CAV Part One (copy)

Accessing the evidence

When a manuscript telling the COT story was first contemplated (see My Story) it quickly became clear that it would be very difficult to believe that a saga like this could continue for twenty or so years, in a democracy like Australia, but there are untold numbers of official documents that prove the truth of the story, every step of the way and copies of those actual documents are included throughout the book.  It is the documents that help to explain the frustration that the COTs have had to deal with, for all those years.  When the arbitration process was first suggested, the COTs, who would officially be ‘the complainants’, expected a qualified, arbitrator, an ombudsman who would search for the truth. Unfortunately those expectations couldn’t have been further from reality!

Back in 2007, before Graham Schorer (Golden Messenger – Courier Service) and Alan Smith (Cape Bridgewater Holiday Camp) ever thought of putting their story into a book, they began to compile a database to record the thousands upon thousands of documents they were collecting, and, since then, between them, they have completed eight separate, detailed reports, each one with a multiple of supporting documents.  Four of those reports are directly related to Graham (GS) and Alan (AS) and four are related to other people who were involved in the COT saga, e.g. various public officials, the TIOs’ office and a number of government ministers.  As the process of putting their story into a publication the reader could clearly understand it became clear that this was going to be even more complex than anyone had expected and, so that Graham and Alan could be positively sure of the facts, they also set up a separate database to keep track of all the people who were important to their cases. Each individual record in this database includes a separate document describing how that person is connected to the COT story, a list of their professional qualifications and at least one FOI or other official document related to each individual.  That profile database now covers 171 individuals.

The same simple document numbering system is used throughout the book; any document referred to by a number preceded by GS relates to Graham and anything preceded by AS relates to Alan.  If ‘CAV’ is included after those initials, this indicates that the documents are filed in our main data base under ‘Consumer Affairs Victoria.

All the main statements made in our story are supported by Exhibit documents which have been transferred onto the CD which has been enclosed with our story.  Each entry in “Ring for Justice  (e.g. GS 1 etc.) refers to an Exhibit with the same number (e.g. Exhibit 1 supports entry CAV GS 1) and the Exhibits on the CD are divided into separate website links > GS-CAV 1 to 88GS-CAV 89 to 154-A – GS-CAV 155 to 215 – GS-CAV 216 to 257 and AS – CAV 1 to 47 – AS-CAV 48-A to 91 – AS-CAV 92 to 127 – AS-CAV 128 to 180 etc

We have recorded at least ten lines, and sometimes three-quarters of a page of information for each person and supported that information with at least one FOI or other document related to each individual we researched.  That profile database now includes 182 individuals. We have decided to detail this research and record-keeping as testament to the amount of work that has gone into preparing ‘Ring for Justice and the next publication The Briefcase’.

Although we originally planned to produce this story as just that a story, we quickly found that the details are easier to follow if they are sorted into separate topics and in date order, because each of those individual topics has been spread out over many years.  The topics we have chosen include, among others, the general deception and corruption that contaminated the TIO administered arbitrations; the illegal interception of many documents legally submitted to the arbitration by the claimants; the details of documents that were lodged with the arbitration but never addressed or referred to in the awards; discovery documents that were requested under the agreed process of the Freedom of Information Act but were either not supplied, supplied in part format, wrongfully withheld under legal profession privilege and/or defaced/blanked out rendering the document illegible, undecipherable and documents that were apparently somehow lost in the fax system and therefore never reached the arbitrator.  Taken together, these topics all contributed to the end result – an entirely undemocratic arbitration process.

A well respected ex-senior Victorian Police officer has been helping Alan and Graham with helping resolve these issues since 2003 and, in October 2007, on their behalf, he personally submitted more than thirty-two separate volumes of evidence to Consumer Affairs Victoria (CAV) but so far,  – in 2014, the State of Victoria Department of Justice have declined to make a finding on that material which is included in our story “Ring for Justice”.

It is most important for the reader to understand how difficult it have been to write an unbelievable story for who in their wildest dreams would truly believe lawyers, not just one lawyer, but many would go against the teachings they agreed to abide by when at university when they were study to become lawyers. Who, even though it has become clear from the many corruption scandals that have shaken the very foundation of State and Federal Parliament in 2013 that as they go through this story they will observe that any matter of importance in Alan’s story and/or in the Graham Schorer addendum Conflict of Interest segment at the conclusion of this story are supported by evidential material which can be accessed from the accompanying CD as discussed aforementioned above.

In Alan’s letter of 28 October, 2013 to the Hon Malcolm Turnbull MP, Federal Minister for Communications (AS 1052) he noted:

“I am sure that you, as a very smart lawyer, will be able to see, once you have read the enclosed document addressed to Dr Hughes and Mr John Rundell titled Alan Smith – Characterisation of misconduct summary October/November 2013, and the Exhibits on the enclosed CD that my claims are not frivolous and I am not a vexatious litigant.

As you would know, the Commissioner’ in both the Fitzgerald and Justice Woods Royal Commissions clearly specified that it was totally unacceptable for police divisions to be allowed to investigate allegations of misconduct within those divisions. These two Royal Commissions, including the Independent Commission Against Corruption and the Australian Crime and Misconduct Commission, further confirm that what the first TIO allowed to happen during the COT arbitrations should NEVER have been tolerated, in any sense of the word. It is alarming enough to learn that TIO allowed Telstra (the defendants) to attend monthly TIO Board and Council meetings when COT arbitration issues were  discussed (see Senate Estimates Committee Hansard dated 26 September 1997), and  brokered a secret deal with Telstra so that the TIO’s Arbitration Resource     Unit would be given the power to decide which documents the arbitrator would see during the arbitration and which would be concealed but there were other, similarly appalling events that the TIO appeared powerless to stop taking place during my arbitration.

On 12 February 2014, the Hon Malcolm Turnbull wrote to Mr Daniel Tehan MP, Federal Member for Wannon (AS 1025) noting:

“I refer to your correspondence dated 6 December 2013 on behalf of Mr Alan Smith concerning consumer issues. Mr Smith has contacted this portfolio on a number of occasions in relation to various issues, which have been previously considered by the Department of Communications. These matters were first raised in 1988 and over the last 20 years all avenues for consideration both within Telstra and the Government have been exhausted.

As there is no new information raised in the correspondence from Mr Smith, I am unable to provide further assistance in this matter”.

This letter is a perfect example of the sort of merry-go-round that I hasve been dealing with for more than twenty-two years, a situation that has been solely created by the Australian Government and their minders, even though these minders know that my claims are valid.  An important issue that is not discussed in the Malcolm Turnbull letter is that although Mr Turnbull’s minders, who are all public servants, know that someone with access to the government carriers network hacked into and screened faxes travelling to and from the premises of the COTs and their lawyers and advisors, and even Mr Turnbull’s minders know that if this screened confidential material was then passed on to the defendants (who owned the network)  it would have provided them with an advantaged gained illegally. And yet Mr Turnbull’s minders are is still prepared to say that: “… all avenues for consideration both within Telstra and the Government have been exhausted”.  Is the author of Mr Turnbull’s letter actually implying that it is OK for the previous defendants in an arbitration to investigate itself for hacking into the claimants faxed claim material during those arbitrations in which those defendants were party to?  How can Mr Turnbull suggest that a self-investigation legitimately proves that the previous owned government telecommunications carrier has no case to answer, when my Exhibits in our Main Evidence File No 7 & 8) prove that this hacking did take place?  We have to go no further that the Murdoch News of the World hacking scandal in the UK to find answers to those questions because, surely neither the British public nor the British Government would ever have allowed the Murdoch’s to investigate their own hacking? And yet, here in Australia, the Government simply accepts whatever this Corporation says as fact, without question.

When the Hon Malcolm Turnbull signed his 12 February 2014 letter, including his comment that: “… all avenues for consideration both within Telstra and the Government have been exhausted”, did he not remember his own involvement as a lawyer in the famous Peter Wright Spycatcher trial (Mr Wright was a former Assistant Director of M15)?  Since Mr Turnbull had once been a qualified, practicing, leading Barrister in cases such as the Spycatcher trial, surely he would know that the Telstra’s destruction of evidence needed in a legal proceeding was a serious crime, so why has he allowed Telstra to investigate themselves in relation to my claims?

In October 2007, after meeting with me and two reliable witnesses, Consumer Affairs Victoria (CAV) asked that I prepare the evidence supporting my claims in the manner currently presented in absentjustice.com (CAV folder files, AS CAV and GS CAV). Peter Hiland, Consumer Affairs Victoria (CAV) senior barrister, read much of my submission. He then asked one of the witnesses – a very prominent ex-senior member of the Victorian police who had held the position of commander, as well as the Order of Australia – for the same evidence to be provided on a CD so as CAV members could appreciate the true extent of the cover-up that transpired before, during and after the COT arbitrations. I, of course, I created the CD because Mr Hiland clearly remarked that, as a barrister serving with the Victorian government, he had been waiting for this type of evidence for more than a decade. However, over the next 18 months, the investigation folded and my advisor and I were told the government was no longer interested. I raise this CAV issue because, in 2008, I submitted the same evidence, still titled AS-CAV and GS-CAV, to the Australian Communications and Media Authority in order to gain further Freedom of Information documents from the Australian government through the office of the Administrative Appeals Tribunal. In this way, the evidence on this website absentjustice.com has been in the public domain since 2007 and in front of three government agencies; not one of those agencies refuted my CAV evidence. In fact, transcripts, dated 3 October 2008, show Mr GD Friedman, senior member (judge), upon hearing my Administrative Appeals Tribunal case No V2008/1836 (after reading my 169-page Statement of Facts and Contentions describing the relevance of my CAV evidence, stated:

“Let me just say, I don’t consider you, personally, to be frivolous or vexatious – far from it.

“I suppose all that remains for me to say, Mr Smith, is that you obviously are very tenacious and persistent in pursuing the – not this matter before me, but the whole – the whole question of what you see as a grave injustice, and I can only applaud people who have persistence and the determination to see things through when they believe it’s important enough.”

For the purpose of this report, I shall refer to myself as either Alan Smith or Alan.

A number of government agencies seem to have been complicit in a cover-up of Telstra shortfalls. For well over 20 years, Alan and Graham Schorer (COT spokesperson) have been attempting to get Telstra to take responsibility for financial losses that businesses incurred due to faulty telephone and fax lines.

Cape Bridgewater Holiday Camp – Golden Messenger 

Alan believes the skills he gained during his time at sea and working as a chef and steward, together with experience accumulated during many and varied catering jobs, provided him with a good base on which to build his own business.

Before Alan moved to Cape Bridgewater, and for the first three months after he moved there, he visited many Victorian metropolitan and country schools, including the Wimmera and south-west regions, Geelong and Warrnambool, and distributed 2,000 brochures about his camp.  The camp co-ordinators at these schools were most interested in the package he presented.

After opening the business with all the promotional time and effort noted above, Alan was surprised to find that he was not receiving the number of enquiries he expected.  Particularly since many prospective customers indicated they would phone as soon as they checked available dates, etc.  Alan wondered if this lack of incoming phone enquiries meant there was a problem with the phone lines?  A number of friends soon confirmed this, telling Alan and his wife, Faye, that they were receiving constantly engaged signals or, alternatively, a phone message saying that his phone was disconnected

Alan’s FOI and discovery issues caused severe problems, not only for Alan but also for the arbitrator, which meant that Alan’s matters were arbitrated on the arbitrator only had limited material in which to use to make a determination on Alan’s claim. John Pinnock (administrator of Alan ’s arbitration), addressed the Senate on 26th September 1997, saying

“… it is enough to say that the process was always going to be problematic, chiefly for three reasons. Firstly, and perhaps most significantly, the arbitrator had no control over that process, because it was a process conducted entirely outside the ambit of arbitration procedures.”

The Arbitration Agreement Alan signed, on 21st April, 1994 states:-

10.2:    “In relation to the Claimant’s loss, the Arbitrator:

10.2.1:   will take into account the Claim and Defence Documents, any Reply and supporting documents, written evidence and submissions made by the parties and, if applicable, any sworn or affirmed oral evidence presented to the Arbitrator by the parties to the arbitration together with any information obtained by the Resource Unit or any advice given to him by the Resource Unit.

10.2.2: will make a finding on reasonable grounds as to the causal link between the alleged service difficulties, problems and faults in the provision to the Claimant of telecommunication services and the losses claimed and, as appropriate, may make reasonable inferences based upon such evidence as is presented by the parties together with any information obtained by the Resource Unit or any advice given to him by the Resource Unit. Unless the Arbitrator is able to conclude that Telecom caused the loss claimed, there will exist no basis for a claim against Telecom.

11. The Arbitrator’s reasons will be set out in full in writing and referred to in the Arbitrator’s award.”

No written finding was ever made by the arbitrator or the TIO-appointed technical consultants as to the validity of Alan’s arbitration claims or whether they believed Telstra rectified the problems and faults Alan raised in his arbitration.

CHAPTER ONE

2nd & 6th September, 1988:  Telstra continues to record Alan’s complaints as the phone problems worsen.  Often the line remained dead (locked up) for some time after a call was terminated.  This problem often was not noticed until they lifted the receiver to dial out of the business. AS – CAV 1

25th October, 1988:  This Telstra hand written fault document, FOI folio K25232, states:-

“52 Fail (17.3%)..

“Congestion Tone always dropped back to internal comm – get local congestion tone…

“Busy tone 30-50% GS-CAV 28-A

Alan Smith’s Cape Bridgewater Holiday Camp was routed through an unmanned RCM multiplexer system, at Bridgewater, to the Portland AXE exchange.  Graham Schorer’s business, Golden Messenger is also serviced by an AXE exchange.  Although not dated, the following Telstra documents are believed to have been produced around this period.

Exhibit GS CAV 28-B titled National Network Operations – Melbourne discusses the AXE Ericsson exchanges and insufficient CL as a causes of congestion – a problem North Melbourne exchange suffered.

(4) TNE:-

“Congestion being experienced in AXE exchanges due to shortage of CL, PD and RE ‘individuals’ has been brought to the attention of TNE so that designers can be made aware of the problems.”

Exhibit GS CAV 28-C, titled CL Record insufficiencies, states:-

“If there are insufficient CL records then the AXE will send congestion to the A party.”

Exhibit GS CAV 28-D is a 2nd July 1992 Telstra Internal Minute, from Mark Ross, Customer Services Manager, to Network Operations.

Exhibit GS 28-E is an internal memo dated 29th November 1993 from National Network Investigations to Harvey Parker, Group Manager Director of Commercial and Consumer.

This statement made in the internal minute:-

“Please find enclosed documentation in regard to a Grade of Service Complaint from Mr Alan Smith of Cape Bridgewater.

“Our local technicians believe that Mr Smith is correct in raising complaints about incoming callers to his number receiving a Recorded Voice Announcement saying that the number is disconnected.

“They believe it is a problem that is occurring in increasing numbers as more and more customers are connected to AXE,

and the statement made in the Telstra internal memo:-

“As the performance quality of the network is directly translated to customer satisfaction and cost and quality of Fault Management, caution is also expressed about the decision on which switch should be used for FMO. I have long held the view the AXE switch provides an inadequate and crude Fault Analysis & Diagnostic tools [sic]. Attempts to have improvements incorporated have been acknowledged, but nothing has changed,”

confirm there were problems associated with the Ericsson AXE system.

It is also interesting to note, that in the official AUSTEL COT Cases Report dated April 1994, at point 7.40 – AUSTEL states:-

“…AUSTEL recently became aware that Telecom had prepared an internal document on the subject of this AXE fault and on 21 March 1994 sought a copy from Telecom.”

A copy of this AXE report was not provided, under FOI, to either Graham Schorer (COT spokesperson) or Alan Smith.

The AXE Ericsson exchange problems (see also below for the dates of 16th July, 1997, 24th July, 1997, 20th August,1997 and 16th September, 1997), were one reason the COT cases suspect the TIO-appointed Arbitration Technical Consultants, Lane Telecommunications, had a conflict of interest before they were removed from the arbitration process.

6th & 10th January, 1989:  Telstra continues to record our complaints.  As the weeks go by and Alan’s business, which should have been flourishing by now, begins to vanish before their eyes.  Alan and Faye begin to wonder if they should have moved to Cape Bridgewater at all.  Family arguments ensue as Alan pushed to sell their family home in Melbourne (with its in-ground swimming pool and spacious back yard) and asked his wife, Faye, to give up her thriving dressmaking business.  Alan does not lay the entire blame for his 20-year marriage breaking up on Telstra’s doorstep, but the constant stress created by prospective customers not being able to reach them on the phone in Cape Bridgewater, was certainly a major factor.  When Alan now looks at Telstra FOI documents, confirming Telstra knew, all along, that their phone problems were caused by the poor network into Cape Bridgewater (while they continually denied the problem), he finds it really difficult to accept.  If Telstra had addressed the rural phone problems in Cape Bridgewater when he first raised them, he might well still have a marriage and contact with both his children.

Faye and Alan split up

20th October 1989:  Finally, Faye leaves and after Alan gets through the first awful weeks with the support of friends, he begins to assess his new, single, situation and it becomes obvious that running the business alone was going to take a lot of time and energy.  However, local Telstra technicians assure him, there are no real problems with the Cape Bridgewater exchange and that, once the new RCM exchange was installed, any lingering minor congestion problems will be eliminated.  After Alan and Faye split up (see AS – CAV 2), the telephone problems continued (see AS – CAV 3 to 5).  Telstra knew there was a major fault, as these exhibits show, but chose to conceal these facts.

A brief overview of Alan arriving at Cape Bridgewater with his wife and family are recorded in his condensed manuscript

Trade Practices Act 1974

Part VA – Liability of manufacturers and importers for defective goods

“Commonwealth mandatory standard, in relation to goods, means a mandatory standard in respect of the goods imposed by a law of the Commonwealth. …

“mandatory standard, in relation to goods, means a standard:

  • for the goods or anything relating to the goods; and
  • that, under a law of the Commonwealth, a State or a territory must be complied with when the goods are supplied by their manufacturer, being a law creating an offence or liability where there is such non-compliance.”

A number of Telstra senior employees knew, before they sold the Flexitel System to Graham Schorer, that the system had limitations and software constraints.  Please consider the following points shown immediately below, regarding Alan Smith’s EXICOM TF200 touchfone problems.  These problems may seem unrelated to Graham Schorer’s Flexitel issues, but there are similarities:  Telstra not only provided a known-faulty product to Golden Messenger, they also provided a known-faulty product to Alan Smith.

  1. Information shown in this report confirms some Telstra employees agreed that (1) there were congestion problems at the exchanges that serviced Graham’s business, Golden Messenger, and (2) the Flexitel System installed at Graham’s premises by Telstra did not have the capacity to handle the amount of calls coming into the business.
  2. It is also confirmed, in Alan Smith’s CAV Chronology and supporting material, that numerous internal Telstra file notes and correspondence show that, like Graham, Alan’s business suffered as a result of congestion at his local exchange, which serviced the unmanned RCM system at Cape Bridgewater. Also, like the Flexitel software problems in Graham’s case, it was widely known throughout Telstra that there were major lock-up problems with their EXICOM TF200 phones.  Yet, Telstra’s laboratory technicians denied this known problem was part of Alan’s issues, even going as far as conjuring up a report stating that all the problems with Alan’s EXICOM TF200 were caused by ‘wet and sticky’ beer spilt inside the phone.
  3. In Alan Smith’s case, after Telstra replaced his faulty EXICOM TF200 with another EXICOM, Alan’s business continued, as Graham Schorer’s had, to suffer from problems with the phone system. In Alan’s case, the arbitrator and the arbitration technical consultants appointed by the Telecommunication Industry Ombudsman failed to address the lock-up problems:  apparently, because they believed Telstra’s laboratory TF200 ‘wet and sticky beer’ report (see Tampering With Evidence).

The following points further support the similarities between Graham Schorer and Alan Smith’s cases:

  1. On 20th November, 1986 as mentioned above, Ray Shenton of Philips (Australia) faxed Telstra, information confirming the Flexitel System had a number of problems eight months before Telstra sold the Flexitel to Graham Schorer.
  2. Telstra internal memos and minutes, dated between 6th and 9th January, 1987 (see above), also confirm Telstra’s awareness that the Flexitel System had a number of limitations.
  3. In the Ted Benjamin Target file Appendix 32, and supporting documents provided to the CAV LGE Targets, there is enough material showing that the lock-up problems, experienced by Alan Smith with the Telstra-supplied EXICOM TF200, were not caused by a spillage of beer into the phone.
  4. Exhibit GS 49-B to 88, FOI folio R37911. The last paragraph states: “This T200 is an EXICOM and the other T200 [that was connected to Alan Smith’s] is an ALCATEL, we thought that this may be a design ‘fault???’ with the EXICOM so Ross tried a new EXICOM from his car and it worked perfectly, that is, released the line immediately on hanging up.  We decided to leave the new phone and the old phone was marked and tagged…”

The problem Alan Smith experienced with the old EXICOM TF200, which was tagged and taken away, was it locked up intermittently after a terminated call.  One of the side effects was, while the EXICOM was in a locked-up state, people could hear Alan in his office sometime minutes after he had placed the receiver back in the cradle (terminated the call).

Exhibit GS CAV 50, (Telstra FOI folio D01026/27) confirms, like the Flexitel system, Telstra knew there were lock-up problems affecting the EXICOM T200 machines manufactured after week 7 1993, in moisture-prone areas. This document confirms one of the known lock-up side effects was that, while the line was in this lock-up mode, the calling or called party could hear room noise after the call had terminated.  Other evidence on file, concerning Telstra’s faulty equipment still in use, suggests that a large portion of these faulty EXICOM phones were re-deployed back into the system.

It would be unreasonable for Telstra Senior Executives to assume that local Telstra staff would have meteorological experience, or be aware that coastal regions like Cape Bridgewater, where Alan Smith had his business, have early morning to early afternoon moisture.  While it is evident, from documentation, Alan had problems with the EXICOM TF200, collected 27th April, 1994 the new EXICOM left behind was still in service on his 55 267230 line until at least 1999, when it was removed to the camp kiosk.  Although Alan provided the arbitrator with electronic data showing this locking up fault continued after the installation of the new EXICOM, the arbitrator did not allow the arbitration technical consults to test this service line. Had the arbitration process done this they would have perhaps found that the EXICOM phones, themselves, were part of the cause of this locking up fault.

SUMMARY – FLEXITEL & EXICOM

3rd July 1992:  Peter Taylor, Telstra’s Warrnambool Manager, sends Alan a letter, stating:-

As you requested the following is a copy of your fault history on service 267267. Unfortunately Ican only provide details for the past 12 months due to change in your data base.” (See AS – CAV 17)

Why were these documents withheld from Alan, when he asked him for all fault records since 1989?  This misleading and deceptive advice can be found in AS – CAV 5, under the heading Telecom Secret (FOI 44008).  Telstra used this during the settlement.  Other documents confirm there were records going back to 1989.

Alan was seriously misled by Telstra during this settlement process and when he accepted Telstra’s offered payment.

From soon after settlement, on 11th December 1992 and through to early 1993, Alan continued to experience intermittent problems with incoming STD calls cutting out: 80 per cent of his incoming calls were STD calls.  On 3rd February 1993 Alan complained to Telstra that the phone was frequently giving only one ring and, when he picked it up, the line was dead.

12th July 1993: Telstra FOI documents M34204 – M34205 (AS – CAV 18) confirm Alan was complaining of cut-offs in March 1993.  This Telstra document states there were 45,993 degraded minutes yet, in the Arbitration Technical Report, DMR and Lane (30th April 1995) refer to only 405 degraded minutes.  The Technical Report also claims there were only 43,500 errored seconds (ES) when the Telstra document shows 65,535.  It appears DMR and Lane played down the actual number of faults.

Three pages from the 13 April 1994 AUSTEL COT Report (pages 163 to 165) confirm, from the new RCM installation at Cape Bridgewater in August 1991 until at least July 1993, numerous problems affected the RCM at Cape Bridgewater. (AS – CAV 19)

At this point, it is important to raise the issue of a witness statement, sworn by Gordon Stokes of Telstra, and used in the FTAP (12th December, 1994).  In part 2 of this statement, Mr Stokes states:-

“I transferred to Network Operations Portland in 1989 and between 1990 and 1994 I was responsible for maintaining switching equipment at the Portland exchange.”

Mr Stokes further states:-

“After the Portland to Cape Bridgewater RCM systems were installed, I became aware that the performance of the systems could be measured using the facility known as CRC.  I checked the CRC error counters regularly between the date the RCM systems were installed and February 1994, when I left Telecom.  Checking the CRC counters in this way was normal maintenance practice.  I can recall checking the CRC counters prior to March 1993.  When I checked the CRC counters pre-March 1993, I did not observe any errors that could have impacted upon the telephone service provided to Cape Bridgewater customers.  A typical reading for each RCM system was 5 to 10 errored seconds, no degraded minutes and severely errored seconds.” (AS – CAV 20)

If Mr Stokes did check the RCM regularly, as he states, why didn’t he notice that the fault alarm system had not been installed after the RCM replaced the RAX exchange in August 1991, 20 months before?  Furthermore, Mr Stokes’ statement does not correlate with a report, made after a visit to the Portland exchange by the Melbourne pair-gain support group, which states:-

“At this stage we had no idea over what period of time these errors had accumulated.”

If Mr Stokes’ Witness Statement is correct, he “checked the CRC counters pre-March 1993” and he “did not observe any errors”, then 65,535 errored seconds and 45,993 degraded minutes must have accumulated in the three days between 28th February and 2nd March…

Throughout 1993, I continued to receive numerous letters, from clients and business associates’ documenting frustrating experiences of attempting to contact me by phone (see also document 15).  The stress became increasingly difficult to bear.  Although I often tried to convince myself that the problems were diminishing, in reality, nothing was improving at all

26th August, 1992: Casualties of Telecom/Telstra (COT)

The first formal meeting of the Casualties of Telstra takes place, at the Ibis Melbourne Hotel, comprising Graham Schorer (official spokesperson), Alan Smith, Ann Garms, Bruce Dowding (representing Sheila Hawkins) and Amanda Davis (AUSTEL’s General Manager for Consumer Affairs).  Three representatives of Telstra attend to discuss the ongoing phone problems being experienced by COT members.  During this meeting, the COT cases advise Telstra they now know, contrary to what they were individually advised by Telstra in the past, that they are NOT the only businesses in their areas complaining about faults with their telephones.  Telstra fault documents confirm that during October and November 1992, alone, 14 Cape Bridgewater residents had complained to Telstra about problems with their phones. (AS – CAV 8)

One of the Telstra’s representatives at this 26th August, 1992 meeting, Ted Benjamin, is later appointed as Telstra’s Arbitration Liaison Officer for Graham and Alan’s respective arbitrations.  The Alan Smith CAV Chronology LGE file and supporting documentation show that the TIO should never have allowed Mr Benjamin the position of Arbitration Liaison Officer while he was still a member of the TIO council, because the TIO’s office was the administrator of the COT arbitrations.

Telstra’s Minutes of this 26th August 1992 meeting states:-

“Graham Schorer said that, from COT’s perspective the purpose of the meeting was to put two questions to Telecom, which COT ‘required’ to be answered by 2.12pm the same day.  The questions are shown at attachment 1, but in essence asked Telecom to guarantee that the service of the five foundation members would be rendered fault-free within 28 days and that Telecom would resolve any questions of compensation to said members within the same period.” (GS 56, p2)

1st September, 1992:  Ms Pittard, Telstra’s General Manager, writes to Alan, stating:-

“We believe 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.” (AS – CAV 12)

18th September, 1992:  Mr Beard, Telstra’s Service Manager, writes to Alan, stating:-

“We believe that the quality of your telephone 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. (AS – CAV 13)

Telstra FOI document R01444 confirms Telstra documented people experiencing the RVA recorded message, saying Alan’s service was not connected, from at least March 1992.  This document also confirms that a Heywood resident, Mrs Saville, also complained of the same RVA fault when trying to ring Alan on 2nd September, 1992 and that the fault was not fixed until 7th October, 1992. (AS – CAV 11)

13th October, 1992:  Exhibit AS – CAV 7 shows that, around 13 October, 1992 one of Telstra’s Portland technicians, Gordon Stokes, connected an ELMI monitoring machine at the RCM exchange at Cape Bridgewater and linked it to a ‘sister’ machine so they could ‘talk’ to each other and carry out tests to see which calls terminated successfully at the camp.  This equipment was connected to the camp’s kiosk phone, which could be answered either in the kiosk via the kitchen, or in the main office.  Over this period, Alan continued to complain that calls were being registered as reaching his business, when they hadn’t.  On some occasions, calls shown on the ELMI tapes as having been answered, weren’t and, on other occasions, calls which had actually managed to get through and were successfully answered appeared on the ELMI tapes as ringing but not being answered.

Alan has included two examples of calls on 13th October 1992, which registered on the ELMI tapes as successful: one at 1.40 pm and the other at 3.04 pm.  In fact, both these calls dropped out when answered, so they certainly did not connect successfully.  According to Gordon Stokes, whose Witness Statement is discussed above, there was no ELMI equipment connected at Alan business at that time – but they must have been, or Alan wouldn’t have the tapes.

As these kinds of faults continued and were denied by local staff, things got worse instead of better.  At the time, my then-partner Karen often had to bear the brunt of anger from those people who did manage to get through, because she answered the phones every second or third day while I attended COT meetings in Melbourne.  It did not really come as a surprise to learn that Karen had decided to move into a rented house in Portland.

AUSTEL COT Cases Report

On 13th April, 1994 (see below), AUSTEL provided the then-Minister for Communications, the Hon Michael Lee, with the AUSTEL COT Cases Report, which discusses the telecommunication problems experienced by Graham, Alan and other COT members in detail.  Most of the information in the report was supposed to provide an unbiased view of the issues AUSTEL had investigated by accessing, from Telstra, each COT member’s telecommunication faults registered with the carrier.

The information shown in the Alan Smith CAV Chronology LGE file and supporting CAV documentation confirms that Telstra (throughout the COT arbitrations) continued to withhold documents from the claimants.  AUSTEL was also unable to access all the information they requested from Telstra to enable them to prepare a fully detailed report.

Point 5.46 on page 95 of the AUSTEL report states:-

“Where, as part of its direction, AUSTEL sought to obtain detailed information on each of the exchanges involved in terms of performance standards, actual performance, maintenance requirements and achievements, Telecom initially responded with advice in terms of a few generalisations. Very specific requests were necessary to obtain data which a co-operative approach may well have been expected to deliver. Indeed, throughout this inquiry it has been apparent that Telecom has chosen to interpret AUSTEL’s request for information in the narrowest possible terms. The net effect of this was to minimise the amount of relevant data it put before AUSTEL and lengthen the process necessary to extract it.”

Point 2.29 on page 34 states:-

  • “Since the five original COT Cases came to AUSTEL’s attention, fourteen complainants have approached AUSTEL alleging that –they have experienced service difficulties and faults similar to those experienced by the original COT Cases
  • they have received similar treatment in Telecom’s handling of their complaints.”

Point 3.45 on page 59 states:-

“Accordingly, at the same time as AUSTEL’s was pursuing its investigation it also used its best endeavours to facilitate a Fast Track Settlement Proposal for four of the COT Cases with the object of using the outcome of the Fast Track Settlement Proposal procedure as a model for resolving other individual disputes. Outcomes in that regard are detailed elsewhere in this report.”

Point 5.7 on page 84 states:-

“Argument on that general theme continued. By letter dated 23 September 1992, Telecom’s Group Managing Director, Commercial and Consumer, informed Mr Schorer as spokesperson for the original Cot Cases

  • ‘The key problem is that discussions on possible settlement cannot proceed until the reported faults are positively identified and the performance of your members’ services is agreed to be normal. As I explained at our meeting, we cannot move to settlement discussions or arbitration while we are unable to identify faults which are affecting these services.’ ”

Point 5.25 on page 89 states:

“Mr Smith was the first of the original COT Cases to reach an initial ‘settlement’ with Telecom. It is understood that he –

  • identified the type of faults which his business had experienced
  • indicated the incidence of the faults by way of –
    • statements by individuals who had sought unsuccessfully to contact him
    • demonstrating a reduced effectiveness of advertising he had undertaken.

“Telecom has acknowledged at least some of the faults impacting on Mr Smith’s business as well as having access to relevant fault records and monitoring data.  It was also aware of the extent of the problems and difficulties at its local exchange servicing his business.”

AUSTEL found merit in what Graham and Alan said, regarding their continuing phone problems, and this is why AUSTEL supported the suggestion that Graham and Alan have their matters assessed commercially rather than legalistically.  The following information shows, however, that Telstra (assisted by the newly appointed TIO) hijacked the commercial settlement process in favour of Telstra’s preferred Rules of Arbitration.

Point 5.29 on page 90 states:-

“The fifth of the original COT Cases, Mr Schorer, had particular concerns about Telecom’s limited liability and the impact that the limitations were likely to have on any claim he might make for compensation arising from an inadequate telephone service. Instead of seeking compensation in those terms, he pursued a claim in the courts under the Trade Practices Act 1974. In simple terms, Mr Schorer claimed Telecom –

  • sold him a particular type of customer equipment which was unable to meet his needs (which were known to Telecom)
  • made claims for the equipment which the equipment was not able to deliver

While Telecom defended the action, it did make a payment into court with a denial of liability. On the advice of his solicitor, Mr Schorer concluded that he could not afford to fund continuation of the case and he decided to accept the payment into court

BROKEN PROMISE

AUSTEL COT Cases Report – Continuing Faults

Point 5.30 on page 91 states:-

“Understandably the original Cot Cases, having reached an initial ‘settlement’ involving –

compensation for past losses

restoration of an adequate telephone service expected that they might be able to resume their business activities afresh.”

Point 5.32 on page 91 states:-

“Unfortunately that did not prove to be the case. Soon after his initial ‘settlement’ Mr Smith reported continuing problems to AUSTEL. Even prior to her settlement, Mrs Garms reported continuing faults to AUSTEL. The decision by Mrs Garms and Mrs Gillan not to report faults to Telecom in order to hasten a financial settlement is noted above. Mr Schorer continued to report faults to AUSTEL throughout the period.

Point 5.32 on page 91 states:-

“The fact that faults continued to impact upon the businesses in the period following the settlement shows a weakness in the procedures employed. That is, a standard of service should have been established and signed off by each party. It is a necessary procedure of which all parties are now fully conscious and is dealt with elsewhere in this report. Its omission as far as the initial ‘settlement’ of the original COT Cases were concerned meant that there was continued dissatisfaction with the service provided without any steps being taken to rectify it. This inevitably led to dissatisfaction with the initial ‘settlement’ and to further demands for compensation. To avoid this sort of problem in the future, AUSTEL is, in consultation with Telecom, developing

  • a standard of service against which Telecom’s performance may be effectively measured
  • a relevant service quality verification test”

The original (commercial) negotiation process leading up to the AUSTEL-facilitated Fast Track Arbitration Procedure (FTAP), see point 5.32, states no future assessment process can be signed off until Telstra demonstrated that their verification testing had located and fixed the phone problems that affected the COT cases’ businesses.  One of the main reasons why Graham Schorer and Alan Smith signed the FTAP was because Telstra agreed to carry out the Service Verification Tests (SVT), as specified by AUSTEL, and to prove, to AUSTEL’s satisfaction, that the services provided to them were now up to network standard.  Leading up to the signing of the Arbitration Agreement on 21st April, 1994 and before the final COT report was provided to the Minister for Communications on 13th April, 1994, Alan and Graham attended a two-day, lock-up, confidential viewing of the incomplete draft of the report at AUSTEL’s headquarters in Queens Road, Melbourne.  At this meeting, Robin Davey, AUSTEL’s chairman, reminded Graham and Alan of commitments made in a letter dated 23rd September, 1992 from Telecom’s Commercial Consumer Group Managing Director to Graham, which states:-

“As I explained at our meeting, we cannot move to settlement discussions or arbitration while we are unable to identify faults which are affecting these services.”

At the time of this AUSTEL lock-up meeting, Graham and Alan were refusing to move from the commercial agreement to arbitration.  It was at this point of time, that Mr Davey stated that the original agreement to properly identify the phone and fax faults still stood, because an assessor (or arbitrator) would not be able to hand down findings if the problems and faults that sent the claimants into the process in the first place had not been rigorously tested.  At this lock-up meeting, Mr Davey also alerted Graham and Alan to sections of the AUSTEL report where AUSTEL clarified that Service Verification Testing would be conducted on Difficult Network Fault (DNF) customers, which is how the COT claimants had been classified.

It never occurred to Alan Smith, that Telstra would stoop so low as to conjure up a false report of the SVT they carried out at his business (as part of their arbitration defence) but, as Alan’s CAV Chronology LGE file shows, this is exactly what happened – even after AUSTEL wrote twice to Telstra, on 11th October and 16th November 1994, advising Telstra the tests carried out at Alan’s business premises were deficient.

In Graham’s case, he always believed that Telstra would NOT honour their commitment given to AUSTEL, regarding conducting their SVT according to AUSTEL’s specifications, and therefore he refused the SVT process until further guidelines were put into place.  No such guidelines were ever implemented during Graham’s arbitration.

In the AUSTEL COT Case Report, at point 5.48 and regarding Telstra’s testing, AUSTEL states:-

“Telecom’s approach to the required testing regime was also less than positive. AUSTEL had required the testing to occur in business hours. Telecom maintained that it interpreted this requirement according to the nature of the business and, had it done so in good faith, it would have been acceptable. That was not, however, the outcome. In one case (Mr Schorer of Golden Messenger) only 15 percent of the test calls related to the complainant’s business hours, an approach scarcely consistent with Telecom’s advice that it wanted to establish the ‘fundamental integrity’ of the approach and that it wanted the results to be ‘beyond reproach’.”

26th August, 1992:  (as referred to above)  The first formal meeting of the Casualties of Telstra is held at the Ibis Hotel in Melbourne.  Graham Schorer was elected as official spokesperson prior to the meeting.  During this meeting, the COT cases advised Telstra that they now knew that, contrary to what Telstra advised each member individually in the past, they were NOT the only businesses in their areas complaining about faults with their telephones.

Telstra’s minutes taken during the meeting at the Ibis Motel states:-

“Graham Schorer said that, from C.O.T.’s perspective the purpose of the meeting was to put two questions to Telecom, which C.O.T. ‘required’ to be answered by 2.15pm the same day. The questions are shown at attachment 1, but in essence asked Telecom to guarantee that the service of the five foundation members would be rendered fault-free within 28 days and that Telecom would resolve any questions of compensation to said members within the same period,” (P 2 at AS – CAV 56)

Another document also confirms that a Heywood resident, Mrs Savill, also complained of the same RVA fault when trying to ring Alan on 2nd September, 1992.  Document R01444 confirms the fault was not fixed until 7th October, 1992. (AS – CAV 14)

Telstra fault documents confirm that, during October and November 1992 alone, 14 Cape Bridgewater residents complained to Telstra about problems with their phones.

1st September, 1992:  (also noted above) Ms Pittard, Telstra’s General Manager, sends Alan a letter:-

“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.” (AS – CAV 12)

Ms Pittard was aware there were ongoing faults before the 1992 settlement meeting.

18th September, 1992:  (also noted above) Mr Beard, Telstra’s Service Manager writes to Alan:-

“We believe that the quality of your telephone 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.” (AS – CAV 13)

It is now clear he knew at the time that the information he supplied Alan in this letter was false.

Please combine the above segment with the FOI information supplied below.

Exhibit (GS 59):  Document Number: R26401 – R26485 (Table A), provides an almost-complete description of requested FOI documents, including when each document was completed, what it refers to and who produced it.  Six pages list 48 separate documents, from 1992, that Mr Schorer requested.  All are marked as either ADV or LPP.

We now know that hundreds (if not thousands) of T, ADV and LPP documents were wrongly withheld from Graham during his arbitration.  In particular, the 48 LPP documents raise a number of questions including:-

  1. Telstra states, in their B003 Briefing Report of 26th November, 1996, in reference to 21st and 22nd October 1992:“Telstra has no information as to whether this number was in fact engaged.”Telstra wrongly withheld non-legal information under T, ADV and LPP rules, suggesting that Telstra could have withheld fault information related to these ‘engaged’ calls too. Could Graham Schorer have used this information, if it had been properly made available to him, to challenge Telstra’s defence regarding these particular ‘engaged’ calls?  How many other faults, and fault reports, were unlawfully withheld under T, ADV and LPP?
  2. Page 1 of this FOI schedule also refers, at 8.10.92, to:-“Schorer, Golden Messenger Correspondence file for AGS R26401 – R26845, Document number R26450 – R26452, Facsimile transmission to Telecom, Technologies from AGS. Exemption LPP.”Why would Telstra withhold from Graham, during his arbitration, a fax from the Australian Government Solicitor to Telstra Technologies (who are NOT legal specialists), unless it was a document that could have helped Graham to prove his claims?

In the Alan Smith CAV Chronology LGE file, Alan provides evidence confirming technical information was also withheld from him, during his arbitration, under LPP.

Telstra FOI folio C05313, as shown in Chapter 2, for 16th March 1993, shows that Freehill Hollingdale & Page (Telstra’s solicitors) and Duesburys (accountants) used Equity Adjusters – a private investigator agency – at the time Graham Schorer was contemplating litigation against Telstra.  The information discussed in the Telstra LPP FOI schedule, regarding Equity Adjusters (see 30.10.92), like so many other non-legal FOI documents, was also withheld from Graham under LPP.

23rd November, 1992:  Don Lucas, of Telecom Commercial Victoria/Tasman region, writes to Alan advising that the RVA MELU fault only lasted for three weeks and was fixed by 19th March, 1992. (AS – CAV 15).

Another Telstra FOI document, K02643, which Alan received during his arbitration under FOI, confirms that Telstra considered this particular RVA MELU fault to be apparent from the cutover from the old exchange to the new RCM at Cape Bridgewater, i.e., from August 1991 to at least 19th March, 1992. (AS – CAV 16).

Another document that Alan received from Telstra, under FOI and dated July 1991, confirms Telstra knew, before they installed the new RCM at Cape Bridgewater in August 1991, that numerous problems affected the old RAX exchange prior to this cut-over.  This document clearly states that there were 11,000 errors per hour in direction A and 216 errors per hour in direction B, when the specified level allowed for was 72 errors per hour in both direction A and direction B.

In his letter, Mr Lucas also states that another software ‘register’ problem, relating to RVA local faults, only lasted from 2nd to 7th October ,1992, while other documents received under FOI R01444 (AS – CAV 14) confirm Telstra knew that this fault was apparent from at least 2nd September, 1992.

Further documents, received from the Australian Communications Authority (“ACA”) (2001) and dated 2 March, 1994 from AUSTEL to Telstra, also show the local ‘register’ RVA fault at Heywood and the RVA MELU fault had both lasted many weeks longer than Telstra told Alan during his 1992 settlement period.

11th December, 1992:  Alan provides Telstra with three letters from clients who documented their issues when trying to contact his business (AS – CAV 9-A).

During Alan’s settlement with Telstra, he produced several letters that he wrote to the local rural fault centre at Hamilton, somewhere between June 1988 and September 1989 (refer Cape Bridgewater Holiday Camp documents), as well as letters from the operators of the MS Empress of Tasmania, Heywood Primary School, Collingwood Halfway House and the Haddon Community Health Centre.  Many organisations experienced difficulties contacting Alan because of the RVA phone message and wrote to him concerning this.  John Wynack, Commonwealth Ombudsman office, wrote to Telstra 11th November, 1994 asking why Telstra never returned “a number of files relating to his contacts with Telecom prior to 1991”?

DOCUMENTS C04006, C04007 and C04008

Brief summary:  when these three documents are compared to other Telstra FOI documents and those discussed here, it is obvious that, on settlement day (11th December, 1992), Telstra’s Victorian General Manager – Commercial, Ms Rosanne Pittard, knew Telstra provided Alan with a poor phone service for at least three or four years.  Telstra were aware of the problems with Alan’s phone line from April 1988, when he lodged his first complaints. (AS – CAV 21)

Document 24 was used during Alan’s arbitration claim to answer Telstra’s Interrogatories.  Pages 11, 12 and 22 include references to:

  • Copies of letters, dated from as early as 1991, from people who had first-hand experience of the phone problems Alan had to deal with. These people included business clientele, friends and associates;
  • Contemporaneous notes Alan made regarding his phone problems;
  • Surveys of phone users in the general area; and
  • Copies of correspondence relating to other peoples’ problems with their own telephone services in the Portland/Cape Bridgewater area.

When Alan arrived at the meeting with Ms Pittard on 11th December, 1992, he reminded her of correspondence he received from her office, in September and November 1992, stating the phone faults were rectified.  Yet documents C04006, C04007 and C04008 show there were a number of facts that were not provided to him during these settlement negotiations, including references to:

  1. Callers hearing an RVA message when lines into Cape Bridgewater were congested (document C04006).
  2. Issues with the wiring and cabling in Cape Bridgewater.
  3. Telecom’s history of poor performance in the area.
  4. Alan’s service problems being network related and covering a period of three to four years (document C04007).
  5. Alan’s phone service, overall, suffering from a poor grade of network performance over a period of several years, with some difficulty in detecting exchange problems in the eight months before these documents were written.

22nd December, 1992:  Telstra FOI documents, folio G95136 to G95138, are minutes taken during a scheduled conference held to discuss ongoing communication problems within the Telstra network.  These documents were only supplied to Graham Schorer on13th October, 1998 under pressure applied by the Senate working party to Telstra, and were never made available to the COT cases during their respective arbitrations.  The importance of these minutes may well have influenced a different set of findings during the COT cases’ arbitrations as they confirm there were RVA faults and lock-up problems within the Telstra’s network at the time Graham and Alan’s had complained of same. (GS CAV 60)

Much of the technical equipment used by Telstra during the ’80s and ’90s was manufactured by Ericsson (Australia).  The RVA faults and lock-up problems, in many cases, were related to Ericsson equipment, including AXE exchanges.  We raise the Ericsson-manufactured telecommunication equipment issues here as Ericsson play a major role in the Lane Telecommunication conflict of interest matters discussed below.

CHAPTER TWO

Freehill Hollingdale & Page, AUSTEL and Telstra

Denise McBurnie, of Freehill Hollingdale & Page, wrote to Ian Row, Telstra’s Corporate Solicitor, on 10th September, 1993, discussing strategies to deal with the COT claimants.  Telstra FOI document N00749 is the first page of this strategy and states:-

“Both Freehills and Duesburys 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.” (AS – CAV 39-A)

Ms McBurnie names Duesburys as assisting Freehills in this matter.  Duesburys were also involved with the employment of private investigators (paid by Telstra) in relation to Graham Schorer and possibly other COT claimants.

In June 2000, renowned Legal Professional Privilege expert, Associate Professor Suzanne McNicol, provided the COT claimants with the following legal opinion regarding Freehills’ COT Case Strategy document:-

“There is also some potential prima facie evidence of … i.e. knowingly making false or spurious claims to privilege.  For example, there is a 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 Ms Denise McBurnie of Freehill Hollingdale & Page, Melbourne Office to Mr Ian Row, Corporate Solicitor, Telecom Australia.” (AS – CAV 39-B)

7th January, 1993:  This internal Telstra note ( GS-CAV 61) states:-

“You are aware that the COT issue is hotting up again. [Redacted] and Rosanne Pittard are to deal with the media/politicians on this subject. I will be dealing with AUSTEL as necessary.”

“Would you please ensure that all other parties in your state are aware of this so that we don’t trip up.”

Was this statement made after it had been revealed Rosanne Pittard withheld vital network fault information from at least one COT claimant during settlement?  During June 1993, AUSTEL wrote to Telstra condemning this particular type of misleading and deceptive conduct.

2nd February, 1993:  This letter from Frances Wood, AUSTEL’s Manager – Service Quality, to Telstra’s Corporate Secretary, Jim Holmes, confirms that a draft terms of reference for a commercial assessment process for the COT cases was being considered.  On page three of this letter, Ms Wood states:-

“It was AUSTEL’s understanding – and that of the COT Cases – that the reason there was emphasis placed on an independent assessment instead of an arbitration was exactly so that business losses could be assessed and relative causation estimated.”

“These draft terms of reference do not give the assessor that task. Quite the contrary: he or she is charged to look at points such as –

  • the duty of each claimant to mitigate any loss
  • any efforts of Telecom directed at minimising the alleged loss of the Claimant”

“It is surprising that Telecom should have though these terms of reference would be acceptable to Mrs Garms … or that they would be perceived as ‘in good faith’ by a third party.”

Acceptable terms of reference

  • that the assessor should reach a judgement as to –

the adequacy of the complainants’ telephone service

the business losses of the two claimants since establishing their businesses at their present locations

the causes of these losses (including the general economic environment, and local circumstances, and the effects of the telephone service). …”

“As stated at the outset, these draft terms of reference do not fulfil the promise of good faith.  Unless terms of reference showing there good faith in the process are provided by Thursday 4 February, it is AUSTEL’s intention to report to the Minister under the terms of section 36 (c) of the Telecommunications Act 1991 that it believes, according to the information currently available to it, in these cases that Telecom has treated these customers unfairly and continues to do so, and that AUSTEL’s best efforts at resolving the issues have failed.” (GS CAV 62)

Please note: throughout this chronology of events, we will quote Ms Woods’ letter and AUSTEL’s understanding that the COT cases’ Fast Track Settlement Proposal was a commercial assessment process and the assessor was to make a judgement on the:

  • “adequacy of the complainants’ telephone service”.

3rd February, 1993:  Telstra FOI documents, folio G95148 to G95152 (GS CAV 63), are minutes of a scheduled conference held to discuss ongoing communications problems within the Telstra network.  These documents were only released to Graham Schorer on 13th October 1998, under pressure applied by the Senate working party, and were withheld from the COT cases during their respective arbitrations.  The importance of these minutes and the various similar monthly minutes could well have brought a different set of findings in the COT case arbitrations, as GS 63 confirms Telstra knew there were lock-up problems in the network.  Ericsson equipment and AXE exchange issues were also raised during this conference meeting.

10th February, 1993:  This letter from Jim Holmes to Graham, FOI folio R17155, discusses the future settlement proposals for Ms Garms and Ms Gillan, and mentions only an ex gratia-type settlement, not arbitration. (GS CAV 64)

15th February, 1993:  Ian Row, Telstra’s Corporate Solicitor writes to Mr Schorer acknowledging that the process for settling the COT cases will be an independent assessment process.  He writes:-

“I am also instructed to advise that Telecom has no difficulty in accepting your recommendation that Mr Gordon Hughes, current President of Law Institute Victoria be appointed as the independent assessor.” (GS CAV 65)

16th February, 1993:  Telstra’s Jim Holmes writes to Graham again and states:-

“Importantly you will note that Telecom has included a reference to the possible use of Mr Archibald QC’s services. Separately we have agreed to Gordon Hughes to be the Independent Assessor (if available and willing).” (GS CAV 66)

18th February, 1993:  Telstra FOI documents, folio G95153 to G95159 (GS 67) are minutes taken during another scheduled conference held to discuss ongoing communication problems within the Telstra network. These documents were also withheld during the COT cases’ arbitrations.  This minute further confirms the lock-up problems that Graham and Alan complained of were not imaginary.

  •   “(3)Discussion of recent faults

“MELH
IOG-11B EX-A node restarted and remained in isolated blocked state. Attempts to recover the node by reloading and deblocking node A were unsuccessful.”
(Folio G95156)

  • “The variations in data in different regions across the county raise concerns about the repeatability and consistency of the data regeneration program (ELISA). Martin Spear advised that a conversion prerequisite is that data is checked to be at a defined /36 standard. The standard exists and work has been initiated for South Melbourne (SMEX).

The problems experienced when taking the AX62 model to /66 has reduced confidence in the ELISA data regeneration program. … Another attempt must also be made to convert AX62 by Ericsson.” (Folio G95157)

  •   “The number of software blocks with used correction area greater than 75% is a continuing concern. Colin Campbell advised of an upcoming CNA which will address some of the critical blocks.” (Folio G95158)

4th March, 1993:  This letter (FOI folio R20297) to Telstra’s Rosanne Pittard from Denise McBurnie of Freehills confirms Freehill Hollingdale & Page and Duesburys (accountants) were reporting on Graham’s matters. (GS CAV 68)

10th March, 1993:  Rosanne Pittard’s internal letter to David Oertel, Managing Director of Telecom Commercial, states:-

“Mr Graham Schorer of GM Holdings trading as … Golden Messenger initiated legal action against Telecom regarding misrepresentation under the Trade Practices Act for the sale of a Flexitel in 1987.  The Flexitel is a key-system/PABX hybrid which subsequently proved to be unpopular with limited application.  Mr Schorer’s firm also experienced some network faults and congestion.  The extent of GM’s claim is currently some $2m plus costs plus statutory interest. …”

“I have briefed solicitors on the following strategy:

  • Newsolicitors appointed (Freehill, Hollingdale and Page) and work schedule agreed …
  • Payment into court to be made. This effectively limits our liability for legal costs should we lose. …”

“I will still do everything in my power to avoid this matter going to Court without making irresponsible payment.”

“Your approval is therefore sought for payment of $250,000 to the Federal Court of Australia in the knowledge that other payments may follow.” (GS CAV 69)

15th March, 1993:  This letter from Denise McBurnie of Freehills to Telstra’s Rosanne Pittard, FOI folio C05313, confirms that Equity Investigators were involved on behalf of Telstra, Duesburys and Freehills concerning GM Holdings.  Denise McBurnie states:-

“I apologise for the state of the handwritten statement in the Investigator’s Report.”
(GS CAV 70)

AUSTEL found the Australian Government Solicitor (AGS) wrote to Equity Adjusters, the private investigators mentioned in Telstra’s FOI schedules T, ADV and LPP, on 30th October, 1992 regarding Graham Schorer – Golden Messenger.  AUSTEL concealed this from Mr Schorer until 2008.

Again, the Investigator’s Report referred to by Denise McBurnie, in her correspondence with Equity Adjusters, was never provided to Mr Schorer in any of Telstra’s FOI releases.

16th March, 1993:  Telstra FOI folio C05306 confirms that Telstra provided Freehills with a list of addresses and phone numbers of those involved in the GM dispute.  The fact that private investigators were now involved suggests the list of names and addresses supplied by Telstra to Freehills were probably provided to Equity Investigators. (GS CAV 71)

April 1993:  Telstra FOI folio 102019-102020, entitled Terms of Reference for an Independent Assessment, is given to two COTs (Ann Garms and Maureen Gillan), stating:-

“The Terms of Reference for the Independent assessment are as follows:

  • The Independent Assessor shall initially establish whether faults existed in the telephone services provided to the Claimants and whether such faults resulted in losses to their individual businesses, the financial damage (if any) to the businesses caused by those faults and a reasonable amount of compensation for such damage.
  • In establishing whether faults existed, the Independent Assessor must also establish the relevant dates at which certain faults are alleged to have occurred.
  • The Independent Assessor shall determine the business losses of the Claimants since first reporting telephone faults in their respective businesses in their present locations.” (GS CAV 72)

This document confirms the COT case matters were supposed to be a commercial loss assessment process not arbitration.

6th April, 1993:  This letter from Denise McBurnie (seconded from Freehills), FOI folio 001901, to Andrew Moyle, confirms Freehill Hollingdale & Page were firmly entrenched in Graham Schorer’s matters.  Please note: Telstra seconded Andrew Moyle, during 1993, from Freehills to handle the COT case issues. (GS CAV 73)

8th April, 1993:  This letter, FOI folio R20084, from Denise McBurnie to Telstra’s Rosanne Pittard regarding GM matters, notes:

“I have been advised by Freehills that in addition to Duesburys’ account, they are yet to receive accounts from senior and junior counsel and the private investigators.

Could you please attend to payment of the enclosed account.” (GS CAV 74)

The above two aforementioned letters, C05313 and R20084, support the COT members suspicions that they were under surveillance, from late 1992 through to at least early 1993.

During this same period, Cathy Ezard (now Alan’s partner), was a professional associate of Alan’s.  Cathy signed a Statutory Declaration, dated 20th May, 1994 explaining a number of sinister happenings when she attempted to collect mail on Alan’s behalf from the Ballarat Courier Newspaper office (AS – CAV 22).  This declaration leaves questions unanswered as to who collected Alan’s mail and how did they know there was mail to be collected from the Ballarat Courier mail office.  On both occasions, when this mail was collected by a third person, Alan had telephoned Cathy, informing her the Ballarat Courier notified Alan there was mail addressed to Alan waiting to be picked up.

On pages 12 and 13 transcript, from the AFP inquiry into Alan’s allegations that Telstra unlawfully intercepted his telephone conversations, the AFP state at Q59:-

“And that, I mean that relates directly to the monitoring of your service where, where it would indicate that monitoring was taking place without your consent?” (AS – CAV 23-A)

21st April, 1993:  Telstra internal email FOI folio C04094 from Greg Newbold, to numerous Telstra executives and discussing COT cases latest”, states:-

“Don, thank you for your swift and eloquent reply.  I disagree with raising the issue 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 complaints remain vexacious [sic].” (GS CAV 75)

27th April, 1993:  Telstra FOI folios G95165 to G95167 state:-

“The list of outstanding /66 faults was discussed and prioritised with the result being the new ‘Top Ten’ lists,”

thus confirms problems and faults in Telstra’s network at the time Graham was registering his complaints. (GS CAV 76)  Please note the reference to Ericsson AXE exchange problems in this document.

Billing Problems

21st May, 1993:  Alan’s 008 billing account for this date demonstrates how Alan proved conclusively that Telstra charged him for calls that did not connect to his service during the period the MCT equipment was installed on his service line, due to the 90-second delay/lockup period after each successful terminated call.  These short duration calls existed from prior to this date right through until August 1996, as is shown in our reporting.

Why did Telstra’s 008 account, for 21st May, 1993 show 5-second to 20-second calls terminating at Alan’s business (one after another) when the MCT equipment disallowed this to happen?  Mrs Haddock from Melbourne tried to ring Alan on this particular day and later wrote of her concerns. She was one of the people who referred to a woman’s voice, on what she thought was Alan’s answering machine, when she arranged her bookings. As Alan recorded the answering machine message with his own voice in late 1992, who did Ms Haddock leave her particulars with?

BRIEFCASE SAGA

3rd June, 1993:  Two Telstra technicians, David Stockdale and Hew Mackintosh, visit Alan’s business, to investigate his continuing complaints regarding his phone service, and inadvertently leave behind a briefcase.  The contents of this briefcase confirmed Telstra knew, before Alan’s settlement on 11th December, 1992 that major faults existed in their network, but they did not disclose this to Alan during his settlement (see documents AS AS – CAV 3, 4 and 5, and AS – CAV 9-B).

9th June, 1993:  This letter, from AUSTEL to Telstra, is also part of the “briefcase saga” as it confirms AUSTEL was concerned Telstra may have misled Alan during his settlement, because of the evidence Alan found in the briefcase.  On page one, paragraphs four and five, when referring to Alan’s allegations that Telstra withheld this information from him on 11th December, 1992 this letter states:-

“Further he claims that the Telecom documents [found in the briefcase] contain network investigation findings which are distinctly different from the advice which Telecom has given to the customers 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 comment 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 its 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. ( GS-CAV 76)

Similarly, Telstra also advised Graham there were no known problems affecting his service, even though he later received FOI documents confirming otherwise.

16th June, 1993:  AUSTEL’s John MacMahon, General Manager Consumer Affairs, writes to Graham stating:-

“Attached is a draft letter which I intend to send to Telecom concerning the issues you have put to me.

I would appreciate your filling in the details of your current complaints and suggesting any other correction or omissions which you believe should be in the letter.” (GS 77)

16th June, 1993:  This draft letter from AUSTEL to Telstra’s Dennis Hambleton, Director of Regulatory, states:-

“Mr Schorer maintains that he continues to experience a range of significant problems with his telephone system…” ( GS-CAV 78)

16th and 22nd June, 1993:  The Telecommunication Industry Ombudsman (TIO) Board and Council are formed.  The TIO office was to deal with the ongoing phone problems and faults as a separate identity to AUSTEL.

This page marked Appendix B, from the first TIO Annual Report, for 1993/94, confirms Telstra’s Ted Benjamin (who was involved in the COT matters since1992), was appointed to the TIO council on 22nd June 1993.  Telstra’s Corporate Secretary, Jim Holmes, and Telstra’s Corporate Affairs Officer, Chris Vonwiller, were appointed to the TIO Board on 16th June, 1993. AS-CAV 48-B)

It is important to highlight the names of Jim Holmes and Ted Benjamin, as they both played very important roles in the COT arbitrations as will be seen below.

17th June, 1993:  Ms Rosanne Pittard’s memo, Telstra FOI folio K03281, is remarkable:-

“I refer to our telephone conversation regarding the material contained in Mr Macintosh’s briefcase.”

“Please find attached a letter from AUSTEL requesting information regarding that incident.  Whilst I can respond to the details regarding the information provided to him at the time of settlement I cannot comment on the variation between what Mr Smith was told and the contents of the Network Investigation files.” ( GS-CAV 79)

The 9th June 1993 AUSTEL letter (above), and this internal Telstra memo shows Telstra was prepared to deceive the COT cases concerning their telephone services.

17th June, 1993:  AUSTEL’s General Manager of Consumer Affairs writes to Telstra’s Dennis Hambleton stating:-

“Mr Schorer maintains that his telephone service continues to be affected by the following faults –

  • caller receives a recorded voice stating that the number has been disconnected
  • caller receives engaged signal when all or most lines are free
  • caller receives a ring tone when no ring is heard by the operator and all phones are manned
  • line drops out when call is answered. “ (GS-CAV 80)

7th July, 1993:  This internal Telstra email, FOI folio C04054, discusses whether Telstra should speak to Clinton Porteous, a journalist with the Herald Sun, and attempt to stop him listening to Graham Schorer regarding Telstra’s network problems.  The email states:-

“I propose that we consider immediately targetting key reporters in the major papers and turn them on to some sexy ‘look at superbly built and maintained network’ stories.”

This suggests that Telstra had a number of ways of deflecting the reporter’s focus from Graham Schorer’s evidence. (GS-CAV 81)

12th July, 1993:  Telstra FOI documents M34204 – M34205 (18) confirm I was complaining of cut-offs in March 1993.  Telstra states there were 45,993 degraded minutes yet the DMR and Lanes Arbitration Technical Report (30th April, 1995) refers to only 405 degraded minutes.  The Technical Report also claims there were only 43,500 errored seconds (ES), when the Telstra document shows 65,535.  It seems DMR and Lanes played down the actual number of faults.  These are just two samples of this type of evidence.

The three attached documents from the AUSTEL COT Report of 13 April, 1994 (see pages163 to 165) confirm that, after the new RCM was installed at Cape Bridgewater in August 1991, numerous problems affected the RCM at Cape Bridgewater (19) until at least July 1993.

At this point, it is important to raise the issue of a witness statement that Telstra’s Gordon Stokes swore and used in the FTAP in 12 December 1994. At point 2 of his Statement, Mr Stokes states:-

“I transferred to Network Operations Portland in 1989 and between 1990 and 1994 I was responsible for maintaining switching equipment at the Portland exchange.”

Mr Stokes further states:-

“After the Portland to Cape Bridgewater RCM systems were installed, I became aware that the performance of the systems could be measured using the facility known as CRC.  I checked the CRC error counters regularly between the date the RCM systems were installed and February 1994 when I left Telecom.  Checking the CRC counters in this way was normal maintenance practice.  I can recall checking the CRC counters prior to March 1993.  When I checked the CRC counters pre March 1993 I did not observe any errors that could have impacted upon the telephone service provided to Cape Bridgewater customers.  A typical reading for each RCM system was 5 to 10 errored seconds, no degraded minutes and severely errored seconds.” (20)

If Mr Stokes did check the RCM regularly, as he states, why didn’t he notice the fault alarm system was not installed after the RCM replaced the RAX exchange in August 1991, 20 months before?  Furthermore, Mr Stokes’ statement does not correlate with a report, made after the Melbourne pair gain support group visited the Portland exchange, which states, “At this stage we had no idea over what period of time these errors had accumulated.”

If Mr Stokes’ Witness Statement is correct in that he “checked the CRC counters pre-March 1993, [and] I did not observe any errors”, then 65,535 errored seconds and 45,993 degraded minutes must have accumulated in the three days between 28 February and 2 March.

Throughout 1993, I continued to receive numerous letters from clients and business associates, documenting their frustrating experiences when they attempted to contact me by phone (see also document 15).  The stress became increasingly difficult to bear and, although I tried to convince myself that the problems were diminishing, in reality nothing was improving at all.

28th July, 1993:  AUSTEL’s John MacMahon writes to Telstra:-

In my letter of 9 June I asked for a copy of all documentation left inadvertently at Mr A Smith’s premises. … It has now been suggested that there was other documentation in that file. Would you please clarify this issue and if so, arrange for a copy of the other documentation to be made available to me immediately.” (AS-CAV 33)

30th July, 1993:  Telstra internal facsimile, FPO folio R00660, from the Manager of Co-ordination and Performance Reporting to Telstra’s Corporate Secretary, J Holmes, states:-

“In relation to Cot Cases, Austel appear to now [be] making a number of separate, but related, approaches to Telecom – viz – Regulatory, Your Office and Ken Beattie in Queensland.  It is [a] difficult, and potentially dangerous, arrangement in which to control the flow of information to Austel.” ( GS-CAV 82) 

3rd August, 1993:  This letter from AUSTEL to Graham states:-

“In conversations with you I have mentioned the measures we have taken to ascertain the level of phone service you are receiving. This note will formally advise you of the situation. We have sought from Telecom –

  • details of the performance standards set for the exchange to which you are connected and the actual performance over the past 12 months
  • a copy of the fault record for the past 12 months and for the 50 consumers with numbers both above and below yours
  • a description of the supervisory/monitoring equipment used in the most recent 12 months to monitor the standard of service, when it operated and relevant conclusions.” (GS-CAV 83)

During Graham’s FTAP, he was not provided with the information AUSTEL sought from Telstra via this letter.  As shown above and below, Telstra withheld technical and general internal information under the guise of Legal Professional Privilege (LPP), therefore the material sought by AUSTEL may well have been withheld under LPP.

4th August, 1993:  The minutes from this meeting confirm Graham Schorer met with three Senior AUSTEL representatives, Chair Robin Davey, Mr Elsegood, AUSTEL Technical Advisor Monitoring Carrier Unit and John MacMahon, General Manager – Consumer Affairs.  This document states:-

  1. Mr Schorer had sought the meeting to present documentation he had which he alleged supported his view that Telecom had acted in a misleading and deceptive manner.
  2. He commenced by drawing attention to a range of Telecom documents he had obtained through the court process. He undertook to give a copy of all those and other relevant documents to AUSTEL. …
  3. Mr Schorer said he had some problems with AUSTEL’s approach involving testing – he had a particular concern that it did not address the possibility of calls not reaching the exchange. …
  4. Mr Schorer mentioned that reporting faults to 1100 elicits the response that it can only respond where AXE equipment is involved.” ( GS-CAV 84)

Please note:  Graham Schorer was finally provided with Telstra FOI documentation, through the Commonwealth Ombudsman office and Senate Working Party investigation (see FOI folio G95136 to G95205, issue date 13/10/1998), confirming there were numerous problems affecting Ericsson AXE exchange equipment, including known lock-up problems and incorrect RVA faults being experienced throughout the Telstra network.

12th August, 1993:  A singles club enquiry has Alan worried.  This letter confirms Ms Espinoza’s recollection of the same, constantly engaged problems she experienced while trying to book a weekend.  (AS-CAV 34-A)

Alarmingly, Telstra FOI document K03870, dated 17th June (assume 1993), refers to the same Rita Espinoza and her friend Elisie Stenoya (AS-CAV 34-A).  This document not only records the two personal phone numbers of these two ladies, it also confirms Telstra was fully aware of the times Alan’s office worker left the business while Alan was in Melbourne.  This document does not state any other place, only Melbourne.  Alan used to visit Melbourne on a regular basis during 1992 to 1993 (visiting singles club owners who might be interested in using the Cape Bridgewater for their next club get-away).  Did Telstra even know where Alan stayed, with whom and which clubs he visited?

17th August, 1993:  The phone problems continue.  Ms Cullen from Daylesford, Victoria attempts to phone Alan’s business but reaches a dead line each time (AS-CAV 35-A).  Once more, Alan is charged for these attempts as four short duration calls on his 008/1800 service (AS-CAV 35-B).  All this evidence was submitted into arbitration, but never addressed.  When Ms Cullen finally made a booking and arrived in February 1994, Ms Cullen’s partner wrote of the problems they both experienced when trying to use the camp’s coin-operated Gold Phone service (AS-CAV 35-C).

19th August, 1993:  Telstra FOI folio R10606, confirms that Telstra’s Ms Pittard contemplated seeking legal advice regarding how to withhold COT FOI information under Legal Professional Privilege:-

“The request for files and other documents are onerous. … How much do they want? A warehouseful is not out of the question.  Who will copy these?  I don’t have resources or money for agency people to spend time photocopying.  Will Austel pay? (The last question was a joke – I know the answer.) …

I believe we should quarantine any papers associated with legal action, refuse to supply papers associated with settlements and refuse to supply any papers marked Legal professional privilege – but we should seek legal advice on same.”

The results of the tests are of a concern to me. What confidentiality will be guaranteed? Austel has had close contact with these customers – what will ensure they don’t pass test results on? What are the legal implications if they do? …”

“If they conclude that Telecom was in some way negligent or at fault, there are serious implications for our liability; we could be vulnerable to some form of action by the COTS – would the Austel report be admissible as evidence?”

“What promises have been made to the COTS as a result of the testing? None I
hope.”

“The testing at customer premises causes great difficulties for us.  (GS-CAV 86)

The sentences marked in bold (our emphasis) above, refer to a number of tests carried out by Telstra at various COT cases businesses.  This email also suggests that Ms Pittard was in charge of most of the COT cases’ issues and the tests.  Why then, is Ms Pittard so concerned of the test results being made available to the COT cases or to AUSTEL?

August 1993:  This Telstra FOI document folio A58983 is not dated but appears produced before, and no later than, August 1993, even though it relates to the forthcoming settlement proposals. This document states:-

  • “Reports just in – confusing/contradicts strong efforts – unsatisfactory results.
  • Most cases need more investigation.
  • First must resolve and identify problems.
  • Settlement discussions cannot proceed until problems identified.” (GS 87)

TELECOM SECRET – COT CASES AND AUSTEL

19th August, 1993:  This internal Telstra memo from Harvey Parker, Group General Manager – Commercial and Consumer, states:-

“Austel’s direction has enormous workload implications (notwithstanding technical constraints and misunderstandings) and also has significant legal complications.  Some of the material sought is under Legal Professional privilege. (GS-CAV 88)

Please note: AUSTEL’s request for documents from Telstra, was ONLY associated with the COT cases telephone exchange material, i.e., technical information surrounding Telstra’s testing of the exchanges and the customer premises and all relevant known fault information concerning the COT businesses.  AUSTEL did not request Telstra to supply any documentation pertaining to legal issues.

Mr Harvey’s statement:-

“Some of the material sought is under Legal Professional privilege,”

confirms COT service fault information was being held under LPP, and echoes Rosanne Pittard’s FOI folio R10606 discussed above, also dated 19th August, 1993, i.e.,

“Some of the documents on the files are Telecom Secret, some are Legal professional privilege.”

When assessing these two (19th August, 1993) documents with the Freehill Hollingdale & Page strategy, dated 10th September, 1993 by Denise McBurnie (discussed below), it seems reasonable to assume that, as Telstra withheld relevant fault information from both AUSTEL and the COT cases (during their respective arbitrations), the arbitrator was unable to correctly assess ALL relevant fault information.

23rd August, 1993:  A Telstra internal email discussing The Briefcase (FOI R09830) states:-

“The files on Smith and Dawson have been provided to Austel via Craig Downing of Regulatory at the request of Austel following a meeting with Austel on the issue.  The other papers were not requested and not provided. …”

“Subsequently it was realised that the other papers could be significant and these were faxed to Craig Downing 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 Ross Marshall.” (AS – CAV 37-A)

Please note: In the Arbitrator’s award, dated 11th May, 1995 the arbitrator, Dr Hughes, states:-

“The claimant has not asserted that the settlement reached was inadequate, unreasonable or unfair and there is no basis in fact or law for setting aside or avoiding the settlement reached by Telecom and the claimant in respect of all claims prior to 11th December 1992.

In making an award of compensation, it is necessary for me to take into account the amount paid by Telecom to the claimant by way of settlement on 11th December 1992. Particulars of this payment are set out in part 3.3(a) of these reasons. I have taken this payment into account.”

Alan’s response to Telstra’s Arbitration Defence of 12th December, 1994 shows the settlement process, engineered by Ms Pittard on 11th December, 1992 was administered deceptively.  To further support Alan’s allegations that Telstra misled him during the settlement of 11th December, 1992 Alan provided Dr Hughes with a list of FOI documents, including an AUSTEL letter stating if Telstra withheld fault documentation from Alan, during his settlement, then they misled him. AUSTEL previously withheld fault documents themselves – C04006, C04007 and C04008 (AS – CAV 5).

In Alan’s reply to Telstra’s arbitration defence on this deceptive conduct Alan states, on {p2}:-

“I would submit that for Ms Pittard as General Manager of Telecom Commercial Victoria/Tasmania to take these actions and execute these actions is one of negligence and a breach of statutory duty”

and on {p4}:-

“Mr Arbitrator you would find that Telecom has been negligent in their dealings with my phone service and the actions of Ms Pittard in refusing me historical fault information prior to the settlement was not only negligent, misleading anddeceptive, it was also unconscionable conduct.”

Why did Dr Hughes say that Alan did not complain about the settlement process when Alan had clearly documented how unreasonable and unfair the whole settlement process had been?

1st September, 1993:  This internal Telstra email (FOI folio A08232), from Don Pinel to Rosanne Pittard, states:-

“Ian has asked to put together a small team urgently to look at imaginative technical options for the COT customers to address their concerns.” (AS – CAV 37-C)

This email does not suggest Telstra believes the COT cases’ complaints are false.

8th September, 1993:  A further Telstra internal email (FOI folio A02303), from Don Pinel to Ross Marshall, regarding RVA on calls to connected numbers, states:-

“There seems to be an opinion that calls from ARE or ARF to AXE have a protocol problem that results in significant call failures. Do you have any info on this?”
(AS – CAV 38)

Both Alan and Graham’s business were routed off AXE exchanges.

10th September, 1993:  Internal Telstra FOI document A04958 states:-

“Connection of monitoring equipment at Schorer’s premises requires AT&T attendance as they hold site maintenance contract. …”

“MacMahon embarrassed, apologetic etc re stuff-up at Schorer’s”. (GS-CAV 92)

Freehill Hollingdale & Page

10th September, 1993:  This document, FOI folio N00749 to N00760, from Denise McBurnie to Telstra’s Corporate Solicitor, Ian Row, confirms Ms McBurnie advised Mr Row it would be appropriate to hide relevant COT information under Legal Professional Privilege.  FOI folio N00750 confirms Ms McBurnie appears to have singled out four of the COT Cases businesses Golden Messenger, Tivoli Theatre Restaurant, Japanese Spare Parts and the Cape Bridgewater Holiday Camp, for Legal Professional Privilege. (GS-CAV 93)

Associate Professor Sue McNicol, Australia’s leading specialist in Legal Professional Privilege, has assessed the document titled COT Case Strategy, Prof McNicol advised that by using this strategy to withhold non-legal FOI documents under Legal Professional Privilege, Telstra knowingly made false or spurious claims to privilege. (GS-CAV 94).

September, 1993: This internal Telstra email FOI folio K24548, appears to have been produced around the month of September 1993, and states:-

“It would be best to avoid COT Case member, Mr Graham Schorer of Golden (Messenger) to avoid embarrassment as you say. His main numbers are 03 329 7355 and 03 329 7255, but he has several rotary groups and about 40 lines in total.”

“Please prepare the results for the Corporate Lawyers under legal professional privilege and limit distribution of the results.” (GS-CAV 96)

14th September, 1993:  Telstra’s Jim Holmes writes to AUSTEL’s John MacMahon, stating:-

“A further problem has arisen with the monitoring of Golden Messenger, for whom as you are aware, connection of monitoring was delayed due to the numbers initially advised by Austel not being the right ones.  On Friday 10 September staff attempted to connect the new numbers but found that the terminal blocks provided at the Golden Messenger PABX do not allow for the parallel connection of additional wires.  There is therefore no obvious access point to allow monitoring at the customer’s premises. Further approaches are being explored in conjunction with the PABX supplier but at this stage no solution has been found.” (GS-CAV 97)

15th September, 1993:  Telstra internal memo FOI folio K34881/K34882 states:-

“The Golden Messenger PABX exchange lines use the same signalling between the PABX and exchange as a normal telephone service. Clear down works as follows:

“1. Incoming Call to PABX from the network

  • If only the distant A party restores the line is cleared forwarded to the PABX exchange line appearance at the terminating exchange [sic]. The PABX exchange line goes to line lock-out condition and the PABX extension receives busy tone until the PABX extension clears.
  • If only the B party clears (PABX extension clears) the PABX will open the loop to the exchange. The exchange circuit goes into time supervision.  After 90 seconds a Force Release signal is sent to the A parties [sic] originating exchange.  This clears the connection orward and sends the PABX exchange line circuit to line lock-out and the PABX extension receives busy tone until it clears.”

“The above assumes normal categories apply. Malicious Call Trace category changes the above to give control of release to the B party.  The issues relevant to Mr Schorer’s concerns are:

  1. In case 1(b) – for 90 secs after the PABX extension hangs up on an incoming call the exchange line is held in the line-lock-out condition and cannot be reused.
  2. The Forces Release signals within the Telecom network are not passed to the PABX on ring down circuits.
  3. In-dial PABXs have different signalling arrangements and would normally receive clear down signals from the Telecom exchange.”

“Case 1(b) does not explain Mr Schorer’s service difficulties as while the exchange line is held in the line lock-out condition, new incoming calls would be offered to other exchange lines in the PABX group.” (GS-CAV 98)

Below (25th January, 1994) it will be seen that there were problems in the CAN servicing Golden Messenger.  It is also highlighted below that AUSTEL allowed Telstra the privilege of instructing Bell Canada International (BCI) they need only to test the inter-exchange network servicing the COT customers – and not the CAN.

15th September, 1993: This Telstra email FOI folio R03173, subject “Access to Files” states:-

“The Corporate Solicitor’s office has two files in relation to the COT cases.

  1. A general COT case file and
  2. The litigation file relating to Golden Messengers.”

“All material on these files ought to be claimed as legal professional privileged.” (GS 99)

17th September, 1993:  Telstra’s Corporate Secretary Jim Holmes’ email to Telstra’s Don Pinel (FOI folio A00097), regarding the COT project team, states:-

“We have an arrangement with Freehills.  No separate contract is needed.  Go straight to Andrew Moyle.” (GS 100)

21st September, 1993:  Don Pinel sends an email to Jim Holmes, stating:-

“Met at length with Freehills this morning (Ian Row was there).  I have arranged for Denise McBurnie to provide leagal [sic] input to the project and suggested that she come to tomorrow’s meeting to meet the players and pick up the threads.”
(GS-CAV 101)

23rd September, 1993:  This internal Telstra email from Don Pinel to Rosanne Pittard and Corporate Secretary Jim Holmes, FOI folio R03022, advises the Project Team that all correspondence from COT (and similar) customers should be channelled through Denise McBurnie of Freehills.  He states:-

“Would you please ensure that with all customers that are, (or have the potential to become) serious complaints, correspondence is processed through Freehills with initial acknowledgement by the Region.” (GS-CAV 102)

27th September, 1993:  This letter from Graham Schorer to Robin Davey, AUSTEL Chair, explains Mr Schorer’s concerns regarding directions to register any further phone complaints through Andrew Moyle of Freehills.  Mr Schorer states:-

“Mr Moyle informed me that any future communique with Telecom had to be placed in writing and sent directly to him to enable the information to be acted upon immediately.” (GS-CAV 103)

28th September, 1993:  Robin Davey writes to Telstra’s CEO Frank Blount, stating:-

“Telecom now appears to have a done a ‘back flip’ by instructing its solicitors, Freehill Hollingdale & Page, to inform Mr Schorer that he must ‘…address any concerns of a legal nature involving our client and your business, direct…’ to their office. While Freehill’s [sic] letter of 27 September 1993 … to Mr Schorer states that ‘…does not in any way preclude… [him] … from addressing non legal matters through the normal channels of communications previously agreed…’ between him and Telecom, it places Mr Schorer in the impossible position as a layman of having to distinguish between ‘concerns of a legal nature’ on the one hand, and non legal matters’ on the other. …”

“As indicated in my letter to Mr Campbell, there is a strong feeling among the COT Cases of a lack of good faith on Telecom’s part.  If Freehill’s letter correctly reflects Telecom’s instructions it can only serve to reinforce that feeling.” (GS-CAV 104)

And, Telstra’s internal email, FOI folio C02840, subject COT media latest states:-

“Steve Lewis (Australian Financial Review) 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 Freehills.” (GS-CAV 106)

September, 1993:  Telstra FOI document marked Sept folio R00524 notes that, on occasions, it might be desirable to install recording equipment at customer’s premises and states:-

“All technical reports that relate to customer’s services are to be headed ‘Legal Professional Privilege’, addressed to the Corporate Solicitor and forwarded through the dispute manager.” (GS-CAV 107)

28th September, 1993:  This Telstra internal email FOI folio A03254, from Don Pinel to Jim Holmes, with the subject Letter to Schorer, states:-

“One point not covered that you may like to consider is the question of ‘duress’. This has been raised in a number of places and requires rebuttal.”

“Perhaps I am getting too legalistic and defensive but we can’t afford to let anything get away. However, our best option is still to force these cases down a legal, structured path.” (GS-CAV 108)

1st October, 1993:  This document from Denise McBurnie to Telstra’s Don Pinel, confirms that Freehill’s were also writing to Mr Alan Smith, on behalf of Telstra. Ms McBurnie states:-

“I enclose a copy of the letter sent to Mr Alan Smith at 1.16 pm today.  I also confirm that I telephoned Mr Smith on phone number 055 267 267 and spoke to Mr Smith who confirmed that he had received the facsimile.” (GS-CAV 109)

5th October, 1993:  The draft of the COT Fast Track Settlement Proposal (FTSP) from AUSTEL’s Robin Davey states, at point 40:-

“Finally, if the attached letter (Attachment ‘D’) dated 7 July 1993 from Freehill, Hollingdale & Page to one of the COT Cases’ solicitors is indicative of the way that Freehill, Hollingdale & Page have approached the COT Cases in the past, I would be more than a little concerned if they were to have a continuing role.” (GS-CAV 110)

11th October, 1993:  Telstra internal email H36291 confirms Telstra’s knowledge of the 1800 network billing problems Peter Zeagers to Nigel Beaman:-

“I am receiving a disturbing number of reports of instances where the 1800 prefix ‘does not work’ in the network.” (AS 122-D)

14th October, 1993:  This internal Telstra email FOI folio R03331, is discussing how to minimise the problems experienced by the COT claimants. It states:-

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

“My view is that Telecom’s response to this issue should reflect the advice from Denise McBurnie, Freehill, Hollingdale & Page, Solicitors.” (GS-CAV 111)

19th October, 1993:  This document from Denise McBurnie to Don Pinel and titled Legal Professional Privilege Confidential/Commercial In Confidence, includes the following:-

“Duesbury & FHP continuing of evaluating [redacted by Telstra] claim – final report to Telecom will be privileged and will not be made available to [redacted by Telstra]”

“Telecom preparing report for FHP analysing data available on [redacted by Telstra] services (ie. CCAS, Leopard, CABS and file notes) – this report will be privileged and will not be made available to (blank).” (GS-CAV 112)

It is clear from the above letters of 14th and 19th October, 1993 that Telstra had no intention of listening to Robin Davey’s concerns about Freehills having a continuing role in the COT case issues.

25th October, 1993:  This internal Telstra email, FOI folio A06541, headed Recording of Customers Calls, states:-

“I understand that the Telecom has authority under the act to monitor (listen to and/or record) customer telephone conversations as part of the fault management process.”

During Graham Schorer’s Fast Track Arbitration Procedure, Telstra advised Dr Hughes, the arbitrator, on 11th November, 1994 that they would address the interception issues raised by Mr Schorer.  Telstra’s arbitration defence confirms they didn’t address these issues at all. (GS-CAV 113)

29th October, 1993:  Internal Telstra email, folio A05592, states:-

“I can confirm your understanding that Telecom may listen and record telecommunications for carrier operational purposes which includes installation, the operation and maintenance of the network and for tracing of, for example, malicious calls. Otherwise it is illegal to record a telephone conversation without the knowledge of the parties to that conversation.” (GS-CAV 114)

At this time, Telstra internal FOI document K01489, confirms that while Telstra were testing Alan’s Mitsubishi fax machine (using the office of Golden Messenger as the testing base):-

“some alarming patterns of behaviour were noted”,

and,

“Even on calls that were not tampered with the fax machine displayed signs of locking up and behaving in a manner not in accordance with the relevant CCITT Group 3 fax rules. … Even if the page was sent upside down the time and date and company name should have still appeared on the top of the page, it wasn’t [sic].” (AS – CAV 44)

Telstra FOI documents K03750, K03751 and K03752 attached as (AS – CAV 44) confirm this testing was generated from a Xerox telecopier installed in Graham’s office.  These three documents include technical information showing the interoffice lock-up problem between their two offices.

The 1992 to 1995 fax interception issues are concerning as, on 31st July 2001, Alan received a number of startling FOI documents from ACMA.  One of these eight page documents was originally faxed to the arbitrator’s office fax line 03 6148730 at 05:56 on 15 February 1995.  The information contained in this combined document shows that during the period in which Telstra and AUSTEL investigated the briefcase saga, Telstra’s local Portland technician Gordon Stokes, monitored Alan’s fax line to see who he was faxing information to after the briefcase was inadvertently left at Alan’s premises.  FOI document K03273 says:-

“Micky, This is a note from Gordon Stokes, if you want me to type up some info please advise ASAP. The information regarding the telephone numbers called by this customer following this incident are available from Network Investigation and my information was verbal from Gordon Stokes.”

When collated with Mr Stokes’ other diary notes in the briefcase, this leaves very little doubt: the faxing side of my business was not private.

FAST-TRACK SETTLEMENT PROPOSAL (FTSP)

The COT four, Ann Garms, Maureen Gillan, Graham Schorer and Alan Smith, provided AUSTEL with proof that Telstra continued to deny their businesses still suffered from phone faults, or at least, Telstra denied the extent of these faults and their incorrect charging.  Alan also provided AUSTEL with proof of the unethical way Telstra conducted his previous settlement on 11th December, 1992.  Finally, AUSTEL began to look for an appropriate process to finalise all these outstanding matters and so, Ann, Maureen, Graham and Alan began negotiations for the drawing up of the FTSP.

Because of the proof provided to AUSTEL, confirming problems continued after the settlements and court actions, AUSTEL looked towards the reporting of Coopers & Lybrand, who were now auditing the way Telstra previously dealt with legitimate COT complaints.  It was during this time that Robin Davey made a statement to the four COT cases stating that before an assessor can bring down a finding on COT matters, end to end testing of services at premises will have to be implemented to ensure the matters are fixed. The COTS later learnt this process was to be Service Verification Tests (SVT).  Robin Davey assured Graham Schorer and Alan Smith that Telstra had to provide conclusive evidence to the assessor, before the assessor could bring down any technical and/or compensatory findings.

1st November, 1993:  Telstra internal email, H36293, from Christopher Peck was forwarded to Nigel Beaman. It states:-

“All Admin groups are being inundated with complaints from customers who have advertised their numbers as 1800 but their customers are simply unable to get through to them.  I have also spoken to our fault staff out at Waverley who are also being inundated with the same complaints.” (AS – CAV 45A)

5th November, 1993:  Telstra internal memo, H36178, from Telstra’s Greg Newbold, Group Communications Manager, alerts Harvey Parker, Group Managing Director of Commercial and Consumer, about the short-duration, post-dialling delays affecting Telstra’s 1800 customers.  Mr Newbold states:-

“Bruce is concerned that the matter requires fixing at a national network level not just on a fault by fault basis.  He also raises the question whether we should be actively promoting 1800 in the current circumstances.” (AS – CAV 45B)

Please note: Alan was never informed that Telstra was aware that Alan’s 1800 complaints were valid nor advised by Telstra to withdraw his 1800 advertising until they fixed the problem.

CONFLICT OF INTEREST – PART 1

10 November, 1993:  Warwick Smith, TIO discloses confidential information.  Telstra FOI document A05993, is marked CONFIDENTIAL Subject – Warwick Smith – COT cases.  In this Telstra email addressed to Telstra’s Corporate Secretary Jim Holmes, copied to Frank Blount Telstra’s CEO, author Chris Vonwilla, Telstra’s Corporate Affairs Officer states:- (AS – CAV 48A)

“Warwick Smith contacted me in confidence to brief me on discussions he has 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 Warwick 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.
  • This would appear highly unlikely at this stage, given Boswell’s apparent lack of interest in raising it within the Party Room.
  • The intermediary will raise the matter with Boswell, and suggest that Boswell discuss the issue with Warwick Smith. Warwick 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.” (GS-CAV 116)

Exhibit (AS-CAV 48-B) confirms Chris Vonwiller and Jim Holmes were both members of the TIO Board, when this email went into circulation.  Exhibit (AS-CAV 48-C) confirms Ted Benjamin was also reporting confidential information he was privy to, as a TIO council member, back to Senior Telstra Executives.

11th November, 1993:  This letter from Freehills’ Denise McBurnie to Telstra’s Don Pinel, under the heading Draft Austel Submission Legal Professional Privilege, discusses a draft of the AUSTEL COT report. Ms McBurnie states:-

“In light of this approach, we emphasise that, while we have endeavoured to minimise any ‘dangerous’ admissions of liability which may have appeared in the draft Submission…”

The letter then discusses the many issues related to Telstra’s possible breaches of the Trade Practices Act 1974, in connection with COT matters. (GS-CAV 117)

12th November, 1993:  This letter from Russell Berry, Freehills, confirms Telstra’s secondment of Freehills’ Simon Chalmers.  As shown below, Mr Chalmers was involved in the release of FOI documents to Graham Schorer and Alan Smith during their respective arbitrations. (GS-CAV 118)

Remember, the TIO, Warwick Smith, and his legal counsel, Peter Bartlett, were provided with the draft Fast Track Settlement Proposal (FTSP), which outlined AUSTEL’s concern if Freehills had a continuing role in the COT matters.  The fact that Telstra used Freehills in their arbitration defence of Graham and Alan Smith’s arbitration, confirms Warwick Smith and Peter Bartlett did not adhere to those concerns.

GS 119 shows the type of FOI documents (not legal documents) that were withheld from Graham Schorer under Legal Professional privilege – using the advice given to Telstra on 10th September, 1993 by Denise McBurnie (Freehills).

17th November, 1993:  This internal Telstra email to Jim Holmes and Ted Benjamin, folio A05254, shows that yet another so-called independent report was about to be sanitised, when the writer of this email states:-

“Am now raising with Sekuless the merits/demerits of holding back the BCI [Bell Canada International] info for a ‘cleansing’ program immediately after the mess of Coopers.” (GS-CAV 120)

CHAPTER THREE

Fast Track Settlement Proposal

18th November, 1993:  By signing the FTSP, Mr Holmes agreed that Graham Schorer’s matters were to be settled through a non-legal commercial assessment process.  This document concludes by stating:-

“This proposal constitutes an offer to all or any of the COT Cases referred to in Clause (1)(a), which will lapse at 5pm on Tuesday 23 November 1993. This offer may be accepted by signature below and sending advice of such signature to AUSTEL or the Telstra Corporate Secretary before that time.” (GS-CAV 121)

23rd November, 1993:  Graham Schorer and Alan Smith sign the AUSTEL-facilitated FTSP. (GS-CAV 122)

AUSTEL’s COT CASES REPORT:

At point 5.30, 5.31 and 5.32 in this report, Robin Davey, chair of AUSTEL, states:-

5.30     “…Understandably the original COT Cases, having reached an initial ‘settlement’ involving –

  • compensation for past losses
  • restoration of an adequate telephone service

expected that they might be able to resume their businesses activities afresh.”

  • “…Unfortunately that did not prove to be the case. Soon after his initial ‘settlement’ Mr Smith reported continuing problems to AUSTEL.  Even prior to her settlement, Mrs Garms reported continuing faults to AUSTEL.  The decision by Mrs Garms and Mrs Gillan not to report faults to Telecom in order to hasten a financial settlement is noted above.  Mr Schorer continued to report faults to AUSTEL throughout the period.”
  • “…The fact that faults continued to impact upon the businesses in the period following the settlement shows a weakness in the procedures employed. That is, a standard of service should have been established and signed off by each party.  It is a necessary procedure of which all parties are now fully conscious and is dealt with elsewhere in this report. Its omission as far as the initial ‘settlement’ of the original COT Cases were concerned meant that there was continued dissatisfaction with the service provided without any steps being taken to rectify it.  This inevitably led to a dissatisfaction with the initial ‘settlement’ and to further demands for compensation.  To avoid this sort of problem in the future, AUSTEL is, in consultation with Telecom, developing –
  • a standard of service against which Telecom’s performance may be effectively measured
  • a relevant service quality verification tests. (see AUSTEL COT Case Report)”

25th November, 1993:  A Telstra memo, regarding short-duration calls, states:-

“The following is an assessment of the individual disputes highlighted by Mr Smith. From the information given, little more can be offered for explanation than ‘This is not the way it should work, we need to investigate to find cause’. …”

  1. Calls to Traralgon, being charged on busy.

“This situation should not have occurred.” …

  • Calls to RVA. …

“being charged for RVA is not a correct operation…” (AS – CAV 46A)

30th November, 1993:  This Telstra internal memo, FOI document folio D01248, is from Telstra’s Group Manager of Customer Affairs and TIO Council Member to Ian Campbell, Customer Projects, Executive Office.  With the subject TIO AND COT, this was written seven days after Graham signed the TIO-administered FTSP.  In this memo, Mr Benjamin states:-

“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, Ian Campbell has added a handwritten comment:-

“Don Pinel … Seems ok to me. When I spoke to Warwick [Smith] I suggested that at least for the first group…” (GS-CAV 124-A)

Senate Hansard information dated 26th September, 1997 (GS-CAV 124-B) confirms that:-

  1. Ted Benjamin, Telstra’s main arbitration defence liaison officer in Graham and Alan’s arbitrations, was also a member of the TIO Council; and
  2. During a Senate hearing into COT issues, the then-new TIO, John Pinnock, agreed that Mr Benjamin had not removed himself from council discussions of COT matters:-

Senator SCHACHT “Mr Benjamin, you may think that you have drawn the short straw in Telstra, because you have been designated to handle the CoT cases and so on. Are you also a member of the TIO Board?”

Mr Benjamin “I am a member of the TIO council.”

Senator SCHACHT “Were any CoT complaints or issues discussed at the council while you were present?”

Mr Benjamin “There are regular reports from the TIO on the progress of the CoT claims.”

Senator SCHACHTDid the council make any decision about CoT cases or express any opinion?”

Mr Benjamin “I might be assisted by Mr Pinnock.”

Mr Pinnock“Yes.”

Senator SCHACHT Did it? Mr Benjamin, did you declare your potential conflict of interest at the council meeting, given that as a Telstra employee you were dealing with CoT cases?”

Mr Benjamin“My involvement in CoT cases, I believe, was known to the TIO council.”

Senator SCHACHT No, did you declare your interest?”

Mr Benjamin“There was no formal declaration, but my involvement was known to the other members of the council.

Senator SCHACHT “You did not put it on the record at the council meeting that you were dealing specifically with CoT cases and trying to beat them down in their complaints, or reduce their position; is that correct?”

Mr Benjamin “I did not make a formal declaration to the TIO.”

Exhibit (GS-CAV 124-C) is page 19 from the in-camera Senate Hansard dated 9 July, 1998, where Senator Schacht asks Ted Benjamin the following question:-

Senator SCHACHT Mr Benjamin, when did you first get involved in dealing with CoT cases?”

Mr Benjamin“In 1994.”

As shown above (see the date of 26th September, 1992) Mr Benjamin has been involved in dealing with the COT cases since 1992, not 1994.

The above information shows a TRULY independent person should have administered the COT arbitrations and, if that had been the case, it is most likely that the COT arbitrations would have been carried out in an appropriately democratic manner.

In the immediate segment below, it is clear that Telstra favoured the Telstra-funded TIO in preference to the Government-funded Regulator, AUSTEL, when dealing with the COT case issues.  When we combine these two documents, dated 30th November and 3rd December 1993, the reasons why become clear.

3rd December, 1993:  This internal Telstra email, FOI folio A01924, states:-

“Now that the TIO has been officially ‘launched’ it would be appropriate for Austel to change its approach to customer complaints and start referring them to the TIO rather than dealing with them in AUSTEL. …”

“Rather than writing to Davey on this it might be better handled either by a phone call or alternatively a phone call or letter from the TIO to Davey.”

“It is desirable that the growing stream of complaint to AUSTEL, followed by request for files and other records is stopped.” (GS-CAV 125)

On the surface, this seems to be quite a harmless proposal, but there is an underside to the suggestion that the TIO should investigate customer complaints, rather than AUSTEL. Consider the Telstra email of 10th November, 1993 (above) from Telstra’s Chris Vonwilla to Telstra’s hierarchy, confirming that TIO Warwick Smith discussed, with Mr Vonwilla, in-confidence government issues regarding the COT claimants.  It is important to highlight the fact that the TIO Board, which included Chris Vonwilla and Telstra’s Corporate Secretary, Jim Holmes, dominated Warwick Smith, and Warwick Smith was nominated as the administrator of the COT arbitrations even though Telstra were the defendants in the COT arbitrations.  In the Alan Smith CAV Chronology LGE file, Alan discusses Telstra file notes that show Telstra wanted the TIO to become involved in the continuing phone problems at Cape Bridgewater which, they hoped, would take Senator Alston (then the Communications Minister) and David Hawker MP out of the equation.  The TIO appears to have favoured Telstra throughout all the COT arbitrations, with little or no regard for the principles of justice.

AUSTEL (now ACMA) is a fully Federal Government-funded organisation and, until Robin Davey retired as Chair, it was almost 100 per cent independent.  The TIO is, on the other hand, funded by the carriers and, during the COT arbitrations, Telstra, Optus and Vodafone were the only carriers on the Board and Council.  How can an administrator be truly independent when he is paid by the organisation on trial (Telstra) in the case he is administrating?  Telstra was certainly on trial in the COT arbitrations and the COT claimants were the plaintiffs.

Please observe the Golden Messenger – CAN Measurement FOI document, folio K34734, discussed below at 25th January, 1994 which states:-

“[F]ollowing the measurements taken on the CAN for Golden Messenger today, two potential problems have been located.

  1. They are: 329 7009 has a probable high resistance joint or similar problem.
  2. 329 7734 has a double jumper on the main frame cable pair side (cable 6 pair 1666).”

Question: Were the 4th December, 1993 and 25th January, 1994 CAN/cable pair documents related to the continuing problems experienced by Golden Messenger?

Answer: Because Telstra concealed numerous non-legal Golden Messenger issues under LPP, the CAN/cable pair issues could not be investigated – even under a Federal Government facilitated Arbitration Process.

Note, in the AUSTEL COT Cases Report (dated April 1994, on page 243, at point 11.8), AUSTEL states:-

“Prior to receiving Telecom’s response to the Bell Canada International report as outlined in paragraph 11.6 above, AUSTEL had written to Telecom informing it that the claim in the Bell Canada International report to the effect that Telecom’s customers received a grade of service that meets global standards goes too far because the study was an inter-exchange study and did not extend to the customer access network – AUSTEL had agreed to the study being so limited on the basis that other monitoring it had requested Telecom to undertake on AUSTEL’s behalf should provide AUSTEL with the data on the efficacy of the customer access network [CAN].”

Also note, on page 246, point 11.18, in the AUSTEL COT Cases Report, AUSTEL states:-

“Telecom responded to AUSTEL’s letter 16 December, 1993 referred to in paragraph 11.10 above in the following terms – As you may be aware, Telecom has extensively tested the CAN.  These results indicated a satisfactory level of performance.”

6th December, 1993:  This internal Telstra memo from Ted Benjamin to Mr H Parker, Group Managing Director of Commercial and Consumer, states:-

“The survey found that 4% of the 2644 small business (ie. Commercial) customers surveyed perceive that they have experienced incoming call problems over the past month which they regard as Significantly or Very significantly affecting their business.” (GS-CAV 126)

Comment:

As shown above, Mr Benjamin was a TIO Council member as well as a very Senior Telstra Executive, therefore, he should have been neutral when providing the survey statistics to Mr Parker.  Numerous Telstra FOI documents show that the word perceive was consistently used by Telstra employees to suggest it was the customer’s equipment at fault, and not Telstra’s network.  On 23rd March, 1999 after a two-year investigation by a Senate Estimates committee, Senator Alan Eggleston advised the Australian Financial Review that, where the COT cases FOI issues were concerned, Telstra acted as a law unto themselves.

7th December, 1993:  Telstra’s Ian Campbell writes to Warwick Smith TIO and administrator to the FTSP stating:-

“The person within Telecom responsible for the final decisions on resourcing procedural arrangements, assessor/s and access to material is myself…”

There is no mention in this letter of arrangements concerning an arbitrator/s. (GS-CAV 127)

16th December, 1993:  This letter, from Denise McBurnie (Freehills) to Alan Smith, states:

“I refer to your letter of 6 December 1993 and our subsequent telephone conversation. …”

“With respect to your comment concerning a customer from Mount Gambier, South Australia, who has reported to you that he had difficulty contacting you on your 008 service, if you are able to provide our client with more details (such as the caller’s telephone number) our client may be able to investigate and comment further on the problem which this customer reported to you.” (GS-CAV 128)

Telstra never explained why this Mt Gambier customer, and numerous other customers, were all experiencing the same problems, and neither did Freehills.  What this document does confirm is that, in the case of Alan Smith (where his telephone problems and faults were concerned), he had to deal directly with Freehills’ before a resolution was reached.

17th December, 1993:  Len Budge, Manager of TELCATS (Telstra’s Office of Customer Affairs) sends an internal memo to Harvey Parker, Group General Manager of Commercial and Consumer, stating:-

“For your information please find enclosed the final Cot market research report which was delivered to Austel this week. As indicated in the draft, 4% of the small business customers surveyed indicated that they were experiencing incoming call difficulties which they judge as significantly, adversely affecting their business.”
(GS-CAV 130)

This four per cent of small business customers experiencing incoming call difficulties is addressed below, at 11th April, 1994.

21st December, 1993:  Ian Campbell’s letter to Warwick Smith, TIO and administrator to the FTSP, confirms the proposal is an assessment and discusses the appointment of an assessor. (GS-CAV 131)

Ian Campbell is the same person referred to in the AUSTEL COT Cases Report, see point 5.7. He wrote to Mr Schorer, on 23rd September 1992, stating:-

“The key problem is that discussion on possible settlement cannot proceed until the reported faults are positively identified and the performance of your members’ services is agreed to be normal. As I explained at our meeting, we cannot move to settlement discussions or arbitrations while we are unable to identify faults which are affecting these services.”

Telstra writes to Warwick Smith TIO Re FTSP

Also on 21st December, 1993:  Telstra and Warwick Smith discuss the Fast Track Settlement Proposal (FTSP).  Please note: there is no mention in this letter of an arbitrator being appointed, only the appointment of an assessor because the process “is a flexible, quasi-judicial process”. (AS-CAV 48-E)

Alan submits his first FTSP FOI request (AS-CAV 48-E):-

“Dear Mr Holmes

“As you are aware of the Fast Track Settlement, you will understand this request. I am applying directly to yourself for All documentation, files and records relating to my business, the Cape Bridgewater Holiday Camp.”

“This request is made under FOI. …”

“These documents are required within 14 days, to enable the Cape Bridgewater Holiday Camp to present our settlement submission.”

Please note: this letter was copied to Mr Robin Davey, chair of AUSTEL (who facilitated the FTSP), and Senators Richard Alston and Ron Boswell, who both advised me, through Graham Schorer, to enter into the FTSP settlement arrangement.

7th January, 1994:  This letter from Warwick Smith to Graham Schorer, mentions only an assessor, not an arbitrator. (GS-CAV 132)

And, this internal Federal Government memo from Tom Dale, of Minister Lee’s office, states:-

“I spoke with Warwick Smith in light of today’s press reports that he is investigating the telephone monitoring allegations. …”

He also mentioned that the fast-track claim settlement process was not getting anywhere due to the COT cases knocking back the TIO’s proposals for people to determine their claims. We should not give the Minister the impression that the fast-track would fix things: it is far from certain.” (AS-CAV 48-F)

The issue being discussed, whether the “fast-track” would fix these matters should have, in Alan’s case, been addressed before he went into the FTSP.  Robin Davey, AUSTEL Chair, had already explained to the previous Minister, the Hon David Beddall MP, on 26th August, 1993 advising him that Telstra were aware of faults still affecting Cape Bridgewater.

Exhibit AS-CAV 48-G to 91 states:-

Cape Bridgewater

Telecom has admitted existence of unidentified faults to AUSTEL.”

Alan’s questions to the Telecommunication Industry Ombudsman, John Pinnock, have always been:-

  • Why was this admission by Telstra to the Government Regulator, AUSTEL, and the advice given by AUSTEL to the Minister regarding these unidentified faults in existence in Cape Bridgewater, hidden from Alan and his technical advisors during his arbitration?
  • Why did AUSTEL and the Government allow Telstra to submit, under oath, in their arbitration defence of Alan’s claims, that, during Telecom’s fault investigations at Cape Bridgewater in 1993 and 1994, they found no faults that would affect Alan’s business endeavours?

10th January, 1994:  This letter from Telstra’s Steve Black to Warwick Smith, TIO, had a copy of Telstra’s Preferred Rules of Arbitration attached that was faxed to Telstra on the same day by Freehills. The letter included the comment:-

“You no doubt appreciate that there is a need for such rules and procedures to be set before any ‘Fast Track’ review is commenced.  That is because the ‘Fast Track’ agreements signed by Mr Schorer, Mrs Garms, Mrs Gillan and Mr Smith, only constitutes agreements to enter into an arbitration process.” (GS-CAV 133)

Whoever persuaded Steve Black to write this statement (that the agreement only constitutes agreement to enter arbitration), did so, knowing they were misleading Warwick Smith, at the detriment of the COT cases.

When Warwick Smith met the COT cases, on 11th January,1994 (see below), he was made aware of the previous commitment given to Mr Schorer, by Ian Campbell, that the FTSP cannot fully proceed until Telstra positively identified the problems and faults affecting the COT cases’ businesses.  Warwick Smith was adamant that any continuing problems and faults raised by the claimants would be investigated prior to the assessor and/or arbitrator making his decision. The CAV Chronology – LGE Alan Smith file confirms neither Warwick Smith nor Telstra abided by this commitment.

11th January, 1994:  This letter from Steve Black to Warwick Smith refers to an assessor being appointed to provide an independent and impartial perspective.  This letter confirms Mr Black’s personal preference was for one assessor.  The process was only ever intended to be an assessment. (GS-CAV 134)

The COT cases alerted Warwick Smith, (TIO) and administrator of the FTSP, during January 1994, that AUSTEL’s chair Robin Davey had assured them that Freehill Hollingdale & Page, would no longer be involved in their Fast Track Settlement Proposal as he instructed Telstra, on 3 October, 1993 that Freehills were not to be involved.  Yet, in January 1994, Telstra appointed Freehills as their arbitration defence lawyers to Alan and Graham’s arbitration under the nose of Warwick Smith.  In fact, Simon Chalmers of Freehills was seconded by Telstra in January 1994 as their official FOI co-ordinator (scrutineer) of what FOI documents should be provided to the COT cases and which ones should be withheld.

COT requested documents vetted prior to delivery

11th January, 1994:  Warwick Smith, (who was supposed to be independent of Telstra during the FTSP COT process) receives a letter from Telstra’s Steve Black, which states:-

“It was agreed at a meeting between Mr Graeme Ward and Mr Steve Black of Telecom and Dr Bob Horton and Mr Neil Tuckwell of AUSTEL on 7th January 1994 that:

  • Information obtained from Telecom, in the course of AUSTEL’s regulatory functions, and relevant to any parties involved in a formal arbitration process with Telecom under the control of the Telecommunications Industry Ombudsman (TIO) will only be released after consultation with the TIO and Telecom.” (GS-CAV 135)

Clearly the TIO, although officially acting as the administrator of the COT arbitrations, were working with Telstra and the Australian Regulator to ensure ONLY material that was first scrutinised by Telecom and the TIO would be passed on to the COT members.

A further alarming document, relating to the vetting of COT information, from Steve Black to Warwick Smith and dated 11th July, 1994, states:-

“Telecom will also make available to the arbitrator a summarised list of information which is available, some of which may be relevant to the arbitration.  This information will be available for the resource unit to peruse. If the resource unit forms the view that this information should be proved to the arbitrator, then Telecom would accede to this request.” (AS-CAV 62-B)

Please note: None of the COT cases were advised that the TIO-appointed Resource Unit would be allowed to vet what arbitration documentation they thought were relevant to the process before introducing it to the arbitration process.

In Alan Smith’s case, the TIO-appointed arbitration Resource Unit, Ferrier Hodgson Corporate Advisory (FHCA), withheld regulatory information and arbitration material that should have been provided to the arbitrator and Alan Smith.  FHCA has since admitted (2nd August, 1996) to withholding AUSTEL regulatory letters, exchanged between AUSTEL, Telstra and the arbitrator during October and December 1994, which were all relevant to Telstra’s defence and Mr Smith’s claim.

11th January, 1994:  Telstra’s Paul Rizzo, writes a similar letter to AUSTEL’s acting Chair, Mr Bob Horton. He states:-

“Information obtained from Telecom, in the course of AUSTEL’s regulatory functions, and relevant to any parties involved in a formal arbitration process with Telecom under the control of the Telecommunication Industry Ombudsman (TIO) will only be released after consultation with the TIO and Telecom.” (GS-CAV 136)

12th January, 1994:  A further letter from Steve Black to AUSTEL’s John MacMahon states:-

“In accordance with our agreement reached in the meeting with yourself and your Chairman, these documents will be released through the TIO at the appropriate stage of the arbitration process.”

“It is my view that the appropriate time for release is after the assessor is appointed and the procedural rules for the arbitration process have been agreed by all parties.”

“However, as indicated in our agreement, this decision will be taken in consultation with the TIO.” (GS-CAV 137)

Alan and Graham attend the first COT FTAP meeting

12th January, 1994:  Alan and Graham attend the Melbourne office of the TIO, Warwick Smith.  At this meeting, Peter Bartlett confirms the arbitrator can only make a final determination based on documents provided to him, in accordance with the Arbitration Agreement.  This confirms the COTs’ understanding that only through an arbitration process could they obtain all the documents needed to submit their claims. (AS-CAV 65)

Numerous documents in the main CAV Target files confirm the continuing problems with Alan’s fax line and show how this affected the submission of his claim at the time of the FTSP and FTAP, including raising the question of how his business losses could be commercially assessed if the phone and fax problems were still apparent.  It was a futile exercise until Telstra fixed the problems and faults.

Because of the complexity of the issues the arbitrator was to address, it was agreed to base the arbitration rules on the original commercial FTSP; the rules of the arbitration agreement (FTAP) would incorporate the rules of the original FTSP.

When Robin Davey, then AUSTEL Chair, assisted with drafting the original FTSP rules, he was fully aware of Telstra’s unethical behaviour, during Alan’s settlement of 11th December, 1992 and of their conduct towards Graham Schorer.  He was also aware of the allegations regarding Telstra’s phone bugging and misleading conduct and he knew these issues were independent parts of Graham and Alan’s overall complaints.  Mr Davey therefore wanted the FTSP rules to be drafted to allow for all these individual issues, including Graham’s problems and Alan’s commercial settlement process, to be properly and separately assessed under the FTSP.  This was achieved by including clause 10.2.2, which covered the way the claimants could present their claims.  This clause initially referred to “each of the Claimants’ claims” and was twofold in meaning:  it allowed claimants to present separate and different causal links between the alleged service’s difficulties, problems and faults (such as billing errors, phone bugging etcetera).  These were to be assessed separately, based on the evidence each COT case presented.  In this way, the FTSP assessor could also look at evidence regarding the way Telstra previously misled the COT four in their individual settlements.

Alan later followed these guidelines when preparing his claim but was surprised to find Dr Hughes did not cover the individual sections in his award – nor did he prepare any written findings on these separate issues.  Alan later discovered that clause 10.2.2 was removed from the arbitration rules, without the permission or knowledge of the claimants.  There is no correspondence in existence, from either the TIO or the arbitrator, to indicate that COTs ever agreed to the removal of this important clause.

12th January, 1994:  Telstra file note FOI folio K00269 – Legal and Professional Privilege –states:-

“Ted Benjamin called. He wants us to collect information together for Golden Messengers in a similar fashion to what is being done for Cape Bridgewater under FOI.  The assumption is that either the arbitrator or Mr Schorer will be looking for the information soon as a result of the fast track arbitration process.” (GS-CAV 138)

Compare this Legal Professional Privilege document with evidence above confirming Ted Benjamin provided confidential TIO-council information to Telstra employees, on 30th November, 1993 and he later admitted to John Pinnock TIO, on 7th September, 1995, that Telstra withheld 40 per cent of the requested FOI documents from Alan Smith and the arbitrator (see CAV John Pinnock Target file).  It appears the same withholding of documents was about to happen to Mr Schorer.

12th January, 1994:  John Rundell, of FHCA (the newly appointed FTSP Resource Unit), provides Graham Schorer with curricula vitae for:

  1. Paul Howell, DMR Group Inc – Corporate, Montreal
  2. Jan Blaha, DMR Group Australia Pty Ltd (GS-CAV 139)

In the draft of Alan Smith’s Arbitrator’s Award (see CAV Relevant Information File), at point (i), Dr Hughes states:-

“[P]ursuant to paragraph 8 of the arbitration agreement, I had power to require a ‘Resource Unit’, comprising Ferrier Hodgson, Chartered Accountants, and DMR Group Australia Pty Ltd, to conduct such inquiries or research as I saw fit.”

In the final version of the Arbitrator’s Award (see CAV Relevant Information File), Dr Hughes had added to point (i) so it now reads:-

“[P]ursuant to paragraph 8 of the arbitration agreement, I had power to require a ‘Resource Unit’, comprising Ferrier Hodgson, Chartered Accountants, and DMR Group Australia Pty Ltd, to conduct such inquiries or research as I saw fit. By consent of the parties, the role of DMR Group Australia Pty Ltd was subsequently performed jointly by DMR Group Inc. and Lane Telecommunications Pty Ltd.”

On 24th May, 1994 Peter Bartlett provided Graham Schorer with a copy of the Confidentiality Undertaking, signed by Jan Blaha, DMR Group Australia Pty Ltd, but it was not until late February 1995 that Warwick Smith, TIO, told the COT claimants DMR Group Australia Pty Ltd pulled out of the arbitration procedure because of a conflict of interest.  The TIO never explained when this conflict of interest was discovered. The claimants were then forced to accept Paul Howell, DMR Group Inc. (Canada) as the substitute TIO-appointed Principal Technical Consultants, with Lane Telecommunications Pty Ltd as their assistants.

Questions:

  1. Did DMR Group Australia Pty Ltd want to change their corporate identity to DMR Inc. on 12th April 1994 because, right from the outset, they believed that, as DMR Inc. (Canada) was offshore and not affiliated financially with the Australian arm of DMR, there would be no liability problems if Telstra issued a court injunction in relation to DMR’s technical findings? If they did change their corporate identity so they could work with DMR Inc. (Canada) and thereby avoid the risk of a messy Australian legal challenge by Telstra, then Jan Blaha should never have signed the Confidentiality Agreement.
  2. Why was Graham Schorer given the CV of Paul Howell, of DMR Group Inc., on 12th January, 1994 before Graham and Alan even signed the FTAP but after they had accepted DMR Group Australia Pty Ltd, on 9th March 1995?
  3. Why did DMR Group Australia Pty Ltd ask, through Ferrier Hodgson, for their business name to be changed to DMR Group Inc. before signing the Arbitration Confidentiality Agreement?

These points suggest that all the parties to the arbitration, except the claimants, were aware of a link between DMR (Australia) and DMR (Canada), before we signed the FTAP.

14th January, 1994:  This letter to Graham Schorer, from Warwick Smith, advises Dr Hughes is to be the assessor to the FTSP. (GS-CAV 140)

Telstra FOI document K00604, subject Voice monitoring of Priority Investigation Services, confirms the local Portland Technical Officer was tapping Alan’s telephone conversations from at least June to August 1993.  The local Portland Technical Officer during this period was Gordon Stokes. (AS-CAV 48-H)

The phone bugging and privacy issues were issues Alan raised with Warwick Smith, during the FTSP.

17th January, 1994:  Warwick Smith sends out a media release confirming Dr Gordon Hughes is the assessor to the FTSP. (GS-CAV 141)

18th January, 1994:  Telstra internal memo, FOI folio R11698, marked Telecom Confidential, from David Stockdale to Simon Chalmers, who was seconded from Freehills, states:-

“I feel obliged to voice concerns I have regarding the information being provided regarding the investigations of Cape Bridgewater and Golden Messengers courier service.” (GS-CAV 142)

AUSTEL acting Chair, Bob Horton, writes a scathing letter to Mr Schorer, stating:-

“As the TIO Fast Track concept does not challenge nor change any of the parties’ rights and responsibilities, the implication that there has been a deal done between Telecom and AUSTEL to the detriment of the COT case members or that Telecom has imposed ‘an instruction’ on AUSTEL is clearly nonsense.” (GS-CAV 143)

This letter from Dr Hughes, to Graham Schorer notes:-

“I have been provided by the TIO with a document entitled ‘Telstra Corporation Limited – “Fast TrackProposed Rules of Arbitration.’ I have not yet formed a view as to the suitability of this proposal.” (GS-CAV 144)

Minutes taken during an Arbitration Meeting, on 17th February, 1994 (see below) records, on page 3:

“Mr Schorer was disturbed that once Mr W Smith was in place, there was a document prepared by Telecom of proposed rules for the arbitration. Mr Schorer considered Telecom was already moving away from the spirit of the FTSP, Mr Bartlett and Mr Hughes both stated they had not received this document [the FTAP] and had not read it and that it was irrelevant.”

The letter Dr Hughes received from the TIO on 10th January, 1994 one month before this meeting (see above), proves that Dr Hughes had already been provided with Telstra’s proposed Rules of Arbitration, so why did he tell this meeting the exact opposite?

Why would an independent assessor assess the defendant’s suggestions before reading the rules of the FTSP process, which the independent regulator, AUSTEL, drafted and which were already signed by both parties to the process as the rules to be used by the assessor?

COMMENTARY:

  1. Dr Hughes was appointed as the assessor.
  2. The FTSP rules regarding a review of the commercial assessment process were already modified, in conjunction with AUSTEL, to ensure the document and process would be workable. A mutually accepted, modified version of the settlement agreement was already signed and was a non-legalistic process that both parties agreed to as a one-off agreement.  It was not the same as the TIO/Telstra proposed method of arbitration.
  3. Dr Hughes did not provide any written comments on his views regarding the Arbitration Agreement until after he had finalised the first arbitration – Alan Smith’s. At this point, in his letter of 12th May, 1995 to Warwick Smith, Dr Hughes advised that the Arbitration Agreement was not credible and needed revising for the remaining COT claimants.

19th January, 1994:  AUSTEL’s Dr Bob Horton writes to Telstra’s Steve Black stating:

“Your letter of 17 January asked AUSTEL to seek in formal terms Telecom’s provision of all voice monitoring tapes in its possession relating to the COT Cases. …”

“Please ensure that all relevant tapes are provided to AUSTEL as a matter of urgency, as we believe they may be of relevance to AUSTEL’s review which is proceeding apace [sic], as we have previously indicated.” (GS-CAV 145)

As shown in Dr Hughes letter to Mr Schorer, dated 10th November, 1994 (see later), Telstra is:-

“therefore, prepared to classify the allegations of unauthorised telephone tapping as falling within the description of ‘alleged service difficulties and faults’.”

Neither Telstra nor Dr Hughes addressed the unauthorised telephone tapping issues in Graham’s arbitration.

Graham Schorer writes to Ms Jill Cardiff, Commonwealth Ombudsman’s Office, raising his concerns about the release-of-documentation deal stating:-

“We view this as an extremely serious matter and ask that you

20th January, 1994:  This Telstra internal memo from Trevor Hill to Alan Humrich, FOI folios B00421, B00424 and B00425, discuss the same type of lock-up problems with the RAM relays, which Graham Schorer previously brought to AUSTELs attention in early 1994.  This document entitled Summary statement on PBX groups for BCI report ‘Rotary Hunting Group Study’ , states:-

“The resultant investigations revealed that relay armatures were sticking due to a phenomena termed ‘wear frit’ or ‘fretting’ where airborne oil and dust and/or ferric oxide particles combined with moisture are attracted to the magnetic zone. … This paste tends to grasp the armature backstop as an anchoring point, the relay armature being held un-opened by the paste.”
(GS-CAV 146-A)

When Bell Canada International (BCI) carried out their PBX study on 14th December, 1993, at the North Melbourne exchange that serviced Golden Messenger, it appears Telstra failed to provide BCI with document B00219/220.  In Telstra’s CAN FOI document folio K34734, dated 25th January, 1994 (discussed below), it is confirmed that five auxiliary lines to Golden Messenger all had potential problems (i.e., 329 7009 – 329 7734 – 3329 0331 – 329 0731 and 329 0056). However, what is most important about exhibit GS 146-b is that, on page 41 of the BCI PBX Rotary Hunting Group Study, BCI listed the same five lines referred to in folio K34734 as all being workable PBX auxiliaries.  There is no mention of the potential problems associated with these five lines, which suggests BCI did not test the Customer Access Network (CAN) after all.

This Chronology of Events shows Mr Schorer and Alan Smith had valid reasons to challenge the authenticity of the BCI and Telstra’s SVT processes.

Ms Cardiff responds to Graham’s letter of the 19th January, 1994 stating:-

“I am seeking Austel’s comments on the substance of your complaint and I shall contact you again as soon as we have considered its response.” (GS-CAV 147)

The TIO Warwick Smith, administrator to the FTSP, AUSTEL’s Robin Davey, author of the FTSP, and a number of Senior Government Ministers from both sides of Parliament, were assured by Telstra that they would provide the original COT four cases all the material they requested under FOI, in support of their claims to be lodged under the FTSP.  However, by now Telstra had threatened the COT cases that unless they sign a new Arbitration Agreement, they will not get the documents to support their individual settlement claims. (AS-CAV 51)

AUSTEL’s Cliff Mathieson and Michael Elsegood countersign a very important letter, regarding the SVT tests, to Telstra’s Mr A Humrich, general manager of central region network operations. The letter states:

“As discussed late last year with Mr J Gitsham, the following comments are offered on your draft set of verification test for public switched telephone services with recurring service difficulties. …”

“Where test results do not meet the essential outcome, remedial action should be taken and the relevant tests repeated to confirm correct network operation.” (GS-CAV 149)

This confirms what Robin Davey promised the COT four, before they signed the FTSP.  Would AUSTEL and the Federal Government be in a position to force Telstra to test a service, again, if the SVT tests proved negative?  In my case the answer was NO.

21st January, 1994:  AUSTEL’s Bob Horton writes to Telstra’s Paul Rizzo, Group Managing Director, stating:-

“In my letter of 13 January, 1994 I questioned the existence of an integral formal agreement on the distribution of material relevant to the COT cases. The purported existence of such an agreement was brought to my attention by Mr Black at our meeting on 7 January, 1994 as a mechanism by which documentation could be released, where it was relevant to the arbitration process associated with the TIO. …”

“I can only conclude that any such formal agreement was only a developing idea on the part of Mr Black.” (GS-CAV 150)

This internal Telstra memo Folio R15696 states:-

“Simon Chalmers, is from Freehill Hollingdale & Page, Telecom’s solicitors.  I suggest that you action this request not just for the two customers mentioned but also for Mr G Schorer and Mr A Smith. Information that has previously been sent to the Viewing Room will be accessed from there.” (GS-CAV 151)

FOI document folio K00094 is an email discussing CCAS connections and includes the statement:-

“several faults have been reported as originating from this number.”

“312 3796 is the Operations Manager for Golden Messengers they have reported difficulties in getting thru to G.M. frequently [sic].” (GS-CAV 152)

24th January, 1994:  This letter from Frank Shelton of Minter Ellison to Dr Hughes, confirms Mr Shelton’s involvement in changing the original AUSTEL-facilitated commercial FTSP document into an Arbitration Agreement, which eventually became a highly legalistic process.  At this time, Mr Shelton was also president of the Institute of Arbitrators Australia. (GS-CAV 153)

In his letter of 12th May, 1995 (see below) to Warwick Smith, Dr Hughes writes they “did not allow sufficient time in the Arbitration Agreement”.  He was referring to Frank Shelton’s revised version of the AUSTEL-facilitated FTSP, which became the FTAP Arbitration Agreement.  Obviously, Dr Hughes believed the mistakes in the Arbitration Agreement document meant the arbitration itself lacked credibility and he blamed those who prepared the document for this situation.  Dr Hughes’ letter of 12th May, 1995 was concealed from Graham Schorer during his arbitration and, before that, from Alan Smith during his arbitration appeal period and neither was it provided, by Mr Pinnock, on 26th September, 1997 when he advised the Senate that Dr Hughes had no control over the arbitration procedures (discussed later).

Warwick Smith writes to Ms Fay Holthyuzen, Assistant Secretary, Regulatory Branch, Parliament House, attaching a public media release stating Dr Gordon Hughes had been appointed as the assessor to the COT FTSP.  Please note:  There is NO mention in this media release of an arbitration process. (AS-CAV 49-B)

25th January, 1994:  The following Telstra internal email FOI folio K34734, from Peter Gamble to Alan Humrich, exposes some of the CAN problems experienced by Golden Messenger:-

“Following the measurements taken on the CAN for Golden Messenger today, two potential problems have been located. …

  • 329 7009 has a probable high resistance joint or similar problem.
  • 329 7734 has a double jumper on the main frame cable pair side (cable 6 pair 1666)”.

“Would you please arrange for these to be followed up urgently.”

“There are also three errors in FACS – the cable pairs listed are incorrect – as follows:

  • 329 0331
  • 329 0731
  • 329 0065”

“An attempt to locate the correct data was made, but without success. Accordingly, measurements were not taken on these three pairs.”

This confirms Peter Gamble was aware of the CAN problems affecting Golden Messenger services, yet Telstra’s briefing B003 report page 12 {p-d}, for 1 January, 1994 to April 1995 records no CAN problems, affecting 03 329 7009 or 03 329-7734. This is a further example of Telstra being selective when documenting facts.

Question:

Why does Telstra’s briefing B003 paper only refer to two phone auxiliary potential problems, when FOI folio K34734 states:-

“There are also three errors in FACS – the cable pairs listed are incorrect – as follows – 329 0331 – 329 0731- 329 0065. An attempt to locate the correct data was made, but without success,”?

Telstra’s briefing B003 report relevant to pages 12 {p-d) and 12 {p-e} are attached to Graham Schorer – CAV Relevant Information file exhibit 6, part 4 and 6 respectively.

Comment:

In the AUSTEL COT Cases Report at point 5.32, on page 91 AUSTEL states:-

“The fact that faults continued to impact upon the businesses in the period following the settlement shows a weakness in the procedure employed.”  

The following condensed sample of fault complaints lodged by Mr Schorer and staff confirm the weakness in the procedure employed were still there during the Fast Track Arbitration Procedure.

Telstra’s fault records show:

  • 20/1/94: Telstra FOI folio P37898 (Golden Messenger) “Caller received RVA from Sth Yarra to 2860055.”
  • 20/1/94: Telstra FOI folio R37898 (Golden Messenger) “Not receiving ring on 2860055.”
  • 21/1/94 to 7/2/94: Telstra’s FOI folio R37897, R37896, and R37895 confirm six different fault complaints were lodged with Telstra, by Graham or a staff member, during this period.
  • 7/2/94: Telstra FOI folio R37894 (Golden Messenger) states: “No dial tone on 3292896, has been tested and appears to be open one side in the exchange. NDT – No Dial Tone.”
  • 22/3/94: Telstra FOI folio K00047 (GM Holdings) states, “the originating caller will not receive ring tone from the network untill [sic] the network receives a ‘call-confirmation’ or ‘call alert message’ from the PABX. If this tone/message is not received then the caller would receive either RVA or Busy tone.”
  • Telstra fault document dated 2nd May, 1994 – SVC03 states: “Mr Schorer rang to say all 68 lines are out; has to be Telecom. Exchange tested again and proved to be in the CPE.”
  • 19/4/94: Telstra FOI folio K00028 (Golden Messenger) author states: [redacted] requested me to ring both numbers which I did at 1530 and also received eng[aged] signal. NRR – Not Receiving Ring.”
  • 2/5/94: Telstra fault record SVC03 states: 30/04/94 18:18 Mr Schorer rang to say all 68 lines are out.”
  • 21/3/94 to 29/6/94: Telstra FOI documents folio R37884 to R37893, confirm Mr Schorer and/or his staff lodged a further 19 fault complaints between these dates. (GS 154-b)

The above dates and quotes are derived from Telstra’s own fault documentation and can be supplied on request.

Please compare the above CAN issues with the AUSTEL information directly shown below.

In the AUSTEL COT Cases Report (dated April 1994) AUSTEL states:-

“Prior to receiving Telecom’s response to the Bell Canada International report as outlined in paragraph 11.6 above, AUSTEL had written to Telecom informing it that the claim in the Bell Canada International report to the effect that Telecom’s customers received a grade of service that meets global standards goes too far because the study was an inter-exchange study and did not extend to the customer access network – AUSTEL had agreed to the study being so limited on the basis that other monitoring it had requested Telecom to undertake on AUSTEL’s behalf should provide AUSTEL with the data on the efficacy of the customer access network (CAN). (See page 243, point 11.8)

Comment:

Even as late as November 2007, Telstra had still not tested Golden Messenger’s CAN as they should have, according to the agreement between Telstra and AUSTEL that allowed BCI to limit their testing in regards to Golden Messengers’ business phone lines.

Graham originally agreed to the Service Verification Testing (SVT) on the condition Telstra provide “Call Line Identification” on all answered test calls: this process alleviated possible tampering with the test results.  Telstra, however, refused to comply with this request.

As shown in Chapter 1, under the heading Broken Promise, there were serious deficiencies in the SVT process at Alan Smith’s business; yet Telstra still used the corrupt test results to support their arbitration defence claims that the lines into Alan’s business were operating correctly.  In his CAV LGE information for 29th September, 1994, in relation to these SVTs, Alan Smith proves, using Telstra’s own Call Charge Analysis System (CCAS) data, the tests carried out on all three of his business lines were, beyond any doubt, fundamentally flawed.  The only conclusion can be that Telstra refused to carry out the SVT calls at Golden Messenger, with Call Line Identification operating for each test call, because they did not want to risk introducing a microscope into the process lest it reveal the same problems Telstra experienced when testing Alan’s business.

Please note:  on 27th July, 2007 Brian Hodge, B Tech, MBA (B.C. Telecommunications), assessed the November 1993 Bell Canada International (BCI) Addendum Cape Bridgewater tests and the 29th September 1994 SVT Cape Bridgewater tests, including the CCAS data report.  He concluded both the BCI and Verification Testing processes conducted at Cape Bridgewater were fundamentally flawed.  Mr Hodge held a number of senior positions during his 28 years as a Telstra employee, including assessing CCAS data.

LIVE VOICE MONITORING OF PHONE CALLS

1992 to 1994

From mid-1992 until January 1994, Peter Turner from the Australian Social Centre (ASC) in Hartwell, Victoria, acted as Alan’s agent for the over-40s singles-club weekends away due to the number of complaints registered by hopeful holiday weekenders regarding the difficulties of reaching Alan by phone, see document (AS – CAV 21).

During two separate periods from May to July 1993, two different ladies told Alan they left messages on Alan’s answering machine regarding their intended travel to Cape Bridgewater.  Both these women remarked on the female voice on the answering machine, while the voice on the camp’s answering machine was Alan’s.  One of these women particularly asked if Alan ever gave out client details or passed details of female clients to men clients?  He reassured her that this certainly would never happen, without seeking her permission first.  She said, since speaking to Alan, she had received strange and vaguely suggestive phone calls and the caller clearly knew she was single.  Alan suspected, from discussions with other clients who also mentioned leaving a message with a female, that Telstra was live monitoring some of his phone calls.

Documentary Proof of Voice Monitoring

Telstra documentation provided by Alan Smith, to the Australian Federal Police (AFP) confirms Telstra admitted to live-voice monitoring of Alan’s phone conversations.  The AFP were advised Telstra only listened to Alan’s telephone conversations from June to August 1993.  Questions raised on page 6 of the AFP transcript taken during Alan’s interview on 26th September, 1994 shows the AFP were amazed that:

  • Telstra was able to document the actual name of the company (the O’Meara bus line) Alan was discussing work with a tender during 1992, before June and August 1993 (AS – CAV 23-B).
  • Telstra FOI document A10148 also confirms COT telephone conversations were taped (AS – CAV 23-C).
  • Arbitration document, DMR & Lane’s report, further confirms that a Malicious Call Trace (MCT) was placed on both Alan’s 055 267 267 and 055 267 230 services, late in May 1993. The MCT equipment is a totally different monitoring device than the phone interception device (the EOS) that Telstra admitted to using to listen to Alan’s telephone conversations.  The MCT equipment was disconnected on 19th August, 1993 and September 1993 (AS – CAV 23-D).

The MCT equipment locks the line for 90 seconds after each successful call and therefore no other call can ring through until this lock-up is released.  Documents, submitted to arbitration, show at least 81 calls connected to Alan’s 267 267 line during this MCT period, but, with the equipment in place, this is impossible.  This evidence was also provided to AUSTEL on 19th December, 1995. Alan wonders if some of these calls were actually diverted (and connecting) to some other location and if so, did these calls reached a female voice?  Karen Gladman was no longer living at Cape Bridgewater by this time and her voice was removed from Alan’s answering machine over Christmas of 1992.  Whose voice were these callers hearing?  Could someone have taken a copy of Karen’s voice when it was on Alan’s answering machine and used it somewhere else?

Gordon Stokes, Telstra’s Portland technician, admitted in a witness statement, on 12th December, 1994 that he used EOS listening equipment to intercept Alan’s calls. (See Allen Bowles’ interception file)

27th January, 1994:  With no official guidance from Warwick Smith (the administrator to the FTSP), on how the COT cases should submit their claims to the assessor, Alan submits an interim-type testament of the problems and faults his business is experiencing.  Alan states:-

“I present these summaries for your viewing. This should give an insight into some of the difficulties experienced during my years when trying to run a telephone dependant business.”

Exhibit (AS 322-A) shows this letter, with attachments, was addressed to Warwick Smith (administrator), Dr Hughes (assessor), Peter Bartlett (special counsel to Warwick Smith) and John Rundell (FHCA).  Although this letter is addressed in more detail, below it is important to point out the following:-

Neither the administrator, assessor, nor the resource unit passed any of the claim material Alan provided, on 27th January, 1994 during the FTSP, into the Fast Track Arbitration Procedure. Furthermore, in Alan’s letter of claim, dated 15th June, 1994, Alan’s advisor, Garry Ellicott, reminded Dr Hughes of Alan’s interim claim supplied to him in his letter of 27th January, 1994. (AS 322-A).

As Warwick Smith, Peter Bartlett and Dr Hughes forced the COT four to abandon the already-signed FTSP and agree to the new Fast Track Arbitration Procedure, it was their responsibility to carry over my interim claim material from the previous settlement process to the arbitration procedure.  They did not do so. (AS 322-A).

28th January, 1994:  From mid-1993 until January 1994, Telstra Senior Management instructed Alan to document all his complaints directly to Denise McBurnie, of Freehill Hollingdale & Page, Telstra’s solicitors.  In one letter from Ms McBurnie, dated 28th January, 1994 and sent in response to Alan’s complaints regarding the ongoing telephone problems, she states:-

“As the information provided originally in your letter dated 12 November 1993 was of a limited nature, no specific response was possible to your allegations concerning over charging and short duration calls.”

In closing, she adds,

“As noted above in Telecom’s response to the questions raised in your paragraph 2, Telecom has not found any evidence of network faults applicable to and which could affect your service during the period to which you refer.” (AS 59)

The attached Telstra documents, see AS – CAV 35, 36, 37 and 38, show either Telstra misled Freehills regarding the 1800 national billing software problem, or Freehills misled Alan.  It is evident the information Freehills supplied Alan, via their client Telstra, does not match Telstra’s archival billing evidence.

Robin Davey prepared the AUSTEL draft FTSP document, dated 5th October, 1993 for Ian Campbell of Telstra.  At point 40 in this document, Mr Davey makes his concerns regarding Freehills having any involvement with the Fast Track Settlement Procedure clear.  He states:-

“If the attached letter dated 7th July 1993, from Freehill Hollingdale & Page to one of the COT cases solicitors is indicative of the way Freehill Hollingdale & Page have approached the COT cases in the past, I would be more than a little concerned if they were to have a continuing role.”

During the process of drafting the FTSP rules, and right up to the time Warwick Smith (TIO) became involved in the FTSP, AUSTEL was very concerned at the requirement for Alan and Graham to report their phone complaints to Ms McBurnie, before Telstra did anything about fixing the ongoing problems.  It seems that an important point has been lost here:  AUSTEL was a government-funded regulator and they made it clear Freehills should not be used in COT matters, yet this made no difference: Warwick Smith allowed Telstra to continue to use Freehills anyway.

Also, during the early negotiation FTSP period, Ms McBurnie wrote to Ian Row, Telstra’s Corporate Solicitor, on 10th September, 1993, (FOI document N00749) re COT cases Ann Garms, Maureen Gillan, Graham Schorer and Alan Smith.  She instructed him on how to hide documents under Legal Professional Privilege.  This certainly supports Robin Davey’s concerns about Freehills.  Remember, renowned legal professional privilege researcher Suzanne McNicol’s legal opinion, dated 30 June, 2000 on page 17 states that Freehills (4) knowingly made false or spurious claims to privilege. (AS-CAV 61)

As mentioned above, one of the conditions of the agreement was that Telstra would provide the COTs with any discovery documents needed to support our claims. Because there were no court guidelines regarding discovery documents within the FTSP, they were to be supplied under the Freedom of Information Act.  Both AUSTEL and the Commonwealth Ombudsman’s office agreed this was the only way the COT four could successfully present their claims.  Senate Hansard records of February 1994 show, however, Telstra at first refused to comply with this arrangement, unless the COTs paid fees amounting to thousands of dollars.  The government opposition and AUSTEL applied pressure to Telstra, on behalf of the COTs, and, finally, they agreed to provide the COTs with the documents they needed, free of charge.

30th January, 1994:  Telstra FOI document K01398 confirms that Telstra’s Tony Watson knew a RCM fault was the cause of the lock-up problem Alan complained of, but Telstra’s Bruce Pendlebury told him not to investigate this fault. (AS-CAV 58)

31st January, 1994:  A copy of Alan’s phone/fax account for 055 267230, when compared with these two Telstra CCAS documents, FOI number K01410 and K01411, confirm someone within Telstra handwrote the names of people Alan spoke to or faxed at this particular time.  Transcripts from Alan’s interview with the AFP, on 26th September, 1994 (AS-CAV 50-B), show the AFP were alarmed Telstra gathered private information about Alan including documenting the names of people Alan rang on a daily basis.  This CCAS data information was supplied to Warwick Smith and the Commonwealth Ombudsman’s office.

3rd February, 1994:  This Telstra facsimile header sheet from network operations to Bruce Pendlebury, subject Golden Messenger, states:-

“No known reason for double jumper. …”

“We can speculate – T’fers

          – old customer on tie pair some-time ago

          – pair change whatever”

“The important point is the other end was vacant.”

“THE JUMPER HAS BEEN REMOVED.” (GS-CAV 155)

Graham suspects the reason the double jumper “end was vacant” was because the open end had been connected to an interception listening device – a device that was removed during the AFP enquiry in Graham’s interception allegations.

Alan writes to the Minister for Communications, Minister Lee, stating:-

“To date these past days, I have registered a statutory declaration and sent it to both Telecom and Austel.  This was written in relation to my experience of getting an engaged signal from Golden Messenger courier services in-coming telephone service.  This service has 30 in-coming lines.  If this service had been fully engaged due to customer demand, Mr Schorer, spokesperson for C.O.T. would be dancing with joy.  However, this is not the case.  His customers are repeatedly complaining about his lines being engaged.” (GS-CAV 156)

This letter from Dr Hughes, to Mr Schorer, advises:

“I am enclosing my proposal as to the “fast-track” arbitration procedure.

This procedure has been devised in consultation with Messrs Minter Ellison Morris Fletcher, solicitors for the Telecommunications Industry Ombudsman. The proposed procedure is acceptable to the Ombudsman and members of the Resource Unit.”

“I would be grateful if you would let me have your comments on the proposal as soon as possible.” (GS-CAV 157)

Comment:

At this point, we have Telstra’s lawyers, Freehills (the company the Regulator advised Telstra should no longer be involved in COT matters), the TIO’s Solicitors and the Resource Unit, all devising the rules for and arbitration process after both Telstra and COT claimants signed a binding assessment review.

This letter from Graham Schorer to his legal advisor, William Hunt, refers to a letter Mr Hunt received from Dr Hughes regarding Frank Shelton’s Arbitration Agreement, supposedly revised from the initial commercial agreement.  Graham states he is:-

“personally rejecting the document in total, as this is not an arbitration procedure and I do not intend to be part of an arbitration procedure and I am also informed that the other C.O.T. Case Members do not intend and never agreed to be involved in an arbitration procedure. …”

“We were all advised by Austel that we were entering into an assessment process which was vastly different to an arbitration procedure.” (GS-CAV 158)

7th February, 1994:  Robin Davey, AUSTEL chair, writes to Ann Garms stating:-

“The thrust of the Fast Track Settlement Proposal was review and assessment. This may be seen by contrasting the words in the Fast Track Settlement Proposal with their emphasis on ‘a review’ and on ‘an assessor’” (GS-CAV 159)

8th February, 1994:  Warwick Smith writes to Graham Schorer stating:-

“Now that we have settled the appointments of assessor and resource unit…”

There is NO mention of the appointment of arbitrator in this two-page letter. (GS-CAV 160)

The Hon Michael Lee Minister for Communications writes to the Minister for Justice, the Hon Duncan Kerr:-

“I am writing to inform you that members of the group known as the Casualties of Telecom (COT) have contacted my Office regarding the Australian Federal Police inquiries into voice monitoring by Telstra of their telephones.”

“Both Mr Graham Schorer and Mr Alan Smith of CoT have informed my Office that they have information on Telstra’s activities in relation to these matters.” (AS 52-A)

Australian Federal Police are provided with the interception tapes

9th February, 1994:  Ms Jill Cardiff, Commonwealth Ombudsman’s Office, writes to Graham Schorer concerning his complaint that Telstra, AUSTEL and the TIO brokered a document-clearance arrangement regarding the release of documents to the COT cases.  In this letter, Ms Cardiff states:-

“The TIO recalls that he received a call from Mr Black to seek his views. The call was received at his home around mid-morning on 7 January. While the TIO gained the impression from the conversation that the call was being made during a meeting with Austel, he did not actually hear or speak to any other person during the call.”

“Of more significance, however, I have established that the meeting between Telecom and Austel did not take place until the afternoon of 7 January, which was some hours after the conversation between Mr Black and the TIO was conducted.” (GS-CAV 160)

What is established, from a letter from Steve Black to Warwick Smith, dated 11th July, 1994 (see below), is the TIO-appointed Resource Unit was given authority to filter arbitration documents, provided by Telstra (during the arbitration process), before passing material to the arbitrator and claimants.

10th February, 1994:  AUSTEL’s John MacMahon writes to Telstra’s Steve Black, stating:-

“Yesterday we were called upon by officers of the Australian Federal Police in relation to the taping of the telephone services of COT Cases.”

“Given the investigation now being conducted by that agency and the responsibilities imposed on AUSTEL by section 47 of the Telecommunications Act 1991, the nine tapes previously supplied by Telecom to AUSTEL were made available for the attention of the Commissioner of Police.” (GS-CAV 162)

15th February, 1994:  Dr Hughes’ letter to John Rundell, TIO-appointed Arbitration Project Manager from Ferrier Hodgson Corporate Advisory (FHCA), states:-

“I refer to our conference on 11 February and confirm I am agreeable in principle to the following amendments to the draft ‘Fast-Track’ Arbitration Procedure.” Please note: when reading this document the words “each of the Claimant’s claims” at clause 10.2.2, are still present in the agreement. (GS-CAV 163)

Comment:

  1. Graham Schorer and Alan Smith did not attend the conference on 11th The COT claimants, or their representatives, were not invited.
  2. In this letter, Dr Hughes is already agreeing to an amendment to the FTAP without even looking at the already agreed and signed FTSP.

17th February, 1994:  Robin Davey, AUSTEL Chair, writes to Telstra’s Steve Black, stating:-

“The thrust of the Fast Track Settlement Proposal was review and assessment. This may be seen by contrasting the words in the Fast Track Settlement Proposal with their emphasis on “…a review…”and on “…an assessor…”with the words in the Proposed Arbitration Procedure which was attached to the Fast Track Settlement Proposal.” (GS-CAV 164) 

Graham Schorer, Telstra, Peter Bartlett and Dr Hughes meet to discuss the settlement arbitration process.  Telstra’s transcript of this meeting confirms the COT claimants still wanted a commercial settlement process – not an arbitration procedure.  On page three of the transcript, Dr Hughes states arbitration would be more effective and that, as arbitrator, he could give appropriate directions for the production of documents” and he “would not make a determination on incomplete information”. (GS-CAV 165)

Comment:

In Alan Smith’s case, Dr Hughes DID make his determination on incomplete information when he handed down his award, even though Dr Hughes’ own Technical Consultants, DMR and Lane, asked for extra weeks to complete their findings – a request Dr Hughes denied.  Dr Hughes also did not access documents for Alan Smith, under the discovery process, despite being aware Telstra did not provide this information under FOI.  This is a complete about-face from the statement he made to the COT claimants in this meeting.

It was not until 1998, three years after the arbitrator deliberated on Alan’s case, that he received the FOI documents from Telstra that recorded this clandestine gathering. Telstra, their lawyers, Dr Hughes and the TIO’s office all attended this meeting, without ANY representative of the COTs present, therefore the meeting was unlawful. Graham and Alan had no opportunity to contribute to whatever discussions took place at this meeting and will never know how accurate (or otherwise) the minutes were. They will never even know if a second set of minutes exists somewhere.  The FTAP rules were changed to exclude the words “each of the Claimant’s claims” and clauses 25 and 26 were removed and alterations made to clause 24.  The secret changes to this legal document, the Arbitration Agreement, probably occurred at this clandestine meeting.  Dr Hughes attended this meeting, while COT claimants were in preliminary negotiations regarding the forthcoming arbitrations:  this is no different to a judge meeting in his chambers with the defence team, but, without the presence of the plaintiff in the matter, and planning how the judge will conduct the trial.

This meeting, when coupled with Telstra’s letters of 11th January and 11th July, 1994 to Warwick Smith, indicates the COT claimants had absolutely no chance of success, from the moment they were forced to abandon the FTSP.  It is of great concern that the TIO apparently agreed to COT-requested documents being first vetted by AUSTEL and the Resource Unit before they were passed onto the COT claimants (AS 62 and AS 63).  Fancy the defendants (Telstra) discussing what documents were relevant with the administrator of the process (the TIO)!

What is interesting to note from the author of these minutes is the statement:-

“Mr Smith stated that he would not endorse the rules as fair unless clause 10.2.2 repeated clause 2(f) of the Fast Track Settlement Proposal.”

See last paragraph {p1}.  Are the COTs to assume that because the words from the Arbitration Agreement at clause 10.2.2 each of the Claimant’s claims, which were derived from clause 2(f) of the Fast Track Settlement Proposal, Warwick Smith would not have endorsed our arbitration process had he been alerted to this removal?

In Graham Schorer’s case, Dr Hughes continued to arbitrate on his matters after 12th May, 1995, after he wrote to Warwick Smith and declared the Arbitration Agreement not credible.

Please note Robert McGregor of Freehills signed off these Minutes, on behalf of Telstra.

Telstra’s Steve Black writes to Dr Hughes, stating:-

“Telecom agrees with the general spirit of our proposal procedure, but disagrees with the specific clauses set out below.” (GS-CAV 166)

Dr Hughes and Warwick Smith seemed to forget this wasn’t Telstra’s proposal.  It was not Telstra’s kindness that brought COT claimants to the negotiation table: it was an unwritten agreement that the COT claimants would not push for a Senate inquiry into their allegations of Telstra’s misleading, unconscionable conduct, and the reasons why COT claimants were still experiencing phone problems after previous settlements and court actions.

During 1993, Telstra was forced to admit to the Senate that they had lost more than 1.2 billion dollars’ worth of cabling and conduit infrastructure that was supposedly somewhere ‘in the ground’ but which was suspected to have never been installed.  This was touted as part of the reason the COT claimants and others were still experiencing phone problems.  Even today, this missing 1.2 billion dollars’ worth of infrastructure is still unaccounted for, an expense that, in the 1980s, came out of the purses of Australian taxpayers.

Over the years, a number of sources have suggested the spiralling costs in the late-1990s occurred because the copper wire was simply not in the ground.  Even if the original copper wire was obsolete, the conduit could have been used to thread optic fibre cable through this already installed infrastructure, instead of Telstra having to dig new trenches.  All the additional costs came as a direct result of the ‘missing’ cabling/infrastructure not being put in place in the late-1980s.  Furthermore, Telstra admitted (see 17th December, 1993 above), that four per cent of all their customers complained of COT-like problems.  Perhaps all those problems were caused by ‘missing’ conduit infrastructure.

During late 1993 and early 1994, the COTs had the momentum to have many different issues investigated by the Senate.  If the claimants had continued down this road, instead of accepting the FTSP, the missing infrastructure would have been addressed in the public domain, along with solving the continuing phone problems experienced by the COT cases, instead of being addressed in camera.  All these issues would have created serious embarrassment for Telstra.

By 17th February, 1994 with the momentum for a Senate enquiry lost, and with the TIO, Warwick Smith, feeding secret, in-confidence coalition party-room information to Telstra (see 10th November, 1993 above), including advice that the proposed Senate investigation into COT matters appears unlikely, Telstra was enabled to manipulate the Australian justice system for their own benefit and to the detriment of the COT claimants.

FOI document folio D01248 confirms Telstra’s Ted Benjamin, also a TIO Council member, supplied Telstra’s hierarchy with in-confidence, TIO-COT-related information he acquired during a TIO council meeting.  Mr Benjamin was Telstra’s Arbitration Liaison Officer for most of the COT arbitration process.  It is now obvious the only chance the COT claimants ever had of getting a fair assessment of their losses or getting their phone problems fixed would have been via a Senate enquiry. (AS-CAV 48-C)

The COT claimants were only looking for a fair chance at an independent review of their past problems and an end to the continuing phone and fax problems they battled with every day, but since they took the wrong road – the FTSP and not a Senate enquiry – this did not occur.

At point 1.6 on page 2 in the AUSTEL COT Cases Report, AUSTEL states:-

“Until recently, Telecom’s approach to the COT Cases might reasonably have been perceived by the COT Cases as one of indifference. But, more recently, the COT’s persistence, AUSTEL intervention, Ministerial involvement, the threat of a Senate inquiry and adverse publicity has resulted in Telecom adopting a more positive, conciliatory approach.”

At point 1.18 on page 6 in the AUSTEL COT Cases Report, AUSTEL states:-

“When the initial settlements were reached with the original COT Cases, the standard of service then applicable was not objectively established and there is a reason to believe that difficult network faults may have continued to affect their services.”

Telstra FOI document folio 902905, thought to be dated around this period, states:-

“Experience with Crossbar common control equipment has shown that the operational life, before major upgrades are required, is closer to 20 years that 40 years due to :-

  • Increasing and higher traffic rates than expected.
  • Low maintenance effort.
  • Under dimensioning of some ranks of equipment. …”

“Also a number of relays have been found to have a short operational life due to factors such as:

  • Number of Operations per year.
  • Sequence of springsets and contacts.
  • Design problems causing contact erosion. …”

“The following conditions have been observed when an exchange reaches a relay wear crisis point:

  • Service to customer is degraded.
  • Current indicators do not highlight the problem area.
  • Existing resources, using normal maintenance practices cannot rectify all
    faults and problems.”
    (GS-CAV 167)

21st February, 1994:  Dr Hughes writes to Graham Schorer, attaching the agreed changes to the Arbitration Agreement.  This letter documents changes to the FTAP but makes no comment on the removal of the words of “each of the Claimant’s claims” from clause 10.2.2. (GS-CAV 168)

Please note Dr Hughes states on page 4, Clause 24, of this letter:-

“The Special Counsel and members of the Resource Unit seek an exclusion from liability for any act or omission, to the same extent as the arbitrator.”

23rd February, 1994:  This letter from Mr Black to Dr Hughes refers to Dr Hughes’ recommended amendments on 21st February 1994.  The letter also documents changes to the FTAP but also makes no comment on the removal of the words “each of the Claimant’s claims” from clause 10.2.2.  Graham and Alan were not advised that clause 10.2. 2 was altered.

Please note, Steve Black states, in this letter:-

“Telecom is of the view that Special Counsel and the Resource Unit should be accountable for any negligence on their part in relation to the arbitration process, given that these parties are acting in their capacity as experts. Therefore, this clause should not be amended so as to include an exclusion from liability for Special Counsel and the Resource Unit.” (GS-CAV 169)

Graham and Alan believed the Special Counsel, Ferrier Hodgson Corporate Advisory, and DMR Group Australia would be held accountable for any negligence on their part in relation to the arbitration process.

It is also confirmed, for the dates of 19th April, 1994 (see below), Dr Hughes’ office was still of the opinion that the Special Counsel, and the Resource Unit would not be excluded from liability.

24th February, 1994:  In this Telstra internal email, FOI folio A13980, Kevin Dwyer responds to Peter Gamble’s statement of:-

“Ericssons are said to have suggested that call loss could be up to 15%.”

Mr Dwyer states:-

“You are quite correct in your thought that the anecdotal reference applies more to AXE than ARE-11. ‘Lockup’s are generally well-known as a problem in AXE exchanges, not only in Australia but in overseas countries as well.
(GS-CAV 170)

The reference, in this document, regarding the known lock-up problems with the AXE exchange is most important, as both Graham and Alan’s businesses were routed through an Ericsson AXE.  As shown below, during the COT arbitrations, Ericsson (Australia) purchased Lane Telecommunications, the TIO-appointed Technical Arbitration Resource Unit.

25th February, 1994:  Frank Shelton, Minter Ellison Morris Fletcher, writes to Dr Hughes, enclosing two separate variations to the proposed Fast Track Arbitration Procedure.  The two individual versions of the FTAP referred to in Mr Shelton’s letter (171) is attached to the Graham Schorer (CAV Relevant Information File).

The Communications Minister’s Office writes to Telstra’s Jim Holmes:-

“Attached are copies of correspondence received by the Hon Michael Lee MP from Mr Alan Smith of Cape Bridgewater Holiday Camp, Victoria, outlining further difficulties he is having with his telephone and facsimile service.”

“I ask that you investigate Mr Smith’s allegations and take all appropriate steps to resolve his problems.” (AS-CAV 54-A)

Why didn’t Telstra’s Corporate Secretary, Jim Holmes, (who was also a TIO Board member), alert Minister Lee that Telstra had advised AUSTEL, on 26th August, 1993 of the existence of unidentified faults affecting Mr Smith’s service? (AS-CAV 48-G)

This Government internal minute to the Communications Minister, regarding complaints by Alan Smith, says:-

“The Australian Federal Police has been asked to investigate possible breaches of the Telecommunications (Interception) Act 1979 and it would be inappropriate for you to make any further comments of details of the allegations while the matter is before the Federal Police.”

“A draft letter to Mr Smith has been cleared by Legal and General Branch of the Department. …”

“We have provided both Telecom and AUSTEL with copies of Mr Smith’s letters requesting that they investigate his allegations…” (AS-CAV 54-B)

In March 1994, during this negotiation period, a number of documents faxed from Peter Bartlett at Minter Ellison (the TIO’s legal counsel) did not arrive at Alan’s office.  Page 33 of Alan’s claim document, CBHC (Cape Bridgewater Holiday Camp) Part 1, shows he advised the arbitrator of at least three businesses who complained of not receiving faxes from Alan during the FTSP negotiation period. CBHC Part 1 was an 80-page, bound document Alan submitted to the FTSP, but Ferrier Hodgson Corporate Advisory (FHCA) did not pass it on to DMR and Lanes for their assessment. (AS-CAV 66)

3rd March, 1994:  Steve Black emails David Krasnostein, and copies to Telstra’s CEO Frank Blount, stating:-

“As discussed it appears that Gordon Hughes and Peter Bartlett are ignoring out joint and consistent message to them to rule that our preferred rules of arbitration are fair and stop trying to devise a set of rules which meet all the COTs requirements. …”

“My course therefore is to force Gordon Hughes to rule on our preferred rules of arbitration.” (GS-CAV 172)

Comment:

Clearly, at this stage, Dr Hughes and Peter Bartlett were not happy with the FTAP rules: so, what made them later change their minds and agree that the Telstra-designed FTAP was a fair process?  What pressure was applied to Dr Hughes to force him to rule on Telstra’s preferred Rules of Arbitration?  What made Dr Hughes agree to Frank Shelton’s revised FTAP?

3rd March, 1994:  Confirmation from AUSTEL to Steve Black, that the Regulator was adamant that:-

“if the Fast Track Settlement Proposal is to be effective then the COT members must be given access to the documentation in Telecom’s possession necessary for them to prepare their cases”. (GS-CAV 173)

AUSTEL’s COT INVESTIGATION

On 21st November 2007, Alan Smith received from the ACMA, under FOI, a copy of AUSTEL’s original draft findings regarding the telephone problems experienced by the Cape Bridgewater Holiday Camp during 1988 to 1994.  Copied below are some of the page numbers and points in the report.  If AUSTEL (the Government Regulator) could not gain access to documents from a fully owned Government Corporation, such as Telstra was during this official, Government-funded investigation, then what hope did the COT claimants ever have?  Did AUSTEL have a regulatory obligation, as the facilitators of the FTAP, to abandon the signing of the agreement until Graham and Alan received the documentation they were promised they would receive if they signed the FTAP?  The following list identifies some areas where AUSTEL had problems accessing Telstra records on Alan’s service:

  • Point 43 on page 20 notes:-

“As no fault report records remain in existence from Cape Bridgewater residents prior to this period, or these records have not been provided to AUSTEL, it is difficult to gauge the level of problems in the area which should have been to [sic] known to Telecom based on their own routing reporting data.”

  • Point 48 on page 22 notes:-

“AUSTEL has been hampered in assessing Telecom’s dealings with Mr Smith by Telecom’s failure to provide files relating to Mr Smith’s complaints.”

  • Point 71 on pages 28 and 29 notes:-

“AUSTEL has not been provided with the documents on which the conclusions in this briefing summary were reached, such as fault reports from other Cape Bridgewater subscribers over this period or the details of the final selector fault. It would have been expected that these documents would have been retained on file as background to the summary. It can only be assumed that they are contained within the documentation not provided to AUSTEL.”

  • Point 140 on page 49 notes:-

“It should be noted that AUSTEL’s investigation of matters relating to the RCM problem has been hampered by Telecom’s failure to make available to AUSTEL a file specifically relating to the Pairs Gains Support investigation of the RCM. The file was requested by AUSTEL on 9 February 1994.”

  • Point 160 on page 55 notes:-

“It should be noted that it is hoped that a number of issues in regard to the Cape Bridgewater RCM will be clarified when Telecom provides the documentation requested by AUSTEL.”

  • Point 5.46 on page 95 in the final AUSTEL COT Cases Report notes:-

“Where, as part of its direction, AUSTEL sought to obtain detailed information on each of the exchanges involved in terms of performance standards, actual performance, maintenance requirements and achievements, Telecom initially responded with advice in terms of a few generalisations. Very specific requests were necessary to obtain data which a co-operative approach may well have been expected to deliver. Indeed, throughout this inquiry it has been apparent that Telecom has chosen to interpret AUSTEL’s request for information in the narrowest possible terms. The net effect of this was to minimise the amount of relevant data it put before AUSTEL and lengthen the process necessary to extract it.”

3rd March 1994:  Telstra was now ignoring the signed FTSP.

This Telstra internal email FOI D01166, states:-

“As discussed it appears that Gordon Hughes and Peter Bartlett are ignoring our joint and consistent message to them to rule that our preferred rules of arbitration are fair.…”

“My course therefore is to force Gordon Hughes torule our preferred rules of arbitration.” (AS-CAV 55)

BCI tests

Prior to the COT four signing the FTSP, Telstra called in Bell Canada International Inc. (BCI) to study a number of the service lines and exchanges that were allegedly causing the problems the COT’s businesses experienced.  After the completion of the BCI tests, AUSTEL and the COT cases argued the actual faults and problems they complained of were not highlighted correctly in the testing process.  The problem was that, if BCI found a fault while they were testing they halted the test at once and fixed the problem before they re-tested.  Therefore, even though they found faults along the way, their final report specified that the Telstra network had a clean bill of health and there was NO RECORD OF THE FAULTS THEY FIXED DURING THE TESTING PROCESS.

The COT members asked how, in the name of justice, could they use this report in support of their claims, when it showed the Telstra network operating up to network standard when, for up to eight years BEFORE the BCI tests, they had been forced to operate their businesses with phone systems suffering from major faults?  Even though Telstra knew of the COT protests in relation to the BCI report, it was still used to support Telstra’s defence of a number of the COT cases.

10th March, 1994:  A Federal Government handwritten memo by Julie Martinsen, titled Commercial-in-Confidence and Size of the complaints problems, states:-

“I raised the telephone business survey with Rob Davey referred to in Hansard (Senate Estimates Committee 25/3/94) with John MacMahon (AUSTEL)

  • it was apparently run by (T) at AUSTEL’s request in an attempt to see how widespread the problems are
  • (T) provided the results to AUSTEL as ‘Commercial-in Confidence’
  • They will be covered in AUSTEL’s report.
  • 10% of those surveyed said they had experienced the same sorts of problems (as the Cot people)
  • 4% (I’m not sure if this is the total or of the 10% said they had been affected seriously or very seriously.”

“This is the basis for AUSTEL’s view that the size of the problem is significantly greater that (T)’s claim of 50.” (GS-CAV 174)

23rd March, 1994:  The Hon Minister Lee MP writes to Alan:-

“Thank you for your letters of 3 February 1994, concerning problems with your telephone and facsimile service. …”

“I have also arranged for your letters to be sent to senior management in Telecom with a request that they fully investigate your allegations. …”

“It would be inappropriate for me to comment on any allegations of improper monitoring while the matter is under investigation by the Federal Police.”
(AS-CAV 63-A)

25th March, 1994:  The Commonwealth Ombudsman, Ms Philippa Smith writes to Telstra’s CEO Frank Blount, concerning the complaints raised by Graham Schorer and Alan Smith. Ms Smith advises Mr Blount of her concerns that Telstra had stated to John Wynack, Director of Investigations:-

“that they were concerned at the publicity and significant diversion of Telecom resources caused by the recent release of certain information by Mr Smith and that the delay in release of documents was due to the need for Telecom to check all documents prior to release so that Telecom is alert to the possible use/misuse of sensitive information.”

Ms Smith later says:-

“It is unreasonable for Telecom to require the participants to make further assurances while Telecom was considering the Agreement and thereby denying the participants the opportunity to consider the rules that Telecom wished to have included in the Agreement.” (AS-CAV 64)  

The Commonwealth Ombudsman’s Office can confirm the first (limited) bundle of FOI documents Alan received, in February 1994, were heavily censored, many with large sections blacked out and others supplied without a covering schedule, making it incredibly difficult for lay people to understand the significance of the information. Again, it appears this information was censored in agreement between AUSTEL, the TIO and Telstra in an attempt to minimise Telstra’s liability.

On 5th January, 1995 Ms Philippa Smith, conducted an official investigation into Mr Schorer’s complaint that Telstra acted unreasonably regarding his November 1993 FOI applications (see below).

January/March 1994 – still no relevant FOI documents to support Cot claims

According to Graham and Alan’s memory of the FOI situation between January and March 1994, the TIO advised them the only way for them to proceed was to sign for arbitration.  Why didn’t the TIO show the same concerns as Ms Philippa Smith (AS-CAV 64) and condemn Telstra for threatening four small businesses that if they didn’t sign the new preferred Rules of Arbitration, then Telstra would not supply the documents they needed to support their claims?

Was the TIO siding with Telstra from the outset?  Was the TIO mischievously involved in allowing Telstra to withhold COT-requested FOI documents until the COT cases signed for the FTAP?  How many documents were destroyed (or simply not provided to the COTs) under this clandestine operation?  Of all the breaches of law, so far uncovered during the COT arbitrations, this is probably the worst one, alongside the altering of the clause in the agreement.  It is alarming that the defendants, the administrator, the administrator’s Resource Unit and the Telecommunications Regulator all appear to be party to this secret agreement of vetting what documents the claimants receive and what should be withheld from them AND the arbitrator!

No one was prepared to listen to Graham and Alan’s argument that they had already signed a Commercial Assessment Agreement on 22nd November, 1993 (AS-CAV 51).  At first Graham and Alan flatly refused to be a party to Telstra’s preferred Rules of Arbitration, as it was evident Telstra was attempting to force the COT four down the legal track so that their cases would not be commercially assessed.

Other details of these meeting minutes show Dr Hughes

“stated that he was aware of a dispute between the parties but did not have any idea as to the nature, and indicated that, from this point in time, there were two ways to proceed in relation to the problem of outstanding documents.

  1. the procedure is put on hold until all the documents are exchanged in accordance with the FOI procedure; or
  2. the arbitration procedure commences and then the arbitrator gives appropriate productions of documents.”

Point 2 was Alan’s main reason for finally agreeing to sign for arbitration, because Telstra had only provided him with a very limited quantity of documents.  But, as can be seen from the arbitration process itself, Dr Hughes went back on his commitment to access documents from Telstra.

7th April, 1994:  This Telstra Internal FOI Schedule Review Decision: Schorer confirm Telstra withheld two technical documents both dated 7.4.94 under Legal Professional Privilege, i.e:-

  1. Internal Fax to St Albans Exchange Management Group from Telecom Australia Solicitor.
  2. Fax Transmission duplicating test of Internal Fax of 7.4.94 to St Albans Exchange Management Group from Telecom Australia Solicitor records substance of D03767. (GS-CAV 177)

Telstra’s Steve Black writes to David Krasnostein, saying:-

“I have told Mr Bartlett that the only basis on which Telecom would attend a meeting is to formally sign the rules – no further discussion or negotiation to be entered into.”

This suggests Bartlett expressed a view that the FTAP rules were not fair. (GS-CAV 178)

Did both Peter Bartlett and Dr Hughes know that clause 10.2.2 was altered to favour Telstra’s defence?

In an internal memo R11908 Steve Black states:-

“Peter Bartlett tells me that Graham Schorer is putting pressure on Gordon Hughes to read the AUSTEL Report and see if it contains anything which would necessitate a change in the Arbitration Rules. I told Mr Bartlett to tell Dr Hughes that Telecom would seriously object to such a course of action.” (AS-CAV 68)

It appears Mr Black was concerned at Graham pushing Dr Hughes to read the AUSTEL Report, because the report states the first four COTs’ matters were to be heard under a review/settlement process and only the remaining COT claimants were to have their matters heard in a yet to be devised special TIO Arbitration Agreement. . If Dr Hughes had read the AUSTEL Report, he would have known the four COT’s were never intended to go into arbitration.

8th April, 1994:  The fax header accompanying the following letter was from Simon Chalmers, seconded from Freehill Hollingdale & Page by Telstra, on 12th November, 1993.  This fax header sheet confirms he faxed the two following letters to both Russell Berry and Denise McBurnie of Freehills.  This and the letter following, dated 9th April, 1994 suggest AUSTEL, the Australian Communications Regulator, was far from truly independent but rather could be convinced to alter their official findings, as Steve Black has requested in many of the points in this first letter. For example, at point 4 (on page 3), Mr Black writes:-

“The Report, when commenting on the number of customers with Cot-type problems, refers to a research study undertaken by Telecom at Austel’s request. The Report extrapolates from those results and infers that the number of customers so affected could be as high as 120,000.”

At point 2.68 in the AUSTEL Cot report, the 120 thousand COT-type complaints was changed to read 50 or more, therefore the official AUSTEL COT report, provided to the minister, says 50 or more. (GS-CAV 179)

9th April, 1994:  In this letter Mr Black states:-

“In relation to point 4, you have agreed to withdraw the reference in the Report to the potential existence of 120,000 COT-type customers and replace it with a reference to the potential existence of ‘some hundreds’ of COT-type customers.”

As noted immediately above, the official report refers to 50 or more COT-type faults, confirming that Mr Davey was further pressured to change his real findings. (GS-CAV 180-A)

Telstra FOI folio 101115 to 101117 states:-

“A total of 8% of all businesses stated they had experienced problems themselves; 5% had, by inference from comments made by callers assumed they had problems; and 8% claimed they had both experienced problems themselves and also received comments from callers regarding difficulties in getting through to the business.

73% of customers who felt the problems associated with incoming calls has seriously affected their business had reported the problems to Telecom with varying degrees of success regarding resolution.(GS-CAV 180-C )

On 6th December, 1993 (see above), Telstra’s Ted Benjamin warned Telstra’s Group Managing Director, Harvey Parker, that 4 per cent of the 2,644 commercial business customers surveyed by TELCATS (on behalf of Telstra) reported experiencing significant phone problems that affected their businesses.

Four per cent of 2,644 means 106 businesses experienced COT-type problems – a significant number.  Four per cent of all Telstra’s commercial business customers, nationwide, would be well over 120,000 – the number that AUSTEL’s chair, Robin Davey, wanted to include in the AUSTEL COT report, rather than the 50 or more customers Telstra insisted on.  Robin Davey’s original calculations were correct.

IMPORTANT

Graham and Alan’s Technical Advisor, Mr George Close, was forced to use the AUSTEL COT report findings during Graham and Alan’s arbitrations because Telstra was not supplying the documents they had requested under FOI.  Therefore, Mr Close’s technical findings were based on flawed information and were therefore incorrect.  Letters dated 16th and 25th August, 1994 (see below) confirm that, on behalf of Alan and Graham, Mr Close asked the arbitrator, under the Arbitration Agreement discovery process, to seek from Telstra all the relevant BCI information Telstra used to arrive at their findings.  Even though Dr Hughes accepted the BCI report into evidence (see 2nd May, 1994 below), he did not ask Telstra for any BCI discovery documents on behalf of Alan or Graham.

13th April, 1994:  AUSTEL Chair Robin Davey advises the Hon Michael Lee, Minister for Communications:-

“AUSTEL had agreed to the study being so limited on the basis that other monitoring it had requested Telecom to undertake on AUSTEL’s behalf should provide AUSTEL with the data on the efficacy of the customer access network.” (AS-CAV 57)

Please note:  prior to Graham Schorer and Alan signing the FTSP, they alerted AUSTEL that they were still experiencing phone and fax problems.  Alan was adamant the RVA message faults, which wrongly advised customers calling his 008/1800 number that the line was disconnected, was crippling the singles club side of his business.  Alan’s arbitration reply to Telstra’s interrogatories see (CAV Relevant Information File P-4, Exhibit 10) confirms he received 80-plus letters, from clients and tradespersons, all documenting their experiences when trying to contact him.  The RVA billing problem was threefold: First Alan lost the incoming call.  Second, he was charged for the non-connected call.  Third, Telstra allowed Alan to continue to promote his business using the 008/1800 service (wasted advertisement costs) while aware the RVA post-dialling problems would not bring Mr Smith any business.

14th April, 1994:  Ann Garms writes two letters to Warwick Smith, one handwritten, the other typed.  It is clear from both letters that Ms Garms, Alan Smith and Mr Schorer, did not want to abandon the FTSP and enter into an arbitration process. (GS-CAV 181 and 182).

AUSTEL’s General Manager for Consumer Affairs, John MacMahon writes to Ann Garms stating:-

“This letter is to confirm that the Fast Track Settlement Proposal drafted by AUSTEL and signed by Telecom on 18 November 1993 and by you 23 March 1993, refers to an assessment” process and an “assessor” and makes no reference to “arbitration” or to an “arbitrator”. (GS-CAV 183)

Ann Garms also writes to Warwick Smith, with the three signatures of Graham Schorer, Alan Smith and herself. She states:-

“We are all in agreement that we wish to be assessed by Dr Gordon Hughes under the Fast Track Settlement Proposal authorised by AUSTEL and signed by Mr Jim Holmes, Corporate Secretary of Telecom on 18 November 1993, and by COT members on 23 November 1993.”

“We acknowledge the confirmation by AUSTEL on 14 April 1994, that the Fast Track Settlement Proposal confirms the assessment process for COT members. (Copy enclosed.) (GS-CAV 184)

Warwick Smith responds to Ann Garms:-

“I am not sure where Alan Smith or Graham Schorer are with regard to proceeding. They have been in regular contact with Peter Bartlett, but I still hope the matter can proceed and am of the view the Procedure endorses the ‘Fast Track’ Agreement and is important for the arbitrator in his role.”
(GS 184)

It is quite clear from Warwick Smith’s comments in this letter that he dismissed Mr Schorer and Alan Smith’s signatures in the letter he is now responding to.

15th April, 1994:  Warwick Smith writes to Mr Schorer, stating:-

“I met with Mr Bartlett last evening. He will arrange a meeting with Dr Hughes on his return to seek his position on what I understand to be the desire of ‘COTS’ on the Procedure and ‘Fast Track Settlement’.” (GS-CAV 185)

19th April 1994:  This is a three-page brief to Mr A H Goldberg, Q.C., from William Hunt, on behalf of Graham Schorer. According to a hand-written note in the top right-hand corner, Mr Goldberg’s office was contacted by Hunt Solicitors at 2.43 pm.
(GS-CAV 186)

It is clear from the fax imprint on these two documents from Dr Hughes’ secretary, Caroline Friend, to Mr Goldberg and William Hunt, that they were faxed between 1:20 and 2:00 pm on 19th April, 1994.  Each fax included an unsigned copy of the Arbitration Agreement (Graham Schorer Exhibit 2 – CAV Relevant Information file, GS-CAV 186-A and GS-CAV 186-B).  Ms Friend sent the faxes from her office after Graham Schorer asked his solicitor, William Hunt, for advice in relation to signing the Arbitration Agreement that was drawn up by Frank Shelton of Minter Ellison.  Mr Hunt contacted Dr Hughes’ office and asked Ms Friend to send one copy to Mr Goldberg and one to Mr Hunt, for assessment.  On 21st April, however, before Graham received any information from Mr Goldberg or Mr Hunt, Graham and Alan met Peter Bartlett (the TIO’s Legal Counsel) in the Minter Ellison offices.  Mr Bartlett informed them the TIO would withdraw from administering the already-signed Fast Track Settlement Proposal if Graham and Alan did not sign the Arbitration Agreement by close of business that day.  Had Peter Bartlett provided Graham and Alan with a copy of the altered agreement earlier in the day, and allowed them to take it away for discussion, a comparison between the altered version and the version faxed to Mr Goldberg and Mr Hunt would have uncovered the secret alterations to the agreement Graham and Alan were being pressured to sign.  This was not the agreement that Caroline Friend faxed to Mr Goldberg and Mr Hunt 36 hours earlier.

Continued on: Consumer Affairs Victoria Part-2

Please note: the following exhibits (which we might have missed into the text of the chronology of events above) can be accessed by placing the cursor over the relevant number range in order to access that exhibit.

AS – CAV 1 to 47 – AS-CAV 48-A to 91 – AS-CAV 92 to 127 – AS-CAV 128 to 180 – AS-CAV 181 to 233 – AS-CAV 234 to 281 – AS-CAV 282 to 323 – AS-CAV 324-A to 420 AS-CAV 421 to 469 – AS-CAV 470 to 486 –AS-CAV 495 to 541 –AS-CAV 542 to 588 – AS-CAV 589 to 647 – AS-CAV 648 to 700 –  AS-CAV 765-A to 789 – AS-CAV 790 to 818 – AS-CAV 819 to 843 – AS-CAV-923 to 946  – GS-CAV 1 to 88GS-CAV 89 to 154-A – GS-CAV 155 to 215 – GS-CAV 216 to 257  – GS-CAV 258 to 323 – GS-CAV 410-A to 447 – GS-CAV 448 to 458 – GS-CAV 459 to 489 – GS-CAV 490 to 521 – GS-CAV 522 to 580 – GS-CAV 581 to 609