Church Eyes $100m Sale As Sex Abuse Payouts Rise

By Joanne Mccarthy
Newcastle Herald
October 1, 2010

The Catholic diocese of Maitland-Newcastle is selling its aged-care assets, potentially valued at $100million or more, and withdrawing from aged-care delivery as its ‘‘substantial’’ total compensation bill for child sex abuse victims continues to climb.

The diocese called for expressions of interest from three specialist Catholic aged-care providers to buy and manage facilities ranging from the 135-bed St Joseph’s Home at Sandgate, to seven aged-care villages and more than 150 independent living units across the Hunter Region.

The decision could affect more than 1700 elderly clients and their families, and more than 600 staff, whose concerns about potential redundancies were acknowledged by Bishop Michael Malone in a statement.

In an interview yesterday the bishop confirmed managers of the various Catholic Care facilities were ‘‘stunned, shocked and saddened’’ when he delivered the news at the diocese’s Hamilton centre on Wednesday.

‘‘The sadness is around the transfer of something they’ve worked hard to build up, that I’m sure would not go down well,’’ he said.

Catholic Care was established in the diocese in 1992 to care for the region’s elderly.

The decision to largely withdraw from aged care was first considered several years ago, in part because of an expected expansion of aged-care services in the future, but also because of the increasing burden of the Catholic church’s child sex abuse crisis on the diocese.

‘‘It’s not a decision we’ve taken lightly,’’ Bishop Malone said.

‘‘I’m concerned where the diocese might be in terms of aged-care delivery in a couple of years given the current commitment, and the knowledge that that commitment is only going to increase in the future.

‘‘I’ve got to ask myself the question, is this the sort of area the diocese needs to be in when there are specialist aged-care providers within the church who can take on the role.’’

Southern Cross Homes and the Little Company of Mary are believed to have been asked for expressions of interest.

Settlement payments to victims of Maitland-Newcastle diocese paedophile priests, including the highest known Australian payout of $2million to a victim of Vince Ryan, and settlement payouts to more than 40 victims of the recently jailed John Denham, have taken their toll on the diocese.

While total payments of more than $6million to Ryan’s victims were largely covered by insurance, along with payments to victims of other priests including Jim Fletcher, more recent cases including John Denham and Denis McAlinden have largely been carried by the diocese.

‘‘If it can be shown there was some prior knowledge [by the diocese] of offending, they [insurers] don’t pay,’’ Bishop Malone said.

‘‘Some of it [settlements to victims] is certainly diocesan money.’’

The diocese has been insured by Catholic Church Insurance since the mid-1980s.

Bishop Malone said the settlements to victims, and fears of more in the future, did not drive the decision to withdraw from aged services.

‘‘It hasn’t forced the issue, but it’s certainly a factor,’’ he said.

‘‘The diocese has had to face its responsibilities in this area, and that has been substantial.

‘‘These payments have hurt us. No risk about that.’’

The diocese was ‘‘about two-thirds of the way through’’ settlements with 41 victims of John Denham. The Newcastle Herald is aware of further claims by more Denham victims.

The diocese has made a substantial payment to a victim of Catholic teacher Tony Bambach, whose sexual abuse of young boys, and prior convictions, was known to senior clergy for many years as he worked in Maitland-Newcastle Catholic schools before his arrest for more offences.

Another Bambach victim from St Joseph’s Primary at East Maitland is suing the diocese.

Maitland-Newcastle has made individual compensation payments of up to $170,000 to victims of Denis McAlinden. The Herald is aware of further McAlinden claimants.

Bishop Malone said withdrawal from aged services was ‘‘not a hedge against a further mass of payments’’, but in a statement on Wednesday he noted it would ‘‘increase the long-term financial stability of the diocese’’.

Aged-care residents ‘‘would experience little noticeable change” in the event of an ownership change, he said.

He expected most employees to ‘‘transition smoothly to any new owner’’, but acknowledged staff concerns.

‘‘We will make every effort to ensure that if any redundancies prove necessary, staff will receive their full statutory entitlements,’’ Bishop Malone said.

The social services arm of Catholic Care, including services such as foster care, counselling, child, youth and disability services, will be retained and operated by the diocese.

Community aged-care services, including respite services, may also be retained depending on negotiations with the three providers.


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