Cooinda Lodge leasehold sale from Gagudju Association to Djigardaba Enterprise Aboriginal Corp cleared

The sale of a renowned Kakadu tourist lodge between two Aboriginal groups has been waved through after an injunction to prevent the transaction, on bases including that the $1.2m sale price was undervalued, failed.

Yellow Water Villas at Cooinda Lodge. Picture: David Hancock/ SkyScans.

The sale of the leasehold title in a renowned Kakadu National Park tourist lodge between two Aboriginal groups has been waved through after an injunction to prevent the transaction, on bases including that the sale price was undervalued, failed.

The Gagudju Association Inc, founded in 1980 to benefit a number of clan groups in and around the national park and which currently represents 156 members, will now progress the sale of its title in Cooinda Lodge to Djigardaba Enterprise Aboriginal Corporation for $1.2m.

It previously sold its other two assets, the famous Crocodile Hotel and nearby Puma Jabiru service station, between June 2021 and May 2022 as a result of native title being granted over the land on which they sat, as it had been for Cooinda.

The association was told approximately two years ago that its Cooinda lease would not be extended past its expiry on June 3 this year, according to a recent judgment of Supreme Court Chief Justice Michael Grant.

While a sale agreement for Cooinda Lodge was drawn up between Gagudju and Djigardaba on February 16, the parties were forced to a standstill amid a challenge by traditional owner Charles Nicholson Whittaker.

Safari tent at Cooinda Lodge, which is surrounded by Kakadu National Park. Picture: File

Mr Whittaker sought an injunction to prevent the sale of the title to Djigardaba, appoint a named person as receiver and manager of Gagadju before electing a new committee, and be granted leave to initiate a damages claim for what he argued was the disadvantageous sale of the Crocodile Hotel and service station.

He argued that Cooinda’s sale price of $1.2m was “substantially undervalued” – Gagudju initially sought to sell its leasehold for $2.2m, but this was rejected by Djigardaba – and that the decision to sell was unlawful, as it was made without a quorum.

He also argued that Gagudju’s committee was “conflicted” as many of its members were also members of Djigardaba.

The Mercure Kakadu Crocodile Hotel in Jabiru was previously owned by Gagadju Association Incorporated before it was sold due to a grant of native title. Picture: File

On March 1, Chief Justice Grant found the arguments could not be sustained.

Regarding the quorum issue, Chief Justice Grant said Gagudju’s constitution required five members to be present.

Despite the fact seven out of nine members recused themselves due to a conflict of interest, that being that they were also members of Djigardaba, he found that did not mean there was no quorum.

If it were so, the result would be “managerial gridlock,” Chief Justice Grant said.

As the conflicted committee members recused themselves, that also nullified Mr Whittaker’s submission the sale was conflicted.

Chief Justice Grant found that he did not need to determine whether the sale of Cooinda’s leasehold title was substantially undervalued.

As it was unlikely that the question of whether the title was undervalued could be determined before the lease runs out, there existed a risk that the business would be “worth nothing” come June 3.

Should it ultimately be found that Djigardaba purchased the title for below market value, damages would be an adequate remedy, Chief Justice Grant said.

As the lodge is the last money-making asset held by Gagudju, the association voted on March 6 to distribute its surplus cash, including the proceeds from the lodge’s sale, to 14 other local Aboriginal associations and corporations.

Gagudju, which has been plagued by allegations of waste, mismanagement and favouritism among clan groups across its forty-plus years of existence, would then dissolve itself.

Originally published as Cooinda Lodge leasehold sale from Gagudju Association to Djigardaba Enterprise Aboriginal Corp cleared