arbitrator put together his final findings.

So not only did the COT Cases have Telstra (the defendants) to deal with, as they struggled to submit their claim material in full, they also had an arbitrator and a technical resource unit to contend with, along with the Chair of Ferrier Hodgson, who was even prepared to provide the Chair of the Australian Securities Commission with false information about the way the COT claims had been valued.

Even though I was almost in tears of frustration once I realised that I was being forced to deal with threats from Telstra in relation to what I had uncovered about faxes that never arrived at the arbitrator’s office, and even though it was clear that Telstra had most likely decided on those threats because of the assistance I had provided to the AFP, still my valid claims were simply dismissed by both Dr Hughes and the TIO (Warwick Smith).

The submission of this technical report, still incomplete, is deception on a very wide scale, involving some very prominent Australian identities, all of whom should have known better than to go along with this level of deceit in the first place, let alone remain involved in this deception for another 20 plus years. I first raised these two conflicting technical report issues with the TIO in August 1995, when the arbitrator’s secretary inadvertently provided them to me.

Had Dr Hughes allowed his technical consultants the extra time they officially advised him was required to correctly investigate my ongoing billing problems, any faults they found would have to be addressed before the arbitrator brought down a final award. Because no one investigated these ongoing faults during my arbitration, these faults were still apparent and I advised AUSTEL of this.

AUSTEL visited my business on 19 December 1995, seven months after my arbitration, and Mr Kearney took away with him all five bound billing volumes of evidence for assessment. His 26 February 1996 report, provided back to AUSTEL, used the very arbitration documents that Dr Hughes would not allow DMR and Lane to assess. This mini-report shows that had Dr Hughes allowed DMR and Lane to investigate the evidence Darren Kearney later investigated then Dr Hughes’ findings would have been completely different.

The real truth about the arbitrator and his technical consultants and how their decisions affected me and my partner is firmly embedded in these two conflicting reports.

Despite this revelation and documented proof that my business losses were downgraded in order to minimise Telstra’s liability, no one has been brought to account for this unlawful omission of evidence and the downgrading of my claim.

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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.


Quote Icon

“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

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

The Hon David Hawker MP

“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

“…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

“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

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

– Edmund Burke