Chapter Four Distorted and unlawful.
In 1994, Dr. Gordon Hughes, a distinguished figure who previously held the position of President of the Law Council, was appointed by the government to arbitrate the initial four cases under the Council of Truth (COT). His esteemed standing within the legal community fostered the perception that he exemplified unwavering dedication to integrity and impartiality in his professional engagements. However, a letter of understanding prepared by Graham Schorer on November 21, 2012, documented as file 567 GS-CAV 522 to 580, elucidates that Mr. Schorer, who was formerly a client of Dr. Hughes, received assistance from him in a prior Federal Court action against Telstra that occurred between 1990 and 1993. The correspondence elaborates on this relationship as follows:
“During the period that I retained Landers & Rogers, at no stage was I informed by Gordon Hughes or any other member of Landers & Rogers staff, that Telecom or the Australian Government Solicitor contacted them with information regarding the North Melbourne exchange.
“Furthermore, had I known that Gordon Hughes had concealed knowledge of such an important document from me, I would not have accepted his appointment as the arbitrator in my arbitration process” (refer to file 567 GS-CAV 522 to 580).
The North Melbourne exchange mentioned refers to the North Melbourne Telstra telephone exchange through which Mr Schorer's Golden Messenger courier business was serviced. The attached letter appears to substantiate Landers & Rogers' alleged involvement with the Australian Government Solicitors.
Graham Schorer claims that the Australian Government Solicitor had previously identified and documented how Telstra had misled and deceived him over several years. However, it is evident that once Graham signed his arbitration agreement on April 21, 1994, the previously settled Flexitel claim was reopened in Telstra's defence documents. In simple terms, when Dr Gordon Hughes received an Interim Claim from Mr Schorer that included Flexitel issues—which had already been part of the prior Federal Court action handled by Dr Hughes—he was re-evaluating these claims again.
As a result, the entire arbitration process became chaotic, and Dr. Hughes ruled against Telstra during the three years of Mr. Schorer's arbitration. This raises the question: could this be why Telstra allowed the Flexitel issue to be reopened after the arbitration agreement was signed? Both Telstra and Graham were not supposed to raise these Flexitel issues during Telstra's 1994/1996 arbitration defence, as doing so would compromise Dr Hughes's position as an independent arbitrator.
Pages 27 to 29 in our GS June 2013 report discuss a 2 November 1990 fax from Trevor Hill of Telstra’s Corporate Solicitors Office to Telstra’s Peter Gamble regarding Telecom v Golden Messenger Federal Court Legal Proceedings, notes, among other items:
(5) The Australian Government Solicitor, on behalf of Telecom, has written to the solicitors acting for Golden Messenger seeking their undertaking not to disclose to their client or others the contents of the report on the North Melb Exchange. To date, there has been no response. (Exhibit GS 448-A file 448 to 456):
Directly below this entry, the report then discusses an internal Telstra minute dated 7 November 1990 that Telstra’s Peter Gamble, Manager, Business Network Planning, sent to Mr F Jones, Executive General Manager, Telecom Business Services (FOI Folio 001801), noting that:
“it would appear that any concerns over the disclosure of the adverse report on the North Melbourne Exchange can now be set to rest as it will not be released until point (5) has been complied with”. Exhibit GS 43 file GS-CAV 1 to 88
These two documents, together with Mr Schorer's letter of understanding, show that, regardless of whether Graham’s solicitors, Landers & Rogers, received a copy of the North Melbourne Telephone Exchange report during Graham Schorer's early Federal Court action, Mr Schorer is adamant that he did NOT see a copy of the letter from the Australian Government Solicitor (AGS) that is referred to in these faxes.
Reading Chapter 3 - Conflict of Interest allows the reader to decide whether Dr Gordon Hughes had previously displayed a clear bias in favour of Telstra Mr Schorer's Federal Court proceeding. In that case, his legal firm had withheld crucial court documents from their client, Graham Schorer, who was serving as the spokesperson for the COT in the current arbitration proceedings. It is particularly disconcerting that Dr. Hughes was to act as the arbitrator in these matters while simultaneously accessing the documents he had formerly concealed from Mr. Schorer. Refer to Chapter 3 - Conflict of Interest. The government did not disclose this significant historical context to the other COT claimants. Had we been aware of this troubling circumstance, none of the claimants would likely have agreed to the arbitration agreements presented to us.
At the outset, we regarded Dr. Hughes as a model of professionalism and integrity. Additionally, we were informed that he possessed a graded status as an arbitrator, which was indicative of his capability to maintain objectivity and fairness in his assessments. However, it was later revealed that he did not secure this graded status until well after the conclusion of my arbitration, raising concerns about the validity of his role during the arbitration process.
During this period, Warwick Smith was serving as the Telecommunications Industry Ombudsman and was charged with the critical responsibility of overseeing the COT arbitrations—processes that were essential for resolving a myriad of disputes arising within the telecommunications sector. However, a disturbing development occurred when Mr. Smith authorized significant amendments to the COT Cases Arbitration Agreement after it had already undergone rigorous legal scrutiny and received approval from two reputable legal professionals, William Hunt and Alan Goldberg. Furthermore, these amendments were made despite prior endorsement by Senators Richard Alston and Ron Boswell, both of whom possessed extensive political and legal expertise. The amendments introduced and removed key clauses pertaining to confidentiality, significantly altering the provisions that had initially been included in the original agreement reviewed by our legal counsel and the senators. The consequences of these changes were profound and detrimental; they effectively barred claimants such as Ann Garms, Graham Schorer, and myself from pursuing legal recourse against the arbitration accountants and technical consultants for potential misconduct and negligence that may have transpired during the management of our respective arbitration cases. Alarmingly, these amendments were made only after our attorneys had already provided their approval, thus raising serious questions regarding the integrity and transparency of the entire arbitration process.
Furthermore, the coercive pressure we faced as COT claimants to sign the arbitration contract without receiving the essential documents that had been promised to us added considerable complexity to the situation. This raises significant concerns about the validity of the confidentiality agreement, especially considering that additional clauses were incorporated without the explicit consent or review of our legal counsel. Moreover, the disregard for these changes by Senators Alston and Boswell, both of whom are proficient in legal matters, underscores the troubling nature of the proceedings. Even in light of the numerous significant issues elaborated upon above, which are further detailed in "Chapter 5 Fraudulent Conduct," both Warwick Smith and Dr. Hughes continue to wield the confidentiality agreement as a mechanism to obstruct any investigations into their allegedly corrupt practices throughout the COT arbitrations.
In light of these ongoing challenges, we remain resolute in our commitment to meticulously document the narrative surrounding the COT arbitrations. This endeavor not only reflects our determination to uncover the truth behind these proceedings, but also seeks to foster a deeper understanding of the events that unfolded, thus advocating for justice and working to restore the integrity of the arbitration process. By sharing our detailed experiences, we aspire to illuminate the injustices faced by others in similar circumstances, thereby contributing to the establishment of a more transparent, equitable, and accountable system for all stakeholders involved in the arbitration process.
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