Christian Brothers Oceania Scheme of Arrangement: court update
Koffels attended the initial hearing in the Supreme Court of New South Wales concerning the proposed court-approved Creditors’ Scheme of Arrangement for the Christian Brothers Oceania Province (Christian Brothers Oceania), which encompasses Australia and New Zealand. We appeared on behalf of our clients as interested parties in the proceedings.
Koffels was first made aware of the proposed Scheme when Christian Brothers Oceania issued a media release on 22 June 2026 announcing its intention to apply to the Supreme Court for approval to convene a Scheme of Arrangement. Since that time, we have been closely monitoring the matter and engaging with the solicitors acting for Christian Brothers Oceania. Christian Brothers say that a Scheme of Arrangement is necessary because they do not have adequate funds to meet all the claims being made against them for institutional sexual abuse. The Scheme proposes that all claims will be discounted. At this time, we do not know the level of discount, but it could be substantial.
Individuals with current or future claims against Christian Brothers Oceania will be recognised as Scheme Creditors and will have the right to vote on whether the Scheme of Arrangement should be approved. Our current view is that the scheme should not be approved and is unfair to our clients because of the way in which it has been constructed.
As part of the Scheme process, Christian Brothers Oceania sought a moratorium on all existing claims brought by survivors of historical abuse. Today’s hearing concerned the proposed moratorium and the timetable for determining whether the Scheme should proceed to a vote of Scheme Creditors. The reason for the moratorium is to preserve the assets of Christian Brothers Oceania to ensure no individual claimant is paid in priority to others. All claims against Christian Brothers are frozen from today.
The Supreme Court made orders imposing a moratorium with effect from today, 2 July 2026, and established a timetable for the next stages of the Scheme process. Importantly, Koffels was instrumental in obtaining orders requiring Christian Brothers Oceania to provide comprehensive financial disclosure by 27 July 2026. This disclosure will enable interested parties to properly assess the financial position of the Christian Brothers entities. When we have the details, we will be in contact with you.
As has been reported publicly, entities within Christian Brothers Oceania have, over the past 13 years, transferred a significant number of properties for no consideration to Edmund Rice Education Australia, a trust with close links to the Christian Brothers. Subject to further investigation and the information disclosed, Koffels will continue to examine whether those transactions should be challenged and whether those assets ought to be brought back into the pool of assets available to meet compensation claims, or made available to everyone if the Scheme is not approved and there is a liquidation of all of the entities that comprise Christian Brothers Oceania. Edmund Rice Education Australia is operating the schools that were formerly owned and operated by the entities of Christian Brothers Oceania. If all the properties were brought back into the pool, there appear to be adequate funds to pay all the claims.
There is legislation that imposes on parties the obligation to nominate a proper defendant if they are sued. A proper defendant must have the financial resources to meet all abuse claims that are or could be made. We are investigating whether we can use this legislation to cause Edmund Rice Education Australia to be made the proper defendant in all claims. If this were to occur, then our clients would not have to participate in the Scheme, and we could proceed as normal against Edmund Rice Education Australia. It is likely that we will have to run a test case to ascertain if this procedure can be adopted. At the present time, Edmund Rice Education Australia appears to have adequate assets to meet all claims.
We will continue to keep clients with current or prospective claims against Christian Brothers Oceania informed as the proceedings progress.
At the present time, all actions against the Trustees of the Christian Brothers are frozen, and that will apply until late September, when there will be a hearing in court about the Scheme. Matters with a trial date will probably need to have that date vacated. There is likely to be at least months of delay caused by these unforeseen developments.
Actions against entities other than the Trustees of the Christian Brothers (such as Sydney Catholic Schools Ltd) are not frozen.
If you have any questions, please do not hesitate to contact our office.
Ross Koffel
Executive Chairman, Koffels Solicitors & Barristers
