IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) I 7 of 1985 GENERAL DIVISTON ) I 8 of 1985 BETWEEN: ROBERT THOMAS CAMPBELL AND: MICHAEL CONNOLLY Applicants AND: GEORGE ROBERT CRAWFORD AND ORS Respondents CORRIGENDA Amendments to the Reasons for Judgement of Wilcox J. delivered 4th October 1985: Date: Page 62: Solicitors for the Applicant, substitute "Messrs W.G. McNally & Co" for "Messrs Ryan Carlisle Needham Thomas". Page 62: Solicitors for the Respondents substitute "Messrs Ryan Carlisle Needham Thomas" for "Messrs WN.G. McNally & Co." 16 October 1985 ¥. Hilton Associate to Mr Justice Wilcox = AQCT 985 FErsyc. 1ur INDUSTRIAL LAW - Amendment of rules titles" having the effect of abolishing branche Power 3 Council to so amend the rules - Whether CUP er are Federal Council to so amend rules without referencedto, a fé feted branches contravene s.140(1)(a), (c) or (d) or Conciliation and Arbitration Act - Validity of resolution moved by delegate from an unfinancial branch - Meaning of "unfinancial" - Whether branch was in fact unfinancial - Effect of lack of notice to councillors of proposal to abolish a particular branch - Whether Federal Council was bound by the rules of natural justice to give to the members of that branch an opportunity to be heard ~ Whether decisions to amend rules vitiated by the pursuit by some members of Council of an unauthorized purpose - Manner of exercise of the Court's discretion. - Conciliation and Arbitration Act 1904 s.2(f), 140, 197A Conciltation and Arbitration Regulations reg.115(1)(d)(v) Wright v. McLeod (1983) S51 A.L.R. 483, Consett Industrial and Provident Society Limited v. Consett Iron Company Limited £1922] 2 Ch.135, Wiseman v. Professionl Radio and Electronics Institute of Australasia (1978) 35 F.L.R. 24, Municipal Officers' Association of Australia v. Lancaster (1981) 37 A.L.R. 559, Imlach v. Daley (Full Court, 23 April 1985), Morris v. Federated Liquor and Allied Industries Employees' Union of Australia (1978) 35 A.L.R. 60, Lynch v Hodges (1963) 4 F.L.R. 348, Allen v. Townsend (1977) 31 F.L.R. 431, Brophy v. Mapstone (1984) 56 . A.L.R. 135, Maysh v. Adamson (Full Court, °*29 March 1985) applied. Cook v. Crawford (1982) 62 P.L.R. 34, Squires v. Stephenson (1983) 4 1.R. 1, 84 not followed Campbell v. Higgins (1957) 3 F.L.R. 317, Winter v. McAdam (1957) 1 F.L.R. 210, McLure v. Mitchell (1924) 6 A.L.R. 471 distinguished. Cook v. Crawford (1981) 52 F.L.R. 1; Pyneboard Pty. Limited v. Trade Practices Commission (1982) 39 A.L.R. 565, Federal Commissioner of Taxation v. Kearney (1985) 85 A.T.C. 4183, McLeish v. Kane (1978) 22 A.L.R. 547, Hodder v. Australian Workers Union (Pincus J, 2 August 1985) Steuart v. Oliver (No. 2)(1971) 18 F.L.R. 83, Magner v. Fowler (1979) 46 FSL.R. 78, De vaynes v. Noble (Clayton's case) 1816), Mer. 572, Re Footman Bower & Co. Limited £19611 1 Ch. 443 referred to. ROBERT THOMAS CAMPBELL v. GEORGE ROBERT CRAWFORD and others. MICHAEL CONNOLLY v. GEORGE ROBERT CRAWFORD and others. Wilcox J. Sydney 4 October 1985 ye ye cso ese TOTTI TOT SEL sory a oa ' - . . ; ee ees ann Seto: a Post oe . ry . ~o r wot Ne pent tant hte meee nm ! 1 c) . . - l ' IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. 7 of 1985 INDUSTRIAL DIVISTON BETWEEN : ROBERT THOMAS CAMPBELL Applicant AND: GEORGE ROBERT CRAWFORD, JOHN RUTHERFORD , WILLIAM R. DAVIS, PETER LANE, GLEN BATCHELOR , ROBERT BRYANT PETER MADDEN, ROBERT FAIRWEATHER , DONALD TAYLOR, REX HEVEY, STANLEY JOYNER, JOHN THOMPSON, ROBERT FULLER, J. HEGGEN, RONALD MASTERSON, PLUMBERS AND GASFITTERS EMPLOYEES' UNION OF - - AUSTRALIA Respondents \ CORAM: _ Wilcox Jd. . DATE: 4 October 1985 PLACE: Sydney | { | ; ' ~ se ~S7 ARS Soe aye ve Tere Ws Paaaer! Siete a aye GEN ' * wale 7 — — a. ee a ee in te nt MINUTE OF ORDERS THE COURT ORDERS THAT 1. The interlocutory injunctions made on 30 April 1985 be dissolved. 2. The Rule to Show Cause be discharged. 3. The exhibits be handed out at the expiration of 21 , days unless, in the meantime, a Notice of Appeal shall have been filed. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. we Kew TY ke wee tree amen wee ene . ry oat wo aayce ae ord -, . ret a rn ee ' ah ON, pee eo reer * wows 'ae ~ ~ ne eS ea ae et ome a etree : ante we. . 1 ' Y IN THE FEDERAL COURT OF AUSTRALTA INDUSTRIAL DIVISTON Judge making order: Date of order: Place: NEW SOUTH WALES DISTRICT REGISTRY BETWEEN : Wilcox J 4 October 1985 Sydney ed aed No. 8 of 1985 MICHAEL CONNOLLY Applicant GEORGE ROBERT CRAWFORD JOHN RUTHERFORD WILLIAM R. DAVIS PETER LANE GLEN BATCHELOR ROBERT BRYANT PETER MADDEN ROBERT FAIRWEATHER DONALD 'TAYLOR REX HEVEY STANLEY JOYNER JOHN THOMPSON ROBERT FULLER LEO COX RONALD MASTERSON PLUMBERS AND GASFITTERS EMPLOYERS' UNION OF AUSTRALIA Respondents see ST CRYO ce enero weenie eee ar et ne Henan A PL a EE EM NT me Toa cece, woe erp ee to or - a) P : ee . - "Le ato r re ane apy —-— — ma —— aeons one te Pe a = NE ee | eo . ) " . - I. . \f . 2. - t i} be " MINUTES OF ORDER | THE COURT ORDERS THAT:1. The interlocutory injunctions made.on 30° April 1985 ' a be dissolved. . . - ws | i i, 2- The Rule to Show Cause be discharged. P. 3. The exhibits be handed out at the expiration of 21 - , days unless, in the meantime, a Notice of Appeal oo . . f, : " shall have been filed. | : ! : , l. 1 i. Note: Settlement and entry of orders is dealt with in order te 36 of the Federal Court Rules. tr 1 é. rt mmrne Ps Uae Te eimeegermer sagen ste a Ue te * - ~The oe IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY INDUSTRIAL DIVISION No. 7 of 1985 BETWEEN: ROBERT THOMAS CAMPBELL AND: BETWEEN : Wilcox J 4 October 1985 SYDNEY Applicant - GEORGE ROBERT CRAWFORD JOHN RUTHERFORD WILLIAM R. DAVIS - PETER LANE GLEN BATCHELOR ROBERT BRYANT PETER MADDEN ROBERT FPATRWEATHER DONALD TAYLOR REX HEVEY STANLEY JOYNER JOHN THOMPSON ROBERT FULLER J. HEGGEN RONALD MASTERSON PLUMBERS AND GASPITTERS EMPLOYEES ' UNION OF AUSTRALIA Respondents No. 8 of 1985 MICHAEL CONNOLLY Applicant GEORGE ROBERT CRAWFORD \ JOHN RUTHERFORD WILLIAM R. DAVIS PETER LANE GLEN BATCHELOR ROBERT BRYANT PETER MADDEN ROBERT FATRWEATHER DONALD TAYLOR REX HEVEY STANLEY JOYNER JOHN THOMPSON ROBERT FULLER LEO COX RONALD MASTERSON PLUMBERS AND GASFITTERS EMPLOYEES' UNION OF AUSTRALTA - Respondents corer + wow, 7 apne oe - mse eet aay oe Voywses REASONS FOR JUDGMENT - The disputes which give rise to these proceedings are an unfortunate aftermath to an otherwise successful attempt to heal a major rift in the ranks of plumbers and gasfitters. The Plumbers and Gasfitters Employees Union of Australia is an organization registered under the Conciliation and Arbitration Act 1904, having branches throughout Australia. For many years there have been two branches in each of New South Wales (Sydney and Newcastle) and Victoria (Melbourne and Geelong). Ata meeting of the Federal Council of the organization held from 26 to 28 September 1984 a number of decisions were made, the effect of which, if the decisions are valid, is to abolish the two separate branches in each of those States and to create a single branch for each of the two States. In separate proceedings Robert Thomas Campbell and Michael Connolly challenge the validity of those decisions. Both applicants are members cf the organization; Mr Campbell being associated with the Newcastle branch and Mr Connolly with Geelong. The two applications have been heard together. It is common ground that the form of the relevant resolutions is such that if they are invalid in relation to either Newcastle or Geelong they also must be regarded as s being invalid in relation to the other branch. Each application is brought under s. 141 of the 'Conciliation and Arbitration Act. In each case a Rule to Show rere rene as rt elf . 7 we debe ee * ae aes rT, Poteet + + ae Cause was issued naming as respondents 13 persons. Those persons, with Ronald Masterson, the Secretary of the Newcastle branch, are the persons who in September 1984 constituted - and who still constitute - the Federal Council. Each Rule called upon the respondents to show why orders should not be made that they perform and observe the rules of the organization by treating as void and of no effect the decisions of the Federal Council to which I have referred. On 30 April 1985, branch elections then being imminent, an additional respondent was added in each matter: that respondent being the relevant returning officer. Orders were made, in effect, suspending further steps in relation to the elections. Upon the same day Mr Masterson was added as a respondent to each matter. At the commencement of the hearing the organization itself was added as a respondent in each matter. In each case the 13 original respondents and the organization were jointly represented. They were the only respondents actively to contest the applications. Unless otherwise indicated, I shall uSe the term "the respondents" to refer only to then. - The applicants rely upon a number of grounds in support of their claim that the relevant decisions are invalid. Some of these grounds depend upon the terms of the Act and of the rules of the union; but it is also contended on behalf of the applicants that, even if the Federal Council possessed the power which it purported to exercise, such exercise was vitiated by the pursuit, by three members of the Council, of an improper purpose. eee ee ee ee ee re ee Behm ' -! : - 4 tie " WA] nena 6 mbtnnedmennl nae ale ate mnnee beeenre ate carne 6 carers ate etter eet oan nee meine etifenek mereme in mmneees Cette emcee eens ea ae eaten cae ated te ane we eer ey woes eee at wo & Rt. wre on ——— ; - fa -o8 - ue 1 . - eo é - "of oe soos ve ' ve . + . soe nie atten nteementn safe etme an mit ete te eh ne te ee eet ee itn mete 9 eet nee Baa ot cere "ete Pine mel 4. It is also contended that the resolutions are invalid because of the participation in those resolutions of the delegates of the Sydney branch, Mr Peter Lane and Mr Glen Batchelor; the Sydney branch being said to have been then unfinancial. The "war". In order to evaluate these factual submissions it is necessary to set out gomething of the background to the meeting. The story goes back to 1976 when there commenced a dispute within the union which the witnesses generally referred to as the "war"; an appellation not inappropriate having regard to the bitterness which it generated and the cost which it inflicted upon the organization and its members. The early stages of this dispute were summarized by Evatt J. in Cook v. Crawford (1981)52 F.L.R. 1; a summary accepted as accurate by all parties in the present proceedings. The organization has been registered under the Conciliation and Arbitration Act since 1911. Until 1954 there was only one branch in New South Wales, the Sydney branch. There was a Newcastle sub-branch. In 1954 that sub-branch became a full branch, covering a defined area lying between Broken Bay and the Queensland border and west from the coastline to the railway line which runs from Singleton northwest to Gunnedah, Moree etc: see r. 47. Mr Masterson became the Newcastle branch secretary. He continued to hold that office until the events with which the Se tte ey eee etnies ee lee owt rea og mete ot coreg sae ete ut . af re eo ste a ~ ~ we ree a cs nog - 5. present applications are concerned. In'1975 the rules of the organization were amended to entitle the members of Newcastle branch to elect a Federal Vice-President, with a seat on Federal Council. Thereafter Mr Masterson held this additional office. In 1918 a trade union registered under the Trade Union Act 1881 (NSW), styled "The New South Wales Branch of the Australian Plumbers and Gasfitters Employees' Union" was registered as an industrial union of employees under the Industrial Arbitration Act, 1912 (NSW). For many years that union operated in close association with the federal organization; each elected official apparently holding the same office in the State union as in the New South Wales branch of the federal organization. Prior to 1975 most employed plumbers in New South Wales were covered by State awards. In 1975 consideration was given to the possibility of obtaining a federal award and in 1976 agreements were reached, and certified under the Conciliation and Arbitration Act, in relation to employed plumbers in Victoria, _South Australia and Tasmania. The organization pursued an application for an award governing employees in the other States - including New South Wales - and in the Territories. However, there was disagreement about the desirability of this course. Some of the New South Wales officials actively opposed the proposal for a federal award affecting New South Wales; not only within the councils of the organization but also before the ee et Eee md eet el ee ae ee a ? ~ ' - re - . . - oN we ete ee te ee ae ee ea eee erties Ne ae telly Red et tN ae ean ne er ere te eet em te Conciliation and Arbitration Commission and in the Australian Industrial Court. On 3 August 1978 the name of the State union - which was then controlled by opponents of the federal award - was changed to "New South Wales Plumbers and Gasfitters Employees Union". A contest developed for the support of members. Early in 1979 Mr Masterson lodged with the Federal Executive of the organization formal complaints against Mr U.C. Bignell, the Sydney branch secretary, Mr H. Shooter, the assistant secretary - organizer of Sydney branch, and three Sydney branch, organizers, Messrs K.L. Tyler, R.L. Cummins and G.L. Waters. The gist of the complaints was that these five officials, although still officers and members of the organization, had been involved in the persuasion of members of the Newcastle branch to resign from the organization; their purpose apparently being to have them join the State union. The executive found against the five officials and, on 2 May 1979, expelled them from the organization and dismissed them from the offices which they held. Mr R.A. Cook, a member of the Sydney branch, challenged the legal validity of the executive's decisions. By amendment Messrs Bignell, Shooter, Tyler and Waters were added as applicants. On 4 March 1981, after a 60 day hearing, Evatt J. found in favour of the respondent members of the executive. Upon the same day, in separate proceedings instructed by the then - and present - federal General Secretary of the organization, Mr George Crawford, Evatt J. made orders requiring the payment to the federal office of the outstanding Sydney branch capitation fees for the financial year 1978-79 and for the holding of elections to fill the offices from pete cele ol ec ce ee ee Rt Ene ean ee ee ate oe er eo an 7. which the expelled members had been removed: see 52 F.L.R. at p.69. Those elections were heid on 31 August 1981. They resulted in the election of Mr Lane as secretary of the Sydney branch and of Mr Batchelor as assistant secretary. Those two gentlemen have held those offices since that time. The applicants before him appealed against the decision of Evatt J. to uphold the expulsions and dismissals from office. The Full Court (Smithers, Keely and Sheppard JJ) was divided in opinion. Keely and Sheppard JJ held that r. 28(5), under which the Federal Council had amended the organization's rules governing expulsion and dismissal from office, was unreasonable; and so invalid under s. 140(1)(c) of the Conciliation and Arbitration Act. Smithers J. dissented on that matter. However, ~ the appeal failed because both Smithers and Sheppard JJ took the view that, having regard to the conduct of the expelled officials, the Court should not exercise its discretion to make an order under s.141 of the Act: see (1982) 62 F.L.R. 34. Regrettably, the decision of the Full Court did not bring to an end the litigation between the two factions. The subsequent position was summarized in an affidavit of Mr Crawford filed in those proceedings, the accuracy of which summary has not been challenged: "Notwithstanding the proceedings in the Federal Court the five dismissed officials continued to occupy their offices within the State Union and intense conflict continued between theorganization ee . te ne ete ee me ree tein ie oy nt a et et oe rence ' 7 TA a a ae nn ar aire 1 ae ty = ate 8. and the State Union, particularly in relation to Union membership and the question of whether a Federal Award should be made covering plumbers and gasfitters within the State of New South Wales. Following the service of a Log of Claims on plumbing employers within the State of New South Wales by the Organisation in 1979 proceedings were commenced in the Australian Conciliation and Arbitration Commission in which said proceedings the Organization sought a Federal Award. These proceedings were strongly opposed by the State Union and plumbing employers in the State of New South Wales. Following the finding of an interstate industrial dispute by Deputy President Alley on 6th September 1979 the State Union unsuccessfully challenged the finding in the High Court of Australia (see Re Conciliation and Arbitration Commission Ex Parte PGEUA (1981) 56 ALJR 6). Thereafter the State Union opposed further proceedings in the Australian Conciliation and Arbitration Commission in reliance on Section 41(1)(d) of the Act. Following a further decision of Mr. Justice Alley declining to discontinue the proceedings under Section 41(1)(d), (1982) 3 IR 186), the State Union unsuccessfully appealed to a Full Bench of the Conciliation and Arbitration Commission ((1982) 3IR 410). Finally following the dismissal of the State Union's appeal a Federal Award was made on 14th February 1983. State Award prescription however remained in New South Wales in areas not covered by the Federal Award, principally covering plumbers employed by State instrumentalities." Peace negotiations . The cost of this litigation, both in terms of money and effort, was obviously considerable. Moreover, according to Mr Crawford "intense competition for membership between the State Union and the Organization persisted and the bitter rivalry continued unabated." Accordingly, the battle for a federal award having been won, the executive of the federal organization began to consider the possibility of a reconciliation with the State union. At a meeting on 23 November 1982 the executive empowered we eee oe ee 4, A the General Secretary to discuss the future of the State union with officers of the Australian Council of Trade Unions. The President of the A.C.T.U. apparently conveyed settlement proposals to officers of the State union but without response. In February 1984 Mr Crawford and Mr Lane had some informal discussions with Mr Matt Gemmell, an organizer of the State union and a person who had been actively involved in the contest for members. It was decided to convene a meeting, under the independent chairmanship of an official of the Building Workers Industrial Union, between the full time officials of the State union and the full time officials of the Sydney branch of the organization; together with Mr Crawford as General Secretary. This meeting was held on 22 March 1984. As Mr Crawford put the matter in his affidavit: "The discussion revealed a positive approach by ~- both groups and it was agreed that both groups would go back to their respective unions and report on the discussions that had taken place in order to reconvene in a further conference with some firm proposals to be considered by both organizations." . According to Mr Crawford, one of the matters raised by the State officials was their own continuity of employment. The representatives of the federal organization indicated a readiness to have the federal organization employ certain specified State officials, but not all of them. The State officials then asked what was there to stop the federal officials, after having eos a nest ere me mporer on 9 ee ee 10. obtained by amalgamation of the two unions all the members and — one set of records, sacking those officials. Mr Crawford said that he replied that the agreement would be with a national union,"it would be an agreement that had been adopted by the responsible branches of that organization, and as General Secretary it would be my duty to ensure that the terms of that agreement would be carried out and I would give a guarantee to ensure it would be carried out. It was a matter of the credibility of the national organization". Mr Crawford did not invite Mr Masterson to the meeting of 22 March. In evidence he gave two reasons: first, "the war was really being conducted in Sydney, that is where the trench warfare was" and, secondly, he was aware that Mr Masterson "had expressed a view that we should not be talking to them and if there was to be any progress in discussion then obviously that was a delicate matter." However, Mr Masterson was asked to attend a meeting held on 29 March; a meeting which was called by Mr Crawford to formulate proposals to be put to the State union on behalf of the federal organization. That meeting was attended by all of the full time officials of the Sydney branch, by Mr Masterson as a representative of the Newcastle branch and by Mr Crawford. The meeting resolved on 12 points to be put to the State officials ata further neeting intended to be held on 5 April. The 12 points, which were reduced to writing by Mr Crawford, included provision for the State union to cease to operate and for ali its members to become members of the federal ee coy arog Tee reryrns peepee me ones oy ere t li. a a organization. Points 5, 6, and 7 were as follows: "S. The Sydney Branch of the Federal Plumbers Union undertakes to employ H. Shcoter as an Industrial Officer. 6. The Federal Plumbers Union undertakes to employ M. Gemmell and R. Campbell as- Organisers. - 7. An agreement to be drawn up and signed by the parties that, provided H. Shooter, M. Gemmell and R. Campbell are loyal, do not challenge the present leadership of the Federal Plumbers Union and carry out their normal duties as allocated, the present leadership - for as long as they remain the leadership - guarantee continuous service for H. Shooter, M. Gemmell and D. Campbell." According to Mr Masterson, at the meeting of 29 March there was an exchange between Mr Batchelor and himself relating to the future of the Newcastle branch. -In his affidavit Mr Masterson said that, 'in the context of discussion relating to the employment of the State officials and the necessity for the Newcastle branch to play a part in providing one or more positions, Mr Batchelor said to him "You will have to-come to the party or we'll have to move in and knock you off." Mr Batchelor denied that there was any threat. He said that the mood at the meeting was friendly, that he and Mr Masterson were close friends and that he had often made joking comments about "knocking off" Newcastle. Mr Masterson agreed in evidence that Mr Batchelor's threats to "knock off" Newcastle were "a kind of standing joke" between them. Mr Masterson also attributes to Mr Lane a threat to take over Newcastle if that branch would not "come to the party". Mr Crawford denied that anything along these lines was . ar -2, ~ . ~ meso . a ey ares enenk earti 12. said, by either Mr Batchelor or Mr Lane. In his affidavit Mr Lane denied that either he or Mr Bachelor said anything about taking over Newcastle. This denial was not challenged in cross-examination. Although Mr Masterson claimed in evidence that he regarded what was said as a threat to the Newcastle branch and.that such a threat would have been a serious matter, he took no action to report the matter to the Federal Council or to recommend to the Newcastle branch committee of management that it take any action in relation thereto. I am not satisfied that any threat was made at this meeting. Perhaps Mr Batchelor repeated his "joke" but, if so, I believe that Mr Masterson understood it as such. Had Mr Lane made any threat to Mr Masterson I believe that Mr Masterson would have done something about it. The fact that he did not supports the denials of both Mr Crawford and Mr Lane. ' ' The document prepared by Mr Crawford was handed to the representatives 'of the State union on 5 April. It was discussed at a further meeting on 18 April between the officials of the federal and State organizations, when both delegations announced that their respective executives had accepted the 12 points. The meeting decided to form a committee to draft a formal agreement; \ Mr Crawford and Mr Lane being nominated to represent the federal organization. of ~9~ =<- "a Qe we corttenemnne we pte Sten wy meen ne a ren fous ce mes 13. Consideration of the peace terms Mr Crawford was concerned to ensure that members of the Newcastle branch were aware of the steps being taken in relation to re-unification. He requested Mr Masterson to arrange an informal meeting of interested branch members. This meeting was arranged for 9 May 1984. About 20 to 25 members attended. Mr Crawford was present, in company with Mr John Rutherford, the Assistant General Secretary of the organization. There are some differences between the evidence of Mr Crawford and of Mr Masterson as to what was said but I do not think that they are significant. It is clear that Mr Crawford informed those present of the negotiations with the State officials and, in particular, that the implementation of the agreed terms would require the federal organization to find jobs as organisers for both Mr Gemmell and Mr Campbell. Furthermore, Mr Crawford made it clear that Sydney branch was not in a financial position to employ both those men - as well as Mr Shooter as an industrial officer - and he suggested that at least one of the State officials would have to be employed at Newcastle. A question was asked by Mr Ken Granger, a recently employed temporary organizer, as to whether this would affect his job. Mr Crawford seems to have replied to the effect that one option would be for him to be replaced by a State organizer but, according to both accounts, there was no specific threat to Mr Granger's position. Also according to both accounts, Mr Crawford asked those present to consider what other options were available to resolve the problem. He mentioned as a Mie eee mw ee ope wee ee . te em ow wena ne ee eo a4 eee ee ee be ter ce ay gmat Gn POTTED ga + SO Te possible option the reversion of Newcastle to sub-branch status, the sub-branch having attached to it either Mr Gemmell or Mr Campbell. No decision was made at this meeting. Indeed, Mr Crawford did not seek a decision; his purpose was to report the position and to stimulate consideration in Newcastle as to the most desirable course of action. However, according to Mr Crawford, he made clear to Mr Masterson in a private conversation at the airport his view that one of the two organizers would have to work in Newcastle. Mr Masterson denied this specific statement but he said that he clearly understood Mr Crawford to be of the opinion that one of the Newcastle organizers would have to make way for one of the State union organizers. At no stage - not even in his evidence in this case - did Mr Masterson contest Mr Crawford's opinion that Sydney branch could not afford to employ both of these organizers. He said in evidence that Mr Lane had claimed as much at the meeting of 29 March and that he had accepted that claim at that time. He described the Sydney branch as being "desperate for finance "and said that if all of the named State officials were to be taken back in the organization "they" (Sydney branch) "had to put people out". Mr Masterson said that, upon the day following the meeting of 9 May, Mr Granger told him that he had decided that he "may as well bail out now". In fact he stayed on for a few more days but then resigned. Notwithstanding Mr Masterson's understanding of the position outlined by Mr Crawford on 9 May, the Newcastle committee replaced Mr Granger with a new organizer, BN ee ee Fe Sette me eee en mere cee ene een Se ects amen Bee SE pi spor ote os we ogo 15. Mr Phillip Darby, without reference to Mr Crawford or to Mr Lane. At a meeting held on 16 May 1984 a draft agreement between the federal and State unions was prepared. This draft provided that Mr Campbell and Mr Gemmell would be employed as federal organizers until the elections in 1987 and that Mr Shooter would be employed as an industrial officer. The draft further provided that, at the 1987 elections, "the officers will co-operate and present a common list of candidates for election by the membership". The draft proposed a merger of the membership records of the two unions by 1 April 1985. This draft was approved by the State Conference of the State union during May 1984 and by the committee of management of the Sydney branch of the federal organization on 29 May 1984. Over the period 6-8 June 1984 the executive of the federal organization met. The executive resolved to endorse the principle of reconciliation of the two unions in New South Wales, to endorse and adopt the draft agreement and to recommend the adoption of the agreement to stop work meetings of members 'concerned and to the Federal Council of the organization. An amendment, moved by Mr Masterson, for the deletion of any reference in the agreement to Mr Gemmell being employed by the organization was lost. Later in the meeting, and over the opposition of Mr Masterson and Mr Bryant of the Western Australian branch, the executive resolved to invite five persons, including Messrs -Gemmell, Shooter and Campbell, to make application for re-admittance to the organization. 16. Stop work meetings of the members of the Sydney and _ Newcastle branches of the organization were held on 27 June. The~ notice sent to each member in relation to the Newcastle meeting was accompanied by a copy of the draft agreement and an extract of the relevant minutes of the Federal Executive meeting. The meeting in Sydney approved the draft agreement. That in Newcastle did not. The formal minutes of this meeting, which were prepared by Mr Masterson from notes made by him during the course of the meeting, record a motion - moved by Mr Darby and called in the minutes an amendment ~- as follows: 1 "that this stop work meeting of the Newcastle Branch of the Plumbers and Gasfitters Employees' ' Union of Australia rejects the Federal Executive recommendation. That we support the re-unification of all of the rank-and-file members of the Plumbers and Gasfitters Employees' Union of Australia and the N.S.W. Plumbers ard Gasfitters - Employees' Union. We oppose employing the three State officials of the N.S.W. Plumbers and Gasfittes Employees' Union, Don Campbell, Matt Gemmell and Harold Shooter." Mr Crawford attended the Newcastle meeting. He reported the history of the negotiations for re-unification in detail. He put the position in relation to the State officials quite bluntly. Mr Masterson recorded him as saying: "It is the desire of the- Federal Union to have coverage over the State Union. The snag is, we must take over three full time officials of the State Union as officers, organisers of the Federal Union as these three officials want to hang on and unless we take them they will not pass over to the State Union. Matt Gemmell, Harold Shooter and Don Campbell. That is their unanimous position." - dente ee AD et rent treet De ated eee we 7a BUST 1 nen dee mene a cuenegent m wimein nent ear ne ieee eee Mg pt tata 17. After Mr Crawford spoke there was a period for comment and questions, during which Mr Crawford said that Federal Council would make the "final decision". Shortly thereafter the motion was put to the meeting and carried unanimously. In view of the Newcastle decision Mr Crawford decided that it was necessary, as a matter of priority, to obtain a decision of the Federal Council in relation to the agreement. He arranged a postal ballot of the members of the council upon the question whether the members approved adopting the draft agreement. Mr Crawford enclosed with the ballot papers a report setting out the history of the matter. This report disclosed the decisions at both the Sydney and Newcastle stop work meetings. The accuracy of the report has not been challenged save that it states the Newcastle decision as being that the branch 'would not accept any of the full time officials of the State Union into membership of the Federal Union'. I think that this is not quite correct. The effect of Mr Darby's motion was merely that these people were not to be accepted as employees of the organization; nothing was said about membership. However, all parties in these proceedings agree that this difference does not matter. Mr Crawford's report went on to say that the Federal Executive's recommendation "has been rejected by a meeting of the Newcastle Branch members". That statement is obviously correct, as Mr Masterson conceded in his evidence. The postal ballot closed on 6 August 1984. By a majority of 27 to 5 the agreement was approved and adopted. It was formally executed on 31 August 1984. Fee oy uae ay -—oee Feemees ca vespiem am ney ar nyreners 18. The move to abolish Newcastle branch. Mr Lane learned of the decision at the Newcastle stop work meeting with some dismay. In his affidavit he stated that to him the decision "meant that the agreement had been torpedoed". He went on: "Its decision was inconsistent with the proposal for reunification. The decision presented a direct financial threat to the Sydney Branch. Both Gemmell and Campbell had to be employed under the agreement. One had to be employed in the Newcastle area. Because the Newcastle Branch had refused the employment of the officials the Sydney Branch would have had to employ the officials on - its own. The Branch could not afford to do this." Mr Lane decided to resolve the problem by seeking the winding up of the Newcastle branch and its reversion to a sub-branch; thus enabling those managing the enlarged branch to control the funds available to Newcastle and to use them for the employment in the Newcastle area of one of those two organizers. He obtained advice from Mr Crawford as to the rule amendments which would be necessary to achieve this result and discussed the position with members of the Sydney branch committee of management. The committee resolved that its only option was to seek the winding up of the Newcastle branch. It called a meeting of members of the Sydney branch for 14 August 1984. That meeting unanimously adopted a lengthy resolution in which it requested a special meeting of Federal Council at the earliest possible date 19. "to consider the following agenda items to alter the rules of the Union. a) That the Newcastle Branch be wound up and revert to a Sub-Branch of the Union. b) That there be only one branch of the Union in New South Wales entitled 'The New South Wales Branch of the Plumbers. and Gasfitters Employees Union of Australia'. c) That consequential amendments to the rules be made to give effect to (a) and (b) as above and include... \ . qd) That the change of rules apply from the ist April 1985." This resolution was transmited to Mr Crawford who took a postal ballot of members of the executive upon the holding of a special meeting of Federal Council from 26 - 28 September to consider "the Agenda items submitted by Sydney Branch and any other consequential Rule changes that may be required from consideration of the Sydney Agenda items" and also one other unrelated matter. The agenda items submitted by Sydney branch were enclosed. The majority of the executive voted in favour of holding the meeting; Mr Masterson voted against. He agreed in evidence that by the time he received this ballot' paper - apparently about 24 August 1984 - it was clear to him "that some very serious and significant step was being contemplated within- the union in relation to the fortunes of Newcastle branch." -He appreciated that the effect of the resolution would be to revert Newcastle to the status of a sub-branch. epee i ne -acr ert met EE Teg at Me a ay Sea Soa et "20. ee 8 ana TO Eten met ere erences eaten ae aes pH M e Nre eee ene eee Semen pee ene Tete te ny ey pe en a eee ep tent Mr Masterson responded: to the situation by drafting a petition for presentation to Federal Council. The petition referred to the achievements of the Newcastle branch over its 30 years of existence and concluded with a plea to the federal ~ councillors "to vote against Sydney Branch's proposed rule changes or any other changes which will bring about the closure or the limiting of the Newcastle Branch". The petition was signed by some 400 members; about half the current financial membership of the branch. The minutes of the meeting of Federal Council of 26 -28 September are in evidence. Mr Lane and Mr Batchelor represented Sydney branch. Mr Masterson represented Newcastle. Three councillors were absent, although one absentee was represented by a proxy and each branch was representd. Under the rules of the organizaion (¥,25) the voting entitlement of branches in council ballots is related to their financial membership. Where only one councillor is in attendance from a particular branch that councillor is entitled to exercise the full entitlement of that branch. In the event, therefore, all votes could be - and apparently were - exercised. The first item of business considered by the meeting was a motion moved by Mr Lane: > "That the Newcastle Branch be wound up and revert - to a Sub-Branch of the Union. That there be only 7s one Branch of the Union in New South Wales entitied 'The Plumbers and Gasfitters Employees' Union of Australia, New South Wales Branch'." iv ~ ae ro ee pe ene ee etn tl A tenn RRA RA me Re meen © t , vee ~ % "me - - 221. This motion was debated over a period of some hours; both Mr Lane and Mr Masterson speaking at length. In evidence Mr Lane said that during this discussion he asked Mr Masterson whether he could suggest any alternative method of implementing the agreement with the State union. Mr Masterson agreed that Mr Lane "could have said that" but he did not provide an alternative "because I did not see the situation as being necessary to alter the branch". Mr Masterson did raise some questions regarding the status of the Sydney branch meeting but he did not make any allegations about the motives actuating the Sydney branch or its representatives. In the result the motion was carried by 23 votes to ll. On 28 September 1984 council considered a report by Mr Crawford as to the rule changes necessary to give effect to the @arlier decision. At this stage, apparently for the first time, the suggestion was made that the principle of having a single branch in a State should apply also to Victoria. Council resolved, with only Mr Masterson opposing, as follows: "That this meeting of the Federal Council has given consideration to the practical problems involved in the implementation of the reunification of the State Registered Plumbers' Union with the Federal-- Registered Plumbers' Union in New South Wales, and noted the history and development of State Branches of the Federal Union in all States except New South Wales and Victoria. "The resolving of the problems in New South Wales would continue the development of State Branches - four te ~ te ee eee ne w+ ee re ee ne eee ie oe a eee awe - ' me ~ 22. which has been proceeding over the past decade and provides the cpportunity to complete the circle and have a uniform State Branch organization. / "Council resolves to complete the circle and establish State Branches of the Union in New South Wales and Victoria." Council then proceeded to consider and to adopt - only Mr Masterson opposing - the resolutions to amend the rules of the organization which are challenged in these proceedings. The amendments have the effect of providing for a single branch in each State and of transforming the Newcastle and Geelong branches into sub-branches. An amendment to permit Newcastle sub-branch to elect one of the Federal Vice-Presidents was defeated but, by the amended r.42, the New South Wales and Victorian branches were required to provide out of branch funds sufficient moneys to the Newcastle and Geelong sub-branches, respectively, "to defray the salary of a full-time official of that sub-Branch and otherwise to meet the costs of operating the sub-Branch". The Points of Claim filed on behalf of the applicants vaise a number of matters by virtue of which it is contended that the decisions of the Federal Council on 28 September 1984 to amend the rules are invalid. Not all grounds are pressed. Some that remain may conveniently be considered together. They reduce to four substantial grounds which may be summarised as follows, being the order in which I will deal with then: a) - That the council lacked power under the rules to make the amendment; alternatively, if the wee ee ee ee i re ce my Te ee eee ao Payers we wt socio oy - 4 Power entitled 23. rules did confer power, that the rules are invalid as contravening s.140 of the Act. b) That the decisions are vitiated by the participation in the deliberations and voting of representatives of the Sydney branch, that branch being unfinancial at the time. c) That, even if the council had power generally to make the amendments, the decisions, insofar as they affected the Geelong branch, are invalid because: (i) no notice was given to the councillors prior to the meeting of any proposal relating to Geelong; and (ii) no opportunity was given to any representative of the Geelong branch to be heard; and the decisions in relation to Newcastle are inseverable. d) That the decisions insofar as they relate to Newcastle branch are vitiated because of the pursuit by some councillors of an improper purpose and the decisions in respect of Geelong branch are inseverable. Rule 21 of the rules of the organization is "Government". Relevantly it provides: "1. The supreme control of the Union is vested in the membeers of the Union. Subject thereto, the supreme control vested in the members shall be exercised on their behalf by the Federal Council... 2. eee 3. The Federal Council shall have the general control and conduct of 'the business Gs ' come ~ eee i Cr { eg ete te mr mentee eft te eee, 24. of the Union and without limiting the -foregoing the powers of the Federal Council shall include the following: ~ {a) to direct the policy of the Union in all matters affecting the interests of the members; (b) ewe (c) to resolve all matters referred to it by Branches; - ; (a) to make amend or rescind any of the Rules of the Union, ..." Rule 27 deals with amendment to the rules. It provides: "Ll. The Rules of the Union shall not be amended except on a resolution carried by a majority of the Federal Council. 2. Any member of the Union desiring to submit to Federal Council any proposal to amend the Rules must forward such a proposal to the General Secretary to reach him not later than 2 months prior to the General Meeting of the Council. 3. _The General Secretary shall include such proposals in the Agenda Paper for the Biennial Meeting. 4, Notwithstanding the provisions of Sub-Rules (2) and (3) of this Rule, the Council may at any time of its own motion make amend or rescind any of the Rules of the Union." The relevant meeting was not, of course, a biennial meeting of the council. It was an extraordinary meeting convened pursuant to a resolution of the Federal Executive, as provided by r. 22(2). It follows that sub-rules (2) and (3) of v.27 have no application. But sub-rule (4) is an TT es —e — en yee *unaal alee aeecaie a my - , Penn] ten. : < Mee oe ' - 25.- over-riding provision, purporting to empower the council to amend the rules at any time and of its own motion. The applicants do not concede that the effect of rr. 21(3)(d) and 27(4) - if those rules be valid - is to empower the Federal Council to amend the rules at any time, even thereby by abolishing branches. But they put nothing to the contrary and it seems to me that this is their effect: see the comment of Sheppard J. in Cook v. Crawford at 62 F.L.R. 94 in relation to the independent operation of the equivalent sub-rule (5) considered in that case. The real question, in relation to power, is whether rules which may have that effect are valid: The argument for invalidity relies upon three separate provisions of s.140(1) of the Conciliation and Arbitration Act: paras (a), (c) and (d). Those paragraphs read: "140(1) The rules of an organization - (a) shall not be contrary to, or fail to make a provision required by, a provision of this Act, the regulations or an award or otherwise be contrary to a law; (bd) vee (c) shall not impose upon applicants for. _. membership, or members, of the organization, conditions, obligations or restrictions which, having regard to the - objects of this Act and the purposes of the registration of organizations under this Act, are oppressive, unreasonable' or unjust; and ' nen re ee ny erie tem ameetntee aes eye > Meer ne rm een we ee rte ne 8 eee ee oot . , vo . ee Oe eee rn i) " ape wre eee eage - ee oe ore oa 2 ye ayorae we een noe ere = 26. (d) ° shall be such as to provide for the autonomy of a branch in matters affecting members of the branch only and matters concerning the participation of the branch in any State industrial conciliation and arbitration system." Regulation 115 of the Conciliation and Arbitration Rqulations specifies certain prescribed conditions to be complied with by an association applying for registration. Those conditions include: "(d) the affairs of the association shall be regulated by rules ... providing, in relation to the association, for - (v) the control of committees of the association and its branches by the members of the association and the members of the branches, respectively; aoe N The argument is put that rules permitting the- abolition of a branch without the-consent of, or even reference to, the members of that branch are rules which fail to provide for control of branches by their members~ Hence, it is said, the rules fail to make a provision required by the regulations and in that respect contravene 3.140(1)(a). In reliance upon s.140(1)(c), it is said that rules which permit such a result are rules which impose uon members of the organization conditions, obligations or restrictions which, having regard to the objects of the Act are oppressive, unreasonable or unjust. One of the "chief 7 (earners oe omenanngseeseprs — eres tet sripmeeew a -. _ erent : —s- 27. objects" of the Act is by "to encourage the democratic ' control of organizations so registered "(that is, under the Act)" and the full participation by members of such an organization in the affairs of the Organization": see- s.2(f). In Cook v. Crawford the Full Court considered the validity of the then r. 28(5) of the organization. Rule 28 - the terms of which are set out at 62 F.L.R. 45 - then followed a form similar to the form of the present r.27; it provided for amendment pursuant to member initiative and ended with an over-riding provision, r. 28(5), empowering Federal Council at any time to "make or amend any rules". By majority, Keely and Sheppard Jd, Smithers J. dissenting, the Court held that this last sub-rule contravened s.140(1)(c) of the Act because it was unreasonable:-see 62 F.L.R. at pp 74-77, 106-109. The basis of the decision was- that a rule which permitted a function so important as the amendment of rules to be performed by a committee of only 14 members of the organization, without even the necessity of prior notice to members generally, was incompatible with 8.2(f) of the Act. As Sheppard J. expressed the matter at p. 108, the amendment to the rules to put r. 28(5) into its then form "discourages full participation by members in an important affair of the organization, namely the amendment of its constitution." SY ene eet i nena re et ee wate re orc Fe er ev mene regi emit egos Vinee Semen eee avis ate ae + te weap oe 4 oT Te » i wa - 28. ~ That basis of decision is equally applicable to the present r.27(4). Notwithstanding some variation between the wording of the two sub-rules, the decision in Cook v. Crawford is indistinguishable from the present case. If the approach adopted by the majority in that case is still good law, it must be held that r.'27(4) is invalid; so that the Federal Council had no power to make the rule amendments under present challenge. The respondents, however, argue that the decision on this point in Cook v. Crawford cannot stand with a later Full Court decision: Wright v. McLeod (1983) 51 A.L.R. 483. In that case the Court had to determine the validity under s.140(1)(a) and (c) of a rule of the Australian Insurance' Employees Union permitting amendment of the rules of that organization by a resolution of its Federal Council adopted by postal ballot. By majority, Bowen C.J., Smithers, Evatt . and Northrop dJ, Sheppard J. dissenting, the Court held that rule to be valid. At p. 490 Bowen C.J. accepted as correct a concession by counsel for the applicants that the rules then in question "were not bad merely because they allowed the Council to alter the union's rules." His Honour went on to note the particular submission that was put, namely that "the present rules were contrary to the Act in allowing the~- whole of the rule amending process to take place at Council level without any participation by members or branches being required." The submission pointed out that the rules ' leaaceerstnr $ toptete wren ya a penny ase wpe Wibatnenes sme ea: SA aatr aR RAISER Ex Scaees OREO ak dancin oectea ae ra Irmepmnerge | met enya te ee Scar anda tac racic ait cael ter seni a se 8 oe ey 7 ee - sree ET a toys 29. permitted rule changes without notice to members of the proposal, by postal ballot - thus preventing debate and exchange of ideas at a meeting-- and by only a small number of council members. The Chief Judge found "considerable , force" in those submissions. He referred to the Full Court decision in Cook v. Crawford and to two later decisions of Sheppard J. in Squires v. Stephenson (1983) 4 I.R.1,° 84, commenting that each of those decisions "was based on its own individual circumstances". He went on, at p. 491:- "T am unable, however, to agree with the suggestion that the law requires, as a general rule, that it is necessary for members to participate in every rule change for the rule amending procedures to comply with the Act. Rule-amending procedures must be considered against the background of the rules of the particular organization.' Bowen C.d. commented that it was "important that the Council here is a democratically elected' body". - He~- referred to various safeguards in the rules - quorum, proxies, notice and the requirement of a two-thirds majority - as going "a long way" towards indicating non-contravention of s.140 (1)(c). His Honour referred to the requirement of notice of Council decisions, with the consequential opportunity of members to seek a reversal of the rule change or to take action in this 'Court. He placed some emphasis upon the provisions in the rules for a plebiscite of members but, at p. 493, commented: 30. "The mere fact that a Council is given power to amend rules without the existence in the rules of a liberal plebiscite provision will not automatically mean that the rules contravene s.140(1)(c). Each situation must be considered individually with particular regard to the mode of election of the Council, the rules relating to Council meetings, the position of branches in relation to the Council, the extent of the power of the Council to amend rules, any requirements for members' participation in the process and any other means of review of the Council's decision." In the result his Honour held that the subject rules did not contravene either s.140(1)(c) or reg. 115(1) (d)(v). Smithers J. also referred to Cook v. Crawford, saying that his reasons for rejecting the argument of invalidity in that case were "relevant to the issues now before the court." At p.497 his Honour referred to the "question of principle" then before the Court "as arising in respect of a rule which confers on Federal Council the power to make any rule amendment or new rule by a two-thirds ' majority of members upon a postal reference to the members" (of Council) "requiring their vote by post ... The immediate question is whether there is anything incompatible with the provisions of the Act or the Regulations thereunder in a rule which confers on a collective body of an organization such as a Federal Council a power so to make and amend rules without reference to the branches or ~- membership of the organization." At p. 499 Smithers sett Se actin meena yen ECLA Iphe mai sooheat macaediane aipiemmiaieaaietanmintaracties hadlianeedan ecesaet peed earth) ies teeta inne meena anaans ty yoscerc ee . tates ree ee ee ee, woo ee ake WT oat peer Poles SOT ATT ae be 31. J.referred to the importance of reg 115(1)(d)}(v): "The regulation states in imperative tones that the rules shall provide for the control of committees of the organization by the membership. Clearly, if there be adequate control, the fact that a paticular body is empowered to make and amend rules would not offend s. 140(1)(c)." His Honour proceeded to list, at pp. 499 - 500, relevant features of the subject rules. He referred to the arguments in favour of, and opposed to, a requirement for the participation of members in rule changes; categorizing those arguments as being merely a debate about what was desirable. He concluded at pp. 502 - 503: "In my opinion it is fair to say that in all the debate it has not been demonstrated that there is absent from the total situation established by the rules of the organization, some quality, regarded as so essential to representative or participating democracy that the situation can be said to be one lacking regard to the ideai of democracy and membership participation, in the context of the conduct of the affairs of the organization in accordance with the purposes of registration of the organization under the Act: ... The vital consideration in democracy is the degree of electoral accountability of the government to the membership. Other controls are but instruments for use when accountability has failed to achieve its objective. Where the electoral system is soundly devised, as in the case of this organization, the norm is that representative government will adequately reflect the will of the electorate. Controls such as plebiscites which are onerous and expensive exercises are appropriate only where there is a body of the membership sufficiently moved to challenge the government. In this organization, with available avenues, through the branches, and the Federal Executive, for the application of pressure to the Federal Council, and the plebiscite provisions in ' reserve, there are controls of significance. weer r Te 32. Also, despite the width of subject matter with respect to which rules may be made by the Federal Council it is an important consideration that, in a practical sense, the problem before the court concerns only those rules which might be made, which although unacceptable to some members, are not unreasonable oppressive or unjust. Those which are, offend s 140(1) and are invalid ... Ail the rules which are made reflect the view of a representative body and are thus the product of a system in which there is a significant element of democracy. Accordingly it is difficult to make a judicial finding that, in the absence of conditions precedent to the exercise of the authority of Federal Council to amend rules and make new rules, the rules of the organization contravene the provisions of s 140(1)(c). In my opinion no such finding could or ought to be made." Evatt and Northrop JJ. delivered a joint judgment. They referred to numerous authorities in relation to s. 140(1)(c) and analysed in some detail the Full Court judgments in Cook v. Crawford. Their Honours expressly held that the opinions expressed in that case by Smithers J. - in the Full Court - and by Evatt J. - at first instance - should be preferred to the reasons actuating Keely and Sheppard JJ. in the Full Court: see p. 519. I have referred at some length to the reasons in Wright v. McLeod because it is important to determine whether there was majority support in that case for a principle which is inconsistent with the decision in Cook v. Crawford. Only Evatt and Northrop JJ. said, in terms, that the latter decision was erroneous but both Bowen C.J. and Smithers J. adopted positions incompatible with its correctness. In Cook v. Crawford Keely and va ryyan — 33. Sheppard JJ. did refer to the plebiscite provisions in the rules but otherwise they did not engage in the task of identifying, and weighing the significance of, those features of the rules which would be relevant to the determination of the questions whether the Federal Council was democratically controlled and whether the members had appropriate safeguards against abuses by Council of its power. The basis of their judgments was that rule amendment by a small committee, such as Federal Council, without reference to the membership, conflicts with s.2(f) because it discourages full participation by membes in an important affair of the organization. That absolute position cannot be reconciled with acceptance of the proposition, by each of the majority in Weight v. McLeod, that - at least under some circumstances - such a provision may be valid. The applicants concede that a Full Court of this Court is not bound to follow an earlier decision of a Full Court. It will, of course, usually do so; perhaps even without permitting the correctness of the earlier decision to be re~argued: see Pyneboard Pty. Limited v. Trade Practices Commission (1982) 39 A.L.R. 565 at p. 567, Federal Commissioner of Taxation v. Kearney (1985) 85 A.T.C. 4183. But the Full Court which heard Bright v. McLeod did permit argument as the correctness of the approach taken in Cook v. Crawford. It would appear that the Chief Judge took the unusual course of constituting a five member Court for that very purpose. a qos np > Js antes ae >? at 34. Notwithstanding their concession that the Court which heard Wright v. McLeod could have overruled the earlier decision, the applicants submit that it should not be regarded as having done so; because a majority did not expressly say that the earlier decision was overruled. In my view this is too stringent an approach. In Consett Industrial and Provident Society Limited v. Consett Iron Company Limited £19223 2 Ch.135 the English Court of Appeal had to determine whether its earlier decision upon the precise question now before it had been overruled by an intervening decision of the House of Lords. At pp. 166-167 Lord Sterndalie M.R. said: "T think it essential to bear in mind the true meaning of the case being overruled, because if the decision on the identical point before us arising out of the construction of the identical Act is not displaced it binds us although the reasoning upon which the decision is founded may have been so disapproved and displaced as to make the case no authority upon the construction of a distinguishable though somewhat similar Act. I do not in the least mean to say that the express term overruled need be used, but the effect of the decision of the Court must be such as to show that the former decision cannot stand even on its own facts and in respect of the Act on which it was decided. It is by no means uncommon for a superior Court to say that a case which it is considering is wrong in its reasoning, and cannot be used as an authority in other cases, but that on its own facts it can be supported, and this may be expressed by implication as well as expressly. In such a case the decision remains an authority on its own facts and circumstances, but they must be the same, and a very slight difference will take a subsequent case out of the authority of the former one." 35. It is arguable that, in Wright v. McLeod, Bowen C.J. preserved the continuing authority - on its own facts,that is upon the particular rule - of Cook v. Crawford; notwithstanding his adoption of reasoning inconsistent with that underlying that decision. But this cannot be said in respect of any of the other judges constituting the majority in Wright v. McLeod. Smithers J. clearly maintained and applied his dissenting position in Cook v. Crawford - see especially pp 494-495 ~ and, as mentioned, Evatt and Northrop JJ said, in terms, that the majority position in that case was erroneous. Applying the test enunciaced by Lord Sterndale, it must be said that the effect of the decision in Wright v. McLeod is that Cook v. Crawford "cannot stand even on its own facts and in respect of the Act on which it was decided". I must determine the issue of validity under s. 140(1)(a) and (c) by reference to the approach adopted by the majority in Wright v. McLeod and disregarding the determination of invalidity in respect of a very similar sub-rule of this particular organization in Cook v. Crawford. There was no submission on behalf of the applicants that, applying Wright v. McLeod, r. 27(4) should be held to be invalid. I think that this was realistic. It is true that decisions of Federal Council - including decisions relating to rule-changes - may be made by a simple majority. But Federal Council consists of seven Federal Vice-Presidents and seven other councillors (r. 21(1)) each of whom is elected by a branch for a term of two years (r. 48(1)). As already indicated, the voting ry 8 ee wee ee Ye ne vores sire oo mee OOF 36. entitlement on Council of particular branches reflects the size of the membership of that branch. There is no suggestion that Council is itself undemocratic in composition (cf. McLeish v. Kane (1978) 22 A.L.R. 547, Hodder v. Australian Workers Union (Pincus J., 2 August 1985, not reported). These factors ensure a high degree of accountability to the membership. Moreover, r.26 provides for a referendum of the members of the organization, at the instance of a majority of the members of any two branches in any two States attending a special branch meeting, to consider whether any decision of the Council shall be disagreed with; the decision of the members superceding that of Council. Some might argue that the rules of the organization ought to make some provision for direct participation of members in rule changes or that they should require a two-thirds, or other extraordinary, majority of Council to change the rules. But such arguments would be contentions as to desirability. It cannot be said that a rule permitting a committee, constituted as is this Council, itself to amend the rules of the organization is unreasonable. The Court must bear in mind the principle that, subject to the constraints imposed by or under the Act, it 15 for the members of the organization, and not for the Court, to determine the content of its rules: see Wiseman v. Professional Radio and Electronics Institute of Australasia (1978) 35 F.L.R. 24 at pp. 41-42, Municipal Officers' Association of Australia v. Lancaster (1981) 37 A.L.R. 559. In particular, it must be remembered that, as Deane J. pointed out in Lancaster at p. 589: "The Court has no authority generally to supervise the content of the rules or to re ar ae sws4toae ae ners turk. weap o crissy Be ee 37. require that the rules comply with what those constituting the Court might see as preferable, desirable or ideal." Finally, in relation to ss. 140(1)(a) and (c), the applicants put a special argument. They say that, whatever may be the reasonableness of a rule allowing Federal Council a general power of amendment of the rules, special considerations arise in relation to amendments which may affect the existence or operations of branches. They rightly point out that the rules of this organization make elaborate provision for the existence and government of its branches and that branches play a fundamental role in the selection of persons to manage the organization's affairs at a national level. Branches may discipline members (r. 13) and may settle local disputes (r.64). There is no question of their significance. But it is another matter to say that, because branches are important, a rule which permits Federal Council to amend the rules in such a manner as adversely to affect the continued existence or operations of branches, or of a particular branch, is necessarily unreasonable. The submission is reminiscent of that put in Imlach v. Daley (Evatt, Northrop and Beaumont Jd., 23 April 1985, not reported), a case involving the power of the National Council of the Hospital Employees' Federation of Australia to alter the boundaries of the Tasmanian branches of that organization. The significance of those boundary changes is graphically illustrated in the dissenting judgment of Beaumont J. but nonetheless Evatt and Northrop Ji upheld the validity of the rule. They were not prepared to ow eee ee - 38. impose any special limitation in relation to rule amendments adversely affectng branches: see pp 11-16 of their joint judgment, noting especially the statement at p. 13 in relation to branches: "... an organization, provided it complies with the requirements of the Act, the regulations and its rules, is able to mould its internal structures as it thinks fit." The decision in Imlach v. Daley requires me to reject the suggestion that a rule permitting a committee, such as the Federal Council in this case, to amend the rules of an organization in such a manner as adversely to affect a branch without reference to that branch or to the general membership is necessarily invalid. I do so gladly because it appears to me that any other approach would result in intolerable uncertainty. The operations of a branch, or of branches generally, might be adversely affected by rule amendments not directly related to their existence or operations. The limits of Council's power would be difficult to define. Moreover there may be other subject matters in the rules in relation to which some will see as strong a case for special requirements as to consultation as those relating to branches; for example the composition of the supreme governing body, members' voting rights or the qualifications required of candidates for office. The adoption of the applicants' submission in this case would lead toa cavalcade of invitations to members of the Court to impose their own value judgments as to the significance of particular aspects of the rules of organizations. It is much more satisfactory to spears e-> ie ahh eee ea et <i ' weer ee so ter 39. eschew advance limitations - save for the requirement that the selected rule amending body be democratically controlled - and to consider in the particular case under s. 140 any complaint that the resultant rule is unreasonable or other otherwise contrary to law. The applicants further submit that r. 27 (4) contravenes s. 140(1)(d) in that it permits the abolition of a branch without -at the least - consultation with the membership of that branch; thereby, it is said, failing "to provide for the autonomy of a branch in matters affecting members of the branch only." In Imlach v. Daley it was held that s. 140(1)(d) applies only with respect to organizations which, through State branches, participate or seek to participate in a State industrial and conciliation system. Upon that approach it is difficult to apply s.140(1)(d) to the Plumbers and Gasfitters Employees' Union, which in the two most populous States, lacked branches at the relevant time. However, the facts recorded by Evatt J. in Cook v. Crawford show that, historically, the Sydney and Newcastle branches of the organization had participated in the New South Wales industrial and conciliation system. I will assume, therefore, for the purpose of this submission that s.140(1)(d) has application to this organization. In Morris v. Federated Liquor and Allied Industries Employees' Union of Australia (1978) 35 F.L.R. 60 the point was made, at pp.68-70, that the failure of a particular rule of an aR IE, coer emma rica anos neemaaiee al aie tied oe rr eo re ~~. ott 40. organization to contain a particular positive provision required by the Act - for example by the second limb of s.140(1)(a) or by s.140(1)(d) -logically cannot result in the invalidity of that rule. Section 140 provides that the rules of the organization, considered as a whole, shall not fail to make the specified provisions. If there is an omission of a required provision, the invalidity must attach to the rules as a whole. In this case it is not argued that the rules, as a whole, are invalid. Nor are they. Whether one considers the version of the rules which existed prior to 28 September 1984 or the version which resulted from the purported amendments of that day, these rules do provide for the autonomy of branches - that is, of those branches which exist under the particular version - in relation to branch matters. There is no warrant, in my view, for reading into s. 140(1)(d) a limitation upon the power of the rule amending body of an organization to create or to abolish - in accordance with the normal procedure for rule amendments - branches which, whilst in existence, are autonomous and thus able to meet the purpose for which - according to Imlach v. Daley - s. 140(1)(d) was added to the Act. Evatt and Northrop JJ said in that case at pp. 34-35: , «+» Paragraph (d) was not enacted for any purpose to affect relationships between an organization and its branches except to a limited extent where an organization, through its branches, participated, or desired to participate, in State industrial systems .... What is intended ... is that all matters arising out of or in connection with the participation of a branch in a State industrial system in theory affects directly mre rage wwe toate cd Lou Re eur oye reo 4l. members of that branch and it is in all those matters where autonomy is to be provided for, and not in any other case." In my view each of the contentions of the applicants relating to power should be rejected. It should be held that y.27(4) was on 28 September 1984 a valid rule, authorizing Federal Council to adopt the resolutions under challenge. Participation by Sydney delegates Mr Lane and Mr Batchelor, the two delegates of Sydney branch, participated in the proceedings of Federal Council relating to the abolition of the Newcastle and Geelong branches. Mr Lane took a leading part in the discussion. Both delegates voted for the resolutions to achieve abolition. The applicants contend that they had no right either to participate or to vote; that, at the time, Sydney branch was unfinancial. Rule 22(3) of the organization, dealing with meetings of Federal Council provides: "3, Subject to the approval of a majority of Vice-Presidents and Federal Councillors representing financial States or Branches, Federal Vice-Presidents and Federal Councillors representing unfinancial States or Branches may take their seats on Council." The rules contain no express exclusion of representatives of unfinancial States or Branches but this must be implied by r. 22(3). No resolution of approval was passed in respect of the meeting of 26-28 September 1984. Nateteneeeen! al year aaa a arr 7s t Par] 42. The applicants do not contend that the Sydney vote was critical to the fate of any of the resolutions. It is agreed that the voting figures are such as to provide a majority in favour, after deduction of the Sydney vote, even for the "in principle" resolution of 26 September 1984, and a fortiori the resolutions of 28 September against which only the Newcastle votes were cast. But it is argued that, nonetheless, the participation of the Sydney delegates vitiated all of these decisions. I think that it is correct to hold that, if the Sydney branch was unfinancial at the time, the effect would have been to invalidate all of the relevant resolutions. Mr Lane was the leading proponent of abolition, at least of the Newcastle branch. He instigated the Sydney branch resolution and he moved the motion for the "in principle" decision in Federal Council on 26 September. It is true that the resolutions of 28 September, including those which actually effected the relevant rule amendments, were moved by others - although some were seconded by Mr Batchelor - but Council might well have regarded these resolutions as doing no more than carrying out - and applying to Victoria - the principle which had been established two days earlier by Mr Lane's successful motion. In Lynch v. Hodges (1963) 4 F.L.R. 348 the Commonwealth Industrial Court held to be invalid a resolution of a committee of management of an organization moved by a person who was subsequently held not to be a member of the committee and therefore not entitled to participate in its proceedings; and this notwithstanding that his 43. vote was not critical. In that case the Court declined to say that the active participation of a stranger in a meeting necessarily vitiated its proceedings - and see the Court's later decision in Steuart v. Oliver (No. 2) (1971) 18 F.L.R. 83 at p. 84 - but it was pointed out that the chairman of the meeting should have declined to accept the motion; and that, had this been done "it is impossible to say that the motion would have been moved by anyone else". This consideration was held to he sufficient to vitiate the motion. Lynch v. Hodges was applied by a Full Court of this Court, in Allen v. Townsend (1977) 31 F.L.R. 431 at p. 482, in relation to a motion carried unanimously but which was moved by a person whom the Court held not to be entitled to participate in the meeting. In the present case the critical resolution was moved by Mr Lane. If the chairman had rejected the motion on the ground that Sydney branch was unfinancial and that the meeting had not granted approval under ¥.22(3) to his participation, it is impossible to say that the meeting would have granted that approval or, if not, that the motion would have moved by someone else. Without Mr Lane's advocacy of the motion, it is impossible to say that, if moved, it would have been carried. Accordingly, it is necessary to consider whether Sydney branch was in fact unfinancial at the date of the meeting. Rule 40 provides for the payment to branch secretaries or other authorised branch representatives of all enrolment fees, contributions, levies and fines payable by members. Rule 41 poe qe eer . ta ow F coun cea sr ee Me -- wt te ee mere eee epee ee ee cn ee pron 8 . sf oy to eesti a ana aie 44. deals with the application of funds of the organization. It authorises, inter alia, the making of payments in connection with any matters provided for by the rules. Rule 42 deals with the management of branch funds . Sub-rules (6) and (7) provide for the payment of what were during the hearing generaily referred to as "capitation fees": "6, At the close of each financial period a sum not exceeding twenty (20) per cent as decided by Council of the total receipts from Branch contributions shall be paid into Head Office prescribed funds, the balance remaining in the Branch General fund... 7. Notwithstanding anything contained in these Rules, payments to Head Office shall be the first charge on all Branch funds other than those specially raised for specific purposes." The "financial period" referred to in sub-rule (6) is the branch financial period, which closes on 31 March each year: see rv. 38. | Evidence was tendered relating to the financial position | of Sydney branch relative to head office. After their expulsion 4 on 2 May 1979 the Sydney officials continued to occupy the Sydney branch office in Sussex Street and to retain custody of the membership records. The federal secretariat, on behalf of the Federal Council, set up a new office in Pitt Street and appointed two federal organizers to work from that office. Their salaries, and the costs incurred by the new office, were paid from federal funds. Some income was received but it was insufficient to cover outgoings. That position continued even 45. after the 1981 elections. Head office continued to provide financial support upon the understanding that Sydney branch would repay the funds expended as and when it was able. These funds were referred to in the evidence as a "loan" but, as the respondents point out, they do not really have that character. In point of law the Sydney branch was a part of the legal entity which is the federal organization. There could be no action at law for recovery of moneys by one organ of the legal entity against another. The payment made by the federal secretariat represented applications of the funds of the union for a particular purpose, the management of the Sydney branch. Such applications were authorized by r. 4l(a). It is understandable that Federal Council wished to obtain an undertaking that Sydney branch would, when possible, refund these moneys to the federal fund but that undertaking could not constitute a legal obligation. A question arises as to the meaning of the word 'unfinancial' in vr. 22(3). For the reasons I have expressed, the word ''unfinancial' does not refer to the condition of being liable at law. The term is not defined by the rules but it should be construed in the light of the rules. The only respect in which the rules impose an obligation upon branches to pay money to head office is in relation to capitation fees. The rules make no reference to the sort of informal pay~-back arrangement which Sydney branch has made. The condition of being 'unfinancial' should, therefore, be read as the condition of not soya aero fn Se ee hoe cae yeeros > 46. having paid the capitation fees required by the rules. This isa familiar use of the word in the rules of voluntary organizations, whether referring to the position of individual members or of component organs. No question arises in relation to the payment by Sydney branch of the capitation fees falling due in the years prior to the financial year 1979/80. Neither is there any doubt that the capitation fees for 1981/82, 1982/83 and 1983/84 were paid before September 1984. The financial accounts for 1982/83 and 1983/84 - which were verified in evidence by Mr Gary Grahame, the Sydney branch auditor - show the payment of the appropriate sums in respect of the first two of those years, identified as "per capita" payments, and quantify the amount owing for 1983/84. A branch payment voucher and head office receipt shows that the fee for that last year was paid on 16 July 1984. Capitation fees for 1979/80 were payable by both of the offices then operating. The Sussex Street obligation was $28,490. Pursuant to the order made by Evatt Jd. in Cook v. Crawford, this amount was paid by three instalments between 5 May 1981 and 3 August 1981. The amount due by the Pitt Street office for the year 1979/80 was $11,781. For 1980/81 the amount was $17,692, making a total of $29,473. At a meeting held on 13 July 1982 the Sydney branch committee resolved to confirm its liability for these Siar amaad weyers ga ere es a7. amounts and that they be "incorporated as expenditure and consequently as a liability to Head Office in the financial statement for the nine months ended 31st March 1982." They were added in the accounts to the amount of the funds expended by head office on behalf of Sydney branch, thereby creating a total "balance owing to head office" - excluding the 1981/82 capitation fees since separately paid - of $76,809. Between that date and 16 July 1984 two payments totalling $30,000 were made. They were identified simply as "part payment of loan "or "payment off loan". If they should be regarded as payments of the outstanding capitation fees, it is obvious that all capitation fees were paid prior to September 1984. I think that the two payments totalling $30,000 must be applied in the first instance to capitation fees. Rule 42(7) makes "payments to Head Office" - that must mean payments to head office under the rules, or capitation fees - a "first charge" on all branch funds other than those raised for a specific purpose. It follows that the general branch funds applied in reduction of 'the overall obligation to head office were funds charged with this specific obligation. It would not have been open to the branch to tender those funds in satisfaction of its promise to repay the funds expended by head office rather than in satisfaction of the burden with which they were charged. Those funds, to the extent of $29,473, were impressed with a particular obligation and the payments, to that extent, must be taken to have been in discharge of that obligation. The parties did not TTR ee pti coven sheers her 48. purport to act upon a different basis; on the contrary, according to the evidence of Mr Crawford, the "understanding was that the first charge on all payments from the Sydney branch would be for their per capita payments". The general rule is that, in a case where a person owes money to another on a current account with a multiplicity of entries and a payment is made on account of the debt generally without any appropriation by either debtor or creditor to any particular item, the payment is deemed to he allocated to the discharge of debit items in the order in which they arose: see Devaynes v. Noble (Clayton's case)(1816) 1 Mer. 572 at pp. 608-609; Re Footman Bower & Co.Limited [19613 1 Ch. 443 at pp. 449-451. If, contrary to the view I have expessed, there was no allocation by force of the rules or by the "understanding" referred to by Mr Crawford of that part of the $30,000 necessary to discharge the capitation fee, the application of this principle would lead to the same result. The 1979/80 capitation fee became due on 31 March 1980, by force of r. 42(6), and the 1980/81 capitation fee on 31 March 1981. These dates were both before the election of any Sydney branch officials capable of accepting the "obligation" to repay federal funds expended for the benefit.of Sydney branch. The first formal repayment commitment appears to have been a further resolution of the Sydney branch committee of 13 July 1982. tt rer ay tee ore whee Soo es ween ved te whee Oe grein ress yrewrats om ey a 7 eo: rege gee fe ee TTF a 49. Upon the evidence it cannot be said that, at 26-28 September 1984, Sydney branch was 'unfinancial' within the meaning of r. 22(3). Its representatives were not disqualified from taking their seats at the Council meeting held on those days. No invalidity arises from their participation in the relevant resolutions. Geelong branch - notice and natural justice As previously stated, the decision of the Federal Executive to call the extraordinary meeting of 26-28 September 1984 referred only to the agenda items submitted by Sydney branch, which items related only to the future of Newcastle branch, and to one other unrelated item. In fact, at the beginning of the meeting, Council adopted an agenda containing several additional items. Even at this stage no reference was made to the Geelong branch. The motion moved by Mr Lane on the first day of the' meeting referred only to the position in New South Wales. There 1s nothing in the minutes of that day to suggest that any reference was made by any person to the situation in Victoria. So far as appears, this subject first came up on 28 September when Mr Crawford moved his motion to "complete the circle" by establishing State branches in both New South Wales and Victoria. No notice of the resolution was given to Geelong branch. The members of that branch had no direct representative on Council. They joined with members of Melbourne branch in electing three persons to sit on Council. Under these ' pr re re npn eee ee Te --p-- an "50. circumstances, the applicants submit that the resolutions, insofar as they affect the Geelong branch, are invalid: first, because rio notice of this subject matter was given to federal councillors and, secondly, because Council afforded to Geelong branch no opportunity to be heard. Rule 22(1) provides for biennial meetings of Federal Council. Rule 22(2) provides that Council "shall meet at other times and places as the Federal Council or the Federal Executive may determine". There is provision, in r. 22(4), for the preparation and publication to branches of an agenda for biennial meetings; although, even then, Federal Council can,at a biennial meeting and without notice to anyone, add any other matter to the agenda which it considers to be urgent. The rules make no provision for a published agenda in relation to extraordinary meetings convened under r. 22(2). Notwithstanding that omission, the applicants contend that a notice convening such a meeting must specify the proposed business and that the Council is limited to that business at that meeting. This is implied, it is said, by vr. 32(4)(f). Rule 32 deals with the duties of officers of the council. Sub-rule (4) provides: "4, The General Secretary shall - (f£) summon members to all meetings and give intimation of same to all Branches; ..." Sr a win wf nr ee ee one v rs noe ren sya 5l. The applicants submit that "members", as the sub-paragraph applies to meetings of the Federal Council, includes members of the Council and that it is implied in the word "summon" that the notice will state the business to he transacted. There is authority for the proposition that a notice summoning a meeting of members of a branch, in order to be valid, must sufficiently indicate the business intended to be transacted: see Campbell v. Higgins (1957) 3 F.L.R. 317 at p.327, Winter v. McAdam (1957) 1 F.L.R. 210 at p. 211, McLure v. Mitchell (1974) 6 A.L.R. 471 at p. 489. But these cases are distinguishable from the present. As Evatt J. pointed out in~ Cook v. Crawford at 52 F.L.R. 36, the reason for the rule is: "to enable any member receiving 1t to determine in his own interest whether or not he ought attend the meeting." This reason has little application to a meeting of a committee whose members are under an obligation to attend a summoned meeting, not to protect their own interests but to make decisions for the good government of the union. There are cases in which the rules of an organization require that a summons to a meeting of a committee be accompanied by an agenda and that the business be limited to the items on that agenda: see, for example, Magner v. Fowler (1979) 46 F.L.R. 78 at p. 99. The evident object of such a rule is to enable the summoned delegates to reflect upon the proposed business and, ae qr eae, Hares te rele on ion Cals heer Selle ah Rete Se ' 4 et oe 52. perhaps, to consult with those whom they represent as to the position they should take in respect of particular matters. As pointed out, in relation to biennial meetings of the Federal Council of the Plumbers and Gasfitters Employees' Union, there is such a provision. There is no such provision in relation to extraordinary meetings and, in my view, the use of the word 'summons' does not by implication impose such a restriction. I say this for three reasons. First, there is nothing in the ordinary meaning of the word "summon" to imply notice of business. The primary meaning of the transitive verb cited in the Shorter Oxford English Dictionary is: "to call together by authority for action or deliberation". Secondly, the duty cast upon the General Secretary by r. 32(4)(£) applies as mutch to biennial meetings as to extraordinary meetings of council. In relation to biennial meetings the implication would conflict with the express terms of r. 22(5) permitting Council to consider business not upon the published agenda. Thirdly, an implication depends upon intention. But the fact that r. 22(5) does confer upon the Council in biennial meeting liberty to consider urgent matters not upon the agenda indicates that those responsible for the form of the rules have not considered that the advantages of reflection, and consultation, upon proposed agenda items should outweigh the disadvantage of inflexibility which would result from such a limitation. The view has been taken that Federal Council should be free, in biennial meetings, to determine matters considered by it to be urgent, although arising without notice. It is difficult to see any reason why a different policy ST po eg ee 53. should have been adopted by the draftsman of the rules in respect of extraordinary meetings. In relation to the natural justice question the applicants point out that the members of the organization are organized into branches; as such they have rights and duties under the rules vis a vis other members of the branch and, in common with those other members, vis a vis the organization as a whole: see Allen v. Townsend (1977) 31 F.L.R. 431 at pp 440-441. They say that it follows that members of a branch have a legitimate expectation in the maintenance of their branch and that the rules of natural justice therefore require that those members be afforded an opportunity to be heard before the branch is abolished. It is not contended that the branch, as distinct from its members, has any such right. This could not logically be put. The branch is not a legal entity but a mere administrative unit of the organization. The branch itself is incapable of harbouring any expectation, legitimate or otherwise. There are examples of the application, during recent years, of the requirements of natural justice to situations which might not at one time have been thought to attract those requirements. But, so far as I am aware, there is not yet any authority for the proposition that, in considering an amendment of the rules of an organization such as a trade union, the rule making body is bound by the rules of natural justice to give to persons potentially affected by the amendment an opportunity to Oe <a wera _T or 'ye > nN 54. be heard. As it seems to me, no such obligation - at least in relation to amendments affecting persons only in their capacity as members, as distinct from in some other capacity such as the holder of an office or in relation to property interests - should be imposed by the courts. Those who belong to an organization have an entitlement that it be, and an expectation that it will be, governed in accordance with its rules, as they are from time to time. Those rules will normally, and in the case of an erganization registered under the Conciliation and Arbitration Act - see reg. 115(1)(d)(xiv) - must, contain provisions for amendment. The entitlement and legitimate expectation of members is that any amendments will be made in accordance with those provisions. In some cases those provisions may require advance notice to, or consultation with, members generally or particular organs of the organization. In such cases those requirements must be satisfied, but as a matter of due process rather than of natural justice. Where such provisions have not been adopted, there can be no legitimate expectation that, nonetheless, the rule amending body within the organization will act as if they had been. The remedy for those who would wish to avoid ill-considered tampering with any provisions in the rules which they regard as having special importance is to attempt to ensure by rule amendment that those provisions may not be amended except after appropriate procedures. One cannot but feel some sympathy with those members of the Geelong branch who favour its continued independent existence rain ket Alf. Sila wares Set pneeeiteennend Lcenacmndietiaremmaeertoan re _ wet aati edatan-tacerueeieety paies <i ay ae ' mo oar Yo . 55. and who may feel disappointed at the decision of Federal Council to abolish the branch without prior public notice or consultation with branch representatives. But I do not think that either of these omissions results in invalidity. Newcastle branch: unauthorized purpose Finally, it is said by the applicants that the decisions of Federal Council, relative to the Newcastle branch, are invalid because, in participating in those decisions, Mr Crawford and the representatives of the Sydney branch were actuated Dy an unauthorized purpose. No claim to that effect was made by Mr Masterson at the time or, indeed, by the applicants when, on 3 and 4 July respectively, they filed their Points of Claim in the two proceedings. However, at the commencement of the hearing counsel for the applicants obtained leave to amend the Points of Claim, in each casé, so as to add such an allegation. The alleged purpose was identified by counsel, upon the second day of the hearing, as being "in some way to punish the Newcastle branch and its members and officers and/or to advantage the Sydney branch". At various stages of the hearing other motives were suggested but they have not been pressed and I think that the substantial question in relation to this aspect of the case is whether the three named delegates were influenced by either or both of these motives. . ey : aes om, 56. A threshold question arises as to whether the possession of an ulterior purpose by three members of the Council would vitiate the decision of the whole Council. This matter has not been argued; it has simply been assumed that it would. Without deciding the point, and having regard to the voting figures on the "in principle" resolution of 26 September and the leading roles played in relation to the resolutions by Mr Crawford and Mr Lane, I propose to proceed upon the same assumption. Messrs. Crawford, Lane and Batchelor each gave evidence as to the reasons why they voted in favour of the relevant resolutions. Mr Crawford gave two main reasons: because there was no alternative proposal as to how the reorganization of the union could be achieved - by which he explained that one of the State union officials would have to work in Newcastle; and because a single State branch was the most suitable form of organization to meet the requirements of registration under the New South Wales legislaion. Mr Lane gave similar reasons. In relation to the first matter, he said that he believed the rule changes to be in the best interests of the organization because the changes "were necessary to implement the agreement with the State union which agreement was the best agreement possible to make with the State union at that time. I believed that the agreement with the State union was the only way to avoid conflict between the 2 bodies in the future". He referred to the difficulty of representation in the Industrial Commission of New South Wales of Newcastle members covered by State awards. He ve poem opis oa raeraieeeaneel hart) et er ee ee eee 57. added two other reasons: complaints that he had received from members about the necessity to obtain transfer between branches when moving across the branch boundaries in changing from one job to another within New South Wales and "the combination of resources makes for a smoother and more efficient administration of the organization". Mr Batchelor simply said that he believed that the decisions were necessary to implement the agreement for reconciliation between the federal organization and the State union. Both Mr Lane and Mr Batchelor denied that their decisions were influenced by considerations of self-aggrandisement. I accept those denials. Nobody has contested Mr Crawford's view that reconciliation between the two unions was highly desirable, from the viewpoint of the federal organization. Nobody has suggested that it might have been achieved upon terms better than those specified in the draft agreement considered at the stop work meetings. Those terms required that the federal organization employ Messrs Shooter, Campbell and Gemmell. But Sydney branch could not afford to employ all three men. It followed that one organizer had to be employed by Newcastle branch. But the members of Newcastle branch, at their stop work meeting of 27 June, had rejected that course. Rule 26 provides that all decisions, inter alia, of Federal Council "shall be binding on the members and Branches of the Union". This provision may extend to permitting Federal Council to instruct a branch that it must employ a particular person as an organizer but such a course --—-- 5 earns 58. might be thought unsatisfactory in practice. The organizer would be required to work under the direction of branch officers and a branch committee initially opposed to his employment and possibly further antagonized by the Council directive. Any who might have taken that view might well have concluded that, if the agreement with the State union was to be implemented, the autonomy of Newcastle branch would have to be sacrificed. The decision to abolish a branch, over the issue of the employment of one organizer, is criticised in argument as draconian; but if it is en in ila BEOpEY Conmbext, as the anly aaparent method of saving Ls ied 'ti a the agreement, it is easily understandable. In considering the question whether the evidence of Messrs Crawford, Lane and Batchelor relating to their reasons for voting should be accepted, it is relevant to note that, at no stage, did Mr Masterson or anyone else from the Newcastle branch suggest any alternative course of action. On 9 May 1984 Mr Crawford went to Newcastle for the specific purpose of explaining the 12 points adopted in the discussions with the State representatives. Mr Masterson was left in no doubt of Mr Crawford's opinion that it would be essential to employ one of the organizers in Newcastle. Neither then nor at any later time did he attempt to argue that this would not in fact be necessary and he conceded in his evidence in these proceedings that, to his knowledge, Sydney branch could not bear the whole of the burden. Mr Crawford had mentioned to those present on 9 May the possibility of abolishing the Newcastle branch but he asked them ail Sas ~ Ce a te oy So ian Sl acelin abate A woo 53. to consider what other options were available. It must have been obvious that Mr Crawford was inviting suggestions as to how the agreement could be implemented without affecting the status of Newcastle branch. But no such suggestions were ever made, at that time or at any later time and despite the endorsement of the agreement first by the Federal Executive and then by the Federal Council. The threat to Newcastle was implicit in those endorsements. It became explicit on 14 August when Sydney branch resolved to request the rule amendments necessary to abolish Newcastle branch. Still no alternative was suggested. At the Federal Council meeting itself Mr Lane invited suggestions from Mr Masterson. He received none. It is not difficult to see why those members of Federal Council who placed primary importance upon the implementation of the re-unification agreement - as did Mr Crawford, Mr Lane and Mr Batchelor - should have concluded . that they had no alternative other than to support the resolutions. During the hearing some questions were asked relating to the question whether in fact there was any alternative. That question is of little significance. The fact that there exists an alternative, unperceived by anybody at the time, logically cannot affect the acceptability of evidence by a witness that he m voted in a particuler manner because at that time he saw no alternative. But, in any case, the only alternative eventually pressed was the possibility of Sydney branch imposing upon its members a special levy to raise the salary for the additional ar wenn, ' acer' werersey pee we Tae ee toa 7 7 ots com h 60. organizer: see r. 12(4). Mr Lane said that this possibility did not occur to him at the time but that, in any event, there was already a levy imposed upon members. Upon the evidence, and given the attitude taken by the Newcastle members, 1t appears that Federal Council had, in a practical sense, little choice but to take the course which it did. Mr Masterson's attitude at the stop work meeting was that he would not attempt to influence the decision of the members but would faithfully carry out their decision. From one point of view, this attitude may be regarded as laudable; but there are occasions upon which leadership must be offered if disaster is to be avoided. The subsidiary reasons advanced by Mr Crawford and Mc Lane received little attention at the hearing. They were not suggested to be the primary cause of the attitude of these officials but I accept that they were generally held. That such reasons might fairly be regarded as legitimate is indicated by the almost unanimous decision of the Council to abolish the Geelong branch and have but a single branch in Victoria. The evidence affords no basis for the conclusion that Mr Crawford, Mr Lane or Mr Bachelor were actuated by any improper purpose in voting in favour of any of the relevant resolutions. This ground of challenge must also be rejected. -y rene "eo; 61. Discretion Counsel for the respondents submit that, 1f I were of the opinion that any of the resolutions were invalid upon formal grounds - the disqualification of the Sydney delegates, the lack of notice regarding the Geelong resolution or the failure to give to Geelong members an opportunity to be heard - I should nonetheless refuse relief upon discretionary grounds. Counsel point out that they appear on behalf of all members of the Federal Council, other than Mr Masterson, and that their clients desire to maintain the decisions. The alleged defects being curable by Council, it is said that no good purpose would be served in compelling reconsideration. In the view which I take the resolutions are valid. The question of discretion does not arise. I express no concluded view, but I doubt that I would have been persuaded to take the course urged upon me. It is not possibie to know whether, upon a reconsideration of the matter and after hearing anything further that might be put to them, a majority of the members of Council would wish to adhere to the earlier decisions. And in any event, as in the area of public administrative law, it is itself an important matter that decisions affecting others be made only in accordance with the law. ee REST rece ores ato ate rr or ' é ot \ o Orders 62. The proceedings have failed but the case for the applicants was clearly arguable. a may be said that the proceedings were instituted vexatiously or without reasonable cause. These are not cases in which it Accordingly, by force of s. 197A of the Conciliation and Arbitration Act, costs may not be awarded: see Brophy v. Mapstone (1984) 56 A.L.R. 135, Marsh v. Adamson (Full Court, 29 March 1985, not reported). The interlocutory injunctions made on 30 April 1985, staying the elections in respect of the new branches, will be dissolved and the Rules to Show Cause will be discharged. I certify that this and the Six a true preceding pages are copy of the Reasons for Judgment herein of his Honour Mr Justice Wilcox. ty One(6!_) Associate: YUGAAS a HeLa Date: 4 October 1985 Counsel for the Applicant: Solicitors for the Applicant: Counsel for the Respondents: Solicitors for the Respondents: Date(s) of Hearing: . A a | Mr R.J. Burbidge QC; Mr M. Moore, Mr L. Katz. Messrs Ryan Carlisle Needham Thomas Mr R.C. Kenzie QC; Mr A. North Messrs W.G. McNally & Co. 15/7/85, 16/7/85, 17/7/85, 18/7/85, 2/8/85, 9/8/85, 13/9/85. -¥s ys fe ee a sry ,oe wm et —P n ree