Catholic Church Insurance silent on Marist Brothers $9 million payout row

By David Ellery
WA Today
July 12, 2014

The Catholic Church Insurance company CCI is staying mum on whether or not it will try to recover almost $9 million that may have been wrongly paid out on behalf of the Marist Brothers.

The payments, made to Canberra victims of serial sex abusers “Kostka” John Chute and Gregory Sutton, might not have been made if CCI had been told the Marist Brothers had known for decades that the men were paedophiles and did nothing to remove them from contact with children.

In 2008 senior members of the order took advice from their lawyers on how to prevent CCI from learning Chute had been offending as early as 1960.

Details on how both the Marist Brothers and CCI responded to the abuse of dozens of children in the ACT over many decades by Sutton and Chute were revealed at the Canberra hearings of the Royal Commission into Institutional Responses to Child Sexual Abuse last month.

Francis Sullivan, the Canberra-based CEO of the church’s Truth, Justice and Healing Council, sat through the hearings.

He said he had not previously been aware the order and its lawyers had discussed how to keep Kostka Chute’s offending history secret from its insurers.

“I think that certainly surprised me when I heard that, no question,” he said.

The commission was told the Marist Brothers had shipped Gregory Sutton out of Australia within days of the start of a police investigation into his misconduct and that active measures intended to prevent CCI investigators from discovering information that may have caused the company to deny liability were discussed by the order and its legal team.

A commission spokesman declined to comment on whether or not these concerns, which may constitute breaches of the law, had been referred to the police or other authorities for investigation.

“The Commission may refer information to police or other authorities,” Fairfax was told.

“Referrals are made as and when appropriate and are not subject to reporting time frames. The Commission cannot comment on its referrals or any resulting police investigations.”

The Commission has referred more than 160 matters to police to date.

According to the Insurance Council of Australia neither CCI or any other insurance company is obligated to attempt to recover money paid out as a result of deceptive or fraudulent conduct.

“It is a commercial matter for each insurer as to how it conducts its fraud investigations and whether it seeks recoveries in accordance with the law,” a spokesperson said.

Following Chute’s conviction, $6.84 million was paid out to former Marist College Canberra students who had been abused by him.

A further $1.82 million was paid out to students who had been abused by Sutton.

It is now known, as a result of the work of the Royal Commission, that while the order did not remove Chute from the classroom until the early 1990s, its senior leadership had been aware he was a child abuser as early as 1960.

Sutton, who was dispatched to Canada on three days' notice following the commencement of a police investigation in the late 1980s, was suspected of being a sexual predator as early as 1974.

A succession of senior Marist leaders shunted both men from school to school when problems surfaced, never warning their new principals either of them had a problem and needed to be closely supervised.

Peter Rush, the chief executive officer of Catholic Church Insurance, refused to answer questions about whether or not the company would be seeking to recover the money it had paid, if the failure by the Marist Brothers to disclose the full history of Chute and Sutton could be a criminal offence, or if claimants such as the Marist Brothers received special consideration from the company which is owned by the Catholic Church.

When asked to put that refusal in writing he said: “That is our response, there is no point in my doing so”.

Mr Rush said the issues raised were matters “between CCI and our client”.

He has previously stated CCI is “a public company that meets the standards of operation and solvency required by Australian legislation and is regulated by the Australian Prudential Regulation Authority”.




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