Christian Brothers' abuse claims saga: from bankruptcy threat to settlement reversal

Early last month, Peter had some welcome news.

The Christian Brothers had agreed to settle. The Catholic order was going to compensate him for his horrific abuse at the hands of a teacher at the Christian Brothers College in St Kilda in the 1980s.

It was a profound moment. At last, Peter was to have some semblance of justice for a childhood marked by deep trauma.

Two weeks later, it turned to dust.

On 22 June, the Christian Brothers issued a stunning public statement that sent shockwaves through the victim-survivor community. The Catholic order said it was about to go broke and could no longer afford to meet the claims of abuse survivors.

Instead, it would sell its remaining 36 properties for about $216m, divide what it could between survivors and other creditors, then disappear.

Survivors would be left considerably shortchanged, including those who, like Peter, had already settled.

The total liability for current and future claims was estimated at $771m. Survivors were likely to receive cents in the dollar from the property sale.

“I feel betrayed and traumatised all over again,” Peter told me, via his lawyers. “The Christian Brothers promised to compensate me. Now they’ve bailed on the agreement and I’m left in limbo.”

I have covered the Christian Brothers for many years. The order has an appalling history of sexual abuse, one of the worst of any arm of the Catholic church.

A staggering 22% of its brothers in Australia were alleged perpetrators – the second highest rate of any Catholic order. Like many religious institutions, the Christian Brothers circulated known paedophile clergy through its vast network of schools and orphanages, allowing offending to continue.

Data from the Australian royal commission into institutional responses to child sexual abuse shows 1,015 people made child abuse claims against the Christian Brothers between 1980 and 2015, the highest of any Catholic order. The claims named 483 alleged perpetrators across 100 Christian Brothers schools.

Last month’s announcement wreaked carnage everywhere I looked.

I spoke to survivors who said it had led them to contemplate suicide. One survivor who had settled with the Christian Brothers and was awaiting his compensation had taken out a loan, believing he was financially secure, only to have the rug pulled out from beneath him. He faced financial ruin.

Others who were days or weeks away from trial found their hearings suddenly abandoned. One likened it to being stabbed with a “sharp, long, bladed knife to the back”.

Another told me simply: “It’s not human … It’s just not human.”

Survivors all asked the same question: how can an arm of the Catholic church, with its unimaginable wealth, cry poor?

The answer lay in its property dealings. I began to dig into church land records, as did reporters at the Australian Financial Review.

They told an extraordinary tale. Over the past decade, the Christian Brothers had been transferring hundreds of millions of dollars worth of homes, land and school buildings to a related entity, known as Edmund Rice Education Australia, for $1 each.

Those properties were considered off-limits to survivors.

EREA said it would not sell the properties to help pay abuse survivors. It also refused to volunteer itself as a defendant to replace the Christian Brothers in court claims.

“They set up a new organisation, gave it their fortune, and now they’re saying they are too poor honour their promises,” Peter said. “I already did not trust the Christian Brothers for obvious reasons but they keep finding new ways to disgrace themselves.”

The story did not end there.

Trawling through hundreds of pages of court documents, I discovered something equally shocking.

The Christian Brothers had made a deliberate decision to keep nine convicted child abusers within the order, saying it had a “Gospel imperative” to “care for all Brothers” and “the needy”.

Those convicted brothers almost certainly benefited from significant financial support for decades.

The Christian Brothers’ constitution requires it to provide financial support to current brothers, including by covering housing costs, rates, electricity, gas and water bills, health insurance, reimbursement for medical, dental and physiotherapy, a “community living allowance” of $1,200 a month, the provision of vehicles and associated costs, money for spiritual development, including retreats, as well as some food and entertainment expenses.

The court documents also revealed the Christian Brothers had set aside $15.6m for the future support of its brothers, when the order ceased to exist.

Our investigative work continued. With my colleague Nino Bucci, I cross-referenced Christian Brothers’ property records with the details of known Christian Brothers offenders.

The process revealed that the religious order was housing two brothers with horrific histories of child sexual abuse, including one who preyed on orphans and another who was kept in teaching positions for almost three decades after senior officials became aware of his offending.

Finally on Friday, after sustained pressure from survivors, their lawyers, the government and media, the Christian Brothers and EREA released coordinated statements.

EREA had agreed to take over as the defendant to unresolved and future abuse claims.

The sale of the Christian Brothers’ 36 properties would be used to pay out abuse survivors such as Peter who had already settled or received judgment.

The details are still being worked through, and will require the support of survivors and other Christian Brothers creditors.

But it has won early praise from survivors and their lawyers. Under the new scheme, survivors should be paid out in full.

But why did it take so much pain and suffering to get here? And what has caused the sudden change of heart?

Survivors’ lives have been thrown into turmoil. Old wounds have reopened.

Grace Wilson, a partner at Rightside Legal, which represents Peter, said the scandal provided a valuable lesson for other parts of the church.

“Edmund Rice are folding because the law is against them,” she said.

“Other Orders should take note: transferring their wealth away will not protect them from their legal or moral obligations.”