anys ate shh aI CATCHWORDS Industrial law - construction of rules of registered organization - meaning of "eligible to hold" - whether Federal Secretary entitled to remain in office when no longer branch Secretary - Court's discretion in proceedings under s. 14i where delay by applicant - whether "holding over" clause contrary to s. 133(1)(db) or imposes conditions which are oppressive, unreasonable or unjust. DAVID SCOTT ALLSHORN v DAMIEN STAPLETON and OTHERS Conciliation and Arbitration Act 1904, ss. 133(1)(db), T40(i)(a), 140(1)(c) and 141 CORAM : KEELY J. DATE : 27 FEBRUARY, 1984 PLACE : MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) V No. 22 of 1983 ) : ) INDUSTRIAL DIVISION BETWEEN DAVID SCOTT ALLSHORN Applicant AND _DAMIEN STAPLETON, CLIFFORD JOHN FIELD, SIMON JENKINS, JOHN WILLIAM SMITH, PETER HULL, HEC. WHITE, ELIZABETH BRYAN, REGINALD STARR, HARRY BLUCK, ROBERT CAKEBREAD, EDWARD GOLDSWORTHY, WYNNE WILSON, DENTS SHELVERTON and THE AUSTRALIAN THEATRICAL AND AMUSEMENT EMPLOYEES ASSOCIATION Respondents 27 February, 1984 KEELY J. ORDERS 1. The application for thé rule to show cause to be enlarged is refused. 2. The rule to show cause, granted on 19 July, 1983, is discharged. 3. Liberty 1s reserved to the respondents to have the ee eke a ee ne ot ie Oe ee matter re-listed for the purpose of hearing submissions as to costs. XL pmo nse em mes cee - x on eee sane meee tenant Lee ata Na ates mer atelier nae ate me ee Law ae ne de eR at aed el ae tee Raine ent steed a ane 2 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY INDUSTRIAL DIVISION BETWEEN 27 February, 1984 ) ) ) V No. 22 of 1983 ) ) DAVID SCOTT ALLSHORN Applicant DAMIEN STAPLETON, CLIFFORD JOHN FIELD, SIMON JENKINS, JOHN WILLIAM SMITH, PETER HULL, HEC. WHITE, ELIZABETH BRYAN, REGINALD STARR, HARRY BLUCK, ROBERT CAKEBREAD, EDWARD GOLDSWORTHY, WYNNE WILSON, DENIS SHELVERTON and THE AUSTRALIAN THEATRICAL AND AMUSEMENT EMPLOYEES ASSOCIATION Respondents KEELY J. REASONS FOR JUDGMENT Orders were made under s. 140 and s. 141 of the Conciliation and Arbitration Act 1904 (the Act) calling upon the respondents to show cause why orders should not be made that :- l. The firstnamed respondent, Damien Stapleton, cease to hold himself out as Federal Secretary of The Australian Theatrical and Amusement Employees Association (the organization). ne ee ed eee ew we ee ee aed Sener Ae et ke te 2. 2. The respondents, other than the firstnamed and the lastnamed respondents, cease and refrain from treating or recognizing the firstnamed respondent as Federal Secretary of the organization. 3. The respondents, other than the firstnamed and the lastnamed respondents, cause to be conducted an election for the position of Federal Secretary of the organization. 4. Rule 18 of the rules of the organization contravenes s. 140(1)(a) and s. 140(1)(c) of the Act. Mr. Brian Lawrence appeared on behalf of the applicant and Mr. A.J. Macken on behalf of the respondents Stapleton, White, Bryan, Bluck, Cakebread, Goldsworthy, Wilson, Shelverton and the organization to oppose the making of the orders. The respondents Field and Smith appeared in person at a preliminary hearing before Woodward J. and admitted that they had been served with the documents in those proceedings; neither of them entered a formal appearance or sought to advance any opposition to the making of the orders sought. At the commencement of the hearing the respondent Hull told the Court that he did not oppose the making of the orders 'sought. The applicant agreed that the respondent Starr was ill and had not been served with the documents. There was a statement from the Bar table as to ast 3. - service upon the respondent Jenkins but no evidence was tendered that he had been served with the documents in these proceedings and no appearance was entered on his behalf. In the light of the foregoing no order could properly be made against the respondents Jenkins and Starr. On the evidence the applicant is a member of the organization. The respondents for whom Mr. Macken appeared admitted that :- l. The organization ius an organization of employees registered under the Act. 2. Each of them (other than the lastnamed respondent) was and is a member of the organization and a member of the Federal Council and is under a duty to perform and observe the rules of the organization. 3. The respondent Stapleton was declared to have been elected to the position of Federal Secretary of the organization 1n November 1978, since which date no further election for that position has taken place. 4. The respondent Stapleton has at all material times continued to hold himself out as being ee er er ee cet ett ee Federal Secretary. TN een women cer tete ee ee cron te ey Ne -- - - - - were et -- ee neers re re es 9 a ne katt Nene het a ee 4, 5. In February 1982 an election was held under s. 170 of the Act for various positions in the New South Wales Branch of the organization and at the declaration of the poll, on 24 February, 1982, the respondent Jenkins was declared elected to the position of Secretary of that Branch. It wage common ground that the hearing of an application under the Act for an inquiry into the election for the office of New South Wales branch secretary (inter alia) began in this Court in March 1982. When the applicant commenced the present proceedings on 19 July, 1983 no final orders had been made in that inquiry. On 31 August, 1983 reasons for 'judgment were delivered by Evatt J. who later heard further argument as to the form of the orders to be made and made certain orders on 30 September, 1983, i.e. on the day after the completion of the hearing in the present matters. Pursuant to leave reserved, a joint minute by Mr. Lawrence and Mr. Macken, dated 4 October, 1983, enclosed a transcript of both the orders pronounced and the observations made by Evatt J. on 30 September, 1983, which included the following passages :- "HIS HONOUR: On 31 August last the Court found that irregularities had occurred in the 1982 elections for the office of president, vice-president, secretary/treasurer ... of the (N.S.W. branch of the organization) and that having regard to those irregularities the result of the said election may FO ene ery re mee een ee er ee a woe - — wa pee ow 5. have been affected ... The Court being firmly of the view that it 1s necessary that any such election should if at all possible be synchronized with elections throughout the various branches of the organization and elections for the filling of federal offices ... makes the following orders in matter No 9A of 1982: 1. The Court determines that irregularities have occurred in the 1982 election for the offices of the New South Wales branch of the (organization) being an election for the offices of president, vice-president, secretary/treasurer, ry assistant secretary and 12 executive members. 2. The Court orders that a new election be held pursuant to section 165A of (the Act) for all offices ... and directs ... the following scheme and timetable : (a) In the week commencing 23 April 1984 the returning officer shall cause to be circulated to all members cee a notice in accordance with rule 42A(b)(1i) of the rules of the organization. (b) On 8 June 1984 an advertisement be placed in the Sydney Morning Herald and the Daily Telegraph inviting nominations for the said offices ... {c) Nominations to open on 29 June 1984. (d) Nominations to close on 20 July 1984. (e) The ballot where commencing to commence on 10 August 1984. (f) The ballot to conclude on 31 August 1984. were er ee ren 6 oye ot oe 6. 4. The Court orders that until the new election is concluded each of the persons elected to the respective effices of ... secretary ... shall each hold his or her respective office and shall be deemed for ail purposes to have held such office in the New South Wales branch of the oranization since 24 February 1982 6. Liberty granted to any party to apply on seven days notice to the Court and to the other parties to the proceedings." Because those orders had not been pronounced at the completion of the present hearing, leave was reserved to Mr. Lawrence and Mr. Macken to make written submissions; those were filed on 14 and 17 October, 1983 respectively. In early December 1983 the applicant's solicitor informed the Court that he desired to adduce further evidence as to when an election would be held in the South Australian branch for the position of Branch Secretary - a matter which had been referred to during the hearing and again in the applicant's written submissions. He was informed that, if the respondents for whom Mr. Macken appeared consented, the further evidence could be forwarded to the Court and by letter, dated 7 February, 1984, forwarded to the Court the following information :- ee ee Mae a Nate On rer Earn ee eee et dren 7. "We are now able to advise that the Australian Electoral Office will be conducting the election for the South Australian Secretary's position and schedule for the election 1s as follows :- Notification to Members 23/4/84 Opening of Nominations 29/6/84 Closing of Nominations 20/7/84 Opening of Ballot 10/8/84 Closing of Ballot 31/8/84" That information is accordingly before the Court - Mr. Macken having stated that his clients have no objection. From this information and from the orders made by Evatt J., set out earlier, it is clear that the elections for the positions of South Australian Branch Secretary and New South Wales Branch Secretary will not be completed before September 1984. Rule 18 of the organization, in respect of which an order is sought under s. 140, provides as follows :- "18. Federal Officers (a) The Federal Officers shall be the Federal President, Federal Vice-President, Federal Secretary. Such Officers shall be elected from the Federal Councillors by the national membership in accordance with Rule 42 of these Rules and shal] hold office for a period of three years from the date of declaration of the ballot provided that the incumbent Officer shall be deemed to remain in office until such declaration occurs. Only branch Secretaries shall be eligible to hold the position of Federal Secretary. *~ (b) Elections for Federal Officers shall take place ammediately following the declaration of state branch elections and the Returning Officer shall call for nominations for Federal Officers Ki ek ae wens tae eee a a te tee Ne ee at rete Cee Me ee eee men Pn me nem te 8. within twenty-one days of such declaration. Such election shall be conducted in accordance with Rule 42 of these Rules. (c) Only those members financia] at the date of calling for nominations and who were financial on the last day of the preceding quarter, shall be eligible to be included on the Roll of Voters for Federal elections." The applicant contended that r. 18 contravened both s. 140(1)(a) and s. 140(1)(c) of the Act in that it provided that the Federal Secretary and the other Federal officers there specified "shall be deemed to remain in office until such declaration" (of the ballot). Mr. Lawrence submitted that the rule contravened s. 140(1)(a) in that, by permitting what he described as an open-ended holding over, it was contrary to s. 133(1)(db), which required that the rules :- "(db) shall not permit a person to be elected to hold an office within the association or organization for a period exceeding 4 years without being re-elected." Considerable reliance was placed upon the words "shall not permit" appearing in that sub-clause. In my opinion the rules of the organization do not "permit a person to be elected to held an office ... for a period exceeding 4 years without being re-elected". Rule 18(a) permits a person to "hold office for a period of three years" and then goes on to provide that such an officer "shall be deemed to remain in office until such declaration = mrt ee ae ed ee face ee as 9. occurs". That rule does not in its terms contravene the prohibition contained in s. 133(1)(db) of the Act. The person is elected to "hold office for a period of three years" with a "holding over" provision that the "officer shall be deemed to remain in office" until the declaration of the ballot but in my opinion the inclusion of the "holding over" provision does not mean that the person is "elected" to hold office for that additional ("holding over") period of uncertain duration. It is the rule itself under which the officer is "deemed to remain in office" for a period longer than the "period of three years" prescribed by the rule for which he was elected "by the national membership in accordance with Rule 42". The existence of that deeming provision in r. 18(a) is itself a clear indication that the officer 1s not "elected" to hold the office for a period exceeding three years - and therefore not elected "for a period exceeding 4 years" within the meaning of s. 133(1)(db). The position would be different if it appeared, as a matter of construction of the rules as a whole, that such a deeming provision had been inserted in the rule for the purpose and with the effect of overcoming the prohibition in s. 133(1) (db). Having regard to the legislative policy enunciated in s. 133(1)(db) such a provision would doubtless contravene s. 140(1). However, it has not been suggested that the material part of r. 18(a) was inserted in the rules ew et et 10. for any such purpose and it is not unusual for the rules of organizations and other corporations to permit elected officers to hold office "until another is elected" - cf. Joske J. in McLure v Mitchell (1974) 24 F.L.R. 115 at 126-127. As to the applicant's contention in relation to s. 140(1)(c) of the Act, a rule does not necessarily contravene s. 140(1)(c) merely because it is capable of being misused in such a way as to operate unreasonably - see the observations of Dethridge C.J. in O'Sullivan v The Australian Workers Union (1938) 39 C.A.R. 323 at 325, cited by O'Mara J. in Hay v_ The Australian Workers Union (1944) 53 C.A.R. 674 and by Kelly Jd. in Bowden v The Australian Workers Union (1946) 56 C.A.R. 530 at 531. Doubtless some rules of many organizations could be misused. The remedy for any such misuse does not lie in the making of an order under s. 140 in respect of the rule itself, but in the making of an order under s. 141 giving directions for the performance or observance of the rules in such a manner as to prevent, or to overcome the effects of, any such misuse. In my opinion r. 18 does not contravene either s. 140(1)(a) or s. 140(1)(c) of the Act. Accordingly, the order sought in paragraph 4 of the rule to show cause is refused. nea nat ~ ae woe - -- - - - = bee Sake eee ll. As to paragraphs 1 and 2 of the rule to show cause, the applicant contended that the respondent Stapleton, being no longer a branch Secretary, is not eligible to be Federal Secretary of the organization because the last sentence of r. 18(a) provides that :- "Only branch Secretaries shall be eligible to hold the position of Federal Secretary." Mr. Lawrence submitted that that sentence imposed two limitations: that the Federal Secretary (1) must be a branch Secretary at the time of his election and (2) must continue to be a branch Secretary in order to be "eligible" to continue to hold the position of Federal Secretary. Mr. Macken, on the other hand, submitted that that sentence should be construed as imposing the first limitation only and not the second. Although the question of construction is one of some difficulty, I have come to the conclusion that the words "eligable to hold" are intended to apply only to the eligibility of a person to be elected to the position of Federal Secretary. In my opinion the words are not intended to require that the Federal Secretary, in order to remain "eligible", must continue to be a branch Secretary during the "period of three years" for which he has been elected and Rr ee ee ee nee ee ne - -- - -n - Peed mbites tutte dena nat wate one te ee pene 12. also for any further period during which he is "deemed to remain in office" by virtue of the express provisions of r. 18(a) itself. In his submissions Mr. Lawrence relied upon the draftsman's use of the words "eligible to hold" instead of the words "eligible to be elected to" (the position). Ina different context that submission might have greater weight although, irrespective of context, it would be necessary to bear in mind that the word used in r. 18(a) is "eligible" (to hold) and not the word "entitled" (to hold). The Shorter Oxford English Dictionary defines the word as : "Eligible : 1. Fit or proper to be chosen (for an office, etc.) 2. Subject to appointment by election 3. That deserves to be chosen; desirable, suitable b. That is a matter of choice. 4. quasi-sb. in pl. Eligible persons or things ..." In this connexion r. 18(a) may be compared with r. 9(b) (ii), which deals with members becoming unfinancial and the effect of that upon their rights as members, and uses the word "entitled" and not the word "eligible". It provides that an ""unfinancial member shall not be entitled to ... (ii) i ee te ee ee TE tee ee ee me em ee 13. hold any office in the Association". The draftsman has chosen in r. 18(a) to use the word "eligible" - instead of the word "entitled" used earlier in r. 9(b)(i1). In any event, the last sentence of r. 18(a) must be construed in the context of the rules generally and in particular the context of r. 18(a), the fvll terms of which have been set out earlier. That sub-rule is dealing with the election of Federal officers, specifies the Jength of the period of office and provides for them to be "deemed to remain in office until] the declaration" at the next election. If the words "eligible to hold the position" are equivocal and are capable of meaning either (1) "eligible to be elected to the position" or (2) "eligible to be elected to the position or to continue to hold the position", I consider that in their context they mean the former. One consequence of the meaning for which the applicant contends would be the loss of the office of Federal Secretary - whether automatically or otherwise ~ by a person who had been "eligible to hold" the office, and who had been elected Federal Secretary on that basis "from the Federal Councillors by the national membership" (r. 18(a)). The services of the Federal Secretary could be lost to the members constituting the "national membership" simply because he had ceased to be a branch Secretary. In my opinion if such a consequence had been intended the rule would have used express words making its meaning clear. In this connexion it should be noted that Si me el re mae ee - tem art 14, s. 133(1)(£) of the Act says "or has ceased, according to the rules of the organization, to be eligible to hold the office". The rules of the organization do not expressly refer to a person "ceasing" to be "eligible to hold the office" of Federal Secretary and, in my opinion, do not bear the meaning for which the applicant contends. On the construction of r. 18(a) for which the applicant contended a question would also arise as to whether the loss of the office of Federal Secretary would be automatic, occurring by operation of the rule immediately upon the Federal Secretary's loss of the office of branch Secretary, or would only occur upon the exercise by the Federal Council of its powers under the rules, including r. 12 and r. 38. Mr. Lawrence initially submitted that, on the proper construction of the rules, Mr. Stapleton automatically ceased to hold the position of Federal Secretary at the time when -he ceased to be New South Wales Branch Secretary. However, in the course of his submissions, he conceded that there were certain difficulties in the way of that submission and as an alternative submitted that the rules imposed upon the Federa] Council a duty to remove the respondent Stapleton from office as Federal Secretary when he was no longer a branch Secretary. Having regard to the opinion which I have expressed as to the construction of r. 18(a), it is not necessary to form an opinion as to those alternative at en oe Mee he re re ees onan Rte eS matte 15. submissions i.e. whether the loss of office for which the applicant contends would be automatic or would only occur after the Federal Council exercised its powers. For the reasons given the orders sought in paragraphs 1 and 2 of the rule to show cause must be refused. No separate argument was advanced in support of paragraph 3 of the rule to show cause and accordingly that order is also v refused. During his final address on 28 September, 1983, Mr. Lawrence applied for the rule to show cause to be enlarged by calling upon the respondents, other than the respondent Stapleton and the respondent organization, to show cause why additional orders should not be made that each of those respondents observe the rules of the organization by :- "(a) convening and holding an extraordinary meeting of the Federal Council of the Association (i.e. the organization) by 26th October 1983, (b) determining at that meeting whether or not Damien Stapleton is eligible to hold the office of Federal Secretary of the Association by determining whether or not he is a Branch Secretary of the Association and, if they find AeA ee stem Nd seme mg ee eee ee -- - - -s 95 wo --- yen te bane Vek un = aw ae aR et ak te ee Hee es eee at eee eee wees oa 16. that he is not a Branch Secretary, remove him from the office of Federal Secretary and cease and refrain from recognizing him as holding such office. (c) giving Damien Stapleton at least 14 days notice of the time and place for such Federal Council meeting and affording him an opportunity to be heard thereat. In the event that the Federal Council removes Damien Stapleton from the office of Federal Secretary of the Association, the aforesaid Respondents shall f111 the vacancy for the position of Federal Secretary in accordance with the rules of the Association." Mr. Macken did not oppose the application to enlarge the rule to show cause but made submissions as to the substance of the additional orders sought by -the applicant. The written submission by the applicant, filed 14 October, 1983, sought orders in somewhat different terms, including an order that the respondents (other than the firstnamed and lastnamed respondents) observe the rules of the organization by removing the respondent Stapleton "from the office of Federal Secretary" (cp. paragraph (b) of the enlargement of the rule to show cause sought by the applicant). wwe Sie ce ores pneeeen ener pre ene ete ne eee ee ne - —- - So eeeee . — wae me oye te Lee ee OS 17. Having regard to the opinion I have expressed as to the correct construction of the last sentence of r. 18(a), the matters sought to be raised by the proposed enlargement of the rule to show cause need not be determined in these proceedings and accordingly the application to enlarge the rule to show cause 1s refused. Had that application been granted it would have been necessary for notice to have been given to those respondents who had been served but who were not represented in these proceedings. As the question of the Court's discretion has been argued I should add that, even if I had accepted the applicant's submission as to the correct construction of the last sentence of r. 18(a), I would have upheld the submission put by Mr. Macken in his final address that the Court should, in the exercise of its discretion, refrain from making the orders sought. The Court has such a discretion (Cook v Crawford (1982) 43 ALR 83) although in my opinion it should only be exercised where the Court is satisfied that in the particular circumstances relief should be refused (see Magner v Fowler (1979) 26 ALR 671 at 703-706 and the cases there cited). Undue delay in bringing proceedings under s. 141 is one ground which has been accepted by the Court, and by the Courts which exercised the jurisdiction under a_ similar section at an earlier point of time, as a matter proper to be 18. taken into account in considering whether to refuse relief in a particular case. In the Commonwealth Industrial Court in Mayell v Waters (1967) 11 F.L.R. 316 at 322 Dunphy and Kerr JJ. said :- "It may well be that in the exercise of the judicial discretion granted under s. 141 to this Court there may be cases in which because of delay on the part of the claimant he will not be granted the relief to which he might otherwise have been entitled." o Earlier the Commonwealth Court of Conciliation and Arbitration in Williamson v The Federated Marine Stewards and Pantrymen's Association of Australia (Victorian Branch) and Others (1949) 65 C.A.R. 418 refused relief - Foster and Dunphy JJ. both referring to the fact that the applicant had allowed twelve months to elapse before commencing proceedings; see also Magner v Fowler (supra) at page 705. Even if the applicant's primary submissions had been upheld, in my opinion the .orders sought: under s. 141 should be refused because of the applicant's delay in instituting, in July 1983, the present proceedings in respect of the respondent Stapleton, who was first "deemed to remain in office" in November 1981. Mr. Macken's written submission, filed 17 October, 1983, also contended "that an election for Federal Secretary should not be precipitated unless all of the branch secretaries are able to contest that election", relying partly upon passages in the evidence of 19. the applicant. It has been noted earlier that the elections for the positions of South Australian Branch Secretary and New South Wales Branch Secretary will not be completed before September, 1984. In this connexion it may be noted that Evatt J. expressly referred, on 30 September, 1983, in the passages set out earlier, to his firm view "that it is necessary that any such election (i.e. in the New South Wales branch) should if at all possible be synchronized with elections throughout the various branches of the organization and elections for the filling of federal offices ..". (cp. r. 18(b) - set out earlier - providing that elections "for Federal officers shall take place immediately following the declaration of State branch elections and the Returning Offacer shall call for nominations ... within twenty-one days of such declaration"). The orders sought are refused and the rule to show cause, granted on 19 July, 1983, is discharged. As requested by Mr. Macken in his final address leave is granted for the Matter to be relisted in order to hear submissions as to costs. The grant of such leave is not intended to convey that the Court has formed a view that the applicant instituted the proceedings "without reasonable cause" within the meaning of s. 197A of that Act. eighteen (re >) LT Fabry ($8u