a93 CATCHWORDS Industrial law - conciliation and arbitration - construction of rules - Australian Theatrical and Amusement Employees Association - whether rule permitting overholding of office until the declaration of a subsequent poll for that office is contrary to s.140, Conciliation and Arbitration Act 1901 - rule providing that only branch secretaries shall be eligible to hold position of Federal Secretary - meaning of "eligible to hold" - whether Federal Secretary entitled to remain in office when no longer a branch secretary - Court's discretion in proceedings under s.141 where there is delay by applicant. $8.133(1)(db), 140 and Vd Oe YH aan DAVID SCOTT ALLSHORN v. | eee F Smithers A.C.J., Woodward 'wad poche 7 pie wt 20 September 1984 Melbourne IN ICTO INDUSTRIAL DIVISION BETWEEN CORAM: DATE: PLACE: ory OF AUSTRALIA STRI EGISTRY V No. 21 of 1984 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA DAVID SCOTT LSHORN Appellant (Applicant) and DAMIEN STAPLETON, CLIFFORD JOHN FIELD, SIMON J. NS, 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 EMPLO S ASSOCIATION Respondents (Respondents) Smithers, Woodward and Northrop JJ. 20 Sevtember 1984 Melbourne ORDER OURT ORDERS THAT: The appeal be dismissed. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V. No. 21 of 1984 we www INDUSTRIAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN : DAVID SCOTT ALLSHORN Appellant (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, DENIS SHELVERTON and THE AUSTRALIAN THEATRICAL AND AMUSEMENT EMPLOYEES ASSOCIATION Respondents (Respondents) COURT: Smithers ACJ, Woodward and Northrop Jd. DATE: 20 September 1984 PLACE: Melbourne REASONS FOR JUDGMENT Smithers ACJ: I have had the benefit of reading the joint reasons of my brothers Woodward and Northrop JJ. and I agree with their reasons and the orders proposed. I certify that this page is a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Smithers Dated: 20/9/84 SAtanns fe Associate IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) V. No. 21 of 1984 ) INDUSTRIAL DIVISION ) ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN : DAVID SCOTT ALLSHORN Appellant (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, DENIS SHELVERTON and THE AUSTRALIAN THEATRICAL, AND AMUSEMENT EMPLOYEES ASSOCIATION Respondents (Respondents) COURT: Smithers, Woodward and Northrop Jd. DATE: 20 September 1984 PLACE: Melbourne REASONS FOR JUDGMENT Woodward and Northrop JJ.: This appeal involves a challenge to the validity of part of Rule 18 of Rules of The Australian Theatrical and Amusement Employees Association ("the Association"), an organization of employees under the Conciliation and Arbitration Act 1904 ("the Act") and a challenge to the entitlement of Damien Stapleton to hold office as Federal Secretary of the Association. Rule 18 provides: "(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 shall 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 immediately following the declaration of state branch elections and the Returning Officer shall call for nominations for Federal Officers within twenty-one days of such declaration. Such election shall be conducted in accordance with Rule 42 of these Rules. (c) Only those members financial 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." David Scott Allshorn is a member of the Association. He sought a declaration under sub-section 140 (5D) of the Act that part of Rule 18(a), namely the words "provided that the incumbent Officer shall be deemed to remain in office until such declaration occurs", contravenes sub-section 140(1) of the Act. In addition Mr. Allshorn sought orders under s.141 of the Act, which in substance were directions that Mr. Stapleton cease to hold himself out as Federal Secretary and other directions consequential thereto. Mr. Stapleton is holding office under that part of Rule 18 which is challenged by Mr. Allshorn and thus, if that part of the Rule is deemed to be void ( see sub-section 140(5G) ), Mr. Stapleton cannot rely upon it to hold himself out as Federal Secretary. In addition Mr. Allshorn contends that since Mr. Stapleton does not now hold a_ position of branch Secretary he cannot hold the position of Federal Secretary by reason of the application of the last sentence in Rule 18(a). The orders sought by Mr. Allshorn were refused by the learned trial judge and Mr. Allshorn appeals therefrom. The challenge to the validity of part of Rule 18 can be disposed of shortly. Counsel for Mr. Allshorn contended that the challenged part of Rule 18 contravenes Paragraph (a) of sub-section 140(1) of the Act in that it is contrary to a provision of the Act namely paragraph (db) of sub-section 133(1). The relevant part of that paragraph is set out: "...the conditions to be complied with...by organizations include a condition that the rules of the...organization...shall not permit a person to be elected to hold an office within the...organization for a period exceeding 4 years without being re-elected..." Counsel contended that the challenged proviso to Rule 18(a) enabled a person to be elected to hold an office within the Association for a period exceeding 4 years without being re-elected. This, he contended, was illustrated by the facts relating to Mr. Stapleton. In recent years elections within the Association have been in a state of disarray. Elections were held in some States late in 1981 but were not held in the State of South Australia. Since then, the New South Wales elections have been found by this Court to have been conducted invalidly and directions have been given for fresh elections to be conducted. The Rules of the Association make provision for the election of Officers but those Rules have not always been followed at the times when elections should have been held. In November 1978 Mr. Stapleton was duly elected Federal Secretary pursuant to Rule 18 and since November 1981 has been holding office pursuant to the challenged proviso to Rule 18(a). In our opinion it cannot be said that Rule 18 contravenes paragraph (db) of sub-section 133(1) of the Act. That paragraph is concerned with the form of the rules of an organization, not with possible but unintended results of their application or, in this case, their non-application. The requirement of the paragraph is that the rules of an organization do not permit a person to be elected to hold office for a period exceeding 4 years without being re-elected. Rule 18 clearly provides for the Federal Officers to be elected for a period of 3 years. The proviso that the retiring office holder continues in office until his successor has been elected obviously is sensible to assure that, if an election is delayed, there is no interregnun. Such a provision is in keeping with both the letter and the spirit of the Act, particularly since the prescribed period for holding office under Rule 18 is 3 years only. We agree with the learned trial judge when he said: ",..-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." For these reasons Rule 18 is not, in our view, contrary to paragraph (db) of sub-section 133(1) of the Act and the learned trial judge was correct in so finding. Counsel for Mr. Allshorn contended further that the challenged part of Rule 18 contravenes paragraph (c) of sub-section 140(1) of the Act in that it imposes upon members of the Association conditions which are unreasonable or unjust within the meaning of paragraph (c) of sub-section 140(1) of the Act. We respectfully adopt what the learned trial judge said in rejecting that contention. His Honour said: : "As to the applicant's contention in relation to 5.140(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 J. in Bowden wv 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 @ manner as to prevent, or to overcome the effects of, any such misuse." For these reasons the challenge to the validity of part of Rule 18 fails. It follows that, 1n so far as the claim by Mr. Allshorn under s.141 of the Act depends upon a successful attack on the validity of Rule 18, that claim must fail also. There remains to be considered, the other claim under s.141 of the Act. This claim is based on that part of Rule 18 which provides that all the Federal Officers shall be elected from the Federal Councillors and that only branch Secretaries "shall be eligible to hold the position of Federal Secretary". Under Rule 11 of the Rules of the Association, the Federal Councillors consist of the branch Secretary and branch President from each state branch. In November 1978 when he was elected Federal Secretary, Mr. Stapleton was a Federal Councillor, being the branch Secretary of the New South Wales branch of the Association. In the 1981 elections for the position of New South Wales branch Secretary he was defeated. He successfully challenged the validity of the election but the Court ordered that his challenger continue to carry out the duties of the office of branch Secretary until a further election could be held. The Court gave directions for the holding of those elections. Mr. Stapleton has not carried out the duties of the office of New South Wales branch Secretary since March 1982. In this appeal no question arises as to whether he has continued to hold office as a Federal Councillor or whether the person who is carrying out the duties of the New South Wales branch Secretary is or should be a Federal Councilor under Rule 11. The first question to be decided is whether the rules merely require that the Federal Secretary should be a branch Secretary at the time of his election or whether they produce the result that he ceases to be eligible to retain the position if he ceases to be a branch Secretary. In our view, the latter is the case. In the first Place the rule speaks of eligibility "to hold" the position rather than to be elected to the position. More important is the basic scheme of the rules relating to Federal office bearers. They are all to be chosen from among the Federal Councillors, and the branch Secretaries and Presidents are the Federal Councillors. In addition, a number of the powers conferred upon the Federal Secretary by Rule 26 appear to be incompatable with the Federal Secretary not being a Federal Councillor. In this respect paragraphs (g) and (h) of Rule 26 are of importance in conferring the following powers upon the Federal Secretary: " (g) He shall be an ex-officio member of any Committee formed by the Federal Council or Federal Executive to advise the Association on any subject, and shall have the right to attend and speak at any Executive, General or special Committee meeting of any branch. (h) He shall have the right to vote as a branch representative at meetings of the Federal Council and Federal Executive, shall be allowed free speech on all occasions and shall be entitled to move or second and speak to motions. " It is clear that the intention of the scheme is that the Federal Secretary shall be a serving branch Secretary as well as being a Federal Councillor. This of course makes sense from an administrative point of view ina moderate-sized organization having a large turnover of members. However, as the solicitor for the respondents pointed out, the underlying intention of the framers of the Rules, does not necessarily govern their proper construction and effect when unexpected events occur. This short question of construction is, in the words of the learned trial judge, "one of some difficulty". We regret that we have come to a conclusion which differs from his Honour's; but we are not persuaded, as he was, that a contrast with the word 'entitled', used compendiously ina different rule, is helpful in construing the word 'eligible'. Nor are we persuaded to a different view by a broader study of the Rules in the light of policy considerations or convenience, We can see arguments both ways, but nothing which would cause us to look beyond the simple words "Only branch Secretaries shall be eligible to hold the position of Federal Secretary". We believe the natural meaning of this is that if a Federal Secretary ceases to be a branch Secretary he is no longer 'eligible' to be Federal Secretary. It then becomes necessary to consider what steps can and should be taken to deal with that situation. This was a matter which the learned trial judge did not find it necessary to determine. Rules 20 and 38, so far as they are relevant for present purposes, provide as follows: "20. EXTRAORDINARY VACANCIES An Extraordinary Vacancy is a vacancy caused by: (i) Death (1i) Resignation (iii) Removal from office in accordance with Rule 38 of these Rules. (a) Should any extraordinary vacancy occur in the positions of Federal President, Federal Vice-President, or Federal Secretary, the vacancy shall be filled by appointment of the Federal Council from the members of the Federal Council provided that the unexpired portion of the term is not more than twelve months. If the unexpired portion of the term is more than twelve months, an election shall be held in accordance with these Rules and in this case there will be no obligation to comply with Rule 42A (b) (ii) (aa-hh) of these Rules. Pending the declaration of such election the Federal Council may appoint any member of the Federal Council to carry out the duties of the vacant position in an acting capacity." "38. REMOVAL OR DISMISSAL FROM OFFICE (a) The Federal President, Federal Vice-President, Federal Secretary, members of the Federal Executive or any branch President, Vice-President or Secretary may be removed or dismissed from office by the Federal Council if found guilty of misappropriation of Association funds, a_ substantial breach of the Rules or gross misbehaviour, gross neglect of duty or has ceased to be eligible to hold the office provided that such person shall not be removed or dismissed until he has been properly charged and has had an opportunity of being heard in his defence py Federal Council in accordance with this Rule." Rule 38 seems to suggest that if it appears that a person has ceased to be eligible for a particular office, he must be 'charged' and given a chance to defend himself before he is removed from that office. Such a course would obviously be appropriate where it was suggested that an officer was unfinancial. It would also, in our view, be appropriate in a case such as the present where an officer appeared to have been defeated in an election which affected his eligibility, but wished to challenge the election. We can see no sufficient reason for denying the right of 'charge' and hearing to a person alleged to be ineligible when it is clearly available to one alleged to have committed a serious offence or dereliction of duty. id The notion that such eligibility requirements are not self-executing under the rules is confirmed by Rule 20 which lists the ways in which extraordinary vacancies may be caused. It makes no separate provision for ineligibility. In our view a fair reading of the Rules produces the result that, if a person appears to lose his or her eligibility for office, the matter falls to be determined by the Federal Council, and if the Federal Council decides, on proper grounds, to take no action, the apparent loss of eligibility does not prevent the person concerned from continuing in office. On the other hand, if the Federal Council appears to be not performing or observing the Rules, the Court has jurisdiction to deal with the matter if its powers are invoked. In the present case, the Federal Council has taken no steps to have Mr. Stapleton removed from his office of Federal Secretary. Whatever the Court might otherwise decide, in the exercise of its discretion under sub-section 141(1G) the Court has power to make no order. In the present case the learned trial judge said that, if he had found it necessary to do so, he would have exercised his discretion against the making of an order. His reasons for so finding, briefly expressed, were that the applicant had delayed in seeking a remedy and, in any case, the Association was now well advanced towards holding the State elections in New South Wales and South Australia which were seen as necessary preliminary steps to the holding of an election for Federal - 12 - officers. We can detect no error in the reasoning which led his Honour to this conclusion and so, even if we had been persuaded by the appellant's arguments on the legal issues involved, we would have refused the orders sought. For all these reasons the appeal should be dismissed. I certify that this and the eleven preceding pages are a true copy of the Reasons for Judgment herein of The Hon. Mr. Justice Woodward and The Hon. Mr. Justice Northrop Asso The Hon. Mr. Justice Woodward Dated: 20 September 1984