Consideration
45 The background to all outstanding issues between the parties derives from and includes two determinations of native title made in favour of the Eastern Guruma people under the Native Title Act 1993 (Cth) (NTA) in 2007 and 2012.
46 By WAD 6208 of 1998, Nelson Hughes, P Stevens (deceased) (the father of the Stevens) and Eva Connors, as applicant on behalf of the Eastern Guruma people, sought a determination as to the existence of native title. A first determination was made on 1 March 2007, by consent of the parties, in respect of "Determination Area A". A second was made on 20 November 2012, again by consent, in respect of "Determination Area B". The relevant areas are located in the eastern Pilbara region of Western Australia, very generally in the vicinity of the mining town Tom Price. See Hughes (on behalf of the Eastern Guruma People) v State of Western Australia [2007] FCA 365; Hughes on behalf of the Eastern Guruma People (No 2) v State of Western Australia [2012] FCA 1267.
47 Each consent determination identified the "native title holders" as being:
(1) the descendants of Wirntawari who:
(a) identify and are identified by other members of the native title holding group as Muntulgura Guruma; and
(b) have a connection with the land and waters in Determination Area A and Determination Area B, in accordance with the traditional laws acknowledged and the traditional customs observed by the Muntulgara Guruma; and
(2) the descendants of Jack Smith to whom the Muntulgara Guruma accord the right to exercise rights and interests in Determination Area A and Determination Area B in accordance with the traditional laws acknowledged and traditional customs observed by the Muntulgara Guruma.
(These native title holders often go under the more generic description of the "Eastern Guruma".)
48 Each consent determination ordered, pursuant to s 56(2) of the NTA, that the Aboriginal Corporation should hold the native title in trust for the native title holders.
49 The Aboriginal Corporation had been formed under the CATSI Act prior to the 2007 determination especially for this purpose.
50 Division 6 of Pt 2 of the NTA deals with the native title functions of a prescribed body corporate (PBC) and the holding of native title in trust. By s 55, if the Federal Court proposes to make an approved determination of native title and the determination is that native title exists at the time of making the determination, the Court must then, or soon after, also make such determinations as are required by s 56, which deals with the holding of native title on trust, and s 57, which deals with the non-trust functions of a PBC.
51 By s 56, the persons proposed to be included as native title holders (which s 56(2)(a) describes as the "common law holders") must indicate whether the common law holders intend to have the native title held in trust by a PBC. If the common law holders fail to nominate a PBC for this purpose, the Court must determine that the rights and interests are to be held by the common law holders themselves. In other words, unless a PBC is nominated to hold the native title in trust for the native title holders/common law holders, the common law holders will personally hold the native title.
52 If the Court formally determines a corporation to be a PBC under s 56, that corporation will then be registered on the National Native Title Register and will become known as a registered native title body corporate, or RNTBC: see definition of "registered native title body corporate" in s 253 of the NTA. Once it becomes an RNTBC, it must include the words "registered native title body corporate" or the abbreviation "RNTBC" as part of its name, as required by s 85-1(4) of the CATSI Act.
53 If the Court does not make a determination that the native title is to be held in trust by a PBC, the Court, under s 57(2) of the NTA, must still determine which PBC is to carry out the functions of an RNTBC on behalf of the common law holders. That body then acts as an agent or representative of the native title holders for prescribed purposes under the NTA.
54 There are practical advantages in having native title held in trust and managed by a PBC. As Mantziaris C and Martin D, Native Title Corporations: a legal and anthropological analysis (Federation Press, 2000) (Mantziaris & Martin) say, at p 90, the corporate trustee and agency device allows non-native title interests dealing with the group to channel their transactions through a single legal person with perpetual succession. As the authors add:
This is intended to avoid the problem of fixing obligations on the ever-fluctuating membership of a group of natural persons lacking legal personality.
55 As the authors go on reasonably to observe, the legislative framework for native title management "has a simple appearance and a simple purpose, but it has created legal relationships of great complexity". The present proceeding perhaps tends to illustrate the profundity of that observation made 15 years ago.
56 Section 56(7) of the NTA enables regulations to be made in respect of a PBC's functions; consultations with, or other roles for, the common law holders; and other matters. Regulation 6 of the Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth) (PBC Regulations), provides the functions of a PBC acting as a trustee, which include managing the common law holders' native title rights and interests; consulting with the common law holders; and performing any other function relating to native title as directed by the common law holders.
57 Regulation 8 requires the relevant PBC to consult with and obtain the consent of the common law holders in relation to a range of decisions. If there is a particular process of decision-making that, under traditional laws and customs, must be followed in relation to the giving of consent, then the consent must be given in accordance with that process. Otherwise the consent must be in accordance with a process of decision-making agreed to or adopted by them. (This reflects s 203BC(2) of the NTA.)
58 The combined effect of these various provisions of the NTA concerning a PBC and the PBC Regulations is that, where an RNTBC comes into being, it will have a "rule book" which contains its rules or constitution, its native title objectives and statutory functions.
59 It has been recognised, however, that it may often be more appropriate for a PBC to set up separate legal bodies and structures to undertake other activities, especially commercial activities. If this is done, then it is suggested the PBC is able to focus on carrying out its native title functions and to insulate itself from the risk of financial loss and insolvency. See Australian Government, Office of the Registrar of Indigenous Corporations, A guide to writing good governance rules for prescribed bodies corporate and registered native title bodies corporate (Office of the Registrar of Indigenous Corporations, 2011) p 5 http://www.oric.gov.au/publications/rule-book/guide-writing-good-governance-rules-pbcs-and-rntbcs viewed 19 February 2016 (guide).
60 All this highlights the difference between a PBC acting as a trustee controlled by its members, and circumstances where the native title is in fact held by the determined native title holders who would decide matters directly. As stated in the Guide at p 5, by reference to Mantziaris & Martin, under the general law there are significant legal differences between the duties of a corporation acting as trustee, and a corporation acting as agent or representative. One possible difference is that a trustee has a duty to exercise its own independent judgement in making a decision about matters, whereas an agent may be obliged to follow the instructions of native title holders regardless of its own judgement in the matter.
61 It has also been recognised that the membership rules of a PBC may be fashioned in different ways. As Mantziaris & Martin, Ch 10, discuss, and the Guide from p 7 confirms, one important matter to be decided is whether membership should be open to all native title holders identified in the determination, or whether it should be limited to a smaller number of individuals who are appointed to represent all native title holders.
62 In this regard, the CATSI Act, by s 144-10, provides that directors cannot accept an application for membership unless that person is eligible to be a member. The PBC Regulations, by reg 4(2)(c), currently require all members of a PBC to be native title holders.
63 When it comes to cancellation of membership, s 150-20 of the CATSI Act provides that the directors of an ATSI corporation may cancel a member's membership if a member is not eligible for membership; has ceased to be eligible; or has not paid membership fees. Before doing so, the directors must give the member notice in writing and provide the member with 14 days to object to the cancellation in writing.
64 Pursuant to s 60-1, s 150-20 is a "replaceable rule". Section 60-5 provides that a replaceable rule can be modified or replaced by an ASTI corporation's constitution/rules.
65 Section 150-15(1) confirms that s 150-20 is a replaceable rule that provides a model for the cancellation of membership on the grounds of ineligibility for membership or failure to pay fees. Subsection (2) states that ss 150-25, 150-30 and 150-35 deal with cancellation of membership on the grounds that a member is uncontactable; not an ATSI person; or has misbehaved.
66 Section 150-35 specifically provides for cancellation of membership on the ground that the member has "misbehaved", and states that the provision applies despite s 150-20 or any provision in an ATSI corporation's constitution/rules. In other words, s 150-35 is a non-replaceable rule.
67 The manner and circumstances in which a member may have their membership cancelled on the ground that they have misbehaved is further governed by subs (3) of s 150-35, which provides:
The corporation may cancel the membership by special resolution in general meeting if the general meeting is satisfied that member has behaved in a manner that significantly interfered with the operation of a corporation or of corporation meetings.
(Emphasis added.)
68 While the rule expressed in s 150-35 may be non-replaceable, there may, under s 150-20, plainly be other rules providing grounds for cancellation additional to the ground that a person has misbehaved. That the rules may provide both additional grounds for cancellation and indeed different processes for cancellation of membership (subject to the non-replaceable terms of s 150-35 in the case of misbehaviour) is reflected in the Guide, which states at p 10:
You may want to have a different process for dealing with the cancellation of membership. For example, you may want to refer the matter to a meeting of native title holders or elders before any decision made by the directors or before the matter is referred to members at a general meeting. If necessary, you may want to use the corporation's dispute resolution process.
69 In that regard, s 66-1(3A) of the CATSI Act requires an ATSI corporation's constitution/rules to provide for the resolution of disputes internal to the operation of the corporation.
70 As to the "removal" of a member of the Aboriginal Corporation, cl 3.7 of the Rule Book provides as follows:
If a member:
• can't be contacted for two years
• misbehaves or his or her conduct is detrimental to the interests of the Corporation
• is not an Aboriginal or Torres Strait Islander person
• no longer observes or complies with Law and Customs
the member can only be removed by special resolution at a general meeting. The directors must then send that person a copy of the special resolution at their last known address, as soon as possible after it has been passed.
If a person is not eligible for membership for some other reason, the directors can cancel their membership by passing a resolution at a directors meeting. Before the meeting, directors need to give the member 14 days to object in writing. If the member objects, the directors can't cancel the membership. The member can only then be removed at a general meeting by resolution.
In deciding to commence cancelling a person's membership, the directors shall consider the matter in accordance with Law and Customs. The process to cancel membership of a member shall not be commenced unless at least 80% of the directors vote in favour of the decision.
71 By cl 4.6 of the Rule Book, members can propose a notice of a members' resolution and provide it to the Aboriginal Corporation. The notice must set out the resolution in writing and be signed by the members proposing it. The rule provides that for a corporation with 51 members or more, 10% of the members are required to propose the resolution. To this extent, cl 4.6 mirrors s 201-40(4) of the CATSI Act. In this case, the requisite number of members signed the resolution and the other requirements of cl 4 were met and are not in dispute.
72 Clause 4.6 also requires the Aboriginal Corporation to give notice of the proposed members' resolution to all people entitled to it, pursuant to cl 4.5, and for the Aboriginal Corporation to consider the proposed members' resolution at the next meeting which is being held at least 28 days after the notice has been sent. These rules mirror s 201-45(1) of the CATSI Act, which states that if a corporation has been given notice of a resolution under s 201-40, the resolution must be considered at the next general meeting that occurs more than 28 days after the notice is given. These requirements of the Rule Book were also met in this case.
73 Clause 3.7, save as to the misbehaviour ground, appears therefore to be a rule concerning cancellation of membership (or expulsion) that replaces the rules otherwise to be found in ss 150-20, 150-25 and 150-30 of the CATSI Act. While the second paragraph of cl 3.7 of the Rule Book refers to a person not being "eligible for membership for some other reason", the rules do not appear to specify any other reason why a person is not eligible for membership.
74 In those circumstances, in my view, the directors do not have any power to cancel membership under the Rule Book and do not initiate the expulsion process, save for giving notice to members of a special members' resolution when properly given to the Aboriginal Corporation: only the members by special resolution at a general meeting can cancel a member's membership, save for the application of s 150-35 of the CATSI Act, which is consonant with this process in any event. As it transpires, the expulsion of a member for misbehaviour under s 150-35 also requires a special resolution at a general meeting, so there is effectively only one means of expelling a member: by special resolution at a general meeting.
75 A question arises as to whether the grounds upon which a member may have their membership cancelled or be removed or expelled from the Aboriginal Corporation include the separate and distinct ground that their "conduct is detrimental to the interests of the Corporation", which appears to be a separate ground in the second bullet point of cl 3.7 of the Rule Book.
76 The Stevens contend that the second bullet point, which reads in full, "misbehaves or his or her conduct is detrimental to the interests of the Corporation", should effectively be read as one and the same ground for expulsion, being that which appears in s 150-35(3) of the CATSI Act. In my view, that submission should not be accepted. The ground expressed in that bullet point plainly is drafted in a disjunctive way so that a member might be expelled if he or she "misbehaves" or "his or her conduct is detrimental to the interests of the Corporation".
77 I accept the submissions made on behalf of the Aboriginal Corporation that the ground of conduct detrimental to the interests of an entity is not an unusual ground. It plainly is wider than mere misbehaviour, as defined in s 150-35. It is, it must be said, rather general in nature, in that the concept of conduct being "detrimental to the interests" of an ATSI corporation leaves much scope for complaint. Nonetheless, it is not so vague or incapable of application as to leap to the view that it is mere dross that purports to further explicate the word "misbehaves" in the first part of that bullet point.
78 In this case, therefore, the special resolution proposed by the requisite number of members that went forward to the AGM of 2 April 2015, did not allege that any of the Stevens had misbehaved in the way defined in the CATSI Act, but rather that they had engaged in conduct that was "detrimental to the interests of the Corporation".
79 As explained above, there is, in my view, no reason why such a ground for expulsion cannot be included in the constitution/rules of an ATSI corporation under the CATSI Act.
80 I should also confirm what has been stated above, that under cl 3.7 of the Rule Book, the process for expulsion is commenced by a special resolution proposed by the requisite number of members, as contended for by the Aboriginal Corporation. In that regard, the last paragraph of cl 3.7, which refers to the process to cancel membership of a member not being commenced unless at least 80% of the directors vote in favour of the decision, is not relevant to this process. It is only relevant to a process where there is power in the directors to cancel membership, as anticipated by the second paragraph of cl 3.7, even though, as stated above, there appear to be no other reasons which enable the directors to initiate that cancellation process.
81 Consequently, a member may have their membership cancelled on the ground that their "conduct is detrimental to the interests of the Corporation" and may only be removed by special resolution at a general meeting. In my view, however, for the process by which such a special resolution is passed to be effective, the member affected must be adequately advised of the basis upon which the general meeting will be invited to resolve that their conduct is "detrimental to the interests of the Corporation".
82 In that regard, I accept the Stevens' submission that the CATSI Act, by ss 166-1 and 166-5, empower the Court to grant relief for oppressive conduct and that a denial of procedural fairness in the course of cancelling membership might be considered an instance of statutory oppression.
83 In that regard, by s 166-10(b) of the CATSI Act, a former member is expressly empowered to bring an application seeking relief from oppressive conduct where the application relates to the circumstances in which the member ceased to be a member.
84 In my view, there were, as the Stevens submit, a number of procedurally unfair aspects of the process by which the cancellations in this case were brought about.
85 While the initial resolution of the Board of the Aboriginal Corporation to support any special resolution without hearing from the Stevens is not of particular significance, it is of significance that, following the circulation of the special resolution, the grounds in support of the motion were not revealed in any detail until the AGM. These grounds were numerous and contained many allegations, some dating from as early as 2006.
86 Any member who is the subject of a special resolution to expel them, or, in the language of the Rule Book, to cancel their membership, is entitled to know in advance of the meeting at which their expulsion is to be considered and voted upon, on what basis the special resolution is proposed.
87 Additionally, the notice of the grounds of the proposed resolution need to be given to an affected member sufficiently in advance of the meeting, having regard to the nature of the issues raised, to permit the member to respond to the issues, allegations and other matters to be considered.
88 In the circumstances of the special resolution passed 2 April 2015, there was plainly considerable ill feeling between the Stevens and a number of other members of the Aboriginal Corporation, including Mr Camille and Mr Smith, who were the subject of the Stevens' proceeding WAD 1 of 2015, commenced in January 2015, and the Stevens may reasonably have anticipated that the commencement of that proceeding would figure amongst the complaints to support the resolution that their conduct was "detrimental to the interests of the Corporation". A member should nonetheless not have to rely on guesswork in order to prepare to respond to or rebut any issues, allegations or matters to be the subject of consideration at a general meeting before a proposed special resolution is voted upon by members.
89 There are many circumstances in voluntary associations and a range of other organisations where courts have granted relief against the procedurally unfair expulsion of a member. For example, in John Richard Bryant v Hawkesbury Radio Communication Co-operative Society Limited [2014] NSWSC 848, a member of a community radio station was expelled at a special general meeting. The plaintiff was said to have been involved in "extensive and acrimonious disputes" with the Board. Under the community radio station's rules, a member could be expelled by a general meeting for "conduct detrimental to the Co-operative". A resolution to that effect concerning the plaintiff was placed on a notice of special general meeting. The plaintiff's solicitors complained that no particulars had been provided and requested a deferral of the resolution until such time as they had been. The day before the meeting, the plaintiff was provided with a letter that purported to particularise the matters to be acted upon in support of the resolution. He did not speak at the meeting; rather he sought to circulate a document that made various complaints, including as to the process. There was debate about whether or not he could record the meeting.
90 As to what procedural fairness required in the circumstances, the Court, at [48]-[56], said as follows:
48 On the third point, a reasonable opportunity to be heard involves the right to present arguments in one's defence. This necessarily involves having a fair opportunity to know and consider what is alleged: Hall v NSW Trotting Club [1977] 1 NSWLR 378.
49 In Kioa v West (1985) 159 CLR 550, at 584-585 Mason J said:
The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. ...
The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case? ...
In this respect the expression 'procedural fairness' more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, i.e, in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations.
[Emphasis in original.]
50 In examining procedural fairness, one must also bear in mind the comments of Gleeson CJ in Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1 where, in discussing the manner in which procedural fairness cases are approached by the courts, His Honour observed at [37] that:
Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.
51 It has been said that natural justice makes two demands before a person's legal rights are adversely affected or their 'legitimate expectations dashed'. First, an opportunity to show why adverse action should not be taken which must involve a sufficient opportunity to say everything that can be said in the person's favour; and secondly that the matter will be determined by a decision maker whose mind is open to persuasion or free from bias.
52 If there has been a denial of natural justice this will amount to an error of law that deprives a tribunal or the decision maker of jurisdiction and renders the decision void.
53 It is immaterial to pose the question whether observance of natural justice would have produced a different result. It is not the function of the court when such application is made to try the merits of the decision. In a case such as this where a person may be expelled from the co-operative it is plain, notwithstanding the consensual rules of such a body, that the principles of natural justice will clearly apply.
54 Of course in the case of a body such as a co-operative procedures have to be honed and/or followed so that for example where the expulsion is or is not going to be the subject of debate at a special general meeting it is essential that there be a level playing field between all participants. That is, the accuser needs to articulate the conduct that it says warrants expulsion but it is plain that the accused must ordinarily be given a full and adequate opportunity to defend his or her position.
55 It goes without saying that the person accused must know before the hearing and in sufficient detail the issues to be canvassed. That person must be told precisely when and where the hearing will take place and importantly have sufficient time to make enquiries and consider their position and prepare a response.
56 Proper notice has to be given 'not at the steps of the hearing room but in such time as would enable the person to reasonably and effectually prepare any case which he would seek to make': Re Mullen [1995] 2 Qd R 608 at 614. In any case involving some form of disciplinary action there must effectively be a charge alleging some act or omission defined in the Rules as misconduct and with which the nominated entity is authorised to deal. It is certainly not necessary for the notice to recite the Rules verbatim provided it is plain enough what rule is relied upon and a copy of it is reasonably accessible especially to the person accused: Byrne v Auckland Irish Society Inc [1979] 1 NZLR 351 at 358.
91 In that case, the Court held that the plaintiff had not been afforded procedural fairness and was entitled to the declaratory relief that he sought.
92 In my view, the principles and observations set out in that decision are generally relevant in this proceeding. While some of the authorities relied on dealt with the question of procedural fairness in a particular statutory or public law context, the substance of those principles, in my view, is relevant to a consideration of whether a member has been subject to oppressive conduct in the course of being expelled from the Aboriginal Corporation.
93 I accept the submissions made on behalf of the Stevens that:
(1) They sought but were denied advanced notice of the grounds for their proposed expulsion.
(2) They were therefore unable to marshal evidence or otherwise prepare to squarely meet the accusations levelled against them.
(3) They were not afforded any real or substantive opportunity to present arguments in their own defence, let alone an opportunity to say everything that could be said in their favour.
(4) They were deprived of a right of both cultural and personal significance.
94 I do not consider, however, that there was any denial of procedural fairness simply because they were not permitted to make an audio or audio visual recording of the proceedings.
95 Nor do I consider that, in all of the circumstances, the walkout of each of the Stevens at the AGM is relevant to the question of procedural fairness. It is no doubt true that, if the Stevens had stayed to hear what was being said, they would have learnt more about the issues, allegations and other matters raised against them, and they could have possibly addressed the meeting about some of these things. But to state this is merely to highlight the inadequacy of the process leading up to the AGM: the Stevens were learning precisely what was being put against them at the AGM just before a vote was to be taken, and if they had stayed and sought to respond to those issues, allegations and matters, they would not necessarily have had an adequate opportunity to respond to or refute them.
96 This is the whole point of procedural fairness, namely, that a person whose interests may be adversely affected by a decision has a reasonable opportunity to deal with the allegations made against them. As observed in the dicta cited above, procedural fairness is essentially a practical issue. What procedural fairness requires in any case depends on the circumstances of the case, the nature of the allegations made and what would appear, in all the circumstances, to be reasonably required to enable a person to deal with them. In some circumstances, there would not be any procedural unfairness if issues were raised for the first time at a meeting at which a special resolution was considered, so long as the meeting were then to be adjourned or in fact adjourned to accord the affected member the opportunity to return at a later date, at an appropriate time, to respond to the issues raised. But there was never any suggestion that was to occur in this case. The vote plainly was expected to be taken at the AGM, and was then taken. In this case, the Stevens were, in substance, expected to defend themselves in relation to the matters raised at the AGM, while they were at the AGM.
97 As noted above, while the Stevens no doubt could have anticipated that a range of issues might be raised against them as a result of their commencement of WAD 1 of 2015 and because of their own awareness of controversy over other matters, such as the Satellite Springs dispute, guesswork on behalf of an affected person is no substitute for a proper statement, by those propounding a special resolution, as to what actuates the motion.
98 In the result, I consider the Stevens were denied procedural fairness with the consequence that each of their memberships were cancelled by the special resolution of the AGM that was, in the circumstances, oppressive to each of them.
99 It is not necessary to rule on the proposition put on behalf of the Stevens that the conduct alleged against them at the AGM, even if proved, did not answer the statutory description of misbehaviour, for the reason that I do not consider that the special resolution was proposed on the misbehaviour ground.