Barker, Jeanette v The Registrar of Aboriginal Corporations

[1997] FCA 1245

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 920 of 1997

BETWEEN:	JEANETTE BARKER APPLICANT
AND:	THE REGISTRAR OF ABORIGINAL CORPORATIONS RESPONDENT

JUDGE:	WHITLAM J
DATE:	10 NOVEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

The applicant is a member of two Aboriginal associations incorporated under Pt IV of the Aboriginal Councils and Associations Act 1976 (“the Act”). They are the Northern Star Aboriginal Corporation and the North Star Construction Aboriginal Corporation. On 21 May 1997 the respondent, who is the Registrar of Aboriginal Corporations, appointed Mr Allan Nicholls as administrator of each of those corporations pursuant to s 71 of the Act. On Mr Nicholls' appointment, the offices of the members of the Governing Committee of both corporations became vacant. The applicant was a member of both committees.

Last week, on the afternoon of Monday 3 November 1997, the applicant was told by one of Mr Nicholls’ staff that the respondent was going to conduct an election for the Governing Committee of both corporations.  She was faxed a copy of two notices given by the Registrar.  One was headed Northern Star Aboriginal Corporation and stated:

“Notice of Election of Governing Committee

I, Noureddine Bouhafs, Registrar of Aboriginal Corporations, am satisfied that it is no longer necessary for an Administrator to conduct the affairs of the Northern Star Aboriginal Corporation. Accordingly, pursuant to Section 77D of the Aboriginal Councils and Associations Act 1976, I am required to conduct an election for membership of the Governing Committee, which will assume control of the Corporation when the appointment of the Administrator is cancelled.

I therefore give notice that an election will be held for the purpose of filling the offices of the members of the Governing Committee.  Details of the election are as follows:

Place:  Senior Citizens Hall
  Sandon Street
  Brewarrina,  NSW
  Time:   10.00 am
  Date:   Tuesday 11 November 1997

Only those persons listed on the register of members of the Corporation maintained by the Administrator will be entitled to vote at the election.  If any person is uncertain as to their membership status, they should contact the Administrator, Mr Allan Nicholls, on [phone] to discuss the matter further.  To participate in the election, completed membership application forms must be accepted by the Administrator by 5.00pm on 7 November 1997.  No postal votes or proxy votes will be accepted for the election.”

The other notice was headed North Star Construction Aboriginal Corporation and was identical save that the time of the meeting was stated as:

“Time:  11.00am (or upon completion of Northern Star Election)”

The applicant was incensed that proxy votes were not to be accepted.  Later that afternoon she telephoned the respondent's office in Canberra to protest. 

Another member of both corporations, Ms Grace Beetson, received a letter dated 30 October 1997 from the respondent about the election of the Governing Committee of the North Star Construction Aboriginal Corporation.  The letter said:

“NORTH STAR CONSTRUCTION ABORIGINAL CORPORATION
ELECTION OF GOVERNING COMMITTEE

I am writing to inform you that in accordance with Section 77D of the Aboriginal Councils and Associations Act 1976 (the Act), I will be holding an election for the purposes of filling the offices of the members of the Governing Committee of the North Star Construction Aboriginal Corporation.

The election is to be held at 11.00 am on Tuesday 11 November 1997 (or immediately after the Northern Star Aboriginal Corporation election on 11 November 1997) at the Senior Citizens Hall, Sandon Street, Brewarrina, NSW.

As you know, since 21 May 1997 the affairs of Northern Star Aboriginal Corporation have been conducted by an Administrator, appointed in accordance with the provisions of the Act. I am satisfied the appointment of an Administrator is no longer necessary and I would like to return control of the Corporation’s affairs to a Governing Committee of members. However, with the appointment of an Administrator all positions on the Committee became vacant. A new Committee must therefore be elected to assume control.

Participation in the election will be limited to those persons who are listed on the Register of Members of the Corporation maintained by the Administrator.

This is a most important meeting for the Corporation.  The election of a capable and diligent committee is the first step towards securing a stable and successful future for the Corporation.  It is obviously desirable that the new Committee be representative of the whole membership, but this will only occur if members willingly and freely come forward and nominate to be elected to the membership of the Governing Committee and participate in the election.

A copy of the agenda which will apply for the election is attached.  No postal votes or proxy votes will be accepted for the election.

Should you require any further information or assistance, you may contact Mr Joe Mastrolembo, toll free (1800 622 431) in my Office.”

The attached agenda listed the following items:

“Introduction by the Registrar of Aboriginal
 Corporations

- Mr Noureddine Bouhafs

Brief Report By Administrator-Mr Allan Nicholls

Outline of Election Rules

Nominations for Governing Committee

Voting (if required)

Counting of Votes (if required)

Announcement of new Committee Members

Close of Election”

On the morning of 5 November 1997 counsel faxed the respondent's solicitor on behalf of the applicant, drawing attention to rule 16 in the Rules of each corporation.  (Each corporation's rules are in all relevant respects identical.)  Rule 16(2) provides:

“At general meetings, any member shall be entitled to appoint another member as proxy by notice given to the Secretary at least 24 hours before the meeting in respect of which the proxy is appointed (but no member shall hold more than 3 proxies).  The notice appointing the proxy shall be in the form set out in the Appendix to these rules.”

An application was urgently filed in court on the afternoon of Friday, 7 November 1997 and the matter has been fixed for final hearing today.  The evidence from the applicant may be succinctly summarized.  She intends to stand for election for the Governing Committee of both corporations.  She wants to have voting by proxy.  Several members wish to appoint proxies and some of these members will be unable to attend the proposed elections tomorrow. 

Section 77D of the Act provides:

“77D.  If the Registrar is satisfied that it is no longer necessary for the Administrator to conduct the affairs of the corporation, the Registrar must conduct an election to fill the offices of the councillors or the members of the Governing Committee, as the case may be.”

In an affidavit sworn on 7 November 1997, the Acting Director of the Registration and Compliance Section in the respondent's office says:

“. . . since section 77D of the Act became operative, the Registrar has adopted the policy that in the first instance no election conducted pursuant to that section should allow proxy votes. The rationale behind such a policy is: to ensure that no subsequent issue could be raised as to the legitimacy of any elected committee person on the basis of the invalidity of any proxy vote; and to encourage members to attend and not be frightened to stand for election to obtain a wide representation of the membership. However, if matters are raised as to the form of the proposed election, the Registrar then considers those matters to determine if they warrant a departure from that initial position. In this instance it was and is considered that the circumstances do not warrant such a departure.”

In an affidavit made by the respondent today, he says:

3.There are approximately 2,800 Aboriginal Corporations presently registered on the Register of Incorporated Aboriginal Associations maintained by me under section 5 of the Aboriginal Councils and Associations Act 1976 (the Act). In the year ending 30 June 1997 there were 20 Corporations under administration pursuant to an appointment made under section 71 of the Act and another 14 on which a notice to show cause had been served pursuant to that section.

4.That Corporations to which Administrators are appointed cover the complete spectrum ranging from unsophisticated ones situate in outlying country areas where few members may speak English to very sophisticated ones in urban areas where there may be many employees and the use of employed managerial staff, accountants and solicitors.

5.Most Corporations having some form of administrative difficulty have within them as their underlying problem or accompanying their difficulty factional disputes.  Frequently those differences are accompanied by intimidation or actual physical violence such that the minority are afraid to express a point of view in a public forumcontrary [sic] to that of the majority.  In those cases frequently the rules of a Corporation can work to entrench the position of the majority, such as where elections are to be on show of hands rather than by secret ballot.

6.For me to fulfil my role under the Act in an effective way I need to be independent and have flexibility in determining the best way to meet a particular Corporations difficulties. As part of that there is a need for wide powers to determine the most appropriate form of an election to be conducted under section 77D of the Act and in deciding the details of that elections particular requirements. That although there may be a number of alternative ways to have an election, namely solely by post, at a polling booth, or at a gathering of members, if the last mentioned method was chosen and it alone was subject to the rules of the Corporation that would significantly interfere with the flexibility of my powers under the section.

7.That if I am bound by the Corporation’s rules in conducting an election at a gathering of its members, in any cases the rules themselves would render the exercise futile.  For example some Corporations have quorum requirements under their rules for general meetings which they are unable to meet.  If the Registrar’s election were regarded as a Special General Meeting to which that requirement was applicable an election for those Corporations could not proceed if a quorum was not obtained.  Some Corporations rules provide for voting by show of hands which for the reasons outlined above I may find unsatisfactory in an election conducted by me.  Some Corporations rules provide for the election of committee members at separate regional meetings of groups within the Corporation and subsequent confirmation only of those members at a general meeting.  Some Corporations rules provide for its committee to be elected for more than one year with members serving different periods of time and elections to be annually on a rotation basis.  The rules do not otherwise cater for an interruption to this process.”

I should add that the respondent proposes that in the present case voting at the elections be by secret ballot. It will be apparent from the passages set out above that the respondent feels unconstrained by the Rules of each corporation in conducting an election under s 77D of the Act.

In the event, I have reached the firm conclusion that this case may be disposed of on this point. Section 77D was inserted in the Act by s 23 of the Aboriginal Councils and Associations Amendment Act 1992 (“Amendment Act”). That Act repealed the provisions that provided for judicial management following investigation by the Registrar and substituted the provisions relating to administration. I shall return later to the provisions of the Amendment Act.

The word "election" in s 77D is not defined by the Act, but it obviously takes its meaning from the context of the Act. The Rules of a corporation are of central importance under Pt IV of the Act. Section 43(2) provides that a corporation's affairs are to be regulated by its Rules. Section 43(3) provides:

“(3)     Subject to this Act and the regulations, the Rules referred to in subsection (2) shall make provision for and in relation to:
           (a)       the qualifications of members of the association;

(b)       the creation of the executive offices of the association and the           procedure for filling those offices;

(c)the procedure for the settling of disputes between the association and its members;

(d)the constitution of the Governing Committee of the association and the powers of that Committee;

(e)the procedure for the conduct of meetings of the Governing   Committee of the Association;

(ea)the matters for which the Rules are to provide under section 58A in relation to meetings of the association;

(f)the manner in which the funds of the association are to be     managed;

(g)       the method of altering the rules of the association, whether by          making new rules or by varying or rescinding rules in force;      and

(h)the method of altering the objects of the association;

and may make provision, not contrary to law, for and in relation to any other matter.”

The reference in para (ea) to “section 58A” should probably be to “section 58B”. Both of those sections were inserted by s 13 of the Amendment Act. Section 58A does not deal with meetings; s 58B does. It provides:

“58B.  (1)       Subject to this section, the Governing Committee of an Incorporated Aboriginal Association is to call and conduct annual general meetings and special general meetings of the Association as provided in the Rules.

(2)      An aggrieved member may at any time request the Committee to call a special general meeting.  The Committee must do so unless, on application by the Committee, the Registrar considers the request to be frivolous, unreasonable or contrary to the interests of the members of the Association.

(3)       The Registrar may call a special general meeting if the Committee has advertised it for a particular day but it has not been held for 14 days after that day.

(4)       The Registrar may call a special general meeting at any time if, in the opinion of the Registrar, there is a need to do so.

(5)       The Registrar may call a special general meeting if requested to do so in writing by whichever is the greater of:

(a)       5 or more members of the Association; or

(b)not fewer than 10% of the total number of members of the Association.

The Registrar is to conduct the meeting.

(6)       The Registrar is to determine the periods of notice for meetings called under subsection (4) or (5), having regard to the special needs of the Association.

(7)       Unless the Registrar determines otherwise, a member cannot vote at a meeting called by the Registrar if:

(a)the person became a member after the incorporation of the Association; and

(b)the person’s name does not appear on the latest list supplied to the Registrar under section 58(3) or (4).

(8)       In addition to any other matter relating to general meetings, the Rules must make provision for and in relation to:

(a)       the intervals between meetings;

(b)       quorums;

(c)       procedure;

(d)       voting by proxy.

(9)       If the Registrar delegates his or her powers under this section, references to the Registrar are to be read accordingly.”

It will be observed that the Rules are to provide for “the creation of the executive of the association and the procedure for filling those offices” (s43(3)(b)), the “constitution of the Governing Committee” (s 43(3)(d)), and “voting by proxy” at general meetings (s 58B(8)(d)). It is now convenient to notice s 49A of the Act, which provides:

“49A.  (1)       Where more than 75% of the members of an Aboriginal association agree, the Rules referred to in subsection 43 (2) may provide for the conferring of specified rights of membership of the association (other than the right to vote at meetings of the association and the right to stand for election to the Governing Committee of the association) on persons not entitled to become members of the association.

(2)       Where more than 75% of the members of an Incorporated Aboriginal Association agree, the rules of the Association may, subject to section 54 and the requirements of the Rules relating to alteration of the Rules, be altered to provide for the conferring of specified rights of membership of the Association (other than the right to vote at meetings of the Association and the right to stand for election to the Governing Committee of the Association) on persons not entitled to become members of the Association.”

The right to vote at meetings of an association and the right to stand for election to the Governing Committee of an association are thus singled out as the key rights of membership under the Rules. The Act clearly contemplates too that the Rules will provide for “election” to the Governing Committee.

I shall now turn to the Rules of these two corporations. They do not expressly deal with an election under s 77D of the Act. The Committee is provided for in rule 9. Relevantly that rule states:

“9.(1)The Governing Committee of the Association shall be a committee of not less than five members.

9.(2)The members of the Committee shall be elected at the first general meeting of the Association and thereafter at each annual general meeting and shall be eligible for re-election.  Except as otherwise provided in these rules, the members of the Committee shall hold office until the next annual general meeting.

9.(3)A person cannot be elected or hold office as a member of the Governing Committee if he has been convicted of an offence against a Commonwealth, State or Territory law and sentenced:

(a)to imprisonment for 3 months or longer if the offence involved fraud or misappropriation of funds;

(b)to imprisonment for one year or longer in the case of any other offence.

The conviction does not prevent the person from standing for election or being elected if at least 5 years have passed since the date of conviction and the person is not serving a term of imprisonment.

9.(4)A person ceases to be a member of the Governing Committee if the person:

(a)becomes bankrupt or insolvent under administration;

(b)becomes incapable of holding office because of a civil penalty disqualification by a Court.

9.(5)A member of the Committee shall cease to hold office if he ceases to be a member of the Association, or if he resigns his office, or if by reason of infirmity, absence for three consecutive meetings without reasonable cause or any other reason the Association is of the opinion that he has ceased to be an effective member of the Committee.

9.(6)If at any time the number of members of the Committee is less than five, an additional member or members may be appointed by the Committee to fill the vacancies and shall be eligible for re-election.  A Committee member appointed in this way shall hold office until the next annual general meeting and shall be eligible for re-election.

9.(7)There shall be a Chairperson, Secretary and Treasurer who shall be the office bearers and shall be elected by the members of the Committee at the first meeting of the Committee after the first general meeting of the Association and thereafter at the first meeting of the Committee after each annual general meeting of the Association and shall be eligible for re-election.

9.(8)Any vacancy in the office of an office bearer may be filled by the Committee.  The member of the Committee elected in this way shall retain the office of office bearer until the next election of office bearers and shall be eligible for re-election.

9.(9)The Association may by resolution, remove any office bearer before the expiration of his period of office, and may by simple majority at the same or any other general meeting appoint another person in his place.”

A minimum number of members is fixed by rule 9(1). The term of office is prescribed by rule 9(2). The provisions of ss 49B and 49E of the Act are reflected in rule 9(3) and (4)(a). Rule 9(6) requires the Governing Committee to fill casual vacancies where the number of members falls below the minimum. The procedure for filling the executive offices of the association is dealt with in rule 9(7), (8) and (9). The significance of rule 9(9) is that, not only may a bare majority of the association’s members determine at all times who occupy the executive offices, but that such control is to be exercised at general meetings of the association where voting by proxy must be permitted.

General meetings are dealt with in rule 15.  The election of members of the committee is part of the business of the annual general meeting.  Rule 15(3) provides in para (c) that “the procedures for elections shall be in accordance with a method approved by the Association and may be based on Aboriginal custom”.  There is no evidence before me that any particular “method” has been approved by either corporation.  Provisions as to notice and quorum are provided for under rule 15(6) and (13).  Voting at meetings is provided for by rule 16 and in particular, the first two sentences of rule 16(1) may be noted:

“Questions arising at any general meeting of the Association or any meeting of the Committee shall be decided by a majority of votes and each member present shall have one vote.  Voting shall be by show of hands unless the meeting otherwise decides a secret ballot is necessary.”

Although the respondent describes the election he proposes to hold as a “most important meeting for the Corporation” in his letter to Ms Beetson, he does not regard the event as a meeting called by him under s 58B of the Act. However, in the present case, I consider that the respondent is bound to exercise his power under s 58B(4) in order to conduct an election under s 77D of the Act. In doing so, he must also determine an appropriate period of notice under s 58B(6). I can briefly state my reasons for this view.

Of course, the Rules of each corporation may not control the meaning of the Act. Indeed, the Rules expressly acknowledge that “any inconsistency ... shall be resolved in favour of the Act”. But, as I have already mentioned, the Act entrenches key membership rights which are plainly based upon the assumption that the “election to the Governing Committee” is one of the matters for which provision will be made in the Rules of associations incorporated under Pt IV of the Act. Notwithstanding the appointment of an administrator under Pt V of the Act, those Rules remain in effect. After all, it is the respondent who had to be satisfied under
s 45(3)(b) of the Act that the Rules “make sufficient provision (as required by section 58B) to give the members effective control over the running of the association”. In the present case the elections need not await the next annual general meetings. Section 58B(4) may be utilized for the purpose of s 77D of the Act.

The election under s 77D is to “fill the offices” that became vacant under s 73 of the Act. Section 77D may also apply to Aboriginal Councils established by Pt III of the Act. The respondent always conducts the election of councillors of such Councils. Under s 21(2) and (3) of the Act the respondent is given a fairly free hand in relation to the first election of such councillors. But thereafter s 23 of the Act requires the Rules of an Aboriginal Council to make provision for those matters. In my view, the respondent is not at liberty in an election under s 77D of either “councillors” or “members of the Governing Committee” to fix the number of offices to be filled (that number being the number of the offices that were vacated) or to determine the manner in which the election is to be conducted where that topic is covered by the Rules of the relevant corporation. Had Parliament intended the respondent to be permitted to design his own election rules under s 77D, it would have made express provision along the lines of s 21 of the Act.

The Act evinces the plainest intention that members be given effective control over the running of associations incorporated under Pt IV. Section 58B is the core provision for the achievement of this goal. Parliament has required too that the Rules make provision for voting by proxy at general meetings. One may readily concede the force of some of the factors referred to by the respondent in his affidavit. But the answer is that such concerns must be addressed in the Rules, the content of which he determines under ss 45 and 54 of the Act. (Indeed, in the present case, a member is quite restricted in the number of proxies held.). Against this scheme, reinforced by the Amendment Act in 1992, the question is: must an election under s 77D be held at a general meeting of each of the corporations? I think that question must be answered in the affirmative because, only then, will a member who is unable to attend in person at the time and place fixed by the respondent for the elections (whether on account of work commitments, illness or any other reason) be able to exercise the key rights of membership recognized in s 49A of the Act.

There is provision under the Rules for an association to decide at a general meeting that voting should be by secret ballot.  The Rules are, broadly speaking, drawn consistently with a majoritarian view of corporate governance and the familiar way in which companies appoint each director by separate resolution.  (The members may also approve a method based on Aboriginal custom, but there is no evidence of this having been done.) 

The respondent has not revealed his proposed election rules.  It is not open to him to disregard the provisions of the Rules and to choose a different system of voting such as, for example, cumulative voting, that has not been approved by the members of the association.  The “constitution” of the Governing Committee, including the manner of its election, is provided for in the Rules.  They provide how the Governing Committee, in whom the conduct of the affairs of the corporation will in due course vest under s 77E, is to be elected.

It follows that, in my view, the elections that the respondent proposes to conduct tomorrow may not proceed because such elections must take place at a general meeting of the relevant corporation.  It remains to consider the appropriate relief.

(Counsel were heard on the form of orders.)

I make the following orders:

1. The elections to fill the offices of the members of the Governing Committees of the Northern Star Aboriginal Corporation and the North Star Construction Aboriginal Corporation be held at a general meeting of each corporation.

1. The respondent pay the applicant’s costs.

I certify that this and the preceding twelve (12) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam

Associate:

Dated:            10 November 1997    

Counsel for the applicant:	G C  Jones
Counsel for the respondent:	J J  Graves SC and P J  Renehan
Solicitor for the respondent:	Australian Government Solicitor
Date of hearing:	10 November 1997
Date of judgment:	10 November 1997