Consideration of the Application
46 If the Registrar had applied for costs against the Corporation on the dismissal of the appeal, on the dismissal of the application for the Full Court to re-open its decision, and on the application for a stay, the Court would undoubtedly have made an order in favour of the Registrar against the Corporation because there was no reason that costs should not have followed those events. However, the Registrar has instead sought orders that, if made, would make the directors of the Corporation personally liable to pay the costs which would have otherwise been payable by the Corporation, and to the exclusion of any liability on the part of the Corporation, without the directors being entitled to indemnity from the Corporation for the payment of those costs. The directors deny any liability to pay costs.
47 On this application the Registrar's counsel informed the Court that the Registrar saw the preservation of the Corporation's assets as a function and aim of his office. To that end, the Registrar was of the view that the Registrar should assist the Corporation to preserve its assets by not requiring the Corporation to meet any order for costs which might be made in respect of the appeal and the interlocutory applications, but instead require the directors of the Corporation to meet those orders for costs personally.
48 The Registrar has contended that the appeal was always without merit and ought not to have been prosecuted. We agree with that proposition. The application before the primary judge and the appeal from the primary judge was always doomed to fail. However, the question of costs before the primary judge is not an issue on this application, it having been disposed of by the primary judge before the appeal was brought.
49 The Registrar contends that the directors have failed in the discharge of their duties by pursuing this appeal and the subsequent interlocutory applications.
50 On 11 February 2011, when the Registrar issued a notice requesting the Corporation to show cause why a special administrator should not be appointed, the Registrar raised four particular matters, namely: that in the financial years 2008/2009 and 2009/2010 50.8% of the Corporation's total expenditure had been on legal costs; the extent of financial benefits paid to directors by the Corporation; failures by the Corporation to comply with the CATSI Act; and matters relating to the Corporation's internal governance under the Rule Book.
51 The Corporation did not respond to the notice as the notice required, but instead brought the proceeding which was heard by the primary judge challenging the validity of the notice pursuant to s 39B(1) of the Judiciary Act 1903 (Cth). That proceeding was dismissed and the Corporation appealed to this Court. As already noted, the Registrar wrote to the Corporation regarding the question of costs. In the Full Court each of the Corporation's grounds of appeal was dismissed for reasons similar to those given by the primary judge. The appeal was never likely to succeed.
52 The Registrar contends that the directors caused the Corporation to challenge the notice, and bring the appeal and the subsequent interlocutory applications, not in the Corporation's interests or in the interests of the Corporation's members, but rather to protect the directors' own interests. The Registrar contended that the directors have been paid substantial amounts of money in the two financial years to which we have referred in contravention of the rules to which we have also referred. It was contended that it may be inferred that the directors therefore acted in their own interests so as to avoid the appointment to the Corporation of a special administrator, and the consequences which might follow. It was also contended that the directors were motivated to cause the Corporation to do what it did so that the directors could continue to receive the substantial sums which they had received in the two financial years to which reference has been made.
53 The evidence is that most of the directors have received substantial sums of money over the two financial years. In the financial year ended 30 June 2010 the directors received $155,673 in remuneration, $98,699 for directors' travel, and $24,000 in gifts. Those payments totalled 25% of the Corporation's expenses. In the financial year ended 30 June 2011 the directors received $352,544 in remuneration, $121,974 for directors' travel, and $26,000 in gifts. Those payments totalled 37% of the Corporation's expenses for that year. The directors have not sought to adduce any evidence on this application to explain the circumstances in which they received those sums, or how they were entitled to receive those sums having regard to the provisions of the Rule Book. The Registrar contends that in those circumstances the Court is entitled to infer that the directors cannot satisfactorily explain the payments made to them by the Corporation.
54 The notice to show cause and the evidence adduced by the Registrar indicate serious problems in the governance of the Corporation over the two financial years. Substantial payments were made by the Corporation to the directors which must be explained.
55 The Corporation has received continuing legal advice from a solicitor and from senior and junior counsel up to and including the appeal, including the advice recorded in the minute. The Registrar contends that the Corporation should not have brought this appeal or the subsequent interlocutory applications on the oral advice referred to in the minute, but that the directors should have called upon the Corporation's solicitor and counsel to give advice in writing. That may or may not be so. However, it may be inferred, in the absence of any evidence to the contrary, that the directors gave the instruction, which is recorded in the minute, to bring the appeal on the strength of the oral advice referred to in the minute.
56 The Registrar relies on two breaches by the directors. The first relates to the remuneration paid to the directors. Only a director who is an employee may be paid remuneration: sub-rule 10.5(b)(i). A majority of the directors must not be employees: sub-rule 8.2(d)(i). The Registrar contends that all of the directors are being treated as employees in contravention of that rule and are being paid remuneration.
57 The second relates to the instruction that was given to appeal, which the Registrar contends contravened rule 19.1 because the Corporation holds compensation monies paid in relation to native title, and any resolution which would involve the expenditure of any of the compensation monies could only be made by the members in general meeting: sub-rule 19.1(a)(ii). No meeting was ever convened by the directors.
58 The Registrar contends therefore that the resolution to bring the appeal and the prosecution of the appeal were further instances of unsatisfactory governance, and acts from which it may be inferred that the directors acted in their own interests rather than in the Corporation's interests.
59 The Corporation's solicitors acted aggressively in the Corporation's reaction to the notice to show cause, and in the prosecution of the proceeding before the primary judge. The Corporation's solicitors also continued to put the Corporation's case strongly to the Registrar, even after the Full Court decision and when the Corporation was called upon to answer the show cause notice.
60 The Corporation was represented by senior and junior counsel before the primary judge and on the appeal, and on the appeal senior counsel put everything possible to persuade the Court to reverse the primary judge's decision. Different counsel, including senior counsel and junior counsel, represented the Corporation on its application to the Full Court to re-open its decision. The Corporation was also represented by senior counsel and junior counsel, other than those who appeared on the appeal and on the application to the Full Court to re-open its decision, on the application to Foster J for a stay of the Court's orders pending an application for leave to appeal to the High Court.
61 The Corporation has been represented on the appeal, and the two subsequent interlocutory applications, by three different senior counsel and three different junior counsel. Although that does not mean that any of those counsel was of the opinion that the Corporation's appeal or interlocutory applications should succeed, it does indicate that all of those counsel thought that an argument could be put on behalf of the Corporation on the appeal and the subsequent interlocutory applications that was not bound to fail. In Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683; [2003] QCA 157, Davies JA said at [24]:
[24] To the extent that those statements state or imply that it is not improper for a legal representative to present a case which he or she knows to be bound to fail, I would reject them. I would prefer to say that it is one thing to present a case which is barely arguable (but arguable nevertheless) but most likely to fail; it is quite another to present a case which is plainly unarguable and ought to be so to the lawyer who presents it. In my opinion, with respect, it is improper for counsel to present, even on instructions, a case which he or she regards as bound to fail because, if he or she so regards it, he or she must also regard it as unarguable.
62 We infer that counsel were not of the opinion that the appeal and interlocutory applications were unarguable. Counsel must have been of the opinion that in prosecuting the appeal and the two interlocutory applications the Corporation was not abusing the Court's processes: Ridehalgh v Horsefield [1994] Ch 205 at 233.
63 Apart from the legal advice that the Corporation and therefore the directors have had, the Corporation has also received accounting and audit advice over the same period. Wrights Chartered Accountants claim in a letter of 11 August 2001 that they have been responsible for the accounting work of the Corporation. They claim that there is significant evidence to support the conclusion that the directors spent large amounts of time in business meetings and in attending seminars and conferences. They say that the directors who were employees were compensated for the work in accordance with an Australian Tax Office (ATO) approved rate, and have received travel and meal allowances also at an ATO rate. They have also pointed out that the audit opinions in the years 2008/2009 and 2009/2010 were unqualified except insofar as there was an audit management letter dated 12 January 2011.
64 Another partner of Wrights, who was the auditor of the Corporation, but who sits on the other side of the "Chinese wall" to the partners in Wrights who give accounting advice, confirmed the advice given by his accounting partner, and stated that the accountant's recommendations have been implemented by the Corporation's directors.
65 Those letters were not admitted as evidence for the truth of the matters contained in them, but only to establish that the letters had been written. However, the letters do indicate that the Corporation has been receiving accounting and audit advice over the relevant periods.
66 The directors have not adduced any evidence in their defence, and so any inferences to be drawn are to be drawn on the evidence adduced by the Registrar and having regard to the absence of any evidence from the directors.
67 It is not clear what degree of influence the Corporation's previous lawyers had upon these directors. Those lawyers who represented the Corporation before the primary judge and on the appeal had received substantial sums of money by way of payment of fees over the same period as the directors received their money. It was suggested to Mr Williams that in those circumstances it was hard to know whether the directors acted independently of the advice which the minute shows that they received, or whether they acted in conformity with that advice. If they acted in conformity with that advice the question would be whether they were entitled so to do.
68 In our opinion there is no reason to infer that the directors acted otherwise than in accordance with the legal advice which they received, and which is included in the minute of 20 April 2011. That minute records that they were advised by their solicitors, senior counsel, and junior counsel that there were good grounds to lodge an appeal against the decision of the primary judge.
69 Assuming that they did act on the advice of their lawyers, the question is, as we have said, whether they were entitled so to do. There is no evidence that they acted for any other reason, unless it be inferred that independent of that advice, the receipt of the large sums of money over time motivated them to bring the appeal and the interlocutory applications which followed. There is not sufficient evidence, we think, to raise that inference.
70 In the end however these factual matters need not be examined in detail nor firm conclusions reached, because even if the Registrar's contentions as to the directors' motivations were accepted, in our opinion the orders sought should not be made.
71 Section 43 of the Federal Court of Australia Act 1976 (Cth) (FCA) provides:
(1) Subject to subsection (1A) and section 570 of the Fair Work Act 2009, the Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which this or any other Act provides that costs shall not be awarded.
(1A) In a representative proceeding commenced under Part IVA or a proceeding of a representative character commenced under any other Act that authorises the commencement of a proceeding of that character, the Court or Judge may not award costs against a person on whose behalf the proceeding has been commenced (other than a party to the proceeding who is representing such a person) except as authorised by:
(a) in the case of a representative proceeding commenced under Part IVA - section 33Q or 33R; or
(b) in the case of a proceeding of a representative character commenced under another Act - any provision in that Act.
(2) Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.
(3) Without limiting the discretion of the Court or a Judge in relation to costs, the Court or Judge may do any of the following:
(a) make an award of costs at any stage in a proceeding, whether before, during or after any hearing or trial;
(b) make different awards of costs in relation to different parts of the proceeding;
(c) order the parties to bear costs in specified proportions;
(d) award a party costs in a specified sum;
(e) award costs in favour of or against a party whether or not the party is successful in the proceeding;
(f) order a party's lawyer to bear costs personally;
(g) order that costs awarded against a party are to be assessed on an indemnity basis or otherwise.
72 Sub-section (3) was included at the same time as Part VB of the FCA for the purpose of reinforcing the powers given to the Court by Part VB by giving the Court explicit powers to make orders for costs not only following the ultimate verdict in a trial but during the management of any proceeding or appeal before the trial or hearing. In particular, sub-section (3) reinforced the Court's power to award costs against a party's lawyer (s 43(3)(f) and s 37N(5)) and to award costs on an indemnity basis (s 43(3)(g) and s 37P(6)(e)).
73 Interestingly, the sub-section does not address the Court's power to order costs against a non-party. That might be because it was thought that the power existed and did not need to be addressed. However, each of the powers identified in sub-section (3) had been thought to exist prior to the enactment of the sub-section. Indeed most of the powers had been addressed in the Rules of Court: see Order 62 of the Federal Court Rules 1979 (Cth). It would be wrong to assume that because s 43 does not directly empower the Court to make costs orders against non-parties (except in the limited sense in s 43(1A) which is not relevant) the Court does not have power to make such an order. The enactment of s 43(3) does not throw any doubt upon the Court's power to make orders for costs against non-parties who are not the parties' lawyers.
74 Even before the enactment of s 43(3), s 43 was understood to confer upon the Court the widest possible power and the widest possible discretion in relation to the award of costs. The discretion was unfettered except that the discretion needed to be exercised judicially: Re Sanchez; Ex parte Smits (1994) 49 FCR 326.
75 Section 43, before the enactment of sub-section (3), was construed as providing power to make an order for costs against a non-party: Caboolture Park Shopping Centre Pty Ltd (In Liq) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 at 229-230; White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at 229 per Goldberg J. In Caboolture Park Shopping Centre Pty Ltd (In Liq) v White Industries (Qld) Pty Ltd the Court said there was no reason to doubt that the power to make an order for costs against a non-party existed: at 229. There is still no reason to doubt the existence of the power.
76 Those decisions followed upon the decision of the High Court in Knight v FP Special Assets Ltd (1992) 174 CLR 178. In that case Mason CJ and Deane J said, after a comprehensive review of the authorities, at 192-193:
For our part, we consider it appropriate to recognize a general category of case in which an order for costs should be made against a non-party and which would encompass the case of a receiver of a company who is not a party to the litigation. That category of case consists of circumstances where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Where the circumstances of a case fall within that category, an order for costs should be made against the non-party if the interests of justice require that it be made.
77 Justice Gaudron agreed with the judgment of Mason CJ and Deane J, observing for herself that the grant of power to a court to award costs should not be subject to a limitation not appearing in the grant of the power.
78 Justice Dawson agreed in the result that the appeal should be dismissed and said, after reviewing the authorities, at 202:
The cases therefore establish a long-asserted jurisdiction to award costs in appropriate cases against a person who is not a party to the proceedings where that person is the effective litigant standing behind an actual party or where there has been a contempt or abuse of the process of the court.
79 Justice Dawson referred to the particular Rule of Court under consideration and said that the discretion conferred upon the Court to award costs should not be confined. There was no reason to imply a limitation on the conferral of power to persons who are parties, and where an exceptional case arose it was appropriate to make an order against non-parties. He said that the Court had a jurisdiction to award costs against non-parties, but the jurisdiction should not be exercised except in an exceptional case.
80 Bischof v Adams [1992] 2 VR 198 was decided by Gobbo J in the Supreme Court of Victoria prior to the decision of the High Court in Knight v FP Special Assets Ltd. Justice Gobbo addressed a number of authorities and, in particular, three lines of authority in relation to orders for costs made against non-parties: where the owner of a vessel was not a party to a proceeding in which the charterer had made a claim against the sub-charterer; where a receiver appointed by a secured creditor commenced or continued proceedings in the name of an impecunious company; and where an impecunious plaintiff had been financially supported by a stranger to the proceedings.
81 The case before Gobbo J was not one of those three kinds, but he said that it would be misleading to think that a court did not have the power to order costs against a non-party except in those three circumstances. After discussing a decision of the Victorian Supreme Court in Burns Philp & Co. Ltd v Bhagat [1993] 1 VR 203, he said at 204-205:
The review of the authorities provides only limited guidance as to the approach to exercise of discretion in a case like the present which does not fit within prior categories or decisions. It can, however, be said in the light of the dicta in the Burns Philp Case that there is an obligation to find a connection between the non party and the proceedings. Given that there must at least be a connection between the non party and the proceedings, what form must this connection take?
It is not practicable to lay down a set of parameters in advance for there may be cases where the interests of justice support an order for costs even though the connection is slender. Thus if a witness deliberately refuses to answer to a subpoena and thereby causes the case to be adjourned and so increases costs to the parties, I would have thought that it was very much arguable that he should bear these extra costs. There would seem to be no connection in the ordinary sense of that word between that witness and the proceedings, beyond the fact that he was a potential witness. It may be said, however, that there is a causal connection between the non party and the incurring of the costs, a matter that bears directly on the justice of whether he should be made to pay costs that he has caused to be incurred.
Again, there may be cases where the connection is significant but not material to the issue of costs. Thus a person may benefit greatly from a particular proceeding but may not have any real part in supporting the proceeding.
The most convenient course is, in my view, to look at both factors in considering the connection between the proceedings and the non party, namely, the connection between the non party and the proceedings and secondly, the causal connection between the non party and the costs.
82 In Kebaro Pty Ltd v Saunders [2003] FCAFC 5 the Full Court said at [103], after referring to Bischof v Adams in support of a proposition that an order for security for costs against a non-party is extraordinary:
… the categories of case are not closed, although in order to warrant its exercise, a sufficiently close connection, or as Gobbo J expressed it, a "real and direct and ... material" connection with the principal litigation, must be demonstrated …
83 In FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340, Basten JA (with whom Beazley JA agreed) said at [210]:
[210] … What is significant from a survey of the cases in which orders have been made against non-parties is that they tend to satisfy at least some, if not a majority, of the following criteria:
(a) the unsuccessful party to the proceedings was the moving party and not the defendant;
(b) the source of funds for the litigation was the non-party or its principal;
(c) the conduct of the litigation was unreasonable or improper;
(d) the non-party, or its principal, had an interest (not necessarily financial) which was equal to or greater than that of the party or, if financial, was a substantial interest; and
(e) the unsuccessful party was insolvent or could otherwise be described as a person of straw.
84 This Court has jurisdiction to award costs against a non-party, at least in the circumstances identified by Mason CJ and Deane J in Knight v FP Special Assets Ltd. This Court has also awarded costs against a non-party where a non-party is a legal representative of a party to the proceedings as a result of the consequence of the non-party's legal representative's conduct in the proceeding: De Sousa v Minister for Immigration, Local Government and Ethnic Affairs (1993) 41 FCR 544. In that regard the Court relies upon its general power to award costs against a non-party and not upon the Court's jurisdiction to discipline its own officers: Knight v FP Special Assets Ltd at 188 per Mason CJ and Deane J; Aiden Shipping Co Ltd v Interbulk Ltd [1986] 1 AC 965 at 980 per Lord Goff of Chieveley. Costs have also been awarded against a non-party where a migration agent caused the Minister to incur costs as a result of the migration agent's conduct in circumstances where the applicant to the proceeding was a man of straw: Minister for Immigration & Multicultural Affairs v Shen (2002) 70 ALD 636; [2002] FCA 899.
85 Costs have been awarded against a director of an impecunious applicant company on the basis that the director was the "real party" to the litigation: Oz B and S Pty Ltd v Elders IXL Ltd (1993) 117 ALR 128; Re Talk Finance and Insurance Services Pty Ltd [1994] 1 Qd R 558; Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685; [1997] FCA 760.
86 The cases where orders for costs have been sought against non-parties mainly concern an unsuccessful party who is impecunious. However, that is not surprising given that usually a successful party will be content to obtain an order for costs against an unsuccessful party when the unsuccessful party can meet the order.
87 In light of the decisions mentioned it cannot be said that it is a precondition to the exercise of power to award costs against a non-party that the unsuccessful party is impecunious. Such a proposition would be contrary to the decisions in Minister for Immigration & Multicultural Affairs v Shen; Kebaro Pty Ltd v Saunders; Bischof v Adams; and FPM Constructions Pty Ltd v Council of the City of Blue Mountains. Such a proposition would also be contrary to the reasoning of the Court in exercising its power to award costs against a lawyer in relation to the lawyer's conduct in a proceeding where the exercise of the power is not conditioned upon the Court's disciplinary processes.
88 The Court has power to make an order for costs against a non-party where the non-party is connected with the unsuccessful party to the proceeding, and has caused that party to start, continue or prosecute the proceeding in circumstances where the non-party's conduct makes it just and equitable that the non-party be visited with an order for costs in favour of the successful party either in addition to such an order against the unsuccessful party or in substitution for such an order. As Gobbo J said in Bischof v Adams, a statement which the Full Court has approved, the categories of cases are not closed.
89 We think that the only precondition to the exercise of power would have to be that the non-party has a sufficient connection with the unsuccessful party and the litigation to warrant the Court exercising its jurisdiction. The connection between the non-party and the unsuccessful party and the litigation must be material to the question of costs: Vestris v Cashman (1998) 72 SASR 449 at 467 per Lander J. In that case Lander J attempted to identify some of the matters to which the Court might have regard in the exercise of the Court's discretion: at 468.
90 An order for costs against a non-party is only made in exceptional circumstances: Vestris v Cashman. The Registrar, who was the successful party, would be, as we have said, entitled to an order for costs against the Corporation. As the evidence shows, there is no doubt that the Corporation could satisfy any order that were made against it. But this application, as we have said, has been brought because the Registrar thinks it appropriate, for good reason, that the Corporation's assets be preserved for the benefit of all of the Dunghutti people, and therefore the Registrar seeks to visit the liability for costs on the directors.
91 An order for costs against a non-party where the unsuccessful party is in a position to meet an order for costs would only be made in exceptional circumstances.
92 The jurisdiction which is sought to be invoked, however, must be understood in the light of the reasons for an order for costs.
93 Although an order for costs is discretionary, a successful party generally can expect to be compensated for that party's costs: Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52; [2007] HCA 56 at [25] per Gleeson CJ, Gummow, Hayne and Crennan JJ. Costs usually follow the event: Ritter v Godfrey [1920] 2 KB 47. An order for costs is made because the successful party has been put to expense which that party would have avoided if the litigation or particular application had not been brought. The order for costs seeks to compensate the successful party for that result and for the costs to which that party has been put. The order is not in any sense meant to be a penalty; costs are awarded to indemnify a successful party in litigation, not to punish an unsuccessful party: Latoudis v Casey (1990) 170 CLR 534 at 542 per Mason CJ; Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [1] per Brennan CJ.
94 It may be assumed that even though the Registrar would be entitled to be compensated for the Registrar's costs, there is a residual discretion in the Court to order the directors to pay those costs in lieu of the Corporation if the directors have been guilty of such conduct as would warrant the order being made against them rather than the Corporation.
95 If an order of that kind were made it would not be punitive, but merely a recognition that it is just that the compensation which is to be made to the Registrar for the costs to which the Registrar has been put should be paid by someone other than the Corporation.
96 Because it is the Registrar and not the Corporation who is seeking the order, the order would only be made in the clearest of cases. The Registrar is seeking to have the Court rule upon rights and duties that exist between other parties. The Registrar is seeking to have the Court determine that the directors have breached their statutory duties to the Corporation.
97 This Court should resist the Registrar's invitation to determine rights between other parties because it is not entirely clear on the evidence before this Court that the directors were motivated to bring the proceeding, the appeal and the subsequent interlocutory applications because of their personal interests rather than the Corporation's interests. In respect of the appeal, they had legal advice from the Corporation's solicitors who said that the Corporation's senior and junior counsel were of the opinion that there were good grounds to mount an appeal.
98 Mr Williams SC, for the Registrar, contended that the directors should have insisted that the counsel and the solicitors provide written advice. They were not advised by anyone at that time that the directors should seek written advice. The directors are not professional people or people who are ordinarily placed in a position such as they occupy as directors of the Corporation. Their qualification for their position is being a member of the Corporation, which means that they are Aboriginal persons of Dunghutti descent who identify as Dunghutti persons and who are recognised as such by the directors: see [22]. The Registrar does not dispute that the directors received the advice contained in the minute. Rather, the Registrar claims that the directors should have obtained that advice in writing. However, there is no reason to think that if the directors had insisted upon the advice being given in writing the advice would not have been given. There is no reason to think that if the directors had made that request the directors would have rejected the advice when it had been reduced into writing.
99 It might be that the advice given to the directors was inappropriate. Mr Williams submitted that if the directors contended that the reason for bringing these proceedings was in reliance upon the professional advice which had been received and for no other reason, and that the professional advice was itself tainted, the directors could join the Corporation's lawyers on this application.
100 In our opinion that submission demonstrates why none of the orders for costs proposed by the Registrar should be made. This Court cannot be satisfied on the balance of probabilities that the directors acted in the way that they did in pursuit of their own interests in the absence of a full-scale inquiry into the bringing of the proceeding and the appeal, and the subsequent interlocutory applications. That would be inappropriate in circumstances where the unsuccessful party is in a position to meet the order for costs.
101 If the Corporation, which is now under special administration, is of the opinion that the directors have acted in breach of their duties both it and the Registrar could bring proceedings against the directors for the loss and damage which the Corporation has suffered, which would include not only reimbursement for any order for costs made against the Corporation, but also for the costs and expenses expended by the Corporation in the bringing of the proceeding, the maintenance of the appeal, and the further applications.
102 In our opinion the appropriate order in this case would have been to order the Corporation to pay the Registrar's costs and leave it to the Corporation and the Registrar to take whatever proceedings they considered appropriate consequential upon that order. However, no order of that kind is now sought by the Registrar. The only order sought by the Registrar which would impact adversely on the Corporation is the third order in the interlocutory application that "the first appellant pay the respondents' costs of the appeal but such costs are not to be paid from funds, or charged to assets, held on trust for the Dunghutti people".
103 We will not make that order because if it were made the Corporation simply could not meet the order because it has no recourse to funds or assets apart from those identified in the application, being the funds and assets of the Dunghutti people. The appropriate order, having regard to the Registrar's position, which is not to further deplete the assets of the Corporation, is to make no order for costs by dismissing the application.
104 It would be appropriate also, notwithstanding that the respondents have been unsuccessful on their application, that there be no order as to the costs of this application. The directors did not seek costs against the Registrar in the event that this Court did not accede to the Registrar's application.
I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Keane, Justices Lander and Foster.