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The Christian Brothers teaching order has transferred billions of dollars of assets to a separate business entity that governs its network of Catholic schools across Australia but is crying poor, claiming it is so broke it cannot afford to pay hundreds of sexual abuse survivors.
The Oceania Province of the Christian Brothers announced that after 183 years in Australia, the order was on the brink of financial collapse, conceding the value of remaining assets would not cover compensation payments of nearly $6 million a month to survivors.
The order has applied for a court-ordered moratorium on all remaining civil cases lodged against it by survivors. If granted, it would permanently halt at least 200 claims.
The Catholic Church and some schools had been under siege over sexual abuse allegations.
Christian Brothers accounted for 22 per cent of the alleged abuse, but pressure for big payouts began to wither after a victim sued the Archdiocese of Sydney and the 2007 NSW court decision, the so-called “Ellis defence”, found that the church was not responsible for individual priests.
However, the consequential Royal Commission into Institutional Responses to Child Sexual Abuse recommended the Ellis defence be dismantled. State governments across Australia dropped it in 2018.
The Christian Brothers did not wait for the legal loophole to be undone to take evasive action.
In 2018, they transferred schools in NSW – Waverley College in Sydney’s eastern suburbs, St Patrick’s College in Strathfield, and St Pius X College in Chatswood – to the Trustees of Edmund Rice Education Australia for the nominal consideration of $1 each. Three years earlier, the order had transferred three of its leading Victorian schools, St Kevin’s College in Toorak, Geelong’s St Joseph’s College and Parade College in Bundoora, to the governing body.
But the timing of the Christian Brothers’ business rearrangement seems serendipitous. The order may be broke but EREA remains an administratively and financially separate entity and reportedly holds net assets of $2.3 billion, including 32 houses, and $345 million in cash.
Almost 10 years ago the congregation’s then-Oceania Province leader, Brother Peter Clinch, denied EREA had been established to protect assets from future legal action. “That might appear to be the effect. It was certainly never the intention,” Clinch told the commission.
The upshot was that the Christian Brothers did not have the power to make assets available to resolve legal disputes. But the surge in litigation and multimillion-dollar settlements since the Ellis defence was removed placed enormous strain on other Catholic orders. Many were forced to sell assets, cut services and amalgamate parishes.
In terms of money and reputation, the Christian Brothers paid dearly too. But with so many victims poised to miss out, the strategy of getting rid of assets it could use to pay survivors reflects poorly on an order that espouses social justice.
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