Onus v Registrar of Aboriginal and Torres Strait Islander Corporations
[2017] FCA 798
•17 July 2017
FEDERAL COURT OF AUSTRALIA
Onus v Registrar of Aboriginal and Torres Strait Islander Corporations [2017] FCA 798
File number: VID 638 of 2017 Judge: O'CALLAGHAN J Date of judgment: 17 July 2017 Catchwords: ADMINISTRATIVE LAW – application to set aside decision to appoint special administrator under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) – where parties agree that decision should be set aside – where parties disagree on form of relief Legislation: Administrative Decisions Judicial Review Act 1977 (Cth), ss 5 and 16
Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth), ss 487–1, 499-5(3)(a) and (d), Division 508
Cases cited: Johns v Australian Securities Commission (1993) 178 CLR 408
Wattmaster Alco Pty Ltd v Button (1986) 13 FCR 253
Date of hearing: 13 July 2017 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 29 Counsel for the Applicants: Mr D M Ryan QC and Mr T Greenway Solicitor for the Applicants: Shayne Daley & Associates Counsel for the First Respondent: Mr C J Horan QC and Ms K Foley Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: Ms K Brazenor Solicitor for the Second Respondent: McCullough Robertson Lawyers ORDERS
VID 638 of 2017 BETWEEN: SANDRA ONUS
First Applicant
CHRISTINE COOKTOWN
Second Applicant
AND: REGISTRAR OF ABORIGINAL AND TORRES STRAIT ISLANDER CORPORATIONS
First Respondent
PAUL CASE
Second Respondent
JUDGE:
O'CALLAGHAN J
DATE OF ORDER:
17 JULY 2017
ON THE SECOND RESPONDENT UNDERTAKING:
1.To, within a reasonable time, exercise his power under s 499-5(3)(a) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) and take the necessary steps to reverse the changes to the constitution (the “Rule Book”) of the Gunditj Mirring Traditional Owners Aboriginal Corporation RNTBC (the corporation) approved on 14 June 2017.
2.To, within a reasonable time, exercise his power under s 499-5(3)(d) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) to appoint the applicants and Ms Denise Lovett as directors of the corporation.
3.To make no decision on whether Mr Damien Bell will recommence as Chief Executive Officer of the corporation for the remainder of his term as special administrator of the corporation, being until 25 August 2017.
THE COURT ORDERS THAT:
1.The decision of the first respondent of 12 June 2017 to put the corporation in special administration, and to appoint the second respondent as special administrator for a period ending on 15 December 2017, be set aside with effect from 25 August 2017.
2.There be no order as to the second respondent’s costs of the application.
3.The applicants and the first respondent each file a short outline of submission in relation to the question of costs within 7 days.
4.Liberty to apply to any party on the giving of 48 hours’ notice in writing.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
O’CALLAGHAN J:
This is an application for review of a decision made on 12 June 2017 by a delegate of the first respondent (the registrar), pursuant to s 487–1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the CATSI Act), to place the Gunditj Mirring Traditional Owners Aboriginal Corporation RNTBC (the corporation) in special administration and to appoint the second respondent (the special administrator) as special administrator of the corporation for a period ending on 15 December 2017 (the decision).
The corporation, which is based in Heywood in Victoria, was registered in 2006 and has over 450 members from 14 family clan groups. Following a consent determination of this Court in 2007, recognising the Gunditjmara people’s native title rights over close to 140,000 hectares of land in southwest Victoria and extending into South Australia, the corporation was appointed as the registered native title body corporate for the Gunditjmara people. The corporation is also a registered aboriginal party under the Aboriginal Heritage Act 2006 (Vic), with statutory responsibility for the management of the cultural heritage and objects of the Gunditjmara people.
The special administrator commenced to carry out his functions immediately upon his appointment. On 13 June 2017, he attended the corporation’s office, met with the corporation’s bank manager in order to secure the corporation’s bank accounts, changed the signatories on the bank accounts, held a meeting with the available staff of the corporation, gained access to the financial records, carried out an initial review of the corporation’s constitution (referred to by the parties, and in the document itself, as the “Rule Book”), appointed external lawyers, and reviewed and paid all outstanding accounts. The special administrator also sought and obtained from the registrar approval to change the Rule Book in a form proposed by the special administrator.
After completion of an initial three-day visit, the special administrator determined, among other things, that the corporation was solvent and that it appeared to be well run.
The special administrator filed his first monthly report with the first respondent on 10 July 2017 in which he said, among other things, that he had “been operating the corporation ‘business as usual’ to the best extent [he could]”. That report recorded that the Chief Executive Officer of the corporation, Mr Damien Bell, had been stood down from his position on 6 June 2017 and that, as at the date of the report, the special administrator “[had] not made a final decision on whether Mr Bell will recommence as CEO…I have decided to wait until the outcome of…[this proceeding]…before following up on this information and making a final decision on whether Mr Bell can officially recommence his position as CEO”. Mr Bell’s conduct as Chief Executive Officer had been, and remains, the subject of controversy between him and the corporation, including in a proceeding commenced in the Supreme Court of Victoria by the corporation against him.
By an application dated 14 June 2017, the applicants, who are two of three former directors of the corporation (the applicants), sought judicial review of the decision under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act).
On 15 June 2017 this proceeding was listed for trial before me commencing on 13 July 2017, on an estimate of two days.
On 10 July 2017, the Australian Government Solicitor, acting on behalf of the registrar, wrote to the solicitors for the applicants informing them that the registrar agreed that the decision should be set aside, effective from 25 August 2017. The relevant part of the letter is as follows:
1.We are instructed that the First Respondent will agree to orders setting aside the decision of the first respondent’s delegate made on 12 June 2017 to place the Gunditj Mirring Traditional Owners Aboriginal Corporation RNTBC (the Corporation) under special administration and to appoint the Second Respondent as the special administrator, with effect from 25 August 2017. The First Respondent will also agree to an order that he pay the Applicants’ costs of the proceeding (to be taxed in default of agreement).
2.The First Respondent understands that if such orders are made by consent, then the Second Respondent proposes to:
Ÿexercise his power under s 499-5(3)(d) of the [CATSI Act] to appoint the Applicants, and Denise Lovett [the other director before the appointment of the Special Administrator], as directors of the Corporation; and
Ÿtake the necessary steps to reverse the changes to the Corporation’s Rule book approved on 14 June 2017.
The applicants did not respond to that offer until the matter came on for hearing on 13 July 2017.
At the hearing on 13 July 2017, the registrar sought orders to the following effect:
(1)That the decision of the delegate of the first respondent dated 12 June 2017, to place the corporation under special administration and to appoint the second respondent as special administrator, be set aside with effect from 25 August 2017.
(2)That the first respondent pay the applicants’ costs of the application to 11 July 2017, to be taxed in default of agreement.
Although the written submissions filed on behalf of the registrar may have been read as asserting that the registrar was intent on issuing a further show cause notice pursuant to the procedure under Div 487 of the CATSI Act (the same type of notice that preceded the making of the decision the subject of this proceeding), during the course of his submissions on 13 July 2017, senior counsel for the registrar, Mr Horan QC, who appeared with Ms Foley, made it clear that the registrar had not determined whether to issue such a show cause notice or whether the corporation “should be returned to its usual governance arrangements”.
The registrar submitted that, having regard to the circumstances of the corporation immediately prior to the decision, including the ongoing effect of disputes among officers and members of the corporation, it would be in the best interests of the corporation and its members to allow the special administrator to continue his work until 25 August 2017, despite the admitted invalidity of the decision to appoint him.
In that regard, the registrar relied on the undisputed proposition that s 16(1) of the ADJR Act gives to the Court a wide discretion as to the order that is appropriate to be made, including that it is consistent with the scope and purpose of that Act that an order nullifying an invalid decision “should nevertheless take effect from some later date”: see Wattmaster Alco Pty Ltd v Button (1986) 13 FCR 253 at 256 per Sheppard and Wilcox JJ.
Section 16(1) of the ADJR Act relevantly provides:
Powers of the Federal Court and the Federal Circuit Court in respect of applications for order of review
(1)On an application for an order of review in respect of a decision, the Federal Court … may, in its discretion, make all or any of the following orders:
(a)an order quashing or setting aside the decision, or a part of the decision, with effect from the date of the order or from such earlier or later date as the court specifies;
…
(c)an order declaring the rights of the parties in respect of any matter to which the decision relates;
(d)an order directing any of the parties to do, or to refrain from doing, any act or thing the doing, or the refraining from the doing, of which the court considers necessary to do justice between the parties.
…
The applicant sought orders to the following effect (the proposed orders):
1.The decision of the registrar of 12 June 2017 to put the corporation in special administration and the appointment of the second respondent as the special administrator for a period ending on 15 December 2017 be set aside with effect from 13 August 2017.
2.The registrar, with effect from 13 August 2017, revoke his approval given on 14 June 2017 to the changes to the rules of the corporation made by the special administrator on 13 June 2017 and give a fresh approval to the rules of the corporation as in force on 12 June 2017 and as first approved by a delegate of the registrar on 29 May 2012.
3.It be declared that the vacating by the decision of the office of a director of the corporation of each of Lorraine Sandra Onus, Christine Cooktown and Denise Lovett shall cease to have effect from 13 August 2017, whereupon they shall be entitled to exercise all of the powers and functions of directors of the corporation and their respective offices of Chairperson, Secretary and Treasurer of the corporation until the expiration of their tenure at the 2017 annual general meeting (the AGM) of the corporation.
4.The special administrator, by 27 August 2017, prepare and deliver to each of the directors named in paragraph 3 of this order a set of accounts of the corporation as at 13 August 2017 in a form in which such accounts can be presented to the AGM.
5.The special administrator, on 13 August 2017, deliver up to the directors named in paragraph 3 of this order or a person nominated in writing by any two of them possession and control of the corporation’s common seal and its books, records and assets including the keys to its office at 44 Edgar Street, Heywood.
6.The special administrator lodge with the Heywood Branch of the Bendigo Bank on 13 August 2017 and instruction in writing to the effect that, as at that date, only any two of the directors named in paragraph 3 of this order shall be authorised under the rules of the corporation to sign any cheques or withdrawal forms or otherwise operate any account held by the corporation at that bank.
7.The special administrator refrain from the date of this order from making any change to the rules of the corporation and from making any appointment or entering into any contract or arrangement binding on the corporation after 13 August 2017.
8.The registrar pay the applicants’ costs of the application (including any reserved costs) to be taxed in default of agreement.
9.There be no order as to the special administrator’s costs of the application.
10.Liberty be reserved to any party to apply not less than 48 hours’ notice in writing to the other parties.
The parties did not adduce evidence about what tasks remain for the special administrator to carry out prior to the date upon which his appointment is to cease, be it 25 August 2017, as the registrar contends, or 13 August 2017, as the applicants contend. The suggested dates were put on the basis that they were, or should be taken to be, reasonable in all the circumstances. Ms Brazenor, who appeared for the special administrator, did, however, tell the Court that, on her instructions, 25 August would be the preferable date in order to permit him to hand back control of the corporation and convene a meeting of members in order to advise them as to what was happening.
The orders sought by the applicants raise issues about the extent to which s 16(1) of the ADJR Act permits the Court to fashion orders which alter or affect the statutory powers and obligations of the registrar to manage the affairs of the corporation during the remaining period of the administration.
Ultimately, senior counsel for the applicants, Mr Ryan QC, who appeared with Mr Greenway, did not press for the making of proposed orders 4, 5 and 6.
Mr Ryan submitted, however, in support of proposed orders 2, 3 and 7, among other things, that once there is a concession or a finding that a decision made under an enactment for the purposes of the ADJR Act should be set aside, “then the only concern of the Court is to mould the ancillary orders in a way that places the parties as far as possible in the position in which they were before the…decision was made” and that that “is the effect of the provisions of s 16 of the ADJR Act”.
Mr Horan, on the other hand, submitted that there was no proper basis for the making of any of the orders pressed by the applicants. He submitted that the orders do not give effect to any legal rights, entitlements or obligations of the parties (citing Johns v Australian Securities Commission (1993) 178 CLR 408 at 433-434) and that there is significant doubt about the proper source of power for the Court to make such orders. He also submitted that, in some respects, the proposed orders seek to “pre-empt or fetter” both the registrar and the special administrator in the performance of their statutory functions, and that that in turn raises questions as to both the power of the Court to make the proposed orders and the appropriateness of doing so. Further, Mr Horan pointed out that an administration of this type is not one under the general supervision of the Court, because it is a statutory administration conducted subject to and in accordance with the provisions of the CATSI Act: see Division 508.
By the end of the hearing, it was apparent that the applicants’ principal concerns in relation to the fashioning of an order permitting an orderly transition from the special administrator back to the corporation were threefold:
(1)that the old rules of the corporation (those in force as at 12 June 2017) be reinstated;
(2)that the applicants, and Ms Lovett, be reappointed as directors; and
(3)that the special administrator not make any decision with respect to the reinstatement or reappointment of Mr Bell as Chief Executive Officer during the remainder of the special administrator’s term.
The first two of those concerns had been met by the terms of the offer made on behalf of the registrar in the letter from the Australian Government Solicitor on 10 July 2017, as set out above. That offer had, however, expired by the date of the hearing.
Further, given the uncertainties concerning the power of the Court to make proposed order number 7, the applicants’ particular concerns in relation to Mr Bell, and the fact that an offer had already been made which was, in substance, identical to proposed orders 2 and 3, I asked counsel appearing for the special administrator to seek instructions as to whether the second respondent would give undertakings along the lines of paragraph 2 of the Australian Government Solicitor’s 10 July 2017 letter.
Specifically, the proposed undertakings were that the second respondent exercise his power under the CATSI Act to appoint the applicants, and Ms Lovett, as directors of the corporation and take the necessary steps to reverse the changes to the corporation’s
Rule Book approved on 14 June 2017. I also asked counsel for the special administrator whether the special administrator would undertake to make no decision on whether Mr Bell would recommence as Chief Executive Officer of the corporation during the remainder of his term as special administrator.
Counsel sought and obtained those instructions and gave undertakings on behalf of her client that, within a reasonable time, he would exercise his power to appoint the applicants and Ms Lovett as directors of the corporation and take the necessary steps to reverse the changes to the corporation’s Rule Book (as approved on 14 June 2017). Counsel also gave the undertaking proposed with respect to Mr Bell.
In those circumstances, it is not necessary for the Court further to explore or decide the question whether the Court has the power to make an order of the type proffered by the applicants as proposed order 7.
Even assuming that the Court had that power, and I express no view on the question, I would not, in the exercise of the Court’s discretion, make such an order because, in the absence of any evidence about what the special administrator must do, in the particular circumstances of this case, in order properly to fulfil his statutory obligations prior to the expiry of his term, the Court cannot know what effect or impact an order in the broad terms sought by the applicants would have on the ability of the special administrator properly to perform those functions. Further, and relatedly, the Court cannot know whether, and to what extent, such an order is capable of supervision. On those grounds alone, I would decline to make proposed order number 7.
As between the applicants and the first respondent, the question of costs remains to be determined. The applicants and the second respondent agree that there be no order as to the special administrator’s costs of the application.
For those reasons, and on the basis of the undertakings given by Ms Brazenor on behalf the second respondent, I propose to make the following orders:
(1)The decision of the first respondent of 12 June 2017 to put the corporation in special administration, and to appoint the second respondent as special administrator for a period ending on 15 December 2017, be set aside with effect from 25 August 2017.
(2)There be no order as to the second respondent’s costs of the application.
(3)The applicants and the first respondent each file a short outline of submission in relation to the question of costs within 7 days.
(4)Liberty to apply to any party on the giving of 48 hours’ notice in writing.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O’Callaghan. Associate:
Dated: 17 July 2017
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