Lavish renovations to “Bishopscourt” mansion, a host of unregistered trusts and other financial irregularities, present the new Anglican Archbishop of Melbourne with a raft of earthly challenges. Stephanie Tran and Michael West report.
When The Right Reverend Dr Ric Thorpe, Melbourne’s new Archbishop delivers his first sermon at St Paul’s Cathedral, he is unlikely to tee off with an exegesis of the famous biblical passage Mark 12:41.
This is the parable where Jesus tells the disciples about the poor woman who gave two small coins, all she had, to the Temple offering.
Anglican parishioners in Melbourne have cause for concern over the administration of Church finances. An investigation by Michael West Media has unearthed details about expensive renovations to the $40m Bishopscourt mansion in East Melbourne and long-running governance failures including dozens of unregistered trusts that may be subject to millions in potential tax liabilities.
The revelations come at a time when the finances of establishment churches in Australia are on the wane; are unlikely to please parishioners who part with a fraction of their earnings in the offering plates on a Sunday.
“A vanity project”
According to documents obtained by MWM, the former Anglican Archbishop of Melbourne, Philip Freier, wanted to host the Archbishop of Canterbury at Bishopscourt when he came to Australia for a visit in 2022.
Rather than putting him up in a hotel at lesser expense to the Diocese, the Bishopscourt Trust Management Committee (BTMC) contracted Virtue Construction to renovate the 1850s bluestone mansion. But things did not go as planned and documents show the costs blew out from $190,000 to around $350,000.
A whistleblower familiar with the Church finances claims the works were unnecessary and pushed through without proper authorisation, describing them as “a vanity project”. The whistleblower also alleges the construction contract was split into two to avoid the BTMC’s $200,000 financial delegation limit, and that the Archbishop did not appropriately manage potential conflicts of interest.
Church denies archiepiscopal conflict
“The Archbishop, as the occupant of Bishopscourt, had a conflict of interest in relation to any material improvements or expenditures on Bishopscourt … The works in question included a renovation of a bathroom and bedroom.”
The Diocese strongly disputes these claims. In a statement, a spokesperson said:
“While there is a residence for the Archbishop at Bishopscourt, the overwhelming construction and cost of those renovations have been to the community facilities and upgrade of quarters for visitors to the Diocese.
“While the Archbishop of Canterbury did visit Bishopscourt, there were no substantive renovations conducted in anticipation of this visit, and no splitting of contracts as suggested in your question.”
Internal documents reviewed by MWM confirm that the Bishopscourt trust was not registered with the ACNC at the time. They also record that the construction contract was issued in two parts, though the Diocese denies this was done to circumvent the financial limit.
Departing Anglican Archbishop Philip Freier
A pattern of governance concerns
The whistleblower alleges the Bishopscourt project was only one example of broader systemic problems.
He claims that when he joined the Trust Corporation in late 2019, he encountered minimal documentation, incomplete records and missing trust deeds, and that these concerns went unaddressed for years.
“There were no records handed over. There were no trust deeds. There were no financial statements for any of the trusts. There were no details about who were the signatories on any of the accounts.”
“As I investigated more matters, I became aware that the poor governance had hid a number of legal compliance issues.”
The Diocese holds approximately 300 trusts. Documents seen by MWM indicate that within the top 20 per cent of trusts by value (48 trusts), 30 were not registered with the ACNC.
While not unlawful in itself, the whistleblower alleges the Diocese incorrectly self-assessed these trusts as income tax exempt, potentially leaving the Church with significant tax liabilities.
He described the Church’s response to concerns as “very defensive”, comparing it to the early reaction to the Church’s handling of child sexual abuse claims.
“The initial knee jerk reaction was a denial of the issue and an attempt to minimise and belittle it.”
Church begins to clean up its acts
After years of internal complaints, the Diocese has begun taking steps to address the compliance issues.
Earlier this month, the Diocese resolved to register all unregistered trusts with a corpus over $100,000 by the end of next year.
“Through a lot of pushing, we managed to get a resolution in November that any unregistered trust with a corpus above $100,000 would be registered by the end of next year,” the whistleblower said.
A spokesperson for the Diocese provided the following response regarding steps the Diocese is taking to ensure they comply with ATO and ACNC requirements:
“The Melbourne Anglican Trust Corporation (MATC) is the authority that manages the trusts of the diocese and has been undertaking a project to review compliance requirements for the ATO and ACNC for over two years. Trustee law is a complex area which we are working through with the ACNC and ATO.”
For incoming Archbishop Ric Thorpe, these legacy governance issues present a formidable challenge as he steps into the role.
“There needs to be a commitment to transparency. These issues need to be acknowledged and addressed so that the new Archbishop has the opportunity to come in with it with as much of a clean slate as possible.”
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.
Stephanie is a journalist with a passion for uncovering stories that hold power to account. With a background in both law and journalism, she has worked at The Guardian and as a paralegal, where she assisted Crikey’s defence team in the high-profile defamation case brought by Lachlan Murdoch. Her reporting has been recognised nationally, earning her the 2021 Democracy’s Watchdogs Award for Student Investigative Reporting and a nomination for the 2021 Walkley Student Journalist of the Year Award.