FEDERAL COURT OF AUSTRALIA

Registrar of Aboriginal and Torres Strait Islander Corporations v Ponto

[2012] FCA 1500

FEDERAL COURT OF AUSTRALIA

Registrar of Aboriginal and Torres Strait Islander Corporations v Ponto

[2012] FCA 1500

CORRIGENDUM

1.    In the Reasons for Judgment in [10], in the first sentence, delete “Practicing” and insert in lieu thereof “Practising”.

2.    In the Reasons for Judgment in [56], in the last sentence, delete “180–181” and insert in lieu thereof “180–182”.

3.    In the Reasons for Judgment in [59], in 1(a) of the quote, delete “of” and insert in lieu thereof “or”.

4.    In the Reasons for Judgment in [106], in the first sentence of declaration 1, delete “Island” and insert in lieu thereof “Islander”.

5.    In the Reasons for Judgment in [120], in the first sentence, delete “)” after “[34]” and insert it after “above”.

6.    In the Reasons for Judgment in [125], in the fifth sentence, delete “lead” and insert in lieu thereof “led”.

7.    Delete the Orders and insert in lieu thereof the following:

“THE COURT DECLARES THAT:

1.    In contravention of s 256-10 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the Aboriginal Corporations Act), Mr Simon Ponto, the first respondent, misused his position as a director of the Ngukurr Progress Aboriginal Corporation (the Ngukurr Corporation) by purporting to appoint Mr  Dwarka Dass, the fifth respondent, Chief Executive Officer to gain an advantage for himself and Mr Dwarka Dass.

2.    In contravention of s 256-10 of the Aboriginal Corporations Act, Mr Simon Ponto, the first respondent, misused his position as a director of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to provide internet banking facilities and credit card facilities to himself and Mr  Nelson Hall, the second respondent, for various bank accounts of the Ngukurr Corporation to gain an advantage for himself.

3.    In contravention of s 256-10 of the Aboriginal Corporations Act, Mr Simon Ponto, the first respondent, misused his position as director of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to transfer $3,500 per fortnight from 9 December 2009 from the account of the Ngukurr Corporation titled “Ngukurr Store” to an account in the name of “Dwarka Dass” with the Westpac Banking Corporation Ltd to gain an advantage for Mr Dwarka Dass, the fifth respondent.

4.    In contravention of s 256-10 of the Aboriginal Corporations Act, Mr Dwarka Dass, the fifth respondent, misused his position as an officer of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to provide internet banking facilities and credit card facilities to Mr Simon Ponto, the first respondent, and Mr Nelson Hall, the second respondent, for various bank accounts of the Ngukurr Corporation to gain an advantage for Mr Simon Ponto.

5.    In contravention of s 256-10 of the Aboriginal Corporations Act, Mr Dwarka Dass, the fifth respondent, misused his position as an officer of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to transfer $3,500 per fortnight from 9 December 2009 from the account of the Ngukurr Corporation titled “Ngukurr Store” to an account in the name of “Dwarka Dass” with the Westpac Banking Corporation Ltd to gain an advantage for himself.

THE COURT ORDERS THAT:

1.    Mr Simon Ponto, the first respondent, is disqualified from managing Aboriginal and Torres Strait Islander corporations (as defined in s 16-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth)) for a period of three years.

2.    Mr Dwarka Dass, the fifth respondent, is disqualified from managing Aboriginal and Torres Strait Island corporations (as defined in s 16-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth)) for a period of four years.

3.    The first and fifth respondents pay the applicant’s costs of these proceedings to be agreed or taxed.”

Associate:

Dated:    12 April 2013

IN THE MATTER OF NGUKURR PROGRESS ABORIGINAL CORPORATION

ICN 367

THE COURT ORDERS THAT:

1.    In contravention of s 265-10 of the Corporations (Aboriginal and Torres Strait Island) Act 2006 (Cth) (the Aboriginal Corporations Act), Mr Simon Ponto, the first respondent, misused his position as a director of the Ngukurr Progress Aboriginal Corporation (the Ngukurr Corporation) by purporting to appoint Mr Dwarka Dass, the fifth respondent, Chief Executive Officer to gain an advantage for himself and Mr Dwarka Dass, the fifth respondent.

2.    In contravention of s 265-10 of the Aboriginal Corporations Act, Mr Simon Ponto, the first respondent, misused his position as a director of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to provide internet banking facilities and credit card facilities to himself and Mr Hall for various bank accounts of the Ngukurr Corporation to gain an advantage for himself.

3.    In contravention of s 265-10 of the Aboriginal Corporations Act, Mr Simon Ponto, the first respondent, misused his position as a director of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to transfer $3,500 per fortnight from 9 December 2009 from the account of the Ngukurr Corporation titled “Ngukurr Store” to an account in the name of “Dwarka Dass” with the Westpac Banking Corporation Ltd to gain an advantage for Mr Dass, the fifth respondent.

4.    In contravention of s 265-10 of the Aboriginal Corporations Act, Mr Dwarka Dass, the fifth respondent, misused his position as an officer of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to provide internet banking facilities and credit card facilities to Mr Ponto and Mr Hall for various bank accounts of the Ngukurr Corporation to gain an advantage for Mr Ponto, the first respondent.

5.    In contravention of s 265-10 of the Aboriginal Corporations Act, Mr Dwarka Dass, the fifth respondent, misused his position as a officer of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to transfer $3,500 per fortnight from 9 December 2009 from the account of the Ngukurr Corporation titled “Ngukurr Store” to an account in the name of “Dwarka Dass” with the Westpac Banking Corporation Ltd to gain an advantage for himself.

THE COURT ORDERS THAT:

6.    Mr Simon Ponto, the first respondent, is disqualified from managing Aboriginal and Torres Strait Islander corporations (as defined in s 16-5 of the Corporations (Aboriginal and Torres Strait Island) Act 2006 (Cth)) for a period of three years.

7.    Mr Dwarka Dass, the fifth respondent, is disqualified from managing Aboriginal and Torres Strait Islander corporations (as defined in s 16-5 of the Corporations (Aboriginal and Torres Strait Island) Act 2006 (Cth)) for a period of four years.

8.    The first and fifth respondents pay the applicant’s costs of these proceedings to be agreed or taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE MATTER OF NGUKURR PROGRESS ABORIGINAL CORPORATION

ICN 367

REASONS FOR JUDGMENT

Introduction

1    Ngukurr is a remote Aboriginal community situated on the banks of the Roper River, approximately 300 km east of Katherine in the Northern Territory of Australia. As is the case in many such communities, the Ngukurr store is the only store in close proximity where food and other necessities of life can be purchased. It therefore provides an essential service to the community, particularly in the wet season, when the road access to and from Ngukurr is usually impassable. These proceedings essentially concern the governance of the entity responsible for the operation of the Ngukurr store.

2    The Ngukurr Progress Aboriginal Corporation was and remains that entity. The Ngukurr Corporation is registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the Aboriginal Corporations Act). As such, the Registrar of Aboriginal and Torres Strait Islander Corporations is responsible for the regulatory oversight of the Ngukurr Corporation, its directors and officers.

3    Until early 2010, Mr Simon Ponto, Mr Nelson Hall, Mr Walter Rogers and Mr Godfrey Blitner, the first to fourth respondents in these proceedings, respectively, were directors of the Ngukurr Corporation. For a brief period at the end of 2009, Mr Dwarka Dass, also known as Darcy Dass, the fifth respondent, was purportedly appointed as the Chief Executive Officer of the Ngukurr Corporation.

4    By these proceedings, the Registrar has sought a series of declarations to the effect that the respondents, in their capacity as either a director or an officer, of the Ngukurr Corporation, each contravened various civil penalty provisions of the Aboriginal Corporations Act. The Registrar has also sought an order that each of the respondents be disqualified from managing any Aboriginal and Torres Strait Islander corporation for a period of five years.

5    The conduct the Registrar relies upon to establish the respondents’ alleged contraventions all occurred during late 2009. Some of that conduct occurred in Ngukurr, but the majority of it occurred during a trip that the respondents made to Darwin, in early December 2009. During that trip, the respondents made an attempt to access the bank accounts of the Ngukurr Corporation without the proper authority of the Corporation.

6    For the reasons that follow, I propose to make the declarations of contravention sought by the Registrar against two of the respondents: Mr Ponto and Mr Dass. I also propose to make disqualification orders against those two respondents, albeit not to the extent sought by the Registrar.

Factual Background

7    In or around April 2009, the Ngukurr Corporation made an agreement with Outback Stores Pty Ltd, a Commonwealth government-owned company that manages stores in remote Aboriginal communities. That agreement was reduced to writing in a document dated 1 August 2009 entitled Management Agreement. In broad terms, this Management Agreement provided that Outback Stores would operate the Ngukurr store and manage the Ngukurr Corporation’s finances and bank accounts. Under this agreement, if the Ngukurr Corporation wished to deal with its funds, it was required to have the decision authorised by a vote of six of the Corporation’s 10 directors. Once that authorisation was given, payment was then to be made from the Ngukurr Corporation’s bank accounts, the authorised signatories for which included Outback Stores’ officers.

8    In addition to its management role, Outback Stores was to oversee the construction of a new store at Ngukurr on behalf of the Ngukurr Corporation. This was to occur during 2010.

9    In late 2009, in order to assist the directors of the Ngukurr Corporation with their management and secretarial duties, it was proposed that the Ngukurr Corporation enlist a volunteer from Indigenous Community Volunteers. Community Volunteers is an organisation that assists indigenous communities by providing them with skilled volunteers. Acting on that proposal, the Ngukurr Corporation applied to Community Volunteers, which in turn supplied a shortlist of volunteers. After considering that shortlist, the directors of the Corporation selected Mr Dass to fill that role.

10    Mr Dass was a qualified accountant, a member of the Australian Society of Accountants and a Certified Practicing Accountant. He lived in Canberra. When he retired in 1989, he was working for the Australian National Audit Office. He had previously worked on Community Volunteers projects in Aboriginal communities.

11    Mr Dass arrived at the Ngukurr community on 9 November 2009.

12    At this time, Ms Trish Canty was the Ngukurr community’s Government Business Manager (GBM). A GBM was a Commonwealth government position established under the Northern Territory National Emergency Response Act 2007 (Cth). Its role was to act as the interface between the community where the GBM was located and relevant government agencies to ensure that government programs and services were provided effectively in that community. Since Outback Stores was a government-owned company, Ms Canty’s role included ensuring that the Ngukurr store was operating effectively for the benefit of the Ngukurr community.

13    Finally, it is apt to record one further matter as a part of the factual background to these proceedings. That is that during 2009 there appears to have been some dissent within the Ngukurr community about whether the Ngukurr store should be managed by Outback Stores, or by the Ngukurr Corporation itself. The four Indigenous respondents appear to have been within this dissentient group. Indeed, Mr Dass told Mr Bowden on 11 December 2009 (see at [28] below) that the respondents’ purpose in pursuing the course of conduct described below was to attempt to regain control of the Ngukurr Corporation and its bank accounts. Some months later (in May 2010), Mr Hall expressed similar views to Mr Roberts (an examiner appointed by the Registrar: see at [35] below), when he said, among other things: “… [Outback Stores] ‘should go’ and the Ngukurr community should run the Store”. Finally, it appears clear from the fact that the four Indigenous respondents were not able to prevent these management arrangements being put in place with Outback Stores, that theirs was a minority view. So, while this does not in any way excuse the conduct of the respondents described below, it may go some way to explaining why it occurred.

The contravening conduct

14    Ms Canty gave evidence that within two to three days of Mr Dass’ arrival at Ngukurr, he appeared to be preoccupied with matters outside the scope of his contract with Community Volunteers. According to Ms Canty, in the weeks following 9 November 2009, Mr Dass asked her numerous questions about the Ngukurr store’s financial records, including the balances of the Ngukurr Corporation’s bank accounts. She also claimed that he expressed concerns about the manner in which Outback Stores was managing the Ngukurr Corporation’s finances.

15    Ms Racquel Monkley, the Manager of the Ngukurr store employed by Outback Stores, gave similar evidence about Mr Dass’ conduct. In particular, she said that on 30 November 2009, Mr Dass requested advice as to the balances of the Ngukurr Corporation’s bank accounts.

16    On 3 December 2009, a letter purporting to offer Mr Dass appointment as the Chief Executive Officer of the Ngukurr Corporation (the CEO employment offer) was signed. The letter bore what purported to be the signatures of Mr Ponto and Mr Hall. The remuneration package under this CEO employment offer included an annual salary of $120,000, a motor vehicle, eight weeks annual leave and 8% superannuation contributions.

17    Significantly, the Ngukurr Corporation had held its annual general meeting (AGM), on 30 November 2009, only three days before the date of the CEO employment offer, and that meeting had not been asked to consider any resolution to make any such employment offer to Mr Dass. The AGM was attended by both Mr Hall and Mr Ponto.

18    On 7 December 2009, a directors’ meeting (sometimes referred to in these reasons as a Board meeting) of the Ngukurr Corporation was held. It was attended by all the respondents, including Mr Dass. Mr Dass’ offer of employment as CEO was not approved or ratified at that meeting. Part way through that meeting, two of the three non-directors present (Ms Monkley and Ms Canty) were asked to leave the meeting. Mr Dass remained. Ms Monkley gave evidence that, upon their return to the meeting about 10 minutes later, Mr  Hall advised them that he and the other respondents intended to travel to Darwin to hold meetings with Outback Stores’ management, the administrators of the Aboriginal Benefits Account and with an organisation called NBC Consultants. All of these organisations were involved in the funding and construction of the new Ngukurr store.

19    Also on 7 December 2009, each of the respondents signed a requisition for travel allowance for their trip to Darwin. That requisition stated that the purpose of the trip was to “talk to” the organisations mentioned above (at [18]). On the following day, the respondents received a travelling allowance of $800 each from the Ngukurr Corporation for their trip. On the same day, they also signed a requisition to use the Ngukurr Corporation’s vehicle for that trip.

20    On 9 December 2009, Mr Dass accepted the CEO employment offer.

21    On or about 9 December 2009, the respondents travelled to Darwin in the Ngukurr Corporation’s vehicle. Shortly after their arrival, it appears that Mr Hall left the group for several days. He was not therefore present during any of the events recorded in the following paragraphs.

22    Mr Jong (a Westpac Banking Corporation Ltd customer service representative at the Darwin branch of Westpac) gave evidence that on the afternoon of 9 December, while he was on duty at the counter of the Westpac Bank branch, he was handed a letter (the 9 December letter) which purported to instruct Westpac to:

(a)    open an account in the name “Administrative and Capital Trust Account” (the new account);

(b)    transfer $100,000 into the new account from an existing Westpac account: the Ngukurr Investment Account;

(c)    provide internet banking facilities and credit card facilities to Mr Ponto and Mr Hall for the new account and for three existing Westpac accounts held by the Ngukurr Corporation: the Ngukurr Store Account, the Ngukurr IM (Income Management) Account and the Ngukurr Investment Account (above); and

(d)    transfer $3,500 per fortnight (commencing immediately) as “salaries” from the existing Ngukurr Store Account (above) to an account in the name of Dwarka Dass.

23    The 9 December letter, like the CEO employment offer, contained what purported to be the signatures of Mr Ponto and Mr Hall. During his s 453-5 examination (see at [35] below), Mr Ponto confirmed that he signed both of these letters (see at [46(b)] below). However, Mr Hall did not attend a s 453-5 examination and there is no evidence to confirm whether he signed either of these letters.

24    While Mr Jong was unable to identify the persons present at the Westpac Bank branch, Mr Dass, Mr Blitner, Mr Rogers and Mr Ponto each confirmed during their s 453-5 examinations (see at [46] below) that they were present when the 9 December letter was presented to Mr Jong. It should also be noted that during one of his two examinations, Mr Dass admitted to drafting the 9 December letter (see at [46] below). He also claimed that, while the other respondents did not directly instruct him about the contents of the 9 December letter, he drafted it to give effect to their wishes to gain access to and use the Ngukurr Corporation’s bank accounts.

25    Soon after Mr Jong received the 9 December letter, he contacted the Westpac Business Accounts section in Canberra. The relationship manager responsible for the Outback Stores and Ngukurr Corporation’s accounts was based in that section. Mr Jong spoke to a customer service manager named Ms Horth. Ms Horth gave evidence that she directed Mr Jong not to act on the instructions contained in the 9 December letter as Mr Hall and Mr Ponto did not have the authority to give such instructions on behalf of the Ngukurr Corporation.

26    Ms Sharp, the corporate accountant for Outback Stores in Darwin, gave evidence that Ms Horth faxed her a copy of the 9 December letter. More significantly for present purposes, Ms Sharp said that during the afternoon of 10 December she received a telephone call from Mr Dass. During that call, Mr Dass asked her why Outback Stores would not permit Westpac Bank to give effect to the instructions contained in the 9 December letter. Ms Sharp gave evidence that she told Mr Dass that those instructions could not be acted on because they were not properly authorised by the Ngukurr Corporation.

27    On or about 10 December, while he was still in Darwin, Mr Dass had two discussions with Mr Peart, an employee of Community Volunteers. Mr Peart gave evidence that during these discussions, Mr Dass orally tendered his resignation as a Community Volunteers volunteer and advised Mr Peart that he had accepted a position as the CEO of the Ngukurr Corporation. Following this resignation, Mr Peart informed Mr Dass that he was dismissed as a Community Volunteers volunteer and that he was to leave Ngukurr and return to Canberra as soon as possible.

28    On 11 December, Mr Ponto, Mr Rogers, Mr Blitner and Mr Dass met with the Ngukurr Corporation’s lawyer, Mr Sean Bowden, at his offices in Darwin. According to Mr Bowden (who gave evidence by affidavit), Mr Dass informed him that the respondents were attempting to regain control of the Ngukurr Corporation and to establish new bank accounts for it. Mr Bowden said Mr Dass gave him a copy of the 9 December letter and his CEO employment offer. Mr Bowden said that he requested details of the resolution or authorisation that supported the instructions given in the 9 December letter, but these were not provided to him.

29    While returning to Ngukurr on about 13 December 2009, the respondents were involved in a car accident. This resulted in them all being transported to the Royal Darwin Hospital for treatment. Some of the respondents were discharged after a short period. Mr Blitner sustained a serious fracture to his leg and he was an in-patient for some months. Mr Hall was also seriously injured and was admitted as an in-patient.

30    On 14 December, an urgent board meeting of the Ngukurr Corporation was called. None of the respondents attended. Ms Monkley gave evidence that she arranged for this meeting to be called after she was informed by someone in the Darwin office of her employer (Outback Stores) about the respondents’ activities in Darwin. At that meeting, the respondents (with the exception of Mr Dass, who had not been appointed as a director) were suspended from their positions as directors of the Corporation.

31    On 15 February 2010, the four Indigenous respondents formally resigned from their positions as directors of the Ngukurr Corporation.

Some relevant pROCEDURAL HISTORY

32    The main part of the hearing of this matter was conducted in Darwin. Another part was conducted in Canberra. The Canberra hearing was necessary because Mr Dass and certain of the witnesses resided in Canberra. Despite all the respondents being served with notices of these hearing dates, only Mr Dass (who attended all the hearing days) and Mr Rogers (who attended the three hearing days in Darwin) appeared. Both appeared in person without legal representation.

33    Upon application by the Registrar under rule 30.21 of the Federal Court Rules 2011, the hearing proceeded in the absence of the remaining respondents.

34    At the commencement of the hearing in Canberra, Mr Dass told the Court that he consented to all of the declarations of contravention sought against him by the Registrar. However, he proposed that a two year disqualification period should be imposed on him, rather than the five years the Registrar had sought. Later in that hearing, Mr Dass changed his position and stated he consented to a five year disqualification period. Then, several months after the conclusion of that hearing, Mr Dass filed an affidavit in which he reneged on the latter position and submitted that no disqualification period should be imposed upon him at all.

Reliance on the transcripts of the examinations under section 453-5

35    As is already noted above (at [24]), during the course of the investigations that preceded these proceedings, four of the respondents – Mr Ponto, Mr Blitner, Mr Rogers and Mr Dass – were examined by an official appointed by the Registrar. The examinations were conducted under s 453-5(1)(c) of the Aboriginal Corporations Act. Under that provision, the respondents were compelled to attend the examinations and to answer any questions “concerning the corporation or its examinable affairs”.

36    The Registrar sought to tender the transcripts of the examinations under ss 81 and 48 of the Evidence Act 1995 (Cth) (the Evidence Act). In total, he sought to tender five transcripts – Mr Dass was examined twice.

37    Dealing first with s 48 of the Evidence Act, it is important to note that the Registrar did not seek to tender the recordings of the examinations themselves, but instead sought to tender documents that purported to be transcripts of those recordings. However, s 48(1)(c) of the Evidence Act provides:

(1)    A party may adduce evidence of the contents of a document in question by tendering the document in question or by any one or more of the following methods:

…

(c)    if the document in question is an article or thing by which words are recorded in such a way as to be capable of being reproduced as sound, or in which words are recorded in a code (including shorthand writing) - tendering a document that is or purports to be a transcript of the words;

38    In R v Cassar; R v Sleiman [1999] NSWSC 436 (Sleiman), Sperling J summarised the principles relating to the operation of s 48. The following parts of his Honour’s summary are germane for present purposes (at [7]):

(a)    A document that purports to be a transcript of words recorded on a tape is admissible to prove the conversation: s48(1)(c);

(b)    No oral or other evidence is necessary to validate such a transcript, it being sufficient that it purports to be a transcript of the words: s48(1)(c).

39    In R v Giovannone (2002) 140 A Crim R 1; [2002] NSWCCA 323 per Mason P (Hidden J and Carruthers AJ agreeing), the New South Wales Court of Criminal Appeal cited Sleiman and the proposition in (b) above with apparent approval (see at [61]).

40    The documents that the Registrar sought to tender in this case clearly purport to be transcripts of words recorded on the tapes. It follows from the decision in Sleiman (above) (with which I respectfully agree) that no further oral evidence is required to validate them.

41    Turning then to s 81 of the Evidence Act, prima facie the transcripts contain out of court representations tendered for the truth of their contents. As such, they are inadmissible as hearsay: s 59(1) of the Evidence Act. However, the Registrar submitted that the transcripts contained admissions, and they were therefore admissible under s 81 of the Evidence Act.

42    Section 81 provides:

(1)    The hearsay rule and the opinion rule do not apply to evidence of an admission.

(2)    The hearsay rule and the opinion rule do not apply to evidence of a previous representation:

(a)    that was made in relation to an admission at the time the admission was made, or shortly before or after that time; and

(b)    to which it is reasonably necessary to refer in order to understand the admission.

(Notes omitted)

43    “Admission” is defined in the Dictionary to the Evidence Act as:

“admission” means a previous representation that is:

(a)    made by a person who is or becomes a party to a proceeding (including a defendant in a criminal proceeding), and

(b)    adverse to the person’s interest in the outcome of the proceeding.

44    “Previous representation” is defined in the Dictionary as follows:

previous representation means a representation made otherwise than in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced.

45    While only certain parts of the transcripts contained representations that could be described as being “adverse” to the respondent concerned, the Registrar relied on s 81(2)(b) of the Evidence Act to submit that the whole of the transcripts should be admitted into evidence. That section provides:

(2)    The hearsay rule and the opinion rule do not apply to evidence of a previous representation:

(a)    that was made in relation to an admission at the time the admission was made, or shortly before or after that time; and

(b)    to which it is reasonably necessary to refer in order to understand the admission.

(Notes omitted)

46    Having examined the transcripts, I consider that they contain a number of representations that constitute “admissions” for the purposes of s 81 of the Evidence Act. In summary form they are:

(a)    In the transcripts of his examinations, Mr Dass admitted:

(i)    he drafted the 9 December letter while in Darwin without obtaining detailed instructions as to its content from any of the other respondents;

(ii)    the instructions contained in the 9 December 2009 letter had not been approved by the Board of the Ngukurr Corporation;

(iii)    he attended the Darwin Branch of the Westpac Bank on 9 December 2009;

(iv)    he also drafted the CEO employment offer; and

(v)    the CEO employment offer was not presented for approval at the Board meeting of the Ngukurr Corporation held on 7 December 2009, or at all,

(b)    in the transcript of his examination, Mr Ponto admitted:

(i)    he signed the CEO employment offer;

(ii)    the CEO employment offer should have been approved by the Board of the Ngukurr Corporation but had not been approved at any meeting he attended;

(iii)    he signed the 9 December letter;

(iv)    he attended the Darwin Branch of the Westpac Bank on 9 December 2009; and

(v)    the transactions contained in the 9 December 2009 letter should have been approved by the Board of the Ngukurr Corporation but had not been so approved,

(c)    in the transcript of his examination, Mr Blitner admitted:

(i)    he attended the Darwin Branch of the Westpac Bank on 9 December 2009,

(d)    in the transcript of his examination, Mr Rogers admitted:

(i)    he attended the Darwin Branch of the Westpac Bank on 9 December 2009; and

(ii)    the instructions contained in the 9 December 2009 letter should have been approved by the Board of the Ngukurr Corporation but had not been so approved.

47    The Registrar submitted that a number of other “admissions” were made in the transcripts. Having examined those transcripts, I do not agree. In most instances, the “admissions” identified by the Registrar do not involve representations that are truly adverse to the apposite respondent’s interest in the proceedings such that they constitute admissions for the purposes of s 81. In other instances, I do not consider the admission concerned has actually been made out. An example of the former was Mr Dass’ acknowledgement that he was a volunteer. While this may have been adverse to his relationship with Community Volunteers, that relationship is not an issue in these proceedings, so I do not consider this representation is in any way adverse to Mr Dass’ interests in these proceedings. An example of the latter is to be found in the transcript of Mr Dass’ first examination where the Registrar contended that Mr Dass had admitted that the 9 December letter should have been approved by a general meeting of the Corporation and was not. The relevant excerpt from the transcript is as follows:

WALLACE: Okay, you said that the letter was intended to go before the – before a meeting of the board - -

DASS: Yes, after we were gone from Darwin, all this would go – all the paperwork I had would go before the board.

…

WALLACE: But how could the board authorise something that’s already happened?

DASS: They can dis-authorise it. They can go against it at the general meeting or whatever, the director’s meeting but it would be presented by the director’s themselves.

WALLACE: Is that normal in your experience to – to – for a corporation, to – two people in a corporation to undertake an activity involving $100,00 at the bank…without taking them to a board meeting?

DASS: Yes, this – as I said, this was done and the meeting – the board – the next meeting it would have been presented to them.

WALLACE: No, I asked you if that’s normal in your experience?

DASS: Well, as I said, it should be approved by the board at a meeting, right? But the board was going to meet but we went to – Darwin and all these things happened so. This would have been presented in the meeting for which I was going to prepare the minutes of the last meeting we had and put all this before the board and they can confirm or don’t confirm it and the position taken by them would be the final. (sic)

48    It is evident from this exchange that Mr Dass did not direct his comments to the need to obtain approval from a general meeting of the Ngukurr Corporation, but to the need to obtain approval from its Board. Further, while Mr Dass appeared to acknowledge that the 9 December letter required Board approval, he did not admit that it required Board approval prior to it being drafted, or prior to it being presented to the Westpac Bank. Instead, Mr Dass appeared to suggest that it would be sufficient for the Board to approve the 9 December letter retrospectively upon his return to Ngukurr. The statement that the 9 December letter had not received Board approval is, of course, an admission for the purposes of s 81, however, I do not consider the other parts of this excerpt are.

49    For these reasons, I consider that the transcripts are admissible pursuant to ss 81 and 48(1)(c) of the Evidence Act.

The three alternative bases of contravention

50    The Registrar has put his case against the respondents on three alternative bases, relying upon three different provisions of the Aboriginal Corporations Act. They are:

(a)    that they contravened s 265-10 of the Aboriginal Corporations Act by making improper use of their positions; or

(b)    that they contravened s 265-5 of the Aboriginal Corporations Act by failing to act in good faith in the best interests of the Ngukurr Corporation and for proper purposes; or

(c)    that they contravened s 284-5(2) of the Aboriginal Corporations Act by giving a financial benefit to a related party, viz Mr Dass, without complying with the procedural requirements of Div 290 of the Aboriginal Corporations Act.

51    I will now turn to consider these alternative bases for contravention, or so many of them as is necessary. However, it is first convenient to briefly deal with a related issue. That is, whether Mr Dass was a director or officer for the purpose of these provisions.

MR DASS as a director or officer

52    Sections 265-10 and 265-5 of the Aboriginal Corporations Act only apply to directors or officers of an Aboriginal corporation. The words “director” and “officer” are relevantly defined in s 683-1 of the Aboriginal Corporations Act:

(1)    A person is a director of an Aboriginal and Torres Strait Islander corporation if the person:

(a)    is appointed to the position of a director of the corporation;

…

(2)    A person is also a director of an Aboriginal and Torres Strait Islander corporation if:

(a)    the person is not validly appointed as a director of the corporation; and

(b)    either:

(i)    the person acts in the position of a director of the corporation; or

(ii)    subject to subsections (4), (5) and (7), the directors of the corporation are accustomed to act in accordance with the person’s instructions or wishes.

This subsection has effect unless the contrary intention appears.

(3)    A person is an officer of an Aboriginal and Torres Strait Islander corporation if:

…

(b)    a person:

(i)    makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or

(ii)    has the capacity to affect significantly the corporation’s financial standing; or

(c)    subject to subsections (4), (5) and (7), the directors of the corporation are accustomed to act in accordance with the person’s instructions or wishes; or

…

(4)    A person is not a director under subparagraph (2)(b)(ii), or an officer under paragraph (3)(c), merely because the directors act on advice given by the person in the proper performance of functions attaching to the person's professional capacity, or the person's business relationship with the directors or the corporation.

53    Mr Ponto, Mr Hall, Mr Rogers and Mr Blitner were duly appointed directors of the Ngukurr Corporation at all the relevant times and, as such, were clearly directors of the Corporation within the meaning of s 683-1(1)(a).

54    In relation to Mr Dass, the Registrar submitted:

It is common ground that after arriving in Ngukurr, [Mr Dass] acted in the position of a director within the meaning of s.683-1(2) of the Act. He and the other respondents attended directors’ meetings and purported in those meetings to make decisions affecting the finances of the [Ngukurr] Corporation.

55    It is not clear exactly what is meant by the reference to there being “common ground” that Mr Dass acted in the position of director of the Ngukurr Corporation. Certainly, neither Mr Dass nor any of the other respondents made any admission, or gave any acknowledgment that Mr Dass had acted as a director of the Ngukurr Corporation within the meaning of s 683-1(2). In any event, to the extent that the Registrar is relying upon s 683-1(2) of the Aboriginal Corporations Act to claim that Mr Dass should be treated as a de facto director, within the terms of s 683-1(2)(b)(i), I consider that submission lacks utility. That is so because it ignores the provisions of s 683-1(3) and the fact that both ss 265-10 and 265-5 of the Aboriginal Corporations Act apply to both “directors” and “officers”.

56    Insofar as the words “director” and “officer” are concerned, s 683-1 is in substantially identical terms to s 9 of the Corporations Act 2001 (Cth) (the Corporations Act). Similarly, but for the words “Aboriginal and Torres Strait Islander corporation”, s 265-10 is substantially identical to s 182 of the Corporations Act. The Legislature clearly intended these provisions to have the same meaning. The Revised Explanatory Memorandum for the Corporations (Aboriginal and Torres Strait Islander) Bill 2006 provides (at 1.31) that “section 265-10 mirrors the use of position obligations in section 182”. On the same footing, s 265-5 is substantially identical to s 181 of the Corporations Act. I therefore consider that the authorities on ss 9 and 180–181 of the Corporations Act can be used in construing the provisions of ss 683-1, 265-10 and 265-5 of the Aboriginal Corporations Act.

57    One of those authorities is the recent Full Court decision in Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 at [65] per Finn, Stone and Perram JJ. In that case, the Full Court made the point (at [71]) that:

the application of ss 180-183 [of the Corporations Act] to a “director or officer” can eliminate the need to differentiate between a de facto director and an officer (de facto or not) who is not a director: for the sharply contrasting situation in the UK see In re Hydrodam at 183.

Applied to the Aboriginal Corporations Act, this renders futile the attempt by the Registrar to characterise Mr Dass as a de facto director. Put in different terms, if Mr Dass was an officer of the Ngukurr Corporation, ss 265-10 and 265-5 applied to him and it is unnecessary to determine whether he was also a de factor director.

58    It is clear that from about 9 December 2009, being the date that Mr Dass attended the Westpac Bank branch and accepted the role of CEO of the Ngukurr Corporation, Mr Dass was making or participating in decisions that affected a substantial part of the business of the Corporation, or significantly affected the Corporation’s financial standing. He travelled to Darwin, he drafted the 9 December letter, he attended the Westpac Bank branch, and when there took an active role in attempting to use the 9 December letter to make significant changes to the bank accounts of the Ngukurr Corporation. As such, I consider Mr Dass was an “officer” within the terms of s 683-1(3)(b). It follows that ss 265-10 and 265-5 of the Aboriginal Corporations Act apply to him in that position and it is unnecessary to determine whether he was a de facto director.

Improper use of position

59    Turning, then, to the first alternative basis of contravention relied upon by the Registrar: s 265-10 Aboriginal Corporations Act. That section provides that certain people involved in Aboriginal and Torres Strait Islander corporations must not improperly use their positions. It states:

(1)    A director, secretary, other officer or employee of an Aboriginal and Torres Strait Islander corporation must not improperly use his or her position to:

(a)    gain an advantage for himself of herself or someone else; or

(b)    cause detriment to the corporation.

(2)    A person who is involved in a contravention of subsection (1) contravenes this subsection.

(Notes omitted.)

Principles applicable to section 265-10

60    Before considering whether any of the conduct described above contravened s 265-10 of the Aboriginal Corporations Act, it is useful to outline some principles that have been developed in relation to s 182(1) which, as I have already noted above (at [56]), is substantially similar in its terms to s 265-10.

61    Impropriety is to be determined objectively. As the High Court (Brennan, Deane, Toohey and Gaudron JJ) stated in R v Byrnes (1995) 183 CLR 501 (Byrnes) at 514–5:

Impropriety consists in a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case.

62    While Byrnes involved a predecessor to s 182(1), it has been applied in relation to that section by this Court on a number of occasions: see Labelmakers Group Pty Ltd v LL Force Pty Ltd [2012] FCA 512 at [282] per Tracey J; Digital Cinema Network Pty Ltd v Omnilab Media Pty Limited (No 2) [2011] FCA 509 at [161] per Gordon J; and Hydrocool Pty Limited v Hepburn (No 4) (2011) 279 ALR 646; [2011] FCA 495 at [339] per Siopis J.

63    Further, the state of mind of the alleged contravener may be relevant when determining whether an improper abuse of power has occurred: Byrnes at 515. However, there may be an improper use of position even where a subjective belief is held that the use of the position is in the interests of the company: Chew v The Queen (1992) 173 CLR 626 (Chew) at 634 per Mason CJ, Brennan, Gaudron and McHugh JJ.

64    Finally, the fact that attempts to engage in an improper use of position were thwarted, such that the advantage described in subpara 182(1)(a), or the detriment described in 182(1)(b), did not actually occur, will not preclude a finding of a contravention of s 182(1). The critical issue is the purpose of the alleged contravener: Chew at 633.

65    With these principles in mind, I will now turn to consider each of the respondents’ involvement in the events of late 2009 to determine whether some, or all of them, contravened s 265-10 of the Aboriginal Corporations Act. Because of the varying level and nature of their involvement, I will do that in the following order: Mr Ponto, Mr Dass, Mr Rogers, Mr Blitner and Mr Hall.

MR PONTO – SECTION 265-10

66    There were three significant components and two stages to the events of late 2009. The first component and stage was the signing of the CEO employment offer on 3 December 2009. The second stage comprised two components: (a) the signing of the 9 December letter; and (b) on the same date, attempting to give effect to the instructions contained in that letter by attending the Westpac Bank in Darwin.

67    Mr Ponto was the only respondent to be involved in each one of these three components and in both of the two stages. This is so because, even assuming Mr Hall signed both the CEO employment offer and the 9 December letter, he was not present at the Westpac Bank in Darwin on 9 December 2009 (see at [104] below). Further, while Mr Dass gave evidence that he drafted both the CEO employment offer and the 9 December letter, at the time he did the former he was not yet an “officer” of the Corporation (see at [83] below). Finally, there is no evidence that either Mr Rogers, or Mr Blitner, had any direct involvement with either the CEO employment letter, or the 9 December letter: their involvement in the events of late 2009 was to travel to Darwin and attend the Westpac Bank there on 9 December 2009.

68    Since he was the Chairman of the Ngukurr Corporation, it may not be considered surprising that Mr Ponto was so closely involved in these events. Nonetheless, that close involvement was not founded in any authority or powers he had as Chairman of the Corporation. Under the rules of the Corporation, the Chairman’s position carried with it the responsibility for matters such as: chairing general meetings; declaring on the validity of proxies; and declaring the results of a vote taken at a general meeting. The Chairman also had a substantive and deliberative vote at general meetings. However, none of these provisions, nor any other provisions of the rules of the Corporation, gave the Chairman any additional authority or powers. Mr Ponto was, therefore, in the same position as all the other directors of the Corporation: he was required to comply with the rules of the Corporation. Among other things, this required compliance with the rules that: all accounts must be approved for payment at a directors’ meeting (rule 8); and the money and property of the Corporation is to be used to carry out its business (rule 9).

69    While neither of these rules expressly required the directors of the Corporation to approve the appointment of a CEO, it is difficult to reconcile the import of them with a conclusion that such a significant appointment could be made without the approval of the Board of directors. For example, the rule that “all accounts” had to be approved for payment by the directors must implicitly include the payment of a salary for a CEO, even though a salary may not normally be described as an “account”. Moreover, the Board of directors of the Corporation appears to have adopted this approach to the construction of that rule because even the appointment of Mr Dass as a volunteer to assist the Board with its management and secretarial tasks was the subject of a prior resolution of the Board of directors. Finally, and in any event, the standards of conduct reasonably expected of persons in the position of directors of the Corporation would, in my view, in all the circumstances, require such an important appointment to be approved in advance by the directors of the Corporation.

70    It follows that, whether as the Chairman, or as a director of the Ngukurr Corporation, Mr Ponto had no power or authority to make the CEO employment offer without the prior approval of the Board of directors of the Corporation. By parity of reasoning, Mr Ponto also did not have the power or authority to give the instructions contained in the 9 December letter affecting the bank accounts of the Corporation. This conclusion raises some assertions Mr Dass made in these proceedings which can be conveniently addressed at this point. In the affidavit he filed after the conclusion of the hearing (see at [34] above), Mr Dass said, among other things:

The Outback Store Pty have assumed control of the Corporations bank accounts and appointed their CEO and employee signatories to the accounts without the sanction of the Corporation. The management of the Corporation have issued instructions to the Westpac Bank so control of the Corporations funds is located and controlled by management of the corporation. The manager of Westpac Bank Darwin showed disrespect to the client Chairman and directors by not meeting with their client to clarify the approved operators on the corporation banking accounts and verify who the signatories were to the accounts.

(Errors and omissions in original)

71    First, there is no evidence to support Mr Dass’ assertion in this affidavit that Outback Stores had assumed control of the Ngukurr Corporation’s bank accounts “without the sanction of the Corporation”. To the contrary, the minutes of the directors’ meetings of the Corporation reveal that on 15 April 2009 the directors approved the appointment of Outback Stores as “a third party manager for a period of 3-6 months to oversee the ongoing management and operations of the Ngukurr community store”. Then, while the evidence does not appear to include a minute of a directors’ meeting confirming this, on 1 August 2009 the Ngukurr Corporation entered into a Store Management agreement with Outback Stores for the management of the Ngukurr store. That agreement was signed by Mr Nelson Hall and Ms Allison Bush as directors on behalf of the Ngukurr Corporation. Under cl 10 of that Store Management agreement, one of the services to be provided by Outback Stores was to open and operate a store bank account on behalf of the Ngukurr store. Finally, the minutes of the 13 October 2009 Board meeting record as “correspondence tabled” a letter from the Corporation to Westpac Banking Corporation Ltd dated 9 October 2009 authorising the closure of specific bank accounts of the Corporation and the transfer of the funds in those accounts to new Outback Stores-managed bank accounts.

72    While on this aspect, it is also noteworthy that, in the days immediately before and after 3 December 2009 (the date of the CEO employment offer) and the days immediately before the 9 December letter, there were two opportunities for Mr Ponto to seek the approval of the Corporation, or its directors, to make, or ratify, the CEO employment offer, and to authorise the instructions contained in the 9 December letter. They were the 30 November 2009 AGM and the 7 December 2009 directors’ meeting (see [17]–[18] above). I infer that Mr Ponto did not avail himself of either of these opportunities because he was well aware that he would be in the minority in relation to any vote taken on both these issues on both these occasions.

73    Finally, it is apparent from what Mr Ponto said during his s 453-5 examination that he was aware that the CEO appointment offer and the transactions about the Corporation’s bank accounts contained in the 9 December letter needed to be approved by the directors of the Corporation (see at [46](b) above). Even if he had not made these admissions, I consider that a reasonable person with knowledge of a director’s powers and authority would have known this was so.

74    It follows, therefore, that I consider Mr Ponto improperly used his position as a director of the Ngukurr Corporation by signing the CEO employment offer and by signing the 9 December letter and thereafter attending the Westpac Bank in Darwin and attempting to give effect to the instructions contained in that letter. However, this conclusion is not sufficient to found a finding that Mr Ponto thereby acted in contravention of s 265-10 of the Aboriginal Corporations Act. To make such a finding, it is also necessary for Mr Ponto to have been pursuing one of the purposes described in subs (1)(a) or (1)(b) of s 265-10. As to subs (1)(b), while opinions may differ on whether the effect of Mr Ponto’s conduct was to cause detriment to the Ngukurr Corporation, I do not consider that was his real purpose in late 2009. To the contrary, I consider causing detriment to the Corporation was fundamentally inconsistent with his ultimate purpose. That was to gain (or regain) control of the Ngukurr Corporation. The evidence of this ultimate purpose has been identified earlier in these reasons (see at [13] above).

75    While this was Mr Ponto’s ultimate purpose, I infer that he had two more immediate purposes in mind in pursuing each of the two stages of the events of late 2009. These two immediate purposes both served to achieve his ultimate purpose.

76    First, I infer that Mr Ponto signed the CEO employment offer with the purpose of enlisting the support of Mr Dass and making use of his skills as an accountant in his ultimate purpose of taking control of the Ngukurr Corporation. It is clear that Mr Dass gained a direct advantage by being appointed as CEO of the Ngukurr Corporation on a remuneration package that included $120,000 annual salary, a motor vehicle and superannuation. Immediately prior to this offer of employment being made, Mr Dass was working as a volunteer at the Ngukurr community. Further, since the appointment of Mr Dass as CEO of the Corporation was a critical part of Mr Ponto’s ultimate purpose to take control of the Corporation, I consider Mr Ponto also gained an indirect advantage from the CEO employment offer. For these reasons, I consider Mr Ponto made improper use of his position as a director of the Ngukurr Corporation by signing the CEO employment offer, and doing so to gain an advantage for Mr Dass and for himself. By this conduct, I consider Mr Ponto acted in contravention of s 265-10(1)(a) of the Aboriginal Corporations Act.

77     Secondly, I also infer that Mr Ponto signed the 9 December letter with the purpose of gaining access to and control over the bank accounts of the Ngukurr store, again as part of his ultimate purpose of taking control of the Ngukurr Corporation. At this time, the Ngukurr store was clearly the most significant and important part of the business operations and assets of the Ngukurr Corporation. This is evidenced by the fact that the September 2009 minutes of the directors’ meeting recorded the balances in the Ngukurr store bank accounts as: General Trading Account – $181,258; Cheque Account – $204,164; New Store Account – $1,582,924 and Income Management Account – $23,485. If the instructions contained in the 9 December letter had been implemented, it is clear that they had the potential to confer significant advantages on Mr Dass and on Mr Ponto himself. By those instructions, Mr Dass was to be paid $3,500 per fortnight as salaries from the existing Ngukurr Store Account. While this amount differs from the total amount of Mr Dass’ annual salary as CEO of the Ngukurr Corporation, this apparent inconsistency does not detract from the obvious advantage he stood to gain by receiving this sum of $3,500 per fortnight. Furthermore, Mr Ponto was to be given credit card and internet banking facilities in relation to three existing Ngukurr Corporation bank accounts: the Ngukurr Store Account, the Ngukurr IM Account and the Ngukurr Investment Account. I infer that these accounts correlate to the General Trading Account and/or Cheque Account, the Income Management Account and the New Store Account described in the September 2009 minutes above, respectively. And by those instructions Mr Ponto stood to gain access to and control over the bank accounts of the Ngukurr store which was the most significant component of the Ngukurr Corporation’s business operations. This was plainly an advantage to Mr Ponto in his ultimate purpose of taking control of the Ngukurr Corporation

78    For these reasons, I also consider Mr Ponto made improper use of his position as a director of the Ngukurr Corporation by signing the 9 December letter and by attending the Westpac Bank in Darwin and attempting to give effect to the instructions contained in the 9 December letter and doing so to gain an advantage for Mr Dass and for himself. This conduct was in contravention of s 265-10(1) of the Aboriginal Corporations Act.

79    There are two final aspects of the 9 December letter that should be mentioned. First, I should make it clear that there is no direct evidence that Mr Ponto or Mr Hall intended to use his access to the bank accounts identified in the 9 December letter to withdraw any moneys for his personal financial gain. In those circumstances, given the seriousness that is inherent in a conclusion to that effect, I would not be willing to infer that that was a part of their purpose. Secondly, it is pertinent to record that it is immaterial, in my view, that Mr Ponto’s ultimate, or immediate purposes, in signing the 9 December letter may have been quite misguided, or even foolish, eg that he thought it was in the best interests of the Ngukurr Corporation to employ a CEO on an annual salary of $120,000 and/or take personal control over the bank accounts of the Corporation (see at [63] above). Similarly, it does not matter that the instructions contained in the 9 December letter were thwarted by Westpac Bank’s refusal to act on them. What is material is that those were Mr Ponto’s purposes in signing that letter and attempting to give effect to the instructions contained in it (see at [64] above).

80    Since I have concluded that Mr Ponto has contravened s 265-10 of the Aboriginal Corporations Act, it is unnecessary for me to consider the two alternative bases for contravention put forward by the Registrar against Mr Ponto (see at [50] above).

MR DASS – SECTION 265-10

81    After Mr Ponto, Mr Dass had the next highest level of involvement in the events of late 2009. As I have noted above (at [67]), he drafted both the CEO employment offer and the 9 December letter. Further, he joined with Mr Ponto and two of the other respondents (Mr Rogers and Mr Blitner) at the Westpac Bank in Darwin and attempted to give effect to the instructions contained in the 9 December letter. He also used his own initiative to give effect to those instructions by contacting Ms Sharp, the Corporate Accountant for Outback Stores, and querying why Outback Stores would not permit Westpac Bank to act to the instructions (see at [26] above).

82    While I am mentioning the post 9 December conduct of the respondents, it is convenient to observe that I do not regard Mr Dass’ attendance at Mr Bowden’s office on 11 December as being in the same category as his telephone call to Ms Sharp on 10 December. That is so because, unlike Ms Sharp, who was the Corporate Accountant for Outback Stores, there is nothing to suggest that Mr Bowden, as the Ngukurr Corporation’s solicitor, had any authority to give effect to the instructions contained in the 9 December letter. These observations obviously apply equally to the other three respondents who attended at Mr Bowden’s office (Mr Ponto, Mr Rogers and Mr Blitner).

83    While Mr Dass drafted the CEO employment letter and his employment as CEO was a crucial part of Mr Ponto’s plan to take control of the Ngukurr Corporation (see at [76] above), I do not consider Mr Dass’ conduct, at that stage of the events of late 2009, involved a contravention of s 265-10. That is so because, at that stage of the events, I do not consider it is sufficiently clear that Mr Dass was participating in decisions that affected a substantial part of the business of the Corporation, or significantly affected the Corporation’s financial standing, such that he was an “officer” of the Corporation, as defined in s 683-1(3)(b) of the Aboriginal Corporations Act (see at [56]–[58] above). However, that changed dramatically about six days later when he drafted the 9 December letter. Given the intended effect of the instructions contained in the 9 December letter in relation to the bank accounts of the Ngukurr Corporation, I consider that, by that date, Mr Dass was participating in decisions that affected a substantial part of the business of the Corporation, or significantly affected the Corporation’s financial standing, such that he was by then acting as an “officer” within the terms of s 683-1-3(b) of the Aboriginal Corporations Act.

84    Moreover, by 9 December 2009, I consider Mr Dass was in essentially the same position as Mr Ponto in relation to the misuse of his position as an officer of the Corporation. That is so because, like Mr Ponto, I consider that, by drafting the 9 December letter and attending at the Westpac Bank in Darwin to attempt to give effect to the instructions contained in that 9 December letter, he was acting in breach of the rules of the Ngukurr Corporation and he was acting contrary to the standards one would reasonably expect of an officer of the Corporation in all the circumstances (see at [68]–[74] above).

85    Finally, I have already concluded above (at [77]) that Mr Dass stood to gain an advantage from his implementation of the instructions contained in the 9 December letter in that he was to be paid $3,500 per fortnight from one of the Corporation’s bank accounts concerned. I also consider that he was a willing participant in (if not the initiator of) Mr Ponto’s plans to take control of the Ngukurr Corporation’s bank accounts and the Ngukurr Corporation itself. Thus, I consider his implementation of the instructions contained in the 9 December letter was partly directed to gaining an advantage for Mr Ponto in achieving this outcome.

86    It follows that since Mr Dass was, from on or about 9 December 2009, acting as an “officer” of the Ngukurr Corporation and he misused his position as an officer to gain an advantage for himself and for Mr Ponto, I consider he acted in contravention of s 265-10 of the Aboriginal Corporations Act.

87    As with Mr Ponto, since I have concluded that Mr Dass has contravened s 265-10 of the Aboriginal Corporations Act, it is unnecessary for me to consider the two alternative bases for contravention put forward by the Registrar (see at [50] above).

MR Rogers and MR BLITNER – SECTIONs 265-10, 265-5 and 284-1

88    It is convenient to deal with the conduct of Mr Rogers and Mr Blitner together. Before identifying the level and nature of their involvement in the events of late 2009, it is important to emphasise this point about the contravening conduct of Mr Ponto and Mr Dass described above. That is that there were two essential elements to that conduct. First, purporting to make and put into effect significant decisions affecting the business operations of the Ngukurr Corporation, viz to gain access to and control over its bank accounts without the authority of the Board and, as a necessary consequence, in breach of the rules of the Corporation. And, secondly, doing so in order to gain the advantages for themselves described above. These two elements together comprised the essential facts of their contraventions of s 265-10.

89    This is important in relation to Mr Rogers and Mr Blitner because the case put against them is that they were “involved in” the contraventions of s 265-10 by Mr Ponto and/or Mr Dass. Section 265-10(2) of the Aboriginal Corporations Act provides that a person who is “involved in” a contravention of s 265-10(1) also contravenes that subsection. Section 694-55 of the Aboriginal Corporations Act defines the expression “involved in” as follows:

A person is involved in a contravention if, and only if, the person:

(a)    has aided, abetted, counselled or procured the contravention; or

(b)    has induced, whether by threats or promises or otherwise, the contravention; or

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d)    has conspired with others to effect the contravention.

This section is the equivalent of s 97 of the Corporations Act.

90    In the context of the latter provision, it has been held that to be “involved in” a contravention a person must have had knowledge of the essential elements that constituted the contravention: Yorke v Lucas (1985) 158 CLR 661 at 670 per Mason ACJ, Wilson, Deane and Dawson JJ; Leawell Pty Ltd v Watershed Premium Wines Ltd (No 2) (2009) 180 FCR 392; [2009] FCA 1145 at [53] per Barker J.

91    To succeed against Mr Rogers and Mr Blitner the Registrar must therefore show they had knowledge of the essential facts (described at [88] above) that constituted the contraventions of s 265-10 by Mr Ponto and/or Mr Dass. To attempt do that the Registrar made the following submissions:

i.    their attendance on the trip to Darwin (which is to be inferred from Mr Bowden’s evidence and from their signing the requisition for travelling allowance for the trip and their signing of a receipt for the allowance), where the purpose of the trip was to obtain control of the accounts of the Corporation (this is to be inferred from Mr Bowden’s evidence and from the fact that no appointments were made by them with ABA, NBC or ICV);

ii.    their failure to provide any explanation for their sudden resignation of their positions at the Corporation within days of the events in Darwin (relying upon Jones v Dunkel). If there were some other explanation for his (sic) sudden resignation, other than their shame for the events which had occurred, he (sic) had only to go into the witness box and say so;

iii.    their failure to provide any explanation for the letters sent by the Corporation on 14 December 2009 to the Westpac Bank and others, again within days of the events in Darwin, condemning the activities of the respondents (relying upon Jones v Dunkel). If there were some other explanation for the letters, other than their shame for the events which had occurred, they had only to go into the witness box and say so.

92    With the exception of their conduct in signing the requisition and receipt for the travel allowance for the trip to Darwin, all of these submissions rely upon inferences to be drawn from events that occurred after the visit to the Westpac Bank branch on the afternoon of 9 December 2009. As to the evidence relating to the travel allowance, I do not consider it supports a conclusion that they knew of the contents of the 9 December letter or, more importantly, of Mr Ponto and/or Mr Dass’ purposes in attending the Westpac Bank branch in Darwin on 9 December. As noted above (at [19]), the purpose of the trip stated in the requisition for travelling allowance was to talk to the organisations involved in the funding and construction of the new Ngukurr store. Consistent with this, in his s 453-5 examination, Mr Blitner said that he understood the purpose of the trip was “to meet with Outback [Stores] manager and stuff like that”. He said that he had “no idea” that they were going to go to the Westpac Bank in Darwin until just before that happened. In his s 453-5 examination Mr Rogers said that he thought the purpose of the trip was to visit people who were involved in building the new store. Based upon this evidence, I do not consider that any inference can be drawn from the fact Mr Rogers and Mr Blitner signed the requisition and receipt for the travelling allowance for their trip to Darwin, that a purpose of the trip was to attend the Westpac Bank there and attempt to gain access to and control over the bank accounts of the Ngukurr Corporation.

93    As to the 9 December letter itself, the first thing to note is that there is no evidence that either of them had any involvement with the drafting or signing of it. However, Mr Blitner did say in his s 453-5 examination that he knew of its existence. He told the examiner that Mr Dass told him and the other respondents who were present (all but Mr Hall) at the hotel in Darwin before they went to the Westpac Bank, that he had a letter on his computer and that he needed to go somewhere to arrange to print it out. Mr Blitner said Mr Dass went off to do that and then they all went to the Westpac Bank. Mr Blitner claimed that he did not see the letter that was printed out and he understood from what Mr Dass had said that the letter was for “a transaction”. Apart from that he claimed to have no other knowledge of the contents or purpose of the letter.

94    For his part Mr Rogers denied having seen the 9 December letter at any time before it was produced to him at his s 453-5 examination. He said that he thought they were going to the Westpac Bank to “change signatories” on the bank accounts. Both of them said that it was Mr Dass or Mr Ponto that proposed that they should visit the Westpac Bank. Further, they both said that when they arrived there, they remained sitting in the waiting area while Mr Dass and Mr Ponto went to the counter and spoke to a bank officer. They claimed not to hear what was said during that conversation. Based on this evidence I do not consider there is sufficient to draw an inference that prior to, or at the time of, their visit to the Westpac Bank, either Mr Rogers or Mr Blitner knew that Mr Ponto and/or Mr Dass intended to attempt to gain access to, and take control over, the bank accounts of the Ngukurr Corporation.

95    The reference in the Registrar’s submissions to Mr Bowden’s evidence is, I assume, a reference to the statement Mr Dass made to Mr Bowden during the visit the respondents (except Mr Hall) made to Mr Bowden’s office on 11 December. As recorded above (at [28]), Mr Bowden’s evidence was to the effect that Mr Dass told him that the respondents were attempting to regain control of the Ngukurr Corporation and to establish new bank accounts for it. Further, Mr Bowden gave evidence that Mr Dass gave him a copy of the 9 December letter and his CEO employment offer, but he was unable to provide any details of the resolution or authorisation of the Board to support the directions contained in the letter. Even assuming that Mr Rogers and Mr Blitner heard all of this conversation, saw a copy of the 9 December letter at this time and, more importantly, understood the effect of its contents, the most that I consider one could infer from this evidence is that they became aware at that time of Mr Ponto’s and/or Mr Dass’ purposes.

96    In Australian Securities and Investments Commission v Australian Investors Forum Pty Ltd (No 2) (2005) 53 ACSR 305; [2005] NSWSC 267, Palmer J observed that:

114.    The fact that a person comes to know of the essential facts constituting the contravention only after the contravention has occurred and is complete does not constitute involvement within the meaning of s 79 [of the Corporations Act].

115.    … Paragraph (a) refers to “aiding, abetting, counselling or procuring” a contravention – terms which are well understood in the common law … Acquiring knowledge of an offence after its commission and failing to take the appropriate action is not “aiding, abetting, counselling or procuring” in the common law.

97    I respectfully agree with these observations. Applied to the present case, they mean that, even if it can be inferred that Mr Rogers and/or Mr Blitner became aware of Mr Ponto and/or Mr Dass’ purposes in relation to the 9 December letter and the visit to the Westpac Bank when they attended Mr Bowden’s office on 11 December, that knowledge does not suffice to comprise the requisite knowledge of a person who is said to be “involved in” a contravention of s 265-10. In other words, this evidence does not support an inference that either Mr Rogers or Mr Blitner was aware of those purposes prior to, or at the time of, their visit to the Westpac Bank on 9 December 2009.

98    Finally, I do not consider that the Registrar’s reliance on Jones v Dunkel inferences has any merit. This reliance on Jones v Dunkel reinforces what the Full Court said in Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 (Sagacious) at [78] that: “The rule in Jones v Dunkel is one of the most invoked but least understood rules in litigation.” As the Full Court went on to explain (at [79]), the rule arises: “where a party fails, without explanation, to call a witness who that party might have been expected to call and whose evidence might have elucidated the matter in dispute”. In such circumstances, an “inference may be drawn that the evidence of the absent witness would not have assisted the party that failed to call that witness” (emphasis in original). The expectation that forms one of the pre-conditions for the operation of the rule arises where “enough has been proved to warrant a reasonable and just conclusion against [the party] in the absence of explanation or contradiction”: see Jones v Dunkel (1959) 101 CLR 298 at 321 per Windeyer J.

99    In this case, I do not consider either of the matters relied upon by the Registrar gives rise to any such expectation. In the first place, the so-called “sudden resignation” of the respondents as directors of the Corporation were not resignations at all, but rather suspensions carried out by the remaining directors of the Corporation (see at [30] above). Moreover, on 14 December 2009, when that meeting took place, none of the respondents were present because they were either in-patients at the Royal Darwin Hospital, or recently discharged therefrom following the car accident that occurred on 13 December 2009. There is nothing in these circumstances that proves anything that calls for an explanation, certainly not from Mr Rogers or Mr Blitner.

100    As to the respondents’ failure to provide any explanation for the letter sent by the Ngukurr Corporation on 14 December to the Westpac Bank and others, there is no evidence that any of the respondents was sent a copy of these letters, or became aware of their contents. It is difficult to see how an inference can be drawn against them for failing to explain allegations that were never put to them.

101    In any event, neither of these matters is material to any matter in dispute in these proceedings. Specifically, they do not, in my view, provide any evidence from which any inference could be drawn to the effect that Mr Rogers and/or Mr Blitner was aware that the purpose of their trip to Darwin was for Mr Ponto and/or Mr Dass to attempt to gain access to, and take control over, the bank accounts of the Ngukurr Corporation.

102    Finally, even if the absence of an explanation by Mr Rogers and/or Mr Blitner to these two matters brought into operation the rule in Jones v Dunkel, the effect of that rule is that an inference may be drawn that their explanation would not have advanced their case. Thus, the rule does not give rise to a positive inference of the kind the Registrar’s submissions appear to suggest, viz that Mr Rogers and/or Mr Blitner knew that the purpose of the trip was to obtain control of the accounts of the Ngukurr Corporation: see Sagacious at [79].

103    For all these reasons, I do not consider there is sufficient evidence from which any inference can be drawn that either Mr Rogers or Mr Blitner knew of the essential facts constituting Mr Ponto and/or Mr Dass’ contravention of s 265-10 of the Aboriginal Corporations Act such that they could be held to have been involved in either of those contraventions. For the same reasons, I do not consider there is any evidence from which it is possible to infer that Mr Rogers and/or Mr Blitner contravened the provisions of either of the alternative sections of the Aboriginal Corporations Act relied upon by the Registrar: ss 265-5 and 284-1. The operation of both of these provisions hinges on them having some direct involvement in the events of late 2009, or some knowledge of the essential facts constituting Mr Ponto and/or Mr Dass’ involvement in those events. For the reasons given above, there is no evidence of the former, and no basis upon which the latter can be inferred.

NELSON HALL – Section 265-10

104    As noted above at [16] and [23], both the CEO employment offer and the 9 December letter contained what purported to be the signatures of Mr Ponto and Mr Hall. However, unlike with the signature of Mr Ponto, which was subsequently verified by him (see [23] above), the Registrar did not tender any evidence to verify Mr Hall’s signature on either of these letters. Admissions made by the other respondents in their examinations with the Registrar’s delegates cannot be used as evidence against Mr Hall: s 83 of the Evidence Act. Therefore, Mr Ponto cannot verify Mr Hall’s signature. Furthermore, as is also noted above (at [21]), shortly after the respondents arrived in Darwin on 9 December 2009 Mr Hall left the group for several days and was therefore not present at the Westpac Bank branch on 9 December 2009. Since there is no evidence to establish that Mr Hall had any involvement in any of the critical events of late 2009, it necessarily follows that there is no evidence to support a finding that he contravened any of the sections of the Aboriginal Corporations Act relied upon by the Registrar, viz s 265-10, 265-5 or 284-1 (see above at [50]).

Discretion to make declarations under section 386-1

105    Section 386-1 of the Aboriginal Corporations Act provides:

Meaning of civil penalty provisions and declarations

(1)    If a Court is satisfied that a person has contravened 1 of the following provisions, it must make a declaration of contravention:

(a)    subsections 265-1(1), 265-5(1) and (2), 265-10(1) and (2) and 265-15(1) and (2) (officers' duties);

(b)    subsection 284-5(2) (related parties rules);

(c)    subsection 363-1(1) (requirements for record keeping and reports);

(d)    subsection 588G(2) of the Corporations Act (as applied by section 531-1 of this Act) (insolvent trading).

These provisions are the civil penalty provisions.

Note: Once a declaration has been made, the Registrar can then seek a pecuniary penalty order (section 386-10) or a disqualification order (section 279-15).

Declarations to specify certain matters

(2)    A declaration of contravention must specify the following:

(a)    the Court that made the declaration;

(b)    the civil penalty provision that was contravened;

(c)    the person who contravened the provision;

(d)    the conduct that constituted the contravention;

(e)    the Aboriginal and Torres Strait Island corporation affected by the contravention.

106    Since I have found Mr Ponto and Mr Dass contravened s 265-10(1), I will proceed in accordance with s 386-1(1)(a) to make the following declarations:

1.    In contravention of s 265-10 of the Corporations (Aboriginal and Torres Strait Island) Act 2006 (Cth) (the Aboriginal Corporations Act), Mr Simon Ponto, the first respondent, misused his position as a director of the Ngukurr Progress Aboriginal Corporation (the Ngukurr Corporation) by purporting to appoint Mr Dwarka Dass, the fifth respondent, Chief Executive Officer to gain an advantage for himself and Mr Dwarka Dass, the fifth respondent.

2.    In contravention of s 265-10 of the Aboriginal Corporations Act, Mr Simon Ponto, the first respondent, misused his position as a director of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to provide internet banking facilities and credit card facilities to himself and Mr Hall for various bank accounts of the Ngukurr Corporation to gain an advantage for himself.

3.    In contravention of s 265-10 of the Aboriginal Corporations Act, Mr Simon Ponto, the first respondent, misused his position as a director of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to transfer $3,500 per fortnight from 9 December 2009 from the account of the Ngukurr Corporation titled “Ngukurr Store” to an account in the name of “Dwarka Dass” with the Westpac Banking Corporation Ltd to gain an advantage for Mr Dwarka Dass, the fifth respondent.

4.    In contravention of s 265-10 of the Aboriginal Corporations Act, Mr Dwarka Dass, the fifth respondent, misused his position as an officer of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to provide internet banking facilities and credit card facilities to Mr Ponto and Mr Hall for various bank accounts of the Ngukurr Corporation to gain an advantage for Mr Ponto, the first respondent.

5.    In contravention of s 265-10 of the Aboriginal Corporations Act, Mr Dwarka Dass, the fifth respondent, misused his position as a officer of the Ngukurr Corporation by purporting to instruct the Westpac Banking Corporation Ltd to transfer $3,500 per fortnight from 9 December 2009 from the account of the Ngukurr Corporation titled “Ngukurr Store” to an account in the name of “Dwarka Dass” with the Westpac Banking Corporation Ltd to gain an advantage for himself.

Imposition of a disqualification

107    As the note to s 386-1 records, once a declaration of contravention has been made, the Registrar can also seek a disqualification order under s 279-15 of the Aboriginal Corporations Act. The latter section provides:

(1)    On application by the Registrar, the Court may disqualify a person from managing Aboriginal and Torres Strait Islander corporations for a period that the Court considers appropriate if:

(a)    a declaration is made under:

(i)    section 386-1 (civil penalty provision) that the person has contravened a civil penalty provision; or

(ii)    section 1317E of the Corporations Act (civil penalty provision) that the person has contravened a corporation/scheme civil penalty provision (within the meaning of that Act); and

(b)    the Court is satisfied that the disqualification is justified.

(2)    In determining whether the disqualification is justified, the Court may have regard to:

(a)    the person's conduct in relation to the management, business or property of any Aboriginal and Torres Strait Islander corporation or Corporations Act corporation; and

(b)    any other matters that the Court considers appropriate.

108    As with each of the other provisions of the Aboriginal Corporations Act involved in this matter, s 386-1 has not yet been the subject of judicial consideration. However, according to the Revised Explanatory Memorandum for the Corporations (Aboriginal and Torres Strait Islander) Bill 2006, this provision is based on s 206C of the Corporations Act. Assistance may therefore be gained from the authorities identifying the principles relevant to that provision.

Relevant principles

109    Those principles have been comprehensively summarised by Santow J in Re HIH Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80; [2002] NSWSC 483 (Adler) at 97–99. While this summary is lengthy, it is useful to set it out in full (with citations omitted):

(i)    Disqualification orders are designed to protect the public from the harmful use of the corporate structure or from use that is contrary to proper commercial standards;

(ii)    The banning order is designed to protect the public by seeking to safeguard the public interest in the transparency and accountability of companies and in the suitability of directors to hold office;

(iii)    Protection of the public also envisages protection of individuals that deal with companies, including consumers, creditors, shareholders and investors;

(iv)    The banning order is protective against present and future misuse of the corporate structure;

(v)    The order has a motive of personal deterrence, though it is not punitive;

(vi)    The objects of general deterrence are also sought to be achieved;

(vii)    In assessing the fitness of an individual to manage a company, it is necessary that they have an understanding of the proper role of the company director and the duty of due diligence that is owed to the company;

(viii)    Longer periods of disqualification are reserved for cases where contraventions have been of a serious nature such as those involving dishonesty;

(ix)    In assessing an appropriate length of prohibition, consideration has been given to the degree of seriousness of the contraventions, the propensity that the defendant may engage in similar conduct in the future and the likely harm that may be caused to the public;

(x)    It is necessary to balance the personal hardship to the defendant against the public interest and the need for protection of the public from any repeat of the conduct;

(xi)    A mitigating factor in considering a period of disqualification is the likelihood of the defendant reforming;

(xii)    The eight criteria to govern the exercise of the court's powers of disqualification set out in Commissioner for Corporate Affairs (WA) v Ekamper have been influential. It was held that in making such an order it is necessary to assess:

•    character of the offenders;

•    nature of the breaches;

•    structure of the companies and the nature of their business;

•    interests of shareholders, creditors and employees;

•    risks to others from the continuation of offenders as company directors;

•    honesty and competence of offenders;

•    hardship to offenders and their personal and commercial interests; and

•    offenders’ appreciation that future breaches could result in future proceedings.

(xiii)    Factors which lead to the imposition of the longest periods of disqualification (that is disqualifications of 25 years or more) were:

•    large financial losses;

•    high propensity that defendants may engage in similar activities or conduct;

•    activities undertaken in fields in which there was potential to do great financial damage such as in management and financial consultancy;

•     lack of contrition or remorse;

•    disregard for law and compliance with corporate regulations;

•    dishonesty and intent to defraud;

•    previous convictions and contraventions for similar activities.

(xiv)    In cases in which the period of disqualification ranged from 7–12 years, the factors evident and which lead to the conclusion that these cases were serious though not “worst cases”, included:

(a)    serious incompetence and irresponsibility;

(b)    substantial loss;

(c)    defendants had engaged in deliberate courses of conduct to enrich themselves at others’ expense, but with lesser degrees of dishonesty;

(d)    continued, knowing and wilful contraventions of the law and disregard for legal obligations;

(e)    lack of contrition or acceptance of responsibility, but as against that, the prospect that the individual may reform;

The difficulty with Roussi’s case is that disqualification for 10 years was ordered, as this was the period of disqualification that the ASC had sought. Had a longer period been applied for, Einfeld J may have considered giving a longer period.

(xv)    The factors leading to the shortest disqualifications, that is disqualifications for up to 3 years were:

(f)    although the defendants had personally gained from the conduct, they had endeavoured to repay or partially repay the amounts misappropriated;

(g)    the defendants had no immediate or discernible future intention to hold a position as manager of a company;

(h)    in Donovan’s case, the respondent had expressed remorse and contrition, acted on advice of professionals and had not contested the proceedings;

Registrar’s submissions on disqualification

110    The Registrar submitted that each (now only the first and fifth respondents) of the respondents should be disqualified for a period of five years. In support of this period of disqualification, he relied upon the following matters:

(a)    the contraventions placed the Ngukurr Corporation, and therefore the essential service provided by the Ngukurr store, in jeopardy;

(b)    the source of the funds held by the Ngukurr Corporation was a combination of public moneys, to build a much needed new store, and community funds from trading;

(c)    Mr Dass’ submissions demonstrated a lack of understanding regarding corporate governance. It is therefore concerning that Mr Ponto was willing to make the CEO employment offer and “effectively place the management of the Corporation in his hands”;

(d)    none of the respondents has demonstrated contrition or remorse and they “put the Registrar to proof of every element of the case”;

(e)    the respondents deliberately sought to enrich Mr Ponto, Mr Hall and Mr Dass personally, at the expense of the public and the Ngukurr community;

(f)    the respondents’ conduct involved an abuse of the trust placed in them and demonstrated that they were either seriously incompetent or irresponsible in the discharge of their duties; and

(g)    a disqualification period of five years would deter the respondents from engaging in further such conduct and generally deter directors in remote communities from jeopardising essential services by engaging in similar conduct.

Mr Dass’ submissions on disqualification

111    Mr Dass was the only respondent to make submissions on the question of disqualification. He contended that no disqualification order should be made at all. He claimed the allegation that he jeopardised the funds of the Ngukurr Corporation and thereby the Ngukurr store was “baseless” and “made up”. Mr Dass submitted that his actions were intended to revive the Ngukurr Corporation which was an “empty shell”. He denied any wrongdoing.

Mr PONTO’s appropriate disqualification period

112    It is unnecessary to reiterate the detail of Mr Ponto’s contravening conduct. In short, he misused his position as Chairman of the Board of directors of the Ngukurr Corporation in an attempt to take control of the bank accounts of the Corporation without prior approval of the Board, with the aim of regaining control of the Corporation. In the process, he put at risk the orderly management and operation of the Ngukurr store. Consequently, he breached the trust and confidence that the members of the Ngukurr Corporation and, indeed, the Ngukurr community as a whole, necessarily reposed in him as a director of the Corporation charged with the responsibility of ensuring the successful operation of an essential community service, viz the Ngukurr store. His conduct therefore fell well short of the proper standard reasonably expected of a director of such an important Aboriginal corporation.

113    Because of the trust and confidence that is very often placed in the directors of such important Aboriginal corporations, I agree with the Registrar’s submissions that general deterrence is a central factor in the assessment of an appropriate period of disqualification in this matter. Directors of similar Aboriginal corporations throughout Australia and particularly in remote communities must understand that they carry heavy responsibilities to their local communities when they are discharging their duties as directors to provide essential community services such as a community store. Thus, the fixing of a disqualification period in this case will partly serve to indicate on behalf of the broader community that it will not tolerate such directors putting their personal interests and ambitions for power and influence in Aboriginal corporations ahead of the interests of the local community they are there to serve.

114    Specific deterrence is a less important factor with Mr Ponto. As Santow J said in Adler (at [109] above), the primary purpose of a disqualification of this type is to protect the public from a repetition of similar behaviour by directors and officers of corporations. The personal deterrence factor is therefore not intended to be punitive. During his s 453 examination, Mr Ponto told the examiners that he was born on 4 June 1968 so he is now 44 years of age. He completed Year 9 at school, but otherwise he has no educational or training qualifications. At the time of his examination, he was a married man with three children. He was employed as a ranger by the Northern Land Council and had been for 10–11 years. He claimed not to know how to use the internet or to operate a computer. He has lived in the Ngukurr region all of his life. In addition to these matters which I will take into account, I think I can safely assume that Mr Ponto must have been held in reasonably high regard in the Ngukurr community to have been elected the Chairman of the Ngukurr Corporation. I do not know whether Mr Ponto has any intentions to serve as a director again of an Aboriginal corporation. If, as appears likely, he intends to continue to reside in the Ngukurr region, the opportunities for that would appear to be limited to Aboriginal corporations like the Ngukurr Corporation. The effect of the declarations of contravention and the disqualification in these proceedings would appear likely to significantly limit Mr Ponto’s opportunities in this regard. I will therefore proceed on the basis that Mr Ponto is unlikely to seek to serve as a director of an Aboriginal corporation in the future.

115    It is true, as the Registrar submits, that Mr Ponto has not expressed any remorse for his conduct. However, this must be viewed in light of the fact that Mr Ponto did not take any part in these proceedings at all.

116    There is a number of mitigating factors that I consider place the appropriate period of disqualification for Mr Ponto in the shortest category identified in Adler. First, while Mr Ponto’s conduct was plainly self-centred and quite foolhardy, I do not consider there is evidence to support a conclusion that he was motivated by personal gain. Instead, I infer that he was motivated by what he thought were the best interests of the Ngukurr Corporation, albeit that he was clearly in a minority within the Ngukurr community. I therefore reject the submissions made by the Registrar which seem to suggest that Mr Ponto intended to misappropriate the Ngukurr Corporation’s funds for his personal benefit (see at [110(e)] above). There is also no evidence that Mr Ponto is of bad character or that he has previously committed any similar contraventions. Further, Mr Ponto’s contraventions did not involve a consistent or systematic misuse of his position as a director of the Ngukurr Corporation. Instead, his contravening conduct was limited to a very short period – a matter of days. Finally, while this is largely due to the naïve and foolish nature of his plans, I take into account the fact that neither the Ngukurr Corporation, nor the Ngukurr community, actually suffered any loss from his contravening conduct.

117    Having regard generally to the factors outlined in Adler (see at [109] above) and to the specific matters I have outlined above, in all the circumstances of Mr Ponto’s case, I consider that a disqualification from managing Aboriginal corporations for a period of three years is appropriate.

MR DASS’ appropriate Disqualification period

118    It is also unnecessary to reiterate the detail of Mr Dass’ contravening conduct. It is of a similar nature to that of Mr Ponto’s outlined above (see at [112]), albeit that Mr Dass was not the Chairman, nor an elected director of the Ngukurr Corporation, but instead he was acting as an officer of the Corporation at the critical period in late 2009. As a volunteer, Mr Dass had a unique opportunity to assist the Ngukurr Corporation and, through it, the Ngukurr community with his skills and lengthy experience as an accountant and auditor. There is little doubt that the directors of the Ngukurr Corporation saw Mr Dass as a person in whom they could impose trust and confidence. Instead of responding to that trust and confidence by putting his skills and experience to use to assist the Corporation and the community, he abused it by assisting, if not initiating, Mr Ponto’s self-centred and foolhardy plans to regain control of the Ngukurr Corporation. I say “if not initiating” because Mr Dass is much older than Mr Ponto and by his education and experience as an accountant, he had much more knowledge about the financial and banking operations of an Aboriginal corporation like the Ngukurr Corporation than Mr Ponto is likely to have had. I therefore infer that Mr Dass was more likely than Mr Ponto to have devised the plan to attempt to regain control of the Ngukurr Corporation by drafting the 9 December letter and attempting to use it at the Westpac Bank on 9 December to access and take control over the bank accounts of the Corporation.

119    It follows that the general deterrence factor outlined above (at [113]) is equally applicable to the assessment of an appropriate disqualification period for Mr Dass, if not more so. It is fitting that Mr Dass’ disqualification period should provide an indication to all outside volunteers providing their specialised knowledge and experience to Aboriginal corporations in circumstances similar to this case that, if they abuse the trust and confidence that is placed in them by those Aboriginal corporations as volunteers, they can expect to be dealt with sternly by the Court.

120    Turning to specific deterrence, in the affidavit he filed at a late stage of these proceedings (see at [34]) above, Mr Dass said, among other things, that he was 75 years old and that he lived alone in public housing in Canberra. He claimed that after his retirement from the National Audit Office in 1989, he made his skills as an accountant available through Community Volunteers to various Aboriginal communities in Australia including in the Kimberley region of Western Australia and in South Australia. He claimed not to have previously been accused of any impropriety of the kind he is accused of in these proceedings and, like Mr Ponto, there is no evidence that he is of bad character, or has committed any similar contraventions in the past.

121    On the question of remorse, Mr Dass is in a peculiar situation. He appeared to show remorse at the Canberra part of the hearing of these proceedings by stating that he consented to all the declarations of contravention sought by the Registrar and, eventually, to the imposition of a five year disqualification period. However, he later reneged on that position (see at [34] above). In his affidavit filed in these proceedings, he said on a number of occasions that the allegations the Registrar has made against him in these proceedings were “baseless”, or words to similar effect. Surprisingly, given his qualifications and experience as an accountant, his affidavit displays little, if any, insight to the nature and extent of his contravening conduct in late 2009. Nonetheless, as noted above (at [114]), the primary purpose of a disqualification period of this kind is public protection rather than it being punitive. In this respect, the declarations of contravention and the disqualification order in these proceedings are likely to have a similar effect on Mr Dass, as those outlined above (see at [114]) for Mr Ponto. Specifically, I consider it is highly unlikely that Community Volunteers will use Mr Dass again as a volunteer on Aboriginal communities. The potential, therefore, for Mr Dass to work again as an officer of an Aboriginal corporation must be considered to be extremely limited.

122    It follows that each of the mitigating factors mentioned in relation to Mr Ponto (see at [116]) apply with similar effect to Mr Dass. As with Mr Ponto, I do not consider there is sufficient evidence to attribute any dishonest motive to Mr Dass. Nonetheless, his behaviour in drafting and accepting the offer of appointment as CEO of the Ngukurr Corporation was opportunistic and patently self-serving. He also breached the trust imposed in him by the members of the Ngukurr community and he has demonstrated a high degree of incompetence and foolishness.

123    In all the circumstances I have outlined above, I therefore consider four years to be an appropriate period of disqualification for Mr Dass.

Costs

124    The Registrar sought an order that Mr Dass alone should be ordered to pay the costs of this proceeding. While five reasons were given, they essentially reduced to a complaint that, by his active involvement in the hearing, including his attempts to cross-examine many of the witnesses, Mr Dass unnecessarily lengthened the hearing and increased the cost of it.

125    As noted above (at [37]), Mr Dass was the only respondent to appear at all the hearing days and to take an active role in the proceedings. While he cross-examined many of the Registrar’s witnesses, that was his right as a respondent in the proceedings. It may also be acknowledged that Mr Dass’ attempts at cross-examination were largely misdirected and ineffective. However, that occurs with many self-represented litigants who, like Mr Dass, have no legal training. While this undoubtedly lead to the hearing taking longer than expected, I do not consider these matters justify imposing all the costs of these proceedings on Mr Dass.

126    The usual rule is that the costs should follow the event. In all the circumstances, I therefore consider the two respondents against whom the Registrar has been successful (Mr Ponto and Mr Dass) should be ordered to pay the Registrar’s costs. This order is not intended to include any costs incurred by the Registrar that were solely directed to pursuing the successful respondents – Mr Rogers, Mr Blitner and Mr Hall.

Associate:

Dated:    24 December 2012