b " edt. o& "7 CATCHWORDS Industrial law - conciliation and arbitration - power to approve a scheme to enable a collective body to function effectively - nature of jurisdiction and power conferred - matters contained in scheme - whether officer of branch may be authorised to take action to fill offices - whether deeming provisions may be approved. Conciliation & Arbitration Act 1904 s.171D THE APPLICATION OF PATRICK GALLAGHER for an order pursuant to Section 171D of the Conciliation and Arbitration Act 1904 in respect of THE FEDERATED COLD STORAGE & MEAT PRESERVING EMPLOYEES UNION OF AUSTRALIA V. NO. 44 OF 1983 Smithers, Northrop & Keely JJ. 21 October 1983 Melbourne. IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) V No. 44 of 1982 ) ) INDUSTRIAL DIVISION THE APPLICATION of PATRICK GALLAGHER for an order pursuant to Section 171D of the Conciliation and Arbitration Act 1904 in respect of THE FEDERATED COLD STORAGE & MEAT PRESERVING EMPLOYEES UNION ee ee ane en ee ee Nae ee ane ee en ee Oe ee CO as OF AUSTRALASTA Judges Making Order: Smithers, Northrop & Keely Ju. Date of Order: 21 October 1983 Where Made: Melbourne ORDER 1. The Court declares that collective bodies of the Federated Cold Storage & Meat Preserving Employees Union of Australasia (hereinafter referred to as "the Organization"), namely the Federal Council, Federal Executive and Federal Committee of Management, have ceased to exist or to function effectively and there are no effective means under the Rules of the Organization by which those collective bodies can be reconstituted or enabled to function effectively. we eee eee os - --— --- = e ee - - wo wee RN et ta et eet oe eee ene Pe cl ha eee Le eee ate a A ee we a Pm Nh AL ml TU a ee ad The Court declares that offices or positions in the Organization are vacant, namely the offices of Federal President, Federal Vice-President, General Secretary, Federal Treasurer and all positions on the Federal Council, Federal Executive and Federal Committee of Management and there are no effective means under the Rules of the Organization to fill those offices or positions. Having satisfied itself that this Order will not do substantial injustice to the Organization or to any member of the Organization, the Court orders that the following Scheme for the reconstitution of the said collective bodies and for the filling of the said offices and positions be approved, namely: (a) Within twenty-one days after the date hereof, Applicant on behalf of the Committee of Management of the Organization, in writing, request the Industrial Registrar that elections be conducted to fill the following offices or positions in the Organization, namely Federal President, Federal Vice-President, Federal Treasurer, General Secretary, Assistant Secretary, Organizer and Federal Councillors and such offices and positions ee ee ce ce tte ee teen nt To AR RS lS en a NR elle en ee My a a Mt Os Le (b) (c) be deemed to be offices and positions in the Organization for the purpose of section 170 of the Conciliation and Arbitration Act 1904. (i) (ii) ( ) One person be elected by all of the financial members of the Organization to fill each of the offices or positions of Federal President, Federal Vice-President, Federal Treasurer, General Secretary, Assistant Secretary and Organizer and the persons so elected be the officers of the Organization; Any financial member of the Organization who has been a member of the Organization for not less than one year be eligible to be nominated for any of the offices or positions referred to in sub-paragraph (i) hereof by any two other financial members of the Organization; The number of Federal Councillors to be elected be determined by the person who acts as Returning Officer for the purposes of the elections on the basis that each division of the Organization be entitled to elect two Federal Councillors, plus additional Federal Councillors according to the number of wet ee a eee SA ek em ls ae en ae ee ne beta ee ee ae (ii) ib members within the division on the following basis:- No. of Members No. of Additional Federal Councillors 750 - 1000 1 1001 - 1500 2 1501 - 2000 3 2001 - 2500 4 2501 - 3000 5. For the purposes of the election the Organization be divided into divisions on the following basis: All members who are employed or were last employed within the State of Victoria in the area covered by the Australian Telecommunications Commission's Area Codes numbered 050, 054, O58, O57 and 060 constitute the northern Victorian Division; All members who are employed or were last employed within the State of Victoria in the area covered by the Australian Telecommunications Commission's Area Codes ee ee et et ate ane (iii) (iv) ut numbered 659, O56, O51 and 0648 constitute the south-eastern Victorian Division; All members who are employed or were last employed within the State of Victoria in the area covered by the Australian Telecommunications Commission's Area Codes numbered 053, 055 and 052 constitute the south-western Victorian Division; All members who are employed or were last employed within the State of Victoria within the area covered by the Australian Telecommunications Commission's Area Code numbered 03 constitute the metropolitan Victorian Division; All members who are employed or were last employed within the State of South Australia constitute the South Australian Division. Federal Councillors be elected by all of the financial members of the Organization in each Division. Any financial member of the Organization who is employed or was last employed within a (a) (i) particular Division be eligible to he nominated for the office or position of Federal Councillor representing that Division by any two other financial members of the Organization who are employed or were last employed in that Division. (v) For the purpose of ascertaining the number of Federal Councillors to be elected from any division, the person who acts as Returning Officer to conduct the said elections ascertain the numbers of members who are employed or were last employed within each Division as at the date hereof. For the purposes of paragraphs (b) and (c) hereof, any member of the Organization who is a financial member of the Federated Cold Storage & Meat Preserving Employees' Union of Australasia South Australian Branch, a registered Association pursuant to the Industrial Conciliation and Arbitration Act 1972-1982 of South Australia be @eemed to be a financial member of the Organization. For the purposes of applying sub-paragraph (1) hereof the returning officer shall be entitled to rely upon the certificate of the secretary of the eee Re ek ee en eal (e) (£) (g) said Association that a person named in the certificate is a financial member of the said Association. The elections be conducted in accordance with Part VAA of the Conciliation and Arbitration Regulations and the date for the closing of nominations be the 31st day of January 1984. (i) On the completion of the elections the persons declared elected be the Officers and Federal Councillors respectively of the Organization. (ii) On the completion of the elections the Officers and Federal Councillors declared elected be and constitute the Federal Committee of Management of the Organization. The Federal Committee of Management of the Organization so elected: (i) Shall meet as soon as practicable after the declaration of the said elections and thereafter shall meet not less than once in ee ee ee ee oe ee - oe - - = = wee ene = come wee mee ee eee ete eee tee ree wee (ii) (iii) (iv) each year and a quorum thereof shall be a majority of the Officers and Federal Councillors; Shall have power to elect by secret ballot at its first meeting from among the Federal Councillors ten persons who, together with the Officers shall constitute a Federal Executive which shall meet not less than once in each three months and a quorum of which shall constitute a majority of the Officers and members thereof; Shall have power to elect by secret ballot at its first meeting from among the Federal Councillors three persons who, together with the Officers, shall constitute the Finance Committee of the Organization which shall meet not less than once in each three months and a quorum of which shall be a majority of the Officers and members thereof; Shall have power to delegate any of its powers and functions (except for the power to make and amend Rules) to the Federal Executive or the Finance Committee so constituted; me ee ee oe (h) (i) (v) Shall have the supreme power of the Organization, including the power to do all acts and to make all decisions necessary for the proper conduct of the Organization; (vi) Shall have the power to make and amend Rules ef the Organization. All meetings required by paragraph (g) hereof shall be called by the Generali Secretary or, in his absence, the Assistant Secretary, who shall advise all members of the Federal Committee of Management, the Federal Executive or the Finance Committee (as the case may be) of the time, date and place of such meetings. Rules of the Organization made by the Federal Committee of Management: (i) Shall provide for all things required by the Conciliation and Arbitration Act 1904 and the Conciliation and Arbitration Regulations; (ii) Shall provide that the first elections to be held pursuant to such Rules for all offices and positions shail be commenced no later er oerey) ee wa ke Nae eee eee vee Ue ee (3) (k) we ee mp en ee ee eee we 10. than two months after the certification by . the Industrial Registrar of such Rules; (iii) Shall be submitted to the Industrial Registrar pursuant to section 139(4) of the Conciliation and Arbitration Act 1904 on or before the 31st day of December 1983. Rules made by the Federal Committee of Management as aforesaid shall be deemed to have been made by the authorised rule making body of the Organization in accordance with the relevant procedures laid down by the Rules of the Organization. Upon election pursuant to such Rules of Officers, Federal Councillors, Federal Executive Members and Finance Committee Members, the persons elected pursuant to paragraphs (a), (b), (c), (da) and (e) hereof shall cease to hold the offices and positions therein referred to but all decisions made and all acts performed by them as officers, Federal Councillors, or as the Federal Committee of Management, Federal Executive and Finance Committee respectively of the Organization shall continue to have full force and effect unless and until rescinded or annulled pursuant to such Rules. dee ne ee ee ee EO are ae a ek ee ll. 4. The Court orders that liberty to apply be reserved to the Applicant upon giving not less than seven days' notice in writing to the Industrial Registrar. 5. The Court orders that the Application be adjourned to a Tree ee ees ne ee date to be fixed. eae Fee ne meee ett nds nee nen A Atl lt eer oe nm eee reo b INDUSTRIAL DIVISION IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V No. 44 of 1982 ee es er we IN THE MATTER of the Application of PATRICK GALLAGHER for an Order pursuant to Section 171D of the Conciliation and Arbitration Act 1904 in respect of THE FEDERATED COLD STORAGE AND MEAT PRESERVING EMPLOYEES UNION OF AUSTRALASTA Coram: Smithers, Northrop and Keely JJ. 21 October 1983 REASONS FOR JUDGMENT Smithers J.: This is an application pursuant to s.171D of the Conciliation & Arbitration Act 1904 (the Act), for the approval by the Court of a scheme for the taking of action by the applicant for the reconstitution of certain collective bodies of the Federated Cold Storage & Meat Preserving Employees Union of Australasia (the organization), an organization of employees registered under the Act, to enable those collective bodies to function effectively, and for the taking of action by the applicant for the filling of certain vacant offices in the organization. we ae ot tee ee ee a ee we eee ee tee fe The applicant is an officer of a branch of the organization but not an officer of the organization. The first question is whether an officer of a branch is eligible to be authorised to take action pursuant to a scheme for the reconstitution of a collective body of the organization. On a first reading of s.171D it is permissible to wonder whether it is contemplated that only an officer of the organization may be so authorised. However, on examination of s.171D(2) of the Act it is seen that an officer, not of a branch, but of the organization, may be authorised to take action for the reconstitution of a branch or part of a branch. This is a clear indication that the section is to be construed as contemplating that an officer of a branch may be authorised to take action under a scheme for the reconstruction of the collective body of the organization. The organization was registered in 1915. At present it has two branches the Victorian-Tasmanian branch and the South Australian Branch. The rules as they stood until 1940 contained provision for a Federal Council, a Federal Executive and a Committee of Management. In 1940 new rules were adopted and are still operative. Those rules : (a) refer to a Federal Council and purport to give it power to receive petitions from branches to amend rules. They provide for certain quarterly fees to i A ae tae ET cele ee eee ort eee ter ee ee eee on ane wa citeee 3. be paid to it by branches. But they contain no provisions for the election of a Federal Council or for its constitution. (b) purport to create what is called a Federal Executive of the organization; (c) purport to authorize the Federal Executive to appoint a Committee of Management of the organization. The rules provide that the Federal Executive is composed of not more than five members being delegates elected by the branches at the annual election for branch officers. But no delegates have been elected at least since 1947. The Committee of Management provided for in the Federal rules is a Committee to be appointed by the Federal Executive. It has not been appointed for many years, if ever. The rules of the Victorian- Tasmanian Branch provide for biennial elections but do not contain provision for the election of delegates to Federal Council or Federal Executive, nor do the rules of the South Australian Branch. It appears, also, that if authority for an election could be found in the rules there are practical considerations which render the South Australian Branch unable to provide eae eee we eee FR Sk ee ee et ee ea ee ee ce tenet" ete 4. delegates. Such persons as exercise authority in that Branch are persons elected in accordance with the rules of an association registered in South Australia under' the Industrial Conciliation & Arbitration Act 1972 of that State which differ from the current rules of the South Australian Branch of the organization. From the standpoint of practicality there is no executive body acting for the branch which is lakely to be activated to elect delegates to Federal Council or Executive. It is arguable that although the rules of the organization as now in force refer to a Federal Council and a Federal Executive each reference is to the same body. Even if that is so that body itself has been without delegates since 1947 and there are no provisions in the branch rules or elsewhere for the election of such delegates. The rules do not contain the provisions required by ss.133, 133A and 133AA of the Act. There is no Federal Council and there is no provision for the amendment of the rules of the organization by the Pederal Executive. It is apparent therefore, that the Federal Council has ceased to exist, that the Federal Executive has also ceased to exist, and that the Federal Management Committee does not exist. None of these collective bodies is able to function effectively in the affairs of the organization. It is apparent that there are no effective means under the rules of the organization by which any one of those bodies can be reconstituted or enabled a ee ee ee rh ene eR ed ttn ent te dat tl ee comm meee ¢ 5. to function effectively. It may be observed that the only relevant Federal Offices provided for in the rules are those of President, Vice President, General Secretary, Federal Treasurer, Federal Councillors of unspecified number and for whose election there is no provision and of Federal Executive members of an unascertained number and not in fact elected. In these circumstances the applicant has submitted a scheme the objective of which is to remedy the situation which obtains in relation to the collective bodies mentioned. It provides, (i) for the election of officers designated as follows - Federal President, Federal Vice-President, General Secretary, Assistant Secretary, Federal Treasurer, Organizer and Federal Councillors. (ii) for the holding of an election for these offices under s.170 of the Act; (iii) for the qualifications for voters, a method of appointing a Returning Officer and for the calculation by him of the number of Federal Councillors to be elected on a specified regional basis of representation. (iv) that the officers and Federal Councillors so rm - et A we eee (v) (vi) 6. elected shall constitute the Federal Committee of Management of the organization, that the Federal Committee of Management shall have the supreme power of government of the organization and power to make or amend the rules of the organization. that the Federal Committee of Management, may elect a Federal Executive of ten persons to meet in each three monthly period and may elect a Finance Committee of three persons. (vii) that rules may be made by the Federal Committee of Management providing for: (a) the abolition of the existing Victorian-Tasmanian Branch and the existing South Australian Branch; (b) the transfer of the funds of the Victoria-Tasmania Branch to a Federal fund to be controlled by the Finance Committee subject to the directions of the Federal Committee of Management; (c) other matters of administration. (viii) that "rules made by the Federal Committee of mk me RO ee rte Le e 7. Management ... shall he deemed to have been made by the authorized rule making body of the organization in accordance with the relevant procedures laid down by the rules of the organization." (ix) that the applicant "on behalf of the Committee of Management" request the Industrial Registrar to conduct an election under s.170 of the Act to fill the offices of Federal President, Federal Vice President, Federal Treasurer, General Secretary, Assistant Secretary, Organizer and Federal Councillors. (x) that such last mentioned offices and positions be deemed to be offices and positions in the organization for the purposes of s.170 of the Conciliation & Arbitration Act 1904. Section 171D(1) of the Act provides that a member of an organization may apply to the Court for a declaration that a part of the organization including a collective body of the organization has ceased to exist or function effectively and that there are no effective means under the rules of the organization by which it can be reconstituted or enabled to function effectively, or that an office or position in the organization is vacant and that there are no effective means Me ee Ree eee ene weet we me ree one a ee ee Ce rte repent eee oe ee . 8. 1 under the rules to fill the office or position, and that the Court has jurisdiction to make a declaration accordingly. Section 171D(2) provides that where the Court makes such a declaration it : "may by order approve a scheme for the taking of action by a collective body of the organization or of a branch of the organization or by an officer or officers of the organization or of a branch of the organization for the reconstitution of the .... collective body or to enable it to function effectively, or for the filling of that office or position." The jurisdiction conferred on the Court by s.171D is clearly intended to provide a method by which, in the specified circumstances, an organization may be provided with a reconstituted governing body effectively equipped to function as such. Clearly an approved scheme may authorize procedures such as the holding of elections which, when held, will operate to elect officers to collective bodies as effectively as would have been the case ha@ they been elected pursuant to valid rules of the organization. Indeed an authorized election pursuant to a scheme will validly elect persons to office although the holding of such an election was contrary to some existing rule of the organization. (See s.171D(5)) A scheme will inevitably be the product of constructive planning. It may be thought that the collective me ee ee re te RR RR et en A wo body which has ceased to exist was unrepresentative of the membership or the branches, that it was too small or too large, or that it could not function effectively because of express or implied limitations of 1ts authority. The current state of affairs within an organization may call for a collective body constituted differently in many respects from that of the body which has ceased to exist. To provide a body differently constituted from that of the defunct body would seem to fall within the concept of the reconstituting of the class of bodies referred to in s.171D(2) of the Act. In this exercise there may he created offices such as Federal Councillors or Executive or Management Committee members different and more or less numerous than were provided for in the original Council, Executive or Committee. It may be necessary to confer on the reconstituted body powers, or to institute procedures not held by, or applicable to, the body in its original form so that, as reconstituted, it may function effectively. Such reconstituted body, not being brought into existence or enlivened under the existing rules will draw its validity from the Court's approval of the scheme. Section 171D(5) is authority for the view, not only that the scheme as approved takes effect notwithstanding anything in the rules of the organization, but also that once the order approving a scheme is made that order takes effect unconditionally and immediately. It is for the Court, therefore, to satisfy itself as a en Dee Tar Se ene EERO OE Re ne = ae eee 8 10. to the appropriateness of a propnsed scheme from the point of view of the current structure of the organization, fairness and justice thereof as between members and branches, and the necessity for the organization to be equipped with effective governing bodies elected on a suitably democratic basis. The body coming into existence in its reconstituted form with the powers and procedures provided for it in the scheme will exercise the authority accorded to it by those existing rules which may still apply and by the scheme. It is apparent that so far as members of the organization are concerned the provisions of the scheme operate to the same extent that they would if they were provisions of validly adopted rules. The object of s.171D is to provide, within the limits of an appropriate scheme, for the internal relationship of members; their reciprocal rights and duties within the organization. The order approving the scheme, and taking effect, operates upon the organization and its members and binds the organization and the members according to its terms. So far as outsiders are concerned they may safely, and indeed must, deal with the organization on the basis that such powers, authorities, restrictions or procedures as are introduced by the scheme have full effect upon the relationship of members inter se, according to their terms. Considerable novelty may be appropriate in a scheme submitted under s.171D. It would seem that the Court should be guided not by any narrow interpretation of s.171D, but ree ee ek rete nen eet ee te re iil. should respond to the purpose of that section in the context of the Act and of Part IXA of the Act. Part IXA 1s headed "Validating provisions for Organizations". The objects of the Act are not in doubt. They are to encourage the organization of representative bodies of employers and employees and their registration under the Act and to equip them with effective representative governing bodies so that they may play a part in the national procedures of conciliation and arbitration of industrial disputes. Recognizing that in the management of such organizations according to their rules, complex situations arise and on occasion lead to complete frustration, Parliament enacted Part IXA. The provisions of that part are directed to the relief of organizations in situations in which the effect of rules has led to invalidity in various respects. The notion discernible is that, in such situations, subject to the overriding rule, that injustice shall be avoided, relief may be provided. Thus in s.171B it is provided that, in general, all acts done in good faith by a collective body of an organization or a branch thereof are to be valid notwithstanding that the election to office of the members thereof suffered from some invalidating defect. Section 171¢ provides in general that the Court may validate any act in the administration or management of an organization or branch where an invalidity has occurred in such administration or Pera De ene ere NE a ALN em etn of an tb RR en ee a ee ee 12. management or in an election. Section 171E provides that the Court may make remedial orders that persons be treated as members for a period although there is some defect in the acquisition of membership and that such orders shall take effect notwithstanding anything in the rules of the organization. Section 171F provides that after four years an act by a collective body, an election, or a purported alteration of rules shall be deemed to have been performed or carried out in compliance with the rules of the organization. In each case of course the provisions take effect subject to safeguards to prevent injustice to the organization or to a particular person. Section 171D is in the midst of the sections last mentioned and stems from the intention of Parliament to revive the effective management and administration of organizations when governing bodies have become defunct or impotent or are unable to function effectively because the rules fail to speak effectively in the relevant current circumstances. Its provisions should therefore be liberally construed. In the absence of more detailed limitation of the nature of the scheme which may be approved the contents of a scheme, within the ambit of the power to approve, must in my opinion extend to a scheme for the taking of steps which will reconstruct the defunct body by making that body again, giving it a new constitution appropriate for a body with the functions envisaged. And the scheme may contain those other cee - onary) f 13. provisions which will enable the body in its environment to function effectively for the purposes for which it is constituted. The provisions in a scheme must however represent a faithful pursuit of the purposes for which the power to approve such a scheme was conferred on the Court by Parliament. As Dixon J, as he then was, said in The King v. Burgess, ex parte Henry (1936) 53 CLR 609 at 674:- "It is apparent that the nature of the power necessitates a faithful pursuit of the purposes. ... No doubt the power includes the doing of anything reasonably incidental to the execution of the purpose. But wide departure from the purpose is not permissible." In assessing the purpose of the provision the remedial aspects must inevitably prevail, so that as a matter of interpretation, the emphasis is on the approval of a practical scheme rather than on the authorisation of a particular person to take action. In relation to the scheme sttbmitted in this case considerable effort has been expended to acquaint all members with its contents and the changes in the organization which it is thought will be implemented by the reconstituted collective body which will come into existence pursuant to the scheme. It is a possible view of s.171D that it does not authorise the Court to include in a scheme approved thereunder the introduction into the rules of the organization of any new rule. It would appear to me that such a view is too restrictive. To reconstitute a defunct body will in most circumstances necessitate a provision that the reconstituted body shall be a body having authority in the organization. If by the existing rules it has no such Fee Sine oat ane Ce SOR RR at UE = tke ee 14. authority it cannot function effectively. Similarly the existing rules may prescribe disabling conditions upon the operations of the defunct body which by their terms will apply to the reconstituted body and which for its effective functioning must be relaxed. In addition, as in this case there are certain provisions which by statute are required to be in the rules but which are not to be found therein. Until rules are made which will cure this defect the whole organization is in danger of deregistration. In such a situation the reconstituted body cannot function effectively. It is my view therefore that to the extent that the provision of new rules or the alteration of existing rules may fairly and reasonably be said to be a necessary step in the reconstitution of a defunct collective body and the enabling of it to function effectively the introduction of a new rule or rules into the constitutional structure of the organization is authorised by the section. And having regard to the considerations mentioned above the new rules proposed to be authorised in accordance with these reasons are in the appropriate sense fairly and reasonably necessary. In the light of the foregoing I turn to the particular provisions of the scheme which are set out above. The first provision raises the question of whether a scheme may provide for the election of offices not previously in er tee enn ee mee 15. existing according to the rules of the organization. In this case the offices of Federal Assistant Secretary or Organizer do not exist under the rules heretofore in force. Taking a broad view referred to above it would appear to me to be within the concept of reconstituting a Federal supreme governing body to equip it with an assistant Secretary as a member thereof. To include a person elected as organizer in the reconstituted Federal Council is to create in an indirect way an officer of that designation and with the duties of an organizer, as generally understood in industrial circles. The scheme does not define those duties. Section 171D contains nothing which expressly authorises the creation in a scheme, of new offices in the organization. Nevertheless taking the broad view I see no reason why an officer described as organizer is not a perfectly acceptable class of member of a Union governing body and likely to be well equipped to contribute to its deliberations. It ius clear that the Court has a discretion as to the composition of a reconstituted body, to be exercised by reference to the standard referred to above. Taking the view that prima facie a person designated and elected as organizer would be a suitable member of a governing bedy, I do not think that the circumstance that the incidental effect of the scheme would be to create a new office in the organization should be regarded as a barrier to that course. The office so created will be under full control of the new governing body which can define the duties of the person elected as organizer or ee ee 16. even abolish the office if it sees fit. In the exercise of the Court's discretion it is reasonable to take into account the applicant's desire in the matter especially as it has been widely published amongst the membership and has attracted no dissent. I would therefore approve the first provision. The second provision is obviously appropriate and should be approved. The third and fourth provisions raise no difficulties and should be approved. The fifth provision is, for reasons mentioned above, a necessary provision. Also, Reg.115(d)(XIV) provides that the organization shall be regulated by rules providing, in relation to the organization, for the alteration of its rules. As the rules as present stand they provide that the alteration of the rules of the organization may be accomplished on the petition of a branch of the organization. It would appear that unless some branch does so petition then the rules may not be altered. Rules which deprive the governing body of intitiative in the matter of alteration of rules seriously detract from the effective functioning of that body. Also I do not think such rules comply with Reg.115(d)(XIV). Certainly the proposed rule gives unfettered power to the reconstituted body to alter the rules of the organization. But it is to be remembered that rules mee ee wanes tn ee ee ne ee 'oo 17. made must be certified by the Industrial Registrar and may not be such as to affect the interests of members and branches in any way which contravenes the comprehensive requirements for their protection which are to be found in s.140(1). And it is to be observed that in this organization existing rules provide exceptionally ready access to a referendum, possibly by any two representatives on Federal Council pursuant to r.21, but certainly on the intitiative of any branch pursvant to r.24. With these provisions in mind the rule proposed in the fifth provision is a fair and reasonable provision to enable the reconstituted body to function effectively. It fits into an acceptable pattern where there is approriate Federal Council power to act under the kind of control envisaged by Reg.115(d)(v). The sixth provision may be regarded as an appropriate step for the reconstitution of the Federal Executive. The provision for the election of a finance committee of three persons may be regarded as a provision ancilliary to the supreme management function of the Federal Council or Committee of Management as according to the scheme it is to be called. The seventh provision does raise difficulties. By the fifth provision the Committee of Management has unfettered power to make and amend the rules of the organization. It is unnecessary to confer upon it authority mee eee ne et a ee i fl tenth a Nae fae deanna tet ne nny aan ee a 18. to make any particular rules. Should the Court approve the making of rules as specified in the seventh provision there is created the impression that the Court is of opinion that such rules are appropriate to the organization and ought to be made. But it is no part of the function of the Court to approve the making of any particular rules by an authority of the organization unless the making of such rules is directed to the reconstitution of a collective body or to enabling it to function effectively. In this case once the Committee of Management is elected and authorised to make and amend rules and it is seen that the eighth provision is part of the scheme, there is no more to be done to reconstitute the supreme governing body of the organization or to enable it to function effectively. Proposed items on the seventh provision are that the Federal Committee of Management should be equipped, by the scheme, to make rules providing: (i) for all things required by the Conciliation & Arbitration Act 1904 and the Conciliation & Arbitration Regulations; (ii) for the holding of the first elections held pursuant to the rules of the organization for all offices and positions shall be commenced no later than two months after the certification by the Industrial Registrar of such rules; anes tee wearers meee oe ee ee re ne ~ - — --- -- Pra a te ee ee en Oe A ot Be ah oS ee, net ee A ten ee ee 19. (iii) that the rules made by the Federal Committee of Management pursuant to the scheme approved by the Court shall be submitted to the Industrial Registrar pursuant to s.139(4) of the Act before 31 December 1983. These are appropriate and necessary provisions. Otherwise, however, it is my opinion that the seventh provision, is inappropriate to be included in a scheme approved under s.171D, is unnecessary to achieve the objective of the section, and its omission will cause no embarrassment to effective government by the Committee of Management. The eighth provision appears to me to be necessary to enable the Committee of Management to function effectively. It releases the Committee of Management from any fetters upon its rule making function which may lurk in the existing rules. As part of the scheme approved by the Court it binds the membership. So far as persons having business or other relations with the organization it enables them to know that, legally, rules made by the Committee of management are binding so far as the membership is concerned, and are for the purposes of the affairs of the organization, the authentic expression of the real will of the organization. I think it should form part of the scheme to be approved. The ninth provision is intended to clothe the 20. applicant with authority of tne organization to make the specified request to the Registrar under s.170(2). As such, apart from any other consideration, it is an approriate direction to be given in the scheme as a provision ancillary to the achievement of an election conducted under s.170 of the Act. Once part of the scheme 1t operates as a provision binding as between the applicant and the members and the organization,. Incidentally, so far as persons dealing with the organization are concerned, such as the Industrial Registrar, it establishes that the request is made on behalf of the Committee of Management. It is pointed out that the Committee of Management contemplated by the scheme will not function until after the election of its membership and that there is no _ other formally appointed Committee of Management in the organization. It is to be observed, however, that the expression Committee of Management is defined in s.4 of the Act. In relation to an organization, it means that the group or body of persons (however described) that manages the affairs of the organization. In the absence of a smaller group of persons holding authority formaily or informally to manage the affairs of the organization the only group of persons that manages the organization in its Federal manifestation is the whole body of members. That is the situation in this organization. And in that situation a valid rule that the request in contemplation be deemed to be a i ee a ee ee en te SN eee so 21. made on behalf of the Committee of Management would be no idle or ephemeral provision, but matter of fact enough, expressing a real provision binding all members. The approved scheme operates in the same manner and to the same effect. The situation therefore is that when the request is made to the Industrial Registrar, it is made according to the provisions binding upon the organization and the members for the management of the affairs of the organization, on hehalf of the Committee of Management. A scheme, as approved is not addressed to any person outside the organization. But it creates a situation as between the members themselves and between them and the organization under which some members will be clothed with authority to act on behalf of the organization. It operates as a factual circumstances which third parties may accept and act upon in their dealings with the organization. The tenth provision may not be essential to the scheme but it expresses an important element of it. However, the inclusion of this provision in the scheme does not establish as against persons outside the organization that the specified offices and positions are for the purpose of s.170 offices and positions in the organization. That, for the purposes of the Industrial Registrar's functions under s.170, depends upon the actual facts. In this case, on the actual facts, once the scheme is o Pe en eee eee eee e nnn a ne ee wee Ree nee 22. approved the offices and positions with which the contemplated request for an election under s.170 1s concerned are established as offices and positions in the organization. As soon as the scheme is approved the constitution of the organization provides for the existence of the Committee of Management specified therein. Membership of that body is an office. The offices of President, Vice President, General Secretary and Treasurer exist independently of their membership of the Committee of Management. Accordingly all the offices with which the proposed election under s.170 are concerned are, or become, immediately upon the Court approving the scheme for the reconstitution of the supreme governing body of the organization, offices in the organization. There should be a declaration pursuant to s.171D(1) in the following terms: i. The Court declares that collective bodies of the Federated Cold Storage & Meat Preserving Employees Union of Australasia, namely the Federal Council, Federal Executive and Federal Committee of Management have ceased to exist or to function effectively and there are no effective means under the Rules of the Organization by which those collective bodies can be reconstituted or enabled to function effectively. we meee pe ene ee ee ee ee ee -e wee mee - me eee eee en ee er 23. The Court declares that offices or positions in the Organization are vacant, namely the offices of Federal President, Federal Vice-President, General Secretary, Federal Treasurer and all positions on the Federal Council, Federal Executive and Federal Committee of Management and there are no effective means under the Rules of the Organization to fill those offices or positions. The proposed scheme in its final form is contained in the minutes of order submitted on 4 July 1983. In my view therefore the Court should approve that scheme with some exceptions. I would order: Ue ER a RR Re ce Me NA The Court declares that collective bodies of the Federated Cold Storage & Meat Preserving Employees Union of Australasia (hereinafter referred to as "the Organization"), namely the Federal Council, Federal Executive and Federal Committee of Management, have ceased to exist or to function effectively and there are no effective means under the Rules of the Organization by which those collective bodies can be reconstituted or enabled to function effectively. 24. - The Court declares Lhal offices or positions in the Organization are vacant, namely the offices of Federal President, Federal Vice-President, General Secretary, Federal Treasurer and all positions on the Federal Council, Federal Executive and Federal Committee of Management and there are no effective means under the Rules of the Organization to fill those offices or positions. Having satisfied itself that this Order will not do substantial injustice to the Organization or to any member of the Organization, the Court orders that the following Scheme for the reconstitution of the said collective bodies and for the filling of the said offices and positions be approved, namely: (a) Within twenty-one days after the date hereof, the Applicant on behalf of the Committee of Management of the Organization, in writing, request the Industrial Registrar that elections be conducted toa fill the following offices or positions Organization, namely Federal President, Vice-President, Federal Treasurer, Secretary, Assistant Secretary, Organizer the Federal General and Federal Councillors and such offices and positions we eee ne wee cere er ~ een - ee comer ee - wae Ee a ate te ee el Hee phe Ne ea ne 25. be deemed to be offices and positions in the Organization for the purpose of section 170 of the Conciliation and Arbitration Act 1904. (ob) (i) (ii) (c) (i) fee en 6 ween eee eee One person be elected by all of the financial members of the Organization to fill each of the offices or positions of Federal President, Federal Vice-President, Federal Treasurer, General Secretary, Assistant Secretary and Organizer and the persons so elected be the officers of the Organization; Any financial member of the Organization who has been a member of the Organization for not less than one year be eligible to be nominated for any of the offices or positions referred to in sub-paragraph (i) hereof by any two other financial members of the Organization; The number of Federal Councillors to be elected be determined by the person who acts as Returning Officer for the purposes of the elections on the basis that each division of the Organization be entitled to elect two Federal Councillors, plus additional Federal Councillors according to the number of Ne Ra lee oe er Ae de ee ee ee ee ee (ii) 26. members within the division on the following basis:- No. of Members No. of Additional Federal Councillors 750 - 1000 1 1001 - 1500 2 1501 - 2000 3 2001 -— 2500 4 2501 - 3000 5. For the purposes of the election the Organization be divided into divisions on the following basis: All members who are employed or were last employed within the State of Victoria in the area covered by the Australian Telecommunications Commission's Area Codes numbered 050, 054, 058, 057 and 060 constitute the northern Victorian Division; AllL members who are employed or were last employed within the State of Victoria in the area covered by the Australian Telecommunications Commission's Area Codes ce a ee a ee ee ee (iii) (iv) 27. numbered 059, 056, O51 and 0648 constitute the south-eastern Victorian Division; All members who are employed or were last employed within the State of Victoria in the area covered by the Australian Telecommunications Commission's Area Codes numbered 053, 055 and 052 constitute the south-western Victorian Division; All members who are employed or were last employed within the State of Victoria within the area covered by the Australian Telecommunications Commission's Area Code numbered 03 constitute the metropolitan Victorian Division; All members who are employed or were last employed within the State of South Australia constitute the South Australian Division. Federal Councillors be elected by all of the financial members of the Organization in each Division. Any financial member of the Organization who is employed or was last employed within a Se ea tee ee a Far en ae ee Se RD EN oe mean te aoe ee (a) (i) (ii) 28. particular Division be eligible to be nominated for the office or position of Federal Councillor representing that Division by any two other financial members of the Organization who are employed or were last employed in that Division. (v) For the purpose of ascertaining the number of Federal Councillors to be elected from any division, the person who acts as Returning Officer to conduct the said elections ascertain the numbers of members who are employed or were last employed within each Division as at the date hereof. For the purposes of paragraphs (b) and (c) hereof, any member of the Organization who is a financial member of the Federated Cold Storage & Meat Preserving Employees' Union of Australasia South Australian Branch, a registered Association pursuant to the Industrial Conciliation and Arbitration Act 1972-1982 of South Australia be deemed to be a financial member of the Organization. For the purposes of applying sub-paragraph (i) hereof the returning officer shall be entitled to rely upon the certificate of the secretary of the RE On 8 me ee te ee nner ee ee re ee (e) "(£) (g) 29. said Association that a person named in the certificate is a financial member of the said Association. The elections be conducted in accordance with Part VAA of the Conciliation and Arbitration Regulations and the date for the closing of nominations be the 31st day of January 1984. (i) On the complet1ron of the elections the persons declared elected be the Officers and Federal Councillors respectively of the Organization. (ii) On the completion of the elections the Officers and Federal Councillors declared elected be and constitute the Federal Committee of Management of the Organization. The Federal Committee of Management of the Organization so elected: (i) Shall meet as soon as practicable after the declaration of the said elections and thereafter shall meet not less than once in ee a net ae eee ee (ii) (iii) (iv) 30. each year and a quorum thereof shall be a majority of the Officers and Federal Councillors; Shall have power to elect by secret ballot at its first meeting from among the Federal Councillors ten persons who, together with the Officers shall constitute a Federal Executive which shall meet not less than once in each three months and a quorum of which shall constitute a majority of the Officers and members thereof; Shall have power to elect by secret ballot at its first meeting from among the Federal Councillors three persons who, together with the Officers, shall constitute the Finance Committee of the Organization which shall meet not less than once in each three months and a quorum of whach shall be a majority of the Officers and members thereof; Shall have power to dGelegate any of its powers and functions (except for the power to make and amend Rules) to the Federal Executive or the Finance Committee so constituted; nk eee a eee eee ae et A "(h) (i) (v) Shall have the supreme power of the Organization, including the power to do all acts and to make all decisions necessary for the proper conduct of the Organization; (vi) Shall have the power to make and amend Rules of the Organization. All meetings required by paragraph (g) hereof shall be called by the General Secretary or, in his absence, the Assistant Secretary, who shall advise all members of the Federal Committee of Management, the Federal Executive or the Finance Committee (as the case may be) of the time, date and place of such meetings. Rules of the Organization made by the Federal Committee of Management: (i) Shall provide for all things required by the Conciliation and Arbitration Act 1904 and the Conciliation and Arbitration Regulations; (ii) Shall provide that the first elections to be held pursuant to such Rules for ali offices and positions shall be commenced no later -- = - « - aw yee ee Neat ene wee er ae wae ee Se ne ter (3) (k) 32. than two months after the certification by the Industrial Registrar of such Rules; (iii) Shall be submitted to the Industrial Registrar pursuant to section 139(4) of the Conciliation and Arbitration Act 1904 on or before the 3lst day of December 1983. Rules made by the Federal Committee of Management as aforesaid shall be deemed to have been made by the authorised rule making body of the Organization in accordance with the relevant procedures laid down by the Rules of the Organization. Upon election pursuant to such Rules of Officers, Federal Councillors, Federal Executive Members and Finance Committee Members, the persons elected pursuant to paragraphs (a), (b), (c), (d) and (e) hereof shall cease to hold the offices and positions therein referred to but all decisions made and all acts performed by them as officers, Federal Councillors, or as the Federal Committee of Management, Federal Executive and Finance Committee respectively of the Organization shall continue to have full force and effect unless and until rescinded or annulled pursuant to such Rules. me ee re nl tt ne eg a ee alt ae keene An ae a ee ee ee ne ee en en . 33. 4. The Court orders that liberty to apply be reserved to the Applicant upon giving not less than seven days' notice in writing to the Industrial Registrar. 5. The Court orders that the Application be adjourned to a date to be fixed. Lor - oun 2-432 . roe choy RS : é - -3 . a Tor ol Tate et 71.0) Ua GX Lr. Jvc cues Sethe Sifter Ra 0 pssocorats ama tte na Te me ee ee et ree ee ee ees ee ee ee fa A atk ee a ar te eet ate rete ee ee e> IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V. No. 44 of 1982 ees ewe INDUSTRIAL DIVISION IN THE MATTER of the Conciliation and Arbitration Act 1904 and IN THE MATTER of the Federated Cold Storage and Meat Preserving Employees Union of Australasia and IN THE MATTER of an application by PATRICK GALLAGHER for an order pursuant to s.171D of the Act CORAM: Smithers, Northrop and Keely JJ. DATE: 21 October 1983 WHERE: Melbourne NORTHROP J. REASONS FOR JUDGMENT The applicant, Patrick Gallagher, is a member of the Federated Cold Storage and Meat Preserving Employees Union of Australasia, an organization under the Conciliation and Arbitration Act 1904, "the Act". At present there are two branches of the organization, namely the Victoria-Tasmanian Branch and the South Australian Branch vem caer PRE eS Aue Na are ae We ae nie hat. ss respectively. In fact, the organization has members in the States of Victoria and South Australia only. In South Australia, a State registered union whose members correspond to the members of the South Australian Branch of the organization, has obtained State Award coverage within South Australia for persons eligible to be members of the organization. The applicant is the secretary of the Victoria~Tasmanian Branch of the organization. Parts of the organization, namely collective bodies within the meaning of the Act, have ceased to exist. There are no effective means under the rules of the organization by which those collective bodies can be reconstituted effectively. Offices in the organization are vacant. There are no effective means under the rules of the organization to £111 those offices. For present purposes, it is sufficient to say that under the rules of the organization there is no governing body of the organization, there are no officers of the organization, and there is no provision for any effective method by which a governing body may be created or persons elected to offices. The rules do not provide for any effective method by which they may be amended. earn ear aes nye ae re Fabre dalle el aCe a Re ea porereerr: The applicant, as a member of the oganization, made application to the Court under s.171D of the Act seeking declarations under sub-section (1) and the approval of a scheme under sub-section (2). The Court gave directions under sub-section (6) requiring wide publication of the application. This was done. In addition, the applicant gave further publicity of the application and the proposed scheme and its effect. No person has sought to appear to support or oppose the orders sought. For present purposes it is necessary to refer to two aspects only of the scheme. Because of the existing deficiencies, the scheme contains references to a number of offices, including the office of federal councillor, and provides for an election to be conducted to fill all those offices. The existing rules of the organization do not make provision for most of those offices. The scheme provides that a request be made that the election be conducted under s.170 of the Act. To give legal efficacy thereto, the scheme contains a deeming provision. The scheme provides also for the creation of a governing body of the organization, namely the federal committee of management. The scheme provides that the federal committee of management shall have power to make and amend the rules of the organization and that the rules so made "shall be deemed to have been made by the authorized SP FERie NEA A eA TED Te ee me qt nL ve SE TE aera) aa? anew rule~making body of the organization in accordance with the relevant procedures laid down by the rules of the organization"; see sub-section 139(4) of the Act. This deeming provision is required to give legal efficacy to the scheme. The application came on for hearing before the Court constituted by a single judge. The Court raised the question whether it had power to approve a scheme which contained deeming provisions. In the exercise of the powers conferred by s.118C of the Act, the Court, as then constituted, ordered that the application be heard and determined by a Full Court. At the same time the Court directed that notice of the application be given to the Industrial Registrar. Before the Full Court, the applicant was represented by counsel and the Industrial Registrar was represented by counsel. The Court received valuable assistance from counsel for the Industrial Registrar who was able to illustrate the practical matters that had to be considered by the Industrial Registrar in relation to the exercise of powers under sections 170 and 139(4) of the Act. Counsel did not contend that the Court had no power to approve a scheme which contained deeming provisions, but in fact submitted that it was desirable that such provisions be included, particularly having regard to the provisions of ~~" ne ee a tees a ee pen an ee ae yest ete Re are ARR RS EOS teens cm eS Bertinage oe Papen aa We eemar ane its Se eet sections 170 and 139(4) of the Act. Section 170 of the Act enables an organization to request the Industrial Registrar that an election for offices in the organization be conducted under that section with a view to ensuring that no irregularity occurs in or in connection with the election. In the present case, the relevant offices specified in the scheme are not ail offices created by the rules of the organization. In these circumstances, the scheme, in its final form, contained a provision that the offices the subject of the request, "be deemed to be offices ... in the organization for the purposes of s.170 of the [Act]". Under s.139(4) of the Act, alterations to the relevant rules of an organization do not have effect until the Industrial Registrar, among other things, has certified that in his opinion the alterations have "been made in accordance with the relevant procedures laid down by the rules of the organization". In the present application, the proposed scheme provides that the rules be amended in accordance with the procedures laid down in the scheme by the federal committee of management elected under the scheme. Of necessity those alterations to the rules cannot be made in compliance with the requirements of s.139{4). Hence the desirability, nay the necessity, for the deeming provision contazned in the scheme. wal ao Cm On the material before it, the Court is satisfied, pursuant to sub-section 171D(1) of the Act, that parts of the organization, namely collective bodies, have ceased to exist and that there are no effective means under the rules of the organization by which those collective bodies can be reconstituted effectively. On the material before it, the Court is satisfied, pursuant to sub-section 171D(1) of the Act, that the offices in the organization are vacant and that there are no effective means under the rules of the organization to fill those offices. Accordingly, under sub-section (2), the Court has power, by order, "to approve a scheme for the taking of action ... by an officer ... of the organization ... for the reconstitution ... of the collective body ... [and] for the filling of the office or position". Sub-section (3) imposes a statutory limitation on the exercise of that power, namely that "the Court shall satisfy itself that the order would not do substantial injustice to the organization or to any member of the organization". Where such an order is made, the Court has power "to give such ancillary or consequential directions as 1t thinks f£1t"; sub-section (4), and any such orders and directions and any action taken in accordance therewith have "effect notwithstanding anything in the rules of the organization"; sub-section (5). In R. v. Joske; Ex parte Shop Distributive and Allied Employees' Association (1976) 135 C.L-R. 194, the High Court considered the nature of the jurisdiction and powers conferred by s.171D of the Act and related jurisdiction and powers conferred by s.171C of the Act. The jurisdiction and powers so conferred were judicial, notwithstanding that the powers were said to be very wide. Stephen J. considered these matters at pp.209-1l. At pp.209-10, his Honour, in speaking of the power conferred by s.171D said: "Section 171D(1) empowers the Industrial Court to declare that a part of an organization has ceased to exist or to function effectively or that an office or position in an organization has become vacant, and that no effective means exists under the organization's rules to remedy this. Then sub-s. (2) empowers the Court, having made such a declaration, to approve a scheme 'for the taking of action by a collective body of the organization or of a branch of the organazation or by an officer or officers of the organization or of a branch of the organization for the reconstitution of the branch or part of the branch, or of the collective body, or to enable it to function effectively, or for the filling of the office or position' (sub-s. (2)) but it must first satisfy itself 'that the order would not do substantial injustice to the organization or to any member of the organization' (sub-s. (3)). It is the power to rectify, modify or validate as the Court thinks fit, and the power to determine whether an organization has ceased 'to function effectively' and, if so, to sanction a scheme to rectify the position, in each case qualified only by the provision as to substantial injustice, that are particularly seized upon by the prosecutors as revealing in these sections that other than Judicial power has been conferred on the Court. — nes) serene ere oe er em ee ee EO Snrepe tee ee eee These provisions are concerned exclusively with the nature of the remedies open to the Court once it has adjudicated upon matters which have been initiated by a party and the determination of which is an eminently judicial function. That particular nature of an available remedy, at least when it 1s one not unfamiliar as part of the traditional equipment of courts of law or equity, can seldom be such as of itself to involve a court in a non-judicial function." His Honour then referred to the nature of judicial power in relation to powers conferred by s.171C and referred to what was said in Cominos v. Cominos (1972) 127 C.L.R. 588. then continued at p.211: "No different considerations appear to me to apply to s.171D; when the Court has made a declaration under sub-s. (1) of that section a situation is disclosed in which some part of a registered organization has ceased to exist or has become moribund; the rules of the erganization are found to provide no solution but some efficacious remedy 1s called for; the traditional response of the law in such a case has been to do very much what sub-s. (2) provides for, to empower the Court to supervise a scheme for reconstitution of the defunct or moribund organization. In the fields of charitable trusts and of companies the same concept has been employed in exercise of power eminently judicial in character. It is said that the reference in s.171D(1) to an organization having ceased 'to function effectively' invokes broad considerations of industrial policy such as are referred to in the recitation of the chief objects of the legislation in s.2 of the Act. I regard the reference to effective functioning as much more limited in scope; it is concerned with the performance, by the 'part of the organization' which has been found wanting, of its function as such a part. Whether it is, in this sense, functioning effectively is a He SUP PE am tere net neem Me ant ee etre me em 2 - Cee ee i tee teehee yore matter which is entirely within the scope of determination by the exercise of judicial functions. My general observations concerning s.171C apply equally to s.171D." In speaking of s.171C of the Act, and after referring to Cominos v. Cominos, Mason and Murphy JJ. p.216 said: "In the exercise of judicial power courts are called upon to decide whether particular transactions are invalid or unenforceable under the legislation relating to companies, money-lending and hire-purchase. Likewise they are frequently required to determine whether procedural steps taken in the course of legal proceedings have been validly or regularly taken. In each class of case the courts are empowered to relieve against invalidity, unenforceability or irregularity after having regard to any injustice, prejudice or hardship that may be caused by the making of such an order. This function, so it seems to us, is essentially an exercise of judicial power. Even if this were not so, the exercise of the power to grant relief must be regarded as incidental to the exercise of judicial power which is involved in the determination of the initial issue of invalidity, unenforceability or irregularity. For our part, we can perceive no real difference between these functions and the role thrust upon the Australian Industrial Court by s.171C. The exercise of the power given by s.171C(2), if not itself an exercise of judicial power (which in our opinion it is), is incidental to proceedings for a declaration of invalidity under sub-s. (1) which involves the exercise of such power." At pp.217-8 their Honours referred to the provisions s.171D and continued: at of Pe SE ER FF eT) Wet nere aon ee ee ee a ¥ ae Sa ees TZ we eee ee ee eid ee ee rae ma ee et te > -~ 10 - "Much of what we have said in relation to s.171C has equal application to s.171D. There is to our mind nothing in the issues which s.171D(1) poses for decision that is alien to the exercise of judicial power. Such issues of fact as the question whether part of an organization has ceased to exist or to function effectively, whether there are effective means under the rules by which it can be reconstituted or enabled to function effectively, are issues of fact well suited to judicial determination. So also are the issues posed by par. (b) of sub-s. (1). The principal point of attack made by the prosecutors was on the power given to the Court by sub-s. (2) to approve a scheme. Yet this is a power which is associated with a jurisdiction to make a declaration under sub-s. (1), a function which we have held to involve the exercise of judicial power. Whether a scheme will or ais likely to (a) reconstitute a branch, part of a branch or a collective body, (b) enable any one or more of these entities to function effectively, (c) result in the filling of an office or position or (dad) cause substantial injustice to the organization or any member are all issues which are susceptible to judicial determination in the exercise of the judicial power, as indeed is the evaluation of the considerations which may be thought to be relevant to the making of an order granting or refusing approval. To the extent to which the argument is an attack on sub-s. (3) ut is sufficient for us to reiterate the observations which we have already made in connexion with s.171C(2)(b). Section 171D(1) entrusts to the courts a function similar to that which courts have undertaken in confirming schemes of arrangement under the Companies Act. These schemes often reconstitute the capital structure of a company and readjust the rights of creditors and shareholders. The jurisdiction thereby exercised, it should be acknowledged, involves the exercise of judicial power. Consequently, it is our opinion that the jurisdiction conferred upon the court by s.171D is itself an exercise of judicial power." -~ll- The powers conferred by s.171D(2) and (4) are extremely wide and should not be restricted. They are similar in nature to the wide powers conferred on the Court by s-141 of the Act to give directions for the performance or observance of the rules of an organization. The width of those powers is illustrated by the nature of directions commonly given by the Court and by the reasons for judgment in High Court cases such as R. v. Commonwealth Court of Conciliation and Arbitration: Ex parte Barrett (1945) 70 c.L.R. 141. The powers conferred by s.171D(2) and (4) should receive a like width of construction. An approved scheme should contain provisions to make effective the powers conferred by the scheme. In making those provisions effective a deeming provision may be both desirable and necessary. A deeming provision is not unusual in orders made by courts and is, essentially an exercise of judicial power. This can be illustrated by reference to orders made by a court for substituted service of documents, even when as a result of legal proceedings subsequently taken based upon that substituted service, the status of the person on whom the document is deemed to have been served may be affected. Under the Bankruptcy Act 1966 a person commits an act of bankruptcy if a creditor has served on that person a bankruptcy notice under that Act and that person does not, ene ee ee ' nn a ep er ee ery ees! eee ee ee Ga De eet Tle ed aa -12- within the time specified in the notice, comply with the notice; s.40(1)(g). Under that Act, service of the bankruptcy notice must be personal. Under s.309(2) of that Act the Court has power to order that a document, including a bankruptcy notice, be served in a manner specified by the Court. In exercising that power, the Court invariably makes an order that the service "be deemed to have been effected" at a time calculated in accordance with the provisions of the order. That deeming provision is necessary to enable the Court, in subsequent bankruptcy proceedings, to determine if an act of bankruptcy has resulted from failure to comply with the bankruptcy notice; generally see re Dennis Anthony Fowler (a debtor); Ex parte A. G. C. (Advances) Ltd., Federal Court, Northrop J., 12 October 1982, unreported. A deeming provision of that type has never been held to be a usurpation of the power of the Court when exercising bankruptcy jurisdiction on the hearing of a bankruptcy petition. The deeming provisions in the scheme are necessary to give legal efficacy to the scheme. They do not displace the duties and powers conferred by the Act upon the Industrial Registrar. They are directed to what is to be done under the scheme, and when that is done it is to be treated as if it was done under the rules of the organization. The Industrial Registrar is able to perform the duties and to exercise powers conferred upon him by ~ Fa ONE he be re re mn ee Bett ae eee ee ~ ee ee ee eatin: peat ee ee ee tee - 13 - sections 170 and 139(4) of the Act as if the rules of the organization contain the relevant provisions set out in the scheme. That is the very purpose which the scheme seeks to achieve. That purpose should not be thwarted. During the course of the hearing, it became apparent that a further deeming provision was required in relation to financial members in South Australia. For reasons similar to those already given, that deeming provision should be included in the scheme. In Sherriff v. Townsend (1980) 48 F.L.R. 20, a Full Court of the Federal Court constituted by Smithers, Evatt and Northrop JJ. approved a scheme under s.171D of the Act which included a deeming provision relating to s.139(4) of the Act. At pp.59-62 Northrop J. referred to the powers conferred by s.171C and 171D of the Act. The order made under s.171D of the Act, including the scheme which was approved by the Court, is set out at pp.63-5. The application to the Court included the scheme under s.171D of the Act as proposed by the applicant. Wide publication was given to that scheme. During the hearing of the application it was suggested that a number of amendments be made to that scheme. Those amendments, although important, did not change the nature of the scheme and so notice of the amended scheme was not required to be given. eT a Lae kN ee ty CCR RS Are Wn ube -~ 14 - After the hearing of the application, counsel for the applicant supplied a draft order which contained the scheme proposed by the applicant but incorporating the amendments suggested during the hearing of the application. That draft order is annexed to these reasons. Subject to one variation, I would approve the scheme in the form contained in the draft order but would insert in paragraph 3(e) a date being about three months later than the date on which the order is made. Because of the views of the other members of the Court, I should say something about that scheme. The word "scheme" has many different meanings, bot in s.171D it means "a plan, .-..; a programme of action... hence, a plan of action devised in order to attain some end"; see the Shorter Oxford Dictionary. Under the scheme proposed by the applicant, directions are given under which action is taken by the applicant as the first step in a series of steps by which officers of the organization are to be elected by all the financial members of the organization. Those officers, individually and collectively as members of committees of the organization, are to exercise interim powers pursuant to directions contained in the scheme, the most important power being the power to make mles to regulate the affairs of the organization. The rules to be made must comply with the requirements of the Act and the regulations. Upon those rules having effect under sub-section 139(4) of the Act, elections thereunder are to - 15 - take place, and upon the completion of those elections the officers so elected, individually and collectively as members of committees of the organization, are to exercise the powers conferred upon them by those rules. The directions contained in the scheme are made by the Court pursuant to its inherent power to ensure the scheme is effective, as well as pursuant to the powers conferred by sub-section 171D(4) of the Act. Under sub-section 171D(5), those directions and actions taken thereunder have effect notwithstanding anything in the rules present ly having effect. The Court is not making rules regulating the affairs of the organization. The Court is not approving internal structures for the management of the organization. The scheme approved by the Court in no way can inhibit the Court in any legal proceedings which in the future may be brought by a member of the organization under s.140 or s.141 of the Act in which a challenge is made to the validity of any of the rules that will be made in the future pursuant to the directions contained in the scheme. In approving the scheme, the Court is not approving rules which have not yet been formulated. Any possible future proceedings, of necessity, will be determined by the Court by the application of well-established legal principles to the facts proved in those proceedings. Many of the sub-paragraphs to paragraph 3(i) in the scheme as originally proposed, identified therein as paragraph 3(g), were mandatory in form, the word "shali" eee eee en ne Deine - 16 - instead of the word "may being used. Most of those sub-paragraphs relate to the structures to be adopted in the rules of the organization. Many different forms of structures are valid under the Act and the regulations. For that reason, during the course of the hearing the Court suggested that the word "may" be used except where, under the Act or the regulations, the requirement was mandatory, e.g. sub-paragraphs (iv) and (ix). Sub-paragraphs (xi1) and (xiii) are mandatory because they fix times by which specified action mst be taken. It is noted that most of the sub-paragraphs in which the word "may" now appears correspond to the structures of the collective bodies which are created by the scheme to enable rules to be made by the commiteee of management to be elected under the scheme and to manage the affairs of the organization pending the completion of elections to be conducted under the new rules when so made. It is noted further that having regard to the lapse of time between the hearing of the application and the publishing of the order of the Court the time mentioned in sub-paragraph (xiii), namely 31 December 1983, may need to be amended. That could be done pursuant to the liberty to apply granted by the order, and attention is directed to Federal Court Rule 0.35 r.10. Notice of the proposed scheme contained references to what was proposed to be included in the rules of the organization to be made by the federal committee of nee re ree rr rementticenpene reeeme cnn eens rene + ope of eres ray ae pee ee $. eT Gk. Pah oN Soagee eae WT -17 - management elected pursuant to that scheme. Members of the organization seeing that proposed scheme would expect the rules when made to adopt the structures set out in paragraph 3(i). No member has objected to that form. In the scheme set out in the draft order, those structures are not mandatory, but nevertheless indicate what is proposed. If there is a departure from those structures, any member would be justified in having the application re-listed for further consideration. On the material before it, the Court, pursuant to the power conferred by sub-section 171D(1) of the Act, is prepared to make the declaration sought by the applicant. The statutory limitation on the exercise of the pover to make an order approving a scheme under sub-section 171D(2) of the Act is that the proposed order "would not do substantial injustice to the organization or to any member of the organization"; see sub-section 171D(3). On the material before the Court, I am satisfied that the scheme set out in the draft order will not do substantial injustice to the organization or to any menber of the organization. This 1s not a case where the Court is expressing a preference between competing schemes; ef., Sherriff v. Townsend, supra, per Northrop J. at pp.59-60. Notice has been given of the proposed scheme. There are no objections to that proposed scheme. There is no reason why that proposed scheme should not be approved. The Court should make an order in the form LR Tere een eee ee ee Athy tote poe - 18 - of the draft order supplied by counsel for the applicant, but paragraph 3(d) should be numbered "3(d)(i)" and a new sub-paragraph be 1nserted as follows: "(ii) For the purposes of applying sub-paragraph (i) hereof the returning officer shall be entitled to rely upon the Certificate of the secretary of the said Association that a@ person named in the certificate is a financial member of the said Association." With the insertion of that sub-paragraph, which has been inserted at the suggestion of counsel for the Industrial Registrar, the draft order supplied by counsel for the applicant 1s agreed to by counsel for the Industrial Registrar. In the result, the order made will be in conformity with the views expressed by Smithers J. we, DRAFT ORDER SUPPLIED BY COUNSEL FOR THE APPLICANT The Court declares that collective bodies of the Federated Cold Storage & Meat Preserving Employees Union of Australasia (hereinafter referred to as "the Organization"), namely the Federal Council, Federal Executive and Federal Committee of Management, have ceased to exist or to function effectively and there are no effective means under the Rules of the Organization by which those collective bodies can be reconstituted or enabled to function effectively. The Court declares that offices or positions in the Organization are vacant, namely the offices of Federal President, Federal Vice-President, General Secretary, Federal Treasurer and all positions on the Federal Council, Federal Executive and Federal Committee of Management and there are no effective means under the Rules of the Organization to fill those offices or positions. Having satisf1red itself that this Order will not do substantial injustice to the Organization or to any member of the Organization, the Court orders that the following Scheme for the reconstitution of the said collective bodies and for the filling of the said offices and positions be approved, namely: (a) (b) Within twenty-one days after the date hereof, the Applicant on behalf of the Committee of Management of the Organization, in writing, request the Industrial Registrar that elections be conducted to fill the following offices or positions in the Organization, namely Federal President, Federal Vice-President, Federal Treasurer, General Secretary, Assistant Secretary, Organizer and Federal Councillors and such offices and positions be deemed to be offices and positions in the Organization for the purpose of section 170 of the Conciliation and Arbitration Act 1904. (i) One person be elected by all of the financial members of the Organization to fill each of the offices or positions of Federal President, Federal Vice-President, Federal Treasurer, General Secretary, Assistant Secretary and Organizer and the persons so elected be the officers of the Organization; po {c) (i) Any financial member of the Organization who has been a member of the Organization for not less than one year be eligible to be nominated for any of the offices or positions referred to in sub-paragraph (i) hereof by any two other financial members of the Organization; The number of Federal Councillors to be elected be determined by the person who acts as Returning Officer for the purposes of the elections on the basis that each division of the Organization be entitled to elect two Federal Councillors, plus additional Federal Councillors according to the number of members within the division on the following basis:- No. of Members No. of Additional Federal Councillors 750 - 1000 1 1001 - 1500 2 1501 - 2000 3 2001 - 2500 4 2501 - 3000 5. ~ SPREE a RS org ee Ae ee (ii) For the purposes of the election the Organization be divided into divisions on the following basis: All members who are employed or were last employed within the State of Victoria in the area covered by the Australian Telecommunications Commission's Area Codes numbered 050, 054, 058, 057 and 060 constitute the northern Victorian Division; All members who are employed or were last employed within the State of Victoria in the area covered by the Australian Telecommunications Commission's Area Codes numbered 059, 056, 051 and 0648 constitute the south-eastern Victorian Division; All members who are employed or were last employed within the State of Victoria in the area covered by the Australian Telecommunications Commission's Area Codes numbered 053, 055 and 052 constitute the south-western Victorian Division: ~) to EAN epee ean Aen te, oe ee cy 2H (iii) (iv) (v) All members who are employed or were last employed within the State of Victoria within the area covered by the Australian Telecommunications Commission's Area Code numbered 03 constitute the metropolitan Victorian Division; All members who are employed or were last employed within the State of South Australia constitute the South Australian Division. Federal Councillors be elected by all of the financial members of the Organization in each Division. Any financial member of the Organization who is employed or was last employed within a particular Division be eligible to be nominated for the office or position of Federal Councillor representing that Division by any two other financial members of the Organization who are employed or were last employed in that Division. For the purpose of ascertaining the number of Federal Councillors to be elected from any division, the person who acts as Returning sretey (a) (e) (£) Officer to conduct the said elections ascertain the numbers of members who are employed or were last employed within each Division as at the date hereof. For the purposes of paragraphs (b) and (c) hereof, any member of the Organization who is a financial member of the Federated Cold Storage & Meat Preserving Employees! Union of Australasia South Australian Branch, a registered Association pursuant to the Industrial Conciliation and Arbitration Act 1972-1982 of Scuth Australia be deemed to be a financial member of the Organization. The elections be conducted in accordance with Part VAA of the Conciliation and Arbitration Regulations and the date for the closing of nominations be the day of 1983. (i) On the completion of the elections the persons declared elected be the Officers and Federal Councillors respectively of the Organization. Co ire eremrtninentin "eas eer waco (ii) (g) The On the completion of the elections the Officers and Federal Councillors declared elected be and constitute the Federal Committee of Management of the Organization. Federal Committee of Management of the Organization so elected: (i) (iii) Shall meet aS soon as practicable after the declaration of the said elections and thereafter shall meet not less than once in each year and a quorum thereof shall be a majority of the Officers and Federal Councillors; Shall have power to elect by secret ballot at its first meeting from among the Federal Councillors ten persons who, together with the Officers shall constitute a Federal Executive which shall meet not less than once in each three months and a quorum of which shall constitute a majority of the Officers and members thereof; Shall have power to elect by secret ballot at its first meeting from among the Federal Councillors three persons who, together with the Officers, shall constitute the Finance Committee of the Organization which shail meet not less than once in each three months and a quorum of which shall be a majority of the Officers and members thereof; (iv) Shall have power to delegate any of its powers and functions (except for the power to make and amend Rules) to the Federal Executive or the Finance Committee so constituted; (v) Shall have the supreme power of the Organization, including the power to do all acts and to make all decisions necessary for the proper conduct of the Organization; (vi) Shail have the power to make and amend Rules of the Organization. All meetings required by paragraph (g) hereof shall be called by the General Secretary or, in his absence, the Assistant Secretary, who shall advise all members of the Federal Committee of Management, the Federal Executive or the Finance Committee (as the case may be) of the time, date and place of such meetings. (i) Rules of the Organization made by the Federal Committee of Management: (i) (ii) (iii) (iv) May provide for the abolition of the existing Victoria-Tasmanian Branch and the existing South Australian Branch of the Organization; May provide for the transfer of all funds and assets of the Victoria-Tasmanian Branch to a Federal Fund to be controlled by the Finance Committee subject to the directions of the Federal Committee of Management; May provide for the supreme control and government of the Organization to be vested in a Committee of Management consisting of a Federal President, Federal Vice-President, Federal Treasurer, General Secretary, Assistant Secretary and Organizer elected in accordance with paragraph (b) hereof and Federal Councillors elected in accordance with paragraph (c) hereof; Shall provide for periodic election of officers and Federal Councillors; SRC TEES eR Rt pe (v) (vi) (vii) - 10 - May provide for a Federal Executive to consist of the Officers of the Organization, together with ten other members of the Organization elected by all of the financial members of the Organization; May provide for a Finance Committee of the Organization to consist of the Officers of the Organization and three other members of the Organization elected by the financial members of the Organization; May provide for the Federal Executive and the Finance Committee to meet not less than once in every three months; (viii) May provide for the Federal Committee of Management to meet not less than once in each year; Shall provide for all things required by the Conciliation and Arbitration Act 1904 and the Conciliation and Arbitration Regulations; (x) (xi) (xii) (xiii) -~1ll- May provide for any matter or thing allowed by the Conciliation and Arbitration Act 1904 and the Conciliation and Arbitration Regulations; May provide for the creation of branches of the Organization in the future if thought fit: Shall provide that the first elections to be held pursuant to such Rules for all offices and positions shall be commenced no later than two months after the certification by the Industrial Registrar of such Rules; Shall be submitted to the Industrial Registrar pursuant to section 139(4) of the Conciliation and Arbitration Act 1904 on or before the 3lst day of December 1983. (j) Rules made by the Federal Committee of Management as aforesaid shall be deemed to have been made by the authorised rule making body of the Organization in accordance with the relevant procedures laid down by the Rules of the Organization. 1a yp TR Re rR nd - 12 - (k) Upon election pursuant to such Rules of Officers, Federal Councillors, Federal Executive Members and Finance Committee Members, the persons elected pursuant to paragraphs (a), (b), (c), (da) and (e) hereof shall cease to hold the offices and positions therein referred to but all decisions made and all acts performed by them as officers, Federal Councillors, or as the Federal Committee of Management, Federal Executive and Finance Committee respectively of the Organization shall continue to have full force and effect unless and until rescinded or annulled pursuant to such Rules. The Court orders that liberty to apply be reserved to the Applicant upon giving not less than seven days' notice in writing to the Industrial Registrar. The Court orders that the Application be adjourned to a4 date to be fixed. {UUM ES eT I certify that this and the fwerty-aise (24) piecedimg pages are a true copy of the i Reasons for Judgment herein of the { Honowable Mr. Justice Nertt-op tat AIM, asa " —— rye 6 te ree AsSociate uns eRe Beted: 2t ecloke- 1G 33 y enh CSE (HS ea RC POALRL ETT PSOE IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) V No. 44 of 1982 ) ) INDUSTRIAL DIVISION IN THE MATTER of the Application of PATRICK GALLAGHER for an Order pursuant to Section 171D of the Conciliation and Arbitration Act 1904 in respect of THE FEDERATED COLD STORAGE AND MEAT PRESERVING EMPLOYEES UNION OF - AUSTRALASIA CORAM : SMITHERS, NORTHROP and KEELY JJ. DATE : 21 October 1983 REASONS FOR JUDGMENT KEELY d. The applicant, Patrick Gallagher, is the secretary of the Victoria-Tasmanian branch of The Federated Cold Storage and Meat Preserving Employees Union of Australasia (the union). He has applied to the Court under s. 171D of the Conciliation and Arbitration Act 1904 (the Act), seeking declarations and the Court's approval of a scheme for the taking of action for the reconstitution of the Federal Council, the Fede M1 Executive and the Federal Committee of Management of the union and for the filling of certain offices. It may be noted, in passing, that the scheme is er eS ee ee | 2. expressed as a scheme for the reconstitution of collective bodies and for the filling of offices. It is not expressed as a scheme to enable the collective bodies "to function effectively" and, accordingly it is not necessary for the Court in these proceedings to consider the meaning of the words "to function effectively". Neither the application nor the draft order lodged by the applicant after the hearing, which contains the full terms of the applicant's scheme as amended (the draft order), sought to call in aid or rely in any way upon the Court's separate power under s. 171D(4) to "give such ancillary or consequential directions as it thinks fit". It is not necessary for the Court to consider the extent of the power conferred by that sub-section because it is not relevant to any order which the Court is asked to make. I have had the advantage of reading the reasons for judgment of Smithers J. and also those of Northrop J. which annexe the draft order. Accordingly, it is not necessary for me to set out the full terms of the scheme and I shall avoid, as far as practicable, the repetition in these reasons for judgment of any matters of fact which already appear in those judgments. At an earlier hearing before me as a single judge, submissions were put by Mr. Gray, of counsel, on behalf of as oo wees ee ee - + - - - eer = er en ne eee 1 UIE pe be FRIESE ORS Lame TENO Lnneteerneetneete Ramer ty een 3. the applicant, as to the Court's power to make an order approving the Scheme. He referred to an order made under s. 171D in Sherriff v Townsend (1980) 30 A.L.R. 223, but informed the Court that in that case the Full Court had not heard any argument as to its power to make the orders and that its reasons for judgment had not dealt with the question of the Court's power under the section. He also referred to R. v_ Joske; Ex parte Shop Distributive and Allied Employees' Association (1976) 135 C.L.R. 194 in which the High Court rejected an argument that s. 171C and s. 171D attempted to confer upon the Australian Industrial Court powers or functions which were not judicial. The judgments in that case were directed to the quite different issue of the constitutional validity of the sections and, in my opinion, do not give any support to the applicant's contentions as to the power of the Court to approve the scheme. Because of my "doubts as to whether it was "a scheme for the taking of action by a collective body ... or by an officer ..." within the meaning of s. 171D and because the application raised important questions as to the extent of the Court's power under the section, the application was referred, under s. 118C of the Act, for hearing and determination by a Full Court. Unfortunately, the words in s. 171D(2) "for the taking of action ... by an officer" have not been included in the applicant's scheme as set out in the original application . 4. an@ have not been included in the applicant's draft order. That omission has made more difficult the consideration of the Court's powers in respect of this scheme - because it fails to specify what parts of the scheme are said to be "action" to be taken by the applicant as an officer and thus has tended to obscure the nature of the order being sought. The draft order states that "the Court orders that the following Scheme for the reconstitution cf the said collective bodies and for the filling of the said offices and positions be approved, namely; ...". In order to accord with the section and to assist in the clarification of the issues before the Court, there should have been included in the draft order the words "the taking of action by an officer of a branch" - inserted immediately after the words "that the following Scheme for". The failure to include those wcerds has resulted in the submissions before this Court being directed towards the question whether the "Scheme for the reconstitution" of the bodies should be approved whereas the matter for the Court's decision under s. 171D must be whether the Scheme for "the taking of action by an officer of a branch" should be approved. At the earlier hearing the scheme was said to be one for the taking of action both by an officer (the applicant) and by a collective body which "is not an existing collective body of the organization". When the matter came before the Full Court the scheme was presented as one for the 5. taking of action only by an officer and it was said that "it contemplates everything flowing from the action taken by him as an officer". Accordingly, the relevant "action" is action to be taken by a branch officer, the applicant. Because of the conclusions which I have reached, it is not necessary for me to express any opinion on the "first question" considered by Smithers J., namely, whether an officer of a branch is eligible to be authorized to take action for the reconstitution of a collective body of the organization. I shall assume ~ without deciding ~ that he is eligible to do so. In Gordon v Carroll (1975) 6 A.L.R. 579 at 612, the Australian Industrial Court, (Smithers, Woodward and St. John JJ.), said ; "In the event it was not necessary to decide the matter in this case but we are inclined to the view that a power to approve a scheme must include a power to amend a proposed scheme or, where necessary, to devise one". In the present proceedings it is not necessary for me to express any opinion as to that question because Mr. Gray made ic clear that the applicant accepted as part of his proposed scheme any alterations suggested by the Court. (cp. Sherriff v Townsend (supra, at p. 261) where Northrop J. said : "Accordingly, the court proposes to approve none of the schemes presented by the parties, but to approve a scheme which will enable the Federation itself to determine the structure of its Federal Council."). pee eee -— ee nee aceon ee eee re ee mr en rere owe et we we eee tee The fundamental changes proposed In order to appreciate the fundamental changes proposed by the scheme, it is desirable to refer to that part of the history of the union which led to the present application. The applicant deposed to his belief that "the Federal Rules of the Organization do not appear to have been altered since the certification of certain amendments which were adopted on the 4th day of May 1940" and that he had received legal advice "that the Rules of the Organization in 'many respects contravene and fail to comply with the provisions of" the Act and the Regulations. In addition the Official Organ of the Victorian Branch of the Union, "Cold Storage News", in its November/December 1982 issue, contained a Committee of Management Report which included the following "RULE CHANGES Due to the many alterations to the Conciliation and Arbitration Act over recent years it has now become necessary for a complete overhaul and restructure of the rules of our organisation as registered. The Secretary was empowered by a decision of conference to take all necessary legal action and to make all necessary application to the Federal Court to bring this about as soon as possible ..." It is clear from that Committee of Management Report and from the applicant's evidence, that the present On eee ee BR ee ee eee eet ee nn aN Neer meee ee A a ne St ee oe eee oe MPO ASE TT Ser ere rere AEE oe ot oe varnrsr at af 7. application has been brought essentsally because of the present state of the rules and the legal advice received by the applicant that the rules in many respects contravene the Act, that is to say, contravene s. 140(1). The other objectives which the scheme seeks to achieve could all be pursued once the difficulties with the rules are overcome. The applicant has elected to address the problems arising from the present state of the rules by presenting a scheme which in substance seeks to obtain (1) the Court's authorization for rule changes to be made by a body which has no power to alter rules and (2) the Court's approval in advance for the terms of proposed rule amendments. The provisions in the scheme are designed to achieve that twofold objective by reposing the power to make and amend rules in a body of the union which does not have that power under the registered rules, by specifying the matters in respect of which that body may ~ and in some cases shall - exercise that power and by providing that the rules made by that body shall be deemed to have been made "in accordance with the relevant procedures laid down by the rules". Mr. Gray said that "what is proposed involves some changes of a quite dramatic nature to the structure". They include giving the proposed new Federal Committee of Management, in his words, "permission to abolish the branches", transferring the funds and assets, of the 8. Victoria-Tasmauian Branch, approximately $800,000, "to a Federal Fund", abolishing the requirement under the existing registered rules that alterations to rules must be initiated by a branch and giving the proposed new body the unfettered "power to make and amend rules". These are indeed "changes of a quite dramatic nature to the structure" and demonstrate that the real purpose of the scheme is not to reconstitute a collective body. Nor is it essential to the scheme to have an election pursuant to a request to the Industrial Registrar under s. 170 of the Act because, as the applicant's counsel said at the initial hearing, there is an alternative "... of requesting someone else who is prepared to consent to conduct the election ...". The scheme is in reality directed to bringing about changes to the rules which are quite fundamental, especially in their effect upon the structure of the union. The power conferred by s. 171D The critical question arising is whether this Court has power under s. 171D(2) to authorize those fundamental changes including the alteration of the rules by a committee which does not have the power under the present registered rules;, in other words to authorize that body to alter the rules in a manner that is not "in accordance with the ete et eer eee mee es .- earn 9. relevant procedures laid down by the (registered) rules". This is a matter which the Act treats as being of special importance and for which it makes special provision (s. 139(4)). Section 171D appears in Part 1X A of the Act which is headed "Validating Provisions for Organizations", and was introduced into the Act to enable the curing of invalidities which had occurred in one or more of a wide variety of ways. The word "invalidity", as defined in s. 171A, includes a wide field of invalidities "caused by the fact that" any one of seven different "facts" has occurred, one of which is "the purported alteration of the rules" by "persons ... who were not entitled to do so ..". However, the definition does not refer to any "invalidity ... caused by the fact that" the organization's registered rules contravene s. 140(1) of the Act ~ which is, as mentioned earlier, the essential reason for the present application. It will also be noted that s. 171C gives the Court power, inter alia, to rectify "an invalidity (that) has occurred in ... the making or alteration of the rules" but does not give any power to rectify the organization's rules to the extent that they contravene s. 140(1) of the Act. In my opinion the Act does not intend that s. 171D provide a remedy for the problems resulting from the fact that the registered rules of an organization contravene s. ee tr en ee ee ee 10. 140(1). The existence of such contraventions of s. 140(1) and the action which must be taken in certain circumstances is a matter for which s. 140 itself makes special provision. Section 140(2) permits applications to the Court for declarations in respect of rules which contravene s. 140(1). Where such a declaration has been made, s. 140(7) requires action to be taken by the Industrial Registrar - so as to "pring them into conformity with" the requirements of s. 140(1) "as regards the matters that gave rise to the declaration" - if the union has failed to amend the rules. In my opinion the problems arising from rules which contravene s. 140(1) are problems for which s. 140 itself makes special provision and action designed to overcome those problems is not a matter which falls within the general provisions of s. 171D relating to the quite different problems arising when parts of an organization have ceased to exist or to function effectively. The Court's power under s. 171D(2) is a power carefully delineated by the section as being a power to approve a scheme "for the taking of action" directed towards certain objectives. It is not a power to approve every scheme which may be described in very general terms as a scheme for the reconstitution of a collective body. Further, the power conferred upon the Court by s. 171D is specifically directed to making declarations and il. orders in respect of "a part" of an organization. Doubtless an application may, as in the present case, relate to several parts, but in my opinion the word "part" in s. L71D is not intended to include a case where, as here, the union, because of the extent to which the rules as a whole contravene s.140, has not functioned at all at a Federal level since a time which the applicant described as being "well before" he became a member in 1947. Parenthetically it may be observed that s. 171D does not expressly provide that it applies to a case where the declaration sought relates to a part of the organization which ceased to exist at a time before the date of commencement of the section. By contrast, s. 171C(3), which, being ian Part 1X A of the Act, came into operation at the same time as s. 171D, expressly provides that the section applies "to an invalidity whenever occurring, including an invalidity occurring before the date of commencement of this section; similarly, s. 171F(3) provides that this "section extends to an act, election, ... done or occurring before the commencement of this section". It may be that the absence from s. 171D of words similar to those used in s. 171¢C(3)(a) and 171F(3)(a) is not significant and is explicable on the basis that the matters being dealt with by s. 171D are of a different nature from those dealt with by those sections. However, as the Court has not heard any argument on this aspect, I prefer not to express any opinion on that question. ics -— eee ee te ee mote meee OOTY Eee eR RPO ine Aree aie te ae on oie tae Beene Aa ae ne en a ee i ee er ee ee eee 12. In my opinion s. 171D, in giving the Court "jurisdiction .. to make a declaration" and power to "approve a scheme for the taking of action ... by an officer ..." (or, for that matter, by a collective body) does not confer upon the Court the power to authorize the making of any alterations to the registered rules by a body which, as a matter of law, otherwise lacks the power to make those alterations. The Court may approve a scheme for the taking of action that is not in accordance with the rules, which action "has effect notwithstanding anything in the rules" (s. 171D(5)); that action may depart from the rules but the scheme can not alter the rules or authorize alterations to those rules which would otherwise be unauthorized. Section 171D(7) provides that, in relation to a scheme which "will involve provision for an election" for an office, "the Court shall not", in the circumstances there set out, approve "a scheme that departs from the provisions of those rules to a greater extent than the Court is satisfied is necessary having regard to the requirements of this Act". Having regard to that express statutory direction to the Court in s. 171D(7), it would be strange if other sub-sections in s. 171D gave the Court the power to authorize rule changes to be made by a body lacking the power under the TA meee ne een ee ee eee —-_—— eee oe a -- 13. registered rules to do so or gave the Court the power to give its approval in advance to the terms of proposed amendments to rules. Section 171D(5) itself is not consistent with the Court having power to alter the rules or to authorize some committee to alter the rules; the word "notwithstanding", in my opinion, necessarily implies that the rules are not to be altered in any way - even on an interim basis as part of a scheme. Section 171D(7) reinforces the implication in s. 171D(5) that the rules are not to be altered. In my opinion the power to approve a scheme for the taking of action is intended to overcome a particular problem that has occurred in respect of a part (or parts) of the organization and to enable that action despite the rules - but not to permit action which alters the rules. The section is not intended to give the Court power to authorize rule changes as part of its approval of a_ scheme. The present scheme seeks to effect changes which will continue to affect the way in which the union will operate, including the manner in which, and the body by which, further alterations to the rules in the future would be made. It has not been contended that the present rule as to the manner of altering the registered rules contravenes Regulation 115(1)(d)(x1v) by reason of the fact that it requires the rule-making process to commence with a petition Bt mm er ren 14. from a branch. If a challenge to the rule-making power were made under s. 140 it is possible that such a contention could be put to the Court. Accordingly, I do not wish to express any opinion on that question in these proceedings in which the Court has not heard any submissions either in support of the contention or to the contrary - as would occur in any contested proceedings under s. 140. However, I point out that it is certainly not obvious that a contravention of s. 140(1L) of the Act occurs if a rule provides for the rule-making process to commence with a petition from a branch. The philosophy of amendments to the rules of an organization having "a basis in the membership itself" was referred to by the Full Court in Roots v Mutton (1978) 32 F.L.R.- 15 where J.B. Sweeney, Evatt and Deane JJ. (at 19) said :- "Quite apart from the above considerations, there is a more fundamental reason for construing the procedural requirements contained in sub-clli. (2), (3) and (4) of r. 28 as mandatory rather than directory. Underlying these provisions is the obvious philosophy that, apart from the case where amendment is necessary to comply with legislative requirements, amendments to the rules of the union should have a basis in the membership itself." On the previous page the Full Court had said :- "The rules of the union comprise the compact between its members. In the absence of legislative provision to the contrary, there is no inherent power in the union to alter or amend its rules except possibly where the alteration or amendment 1s = we ee ee ee ee 15. made with the agreement of all its members. Any power to alter them must, in the absence of legislative authority (and there 1s none), be found in the rules themselves." The latter passage was quoted with approval by J.B. Sweeney, Evatt and Northrop Jd. in Kayne v Banks (1978) 22 A.L.R. 255 at 260. In considering the Court's power to grant the application, regard must be had to the overall scheme of the Act which permits and governs the union's registration and the Conciliation and Arbitration regulations which prescribe the conditions to be complied with by organizations. As the Full Court said in McLeish v Faure (1979) 25 A.L.R. 403 at 408 :- o "The existence of organizations and of rules of organizations are dependent entirely upon the Act and in the absence of some reason for intervention, the special procedures laid down by the Act as a condition precedent to an alteration to rules of an organization coming into effect should be allowed to take their course and should not be displaced by the Federal Court making orders concerning the respective rights of parties under the Act: cf. Forster v Jododex Aust. Pty. Ltd. (1972) 127 C.L.R. 421, per Walsh J. at 427-8;" The union is required to have rules providing for "the alteration of its rules" (Regulation 115(1)(d)(xiv)). The Act itself provides that any alteration to the rules "does not have effect until ... the Registrar has certified that, in his opinion, the alteration ... has been made in Po tet ee ie en re ee ~~ - - -+ - wean - a ee ee ee - 16. accordance with the relevant procedures laid down by tlie rules of the organization" (s. 139(4)). It is of some significance, in my opinion, that, in the circumstances specified in s. 140(7) where the Court has made a declaration as to the rules of an organization, the Act expressly confers upon the Industrial Registrar the power to draft alterations to the rules and to then "register the alterations so determined by him" and imposes upon him the duty to exercise that power. The power to alter the registered rules of an organization is also expressly conferred upon the Industrial Registrar in the circumstances set out in s. 133(4), in s. 133(4A), in s. 133(4D), in s. 133B(4) and again in s. 142A(10). In each case the Act expressly directs that the "Industrial Registrar shall register the alterations determined by him" (s. 133(5), s. 133B(5) and s. 142A(11)). (cp. s. 142A(2)(b) which confers upon the Australian Conciliation and Arbitration Commission the power to make an order directing an organization to alter its rules for the purpose there stated). The powers conferred upon the Industrial Registrar may be contrasted with the powers given to the Court. The Act does not confer upon this Court under s. 171D - or under s. 140 - any power to alter registered rules. It cannot be suggested that Parliament in enacting s. 171D overlooked the matter or that it intended to confer such power by OO eee ee ee yee eee - - - - oe ee a te Wate own mmnees eee eee i) 17. implication. The 1974 amendments to Lhe Act, which inserted s. 171D together with the other sections in Part 1X A of the Act, were based upon the Report to the Attorney-General made by J.B. Sweeney J.. Section 171D is very substantially based upon the draft amendments to the Act set out in that Report which expressly recommended that the Act should give the Court power to :- "alter the rules of the organization or branch in such manner as it thinks fit to enable the action specified in the order to be taken". However, instead of conferring that power upon the Court, the Act provided that :- "(5). An order or direction of the Court under this section, and any action taken in accordance with such an order or direction, has effect notwithstanding anything in the rules of the organization or of a branch of the organization." In so providing Parliament deliberately rejected that specific recommendation made by J.B. Sweeney J. that the Court be given power to alter the registered rules. Accordingly, it is clear that s. 171D does not confer upon the Court the power to alter the registered rules of an organization. In my opinion it is also clear that it does not confer upon the Court the power to authorize a collective body (which does not otherwise have the power) to alter those rules. 18, Further, in my opinion, s. 171D does not confer upon the Court the power to "approve in advance" the contents of alterations to rules proposed to be made later by a collective body, even in a case where that collective body already has, under the registered rules, the power to alter the rules - unlike the present case. In his endeavour to effect the fundamental changes which are sought, the applicant has been constrained to incorporate particular provisions in the scheme which, in my opinion, are plainly not within the power of the Court to approve under s. 171D(2). As I have already said the scheme must be one for the taking of action by an officer. On a narrow interpretation of the word "action" in s. 171D(2) the only "action" under the scheme to be taken by an officer is that described in paragraph 3(a) of the draft order, as follows :- "within twenty-one days after the date hereof the Applicant on behalf of the Committee of Management of the Organization, in writing, request the Industrial Registrar that elections be conducted to fill the following offices ...". But in.my view it is proper to treat all those matters which are reasonably incidental to the taking of the action so ee ee epee we re ee ee ree eee -e es ee eel ee eee ee meee wre ene cr Re ee nn ee ee ee ee : ~~ - — - 19. identified as falling within the expression "the taking of action ... by an officer". For example it would be permissible to incorporate in a scheme provisions dealing with the appointment of an appropriate person to act as returning officer and his duties. However, in my opinion, a number of the provisions in the scheme cannot be regarded as falling within the meaning I have attributed to the expression "the taking of action ... by an officer". In particular, provisions in a scheme which purport to prescribe the manner in which a collective body reconstituted under a scheme will conduct itself after its reconstitution are outside the meaning of the expression "the taking of action ... by an officer". Sub-paragraphs 3(g)(i) and 3(h) of the proposed scheme are provisions which in my opinion fall within that category. Similarly, provisions which purport to confer on a reconstituted collective body powers which that collective body does not possess under the registered rules cannot be said to be the "taking of action ... by an officer". Sub-paragraphs 3(g)(ii), (iii), (iv), (v) and (vi) of the scheme are to that effect. In my opinion, the expression "the taking of action «e. by an officer" in s. 171D(2), read in context, does not contemplate the inclusion in a scheme, of provisions which amount to legal fictions, simply to accommodate an pee 20. applicanl's wish to proceed with a certain course not otherwise available to him in law, nor does it empower the Court to approve them. Paragraphs 3(a) and 3(3) of the scheme, which are what may be described as deeming clauses, are instances of such provisions :- 3(a) "... the following offices or positions -». Assistant Secretary, Organizer and Federal Councillors and such offices and positions be deemed to be offices and positions in the organization for the . purposes of section 170 ..." of the Act. 3(j) "Rules made by the Federal Committee of Management as aforesaid shall be deemed to have been made by the authorised rule making body of the Organization in accordance with the relevant procedures laid down by the Rules of the Organization". Both clauses amount to a mere assertion as to the legal effect of steps contemplated by the scheme. Such assertions are not, in my opinion, the "taking of action ... by an officer" within the meaning of s. 171D(2). ry 21. Further, in my opinion, s. 171D, construed as a whole and in particular context of Part IX A of the Act, is not intended to confer upon the Court power to approve a scheme in so far as it includes deeming clauses. Section 171D(5) lends substantial support for the opinion which I have just expressed. In that sub-section (which is set out earlier) the legislature has expressly addressed itself to the question of the legal effect of "any action taken ..." and has provided that such action "has effect notwithstanding anything in the rules". If the legislature had intended that any such action taken was to have effect notwithstanding 'anything in the Act - as distinct from "anything in the rules" - it would have inserted in s. 171D(5) the words "or in the Act". Instead the legislative declaration as to the effect of any action taken is plainly limited to the express provision in the statute, namely, that the "action taken .. has effect notwithstanding anything i1n the rules of the organization". Although the present application does not call in aid the Court's separate power under s. 171D(4) to give ancillary or consequential directions after any order has been made, I should add that in my opinion s. 171D(4) does not confer upon the Court a power to approve of deeming clauses or to give any directions which would have the same tte ee ne er ee ee ee ee eee --- - we nt ree ere ee 22. effect as deeming clauses. It will he noted that the power under s. 171D(4) is a power to give "directions" - a word that is not appropriate to encompass deeming clauses. The inclusion of the deeming clauses in the scheme is rather an attempt by the applicant to declare - without any authority to do so but with a view to obtaining the approval of the Court ~ that certain parts of the action to be taken shall be deemed to have "effect notwithstanding" certain provisions in the Act i.e. in s. 170 and s. 139. The making of such a declaration should be compared and contrasted with the expressly limited provision in s. 171D(5) set out above. In my opinion the section does not confer upon the Court the power to give such approval. During the hearing it was submitted by Dr. Jessup, of counsel, on behalf of the Industrial Registrar, that a deeming provision is not unusual in Court orders and reference was made to orders for substituted service of documents under the Bankruptcy Act 1966. However, the existence of a power in the Court to make such an order under a different statute does not give any support to the submission that the Court under s. 171D of the Act has power to approve a scheme in so far as it contains deeming clauses. Even if s- 171D conferred upon the Court a power to approve a deeming provision in a scheme in some Te ee ee ee eee _ - - -- > ae ee ee ree 23. circumstances, there is, in my opaniou, a quite fundamental reason why such a power does not as a matter of law extend to the approval of those parts of the scheme which "deem" the two particular matters included in paragraphs 3(a) and (j) of the scheme. Each of those two proposed "deeming" clauses involves an interference with the performance of a duty imposed by the Act upon the Industrial Registrar. In my opinion s. 171D(2) of the Act, read in the light of the express provisions of s. 171D(5) and s. 171D(7), (to which earlier reference has beeri made), does not confer upon this Court power to approve that part of a scheme which interferes with the performance of those duties. I have reached that conclusion notwithstanding the submissions to the contrary put to the Court by Dr. Jessup. On this aspect it 1s convenient to deal first with clause 3(3) of the scheme which interferes with the Industrial Registrar's statutory duty under s. 139(4). Both the intent and the extent of this proposed interference by the Court was made plain when Mr. Gray frankly informed the Full Court that, in the absence of such a provision, "the Industrial Registrar would be bound to say that he could not satisfy himself that the rules had been made in accordance with the relevant procedures laid down by the rules of the organization.". 24, Dr. Jessup supported the approval of that part of the scheme and said that his instructions were that, if the Court approved that deeming provision, then the Industrial Registrar would "form the appropriate opinion" under s. 139(4). Notwithstanding that statement as to what the present occupant of the office of Industrial Registrar would do, the Court must consider the question of its power in relation to the duty imposed by the statute upon the holder of that office. In my opinion, the Industrial Registrar, even if informed of an order under s. 171D approving paragraph 3(j) of the scheme, would still be under a statutory duty to consider the documents "filed in the office of the (Industrial) Registrar", to form an opinion as to whether "the alteration (of the rules) ... has been made in accordance with the relevant procedures laid down by the rules of the organization", and to certify as to that opinion. It is difficult to see how he could form the opinion that the alteration had been so made, and how he could certify to that opinion, in circumstances where the facts put before him would show that the alterations to the rules had not been "made in accordance with the relevant procedures laid down by the organization". In Kayne v Banks (supra) J.B. Sweeney, Evatt and Northrop JJ. (at 257) referred to defects in the validity of rules which had arisen from "the failure to follow the relevant procedures" in altering the rules and emphasized the importance of the 1977 amendment to s. 139(4) of the Act, saying :- . pert ern te ee eee -- ee ee eo ren os re ee ee Seer ere re eee a 25. "This statutory requirement should be of great assistance in ensuring that an aliteration to the rules of an organization does not come into effect unless the relevant procedures have been followed." In my opinion, the Court has no power to approve of the "deeming" provision proposed in clause 3(j) of the draft order because s. 139(4) imposes upon the Industrial Registrar a statutory duty to decide whether certain alterations of the rules of the union have "been made in accordance with the relevant procedures laid down by the rules of the organization". That is a matter which the Industrial Registrar must "consider and form an opinion on". If he forms the necessary opinion he must certify as to that opinion. That duty was referred to in McLeish v Faure, (supra, at 408), where J.B. Sweeney, Evatt and Northrop JJ. said :- "The duties of the Registrar are clear, he must consider and form an opinion on whether "the alteration complies with and 1s not contrary to the provisions of this Act, of the Regulations or of an Award and is not otherwise contrary to law". In addition, since 21 October 1977, the Registrar has had to consider and form an opinion on whether the alteration "has been made in accordance with the relevant procedures laid down by the rules of the organization": cf. Kayne v Banks (1978) 22 A.L.-R. 255 at 257." That dictum of the Full Court immediately followed the passage quoted earlier in these reasons. Although in the 26. particular circumstances of that case the Full Court made a declaration, it said (at 417) :- "It is stressed that by expressing the above views the court is not to be seen as usurping the discretionary power granted to the Registrar under S. 139(4). Whether the Registrar refuses to grant a certificate in respect of any amendments to the rules which are lodged for certification 1s a matter solely for his determination." Clause 3(a) of the draft order also interferes with the statutory duty of the Industrial Registrar - the duty under s. 170(4). For reasons similar to those given in dealing with clause 3(j), in my opinion, the Court has no power to approve of the "deeming" provision proposed in clause 3(a) of the draft order. Section 170(4) imposes upon the Industrial Registrar a statutory duty to "... decide whether or not the request has been duly made". That duty necessarily involves deciding whether the request is in respect of "an election for an office in the organization eee" (Ss. 170(1)). It may be noted that another difficulty with this part of the scheme is that the applicant could not make the request to the Industrial Registrar on his own behalf - because of the terms of s. 170. Nor could he make that request in writing "on behalf of the Committee of Management of the Organization" - because no such Committee is in existence. -—-~ we eww ewe + - --— 27. A further difficulty with the present scheme arises from the fact that the "action" to be taken under a scheme "for the reconstitution of ... the collective body", must be action taken in respect of a collective body which has been the subject of a declaration by the Court under s.171D(1){a), as the word "the" plainly refers back to that collective body. Similarly the "action" to be taken under the scheme "for the filling of the office ..." must be action taken for the filling of an office which has been declared by the Court under s.171D(1)(b) to be vacant. The collective body referred to in the scheme as the (proposed) Federal Committee of Management is different from any collective body referred to in the existing registered rules (a) in its powers, (b) in its constitution (c) in the method of its election and (d) in the place it occupies in the hierarchy in the organization: as to the latter the present rules provide for the Federal Executive to appoint a Federal Committee of Management which is to inciude "such delegates ... from the Branches as the Federal Executive may from time to time determine" - hence that Committee of Management is plainly a body subordinate to the Federal Executive under the existing rules. Because of these differences, the proposed new Federal Committee of Management ue wom em - — - « ose eee eee ee mee ee ee a we ee 28. could not be regarded as being, in a reconstituted form, any collective body provided for by the present rules or within the meaning of s. 171D. Parts of sub-paragraphs 3(a) and (b)(i) of the scheme for the taking of action are directed to the creation of two entirely new offices, one being Assistant Secretary and the other being Organizer. Whilst the offices of Federal President, Federal Vice-President, Federal Treasurer and General Secretary are offices in respect of which a declaration under s. 171D(1){(b) as sought (and are offices which exist under the registered rules), no such declaration is sought ~- nor could it be - in respect of the offices of Assistant Secretary and Organizer. In my opinion the Court has no power to approve a scheme for the holding of elections for those two new offices. The "reconstitution" of the Federal Committee of Management can not add to the membership of that Committee the two offices proposed to be created by the scheme. I may add that the scheme does not define in any way the duties of the "office" of Organizer, and it follows that there are no facts which the Court can examine with a view to determining whether the proposed Organizer would hold an "office" as defined in s. 4 of the Act. In what is essentially another deeming clause, although it does not use the word deemed, the scheme in paragraph (f)(ii) asserts that 29. "the officers ... be and constitute the Federal Committee of Management". However, that assertion on its face only applies "on the completion of the elections" and accordingly, even if the other difficulties were overcome, does not even purport to make the proposed position of Organizer an "office" unt11l after the election has been completed. Sub-paragraph 3(g)(1ii) is directed to the creation of a new "Finance Committee" of the organization. For reasons similar to those given above the Covrt has no power to approve that part of the scheme. Certain matters affecting the Court's discretion Paragraph 3({i) of the scheme in the draft order enumerates the matters in respect of which the Federal Committee of Management may and in some cases shall exercise its power to make rules. The matters there specified are not designed only to eliminate any contraventions of the Act in the rules of the union. By their particularity, those matters clearly anticipate rules containing the same changed structure which the applicant has put forward in the earlier parts of the scheme as if they were merely interim measures. Even if it had the power, in my opinion it would be quite wrong in principle for the Court to "approve in advance" the making of any particular rules, which anticipate SN pe rere oe eee owe tere me wee ee 30. a particular structure, by a body which (unlike the present case) is authorized to make them. I say that because the Court may be called upon to exercise the jurisdiction conferred on it by s. 140(5E) of the Act, to determine whether one or more of the rules so "approved in advance" contravenes s. 140(1) and to make appropriate declarations. In proceedings under s. 140(5E) any challenge to the rules would be likely to be supported by facts and submissions not presently before the Court. The Court, in the exercise of its judicial discretion under s. 171D, should refuse to make any order which might embarrass the Court in the proper exercise of its jurisdiction in subsequent proceedings under s. 140. Mr. Gray made it clear in the present hearing that the applicant is concerned that the proposed rule amendments might be challenged by a member under s. 140 in subsequent proceedings unless the Court's approval in advance is given to the fundamental changes, including the abolition of the branches and the abolition of the requirement under the existing registered rules that any alterations to those rules must be commenced by petition by a branch. He said :- "I will be asking the court to in effect give the rule-making body permission to abolish the branches 31. because there may be difficulties within the rules if the branches are to be abolished wathout such permission of the court." He later explained what he meant by "difficulties" in abolishing the branches, saying :- "One of the reasons that an express power to abolish branches is desirable is that rule 33 of the Vactoria-Tasmanian branch rules provides : 'The branch shall not be dissolved so long as thirty or more financial members are on the Register of membership. ' And there may be (a) question as to the power to abolish branches." That statement confirmed what Mr. Gray had said at the earlier hearing :- "Then if the court has said that this is an appropriate way to do it, no difficulty will be caused by anybody saying, but you are abolishing a branch, you are taking away the federal structure and so forth. That is the reason that lies behind the full nature of the scheme." It is true that, if the Court were to approve in advance the abolition of the branches and the fundamental change in the method of altering rules, members of the Union would still have a right to insti1tute proceedings under s. 140 to challenge the proposed amendments. However, plainly the present scheme is designed to ensure that such a challenge has virtually no prospect of success by persuading SN ee oe ne ere ee - a0 32. this Court - in the absence of any opposition ~- to make an order under s. 171D "to in effect give the rule-making body permission" to abolish the branches (as Mr. Gray expressed it). The applicant sought to attach some significance to the fact that the present application under s. 171D is not opposed. I should say immediately that it does not seem to me to be a self-evident truth that members of the union (or members of any other association) would normally read the legal notices in a newspaper; nor does there appear to me to . be a probability that any members who did happen to read the legal notice would feel impelled, either in the public interest or in their own private interest, to take the trouble, and incur the expense, involved in consulting solicitors with a view to opposing the scheme - even if they had been fully informed as to what was involved in the scheme. I also have doubts as to whether the method of distribution of the "broadsheet" was sufficient to bring the application to the attention of the members. However, in considering the lack of opposition to the application it should be noted that more than 80% of the total membership (the Victorian members) may well have been misled into believing that there was no need for them to even consider opposing the present application. I say that because the Branch publication (Nov/Dec 1982), which 33. contained a notice advertising these proceedings, also informed them, under a heading "Rule Changes" that "Members will be fully advised of any proposals and their endorsement sought before any of these proposed changes become finalized". On the evidence no such "endorsement" by the members was sought before these proceedings were heard and accordingly it seems that the Victorian members have been lulled into a false sense of security in respect of these proceedings. In saying that I have considered the evidence of the distribution of copies of a broadsheet amongst members of both branches, but the broadsheet, whilst referring to the power to alter the rules, did not give any notice of the fundamental change in the rule making power itself, proposed by the scheme. The scheme seeks to empower the proposed Federal Committee of Management to alter rules without any petition by a branch - as required by the registered rules. Perhaps it 1s not surprising that, as the passages quoted from the transcript show, the present application is avowedly intended to prevent any effective challenge under s. 140 by any member to the rule changes. As Mr. Gray said (in the passage quoted earlier) the proposed abolition of the branches might be challenged by reference to (inter alia) r. 33 of the registered rules of the Victcria~Tasmanian Branch ae eS —- -- -- me we ee ee ee eee eee ne Ye ae NE ee ay 34. which provides that "the Branch shall not be dissolved so long as thirty or more members are on the Register of members". Although the Act does not require a registered organization to have branches, it obviously attaches considerable importance to the role of branches, and, where they exist, to the rules relating to them. Thus, in s. 4, the word "office" is defined not only in relation to an organization but also in relation to a "branch of an organization". That definition is very important for many purposes under the Act. Branches are specifically referred to in s. 171D itself and in other sections in the Validating Provisions for Organizations contained in Part 1X A of the Act, namely, sections 171A, 171B, 171C, and I17I1F. The importance attached to the role of. branches is also illustrated by the many sections of the Act which expressly refer to "branches" e.g. ss. 132A, 133, 133A, 133B, 136A, 138, 140, 143, 144A, 152, 153, 153A, 153B, 155, 156, 158AAA, 158M, 158V, 159, 170, 170A, 171, 188 and 188A. Abolition of the branches would create difficulties not only under the registered rules for the two branches but also under the Federal Rules. Firstly, difficulties would arise as to the holding of the referendum provided for by Federal r. 21(b) which provides that :- me re ee re me ee 35. "Any two representatives from different States, instructed by their Branches at a Special Summoned Meeting, may demand a referendum of all members of the Federation upon any question ... The Branches shall distribute and collect the ballot slips and certify to their number for and against ...". Secondly, it is the branches which are to decide the amount of the entrance fee and the contribution (Federal r. 6(c)). Thirdly, the proposed abolition of all branches is difficult to reconcile with Federal r. 3 (the Objects rule) which provides that one of the objects is to establish branches in each State cf the Commonwealth. Fourthly, the proposed abolition of the branches must be considered in the light of Federal r. 14(c) which provides that :- "no industrial agreement shall be entered into unless its contents have been approved of by a Special Meeting of the Branch affected." In passing it may be observed that Regulation 115(1)(d)(vi) states that an organization's registered rules shall provide for "the mode in which industrial agreements ...may be executed by or on behalf of the" union. I have already referred to Federal r. 24 which requires that any alterations of the Federal Rules shall commence by a petition from a branch. I may add that there 36. are further references Lo branches in many of Lhe other Federal Rules of the union e.g. Federal Rules 4, 5(a), (c), (e), (g), (h), (1) (vii) and (1)(xiii), 7{a) and (g)(iii), 9, 11, 12(b) and (i), 13, 16, 17(c) and (d), 19(b) and 20. In my opinion, the Court should not, in its discretion, approve the scheme for the abolition of branches with the extensive rewriting of the rules of the union which would be necessary if the branches were abolished. The applicant is seeking to replace the existing branches with divisions which, incidentally, will apparently allow the Victorian members twenty delegates as against three or four delegates for South Australian members - depending upon the actual number of members in South Australia. No evidence has been led as to why it is necessary to create the divisions, which are simply based upon various area codes of the Australian Telecommunications Commission; nor does the evidence give sufficient information as to particular factors affecting the proposed divisions. The need to have regard to such "particular factors" was referred to by the Full Court in McLeish v Kane (1978) 36 FL.R. 80 where J.B. Sweeney, Evatt and Northrop JJ. (at 91) said :- "Our task as we see it is to have regard to rules and their reasonableness in the light of the manner they affect democratic control and the manner they may affect the viability of an organization. This is a task to which it is not possible to apply a formula. It will be necessary in many cases to look rs 37. at the history of the organization, to look at its composition and such factors as the area it may cover, distances, problems of communication and the like. Just as disparities in electorates are ailowed for particular factors, so there may well be disparities in the representation of branches based on particular factors." Even if it had the power, it would in my opinion be undesirable for the Court in the present proceedings, in which it has not heard the contrary view advanced and in which the applicant's case has not been subjected to the tests normally encountered in contested litigation, to express its "approval" of a rule determining the number of - Federal Councillors which the proposed new davisions of the union are to be entitled tc elect - an ""approval" which, as is pointed out earlier, might well embarrass the Court in determining the same question if proceedings are brought later by a member wishing to challenge the rule under s. 140. Elsewhere it has been pointed out that the present application similarly seeks to obtain the Court's approval to the creation of an additional committee (the Finance Committee), the creation of two new offices of Organizer and Assistant Secretary, and the provision that the incumbents of those two offices shall both become members of the Federal Committee of Management, on the completion of the elections, and, shortly thereafter, members of the Federal Executive and of the Finance Committee. It should be noted that the Finance Committee which the scheme seeks to create may have The eee ee ee mee ~ oe ee —-- eee eR OF eee Fee ne TH rere prredmeememe te ee ee a wt eee eR pe eae en ee ee ee 38. delegated to it all the powers and functions of the Federal Committee of Management other than the power to make and amend rules. In my opinion, the Court in the exercise of its judicial discretion should refuse to approve of these elements of the scheme on the ground that no evidence whatever has been led to establish the necessity for them. Lastly, the Court, in the exercise of its discretion, should not approve the scheme, in my opinion, because s. 140 gives a more appropriate remedy. The problems arising from the present state of the registered rules could -be the subject of an application by the present applicant under s. 140 in respect of various rules including, for example :- (a) the existing rule as to the method of electing the Federal Executive - on the ground that it breaches what the applicant called the principle relating to the relative size of representation of unequal branches, (b) the rules as a whole on the ground that they fail to provide for the alteration of the rules (as required by regulation 115(1)(d)(xiv)); the existing rules (by r. 24) confer the power to alter the rules upon the Federal Council, provided that a branch has petitioned it to do so, but the rules make no provision for either the constitution or the election of that wry pe nae 39. Federal Council, although il treguires thal a referendum be taken "if the Federal Council does not agree to such petition". The applicant, on the legal advice received by him, could expect such an application to result in a declaration by the Court under s. 140 in respect of those matters. The Act provides (s. 140(7)) that in those circumstances the Industrial Registrar shall determine such alterations of the rules as will, in his opinion, bring them into conformity with the requicements of the Act as regards those matters that gave rise to the declarations he is also required to register the alterations (s. 140(8)). Under those rules, as altered, being registered by the Industrial Registrar, an election for members of the Federal Executive could be held and the body given the power under those rules to alter the registered rules could then pursue the other objectives of the scheme. Perhaps I should add that the matters to which I have specifically referred are not intended to be an exhaustive list of all the matters dealt with in the scheme which, in my opinion, are either beyond the power of the Court to approve or are matters which the Court in the exercise of its discretion should refuse to approve. te ee en ee ee ee ee ee ae ee eee re 40. For the reasons given earlier I would dismiss the application for an order under s. 171D(2) on the ground that the Court has no power to make the order sought. I should add that, if I had reached the conclusion that the Court had such power, it would have been necessary to consider whether I could be satisfied "that the order would not do substantial injustice to the organization or to any member of the organization" (s. 171D(3)). In considering that aspect it would have been necessary to take into account the fact that, as stated earlier, the Victorian members may well have been led to believe that there was no need for them to even give consideration to opposing the present application and the possibility that the absence of opposition to the scheme was at least partly due to that fact. If, contrary to my opinion, the Court has power to make the order sought under s. 171D(2), and if I were satisfied that the order would not do substantial injustice to the union or to any of its members, then I would nonetheless refuse to make the order sought for the reasons given in dealing with the Court's discretion and would also refuse to make the declarations sought. The application should be dismissed. i " peer Posh Liat Pmety-ame (34) 0 wt ane ro beh . Keely Bonstelectiin— Yoyo tr 2b October 423 wee