Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations

Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations - [2011] FCAFC 110 - FCAFC 2011 case summary — Zoe

[17]

REASONS FOR JUDGMENT THE COURT 1 On 11 November 1996, the first appellant was incorporated under the provisions of the Aboriginal Councils and Associations Act 1976 (Cth). It is now regulated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the CATSI Act). On 6 January 2010, the first appellant received on behalf of the Dunghutti people approximately $6.1 million by way of compensation in return for the extinguishment of native title held by the Dunghutti people over certain land situated near Kempsey in northern NSW. The present litigation concerns the stewardship of that compensation fund by the current directors of the first appellant (the second to thirteenth appellants). 2 On 21 July 2011, this Full Court published Reasons for Judgment (Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCAFC 88) (the principal judgment) in support of the following orders which were made on that day, namely, orders that: 1. The appeal be dismissed. 2. Order 1 above be stayed for 21 days. 3. Order 2 made by Bennett J in proceeding NSD 181 of 2011 continue for 21 days. 4. Within seven days of the date of publication of these Reasons for Judgment the respondents are to notify the solicitors for the appellant of the precise orders as to costs which the respondents intend to seek and the identity of those persons and/or entities against whom those orders are to be sought. 5. If, pursuant to order 4 above, costs are sought against persons and/or entities who are not presently parties to the appeal, the respondents are to file and serve within fourteen (14) days of the date of publication of these Reasons for Judgment a Notice of Motion by which they seek to join to this appeal such persons and entities against whom they propose to seek an order for costs and in which the precise orders sought, together with all the affidavits in support of the relief sought, are included. 6. In the event that a Notice of Motion contemplated by order 5 above is filed and served within the time limited by that order, the Registrar of the New South Wales District Registry of the Court is to list the said Notice of Motion for directions before a member of the Full Court no later than nineteen (19) days after the publication of these Reasons for Judgment. 7. Each party have liberty to apply in respect of Orders 2-6 above on such notice as a member of the Full Court might direct. 3 The primary judge had dismissed an application by the first appellant in which the first appellant challenged the validity of a Notice to Show Cause dated 11 February 2011 issued by the second respondent to the first appellant pursuant to s 487-10(1) of the CATSI Act as to why he should not determine under s 487-1 of the CATSI Act that the first appellant be placed under special administration for a period of six months from the date of the second respondent's determination to that effect (the February 2011 show cause notice). In its application before the primary judge, one of the claims for relief made by the first appellant was for a declaration that any determination purportedly made by the second respondent pursuant to the CATSI Act that the first appellant should be placed under special administration "… would be invalid and of no force or effect by reason of the apprehended bias of the second respondent". The first appellant also sought a permanent injunction restraining the second respondent from making such a determination. 4 On 2 August 2011, after we had published the principal judgment, the first appellant filed an Interlocutory Application (the reopening application) in which it sought orders that "… the hearing of the appeal and/or the judgment of the Court be re-opened or vacated to enable the Court to deal with one of the [first] appellant's grounds of appeal". In the reopening application, the first appellant also sought orders continuing the stay of our order dismissing the appeal and continuing the interlocutory regime then in place pursuant to which the respondents had agreed not to proceed to place the first appellant under special administration. 5 It is the contention of the first appellant that this Full Court failed altogether to deal with one of its arguments and that the principal judgment should be recalled and reopened in order for this Court now to address this argument. 6 The second to thirteenth appellants did not participate in the reopening application. 7 The orders made by this Court on 21 July 2011 have not yet been entered. 8 The reopening application was returned before the Court on 4 August 2011. On that occasion, orders were made requiring the first appellant and the respondents to exchange written submissions directed to that application. In addition, the reopening application was reserved for consideration by the Full Court on the papers, once the written submissions of the parties had been filed and served in accordance with the directions of the Court. 9 These Reasons for Judgment determine the reopening application.

[18]

The First Appellant's Apprehended Bias Contention 10 In support of the reopening application, the first appellant contended that this Full Court had failed to address an argument made in support of its appeal to the effect that, once the second respondent, as the delegate of the first respondent, had read an Examination Report dated October 2008 prepared by Mr Lindsay Roberts FCA pursuant to Div 453 of the CATSI Act (the Roberts Report), the fair minded and reasonable hypothetical bystander, properly in possession of all relevant facts and circumstances, would think that the mind of the second respondent was inevitably and irrevocably prejudiced against the first appellant and its directors. For convenience, we shall refer to this contention as "the Roberts bias point". 11 In the Roberts Report, Mr Roberts made certain adverse findings in relation to the conduct of the first appellant and its directors. Mr Roberts said that the directors and the first appellant had breached the CATSI Act in many respects. He concluded that the directors of the first appellant had failed or refused to admit some appropriately qualified persons to membership of the first appellant and had admitted other persons to membership without checking their qualifications. He said that a number of cash transactions had not been properly recorded or accounted for, including some payments made to the directors themselves. Many other breaches were identified by Mr Roberts. In his report, Mr Roberts recommended to the first respondent that a special administrator be appointed to the first appellant. 12 Extracts from the Roberts Report were given to the directors of the first appellant in June 2010. A complete copy of the Report was given to those persons on 9 February 2011. The first appellant argues that neither it nor its directors have ever been given a fair and reasonable opportunity to respond to the Roberts Report. 13 The first appellant submitted that it had argued the Roberts bias point before the primary judge, that the primary judge had not accepted its submission, that it had reagitated the point on appeal before this Full Court and that we had failed to address the point, notwithstanding that it had been raised in the Notice of Appeal and also argued in the appeal.

[19]

The Primary Judge's Reasons as to Apprehended Bias 14 At [63]-[86] of the Reasons for Judgment of the primary judge (Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCA 370), his Honour dealt with the submissions which the first appellant had advanced before him in support of its case based upon apprehended bias. At [67] of his Reasons, his Honour said that the first appellant had argued that a reasonable apprehension of bias arose in the present case by reason of the failure on the part of the respondents to address in the February 2011 show cause notice the submissions which had been made in response to an earlier show cause notice served by the second respondent upon the first appellant (the Notice dated 31 January 2011). Relevantly, the first appellant's complaint before the primary judge was that, in the February 2011 show cause notice, the respondents had failed to come to grips with and address certain "incontrovertible facts" to which the first appellant had specifically and emphatically drawn the respondents' attention and that this failure was evidence of a prejudiced mind on the part of each of the respondents, in particular, on the part of the second respondent. At [71], the primary judge recorded the high point of the first appellant's submissions before him based upon apprehended bias in the following way: 71 The submission now advanced was that the failure to qualify the statements previously made evidenced "a mind … so prejudiced in favour of a conclusion already formed that he will not alter that conclusion irrespective of the evidence or arguments presented …". The submission was that the February Notice should have been re-worded so that the statement previously made was prefaced by (for example): "A part of the significant legal expenditure …". 15 The primary judge continued at [73]-[78] to explain why the argument advanced by the first appellant must be rejected. 16 The primary judge did not record in his Reasons for Judgment that the first appellant advanced the Roberts bias point in argument before him. There is no reference to that point in his Honour's Reasons for Judgment. 17 There is no doubt that the first appellant raised in its application before the primary judge a claim for relief the essence of which was that the second respondent was irrevocably prejudiced against the first appellant and ought to be restrained from making any determination that it be placed under special administration. However, the first appellant did not contend before the primary judge that the reason that the second respondent was irrevocably prejudiced against the first appellant was the fact that he had read the Roberts Report in circumstances where the first appellant and its directors had not been given a fair opportunity to comment on or respond to that Report. The apprehended bias case propounded by the first appellant before the primary judge was a different case. The argument before his Honour was that apprehended bias was to be deduced from the fact that, when the second respondent sent the February 2011 show cause notice, he did not take account of all of the arguments and contentions which the first appellant had advanced to him as to why the 31 January 2011 show cause notice was invalid (the so-called "incontrovertible facts") and, in addition, had incorporated by reference some of the material contained in the Roberts Report in circumstances where the first appellant and its directors had not been given that Report or, at least, had not been given that Report for the purpose of enabling them to respond to it in the manner required by the principles articulated by the Privy Council in Mahon v Air New Zealand Ltd [1984] AC 808 at 820-821.

[20]

The First Appellant's Case on Appeal 18 Ground 30 of the Notice of Appeal filed on behalf of the first appellant was in the following terms: 30 That his Honour the primary Judge was in error in failing to find that in the circumstances of the case a reasonable apprehension of bias arose by reason of the second respondent's reliance on the examination report of October 2008. 19 The first appellant contends that the above ground encompasses the Roberts bias point. 20 The first appellant submitted that, in addition to raising the Roberts bias point in its Notice of Appeal, it also argued the point both in its written submissions dated 11 May 2011 made to this Court in support of the grounds set out in its Notice of Appeal (the appeal written submissions) and during the course of oral argument upon the hearing of the appeal. The first appellant also submitted that, in [29(a)] of the principal judgment, the Court recorded the fact that the Roberts bias point had been argued in the appeal. It then submitted that, notwithstanding that the Court had turned its mind to the point, it nonetheless failed to deal with it. 21 In [29(a)] of the principal judgment, we said: 29 The appellant's application was based on a number of grounds. These grounds of challenge were supported by arguments which tended to overlap. This is not said by way of criticism, but simply to make the point that, in the interests of comprehensibility and coherence, these arguments may be considered together in groups as follows: (a) apprehended bias. This ground and the following ground involved, among other things, the respondents' reliance on a report by an accountant, Mr Lindsay Roberts dated October 2008, in the February notice. This report was compiled by Mr Roberts pursuant to Div 453 of the CATSI Act. It was also said that the second respondent's continued reliance in the February notice upon grounds of concern said to have been incontrovertibly rebutted in the appellant's response to the January notice was apt to create a reasonable apprehension of bias; 22 In the appeal written submissions, the first appellant devoted 25 paragraphs (approximately five pages) to its apprehended bias case. In its written submissions filed on 8 August 2011 in support of the reopening application (the reopening submissions), the first appellant only relied upon part of one of those paragraphs, namely paragraphs 8.2, 8.3 and 8.4. Those paragraphs were in the following terms: Apprehended Bias (Grounds 27-32) In summary, the appellant submits: … 8.2 that a reasonable observer might conclude that the second respondent's failure to rectify the identified errors and omissions of fact and his inclusion in the February Notice of reference to a two-year old examination report on which the appellant had not previously been given an opportunity to comment indicates that the second respondent had already made up his mind as to the facts he intended to take into account; 8.3 that, consequently, a reasonable observer might conclude that the second respondent is not open to persuasion and, therefore, might not make an impartial decision in the exercise the delegated discretion to make or not make a determination under s 487-1 of the CATSI Act; and 8.4 the judge below was in error in not so finding. 23 The part of par 8 of the appeal written submissions which was not relied upon or cited by the first appellant in support of the reopening application was in the following terms: 8.1 that the evidence before the judge below established: 8.1.1 that in responding to the January Notice the 8 February letter (Pt B No. 1(6)) had identified to the second respondent errors and omissions of fact in the January Notice (Pt B No. 1(5)); 8.1.2 that those identified errors and omissions of fact were not contentious but were incontrovertible and well known to the second respondent; 8.1.3 that the second respondent in preparing the February Notice (Pt B No. 1(1)) did not rectify the identified errors and omissions of fact; 8.1.4 that rectification of those errors and omissions of fact would have resulted in factual narrative in the February Notice more favourable to the appellant than that which is contained therein; and 8.1.5 that instead of rectifying the identified errors and omissions the second respondent added fresh material in the February Notice, namely, reference to the examination report of Mr Lindsay Roberts of October 2008 (Pt B No. (1) pp. 9.9-10.7), which had never been provided to the applicant for the purpose of enabling the applicant to comment under the principle in Mahon v Air New Zealand [1984] AC 808, 820-821; 24 The first appellant did not refer to or rely upon any other part of the appeal written submissions in support of the reopening application. 25 Paragraph 8 of the appeal written submissions makes very clear that the argument that was put before the primary judge was the one which the primary judge recorded and addressed at [63]-[86] of his Reasons for Judgment. The only significance of the Roberts Report to that argument was its role in the first appellant's complaint that the Roberts Report had been referred to in the February 2011 show cause notice in a fashion which compounded the respondents' failure to rectify the identified errors and omissions allegedly contained in the 31 January 2011 show cause notice. This was said to have been all the more serious because the Roberts Report was referred to in circumstances where the Report had never been provided to the first appellant or its directors for the purpose of enabling them to comment on and respond to it. This contention had been developed before the primary judge in connection with a group of arguments advanced by the first appellant in support of its contention that it had been denied procedural fairness because the Roberts Report had not been provided to it for comment in breach of the principles articulated by the Privy Council in Mahon v Air New Zealand Ltd at 820-821. 26 The appeal written submissions did not raise the point which the first appellant now contends this Court failed to address in the principal judgment. 27 In the reopening submissions, the first appellant also relied upon the transcript of several exchanges which took place at the hearing of the appeal between Senior Counsel who appeared for the first appellant at that hearing and members of the Full Court. We extract the written submission made in this regard in full: 3. In oral argument the following exchanges occurred between counsel and the Full Court: (the examples set out below are necessarily selective). • "... Well, your Honour, my first submission would be that all our main points in support of the notice of appeal are set out in our outline of submissions and that we rely upon what we set out there as a statement of the principal parts of the appellant's case in relation to all the issues that are in the notice of appeal …" page 2 lines 20-24. The court is respectfully requested to read the exchange between the Court and counsel from the following passage beginning at page 18 line 19; • "...this was put squarely to his Honour, and his Honour understood the point to the extent of saying 'What you are saying is that the registrar has read a series of inflammatory material and others and similar material that would affect his view in relation to this, and that's what you're putting as being the apprehended bias in the matter, and that having come in the context of saying - of having submitted that there had been a breach of the Mahon rule in the receipt of that report" page 18 lines 19-25. to the following passage ending on page 23 line 25, which quotes from the transcript of argument before his Honour Justice Flick in the court below: "I don't think it does, does it? Look, I understand your proposition with R1. You say it's so inflammatory in its context that it must have infected the second respondent so apprehension of bias by knowing - looking at only allegations and the second proposition, ..." page 23 line 25. • other relevant passages can be found at pages 13 lines 42 to 44, page 16 lines 13 to 45; pages 28 lines 35 to 37; page 29 lines 35 to 47; page 35 lines 29 to 45; page 43 lines 43 to 47 and page 44 lines 1 to 45; page 56 lines 30 to 36 (showing that the respondent was aware of the point), 28 The first extract from the transcript of oral argument made at the hearing of the appeal relied upon by the first appellant (Transcript p 2, ll 20-24), merely recites that the first appellant relies upon the appeal written submissions. It adds nothing to those submissions. 29 The second extract (Transcript p 18 ll 19-25) is a reference to an argument described by the Chief Justice at Transcript p 18 ll 9-12 in the following terms: KEANE CJ: Now, just pausing there, it's not apparent to me that it was argued before his Honour that Mr Roberts' failure to accord natural justice when he carried out his section 453 exercise meant that the registrar might never rely upon that report for the purposes of a show cause notice. Am I wrong in that? 30 The "… this …" referred to at the beginning of the second extract relied upon by the first appellant in par 3 of the reopening submissions (Transcript p 18 ll 19-25) (as to which see [27] above) is a reference back to the observations of the Chief Justice recorded at Transcript p 18 ll 9-12 which we have extracted at [29] above. It is quite obvious that the point to which the Chief Justice adverted was a different point from that which the first appellant now contends this Court failed to address in the principal judgment. The point under discussion at Transcript p 18 of the appeal transcript was whether Mr Roberts' failure to accord natural justice to the first appellant and its directors (if that be the fact) forever tainted the show cause process which had been commenced by the issue of the February 2011 show cause notice. The point under discussion at Transcript p 18 was not the first appellant's current contention to the effect that the second respondent was forever and irrevocably tainted merely by having read the Roberts Report. 31 The third passage of transcript extracted in par 3 of the reopening submissions is an extract from an exchange between Counsel and the primary judge which took place during the hearing below. When regard is had to the whole of that extract, it is not at all clear to us that the Roberts bias point was, in fact, under discussion between Counsel and the primary judge in the extract referred to. The point there under discussion was the "role" of the Roberts Report in the February 2011 show cause notice. 32 We have carefully reviewed the other extracts referred to in the last dot point in par 3 of the reopening submissions. None of those extracts supports the first appellant's contention that the Roberts bias point was, in fact, advanced at the appeal hearing during oral argument. A number of the submissions made by Senior Counsel for the first appellant during the oral argument are difficult to follow. This observation is illustrated by some of the extracts now relied upon by the first appellant to which reference is made in the last dot point in par 3 of the reopening submissions. 33 However, in one of the exchanges between Senior Counsel for the first appellant and the bench during the course of oral argument in the appeal, the position was made clear. 34 At Transcript p 24 l 43-Transcript p 25 l 17, after the Chief Justice had again referred to the same point as he had raised at Transcript p 18 ll 9-12, the following exchange took place: LANDER J: Does your argument even go further, Mr McCarthy? Are you saying because the registrar received this report from Mr Lindsay the registrar was thereafter so infected he couldn't issue any show cause notice? MR MCCARTHY: No, I'm not. LANDER J: So he could have issued a show cause notice? MR MCCARTHY: Yes. I mean, this may not have come into anything at all in relation to the reasons why any notice to show cause was issued, your Honour. LANDER J: Sorry, I don't follow that. MR MCCARTHY: I'm not saying - and if I had been misunderstanding his Honour, the Chief Justice, in that way I am sorry. But I'm certainly not putting a position forward and keeping it specific in relation to this, that because he received this report that he couldn't issue a notice to show cause in relation to the matter. That is that that may not be anything on which he was prepared to substantially rely. For instance, your Honours, it may well be that he took the view that there was a Mahon problem with it and had put it away and out of his mind over that. The fact of the matter is, is that even with that examination report, your Honours, he did issue the first notice in relation to this matter, which made no reference to anything to do with that whatsoever on those lines. 35 We pause to observe that, if, as Senior Counsel conceded, the mere fact that the second respondent had received and read the Roberts Report did not prevent him from issuing a show cause notice, it would be the case a fortiori that the mere fact that the second respondent had received and read the Roberts Report would not prevent him from ultimately determining to place the first appellant under special administration. 36 In order for the first appellant to succeed in the reopening application, it must demonstrate that justice requires that the judgment be reopened. 37 The relevant principles were summarised by the Full Court in Davis v Insolvency and Trustee Service Australia (No 2) (2011) 190 FCR 437, at [4] and [6], where the Court said: 4 It is a well established principle that "[a] superior court of justice ... has full power to rehear or review a case until judgment is drawn up, passed and entered": Texas Company (Australasia) Ltd v Federal Commissioner of Taxation (1940) 63 CLR 382 at 457 per Starke J, cited with approval in DJL v Central Authority (2000) 201 CLR 226 at [34] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ. The Federal Court, by reason of s 5(2) of the Federal Court of Australia Act 1976 (Cth), is a superior court of record and, therefore, subject to the necessary factual precondition of the orders having not been entered, has such a power. Additionally, the Court is empowered to vary or set aside a judgment or order before it has been entered under O 35, r 7(1) of the Federal Court Rules 1979 (Cth). … 6 The principles surrounding the Court's power to review its own judgment before its perfection are clear: "[w]hat must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing." (Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 303 per Mason CJ). Because of the importance of the public interest in the finality of litigation, it is a jurisdiction "to be exercised with great caution" (at 302). The onus is on the applicant to demonstrate that he or she has not been heard: Autodesk at 302 citing Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684 per Mason ACJ, Wilson and Brennan JJ. 38 In Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 303, Mason CJ had remarked (immediately before the passage cited by the Full Court at [6] in Davis): … it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. 39 The jurisdiction to reopen a judgment and to grant a rehearing "is not confined to circumstances in which the applicant can show that, by accident or without fault on the applicant's part, he or she has not been heard" (per Mason CJ in Autodesk Inc v Dyason (No 2) at 301-302 approved by the plurality judgment of the High Court in Aktas v Westpac Banking Corporation (No 2) (2010) 241 CLR 570 at 573). 40 This Full Court undoubtedly has power to reopen its judgment in the circumstances of the present case. In the exercise of our discretion, however, we decline to do so. We decline to do so for the reasons that: (a) The Roberts bias point was not argued before the primary judge; (b) The point was not squarely and unambiguously raised in the Notice of Appeal (it was probably not raised at all in the Notice of Appeal); (c) The point was not argued in the appeal written submissions; (d) The point was not advanced in oral argument at the hearing of the appeal; (e) The point was expressly disavowed in oral argument at the hearing of the appeal; and (f) It would be futile to recall and reopen the principal judgment in order to enable the Roberts bias point to be argued because the point is, in any event, without merit. 41 The relevance of the reference at [29(a)] of the principal judgment to the Roberts Report needs to be understood in light of [45], [59] and [72]-[76] of the principal judgment. It was the reference to a partial reliance upon the Roberts Report in the February 2011 show cause notice that was noted in that paragraph as one of the integers in the first appellant's allegations of apprehended bias. Nothing in [29(a)] of the principal judgment supports the first appellant's present contention to the effect that it argued the Roberts bias point on appeal and that the Court failed to deal with the point.

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