\> ra CATCHWORDS INDUSTRIAL LAW - Validating provisions - Registered organization - Validity of proceedings at meeting of Federal Conference of orqanization - Whether branch "unfinancial" - Whether delegates entitled to participate in any ballot or vote at the meeting - Duties of Federal Secretary - Meaning of rules. Conciliation and Arbitration Act 1904, s.171C DESMOND _HEANEY v. W.A. GREIG and ASSOCIATION OF DRAUGHTING, SUPERVISORY AND TECHNICAL EMPLOYEES No. ACT 12 of 1984 CORAM: Neaves J. 1 February 1985 Canberra IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY ) ) ) ) No. ACT 12 of 1984 ) ) ) INDUSTRIAL DIVISION IN THE MATTER of an application made pursuant to section 171C of the Conciliation and Arbitration Act 1904 BETWEEN : DESMOND HEANEY Applicant AND: W.A. GREIG First Respondent - and - ASSOCIATION OF DRAUGHTING, SUPERVISORY AND TECHNICAL EMPLOYEES Second Respondent CORAM: Neaves J. DATE: 1 February 1985 REASONS FOR JUDGMENT Desmond Heaney ("the applicant") is a member of the Association of Draughting, Supervisory and Technical Employees ("the Association") which 1s an organization of employees reqistered under the Conciliation and Arbitration Act 1904 ("the Act"). The applicant has applied to the Court pursuant to section 171C of the Act for the determination of the question whether an invalidity occurred in the management or administration of the Association or in an election for office bearers within the Association. In the event that such an invalidity is found to exist, the Court is asked to make an order rectifying the invalidity or validating the acts, matters or things rendered invalid by or as a result of the invalidity. The respondents to the application are the Association and the Federal Secretary thereof. The invalidity is said to have occurred at the meeting of the Federal Conference of the Association held from 2 to 6 May 1983 and to have tainted the elections conducted at that meeting for the positions of Federal President, Federal Vice-Presidents and delegates to the Federal Executive from the branches and some or all of the resolutions carried at that meeting, being elections and resolutions in or upon which the delegates representing the South Australia Branch of the Association, or one or more of such delegates, voted. The basis of this assertion is that, by virtue of the provisions of sub-rule 58(b) of the rules of the Association, the South Australia Branch was deemed to be unfinancial and the delegates representing that branch were not entitled to participate in any ballot or vote in the absence of a considered decision of the Federal Conference that they might do so. It is necessary to refer to certain of the rules of the Association. In doing go I shall refer to the rules in the form in which they stood immediately prior to the meeting of the Federal Conference at which the invalidity 1s said to have occurred. The Association is governed in accordance with its rules by a Federal Conference, a Federal Executive and a Federal Executive Committee (rule 16). The officers of the Association are the Federal President, two Federal Vice-Presidents, the Federal Secretary and the Federal Assistant Secretary (rule 17). The Association has') eight branches including the South Australia Branch (rule 43). The Federal Conference 18, subject to control by the members of the Association in plebiscite, the supreme governing body of the Association and has the management and control of the affairs of the Association (rule 19). Rule 18 provides - "The Federal Conference of the Association shall consist of - (a) delegates from Branches on the basis of one delegate for each 7% or part thereof of the total membership of the Association as at the 3ist December of the year immediately preceding the election of such delegates in respect of which the Branch has paid or 1s liable to pay capitation fees in accordance with these Rules, and, (b) the Federal Secretary and the Federal Assistant Secretary." Branch delegates to the Federal Conference are elected by the branch (rules 44 and 49). The Federal Secretary and the Federal Assistant Secretary are elected by a secret ballot of all members of the Association and each holds office for @ period of four years or until a successor has been elected and takes office (sub-rule 26(a)(i)). The Federal Conference meets annually (sub-rule 20(a)), the rules also making provision for the holding of special meetings (sub-rule 20(b)). The Federal Executive consists of the Federal President, the Federal Vice-Presidents and one delegate to Federal Conference from each branch not so represented and the Federal Secretary and the Federal Assistant Secretary (sub-rule 21(a)). The Federal President, the Federal Vice-Presidents and the delegates to the Federal Executive from the branches are elected by secret ballot by the members of the Federal Conference and hold office for one year or until a successor has been elected and takes office (sub-rule 26(a)(ii)). Rule 58 deals with capitation fees. It provides - ""(a) In each financial year, each Branch shall remit to the Federal Executive an amount of 32% of the annual subscriptions of each member (other than student or life members or members exempted from payment of subscriptions) of that Branch calculated on the basis of its members at the end of the previous financial year. Such amount shall be payable in four equal instalments, each of which shall become due and payable on the first day of each quarter. (b) Any Branch which has failed to remit an instalment or any part thereof within the month in which the quarter commences shall be and be deemed to be unfinancial and, if the Federal Conference so decides. the delegates representing such Branch on the Federal Conference shall not be entitled to participate in any ballot thereof or vote at any meeting thereof until such instalment 1s paid. {c) Payment of capitation fees shall be a first charge on the funds and property of a Branch." The expressions "financial year" and "quarter" are defined in rule 73. "Financial year" 1s defined to be the period from 1 January to 31 December inclusive. "Quarter" means those periods of the financial year which commence on 1 January, 1 April, 1 July and 1 October. Rule 71 is a saving provision. It provides - "Subject to the Act, should any Officer of the Association or a Branch thereof or any member of the Federal Conference, Federal Executive, or a Branch Council be illegally elected, or elected otherwise than in accordance with these Rules, any business transacted by such Officer or member or by the Federal Conference, Federal Executive, Federal Executive Committee, Branch Council or Branch Executive of which he is a member shall not thereby be invalidated and the legality of such transaction shall not be questioned, provided that both the election and the business transacted have been conducted in good faith by all persons concerned in the conduct of the same. For the purpose of this Rule, good faith shall be presumed unless and until the contrary is proved." At the request of the parties I heard submissions on preliminary questions of law as to the proper construction of certain of the rules of the Association, the parties being agreed that the determination of those questions might resolve the matter in dispute and make an examination of the factual issues unnecessary with a consequent saving in time and expense. For the purpose of considering those preliminary questions of law I _ shall assume, without deciding, that the South Australia Branch of the Association had failed during April 1983 to remit to the Federal Executive the instalment of the amount payable by it in accordance with sub-rule 58(a) which fell due on 1 April 1983 and that payment of that instalment had not been made prior to the conclusion on 6 May 1983 of the meeting of the Federal Conference. I shall also assume, as appears to be common ground between the parties, that the Federal Conference did not address the question whether the South Australian Branch was or was deemed to be unfinancial by virtue of the operation of sub-rule 58(b) and made no decision whether the delegates representing that branch were or were not entitled to participate in any ballot or vote at the meeting. 7. The applicant contends that, on those assumed facts, the delegates representing the South Australia Branch were not entitled to participate in any ballot or vote at the meeting. For the respondents 1t is said that the assumed facts disclose no invalidity within the meaning of that expression in section 171C of the Act. Counsel for the applicant conceded that the language of sub-rule 58(b) is consistent with the view that, unless and until the Federal Conference takes a decision to the contrary, delegates representing an "unfinancial" branch are not disqualified from participating in a ballot or voting at a meeting of the Federal Conference. It was submitted, however, that on its true construction the sub-rule had a different operation. Counsel pointed to the absence from the rules of any provisions expressly establishing a mechanism to ensure that a meeting of the Federal Conference had placed before it factual information as to the compliance or otherwise by each constituent branch with the requirements of rule 58 so that, in relation to any branch seen to be "unfinancial", a decision could be taken whether the delegates representing that branch were to be disqualified from participating in a ballot or voting at the meeting. In the absence of such provisions, so the argument ran, it was impossible to suppose that the draftsman of sub-rule 58(b) intended that disqualification of the delegates should occur only upon a decision of the Federal Conference and not upon the objective fact of non-compliance with the requirements of rule 58. For, 1t was said, so to construe the sub-rule would, in the absence of the machinery provisions referred to, mean that' the sub-rule could have no effective operation. In support of the construction of sub-rule 58{(b) for which the applicant contends it was submitted that the evident purpose of the sub-rule is to provide an incentive for the branches to comply with rule 58 and make timely remissions of funds to the Federal Executive. It was suggested that that incentive would be the greater if the delegates representing a branch which failed to comply with rule 58 were disqualified from participating in a ballot or voting at a meeting of the Federal Conference in the absence of a decision of the Federal Conference relieving them from such disqualification. Indeed, 1t was suggested that to construe sub-rule 58(b) in the manner contended for by the respondents was to provide no incentive for the branches to comply with rule 58. In my opinion the construction of sub-rule 58(b) for which the applicant contends is not open upon the plain words of the sub-rule. To give the sub-rule the operation for which the applicant contends would, in my view, require the word "if" in the phrase "if the Federal Conference s0 decides" to be read as being equivalent to the word "unless". In my opinion there 1s no warrant for doing so Particularly as to do so would qive the _ sub-rule a materially different meaning and effect from that which the words chosen by the draftsman achieve. In my view disqualification from participating in a ballot or voting at a meeting of the Federal Conference arises not from the objective fact that a branch has failed to comply with the requirements of rule 58 but froma decision of the Federal Conference consequent upon that objective fact coming to its attention and a decision being taken, no doubt after a consideration of the circumstances in which the non-compliance came about, that the delegates representing that "unfinancial" branch should be so disqualified. It was at one point in the arqument tentatively suggested that some light might be thrown on the true meaning and effect of sub-rule 58(b) by having regard to the history of the rules and to the custom or practice adopted by the Association and particularly the Federal Conference thereof in applying the provisions of the sub-rule. No evidence was, however, adduced as to the history of the rules or as to any alleged custom or practice and the suggestion was not pressed. I need say no more about it. 10. An alternative argument was put on behalf of the applicant, an argument which proceeded on the basis that sub-rule 58(b) has the meaning which I have held that it bears. According to this argument, the invalidity within the meaning of section 171C of the Act 1s to be found in a failure by the Federal Secretary to comply with the obligation which according to the argument the rules of the Association imposed upon him to place before the meeting of the Federal Conference factual material concerning the compliance or non-compliance by the South Australia Branch with the requirements of rule 58. That obligation, it was conceded, was not to be found expressly stated in the rules but was to be implied from the provisions of rule 29 which prescribes the duties of the Federal Secretary. Attention was directed to paragraphs (b), (¢h), (i), (n) and (t) of that rule. Those paragraphs provide that the Federal Secretary is to - "(b) call and attend, unless excused, all meetings of the Federal Conference, Federal Executive and Federal Executive Committee and keep or cause to be kept the Minutes of all such meetings; (h) prepare and submit to each meeting of Federal Executive, and to the meetings of the Federal Executive Committee in the months when Federal Executive does not meet, an up-to-date financial statement and when called upon so to do by the Federal Executive or Federal Executive Committee produce all relevant books in support of the same; 11. (1) prepare Balance Sheets and Statements of Accounts for submission to the Federal Conference and the Federal Executive; {(n) keep an account of the per capita payments made by Branches of the Association; (t) carry out such other duties as the Federal Conference or Federal Executive may from time to time assign to him or as may be conferred upon him by these Rules or as may be required by the Act." The consequence of the Federal Secretary having failed to fulfil that implied obligation was, so it was submitted, that the Federal Conference did not properly consider the question arising under sub-rule 58(b) in relation to the delegates representing the South Australian Branch so that those delegates were permitted to participate in a ballot and vote at the meeting when they might have been disqualified by decision of the Federal Conference from doing so. In my opinion there is no substance in this alternative argument. Rule 29 sets out what are the duties of the Federal Secretary. The language of the rule is not apt to impose on the Federal Secretary a duty in terms of that for which the applicant contends. There 1s no doubt that the Federal Secretary would be bound to provide a meeting of the Federal Conference with such information as 12. it desired as to compliance or otherwise by the constituent branches with the provisions of rule 58. But it 1s quite another thing to imply into the rule a positive obligation on the Federal Secretary to place information before a meeting of the Federal Conference independently of any request or requirement emanating from that body so that a failure by the Federal Secretary to do so works an invalidity within the meaning of section 171C of the Act in relation to the whole of the proceedings of the meeting. Rule 29 can, in my view, have no such operation. The preliminary questions of law have thus been resolved adversely to the applicant. Tt would seem to follow that the application should be dismissed. I shall, however, refrain from making any order in relation to the proceedings until the parties have had an opportunity to consider their position in the light of the conclusions which I have reached on the preliminary questions. I certify that this and the preceding 11 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Neaves. C a As yor te Dated: 1 February 1985