CATCHWORDS Industrial law ~ Superannuation or other fund for full-time federal officials - rules governing the operation and control of such fund - Conciliation and Arbitration Act 1904 s.141, s.141(8A), s.133A (2)(e). No. 11 of 1979 WILLIAM MARK WHEELER v. JOHN FORSTER AND B. OLIVER Coram: Evatt J. Sydney 11 September 1980 IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No.1ll of 1979 ) ) INDUSTRIAL DIVISION In the matter of the Conciliation and Arbitration Act 1904, s.141 BETWEEN: WILLIAM MARK WHEELER Claimant JOHN FORSTER AND B. OLIVER Respondents oO R_D_ E R JUDGE MAKING ORDER: EVATT J. DATE OF ORDER: 11 September 1980 WHERE MADE: Sydney THE COURT FINDS THAT:(1)That part of r.25 of the rules of the Australasian Society of Engineers which reads "and abide by the regulations governing that fund" contravenes s.140(1)(a) of the Conciliation and Arbitration Act 1904. (2) The Court further finds that the rules of the Australasian Society of Engineers contravene s.140(1)(a) of the Act in that such rules fail to make provision as required by s.133 A(2)(e) for the operation and control of the fund provided for in r.25. (3) The Court, pursuant to s.141(8A), makes an order in accordance with the finding set out in (1) above. (4) The Court in the exercise of its discretion does not make an order in relation to the finding set out in (2) above but adjourns the matter pursuant to s.140(6) and/or generally to 10 December 1980. --/2.. (5) Otherwise the order nisi is discharged. (6) Liberty is granted to any party including the Australiasian Society of Engineers to apply on forty-eight hours notice to the Court and to the other parties including the said society. Date Entered: DISTRICT REGISTRAR IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. 11 of 1979 ) ) INDUSTRIAL DIVISION In the matter of the Conciliation and Arbitration Act 1904, s.141 BETWEEN: WILLIAM MARK WHEELER Claimant AND: JOHN FORSTER AND B. OLIVER Respondents 11 September 1980 Coram: EVATT J. REASONS FOR JUDGMENT William Mark Wheeler,a member of the Australasian Society of Engineers (the organization), an organization registered under the Conciliation and Arbitration Act 1904 (the Act) seeks orders pursuant to s.141 of the Act giving directions to the respondents to perform and observe the rules of the organization and in particular r.25. Mr Kenzie of Counsel appeared for the claimant and Mr Trew of Counsel appeared for the respondents. Rule 25, so far as is relevant, reads: "There shall be a retiring fund for union officials; all full-time officials shall contribute to the said fund, and abide by the regulations governing that fund". aef2ee The rule goes on to deal with the age at which paid officials shall retire. The first-named respondent John Forster is Secretary of the Tasmanian Branch of the organization whilst the second-named respondent B. Oliver is the Assistant Secretary of that branch. Both respondents are and have been since taking their respective offices full-time officials within the meaning of r.25. Pursuant to directions hearings, points of claim and points of defence were filed. Such points of defence challenged the validity of the part of r.25 set out above and 1t was indicated by Mr Trew that the respondents, if the Court found such invalidity, would be seeking orders pursuant to sub-section (8A) of s.141. Sub-section (8A) of s.141 which was inserted into the Act when that section was amended by Act No.108 of 1977 (s.18(1)(c)) commencing 1 December 1978, reads: "(8A) Where the Court, in considering an application under this section, finds that the whole or a part of a rule of the organization concerned contravenes sub- section (1) of section 140 or that the rules of the organization concerned contravene that sub-section 1n a particular respect, the Court may make an order setting out that finding and section 140 applies in relation to that order as 1f - (a) that order had been made in proceedings relating to an application under that section; and (b) the finding set out in that order was a declaration of the Court. " -3- As a challenge was to be made to its rules, leave was granted to the organization to intervene in the proceedings. Mr Kenzie also appeared for the organization. The organization consists of various branches. The supreme control of the organization is vested in the members and subject thereto control is exercised by a Federal Council (c.9A) which consists of the Federal Secretary, Branch Secretaries and delegates from each branch of the organization (r.9). Federal Council has the power to repeal, alter or add to the rules (x.9A(b)) and to compose regulations for the administration of a retiring allowance for paid official(sic) of the organization (r.9A(d)). Membership to the organization is effected through the branches. Entrance fees and contributions as determined from time to time by Federal Council are paid by members to their respective branches. Branches pay an allocation of funds to the credit of the Federal Council General Fund each quarter as is determined by Federal Council. Federal Council has power to invest moneys belonging to the General Fund and Retiring Allowance Fund in such securities as Council may from time to time decide (r.21). Such rule further provides that Federal Council shall have power to vote moneys for extraordinary or special purposes not specified in the rules at a special meeting called for such purpose. It would appear that for some time moneys belonging to the organization or to its branches have been paid into the fund set up under r.25 on the basis that the amount thereof is 1n proportion to a particular amount paiadfrom the wages of each full-time official. Further the Council, pursuant to its power under the rules to compose regulations for the administration of a retiring allowance for paid officials,has drawn up certain regulations. Such regulations have not been certified by the Industrial Registrar and do not purport to be certified rules within the meaning of s.139 of the Act. It 1s clear in my view that the Court's power under s.141 of the Act to order performance and observance of the rules of an organization by a member of that organization who is under an obligation so to do can only be made in respect of the certified rules of the particular organization. Accordingly, the Court does not have power to make an order under s.141 directing the respondents to make contributions to the fund set up by r.25 at the rates and at times provided for in such regulations. Once the question of the validity of r.25 was raised 1t was apparent that it would be convenient to deal with this issue as a preliminary point. This course was consented to by the parties. The respondents' argument directed against the validity of r.25 was that the rule was contrary to s.140(1){(a) ~-/5.. in that the rule failed to provide conditions required by s.133A, Reg.115(1)(d) (ii), (ix) and (x1); Reg.115(1)(g) and contra- vened s.140(1)(c)and (da). In addition it was further argued that the rules of the organization fazrled to provide such conditions. Section 133A which was inserted by s.5(1) of Act No.89 of 1974, provides so far as organizations are concerned that the rules of an organization which was divided into branches shall make provision for a federal fund which shall be managed and controlled in accordance with rules relating to the organization as a whole and that each branch shall have a branch fund which shall also be managed and controlled in accordance with the rules of the particular branch. Further, such rules shall make provision in relation to those respective rules in accordance with sub-ss.(2) and (3) of the section. Sub-section (2) provides that the federal fund shall consist of (inter alza) fees paid in accordance with the rules for the payment of capitation fees by branches to the organization ((2(b)) and any superannuation or long service leave or other fund operated or controlled in accordance with rules relating to the organization as a whole for the benefit of its officers ((2)(e)). It 1s clear in my view that r.25 read in conjunction with r.21 1s dealing with a superannuation or other fund for the benefit of full-time officials of the organization within the meaning of s.133A(2)(e). .-/6.. Accordingly the rules of the organization should have, since 29 October 1975 being one year after the date of commencement of Act No.89 of 1974 or such longer period as the Industrial Registrar may have determined (s.5(2) of that Act), included rules making provision for the operation and the control of the fund referred to in r.25. I am of the opinion that the words "and abide by the regulations governing that fund" where appearing at the end of the opening paragraph of r.25 are not a reference to such rules and are contrary to s.140(1)(a) an that they fail to conform with s.133 a(2){(e). Those particular words are in my view severable and should be struck out. The opening paragraph of r.25 would then read "There shall be a retiring fund for union officials; all full-time officials shall contribute to the said fund". The paragraph in that form would not, in my view, be contrary to the Act or the Regulations although the rules of the organization do fail to provide for the conditions required by s.133 A(2)(e). Once the particular words referred to are severed from r.25 and the rules as a whole fail to make provisions for the operating and control of the particular fund then the Court, in my view, should not make an order directed to a particular full-time officer of the organization to observe r.25 and contribute to the fund. As there are no rules os/7ae dealing with hoy the fund is to be operated and controlled the Court is unable to make any directions as to the amount a particular full-time officer should contribute and the time and place for the payment of such contributions. As it has been shown that r.25 is in part contrary to s.140(1)(a) and that the rules fail to make provisions required by s.133 A so that orders sought by the claimant should not be made it is unnecessary to determine whether the particular rule or the rules as a whole are contrary to Reg.115 as particularised. Further I am of the view that ex facie the opening paragraph of r.25 after the offending words are struck out is not contrary to r.140(1)(c). I am of the opinion that where an organization decides to set up a superannuation or retiring fund for full-time officers of the organization it is reasonable that provision be made that all full-time officials contribute to such a fund. If acceptable evidence was led to show that in a particular case under certain circumstances it would be unreasonable or unjust for a particular full-time officer to make such contribution then the Court might determine that such a rule was contrary to s.140(1)(c) of the Act. Accordingly the orders as asked in the order nisi herein are refused. This then leaves for determination the respondents! application under s.141(8A). In accordance .-/8.. with the view already expressed a declaration is made that the part of r.25 of the rules of the organization which reads "and abide by the regulations governing that fund" contravenes s.140(1)(a). Further in the exercise of the discretion given by s.141(8A) I adjourn the matter pursuant to s.140(6) and/or generally for a period of some three months for the purpose of giving the organization an opportunity to alter its rules to include such rules as the organization may be advised to provide for the operation and control of the fund provided for in r.25. Liberty to apply is granted to any party on forty-eighk hours notice to the Court and to the other parties. SR ene ee rT-7 eo ow ee the Se weed luis Lonour q i - . coe TO Sader Ae 2. . st BV4IT i Thane : 4