Submission 1. For the Premier and Minister’s immediate attention. Victims of sexual abuse who attended Brisbane Grammar School in Royal Commission Case Study 34 have sought clarification from the Qld Auditor General in respect to the recent published accounts of Brisbane Grammar School for the year end 2016. 2. Victims in Royal Commission Case Study 34 welcome the advised audit investigation by Kaylene Cossart from the Qld Audit Office. The audit will likely provide a more precise calculation of the outstanding liability of claims against Brisbane Grammar School and not simply victims allegations that Brisbane Grammar School are not fully disclosing the true financial liability of claims against the School. 3. It is the view of victims and trust that the Qld Audit Office will concur, that it would be prudent for the long term financial viability of Brisbane Grammar School as a “Going Concern,” if the Board of Trustees acknowledge the very fact and existence that there is a significant and substantial liability of claims against the School. It is likely to be found by the auditor this liability is yet to be accounted for in the School’s accounts. 4. Brisbane Grammar School in public communication allege that the majority of sex abuse claims against the School have in fact been settled. This sits in stark contrast to the vast majority of victims who are either still waiting on a final settlement agreement with the School and or are seeking a review of a previous settled agreed from the 2002 mediations. This includes all victims seeking a recovery of School Fees that Brisbane Grammar School have so far declined to refund. 5. Victims who still allege their claim has not been settled by the School and or a review has not been conducted by Brisbane Grammar School are being urged to make themselves known to Kaylene Cossart. Victims are valid creditors with a valid legal claim against the School’s assets. Audit Investigation : Brisbane Grammar School Accounts 6. It is finally welcome that the Qld Auditor may provide an informed assessment of the true extent of liabilities against Brisbane Grammar School. It is asserted that the extent of liabilities are more than likely to be in the order of $50 million, as previously suggested to the Minister once the well in excess of 100 victim creditor claims against the School are adequately assessed A Question of Insolvency 7. A very important legal point of law now needs to be considered by the Qld Auditor and Minister in respect of Brisbane Grammar School continuing as a “Going Concern” and not breaching “Insolvency Rules” and therefore “Not Trading While Insolvent. “ 8. Brisbane Grammar School Board of Trustees is a “Statutory Corporation,” bound by the Grammar School Act 2016. The Board would still have a duty to comply with certain sections of the Corporations Act 2001. One of those duties of the Board of Trustees would be to ensure the School was not in fact “Trading While Insolvent.” 9. It is an absolute priority for the Qld Auditor to now assess Brisbane Grammar School’s insurance position in order to immediately determine the School’s ability to continue as a “Going Concern,” and therefore the School’s financial solvency position. 10. Compounding insurance issues for the School is that it is understood that HIH was on risk during a period of claim. Therefore in all likelihood Brisbane Grammar School would have to continue to cover 100% of those claims, if HIH has now been formally wound up with no further recovery of claims. 11. It should also be pointed out to the Qld Auditor that Insurance Policy documents for periods in 1970’s were not discovered by Brisbane Grammar School. Nor could the Insurance brokers acting for the School locate policy documents to prove Brisbane Grammar School insurance cover for periods in the 1970’s. Hence victims are well aware there are certain claims outstanding against the School in the 1970’s period, when the School can’t prove insurance policy cover. These claims have been declined by Brisbane Grammar School. It is the view of victims that the School has declined these 1970’s claims specifically because the School is 100% liable for those specific claims where there is no identified policy insurer. 12. For the benefit of the Minister, ASIC has produced a helpful guide on this issue of trading while insolvent. http://asic.gov.au/regulatory-resources/find-a-document/regulatoryguides/ rg-217-duty-to-prevent-insolvent-trading-guide-for-directors/ 13. Trading while solvent is likely seldom considered by Statutory Corporations, as the State provides a backstop. Nevertheless in a situation if it were found insurers have declined further coverage of claims, the question the auditor needs to consider is at what point should the Trustees declare that the School is in fact insolvent and can not meet its financial obligations? Audit Investigation : Brisbane Grammar School Accounts 14. In practice It is only at the point when Trustees themselves and or the Auditor General declare that the School is technically insolvent, the backstop of the State would in fact kick-in. The situation can no longer continue where the Minister is powerless to act in the current situation where victims as creditors of the School are seeking recovery of their losses and the School continues to deny those legally valid claims against the School. 15. It is the view of victims as creditors that placing Brisbane Grammar School into administration is likely to be the only viable outcome to secure the best longer term outcome for both the School and victims as creditors. 16. The duration of time it took to mediate the 2002 claims was a period of in excess of 3 years from May 2000. At the time Brisbane Grammar School denied all knowledge and this unnecessary delay is almost certainly a major contributing factor to the relatively poor outcomes post mediation reported by significant numbers of victims. That is aside from victims identified as BQG and BQK who seem to have had surprisingly positive outcomes post May 2000. Yet in recent times from previous analysis submitted that both BQK and BQG have been what would appear to be major benefactors of settlements. When so many other victims are being denied their claims and have arguably more pressing financial need and likely far greater financial losses in comparison to BQK and BQG, it begs the question from all other victims as creditors as to why many other claims are being denied. 17. There is little need to state the obvious, but reaching settlement of all legal claims against Brisbane Grammar School should now be a priority. If the School needs to be placed into administration in order to achieve an outcome desirable to creditors as victims then unfortunately the Minister is likely to be forced to eventually act. Focussing minds and attention in order to resolve this matter is what is now needed. Drawing a final conclusion will no-doubt allow Brisbane Grammar School to redefine how in the future it may conduct itself and in fact is likely to result in a brighter future once the legacy issues are well and truly resolved. Statement by Victims in Royal Commission Case Study 34