AL JUDGMENT No. wf.6%.u/ WEE IN. THE FEDERAL COURT OF AUSTRALIA ) No.S.A. 1 of 1981 SOUTH, AUSTRALIAN DISTRICT REGISTRY) No.S.A. 3 of 1981 ) No.S.A. 4 of 1981 No.S.A.17 of 1981 No.S.A. 4 of 1983 No.S.A. 1 of 1981 No.S.A. 3 of 1981 No.S.A. 4 of 1981 No.S.A.17 of 1981 IN THE MATTER of the Conciliation and Arbitration Act 1904-1980 HETWEEN: MAUREEN FAYE. H1LEBERT, MICHAEL Applicants ANI: FEDERATED CLEKKS UNION OF AUSTRALIA, HARRY, WAVID KRANTZ, HASELUINE, ALBERT FELLOWS, PETER DAVID. SUMMERTON,. FREDERICK, ENWARU O/SULLIVAN,. J. RIORDAN, W.T. THORNION, M. BRIAN TOOLEY, KEVIN DESMOND CLARKE Respondents AND: No.S.A. 4 of 1983 BETWEEN: JAMES LESLIE HAILEY Applicants AND: FEDERATED CLERKS UNION OF LESLIE. RICHARD HASELDINE, PETER DAVID SUMMERTON, JOHN COSMOS Respondents ORUER JUDGE MAKING ORDER: Evatt J. DATE. OF ORDER: 19 December, 1984 WHERE MADE: Adelaide 1. The adoption by the branch council of the South Australian Branch of the Federated Clerks Union of Australia of each such rule or rule amendment as the case may be as set out im the foregoing determination be validated. 2s In matter No.S.A. 1 of 1981 the order nisi be discharged. In matter No.S.A. 3 of 1981 the order misi be discharged. In matter No.S.A. 4 of 1981 the order mis1 granted be discharged other than the order misi in respect of rule 15 and that matter be stood over sine die to be restored on seven days' notice by any party. In matter No.S.A.17 of 1981 the order misi be discharged. In Matter No.S.A.«4 of 1983 the application be dismissed. IN_THE FEDERAL COURT OF AUSTRALIA ) SOUTH AUSTRALIAN DISTRICT REGISTRY) No.S.A.17 of 1981 and INDUSTRIAL DIVISION ) No.S.A. 4 of 1983 No_S.A.17 of 1981 IN_THE MATTER of the Conciliation and Arbitration Act 1904-1980 BETWEEN : MAUREEN FAYE HIBBERT, MICHAEL JAMES KNIGHT and MICHAEL ANTHONY PRICHARD, ALEXANDA MILNE ROBERTSON, FREDERICK WILLIAM HIGGINS and JAMES LESLIE BAILEY Applicants FEDERATED CLERKS UNION OF AUSTRALIA, HARRY DAVID KRANTZ, JOHN KOSMOS LESSES, GEERT LOUIS VIERGEVER, LESLIE RICHARD HASELDINE, ALBERT FELLOWS, PETER DAVID SUMMERTON, FREDERICK EDWARD PRIEST, REGINALD JOHN RICH WILLIAM GEORGE TURLEY, JOHN MILTON LE-RAY, WILLIAM A. SMITH, M. CRAWFORD, BRIAN McBRIDE, PHILLIP SCHUSTER, RODNEY FELMINGHAM, H.J. DARROCH, F. NEENAN, N. NELSON, M.J. O'SULLIVAN, J. RIORDAN, W.T. THORNTON, M. BRIAN TOOLEY, KEVIN BIANCHI, MICHAEL BOURKE, LEONARD DOBBY, C.J. STOCKS, G.D. SWORDS J.D, SMITH, F.J. FINLAY, J.F. HARDING, M,STRANGEWARD, B. SPEARS, P. O'TOOLE, D. FRY, D. EDGE, A.M. LAWLESS, VINCE ABEL, ROBERT J. WASSON, TERRY W. SULLIVAN, JOHN P, MAYNES, J.D. CAMERON, KEN J. BENNETT and RALPH DESMOND CLARKE Respondents AND: No.S.A. 4 of 1983 BETWEEN : MICHAEL ANTHONY PRICHARD, FREDERICK WILLIAM HIGGINS and JAMES LESLIE BAILEY Applicants AND: FEDERATED CLERKS UNION OF AUSTRALIA, HARRY DAVID KRANTZ, LESLIE RICHARD HASELDINE, PETER DAVID SUMMERTON, JOHN COSMOS LESSES and ALBERT FELLOWS Respondents CORAM Evatt J. 30 November 1984 REASONS FOR JUDGMENT The Federated Clerks' Union of Australia (the federal Organization) is and has been for many years an organization of employees registered under the Conciliation and Arbitration Act 1904 (the Act). The federal Organization has several branches within the various states of Australia including South Australia. Since the beginning of 1981 there have been several actions commenced out of the South Australian Registry of the Federal Court by a group of members of the federal Organization attached to the South Australian Branch (the Branch. ) Included in such group was one Michael Anthony Prichard who was up and until August 1983 a member of the federal Organization attached to the Branch. It is clear that Mr Prichard was the dominant applicant in the various matters brought by the said group of applicants. For many years prior to 1981 several of the officers of both the federal Organization and of the Branch had been officers duly elected in accordance with the rules of the Organization and of that Branch of the federal Organization. Indeed, Mr Harry Krantz, the Secretary of the Branch, had been elected to that office in the mid 1940's and had held that office for almost forty years until his recent retirement. Other Branch officials had also held various official positions within the Branch over many years. For many years prior to 1981 there was registered under the South Australian Industrial Conciliation and Arbitration Act a trade union whose registered name was the "Federated Clerks' Union of Australia South Australian Branch." It would appear that each of the officials of that trade union also held the same office in the Branch of the federal Organization and that over the years prior to 1981 one election for the filling of, for example, the office of Secretary of the Federated Clerks' Union South Australian Branch, would be held. Further, it would appear that over the years prior to 1981 meetings of the Branch Council, the governing body of the Federated Clerks' Union of Australia South Australian Branch, were held without any clear indication in the minutes of such meetings as to whether a particular meeting was a meeting of the registered state trade union or the Branch of the federal Organization. The applicants were at the time of the commencement of the two subject Matters members of the federal Organization whilst the personal respondents were either officials of the federal organization or officials of the Branch. In 1978 Mr Prichard commenced employment with the Branch as a full time organizor, the rules at that time making no provision that such an organizor be elected. In or about September, 1980, Mr Prichard's services as such organizor were dispensed with by the Branch. It is clear that at or shortly after this time he became aware that certain federal Branch rule amendments which had been adopted by the rule-making body (the Branch Council) of the Branch in 1975 had not in fact been certified by the Federal Industrial Registrar pursuant to s 139 of the Act with the consequence that such amendments had not become effective (s.139(4)). In fact the amendments having been adopted had been forwarded by the Secretary of the Branch, both to the Industrial Registrar of the South Australian Industrial Commission for registration pursuant to the South Australian Industrial Conciliation and Arbitration Act and to the Secretary of the federal Organization for approval by the federal Executive in accordance with federal r. 12(2) prior to them being lodged with the Federal Industrial Registrar for certification under s 139 of the Act. Following such delivery of the said amendments to the State Industrial Registrar, those amendments were registered under the South Australian Industrial Conciliation and Arbitration Act and consequently became part of the registered rules of the South Australian trade union. But the amendments forwarded to the federal Executive for approval prior to lodging for certification by the Federal Industrial Registrar had not received such approval prior to January 1981 and consequently had never been lodged for certification in accordance with s 139(4) of the Act with the result that such amendments did not become effective rules of the Branch of the federal Organization. Apparently it was and had been the practice of the Branch to have printed a set of rules of "The Federated Clerks Union of Australia, South Australian Branch" which made no reference as to whether the rules were those of the Branch of the federal Organization or were the rules of the State registered trade union of the same name. In fact, following this practice (after the 1975 amendments had been registered by the State Industrial Registrar,) a new rule book was printed including the amendments so that for some years prior to 1981 there was in circulation and use within the Branch a printed set of rules incorporating the amendments which had been adopted by the rule-making body of the Branch in 1975. As stated above, this anomaly was known to Mr Prichard some time before January 1981. At that time the certified federal Branch rules provided that nominations for the filling of the offices of the officials of the Branch other than the Secretary and Assistant Secretary were due to close during the third week in January. In fact, the rule book as printed by the Branch indicated that the nominations for such offices closed in the third week of February, this later date being the month provided for in an amendment adopted by the rule-making body in 1975. Mr Prichard and certain of the applicants in the various matters referred to above nominated for particular offices in the Branch of the federal Organization on the day in January 1981 when, according to the then certified federal Branch rules such nominations closed, and lodged those nominations with the person who had been the Returning Officer in an earlier election. The fact that such nominations had been lodged brought to the attention of the Branch that the certified federal Branch rules were not in accord with the rules as - get out in the printed rule book for use within the Branch. As a consequence certain of the rule amendments which had been adopted in 1975 and then forwarded to the federal Executive of the Organization for approval were immediately lodged with the Federal Industrial Registrar and received certification on 23 January 1981. The rules amendments then so certified were not the totality of the rule amendments which had been adopted by the Branch Council in 1975. The balance of those amendments were in fact certified by the Federal Industrial Registrar on 30 September 1981. Commencing on 13 February 1981 and throughout that year Mr Prichard and certain of the other applicants in subject matter S.A.No. 17 of 1981 commenced various actions under the Act against the federal officials and the Branch officials. It is unnecessary to detail each action but the applicants had been granted Orders Nisi in matters S.A.No. 1 of 1981, 8.A.No. 3 of 1981 and S.A.No. 4 of 1981 challenging the constitutions of the Branch Council and Branch Executive and the validity of certain Branch rules. In addition, certain of those applicants had lodged an application under Part IX of the Act (S8.A.No.15 of 1981) in respect of elections held for the filling of the offices of the Branch, (other than that of Secretary and Assistant Secretary), which elections were completed on 31 March 1981. The Court commenced hearing matters S.A.Nos. 1, 3 and 4 of 1981 throughout the first half of 1981. Thereafter when the application under Part IX of the Act in respect of the said election was referred to the Court in July 1981 it was determined that the Orders Nisi which had been granted pursuant to ss 140 and 141 of the Act in matters S.A.Nos. 1, 3 and 4 of 1981 should be stood over until a determination of the application for the inquiry into the said election as certain of the allegations in those three matters were raised as issues in the said inquiry. The subject matter S.A.No.17 of 1981 commenced on 21 October 1981 with the granting of an order nisi to the applicants therein. In this matter the applicants challenged the validity of the Branch rules which had been certified by the Federal Industrial Registrar on 23 January 1981 and 30 September 1981. In the main, these rules had been adopted by the 1975 Council and approved by the federal Executive either in January or February of 1981. In addition, certain other amendments had been adopted by the Branch council in April 1981. The hearing of this matter was also stood over pending the determination of the Part IX inquiry. After lengthy evidence and detailed argument in that inquiry a determination in the election dispute was made on 28 June 1983. The background history to the various matters in dispute between the parties within the Branch are set out in more detail in the reasons for judgment in that inquiry and such reasons should be read as being incorporated in the present reasons for judgment. Very early in the hearing of matters S.A.Nos. 1, 3 and 4 of 1981 (which were being heard together) it was clear to the Court that there was a serious question as to whether the Council of the Branch since at least 1973 had been validly constituted. This query arose (inter alia) in the following circumstances. The membership of the Branch belonged to various nominated Sections. The Branch Council, the governing body of the Branch, was constituted by the officers of the Branch and Councillors from the various Sections. The problem was whether the rules of the Branch made provision for valid elections of the Section Councillors and if so whether such Councillors during relevant periods had been validly elected. Accordingly, the Court early in 1981 indicated to the parties (including the federal Organization which appeared in the various proceedings) that it was of the view that the situation "cried out" for a scheme pursuant to 8 171D of the Act being approved by the Court so that any - 10 - query as to the validity of the constitution of the Branch Council and its Executive and of the acts done by the Branch Council or Executive or by persons holding or purporting to hold office within the Branch might be overcome. The applicants through their counsel then indicated that they would not be seeking orders for any such scheme. It was not until many months later when he was giving evidence and was asked by the Court why he opposed the adoption of a scheme that Mr Prichard stated that it was his belief that federal yr. 12(5) prevented the Court from exercising jurisdiction under s 171D. This rule is set out:- "12. BRANCHES (5) Where a Branch is unable to validly make rescind alter or addto its Rules by reason of its not having a validly elected appointed or constituted person or body of persons (by whatever name called) empowered to make rescind alter or add toits Rules, then the Federal Executive or Federal Council may make rescind alter or add to the Rules of such Branch for the purpose of enabling the Branch to have Rules:- (a) For its own internal management; (b) To comply with these Rules; {c) To comply with the requirements of the Commonwealth Conciliation and Arbitration Act and the Regulations made thereunder ; (d) To enable it generally to function as a Branch of the organization; AND in so doing the Federal Executive or Federal Council may provide in any such Rules made by it as aforesaid for the mode in which the objects referred to in Clauses (a),(b),(c) and (d) hereof may - ll - be effectuated, provided that any Rule so made by the Federal Council shall not be inconsistent with these Rules or the Commonwealth Conciliation and Arbitration Act and Regulations made thereunder, and shall not prevent a validly elected appointed or constituted person or body of persons (by whatever name called) thereafter altering in accordance with the rules of the organization and of such Branch, any rules 80 made for it by the Federal Executive or the Federal Council." In fact, in the latter half of 1981 at the request of the officials of the Branch the federal Executive in the exercise of its powers under federal r. 12(5) amended Branch r. 21(d) to make provision for elections in accordance with the provisions of the Act of section councillors and inserted a new Branch r. 21A. These two amendments were certified by the Federal Industrial Registrar pursuant to s 139(4) on 3 December 1981. New r. 21A reads:- "(1) Subject to sub rule (2) hereof those persons who at the date of the certification of this rule are acting as Councillors elected by Sections pursuant to Rule 15 hereof shall be Councillors notwithstanding any alleged invalidity in their election and shall be and may act as Councillors until the election of Councillors pursuant to sub clause (d) (vi) of rule 21. The term "Councillors" in this rule includes "Alternate Councillors." -12- (2) By the 31st March, 1982 or within one month of the certification of this rule, whichever is the later, (hereinafter called the due date), nominations shall be called for an election of Councillors in each Section which has not in the ordinary course between the date of certification of this rule and the due date held such election. In such case the Returning Officer shall declare the result to the Secretary and advise the Section Committee and the persons elected shall take office forthwith in lieu of at the Annual General Meeting of the Section as required by Rule 21(d)(ix) and shall hold office until the Annual General Meeting of the Section held in 1983 notwithstanding that the term is or may be greater than that provided by Rule 32(b)." Immediately following the certification of these two amendments, purported elections of Branch Councillors were held and thereafter on19 January 1982 the Branch Council resolved to "ratify" the several rule amendments adopted by the Council in 1975 and November 1980 by giving "full validity and effect" to the earlier resolutions. The applicants claimed that the January 1982 resolutions were void and of no effect as the purported rule amendments then made were contrary to the provisions of Branch r. 41, the rule-amending rule. Additionally, they challenged the validity of Branch rr. 21({d) and 21A claiming that those rule amendments, which had been made by the federal Executive pursuant to federal r. 12(5), were beyond power. Further, they challenged the validity of the January 1982 Branch Council. - 13 - Thereafter during 1982 the Court continued to hear the Part IX inquiry. On 22 August 1983 subsequent to the Court's determination in the Part IX disputed election inquiry, one Frederick Edward Priest, one of the personal respondents in the various matters, through the office of the solicitors who had appeared for the various respondents attached to the Branch, filed a Notice of Motion in matter S.A.No.17 of 1981 being, in effect, an application under s 171C of the Act seeking a declaration that an invalidity had occurred in the making of the 1975 rule amendments together with certain amendments adopted in April 1981 and seeking orders validating the various Branch rules which had been certified by the Federal Industrial Registrar on 23 January 1981 and 30 September 1981 as stated earlier herein. These are set out in the said Motion as being Branch rr. 3, 8, 15, 16, 16A, 21, 24, 25, 30, 31, 32, 38, 41 and 44A. Meanwhile, on 28 July 1983 Mr Prichard and two of the other applicants in the various matters, namely, Mr Higgins and Mr Bailey, had filed an application in matter 8.A.No.4 of 1983 seeking a declaration that the Branch had ceased to function effectively and that there were no effective means under the rules of the federal Organization or the Branch by which it could be reconstituted or enabled to function effectively and seeking an order approving a - 14 - scheme for the taking of action set out in a proposed scheme to enable it to so function. The relevant parts of ss 171C and 171D are set out:- "171C(1) An organization, a member of an organization or any person having a sufficient interest in respect of an organization may apply to the Court for a determination of the question whether an invalidity has occurred in the management or administration of the organization or of a branch of the organization or in an election or appointment in, or the making or alteration of the rules of, the organization or &@ branch of the organization and the Court has jurisdiction to hear and determine the application and to make = such declaration as it thinks proper. (2) Where, in proceedings under sub-section (1), the Court finds that an invalidity of the kind referred to in that sub-section has occurred, the Court: (a) may make such order as it thinks fit to rectify or cause to be rectified the invalidity, or to negative, modify or cause to be modified the consequences in law of the invalidity, or to validate any act, matter or thing rendered invalid by or as a result of the invalidity; (b) shall, before making such order, satisfy itself that such an order would not do substantial injustice to the organization or to any member or creditor of the organization or to any person having dealings with the organization; (c) where any such order is made, may give such ancillary or consequential directions as it thinks fit; and 171D(1) (2) - 15 - (d) may determine what notice, summons or rule to show cause is to be given to other persons of the intention to make such an order, and whether and how i1t should be given or served and whether it should be advertised in any newspaper. An organization, a member of an organization or any person having a sufficient interest in respect of an organization may apply to the Court for a declaration that: (a) a part of the organization, including:- (i) a branch or part of a branch of the organization, or (iida collective body of the organization or of a branch of the organization, has ceased to exist or to function effectively and there are no effective means under the rules of the organization or branch by which it can be reconstituted or enabled to function effectively; or (b) an office or position in the organization or in a branch of the organization 18 vacant and there are no effective means under the rules of the organization or branch to fill the office or position, and the Court has jurisdiction to hear and determine the application and to make a declaration accordingly. Where the Court makes a declaration under sub-section (1), the Court may, by order, approve a scheme for the taking of action by a collective body of the organization or of a branch of the organization or by an officer or officers of the organization or of a branch of the organization for the - 16 - reconstitution of the branch or part of the branch, or of the collective body, or to enable it to function effectively, or for the filling of the office or position. (3) Before making an order under this section the Court shall satisfy itself that the order would not do substantial injustice to the organization or to any member of the organization. (4) woeeee (5) ..eeee (6) ..0.e, (7) weeeee" The applications under ss 171C and 171D coming on for hearing before the Court as presently constituted it was determined that the two matters should be heard together. After hearing evidence and lengthy argument as to the proper course to be adopted, the Court reserved its decisions. During argument early in the hearing of these two matters it was submitted by Dr Jessup, Counsel for the federal Organization, that the federal Organization was not then in favour of the Court making orders under s 171C in view of the provisions of certified Branch rr. 15 and 21(d) (vi). - 17 - Branch r. 15 made provision for the number of councillors from the various Sections within the Branch. As stated earlier herein the Branch consisted of nine Sections covering different industries. The federal Organization was of the view that the formula provided for in r. 15 under which the number of councillors from the various sections was calculated was such that an imbalance resulted in respect of the ratio between the number of members attached to each section and the number of councillors representing each section, (cf McLeish v. Kane (1978) 22 ALR 547). Dr Jessup's complaint concerning Branch r. 21(d)(vi) was that the rule could permit unsynchronized elections of Branch Councillors within the various Sections of the Branch which could possibly bring about unfair advantages to particular members. Dr Jessup had put the above submissions at a time when it was known that the Court. would have to adjourn for some weeks owing to its other commitments. On resumption after such adjournment, the Court was informed by Dr Jessup that discussions had taken place between officials of the federal Organization and officials of the Branch resulting in undertakings being given by the Branch officials that amendments to rr. 15 and 21(d)(vi) would be adopted by the Branch in accordance with the wishes of the members of the federal Executive, who, in accordance with federal r. 12(2) had to approve such amendments before the same could be - 18 - lodged for certification by the Federal Industrial Registrar pursuant to s 139(4). As a consequence the federal Organization through its counsel then indicated to the Court that it could see no objection to the Court making proper orders under s 171C and that consequently a scheme pursuant to s 171D would be unnecessary. After a full examination of all matters presented to the Court by the parties, it is determined that an invalidity has occurred in the making or alteration of the rules of the Branch of the Organization, namely, that the Branch Councils which adopted the rule amendments the subject of the s 171C application by Mr Priest were invalidly constituted in that certain purported members of those Councils had not been validly elected thereto. Further, the Court has made a full examination of the facts leading up to such invalidity and of the facts subsequent to the adoption of the said amendments. As stated, the Court has had the advantage of hearing counsel representing the applicants other than Mr Prichard in matter S.A.No. 17 of 1981 and Mr Prichard (who, when the two subject matters were argued appeared in person); Dr Jessup who appeared on behalf of the federal Organization and Mr Heywood-Smith who appeared for Mr Priest and the other officials of the Branch who had been named as respondents in the two matters. - 21 - accordance with the undertakings referred to earlier herein and if so whether there is any doubt as to the validity of the then constitution of the Branch Council which adopted such amendments. .- .--_._--. Further, on such adjourned date, the Court will hear submissions, if any, as to the final disposition of the part-heard matters, S.A.Nos. 1, 3 and 4 and 17 of 1981. When formal orders are made under s 171C in accordance with the above, the Court proposes to dismiss the application made under s 171D (S.A.No. 4 of 1983). I certify that this and the 4uerty preceding pages are a tru copy of the Reasons for Judgment herein of his Honour Mr Justice Evatt. ; é Associate Dated 30 November 1984