ORIC yearbook 2014–15: Performance reporting | Investigations and prosecutions

See ORIC yearbook 2014–15 table of contents

Investigations and prosecutions

In 2014–15 the Registrar concluded 16 minor regulatory prosecutions against corporations that failed to meet their reporting obligations; the Registrar also concluded two major civil actions, one minor civil action and one major criminal prosecution.

The Registrar undertakes a range of criminal and civil litigation to address serious cases of poor governance and breaches of duty under the CATSI Act. A summary of outcomes including penalties imposed by the courts is maintained on the ORIC website.

Criminal matters

Matters in progress

As at 30 June 2015 there were no criminal matters in progress.

Finalised

Veronica Cubillo—former CEO of North Australian Aboriginal Family Violence Legal Service Aboriginal Corporation (NAAFVLS)

On 23 April 2015 Ms Veronica Cubillo was found guilty in the Northern Territory Supreme Court in Darwin of 11 offences under the CATSI Act and the Criminal Code (NT). Ms Cubillo was the former CEO of NAAFVLS. Ten of the charges brought against Ms Cubillo related to her misusing her position and forging documents to obtain a personal financial benefit. The eleventh charge related to Ms Cubillo intentionally and dishonestly failing to properly exercise her duties as the CEO.

On 12 May 2015 Ms Cubillo was sentenced to three months’ imprisonment, backdated to 30 April 2015 when Ms Cubillo was first remanded in custody, and a further five months in home detention. Ms Cubillo was also ordered to repay $7624.50 to NAAFVLS via the Registrar.

Annual reporting prosecutions—various corporations

During 2014−15 prosecution action was finalised against 16 corporations for failing to lodge their 2012–13 annual reports with the Registrar.

Corporations that ignore their regulatory obligations and do not lodge their reports by 31 December risk prosecution. The maximum penalty for each report not lodged is $21,250 for corporations. On 31 July 2015 the penalty unit value increased to $180. The new maximum penalty of $22,500 for corporations will apply to offences committed on or after 31 July 2015.

Fines imposed for failure to lodge 2012–13 reports amounted to $26,600.

Civil matters

Matters in progress

Registrar v Fred Monaghan & Others—ACD22/2015

On 30 March 2015 civil penalty proceedings were commenced in the Federal Court in Canberra against three former directors of the Southside Housing Aboriginal Corporation

The Canberra-based not-for-profit corporation was established to provide affordable housing for Aboriginal and Torres Strait Islander people in the ACT.

It is alleged that the three former directors, Mr Fred Monaghan, Ms Teresa Monaghan and Ms Kim Peters controlled the corporation and ran it for their own benefit. The directors lived in properties owned by the corporation, did not pay all of their rent and had the corporation pay part of their excess water charges.

Registrar v Ashley James Taylor & Anor—WAD315/2015

On 25 June 2015 the Registrar applied for freezing orders in the Federal Court in Perth against two former senior officers of the Murchison Region Aboriginal Corporation, Mr Ashley Taylor and Mr Abul Shahid.

It is alleged the former executive officer and finance officer made unapproved loans to themselves, with a combined value of almost $1.7 million.

On 3 July 2015 the Federal Court made interim orders to freeze the assets and restrict overseas travel for the two former officers.

The proceedings will return to the Federal Court in October 2015.

Finalised

Registrar v Paul Edward Pini & Anor—QUD204/2014

On 17 December 2014 the Federal Court in Brisbane made orders disqualifying Mr Paul Pini and Ms Katrina Lucas from managing Aboriginal and Torres Strait Islander corporations.

The Federal Court found that Mr Pini and Ms Lucas had contravened the CATSI Act while they were employed as officers at Lagulalya Aboriginal Corporation. Mr Pini was disqualified from managing corporations for three years and Ms Lucas for two years.

Registrar v Sonia Marie Murray & Ors—VID563/2014

On 16 April 2015 banning orders were made in the Federal Court in Melbourne against four former directors of the Bunurong Land Council (Aboriginal Corporation).

The court found that the four former directors, Ms Sonia Murray, Mr Mervyn Brown, Ms Leonie Dickson and Ms Verna Nichols had breached their duties as directors under the CATSI Act. They were also found to have failed to meet their obligation to ensure the corporation kept proper books and records.

Ms Murray was disqualified from managing Aboriginal or Torres Strait Islander corporations for seven years, fined $25,000 and ordered to pay compensation of $7 717.98 to the Bunurong Land Council (Aboriginal Corporation). Mr Brown and Ms Nichols were both disqualified for three years and ordered to pay a fine of $10,000. Ms Dickson was disqualified for three years and ordered to pay a fine of $5000.

Registrar v Matcham—SYG1989/2014

On 5 February 2014 the Federal Court in Sydney made orders disqualifying Mr Damien Matcham for 15 years and ordering him to pay fines and compensation of over $1.2 million. Mr Matcham failed to pay the fine and the Registrar commenced bankruptcy proceedings against him. Mr Matcham filed a debtor’s petition and was bankrupted in July 2014, ending the proceedings commenced by the Registrar.

Outcomes of prosecutions initiated by the Registrar are on the ORIC website www.oric.gov.au/prosecutions-outcomes.

The Registrar maintains a publicly available register of people disqualified under the CATSI Act from managing Aboriginal and Torres Strait Islander corporations. See the Register of Disqualified Officers at www.oric.gov.au/catsi-act/disqualified-persons-and-officers.

Case study: Banning orders for four former directors of a Victorian corporation

The Registrar, for the first time took action against an entire former board of a corporation for breaching its duties under the CATSI Act and failing to exercise proper control over the corporation’s affairs.

On 26 September 2014, the Registrar brought proceedings against Ms Sonia Murray and three other former directors of the Bunurong Land Council (Aboriginal Corporation).

The court found Ms Sonia Murray, a former officer and director of Bunurong, had conducted the business of the corporation for her own interest and failed to keep proper records to explain transactions and the flow of money into and out of the corporation. The three other former directors failed to take any interest in the management of the corporation and allowed Ms Murray to run the corporation for her own personal use and benefit.

Ms Murray admitted that between September 2008 and January 2014 she deposited $924,000 into the corporation’s bank account and withdrew more than $929,000 but did not keep a record of who provided the money or to whom it was paid. During this time Ms Murray in her role as CEO was responsible for contracting individuals and firms for cultural heritage work on Bunurong country (which lies along the eastern side of Port Phillip Bay in Victoria down to the Mornington Peninsula).

Ms Murray treated the corporation as her own personal business while the other directors failed to take even basic steps either to monitor what Ms Murray was doing or to ensure that the corporation met its record keeping, meeting and taxation obligations.

On 16 April 2015 Justice Gordon in the Federal Court in Melbourne issued banning orders against the four former directors. Ms Murray was disqualified from managing an Aboriginal and Torres Strait Islander corporation for seven years, fined $25,000 and ordered to pay compensation of $7 717.98 to the Bunurong Land Council (Aboriginal Corporation). The three other former directors were disqualified for three years each and also ordered to pay a fine.

The Registrar said, ‘These former directors failed the Bunurong people and demonstrated that they did not act to the standard expected from a board of an Aboriginal and Torres Strait Islander corporation.’

In a first for the Registrar the Federal Court banned the entire former board of an Aboriginal and Torres Strait Islander corporation for failing in its duties under the CATSI Act.

Case study: Trial by jury returns guilty verdict

Senior staff in corporations who occupy positions of trust must act responsibly in exercising their duties. These were the findings in the case of Ms Veronica Cubillo, a former CEO of the North Australian Aboriginal Family Violence Legal Service Aboriginal Corporation (NAAFVLS).

The Registrar brought 11 charges against Ms Cubillo which mainly related to the misuse of her position. Ms Cubillo was found guilty by a jury of peers on 23 April 2015.

In handing down the sentence, Justice Blokland in the Supreme Court in Darwin said that Ms Cubillo had breached her position of trust as the CEO of an Aboriginal corporation and had not accepted responsibility for her actions.

This was the first matter brought by the Registrar to proceed by way of a fully defended jury trial.

The Registrar can only build a strong case against directors and other corporation officers if people who have information and documented proof are prepared to stand up for their corporation and support the legal process in court.

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