Jameson v Guri Wa Ngundagar Aboriginal Corporation - [2001] FCA 1104 - FCA 2001 case summary — Zoe

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Jameson v Guri Wa Ngundagar Aboriginal Corporation

[2001] FCA 1104

Federal Court of Australia|2001-08-13|Before: Stone J

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Source facts

Court

Federal Court of Australia

Decision date

2001-08-13

Before

Stone J

Source

Original judgment source is linked above.

Judgment (47 paragraphs)

[1]

REASONS FOR JUDGMENT 1 This dispute in this proceeding concerns the control of the Guri Wa Ngundagar Aboriginal Corporation ("Corporation") which is incorporated under the Aboriginal Councils and Associations Act 1976 (Cth) ("Act"). The second respondents, also being the cross-claimants, challenge the appointment of an administrator to the Corporation by the Acting Registrar of Aboriginal Corporations, Mr Colin Plowman ("Acting Registrar"). The issues in this proceeding concern the powers of the Registrar of Aboriginal Corporations ("Registrar"). It may therefore be useful if I briefly outline some of the relevant obligations and powers vested in the Registrar by the Act.

[2]

Legislative background 2 The Act provides for the incorporation of Aboriginal associations where it can be shown to the satisfaction of the Registrar that the requirements of the Act for incorporation have been met. The Act provides, inter alia, that the Registrar must refuse to issue a certificate of incorporation to an Aboriginal association if satisfied that its rules are unreasonable or inequitable or do not give the members effective control over the running of the association; s 45(3). The rules of an incorporated Aboriginal association, as in force from time to time, have the effect of a contract between the association and the public officer, each member and each member of the governing committee of the association as well as between the members themselves; s 47(2). 3 Although an incorporated Aboriginal association is run by its governing committee, the Act gives the Registrar a limited supervisory role in its affairs. Within three weeks after an association's incorporation, the governing committee must appoint a public officer whose duties include keeping a register of members of the association. The governing committee must keep proper accounts and records of the transactions and affairs of the association and must prepare an annual report; s 59(1) and (2). The annual report is to be examined by a person authorised by the Registrar; s 59(3). The purpose of the examination is to determine whether the governing committee and the association have complied with the Act and with the association's rules. A copy of the annual report and the examiner's report must be filed with the Registrar no later than 31 December each year. 4 The Registrar may at any time require the documents of an incorporated Aboriginal association to be examined and the examiner to report to the Registrar drawing attention to any irregularity in the operations or financial affairs of the association; s 60. The Registrar may also investigate the affairs of the association if there are reasonable grounds to suspect that the Act or the rules of the association have not been followed or that there has been an irregularity in the association's financial affairs; s 68. The investigative powers of the Registrar (contained in ss 68-70) are quite extensive and penalties may be imposed on persons who hinder the exercise of those powers. 5 The Registrar may appoint an administrator to an incorporated aboriginal association (s 71) or petition the Court for its winding up (s 63). The provisions relevant to the appointment of an administrator are set out below. "Appointment of Administrator 71. (1) If the Registrar considers that there may be grounds for appointing an Administrator, the Registrar may serve on the public officer of the corporation a notice in writing calling upon the corporation to show cause, within a reasonable period specified in the notice, why an Administrator should not be appointed. (2) After that period, and having considered any representations made by the corporation, the Registrar may appoint an Administrator if satisfied that any of the following grounds have been established: (a) in the case of an Incorporated Aboriginal Association - the association has been trading at a loss for at least 6 months during the preceding period of 12 months; (b) the Council or the Governing Committee, as the case may be, has failed to comply with a provision of this Act, the regulations or the Rules, and has failed to provide a satisfactory explanation; (c) in the case of an Incorporated Aboriginal Association- the members of the Governing Committee have acted in the affairs of the Association in their own interests rather than in the interests of the members of the Association or otherwise in a way that appears to be unfair or unjust to members of the Association; (d) in the case of an Incorporated Aboriginal Association - the appointment of an Administrator is required in the interests of members and creditors of the Association; (e) … (f) the appointment of an Administrator is otherwise required in the public interest.

[6]

appointment of administrator 8 The facts summarised under this heading are drawn mainly from the affidavit of Mr Garry Fisk, who is the Director, Regulation, in the Office of the Registrar of Aboriginal Corporations, sworn on 14 June 2001. Mr Fisk's evidence was not challenged. 9 On 23 February 2001, the Registrar, being the second cross-respondent in this proceeding, was given a handwritten report prepared by Mr Mastrolembo, Executive Director, Client Services in the Office of the Registrar, recommending that a "section 60 examination" take place urgently. That report refers to "claims and counterclaims" of fraud and misappropriation of funds, disputes within the Corporation, alleged breaches of the Act and the Corporation's rules as well as alleged harassment, intimidation and unfair dismissal of staff. 10 On 27 February 2001, Mr Mastrolembo received a letter from the Aboriginal and Torres Strait Islander Commission ("ATSIC") advising that it was appointing a grant controller to the Corporation. In relation to this appointment, Mr Fisk stated in his affidavit that a grant controller, usually an accountant, is appointed where ATSIC has concerns about the ability of a corporation to manage funds granted by ATSIC. 11 Mr Eddie Pippet, a chartered accountant, was appointed under s 60 to conduct an examination of the books and records of the Corporation. The nature of a s 60 examination is outlined in [4] above. The Corporation and the Committee were informed of this appointment by letter dated 9 March 2000. Mr Pippet provided the Acting Registrar with an interim report on 22 March 2001 and a final report on 27 March 2001. In his note accompanying the interim report Mr Pippet made the following comment: "As discussed this morning, this case is so clear cut and so urgently in need of action, I am taking the unusual step of sending this preliminary report so that matters can be put into action your end as soon as possible." 12 On 27 March 2001, a senior investigator in the Office of the Registrar sent a memorandum to the Acting Registrar summarising Mr Pippet's report and recommending that, as a matter or urgency, a notice be served on the Corporation in accordance with s 71(1) of the Act. The provisions of s 71(1) are set out in [5] above. The recommendation in the memorandum was approved under the hand of the Acting Registrar and a handwritten note on the memorandum, presumably written by the Acting Registrar, states "…my only question is if it can be done quicker". 13 On 29 March 2001, the Acting Registrar signed a notice pursuant to s 71(1) of the Act, addressed to the public officer of the Corporation ("show cause notice"). The show cause notice stated that, before noon on 9 April 2001, the Corporation was required to show cause why an administrator should not be appointed. There was some dispute as to when the Corporation received the show cause notice; see [22]-[28] below. 14 The show cause notice listed grounds that would justify the appointment of an administrator if the Registrar were satisfied that they were established. These grounds were that the Committee had failed to comply with provisions of the Act, the regulations or the Corporation's Rules and that the appointment of an Administrator was required in the interests of the Corporation, its members, its creditors and the public. The show cause notice alleged certain irregularities in relation to the appointment of the public officer, the maintenance of the register of members, the keeping of the Corporation's accounts and records and the election of Committee members. It also referred to issues of concern identified in the s 60 examination as follows: · "There is considerable doubt as to whether the annual general meeting held in September 2000 was validly held and the Committee validly appointed because notice was forwarded to members, but several days before the meeting telephone calls were made to members during which it was stated that the meeting would not proceed. On the morning of the day scheduled for the meeting further telephone calls were made informing members that the meeting was in fact to be held at 11.00am on that date.

[34]

25 Because Ms Mosely admits that she received the letter on the morning of 2 April 2001, service of the show cause notice was effected, at the latest, by that time. The show cause notice specified that the Corporation was required to respond by noon on 9 April 2001. In the absence of any earlier effective form of service, the period specified in the show cause notice was from 2 to 9 April 2001, a period of seven days. 26 Section 28A does not purport to prescribe exclusive methods of service. In ASC v Bank Leumi Le-Israel (1996) 69 FCR 531, the Full Federal Court accepted that a notice under s 717 of the Corporations Law could be served by facsimile transmission. Lehane J, with whom Foster and Lockhart JJ agreed, accepted (at 550), "…that there is nothing in the nature of facsimile transmission which excludes it as a means of giving or serving a document. … I agree, however, with the view of the primary judge that time limits and obligations consequent on the giving of a notice are enlivened, when it is given by fax, only upon actual receipt of the notice in full and in legible form." 27 In Biotech International Ltd v Peptech Ltd (2000) 34 ASCR 443 at [39], Owen J noted that this position was consistent with the views of Young J in Howship Holdings Pty Ltd v Lesley (No 2) (1996) 41 NSWLR 542, that the document must come to the notice of the person for whom it was intended. His Honour went on to make the point that, "There would be little point in insisting on the fax being "full and legible" if, regardless of whether anyone actually saw it or tried to read it, mere arrival at the receiving facsimile machine completed the act of service." 28 Here the uncontradicted evidence of Ms Mosely was that the facsimile was not brought to her notice until 3 April 2001, a day after service by post was effected. Consequently the concept of service by facsimile cannot enlarge the seven day period referred to above. It is this period of seven days that is required by s 71(1) to be "a reasonable period".

[35]

Was a period of seven days so unreasonable as to constitute an error of law? 29 By providing for the Registrar to specify the "reasonable period" within which the Corporation was to respond to the show cause notice, s 71(1) gives the Registrar the discretion to determine what period is reasonable in the circumstances. The circumstances in which the Acting Registrar made the decision are outlined in [9]-[15] above. The reports of dispute and mismanagement within the Corporation and the issues of concern identified by Mr Pippet (set out in the show cause notice) show that the Acting Registrar had grounds for genuine concern about the future of the Corporation. Mr Plowman knew that that ATSIC had been sufficiently concerned to appoint a grant controller. There were allegations of physical violence, abuse and harassment, fraudulent use of the Corporation's property and resources, theft and corruption. In particular he had been told that the CDEP work activities had "virtually come to a halt", that the clothing business was "in danger of collapse because of the dysfunction of the Corporation" and the affairs of the Corporation were in "significant disarray". 30 Counsel for the cross-claimants referred to the extensive nature of the particulars given by the Acting Registrar in the show cause notice. He relied on the evidence of Ms Mosely in submitting that the task of responding to those allegations involved organising and understanding the Corporation's records over a period of some months. While accepting that it may have been a difficult task to respond to the show cause notice within the allotted time, it should be noted that, in fact, a five-page letter from Mr Quinlan dated 10 April 2001 did address the concerns raised in the show cause notice. This letter was considered by the Registrar (and, indirectly, by the Minister) by 18 April 2001, the day before the appointment of Mr Jameson. 31 It is doubtful that the Corporation's difficulties to which Ms Mosely deposes are relevant to the exercise of the Acting Registrar's discretion to determine a reasonable period given that he could not be aware of these at the relevant time. Brennan J discussed this issue in Kioa v West (1985) 159 CLR 550. Although his Honour was speaking of the requirements of natural justice, his comments are relevant to the determination of a reasonable period under s 71(1) of the Act. His Honour commented at 627: "What the principles of natural justice require in particular circumstances depends on the circumstances known to the repository at the time of the exercise of the power or the further circumstances which, had he acted reasonably and fairly, he would then have known. The repository of a power has to adopt a reasonable and fair procedure before he exercises the power and his observance of the principles of natural justice must not be measured against facts which he did not know and which he would not have known at the relevant time though he acted reasonably and fairly." 32 Although seven days is a very short time, given the whole of the circumstances known to the Acting Registrar, I am of the opinion that it was a reasonable period. Even if I am wrong on that point, I find that that it was reasonably open to the Acting Registrar to allow seven days for a response. It was certainly not so unreasonable that no reasonable decision-maker could have set such a period.

[36]

The time allowed for response 33 Section 5(1)(a) of the ADJR Act provides that a breach of the rules of natural justice in the making of a decision is a ground of review. The allegations contained in the cross-claim in this regard are set out in [17] above. In part, the first of the two allegations of a breach of natural justice covers the same ground as has already been dealt with in relation to whether the "reasonable period" requirement of s 71(1) has been satisfied. There is no question of the respondents having been denied a right to be heard. Their complaint is that the period allowed to them for this purpose was not sufficient to meet the requirements of natural justice. In response to this claim, it was submitted for the Registrar and for Mr Jameson that s 71(1) constitutes a code. It was said that this follows from, among other things, the fact that the section evinces an intention to exclude procedural natural justice by specifically providing that the Registrar must allow a reasonable time for a corporation to respond. Whether or not this is so, it is difficult to see how a period that is reasonable within s 71(1) could at the same time be so short as to constitute a failure to provide natural justice. 34 It is well established that the urgency of a decision may limit the period in which a person may have a right to be heard; Durayappah v Fernando [1967] 2 AC 337 at 346; Marine Hull & Liability Insurance Co Ltd v Hurford (1985) 10 FCR 234 at 241. In Re Refugee Tribunal; ex Parte Aala (above), Gaudron and Gummow JJ commented at [60]: "… it is trite that, where the obligation to afford procedural fairness exists, its precise or practical content is controlled by any relevant statutory provisions and, within the relevant legislative framework, this will vary according to the circumstances of the particular case." 35 The circumstances of this case (summarised in [29] above) show that there was considerable urgency surrounding the making of the decision whether to appoint an administrator. Those circumstances support a conclusion that there was no denial of natural justice in the period allowed for comment by the Committee.

Jameson v Guri Wa Ngundagar Aboriginal Corporation

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Judgment (47 paragraphs)

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