Armstrong delegate of the Registrar of the Aboriginal Corporations v The Arrernte Council of Central Australia Aboriginal Corporation [2009] FCA 1079

FEDERAL COURT OF AUSTRALIA

Armstrong delegate of the Registrar of the Aboriginal Corporations v The Arrernte Council of Central Australia Aboriginal Corporation [2009] FCA 1079 Corporations Act 2001 (Cth) s 482 PETER ARMSTRONG DELEGATE OF THE REGISTRAR OF ABORIGINAL CORPORATIONS v THE ARRERNTE COUNCIL OF CENTRAL AUSTRALIA ABORIGINAL CORPORATION

QUD 217 of 2004

LOGAN J

18 SEPTEMBER 2009

BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION QUD 217 of 2004

BETWEEN: PETER ARMSTRONG DELEGATE OF THE REGISTRAR OF ABORIGINAL CORPORATIONS

Applicant

AND: THE ARRERNTE COUNCIL OF CENTRAL AUSTRALIA ABORIGINAL CORPORATION

Respondent

JUDGE: LOGAN J

DATE OF ORDER: 18 SEPTEMBER 2009

WHERE MADE: BRISBANE

THE COURT ORDERS THAT:

1. The winding up of the Arrernte Council of Central Australia Aboriginal Corporation be terminated as from the date of the making of this order. 2. The costs of and incidental to this application including reserved costs form part of the costs, charges and expenses of the winding up. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION QUD 217 of 2004

BETWEEN: PETER ARMSTRONG DELEGATE OF THE REGISTRAR OF ABORIGINAL CORPORATIONS

Applicant

AND: THE ARRERNTE COUNCIL OF CENTRAL AUSTRALIA ABORIGINAL CORPORATION

Respondent

JUDGE: LOGAN J

DATE: 18 SEPTEMBER 2009

PLACE: BRISBANE

REASONS FOR JUDGMENT 1 Mr Ian Richard Hall and Mr Gregory Winfield Hall are the liquidators of the respondent company, the Arrernte Council of Central Australia Aboriginal Corporation in liquidation (the Aboriginal Corporation). They were so appointed by an order made by this Court on 24 November 2004. The following month, on 10 December, by another order of the Court, they were granted leave to appoint themselves administrators of that Aboriginal Corporation. The following year, on 7 July 2005, they became the administrators of a deed of company arrangement to which the Aboriginal Corporation is presently subject. The liquidators have applied, pursuant to s 482 of the Corporations Act 2001 (Cth) (Corporations Act), for an order that the winding up be terminated. 2 There is legislation which has a particular and peculiar application to Aboriginal Corporation. It is precisely summarised in the outline of submissions, helpfully provided on behalf of the liquidators. It is unnecessary to detail that legislation. It suffices to note that its impact is that s 482 of the Corporations Act has application to the Aboriginal Corporation. 3 The Aboriginal Corporation's reason for existence lay in a desire for various activities to be conducted for the benefit of Aboriginal Australians in Alice Springs. One of those activities was the provision of employment services. The evidence before me discloses that some 225 people relied upon the Aboriginal Corporation for those services at the time when the applicants were appointed liquidators. The evidence also establishes that the Aboriginal Corporation was, at the time, the registered proprietor of two properties. Since the coming into effect of the deed of company arrangement, the Aboriginal Corporation has continued to provide services for the benefit of Aboriginal Australians in Alice Springs. The evidence further establishes that preferential creditors have been paid out in full. Further, unsecured creditors have been paid a dividend of 23 cents in the dollar. There were two major creditors who did not seek to participate in that distribution. Strictly speaking, one ought to classify them as but one creditor with two emanations, in the sense that the creditor concerned is the Commonwealth of Australia, and the emanations are its Department of Employment and Workplace Relations, and the Commissioner of Taxation respectively. The Commonwealth then, on the evidence, as a matter of deliberate policy, did not seek to participate in any distribution. 4 The Corporation presently has some 369 members, each of whom are members of the Arrernte People from the area in and around Alice Springs. The evidence establishes that the Corporation is now solvent. It has a net worth of about $1,046,730. In the liquidator's opinion, the objectives of the deed of company arrangement have been fully carried out. They wish to terminate the deed by executing a particular certificate for which provision is made in the deed. They will do so in the event that the Court orders that the winding up be terminated. 5 This particular course is one supported by the Aboriginal Corporation. A Mr Doyle, who was appointed chief executive officer of the Aboriginal Corporation in January 2009, has given evidence that should the winding up be terminated, the Indigenous Land Corporation will transfer to the Aboriginal Corporation, the land from which the Corporation presently trades. That is valued at somewhere between $1.2 and $1.5 million. This apart, the Aboriginal Corporation also has an opportunity, attested to in evidence, to obtain funding from the Aboriginal Benefit Account which is maintained by the Commonwealth's Department of Families, Housing, Community Services and Indigenous Affairs, to the extent of $2 million. 6 This funding, it is anticipated, would be provided for the purpose of purchasing land and the construction thereon of about 260 one and two bedroom apartments in Alice Springs. The envisaged development is known by the name, The New Beginning Residential Village. It is anticipated that this particular housing development would provide housing for approximately 1000 Aboriginal Australians. The evidence before me establishes further that The New Beginning Residential Village development would not be possible while the Aboriginal Corporation remains in liquidation. 7 I note that the liquidators have prudently given notice of the application to current known creditors of the Aboriginal Corporation. No objections to the orders proposed by the liquidators have been received. While that particular course is not one mandated by s 482 of the Corporations Act, it was, as I have observed, prudent. 8 Section 482 of the Corporations Act confers a discretion upon the court as to whether or not to terminate a liquidation. The authorities are such in relation to s 482 that it is not only the interests of creditors that fall for consideration but also the wider public interest. 9 Having regard to each of these considerations, upon my noticing that the deed of company arrangement had been executed by an officer of the Department of Employment and Workplace Relations purportedly on behalf of the Commonwealth of Australia, I raised with counsel for the liquidators when the matter came before me first last week the question of that gentleman's authority to bind the Commonwealth generally. I did that because, though the debt owed to the Commonwealth via the Department of Employment and Workplace Relations was overwhelmingly larger than that owed to the Commonwealth via the Commissioner of Taxation, the latter official was, nonetheless, an officer of the Commonwealth separately charged with the administration of debts arising under our country's revenue laws. It was therefore a matter of some interest to me as to the basis upon which an officer of a separate department could, in any way, bind the Commonwealth in relation to its revenue debts. The disparity between the debts was a disparity as between some $5 million owed to the Commonwealth via the Department of Employment and Workplace Relations and a little in excess of $400,000 owed to the Commonwealth and payable to the Commissioner. 10 The evidence read before me today establishes that the Commissioner is content with the orders proposed. There is also reason to believe that the attendance of an officer of the Department of Employment and Workplace Relations at the creditors meeting where the deed of company arrangement was approved was an attendance made with the authority not just of officers of that department but also of the Australian Taxation Office. In other words, the inference necessarily arises that in executing the deed as a consequence of that meeting the particular officer of the Commonwealth did indeed have authority to compromise all of the debts owed to the Commonwealth by the execution of the deed, not merely those owed to the Commonwealth arising out of matters under the administration of the Department of Employment and Workplace Relations. 11 There were at the time, as has been attested to me, questions of policy which are the province uniquely of the Executive Government which grounded the acquiescence by the Commonwealth to the particular terms of the deed of company arrangement. There are also questions of policy which ground the proposal which would see the termination of this winding up and the utilisation of this particular Aboriginal Corporation for the undertaking of the housing development which I have detailed. The funds concerned which will support that particular development's undertaking are public moneys. It is obvious to me that considered value judgments have been made by responsible officers of the Executive Government that it is in the public interest that this corporation be the vehicle for the undertaking and, further, that the housing undertaking concerned is one that is necessary in the public interest.