Bidjara Aboriginal Housing and Land Co Ltd v Sharma

[2005] FCA 1896

FEDERAL COURT OF AUSTRALIA

Bidjara Aboriginal Housing & Land Co Ltd v Sharma [2005] FCA 1896

BIDJARA ABORIGINAL HOUSING & LAND COMPANY LIMITED v CHANDRA SHARMA, THE COMMONWEALTH OF AUSTRALIA AND ROD ALFREDSON

Q 113 OF 2003

DOWSETT J
1 DECEMBER 2005
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 113 OF 2003

BETWEEN:

BIDJARA ABORIGINAL HOUSING & LAND COMPANY LIMITED
APPLICANT

AND:

CHANDRA SHARMA
FIRST RESPONDENT

THE COMMONWEALTH OF AUSTRALIA
SECOND RESPONDENT

ROD ALFREDSON
THIRD RESPONDENT

JUDGE:

DOWSETT J

DATE OF ORDER:

1 DECEMBER 2005

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1.The application for a declaration as to the proper construction of s 44 of the Finance Management and Accountability Act 1997 (Cth) be dismissed.

2.The stay of the order for costs made on 30 July 2004 be dissolved.

3.The application otherwise be dismissed.

4.The applicant pay the respondents’ costs of these proceedings, including reserved costs, such reserved costs to include the respondents’ costs of and incidental to the notice of motion filed on 17 September 2004.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 113 OF 2003

BETWEEN:

BIDJARA ABORIGINAL HOUSING & LAND COMPANY LIMITED
APPLICANT

AND:

CHANDRA SHARMA
FIRST RESPONDENT

THE COMMONWEALTH OF AUSTRALIA
SECOND RESPONDENT

ROD ALFREDSON
THIRD RESPONDENT

JUDGE:	DOWSETT J
DATE:	1 DECEMBER 2005
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. At some stage it was asserted that these proceedings were commenced pursuant to the Administrative Decisions Judicial Review Act 1977 (Cth) (the “ADJR Act”). Any such basis for the application has been abandoned today, as it apparently was when the proceedings were before Cooper J last year. It is now said to be merely a matter of construction.

2. The applicant is a corporation which, as its name implies, has been involved in the provision of housing and other facilities for Aboriginal people.  The first respondent is, or was, an officer of the Aboriginal and Torres Strait Islander Services (“ATSIS”), an organization set up by the Commonwealth Government, apparently by executive action, at the time at which the role of the Aboriginal and Torres Strait Islander Commission (“ATSIC”), a corporation established under the Aboriginal and Torres Strait Islander Commission Act 1989 (Cth) (the “ATSIC Act”), was being wound back. The third respondent was appointed by the Minister for Immigration, Multicultural Affairs and Indigenous Affairs to undertake an evaluation or audit of the operations of, amongst other organizations, the applicant in connection with various grants and/or loans made to it in previous years. On 11 April 2003 the third respondent wrote to the applicant, or its chairman, advising of his appointment:

   ‘... to undertake an evaluation/audit of the operations of the following organisations pursuant to paragraphs 76(1)(f) and (i) of the [ATSIC Act].’

3. The letter continued:

   ‘For the purposes of a particular evaluation/audit, the ATSIC Act provides authority to examine documents, to full and free access to the documents and to make copies or take extracts from documents, considered necessary for the purposes of the evaluation and/or audit. I am writing to seek your cooperation and assistance with providing the KPMG team with access to all relevant documents and files in respect of the Bidjara companies.’

4. A dispute subsequently arose between the applicant and the third respondent as to the range of the documents to which he was entitled. His claim to have access to such documentation appears to have been made pursuant to s 78A of the ATSIC Act. That is a general provision which I need not set out at this point. However such access was clearly sought for the purpose of carrying out the function conferred by subs 76(1) of the ATSIC Act and, in particular, pars 76(1)(f) and (i). That section conferred upon the Office of Evaluation and Audit (of which the third respondent was the Director) the function of:

   ‘(f)when requested to do so by the Minister or the Commission, to evaluate or audit the operations of a body corporate that has received one or more grants or loans from the Commission, but only to the extent that the evaluation or audit concerns those grants or loans.’

   and:

   ‘(i)when requested to do so by the Minister or the Commission, to evaluate or audit the operations of a borrower, being a body corporate one or more of whose loans have been guaranteed by the Commission, but only to the extent that the evaluation or audit concerns those guarantees.’

5. It seems that the applicant was granted land in Charleville upon which a building had been erected (the “property”).  The property was subsequently let, substantial rents being derived therefrom.  Such proceeds were used by the applicant for purposes which have been disclosed in a general way in the course of argument.  The dispute between the parties was as to access to information and documents concerning the disbursement of such income.  The first and second respondents, in particular, assert that the third respondent was entitled to such access in the course of carrying out his functions pursuant to s 76.  The applicant asserts that he was not so entitled. 

6. Before addressing that matter, I should consider another matter.  In February 2003, the applicant applied to ATSIS for a grant of funds.  On 14 July 2003 the first respondent wrote to the applicant offering a grant upon conditions which were listed elsewhere in the letter.  One of those conditions was set out in attachment 2 as follows.

   ‘(a)full and free access to the documents previously requested by the Director, OEA in the letter to you dated 11 April 2003 (and in subsequent correspondence) by close of business 31 July 2003.’

7. This was a reference to the third respondent’s attempts to obtain access to documents concerning disbursement of rental income derived from the property.  The reference to subsequent correspondence was to various letters in which that question was raised and disputed.  In other words the grant was offered upon condition that the applicant comply with the demand made by the third respondent for access to documentation relating to its expenditure of funds derived from letting the property.  The applicant submits that there was no power in the first respondent to offer a grant to the applicant upon such a condition.  It points only to s 44 of the Financial Management and Accountability Act 1997 (Cth) (the “FMA Act”) as being relevant to its submission.  It asserts that the relevant question is as to the proper construction of that section.  

8. The FMA Act applies generally to governmental agencies.  Section 44 provides:

   ‘(1)A Chief Executive must manage the affairs of the Agency in a way that promotes proper use of the Commonwealth resources for which the Chief Executive is responsible.

   (2)If compliance with the requirements of the regulations, Finance Minister’s Orders, Special Instructions or any other law would hinder or prevent the proper use of those resources the Chief Executive must manage so as to promote proper use of those resources to the greatest extent practicable while complying with those requirements.

   (3)      In this section:

   proper  use means efficient, effective and ethical use.’

9. Obviously s 44 does not, itself, deal with making grants.  However it may be accepted that it applies to the operations of ATSIS and to Mr Sharma’s function in making the offer of a grant.  However it is not, itself, authority for so doing.  Even if it were, it would confer authority in the broadest of terms.  In those circumstances it is difficult to see how such authority could be so limited as to exclude the condition imposed by the offer in question.

10. I accept for present purposes that there is a bona fide dispute between the parties as to whether or not the third respondent was entitled, pursuant to his powers under the ATSIC Act, to seek access to documents in connection with disbursement of rent moneys. However that does not lead to the conclusion that it was beyond power for the first respondent to impose, as a condition of any future grant from ATSIS, a requirement that such documents be provided. In the course of argument there was some hint of an argument of improper purpose, but it was not pursued in detail or by reference to the material. In the circumstances I dismiss the application for a declaration as to the proper construction of s 44 in connection with the offer made by the first respondent in the letter of 14 July 2003. No proper purpose would be served by any such declaration.

11. I return to the question of the third respondent’s claim to be entitled to access to the disbursement document. Pursuant to s 14 of the ATSIC Act, ATSIC may grant an interest in land to a body corporate for the purpose of furthering the social, economic or cultural development of Aboriginal persons or Torres Strait Islanders. A grant is subject to such terms and conditions as the Commission determines. Section 20 makes provision for enforcing those terms and conditions. On 2 April 1996, ATSIC offered to grant the property to the present applicant. The letter of offer which, together with an eventual acceptance and various other documents, became a contract enforceable between the parties, provided that the purpose of the grant was to provide:

    ‘Administration and operational centre for ATSI organisations in Charleville district.’

12. The objectives of the grant were said to be:

    ‘ATSI self determination and self management centralised administration and provision of services.’

13. It was a condition of the offer that the property be used for the identified purpose and meet the identified objectives, that the terms and conditions in attachment A be observed and that there be a ‘purposes agreement’ with respect to the use of, and title to the property as set out in attachment B. 

14. The terms and conditions provided that the property not be used for any purpose other than that specified in the letter of offer as the purpose of the grant.  The grantee, that is the applicant, agreed to keep the property in good and tenantable repair, to pay on time all levies, rates and charges payable in connection with the property which, if not paid, might become a charge on the property, not to change the designated use of the property and not to dispose of, sell or otherwise transfer, lease, sublease, mortgage, encumber or otherwise part with possession of the property, other than with the prior consent of ATSIC.  The applicant also undertook to insure the property and to keep it insured.  In the event of default in complying with any term or condition of the grant, ATSIC might give written notice under s 20 of the Act, to which I have previously referred.  The only other term which may be relevant is cl 9.1 which provides:

    ‘The Grantee acknowledges the Commission may at any time conduct reviews of the Grantee's financial and operational management and such other matters as the Commission decides.  The Grantee must make available to the Commission all information and documentation relating to the Grant, and other grants made by ATSIC, the Commonwealth Department of Aboriginal Affairs and the Aboriginal Development Corporation and such other information as the Commission requests.  The Grantee will permit the Commission's officers and agents to enter into premises occupied by the Grantee and provide copies of documentation as required by the Commission.’

15. The property has been let to various agencies of the kind contemplated by the letter of offer.  Such letting has produced, as I infer, quite substantial income for the applicant.  It may well be that it was not originally contemplated that there would be any such income, or perhaps quite so much income, the primary purpose being occupation of the property by Aboriginal organizations, rather than letting for a profit.  Nonetheless, as I have said, it seems that significant income is being received.

16. Section 76(1)(f) of the ATSIC Act provides that the Office of Evaluation and Audit may be requested by the Minister or the Commission to evaluate or audit the operations of a body corporate that has received one or more grants from the Commission, but only to the extent that the evaluation or audit concerns those grants or loans. For present purposes, it has not been suggested that there is any relevant distinction between an evaluation and an audit. It is accepted, as I understand it, that the applicant has received a grant, namely the grant of the property, from the Commission. It follows that the Office of Evaluation and Audit has been validly requested by the Minister to evaluate or audit the operations of the applicant, to the extent that such evaluation or audit concerns the grant. The matter in dispute between the parties is whether the power to evaluate or audit extends to the disbursement of income derived from the property by way of rental. Section 78A of the Act provides:

    ‘For the purposes of a particular evaluation or audit, the Director of Evaluation and Audit or an authorised person may examine documents relating to the individual or body concerned.’

17. Subparagraph (5) provides:

    ‘For the purposes of performing the function conferred by subsection (3), the Director of Evaluation and Audit or the authorised person:

    (a)is entitled, at all reasonable times to full and free access to documents relating to the individual or body;  and

    (b)may make copies or take extracts from any such document; 

    and

    (c)may require a person:

    (i)        to answer such questions;  and

    (ii)       to produce such documents in the person's possession or to which the person has access;

    as the Director of Evaluation and Audit or the authorised person, as the case requires, considers necessary for that purpose.’

18. In the present case, the Minister’s request was directed to Mr Alfredson, the third respondent, who was the Director of the Office of Evaluation and Audit.  Mr Alfredson and those assisting him have sought information and access to documents concerning the disbursement of moneys derived from rental of the property.  The applicant has disputed their entitlement to such information and access.  The present application is for a declaration as to such entitlement.  The applicant’s argument is quite simple.  It is that pursuant to par 76(1)(f) the third respondent may inquire into the receipt of rental, but not as to its disbursement.  The applicant was somewhat equivocal in its submissions as to the legal and equitable ownership of such income.  It is not clear to me whether it accepts that it is held for the purposes specified in the original grant and agreement, or whether it claims to be entitled to disburse it as it see fit. 

19. Recital 2 to the purposes agreement referred to above recites that the grantee has agreed that the property shall be used:

    ‘... to further the economic, social and cultural development of Aboriginal and Torres Strait Islander people by advancing the objects of the Grantee as specified in its incorporation document (“the designated use”).’

20. Unfortunately, the incorporation document is not before the Court.  However that is not a serious disadvantage for present purposes.  It is clear that the parties agreed that the property be used for the specified purpose.  The objects of the applicant, as specified in the incorporation document, could only further refine or expand the objects for which the property is to be used, within the general description contained in recital 2.  The notion of using land is an elastic one, but it is certainly wide enough to include letting it.  That is one of the uses to which the property is being put, although it is also being used to provide offices for Aboriginal organizations.  Letting of the property will only be a permitted use if it is within the prescribed uses in the grant and other documents.  It follows that the income derived from the property is, itself, impressed with the limitation referred to in recital 2 and in the letter of offer.  Use of the income must be for a purpose which will further the economic, social and cultural developments of Aboriginal and Torres Strait Island people.

21. If it is accepted that the purposes to which such income may be put are limited by the original agreement then there can, to be mind, be no doubt that the audit function provided for in par 76(1)(f) must include ensuring that income has been disbursed in accordance with the imposed purpose.  If that is so, and I consider that it is, then it follows that the applicant must fail in this application.  I have deliberately avoided reference to trusts in these reasons, preferring to base my reasons on the statute and relevant documents.

22. It is also clear that there are other obligations imposed upon the applicant with respect to the property.  It must meet maintenance and insurance costs.  Such outgoings are probably not minimal.  In those circumstances, it would also seem to me to be within the remit of the auditor to ensure that appropriate arrangements are being made for the funding of such maintenance and insurance.  The ultimate destination of rental would be relevant to that issue.  It is true that such outgoings might be funded from other sources.  However it would be a matter of concern with respect to the use of the property if income from it were being disbursed without other appropriate arrangements being in place.  For that reason, too, I consider that the inquiry as to disbursement of income was a relevant one, having regard to the duty imposed by s 76.

23. Finally, cl 9.1 contemplates a substantial range of inquiries which might be made by the Commission in connection with the financial and operational management of the applicant. The applicant submits, both with respect to cl 9.1 and with respect to s 78A, that the relevant powers must be read down to reflect the limitations inherent in par 76(1)(f). Whilst there may be substance in that argument, it does not lead to the provisions being read down to the extent urged by the applicant. Of course, cl 9.1 is not directly relevant because it concerns powers of the Commission, rather than powers of the Minister. It is the Minister who has made the relevant appointment in this case. However the clause gives some indication of the range of inquiries which might be appropriate in order to ensure that the purpose of the grant is being observed by the applicant.

24. In the circumstances, the application must be dismissed.  The stay of the order for costs made on 30 July 2004 will be dissolved.

25. Subject to one submission, the respondents should have their costs of the proceedings, including reserved costs.  Mr Stephens submits that this is in the nature of a test case and is of particular importance, particularly to the applicant or, perhaps, to the people which it represents in one way or another.  I give weight to that submission.  I can see that there are elements of this case which might give it a broader significance.  However it is always difficult to know just how important any particular case may be to persons other than the immediate parties.  There is, in my view, a significant danger in allowing a party to assert a broad public interest in proceedings which have a direct personal interest for that party.  It is a very easy assertion to make and not always easy to displace.  In general, an unsuccessful party should expect to pay the costs of the proceedings.  Without bringing any particular preconception to the matter, I consider that such an order is proper in this case.  I order that the applicant pay the respondents’ costs of these proceedings, including reserved costs.

26. There is an issue concerning the costs of a notice of motion which was filed on 17 September 2004, returnable on 22 September.  I gather from what has been said by counsel for the applicant that Cooper J considered the motion and dismissed it.  That occurred on the same day as his Honour eventually heard final argument in this matter and reserved it for further consideration.  I infer that his Honour intended that any costs of and incidental to the notice of motion be reserved.  Those costs will be included in the order which I have made as to the costs of the proceedings generally.

I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated:             23 December 2005

Counsel for the Applicant:

Mr L Stephens

Solicitor for the Applicant:

Clewett Corser & Drummond

Counsel for the Respondents:

Mr R Tracey QC

Ms L De Ferrari

Solicitor for the Respondents:

Australian Government Solicitor

Date of Hearing:

1 December 2005

Date of Judgment:

1 December 2005