CATCHWORDS Industrial law - Conciliation and Arbitration Act 1904 - registered organizations - application of funds and resources in publishing material allegedly supporting one candidate during an election - duty of Union Officials to exercise powers conferred upon them by the rules bona fide for the purposes for which the power is conferred - tests regarding application of Union resources while elections pending - prohibition upon use of resources to support a candidate - exercise of power to inform members of matters of interest - breadth of order Court can make pursuant to s.141 of the Act - perpetual injunctions. Conciliation and Arbitration Act 1904 - s.141. R.J. SCOTT & ORS V. MICHARL PATRICK JESS NSW Nos. 11 and 14 of 1984 Coram: Evatt, Northrop and Gray JJ Date: 5 October 1984 Place: Melbourne. IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) N.S.W No. 11 of 1984 ) INDUSTRIAL DIVISION ) ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN : R. J. SCOTT and OTHERS Appellants and MICHAEL PATRICK JESS Respondent CORAM: Evatt, Northrop and Gray JJ. DATE: 5 October 1984 PLACE: Melbourne ORDER THE COURT ORDERS THAT: 1. The Appeal be dismissed. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N.S.W No. 14 of 1984 er ee ee ee INDUSTRIAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: R. J. SCOTT and OTHERS Appellants and MICHAEL PATRICK JESS Respondent CORAM: Evatt, Northrop and Gray Jd. DATE: 5 October 1984 PLACE: Melbourne ORDER THE COURT ORDERS THAT: 1. The Appeal be allowed and the orders made by the Court on 30 March 1984 be set aside. 2. The rule nisi be discharged insofar as it relates to the orders made on 30 March 1984. N.S.W Nos. 11 and s2 af 1984 Zz 'rt =iB 'Ss 'ic Rad x= i = '> i iw ( fand Pa as ~ wt '2 ea t Es] 'od 'as Raead oY > boa] < vuevese ON_AFFRAL_FROM_THE FRIEERAL COURT OF _AUSTRALIA BETWEEN: R._J._SCOTT and OTHERS Appellants and MICHAFL PATRICK JESS Kespondent CORAM: Evatt, Northrop and Gray JJ. NATE: S Oetober 1994 PLACE: Melbourne Evatt and Northrop J3.5 With the consent of the parties these two appeals were heard together. {In fact both appesls arise from the one proceeding in the Federal Court of* Australia, namely matter N.S.W. No. 1 of 1984, and all issues between the parties raised by the two appeals could have been determined in the ome appeal. The facts giving rise to the appeals are somewhat complex tut can be stated shortly. Michael Patrick Jess {heroinsfter called "the applicant") 16 a member of the Amalgamated Metals Foundry and Shipwrights' Union (hereinafter eslled "the Unoon")d, an organisation of enployees winder the Conciliation anid Arbitration_Act 1904 (fthe Act"). In the latter part of the year 1983 and the early part of the year 1984 elections wnder tne rules of the Union were beang conducted far the three posations within the Union of: Ca) State President, Queensland Brarneh; (tb) Regional Delegate to National Conference; tc) Natoronal Orgsnmiser, Tivisioen 4. The ballots, being postal ballots, for the elections to those positions opened on 23 Janusry 1984 and were to close on 17 February 1984. Mitch Cirechanowski and Eryant Burns were the candidates for the position of State Presideni, Queensland Hrancn. Charles Bali and Robert Adamson were the candidates for the position of National Arganiser, Bavisacn 4. in January 1984, typical elecbionesring pampnlets were distributed among members eligible to vote in the tnree elections on behalf of each of Bali, Criechanowsti ard Adamson. Burns and Adamson were the holders of the positions far which the elections were being held. A batter campaign was being conducted between those members of the Union, including Burns and Adamson, and the majority of the existing officers of the Union om tne one hand, and those members of the Union, aneluding Bali and Ciechanowsk1, who were conducting the campaign 9s 3 reform group. Roderick Kelly, another member of the Union, w3s a member of that reform group. The electioneering pamphlets reflected the batterness of the electors] campaign, being haghly commendatory of the candidate being supported and being highly derogatory of the opposing candidate. The applicant makes mo complaint about those electioneering pamphlets which sppear to have been paid for from funds other than funds of the Union. From time to time the Union publishes and distributes various publications including "The Motalworker", a tabloid newspaper which is posted to each momber and which 15 published eleven times 3 year, "The A.M.F.S.U. Quarterly Journ3l*, which 15 posted to certain Union officials for distribtutian to memtors st verious places Within the structures of tne Union, amd 3a "National Newsletter" which is published from time to time on an irregular basis. Rach of these publications 16 published ty the Nationsl Couneil of the Union. Copies of the National Newsletter normally have endorsed on them that the newsletter is authorized by the Union's National Council. A National Newsletter dated 24 January 1984 was published by the National Cowneil. Endorsed on a1t was 3 statement 'Authorined by Lack Secoit, National President". On one view, the contents of that newsletter tended to support or promote the group of candidates in the three elections who were being supported by the majority of the officers of the Union and sought to defeat the candidstes contesting the elections, including Bsli and Ciechanowski, being candidates being supported by the reform group. That issue of the Natronal Newsletter was published and posted to members of the Union entitled toa vate at the three elections by the use of resources, including money and manpower, of the Union atsejf. A similar National Newsletter dated 25 January 1984 having a similar tendency, was published and distributed amongst members af tne Union entitled ta vole ai the elections. On 3 Februzry 1984 the applicant made amex parte application to the Court for orders under s.141 of the Act. The appellants were named as respondents to 3 rule mis3 sought under O.4 r.iS of bhe Rules of Court. Hereinafter the appellanis are calted "the respondents". Each of the respomients is a menber of the Union and thus under an obligation to perform or observe the rules of the Union. Fach of the respondents 15 an officer of Line Union and either severa)dly or jointly have power, under the Rules of the Union, to publish and dastritute the National Nowsletter and the other publications of the Union snd to expend the resources of the Union for that purpose. Under sub-section 141¢16) of the Act, the applicant sought arders that esch of the respondents perform or observe the rules of the Union by refraining from using or permitting any other person from using the Union's property, funds or resources to support or promote 3 candidate or group of candidates or to defeat a candidate or group of candidtes ain the ballots for the three positions set out above, and an particular an order in similar form was sought with respect to the publication and distribution of any newspaper, newsletter, pamphlet or similar publication having the same tendency. In addition, an order was sought that the respondent Scati, and such ather of the respondents who had authorised the publication armel distribution of the two National Newsletters dated 24 and 25 January 19¢4 respectively, te ordered to repay to the Unian the costs incurred by the Union an publishing and distributing those two newsletters. For the purposes of the appeals, the last order sought may fe agmored since the hearing of the application seeking that order nas not bean held and to that extant the application has been adjourned sine die. The Court granted the ex parte application and a rule mis1 was 2156uNed calling upon the respondents to shaw ecsuse al twelve noan on 3 February 19384 why the orders set out in the rule misi should not be made. At the same time as granting the rule masi, the Court made am interim order under sub-sechion 141¢2) of the Act requiring esch of the respondents to perform and observe the ritles of the Union am relation to the publishing = and distribution of documents tending to have the effect referred to above with respect to the three elections. The interim order was to remain ain force until the end of 3 February 1984 or until further order. On the return of the rule misi on 3 February 1984 the applicant relied upon a further National Newsletter dated & December 1983, which was stated to be suthorized by the National Council and having 3 tendency to affect the election Similar to the other two newsletters slready referred to. At the hearing, the respondents, without conceding liability, consented to the continuation of tne anterim order until further order. Under normal circumstances 1% would have been expected thst the interim orders would cesse to have effect after 17 February 1984, being the date the ballots closed. Thereafter, the only unresolved matter arising from the rule masz was the applicstion for the refund of the monies expended. The hearing of the rule misi was then adjourned to 23 February 1984, On 23 February 1984, the applicant was granted leave to amend the rule m2s2 to anclude claims for orders seeking the repayment of ntoaney to the Union with respect ta the three National Newsletters already mentioned and am issue of the "The Metalworter" dated ] February 1984. The rule misi im so far as 1t seers other orders has mot yet been heard and may be ignored for the purposes of this sppeal. More importantly, the applicant was granted leave to amend the rule isi to include claims for orders similar to those contained aim the interim order, but with respect to elections to the following posations within the Union, namely: Ca) National Secretary; (hb) National Organisers; (ec) State Secretary, Queensland Branch; (d) Assistant Secretary, Tasmanian Branch} (ed) State Secretary, Western Australian Branch. It 15 important to note that the elections for those positions were to te held later in the year 1984, but at the tame leave was granted none of those elections had commenced. On 23 February 1984, the respondents moved the Court for orders under 0.20 r.2 of the Rules of Court that the rule nisi be discharged on the ground that 1b disclosed mo reasonable cause of action. Submissions were limited to the ground relating to publication of materi3sl which had 3 tendency to affect elections within the Union. The submissions cam be descrited as relating to the jurisdiction question, On 2 March 1984 the Court made am order declaring that the Court had jurisdiction to entertain the application under 5.141 of Lhe Act and refused the motion for summary dismisssl of the proceedings. Appeal N.S.WU. Now ll of 1984 1s an appeal from those orders. That appeal was filed on 16 March 1984. espite the appeal which had teen filed on the jyurisdactzon question, the rule misi came on for further hearing om 20 March 1984. On that hesring, which extended over several days, ait was apparent that the nature of the proceedings had changed completely from those which were the subject of the rule masi a8 originally ottained. The hearing, which conmenced on 20 March 1984, related to the five elections which hed not commenced, Orders were being sought with respect to those five elections. €n affidavit by Roderick Kelly was rolied upon by the applicsnt. In that affidavit, Kelly said: *IT will be submitting my momination as 3a candidate for the position of National Secretary of the Organisation, elections for which are duc to CbheJ held later this year. I expect that nominations for thst position will open early in May and close im early June 1984, Twill be standing an that election." 'The sffidavit identafied 3 number of issues of "The Metalworker', "The A.ME.S.U.L Quarterly Journal", and "The Newsletter', which were exhibited to the affidavit and covered the period from July 1981 to November 1983. Material ain those publications could be said to be detramental to the interests of Selly smd other persons within the reform group. The applicant rejJired also on an affidavit by Emanuel Lockiley relating to events which occurred im March 1984 in relation to the State Conference of tne Tasmanian Branch and the publication of a report made to that conference which could be said to be detrimentsl to the interests of persons within the reform group. At the same time 1t ius fair to say that the materj3] complained of in tne publications and aim the report of the State Conference were matters of general anterest to nembers of the Union snd spprapriate to be made the subject of publication Lo members of the Union. The deponents of the affidavits filed on behalf of the applicant were mot cross-examined. The respondents called no evidene.. lee mature of the relief sought by the applicant is illustrated by two paragraphs of tne affidavit of Kelly. Those paragraphs are an the nature of pleadings but they are set outs "13. I fear that wnless restrained by this Honourable Court the Respondents will continue to publish articles ain Union publications which attack me and other candidates who are likely to be cantesting ballots for positions of National Secretary, two National Organisers, Queensland State Secretary and Assistant Secretary, Tasmanian Branch. Elections for these positions will be held between May and August, 1984. In addition, an election for the position of Western Anstralian Branch Secretary must yunder the Rules of the Organisation be held prior to fecember 1984. In my capacity as National Convener of the 'Reform Group' of the Orgnarsation I know that members of the 'Reform Group' will be contesting each of the shove positions. 14. 1 fer thst unless restrained by this Honouratle Court the property, funds and resources of the Organisation wiil be expended im seeking te promote or defeat a candidate or groups of candidates ain the forthcoming Union elections by the prantang and odastraibution of publications containing articles or comment similar to those found ain the aforementioned Exhibits." During the course of the hearing the applicant sotgnt to amend his claim for relief to 3 form contained in a document which was handed to the Court. On 30 March 1984 the Court made orders in the form sought by the applicant. Those orders are sot ont in full: "1. The Respondents and each of them perform and observe the Rules of the ANALGAMATED METALS FOUNDRY ANL SHIPWRIGHTS UNION ('the Organisation') by refraining from publishing or distributing Lo members of the Organisation or causing to be so published or distributed out of the property, funds or resources of the Organisation any meawspaper, newsletter, pamphlet or saimilar publacation which supports or promotes or tends to support or promote or which seeks to defeat any person or group of persons who have informed the Organisation ain writing that he or they intend to nominate in ballots for the follouwns offices and positions in the Organisation:— (3) National Secretary; (th) National Organisers; (o) State Secretary, Queensland Branch; (d) Assistant Secretary, Tasmanian HRranchs (e) Stote Secretary, Yestern Australia Branch, or which seers to intluence members of the Organisation im relation to voting in the said ballots. The Respondents and each of them perform and observe the Rules of the Organisation by refraining from using or permitting any person from using the Organisation's property, funds or resources to support or promote a candidate or group of candidates or to defeat any person or group of persans who have informed the Organisation in writing that he or they intend to nominate in tallots for dhe offices and positions referred to im Order 1. or ta influence voters voting ar lirely to vote im ballots for such affices. From the date upon which nominations are called for the offices referred to an Orders 1. ariel 2. above, the Respondents and each of them perform arud observe the kules of the AMNALGAMATEL METALS FOUNDRY ANT SHIPWRIGHTS UN10N ('the Organisation') ty refraining from publishang or distributang ta mhembors of the Organisation or causing to be so published or distributed out of the property. funds or resources of the Organisation any mewspaper, newsletter, pamphlet = or similar publication which supports or promotes or tends to support or promote any candidate or group of candidatas hominating for such offices or which seers or tends to defeat 3 candidate or group of candidates or which seers or tends to influence voters voting or likely to vote in ballots for such offices. The Kespondents and each of them perform and observe the Rules of the Organisation by refraining from -~ili- using or permitting any person from using the Organisation's property, funds or resources to support or promote a candidate or group of candidates or to defeat 9 candidate or group of candidates or to influence voters in the s3id buzllots referred to im Order 1." Appes) N.S.~.W. No. 14 of 31984 15 the sppeal from that order. . On the nearing of the appeals two main 15sues were raised; first, the jurasdiction question, mamely whether the Court had jurisdiction to make the order on 30 March 1984, and secondly, 1f so, was the order made in 3 form which was within the power of the Court to make? The second question essentially raised issues as to the inappropriateness of the order made. It 1s mecesssry to consider first the jurisdiction question, agnmoring for that purpose the particular objections to tae form of the order made. Tne jurisdiction of the Court to hear spplications of this kind 16 contained in 5.141 of the Act. Sub-sections (1), (16) and (1H) are set out: "141.¢1) A member of an organisation may apply to the Court for an order under this section an respect of the organisation. (1A) an order under this section may give wirections for the performance or observance of any of the rules of an organization by any person who is under an obligation to perform or observe those rules. (1H) The Court has jurisdiction to hear and determine am application under sub-section (1) but, before making an order under this section, the Court shall give any person 39g31nst whom the order 15 sought an opportunity of being heard." Under sub-section 141019) of the Act, the Court has power to 'give directions for the performance or observance of any of the rules' af the Union. The nature of the directions that can be given are many and varied and are to be moulded to ensure the performance or observsence af the rules. A consideration of the judgments in RR. ve. The Commonwealth _ Court C.L.&. 141 allustrates the wide mature of the jurisdiction and powers conferred by 5.14] 1m its earlier form. A reference to the many decisions of the Commonwealth Court of Conme1lration and Arbitration, the Australian Industrial Court and this Court likewise illustrates the wide mature of the directions that may be given under sub-section 141(18). One aspect of (1977) 31 F.L.R. 431 per Evatt snd Northrop Jd. at pp.483-9. Tn3t passage should be reat ain full. In summary, the principles therein stated may te set aut briefly. Officers of an organication are under a duty to exercise powers conferred upon them by the rules of the organisation bona fade for the purposes for which the powers are conferred. That is a statement of principle having general application to officers of organizations. [bt ars but one aspect of a general principle having application far wider than to officers of organizations. As recently as 1981, in Ascot Investments Pty. - 13 - Lid. ve. Harper (1981) 148 C.L.R. 237 at pp.348-9, Gitbs J., a5 he then was, in speaking of directors of 3 company, said: *The directors are bound to exercise their discretion bona fide in what they consider to be in the anterests of the company, and not for any collateral purpose, but subyeck to that qualafication their discretion 15 shsolute and uncontrolled: In_re_ Smith_&%_ Faweett Ltd (£19427 Ch. 204, at pp-.306-208) 5 Charles Forte Investments Ltd ov. Amanda (C1964]7 Ch. 240, at pp.252-254, 260-261)35 Australian. Metropolitan Life Assurance Co. Ltd v. Ure ((1923) 33 C.L.R. 199,at pp. 205-206, 217-220, 223). This rule 1s Bm application of the general principles governing the exercise by directors of their powers; thase principles are discussed in Ngurli Lid. v. MeCann ((1954) 90 C.L.R. 25, at pp.4398-440). The cases cited establish that the onus of proving that the directors in refusing regisiration did not act in good faith an what they considered to be in the interesis of the company lies om those who challenge their decision." See also Russelj}__ Kansels_ Pty. _Ltd.(In Lig.) v. Kansels £19831 2 N.S.W.L.R. 452, and the many cases referred to in that judgment. It follows, tnerefore, that af the members of 43 committee of an organisation, or aif an officer of an organisation, resolved to exercise a power conferred wpon them by the rules of the organization otherwise than bona fide for the purpose for which the power was conferred, a member of the organization would be entitied to obtain an order under sub-section 141¢(1G) of the Act. The normal form of directions 3Ziven by that order would be that the respondents to those proceedings perform and observe the rules of the organization by treating the resolution so made as being void and of no - 144 - effect. If moecessary, similar directions would be given wath respect to any actions taken or to be taken pursuant to the void resolution. Over the years, the Commonwealth Court of Conciliation and Arbitration, the Australian Industrisl Court and this Court heve spplied another gener3sl principle. The general principle is illustrated by Short v. Wellings (1951) 72 C.A.R. 84, although ain reality that case 1s based om the principles enunciated im Allen v. Townsend atove. In Short v. Wellings, an election to offices wathin an organisation was about to be conducted. Before the election commenced, a special meeting of the members of the branch of the organisation involved resolved to direct the resources of the branch to the promotion and support of the candidature for office of 3 group of mominees chosen or to be chosen to stand for election. The complainant obtained 3 rule misi calling upon mamed officers of the organisation, being some of the mombers of the tranch, to shaw cause why orders should not be made that they perform and observe the rules of the organization by treating the resolution as of no force and effect and by refraining fron giving effect to the resolution and by refraining from wsing the resources af the organisation for the purposes of the resolution. In defence, the respondents to that proceeding contended that the resolution was in furtherance of an object of the organisation, a5 contained in its rules. In rejecting that contention and aim w-rking the orders sbsolute, tne Commonwealth Court of Concaliation and Arbitration comprising Kelly C.J., Foster and Kirby JJ. said at pp.87-8: "Tt must be plain that the objects of the organisation can only te carried out in accordance with ais rules, The branch an respect of 1%s atfairs 16 further limited, am the sttainment of the objects of the organization by at, by the branch rules. The branch rules provide for the election of officers and members of 1t5 Committee of Management. Although there 15 mo specific rule against tne use of the resources and furds of the organisation for the support of particular candidates at any such 'election, to wuse the property and resources of the branch for such 3 purpose would deny the right of such candidates as vere not ta ke supported by the organisation, 1%5 Committee of Management, its several authorities, 14s resources or funds, to the freedom = = ard equality ain their candidature to which the election rules amply they are entitled. * The funds and resources of the organisation belong as much to them and their supporters as to their opponents and theirs. 14 cannot be denied that the provisions af bhe Act and Lhe regulations are directed ia the end of having the management and eontrol of the affairs and transactions of an organisation reposed in 3 demecratically and freely elected body of SNBCULLVE ared admanistrstlive officers. Sa 0far as the organization is concerned every member, qualified under sts rules, has the right to stand for election to an office. To allow the resources of the organisation to be wsed aun a campaign for has Jefeab n.oaild be 2 oalenval of Liat tundsmental right. Yt would enable the existing evecutive, am whose hands the resources of the organisation lie, to use those resources to defeat all opposition to, or criticism of, ats will. Tt could result an a complete tyranny and a permanent denaisl of the democratic mature of the organisation, which the Act and the reguiations are calculated to ensure." That pranciple was stated with respect toa pending election, tut there the resolution wss directed specifically to the expenditure of resources of the organization to support particulsr candidates at that election. Tne principle has application to ballots im an election and also to supporting a particular view in a2 ballot taken purswant to a plebiscite of mentors. The principle has been applied, for example, in - 16 - Holmes v. Raaordan (1956) 86 C.A.R. 180, Lynns v. Neegan (1978) 35 F~aL.R. 430, Kanan v. Hawbrains, 14 September 1979, Federal Court of Australis, I.B. Sweeney J.~, unreported, and Valentane v. Butcher (1981) 51 E.L.R. 127. In each of those cases application had been made under s.141 of the Act or the predecessor of that section. In Valentine v. Butcher, Keely Jd. stated the pranciple at pp.138-9 as follows: "In my view the prancaple prohibiting the use of the resources af 23 registered organisation in Support of one candidate 16 a principle that the use of such resources 1s not to be granted to one candidate and denied to another. It soems to me that an important part of the pranciple enunciated by the Commonwealth Court of Conetliabtion and Arbitration ain Short ve. Wellings (1951) 72 C.A-R. 84, a5 applied by thas Court (J.B. Sweeney J.) in Kanan's__case (Unreported - F.C.A., 14 September 3979), 1s that those resources must not te used to defeat a candidate. In my view the implied prohibition wpon the wse of bnhe organicatian's resources does mot apply where those resources are im Fach equally avairlable to 311 carmdidstes. The pranibition as upon the use af the resources or funds of an organization to support one candidate In oan election in circumstances where they have been dented or will be denied to | «oanmother candidate. As at 1s expressed an Short v. Wellings such a denial (given that the resources 'belong' to koth sides an the election) in a feampaign for bis defeat' is %3 denial of that fundamental right' to 'stand for election' toa 'democratically and freely elected body of executive and adminastrstive officers'." Tne principle has been applied in proceedings being san election anquary under Part IX of the Act. In Ke_Penhallurich (1983) 51 A.L.R. 589, Fitagerald J. was conducting an inquiry into am election in the Transpori Workers' Union of Australia. At p.595 he relied upon the principle that: - 17 - ea. VON an the absence of 3m express provision in An organisation's rules, there 15 am amplicit prohibition upon the use of the resources or funds of an organization to support one candidate im an election an circumstances where they have been denied or will be denied to another candidate." His Hanour held that 3s contravention of that principle, although not coming Within the extended definition of irregularity contained am se4 of the Act, nevertheless could constitute an aurregularity within the meaning of thst word, and if that irregularity may have affected the result of the election (see sut-sectiom 165¢4)), the Court would be Justified on declaring that election void; see sub-section 165(3). The reference to the objects of the Act as set out on s.2, and the detailed provisions contained in the Act and the Concilration and Arthatration Regulations relating to the @lection of officers within an organisation makes 1t clear that those elections must be conducted fairly, having regard to the anberests of 311 members and of all candidates. Implicit iam that concept of fair play is the principle that the officers exercising power within an organisation shall not exercise that power to authorise the use of the resources of the organisation to support or promote a candidate or 3 group of candidates or to seer ta defest 3 candidate or a group of candidates during the conduct of am election to offices within the organisation. In the present case 1t 15 not necessary to determine what are the limits of the conduct of an election, For present purposes 1t 1s sufficient to say that the election - 18 - commences at least at the closing of nominations for candidates for the election and continues at least until the close of the ballot for that election. If during the canduct of an election, officers of am organisation expend the resources of the organization on conduct which tends to support or promote a candidate or a group of candidates at that election, directions may be given under sub-section 141(1G) of the Act that they perform and observe the rules of the organisation by refraining from so expending the resources of the organization. Of mecessity, the rules cannot provide for that type of expenditure, any specific rule purporting to authorise that type of expenditure being, im all probability, an contravention of sub-section 140(1) of the Act; ef. Dugmore v. Forter (1983) 3 I.R. 418, and on appeal*Porter v. Dugmore, 2 April 1984, unreported. It follows, therefore, although 114 15 mot necessary to decide, that im 311 probability the interim orders made herein on 2 January 1984 and 3 January 1984 were made correctly. The order made on 30 March 1984, however, calls for further consideration since the conduct complained of by the applicant did not tare place while the elections were being conducted. It cannot be dowkted that officers of an organization have a power to inform members of matters of interest to the organization and ats members and for that purpose to expend the resources of the organization. It 1s for the officers of the organisation to determine what matters of interest may be the subject of such information, the nature of that ~ J9 - information and the amount of the resources of the organization to be expended. Eventually, ait is for the nenbers of the organization to exerer1se control over the officers as provided ain the rules. At times the information published may be contentious and may seem to be favouring one group within the organisation and disadvantsaging 3 competing group. If a member can prove that the publication of that information was mot made by the officers bons fide for the purpose of the power conferred wpon those officers, orders under sub-section 141018) of the Act may be made directing the officers to observe and perform the rules of the organization by refraining from cxpending the resources of the organisation for the publication of that ainformation. Likewise, if officers comstaituting a committees of the organization resolved to expend resources of the organmination for purposes which are not permitted by the rules of the organisation, similar orders may be made; see for example Short v. Wellings above. In the present case the applicant relied upon material published by the respondents, or some of them, at the expense of the Union over the period July 1981 to February 1984 and contended that the respondents ar some of them would continue to putlish, at the expense of the Union, similar material detrimentsl to the reform group during elections ta be conducted later in the year 1984. In has reasons for judgment the learned trial judge said: "It 18 not appropriate that I reproduce or even attempt to summarise such a volume of material. But, im order to understand the applicant's claim, reference should be made to the text of some of the more recent publications. The National Newsletter dated S [ecember 1983 reads, so far 36 material as follows: 'Workers must have Unions they can rely on LIES ANI SLANIER ARE NOT LEADERSHIP A campaign is being waged to denagrate the role of the AMFSU im the working out of the economic Accord between the Labor Government snd the Unions. Since Labor's victory ain the March Election the focus of the Union's work has shifted from the purely industrial area to the political stage. We are seeking to obtain by working with the Labor Government what, under the Fraser Government, we could achieve only by stopping work and walking out the gateu AMESU Officials played 3 b19 part in drawing up the Accord with leading ALP figures before the last Federal Election. DESTRUCTIVE ELEMENTS One would think that 311 members genuinely interested in gettang the most from our Union's work would aim for the maximum possible unity im action. However 1t seams that a few are hell bent on trying to destroy our unity. They spend all their time throwing muck at the Union's leadership. Recent events have provided clues as to why they should do this. As revealed an the June 1983 Metal Worker, 3 leading light ain the Queensland Literal Party has been touting for signatures on a petititon against the Union leadership. This Liberal Leader - mot a member of tne AMFSU - said it Was mecessary to change our Union leadership in order to help the Hawke Government. . The former secretary of the right wing National Civic Council, Gerald Mercer, admitted the NCC spent $140,000 on AMFSU National Elections last year. Mercer, speataing om AKC Radio om May 26th, said the money was spent im support of so-called 'reform group' candidates - candidates who didn't win even with this massive financial backing. THE UNANSWERED QUESTION Metal workers must ask why such enormous funds are avallable to forces trying to get raid of the Unaon's current dedicated and expert leadership.' Similar comments were made in 3am editorial written ty the farst respondent, the Union's National President, an 7The Metsalworker' dated November 3983. The report of the Gtate Secretary of the Tasmanian Branch dated 7 March 1984 reads, so far as Material: At the last Conference I[ made reference imn omy report to the attacks an the Union. The same people who were responsible for the attacks an the Union at the time of my last report are still continuing those attacks and indeed were successful in Tasmania to the extent that they secured tha position of State Secretary and twa State DBolegates Lo the National Conference. They have also secured a position of National Organiser, they were unsuccessful im other states where they nave tried to Wirt positions of full-time officials snd State delegates to Nakional Conference. With reference to their sveress in Tasmania, this was brought about partly as oa result of the finances the s0 called Reform Group has teen able to obtain from sources outside of the Union. How many members who voted ain the election would be aware that the Reform Group has the backing of the National Cavac Council, who have an wnenviable record of anterference im the sffairs of Trade Unions throughout Australia. That interference am Tasmania went to the extent that the publications put out by the kKeform Group om support of ats team contained statements mot made by the candidates tut dependant on half truths snd oannuendo to make wp for the lack of wniom policy amd actavaty of the candidates. Finally delegates should be aware that the so called Reform Group have already indicated thal they aintend to oppose Bro. Finn as Assistant State Secretary." Simzlar comments were made by Queensland state secretary in address to the 1984 State Conference held on 16 and 17 February 1984. Earlier editions of Line Union publications which were tondered s3iso tock up the theme which emerged from the passages quoted above. For example, 'The Metalworker' for the month of June 1983 contained an article in these terms: "LIBERALS' BID FOR CONTROL OF AMFSU Senior members of the Queensland Liberal Party are waging 3 dirty tracks campa2z9n against the AMFSU. They are part of 3 national network oubsiders attemptin*s* to soeise control of the union. Prominent an the campaign in Queensland 2s the ehairman of the Capricornia district of the Liberal Party, businessman Norman Byrne. Byrne, 32 former motor company manager, 215 asking metalworkers im Rockhampton to $19n 3 petition astaing the Industrial Registrar to stop AMESU rebursang officers holding GPleclions for positions. These elections are due im the next few months » Byrne 1s not an AMFSU member. OUTSIDERS In the central Queensland town Kiloels three businessmen sre seeking signatures for the same petition. also are not AMFSU members. They Norman Byrne has a long history of opposition to trade wnionism, and 15 conmected with the extreme right-wing National Civic Council. In September 1972 Byrne organised a sinner for NCC leader B.A. Santamaria in Rockhampton. A&A photograph of &Eryne welcoming Santamaria to the city appeared in the Rockhampton Mnrnang Bulletin. Santamaria has admatted the NCC funded 'Reform Group' candidates led by Rod Kelly im AMFSU national elections last year. Byrne, the Literals and the NCC are now supporting those masquerading as the *AMESU Temocratic Kank and File'C*'mmittee' for the purposes of the farthcoming Slate elections. The elnactions are for the State Fresidency, held by Brisn Burns, and tMine National Conterence delogaleships. The 'Lemocratic Rank and File Committee' claims the elections will be undemocratic and confined to members attending branch meetings af conducted by tne union's returning officers. This 15 3 lie. Under unmion rules, these elections would be by a full and secret postal ballot of all unacn members eligibje to vote. The ballot would not be held in the branches 35 cl3imed by the 'Democratic Rank and Eile Committees', So much for their Fnowledge of the wunion's rules. Campaign Literature from the 'Democratic Rank amd Erle Committee' is a mixture of lies, innuendo and slander! Its theme 1s thal the AMFSU leadership 1s somehow 4 threat to the federal Labor government. Union leaders, according to Norman EByrne and Co, aim at "stirrang dissension and destroying the kind of harmony and conciliation which the Hswre government 16 endeavouring to develop', Metalworkers will te touched to learn that the Liberal Party and people like Norman Byrne have had 3a change of heart and mow support Bob Hawke and the ALP. The AMNFSU and ats leadership showed their support for the ALP by donatang $50,000 ta Labor campaign funds. Bok Hawke callected tie cheque in person at B meeting of AMFSU National Council shortly before the election. "Bob Hawko s3id then that the ANFSU should be congratulated for giving 3 lead to the rest of the trade union movement ain negotiations with the ALP over the economic policy Accord. He said: 'T applaud the remarkably constructive way im which this unzonm has operated." He added: 'Tf thas ourion had not adopted such 3n spproach on a prices and amcomes pelicy 11185 very unlikely the ALF would tbe going imto an election wath the confadence we have.'? The 1assue before the learned trial judge as stated by him was whether: "swe. the powers in question have been abused by the application of Union resources for the advancement of ome sectional anterest only rather than am the interests of members as a whole. This aun turn amvolves a question of fsct which falls to be determined on the documentary material tendered by the applicant." His Honour then censiadered the msterial published as being published by the respondents at the expense of the Union in the context of an election for offices within the Union. He charscterized actions by the respondents as being conducted With a view to influencing the outcome of the election with the object of anvancing the prospects of one group of candidates at the expense of the opposing faction. In other " an | words, he relied upon 3 principle similar to that set out in Allen v. Townsend above, tut ain the absence of any particular resolution entered anto by a committee of the Union. He based his findings om publications instead of conduct engaged in while an election was being held. The issue as stated above srose because of the contentions made before him on behalf of the respondents and based on Holmes v. Riordan above, and am particular from the Opinion expressed by Hunphy J. at p.197, mamely that during an election, resources of am organisation may be used to publish Material adverse to a candidate to rebut attacks nade by the candidate upon the organizatiron or 245 management. At the time af the hearing of the application before the learned drial gudge there was no clection being conducted and so the principle stated an Holmes v. Riordan did mot arise for applicstion. In any event, a1 15 doubtful whether that statement is correct. A candidate at am election may be quite justified in attacking the management of am organisation Ey its officers, particulariy if those officers or their supporters are competing candidates at tne election. It would be unfair if an attack of that band entitled the opposing candidates to use the resources of the organisstion to further their own interests and to denigrate the interests of the challenging candidate. If that 15 to ke done, ait should be done at the xpense of the opposing candidates or their supporters, mot at the expense of the organization. However, in the present case 1t 25 not mecessary to determine that issue, It as sufficient to say that 21% 15 ampossible to ~ ~ 26 - determine am advance what conduct engaged ium during an electaon would gyustify officers of an organiscation expending the resources of the organisation to aunform members of the organization of the true position relating to that election. If the question does arise, 1% will be a matter for the judgment of the officers concerned to determine on the facts of the particular case amd am the Jlaght of the principles expressed above whether the resources of the organisation should be exponded for the purpose of publishing information to members of the organication. In the present case the applicant did not attempt to rely upon any resolution of the kind existing im Short v. Wellings above. No election was being conducted. The applicant sought to rely upon what be clained to ke publication of material adverse to the anterests of the reform group and that the publication of thas material was likely to continue during tie forthcoming elections and thus adversely affect the candidates standing on the reform group ticket. The applicant did not attempt to establish the absence of bona fides im the actions of the respondents. He did not attempt to rely upon the principles enunciated in Allen v. Townsend above. The applicant contended that the powers of the respondents must be exercised toma fide for the benefit and in the interests of members of the Union as a whole. This 1s 83 misstatement of the general principle. The trial judge found that the materi3l which had been published by the respondents had been published wath the object of advancing the prospects of one group of candidates at the expense of the opposing faction, however beneficial such a result may have beer thought to be. In that context, his Honour held that the primary purpose fceugne. to be achieved was an election result rather than the defence of an attack upon the Union, in the sense discussed im Holmes v. Riordan, above. As has been said, that was the wrong issue to be determined in the proceedings. In our opinion the material does not support the case said to be made ont under 5.141 of the Act. For this resson the appeal in matter N.SwW. No. 14 of 1984 should te allowed. At the hearing, however, counsel for the respondents made 3 concerted attack on the terms of tne order made. Relief was granted on a quia timet basis, mamely that the practice complained of by the applicant was so well entrenched In the Union publications that there was every reason to accept that unless restrained, ithe pattern of conduct would continue into the future, presumably during the conduct of the elections due to take place later in tos year 1984. That conclusion 1s not necessarily open, having regard to the fact that the respondents consented to the interim orders when their attention was drawn to the breach of principle discussed earlier in these reasons. There should be mo presumption that breaches will continue during the subsequent elections. In Allen ve. Townsend above, Evatt and Northrop JJ. said at p.4895: - 284 -+ "The form of order as ain the mature of 3 perpetual imjunetion darected against future actions that may be taken by the State executive. We refer to what Lord Wilberforce said in Howard Smith Lid. v. Ampol Petroleum Lid. (£1974] A.C., at pp.834-835). In the present case, it 15 impossible to define in advance exact limits beyond which the State executive must not pass. Im our opinion, 1% wouldd be most wUnwise to mare am order in such broad ard 1ll-defined terms which 1s to operate on future facts aun relation to undefined rights, duties, powers or privileges of the commitee of management of the Geelong sub-branch. * With necessary sdaptions, the following passage taber from Howard Smath_ Ltd. v. Ampol Petroleum Ltd. [01974] 4.€. 821 at p.835, has equal application to cases such as the present: "Yo define im advance exact Limits boyond which directors must mol p3ss 1s, in their Lordships' View, impossible. This clearly cannot te done by enumeration, since the variety of situations facing directors of different types of company im different situations cannot be anticipated. No More, 1m therr Lordships' view, can this be done by the use of 3 phrase - such as 'bona fide in the interest of the company as a whole,' or 'for some corporate purpose.' Such phrases, aif they do anything more than restate the general principle applicable to fiduciary powers, al best serve, negatively, to exclude from the ares of validaty cases where the directors are acting sectionally, or partially: 2.8. improperly favouring one section of the shareholders aguinst another. Of such cases it has been saids 'The question which arises 15 sometimes not a question of the anmterest of the company at all, but a question of what 1s fair as between different classes af shareholders. Where such 3 Case arises some other test than that of the fanterests af the company' must ke applied, a.' (Malis v. Milis, 60 C.L.R. 150, 164, per Latham C.J.) Ir their Lordships' opinion at 15 hecessary to start with a consideration of the power whose exercise 16 oan Question, ain this case 3 power to issue sharos. Having ascertained, on 3 fair view, the nature of th2rs power, and - 29 - having defined as can best be done in the light of modern comditions the, or some, limats within which it may be oxecised, it 1s then necessary for the court, if a particular exercise of it 18 challenged, to examine the substantial purpose for which 1t was exercised, and to reach a conelusion whether that Purpose was proper or mot. In doing 50 1% will necessarily give credit to the bona fide opinion of the directors, if such 18 found to exist, and will respect their judgment as to matters of management; having done this, the ultimate conclusion has to be as to the side of 3s fairly troad line on which the case falls." There 15 much force in the contentions of counsel for the respondents attacking the form of the order made. In 311 the circumstances, apart from the general observations 3lready made, no Further opinion need be expressed. The two sppeals have been hesrd together. The Court proposes to determine the substantive issues raised in matter N.S.W. No. 14 of 1984. That determination 1s based on the fact that the Court had jurisdiction to hear and determine the role misi1 a5 amended pursuant to leave granted. Accordingly, im matter N.S.W. No. ii of 1984 the appeal should be dismissed. In matter N.S.W. No. 14 of 1984 the appeal should be allowed, the orders made im matter N.S.W. No. 1 of 1984 on 30 March 1984 should be set aside and the rule nisi therein should be discharged in so far 35 it sought orders in the form of the orders made on 30 March 1984 greene s Reasons for Judgment herein of the Pie. Quctice. NORTHROP. I certify that this and the Twenry-Enut28) Preceding pages are a true copy of the ia a Honourable Mr. Justice EvATT + the Herourable. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY N.S.W. Nos. 11 and 14 of 1984 wwe ww INDUSTRIAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN R.J. SCOTT and OTHERS Appellants AND: MICHAEL PATRICK JESS Respondent CORAM: Evatt, Northrop and Gray JJ. DATE: 5th October 1984 PLACE: Melbourne REASONS FOR JUDGMENT Gray J.: Appeais have been brought from two judgments of a single judge of the Federal Court of Australia. Both judgments were given in one proceeding, in which orders were sought against the present Appeliants pursuant to s. 141 of the Conciliation and Arbitration Act 1904 ("the Act"). The Appellants are the holders of various offices in the Amalgamated Metals Foundry and Shipwrights Union ("the Union"), an organization of employees registered pursuant to the Act. They are therefore persons under an obligation to perform or observe the rules of the Union, within the meaning of s. 141(1G) of the Act. The first judgment was delivered on 2nd March 1984 after the learned Judge had heard argument ona preliminary question, namely whether the Court had jurisdiction to proceed under s. 141, in the absence of any specific rule of the Union prohibiting the conduct by the Appellants of which complaint was made. His Honour held that the Court had jurisdiction. The matter then proceeded to trial. The second judgment was given on 30th March 1984. On that date, the learned Judge made the following order: "1. The Respondents and each of them perform and observe the Rules of the AMALGAMATED METALS FOUNDRY AND SHIPWRIGHTS UNION ("the Organisation") by refraining from publishing or distributing to members of the Organisation or causing to be so published or distributed out of the property, funds or resources of the Organisation any newspaper, newsletter, pamphlet or similar publication which supports or promotes or tends to support or promote or which seeks to defeat any person or group of persons who have informed the Organisation in writing that he or they intend to nominate in ballots for the following offices and positions in the Organisation:- (a) National Secretary; (b) National Organisers; (c) State Secretary, Queensland Branch; (d) Assistant Secretary, Tasmanian Branch; (e) State Secretary, Western Australia Branch, or which seeks to influence members of the Organisation in relation to voting inthe said ballots. The Respondents and each of them perform and observe the Rules of the Organisation by refraining from using or permitting any person from using the Organisation's property, funds or resources' to support or promote a candidate or group of candidates or to defeat any person or group of persons who have informed the Organisation in writing that he or they intend to nominate in ballots for the offices and positions referred to in Order 1. or to influence voters voting or likely to vote in ballots for such offices. From the date upon which nominations are called for the offices referred to in Orders 1. and 2. above, the Respondents and each of them perform and observe the Rules of the AMALGAMATED METALS FOUNDRY AND SHIPWRIGHTS UNION ("the Organisation") by refraining from publishing or distributing to members of the Organisation or causing to be so published or distributed out of the property, funds or resources of the Organisation any newspaper, newsletter, pamphlet or similar publication which supports or promotes or tends to support or promote any candidate or group of candidates nominating for such offices or which seeks or tends to defeat a candidate or group of candidates or which seeks or tends to influence voters voting or likely to vote in ballots for such offices. 4. The Respondents and each of them perform and observe the Rules of the Organisation by refraining from using or permitting any person from using the Organisation's property, funds or resources' to support or promote a candidate or group of candidates or to defeat a candidate or group of candidates or to influence voters in the said ballots referred to in Order 1." This order was in the form finally settled on by counsel for the Applicant, Michael Patrick Jess, in the course of the trial. To understand the form of the order, it is necessary to examine the facts and the history of the proceeding before the learned Judge. The proceeding was commenced by Rule to Show Cause granted on 2nd February 1984. At that time, there were in progress elections for certain offices within the Union. The period during which nominations could be jlodged had opened on -1S5th August 1983 for the position of Queensland State President, and for nine positions as Regional Conference Delegates from Queensland. On 19th September 1983, the nomination period opened for the office of National Organizer - Division 4. In respect of all of these positions, a baliot had opened on 23rd January 1984, and was due to close on 17th February 1984. As was the case with several elections within the Union in recent years, these elections were contested by candidates who styled themselves as members of a "Rank-and-File Reform Group". This group has apparently set itself to challenge the previously elected leadership of the Union wherever possible. In the election for State President, Queensland Branch, the contest was between the incumbent and a member of the reform goup. In the election for National Organizer-Division 4, a reform group member and an Acting National Organizer were the candidates. Electioneering material published on behalf of the reform group candidates showed photographs of reform group members in close proximity to the Prime Minister, Mr. Hawke. One such photograph showed the reform group candidate for National Organizer~Division 4 shaking hands with Mr. Hawke. The tenor of the material was to suggest that the previously elected leadership of the Union was communist or communist controlled, and antagonistic to Mr. Hawke, and the Labor government, whereas the reform group was concerned to work closely with the government. Apparently in response to this material, there were published and distributed at the expense of the Union various national newsletters. The tenor of these was to suggest that the use by reform group candidates of photos of Mr. Hawke involved deception, and to emphasize that neither Mr. Hawke nor the Australian Labor Party endorsed or favoured candidates in trade union elections. There were also published in these national newsletters statements by Mr. Hawke and Mr. Kelty, the Secretary of the Australian Council of Trade Unions, praising the Union for its attitude to and co-operation with the policies of the Australian Labor Party. When the Rule to Show Cause was granted, on 2nd February 1984, specific complaint was made of two such national newsletters. On that day, the learned judge made an interim order, no notice of the proceeding having been given to the Appellants, restraining them in certain respects. On the following day, when the matter was returnable before the learned judge, the Appellants consented to the continuation of that order. The order was in the following terms: "1. Until further Order the Respondents and each of them perform and observe the Rules of the AMALGAMATED METALS FOUNDRY AND SHIPWRIGHTS UNION ("the Organisation") by refraining from publishing or distributing to members of the Organisation or causing to be so published or distributed out of the property, funds and resources of the Organisation any newspaper, newsletter, pamphlet or similar publication which supports or promotes or tends to support or promote a candidate or group of candidates or which seeks to defeat a candidate or group of candidates in ballots for the following offices and positions of the Organisation:- (a) State President, Queensland Branch; (b) Regional Delegates to National Conf erence; (c) National Organiser, Division 4. 2. Until further Order the Respondents and each of them perform and observe the Rules of the Organisation by refraining from using or permitting any other person from using the Organisation's property, funds and resources to support or promote a candidate or group of candidates or to defeat a candidate or group of candidates in ballots for the following offices and positions of the Organisation: - (a) State President, Queensland Branch; (b) Regional Delegates to National Conference; (c) National Organiser, Division 4." Although this order was not expressed to be limited in terms of time, it seems to have been contemplated by all the parties, and by the learned Judge, that it would cease to have effect on 17th February 1984, when the ballots closed. On Ist March 1984, pursuant to leave granted on 23rd February, the Rule to Show Cause was amended. In part, the amendments made were for the purpose of adding claims for orders that the Appellants pay to the Union the costs of production of three national newsletters and one issue of the Metal Worker, a journal of the Union. Any question of payment by any of the appellants to the Union in respect of any publication has been adjourned for later determination by the Court, constituted by a single Judge. It is inno way the subject of either of the Appeals. The other major respect in which the Rule to Show Cause was amended was to add the following claims: "13. That the Respondents and each of them perform and observe the Rules of the Organisation by refraining from publishing or distributing to members of the Organisation or causing to be so published or distributed out of the property, funds or resources of the Organisation any newspaper, newsletter, pamphlet or similar publication which supports or promotes or tends to support or promote any candidate or group of candidates or which seeks to defeat a candidate or group of candidates or which seeks or tends to influence voters in ballots for the following offices and positions in the Organisation:- (a) National Secretary; (b) National Organisers; (c) State Secretary, Queensland Branch; (ad) Assistant Secretary, Tasmanian Branch; (e) State Secretary, Western Australia Branch. 14. An order that the Respondents and each of them perform and observe the Rules of the Organisation by refraining from using or permitting any person from using the Organisation's property, funds or resources to support or promote a candidate or group of candidates or to defeat a candidate or group of candidates or to influence voters in the ballots referred to in the preceding Order." It will be seen that these claims related to elections other than those which were current at the time when the Rule to Show Cause was granted. At the time when the amendments were made, it was anticipated that each of the elections referred to in these new claims would take place within 1984. In fact, on the hearing of the Appeals, the Court was informed by counsel for Mr. Jess that no election for State Secretary, Western Australia Branch, was expected to take place during 1984. In the course of the hearing of the proceeding before the learned trial Judge, the Applicant, Mr. Jess, placed reliance upon a number of publications produced and distributed at the expense of the Union, in previous years and up to the time of the trial. The Applicant''s case was that the continuation of publications of the same nature as those put in evidence could he expected, unless the Appellants were restrained by the Court from producing and distributing them or causing them to be produced and distributed. The publications contained material which was critical of the reform group and some of its members, and which alleged that election campaigns on behalf of reform group ~ 10. candidates had, in the past, been funded by the National Civic Council. Reliance was also placed upon a report made to the State Conference of the Tasmanian Branch of the Union, which contained strongly worded criticism of the reform group and certain of its members. It is convenient to consider separately the question of the jurisdiction of the Federal Court of Australia to make the orders ultimately sought by the Applicant, and then to consider the principles applicable to cases such as this, the application of those principles to the particular facts, and the order which the learned Judge made. Jurisdiction The applicant invoked sub-sections (1), (1G) and (1H) of s. 141 of the Act in seeking the order which was granted to hin. These provisions are in the following terms: "141.(1) A member of an organization may apply to the Court for an order under this section in respect of the organization. (1G) 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 is under an obligation to perform or observe those rules. (1H) The Court has jurisdiction to hear and determine an application under sub-section (1) but, before making an order under this section, the Court shall give any person against whom the order is sought an opportunity of being heard." As has been stated earlier, the Applicant did not rely on any express provision in the rules of the Union as prohibiting nl. the conduct of which he complained. Both before the learned Judge, and on appeal, the argument on behalf of the Applicant was directed to the proposition that the court was capable of compelling the performance or observance of "implied rules" or implied terms in the rules. The concept of implied rules or implied terms in the rules of an organization registered under the Act is difficult, for a number of reasons. Section 132(2) requires organizations to comply with prescribed conditions. The conditions are prescribed in reg. 115 of the Conciliation and Arbitration Requlations. Particular reference is made to sub-reg. (2). Among the conditions is the requirement that an organization have rules which make provision for the matters listed in reg. 115(1)(d). In addition, various provision of Part VIII of the Act lay down subjects for which the rules of an organization must provide. Particular reference is made to ss. 133, 133A, and 133B. The content of the rules themselves is controlled toa significant degree by s. 140 of the Act. Sub-section (1) of this section contains both positive and negative requirements which bear upon the rules of an organization. Under s. 157 of the Act, a copy of the rules of an organization certified by the Industrial Registrar to be a true and correct copy is prima facie evidence of the rules of that organization. Section 188A provides for 'the furnishing to a member of an organization of a copy of the rules of the organization upon request and upon payment of a prescribed amount. Plainly, there are strong 12. reasons for holding that, so far as possible, a member or any other person desiring to ascertain the content of the rules of an organization should be able to do so by reference to a certified copy or to the rule book, without having to consider whether the court might not, in some proceedings, find the existence of additional implied terms or rules. In the course of argument, the Court was referred to the opinion of the majority of the Privy Council in 5.P. Refinery Pty. Ltd. v. Hastings Shire Council (1977) 52 A.L.J.R. 20, at page 26, as to the circumstances in which courts will recognize implied terms in contracts. This passage is in the following terms: "Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1)it must be reasonable and equitable; (2)it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3)it must be so obvious that "it goes without saying"; (4)it must be capable of clear expression; (5)it must not contradict any express term of the contract." The application of these criteria to the rules of an organization would not be free from difficulty. In particular, the concept of "business efficacy" is not easily transported from the commercial area into the rules of an organization. In addition, _the difficulty of finding something so obvious that it goes without saying, and is not already written into the. rules, whether as a matter required by the Act or the Regulations or otherwise, is ~ 13. agifficult. A further problem which may arise is that the basis of the rules of an organization may not be purely contractual. True it is that, before registration as an organization is effected, there must be in existence an association complying with the prescribed conditions and the other provisions of the Act. The rules of such an association will bind its members as a contract, notionally made by each member with each of the others. Once registration takes effect however, the rules of an organization may be regarded as deriving some, at least, of their force and effect from the Act. This possibility was adverted to by Latham C.J. in R. vv. Commonwealth Court of Conciliation and Arbitration ex parte Barrett (1945) 70 C.~.R. 141, at page 151, where His Honour said: "In the present case, it is not shown that the rules of the organization were binding upon members of a voluntary association by virtue of a contract before the organization became a registered organization under the Act. But, even if it were shown that the rules had previously, by virtue of a contract, become binding upon the members of the voluntary association, that fact alone would not, after registration, be the source of rights or duties, either in the case of original members, or in the case of members who joined the organization after the registration. The rules, as registered, are what are binding. It is not necessary or relevant to in order to discover what the rules are to make any inquiry into any agreement by any of the members. In my opinion, the rules as rules of the organization derive their force from the Act, and, therefore, a controversy as to the observance or performance of the rules is a matter arising under the Act. A claim that the rules should be observed and performed is a claim to a right conferred by or under the statute. It therefore arises under the statute." For present purposes, it is unnecessary to debate the correctness or otherwise of this proposition, which does not seem to have been echoed in the judgments of the other members of the court in Barrett's case. The importance of the point is that the tests for the implication of terms in commercial cases do not necessarily sit easily with the rules of organizations. The idea that implied terms can be found in the rules of organizations, and that those implied terms are capable of enforcement pursuant to s. 141 of the Act, seems to have surfaced in the decision of the Australian Industrial Court in Gordon v. Carroll (1975) 27 F.L.R. 129, especially at pages 155-156. In Duqmore v. Porter (1982) 3 I.R. 418, at pages 421-2, Northrop J. expressed doubt whether Gordon v. Carroll was authority for the proposition that the Court could give directions for the observance of an implied rule. On appeal, in Porter v. Dugmore, Federal Court of Australia constituted by Smithers, Keely and Sheppard JJ., 2nd April 1984, unreported, Smithers J. (with whom Sheppard J. concurred) expressed the view that this doubt is well founded. I agree with that view. The difficulty of implying terms into the rules of an organization does not, however, mean that such rules are to be construed as if no implication whatever arises from them. In many respects, there are to be derived from the express terms of the rules, the terms of the Act and the Regulations, and the nature, function and purpose of the organization concerned, implications which limit what might otherwise be the extent of the express terms of the rules. The most obvious example is that 15. powers given by the rules of organizations to inflict penaities on members are construed as being subject to the implication that such powers will not be exercised without adherence to the principles of natural justice. The implication of the requirements of natural justice is so well established that it is unnecessary to cite authority. Porter v. Dugmore, referred to above, was itself a case in which both Northrop J. and the Full Court held that there existed an implied limitation on the powers of the governing body of an organization, preventing the institution of a system requiring members of the organization to possess "OK" cards distributed by the organization, in order that those members could obtain employment. In Jansen v. Slater (1974) 24 F.L.R. 279, the Australian Industrial Court held that a power in the rules of an organization which enabled the organization to make payments to former full time officials was impliedly limited to payments which did not constitute mere gifts. No doubt, other examples of implied limitations on the powers expressed in the rules of organizations could be found. Where such an implied limitation has been exceeded, the question arises whether an act which is outside the true extent of the power can be restrained in the exercise of the jurisdiction given by s. 141 of the Act. In some cases, it may be possible to point toa specific rule or specific rules the performance and observance of which is sought. For instance, if a member of an organization is expelled without being afforded an adequate opportunity to be heard on the question of his or her ~ 16. expulsion, it might be said that specific provisions of the rules entitle him or her to continue to hold membership in the absence of avalid decision terminating that membership. Where the decision does not involve expulsion, but rather a fine or a censure, this analysis may become more difficult; it may not be possible to point to any provision of the rules which, in terms, entitles the member concerned to be treated as if he or she had not been fined or censured. Nevertheless, the authorities indicate that those responsible for the decision in such a case may properly be ordered to treat it as null and void under s. 141 of the Act. See, for instance, Lynch v. Waters (1967) 11 F.L.R. 116, and Magner v. Fowler (1979) 46 F.L.R. 78. In such cases, it is not possible to point to any specific provision of the rules the performance or observance of which is being ordered or directed. Ina real sense, the Court is ordering or directing the performance and observance of the rules of the organization concerned as a whole, the impugned act being regarded as a departure from the overall scheme of such rules. At all events, the jurisdiction of the Court in such cases seems to be so well established that it is too late to attempt to overturn it. For this reason, in appearing to be based on the proposition that an applicant for relief under s. 141 will base his or her case on a specific rule or specific rules of the organization concerned, 0. 4 R. 15(5)(a) of the Federal Court Rules may proceed on a wrong assumption. ~ 17. In the present case, attention was directed to certain express provisions in the rules of the Union. These were found in rules 6, 15 and 16. To the extent that they are relevant, they are as follows: "RULE 6 POWERS OF NATIONAL COUNCIL 1. The National Council shall be the Committee of Management of the Union and shall subject to the powers and decisions of the National Conference and these Rules, have the care, control, superintendence and Management inall respects of the affairs, business, funds and property of the Union and without limiting the generality of the foregoing it may: (a) interpret the Rules and enforce the general policy as decided by the National Conference. (b) determine matters of policy not covered by Conference decisions. (c) control and conduct the business and affairs of the Union while the National Conference is not in session. (ad) appoint the Editor of the Union Journal and manage and control the policy of the Journal. {e) expend such monies as may in the opinion of the Council be necessary. (f) ... {g) wee (h) ensure that Officers and Committees of the Union carry out the Rules, decisions and policies of the Union and impose penalties in accordance with these Rules. (i)... (j) control and supervise the work of the National officers of the Union. ~ 18. RULE 15 HOLDING OF PROPERTY AND LEGAL PROCEEDINGS 1. All funds, investments and other property of the Union shali be vested in the National Trustees as joint tenants and be held by them in trust for the members of the Union. RULE 16 INVESTMENTS COMMITTEE AND POWERS OF NATIONAL TRUSTEES 1. The National Trustees shall have power: (a) To receive money or other property paid, delivered or conveyed to them as Trustees of the Union and to expend moneys without distinction between capital and income. (b) To invest, sell, exchange or otherwise dispose of investments or other property of the Union and to deal with the funds of the Union including purchase or otherwise acquiring of property out of the funds of the Union." The real question is as to the nature of the implied limitation (if any) on these express powers. If some relevant implied limitation exists, the Court has jurisdiction to direct the appropriate persons who are under an obligation to perform or observe the rules of the Union to treat as null and void, and to yefrain from continuing, any act which exceeds the powers given by the rules on their true construction. Principles In determining whether and to what extent the express powers contained in the rules of the Union are limited by implication, it is necessary to examine a number of principles. ~ 19, To some extent, these principles are capable of conflicting in certain cases. Where such conflict occurs, it is necessary for the Court to resolve it, having regard to the circumstances of each case. For convenience, the principles will be numbered to enable briefer reference to them when their application is considered. 1. It is proper, and perhaps necessary, for an organization to communicate with its memhers about the affairs of the organization and matters which may be of interest to the members. In the exercise of the power give by s. 51(xxxv) of the Constitution, the Parliament has chosen to set up a system of conciliation and arbitration, which depends primarily upon the existence of registered organizations, to represent those whose interests will be affected by the agreements or decisions reached as a result of the conciliation and arbitration process. That the Parliament chose to rest the system largely upon registered organizations, whereas it might have chosen other means, has been recognized at least since Jumbunna Coal Mine, No Liability v. Victorian Coai Miners' Association (1908) 6 C.L.R. 309; see especially the judgment of O'Connor J. at pages 358-360. In the making of demands which give rise to industrial disputes, which found the jurisidiction of the Australian Conciliation and Arbitration Commission, registered organizations act as parties principal, and. not as agents for their members: Burwood Cinema Ltd. v. Australian Theatrical and Amusements Employees' Association (1925) 35 C.L.R. 528. It is obvious that the responsibilities of an organization within the system of 20. conciliation and arbitration could not adequately be carried out in the absence of communication between those charged with the government of the organization and its members. For this reason, it has been held that the publishing of a newspaper for members fell within the powers of an organization, even in the absence of any specific power of that nature: Australian Workers' Union v. Coles £19173 V.L.R. 332. That decision was expressly approved by the majority of the High Court in Williams v. Hursey (1959) 103 C.L.R. 30; see page 52 in the judgment of Fullagar J., with whom Dixon C.J. and Kitto J. concurred. For the same reason, communications between officials of an organization and its members on matters falling within the interests of the members would be the subject of qualified privilege, and hence immune from actions for defamation in the absence of malice. Compare Hay _v. Australasian Institute of Marine Engineers (1906) 3 C.L.R. 1002 and Duane _v. Granrott £1982] V.R. 767. This power to publish communications to Members is generally capable of exercise whether or not an election within the organization is taking place or is about to take place, and whether or not the matters published might be said to influence or be likely to influence the votes of members in such an election. To hold otherwise would be to restrict unduly the operations of organizations, and to require of them a standard of conduct different from that commonly applicable in other democratic 21. institutions. In other words, it cannot be said that those responsible for the content of official journals of an organization must refrain from informing members about, for example, the results of the conciliation process, simply because those results might reflect credit upon those officials, and thereby attract votes. 2. In the expenditure of the funds and the use of the resources of an organization, its objects and powers are to be interpreted broadly, so that any action which can fairly and reasonably be regarded as falling within those powers and objects will be valid. This test emerges from Williams v. Hursey (1959) 103 C.L.R. 30, at pages 57-58 in the judgment of Fullagar J., with whom Dixon C.J. and Kitto J. concurred, and from Stevens v. Keogh (1946) 72 C.L.R. 1, at pages 22, 27-28 and 30. Where the decision to expend funds or use resources is made by the members of an organization themselves, in general meeting, or by persons elected to conduct the affairs of the organization, the court will be slow to hold that a particular expenditure or use of resources is beyond the powers given. The court does not substitute its own opinions as to what is proper for those of the persons making the particular decision. In Williams v. Hursey, referred to above, it was specifically held that a governing body within an organization could properly take the view that all the members of the organization should give financial support toa particular political party. ~ 22. 3. A power given to a person or persons by the rules of an organization must be exercised in good faith and for the purpose for which it is given, not for some ulterior or extraneous purpose. In support of this proposition, it is unnecessary to do more than to refer to the joint judgment of Evatt and Northrop JJ. in Allen v. Townsend (1977) 31 F.L.R. 431 at pages 483-489, and to the cases cited in that passage, although the proposition at page 483 that the fiduciary duty therein referred to is owed to the members of the organization, as distinct from the organization itself, may be questionable. In this respect, it is important to note that the onus of proving lack of good faith or ulterior purpose rests upon those who seek to overturn the exercise of a power, and not upon those who seek to uphold it. See Ascot Investments Pty. Ltd. v. Harper (1981) 148 C.L.R. 337, at pages 348-349 per Gibbs J. (as he then was), with whom Stephen, Aickin and Wilson JJ. concurred. 4. The funds and property of an organization may not validly be used to support one candidate or group of candidates in an election, or one point of view in a plebiscite, to the exclusion of another candidate or other candidates or the opposite point of view, or to campaign against a candidate or candidates in an election or a point of view in a plebiscite. This principle, or something like it, has emerged from a number of authorities, including Short v. Wellings (1951) 72 C.A.R. 84, Holmes _v. Riordan (1956) 86 C.A.R. 180, Lyons v. Deegan (1978) 35 F.L.R. 430, Kanan v. Hawkins, Federal Court of Australia, ~ 23. constituted by J.B. Sweeney, 14th September 1979, unreported, Re Australian and Postal Telecommunications Union: ex parte Wilson (1979) 28A.L.R. 330, Stephenson v. Dowdell, Federal Court of Australia, constituted by J.B. Sweeney J., 19th June 1980, unreported, Vaientine v. Butcher (1981) 51 F.L.R. 127 and Re Penhallurick (1983) 51 A.L.R. 589. This principle usually operates to invalidate acts which might be said to fall within the literal terms of some power given to some person or persons by the rules of an organization. It operates, therefore, by way of implied limitation upon the express terms of such a power. For this reason, having regard to the matters to which I have referred on the question of jurisdiction, care is necessary to ensure that any implication is proper. In some of the cases in which this principle has been referred to, it has been expressed in terms that require that the funds and resources of an organization must be used equally for the benefit of all members. See, for instance Kanan v. Hawkins, referred to above. In the present case, in his judgment of 2nd March 1984, the learned trial judge adopted this formulation of the principle. In my view, it is incorrect. There are many situations in which the governing body of an organization will quite properly expend the funds of an organization in a way which will benefit only some members, or will benefit some members more than others. Some organizations find it necessary to subsidize the expense of running small branches by payment out of funds collected from members of larger branches. In some cases, the ~ 24. pursuit of a claim for industrial conditions on behalf of one member or a group of members may involve a disproportionate expenditure of the organization's funds, without any real possibility of a flow on of any conditions won to other members. Depending upon the circumstances of each case, these unequal applications of funds may be perfectly proper. To require that those whose responsibility it is to control the expenditure of an organization's funds treat every item of expenditure on the basis that all members are equally entitled to the funds is to go beyond the area of proper implication. It must also be borne inmind that there is nothing intrinsically wrong with the use of the funds and resources of an organization to promote candidates in elections within the organization. For example, an organization may publish to members a journal containing the election addresses of ail candidates. The principle only comes into play when there is a denial of an opportunity to some candidates which is made available to others. There may even be situations in which some use of the funds and resources of the organization to favour one candidate may be appropriate. For instance, the committee of Management of a branch may take the view that the interests of the branch will be furthered by the election of a member of that branch to some Federal office. In such circumstances, the committee of management may see it as proper to campaign within the branch for the election of such a person. ~ 25. The exact basis of the principle is difficult to determine. In some respects, it is akin to the rule thata fiduciary agent must not profit from his or her trust. That rule does not, however, explain in its entirety the principle. In some cases, the person responsible for disseminating electioneering material may only profit from its dissemination by the election of other persons whom he or she wishes to he elected. In part, the principle must be taken to rest upon implication derived from the statutory framework within which an organization operates. For some time, reg. 115(1)(d){v) of the Conciliation and Arbitration Regquiations has obliged organizations to have rules which make provision for the control of committees by members. Similarly, reg. 115(1){(d)}(i)} has required rules for the election of committees, officers and other governing bodies. More recently, the express objects of the Act have included that which is found in s. 2(f), namely to encourage the democratic control of organizations and the full participation by members in their affairs. If the rules of an organization were seen to allow those in power to use the funds and resources of the organization to retain their position of power, they would hardly be described as making provision for elections, or for the control of committees by members, and they would tend to run counter to the object found in s. 2(f£). As is the case with claims against fiduciary agents who have profited from their positions, the remedies appropriate to departures from this principle will vary. There may be cases in ~ 26. which a payment to the organization sufficient to cover any cost to it of the publication will be a sufficient means of dealing with the situation; the resuit would be the same as if electioneering material had been produced in the first place at the expense of those producing it. For present purposes, it is unnecessary to decide whether such repayment can be ordered pursuant to s. 141 of the Act, or whether it is necessary to rely upon State law, with possibie access to the accrued jurisdiction of this Court. Without examination of the particular rules of an organization, it will often be impossible to say where relief should be sought. In other cases, repayment will not be a sufficient remedy. If, for instance, the benefit has been taken of a letterhead of the organization, which might be thought to influence voters more than material obviously produced on behalf of one candidate, some other remedy might be necessary. In such circumstances, a publication may be restrained under s. 141 if it is known about in advance. There may be cases in which the infringement is such as to amount to an irregularity for the purposes of Part IX of the Act, and the Court would then be entitled to order the conduct of a fresh ballot ora fresh election if the result of the election may have been affected by such an irregularity. Because of the vast variety of situations which might occur, it is impossible to lay down any guidelines as to the precise circumstances in which this principle will operate, or as to the appropriate remedy in any such circumstance. Each case will have to be deakt-with as it arises. It remains to consider the application of this principle, and those earlier set out, to the facts of the present case, and to consider the order made by the learned trial Judge. The Application of the Principles Before the learned trial Judge, no attempt was made to prove the facts which would have been necessary if reliance were placed upon principle 3. In other words, evidence was not led to show lack of good faith or the existence of some ulterior or extraneous purpose in respect of any decision to publish the material complained of. Reference was made at the trial to some of the cases concerned with a similar principle in relation to companies and other decision making bodies (although not, apparently, to Allen v. Townsend, referred to above). On appeal, counsel for the Applicant sought to rely upon the fact that none of the Appellants had sworn an affidavit or entered the witness box as evidence of bad faith or ulterior purpose. Such an argument, however, attempts to reverse the onus of proof. In addition, there may be many reasons for failure to give evidence. Reliance was aiso placed upon the history of publications, the allegation being that the Appellants, through the Union's journals had consistently sought to denigrate the reform group and its members. This proposition, however, may equally be consistent with good faith on the part of the Appellants. It does demonstrate that they did not seize on a particular occasion for the purpose of electioneering. One further factor needs to 28. be mentioned in this context. The fact that the Appellants were prepared to consent to the continuation of an interim order by the learned trial Judge, restraining them in broad terms from publishing material during the conduct of the elections which were then current, tends to show that there was no lack of good faith on the part of the Appellants. In the absence of evidence of bad faith or ulterior purpose, the question is one of the application of principles 1, 2 and 4 to the particular circumstances. It will be seen that there is some possibility of conflict between principle 4 on the one hand, and principles 1and 2 onthe other, ina given situation. Such conflict is inevitable, and must be resolved by the Court on the particular facts of a case. Generally speaking, principle 4 will only come into operation during the actual conduct of an election, i.e. at a stage when it is known with some certainty who are the candidates contesting the election. During the period between the lodging of nominations and the close of any ballot, the operation of principles 1 and 2 will be restricted to some extent by principle 4. In short, it will not be a proper use of the funds and resources of an organization to apply them to electioneering. In my view, notwithstanding the conduct of the elections which were in progress when the learned Judge first granted the Rule to Show Cause, it was proper for the Union to inform, or to continue to inform, its members of the attitude of the governing ~ 29. bodies of the Union to the Prices and Incomes Accord, to the Australian Labor Party, and to the Government and the Prime Minister. It was also proper to remind members of support which had been given by the Union to the Australian Labor Party in the preceding Federal election campaign. In like manner, officers of the Union could inform members of the attitude taken by the Australian Labor Party and Mr. Hawke to the question of supporting or endorsing candidates in elections within Unions. It was also proper, inmy view, to inform members that the National Civic Council was alleged to have supported candidates in past elections within the Union; the question of outside bodies taking an interest in the results of elections within the Union could reasonably be seen as of interest to members. All of these matters fell within principle 1. Although it might be said that some or all of them could influence voters in their choice of candidates in the elections, they were nevertheless subject upon which communication to members could continue, even during the conduct of elections. On the other hand, when statements were made in the publications of the Union, published during the conduct of elections, to the effect that the reform group or some of its members were guilty of deception, principle 4 came into operation. There is a difference between stating facts or alleged facts about a particular subject, and offering opinions which are abusive or praiseworthy about particular candidates or the groups with which they are identified. The latter amounts to electioneering. Principle 4 then overrides principle 1, during the conduct of an election. The learned Judge does not appear to have approached the matter with this distinction in mind. Rather, His Honour's attention seems to have been directed to the question whether the funds were expended in the interests of the members as a whole. I have already held this to be an inappropriate criterion for determining the propriety of expenditure. In addition, His Honour took the view that publication was with the object of advancing the prospect of one group of candidates at the expense of the opposing faction, and that this was improper. In the absence of evidence of subjective purpose, it is difficult to see how this conclusion could be reached. The Orders It is clear that the orders which the learned trial Judge made went far beyond what the occasion demanded. Their effect was to deny toa very large extent the operation of principles land 2Z. They were also too broad to justify by reference to principle 4. Even if principle 3 had been properly invoked, the orders would have to be considered as too broad, because they would operate to prevent publications whether or not they were made in good faith and for the purpose for which the ~ 31. power was given. There is a real danger in attempting to frame orders under s. 141 of the Act in broad and general terms, by reference to past conduct. This is particularly so when such orders would operate irrespective of the times at which elections began and ended. A number of specific criticisms can be made of the form of the order made by the learned Judge. Paragraph 1 of that order prohibits the publishing or distribution of any newspaper, newsletter, pamphlet or similar publication which supports or promotes or tends to support or promote certain persons. In the overall conduct of the affairs of the Union, it might be very aifficult for any of the Appellants to determine whether they were acting in breach of an order in these terms in publishing or distributing a particular document. In a sense, any report to the members of the Union about any industrial affairs might be regarded as tending to support certain office bearers of the Union by showing that they had discharged their duties in some way beneficial to some or all of the members. The manner of discharge of their duties by office bearers is a matter of great importance to the members, and a proper subject of communication with them. Further, paragraph 1 of the order prohibits publications which seek to defeat certain persons. The change in language from "tends to support" to "seeks to defeat" may indicate a change from an objective test to a subjective one in circumstances where there appears to be no reason for sucha change. Paragraph 1 of the order is also intended to operate in 32. relation to persons or groups of persons who have informed "the Organisation" in writing that he or they intend to nominate in ballots for certain offices. It is not clear from the order how the Union can be notified in writing, and there is no procedure laid down in the rules whereby intending candidates for future elections may notify the Union in writing of their intention to stand. The idea of a group of persons informing the Union in writing that they intend to nominate is one which lacks clarity, especially on the question whether each member of the group need be named. After the list of offices to which paragraph 1 of the order is intended to relate, the phrase "seeks to influence" recurs, raising again the question whether a subjective test is intended. Similar criticisms may be made of the other paragraphs of the order. The single most important defect in the order is that nowhere does it contain any express time limit. On its literal terms, members of the Union could render themselves immune from criticism in the Union's publications by giving some written notice that they intended to nominate for the offices mentioned in future years. The reality was that, by the time the order was made on 30th March 1984, the occasion for making any order restraining publication with reference to the elections which were current at the time when the Rule to Show Cause was granted had passed. The occasion for making any orders with respect for future elections had not yet arisen. If it does arise, further proceedings may be brought under s. 141 with respect to specific allegations, and orders can be made in specific terms. rt - 33. In the circumstances, the appeal in matter N.S.W. No. 14 of 1984 should be allowed, the order made on 30th March 1984 should be quashed, and the amended Rule to Show Cause should be discharged insofar as it sought orders restraining publications. The appeal in matter N.S.W. No. 11 of 1984 was strictly unnecessary; questions of jurisdiction could have been dealt with in the other appeal. Nevertheless, because the decision of the learned Judge on 2nd March 1984 was correct in the result, that appeal should be dismissed. 4 oy Powe FO e ? t Leased f>°dudgment herein ols 128 ! gu-t_ re GRAS i Sig lo Ho 8, 322 A 1984 = CATCHWORDS Industrial law - Conciliation and Arbitration Act 1904 - registered organizations - application of funds and resources in publishing material allegedly supporting one candidate during an election -~- duty of Union Officials to exercise powers conferred upon them by the rules bona fide for the purposes for which the power is conferred - tests regarding application of Union resources while elections pending - prohibition upon use of resources to support a candidate - exercise of power to inform members of matters of interest - breadth of order Court can make pursuant to s.141 of the Act - perpetual injunctions. Conciliation and Arbitration Act 1904 - 5.141. R.J. SCOTT & ORS V. MICHAEL PATRICK JESS NSW Nos. 11 and 14 of 1984 Coram: Evatt, Northrop and Gray JJ Date: 5 October 1984 Place: Melbourne. 9) OF AUS IA NEW SOUTH WALES DISTRICT REGISTRY NDUSTRIAL DIVISTON N.S.W No. 11 of 1984 eee ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN : R. J. SCOTT and OTHERS Ag céliants and MICHAEL PATRICK JESS Respondent CORAM: Evatt, Northrop and Gray JJ. DATE: 5 October 1984 PLACE: Melbourne ORDER THE COURT ORDERS THAT: 1. The Appeal be dismissed. OURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY INDUSTRIAL DIVISION N.S.W No. 14 of 1984 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: R. od. SCOTT and OTHERS Appellants and MICHAEL PATRICK JESS Respondent CORAM: Evatt, Northrop and Gray JJ. DATE: 5 October 1984 PLACE: Melbourne ORDER THE COURT ORDERS THAT: 1. The Appeal be allowed and the orders made by the Court on 30 March 1984 be set aside. 2. The rule nisi be discharged insofar as it relates to the orders made on 30 March 1984. N.S.W Nos. Il and 'a oF 1984 z M37] bog 'on 'a 'Sc Rac! =x t = '> — 'oa [oy i] =o . Pd iw ted 'a and Ks} i Lo) foe] irs) et oy re ba] "< we wus ON_APPFAL_FROM THE _FFIFRAL COURT _OF AUSTRALIA BETWEEN: Rk. J. SCOTT and OTHERS Appellants and MICHAFL PATRICK_JESS Respondent CURAM: Evatt, Northrop and Gray JJ. TATE: oS AQetaber 1984 PLACE: Melbourne REASONS _FOR_JUIIGMENT Evatt and Northrop JJ.: With the consent of the parties these two appeals were heard together. In fact both appeals arise from the one proceeding 1m the Federal Court of Anstralia, namely matter N.SoW. No. 1 of 1984, and all issues tetween the parties raised by the two appeals could have teen determined im the ome appeal. The facts giving rise to the appeals are somewhat complex but can te stated shortly. Michael Patrick Jess (hereinafter called *the applicant') 15 a member of the Amalgamated Metals Foundry and Shipwrights' Union (Chereinafter eslled 'the Unran*), an organization of employees winder the Conmerliatioan__—_ and Arbitration _Act 1904 ("the Act"). In the latter part of the year 1983 amd the early part of the year 1984 elections under the rules of the Union were being conducted far the three positions within the Union of: (3) State President, Queensiand Branch; (hb) Regional Delegate to National Conference; to) Natjoanal Organiser, Wivisian 4. The ballots, beimg postal tallots, tor the elections to those positions opened am 23 January 1984 amd were to close on 17 February 1984. Match Crechanowski and Bryant Burns were the Candidates itor the position of State President, Queensland Brancn. Charles 8311 and Robert Adamson were the candidates for tne position of Nations] Organiser, [ivasian 4. in January 1984, typical electioneering pamphlets were distributed sameng members eligible to vate im the tnree elections on behalf of each of Bali, Criechanowsy1 and Adamson. Burns and Adamson were the holders of the positions for which the elections were being held. A bitter campaign was being conducted tetween those members of the Union, ancluding Burns and Adamson, and the majority of the existing officers of the Uniom on the one hand, and those members of the Union, including Bali and Ciechanowsk1, who were conducting the Campaign a5 3 reform group. Roderack Kelly, another member of the Unson, was 32 member of that reform group. The electioneering pamphlets reflected the bitterness of the electors] campaign, being highly commendatory of the candidate being supported and being highly derogatory of the opposing camjidate. The applicant makes mo complaint about those electioneering pamphiets which appear to have been paid for from funds other than funds of the Union. From time to time the Uniom publishes and distributes yerious publications including 'The Metaluorker®, a tablaid newspaper which 1s posted to each member amd which 15 published eleven times 3 year, "The A.M.F.S.U.L Quarterly Journal', which 2s posted to certain Union officials for distritution to members at various places within the structures of the Union, and a "National Nowsletter® which 1s published from tame ta time on an irregular basis. Each of these publications 1s published ty the National Couneil of the Wntar. Copies of the Nations! Newsletter mormally have endorsed on them that the newsletter 16 3uthoriced by the Unionm's National Counerl. A National Newsletter dated 24 January 1984 was published by the National Council. Endorsed on it was 3 statement '"Authorired by tick Sentt, National President*. On one view, the contents of that newsletter tended ta support or promote the group of candidates ain the three elections whe were being supported ty the majority of the officers of the Uniom amd sought to defeat the candidates contesting the elections, including Kali and Crechanowsbi, being candidates being supported by the reform group. That issue of the National Newsletter was putiished and posted to members of the Union entitled to vote ati the three elections by the use of resources, including money and manpower, of the Union atself. A similar National Newsletter dated 25 January 1984 having a similar tendency, was published and distributed amongst members of the Uniom entitled toa vote ai the elentions. On .2 Fehrusry 1984 the applicant made an ex parte application to the Court for orders under $.141 of the Act. nd iy The sppelisn named 3s Dy) respondents to 3 pute miss squaht, S were under O.4 r.lS of the Rules of Court. Hereinafter the appellanis are called "the respondents'. Each of the respondents 156 3 momber of tre Union and thus "under an obligation to perform or observe the rules of the Union. Fen of the respondents is an officer of tie Uniram amd either severgv)ly or jointly have power, under the Rules of the Union, to publish amd distribute the Nabianal Newsletter and the other pubklicsatyons of the Unoon and to expend the resaurces ot the Union for that purpose. Under sut-sertion 141116) of the Act, the applicant sought arders that each of the respondents perform or observe the rules of the Union by refraining from uSinNg Or permitting sny ather person from using the Union's property, funds or resources to support or promote a candidate or group of candidates or to defeat a candidate or group of candidtes ain the ballots for the three positions set out above, and an particular an order in similar form was sought with respect to the publication and distribution of any newspaper, newsletter, pamphlet or simalar publication having the same tendency. In addition, an order was sought that the respondent Scott, and such other of the respondents who had authorized the publication and distribution of the two National Newsletters dated 24 and 25 January 1984 respectively, te orderej to repay to the Union the costs incurred -ty the Union in publishing and distributing those two newsletters. For the purposes of the appeals, the last order sought may be ignored since the hearing of the application seeking that order has mot been held and to that extant the application has been adjourned sine die. The Court granted the ex parte application and a rule mish was issued calling ypan the respondents to show cause at twelve noon on 3 February 1984 why the orders set out im the rule mis1 should not be made. At the same time as granting the rule misi, the Court made an interim order ynder sub-sectinn 141(2) of the Act requiring each of the respondents to porform and observe the rules of the Uniom aim relation to the publishing and distribution of documents tending to have the effect referred to above with respect to the three elections. The interim order was to remain in force wrtil the end of 3 February 1984 or until further order. On the return of the rule misi2 on 3 Fetryusry 1984 the applicant relied upon a further National Newsletter dated 5 Tecember 1983, which was stated to be authorized by the National Council and having 3a tendency to affect the election similar to the other two newsletters already referred to. At the hearing, the respondents, wathout conceding laatility, consented to the continuation of the anmter2zm order until further order. Under normal circumstances it would have teen expected that the anterim orders would cease to have effect after 17 February 1984, being the date the ballots closed. Thereafter, the only unresolved matter arising from the rule m1s1 was the application for the refund of the monies expended. The hearang of the rule nisi was then adjourned to 23 Fetruary 1984. On 23 Fetruary 1984, the applicant was granted leave to amend the rule mis1 to include clazrms for orders seehing the repayment of money to the Union wath respect to the three National Newsletters already mentioned and an issue of the "The Metalworror" dated 1 February 1984. The rule misi in soa far as 1t seers other orders has mot yet been heard amd may be ignored for the purposes of this appeal. More importantly, the applicant was granted leave to amend the rule misi to include claims for orders similar to thase contained ar the interim order, but wath respect to elections to the following positions within the Union, namely: (a) National Secretary; (hb) National Organisers; (ce) State Secretary, Queensland Branch; (dd) Assistant Secretary, Tasmanian Branch3 Ce) State Secretary, Western Australian Branch. It 15 important to note that the elections for those positions were to be held later in the year 1984, but at the time leave was granted none of those elections had commenced. On 23 February 1984, the respondents moved the Court for orders under 0.20 r.2 of the Rules of Court that the rule misi be discharged on the ground that it disclosed mo reasonable cause of action. Sutmassionms were limited to the ground relating to publication of material which had 3a tendency to affect elections within the Unoon. The submissions can be described as relating to the jurisdiction question. On 2 March 1984 the Court made an order declaring tnat the Conrt had jurisdiction to entertain the application wnder $.141 of the Act and refused the motion for summary dismissal of the proceedings. Appeal N.S.W. No. 11 of 1984 as an appeal from those orders. That appeal was filed am 16 March 1984. Tespite the appeal which had been tiled om the jurisdiction question, the rule misi came on for further hearing om 20 March 1984. On that hearing, which extended over sever3) days, ait was apparent that the naiure of the proceedings had changed completely from those which were the subject of the rule misi as ariginmally obtained. Tne hearing, which commenced on 20 March 1984, related to the five elections which had mot commenced. Orders were being sought With respect to those five elections. An affidavit ty Roderick Kelly was relied wpon by the applicant. In that affidavit, Kelly saad: *T will be submitting my mominatiom as a candidate for the position of National Secretary -of the Organisation, elections for which are due to [bel held later this year. I expect that nominations for that position will open early in M3y and close in eariy June 1984. Iwill be standing in that election." 'The affidavit identified a number of issues of 'The Metalworker', 'The A-M.E.S.U. Quarterly Journal", and '"The Newsletter', which were exhibited to the affidavit and covered the period from July 1981 to November 1983. Material in those publications could be said to be detrimental to the interests of Kelly and other persons within the reform group. The applicant relied also on an affidavit by Emamvel Lockley relating to events which occurred in March 1984 in relation to the State Conference of the Tasman2rarn Kranch and the publication of a report made to that conference which could be sald to be detrimental to the interests of persons within the reform group. At the same time 1t 216 fair to say that the materyal complained of in the publications and an the roport of the State Conference were matters of general ainmterest to members of the Union and appropriate to be made tne subject of publication to members of the Union. The deponents of the affidavits filed on behalf of the applicant were mot cross-examined. The respondents called no eviderr 1 mature of the relief sought by the applicant is dilustrated ty two paragraphs of the affidavit of selly. Those paragraphs are an the nature of pleadings but they sre set out: "13. I fear that unless restrained by this Honourable Court the Respondents will continue to publash articles an Union publications which attack me and other candidates who are likely to he cantesting ballots for positions of National Secretary, - two National Organisers, Queensland State . Secretary and Assistant Secretary, Tasmanian Branch. Elections for these positions w211 te hold tetween May and August, 1984. In additiom, an election for the position of Western Australian Branch Secretary must under the Rules of the Organisation be held prior to f[lecember 1984. In my capacity as National Convener of the 'Reform Group' of the Orgnaisation I know that members of the 'Reform Group' will be contesting each of the above positians. 14. I fear that unless restrained ty this Honourable Court the property, finds amd resources of the Organisation will be expended aim seeving to promote or defeat 3 candidate or groups of candidates ain the forthcoming Union elections by the praintang and oodastriftution of publications containing articles or comment similar to those found an the aforementioned Exhibits. * furang the course of the hearing the applicant sougnt to amend his claim for relief to 2 form contained im 3 document which was handed to the Court. On 30 Maren 1984 the Court made orders ain the form saught by the spplicant. Those orders are sot out am full: "lL. The Respondents and exch of them perform and atserve the Rules of the AMALGAMATED METALS FOUNURY ANL SHIPWRKIGHTS UNION ('the Organisation') by refraining from publishing or distributing to Nenbers of the Organisation or causing to be so published or distritwuted out of the property, funds or resources of the Organisation any nmeawspaper, newsletter, pamphlet or similar publication which supports or promates or tends to support or promote or which seers to defeat any person or 9ro0up of persons who have informed the Orgsnisation in writing that he or they intend to nominate in ballots for the followng offices and positions in the Organisations— (a) National Secretary; (t) National Organasers; (ce) State Secretary, Queensland Branch; (d) Assastant Secretary, Tasmanian Branch; (eae) State Secretary, Western Australia Branch, or which seeks to influence members of the Organisation im relation to voting am the said ballots. The Respondents and each of them perform and observe the Rules of the Organisation by refraining from using ar permitting any person from using the Organisation's property, funds oer resovrces to support or promote a candigst=> or group of candidates or toa defeat any person or group of persons who have informed the Organasation im writing that ne or they intend to nominate in' baljats for «ihe offices and positions referred ta im Order 1. or to imfluence vaters voling ar likely to vote im ballots for euch offices. From the date upon which nominations are called for the affices referred to oan Orders 1. ane 2. abave, the Respondents and each of them perform ard observe the Rules of the AMALGAMATEL METALS FOUNDRY ANt SHIPWRIGHTS UN TON (' the Grganisation') by refraining from publishing or dystritutang to membars of the Organisation or causing to be so published or distributed out of the property. funds ar resources of the Organisation any newspaper, newsletter, pamphlet = or similar publication which supports or promotes or tends to support or promote any camdjidate or group of candidates nominating for such offices or which seevs or tends to defeat 3 candidate or group of candidates or which seeks or tends to anfluence vators voting or likely to vote in ballots for such offices. The Respondents and esch of them perform and observe the Fules of the Organisation by refraining from - li - using or permitting any person from using the Organisation's property, funds or resources to support ar promote a candidate or group of candidates or to defeat 3 candidate or group of Candidates or to unfluence voters an the said ballots referred to im Order 1.°* Appes) N.S-W. No. 14 of 1984 15 the appeal from thst order. On the hearing of the appeals two main issues were parsed: first, the jurasdiction question, mamely whether the Court had yurisdiction to make the order on 30 March 1984, and secondly, 1f so, wat the order made in 3 form which was wathin the power of the Court to mare? The second question essentially rarsed issues as to the inappropriateness of the order made. Tt 18 mecessary to consider first the jurisdiction question, ignoring for that purpose the particular objections to tne form of the order made. The jurisdiction of the Court to hear applications of this kind 15 contained in s.141 of the Act. Sub-sections (1), (1G) and (1H) are set ont: "141.¢3]) A member of am organization may apply to the Court for an order under this section an respect of the organization. (16) An order under this section may give directions for the performance or observance of any of the rules of an organiaatron by any person who 16 under am obligation to perform or observe those rules. (1H) The Court h3s jurisdiction to hear : and determine an application Under : sub-section (1) but, before making an order under this section, the Court shall give amy person 3931nmst whom the order is sought an opportunity of being heard." Under sub-section 141(1G) of the Act, the Court has power to "give directions for the performance or observance of any of the rules* of the Union. The nature of the directions that cam be given are many and varied and are to be moulded to ensure the performance or observance of the rules. A consideration of the judgments an Rk. v. The Commonwealth Court C.L.R. 141 allustrates the wide mature of the jurisdiction and powers conferred ty 5.141 im its earlier form. A reference to the many decisions of the Commonwealth Court of Conciliation and Arbitration, the Australian Industrial Court and this Court libewise allustrates the wide mature of the directions that may te given under sut-section 141(1G). One aspect of the jurisdiction and power ais illustrated an Allen v. Townsend (1977) 31 F.LeK. 431 per Evatt and Northrop Jd. at pp.483-9. That passage should be reaj ain full. In summary, the principles therein stated may be set out briefly. Officers of am organisation are wider a duty to exercise powers conferred upon them by the rules of the organisation bona fade for the purposes for which the powers are conferred, That is 2 statement of pramciple having general application to officers of organizations. It 15 but one aspect of a general principle having application far wider than to officers of organizations. As recently as 1981, 1m Ascot Investments Pty. - 13 - Ltd. v. Harper (1981) 148 C.L.K. 337 at pp.248-9, Gibbs J., as he then was, in speaking of directors of 3a company, said: "The directors are bound to exercise their discretion bona fide in what they consider to be in the anmterests of the company, and not for any collateral purpose, but subject toa that qualification their dascretion as atsolute and uncontrolled: In re Smith _&_ Fawcett Ltd (£1942) - Ch. 304, at Pp-306-208)5 Charles ___ Forte Investments Ltd v. Amanda (€1964] Ch. 240, at pp.2d2-254, 260-261); Australian Metropolitan Lafe_ Assurance Co. Ltd v. Ure ((1923) 33 C.L.R. 199,at pp. 205-206, 217-220, 223). This rule is Bn application of the general principles governing the exercise by directors of their powers; those principles are discussed ain Ngurili Ltd. ve. MeCann €(1954) 90 C.L.~R. 425, at pp.438-440). The cases Cited establish that the onus of proving that the directors in refusing registration did not act in good faith ain what they considered to te in the interests of the company lies om those who challenge their decision." See alsa RusseljJ_ Kinsela Pty. Lid.(In Liq.) v. Kinsels (19834 2 N.S.WLL.R. 452, and tne many cases referred to in that Judgment. It follows, therefore, that aif the members of a committee of an organisation, or aif am officer of an organisation, resolved to exercise 3 power conferred upon them ty the rules of the organization otherwise than bona fide for the purpose for which the power was conferred, a member of the Organization would te entitles to obtain an order under sub-section 141(1G) of the Act. The normsl form of directions given ty that order would be that the respondents to those proceedings perform and observe the rules of the organization by treating the resolution so made as being void and of no - 14 - effect. If necessary, similar directions would be given wath respect to any actions taken or to be taken pursuant to the void resolution. Over the years, the Commonwealth Court of Conciliation and Arbitration, the Australian Industrial Court and this Court have applied another general principle. The general pranciple''21s illustrated by Short v. Wellings (1951) 72 C.A.R. 84, although in reality that case 1s based om the principles enunciated am Allen v. Townsend avove. in Shorts vs Wellings, an election toa affices within am organisation was about to be conducted. Eofore the election commenced, 3 special meeting of the members of the branch of the organization involved resolved to direct the resources of the branch to the promotion and support of the candidature for office of a group of mominees chosen or to be chosen to stand for election. The complainant obtained a3 rule mis2 calling 'spon mamed officers of the organisation, Feang some of the members of the branch, to shaw cause why orders should not be made tnat they perform and otserve the rules of the organisation by treating the resolution as of mo force and effect and boy refraining from giving effect to the resolution and by refraining from using the resources af the organisation for the purposes of the resolution. In defence, the respondents to that proceeding contended that the resolution was an furtherance of an object of the organisation, as contained im its rules. In rejecting that contention and am =wme-rre, the orders atsolute, tie Commonwealth Court of Conciliation and Arbitration comprising Kelly C.J., Foster amd Kirby JJ. said at pp.87-8: - It nust be plain that the objects of the organization cam only te carried aut im accordance with ats rules. The branch am respect of 1ts affazrs 1s further limited, im the attainment of the objects of the organization by at, by the branch rules. The branch rules provide for the election of officers and members of its Committee of Management. Although there 1s no specific tule against the use of the resources and funds of the organisation for tne support of particular candidates at any sucn*'election, to use the property and resources of the branch for such a purpose would deny the right of such candidates as were mot to ke supported by the organication, its Committee of Management, 1ts several authorities, rts resources or funds, to the freedom = § and equality an thear candigature to weich tre election rules imply they are entitiled.* The funds and resources af the argsnication belong as much to them and their supporters as to their Opponents sod theirs. lft cannot be denied that the provisions of the Act and the regulations are directed to the end of having the management ard control of the iffairs and transactions of an organicstian reposed im) a)6 Oo democrsatically = and freely elected tbody of executive and administrative officers. Sa far as the organization 1S concerned every menber, qualified yuoder a yts rules, has the paght to stand far election to am office. To allow the resources af the organivationm to be used in 3 campaign for his YJeoforab «odd bo 3 femial mf Uvab furod-mental right. It would enable the cxisting erecutive, ari whose hands the resources of the organization lie, to ure those resources to defes3t aJ] opposition to, or criticism of, its will. It could result an a complete tyranny and 2 permanent denisl af the democratic mature of the organisation, which the Act and the regulations are calculated to ensure." That principle was stated with respect to a pending election, but there the resolution was directed specifically to the expenditure of resources of the organisation to support particular candidates at that election. The principle has application to tallots im an election amd also to supporting a particular view im a ballot taken pursuant to a plebascite of members. The principle has teen applied, for example, in ~ - 16 - Holmes v. Riordan (1956) 86 C.A-k. 180, Lyons v. Heegan (1978) 35 F.L.R. 430, Kanan v. Hawkins, 14 September 1979, Federal Court of Australia, J.R. Sweeney J., unreported, and Valentine ve» Butcher (1981) Sl F.L.R. 127, In each of those cases application had been made under s.141 of the Act or the predecessor of that section. In Valentine v. Butcher, Keely J. stated the principle at pp.138-9 as follows: "In my view the principle prohibiting the use of the resources of a registered organization in support of one candidate 15 a principle that the use of such resources 16 not to be granted to one candidate and denied to another. It seems to me that am important part of the principle enuncisted by the Commonwealth Court of Comerliation and Arbitration in Short v. Wellings (1951) 72 C.A.R. 84, a5 applied by this Court (J.K. Sweeney J.) in <anan's__case (Unreported - F.C.4., 14 September 1979), 15 that those resources must not be used to defeat a candidate. In my view the implied Prohitation pon the se of the organisation's resources daes moat apply where ihnase resources are an tack equally available to 311 candidates. The prohibition is uwpom the use af the resources or funds of am organisation to support ane candidate im oan election in circumstances where they have beer denied or will te denied to another candidate. AS 1% 18 expressed om Shart v. Wellings such a deniral (given that the resources 'belong' to both sides ain the election) in a 'eamp319n for his defeat' 16 'a deni3l of that fundamentsl right' to 'stand for election' toa 'democratically and freely elected tody of executive and administrative officers'.' The principle has been applied im proceedings being an election inquiry under Part IX of the Act. In ke_Penhallurick (1983) S51 ALAR. 589, Fitagerald J. was comducting an inquiry into an election im the Transport Workers' Union of Australia. At p.59S he relied upon the principle that: - 17 - *,.. even im the absence of am express provision in an organization's rules, there 1s an implicit prohibition upon the use of the resources or funds of an organization to support one candidate ain an election aim circumstances where they have been denied or will te denied to another candidate." His Honour held that a contravention of that principle, althoygh not coming within the extended definition of irregularity contained in s.4 of the Act, nevertheless caunld constitute am irregularity within the meaning of that word, and if that irregularity say have affected the result of the election (sea sut-section 165¢4)), the Court would be justified in declaring that election void; see sub-section 165¢3). The reference to the objects of the Act as set out in s.2, and the detailed provisions contained im the Act and the Conciliation and Artaitration Regulations relating to the election of officers within an orgamication makes it clear that those elections must be conducted fairly, having regard to the aunterests of all members and of all candidates. Implicit in that concept of fsir play 1s the pranciple that the officers exercising power within am organisation shall not exercise that power to authorize the use of the resources of the organization to support or promote a candidate or a group of candidates or to seer ta defeat a candidate or a group of candidates during the conduct of an election to offices within the organization. In the present case 1t 15 mot necessary to determine what are the limits of the -conduct of an election. For present purposes it ais sufficient to say that the election - 18 - commences at least at the closing of nominations for candidates for the election and continues at least until the close of the ballot for that election. If during the conduct of an election, officers of an organization expend the resources of the organisation om conduct which tends to support or promote a candidate or a group of candidates at that election, directions may be given under sub-section 141(16) of the Act that they perform and observe the rules of the organisation by refraining from so expending the resources of the organisation. Of necessity, the rules canmot provide for that type of expenditure, amy specific rule purporting to authorise that type of expenditure being, 2m 311 probability, im =ocomtravention of sub-section 140(1) of the Act; ef. Dugmore v. Porter (1983) 3 I.k. 418, and om appeal*Porter v. Tuqmore, 2 April 1984, wnreported. It follows, therefore, although 1t 15 mot necessary to decide, that in all probability the imterim orders made herein on 2 January 1984 and 2 January 1984 were made correctly. The order made on 30 March 1984, however, calls for further consideration since the conduct complained of ky the applicant did not take place while the elections were being conducted. It cannot be dowkted that officers of an organization have a power to inform members of matters of interest to the organization and ats members and for that purpose to expend the resources of the organization. It 1s for the officers of the organisation to determine what matters of interest may be the subject of such information, the nature of that - 19 - information and the amount of the resources of the organization to be expended. Eventually, 1% is for the members of the organisation to exereise control over the officers as provided im the rules. At times the information published may be contentious and may seem to be favouring one group within the organisation and disadvantaging a competing group, It 3 member can prove that the publication of that information was not made by the officers bona fide for the purpose of the power conferred pon those officers, orders winder sub-section L4l¢i6) of the Act may be made directing the officers to observe and perform the rules of the organisation by refrainang from expending the resources of the organization for the publication of that anformation. Likewise, 1f officers constituting a committee of the organisation resolved to expend resources of the organisation for purposes which are not permitted by the rules of the organisation, similar orders may be made; sec for example Snort v. Wellings above. In the present case the applicant relied upom material published by the respondents, or some of them, at the expense ef the Union over the period July 1981 to February 1984 and contended that the respondents or some of them would continue to publish, at the expense of the Union, similar material detrimentsl to the reform group during elections to be conducted later an the year 1984. In his reasons for judgment the learned trial judge said: "It 1s not appropriate that I reproduce or even attempt to summarise such a volume of material. But, om order to understand the applicant's claim, reference should be made to the text of some of the more recent publications. _The National Newsletter dated S Decemter 1983 reads, so far as mater2a)l as follows: 'Workers must have Unions they can rely on LIES ANIt SLANHEK AKE NOT LEANEKSHIF A camp319gn 15 being waged to denigrate the role of the AMESU in the working out of the economic fccord between the Labor Government and the - Unions. Since Labor's vactory ain the March Election the focus of the Union's work has shifted from the purely andustrial area to the political stage. We are seeking to Ghtsin by working Lith the Lator Government what, under the Fraser Government, we could achieve only by stopping Work and walking out the gate. AMESU Officials played a b19 part im drawing up the Accord with lesding ALP figures before the last Federal Election. DESTRUCLIVE ELEMENTS One would think that 2112 members genurnely interested in getting the most from our Union's work would aim for tne maximum possible unity tm action. However 1t seems that a few are hell bent on trying to destroy our wumaty. They spend all their time throwing muck at the Union's leadership. Recent events have provided clues as to why they should do this. As revealed im the June 1983 Metal Worker, a leading light ain the Queensland Liberal Farty has been touting for signatures om 3 petititon against the Union leadership. This Liberal Leader - not a member of the AMFSU - ssid it was mecessary to change our Union leadership an order to help the Hawke Government. The former secretary of the right wing National Civic Council, Gerald Mercer, au0314.93 the NCC spent $140,000 on AMESU National Elections last year. Mercer, speaking om AKC Radio on May 26th, said the money was spent im support of so-called - 31 - 'peform group' candidates - candidates who didn't win even with this massive financial backing. THE UNANSWERED QUESTION Metal workers must ask why such enormous funds are available to forces trying to get rid of the Unaion's current dedicated and expert leadership. ' Similar comments were made im am editorial written Ry the fairst respondent, the Union's National President, am 'The WMetalworker' dated November 1983. The report of the State Secretary of the Tasmanian Franch dated 7 March 1984 reads, so far a5 Mates als "ATTALKE _ON_THE_UN LON At the last Conference I made reference im omy) 6 6report to) the «0attacks an the Union. The same people who were responsible for the attacks om the Union at the time of my last report are still continuing those attacks and iandeed wore suecessful im Tasmania to the extent that thoy secured the position of State Secretary and two State fliolegates ta the National Conterence. They have 3lso secured 3a position of National Organiser, they were unsuccessful am other states where they have tried toa wine positions of full-time officials and State delegates to National Conference. With reference tio their success iain Tasmania, this was brought about partly as 2 result of the finances the so called Reform Group has teen able ta obtain from sources outside of the Union. How many members who voted im the election would be aware that the Reform Group has the backing of the National Civae Council, who have an unenvisable record of ainterference im the affairs of Tragje Unions throughout Australia. That interference aim Tasmanza wert to the extent that the publications put out by the Keform Group an support of its team contained statements mot made by the candidates but dependant on half truths and annuendo to make up for the lack of union policy and activity of the candidates. Finally delegates should be aware that the so called Reform Group have already indicated that they intend to oppose Bro. Finn as Assistant State Secretary.' Similar comments were made ty the Queensland state secretary in address to the 1984 State Conference held on 16 and 17 February 1984. Earlier editions of the Union rneations ubich were tendered also took up tne theme which emerged from the passages quoted above. For example, 'The Metalworker' for the month af June 1983 publ contained am article in these terms: 'LIBERALS' BIH FOR CONTROL OF AMFSU Senior members of the Queensland Lateral Party sre ws3ging 3 dirty tricks campaign against the AMFSU. They are part of 3 mationsl network of gutsiders attemptin** to seise control of the union. Prominent im the campaign in Queensland is the chaitman of the Capricornis district ar the Literal Party, businessman Norman Byrne. Byrne, 2 former motor company manager, 1s asking metalworkers in Kocknampton to $1gmn 3a petition asking the Industrial Kegistrar to stop AMESU returning officers holding elections for positions. These elections are due in the next few monmtns. Byrne 15 rot an AMFSU member. OUTSIDERS In the central Queensland town Biloela three businessmen are seeking They signatures for the same petition. also are not AMESU members. - 23 - Norman &yrne has 3 long history of opposition to trade wnironism, and is connected wath the extreme right-wing National Civic Council. In September 1972 Byrne organised a dinner for NCC leader B.A. Santamaria in Rockhampton. €& photograph of Bryne welconing Santamaria to the city appeared in the Rockhampton Morning Bulletin. Santamaria has admatted the NCC funded "Reform Group' candidates led by Rod Kelly im AMFSU matiomal elections last year. Byrne, the Literals and the NCC are now Supporting tnose masquerading 35 the 'AMFSU feomocratic Rant and File'C*mmittee' for the purposes of the forthcoming State elections. The elections are for the State Presidency, held by Hrian Burns, and mine National Conference delegateships. The 'Tlemocratic Rank and Fale Committee' claims the elections will te undemocratic and confined to members attending branch meetings if conducted by the unmion's returning officers. This 15 3 lie. Under union rules, these elections would be by a full and secret postal ballot of all ournaon members eligible to vote. The ballot would mot be held im the tranches as claimed by the 'Lemocratic Rant amd File Committee'. So much for therr knowledge of the unionm's rules. Campaign Literature from the 'Lomocratic Rank amd Frle Committee' is a mixture of lies, innuendo and slander! Its theme 19 that the AMESU leadership 1s somehow a threat to the federal Labor government. Union leaders, according to Norman Byrne amd Co, aim at 'stirring dissension and destroying the kind of harmony and concrliationm which the Hawke government is endeavouring to develop'. Metalworters will te touched to learn that the Literal Party and people like * Norman Byrne have had 3 change of heart and mow support Hob Hawke and the ALP. The ANFSU and ats leaderstip showed theite support for the ALP by donating $50,000 te Labor campaign funds. Bob Hawle collected tie cheque in person at 3 meeting of AMFSU Natians! Courerl shortly tefore the election. 'Rob Hawke said then that the AMESU should be congratulated for giving 3 lead to the rest of the trade unrian movement aim regotiations wath the ALF over the economic policy Accord. He said: 'Tl applaud the remarkably constructive way in which this union has operated, ' He added: 'If this union had not adopted such an approach om 3 prices amd incomes policy 21t¢ 168 very unlikely the ALP would be goimg into am election with the confidence we have.'"* The 1ssue tefore the learned trial judge as stated by him was whether; *"... the powers in question have been abused by the application of Union resources tor the advancement of one sectional amterest only rather than an the imterests of members as 3 whole. This oan turn involves 3 question of fsct which fslls te be determined om the documentary material tendered by the applicant.®* His Honour then considered the material published as being published by the respondents at the expense of the Union am the context of am election for offices within the Union. He characterized actions by the respondents as being conducted with a view to influencing the outcome of the election with the object of advancing the prospects of one group of candidates at the expense of the opposing faction. In other words, he relied wponm 3 principle similar to that set out in Allen v» Townsend above, but in the absence of any particular resolution entered into by a committee of the Union. He based his findings om publications instead of conduct engaged in while an election was be1ng held. The assue as stated atove 3rose because of the contentions made before him on behalf of the respondents and tased on Holmes v. Riordan above, and an particular from the opinion expressed cy Tumphy Jd. at p»l37, namely titat duraitmg an election, resources of an organisation may be used to puklish material adverse to a candidate to rebut attacks made ty the candidate upon the organigatironm or 115 management. At the time oft the hearing of the application before the learned trisl judge there was mo election being conducted and so the principle stated arm Holmes vz. Riordan did not arise for application. in any event, ait 1¢ doubtful whether that statement 216 correct. A candidate 3t an election may be quite justified an attacking the management of an organisation by its officers, particularly 121f those officers or their supporters are competing candidates at the election. It would be unfair if an attack of that bind entitled the opposing candidates to use the resources of the organization to further their own interests and to denigrate the interests of the challenging candidate. If that 1s to ke done, ait should te done at the expense of the opposing candidates or their supporters, mot at the expense of the organization. However, im the present case 1t 216 not necessary to determine that issue. It 18 sufficient to ssy that it 1s ampossitle to ~ - 26 - determine in advance what conduct engaged in during an election would justify officers of an organisation expending the resources of the organagstion to ainform members of the organization of the true position relating to that election. If the question does arise, it will be a matter for the judgment of the officers concerned to determine on the facts of the particular case and im the dlaght of the principles expressed, above whether the resources of the organization should be expended for the purpose of publishing information to members of the orqganication. In the present case the applicant did not attempt to rely upon any resolution of the Find existing im Short v. Wellings atove. No election was teing comducted. The applicant saught to rely upon what he claimed to be publication of material adverse to the interests of the reform group and that the publication of this material was Likely to continue Surang the fortheoming elections and thus adversely affect the candidates standing om the reform group ticket. The applicant dad not attempt to establish the absence of bons fides im the actions of the respondents. He did mot attempt to rely upon the principles enunciated im Allen v. Townsend above. The applicant contended that the powers of the respondents must be exercised bona fide for the benefit and in the interests of members of the Union as a2 whole. This is a misstatement of the general principle. The trial judge found that the material which had been published by the respondents had been published wath the object of advancing the prospects of one group of candidates at the expense of the opposing . - 27 - faction, however beneficial such a result may have been thought- to be. In that context, his Honour held that the primary purpose © 'jo. to be achieved was an election result rather than the defence of an attack spon the Union, im the sense discussed im Holmes v. Riordan, above, As has been said, that was the wromg issue to be determined in the proceedings. In our opinion the material does not support the case Said t5 be made out under $.14] of the Act. For this reason the appedl am matter N.S.W. No. 14 of 1984 shauld te allowed. At the hearing, however, counsel for the respondents made a coneerted attack on the terms of the order made. Relief w3s granted on 3a quia timet t3s15, mamely that the practice camplained of by the applicant was so well entrenched In the Union publications that there was every reason to accept that unless restrained, the pattern of comduct would comtinue into the future, presumably during the conduct of the elections due to take place later im the year 1984, That conclusion 15 not necessarily open, having regard to the fact that the respondents consented to the anterim orders when their attention was drawn to the breach of principle discussed earlier im these reasons. There should be no presumption that treaches will continue during the subsequent elections. In Allen vs. Townsend above, Evatt and Northrop JJ. said at p.489; - 28 - "The form of order 25 1n the mature of 3 perpetual anjunction directed against future actions that may be taken by the State executive. We refer to what Lord Walberforce said in Howard Smith Ltd. v. Ampol_ Petroleum Ltd. (£1974] A.C., at pp.834-835). In the present case, 1% 15 impossible to define an advance exact limits beyond which the State executive must mot pass. Im our opinion, 1t would be most unwise to make an order in such broad and tll-defined terms which 1s to operate on future facts aim relation toa undefined rights, duties, powers or privileges of the commitee of management of the Geelong sub-branch." With necessary adaptiorns, the following passage taren from Howard Smath_ Lid. v. Ampo!l Petroieum Lid. (197473 A.C. 821 at p.835, has equal application to cases such as the present: "lo define in advance exact Jimits beyond which directors must mot pass 1s, in their Lordsnips' view, impossitle. This clearly cannot be done by enumeration, since the variety of situations facing directors of different types of company 16 different situations cammot te anticipated. No more, im their Lordships' view, cam +th1s be done ty tne use of a phrase - such as 'bona fide im tne interest of the company 35 3 whole,' or 'for some corporate purpose.' Such phrases, if they do anything more than restate the genersl principle applicable to fiduciary powers, ali best serve, negatively, to exclude from the area of validity cases where the directors are acting sectionally, or partially: 1.&. % improperly favouring one section of tne shareholders against another. Of such cases it has been said: 'The question which arises 15 sometimes mot a question of the anmterest of the compamy at all, but a question of what 1s fair 3s between different classes of shareholders. Where such 3 case arises some other test than that of the 'aumterests of the company' must he applied, ...' (Malis ve. Mills, 60 C.L.R. 150, 164, per Latham C.J.) Irn their Lordships' Opinion at 1s necessary to start with a consideration of the power whose exercise 1S oa1n question, in this case a2 power to issue shares. Having ascertained, on 3 fair view, the mature of this power, and - 29 - having defined as can test te done in the light of modern conditions the, or some, lamits Within which 1t may be execised, 1t 1s then necessary for the court, 2f a partacular exercise of it 1s challenged, to examine the substantial purpose for which it was exercised, amd to reach a conclusion whether that purpose w3s proper or not. In doing so 1t will necessarily give credit to the bona fide opinion of the directors, 1f such 125 found to exist, and will respect their - Judgment as to matters of management; having done this, the ultimate conclusion has to be 3s to the side of 2a fuirly broad line om which the case falls.' There 1s much force in the contentions of counsel for the respondents attacking the form of the order made. In all the circumstances, apart from the general observations already made, no further opinion nmeed te expressed. The two appeals have been heard together. The Court proposes to determine the substantive issues raised in matter N.S.W. Now 14 of 1984. That WJetermination is based on the fact that the Court had jurisdiction to hear and determine the rule mis1 as amended pursuant to leave granted. Accordingly, im matter N.S.W. No. 11 of 1984 the appeal should he dismissed. In matter N.S.W. No. 14 of 1984 the appeal should te allowed, the orders made in matter N.S.W. No. 1 of 1984 on 30 March 1984 should te set aside and the rule nisi therein should te discharged in so far as it sought orders an the form of the orders made om 30 Murch 1984 I certify that this and the Twenty -Enut(28) preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice EVATT + the Hordueble Te. Guctice NORTHROP. Associa: ' Dated: OCTOBER BY "Talon . IN : ERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY N.S.W. Nos. 11 and 14 of 1984 INDUSTRIAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN : R.J. SCOTT and OTHERS Appellants AND: MICHAEL PATRICK JESS Respondent CORAM: Evatt, Northrop and Gray JJ. DATE: 5th October 1984 PLACE: Melbourne REASONS FOR JUDGMENT Gray J.: Appeals have been brought from two judgments of a single judge of the Federal Court of Australia. Both judgments were given in one proceeding, in which orders were sought against the present Appellants pursuant tos. 141 of the Conciliation and Arbitration Act 1904 ("the Act"). The Appellants are the holders of various offices in the Amalgamated Metals Foundry and Shipwrights Union ("the Union"), an organization of employees registered pursuant to the Act. They are therefore persons under an obligation to perform or observe the rules of the Union, within the meaning of s. 141(1G) of the Act. The first judgment was delivered on 2nd March 1984 after the learned Judge had heard argument on a preliminary question, mamely whether the Court had jurisdiction to proceed under s. 141, in the absence of any specific rule of the Union prohibiting the conduct by the Appellants of which complaint was made. His Honour held that the Court had jurisdiction. The matter then proceeded to trial. The second judgment was given on 30th March 1984. On that date, the learned Judge made the following order: "1. The Respondents and each of them perform and observe the Rules of the AMALGAMATED METALS FOUNDRY AND SHIPWRIGHTS UNION ("the Organisation") by refraining from publishing or distributing to members of the Organisation or causing to be so published or distributed out of the property, funds or resources of the Organisation any newspaper, newsletter, pamphlet or similar publication which supports or promotes or tends to support or promote or which seeks to defeat any person or group of persons who have informed the Organisation in writing that he or they intend to nominate in ballots for the following offices and positions in the Organisation:- (a) National Secretary; (b) National Organisers; (c) State Secretary, Queensland Branch; {d) Assistant Secretary, Tasmanian Branch; (e) State Secretary, Western Australia Branch, or which seeks to influence members of the Organisation in relation to voting inthe said ballots. The Respondents and each of them perform and observe the Rules of the Organisation by refraining from using or permitting any person from using the Organisation's property, funds or resources to support or promote a candidate or group of candidates or to defeat any person or group of persons who have informed the Organisation in writing that he or they intend to nominate in ballots for the offices and positions referred to in Order 1. or to influence voters voting or likely to vote in baliots for such offices. From the date upon which nominations are called for the offices referred to in Orders 1. and 2. above, the Respondents and each of them perform and observe the Rules of the AMALGAMATED METALS FOUNDRY AND SHIPWRIGHTS UNION ("the Organisation") by refraining from publishing or distributing to members of the Organisation or causing to be so published or distributed out of the property, funds or resources of the Organisation any newspaper, Newsletter, pamphlet or similar publication which supports or promotes or tends to support or promote any candidate or group of candidates nominating for such offices or which seeks or tends to defeat a candidate or group of candidates or which seeks or tends to influence voters voting or likely to vote in ballots for such offices. 4. The Respondents and each of them perform and observe the Rules of the Organisation by refraining from using or permitting any person from using the Organisation's property, funds or resources to support or promote a candidate or group of candidates or to defeat a candidate or group of candidates or to influence voters in the said ballots referred to in Order 1." This order was in the form finally settled on by counsel for the Applicant, Michael Patrick Jess, in the course of the trial. To understand the form of the order, it is necessary to examine the facts and the history of the proceeding before the learned Judge. The proceeding was commenced by Rule to Show Cause granted on 2nd February 1984. At that time, there were in progress elections for certain offices within the Union. The period during which nominations could be lodged had opened on 1Sth August 1983 for the position of Queensland State President, and for nine positions as Regional Conference Delegates froa Queensland. On 19th September 1983, the nomination period opened for the office of National Organizer - Division 4. In respect of all of these positions, a ballot had opened on 23rd January 1984, and was due to close on 17th February 1984. As was the case with several elections within the Union in recent years, these elections were contested by candidates who styled themselves as members of a "Rank-and-File Reform Group". This group has apparently set itself to challenge the previously elected leadership of the Union wherever possible. In the election for State President, Queensland Branch, the contest was between the incumbent and a member of the reform goup. In the election for National Organizer-Division 4, a reform group member and an Acting National Organizer were the candidates. Electioneering material published on behalf of the reform group candidates showed photographs of reform group members in close proximity to the Prime Minister, Mr. Hawke. One such photograph showed the reform group candidate for National Organizer-Division 4 shaking hands with Mr. Hawke. The tenor of the material was to suggest that the previously elected leadership of the Union was communist or communist controlled, and antagonistic to Mr. Hawke, and the Labor government, whereas the reform group was concerned to work closely with the government. Apparently in response to this material, there were published and distributed at the expense of the Union various hational newsletters. The tenor of these was to suggest that the use by reform group candidates of photos of Mr. Hawke involved deception, and to emphasize that neither Mr. Hawke nor the Australian Labor Party endorsed or favoured candidates in trade union elections. There were also published in these national newsletters statements by Mr. Hawke and Mr. Kelty, the Secretary of the Australian Council of Trade Unions, praising the Union for its attitude to and co-operation with the policies of the Australian Labor Party. When the Rule to Show Cause was granted, on 2nd February 1944, specific complaint was made of two Such national newsletters. On that day, the learned judge made an interim order, no notice of the proceeding having been given to the Appellants, restraining them in certain respects. On the following day, when the matter was returnable before the learned judge, the Appellants consented to the continuation of that order. The order was in the following terms: "1. Until further Order the Respondents and each of them perform and observe the Rules of the METALS FOUNDRY AND SHI IGHTS UNION ("the Organisation") by refraining from publishing or distributing to members of the Organisation or causing to be so published or distributed out of the property, funds and resources of the Organisation any newspaper, newsletter, pamphlet or similar publication which supports or promotes or tends to support or promote a candidate or group of candidates or which seeks to defeat a candidate or group of candidates in ballots for the following offices and positions of the Organisation:- (a) State President, Queensland Branch; (b) Regional Delegates to National Conference; (c) National Organiser, Division 4. 2. Until further Order the Respondents and each of them perform and observe the Ruies of the Organisation by refraining from using or permitting any other person from using the Organisation's property, funds and resources to support or promote a candidate or group of candidates or to defeat a candidate or group of candidates in ballots for the following offices and positions of the Organisation: -— (a) State President, Queensland Branch; (b) Regional Delegates to National Conference; {c) National Organiser, Division 4." Although this order was not expressed to be limited in terms of time, it seems to have been contemplated by all the parties, and by the learned Judge, that it would cease to have effect on 17th February 1984, when the ballots closed. On ist March 1984, pursuant to leave granted on 23rd February, the Rule to Show Cause was amended. In part, the amendments made were for the purpose of adding claims for orders that the Appellants pay to the Union the costs of production of three national newsletters and one issue of the Metal Worker, a journal of the Union. Any question of payment by any of the appellants to the Union in respect of any publication has been adjourned for later determination by the Court, constituted by a single Judge. It is inno way the subject of either of the Appeals. The other major respect in which the Rule to Show Cause was amended was to add the following claims: "13. That the Respondents and each of them perform and observe the Rules of the Organisation by refraining from publishing or distributing to members of the Organisation or causing to be so published or distributed out of the property, funds or resources of the Organisation any newspaper, newsletter, pamphlet or similar publication which supports or Promotes or tends to support or promote any candidate or group of candidates or which seeks to defeat a candidate or group of candidates or which seeks or tends to influence voters in ballots for the following offices and positions in the Organisation: -~- (a) National Secretary; (b) National Organisers; (c) State Secretary, Queensland Branch; (d) Assistant Secretary, Tasmanian Branch; (e) State Secretary, Western Australia Branch. 14. An order that the Respondents and each of then perform and observe the Rules of the Organisation by refraining from using or permitting any person from using the Organisation's property, funds or resources to support or promote a candidate or group of candidates or to defeat a candidate or group of candidates or to influence voters in the ballots referred to in the preceding Order." It will be seen that these claims rélated to clections other than those which were current at the time when the Rule to Show Cause was granted. At the time when the amendments were made, it was anticipated that each of the elections referred to in these new claims would take place within 1984. In fact, on the hearing of the Appeals, the Court was informed by counsel for Mr. Jess that no election for State Secretary, Western Australia Branch, was expected to take place during 1984. In the course of the hearing of the proceeding before the learned trial Judge, the Applicant, Mr. Jess, placed reliance upon a number of publications produced and distributed at the expense of the Union, in previous years and up to the time of the trial. The Applicant's case was that the continuation of publications of the same nature as those put in evidence could be expected, unless the Appellants were restrained by the Court from producing and distributing them or causing them to be produced and distributed. The publications contained material which was critical of the reform group and some of its members, and which alleged that election campaigns on behalf of reform group ~ 10. candidates had, in the past, been funded by the National Civic Council. Reliance was also placed upon a report made to the State Conference of the Tasmanian Branch of the Union, which contained strongly worded criticism of the reform group and certain of its members. It is convenient to consider separately the question of the jurisdiction of the Federal Court of Australia to make the orders ultimately sought by the Applicant, and then to consider Po, Se ee ee, ee ee Oe ae A ey Sr - ee ee ee a me Td me os - a= the principles appiicabie to cases such as this, cation 2 -assld aS appswsCacion of those principles to the particular facts, and the order which the learned Judge made. Jurisdiction The applicant invoked sub-sections (1), (1G) and (1H) of 8. 141 of the Act in seeking the order which was granted to hin. These provisions are in the following terms: "141.(1) A member of an organization may apply to the Court for an order under this section in respect of the organization. (1G) 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 is under an obligation to perform or observe those rules. (1H) The Court has jurisdiction to hear and determine an application under sub-section (1) but, before making an order under this section, the Court shall give any person against whom the order is sought an opportunity of being heard." As has been stated earlier, the Applicant did not rely on any express provision in the rules of the Union as prohibiting ll. the conduct of which he complained. Both before the learned Judge, and on appeal, the argument on behalf of the Applicant was directed to the proposition that the court was capable of compelling the performance or observance of "implied rules" or implied terms in the rules. The concept of implied rules or implied terms in the rules of an organization registered under the Act is difficult, for a number of reasons. Section 132(2) requires organizations to comply with prescribed conditions. The conditions are prescribed in reg. 115 of the Conciliation and Arbitration Requlations. Particular reference is made to sub-reg. (2). Among the conditions is the requirement that an organization have rules which make provision for the matters listed in reg. 115(1)(d). In addition, various provision of Part VIII of the Act lay down subjects for which the rules of an organization must provide. Particular reference is made to ss. 133, 133A, and 133B. The content of the rules themselves is controlled toa significant degree by s. 140 of the Act. Sub-section (1) of this section contains both positive and negative requirements which bear upon the rules of an organization. Under s. 157 of the Act, @ copy of the rules of an organization certified by the Industrial Registrar to be a true and correct copy is prima facie evidence of the rules of that organization. Section 188A provides for the furnishing to a member of an organization of a copy of the rules of the organization upon request and upon payment of a prescribed amount. Plainly, there are strong 12. reasons for holding that, so far as possible, a member or any other person desiring to ascertain the content of the rules of an organization should be able to do so by reference to a certified copy or to the rule book, without having to consider whether the court might not, in some proceedings, find the existence of additional implied terms or rules. In the course of argument, the Court was referred to the opinion of the majority of the Privy Council in B.P. Refinery Pty. Ltd. v. Hastings Shire Council (1977) 52 A.L.Jd.R. 20, at page 26, as to the circumstances in which courts will recognize implied terms in contracts. This passage is in the following terms: "Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1)it must be reasonable and equitable; (2)it must be necessary to give business efficacy to the contract, 50 that no term will be implied if the contract is effective without it; (3)at must be so obvious that "it goes without saying"; (4)it must be capable of clear expression; (5)it must not contradict any express term of the contract." The application of these criteria to the rules of an organization would not be free from difficulty. In particular, the concept of "business efficacy" is not easily transported from the commercial area into the rules of an organization. In addition, the difficulty of finding something so obvious that it goes without saying, and is not already written into the rules, whether as a matter required by the Act or the Regulations or otherwise, is 13. difficult. A further problem which may arise is that the basis of the rules of an organization may not be purely contractual. True it is that, before registration as an organization is effected, there must be in existence an association complying with the prescribed conditions and the other provisions of the Act. The rules of such an association will bind its members as a contract, notionally made by each member with each of the others. Once registration takes effect however, the rules of an organization may be regarded as deriving some, at least, of their force and effect from the Act. This possibility was adverted to by Latham C.J. in R. v. Commonwealth Court of Conciliation and Arbitration ex parte Barrett (1945) 70 C.L.R. 141, at page 151, where His Honour said: "In the present case, it is not shown that the rules of the organization were binding upon members of a voluntary association by virtue of a contract before the organization became a registered organization under the Act. But, even if it were shown that the rules had previously, by virtue of a contract, become binding upon the members of the voluntary association, that fact alone would not, after registration, be the source of rights or duties, either in the case of original members, or in the case of members who joined the organization after the registration. The rules, as registered, are what are binding. It is not necessary or relevant to in order to discover what the rules are to make any inquiry into any agreement by any of the members. In my opinion, the rules as rules of the organization derive their force fromthe Act, and, therefore, a controversy as to the observance or performance of the rules is a matter arising under the Act. A claim that the rules should be observed and performed is a claim to a right conferred by or under the statute. It therefore arises under the statute." For present purposes, it is unnecessary to debate the correctness or otherwise of this proposition, which does not seem to have . 14. been echoed in the judgments of the other members of the court in Barrett's case. The importance of the point is that the tests for the implication of terms in commercial cases do not necessarily sit easily with the rules of organizations. The idea that implied terms can be found in the rules of organizations, and that those implied terms are capable of enforcement pursuant to s. 141 of the Act, seems to have surfaced in the decision of the Australian Industrial Court in Gordon v. Carroll (1975) 27 F.L.R. 125, especiaiiy at pages 155-156. In Dugmore v. Porter (1982) 3 I.R. 418, at pages 421-2, Northrop J. expressed doubt whether Gordon v. Carroll was authority for the proposition that the Court could give directions for the observance of an implied rule. On appeal, in Porter _v. Dugmore, Federal Court of Australia constituted by Smithers, Keely and Sheppard JJ., 2nd April 1984, unreported, Smithers J. (with whom Sheppard J. concurred) expressed the view that this doubt is well founded. I agree with that view. The difficulty of implying terms into the rules of an organization does not, however, mean that such rules are to be construed as if no implication whatever arises from then. In many respects, there are to be derived from the express terms of the rules, the terms of the Act and the Regulations, and the nature, function and purpose of the organization concerned, implications which limit what might otherwise be the extent of the express terms of the rules. The most obvious example is that 15. powers given by the rules of organizations to inflict penalties on mesbers are construed as being subject to the implication that such powers will not be exercised without adherence to the principles of natural justice. The implication of the requirements of natural justice is so well established that it is unnecessary to cite authority. Porter v. Duqmore, referred to above, was itself a case in which both Northrop Jd. and the Full Court held that there existed an implied limitation on the powers of the governing body of an organization, preventing the institution of a system requiring members of the organization to possess "OK" cards distributed by the organization, in order that those members could obtain employment. In Jansen v. Slater (1974) 24 F.L.R. 279, the Australian Industrial Court held that a power in the rules of an organization which enabled the organization to make payments to former full time officials was impliedly limited to payments which did not constitute mere gifts. No doubt, other examples of implied limitations on the powers expressed in the rules of organizations could be found. Where such an implied limitation has been exceeded, the question arises whether an act which is outside the true extent of the Power can be restrained in the exercise of the jurisdiction given by s. 141 of the Act. In some cases, it may be possible to point toa specific rule or specific rules the performance and observance of which is sought. For instance, if a member of an organization is expelled without being afforded an adequate opportunity to be heard on the question of his or her ~ 16. expulsion, it might be said that specific provisions of the rules entitle him or her to continue to hold membership in the absence of avalid decision terminating that membership. Where the decision does not involve expulsion, but rather a fine or a censure, this analysis may become more difficult; it may not be possible to point to any provision of the rules which, in terms, entitles the member concerned to be treated as if he or she had not been fined or censured. Nevertheless, the authorities indicate that those responsible for the decision in such a case may properly be ordered to treat it as null and void under s. 141 of the Act. See, for instance, Lynch v. Waters (1967) 11 F.L.R. 116, and Magner v. Fowler (1979) 46 F.L.R. 78. In such cases, it is not possible to point to any specific provision of the rules the performance or observance of which is being ordered or directed. Ina real sense, the Court is ordering or directing the performance and observance of the rules of the organization concerned as a whole, the impugned act being regarded as a departure from the overall scheme of such rules. At all events, the jurisdiction of the Court in such cases seems to be so well established that it is too late to attempt to overturn it. For this reason, in appearing to be based on the proposition that an applicant for relief under s. 141 will base his or her case on a specific rule or specific rules of the organization concerned, 0. 4 R. 15(5)(a) of the Federal Court Rules may proceed on a wrong assumption. 17. In the present case, attention was directed to certain express provisions in the rules of the Union. These were found in rules 6, 15 and 16. To the extent that they are relevant, they are as follows: "RULE 6 POWERS OF NATIONAL COUNCIL 1. The National Council shall be the Committee of Management of the Union and shall subject to the powers and decisions of the National Conference and these Rules, have the care, control, superintendence and Management in all respects of the affairs, business, funds and property of the Union and without limiting the generality of the foregoing it may: (a) interpret the Rules and enforce the general policy as decided by the National Conference. (b) determine matters of policy not covered by Conference decisions. (c) control and conduct the business and affairs of the Union while the National Conference is not in session. (d) appoint the Editor of the Union Journal and Manage and control the policy of the Journal. (e) expend such monies as may in the opinion of the Council be necessary. (£) aes th) ensure that Officers and Committees of the Union carry out the Rules, decisions and policies of the Union and impose penalties in accordance with these Rules. (i) ee (j) control and supervise the work of the National officers of the Union. 18. ULE_15 HOLDING OF PROPERTY AND LEGAL PROCEEDINGS 1. All funds, investments and other property of the Union shall be vested in the National Trustees as joint tenants and be held by them in trust for the members of the Union. RULE _16 INVESTMENTS COMMITTEE AND POWERS OF NATIONAL TRUSTEES 1. The National Trustees shall have power: (a) To receive money or other property paid, delivered or conveyed to them as Trustees of the Union and to expend moneys without distinction between capital and income. (b) To invest, sell, exchange or otherwise dispose of investments or other property of the Union and to deal with the funds of the Union including purchase or otherwise acquiring of property out of the funds of the Union." The real question is as to the nature of the implied limitation (if any) on these express powers. If some relevant implied limitation exists, the Court has jurisdiction to direct the appropriate persons who are under an obligation to perform or observe the rules of the Union to treat as null and void, and to refrain from continuing, any act which exceeds the powers given by the rules on their true construction. Principles In determining whether and to what extent the express powers contained in the rules of the Union are limited by implication, it is necessary to examine a number of principles. 19. To some extent, these principles are capable of conflicting in certain cases. Where such conflict occurs, it is necessary for the Court to resolve it, having regard to the circumstances of each case. For convenience, the principles will be numbered to enable briefer reference to them when their application is considered. 1. It is proper, and perhaps necessary, for an organization to communicate with its members about the affairs of the organization and matters which may be of interest to the members. In the exercise of the power give by s. 5l1(xxxv) of the Constitution, the Parliament has chosen to set up a system of conciliation and arbitration, which depends primarily upon the existence of registered organizations, to represent those whose interests will be affected by the agreements or decisions reached as a result of the conciliation and arbitration process. That the Parliament chose to rest the system largely upon registered organizations, whereas it might have chosen other means, has been recognized at least since Jumbunna Coal Mine, No Liability v. Victorian Coal Miners' Association (1908) 6 C.L.R. 309; see especially the judgment of O'Connor J. at pages 358-360. In the making of demands which give rise to industrial disputes, which found the jurisidiction of the Australian Conciliation and Arbitration Commission, registered organizations act as parties principal, and not as agents for their members: Burwood Cinema Ltd. v. Australian Theatrical nd Amusements Employees' Assocjation (1925) 35 C.L.R. 528. It is obvious that the responsibilities of an organization within the system of 20. conciliation and arbitration could not adequately be carried out in the absence of communication between those charged with the government of the organization and its members. For this reason, it has been held that the publishing of a newspaper for members fell within the powers of an organization, even in the absence of any specific power of that nature: Australian Workers' Union v. Coles £19171] V.L.R. 332. That decision was expressly approved by the majority of the High Court in Williams v. Hursey (1959) 103 C.L.R. 30; see page 52 in the judgment of Fullagar J., with whom Dixon C.J. and Kitto J. concurred. For the same reason, communications between officials of an organization and its members on matters falling within the interests of the members would be the subject of qualified privilege, and hence immune from actions for defamation in the absence of malice. Compare Hay v. Australasian Institute of Marine Engineers (1906) 3 C.L.R. 1002 and Duane _v. Granrott €19823 V.R. 767. This power to publish communications to members is generally capable of exercise whether or not an election within the organization is taking place or is about to take place, and whether or not the matters published might be said to influence or be likely to influence the votes of members in such an election. To hold otherwise would be to restrict unduly the operations of organizations, and to require of them a standard of conduct different from that commonly applicable in other democratic 21. institutions. In other words, it cannot be said that those responsible for the content of official journals of an organization must refrain from informing members about, for example, the results of the conciliation process, simply because those results might reflect credit upon those officials, and thereby attract votes. 2. In the expenditure of the funds and the use of the resources of an organization, its objects and powers are to be interpreted broadly, so that any action which can fairly and reasonably be regarded as falling within those powers and objects will be valid. This test emerges from Williams v. Hursey (1959) 103 C.L.R. 30, at pages 57-58 in the judgment of Fullagar J., with whom Dixon C.J. and Kitto J. concurred, and from Stevens v,. Keogh (1946) 72 C.L.R. 1, at pages 22, 27-28 and 30. Where the decision to expend funds or use resources is made by the members of an organization themselves, in general meeting, or by persons elected to conduct the affairs of the organization, the court will be slow to hold that a particular expenditure or use of resources is bheyond the powers given. The court does not substitute its own opinions as to what is proper for those of the persons making the particular decision. In Williams v. Hursey, referred to above, it was specifically held that a governing body within an organization could properly take the view that all the members of the organization should give financial support toa particular political party. 22. 3. A power given to a person or persons by the rules of an organization must be exercised in good faith and for the purpose for which it is given, not for some ulterior or extraneous purpose. In support of this proposition, it is unnecessary to do more than to refer to the joint judgment of Evatt and Northrop JJ. in Allen v. Towmsend (1977) 31 F.L.R. 431 at pages 483-489, and to the cases cited in that passage, although the proposition at page 483 that the fiduciary duty therein referred to is owed to the members of the organization, as distinct from the organization itself, may be questionable. in this respect, it is important to note that the onus of proving lack of good faith or ulterior purpose rests upon those who seek to overturn the exercise of a power, and not upon those who seek to uphold it. See Ascot Investments Pty. Ltd. v. Harper (1981) 148 C.L.R. 337, at pages 348-349 per Gibbs J. (as he then was), with whom Stephen, Aickin and Wilson JJ. concurred. 4. The funds and property of an organization may not validly be used to support one candidate or group of candidates in an election, or one point of view in a plebiscite, to the exclusion of another candidate or other candidates or the opposite point of view, or to campaign against a candidate or candidates in an election ora point of view in a plebiscite. This principle, or something like it, has emerged from a number of authorities, including Short v. Wellings (1951) 72 C.A.R. 84, Holmes _v. Riordan (1956) 86 C.A.R. 180, Lyons v. Deegan (1978) 35 F.L.R. 430, Kanan v, Hawkins, Federal Court of Australia, - 23. constituted by J.B. Sweeney, 14th September 1979, unreported, Re stra] a Pos T communications Union: ex rte Wilso (1979) 28 A.L.R. 330, Stephenson v. Dowdell, Federal Court of Australia, constituted by J.B. Sweeney J., 19th June 1980, unreported, Valentine v. Butcher (1981) 51 F.L.R. 127 and Re Penhallurick (1983) 51 A.L.R. 589. This principle usually operates to invalidate acts which might be said to fall within the literal terms of some power given to some person or persons by the rules of an organization. It operates, therefore, by way of implied limitation upon the express terms of such a power. For this reason, having regard to the matters to which I have referred on the question of jurisdiction, care is necessary to ensure that any implication is proper. In some of the cases in which this principle has been referred to, it has been expressed in terms that require that the funds and resources of an organization must be used equally for the benefit of all members. See, for instance Kanan v. Hawkins, referred to above. In the present case, in his judgment of 2nd March 1984, the learned trial judge adopted this formulation of the principle. In my view, it is incorrect. There are many situations in which the governing body of an organization will quite properly expend the funds of an organization in a way which will benefit only some members, or will benefit some members more than others. Some organizations find it necessary to subsidize the expense of running small branches by payment out of funds collected from members of larger branches. In some cases, the 24. pursuit of a claim for industrial conditions on behalf of one member or a group of members may involve a disproportionate expenditure of the organization's funds, without any real possibility of a flow on of any conditions won to other members. Depending upon the circumstances of each case, these unequal applications of funds may be perfectly proper. To require that those whose responsibility it is to control the expenditure of an organization's funds treat every item of expenditure on the basis that all members are equally entitled to the funds is to go beyond the area of proper implication. It must also be borne in mind that there is nothing intrinsically wrong with the use of the funds and resources of an organization to promote candidates in elections within the organization. For example, an organization may publish to members a journal containing the election addresses of all candidates. The principle only comes into play when there is a denial of an opportunity to some candidates which is made available to others. There may even be situations in which some use of the funds and resources of the organization to favour one candidate may be appropriate. For instance, the committee of management of a branch may take the view that the interests of the branch will be furthered by the election of a member of that branch to some Federal office. In such circumstances, the committee of management may see it as proper to campaign within the branch for the election of such a person. 25. The exact basis of the principle is difficult to determine. In some respects, it is akin to the rule that a fiduciary agent must not profit from his or her trust. That rule does not, however, explain in its entirety the principle. In some cases, the person responsible for disseminating electioneering material may only profit from its dissemination by the election of other persons whom he or she wishes to be elected. In part, the principle must be taken to rest upon implication derived from the statutory framework within which an organization operates. For some time, reg. 115(1)(d)(v) of the Conciliation and Arbitration Regulations has obliged organizations to have rules which make provision for the control of committees by members. Similarly, reg. 115(1)(d)(1) has required rules for the election of committees, officers and other governing bodies. More recently, the express objects of the Act have included that which is found in s. 2(f), namely to encourage the democratic control of organizations and the full participation by members in their affairs. If the rules of an organization were seen to allow those in power to use the funds and resources of the organization to retain their position of power, they would hardly be described as making provision for elections, or for the control of committees by members, and they would tend to run counter to the object found in 5. 2(f). As is the case with claims against fiduciary agents who have profited from their positions, the remedies appropriate to departures from this principle will vary. There may be cases in 26. which a payment to the organization sufficient to cover any cost to tt of the publication will be a sufficient means of dealing with the situation; the result would be the same as if electioneering material had been produced in the first place at the expense of those producing it. For present purposes, it is unnecessary to decide whether such repayment can be ordered pursuant to s. 141 of the Act, or whether it is necessary to rely upon State law, with possible access to the accrued jurisdiction of this Court. Without examination of the particular rules of an organization, it will often be impossible to say where relief should be sought. In other cases, repayment will not be a sufficient remedy. If, for instance, the benefit has been taken of a letterhead of the organization, which might be thought to influence voters more than material obviously produced on behalf of one candidate, some other remedy might be necessary. In such circumstances, a publication may be restrained under s. 141 if it is known about in advance. There may be cases in which the infringement is such as to amount to an irregularity for the purposes of Part IX of the Act, and the Court would then be entitied to order the conduct of a fresh ballot ora fresh election if the result of the election may have heen affected by such an irregularity. Because of the vast variety of situations which might occur, it is impossible to lay down any guidelines as to the precise circumstances in which this principle will operate, or as to the appropriate remedy in any such circumstance. Each case will have to be degit-with as it arises. ~ 27. It remains to consider the application of this principle, and those earlier set out, to the facts of the present case, and to consider the order made by the learned trial Judge. The Application of the Principles Before the learned trial Judge, no attempt was made to prove the facts which would have been necessary if reliance were placed upon principle 3. In other words, evidence was not led to show lack of good faith or the existence of some ulterior or extraneous purpose in respect of any decision to publish the material complained of. Reference was made at the trial to some of the cases concerned with a similar principle in relation to companies and other decision making bodies (although not, apparently, to Allen v. Townsend, referred to above). On appeal, counsel for the Applicant sought to rely upon the fact that none of the Appellants had sworn an affidavit or entered the witness box as evidence of bad faith or ulterior purpose. Such an argument, however, attempts to reverse the onus of proof. In addition, there may be many reasons for failure to give evidence. Reliance was also placed upon the history of publications, the allegation being that the Appellants, through the Union's journals had consistently sought to denigrate the reform group and its members. This proposition, however, may equally be consistent with good faith on the part of the Appellants. It does demonstrate that they did not seize on a particular occasion for the purpose of electioneering. One further factor needs to 28. be mentioned in this context. The fact that the Appellants were prepared to consent to the continuation of an interim order by the learned trial Judge, restraining them in broad terms from publishing material during the conduct of the elections which were then current, tends to show that there was no lack of good faith on the part of the Appellants. In the absence of evidence of bad faith or ulterior purpose, the question is one of the application of principles 1, 2 and 4 to the particular circumstances. It will be seen that there is some possibility of conflict between principle 4 on the one hand, and principles land 2 onthe other, ina given situation. Such conflict is inevitable, and must be resolved by the Court on the particular facts of a case. Generally speaking, principle 4 will only come into operation during the actual conduct of an election, i.e. at a stage when it is known with some certainty who are the candidates contesting the election. During the period between the lodging of nominations and the close of any ballot, the operation of principles 1 and 2 will be restricted to some extent by principle 4. In short, it will not be a proper use of the funds and resources of an organization to apply them to electioneering. In my view, notwithstanding the conduct of the elections which were in progress when the learned Judge first granted the Rule to Show Cause, it was proper for the Union to inform, or to continue to inform, its members of the attitude of the governing ~ 29. bodies of the Union to the Prices and Incomes Accord, to the Australian Labor Party, and to the Government and the Prime Minister. It was also proper to remind members of support which had been given by the Union to the Australian Labor Party in the preceding Federal election campaign. In like manner, officers of the Union could inform members of the attitude taken by the Australian Labor Party and Mr. Hawke to the question of supporting or endorsing candidates in elections within Unions. It was also proper, in my view, to inform members that the National Civic Council was alleged to have supported candidates in past elections within the Union; the question of outside bodies taking an interest in the results of elections within the Union could reasonably be seen as of interest to members. All of these matters fell within principle 1. Although it might be said that some or all of them could influence voters in their choice of candidates inthe elections, they were nevertheless subject upon which communication to members could continue, even during the conduct of elections. On the other hand, when statements were made in the publications of the Union, published during the conduct of elections, to the effect that the reform group or some of its members were guilty of deception, principle 4 came into operation. There is a difference between stating facts or alleged facts about a particular subject, and offering opinions ~ 30. which are abusive or praiseworthy about particular candidates or the-groups with which they are identified. The latter amounts to electioneering. Principle 4 then overrides principle 1, during the conduct of an election. The learned Judge does not appear to have approached the matter with this distinction in mind. Rather, His Honour's attention seems to have been directed to the question whether the funds were expended in the interests of the members as a whole. I have alreaay held this to be an inappropriate criterion for determining the propriety of expenditure. In addition, His Honour took the view that publication was with the object of advancing the prospect of one group of candidates at the expense of the opposing faction, and that this was improper. In the absence of evidence of subjective purpose, it is difficult to see how this conclusion could be reached. The Orders It is clear that the orders which the learned trial Judge made went far beyond what the occasion demanded. Their effect was to deny toa very large extent the operation of principles 1 and 2. They were also too broad to justify by reference to principle 4. Even if principle 3 had been properly invoked, the orders would have to be considered as_ too broad, because they would operate to prevent publications whether or not they were made in good faith and for the purpose for which the 31. power was given. There is a real danger in attempting to frame orders under s. 141 of the Act in broad and general terms, by reference to past conduct. This is particularly so when such orders would operate irrespective of the times at which elections began and ended. A number of specific criticisms can be made of the form of the order made by the learned Judge. Paragraph 1 of that order prohibits the publishing or distribution of any newspaper, newsletter, pamphlet or similar publication which supports or promotes or tends to support or promote certain persons. In the overall conduct of the affairs of the Union, it might be very aifficult for any of the Appellants to determine whether they were acting in breach of an order in these terms in publishing or distributing a particular document. In a sense, any report to the members of the Union about any industrial affairs might be regarded as tending to support certain office bearers of the Union by showing that they had discharged their duties in sone way beneficial to some or all of the members. The manner of discharge of their duties by office bearers is a matter of great importance to the members, and a proper subject of communication with them. Further, paragraph 1 of the order prohibits publications which seek to defeat certain persons. The change in language from "tends to support" to "seeks to defeat" may indicate a change from an objective test to a subjective one in circumstances where there appears to be no reason for such a change. Paragraph 1 of the order is also intended to operate in ~ 32. relation to persons or groups of persons who have informed "the Organisation" in writing that he or they intend to nominate in ballots for certain offices. It is not clear from the order how the Union can be notified in writing, and there is no procedure laid down in the rules whereby intending candidates for future elections may notify the Union in writing of their intention to stand. The idea of a group of persons informing the Union in writing that they intend to nominate is one which lacks clarity, especially on the question whether each member of the group need be named. After the list of offices to which paragraph 1 of the order is intended to relate, the phrase "seeks to influence" recurs, raising again the question whether a subjective test is intended. Similar criticisms may be made of the other paragraphs of the order. The single most important defect in the order is that nowhere does it contain any express time limit. On its literal terms, members of the Union could render themselves immune from criticism in the Union's publications by giving some written notice that they intended to nominate for the offices mentioned in future years. The reality was that, by the time the order was made on 30th March 1984, the occasion for making any order restraining publication with reference to the elections which were current at the time when the Rule to Show Cause was granted had passed. The occasion for making any orders with respect for future elections had not yet arisen. If it does arise, further proceedings may be brought under s. 141 with respect to specific allegations, and orders can be made in specific terms. 33. In the circumstances, the appeal in matter N.S.W. No. 14 of 1984 should be allowed, the order made on 30th March 1984 should be quashed, and the amended Rule to Show Cause should be discharged insofar as it sought orders restraining publications. The appeal in matter N.S.W. No. 11 of 1984 was strictly unnecessary; questions of jurisdiction could have heen dealt with in the other appeal. Nevertheless, because the decision of the learned Judge on 2nd March 1984 was correct in the result, that appeal should be dismissed. 3a heteore Mee