Government tells court it's 'obviously disturbing' if Christian Brothers' $1 property sales deprive abuse survivors of pay
The Australian federal government has raised concerns in court that the Catholic order Christian Brothers may have improperly transferred properties for $1 each before declaring insolvency and refusing to pay compensation to abuse survivors.
Lawyers for the Australian federal government have expressed concern over the 'disturbing' possibility that the Catholic order Christian Brothers may have improperly transferred property to another entity years before claiming it was broke and unable to pay civil claims from abuse survivors.
The New South Wales Supreme Court on Thursday imposed a moratorium on all abuse claims against the Christian Brothers, a Catholic order heavily involved in the church's child sexual abuse scandal. The order sought the moratorium, saying it was going broke and wanted to establish a separate scheme to sell off its remaining property and divide the proceeds among creditors, including survivors.
The Christian Brothers estimates it owes $774 million to survivors with current or future abuse claims. It says it has 36 remaining properties worth $216 million under its control. The moratorium will give survivors time to consider whether to support the order's proposal.
However, significant concerns have emerged about how the Christian Brothers transferred property—land, school buildings, and homes near former school sites—out of its control to another entity, Edmund Rice Education Australia (EREA), over the past decade. Property records obtained by The Guardian show those transfers were made for $1 each, even when multimillion-dollar homes in Sydney were involved. EREA, named after the order's founder, was established as an independent entity in 2007 to take over former Christian Brothers schools.
In court, government barrister Sera Mirzabegian SC said the federal government was 'concerned to ensure that institutions take responsibility for abuse and provide appropriate compensation.' She highlighted specific concerns about 'historical asset transfers between the Christian Brothers and EREA' and whether they were 'proper and appropriate.' She stated it would be 'obviously disturbing' if the transfers resulted in assets not being available to compensate survivors.
The court heard that the Christian Brothers' proposed scheme would preserve creditors' rights, including survivors, to pursue assets transferred to EREA. The order has provided 15 pages of evidence about the transfers, but Mirzabegian said the evidence contained significant 'discrepancies,' including regarding the value of transferred land. 'What is abundantly clear from that evidence is that it unfortunately raises more questions than it answers,' she said.
Justice Scott Nixon ordered the moratorium, halting claims against the Christian Brothers. The pause will allow survivors to consider the property sell-off scheme and decide whether to support it. Without the moratorium, Nixon said, the opportunity to consider the scheme would be lost. The Christian Brothers have previously said that if their proposal is not supported, the order will go into liquidation and survivors will likely receive even less.
