Arbitrator / Part One


PLEASE NOTE: Arbitrator / Part One was created on 20 March 2015 and is a work in progress. Last edited December 2019

To Hell and Back


It is important to advise newcomers to our that various exhibits are linked in the text: for example, see following links > AUSTEL’s Adverse FindingsPrologue Evidence File No/1-B or Australian Federal Police Investigation File No/1. Clicking on these links with your cursor will automatically open a PDF of the exhibit. By using this method and following the various file nos discussed in our various pages (see menu-bar above) you will be able to verify our story.

The whole Casualties of Telstra (COT) arbitration issue is very complex and involved many unscrupulous people who were prepared to lie, cheat and conceal the truth from the claimants to the claimants’ detriment during a government endorsed arbitration. Due to the complexity, we have no option but to separate the various angles into different pages, as we have done in our menu bar, i.e., One and Part/Two, An injustice to the remaining 16 Australian citizensManipulating the Regulator and Tampering with Evidence etc. Had we not separated these issues, the corruption and collusive practices, which were firmly embedded in the arbitration process itself, would have been lost.

Until the late 1990s, the Australian government fully owned Australia’s telephone network and the communications carrier, Telecom (today privatised and called Telstra). Telecom held the monopoly on communications and let the network deteriorate into disrepair. When four small business owners had severe communication problems, they went into arbitration with Telstra. The arbitrations were a sham: the government not only allowed Telstra to minimise the Casualty of Telstra (COT) members’ claims and losses, but the government also bowed down to Telstra and let the carrier run the arbitrations. Telstra committed serious crimes during the arbitrations yet, up to this day, the Australian government and the Australian Federal Police have been unable to hold Telstra, or the other entities that were involved in this deceit, accountable.

The first draft of this story is now available on Graham Schorer’s own Web-site,

Cape Bridgewater Bay

Chapter One

Have you ever had reason to complain about your phone bill?

Has a friend insisted he has rung and you had not answered, even though you know you were right beside the phone at the time?

Has anyone expressed amazement at how much time you spend on the phone or prospective clients rebuked you for being unprofessional and not answering your phone, when you know it hasn’t rung for days and you’ve hardly made any outgoing calls?

If you have experienced even one of these situations then you will understand why I sometimes feel I have lived through a nightmare. I experienced all these problems and more for almost ten years. I am still seeking an equitable resolution of them.

The saga began in late 1987 when my wife Faye and I bought a small accommodation business perched high above Cape Bridgewater, near Portland on the south-west coast in country Victoria. ‘Seal Cove’ had been run as a school camp, and we intended to turn it into a venue for social clubs and family groups as well as schools.

The camp was a decidedly phone-dependent concern — being 20 kilometre from the township of Portland, phone was the preferred access to us for city people — and our big mistake when we fell in love with the place was to fail to look into the telephone system. In fact, the business was connected to a phone exchange installed more than 30 years before and designed specifically for ‘low-call-rate’ areas. This antiquated and unstaffed telephone exchange had only 8 lines and was never intended to handle the volume of calls made by a larger population plus holiday makers when Faye and I took over the business.

In blissful ignorance, we went ahead with the sale of our home in Melbourne and I took early retirement benefits to raise the money to invest in what we expected to be a new and exciting venture.

I knew this was a business I could run successfully. From the age of fifteen when I went to sea as a steward on English passenger/cargo ships, I had worked in areas that prepared me for the hospitality trade. In 1963 I jumped ship in Melbourne to work as an assistant chef in one elite hotel after another, then two years later, aged twenty, I joined the Australian Merchant Navy. By 1975, I had been a chef on many Australian and overseas cargo ships and now returned to land.

Faye and I had married in Melbourne in 1969, and I worked freelance in the catering industry and on tugboats while I studied for a hotel/motel management diploma. I had already taken on the management of one hotel/motel and pulled it out of receivership so that it was running successfully again. By 1987, at the age of 44, I had enough experience behind me to be confident that I had the skills and knowledge to turn a simple school camp into a successful multifaceted concern.

I made personal visits to almost 150 schools and shires to extol the virtues of the camp, and in February 1988, had some 2000 colour brochures printed and distributed. Then we waited for the phone to ring with inquiries. In vain. There was not even a modest 1% inquiry rate as a result of this marketing exercise.

By April we were beginning to realise the problem might lie with the telephone service. People were asking why we never answered our phone, or were suggesting we install an answering machine to take calls when we were away from the office. In fact, we had an answering machine, but even after we installed a new one, the complaints continued, coupled now with comments about long periods when the phone was giving the engaged signal.

As time went on, call ‘drop-outs’ added to our problems, when the line just went dead in the middle of a call. If the caller hadn’t yet given us contact information, and didn’t ring back, we lost that contact. Between 19 April 1988 and 10 January 1989, Telstra logged nine separate complaints from me about the phone service and several letters of complaint. A typical response to my 1100 call was a promise to check the line. On rare occasions, a technician was actually sent out, whose response was inevitably ‘No fault found’ while my problems continued unabated.

Eventually we discovered that the previous owner of the business had endured the same problems, and had complained equally unsuccessfully about them. In 1988, when I was beginning to marshal my case against Telstra, I obtained a number of documents through the Freedom of Information Act (FOI). According to a document headed Telstra Confidential: Difficult Network Faults  PCM Multiplex Report’, with a sub-heading ‘5.5 Portland Cape Bridgewater Holiday Camp’, Telstra was aware of the faults in early 1987.

Harry, our next-door neighbour, sympathised; his daughter, ringing from Colac, often complained about how difficult it was to get through to her parents. Another local (name deleted ) and once the owner of a grocery chain, suffered from similar problems to ours for many years. He commiserated, saying, ‘But what can you expect from Telstra when we’re in the bush?’ Well, I expected better than this. And certainly we were promised better than this.

We encouraged people to write, but the telephone culture was endemic. People wanted an immediate response. As bookings dwindled instead of increasing, I began to feel I hadn’t properly researched the pros and cons before moving to Cape Bridgewater and was beginning to question what I had done asking Faye to agree to selling the family home just so I could satisfy my ambition to run my own business. It was not the fun I had anticipated. I was operating in a state of constant anger, a very unamusing Basil Fawlty.

We went touring South Australia to sell the concept of our camp through the Wimmera area, but responses were few. Was it the phone to blame? How could we be sure? The uncertainty itself added to the stress.

Sometimes the culprit was blindingly obvious. On a shopping expedition to Portland, 20 kilometres away, I discovered I had left the meat order list behind. From a public phone box I phoned home, only to get a recorded message telling me the number was not connected!

I phoned again, to hear the same message. Telstra’s fault centre said they would look into the matter and so I went about the rest of the shopping, leaving the meat order to last. Finally I phoned the camp again, and this time the phone was engaged. I decided to buy what I could remember from the list and hope for the best, but was not surprised when I got home to learn the phone had not rung once while I had been out.

Anyone who uses a telephone has at some time reached a recorded voice announcement (known within the industry as RVA):

The number you have called is not connected or has been changed. Please check the number before calling again. You have not been charged for this call.’

This incorrect message was the RVA people most frequently reached when trying to ring the Camp. While Telstra never acknowledged this, I discovered much later, among a multitude of FOI documents I received in 1994, a copy of a Telstra internal memo which explained, ‘this message tends to give the caller the impression that the business they are calling has ceased trading, and they should try another trader’ Home Home Page Part One File No 11-A 

Another Telstra document referred to the need for:

‘a very basic review of all our RVA messages and how they are applied …I am sure when we start to scratch around we will find a host of network circumstances where inappropriate RVAs are going to line’ Home Page Part One File No 11-B 

It seems the ‘not connected’ RVA came on whenever the lines in or out of Cape Bridgewater were congested, which, given how few lines there were, was often.

For a newly established business like ours, this was a major disaster, but despite the memo’s acknowledgement that such serious faults existed, Telstra never admitted the existence of a fault in those first years. And with my continued complaints I was treated increasingly as a nuisance caller. This was rural Australia, and I was supposed to put up with a poor phone service — not that anyone in Telstra was admitting that it was poor service. In every case, ‘No fault found’ was the finding by technicians and linesmen.

The frustration was immense, coupled with uncertainty. Were our problems no more than general poor rural service compounded by the congestion on too few lines going into an antiquated exchange? The camp was, at that stage, the only accommodation business being run in Cape Bridgewater. Obviously we relied on the phone more than most people in the area. But if there was some specific fault, why weren’t they finding it?

The business was in trouble, and so were we. By mid 1989 we were reduced to selling some shares for our operating costs. Here we were, a mere 15 months after taking over the business and we were actually beginning to sell off our assets instead of reducing the mortgage. I felt like a total failure. We were neither of us able to lift the other’s spirits.

I decided to do another round of marketing in the city. I would give it all I had. We both went. Was it masochism that made me ring the camp answering machine, via its remote access facility, to check for any messages, so I could respond to them promptly? Whatever it was, all I could get was the recorded message:

The number you are calling is not connected or has been changed. Please check the number before calling again. You have not been charged for this call.’


On the way home, just outside of Geelong, we stopped at a phone box and I tried again. Now the line was engaged. Perhaps somebody was leaving a message, I thought. Ever hopeful.

There were no messages on the answering machine. And nothing to be gained by asking why had I received an engaged signal. How many calls had we lost during the days that we were away? How many prospective clients had given up trying to get through because a recorded message told them the phone was not connected? Anger and frustration were very close to the surface. This wonderful beachside location and nobody could telephone us to make a booking, oh how sad all this was looking.

Near the end of October 1989, our twenty-year marriage ended. I had already been taking prescribed drugs for stress; that afternoon I added a quantity of Scotch and hunkered down in one of the cabins. Faye, understandably, was seriously concerned and called the local police who broke into the cabin to ‘save’ me from myself. They took me to the hospital and I am forever grateful to the doctors who confirmed that I wasn’t going ‘nuts’ and who sent me home the following day. My friends Margaret and Jack from Melbourne decided that Margaret would come home with me to ‘bail me out’. The fun, however, had just begun.

Margaret and I arrived back at the camp to be confronted with a disaster area. Faye had left the night before, following advice from various people that she needed to be in a ‘safe house’. Doors had been left unlocked, meat from the deep freeze was left out on benches, and various items had mysteriously vanished. And, according to the Camp diary, 70 students from Monivae Catholic College in Hamilton were due to arrive in two days, booked in for five days and four nights. Without Margaret’s assistance, I would have been wiped out.

Mourning the end of my marriage, the very thought of shopping was a mountain I didn’t want to climb. What to feed 70 students plus staff? By the time I got my head around what to order it was Sunday evening and the Monivae group were due the following day. Then the hot water service broke down!

The staff was not happy about cold showers! Even so, for the next five years, Monivae College returned two and sometimes three times a year. Their support throughout this awful period helped me keep trading.

And of course Margaret’s support. She carried so much through that first week. Aware that I was holding on by my fingernails, she suggested Brother Greg, one of the Monivae teachers, come to the house to talk to me. It was an inspired suggestion, and we talked well into the night, Margaret too, working through many things, from early childhood experiences to the end of twenty years of marriage.


In the weeks that followed my phone problems continued unabated. I began keeping a log of phone faults, recording all complaints I received in an exercise book, along with names and contact details for each complaint and a note regarding the effect these failed calls were having on both the business and on me.

One day the phone extension in the kiosk was dead. The coin-operated gold phone in the dining room, which was on a separate line, had a normal dial tone, so I dialed my office number, only to hear the dreaded:

‘The number you have called is not connected or has been changed. Please check the number before calling again. You have not been charged for this call.’

In fact I was charged for the call because the phone did not return my coins! Five minutes later I tried again. This time the office phone appeared to be engaged (it wasn’t) and the gold phone happily regurgitated my coins.

I used this testing routine frequently over the next months, and registered every fault I found with Telstra. The situation was beginning to tell on me. Why was this still happening after so many complaints? Could Telstra really be this incompetent? Or was there something worse going on? Had I made too much of a nuisance of myself? But that was ridiculous. Under the circumstances I had behaved impeccably politely … when in fact I had fantasies of sheer violence at times.

Now I was no longer one half of a working husband and wife team, I started 1990 digging into my pitifully low financial reserves to pay staff, or risk losing everything. I was suffering what is commonly known in the world of finance as a ‘consequential resultant loss’ — Faye was no longer contributing her unpaid labour, and I now had to pay her a yearly dividend on her financial investment in the business.

The future looked grim. There had been no attempt by Telstra to remedy the faults, or at least no attempt that made any difference. The constant refrain of ‘No fault found’ was wearing very thin. I found it hard not to dwell on how many prospective customers night be lost because they couldn’t reach me by phone. Nor was it long before the legal vultures were circling. I hadn’t been able to meet my financial agreement with Faye and her solicitor was demanding money. I was having trouble meeting my own legal costs, let alone finding any extra. My son’s school fees were overdue and in order to pay some of the mounting debts, I sold the 22-seater school bus I had originally used to ferry customers around, and purchased a small utility in its place.

On the positive side, I had met a woman called Karen, who lived in Warrnambool. Our relationship developed to become quite serious, and when Karen knew I was about to wind up my business because I couldn’t raise the funds to make any more payments to Faye, she put her house up as security for a loan, thereby giving me two years breathing space. She believed in me, and she believed in the capacity of the Camp to succeed. She wanted to be a partner in it. This was early in 1991.

Things were starting to look up, especially when I discovered that a new exchange was to be installed at Cape Bridgewater later in the year, which would alleviate all the problems of congested lines. It was just a question of time. Karen moved in with me and we worked together with new energy to pull the business out of the doldrums.


In August that year came another joy when I got the first confirmation from someone within Telstra that they knew my phone problems were real. They had found an old document suggesting I had been right all along. I felt such a relief that the faults were at last being acknowledged and I asked for the name of my new friend. I was so happy, I didn’t even really register any perturbation when all he could tell me was that he worked at the fault centre in Hamilton. No names.

According to Telstra’s own file note:

‘Alan Smith rang 15/8/91 re service 267 267. Incoming callers are receiving engaged signal when it’s not engaged …

This has been a continuing problem and he is losing a lot of business.

I said it appears from the fault history that the problem may be in the exchange and that the next RCM exchange 21/8 would solve these problems but that I would check this out with the techs.

I also said we would have a look at the service now to try and get it working correctly until cutover’Home Page Part One File No 11-C 

At last someone in Telstra had given me something to hang on to. When Karen sold her house, a part of the proceeds went towards paying my legal fees and my debt to Faye. I paid Faye out and Karen’s name was now officially on the title to the business. We counted the days to the installation of the new exchange.

But the triumph of a new exchange when it came at the end of August 1991 was the briefest of victories. It made not the slightest difference. The telephone problems continued just as before, now exacerbated by the dreadful disappointment that the war wasn’t over at all. Increasingly, people reported complaints of recorded voice announcements, and I continued to complain to Telstra about faults which seemed to me to be getting worse, not better. I asked technicians, if a new exchange didn’t correct the problems, then where could the faults lie? Their response was unbelievable: ‘No fault found.’ They simply refused to engage with my question. I cursed the fact that I had no contact details for the one person who had acknowledged that there were faults. (I did not see the file note he wrote until 1995.)

New bookings continued to be rare. The camp was getting in need of painting and upgrading. The business looked sad and bedraggled, and so people who passed by were not interested in stopping. And when we did have a booking, cash flow was a problem, making it tricky to put food on the table. We somehow always managed, but it was very stressful. Karen was starting to see her investment going down the drain, and the strain on her came to a head while we were in the middle of organising a charity camp for under-privileged children.

Despite the financial precariousness of the enterprise, I had from the start sponsored the stays of under-privileged groups at the camp. It was no loss to me really: sponsored food was provided through the generosity of a number of commercial food outlets, and it cost me only a small amount in electricity and gas.


In May 1992 we held a charity week for kids from Ballarat and South West Victoria, organised largely by Sister Maureen Burke, IBVM, Principal of Loreto College in Ballarat. Arrangements regarding food, transport, and any special needs the children might have, had to be handled over the phone, and of course, Sister Burke had enormous problems making phone contact, Calls were either ringing out or she was getting a dead line — no sound at all. Finally, after trying in vain all through one week, she decided to drive the 3½ hours to make the final arrangements.

Just as she arrived at the camp, Karen was taking a phone call from a very angry man who wanted information about a singles weekend we were trying to set up. This caller was quite abusive. He couldn’t understand why we were advertising a business but never answered the phone. Karen burst into tears. She had reached the end of her tolerance, and nothing I could say was any help. When Sister Burke appeared in the office I decided absence was the better part of valour and removed myself, leaving the two women together. Much later, Sister Burke came out and told me she thought it probably best for both of us if Karen were to leave Cape Bridgewater. I felt numb. It was all happening again.

But it wasn’t the same as it had been with Faye. Karen and I sat and talked. True, we would separate, but I assured her that she would lose nothing because of her generosity to me; that I would do whatever was necessary to buy her out. We were both relieved at that. Karen rented a house in Portland and we remained good friends, though without her day-to-day assistance at the camp, which had given me space to travel around, I had to drop my promotional tours.

Later I sent Sister Burke an early draft of this book. She wrote back, ‘Only I know from personal experience that your story is true, otherwise I would find it difficult to believe.

Casualties of Telstra

In July 1992 Karen rang to tell me she had heard of a restaurant in Melbourne suffering the same phone problems that were crippling me.

I felt a great comfort in hearing this, and knew I needed to meet the owner. Making phone contact with the restaurant was of course difficult, but eventually, I got through to Sheila Hawkins, proprietor of The Society restaurant in Bourke Street, in the centre of the city. We arranged to meet and I travelled to Melbourne in early August.

It was so good to talk to someone who experienced similar problems. And there were more of us. Sheila knew of an Ann Garms who ran the Tivoli Theatre Restaurant in Brisbane, who was also having serious telephone problems. Back in Cape Bridgewater I rang Ann to discover she was coming to Melbourne the following week to register her own complaints with Austel, the Australian Telecommunications Regulator, and we arranged to meet together with Sheila. I went into the city again for the meeting, where Ann mentioned another Brisbane business that was in similar trouble — a car parts company run by Maureen Gillen. Like Ann’s business, Maureen’s was trunked off the Fortitude Valley exchange. Sheila, meanwhile, had contacted Graham Schorer who somehow ran the Golden Courier Service out of North Melbourne — despite a very bad phone service.

Finally, our little group gathered together at Sheila’s restaurant in Bourke Street, except for Maureen who couldn’t make the journey from Brisbane. It was Sheila who suggested we call ourselves COT — Casualties of Telstra. This was one of her last actions with the group as she withdrew shortly after due to ill-health.

At the top of the list of problems we held in common were those three little words: ‘No fault found.’ It wasn’t just that we all had to put up with ongoing service faults, Telstra’s evasion of responsibility in this regard made those faults a nightmare. Telstra had a duty to deliver us service up to a recognised network standard, and by failing to ‘find’ their faults they were effectively avoiding carrying out their statutory obligation.

In October 1992 COT had its first official meeting with Telstra, at the Ibis Hotel in Melbourne. We were a united and optimistic group of small-business telephone users, on our way down the path to justice. We had no idea what a long haul we were in for. Indeed, this first meeting felt eminently successful. Telstra sent three executives; they treated us courteously and we felt that our claims were being taken seriously. We were seen, and treated, as a concerned group of small-business people who had been consistently ignored by Telstra. We asked for Austel (the government regulator) to be the ‘honest broker’ in our matters, and the executives agreed to this. They took the documentary evidence we had brought, and at the end of the meeting we were left with a sense that it was all soon to be resolved.

After that initial meeting, there were a number of meetings with Telstra and Austel. Based as he was in the city, Graham Schorer was the COT representative. Under pressure from Austel, Telstra was acknowledging that faults existed, though they still held back from admitting the scale of faults we knew to be true — and indeed, as it turned out, that they too knew to be true.

Guaranteed up to network standard

Meanwhile, in July 1992 I had been obliged to ask Telstra for a guarantee that my phone service was up to standard. A bus service wanted such a guarantee (in case of urgent needs for communication) before it would contract to bring groups to the camp. Although I did not see how Telstra could guarantee such a thing on the basis of current performance, I thought a guarantee might have some use as leverage.

Not one but two guarantees eventually arrived (in the event, both too late for the purpose of securing the contract with the bus company). The first stated that my phone service was indeed ‘up to network standard’:

‘Whilst our recent tests indicate that your service is now performing to normal network standards, I am initiating a further detailed study of all the elements of your service and the tests which have been conducted’Home Page Part One File No 11-D

The second stated:

‘We believe that the quality of your service can be guaranteed and although it would be impossible to suggest that there would never be a service problem we could see no reason why this should be a factor in your business endeavours’ Home Page Part One File No 11-E .

Now I need to jump ahead of myself here, to draw on material I did not have access to at this time, but which reveals something of what was going on in the telephone exchange while my business was sinking.

In 1994 we COT members all ended up involved in arbitrations with Telstra. According to the rules of arbitration, Telstra had a legal obligation to provide us with relevant documents under the Freedom of Information Act. You will hear a lot more about this in due course, not least about the unreasonable time it took for FOI document requests to be delivered (often years too late); enough to say here, that in an FOI release in mid-1994 I received documents referring to the general congestion problem at Cape Bridgewater.

The second paragraph of a document titled ‘Subject PORTLAND – CAPE BRIDGEWATER PCM HBER’ of 12 July 1991, was of particular interest:

‘When the ‘A’ direction of system 2 was initially tested, 11,000 errors per hour were measured. In the ‘B’ direction, approximately 216 errors per hour were measured, 72 errors per hour is the specified number allowable(see Main Evidence File No 31)

This level of error was in fact known at least as early as February 1990, the very time my complaints were being stonewalled. And nor was it acknowledged to me at the time of writing (July 1991). And in the new exchange, the problems continued, as another document, titled ‘Portland — Cape Bridgewater — RCM System’ showed, referring to information logged in March 1993, long after Telstra had first reported these massive error rates Home Page Part One File No 11 F 

Whales in Cape Bridgewater Bay
Initial error counter readings, Portland to Cape Bridgewater direction:
System 1 System 2 System 3
SES 0 0 0
DM 45993 3342 2
ES 65535 65535 87
At this stage we had no idea over what period of time these errors had accumulated.

The second page of this document explains why they ‘had no idea over what period of time these errors had accumulated’:

‘The alarm system on all three RCM systems had not been programmed. This would have prevented any local alarms being extended back to Portland’.

They didn’t know how long these errors had been accumulating because, from 18 August 1991, when the new exchange (RCM) was installed at Cape Bridgewater, the fault alarm system had been left unconnected. Since this was an un-manned exchange, no-one could know when faults occurred — except, of course, us poor, defenceless customers.

This means that in September 1992 when Telstra management had written to me stating that the quality of my telephone service was guaranteed as up to network standard, they had failed to realise that this alarm had not been connected. Even the local telephone technicians were oblivious to the call loss due to the unconnected alarm system in the exchange. What kind of investigation into the faults I had reported over several years does this demonstrate? A farcical one. How, for several years, could they fail to notice that the alarm wasn’t connected?

This was not a two a hundred miles from anywhere it was a tourist hamlet on a major tourist road with the finest bay in the whole of Victoria Australia. So what was wrong? Why didn’t the phones work?

A compensation deal

The formation of COT had come not a moment too soon for me. The frustration of struggling with problems that seemed immune to complaints, and about which I could do nothing but complain, could finally be shared. I had lost faith in my own judgement by this time; I had let down two different partners who had trusted me, and I was now borrowing from friends just to keep the camp running on a day to day basis. Through all of this, of course, the phone faults implacably continued.

The COT group continued to negotiate with Austel and Telstra, and in late 1992 our combined pressure finally produced results: Telstra approached me with a proposal for a compensation payout which included a confidentiality agreement to the effect that I would not disclose the value of any settlement which resulted from this. I signed this agreement on 11 December 1992 and I have honoured my word not to disclose the amount of the payout without prior approval by Telstra.

That same day, I went to Telstra’s city fault centre where the area general manager and I began a long discussion regarding the extent of my financial losses over the four and a half years since I first complained about the phones. This manager and I were the only people involved in this discussion. I provided her with copies of numerous letters I had received from clients and tradespeople, describing their experiences trying to ring me, and I explained how I had calculated the sum of my losses.


On a number of occasions, the manager left me alone to examine documents she had given me. As she left on the first occasion, she explained that she would close the door so I could read in private and added that, if I needed to discuss anything with my advisors I was free to use the telephone: there was a direct outside line available at all times so I wouldn’t need to speak to an operator within the building. I made use of the phone a couple of times to ring Karen and talk over the offer; together we calculated how much I needed to repay her.

The documents provided by the manager were mostly hand-written and included copies of the so-called ‘guarantees’ I had received. According to one of the documents.  there was only a ‘single’ fault, lasting only ‘three weeks’, that triggered the recorded message (RVA) that my number was not connected. This document claimed that the RVA probably caused me to lose only about 50% of all incoming calls over this three-week period. Other documents referred to a minor fault in the phone exchange at Heywood plus some other minor faults which may have contributed to some call loss. The manager told me Telstra agreed to accept responsibility for these faults if I agreed to their offer

I protested and reeled off again the continuing and constant complaints I had been and still was getting from customers. Her response was a simple ‘take it or leave it’: this was Telstra’s last offer, she told me, and the only other avenue I could follow would be court proceedings. Her final comment was along the lines that, ‘Telstra has more time than you have money to fund court proceedings.’ Reluctantly, but feeling I had no other choice, I accepted. My reluctance was well justified.

By August 1993 came my first bundle of FOI documents from Telstra. In it, astonishingly, was a Telstra minute of 2 July 1992, which revealed that local Telstra technicians regarded my complaints were correct about the ‘service disconnected’ RVA on my line. Not only that, the observation was made that the problem, ‘is occurring in increasing numbers as more and more customers are connected …’ Senator Alston raised this document in Senates Estimates in February 1994demanding a response from Austel. No response was forthcoming, and nowhere else did this revelation gather any advance for my cause.

And two years later I received a copy of an FOI document headed Telecom SecretThis was a copy of the notes brought by the manager to the settlement meeting. The opening page, reproduced here, shows all too clearly that Telstra knew how solid my case was. The manager had blatantly misled me into agreeing to sign.

The document goes on to state,

‘Mr Smith’s service problems were network related and spanned a period of 3–4 years,’ and, ‘Overall, Mr Smith’s telephone service had suffered from poor grade of network performance over a period of several years; with some difficulty to detect exchange problems in the last 8 months. (see Main Evidence File No 6)

On 13 October I reported four calls dropping out, at 1.20, 1.40, 2.00 and 3.00, and an occasion when I had answered the phone to find a dead line. Despite the Elmi machines, the Telstra technicians found, as they had in so many instances before, no faults that they could detect. What was going on?My acceptance of the offer notwithstanding, I continued to experience faults in my phone service, particularly call drop-outs when, part-way through a conversation, the line would simply go dead, and short duration rings when the phone would ring once or twice and then stop, with no-one there if we picked up the receiver. Finally, in October of 1992, the area general manager arranged for two testing machines (called ‘Elmi’ machines) to be installed, one at the local Cape Bridgewater exchange and the other at my office.

It was two years before I got any elucidation from Telstra, and even then it shed no light on the matter. In 1994, in a bundle of FOI documents I received was a hand-written file note stating,

‘We had the Elmi disconnected at the RCM [exchange] and were installing it at Mr Smith’s house and the CCAS showed no evidence of above [not receiving ring] 1.20, 1.40, 2.00 and 3.00.(see Main Evidence File No 28)

This was simply not the case at all; I knew they were not installing it at my house at this time; it was already installed. So I asked Telstra to supply their Elmi print-outs from September–October 1992. Some weeks later a number of documents arrived, including tapes which show that the call drop-outs and dead lines that I had experienced appeared on Telstra’s monitoring equipment (CCAS) records as answered calls at approximately 1.30 pm and 3 pm (see Main Evidence File No 28.

I could not fathom why a local technician would state that the Elmi equipment was disconnected at the exchange and to be installed at my house when these two print-outs show that it was actually installed and operating at both locations, albeit incorrectly. I could only assume that all this reflected the competence and capacity of Telstra’s fault centre, as well as the accuracy of their records and reportage. That thought alone was very worrying when you are reliant on the telephone.

And now I began to suspect that there might not be a simple answer to the phone faults, just waiting to be discovered and fixed. It looked as if the problems were endemic throughout the organisation and its infrastructure.

As I struggled from the end of 1992 to the New Year of 1993 I began to wonder if ‘settling’ with Telstra had been such a good idea. Nothing had changed. I had been forced to re-finance, incurring more set-up fees, and because I still couldn’t afford to maintain the camp properly the place was looking decidedly abandoned. I felt as if I had been abandoned too. Both the buildings and I were tired, run-down and in need of a face lift!

Towards the end of 1993 the Shadow Minister for Communications, the Hon Senator Richard Alston, showed an interest in something four small-business operators appeared to have uncovered concerning major network problems within the then-government owned telecommunications carrier (Telecom). He and Senator Ron Boswell of the National Party both pushed for a Senate inquiry into our claims and, I have since been told by an ex-Telecom/Telstra employee, we were very close to succeeding.

If this Senate inquiry had got off the ground, heads in Telstra might have rolled but it didn’t happen, and those same ‘heads’ continue to control Telstra to this day. Even though Senator Boswell is based in Queensland and most remaining members of COT are in Victoria, he has continued to offer his support. David Hawker MP, my local parliamentary member, is another who honoured his duty of care to his constituents and answered our call for help. He took my claims seriously — indeed, he took the larger problem of poor phone service in his electorate seriously and was appalled at its extent. Mr Hawker sent me letters of support, put relevant people in touch with me, organised assistance for me and has continued to go into battle on COT’s behalf for many years now. I just could not understand why an Australian owned telecommunications company would set out to destroy fellow citizens of that country. Nothing added up and still does not add up in 2016, twenty-four years later.


I realised I had phone line issues through people reporting their difficulties in trying to reach me. I began to check my bills carefully and to request feedback from clients. I received many letters from schools, clubs and singles’ clubs, concerning the difficulties they had experienced when trying to contact my business by phone. The executive officer of the Camping Association of Victoria, Mr Don MacDowall, wrote on 6 May 1993 to say that 10,000 copies of their resource guide, in which I had advertised, had been direct mailed to schools and given away. Most of the other advertisers with ads similar to mine, he said, had experienced an increase in inquiries and bookings after the distribution of these books and so it seemed evident to him that the “malfunction of your phone system effectively deprived you of similar gains in business”. He also noted that he had himself received complaints from people asking why I was not answering my phone. During this period, I received 36 letters from different individuals as well as more than 40 other complaints from people who had unsuccessfully tried to respond to my advertisements. The Haddon & District Community House wrote in April 1993:

“Several times I have dialled 055 267 267 number and received no response — dead line. I have also experienced similar problems on your 008 number. Our youth worker, Gladys Crittenden, experienced similar problems while organising our last year’s family camp, over a six month period during 1991/1992.”


In personal desperation I decided to ring Don Burnard, a clinical psychologist hired on behalf of the COT members when we were first created the group. After consultation, Dr Burnard wrote the following:

All of these clients have been subjected to persistent environmental stress as a result of constant pressure in their business and erratic patterns of change in the functioning of their telephones which were essential to the success of their businesses.”

In the first five months of 1993, I received 11 written complaints, including letters from the Royal Children’s Hospital (Arbitrator File No/90) and the Prahran Secondary College in Melbourne.

“To Whom it May Concern, A group from the Centre for Adolescent Health (Royal Children’s Hospital) in Melbourne, recently spent a week from Monday 19th April to Friday 23rd April at the campsite. Two of our leaders attempted to make phone calls at 6.25 pm on Tuesday evening and experienced a deal line when trying to ting out. A number of our campers attempted t make calls on the Gold Phone during the week and were unsuccessful.

Many of our campers and leaders had chronic illnesses therefore it was vitally important that out group had easy access to an operating telephone system 24 hours a day, in the event of a medical emergency. We would require a guarantee that the telephone system was fully operational before considering Cape Bridgewater Camp as a future venue”.  

Louise Rolls’ statement in her letter (above) that the children’s hospital,“would require a guarantee that the telephone system was fully operational before considering Cape Bridgewater Camp as a future venue,”was, in the circumstances, a fair comment. Most accommodation venues could provide such a guarantee confidently, as would most tourist operators, particularly those who book aged pensioner holiday packages.


Sadly, I was unable to guarantee the telephone system at my venue because of the systemic lock-up problem affecting all four of my service lines. The children’s hospital never came back to my venue again.

After I received the above letter from the children’s hospital, I attempted to telephone clinical psychologist Dr Burnard for support, only to have my conversation with his receptionist interrupted three times by phone faults. Later I received a letter from his office, saying:

“I am writing to you to confirm details of telephone conversation difficulties experienced between this office and our residence mid-morning this day, 5 May 1993. At approximately 11.30 am today Mr Alan Smith telephoned this office requesting to speak with Don Burnard. Mr Burnard was not available to take his call. During this time the telephone cut out three times. Each time Mr Smith telephoned back to continue the call “. 

In August 1993 Rita Espinoza from the Chilean Social Club wrote:

“I tried to ring you in order to confirm our stay at your camp site. I found it impossible to get through. I tried to ring later but encountered the same signal on the 10th of August around 7 – 8.30 pm. I believe you have a problem with the exchange and strongly advise you contact Telstra. Do you remember the same problem happened in April and May of this year? I apologise but I have made arrangements with another camp.”

The faults had now plagued my business, unabated, for more than five years

Towards a Settlement Proposal

Telstra management wanted to force COT members into court, well aware that their highly paid lawyers would eat us alive. It looked increasingly sure that this was their plan. By now, AUSTEL was concerned at Telstra’s approach to our complaints, particularly their use of outside solicitors. Sometime during August or September of 1993 I advised AUSTEL’s general manager for consumer affairs, John MacMahon, that Telstra’s general manager (commercial) had instructed me to direct all my future phone complaints through their outside solicitors. These complaints were to be made in writing, addressed to a particular lawyer (name removed for obvious reasons). I discuss this particular lawyer and the effect of directing all of my phone complaints through him, later. In October 1993, AUSTEL chairman Robin Davey told Telstra’s commercial division that AUSTEL would not be happy if outside solicitors were used in future COT matters. Mr Davey’s suggestion fell on deaf ears however and through to 28 January 1994, Telstra continued to insist that I register my complaints through their solicitors. Later, when Telstra submitted their defence of my arbitration, these same solicitors also acted as their defence counsel.

Towards the end of 1993 the COT group was lobbying hard on two counts. First, we were pushing for settlements in the form of a commercial assessment that would properly address the financial losses our businesses had suffered. This would be a specifically non-legalistic process. The Labor government of the time had endorsed it as the most appropriate path towards justice in our case. In 1994, during my government-endorsed Telstra settlement/arbitration process, one of my arbitration consultants, Barry O’Sullivan (or his secretary) wrote on an internal memo:

“…We also need to take into account the fact that Mr Smith has suffered stress and has been diagnosed as suffering from post traumatic stress syndrome. This disorder has been documented by his resident Psychologist in Portland Kay Frankin, and also a psychiatrist he has visited in Geelong, Dr Chris Mackie”.

While somewhat reluctant to disclose I suffered post-traumatic stress syndrome, it is of considerable significance, because the COT saga has played an integral part in it. Many other COTs have suffered from similar stress-related issues. If we had lost our businesses, or a significant part of our businesses, as a result of fire, theft, floods or bad management decisions, most of us could accept what had happened and even if we were not happy about the circumstances we found ourselves in, we would eventually find ways to sort through issues, and move on. Before the advent of emails and internet generated businesses, fully functioning phone and fax machines were essential to the successful operation of businesses dependent on them for clients.

For the first six years of my business operation, the only alternative available when the phone lines were not working, was to drive 20 kilometres into Portland to make my phone calls. We did not even have a public phone in Cape Bridgewater until after 1995. On the occasions I tested my business phone line by ringing my office from the Portland public phone, imagine my dismay and frustration when I consistently received a recorded telephone message announcing that the number you are ringing (my own business!) is not connected, when I knew it certainly was connected to Telstra’s network.

For the purpose of highlighting that anyone can fall victim to this stressful situation I will briefly move forward eight years to when I sold my beloved holiday camp in December 2001; six years after my arbitration process had failed to rectify the ongoing telephone and faxing problems. Darren Lewis, the new proprietor of my business, also sought help from a psychologist in Portland to assist him in dealing with a business which had massive telephone communication problems up to at least November 2006.

A psychologist visited me on 23 February 2007 to discuss Darren’s psychological state and the suicidal thoughts he was, then, reporting. He also wanted to confirm that the dreadful telephone saga Darren was talking about was real, and not his imagination.

Chapter Two

Returning back to April and May 1993, where our lives were being torn apart by Telstra’s refusal to accept that we four might have valid claims. Telstra’s internal emails confirm Telstra’s management was trying to force us four COT members into court.

The author of one of these internal Telstra memo to senior executives on 21 April 1993, for instance, referred to raising the issue of court with us:

“Don, thank you for your swift and eloquent reply. I disagree with raising the issues of the courts.That carries an implied threat not only to COT cases but to all customers that they’ll end up as lawyer fodder. Certainly that can be a message to give face to face with customers and to hold in reserve if the complainants remain vexatious” (See Arbitrator File No 57)

Clearly, Telstra management intended to decide when claimants were becoming vexatious and that this would be when they would threaten the claimants with legal action. This decision, from a corporation continually held up to be a benevolent organisation and acting for the good of the Australian public; yet behind closed doors, Telstra management intended to turn legitimate claimants into lawyer fodder if they persisted with their claims. This April 1993 Telstra document had a particularly devastating effect on me.

If this is not enough skullduggery, consider Telstra’s executives were clearly aiming to muzzle the media regarding the validity of our valid claims. The sense of fear within the COT group was understandable, but it intensified once it became apparent that this government owned corporation had the COT cases under surveillance. This Telstra internal email dated 16 June 1993 discusses a TV news programme:

“Good news re channel nine news. Haven’t checked all outlets but as it didn’t run on the main bulletin last night, we can be pretty certain that the story died the death. I wish I could figure which phase it was that convinced [A TV journalist] not to proceed. Might have been one of Jim Holmes’ [Telstra Corporate Secretay] pearls…

Neil  Mitchell had another bite this morning. Said to keep those faxes rolling into Schorer.” (See Arbitrator File No/93)

The Telstra executive who apparently delved in pearl diving was Telstra’s corporate secretary. What type of pearl was cast by this high-flying corporate secretary? Were they pearls of wisdom, financial pearls or another type of pearl that convinced a respected journalist to drop a story? The Neil Mitchell referred to in this email was and still is a talkback interviewer on Melbourne’s 3AW693 radio station.

It is important to note that COT spokesperson Graham Schorer had a very high regard for Neil Mitchel and 3AW693during this very difficult period in our lives.

_2738111[1]Why is this particular instance so important, that I raise here? The answer is simple. If indeed metaphorical pearls can convince a respected journalist to drop a story, cannot similar pearls be cast before other professionals assigned to the forthcoming COT case arbitrations, to entice them not to act independently? It is clear from documents on that relevant adverse material against Telstra and others assisting Telstra, was concealed to prevent it being addressed during my arbitration.

The two attached emails dated 25 October 1993 (FOI folios A06537 and A01554), from Telstra’s Don Pinel to Telstra’s Corporate Secretary, Jim Holmes, and the third Telstra email dated 27 October 1993 FOI folio A01554, also from Don Pinel to Jim Holmes (see TIO Evidence File No 7-A to 7-C), are so significant. It is important to first understand that there appears to be a number of arbitration officials within the Establishment who were aware that Telstra knew, in advance, that they would not be able to supply any of their historic technical data (commonly referred to as Leopard fault data) before the COTs went into arbitration.  What we are saying is that we believe, if the two Senators and Warwick Smith had known, before the COTs signed for their arbitrations, that Telstra would never be able to supply the FOI documents requested by the claimants regarding this very important historic faults data, then they would not have allowed the COTs to enter into a process that was so obviously going to be totally undemocratic. Although there is nothing in this document concerning Jim Holmes’ pearls which appears were provided to the media to keep them from writing bad publicity about Telstra the referred to Jim Holmes was one of the same Corporate Secretary which dished out these pearls.

Telstra’s Corporate Secretary at the time, Jim Holmes, was advised in all three emails (A01554, A06507 and A06508) that the Leopard Fault data (which was the technical data that Telstra kept regarding exchange faults) had been destroyed once it was more than twelve months old.  Mr Holmes was, at the same time as being Telstra’s Corporate Secretary, also a member of the TIO Board when the first four COT claimants (Gillam, Garms, Schorer, and Smith) formally signed their arbitration agreements, but it seems that Mr Holmes did not alert the Government to this destruction of records, even though, after all, the Government had endorsed the arbitration agreements; neither did he warn the TIO, who administered the arbitrations, that the claimants would not be able to support their claims effectively because Telstra had destroyed all the historical data, at least from 1992 on.  Have Telstra, and The Hon Richard Alston, and his fellow Coalition Government Ministers ever stopped to consider what followed, once Telstra had managed to keep this serious matter secret?  Have Telstra and the Australian Government ever considered the financial cost to each claimant (let alone the psychological stress) as they tried to access information that Telstra knew had already been destroyed, years before they went into arbitration?  The costs that accumulated for each and every one of the COT cases ran into hundreds of thousands of dollars as they struggled to access this non-existence fault data (and other Telstra data) in support of their arbitration claims. Has the Senate ever considered the cost, not just in dollars but also in the eighteen months that various Senators spent between September 1997 and March 1999, assisting the COT Cases in their various attempts to access technical documents, when Telstra knew they had been destroyed years before any of the COT Cases went into arbitration?

The fact that Telstra’s Corporate Secretary, Jim Holmes, knew about this destruction of so-called ‘old’ data, for a fact, as emails A01554, A06507 and A06508 (see TIO Evidence File No 7-A to 7-C) show, and yet, on 18 November 1993, still he chose to sign all four FTSP agreements for the first COT Cases, while he was also a TIO Board member, and therefore attended the TIO monthly Board meetings, even when COT Cases arbitration issues were discussed, but he never passed on to the TIO exactly what he knew concerning these destroyed documents that the claimants were trying to access, has further made the COT arbitrations a mockery of the Australian legal system.

Have the ACMA Board, the TIO Board and the TIO Council fully understood how much it has cost tax payers for Telstra to defend the COT Cases claim when Telstra was a fully-Government-owned corporation? The cost to the taxpayer included the hiring of the TIO-appointed arbitrator; the TIO-appointed Special Counsel; and the TIO-appointed Resource Unit – and all this money was spent as part of a process where the Government owned telecommunications carrier had already secretly withheld from the government who owned them and the Senate that the claimants would be wasting hundreds of thousands of dollars (and in most of the cases) borrowed money in their attempt to gain access to documents members of the TIO Board (the administrators of the arbitrations) and Telstra new had already been destroyed.

When Jim Holmes did not ensure the TIO board was notified that the COT cases may have problems trying to prove their historic phone complaints because Telstra had destroyed that data, he was partly responsible for the COT cases racking up thousands of dollars in wasted arbitration fees, including paying technical consultants for advice on what historic data was needed to support various claims, when that data no longer existed.

Mr Holmes did not advise the TIO (the administrator of the COT arbitrations) that the arbitration agreement the claimants were signing should be revised because there was no historic fault data.

Are those parties who concealed so much of my relevant claim material from me proud owners of pearl necklaces? This corporate secretary was also a member of the Telecommunications Industry Ombudsman Board (TIO) during the TIO-administered COT arbitrations.

It is clear from Exhibit 11 in our TIO Arbitration Administrators page, that three of Telstra’s most senior executives, Jim Holmes, Chris Vonwiller (also members of the TIO board) and Ted Benjamin (a member of the TIO council) intended to attack the validity of the COT cases’ claims using the media. The TIO office was soon to become the administrators of the COT arbitrations. Exhibit 25, TIO Arbitration Administrators, confirms Senator Chris Schacht was astounded that Telstra’s Ted Benjamin was allowed to attend regular TIO council meetings while COT arbitration issues were being discussed. If you read either our TIO Arbitration Administrators or Telecommunication Industry Ombudsman two pages, you will conclude it was unconstitutional to force the COT cases into an arbitration process while the defendant had access to arbitration-related information (via the TIO office meetings), but the COT cases did not.

The Briefcase Saga 

My constant complaints to Austel finally bore fruit when, for the first time in this story, Telstra investigators came to Cape Bridgewater. Dave Stockdale and Hugh Macintosh of Telstra’s National Network Investigation Division arrived at my office on 3 June 1993. At last, I thought, I would be able to speak directly to people who knew what they were talking about.

I should have known better. It was just another case of ‘No fault found.’ We spent some considerable time ‘dancing around’ a summary of my phone problems. Their best advice for me was to keep doing exactly what I had been doing since 1989, keeping a record of all my phone faults. I could have wept. Finally they left.

A little while later, in my office I found that Aladdin had left behind his treasures: the Briefcase Saga was about to unfold.

The briefcase was not locked, and I opened it to find out it belonged to Mr Macintosh. There was no phone number, so I was obliged to wait for business hours the next day to track him down. But what there was in the briefcase was a file titled ‘SMITH, CAPE BRIDGEWATER’. After five gruelling years fighting the evasive monolith of Telstra, being told various lies along the way, here was possibly the truth, from an inside perspective.

The first thing that rang bells was a document which revealed Telstra knew that the RVA fault they recorded in March 1992 had actually lasted for at least eight months — not the three weeks that was the basis of their settlement pay-out. Dated 24/7/92, and with my phone number in the top right corner, the document referred to my complaint that people ringing me get an RVA ‘service disconnected’ message with the ‘latest report’ dated 22/7/92 from Station Pier in Melbourne and a ‘similar fault reported’ on 17/03/92. The final sentence reads: ‘Network investigation should have been brought in as fault has gone on for 8 months.’

I copied this and some other documents from the file on my fax machine, and faxed copies to Graham Schorer. The next morning I telephoned the local Telstra office, and someone came out and picked the briefcase up.

Just the information in this document of 24 July 1992 was proof that senior Telstra management had deceived and misled me during negotiations with me and showed too that their guarantees that my phone system was up to network standard were made in full knowledge that it was nowhere near ‘up to standard’.

Not only was Telstra’s area general manager fully aware at the time of my settlement on 11 December 1992 that she was providing me with incorrect information which influenced my judgement of the situation, placing me at a commercial disadvantage, but the General Manager, Commercial Victoria/Tasmania was also aware of this deception.

The use of misleading and deceptive conduct such as this in a commercial settlement such as mine contravenes Section 52 of the Australian Trade Practices Act. Yet this deception has never been officially addressed by any regulatory body. To get ahead of my story here, even the arbitrator who handed down his award on my case in May 1995 failed to question Telstra’s unethical behaviour.

I took this new information to Austel, and on 9 June 1993, Austel’s John MacMahon wrote to Telstra regarding my continuing phone faults after the settlement, and the content of the briefcase documents:


this letter states:

Further, he claims that Telecom documents (found in the briefcase) containnetwork investigation findings which are distinctly different from the advice which Telecom has given to the customer concerned.

In summary, these allegations, if true, would suggest that, in the context of the settlement, Mr Smith was provided with a misleading description of the situation as the basis for making his decision. They would also suggest that the other complainants identified in the folders have knowingly been provided with inaccurate information

I ask for your urgent comments on these allegations. You are asked to immediately provide AUSTEL with a copy of all the documentation which was apparently inadvertently left at Mr Smith’s premises for his inspection. In light of Mr Smith’s claims of continuing service difficulties, I will be seeking to determine with you a mechanism which will allow an objective measurement of any such difficulties to be made”.(See Arbitrator File No 61)

Telstra later told me they had copied the same ‘briefcase’ evidence on to AUSTEL for assessment.

Telstra’s Corporate Secretary 

On 27 August 1993, Telstra’s corporate secretary wrote to me about the same ‘briefcase’ documents, noting:

“Although there is nothing in these documents to cause Telecom any concern in respect of your case, the documents remain Telecom’s property and therefore are confidential to us.”

Later in the letter:

“I would also ask that you do not make this material available to anyone else.”(See Open Letter File No/2)

Telstra’s FOI document dated 23 August 1993 and labelled as ‘folio R09830’ with the subject listed as ‘The Briefcase’ is alarming to say the least. This document, which had been copied to Telstra’s Corporate Secretary, notes:

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

“The loose papers on retrofit could be sensitive and copies of all papers have been sent to.”(See Arbitrator File No 62)

The document headed Can We Fix the Can (see Main Evidence File No 16) clearly shows that Telstra’s rural network was in a much worse state than anyone could have imagined. The word ‘alarming’ is used in relation to this briefcase document because the second appointed TIO, later told the Senate Estimates Committee that COT/TIO-administered arbitration issues were openly discussed at regular monthly TIO Council meetings, which suggests that they would have been discussed at monthly TIO Board meetings too. In other words, Telstra having their corporate secretary attending monthly TIO Board meetings when COT case arbitration matters were discussed (such as this briefcase saga) was extremely beneficial, unless of course you were the claimant. It was clear from the briefcase information that Telstra was concealing just how bad their rural network was, from the government

I understand there is a new tariff filing to be lodged today with new performance parameters one which commits to 98% call completion at the individual customer level.

“Given my experience with customer disputes and the BCI study, this is a cause for concern. We will not meet this figure in many exchanges around Australia particularly in country areas”.

The pressure on all four of us COT  cases had been immense, with TV and newspaper interviews as well as their continuing canvassing of the Senate.  The stress was telling by now but I continued to hammer for a change in rural telephone services. The Hon David Hawker MP, my local Federal Member of Parliament had been corresponding with me since 26 July 1993.

“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” (See Arbitrator File No/76)

and on 18 August 1993 The Hon David Hawker MP again wrote to me noting:

“Further to your conversations with my electorate staff last week and today I am enclosing a copy of the correspondence I have received from Mr Harvey Parker, Group Managing Director of Commercial and Consumer division of Telecom. 

“I wrote to him outlining the problems of a number of Telecom customers in the Western Districts, including the extensive problems you have been experiencing”(See Arbitrator File No/77)


I have not concealed the name of this particular Telstra executive, Mr Harvey Parker, because I believe that, if other Telstra executives had carried out their duties as impartially as this executive did (as is shown in quite a number of documents), Telstra would never have decided that the COTs were such a threat. We four ordinary people were entitled to challenge a system that supplied the ‘big end of town’ with a reliable phone service while ignoring the other ‘end of town’, i.e. the small businesses that didn’t have the same sort of corporate power as Telstra did. If the COT arbitrator, and others close to him, had acted like this Telstra executive and actually looked into the claims we were making, rather than plot a way to just get rid of us as quickly as possible, I would still own the business next door – the Cape Bridgewater Holiday Camp. It now seems that no-one else involved in this COT dispute was as honest as this person, a true gentleman.

To summarise: Senators Alston and Boswell took up COT’s cases with Telstra and AUSTEL in August 1993, saying that if they were not swiftly resolved there would be a full Senate Inquiry. Telstra agreed to cooperate, and AUSTEL was authorised to make an official investigation into our claims. As a result of their investigation, AUSTEL concluded that there were indeed problems in the Telstra network and that the COT four had been diligent in bringing these issues into the public domain. It looked like four Australian citizens, without any financial backing, had won a significant battle.

Sometimes, we thought, David wins over Goliath, even in the 20th century. Because we were all in such difficult financial positions, AUSTEL chairman, Robin Davey, recommended that Telstra appoint a commercial loss assessor to arrive at a value for our claims. These claims had already been found generally to be valid in AUSTEL’s report, and it only remained for an assessor to determine an appropriate settlement based on the detailed quantification of our losses. This Fast Track Settlement Process was to be run on strictly non-legal lines. This meant we were not to be burdened with having to provide proof to support all of our assumptions, and we would be given the benefit of the doubt in the quantification of our losses. This was the process AUSTEL specifically deemed appropriate to our cases. Telstra was to give us prompt and speedy access to any discovery documents we needed to enable us to complete our claims as quickly as possible.

Telstra also agreed that any phone faults would be rectified before the assessor handed down any decision regarding payouts. After all, what good would a commercial settlement be if the phone faults continued? At last we began to feel we were getting somewhere. Robin Davey also assured us that any costs we might incur in preparing our claims would be considered part of our losses, so long as our claims were proved. However, he would not confirm this assurance in writing because, he said, it could set an unwanted precedent. Telstra was anxious about setting precedents. On 18 November 1993, Telstra’s corporate secretary wrote to Mr Davey pointing out that:

“… only the COT four are to be commercially assessed by an assessor. For the sake of convenience I have enclosed an amended copy of the Fast Track Proposal which includes all amendments. To facilitate its acceptance by all or any of the COT members I have signed it on behalf of the company. Please note that the offer of settlement by this means is open for acceptance until 5 pm Tuesday 23 November 1993 at which time it will lapse and be replaced by the arbitration process we expect to apply to all carriers following Austel recommendations flowing from this and other reviews.”

In effect, we four COT members were being given special treatment in terms of having a commercial assessment rather than the arbitration process. By this time AUSTEL was dealing with another dozen or so COT cases. We four were being ‘rewarded’ for the efforts we had made over such a long period of suffering business losses.

This internal Telstra email dated 14 October 1993, which was copied to three other senior Telstra executives, notes:
Concealing Documents

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

“Para 8. – Instead of “was not as high as desired” change to “did not meet customer’s expectations …”(see Arbitrator File No 59, FOI folio R03331)

A most startling document which I received long after my arbitration Telstra FOI folio 101072 to 10123 titled In-Service Test Performance For The Telecom Australia Public Switched Telephone Service (Telecom Confidential) notes:

“The performances tabulated below have been formulated to aid dispute investigation and resolution. The information contained herein is for internal Telstra Corporation use only and must not be released to any third party, particularly AUSTEL.” (see 101072 in Arbitrator File No 63)

Legal Professional Privilegei_482[1]

If AUSTEL had known that this document included the words: “must not be released to any third party, particularly AUSTEL”, perhaps their public servants might not have perjured themselves in defence of Telstra’s arbitration claims that all the Service Verification Testing at my business on 29 September 1994 had met all of AUSTEL’s specifications? And I believe those public servants certainly did perjure themselves, not only in their 2 February 1995 letter but again in the third COT cases quarterly report to the communications minister, the Hon Michael Lee MP. Our Main Evidence File No/2 and File No 3confirm that, at my premises at least, Telstra definitely did not carry out their Service Verification Testing (SVT) to AUSTEL’s mandatory specifications, at all.

At the very beginning of this Arbitrator Part One link I have raised the issue of the government communications regulator writing to Telstra, before the COT arbitrations began, to warn them that the government would be quite concerned if a certain legal firm had any further involvement with the COT settlement/arbitration process. I also raised my concern when the arbitration agreement faxed to the TIO’s office on 10 January 1994 bore the abbreviated name of this very same legal firm, despite the government assuring us this firm would NOT have a continuing role to play.

This FOI document folio, dated September 1993, was one of the 24,000 documents that were released to me by Telstra under FOI too late for me to use in my arbitration claim. As it was released to me, one would have to assume it relates to my telephone problems:

“All technical reports that relate to the customer’s service are to be headed “Legal Professional Privilege”, addressed to the Corporate Solicitor and forwarded through the dispute manager.” (Arbitrator File No/80)

When Telstra stated in September 1993 that they would not address further telephone complaints unless I first registered them in writing with their external lawyer, unfortunately I didn’t realise Telstra expected this process would classify all technical documents connected to complaints I registered with this firm as Legal Professional Privilege.

10 September 1993: Telstra FOI document folio N00749 to N00760, from this legal firm to Telstra’s corporate solicitor, relates to strategies that were about to be used in dealing with the COT arbitration cases. Folio N00749 is the first page of this strategy. Note, I have deleted the name of the legal firm who addressed this letter to Telstra:

“[We] would be happy to assist you should any further presentations to Telecom management be required on any of the matters raised in the issues paper or with regard to any other matters concerning management of “COT” cases and customer complaints.”


It is clear from FOI folio N00750 that this legal firm has singled out four of the COT Arbitration Cases businesses: Graham Schorer Golden MessengerAnn Garms Tivoli Theatre RestaurantMaureen Gillan Japanese Spare Parts and Alan Smith  Cape Bridgewater Holiday Camp, in which Legal Professional Privilege (LPP) was to be used to conceal documents from those four cases. In June 2000, renowned Legal Professional Privilege expert, Associate Professor Suzanne McNicoll, provided the COT claimants with the following legal opinion regarding Telstra’s external lawyers  ‘COT Case Strategy’ i.e.This document is important because this same legal firm was also involved with the employment of private investigators (paid by Telstra) in relation to at least one of the four COT cases and possible all four claimants.

“There is also some potential prima facie evidence of (4) i.e. knowingly making false or spurious claims to privilege. For example, there is potential structure set up for the possible abuse of the doctrine of legal professional privilege in the faxed document entitled “COT” Case Strategy, marked “Confidential” dated 10 September 1993 from (this legal firm) to Corporate Solicitor, Telecom Australia.”

This FOI document folio R00524 dated for the month of September 1993 was released to me by the Telstra under FOI and therefore appears to relate to my telephone problems noting:

“All technical reports that relate to the customer’s service are to be headed “Legal Professional Privilege”, addressed to the Corporate Solicitor and forwarded through the dispute manager”.

Telstra FOI document folio P03022 is an internal email dated 23 September noting:

“In the current climate Telecom needs to be particularly careful with its correspondence to the CoT customers. I have engaged (this legal firm) to participate on an “as required” basis in this matter and it is appropriate that all correspondence from the CoT (and near CoT) customers should be channelled through(the person I had to register my phone complaints with) for either drafting of the reply from Telecom or for the reply direct from (this same lawyer)as our agent.”(Arbitrator File No/81)

It goes on to say:

“Would you please ensure that with all customers that are, (or have the potential to become) serious complaints, correspondence is processed through (Telstra’ outside lawyers) with initial acknowledgement by the Region.”

On the 5 October 1993, Robin Davey, AUSTEL’s Chairman provides a draft of the agreement to be used in the four COT Arbitration Cases, for Graham Schorer (Golden Messenger), Ann Garms (Tivoli Theatre Restaurant), Maureen Gillan (Japanese Spare Parts) and Alan Smith (Cape Bridgewater Holiday Camp), Fast Track Settlement Proposal to Telstra’s Managing Director, Commercial  noting:

“Finally, if the attached letter (Attachment ‘D’) dated 7 July 1993 from (Telstra’s external lawyers) to one of the COT Cases’ solicitors is indicative of the way that(these same lawyers) have approached the COT Cases in the past, I would be more than a little concerned if they were to have a continuing role.”(See Arbitrator File No/107)

It is important to note that during the first week of January 1994, the COTs advised the TIO, who was also the administrator of both the Fast Track Settlement Proposal and the Fast Track Arbitration Procedure, that Robin Davey, had assured the COTs that this external legal firm would no longer be involved in their Fast Track Settlement Proposal. An internal Telstra email (FOI folio C02840) between Telstra’s executives notes:

“[Australian Financial Review news reporter] is following up on his own yarn NOT with the Davey letter to the minister but with the Davey letter to the CEO raising concerns about our use of [this same external legal firm]. (See Arbitrator File No/106)

Later, between January and March 1994, the COTs again spoke to the TIO concerning Telstra appointing this same external legal firm as their Fast Track Arbitration Procedure defence lawyers. The TIO’s response was that it was up to Telstra who they appointed as their arbitration lawyers, even though I advised the TIO (March 1994) that I had been forced to register my phone complaints through this legal firm and I had still not been provided with any technical data to support this legal firm’s assertions that there was nothing wrong with my telephone/fax service. Even the TIO Special Counsel had problems sending me faxes. During and after my arbitration I raised my concerns that the arbitrator had not addressed this legal firm’s submission of Telstra witness statements that had only been signed by lawyers and not by the witness making the statements.

Nothing was transparently done regarding this matter other than to send this witness statement back to be signed by the alleged author of the statement. My 1995/96 arbitration appeal lawyers (Law Partners of Melbourne) were not only staggered to learn about this witness statement issue, but was also staggered to learn that none of the arbitration fault correspondence that was exchanged between this legal firm, Telstra and myself was ever provided to me as it should have been according to the rules of discovery.

In fact, Law Partners of Melbourne suggested that perhaps Telstra had originally appointed this legal firm to be my designated fault complaint managers so that any of that correspondence would form what Telstra believed to be a legal bridge, so that my ongoing telephone fault evidence could be concealed under Legal Professional Privilege during my arbitration. Telstra’s continued use of this legal firm throughout these arbitrations and the arbitrator’s refusal, in my case, to look into why Telstra was withholding technical data under Legal Professional Privilege, suggested, that at the time, the arbitrator was not properly qualified. He didn’t seem to understand that Telstra could not legally conceal technical information under Legal Professional Privilege. As this story reveals, the arbitrator was, in fact, not a graded arbitrator at all, and was not registered as an arbitrator with the arbitrator’s umbrella organisation, then-called the Institute of Arbitrators Australia.


None of the ongoing fault complaint documents that I provided to this legal firm, both before and during my arbitration, were ever returned to me under the legal discovery process. What was so appalling about the TIO not abiding by the government regulator’s assurance in relation to this legal firm is that the Senate Estimates Committee investigation into five of the COT arbitrations, carried out between late 1997 and March 1999, found heavily against Telstra’s arbitration defense for concealing documents. In other words, if the TIO’s office had just done what the government regulator had wanted, I might not be here now, still trying to get justice through

At Camp Bridgewater, we acquired a logo especially for the over-40s singles club, which we were calling The Country Get-A-Ways. I approached this with determination, marketing a range of different week-end holidays. We had organised an outdoor canoe weekend, a walking and river cruise along the Glenelg River, a Saturday Dress-up Dinner Dance with a disco, a trip to the Coonawarra Wineries in South Australia and a Saturday morning shopping tour to Mt Gambier, also in South Australia. We marketed the holidays in both Victoria and South Australia. A special feature in the Melbourne newspaper The Age, gave the project a great write-up and I began to feel things were finally looking up for the camp. My spirits rose, at least temporarily. Then another plummet into despair: on 26 October a fax arrived from Catharine, a relative of the journalist who had written the feature for The Age:

“Alan, I have been trying to call you since midday.  I have rung seven times to get an engaged signal.  It is now 2.45 pm.”

Catharine had been ringing on my 1800 free-call line. Later, I checked this fax against Telstra’s own CCAS data for that day. Telstra’s records show one call at 12:01, lasting for 6 minutes and another call at 12:18.14, lasting for 8 minutes. There were no incoming calls at all between 12.30 and 2.44 that day. Where had Catharine’s calls been going? I was devastated but I decided not to let the bastards get me down. Their continuing lies and assertions that they had found no faults on my service line must be exposed. So, I stepped up the marketing of the camp and the singles-club week-ends, visiting numerous known social clubs around the Melbourne metropolitan area and talking personally to the people in charge. Over the next few weeks I spoke to the Phoenix Social Club in Camberwell, the Australian Social Centre in Hartwell, Frenze-In-Deed in Mont Albert and Capers in Knox City. I also visited other singles’ organisations in Ballarat and Warrnambool, and large country centres in Victoria. Further newspaper advertising followed with ads placed with the Leader Newspapers group in Melbourne.

This local newspaper group covers 23 different metropolitan areas around Melbourne. Ads also went into the local newspapers for a number of large regional centres around Victoria and South Australia, including the Geelong AdvertiserThe Warrnambool Standard, Ballarat’s The Courier, Horsham’s The Wimmera Mail-Times, the Colac Herald, Mt Gambier’s The Border Watch etc. Complaints about the phones continued. People had so much trouble getting through to the camp and, although some obviously persevered, God knows how many simply gave up trying. Pressures from Telstra’s lack of service delivery led to business losses, which resulted in an arbitration process being initiated in the first place. These pressures were then compounded by the inefficiency and corruption of an arbitration process that was supposed to resolve and rectify the situation. The combination of these events and experiences has led directly to health issues on a personal level for me, which no citizen in a developed country such as Australia with a modern communications services and carriers, should have had to endure.

Chapter Three

Fast Track Settlement Proposal

The Fast Track Settlement Process was to be run on strictly non-legal lines. This meant we were not to be burdened with having to provide proof to support all of our assumptions and we would be given the benefit of the doubt in the quantification of our losses. This was the process AUSTEL specifically deemed appropriate to our cases. Telstra was to give us prompt and speedy access to any discovery documents we needed to enable us to complete our claims as quickly as possible. Telstra also agreed that any phone faults would be rectified before the assessor handed down any decision regarding payouts. After all, what good would a commercial settlement be if the phone faults continued? At last we began to feel we were getting somewhere.

Robin Davey also assured us that any costs we might incur in preparing our claims would be considered as part of our losses, so long as our claims were proved. He would not, however, confirm this assurance in writing because, he explained, it could set an unwanted precedentDocuImage 620s

10 November 1993: The following FOI document was not made available to the COT cases before they signed their Fast Track Arbitration Agreement in April 1994. If it had been available, the COTs would never have agreed to abandon the commercial assessment process and sign for arbitration. This internal email from one of Telstra’s most senior executives to Telstra’s corporate secretary, was copied to Telstra’s CEO and is clearly marked as CONFIDENTIAL with the subject title COT Cases. Please note we have replaced the name of the Telecommunications Industry Ombudsman with the abbreviation, TIO.

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

Advice from (TIO) is: Boswell has not yet taken the trouble to raise the COT Cases issue in the Party Room.Any proposal to call for a Senate inquiry would require, firstly, endorsement in the Party Room and, secondly approval by Shadow Cabinet. …The intermediary will raise the matter with Boswell, and suggest that Boswell discuss the issue with (name deleted)(Name deleted) the TIO sees no merit in a Senate Inquiry.

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

Could you please protect this information as confidential?”

It could be said that the advice the (TIO) gave to Telstra’s senior executive, in confidence, (that the Senator Ron Boswell (National Party) Party Room was not keen on holding a Senate enquiry) could have later prompted Telstra to have the FTSP non-legalistic commercial assessment process turned into Telstra’s more preferred legalistic arbitration procedure, because they now had in-side Government privileged information there was no longer a major threat of a Senate enquiry. exposes this single act as possibly one of the worst acts of gross inconsideration by an Ombudsman towards Australian citizens. These citizens – COT “trailblazers” – were about to sign a specially designed, legally-binding Fast Track Settlement Proposal in an attempt to have their long-standing matters commercially assessed to avoid a more arduous and expensive legal process, in their long-standing commitment to make Telstra accountable. Our files on show that, two weeks before the TIO was officially appointed as the administrator of the Fast-Track Settlement Proposal, he was providing the soon-to-be defendants (Telstra) of that process with privileged, government party room information about the COT cases. Not only did the TIO breach his duty of care to the COT claimants, he appears to have also compromised his own future position as the official independent administrator of the process.

Telstra was anxious about setting precedents. It is clear from correspondence between Telstra’s corporate secretary and AUSTEL, prior to us signing the Fast Track Settlement Proposal, that only us four COT cases were to be offered this option. The settlement offer was only valid until 5pm Tuesday 23 November 1993, upon which time it would lapse and be replaced by the arbitration process offered to further complainants.

By this time, AUSTEL was dealing with another dozen or so COT cases. This special treatment, in terms of having a commercial assessment rather than the arbitration, may have been a ‘reward’ for the efforts we had made over such a long period of suffering business losses. Conversely, however, we were also pressured by this rush — we would lose the option for a commercial assessment if we didn’t sign by 23 November, a mere five days away. On signing this 23 November agreement I notified the other three COT Cases and Senator Richard Alston (Shadow Minister for communications) that I was withdrawing my support for the Senate Inquiry into Telstra. I explained that I had accepted AUSTEL’s promise of an early settlement by April 1994.


30 November 1993: This Telstra internal memo, FOI document folio D01248, from Telstra’s group manager – customer affairs and TIO council member, to Telstra’s, customer projects executive office. Subject: TIO AND COT. This was written seven days after the four COT cases had signed the TIO-administered Fast Track Settlement Proposal:

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

“I hope you agree with this.”

At the bottom of this memo the recipient has added a hand-written comment addressing another Telstra executive: Seems ok to me. When I spoke to [TIO]I suggested that at least for this first group …” (see Arbitrator File No/70).

Telstra FOI folio document folio D01248 states that:

“It was agreed that any financial contributions made by Telecom to the Cot arbitration process was not a matter for Council but was a private matter between Telecom, AUSTEL and the TIO. I hope you agree with this”.

This exhibit Arbitrator File No/70shows that, members of the TIO office who were supposed to be impartial, openly discussed COT case TIO issues. NO decent, law abiding citizen can argue that it was acceptable for Telstra, the defendants, to be represented on the TIO council, when ongoing discussions about COT issues could be relayed back to them by this TIO official who was also Telstra’s FOI officer and in charge of deciding which discovery documents were sent out, when, or even IF.

Obviously this person could easily delay the release of documents that would be most damaging to Telstra, and ensure they were released at a time that would cause the least amount of damage (to Telstra). His decisions could be guided directly by information he collected regarding the progress of the 12 or so COT arbitrations being discussed at TIO council meetings! This arrangement clearly provided the defence with constant access to incredibly important in-house knowledge. This situation turned out to be the beginning of the decay, which became a cancerous situation that destroyed the lives of many COTs and their families.

Senate Hansard dated 26 September 1997 (Arbitrator File No 68) confirms that during a Senate hearing into COT issues, the then-new TIO, agreed that this particular Telstra executive had not removed himself from council discussions when COT arbitration matters were discussed.

Could there possibly be a more sinister political twist to this particular person being allowed to attend TIO council meetings when the COT arbitration claims were being discussed? It certainly seems that way. The final statement made on this Senate Hansard by Telstra’s group manager – customer affairs/TIO council member that: “My involvement in CoT cases, I believe , was known to the TIO council,” suggests that the other TIO council members had the same disregard towards the COT Cases and their civil rights as this statement made by this particular councillor with two hats.

  1. How can any government or fair and legal-minded person say this one issue alone, allowing the defendants to be present at any meeting where their arbitration matters are being discussed, is anything but grossly undemocratic?
  2. Why has there not been a transparent investigation into this deplorable denial of normal protocol
  3. As a qualified lawyer, why didn’t the TIO ensure that this particular TIO council member excused himself while COT arbitration matters were being discussed?


A number of other small businesses in rural Australia had begun to write to me regarding their experiences of poor service from Telstra, including problems with their phones and various billing issues. Rural subscribers wrote to TV stations and newspapers supporting my allegations that, with regard to telephone services, rural small-business people as well as the general public suffered a very bumpy playing field compared to our city cousins. An insurance loss adjuster in Ballarat wrote to the producer of Channel 7’s Real Life, a current affairs program:

“I have watched with interest the shorts leading up to tonight’s program as I have similar problems to the man at Cape Bridgewater. Our office is located in Ballarat and due to Telstra structure the majority of our local calls are STD-fee based. On many occasions we have been unable to get through to numbers we have dialled, often receiving the message ‘This number is not connected’ or similar messages which we know to be untrue.

“Clients report that they often receive the engaged signal when calling us and a review of the office reveals that at least one of our lines was free at the relevant time. We have just received our latest Telstra bill which in total is up about 25–30% on the last bill. This is odd because our work load in the billing period was down by about 25% and we have one staff member less than the previous billing period.”

A letter to the Editor of Melbourne’s Herald-Sun Newspaper, states:

“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.”

Later, during my arbitration in December 1994, the Telstra employee who admitted to hearing this piercing noise denied experiencing any problems with my telephone service in his arbitration witness statement.


A Telstra internal email dated 13 December 1993, shows quite clearly that AUSTEL’s deputy chairman (who, as we cannot name him, we shall call the artful dodger or Dodger for short, after Charles Dickins’ character in Oliver Twist) allowed Telstra to limit their mandatory parameter testing to only those customers that Telstra stated required testing i.e.,

“This E-Mail is to alert you to a possible regulatory interaction with the current work on “COTS Cases” and ongoing work with AUSTEL on network performance.

“As you know, a Ministerial Direction gave AUSTEL power to set end-to-end network performance standards. …

“The AUSTEL staff member leading the group originally wanted a very wide list of mandatory parameters but after discussion with [Dodgerand a presentation to the Standards Advisory Committee by[name deleted], AUSTEL have agreed to limit the scope of the initial work to the few parameters our customer surveys had shown as being of most concern.” (See Arbitrator File No/72)

Dodger, in the above memo, was AUSTEL’s acting chairman at the time. It is easy to see just how bad this situation was for me by simply linking this limiting of the mandatory testing with another Telstra internal email, dated 15 November 1993, which states that:

“Parameters for Cape Bridgewater RCM have been obtained, but I don’t believe them – I am attempting to check them. Some of the people supplying this information live in ‘old Telecom’!” (See Arbitrator File No/73)

AUSTEL concealed these (Arbitrator File No/72 and Arbitrator File No/73 and Open Letter File No/4 File No/5 File No/6 File No/7) adverse findings against Telstra, concerning the many problems still occurring at the Cape Bridgewater Holiday Camp, from the communications minister, the arbitrator and myself.

And so, at end of February 1994, we were still without the promised discovery documents and being forced down Telstra’s legally structured path. Sure enough, we were all to become the lawyer fodder that Telstra had been aiming for, even before we signed our commercial assessment processes. Why didn’t the TIO-appointed assessor (who was, after all, not a properly graded arbitrator until long after my arbitration was over) hold his ground and demand that we four COTs keep to our commercial assessment process? Telstra had signed that agreement, just as we had. And perhaps just as importantly, why didn’t the arbitrator advise all the parties that he was not properly graded?

6 January 1994: AUSTEL’s General Manger of Consumer Affairs, John MacMahon, wrote to Telstra noting:

“You are probably aware of Mr Smith’s ongoing complaints as to the efficacy of his 008 service – he maintains that many callers receive a RVA advising that the number is no longer connected.

Further to that point is the experience of the Portland Tourist Information Centre which is now complaining of precisely the same problem.”(See Arbitrator File No/75)

Sold Out

Worse than this, however, was a new problem for the COT four. The assessor was somehow 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.On 17 January 1994, the TIO distributed a media release announcing that an assessor would evaluate the four COT fast track settlements. What the TIO omitted 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 Senate. We were beginning to believe that no single person and no organisation, anywhere in Australia, had the courage to initiate a judicial inquiry into the way Telstra steamrolled their way over legal process.

We had been told, AUSTEL had been told and the Senate had been told: 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 apparently were 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 brute force of Telstra’s corporate power.

Chapter Four

Between 4 June 1993 and 7 April 1994, Robin Davey, the chair of AUSTEL (the then government communications regulator) and John MacMahon, AUSTEL’s general manager of consumer affairs, discussed with COT spokesperson, Graham Schorer, and me the significance of Telstra’s concealed network documents contained in a briefcase inadvertently left at my businesses: AUSTEL directed Telstra to provide these documents. It is shown in Arbitrator Part One/Chapter Two that relevant sensitive – and damning – documents, originally in this briefcase, were concealed from AUSTEL by Telstra’s senior management.

AUSTEL advised Warwick Smith that after June 1993 it became obvious Telstra’s copper-wire network in rural Australia was grossly in need of replacing and that my ongoing telephone problems must be rectified before Dr Hughes could bring down his finding. Even though Dr Hughes was provided with conclusive proof, by his own technical resource unit as well as my own claim advisor, showing the telephone faults still affected the viability of my business, he still brought down his findings without ensuring my business was fault free.

During the time Dr Hughes did not address these ongoing billing problems, I was unaware Telstra and AUSTEL were about to address these arbitration issues in secret – outside of the arbitration agreement – and thus denying me my legal right to challenge Telstra, as I could had these matters been exposed in my arbitration. The government communications regulator had gotten into bed with Telstra.

Telstra’s Fast Track Proposed Rules of Arbitration

A forensic assessment of the 10 January 1994 document will show that, except for a few minor cosmetic changes, the agreement the four COT Arbitration cases signed on 21 April 1994, believing (as did various government ministers) it had been drafted by the president of the Institute of Arbitrators, had in fact been drafted by the defendants’ lawyers that the government communications regulator had assured the claimants would NOT be involved in their matters any further.

Even BEFORE the parties signed the agreement and, without the claimants’ knowledge or consent, a meeting on 22 March 1994 was attended by Telstra’s arbitration liaison officer, Telstra’s general counsel, the arbitrator, TIO special counsel, the TIO and the TIO’s secretary. This meeting discussed important issues concerning the conduct of the four arbitrations without the presence of any COT claimant or representative and, because of the secrecy surrounding this meeting, the claimants weren’t even able to comment on the proposals put to the meeting. If Graham Schorer (COT spokesperson) or I had been represented then the resulting alterations to two of the clauses in the arbitration agreement would certainly never have been allowed.

If Graham Schorer and I had known about the alterations discussed at this meeting a month before our lawyers agreed to accept the agreement, we would never have agreed to sign it. The arbitration agreement included a confidentiality clause that covered events that occurred DURING the arbitrations process but did NOT cover events that occurred before the arbitration had commenced. 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 perverted the course of justice during my arbitration, this confidentiality clause has so far stopped any investigation into this unlawful conduct.

Who Paid Grant Campbell? Letter File No/56-A to 56-Dshow Telstra’s Grant Campbell was associated with my FTSP in the very early days. This facsimile cover sheet (Open Letter File No/56-A) from Mr Campbell to Warwick Smith concerning Allan [sic] Smith – Cape Bridgewater Holiday Camp, and the expression of interest by Ferrier Hodgson, discusses my ongoing faxing problems.

When these documents came to light, they confirmed Grant Campbell was officially signing off correspondence on behalf of Warwick Smith, including official FTSP correspondence.

Neither Warwick Smith, nor anyone from the TIO’s office, ever informed me that Grant Campbell was temporarily seconded from Telstra to Warwick Smith’s office, where the TIO gave him the power to scrutinise my claim material. And, without any checks by anyone, including Dr Gordon Hughes (then appointed assessor) or Ferrier Hodgson Corporate Advisory (the resource unit). Like Telstra council and board members Ted Benjamin, Chris Vonwiller and Jim Holmes, Grant Campbell had free range at the TIO office and was allowed to formally classify my ongoing telephone and fax problems as ‘new’ problems and therefore not connected to my FTSP claim, despite Warwick Smith and Mr Campbell being fully aware, at the time, that this was not the case.

Open letter File No 54-A to 54-F and Open Letter File No/4 File No/5 File No/6 File No/7, record my ongoing telephone and faxing problems from at least October 1993. These documents were supplied to Warwick Smith as the official administrator, on 27 January 1994, to forward to Dr Gordon Hughes, Mr Peter Bartlett and Mr John Rundell. An interim claim dated 27 January 1994 is available at Open letter File No/46-A.

I continue to demand answers as to why Dr Hughes and John Rundell never addressed this first part of my FTSP claim and, as of January 2017, I have not received advice as to why it was not discussed in the arbitrator’s written findings. Are we to presume that, like many of my unaddressed claim documents, this information never reached the assessor/arbitrator because Telstra’s Grant Campbell and the arbitration resource unit had first access to which documents would be submitted to the arbitrator (in a secret deal arrangement entered into by Telstra, Warwick Smith and the arbitration resource unit)?

FOI documents were provided to Australian Liberal/National Party executives, including the previous prime minister, Tony Abbott, and the now deputy prime minister, Barnaby Joyce. These documents prove I was not told Mr Campbell was seconded from Telstra during my FTSP: I believed Mr Campbell was a TIO employee. I did not know that, when I presented him with various 008/1800 billing FTSP claim exhibits, proving Telstra had a national network 008/1800 billing problem, I was helping the defence and severely damaging my claim.

These same FOI documents also show that, after Mr Campbell returned to Telstra, he began addressing the same 008/1800 billing problems he previously assessed in connection to my case while wearing his TIO hat, only now he was making those assessments while wearing his Telstra hat in relation to another COT claimant from Brisbane, Queensland.

To have allowed the defendant access to the opposing side’s claim material, before the claimant decided which information to submit to the assessor and/or arbitrator and which to keep back in order to answer the defendant’s defence, was highly undemocratic conduct: how can a Western democracy allow this to happen?

In most Western democracies, if such conduct during a litigation process is brought to the attention of the authorities, then those responsible for that conduct and those who allowed it to flourish, are held accountable for the damage they caused. The TIO’s office and Telstra have never assisted me to resolve this issue, and this confirms what I say on there is one law in Australia for the bureaucrats and another for the man on the street. Grant Campbell signed a letter to Telstra, dated 9 February 1994, while wearing his TIO hat and on behalf of Warwick Smith. Regarding my loss of fax capacity, he states:

“I spoke with Alan Smith on 9th instant following on the 8th instant [sic].

“He has agreed that this is a new matter and whilst it may be indicating some ongoing problems, it is not a matter that relates directly to the preparation of his material to be presented to the Assessor.” (See Open Letter File No/56-A to 56-B)

This comment however does not correlate with the many problems I continued to experience and record, throughout my FTSP, nor the 31 January 1994 account for my dedicated fax line, including the following exhibits.

A letter, dated 21 January 1994, that I received from my FTSP accountant, Selwyn Cohen, states:

“I refer to your facsimile of 10.42 a.m. on 17th January 1994. The fax cover sheet refers to 7 pages being sent. Unfortunately, I only received 2 pages.

“Please forward the remaining 5 pages to enable me to begin the required work.”(See Open Letter File No/56-D)

A letter from Stedman Cameron, dated 2 February 1994, states:

“We note that you did not receive two pages at all and only the number 2 from the third page and the signature from the last page of the facsimile sent to you at approximately 2.23 p.m. on the 1st February, 1994.

“It was successfully sent approximately two hours later.” (See Open Letter File No/56-E)

Open Letter File No/56-F is a letter, dated 25 February 1994, from the minister for communications’ office, detailing the ongoing telephone and faxing problems I was experiencing. My interim letter of claim, dated 27 January 1994, addressed to Dr Hughes, Warwick Smith, Peter Bartlett and John Rundell (see Open Letter File No/ 46-A) had a 37-page report attached to it showing massive ongoing faxing problems beginning in January 1993, at the latest.

I gave two pages of data from Telstra’s Call Charge Analysis System (CCAS) Grant Campbell and Warwick Smith. These printouts (see Open Letter File No/56-H) are particularly interesting because a handwritten list on them indicates Telstra secretly monitored and recorded people I spoke to on the phone or faxed in connection to my FTSP.

Not so amazing is the fact that none of the information I document above, concerning loss of faxing capacity, is mentioned anywhere in Dr Hughes’ award or the DMR and Lane reporting, which suggests that Telstra’s Grant Campbell thought it important to misinform all interested parties concerning my settlement/arbitration faults in order to minimise Telstra’s liability.

Open Letter File No/56-C shows my faxing problems were still continuing in October 1993. This also contradicts Mr Campbell’s statement, on 9 February 1994 (see Open Letter File No/56-A to 56-B), that I advised him these faxing faults were new problems.

Open Letter File No/56-G is a Telstra two-page internal memo, dated 3 March 1995, for the attention of D Campbell, T Benjamin, S Black and G Campbell. Ted Benjamin and Steve Black were, in March 1995, Telstra’s arbitration liaison officers to my arbitration and Grant Campbell was well situated in Telstra’s arbitration unit. Doug Campbell was Telstra’s group general manager of operations, possibly the worst of Telstra’s “dirty-tricks departments” (so named in the Senate Hansard of 26 September 1997). All four employees were firmly involved in my arbitration. How is it possible that Warwick Smith allowed Grant Campbell anywhere near my claim documents? My FTSP claim documents that were originally addressed to Dr Hughes, Peter Bartlett, Warwick Smith and John Rundell (see Open letter File No/46-A) have never been returned to me.

Warwick Smith again assists Telstra’s FTSP defence

Not only did Warwick Smith allow Grant Campbell access to my claim material, but he then allowed his own resource unit to also have first access to Telstra arbitration procedural information, in a secret deal concocted with the defendants, which allowed the resource unit to decide what documents THEY believed the arbitrator should see and which should be discarded under the heading A Secret Deal. This is why the other COT cases and I are still fighting for our right to a fair, properly conducted, transparent, arbitration process.

FTSP – Commercial Assessment v FTAP – Arbitration

To present this statutory declaration in some sort of chronology of events we need to begin before April 1994, when the appointed commercial assessordecided, with the first TIO and the defendants (Telstra), to turn the commercial assessment, FTSP, into a highly legalistic arbitration process. Telstra’s lawyers controlled at least 33 of Australia’s largest legal firms and most, if not all, of Australia’s technical resource units (see Senate Hansard for 24 June and 26 September 1997). By using Telstra’s drafted arbitration agreement, faxed to the TIO on 10 January 1994, Telstra had their foot in the door to control the whole arbitration process. Later, Dr Hughes alerted the TIO, in his letter of 12 May 1995 (see Open Letter File No 55-A), that they were duped by Telstra into using an agreement that did not allow enough time for the:

“inevitable delays associated with the production of documents, obtaining further particulars and the preparation of technical reports”.

The only choice these two lawyers should have had was to admit they misled and deceived the four COT cases, the claimant’s lawyers and many of Australia’s government ministers, including the Canberra Parliament House press gallery, into believing the arbitration agreement was totally prepared independently of Telstra, when this was far from the truth, as they both knew. Instead, they decided to conceal, what they had done and by doing so they have stolen 22-years of our lives.

Four Australians were prepared to stand up against the monster Telstra and its CEPU thugs, who were stealing millions upon millions of dollars from the public purse (see

AUSTEL’s chair Robin Davey (see Open Letter File No/50-A) was clear at point 40 in his letter of 5 October 1993: Telstra’s main lawyers, Freehill Hollingdale & Page, were not to have a continuing role in COT matters due to their previous conduct towards the COT cases. In my case, prior to my FTSP, Telstra refused to investigate my ongoing telephone problems unless I first registered them in writing with these lawyers. I did not received back one single fault complaint document that I provided Freehills, during the period I was forced to register my complaints with them, nor any responses they received from their client Telstra under FOI during my arbitration (see Open Letter File No/50-B and 50/C). Telstra and Freehills were able to conceal, from the arbitration, just how bad my ongoing telephone and faxing problems were.

Anyone who dared challenge Telstra’s ailing copper-wire network and their use of known-faulty telecommunication equipment, in the 1980s, were marked for character assassination: something both Warwick Smith, Dr Hughes and his arbitration project manager, John Rundell, also adopted in 1995 and 1996, in their so-far successful attempt to discredit me and my fellow COT colleagues.

Chapter Five

Ambit of the Victorian Commercial Arbitration Act 1984

While the ambit of the Victorian Commercial Arbitration Act 1984issue appears on the Senate Page, it is important to raise it here too, in our Arbitration Page.

24 January 1994: This letter to the arbitrator from the TIO Special Counsel, provides further proof that the first four arbitrations were to be conducted according to the “ambit of the Commercial Arbitration Act 1984”. This particular representative from the TIO Special Counsel was, in fact, also the President of the Institute of Arbitrators Australia when he advised the arbitrator:

“We discussed whether or not the Procedure should come within the ambit of the Victorian Commercial Arbitration Act 1984. We decided that it should.”

On page two, he adds:


“On balance, it was decided that it would be preferable to have the Procedure operating under the ambit of the Commercial Arbitration Act.

You will note that I have amended the Procedure so that it is clear that you are conducting four separate arbitrationsand will hand down four separate awards although you may combine some aspects of the four hearings.” See Arbitrator File No/105)

Please click onto Arbitrator Part Two and learn more about what happened during the COT arbitrations was against the rule of law.

What Happens If Arbitrators Suspect Criminal …

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