James, in the matter of Waminda Aboriginal Corporation (under Special Administration) ICN 1383, v Waminda Aboriginal Corporation (under Special Administration) ICN 1383

[2008] FCA 1389

FEDERAL COURT OF AUSTRALIA

James, in the matter of Waminda Aboriginal Corporation (under Special Administration) ICN 1383, v Waminda Aboriginal Corporation (under Special Administration) ICN 1383 [2008] FCA 1389

IN THE MATTER OF WAMINDA ABORIGINAL CORPORATION (UNDER SPECIAL ADMINISTRATION) ICN 1383
JACK ROBERT JAMES AND BRIAN KEITH MCMASTER IN THEIR CAPACITIES AS SPECIAL ADMINISTRATORS OF WAMINDA ABORIGINAL CORPORATION (UNDER SPECIAL ADMINISTRATION) ICN 1383 v WAMINDA ABORIGINAL CORPORATION (UNDER SPECIAL ADMINISTRATION) ICN 1383

WAD 159 OF 2008

SIOPIS J
25 AUGUST 2008
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 159 OF 2008

IN THE MATTER OF WAMINDA ABORIGINAL CORPORATION (UNDER SPECIAL ADMINISTRATION) ICN 1383

BETWEEN:	JACK ROBERT JAMES AND BRIAN KEITH MCMASTER IN THEIR CAPACITIES AS SPECIAL ADMINISTRATORS OF WAMINDA ABORIGINAL CORPORATION (UNDER SPECIAL ADMINISTRATION) ICN 1383 Plaintiffs
AND:	WAMINDA ABORIGINAL CORPORATION (UNDER SPECIAL ADMINISTRATION) ICN 1383 Defendant

JUDGE:	SIOPIS J
DATE OF ORDER:	25 AUGUST 2008
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1.The defendant be wound up.

2.Jack Robert James and Brian Keith McMaster, of KordaMentha, Level 11, 37 St Georges Terrace, Perth, Western Australia, be appointed as joint and several liquidators of the defendant.

3.The costs of this application be payable as costs in the winding‑up, payable in priority, pursuant to s 556(1)(b) of the Corporations Act 2001 (Cth) from the assets of the defendant, in the event of the winding‑up of the defendant.

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

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 159 OF 2008

IN THE MATTER OF WAMINDA ABORIGINAL CORPORATION (UNDER SPECIAL ADMINISTRATION) ICN 1383

BETWEEN:	JACK ROBERT JAMES AND BRIAN KEITH MCMASTER IN THEIR CAPACITIES AS SPECIAL ADMINISTRATORS OF WAMINDA ABORIGINAL CORPORATION (UNDER SPECIAL ADMINISTRATION) ICN 1383 Plaintiffs
AND:	WAMINDA ABORIGINAL CORPORATION (UNDER SPECIAL ADMINISTRATION) ICN 1383 Defendant

JUDGE:	SIOPIS J
DATE:	25 AUGUST 2008
PLACE:	PERTH

REASONS FOR JUDGMENT

1. This is an application for the winding‑up of the defendant which is a corporation incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the CATSI Act). The application is made under ss 526‑1, 526‑5 and 526‑15(3) of the CATSI Act and s 556 of the Corporations Act 2001 (Cth). The plaintiffs were appointed as special administrators of the defendant by a delegate of the Registrar of Aboriginal and Torres Strait Islander Corporations pursuant to s 490‑1 of the CATSI Act.

2. The plaintiffs rely upon the affidavits of Jack Robert James, who is one of the joint plaintiffs, of 17 July 2008 and 31 July 2008, the affidavit of Giulia Yvonne Da Re of 8 August 2008 and the affidavit of Stephen French of 25 August 2008.

3. The evidence shows that the defendant is a corporation which is incorporated for the purpose of providing welfare services to Aboriginal people in Western Australia.  One of the primary objects of the defendant is stated in the rules of the defendant in the following terms:

   To provide direct relief from poverty, sickness, suffering, destitution and misfortune to all Aboriginal people in the State of Western Australia.

4. The rules go on to provide the fulfilment of that object includes providing “assistance and a support service to the aged, frail aged, families and disabled Aboriginal people of the Southern corridor of Perth, Western Australia”.

5. The defendant’s sole source of income was government funding.  However, the notes to the balance sheet of the defendant as at 9 April 2008 record that the Department of Health and Ageing, a Commonwealth agency, has a claim against the defendant in the sum of $61,129.  This claim arose from a review conducted by the Department of Health and Ageing prior to the appointment of the administrators for the period to 31 December 2007.  As a result of that review, the Department of Health and Ageing alleges that the defendant over‑claimed $61,129 in care subsidies.  The notes also record that the Department had advised the defendant that it would not meet any further claims, until that debt was paid.

6. Mr James said that all but $10,000 a month of government funding had been withdrawn, and that amount was not sufficient to cover the defendant’s operating costs.  He said that the plaintiffs had no option but to close the operations of the defendant, after they learned that no further government funding would be forthcoming.

7. The balance sheet shows that as at 9 April 2008 the defendant had a working capital deficiency of $130,674 and a net asset deficiency of $84,712.  Mr James, who is an insolvency practitioner, deposes that, in his view, the defendant was insolvent as at 9 April 2008 and is insolvent.  I accept the evidence of Mr James.

8. The evidence also shows that the application to wind‑up the defendant is supported by the Registrar of Aboriginal and Torres Strait Islander Corporations.  In addition, there was a special meeting of the defendant’s members held on 30 June 2008 which was conducted on an informal basis because it was inquorate.  Those members who did attend did not object to the plaintiffs’ recommendation that the defendant be wound up.

9. Further, the hearing of this application was advertised in The West Australian newspaper and there has been no opposition today to the application.

10. I am also aware of the evidence from Mr French, who is an officer of the Department of Health and Ageing, that the clients of the defendant who were in receipt of welfare services from the defendant and want to continue to receive welfare services have now been referred to, or are being assessed for referral to, an alternative service provider.

11. The application was also brought on the basis that the defendant should be wound up on a just and equitable basis because it is no longer able to meet its objects.  However, in light of my previous finding on insolvency, it is unnecessary for me to make a ruling on whether the facts are sufficient to satisfy the just and equitable principle.

12. I will grant relief in terms of the notice of motion.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

Associate:

Dated:        10 September 2008

Counsel for the Plaintiffs:	Ms GY Da Re
Solicitor for the Plaintiffs:	Lavan Legal

Date of Hearing:	25 August 2008
Date of Judgment:	25 August 2008