Malone v B&M Aboriginal Corporation (In Administration)

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FEDERAL COURT OF AUSTRALIA

Malone v B&M Aboriginal Corporation (In Administration) [2025] FCAFC 24

Appeal from: QGC Pty Limited v Alberts (No 5) [2024] FCA 139
File number(s): QUD 143 of 2024
Judgment of: O'BRYAN, HALLEY AND HORAN JJ
Date of judgment: 6 March 2025
Catchwords: NATIVE TITLE – where Indigenous Land Use Agreement (ILUA) required payments to be made by a petroleum exploration and production company to a nominated entity established for the benefit of families comprising native title claim group – where the nominated entity went into liquidation and the company commenced an interpleader proceeding under Part 18 of the Federal Court Rules 2011 (Cth) to enable a determination to be made of the proper recipients of the payments – where payments due under the ILUA paid into Court – whether nominated entity entitled to receive payments held by the Court
Legislation:

Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) ss 521.1, 576.15(6)

Corporations Act 2001 (Cth) ss 436A, 447A(1), 447C(2)

Native Title Act 1993 (Cth) ss 24CC, 24CD, 24EA, 80, 85A, 199B

Federal Court Rules 2011 (Cth) rr 18.01, 18.03
Cases cited:

Burragubba v State of Queensland (2015) 236 FCR 160

Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266

Conlon v QGC Pty Limited (No 2) [2017] FCA 1641

Corunna v South West Aboriginal Land and Sea Council (No 2) (2015) 235 FCR 53

Fesl v Delegate of the Native Title Registrar (No 2) (2008) 173 FCR 176

Harmer v Federal Commissioner of Taxation (1991) 173 CLR 264

JKB Holdings Pty Ltd v De La Vega [2013] NSWSC 501

Lardil Peoples v State of Queensland (2001) 108 FCR 453

Malone v B&M Aboriginal Corporation (in Administration) [2024] FCA 270

Murray v Native Title Registrar [2003] FCA 45

O’Mara v Minister for Lands (2008) 167 FCR 145

QGC Pty Limited v Alberts [2020] FCA 1869

QGC Pty Limited v Alberts (No 2) [2021] FCA 540

QGC Pty Ltd v Alberts (No 3) [2022] FCA 141

QGC Pty Limited v Alberts (No 4) [2022] FCA 1590

QGC Pty Limited v Alberts (No 5) [2024] FCA 139

Division: General Division
Registry: Queensland
National Practice Area: Native Title
Number of paragraphs: 160
Date of hearing: 19 August 2024
Counsel for the Applicants: P Trout
Solicitor for the Applicants: Trevor Hauff Lawyers
Counsel for the Respondent: D Elliott
Solicitor for the Respondent: Piper Alderman

 

ORDERS

QUD 143 of 2024
BETWEEN:

CHRISTINE MALONE

First Applicant

BRENT DAYLIGHT

Second Applicant

CHERETA DAYLIGHT (and others named in the Schedule)

Third Applicant
AND:

B&M ABORIGINAL CORPORATION (IN ADMINISTRATION) (ICN 9678)

Respondent

ORDER MADE BY:

O'BRYAN, HALLEY AND HORAN JJ

DATE OF ORDER:

6 MARCH 2025

THE COURT ORDERS THAT:

1.Leave to appeal be granted.

2.The appeal be allowed.

3.Orders 2, 3, 5 and 6 of the orders of the Court made on 26 February 2024 in QUD 334 of 2018 be set aside.

4.The interlocutory application dated 1 December 2023 filed on behalf of the respondent be dismissed.

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Details
Case
[2025] FCAFC 24
Decision Date

CaseChat Overview and Summary

In Malone v B&M Aboriginal Corporation (In Administration), the appellants challenged the primary judge’s orders in an interpleader proceeding under Part 18 of the Federal Court Rules 2011 (Cth). The dispute arose from an Indigenous Land Use Agreement (ILUA) which required a petroleum exploration and production company to make payments to a nominated entity established for the benefit of families comprising the native title claim group. The nominated entity, B&M Aboriginal Corporation, went into voluntary administration, leading to the interpleader proceeding to determine the proper recipients of the payments due under the ILUA. The primary judge held that B&M Aboriginal Corporation (ICN 9678) was entitled to the funds paid into Court on behalf of the Daylight family, as their entitlement to the funds had crystallised before B&M Aboriginal Corporation entered into voluntary administration. The appellants argued that the primary judge erred in concluding that B&M Aboriginal Corporation was entitled to the funds, contending that the entry of B&M Aboriginal Corporation into administration disqualified it from receiving funds under the ILUA.

The central legal issues before the court were whether the primary judge erred in concluding that B&M Aboriginal Corporation was entitled to the funds and whether the entry of B&M Aboriginal Corporation into administration disqualified it from receiving funds under the ILUA. The court found that the primary judge did not err in concluding that B&M Aboriginal Corporation was entitled to the funds. The court held that B&M Aboriginal Corporation’s entitlement to the funds had crystallised before it entered administration, and therefore, the entry into administration did not affect the validity of the prior entitlement. The court further held that the decision in QGC No 2 did not apply because it dealt with the consequences of the sole nominated entity going into liquidation where payments from QGC to the nominated entity were pending, which was a different issue. The court also noted that the administrator intended to recommend that the voluntary administration should end if the funds were paid to B&M Aboriginal Corporation, indicating that B&M Aboriginal Corporation had standing to seek an order giving effect to the orders of Rares J.

In light of the above, the court allowed the appeal, set aside the orders made by the primary judge, and dismissed the interlocutory application filed on behalf of the respondent. The court also remitted certain paragraphs of the interlocutory application filed on behalf of the applicants to the primary judge for further hearing and determination. The court ordered that each party file a written submission with respect to the costs of the appeal, to be determined on the papers.

Orders

Orders of the court

1. Leave to appeal be granted.

2. The appeal be allowed.

3. Orders 2, 3, 5 and 6 of the orders of the Court made on 26 February 2024 in QUD 334 of 2018 be set aside.

4. The interlocutory application dated 1 December 2023 filed on behalf of the respondent be dismissed.

5. Paragraphs 3 to 7 of the interlocutory application dated 9 February 2024 filed on behalf of the applicants be remitted to the primary judge for further hearing and determination in accordance with the reasons of this Court.

6. Within 14 days of the date of these orders, each party file and serve a written submission with respect to the costs of the appeal limited to 3 pages.

7. The question of the costs of the appeal be determined on the papers.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Those competing applications were the subject of the determination by the primary judge.Decision and reasons of the primary judge The primary judge heard the competing applications on 26 February 2024 and delivered judgment on the same day. Her Honour relevantly made the following orders (with the applicants being referred to as the “Daylight Interested Parties”):1. Pursuant to r 9.05 of the Federal Court Rules 2011 (Cth), Margaret Hornagold, Christine Malone, Dorothy Daylight, Brent Daylight, Chereta Daylight and the Daylight United Aboriginal Corporation (ICN 10168) be joined as interested parties (the Daylight Interested Parties).2. Orders 1 and 2 of the Orders of the Court made on 2 March 2023 be set aside.3. The funds held by the Court on behalf of B&M Aboriginal Corporation (ICN 9678) pursuant to Orders 3 and 5 made by the Court on 3 February 2023, plus any interest accrued from the funds being held by the Court, be paid to Bruce Gleeson in his capacity as voluntary administrator of B&M Aboriginal Corporation (ICN 9678).…5. The Daylight Interested Parties’ application for orders sought in paragraphs 2 – 6 of their interlocutory application lodged on 9 February 2024 be dismissed.6. B&M Aboriginal Corporation (ICN 9678) and the Daylight Interested Parties bear their own costs of the interlocutory applications lodged on 1 December 2023 and 9 February 2023 respectively. The reasoning of the primary judge was brief. The core finding made by the primary judge, which was the basis for her Honour’s decision, was that, as at 3 February 2023, BMAC’s entitlement to the funds paid into Court on behalf of the Daylight family had “crystallised” and those funds were the property of BMAC. Her Honour concluded (at [15]):Order 3(b) required the present funds to be distributed to the 11 entities listed in Order 3(b), which included B & M, in 11 equal shares. There is no dispute that, as at the date of the Rares J orders, B & M was a Nominated Entity and had not yet entered administration. The voluntary administration commenced on 14 September 2023. By that point, the entitlement to those funds had crystallised. It was the property of B & M, and due performance of the administrator’s duties to the company in administration requires the interests of creditors in any such property to be taken into account (Australian Securities and Investments Commission (ASIC) v Bettles [2023] FCA 975 at [431], quoting Hausmann v Smith (2006) 24 ACLC 688 at [12]). The administrator also deposed in his affidavit lodged 1 December 2023 in the proceeding NSD1460/2023, at [54], that, “provided the funds held in Court … are paid” to B & M, he intended on recommending that the voluntary administration should end. B & M, through its administrator, has standing to seek an order giving effect to Order 3(b) of the Rares J Orders. Her Honour rejected a submission that the foregoing conclusion would be contrary to the decision of Rares J in QGC No 2 concerning the requirement in cl 1.2(a)(ii) of Annexure 3 of the ILUA that a Nominated Entity not be in administration, receivership or liquidation. Her Honour reasoned (at [17]):… As noted previously, there is no dispute that a company in administration cannot be a Nominated Entity. The question Rares J was dealing with in QGC (No 2) was determining the consequences of the sole Nominated Entity going into liquidation where payments from QGC to the Nominated Entity were pending. That is not the same issue that is before this Court. In the present case, there are extant, albeit suspended, Orders that payment out of Court be made to B & M, which was, at the time of those Orders, neither in administration nor insolvent, and was entitled to those funds as its property.Alleged errors on the face of the record

Ratio Decidendi

Legal Principle Established

On 14 September 2023, resolutions were passed by Ian Brown, Grace Munro, Sharmaine Dodds, Dion Munro and Ian Brown Jnr (purportedly as the directors of BMAC) that:(a)in their opinion, BMAC was insolvent or likely to become insolvent at some future time; and(b)BMAC appointed Bruce Gleeson as Administrator pursuant to s 436A of the Corporations Act 2001 (Cth) (Corporations Act) and s 521-1 of the CATSI Act. The minutes of the meeting record that the basis for appointing an administrator was that there was a concern over the insolvency of BMAC because Mr Sarai’s firm, Safe Harbour Lawyers, had issued invoices to BMAC for legal fees in an amount of approximately $60,000, with a further amount of $20,000 to be invoiced. It appears from the evidence that Mr Sarai acted as a legal adviser in relation to the decision to place BMAC into voluntary administration notwithstanding that Mr Sarai was the sole purported creditor of BMAC and it was the debt purportedly owing by BMAC to him which was the catalyst for the decision to place the company into voluntary administration. On 20 September 2023, Mr Gleeson wrote a letter to the Court stating that he had been appointed Administrator of BMAC. The letter asserted that BMAC “is one of the parties which is entitled to 1/11th equal share of the balance of the funds held by the Court and as Administrator I am able to recover such funds”. The letter requested payment of the monies held by the Court into BMAC’s bank account. It does not appear that Mr Gleeson’s letter was copied to the other parties to the proceeding or their legal representatives, including Mr Hauff. On 26 September 2023, a first meeting of the creditors of BMAC was conducted. The minutes of that meeting record that the only creditor of BMAC was Safe Harbour Lawyers who claimed an amount of approximately $60,000 for legal fees purportedly rendered to BMAC. On 12 October 2023, a Judicial Registrar of the Court replied to Mr Gleeson’s letter, copying other relevant parties, and requesting that Mr Gleeson ensure that future correspondence be copied to the active parties. The letter informed Mr Gleeson that:Your letter refers to the orders made on 3 February 2023. However, I also draw your attention to the orders made on 2 March 2023 and 17 August 2023. These orders are publicly available on the Commonwealth Court's Portal.There is currently no application before the Court in this proceeding. The administrator may make an application, if necessary. On 13 October 2023, Mr Hauff wrote to the Administrator stating that the entry of BMAC into administration would disqualify the company from receiving funds under the ILUA. On 1 December 2023, the Administrator filed an originating process in the New South Wales Registry of the Court seeking, in the alternative:(a)a declaration pursuant to s 447C(2) of the Corporations Act or s 576-15(6) of the CATSI Act that Mr Gleeson was validly appointed as voluntary administrator of BMAC on 14 September 2023;(b)an order pursuant to s 447A(1) of the Corporations Act (by operation of s 521-1(1) of the CATSI Act) that Part 5.3 of the Corporations Act is to operate in relation to BMAC as though Mr Gleeson was validly appointed as voluntary administrator on 14 September 2023.