Victims 'blindsided' by moratorium on Christian Brothers' abuse cases

Lawyers for victims of abuse at the hands of the Christian Brothers say they have been "blindsided" and "old wounds" have been re-opened by a moratorium on all cases against the religious order.

The NSW Supreme Court on Thursday granted the Trustees of the Christian Brothers a moratorium on all cases nationally, pending approval of a court-appointed creditor's scheme that would distribute funds to the organisation's creditors, including victims of abuse.

The court had heard the Christian Brothers had $23 million in cash and was losing about $1.7 million a week since October to victim payouts.

Under the moratorium, all current cases will be paused, including claims that have been settled but are yet to be paid out.

Head of Abuse Law at Slater and Gordon Lawyers, Stephanie Brown, said the court's decision had thrown abuse survivors into uncertainty.

"Many survivors have told us it feels as though their suffering is being extended and old wounds are being reopened," she said.

"When institutions that presided over child abuse ask a court to freeze claims and channel compensation through a limited fund, there is a real risk of a new form of institutional harm: one that undermines hard-won outcomes and treats survivors' claims as just another liability to be managed.

"We call for the Christian Brothers to take accountability and responsibility for their actions and we await the findings of the actuarial report.

"Survivors must not be silenced or short-changed."

'A win' in moratorium carve-outs

The moratorium applies to all claims nationally, with all cases effectively on pause until a hearing in September to determine how the creditor's scheme would operate.

But barrister for the Trustees of the Christian Brothers, David Sulan SC, told the court on Thursday there would be "carve-outs" that would allow impacted parties to seek leave to vary the moratorium.

"There are ongoing protections for interested parties that are affected by the moratorium," he argued.

Lawyer and advocate Judy Courtin said victims were "blindsided" by the application for a moratorium but described the carve-outs as a win.

"Today's hearing was a real win for all victim survivors of the sexual assaults and rapes by Christian brothers," she said.

"But why didn't the Christian Brothers make this suggestion [of the carve-out] at the very beginning? All of that angst and that ongoing abuse and trauma by the brothers could have been avoided.

"The amount of money that has been spent on legal experts, silks and solicitors and all the rest in the last 10 days could have all been avoided."

'We intend to keep fighting'

Both lawyers said their firms would continue to stand with victims of clergy abuse to pursue their compensation claims and Dr Courtin said there was still a lot more work to be done before the matter was resolved.

"I take my hat off to all the survivors, all our clients, clients all around the country who have survived yet another kick in the guts from a Catholic order," she said.

"I want to say to survivors, hang in there, we've won this part of the battle, and we intend to keep fighting."

In a statement, the Trustees of Christian Brothers, Oceania Province (known collectively as the Province), described the creditor's scheme as a "court-approved restructuring process" that is governed by Part 5.1 of the Commonwealth Corporations Act.

It must be approved by at least 50 per cent of the creditors and creditors who represent at least 75 per cent of the total claims against the Province.

If creditors approve the scheme, then it must be approved by the court before it becomes binding and takes effect.

"If the proposed scheme does not receive the necessary level of creditor support, or approval of the court, then the province entities will have no option but to enter liquidation," the statement said.

The matter is set down for a hearing on September 21.