IN _THE FEDERAL COURT OF AUSTRALTA SOUTH AUSTRALIA DISTRICT REGISTRY S.A. No. 1 of 1983 wee ww INDUSTRIAL DIVISION BETWEEN: JAMES LESLIE BAILEY Applicant AND: HARRY DAVID KRANTZ & ORS. Respondents JUDGE: Gray J. DATE: 23rd July 1984 CORRIGENDA Amendment to the ORDER of His Honour Mr. Justice Gray as follows: Page 3 - Order B part 4; the word "jurisdiction" should be substituted for the word "discretion" where the word discretion second appears. (Stephen Howells) Associate to Gray J. 30 July 1984 CATCHWORDS Industrial law - s. 141 Conciliation and Arbitration Act 1904 - jurisdiction of the Court - whether an arguable case exists - question of ownership of property and funds as between Organization and State Union - power to direct officer of Organization also an officer of State Union - joinder of parties - accrued jurisdiction - discretion not to exercise - appropriate forum - order invalidating elections - limitation period. S. 141 Conciliation and Arbitration Act 1904 (Cth) S. 133 Conciliation and Arbitration Act 1904 (Cth) Regulation 115(1)(d) Conciliation and Arbitration Regulations S. 51 Federal Court of Australia Act 1976 Moore v Doyle (1969) 15 F.L.R. 59 Philip Morris Incorporated v Adam P.. Brown Male Fashions Pty. Ltd. (1981) 148 C.L.R. 457 Fencott v Muller (1983) 46 A.L.R. 41 R. v Dovey; ex parte Ross (1979) 141 C.L.R. 526 Ascot Investments Pty. Ltd. v Harper (1981) 148 C.L.R. 337 Kennedy v_ Australasian Coal and Shale Employees Federation (1983) 50 A.L.R. 735 Meat and Allied Trades Federation of Australia v The Australian Meat Industry Employees 1984) -2- a Federated Clerks Union of Australia v Hills £1981] 1 N.S.W.L.R. S.A. No. 1 of 1983 Gray J. 23 July 1984 Adelaide whew soda weed nee Vad ae ane weer ee A ae rt omer et oe Aa ere ete "om IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIAN DISTRICT REGISTRY ) S.A. No. 1 of 1983 ) ) INDUSTRIAL DIVISION BETWEEN: JAMES LESLIE BAILEY Applicant FEDERAL COURT OF AUSTRALIA PRINCIPAL HARRY DAVID KRANTZ & ORS. Respondents ORDER JUDGE MAKING ORDER Gray J. . DATE OF ORDER 23rd July 1984 WHERE MADE Adelaide THE COURT ORDERS THAT: A. The questions for decision separately from any other question in the proceeding be as follows: 1. On the assumption that in this matter the applicant is only entitled to orders if he can establish: (i) that the rules of the Organisation or Branch require the Respondents or some or all of them to hold property in the name of the Organisation or to deal with property in a specific way; and onl eattadhlitmaterieal Tenell cleat oanamacetemia inten teeta ied - ee nee sta ' . wee te ere eee ee Tat ee sew eo we nO Ne A tte oe Pee ah ee es He Me eT te aS rt (ii) that there is property of the Branch not so held or dealt with; and on the further assumption that there is a doubt concerning whether title to any property is vested in the Organisation or in any association registered pursuant to the Industrial Conciliation and Arbitration Act, 1972 (S.A.), is it not necessary for it to be established whether the Organisation or the State Association has title to any property in respect of which orders pursuant to s.141 of the Conciliation and Arbitration Act, 1904 (the Act) might be made? If the answer to 1 is yes, do the within proceedings purport to ask this Honourable Court to determine such questions of title? If the answer to 2 is yes, does this Honourable Court have jurisdiction to determine such questions of title and if this Honourable Court does have such jurisdiction is that jurisdiction properly invoked by the Order to Show Cause made by His Honour Mr. Justice Fisher on 23rd March, 1983? If the answers to the two questions in 3 are yes, does this Honourable Court have a Giscretion to refuse to exercise such jurisdiction and if this Honourable Court does have such a discretion, should it exercise that discretion against the Applicant? As to Orders to Show Cause (a) and (c), each of the questions raised in 1 to 4 above, in respect of the "land" referred to therein. As to Orders to Show Cause (b) and (e), does any rule of the Organisation or Branch require the Secretary or Assistant-Secretary to inform the State Branch Council of any matter? Has the applicant complied with Order 4, r.15(5) of the Federal Court Rules? If not, should that Order to Show Cause be discharged or struck out pursuant to Order 11 r.16? As to Orders to Show Cause (d) and (f£), each of the questions raised in 1 to 4 above, in respect of the "monies deposited with a body known as the Satisfac Credit Union" referred to therein. Tl Tee eter Se er nn meme mS - eo =e ee -- -- - - a da mre bead anes ede tame 0 pt ee I a OT AN ed Sanaa mA Mbt LP cl nt arn dl ae That the questions be answered as follows: i. 2. 3. 4. 6. 7. Yes. Yes. Yes. If the Court does have a discretion to refuse to exercise its jurisdiction, which it is unnecessary to determine, the Court should not refuse to exercise its discretion in th present case. fareacto Wh. The answers to questions 1, 2, 3 and 4 are repeated. The rules of Federated Clerks Union of Australia and its South Australian Branch arguably require the Secretary or Assistant-Secretary of that Branch to inform the Branch Council of that Branch of certain matters. It is unnecessary to determine whether the Applicant has complied with order 4 rule 15(5) of the Federal Court Rules. Paragraphs (b) and (e) of the rule to show cause should not be discharged or struck out. The answers to questions 1, 2, 3 and 4 are repeated. Paragraphs (h) and (i) of the Rule to Show Cause be discharged. Federated Clerks Union of Australia be added as a Respondent to the proceeding. Federated Clerks Union of Australia, South Australian Branch, an association registered pursuant to the Industrial Conciliation and Arbitration Act of South Australia, be.,added as a Respondent to the proceeding. IN THE FEDCRAT. COURT OF AUSTRALIA ) ) SOUTH AUSTPALTAN DISTRICT REGISTRY )} S.A. No. 1 of 1983 ) ) INDUSTRIAL DIVISION BETWEEN: JAMES LESLIE BAILEY Applicant AND: HARRY DAVID KRANTZ & OPS. Respondents JUDGE: Gray J. DATE: 23rd July 1984 REASONS FOR JUDGMENT Federated Clerks Union of Australia ("the Organization") is an organizaticn of employees, registered pursuant to the Conciliation and Arbitration Act 1904. its members in South Australia are attached to its Scuth Australian branch ("the Branch"). There is also registered pursuant to the Industrial Conciliation and Arbitration Act of South Australia an association of employees, under the name of Federated Clerks Union of Australia, South Australian Branch ("the State Union"). fa The Applicant, Mr. Bailey, 1s a member of the Organization. The Respondents fall into two groups. The first group consists of certain officers of the Branch and members of the Branch Council of the Branch. The second group 1s certain Federal officers and members of the Federal Council of the Organization. There is some overlap between the two groups, in that some of the Branch Respondents are also members of the Federal Council. On 23rd March 1983, Fisher J. granted a Rule to Show Cause to the Applicant, and to another Applicant whose name has since been deleted from the preceeding. Since then, points of contention have been filed on behalf of the Applicant, with separate sets of points of contention being filed on behalf of the Respondents for whom Mr. Heywood-Smith appeared before me (including the Branch Respondents) and the remaining Respondents, for whom Dr. Jessup appeared. In substance, the Applicant claims that, from time to time, members of the Organization have paid to the Branch various monies, and the Branch has had available other monies. All funds are alleged to have been received and held pursuant tc the rules of the Organization. It is alleged that some of these funds have been expended 'on land and buildings, and that others have been invested in other ways, particularly by deposits with an institution known as the Satisfac Credit Union. The title to the land and buildings is alleged to be a registered in the name "Federated Clerxs Union of Australia, South Australian Branch". It will be noted that this name corresponds with the name of the State Union, and could also be used to describe the Branch. The deposits held by the Satisfac Credit Union are alleged to be held in the same name. It is also said that deposits in the Satisfac Credit Union are not authorised trustee investments within the meaning of the Trustee Act 1936 of South Australia. A separate set of allegations relates to Michael Anthony Prichard, the former Applicant in the proceeding whose name has been deleted. It is alleged that, prior to 17th September 1980, Mr. Prichard was employed as an organizer in the Branch. On that day he was dismissed by the persons purporting to comprise the S3ranch Council of the Branch. Those persons were not the Branch Council] of the Branch in that, firstly, no rules for the election of councillors of the Branch by sections of the Branch were registered, and such persons purported to have been so elected, and, secondly, the Branch rules did not provide for the election of persons to the Branch Council of the Branch as required by Section 133(1) (a) of the Conciliation and Arbitration Act 1904 and Regulation 115(1) (d) of the Concilation and Arbitration Regulations. By reason of these matters, it is alleged that the purported dismissal was invalid and void and of no effect. ~ substance, (a) (b) (c) (d) The relief sought in the Rule to Show Cause is, in as follows: An order is sought directing the Branch Respondents to take all steps as may be necessary to transfer, or to cause to be transferred, and to register or to cause to be registered, the land and buildangs to and in the name of the Organization. An order is sought directing the Respondents Krantz and Haseldine, who are Secretary and Assistant-Secretary respectively of the Branch, to infocm the Branch Council that, for the proper carrying on of the business of the Branch, the funds of the Branch should vest in the Organization. An order is sought directing the Federal Respondents to cause the Branch Council to take all steps as may be necessary to transfer, or to cause to be transferred, and to register or to cause to be registered, the land and buildings to and in the name of the Organization. An order is sought directing the Branch Respondents to take all steps as may be necessary to deposit or otherwise invest the monies deposited with the (e) Fh ~~ (g) (h} (i) Satisfac Credit Union in the name of the Organization and in authorised trustee investments. An order is sought directing the Respondents Krantz and Haseldine to inform the Branch Council that, for the proper carrying on of the business of the Branch, the funds of the Branch may be invested only in authorised trustee investments. An order is sought directing the Federal Respondents to cause the Branch Council to take all steps as may be necessary to deposit or otherwise invest the monies deposited with the Satisfac Credit Union 1n the name of the Organization and in authorised trustee investments. An order is sought directing the Branch Respondents to invest the funds of the State Branch only in the name of the Organisation and in authorised trustee investments An order is sought directing all Respondents to treat the decision of the Branch Council on 17th September 1980 concerning the purported dismissal of Mr. Prichard as void and of no legal effect. An order is sought directing all the Respondents to recognize 'ir. Prichard as holding tne office of organizer 1n the Branch. In earlier directions hearings, auestions arose whether the Court had jurisdiction pursuant to Section 141 of the Conciliation and Arbitration Act 1904, or otherwise, to hear and determine the matters raised 1n the Rule to Show Cause, or any of them. Section 141(1G) provides as follows: "An order under this section may give directions for the performance or observance of any of the rules of an organization by any person who 1s under an obligation to perform or observe those rules." On 24th May 1984, pursuant to order 29 rule 2 of the Federal Court Rules, I made the following directions: 1. That the proceeding be fixed for hearing on 28th June 1984 at 10.15am in Adelaide for the determination of a preliminary question or + preliminary questions whether the court has jurisdiction to entertain all or any of the proceeding or power to make all or any of the orders sought. 2. That on or before 8 June 1984 the Respondents for whom Mr. White appears file and serve on each of the other parties a statement setting out the preliminary question or questions which those ee - + . . _ Respondents contend arise as to the jurisdiction of the court to entertain all or any of the proceeding or the power of the court to make all or any of the orders sought. Pursuant to these directions, the branch Respondents filed questions which were in the following terms: eye ere meee "y On the assumption that in this matter the applicant 1s only entitled to orders if he can establish: (i) that the rules of the Organisation or Branch require the respondents or some or all of them to hold property in the name of the Organisation or to deal with property in a specific way; and (i1) that there is property of the Branch not so held or dealt with; and on the further assumption that there is a doubt concerning whether title to any property is vested in the Organisation or in any association registered pursuant to the Industrial Conciliation and Arbitration Act, 1972 (S.A.), 1s it not necessary for it to be established whether the Organisation or the State Association has title to any property in respect of which orders pursuant to s.141 of the Conciliation and Arbitration Act, 1904 (the Act) might be made? If the answer to 1 is yes, do the within proceedings purport to ask this Honourable Court to determine such questions of title? If the answer to 2 is yes, does this Honourable Court have jurisdiction to determine such questions of title and if this Honourable Court does have such jurisdiction is that jurisdiction properly invoked by the Order to Show Cause made by His Honour Mr. Justice Fisher on 23rd March, 1983? order separately from any other question. If the answers to the two yuestions in 3 are yes, does this Honourable Court have a discretion to refuse to exercise such jurisdiction and if this Honourable Court does have such a discretion, should it exercise that discretion against the applicant? As to Orders to Show Cause (a) and (c), each of the questions raised in 1 to 4 above, in respect of the "land" referred to therein. As to Orders to Show Cause (b) and (e), does any rule of the Organisation or Branch require the Secretary or Assistant-Secretary to inform the State Branch Council of any matter? Has the applicant complied with Order 4, x.15(5) of the Federal Court Rules? I£ not, should that Order to Show Cause be discharged or struck out pursuant to Order 11 r.16? As to Orders to Show Cause (da) and (£), each of the questions raised in 1 to 4 above, in cespect of the "monies deposited with a body known as the Satisfac Credit Union" referred to therein. As to Orders to Show Cause (h) and (i), what rule cr rules cf the Organisation or Branch is the performance or opservance of which raised? Has the applicant complied with Order 4, r.15(5) of the Federal Court Rules? If che answer to the last question 1s no, shceuld the said orders be discharged or struck out pursuant to Order 11, r.16?" It was not suggested by any party at the trial of the preliminary questions that any of questions 1 to 7 was inappropriate. I therefore propose to order, pursuant to rule 2, that these questions be determined below, question 8 is not appropriate for determination. At the hearing cf the preliminary questions, For reasons which appear Dr. Jessup drew my attention to several rules of the Organization. There are in existence both Federal rules, pursuant to which the affairs of the Organization are regulated, and rules of the Branch. Rule 15(i1) of the Federal rules provides as follows: "15. BRANCH PAYMENTS (1) Unless otherwise directed by National Council or the National Executive, Branches may retain for the maintenance thereof all monies received by them other than the sums hereinafter required to be forwarded to the National Executive." Rule 37 of the Federal rules provides as follows: "37. FUNDS AND PROPERTY - DISBURSEMENT OF SAMF (1) ALL funds and property held by any Branch shall be vested in the Union. (2) The Executive of a Branch shall not invest any funds for the time being in its possession in other than authorised trustee investments without the approval of the Naticnal Council or National Executive. (3) The funds of the Union may be disbursed for ordinary purposes by such officer or officers as may be authorised in that behalf and subject to such limitations as may be imposed. Funds may be disbursed for extraordinary purposes by decision of the National Council or National Executive." Rule 16 of the Branch rules, so far as is relevant, provides as follows: "16. POWERS AND DUTIES OF BRANCH COUNCIL The powers and duties of the Branch Council shall be as follows: (b) It shall manage the affairs of the association and have full power to decide all questions of policy and snall do or cause to be done all things required by these rules to be performed by or on behalf of the Council and as it deems expedient shall do or authorise to be done all things required or necessary to be done to carry out the objects of the association. It shall have the care, control and custody of the funds and property of the association. (t) It may demand, sue for and recover and keep possession of all books, accounts and other property of the Union." Rule 36(c) of the Branch rules provides as follows: "(c) The funds of the Union may be invested in such investments as shall be decided upon by the Council and the control of = such investments be vested in the Council." Rule 12(1) of the Federal rules requires all branches to conform to the rules of the Organization. Rule 12(2)(a) gives the power to a branch to-make rules from time to time for its own internal management, but the power 1s expressed to be subject to the Federal rules and to the approval of the National Executive. As to the duties of -officers, rule 35 of the Federal rules provides as follows: "35 LEGAL PROCEEDINGS (1) Subject to any directions of the National Couneil or National Executive the National Secretary shall have power to bring, defend or settle legal proceedings in the name of or on ponalf of the Union. Any such action taken shall be reported to National Executive within seven (7) days thereafter. (2) For the purposes of sub-Rule (1) thereof, the National Secretary is hereby invested with all powers and authorities necessary or convenient in that regard. (3) The Secretary of each Branch shall be empowered and is hereby authorised to sue on benalf of the Union for all moneys due to it." Rule 24 of the Branch rules appears te be directed to setting out the duties of the Branch Secretary. Sub-rule (g) provides as follows: ""(g) He shall be the officer to sue and prosecute or be sued or prosecuted on behalf of the Union." For the purpose of determining whether the Court has jurisdiction te deal with the matters raised in the Rule to Show Cause, or power to make the orders sought, ut is unnecessary for me to do more than ask whether an arguable case exists that the Applicant is entitled to the relief which he seeks in this Court. Issues of fact have not yet been determined, and full argument has not been heard on the question of entitlement to relief. Accordingly, anything which I say at this stage should not be construed as pre-empting in any way the determination of the matter. I have reached a conclusion that an arguable case exists that the Applicant is entitled to the relief sought in paragraphs (a), (ce), (dad), (£) and (g) of the Rule to Show Cause, which are summarized above. t is arguable that rule 37(1) of the Federa» rules, set out above, requires that, where possible, the legal title to property held by any branch of the Organization be in the name of the Organization. If property is held on trust for the Organization, whether the trust be express, resulting or constructive, it is arguable that the rules set out above require that steps be taken to call in the trust property, where that can be done, and to ensure that the property is held in the name of the Organization. Whether these steps can or must be taken at the Branch level or at the Federal level might be a difficult question of construction, but that is a matter which goes only to the propriety of having Respondents at both the Branch and the Federal levels joined in the proceedings. As to the question of investment in authorised trustee investments, the provisions of rule 37(2) of the Federal rules, coupled with the overriding effect of the Federal rules pursuant to ruie 12(1) and (2)(a), speak for themselves. Of greater difficulty are the orders sougnt in paragraphs (b) and (e) of the Rule to Show Cause, summarized above. Specific reference was not made to any of the provisions of the Federal rules. er the Branch rules with respect to the matters raised by those paragraphs. An examination of rule 24 of the Branch rules, dealing with the duties of the Branch Secretary, leads to sub-rule (d), which TT Nn ne te en ee eee awe is in the following terms: "(d) He shall be responsible for the proper carrying on of the Union and shall act as general supervisor for and on behalf of the Union." Although under sub-rule (c), the Branch Secretary 1s said to be subject to the control of and to be required to carry out the instructions of the Branch Council, the performance of his function as a "general supervisor" under sub-rule (4) might arguably require him to inform the Branch Council of the matters referred to in paragraph (b) and (e} of the rule to show cause. I do not think that, at this stage, I could reject such a@n argument to the extent of dischargin paragraphs (b) and (e) of the Rule to Show Cause. An examination of rule 25 of the Branch rules indicates tnat the Assistant Secretary is obliged to assist the Secretary in the discharge of his duties, and to carry out all the functions and duties of the Secretary, with all his powers and authority, in the absence of the Secretary from duty. It is, therefore, arguable that the Respondent Haseldine could be ordered to do what the Respondent Krantz could be ordered to do with respect to paragraphs (b) and (e) of the Rule to Show Cause. An arguable case exists, therefore, that orders can be made against the Respondents or some of them in respect of the investment of funds in land and buildings, and on deposit with the Satisfac Credit Union, if the necessary facts are established. One of these necessary facts will be that the ' funds which were invested were the property of the organization. That this is in dispute was made plain from the bar tabie by Mr. Heywood-Smith. Those Respondents for whom he appears will contend that no orders could be made because the funds concerned were those of the State Union, and not those of the Organ:zation. Once this 2ussue of entitlement to the funds has been raised, it is essential for the Court to determine it in the exercise of its jurisdiction under Section 141 of the Conciliation and Arbitration Act 1904. If it turns out that the funds are not those of the Organization, the Court would noc make any orders against any of the Respondents in respect of the land and buildings or the deposits with the Satisfac Credit Union. If, on the other hand, it turns out that the Organization's funds have been invested other than in accordance with the rules, the Court would, subject to discretionary considerations, make orders under Section 141 to rectify this position. This very situation arose in Moore v Doyle (1969) 15 F.L.R. 59. In that case, the Commonwealth Industrial Court dealt with a Rule to Show Cause which involved claims for orders prohibiting the use of the funds and the time of paid officers of an organization in connection with applications to alter the rules of a trade union registered under New South Wales law. See paragraphs (c), (d) and (e) of the relief sought, set out at pages 60-61 of the report. The defence taken in that case was that the monies used were not the property of the particular organization, nor were the officers conducting their activities as officers of the organization; rather, the funds and the officers were funds and officers of the trade union. See the contentions summarized in the judgment at pages 62-3. This defence was successful; at page 111, the court said: "In the result the claimant has fazled to establish that the respondents have spent or intend to spend any funds or have allowed or intend to allow to be expended the time of any officers or any of the administrative resources of the organization in connexion with an application by the organization or its New South Wales branch to extend or expand the rules of the organization or its New South Wales braach to permit persons not being employees to be eligible to become members of the organization or its New South Wales branch, and has falled to establish that the respondents or any of them, by the officers of the organization or of the New South Wales branch or otherwise, have prosecuted or intend to prosecute an application to the Industrial Commission of New South Wales or any other tribunal to alter the rules of the New South Wales branch of the organization to permit persons wno are not employees to be eligible to join and remain members of the organization." There is no suggestion that the determination of this issue by the Commonwealth Industrial Court was beyond the jurisdiction given by Section 141. Mr. Heywood~Smith contended that what is sought in the rule to show cause involves a declaration as to the title to the land and buildings and the monies held in the Satisfac a er Credit Union, as between the Organization and the tate Union. Such a declaration of title, he argued, is separate and distinct from any claim for performance and observance of the rules. He relied upon the tests laid down by the High Court of Australia in Philip Morris Incorporated v Adam P. Brown Male Fashions Pty. Ltd. (1981) 148 C.L.R. 457 and Fencott v Muller (1983) 46 A.L.R. 41 for the exercise of the accrued jurisdiction of this court. The difficulty about this argument is that, at present, no relief is sought against the State Union; it is not, at present, a party to the proceeding. If the proceeding were to continue with the parties in their present state, it would still be competent for the Court, in the exercise of its jurisdiction under Section 141, to determine the issue of entitlement to the funds. Naturally, any such determination, in the absence of the Organization and the State Union, would not bind those bodies; 1t would be binding only as vetween the parties to the proceeding. Nothing about the proceedings as they are presently constituted attracts any of the accrued jurisdiction of the court. It might be thought that, in the absence of the State Union as a party, and in the absence of any application for relief against it, there would be little point in determining the issue of entitlement to the funds. It was argued by Mr. Heywood-Smith that the jurisdiction of the Court under Section 141 stops short of ordering any of the caer neem Respondents to do anything other than in his or hec capacity as a person under an obligation to perform or observe the rules of the Organization. I do not find any such Limitation in Section 141. Provided that a person falls within the category referred to in sub-section (1G) of persons who are under an obligation to perform or observe the rules, provided that such person 1s properly before the Court as a party, and pceovided that the order of the Court is properly described as an order giving directions for the performance or observance of the rules of an organization, the Court may give such a person any directions it sees fit. See generally R. v Commonwealth Court of Conciliation and Arbitration; ex parte Barrett (1945) 70 C.L.R. 141. The situation may be tested in the following way. Suppose that an officer of an organization has an obligation under the rules of that organization to pay monies received by him from members of the organization into a particular bank account. He aiso holds office in another, totally separate body, the rules of which impose a similar obligation on him. Suppose that, in error, he pays into the bank account of the separate body funds which should have been paid into the bank acccunt of the organization. There can be Little doubt that the jurisdiction under Section 141 would be capable of being exercised to compel him to withdraw from the bank account of the separate body those funds mistakenly paid into it, and to pay them into the bank account of the organization. This is so even though the court might be compelling such an officer to execute a document of a kind which he would only execute as an officer of the other body, for the purpose of withdrawing the funds from the bank account of the other body. Useful authority 1s provided by the decision of the High Court of Australia in R. v Dovey; ex parte Ross (1979) 141 C.L.R. 526. In that case, the Family Court of Australia hag granted an injunction against a husband, properly before it in proceedings brought by his wife, restraining hin from exercising his voting rights as a shareholder and/or director of a particular company in favour of any proposed resolution whereby the matrimonial home (which was owned by the company) might be sold or encumbered. The High Court refused an application for a Writ of Prohibition, holding that the Family Court had jurisdiction to make the order. At page 533, Gibbs J., with whom Barwick C.J. and Mason J. agreed, said: "Although counsel for the husband did not contest that the Court would have had jurisdiction 1f the matrimonial home had been owned by the husband, it was submitted that the circumstance that the home was owned by the company meant that the Court lacked jurisdiction. It was said that there is no jurisdiction in the Family Court to restrain a third party (even a family company) from dealing with its own property, and no jurisdiction to achieve that object by restraining a husband, in his capacity as a director or shareholder, from exercising his voting power as such in a particular way. However, it 18 not right to say that the order sought by the wife and made by the learned judge in the present case prevents the company from dealing with its own property. The order 1s not directed to the company and does not bind ut. It 1s true that the practical effect cf the injunction o will be that there will be no sale, but that will be because the husband, who controls the company, is prevented from exercising his control in such a way as to bring about a sale, and not because the company 1s forbidden to do anything which those who control it have resolved to do. Even if the injunction did indirectly affect the rights of the company, that would not mean that it was beyond power: see Sanders v. Sanders [(1967) 116 C.L.R. 336] and Antonarkis v. Deliy [£(1976) 51 A.L.J.R. 21, at pp. 23-24] which, although decisions on the Matrimonial Causes Act 1953 (Cth), provide a guide to the meaning of the present Act." The decision in Sanders v Sanders (1967} 116 C.L.R. 366, relied upon by Gibbs J., involved the grant by the Supreme Court of the Territory of Norfolk Island, exercising jurisdiction under the Matrimonial Causes Act 1959, of an injunction restraining an insurance company from paying out the proceeds of a policy other than to a particular party. R. v Dovey was approved by the High Court in Ascot Investments Pty. Ltd. v Harper (1981) 148 C.L.R. 337, although, at page 352, Gibbs J+, with whom Stephen, Aickin and Wilson J.J. concurred, appears to have qualified his use of the word ""rights" in the last sentence of the passage which I have quoted above. If the Family Court is able to grant an order restraining a person properly brought before it from exercising his vote as a shareholder or director of a company in a particular way, it is difficult to see why this court could not make an order against a person properly brought en niin tiers eee -- -- - ~ os - - -—--+ ~ - ee Ve eee a before it, restraining him from exercising his vote on the governing body of a state registered trade union in a particular way. The statutory provisions under which the Family Court acted (which are set out at page 349 of the report in Ascot) are not appreciably broader in effect than either Section 141 of the Conciliation and Arbitration Act 1904, as interpreted in Barrett's case, or Section 23 of the Federal Court of Australia Act 1976, which relates to the powers of the court in matters within its jurisdiction. The order made in R. v Dovey was of a negative Kind; 1t cestrained the husband from exercising his vote ina particular way. It is a small step from an order of that kind, if it is a step at all, to making a positive order. In Ascot at page 343, Barwick C.J. was of the view that the Family Court could compel a husband to sign a transfer of shares, and that he could be ordered to take such steps as he could lawfully take to secure the registration of such transfer. Provided the act the subject of the order was something which the husband might lawfully do, Barwick C.J. was of the opinion that an order fell within the jurisdiction of the Family Court. The other members of the court in Ascot did not deal with this question. These authorities dealing with the powers of the Family Court lead me to take the firm view that this Court, in the exercise of 1tS jurisdiction under Section 141, 1s en re rn, eT eee - -- - = + we eee ee able to order a respondent properly before it to exercise his vote on the governing body of a state registered trade union, if that 1s an appropriate way of directing him to perform and observe the rules of an organization. Applying that proposition to the present case, 1f 1t turns out that the funds which were used to purchase the land and buildings, and the funds which were deposited in the Satisfac Credit Union belong to the Organization, those Respondents who exercise voting power on the governing body of the State Union may be ordered to exercise their voting power in a particular way, in order to recover from the State Union the property of the Organization. To make such an order is not to make an order against the State Union itself. Even though the State Union would be affected by the making of such an order, this would not be a bar to the Court exercising its jurisdiction. The fact that both the Organization and the State Union have an interest in the outcome of any determination by the Court of the issue of entitlement to the funds raises further considerations. The requirements of natural justice dictate that the Court should give to the Organization and the State Union an opportunity to be heard on the issue. On 24th May 1984, I gave directions to ensure that the Organization and the State Union each received a copy of the Rule to Show Cause, the affidavit on which it was granted, the points of contention filed by all parties, and my order for directions on that date. On 28th June, Dr. Jessup went lee announced his appearance for the Organization. Mr. Heywooé-Smith informed me that the State Union had decided that it would not yet seek to play a role in the proceedings. Because I take the view that the issue of entitlement to the funds is central to the proceeding, I propose,to order that each of the Organization and the State Union be added as a Respondent to the proceeding. In doing so, I recognize that neither the Organization nor the State Union is a person bound to perform or observe the rules of the Organization. It is not intended that the Organization or the State Union be joined as a Respondent for the purpose of making any orders against either of them. Rather, joinder is for the purpose of enabling each of the Organization and the State Union to put whatever submissions it may regard as appropriate, and to enable all parties concerned to be bound by any determination of the issue. In making the order, I am exercising the power conferred by Order 6 Rule 8 of the Federal Court Rules. As I have said, on the view which I take of the case, no question is involved of the exercise of the accrued jurisdiction. If it were necessary for the Applicant to invoke that jurisdiction, it is my view that such an invocation would be proper. Mr. Lindsay, who appeared for the Applicant, relied upon the proposition that the determination of the issue of entitlement to the funds as between the Applicant and the Respondents, and as between the r- I [Ss] w i Applicant and the State Union, involved a single justiciable controversy. There can be no doubt that the facts involved in the determination of the issue as between the Applicant and the Respondents will be precisely those facts which would be involved in the determination of the issue between the Applicant and the State Union. Such a situation would fall well within any of the tests laid down in the Philip Morris case or in Fencott v Muller. It was not suggested that the Industrial Division of the Court is in any different position from the General Division with respect to the accrued jurisdiction. Indeed, the authorities to date clearly give to the Industrial Division accrued jurisdiction similar to that exercised in the General Division. See Kennedy v Australiasian Coal and Shale Emplovees Federation (1983) 50 A.L-R. 735 and Meat and Allied Trades Federation of Australia v The Australian Meat Industry Employees Union (unreported, Neaves J., 13th June 1984). Even if relief were sought against the State Union, against which no order could be made under Section 141, it appears that accrued jurisdiction could be exercised. Beaumont J. in Kennedy at pages 742-4 dealt with the exercise of accrued jurisdiction against a "pendent party". In the present case, however, it is unnecessary to discuss this aspect of the accrued jurisdiction. On the assumption that the accrued jurisdiction was invoked by the Applicant, Mr. Heywood-Smith submitted that its exercise is discretionary, relying upon a passage 'from CON CO nae mm Ae A ae ey ee - - - - a. eee re ea A nee ree - 24 - the judgment of Barwick C.J. in Philip Morris at page 475, where His Honour said: "This exercise of this jurisdiction, which for want of a better term I shall call "accrued" jurisdiction, is discretionary and not mandatory, though it will be obligatory to exercise the federal jurisdiction which has been attracted in relation to the matter." That passage was cited with approval by Mason, Murphy, Brennan and Deane J.J. in Fencott v Muller at page 64. Many of the matters to which Mr. Heywood-Smith referred as going to the exercise of the discretion seemed to me to be matters which might normally be dealt with in the exercise of the court's residual discretion not to grant relief under Section 141, as distinct from being matters which might go to the exercise of any discretion whether or not to undertake the accrued jurisdiction in a particular case. One matter which did, however, appear to have relevance to the accrued jurisdiction was the suggestion that the 1ssue of entitlement to the funds would more properly be dealt with in proceedings un the Supreme Court of South Australia between the Organization and the State Union. There is no doubt that the supreme Court of South Australia would have jurisdiction to adjudicate between the Organization and the State Union, in proceedings in which each of them was a party, upon the question of their respective entitlements to funds and property. The Supreme ee oa . hoes 7" os — -~ 25 - Court could, no doubt, make orders directed to vesting property in one or the other, and to the payment of funds from one to the other, where necessary. At the other extreme, however, by virtue of Section 147(1) of the Conciliation and Arbitration Act 1904, no organization or member of an organization registered under the Act is liable to be sued in any other court for any act or omission in respect of which this Court has jurisdiction. This bar to the exerc.se of jurisdiction by a Supreme Court of a state has been quite widely interpreted. In Federated Clerks Union of Australia v Hills [1981] 1 N.S.W.L.R. 631, the Supreme Couct of New South Wales held that it was not entitled to exercise jurisdiction in a suit by a registered organization against certain of its members. It did so despite the fact that, in proceedings under Section 141, a registered organization itself cannot be an applicant. The effect of Section 147(1) is that the Supreme Court of South Australia could not deal with any of the questions which arise under Section 141. It would therefore be prevented from making orders against specific persons to perform and observe the rules of the Organization with respect to funds or property. In my view, it is eminently desirable that this Court, which is able to deal with all matters of controversy between the parties, should do so. It should only decline to exercise its jurisdiction in a case where there is clearly a more convenient forum. a noe A further difficulty which confronts Mr. Heywood=-Smith's argument 1s the absence of any existing proceeding in the South Austraiian Supreme Court between the Organization and the State Union. Not only has no such proceeding been commenced, but the only way in which a member of the Organization could compel the Organization to take proceedings would be by application under Section 141 of the Concilation and Arbitration Act 1904, against the members of the governing body of the Organization. This is, in effect, what the Applicant in the present proceedings has sought to achieve. Even 1f this Court could decline to exercise its jurisdiction altogether in the present case, to do so would have the possible effect of depriving the Applicant of any remedy at all. If an individual member of the Organization were to take proceedings in the Supreme Court of South Australia in an attempt to pursue the alleged entitlement of the Organization to the funds and property, he would be likely to find the defence raised against him that the rule in Foss v Harbottie (1843) 2 Hare 461 applied. One of the aspects of this rule is that an individual member of a body corporate cannot bring legal proceedings based upon a cause of action which is that of the corporation. The rule and its exceptions are dealt with extensively in Ford, Principles of Company Law, Third Edition, at pages 68-34. An organization registered under the Conciliation and Arbitration Act 1904 Oe ert een ee - - is, by virtue of Section 136, a body corporate. The rule in Foss v Harbottle would therefore apply to prevent a member availing himself or herself of a cause of action properly belonging to the Organization. It 1s unnecessary for me to decide in these proceedings whether one or more of the exceptions to the rule might apply; it is enough to say that this rule is a hurdle which the Applicant would be required to surmount if he tried to sue in the Supreme Court of South Australia in respect of the entitlement of the Organization to property or funds in the name of the State Union. The presence of the rule operates to reduce the convenience of the Supreme Court of South Australia as a forum for the determination of the issue. For the reasons I have given, I have reached the conclusion that, if there were any aspect of the accrued jurisidiction involved in this matter, and if the Court does have a discreticn not to exercise such accrued jurisdiction, the Court should nevertheless exercise it in this case. Question 6 of the questions set out above raises firstly the issue of whether any rule of the Organization or the Branch requires the Secretary or Assistant Secretary of the Branch to inform the Branch Council of any matter. I have already reached the conclusion that 1t could be argued that certain of the rules do impose this requirement. The question then asks whether the Applicant has complied with el ee ee pele oe ee or _ - - - - -- — -- ee eee re Wows Order 4 Rule 15(5) of the Federal Court Rules, and whether, if not, the Court should order that the Rule to Show Cause be discharged or struck out pursuant to Order 11 Rule 16. This merely amounts to a complaint that the Applicant has been insufficiently specific in setting out the rules of the Organization the performance or observance of which 1s in question. Whether or not there has been a breach of Order 4 Rule 15(5), the whole of the rules of the Organization and the Branch are now before the Court. The matter is a procedural one. Even if there has been insufficient conjsiitance with the rules, no substantial injustice has been caused by it, so the proceeding is not invalidated. See Section 51 of the Federal Court of Australia Act 1976. In addition, the court has power to dispense with compliance with any of the requirements of the rules, by virtue of Order 1 Rule 8 of the Federal Court Rules. If it were necessary to do so, I should be disposed to exercise this power. Accordingly, I do not find 1t necessary to decide whether there has been a non-compliance with the Federal Court Rules. Questions 1 to 7 of the questions set out above will be answered in accordance with the foregoing reasons. Question 8 raises issues similar to these raised by question 6 with respect to paragraphs (h) and (1) of the Rule to Show Cause. In my view, it is unnecessary to deal with these questions. A more fundamental objection to the relief ea i ee nee : - 29 - sought under paragraphs (h) and (1) was raised in argument during the hearing of the preliminary questions. Section 141(6) of the Conciliation and Arbitration Act 1904 provides as follows: "(6) An order shall not be made under this section that would have the effect of treating as invalid an election to an office in an organization or branch of an organization (other than an officially conducted ballot) that was completed before the institution of proceedings under this section unless those proceedings were instituted - (a) within the period of 12 months commencing on the date of completion of the election; or (b) after the expiration of that period but before the expiration of the period of office to which the election related, and the Court shall not proceed with the hearing of proceedings in which an order of the kind referred to in this sub-section is sought, being proceedings instituted in accordance with paragraph (b), unless the Court is satisfied that the verson instituting the proceedings, did not have, and could not by reasonable diligence have acquired, within the period referred to in paragraph (a), knowledge of, or the means of establishing, the matters that are alleged as a reason for the making of the order." An examination of the points of contention filed on behalf of the Applicant discloses that the relief sought in paragraphs (h) and (i) of the Rule to Show Cause is based on allegations that the persons who purported to comprise the Branch Council on 17th September 1980, which dismissed Mr. Prichard from his office as an organizer, were not properly elected to the Branch Council. These allegations are based on two propositions as follows: "(i) No rules for the election of Councillors of eT nes en ee ee eee ms -_ 4 - +6 eee eee wee - Denes ae ee MR eo a wn - 30 - the branch by sections of the branch were registered, and persons purported to have been so elected to the relevant branch Council; (ii) The branch rules did not provide for the election of persons to the branch Council, as required by section 133(1) (a) of the Act and Regulation 115(1) (d) of the Regulations." On behalf of the Applicant, Mr. Lindsay conceded that the persons who were elected to the Brancn Council which met on 17th September 1980 were elected other than by an officially conducted ballot within the meaning of section 141(6), and that ali relevant time limits referred to in the sub-section have expired. In these circumstances, the question arises whether the orders sought in paragraphs (h) and (i) of the Rule to Show Cause would "have the effect of treating as invalid an election to an office" in the branch. There can be no doubt that the election of a person as a member of the committee of management of a branch of an organization is an election to an "office"; paragraph (a) of the definition of "office" in section 4(1) of the Act expressly includes such a position. The relief which the Applicant seeks is expressly based upon the proposition that the election of the persons who purported to constitute the Branch Council on 17th September 1980 was invalid. An order could not be made in his favour without treating that election as invalid. This is so, notwithstanding that the order itself would not, on 1ts face, say anything about the election. The words "have the effect of treating as invalid" nn a a eorme . on — eee are undoubtedly intended to be broad. No guidance as to the meaning 1s to be had from the authorities; the sub-section was mentioned by Evatt J. in Cook v Crawford (1981) 52 F.L.R. 1 at pages 40-1, but His Honour found it unnecessary to consider the application of the sub-section. For this reason, the Full Court on appeal from His Honour's decision did not deal with the matter either. The decision of the Full Court is reported at (1982) 62 F.L.R. 34. In my view, 1f£ the draftsman of sub-section (6) had intended to confine its operation to an order which, on its face, declared an election invalid, different words would have been chosen from those which appear in the sub-section. For instance, a prohibition could have been enacted on an order "declaring" an election invalid (compare section 165(3)). The cho1ce of a wider formulation is, in my opinion, deliberate. Orders such as those sought in paragraphs (h) and (i) of the Rule to Show Cause, which have their basis solely in the alleged invalidity of elections, would be orders which would have the effect of treating as invalid those elections. It follows from this that the application cannot succeed so far as the orders sought in paragraphs (h) and (i) are concerned. By virtue of order 4 rule 15 of the Federal Court Rules, an application pursuant to Section 141 of the Conciliation and Arbitration Act 1904 is by Rule to Show RE re meek rep te em St ne e+ + - we ee - we ee ee ee ' Cause. The Rule to Show Cause is not itself a pleading. It is, therefore, inappropriate to strike out part of a Rule to Show Cause in reliance upon Order 11 Rule 16 which deals with striking out pleadings. The proper course, where part or parts of a Rule to Show Cause could not be made absolute, is to discharge that part or those parts. Accordingly, I pronose to discharge paragraphs (h) and (1) of the Rule to Show Cause in this matter. "