A125 Industrial law - whether candidate validly elected to CATCHWORDS membership - interpretation of rules - meaning of "All persons present and voting" - rule requiring names of candidates for membership to be submitted to Annual General Meeting for election to membership - whether such rule 18 oppressive, unreasonable or unjust - Conciliation and Arbitration Act, s.2(e) and (f), s.140, 8.141. Re: LYNCH v. HOWARD N.S.W. No. 29 of 1979 J.B. Sweeney J. Sydney 13th December, 1979 IN THE FEDERAL COURT OF AUSTRALIA INDUSTRIAL DIVISION NEW SOUTH WALES DISTRICT REGISTRY IN THE MATTER of the Conciliation and Arbitration Act, 1904 AND IN THE MATTER of an application under Section 140 thereof THE COURT ORDERS THAT: The application be dismissed. BETWEEN ALICE ROSE LYNCH Claimant AND W.J. HOWARD, A. BARTON, J. MARSHALL, J. OSBORNE, K. MARCH, N. MCGREGOR, E, JOHNSON, D. WATKINS, F. LAURIE, D. WITTINGSLOW, W. NOCK, W. SPICER, L.J. OSBORNE, A. FOSTER, F. FOSTER, R. SMALL, E. TREVORS, B. RENET, A. BOWDEN, L.J. SHORT AND THE SHOWMEN'S GUILD OF AUSTRALASIA Respondents (N.S.W. No. 29 of 1979) ORDER JUDGE MAKING ORDER: J.B. SWEENEY J. DATE OF ORDER: 13th December, 1979 WHERE MADE: Sydney IN THE FEDERAL COURT OF AUSTRALIA INDUSTRIAL DIVISION (N.S.W. NO. 29 OF 1979) ewww NEW SOUTH WALES DISTRICT REGISTRY IN THE MATTER of the Conciliation and Arbitration Act, 1904 AND IN THE MATTER of Applications under Sections 140 and 141 thereof BETWEEN ALICE ROSE LYNCH Claimant AND W.J. HOWARD, A. BARTON, J. MARSHALL, J. OSBORNE, K. MARCH, N. MCGREGOR, E. JOHNSON, D. WATKINS, F. LAURIE, D. WITTINGSLOW, W. NOCK, W. SPICER, L.J. OSBORNE, A. FOSTER, F. FOSTER, R. SMALL, E. TREVORS, B. RENET, A. BOWDEN, L.J. SHORT AND THE SHOWMEN'S GUILD OF AUSTRALASIA Respondents 13th December, 1979 J.B. SWEENEY J. REASONS FOR JUDGMENT This 18 an application by Mrs. Alice Rose Lynch firstly for an order pursuant to 8.140 of the Conciliation and Arbitration Act, 1904 ("the Act") declaring that part of r.4 of the rules of The Showmen's Guild of Australasia ("the Guild") contravenes s.140(1)(c) in that it imposes upon applicants for membership conditions, obligations or restrictions which having regard to the objects of the Act and the purposes of the registration of organizations under the Act are oppressive, unreasonable and unjust and secondly for an order pursuant to s.141 of the Act that the personal respondents who are the members of the committee of management of the Guild perform and observe the rules by treating one James Thomas Lynch the husband of the applicant as a member of the Guild. The Showmen's Guild of Australasia ("the Guild") is an organization of employers registered pursuant to the Conciliation and Arbitration Act, 1904. The dispute arises under r.4 of the rules of the Guild which is in the following terms. 4. (a) Any person who is over the age of 18 years may become a member of the Guild provided that he is a full-time showman and has owned and operated his own show equipment for a period of 3 years prior to his application for membership. (b) Any person may become a member of the Guild who is the issue of a member of the Guild or the widow of a deceased member of the Guild and who is over the age of 18 years at the date of application for membership. (c) All applications for membership shall be in the form required by the Committee giving the qualifications of the proposed member in detail, signed by the applicant and by the proposer and seconder who shall be members of the Guild of not less than three years' standing, must be lodged or forwarded by post to the Secretary of the Guild at the Registered Office for the time being of the Guild, accompanied by the full amount of the prescribed entrance fees as hereinafter provided except in the circumstances set out in Rule 5(f) hereof. The Secretary shall cause such nominations to be posted on the Notice Board at the Registered Office of the Guild for a period of one month prior to the Annual General Meeting and shall submit the names to the next Annual General Meeting of the Guild for election. A person proposed for membership must receive a majority of the votes of all members present and voting at the meeting before being accepted as a member of the Guild. This voting shall be by secret ballot. (ad) On election by the Guild the Secretary shall notify the applicant of his acceptance as a member of the Guild. Before considering the 1ssves arising it is necessary to note that the Guild consists of something over 400 members who are persons engaged at shows held at various places in the Common- wealth. At these shows each operates a piece of equipment termed a "tool" being a piece of equipment of the kind generally limited to use by showmen. The shows appear to be held according to a roster and are so arranged as to allow showmen to travel from point to point to work during the duration of the show and then move on to the town or area where the next show is held. Shows are generally of a short duration, the longest appearing to be well under three weeks. It further appears that in the course of their business showmen grow to know each other and to have frequent dealings with each other. The Guild represents employers in the industry in industrial matters. This aspect of the Guild's activities seems of little relevance to the husband of the applicant who sought membership because on the evidence I think he had no employees during the relevant period and there was nothing in the evidence which could lead to a belief that he was likely to have employees in the future. A further aspect of the Guild's activities is in dealing with societies conducting shows at various places. In a number of such shows an area is set apart for the erection of stalls and the conduct of sideshows and use of this area appears to be limited to Guild members. This is not so in the case of all shows and even in those where such an arrangement has been come to, other showmen are allowed to work their particular pieces of equipment in areas outside the Guild area. The piece of equipment used by Mr. Lynch is known as a High Striker and consists of a device whereby an object is struck with a mallet and the weight of the blow then recorded on a dial. The evidence suggests that frequently the most suitable place for such a piece of equipment 18s close to a bar and in view of the nature of the piece of equipment, the fact that it is usually used by males and that its object is the recording of the strength of blows, there seems good reason for accepting that an area close to the bar would be a most suitable area. Complaint was made that Mr. Lynch's livelihood was being affected by the failure to admit him to membership but the facts disclose that he has conducted his business of a showman without membership of the Guild for a number of years now and there was no evidence which I find acceptable that his livelihood is in any way at stake if he cannot become a member of the Guild. Rule 4 firstly sets out in paragraphs (a) and (b) two classes of people entitled to membership of the Guild and then in Paragraphs (c) and (d) provides machinery for the acceptance of a person as a member and for his notification. It requires applications for membership to be dealt with at an annual general meeting and the evidence is that annual general meetings are held at a time which coincides with the holding of one of the major shows. The last annual general meeting, for example, was held during the period the Royal Agricultural Society Show was held in Sydney. This timing of meetings ensures a considerable attendance and on the occasion of the last meeting over eighty members or approximately 20% of the membership was present. The first issue which arises is whether under the procedure which was followed at the meeting Mr. Lynch was in fact admitted to membership. The history shows that the rules were changed to their present form in 1977. Among the changes then made was the change to a secret ballot. Under the procedure adopted in 1978 and repeated in 1979, applicants for membership who complied with either r.4(a) or (b), completed their forms and paid the amounts prescribed in r.4(c) were considered at the annual general meeting. A form was prepared and used at the meeting. This form had the names of the candidates on it each in a separate space and in each space there appeared the words "yes" and "No". The paper contained as well an instruction to cross out the word not applicable. votes having been cast the papers were placed in a sealed box by the voter or the Returning Officer. A count was made and it appeared there were 86 ballot papers returned and one extra ballot paper which had been issued in place of one destroyed. That meant 86 persons had received ballot papers for the purpose of voting. A number of ballot papers had no vote recorded on them at all and other ballot papers had some votes recorded in favour and some against in the case of some candidates, but no votes in others. In no case however did the whole 86 cast either a "ves" or a "No" vote for a candidate. The first candidate on the list was a Mr. Chant. Forty-two "yes" votes were recorded, five "No" votes and consequently thirty-nine papers did not record a vote in respect of him. In the case of Mr. Lynch, fourteen "yes" votes were recorded, four "No" votes and the remainder, namely 68, did not record any vote in his case. The Returning Officer declared those who had received more than half plus one "yes" votes of the 86 votes elected and those who had received fewer than one-half plus one "Yes" votes of the 86 votes were declared not to have been elected. The issue now raised is the meaning of the sentence "a person proposed for membership must receive a majority of the votes of all members present and voting at the meeting". The submission of the applicant is that all that is required is a majority of the votes in the case of each candidate treating each candidate as being involved in a separate election. So to do seems to me to pay too little regard to the actual terms of the rules and particularly to the words "all members present and voting". Indeed if the applicant's submission is to be accepted those words are purely redundant. In my view the history of the rule supports this view. The rule originally provided in r.5 as follows: Candidates applying to the Guild for membership must be proposed and seconded on the application form of the Guild. Such proposer and seconder must be financial members of the said Guild and shall be responsible for the said applicant's character and integrity. The applications shall be placed before a meeting of the members of the Management Committee and if a motion for admission be carried the candidates shall be admitted to membership. That was replaced in 1946 by a rule which provided: The Guild shall consist of an unlimited number of employers over the age of twenty one years who are reputable and respectable followers of the calling of a Showman. Members shall be elected by the Guild at the Annual or Special General Meetings of the Guild only. The next change was made in 1955. It follows largely the present procedure in r.4 but then provided a person proposed for membership must receive a two-thirds majority of the members present at the meeting and voting before being elected as a member of the Guild. No provision was made for a secret ballot. The next alteration was made in 1977 and the latter part of the rule was then changed to provide that a person proposed for membership must receive a majority of the votes of: all members present and voting at the meeting before being accepted as a member of the Guild. This voting shall be by secret ballot. The change then has been from election by the committee of management firstly to election at annual and special general meetings only then to a change for a requirement of a two-thirds majority and finally to the present form requiring a majority of the votes of all members present and voting at the meeting with an additional provision that the voting shall be by secret ballot. In other rules, provision is made for various matters to be dealt with by simple majority. Examples are r.14(c) and r.17. Significance must also in my view be attached to the insertion of the word "all" and I am of the opinion that the method I have described above adopted in 1978 without protest and followed in 1979 again without protest was the appropriate method under the rules. It gives force and effect to the words "all members" and to the words "present and voting" and this is further emphasised by the change in language shown in a comparison of this rule with the other rules. It was further argued that those ballot papers which had been placed in the box by either a member or by the returning officer at the request of a member and which did not show in each appropriate case a vote for or against one of the applicants for membership or which, as was the case with some, had no vote recorded at all, were not votes (of all persons present and voting at the meeting). Consequently it was arqued since Mr. Lynch had received 14 "yes" votes, 4 "No" votes and the balance had not cast a vote, he had been elected. However I do not think the rule is to be so interpreted. In a case dealing with voting under the Temperance (Scotland) Act, the Scottish Court of Session said 1n considering the meaning of the expression "Votes recorded": "It seems plain that if the votes which are to be subjected to a re-count and scrutiny are the "votes recorded", then the "votes recorded" must include all the ballot papers which were put into the ballot box by the voters in the exercise of their right or duty to vote, and cannot exclude those which the returning officer, at the first count, held to be insufficiently or improperly marked, or to be not marked at all. I think a voter records his vote when he puts his ballot paper into the ballot box: and I do not think it is material that, owing to carelessness, or ignorance, or inexperience, he has failed so to mark his ballot paper as to make the vote he thus "records" an effective exposition of his opinions. Moreoever, having regard to the requirement of certain proportions and majorities of votes contained in subsection(3) of section 2, I have difficulty in construing that subsection on any other basis than that those propor- tions or majorities relate to the total number of persons who come and exercise their privileges at the poll, whether those privileges have been exercised effectively or ineffectively." Latham v. Glasgow Corporation 1921 S.c. 694 at 713. In my view then the applicant's husband was not elected a member of the Guild at the last annual general meeting and is not entitled to an order requiring that he be treated as having been elected. I turn now to the second order sought. It is claimed that £.4(c) imposes upon applicants for membership conditions obligations or restrictions which having regard to the objects of this Act and the purposes of registration of organizations under this Act are oppressive, unreasonable or unjust. It is to be noted that under Reg. 115 of the Conciliation and Arbitration Regulations, rules must provide the times when and the terms on which persons shall become members. The two relevant objects are those set out in s.2(e) and (f) of the Act. I think that to afford members an opportunity of deciding those with whom they wish to associate in an organization encourages the organization of representative bodies and their 10. registration rather than the reverse and the same may be said of object (£) to encourage the democratic control of organizations and the full participation by members of such an organization in the affairs of the organization. As I have already said, the annual general meeting is held at a time most likely to secure a substantial attendance and indeed at this annual general meeting over 86 persons were present at the time when the voting on new members took place. [It cannot in my view be said that using these objects as the criteria the rule is either oppressive, unreasonable or unjust. It is moreover to be noted that the same criteria applied to a consideration of the rules of an organization of employees and it is quite clear from the insertion of s.144 that it is contemplated by the legislature that there will be persons employed within the conditions of eligibility rules not of general bad character who are under rules not admitted to membership. It is for this reason, among others, that the statutory right given under 3.144 was inserted in the Act. If such a rule can exist in the case of an employees' organiza- tion then it seems to me that applying like criteria such a rule may exist in an employers' organization without offending against s.140. I think it not in any sense oppressive, unreason- able or unjust that members of an organization should be entitled to choose those with whom they wish to associate in an organization. If in the administration of such a rule the organization or its responsible bodies act in such a manner that conditions, obligations or restrictions which having regard to the objects of the Act and the purposes of registration are oppressive, unreasonable or unjust then that may afford a ground for action under 3.143. The distinction clearly drawn by the statute between a rule and its ll. possible administration seems to me to lend support to the views I have expressed. I think no case has been made out for an order declaring that r.4(c) contravenes s.s.(1) of s.140. The application then both pursuant to s.140 and s.141 is dismissed. I ce:tify that this and the ten preeel.mg pares are a true copy of the Reasons Zor Juagment herein of bis Honour Mr Justice J7.@. Qweeney IN utohuruon Associate 13 verrbor 1479 Dated: