Wy _ vl /T PRO IN THE FEDERAL COURT OF AUSTRAITA INDUSTRIAL DIVISION Wo. 4 of 1979 Sew we NEW _SOUTH WALES DISTRICT REGISTRY IN THE MATTER of the Conciliation and Arhitration Act, 1904 AND IN THE MAT'TER of an application pursuant to Section 171c of the said Act by THE PROFESSIONAL RADIO AND ELECTRONICS' I*XSTITUTE OF AUSTRALASTA JUDGE MAKING ORDER: J.B. Sweeney J. WHERE MADE: Sydney THE COURT ORDERS THAT: The order 1s refused and the application is dismissed. IN THE FEDERAL COURT _OF AUSTRALIA ) ) INDUSTRIAL DIVISION ) No. 4 of 1979 ) ) NEW SOUTH WALFS DISTRICT REGISTRY IN THE MATTER of the Conciliation and Arbitration Act, 1904 AND IN THE MATTER of an application pursuant to Section 171lc of the said Act by THE PROFDSSIONAL RADIO AND ELECTRONICS' INSTITUTE OF AUSTRALASIA J.B. SWEENEY J. 9 May, 1979 This is an application by the Professional Radio and Electronics! Institute of Australasia ("the Institute"), an organization of employees registered under the Commonwealth Conciliation and Arbitration Act, 1904 ("the Act"). The application is brought under s.171lc of the Act and seeks a determination of the question whether an invalidity occurred in elections in the organization of divisional secretaries and one divisional representative in October, 1978. A further order is sought that 1f an invalidity 1s found the persons then declared elected should occupy the positions of divisional secretary and divisional representative respectively until a further election 1s held at the end of 1979 for the positions. At a later stage of the proceedings a third order was sought that the consequences in law of the invalidity resulting from the presence of the persons so clected invalidly and their participation in the 1979 annual federal congress and the consequential absence of a quorum at the congress be negatived. On the matter first coming before me I was advised that each of the divisions and the persons concerned in the elections invalidly held were aware of the proceedings and all except one assented to them. I thereupon made an order for notice of the proceedings to be forwarded .o Mr. John James Wiseman who had been an unsuccessful candidate for election as divisional secretary 1n the Victoria/fasmania division of the institute, He was at the time in London and consequently he was advised by cable of the proceedings and later received copies of the documents. He communicated with the Registrar of the Court and asked that the Institute be directed to pay his fares and expenses of travelling from England to appear in this matter. Correspondence relating to this was placed before me but I refused to make any such order. Mr. Wiseman then made lengthy submissions by letters addressed to the Registrar on the merits of the application. Although Mr. Wiseman did not appear, in the circumstances of the case I decided that I would consider and take into account the submissions he had made. I do not however treat any fact raised by them and not otherwise proved as being proved by the submission. The history of the matter shows that the organization has been registered for a long time. In 1959 1t amended its rules by making separate provision in what were termed by-laws for the conduct of divisiors. Divisions appear to have been established by the organization and consisted of those persons members of the organization within a specified geographical area, usually corresponding to the area of a State. In addition to divisions there were sections which consisted of members of the organiza-~ tion employed in particular industrial areas. The scheme of government of the organization provides for an annual federal congress. It consisted of the Institute Executive and divisional represeztatives. Davisions were entitled to representation at the congress by one delegate who was the divisional secretary for the first 1,000 members and an additional representative for each additional 1,000 members. A quorum of the federal congress was five, consisting of two duly elected divisional representatives and three members of the executive. The executive consisted of the President, Senior Vice-President, three Vice-Presidents, the General Secretary/Treasurer and the Assistant General Secretary. There was also a governing council which appears to have had many of the functions of a committee of management. It consisted of the officers and representatives of the various sections. After 1959 although the rules contained isolated references to the divisions and divisional officers, no method of electing the officers was prescribed. This was prescribed by what were called by-laws which were printed 1s part of the official rule book separate from the rules and contained a detailed code for the running of the section including provision for elections. The result 1s of course that there being no registered rules governing in any way the election of divisional officers includ- ing representatives, the elections are admittedly a nullity. This defect in the rules and its consequences came clearly to the notice of the officers and other members of the annual federal congress. In March, 1978 prior to the then meeting of the congress Mr. Wiseman gave to each of those present at the congress a letter which enclosed counsel's opinion that, because of the lack of registered rules, the elections of divisional representatives were a nullity and there was in consequence no quorum present. The congress decided to obtain its own opinion from counsel. Although that opinion has not been disclosed to me, 1t would appear to have supported the view expressed in the opinion Mr. Wiseman obtained. In May, 1978 this Court heard an application by the Institute for an order validating the proceedings of the congress. On 24 May, 1978 the Court made an order in the following terms: "On the facts of this application the Court is of the opinion that an invalidity has occurred in the management of The Professional Radio and Electronics Institute of Australasia, and having regard to the facts proved in this matter the Court, in the exercise of its discretion, considers that it is not necessary to direct that any notice be given of the intention to make the proposed order. Accordingly, the Court hereby determines and declares that an invalidity has occurred in the management of The Professional Radio and Electronics Institute of Australasia (the Institute) by reason of the absence of a quorum at the 1978 annual federal congress of the institute held on 13, 14 and 15 March, 1978 and that the presence thereat of five persons, namely, E.B. Kelly, S. Davies, N. Johnston G. Bird and M.C. Pickstone, each purporting to act as the divisional representatives of the purported South Australia-~ Northern Territory, Victoria-Tasmania, Western Australia, New South Wales and Queensland-Papua/New Guinea divisions of the institute respectively having been purportedly elected as divisional secretaries of the said divisions by elections that were a nullity and the Court being satisficd that the order herein made would not do substantial injustic to the institute or to any member or creditor of the institute, or to any person having dealings with the institute, the Court orders: 1. That the consequences in law of the invalidity as a result of the absence of a quorum at the said annual federal congress and the presence thereat of the said five persons be negatived. 2. That the applicant have liberty to apply." It should be added that after announcing the order, the presid- ing Judge, Philip Evatt J., said to counsel for the Institute - "Mr. Moore, you appreciate the order has been made under 171c, of course, and it is negativing the invalidity whach 1s specificaliy set out in the determination?" and counsel replied - "yes, and I understand it would not necessarily have the effect of validating any other irregularity that might have been associated with the conduct of this meeting." During the course of those proceedings the General Secretary of the Institute, Mr. McGrane, had given what he termed an under- taking to the Court that the rules would be amended. He also said that a rules committee had been set up and had been given a set of model rules, a certified copy of the rules and a copy ef the Act. At that time (23 May, 1978) they had had the docu- ments for about a month. The organization was at this time then in a position where 1t was conscious of the failure in its rules to provide for election of divisional representatives and of the fact that that failure made it impossible to hold an annual federal congress with a quorum, The normal rule-making authority was the congress but there was also provision for rules to be amended by a special meeting of members. However the organization proceeded with considerably less than spectacular speed to solve the problem. On 23 May there was a rules committee in existence with a set of model rules and other documents which they had had for approximately one month. 'They also of course had the by-laws which had in fact been applied to divisions for some years. However meetings of the rules committee were held on 7 June, 18 July and 24-28 August, 1978 to revise the rules. The last meeting was held on 28 August, 1978 and by that time a set of amendments had been drawn which dealt among other Uhinys with Lie election of the divisional representatives. A requisition was received for a special general meeting on 4 September and the date for that was fixed for 8 November, 1978. At the same time however the organiza- tion was proceeding with elections of divisional officers and representatives under the unregistered by-laws. The rules committee decided on 7 June, 1978 to do this. Nominations for inter alia the positions of divisional secretary were called for in the July issue of the journal of the Institute. They were to close on 7 August, 1978. It may be noted that the fol- lowing note was added to the notice calling for nominations: "(Note: In view of certain provisions of the Commonwealth Conciliation and Arbitration Act, steps are being taken to include the election of the Divisional Secretary under the provisions of the Rules instead of By-Laws of the Institute. Any action necessary to confirm the election of nominees for these positiocr® will be taken under the provisions of Rule 23 of the Institute. )" I also note that at the same page of the journal a purported account 1s given of the proceedings under s.171C to which f have previously referred. It said: "On Tuesday and wednesday, 23rd and 24th May, 1978 a Full Bench, comprised of three Judges, after hearing the facts in affidavits and on evidence unanimously decided the decisions of the 1978 arc be validated." This was of course entirely contrary to the statement made by the Court on that occasion when it was made clear that the Court did not validate the decisions but provided only that the proceedings should not be invalidated by the lack of a quorum or the presence of persons not entitled to be present. I am unable to understand what is sought to be conveyed by tre note to the returning officer's calling for nominations. Rule 23 provides fer special general meetings but gives then no power to elect or to fill vacancies. Whatever the purpose, these elections were proceeded with although the course of amending the rules to provide specifically for the election of divisional representatives was certainly under contemplation and would have seemed to be the obvious remedy. On 25 September, 1978 the Industrm] Registrar wrote to the Institute drawing attention to the requirements of the statute and the need to have many aspects of the rules considered. On 13 october, 1978 the Instatute replied, sending to the Registrar a copy of the agenda, including rule amendments, to be submitted to the special general meeting on 8 November, 1978. On 31 October, 1978 the Registrar wrote to the Institute commenting on a number of the proposed changes and pointing out their conflict with the statutory provisions. He referred to a conversation Mr. McGrane had had with an officer of the Department in which Mr. McGrane had said that the divisional committees were only advisory bodes an@ apparently that there was no need to provide for election of them. The special general meeting held on 8 November, 1978 considered the proposals and adopted the rule amendments proposed. These included a rule providing for the election among others of divisional secretaries and representatives to the annual federal congress. This rule among others was then certified by the Registrar pursvant to s.139(4) of the Act on 10 November, 1978. Earlier the Institute had asked in August, 1976 that the election of divisional secretaries and divisional wwative be conducted pursuant tv 5.170 of the Act but the Registrar had advised on 3 August, 1978 that this could not be done since the positions were not provided for in the rules. This was during the time the elections under the by-laws were in progress. On 9 November, 1978 the Institute anticipating the certification of the rules asked that the election of divisional secretary and divisional representative be conducted under s.170. By the time the request was made on 9 November the elections conducted under the by-laws had in fact closed and a declaration had been made except for two positions in Victoria. This remained the position until on 11 January, 1979 the Registrar was advised that the election had been completed and on 24 January, 1979 under these circumstances he refused the request on the ground that he was not satisfied that any election was due to be held. From this history it 1s quite clear that there has been con- siderable delay and an odd juggling with the rules of the organization and the by-laws during the period from March, 1978 to date. After March, 1978 the immediate problem was to secure the election of divisional secretaries and a Givisional representative so that the annual federal congress an 1979 could be validly held. Rules providing for this could have been quickly and shorily drawn, submitted to a special general meeting and passed in ample time to allow elections to be held. For some reason this was not done. I have only affidavit evidence before me. I accept that Mr. McGrane was 111 and unable to attend in person, but there are other officers whose evidence should have been available. I am not satisfied on what I have before me that the Institute acted reasonably in conducting the elections for divisional officers and representative under by-laws which it knew had no validity. Certainly after 10 November, 1978, the date of certification by the Registrar, there was still time to conduct these elections under the then registered rules in time to allow the annual federal congress to be held in March. There 1s then an unexplained failure to comply with the rules in this important matter at a time when the officers were well aware of the invalidity of the by-laws. Moreover the docurents put before me leave me in some doubt how far the members have been advised of the facts. I have already ref- erred to the note attached to the returning officer's call for nominations and it would appear from it that as far back as July, 1978 the Institute had decided that 1t would continue 10. to hold elections under the by-laws rather than under the registered rules. No mention is made of further elections being contemplated if the rules were amended and certified in time but instead 1t 1s suggested that recourse will be had to rule 23. I have already mentioned what seems to me a clear misstatement of the effect of the judgment of the Full Bench ain the previous proceedings and my attention has not been drawn to any other material which would persuade me that the facts of this case have in any way been laid before the membership of the organization. It 18 quite clear that irregularities occurred: (a) an the election of divisional secretaries and the New South Wales divisional representative on annual federal congress although there were no registered rules enabling this to be done; (b) the annual federal congress in 1979 had no quorum present because there were no validly elected divisional representatives present. Fach of these irregularities arose by deliberate choice of those concerned. The decision to conduct the elections under the unregistered by-laws was made on 7 June, 1978 as appears from a declaration by Mr. McGrane annexed to his affidavit. The rules committee which made this decision was described as an ad hoc committee. No material was put before me to suggest that this decision was in any way confirmed or adopted by any of the governing organs of the Institute. The decision to do this was made at a time when it was amply clear that rules covld have been adopted and certified in ample time to allow the annual federal congress to meet as was planned in March of 1979 but a deliberate choice was 1l. made not to do this. After the special general meeting had adopted some rules including a rule dealing with the election of divisional officers, some attempt appears to have been made to persuade the Registrar to take steps to have the ballot for divisional secretaries and divisional representative for New South Wales conducted under s.170 of the Act. I do not understand why this was done or what was hoped to be achieved. The election had been declared in all States except Victoria and was in progress in Victoria. Whatever the real purpose the request was not pursued with the vigour one would expect if it were a real attempt to have a fresh election conducted which would enable validly elected representatives to be present at the next annual federal congress. There was only the request on 9 November, 1978, a letter and declaration of 11 and 19 January, 1979. The Industrial Registrar 1unterpreted these documents as showing that the electicn he was asked to conduct had an fact already been conducted and I think he acted quite properly in doing so. As I have said, Mr. McGrane did not give oral evidence before me. I was asked by Mr. McNally for the Institute to draw snferences from certain facts. The facts however seem to me quite clearly to show a firm decision by the rules committee to have elections under the by-laws in June of 1978 and nothing which occvrred since seems to me to have in any way replaced that intention. Nor does it show any desire after election rules were certified to have 12. a fresh election under them. In proceedings of this sort I must first be satisfied that an irregularity has occurred. I have no doubt that irregu- larities occurred firstly in the election of representatives and divisional officers under by-laws which were not registered or certified as rules. A further irrequiarity occurred in the holding of the 1979 annual federal congress when there was no quorum present and when there were present persons purporting to be divisional secretaries from each division and a person purporting to be a New South Wales divisional representative. Having found that invalidities occurred I turn next to the question whether T am satisfied that the making of an order would not do substantial injustice to any member. I am not so satisfied. Mr. Wiseman contested the elections held under the by-laws for the victorian divisional secretary. Later he made application for an inquiry under s.159 of the Act anto this election. The grounds of his application were not Placed before me but it was said that the application was later withdrawn. It may be that an irregularity occurred but that Mr. Wiseman realised that the election conducted under the by-laws was not an election to which s.159 applied. Without material as to these matters I cannot be satisfied that the making of an order that the person purported to have been elected hold office for the balance of 1979 would not do substantial injustice to Mr. Wiseman. I think 13. similar cons derations affect the participation at least of the Victorian divisional secretary in the proceedings of the 1979 congress and I am not satisfied that the making of an order in the terms sought relating to that congress would not do substantial injustice to Mr. Wiseman. Nothing has been put to me as to the position of creditors. While I am unable to see any way in which they might be affected the lack of evidence makes it difficult for me to reach the positive conclusion required in the section. Apart altogether from these matters there are I think other reasons why this application should not be granted. Section 171c is one of a group of sections providing machinery and methods for the validation of invalidities. It 2s I think clearly designed to provide a means firstly whereby organizations may avoid long investigations twnto past matters with a view to obtaining orders that certain acts were invalid. So a virtual four year moratorium is amposed. In other sections specific machinery is provided to enable invalidities to be cured and then s.171¢c gives an overriding power to the Court. Primarily it 1s I think designed to enable orders to be made where there have been unvalidities which have occurred unwittingly or perhaps where they have occurred knowingly but extreme difficulty would be fourdin curing them. I am loath to apply the section te a case where the invalidity was knowingly and deliberately allowed to happen and that is particularly so when there exist means whereby the organization may cure 14, the invalidity itself. Mr. McNally claimed that the positions of divisional secretary and divisional representative could be filled by the organization acting under its rules and the acts of the purported annual federal congress in 1979 could be submitted to a special general meeting of members and so validly adopted. As I have previously set out the invalid election was deliberately carried out by the organization with the full knowledge from the 1978 proceedings in this Court that it would result in a nullity and an inability to assemble an annual federal conyress with a quorum. So far as the congress is concerned, it dealt with and apparently only with the question of rule amendments. Amendments to rules are vitally important in organizations and this Court has taken the view that rules on this subject matter are generally mandatory and must be strictly adhered to, It would be wrong I think to validate the proceedings of the congress so that although it was without a quorum in law its decisions about rules would be binding. For these reasons I refuse the application. " ' frosaeny eee Sl te : Ar, 1? 4