CATCHWORDS Industrial law - membership of registered organisation - charge against member of. disobedience to lawful decision of Federal Council - charge invalid for procedural and substantive reasons - amendment of rules of organisation - procedure to be foliowed - whether certain rules contravene ' provisions of the Conciliaticn and Arbitration Act 1904 - Conciliation and Arbitration Act 1904, ss.132, 139, 140, 141, and 188; regulations thereunder 115(1)(d)(111) ana (v). RICHARD JAMES SQUIRES v. KEITH STEPHENSON and Ors. V No.6 of 1981 Sheppard J, Sydney 14 February, 1983 IN THE FEDERAL COURT OF AUSTRALIA ) ) ViCIORI"£ DISTRICT REGISTRY ) V No. 6 of 1981 INDUSTRIAL DIVISTON IN THES MATTER of the Conciliation and Aroitration Act, 1904. BETWEEN RICHARD JAMES SUUIRES Applicant AND KEITH STEPH=NSCh and Ors. Respondents CORE Snenvard J. fee olor \qSS SEASONS FOR JUDGMENT This 1s the return of a rule to show cause granted by Northrop J. on 4 May, 1981. The applicant is e nember of the Flight Stewards' Association of Australia, an organisation registered pursuant to the provisions of s.132 of the Concalietion and Arbitration act 1904 ("the Act"). The application is brought purauvant to ss.14U0 and 141 of the Act. The respondents to the application are the ASsociation already mentioned and the members of the Federal Council thereof. One of these (the evidence does not reveal his name) had resigned before the events in question in the proceedings. An amendment to the title of the proceedings should be made before any final order 1s taken out, The applicant seeks a number of orders each of whicn is specifred in the rule. Rather than set out the orders sougnt in this gudgment I heave appended the rule as a schedule to it.- The applicant did not eventually press for orders 5(c), 6, 7 or 10(iv). Order 3(b) was amended by sub- stituting for the word "describing" in the first line thereof the word "treating". There were some other amendments made during the course of the hearing to which I snall later refer. The contest between the parties arises because of disagreements between them which occurred at or about the time of the imposition of bans by the Association upon the Special Performance variant of the Boeing 747 aircraft un the early months of 1981. The aircraft 1s a shortened version of the gumbo get aircraft operated by Gantas Limited and was considered by Qantas Limited not to require the same number of cabin crew as the standard version thereof. Two major matters of disagreement concerned the pur- ported increase by the Council of the Associetion of membership fees and the laying of a charge against the applicant by another member of the Association alleging a breach of the Association's Rules, In order that the various questions raised for decision may be properly understood it is necessary that I refer to certain of the "ules of the Association, to certain evidence which was given and to some of the provisions of the Act, The Association is, by Rule 2, to consist of an unlimited number of employees engaged in the occupation of aircraft cabin attendants including flight stewards and pursers. It does not include airline hostesses. Rule 7 provides for admission to membership and Rule 8 for cessation of membership. In particuler ule 8 pro- vides for the manner in which a member may resign from membership. Rule 9(b), subject to a purported amendment which 1s in dispute in these proceedings, provides that con- tributions payable by members shall be $104 per annum payable on or before 31 August in each financial year, Rule 10 provides that the Federal Council or Federal Executive may from time to time strike a levy on all members, The levy is not to exceed the sum of $1 "per member per week", A levy 1s not to be struck other than for purposes contained in the objects of the Association. Rule 11 provides for the consequences which are to ensue should a member be in arrears with his membership fees. Rule ll(a), subject again to a purported amendment the validity of woich 1s in question in these procteedings, is as follows: "{c) Notwithstanding anything in these rules to the contrary any Member who by agreement with his employer in a form approved by Federal Council has his contributions deductea from his salary shall contribute at the rate of 2.00 per week and so long as such deductions continue to be made shall be deemed to be a financial Member of the Union for all purposes of the Rules." Rule 12 contains the usual provision that the supreme governing body of the Association, "subject to the control of the Association by the nembers in accord- ance with these rules shall be the Federal Council" the constitution of which is then provided for, By Rule 12(A)(c) Council 1s to meet at least monthly and at such other times as are determined by it. By Rule 12(A)(d) a special meeting of the Council may be called upon request in writing to the Secretary by any four merbers of Council. Paragraphs (g) and (h) of Rule 12(4) are as follows: "(g) The Council, the Executive, the Federal President or the Federal Secretary shall have the power when deemed necessary to contact by telegram all members of the council for a vote on any motion or question of importance. Upon a majority of them indicating their approval by telegram the decision so obtained upon such motion or question shall have the same effect as a decision made by a resolution of Youncil at a duly constituted meeting; provided that if, within a period of seven days from the despatch of tne telegram, the motion or question has not been determined according to the fore~ going provisions but votes have been cast by not less than e1ght members of the council the motion or question shall be determined in accordance. "with the majority of votes cast and the decision so obtained upon such motion or question shall have the same effect as a decision made by resolution of Council passed at a duly constituted meeting. (h) At all meetings of the Council five shall form a quorum." Rule 12(A)(m) provides that the Council is to have the care, control, custody, superintendence, management and administration in all respects of the affairs, business, funds and property of the Association. Without limiting the generality of the foregoing powers it may, inter alia, fine, suspend or expel any member in accordance with the Rules. Rule 12B provides for an appeal by a member to the next meeting of Council against any decision of the Council adversely affecting that member. An appeal is to lie against the dismissal of a charge as well as against "the upholding thereof, and either party may appeal against the penalty imposed", The rule goes on to provide for the procedure to be followed in the event that an appeal is instituted. Rule 13 provides for the constitution of the Federal Executive. The Executive, between meetings of the Council and subgect to review by it, 1s to have the care, control, custody, superintendence, management and administration De in all respects of the affairs, business, funds and property of the Association. Three members of the Federal Executive are to form a quorum. Rule 15 provides that general meetings of the Association are to be held at least quarterly. A quorum shall be 30 members. The Secretary is to + advise members of the time and place of each general meeting. Rule 15(d) provides, "Decisions of General Meetings shall not bind the Council", Rule 15(e) enables the Council to declare attendance at particular general meetings as compulsory for all members. Non- attendance at a compulsory meeting exposes those failing to attend to a fine to be determined by Council. Rule 21 provides generally for the discipline of members, Rule 21(a)(iv) provides that any member of the Association may charge any other member with, "Advocating or supporting disobedience by members to rules or lawful decisions of the Association". Paragraphs (vo), (c), (4) (so far as it is relevant) and (e) of Rule 21 are as follows: "(b) Any charge made by a member shall be in writing and made to the Federal Secretary of the Association. (c) The Council shall have the power to hear and determine charges under this Rule. "(d) A member charged under these Rules shall be given notice of the charge. coe cee (e) The Council or the Federal Secretary may summon the member charged to appear before the Council and/or to answer' the charge in writing or in such other manner as required by the Council and/or tne Federal Secretary." Subsequent provisions of the rule provide for the manner in which a charge is to be heard, If the Council finds the member guilty of an offence it may fine him any sum not exceeding $20, may censure or reprimand him, or it may suspend or expel him from membersnip. Rule 22 1s a plebiscite provision, Essentially it provides that ballots of the whole of the membership of the Association shall be held on any question either when directed by the Council or upon a petition signed by 10 per cent of the members of the Association. Where such a ballot is taken, the decision shall be binding on the Association and all members, provided that at least one third of the persons eligible to vote in the ballot have voted. Finally, reference should be made to Rule 32 dealing with the manner 1n which alterations to the rules may be made. It provides that the Council may rescind, add to or amend the Rules either by telegraphic vote in accordance with Rule 12(¢)(sic) or in accordance with sub-rule (b) of Rule 32. The reference to Rule 12(¢) is plainly a reference to Rule 12(A)(g) earlier set out. Rule 32(b) is as follows: "(b) At any meeting Council may rescind, add to or amend these Rules, but such rescission, addition or amendment snall not be considered unless notice of motion in writing shall have been given prior to the commencement of the meeting or of a session of the meeting to the Chairman who shall read the notice of motion to the meeting. Amendments to the notice may be proposed when such motion 1s being con- sidered by the meeting." I next turn to the evidence. On 18 February, 1981, there was a meeting (described as a compulsory stop work meeting) of tne Association. Amongst the resolutions passed was a resolution to the effect that the meeting directed thet during the currency of the dispute concerning the manning of the Special Performance variant of the Boeing 747 aircraft, no flight steward was to work on any Qantas aircraft which had been prepared or in any way worked on or manned by staff volunteer labour, A furtner compulsory meeting of the Association was held on 27 February, 1981. At that meeting there was tabled a telegram from the applicant 1n which the applicant tendered his resignation from the Association. The telegram was addressea to the Secretary, Mr. W. B. Smith. On 20 February, 1981, that is a week before the meeting last referred to, Mr. Smith sent the applicant a telegram purporting to accept his resignation, At the meeting held on 27 February a motion that the meeting of members endorse the Secretary's decision was lost. Subsequently on 13 March, 1981, tne applicant purported to withdraw his resignation. The previous day, 12 March, 1981, a member of the Association, one P. M. Jacobs, wrote to the Secretary a letter in the following terms: "I wish to charge Mr. Rick Squires with advocat- ing disobedience of a lawful decision of Federal Council, in that he included in a telegram, addressed to the Federal Secretary, advising his intention to resign from the membersnip of the Flight Stewards Association, the following words 'Naturally it follows that I will be offering my services to Qantas forthwith'. The above charge is made in accordance with clause 21 - Discipline of Members, paragraph (A) sub-paragraph (iv). At the time of Mr. Squires offer of his services to Qantas, the Association was involved in a well publicised dispute with Qantas during which all members of the Flight Stewards Association were required to refuse to operate the S.P. Variant when reporting for duty. Such action in accord- ance with the direction of the Federal Council by necessity led to the standown (sic) of several hundred Flight Stewards. It 1s my belief that Mr. Squires snould be dis- ciplined for nis actions as outlined by him 1.e. the offering of his services to Gantas unqualif- iedly and forthwith." On 18 March, 1981, the Secretary wrote to the applicant a letter headed "Notification of a Charge". The letter was in the following terms: "IT am in receipt of your telegram advising thet you seek to withdraw your resignation of member- ship of the Flight Stewards' Association of Australia. Acceptance of your withdrawal will be conditional upon a number of factors. I have been asked by the Federal Council to demand from you an explanation of the following words which formed part of your resignation by telegram received in the F.S.A.A. office on February 20, 1981, that 1s: 'Naturally it follows that I will be offering my services to Gantas forthwith'. You are hereby charged in accordance with Rule 21, paragraph 4 'Discipline of Members', the charge being disobedience of a lawful decision of the Federal Council while the F.S.A.a. was engaged in a dispute of large proportions. You will consider this letter to be your formal notice in accordance with the Association rules, and that you are required to answer the above charge, either in person or by submission in writ- ing, to be delivered to the Association office within 14 days of receipt of this notice, The Federal Council meeting at which you must personally present your answer to the cnarge will be convened 1n the boardroom of the Association office, 377 Sussex Street, Sydney at 10.00 a.m. on Tuesday, April 7, 1981." Tne words quoted in the first paragraph of Mr. Jacobs' letter and at the end of the first paragraph of the Secretary's letter were included in the applicant's telegram tendering his resig- nation to which I have earlier referred. 10. There then passed between Mr. Smith as Secretary of the Association and the applicant certain telegrams and letters in which an attempt was made"fto find a suitable time and date for the applicant to appear before the Federal Council to answer the charge. In the result the applicant did not appear to answer the charge. Eventually he was notified that the matter would proceed on 30 April, 1981. , On 30 April, 1981, the Council of the Association passed a resolution as follows: "THAT in accordance with Rule 21(kh) and 12A(n)(i1i) Mr. Squires be fined $20.00 and suspended for one month, this suspension to take effect June 1, 1981". By a news sheet dated 22 May, 1981, signed by the Secretary members of the Association were notified as follows: "Federal Council directs all F.3.A4.A. members not to operate with MR. R. J. Squires should he be rostered as a cabin crew member in any category, for a period of one month commencing June 1, 1981. Further, such directive applies worldwide." The news sheet also reported the fact that the applicant had commenced proceedings 1n this Court seeking orders challenging the validity of the resolution passed on 30 April, 1981. Members were told that they would be advised "of proceedings". The proceedings referred to are these proceedings. ll. It 1s convenient to note that the first three orders sought in the rule nisi, a copy of which is appended hereto, relate to the purportec cherging of the applicant with the offence specified in Mr. Jacobs' letter. The remaining orders sought relate, by and large, to the other principal area of dispute between the parties, namely purported attempts on the part of the Council to 1ncrease membership fees. ; Earlier I referred to a meeting of tne Association neld on 27 February, 1981. There were further meetings on 9 and 16 March, 1981. At the second of those meetings there was passed a resolution in the following terms: "THAT this General Meeting of the F.S.A.A. authorises Federal Council to collect an additional $104 ver member for one year to cover wages lost and additional expenses incurred as a result of the recent dispute with Qantas Airways Limited. This additional $104 can be deducted at $4 per pay or be paid in one lump sum. This additional amount to be due from a date to be fixed by Federal Council". It is to be recalled that Rule 10 providing for levies limits the levy whicn may be imposed to $1 per member per week, A resolution to a similar effect as that passed on 16 March, 1981, was passed at the meeting held on 9 Marcn, 1981. 12. Thereafter the Council purported to amend both Rule 9(b) and Rule 11(c) of the Rules. Both these provisions have been earlier set out. The amendment to Rule 9(b) purported to insert after the words "per annum" therein the words, "or an amount to be fixed from time to time by Federal Council", The amendment to Rule 11(c) purported to delete therefrom the words "shall contribute at the rate of $2 per week and so long as such deductions continue to be made", The effect of the first amendment,if valid, would be to empower the Council to fix from time to time the membership fees of the Association. The effect of the amendment to Rule 11(c) was consequential upon the amendment to Rule 9(b). if that amendment were valid, a member would no longer be able, necessarily, to limit his contributions by deduction from his salary to $2 per week. According to the evidence of the Association's Secretary, Mr. Smith, the alteration to Rule 9(b) was made by tele- graphic vote of the members of the Council in accordance with Rules 32 and 12(A)(g) of the Rules earlier referred to. Telegrams were sent by the Secretary to all members of Council on 31 March, 1981. The evidence establishes that there were 17 members of the Council at tnat time. 13. 2 reps at eres F RED SG. Ted SRE ee! SD OT Rep aeR Ce IS . 53° vad ee aT Bead ee weeee thet EAE AS TY MS ts Saha aR TG I ANON PLO A Sipe ALT ay PI 25 SRL SE Nal oe thls an ama irene case ame aad att = Sonnet SAC enn revered eR ELON SP eae SE ee a ne Mr. Smith said that 14 replies were received, 12 being in agreement with the proposed amendment. The amend- ment was declared "carried" at a meeting of the Council held on 7 April, 1981. Apparently there was no reply from three members of the Council. The two who were against the proposed amendment indicated that they would not agree to it unless ats operation were limited in time in some way. One member of the Council who was in favour of the amendment qualified his approval of it by indicating that the amend- ment should say that the fixing of the amount was to be "by Federal Council", The original proposal put to the Council by Mr. Smith did not expressly indicate that this was to be the case. Nevertheless, Mr. Smith said that this 1s how he intended the emendment to be understood and it is how the amendment was formulated when declared carried on 7 April, 1981. The telegram procedure was not adopted for the passing of the amendment to Rule ll{c). Instead the procedure provided for in Rule 32(b), earlier set out, was purported to be followed. There is 1n evidence a letter dated 6 April, 1981, written by a Mr. Herbert, the Assistant Federal Secretary 14. —~ ae ~ - area en — aoe of the Association, to Mr. Smith. The letter is as follows: "In accordance with Association rule 32 part (b), this letter serves as notice of motion to allow Federal Council to consider a further change to the Rules in relation to contributions. As the current proposal is to increase fees to cover the financial loss incurred in the recent dispute, it will be necessary to vary Rule Il part (c). I recommend that in part (c) to delete the follow- ing words: ' 'shall contribute at the rate of $2.00 per week and as long as such deductions continue to be made'. " The letter 1s relied upon as a notice of motion for the purposes of Rule 32(b). There 1s a question as to whether the letter was received prior to the commencement of the meeting held on 7 April, 1981, at which the amend- ment was purported to be passed. Mr. Herbert did not give evidence. Mr. Smith's recollection of the matter is vague. Nevertheless I am satisfied that he gave his evidence honestly and endeavoured, as best he could, to recollect wnen the letter was received. He was cross- examined about his recollection. He was referred both to the notice of meeting, to which there was appended an agenda, anc to the minutes of the meeting. In neither 15. is there to be found any reference to Mr. Herbert's letter. I do not think there is significance in the absence of mention of it.in the agenda because it is dated 26 March, 1981. On the other hand, there is, in my Opinion, significance in the fact that no reference to the letter 1s found in a list of correspondence appended to the minutes. The list is referred to an the body of the minutés and thus incorporated therein. The resolution purporting to amend Rule 11(c) was moved by Mr. Herbert and seconded by Mr. Baker. Above the reference to the motion in the minutes are the words, "Notice of Motion in writing re Rule 11(c)". Tne presence of those words is equivocal. They are consis- tent with Mr. Herbert's letter having been received either before the meeting or during its progress. The significant matter, as earlier mentioned, 1s that no mention of the letter is to be found in the list of correspondence. After Mr. Smith had been referred to the minutes he gave the following evidence: "Tt must follow from that that the notice about the change of rules at tne 7 April meeting was only given to you during the meeting itself?--- On the day? On the day?--- Yes. And during the meeting 1tself, does it not?--- I would have to assume so, otherwise it would be on that list of incoming correspondence, 16. "If it was given to you on the day but before the meeting, it would be on the list of incoming correspondence?--- It would be. So it follows from that, from the fact that 1t was not on the list of correspondence, that 1t could only have been given to you during tne meeting itself?--- It does appear that way, yes." Further evidence was given about the matter in Mr. Smith's re-examination but it is not of help in resolving the question of whether the letter was received vrior to the meeting or auring its progress. . In the light of the matters to which I have referred, I am satisfied that the letter was presented to Mr. Smith auring the course of the meeting. But I am of opinion that this finding 1s not of great significance. In my view the rule contemplates a notice of motion prior to the commence- ment of the meeting being given to all members of Council. It could not be suggested that the letter was notified to all members of Council prior to the commencement of the meeting. The minutes reveal that apologies were received from six members. There were others absent from whom no apologies were received. The only other evidence to which it 1s relevant to refer 1S general evidence concerning the number of members of the Association and their availability to attend meetings. There is detarled evidence concerning this but I do not find it necessary to go to the detail 17. of it. The purpose of it was to persuade me on the one hand that the percentage required for a plebiscite an Rule 22 (10 per cent). was too high, and, on the other, that it was desirable that the affairs of an Association such as this be fully vested in a Council because of the difficulty in obtaining sufficient numbers of members at any general meeting. The evidence discloses that at the relevant time there were 1,763 members of the Association, Of these it could be expected that at any given time from one- third to one half would be absent overseas on duty. The evidence also established that many of the members, although based in Sydney, lived in the hinterland surrounding it, some in the Gosford area, some in the Moss Vale area and some as far away as Coffs Harbour or, in one case, Perth, Members had no reason to stay very long at the Sydney Airport when they came on duty or finished a tour of operations. Their habit was to come no earlier than they were required to do and to leave, more or less, when they had signed off. It could be expected that at times there would be a number of them together at the airport. This would occur 18. when flignts left or arrived at similar times. Nevertheless it was put that the need to obtain approximately 180 signatures for a plebiscite made it difficult for the plebiscite provision ever to be availed of. I should, perhaps, add tnat usually each Boeing aircraft has on board 13 members of the Association as cabin crew, Evidence was given of the presence of a notice board upon which a petition could be placed with a request for signatures. But 1t was said that this was not a satisfactory means of persuading sufficient numbers to sign a petition as would be the presence of those directly interested in a particular proposal. I turn to the relevant legislation. As previously said the application is brought pursuant to ss.140 and 141 of the Act. Sub-section 140(1), so far as it is relevant, provides: "(1) The rules of an organization - (a) shall not be contrary to, or fail to make a provision required by, a provision of this Act, the regulations or an award or otherwise be contrary to a law; eee eve (c) shall not 1mpose upon applicants for member~ ship, or members, of the organization, conditions, obligations or restrictions which, having regard to the objects of this Act and the purvoses of the registration of organizations under this Act, are oppressive, unreasonable or ungust; " - iS. Sub-section 140(2) provides that a member of an organisation may apply to the Court for an order under the section in respect of the organisation. The Court has gurisdiction to near such an application (sub-section 140(5E)). Sub-section 140(5D)} provides that an order under the section may declare that the whole or a part of a rule of an organisation contravenes sub-section (1) or that the rules of an organisation contravene that sub- section in a specified respect. Where an order under the section declares that the whole or part of a rule contra- venes sub-section (1), the rule or that part of the rule, as the case may be, shall be deemed to te void from the date of the order. Sub-section 140(7) is as follows: "(7) (a) (b) Where ~ the Court mekes a declaration under this section in relation to the rules of an organization; and at the expiration of three months from the date of the declaration, the rules of the organization have not been amended in a manner which, 1n the opinion of the Industrial Registrar, brings them into conformity with the requirements of sub-section (1) as regards the matters that gave rise to the declaration, the Industrial Registrar shall, after inviting the organization to consult with him on the matter, determine such alterations of the rules as will, in his opinion, bring tnem into conformity with those requirements as regards those matters." 20. Sub-section 140(6) empowers the Court to adjourn proceedings for the purpose of giving an organisation an opportunity to alter its rules. _. Section 141, in sub-sections (1), (1G) and (1H), confers upon the Court jurisdiction to hear and determine an application by a member for an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules. Sub-section 141(4) provides that a person shall not fail to comply with any such direction. A penalty 1s provided for a breach. The consequences of orders made under the two sections are not the same. This was a matter discussed in Cook v. Crawford (1982) 43 A.L.R. 83; see particularly pp.148-154, In the circumstances it is umnecessary to repeat the dis- cussion tnat there occurs. It should be understood, however, that I have had it in mind for the purposes of the decision in the present case. Apart from ss.140 and 141, it is necessary to refer to s.188 and to certain regulations. Section 168, so far as it 1s relevant, provides as follows: "(1) An organization - (c) shall not take, or threaten to take, any action having the effect, directly or indirectly of prejudicing a person in his employment with the intent to coerce the person to join in industrial action; al. eens AER EN Stet TEE ANS Ea Se RY RE aL oe AP eB t fi t "(d) shall not impose, or threaten to impose, a penalty, forfeiture or disability of any kind upon a member of the organization with the intent to coerce the,member to goin in industrial action; (e) shall not impose or threaten to impose, a penalty, forfeiture or disability of any kind upon a member of the organization by reason of the circumstance that the member has refused or failed to join in industrial action," Sub-section 188(2) provides that a contravention of sub-section (1) 1s an offence against that sub-section punishable upon conviction. The penelty is provided for in the sub-section. The relevant provisions of the Regulations are sub-~ paragraphs (iii) and (v) of paragraph (d) of sub-regulation 115(1). The two sub-paragraphs are as follows: "(1) The followzng conditions are prescribed conditions to be complied with by an association applying for registration, namely:- ene coe (d) the affairs of the association shall be regulated by rules specifying the industry in or in connexion with which the association 1s formed, the purposes for which it is formed and the conditions of eligibility for membership thereof and providing, in relation to the associetion, for - (iii) the manner of summoning meetings of members and of the committees; eee eee (v) the control of committees of the association and its branches by the members of the association and the members of the brancnes, respectively;...' 22, These provisions should be read in conjunction with paragraph 140(1)(a) of the Act earlier set out. It 1s now convenient to deal with the submissions of the parties concerning the various orders sought by the applicant and my conclusions thereon. I deal first with orders 1 to 3 sought in the rule nisi. These are all related to the cnarge purported to be brought egainst tne applicant py Mr, Jacobs or Mr. Smith or both depend- ing upon how the matter is viewed. Counsel for the Association did not seek to uphold the validity of the charge. He conceded, rightly in my opinion, that the procedure adopted was bad because, on its face, Mr. Smith's letter of 18 March, 1981, earlier set out purported to be itself a charge. Mr. Smith gave evidence to the effect that when he sent the applicant his letter of 18 March, 1981, he did not antend to do otherwise than to notify the applicant of Mr. Jacobs' charge. However, as counsel for the Association conceded, a fair reading of the letter would suggest that it was intended itself to be a charge. For the procedure to be regular Mr. Smith should have notified the applicant of the charge made by Mr. Jacots in his letter of 12 March, 1981, also previously set out. 23. Thus there has been a failure to follow out the provisions of sub-rule 21(a)(supra). Furtnermore, tne charge purported to be laid in Mr. Smith's letter made no reference to the Rule of whic¢h the applicant was said to be in breach nor to the gravamen of the charge wnich was "advocating disobedience of a lawful decision of Feceral Council". Notwithstanding tne concession which he made, counsel for the Association submitted that I should not make order 1 because the matter was now hypothetical. Evidence was Ziven from which I am prepared to infer that Mr. Jacobs does not intend to pursue the matter, Nor does Mr. Smith nor any other memo:r of the Council. But as earlier stated there are over 1,700 members of the Association. It would be open to any one of them to charge the applicant with the same breach of the rules as that relied upon by Mr. Jacobs, Moreover, the evidence discloses that members of the Ccuncil take the view that the charge laid against the applicant and the fine 1m' osead as a result thereof were invalid only for what may be described as technical reasons. I do not go to the detail of the evidence in this regard. It is enough to refer to the proceedings of a meeting of the Association 24, held on 22 June, 1981. There reference was made to the applicant's case and to the interim order which was earlier made in these proceedings. Mr. Smith is recorded as advising the meeting that "the interim order was a technicality only and does not set precedent for future discipine of F.S.A.A. members". That this was Mr. Smith's view of the proceedings and of the reason wny the charge failed is clear, in my opinion, from the answers to certain questions put to him by myself but to which I do not find 1t necessary further to refer. For the above reasons I am satisfied tnat I ought to make order 1 as asked. Furthermore, I am satis- fied that I should deal with two matters of substance in relation to the charge rel1ed upon by counsel for the applicant, These are: 1. The charge, even if properly notified to the applicant, was invalid because nothing that the applicant said in his telegram constituted his advocating or supporting disobedience by members to a lawful decision of the Association. 2. The charge, even 1f properly notified to the applicant, was invalid because the relevant decision was required by the rule to be a lawful decision, It was unlawful because 1t was in breach of one or more of the provisions of s.188 of the Act earlier set out and of the general law. .- I am of opinion that the first of these submissions 1s correct. The allegation that there was a breach of the rules is based entirely upon what was said by the applicant in nis telegram, namely, "I will be offering my services to Qantas fortnwith". This was a decision made by the applicant himself in relation to his own conduct. It in no way advocated (the charge was limited to "advoc- ating" - it did not allege "supporting") disobedience to any decision made by or on behalf of the Association, Both "advocating" and "supporting", in my opinion, involve concepts which contemplate acticn designed to involve other members 1n disobeying a decision. Certainly that is so in relation to "advocating". The applicant's conduct in using the words he did in his telegram cannot reasonably be interpreted as an exnortation or an attempt to persuade otners to goin with him in offering his services to his employer. I am also of opinion that the second submission should succeed, Its basis 18 the use in the rule of the word "lawful". The decision must be a lawful one. I should say in passing that even if the word "lawful" had not been 26. used, I would have suvplied it. One would not read a rule such as this as applying to decisions other than lawful ones. In my opinion the decision was unlawful because it was in breach of each of the provisions of paragraphs (c), (d) and (e) of sub- section 188(1) of the Act earlier set out. Particularly do I think that the decision was in breach of the section because of the previsions of paragraph (e); cf. the Judgment of Ellicott J. in Squires v. Flight Stewards ssociation of Australia (19 August, 1982, unreportea, at p.19). Those being my views,I do not find it necessary to express an opinion on the applicant's alternative sub- missions based on a breach of the general law. But I refer in passing to Lumley v. Gye (1853) 2 E. & B.216. It was submitted by counsel for the Associétion tnat I ought not to uphold either submission because there was no evidence, or no satisfactory evidence, of tne decision relied upon, The resolution passed at the stop work meeting held on 18 February, 1981, and earlier set out could not have been the decision tecause the decision relied upon was a decision of the Council. It 1s true thet there is no direct evidence of any such 27. decision. But the Council proceeded with the hearing of the charge upon the basis that there was such a decision. It found the charge proved. If there were no such decision the Association could have led evidence of that fact. in the circumstances I should infer that there was such a decision. It follows that the charge was invalid, not only for procedural reasons but also for reasons of sub-+ stance. Accordingly I should make order 1 as asked for both procedural and substantive reasons. There was no opposition to the making of order 2, but 1t was said that it would be appropriate to omit the words appearing after the words "rules of tne said organ- isation", This course was agreed in by both counsel and, accoraingly, the order should be made without the inclusion of those words. Order 3 was also consented to but with some amend~ ments, The words "as of the date of this order" are to be added after the words "the said organisation" in order 3(a). For the word "describing" in order 3(b) the word "treating", as I have mentioned, is to be substituted. Additionally the word "has" is to be substituted for the word "had" which appears twice in the order. Finally, the words "or should be" in the second last line are to be omitted. It 1s next convenient to deal together with the orders claimed 1n paragraphs 4 and 5 of the rule nisi These question the validity of tne purported amendments made to Rules 9(b) and 1l1(c). Counsel for the Association dealt with order 4 upon the assumption that it did not so much question the validity of the purported resolutions which were passed but tne accuracy of a statutory declaration,made by Mr. Smith as Secretary,for tne purvose of obtaining a certificate from tne Industrial kegistrar pursuant to sub-section 139(4) of the Act. Counsel for the applicant cid not in his reply dispute that limited view of what order 4 was intended to achieve. Nevertheless I find difficulty in confining the claims made in order 4 in this way. I prefer to deal with the submissions as 1f, in relation to both orders, there 1s a chellenge to the substance of wnat was purported to be done, I should mention that, because of his view of order 4, counsel for the Association said that he con- sented to its being made. Because of what I have said above, Ii do not propose to accept his concession. The applicant's first argument related to the purported amendment of Rule 9(b) and was based upon the fact that the proposal for amendment sent by telegram 29. to the members of Council was a proposal for an amend- ment by which the words "or an amount to be fixed from time to time" be inserted after the words "one hundred and four Dollars ($104) per annum", It will be recalled that one of the members of Council said that he would agree with the proposal provided the words "by Federal Council" were added after the words "from time to time", That 1s tne form in which the amendment was declared to have been passed at the meeting of Council held on 7 April, 1981. Mr. Smith in the statutory declaration he made for the purposes of s.139 of the Act said that the amendment did include the words "by Federal Council", Although a fair reading of tne rule without these words would, in my opinion, lead to the conclusion that any fixation would have to be by the Association or by the Council on its behalf, I am of opinion that Mr. Smith's declaration does not correctly record the amendment which was made. More importantly, the meeting of Council which purported to declare the amendment passed did not accurately state the terms of the amendment. Whether what has been done can validly or usefully be now corrected are matters I leave aside for the moment. No argument was addressed in relation to them. 30. I turn to the attack which was made in relation to the amendment purported to be made to Rule l(c). It was based upon the failure to give a notice of motion pursuant to Rule 32(b) of the Rules earlier set out. I have already recorded a finding that tthe letter written by Mr. Herbert and dated 6 April, 1981, was not a notice of motion for this purpose. Accord- ingly the procedure provided for in the Rules for amendment thereof has not been followed. Thus 1t is my opinion that neither purported amend- ment nas been validly made. Eut this does not gainsay, as I have earlier indicated, that there may not have been, subject to other arguments which arise for con- sideration, a valid amendment of Rule 9(p) which omits express reference to fixation of fees by the Council. There 1s, however, a difficulty. The amendments have not been certified pursuant to suco~section 139(4) of the Act. in this regard I refer to the goint gudgment of Evatt and Northrop JJ. in Boland v. Munro (1980) 48 F.L.R. 66 at pp.68-69. This was not a matter fully discussed in argument. I do not propose 31. to make final orders in this matter at the time these reasons are published. Rather, I propose to give counsel an opportunity of considering what I have said and then to bring in short minutes of order to give effect to my decision. When this occurs I will require further argument concerning the operation of s.139 of the Act and the effect of the decision in Boland v. Munro. Two further matters need to be mentioned in relation to orders 4 and 5. It was common ground that there was no room for any argument based upon tne requirements of the rules as to the procedures to be followed for the amendment thereof being directory rather than mandatory. Tne rules are concerned with the amendment of the constitution of tne Association and must be strictly followed; cf. Roots v. Mutton (1978) 32 F.L.R. 15 at p.19 and Morris v. Federated Liguor and Allied Industries Employees Union of Australia (1978) 35 F.L.R. 60 at p.64. Secondly it was submitted on behalf of the applicant that there was a fundamental reason why the amendment to Rule 9(b) was invalid. The submission was based upon the resolution passed at the compulsory meeting of the Association held on 16 March, 1981. It 1s to be 32. ——— A TY in ME AMARA D RAEN TE CAERLEON A JIT a PN BP IEE AR ESL ONT TIT = I EN recalled that that resolution purvorted to authorise the Council to collect an additional 4104 per member for one year to cover wages lost and additional expenses incrred as a result of the dispute. It was said that the Council, in purporting to alter Rule 9 dealing with membership fees, was not carrying out the instructions of the meeting of the Association which would have involved the amendment of Rule 10 dealing with levies rather than Rule 9 dealing with membership fees. I reject the submission because, so it seems to me, the matter was one for the Council. It was not obliged to follow the procedure contemplated by the meeting held on 16 Merch, 1981. It had power itself to amend the rules and it was not obliged to follow out the method of raising the money which the meeting thought appropriate. What I have said is subgect to certain further matters which need to be considered. But these arise in relation to the claim made by the applicant for orders under paragraph 10 rather than under paragraph 5. My conclusion in relation to orders 4 and 5 is that I may be prepared to make the orders, but that depends upon the argument yet to be presented in relation to 33. ra s.139 and Boland v. Munro (supra). As earlier mentioned the applicant did not press his claim for an order in terms of paragraph 5(c) of the rule nisi. Orders 6 and 7 were not pressed. Order 8 can be disposed of shortly. It 1s based on the provisions of sub-paragraoh (1ii) of paragraph (d? of sub-regulatzon 115(1) earlier set out. It is submitted that Rule 15 of the Rules does not comply with the regulation in that 1t does not provide for the manner of summoning meetings of members. I think there 1s force in the submission and that the rule should be amended to comply with the regulation. My conclusion in this regard does not lead to any question of invalidity of any rule or relevant act of the Council. I would think the matter is best left for the Association to rectify. If I need to be formal about the matter I would be disposed to act pursuant to sub-section 140(6) of the Act earlier referred to. Order 9 in concerned with the question of whether certain of the Rules of the Association, namely Rules 12(B)(1), 15(d), 21 and 22, contravene sub-paragraph (v) of paragraph (d) of sub-regulation 115(1) upon the basis tnat the rules in question do not make provision for the 34. control of committees of the Association by its members. I do not think that tne rules in question do infringe the regulation and I would not be disposed to make order 9, Order 10 raises serious questions in relation to the validity of some of the rules because of the . operation of paragraph 140(1)(c) of the Act earlier set out. The most fundamental objection to the Rules of the Association is to be found, 1n my opinion, in Rule 15(d) which provides that decisions of general meetings of the Association shall not bind the Council. In my opinion this rule contravenes paragraph 140(1)(c). That provision refers to the objects of the Act the chief of which are set out in s.2. Paragraph (f) of that section specifies as one of the objects the encour- agement of the democratic control of organisations and the full participation by members in the affairs of an organisation. The rule in question, having regard to this object, is oppressive and unreasonable, I do not need to decide whether it 1s also ungust. Counsel for the Association sought to support the validity of the rule by reference to the plebiscite provision in Rule 22 and the special difficulty which 35. the Association had in calling general meetings of its members because of the absence at any given time of large numbers of members overseas or at their homes in various places not close to Sydney. In my opinzon the plebiscite provisions of Rule 22 do not overcome the problem, I would only repeat. what I ha@ to say about such provisions in Cook v. Crawford (supra) at p.147. The present case 1s stronger than Cook v. Crawford simply because tne rules of the organ- isation there in ouestion did not include any provision along the lines of Rule 15(d). Difficulties in the holding of meetings are not peculiar to this Association. The fact that difficulties exist provides no reason for taking from the membership the ultimate power to control the Association's affairs. And the existing rules provide a means whereby difficulties may be partially overcome. Rule 15(f) provides for the holding of general meetings in series. The votes of members at the series of meetings are to be counted "over all such meetings to decide the result of" a proposal. The next rule which was called into question was Rule 32(a) which purported to import into the procedure whereby rules might be amended, the provisions for a tele-~ graphic vote contained in Rule 12(A)(g). I have already referred to the importance of provisions relating to rule amendments. It seems to me to be vital that any amendment of the rules 1s carried out after due notice, proper discussion and adequate consideration. In the case of the amendment to Rule 9(b) a misunder- standing occurred because of the absence from the proposal of the reference to the Council in relation to the fixing of the fees, Subgect to that matter 12 of the Coune11 of 17 signified their approval. Three were nov heard from and two were against the proposal. None had the benefit of the views of any other in relation to the proposal. Importantly, none of those who voted in favour of it was able to hear the views of the minority. I think it quite undesirable that amendments to the rules should be able to be mage in this way. Again I think the provisions of paragraph 140(1)(c) of the Act are contravened. I would, however, go further. In my opinion it 1s quite undesirable that amendments to rules be made otherwise than by reference to the membership of an organisation, I say what I nave conscious of the situation which existed in Cook v. Crawford (supra) but there, at least, the rules originally provided that there 37. Coors a yaa PONCE AE eS SO AR could not be an amendment unless it were proposed by the membership of one of the branches of the organisation. Here there are no branches. Each case must depend upon its own facts and circumstances. In Cook v. Crawford I said (supra at p.147): "The Act speaks of the encouragement, not only of democratic control, but also of full participation by members in the affairs of an organization. Its use of the word 'encourage' does not suggest that any absolute standard is to be applied. Rather it is concerned to see tne progressive attainment of the objects which it mentions." In my opinion the circumstances in this case reauire direct participation by the membership in relation to the amendment of rules, I should next mention Rule 22, that 1s the plebiscite provision. It was submitted that the percentage required before members could have a question submitted to a ballot was too high. Approximately 180 signatures were required. Reliance was placed upon the fact that there were rarely as many members as this at the Sydney airport on any given day. I have given this matter anxious consideration. I do not think one should lightly substitute for the considered views of those who propounded the rule a lower percentage. However, I have reached the conclusion that the requirement 38. ROM ent reas, more laprgeet oy wen So eT ete a tte o. Se EE ae eee SE ESS EF ee a a ee es SL wet ee that there be a petition signed by 10 ver cent of the members 1S oppressive. Subject to any further argument I would think the percentage should be reduced to five per cent. There were some other rules which were said to be in contravention of the Act but I do not feel 1t useful to mention them. The more fundamental matters have been dealt with in what I have said above. I would hope that the rules can be amended by the Council voluntarily to give effect to the spirit of the criticism I have made which I hope will be regardea as constructive. I would much prefer there to be a consensus about the matter than for the need to arise for the Court to have to make actual orders wnether under s.140 or s.141 of the Act. As matters stand the procedure to be followea for any amendment will need to te that provided for in Rule 32. I state it as my firm opinion that the provisions of Rule 32(b) are those which should be followed. Rule 32(a) should not be used, Moreover, I make it clear that the notice of motion which is required by Rule 32(b) is one which should pe actually notified to each member of Council prior to the meeting so that each member will nave a proper opportunity of considering what is proposed. 39. I do not propose to make any formal orders at this stage. The matter will be stood over to enable counsel and the parties to corsider what I have said. I shall remain available to hear any further argument that may be necessary, to enter anto discussion with the parties or their legal representatives concerning the procedure which should now be followed and to make such formal orders in the matter as may ultimately be necessary. i certify that this and the 39 preceding pages are a true copy of the reasons for judgment herein of The Honourable Mr Justice Sheppard. S do tc ssociate Dated I+ Fabra L143 40, : IN THE FEDERAL COURT OF AUSTRALTA) VICTORIA DISTRICT REGISTRY INDUSTRIAL DIVISION ww a pa 5° fe} my FE ws : IN THE MATTOR of the Coneilretien and Arbitration Act, 1904 oe rats AND IN THE MATTER OF _ "mont applications under Section i140 1 gat te and 141 of the said Act BETWEEN i RICHARD JAMES SQUIRES . Pe ae ie ; Applicant AND KEITH STEPH=NSON , GLE? PETLR JACOSS, ThARDEN REWS GERBERT, SaVID Bah LEW JACKSON DAVID TLOMSS CHARLIE LUCAS, Gata?' 10. PAUL MURPHY, if CHRISTOPHER TREGEAGLE. MALCOLM MILLER, JON 3 a TREVOR VILAINS, DAV UY JOTES AND FLIGHT STEWARDS ASSOCTATION OF AUSTRALIA Respondents RULE TO SHOW CAUSE JUDGE MAKING ORDER: 'The Howouceble Ma Susie Northace DATE OR ORDER - & Mar \AG\ WHERE MADE © MNalleouene IT IS HEREBY ORDERED that KEITH STEPHENSON, GIN HOLLAND, PETER JACOBS, WARREN SiHITH, RCNE HERBURT, DAVID BARWICK, Liv JACKSON, DAVID LOMAS, CHARLIE LUCAS, GARRY MOPRIS, PSUL iURPHY, MICHAEL SHELCHAN, CHRISTOPHER TREGEAGLE, TONY BAXER, MALCCLY MILLER, JON JENKINS, TREVOR WILKINS, DAVEY JONES and FLIGHT STEWARDS' ASSOCIATIOIU OF AUSTRALIA anpear before the Federal Court of Australia, Industrial Division at MWeblbeurne in the State of Victoria on Fava the Sih day of Jane , 198i at \G \%, o'clock in the forenoon, to show cause why the following Orders should not be made. -2- 1. THAT the respondents and each of them (other than FLIGHT STEWARDS' ASSOCIATION OF AUSTRALTA)perform or observe the rules of the said organisation by treating as null and void and of no legal effect the charge against the Applicant purportedly laid in accordance with Rule 21 of the rules of the said organisation referred to in a letter to the Applicant dated the eighteenth day of March 1981 signed on behalf of the respondents by the respondent Smith, 2. THAT the respondents and each of them (other than FLIGHT STEWARDS' ASSOCIATIOI OF AUSTRALTA) perform or observe the rules of the said organisation by treating as null and void and of no legal effect so much of the proceedings of the meetings of the Federal Council of the said organisation held on the -:sixteenth day of March and the seventh, twenty-first and thirtieth days of April 1981 as purported to deal with the charge against the Applicant purportedly laid in accordance with Rule 21 of the rules of the said organisation referred to in a letter to the Applicanz dated the eighteenth day of March 1981 signed on behalf of the respondents by the respondent Smith; 3. THAT the respondents and each of them (other than FLIGHT STEWARDS' ASSOCIATION OF AUSTRALIA) perform or observe the rules of the said organisation by (a) Treating and describing the Applicant for all purposes of the rules as a financial member of the said organisation, (b) Refraining from describing the Applicant as a person who had resigned from membership or been suspended or expelled from membersnip in the said organisation or who had been or should be disciplined by Federal Council of the said organisation. 4 THAT the respondents and each of them (other than FLIGHT STEWARDS' ASSOCIATION OF AUSTRALIA perform or observe the rules of the said organisation by treating as null and void and of no -/3 -3- legal effect the purported alteration to Rules 9(b) and 11(c) referred to in the statutory declarations dated the ninth and twenty-seventh days of April 1981 declared on behalf of the respondents by the respondent Smith; 5. THAT the respondents and each of them (other than FLIGHT STEWARDS ASSOCIATION OF AUSTRALIA) perform or observe the rules of the said organisation by treating as null and void and of no legal effect any resolution of the Federal Council of the organisation (a) purportedly increasing the contributions payable by members of the said organisation to any Figure exceeding the amount prescribed in sub-rule (b) of Rule Q. (b) purportedly imposing a levy on members of the said organisation exceeding the amount prescribed in Rule 10, (c) purportedly altering Rules 9(b) and 11l(c) so as to confer upon Federal Council the power to fix contributions payable by members of the said organisation without limit as to amount. 6. THAT the respondents and each of them (other than FLIGHT STEWARDS' ASSOCIATION OF AUSTRALIA)perform or observe the rules of the said organisation by treating as nuil and void and of no legal effect the resolution of a meeting of Federal Council of the said organisation held on Tuesday the third day of Tebruary 1981 as follows. "Moved: Sheehan Seconded: Miller "THAT in view of the present serious industrial situation this Association will offer administrative assistance to any members of the Overseas Branch of the A.H.A. who decides she cannot support any policy decisions which may be made by her Association contrary to the pursuits of the F.S.AA in this industrial situation. An administrative fee of 50 cents will be charged to each Hostess" "Carried". ~-4- 7. THAT the respondents and each of them (other than FLIGHT STEWARDS ASSOCIATION OF AUSTRALIA)perform or observe the rules of the said organisation by refraining from offering administ- rative assistance to members or persons eligible for membership in The Airline Hostesses' Association and otherwise interfering in the administration of the said The Airline Hostesses' Association. 8. THAT the rules of Flight Stewards! Association of Australia contravene section 140(1)(a) of the Conciliation and Arbitration Act 1904 in that they fail, and in particular Rule 15. Meetings fails, to make a provision required by the Act and by the Regulations made pursuant thereto, narely provision for the mannez of summoning meetings of members being a provision required by the Act and by Regulation 115 (1) (d) (iii) made pursuant thereto 9. THAT the rules of Flight Stewards' Association of Ausrralia contravene section 140(1)(a) of the Conciliation and Arbitration Act 1904 in that they fail, and in particular Rules 12¢B) (i), Rule 15(d), Rule 21. Discipline of Members and Rule 22. The Ballot fail, to make a provision required by the Act and by the Regul- ation made pursuant thereto, namely provision for the control of committees of the organisation by the members of the organisation being a provision required by the Act and by Regulation 115(1) (a) (v) made pursuant thereto. 10. THAT the rules of Flight Stewards' Association of Australia contravene section 140 (1)(c) of the Conciliation and Arbitration Act, 1904 in that they impose upon applicants for membership and members of the said organisation conditions obligations and restrictions which having regard to the objects of the Act and the purposes of the registration of organisations under the Act are oppressive unreasonable or unjust in that the said rules: (i) empower Federal Council to alter the rules of the organisation by telegraphic vote of a minority of members of the Federal Council (Rule 12(g)), (ii) empower Federal Council to alter the rules of the ~ wi , Trt DATED this #& day of May, 1981. organisation at any meeting of Council without przor notice to any members of Federal Council not present ect such meeting and without notice to the members of the organisation (Rule 32 (b)); (iii)empower Federal Council to declare attendance at any general meeting as compulsory for all members without notice to the members of the business to be transacted at such general meeting and without provision that the decisions of General Meetings shall bind the Council (Rule 15(d) and (e)): (iv) (if, contrary to the Applicant's submission, Rules 9(b) and 1ll(c) have been validly altered prior to the making of the Rule to Show Cause herein) empower Federal Council to fix and alter the contributions payable bv members of the organisation without limit as to amount -(Rules 9(b) and 1l(c)). UPON THE GROUNDS set forth in the affidavit of Richard Jenes Squires sworn the S({\D day of Mav 1981 and filed herein. - od DEPUTY INDUSTRIAL LDisTRie REGISTRAR TAKE NOTICE that on the hearing of this matter the Applicant intends to call oral evidence. ry ns - VICTORIA DISTRICT REGISTRY ' INDUSTRIAL DIVISTON Vv. No. of 19S IN THE MATTER of the Concilzacizon and Arbitration Act, 1904 AND IN THE MATTER of appricacions under section 140 and 141 of t Act BETWEEN. RICHARD JAMES SQUIRES Applicanz AND - KEITH STEPEENSON, CLEN HF! PETER JACOBS WARREN HEREROL Lay "ID Fen: DaVidD LuUt'as, MORKKIS Pabh : CHRSSTCrHER MALCOL* 2i1b cs WILKINS. DAVEY J0 STEWARDS" ASSOU LATION OF AUS? ALTA Responaents RULE TO SHOW CAUSE Filed by A.J, MACKEN Barrister & Solicztor, 43 The Boulevard, NORTH BALIYH VIC 3104 Tel. 859 $332