Federal Court of Australia

Registrar of Aboriginal and Torres Strait Islander Corporations v Cobus [2026] FCA 1391

ORDERS

Pursuant to s 386-1(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act), upon admissions which the respondent is taken to have made consequent upon defaults under the Federal Court Rules 2011 (Cth) and the evidence adduced:

THE COURT DECLARES THAT:

1. The respondent in his role as a director of Nguurruumungu Indigenous Corporation (ICN 7592) (Corporation) contravened ss 265-1(1), 265-5(1) and 265-10(1) of the CATSI Act on seven separate occasions by:

(a) failing to exercise his powers and discharge his duties as a director of the corporation with the degree of care and diligence that a reasonable person would exercise if that reasonable person were a director of a corporation in the Corporation’s circumstances and occupied the office held by the respondent and had the same responsibilities as him;

(b) failing to exercise his powers and discharge his duties as a director of the Corporation in good faith in the best interests of the Corporation and for a proper purpose; and

(c) improperly using his position as a director of the Corporation to gain an advantage for himself and cause detriment to the Corporation,

by causing the Corporation to pay $482,478.04 to his own benefit in the following payments:

(i) $42,726.00 on 14 July 2022;

(ii) $75,800.00 on 2 August 2022;

(iii) $100,898.04 on 1 November 2022;

(iv) $84,500.00 on 4 January 2023;

(v) $101,790.00 on 10 February 2023;

(vi) $66,164.00 on 5 May 2023; and

(vii) $10,600.00 on 23 August 2023;

in circumstances where, contrary to the Corporation’s Rule Book:

A. those payments were not approved by the directors of the Corporation at a directors’ meeting or by the members of the Corporation at a general meeting; and

B. the payments were not in furtherance of the Corporation’s objectives.

2. The respondent in his role as a director of the Corporation contravened ss 265-1(1) and 363-1(1) of the CATSI Act by failing to:

(a) exercise his powers and discharge his duties as a director of the Corporation with the degree of care and diligence that a reasonable person would exercise if that reasonable person were a director of a corporation in the Corporation’s circumstances and occupied the office held by the respondent and had the same responsibilities as him; and

(b) take all reasonable steps to ensure the Corporation complied with Part 7-2 of the CATSI Act, by failing to ensure the Corporation kept written financial records as required by s 322-10(1) of the CATSI Act that:

(i) correctly record and explain each of the payments by the Corporation listed in paragraph 1 above and the following payments (being a total of $783,957.39):

A. $51,284.00 on 3 August 2022;

B. $67,265.35 on 1 November 2022;

C. $59,692.21 on 5 January 2023;

D. $67,861.75 on 9 February 2023;

E. $50,176.04 on 5 May 2023;

(ii) correctly record and explain the Corporation’s financial position and performance for the period 1 July 2022 to 23 August 2023; and

(iii) would enable true and fair financial reports to be prepared and audited for the period 1 July 2022 to 23 August 2023.

THE COURT ORDERS THAT:

3. Pursuant to s 279-15(1) of the CATSI Act, the respondent be disqualified from managing Aboriginal and Torres Strait Islander corporations for five years.

4. Pursuant to s 386-10(1) of the CATSI Act, within 30 days of these orders the respondent pay to the Commonwealth a pecuniary penalty in the amount of $200,000 in respect of his contraventions of ss 265-1(1), 265-5(1), 265-10(1) and 363-1(1) of the CATSI Act the subject of the declarations in paragraphs 1, 2 and 3 above.

5. Pursuant to s 386-15(1) of the CATSI Act, the respondent compensate the Corporation for the damage suffered by the Corporation in respect of his contraventions of ss 265-5(1) and 265-10(1) of the CATSI Act the subject of the declaration in paragraph 1 above in the amount of $482,478.04.

6. Pursuant to s 581-20(2) of the CATSI Act, the respondent pay the applicant’s costs of the proceeding.

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

REASONS FOR JUDGMENT

STEWART J:

Introduction

1 The applicant is the Registrar of Aboriginal and Torres Strait Islander Corporations, appointed pursuant to s 653-1(2) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).

2 The respondent was a director of the Nguurruumungu Indigenous Corporation (ICN 7592) (referred to as NIC) from 21 July 2011 to 11 November 2024. That covers the 13-month period 1 July 2022 to 3 August 2023, which is referred to as the relevant period. It is the period in which the respondent’s conduct which is dealt with further below occurred. NIC is registered under the CATSI Act.

3 In this proceeding, commenced by an originating application supported by a statement of claim, the applicant claims that the respondent has breached various of his obligations as a director of a corporation registered under the CATSI Act. The applicant seeks declarations, penalties, disqualification orders and an order that compensation be paid to NIC.

4 Although the respondent ultimately appeared remotely at the final hearing of the matter, the applicant applies for orders against the respondent by default under r 5.23 of the Federal Court Rules 2011 (Cth). It is accordingly necessary to consider the respondent’s defaults.

The respondent’s many defaults

5 On 25 February 2026, the respondent was personally served with the originating application and statement of claim.

6 On 3 March 2026, the Court notified the parties by email that the matter had been listed for its first case management hearing on 20 March 2026. As the respondent had not filed an address for service, an email address previously used by him was used for this purpose.

7 On 6 March 2026, the respondent replied by email. He stated in the email that he lives in Cooktown, he is 73 years old, his wife had recently passed away, he is “quite frail” and he wished to seek financial support in order to get legal advice. He requested that the first case management hearing be adjourned for four weeks to allow him to do so.

8 In an exchange of emails, including with the respondent, the proceeding was then listed for its first case management hearing on 24 April 2026.

9 The respondent appeared remotely at the first case management hearing on that day. Orders were made requiring the respondent file and serve a defence by 4:00pm on 22 May 2026 and listing the proceeding again for case management on 12 June 2026. Given the respondent’s appearance that day, I am satisfied that he was notified and aware of the orders that were made.

10 The respondent failed to file a defence as ordered. That constitutes a default by the respondent under r 5.22(b) of the Rules, ie failure to comply with an order of the Court.

11 The respondent also failed to appear at the case management hearing on 12 June 2026. That constitutes a default by the respondent under r 5.22(c) of the Rules, ie failure to attend a hearing in the proceeding. Rule 5.01 requires that a party or the party’s lawyer attend any hearing in a proceeding.

12 Also, the respondent failed to file a notice of address for service before the first case management hearing (or at all) as required by r 5.02 of the Rules. That constitutes a default under r 5.22(a), ie failure to do an act required to be done by the Rules.

13 On 12 June 2026, the respondent was ordered to file a defence by 26 June 2026, failing which the matter would be listed for default judgment on 2 July 2026. The orders were emailed to the respondent at the email address that he had previously used to communicate with the Court and with the applicant.

14 The respondent failed to file a defence by 26 June 2026, once again being in default. He also failed to appear on the application for default judgment on it being called that morning. The application was not dealt with that day as I was not persuaded that the application should be bifurcated, as sought by the applicant, with only declaratory relief dealt with that day and the remaining relief to be dealt with sometime in the future. I relisted the matter for final hearing on 16 September 2026. The respondent was given notice of the listing by way of email.

15 On 9 September 2026, the respondent emailed the Court requesting to “attend” the hearing remotely. The following day, he was informed by the Court that he could attend remotely and an AVL link was sent to him for that purpose. As mentioned, the respondent appeared remotely when the matter was called. However, he had still not filed an address for service, a defence or any evidence.

16 The respondent mentioned that he “had someone organising a lawyer for me … they was (sic) here for a while and they got up and just took off without any notification”. Nevertheless, the respondent said that he was content for the hearing to proceed.

17 The applicant submits, and I accept, that the respondent’s many defaults taken together constitute yet a further default, being a failure to defend the proceeding with due diligence: r 5.22(d).

18 In those circumstances, the Court’s power to make orders on default in the applicant’s favour under r 5.23(2) is enlivened.

Judgments by default: principles

19 The relevant principles for the exercise of the power to order a judgment in default are uncontroversial. With reference to Chamberlain Group Inc v Giant Alarm System Co Ltd (No 2) [2019] FCA 1606 (Chamberlain Group) at [13] per Yates J, they include the following:

(1) The power is discretionary;

(2) The discretion must be exercised cautiously; and

(3) There is no requirement that the act or acts of default are intentional or amount to contumelious conduct or that they result in inordinate or inexcusable delay.

20 Rule 5.23(2)(c) provides that if a respondent is in default in a proceeding that was started by an originating application supported by a statement of claim, an applicant may apply to the Court for an order giving judgment against the respondent for the relief claimed in the statement of claim “to which the Court is satisfied that the applicant is entitled”. That means that the Court must be satisfied that “on the face of the statement of claim” the applicant is entitled to the relief that is claimed: CNIP Pty Ltd v Chan & Naylor Norwest Pty Ltd (No 2) [2011] FCA 1170 at [18]-[19] per Perram J. There is no need to adduce evidence to prove the factual contentions, the allegations of fact in the statement of claim being taken as deemed to have been admitted: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513 at [42] per Moore, Dowsett and Greenwood JJ. See Chamberlain Group at [14] for the application of those principles to the current Rules.

21 Notwithstanding that position on the pleadings, the applicant has adduced considerable evidence in support of its claims. That evidence is compelling and unanswered. In what follows, I rely on the deemed admissions on the pleadings as well as on the evidence.

The relief sought

22 The applicant seeks declarations of contravention of various provisions of the CATSI Act as well as an order that the respondent compensate NIC for the damage suffered by it in the amount of $482,478.04. The applicant also seeks an order that the respondent be disqualified from holding the office of director of an Aboriginal and Torres Strait Islander corporation under the CATSI Act for a period of five years and an order for pecuniary penalties in the sum of $200,000. The applicant also seeks the costs of the proceeding.

23 The Court has jurisdiction to grant the relief sought by the applicant: s 586-5(1) of the CATSI Act.

The respondent’s contravening conduct

24 NIC is a party to an agreement governing the distribution of mining royalties and income from the Cape Flattery Silica Mine and other payments received by Hopevale Congress Aboriginal Corporation RNTBC (ICN 3135) amongst the Hopevale community. The income of NIC over the relevant period came exclusively from the Hopevale Congress. It amounted to $741,230.65, all of which was paid into NIC’s bank account.

25 In the same period, the sum of $783,957.39 was withdrawn from NIC’s bank account in 12 cheque payments. The respondent caused all 12 payments to be made, sometimes on his own and sometimes in concert with others. It is that conduct of his that is the subject of the applicant’s claims. As will be seen, the payments can be divided into a group of seven and another group of five.

26 On seven occasions the applicant drew cheques on NIC’s bank account which he deposited to a bank account in the name of “Brian Neil Cobus t/as Cobus Enterprises”. Throughout the relevant period, the respondent was the registered owner of the business name “Cobus Enterprises”. He was also one of two signatories on the Cobus Enterprises account.

27 In respect of five of the seven cheque payments, the whole amount of the cheque was credited to his account. On the other two occasions, the cheque was partly cashed and the balance deposited to the respondent’s account. The cash amounts were $200 and $5,000. The sum of the deposits to the respondent’s account is $482,468.04.

28 The payments to the Cobus Enterprises account were used by the respondent to pay his personal expenses. The applicant’s analysis of payments from that account shows the following categories of payments to have been made in the relevant period:

(1) subscription fees for streaming services and online games: $21,891.95;

(2) utility payments: $8,411.74;

(3) food, takeaway and eating out payments: $57,573.43;

(4) home and hardware payments: $28,426.87;

(5) travel and accommodation payments: $15,291.96;

(6) vehicle related payments: $72,368.21;

(7) payments to the Cooktown Shire Council, Cooktown Court House and Cooktown Queensland Government Agent (QGAP) Program: $11,805.87;

(8) legal fees: $11,356;

(9) payments to individuals: $64,792.69;

(10) overseas transactions and associated fees: $5,795.67;

(11) buy now, pay later service fees: $878.18;

(12) cash withdrawals: $80,864.50; and

(13) investment payments: $3,347.10.

29 On that evidence, I am satisfied that the payments to the Cobus Enterprises bank account were misappropriated by the respondent for his own personal benefit. They were not in the best interests of NIC, they were not for a proper purpose of NIC, and they were not in furtherance of the objectives of NIC.

30 There is no evidence as to what occurred with the $5,200 that was appropriated from the cheque payments in cash. I would be prepared to infer that it too was taken by the respondent for his own benefit, but in the absence of any evidence of how the cash was used the applicant asks the Court to assume in the respondent’s favour that it was used for the purposes of NIC’s business. I will make that assumption to the respondent’s benefit.

31 Turning now to the balance of the payments (ie the second grouping constituting five payments), $296,279.35 was paid by way of five cheques drawn on NIC’s bank account and payable to “Yulgunjii Corporation” (or variant spellings of that name), “bearer” or “cash”. Of that sum, $183,714 was deposited into the account of the Yulgunjii Indigenous Corporation (ICN 8057). That leaves a balance of $112,565.35 unaccounted for. As with the $5,200 in cash already discussed, the applicant is prepared to assume that that sum was spent in furtherance of the aims and purposes of NIC notwithstanding there being no record of how it was spent.

32 Indeed, the absence of accounting records is true of all the expenditure in question, ie all 12 payments. That is to say, the respondent failed to keep financial records that correctly record and explain payments made by NIC totalling $783,957.39 (including the amount already referred to which was paid to the respondent’s benefit).

33 The corporation did not keep any records of any of the 12 cheque payments. It has no records that record or explain the purpose for which the cheques were drawn or how the funds obtained by means of those cheques were applied. In the absence of such records, true and fair financial statements could not be prepared or audited.

34 Relevantly, s 322-10(1) (in Pt 7-2) of the CATSI Act provides that an Aboriginal and Torres Strait Islander corporation must keep written financial records that correctly record and explain its transactions and financial position and performance and that would enable true and fair financial reports to be prepared and audited.

35 There is a further difficulty which is that the payments were not authorised by NIC. In that regard, NIC has a rule book that establishes the internal governance, rules and objectives of the corporation. The rule book includes (in cl 7) obligations on the corporation to keep financial records that correctly record and explain the corporation’s transactions and financial position and that would enable true and fair financial reports to be prepared and audited. The rule book also includes (in cl 8) the requirement that all payments made out of the corporation’s money must be supported by adequate documents which explain the nature and purpose of the payment and, critically, all accounts must be approved for payment at a directors’ meeting or in accordance with valid delegations.

36 The respondent failed to obtain approval from the directors of NIC for the payments as required by cl 8 of NIC’s rule book. Also, in respect of the transactions to his own benefit (ie financial benefit to a related party of the corporation) the respondent failed to obtain approval from the members of NIC as also required by s 284-1(1) of the CATSI Act.

37 In those factual circumstances, the respondent has contravened provisions of the CATSI Act as follows.

38 In respect of the seven payments made to Cobus Enterprises for his own benefit, which were made without approval of the directors at a directors’ meeting or by members of NIC at a general meeting, and which were not made in furtherance of NIC’s objectives, the respondent was in breach of several obligations on him as a director, namely:

(1) s 265-1(1): the duty as a director of NIC to exercise his powers and discharge his duties with the degree of care and diligence that a reasonable person would exercise in the circumstances;

(2) s 265-5(1): the duty as a director of the corporation to exercise his powers and discharge his duties in good faith in the best interests of the corporation and for a proper purpose;

(3) s 265-10(1): his duty as a director of the corporation not to improperly use his position to gain an advantage for himself or someone else or to cause detriment to the corporation.

39 In respect of all 12 payments, the respondent was in breach of the following duties by failing to ensure that NIC kept written financial records as required by s 322-10(1) that correctly record and explain each of the payments, that correctly record and explain the corporation’s financial position and performance for the relevant period and that would enable true and fair financial reports to be prepared and audited for the relevant period:

(1) s 265-5(1): the duty as a director of the corporation to exercise his powers and discharge his duties in good faith in the best interests of the corporation and for a proper purpose;

(2) s 363-1(1): the duty as a director of the corporation to take all reasonable steps to comply with, or to secure compliance with, Pt 7-2 (Record-keeping requirements) of the CATSI Act.

40 I am satisfied that declarations should be made to that effect.

Disqualification order

41 In Gillfillan v Australian Securities and Investments Commission [2012] NSWCA 370; 92 ACSR 460 at [330] per Sackville AJA, Beazley JA and Barrett JA agreeing, it was said that a pecuniary penalty should be imposed only if an order for disqualification is an inadequate or inappropriate remedy. That means that the Court should consider disqualification before considering any penalty: Australian Securities and Investments Commission v Forex Capital Trading Pty Ltd [2021] FCA 570 at [112] per Middleton J.

42 Section 279-15(1) provides that 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 declaration is made under s 386-1 (civil penalty provision) that the person has contravened a civil penalty provision. That power is enlivened in the present case in view of my conclusions above with regard to declarations of contraventions.

43 In deciding whether disqualification is justified, the court may have regard to the person’s conduct in relation to the management, business or property of the corporation and any other matters that the court considers appropriate: s 279-15(2). The principles that guide the exercise of the court’s power to disqualify under the Corporations Act 2001 (Cth) are apt to guide the exercise of that power in the CATSI Act: Registrar of Aboriginal and Torres Strait Islander Corporations v Matcham (No 2) [2014] FCA 27; 97 ACSR 412 (Matchaam No. 2) at [164] per Jacobson J. The primary purpose of a disqualification order is the protection of the public: Cruickshank v Australian Securities and Investments Commission [2022] FCAFC 128; 292 FCR 627 at [144] per Allsop CJ, Jackson and Anderson JJ.

44 As mentioned, the applicant seeks an order that the respondent be disqualified for a period of five years. That is a long period. However, given the nature of the respondent’s conduct I am satisfied that it is justified; indeed, necessary. Salient features of that conduct include that the respondent paid himself nearly half a million dollars which accounted for approximately 65% of the total revenue of NIC in the relevant period. That conduct is aggravated by the respondent having taken no steps to keep any records of the purpose of the cheques or the persons or entities in whose favour they were drawn and delivered. That conduct resulted in considerable detriment to NIC. It was dishonest and reckless, and in breach of the respondent’s position of trust within NIC as a director and officer.

45 The respondent’s attitude to these proceedings, exemplified by his many defaults and the delays that he has caused, can give no confidence that he can be trusted with the management of any corporation in the future. The respondent is currently a director of the Yuuru Aboriginal Corporation (ICN 7595) and Ambiilmungu-Ngarra Aboriginal Corporation (ICN 2853) which are Aboriginal and Torres Strait Islander corporations registered under the CATSI Act. I also note that the respondent was a director of Hopevale Congress for approximately six years between March 2009 and February 2015 and again for nearly six years between October 2016 and April 2022. He was also a director of the Cape York Land Council Aboriginal Corporation (ICN 1163) from December 2009 to December 2014.

46 The point is that although he is 73 years of age, absent a disqualification order the respondent will continue to be a director of two corporations and he may again take up a position as director, or other management position, in an Aboriginal and Torres Strait Islander corporation.

47 In those circumstances, I consider that a disqualification order with a duration of five years is amply justified.

Pecuniary penalties

48 Section 386-10(1) of the CATSI Act provides that a court may order a person to pay the Commonwealth a pecuniary penalty of up to $200,000 if a declaration of contravention by the person has been made under s 386-1 and (i) the contravention materially prejudices the interests of the corporation affected by the contravention or the interests of its members, or (ii) the contravention materially prejudices the ability of the corporation affected by the contravention to pay its creditors, or (iii) the contravention is serious.

49 I am satisfied that the respondent’s conduct as set out above materially prejudiced the interests of NIC and the interests of its members for the purposes of s 386-10(b)(ii) of the CATSI Act, and is serious within the meaning of s 386-10(b)(iii) of the CATSI Act.

50 Civil penalties are imposed primarily, if not solely, for the purpose of deterrence: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 274 CLR 450 at [15]. A penalty must have the necessary “sting or burden” to secure “the specific and general deterrent effects that are the raison d’être of its imposition”: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; 262 CLR 157 at [116].

51 In the case of the respondent, there are multiple contraventions. Importantly, the wrongdoing encapsulated by s 265-1(1) (care and diligence) and s 265-5(1) (good faith) is in each case subsumed into the breach of s 265-10(1) (use of position): Registrar of Aboriginal and Torres Strait Islander Corporations v Taylor [2018] FCA 900 at [55] per Barker J. As a result, for the contraventions where penalties are to be imposed under s 265-10(1), I will not impose penalties for breaches of s 265-1(1) and s 265-5(1) as well, as that would involve the respondent effectively being penalised more than once for the same conduct. Likewise, where penalties are to be imposed under s 363-1(1), I will not separately impose penalties for breaches of s 265-5(1).

52 The respondent should thus be regarded as having committed 19 contraventions as follows:

(1) ss 265-1(1), 265-5(1) and 265-10(1) – the seven payments to his own benefit without authority, amounting to seven contraventions; and

(2) s 265-5(1) and s 363-1(1) – all 12 payments for failing to maintain proper records, amounting to 12 contraventions.

53 The upper limit of $200,000 applies per contravention. However, where there are multiple contraventions, the Court may have regard to the “course of conduct” principle and the “totality” principle as tools to assist the court to determine the appropriate penalty: Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243 at [226] per Allsop CJ, Middleton and Robertson JJ.

54 Under the course of conduct principle, the Court considers whether the contravening acts or omissions arise out of the same course of conduct or the one transaction, to determine whether it is appropriate that a “concurrent” or single penalty should be imposed for the contraventions: Yazaki Corporation at [234]. It is a question of fact and degree: Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 269 ALR 1 at [39]-[42] per Middleton and Gordon JJ.

55 I consider that each of the payments should be considered separately as constituting a contravention as each is a separate and deliberate act. In contrast, I consider that the failure to keep records is properly regarded as one course of conduct in respect of all the payments. That means that for the purpose of being guided by a maximum penalty, the applicable maximum would be in respect of eight contraventions, ie $1.6 million.

56 The totality principle operates as a “final check” to ensure that the penalties to be imposed on a wrongdoer, considered as a whole, are just and appropriate and that the total penalty for related offences does not exceed what is proper for the entire contravening conduct in question: Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5; 407 ALR 302 at [52].

57 Given the gravity of the respondent’s offending, I am not satisfied that a disqualification order on its own is sufficient general deterrence – it is apt to operate more as specific deterrence. The imposition of civil penalties is not only justified as general deterrence; it is necessary.

58 It is necessary now to turn to some relevant considerations.

59 Circumstances of conduct: The respondent’s conduct in drawing seven cheques on NIC’s account and appropriating the proceeds to his own benefit was deliberate and self-interested. His failure to keep records regarding the twelve cheques he drew on NIC’s account was reckless.

60 Relevant matters personal to the respondent, including hardship and capacity to pay: As mentioned, the respondent is 73 years of age. In an email to the Court on 6 March 2026, the respondent described himself as quite frail and referred to seeking financial support for legal advice. The applicant does not know the respondent’s current financial position or capacity to pay a pecuniary penalty.

61 Contrition or co-operation with applicant: There is no evidence of any contrition or acceptance of responsibility by him. When asked for an explanation in the hearing, he said the following:

Yep. They just stuck it in there and, you know we never got any advice or things like that. And we just shared the two other corporations, Yulgunjii and Cobus Enterprises, fifty-fifty.

62 The respondent has not repaid or sought to repay any of the $482,478.04 that he misappropriated to himself.

63 I accept that the requirements of deterrence are such that an appropriate penalty should be at least equal to, if not greater than, the amount of the unauthorised payment: Matcham No. 2 at [270]. However, allowance must be made for the amount that I will order the respondent to repay to NIC, being the amount that he appropriated to his own benefit and for which NIC accordingly received no benefit.

64 The applicant reaches a penalty figure of $200,000 by applying a multiple of 2 to each of the seven payments and then discounting in each case by varying amounts depending on how much was left in NIC’s account after the payment was made. I do not find that to be a helpful or satisfactory approach to the calculation of an appropriate penalty. I do not see the amount remaining in the accounts after each payment to be of any particular significance. What is significant, is the overall amount of the payments and the number of payments.

65 To my mind, using round figures, an appropriate penalty for the seven payments is one and a half times their total, amounting to approximately $725,000. Then, a further penalty of $75,000 for the failure to keep proper records of all 12 payments is appropriate. That takes the total to $800,000. That should be reduced by $500,000 to account for the compensation order, and a further 30% having regard to the totality of the penalties to arrive at an amount of $210,000. The applicant submits that that should be rounded down to $200,000, which I accept. I consider that a pecuniary penalty of $200,000 is within a range of acceptable penalties in the circumstances.

Compensation order

66 Section 386-15(1) of the CATSI Act provides that a court may order a person to compensate an Aboriginal and Torres Strait Islander corporation for damage suffered by NIC if the person has contravened a civil penalty provision in relation to NIC and the damage resulted from the contravention. The purpose of such an order is purely compensatory; it is not punitive: Matcham No. 2 at [264].

67 On the findings of fact that I have made above, as well as the assumptions in the respondent’s favour that I have been prepared to make, NIC suffered damage in the amount of $482,478.04. That is the amount of NIC’s money that the respondent deposited into his personal account to which he had no entitlement and for which NIC received no benefit. I am satisfied that a compensation order should be made requiring the respondent to repay that amount to NIC.

Costs

68 The applicant’s orders for costs refers to a costs order being made under s 581-20(2) of the CATSI Act, which provides that the costs of any proceeding before the court under the CATSI Act to be borne by such party to the proceeding as the court, in its discretion, directs. That seems to confirm that the broad discretion in relation to costs that the Court otherwise enjoys applies also in proceedings under the CATSI Act.

69 In the exercise of that discretion there is no apparent reason why the respondent should not pay the applicant’s costs of the proceeding. It is the respondent’s conduct as outlined above that has necessitated the proceeding which is brought in the public interest. But for the respondent’s contravening conduct, no proceeding would have been necessary.

Associate:

Dated:    22 September 2026