Anthony R Cant v Kirby

Supreme Court of NSW|2011-08-15|Before: Gzell J

Background 1The second plaintiff, Billa Downs Aboriginal Corporation, is in liquidation. The first plaintiff, Anthony R Cant, is its liquidator. It seeks an order for possession of land known as Billa Downs Station against the first defendant, Arthur Kirby, and the second defendant, Penny Kirby. 2By their cross-claim Arthur Kirby and Penny Kirby seek a declaration against the first cross-defendant, the Aboriginal Corporation, the second cross-defendant, the Indigenous Land Corporation, and Mr Cant as third cross-defendant that Billa Downs Station is held in trust for members of the Aboriginal community of New South Wales who consider themselves to have a traditional connection with Billa Downs Station arising upon the making of an unconditional deed of grant dated 12 November 2001 between the Land Corporation and the Aboriginal Corporation. They seek an injunction against the Aboriginal Corporation and the Land Corporation restraining them from dealing with, disposing of, or taking possession of Billa Downs Station and an order under the Corporations Act 2001 (Cth), s 536 that there be an inquiry into the conduct of Mr Cant in respect of the performance of his duties as liquidator of the Aboriginal Corporation. 3As the hearing progressed it became apparent that the question of the proper interpretation of the deed of grant was a preliminary issue and all the parties agreed that I should determine that question separately from other issues in the case and before they were heard. I made an order to that effect. 4The Aboriginal Corporation was incorporated in September 2001 under the Aboriginal Councils and Associations Act 1976 (Cth). That Act was repealed and replaced by the Corporations ( Aboriginal and Torres Strait Islander) Act 2006 (Cth), but under the Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Act 2006 (Cth) the Aboriginal Corporation is taken to be registered as an Aboriginal and Torres Strait Islander Corporation under the 2006 Act. 5The Aboriginal Corporation was wound up under s 526-1 of the 2006 Act and the winding up continues. 6Mr and Mrs Kirby refused to give up possession of Billa Downs Station. 7Section 526-35 of the 2006 Act provides that the Corporations Act winding up provisions apply to the winding up of an Aboriginal and Torres Strait Islander corporation with certain changes. The Corporations Act , s 474(1), within the winding up provisions, requires a liquidator to take into his or her custody or under his or her control all of the property to which the company is, or appears to be, entitled. 8Prima facie , therefore, the Aboriginal Corporation is entitled to an order for possession of Billa Downs Station.

The Legislation 9The Land Corporation is a statutory authority established under the Aboriginal and Torres Strait Islander Commission Act 1989 (Cth), s 191A. When that Act was repealed its provisions were, in all relevant respects, repeated in the Aboriginal and Torres Strait Islander Act 2005 (Cth). Thus the Land Corporation is now established under s 191A of the 2005 Act. 10Section 191B of that Act provides that the Land Corporation is established to assist Aboriginal persons and Torres Strait Islanders to acquire land and to assist them to manage indigenous-held land so as to provide economic, environmental, social or cultural benefits for Aboriginal persons and Torres Strait Islanders. 11Section 191C of the 2005 Act provides that the Land Corporation has land acquisition functions referred to in s 191D and land management functions referred to in s 191E. It is the land acquisition functions that are relevant to the proper interpretation of the deed of grant. 12So far as is material, s 191D of the 2005 Act was in the following terms: "(1) The land acquisitions functions of the Indigenous Land Corporation are as follows: (a)to grant interests in land to Aboriginal or Torres Strait Islander corporations; (b)to acquire by agreement interests in land for the purpose of making grants under paragraph (a); ... (1A) The grant of an interest in land by the Indigenous Land Corporation may be made subject to such terms and conditions as the Indigenous Land Corporations determines." 13The term Aboriginal or Torres Strait Islander corporation is defined in s 4(1) of the 2005 Act, relevantly for present purposes, as an Aboriginal association incorporated under Part IV of the Aboriginal Councils and Associations Act 1976 (Cth) and upon its repeal, a corporation registered under the 2006 Act. 14The 2005 Act places restrictions upon an Aboriginal corporation to which the Land Corporation has transferred land. Section 191S(1)(a) provides that the section applies if a body corporate has acquired an interest in land from the Land Corporation under s 191D(1)(a). Section 191S further provides as follows: "(2) The body corporate must not, without the consent of the Indigenous Land Corporation: (a) dispose of the interest; or (b) give a charge with respect to an asset of the body corporate that consists of, or includes, the interest. (3) If the body corporate purports to dispose of the interest without the consent of the Indigenous Land Corporation, the purported disposition is of no effect. (4) If: (a) the body corporate purports to give a charge with respect to an asset of the body corporate that consists of, or includes, the interest; and (b) the purported charge is given without the consent of the Indigenous Land Corporation: the purported charge is of no effect. (5) In this section: charge means a charge created in any way and includes a mortgage and an agreement to give or execute a charge or mortgage, whether upon demand or otherwise." 15Section 191SA of the 2005 Act creates a statutory charge in favour of the Land Corporation in relation to obligations to the Land Corporation with respect to an interest in land acquired from the Land Corporation. 16Section 191T(1)(a) of the 2005 Act also provides that the section applies if a body corporate has acquired an interest in land from the Land Corporation under s 191D(1)(a). Section 191T(2) is in the following terms: "The body corporate may dispose of the interest to the Indigenous Land Corporation. The disposal is subject to such terms and conditions as are agreed between the body corporate and the Indigenous Land Corporation."

The Rules 17The Rules of the Aboriginal Corporation reflect these legislative provisions. 18Rule 7.1 set out the objects of the Aboriginal Corporation in terms similar to s 191B of the 2005 Act. It was in the following terms: "The objects for which the Association is established are: a) to hold title to land on behalf of members of the Association and traditional owners. b) to provide economic, environmental, social and cultural benefits to the members of the Association. c) the income of the property of the Association however derived shall be applied solely towards the promotion of the objects of the Association as set forth in these rules and no portion thereof shall be paid or transferred directly or indirectly by way of dividend or bonus or otherwise howsoever by way of profit to the members of the Association or to any of them or to any person claiming through any of them." 19Section 191S(2) of the 2005 Act is reflected in Rule 8.2 which was as follows: "The Association shall not in any way: a) dispose of, charge, mortgage, pledge, encumber, or otherwise deal with an asset of the Association which consists of or includes an interest in land without the written consent of the Indigenous Land Corporation; b) enter into any agreements, arrangements or commitments with respect to the matters contained in Rule 8.2(a) or which are otherwise inconsistent with the purposes of the Association without the consent of the ILC; c) use the land in any manner which may result in the personal profit or gain of any member, employee or officer of the Association." 20Membership of the Aboriginal Corporation is defined in Rule 9.1 and Rule 9.2: "9.1 Membership of the Association shall be open to adult Aboriginal persons who are: a) traditional landowners of Billa Downs and; b) all such other persons as the Committee may from time to time determine. 9.2 The members of the Association shall be those Aboriginal persons who qualify for membership and who apply in writing to the Committee. A register of members shall be kept by the Public Officer." 21The defendant cross-claimants are members of the Aboriginal Corporation. 22The power to distribute surplus assets on a winding up of an Aboriginal corporation is relevant to the proper construction of the deed of grant. Section 526-25 of the 2006 Act is in the following terms: "(1) This section applies if: (a) surplus assets remain on the winding up of an Aboriginal and Torres Strait Islander corporation; and (b) the winding up is a winding up by the Court. (2) If the corporation's constitution includes provisions for the distribution of the surplus assets of the corporation in the event of the corporation's being wound up, the Court or the liquidator must distribute those assets in accordance with those provisions. This subsection has effect subject to subsection (4). (3) If: (a) the corporation's constitution does not include provisions for the distribution of the surplus assets of the corporation in the event of the corporation's being wound up; and (b) the members of the corporation pass a special resolution relating to the distribution of the surplus assets of the corporation; the Court or the liquidator must distribute those assets in accordance with that special resolution. This subsection has effect to subject to subsection (4). (4) If: (a) a Judge of the Court considers that a distribution of the surplus assets of the corporation in accordance with: (i)the provisions of the corporation's constitution in accordance with subsection (2); or (ii)a special resolution in accordance with subsection (3); would not be just; or (b) no such provisions exist and such a special resolution has not been passed; the Judge must make such orders for the distribution of those assets as, having regard to the objects of the corporation, he or she considers just." 23The Rules of the Aboriginal Corporation provided for the distribution of surplus assets upon a winding up for the purposes of s 526-25(2) of the 2006 Act as follows: "28.1 Where upon the winding up, voluntary or otherwise or cancellation of the incorporation of the Association, there remain any surplus assets including land shall (sic) be disposed of to the Indigenous Land Corporation on terms and conditions as agreed between the Association and the Indigenous Land Corporation. 28.2 The winding up of the Association shall be in accordance with the Act. ... 28.4 No payment shall be made to an individual member of the Association upon winding up other than the payment for reasonable and proper remuneration to any member of the Association, officer, servant, agent or employee of the Association for or in return for services actually rendered to the Association."

Deed of grant 24The unconditional deed of grant of land was made between the Land Corporation and the Aboriginal Corporation. 25The recitals specified that the Land Corporation was acting under the equivalent provision to s 191D(1) of the 2005 Act in the then Aboriginal and Torres Strait Islander Commission Act : " WHEREAS A Section 191D(1) of the Aboriginal and Torres Strait Islander Commission Act 1989 (as amended) provides that the ILC may acquire by agreement interests in land for the purpose of granting an interest in the land to an Aboriginal corporation. B The ILC has acquired the Land as described in this Deed after being satisfied that a land proposal submitted to the ILC met the ILC criteria for the acquisition of land. C The ILC wishes to grant its interest in the Land to the Corporation, in accordance with and subject to the provisions of the ATSIC Act 1989. D Consistent with the recognition by the ILC of the prior occupation of Australia by Indigenous persons and the cultural significance of the land to members of the Aboriginal community of New South Wales who consider themselves to have a traditional Corporation (sic) with Billa Downs ("Members")." 26The term Land was defined in clause 1.1 of the deed of grant to include licences attached to relevant properties under the Water Act 1912. Upon the commencement of the Water Management Act 2000 the water licences ceased to be attached to the real estate and were capable of being traded independently. The definition also included two Western Lands Leases under the Western Lands Act 1901. 27As well as transferring its interest in Billa Downs Station to the Aboriginal Corporation, the Land Corporation also agreed to transfer the plant and machinery it purchased under the contract by which it acquired Billa Downs Station including a Toyota Hilux and an unregistered motor vehicle. 28The operative parts of the deed of grant are in clause 2 which was in the following terms: "2 GRANT OF THE LAND 2.1 The ILC shall grant on the Transfer date: (a) the Land to the Corporation by transferring its interest in the Land to the Corporation to hold on trust for the Members, in a manner consistent with section 47 of the Native Title Act 1993 (Cth); and (b) the Plant and Inventory on the Land. 2.2 The Grant shall continue subject to the Corporation complying with the terms of this Deed and in the event that the Corporation commits a breach thereof, the Corporation shall if required by the ILC transfer its interest in the Land back to the ILC. 2.3 The ILC shall hand to the Corporation, on or as soon as practicable after the Transfer date, a transfer in registrable form, subject to the Transfer being stamped and executed by the ILC. 2.4 The Corporation agrees to enter into an agreement with any future prescribed body corporate determined under the Native Title Act in respect of the Land by which the Corporation will agree to consult with the prescribed body corporate to obtain its consent on any issue arising out of the holding of the pastoral lease(s) which affects or might affect the native title rights and interests of the relevant native title holders. 2.5 The Corporation acknowledges and agrees that the Grant is subject to Ministerial consent being given to the transfer of the Western Lands Leases." 29The term Grant was defined in cl 1.1 of the deed of grant as the grant of the Land Corporation's interest in Billa Downs Station provided to the Aboriginal Corporation pursuant to cl 2.1. 30Section 47 of the Native Title Act 1993 (Cth) applies when a native title application is made to an area subject to a pastoral lease held directly or indirectly for the claimant. For all purposes under the Act in relation to the native title application any extinguishment of native title rights and interests by the lease, the creation of any other interests in relation to the area and the doing of any act under the lease or interest must be disregarded. 31In their defence, Mr and Mrs Kirby claimed that they held native title rights and interests in Billa Downs Station but that claim was deleted from their amended defence and no claim to native title rights or to common law rights was pressed. 32The deed of grant is a short document of nine clauses. There is no provision in it specifying a breach of it. But clause 6 was in the following terms: "6 COMPLIANCE WITH LAW 6.1 The Corporation shall in holding the Land comply with the provision of any relevant statute, regulation, by-laws and requirements of any Commonwealth, State, Territory or local authority from time to time." 33On 6 June 2008 the Land Corporation wrote to the solicitors for Mr Cant claiming that the Aboriginal Corporation was in breach of the above clause in failing to pay rates owing on Billa Downs Station and requiring the transfer of the Aboriginal Corporation's interest in Billa Downs Station back to the Land Corporation without further consideration under cl 2.2 of the deed of grant.

The Kirby Submissions 34Mr and Mrs Kirby argued that cl 2.1 of the deed of grant created a trust over Billa Downs Station in favour of them and the other members of the Aboriginal Corporation as beneficiaries but they could not have the land transferred to them without the consent of the Land Corporation. 35Under cl 2.2 of the deed of grant the trust is to continue until the Land Corporation requests the transfer of the Aboriginal Corporation's interest in Billa Downs Station back to it following a breach of the terms of the deed. 36Mr and Mrs Kirby argued that the interest to be transferred back to the Land Corporation is that of bare trustee and the Land Corporation would hold Billa Downs Station burdened by the trust in favour of the members of the Aboriginal Corporation. 37Mr and Mrs Kirby argued that because of their interests as beneficiaries of the trust they can defeat the claim of Mr Cant and whether Billa Downs Station be held by the Aboriginal Corporation or the Land Corporation upon a transfer back to it they remain beneficiaries of the trust entitled to possession. 38If that were the proper construction a problem would arise with respect to the rule against perpetuities. The rule against perpetual trusts prohibits a non-charitable trust from lasting beyond the perpetuity period and the Perpetuities Act 1984, s 16(1) provides that the Act does not affect this rule.

Resolution 39The notion that a beneficial interest in Billa Downs Station sufficient to denude the Land Corporation's interest in it upon a retransfer was created in Mr and Mrs Kirby and the other members of the Aboriginal Corporation upon execution of the deed of grant stands in sharp contrast to the preservation of the Land Corporation's control over an interest in land transferred to an Aboriginal Corporation under the 2005 Act. Section 191S(2) requires an Aboriginal Corporation not to dispose of the interest nor to give a charge with respect to it without the consent of the Land Corporation and if it does the disposition is of no effect under s 191S(3) and the charge is of no effect under s 191S(4). 40The preservation of the interest under the control of the Land Corporation is enhanced by the power in s 191T(2) that the interest may be transferred to the Land Corporation. If it is, the land is deemed to have been acquired by the Land Corporation for the purpose of making a further grant of the land to another Aboriginal corporation. Section 191T(3) is in the following terms: "If the Indigenous Land Corporation acquires an interest in land as a result of a disposal under subsection (2), this Part has effect as if the interest had been acquired by the Indigenous Land Corporation under paragraph 191D(1)(b)." 41Section 191D(1)(b) is the land acquisition function to acquire interests in land for the purpose of making grants to Aboriginal or Torres Strait Islander corporations. 42Further control by the Land Corporation is seen in the provision for distribution of surplus assets in a winding up by the court in s 526-25 of the 2006 Act and Rule 28 of the Aboriginal Corporation's Rules. 43The purpose of these tight controls is to preserve interests in land for the benefit of Aboriginal or Torres Strait Islander corporations by ensuring that the interests are retained by the corporation or made available to another Aboriginal or Torres Strait Islander corporation and that is achieved by the powers reposed in the Land Corporation. 44In my view, Mr and Mrs Kirby and the other members of the Aboriginal Corporation are not beneficiaries of the trust created by cl 2.1 of the deed of grant. What it created was a purpose trust the terms of which were that the Aboriginal Corporation should hold Billa Downs Station to provide economic, environmental, social and cultural benefits to its members. That was its object under Rule 7.1 and that mirrored the purpose of the Land Corporation in section 191B of the 2005 Act. 45A purpose trust is void unless it be for a charitable purpose ( Morice v Bishop of Durham (1804) 9 Ves Jun 399 at 404-405 [32 ER 656 at 658] per Sir William Grant MR) 46The assistance of Aboriginal persons is a charitable purpose. In Re Mathew (decd); Trustees Executors & Agency Co Ltd v Mathew [1951] VLR 226 the testator directed his trustee to pay or transfer his residuary estate to a named person to be used by him at his discretion for the benefit of the Australian Aborigines. It was held to be a valid charitable gift. 47In Re Bryning Deceased [1976] VR 100 the testatrix gave the whole of her estate to her trustee upon trust to pay it to the Australian Aboriginal League to be applied for the benefit of Aboriginal women in Victoria. The gift was held to be charitable. 48In my view, the trust created by cl 2.1 of the deed of grant is valid as a charitable purpose trust. This construction avoids the difficulty of the rule against perpetual trusts. Section 16(4) of the Perpetuities Act provides that it does not apply to a disposition that is charitable. 49The disposition of Billa Downs Station to the Aboriginal Corporation took the form of a fee simple defeasible by condition subsequent. The grant in cl 2.1 of the deed of grant was of the absolute fee simple upon which the obligations of the trust were implanted. Clause 2.2 has the effect that the disposition is determinable if the Aboriginal Corporation commits a breach of the deed of grant and the Land Corporation requests the transfer of Billa Downs Station to it. 50That is the language in which cl 2.2 of the deed of grant is couched. The events leading to determination of the grant arise not only from the words "The Grant shall continue subject to the Corporation complying with the terms of this Deed" but also from the explicit provision that "in the event that the Corporation commits a breach thereof, the Corporation shall if requested by the ILC transfer its interest in the Land back to the ILC." 51The grant was of the fee simple in Billa Downs Station to be held in trust. The defeasance of the grant spells the end of the trust in my opinion. There is no point in a provision for transfer back to the Land Corporation of the bare legal title. That gives no possibility to a further grant of Billa Downs Station to another Aboriginal or Torres Strait Islander corporation under s 191T(3) and s 191D(1)(b) of the 2005 Act. 52The deed of grant was executed in the context of the provisions of the 2005 Act and the 2006 Act. That is clear from the definition of the Aboriginal Corporation's objects in Rule 7.1 and its copying of the purpose of the Land Corporation in s 191B of the 2005 Act. 53That legislation identifies the interest in land transferred back to the Land Corporation as the same interest in land granted by it to the Aboriginal or Torres Strait Islander corporation. 54The Land Corporation may grant interests in land to Aboriginal and Torres Strait Islander corporations under s 191D(1)(a) of the 2005 Act. Section 191S(1)(a) provides that the section applies if a body corporate acquires an interest in land and the interest was acquired from the Land Corporation. The body corporate must not dispose of or charge the interest without consent under s 191S(2). Likewise, s 191T(1)(a) provides that the section applies if a body corporate acquires an interest in land and the interest was acquired from the Land Corporation. The body corporate may dispose of the interest to the Land Corporation under s 191T(2). 55That same identity of interest appears in the deed of grant, in my view. Recital C speaks of the Land Corporation wishing to grant its interest in Billa Downs Station to the Aboriginal Corporation. Clause 2.1 provides that the Land Corporation will grant Billa Downs Station by transferring its interest in it. And cl 2.2 provides that if requested the Aboriginal Corporation shall transfer its interest in Billa Downs Station back to the Land Corporation. 56It would be inconsistent with the 2005 Act and against the purpose of the legislation to construe cl 2.2 such that the interest in Billa Downs Station to be transferred back to the Land Corporation is different from the interest transferred to it by the Land Corporation and, in particular, a bare legal title. 57When a corporate trustee of a trust with beneficiaries is wound up the assets of the trust are available to creditors. That is because the assets are vested in the corporate trustee who is subject to the winding up provisions of the Corporations Act. 58That is what happens here with the difference that the trust obligations cease upon a request for transfer by the Land Corporation. 59The assistance of the Aboriginal people is no doubt a public good but so is the payment of creditors upon a winding up. There is nothing in the legislation or the Rules of the Aboriginal Corporation to displace the application of the winding up provisions. Chap 11, Pt 11-5, Div 526 of the 2006 Act provides for the winding up of Aboriginal and Torres Islander corporations. 60There is no basis for the assertion by Mr and Mrs Kirby that they defeat the rights of Mr Cant as liquidator. 61In my judgment upon the proper construction of the deed of grant and, in particular cl 2, a charitable purpose trust was established on execution of the deed of grant and the disposition of Billa Downs Station and the trust were determined when, in breach of cl 6.1 of the deed of grant, the Aboriginal Corporation failed to pay rates due on Billa Downs Station and the Land Corporation requested the Aboriginal Corporation to transfer its full legal title in Billa Downs Station to it which the Land Corporation did on 6 June 2008. 62Mr and Mrs Kirby were not beneficiaries of the trust. Its purpose was to foster the objects of the Aboriginal Corporation under Rule 7.1(b) reflecting the purpose of the Land Corporation in s 191B of the 2005 Act. Mr and Mrs Kirby were not entitled to possession of Billa Downs Station. 63I will hear further from the parties on the remaining issues in the case.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 October 2011

Aboriginal and Torres Strait Islander Commission Act 1989(Cth)

Aboriginal and Torres Strait Islander) Act 2006(Cth)

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