Special administrations

Yes. A special administrator cannot be appointed if the corporation is being wound-up or a liquidator has been appointed.

Unlike other forms of insolvency procedures, the special administrator does not have to be a liquidator. 

Only the Registrar can appoint a special administrator. 

The Registrar may decide to appoint a special administrator to a corporation for a number of reasons. The grounds for special administration are broad. However, even if grounds exist for the appointment of a special administrator, there are a number of other factors the Registrar considers. These may include:

• the seriousness of the matters of concern and whether it is the most appropriate course of regulatory action for a special administrator to be appointed to rectify these concerns 
• the profile of the corporation including its size, sector and membership size
• whether the matters of concern can be resolved by the corporation or other parties without the need for special administration. 

The directors can also ask the Registrar to appoint a special administrator, however, the same considerations would be applied in these circumstances. 

In most cases the Registrar will send a letter to the corporation setting out the reasons why the Registrar thinks that a special administrator should be appointed. This is known as a 'show cause' notice.  

The show cause notice will invite the corporation to tell the Registrar within a reasonable period why a special administrator should not be appointed.

No. If the Registrar thinks that there are reasons that a special administrator should be appointed urgently, the Registrar does not need to send a show cause notice. The reasons that an appointment can be made urgently are to prevent:

• loss of property or public money
• conduct that would break the law, or
• the corporation from stopping or suspending the provision of services essential to, or significant for, a particular community or group. 

If the corporation either does not respond, or responds but the Registrar considers there are grounds for a special administrator to be appointed, the Registrar will write to the corporation and provide a Notice of Determination and Appointment of a special administrator. 

If the Registrar decides not to appoint a special administrator, the Registrar must write to the corporation as soon as possible to confirm. The Registrar may enforce other courses of regulatory action such as a compliance notice. 

Yes. As soon as possible after the appointment the Registrar must publish a notice of the decision in:

• the gazette, and
• a national newspaper, or a daily newspaper for each State or Territory that the corporation has its registered office or carries on its business or operations.

The Notice of Determination and Appointment to place a corporation under special administration will also be on the public Register of Aboriginal and Torres Strait Islander Corporations maintained by the Registrar. 

A special administrator is responsible for the conduct of the affairs of the corporation and has comprehensive powers under the CATSI Act.
The special administrator’s powers include:

• carrying on the corporation’s business
• managing property
• terminating or disposing of all or part of the business or property of the corporation
• engage or discharge employees
• do anything that the corporation, directors or a member could do if the special administrator had not been appointed
• admit and remove members
• appoint or remove directors and secretary
• change the corporation’s constitution (rule book). 

No. The special administrator takes control of the corporation and is regarded as an officer of the corporation. 

The directors and secretary are removed from office, unless the Registrar agrees it is in the best interests of the corporation that they remain. 

Generally, the directors and secretary are unable to deal with the corporation’s property or exercise any powers.

The directors can write to the Registrar and ask that the decision be reviewed. The request must be made within 28 days of receiving the Notice of Determination and Appointment. 

If following review, the special administration is still in place, the directors can apply to the administrative review tribunal to review the matter. The application must be made within 28 days of receipt of the original review.

Members' rights are affected but not removed entirely. While members lose direct control of the corporation during a special administration, they retain rights to information, membership, and oversight. The process is designed to be temporary and restorative, with the goal of returning control to members once the corporation is stable. 

Special administration provides protection to the corporation from its creditors in the following ways:

• Except with leave of the Court or the consent of the special administrator:
  • secured creditors cannot enforce any security  
  • legal proceedings against the corporation cannot be started or continued.
• Except with leave of the Court creditors cannot take enforcement action against the corporation. 

The Registrar is responsible for determining how long the special administration will be in force. This will be set out in the Notice of Determination and Appointment. 

Yes. The Registrar also has the power to extend the appointment if it is considered necessary.

Notice of any extension must also be published in the gazette and a national or state or territory newspaper. 

Yes. The Registrar can appoint a replacement special administrator. 

Notice of the appointment of a replacement special administrator must also be published in the gazette and a national or state or territory newspaper.

If the Registrar considers it is no longer necessary for the corporation to be under special administration, the Registrar may terminate the appointment by giving written notice to the special administrator. 

Notice of the termination of the appointment of the special administrator must also be published in the gazette and a national or state or territory newspaper. 

Yes. Other grounds include:

• the period of appointment comes to an end
• the special administrator resigns or dies
• a liquidator is appointed to the corporation or the corporation is wound-up. 

No. Members of a corporation cannot directly pass a resolution to end a special administration. Only the Registrar has the authority to end a special administration. 

At the conclusion of a special administration, the corporation will be returned to member control and the special administrator will appoint a new board of directors who will be responsible for the conduct of the affairs of the corporation. In rare circumstances where a corporation cannot be returned to member control, generally as a result of a corporation being insolvent or is not financially viable, a liquidator may be appointed for the corporation to be wound up.