FEDERAL COURT OF AUSTRALIA Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCAFC 50 Citation: Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCAFC 50 Appeal from: Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCA 370 Parties: DUNGHUTTI ELDERS COUNCIL (ABORIGINAL CORPORATION) RNTBC, CAROLINE BRADSHAW, MARY-LOU BUCK, CEDRIC BUTTON, EILEEN BUTTON, MARY ELLEN BUTTON, MARGARET RUTH CAMPBELL-MARUCA, CYRIL DAVID, MAVIS DAVIS, CECELIA FLANDERS, GARY MORRIS, KEVIN STEWART and MURIEL MAY VALE v REGISTRAR OF ABORIGINAL AND TORRES STRAIT ISLANDER CORPORATIONS and PETER ARMSTRONG File number: NSD 500 of 2011 Judges: KEANE CJ, LANDER AND FOSTER JJ Date of judgment: 5 April 2012 Catchwords: COSTS – power to order costs be paid by a non-party – whether appropriate to order costs be paid by directors of unsuccessful party Legislation: Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth), s 6-25, s 265-1, s 265-5, s 265-10, s 265-15, s 265-25, s 268-1, s 268-20, s 386-10, s 386-15, s 386-20, s 653-1, s 658-1, s 658-5 Federal Court of Australia Act 1976 (Cth), s 37N, s 37P, s 43, s 43(3), s 43(1A) Judiciary Act 1903 (Cth), s 39B(1) Federal Court Rules 1979 (Cth), O 62 Cases cited: Aiden Shipping Co. Ltd v Interbulk Ltd [1986] 1 AC 965 cited Bischof v Adams [1992] 2 VR 198 considered Burns Philp & Co. Ltd v Bhagat [1993] 1 VR 203 cited Caboolture Park Shopping Centre Pty Ltd (in liq) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 cited De Sousa v Minister for Immigration, Local Government and Ethnic Affairs (1993) 41 FCR 544 cited FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340 considered Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 cited Kebaro Pty Ltd v Saunders [2003] FCAFC 5 considered Knight v FP Special Assets Ltd (1992) 174 CLR 178 considered Latoudis v Casey (1990) 170 CLR 534 cited Minister for Immigration & Multicultural Affairs v Shen (2002) 70 ALD 636 considered Oshlack v Richmond River Council (1998) 193 CLR 72 cited Oz B and S Pty Ltd v Elders IXL Ltd (1993) 117 ALR 128 cited Re Sanchez; Ex parte Smits (1994) 49 FCR 326 cited Re Talk Finance and Insurance Services Pty Ltd [1994] 1 Qd R 558 cited Ridehalgh v Horsefield [1994] Ch 205 cited Ritter v Godfrey [1920] 2 KB 47 cited Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683 cited Vestris v Cashman (1998) 72 SASR 449 cited White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 cited Yates Property Corporation Pty Ltd v Boland (No. 2) (1997) 147 ALR 685 cited Date of hearing: 29 February 2012 Date of last submissions: 6 March 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 104 Counsel for the Second to Thirteenth Appellants: Mr A Tokley with Mr P Coady Solicitor for the Second to Thirteenth Appellants: Allens Arthur Robinson Counsel for the First Appellant: The First Appellant was excused from appearing Counsel for the Respondents: Mr N Williams SC with Dr J Renwick Solicitor for the Respondents: Australian Government Solicitor IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 500 of 2011 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: DUNGHUTTI ELDERS COUNCIL (ABORIGINAL CORPORATION) RNTBC First Appellant CAROLINE BRADSHAW Second Appellant MARY-LOU BUCK Third Appellant CEDRIC BUTTON Fourth Appellant EILEEN BUTTON Fifth Appellant MARY ELLEN BUTTON Sixth Appellant MARGARET RUTH CAMPBELL-MARUCA Seventh Appellant CYRIL DAVID Eighth Appellant MAVIS DAVIS Ninth Appellant CECELIA FLANDERS Tenth Appellant GARY MORRIS Eleventh Appellant KEVIN STEWART Twelfth Appellant MURIEL MAY VALE Thirteenth Appellant AND: REGISTRAR OF ABORIGINAL AND TORRES STRAIT ISLANDER CORPORATIONS First Respondent PETER ARMSTRONG Second Respondent JUDGES: KEANE CJ, LANDER AND FOSTER JJ DATE OF ORDER: 5 APRIL 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The respondents have leave to amend their Interlocutory Application filed on 3 August 2011 in accordance with the Further Amended Interlocutory Application made available to the Full Court on 29 February 2012 (the Further Amended Interlocutory Application). 2. The Further Amended Interlocutory Application be dismissed. 3. There be no order as to the costs of: (a) The appeal determined by the Full Court on 21 July 2011; (b) The reopening application determined by the Full Court on 25 August 2011; (c) The application determined by Foster J on 31 August 2011 for a stay of the Full Court's orders dismissing the appeal or, in the alternative, for an interlocutory injunction up to and including the determination of the first appellant's application for special leave to appeal to the High Court of Australia, or until the grant of a stay by the High Court; and (d) The Further Amended Interlocutory Application (including the appellants' costs of and incidental to the joinder of the second to thirteenth appellants). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 500 of 2011 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: DUNGHUTTI ELDERS COUNCIL (ABORIGINAL CORPORATION) RNTBC First Appellant CAROLINE BRADSHAW Second Appellant MARY-LOU BUCK Third Appellant CEDRIC BUTTON Fourth Appellant EILEEN BUTTON Fifth Appellant MARY ELLEN BUTTON Sixth Appellant MARGARET RUTH CAMPBELL-MARUCA Seventh Appellant CYRIL DAVID Eighth Appellant MAVIS DAVIS Ninth Appellant CECELIA FLANDERS Tenth Appellant GARY MORRIS Eleventh Appellant KEVIN STEWART Twelfth Appellant MURIEL MAY VALE Thirteenth Appellant AND: REGISTRAR OF ABORIGINAL AND TORRES STRAIT ISLANDER CORPORATIONS First Respondent PETER ARMSTRONG Second Respondent JUDGES: KEANE CJ, LANDER AND FOSTER JJ DATE: 5 APRIL 2012 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT: Facts 1 This is an application by the Registrar of the Aboriginal and Torres Strait Islander Corporations (the Registrar) for an order for costs. 2 The Registrar was a respondent to an appeal brought by Dunghutti Elders Council (Aboriginal Corporation) RNTBC (the Corporation) from an order of a judge of this Court dismissing the Corporation's proceeding in which the Corporation sought a declaration that a notice given by the Registrar under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the CATSI Act) was invalid, and an order restraining the Registrar from making a determination that the appellant be put under special administration under the CATSI Act. 3 The primary judge dismissed the application and ordered the Corporation to pay the Registrar's costs. Before the hearing of the appeal the Australian Government Solicitor, acting on behalf of the Registrar, wrote to Eddy Neumann, the solicitor acting for the Corporation, saying: This is to confirm that our clients consider the appeal to be void of any merit, and are concerned that a significant proportion of the monies held on trust for the benefit of all the Dunghutti People will be spent on financing this litigation. In all the circumstances, as foreshadowed on 20 April 2011, in the event that the appeal is unsuccessful, our clients may seek an order that the directors of the appellant Corporation personally pay the respondents' costs of the proceedings. 4 The appeal came on for hearing on 8 June 2011, and on 21 July 2011 the Court made the following orders: 1. The appeal be dismissed. 2. Order 1 above be stayed for 21 days. 3. Order 2 made by Bennett J in proceeding NSD 181 of 2011 continue for 21 days. 4. Within seven days of the date of publication of these Reasons for Judgment the respondents are to notify the solicitors for the appellant of the precise orders as to costs which the respondents intend to seek and the identity of those persons and/or entities against whom those orders are to be sought. 5. If, pursuant to order 4 above, costs are sought against persons and/or entities who are not presently parties to the appeal, the respondents are to file and serve within fourteen (14) days of the date of publication of these Reasons for Judgment a Notice of Motion by which they seek to join to this appeal such persons and entities against whom they propose to seek an order for costs and in which the precise orders sought, together with all the affidavits in support of the relief sought, are included. 6. In the event that a Notice of Motion contemplated by order 5 above is filed and served within the time limited by that order, the Registrar of the New South Wales District Registry of the Court is to list the said Notice of Motion for directions before a member of the Full Court no later than nineteen (19) days after the publication of these Reasons for Judgment. 7. Each party have liberty to apply in respect of Orders 2-6 above on such notice as a member of the Full Court might direct. 5 Paragraph 5 of those orders reflected the submission made by the Registrar during the hearing of the appeal, which was consistent with the letter written by the Registrar's solicitor to the Corporation's solicitor, that in the event that the appeal were to be dismissed the Registrar would seek costs against the Corporation's directors. 6 On 28 July 2011 Andras Markus, Deputy General Counsel with the Australian Government Solicitor, wrote to Mr Neumann in the following terms: 1. We refer to the above appeal and to the orders made by the Full Court of the Federal Court of Australia on 21 July 2011. 2. Pursuant to paragraph 4 of those orders, we advise that the orders as to costs that our clients intend to seek in relation to this appeal are as follows: a. The respondents' costs of the appeal be paid by the second to thirteenth appellants (i.e. the directors of the present appellant, once joined to the appeal) personally, including the costs of the Notice of Motion seeking their joinder to the appeal. b. That the first appellant corporation not indemnify the second to thirteenth appellants for any liability arising, or any amount paid by them, pursuant to order a. above. c. Alternatively, the first appellant pay the respondents' costs of the appeal but such costs are not to be paid from funds, or charged to asserts, held on trust for the Dunghutti people. 3. We further advise that the orders proposed at paragraph 2.a and b above would be sought against the following persons: — Caroline Bradshaw — Mary-Lou Buck — Cedric Button — Eileen Button — Mary Ellen Button — Margaret Ruth Campbell-Maruca — Cyril Davis — Mavis Davis — Cecilia Flanders — Gary Morris — Kevin Stewart — Muriel May Vale. 7 On 3 August 2011 the Registrar filed an interlocutory application seeking the following orders: 1. Caroline Bradshaw, Mary-Lou Buck, Cedric Button, Eileen Button, Mary Ellen Button, Margaret Ruth Campbell-Maruca, Cyril Davis, Mavis Davis, Cecilia Flanders, Gary Morris, Kevin Stewart and Muriel May Vale, the directors of the Appellant Corporation, be each joined to the appeal as second to thirteenth appellants, respectively. 2. The respondents' costs of the appeal be paid by the second to thirteenth appellants personally, including the costs of the Interlocutory Application seeking their joinder to the appeal. 3. The first appellant corporation not indemnify the second to thirteenth appellants for any liability arising, or any amount paid by them, pursuant to order 2. above. 4. Alternatively, 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. 8 The interlocutory application was accompanied by two affidavits: that of Jonathan Rogers, to which was exhibited a report which was an analysis of the Corporation's payments from trust monies; and that of Mr Markus to which was exhibited a number of documents, some of which will be referred to in the reasons that follow. 9 On 4 August 2011, Foster J made orders joining the Corporation's directors to the appeal as second to thirteenth appellants. The application is not pursued against the eleventh appellant who was apparently not a director of the Corporation at the relevant time. 10 In the meantime, on 2 August 2011, the Corporation had applied to the Full Court for an order that "… the hearing of the appeal and/or the judgment of the Court be re-opened or vacated to enable the Court to deal with one of the [Corporation's] grounds of appeal." 11 That application was dismissed by the Full Court on 25 August 2011, and the question of the costs of that application was reserved until the Registrar's application made on 3 August 2011 was considered. 12 In its orders on 21 July 2011 the Full Court had stayed its order dismissing the appeal and continuing interlocutory orders which had been put in place by Bennett J to regulate on an interim basis future expenditure to be undertaken by the Corporation. When the Full Court made its orders the Registrar undertook to the Court not to make the determination which was the subject matter of the application to the Full Court prior to 10 August 2011. The Registrar continued that undertaking until 31 August 2011, because in the meantime, on 17 August 2011, the Corporation had filed an application seeking an order extending the stay made by the Full Court on 21 July 2011 until: (a) The determination of the [Corporation's] application for special leave to appeal to the High Court of Australia; or, alternatively, (b) The making of any order by the High Court of Australia having the effect of staying the order for dismissal made by the Full Court on 21 July 2011, whichever is earlier. 13 On 31 August 2011, Foster J dismissed the Corporation's application for a continuation of the stay and ordered that the question of costs of that application be reserved to the Full Court to be determined by the Full Court, together with all other questions of costs in the appeal and in respect of the other applications made on or after 21 July 2011. 14 Subsequently, the Corporation made an application in the High Court for an order to continue the stay order made by the Full Court pending an application for special leave. That application was refused by Kiefel J on 2 September 2011. 15 Some time after 2 September 2011 the Registrar appointed Tim Gumbleton and Andrew Bowcher as special administrators to the Corporation. The Corporation remains under their administration pursuant to the CATSI Act. 16 The Registrar now seeks the following orders: 1. The respondents' costs of the appeal, including all reserved costs and the costs of the Interlocutory Application and Amended Interlocutory Application, be paid by the second to tenth and twelfth to thirteenth appellants personally. 2. The first appellant corporation not indemnify the second to tenth and twelfth to thirteenth appellants for any liability arising, or any amount paid by them, pursuant to order 1. above. 3. Alternatively, 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. 17 The costs which are sought are the costs of the appeal on which, of course, the Registrar was successful; the costs of the Registrar's interlocutory application to join the directors to the appeal; the costs of the Corporation's application to the Full Court for the Full Court to re-open its decision; and the costs of the Corporation's interlocutory application for an extension of the stay order made on 21 July 2011. 18 The Registrar was given leave to file and serve the Corporation with a notice to produce documents, and on 19 August the Registrar served a notice seeking the following documents: 1.1 any record relating to the decision to appeal the orders of Flick J made on 14 April 2011 in proceeding NSD181 of 2011, including but not limited to minutes or other records of any meeting held by the directors of the first appellant (or any of them) or members of the first appellant. 19 On 11 October 2011, the Corporation, which was by then under special administration, responded through its new solicitors, DibbsBarker, enclosing a copy of a minute of a meeting of the directors of the Corporation held on 20 April 2011. DibbsBarker said that that was the only document in the Corporation's possession that matched the description of the documents contained in the notice to produce. That statement that no other document matched the description in the notice has not been challenged by the Registrar or the directors. 20 The document which was produced was a minute of the Dunghutti Elders Council Meeting, which included the following passage: 1. Motion: Appeal against decision by Justice Flick: Chair advised the meeting that advice had now been received from Council's lawyer Eddy Neumann that in the view of the legal team namely John McCarthy QC, Jeff Kildea and himself there were good grounds to lodge an appeal against the decision of Justice Flick in the Federal Court. If DECAC authorised the lodging of the appeal, the appeal would be lodged today and the court would be asked to continue the orders previously made and take no further steps under the notice to show cause. DECAC would not be able to spend more than $7,500 per week except in relation to the expenditure which had previously been approved by the Court. Eddy Neumann had also advised that DECAC would need to continue the undertaking to the Court to pay damages in the event appeal was not successful and damages resulted as a result of any actions in the meantime by DECAC. That Eddy Neumann Lawyers be instructed to lodge an appeal against decision of Justice Flick in the Federal Court and to that end that Eddy Neumann Lawyers is authorised to continue and give on behalf of the DECAC the undertaking in relation to damages required by the Court in order to stay the orders made by Justice Flick until the appeal was finalised. Furthermore that Eddy Neumann Lawyers is instructed to instruct John McCarthy QC and Jeff Kildea in relation to the appeal. Furthermore it was noted that the legal team had advised that they will not seek payment of professional costs in relation to the appeal unless authorised by the Court. Carried: Unanimously. The Corporation 21 The Corporation is registered as an Aboriginal and Torres Strait Islander Corporation under the name Dunghutti Elders Council (Aboriginal Corporation) RNTBC under the CATSI Act. Its constitution is contained in a "Rule Book". 22 The Rule Book states that to be eligible to apply for membership of the Corporation a person must be at least 18 years of age, and be an Aboriginal person of Dunghutti descent who identifies himself or herself as a Dunghutti person and who is accepted by the directors as being a Dunghutti person: rule 5.2.2. 23 The Rule Book provides that the directors have the responsibility of deciding whether an applicant for membership of the Corporation qualifies for membership by being eligible for membership: rule 5.2.4. 24 The members of the Corporation have the rights and obligations set out in the CATSI Act and the Rule Book, but do not have a right to share in the profits of the Corporation, or to take part in its distribution if the Corporation is wound up: rule 5.4.1. In the event of a winding up, the surplus assets of the Corporation will pass in accordance with a special resolution relating to the distribution of the surplus assets of the Corporation by the members: rule 17.1. The distribution of those assets must not be made to any member or to any person to be held on trust for any member: rule 17.2. 25 Rule 19.1 provides: 19.1 Resolutions affecting native title rights and interests (a) Where the corporation holds: (i) native title to land as trustee for the native title holders; or (ii) compensation moneys paid in relation to native title resolutions which might affect the native title rights and interests or which involve the expenditure of any of the compensation money can only be made by the members in general meeting. (b) Notice of a general meeting at which such resolutions are to be considered must state that native title rights and interests or the compensation fund, as the case may be, may be affected by the resolution. 26 The Rule Book provides for the appointment of directors, it being a rule that the Corporation shall have no less than three directors and no more than 12: rule 8.1. Only a member of the Corporation residing in Australia may be appointed as a director of the Corporation: rule 8.2(a). An employee of the Corporation may be a director of the Corporation but, because of the provisions of sub-rule 8.2(a), that person must also be a member of the Corporation. Sub-rule 8.2(d) provides: (d) An employee of the corporation may be a director of the corporation provided that: (i) a majority of the directors of the corporation must not be employees of the corporation; and (ii) an employee performing a chief executive officer function in relation to the corporation may not chair the directors' meetings. 27 Because a director must be a member, the employees to which sub-rule 8.2(d) is there referring are both members and directors of the Corporation. Sub-rule 8.2(d)(i) provides that a majority of the directors must not be employees of the Corporation. 28 A director holds office until the second Annual General Meeting following the director's appointment, and is eligible for re-appointment: rule 8.4. 29 The Corporation's business is managed by or under the direction of the directors: sub-rule 8.6.1(a). The directors may delegate any of their powers to a committee of directors, a director, an employee or some other person: rule 8.6.3. 30 The directors must appoint their own Chairperson, a Convenor and a Treasurer, who form the Executive of the Corporation: sub-rule 9.1(a). The Convenor is the Secretary of the Corporation: sub-rule 9.3.1(a). The Treasurer is responsible to the directors for the Corporation's financial records: rule 9.4. 31 Rule 10.1 identifies the directors' general duties which are to comply with the CATSI Act, the Rule Book, and the general law. 32 Sub-rule 10.1(e) excuses a director from liability for debts and other obligations incurred by the Corporation as a trustee merely because of the director doing, or refraining from doing, a particular act if the director's acts were in good faith and were done with the belief that doing or refraining from doing the acts was necessary to ensure that the Corporation complied with native title legislation obligations: sub-rule 10.1(e). 33 Rule 10.3 requires a director who has a material personal interest in a matter to be absent whilst the particular matter is being considered at a meeting of directors, and further prohibits that director from voting on the matter unless the director complies with sub-rules 10.3(a), (b), (c) or (d). 34 Rule 10.5 deals with remuneration: (a) The directors are not to be paid remuneration. (b) Rule 10.5(a) does not prevent: (i) a director who is a secretary, contact person or employee of the corporation from receiving remuneration in respect of such capacity; or (ii) reasonable payments (having regard to the market costs of obtaining similar goods or services) to the director for a contract for goods or services, provided that rule 10.2 has been complied with. (c) The corporation may pay the directors' travelling and other expenses that the directors incur: (i) in attending directors' meetings or any meetings of committees of directors; (ii) in attending any general meetings of the corporation; or (iii) in connection with the corporation's business. 35 Although directors are not paid remuneration, they may be so paid if they are an employee of the Corporation or they are the secretary or a contact person. Rule 8.2(d) prevents a majority of the directors from being employees at the one time. 36 Rule 10.5 allows the Corporation to pay the directors' travelling and other expenses that the directors incur in the circumstances mentioned in that rule. The Registrar 37 The Registrar is appointed under the CATSI Act: s 653-1. The Registrar's functions are defined in s 658-1, and those functions include the Registrar providing advice to persons about the registration of particular Aboriginal and Torres Strait Islander corporations and the rules governing the internal management of the corporations and the operation of the corporations. The Registrar also has the function of conducting public education on the operation of the CATSI Act, and on the governance of Aboriginal and Torres Strait Islander corporations. The Registrar also assists with the resolution of disputes internal to the operation of an Aboriginal and Torres Strait Islander corporation or between Aboriginal and Torres Strait Islander corporations and others. The Registrar's functions include assisting with complaints under the CATSI Act about the internal operation of an Aboriginal and Torres Strait Islander corporation or involving Aboriginal and Torres Strait Islander corporations. 38 The Registrar's aims in performing those functions are identified in s 658-5 as being: (a) to facilitate and improve the effectiveness, efficiency, sustainability and accountability of Aboriginal and Torres Strait Islander corporations; and (b) to provide certainty: (i) for the members, officers and employees of an Aboriginal and Torres Strait Islander corporation in their dealings with the corporation and with each other; and (ii) for persons outside Aboriginal and Torres Strait Islander corporations in their dealings with those corporations; and (c) to have regard to Aboriginal and Torres Strait Islander tradition and circumstances; and (d) to administer the laws of the Commonwealth that confer functions and powers on the Registrar effectively and with a minimum of procedural requirements; and (e) to ensure that information is available as soon as practicable for access by the public. The CATSI Act 39 The CATSI Act provides a system for the registration of Aboriginal and Torres Strait Islander corporations. The CATSI Act deals with the basic features of an Aboriginal and Torres Strait Islander corporation. It addresses the rules for membership of an Aboriginal and Torres Strait Islander corporation. The CATSI Act deals with officers of an Aboriginal and Torres Strait Islander corporation, and with the duties of officers and their disqualification for breaches of those duties: see s 6-25 and Chapter 6. 40 Chapter 8 of the CATSI Act deals with the civil consequences of an officer breaching a duty imposed by the CATSI Act. The criminal consequences of a breach are dealt with in Chapter 6. 41 Division 265 sets out the general duties of directors and officers of an Aboriginal and Torres Strait Islander corporation. A director must comply with the following general duties: (1) the director must exercise his or her powers and discharge his or her duties with the degree of care and diligence expected of a person who is a director of an Aboriginal and Torres Strait Islander corporation (s 265-1); (2) the director must exercise his or her powers and discharge his or her duties in good faith in the best interests of the corporation and for a proper purpose (s 265-5); (3) the director must not improperly use his or her position to gain an advantage for himself or herself or someone else or cause detriment to the corporation (s 265-10); (4) the director who obtains information because he or she is or has been a director of an Aboriginal and Torres Strait Islander corporation must not improperly use the information to gain an advantage for himself or herself or someone else or cause detriment to the corporation (s 265-15); (5) a director or other officer of an Aboriginal and Torres Strait Islander corporation commits an offence if he or she is reckless or is intentionally dishonest and fails to exercise his or her powers and discharge his or her duties in good faith in the best interests of the corporation or for a proper purpose (s 265-25). 42 Division 268 deals with the duties in relation to disclosure of, and voting on matters involving, material personal interests. A director of an Aboriginal and Torres Strait Islander corporation who has a material personal interest in a matter that relates to the affairs of the corporation must give the other directors notice of the interest: s 268-1. A director of an Aboriginal and Torres Strait Islander corporation who has a material personal interest in a matter that is being considered at a directors' meeting must not be present while the matter is being considered or vote on the matter: s 268-20. 43 A court has power to order the person to pay the Commonwealth a pecuniary penalty of up to $200,000 in the event that a person has contravened those sub-sections which deal with officers' duties: s 386-10. The penalty is a civil debt payable to the Commonwealth. 44 Chapter 8 deals with the civil consequences of contravening civil penalty provisions. A court may order a person to compensate an Aboriginal and Torres Strait Islander corporation for damage suffered by the corporation if the person has contravened a civil penalty provision in relation to the corporation and the damage resulted from the contravention: s 386-15. 45 The Registrar is entitled to apply for a declaration of a contravention, a pecuniary penalty order, or a compensation order: s 386-20. 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. Associate: Dated: 5 April 2012