CATCHWORDS Industrial law - Conciliation and Arbitration - registered organisations - duty of officers - prohibition on using resources of an organisation during an election to support one group of candidates and or to denigrate another group of candidates - duty on officers to exercise powers conferred upon them bona fide for the purposes for which the powers are conferred. Conciliation and Arbitration Act 1904 5.141 LINDSAY JAMES TANNER and J.P, MAYNES, J. RIORDAN, r.W. SULLIVAN, R.J. WASSON, H. DARROCH and M. BOURKE V. No. 6 of 1985 Evatt, Northrop and Keely JJ. Melbourne 20 December 1985 at Tyie ~ Nat : 2D) " URE ene ' — sUe€ 59385 -, a as AUT CALA mr 'rok vi i wo ae IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V. No. 6 of 1985 wee ew INDUSTRIAL DIVISION BETWEEN: LINDSAY JAMES TANNER Applicant and g.P. MAYNES, J. RIORDAN, T.W. SULLIVAN, R.J. WASSON, H. DARROCH and M, BOURKE Respondents COURT: EVATT, NORTHROP AND KEELY JJ. DATE: 20 DECEMBER 1985 PLACE: MELBOURNE MINUTE OF ORDER THE COURT ORDERS THAT: 1. The interlocutory orders made herein be discharged. 2. The respondents Riordan, Sullivan, Wasson and Darroch be released from the undertakings given by them on 30 April 1985, 3. The rule nisi herein be discharged. (Settlement and entry of Orders is dealt with in 0.36 of the Rules of Court.) IN THE FEDERAL COURT OF AUSTRALIA ) } VICTORIA DISTRICT REGISTRY ) V. No. 6 of 1985 ) INDUSTRIAL DIVISION ) BETWEEN : LINDSAY JAMES TANNER Applicant and J.P. MAYNES, J. RIORDAN, T.W. SULLIVAN, R.J. WASSON, H. DARROCH and M. BOURKE Respondents COURT: EVATT, NORTHROP AND KEELY JJ. DATE: 20 DECEMBER 1985 PLACE: MELBOURNE REASONS FOR JUDGMENT EVATT AND NORTHROP Jd. Lindsay James Tanner ("the Applicant") 15 a member of the Federated Clerks Union of Australia ("the Union"), an organisation of employees under the Conciliation and Arbitration Act 1904 ("the Act"). The Applicant is attached to the Victorian Branch of the Union. By notice given on 1 April 1985, the returning officer gave notice that he was conducting an election within the Victorian Branch for the following offices, namely, President, Deputy Fresident, Vice President, State Secretary, Assistant State Secretary, State Councillors (17 in total), National Councillors (6 in total), First Alternate National Councillor, Second Alternate National Councillor and Third Alternate National Councillor. The notice called for nominations to be made at any time from 1 April 1985 and not later than 12 noon on 15 April 1985. The notice stated that if a ballot was necessary, a postal vote would be conducted and the ballot would open on 13° May 1985 and close at 9.00 a.m. on 27 May 1985. On 3 April 1985, the Applicant lodged his nomination as a candidate for the offices of Assistant State Secretary, for one of the offices of State Councillor and for one of the offices of National Councillor. In about October 1983, the Applicant had joined a group of members of the Clerks Union attached to the Victorian Branch who called themselves the Clerks Reform Group. There 1s no material before the Court identifying what this group was. No constitution or rules relating to the Clerks Reform Group were tendered in evidence. The description "Reform Group" is often adopted by a group which is opposed to those in control of any association or club, whether it be a sporting body, an educational body, a social body or any other type of body. The Applicant became active in the affairs of the Clerks Reform Group. That group supported candidates standing or intending to stand in elections within the Victorian Branch. To that end, the Clerks Reform Group prepared and distributed pamphlets within the Victorian Branch membership. In 1984, the Clerks Reform Group endorsed and supported the candidature of the Applicant with respect to offices within the Victorian Branch. On 20 March 1985, some two hundred pamphlets headed "The Rise of 'Reform Groups' in White-Collar Unionism" ("the F.C.U. pamphiet") were seen on a table in the first floor cafeteria of the T.A.B. at 1 Queens Road, Melbourne, being a place usually reserved as a distribution point of material to members of the Victorian Branch working at the T.A.B. At the foot of the last page of the F.C.U. pamphlet there appeared the logo of the Clerks Union, being a quill pen in an ink bottle and the letters "FCU" ina distinctive print. There appeared also the words "Issued by the Federated Clerks Union of Australia". From exhibits to affidavits filed ain these proceedings, it appears that the same logo and the same words appear on documents issued by the Victorian Branch of the Clerks Union, as well as documents issued by the Clerks Union itself. On 4 April 1985, there were still a number of F.C.U. pamphlets on the table at the T.A.B. at 1 Queens Road, Melbourne. The Applicant obtained copies of two pages of the Minutes of a meeting of the National Executive Committee of the Clerks Union which had been held on 31 January 1985 and 1 February 1985. It appears that the meeting was held under Rule 28(1)(b) of the Rules of the Clerks Union. Under that paragraph of Rule 28, seven persons were entitled to attend and participate at the meeting, namely, the National President, the Deputy National President, the National Secretary, the National Assistant Secretary and the National Vice Presidents from three of the eight Branches of the Clerks Union, namely, the Central and Southern Queensland Branch, the New South Wales Branch and the Victorian Branch. Under the same paragraph, a quorum consisted of three members, one of whom had to be the National Secretary. From the first page of the minutes, it appears that when the meeting commenced at 10.30 a.m. om 31 January 1985, six persons only were in attendance, namely, Mr. J.P. Maynes, the National President, Miss J. Riordan, the Deputy National President, Mr. T.W. Sullivan, the National Secretary, Mr. R.J. Wasson, the Assistant National Secretary, Mr. H. Darroch and Mr. M. Bourke. The first page records also that Mr. Higgins had recorded an apology but had indicated he would he present on 1 February 1985. It can be inferred that Mr. Darroch, Mr. Bourke and Mr. Higgins are National Vice Presidents from the three Branches just mentioned, but the two pages of minutes do not disclose which office is held by each of those persons. The second page of the minutes does not disclose whether it refers to matters occurring on 31 January 1985 or 1 February 1985. On that page, reference is made to the National President (Mr. Maynes) and Miss Riordan. Applying the presumption of regularity, it may be inferred that the National Secretary (Mr. Sullivan) was present. Those three persons would have constituted a quorum. It is not apparent from the two pages of the minutes before the Court whether any other members were present or not. The second page of the minutes contain the following minute:- "ITEM 4-PUBLICATIONS-REFORM GROUPS AND WHITE COLLAR NATIONAL PRESIDENT - said that there was increasing concern in the Labor Movement at the mushrooming of certain reform groups, particularly in the white collar field which is a vehicle now used by the extreme Left, the careerist elements associated with it and sometimes 'con merchants'. NATIONAL PRESIDENT - suggested there was a need to deal with this matter particularly as we were finding that various groupings were arising in our own Branches masquerading as reform groups. NATIONAL PRESIDENT - said that this had re-occurred in New South Wales. He said that it would be recalled that the core of large reform groups had included elements in the Shipping Section who were led, cajolled and coerced into the Waterside Workers Federation. He said that a similar group of relatively few individuals had been seeking to establish itself in Victoria. NATIONAL PRESIDENT - said the Union had a duty to the membership to address this subject, so that they were aware of the efforts of this and other unions and 50 that they could properly evaluate their worth. NATIONAL PRESIDENT - proposed that the National Executive Committee authorise a draft to be prepared and approved by the Officers at the earliest possible time. NEC_ RESOLVED 'That the report be received and the proposal endorsed.' " The F.C.U. pamphlet is a four-page document of close type with bold headings to pages, paragraphs and sub~-paragraphs. At the top of the first page there appears in red print in capital letters the words:- "A MIXTURE OF COMMS, CONS, AND CAREERISTS IN A POLITICAL POWER GRAB." There then appears in white print in capital letters on a black background the words:- "THE RISE OF 'REFORM GROUPS' IN WHITE-COLLAR UNIONISM" There is then set out in bold type between red lines the words :- "Bogus 'Reform Groups' inspired and run by Left extremists of all kinds - Marxists, Trotskyites, Anarchists - have sprung up in many white collar trade unions, especially in the Public Service." Five separate paragraphs making reference to so-called "Reform Groups" are contained on the first page. The first paragraph refers to the Clerks Union and the Australian Labor Party. The other paragraphs refer to activities within other organisations, namely the Administrative and Clerical Officers Association, the A.P.S.A., the Clerks Union, especially the Taxation Officers Branch and the N.S.W. Branch, the N.S.W. Nurses Association, the Insurance Employees Union, the N.S.W. Branch of the Insurance Employees Union, the Health and Research Employees Union, the A.B.C. Staff Association, the Theatrical Employees Union, the Australian Workers Union, the N.S.W. Branch of the Postal Workers Union, the Confectioners Union, the Pastry Cooks Union, the Storemen and Packers Union, The Victorian Roofing Industry Union and The United Firefighters Union. In a block at the bottom left of the front page in bold type are the words:- "FCU A TARGET (See Overleaf)". Pages two and three of the F.C.U. pamphlet form the inside pages and are set out as if they were one composite page. The top part of the three middle columns is headed:- "CLERKS UNION A TARGET". Under this heading are general comments relating to the N.S.W. Branch of the Clerks Union, the Victorian Branch of the Clerks Union, the Central and Southern Queensland Branch of the Clerks Union, the Taxation Officers Branch of the Clerks Union and the South Australian Branch of the Clerks Union. The left hand column is headed:- "CENTRAL & SOUTHERN QUEENSLAND BRANCH". Under this heading is a more detailed account of recent events in that Branch. The right hand column is headed:- "NEW SOUTH WALES". Under this heading is a more detailed account of recent events in that Branch. The bottom part of the three middle columns is headed:- "VICTORIA". Under this heading there appears the following:- "The Reform Group in Victoria was begun by two people: Lindsay Tanner, a solicitor at Holding Redlich & Co., former student left wing activist at Melbourne University, and now a prominent figure in the Victorian Socialist Left faction of the A.L.P., and, Jan Lacey, a former Public Servant who was active ina left wing Reform Group in the major Public Service union A.C.O.A. Lacey was seconded to the staff of a left wing union, joined the Clerks and began her activities again. The Reform Group is small, its members have never played an active role in the union. In 1984 Lacey challenged for a position on State Council and was soundly defeated in a secret postal ballot conducted by the Australian Electoral Office. She has since resigned from the F.C.U. Tanner has been joined by ex-Communist Party member Ian Fehring. Fehring is also a solicitor, who worked in the office of Zigouras and Co. John Zigouras has connections with the pro-P.L.0. Socialist Left leaders Bill Hartley, Joan Coxsedge and Tom Ryan of the anti-Hawke Food Preservers Union. OTHER ACTIVISTS Other members of the Reform Group inciude Socialist Left activist Kathy Houghton, also employed by another union, and Denise Crawford, daughter of the ultra-left President of the Victorian A.L.P., George Crawford of the Plumbers Union. She works in her father's office. Beyond that the Group has few members. Two women who are no longer union members have publicly distributed Reform Group propaganda, another clerical worker in yet another union office, one active A.L.P. member, who works in the motor manufacturing industry as a clerk, and that's about it. Tanner and Fehring have had to dredge up other left wing solicitors, one from a Zigouras Branch office in Shepparton, to find candidates. Some of them obviously joined the union recently just for this purpose. OQUTSIDE MONEY? On December 9 last year the Reform Group held a barbeque at Fehring's home, ostensibly to raise funds. The roll up wouldn't have paid for the chops! These 'fund raising' functions are a sham to cover the expenditure of substantial sums of money supplied from the Left outside the union. Given the Hartley-Zigouras connection (Hartley has praised the Reform Group on left wing radio 3CR) the Reform Group could gain access to the Libyan and Iragi funds which come into Australia and via 'friendship' groups. Fehring resigned from the Communist Party, along with most of its Victorian hierarchy last year. His group formed the 'Socialist Forum', because they said they needed to find a better way to advance Marxism in Australia, the Communist Party was not making enough progress. None of these people have done anything for our union or its members. They are solicitors, and officers of left wing unions. They want to control the Clerks Union to gain more political power for the Left in the A.L.P., the A.C.T.U. and the Trades Hail Council. They actively oppose Bob Hawke's leadership, the leadership of the A.C.T.U., and T.H.C. Secretary Ken Stone, They peddle unscrupulous lies about the F.C.U., trying to sow diversion and confusion among the members. They do not declare their real politics for all to see. Reform Groups can only succeed when union members are apathetic. If only 20% of the members return their postal votes, Reform Groups claim victory with 11% of the vote! Make sure you have your say in the running of the union. In the Branch elections cast your vote and return in the pre-paid envelope you will receive." The back page, with the exception of the logo and the reference to the Clerks Union, is set out in full:- "HOW DOES THIS AFFECT YOU AND YOUR UNION? The Union is only effective if it has broad unity among its members, and especially its officials. They should not have to waste time, energy and money fighting a politically motivated minority of union officials who see themselves as political operators. Employers must be faced with a' strong, united union. Given the chance they will play one group off against another. The same applies to the Union's dealings with the A.C.T.U., Trades and Labour Councils and Governments. Key issues like Workers Compensation, Health and Safety, Superannuation, and Lower Taxes demand a united response. Your job security depends largely on the Union. In the Vehicle Industry for example, the Union is directly involved with Government in planning for future stability and jobs. We are doing the same in the Airlines Industry where deregulation 1s now a hot issue. No union can do these critically important jobs well, and provide the organisers, researchers, advocates and negotiators necessary to protect members, when its funds are drained by $500,000 for Court cases on matters which should be settled within the Union's structures. THE FIGHT FOR JOB SECURITY Technology and company mergers threaten jobs. We have to fight to save them, and give those who are displaced severance payments which enable them to maintain their quality of life. Unfair dismissals abound - each case must be taken up and our members reinstated without loss. All this requires our UNDIVIDED time and resources. IT'S UP TO YOU So, in the final analysis, it's up to you. You have to decide whether you want the mad militants, the political extremists, the con-merchants, the born-again Marxists to run your union. Independent surveys of our members' show that most are happy with the way things are being done. A few, naturally, are not. Some new members do not know how the F.C.U.'s performance compares with other unions. In the one workplace you will find some who say we are 'too militant' and some 'not militant enough'. The overwhelming majority said in our surveys 'about right'. If you don't know much about your' union, and you want to know more, ask your steward, drop us a line, or ring the Union office. If you want to keep your union running well, here are things that you can do: Always vote in Elections. Urge your workmates to vote too. Go to your union meetings. Read THE CLERK and the regular Bulletins to stewards. Don't be misled by rumors and last-minute smear sheets attacking the union. Check it out with a phone call to the union, ask an official to call and answer the query, 50 everyone can hear the facts." + DF * - lil- On 10 April 1985, the Applicant, relying upon s.141 of the Act, obtained a rule nisi calling upon the Respondents, being the six persons named as being present at the commencement of the meeting of the National Executive Committee on 31 January 1985, to show cause on 19 April 1985 why orders should not be made that they perform and observe the Rules of the Clerks Union:- (1) by treating as null and void the resolution set out above under the heading of Item 4 "in so far as that resolution purported to authorise the preparation, publication and distribution of the leaflet entitled in part 'The Rise of "Reform Groups" in White-Collar Unionism' issued by the Federated Clerks Union of Australia"; (2) by rvefraining from publishing or distributing the F.C.U. pamphlet out of the funds of the Clerks Union; (3) by refraining from using the funds of the Clerks Union to urge members of the Clerks Union not to vote for candidates endorsed by the Clerks Reform Group in the elections being conducted within the Victorian Branch of the Clerks Union; (4) by repaying to the Clerks Union the costs expended in publishing and distributing the F.C.U. pamphlet, and - 12- (5) by refraining from using the funds of the Clerks Union to publish any material which Giscriminates against the candidature for office in the Clerks Union of any person who is a member of or endorsed by the Clerks Reform Group or by reason of his or her political adherence or practice. "UPON THE GROUNDS set forth in the Affidavit of Lindsay James Tanner sworn the 4th day of April, 1985 and filed herein and the Affidavit of Carolyn Doyle sworn the 10th day of April, 1985 and filed herein." The reference in that order to the "Affidavit of Carolyn Doyle sworn the 10th day of April, 1985 and filed herein" is confusing since the only affidavit by that person filed in these proceedings was sworn on 11 April 1985. The facts set out above are taken from the affidavits of the Applicant sworn 4 April 1985 and 10 April 1985 respectively. The Rules of the Clerks Union and of the Victorian Branch of the Clerks Union are exhibited to the first of those affidavits. Carolyn Doyle had only recently been accepted as a member of the Clerks Union. It does not appear if she was eligible to vote at the elections being conducted within the Victorian Branch. In her affidavit she Says that on 3 April 1985 she received a letter from the Secretary of the Victorian Branch of the Clerks Union signed by "H.d. Darroch, Secretary". The letter enclosed a membership card which required her signature and made reference to some of the benefits arising from membership. Enclosed with the letter was a copy of the F.C.U. pamphlet. At the same time as the rule nisi was obtained, the Court, on an ex-parte application, made interim orders that the Respondents perform and observe the Rules of the Clerks Union in the terms of paragraphs (1), (2), (3) and (5) as set out above, until 4.15 p.m. on 19 April 1985 or until further order. On 19 April 1985, the Court made further interlocutory orders to the effect that until the application for the orders set out in paragraphs (1), (2), (3) and (5) above had been heard and determined or until further order, the Respondents perform and observe the Rules of the Clerks Union by:- 1. Refraining from publishing or distributing out of the property of the Clerks Union, the F.C.U. pamphlet. 2. By refraining from using the funds of the Clerks Union to urge members of the Clerks Union not to vote for candidates endorsed by the Clerks Reform Group in the elections being conducted within the Victorian Branch of the Clerks Union. - 14 - 3. By refraining from using the funds of the Clerks Union in publishing material which discriminates against the candidature for office in the elections being conducted within the Victorian Branch of the Clerks Union persons who are members of or endorsed by the Clerks Reform Group. The rule nisi came on for hearing before the Court constituted by a single Judge on 26, 29 and 30 April 1985. On 30 April 1985, upon the Respondents Riordan, Sullivan, Wasson and Darroch, by their counsel, giving undertakings in the same terms as those set out in the orders made on 19 April 1985, that order, insofar as it was directed to those four Respondents, was discharged. On the same day the Court, pursuant to s.118C of the Act, ordered that the proceedings be heard and determined by a Full Court. The only evidence before the Court in addition to the material contained in the affidavits of the Applicant and the affidavit of Carolyn Doyle, was a further affidavit by the Applicant sworn 26 April 1985 in which he stated that he had joined the Clerks Union early in 1982 and that upon his acceptance of membership, he had received a letter notifying him of his acceptance and also a number of pamphlets published by the Clerks Union. Subsequently at a meeting of the Victorian Branch of the Clerks Union on 20 February 1985 he had collected a number of other leaflets published by the Clerks Union. Oral evidence was given by - 15 - Peter John Carter in relation to the copies of the F.C.U. pamphlets seen at the T.A.B. Offices in Queens Road, Melbourne. The Respondents did not lead any evidence. The only concession made by counsel for the Respondents was that on its face the F.C.U. pamphlet "is a publication of the Federated Clerks Union and is an official document of the Union, and we do not seek to suggest otherwise. As to where it obtains its authority, there is simply no evidence before your Honour as to which of the councils of the Union did authorise it." The rule nisi came on for hearing before the Full Court on 17 and 18 June 1985. At that time, the elections within the Victorian Branch of the Clerks Union had been completed. It follows therefore that with the exception of the order sought in relation to repayment of moneys, the erders sought in relation to the Victorian elections no longer could have any operation. At the hearing, counsel for the Applicant by agreement, deferred consideration of the order sought relating to the repayment of moneys. No further evidence was tendered at the hearing before the Full Court. Subsequently, counsel for the Respondents supplied to the Court and to the Applicant a schedule of elections in 1985 within the Clerks Union. That Schedule is as follows:- N.S.W. Branch January/February All Branch Offices. Taxation Offices Branch Victorian Branch Western Australian Branch South Australian Branch Taxation Offices Branch Tasmanian Branch Central & Southern Queensland Branch 16 - February National Councillors Alternate National Councillors Branch President and Branch Councillors. March/April All Branch Offices. July/August All Branch Offices. August/September President, Deputy President, Vice President, Secretary, Assistant Secretary, National Councillors. August /November Deputy President, Executive Councillors. October/November All Branch Offices. November All Branch Offices. - 17 - Before considering the matter further, it should be stated that the Applicant has made serious accusations against the Respondents. Under the Federal Court Rules, there are ample procedures by which a party can obtain discovery of documents. The Applicant did not seek to make use of any of those procedures. In particular, there is no evidence of resolutions made by any of the councils or committees of management of the Clerks Union or any of its Branches except for the resolution headed Item 4 set out above and another resolution set out on that page. Reference will be made to that resolution later in these reasons. In proceedings of the present kind, respondents are under no obligation to call evidence. Applicants carry the onus of proof. Respondents are quite entitled to rely upon the absence of evidence being adduced on behalf of applicants. In the present case, the absence of evidence has made the task of the Applicant extremely difficult and, as will become apparent, it is the absence of evidence against the Respondents which results in the rule nisi being discharged. The principles of law to be applied in cases such as this have been considered recently by a Full Court; see Scott v. dess (1984) 3 F.C.R. 263. Those principles need not be reconsidered in this case. Two of those principles can be summarised:- Principle l. Officers exercising power within an organisation shall not exercise that power to authorise the use of the resources of the organisation to support or promote a candidate or a group of candidates during the conduct of an election to offices within the organisation. Principle 2. Officers of an organisation are under a duty to exercise powers conferred upon them by the rules of the organisation bona fide for the purposes for which the powers are conferred. If officers of an organisation act in breach of principle 1., the Court may give directions under sub-section 141(1G) of the Act that they perform and observe the rules of the organisation by refraining from s0 expending the resources of the organisation. If officers of an organisation are in breach of principle 2., the Court may give directions under sub-section 141(1G) of the Act that they perform and observe the rules of the organisation by treating as null and void any resolution made in breach of that principle. In addition, consequential orders may be made to give effect to those directions. In Scott v. Jess, Gray J. at pp.286-289 stated and elaborated upon four principles which on occasion may conflict. We agree with the statement of those four principles, namely:- a. "It is proper, and perhaps necessary, for an organisation to communicate with its members about the affairs of the organisation and matters which may be of interest to the members," b. "In the expenditure of the funds and the use of the resources of an organisation, its objects and powers are to be interpreted broadly, so that any action which can fairly and reasonably be regarded as falling within those powers and objects will be valid." c. "KR power given to a person or persons by the rules of an organisation must be exercised in good faith and for the purpose for which it is given, not for some ulterior or extraneous purpose." d. "The funds and property of an organisation may not validly be used to support one candidate or group of candidates in an election, or one point of view in a plebiscite, to the exclusion of another candidate or other candidates or the opposite point of view, or to campaign against a candidate or candidates in an election or a point of view in a plebiscite." In the present case, the elections within the Victorian Branch commenced on 1 April 1985 when the returning efficer called for nominations. At the latest, those elections ended with the declaration of the ballot. Accordingly, at the time of the hearing before the Full Court, the elections within the Victorian Branch were not being conducted. Counsel for the Applicant recognised this and thus did not seek the orders directed to the elections being conducted within the Victorian Branch. Nevertheless, so0me comment should be made. Principle 1. imposes an absolute prohibition on the exercise of powers by officers of organisations. It is an absolute prohibition which applies during a restricted period, namely during the conduct of the election. Thus it does not apply to the distribution of material before the commencement of the election but that does not prevent the application of principle 2. to that distribution. On the assumption that the contents of the F.C.U. pamphlet tend to support or promote a candidate or a group of candidates during the conduct of an election, namely the elections within the Victorian Branch, nevertheless there is an absence of evidence to establish a breach of principle l. For present purposes it is assumed that the Respondents authorised the use of the resources of the Union to print and distribute the F.C.U. pamphlet. The only evidence of the distribution of the F.C.U. pamphlet during the conduct of the elections within the Victorian Branch was the copy forwarded by the respondent Darroch in his capacity as Secretary of the Victorian Branch to the new member Carolyn Doyle and received by her on 3 April 1985. It is common practice for similar material to be sent to new members when being notified of their admission to membership to the Union. Carolyn Doyle May not have been eligible to vote at the elections then being conducted. That evidence of distribution would not, of itself, have been sufficient to justify the making of the ~ 21 - order sought. In addition, on 4 April 1985 there were still some of the F.C.U. pamphlets on the table at the T.A.B. Offices. Those had been distributed before 20 March 1985. In the present case, it is not necessary to determine whether any person was under an obligation to remove any remaining F.C.U. pamphlets on 1 Aprii 1985. The substantial issue argued at the hearing was whether the resolution made by the National Executive Committee in relation to Item 4 - Publications - Reform Groups and White Collar - that the Committee authorise a draft to be prepared and approved by the officers at the earliest possible time be treated as null and void "in so far as that resolution purported to authorise the preparation, publication and distribution of" the F.C.U. pamphlet, was a bona fide exercise of power conferred upon the Respondents. By way of aside, it should be noted that the resolution itself does not authorise the preparation, publication and distribution of the F.C.U. pamphiet. In any event, the Applicant's claim on this issue must fail. There are serious defects in the chain of proof needed to establish the Applicant's case. There is no evidence that the Respondents or any of them authorised the use of the resources of the Union to publish and distribute the F.C.U. pamphlet. The resolution in evidence merely authorises the preparation of a draft document. That resolution is to be compared with another resolution appearing on the same page of the minutes of the meeting of - 22 - the National Executive Committee with respect to another matter that the National President be authorised to proceed with the publication of pamphlets with the costs to be apportioned among branches. In the present case, there is'no evidence of any such resolution with respect to the F.C.U. pamphlet. On this ground alone, the Applicant's claim must fail. Further, in Scott v. Jess, Evatt and Northrop Jd. said at p.272:- "It cannot be doubted that officers of an organisation have a power to inform members of matters of interest to the organisation and its members and for that purpose to expend the resources of the organisation. It is for the officers of the organisation to determine what Matters of interest may be the subject of such information, the nature of that information and the amount of the resources of the organisation to be expended. Eventually, it is for the members of the organisation to exercise control over the officers as provided in the rules. At times the information published may be contentious and may seem to be favouring one group within the organisation and disadvantaging a competing group. If a member can prove that the publication of that information was not made by the officers bona fide for the purpose of the power conferred upon those officers, orders under s.141(1G) of the Act may be made directing the officers to observe and perform the rules of the organisation by refraining from expending the resources of the organisation for the publication of that information. Likewise, if officers constituting a committee of the organisation resolved to expend resources of the organisation for purposes which are not permitted by the rules of the organisation, similar orders may be made; see for example Short v. Wellings (1951) 72 C.A.R. a4." - 23 - In the present case, the National Executive Committee has power to authorise the use of the resources of the Union to communicate with the members of the Union. This arises from rules 3, 27 and 37 of the rules of the Union. (On the assumption that the Respondents authorised the publication and distribution of the F.C.U. pamphlet, there is nothing to suggest that they did not exercise the powers conferred upon them bona fide for the purpose of those powers. It is true the contents of the F.C.U. pamphlet are contentious and may seem to be favouring one group within the Union and disadvantaging a competing group. That of itself is not proof that the publication was not made bona fide for the purpose of the power conferred upon the Respondents. It was for them to determine what matters of interest should be the subject of communication to members of the Union. It is mot for the Court to act as a censor of publications. In proceedings of this kind, the Court determines the question of whether powers have been exercised bona fide for the purpose they were conferred. In the present case, the Applicant has failed to prove that the Respondents have not exercised the powers conferred upon them bona fide for the purpose of those powers. Further, on the assumptions that the Applicant had proved that the Respondents had authorised the use of the resources of the Union, not merely for the purpose of communicating with members of the Union but for the purpose and with the effect of supporting a candidate or group of candidates at future elections or for the purpose and with - 24 - the effect of denigrating a candidate or group of candidates at future elections, principle 2. would have been breached. That action by the Respondents would not have been a _ bona fide exercise of their powers to inform members of matters of interest to the Union and its members. Further, that action would have been taken pursuant to the exercise of powers for a purpose not permitted by the Rules of the Union. That action would have been contrary to the principles stated by us in the passage from Scott v. Jess quoted above. On the assumptions stated, there is no doubt that appropriate orders under sub-section 141(1G) of the Act would have bean made against the Respondents. In this case however, the Applicant has failed to prove all those matters. Inferences cannot he used to fill the void occasioned by lack of avidence. In all the circumstances, the Applicant has failed to establish a case against the Respondents based on principle 2. Counsel relied further on submissions that the resolution offended against rule 44 of the rules of the Union and rule 12 of the Victorian Branch rules. Rule 44 is headed "Membership Rights" and provides:- "Tt shall be a term of membership in the Union that a member shall retain complete freedom in the exercise of his political or religious views: Provided that ... ". The proviso is based upon Reg.115(1)(e) and (f) of the Conciliation and Arbitration Regulations and is not relevant for present purposes. Rule 12 of the Victorian Branch rules is headed "Membership Rights" and provides:- ""(a) It shall be a term of membership in the Federation that a member shall retain complete freedom in the exercise of his political and religious views. No member or intending member shall he discriminated against or in any way prejudiced in his rights in the Union by reason of his political or religious adherence or practice. (b) Any member who does any act or thing calculated to prevent or hinder another member from exercising his rights of membership or from standing for election when qualified as provided in these Rules or any Rules of the Sections made pursuant to those Rules, or to penalise or injure another member because of his exercise of such rights or because he has so stood for election, shall be guilty of a breach of these Rules." Counsel for the Applicant contended that the F.C.U. pamphlet offended these rules. Even if the Applicant had otherwise established a case against the Respondents, there is no breach of either of the rules. Those rules are directed to prevent attempts by members to prevent or hinder other members from exercising their rights as members. Those rules do not prevent debate about matters of concern to members generally. The Applicant having failed to establish any of the claims argued before the Full Court, 1t follows that there is no sense in deferring for further consideration the claim for orders directing the repayment of moneys. - 26 - In the result, the interlocutory orders made on April 1985 and the rule nisi herein should be discharged. ; aaa mn * Ve , TWNOUL HS aks : | Hone weide Mr. Bounce. Mortaep P A Assacraie : .- 0 227. eo eee Come ~~ - 27 - -t = IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIAN DISTRICT REGISTRY ) No V 6 of 1985 ) ) INDUSTRIAL DIVISION BETWEEN: LINDSAY JAMES TANNER Applicant AND: J.P. MAYNES, J. RIORDAN, T.W. SULLIVAN, R.J. WASSON, H. DARROCH and M. BOURKE Respondents CORAM: Evatt, Northrop and Keely JJ. REASONS FOR JUDGMENT KEELY J. 20 DECEMBER 1985 The rule nisi and interlocutory orders in this Matter, certain Federal and Victorian Branch rules of the Federated Clerks Union of Australia (the union), and the full text of the pamphlet (the F.C.U. pamphlet) the subject of these proceedings are set out in the joint reasons for judgment of Evatt and Northrop JJ. and need not be repeated. A meeting of the National Executive Committee (the N.E.C.) of the union was held on 31 January and 1 February 1985. The minutes of that meeting included a minute, headed "Item 4 - Publications - Reform Groups and White Collar", the full text of which is set out in the joint reasons for judgment. That minute shows that the National President (Mr Maynes) in a report to the N.E.C. (1) referred to "the mushrooming of certain reform groups ... a vehicle now used by the extreme Left", (2) "suggested there was a need to deal with this matter particularly as ... various groupings were arising in our own Branches masquerading as reform groups", (3) "said that this had re-occurred in New South Wales" and "a similar group ... had been seeking to establish itself in Victoria" and (4) "said the Union had a duty to the membership to address this subject, so that they were aware of the efforts of this and other unions and so0 that they could properly evaluate their worth". The National President "proposed that the National Executive Committee authorise a draft to be prepared and approved by the Officers at the earliest possible time". Those officers were the National President (Mr Maynes), the National Deputy President (Miss Riordan), the National Secretary (Mr Sullivan) and the Assistant National Secretary (Mr Wasson), each of whom is a respondent in these proceedings. The N.E.C. resolved "That the report be received and the proposal endorsed". It is of some significance, in my opinion, that the resolution authorised "a draft" of a written communication which was plainly intended to fulfil the union's "duty to the membership to address this subject". The N.E.C., in authorising "the officers" to give their "approval" to the final form of that proposed written communication and in endorsing the National President's proposal that the officers do so "at the earliest possible time", must have intended that the written communication be distributed to the membership without delay and without reference back to the N.E.C. The respondents sought to gain some benefit from the fact that the N.E.C. resolution did not expressly authorise the publication of the pamphlet and did not provide for costs to be apportioned among the branches - as had been done with another resolution. However, the absence of an express authority to the officers is not significant where, as here, it was plainly implied; nor can the absence of any reference to costs overcome that clear implication. In my opinion the resolution of the N.E.C. authorised the preparation of the proposed communication for distribution to the union's members, using the union's resources to do so. The evidence as to the extent to which the F.C.U. pamphlet was distributed to the members of the union was limited. Mr Carter, a State Councillor of the union and an employee and former shop steward at the Totalizator Agency Board, gave uncontradicted evidence that on 20 March 1985 approximately 200 copies of the F.C.U. pamphlet were on a table in the T.A.B. premises at 1 Queens Road Melbourne and that that table was usually reserved as a distribution point for F.C.U. publications. He also gave evidence that about 40 or 50 copies of the F.C.U. pamphlet were still on that table on 3 April 1985, i.e., after the returning officer called for nominations for the Victorian Branch elections. It was conceded by the respondents' counsel that the F.C.U. pamphlet "is a publication and is an official document of the union" but he contended that there was no evidence as to which of the councils of the union authorised it. In my opinion it should be inferred that the F.C.U. pamphlet was the proposed written communication to the members, the drafting and distribution of which had been authorised by the N.E.C.. The drawing of that inference is supported by a number of matters. First, the fact that the "N.E.C. resolved (ECtdhat the (CNational President's] report be received and the proposal endorsed." Secondly, the report so "received" by the N.E.C. included the statement that "the Union hada duty to the membership to address this subject". Thirdly, the proposal endorsed by the N.E.C. expressly authorised "a draft to be prepared and approved by the Officers at the earliest possible time". It may be inferred that the words "at the earliest possible time" were inserted because of (1) the perceived need for speed in "addressing" the members, (2) the possibility that the next meeting of the N.E.C. might not be for 2 months (see Federal Rule 28(1)(b)) and (3) the likelihood that the returning officer would, in March or early April 1985, call for nominations for the Victorian Branch elections. The schedule of elections within the union in 1985, supplied to the court by the respondents' counsel and set out in the joint reasons for judgment, contained the entry "March/April All Branch Offices" in respect of the Victorian Branch. It may be added that it also listed N.S.W. Branch elections in January/February and Taxation Officers Branch elections in February. Fourthly, there is an observable similarity of wording between the F.C.U. pamphlet and the National President's report as recorded in the Minutes. For example, that report had referred to "certain reform groups particularly in the white collar field", to "the extreme left", to "con merchants" and "careerist elements", to the NSW "Shipping Section" of the union which had been "led .. into the Waterside Workers Federation" by a reform group and had said "that a similar group of relatively few individuals had been seeking to establish itself in Victoria". Each of those matters was referred to in the pamphlet. The respondents submitted, amongst other things, that, the onus of proof being upon the applicant, there was no evidence that any respondent had breached any rule of the union. However, in my view the Court should infer that the F.C.U. pamphlet was the proposed written communication to the members which had been authorised by the resolution of the N.E.C. Inferences may be drawn where "circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought ... though the conclusion may fall short of certainty" - a passage in Bradshaw v McEwans Pty. Ltd. (1951 - unreported) which was cited by Dixon, Fullagar and Kitto JJ in Luxton v Vines (1952) 85 C.L.R. 352 at 358. Further, although plainly the respondents were not obliged to call evidence, as Fullagar J. said in Tozer Kemsley & Millbourn (A'Asia) Pty. Ltd. v Collier's Interstate Transport Service Ltd. (1956) 94 C.L.R. 384 at 403 :- "The silence of ome party cannot, of course, fill the place of actual evidence on an issue, but it May serve to resolve a doubt or an ambiguity, especially where the facts are peculiarly within the knowledge of the silent party." In my opinion the resolution was carried by the N.E.C. for the primary purpose of having prepared, printed and distributed to the union's members, using the union's resources, an F.C.U. pamphlet designed to persuade the members of the union to vote against any "Reform Group" candidates in any of the forthcoming elections in the branches. Mr Tracey, of counsel, on behalf of the respondents, submitted that if, contrary to his submission, the court accepted that the N.E.C. resolution authorised the F.C.U. pamphlet, then that pamphlet "was published because of a perceived duty to inform the members of matters albeit contentious matters, and that the purpose of the publication was to assist in informing the members' minds on that issue". I accept that, on the evidence, each of the respondents present at the meeting of the N.E.C. may well have held, at the material time, a bona fide belief that it was in the best interests of the members that the reform group's candidates in the forthcoming branch elections should not be elected and accordingly that the F.C.U. pamphlet should be distributed to the members. Prime Ministers, and the members of the Federal Cabinet, in the time immediately preceding the commencement of every Federal election, may well hold similar bona fide beliefs as to the best interests of the Australian voters. However, as J.B. Sweeney J. said in Kanan v Hawkins (1978) 8 I.R. 371 at 373:- "If in a general election ... a government used public moneys and public civil servants to produce a propaganda leaflet and despatched it, using public moneys, ... to all electors ... that action would be completely condemned. Such an election would not be regarded as a democratic election". I agree entirely with that statement. Despite the bona fide belief of the members of the government as to the best interests of the voters, their "action would be completely condemned" and it would not avail them to contend (adapting the words of the respondents' counsel) "that the purpose of the publication was to assist in informing the voters' minds on that issue". In my opinion, the primary purpose to which the N.E.C. resolution was directed was that of influencing the Members, as voters, to vote against Reform Group candidates. The "informing" of the members was not itself a purpose - let alone the primary purpose. It was a means to achieve the purpose of so influencing the members as voters. That conclusion is strongly supported by an examination of the contents of the pamphlet. Mr Tracey conceded, on behalf of the respondents, correctly in my opinion, that if, contrary to his submission, the court accepted that the N.E.C. resolution authorised the F.C.U. pamphlet and that it contained "some expression as to the reason that it had been published, then one could draw on it to provide evidence of the intention that was operative" at the time of the resolution. In my opinion, the reason for the publication of the F.C.U. pamphlet was clearly to influence the members of the union when they came to cast their votes in the union elections. The opening words in the concluding part of the pamphlet were quite specific: " ITS UP TO YOU So, in the final analysis, it's up to you. You have to decide whether you want the mad militants, the political extremists, the con-merchants, the born-again Marxists to run your union." The earlier part of the F.C.U. pamphlet had already made it clear that it was intended to influence members of the union in their decision as to how to vote and it contained a number of references to the importance of voting. For example, reference was made to "Reform Groups" tactics designed "to enable a small, well organised vote to win"; to "a left wing "Reform Group" ticket" making "a second attempt ... to seize the Union's largest branch" in "N.S.W. with elections due in March". It also said that: "With elections in Victoria in May, a new push is under way to capture the Branch. The campaigns in N.S.W., Victoria and Queensland (which has elections later in the year) are clearly linked." As to the Taxation Officers Branch it said that: "The Left are making a determined bid to win control of the Taxation Officers Branch. It is part of a wider campaign to dominate Public Service unionism." The pamphlet stressed the importance of voting against the Reform Groups by saying: "Reform Groups can only succeed when union members are apathetic. If only 20% of the members return their postal votes, Reform Groups claim victory with 11% of the vote! Make sure you have your say in the running of the union. In the Branch elections cast your vote and return in the pre-paid envelope you will receive." The contents of the pamphlet demonstrated, in my opinion, that it was directed towards achieving the primary objective of influencing the members of the union into voting against the various reform group candidates and the N.E.C. resolution itself was directed towards the same objective. 10. The respondents contended that, even if it had been established, contrary to their submission, that they had authorised the publication and distribution of the pamphlet at the union's expense, no order could be made under 5.141 of Conciliation and Arbitration Act (the Act). They sought to rely upon the decision of the Full Court in Scott v Jess - (1984) 3 FCR 263; 56 ALR 379. However, in my opinion the joint judgment of Evatt and Northrop dd. in that case is distinguishable because it was based partly upon the absence of any resolution by the union's officers. The absence of any such resolution was referred to in the joint judgment (at 275 - 276; ALR at 392):- "In other words, he Creferring to the trial judgei relied upon a principle similar to that set out in Allen v Townsend, supra, but in the absence of any particular resolution entered into by a committee of the Union. He based his findings on publications instead of conduct engaged in while an election was being held... In the present case the applicant did not attempt to rely upon any resolution of the kind existing in Short v Wellings" It may be added that, before referring to "the absence of any particular resolution entered into by a committee of the Union", the joint judgment had referred toa hypothetical situation where a resolution had been carried. Their Honours made it clear that in such a case orders may be made under 5.141 of the Act, saying (at 272; ALR at 389):- 1l. "Likewise, if officers constituting a committee of the organization resolved to expend resources of the organization for Purposes which are not permitted by the rules of the organization, similar orders may be made; see for example Short v Wellings." The principle that a resolution "to expend resources of the organization for purposes which are not permitted by the rules" is invalid was recognized in Williams v Hursey (1959) 103 C.L.R. 30. In that case Fullagar 7. (with whom Dixon C.J. and Kitto J. agreed), referring to the argument of the respondents in those proceedings, said, at 56, 57:- "They said, in the first place, that the rules of the federation and of the branch did not, as a Matter of construction, authorize the making of a levy for the support of a political party. They said, in the second place, that any rule which did purport to authorize the making of such a levy would be itself invalid. ... If the second branch of the argument were sound, it would, of course, provide a reason for construing the rules, in case of doubt or ambiguity, as not conferring the power in question. The fundamental premiss on which the argument of the respondents rests must, of course, be conceded. That is to say, the power to make the levy must be found expressed or implied in the rules." (p. 57)"When the rules use, in stating "objects", such general expressions as "the interests of members" and the "improvement of the conditions of members", they must, of course be read as referring to the interests of members as waterside workers and to the improvement of the conditions under which they work (as to wages, hours, privileges, amenities, etc.). But, subject to that, no prima facie reason exists for limiting the meaning of such expressions in any way, and any action which can fairly and reasonably be regarded as likely to further the interests of the organization and its members is within the objects stated in the rules, and therefore within the powers of the federation acting directly or through the branch." 12. Mr Tracey submitted that the N.E.C. had the power to carry the resolution. He relied upon Federal Rule 27(3)(n), upon paragraphs (c) and (1) of the objects in Federal Rule 3 and upon Federal Rule 37(3). Those rules were in the following terms :- "27. CONSTITUTION AND DUTIES OF NATIONAL EXECUTIVE (3) The National Executive shall, subject to the review of its actions by the National Council, have the care, control, custody, superintendence, Management and administration in all respects of the affairs, business, funds and property of the Union, and without limiting the generality of the foregoing, it may :- (n) Expend or authorise the expenditure of any monies in furtherance of the objects of the Union." "3. OBJECTS The objects for which the Union is established are by all lawful means - (c) to advance and protect the social and economic interests of all members and trade unionists generally by industrial, political, or other means and to establish joint organisation and joint funds therewith; aaee (1) to assist members by financial or other means in such circumstances as may seem proper} (s) to do all such other things as may be necessary or convenient for the attainment of the abovementioned objects." 13. "37. FUNDS AND PROPERTY - DISBURSEMENT OF SAME (3) The funds of the Union may be disbursed for ordinary purposes by such officer or officers a5 may be authorised in that behalf and subject to such limitations as may be imposed. Funds may he disbursed for extraordinary purposes by decision of the National Council or National Executive." Mr Tracey submitted that any funds of the union expended upon the publication and distribution of the pamphlet (without conceding any such action by the respondents), came within either the words "funds ... disbursed for ordinary purposes" or the words "funds ... disbursed for extraordinary purposes" and could be authorised by the N.E.C. In my opinion those rules did not, expressly or impliedly, authorise the resolution of the N.E.C. which, for reasons given earlier, constituted a decision authorising the use of the union's resources to prepare, print and distribute the pamphlet for the purpose of seeking to persuade the members to vote against any Reform Group candidates. That purpose existed notwithstanding the fact that the names of the Reform Group candidates were not known at the time either of the resolution or of the initial distribution of the pamphiet. On the material before the Court it must be inferred that the respondents knew that elections were being held in various branches, including the Victorian Branch, in the three month period commencing February 1985. 14, During the present proceedings a question was raised as to whether the general principle enunciated in Short v Wellings (1951) 72 CAR 84, as to the misuse of union resources, had been limited in its application to conduct during the period when the election was being held. The candidates' names were not known at the time of the resolution which was held invalid in Short v Wellings. The Full Court said (at 86) that :- ",. the purpose of the resolution complained of by him was to direct the resources of the branch to the promotion and support of the candidature for office of a group of nominees, chosen or to be chosen." That unanimous decision of the Full Court was the leading case on the subject in the Commonwealth Court of Conciliation and Arbitration and it was expressly applied at an early stage in the life of this Court by J.B. Sweeney J. in Kanan v Hawkins, supra. In the latter case the distribution of a circular, which his Honour described as "electioneering material", using the union's resources, was held by his Honour to be a breach of the rules. In that case, in a passage part of which was quoted earlier in these reasons, in a different context, but which warrants repeating here, J.B. Sweeney J. said (at 373):- 15. "Tf in a general election a matter of days before the election commenced, a government used public moneys and public civil servants to produce a propaganda leaflet and despatched it, using public moneys, through the post to all electors, then there would be not the remotest doubt that that action would be completely condemned. Such an election would not be regarded as a ' democraticelection. I regard the issue of the leaflet in these circumstances as a breach of the rules and that in itself would, in my view, he sufficient to make it proper to make an appropriate order so far as Mr Hawkins is concerned." I respectfully agree with that statement of the principle. J.B. Sweeney J. in that case expressly applied the general principle enunciated in Short v Wellings, saying (at 371-2) :- "T accept the decision stated in Short v Wellings (1951) 72 C.A.R. 84 ina particular passage at 87 where it was there stated ..... 'Although there is no specific rule against the use of the resources and funds of the organisation for the support of particular candidates at any such election, to use the property and resources of the branch for such a purpose would deny the right of such Candidates as were not to be supported by the organisation, its committee of management, its several authorities, its resources or funds, to the freedom and equality in their candidature to which the election rules imply they are entitled. The funds and resources of the organisation belong as much to them and their supporters as to their opponents and theirs.'" Again, I respectfully agree with his Honour in accepting and applying that principle enunciated by the Full Court in Short v Wellings. It may be added that J.B. Sweeney J. explained in 16. Kanan v Hawkins that the decision in Holmes v Riordan (1955) 86 CAR 180 was not contrary to the principle in Short v Wellings. His Honour pointed out that in that case Dunphy J. had refused to make an order "because of the time which had elapsed" and went on to say (at 372):- "I do not regard the judgment of his Honour as an authority in any way in conflict with Short v Wellings. The position then, as I see it, is that although there is no express rule in the rules of the union forbidding the issue by a secretary of a pamphlet, such as the one in this case, or prohibiting the use of the machinery, funds and resources of the union in an election campaign, that such a prohibition is to be implied. The fact that a free vote of members is important is to my mind emphasised by the changes made to the Act, particularly that setting out the need to encourage the democratic participation of members in the affairs of an organisation." T have already expressed the opinion that the union's rules did not confer upon the N.E.C. any power to use the union's funds and resources to print or distribute the F.c.U. pamphlet. If there be arly doubt as to the construction of the rules then in my opinion they should be construed in such a way that they do not conflict with the "prohibition ... to be implied" referred to by J.B. Sweeney dg. In the passage quoted earlier from Williams v Hursey, Fullagar J. referred to an argument that a rule which authorised a political levy would be invalid and said that if that "argument were sound, it would, of course, provide a reason for construing the rules, in case of doubt or ambiguity, as not conferring the power in question". 17. In my opinion the N.E.C. resolution was also contrary to the following dictum in the joint judgment in Scott v Jess (at 272; ALR at 388):- "Implicit in that concept of fair play is the principle that the officers exercising power within an organization shall not exercise that power to authorise the use of the resources of the organization to support or promote a candidate or a group of candidates or to seek to defeat a candidate or a group of candidates during the conduct of an election to offices within the organization." In that passage the words "during the conduct of an election" should not, in my opinion, be taken as having been intended to limit the prohibition upon the misuse of union funds to the period commencing with the calling for nominations in an election. Such a limitation would sit oddly with the "concept of fair play" as it would permit the officers, provided that they acted just before the calling for nominations, to use the members' funds to seek to defeat the candidature of their opponents - unless the opponents could prove to the court that the officers had acted in bad faith. To so limit the principle would have run counter to the general principle stated by Kelly CJ. Foster and Kirby JJ. in Short v Wellings. That principle had not been questioned in any of the authorities between 1951 and 1984. In my opinion in Kanan v Hawkins J.B. Sweeney J. did not treat the principle as being limited to the period after the formal calling for nominations. Such a limitation would have been unreal and artificial. The principle was directed 18. towards the harsh realities of what happened "in an election campaign" in his Honour's words, including the use of an organization's resources to produce or distribute what his Honour called "electioneering material". It should be added that that case dealt with the issue of a circular - not with a resolution. Nor did Sheppard J. in Re A.P.T.U. ex parte Wilson, (1979) 28 ALR 330, in my opinion, treat the principle as being limited to the period after the formal calling for nominations. In that case his Honour held that the use of union funds to send to union members an "open letter" was a breach of an implied provision in the union rules, saying (at 334-5), that the letter was "designed to advantage some candidates in the election and disadvantage others". No such limitation of the principle was referred to in a decision of mine in Valentine v Butcher (1981) 51 FLR 127 where it was said (at 139) that:- "an important part of the principle enunciated by the Commonwealth Court of Conciliation and Arbitration in Short v Wellings, as applied by this Court (J.B. Sweeney J.) in Kanan's case, is that those resources must not be used to defeat a candidate..... where they have been denied or will be denied to another candidate. As it is expressed in Short v Wellings such a denial (given that the resources "belong" to both sides in the election) in a "campaign for his defeat" is "a denial of that fundamental right" to "stand for election" to a "democratically and freely elected body of executive and administrative officers"." And at 142-143:- 19. "Although I have decided in the respondents' favour as to the distribution of Blueprint including the leaflet as an insert, there is evidence that the respondents have used the resources of the association to assist the candidature of Mr. Greig and accordingly to disadvantage the applicant in her attempt to ' persuade the members to elect her to the office of federal assistant secretary..... In my opinion the use of either organizers or area representatives to distribute the leaflet to members is conduct which is impliedly prohibited by the rules for the reasons given in Short v Wellings and Kanan's case." A general principle of such long standing would not have been cut down without an express statement to that effect. The joint judgment in Scott v Jess, far from over-turning that long standing principle, expressly referred to it as a "general principle", saying (at 270; ALR at 386):- "Over the years, the Commonwealth Court of Conciliation and Arbitration, the Australian Industrial Court and this Court have applied another general principle. The general principle is illustrated by Short v Wellings (1951) 72 C.A.R. 84, although in reality that case is based on the principles enunciated in Allen v Townsend, supra. In Short v Wellings, an election to offices within an organization was about to be conducted. Before the election commenced, a special meeting of the members of the branch of the organization involved resolved to direct the resources of the branch to the promotion and support of the candidature for office of a group of nominees chosen or to he chosen to stand for election." There is an express reference in that passage to the fact that in Short v Wellings the election "was about to he conducted" and also to the fact that the resolution the subject of the Court's order was a resolution carried "before the election commenced". 20. The apparent qualification ("during the conduct of an election") in the joint judgment in Scott v Jess may owe its origin to the words "at any such election" used in the judgment in Short v Wellings {at 87). However, those words of Kelly C.d., Foster and Kirby JJ. could not have been intended to limit the principle in such away as to only forbid the use of union resources after the formal commencement of the election, as is shown by the general tenor of the judgment, the factual situation under consideration and the reference (at 86) to candidates "chosen or to be chosen". In Short v Wellings the Full Court also used the words "in a campaign" and did so in a context which made it quite clear that the principle was not limited to the misuse of union funds during the period beginning with the formal commencement of the election. Their Honours said (at 87-88) :- "So far as the organization is concerned every member, qualified under its rules, has the right to stand for election to an office. To allow the resources of the organization to be used in a campaign for his defeat would be a denial of that fundamental right. It would enable the existing executive, in whose hands the resources of the organization lie, to use those resources to defeat all opposition to, or criticism of, its will. It could result in a complete tyranny and a permanent denial of the democratic nature of the organization, which the Act and the regulations are calculated to ensure." (emphasis added) That statement of general principle forbids the use of the union's resources "in a campaign for his defeat", referring to a candidate opposing those holding office in the 21. Organization. It does so because such a use of resources "could result in a complete tyranny and a permanent denial of the democratic nature of the organization". I adopt, with respect, that statement of the general principle and of the reason underlying it. Where there is "a campaign to defeat" a "reform group" candidate, the principle forbids the use of union resources in that campaign by those currently holding office. It is clear that neither the principle, nor the reason underlying it, is limited to conduct after the formal commencement of the election. The principle forbids the use of the resources of the organization "in a campaign for his defeat" i.e., for the defeat of a candidate opposing someone holding office in the organization. Although J.B. Sweeney J. in Kanan v Hawkins (at 372) quoted the passage from Short v Wellings (at 87), which included the words "at any such election", his Honour also used the words "in an election campaign". It is plain that an election campaign may well begin before an election has formally commenced - as shown by his Honour's illustration {at 373) of a government misusing public funds "a matter of days before the election commenced ... to produce a propaganda leaflet ..." in the passage set out earlier. Where the Court finds that a resolution was carried for the purpose of seeking to defeat one group of candidates in an election in the organization, that is sufficient; such a resolution can not be valid under the certified rules of the organization. The principle relates to the wrongful use 22. of the organization's funds for a purpose which is not authorised by the rules, when those rules are construed in the light of the Short v Wellings principle and in the light of 5. 140 of the Act. ' The principle is not so narrow as to allow the use of the union's funds to print and distribute, by post to (say) 20,000 individual members, copies of a pamphlet containing electioneering material with the intended result that they are first seen by the members a few days before the period fixed for the lodging of nominations. It may be added that no material distinction could be drawn between such a Case and one where copies of the pamphlet are left for the members at places of work instead of being posted to them. TI am unable to see any reason for such a qualification upon the general principle in Short v Wellings and in my opinion a rule permitting such conduct would be contrary to the provisions of 5.140(1)(c) of the Act. One further point may be made. The joint judgment in Scott v Jess (at 276; ALR at 392) suggested (without deciding the point) that :- "It would be unfair if an attack of that kind Creferring to an attack by a candidate upon the Managenent of an organization] entitled the opposing candidates to use the resources of the organization to further their own interests and to denigrate the interests of the challenging candidate. If that is to be done, it should be done at the expense of the opposing candidates or their supporters, not at the expense of the organization." 23. I respectfully agree with that statement which, in my opinion, is in harmony with the overall principle that the resources of the organization can not validly be used to attack one group of candidates in an election campaign. The principle is that the union's funds can not be validly used to keep the existing officers in office or "to denigrate the interests of the challenging candidate". One further submission put on behalf of the respondents was that the court should not exercise its powers under section 141 of the Act in a way that would amount to an exercise of censorship of union publications. The court in these proceedings is being asked to make an order (inter alia) that the resolution carried by the N.E.C. is to be treated as null and void in so far as it purported to authorise the preparation, publication and distribution of the F.C.U. pamphlet. Such an order would not involve any act of censorship by the court. The court's function is to consider the N.E.C. resolution, in the light of the F.C.U. pamphlet which, in my opinion, was authorised by it, and to decide whether the resolution was valid under the union's rules, properly construed in the light of 5.140 of the Act and the relevant authorities. It is a complete misconception to describe the court's determination of that question as involving censorship in any way of any union publication. In my opinion there is nothing in the joint judgment in Scott v Jess which runs counter to this Court holding that the resolution of the N.E.C. was invalid in 650 24, far as it purported to authorise the preparation, publication and distribution of the F.C.U. pamphlet. If my understanding of the joint judgment be wrong, then in my respectful view the Full Court in the present proceedings should refuse .to follow Scott v Jess to the extent that it is inconsistent with the main stream of authorities in the Commonwealth Court of Conciliation and Arbitration and in this court. It is perhaps desirable that I express my opinion as to the four principles enunciated in the reasons for judgment of Gray J. in Scott v Jess which principles - as distinct from their elaboration - are accepted by Evatt and Northrop JJ. in their reasons for judgment in the present proceedings. I am in substantial agreement with the first principle, namely, that:- "It is proper, and perhaps necessary, for an organization to communicate with its members about the affairs of the organization and matters which may be of interest to the members." However, I agree, with respect, with his Honour that "these principles are capable of conflicting in certain cases" and in my opinion, in the event of such conflict, the first principle must yield to the third and fourth principles. The first principle does not mean that those holding office in an organization are entitled, under the guise of communicating with the members as to "matters which may be of interest", to use the funds and other resources of the organization against candidates in an election campaign, and this is 50 even if 25. the election has not formally commenced. I should add that I read the first principle, in referring to "matters which may be of interest to the members", as referring to the interests of members as members, i.e., in the present case as clerks. - see the statement by Fullagar J., in the passage quoted earlier from Williams v Hursey, that the words "the interests of members" in the "objects" rule must "be read as referring to the interests of members as waterside workers". I agree with the statement in the second principle, that:- "In the expenditure of the funds and the use of the resources of an organization, its objects and powers are to be interpreted broadly, 50 that any action which can fairly and reasonably be regarded as falling within those powers and objects will be valid." Of course, in the application of that principle it must be remembered that, as Isaacs J. said in Bull v Attorney-General for New South Wales (1913) 17 CLR 370 at 384, speaking of the beneficial construction accorded to a remedial Act, the principle does not mean that "the true signification of the provision should be strained or exceeded ...". Further, in my opinion the second principle must yield to the third and fourth principles in the event of any conflict. I agree with the third principle, namely, that:- 26. "AR power given to a person or persons by the rules of an organization must be exercised in good faith and for the purpose for which it is given, not for some ulterior or extraneous purpose." With one important qualification I also agree with the fourth principle, namely, :- "The funds and property of an organization may not validly be used to support one candidate or group of candidates in an election, or one point of view in a plebiscite, to the exclusion of another candidate or other candidates or the opposite point of view, or to campaign against a candidate or candidates in an election or a point of view in a plebiscite." The important qualification which should be placed upon the way in which that principle has been expressed is that, for reasons already expressed, in my opinion the principle is not limited to conduct in respect of elections which have formally commenced. Each of the respondents is under a duty to perform and observe the rules of the union, notwithstanding the absence of evidence that they were all present at the meeting of the N.E.C. at the time when the resolution was carried. In my opinion an order should be made that each respondent perform and observe the rules of the union by treating as null and void and of no force and effect the resolution of the National Executive Committee in so far as it purported to authorise the preparation, publication and distribution of the pamphlet. As my opinion on that question 1s not to prevail, it is not necessary for me to deal with any other 27. Matters raised by the application. I should add dJ. that the conduct breach of Federal Rule with their reasons for that I agree with Evatt and Northrop complained of did not constitute, a 44 or of Victorian Branch Rule 12 and so deciding. I certify that this and the 26 precectr' > .:es are a true cirv ae the Reaso: - Mr. Ju. ' | fewnye wV¥. Dated! 20 December 1985 vescvment hereinot:. 2.) oncur