Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations & Anor [2011] HCATrans 252 (2 September 2011)

Last Updated: 13 September 2011

[2011] HCATrans 252

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S290 of 2011

B e t w e e n -

DUNGHUTTI ELDERS COUNCIL (ABORIGINAL CORPORATION) RNTBC

Applicant

and

REGISTRAR OF ABORIGINAL AND TORRES STRAIT ISLANDER CORPORATIONS

First Respondent

PETER ARMSTRONG

Second Respondent

Summons

KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 2 SEPTEMBER 2011, AT 9.02 AM

Copyright in the High Court of Australia

HER HONOUR: In January 2010 the applicant, the Dunghutti Elders Council (Aboriginal Corporation) received a substantial sum on behalf of the Dunghutti people by way of compensation for the extinguishment of native title over certain lands. Since that time disputes, including disputes with persons claiming to be members of the Dunghutti people, have led to the applicant incurring significant legal expenses.

In February 2011, the second respondent as the delegate of the first respondent, the Registrar of Aboriginal and Torres Strait Islander Corporations, issued a notice to the applicant to show cause why it should not be placed in special administration under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (“the CATSI Act”). The applicant is a corporation subject to that Act.

The applicant brought proceedings in the Federal Court challenging the processes by which such a determination might be made and, in particular, the issuing of the notice. Declaratory and injunctive relief directed to the second respondent was sought. The matters raised by the applicant concerned the procedural requirements of the Act, issues of procedural fairness and apprehended bias. The primary judge, Flick J, rejected the application and an appeal from that decision was dismissed by a Full Court of the Federal Court (Keane CJ and Lander and Foster JJ) on 21 July 2011.

An application for a stay or injunction pending the bringing of an application for special leave was brought on 17 August 2011 by the applicant and was refused by Foster J on 31 August 2011. On 26 August 2011, an application for special leave to appeal was filed by the applicant whilst the matter was reserved before Foster J. The application for special leave is subject to an application for expedition which has not been determined. The application presently before the Court seeks injunctive relief preventing the respondents from taking any steps consequent upon the notice to show cause until the determination of the application for special leave.

The application is brought in the background of cross-undertakings which will soon expire. The respondents have declined to extend their undertaking not to proceed to appoint a special administrator. That undertaking will expire this evening. It is their view that the applicant has negligible prospects of success on an application for special leave. The applicant’s undertaking in relation to expenditure of its funds will expire on Monday.

The first inquiry relevant to this application is as to the probability that the applicant will be held entitled to relief. As was said in Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57, how strong that probability needs to be depends upon the nature of the right asserted and the practical consequences likely to flow from the orders sought. The principles relating to the grant of interlocutory injunctions were discussed more recently by Justice Crennan in Plaintiff M168/10 v Commonwealth [2011] HCA 25; (2011) 279 ALR 1. In this case there are the added features that the injunction is sought after a determination by a Full Court of the Federal Court and where the applicant must obtain special leave to appeal to obtain final relief.

One limb of the applicant’s argument is that the second respondent was obliged to afford procedural fairness at a point prior to the issue of the notice to show cause. As the Full Court pointed out, the applicant seeks to introduce another level of procedural entitlement to what is provided by the CATSI Act. That contention, it was said, “finds no foothold in the CATSI Act”: Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (“Dunghutti Elders”) [2011] FCAFC 88 at [39].

In its written argument in support of its application for special leave, the applicant attempts to develop an argument around the construction of the CATSI provisions relating to the provision of a notice to show cause. By this means it is sought to create preconditions to the exercise of the power to issue a notice to show cause, which would require the second respondent to have a certain level of satisfaction before a notice issues.

This is not a point which was addressed in the Full Court. In any event, however it is cast, the argument depends upon reading the CATSI Act to require an opportunity to be provided to a corporation to address whether a notice to show cause ought to be given, when the CATSI Act expressly provides an opportunity for the corporation to address questions, the questions which led to the issue of the notice, and are referred to in it. That opportunity is provided in the period following receipt of a notice. The notice sets out the matters to be addressed and which, interestingly, led to its issue. The applicant’s construction of the CATSI Act is not patently sensible. Moreover, as the Full Court pointed out, in the absence of evidence that the process following the issue of the notice would not be conducted fairly, no reason is provided to grant an injunction at this stage of the process: Dunghutti Elders at [40].

The other argument to be advanced on the application for special leave concerns apprehended bias. It was contended before the Full Court that a reasonable observer might conclude that the second respondent had already made up his mind as to the facts which might lead to the appointment of a special administrator when the notice to show cause issued. But, as the primary judge pointed out and the Full Court agreed, a decision-maker need not approach his or her task with a “blank mind”: Dunghutti Elders at [52]. In the context of a notice of this kind, it is clearly necessary for the second respondent to form views, at least as to the questions which need to be addressed.

As to the contention that a reasonable apprehension of bias would arise because of the context of the notice, as the Full Court pointed out, it is not the function of a notice to produce a factual narrative and invite assent. It is to afford a corporation an opportunity to show cause why a determination should not be made in conformity with the allegations in the notice. As to the other matters put in connection with the issue of bias, it is sufficient to observe that the Full Court correctly stated the test to be applied and applied it to the facts tendered.

It follows, in my view, that the applicant’s prospects of success on the application for special leave are insufficient to warrant the grant of an injunction. They are indeed so low as not to warrant further consideration of matters of prejudice. I would add that, even if the applicant’s prospects were greater than I consider them to be, the balance of convenience would not favour the grant of injunction. A consideration of matters relevant to that question shows that a high degree of probability of success would be required for the application to succeed.

The proceedings to date have delayed a decision as to the appointment of a special administrator. There is a public interest in the resolution, and the prompt resolution, of issues of corporate governance, particularly where they involve the expenditure of funds held on trust. The second respondent is attempting to exercise a statutory duty in connection with those issues. If a special administrator is appointed, that person will almost certainly be an accountant and a person independent of the respondents. In any event, there is no question of their lack of bona fides in connection with the processes to date.

The proceedings were brought in the early part of the process contemplated by the CATSI Act for the resolution of the questions raised. That process allows the applicant to provide information and answers. The applicant did not dispute the respondents’ claim that decisions made in the course of special administration are subject not only to review under the CATSI Act, but also to review under the Administrative Appeals Tribunal Act and that such review may be brought by the directors of the applicant.

The directors of the applicant have been joined to the proceedings in the Federal Court. This joinder appears to have taken place in connection with orders for costs. I was informed that the directors will seek to join in the present application for special leave, or themselves apply for special leave, in the event that a special administrator is appointed and discontinues the application. This would seem largely to answer the applicant’s principal claim to prejudice, save for the question of the directors’ access to funds, but an injunction in favour of the applicant cannot be warranted on that account.

The other matter of prejudice to which the applicant refers, apart from the fate of its application for special leave, is the effect of an appointment of a special administrator to the applicant upon the reputation of the directors. This is not a strong point in favour of an injunction which would prevent the exercise of supervisory powers where questions of corporate governance are raised.

The application is dismissed. Is there any issue as to costs?

MR WILLIAMS: We seek costs, your Honour.

HER HONOUR: Can you resist the order?

MR FLECKNOE-BROWN: We cannot resist that, your Honour.

HER HONOUR: Thank you. There will be an order that the applicant pay the respondents’ costs of the application. I take it no order is sought personally against non-parties?

MR WILLIAMS: We do not seek that.

HER HONOUR: Yes, thank you, gentlemen.

AT 9.13 AM THE MATTER WAS CONCLUDED