Christian Brothers granted pause on abuse victim payouts
The Christian Brothers religious order has been granted a moratorium on all civil claims against it, after arguing it was running out of money to pay victims of child sexual abuse.
The moratorium was granted by Judge Scott Nixon in the NSW Supreme Court on Thursday morning, after lawyers for the Christian Brothers brought an application for the moratorium last week.
In arguing for the moratorium, lawyers for the Christian Brothers told the court the religious order had $23 million in cash and was losing about $1.7 million a week since October to victim payouts.
The moratorium means all current cases against the Christian Brothers will be paused until a hearing is held to determine how the religious order's creditors scheme will operate.
That includes all claims which have been settled but are yet to be paid out.
The court heard last week there were 32 matters of alleged abuse by Christian Brothers listed for trial in the next three months alone, and there were 540 applications in process with the National Redress Scheme for abuse survivors.
The court on Thursday heard the Christian Brothers's creditors scheme intended to distribute funds "equitably" to all creditors, which included any person with an abuse claim against the order.
Barrister for the religious order, David Sulan SC, told the hearing "significant liability" had been identified and a moratorium would "preserve" the opportunity for victims of abuse to seek compensation under the proposed creditor's scheme, which might otherwise be lost without a stay on all current proceedings.
"One of the intentions of the scheme is to preserve all rights that may accrue," he told the court.
Court documents revealed there were more than 240 claimants and "prospective claimants" involved in the matter, all of whom have had their names and identities suppressed.
Barrister Tim Hammond, who was acting for two of the claimants, told the court he and other legal representatives needed time to give appropriate advice to the "cohort of vulnerable victim-survivors".
Barrister Sera Mirzabegian SC appeared on behalf of the Commonwealth of Australia and raised concerns about the "historic" transfer of assets between the Christian Brothers religious order and Edmund Rice Education Australia (EREA).
EREA was set up in 2007 to take over schools and educational institutions previously run by the Christian Brothers.
"The Commonwealth is concerned whether those transfers were appropriate," she said.
"It unfortunately raises more questions than it answers and there appears to be discrepancies in the records concerning the transfers."
Ms Mirzabegian also acknowledged it had been a "very long journey for survivors to achieve justice".
"The Commonwealth wishes to assure survivors that it remains committed to their care and support and to minimise uncertainty for survivors as much as possible," she said.
"Survivors can continue to apply to the National Redress Scheme despite the financial difficulties of the Christian Brothers."
In granting the moratorium, Justice Nixon said he accepted arguments that the Christian Brothers order risked running out of money to pay victims if a moratorium was not granted.
"I'm satisfied that the moratorium order should be granted in order to preserve the opportunity for the scheme to be considered by claimants, given that opportunity may be lost," he told the court.
