Armstrong v Minbani Aboriginal Corporations

[2006] FCA 803

FEDERAL COURT OF AUSTRALIA

Armstrong v Minbani Aboriginal Corporations [2006] FCA 803

PETER ARMSTRONG, DELEGATE OF THE REGISTRAR OF ABORIGINAL CORPORATIONS v MINBANI ABORIGINAL CORPORATION

QUD 521 OF 2005

DOWSETT J
2 JUNE 2006
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 521 OF 2005

BETWEEN:	PETER ARMSTRONG, DELEGATE OF THE REGISTRAR OF ABORIGINAL CORPORATIONS APPLICANT
AND:	MINBANI ABORIGINAL CORPORATION RESPONDENT

JUDGE:	DOWSETT J
DATE:	2 JUNE 2006
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. This is an application to wind up the Minbani Aboriginal Corporation (the “Corporation”) upon the ground that it has suspended the conduct of its business for the period of one year or alternatively, upon the ground that it is just and equitable that it be wound up.  The Corporation was set up with the objectives of providing culturally relevant programs to Aboriginal and Islander families and acting as an advisory body representing the Aboriginal community, in relation to families and children’s issues. 

2. The Corporation is the perpetual lessee of premises in Darwin and has erected thereon a building, apparently designed to serve the purposes of the organisation.  It has been explained to me that the nature of a perpetual lease in the Northern Territory is such that it can be surrendered at any time at the instigation of either the Crown or the tenant, subject only to appropriate compensation being paid for improvements erected on the lease.  It follows that it would not be possible for a tenant to assign such a lease unless the Crown were willing to accept the surrender and grant a new lease to the proposed assignee.  In those circumstances, it is difficult to see that the lease has any value, save for so long as the premises are being used by the lessee for the stipulated purpose.

3. The building was erected with funds provided by the Commonwealth.  The activities of the Corporation have previously been funded by the Commonwealth and the Northern Territory government.  The Commonwealth asserts that there has been a failure to acquit, in an appropriate way, funds advanced to the Corporation and, on that basis, has sought recovery of them.  The Northern Territory government also claims to be owed not insignificant amounts of money.

4. The Corporation ceased, itself, to conduct a child care facility in 2004.  It subsequently carried on such activities thereafter through another organisation which became a sub-tenant.  However that activity has also ceased.  The premises are presently used by another Aboriginal group as a women’s shelter.  Because of difficulties largely created by these proceedings, that organisation now proposes to find premises where its occupation is assured.  It proposes to vacate the Corporation’s premises in July. 

5. Failure to acquit government funds is, of course, a serious matter.  There can be no basis for a government overlooking such default.  It also seems that the activities of the Corporation, if not suspended, are very limited.  Neither the Commonwealth nor the Northern Territory government will, in future, provide funds to the Corporation. It cannot continue to conduct its business in the absence of such financial support.

6. The provisional liquidator has provided a report.  It lacks detail, perhaps because of the limited information available, but it demonstrates an excess of liabilities over assets of $334 206.  The Corporation’s own accounts show an excess of assets over liabilities of $575 341.  It has not appeared today to offer any evidence in support of that position.  Many aspects of the material suggest that the provisional liquidator’s figures are more reliable. 

7. The Crown lease is valued in the Corporation’s books at $200 000.  This seems quite inappropriate, given that it is liable to revocation without compensation, other than in connection with the improvements.  Property, plant, and equipment are valued at $312 605 in the Corporation’s books and at $10 000 by the provisional liquidator.  I assume that he has been unable to find property, plant, and equipment to that extent.  However I am told, and accept, that a substantial part of that amount is probably the sum of about $260 000 representing the actual cost of constructing the building on the premises.  If that is so, then the asset position should be increased to reflect a figure of that order.  There would still be an excess of liabilities over assets, although substantially less than $334 000.

8. The other primary differences between the Corporation’s figures and those provided by the provisional liquidator relate to the claims by the relevant governments to recover moneys.  There is good reason to believe that the Commonwealth and the Northern Territory government are making valid claims.

9. Another matter of concern is that the Corporation may owe money deducted from the wages of employees or by way of superannuation contributions.  For those reasons, it is just and equitable, and in the public interest, that the Corporation be wound up.  I will make orders in terms of the draft.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated:            4 July 2006

Counsel for the Applicant:	Ms S Anderson
Solicitor for the Applicant:	Minter Ellison
Solicitor for the Respondent:	Cridlands Lawyers
Date of Hearing:	2 June 2006
Date of Judgment:	2 June 2006