ANT CATCHWORDS Industrial law - registered organizations - validity of rules - proper venue for trial - whether rule disenfranchising unfinancial branch on federal council contravenes Act - discovery of documents. Federal Court Rules order 30 rule 6, order 1 rule 4, order 10 rule 1(2)(f) Conciliation and Arbitration Act 1904 5. 140 Geneff_ v. Petersen (1980) 49 F.L.R. 64 Genetf v. Petersen (unreported 27th July 1984) Toohey Jd. HARRY DAVID KRANTZ AND OTHERS v. THE FEDERATED CLERKS' UNION OF AUSTRALIA GRAY J. ZND NOVEMBER 1984 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY '. S.A. No. 13 of 1984 INDUSTRIAL DIVESTON rs. VY rl BETWEEN : HARRY DAVID KRANTZ, FREDERICK EDWARD PRIEST and WILLIAM ALEX SMITH Applicants AND FEDERATED CLERKS' UNION OF AUSTRALIA Respondent JUDGE: GRAY J. DATE: 2ND NOVEMBER 1984 EX TEMPORE REASONS FOR JUDGMENT In this matter, there are before the Court two notices of motion. One of these notices of motion is dated 2nd November 1984 and was filed on. this day, on behalf of the Applicants. It seeks an interim order restraining 'the: Respondent 'from declaring unfinancial the South Australian branch of the Federated Clerks Union of Australia, and::from depriving the national councillors from that branch of the right to attend as councillors and to participate in and vote on any question in the meeting of -2- Wednesday, 7th December 1984, or participate in any letter or telegram vote provided for by rule 17(3) of the rules. Mr. Heywood-Smith,.on behalf of the Applicants, has not pressed his application for the relief sought in that notice of motion. Accordingly, I do not deal further with it. The other notice of motion is filed on behalf of the Respondent. It seeks a number of things. The first order sought is that the proceeding be transferred to Melbourne and be and thereafter remain in the Victoria District Registry of the Court. Under the provisions of order 30 rule 6 of the Federal Court Rules, the trial of a proceeding is required to be at the proper place unless the Court makes an order directing that the trial be fixed at a place other than the proper place. "Proper place" is defined by order 1 rule 4 as being the place at which the proceeding was commenced unless there has been a_ transfer. A transfer of the proper place is possible under order 10 rule 1(2)(£). Plainly, the structure of the Federal Court Rules is such as to require that, in the normal case, a matter be tried where it was commenced. In other words, inmost cases an applicant is given the choice of venue. In this case, the matter was commenced by Rule to Show Cause, which was obtained in Adelaide, and the proper place is, accordingly, Adelaide. The grounds on which..the Respondent seeks. .to change., that ~ proper place, or to have the trial of the matter conducted in Melbourne, are set out in paragraph 4 of the affidavit of Terrence William Sullivan, sworn on 3lst October 1984. The first of these grounds is that it is appropriate - 3- that a challenge under s. 140 of the Conciliation and Arbitration Act 1904 to the validity of the rules of an organization shouid be heard in the city of the organization's registered office. I do not regard that in itself as a sufficient ground for a change of venue. Rather, it is a matter for the applicant to choose the proper place and primarily a matter of the applicant's convenience where any matter is to be heard. This applies, in general, to matters relying on s. 140 of the Conciliation and Arbitration Act. The next ground is that Mr. Sullivan, who is the National Secretary of the Federated Clerks Union of Australia, will be substantially involved in instructing solicitors and counsel during the trial of the matter, and would be unable to perform his normal duties at the registered office of the organization in Melbourne, 1f the matter were tried in Adelaide. Again, I do not regard this as a substantial ground. No doubt, part of the duties of the national secretary or federal secretary of any organization may from time to time be to instruct solicitors and counsel in matters involving s. 140 of the Act. These matters might arise anywhere and be conducted anywhere. It seems to me that an organization, having regard to the statutory framework within which it operates, must be required to make its 'chief executive._officer -available._-in various.: places for the..- conduct of such litigation. The third ground relied on by Mr. Sullivan is that it is anticipated that there will be a need to consult the records of the organization from time to time, as matters arise during the -4- trial, and this can only be done in Melbourne or, in the case of financial and accounting records, in Sydney. As presently advised, I doubt whether there will be a great need to consult documents of the organization from time to time. I have not been satisfied by any material that there will be constant recourse, of the kind contemplated by this ground, to such documents. Accordingly, I reject this as a ground for change of venue. The fourth and last ground relied on by Mr. Sullivan is that, because of the diversity of the allegations made in the Applicants' points of contention, this application has no particular connection with the South Australian branch of the organization. As I have previously said, the question of venue in the first instance is a question for the applicant and primarily to suit the applicant's convenience. Accordingly, the fact that the allegations made are not restricted to matters arising in or connected with South Australia does not provide any ground for a change of venue. I therefore propose to dismiss the application for a change of venue. The second matter raised by the Respondent's notice of motion is dependent upon paragraph 6 of the Rule to Show Cause in this matter, and the matters referred to in paragraphs 19 and 20 of the Applicants' amended points of contention... The Applicants raise the question of the validity of rule 15(4) of the rules of the organization, which is in the following terms: "(4) Any Branch which fails to forward the amount referred to within the time prescribed by this Rule may be declared unfinancial by the National Council and its member or members deprived of the right to attend any meeting of the National Council or vote on any question." Some argument took place directed to the question whether the words "the amount referred to" in this sub-rule comprehend only monies, which are described elsewhere in the rule as sustentation fees, or whether those words also include other monies which from time to time a branch may be obliged to pay to the federal office of the organization. A copy of the ruies was tendered to me by consent of both counsel. Dr. Jessup, on behalf of the Respondent, made the concession, and indeed advanced the argument, that those words must, on the proper construction of the rule, be restricted to the sustentation fees which a branch 1s obliged to pay from time to time to the federal office. I accept that argument and regard it as extremely unlikely that those words could be construed as making reference to anything other than sustentation fees. On this footing, Dr. Jessup relied strongly upon two decisions of Toohey J. relating to the rules of the Clothing and Allied Trades Union. The first of these decisions is Geneff v. Petersen (1980) 49 F.L.R. 64. In that case, his Honour was called upon to decide whether a Rule to Show Cause obtained under s. 140 and s. 141 of the Act should be amended. - His:- Honour accepted submissions that for an amendment to be made, it was necessary that the applicant for it show an arguable case. One of the amendments sought in that case was concerned -~6- with a rule, which provided that a branch of that organization could not be represented on the federal council until all per capita dues and levies imposed had been paid, unless the federal council, for special reasons, granted an exemption or suspension of payment. His Honour held that it was not arguable that that rule was in contravention of s. 140(1)(c) of the Act. At page 67 of the report, his Honour said: "In my view a requirement that a branch be financial does not impose conditions that are oppressive, unreasonable or unjust nor is it contrary to the concept of the control of committees of an organization and its branches by the members. It may be that in a particular case the imposition of a levy is open to challenge but no such case has been presented here. In my view there 1s no substance in the order sought and the application to amend to include it should not be allowed." On a subsequent occasion, the applicant in that case again obtained a Rule to Show Cause with reference to the same rule. The matter was re-argued and judgment was delivered on 27th duly 1984. That judgment is presently unreported. At pages 8 to 10, .his Honour again dealt with the question of the particular rule. After quoting what he had said in the earlier case, his Honour proceeded, at page 9: "Counsel for Mrs. Geneff submitted that rule 16(b) was objectionable because it could operate to deprive a member of the Union, who was financial, from being represented on Federal Council. But that argument overlooks the need of a federal organisation for finante from its constituents. There is nothing oppressive, unreasonable or unjust in a requirement that constituents be financial. Nor is there anything objectionable in a provision that for "special reasons" the Federal Council may grant exemption from that requirement. An exercise of discretion is intended and it is for the benefit of a branch. There may be a complaint about the way in which the discretion is exercised on a particular occasion, but that does not go to the validity of the rule." -7FJ- It should be noted that the rule under consideration in that case was an exclusionary rule, which contained a discretionary power for the federal council of the Clothing and Allied Trades Union to allow a branch to be represented. The rule under consideration in this case is not in that form. It is a rule which, onaits face, assumes a right of a branch to be represented and gives to the federal council a discretionary power to exclude it. It is my view, and it was conceded and asserted by Dr. Jessup, that such a rule would not permit the exclusion of representation of a branch unless the branch was first given an opportunity to be heard on that question by the federal council. On that view, having regard to the two judgments of Toohey J. to which I have referred, it is difficult to see howa rule which gives such a discretion could arguably be regarded as in contravention of s. 140. The matter referred to by Mr. Heywood-Smith in that regard was that the rule gives the discretion to the federal council in circumstances where the branch has failed to forward the amount referred to within the time prescribed by rule 15. Mr. Heywood-Smith points out, quite correctly, that a branch might have failed to pay by the due date, but, nevertheless, have paid during a subsequent time before the relevant meeting of the federal council. In my view, that factor is not sufficient to distinguish the provisions of that rule from the principles referred to in the two judgments of Toohey J. Accordingly, I propose to order that the claim for relief in paragraph 6 of the Rule to Show Cause be dismissed. -86- The third matter raised in the Respondent's notice of motion was a claim that the proceedings be dismissed in relation to the claims referred to in certain paragraphs of the Applicants' amended points of contention. This resulted in Mr. Heywood-Smith applying to me to amend those points of contention and the amendments which have been applied for will, if made, obviate the objections of the Respondent to those paragraphs of the amended points of contention. I propose to allow the amendments which have been sought. The other matter that came before me was the question of discovery of documents. The documents of which discovery was sought were set out in some detail in a letter dated lst October 1984 from the solicitors for the Applicants to the Adelaide solicitors for the Respondent. A copy of that letter was handed up and I propose to initial 1t and retain it on file for record purposes. Some amendments have been made to it to reflect amendments which were sought to the amended points of contention. In some respects the discovery sought goes beyond the allegations which are made in the amended points of contention. Dr. Jessup has argued that in those respects the discovery sought amounts to a fishing expedition. I agree with that proposition and accept that discovery should be confined to the matters which are raised in the amended points of contention. Accordingly, I make the following orders and give the following directions: 5. -9- The application for the relief sought in paragraph (a) of the Applicants' notice of motion dated 2nd November 1984 is dismissed. The application for the relief sought in paragraph (a) of the Respondent's notice of motion dated 31st October 1984 is dismissed. Paragraph 6 of the Rule to Show Cause is discharged. I grant leave to the Applicants to amend further their amended points of contention in the following ways: (a) In paragraph 5(a) thereof by deleting the words "from in or about 1970 until 1982", and substituting the words "in the 10 years up to and including 29th October 1984". (b) By deleting paragraph 5(b). (c) By adding in paragraph 5(c) after the word "during" the words and figures "1983 and/or". (d) By deleting paragraph 8. (e) By deleting the second sentence of paragraph 16 and substituting the following sentence, "The respondent has sought to prevent branches from using branch funds to pay or defray the costs or expenses in matter S.A. No. 1 of 1983 in the Federal Court of Australia Industrial Division of any person who was a respondent therein as a member of the national council of the organization save those costs of and incidental to the engagement of counsel by resolution of the national council". I direct that the Applicants file and deliver to the solicitors for the Respondent further amended points of -~ 10 - contention, in accordance with the leave given, within 14 days of this day. 6. I direct that the Respondent make available to the Applicants and/or the Applicants' legal advisers for inspection and copying the following documents: (a) All documents pertaining to all rule amendments submitted by the South Australian branch in the 10 years up to and including 29th October 1984, the Central and Southern Gueensland branch during 1983 and/or 1984, and the Taxation Officers Branch during 1984, including all correspondence between a branch and the organization in respect of any such rule amendments and any minutes of the federal executive dealing with the same. {b) All documents pertaining to any direction by the organization to any branch that such branch forward monies to the federal executive with respect to: (i) The cost of employment of former organizers and industrial officers of the Central and Southern Queensland branch from the date of their dismissal in or about February 1983 until this day; (ii) The cost to the organization of legal representation 1n matters numbers 1, 3, 4, 15 and 17 of 1981 in the Federal Court of Australia, South Australia District Registry, including any correspondence with the South Australian branch in respect of payment of such legal expenses; -l1l- (iii) Contribution by branches to an overseas fund of the organization used to pay the cost of overseas travel members. (c) Returns for 1984 year by each branch detailing numbers of membership units used to calculate their sustentation fees. I further direct that such documents be made available for inspection and copying at the registered office of the organization in Melbourne during the week beginning 26th November 1984 at a time or times convenient to the parties. 7. %I reserve liberty to any party to apply. 8. I adjourn the matter until 10th December 1984 at Adelaide for trial. Set amis and te to (cers) | yey Fy on ea true copy of te | nad | t | i Wot! Wo} acni herein of his FE} . ae oy eB Se - On dss,