Met ee ware ee CATCHWORDS Conciliation and Arbitration - Organization - Funds of Union raised by contributions, levies and fines - whether Branch resolution imposing levy valid - difference between levy and contribution, Conciliation and Arbitration Act 1904 s.141 Williams v. Hursey (1959) 103 C.L.R. 30 F. TROJA v. A. BIRD AND OTHERS V. No. 4 of 1986 Woodward, Evatt and Northrop Jd. 10 duly 1986 Melbourne ee 388 8 qe ogee prem rere eers we ee ee eae - oS oy wee ater le Sleds Gita dole totale so IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V. No. 4 of 1986 INDUSTRIAL DIVISION ~~ ewww ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN : F. TROJA Appellant and A. BIRD AND OTHERS Respondents COURT: WOODWARD, EVATT AND NORTHROP JJ. DATE: PLACE: 10 JULY 1986 : MELBOURNE MINUTES OF ORDER THE COURT ORDERS THAT: The appeal be allowed. The order made on 20 December 1985 be set aside. In lieu thereof it is ordered that the respondents and each of them perform and observe the rules of The Australasian Meat Industry Employees' Union by treating as null and void and of no effect the resolution passed by them on 22 May 1984, namely "That the Union ticket he increased by way of a levy of $5.00 per half-year". Otherwise the rule nisi herein be discharged. (Settlement and entry of Orders is dealt with in 0.36 of the Rules of Court.) Pee Ue SP nnn el a et i IN THE FEDERAL COURT OF AUSTRALTA ) ) VICTORIA DISTRICT REGISTRY ) Vv. No. 4 of 1986 ) ) INDUSTRIAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: F. TROJA Appellant and A. BIRD AND OTHERS Respondents COURT: WOODWARD, EVATT AND NORTHROP JJ. DATE: 10 JULY 1986 PLACE: MELBOURNE REASONS FOR JUDGMENT THE COURT: It is unfortunate that these proceedings under s.141 of the Conciliation and Arbitration Act 1904 ("the Act") had to come on for hearing by the Court. It is even more unfortunate that this appeal had to be brought before a Full Court. At the time of each hearing, the situation giving rise to the dispute between the parties had ceased to exist and there was no practical reason why the proceedings had to be continued. Before making detailed reference to the relevant rules of The Australasian Meat Industry Employees' Union ("the Union"), the matters forming the basis of the dispute can be summarised. Mone wee ree ee ren A noe ee -— ee Lal li led eee wee ARTA P OE ee Ew PRA AIS | bl The funds of the Union are raised by "contributions, levies and fines". In addition, its funds May be increased by other methods, for example, interest received and gifts. In May 1984, the Victorian Branch of the Union ("the Victorian Branch") was empowered by the rules of the Union to determine the amount of the half-yearly contribution to be paid by each member attached to the Victorian Branch, but the amount of each half -yearly contribution could not exceed $50.00. The amount of the half-yearly contribution had at that time been fixed by the Victorian Branch at $50.00. The half-yearly contribution had to be paid not later than January 31 and July 31 each year and a membership ticket was issued on the payment of the half-yearly contribution. The issue of the membership ticket was conditional on the member paying "all fines and levies" due at the time of the payment of the contribution. In addition to determining the amount of the half-yearly contribution, the rules of the Union empowered the Victorian Branch to impose levies on members of the Union attached to that Branch "for the purpose of carrying out any of the objects of the Union". This power was a "power to strike a levy". A levy was not to exceed $10.00 per week per member and had to be paid within twenty-eight days "from the date of the striking thereof". ee sore - ree aye AA iow segeaeme, et re ees ree On 22 May 1984, the Committee of Management of the Victorian Branch passed the following resolution: "That the Union ticket be increased by way of a levy of $5.00 per half-year". On 28 July 1984, the appellant paid to the Victorian Branch $55.00 and was issued with a membership ticket for the period July to December 1984. That membership ticket was in the form of a receipt and acknowledged that it had been issued to the appellant "on receipt of the sum of FIFTY-FIVE DOLLARS (FULL) FOR CONTRIBUTIONS AND LEVIES conditionally that all contributions, fines and levies due have been paid". There is nothing before the Court to show that at that time the appellant challenged the validity of the resolution set out above. There is nothing before the Court to show that, when he paid the additional §5.00, the appellant objected to that payment or made that payment under protest. The same applies with respect to the payment of $55.00 made by the appellant on 24 January 1985 for his membership ticket for the period January to June 1995. That Membership ticket was ina form similar to the previous ticket. On 23 April 1985, the appellant obtained an order pursuant to 5.141 of the Act calling upon the respondents who, at that time, were the members of the Committee of Management of the Victorian Branch, to show cause why the Court should not make an order that they observe the rules of the Union by treating as null and void and of no effect the resolution set out above. If that order were made, oe ee regen re ee ere oe ee eee _~—— MM Po wR Cer ate Serres pew thereafter the appellant, and for that matter all the other members attached to the Victorian Branch, would not be liable to pay the sum of §5.00 referred to in that resolution. Nothing, however, would have prevented any member from making the payment of the $5.00 on a voluntary basis. In addition, the appellant sought an order that the respondents perform and observe the rules of the Union "by taking all reasonable steps to refund to members and former members of the Union any monies paid by the said members and former members to the Union which they would not have paid had the purported resolution not been adopted and given effect to". By way of aside, it should be noted that there is no material before the Court to show how many, or indeed if any, members of the Union attached to the Victorian Branch come within the class described in the proposed order. After service of the rule to show cause upon the respondents, several things happened. The limitation contained in the rules on the amount of the half-yearly contribution that could be charged, was increased to an amount greatly in excess of $350.00. On 26 June 1985, the Committee of Management of the Victorian Branch passed the following resolution:- "The Committee of Management having had the advantage of the passing of time which has shown an increase in the membership of the Union and a consequent upward movement in the finances of the Union is of the opinion that coupled with the increase in the membership the $5.00 increase in Union contribution by way of a levy has improved the Union's finances sufficiently to maintain the viability of the Union's financial needs. With this knowledge and the fact that the amendment to Sah "Ute ae renew the mmm ee ee mm O increase contributions under Rule 6 has been agreed to by all Branches and accepted by the Industrial Registrar the Committee of Management resolves:- 1. That the amount of the contribution to be paid half-yearly with effect from ist July, 1985 Pursuant to Rule 6 of the Rules shall he increased from $50 to §55., 2. That the levy of $5 per half year imposed by the Resolution made on the 22nd May, 1984 shall be discontinued after 30th June, 1985". The effect of this resolution was that on and from 1 duly 1985, the resolution of 22 May 1984 had no further effect. For ail practical purposes, it had ceased to have any force. Nevertheless, the proceedings came on for hearing before the Court on 15 November 1985. The appellant contended that in law and in reality, the charge of $5.00 imposed by the resolution of 22 May 1984 was a contribution, not a levy, and as 4 result, the half-yearly contribution was fixed at $55.00 which was in excess of the maximum amount of contribution that could have been charged, and therefore the resolution was contrary to the rules of the Union. Alternatively, the appellant contended that, if the charge was a levy, the Victorian Branch had exercised its power to impose the levy for an improper purpose, namely to increase the amount of the half-yearly contribution, and thus was invalid. On 20 December 1985, the Court, constituted by a single Judge, discharged the order to show cause obtained on 23 April 1985. In its reasons for judgment, the Court expressed the opinion that the charge imposed by the resolution was a levy imposed for the purpose of carrying out a ee eK eS. the objects of the Union. It should be noted that there was no evidence before the Court to show for what purpose the charge had been imposed. The appellant has appealed from that order. Before considering the matter further, relevant parts of the rules of the Union should be set out. Rule 6 is headed "CONTRIBUTIONS" and sub-rule 6(1) is set out in full:- "(1) A sum in payment of contributions of an amount of not less than thirteen dollars ($13) and not more than fifty dollars ($50) as may he decided upon by the Committee of Management of any Branch, shall be paid half yearly not later than January 31 and July 31 each year by all members, each branch, sub-branch or district committee shall have the right to demand payment of such contributions, for which a membership ticket shall be issued, conditionally that all fines and levies due are paid, such ticket to be interchangeable between all branches of the Union. Persons joining the Union following these dates and unfinancial members who pay all contributions, fines, and levies shall be assued with a ticket." Rule 8 is headed "LEVIES" and is set out in full:- "Levies may be imposed for the purpose of carrying out any of the objects of the Union. (a) The Federal Council shall have power to strike a ley on all members; (b) The Committee of Management of any Branch shall have power to strike a levy on all or any section of members in its jurisdiction. aia aes Tamed s Slit - & Ue ee Any levy imposed under the provisions of this rule shall not exceed ten dollars ($10) per week per member. Such levy shall be paid to the Branch Secretary or authorised official of the Union in each Branch within twenty-eight days from the date of the striking thereof. Each Branch Secretary upon receipt of any Federal levy shall forthwith remit same to the Federal Secretary." Rule 9 is headed "POWER TO IMPOSE FINES" and contains provisions empowering the imposition of fines on members. Those fines are paid to the Union. Rule 30 is headed "FUNDS" and the opening words of that rule are set out:- "The Union shall raise funds by contributions, levies and fines, which funds, together with any other moneys received, may apply for the following purposes:-". It is common practice for the rules of associations, including organizations under the Act, to contain provisions for funds to be raised from members by "contributions, levies and fines". In the context of rules of organizations, each of those words has a well known meaning. The word "contributions" (sometimes the word "subscriptions" is used instead) has the meaning of a charge imposed upon members of a regular and periodic kind by which the association obtains funds to enable it to carry out its objects. The word "levies" has the meaning of a charge imposed upon members or a group of members for the purpose of raising additional funds, over and above those provided by contributions. Levies may be imposed for general or specific purposes of the association. The word "fines" has the k 8 te aS oe re A ee a a ee kn meaning of a charge imposed upon a member for a breach of the rules of the association. Having reqard to these meanings, it is certainly most desirable, even if not essential, that any resolution of an association imposing a levy on members should specify the purpose for which the levy is being imposed or struck. That statement of purpose enables the members to see whether the stated purpose is one permitted by the rules of the association. In Williams v. Hursey (1959) 103 C.L.R. 30, one of the matters raised was whether a levy "struck to assist the Labor Party in the election campaign" was valid. In that case, the Hurseys refused to pay the levy alleging it was invalidly imposed. In discussing contributions and levies provided for in the rules of the Waterside Workers' Federation, Fullagar J. said at p.57:- "Both the federal rules and the branch rules contain other general references to 'levies' ... but these do not carry the matter further beyond making it clear that the imposition by the governing body of a 'levy' on members is the method contemplated of raising, for the general or special purposes of the federation and the branch, funds over and above what will be provided by the ordinary annual contribution or subscription." A consideration of the rules of the Union and particular rules 6 and 8, makes comment applies to the present case. in it clear that the same Tow ee or eee Freee eee we ae ee. In the present case, the resolution of 22 May 1984 does not specify the purpose for which the charge of $5.00 is imposed. There 1s no evidence as to what that purpose was. The only indication that the charge is a levy imposed under rule 8 is the use of the words "by way of a levy". Every other indication appearing in the resolution supports the view that the charge is a contribution. The Union ticket is said to be increased. This must refer to the cost of a membership ticket imposed by rule 6. A membership ticket is issued on payment of the contributions. It is true that the issue of the ticket is conditional; it is issued "conditionally that all fines and levies due are paid". That provision authorises the refusal of a membership ticket to a member who, having paid his contribution, has not paid the amount of any levy or fine due. That provision constitutes a method of enforcing payment of moneys owing by way of levy or fine; it does not make the payment of the levy or fine part of the consideration for the issue of the membership ticket. The wording of the resolution suggests that the charge of $5.00 is to form part of the consideration for the membership ticket and thus, in reality, forms part of the contribution. Further, the charge of $5.00 is to be a regular and periodic charge payable at the same time as the contribution imposed under rule 6. The charge has all the attributes of a contribution. nee we eee FS Pee re atte a ary '-"h Se OO - 10 - It is true that a levy under rule 8 may be imposed on a regular and periodic basis. That is made clear by that part of the rule which provides that the levy "shall not exceed ten dollars ($10) per week per member". This must he read as a gloss on the requirement that a levy is to be paid "within twenty-eight days from the date of the striking thereof". Even though a properly worded resolution may require payment of a levy at regular and periodic times, the resolution in this case cannot be said to have been properly worded for that purpose. It is also true that a levy may be for general or special purposes, but in the present case, no purpose has been expressed. For these reasons, we are of opinion that the charge of $5.00 imposed by the resolution of 22 May 1984 is, in reality and in law, a contribution under rule 6 of the rules of the Union and is not a levy under rule 28. Tt follows that the resolution is invalid since it imposes a contribution over and above the maximum amount of contribution that could have been imposed lawfully under rule 6 as it then = stood. Accordingly, the appeal should be allowed and an order made that the respondents and each of them perform and observe the rules of the Union by treating as null and void the resolution passed by them on 22 May 1984, namely "that the Union ticket be increased by way of a levy of $5.00 per half-yaar". —— — er See ee Wie! AA ene. Ps Bred ate sper - ll - In these circumstances, it is not necessary to consider the alternative contention put on behalf of the appellant. We do not propose to make the second order sought by the appellant. We do not express any opinion on the question of whether, in an appropriate case, an order of the type sought could be made. On the assumption that the Court has the power to make such an order, we would refuse to make it in this case for a number of reasons. There is no evidence that the appellant objected to making the payment. If he had objected, he could have commenced his proceedings testing the validity of the resolution and seeking orders that he be issued with his membership ticket upon payment of his contribution of $50.00. There is no evidence that any other member objected to the payment of the additional $5.00. We were also informed from the bar table that a large number of the respondents are no longer members of the Committee of Management of the Victorian Branch. In these circumstances, any order directing the respondents to take "all reasonable steps to refund" the $10.00 to the appellant or to other "members and former members of the Union" would be inappropriate. SET II SST Sa ees Tceniy chat Bis and th TEN (I wo) SSCS ANNE pages are @ tee capy aff the Herons for Fudgmend Eecein ef the L | Herauhls. Ma, deaiee (Qeeclacl, the A S Henourude ti. Seshee Evert ane! the. Henevadtle hic Sustice Nectar Press 4 co r — Kanneliar Dated: (C| ese SO ARR a NO Se \ rete ee ee a ee we poe weet ee