Federal Court of Australia Graham v Newchurch [2023] FCA 1411 File number: WAD 282 of 2023 Judgment of: COLVIN J Date of judgment: 14 November 2023 Date of publication of reasons: 15 November 2023 Catchwords: CORPORATIONS - application for interlocutory injunction to restrain first to fourth respondents from taking various actions in relation to the fifth respondent - where applicant seeks leave to bring the action on behalf of the fifth respondent - where corporation is a registered Native Title Body Corporate under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) - where corporation currently has no chief executive officer or independent director - where ability for corporation to make decisions regarding its operations is uncertain - where annual general meeting has been scheduled - leave for applicant to bring action granted - orders in relation to bank account made - orders made establishing a caretaker group to finalise arrangements for AGM - liberty to apply for further orders Legislation: Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) Cases cited: Frigger v Trenfield [2019] FCA 1746 Division: General Division Registry: Western Australia National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 13 Date of hearing: 14 November 2023 Counsel for the Plaintiff: Mr BH Taylor with Mr JW Daly Solicitor for the Plaintiff: Mills Oakley Lawyers Counsel for the Defendants: Mr D Chandler Solicitor for the Defendants: Yimba Pty Ltd ORDERS WAD 282 of 2023 BETWEEN: HAROLD GRAHAM Plaintiff AND: VERNA MARIE NEWCHURCH First Defendant GAILE MARGARET MALLARD Second Defendant STEPHEN REGINALD RULE Third Defendant SHAHAD (SHAZ) RIND Fourth Defendant NGADJU NATIVE TITLE ABORIGINAL CORPORATION RNTBC (ICN 8297) Fifth Defendant order made by: COLVIN J DATE OF ORDER: 14 NOVEMBER 2023 THE COURT ORDERS THAT: 1. The applicant be given leave to amend its interlocutory process dated 8 November 2023 in the form annexed at 'Schedule A' to the applicant's minute of proposed orders dated 14 November 2023. 2. The Applicant be given leave to rely on the second affidavit of Harold Graham sworn 13 November 2023 and the third affidavit of Harold Graham sworn 14 November 2023 in support of its application. 3. The requirement for personal service of the originating process and interlocutory process dated 8 November 2023 filed in this action be dispensed with. 4. Service of: (a) the originating process; (b) the interlocutory process dated 8 November 2023; (c) the affidavit of Harold Graham dated 7 November 2023; (d) the affidavit of Pamela Kaye dated 7 November 2023; (e) the affidavit of Justin Walter Daly dated 8 November 2023; (f) the Applicant's genuine steps statement; and (g) the second affidavit of Harold Graham dated 13 November 2023, filed in these proceedings, by email to the email addresses: (i) verna.newchurch@nntac.org.au; (ii) gaile.mallard@nntac.org.au; (iii) Stephen.rule@nntac.org.au; and (iv) sr@arragroup.com.au, be good and sufficient service of those documents on the first to fifth respondents. 5. The time for service of each of the documents referred to in order 4 is abridged. 6. Subject to any further order, pursuant to section 169.5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth), the Applicant be given leave on behalf of the Fifth Respondent to bring these proceedings to the extent only of advancing the interlocutory claims the subject of the interlocutory application dated 8 November 2023. 7. Subject to these orders and any further order, until 5.00pm on 30 November 2023 each of the Respondents be restrained from disposing of, dealing with or otherwise diminishing the value of any of the money in the following accounts in the name of the Fifth Respondent at the Commonwealth Bank of Australia: (a) Account numbered 651410607349; (b) Account numbered 600710273328; (c) Account numbered 600017131313; and (d) Account numbered 600017134557. 8. The affairs of the fifth respondent be managed in a caretaker mode by Harold Graham, Verna Newchurch, Gaile Mallard and Pearl Scott (Caretaker Group) in good faith until appointment of the board at the annual general meeting called for 29 November 2023. 9. The Applicant is entitled to appoint one external advisor the reasonable fees of which will be paid by the fifth respondent. 10. Ms Newchurch, Ms Mallard and Ms Scott are entitled to engage one external advisor of their choosing the reasonable fees of which will be paid by the fifth respondent. 11. Any decisions of the Caretaker Group to be acted on must be unanimous. 12. The Caretaker Group will work together to seek to maximise attendance at the annual general meeting convened for 29 November 2023. 13. These orders do not prohibit any dealing with or disposing of the fifth respondent's money where that disposal has been approved both by the Caretaker Group and by further order of this Court. 14. Liberty to apply. 15. Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Revised from the transcript) COLVIN J: 1 The applicant claims to be a director and member of the Ngadju Native Title Aboriginal Corporation RNTBC. The Corporation is being managed by its board of directors in the absence of a chief executive officer, and there is currently no independent director of the Corporation. The consequence of this state of affairs is that the Corporation is unable to form a quorum for a meeting of directors and, therefore, there is uncertainty as to the extent to which decisions can be made in the conduct of the affairs of the Corporation and in particular as to the ongoing management of those affairs. 2 Various disputes have arisen concerning the control of the Corporation and whether particular persons have authority to conduct the affairs of the Corporation. The disputes include issues about whether appropriate steps were taken in relation to the security of the Perth premises of the Corporation and access to those premises, as well as access to the computing system of the Corporation and whether it is appropriate for a new consultant to be appointed to conduct the IT system of the Corporation. 3 The applicant seeks interlocutory injunctive relief as a representative acting for and on behalf of the Corporation. The relief sought would restrain the first to fourth respondents from disposing of or dealing with or diminishing the value of funds held by the Corporation in certain nominated bank accounts and from appointing a new IT provider who would have control over access to the Corporation's computer systems. 4 The principles to be applied are well established: see the summary by Jackson J in Frigger v Trenfield [2019] FCA 1746 at [6]. The applicant must demonstrate that (a) there is a serious question to be tried as to the basis for the claim to relief; (b) there is a likelihood of injury for which damages will not be an adequate remedy; and (c) the balance of convenience favours the granting of an interlocutory injunction. 5 In circumstances where there is evidence that steps have been taken by the first to fourth respondents to alter the authority in relation to the conduct of the affairs of the bank account, despite being made aware of the current position concerning the management of the company, I am satisfied that it is appropriate to make orders to ensure that the funds of the Corporation are properly protected pending an annual general meeting (AGM). An AGM which has been convened for the Corporation for 29 November 2023. That has been the position for some time and there have been consultation meetings in relation to the convening of that AGM. 6 All parties agree that it is necessary for the AGM to proceed. Plainly, given the current position in relation to authority to undertake the management of the affairs of the Corporation, the conduct of an effective and valid AGM to appoint the necessary officers as soon as possible is a matter that is in the interests of the Corporation and its members. 7 In my view, beyond what I have already said in relation to the current circumstances of the management of the Corporation, it is not necessary to address the various allegations that have been made because, in the current circumstance of the company, it is necessary to put in place some form of caretaker arrangement to facilitate the AGM and have the uncertainty in relation to the management of the Corporation resolved. 8 In relation to those caretaker arrangements, there are competing positions advanced by the parties. The applicant proposes that there should be an arrangement whereby the employees continue to have responsibility for those arrangements. It is said that is the course that has been followed in the past and that until recently that is what had been occurring in relation to those arrangements. The first to fourth respondents propose a different course whereby there would be some caretaker arrangements by which an appropriate group comprising, in effect, the parties who are in dispute would meet and consider the steps that should be taken to arrange the AGM and then carry into effect steps which they unanimously agree. 9 The Corporation is established by legislation which is designed to have regard to cultural practices amongst aboriginal people and for particular purposes, as described in the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). In my view, it is appropriate to have regard to those particular aspects of the Corporation and the purposes which it serves in deciding what are the appropriate orders. 10 For those reasons, the course that I propose to follow is one which would see orders made in relation to the bank account, but on terms that would establish a caretaker body which would then determine what should happen in relation to the AGM, and whether it is necessary to expend further funds in undertaking other steps. 11 On the evidence that is before me, it is not necessary to provide for the employees or the ongoing operating expenses of the Corporation because, on the evidence, they are to be met by a charitable trust which provides funds on a quarterly basis for the operations of the Corporation and the evidence indicates that those moneys will be made available to meet those costs in the short period between now and when the AGM will occur. In relation to the issues that have arisen concerning the IT consultant, it seems to me that it would be inconsistent with a caretaker role for there to be any change to the arrangements in relation to the IT consultancy. Therefore, the orders that I propose to make for those caretaker arrangements will mean that there can be no change to those arrangements pending the AGM. 12 The orders I will make will provide for the caretaker body to meet and consider whether there are any particular arrangements that may be needed to be put in place for the purposes of the effective and valid conduct of the AGM that have not already been attended to and the extent to which funds of the Corporation need to be released for those purposes, having regard to the availability of funds from the trust. If unanimous agreement is reached as to those matters by members of the caretaker group then they can be proposed to the Court as variations to the orders I will make today. If unanimous agreement cannot be reached then the Court will hear further submissions from the parties at short notice as to any variation to the orders to provide for particular arrangements for the AGM and the funding of those arrangements. 13 For the above reasons, orders were made on the basis of the applicant's undertaking as to damages. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin. Associate: Dated: 15 November 2023