e— IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAG No. 8 of 1983 EX TEMPORE JUDGMENT ) ) ) ) INDUSTRIAL DIVISION ) ) ) ) ) REVISED FROM TRANSCRIPT Coram: 7 September 1984 BETWEEN : MICHAEL ANTHONY PRICHARD (Appellant) & ORS (Respondents) Smithers ACJ, Keely and Gray JJ. REASONS FOR JUDG Smithers ACJ.: In this matter we have found it unnecessary to call upon counsel for the respondents. I make the following comments on my own behalf. This is an appeal from a decision of his Honour Mr. Justice Northrop dismissing an application for an order under section 141 of the Conciliation and Arbitration Act 1904 that the respondents observe the rules of the organization of the Federated Clerks - Union of Australia by recognizing and treating the applicant as a member of the organization and directing the respondents to treat the decision of the South Australian State branch executive of 1 August HARRY DAVID KRANTZ 1983 purportedly purging the applicant's, now the appellant's, name from the register of members as void and of no legal effect. According to the notice of appeal, the appellant contends that his Honour erred: 1. in finding that the witness Krantz was a witness of truth; 2. in refraining from making a finding that the respondent Krantz acted in bad faith in relation to the matter concerning the removal of the appellant's name from the register of members of the organization in July and August 1983 in relation to the proceedings which culminated in the removal of the name of the appellant from the register of members. 3. in refraining from finding that: (a) the appellant was denied natural justice in relation to the proceedings which culminated in the removal of the name of the appellant from the register of members; 3. (b) that Krantz was activated by bias against the -appellant and- was activated thereby in relation to such proceedings. 4, That rules 11, 17, 18 and 19 offend the provisions of s.140(1). His Honour found that Mr. Krantz was a witness of truth and was not activated by bad faith or bias against the appellant in relation to the removal of his name from the register. His Honour saw and heard the respondent Krantz and thus was in a position that this court is not in to assess his credibility. I find nothing in the evidence which would incline me to question his Honour's assessment of the credibility of Mr. Krantz. It is said that the two items of evidence which should persuade us that Mr. Krantz' evidence was untruthful were, firstly, that Mr. Krantz stated in evidence that the transcript of the actual finding of Mr. Justice Evatt in matter number 9 of 1982 was not available to him or his executive until some 14 days after 1 August 1983. Secondly, that it was suggested that the circumstances show that the portion of transcript said not to be available must have been available contrary to what Mr. Krantz had said. 4. Reliance was placed on the circumstance that when the original of the letter of 1 August 1983 from Mr. Krantz to the appellant was tendered in evidence in this case by the appellant, it had pinned to it the relevant portion of the transcript. But there is no evidence when that portion of the transcript was first pinned to the letter. The appellant did not say it was appended to the letter when he received it and there is nothing else to suggest that. In the result nothing has been advanced which could possibly persuade me that Mr. Krantz was untruthful in any respect. Qn the contrary the probabilities would point to the likelihood that the assessment of Krantz made by the learned judge asa truthful witness was a sound one. It is said that bad faith appears from a number of factors: (a) Proceedings under r.1l were commenced by the respondent before judgment was given by Mr. Justice Evatt in matter No. 9 of 1982. It is said that this was done to exclude the appellant from properly defending himself under r.11 because the 14 days would expire before the anticipated date when judgment was to be given or might have been given. It is said that during the 14 days it might have been a contempt of court for the respondents or the appellant to (b) (c) canvass, as between each other, the appellant's eligibility for .membership, this being one of .the : issues. before Mr. Justice Evatt in matter No. 9 of 1982. It is said this was a deliberate "ploy" by Mr. Krantz to deprive the appellant of the opportunity to put his case on the question of eligibility when it arose under r.1l. It is further said that the appellant did refrain from putting his case pursuant to the provisions prescribed by r.11 because he considered the exercise might involve a contempt of court. It is also said that the mere fact that Krantz and the executive took steps to remove the appellant from the register before the judgment of Mr. Justice Evatt was given and, in effect, swiftly after the evidence in that case was given, demonstrated mala fides against the appellant on the part of Krantz and the other respondents and that in purging the appellant they acted not because he was ineligible to be a member but because they felt maliciously towards him. 6. Taking this last item first, it may be said it is likely on the evidence that the respondents were troubled by the activities of the appellant in his capacity asa member of the organization and were disposed to purge him from membership if in fact and in law he were not eligible to be a member, and they would feel satisfaction if that were achieved. But that is a long way from establishing that purging him from membership when he was ineligible for membership was a mere exercise in private personal animus. If the appellant was not elagible for membership it was appropriate for the respondents to remove his name from the register of members and to do so forthwith. That they took steps to do this is evidence that they removed his name because it was undesirable that a person not eligible for membership should stand in the position of a member with rights as such in an organization. And it is nonetheless so because various of the respondents might have been very relieved that the appellant was not entitled to be a member, or even to feel satisfied that a person, personally disliked by them, had ceased to be a member. - This is the kind of exercise in which the feelings of union officers have little significance. It was not like a case where a charge of misconduct was laid. It was a plain question of fact that was involved. Where a person is ineligible for membership it is 7. appropriate for those who are well disposed to him to take the necessary action, no less than it is the Pleasure of those ill disposed also to take such action. As to the time factor it is to be observed that the respondents had made clear in matter No. 9 of 1982, that they considered the appellant ineligible for membership. In that action they had heard the evidence of the appellant on the relevant facts. That evidence ultimately induced the learned judge to pronounce that the appellant was ineligible for membership. The respondents formed their own view that the appellant was ineligible for membership and Mr. Krantz pointed out in his letter of 13 July 1983 to the appellant that the executive had taken that evidence into account. Mr. Krantz and the rest of the executive were no doubt encouraged by the evidence to believe that the learned judge would find in their favour on the issue and were entitled to and indeed may well be thought to have been under a duty to act promptly. The fact that he and they did so is not evidence of malice but evidence that in the case of the appellant they did not deisre him to have the privileges of membership if ineligible for membership. So far as there is a suggestion that the appellant refrained from putting his case within 14 days on the ground of tontempt of court, this is just not true. It is clear from his solicitor's letter of 21 July 1983 that he did not intend to respond at any time, whether before or after judgment was given in matter No. 9 of 1982. In short there is no merit in this appeal. In relation to the issue of whether rr.11, 17, 18 and 19 are oppressive and that those rules impose upon applicants for membership of the organization conditions, obligations, or restrictions which, having regard to the object of the Act and the purposes of registration and organization under this Act, are oppressive, unreasonable and unjust. At the hearing before us only r.11 was seriously attacked. The way in which the appellant's case may be most strongly put on this issue is encapsulated in the observation that an executive, acting reasonably and honestly, may wrongly assess the character of the employment of the person, namely the member concerned. In such a case a member might wrongly lose his membership. This is a risk inherent in the rule. Nevertheless it is reasonable that there be a mechanism in the organization by which persons whose eligibility has come to an end may be expunged from the membership roll. Such a mechanism might provide that when in fact eligibility has ceased, the executive may remove his name. It is to be observed that in the operation of the rule there will be no action taken to actually purge the name of the member concerned unless it appears to the executive that eligibility has ceased. In my view that involves that the executive give consideration to the facts before it and any facts brought to its notice by the member and that it shall form a conclusion upon those facts. The rule operates in conditions stated in r.11(d), that the member be given notice of the intention of the executive to remove his name, and in r.ll(e) that the member shall have 14 days to show cause why this should not be done. Whether the rule is oppressive or not within the meaning of s.140 or otherwise offends s.140(1) is to be decided by reference to the objects of the Act and the purposes of registration of the organization under the Act. Relevant considerations are that provisions for keeping the roll in order are reasonable; the criterion for removal is appropriate, namely loss of eligibility; and the rule cannot operate without notice being given to the person concerned and an opportunity being extended to him to bring all relevant considerations to the notice of the executive. The rule requires consideration of all relevant facts. Further, the member is not without a remedy under the rule if an error is made. If an error were made dishonestly or in circumstances in'which the conclusion reached by the executive could not have been properly drawn by a body properly performing its function, there would be a remedy under s.141 of the Act. If it was reached on the evidence honestly but erroneously there would be a 10. remedy under s.144. That is not to say that wrongful purging of the roll would not disadvantage the member in his membership. In deciding in such circumstances whether the rule is to be considered to be oppressive or to impose conditions on members which are oppressive, unreasonable or unjust, the competing requirements of reasonable management of the organization and reasonable entitlements of a member must be taken into account. In view of the fact that the only real disadvantage to a member is that the executive may honestly misjudge the issue, it seems to me that, having regard to the objectives of the Act and the purposes of registration of organizations, r.1l should not be regarded as oppressive, unjust or unreasonable. In the case of a rule providing that the name of a member should be removed if, in fact, his eligibility has ceased, the actual operation of the rule would depend ona decision of the executive. Such a rule would be immune from an attack under s.140(1). The margin of disadvantage to a member between such a rule and one in the terms of r.11is inmy opinion very slight. Accordingly, having regard to all the circumstances, that rule should not be regarded as offending s.140, as being one imposing upon members conditions, obligations or restrictions which, having regard to the object of 11. the Act and the purposes of the registration of the Act are oppressive, unreasonable or unjust. I wouid dismiss the appeal. I am aware Mr. Justice Gray will deliver some observations dealing with the question of natural justice and I am aware what those observations are and I desire to say that I agree with them. If the matter depended entirely on the natural justice and bias aspects of the case, we would seriously have considered Mr. White's application for costs, but having regard to the fact that there was the outstanding question of the validity of r.11(a)(3) in particular, we feel it would be wrong to say in the words of s.197 of the Act, that the proceeding was instituted without reasonable cause, within the meaning of those words in that section. Shun Gin IB] 1o[t IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIA DISTRICT REGISTRY ) S.A. No. 8 of 1983 ) ) INDUSTRIAL DIVISION «+. +3. BETWEEN : MICHAEL ANTHONY PRICHARD ~~ (Appellant) AND : HARRY DAVID KRANTZ & ORS. (Respondents) CORAM : SMITHERS A.C.J., KEELY and GRAY JJ. DATE : 7 SEPTEMBER, 1984 REASONS FOR JUDGMENT KEELY J. I agree that the appeal must be dismissed. In my opinion, the appellant has failed to make out any of the grounds of the appeal. Mr. Justice Northrop in his written reasons for judgment said : "None of the members of the Branch Executive acted mala fide" and, in another passage, ",.. there is no basis and no facts proved to justify a finding of bias 'against the respondent Krantz or against any of the other respondents, members of the Branch Executive.".: 2. In my opinion, nothing has been put before this court to support a contention that either of those findings of fact was not open to the learned trial judge and his Honour was quite entitled to reach those conclusions. As to rule 11(a)(3), in my opinion the words "who appears to be" do not mean "who in the opinion of the Branch Executive is". The words in the sub-rule "who appears to be no longer covered by the Constitution" are not intended to convey the meaning that the matter is concluded and beyond challenge if it be established in the opinion of the Branch Executive. If there is any abuse of the power conferred by the sub-rule it would, of course, .be open to challenge in proceedings in this court under section 141. If rule 11(a)(3) is construed in the way I have suggested, then in my opinion it is not contrary to section 140(1)(a) of the Act, nor is it contrary to section 140(1)(c). I agree generally with the reasons for judgment given by the Acting Chief Judge and, like him, I am aware that Mr. Justice Gray is about to make certain additional observations, and I agree with those additional observations. The appeal should be dismissed. i t ber keey fhe [4 September fey | | ee <a ae "44 IN THE FEDERAL COURT OF AUSTRALTA SOUTH AUSTRALIA DISTRICT REGISTRY S.A. No. 8 of 1983 we INDUSTRIAL DIVISION BETWEEN: MICHAEL ANTHONY PRICHARD t ' Appellant AND: HARRY DAVID KRANTZ & ORS Respondents CORAM: SMITHERS A.C.J., KEELY AND GRAY Jd. | DATE: 7TH SEPTEMBER 1984 EX TEMPORE REASONS FOR JUDGMENT GRAY J. : Iam in general agreement with the judgment which the Acting Chief Judge has delivered on the question of alleged bad faith. I desire to add some comments of my own on that question and to deal with the issue of natural justice. The power given by rule 11(a)(3) of the branch rules of the Federated Clerks Union of Australia, subject to rule lli{d), is given for a purpose, namely the purpose of ridding the organization of members who are no. longer eligible for membership. In the circumstances of this case the power was exercised for that purpose. The fact that its exercise may possibly suit some or all of the members of the executive for other reasons is not enough to vitiate the decision exercising the power. The trial judge expressly found that no malice or bad faith existed. Wei have been asked to draw inferences from certain facts and to overturn his Honour's assessment of Mr. Krantz as a witness, and, accordingly, to overturn those findings. It was argued that the sending of the letter of Mr. Krantz dated 13th July 1983, while the controversy as_ to the membership of Mr. Prichard was before the Court constituted by Evatt J., showed an intention to purge Mr. Prichard, arrespective of the result of the court proceedings. But by 13th July, Mr. Prichard had given evidence before Evatt J., and the branch executive was entitled to take the provisional view which it took under rule 11(a)(3), and to put in train the procedure laid down in rule 11(d), on hearing of such evidence. The action of the executive was consistent with the discovery of the true facts from such evidence. Next it was argued that the timing of the meeting showed bad faith. The decision of Evatt J. was given on Friday, 29th Pa July 1983 and the meeting was held at 9 a.m. on Monday, lst August 1983. Northrop J. accepted the reasons given by Me. Krantz for the haste in calling that meeting. Nothing has been put before us to show that his Honour was wrong in making that finding. The provisional view which had been taken by the branch executive was fortified by the decision of Evatt J. The letter from Mr. Prichard's solicitor, dated 21st July 1984, could properly be taken as an indication that Mr. Prichard placed his faith in the Court; and did not intend to participate in the processes laid down by the rules. In these circumstances, no bad faith was shown by continuing those processes. It was also suggested that Mr. Krantz misled the branch executive by reporting on lst August 1984 that the Court had held that Mr. Prichard was no longer a member of the organization. In fact, Evatt J. had discharged a Rule to Show Cause which sought to compel the respondents to it to treat Mr. Prichard as a member and accept dues from him. His Honour had done so on the express ground that Mr. Prichard was not eligible to be a member. In those circumstances, as a layman's description of the Court's order, Mr. Krantz's report was not inaccurate. In my view, no objection could be taken to calling on Mr. Prichard under rule 11(d) while the proceedings before Evatt J. were part heard. No prejudice to Mr. Prichard could arise from that course. It could safely be assumed that he had put forward his best case to the Court. His evidence, including a et re ee a a eT cross-examination, had been completed. In any event, it was open to My. Prichard to place any further material he desired before the branch executive. The principles of natural justice are concerned with fairness in all of the circumstances. They are applied by way of implication in the rules of an organization. Like any other implication they are subject to the express provisions of the rules. They cannot, ;override those express provisions. If rules of an organization are to be disregarded, they are only to be so by reference tos. 140 of the Conciliation and Arbitration Act 1904, and not by reference to any supervening rules of natural justice. Rule 11(d) of the branch rules lays down a procedure to be followed by the branch executive before purging a member. This procedure involves notice by the executive to the member concerned of the provisional intention to remove his or her name, and specification of the grounds on which such removal may take place. Rule ll(e) gives an opportunity to the member concerned to be heard. It is not contended in this case that the steps required by rule 11 were not carried out in accordance with that rule. The argument for the Appellant is that, notwithstanding compliance with the rule, he was effectively denied an opportunity to be heard because the notice was served on him while the proceedings before Evatt J. were current. SES + eee Me er As I have said, no prejudice to the Appellant arose from the timing of the letter of 13th July 1983. The decision not to be heard was the Appellant's own. Some argument was put that once Evatt J. had announced his decision on 29th July 1983, the branch executive should have taken steps to give the Appellant a further opportunity to be heard. This would have anvolved the adoption of a procedure other than that provided for in rule 1l. Having regard to the letter of 21st July 1983 from the Appellant's solicitor, and to the decision of Evatt J., the action of the executive of ist August 1983 did not constitute a denial of an opportunity to be heard. There was no unfairness to the Appellant in all of the circumstances. Argument was also put on the question of alleged bias on the part of the members of the branch executive, particularly Mr. Krantz. The proper test in a case such as this is whether a real likelihood of bias existed; see the Full Court decision in Cains v. Jenkins (1979) 42 F.L.R. 188. Northrop J. at the trial rejected the allegations of bias. I am unable to say that this conclusion was wrong on the evidence. The Appellant's argument was largely based on the involvement of Mr. Krantz in the litigation before Evatt J., in which the question of Mr. Prichard's entitlement to membership was raised, the timing of events, the alleged misleading by Mr. Krantz of the executive on lst August 1983 and participation by Mr. Krantz in the decision of the executive. Mr. Krantz having heard the evidence of Mr. Prichard in the proceedings before Evatt J., it was proper for him to put that before the branch executive. As I have said previously, there was nothing improper about the timing of events and no misleading of the executive. Ina sense, rule 11 makes the whole branch executive both prosecutor and judge in every case to which it applies, but there are differences between this sort of case and those in which a member is charged with some offence laid down under the rules. Nothing in the evidence discloses any likelihood that Mr. Krantz or any other member of the brancn executive who participated in the decision was invincibly biassed in the sense referred to in Australian Workers Union v. Bowen (No. 2) (1948) 77 C.L.R. 601, and in the Full Court judgment in Cains v. Jenkins, referred to above. It is not to be supposed that, if Evatt J. had reached the opposite conclusion, or if Mr. Prichard had changed his job to one within the eligibility rules of the organization, the executive would have proceeded to the same decision as it did on Ist August 1983. Iam also in agreement with the Acting Chief Judge on the question of rule 11 of the branch rules of the organization. I agree that the appeal should be dismissed. I certify that this and ine(S) FIVE preceding pages are a true copy of the opt a\ Reasons for Judgment herein of his Honour Mr. vustice QQny Associate Dated: lafic f %