Re : Clarify Brisbane Grammar School Audited Accounts for the Year ending 2016 Submission 1. Re : The recently audited accounts for Brisbane Grammar School by the Qld Auditor General appointed auditor, J F Walsh signed off on the 28 February 2017, does not specifically qualify the School’s insurance position relating to sexual abuse claims and Royal Commission Case Study 34 2. Shortly before the accounts were signed off by J F Walsh on the 28 February 2017, the Royal Commission into institutional response to child sexual abuse tabled and published in the Australian Parliament on 15 February 2017, the final report including findings into Case Study 34 Brisbane Grammar School St Pauls The findings as itemized on page 9 of the Report published by the Royal Commission copied verbatim as follows : -- What Brisbane Grammar knew about the complaints of sexual abuse There was evidence that a number of complaints against Mr Lynch were made to senior staff at Brisbane Grammar, most significantly to Dr Howell (deceased), who was the headmaster of the school between 1965 and 1989. We find that in 1981 BQH told Dr Howell that Mr Lynch had sexually abused his son BQJ. Dr Howell did not investigate the allegations and did not report the matter to the police or the board of trustees. In not doing so, he failed in his obligations to protect the safety and wellbeing of the students. We find that BQA disclosed to Mr David Coote, the then deputy headmaster, that he loved Mr Lynch more than his own parents. There is no evidence that Mr Coote took any actions to investigate the nature of Mr Lynch’s relationship with BQA after this disclosure was made. This disclosure should have prompted Mr Coote to take action given Mr Coote’s qualifications in psychology. We find that during Dr Howell’s period as headmaster there was a culture at Brisbane Grammar where boys who made allegations of sexual abuse were not believed and allegations were not acted upon. -- 3. Recent findings as stated by the Royal Commission against Brisbane Grammar School is significantly different to that given by the School when a large number of legal claims approximately 65 in number against the School were settled by the Board of Trustees of Brisbane Grammar School during mediation in October 2002. At the time of mediation in 2002, the School denied all knowledge of the actions of the sexual perpetrator Kevin Lynch. However these recent findings by the Royal Commission give rise to the legal possiblity for all victims to seek a review of previous settlements reached with the School. 4. The Chair of Trustees, Mr Stack in communication to the Board of Trustees DOC.101.003.0083 - DOC.101.003.0086 at the time of 2002 mediation acknowledged that prior to the former headmaster Dr Max Howell signing an affidavit dated 27 September 2002 identified as DOC.370.002.0597_R - DOC.370.002.0599_R the insurers declined all cover and refused to settle claims. That is the School would have to cover 100% of costs of settlements, as it was found during the discovery process an allegations surfaced that Brisbane Grammar School knew about allegations of sexual abuse. Mr Stack says as follows : --- 1.3 Underwriter’s response (we were obliged by law to inform them) was to withdraw their offer of 80% indemnity. We arranged a meeting in Sydney (with Max in attendance at their request to answer a fairly soft cross-examination) to re-state our arguments in their best (but diminished) light. It was a difficult meeting, but in the end underwriters restored their offer but reduced to 70% indemnity in lieu of 80%. We re-submitted our argument in writing by Corrs’ letter dated September (attached marked “A”). -- 5. It is submitted to the Qld State Auditor that the only reason the insurers for Brisbane Grammar School reinstated insurance cover is precisely because the former Headmaster, Dr Max Howell signed an affidavit DOC.370.002.0597_R - DOC.370.002.0599_R denying all knowledge of allegations of sexual abuse on the 27 September 2002. It is alleged this was in a direct response to Brisbane Grammar Schools Insurers declining insurance cover on the 9 September 2002 and BQH the father of BQJ signing an affidavit on 17 September 2017 DOC.103.002.0180_R - DOC.103.002.0183_R alleging he specifically met Dr Howell to discuss the sexual abuse his son endured at the hands of the sexual perpetrator Kevin Lynch. 6. As the Royal Commission have now accepted in their findings that Dr Max Howell did in fact know about allegations of sexual abuse, it is now unclear exactly what Brisbane Grammar School’s insurance position may in fact be and whether the School is now 100% liable for any outstanding claims against the School and or any review of previously settled claims and likely significant financial uplifts on previous settlement agreements with victims. 7. Mr Stack details the insurance issues in Para 46-81 in statement to the Royal Commission dated 29 September 2015 identified as STAT.0380.002.0001_R - STAT.0380.002.0016_R. Mr Stack acknowledges and accepts in Para 78 the insurers withdrew their offer to cover on the 9 September 2002. He accepts insurance cover was re-instated, although Mr Stack does not acknowledge this was as a direct result of the affidavit Dr Max Howell signed on the 27 September 2002. Although it is submitted to the Qld State Auditor that insurance cover was only re-instated, as a direct result of Dr Max Howell signing the affidavit. The Royal Commission have now found that affidavit to be wanting and accept that “BQH told Dr Howell that Mr Lynch had sexually abused his son BQJ” --- 78 Subsequent events, as outlined in paragraphs 112 to 116 of my First Statement, were such that the insurers withdrew their 9 September 2002 offer. Following further discussion insurers subsequently agreed to contribute 70% towards any settlements with a 30% discount percentage applied. This arrangement was only applicable to the years for which insurers accepted they were on risk. Due to the inability to identify the School's underwriters for any period prior to September 1978, the School was effectively uninsured for that period. -- 8. Mr Stack in his communication to Board of Trustees during mediation in 2002 DOC.101.003.0083 - DOC.101.003.0086 acknowledges that payouts could be significantly higher than those St Paul’s School reached with victims due to the length of time since sexual abuse. --- 2.3 Some boys have been serious affected, and Counsel’s advice is that there are up to (say) 10 which could require large damages agreements. The highest St Pauls payout was $350,000.00. Our worst could be higher because, for example, their economic loss has been going on longer. 2.6.4 We believe the 24 St Pauls claims averaged about $100,000.00 each. The highest was about $350,000.00, but several at $10,000.00 each. About half of these were arguably statute barred; whereas all of ours arguably are. In mediation, this results in a steeper discount for the plaintiff so barred. This may well be offset however by the fact we have a number who have suffered for longer, and economic loss claims, which compound damage fairly dramatically, are probably far higher in some of our cases. --- 9. In communication to the Brisbane Grammar School Community on 12 February 2016 the School acknowledge that claims against the School have average $75,000. While so far this may have saved the school considerably costs in the short run, if averages settlements are $25,000 lower than those agreed by St Pauls. However in the longer term it is inevitably resulting in victims seeking a review of their claims. The financial management strategy of limiting claims well below St Pauls settlements can only be construed as “Financial Mismanagement.” In the longer run it is likely to cost the public institution far more than if they had settled openly at the start acknowledging that the School in fact knew about sexual abuse rather than denying the School knew. Victims of Kevin Lynch at Brisbane Grammar School assert that Brisbane Grammar School have either settled victims at a value considerable less than fair financial settlement of losses incurred and or in some cases Brisbane Grammar School have refused to settle at all despite valid claims. http://www.brisbanegrammar.com/About/RoyalCommission/PublishingImages/Pages/default/Community%20Update%20Friday%2012%20February%202016.pdf 10. Victims despite the figures tabled by Brisbane Grammar School and despite the claim asserted by community publication that over 100 victims have settled claims. A large body of Victims numbering at least 50 collectively do not consider claims to in fact be settled despite the School claiming they have been settled. 11. Brisbane Grammar School 2002 mediation gave no consideration to financial losses that may in fact have been incurred subsequent to mediation as a direct result of sexual abuse. These new findings by the Royal Commission puts Brisbane Grammar School at significant risk as a going concern, if the insurers are not prepared to settle all the losses suffered by victims. 12. Prior to the appointed auditor signing off the Accounts of Brisbane Grammar for the period 2016 it is submitted to the Qld Auditor General that at the very least this issue of insurance should be clarified. A specific note should have accompanied the accounts by the auditor clarifying the position of insurance and legal sexual abuse claims against the school. 13. Significantly higher claims against Brisbane Grammar School are all but inevitable given the public disclosure by the School. Even if claims are to be brought in line with St Pauls victims at an extra $25,000 per victims and this is more than likely to be very conservative, it equates to over $2.5 million the School will have to account for. That is if the insurers are not prepared to offer further coverage of claims. 14. Chair of Brisbane Grammar School Trustees Mr Stack in his Witness Statement to Royal Commission dated 29 September 2015 para 83 STAT.0380.002.0015_R he accepts that a victim BQG in fact reached a settlement with the School in 2005, but specifically offered BQG a new opportunity to meet on the 20th of November 2015 to review his previous settlement. This was in fact only days after the November 2015 Royal Commission Case Study 34 hearings. -- Para 83 STAT.0380.002.0015_R I refer to paragraph 145 or my First Statement and footnote 167, in particular the matter of Mr lBQG I- Mr BQG approached the School early this year requesting to revisit the settlement he reached with the School in 2005. Because Mr l BOG l did not take part in a formal mediation when he approached the School in 2005, BGS has agreed to take art in a mediation with Mr BQG on 20 November 2015. -- 15. It is not clear from the Published Brisbane Grammar School accounts, but it is suspected that victim identified as BQG agreed a settlement in 2015 with Brisbane Grammar School in the order of $495,000. While there is no denying the financial losses suffered by all victims including BQG. However on the face of it, BQG does not appear to have suffered such dramatic financial loss in comparison to significant numbers of other victims. It is alleged that BQG is likely to be currently employed as a Director / Chief Executive of a listed Australian Company with a current salary well into the 6 figures. It is almost certain that if Brisbane Grammar School were to agree as they should to review each and every previous settlement then the School may in fact be liable for significant numbers of claims more in the order of $1/2 million and possibly in excess if each victim who was offered a take it all leave it settled of $30,000 at the 2002 mediation. There is good reason to suspect that a single settlement of $495,000 was reached with BQG as Brisbane Grammar School in the 2015 accounts note : -- At 31 December 2015, all settled claims have been paid. Since 31 December 2015 a number of claims have progressed to the stage where they can be reliably estimated and are expected to result in net settlements of approximately $495,000. -- 16. Mr Stack as Chair of Brisbane Grammar School appears to accept that the School is fully at risk of the settlement recently reached with BQG on 20 November 2015, as per Para 85 of his statement to the Royal Commission signed on the 29 September 2015 STAT.0380.002.0001_R - STAT.0380.002.0016_R -- I refer to paragraph 145 or my First Statement and footnote 167, in particular the matter of Mr lBQGI- Mr BQG approached the School early this year requesting to revisit the settlement he reached with the School in 2005. Because Mr lBQGl did not take part in a formal mediation when he approached the School in 2005, BGS has agreed to take part in a mediation with Mr BQG on 20 November 2015. The insurer on risk for Mr BQG 's claim does not accept that there is a compelling reason to reopen Mr BQG 's settlement as the insurance policy responds to legal liability only. -- 17. The Qld Auditor General should also note that Brisbane Grammar School victim likely to be identified as BQK, Mr Stack has accepted in his Statement Para 82 dated 29 September 2015 STAT.0380.002.0001_R - STAT.0380.002.0016_R to the Royal Commission, that a sum of $1/2 million was agreed as settlement in 2014 during the period of notice to disclose to the Commission. -- I refer to paragraph 144 of my First Statement, in which I stated that one of the 65 Shine claims remained current. BGS reached settlement with that claimant in December 2014 for $350,000 in damages and $150,000 for costs and disbursements. -- 18. Victim identified as BQK in his written testimony dated 28 October 2015 admits he did not even need any money and has not even used any of his settlement para 80 STAT.0730.001.0001_R STAT.0730.001.0017_R This is in stark contrast to significant numbers of victims who have not in fact had such generous settlements and or are still waiting to agreed settlements. -- Para 80. STAT.0730.001.0014_R When I received my cheque I put the money in a separate bank account and haven't touched the money since. I don't know what to do with it. I don't need it and pursuing Brisbane Grammar has never been about money for me. I settled my claim because I felt that the school finally, after almost 15 years, were showing that they were accountable and faced the prospect of shame and ridicule on par with the shame that victims of abuse feel. -- 19. It should also be noted by the Qld Auditor that there is no disputing BQK’s claim. However he has been a company director with a very successful business since early 2000 and is not so financially in need as many other victims who Brisbane Grammar School have not in fact been so recently generous in adequately compensating to a level expected by most victims. 20. The Qld Auditor General should also be aware that Brisbane Grammar School have recently refused to refund School Fees to parent of victims in Royal Commission Case Study 34. St Pauls School accepted the need to refund School Fees and did so soon after the 2015 Royal Commission hearing in Case Study 34. There is a significant liability at the point when Brisbane Grammar School has little choice, but to refunded School Fees as a matter of ethical and moral best practice. The petition seeking a refund of School Fees has now attracted in excess of 5000 supporters including victims, parents, family and friends and supporters. https://www.change.org/p/the-board-of-trustees-of-the-brisbane-grammar-school-refund-of-tuition-fees-to-parents-of-kevin-lynch-s-brisbane-grammar-school-victims?source_location=minibar 21. The Royal Commission final report in Case Study 34 gives victims of sexual abuse in this horrific case study as a body legitimacy to claim “Secured Creditor Status” against Brisbane Grammar School. As an overall body of creditors seeking the best outcome for both the School and all victims who’s claims have either not been settled at all or need to be reviewed since 2002 mediation, it is put to the Qld Auditor General that an urgent and necessary review of the recent audit of Brisbane Grammar Schools 2016 accounts is in fact very necessary. A thorough investigation in order to finalize all claims and determine the liability including determining the insurance issue will help expediate claims against the School far more efficiently. This will reduce any further unnecessary costs that may arise if this issue of settling claims continues to drag on for many years to come. 22. The ability of Brisbane Grammar School to continue to operate as a “Going Concern” is certainly at risk if the insurance is not going to settle future claims owed to victims as creditors of Brisbane Grammar School. If as is more than likely most victims should in fact be settled nearer to $1/2 million per victim, as per the recently alleged settlements to BQK and BQG, this will create a $50 million shortfall for Brisbane Grammar School’s accounts. This needs reviewing as a matter of urgency, as this is more the likely cost of settling all claims. It would be far better for the School to accept the significant liability rather than continue to deny and pretend the liability does not exist. 23. Victims are willing to work with the School in order to settle outstanding claims. However it is impossible for victims to work with the current Board of Trustees. All confidence has been lost in the Schools ability to adequately management claims and the continual denial by the Trustees to adequately settle claims. 24. It should also be pointed out to the Qld Auditor General that while it is encouraging to see Brisbane Grammar School considering planning for future redevelopment of School buildings in the 2016 Annual Report. However surely the first priority of the School must now be to consolidate and settle all the legacy claims for sexual abuse that have arisen and date back many decades? That is before the School can even consider any future options of major capital works. It might in fact be prudent for the Qld Auditor General to point this out to the Trustees of the School. Prudent financial management also requires that an institution adequately settle legacy issues, rather than avoiding and attempting to move the costs onto the shoulders of the public purse as the School is currently attempting to do. --- Future Planning Infrastructure The School’s current Science building was constructed in the 1960s and no longer adequately serves the school population, the contemporary pedagogy nor the inquiry- based learning that occurs in BGS classrooms. As the School approaches its sesquicentenary celebrations in 2018, it is investigating the next major building project. Through the lens of master planning, there is a commitment to build an ultramodern precinct for the teaching and advancement of science, technology, art and mathematics (STEAM), and upgrade our performing arts facilities, develop infrastructure at the Northgate playing fields, landscape social spaces for student use and modernise existing classroom spaces. These capital projects will set new standards in a Queensland education, and serve the School’s needs for the next 50 to 100 years. Statement to the Qld Auditor General made by Victims in Royal Commission Case Study 34 Contact by Email : lynchvictim@gmail.com