Mumbler and Ors and The Registrar of Aboriginal and Torres Strait Islander Corporations and Dunghutti Elders Council [2009] AATA 159; (2009) 49 AAR 448 (13 March 2009)

Last Updated: 15 December 2010

Administrative Appeals Tribunal

INTERLOCUTORY DECISION AND REASONS FOR DECISION

[2009] AATA 159

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2008/4379

GENERAL ADMINISTRATIVE DIVISION )

Re: Robert Mumbler, Lewis Kelly, Harold Smith, Betty Champion and Heather Anderson-Richie

Applicants

And: The Registrar of Aboriginal and Torres Strait Islander Corporations

First Respondent

And: Dunghutti Elders Council (Aboriginal Corporation)

Second Respondent

INTERLOCUTORY DECISION ON S43A APPLICATION

Tribunal Professor GD Walker, Deputy President

Date 13 March 2009

Place Sydney

Decision The interlocutory decision is that the proceeding be referred for conciliation pursuant to s43A of the Administrative Appeals Tribunal Act 1975 (Cth).

.....................[sgd].......................
Professor GD Walker
Deputy President

CATCHWORDS – PRACTICE AND PROCEDURE – Application for matter to be referred to alternative dispute resolution (ADR) – advantages of conciliation – proceedings referred to conciliation.

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RELEVANT ACT/S:

Administrative Appeals Tribunal 1975 (Cth) (the Act): ss 34A, 2009_159.html#ActSec42BtheAatAct">42B

Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the CATSI Act): ss 658-1, 407-1, 576-15

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CITATIONS

Re Mumbler & ors in their elected capacity as Directors of the Dunghutti Elders Council (Aboriginal Corporation) and Office of the Registrar of Indigenous Corporations [2008] AATA 947

Re Vanderlouw and Civil Aviation Authority [1989] AATA 265

Re Gowing and Civil Aviation Authority (1990) 22 ALD 207

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AUTHORITIES

Alternative Dispute Resolution (ADR) Guidelines

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REASONS FOR INTERLOCUTORY DECISION on s43 APPLICATION

13 March 2009

Professor GD Walker, Deputy President

1. This application has been the subject of an earlier interlocutory application, decided on 23 October 2008 (Re Mumbler & ors in their elected capacity as Directors of the Dunghutti Elders Council and Office of the Registrar of Indigenous Corporations [2008] AATA 947).
2. At a further directions hearing held on 23 February 2009, the applicants applied under s 34A of the Administrative Appeals Tribunal 1975 (Cth) (the Act) for a direction that the proceedings be referred for mediation or conciliation, preferably the former.
3. The first respondent (the registrar) indicated that he had no strong view about the application but harboured some concerns. The second respondent (the Dunghutti Elders’ Council, or the council, or DEC) opposed the application on the ground that it was futile and asked that the substantive hearing of the matter be expedited. Alternatively, the council foreshadowed an application for dismissal of the substantive proceeding on the ground of futility, presumably under s 42B of the Act.
4. The applicants were represented by Mr Julian Svehla of counsel instructed by Ms Julia Abouaf, solicitor of Blake Dawson. Mr Andras Markus of the Australian Government Solicitor appeared for the first respondent while Mr John McCarthy QC and Mr Jeff Kildea of counsel, instructed by Mr Eddy Neumann of Eddy Neumann Lawyers, appeared for the second respondent.

Applicants’ submissions

5. In written and oral submissions, the applicants noted that at a telephone conference on 30 January 2009, the applicants had requested referral of the proceedings to mediation or conciliation, but that course was opposed by the second respondent. The matter had therefore been referred to the present directions hearing.
6. There was no doubt about the tribunal’s power to refer a matter to alternative dispute resolution (ADR) under s 34A(1)(b) of the Act. The AAT guidelines on ADR listed a number of factors to be taken into account when ordering such a referral, the relevant ones being that the ADR process might offer a more flexible solution than a determination, and that attempting a mediation would be more cost-effective than a hearing of the matter.
7. The fact that an earlier attempt at mediation had failed should not deter the tribunal from activating the ADR processes. That mediation had occurred before the commencement of these proceedings and significantly before the first respondent had made either the first decision or the second decision (the decision following an internal review). The first respondent was not a party to the mediation, which was purely informal and, from the applicants’ point of view, had not proceeded satisfactorily.
8. The first respondent has an active function and role under s 658-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the CATSI Act), including a duty to assist with the resolution of disputes and complaints.
9. Indeed, the first respondent had offered assistance in mediating the dispute between the applicants and the second respondent and the applicants had accepted the offer. To date there had been no further response from the first respondent or the second respondent in relation to that offer.
10. Mediation or conciliation would give the parties an opportunity to attempt to resolve their dispute without the costs associated with a hearing. All the materials needed were already before the tribunal, so no further costs need be incurred in that regard. It would be the first time the first respondent would have the opportunity to meet with the applicants and provide them with an explanation for the first decision. It would give the applicants and the second respondent’s directors an opportunity for the first time since the start of this dispute to meet in person and discuss the dispute. Under the auspices of the tribunal, and with the assistance of a member, the parties might be able to resolve it. They would also have the opportunity to discuss the issues without the presence of lawyers.
11. This was a proceeding that should only be progressed to hearing and determination after the tribunal had fully satisfied itself that other avenues for resolution had been explored. A full hearing on the merits would not be short as the tribunal would need to establish the authority of those who had signed the relevant documents. Those documents came into being in a wider context, including the failure of the directors to requisition a special general meeting, which led to the calling of the meeting that resulted in the election of the applicants. It would also involve significant issues about the construction of the CATSI Act and the manner in which Aboriginal corporations administer their affairs and perform their duties. Although the issue was in a sense historical, it was not futile. A number of other matters were put on hold pending the outcome of this case, so it affected a wider range of decisions in relation to the Dunghutti people.
12. The second respondent’s position that ADR would be futile and unsuccessful was the wrong approach to take. One could not determine in advance the outcome of such a process, which was intrinsically dynamic. The applicants had agreed to the first respondent’s offer of mediation but had not acted on that acceptance.

First respondent’s submissions

13. On behalf of the first respondent Mr Markus indicated that the registrar had no strong view on the matter but held certain concerns. The nature of the dispute was relevant to whether the matter should be referred to ADR. It was narrow in scope and related to whether the decision by the registrar was the correct or preferable one. That decision was taken on the basis of factual material, but was in the nature of the application of legal principles to facts that were not seriously disputed. The final hearing of the application would take place within a relatively confined scope. The applicants’ aim appeared not to be mediation about the issue of registration or non-registration, but to resolve the whole surrounding factual area of dispute.
14. There was no real significance in the first respondent’s participation because any agreement reached as a result of mediation or conciliation would not advance the outcome of the application. Unless there was a real prospect of resolution of issues that had not yet been properly identified, there was no point in pursuing ADR.
15. If the matter were to proceed direct to hearing, the costs would be confined because of the narrow nature of the issue. The tribunal could only decide the issue before it and the respondents’ obligation to assist in the resolution of disputes was not at large.
16. The first mediation had taken place after the first decision, but before the second.
17. If the tribunal were minded to refer the matter to ADR, conciliation would be preferable to mediation because of its more open nature.

Second respondent’s submissions

18. Mr McCarthy QC adopted the submissions advanced by the first respondent. The second respondent’s position, he continued, was that mediation or conciliation would be futile and that the applicants’ real remedy, if any, was in another forum.
19. At present, the new directors elected in September 2008 were conducting the second respondent’s affairs.
20. The tribunal could not achieve a resolution of the issue of control because no decision on the present application could deregister the present directors. Any decision relating to the 2007-2008 period was academic because the second respondent’s constitution required a meeting in 2008, at which different directors were then elected. It was not disputed that no decision by the tribunal could affect that election.
21. The applicants could not really desire a hearing because it could give them nothing, given the narrow issue of registration as a matter of law. The first respondent would not change its decision as a result of mediation.
22. In response to a recent offer by the second respondent, the applicants had advanced no proposal for resolving the issue. That reflected on their good faith. The mediation held in 2008 was at the applicants’ behest, and they nominated the mediator. All issues had been laid out in the course of that process, but the mediation had failed.
23. The matter should be expedited as there was a large sum at stake that was not being returned to those entitled to it because of these proceedings. There should be a separate hearing on the one point that could settle the matter, namely the discretionary point that a hearing would be futile. Cases such as Re Vanderlouw and Civil Aviation Authority [1989] AATA 265 and Re Gowing and Civil Aviation Authority [1990] AATA 56; (1990) 22 ALD 207 showed that the futility issue could be resolved quickly.
24. The applicants had the benefit of legal aid for these proceedings, while the second respondent did not. There had already been one mediation and the second respondent bitterly opposed a further attempt. It should not be forced to use its funds for that purpose, which could not in any event give the applicants control over the second respondent. The first respondent had made a decision and it is not negotiable.

Consideration

25. By letter dated 23 July 2008, the first respondent informed the applicants of its decision under s 407-1 of the CATSI Act not to register the notification of a change to corporation officers’ details submitted by the applicants on 22 October 2007 following a special general meeting of the members of the second respondent held on 4 October 2007.
26. The applicants applied to the first respondent for an internal review of that decision. The first respondent informed the applicants by letter dated 22 August 2008 that he had affirmed and remade the initial decision.
27. The reviewable decision before the tribunal is the decision referred to in the letter of 23 July 2008, or the decision following the internal review referred to in the letter of 22 August 2008. The first respondent’s position was that it did not greatly matter which of the two decisions was reviewed by the tribunal.
28. The July 2008 decision was based on a finding that the request by certain members of the second respondent for the convening of a special general meeting of the second respondent was invalid. Consequently, the first respondent found that the meeting convened and held following that request was not validly convened or held, with the result that the removal of the second respondent’s existing directors and the appointment of the applicants in their place as the new second respondent’s directors was invalid. Consequently, the first respondent refused to register the applicants as the new directors of the second respondent.
29. The first respondent also found that there was no procedural irregularity for the purposes of s 576-15 of the CATSI Act. That provision could therefore not be used to validate the request for the special general meeting or the meeting itself so as to permit the registration of the applicants as the second respondent's new directors. The internal review decision adopted the reasoning and result of the first decision.
30. The applicants relied on an affidavit by Cobey Taggart dated 24 September 2008. The respondents did not dispute the contents of that affidavit. After outlining the course of events relating to the various meetings and the first respondent’s decisions, the affidavit went on to give details of certain other long-standing issues concerning the conduct of the second respondent’s affairs, particularly in relation to the question of membership. There were questions as to whether a large number of applications for membership submitted to the second respondent’s then governing committee had been processed, and if not whether that failure or refusal was justified by the applicants’ failure to supply the results of certain details of genealogical research undertaken on its instructions. The applicants had rejected the claim that this material was required in order to process applications for membership of the second respondent because 30 other members had been accepted as members by those directors without such information being provided by the applicants or their representatives. There was also an issue concerning the arrangements to be made for the delivery of proxies for the annual general meeting.
31. The internal review had acknowledged that the second respondent’s membership lists might have been materially false or misleading because of the removal of some names without notice, the failure to process applications by persons who had made multiple applications and the continued listing of deceased persons as members.
32. On 22 September 2008 the applicants’ representatives were informed by telephone that the first respondent had arranged for an examination of the second respondent to be conducted, such examination to consider the register of members maintained by the second respondent, its financial records and its compliance with its rules and the CATSI Act. Mr Lindsay Roberts, a chartered accountant, had been appointed to undertake the examination.
33. Apart from appointing the examiner, the first respondent has taken no other steps. Mr Markus indicated that the outcome of the present proceedings would affect the manner in which the first respondent dealt with the wider issues.
34. Mr McCarthy stressed that the applicants’ real remedy, if any, was in another forum, but they had not pursued that option because they had been unable to obtain legal aid for that purpose. The applicants did not deny that proposition, but assuming it is correct it does not take the matter much further. Once the tribunal has before it a valid application in relation to a reviewable decision, it cannot decline to deal with it in the most efficient manner practicable simply because another remedy might also be available.
35. The precise issue before the tribunal is limited to the question of registration as against non-registration. The hearing would not, however, necessarily involve merely the straightforward application of the statute to undisputed facts because, as I indicated at the earlier directions hearing, the materiality of any defects in the special general meeting notice could be a matter of legitimate contention. The evidence adduced in relation to that issue could be quite wide-ranging. One could therefore not assume that a hearing would be brief. Further, the applicants do not concede that the present directors of DEC were validly elected.
36. While the significance of the first respondent’s decision has to a great extent been overtaken by events, the matter is not now purely moot as the affairs of the second respondent, including the question of its proper membership, are the subject of acrimonious dispute among the Dunghutti people and have led to the first respondent’s ordering of an examination of the second respondent’s affairs.
37. As those matters have not yet been the subject of a decision by this or any other tribunal, it would be premature to say that any hearing on the matter would be entirely nugatory.
38. The applicants' preference is for mediation rather than conciliation, while the first respondent considers that if ADR is to be required, conciliation would be preferable.
39. The factors favouring mediation and conciliation respectively are set out in the tribunal’s Alternative Dispute Resolution (ADR) Guidelines.
40. The main advantage of conciliation over mediation in the present circumstances is that conciliation contemplates that the conciliators may make suggestions for terms of settlement and may actively encourage the participants to reach an agreement that accords with legal requirements. The factors to guide the tribunal in this context are:
    • Commercial considerations are important;
    • The desire of the parties to keep the dispute confidential;
    • The parties would benefit from advice on possible settlement options; and
    • There is a conflict in expert opinion or evidence.
41. Commercial considerations are important in the present case as the dispute is ultimately about the disposition of certain compensation funds that are said to exceed $6,000,000. While the parties have not expressly stated that they wish to keep the dispute confidential, it is not disputed that the issues involved have seriously divided the Dunghutti people and it is unlikely that publicity would do anything to reduce those divisions. While there is no suggestion of a conflict in expert evidence, it is clear that the parties might benefit from advice on possible settlement options. Some of those options could lead to the discontinuance of the principal application.
42. At the very least, conciliation could help to limit the issues and define with more precision those that remain.
43. The failure of the earlier mediation does not mean that a conciliation at this point would prove fruitless. The registrar would be represented and one cannot assume in advance, given his expertise and experience, that his participation would add little to the process. The conciliation would be conducted by senior persons from the AAT. If they thought it might help resolve the issues, they could hold all or part of the proceedings in the absence of legal representatives.
44. Pursuant to s 34A(1)(b) of the AAT Act, I therefore direct that the proceeding be referred for conciliation.

I certify that the 44 preceding paragraphs are a true copy of the reasons for the interlocutory decision herein of Professor GD Walker, Deputy President

Signed: .....................[sgd].........................................................

Renee Wallace, Associate

Date/s of Interlocutory Hearing: 23 February 2009

Date of Interlocutory Decision: 13 March 2009

Solicitor for the Applicants: Ms J Abouaf, Blake Dawson, solicitors

Counsel for the Applicants: Mr J Svehla

Solicitor for the 1st Respondent: Mr A Markus, AGS

Solicitor for the 2nd Respondent: Mr E Neumann, Eddy Neumann Lawyers

Counsel for the 2nd Respondent: Mr J McCarthy QC and Mr J Kildea