The Loss of the Tivoli, our Home and Superannuation
Back to 1990 and the first Current Affair’s program aired by Channel 9. In the days and weeks following the Current Affairs Program numerous other Fortitude Valley business owners called in to the Tivoli to talk about the phone problems they were experiencing. However, I established from their comments that the extent of the problems was much wider spread than I had originally thought. Sadly it gave us little hope of a quick resolution by reporting the matter to the Government Ministers and Politicians. It was obvious that the Government and Telstra had developed a standard response to the complaints. As indicated in Chapter 2, we were later to learn that Freehills had developed a Legal Strategy in September 1993 to deny the problems and conceal the technical evidence under Legal Professional Privilege. So it was that in response to our complaints were all we treated with the same dishonest response “you are the only business complaining, therefore there is no such problem as you allege” Subsequently, despite innumerable written submissions from us and other businesses, the Government completely ignored the blatant misrepresentations.
How outrageous I thought to myself, what can I possibly do, the Government is turning a blind eye whilst we are all going broke. We now know that it was at this point in time that Telstra started the eavesdropping on our conversations as well as deliberately sabotaging our phone lines. It was later admitted to me by Telstra technicians that this strategy was adopted to put me out of business, I was seen as the major obstacle. This we were to discover was one of the reasons the Politicians broken their promises of settlement, to avoid discovery of the evidence.
With the problem now extending for over six years with no solution in sight St George Bank suggested that I should request a guarantee from the Government that the problems were going to be resolved and soon. I met with St George in their Brisbane Offices to discuss the problems. They were very sympathetic and offered us a rate reduction of 2.5% on our mortgage if we could obtain a guarantee from Telstra and the Government that the problem was going to be fixed and soon. Accordingly, I asked for a guarantee from Telstra and the Government but the request was refused outright. This matter is well documented in Telstra’s internal records, copies of which I obtained many years later under FOI. The Memo Mr Don Pinel Telstra Queensland Administration is relevant:
“Re Ann Garms the Tivoli Restaurant – She demanded a written response to certain questions from me by 4.00 pm on Friday – specifically what I was going to do to secure her telephone service and where were her lines connected at Valley exchange. I did not agree to this request.”
So it was that the cover-up by the Politicians began in ernst, and it goes without saying the commencement of the political vendetta and blatant denial of fairness and justice in our case. A vendetta that saw the destruction of our restaurant business, our home and our superannuation all of which we had works so hard for over the past two decades. We were now faced with an indescribably difficult situation, our health deteriorated rapidly and I started crying in my sleep. The frustration of not being able to solve the problem was extremely hard to cope with. How do I explain to the Bank Manager that the Politicians are covering up the problems and to make matters worse Telstra was deliberately sabotaging our phone lines to put us out of business. It reminds me of a scene from the movie “The Bank Job”
Even the local Undertaker was going under at a fast rate of knots! In desperation Mr Alan Smith of KM Smith Funeral Directors called in to see me. Alan was in a state of despair, he said he had estimated that he was losing around thirty Funerals a month.
I often think of that early conversation with Alan, I had said to him that one of our problems at the Tivoli was the loss of cold calls, by that I mean customers who tried to call to make a booking after work and could not get through. Alan responded my dear Ann, all my calls are cold and they have no hope of returning, I am the last person to let them down! So it was by 1990 the phone problem including the deliberate sabotage of our phone lines by Telstra started to seriously erode our business operations, viability, and cash reserves.
Undeterred, I persisted with my request for a guarantee from the Government and Telstra, both entities flatly refused the request which left us with no choice. St George Bank indicated that they had a willing buyer for the newly renovated Superannuation investment properties in Hampstead Road Highgate Hill. The rental return was $1,600 a week. This was the first of the four subsequent Superannuation and home sales. We sold the Superannuation rental Properties 30 Hampstead Road Highgate Hill, eight Units. 32 Hampsted Road Highgate, large Colonial home. Both properties enjoyed Brisbane CBD City views.
With the phone problems still unresolved and no response from the Government we had no choice than to sell the Superannuation property known as Jacaranda Cove at 53 Paragon Street Yeronga. Jacaranda Cove is the birth place and former home of the artist Lloyd Rees. This is a very special place in Brisbane’s history. Lloyd Rees was born in Yeronga in 1895. He grew up in the beautiful grounds of ‘Jacaranda Cove’ which we grew to love so dearly. Rees lived in a rambling Queenslander at the end of Paragon Street. When we purchased Jacaranda Cove the home had deteriorated to such an extent it was almost impossible to restore.
Whilst living at Jacaranda Cove Lloyd Rees studied art at the Brisbane Technical College before joining the Queensland Government Printing Office. He commenced work as a commercial artist in 1917. Rees was engaged to sculptor Daphne Mayo, but it was broken off in 1925. He won the Wynne Prize in 1950 and 1982. He also won the Commonwealth Jubilee Art Prize in 1957 and the McCaughey Prize in 1971. Rees was appointed a Companion of the Order of St Michael and St George (CMG) in 1978 and Australia’s highest civilian honour, Companion of the Order of Australia (AC) in 1985 He was awarded the Médaille de la Ville de Paris in 1987 in honour of his artistic achievements.
Amongst the magnificent Jacaranda trees spanning almost 2 acres of prime Brisbane Riverfront land, Lloyd Rees was inspired to concentrate on Landscape Painting. Jacaranda Cove is zoned Residential B R4, the land Area is 6,763m2. The rateable value of the property today is in excess of ten million dollars. We were compelled to sell the property having regard for the Bank’s instructions in January 1990 for $1.650 million. If the Politicians had honoured their promise of settlement in April 1994 we would have been able to repurchase the property in April 1994 for $1.750 million.
The last Superannuation Investment property to be sold comprised two (2) absolute Brisbane Riverfront Unit Development Blocks at 53 Fraser Terrace Highgate Hill. The site overlooks The University of Queensland St Lucia Campus. DSC00532The current combined estimate is $2.3 million. Block 1 $1.195m. This includes the Boathouse and approximately 709m2 of absolute riverfront land. Block 2 $1.095m. This includes approximately 672m2 of absolute riverfront land and a garage.If the claim had been settled as promised we could have repurchased the property for $360,000 in April 1994.
Reluctantly, in disposing of our Superannuation properties and our home we had no option than to comply with the Banks demands. Due to the repeated lies that settlement would occur within six months, we were defenceless and could not provide any written confirmation that the promise of a fast settlement would be honoured. Our much loved family home “Tintagel” was also an absolute Brisbane Riverfront Home comprising three residential blocks at 79 King Arthur Terrace Tennyson. We constructed our home using materials rescued from demolished Brisbane CBD Buildings.
The forced sale of our home, with the dispute now in its eighth year was the ultimate sacrifice, the heartache and loss was beyond comprehension. Harry was now under constant care by Psychiatrist, Dr Larry Evans. He needed the sanctuary of his home more than ever. We had waited so long to be able to build this wonderful family home out of the amazing historic building materials we had collected, we were now left with no home and no superannuation. The Government continued to fob us off with the same old line, there is no one else complaining, so there is no problem. More and more Fortitude Valley businesses reported experiencing the same the problem. One particular business owner in the adjoining street, Anderson Street suffered a complete nervous breakdown and lost her business. By now we were in a state of absolute despair, Harry was experiencing panic attacks more frequently, and to be honest my life became a nightmare.
Finally in June 1992, when all hope was lost, one of our regular customers, an executive of NEC called in to see me. He said NEC was very aware of the serious network problems in Fortitude Valley as they had their Head Office in the area and that I should lodge a formal complaint with the Regulator AUSTEL, and so it was that in July 1992 I lodged a complaint with AUSTEL. Almost a year passed, AUSTEL was in regular contact. When and as requested I attended their offices in Melbourne to give evidence.
A decade after the commencement of the phone problems, with Telstra continuing to deny that any problem existed, St George Bank issued a Notice of Default and Demand against us. This occurred on 5 May 1993. I immediately phoned AUSTEL. I was pleased to learn from Ms Amanda Davis the manager of Consumer Affairs that they had completed their investigation which had found the telephone service provided over the previous decade to Roseville and the Tivoli Restaurants was inadequate and Telstra’s advice was misleading. Incredulously, on the same day, 5 May 1993, after four years of false denials with Harry rendered mentally ill and the Tivoli business irreparably damaged, the Telstra Finance Department phoned me and asked if I had insurance cover for business interruption and loss of profit. I reported this matter to AUSTEL who responded that Telstra had obviously inadvertently admitted liability. Some years later under FOI I obtained a very interesting Memo from Mr John Mc Kee, Telstra Finance Department to Mr Jim Holmes the Telstra Corporate Secretary dated 17 May 1993:
“I presume that our legal obligations in addressing the presumed Tivoli revenue shortfall are clear. I also presume that we accept that there were technical problems with their lines. It is unfortunate that our insurance cover for “Failure to Supply” was not in place, and this cover is high on our priority list for the proposed insurance unit.3. Tivoli Insurance… Tivoli would no doubt be insured and what needs to be established is if they were covered for “loss of profit” or “business interruption” that could possibly be deemed to cover losses of this type.
On 9 June 1993 we received a copy of AUSTEL’s investigation Report. In part it said:
“Roseville Restaurant and the Tivoli Restaurant & Theatre: AUSTEL examined the documentation provided by Mrs Garms-correspondence with Telecom, Telecom’s own records of faults and documents which Mrs Garms had obtained from Telecom under the Freedom of Information Act. AUSTEL formed the opinion that the telephone service supplied had been inadequate and that the advice given by Telecom to Mrs Garms regarding her telephone service had been misleading.”
We were delighted with AUSTEL’s findings, at long last a breakthrough. This was at last some positive news that might see a resolution in the very near future. It was now almost a decade since the phone problems first commenced in August 1983. I contacted St George Bank and Senator Alston and Senator Boswell to give them the news. During a conversation with Senator Alston he informed me that Telstra in response to AUSTEL’s investigations continued to plead that we were the only business complaining of the problems. I found his terminology interesting, he always referred to Telstra as the 800 pound gorilla.
None of this helped, words were cheap, still with no apparent resolution in sight we were forced to continue renting a home for the family. Some years later the Endeavour Foundation gave me a copy of a Telstra email they had obtained under FOI:
“Telstra Legal Directorate: Subject Endeavour Foundation. We’ve had another look at this one and the situation is quite serious. The Foundation are quite keen to pursue ‘litigation’ over compensation around the $2-3million mark…I believe it important to keep the lid on until after Garms is in and out of arbitration”
In August 1993 AUSTEL informed me that they considered the only solution to overcome the deceptive conduct and put pressure on the Government was to call a Public Meeting of Fortitude Valley Telstra customers. The meeting was advertised and scheduled for the evening of 13 September 1993 at the Chancellor Hotel in Spring Hill. The meeting was chaired by the Manager of Consumer Affairs, in all 80 Fortitude Valley Customers attended with a further 75 contacting AUSTEL after the meeting. Channel 10 recorded a Video of the meeting, a copy of which they provided for our record. It is available for viewing in Dropbox four. The meeting proved very volatile and damaging for Telstra, customers were shouting and screaming about the problems extending back ten years.
At Around the same time in September 1993 I received a phone call from the Minister for Communications, Senator Bob Collins. During the ensuing conversation concerning Telstra’s response to our formal complaint, he said that he had discussed the matter with Telstra’s CEO, W Frank Blount. It was not surprising to hear that Mr Blount had informed him that we were the only business in Fortitude Valley complaining of the problem. Not to be deterred I prepared a questioner and sent my staff into the streets of Fortitude Valley.
Needless to say, the Tivoli staff collected over ninety (90) written complaints from other businesses including the RACQ, KM Smith Funeral Directors, IKEA, Harvey Norman, The Transport Workers Union, Jenny’s Corsetry, NEC, the Royal Brisbane Hospital, Perrotts Florist the RNA Showground’s, Black & White Cabs, Ascot Taxi Service, ACE Catering to name just a few. The Valley Business Association President in a letter identified thirty-two Restaurants and Cafes experiencing the problem, including their headquarters in Fortitude Valley. When closing the Tivoli that evening I faxed copies to Telstra CEO Mr W. Frank Blount at midnight. A week later Mr Blount personally phoned me to inform me that he had engaged senior executives from Coopers & Lybrand in London to, as he put it “shore up my position Mrs Garms”
And shore up his position they did, I think not! A week later I received a call from the Coopers & Lybrand representative Mr Bernard Bland who had just flown into Brisbane from London. Mr Bland arranged to see me the next day at the Tivoli. The interview was interesting to say the least, he was shocked by the evidence I had obtained under FOI, in particular technical reports, internal working documents recording serious network problems and Engineers Reports in addition to congestion reports generated in regard to the proposed major upgrade of the Fortitude Valley Network.
During my final meeting with Coopers & Lybrand I was informed that their investigation had cost Telstra $2.5 million and they, Telstra were unhappy with the result to say the least. On 1 November 1993 I was pleased to receive a phone call from Coopers & Lybrand informing me that they had that day provided their Report to Mr W. Frank Blount. The next day they briefed me in a telephone hook up, faxing a copy to the Tivoli. This is an extract:
“Coopers & Lybrand Overall Findings: Based on our reviews of case studies provided by Telecom, Telecom’s approach to difficult network faults over the last 5 years has not met the minimum requirements of adequacy, reasonableness and fairness. External Communication: Communication featured inappropriate conclusions, inaccurate statements and evasive responses causing customers and external parties to be mislead.”
Incredulously, a week later being 9 November 1993, in response to the report Telecom Group Managing Director Mr Campbell provided the following instructions “It should be pointed out to Coopers & Lybrand that unless this Report is withdrawn and revised, that their future in relation to Telecom may be irreparably damaged”
The day after the Coopers & Lybrand Report was published and provided to the Government, I received a phone call from the conjoint Ministers for Communication, Senator Bob Collins and David Beddall. They informed me that they took the findings very seriously and had commenced their own investigation and as such accepted that we had suffered personal and financial distress. This admission was contained in a letter dated the same day, we were overjoyed, at last some good news. Subsequently Senator Collins requested the phone number of Harry’s physiatrist, Dr Larry Evans and asked if I would phone Dr Evans and give permission for him to phone. The next day Dr Evans phoned me after speaking with Senator Collins. He said he had discussed the matter of Harry’s health and informed Senator Collins that he considered that the Government had been negligent in their dealings with us and the sooner the whole matter was resolved fairly and quickly the sooner Harry may be able to rest more easily by restoring his home and future prospects. I subsequently phoned Senator Collins to discuss his conversation with Dr Evans.
It was at this juncture that Senator Collins informed me that the Government was going to take control of the settlement process, promising a quick settlement within six months or sooner to enable us to reinstate our business, home and superannuation. This led to the Politicians first promise on 18 November 1993 of a fast settlement of our claims by April 1994.