Report on the Independent Assessment of Claims Against Telstra

8/3/2019 Report on the Independent Assessment of Claims Against Telstra

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~ ~ ~ Australian Government

Department ofCommunications,fnfortrultion Technology an d the Arts

MINISTER FOR COMMUNICATIONS,INFORMATION TECHNOLOGY A.J\iD TH E ARTS

Minute No:M2006/0359

cc: Minister's Office, Secretary, Dep Sec Corruns, CGM TEL, GM CCB, GM EIBSUBJECT: Report on the Independent Assessment of ClaimsAgainst TelstraTIMING: Early consideration is recommended.P - . ~ O M M E N D A T I O N / I S S U E : ,.,ftyou

note the attached information; approve the draft re12ort al Attachment A; and agree to write to Telsha and to each of thec1airnants, proVIdm the EXecufivt!'Summ ofiliere n i l i ~ ~ ~ assessment(s).I Not Approved~ ~ d I Not AgreedLEN COONAN. . ~ ; . ; ...... / 2006

KEY , INTS: i l f f ~ e - "'u requested the Depa;;;;;zt to JJ'nduct an assessment of e tatus ofsting disputes between Telstra and its current or former cus omers orntractors, and to advise you of the status of those disputes by 31 March

--9dE or as soon as practicable thereafter: - - - - - - - .rt'he report at Attachment A has been prepared in accordance with your>quest and addresses the terms of reference you approved. I t includes areport on each of the nine claimants who elected to participate in theassessment and an Executive Summaiy, providing an o_verview of.theproc and outcomes.

ease of relevantparts of the report to the claimants is expected by themand non-release would attract criticism. However, release may alsogenerate criticism, to the extent that claimants consider the report doesnot assist them. SIGNAT URE :NAME:BRANCH/DIVISION:DATE:

CONTACT OFFICER:TEL:

~ iz FormanRegional Communications Policy, Telecommunications:LA- April 2006

David Lever6271 1502

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http://www.badapples.com.au/http://www.badapples.com.au/


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ADDITIONAL INFORMATION:BACKGROUNDIn response to representations from Senator Barnaby Joyce, you agreed toappoint an independent assessor to review the slalus of oulslautliug dain1sagainst Telstra.Briefing was provided to you (M2oos/1395 and M2005/1466 refer)identifying the risks to the Commonwealth from the proposed independentassessment process, and proposing measures to minimise the risk. Yousubsequently agreed (M2005/1664) to a process by which these risks could bemitigated via an assessment constrained to focus on due process rather thanthe merits of any party's claims. The Department was identified as the mostappropriate body to undertake the assessment.The report at Attachment A has been prepared in accordance with yourundertaking. It addresses the terms of reference for the review that youagreed. Reports are provided on each of the nine individual assessments andan Executive Summary, providing an overview of the assessments, has alsobeen prepared.A high level Steering Group, comprising the Deputy SecretaryCommunications, Chief General 1v1anager Telecommunications, and GeneralManager TelecommuniCations Competition and Consumer, oversighted theassessment.The ClaimantsSenator Joyce's office emailed a list of 22 persons who had approached him toseek his assistance. They included six of the original Casualties of Telstra(CoTs) or CoTs-like cases, eleven small business customers ofTelstra who arenot CoTs but have subsequently bad disputes with Telstra, and five ex-Telstracontractors from Queensland.The cases referred by Senator Joyce were:

four 'original' CoTs);subsequent CoTs-like cases1994 report); S.4\



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3On 22 December 2005, the Department sent letters to each of the claimantsnamed by Senator Joyce. The letters provided information on the assessmentprocess, including the terms of reference, and requested that claimants notifythe Department by 3 February 2006 if they wished their cases to be assessedas part of the process. The lettPr fllso included important disclaimers tominimise the risk of claims against the Commonwealth. A copy of the formletter sent to claimants by the Department is at Attachment B.The Department received notification from the following claimants:

sequently withdrew from the assessmentprocess on 24 February 2006 .Most of the remaining claimants jointly wrote to you to advise that they wouldnot participate in L ~ e assessment process because they considered theDepartment not to be independent of the parties, and the terms of referencenot to accord with those they had previously suggested. These claimantsessentially sought a 'commercial loss assessment' that would have involved anassessment of the strengths of the claimants' positions, and may have givenrise to recommendations concerning compensation.This is discussed in more detail below.Information sought by the DepartmentOn acceptance by claimants of the invitation to join the assessment process,the Department sought information from each claimant (or authorisedrepresentative) and Telstra in relation to the following: the claim (a brief description of the claimant's dispute with Telstra and theoutcome he or she had sought); a description ofTelstra's response to the claim, including any action takenby the company; compensation the claimant received (if any) and, if applicable, theconditions that applied to that compensation; any dispute resolution mechanisms used or considered, and the result ofthose processes; and a brief description of the current status of the dispute, including whetherthere are any Court proceedings pending.

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4In addition, Telstra was asked to provide information detailing its currentposition with respect to each claim.As appropriate, information was also obtained from existing Departmentalrecords, including correspondence from the claimants, and from theTelecommunications Industry Ombudsman ('1'10), the AustralianCommunications and Media Authority (ACMA) and the AustralianCompetition and Consumer Commission (ACCC).DISCUSSIONGeneral conclusionsThe majority of claimants generally appear to be aware of their options withinthe existing telecommunications dispute resolution framework, althoughsome have not utilised all alternatives for various reasons. For example, whileprivate legal action remains an option for consideration by claimants, anumber of claimants have not pursued this course for financial reasons.The two CoTs claimants continue to seek 5.4\reopening of their cases. a1man prevw their disputes againstTelstra arbitrated via the Fast Track Arbitration Process (FrAP) administeredby the TIO from 1994, with proceedings concluded in each claimant 's favour,but c1aitn that the process was flawed. Further information on the specifics ofeach claimant's case is detailed in Attachment C.A copy ofTelstra's response to the Department's request for information is atAttachment D. Telstra has detailed its position wiih respect to each of thedisputes.Telstra advised that it regards three of the claims S-4 'as finally resolved, and it considers the remainingclaimants with unresolved claims have not demonstrated any substance totheir claims or availed themselves of all available or appropriate disputeresolution mechanisms. Telstra considers that in cases where claimants andTelstra are unable to reach a resolution, despite Telstra's best efforts to do so,it is generally appropriate for these disputes to be subject to courtproceedings.Structure of the reportThe report consists of: an 'Executive Summary', which provides a summary of the assessmentprocedure and the Department's findings, but does not includeinformation about individual cases; and reports on the nine individual cases.



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5Each report on individual cases includes a section on 'potential disputeresolution mechanisms available', which includes comments on the use of orjurisdiction of the TIO, and the availability of or recourse made to the Court, c ; y , c ; t ~ m . I t also includes a section on 'other avenues for consideration', whichrelates to recourse to or availability of assistance from state or terri lory fairtrading agencies, the ACCC and ACMA While these bodies may not formallybe regarded as dispute resolution mechanisms, their functions and powers arerelevant in the case of some of the claimants.Independence of DCITA as assessorAround half of the claimants named by Senator Joyce refused to participate inthe assessment process because they considered the Department not to beindependent of the arties, and the terms of reference not to accord withthose sought. has written a number of1etters to you along theselines, purporting to speak also for other claimants . Claims have also beenmade of a conflict of interest due to the Government's position as Telstra 'smajor shareholder, with allegations that the assessment process is 'a productof that inherent conflict of interest'. These claimants consider that for theassessment process to be independent, it must be exclusive of agencies,advisors and persons previously involved in the CoTs cases, including ACMA,the TIO and the Department. These concerns were discussed in detail inB2oos/00059Senator Joyce has previously asked you to reconsider your decision to appointthe Department as assessor and instead appoint an external assessor. Inresponse, you advised Senator Joyce that you were not aware of anyinformation or correspondence detailing the past involvement of theDepartment with the claimants' cases that demonstrates the Department hasnot acted independently and impartially or that would impede its ability toconduct an assessment on 'due process'. You also re-iterated to Senator Joycethat while a small number of Departmental officers have some knowledge ofthe CoTs cases over the years and come to this process with some contextualknowledge of the cases; they have no pre.:.conceptions or concluded views asto the matters covered by the Terms of Reference.Further, you have publicly indicated that you consider the Department to bethe appropriate body to conduct the assessment, particularly given the focuson 'due process' rather than an examination of the merits of any party'sclaims.Oversight of the assessment process by a high-level Steering Group, comprising key members of the Department's senior executive was anadditional safeguard to ensure the assessment's impartiality. The SteeringGroup was kept regularly appraised with respect to the assessment process,



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6and met formally on 15 March, 13 April and 19 April 2006 to consider issuesrelated to the process.Stakeholder views and likely reactionsWhi1e the individual claimants are eagerly awaiting the release uf the report,misunderstanding about the scope of the assessment and unrealisticexpectations with respect to its outcomes make criticism of the report bythese parties highly likely. Most of the claimants involved in the assessmentprocess are likely to claim that the assessment report does not materiallyassist them.

in particular, has submitted considerable material to theassessment team and has expressed dissatisfaction with the Department'sprocess.representing the former Telstra contractors, appears to havem1su stoo e intent of the assessment process and does not accept theGovernment's denial of his claim of a settlement having been agreed to atGovernment Executive level.

The other persons who did not elect to join the process because of concernsabout the independence of the Department and the terms of reference arelikely to continue to criticise the process and lobby members of Parliament.We note that the terms of reference for the assessment were clearlycommunicated to claimants prior to their acceptance. The letter sent toclaimants on 22 December 2005 made clear that the assessment would belimited to determining whether all dispute resolution options have beenexplored, and would not extend to an evaluation of the merits of claims. Theletter also contained appropriate disclaimers to minimise financial and legalrisks to the Commonwealth.Next Steps

You will now need to decide whether to make the report's findings available tothe individual claimants, Telstra and other parties.A number of claimants have written to the Department, seeking access to thereport and its findings has also submitted requests under the 5.4-\Freedom of nformation Act 1982 on behalf of her clients with respect todocuments and records pertaining to the assessment process, the report andits findings.The Government may be strongly criticised for not releasing any of the reportas claimants have, in some cases, devoted considerable resources to theprocess. We suggest, however, that public release of the report is unnecessary



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7as no public statement has been made about the independent assessmentprocess. Public release may encourage media criticism that the process hasbeen ineffective.Under the PrivacyAct 1988, you could not disclose the individual reports toany third party ' I A ~ t h o u t the agreement of the claimant. TI1is would not bepracticable and we recommend these reports be provided only to therespective claimant and Telstra.You could also provide the Executive Summary to each claimant and Telstra,as it has been drafted so as not to include personal information and includesinformation about avenues for dispute resolution and the assessment processthat is not included in individual reports and may be of interest.I f you agree, we will provide for your consideration letters to each claimant,attaching a copy of the Executive Summary and the chapter of the reportrelevant to their dispute with Telstra. We will also provide a letter to Telstraattaching the entire report.

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REPORT ON THE INDEPENDE\TT ASSESSlVIENTOF CLAIMS AGAINST TELSTRA

DEPARTME!\iT OF COMMUNICATIONS, lNFOlli'VlATION TECH110LOGY A . ~ D THE ARTS

April2oo6

EXECUTIVE SUMMARY

This report pro-v'ides information to the Minister for Communications,Information Technology and the Arts concerning the processes and outcomesof the independent assessment of certain claims against Telstra CorporationLimited (Telstra) undertaken by the Department of Communications,Inforn1ation Technology and the Arts (the Department) .

This report has been prepared in accordance with the Minister's request forthe Department to undertake an assessment of existing disputes betweenTelstra and its current or former customers or contractors.

Background

On 22 December 2005 , the Department sent letters to each of the claimantson the list provided by the office of Senator Barnaby Joyce. The lettersprovided information on the assessment process and requested that claimantsnotify the Department by 3 February 2006 if they wished their cases to beexamined as part of the assessment process. A copy of the letter is atAttachment A.

Ten claimants initially accepted the Department's offer. One claimantsubsequently withdrew from the assessment process.



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The findings or comments made in this report should not be taken as theprovisjon of legal advice or to have any legal effect.

Mechanisms available to claimants

Avenues of assjstance available to consumers in the telecommunicationssector include the Telecommunications Industry Ombudsman (TIO), theAustralian Communications and Media Authority (ACMA), the AustralianCompetition and Consumer Commission (ACCC) and state or territory fairtrading agencies. Consumers in the telecommunications sector may also beable to bring legal proceedings in the Courts to enforce their rights or resolvetheir grievances with their telecommunications providers.

The TIO was established in 1994 as a free service to residential and smal1business consumers who have been unable to resolve a complaint directlywith their telephone company or internet service provider. The cost of thescheme is borne by these companies, which are required by law to be part of,and pay for the scheme. The TIO is independent of government and industryinterests.

The TIO has a wide jurisdiction. Complaints it is authorised to investigateinclude those about the standard telephone service, mobile services, Internetaccess, payphones, delays in telephone connections, printed and electronicWhite Pages, fault repair, privacy, land access, breaches of the CustomerJ Service Guarantee and industry codes of practice.

The TIO will investigate complaints where the circumstances causing thecomplaint became known in the n-ve1ve months prior to the complaint beingmade. The TI 0 has discretion to extend the time limit a further 12 months incertain cases.

The TIO may make binding directions, up to a cost limit of $1o,ooo, that thecompany provide a service or services, does not impose a charge, amends acharge, supplies certain goods or services or carries out or ceases some action.I t may alternatively determine that the company pay compensation to theconsumer . The TIO also has a power to make a recommendation to atelephone company or service provider to compensate or take some other

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action up to a limit of $so,ooo. Recommendations are not binding on servicepro-viders.

Telecommunications service providers an:- .sllhjPrt tn tPlPcommunicationslegislation, including the TelecommunicationsAct 1997 and theTelecommunications (Consumer Protection and Service Standards) Act1999: and subordinate legislation, including Determinations, made under thislegislation. They are also bound by various industry codes of practice andindustry standards. Complaints or concerns about possible breaches of thetelecommunications legislation may be lodged with ACMA, which hasresponsibility for enforcement.

) ACMA also has certain functions and powers under the telecommunicationslegislation that may be relevant to allegations of poor service by Telstra. Forexample, ACNU\ may conduct investigations into certain matters relating totelecommunications and also has a function of reporting to and advising theMinister about matters affecting consumers of carriage services.

Telecommunications service providers are also subject to the consumerprotection provisions in Parts IVA and V of the Trade Practices Act 1974.Consumers who consider that a service provider has breached theseprovisions could consider contacting the ACCC, which administers the TradePractices Act. The ACCC has, however, advised that its consumer protectionfocus is generally on national issues and those localised issues that have widepublic interest implications, with priority given to cases where broad) economic and consumer detriment is evident. The ACCC advised that it doesnot act on behalf of individual complainants but rather determines itspriorities and allocates its resources for the benefit of the Australiancommunity in general. The ACCC cannot provide legal advice or mediatebetween individuals and the suppliers or acquirers of goods and services.

The ACCC also administers Part IV of the Trade Practices Act, dealing withrestrictive trade practices. These provisions may also be relevant in the caseof the claimants who have been former contractors of Telstra.

State or territory fair trading agencies administer state or territory legislationconcerning fairness of business practices. This legislation may also berelevant to the extent that it extends to telecommunications services.

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In addition to the above mechanisms, a person with an unresolved dispute orclaim may have remedies available through the Court system, for example forbreach of contract. However, this would depend on the individualcircumstances in each case and before taking any Court action, it is advisableto seek independent legal advice.

Assessmentmethodology

The assessment was conducted by staff of the Telecommunications ConsumerPolicy Section of the Department.

) A high-level Executive Steering Group, comprising the Deputy SecretaryCommunications, Chief General Manager Telecommunications and GeneralManager Telecommunications Con1petition and Consumer, oversighted theassessment process.

Upon receipt of notification from each claimant indicating acceptance of theDepartment's offer, the Department provided written confirmation to theclaimant of the inclusion of their case in the assessment. The Departmentthen commenced information searches from relevant sources, andidentification and examination of existing Departmental records.

1 Information was sought and obtained from various parties as relevant to eachcase. These parties included the respective claimant(s) or their authorisedrepresentative, Telstra, the TIO, ACCC and ACMA.

Issues Exan1ined in Assessing Cases

ClaimA description of what the claimant alleges to have happened and theoutcome(s) sought by the claimant.

Information provider



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A description of the sources from whom information to assist in theDepartment's examination of issues relevant to each case was sought andobtained.

Telstra responseA description of Telstra's response to the claim, including any action taken.

Telstra's current positionA description ofTelstra's current position in response to the claim, based onadvice obtained from Telstra.

Compensation receivedInformation concerning any compensation received by the claimant fromTelstra, including the amount of that compensation and a description of anyterms on which it was paid.

Dispute resolution mechanism(s) used I consideredA description of any dispute resolution mechanisms used or considered, andif so the outcomes of those processes.

Status ofclaimA description of where the claim currently stands, including whether there areany Court proceedings or other dispute resolution mechanisms pending.

Potential dispute resolution mechanisms availableA description of any dispute resolution mechanisms that remain open forconsideration by the claimant. Issues considered included whether the natureof the claim fell within the jurisdiction of the relevant dispute resolutionmechanism.

Other avenues for consideration

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A description of any other avenues not normally regarded as disputeresolution mechanisms that may be relevant for claimants to consider inattempting to resolve their concerns.

Findings

The Department notes that there were broadly two types of dispute: betweenTelstra and small business customer; and between Telstra and contractor. Inone case the small business customer was itself a telecommunicationsprovider.

l Potential dispute resolution mechanisms or avenues for redress varyaccording to the type of dispute. For example, the TIO may investigatedisputes between telecommunications providers and custo1ners, where thosecustomers are either individuals or small businesses. However, the TIO doesnot have jurisdiction over "intra-industry" matters. This means that the TIOdoes not have jurisdiction in the case of the s1nal1 business customer that wasitself a telecommunications provider. The ACCC is more likely to be ofassistance where there is a potential breach of the Trade Practices Act that hasnationwide implications. ACMA is more likely to investigate where it appearsconsumers are being adversely affected by a systemic issue or there is anapparent breach of legislation.

The Department found that claimants generally appear to have availedthemselves of the dispute resolution service afforded by the TIO, where theTIO has jurisdiction with respect to their claim.

Similarly, claimants have generally availed themselves of the ACCC's advice orother assistance where the ACCC is the most relevant agency to the claimant'sconcern.

None of the claimants appear to have sought assistance from state or territoryfair trading bodies and only one of the claimants has raised concerns orlodged a complaint with ACMA or its predecessor, the AustralianCommunications Authority.

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The Department considers that it may be open to some claimants to considerinitiating contact vvith , or re-contacting, one or more of the organisationsreferred to above. Comment or suggestion in this regard is provided in thereports on individual cases. If claimants wish to explore the mechanisms oravenues identified, they could contact the relevant organisation to ascertainwhether 1t is able to investigate the dal1us aud atten1pt to resolve concerns,subject to any jurisdictional or statutory considerations. The Department isunable to comment on the likelihood of recourse to the relevant organisationresulting in what the claimant might regard as a satisfactory outcome.

If claimants are considering commencing legal proceedings against Telstra,they should seek legal advice about the prospects of making a successful claimagainst Telstra and the risks associated with the commencement of legalproceedings. The findings or comments made in this report should not be

) taken as the provision of legal advice or to have any legal effect.

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The Department notes that it is ultimately up to the claimants and Telstra todetermine their own courses of action.

Before embarking on any course of action in an attempt to resolve theirdispute with Telstra, claimants n1ay wish to seek independent legal advice.

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Original 'Casualty ofTelecom/Telstra' (CoT)

The findings or comments made in this report should not be taken as t.heprovision of legal advice or to have any legal effect. The Department acceptsno liability, however arising, in relation to any findings, action or commentsmade during the assessment process.

CLAIM

The clairnant describes telecommunications failures from 1988 including:

billing faults with the oo8j18oo line and fax services caused by shortduration calls and post dialling delay faults; and technical faults, including call drop out, no ring received, false busy signalto callers, 'no longer connected' recorded voice announcements andcrossed lines.The claimant contends that these problems resulted in significant businessand financial losses, and led to ongoing health problems due to associatedstress. The claimant also attributes his failure to sell the business in 1995 tothe faults.

The claimant is seeking to have his case further investigated. He alleges theFast Track Arbitration Process (FTAP) ad1ninistered by theTelecommunications Industry Ombudsrnan (TIO) was flawed. The claimantasserts that the TIO-appointed technical consultants (DMR & Lanes) were notgiven adequate time to complete their investigations and, as a result, evidenceused in the arbitration process was misleading and inaccurate. The claimantfurther asserts that false information was provided by Telstra during thearbitration process.

The claimant also claims that the billing faults were not investigated oraddressed by the .A.rbitrator during the process.

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The c1aimant claims that the faults associated with this complaint continuedafter the TIO had deemed the arbitration process to be complete.

The c1aimant seeks re-assessHu'ml of the circumstances surrounding hisarbitration, and seeks further financial compensation.

INFORMATION PROVIDER(S)

Information was sought and obtained from the claimant and from Telstra.Information was also obtained from existing Departmental records.

The follovving information was received from the claimant during the periodof the assessment process. Unless otherwise indicated, the correspondencewas addressed to officers of the Department. The claimant was advised thatmaterial provided after 17 March could not be considered.

2 February 2006Letter agreeing to participate in an Independent Commercial Assessmentprocess but expressing concern about the 'independence' of the proposedprocess to be undertaken by the Department. This letter also included thecopy of a fax sent from the Depart1nent to the TIO seeking advice on a likelytime-frame for finalising the claimant's claim of overcharging on his 1800number.

23 Februarv 2006Letter from the claimant seeking clarification of aspects of the IndependentAssessment process and outlining various aspects of his previous arbitration.Attached to this letter is a Statutory Declaration concerning the content of thedocumentation used during the arbitration process.

27 Februarv 2006

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Letter from the claimant outlining the reasons for his objection to theinclusion ofTelstra and the TIO in the Assessment process.

') I\1llrch ~ o o 6 Letter from the claimant accepting the Department's offer in its letter of22 December 2005 . The letter also contains information responding to theDepartment's request for information, namely a description of his claim andTelstra's r"esponse to the claim; compensation received and conditions appliedto that compensation; an outline of any dispute resolution mechanisms usedor considered; and a description of the current status of the claim.

3 lvlarch 2006Letter enclosing copy of postage registration for overnight mail sent 2 March2006 . This letter also requested that the claimant be informed of when hisformal submission and supporting documents needed to be delivered to theDepartment, as he intended to travel from Cape Bridgewater to Canberra todeliver them in person.

6 March 2006Two letters, marked 'Letter A' and 'Letter B'- Letter A clarified a statement made by the claimant in his earliercorrespondence of 2 March 2006 , regarding the compensation received by

the 'A' list of CoT claimants as a result of the Senate Working Party in1998.- Letter B provided additional information concerning aspects of theclaimant's earlier arbitration, and attaching a copy of the TIO's statementof 26 Septemer 1997 to the Senate Environment, Recreation,Communications and the Arts Reference Committee.

9 March 2006Letter to the Minister, concerning aspects of the claimant's earlier arbitration.

10 March 2006

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Letter concerning the scope of the assessment process and asking whetherevidence of unlawful acts relating to Telstra would be reported to theAttorney-General's Department. ,

11 March 2006Letter to the Minister, concerning issues raised by the claimant in his letter of10 March 2006 to the Department.

12 March 2006) Letter from the claimant, attaching copies of his letter of n March 2006 to theMinister, expanding on issues raised in his letter of 10 March 2006 , seekinge1.rpansion of the Terms of Reference, and requesting clarification on the typeof information applicable to the current Terms of Reference.

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16 March 2006Covering fax received With two letters (dated 16 March 2006 ) attached.- Letter responding to Department's request for clarification ofcompensation received by the clairnant from Telstra.- Letter explaining why the claimant considers that the Terms of Referencefor the Independent Assessment process are not wide enough. The letteralso includes two detailed exan1ples ofwhat the claimant considers to bethe 'unethical and unlawful events' that occurred during the arbitrationprocess.

16 :Niarch 2006Further letter from the claimant, attaching three sets of documents includinga chronology of events relating to an earlier document submitted by theclaimant. The claimant also lodged, by way of this letter, a complaint againstthe Department for not responding to the request for clarification containedin his letter of 12 March 2006 .

17 March 2006



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Email responding to the Department's query regarding payments that theclaimant received through the arbitration process in 1994.

18 I'v1arch 2006Email providing information additional to that advised on 17 :rviarch .

21 March 2006Three letters dated 18 March 2006 received by EA.rpress Post envelope (ref.BV1959254), labelled 'Letter One', 'Letter Two', and 'Letter Three' .

- Letter One relates to the deadline for submission of documents to theDepartment for the assessment process and the time he was given toprepare his submission. The letter also details the claimant's concernsregarding the conduct of Telstra during the arbitration.

- Letter Two details the claimant's concerns about "known false reporting byTelstra" and provides three examples. Enclosed with this letter, titled'Evidence Seven'_ is a Memorandum of Advice from- Letter Three provides further examples in support of letters one and two .

Enclosed with letter three are the Arbitrator's copy of proceduraldocuments, and a separate document that is Telstra's and the claimant'scopy of the procedural documents used in the arbitration. Also enclosedwas a Telstra file note from 1994 on the arbitration.) ?1 March 2006

Courier box of documents (Connote: JKDo0015, Order No: 815428178),despatched on 17 March 2006, received by the Department. This boxcontained a covering letter (dated 16 March 2006) and three large bundles ofdocuments labelled 'File Two', 'File Three', and 'File Four' . The claimantadvised in the covering letter that th ese documents are photocopied excerptsfrom the fourteen original files that he had proposed to deliver to theDepartment in person.

21 March 2006Letter of complaint to th e Minister about the 'unreasonable pressure appl iedby DCITA' in relation to timeframes for the supply of documentation.

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23 March 2006Email from the claimant advising that he will not forward any furthermaterial for consideration in the assessment, unless requested to do so by theDepartment.

?8 March 2006Email attaching a letter seeking the Department's advice as to whether afurther document would be accepted, despite the closure of the period forpro'V"ision of supporting material on 17 March 2006 .

29 March 2006) Email correcting a minor typographical error in the letter that was attached tothe email of 28 March 2006 .

?q March 2006Letter to the Minister regarding aspects of his earlier arbitration andattaching a copy of the claimant's letter of 28 March 2006 (corrected version).

31 March 2006Two letters received.Letter 1 dated 31 March 2006 regarding the terms of reference for theIndependent Assessment and arguing that a document drafted in 1994 by thearbitrator in his case be considered in the assessment.

Letter 2, mistakenly dated 31 April 2006 , regarding Mr Smith's concerns that,in the claim material submitted by Mr Smith, the Department had notuncovered any evidence of a perversion of the course of justice.

3 Apr i l2oo6Letter correcting a date error in Letter 2 dated 31 April 2006 that should havebeen 31 March 2 0 0 6 ~



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7April2oo6of an additional legal professional who had provided legaladvice to

9 April 9006Letter to the Minister and others, copying the Department, regarding MrSmith's concerns about a perversion of the course of justice during thearbitration of his claim in 1994 and 1995. Included wi.th this letter is a copy ofthe Resource Unit Technical Evaluation Report dated 30 April1995.

17 April 2006J Letter detailing the claim material submitted by Mr Smith that he believesclearly provides evidence of a perversion of the course of justice during thearbitration ofhis claim.

19 April 2006Letter to the Minister regarding his concerns that the assessment panel hadnot found evidence in his claim material indicating a perversion of the courseof justice.

This correspondence was addressed by responses from the Department or the) Minister's Office, where appropriate.

The Department found that much of the material provided by Mr Smith wasoutside of the scope of the assessment.

TELSTRA RESPONSE

The claimant alleges that from 1988 to 1992, Telstra refused to acknowledgethat there were any major problems with his phone system. The claimantstates that Telstra agreed to investigate his complaints after discussions withthe form er regulator, AUSTEL.



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The claimant states that during the AUSTEL investigations in September1992, Telstra pro-vided the claimant with two written guarantees that therewere no ongoing problems vvith his service.

Telstra submitted to the arbitration processes administered by the TlU.Further information is detailed under the "Dispute resolution mechanismsused/considered" section below.

TELSTRi\ CURRENT POSITION

Telstra has advised that it considers this claim to have been finally resolved.) See further details under the "Dispute resolution mechanismsused/considered" section below.

COMPENSATION RECEIVED

Telstra has advised that in accordance with the terms of an initial settlementagreement executed in December 1992, it paid the claimant $85,000 in finalsettlement of all claims to that date without any admission of liability.

Telstra has further advised that under the FTAP, Telstra was ordered to pay) the claimant $320,000 and to write off debts owed by the claimant to Telstratotalling $16,679. Telstra has advised that it con1plied with the bindingarbitration award. Telstra has advised that the claimant retained the $85,000paid under the previous settlement.

The claimant has confirmed that he received $320,000 in compensation. TheTIO also awarded an additional $1oo,ooo to the claimant for costs associatedwith his participation in the arbitration process. These funds were madeavailable by Telstra.

The original claim made by the claimant was for $3-459 million.

DISPUTE RESOLUTION MECHANISM(S) USED/ CONSIDERED

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Two formal dispute resolution mechanisms have been used by the claimant: AUSTEL Fast Track Settlen1ent Proposal (FTSP) signed in November 1992,which did not prod11eP (-) r.nndusive result for the claimant. AUSTEL Fast Track Arbitration Process (FTAP) signed April1994, whichwas completed with findings in favour of the claimant.

Telstra has advised that an initial settlement agreement was executed inDecember 1992 to settle all claims to that date vvi.th no admission of liabilityfrom Telstra.

Telstra has also advised that, in Apri11994, it submitted to the FTAPadministered by the TIO and conducted by Dr Gordon Hughes. Telstra hasadvised that the findings of this process were in the Claimant's favour (referdetails in 'Compensation received' section above)..

STATUS OF CLAIM

The claimant continues to seek the reopening of his case. The claimant hasadvised that he has prepared a writ, but has put its submission on holdpending the outcome of this assessment process.

/ Telstra has advised that it regards the claimant's claim as finally resolved.

Departmental records indicate that the TIO considers that he has completedhis tasks as the administrator in the claimant's dispute against Telstra, andthat the claims raised by the claimant have been investigated fully by thearbitrator during the arbitration process. The TIO considers that no newevidence has been provided to support a reassessment of the claimant's case.

POTENTIAL DISPUTE RESOLUTION MECHANISMS AVAILABLE

V\Thile the assessment is intended to identify whether any further disputeresolution processes may be available to the claimants and Telstra in order towww.badapples.com.au


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resolve their disputes, Telstra's response is ultimately a matter for thecompany to determine. Before embarking on any course of action in anattempt to resolve his dispute with Telstra, the claimant may wish to seek hisown independent legal advice. The findings or comments made in this reportshould not be taken as the provision of legal advice or to have any legal effect.

The claimant has previously had his dispute against Telstra comprehensivelyexamined by arbitration, under the administration of the TIO, with a rulingmade in his favour. The TIO considers that he has completed his tasks as theadministrator in the claimant's dispute against Telstra, and that the claimsraised by the claimant have been investigated fully by the arbitrator duringthe arbitration process. The TIO considers that no new evidence has beenprovided to support a reassessment of the claimant's case. Given this and thelong period since the arbitrator made his decision, there is no basis on which)the TIO would revisit this dispute. However, should the claimant h2.ve newissues of complaint that post-date the claims that were the subject of thearbitration, and which have not previously been examined by the TIO, theclaimant could consider re-contacting the TIO. I t would then be a matter forthe TIO to decide whether it is in a position to consider the matters, givenavailable evidence and jurisdictional limitations including timeframes.

The claimant could consider whether any of the complaint or disputeresolution mechanisms outlined below apply in his case. Should the claimantwish to explore these mechanisms, he could contact the relevant organisationto ascertain whether it is able to investigate his claims. Should the claimantwish to consider litigation against Telstra, he should seek his own legaladvice. It is ultimately up to claimants and Telstra to determine their o-vvn) courses of action and to come to a final resolution on individual disputes. TheCommonwealth does not undertake to provide compensation should disputesremain unresolved.

Legal proceedingsShould the claimant wish to consider legal action against Telstra, he shouldseek his o-vvn legal advice on how he may pursue this matter.

OTHER AVENUES FOR CONSIDERATION

State or territory fair trading agencies



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)

The claimant could consider contacting Consumer Affairs Victoria. Furtherinformation can be obtained by telephoning 1300 55 81 81 or fromhttp://vvvvvv.consumer.vic.gov.au.

Aust ralian Competition and Consumer Commission (ACCC)The claimant could consider contacting the Australian Competition andConsumer Commission (ACCC). However, the claimant should take intoaccount that the ACCC's consumer protection focus is generally on nationalissues and those localised issues that have wide public interest implications,with priority given to those cases where broad economic and consun1erdetriment is evident. It is noted that the ACCC does not act on behalf ofindividual complainants, but rather determines its priorities and allocates itsresources for the benefit of the Australian community in general. The ACCC) cannot provide legal advice, or mediate between individuals and the suppliersor acquirers of goods and services. Further information may be obtained bytelephoning the ACCC's Information Centre on 1300 302 502 or fromhttp://www.accc.gov.au.

i \ . u s t r ~ lian Communications and Media A.uthority (ACIVIA)The claimant could consider contacting the Australian Communications andMedia Authority (ACMA). However, he should take into account thedisinclination ofACM.i\ to investigate individual, rather than systemiccomplaints, particularly if no breach of the legislation is apparent, and thetime that has elapsed since the circumstances of his case became apparent.



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)

Original 'Casualty of Telecom/ Telstra' (CoT)

The findings or comments made in this report should not be taken as theprovision of legal advice or to have any legal effect. The Department acceptsno liability, however arising, in relation to any findings, action or commentsmade during the assessment process.

CLAJl\II

Telstra has advised that the faults alleged to have occurred t o the claimant'stelecornmunications service in the period 1985 to 1993 included: no ring received; false busy signal to callers; call cut offs; no dial tone; and noise on the line.The claimant contends that these faults vvith her telephone line, which wasconnected to the Mitchelton exchange in Queensland, resulted in significantbusiness losses an d led to the failure of her business.

The claim ant seeks compensation from Telstra for these losses . Telstra hasadvised that the claimant's original clairn for damages was for $1.8million .


Information was sought and obtained from Telstra and fron1 existingDepartmental records.

Information was sought from the claimant but was unable to be obtained.The claimant has ad-vised that the relevant records are h eld by her forr.t'l.e r

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solicitor, and that the claimant has been unable to securereturn of her records from

The Department advised the claimant that it would not be appropriate for theDepartment to request to provide those records.

TELSTRA RESPONSE

Telstra submitted to the arbitration processes administered by theTelecommunications Industry Ombudsman (TIO). Further information isdetailed under the "Dispute resolution mechanisms used/considered" sectionbelow.

TELSTRA CURRENT POSITION

Telstra has advised that it regards the dispute as finally resolved, both byarbitration and by the claimant's subsequent unsuccessful challenges of thearbitrator's award via Court proceedings (refer "Dispute resolutionmechanisms used/considered" section below).

COMPENSATION RECEIVED)

Telstra has advised that it has made a number of payments to the claimant,namely:

DISPUTE RESOLUTION MECHANISM(S) USED/ CONSIDERED

)J

SAl

/ !www.badapples.com.au


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The claimant's dispute vvith Telstra was arbitrated under the AUSTEL FastTrack Arbitration Process (FTAP) administered by the TIO. The processconcluded in the claimant's favour, with an . s_ 4-lin June 1996.

Telstra has advised that the claimant subsequently commenced proceedingsin the Federal Court and later in the Supreme Court of Victoria seeking to setaside the arbitration award. Telstra has advised that the outcomes of thoseproceedings were: Federal Court (commenced June 2002) - the claim was dismissed inAugust 2002 because the claimant's company was deregistered and, as a

result, not entitled to bring the action; and Victorian Supreme Court (commencedApril2003)- the claim was struckout in late 2004, with costs awarded in Telstra's favour.

STATUS OF CLAIM

The claimant's dispute has been the subject of a binding arbitration withfindings handed down in the claimant's favour. Departmental recordsindicate that the TIO considers that he has completed his tasks as theadministrator in the claimant's dispute against Telstra, and that the claimsraised by the claimant have been investigated fully by the arbitrator duringthe arbitration process. The TIO considers that no new evidence has beenprovided to support a reassessment of the claimant's case.

Legal proceedings commenced by the claimant in relation to the arbitrationdecision made have been dismissed by State and Federal Courts.

Telstra has advised that it regards the dispute as finally resolved (refer"Telstra current position" section above). Telstra has further advised that ithas not enforced the Victorian Supreme Court's costs order, in view of thehardship it would cause the claimant.



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POTENTIAL DISPUTE RESOLUTION MECHANISlVIS AVAILABLE

The claimant has previously had her dispute against Telstra comprehensivelyexarnlued by an arbitration, unrlPr the administration of the TIO, vvith aruling made in her favour. The TIO considers that he has completed his Lasksas the administrator in the claimant's dispute against Telstra, and that theclaims raised by the claimant have been investigated fully by the arbitratorduring the arbitration process. The TIO considers that no new evidence hasbeen provided to support a reassessment of the claimant's case. Given thisand the lengthy period of time elapsed since the arbitrator made his decision,there is no basis on which the TIO would revisit this dispute. However,should the claimant have new issues of complaint that post date the claims:hat were the subject of the arbitration, and which have not previouslybeen examined by t . ~ e TIO, the claimant could consider re-contacting theTIO. It would then be a matter for the TIO to decide whether it is in aposition to consider the matters, given available evidence and jurisdictionallimitations including timeframes .

While the assessment is intended to identify whether any further disputeresolution processes may be available to the claimants and Telstra in order toresolve their disputes, Telstra's response is ultimately a matter for thecompany to determine. Before embarking on any course of action in anattempt to resolve her dispute with Telstra, the claimant may wish to seek herown independent legal advice. The findings or comments made in this reportshould not be taken as the provision of legal advice or to have any legal effect.

The claimant could consider whether any of the complaint or disputeresolution mechanisms outlined below apply in her case. Should the claimantwish to explore these mechanisms, she could contact the relevantorganisation to ascertain whether it is able to investigate her claims. Shouldthe claimant vvish to consider litigation against Telstra, she should seek herown legal advice. It is ultimately up to the claimant and Telstra to determinetheir own courses of action and to come to a final resolution on individualdisputes. The Commonwealth does not undertake to provide compensationshould disputes remain unresolved.

Legal proceedingsI f he claimant -vvished to consider further legal action agairist Telstra, to theextent that these issues have not already been considered by a court, sheshould seek her own legal advice.

Jo



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)

OTHER AVENUES FOR CONSIDERATION

State or territo:y fair trading agenciesThe claimant could consider contacting the Queensland Office of FairTrading. Further information can be obtained by telephoning telephoning 1313 04 or from http: /1-vvww.fairtrading.qld.gov.au /oft/oftweb.nsf.

Australian Competition and Consumer Commission (ACCC)The claimant could consider contacting the Australian Competition andConsumer Commission (ACCC). However, the clai_mant should take intoaccount that the ACCC's consumer protection focus is generally on nationalissues and those localised issues that have wide public interest implications,with pr iority given to those cases where broad economic and consumerdetriment is evident. It is noted that the ACCC does not act on behalf ofindividual complainants) but rather determines its priorities and allocates itsresources for the benefit of the Aushalian community in general. The ACCCcannot provide legal ad-vice , or mediate between individuals and the suppliersor acquirers of goods and services. Further information may be obtained bytelephoning the ACCC's Information Centre on 1300 302 502 or fromhttp:/ /vvww.accc.gov.au.

Australian Communications and Media Authority (ACMA)The claimant could consider contacting the Australian Communications andMedia Authority (ACMA). However, she should take into account thedisinclination of ACMA to investigate individual, rather than systemiccomplaints, particularly if no breach of the legislation is apparent , and thetime that has elapsed since the circumstances of her case became apparent .



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'Other , ~ m r ~ l l Business Customer'

The findings or comments made in this report should not be taken as theprovision of legal advice or to have any legal effect. The Department acceptsno liability, however arising, in relation to any findings, action or cornmentsmade during the assessment process.

~ J \ I M )

The claimant operated two Internet businesses in Queensland between 2000and 2002 . The claimant contends that the services provided to him by Telstrawere inadequate for the purposes they were intended, resulting in failure ofboth the claimant's Beenleigh and Southport Internet businesses and thefailure of a subsequent business intended to be financed through the sale ofthe Beenleigh and Southport businesses.

The claimant alleges negligence on the part of Telstra, and submits thefollowing in support of his claims:) that, at the outset, he informed Telstra of the nature of his business, andthe business' technical and service requirements; and in response to complaints to Telstra on numerous occasions regarding

drop outs, downloading and other errors, he was continually assured byTelstra technicians that the faults lay with his equipment. This was despitesubsequent advice from Lucent Technologies that the 64kb connectioncould not handle the work that was required.The claimant seeks financial recompense for losses incurred and for projectedloss of future earnings. He has asserted in correspondence with Telstra that~ f r o m the failure of his Internet businesses were approximately- Loss of projected earnings totalling approximately was claimed from the failure to launch the contemplated business intended tobe financed through the sale of the other businesses.

S.4-l



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Information was sought and obtained from the claimant, the claimant'sauthnrisP.rl representative Telstra, the TelecomrnunicationsIndustry Ombudsman (TIO), and existing records held by the De!Jartlnent.

TELS'TRA RESPONSE

Telstra has advised that its internal claim procedure includes inviting asomplainant to explain the basis of their Claims and the losses which theyassert flowed as a result of Telstra's alleged product or service failure.' )

)

Telstra held a meeting with the claimant in June 2002 .to attempt to resolvethe claimant's concerns, including technical analysis of the asserted failure ofTelstra's services and dialogue on adequacy of the substantiation of lossesclaimed. Telstra claims that a technician nominated by the claimant failed toattend a meeting held the next day . Telstra has advised that it renewed itsoffer to organise a further meeting with the claimant and/or his technician,but this offer was not taken up by the claimant.

Telstra considers that, where possible, it has investigated the claimant'scomplaints and found them to be baseless.

TELSTRACURRENT POSITION

Telstra has advised that the Victorian Supreme Court previously suggestedthat the claimant rethink the claim and advance an offer which demonstratesan adjustment to previous demands. Telstra has advised that a reduced claimhas not been advanced by the claimant by way of settlement proposal orotherwise.

Telstra advised the Department on 17 February 2006 that it considered thatthe positions of the two parties remain so fundamentally different (both as tothe technical basis of the claim and the losses which allegedly flowed) th at thejudicial process would deliver the most efficient outcome to this claim.

33

5.41



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Nevertheless, on 15 March 2006 Telstra vvrote to the claimant vvith an offer tonot pursue the Court-imposed costs orders made to date, and to waive theclaimant's outstanding accounts of approximately in return for 5 .4-discontinuation of the present legal proceedings. The claimant's solicitorwrote to Telstra on 20 March 2006 , rejecting Telstra's offer.


None.

D ISPUTE RESOLUTION MECHANISM(S) USED / CONSIDERED

Telstra has advised that its complaint management approach is to, wherepossible, resolve claims informally through its internal claim procedure.Telstra has advised that a meeting was held vvith the claimant in June 2002 .The claimant contends that Telstra representatives repeatedly assured him at+he - n - > e e t ~ n a t-hat- -1-ha r.-rr.hlal'Yl lay uritb tho f'laimant's fi"'IAn-1 Pr l l l i nmPnt ' f ' P l < ; : T r ~ Ll . 1 . 1 ~ . l . .L lb L.l..l. L L . L 1 . \ . . . . . . . 1 - ' . 1 . V U ~ \ . . . . . L L 1 .J. 'VY.iL. .J. L. .J .V '\,...,..1. . .1..1. . 1. .1...1.\.. v v'll. .i. '-''-i ...... ...._.r' ... a . .L'- ' ......... '- ..a...._, .... , _ . ~ . . . . . _ ' - " -claims that a technician nominated by the claimant failed to attend a meeti..TJ.gheld the next day.

In June 2002 , the claimant commenced legal proceedings against Telstra.) Proceedings were issued in the Brisbane Registry of the Federal Court in June2002 . The Statement of Claim was struck out in August 2002 as failing todisclose a cause of action.

- A . . ! - " ' " ' - ~ . r . & b ! n . . h . .t . . " ' - ~ . c Q m m e n c e d Qroceedin s in the Su reme Court of Victoriain October 2004 in respect of the same matter. The claimant's application tofile and serve an amended Statement of Claim was dismissed on 28 February2006 . Telstra has advised that the claimant has been ordered by the Court topay Telstra's costs of this application on a solicitor/client basis.

The TIO has advised that it received a complaint from the claimant in July2002. The TIO identified the complaint to be on behalf of an Internet ServiceProvider. As such, the complaint was identified by the TIO to be an intraindustry matter and therefore beyond the TIO's jurisdiction, under clauses3.2(b) and 4-3 of the TIO's Constitution.



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STATUS OF CLAIM

To date, the claimant's attempts to plead a claim against 'l'elstra have beeudismissed by the Courts. Proceedings initiated by the claimant in theVictorian Supreme Court remain ongoing.


While the assessment is intended to identify whether any further dispute)resolution processes may be available to claimants and Telstra in order toresolve their disputes, Telstra's response is ultimately a matter for thecompany to determine . Before embarking on any course of action in anattempt to resolve his dispute with Telstra, the claimant may wish to seek his-own independent legal advice. The findings or comments made in this reportshould not be taken as the provision of legal advice or to have any legal effect.

The claimant could consider whether any of the complaint or disputeresolution mechanisms outlined below apply in his case. Should the claimant'"'ish to explore these mechanisms, he could contact the relevant organisationto ascertain whether it is able to investigate his claims. Should the claimant~ s h to consider litigation against Telstra, he should seek his own legaladvice. It is ultimately up to the claimant and Telstra to determine their o-vvn) courses of action and to come to a final resolution on individual disputes. TheCommonwealth does not undertake to provide compensation should disputesremain unresolved.

Legal proceedingsI f he claimant vvishes to consider further legal action against Telstra, to theextent that these issues have not already been considered by a court, heshould seek his own legal advice.

OTHER AVENUES FOR CONSIDERATIONState or territory fair trading agencies



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The claimant could consider contacting the Queensland Office of FairTrading. Further information can be obtained by telephoning 13 13 04 orfrom http: I /wvvvv.fairtrading.qld.gov.au.

i\ustralian Competition and Consum er Conunission (ACCC)The claimant could consider contacting the Australian Competition andConsumer Commission (ACCC). However, the claimant should take intoaccount that the ACCC's consumer protection focus is generally on nationalissues and those locali ed issues that have wide public interest implications,with priority given to those cases where broad economic and consumerdetriment is evident. It is noted that the ACCC does not act on behalf ofindividual complainants, but rather determines its priorities and allocates itsresources for the benefit of the Australian community in general. The ACCC

)cannot provide legal advice, or mediate between individuals and the suppliersor acquirers of goods and services. Further information may be obtained bytelephoning the ACCC's Information Centre on 1300 302 502 or fromhttp:/ jwww.accc.gov.au.

Australian Commnnications and Media Authority (ACMA)The claimant could consider contacting the Australian Communications andMedia Authority (ACMA). However, he should take into account thedisinclination ofACMA to investigate individual, rather than systemiccomplaints, particularly if no breach of the legislation is apparent, and thetime that has elapsed since the circumstances of his case became apparent.



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Other Small Business Customer


CLAil\11

The claimants were retail customers ofPowerTel (then Spectrum Global).The claimants attribute responsibility for the service failures to Telstra byreason of Telstra's ownership of the network.

The claimants allege failure of telecommunications services to their businessfrom 1993 including: no ring received; 'this number has been disconnected' recorded voice announcements; inability to make outgoing calls; and failures to their facsimile line.The claimants maintain that prior to this, their business had been inoperation for anumber of years without any telecommunications problems.The claimants contend that from 1988 their business was in full timeoperation, and that by 1990 business was increasing and busy with a largecustomer mailing list.

The claimants state that their business was dependent on customerstelephoning the business to place orders as a consequence of advertising andpromotions. The claimants contend that telecommunications service failuresresulted in significant business and financial losses, and led to ongoing healthand personal problems due to associated stress.

S.M



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The claimants also contend that, based on Telstra's post-complaintassurances as to the fitness of their telecommunications services, they madefurther business outlays including a mailout of 15,000 catalogues, insertion ofa further 25 ,000 catalogues into the magazine 'Gardening Australia' andvarious other promobonal activities via catalogues and displays. Theclaimants allege that Telstra's assurances were false and thr1t the failure oftheir business to receive contact from prospective customers in response to itspromotional activities and the business' subsequent further losses were adirect result of the telecommunications service failures.

The claimants seek financial recompense from Telstra for their losses.

The claimants also allege that their services were deliberately interfered withby an ex-family member who was an employee ofTelstra. The claimants statethat upon seeking the assistance of the Australian Federal Police toinvestigate the matter, they were advised that such an investigation could onlybe undertaken if Telstra requests it.


Information was sought and obtained from the claimants, the claimants'authorised representative f elstra, the Telecommunications) Industry Ombudsman (TIO), the Australian Communications and MediaAuthority (ACM..I\) and existing records held by the Department.

TELSTRARESPONSE

Telstra has advised that it conducted a number of tests in response toconcerns expressed by the with some of those tests s_A.\being in response to fault reports logged by the claimants with their retailservice provider, PowerTel, which in turn logged the faults with TelstraWbolesale. Telstra has advised that it then actioned those fault reports torectify any identified problem, in accordance with its procedures forappropriately logged fault reports.



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Telstra has advised that its Forensic and Special Investi2"f1tions Grounconducted a technical examination of the service to thein early 2003. Telstra has advised that this investigation included:

an examination of all archived fault reports; exan1ination of the cb.ims of interferPnr.P; r.1nd extraction and analysis of network call data to verify the operation of thesenices and to test some of the claims made about service problems.

Telstra has advised that a test of the customer access network (CAN) wascompleted on 10 April 2003 , and a report issued on 24 April 2003 . Telstrahas advised that this report was also provided to the claimants'representative.

)Telstra has advised that in late 2003 , the claimants engaged technicalconsultants (Ambidji Group) to review Telstra's technical findings. Telstrahas advised that the technical consultant approached Telstra in late 2004 ,and pursuant to subsequent discussions the consultant submitted to Telstra anumber of written questions. Telstra has advised that it provided a furtherreport responding to those questions in April 2005 .

Telstra has advised that, other than suggestions by the claimants' solicitorthat Telstra should seek to resolve the claim, it has heard nothing further tothe instances outlined above. Telstra has further advised that it has notreceived any report prepared by the claimants' technical consultant, nor beeninformed whether the technical assistanceprovided has assisted the claimants

J to articulate their claim.


Telstra has stated that in the absence of an explanation of the basis of theclaim, substantiation of the allegations and an explanation of the lossesclaimed, Telstra does not consider that it is in a position to advance aresolution of this claim.

Telstra has advised that it remains of the view that the claimants' service wasoperating normally and that the claim is not sustainable, but has neverthelessinformed the claimants' solicitor that it remains willing to assist the claimantsor their t echnical consultant vvith any further enquiries.

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COMPENSATIONRECEIVED

None, although the TIO has ad,,1sed that its recorcls iwlica_Le lhatcon1pensation forms were sent to the claimants by their service provider.

DISPUTE RESOLUTIONMECKA.NISM(S) USED j CONSIDERED

The TIO has advised that between 1997 and 2001 it investigated a complaintn behalf of the claimants vvi.th respect to their non-Telstra carriage service1 )provider, noting that the claimants _regularly referred to Telstra in theircorrespondence due to Telstra owning the network.

The TIO has advised that in 2001 it vVTote to the claimants advising of theTIO's intention to allow the claimants' service provider to work with theclaimants directly in continuing to investigate the matter, and that the TIOsubsequently spoke with the claimants and their service provider on anumber of occasions in 2001 regarding the progress of testing. The TIO hasfurther advised that it closed the complaint as the TIO was satisfied that theclaimants and their service provider were continuing to work together toresolve ongoing issues. The TIO has advised that the complainants vvereinvited to recontact the TIO if their complaint was not progressing, or if theyremained dissatisfied. The TIO has ad-vised that it has no further record of) contact from the claimants, with the exception of letter from the claimants'solicitor in 2003 requesting a copy of the claimants' file. The TIO has advisedthat it has made no formal finding with respect to the claimants' dispute.

The claimants have advised that they 1odged a complaint vvith the Chair of theformer Australian Communications Authority (now ACMA) via a letter to thethen ACA chairman. ACMA has advised that has been unable to locate anyrecord of the complaint.

STATUS OF CLAJM

The dispute remains outstanding.



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The TI 0 has advised that it has made no formal finding with respect to theclaimants' dispute.

Telstra has advised that, in the absence of an explanation of the basis of theclaim, some substantiation of the allegations and an eA.rplanation of the lossesclaimed, Telstra does not consider that it is in a position to advance aresolution of this claim.


\ vhile the assessment is intended to identify whether any further disputeresolution processes may be available to the claimants and Telstra in order toresolve their disputes, Telstra's response is ultimately a matter for thecompany to determine. Before embarking on any course of action in anattempt to resolve their dispute with Telstra, the claimants may wish to seektheir own independent legal advice. The findings or comments made in thisreport should not be taken as the provision of legal advice or to have any legaleffect.

The claimants could consider whether any of the complaint or disputeresolution mechanisms outlined below apply in their case. Should theclaimants wish to explore these mechanisms, they could contact the relevantorganisation to ascertain whether it is able to investigate their claims. Shouldthe claimants wish to consider litigation against Telstra, they should seektheir own legal advice. I t is ultimately up to the claimants and Telstra todetermine their own courses of action and to come to a final resolution onindividual disputes. The Commonwealth does not undertake to providecompensation should disputes remain unresolved.

Telecommunications Industry Ombudsman (TIO)Subject to any developments since their last contact with the TIO, the optionto recontact the TIO re1nairis open to the claimants. It would then be a matterfor the TIO to decide as to whether the TIO is in a position to progress thematters, given the evidence available and any limitations with regard tojurisdictional timeframes.



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)

Legal proceedingsShould the claimants wish to consider legal action against Telstra, theclaimants should seek their own legal advice on how they may pursue thismatter.

OTHERAVENUES FORCONSIDER.J\TION

S ate or territory fair trading agenciesThe claimants could consider contacting Consumer Affairs Victoria. Furtherinformation can be obtained by telephoning 1300 558 181 or fromhttp: //www.consumer.vic.gov.au.

Australian Competition and Consumer Commission (ACCC)The claimants could consider contacting the Australian Competition andConsumer Commission (ACCC). However, the claimants should take intoaccount that the ACCC's consumer protection focus is generally on nationalissues and those localised issues that have wide public interest implications,with priority given to those cases where broad economic and consumerdetriment is evident. It is noted that the ACCC does not act on behalf ofindividual complainants, but rather determines its priorities and allocates itsresources for the benefit of the Australian community in general. The ACCCcannot provide legal advice, or mediate between individuals and the suppliersor acquirers of goods and services. Further information may be obtained by

1 ) telephoning the ACCC's Information Centre on 1300 3 0 2 5 0 2 or fromhttp:/ www.accc.gov.au.

Australian Conununications and Media Authority (ACMA)The claimants could consider re-contacting the Australian Communicationsand Media Authority (ACMA) . However, they should take into account thedisinclination ofACMA to investigate individual, rather than systemiccomplaints, particularly if no breach of the legislation is apparent, and thetime that has elapsed since the circumstances of their case became apparent.



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)

Former Telstra Contractor


CLAIM

The clain1ant alleges misconduct, misrepresentation and breach of contract byTelstra, in particular that: Telstra terminated his company's contract as a result of his rejecting bribesallegedly offered by Telstra $taff; he made significant investments in staff and resources, based on Telstra'salleged assurances of future work; and Telstra breached its contract with his company on multiple occasions,

misused its market power, and undertook a campaign of victimisationagainst his company.The claimant contends that he suffered direct financial losses as a result of the) above circumstances. The claimant now seeks financial recompense fromTelstra for those losses.

The claimant has also presented his allegations through a third party, Mrof thewho also represents four other former contractor claimants. The claimsthat the parties it represents are entitled to compensation from Telstra on thebasis of alleged unconscionable conduct on the part ofTelstra's managementwhen Telstra implemented the decision to rationalise its contracting pract icesand move from employing a large number of small contractors to employing asrnaller number of larger contractors.


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Information was sought and obtained from the claimant, Telstra, theAustralian Competition and Consumer Commission (ACCC), theTelecommunications Industry Ombudsman, and from existing records heldby DCITA.

TELSTR.t\ RESPONSE

Telstra has advised that its internal claim procedure includes inviting acomplainant to explain the basis of their claims and the losses which theyassert flowed as a result of Telstra's alleged actions.

) Telstra has advised that it entered into a round of negotiations "With theclaimant, however these negotiations failed to achieve a resolution. Telstrahas advised that its last offer o1 financial compensation was 5.41rejected by the claimant.

Telstra has advised that the claimant commenced legal proceedings in theQueensland Supreme Court, ho-vvever these were dismissed by the Court on27 July 2004 .

Telstra has advised that, following the dismissal of his claim by theQueensland Supreme Court, the claimant lodged a joint complaint with fourr ) other parties, under representation by the Telstra has advised that it

met with Mr of the and the five former contractors (ofwhich the claimant was one) in September 2004 . Telstra has advised that itagreed to investigate the contractors' claims internally to identify anymisconduct or misrepresentation by Telstra personnel -vvith respect toTelstra's contracting practices during the period of the alleged incidents.Telstra has advised that a detailed investigation conducted by Telstra's RiskManagement & Assurance group failed to establish the veracity of theallegations. In a letter from Telstra s c01npany secretary, 11r Douglas Gration,dated 22 February 2005 , Telstra advised that it considered, in lightof the findings of its investigation team, that there was no evidence to justifyrecommending a payment to the parties represented by the andaccordingly there appeared to be little value in entering into settlementnegotiations or an ADR process.




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Legal proceedings commenced in the Queensland Supreme Court by theclaimant were dismissed by the Court on 27 July 2004 . Telstra regards theclaim as at an end, subject to reserving its rights to enforce the costs ordermade in its favour.


None.

)DISPUTE RESOLUTION lVIECHANISlVI(S) USED/ CONSIDERED

Telstra has advised that its complaint management approach is to, wherepossible, resolve claims informally through Telstra's internal claim procedure.On this basis, Telstra entered into direct negotiations with the claimant,however negotiations failed to achieve a resolution.

The claimant then commenced proceedings in the Queensland SupremeCourt in October 2003, which were dismissed by the Court on 2 7 July 2004 .

In February 2005 , on behalf of the five parties represented by the (ofwhich the claimant was one), Mr sought a review ofTelstra'sconduct by the ACCC. The ACCC subsequently wrote to on 17February 2005, requesting that he provide more information to th e ACCCwith respect to his complaint against Telstra. That letter requested that h eprovide the following information, in writing:1. contract details relating to the relationship between the complainantcontractors and Telstra for instance, copies of the contracts entered into bythe complainant contractors and Telstra;2. details of conversations or meetings held between complainant cont ractorsand Telstra contract negotiation staff concerning contract negotiation,including pre-contract negotiation;3 information about the 12 prime contractors and evidence of their possible

relationship with the Telstra contract negotiators;4. specific instances of misleading or deceptive conduct or of representations

made in relation to contracting services; and5. any other information that considered relevant to this issue.www.badapples.com.au


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The ACCC has advised that subsequently provided ACCC staff -withadditional documents and information to support his complaint. The ACCChas further advised that, based on the information provided by itwas unable to form a conclusive view rega.rding the allegations raised in thecomplaint and whether there was evidence to suggest that there had been abreach of the Trade Practices Act 1974. However, on the basis of informationprovided, the ACCC considered that the issues raised were of a privatecontractual nature and that the ACCC did not see a role for it to intervene inthe dispute at that time. The ACCC also advised of this in a letterto him dated 2 June 2005 .

STATUS OF CLAIM

The legal proceedings commenced by the claimant have concluded in Telstra'sfavour and Telstra regards the claim as at an end, subject to reserving itsrights to enforce the costs order made in its favour.

The claimant contends that a settlement in favour of the claims lodged on hisand his joint complainants' behalf by the has been agreed by Telstra'smanagement, the Tv1inister and ex-Senator Len Harris, and all that remains ispayment of the 'agreed' unspecified compensation.

) The Minister's Office wrote to on 30 August 2005 disputingclaim that some settlement had been agreed at GovernmentExecutive level.

POTENTL,U DISPUTE RESOLUTION M E C H . _ ~ I S M S A_VAILABLE

While the assessment is intended to identify whether any further disputeresolution processes may be available to claimants and Telstra in order toresolve their disputes, Telstra's response is ultimately a matter for thecompany to determine. Before embarking on any course of action in anattempt to resolve his dispute with Telstra, the claimant may wish to seek hisown independent legal advice. The findings or comments made in this report~ h o u l d not be taken as the provision of legal advice or to have any legal effect.



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)

The Telecommunications Industry Ombudsman's jurisdiction does not eA.1:endto the investigation of complaints by contractors in relation to any dealingsthose contractors may have had involving their contracts or relationship withthe respective carrier or carriage service provider.

The claimant could consider whether any of the complaint or disputeresolution mechanisms outlined below apply in his case. Should the claimantwish to explore these mechanisms, he could contact the relevant organisationto ascertain whether it is able to investigate his claims. Should the claimantwish to consider litigation against Telstra, he should seek his own legaladvice. It is ultimately up to the claimant and Telstra to determine their o-vvncourses of action and to come to a final resolution on individual disputes. TheCommonwealth does not undertake to provide compensation should disputesremain unresolved.

Legal proceedingsShould the claimant wish to consider further legal action against Telstra, theclaimant should seek his own legal advice on how he may pursue the matter.

OTHER A VENUES FOR CONSIDERATION

State or territory fair trading agenciest ) The claimant could consider contacting the Queensland Office of FairTrading. Further information can be obtained by telephoning 13 13 04 orfrom http: //www.fairtrading.qld.gov.au/ oft/oftweb.nsf.

Australian Competition and Consumer Commission (ACCC)The claimant could consider re-contacting the ACCC. However he shouldtake into account that the ACCC's consumer protection focus is generally onnational issues and those localised issues that have wide public inter estimplications, with priority given to those cases where broad economic andconsumer detriment is evident. I t would then be a matter for the ACCC todecide as to whether it is in a position to consider the matters raised by theclaimant, given issues including available evidence, jurisdictional limitationsand organisational priorities. It is noted that the ACCC has previouslyadvised the in its letters of 17 February 2005 and 2 June 2005 toMr that inforn1ation dealing directly vvith a number of specific

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issues would be required in order for the ACCC to be in a position to betterconsider issues relating to the claimant's complaint. It is furt..her noted thatthe ACCC considers that the issues previously raised to be of a privatecontractual nature and therefore more appropriately addressed throughprivate actions because such actions are aimed at remedying a particulardispute between relevant parLies. The clain1ant should seek independent lega]advice if he is considering the merits of any private action.

Australian Communications and Media Authority (ACMA)The claimant could consider contacting the Australian Communications andMedia Authority (ACMA). However, he should take into account the verylimited role that ACMA has in relation to contractual relationships such asthis and the disinclination ofACMA to investigate ind

Documents

Report on the Independent Assessment of Claims Against Telstra