McKerracher J
In this matter, McKerracher J denied the Buurabalayji Thalanyji Aboriginal Corporation’s (BTAC) application for proceedings, which included the principal proceedings and four cross claims, to be stayed. It was also held that, the Special Administrator appointed to BTAC could not withdraw consent for proceedings to continue once given. Hence, leave was given to the opposing parties for the proceedings to continue).
The matter is a part of ongoing litigation, and the multiple cross claims were discussed in Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd (No 4) [2019] FCA 1275. BTAC is the applicant and the second, third and fourth cross respondent. Onslow Salt is the first respondent and first and fourth cross-claimant. WA is the second respondent and third cross claimant. Chevron is the second cross claimant and first cross respondent. BTAC has held the native title in trust for the Thalanyji people over land in the West Pilbara since 2008. On 10 Jan 2020, BTAC went under administration from 13 Jan until 17 July 2020 . According to s 440D(1) of the Corporations Act, proceedings against BTAC cannot continue during administration, except with consent of the special administrator or court leave.
Consent Withdrawal
The special administrator gave consent for proceedings against BTAC to continue on 14 Jan 2020. Upon finding BTAC was in millions of dollars of debt, and meeting with BTAC members, the special administrator sought to withdraw the consent.
Onslow Salt and WA submitted that consent could not be withdrawn as this would require a specific statutory provision and special administration should not be able to change their opinion. Onslow Salt also raised they had acted detrimentally based on the consent. BTAC submitted that the court should not use standards of ordinary company administration, given the body is a registered native title body corporate with responsibility to the Thalanyji people. BTAC emphasised the purpose of s 440D(1) was to repair corporate affairs, and continuing with proceedings would prevent this.
The court described this issue as ‘novel’. It was held that the special administrator was not able to withdraw consent. The date of the proceedings would likely be outside of the period of administration regardless. His honour was not convinced by arguments that a withdrawal provision is specifically necessary, but did not find the statute objectives allow consent to be withdrawn whenever suited. He deemed other parties should be entitled to rely on consent given. The argument that an Indigenous corporation requires special consideration was rejected, given the existence of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). His honour emphasised that there is no time limit to give consent, and hence could have been given after meeting with Indigenous members and assessing BTAC finances.
Stay of Litigation
Alternatively, BTAC sought to stay the entire proceedings under s 440D(1), deferring the claims indefinitely or at least until 31 July 2020. Otherwise, administration could not properly occur and proceedings would burden the already indebted business. They submitted settlement is the most appropriate option. The State submitted that s 440D(1) has no application as it only protects corporations from proceedings brought against them. Therefore, BTAC has no entitlement to stay as the cross claims are simply part of the principle proceedings brought by BTAC.
The court held that the section does not apply to the proceedings brought by BTAC, but it is less clear in relation to the cross claims. The second, third and fourth cross claims are brought by Chevron, the State and Onslow Salt (respectively) against BTAC. His honour held that the categorisation of the cross claims is unnecessary as the cross claims are to be determined as preliminary issues. This was deemed necessary as the principle proceedings cannot occur without their determination prior. However, he did note that a wider interpretation should be given to enable the court to grant leave.
Leave to Continue Cross Claims
Onslow Salt, Chevron and the State applied for leave to proceed with their cross claims under s 440D(1)(b) Corporations Act. BTAC argued that leave to continue would be unjust on the Aboriginal corporation given the administration, financial pressures and the pandemic that Aboriginal Australians are especially susceptible to. These factors were argued to risk BTAC’s existence and deny the Thalanyji people their human rights, which is of greater importance than the other party’s incurred costs. Further, they submitted continuation would be an abuse of process.
Justice McKerracher held the cross claims should proceed. This was determined using criteria provided by precedent. His honour considered that the cross claims are sufficiently significant to be heard, the use of solicitors means the special administrator could continue their role and the advanced litigation stage meant there would be little remaining costs. The judgment noted that the BTAC are not seeking to gain monetary benefit, and that the company was in administration, not liquidation. Settlement was encouraged but not deemed a sufficient reason to stay.
His honour stated unnecessary delay is undesirable for all. Considering administration had occurred since 13 January 2020, even if the administration had to be extended, it was held that cross claims should be heard as soon as possible after 17 July 2020, coronavirus allowing.
Costs
Overall, the cross claimants had leave to continue, and all are to be heard together. Costs were ordered to be paid by BTAC.