Ngarla Mia Mia Karlak Aboriginal Co, Re

[2008] QSC 59

SUPREME COURT OF QUEENSLAND

CITATION:

Re Ngarla Mia Mia Karlak Aboriginal Corp [2008] QSC 59

PARTIES:

PETER ARMSTRONG AS DELEGATE OF THE REGISTRAR OF ABORIGINAL AND TORRES STRAIT ISLANDER CORPORATIONS
(applicant)
v
NGARLA MIA MIA KARLAK ABORIGINAL CORPORATION
(respondent)

FILE NO/S:

SC No 11267 of 2007

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

4 April 2008

DELIVERED AT:

Brisbane

HEARING DATE:

6 February 2008

JUDGES:

Mackenzie J

ORDERS:

1.   Ngarla Mia Mia Karlak Aboriginal Corporation be wound up;

2.   Brian Keith McMaster and Jack James of KordaMentha, Level 11, 37 St George’s Terrace, Perth, Western Australia, official liquidators, be appointed jointly and severally to act as official liquidators of the respondent.

CATCHWORDS:

ABORIGINALS – ABORIGINAL CORPORATIONS – where Aboriginal corporation failed to comply with a notice under s 439-20 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) to rectify non-compliance with the Act – where Aboriginal corporation failed to lodge financial reports – whether Aboriginal corporation should be wound-up – whether just and equitable to wind up – whether in public interest to wind up

Aboriginal Councils and Associations Act 1976 (Cth), s 60
Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth), s 26-5, s 439-20, s 526-5(j), s 526-5(k),
s 526-5(m), s 526-5(n), s 526-15, s 526-36
Corporations Act 2001 (Cth)

Australian Securities Commission v AS Nominees Ltd & Ample Funds Ltd (1995) 62 FCR 504, applied
Registrar of Aboriginal Corporations v Gundabooka Aboriginal Corporation [2002] FCA 1008, cited

COUNSEL:

G J Hamilton (sol) for the applicant
M Rinaudo Lewis (sol) for the respondent

SOLICITORS:

Minter Ellison for the applicant
Aboriginal and Torres Strait Islander Legal Service (Queensland South) for the respondent

1. MACKENZIE J:   

   This is an application to wind up an Aboriginal Corporation originally incorporated under the Aboriginal Corporations and Associations Act 1976 (Cth).  That Act was repealed by the Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Act 2006 (Cth), which was itself replaced by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (“the 2006 Act”).  In Part 11.5 of the last mentioned Act,

   
   

   s 26-5 sets out the grounds upon which an Aboriginal and Islander corporation may be wound up. The Corporations Act 2001 (Cth) winding up provisions, with substitutions provided for in s 526-35, applies to the winding-up of such a corporation.

1. The application was heard consecutively with a similar application to wind-up Nyunbuk Moorit Booja Aboriginal Corporation which, according to a report by KordaMetha to which reference will be made again later, is a related corporation to the corporation involved in this application.  According to the introduction to the report, the activities of the corporation centre around the Gibbigunya Farm situated at Quindanning in Western Australia.  The report says that Nyunbuk Moorit Booja Aboriginal Corporation holds title to assets used in farming activities carried on there, while Ngarla Mia Mia Karlak facilitates the farming business.  Quindanning lies in a generally south-easterly direction from Perth and in a generally north- easterly direction from Bunbury.

1. The applicant is the delegate of the Registrar of Aboriginal and Torres Strait Islander Corporations, who has standing to apply to wind-up an Aboriginal corporation pursuant to s 526-15. Four grounds are relied on. The first is a failure to comply with a notice under s 439-20 (s526-5(j)). The second is a failure to lodge financial reports under the Act (s 526-5(k)). The third and fourth are concerned with issues of whether it is in the public interest that the respondent be wound-up and it is just and equitable that it be wound-up (s 526-5(m) and (n)).

1. By way of factual background, on 7 March 2007, KordaMentha, Chartered Accountants, were engaged to conduct an examination of the corporation under s 60 of the Aboriginal Councils and Associations Act 1976 (Cth). The report was finalised on 20 May 2007. It identified a large number of breaches of the Act and/or rules by the corporation.

1. Amongst other things, there were difficulties in connection with identifying membership, the holding of Annual General Meetings over a number of years, the holding of committee meetings and the absence of accounts and records. 

1. Consequent on that report, the Registrar’s delegate served a notice pursuant to

   
   

   s 439-20 of the 2006 Act in which the identified non-compliance was itemised. The committee of the respondent was required to take action within specified time frames to rectify the non-compliance with the Act and rules and to rectify irregularities in the financial affairs of the corporation.

1. It appears from file notes and emails within the Registrar’s Office that Ms Valerie Hume had telephoned the applicant in July 2007 on behalf of the respondent after service of the Registrar’s notice.  The matters required to be addressed were explained to her by the applicant.  A bundle of documents, which did not address the breaches, was sent to him shortly afterwards.  In a further conversation a few days later, the requirements were explained again to her and to Mr Fairhead, Chairperson of the respondent corporation. 

1. On 24 September 2007, there was a further call by Ms Hume to one of the Registrar’s officers, Mr Powell, advising that it would not be possible to provide financial records by the due date of 28 September 2007.  She said auditors had been engaged in Perth.  She was told on this occasion that most of the requirements in the notice remained outstanding.  She said she would send further material to him.  On 3 October 2007 an extension of time within which to comply with the notice until 7 November 2007 was granted. 

1. On 29 October 2007, Ms Hume requested a further extension for an unspecified time.  She nominated a person associated with Indigenous Communities Volunteers who, she said, was helping.  After speaking to that person, Mr Powell advised Ms Hume that no further extension would be granted.  On 7 November 2007, a different firm of accountants from that originally mentioned by Ms Hume contacted Mr Powell.  From that conversation he learnt that the audit request was more limited than required by the notice.  On 30 October 2007, Ms Hume requested a further extension to 31 December 2007, which was refused.  Ignorance of what was required on the part of the committee of the respondent was pleaded, despite what the applicant believed was as much help as could be given in that regard. 

1. The present application was filed on 28 November 2007 and adjourned, by consent, on the return date, 16 January 2008, on the strict understanding that the additional three weeks before the matter came on before me, was to give the respondent a final opportunity to comply in all outstanding respects with the notice.  When an affidavit was sworn by Mr Lugnan, a Senior Investigator with the Office of the Registrar on 6 February 2008, a register of members had been provided but only limited documentation relevant to sheep and wool sales, but not constituting proper financial records, had been provided.  It was established that the requirements of the notice with respect to meetings and rule amendments had been complied with. 

1. At the hearing, a facsimile copy of an affidavit from Mr Fairhead was admitted by leave.  It deposed to meetings and resolutions being held and passed, addressing issues in the notice.  With respect to the financial records and auditing, the affidavit shows that the requirements of the notice have not been complied with.  There appears to be no prospect of compliance within a reasonable time.  The lack of training in keeping books of account on the part of the members and consequent inability to have records audited was relied on as the reason for failure to comply. 

1. I am satisfied that service of the application and the applicant’s affidavit was duly effected, on the basis of the affidavit of Kasia Rudnicki.  It is apparent from the discussion above that there has been a continuing failure to financially manage the corporation in the manner required by law.  I am satisfied that the grounds in

   
   

   s 526(j) and (k) are established, entitling the applicant to succeed.  It is only necessary for the applicant to make out any one of the grounds for winding up application to succeed. 

1. With regard to the third and fourth grounds, Finn J said in Australian Securities Commission v AS Nominees Ltd & Ample Funds Ltd (1995) 62 FCR 504 that, in relation to the just and equitable ground, relevant considerations include the public interest in a regulatory body securing compliance with the legislation it regulates, the question of whether there has been repeated breaches of the regulatory legislation, and the fact that a winding-up order is an appropriate expression of the lack of confidence in the conduct of management of the corporation, which sends a proper message to similar corporations. Finn J’s decision has been applied in relation to Aboriginal Corporations (Registrar of Aboriginal Corporations v Gundabooka Aboriginal Corporation [2002] FCA 1008, Tamberlin J). The same kind of considerations apply to a winding-up in the public interest. In my view both of these grounds have also been made out by the applicant.

1. It is therefore appropriate to make an order that the respondent corporation be wound-up.  It is ordered that:

1.          Ngarla Mia Mia Karlak Aboriginal Corporation be wound up;

2.          Brian Keith McMaster and Jack James of KordaMetha, level 11, 37 St George’s Terrace Perth, Western Australia, official liquidators, be appointed jointly and severally to act as official liquidators of the respondent.