IN THE FEDERAL COURT OF AUSTRALIA INDUSTRIAL DIVISION No. V 24 of 1979 ee ee ee VICTORIA DISTRICT REGISTRY IN THE MATTER of the Conciliation & Arbitration Act, 1904 AND IN THE MATTER of an Application ; pursuant to section 171C of the said ' Act BETWEEN: THE PLUMBERS AND GASFITTERS EMPLOYEES' UNION OF AUSTRALIA, G. CRAWFORD, G.L. SMITH, R. FAIRWEATHER, R. HEVEY T. BOURKE and S. MUTTON Applicants and ROBERT ARTHUR COOK, ULRICH COLIN BIGNELL HAROLD SHOOTER, KENNETH LEWIS TYLER, 1 ROYCE LAWRENCE CUMMINS and GREGORY ' LAWRENCE WATERS Respondents ORDER JUDGE MAKING ORDER: EVATT J. DATE OF ORDER 15 JUNE 1984 WHERE MADE: SYDNEY On the facts before the Court including the facts as determined by the Court as presently constituted in matter No. 19 of 1979 (Cook & Ors. v. Crawford & Ors. ({1981) 52 F.L.R. 1), the Court is of the opinion that invalidaities have occurred in the making or alteration of the rules of the Plumbers and Gasfitters Employees' Union of Australia (the organization) and in the management or administration of the organization. Accordingly, the Court hereby determines and declares: (i) (11) That invalidities have occurred in the making or alterations of rr. 6 (3) and (4), 8, 13, 18, 19, 21, 21A, 22, 23, 24, 25, 26, 27, 29, 30, 31, 32, 33, 34, 35, 36, 42, 43, 47, 48, 48A, 48B, 48C, 51, 54, 55, 56, 56A, 59, 60, 65 and 67 as certified by the Industrial Registrar on 25 October 1978 by reason of non-compliance with the rules of the organization, and That invalidiaties have occurred in the management or administration of the organization being the resolutions dated 2 May 1979 of the Federal Executive of the organization - (a) To dismiss Ulrich Colin Bignell from the office of Branch Secretary of the Sydney Branch of the organization (the Branch), (b) To dismiss Harold Shooter from the office of Assistant Secretary of the Branch, {c) To dismiss Royce Lawrence Cummins, Kenneth Lewis Tyler and Gregory Lawrence Waters and each of them from the office of organizer for the Branch, (d) To expel the said Ulrich Colin Bignell, Harold Shooter, Royce Lawrence Cummins, Kenneth Lewis Tyler and Gregory Lawrence Waters and each of them from membership of the organization, by reason of the invalidity found to exist in the making or alterations of the aforesaid rules and in particular rr. 13 (6) and 35. AND the Court, being satisfied that the order herein made would not do substantial injustice to the organization or to any member or creditor of the organization or to any person having dealings with the organization, ORDERS THAT: (i1) The making or alterations of the aforesaid rules be, and the same are hereby validated, The aforesaid resolutions of the Federal Executive of the organization made on 2 May 1979 be, and the same are hereby validated IN THE FEDERAL COURT OF AUSTRALIA ) ) INDUSTRIAL DIVISION ) No. V 24 of 1979 ) ) VICTORIA DISTRICT REGISTRY IN THE MATTER of the Conciliation & Arbitration Act, 1904 AND IN THE MATTER of an Applacation pursuant to section 171C of the said Act BETWEEN : THE PLUMBERS AND GASFITTERS EMPLOYEES ' UNION OF AUSTRALIA, G. CRAWFORD, G.L. SMITH, R. FAIRWEATHER, R. HEVEY, T. BOURKE and S. MUTTON Applicants and ! ROBERT ARTHUR COOK, ULRICH COLIN BIGNELL; HAROLD SHOOTER, KENNETH LEWIS TYLER, ROYCE LAWRENCE CUMMINS and GREGORY LAWRENCE WATERS Respondents 15 June 1984 EVATT J. REASONS FOR JUDGMENT In August 1978 a specially convened meeting of the Federal Council of the Plumbers and Gasfitters Employees' Union of Australia, (the organization), an organization registered under the Conciliation and Arbitration Act 1904, (the Act), was held to consider and adopt several rule amendments. At that time the certified rule-amending rule of the organization was r 27 which read:- "27 (1) (2) (3) (4) (5) The Rules of the Union shail not be amended except on a resolution carried by a majority of the Council, Any member desiring to submit to the Council any proposal to amend the Rules must first submit such proposal to the meeting of his Branch specially convened for the purpose, If such proposal be approved by a majority of the members present at such meeting it shall be forwarded to the Head Office for submission to the Council, The General Secretary shall prepare an agenda of any such proposals and forward copies of same to all Branches, not less than six (6) weeks prior to the Council meetings to which such proposals are submitted, The Council may at any time make or amend any rules." Some of the rule amendments considered by the 1978 Council had been proposed by meetings of either the West Australian or the Melbourne branch of the organization; were redrafts of amendments made by the 1975 or 1977 Federal Council or were new amendments drafted after discussion by members of the Council. Thereafter the Solicitor for the organization drafted all the proposed amendments which were set out in a document labelled Document R. The Council then proceeded to vote on each amendment in Document R separately. (Document R is referred to in Cook & Ors v. Crawford & Ors. (1981) 52 F.L.R. 1 at pp 15 & 24.) After discussion numerous amendments to the rules were in fact adopted by that Council. These amendments were subsequently lodged by the General Secretary of the organization with the Industrial Registrar in accordance with the Regulations made under the Act for certification by the Registrar pursuant to s 139 (4) of the Act. The Registrar issued his certificate in respect of the said amendments on 25 October 1978. Rule 27 as set out above, particularly sub-r.(5), is to be contrasted with the earlier rule-amending rule of the organization (then r.28) which was considered by the Court in Roots v. Mutton (1978) 32 F.L.R.15. The earlier rule had been amended by the Federal Council in 1977 with the result that the rule had been re-numbered x. 27 and a new sub-r. (5) as set out above being ianserted. These and other amendments had been certified under s 139 (4) of the Act on 1 February 1978. On 1 and 2 May 1979 certain members of the Federal Executive, (the Executive), of the organization heard charges laid by a member of the organization against five other members who were at that time holders of certain offices within the Sydney Branch of the organization, (the Sydney Branch). These five officers also held similar offices in a New South Wales State Union then styled the "New South Wales Plumbers and Gasfitters Employees' Union." Such charges, said to be laid in accordance with the rules of the organization, claimed that the particular officers were guilty of gross misbehaviour as set out in the charges and called for penalties in accordance with the then certified rules. One of the said five officers was Kenneth Lewis Tyler. On 2 May 1979 the Executive found each of the five officers guilty as charged and determined that each be dismissed from his respective office or offices within the organization and expelled therefrom. Some of the rules relied upon as the basis for the said charges and for the penalties imposed were rules which had been adopted by the Federal Council at its 1978 special meeting. On 31 May 1979 an order-nisi (No. 19 of 1979) was granted pursuant to s 141 of the Act to Robert Arthur Cook the then Chairman of the Sydney Branch wherein orders were sought that the named respondents therein, being members of the Federal Council and Federal Executive, perform and observe the rules of the organization in certain respects and recognize the five dismissed and expelled officers of the Branch as Branch officers. Those proceedings were determined by the Court as presently constituted, on 4 March 1981, the order-nisi being discharged (Cook & Ors. v. Crawford & Ors. (1981) 52 F.L.R. 1.) Each of the five Branch officers who had become parties to those proceedings appealed against that decision. On 7 July 1982 the Full Court of the Court made certain determinations including a determination that certain rules relevant to the said charges which had been adopted by the Federal Council at its meeting in August 1978 had been invalidly adopted. The Full Court in the exercise of its discretion made no orders and subsequently | on 6 August 1982 dismissed the appeal. (Cook & Ors. v. Crawford & Ors. (1982) 43 A.L.R. 83.) On 27 June 1979 shortly after the commencement of the abovementioned proceedings the present application pursuant to s 171C of the Act was filed on behalf of the organization and certain Federal officers. Such proceedings were numbered V 24 of 1979. These proceedings sought certain validating orders should the Court determine that invalidities had occurred in (inter alia) the making or alteration of the rules of the organization by the 1978 Federal Council. On 3 September 1979 the Court as presently constituted directed that the said five Branch officers be added as respondents to the s 171C proceedings and ordered that those proceedings be heard together with the substantive application under s 141 (No. 19 of 1979). Consequent upon the Court at first instance handing down its determination in the substantive matter the s 171C application was stood over generally pending the determination of the appeal in matter No. 19 of 1979. After the dismissal of the said appeal the present validating application was restored to the list for directions on 2 September 1982. At that time Mr Wright of Counsel who had appeared on behalf of the said five officers of the Sydney Branch in the substantive matter again appeared for those officers. Pursuant to directions made by the Court on 2 September 1982 notice of the application under s 171C was published in the organization's journal, "Plumbers' News", which was forwarded to all members of the organization in September, 1982. In addition, advertisements were placed in numerous newspapers circulating throughout Australia giving details of the application. The said notice and advertisements indicated that any person who wished to contend that an invalidity had or may have occurred in the amending of the rules of the organization or in the management or administration of the organization was invited to contact the District Registrar at any District Registry of the Federal Court of Australia within Australia and enter an appearance in the matter on or before a certain date. On 2 September the matter was stood over until 26 November 1982 for further directions. On the latter date Mr Wright again appeared and after stating that neither he nor his instructing Solicitors had instructions to further appear in the matter and appeared that day simply out of courtesy to the Court, withdrew. After hearing further submissions from Counsel for the Applicants further directions were made and the matter was fixed for hearing for 2 February 1983. \ When the present matter was called on for hearing on 2 February 1983 Mr Johnston of Counsel appeared on behalf of Mr Tyler. There was no appearance for any of the other four officers. Mr Tyler had filed a notice of motion in the present proceedings on 25 January 1983. Such notice of motion asked that the application for validation of the rule amendments be rejected and that officials of the organization perform and observe the rules of the organization by paying all monies due to him for long- service leave and retirement allowance. Subsequently on 2 February 1983 an affidavit sworn on 1 February 1983 by Mr Tyler and stated to be in support of the notice of motion was filed. The effect of the affidavit is such that Mr Tyler feared that 1f the amendment made to r. 50 adopted by the 1978 council was validated then he would be deprived of his long-service leave payments and retirement allowances which two sums he claimed exceeded thirty thousand dollars ($30,000.00). He stated that he became a full-time organizor of the Union on 3 June 1958 and remained a full-time official until his dismissal on 2 May 1979, a period in excess of twenty years. te Rule 50 prior to the amendments thereto made in August 1978 read: "50 (a) (b) A Retiring Allowance shall be paid of not less than an amount equal to one year's salary for paid officers of the Federal Council or full-time officers of Branches after twenty (20) years' service or pro rata after one year's service. In the case of part-time paid officers of Branches the pro rata payment shall apply after five (5) years' service. Retrospective service of all paid officers who are at present paid officers of the Federal Council and Branches shall be taken into account in assessing retiring allowance and long-service leave of such paid officers, Long-service leave of nine (9) months duration on full pay after twenty (20) years service or pro rata after five (5) years service shall apply to retrospective service of all paid officers of the Council and Branches and shall be taken into account in assessing the foregoing conditions. Pro rata long-service leave may be taken after ten (10) years service with the permission of the Council in the case of ' (c) (qd) (e) (f£) a paid officer of the Council and in the case of a paid officer of the Branch by the Branch, Claim for such retiring allowance and long- service leave shall be made to the General Secretary 1n the case of a paid officer of Federal Council and by the respective Branch in the case of paid officers of the respective Branches. All payments to be made from the fund provided by Rule (42) Clause (e), Paid officers of the Federal Council or the Branches shall have the right to retire on the foregoing conditions, The aforesaid conditions shall apply to paid officers of the Federal Council and Branches in the case of removal from office due to death, sickness, voluntary retirement, ballot or in any other circumstances within the Rules of the Union, A paid officer of the Federal Council or Branch removed from office due to misconduct within the rules of the Federal Council or Branch shall have the right of appeal against such decision of the Executive of the Federal Council or the Committee of Management of the respective Branch, {i) In the case of the paid officer of the Federal Council to the Federal Council, (1i) In the case of the paid officer of the Branch to the Executive of the Federal Council." Rule 50 was amended by the 1978 Council, the amendment being certified by the Industrial Registrar on 25 October 1978. The amended rule reads: "50 (a) A Retiring Allowance shall be paid of not less than an amount equal to one year's salary to paid officers of the Federal Council or full-time officers of Branches after twenty (20) years' service or pro rata after one year's service. In the case of part-time paid officers of Branches the pro rata payment shall apply after five (5) years' service. Retrospective service of all paid officers who are at present paid officers of the Federal Council and Branches shall be taken into account in assessing retiring allowance and long- (b} (c) service leave of such paid officer, Long-service leave of nine (9) months' duration on full pay after twenty (20) years' service or pro rata after three (3) years' service shall apply to retrospective service of all paid officers of the Council and Branches and shall be taken into account in assessing the foregoing conditions, Pro rata long-service leave may be taken after three years' service with the permission of the Council in the case of a paid officer of the Council and in the case of a paid officer of the Branch by the Branch, Claims for such retiring allowance and long-service leave shall be made to the General Secretary in the case of a paid officer of Federal Council and by the respective Branch in the case of paid officers of the respective Branches, All payments to be made from fund provided by Rules 42 and 43, ' : (d) Paid officers of the Federal Council or the Branches shall have the right to retire on the foregoing conditions which shall apply in the event of their ceasing to hold office due to death, sickness, voluntary retirement or expiry of their term of office provided that such conditions shall not apply and there shall be no such entitlement in respect of an officer removed from office having been found guilty of misappropriation of the funds of the Union or gross misbehaviour or gross neglect of duty in accordance with the Rules." Section 171C of the Act reads: An organization, a member of an organization or any person having a sufficient interest 1n respect of an organization may apply to the Court for a determination of the question whether an invalidity has occurred in the management or administration of the organization or of a branch of the organization or in an election or appointment in, or the making or alteration of the rules of, the organization or a branch of the organization and the Court has (2) jurisdiction to hear and determine the application and to make such declaration as it thinks proper, Where, 1n proceedings under sub-section (1), the Court finds that an invalidity of the kind referred to in that sub-section has occurred, the Court - (a) May make such order as it thinks fit to rectify or cause to be rectified the invalidity, or to negative, modify or cause to be modified the consequences in law of the invalidity, or to validate any act, matter or thing rendered invalid by or as a result of the invalidity; (b) Shall, before making such order, satisfy itself that such an order would not do substantial injustice to the organization or to any Member or creditor of the organization or to any person having dealings with the organization; (c) Where any such order 1s made, may give such ancillary or consequential directions as it thinks fit; and (d) May determine what notice, summons or rule to show cause is to be given to other persons of the intention to make such an order, and whether and how it should be given or served and whether it should be advertised in any newspaper. Certain findings of fact were made by me in matter No. 19 of 1979. As I understand 1t the Court hearing the appeal in that matter did not disturb any of those findings of fact. Such findings have been considered by me in the present proceedings and have formed part of my reasons for judgment herein. Accordingly, my reasons for judgment in Cook & Ors. v. Crawford & Ors.(supra) should be read in conjunction with these reasons and I find 1t unnecessary to set out 1n detail the factual matters leading up to the dispute which occurred between the officials of the Sydney Branch of the organization and the organization itself which culminated in the hearing of the said charges and the dismissal from office and expulsion from the organization of the said five officers of the Sydney Branch. Further, the findings that none of the members of the Executive who heard the charges nor the member who laid the charges was biased is taken into account in the present proceedings. Further, the reasons for judgment of the members of the Court in the appeal in matter No. 19 of 1979 and that Court's order together with the determinations of the Court in Wright & Anor. v. McLeod & Ors. (1983) 51 A.L.R. 483 have been considered by me an the exercise of my discretion in the present matter. I am satisfied that the amendments made by the Federal Council at its meeting in August 1978 were made bona fide. Indeed there 1s no suggestion to the contrary in any of the evidence. I accept that the specially summoned meeting of the Federal Council in August 1978 was called following the observations of the Court in Roots v. Mutton (supra) at p 21 where the Court stated: "we should however point out that the rules seem to be in a somewhat unsatisfactory state and will inevitably present further difficulties of interpretation both to members and officers and, in the event of dispute, to the Court. It is clearly desirable that steps be taken as soon as practicable to remove such difficulties," and that the officials were anxious to put the rules of the organization in order as soon as possible. The opportunity was then taken to restructure the organization so as to provide (inter alia) for rank and file elections of its officials instead of the collegiate type of elections previously provided for. Further, I accept that following the decision in Roots v. Mutton (supra) the officials had some reservations as to the validity of the adoption of certain of the amendments made by the Federal Council in both 1975 and 1977. Accordingly, a decision was taken that the Solicitor for the organization be invited to attend the 1978 special meeting of Council to advise generally concerning the rules and redraft earlier rules to overcome ambiguities. As a consequence, Document R referred to above was prepared and dealt with in the way mentioned earlier. I accept that the members of the Federal Council then believed that r. 27 (5) gave the Council an express general power to amend the rules. In addition the Court is mindful that consequent upon the 1978 amendments to the rules whach brought about the restructuring of the organization elections have since been held in accordance with those amendments. Consideration has been given to the general principles that the Court has determined should be applied in applications made under s 171C of the Act. Such principles include those laid down in Gordon v. Carroll & Ors. (1975) 27 F.L.R. 129, Australian Building Construction Employees' v. Builders' Labourers' Federation (1978) 46 F.L.R. 308, Allen v. Townsend & Ors. (1977) 31 F.L.R. 431, Troja v. Australasian Meat Industry Employees' Union (Victorian Branch) (1978) 46 F.L.R. 340, Kayne v. Banks & Ors. (1978) 22 A.L.R. 255, Sherrif & Ors. v. Townsend & Ors. (1979) 48 F.L.R. 20. Further, as to the question of "substantial injustice" (s 171C (2) (b)) consideration has been given to Re Australian Continental Resources Limited (1976) 10 A.C.T.R. 19 and Compaction Systems Pty. Limited and the Companies Act (1976) 2 N.S.W.L.R. 477 at 492 - 3. It 1s clear that invalaidities have occurred in the making or alteration to the rules adopted by the 1978 Council. Dealing first with the amendments to r. 50. I am not satisfied that an order validating the amendments made by the 1978 Council to this rule would not do substantial injustice to Mr Tyler or other members. In this regard I make no determination as to whether Mr Tyler was employed by either the New South Wales State Union or the Federal organization or both continuously from 3 June 1958 until the date of his dismissal. Again, assuming that he was employed by both unions during this period, no determination is made as to whether such employment was "full-time" in both unions. Nor 1s any determination made that on the proper construction of r. 50 as amended by the 1978 Council those amendments had any retrospective effect (cf Davis v. Pulp & Paper Workers' Federation (1963) 8 F.L.R. 277),or, whether the rule as amended contravened s 140(1)(c) of the Act. However the Court has taken into consideration that an employee cannot contract himself out of the benefits of the N.S.W. State long-service leave legislation. As stated above, I am satisfied that as a result of the non-compliance with the then rules of the organization invalidities may have occurred in the making or alteration of the following rules of the organization by the 1978 Federal Council which amendments were certified - by the Industrial Registrar on 25 October 1978: rr 6(3) and (4), 8, 13, 18, 19, 21, 21A, 22, 23, 24, 25, 26, 27, 29, 30, 31, 32, 33, 34, 35, 36, 42, 43, 47, 48, 48A, 48B, 48C, 51, 54, 55, 56, 56A, 59, 60, 65 and 67. Further, I am satisfied that an order validating those amendments would not do substantial injustice to the organization or to any member or creditor of the organization or to any person having dealings with the organization. Again, on the evidence I am satisfied that by reason of the invaliditiecs found to exist in the making of alterations of certain rules by the Federal Council in 1978 including amendments to rr 13 and 35 invalidities have occurred in the management or administration of the organization, namely, in the resolutions dated 2 May 1979 of the Federal Executive of the organization dismissing Ulrich Colin Bignell from the office of secretary of the Sydney Branch of the organization, dismissing Harold Shooter from the office of assistant secretary of the Branch, dismissing Royce Lawrence Cummins, Kenneth Lewis Tyler and Gregory Lawrence Waters from the offices of organizor of the Branch, and expelling the said Ulrich Colin Bignell, Harold Shooter, Kenneth Lewis Tyler and Gregory Lawrence Waters from membership of the . organization. Further, I am satisfied in all the circumstances that an order validating such resolutions would not do substantial injustice to the organization or to any member or creditor of the organization or to any person having dealings with the organization. Accordingly, the making or alterations of the aforesaid rules by the Federal Council in August 1978 {other than those to r. 50) which were certified by the - Industrial Registrar on 25 October 1978 and the aforesaid resolutions of the Federal Executive of the organization made 2 May 1979 are validated. Declarations and orders should be made accordingly. QO ertify that, tlis and the 20 receding pases are a true copy of the Reasons for Judgment herein of his Honour wr. Justice EVATT I4 c pe ene