Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 3) [2011] FCA 1019 (31 August 2011)

Last Updated: 1 September 2011

FEDERAL COURT OF AUSTRALIA

Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 3) [2011] FCA 1019

Citation:		Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 3) [2011] FCA 1019
Appeal from:		Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 3) [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 DAVIS, MAVIS DAVIS, CECILIA 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
Judge:		FOSTER J
Date of judgment:		31 August 2011
Catchwords:		PRACTICE AND PROCEDURE – whether an interlocutory injunction should be granted to an unsuccessful litigant pending the determination of that litigant’s Application for Special Leave to Appeal to the High Court of Australia – relevant principles discussed – injunction refused
Legislation:		Corporations (Aboriginal and Torres Strait Islander) Act 2006, s 487-10(1), Div 453 Federal Court of Australia Act 1976 (Cth), s 33
Cases cited:		Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCAFC 88 related American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 cited Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 applied Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57 applied Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618 applied Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 applied Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) [1986] HCA 84; (1986) 161 CLR 681 cited Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1 applied Stirling Harbour Services Pty Ltd v Bunbury Port Authority (No 2) [2000] FCA 87 followed Spry, The Principles of Equitable Remedies, 5th edn, 1997 Spry, The Principles of Equitable Remedies, 7th edn, 2007
Date of hearing:	29 August 2011
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	38
Counsel for the First Appellant:	Mr IM Neil SC and Mr AK Flecknoe-Brown
Solicitor for the First Appellant:	Eddy Neumann Lawyers
Counsel for the Second, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth and Thirteenth Appellants:	Mr P Coady
Solicitor for the Second, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth and Thirteenth Appellants:	Greg Murray Law
Counsel for the Respondents:	Dr JG 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

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 DAVIS Eighth Appellant MAVIS DAVIS Ninth Appellant CECILIA 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

JUDGE:	FOSTER J
DATE OF ORDER:	31 AUGUST 2011
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The Interlocutory Application filed by the first appellant on 17 August 2011 be dismissed.
2. The question of the costs of the Interlocutory Application referred to in Order 1 above 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 other applications made on and after 21 July 2011.
   

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

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 DAVIS Eighth Appellant MAVIS DAVIS Ninth Appellant CECILIA 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

JUDGE:	FOSTER J
DATE:	31 AUGUST 2011
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 21 July 2011, the Full Court delivered judgment in Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCAFC 88 (the first judgment). By that judgment, the Full Court dismissed an appeal from Flick J. On 21 July 2011, the Full Court also stayed its order dismissing the appeal and continued interlocutory orders designed to regulate on an interim basis future expenditure to be undertaken by the first appellant. In addition, on 21 July 2011, the respondents undertook to the Court not to make a determination under s 487-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the CATSI Act) in relation to the first appellant prior to 10 August 2011. That undertaking has been continued up to 4.00 pm today in order to hold the status quo while the Court dealt with various applications made after the first judgment was delivered. The interlocutory regime which I have described has remained in place continuously since 21 July 2011.
2. On 25 August 2011, the Full Court delivered a further judgment (Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 2) [2011] FCAFC 110) (the second judgment). By that judgment, the Full Court dismissed an application by the first appellant that the Full Court should reopen and reconsider the first judgment.
3. By an Interlocutory Application filed on 17 August 2011, the first appellant sought an order extending the stay of the Full Court’s dismissal order made on 21 July 2011 until:

(a) The determination of the first appellant’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 the earlier.

4. By the same Interlocutory Application, the first appellant also sought an interlocutory injunction restraining the respondents from taking any further steps consequent on the show cause notice dated 11 February 2011 given by the second respondent to the first appellant pursuant to s 487-10(1) of the CATSI Act (the February 2011 show cause notice) until:

(a) The determination of the first appellant’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 substantially the same effect as the interlocutory injunction now claimed by the first appellant,

whichever is the later.

5. These Reasons for Judgment determine the first appellant’s claim for a stay and its claim for an interlocutory injunction.
6. The effect of the Full Court’s order dismissing the appeal from the judgment of Flick J was to leave intact the final orders made by his Honour on 14 April 2011. His Honour had dismissed all of the first appellant’s claims for relief with costs.
7. As French J (as his Honour then was) said in Stirling Harbour Services Pty Ltd v Bunbury Port Authority (No 2) [2000] FCA 87 at [6]–[7], a judgment of this kind cannot logically be stayed pending the hearing and determination of an appeal. The judgment does not impose a positive obligation on the unsuccessful party (the first appellant) to do anything nor does it declare the rights of the successful parties (the respondents) which may be exercised adversely to the first appellant’s interests or which may impose some correlative obligation on the unsuccessful party when invoked. In a very general sense, the conduct of the second respondent in issuing the February 2011 show cause notice has been vindicated. This is because the first appellant has failed in its attempt to block future action based upon that notice. But no declarations of right have been made.
8. At the commencement of oral argument on the present application, I indicated to Senior Counsel who appeared for the first appellant that I had formed the tentative view that a stay was not the appropriate remedy in the circumstances of the present case and that the only relief which I would consider granting was an interlocutory injunction along the lines of the injunction sought. In order to secure such an injunction, the first appellant would have to make out a case in accordance with the relevant principles applicable to the grant of such relief when it is sought after a trial and pending appeal.
9. Senior Counsel for the first appellant accepted that his client’s present application should be considered under the rubric of interlocutory injunction and that a stay was not the appropriate remedy. The application was then argued on that basis.

THE RELEVANT PRINCIPLES

The General Rules

10. In Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, a majority of the High Court held that, where an interlocutory injunction is sought (inter alia) in respect of private rights, it is necessary to identify the legal or equitable rights which are to be determined at the trial and in respect of which the final relief is sought. Their Honours who comprised the majority made clear that the final relief sought need not be injunctive in nature. See [8] to [21] (pp 216–220) per Gleeson CJ; [59] to [61] (pp 231–232) per Gaudron J; and [86] to [92] (pp 239–242); [98] to [100] (pp 244–246); and [105] (p 248) per Gummow and Hayne JJ. At [10] (p 216), Gleeson CJ also specifically cited with approval Spry, The Principles of Equitable Remedies, 5th edn, 1997 (pp 446–456).
11. In his Reasons for Judgment, at [13] (p 218), Gleeson CJ expressly approved the following passage from the Reasons for Judgment of Mason ACJ in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 at 153:

In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.

12. These remarks of Mason ACJ which were approved by Gleeson CJ echo the observations made by the High Court in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622–623.
13. In Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57 at [65] (pp 81–82), when referring to the well-known passage in Beecham Group Ltd v Bristol Laboratories Pty Ltd at 622–623, Gummow and Hayne JJ said:

By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument [(1968) [1968] HCA 1; 118 CLR 618 at 620]. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal [(1968) [1968] HCA 1; 118 CLR 618 at 622]:

“How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.”

14. At [70] to [72] (pp 83 and 84), their Honours went on to explain the similarities and differences between the test expounded in Beecham Group Ltd v Bristol Laboratories Pty Ltd and the test articulated in American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 as follows:
    70. When Beecham and American Cyanamid are read with an understanding of the issues for determination and an appreciation of the similarity in outcome, much of the assumed disparity in principle between them loses its force. There is then no objection to the use of the phrase “serious question” if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham, depends upon the considerations emphasised in Beecham.
    71. However, a difference between this Court in Beecham and the House of Lords in American Cyanamid lies in the apparent statement by Lord Diplock that, provided the court is satisfied that the plaintiff's claim is not frivolous or vexatious, then there will be a serious question to be tried and this will be sufficient. The critical statement by his Lordship is “[t]he court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried” [[1975] AC 396 at 407]. That was followed by a proposition which appears to reverse matters of onus [[1975] AC 396 at 408]:

So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought.
(Emphasis added.)

Those statements do not accord with the doctrine in this Court as established by Beecham and should not be followed. They obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.

72. The second of these matters, the reference to practical consequences, is illustrated by the particular considerations which arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application [See the judgment of McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 535-536 and the article by Sofronoff, “Interlocutory Injunctions Having Final Effect”, Australian Law Journal, vol 61 (1987) 341.95]. The first consideration mentioned in Beecham, the nature of the rights asserted by the plaintiff, redirects attention to the present appeal.
    
15. In the present case, in its substantive application for relief, the first appellant seeks to set aside the February 2011 show cause notice and to restrain all future steps which the respondents might be minded to take based upon that notice. It also seeks to restrain the second respondent from appointing a special administrator to the first appellant on the ground that any decision to do so made by him would be liable to be set aside for apprehended bias. For present purposes, however, the serious question to be tried is whether the first appellant has a substantial prospect of obtaining special leave to appeal to the High Court of Australia. The first appellant does not seek to secure the present position beyond the point in time when the High Court becomes seised of the matter. At that point, the question of whether further interlocutory relief should be granted will be a matter for the High Court.
16. There is no claim for damages in the present case. The question of whether damages would be an adequate remedy does not arise.
17. As Mason ACJ said in Castlemaine Tooheys Ltd v South Australia, if the Court is to grant an interlocutory injunction, the balance of convenience and justice must favour the grant of such an injunction. The Court’s consideration of the balance of convenience and justice in the present context involves the exercise of discretionary judgment.
18. In forming that discretionary judgment, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the respondents, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the first appellant if no injunction is granted.
19. In order to address the balance of convenience and the balance of justice in the present case, it is necessary to consider the nature and strength of the first appellant’s case for special leave.
20. It is also necessary to consider and evaluate the impact that the grant or refusal of an injunction will have or is likely to have on third persons and the public generally.
21. In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1 at [65] and [66] (pp 41–43), Brennan CJ and McHugh, Gummow, Kirby and Hayne JJ, in a joint judgment, expressly adopted a passage from Spry, The Principles of Equitable Remedies, 5th edn, 1997, at pp 402–403, which may be summarised as follows:

(a) In assessing the balance of convenience in an interlocutory injunction application, the interests of the public and third persons are relevant and have more or less weight according to other material circumstances;

(b) Whether those interests tend to favour the grant or the refusal of an injunction in any given case depends upon the circumstances of that case; and

(c) Hardship visited upon third persons or the public generally by the grant of an interlocutory injunction will rarely be decisive.

22. In the present case, there is a very substantial public interest in ensuring that corporations regulated under the CATSI Act are run efficiently, honestly, in accordance with the CATSI Act and in conformity with the core objects and purposes for which they were established. Giving effect to that public interest is not the same as considering the effect that the grant of an interlocutory injunction would have upon the public generally. Nonetheless, the public interest in seeing that corporations regulated under the CATSI Act are properly managed is an important consideration to be weighed in the balance when I come to consider the balance of convenience and justice.

Interlocutory Injunctions Pending Appeal

23. In Stirling Harbour Services Pty Ltd v Bunbury Port Authority (No 2), at [13]–[14], French J said:
    13. The decision whether or not to grant an interlocutory injunction pending an appeal will be informed by general principles governing the grant of such injunctions and, within those general principles, considerations analogous to those which arise in relation to stay orders made in aid of the court’s appellate jurisdiction under s 29 or O 52 r 17 and orders for stay of execution under O 37. The weight of authority in this Court does not require the applicant for a stay to demonstrate special or exceptional circumstances before the order will be made – Westaflex (Aust) Pty Ltd v Wood [1990] AIPC 36,227 at 36,228, Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd [1991] FCA 329; (1991) 30 FCR 548 at 551, Henderson v Amadio Pty Ltd (No 3) (1996) 65 FCR 66 at 69, Powerflex Services Pty Ltd v Data Access Corporation (1996) 137 ALR 498 at 499. The Court generally has adopted the approach of the New South Wales Court of Appeal in Alexander & Ors v Cambridge Credit Corp Ltd (Receiver Appointed) (1985) 2 NSWLR 685 at 691. It has differed from the Supreme Court of Victoria in this respect – Cellante v G Kallis Industries Pty Ltd [1991] VicRp 99; [1991] 2 VR 653 and Lagarna Pty Ltd v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1995] VicRp 9; [1995] 1 VR 150. The same approach was adopted by Kirby J in Bryant v Commonwealth Bank of Australia (1995) 134 ALR 460. While, as his Honour said, a stay is not granted simply for the asking, special or exceptional circumstances are not generally required to justify a stay of execution of orders the subject of an appeal which lies as of right. It may be that, as Heerey J observed in Amadio at 69, the difference is “more apparent than real since on any approach the party seeking a stay needs to show a reason why the stay should be granted”. But broadly speaking, as was said in Powerflex Services at 499, the language of O 52 suggests “no limitations upon a broad discretion inhering in the court”.
    14. Accepting that the present case is one in which the order sought can only be granted under s 23 of the Federal Court Act there is no reason that the broad discretion conferred by the section should be fettered by rules requiring the demonstration of special or exceptional circumstances any more than the discretions conferred by s 29 or O 37 r 10 or O 52 r 17 are fettered by such rules.
        
24. I agree with his Honour’s views.
25. In the present case, of course, there is no appeal as of right. All that the first appellant has is a right to apply for special leave to appeal to the High Court (s 33 of the Federal Court of Australia Act 1976 (Cth)). Here, that entitlement arises in circumstances where the appellant has entirely failed both at first instance and on appeal in this Court. The consequence of granting the relief sought by the first appellant will be that the respondents will be prevented from taking further steps towards the appointment of a special administrator, perhaps for many months. In the words of French J in Stirling Harbour Services Pty Ltd, the respondents will be prejudiced, in the discharge of their official duties and functions, in the exercise of their judicially vindicated rights.

THE PARTIES’ SUBMISSIONS

The First Appellant’s Submissions

26. Senior Counsel for the first appellant submitted that:

(a) The prima facie case or serious question to be tried in the present case is whether the first appellant has a substantial prospect that special leave to appeal to the High Court of Australia will be granted by that Court not whether the first appellant will ultimately be successful in the resultant appeal. The injunction sought is for the period up to the determination of the first appellant’s special leave application or until the High Court otherwise takes control of the litigation by itself making orders to protect the status quo, whichever shall first occur;

(b) The requirement that the first appellant must establish a prima facie case or serious question to be tried should be understood as requiring that the first appellant demonstrate comparable prospects of success in respect of its special leave application as those that it would have been required to demonstrate by the authorities in respect of the power to stay a judgment pending appeal (as to which see Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) [1986] HCA 84; (1986) 161 CLR 681 at 683–685 per Brennan J);

(c) The Court should assume, without expressing any firm views, that the prospects of the first appellant obtaining special leave to appeal to the High Court of Australia are not insubstantial and should decide the present application by determining where the balance of convenience and justice lies;

(d) There will be irreversible reputational damage to the directors of the first appellant if a special administrator is appointed to the first appellant. Whilst it must be acknowledged that there has probably already been some damage to the reputation of those persons, the appointment of a special administrator will add to that damage because it will give substance and credence to the suggestions of mismanagement and financial misconduct which lie behind the February 2011 show cause notice;

(e) A special administrator is likely to take steps to terminate the first appellant’s special leave application. This point was raised in the Written Submissions made by the first appellant in support of the relief which it now seeks but was more or less abandoned during the course of oral argument;

(f) There is no prejudice to the respondents in being forced to stay their hand for a further period of several months; and

(g) The interests of the Dunghutti people are better served by the grant of an injunction than by the appointment of a special administrator to the appellant. It was submitted, in this context, that there would be no discernible harm caused to the Dunghutti people if the status quo is maintained, given that the lawyers currently acting in respect of the steps taken on behalf of the first appellant since 21 July 2011 in the current litigation have been acting on a pro bono basis.

The Respondents’ Submissions

27. Counsel for the respondents submitted that:

(a) The first appellant’s case for special leave is extremely weak. Its core claims have been rejected by four judges of this Court. Most of the arguments which it wishes to raise in the High Court are new arguments which were not advanced in this Court;

(b) The financial mismanagement on the part of the current directors of the first appellant which were detailed in the report dated October 2008 made by Mr Lindsay Roberts FCA pursuant to Div 453 of the CATSI Act and which underpin the February 2011 show cause notice involve very serious matters of financial mismanagement and poor corporate governance which, if correct, have plagued the affairs of the first appellant for over 18 months. The dissipation of the first appellant’s assets on legal fees spent in order to shore up the position of the incumbent directors and in other ways for the apparent benefit of individual directors raise significant matters of public interest and should not be allowed to continue unchecked;

(c) The interests of individual directors in preserving for the future such reputations as they may currently retain cannot outweigh the public interest in the proper administration of corporations under the CATSI Act;

(d) The evidence shows that the incumbent directors are contemplating yet further action designed to keep them in office and thus in control of the assets of the first appellant. The present interlocutory regime does not completely protect those assets; and

(e) The interests of the Dunghutti people should be considered paramount. Those interests require the Court to assess the balance of convenience and justice in favour of the refusal of interlocutory injunctive relief.

CONSIDERATION

The Serious Question to be Tried

28. The first appellant filed an Application for Special Leave to Appeal to the High Court of Australia on 26 August 2011. On the same day, it filed a Summons seeking expedition of its Application for Special Leave to Appeal.
29. Attached to an affidavit sworn on 17 August 2011 by the solicitor for the first appellant in support of its claim for interlocutory injunctive relief is a draft Notice of Appeal. The grounds of appeal which the first appellant will raise in the High Court, if special leave is granted, are set out in that draft Notice of Appeal as follows:

(a) The Full Court erred in law in holding that the requirement that the delegate of the first respondent observe procedural fairness did not arise prior to the issue of the February 2011 show cause notice;

(b) Alternatively, the Full Court erred in law in concluding that there was no breach of the requirement of procedural fairness to be observed by the delegate at a point anterior to the decision to issue the February 2011 show cause notice;

(c) Alternatively, the Full Court erred in concluding that the opportunity for the first appellant to respond to the February 2011 show cause notice afforded by that notice cured any failure to afford procedural fairness to the first appellant prior to the issue of the February 2011 show cause notice;

(d) The Full Court erred in law in not finding that a reasonable apprehension of bias arose in respect of the reference to, and (inferentially), reliance by the delegate upon an examination report prepared by Lindsay Roberts in October 2008 and other undisclosed documentation in deciding to issue the February 2011 show cause notice; and

(e) The Full Court erred in law in considering that the first appellant had been afforded a sufficient opportunity to respond to the Roberts report and other undisclosed documentation upon which the delegate relied by responding to the February 2011 show cause notice.

30. In its Summary of Argument, filed on 29 August 2011 in support of its Application for Special Leave to Appeal, the first appellant developed the notified grounds of appeal in a number of different ways. In doing so, the first appellant advanced arguments which were not put either to the trial judge or to the Full Court. By way of illustration of this point, the first appellant wishes to argue in the High Court that the delegate must be “satisfied” of certain matters before he or she can issue a show cause notice pursuant to s 487-10(1) of the CATSI Act. That requirement does not appear in s 487-10(1). The suggestion that such a requirement should be engrafted upon the subsection was not the subject of any submission before the trial judge or the Full Court. A similar observation may be made in respect of the point that was described in the second judgment as “the Roberts bias point”.
31. In my opinion, the first appellant’s prospects of obtaining special leave to appeal to the High Court are slim. Quite apart from the circumstance that the arguments which it wishes to advance are weak, the special leave application does not raise any point of general importance which might travel beyond the facts of the present case.
32. Senior Counsel for the first appellant submitted that I should assume that the first appellant has substantial prospects of obtaining special leave to appeal to the High Court and that I should focus my attention in dealing with the present application upon the second part of the inquiry, that is, upon the balance of convenience and justice.
33. I am prepared to proceed to consider those questions and not to reject the current application out of hand upon the basis that there is no serious question to be tried. However, in considering the second part of the present inquiry (the balance of convenience and justice), I am obliged to take account of the fact that, in my judgment, the first appellant’s prospects of obtaining special leave to appeal to the High Court are extremely weak. I propose to proceed on that basis.

The Balance of Convenience and Justice

34. At [24]–[25] of the first judgment, the Full Court set out the terms of the February 2011 show cause notice and of the letter under cover of which that notice was sent to the first appellant. As a general observation, it must be said that the matters of concern raised by the respondents in the February 2011 show cause notice involve very serious allegations indeed. In one of the grounds relied upon by the respondents, reference is made to very significant expenditure on legal costs in relation to disputes between certain members of the first appellant and its directors. For example, in a two year period between 2008 and 2010, $881,080 was apparently spent on legal costs. Far less was expended upon scholarships and other assistance to the Dunghutti people. Further, the respondents have concerns as to the way in which the first appellant has addressed applications for membership of the first appellant. In addition, the respondents have concerns that the incumbent directors have made payments to themselves or for their benefit which were not in the interests of the first appellant and which have not been properly recorded in the books and records of the first appellant. Other serious corporate governance issues have been raised.
35. As has been submitted by the respondents in resisting the present application, the first respondent has a statutory duty to ensure that corporations regulated under the CATSI Act (of which the first appellant is one) comply with the provisions of that Act and that native title compensation funds are spent wisely in the interests of the indigenous people for whose benefit the compensation was paid. There is a very significant public interest in ensuring that native title compensation funds, which, after all, are funds raised by government through taxation, are spent wisely and in the interests of the people for whose benefit they were paid.
36. The history of the present litigation demonstrates that the incumbent directors of the first appellant have consistently endeavoured to answer the respondents’ concerns by legalistic manoeuvres rather than by fully and frankly addressing those concerns. It was only on 4 August 2011, after the first judgment was delivered, that the first appellant made any effort at all to respond substantively to the February 2011 show cause notice.
37. While it is true that the respondents themselves will not suffer any prejudice if the present interlocutory regime is continued for a further period of some months, there is, in my view, an ongoing risk that the assets of the first appellant will be further dissipated in litigation which will not benefit the members of the first appellant. In addition, given that this Court has now held both at trial and on appeal that the respondents should be free to pursue the course of action contemplated by s 487-10(1) of the CATSI Act, given the very substantial public interest in ensuring that public funds are only spent in accordance with the purpose for which they were made available and given the fact that the first appellant has a weak case for special leave, the balance of convenience and justice in the present case strongly favours the refusal of the interlocutory injunction sought by the first appellant. I do not consider the prospect of further damage to the reputation of the incumbent directors to be a matter of much weight in favour of an injunction when compared with these matters.

CONCLUSIONS

38. For those reasons, I refuse to grant the relief sought. The Interlocutory Application filed by the first appellant on 17 August 2011 will be dismissed. I propose to reserve for further consideration of the Full Court the question of costs of that Application.
    

I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.

Associate:

Dated: 31 August 2011