FEDERAL COURT OF AUSTRALIA Registrar of Aboriginal Corporations v Gundabooka Aboriginal Corporation [2002] FCA 1008 CORPORATIONS – Corporation under Aboriginal Councils and Associations Act 1976 (Cth) – application for winding up – inability to pay debts – just and equitable – public interest Aboriginal Councils and Associations Act 1976 (Cth) ss 62A, 63 Re Lubin, Rosen and Associates Ltd [1975] 1 WLR 122 cited Australian Securities Commission v A S Nominees Limited (1995) 13 ACLC 1596 cited Re Walter L Jacob & Co Ltd (1988) 5 BCC 244 cited Re Weedmans Ltd (1974) Qd R 377 cited Registrar of Aboriginal Corporations v Koomaal Aboriginal Corporation [2001] FCA 1303 cited REGISTRAR OF ABORIGINAL CORPORATIONS v GUNDABOOKA CORPORATION N 721 OF 2002 TAMBERLIN J SYDNEY 14 AUGUST 2002 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 721 OF 2002 BETWEEN: THE REGISTRAR OF ABORIGINAL CORPORATIONS APPLICANT AND: GUNDABOOKA ABORIGINAL CORPORATION RESPONDENT JUDGE: TAMBERLIN J DATE OF ORDER: 14 AUGUST 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Gundabooka Aboriginal Corporation be wound up by this Court under ss 62A, 63(2)(d) and 63(2)(h) of the Aboriginal Councils and Associations Act 1976 (Cth). 2. John Lord, of PKF Chartered Accountants, Level 20, 1 York Street, Sydney, an official liquidator be appointed as liquidator. 3. The applicant's costs be paid out of the assets of the respondent. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 721 OF 2002 BETWEEN: THE REGISTRAR OF ABORIGINAL CORPORATIONS APPLICANT AND: GUNDABOOKA ABORIGINAL CORPORATION RESPONDENT JUDGE: TAMBERLIN J DATE: 14 AUGUST 2002 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application to wind up the Gundabooka Aboriginal Corporation, ("the Corporation") which is an incorporated Aboriginal Association governed by the Aboriginal Councils and Associations Act 1976 (Cth) ("the Act"). The application is made pursuant to ss 62A and 63 of the Act which enables the Registrar to petition the Court, where the Corporation is unable to pay its debts or where it is just and equitable or in the public interest, to wind up the Corporation. 2 When the matter first came on before me on 25 July 2002 there was no appearance for the Corporation. I was not satisfied at that time that the documents had been duly served in accordance with the requirements of s 80 of the Act and the proceedings were adjourned accordingly to enable compliance with the provisions relating to service. 3 When the matter came before me again on 8 August 2002 there was no appearance for the Corporation and detailed evidence was tendered in relation to service. I am satisfied that service has been duly effected on the Corporation at the official address. 4 Counsel for the plaintiff read extensive affidavit evidence concerning the conduct of the affairs of the Corporation since its incorporation on 12 November 1992. There is detailed and uncontradicted evidence of repeated and continuing failures by the Corporation to comply with the Act in relation to record keeping and there was also considerable evidence of financial maladministration. In particular a report by Mr Pippet, a Chartered Accountant, of 9 May 2002, made in accordance with s 60 of the Act pursuant to a request from the Registrar, concludes that the Corporation is insolvent and has committed many breaches of the Act. The details of the breaches are specified in the report. Mention is also made of the fact that funding by the Aboriginal and Torres Strait Islanders Commission ("ATSIC") has been discontinued for some months and the Corporation appears to have no other significant income. Mr Pippet concludes that the only alternatives are either that there should be an administrator appointed or that the Corporation should be wound up pursuant to the Act. 5 In a detailed affidavit of 5 July 2002, which attaches numerous supporting documents, the Acting Registrar (who, under s 6(3) of the Act, has the same powers as the Registrar) sets out the history of bad management, qualified audit reports and debts to both the Australian Taxation Office ("the ATO") and other creditors, which are in excess of $580,000. In addition, he concludes that the Corporation is insolvent and that it would be in the public interest and in the interest of members under s 62A of the Act that he should petition the Court for the Corporation to be wound up. In the report of Mr Pippet of 9 May 2002, the debt to the ATO is considered to be in the order of $500,000 and on this basis the total net assets of the Corporation before other matters are taken into account was calculated to be in the order of $79,000. There is evidence of a statutory demand by the ATO dated 10 July 2002, claiming a total debt of $613,468.28. The evidence strongly supports the conclusion that the Corporation is unable to pay its debts and there is no evidence to the contrary before the Court. 6 The relevant principles to take into account are referred in a number of authorities. In particular, it is important that the Court gives special weight to the decision of a statutory officer, such as the Registrar, who is charged with the duty of acting in the public interest: see Re Lubin, Rosen and Associates Ltd [1975] 1 WLR 122 at 128. As to the principles to be exercised in relation to the Corporation's insolvency and the considerations relating to the just and equitable ground, see Australian Securities Commission v A S Nominees Limited (1995) 13 ACLC 1596, Re Walter L Jacob & Co Ltd (1988) 5 BCC 244 and Re Weedmans Ltd (1974) Qd R 377. The principles were also referred to in Registrar of Aboriginal Corporations v Koomaal Aboriginal Corporation [2001] FCA 1303. 7 In this case, having regard to the extensive evidence which has been placed before me, I have concluded that the Corporation is insolvent and unable to pay its debts. I am also satisfied that is in the public interest and that it is just and equitable that the Gundabooka Aboriginal Corporation be wound up by the Court under the Act. I order that John Lord of PKF Chartered Accountants, Level 20, 1 York Street, Sydney, an official liquidator, be appointed as liquidator and that the applicant's costs be paid out of the assets of the respondent. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. Associate: Dated: 14 August 2002 Counsel for the Applicant: J Smith Solicitor for the Applicant: Australian Government Solicitor No Appearance for the Respondent: Date of Hearing: 8 August 2002 Date of Judgment: 14 August 2002