The Christian Brothers in Australia transferred some of its most valuable colleges to a separate trust for just $1 each but now claims it will be broke by September and unable to compensate hundreds of survivors of shocking clerical abuse.
At least three prominent schools in NSW, including Waverley College in Sydney’s eastern suburbs, were passed by the Catholic order in 2018 to the Trustees of Edmund Rice Education Australia.
Documents obtained by this masthead reveal other NSW schools including St Patrick’s College in Strathfield and St Pius X College in Chatswood were also transferred that year for the nominal consideration of $1 each.
The move came just months before state governments across Australia removed the controversial Ellis Defence, which had limited civil claims against churches since 2007.
In Victoria, the transfers of prestigious St Kevin’s College in Toorak, Geelong’s St Joseph’s College and Parade College in Bundoora, were all made in June 2015 – just three months before the Royal Commission into Institutional Child Sexual Abuse first recommended the Ellis Defence be dismantled.
It is unclear if any symbolic payment was made during the restructure in Victoria, with the Christian Brothers and Edmund Rice Education Australia (EREA) both refusing to answer questions about the transfers.
However, the Christian Brothers said that under a scheme of arrangement or liquidation, the property transfers would be scrutinised.
Last week, the Oceania Province of the Christian Brothers announced it was on the brink of financial collapse, conceding the value of its remaining assets would not cover monthly compensation payments of nearly $6 million a month to survivors.
However, the Trustees of Edmund Rice Education Australia appears in robust financial health, with more than $345 million in cash and property valued at $2.28 billion, according to its latest financial report.
The schools charge fees of between $8000 and $23,000 a year. St Kevin’s has since broken away from Edmund Rice.
The transfer of schools between the two entities has fuelled claims by abuse survivors and their lawyers that the Christian Brothers engaged in a deliberate strategy to shield its assets from civil claims.
Lawyer Grace Wilson from Rightside Legal is representing a former student at another Edmund Rice school, St Patrick’s College in Ballarat, who was repeatedly abused by prolific paedophile Brother Edward “Ted” Dowlan in 1974.
His case was due to proceed to trial this month but has been thrown into limbo after lawyers for the Christian Brothers requested more than 200 cases across Australia be adjourned while it pursues a “creditors’ scheme of arrangement” to disperse its remaining assets.
The delay has exacerbated her client’s trauma, according to Wilson, who said the Catholic order had a moral obligation to make reparations to those abused by its clerics.
“The Christian Brothers have been using every trick in the book to minimise what they have to pay to survivors for generations. No wonder their victims are responding to their claims to be broke with suspicion,” Wilson said.
“When abuse survivors sue church institutions, it’s the responsibility of the institution to direct the survivor to the part of the institution with assets. Edmund Rice has assets.”
The Christian Brothers said in a response they had asked both EREA and the Catholic Church for financial assistance which had not been forthcoming.
“Neither the proposed moratorium nor the proposed scheme of arrangement is intended to prevent any future civil claim being brought against Edmund Rice Education Australia (EREA) and or other Catholic institutions by victims and survivors of abuse,” the statement said.
“The establishment of EREA in 2007 recognised the ageing Congregation and was in compliance with our canonical processes and with the support of the Bishops of the dioceses in which schools were transferred. The Holy See decreed EREA as a public juridic person.
“Under a scheme of arrangement or liquidation, there will be scrutiny of the property transfers to EREA, and the parties involved in those transactions.”
Governance expert Andy Schmulow said survivors of historical sexual abuse involving Christian Brothers may not have any legal recourse.
“It strikes me as a very obvious ploy to deny compensation to victims from an organisation that has billions in assets,” he said.
“This is a profoundly cynical tactic, but whether they can do anything about that, whether they can unwind this arrangement remains to be seen.”
Schmulow, an associate law professor at the University of Wollongong, said it was also unlikely that other Catholic orders would provide a financial bailout.
“From a moral perspective, you would think the broader Catholic Church in Australia got involved, but, we are talking about an organisation that was willing to rely on the Ellis Defence.
“I don’t think they [survivors] will get much traction there.”
Data gathered for the Royal Commission into Institutional Responses to Child Sexual Abuse found one in five Christian Brothers across Australia had allegedly engaged in the sexual abuse of children since 1950. More than 850 people made a claim or complaint of sexual abuse against one or more Christian Brothers.
In February 2017, the congregation’s then-Oceania Province leader Brother Peter Clinch denied to the Royal Commission that Edmund Rice Education 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.
Clinch told the commission the Christian Brothers did not have the power to make assets available to resolve legal disputes.
A 70-year-old Victorian survivor who was sexually assaulted in primary school said he was “only just” managing to cope after decades of legal wrangling to secure compensation.
“For the Christian Brothers to cry poor when they have simply transferred billions-plus of assets into another legal entity to keep it from survivors is disgusting and so wrong,” the man said.
The man labelled the latest legal action a “cruel and inhuman legal stunt”.
“I am devastated. How much more can I take? They are inhumane and cruel. The Christian Brothers do not give a rat’s arse about us survivors.”
The man’s lawyer, Judy Courtin, said the order spent years devising the “cold-blooded legal operation” to avoid paying survivors of abuse.
“Their God is no Christian God and their actions befit the devil.”
Gordon Legal’s Andrew Grech said it “beggars belief” the Christian Brothers were apparently out of funds.
He pointed out the order founded and operated some of the nation’s most exclusive Catholic schools, which was where a vast majority of the sexual abuse occurred.
“I say apparently because we’ve only been given very limited information about their true financial position,” he said of the Christian Brothers.
Grech slammed their decision to transfer lands and buildings, which consisted of valuable schools across the country.
“The dark arts of asset-restructuring to avoid judgments is not a new one – it’s been practised for decades by organisations like James Hardie,” he said.
“They should be ashamed of themselves.”
The court allowed survivors’ lawyers one week to go through thousands of documents detailing the Christian Brothers’ financials.
Representatives of the order called lawyers for survivors into a last-minute meeting a week ago and revealed the Brothers were going broke. The Catholic organisation’s lawyers asked the court to issue a moratorium against claims because of its poor financial position.
The Christian Brothers have $23 million in cash and have had $1.4 million per week going to settlements for abuse survivors since October 2024, the court was told in Sydney last week.
There were 21 settlements valued at $11.38 million, which would consume most of the order’s cash if paid out, barrister Stewart Maiden, KC, said.
He added there were 540 applications in progress against the order under the national redress scheme.
A spokesperson for Edmund Rice Education Australia said the transfers were part of a long process to move school assets and property from the Christian Brothers.
“The transfer has occurred progressively over the years since 2007 due to the complexity of transferring individual titles across multiple jurisdictions. The transfers represent the completion of a governance transition that commenced almost a decade earlier,” the spokesperson said.
“The Christian Brothers Oceania Province plays no role in the governance, ownership, management responsibilities or operation of any of our schools.
“Historical sexual abuse claims against the Christian Brothers prior to October 1, 2007, are exclusively handled by the Christian Brothers Oceania Province. Edmund Rice Education Australia has taken responsibility for any claims made after 2007.
“We sincerely hope the Christian Brothers find a path through their challenges, including planned asset sales, to allow them to continue their commitment to supporting survivors and victims of historic sexual abuse.”
The surge in litigation and multimillion-dollar settlements since the Ellis Defence was removed in 2018 has placed enormous strain on several other Catholic orders. Many have been forced to sell off assets, cut services and amalgamate parishes.
Some survivors fear the restructuring by the Christian Brothers could provide a template for other financially embattled orders to stymie litigation.
The Christian Brothers and survivors will return to court on Thursday.
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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.
