Five tips for chairing tricky meetings

This factsheet provides five tips for chairing tricky meetings.

The Chairperson is responsible for allowing a reasonable opportunity for the members at an AGM to ask questions or make comments about the management of the corporation. It is an offence not to do so. The Chairperson also is the public face of the corporation, so assists with maintaining the corporation’s values and upholding its reputation.

In a meeting, the Chairperson needs to keep the meeting on track so that decisions are made properly and fairly. Where lots of people want to have a say and topics can be emotive, this can be very difficult.

We have facilitated several tricky meetings in our collective experience, so we’ve summarised our five best tips.

The factsheet is available here.

Role and responsibilities in Prescribed Body Corporates (PBCs)

This factsheet explains the roles of people in a PBC.

If a native title claim is successful, the native title holders must nominate an Aboriginal corporation to hold their native title. This is called a prescribed body corporate, or a PBC.

There are many people involved in a PBC, including native title holders, members, directors and in some circumstances a Chief Executive Officer.

It is important that the roles and responsibilities of these people are understood.

The factsheet is available here.

Future Acts

This factsheet explains future acts.

A future act is a proposal to do something on land or waters that affects native title rights and interests. Examples of future acts include mining tenements, public infrastructure, water licences, and the compulsory acquisition of land.

The Native Title Act sets out the rights that a native title party has when a future act is proposed. These are called “procedural rights” and depending on the type of future act being proposed, can include: 

  • The right to be notified
  • The right to comment
  • The right to be consulted
  • The right to object, or
  • The right to negotiate.

Under the Native Title Act, a native title party does not have the right to veto a future act from being done. The highest procedural right is the right to negotiate an agreement about the future act.

The factsheet is available here.

Incorporating a Prescribed Body Corporate (PBC)

This factsheet explains the process to incorporate a PBC.

If a native title claim is successful, the native title holders must nominate an Aboriginal corporation to hold their native title. This is called a prescribed body corporate, or a PBC. To do this, the native title holders ask the Federal Court to determine that the Aboriginal corporation they nominated should be the PBC for the native title determination. This happens at the same time as the native title determination, or within a period of time allowed by the Court afterwards.

If the claim group does not nominate an Aboriginal corporation within the time allowed by the Court, the Indigenous Land and Sea Corporation (ILSC) may become the default PBC. If the ILSC becomes the default PBC, then the native title holders lose direct control of management of their native title.

Native title holders, members and directors all have a role in the PBC carrying out its functions. The members and directors run the operations of the PBC and have an obligation to speak to the native title holders about native title decisions.
Once the PBC is nominated it becomes the job of the PBC to deal with native title, not the claim group. The PBC is the contact point for people who want to do something on the native title area.

The factsheet is available here.

2021 Year in Review: Native Title law and policy

Statistics (as at October 2021)

  • 162 outstanding native title claims
  • 14 current native title compensation claims
  • 1 active revised native title determination application
  • 539 determinations of native title, with 444 that native title exists.
  • act in accordance with the law; and
  • ensure their directors act professionally, responsibly and plan for the future.

Amendments to the Native Title Act 1993 (Cth) and Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth)

The Native Title Legislation Amendment Act 2021 (Cth) (the Amendment Act) came into effect on 25 March 2021.  The Amendment Act made amendments to the Native Title Act 1993 (Cth) (NTA) and the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act). 

The aim of the amendments are to:

  • give native title claim groups greater flexibility to set their own internal processes
  • improve agreement-making and the native title claims resolution process, including following a native title determination
  • increase the accountability of prescribed body corporates (PBCs)

The Amendment Act was also in part a response to the decision of McGlade v Native Title Registrar ((2017) 251 FCR 172) and has the effect of validating Section 31 Deeds that may have been affected by that decision.  

As a result of the amendments, parties to Section 31 Deeds are now required to notify the National Native Title Tribunal (NNTT) about any ancillary agreements, although there is no requirement for a copy of the ancillary agreement itself to be provided.  The NNTT is also required to create a register to Section 31 Deeds, including a description of the agreement area, the parties and their contact details, the term of the agreement and whether or not there is an ancillary agreement.

Changes were also made in relation to historical extinguishment in ‘park areas’, defined in s 47C(3) as an area set aside or over which an interest is granted under a law of the Commonwealth or a State or Territory for the purpose of preserving the natural environment of the area.  The extinguishment of native title by the creation of the park area, and from any prior interests, is to be disregarded.

The amendments to the CATSI Act include a number of important changes for the management of Prescribed Body Corporate (PBC) entities.  These include:

  • Changes to the membership provisions to ensure that membership reflects the terms of the native title determination and so that refusing or cancelling a membership in a way that disadvantages a section of the native title group is prevented, and establishing a dispute resolution process
  • Changes to allow the NNTT to assist PBCs and common law native title holders to reach agreement on native title issues
  • Including a new ground for the Office of the Registrar of Indigenous Corporations to appoint a special administrator where there is a serious failure by a PBC to comply with its legislative obligations


High procedural standard for compensation applications

The Federal Court of Australia delivered decisions in two compensation applications on 11 March 2021 (Saunders on behalf of the Bigambul People v Queensland (No 2) [2021] FCA 190; Wharton on behalf of the Kooma People v Queensland (No 2) [2021] FCA 191).  These decisions have a significant impact on the preparation of future claims for compensation under the NTA.

Justice Rangiah struck out both claims for failing to fully identify each compensable act.  The applicants had included in their compensation application form that details of the compensable acts would be provided later, following the provision of relevant tenure material by the State. 

The Court took a strict approach to the requirements of a compensation application, finding that the application must specify the acts said to extinguish or impair native title rights and interests, for which the claim for compensation is based at the time of bringing the application.  This is so affected third parties can be duly notified and given the opportunity to understand how their interests may be affected by any determination of compensation.

The Court also found that the compensation application could not be subsequently amended to include tenure information provided by the State following an assessment of the relevant acts, because to do so would be contrary to s 64(1) of the NTA.  This section provides that a native title application cannot be amended to include areas of land or waters that were not part of the initial application. 

These decisions followed the High Court’s first decision on compensation under the NTA (Northern Territory v Griffiths (2019) 364 ALR 208).  In that decision, the High Court stated that the first step in the process of assessing compensation is to identify the compensable acts, then to identify the nature of the relevant traditional laws and customs, and then to assess the nature of the loss caused by the compensable acts. 

As a result of these decisions, claim groups must ensure that an application for compensation under the NTA sets out comprehensive detail about each act said to give rise to an entitlement to compensation.  Claimants cannot rely on the resources and expertise of the State in providing tenure information after the claim has been lodged. 

Both decisions have been appealed to the Full Court of the Federal Court.


Native Title Compensation Communique – Native Title Ministers’ Meeting

Ministers associated with and responsible for native title, from the Commonwealth, state, and territory governments, convened formally in October 2021. They met to discuss current native title issues, making the commitment to meet annually to ensure the progression of these issues.

The Ministers recognised the need for continuous collaboration on native title issues, noting the significance of native title moving towards a ‘post-determination’ landscape, with a greater focus on self-determination and supporting native title holders in managing their native title rights, and on the resolution of native title compensation.

The Ministers acknowledged the upcoming 30-year anniversary of the Mabo decision in June 2022, discussing how the native title system has progressed since that time. The Ministers noted also that native title has been determined over 41 percent of Australia’s landmass.

It was also observed that promoting reconciliation with Aboriginal and Torres Strait Islander peoples involves the prompt resolution of native title compensation liability. This also advances the support of the economic empowerment of Aboriginal and Torres Strait Islander people, encouraging their social, environment and cultural wellbeing.

With this consideration, the Ministers endorsed the National Guiding Principles for Native Title Compensation Agreement Making, with formal endorsement to follow. Whilst these principles are not binding, they confirm the support of all governments, using their best efforts to settle native title compensation matters through negotiation and agreement processes, rather than litigation. The supporting principles include:

  • Good faith negotiations
  • Consideration of the aspirations of native title parties; and
  • Consistency within and across jurisdictions in assessing, valuing, and resolving native title compensation.

The Ministers further approved the work of the Native Title Senior Officers Meeting – Compensation Working Group (Senior Officers Meeting), in creating these principles. They have endorsed the collaborative work of the group and encouraged the continuous work in sharing consistent approaches across all Australian jurisdictions. The Ministers called on the Senior Officers Meeting develop options that promote the most effective settlement of native title compensation claims, including the deliberation of funding arrangements to encourage the settlement of native title compensation claims, and to offer advice to ministers outlining options to improve funding availability to RNTBCs.

 

Juukan Gorge – Interim report

The destruction of a 46,000-year-old significant cultural site by Rio Tinto at Juukan Gorge in May 2020 was a terrible loss for the Puutu Kunti Kurrama and Pinikura peoples (PKKP) of the Pilbara region in Western Australia.  The Joint Standing Committee on Northern Australia released their interim report on 9 December 2020, titled Never Again: Inquiry into the destruction of 46,000 year old caves at the Juukan Gorge in the Pilbara region of Western Australia

The terms of reference for this inquiry are broad reaching and include the effectiveness of State and Commonwealth cultural heritage legislation, how these laws might be improved to strengthen protection of cultural sites, and any other related matters.

The recommendations of the Interim Report include overhauling the Aboriginal Heritage Act 1972 (WA) to strengthen the legislation and allow Indigenous groups to have greater say in the decision-making about culturally significant sites and for the Commonwealth to play a greater role in ensuring that the standards of heritage protection are met nationally and reviewing the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth).

The final report was published on 18 October 2021.

 

Juukan Gorge – Final Report

The parliamentary inquiry into the destruction of the Juukan Gorge rock shelters has recommended new laws to protect thousands of Aboriginal sacred sites across the Country. The inquiry found the Juukan Gorge disaster could happen again because the legislation passed to protect cultural heritage has actually contributed to damage and destruction of it. The inquiry said that the actions of Rio Tinto were “inexcusable and an affront, not only to the PKKP but to all Australians”. The PKKP have also said that no amount of compensation will ever repay the hurt caused by the blast.

The Joint Standing Committee on Northern Australia made eight recommendations to protect heritage, including new laws for cultural heritage protection are to be developed with First Nations people. The committee has also recommended that the Commonwealth Government should consider mapping cultural heritage sites across the country, including sites that have already been destroyed. The report also recommended secret sites and objects should be hidden at the discretion of traditional owners.

The report said the Commonwealth should overrule decisions made under “inadequate” state or territory laws that could destroy sites of great cultural significance to Aboriginal and Torres Strait Islander people.

The committee also recommended changes to PBCs. The report has strongly recommended a new independent fund should be established for PBCs, but they need to be required to be more transparent

“The Committee heard concerning reports that some PBCs are not transparent in their decision-making with respect to their local community, resulting in decisions being taken to allow the destruction of cultural heritage sites.”

For further information, the full report is available at: https://parlinfo.aph.gov.au/

 

Native Title Report 2021

The Aboriginal and Torres Strait Islander Social Justice Commissioner, June Oscar AO, is developing the Native Title Report for 2021. This report will be focussed on women’s voices and their stories about experiences in the native title system. The report is to be tabled in Federal Parliament and will inform the Government in its native title reform agenda as how to promote advocates for change in the native title sector.

The Social Justice Commissioner wishes to inform the report through:

  • Aboriginal and Torres Strait Islander women with experience in the native title system, for example, those who are (or have been) native title claimants or holders, and those who are board members of PBCs, NTRBs and other Service Providers
  • people working in the native title space, including professionals with native title expertise, such as lawyers, anthropologists, heritage experts, archaeologists, genealogy experts, academics, etc.

The Social Justice Commissioner wants to hear about experiences of the native title system, not limited to:

  • experiences of the processes within the native title system
  • the way the native title system has (and has not) worked to deliver on the expectations of communities, and to deliver benefits to Aboriginal and Torres Strait Islander peoples
  • the ways that communities have addressed the challenges presented by native title and
  • Aboriginal and Torres Strait Islander women’s hopes and plans for the future of native title, including what needs to change and what that change should look like.

The Aboriginal and Torres Strait Islander Social Justice Commissioner will also be doing a small number of in-depth interviews with the women who have had vast experience in the native title system.

For more information on the survey, and to enter a submission or the survey, visit https://humanrights.gov.au/ 

 

South Australia – Draft Aboriginal Representative Body Bill

The South Australian government has chosen not to pursue the treaty-making process which had been commenced by the previous state government. Instead, the state government has focussed on establishing a legislated Aboriginal voice to the state parliament.

To this end, the South Australian Commissioner for Aboriginal Engagement has released the draft Aboriginal Representative Body Bill 2021 (the Draft Bill). The purpose of the Draft Bill is to provide Aboriginal South Australians with a voice to be heard by the state parliament, cabinet, authorities and other organisations.

To do this, the Draft Bill establishes an Aboriginal Representative Body (the Body), whose functions will include:

  • to ascertain the views of Aboriginal people on matters that affect them;
  • to provide advice on matters of state, regional or local significance to Aboriginal people’s social, spiritual and economic wellbeing; and
  • to provide advice to government on processes, policies and programs affecting Aboriginal persons.

The Body will comprise of thirteen Body members. Five of these members will be elected by Aboriginal South Australians, and will represent Aboriginal South Australians based off of five electoral wards across the state. One member will be the Commissioner for Aboriginal Engagement. The other 7 Body members will be elected directly by the state governor, and will include two seats reserved for a Maralinga Tjurutja representative and APY representative.

 

South Australian Aboriginal Governance Inquiry

In early 2021, the South Australian Parliament approved a formal inquiry into the governance of Aboriginal Community Controlled Organisations, following a campaign for Aboriginal Community members, and a request from Premier Steven Marshall, who was driven by “mounting concerns within the SA Aboriginal community about poor governance and alleged corruption.”

The inquiry is to review the accountability, cultural authority, financial obligations, and transparency of these organisations, and will be conducted by the Aboriginal Lands Parliamentary Standing Committee.

Tabled in Parliament, the interim report provided that while the committee heard from 25 witnesses and 46 written submissions, the ‘bulk’ of the evidence was kept confidential. MLC Terry Stephens, chairman of the committee, wrote “A consistent theme from these submitters was that they would fear retribution from members in their communities if they spoke publicly about their concerns regarding individual Aboriginal corporations.” This was due to the number of written submissions sent anonymously to the true governance of these corporations. The committee also heard from several concerned Elders about the behaviour of these Aboriginal Corporations.

Mark Koolmatrie, a Ramindgjeri Elder, calls for a royal commission or judicial inquiry into the native title regime. In his submission, Mr Koolmatrie wrote that he was “caught out by scammers and toxic people who have come with what looked like good intentions for our people but in actual fact there was a motive of self-gain.” The interim report has found much of the same across many South Australian communities.

The committee has so far made nine recommendations to assist in improving the governance processes of Aboriginal corporations. This includes reviewing and amending South Australia’s trustee legislation to mandate that native title trusts produce annual financial statements and hold yearly meetings with beneficiaries, and that native title holders should be given access to management and expenditure records without having to apply through the Supreme Court.

Other recommendations include establishing a Commonwealth Ombudsman for Aboriginal Corporations, increasing funding to the South Australian Consumer and Business Services to provide governance training to Aboriginal community-controlled organisations, and having the Law Society of SA establish a directory of “honorary advisers” who are willing to give Aboriginal organisations pro bono governance advice.

 

Five recent native title decisions

 

Croft on behalf of the Barngarla Native Title Claim Group v State of South Australia (Port Augusta Proceeding) (No 5) [2021] FCA 1132.

Following their Native Title determination, spanning a significant area of the  Eyre Peninsula  region from Whyalla to Port Lincoln in 2016, the Barngarla people sought to resolve the remainder of their initial native over the Port Augusta township.

After a quarter of a century, and one of Australia’s longest running native title claims, in September 2021 Charlesworth J delivered a positive outcome to the Barngarla people, recognising their rights to the land of Port Augusta. This claim follows one previously struck out in April 2019, and one previously made on behalf of the Nukunu People, which was resolved through successful mediation between the groups. The agreement reached between the Barngarla and Nukunu was recognised by the Court as commendable.

Her Honour’s decision was based around the significance of the Barngarla people, acknowledging the anthropological reports provided to the State and Dreaming stories which permeate from the area. Those of significance including:

  • Wilyaru story which travels along the Spencer Gulf from the region of Whyalla to Port Augusta and through to Tent Hill
  • The Seven Sisters story travels through Lake Umeerwarra; and
  • Chalk Hill and a women’s site near the Port Augusta Hospital.

Charlesworth J in her determination also referred to the traditional laws and customs of the Barngarla people, noting their “unique connection” to the land and surrounding waters. This was a significant decision for the Barngarla Elders, many of whom did not live to see the determination.

The findings of the Court also noted that the determination does not create any new rights or interests for the Barngarla people, but rather reflects the recognised rights and interests as they exist in the present day, and as they did under traditional law before sovereignty.

 

AC (Deceased) v Western Australia [2021] FCA 735

Facts:

In AC, the State sought summary dismissal of the applicant’s native title determination application. The applicants in questions were the Noongar people, who have previously been involved in several native title claims, including the Whadjuk People.

In 2013, the applicant had lodged an amended determination application over a part of Southwest of Western Australia that almost entirely overlapped with the Settlement area. The applicant had been in negotiations of various Indigenous Land Use Agreements (ILUA), however had not consented to a dismissal of their native title claim.

The State acknowledged that, prior to signing the ILUAs, there was ‘reasonable prospect’ of the applicant successfully prosecuting a native title determination over the claimed area. However, the State argued that because of the extinguishment of native title under the relevant ILUAs, the applicants now had no reasonable expectation of success to their determination.

The applicants contended that there was no proper authorisation of the ILUAs because the members of the applicant constituted a separate subgroup, different from those who engaged in the negotiations and who consented to the ILUAs.

Decision:

The Court found that the objections to the ILUAs, including by applicant group members, had been previously considered by the Court, and that the opportunity of seeking judicial review of the registration of those ILUAs had now passed.  The registration of the six ILUAs had extinguished all native title claims over the area they covered, to replace the benefits provided under the Southwest Settlement. Consent of the ILUAs therefore also encompassed consenting to dismiss all ongoing native title claims over the area covered by such ILUAs, indicating that the applicant’s claim no longer had any reasonable expectation of success in achieving a native title determination.

 

Rockland on behalf of the Waanyi People v State of Queensland [2021] FCA 1139

Facts:

On October 17 2018, Gary Rockland, Lloyd O’Keefe, Ada Walden and Terence Geroge on behalf of the Waanyi People filed an application for the determination of native title, with the determination area commencing approximately 19km northwest of Doomadgee, adjoining the Queensland – Northern Territory border. This new determination area is adjoining to the recognised native title of the previous Waanyi determination in 2010.

Through consultation with the State of Queensland, the Waanyi people sought to recognise some of the non-exclusive native title rights in a form different to that recognised in their first determination. This claim was proposed as an agreement under section 87 of the Native Title Act.  

Decision:

Justice Burley found that, from the evidence used in their first determination, the Waanyi people have successfully met the requirements of the section 87 agreement. In addition to the determination area itself, the Court recognised non-exclusive native title rights to:

  • Access, to be present on and to traverse the area
  • Hunt, finish and gather on the area,
  • Take natural resources from the area,
  • Live on, to camp and to erect shelters and other structures
  • Light fires on the area for domestic purposes
  • Conduct religious, spiritual, and ceremonial activities
  • Be buried on, and bury Native title Holders on the area
  • Share or exchange natural resources from the area

Barley J notes his admiration for the Waanyi people for their persistence and determination, particularly considering the obstacles faced by many Aboriginal people and their communities.

 

Stuart v State of South Australia (No 3) [2021] FCA 230

Facts:

In Stuart v State of South Australia (Oodnadatta Common Overlap Proceeding) [2019] FCA 1282 (15 August 2019) the Court heard an application for orders to consider the cultural and customary concerns of claimant groups regarding the evidence in proceedings for the determination of two overlapping native title claims. One of the claimant groups (the Walka Wani People) sought a range of orders the effect of which would preclude any Aboriginal man who has not been initiated into the relevant Men’s Law. The other claimant group (the Arabana People) and the State objected to aspects of the orders, namely the limitation with respect to the Aboriginal men who may hear or be informed of the evidence.

Following this proceeding, the Arabana people have brought forth another claim to determination over a triangular area south of Maree. In order to establish native title rights, the Arabana people must meet the requirements under section 87 of the NTA.

The ethnographic evidence placed the claim area in Kuyani country at the time of sovereignty. However, credible basis found that the Arabana and Kuyani are members of a wider ‘Lakes Group’ which share customs, laws, and story times. A significant and well-remembered event of the last remaining Kuyani elder handing ceremonial object to an Arabana elder was considered a ‘stark illustration’ of the history of the Lakes Group. There was a joint submission and the Arabana were successful over the Kuyani people in establishing their native title rights and interests.

Decision:

Justice Mansfield found that, together with the determination made in a wider historical context, there was an expression of recognition of the Arabana rights and interests over their land. His Honour was satisfied that it is appropriate to make a determination over this land in the terms sought by the Arabana people and the State.

 

Bandjalang People No 3 v Attorney-General of New South Wales [2021] FCA 386

Facts:

On 24 March 2016, the Bandjalang people made a native title determination application in relation to several parcels of land located on the North Coast of NSW. This follows a larger claim made by the same applicants in 2013 (Bandjalang People No 1 and No 2 v Attorney-General of New South Wales [2013] FCA 1278). These parcels of land totalled 7.2 square kilometres, with the area being of significance to the Bandjalang men, who sill have connection to their country today. The Goanna Headland, near Evans Head was a site of particular significance in this claim.

Decision:

The Court considered whether the site of the old public school at Bora Ridge was captured by s 47A of the NTA with the legal consequence that the extinguishment of native title rights by the freehold title could be disregarded. This site had been held in freehold by a bank, and later transferred to the Bogal Land Council. This was a place where male elders would introduce younger boys to undertake initiation.

The Court held that it did fall within s 47A based on the transfer to the land council and the agreement of the parties.

Justice Rares held that the proposed orders complied with the requirements of ss 94A and 225 of the Native Title Act. The nonexclusive rights granted were the right to:

  • hunt
  • fish and gather resources
  • take and use resources,
  • access and camp
  • conduct ceremonies
  • teach the attributes of places and areas of importance
  • access and maintain sites of significance to protect them from physical harm.

 

Other Treaty/Reconciliation Progress

 

Tasmania – Truth-telling the path to reconciliation

The former Governor of Tasmania, Kate Warner, and law professor Tim McCormack have been chosen by the State government to lead talks with the state’s Aboriginal community in finding a path to reconciliation and implement a treaty. Since June 2021, they have travelled across Tasmania to listen to different Aboriginal groups about what they would like implemented in a treaty. There have been approximately 50 meetings in total, some being gatherings of large communities and other with family groups or individuals. Professor Warner has stated an important element of this treaty will be its emphasis on truth-telling.

The chairman of the Tasmanian Aboriginal land Council, Michael Mansell, said that truth-telling will assist in educating the people of Tasmania of the wrongs of the past.

The meetings have heard reoccurring themes about what the treaty should contain, including compensation, Parliament representation, and the sharing of resources.

However, developing this treaty is unlikely to be an easy process. The issue of identity has been raised at almost all of the treaty meetings across the state. Mr Mansell has noted that up until recently only Aboriginal people could determine who was Aboriginal:

“They took that away from us and the numbers of Aboriginal people swelled, quadrupled, because the Tasmanian government accepted that anyone who signs a document and says, ‘well I believe I am Aboriginal’, is in.”

In the 2016 census there were 23,572 Aboriginal people in Tasmania, just 4.6 percent of the population.

Professor McCormack said the issue of identity was a highly contested topic that would need to be dealt with as part of a treaty-making process.

 

Victoria – Truth and Justice Process

The Yoo-rrook Justice Commission is currently investigating historical and ongoing injustices committed against Aboriginal Victorians in terms of their social, political, and economic lives.

Aboriginal Victorians have called for truth-telling to be an essential part to the state’s treaty-making process. In June 2020, the First Peoples’ Assembly of Victoria (Assembly) passed a resolution requesting commitment from the State to establish a truth and justice process. The Victorian Government responded in July 2020, with a commitment to working with the Assembly to formally establish this process. A ‘truth commission’ is a ‘formal and legitimate process’ to ‘establish a process’. Creating a formal truth-telling process will support reconciliation for Aboriginal Victorian communities.

For generations Aboriginal Victorians have consistently requested consecutive Governments to establish a formal truth-telling body. After months of work in partnership with the First Peoples’ Assembly of Victoria, the Victorian Government has established the Yoo-rrook Justice Commission as Australia’s first formal truth-telling process.

On 12 May 2021, the Governor of Victoria signed the letters patent, to establish the Yoo-rrook Justice Commission as a Royal Commission.

Yoo-rrook is the Wemba Wemba / Wamba Wamba word for ‘truth’.

The Commission will operate independently from government and is different to any other Royal Commission or inquiry undertaken in Australia, due to its truth-telling purpose.

Its work promises to bring about real change through:

  • facilitating truth-telling and healing
  • educating the wider Victorian community
  • developing recommendations for institutional and legal reform.

The Commission will provide an interim report to the Victorian Government by 30 June 2022 and a final report by 30 June 2024.

 

Queensland – Path to Treaty Progress in Cairns

Queensland’s Path to Treaty is taking further steps in the treaty-making process with its First Nations people. In April 2021 the Treaty Advancement Committee met in Cairns to continue this process. Co-Chair Dr Jackie Huggins and Committee members Dr Josephine Bourne, Professor Michael Lavarch and Dr Sallyanne Atkinson met with community members in Cairns to consider the outcomes of the Path to Treaty Report and discuss the progression towards Treaty in Queensland.

Background

The Path to Treaty journey so far:

  • July 2019 – Launch of Tracks to Treaty Statement of Commitment
  • September-December 2019 – Eminent Panel and Treaty Working Group led state-wide consultation
  • February 2020 – Eminent Panel and Treaty Working Group report and recommendations delivered to Queensland Government
  • May 2020 – Queensland Government obtains supplementary advice from the Eminent Panel due to COVID-19
  • August 2020 – Queensland Government Treaty Statement of Commitment and response
  • February 2021 – Appointment of the Treaty Advancement Committee

Minister for Seniors, Disability Services and Aboriginal and Torres Strait Islander Partnerships, Craig Crawford, has said having members of the Committee in Cairns will raise the outline and process of Queensland’s ongoing Path to Treaty work:

“The Treaty Advancement Committee is in Cairns to continue its important work as they begin consulting on how to implement their recommendations and to reaffirm our government’s commitment to reframe the relationship with Aboriginal and Torres Strait Islander peoples.”

Mr Crawford envisages the treaty process will have a significant role to play in the state’s economic policies. This includes by supporting Aboriginal Queenslanders’ participation in the state’s economy and by helping realise their economic aspirations.

Mr Crawford has gone on to say that there is significant public interest in the Path to Treaty:

“Treaties are a critical tool in promoting reconciliation and setting the foundation for a new and just relationship – one that acknowledges the ongoing disadvantage that Aboriginal and Torres Strait Islander peoples experience and provides a platform for justice, equality and opportunity.”

The Treaty Advancement Committee will report to government on options in late 2021.

How healthy is your native title corporation?

Native title corporations hold, manage, and protect recognised native title rights and interests.  We have developed a checklist to see how healthy your corporation is.

 

Native title corporations should:

  • be managed in a way that is transparent and promotes accountability;
  • act in accordance with the law; and
  • ensure their directors act professionally, responsibly and plan for the future.

MPS Law has worked with native title corporations (or ‘RNTBCs’) and Aboriginal and Torres Strait Islander corporations across Australia and has developed a checklist to assist you in determining how healthy your corporation is.  We encourage you to read this document in conjunction with our heritage survey checklist, native title benefits checklist, RNTBC AGM checklist and template letter agreement for heritage surveys in native title land.

The checklist is available here.

Note: This document is intended as a guide only to assist directors and members in ensuring their corporation is well managed.  This does not constitute legal advice.  The issues and questions set out are of a general nature and may not reflect your specific circumstances.  There may be additional and important issues that should be considered when evaluating the actions of the corporation.  If you or your organisation has a legal problem you should obtain professional advice from a legal practitioner.

Checklist for an AGM of a Registered Native Title Body Corporate

This checklist is to help RNTBCs plan and hold Annual General Meetings.

Registered Native Title Body Corporates are required to hold an Annual General Meeting before December each year. Procedurally, these meetings are held to ensure that RNTBC members have an opportunity to comment, make decisions and elect directors.

Practically, these meetings are a key opportunity for community to hold the RNTBC accountable. These meetings provide community with a platform to make key decisions which effect their interests and enjoyment of country.

You can view the checklist here.

 

Note: This document is intended as a guide only to assist with the facilitation of RNTBC AGMs in accordance with the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). This does not constitute legal advice. The issues and questions set out are of a general nature and may not reflect your specific circumstances. There may be additional and important considerations that should be taken into account in your specific circumstances, depending on the requirements of your corporation and its rule book. If you or your organisation has a legal problem, you should obtain professional advice from a legal practitioner.

Four quick tips for effective drafting

Effective drafting will help you to write clearly and strengthen your position when exchanging written documents. This article provides four tips for effective drafting.

1.     An intelligent start

Before you start writing, we recommend ‘an intelligent start’ by asking yourself four questions:

  1. What is my goal?
  2. How important is my goal?
  3. How will my goal be received by the reader?
  4. Should I write this at all?

This will assist you to organise your thoughts, save time and determine whether or not you need to write something or if it is better to wait, or, pick up the mobile and call someone to discuss.

2.     Brainstorm to organise thoughts and language

After brainstorming as many thoughts as possible, sort through your thoughts and edit your ideas, ensuring that you get to your stated goal. It may cause you to revisit your goal. We recommend grouping your thoughts into key themes, which may then form headings for each section of your document. Re-organise your thoughts so that each section will make as much sense as possible to the reader, logically flowing to each key theme.

3.     Write a knock-out lead sentence

You need to get to the point. Once you have sorted your sections using headings, take the time to draft a clear lead sentence. Give the reader the answer they are looking for, or make the point you want to make, without requiring the reader to sift through detail.

4.     Keep it simple

Try not to over-complicate your message and always use plain English. Avoid words and terms that aren’t used in everyday language and keep sentences short. Less is more. As best as you can, try to avoid emotive language – although it can add passion, it tends to cause your key messages to be lost. Emotive language will likely make it harder for you to achieve your goal through writing.

For more information, contact Barbara Kekes (barbara@mpslaw.com.au) or Michael Pagsanjan (michael@mpslaw.com.au).

The golden rules for good contracts and our healthy contracts checklist

This article provides a summary of the golden rules for good contracts, and should be read together with our Healthy Contract Checklist available here. We have also prepared a template consultancy agreement, designed for Prescribed Body Corporates (or Registered Native Title Body Corporates) when engaging consultant anthropologists. The template consultancy agreement is available here. 

 

General commentary

The golden rule for agreements is that terms should be capable of clear interpretation as to their meanings in an ordinary and natural sense of the word (or words) in the context of the clause in which they appear. Words or noun phrases that have special meaning should be defined in a dictionary to the agreement. Are there any terms intended to have a meaning which is specific to how the word is used by a particular trade or group of persons? 

To ensure clarity and certainty of terms within the agreement, consideration should be given to syntactic ambiguity.  Do any words have multiple ordinary meanings which are affected by syntax or context? Are there any phrases which describe a quality of continuous variation and which may require assessment of whether a given set of circumstances are within or outside the contractual stipulation – for example, although day and night are antonyms, there a range of graduations in the transition from day to night, such that it is difficult to say where one stops and the other begins.

Does the contract define ‘rules’ for how to interpret it? For example, it is common for clauses within the agreement to clarify what a particular terms mean by identifying what is “included” within the meaning of that term.  A question then arises whether if what is listed as being “included” is exhaustive (nothing else is included) or if other things that fall within the natural meaning of the term (or phrase), in context of the particular contract, are also included.  Note that where the word “means” is used to define what a word or phrase means, the definition given is exhaustive.

 

Nature of relationship (contractors providing services)

Where applicable, ensure the agreement specifies it is the express intention of the parties that there is not an employment relationship. This is important because if an employment relationship exists, the contracting party has obligations under the National Employment Standards and employment legislation.

Remember that even where such a relationship is specifically excluded by words within the agreement, courts will examine the substance of the agreement and the relationship between the parties outside of the contract.  Care should be taken to clarify matters such as, who provides tools and equipment, who is responsible for defects in the work performed, who has control over hours, time and place of work, whether subcontractors can be used, and whether the contractor can undertake other work or engage in other business activities.

 

Restraint of trade and non-compete (contractors)

Where applicable, consideration should also be given to risk for the business if the other party works with a rival competitor during the term of the agreement, or within a specified period of time after the agreement ends.  Similarly, the business may also need to ensure that the contractor does not ‘poach’ clients or employees, interfere with the business or engage in a competing business.

These kinds of clauses require careful drafting. If a restriction is too broad it may be unenforceable or it may indicate to a court that in substance, the parties are in an employment relationship.

Where the agreement is to engage a contractor, any clause that attempts to prevent the contractor from ‘engaging in’ or working for a competing business should be considered carefully.  Generally, a contractor is free to pick and choose who they work for. If there is a requirement that the contractor works exclusively for one party, this may impact how a court assesses the contractual relationship.  If the substance of the engagement (which include the written terms of the agreement) is deemed to bring the parties into an employment relationship, the hiring party has obligations and duties under employment law.

 

Agreement to other party’s policies

A contracting party may require that the other party comply with its policies for such things as anti-bribery, human trafficking, conflicts of interest, data protection or safeguarding of vulnerable persons.

The party requesting compliance usually retains discretion to update such documents and the obligations of any updated versions will apply. If the agreement states that the party is required to comply with such documents “as updated from time to time” or words to that effect, consider including a requirement for the requesting party to notify the other party prior to policy change, be consulted on changes that increase the burden of compliance in a material way or to terminate the agreement if there is a material change in policy.

 

Assignment and subcontracting

Consider, is there a need to limit or prevent a party to the agreement from subcontracting or assigning its obligations and rights under the agreement?  Are the risks and consequences of a subcontractor not performing their duties significant?  Remember that where the agreement engages a contractor, limits on the right to subcontract may indicate an employment relationship between the parties.

 

Risk: liability, indemnity and insurance

Scope of parties’ liability

Some agreements attempt to impose obligations and liabilities “jointly and severally” to all parties.  This may happen explicitly, or by referring to parties, a group of entities or persons collectively, and in doing so, create or extend rights and obligations under the contract. Where these clauses are included, consideration should be given to whether this enlarges the parties’ rights and obligations beyond those provided by the operative provisions of the agreement. When interpreting contracts, courts are cautious of attempts to impose secondary liability as an additional safeguard to primary liability of the principal party to whom the obligation (under the agreement) belongs. If such a clause is capable of being applied to the agreement in more than one way, it may be applied in a way that serves its purpose rather than in a way that extends parties’ obligations beyond what is contemplated in the operative clauses of the agreement.

Indemnity clauses

Careful consideration should be given to clauses which seek to limit (or remove) liability for a particular party. Indemnity clauses may limit liability by restricting liability only to certain losses or setting a cap on the level of liability. If it is appropriate to include an indemnity clause, consider if a party should be required to indemnify against other third parties (i.e. subcontractors, agents, consultants).

Indemnity clauses should be considered carefully because they affect who bears risk. Other mechanisms for assigning or managing risk in a contract are to limit the form of damage that is compensable (i.e. to direct losses, not indirect or consequential loss), the quantum of damages payable, or to require the contractor to effect and maintain such insurance policies as are appropriate for the nature of the work to be performed.

Insurance

Unless specifically required under the agreement, each party is responsible for obtaining their own insurance. Consideration should be given to risks if either or both parties do not have insurance and whether there should be a contractual requirement to effect and maintain specific types of insurance to mitigate the financial impact of those risks.  If insurance is required, what is the scope or coverage of such insurance?

If performance of the agreement carries a high risk, consider including a requirement for the delivering party to effect and maintain insurance.  For example, where the contract involves producing or installing equipment or delivery of a service to third parties, and there is a potential for harm if not delivered or carried out correctly, it may be appropriate to include a requirement for insurance.  If insurance is required, what is the scope or coverage of such insurance?  Public liability insurance should be a minimum. Other insurances may include professional indemnity, workers compensation (if staff are engaged) or personal accident (for sole traders). Will each party bear their own costs or will this be shared?

 

Warranties

A warranty is not a guarantee; it is a mere promise that, if breached, may be enforced by an award for damages.  If a party has made a representation or undertaking about something that relates to performance of their obligations but which is not an essential condition of the agreement, consider if this should be included as a warranty. Warranties may be express or implied, so it is important to clarify whether only warranties stated in the agreement will apply. 

Where the agreement seeks to exclude non-contractual warranties, assess if warranties stated in the agreement are adequate and appropriate. Are there any important assurances or promises that were made about a contracting party’s qualifications, skills or experience? Are there any licenses, consents or permits that must be held or obtained? Are there any regulatory requirements or industry codes of practice that the contractor is expected to abide by?

Typically, the agreement will confirm that the parties have not relied on any representation or warranty, other than as expressly provided in the agreement.  Remember however, that some warranties, such as those under the Australian Consumer Law, cannot be excluded by contract. 

 

Ethical requirements

Where applicable, clauses dealing with relevant ethical issues should be included in supply contracts or contracts that anticipate a supply chain relationship.  These clauses are most suitable where the other party is part of a sector where compliance with ethical norms and standards is proscribed by regulation (such as aged care and the NDIS). For NDIS providers, this may include such things as compliance with the NDIS Practice Standards, respecting participant privacy and dignity, acting on and reporting abuse, neglect, violence and discrimination, and compliance with the NDIS Practice Standards.

 

Ending or suspending a contract

Termination

Ensure the contract does not have terms that give an excessively broad discretion to cancel the contract unilaterally. It is common for there to be key ‘material’ terms, a breach of which allows one party to terminate (with or immediately without notice).  There may also be events which bring the agreement to an end – such as insolvency or bankruptcy.

If there are specific ethical, cultural or other values that are important in the contracting relationship, consider including these as grounds for termination.  For example, if the contractor is convicted of an offence involving dishonesty, or the contractor’s personnel are subject to an adverse finding from a workplace investigation or regulatory inquiry.

Suspension (contract for services)

Typically, if something happens which materially impacts rights and obligations under the agreement, the impacted party has the ability to cancel or suspend delivery of the services.  Ensure that any such terms in the agreement are reasonable – that they only apply to matters which are significant to performance of the agreement. Consider including an option to enable fulfillment of the contract at a later date and any requirements for notice so that the impacted party has time to make alternative arrangements.

Force majeure

The COVID-19 pandemic highlights the importance of making allowances for unforeseen events.  In contractual terms, a ‘force majeure’ clause sets out who bears the risk of loss or damage if the agreement cannot be performed due to circumstances beyond the reasonable control of a party.  These clauses usually provide that neither party has liability or is deemed to be in breach for any delays or failures in performance which result from such circumstances.

For more information, contact Michael Pagsanjan (michael@mpslaw.com.au).

 

Select commentary on the CATSI Act Report

This articles provides a summary of the draft report on the review of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (“the CATSI Act” or “the Act”). The draft report (“the Report”) requests feedback on ideas and proposed changes to the Act.  The following summary provides select commentary in response to the Report.

Background to the review

The Report builds on the work of earlier reviews that were carried out between 2016–2018. For example, an amendment bill incorporating recommendations made in the previous reviews was introduced to Parliament in 2019, however the bill was not passed before Parliament dissolved for the 2019 general election. Concerns were raised that the scope of earlier reviews had been too narrow and there had not been enough consultation. To address these criticisms, the National Indigenous Australians Agency (NIAA) was engaged to carry out a comprehensive review that will consider:

  • whether the CATSI Act is meeting its objects and continues to be desirable as a special measure for the advancement and protection of Indigenous people as set out in the Act’s preamble;
  • whether the functions and powers of the Registrar of Indigenous Corporations are appropriate, effective and adequate; and
  • possible amendments to the CATSI Act to better support the regulation of CATSI corporations.

This review is also considering the consistency and interaction of the CATSI Act with other relevant legislation, including the Corporations Act, Australian Charities and Not-for-profits Commission Act 2012 (Cth) and Native Title Act 1993 (Cth).

The Report incorporates suggestions and ideas received through online surveys, written submissions, consultations with ORIC staff and contractors who undertake examinations and special administrations.  Feedback was requested on proposals and ideas on what should change in the CATSI Act and what issues should be taken into consideration when making such changes.  Relevant feedback will be incorporated into a final report and presented to the Federal Government (Government) in October 2020.

 

Summary of review findings to date

Findings from review so far are that the protections for Aboriginal and Torres Strait Islander people included in the CATSI Act can be strengthened. Respondents to the NIAA’s online survey raised a number of questions that they suggested should be considered as part of the review including:

  • whether the CATSI Act is meeting the needs and expectations of Aboriginal and Torres Strait Islander people;
  • whether the CATSI Act is putting CATSI corporations on an even playing field with companies incorporated under the Corporations Act;
  • whether changes can be made to the regulatory and enforcement powers of the Registrar with particular consideration to the traditions and circumstances of Aboriginal and Torres Strait Islander people;
  • whether the CATSI Act is flexible enough to meet the needs of a whole range of different Aboriginal and Torres Strait Islander corporations; and
  • how can the Registrar and ORIC better support corporations to pursue economic and community development opportunities?
  • How can the Registrar and ORIC further develop the capacity of corporations, including ensuring that directors and members have a sound understanding of their rules as well as those of others.

 

Previous reviews of the CATSI Act

Background on previous reviews of the CATSI Act

In 2016, the Commonwealth Government engaged KPMG to review the CATSI Act and identify opportunities to improve the effectiveness of ORIC and to strengthen the Act.  The KMPG report ‘Regulating Indigenous Corporations’ concluded that there were significant opportunities to enhance ORIC’s contribution to better governance of Indigenous corporations in the future.  The report recommended a technical review of the CATSI Act to look at changes to the legislation that should be made to better align the Act with mainstream corporate regulation.  A comprehensive “technical review” (Technical Review) was completed in 2017 and made 69 recommendations across a broad range of issues (See DLA Piper, Technical Review of the Corporations (Aboriginal and Torres Strait Islander) Act 2006, ORIC, 2017, available from <https://www.oric.gov.au/catsi-review> (‘DLA Technical Review’)). The review also highlighted the difficulty and tension between getting the regulatory balance right so that interest of members and local communities are safeguarded, while also ensuring that regulation does not impose an excessive burden on CATSI corporations.

In December 2018, the Corporations (Aboriginal and Torres Strait Islander) Amendment (Strengthening Governance and Transparency) Bill 2018 was introduced to the Senate (“the Bill”).  The Bill was scrutinised by an internal Government committee who received submissions from stakeholders, many of whom called for greater consultation on the changes.  Despite this, the Committee recommended that the Bill be passed, however the Bill was not passed before Parliament dissolved for the 2019 general election and the Bill lapsed in July 2019.

 

Summary of findings of Technical Review

In late October 2017, the Technical Review of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 report was provided to the Registrar. The Technical Review made 69 recommendations, across a broad range of issues arising from the terms of the review. It also identified a number of themes that emerged from stakeholder consultation including that:

  • Indigenous corporations play a unique role in Indigenous communities and in the provision of services to Indigenous peoples;
  • there is no ‘single’ form of CATSI corporation, and ‘one size does not fit all’;
  • smaller CATSI corporations require additional support, and it is appropriate to reduce the regulatory burden that is imposed upon small CATSI corporations;
  • while CATSI corporations look to the Registrar and ORIC for assistance and support, the autonomy of CATSI corporations requires that regulation is often based upon additional disclosure; and
  • the Registrar can play a greater role with respect to certain matters relating to native title regulation.
  • Supporting corporations

CATSI corporations play an important role in support of Indigenous communities.  The Report acknowledges that this role is very important in remote areas.  Feedback was requested on how the CATSI Act can better support corporations in remote areas, how the Registrar can develop the capacity of corporations and work that should be done to build directors and members understanding of their roles and rights.

Our view is that there needs to be significantly more financial support for Registered Native Title Body Corporates (RNTBCs).  RNTBCs play a critical role in facilitating the native title system and require more support so that they can support communities to realise their aspirations, goals and achieve self-determination.

 

Overview of the Registrar of Aboriginal and Torres Strait Islander Corporations

The Registrar is appointed by Government and is responsible for Office of the Registrar of Indigenous Corporations (ORIC), a Commonwealth Government agency that is responsible for the CATSI Act. The Registrar is responsible for administering the Act; the role of ORIC staff is to assist the Registrar to perform their functions (CATSI Act s 673-1). ORIC staff carry out the day-to-day regulatory work under delegations of authority from the Registrar and Deputy Registrar (CATSI Act ss 668-1 and 673-1).

The Registrar’s powers include the ability to:

  • call Registrar-initiated general meetings and meetings of interested persons (CATSI Act ss 668-1 and 673-1);
  • direct a CATSI corporation to change its name (CATSI Act s 88-5);
  • apply various enforcement powers, including issuing compliance notices, appointing someone to examine a corporation’s books, requiring attendance to answer questions and applying for a warrant to seize books (see Part 10-3 of the CATSI Act);
  • appoint a special administrator (CATSI Act s 490-1);
  • fulfil outstanding obligations of a deregistered CATSI corporation (CATSI Act s 546-30); and
  • Intervene in court proceedings relating to a matter arising under the CATSI Act (CATSI Act s 581-1).
  • Other functions a performed under the CATSI Act to support corporations to:
  • manage their membership bases;
  • establish appropriate corporate structures and consider their corporation size;
  • manage their meeting and reporting obligations; and
  • develop and utilise their rule books (See CATSI Act ss 658-1 and 658-5 setting out the functions and aims of the Registrar. In carrying out those functions and aims, the Registrar supports and regulates corporations by: providing advice in relation to incorporation requirements; training directors, members and key staff on good governance practices; monitoring compliance with CATSI Act requirements; and intervening when needed).

The Registrar also provides factual and procedural advice about registration, rules and operation of the corporation (CATSI Act s 658-1(1)(d)). These functions are intended to help resolve disputes and establish the Registrar as a source of information and advice about the CATSI Act.  The Registrar’s dispute resolution functions also include referring parties to mediation and arbitration and investigating complaints made about corporations (by members or others).

 

Select commentary on some of the proposals

 

Issue 1: RNTBCs report on native title benefits

Neither the CATSI Act nor the PBC Regulations address how native title benefits must be reported and there is no express statutory requirement to keep separate records or report to common law holder beneficiaries about these holdings.

Currently, there is no requirement for Registered Native Title Body Corporates (RNTBCs) to report on native title monies, except where monies are allocated for corporate use (i.e. meeting costs). The report that occurs depends on legal requirements that apply. For example, if it is an ASIC corporation, financial reports must be given to the shareholders (who may be a single corporate member).  For trust structures, joint ventures and commercial enterprises, there may be no or limited requirement to report to native title holders.

The proposal is to establish regulatory requirements for reporting about native title benefits. The Report asks for feedback on whether reporting on native title benefits (including non-cash benefits) is appropriate and if so, whether there should be a threshold amount that triggers the reporting requirement.

More commentary on this proposal is at the end of this article.

The requirement to report on native title benefits may improve clarity and transparency about native title benefits.  The goal of empowering native title holders to participant more actively in the management of benefits is supported. However, it is not clear how the cost of reporting will be met.  We consider that this invites tension and dispute. The requirement for additional reporting to the regulator is not consistent with the principle of self-determination.

 

Issue 2: Change Regulations to include native title benefit decisions as ‘native title decisions’

Under the Native Title (Prescribed Body Corporate) Regulations 1999 (“the Regulations”), the RNTBC must consult and seek consent from native title holders in relation to all native title decisions. The Regulations state that the RNTBC have to invest (or apply) native title monies (held in trust) as directed by the native holders, but do not outline how these directions need to be given. In addition, the PBC regulations do not apply to decisions about native title monies held outside of the RNTBC. Often, this means that requirements for consultation under the Regulations do not apply in relation to benefits held in trusts and other benefit management structures.

Currently, matters involving native title benefits are not covered by the definition of “native title decision”.  The proposal is to amend the PBC regulations so that RNTBCs must consult and seek the consent of common law holders before native title benefits can be invested or otherwise applied.

In many cases, the cost of meetings to bring native title holders together to consider decisions about things that impact or impair native title are borne by project proponents. If the concept of a “native title decision” is extended to cover native title benefits, the costs of those meetings are likely to be borne by the corporation. This has the potential to significantly increase the costs of administering native title benefits.

 

Issue 3: Allowing trusts under the CATSI Act

Regulatory oversight of RNTBC benefit management structures is fragmented. They may be regulated by ASIC, the ACNC, state and territory jurisdictions (for charitable trusts) or have no external regulator, such as for private discretionary trusts.  These arrangements can be costly to establish and maintain.

The Report asks for feedback on the idea of allowing for the creation of trusts under the CATSI Act. In turn, the Registrar could hold a Register of Trust Deeds ensuring accessibility and transparency for members and common law holders and could require regular reporting on trust activity.

ORIC is not a trusts regulator and is not experienced administering or regulating trust structures.  A register of trust deeds gives transparency, however that can be achieved without widening the regulator’s functions.  It is also unclear if existing trust structures would be transitioned to ORIC. If so, we have concerns as to the capacity of ORIC to competently oversee trusts that are subject to varying legal requirements across different jurisdictions.

 

Issue 4: Membership details and application timeframes

Feedback was requested about whether the corporation should be able to determine what kind of contact is acceptable.  For example, should email or phone only be allowed for certain kinds of notices or events? When might a community notice board and social media be acceptable forms of contact?  If alternative forms of contact are accepted, how should the corporation make this decision – through resolution at a general meeting?

It is proposed that alternative contact details do not need to be published on the public register, but that corporations may be required to keep record of alternative contacts information, where provided.

Many people use email and most people have a mobile phone.  Enabling corporations to use other methods such as email or phone to notify members may result in more effective and timely communication.

It is not clear when one method of communication would be required or when different forms of contact might be optional, and whether letters (i.e. meeting notices) would still be required.  If a member provides someone else’s email address, the person who receives a meeting notice via email may think they are invited to attend a members’ meeting.

Currently the public register has details of members’ addresses and other personal information.  The proposal was that this information should be removed if it is in the interests of ensuring safety of a member, or members.

If the removal of personal information is requested by the individual or the corporation, it would be appropriate for the personal information not to be published.  One way to implement this could be for members to “opt out” of the publication of personal information when a person applies for membership, or, when members “sign in” when attending corporation meetings.

Feedback is requested on whether there should be a timeframe for assessing memberships.

The timeframe for assessing memberships should be determined by the corporation.  If a timeframe was set, it could be linked to two cycles of the minimum number of directors’ meetings.  For example, if there is a requirement in the rule book for the directors to meet at least every three months, six months is likely to be reasonable.

 

Issue 5: Membership cancellation and appeals

Feedback was requested on whether a person who has had their application refused should be able to have their membership application presented and considered by the members at a general meeting.

Allowing aggrieved persons, whose membership has been cancelled or refused (on the basis that they are ineligible) to put forward their membership application at a meeting of members may increase politicking and lead to public disputes about an individual’s identity, including public shaming. For many RNTBCs, membership assessments require interpretation of complex laws and customs, which may require the knowledge of elders.  If there is a need for public deliberation about a person’s identity under law and custom, this may breach traditional law and custom. There may be a risk of breaching traditional laws and customs by the imposition of a public deliberation of a person’s identity. That could, in turn, lead to cultural punishments for those in attendance at the meeting.

Grounds for cancelling membership in s 150-25(3) of the CATSI Act include where members are not contactable and unable to contact member at the registered address for period of two years and there has been two or more reasonable attempts to contact member during that period.  The proposal is to reduce period that member must be not contactable for to 12 months.  Feedback was requested on these processes.

For RNTBCs that have members who live in remote locations, contact can be difficult – members in these areas may have limited phone and internet access and may not have fixed addresses.  We consider that 18 or 24 months is an appropriate amount of time and a minimum of three attempts to contact them should be made.

 

Issue 6: “Examinable affairs” and broadening grounds for administration

After completing examination of the “affairs of the corporation” the examiner gives a report to the Registrar. Section 700-1 of the CATSI Act defines “affairs” of the corporation.  Section 453-1 of the CATSI Act sets out the issues that the examiner reports to the Registrar on.  It was proposed to include “irregularity in financial affairs” as one of the issues that can be reported on.

Although it is not explicit that the examiner can report on financial irregularities, in practice any financial irregularity is reported. Note that the definition of “examinable affairs” in s 700-1 of the CATSI Act includes a broad range of matters, which include “profits and other income, receipts, losses, outgoings and expenditure”.  Therefore, we are of the view that the proposed amendment does not impact the substance of what the examiner considers or the content of the examination report in a material way.

To place a corporation in special administration, the Registrar must decide that one of the criteria listed in s 487-5 of the CATSI Act has been met.  Currently, one ground for appointing a special administrator is if the Registrar believes the corporation has traded at a lost for at least six of the last 12 months (CATSI Act s 487-5(1)(a)). In practice, this is difficult to establish, particularly where there is poor record keeping.

It was proposed that the requirement that the corporation must have traded at a loss should be replaced. Instead, a corporation can be placed into special administration when there has been “irregularity” in management of the corporation’s affairs.

The proposal lowers the threshold for special administration from “trading at a loss” to any “irregularity in management of financial affairs”.  “Irregularity in management of financial affairs” is not a term used in accounting standards. If the legislation does not define the criteria or principles that must be applied, the Registrar will have a broad discretion to place a corporation into special administration.

We note that the Act provides a definition for “business affairs” and “affairs” but not financial affairs (CATSI Act ss 694-15, 700-1). It is unclear how the phrase “financial affairs” is to be defined.  Noting that the definition of “examinable affairs” extends to the “business affairs” of connected entities, there is a risk that financial irregularities of connected entities may be grounds for special administration.

In our view, affairs that are examinable (which extend to connected entities) must be distinct from “financial affairs”.

 

Issue 7: Show cause notices

Under the CATSI Act, before placing a corporation into special administration, the Registrar must first issue a “show cause” notice. The purpose of this notice is to give the corporation an opportunity to respond and provide evidence to show why there is good cause that the corporation should not be put into administration.

The requirement to issue a show cause notice where all directors have requested special administration creates an unnecessary step in the process that may negatively impact some corporations that require urgent help.

The Report asks for feedback on whether it is appropriate that there be no “show cause” notice where a majority (most but not all) of the directors made a request to the Registrar asking that the corporation be placed into special administration.

The show cause notice is an important mechanism for making sure the corporation can respond to claims against it.  Removing the requirement for a show cause notice where only a majority have requested may impact on minority directors.  If only a majority of directors have made the request, this suggests there may be a disagreement.  In those circumstances, a show cause notice is appropriate.

 

Issue 8: Presumption of insolvency

To wind up a CATSI Corporation, a court must be satisfied that one of the grounds listed in s 526-5 of the CATSI Act exist.  The proposal was to broaden the criteria for winding up of the corporation to include circumstances where the examiner or special administrator has concluded that the corporation failed to keep adequate financial records.  Feedback was requested on whether this is appropriate, and whether this should apply to records within the last seven years or at any time whatsoever.  We understand that this change has been proposed by ORIC because there are a large number of ‘ghost’ corporations that are inactive but cannot be deregistered.

In our view, although this lowers the threshold for insolvency significantly, the presumption of insolvency is rebuttable with evidence showing that the corporation is able to pay its debts as they fall due in the ordinary course of business.   Also note that the orders to wind up can only be made the court; this helps to safeguard corporations from being wound up involuntarily.

We support this proposal on the basis the presumption applies only where an examiner or special administrator (or other authorised person) has formed an opinion that the corporation failed to keep adequate financial records for the last seven years.

 

Issue 9: Registrar power to call or cancel a meeting

The purpose of the general meeting is to keep members informed of the corporation’s activities and obtain feedback / decisions on major plans or projects.  An annual general meeting must be held once a year, but meetings may be held at other times when there are issues to discuss.  Sometimes, meetings may be delayed or held in a way that means people were not given an opportunity to ask questions or obtain all the information they are entitled to.

The power for the Registrar to require directors to hold a general meeting is subject to the condition that “it is reasonable to do so”.  This means that the Registrar must have a good reason for exercising the power – examples of this might be where members did not have a reasonable opportunity to ask questions of the Board or answers to questions raised by members were not provided at the meeting or in the annual report.

The requirement of reasonableness gives the Registrar wide discretion, which is consistent with the nature of a regulator’s powers. For many RNTBCs, the costs of holding a general meeting are significant and are logistically extremely challenging. We note that s 201-5 of the CATSI Act also allows members to require the directors to call and arrange to hold a general meeting.  It is unclear whether members are expected to first petition the directors for a meeting, or, whether it is intended that members’ can informally request the Registrar to use this power to require directors to hold a meeting.

 

Issue 10: Corporation cancelling or delaying a meeting

Feedback is requested on whether the CATSI Act should be amended to define circumstances in which a meeting can be cancelled (once notice has been sent), and when the meeting be cancelled.

A further proposal is to allow a corporation to notify the Registrar (do not need to request exemption) that an AGM is being delayed by 30 days where there has been death, natural disaster, cultural activity or unavoidable delay but the corporation must not have notified Registrar of extension for more than three years in row.

If the time is extended, directors can issue updated meeting notice within 30 days of original meeting date if there has been a death, natural disaster, cultural activity that has impacted date, time or place of the meeting.

Small corporations can pass a special resolution not to hold AGM for up to three years but directors must not vote on that resolution.

We support this proposal.. Meetings in remote areas involve significant costs.  Flexibility to cancel meetings is important when there are important cultural practices that must be observed and respected.  We consider that one week is a reasonable amount of notice to cancel a scheduled meeting.

 

Issue 11: Wholly owned subsidiaries

The proposal is to change the CATSI Act rules to remove the requirement that a majority of directors must also be members and that directors must be natural persons to make it easier to establish wholly‑owned subsidiaries or joint ventures. Subsection 246-5(3) of the CATSI Act requires that the majority of directors are members and the Revised Explanatory Memorandum to the CATSI Act states that this is to ensure that members’ interests are protected. The proposal will allow a corporation to establish wholly-owned CATSI Act subsidiary (unless rule book does not allow), and, allow a group of corporations to establish a CATSI corporation (similar to a joint venture) where the ‘parent entities’ meet the indigeneity requirement (that a majority of corporate members must be Indigenous).

These issues are discussed further at the end of this article.

Although not immediately relevant to all RNTBCs at this time, we support these changes because they promote greater flexibility in the structures that are allowed to be registered under the CATSI Act.

 

Issue 12: Director remuneration

The proposal is that the annual report to ORIC will include information about corporate structure, such as where the CATSI corporation has “associated” subsidiaries and/or trusts.  Annual reports will also need to include the names of key management personnel (CEO, Chief Financial Officer etc.).

It is also proposed that information about director sitting fees and salary packages (remuneration) of key personnel (including key personnel of entities in the corporate structure) is reported in financial reports that are lodged with the Registrar.  Information about remuneration of individuals will not be publicly available, but de-identified figures what is reasonable for different sectors, industries or areas will be published by ORIC to provide guidance to boards on what is a reasonable.

The requirement for reporting on corporate structures, executive officer salaries and director sitting fees aims to improve transparency for members.

Many RNTBCs do not yet have executive staff positions in its governance structure, but it is likely that members would want information about their salaries reported if executive officers were employed. Currently there is no guidance for boards or members about what a reasonable level of remuneration might be given the corporation’s circumstances and the skills, experience, and performance of the executive in question.  Publishing of de-identified salary information will assist Boards to make informed decisions about salary packages for executive managers.

The Report also identified the apparent inconsistency in the CATSI Act about membership approval for director remuneration.

Our experience is that most RNTBCs seek membership approval for the payment of meeting attendance fees. Indeed, membership approval can be a good indicator of what is ‘reasonable’ in the circumstances. In saying this, readily accessible and publicly available information about CATSI Act director remuneration would be useful to inform reasonableness of remuneration. We consider that a clarification of the relationship between subsections 252-1(2) and 287-1(2) would be helpful.

 

Issue 13: Board composition and independent directors

The Report invites comment on whether there should be legislated board membership and composition controls.

Many RNTBCs already have rules about board composition. However, flexibility is required to adapt and update these rules as expectations and standards change. Indeed, it is consistent with self-determination to allow the corporation to make its own rules about board composition.

The Report also invited comments on whether the CATSI Act should make it easier for corporations to appoint independent directors, and, whether there should be legislated requirements for independent directors for large corporations.

We consider that independent directors can add significant value to the effectiveness of a corporation and is good governance. Independent directors complement the principle of skills-based director appointments. However, the decision for a corporation to have independent directors, and the rules around the necessary qualifications, appointment, and roles of those directors, should be a decision for each corporation.

 

Issue 14: Incorporation of traditional law

The Report invites comment on how the incorporation of laws and traditions into the operation of the corporation would work in practice.

We are aware of several RNTBCs that have attempted to incorporate laws and traditions in its rules in relation to issues like membership. In our experience, this has proved to be very difficult. The incorporation of laws and traditions into the operation of the corporation risks complexity, issues with interpretation and is indicative of the inherent tension between differing legal systems. We consider that the appropriateness of the incorporation, and the extent of the incorporation, will vary significantly. We consider caution should be exercised so as not to inadvertently undermine traditional laws and traditions by attempting to codify and incorporate a traditional legal system that is different to the Australian legal system.

 

Issue 15: Arbitration of RNTBC disputes

The Report invited comment on whether a new arbitration function would assist in resolving RNTBC disputes.

We consider there is a risk that arbitration may be misused by disgruntled members. Arbitration may also be inconsistent with self-determination by the imposition of a decision that was not reached by the corporation and members on their own accord.  On the other hand, it may promote resolution of disputes. In any event, we consider that it may be preferable to utilise dispute resolution specialists approved by the Federal Court of Australia on the Federal Court’s list of approved external mediators, who are assessed through a robust and transparent court managed registration process.

 

Further special commentary: Governance and reporting on subsidiaries, executive officers and payments to directors

A wholly owned subsidiary is a corporation or other entity that is controlled by another corporation (the ‘parent’ entity).

Under s 246-5(3) of the CATSI Act, the majority of a corporation’s directors must also be members and a majority of directors must be individuals (natural persons). Consequently, a CATSI corporation could not be established as a subsidiary with only one corporate member unless a class of members is established for individuals who can be directors.  This makes it difficult to establish wholly-owned subsidiaries, particularly where the corporation will be established as a subsidiary with only one corporate member. A way around this is for CATSI corporations to establish subsidiaries by ensuring the majority of directors are members of the subsidiary for the term of their directorship, and the sole corporate member is the only member with voting rights. While effective, this solution imposes unnecessary administrative burden on corporations.

Depending on their size, corporations are required to prepare specific reports within six months of the end of their financial year, unless granted an extension or exemption from the Registrar. Small corporations are required to prepare a general report while large corporations are required to prepare a general report, financial report, audit report and directors’ report.

Where there are complex entity structures, members may be given little information about the structure itself or the business of entities (trusts or other corporations) within the structure.  The Report suggested that consideration needs to given to supporting more flexible corporate structures while also providing transparency to members about these structures.

The proposed changes aim at improving visibility of structures that co-exist with CATSI corporations, by requiring that certain information about subsidiaries and trusts are included in annual reports to ORIC:

  • information about their corporate structure, for example, where the CATSI corporation has associated subsidiaries and/or trusts; and
  • the names of the key management personnel such as the Chief Executive Officer (CEO), Chief Operating Officer and Chief Financial Officer within that structure.
  • In addition, it was also proposed that reports to ORIC include:
  • salary packages of key personnel (of CATSI corporations and subsidiaries), and.
  • directors’ sitting fees.

For further information, contact Michael Pagsanjan (info@mpslaw.com.au) or Michael Pagsanjan (michael@mpslaw.com.au).