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Editors --- "Henry Joseph Kazar v Ross Andrew Duus and Others - Case Summary" [2000] AUIndigLawRpr 33; (2000) 5(4) Australian Indigenous Law Reporter 71

Court and Tribunal decisions - Australia

Henry Joseph Kazar v Ross Andrew Duus and Others

Federal Court of Australia (Merkel J)

30 October 1998

[1998] FCA1378

Aboriginal corporations and associations — whether appointment of an administrator under Aboriginal Councils and Associations Act 1976 (Cth) prevails over voluntary administration under Part 5.3A of the Corporations Law — whether voluntary administrator appointed for an improper purpose.

Facts:

Goolburri Aboriginal Corporation Land Council (Goolburri) was an incorporated association under the Aboriginal Councils and Associations Act 1976 (Cth) (ACAA). The Registrar of Aboriginal Corporations decided that there were grounds for appointing an administrator to Goolburri and, on 18 June 1998, served a notice to Goolburri, pursuant to s 71 of the ACAA, calling upon it to show cause why an administrator should not be appointed to it.

On 20 June 1998 the Governing Committee of Goolburri resolved that it was of the opinion that Goolburri was insolvent or likely to become insolvent, and appointed the applicant, Henry Kazar, a chartered accountant, as administrator pursuant to s 436A of the Corporations Law (CL).

On 3 July 1998, as a result of the failure of Goolburri to show cause pursuant to the s 71 notice, the Registrar appointed the first respondent, Ross Duus, as administrator of Goolburri pursuant to s 71 of the ACAA.

On 29 July 1998, Kazar sought directions from the Court as to the validity of Duus’ appointment and his entitlement to act as an administrator under the ACAA. In a later application in the same proceeding the Registrar, supported by Duus, challenged the validity of Kazar’s appointment and his entitlement to act as administrator under Pt 5.3A of the CL.

Held:

1. Duus’ appointment prevails. As the CL is incorporated into the ACAA through s 62, it only applies subject to the ACAA and only in so far as those provisions are capable of application. In the face of an inconsistency the ACAA prevails. The substantial provisions of Pt 5.3A of the CL relating to the powers and functions of an administrator (s 436A) are not capable of continued application once an administrator is appointed under s 71 of the ACAA because the consequences of administration under the two acts are fundamentally different.

2. Administration under Pt 5.3A of the CL is suspended, not ended, upon the appointment of an administrator by the Registrar. The CL should be read generally, as the purpose of s 62 of the ACAA is to ensure that an Aboriginal association incorporated under the ACAA is to have the benefit of all the provisions of the CL that relate to compromises and arrangements.

3. Kazar was not validly appointed as an administrator of Goolburri pursuant to s 436A of the ACAA as Goolburri’s governing Committee did not form a genuine, bona fide and concluded opinion as to its insolvency.

4. Kazar’s appointment was invalid, void and of no effect because the Governing Committee acted with an improper purpose, as its intentions were to prevent the Registrar from appointing an administrator under s 71 of the ACAA and to maintain control of Goolburri’s affairs. A statutory power is invalid if exercised for an ulterior and improper purpose.