Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCAFC 50

Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCAFC 50

Although the Court has discretion to order costs against directors personally in exceptional circumstances where they act for their own benefit and not the corporation’s, such an order was not justified in this case as there was insufficient evidence to show the directors acted in breach of duty or otherwise than in reliance on legal advice. The corporation itself is able to meet any costs order, and the Registrar’s attempt to preserve corporate assets for beneficiaries does not warrant substituting personal liability for corporate liability absent clear misconduct.

Jurisdiction
Australia
Judgment Date
05 April 2012
Procedural Posture
Appeal / Costs Determination on Appeal After Orders Following Dismissal of Appeal and Associated Interlocutory Applications
Outcome
Application for costs against directors dismissed; no order as to costs of the further application.
Legal Topics
['costs' 'non Party Costs Orders' 'directors’ Duties' 'corporations']
['civil Procedure'] ['costs' 'non Party Costs Orders' 'directors’ Duties' 'corporations']

Case Brief

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Procedural Posture

Appeal / Costs Determination on Appeal After Orders Following Dismissal of Appeal and Associated Interlocutory Applications

Legal Issues

  1. 1 ['Whether costs should be ordered against the directors of an Aboriginal corporation personally rather than against the corporation; whether orders restraining the corporation from applying trust money to the payment of costs should be made']

Ratio Decidendi

Although the Court has discretion to order costs against directors personally in exceptional circumstances where they act for their own benefit and not the corporation’s, such an order was not justified in this case as there was insufficient evidence to show the directors acted in breach of duty or otherwise than in reliance on legal advice. The corporation itself is able to meet any costs order, and the Registrar’s attempt to preserve corporate assets for beneficiaries does not warrant substituting personal liability for corporate liability absent clear misconduct.

Court Disposition

Application for costs against directors dismissed; no order as to costs of the further application.

Orders

  • ['Respondents granted leave to amend Interlocutory Application as per Further Amended Interlocutory Application.' 'Further Amended Interlocutory Application dismissed.' 'No order as to costs for: (a) the appeal; (b) the reopening application; (c) the application for a stay; (d) the Further Amended Interlocutory...