The Report considers six key areas relevant to the operation of the ALA and considers the nature and extent of recommendations which might be made to improve the way that the ALA operates. These are:
- The share system
- Governance of the Trusts
- External regulation of the Trusts
- Dispute resolution
- Facilitating engagement with residents
- Sale of Trust land and providing for economic development.
In addition, the Report discusses two additional issues for potential recommendation, including:
- Should the ALA be modernised and how?
- Should there be a process of ongoing review built into the ALA?
When each Trust was created, Parliament gave residents ownership of Trust land by giving them shares in the Trust. The ALA provides that each share is capable of having a dollar value, set by an auditor, that is based on the value of the reserve land. Many shareholders have a deep historical attachment to their shares, which symbolise their family history at Lake Tyers or Framlingham, and a recognition of their connection and ownership of the land.
Ownership of shares is recorded in a register, which is managed by the Committee of Management. The Options Paper makes a number of recommendations in relation to the manner in which the share system operates under the ALA.
The original share register was lost and reconstituted when the Lake Tyers Trust was in administration. That has caused concern that the share register at Lake Tyers accurately reflects the true shareholding.
The ALA is not written in plain English. This makes it difficult to understand how it operates and deters people from engaging with the consultation process.
First Peoples State Relations provide assistance to the Lake Tyers Trust to audit the share register to correct any inaccuracies and restore integrity of the register.
Prepare plain English summaries of the ALA when consulting with Lake Tyers and Framlingham Aboriginal Trusts.
Transfer of Shares
It is important for shareholders to know when shares have been transferred. This is because who holds shares, and the number of shares they hold, impacts on how many people are needed to make quorum at meetings, and, for a poll vote, on how many votes each person gets.
Distribute materials to the community which clarify how shareholders can check the number of shares they own, how they can transfer shares and who shares can be transferred to.
There is no clear statement in the ALA whether the Committee of Management can refuse a transfer of shares.
The ALA should be amended so that the Committee of Management can refuse a transfer in certain circumstances, such as if the person is not eligible to be a member. The Committee of Management should not be able to refuse the transfer of shares:
- under the terms of a will so long as the recipients are eligible;
- by an executor of a will so long as the recipients are eligible; or
- if the transferee is within a category of persons under the ALA that can receive the shares.
The ALA requires a “proper instrument of transfer” to transfer shares, but doesn’t set out what that form should look like, which can lead to disputes.
Provide clear rules about what documents are required for a transfer of shares and prescribe a set form for transferring shares.
It is unclear how shareholders can inspect the share registry or find out if shares have been transferred.
Shareholders should be able to inspect the share register at any time and be notified when other shares are transferred.
Sale of Shares
The ALA is not clear about whether shares can be sold to anyone other than members of the, the Crown or an immediate family member (sibling, spouse, child or grandchild) of the member selling their shares.
Allow the Committee of Management to refuse to register a transfer if it is to someone other than these people.
The ALA requires that shares be sold at a price fixed by the auditor. This is designed to stop shares being sold for less or more than their worth. However, shareholders often sell shares to family for less than the price fixed by the auditor which is an illegitimate transfer.
Sellers and purchasers should give statutory declarations confirming that shares were sold at the price fixed by the auditor. If shareholders want to sell shares to family for less than the fixed price, they should sign a declaration that they are aware, and agree, to sell their shares for a lower price.
Transfer of Shares to Non-Aboriginal People/The Crown
There is no requirement in the ALA that shares are held by Aboriginal people.
Amend the ALA so that only Aboriginal people can hold shares and the only situation where a non-Aboriginal person can hold shares is if they are held on trust for children until they turn 18. For example, if a non-Aboriginal person marries a shareholder they may hold shares on trust for their child.
Transfer of Shares after People die
Where there is no will: Many Aboriginal people do not have wills. Without a will, families have to go through complicated legal procedures to transfer shares. As a result, many deceased estates of shareholders haven’t been administered and approximately 40% of shares at Lake Tyers haven’t been distributed. This means that a significant portion of people who were meant to benefit under the ALA and participate in the Trust aren’t able to.
The families of deceased shareholders are identified by the Trust and given an explanation of how shares in the deceased estate can be transferred and who they can be transferred to.
If no legal procedures are commenced by family members to administer an estate within three years, the shares should be transferred evenly to the deceased’s children, or their grandchildren if their children are deceased.
Where there is a will: The ALA is not clear about whether the Committee of Management must approve transfers of shares in accordance with the Will of a person who has died.
Transfer of shares under a person’s will must be approved by the Committee of Management. Transfer should be approved if it is to someone who is eligible to hold shares under the ALA.
If the Committee of Management does refuse to transfer shares because a will requires transfer to people who are ineligible to hold shares, the shares should be transferred to the deceased person’s children, or if they had no children, to another person who is not an executor of the Will or a member of the Committee of Management.
The ALA outlines that a “personal representative” can write to the Trust to have their name entered on the register of shares, but it is unclear what “personal representative” means.
Define “personal representative” in the ALA as being the same as in the Administration and Probate Act 1958 (Vic).
The ALA only has a few rules about how the Trust should conduct its affairs. These rules are not very clear. This increases the risk of disputes between shareholders and makes it more difficult for the Trust to be effective. Having clearer rules about how the Trust should operate will help the Trust govern itself and provide more fairness, transparency and certainty for shareholders. The Report makes a number of recommendations which will assist in improving the governance of the Trusts.
Currently, there is no requirement to have general meetings other than the Annual General Meeting. General meetings are important to:
• provide shareholders with the opportunity to ask questions to the Committee of Management, increasing transparency and accountability;
• improve the flow of information from the Committee of Management to shareholders;
• make shareholders feel involved in the business of the Trust.
It can be difficult to meet quorum for general meetings. At least half of the shareholders who live at the former reserve are needed to meet quorum, and there is no way to force members attend.
Require each Trust to have at least one general meeting each year (as well as the Annual General Meeting (AGM)).
(It is possible for this requirement to be waived if it was too difficult to hold the meeting).
Make it easier to meet quorum by:
• allowing the meeting to be postponed if quorum can’t be reached. At the postponed meeting, if quorum still can’t be reached, allow the meeting to go ahead, or allow the meeting to go ahead if the Minister agrees (or Registrar, if one is appointed).
Shareholders can be more prepared if they know beforehand what will be discussed at general meetings.
The Notice of General Meeting should be required to contain: time, date, location, and agenda.
There is no requirement to keep minutes of general meetings. Minutes are important for proper record-keeping and to provide transparency of decision making.
Require Minutes to be taken at general meetings and be given to members who request them.
Elections to Committee of Management
Elections for the Committee of Management are staggered, which helps to retain corporate knowledge. However, the ALA doesn’t provide for the election schedule to be reconfigured where this requirement is not maintained.
Allow the election schedule to be adjusted as needed to ensure staggered elections for the Committee of Management.
Membership of Committee of Management
Community members are not eligible to be on the Committee of Management in limited circumstances, including being “of unsound mind”, bankrupt, or removed by a resolution.
Other land rights legislation has been updated to be more in line with general corporations law.
People are disqualified from being on the Committee of Management if:
• they have committed a criminal offence that involves dishonesty and can be punished by imprisonment of three months or more;
• they are disqualified from managing a corporation under Part 2D.6 of the Corporations Act 2001 (Cth).
The ALA provides that decisions are to be made by majority vote, meaning that if only three people attend, important decisions can be made by two people. This is problematic because there is a risk that if not all directors are given notice of a meeting, separate groups of directors may be able to hold their own meetings with competing agendas.
Change the ALA so that the quorum for the Committee of Management is four members rather than three to reduce the risk of small majorities making important decisions without the knowledge of other directors.
Require the Committee of Management to keep minutes of meetings to help ensure there is greater transparency for members.
There is no time limit to fill casual vacancies of the Committee of Management.
Casual vacancies are to be filled at the next general meeting after the casual vacancy happens.
Rules for the Trust
The Trust will be more accountable if it has to follow a set of rules when operating (which address procedural and governance issues like the issues mentioned in the Report).
Set out the rules for the operation of the Trust.
Include the rules as flexible “Model Rules” contained in a schedule of the ALA.
Members can vote on proposals even if they have a conflict of interest (for example, if they will receive a financial benefit if the vote goes through).
A person who has a material personal interest in a matter be excluded from voting on, or discussing, that matter at a general meeting
Sometimes it may be difficult for the Trust to comply with all the rules in the ALA due to circumstances beyond its control. Requiring strict compliance can be a big, unintended burden, and lead to breaches of the ALA.
The Minister (or Registrar, if one is appointed) can exempt the Trust from complying with the ALA if appropriate.
The Minister is responsible for ensuring compliance with the ALA.
Disputes can only be resolved through the Supreme Court, which is expensive and inaccessible.
Appoint an independent Registrar to maintain the share register, assist the Trust to comply with the ALA, help settle disputes and investigate complaints. This is an advantage because:
- dispute resolution will be more accessible and
- the Registrar is independent of Government.
The Trust must provide a Report on economic and social wellbeing of residents. The Report is not very helpful because:
- the Trust has no power to collect information from Trust residents
- the information included in the report is mostly census information, which is already available to the Minister.
Instead of requiring an Annual Report on Economic and Social Wellbeing of Trust Residents, require an strategic plan at least every three years.
A strategic plan could cover:
- acquiring, managing, and/or developing land and other asset
- community benefits schemes
- business enterprise and investment and
- Aboriginal culture and heritage.
There is no requirement for the Minister to be provided with a copy of the share register for each Trust. A copy of the share register is helpful for the Minister to be able to identify if who they are communicating with is a shareholder.
When documents are provided to the Minister, require that a copy of the Share Register is included.
Appointment of administrator
The Minister can issue a notice, or even appoint an administrator, if the Trust is not complying with the ALA. However, the Minister has no power to investigate whether the Trust is complying with the ALA in the first place.
Give the Minister or Registrar power to undertake an investigation of a Trust.
This means the Minister could make informed decisions about whether to exercise their power to appoint an Administrator.
Facilitating Engagement with Trust Residents
Many Trust members today have moved away from the reserve land held by each Trust. About three-quarters of Lake Tyers shareholders live away from the Trust. Also, there are many residents at each Trust who don’t own shares: at Lake Tyers, only one-third of residents are shareholders.
The Options Paper put forward a number of options for how the residents may be engaged in the operation of the Trusts. However, the Report concludes that it was not appropriate to make recommendations for amendments to the ALA to address this issue as there was no clear consensus from the communities or the Trusts regarding whether amendment was appropriate and, if so, what amendments should be made.
The Report does however recommend that there should be a clearer definition of who is a ‘resident’ for the purpose of identifying who is a resident shareholder. It recommends that a “resident” should be defined as someone who has been ordinarily living on the former reserve land for three months or more.
Definition of Residents
There is currently no definition of "resident" beyond the definition that was used to determine residency at the time of the passage of the ALA (which required a person to be ordinarily resident on the former reserve for three months to receive shares). However, this definition is no longer relevant as it only applied to establish residency at the time of the establishment of the Trusts.
The Options Paper noted that the ALA could be amended to include a general definition of “resident” in s 2. For consistency, this definition should be the same one used at the time of the passage of the ALA, namely that persons ordinarily resident on the former reserve for a period of three months or more. This would also clarify the meaning of “resident” in relation to the calculation of the quorum for a general meeting.
Amend s 2 of the ALA to include a definition of "resident" as a person who has been ordinarily resident on the former reserve for a period of three months or more.
Sale of Trust Land
The ALA allows land to be sold if there is a unanimous resolution of the Trust. This protection is limited, as a unanimous resolution can be passed even if only a small number of people show up to a meeting (provided quorum is reached).
Lake Tyers has not sold any land. Framlingham has transferred some land to former shareholders in exchange for their shares. Allowing Framlingham to sell land may be appropriate, but the Lake Tyers community appeared to want to have greater protection against sale of its land at consultations.
In relation to the former Framlingham reserve land, the Report recommends that the ALA should be amended to provide that Framlingham Aboriginal Trust shall not sell, mortgage, use as a security, give in exchange or otherwise dispose of any land to any person, except in accordance with a unanimous resolution of the Trust.
The Report notes that a different arrangement should be available for land which has been purchased as an investment (i.e. is not reserve land) and recommends that such land can only be disposed of if 80% of members present and eligible to vote approve.
Restrictions of Sale of Former Reserve Land
The ALA allows land to be sold by unanimous resolution of shareholders in attendance at a general meeting. However, Lake Tyers have not sold any land and want greater protection against sale of its land.
Amend the ALA to provide that:
(a) the former reserve land at Lake Tyers is not able to be sold, or transferred or used as a security;
(b) the former reserve land at Lake Tyers is not able to lease the former reserve land for a period of longer than 40 years without the consent of the Minister which can be withheld if the Minister does not consider the lease to be in the interests of the shareholders;
(c) that any agreement to sell, transfer or use the former reserve land at Lake Tyers as a security is to be deemed to be void and unenforceable and that no damages or remedy can be obtained against the Trust in relation to such an agreement; and
(d) the Minister is entitled to lodge a caveat over the land to ensure that the former reserve land at Lake Tyers is not transferred contrary to the ALA.
Framlingham have previously sold an interest in part of the reserve land to former shareholders and may want to retain some additional flexibility regarding sale of former reserve land in the future.
Amend the ALA to provide that Framlingham Aboriginal Trust shall not sell, mortgage, use as a security, give in exchange or otherwise dispose of any former reserve land to any person, except in accordance with a unanimous resolution of the Trust.
Both Trusts are able to own property other than the former reserve land. It should be easier to sell that land.
Amend the ALA to provide that the resolution to sell land other than the former reserve land by Lake Tyers Aboriginal Trust or Framlingham Aboriginal Trust needs only to be approved by 80% of the members present and eligible to vote.
Facilitating Economic Activity
When the Government introduced the ALA, it intended that the Trusts would pursue business opportunities and earn money for shareholders. The Report recommends a number of amendments to make clear that a trust can acquire and operate separate business entities and carry on business on land other than that owned by the Trust.
Powers of Trust
It is unclear whether the Trusts can create other companies to pursue business opportunities and earn money for shareholders.
Amend the ALA to provide that a Trust may establish, acquire, operate or manage a related entity being either:
(a) an Aboriginal and Torres Strait Islander corporation within the meaning of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth),
(b) a company within the meaning of the Corporations Act 2001 (Cth).
Amend the ALA to provide that a Trust must include in the accounts and records of the Trust the financial records of the related entity and details of the operations of the related entity.
Power of Trust to Carry On
It is unclear whether Trusts can carry on any business on land other than the former research land, including land the Trust might purchase.
Amend section 11(b) of the ALA to clarify that a Trust “carry on any business, including on any land held by the Trust”.
First Peoples State Relations pays for specific infrastructure projects and delivery of municipal and essential services at both Trusts and provides some administrative funding to Lake Tyers. In the past, both Trusts appear to have received some Commonwealth funding, which helped Framlingham buy several properties. Other than Framlingham’s income from these properties, neither Trust has an independent funding stream for investments, limiting their ability to pursue economic development (especially in the context of managing communities with socially, politically and culturally complex histories).
The Report recommends that in addition to core funding for administration, the Victorian Government should give consideration to providing some targeted funding for investments in the form of property or other investment to create income streams to finance the Trusts.
Financing the Trusts
It has been hard for the Trusts to become self-sufficient in terms of funding.
In addition to core funding for administration, the Victorian Government should consider providing targeted funding for investments to help fund the Trusts.
Unlike other land rights schemes, the ALA doesn’t require negotiation or consent to mine Aboriginal land or to offer ownership of particular minerals extracted from Aboriginal land. In line with other Commonwealth and State schemes, Lake Tyers and Framlingham Aboriginal Trusts should have the veto power to refuse permission for mining to occur on Trust land. The Report recommends that the ALA be amended to make the requirements in relation to mining on Trust land consistent with s 31 of the Aboriginal Land Rights (Lake Condah and Framlingham Forest) Act 1987 (Cth).
Currently, the Trusts do not have a veto power over mining on their land. This is inconsistent with other Victorian legislation.
Amend the ALA to ensure the Trusts have veto power to refuse permission for mining to occur on Trust land.
Modernisation of the Act
Certain terms used in the ALA should be updated to reflect plain modern English. The report recommends that some of the terms in the ALA be changed.
Modernisation of Act
Certain terms used in the ALA should be updated to reflect plain modern English.
Amend the ALA to:
(a) replace the term “Aborigine” with “Aboriginal person”;
(b) replace the phrase “husband and wife” with “spouse and domestic partner”;
(c) replace the term “infants” with “a person under the age of 18”.
Ongoing Review and Consultation
The ALA has rarely been reviewed since it came into force almost 50 years ago. This means that issues which have become large problems, such as the issues with deceased estates, could have been tackled before they became so big. During consultations, people voiced their concerns that previous reviews occurred without proper consultation. A mechanism for regular review should assists both Trusts and encourage greater community participation.
The Report recommends that the Trusts be invited to comment on the report before any amendments are made to the ALA and that a draft of the full amendments should be given to the Trusts for comment before a Bill is tabled in Parliament.
The Report also recommends that First Peoples State Relations should continue to engage with the Trusts about further reform of the ALA, including whether a periodic review mechanism should be introduced into the ALA.
Report and Bill to be Provided to the Trusts
The Trusts should have the opportunity to be consulted on these recommendations and on any draft legislation that is drafted to implement the recommendations.
A copy of this Report should be provided to the Trusts for comment prior to any draft legislation being prepared.
Prior to a Bill being tabled in Parliament, an Exposure Draft should be prepared and provided to the Trusts for comment.
Continuing Engagement with Trusts
There is no review mechanism in the ALA.
First Peoples State Relations should continue to engage with the Trusts and work with them to further identify areas of reform which assist with the operation of the ALA, including about whether a periodic legislative review mechanism is appropriate to insert into the ALA.
Reviewed 20 September 2023