FACTUAL BACKGROUND
16 On 31 January 2011 the respondents, purporting to act under s 487-10(1)(a) of the CATSI Act, sent to the appellant a letter stating that it was "considering putting your corporation under special administration". A notice to show cause was attached to that letter (the January notice).
17 On 8 February 2011 the appellant's solicitors replied asserting that the January notice was invalid by reason of defects in its form and content. On 11 February 2011 the respondents wrote back withdrawing the January notice and enclosing a second notice to show cause (the February notice) which required a response by 28 February 2011.
18 The February notice asserted a number of grounds for putting the appellant under special administration pursuant to s 487-5(1) of the CATSI Act. These grounds may be summarised as follows:
a failure by the appellant to comply with a provision of the Act or an internal governance rule of the corporation (s 487-5(1)(b)) in connection with excessive expenditure on legal fees;
officers of the appellant have acted in their own interests rather than in the interests of the members of the corporation as a whole, or officers have acted in a way that appeared to be unfair or unjust (s 487-5(1)(d));
the appellant's affairs were being conducted in a way that was oppressive, unfairly prejudicial, unfairly discriminatory, or contrary to the interests of the members of the corporation as a whole (s 487-5(1)(e));
disputes between the appellant's members and officers were interfering with the proper conduct of the corporation's affairs (s 487-5(1)(f));
the appointment of the special administrator is required for the appellant as it is in the interests of the appellant's members or in the public interest (s 487-5(1)(j)).
19 On 18 February 2011 the appellant's solicitors wrote to the respondents in relation to the February notice asserting that it too was invalid and requesting that it be withdrawn. The respondents declined to withdraw the February notice. In response, the appellant commenced proceedings in this Court on 24 February 2011.
20 Some reference to the detail of the correspondence and the notices is necessary. The need to set out the detail of the correspondence and notices arises because the complaints made by the appellant include a complaint as to the insufficiency of the identification of the matters said to be of concern to the respondents. Reference to this material shows that it is difficult to give any countenance to this complaint.
21 The January notice contained the following relevant material:
The Directors
Dunghutti Elders Council (Aboriginal Corporation) RNTBC
PO Box 179
KEMPSEY NSW 2440
TAKE NOTICE that under section 487-10(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (the Act), I, Peter Armstrong, a delegate of the Registrar of Aboriginal and Torres Strait Islander Corporations (the Registrar) invite the Dunghutti Elders Council (Aboriginal Corporation) RNTBC (ICN 2867) (the corporation or DECAC) to show cause, by close of business on Wednesday, 16 February 2011, why I should not determine under section 487-1 of the Act that the corporation is to be under special administration.
The first part of this notice sets out the grounds that I consider may exist to enable the making of such a determination. The second part of this notice sets out my reasons for considering that the grounds may exist and a determination may be warranted.
PART 1 - GROUNDS
1.1 A ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(b) of the Act, namely:
(b) the corporation or the officers of the corporation have failed to comply with, or to ensure that the corporation complies with, one or more of the following:
(i) a provision of the Act
(ii) an internal governance rule of the corporation,
…
and the corporation has, or the officers have, failed to give the Registrar a satisfactory explanation for the failure.
I can determine that the corporation is to be under special administration if the corporation or its officers have failed to comply with a provision of the Act or the corporation's internal governance rules, without satisfactory explanation.
…
I refer to the suspected breaches of the Act and the rule book set out in section 2.2 below.
1.2 A further ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(d) of the Act, namely:
(d) the officers of the corporation have acted in the affairs of the corporation:
(i) in their own interests rather than the interests of the members of the corporation as a whole, or
(ii) in a way that appears to be unfair or unjust to members of the corporation.
I can determine that the corporation is to be under special administration if I am satisfied that the officers of the corporation have acted in the affairs of the corporation in their own interests rather than in the interests of the members of the corporation as a whole, or in a way that appears to be unfair or unjust to members of the corporation.
I refer to the matters set out in section 2.3 below.
1.3 A further ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(e) of the Act, namely:
(e) the affairs of the corporation are being conducted in a way that is:
(i) oppressive, or
(iii) contrary to the interests of the members of the corporation as a whole.
I can determine that the corporation is to be under special administration if I am satisfied that the affairs of the corporation are being conducted in a way that is oppressive or contrary to the interests of the members of the corporation as a whole.
I refer to the matters set out in section 2.4 below.
1.4 A further ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(f) of the Act, namely:
(f) disputes between:
(ii) the corporation's members and the corporation's officers, are interfering with the proper conduct of the corporation's affairs.
I can determine that the corporation is to be under special administration if I am satisfied that the appointment of the special administrator is required because of disputes between the corporation's members and officers.
I refer to the matters set out in section 2.5 below.
1.5 A further ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(j) of the Act, namely:
(j) the appointment of the special administrator is otherwise required:
(i) in the interests of the members of the corporation, or…
(iii) in the public interest.
I can determine that the corporation is to be under special administration if I am satisfied that the appointment of the special administrator is otherwise required in the interests of the members of the corporation or in the public interest.
I refer to the matters set out in section 2.6 below.
PART 2 - REASONS FOR CONSIDERING THAT GROUNDS MAY EXIST
Section 2.1 - The corporation's circumstances
2.1.1 Incorporation and native title responsibilities
The Dunghutti people were formally recognised on 7 April 1997 by the Federal Court of Australia as the native title holders of land at Crescent Head on the New South Wales north coast. The determination was made with the consent of all parties, including the State of New South Wales, 14 Crescent Head residents and the NSW Aboriginal Land Council.
In October 1996 the State of New Wales had agreed to pay compensation to the Dunghutti people to acquire this land The compensation was to be held by a body corporate (to be incorporated) on trust for the Dunghutti people. The Dunghutti Elders Council (Aboriginal Corporation) was incorporated on 11 November 1996 for this and other purposes.
The corporation is a registered native title body corporate (RNTBC), within the meaning of that term in section 253 of the Native Title Act 1993.
As an RNTBC the corporation holds the native title rights and interests in certain land (or compensation received for the extinguishment of native title or acts affecting the native title in that land) on trust for the Dunghutti people, the native title holders of certain lands in the Kempsey region of New South Wales. As an RNTBC the corporation also acts as the agent or representative of all Dunghutti people in respect of matters relating to native title and performs other functions as set out in the Native Title Act and any regulations made under that Act.
The majority of the objectives of the corporation in rule 3 of the corporation's rule book, relate to the corporation's role as an RNTBC in representing the interest of all Dunghutti people
In April 1997 an amount of $738,000 was paid into the New South Wales Aboriginal Land Council Trust Account on behalf of the corporation for the first part of the native title compensation claim for the extinguishment of native title over land at Crescent Head near Kempsey, known as Block A.
In February 2010 the New South Wales Government made a payment of $6.1 million to the corporation for the second part of the native title compensation claim for the extinguishment of native title over land at Crescent Head near Kempsey, known as Block B. The government intended to use the land for residential development. The payment to the corporation has escalated disputes between certain members and the directors of the corporation.
2.1.2 Financial position
The financial statements of the corporation indicate that during the years ended 30 June 1999 to 30 June 2002 the corporation reported surpluses and its audit reports were unqualified.
By 2004 the corporation started incurring trading losses and the native title compensation funds, the only significant asset of the corporation, started reducing annually. The corporation traded at a loss from 2004 until 30 June 2009 with a significant loss of $546,192 in the financial year ended 30 June 2009, including significant legal costs of ($188,832 or 31.7% of all corporation expenditure) partly incurred as a result of the disputes between members and the directors of the corporation.
In the year ended 30 June 2010 the corporation reported a significant surplus of $5,090,304 as a result of the one off payment by the New South Wales Government of $6,076,242 in compensation for Block B during the financial year. In the financial year ending 30 June 2010 the corporation incurred legal costs of $692,248 (60.8% of all corporation expenditure) partly as a result of the disputes between members and the directors of the corporation.
In the 2008/09 and 2009/10 financial years the corporation spent a total of $881,080 on legal costs (not all of which was related to the disputes or the Administrative Appeals Tribunal (AAT) proceedings). Expenditure on legal costs amounted to 50.8% of the corporation's total expenditure. The quantum of expenditure on legal costs and its proportion of total expenditure is exceptionally high for a corporation of the size and nature of DECAC.
Prior to the disputes the corporation's expenditure on legal costs was minimal. For example, in the 2005/06 financial year the corporation had nil expenditure on legal costs. In the 2006/07 financial year the corporation had expenditure of $1,500 on legal costs which equated to 0.9% of total expenditure. The disputes commenced in the middle of the 2007/08 financial year and in that year the corporation's legal costs were $55,000 which equated to 26.3% of total expenditure.
…
2.1.4 Members' concerns regarding the governance of the corporation and AAT proceedings
In 2007 a number of members of the corporation attempted to call a meeting of the members to raise their concerns regarding the governance of the corporation, including the use of its financial resources, and to remove the directors of the corporation. A number of complaints were made to the Registrar by members regarding this meeting and another subsequent meeting of members called by the directors of the corporation.
At or around the time of the members' meetings in 2007 approximately 117 people applied in writing (in the membership form prescribed in the corporation's rule book) for membership of the corporation. It is generally accepted that these people are associated with and/or supportive of the members that attempted to call the meeting and subsequently commenced proceedings in the AAT, as described below.
On 18 September 2008 five members of the corporation applied to the AAT for an order setting aside a decision of the Registrar refusing registration of their details as directors of the corporation. This involved 'a dispute between two groups of people who sought to be registered as the directors of [the corporation] in 2007.
The applicants in the AAT proceedings submitted that:
A determination within the present proceeding would materially assist the Pending Applicants [for membership] in their attempt to either be admitted or recognised as members of the [corporation] or the resolution of wider disputes amongst the Dunghutti people and within the membership and governance of the [corporation] itself.
In 2009 the AAT referred the dispute between the members and the directors of the corporation for mediation or conciliation to 'allow the applicants and the [corporation's] directors an opportunity for the first time since the start of the dispute to meet in person and discuss the dispute. The conciliation was unsuccessful in resolving any of the disputes.
On 14 October 2009 Mr RP Handley, Deputy President of the AAT dismissed the application for review of the Registrar's decision and the disputes between certain members and the directors of the corporation continued. The corporation incurred significant legal costs during the AAT proceedings which are reflected in the 2008/09 and 2009/10 financial reports of the corporation. In those two financial years the corporation spent a total of $881,080 on legal costs (not all of which was related to the disputes or the AAT proceedings).
…
In March 2010 a number of complaints were made to the Registrar by members of the corporation indicating that they were in dispute with the directors of the corporation. The disputes related to the governance of the corporation, specifically in relation to a large number of applications for membership of the corporation that had not been processed by the directors and the use of the financial resources of the corporation.
On 26 May 2010 the Registrar convened a meeting in Kempsey of interested persons under section 439-5 of the Act to 'discuss disputes that the corporation has been involved with in the last two years'. The Registrar also met separately with the directors of the corporation on 25 May 2010 in Kempsey to discuss the disputes and the financial position of the corporation. The disputes were not resolved at the meetings.
On 2 June 2010 the Registrar met with the majority of the directors of the corporation in Canberra with their legal adviser, Mr Eddy Neumann to discuss the disputes between certain members of the corporation and the directors. How to resolve the outstanding applications for membership was also discussed. The disputes and the processing of the applications were still not resolved.
Following further communication between the Registrar, the directors of the corporation and the members in dispute with the directors, a meeting was convened by the Registrar in Kempsey on 16 July 2010. Those that attended the meeting were the Registrar, all of the directors, five Dunghutti elders selected by the members in dispute with the directors to represent them and two anthropologists with significant experience working with the genealogies of the Dunghutti people: Dr Barry Morris from the University of Newcastle and Simon Correy from the NTSCorp (New South Wales native title services).
The purpose of the meeting was for the Dunghutti members present to review the outstanding applications for membership and with the assistance of the anthropologists, confirm whether the applicants were Dunghutti people and over the age of 18 years of age: two of the criteria for membership of the corporation (rule 5.2.2 of the corporation's rule book). At the meeting all of the applicants for membership (97 were still outstanding of the original 117 applicants) were, with the exception of two applicants, accepted as being at least 18 years of age, of Dunghutti descent and identified themselves as a Dunghutti person.
It was agreed at the meeting that the directors of the corporation would then meet to decide whether to accept any or all of the applicants for membership as members. It was also agreed that the corporation's contact person, Ms Mary-Lou Buck would undertake further investigation of the eligibility for membership of the two applicants disputed at the meeting. The Registrar wrote to the directors on 19 July 2010 to confirm the outcomes from the meeting. On 20 August 2010 the Registrar wrote to the directors providing further information requested by the directors at the meeting on 16 July 2010.
The directors wrote to the Registrar on 21 October 2010 indicating that the genealogical information provided at the meeting on 16 July 2010 was not clear and the directors would need to meet again with Mr Simon Correy to consider the eligibility of all the applicants for membership. On 4 November 2010 the Registrar wrote to the directors expressing concern at the delay in considering the applications for membership and referring to their duties as directors. The Registrar indicated that legal advice would be sought if the unresolved membership applications were not considered and determined by 30 November 2010.
On 30 November 2010 the directors wrote to the Registrar and indicated that the directors would not meet again to consider the unresolved membership applications until the second half of January 2011. The Registrar responded to this letter in writing on 1 December 2010, expressing the view that 'this is another unreasonable delay and the directors should meet to process the outstanding membership applications as soon as possible and before the end of [2010].
The directors subsequently called a directors' meeting on 22 December 2010 to consider the unresolved membership applications and invited Mr Simon Correy to attend. At the meeting the membership applications were considered but no applications were rejected or accepted.
Section 2.2 - Potential failures to comply with the Act and the internal governance rules
2.2.1 section 265-1(1) of the Act (duty of care and diligence)
Obligation
Under 265-1(1) of the Act a director must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they were a director of a corporation in the corporation's circumstances and occupied the office held by, and had the same responsibilities within the corporation as the director.
Potential failures
The corporation's directors have been involved in ongoing disputes with certain members of the corporation. The disputes relate to the governance of the corporation, including the use of its financial resources and the failure to deal with approximately 100 applications for membership from persons claiming to be Dunghutti people. Refer to 2.1.4 and 2.1.5 above for further information.
The corporation has incurred significant legal costs as a result of the disputes and for the financial year ended 30 June 2009 these costs contributed significantly to a trading loss (deficit) of $546,192. In the 2008/09 and 2009/10 financial years the corporation expended a total of $881,080 on legal costs. While it is not possible for the Registrar to determine how much of the total legal costs were incurred directly or indirectly as a result of the disputes, given the corporation's historical expenditure on legal costs prior to the disputes and the proportion of total expenditure during the disputes (50.8%) I consider that a substantial proportion of the $881,080 was incurred as a result of the disputes.
The applications for membership that remain unresolved were submitted to the corporation in 2008, ostensibly in accordance with the corporation's rule book. The majority of the unresolved applications have not been dealt with by the corporation. A small number of the applicants have died since their applications were lodged with the corporation.
On the basis of the material available to me, I consider that the following conclusions are available to me:
• The process for deciding applications for membership of the corporation that is applied by the directors in relation to the unresolved membership applications submitted to the corporation in 2008 is not consistent with the process applied to applications for membership by other Dunghutti people. Namely 'a direction from them to NTSCorp concerning the release of genealogical materials to the corporation and to its consultant Dr Barry Morris' is only required from the 2008 unresolved applicants for membership.
• The process has not been applied reasonably, fairly and consistently to all Dunghutti people applying for membership of the corporation. The unresolved applications for membership submitted to the corporation in 2008 have not been considered in a timely manner, and in a reasonable, fair and consistent way, as described above.
• By failing to deal with the unresolved membership applications submitted in 2008 the corporation is not able to fully and properly undertake its role under the Native Title Act 1993 as an RNTBC: to act as the agent and trustee for all Dunghutti people in respect of matters relating to native title rights and interests in certain land (or compensation received for the extinguishment of native title or acts affecting the native title in that land).
• The corporation is also unable to fully and properly meet the majority of the objectives that are set out in rule 3 of the corporation's rule book, which relate to the corporation's role as an RNTBC and to represent the interests of all Dunghutti people It is apparent from rules 3 and 5.2.2 that the general intention and common understanding of those forming the corporation and seeking recognition of it as an RNTBC was that the corporation is to represent all Dunghutti people and those that are over the age of 18 years and identify as Dunghutti should be permitted to be members. The conduct of the directors in not dealing with the unresolved membership applications reasonably, fairly and consistently is frustrating the corporation in meeting its objectives and the purpose of the corporation.
• The directors have received extensive assistance, from the AAT, anthropologists and the Registrar's office, to resolve the disputes and to determine whether the applicants for membership meet the eligibility requirements in rule 5.2.2 of the corporation's rule book. Refer to 2.1.4 and 2.1.5 above for further information.
• No reasonable director acting with reasonable care and diligence would have failed to deal with the membership applications in the time since they were submitted to the corporation in 2008. The directors have failed to deal with the membership applications in a reasonable time and have not applied the process for deciding membership applications reasonably, fairly and consistently to all Dunghutti people applying for membership.
• The actions of the directors in not resolving the disputes and not dealing with the membership applications are not in good faith or for a proper purpose. The directors have acted to exclude from membership people associated with and/or supportive of the current members that are in dispute with the directors. The actions of the directors are to ensure that they remain as directors of the corporation.
• The directors are acting in their own interests rather than in the best interests of the corporation (refer to 2.2.2 below for further information) and no reasonable director exercising care and diligence would have made such decisions.
• The significant expenditure on legal costs by the corporation ($881,080 in 2008/09 and 2009/10 and 50.8% of total expenditure) at the direction of directors is not in the best interests of the corporation and has not been made for a proper purpose.
• In all the circumstances, the directors of the corporation have failed to comply with section 265-1 of the Act and the Registrar has not received a satisfactory explanation for this failure.
...
22 In response to the January notice, the appellant's solicitors wrote on 8 February 2011 to the respondents. That letter contained the following relevant material.
We refer to your letter of 31 January 2011 addressed to the directors of DECAC and enclosing a notice also addressed to those directors purporting to have been given under s 487-10 of the Corporations (Aboriginal and Torres Strait Islander Act 2006 ("the Act"). We act for DECAC and its directors who have instructed us to reply to your letter as follows:
Notice is invalid
1. Our client does not accept that the notice accompanying your letter of 31 January 2011 is a valid and effective notice to it under s 487-10 of the Act for reasons which include the following:
1.1 Your notice purports to be given under s 487-10 of the Act. That section requires the Registrar of Indigenous Corporations ("the Registrar") to:
give the corporation notice in writing inviting the corporation to show cause, within a reasonable period specified in the notice, why the determination should not be made.
The determination therein referred to is a determination under s 487-1 of the Act:
that an Aboriginal and Torres Strait Islander corporation is to be under special administration for the period specified in the determination. [emphasis added]
Your notice does not state the period of the proposed special administration. The specification of the period is an integral part of the determination as is clear from the wording of s 487-1 itself and also ss 487-20(1) and s 487-25, both of which include the words "the period specified in the determination". Your notice does not include any reference to the period to be specified in the determination and accordingly does not inform our client as to what is the determination proposed to be made. Therefore the notice is defective and null and void as a notice under s 487-10 of the Act inviting our client to show cause why the determination should not be made.
1.2 Section 487-10 of the Act requires the notice to be given to the corporation. Section 120-1 of the Act sets out how notices may be served on an Aboriginal and Torres Strait Islander corporation. In the case of DECAC, which is registered under the Act as a "small corporation", a notice may be served by:
1.1.1 Serving a copy of the document personally on the contact person or by sending it by post to his or her address (s 120-1(c)); or
1.1.2 Serving a copy of the document personally on a director (s 120(d)).
The notice accompanying your letter of 31 January 2011 is addressed to the directors of DECAC not to DECAC itself. It was not served personally on the contact person or by sending it by post to her address. Nor was it served personally on a director. Accordingly, no notice has yet been given to DECAC as required by s 487-10 of the Act.
1.3 Even if the notice were a valid notice under s 487-10 of the Act and had been given to DECAC in the manner required, the period specified in the notice is not a reasonable period to respond, given the nature and extent of the allegations and the incomplete and tendentious recitation of the facts, which calls for a comprehensive answer. In addition, as you are aware, the directors are presently involved in finalising the membership applications with the assistance of Simon Correy and feel obliged to give priority to that task. Accordingly, you have failed to comply with the reasonable notice requirement in s 487-10(1)(a) of the Act.
Notice is defective in content
2. There are other respects in which the notice is defective in its content. We will deal with just two of those defects by way of illustration.
First ground is defective in form and in substance
3. You state in paragraph 1.1 of the notice that the first ground you consider may exist to enable the making of the determination under s 487-1 is a ground that arises under s 487-5(1)(b) of the Act, namely:
(b) the corporation or the officers of the corporation have failed to comply with, or to ensure that the corporation complies with, one or more of the following:
(i) a provision of the Act;
(ii) an internal governance rule of the corporation;
…
and the corporation has, or the officers have, failed to give the Registrar a satisfactory explanation for the failure.
4. You then refer to "suspected" breaches of the Act and the rule book as set out in section 2.2 of the notice, which is headed "Potential failures to comply with the Act and the internal rules" [emphasis added]. In section 2.2 you identify "potential failures" in respect of the following provisions of the Act:
• s 265-1, which is headed "Care and diligence - civil obligation only";
• s 265-5, which is headed "Good faith - civil obligations";
• s 265-10, which is headed "Use of position - civil obligations"; and
You also identify r 10.1 of the DECAC rule book, which is headed "General duties". However, as we read section 2.2.4 of the notice, the alleged non-compliance with r 10.1 is derivative in that it is consequential on the alleged failures of the statutory provisions.
5. Each of the allegations particularised in section 2.2 is directed at a "suspected" or "potential" failure to comply by the directors. It is not alleged that the corporation itself has failed to comply with a provision of the Act or the rule book. Nor is it alleged that the directors have failed to ensure that the corporation has complied with a provision of the Act or the rule book. Therefore, the ground is not properly stated in paragraph 1.1 of the notice. Is your notice inviting DECAC to show cause by reference to the ground as stated in paragraph 1.1, which alleges, inter alia, that DECAC has failed to comply with a provision of the Act or the rule book, or is DECAC expected to work out for itself from the particulars what is the alleged ground?
6. Further, the ground in s 487-5(1)(b) contains two elements: failure to comply with a provision of the Act or the rule book and failure "to give the Registrar a satisfactory explanation for the failure".
7. As regards the alleged failure to give the Registrar a satisfactory explanation, we note that nowhere in the notice is it asserted that the Registrar has requested the directors of DECAC to give an explanation of the alleged failures and that those directors have failed to give a satisfactory explanation. Nevertheless, it is clear from the concluding words of each of sections 2.2.1, 2.2.2 and 2.2.3 that you have formed the opinion that no satisfactory explanation has been given. Furthermore, in the final paragraph of section 2.2 you state that you "may well conclude…that no explanation could satisfactorily address" the alleged failures. The ground in s 487-5(1)(b) is established only if there has been a failure to give the Registrar a satisfactory explanation of the failure to comply with a provision of the Act or the rule book. The ground is not established merely because the Registrar himself cannot think of an explanation that might be satisfactory. Nor is the ground established because an explanation which has not been requested has not been given.
8. As regards the first element of the ground in s 487-5(1)(b) of the Act, there must be a failure to comply with a provision of the Act or the rule book - not a "suspected" failure or "potential" failure. It is not sufficient for the purposes of the section that the Registrar has formed an opinion that there has been or might have been such a failure or that the Registrar considers that "the conclusion available to me is that the directors" have so failed (see section 2.2.2).
9. A failure to comply with a provision of the Act or the rule book is a jurisdictional fact, the existence of which is essential to the establishment of the ground. It is not appropriate to use the show cause provisions of s 487-10 of the Act to reverse the onus of proof and to oblige the directors of an Aboriginal and Torres Strait Islander corporation to convince the Registrar that they have not failed to comply with a provision of the Act or the rule book. This is particularly so in the case of obligations of a general nature, such as the ones identified, and where the Act contains in s 386-1 a specific procedure for establishing a contravention of the identified provisions.
10. The directors of DECAC reject the opinions asserted by the Registrar in section 2.2 of the notice as to their failure to comply with the identified provisions of the Act and the rule book. If the Registrar considers there is sufficient evidence to establish non-compliance, let him do so under s 386-1. If non-compliance be thereby established the Registrar might then request an explanation for the failure to comply, and, if the Registrar does not receive a satisfactory explanation, he might then give a notice under s 487-10 as to why he should not determine that DECAC is to be under special administration for the period specified.
11. Rather than adopting that procedure, it is clear from the last two paragraphs of section 2.2 of your notice that, in respect of the ground in s 487-5(1)(b), you are using the show cause process in s 487-10 of the Act for the purpose of requiring the directors of DECAC to prove their innocence of the alleged failures to comply: "Were I to conclude that the directors have failed to comply with [the identified sections]…; "Were I to find these, or any of these, breaches to have been established…". We submit that this is an improper use of Division 487 of the Act.
12. Having regard to the foregoing we submit that the first ground set out in the notice at section 1.1 is defective in form and in substance having regard both to the express terms of s 487-5(1)(b) of the Act and the purpose and intent thereof in the context of the Act as a whole.
The notice contains a tendentious statement of the facts
13. The statement of facts in sections 2.1 and 2.2 is tendentious in that relevant facts are omitted or misstated. As a consequence, conclusions are drawn in section 2.2 that are not open or supportable.
14. This point is demonstrated by the third paragraph of section 2.2.1, where you admit that it is not possible for the Registrar to determine how much of the total legal costs were incurred directly or indirectly as a result of disputes, but nevertheless "consider" that a substantial proportion was so incurred. Later, in the second last dot point in section 2.2.1, you conclude, "The significant expenditure on legal costs…is not in the best interests of the corporation and has not been made for a proper purpose".
15. Given the admission earlier in section 2.2.1 and the fact that the identified period (2008/2009 and 2009/2010) included the time when DECAC's legal advisers were involved in drafting the new constitution and in intense and lengthy negotiations with the State government which resulted in the payment to DECAC of $6.1 million, that conclusion, which is unqualified as to any particular proportion of the legal costs, is an extraordinary statement to make and a completely unsupportable conclusion to reach.
16. Had the Registrar requested DECAC to provide details of the legal costs he would have been made aware of the precise break-up of the legal costs, including how much was attributable to constitutional matters and to gaining for the Dunghutti people the $6.1 million paid by the State. He would have also realised that the costs incurred in the year ending 30 June 2010 included legal work going back for a number of years before that. Had the facts been ascertained, the embarrassing, unqualified conclusion in the second last dot point in section 2.2.1, based as it is on an unfounded assumption, could have been avoided.
17. There are many other instances in your notice where facts have been omitted or misstated. The following are two examples:
Processing of membership applications
17.1 In section 2.1.5 of your notice (in the middle paragraph on page 7) you refer to the meeting in Kempsey on 16 July 2010 and state:
At the meeting all of the applicants for membership…were, with the exception of two applicants, accepted as being at least 18 years of age, of Dunghutti descent and identified themselves as a Dunghutti person.
In the next paragraph you state:
The Registrar wrote to the directors on 19 July 2010 to confirm the outcomes from the meeting.
Thereafter, the next letter to which you refer is the Registrar's letter of 20 August 2010 which you describe simply as "providing further information requested by the directors at the meeting on 16 July 2010".
17.2 However, you do not recite in your notice that we, on behalf of the DECAC directors, wrote to the Registrar on 30 July 2010 disputing the Registrar's understanding of the meeting as set out in his letter of 19 July 2010.
17.3 In that letter we stated, inter alia, that the directors did not concede that all but two of the applicants had satisfied the test of identifying as Dunghutti persons. We also wrote that, although it appeared, on the basis of the material presented at the meeting, all but two were of Dunghutti descent, we noted that the display of the material on a screen was unsatisfactory because the information was difficult to read and no hard copies were provided for our clients to review at their own pace.
17.4 We had assumed, reasonably we contend, that the Registrar accepted the directors' version of the meeting. Rather than taking issue with what we wrote in our letter of 30 July 2010, he stated in his letter of 20 August 2010 that he noted the comment about the difficulty of reading the material and indicated he would assist in arranging for Mr Correy to present the material again.
17.5 Apart from failing to refer to our letter of 30 July 2010 and failing to refer to the fact that the Registrar's letter of 20 August 2010 apparently accepted the directors' version of the 16 July meeting, your notice includes as an unqualified statement of fact the sentence in the middle paragraph on page 7, which is quoted above.
17.6 In the second last paragraph on page 7 of your notice you refer to our letter of 21 October 2010 where we again stated that the presentation on 16 July 2010 was not clear. However, you do so in the context of the next sentence which refers to the Registrar's concerns as to delay. Rather than acknowledging that the directors had complained some 2½ months before of the lack of clarity of in the material presented at the 16 July meeting, the said paragraph seems to be intended to give the impression that the directors raised the issue of the lack of clarity of the presentation long after the event for the purpose of delaying the processing of the applications.
17.7 On the issue of the processing of the membership applications you have also failed to state that shortly after receipt of the membership applications the DECAC directors made numerous requests to NTSCorp for access to the genealogical material relating to the membership applicants. You have also failed to state that despite NTSCorp agreeing to do so at the Administrative Appeals Tribunal conciliation conference on 5 May 2009, NTSCorp refused to make that material available until the meeting of 16 July 2010 and then providing it only in the form of slideshow presentation by Simon Correy.
17.8 Not once in the extensive correspondence and meeting dealing with the membership applications issue has the Registrar suggested that the DECAC directors were acting unreasonably by seeking that material before making a decision as to the acceptance of the applications. Rather, the Registrar has facilitated its being made available, for which we on behalf of the directors have expressed their gratitude in the correspondence.
17.9 Nevertheless, without even referring to the fact that NTSCorp's withheld the genealogical material for almost two years, you state in the fifth bullet point on page 9 of your notice that you consider it is available to you to conclude, "No reasonable director acting with reasonable care and diligence would have failed to deal with the membership applications in the time since they were submitted to the corporation in 2008".
17.19 Nor do you state that the dissident members chose to continue the flawed AAT proceedings, for which they were receiving legal aid, rather than validly call a special general meeting or attend annual general meetings.
18. The above are just two examples of the tendentiousness of the statement of facts in the notice of 31 January 2011 which demonstrate the inadequacy of the notice as satisfying the requirements of s 487-10 of the Act. There are other aspects of the notice which are equally inadequate, but which we have not yet particularised in this letter, but we will do so, if need be, at the appropriate time.
19. In addition to what we have stated above as to the invalidity of the notice, we also contend that were you, as the Registrar's delegate, to make a determination under s 487-1 on the facts and reasons set out in Part 2 of the notice, such a determination would also, in our submission, be capable of being set aside, inter alia, on the grounds that the determination was made without considering relevant material and after taking into consideration irrelevant material.
Documentation relied on by the Registrar's delegate
20. Even if the notice of 31 January 2011 were a valid and effective notice under s 487-10 of the Act, which we contend is not the case, the failure of the notice to state fully and accurately the relevant facts illustrates the inadequacy of the notice in providing DECAC with a reasonable opportunity to make submissions in relation to the proposed determination under s 487-1.
21. The allegations made against the DECAC directors are very serious. In order for them and the corporation to be afforded procedural fairness and have the benefit of practical justice they are entitled to know the facts and circumstances of the allegations against them and on which you as the Registrar's delegate will be relying to make the decision whether or not to make a determination under s 487-1. That information has not as yet been provided to DECAC.
22. In order for DECAC to be given such a reasonable opportunity, DECAC must be provided with all the information, including copies of all documents, upon which you intend to rely in deciding whether or not to make such a determination. Unless that information is provided to DECAC and DECAC is given a reasonable time in which to consider it and to take advice in relation to it, our client will not have been given a reasonable opportunity to show cause pursuant to s 487-10 of the Act.
Timing of the notice
23. We are further instructed that the directors of DECAC are disappointed that you have chosen to issue this notice just a few days before the final steps in the processing of the membership applications is to be completed. As you are aware the meeting with Simon Correy on 22 December 2010 was adjourned to 28 December 2010. However, NTSCorp subsequently informed us that that date was not suitable. Accordingly, arrangements were made with NTSCorp and Mr Correy to complete the task on 8 and 9 February 2011.
24. An objective observer might conclude that the time of the notice was intended to put pressure on the directors to make their decisions in a certain way. We are instructed that the directors do not regard themselves under any such pressure and will treat each application for membership on its merits.
Conclusion
25. We are instructed on behalf of DECAC to request that you acknowledge the invalidity of the notice of 31 January 2011, purportedly given under s 487-10 of the Act, and that you withdraw it.
26. If we do not receive written notification of the withdrawal of that notice by 4 pm on 11 February 2011, DECAC will seek such relief as it is advised is appropriate.
27. If the Registrar withdraws the notice and proposes to serve a valid notice, the Registrar should, when giving that notice:
27.1 Provide DECAC with copies of all the information upon which the Registrar intends to rely in deciding whether to make a determination under s 487-1 of the Act; and
27.2 Allow a more extensive time period in which to respond than that which was given in the notice of 31 January 2011.
23 It may be noted here, in advance of our discussion of the appellant's challenge to the February notice on the basis that "disputes" of concern to the respondents are not sufficiently identified, that in the appellant's letter of 8 February 2011 there is no suggestion of a difficulty in identifying the "disputes".
24 The respondents' letter of 11 February 2011 to the appellant was in the following terms:
Dear Directors,
I am writing to tell you that I am considering putting your corporation under special administration under Division 487 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (the Act).
Before I place the corporation under special administration the Act requires me to give the corporation an opportunity to show me why I should not take this action.
I have attached a notice that has been issued under section 487-10 of the Act. The notice sets out in detail all of the matters that are of concern to me.
The notice also invites the corporation to show cause by close of business on Monday 28 February 2011 why it should not be placed under special administration.
Please note that the notice, issued under section 487-10 of the Act, to the corporation on 31 January 2011 is withdrawn.
If you would like to discuss this matter, you can contact me using the toll-free number 1800 622 431 (not free for mobile phones).
25 The February notice contained the following relevant material:
Dunghutti Elders Council (Aboriginal Corporation) RNTBC
c/- Mary-Lou Buck
Contact person
13 Elrington Avenue
KEMPSEY NSW 2440
Dunghutti Elders Council (Aboriginal Corporation) RNTBC
PO Box 179
KEMPSEY NSW 2440
The Directors
Dunghutti Elders Council (Aboriginal Corporation) RNTBC
PO Box 179
KEMPSEY NSW 2440
TAKE NOTICE that under section 487-10(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (the Act), I, Peter Armstrong, a delegate of the Registrar of Aboriginal and Torres Strait Islander Corporations (the Registrar) invite the Dunghutti Elders Council (Aboriginal Corporation) RNTBC (ICN 2867) (the corporation or DECAC) to show cause, by close of business on Monday, 28 February 2011, why I should not determine under section 487-1 of the Act that the corporation is to be under special administration for a period of six months from the date of any such determination.
The first part of this notice sets out the grounds that I consider may exist to enable the making of such a determination. The second part of this notice sets out my reasons for considering that the grounds may exist and a determination may be warranted.
PART 1 - GROUNDS
1.1 A ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(b) of the Act, namely:
(b) the corporation or the officers of the corporation have failed to comply with, or to ensure that the corporation complies with, one or more of the following:
(i) a provision of the Act
(ii) an internal governance rule of the corporation,
…
and the corporation has, or the officers have, failed to give the Registrar a satisfactory explanation for the failure.
I can determine that the corporation is to be under special administration if the corporation or its officers have failed to comply with a provision of the Act or the corporation's internal governance rules, without satisfactory explanation.
The internal governance rules of the corporation can be found in the rule book of the corporation, as approved by a delegate of the Registrar.
I refer to the suspected breaches of the Act and the rule book set out in section 2.2 below.
1.2 A further ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(d) of the Act, namely:
(d) the officers of the corporation have acted in the affairs of the corporation:
(i) in their own interests rather than the interests of the members of the corporation as a whole, or
(ii) in a way that appears to be unfair or unjust to members of the corporation.
I can determine that the corporation is to be under special administration if I am satisfied that the officers of the corporation have acted in the affairs of the corporation in their own interests rather than in the interests of the members of the corporation as a whole, or in a way that appears to be unfair or unjust to members of the corporation.
I refer to the matters set out in section 2.3 below.
1.3 A further ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(e) of the Act, namely:
(e) the affairs of the corporation are being conducted in a way that is:
(i) oppressive, or
(iii) contrary to the interests of the members of the corporation as a whole.
I can determine that the corporation is to be under special administration if I am satisfied that the affairs of the corporation are being conducted in a way that is oppressive or contrary to the interests of the members of the corporation as a whole.
I refer to the matters set out in section 2.4 below.
1.4 A further ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(f) of the Act, namely:
(f) disputes between:
(ii) the corporation's members and the corporation's officers, are interfering with the proper conduct of the corporation's affairs.
I can determine that the corporation is to be under special administration if I am satisfied that the appointment of the special administrator is required because of disputes between the corporation's members and officers.
I refer to the matters set out in section 2.5 below.
1.5 A further ground that I consider may exist to enable the making of the determination arises under section 487-5(1)(j) of the Act, namely:
(j) the appointment of the special administrator is otherwise required:
(i) in the interests of the members of the corporation, or…
(iii) in the public interest.
I can determine that the corporation is to be under special administration if I am satisfied that the appointment of the special administrator is otherwise required in the interests of the members of the corporation or in the public interest.
I refer to the matters set out in section 2.6 below.
…
2.1.2 Financial position
The financial statements of the corporation indicate that during the years ended 30 June 1999 to 30 June 2002 the corporation reported surpluses and its audit reports were unqualified.
By 2004 the corporation started incurring trading losses and the native title compensation funds, the only significant asset of the corporation, started reducing annually. The corporation traded at a loss from 2004 until 30 June 2009 with a significant loss of $546,192 in the financial year ended 30 June 2009, including significant legal costs ($188,832 or 31.7% of all corporation expenditure) partly incurred as a result of the disputes between members and the directors of the corporation.
In the year ended 30 June 23010 the corporation reported a significant surplus of $5,090,304 as a result of the one off payment by the New South Wales Government of $6,076,242 in compensation for Block B during the financial year. In the financial year ending 30 June 2010 the corporation incurred legal costs of $692,248 (60.8% of all corporation expenditure) partly as a result of the disputes between members and the directors of the corporation.
In the 2008/09 and 2009/10 financial years the corporation spent a total of $881,080 on legal costs (not all of which was related to the disputes or the Administrative Appeals Tribunal (AAT) proceedings). Expenditure on legal costs amounted to 50.8% of the corporation's total expenditure. The quantum of expenditure on legal costs and its proportion of total expenditure is exceptionally high for a corporation of the size and nature of DECAC.
Prior to the disputes the corporation's expenditure on legal costs was minimal. For example, in the 2005/06 financial year the corporation had nil expenditure on legal costs. In the 2006/07 financial year the corporation had expenditure of $1,500 on legal costs which equated to 0.9% of total expenditure. The disputes commenced in the middle of the 2007/08 financial year and in that year the corporation's legal costs were $55,000 which equated to 26.3% of total expenditure.
…
2.1.4 Members' concerns regarding the governance of the corporation and AAT proceedings
In 2007 a number of members of the corporation attempted to call a meeting of the members to raise their concerns regarding the governance of the corporation, including the use of its financial resources, and to remove the directors of the corporation. A number of complaints were made to the Registrar by members regarding this meeting and another subsequent meeting of members called by the directors of the corporation.
At or around the time of the members' meetings in 2007 approximately 117 people applied in writing (in the membership form prescribed in the corporation's rule book) for membership of the corporation. It is generally accepted that these people are associated with and/or supportive of the members that attempted to call the meeting and subsequently commenced proceedings in the AAT, as described below.
In March 2008 the corporation's solicitor wrote to about 71 applicants and required them to complete new revised membership application forms. The new form provided for the provision of detailed ancestral information by an applicant.
In August 2008, with assistance from anthropologists at NTSCorp Limited, 96 membership applications were lodged with the corporation.
On 18 September 2008 five members of the corporation applied to the AAT for an order setting aside a decision of the Registrar refusing registration of their details as directors of the corporation. This involved 'a dispute between two groups of people who sought to be registered as the directors of [the corporation] in 2007.
The applicants in the AAT proceedings submitted that:
A determination within the present proceeding would materially assist the Pending Applicants [for membership] in their attempt to either be admitted or recognised as members of the [corporation] or the resolution of wider disputes amongst the Dunghutti people and within the membership and governance of the [corporation] itself.
In 2009 the AAT referred the dispute between the members and the directors of the corporation for mediation or conciliation to 'allow the applicants and the [corporation's] directors an opportunity for the first time since the start of the dispute to meet in person and discuss the dispute. The conciliation was unsuccessful in resolving any of the disputes.
On 14 October 2009 Mr RP Handley, Deputy President of the AAT dismissed the application for review of the Registrar's decision and the disputes between certain members and the directors of the corporation continued. The corporation incurred significant legal costs during the AAT proceedings which are reflected in the 2008/09 and 2009/10 financial reports of the corporation. In those two financial years the corporation spent a total of $881,080 on legal costs (not all of which was related to the disputes or the AAT proceedings).
The cost of legal services to the corporation resulting from the disputes was noted by Mr RP Handley, Deputy President in the AAT proceedings at p12:
The time and costs involved in these proceedings continue to mount.
2.1.5 Ongoing disputes
On 29 October 2008 the directors of the corporation resolved to write to each of these applicants 'seeking a direction from them to NTSCorp concerning the release of genealogical materials to the corporation and to its consultant Dr Barry Morris.' Only three of the applicants signed the direction and returned it to the corporation. At a meeting of interested persons convened by the Registrar under section 439-5 of the Act on 26 May 2010 in Kempsey, described below, a number of applicants advised the Registrar that they did not want the corporation to be provided with copies of their genealogical records that would be retained by the corporation.
On 19 February the directors of the corporation met and admitted 23 people as members of the corporation. Some of those admitted were unresolved applicants from 2008. On 22 August 2009 the directors of the corporation met and admitted 10 people as members of the corporation. These 10 people were new applicants for membership and were not required to sign a direction to NTSCorp for the release of their genealogical information.
On 15 July 2010 the directors of the corporation met and admitted seven people as members of the corporation: 'The Secretary advised that membership Applications had been received from the grandchildren of her mother and fellow Director Muriel Vale, (Eileen Donovan, Clarence Donovan, Marjorie Rodgers, Thomas Donovan and Lillian Donovan) and also from two of the daughters of fellow Directors Mavis and Cyril Davis, (namely Tracey Griffen and Leonie McKay)…. That these applications are in a different category to the other pending applications (emphasis added) because the directors know from their own inquiries and knowledge that each of the applicants had grown up and lived in the Kempsey Shire, was of Dunghutti descent and identified as Dunghutti' … These seven people were new applicants for membership and were not required to sign a direction to NTSCorp for the release of their genealogical information.
In March 2010 a number of complaints were made to the Registrar by members of the corporation indicating that they were in dispute with the directors of the corporation. The disputes related to the governance of the corporation, specifically in relation to a large number of applications for membership of the corporation that had not been processed by the directors and the use of the financial resources of the corporation.
On 26 May 2010 the Registrar convened a meeting in Kempsey of interested persons under section 439-5 of the Act to 'discuss disputes that the corporation has been involved with in the last two years'. The Registrar also met separately with the directors of the corporation on 25 May 2010 in Kempsey to discuss the disputes and the financial position of the corporation. The disputes were not resolved at the meetings.
On 2 June 2010 the Registrar met with the majority of the directors of the corporation in Canberra with their legal adviser, Mr Eddy Neumann to discuss the disputes between certain members of the corporation and the directors. How to resolve the outstanding applications for membership was also discussed. The disputes and the processing of the applications were still not resolved.
Following further communication between the Registrar, the directors of the corporation and the members in dispute with the directors, a meeting was convened by the Registrar in Kempsey on 16 July 2010. Those that attended the meeting were the Registrar, all of the directors, five Dunghutti elders selected by the members in dispute with the directors to represent them and two anthropologists with significant experience working with the genealogies of the Dunghutti people: Dr Barry Morris from the University of Newcastle and Simon Correy from the NTSCorp (New South Wales native title services).
The purpose of the meeting was for the Dunghutti members present to review the outstanding applications for membership and with the assistance of the anthropologists, confirm whether the applicants were Dunghutti people and over the age of 18 years of age: two of the criteria for membership of the corporation (rule 5.2.2 of the corporation's rule book). At the meeting all of the applicants for membership (97 were still outstanding of the original 117 applicants) were, with the exception of two applicants, accepted as being at least 18 years of age, of Dunghutti descent and identified themselves as a Dunghutti person.
It was agreed at the meeting that the directors of the corporation would then meet to decide whether to accept any or all of the applicants for membership as members. It was also agreed that the corporation's contact person, Ms Mary-Lou Buck would undertake further investigation of the eligibility for membership of the two applicants disputed at the meeting. The Registrar wrote to the directors on 19 July 2010 to confirm the outcomes from the meeting. On 20 August 2010 the Registrar wrote to the directors providing further information requested by the directors at the meeting on 16 July 2010.
The directors wrote to the Registrar on 21 October 2010 indicating that the genealogical information provided at the meeting on 16 July 2010 was not clear and the directors would need to meet again with Mr Simon Correy to consider the eligibility of all the applicants for membership. On 4 November 2010 the Registrar wrote to the directors expressing concern at the delay in considering the applications for membership and referring to their duties as directors. The Registrar indicated that legal advice would be sought if the unresolved membership applications were not considered and determined by 30 November 2010.
On 30 November 2010 the directors wrote to the Registrar and indicated that the directors would not meet again to consider the unresolved membership applications until the second half of January 2011. The Registrar responded to this letter in writing on 1 December 2010, expressing the view that 'this is another unreasonable delay and the directors should meet to process the outstanding membership applications as soon as possible and before the end of [2010].
The directors subsequently called a directors' meeting on 22 December 2010 to consider the unresolved membership applications and invited Mr Simon Corey to attend. At the meeting the membership applications were considered but no applications were rejected or accepted.
A further directors' meeting was arranged, with Mr Correy in attendance, for 8 and 9 February 2011. I understand that at that meeting some outstanding membership applications were accepted and a small number rejected, but the directors deferred consideration of the majority of the membership applications to a later time and that the majority of the membership applications, lodged as long ago as 2007, remain unresolved.
The issues raised in Section 2.1 have been the subject of correspondence between the Registrar and the corporation or its legal adviser, Eddy Neumann.
2.1.6 Examiner's report regarding processing of membership applications
In September-October 2008 the corporation was examined under section 453-1 of the Act by Mr Lindsay Roberts FCA (the examiner). The examiner reported on membership application issues at pages 7-8, 9, 12 and 20-22 of the examination report to the Registrar. Amongst other things, the examiner stated:
'During the years from 2004 to mid 2007 the Group A Directors did not approve any new Membership Applications as they claim they required genealogy reports to assess eligibility.
…
On the 30th June, 2007 they approved twenty five (25) new "Group A" Members at a Directors meeting without genealogical reports.
In August, 2007, the Directors were presented with Seventy one (71) "Group B" Membership Applications, but they did not consider these Applications as they claim they required genealogical reports from NTS.
…
On 12 January, 2008 they approved a further twenty two (22) "Group A" Membership Applications without genealogical reports.
In March 2008 Mr Neumann wrote to the seventy one (71) "Group B" Applicants who had applied in August 2007, and stated they were now required to complete new revised Application Forms which provide ancestral information.
…
The Examination concluded that the Group A Directors have deliberately adopted a policy of selective Membership Application approvals denying legitimate Dunghutti people their basic Membership rights.'
The examiner reported on [sic] an exit interview held with nine of the Group A directors on 9 October 2008 as follows:
'…The discussions included…the concern surrounding the length of delay in considering a list of Membership Applications from Group B despite the fact that four (4) Group A Directors confirmed there was no doubt as to the eligibility of forty-four (44) of the ninety six (96) listed…The Directors present did not believe there was an issue with respect to the delayed Membership Application considerations and said they were going to have a meeting next weekend to 'process the known Dunghutti people.…'
Section 2.2 - Potential failures to comply with the Act and the internal governance rules
2.2.1 section 265-1(1) of the Act (duty of care and diligence)
Obligation
Under 265-1(1) of the Act a director must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they were a director of a corporation in the corporation's circumstances and occupied the office held by, and had the same responsibilities within the corporation as the director.
Potential failures
The corporation's directors have been involved in ongoing disputes with certain members of the corporation. The disputes relate to the governance of the corporation, including the use of its financial resources and the failure to deal with approximately 100 applications for membership from persons claiming to be Dunghutti people. Refer to 2.1.4, 2.1.5 and 2.1.6 above for further information.
The corporation has incurred significant legal costs as a result of the disputes and for the financial year ended 30 June 2009 these costs contributed significantly to a trading loss (deficit) of $546,192. In the 2008/09 and 2009/10 financial years the corporation expended a total of $881,080 on legal costs. While it is not possible for the Registrar to determine how much of the total legal costs were incurred directly or indirectly as a result of the disputes, given the corporation's historical expenditure on legal costs prior to the disputes and the proportion of total expenditure during the disputes (50.8%) I consider that a substantial proportion of the $881,080 was incurred as a result of the disputes.
The applications for membership that remain unresolved were submitted to the corporation in 2008, ostensibly in accordance with the corporation's rule book. The majority of the unresolved applications have not been dealt with by the corporation. A small number of the applicants have died since their applications were lodged with the corporation.
On the basis of the material available to me, I consider that the following conclusions are available to me:
• The process for deciding applications for membership of the corporation that is applied by the directors in relation to the unresolved membership applications submitted to the corporation in 2008 is not consistent with the process applied to applications for membership by other Dunghutti people Namely 'a direction from them to NTSCorp concerning the release of genealogical materials to the corporation and to its consultant Dr Barry Morris' is only required from the 2008 unresolved applicants for membership.
• The process has not been applied reasonably, fairly and consistently to all Dunghutti people applying for membership of the corporation. The unresolved applications for membership submitted to the corporation in 2008 have not been considered in a timely manner, and in a reasonable, fair and consistent way, as described above.
• By failing to deal with the unresolved membership applications submitted in 2008 the corporation is not able to fully and properly undertake its role under the Native Title Act 1993 as an RNTBC: to act as the agent and trustee for all Dunghutti people in respect of matters relating to native title rights and interests in certain land (or compensation received for the extinguishment of native title or acts affecting the native title in that land).
• The corporation is also unable to fully and properly meet the majority of the objectives that are set out in rule 3 of the corporation's rule book, which relate to the corporation's role as an RNTBC and to represent the interests of all Dunghutti people. It is apparent from rules 3 and 5.2.2 that the general intention and common understanding of those forming the corporation and seeking recognition of it as an RNTBC was that the corporation is to represent all Dunghutti people and those that are over the age of 18 years and identify as Dunghutti should be permitted to be members. The conduct of the directors in not dealing with the unresolved membership applications reasonably, fairly and consistently is frustrating the corporation in meeting its objectives and the purpose of the corporation.
• The directors have received extensive assistance, from the AAT, anthropologists and the Registrar's office, to resolve the disputes and to determine whether the applicants for membership meet the eligibility requirements in rule 5.2.2 of the corporation's rule book. Refer to 2.1.4 and 2.1.5 above for further information.
• No reasonable director acting with reasonable care and diligence would have failed to deal with the membership applications in the time since they were submitted to the corporation in 2008. The directors have failed to deal with the membership applications in a reasonable time and have not applied the process for deciding membership applications reasonably, fairly and consistently to all Dunghutti people applying for membership.
• The actions of the directors in not resolving the disputes and not dealing with the membership applications are not in good faith or for a proper purpose. The directors have acted to exclude from membership people associated with and/or supportive of the current members that are in dispute with the directors. The actions of the directors are to ensure that they remain as directors of the corporation.
• The directors are acting in their own interests rather than in the best interests of the corporation (refer to 2.2.2 below for further information) and no reasonable director exercising care and diligence would have made such decisions.
• The significant expenditure on legal costs by the corporation ($881,080 in 2008/09 and 2009/10 and 50.8% of total expenditure) at the direction of directors is not in the best interests of the corporation and has not been made for a proper purpose.
• In all the circumstances, the directors of the corporation have failed to comply with section 265-1 of the Act and the Registrar has not received a satisfactory explanation for this failure to date.
...
Section 2.4 - Affairs of the corporation are being conducted in a way that is oppressive or contrary to the interests of the members of the corporation
2.4.1 Oppressive conduct
I refer to the information in 2.1 and 2.2.1 above and consider that, on the basis of that information, the conclusion that the affairs of the corporation are being conducted in a way that is oppressive (namely the conduct of the directors in not resolving the disputes with certain members and not dealing with the unresolved membership applications reasonably, fairly and consistently is frustrating the corporation in meeting its objectives and its purpose) is reasonably available.
2.4.2 Contrary to the interests of the members of the corporation as a whole
I refer to the information in 2.1 and 2.2.1 above and 2.5.1 below and note that the corporation has incurred significant legal expenses as a result of the disputes which I consider has impacted on its ability to deliver services to members and on the objectives of the corporation.
Based on this information I consider that the conclusions that the affairs of the corporation are being conducted by the directors contrary to the interests of members of the corporations as a whole due to:
• the long standing disputes between some members of the corporation and the directors, and
• the breaches of the Act and the corporation's rule book, and
the directors are acting in their own interests rather than the interests of the members of the corporation as a whole and in a way that is unfair and unjust to members of the corporation, are reasonably available.
Section 2.5 - Disputes between the corporation's members and officers are interfering with the proper conduct of the corporation's affairs
2.5.1 Disputes
From 2007 to 2011 the Registrar has received a large number of complaints from members of the corporation indicating that they are in dispute with the directors of the corporation. The complaints were made to the Registrar in confidence and under section 604-5 of the Act the information is deemed to be protected information. Pursuant to section 604-10 of the Act and the provisions of the Privacy Act 1988 the name of the complainant and copies of the complaints must be protected by the Registrar.
However, the following is a summary of the substance of the complaints made to the Registrar by members of the corporation:
• The failure to deal with the processing outstanding membership applications made in 2008
• The failure to conduct annual general meetings of the corporation by the time required under the Act and the corporation's rule book
• The failure to hold general meetings of the corporation at a reasonable time and place
• The conduct of general meetings of the corporation on Saturdays, which are not appropriate for members who are Seventh Day Adventists
• The attendance of 'the corporation's lawyer and accountant at general meetings which was an unfair cost on the corporation'
• The failure to table the financial reports and auditor's reports at annual general meetings of the corporation
• The use of 'native title claim funds' for the personal benefit of the directors and legal advisers to the corporation
• Excessive expenditure on legal costs and travel for directors
• Failure to respond to correspondence requesting information on 'when a general meeting would be convened in order to pass new members that were reviewed at a joint meeting'
• The removal of members from the register of members by the directors of the corporation
• The rejection of applicants for membership by the directors of the corporation as they were not considered to be of Dunghutti descent
• The 'misappropriation of funds and nepotism', and
• That 'there won't be any money left'.
I do not rely on the substance of the complaints as potential grounds for a determination, unless otherwise specified in this notice, but as an indication of the existence of disputes between members and directors of the corporation.
A number of members have also written to the Registrar in 2008 and also in 2010 and requested the appointment of a special administrator to resolve the disputes with the directors of the corporation and the issues that are the subject of the disputes. This correspondence is also protected information.
I refer to the information in 2.1.4, 2.1.5, 2.1.6 and 2.2.1 above and the disputes between some members of the corporation and the directors, which has in the past resulted in proceedings in the AAT, in which the corporation was the second respondent. Whilst the application was ultimately dismissed, the proceedings did not resolve the underlying dispute which arguably has been caused, at least in party, by the directors' failure to deal with the unresolved membership applications reasonably, fairly and consistently, or in a timely fashion.
I consider that there is little doubt that there is a dispute between some members of the corporation and the directors of the corporation, and that it would be reasonable to conclude that this dispute is interfering with the proper conduct of the corporation's affairs. Significant legal costs have been incurred by the corporation that could otherwise have been used to deliver services to members and Dunghutti people and to meet the objectives of the corporation.
I consider that the directors are devoting significant time to the disputes rather than meeting their obligations under the Act and the corporation's rule book.
Section 2.6 - In the interests of the members of the corporation and in the public interest
2.6.1 Interests of members and in the public interest
I refer to the information above concerning the other potential grounds for a determination that the corporation is to be under special administration and the important role that the corporation plays as an RNTBC: to act as the agent and trustee for all Dunghutti people in respect of matters relating to native title rights and interests in certain land (or compensation received for the extinguishment of native title or acts affecting the native title in that land).
In all of the circumstances set out above, it is my present view that it would be in the interests of the members of the corporation, and in the public interest, that a determination be made.
Section 2.7- Period of Special Administration
I am of the view that, in the event that a determination under s 487-1 of the Act is made, the period of special administration specified in the determination should be 6 months from the date of the determination. It is my present view that this period is likely to be sufficient to address the issues identified in this notice.
26 The respondents also sent a letter dated 11 February 2011 to the appellant's solicitors. It read:
I refer to your letter of 8 February 2011 regarding a notice under s 487-10 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006, forwarded to the directors of the Dunghutti Elders Council (Aboriginal Corporation) RNTBC (DECAC) under cover of a letter dated 31 January 2011.
I note you advice that you act for DECAC and its directors in relation to that notice.
I also note your assertions that, by virtue of various alleged irregularities, the notice is invalid and/or is otherwise defective, and your invitation for the notice to be withdrawn.
This is to inform you as follows:
1. Whilst I do not accept the correctness of any of the propositions contained in your letter concerning the validity or effectiveness of the notice, I do not consider it desirable to engage in a debate regarding procedural issues, let alone to engage in litigation over such matters, and so to delay consideration of the substantive issues raised in the notice.
2. In the circumstances, I have decided to withdraw the notice dated 31 January 2011, and to issue a fresh notice to your clients. The fresh notice is in substantially the same terms as the original notice, but seeks to address some of the procedural aspects of the concerns expressed in your letter.
3. As your letter does not suggest that you have instructions to accept service of any fresh notice to be issued, the notice is being provided to your clients directly.
4. Whilst I note your assertion that the time for response provided in the original notice was insufficient, I do not accept that view. In any event, the fresh notice requires a response within two weeks of the date of that notice, and as the notice is substantially in the same terms as the notice given on 31 January 2011, I consider this period more than reasonable in all the circumstances.
27 The appellant's letter of 18 February 2011 to the respondents contained the following relevant material:
We refer to your letter of 11 February 2011 addressed to this firm and to your letter of the same date addressed to the directors of DECAC and enclosing a notice purporting to have been given under s 487-10 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 ("the Act").
We are instructed by DECAC and the directors to reply to your letters as follows:
Letter addressed to this firm
1. In paragraph 1 you state that you do not consider it desirable "to engage in a debate regarding procedural issues". In paragraph 2 you state that the "fresh notice is in substantially the same terms as the original notice" and that it seeks to address "some of the procedural aspects of the concerns expressed in your letter".
2. Having compared the two notices it is apparent that the fresh notice is not in substantially the same terms as the original notice and contains new material of a substantial nature such as section 2.1.6 (which relates to the examiner's report regarding processing of membership applications and detail concerning complaints in section 2.5.1 (which relates to disputes). We find it incredible that you would regard those matters as procedural and not substantial. We make further comment about this additional material below.
3. We note that you do not address any of the substantive defects in the notice of 31 January 2011 which we pointed out in our letter of 8 February 2011, nor have you amended the statement of facts to include undisputed facts favourable to DECAC that were drawn to your attention in our letter. This indicates that you have already made up your mind as to what facts you will take into account and that you intend to ignore relevant facts tending against the appointment of a special administrator. Consequently, our client apprehends that you will not fairly listen to relevant evidence or rational arguments it might choose to put before you. We make further comment on this aspect of the matter below.
4. In paragraph 4 you again claim that the fresh notice is "substantially in the same terms as the notice given on 31 January 2011" (emphasis added) and use that as part of your justification for not providing any further time to respond. However, as we pointed out in our letter of 8 February 2011 no notice was given to DECAC on 31 January 2011. So, if you mean to suggest that the period in the two notices accumulate, we reject that suggestion. Furthermore, even if the notice were otherwise valid, which we deny, the period specified in the notice is not a reasonable period to respond, given the nature and extent of the allegations and the incomplete and tendentious recitation of the facts, which calls for a comprehensive answer.
Letter addressed to DECAC directors
Notice is invalid
5. Our client does not accept that the notice accompanying your letter of 11 February 2011 is a valid and effective notice to it under s 487-10 of the Act which include those set out in the following paragraphs.
Bias
6. Our client contends that a determination under s 487-1 of the Act by you as the Registrar's delegate would be vitiated by the existence of bias. This is so for a number of reasons including the following:
6.1 Even though you have amended the content of the notice following receipt of our letter of 8 February 2011, you have failed to include in the fresh notice undisputed facts favourable to DECAC that were drawn to your attention in our letter. This indicates that you have already made up your mind as to what facts you will take into account and that you intend to ignore relevant facts tending against the appointment of a special administrator.
6.2 In the notice of 31 January 2011 you concluded, "I consider that, in all the circumstances set out above, that it in the interests of the members of the corporation, and in the public interest, that a determination be made". In the notice of 11 February 2011 you have attempted to retrieve the situation by changing that clear statement of prejudgment to read, "In all the circumstances set out above, it is my present view that that [sic] it would be in the interests of the members of the corporation, and in the public interest, that a determination be made". However, in all the circumstances of this case including those set out in this paragraph 6, a fair-minded observer cognisant of the facts might reasonably apprehend that the original statement reflects the true position and that you might not bring an impartial and unprejudiced mind to the question of whether a determination should be made.
6.3 In approaching the question of the outstanding membership applications it is clear you have made up you mind:
6.3.1 that the applicants are entitled to membership; and
6.3.2 that they had provided with their applications sufficient material for the directors to be satisfied as to their eligibility.
It is one thing to state that there are disputes as to membership, but it is another to say that it is open to you to conclude that the directors have improperly used their position or have acted in a way that appears to be unfair or unjust by reason of the fact that they have been "excluding Dunghutti people from membership of the corporation", as you state in sections 2.2.3 and 2.3.2. Furthermore, you constantly refer to the delay in processing the applications by reference to the fact that the applications were submitted in 2008. (See, for example, section 2.2.1, first three bullet points on page 10 and first bullet point on page 11). Yet you do so without acknowledging that it was not until late 2010 that the directors were given the genealogical information which they had been requesting since 2008. That undisputed fact was well known to you even before you issued the notice of 31 January 2011 and was pointed out to you in our letter of 8 February 2011 at paragraphs 17.7-17.9. Nevertheless, in the notice of 11 February 2011 you still have not made that acknowledgment, indicating that you have made up your mind on this aspect and are not open to persuasion.
6.4 In section 2.3.2 you cite the failure of the directors to resolve disputes between members and directors of the corporation as a ground for fiding that the directors have acted in the affairs of the corporation in a way that appears to be unjust and unfair to members of the corporation. That can only be so if the directors are in the wrong. But nowhere in the notice do you explicitly say so, nor do you set out why you consider that might be so. Accordingly, a fair-minded observer cognisant of the facts might reasonably conclude that you might have made up your mind as to where the fault lies with regard to those disputes.
7. We submit that having regard to the matters set out above, singly and collectively, a fair-minded lay observer, who is properly informed as to the nature of the proceedings, the matters in issue and the conduct which is said to give rise to an apprehension of bias, might reasonably apprehend that you might not bring an impartial mind to the question of whether to make a determination under s 487-1 of the Act.
Notice is defective in content
8. In our letter of 8 February 2011 we identified some of the reasons why our client regarded the notice of 31 January 2011 to be invalid. As the notice of 11 February 2011 has not addressed those matters in a satisfactory way, the fresh notice also suffers from those defects. Other defects in the notice of 31 January 2011, not particularised in our letter, also remain. Without canvassing all of the defects in the notice of 11 February 2011, we identify in the paragraphs that follow some of the matters which our clients regard as providing grounds to have the notice set aside.
9. In section 1.4 of the notice of 11 February 2011 you state that you can determine that the corporation is to be under special administration "if I am satisfied that the appointment of the special administrator is required because of disputes between the corporation's members and officers".
10. We firstly note that this is an erroneous statement of the test under s 487-5(1)(f) of the Act. Consequently, a determination made on that basis would constitute an error of law. Clearly, what the section requires is that you be satisfied that the disputes between the corporation's members and the corporation's officers are interfering with the proper conduct of the corporation's affairs.
11. Consequently, unless you acknowledge that the notice is in error in this respect and withdraw it, we submit that this erroneous statement of the law is a ground to restrain you from purporting to make a determination under s 487-1 of the Act based on the ground stated in section 1.4 of the notice.
12. Furthermore, in section 2.5 you set out the reasons why you consider that you would be justified in making a determination under s 487-1 of the Act based on the ground in s 487-5(1)(f) of the Act. In doing so you refer to "a large number of complaints" from members, which you say is "protected information" under s 604-5 of the Act. You then set out "a summary of the substance of the complaints", without indicating that they or any of them are justified. In fact you state that you do not rely on the substance of the complaints as potential grounds for a determination unless otherwise specified in the notice. As far as we can determine from the notice, only one of the listed complaints has been specified elsewhere in the notice, namely, "the failure to deal with the processing of outstanding membership applications made in 2008".
13. We submit that the fact that complaints have been made is not of itself "an indication of the existence of disputes between members and directors of the corporation" for the purposes of s 487-5(1)(f) of the Act. This is particularly so where it is not suggested that the complainants have made the complaints to the directors. Furthermore, it is difficult to conceive how uncommunicated complaints could interfere with the proper conduct of the corporation's affairs as its required to be the case under s 487-5(1)(f) of the Act.
14. In fact, you do not attempt to state how those complaints are interfering with the proper conduct of the corporation's affairs. It is only in relation to what you describe as "the underlying dispute", whatever that might be intended to mean, that you attempt to show how disputes might be said to interfere with the proper conduct of the corporation's affairs. In that context the only matters you raise are:
14.1 the expenditure of "Significant legal costs" that could have been used otherwise (which as pointed out in our letter of 8 February 2011 is based on an unfounded assumption): and
14.2 that the directors are devoting significant time to "the disputes" rather than meeting their obligations (which is an unsubstantiated and unparticularised assertion).
15. Essential to the making of a determination under s 487-1 of the Act is the existence of the jurisdictional fact that disputes between the corporation's members and the corporation's officers are interfering with the proper conduct of the corporation's affairs. The notice of 11 February 2011 does not reveal how that might be so. Accordingly, in respect of this aspect, no adequate opportunity to respond is provided by the notice.
16. We submit, therefore, that a determination under s 487-1 of the Act made on the basis of ground 1.4 would be null and void.
Reliance on examination report
17. Another respect in which the notice is defective relates to the inclusion in the notice of 11 February 2011 of the material in section 2.1.6 (which relates to the examiner's report regarding processing of membership applications).
18. In sections 2.2 and 2.5 you expressly rely, inter alia, on the information in section 2.1.6. However, the examiner's report referred to in that section has never been given to DECAC, apart from a short extract provided by the Registrar on 10 June 2010.
19. In footnote 4 on page 8 of the notice of 11 February 2011 you state, "A copy of the examination report has been produced to Ruth Campbell, Mary-Lou Buck and the corporation's solicitor". What you omit to state is that your office provided a copy of the examination report to those individuals by letter dated 5 February 2011 in the context of the Registrar having received an application under the Freedom of Information Act 1982 by a third party for access to the examination report. The letter invited the individuals to comment on the possible release of the document. Therefore, in no way can it be said that the giving of the examination report to those individuals for that purpose amounts to its being given to DECAC for the purpose of responding to the notice of 11 February 2011.
20. It is apparent from the notice of 11 February 2011 that you are proposing to base your determination under s 487-1 of the Act upon adverse findings in the examination report, notwithstanding that DECAC has never been given a copy of the report let alone an opportunity, in line with the principles set out in Mahon v Air New Zealand, to comment on it and to put forward additional material of probative value which, had it been placed before the examiner, might have deterred him from making those findings. Even the extract which the Registrar provided to DECAC on 10 June 2010 was not given to DECAC for the purpose of giving DECAC an opportunity to comment and provide additional material to the examiner. In any event, that extract appears to have been taken from pages 7-8 of the examination report only, whereas in the notice of 11 February 2011 you also refer specifically to other parts of the examination report not included in the extract.
21. The examination was conducted in September/October 2008, almost 2½ years ago. In all the time that has since elapsed the Registrar has not considered it necessary to give DECAC a copy of the report and an opportunity to comment on it in accordance with the principles in Mahon v Air New Zealand. Our client has had and continues to have a legitimate expectation that the Registrar would not seek to rely on findings in the examination report as "information" upon which he is entitled to rely in making a determination under s 487-1 of the Act. If you, as the delegate of the Registrar, were to rely on the report in that way, it would constitute a denial of procedural fairness which would vitiate the determination.
Failure to allow adequate opportunity to show cause
22. Section 487-10 of the Act requires that the Registrar must, before determining that an Aboriginal and Torres Strait Islander Corporation is to be under special administration, give the corporation notice in writing inviting the corporation to show cause, within a reasonable period specified in the notice, why the determination should not be made and must consider any representations the corporation makes to the Registrar within that period.
23. Procedural fairness requires that in order to comply with that section you provide our client with an adequate opportunity to make representations. To satisfy that obligation it is essential that our client be made aware of the material on which you intend to rely for the purposes of making a determination under s 487-1 of the Act and that our client be given adequate opportunity to present other materials and submissions to you in opposition to the making of the determination.
24. Our client considers that the notice of 11 February 2011 does not satisfy the obligation to accord it procedural fairness. Its reasons for doing so include the following:
24.1 In section 2.2.1 you state that on the basis of "material available" to you that you consider that the conclusions you then set out are available to you. However, you do not identify what that material is. As noted above and in our letter of 8 February 2011 you have failed to refer in the notice of 31 January 2011 and 11 February 2011 to documents that are relevant to the consideration of whether or not a determination should be made under s 487-1 of the Act. Therefore, it is apparent that the notice does not itself identify all of the material which you propose to take into account when considering to make a determination under the section. In order for our client to have a reasonable opportunity to make submissions to you, it is essential that it be provided with a copy of all the material on which you intend to rely in making a determination under s 487-1 of the Act.
24.2 It is readily apparent from a reading of the notice of 11 February 2011 that you consider the ongoing existence of disputes between members of the corporation and its directors to be a significant factor in your consideration of whether to make a determination under s 487-1 of the Act. However, as noted above, it is difficult to determine from the notice itself precisely what the disputes are that you assert might be relevant to the determination.
24.3 The word "disputes" is used liberally throughout the notice. However, but for two instances, the word is used without specificity. Sometimes it is used in the context of the question of the outstanding membership applications, from which one might infer that that is the subject matter of the dispute under discussion. But at other times "disputes": is used in contradistinction to that question. For example: "The actions of the directors in not resolving the disputes and not dealing with the membership applications are not in good faith or for a proper purpose" (second bullet point on page 11). In such a case it is not clear what is the nature of the dispute to which you refer.
24.4 As noted, there are only two instances in the notice where the word "dispute(s)" is used with specificity. The first instance is in section 2.2.1:
The disputes relates to the governance of the corporation, including the use of its financial resources and the failure to deal with the approximately 100 applications for membership from persons claiming to be Dunghutti people. Refer to 2.1.4, 2.1.5 and 2.1.6 above for further information.
Sections 2.1.4, 2.1.5 and 2.1.6 occupy four pages of the notice, of which all but five lines relates to the question of membership applications. The five lines occur in the first paragraph of section 2.1.4 and refers to the concerns of some members regarding "the governance of the corporation, including the use of its financial resources", said to have been raised in 2007 - some 3½ years ago.
24.5 The second instance of the notice providing specificity to the term "disputes" is in section 2.5.1, where reference is made to complaints made to the Registrar in confidence which you state are "protected information" under s 604-5 of the Act. However, in that instance you state that you do not rely on the substance of the complaints as potential grounds for a determination unless otherwise specified in the notice. As noted above, that relates only to "the failure to deal with the processing of outstanding membership applications made in 2008".
25. In order for our client to have a reasonable opportunity to make submissions to you, it is essential that you specify the nature and the currency of the disputes which you consider are relevant to your making a determination under s 487-1 of the Act. Apart from the question of outstanding membership applications, the notice of 11 February 2011 does not identify any disputes which are current or which are less than three years old.
26. Upon receipt of a copy of the material on which you intend to rely in making a determination under s 487-1 of the Act and upon receipt of the particulars of the disputes which you consider are relevant to your making such a determination, our client will need more time than the period specified in the notice in order to be given an adequate opportunity to present other materials and submission to you in opposition to the making of the determination. We would be happy to discuss with you what might be a reasonable period once we have seen the extent of the material upon which you intend to rely.
27. If you decline to provide that material and the requested particulars to us then our client will seek an order from the Federal Court restraining you from making a determination until such material and particulars are provided and a reasonable time is given thereafter to respond.
Conclusion
28. We are instructed on behalf of DECAC to request that you acknowledge the invalidity of the notice of 11 February 2011, purportedly given under s 487-10 of the Act, and that you withdraw it.
29. If we do not receive written notification of the withdrawal of that notice by 4 pm on 23 February 2011, DECAC will seek such relief as it is advised is appropriate.
30. If you withdraw the notice and the Registrar proposes to serve a valid notice, the Registrar should, when giving that notice:
30.1 provide DECAC with copies of all the material upon which the Registrar intends to rely in deciding whether to make a determination under s 487-1 of the Act and particulars of the disputes which he considers are relevant to making such a determination; and
30.2 allow a more extensive time period in which to respond than that which was given in the notice of 11 February 2011.
31. We are sending a copy of this letter to the Registrar and will request that if he proposes to serve a valid notice he should appoint a delegate other than yourself to exercise his powers under Division 487 of the Act.