FEDERAL COURT OF AUSTRALIA Aboriginal & Torres Strait Islander Commission v Dainggati Aboriginal Corp [2000] FCA 148 ABORIGINAL AND TORRES STRAIT ISLANDER COMMISSION v DAINGGATI ABORIGINAL CORPORATION NG 3019 of 1998 HILL J 15 FEBRUARY 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 3019 OF 1998 BETWEEN: ABORIGINAL AND TORRES STRAIT ISLANDER COMMISSION APPLICANT AND: DAINGGATI ABORIGINAL CORPORATION RESPONDENT JUDGE: HILL J DATE OF ORDER: 15 FEBRUARY 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 3019 OF 1998 BETWEEN: ABORIGINAL AND TORRES STRAIT ISLANDER COMMISSION APPLICANT AND: DAINGGATI ABORIGINAL CORPORATION RESPONDENT JUDGE: HILL J DATE: 15 FEBRUARY 2000 PLACE: SYDNEY EX TEMPORE REASONS FOR JUDGMENT 1 Before the Court is an application made by Mr Neil Geoffrey Singleton that Mr Peter William Brooks be removed as Administrator of Dainggati Aboriginal Corporation (in liquidation) an association or body or corporation established under the Aboriginal Councils and Associations Act 1976 ("the Act"). Although notice of the application has been given to Mr Brooks he has not been served with a copy of the motion or supporting affidavits. 2 It appears that the appointment of Mr Brooks as Liquidator of the corporation occurred in March 1998. Around July 1999 an agreement was entered into between Mr Brooks and Mr Singleton pursuant to which Mr Singleton as the owner of the business "Sims Lockwood" would assume Mr Brooks' practice and, as and from 1 August 1999, operate from premises in Grafton. Mr Brooks was to be consultant to that practice. 3 It was part of that agreement that existing administrations should be transferred to Mr Singleton and/or Mr Sims subject to satisfactory completion of due diligence by Sims Lockwood. In due course the Australian Securities Investment Commission was advised of the agreement and had no objection to the proposal that current insolvency appointments be transferred to Mr Brooks. The Registrar of Aboriginal Corporations likewise had no objection. 4 Notwithstanding this agreement Mr Brooks refused to sign relevant documentation to permit the transfer of insolvency administrations, including administrations of the Aboriginal Corporations, to proceed. In particular he did not resign as manager. Mr Simms completed the due diligence. He notes that no dividend has been paid to creditors of the corporation. He says there is an amount of some $200,000 held in the bank account of the corporation in the name of the administration. Apparently no investigation into the affairs of the corporation has been completed, no report issued to creditors in respect of the investigation or conduct of litigation, has been prepared; no adjudication of claims of creditors made nor any dividend declared. Mr Simms says that these are all matters that should by now have been attended to. 5 Mr Singleton has contacted creditors of the corporation to ascertain their attitude. He has received from a number of these creditors correspondence to the effect that the creditors have no objection to his being appointed in place of Mr Brooks. Indeed, the form in which the letters have been sent indicates the creditors expressing their preference to the transfer of liquidation from Mr Brooks to Mr Singleton. No creditor has indicated opposition. Some letters from creditors indicate their disquiet over the period of time that has elapsed since the administration commenced without any distribution being made or the administration brought to an end. 6 Notice of the current motion has been advertised in the newspapers. As I have already indicated Mr Brooks has been made aware of it. In a letter dated 11 February 2000 annexed to an affidavit of Ms McLean, a solicitor, Mr Brooks says that he is offended by what he refers to the subject matter of the solicitor's letter notifying him that an application had been made to this Court. He says that he opposes the matter strongly: "As this is only one of a number of matters Mr Neil Singleton has not keep within his understanding give to me." (sic) 7 I do not think that it is the role of the Court to remove a liquidator or administrator because one person has agreed with another that this should take place. That is a private matter between the parties. The appointment of an administrator or liquidator is a matter for the Court exercising its supervision over the relevant liquidation or administration as the case may be. 8 I should say that the provisions of s 473 of the Corporations Law are by reference incorporated into the law governing the administration of corporations established under the Act (see s 67 of the Act). No doubt it would be an appropriate exercise of the Court's power to remove a liquidator as referred to in s 473 of the Corporations Law where the evidence is such that the liquidator has not properly exercised his powers or functions. 9 The evidence before me on this matter certainly indicates delay and dissatisfaction on the part of the creditors. It can be inferred from the evidence that the administration of the corporation is presently stultified and no attempts are being made by Mr Brooks to deal with proofs of debts of creditors or finalise the liquidation or administration. In these circumstances it seems on the evidence before me that it is an appropriate exercise of the Court's power under s 473 of the Corporations Law as so incorporated by reference to remove Mr Brooks as a liquidator in accordance with the application and appoint Mr Singleton in his stead. 10 However, I am conscious of the fact that the material that has been put before me has not been served upon Mr Brooks and that it would be a denial of natural justice to him that he be removed without at least having had the opportunity to answer the material. This is particularly so because he has indicated that he opposes the matter. In these circumstances I propose as I have already indicated to make orders 1 to 3 in the application but to stay the operation of those orders for a period of 14 days from today to enable Mr Brooks to apply to the Court if he is so advised and thereby enable him to oppose the Court's orders. 11 I accordingly make orders 1 to 3, stay the operation of those three orders until 4.00 pm on 29 February 2000. I direct the applicant, Mr Singleton, to notify Mr Brooks of the orders I have made on or before 4.00 pm on Tuesday, 22 February and serve him with copies of the motion, supporting affidavits and the orders made this morning. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill. Associate: Dated: 15 February 2000 Counsel for the Applicant: Mr Marshall Solicitor for the Applicant: Jones King Date of Hearing: 15 February 2000 Date of Judgment: 15 February 2000