Peter Armstrong as Delegate of the Registrar of Indigenous Corporations v Mooniemia Aboriginal Corporation

[2008] FCA 1134

FEDERAL COURT OF AUSTRALIA

Peter Armstrong as Delegate of the Registrar of Indigenous Corporationsv Mooniemia Aboriginal Corporation [2008] FCA 1134

PETER ARMSTRONG AS DELEGATE OF THE REGISTRAR OF INDIGENOUS CORPORATIONS v MOONIEMIA ABORIGINAL CORPORATION

WAD 142 OF 2008

GILMOUR J
24 JULY 2008

PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 142 OF 2008

BETWEEN:	PETER ARMSTRONG AS DELEGATE OF THE REGISTRAR OF INDIGENOUS CORPORATIONS Plaintiff
AND:	MOONIEMIA ABORIGINAL CORPORATION Defendant

JUDGE:	GILMOUR J
DATE OF ORDER:	24 JULY 2008
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1.Mooniemia Aboriginal Corporation be wound up pursuant to section 526-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).

2.Christopher John Munday and Brian Kevin Hughes be appointed jointly and severally as official liquidators of the defendant.

3.        The plaintiff's costs of the application be costs in winding up of the defendant.

AND IT IS HEREBY DECLARED that anything required or authorised by the Corporations Act to be done by a liquidator may be done by either one or both of the persons hereby appointed as liquidators.

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 142 OF 2008

BETWEEN:	PETER ARMSTRONG AS DELEGATE OF THE REGISTRAR OF INDIGENOUS CORPORATIONS Plaintiff
AND:	MOONIEMIA ABORIGINAL CORPORATION Defendant

JUDGE:	GILMOUR J
DATE:	24 JULY 2008
PLACE:	PERTH

REASONS FOR JUDGMENT

1. I made orders on 24 July 2008 that the defendant be wound up for reasons to be published later.  These are the reasons. 

2. The plaintiff seeks a winding up order of the defendant, Mooniemia Aboriginal Corporation (“the Corporation”) which is an Aboriginal Corporation incorporated in August 1986 under the Aboriginal Councils and Associations Act 1976 (Cth) (“the 1976 Act”). This Act was repealed on 1 July 2006 by the Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Act 2006 (Cth) (“the Transitional Act”) and has been replaced by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (“the Act”).

3. The Corporation has not entered an appearance although I am satisfied that it was served with the application and supporting affidavit material in accordance with s 8(1) of the Transitional Act.  The application was also advertised in ‘The Australian’ newspaper on Wednesday 9 July 2008.

4. The Corporation is:

   (a)       an Aboriginal association incorporated under the 1976 Act;

   (b)a ‘transitional corporation’ within the meaning of that term in Part 1 of Schedule 3 to the Transitional Act;

   (c)pursuant to subsection 3(1), Part 2 of Schedule 3 of the Transitional Act, taken to be registered as an Aboriginal and Torres Strait Islander Corporation under the Act; and

   (d)amenable to Part 11-5 of the Act, which deals with the winding up of Aboriginal and Torres Strait Islander Corporations.

5. The winding up application relies upon three discrete grounds under the Act:

   •     insolvency: s 526-5(i)

   • failure to lodge financial reports: s 526-5(k)

   •     just and equitable ground: s 526-5(n)

6. The winding up provisions of the Corporations Act 2001 (Cth) apply to the winding up of the defendant: s 526-35 of the Act.

7. The application is supported by a detailed affidavit of the plaintiff Mr Peter Armstrong, the Director of Regulation in the Office of the Registrar of Indigenous Corporations in the Commonwealth Department of Families Housing Community Services and Indigenous Affairs (“FaHCSIA”). He is also a Delegate of the Registrar of Aboriginal and Torres Strait Islander Corporations for the purposes of s 668-1 of the Act and authorised, in that capacity, an examination of the Corporation to be conducted by KordaMentha, chartered accountants, pursuant to s 453-1 of the Act. KordaMentha produced a report which discloses, amongst other things, a series of significant breaches of the Act and/or Rules by the Corporation including that:

   (a)the financial records maintained by the Corporation do not constitute “proper accounts” as required by its Rules;

   (b)the Corporation has not prepared or filed with the Registrar financial statements since 30 June 2002;

   (c)the standard of the books and records maintained by the Corporation would not allow the production of a set of financial accounts without a detailed reconstruction of the records; and

   (d)the Corporation has no effective governance procedures in place.

8. The KordaMentha report also discloses that the Corporation has insufficient financial resources available to meet its current liabilities.  The Corporation is the registered proprietor of five properties comprising of one commercial property and four blocks of vacant land in Northampton.  The report stated that the current value of the assets were unknown, however in audited financial statements as at 30 June 2002, the properties were valued at $94,928.

9. The report noted that the properties had been purchased with funding from the Aboriginal and Torres Strait Islander Commission (“ATSIC”), now FaHCSIA, and that ATSIC has registered caveats over all the properties.

10. Although the Corporation is seeking to sell these properties to realise funds to meet its liabilities such sales require the consent of FaHCSIA, which has not been obtained.  The report disclosed that the Corporation had approached the Geraldton Indigenous Co-ordination Centre to discuss the disposal of the four vacant blocks of land. The Corporation was advised that a formal submission was required but none had been received.  

11. The principles to be exercised in relation to the Corporation’s insolvency and the considerations relating to the just and equitable ground are conveniently found in Australian Securities Commission v A S Nominees Limited (1995) 13 ACLC 1596; Re Walter L Jacob & Co Ltd (1988) 5 BCC 244; Re Weedmans Ltd [1974] Qd R 377; and Registrar of Aboriginal Corporations v Koomaal Aboriginal Corporation [2001] FCA 1303.

12. The plaintiff has expressed the opinion that the Corporation should be wound up on the grounds that the Corporation is insolvent (s 526-5(1)), alternatively that it is just and equitable that it be wound up (s 526-5(n)).  The Court gives special weight to the decision of a statutory officer, such as the Registrar, who is charged with the duty of acting in the public interest: Re Lubin, Rosen and Associates Ltd [1975] 1 WLR 122 at 128.

13. I am satisfied on the evidence that the Corporation is insolvent and unable to pay its debts. I am also satisfied that it is just and equitable that the Corporation be wound up having regard to matters of public interest which include securing compliance with legislation, proper and competent governance, as well as fiscal accountability and transparency. The Corporation has failed consistently over a period of years to meet its obligations in each of these areas. This ground effectively subsumes the ground under s 526-5(k) of the Act although I am satisfied that this ground too is established. I order that Christopher John Munday and Brian Kevin Hughes be appointed jointly and severally as liquidators and that the applicant’s costs be paid out of the assets of the respondent.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

Associate:

Dated:        4 August 2008

Counsel for the Plaintiff:	Mr R M Johnson
Solicitor for the Plaintiff:	Minter Ellison
Defendant:	No appearance
Date of Hearing:	24 July 2008
Date of Judgment:	24 July 2008