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Hundreds of clerical abuse victims face an uncertain future as the Australian congregation of the Christian Brothers confirmed it was on the brink of financial collapse and conceded the value of its remaining assets would not cover the surge in compensation to survivors.
The Catholic order, which operates some of Victoria’s most prominent schools under a different trustee, confirmed it faces liquidation within months but plans to pursue a “creditors’ scheme of arrangement” to disperse its remaining assets.
Lawyers acting for the Christian Brothers are expected to request an urgent stay of all legal proceedings against the order, with the application expected to be made in the Supreme Court of NSW on Tuesday morning.
Several Melbourne law firms representing abuse victims were instructed to attend an urgent meeting on Monday convened by lawyers acting for the Oceania Province of the Christian Brothers and associated companies, or trustees.
The financial woes do not impact schools operated by Edmund Rice Education Australia, which the order placed under a different corporate structure in 2013.
Lawyers acting on behalf of the order said it had about $216 million in realisable assets, but many were occupied and could not be offloaded at short notice. Meanwhile, the Australian branch of the order paid out $66 million during the 2024-25 financial year – a figure which is expected to rise again this year.
The Royal Commission into Institutional Responses to Child Sexual Abuse found 22 per cent of Christian Brothers across Australia have been alleged sexual predators since 1950.
The decision to dramatically restructure its financial affairs comes just a day before a civil trial involving the Christian Brothers was due to proceed to trial in the Supreme Court of Victoria.
Lawyers representing the order had conceded liability and faced another massive compensation payout over the shocking sexual abuse of a former student at St Patrick’s College by brother Edward ‘Ted’ Dowlan in 1974.
Dowlan, who changed his name to Ted Bales, was convicted of abusing more than 30 boys at several schools operated by the Christian Brothers during the 1970s and 80s.
The former student alleges he was sexually abused or physically assaulted on 20 occasions by Dowlan while boarding at the Ballarat boys’ college.
The statement of claim filed by law firm Rightside Legal against the Trustees of the Christian Brothers refers to dozens of other cases involving clerics belonging to the order, including prolific paedophile priest Gerald Ridsdale and Brother Robert Best, who also taught at St Patrick’s College.
Lawyer Laird Macdonald from Rightside Legal said the sudden announcement by the Christian Brothers on Monday had exacerbated his client’s trauma.
“Two abuse survivors we work for, both victims of notorious offenders in Ballarat, were due to start their trials tomorrow. They were ready for their days in court.
“To be told the night before their trials that the Christian Brothers can’t or won’t be ready is insulting to men who have lived with the irresponsibility of the Christian Brothers their whole adult lives,” Macdonald said.
“The Christian Brothers have wreaked untold havoc on lives of hundreds of Australians. We won’t let them avoid their responsibilities for survivors now.”
The move by the Catholic order could mean it is the “final chance” for survivors to get compensation, according to lawyer Kim Price from Arnold Thomas and Becker, who specialises in abuse claims.
“We understand the Christian Brothers will now be seeking to wind up their operations and liquidate their remaining assets,” Price told this masthead.
“It’s a process that might result in survivors receiving just a fraction of what they are rightfully owed.
“This may be their final chance to obtain any compensation from the Christian Brothers in Australia,” Price warned.
He said the move could devastate those still grappling with the lifelong psychological trauma of their abuse.
Price indicated there could be other avenues for some survivors to pursue justice where other institutions, such as state governments, have been involved.
The surge in litigation and multimillion-dollar settlements has placed enormous strain on several other Catholic orders, with many forced to sell off assets, cut services and amalgamate parishes.
In 2023, Catholic Church Insurance (CCI) also said it was unable to secure additional capital and was forced to wind up the business.
“The CCI Board and management deeply regret that it has been necessary to make this decision and would like to assure all staff, policyholders and suppliers that it has sufficient assets to meet its commitments as they currently stand,” said chair Joan Fitzpatrick at the time.
In a statement issued on Monday evening, the trustees of the Christian Brothers confirmed they would seek approval for a creditors’ scheme of arrangement “to facilitate the orderly distribution of our remaining property, funds and other assets to our creditors”.
“We accept that we have now reached a pivotal moment facing a very difficult financial position, and consequently the proposed scheme is the most responsible course of action,” the statement read.
“The creditors eligible to participate in the proposed scheme will include the victims and survivors of abuse experienced in our facilities (including those who have not yet come forward).”
Edmund Rice Education Australia operates some of the state’s most prestigious schools, including Parade College in Bundoora and Preston, St Mary’s in St Kilda and St Patrick’s in Ballarat.
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Caroline Schelle is an education reporter, and joined The Age in 2022. She previously covered courts at AAP.Connect via X or email.From our partners
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