Sunday, March 30, 2014
Church fought abuse claimants tooth and nail
Catherine Armitage Sydney Morning Herald March 29, 2014 The now infamous case of the brilliant lawyer and sex abuse survivor John Ellis before the child sex abuse royal commission has laid bare for the first time not just the Sydney Catholic archdiocese's wealth but the cold, dark heart of its handling of child sex abuse complaints. The three-week hearing before Justice Peter McClellan has demonstrated in excruciating detail the exercise of power, against a vulnerable man, at the highest levels of the church and of the law in Sydney. Cardinal George Pell, who on evidence before the commission called all the shots in the Ellis case, takes up a new job running the Vatican's finances on Monday. McClellan has instructed his people to secure the cardinal's return to the witness box in Melbourne later in the year, when the commission will inquire into the ''Melbourne Response'' set up by Pell in 1996 to deal with sex abuse complaints. Until then we have learnt: Accounts tendered in evidence sensationally revealed for the first time the financial position of what is likely Australia's richest archdiocese. It is open for McClellan to conclude that it made low payouts to sex abuse victims because it chose to prioritise other uses, such as saving. The archdiocese's assets have nearly doubled since 2004, to over $1 billion at the end of 2013. While liabilities and expenses grew similarly, the net position is a healthy one: net assets grew from $103 million in 2000 to $192 million in 2013. In 2007 the annual surplus was $43.95 million. It was $19.6 million in 2006, and $9.2 million last year. Much of this has been achieved through real estate sales. Since Pell became archbishop in 2001 the archdiocese has paid out $6.8 million to settle 82 claims for sex abuse according to figures provided by the archdiocese's business manager, Danny Casey - an average of $83,200. The largest payout was $795,000. Apart from maintenance on the property portfolio, archdiocese expenses included the priests' retirement fund, the life, marriage and family office, youth services, Catholic Care and other welfare programs. McClellan put it to Casey that "the state of these funds is such that it would be possible for the church to spend significantly greater monies in assisting people who have been abused than has been spent so far?" Casey replied: "There is always opportunity to redirect additional expenditure." He added that the abuse payouts under Pell's stewardship had increased dramatically - before 2001, they averaged $11,000. And spending on lawyers had been reined in, "from about 67 per cent to 17 or 18 per cent", presumably as a proportion of the payout figure. McClellan asked Casey to confirm that the church does not pay income tax, capital gains tax or stamp duty (except in some circumstances). Nor are its books subject to external scrutiny, except for some regulatory requirements in relation to health and welfare allocations, he confirmed. It is open for McClellan to find that given the extraordinary benefit conferred on the church through its tax-free status, its lack of external financial accountability is no longer in step with community standards. In the Ellis litigation, the church successfully argued that the trustees who held the assets could not be liable for damages because they were not responsible for the actions of priests. This 2007 Court of Appeal judgment has insulated the church against paying victim's damages ever since. Pell conceded at the hearing that "money could be found" to pay out damages verdicts from the assets held by the trustees. Lawyers and their clients are unguarded in their correspondence when they don't expect it to be subject to public scrutiny. The commission, without the usual constraints of the rules of evidence, provided a rare insight into behind-the-scenes exchanges in major piece of litigation. Much of the correspondence between the archdiocese and its solicitors, Corrs Chambers Westgarth, in the exhibit list on the commission's website, is embarrassing (to say the least). Pell admitted he "explicitly endorsed the major strategies of the defence" in Ellis' case, but his most controversial decision was taken on the advice of Corrs. This was to dispute in court whether the abuse occurred, even though the church's own assessment concluded that on the balance of probabilities it had. Corrs partner Paul McCann gave evidence he was never told that the church had accepted the truth of Ellis' allegation. Pell described as a "mystery" an email from his private secretary to McCann which pointed to Pell having a role in what the commission's Gail Furness, SC, described as a "contrived" strategy to dispute that the abuse occurred. In the end the archdiocese spent $1.5 million on Ellis' case, including legal costs of about $800,000 and $568,000 on ex-gratia payments to him. Early in the proceedings the church spent $20,000-$30,000 resisting a subpoena from Ellis' lawyers seeking information on what insurance policies might be available to cover his claim. This was about the same as it offered as a "financial gesture" to Ellis in 2004, his barrister Maria Gerace noted. That year the archdiocese's annual surplus was $7.7 million. On the last day of the hearing McClellan pressed the cardinal on his claim not to have known about Ellis' offer to settle in 2004 for $100,000. It sat awkwardly with the evidence that until then he had been closely involved in all key steps in Ellis' case until then. "I want to clear this up", McClellan said. "Before you made the decision to defend the proceedings, did you ask your advisors how much they understood John Ellis wanted?" "I didn't ask because I was sure we had a shared conviction," Pell answered. "I just didn't know, I was not in the loop on that at all." Pell would have been only too aware when he entered the witness box that similar public inquiries in Ireland, which made damning findings on the church's responses to sex abuse victims, led to a collapse in its public standing and influence. Weekly church attendance plummeted. Pell's advisers gave evidence that the commission's proceedings had changed attitudes within the church administration, including Pell's. John Usher, chancellor of the archdiocese, said the cardinal was more willing to admit mistakes. At the end of his evidence Pell met Anthony and Chrissie Foster privately. They have crusaded for victims since learning two of their daughters, when little girls, were sexually abused by a priest in Melbourne. Anthony Foster said Pell agreed the $75,000 cap on payouts under the Melbourne Response should be removed and past payouts reassessed in line with Australian civil claim standards. He made a commitment to speak to Melbourne Archbishop Denis Hart about it. ''It is what we have been asking for for 18 years'', Foster said.