Chapter 5 Sold out
On 17 January 1994, the Telecommunications Industry Ombudsman (TIO) distributed a media release announcing that (name deleted) would be the assessor to the four COT Fast Track Settlements processes. What the TIO did not say was that, as I had feared, Telstra was not abiding by their agreement: they were not supplying us with the discovery documents critical for establishing our cases.
Telstra was treating us with sheer contempt, and in full view of the TIO and assessor. We were beginning to believe that no single person, and no organisation, anywhere in Australia, had the courage to instigate a judicial inquiry into the way Telstra steamrolled their way over legal process.
To be fair, Austel’s chairman, Robin Davey, was expressing his anger to Telstra about their failure to supply us our necessary documents, but it was to no avail. By February 1994, Senator Ron Boswell was asking questions of Telstra in the Senate, again to no practical avail. (Questions about this failure to supply FOI documents were raised in the Senate on a number of occasions over the following years, by various Senators, whose persistence ultimately paid off for some members of COT but, unfortunately, not for me.)
Worse than this, however, was a new problem for us COT four. The assessor had somehow been persuaded (presumably by Telstra) to drop the commercial assessment process he had been engaged to conduct and adopt instead an arbitration procedure based on Telstra’s arbitration process. Such a procedure would never be ‘fast-tracked’, and was bound to become legalistic and drawn out. Telstra knew none of us had the finances to go up against its high-powered legal team in such a process. This was the last thing we COT members wanted. We had signed up for a commercial assessment and that’s what we wanted.
Graham Schorer (COT spokesperson) telephoned the TIO, to explain why the COT four were rejecting the arbitration process. Our reasons were dismissed. The TIO said he had been spending too much time on his role as administrator of our FTSP; that his office had already incurred considerable expense because of this role (Telstra was slow in reimbursing those expenses), and that his office had no intention of continuing to incur expenses on our behalf. He told Graham that if we did not agree to drop our commercial agreement with Telstra then Telstra would pull out all stops with the aim of forcing us into a position where we would have to take Telstra to court to resolve our commercial losses.
Moreover, if we did decide to take legal action in an attempt to compel Telstra to honour their original commercial assessment agreement then he (the TIO) would resign as administrator to the procedure. This action, he insisted, would have forced an end to the FTSP and left us with no alternative but to each take conventional legal action to resolve our claims.
The TIO had sold us out.
We had been imploring the TIO to let us continue with the original FTSP agreement, but our pleas fell on deaf ears. A letter dated 20 January 1994 from the Commonwealth Ombudsman to Telstra's Corporate Secretary Arbitrator Fille No/23 notes: '...I received complaints from three of the COT Cases', Mr Graham Schorer, Mr Alan Smith and Ms Ann Garms, concerning TELECOM's handling of their FOI applications under the Freedom of Information Act (FOI Act...and...In the circumstances, the giving of access to information required by the applicants to present their cases to the assessor appointed under the FTSP is in the general public interest'. A letter dated 17 February,1994 from Austel's Chairman to Telstra's Group General Manager notes: ...The thrust of the Fast Track Settlement Proposal was review and assessment' (see Arbitrator File No/23), here is further proof that our process was assessment. A pleading letter dated 14 April 1994, from COT Case Ann Garms to the TIO dated 14 April 1994, counter signed by Mr Schorer and myself clearly shows we three wanted to remain in the FTSP assessment process (Arbitrator File/22). No one would take our pleas further. We had no choice but to prepare ourselves for an arbitration process. The first step was to familiarise ourselves with the rules of arbitration.
The COT's had been told, Austel had been told, and the Senate had been told that the arbitration agreement rules had been drawn up specifically for the purpose, independently of Telstra, by the President of the Institute of Arbitrators of Australia. We asked for a copy of these rules, which had already, apparently, been supplied to the TIO’s office, but the TIO refused our request, saying that it was ‘irrelevant to our cause’ More than once we asked the TIO for a copy, to no avail. We were told we should trust the arbitrator. And so, foolishly, we did. We really had no choice. We were all exhausted, stressed and clutching at straws. Singly and as a group we were vulnerable to the mute force of Telstra’s corporate power.
The rules included a confidentiality agreement which prevented anyone involved in the arbitration process from discussing the conduct of the arbitration process. In other words, if either party committed an offence of a criminal nature, this confidentiality clause would effectively stop an investigation, thereby allowing a cover-up. In my case, even though the TIO and the arbitrator were aware Telstra had perverted the course of justice during my arbitration, this confidentiality clause has so far stopped any investigation into this unlawful conduct.
Signing for arbitration, April 1994
On 21 April 1994 when we signed the documents to launch the new arbitration procedure, we still hadn’t seen the rules of arbitration. Not only did we want to see what we were in for, we wanted to make sure that the rules really were different from Telstra’s ‘proposed rules’. Our concerns were of no interest to the TIO however and so, as lambs to the slaughter, we signed on the dotted line. Later we discovered that the set of rules that had been supplied to the TIO’s office was actually headed "Telstra Corporation- Limited 'Fast Track' Proposed Rules of Arbitration". No wonder he had not wanted us to see it. The assurance we had been given as to the drafting of the rules had been a complete lie. Was anybody interested? I don’t need to give the answer to that.
My time now was focussed on preparing my case for arbitration. In April 1994 Austel released its report on the COT cases, and I used its findings and recommendations as a basis for my claims. I thought its findings in relation to my case were a lot milder than the original submissions I had made, but I learned that Austel had apparently had to tone it down because Telstra had threatened to enforce an injunction tying the report up for years. Austel had agreed to the amendments demanded by Telstra so that we COT four could have access to information in the report for the purpose of preparing our claims. I did not know then of the ‘secret’ draft that I mentioned at the end of Chapter Three. This I did not discover until 2007.
In the meantime though, the Austel Report did confirm something for me. While I was hearing a constant refrain of ‘No fault found’ from Telstra, technicians were recording the truer picture. On occasions when I had rung to report the phone ringing once or twice, followed by no connection, officials had refused to acknowledge the fault, but in its report, Austel showed a different story:
In the period February to April 1993 Telstra staff responding to complaints lodged by Mr Smith of the Cape Bridgewater Holiday Camp recorded in their notes that there was a fault known to exist in AXE (digital) switching equipment which could give rise to a single burst of ring, followed by a busy tone to a caller and dial tone to the called party.
This was supported by quotes from technicians on the complaint forms:
‘This problem occurs intermittently throughout the network and although it is recognised as a problem there appears to be no one person or group involved in resolving it.’
‘I believe this may be tied up with the axe network problem which gives only one burst of ring and the calling party gets busy tone.’
A new fault line
Even as I began to assemble my claims, there was a new fault to include. This was the ‘hang-up’ fault. While Telstra was refusing to send me documentary evidence for my claim, I was ringing their engineers about testing this hang-up fault, creating no doubt more evidentiary material that would be denied to me.
Since August 1993 I had complained to Telstra that customers and friends alike were commenting on the peculiar behaviour of my direct line, which was also a fax line. After I had hung up from calls I had initiated they could (if they were slower to hang up) still hear me moving around the office. Because of all the other problems I was dealing with, I hadn’t paid much attention to this, but I needed now to come to grips with it.
On 26 April 1994, I phoned Cliff Matherson, a senior engineer at Austel, who suggested we carry out a series of tests. First, I was to hang up and count out loud, from one to ten, while he listened at his end. I did this; he heard me right through to the number ten and suggested we try it again, but count even further this time. Again, he could hear me right through the range I counted. Next, he suggested I remove the phone from that line and replace it with the phone connected to my other line (they were both the same Telstra phones, Exicom model T200). We repeated the test, with the same results. According to Mr Matherson (and it was also apparent to me) this proved that the fault was not in the phone itself, but somewhere in the Telstra network. His next suggestion was that I ring Telstra, which I duly did.
I explained to the Telstra engineer that I could count up to 15 or more after hanging up, and that the person at the other end could hear me. I didn’t mention that I had tested two different phones because I was well aware that Telstra had a strong inclination to blame the customer’s equipment first. I was interested to see what he would come up with first.
I performed the same tests with the Telstra engineer, with the same results, and he promised to send a technician to collect the phone the next day. An internal email in March 1994 shows that Telstra’s engineer was aware, before the phone was even tested, that heat in the Cape Bridgewater exchange was causing the fault; the email also adds to the evidence that Telstra was aware of phone faults in the exchange, even while I was preparing my claim for arbitration.
I am concerned to note that heat may be part of the problem. I had occasion earlier this year to get involved in another ‘ongoing’ case involving an RCM with a heat problem at Murrumbateman (just outside Canberra). I do note, that one of the symptoms from the Murrumbateman case was ‘Not Receiving Ring,’ something Alan Smith at Cape Bridgewater has been complaining about for some time.
When my Telstra account is compared with Telstra’s own data for this period it can be seen that the call hang-ups and incorrect charging were occurring from at least August 1993 right up until the phone was taken away on 27 April 1994. The phone itself was an Exicom, manufactured in April 1993, and later proved to be a player in one of the many sub-plots of this saga. But that story comes later.
Preparational costs
A huge bundle of discovery documents finally arrived from Telstra, in response to my FOI requests. ‘Wonderful,’ I thought, ‘now we’re getting somewhere.’ I was wrong. According to the FOI act, documents should be supplied in some sort of order, numbered, and preferably chronological. These documents had no numbering system, and were not in chronological order. Many were unreadable, with so much information blanked out that they were totally worthless. This would have driven even the most hardened lawyer to the wall with frustration. How could I support my claim with material like this?
A law student to assist would have been a God send. The mountain of documents threatened to engulf me entirely, especially knowing that Telstra’s enormous legal team stood by, waiting to pounce on every slightest crack they could manufacture in the claim documents I submitted.
I sought out the TIO and his legal counsel, explaining my lack of confidence and reiterating Robin Davey’s belief that a non-legalistic hearing was the best and fairest way for us to present our cases. The TIO could only console me with ‘Do the best you can,’ while his legal counsel assured me that the process was fair.
I decided I had no choice but to seek professional help. I began by approaching a firm of loss assessors in nearby Mt Gambier who had acted for me after some storm damage at the camp some years earlier. The assessor remembered that he had had a lot of trouble contacting me by phone and after discussing my current position decided that my problems were outside his area of expertise. I continued my search for assistance in the Melbourne metropolitan area, approaching four different companies specialising in communications. Three didn’t even respond in writing and the fourth simply wished me luck in finding someone who would be brave enough to go up against Telstra.
After this, I approached George Close in Queensland. George had technical expertise in the telecommunications area and was already working on Ann Garms’s case. He agreed to take mine on too, observing that this way, we would get more of an insight into how Telstra was operating. Once Telstra became aware that we had secured George’s services, they approached him too, with an offer of work. It would seem they were trying to close off all avenues for us. George, however, at 70 years of age, was having none of that. He replied to Telstra that it would create a conflict of interest and, bless his beautiful heart, he declined their offer.
I also needed someone to help put the whole claim together, and finally located Garry Ellicott, an ex-National Crime Authority detective with a loss assessor company, Freemans, also in Queensland. A final member of my team was Derek Ryan, a forensic accountant.
I felt cautiously optimistic. Government ministers, Austel, even the auditors, all agreed that the COT cases were right and Telstra was wrong. But we still had our backs against the wall. We were all in financial trouble and we were getting no financial assistance from anywhere. I was raising money by selling camp equipment and borrowing from friends.
When we signed on for an FTSP in November 1993, it was not for a legal arbitration. There was no allowance made for us to pay the legal professionals necessary to support our cases, and nor was such allowance made when the plan was switched on us. Had I known that professional fees would ultimately mount to over $200,000, I would never have agreed to the arbitration, even if TIO had held two guns to my head.
Under surveillance
I raised enough cash to bring Garry Ellicott to the camp for a few days in May 1994 to observe what was going on with the phones. During his stay, Garry commented that he believed I was being watched, or rather, listened in on. His background as bodyguard for US President, Jimmy Carter, during his visit to Australia, gave him some experience in this area.
I already had experienced several instances of Telstra accumulating personal information about me — details of who rang me, when they rang and from where, when staff left my business, even my movements. In April 1994, Telstra's Melbourne fault reporting officer seemed to be aware of my movements four months in advance when he wrote an internal memo to another member of staff:
Mr Alan Smith is absent from his premises from 5/8/94 – 8/8/94. On other occasions when he has been absent there have been documented complaints received (usually months later) involving NRR etc …I intend on this occasion to document his absence and file all data I can collect for the period. That way we should be prepared for anything that follows.
Telstra has never explained how this Telstra fault officer came by this information, nor how he also knew I had spoken to the former Australian Prime Minister, Mr Malcolm Fraser, on the phone, and when that conversation took place. (AS86).
This person insists I told him about this conversation but this is not true. I told him no such thing
In an internal Telstra memo around the time of the ‘briefcase saga’, the unidentified writer, a local Telstra technician, offers to supply a list of phone numbers I had rung. I had previously learned that the writer was listening in to my private conversations and, when I challenged him with this information, he informed me he was not the only technician in Portland listening in.
Federal Police investigation
In January 1994, COT members informed the Minister of Communications of our suspicions of Telstra bugging, after which things happened very quickly. The Minister ordered an investigation by the Federal Police (AFP), and on 10 February 1994 Austel wrote to the Telstra Manager in charge of the COT arbitrations:
Yesterday we were called upon by officers of the Australian Federal Police in relation to the taping of the telephone services of COT cases.
On 25 February, Senator Alston, then Shadow Minister for Communications, asked Austel’s Mr Robin Davey in the Senate Estimates Committee hearing on COT issues:
Mr Davey, Why did not Austel immediately refer COT’s allegations of voice recording to the Federal Police instead of waiting for the Minister to refer the matter to the Attorney General and then on to the Federal Police?
Be that as it may, when the AFP interviewed Austel, they were provided with documents showing that Telstra had listened in to my phone conversations.
In a letter to Telstra in February 1994, John MacMahon, General Manager, Consumer Affairs, Austel, acknowledges receipt of nine audio tapes from Telstra and notes that these tapes, which are related to the ‘taping of the telephone services of COT Cases,’ had been passed on to the AFP. No warrant was ever issued by the Federal Court for this taping, neither was a warrant issued in either of the Australian states in which the taping took place. Clearly, therefore, this taping was carried out unlawfully. Further, it was carried out during a legal resolution process involving the COT members.
Despite these investigations, no findings of Telstra’s surveillance or monitoring activities have ever been officially presented. At the time of writing, Telstra has still not been held to account, even for those which took place when Telstra was in arbitration with me. If the AFP or the government had pursued these questions, I would not still be searching for answers today.
On a number of occasions during 1994 I was interviewed by the AFP on this matter, and while they were unable to show me the documents and tapes Austel had given them, it seemed to me they were taking my problems with Telstra and my arbitration seriously. In one interview, I showed them an FOI document which conveys that the writer knew where the caller usually rang from even though, on this occasion, the caller was phoning from a different number, ‘somewhere near Adelaide’. The police were concerned about how a caller was able to be identified if he called from another number.
Constable (name deleted) of the AFP affirmed for me that Telstra had provided them with evidence of this ‘live monitoring’, which had gone on for some period of time:
… you were live monitored for a period of time. So we’re quite satisfied that, that there are other references to it.
Senator Alston also put a number of questions on notice for the Senate Estimates Committee, to be answered by Telstra. These are the questions most pertinent to the COT claimants:
5. Could you guarantee that no Parliamentarians, who have had dealings with ‘COT’ members, have had their phone conversations bugged or taped by Telstra?
9. Who authorised this taping of ‘COT’ members phone conversations and how many and which Telstra employees were involved in either the voice recordings, transcribing the recordings or analysing the tapes?
10. On what basis is Telstra denying copies of tapes to those customers which it has admitted to taping?
11. (A) How many customers has Telstra recorded as having had their phone conversations taped without knowledge or consent since 1990?
(B) Of these, how many were customers who had compensation claims, including ex-Telstra employees, against Telstra?
In all the FOI documents I have searched, I have never seen these questions answered.
Other FOI documents I presented to the Australian Federal Police show that Telstra officials were making notes on who I rang, and were keeping records including the names of other organisations, clients and friends. Even my ex-wife did not escape — her name was listed also. I kept the TIO informed of such developments, but at no point did he ever make any response on the matter.
An extraordinary intervention
At the end of March 1994 I got an extraordinary phone call. Frank Blount, Telstra’s CEO, their top man, rang me, wanting to know what I thought was the underlying cause of my telephone problems. Presumably he had taken this upon himself to find the cause of my complaints. He was understanding, respectful and courteous, and I told him I thought that both Portland and Cape Bridgewater exchanges had been suffering from congestion for years. He gave me his word that he would investigate my theory, and it turned out he was a man of his word.
‘Cape Bridgewater COT Case’, an internal Telstra email dated 6 April 1994, shows the result of his influence:
Following previous lost call analysis of the Z route between Warrnambool node and Portland AXE–R (PORX) it was decided to increment this route from 30 to 60 CCTS …
Could you please ‘fast track’ this project due to the sensitivity of the current COT case at Cape Bridgewater (off PORX).
Another, dated 7 April 1994, followed with:
At 4.55 pm on 6/4/94 I was informed by Network Ops that the route into the Portland exchange would be increased by 30%. The work was to be completed prior to midnight that day. This should alleviate any problems Mr Smith or anyone else in the area has been experiencing with congestion into the area for some time.
(In fact, an extra 30 circuits into Portland (30 to 60 CCTS) represented a 100% increase in the phone route into Portland exchange, not 30%. But either way, the increase in lines was appreciated.)
Break-ins and losses
From the sublime to the ridiculous. It was also March 1994 when Graham Schorer and another COT member suffered break-ins and lost business-related documents. That made all of us a lot more vigilant. I found no evidence of a break-in, but I did notice two diaries covering the period 1987 to 1989 were missing. I decided to remove my official business diaries from my office, and from then on I transferred information to them on a weekly basis from my wall calendar and unofficial notebooks.
During his visit, Garry Ellicott and I spent five nights trying to decipher the pile of Telstra discovery documents. It was during his visit I discovered further losses: exercise books in which I kept official booking records; a number of bank statements and my bank pay-in books for 1992/93. I cannot account for these losses. It is possible they were also missing in March, and I simply didn’t notice their absence. Without these records, I was hard pressed to produce full and correct financial statements for my forensic accountant, Derek Ryan, and was reduced to scavenging information from wall calendars and other unofficial sources. When Garry returned to Queensland I got him to take the work diaries with him for safe-keeping.
The fallout from all this became evident some weeks after my oral arbitration hearing in October 1994, when the arbitrator asked for my annual diaries for assessment. Garry sent them directly to his office. Soon after that, Telstra submitted their defence of my claims. Then, two months later, in February 1995, Telstra advised the arbitrator that they had found discrepancies in my diaries, claiming I had added entries after the date that the calls and incidences recorded had actually occurred.
I have explained over many years as to how, and why, I’d had to copy fault complaint records into the diaries from exercise books, and affirmed that nonetheless, my chronology of fault events was true and correct. I have since reminded him and the arbitration project manager that during my oral arbitration hearing I had practically begged to be allowed to submit these fault complaints notebooks (as the transcripts of this meeting show (AS74). But as the transcripts show Telstra had objected to the submission of these facts and the arbitrator had asserted, without viewing them, that they were irrelevant.
Nevertheless, when it came to his summary in relation to these diaries, the arbitrator stated:
… I have considered, and have no grounds to reject the expert evidence provided by Telecom from(name deleted), Forensic Document Examiner, who examined the claimant’s diaries and because of numerous instances of non-chronological entries, thereby causing doubt on their veracity and reliability. -- (In the award, at point 5.3)
I contend that if the arbitrator had allowed these notes taken from my exercise books as evidence, and provided them to Telstra’s Forensic Documents Examiner, the examiner would have had a clear understanding of what the exercise books really were and would have realised there was no attempt at deception. On a similar note, I suppose that some readers might be wary of accepting all I write here as truth, as I am aware that some of it seems so outlandish. The reader has only to view the various links on absentjustice.com various to understand just how far Telstra (the defendants) the TIO (the administrator of the process) and the arbitrator went, in their so far successful attempt in concealing the truth surrounding my claims of ongoing telephone and faxing problems which were still affecting the viability of my business at the time the arbitrator brought down his finding without attempting to address those on going faults.
Yet during his time as Minister for Communications in the early 1990s, Senator Kim Beazley was concerned at how Telstra’s Protective Services Unit spied on its own technicians and other employees, documenting their movements while they were on sick leave, so I do not think it unreasonable that we COT members believed we also were being spied on.
For one instance, in July 1992 I had asked Telstra for a written guarantee that my phone service was up to network standard. I wrote this request to Telstra without ever mentioning the name of the bus company who had asked for the guarantee, but in 1994, among documents sent in response to one of my FOI requests, I found a copy of the letter I had written, on which the name ‘O’Meara’ had been scrawled. Had Telstra been listening to my phone conversations? If so, this was spying, way back in 1992, long before the arbitration process began. These issues of an individual’s right to privacy and a corporation’s manipulation of the system go to the core of Australian democracy.
Trying to produce a claim in some readable form when the story was so complex, multi-layered, and complicated by long-delayed access to necessary information, was extremely difficult. My phone and fax lines became life-lines to Garry Ellicott in Queensland.
When Garry attempted to ring me on 27 May 1994 on my 1800 service he twice reached a recorded announcement telling him my number was not connected before he finally got through. When Garry rang Telstra fault centre to complain about these voice messages the operator told him she could not register the fault because the complaint had to come from the customer. Garry’s response was understandably blunt. ‘How,’ he asked, ‘can the customer complain if he doesn’t know I’m trying to reach him? How can he complain if he is not aware that his incoming callers believe he’s no longer trading?’ When my telephone account arrived I had, of course, been charged for both failed calls.
On the subject of these recorded announcements, the Austel report observed:
Monitoring equipment at the exchange will not identify this condition as the call will either not be received at the terminating exchange or it will be seen as a call existing from the exchange. Complementary equipment at the customer’s premises will not record a call being received in either of the above circumstances
Off course, what Garry and I didn’t know back then was that this 1800 fault was affecting Telstra customers nation-wide but Telstra was still able to convince the arbitrator and the Ombudsman to completely ignore it during the arbitration process. It is now clear that Telstra was well aware that any investigation into this fault would have meant that the arbitrator would have had to make a written finding regarding the problem in his award, which would, of course, have had disastrous consequences for Telstra.
Even though the technical consultants warned the arbitrator that, by 30 April 1995, they still needed more time so they could address these issues properly before they were prepared to declare their report to be complete, the arbitrator ignored their pleas.
My page two of the technical consultants report (see Open Letter File No/47-A to 47-D) shows no mention of my billing claim document in my version. However, page three in the arbitrator’s version notes:
“One issue in the Cape Bridgewater case remains open, and we shall attempt to resolve it in the next few weeks, namely Mr Smith’s complaints about billing problems.
“Otherwise, the Technician Report on Cape Bridgewater is complete.” (See Open Letter File No/47-A to 47-D)
How can two identical technical reports with the same 23 technical assessments, both dated 30 April 1995 and apparently both prepared by the same consultants, have one version noting that the “… case remains open, and we shall attempt to resolve it in the next few weeks”, while the other has no mention of it still being open and needing weeks to complete as Prologue/Chapter One shows? Something went horrible wrong that day.
Worse was to come though, because both the Ombudsman and AUSTEL later allowed Telstra to address the part of my claim that I lodged on 25 May 1994 ‘In-Camera’, on 16 October 1995, five months after my arbitration had been declared complete. In other words, AUSTEL, the Government Communications Regulator, the Telecommunications Industry Ombudsman and Telstra (the defendants) were actually controlling what was going to be addressed as part of the arbitrations and what would not even be assessed at all. In simple terms, as our Arbitrator File No/29 shows, I was therefore never provided with the legal rights that, according to the arbitration agreement and the Commercial Arbitration Act, would have entitled me to respond to Telstra’s defence of this part of my claim.
I had been fighting for more than six years and still I was caught in a game of ‘catch up tennis’. As each new fault appeared I had to lodge an FOI request for Telstra data and each request would take at least 30 days to bring results. No sooner had I faxed information to the arbitrator detailing the previous month’s faults than more occurred and I had to wait, again, for another 30 days to get copies of Telstra’s records. If anyone heard my tales of frustration, they apparently didn’t care.
