S74 CATCHWNIRES Industrial law - registered organization - performance or observance or rules - pranch - separately reqistered State union - entitlement of oranch to representation on Federal Council - whether full amount of capitation fees paid - duties of person holding office in both branch and State union. Industrial law - registered organization - validation - expiration of four years from doing of an act - whether acts done by persons purporting to exercise power conferred by or under rules - whether validation would do supstantial injustice. Industrial law - registered organization ~ validity of rules - four davs'' notice of Federal Council meetings - notice deemed to be received twenty-four hours arter posting - balance Latween speed and representation - whether possible bad faitn relevant. Industrial law - registered organization - validity of rules - election - colieqiate electoral system - whether ex officio member of electing body can be re-elected to office. Industrial law - registered organization - validity of rules - minimum number of members of branch committee of management - quorum - whether majority of actual members constitutes quorum. Industrial law - costs - whether proceeding instituted vexatiously or without reasonable cause - relevance of rule nisi procedure - test to be applied - whether claims in one proceeding can be split. Conciliation and Arbitration Act 1304 ss. 411)\5), 133:1l)ia), Leo (litadcc), l4l, 171F, 171G, 197A. ~ Genetf v. Peterson (1980) 45 F.L.R. 64 Moore v. Doyle (1369) 15 F.L.R. 59 Bailey v. Krantz (1384) 55 A.L.R. 345 Re Application by Tanner for an inguiry into an election in the YVactorian Branch of the Federated Clerks Union of Australia \Pederal Court of Australia, Gray J., c4th October 1386, not yet reported) Bailey v. Krantz (1325) 13 I.R. 339% Cook v. Crawtord (1582) 62 F.L.R. 34 Doyle v. Australian Workers Union (18th July 1386, not yet reported) O'Sullivan v. Australian Workers Union (1938) 39 C.A.R. 323 Hay v. Australian Workers Union (1944) 53 C.A.R. 674 R. v. Dunphy: Ex parte Maynes (1978) 139 C.L.R. 482 O'Neill v. Eqan (13978) 20 A.L.R. 421 Gordon v. Carroll (1975) 27 F.L.R. 129 Dey v. Victorian Railways Commissioners (1949) 78 C.L.R. 62 General Steel Industries Inc. v. Commissioner ror Railways (N.5.W.) (1964) 112 C.L.R. 125 Heidt v. Chrysler Australia Ltd. (1376) 26 F.L.R. 257 Rk. v. Moore; Ex parte Federated Miscellaneous Workers Union Ch et, Australia (1978) 140 C.L.R. 470 Marsh v. Adamson (1385) 5 F.C.R. 124 RUTH MARGARET GENEFF v. F.E. PETERSON & ORS. & THE CLOTHING AND ALLIED TRADES UNION OF AUSTRALIA GRAY J. 5TH DECEMBER 1986 MELBOURNE IN THE FEDERAL CuURT UF AUSTRALIA + WESTERN AUSTRALIA OISTRICT REGISTER: ! INDUSTRIAL DIVISION ! BETWEEN: RUTH MARGARET GENEFF Applicant AND / F.E. PETERSON, BRENDAN WOOD, L. FARRELLY, IT. BRYDEN, J. DREVER, R. BROOMFIELD, ©. GEORGE, Rk. SMITH, K. BOYD, F. McGARRT, K. COLLINS First Fespondents AND THE CLOTHING AND ALLIED TRADES UNION UF AUSTRALIA second Respondent JUDGE: GRAY J. DATE: 5TH DECEMBER 1996 WHERE MADE: MELBOURNE MINUTE OF ORDER THE COURT DECLARES AND ORDERS :- l. The application of section 171F of the Conciliation and Arbitration Act 1304 to the rollowing acts: \a) the banking from time to time of monies received by the Western Australian Branch or che Clothing and Allied Trades Union of Austraiia in a bank account or bank accounts in the name or tne Western Australian Clothing and Allied Trades Industrial Union of Workers or any name similar thereto; (b) the division from time to time or contributions received by the Western Australian Branch of the Clothing and Allied Trades Union of Australia into separate parts and tne allocation of one part or some parts tnereor to tne Western Australian Branch or tne Clothing ana Alliea Trades Union of Australia and tne stner vart or other warts thereor ' co tne Western Austrailan Clotning and Allied Trades Industrial Union of Workers; .c) tne adoption by the Executive Committes or a Teanerar. meeting of che members of tne Western Australian Brancn st the Clotning ana Aiiiled Trades Union of Australia of Financial accounts in respect or the year ended 3JuUth November 1530, to the extent to which runds recaiveda were divided in the said financial accounts netween "contriputions" and 'speciai levy - West Australian Union'; td) the payment py or on benair of the Western Australian Branch of the Clothing and Allied Trades Union of Australia of amounts py way of capitation fees im the years 198u, 1581 and 13582, and the receipt of those amounts by or on behalf of the Federal Council or the General Secretary-Treasurer of the Clothing and Allied Trades Union of Australia; (e) the adoption by a general meeting of members of the Western Australian Branch of the Clothing and Allied Trades Union of Australia on 10th February 1382 of financial accounts in respect of the year ended 30th November 1981; (f) the adoption by the Executive Committee of the Western Australian Branch of the Clothing and Allied Trades Union of Australia in April 13682 of financial accounts in respect of the year ended 30th November 1931 would do substantial injustice, having regard to the interests of the Clothing and Allied Trades Union of Australia, the members or creditors of the Clothing and Allied Trades Union ct Australia, or persons having dealings with the Clothing and Allied Trades Union of Australia. 2. So far as it has not been discharged previously, the Rule to Show Cause 1s discharged. 3. The respondents application for costs 1s refused. Note: Settlement and entry of orders 1s dealt with by Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA |: t WESTERN AUSTRALIA DISTRICT REGISTRY) No. W.A. 2 of 1384 ) } INDUSTRIAL DIVISION BETWEEN: RUTH MARGARET GENEFF Applicant AND F.E. PETERSON, BRENDAN WOOD, L. FARRELLY, T. BRYDEN, J. DREVER, R. BROOMFIELD, C. GEORGE, R. SMITH, K. BOYD, P. McGARRY, K. COLLINS First Respondents AND THE CLOTHING AND ALLIED TRADES UNION OF AUSTRALIA Second Respondent JUDGE: GRAY J. DATE: 5TH DECEMBER 1986 REASONS FOR JUDGMENT On 2nd February 1984, a Rule to Show Cause was granted to the applicant in this proceeding. The group of natural persons described as the first respondents in the title to the proceeding, are members of the Federal Council of the Clothing and Allied Trades Union of Australia ("the Federal Union"). The Federal Union itself is described as the second respondent. The applicant 1s a member of the Federal Union, and, by virtue of her ot position as Secretary of the Western Australian Branch of the Federal Union, 15 a member of the Federal Council. The Federal Union 1s an organization of employees, registered pursuant to the Conciliation and Arbitration Act 1904 ("the Act"). In 1ts original form, the Rule to Show Cause called upon the respondents to show cause why a number of orders pursuant to Ss. 141 of the Act should not be made, compelling the first respondents to perform and observe the rules of the Federal Union in various ways, and why a number of orders under s. 140 of the Act should not be made, declaring that various rules of the Federal Union were in contravention of 5s. 140(1). The applicant had previously instituted proceedings against members of the Federal Council of the Federal Union, and the Federal Union itself, making claims under ss. 140 and 141 of the Act. On 29th July 1980, she was granted a Rule to Show Cause in matter no. W.A. 5 of 1980. Subsequently, she sought leave to make widespread amendments to that Rule to Show Cause, both to eliminate claims which were conceded to be unsustainable, and to add others which were more in accordance with the terms of the Act and the rules of the Federal Union. Some of the amendments proposed were disallowed, and others were allowed. The judgment of the Court dealing with the proposed amendments is reported as Geneff v. Peterson (1980) 49 F.L.R. 64. By notice of motion filed on 2nd April 1984 in this proceeding, the respondents sought the discharge of most of the paragraphs of the Rule to Show Cause, on grounds that they were - 3 - frivolous, vexatious or without reasonable cause. One of the matters of complaint was that some of the orders sought were in the same terms as che amendments which had been rejected in no. W.A. 5 of 1530. In other respects, 1t was contended that the relief sought could not be granted. On 27th July 1984, Toohey J. struck out a number of paragraphs of the Rule to Show Cause, and gave leave to amend it in other respects. His Honour also reserved until the trial the question of amendment in one respect. Matter W.A. no. 5 of 1980 was finally discontinuéd in 1984, upon the respondents to that proceeding moving for its dismissal for want of prosecution. One other proceeding should also be mentioned. On 7th April 1981, the applicant obtained a Rule to Show Cause directed to the members of the Federal Council of the Federal Union, pursuant to s. 141 of the Act. The proceeding was N.S.W. no. 38 of 1981. Two days after the grant of the Rule to Show Cause in that proceeding, an application for interim orders was heard before Morling J. in Sydney. Counsel who appeared for the respondents in that proceeding conceded to the Court that he was unable to submit that a prima facie case had not been made out. The Court therefore granted an interim order directing the Federal Council to allow the applicant to participate at a meeting which was then taking place. On 15th May 1981, matter N.S.W. no. 8 of 1981 was dascontinued on the application of the applicant. It is convenient to summarize the matters that were in contention at the commencement of the trial in the present ~4- proceeding. By far the most important of these matters was a claim pursuant to 5s. 141 of the Act for an order that the first respondents perform and observe the rules of the Federal Union by recognizing the right of the applicant to be permitted to attend all meetings of the Federal Council of the Federal Union, so long as the applicant should remain the Secretary of the Western Australian Branch. Associated with this was a claim for an order directing the first respondents to perform and observe the rules of the Federal Union by paying to the applicant a sum of money equivalent to the air fare expended by her in travelling to Salamander Bay in New South Wales in April 1981, for the purpose of seeking to attend the Federal Council meeting. The respondents conceded at the trial that the applicant would be entitled to this order if she could establish her entitlement to attend that Federal Council meeting. In turn, that entitlement depended upon whether the Western Australian Branch of the Federal Union was financial, in the sense that 1t had paid to the Federal Council all capitation fees due by it under the rules from time to time. The principal question which divided the Parties was the question whether the Western Australian Branch was financial at a number of relevant times. In his opening, counsel for the applicant stated that he would be contending that, even if the applicant had been excluded validly from the Federal Council meeting at Salamander Bay, she would still be entitled to a refund of her air fare, as she had acted properly in travelling to Salamander Bay for the purpose of attending the meeting. There also remained several claims for orders pursuant -5- to s. 140 of the Act, which occupied considerably less of the time taken by the trial. In the first piace, there was an attack on the validity of r. 16(e), which provides that not less than four days' notice in writing shall be given to all members of the Federal Council of meetings of that body, and that such notice shall be deemed to have been received twenty-four hours after posting. In the second place, complaint was made as to the validity of the rules providing for the election of the General Secretary of the Federal Union. In substance, these rules require a collegiate form of election, the General Secretary being chosen by and from the Federal Council, of which he is also a member by virtue of his office. It was contended that the provisions of the Act required a system under which the General Secretary must face some form of election by members of the Federal Union generally, or of a branch, at some stage in the electoral process. The final complaint under s. 140 of the Act dealt with the rule specifying the number of members required to compose an executive committee of a branch, and with the requirement as to the quorum at a meeting of such an executive committee. It was contended that these numbers were so large as to make 1t extremely difficult for a small branch, such as' the Western Australian Branch, to comply. The one remaining matter, which depended upon s. 141 of the Act, involved allegations of non-compliance with a rule requiring the Federal Secretary to submit an industrial dispute to branch secretaries before submitting it to the Conciliation and Arbitration Commission. In the course of the trial, this claim was abandoned, 1n circumstances which will be described ~6- more tully later in this judgment. The trial beqan in Perth on adth April 15336, and proceeded for 9 days. It resumed on l6th June 1986, and proceeded for another 8 days. The applicant was represented by Mr. Nisbet, and the respondents by Mr. Kenzie 9.C. and Mr. Kimber. In the course of Mr. Nisbet's opening, some discussion occurred as to the possible effect of s. I171F of the Act, in validating acts which had been done more than four years ago. Mr. Kenzie then indicated that, in order to protect the respondents' position, an application would be made pursuant to s. 171G of the Act, seeking a declaration that the operation of s. 171F would do substantial injustice. Such an application was duly made by notice of motion, filed during the trial. Because of the complexity of the factual matters, it is convenient to deal with various aspects of the case under headings. I shall deal First wath the question of the financial status of the Western Australian Branch, and then with the remaining matters. Uncontested Facts On 18th July 1902, there was registered under the legislation of the State of Western Australia a union now known as the Western Australian Clothing and Allied Trades' Industrial Union of Workers ("the State Union"). The State Union has remained registered under the laws of Western Australia since that time. On 6th December 1907, the Federal Union was registered under the Act. It has remained registered since that time. At all material times, the Federal Union has had a branch in each state of Australia, except Tasmania. There ais no evidence as to the date on which the Western Australian Branch ("the W.A. Branch") first came into existence. In the late 1960's, the operations of the W.A. Branch and the State Union were at a low level. The person who nominally held the office of secretary had been elected to Parliament, and had devoted himself less to the duties of the office of secretary than was desirable. State awards had not been updated regularly, there were few members, and little money was received by way of contributions. Some attempt was made at the federal level to rope into federal awards clothing manufacturers operating in Western Australia. In 1970 or 1971, an arrangement was made whereby the applicant would become secretary of the W.A. Branch, for the purpose of reviving it, and expanding and continuing its operations. This arrangement involved at least the respondent Peterson, who at all material times held the office of General Secretary-Treasurer of the Federal Union. It was necessary for the Federal Union to amend its rules so that the applicant, who was not a member of the Federal Union, could become a branch secretary. After this arrangement was entered into, the applicant became the branch secretary. New members were enrolled, partly through her efforts, and partly through the efforts of the respondent Peterson. He made representations to ai clothing - 8 - manufacturer in the eastern states which let out some of its Making up work to the largest manufacturer in Western Australia, Wills Industries. As a result, Wills Industries adopted a polacy of requiring all of its employees to join the Federal Union. By 1976, operations in Western Australia were sufficiently strong to enable the employment of other persons to eénroll members and collect contributions. One such person was Mrs. Jerroldaine Gilbert, who was so engaged on a part-time basis. At all relevant times, the rules of the Federal Union have provided for the fixing of the level of contributions by each branch, subject to certain quarterly minimum payments. This provision 1s currently found in r. Sif). In 19374, the rules of the State Union were amended so as to provide for a contribution rate for adults and juniors over eighteen years of age at the rate of three-quarters of one per cent of the amount fixed for Classification 16 of the Clothing Trades Award 1973 'a State award) per week, payable quarterly in advance. Juniors under eighteen were to pay half of the adult rate. Prior to 1979, the rules of the Federal Union required branches to pay to the Federal Council monies, described as capitation fees, on the basis of fifty cents per effective member. The number of effective members was calculated by dividing the adult rate of contributions into the total received for contributions and entrance fees for the relevant period. Prior to 1976, the W.A. Branch did not make the payments of capitation fees which it was obliged to make under the rules. At a meeting of the Federal Council in 1976, the Federal Council - 3 - passed a resolution waiving the arrears of capitation fees of the W.A. Branch. Since that time, the W.A. Branch has paid amounts by way of capitation fees to the Federal Council. In the years prior to 1979, the amounts of those payments were calculated hy reference to the whole amount received as contributions from persons who were members of the W.A. Branch, or members of the State Union, or members of both. At that time, a single set of audited accounts was produced for each financial period, no distinction being drawn in the accounts between monies of the W.A. Branch and monies of the State Union. The accounts from this period, which are in evidence, are generally headed with the name of the Federal Union, followed by the words "(WLA. Division)". The exception is the accounts for the year ended 30th November 1976, which are headed with the name of the Federal Union, followed by the words "(W.A. Branch)". The 1979 meeting of the Federal Council was held at Coolangatta in Queensland from 14th to 18th May. The applicant was not able to attend, but Mrs. Gilbert attended as her proxy. At that meeting, the Federal Council resolved to change the rules with respect to capitation fees, by adopting a rule in terms of the present rule 30(d), which is as follows: "Financial Obligation of Branches {d) Each Branch shall pay to the Federal Council during or before the months of July and January each year an amount calculated in the case of the New South Wales and Victorian Branches at the rate of 15% of income received by way of members' contributions and in the case of the Queensland, South Australian and Western Australian Branches at the rate of 10% of income received by way of members' contributions and entrance fees. For the purpose of calculations the Branch's half - 10 - years shall terminate on the 3lst Mav and the 30th November respectively. Any Branch which does not pay the amount due in accordance with the foregoing by the months of July and January as mentioned herein, or has not been granted an exemption in accordance with Rule 16(b) shall pay an additional $50.00 per month until such time as the amount due is paid in full." This amendment was subsequently submitted by the respondent Peterson to the Industrial Registrar, for certification pursuant to s. 139 of the Act, and was certified on 14th June 1979. The applicant contended that there was a failure to comply with r. 17(j) of the rules of the Federal Union, with respect to this amendment. That rule requires that any proposed rule amendmenc be submitted to branches for their endorsement or otherwise at a branch meeting. It was contended that this particular amendment had not been submitted to the W.A. Branch as required. It 15 unnecessary for me to make a finding on this question; Ss. 171F(1)(c) of the Act requires that upon the expiration of four years from the purported alteration of a rule of a registered organization, the purported alteration shall be deemed to have been done in compliance with the rules of the organization. The applicant did not seek in this proceeding an order pursuant to s. 141 of the Act that the alteration to r. 30(d) be treated as null and void; nor did she seek to show, by reference to s. 171G of the Act, that validation of the alteration by the four-year rule would do substantial injustice. The 1980 annual meeting of the Federal Council was held at Adelaide. The applicant delivered a lengthy written report on behalf of the W.A. Branch. Attached to this report was a copy of -ll- the audited accounts for the year ended 30th November 1979, which showed as "subscriptions" the total of monies collected by way of contributions, without distinguishing between those collected by or on behalf of the W.A. Branch and those collected by or on behalf of the State Union. In the written report, the applicant sought to persuade the Federal Council that the requirement in r. 30(d) of the rules that the W.A. Branch pay ten per cent of its contributions and entrance fees to the Federal Council was excessive. She stated that "each member of this branch has to pay double the membership dues, compared to other States, to maintain a viable branch." She suggested that r. 30(d) be changed so that the W.A. Branch paid only five per cent of contributions. The Federal Council didnot accede to this request, but resolved to reduce the capitation fees of the W.A. Branch by half in each of the half years ended 30th November 1979 and 3lst May 1980. The audited accounts which were produced for the year ended 30th November 1980 were the first ones which distinguished in any way between contributions to the W.A. Branch and contributions to the State Union. In the revenue account for that period, there appeared the sum of $28,884.00, described as "contributions", and the sum of $16,247.00, described as "Special levy - West Australian Union". The W.A. Branch paid to the Federal Council, by way of capitation fees, ten per cent of $28,884.00, less twenty-five per cent which was intended to represent the discount which the Federal Council resolution had allowed in respect of the half year ended 3lst May 1980. Rule 16(b) of the rules of the Federal Union provides as follows: "Branches ~- How Eligible (b) Before any Branch can be represented on the Federal Council all per capita dues and levies imposed on a per capita basis shall be paid unless the Federal Council for special reasons has granted to any Branch exemption or suspension of payment for the time being. Any moneys paid by the Branches" shall be appropriated first to the payment of levies due." This provision was in operation in May 1981, when the applicant sought to attend the annual meeting of the Federal Council, which was held at Salmander Bay in WNew South Wales. The Federal Council resolved not to accept her credentials as representing the W.A. Branch, on the ground that the W.A. Branch was unfinancial. While the meeting continued, the applicant went to Sydney, instructed Messrs. Commins and Co., solicitors, and instituted the proceeding in this Court which became no. N.S.W. 8 of 1981. She was represented by a Mr. Johnston of counsel. In her application for an interim order, she put in evidence the text of two purported resolutions, one of a general meeting of the W.A. Branch, and one of the State Union, alleged to deal with contributions for the Federal Union. A more detailed reference will be made to this telex, and to the purported resolutions. For the present, 1t¢ 1s sufficient to say that reliance was placed on these purported resolutions as having fixed contributions by members of the W.A. Branch to the Federal Union at $40.00 per year, for the year ended 30th November 1980. As has already been said, the interim order was granted. - 13- Following the proceedings ain court, Mr. Johnston agave advice to the applicant concerning the 'Moore v. Doyle" problem, arising from the separate registration of the Federal Unicon and the State Union. The reference 1s to Moore v. Doyle (13569) 15 P.L.R. 59. This advice was first given orally, and subsequently in wratten form, dated llth June 1981. In or about July 1981, the applicant took long service leave. She remained absent from the office until some time in February 1982. In her absence, Mrs. Gilbert acted as Secretary. While the applicant was absent, the auditors performed the task of producing audited accounts in respect of the year ended 30th November 1981. The accounts so produced were headed with the mame of the Federal Union, followed by the words "(W.A, Division)". For the first time, however, two separate sets of accounts were produced, purporting to show the financial dealings and positions ot the W.A. Branch and the State Union respectively. The amount shown for contributions i1n the W.A. Branch accounts was not the full amount of contributions which had been received from members. No amount was shown as a special levy. In the W.A. Branch balance sheet, there was shown as an asset the sum of $18,236.00, described as "loan to the Western Australian Clothing and Allied Trades Industrial Union of Workers". Items which had previously appeared in balance sheets, such as deposits in the United Credit Union Society Limited, furniture, a printing machine, a Toyota Corolla Station Wagon, office premises, and a deposit in the Commonwealth Savings Bank were not shown 1n the W.A. Branch balance sheet. The auditor's report was expressed to be subject to three qualifications in the following terms: "(1) That the President and his committee had the necessary authority to transfer various assets and liabilities of this union to The Western Australian Clothing and Allied Trades Union of Industrial Workers. (2) That receipts from members contributions could be allocated between the two union bodies on the basis presented to us. (3) That expenses paid could be allocated between the two union bodies on the basis presented to us." The accounts were accompanied by a letter from the auditors, which contained the following: "The accounts have been prepared on the basis that two separate entities exist although we have no legal opinion on this position. The matter will need to he further clarified in the ensuing year with your Federal Council and Committee. Due to the separation of the accounts we have not prepared a statement of receipts and payments since there has been some intermingling of transactions between the two divisions. These have been sorted out to some extent and we consider that the transactions will be clearer in the forthcoming year." The accounts as produced, with these qualifications, were adopted by a general meeting of members on 10th February 1982. When she returned frrom long service leave, and became acquainted with the form of these accounts, the applicant took steps to have them redrawn. She sent a telegram to the General Secretary-Treasurer, stating that the accounts which had already been forwarded (by Mrs. Gilbert) were "incorrect", asking that they be "held in abeyance", and stating that corrected financial statements would be sent when completed. She also forwarded to the respondent Peterson a copy of a letter from the auditors, dated 26th March 1982, saying: "In February we issued an Audit Report on your financial operations for the year ended 30th November, 1981. Since completion of this Report, additional relevant information has come to our attention which shows cause for a review of those accounts. On completion of this review we will either confirm the accounts or issue an amended set. It 15 requested in the interim that you hold the present accounts in abeyance, We apologise for the inconvenience this may cause." The result was that the same auditors prepared a new set of accounts. The most notable features of this new set were that 1t contained no reference to any loan to the State Union, and no qualifications in the auditor's report. The new accounts were received in April 1982. They were accompanied by a letter from the auditors, which contained the following: "It appears that there 15 some confusion over the accounts for The Clothing and Allied Trades union of Australia (W A Division) and The Western Australian Clothing & Allied Trades Industrial Union of Workers as at November 30 1981. As you are aware the accounts for both unions had previously been consolidated into one Profit & Loss Statement and Balance Sheet, however, on this occassionCsic.] separate accounts had been prepared. At the tame of preparing the first set of accounts for both unions, funds lodged with the United Credit Union Society Ltd were in the name of the Western Australian Clothing and Allied Trades Industrial Union of Workers and consequently the amount invested, namely $11,567, appeared on that union's Balance Sheet. This amount also comprised part of the loan to this union as~ shown um the Clothing & Allied Trades Union of Australia iW A Division) Balance Sheet. We were later advised that these funds were invested in the wrong name and we prepared amended accounts to reflect this situation. The name shown on the United Credit Union Society Ltd investment accounts has been changed to The Clothing and Allied Trades union of Australia (W A Division). A loan between the two unions arose because of the separation - 16- of the amalgamated Balance Sheet as at November 30 1980 unto two Balance Sheets. Certain assets were considered to belong to the Western Australian Clothing & Allied Trades Industrial Union of Workers, ancluding the unvestments with the United Credit Union Society. Other assets, such as plant and equipment and the deposit on the office premises, were also incorporated into the accounts of the Western Australian Clothing & Allied Trades Industrial Uniom of Workers. The ancorporation of these assets created the loan between the two unions. In the amended set of accounts, this loan was @liminated by withdrawing the funds invested with the United Credit Union Society, back into the Balance Sheer of the WA Branch of the Federal Union. Also motor vehicle costs were incorporated back into the revenue account of the Federal body anda small amount of ansurance expense was adjusted between the two unions. These adjustments, together with a transfer of $4,532 from the accumulated funds of the Federal body to the State union, eliminated the need for a loan between the two union bodies. If the Balance Sheets, as at November 30 1981, are consolidated into one, then the situation would be similar to that as at November 30 1980. We emphasise that the confusion has only arisen because of the requirement to have two separate sets of accounts, one for the W A Branch of the Federal union and the other for the Western Australian union. We trust that this will explain any problems in connection with the accounts." The applicant then invited certain members of the Executive Committee of the W.A. Branch to meet with aMr. Edwards, a solicitor, to dascuss the question of these accounts. Mr. Edwards sought to explain to these members of the Executive Committee (including Mrs. Gilbert, and the Branch President, Mrs. Margaret Holland) problems which were said to arise from the "Moore v. Doyle" situation. Following this conference, the Executive Committee met and purported to adopt the second version of the accounts. That version was never put to a general meeting. Mrs. Gilbert, as a trustee of the W.A. Branch, signed the second version of the accounts. This version was then ~ 17 - inserted in the W.A. Branch minute book, immediately after the minutes of the general meeting of 10th February 1982, and before the minutes of a meeting which was held in March 1982. The first version of the accounts does not appear in any minute book. Later in April 1982, at his own request, the respondent Peterson attended a meeting of the Executive Committee of the W.A. Branch. On a Sunday afternoon prior to this meeting, the applicant gathered together the members of the Executive Committee at her home, and sought some expression of support. Mrs. Gilbert told her that the members of the Executive Committee would support her, provided she had done nothing illegal. There is some controversy as to what occurred at the meeting attended by Mr. Peterson. The respondent Peterson also attended a subsequent meeting in Perth in June 1982. The object of this meeting was to hear charges against the applicant, relating to her conduct of the affairs of the W.A. Branch and the State Union. The auditor was present at this meeting. The meeting was disrupted by supporters of the applicant, and did not achieve its purpose. Capitation fees were paid by the W.A. Branch to the Federal Council on the basis of the amount shown in the second version of the 1981 accounts as contributions. At subsequent meetings, the Federal Council has continued to reject the applicant's credentials as representing the W.A. Branch, on the grounds that the W.A. Branch has not paid ats full capitation fees. e Applicant' s Contentions The applicant s evidence was that, at all times from when she became Secretary in 13570 or 1371, the State Union and the W.A. Branch functioned side by side as separate bodies. All members were treated as members of both, without regard to whether they had signed application forms in respect of each. On @ach occasion prior to May 1981 when a meeting was held, whether a general meeting or a meeting of the Executive Committee, joint meetings were held. In other words, there was not an opening and closing of a State Union meeting, followed by am opening and closing of a W.A. Branch meeting. There were, however, according to the applicant, separate minutes maintained in respect of the State Union and the W.A. Branch. It was left to her, so she said, to allocate matters resolved upon at the joint meeting as between the two separate sets of minutes. There were tendered in evidence at the trial separate minute books which purported to be those of the State Union and the W.A. Branch. Each was a large leather bound volume, which had apparently been used to record receipts and payments of monies in the past, but to the pages of which are now adhered type-written minutes. More will be said of these minutes at a later time, as they are crucial to the outcome of this case. In addition to separate minutes, the applicant gave evidence that there were at all times separate bank accounts, one in the mame of the State Union and the other in the name of the W.A. Branch. Her case was that at all times monies received were paid into the bank account in the name of the State Union. From there, sufficient was transferred to the bank account of the W.A. - 19 - Branch to pay capitation fees to the Federal Council. In this way, if inno other, the applicant maintained that the State Union became entitled to the whole of the money which was collected as contributions. This position was bolstered somewhat by her evidence that forms of authority to deduct contributions from wages, which were filled in by members, so as to authorize those deductions by their employers, were such as to require a deduction in favour of the State Union. In addition, the applicant maintained that, from time to time, contributions were separately fixed by the W.A. Branch at the minimum required by the rules of the Federal Union, whereas the rules of the State Union required a higher amount, being three-quarters of one per cent of the wage rate for classification 16 in the State Clothing Trades Award on a weekly basis. Because the State Union had the money, the applicant claimed that 1t also had any assets which were acquired. In 1980, at or about the time when argument took place over the amendment af her 1980 Rule ta Show Cause, the applicant received some legal advice from Mr. H. Olney Q.C. (as he then Was). She began to sé@parate the contributions received from members, paying a certain portion thereof into the W.A. Branch bank account, and the balance into the State Union hank account. The amount paid into the W.A. Branch account was said to be the amount of federal contributions, fixed by the W.A. Branch. The amount fixed for the year from lst December 1979 to 30th November 1980 was said to be $40 per member. The balance was the difference between the federal contribution and the State Union contribution. - £0 - The applicant claimed that the recording of some amounts of contributions received as 'Special levy - West Australian Union" in the 1580 revenue account was the result of advice she received from other trade union officials in Perth. She gave evidence that she had consulted such other officials after being requested to do so by the Executive Committee of the W.A. Branch, and was told that other unions only paid capitation fees to their federal bodies on part of contributions collected, calling the remainder a levy. She was then given a direction by the Executive Committee, so she said, to adopt this practice, a direction which she was "more than happy to follow". This alleged direction 15 nowhere recorded in the minutes. As has already been said, in May and June 1581, the applicant received oral and then written advice from Mr. Johnston of counsel. The tenor of this advice was to the effect that the W.A. Branch and the State Union were completely separate entities, and had to be conducted as such. This would have involved ensuring that all members were enrolled properly as members of both, and the complete separation of meetings, books of account, bank accounts and elections. Mr. Johnston suggested ways in which the affairs of the State Union and the W.A. Branch could be conducted. In the first instance at least, these ways involved seeking the co-operation of federal officials. The applicant did not seek such co-operation. She instituted what was described as a "card drive", the object of which seems to have been to ensure that every person enrolled as a member signed two application cards, one for the State Union and one for the Federal Union. The applicant went through the records of persons - 21 - already enrolled as members, and caused to be prepared such application cards, so as to enable existing members to join whichever body they had not already joined. On her evidence, the card drive was conducted predominantly by presenting application forms for membership of the Federal Union to the members, who were enrolled already as members of the State Union. It was put on behalf of the applicant that the respondents 1n some way had accepted the correctness of her position. She claimed that, when the respondent Peterson attended a meeting of the Executive Committee in April 1982, the only comment he made on the finances of the W.A. Branch was to suggest that the balance sheets be re-consolidated. The applicant viewed this suggestion as impracticable, in the light of the advice she had received from Mr. Olney and Mr. Johnston. Further, when the respondent Peterson was at the meeting in June 1982, he faaled to confront the auditor, who was also present, about the accounts of the W.A. Branch. Central to the applicant's case was the proposition that the second version of the 1981 audited accounts represented the true position, namely that the State Union owned the money and assets which had been purchased with it, except to the extent that contributions had been collected in accordance with the Federal Union's rules. The first version of the 1981 accounts was incorrect in showing a loan from the W.A. Branch to the State Union (the implication of a loan being that repayment might be required), and the auditor's qualifications were unwarranted. Evidence was called at the trial from an accountant to explain -22- the adjustments which had been made as between the first and second versions of the 1981 accounts. On the applicant's case, the auditor's qualifications properly disappeared from the second version of the accounts, as they were unnecessary in the first place. The applicant's primary position was that contributions for the Federal Union had been fixed from time to time by the W.A. Branch at the minimum amount laid down by the rules of the Federal Union, and on 14th November 1979 at $40.00 per year. In the alternative, 1f the Court were to find that the W.A. Branch had not so fixed the contributions, 1t was suggested that contributions for the Federal Union had not been fixed at ail, and the Court should find that members in Western Australia were only obliged tao pay ta the Federal Union contributions at the minimum rate specified in the rules from time to time. The applicant's case was that monies which had been paid to the Federal Council, purportedly by way of capitation fees, involved an overpayment. This claim was the result of calculations made by the accountant who gave evidence, on the basis that contributions were fixed in the manner for which the applicant contended. The Respondents' Contentions As to factual matters, the respondents relied largely upon the evidence of Mrs. Gilbert and Mrs. Holland. Their evidence was firm that, not only was a single meeting conducted on each relevant occasion, but a single set of minutes was read, ~ 23 - confirmed and kept. At no time were contributions for the Federal Union fixed separately from those of the State Union. The vast majority of authorities for the deduction of dues from wages were in a form or forms requiring deduction in favour of the Federal Union. The card drive which was begun in 1981, according to Mrs. Gilbert and Mrs. Holland, was concerned predominantly with getting members who were already enrolled as members of the Federal Union to enroll as members of the State Union also. An analysis of records which was made by one Catherine Crawford, and set forth in an affidavit tended to show a mixture of new State Union and new Federal Union cards in the card drive. Ms. Crawford was not cross-examined upon that affidavit. The respondents argued that the evidence favoured the view that contributions for the Federal Union, fixed by the W.A. Branch, were fixed at the same level as those for the State Union, namely three-quarters of one per cent of classification 16 in the State Clothing Trades Award, ona weekly basis. If this was so, it followed from the respondents' evidence that the monies collected from members were all or mostly Federal Union monies; even if those monies, or some of them, were paid intoa bank account in the name of the State Union, this did not operate to vest those monies in the State Union. Any such payment into a State Union bank account was a payment made without authority, and could not operate to divest the Federal Union of its funds. Assets which were purchased with the funds were therefore assets of the Federal Union. The respondent Peterson gave evidence that, at the meeting of the Executive Committee of the W.A. Branch which he attended 1m April 1982, he expressed concern about the 1980 accounts of the W.A. Branch, and about the diversion of funds to the State Union. This evidence was confirmed by Mrs. Gilbert and Mrs. Holland, both of whom attended the meeting. They also stated that the applicant remained mute at that meeting, in clrcumstances in which they expected her to attempt to justify her actions. Because of the disorder which occurred at the June 1982 meeting, it was said to be impossible for the respondent Peterson to converse with the auditor about the finances of the W.A. Branch. It was put that the actions of the applicant in puporting to divide the contributions, and in causing to be produced the second set of 1981 accounts, were part of a deliberate attempt to transfer funds and assets to the State Union, s0 as to avoid having to pay the full amount of capitation fees on behalf of the W.A. Branch. The respondents contended that this attempt had no legal validity, so that the obligation remained to pay capitation fees in respect of the whole amount of contributions received. As a result, there was an underpayment, the W.A. Branch was not financial, and the applicant was not permitted by the rules to attend meetings of the Federal Council, without being granted an exemption or suspension of payment under r. 16(b). The Minutes The minute books, which I have described already, were produced from the custody of the applicant as Secretary of the W.A. Branch and the State Union. They were tendered in evidence by the respondencs. Counsel for the respondents, in their final address, asked the Court not to accept the validity of the minutes, 50 far as the applicant was responsible for their content. There are to be found in the minute books minutes of resOlutions which, on the face of it, support the applicant's case. The following appears in what purport to be minutes of a meeting of the W.A. Branch, held on 14th December 1971: "Union Dues. The Federal Union Dues to remain according to Rule 5 of the Rules of the Union, but State Union has increased its dues and advise that Males $4.00 quarterly Females 3.00 or $12.00 annually. Dues paid annually to be $1.00 less for a cash discount. Part time employees shall pay $2.00 a quarter or $8.00 per year." In the State Union minute book for 7th March 1972 there appears the following: "It was Moved by Dunbar seconded by Grey that State Union Membership be accepted only on the agreement that the proposed member agree to become a Western Australian Branch Member and that Contributions as set out in Rule 5 of the Federal Union Rules be a component of the contributions and levy of the rates as set by the December 1971 meeting, for the Western Australian Union Carried." What purport to be the minutes of a general meeting of the W.A. Branch on 9th May 1973 contain the following: "Moved Mrs. Holland seconded Mrs. Grundy that Union dues be 1% of the award wages of all members this was passed but the Secretary suggested that 1t be phased in in 51x months time and that Union dues in this Branch remain at - 26 - 1.25 as required ain Rule 5. The State Union has indicated that 1t will change its Rules towards encompassing the A.C.T.U. recommendation of a percentage of an award amount, 50 that automatic adjustment of contributions will occur for State Union contributions and the percentage of this Branch 1s set by the Rules of the Federal Rules of the Clothing and Allied Trades Union of Australia, and no Rule changes has heen submitted by Federal Council to this Branch, we should let contributions stay as they are. The meeting concurred." The following entry appears in what purport to be minutes of a meeting of the State Union in November 1973: "Moved M. Ridley 2nd C. Rejyek "That contributions to the Western Australian Clothing and Allied Trades Industrial Union of Workers Perth, are to be considered as partially Contributions to the W.A.Branch of the Federal Union and that the proportion of such contributions be the same as set out in Rule 5 registered Rules of the Clothing and Allied Trades Union of Australia. CARRIED. " What purport to be the minutes of a meeting of the State Union held on 10th December 1975 contain the following: "Moved K.Gallow and Seconded E.Burns that the audited figures of the November Audit as presented by our Union Auditor Mr.C.Hansen be accepted and that the affiliation fees to Federal Union be transferred into the Federal Bank account and that the Secretary pay to the Federal Office before the 31.1.76 affiliation fees owed by the Western Australian Branch of the Clothing and Allied Trade Union of Australia Carried." There are minutes 1n the separate books which purport to record meetings of the W.A. Branch and the State Union respectively on 12th December 1978. The W.A. Branch minutes contain this item: "Contributions as per State Union Rules have been increased but the Federal Contributions to remain according to Rule 5. This was moved by J. Gilbert and and J. Reilly and Carried." - 77 =- a? The State Union minutes record the following: "Moved Gilbert 2nd Reilly that the dues for next year be corrected to their right amount for the following year according to the Union Rules which makes them Weekly $1.10 Quarterly $14.30 with $52 being annual discount ticket, but $57.20 for those who donot buy annual ticket. Junior half senior rates. The Federal Branch contributions to remain the same as is in Rule 5 of the Clothing and allied€sic.J Trades Union of Australia. Carried." In what purport to be minutes of a meeting of the State Union held on 14th November 1979, the following passage appears: "The Secretary reported thate[Csic.J Indexation hearing has been deferred and Maternity Leave cases are still continuing. she also reported that because of indexation increases the Union needs to increase dues to conform with the Western Ahustralianf€sic.J Registered Rules of 3/4% of Classification 16 of the State Award. After Discussion Moved J.Gilbert. Seconded B.Wood that we only increase State Union dues by 10 cents a week as from April 1980. The Federal Contributions still to remain as required by Rule 5 of the Federal Clothing and Allied Trade Union of Australia, but because other Branches of the Union appear to charge $40 the 1980 contributions as delineated in Clause 30 (d) of the Federal Rules, shall be $40 for entrance fees and contributions for that year,[Esic.1] It was Moved J. Gilbert, 2nd B.Wood that for Rule 30 (d) of the Federal Rules that Federal Contributions for the year 1980 be $40 and that State Union dues be increased by 10 cents. The affillaation fees as required be paid into Federal Branch Account to be paid before January 3lst 1980) Carried." In what is acknowledged to be the W.A. Branch minute book, there are found minutes, also purporting to be those of a meeting on 14th November 1979. These minutes contain the following passage: "SECRETARY REPORTED - RAISE IN DUES The Secretary reported the Indexation hearing has been deferred and Maternity Leave cases are still continuing. She also reported that because of indexation increases the Union needs to increase dues to conform with the Western Australian Union registered rules of 3/4% of Classification 16 of the State Award. After discussion - 28 - Moved J.Gilbert, Seconded B Wood that we only increase State Union dues by 10 cents a week as from April 1980 the Federal Union contributions to be 340 per year. CARRIED." A good deal more will be saad about this minute of 14th November 1979, at a later stage. What purports to be the minutes of a State Union meeting held on 14th May 1380 contain the following passage: "The Secretary's Report The Secretary Reported on the Federal Council Conference held in Adelaide and that a motion that the Western Australian Branch of the Federal Union should pay 5% capitation fees was lost. Instead it was moved by delegate Phillipos, seconded by P. Watkins that Federal Council make a donation to the W.A. Sranch equal to 50%of the capitation fees paid and payable by that Branch for the six months period Ended November 1979 and additionally that the 51x monthly period ending May 1980 the branch be relieved of paying 50% of its Capitation Fee for the six Monthly period to May 1980.. It was moved, B.Wood 2nd R.Geneff that we must force the Federal Council to abide by the Rules of the Federal Union to enact the obligatory Rule 17(n) 50 that our affiliation to the Council must be for this year on the Rule 5 amount, but that we shall be fair in setting for this year only an amount that the other Branches say they are charging as dues, that 1s around $40. This should force the Federal Council to set Contributions for the whole Union at a rate that can be expressed and Altered into amore up dated amount than the present Registered Rules Show Carried." Again, in the W.A. Branch minute book, there appears a minute of a meeting held on 14th May 1980. This contains, in very different terms, a report by the Secretary on the Federal Council meeting held in May 1980. After expressing considerable dissatisfaction with proceedings at the Federal Council, particularly with the defeat of motions proposed by the W.A. Branch, and after discussion of the assets of other branches of - 29 - the Federal Union, the Secretary 1s recorded as having said: "With such great wealth in other states, it is not even Justice to expect a small union with no investments to pay the same capitation fee and whose union dues are $5.60 per quarter above the union fees above all other states' amounts, in fact we pay almost double capitation fees. It was discussed and it was moved that the secretary make further investigation on how we can overcome the injustices handed out by Federal Council to our Branch." It 15 of interest to note that the minutes which purport to be those of the W.A. Branch of 14th May 1980 do not purport to aunclude any fixing of contributions for the Federal Union. It was the respondents' case that the minutes which purported to set out resolutions fixing separate contribution rates for the W.A. Branch, from those of the State Union, did not record genuine resolutions with respect to the fixing of contributions, but were fabrications which had been inserted into the minute book on a subsequent occasion or subsequent occasions. For the purpose of resolving this issue, it is necessary to examine closely the minute books themselves, and a good deal of other evidence. Of the three minute books which were tendered, two have anscriptions on their flyleaves which clearly indicate that the books are intended to be those of the W.A. Branch. The third, which contains purported minutes of the State Union, has no unscription on its flyleaf, or elsewhere, to indicate what it is supposed to contain. As I have stated earlier, the books appear to have been used previously to record the receipt of monies from - 30 - numerous persons, probably by way of contributions. There 1s no indication as to the identity of the recipient of such contributions. The books contain typewritten minutes, in most cases adhering to the pages of the books. The minutes of each meeting generally bear a typed heading indicating that they are minutes of a particular body (either the W.A. Branch or the State Union), and stating the date, and sometimes the place, of the meeting. The earliest document adhering to a page of the State Union minute book is a statement of receipts and expenditure for the year ended 31st December 1951, 1n the name of "Coastal Bag Sack and Textile Manufacturers Employees Industrial Union". At the back of the book are several more financial statements from that body, relating to periods in the early 1950's, as well as financial statements which appear to be those of the State Union in respect of similar periods. The earliest available minute of the State Union is of a meeting on 26th February 1960. The earlier of the two minute books relating to the W.A. Branch contains, as the first documents adhering to its pages, financial statements of the W.A. Branch for the months of January and March 1954, followed by minutes of a meeting on 2nd March 1954. There 18 a regular series of W.A. Branch minutes, financial statements, and results of elections, throughout' the 1950''s and early 1960's. The minutes for that period give every indication that the W.A. Branch was functioning as an active branch of the Federal Union. - 31 - The State Union minutes turing tne @arly 1350 2 Give an indication wt less regular meéestings, and tne Minutes ar ni generally snorte:. than those of tne WA. Branch. Furtnec, som no Financ1al stacements for the Scate Union are Osund in the minuce iT book during that period. These undicate that the Srate Union received and spanct very little money, by cumparison with the W.aA. Branch. The Stace Union meetings were held at dirrerent times, on different dates and at different places from those of the W.A. Branch. The personnel referred to in the minutes are often different, although increasingly the same, as the years passed. A Mr. Lapham was Secretary of both bodies by the mid-1360 5, but became Secretary of the two at different times, and was indeed auditor of the State Union, at a time when he was Secretary of the W.A. Branch. The financial statements do indicate that the State Union paid small sums of rent to the W.A. Branch, and that the W.A. Brancn in turn paid larger sums of rent co the Trades Hall. On 4th April 1366, for the first time, there are recorded meetings of the W.A. Branch and State Union taking place on the same date; the minutes andicate that che state Union meeting commenced at the same time as the W.A. Branch meeting was closed. Thereafter, this practice continued regularly, with the State Union meeting on the same dates as the W.A. Branch, although not on all such dates, and with the State Union minutes tending to be considerably shorter than the W.A. Branch minutes. On Sth September 1566, the State Union minutes record the following: va 'L. Brown moved J. Curedale seconded: - "That where a member of this Union is paying contributions into the Clothing & Allied Trades Union of Australia W.A. Branch, the amount so paid shall be deemed to be payment into this Union for the purpose of satisfying rule 27, and in accordance with the power conferred on the Committeé@ of Managment in Rule 31". After debate the motion was put and carried unanimously." In the late 1360 5, the minutes of both bLodies aundicate a substantial falling off in activity. This 25 consistent with the evidence that Me. Lapham = interast in union activities declined with the advent of his parliaméntary career. The W.A. Branch minutes record a revival meeting on 3rd October 1371, chaired by Mr. Lapham, at which the applicant was "alected" as Secretary-Treasurer. A similar minute appears in the State Union minute book. Thereafter, regular minutes of W.A. Branch meetings appear in the W.A. Branch book, for some vears. Less regular and shorter State Union minutes are found in the State Union minute book. For the most part, at least, where State Union meetings are recorded as having taken place, their dates coincide with those of meetings of the W.A. Branch. The W.A. Branch minute book also contains financial statements. The State Union minute book contains none. The financial statements are half-yearlv. Up to and iuncluding the financial statements for the half year ending 30th November 1375, and aqain for the half year ending 30th November 137s, the financial statements are clearly labelled as those of the W.A. Branch. In respect of the half year ending 31st May 1976, and all financial statements in respect of periods after 30th November 1976, found in the W.A. Branch minute books, the heading adopted 15 the mame of che Fedérai Union, with the words '(W.A. Division)'. From 1376 until 13578, the minutes indicate that meetings were held sporadically, but they became regular again in 1373. During that period, the W.A. Branch minutes continued to record the transaction of more business than did the State Union minutes. In the late 1370 5 and early 1380 5, the tendency 15 for the minutes to record meetings of both the W.A. Branch and the State Union as having taken place at the same times and on the same dates. In May 1381, the practice became to record meetings as having occurred on the same dates, but at different times, the State Union meetings being described as earlier, and the W.A. Branch meetings being recorded as having commenced at or about the finishing time of the State Union meetings. During the period from 1376 to 1582, a number of points can be made about the minutes. In the first place, the persons attending a meeting are rarely listed, the attendance being described as "as per attendance book". The attendance book 1s also in evidence. It contains lists of names purporting to he the names of persons who attended meetings on various days. In most cases, the names appear to have been signed by the persons themselves, although in some cases the evidence 15 that the applicant herself wrote the names in the book. There are occasions for which minutes may be found, referring to the attendance book, but no names appear in the attendance book with reterence to the relevant dates. There are other occasions in respect of which entries in the attendance Look can be found, but ~- 34 - no Minutes exist purporting to record any meeting. In the minutes themselves, differences are to be found in type faces, style, spellings and types of paper, as between the W.A. Branch and che State Union minutes, which purport to record meetings on the same dates. As 1S snown by the entries quotea above, from November 15373 and Mav 1380, the same or Similar business 15 recorded in antirely different words. Indeed, this 15 a common feature orf the minutes which purport to record different meetings on the same dates. Une notable consistent element is that the minutes of the W.A. ranch meetings set out lists of correspondence received and sent, whereas the minutes of State Union meetings do not refer specifically to correspondence. Occasions can be found on which the minutes of a meeting of the W.A. Branch bear a signature, purporting to be that of the chairman of a subsequent meeting adopting the minutes as a correct record, whilst the State Union minutes for the same date are not signed. In some cases, minutes have been inserted in the minute books out of thelr correct sequence of dates. The evidence of Mrs. Gilbert and Mrs. Holland was that, on each occasion when a meeting took place, there was one meeting, and one set of minutes for that meeting was subsequently confirmed. The applicant s evidence agreed with this, to the extent that she said that only one physical meeting took place. Her contention was that the meeting was recognized to have been a meeting of both the W.A. Branch and the State Union, and that it was left to the applicant as Secretary to separate the business unto the appropriate set of minutes. I[t 18 wortn noting that the Minutes do not show any consistent system of separating business anto that for the State Union ana that for the W.A. Branch. To the contrary, business which might be thought to be more appropriate to the State Union 1s often found in the minutes of the W.A. Branch, and many items are dealt with in both sets of minutes. The applicant relied upon an affidavit of a Mrs. Teer, for the purpose of showing that Mrs. Teer had attended only one meeting, during the time whilst the applicant was on long service leave, and had heard Mrs. Holland state that there were two sets of minutes to be dealt with. When she was cross-examined, Mrs. Teer made it clear that she was not able to say whether the two sets of manutes referred to related to proceedings which had occurred on the one day, or whether thev were two sets of minutes from entirely separate meetings, on separate days. Her evidence was, therefore, neutral on the issue. An important aspect of the validity of the minutes was the question of signatures. Many, but not all, of the minutes after 1976, when Mrs. Holland became Branch President, bear signatures in the form "M. Holland". In an affidavit, Mrs. Holland denied that many of these signatures were hers. In her oral evidence, she stated that there were others about which she could not be sure. On the question of signatures, expert evidence was called on both sides. For the applicant, Mr. Leo Murphy conducted an examination or the minute books, the attendance book and some cheques. He was asked by the applicant to comment on the execution of some, but curiously not all, of the signatures which Mrs. Holland denied. His conclusion was - 356 - that the "M. Holland" signatures were "extremely variable", but that there was a strong probability of common authorship or all the signatures. For the respondents, Mr. Christopher anderson made an examination of the minute books and various other documents which were identified and tendered in evidence, in the precincts or the Court, over a mumber or days. He found that a number or the "M. Holland" siaqnatures were "freehand simulations" of the real signature or Mrs. Holland. As to other "M. Holland" Signatures, Mr. Anderson was unable to provide a definitive answer as to their genuineness. Each of these witnesses possessed the necessary expertise to give the kind of evidence he gave. There are some difficulties about the evidence of both. In the first place, Mr. Anderson did not have access to the minute books and other documents in his laboratory; he was forced to make do with the facilities offered by a room in the precincts of the Court. He was mot, therefore, able to examine the documents with a microscope, nor to arrange the lighting as he would have liked. In addition, the samples which Mr. Anderson used for comparison tended to contain signatures of Mrs. Holland which were executed in later years than the bulk of the signatures found in the Minute books. On the other hand, Mr. Murphy was, toa large extent, the victim of the applicant s anstructions to him. Because he was invited to consider only certain specified Signatures as questioned, he may well have made comparison between those and other questioned signatures, as well as some genuine ones. Me. Murphv seems to have cackled the job of examining some of the questioned signatures by seeking elements of consistency, rather than looking for inconsistency. Although he was not asked to report, and did not report, onall of the Signatures specified in Mrs. Holland's affidavit as denied by her, he had a copy of the affidavit, and gave evidence that all those signatures were within the sphere of strong probability of common authorship, which he round to exist. Mr. Murphy mav have been insufficiently concerned to distinguish between challenged and unchallenged signatures, and to procure specimens which were undoubtedly signatures of Mrs. Holland. This possibility was underlined at one stage while Mr. Murphy was in the witness box; using copies of a mumber of questioned signatures, he proceeded to point out features common to tnose copied. He also accepted Signatures in the attendance book as appropriate specimens for comparison, whereas Mrs. Holland denied that some of the Signatures in that book were hers, and Mr. Anderson found that some were inconsistent with his specimen signatures and there were others about which he could not form an opinion. I consider that there 15 a likelihood that Mr. Murphy may have included in his comparison samples signatures which may not have been those of Mrs. Holland; if that is the case, 1t 1s hardly surprising that he found a strong probability of common authorship of all the siqnatures. In addition, despite having access to a Microscope, Mr. Murphy conducted most of his examination of the signatures with a hand held magnirying glass. In this respect, the equipment used by him in his examination was not Significantly different from that available to Mr. Anderson. - 33 - Mr. Anderson 5 comparison samples were clearly genuine signatures of Mrs. Holland. I am satisfied a5 to the correctness of his evidence that it is unlikely that a person 5 habit ain signing her name would change markedlv between the late 1570 5s and the early 13380 s. Accordingly, the time difference between the comparison samples and the questioned signatures does not detract from Mr. Anderson s_ conclusion. In addition, Mr. Anderson was able to give detailed evidence, demonstrated by enlarged copies, of his findings as to pen lifts, hesitations and ye-touchings, all of which are signs that a signature 15 a free-hand simulation. I accept this evidence, as I do the evidence that the signatures identified by Mr. Anderson as being free-hand simulations exhibited signs of slowness in execution, and lack of pictorial similarity, when compared with specimens actually executed by Mrs. Holland. I also accept his evidence that the purported signature on the minute of the W.A. Branch on 9th May 13973 15 a tracing of an "M. Holland" signature or, 1f not a tracing, at least a free hand simulation. For all these reasons, I prefer the evidence of Mr. Anderson to that of Mr. Murphy. This evidence of Mr. Anderson 1s reinforced by other circumstances, to some of which Mr. Anderson also adverted. In the first place, there are to be found in the minute books a number of examples of the removal of documents previously adhering to pages, and the replacement of those documents by new documents. These signs include traces oft gqiuve apparently different from the glue used on the minutes presently adhered, traces of paper still adhering to the pages of the book, and not - 33 - corresponding with damage to the surface of the paper presently adhering, damage to the paper of the pages of the book, without corresponding portions of that paper adhering to the backs of the present minutes, and paper of obviously different ages from the surrounding minutes. There are instances of changes in the 51ze and age of paper used within individual sets of minutes. The applicant qave evidence that 1t was her practice to read a set of W.A. Branch minutes anda set of State Union minutes to a meeting, and then to pass those two sets of minutes to Mrs. Holland for her signature, to show that the minutes had been confirmed. Despite this evidence, there are many examples of two sets of minutes purporting to relate to meetings on one day, only one of which has been signed. In addition, examples can be found where sets of minutes purporting to relate to meetings on the same day have been signed with different pens. In respect of the period from November 1977 to May 1380, the vast Majority of State Union minutes are signed with a black pen, whereas most of the W.A. Branch minutes are signed with a blue pen. The minutes in the State Union book for 12th December 1378 and 14th February 1379 are of interest. The second page of the former minutes, and both pages of the latter, are not adhering to pages of the minute book, although there are signs that they may have been glued in and later become unstuck. The second page of the minutes for 12th December 1978 and the first page of the Minutes for 14th February 1979 are inserted at pages 456 and 457 of the minute book respectively. This means that they are back to back in the minute book (the even numbered pages of which appear on the right hand side). The signature on the second page - 40 - or the first set or minutes runs orf the paper on which the Minutes are typed. What appears to be the completion of that signature 1s found on the back of the paper on which the first page of the second set of minutes is typed. This indicates that those minutes must have been in something like their present positions when the signature on the first set was executed. There would be nothing remarkable about this, except that the first page of the second set of minutes contains an entry "minutes of previous meeting read, moved J. Gilbert seconded B. Woods that they be confirmed carried". If minutes of a meeting of 12th December 1978 were in fact read and confirmed at a meeting on l4th February 1979, and then signed in accordance with the practice as to which the applicant gave evidence, it 1s dirficult to see how the signature could be completed on the back of the farst page of the minutes of 14th February 1573 which, on this hypothesis, would not have been prepared at that stage. Even clearer evidence than this exists of ainterference with the contents of the minutes. In a number of places in the W.A. Branch minute book, entries 1n the minutes have been whited out with re-touching fluid. In some of these instances, the words which were whited out can still be read, either as indentations 1n the hardened re-touching fluid, or by examining the back of the document. With respect to meetings on 13th February 13976 and 13th October 1376, there were entries under the heading "organisers report" and 'organiser report". In the case of the earlier minute, the entire heading has been whited out. In the case of the latter, the word "organiser" has been whited out. At atime later than 1976, the applicant adopted the ~ 4] - position that Mrs. Gilbert had never been appointed an organizer, but only a collector. Between June 1380 and March 1982, various items have been whited out in the W.A. Branch minutes, in an apparent effort to make it appear that the W.A. Branch did not deal with certain matters relating to contributions, the expenditure of monies, and the acquisition of property. I have already referred to the fact that the second version of the financial statements ror the year ended 30th November 1981 appears in the minute book, and not the first version. The Minutes of the General Meeting of 10th February 1982, which adopted the first version of those financial statements, have been cut and pasted, so it is not possible to see whether any items have been omitted. Some cur1lous anachronisms also appear. In the Branch minute book, there 1s a very brief purported minute of a special meeting on 28th April 1982, at which the respondent Peterson was present with most of the W.A. Branch Executive members. The Minute simply states "Mr. Peterson addressed the meeting, and answered questions." The opening time of the meetanqg 1s 7.00pm and the closing time 9.45pm. The signature apparently in confirmation of the accuracy of this minute 1s the signature of a Mr. Chrulew, who did not become a member of the Executive Committee until so appointed in December 1982 or the early months of 1983. Subsequent minutes show that he chaired some meetings in 1983. If the purported minute of 28th April 1982 was confirmed at such a late date, it was so confirmed atherwise than zn accordance with the practice as to which the applicant gave evidence. An even more interesting anachronism appears 1n the - 42 - W.A. Branch minute book in respect of a purported meeting on l3ith May 1979. This contains what 1s described as the "Acting Secretarys keport". One sentence of this report reads "A report from Federal Conference was given also by the Acting Secretary". If such a meeting in fact took place on 13th May 1979, it would have been extremely difficult for the Acting Secretary to give a report from Federal Conference. The annual meeting of the Federal Council did not commence until the following day, 14th May, and was held at Coolangatta in Queensland. The most significant example of interference with the Minutes 15 the minute found in the W.aA. Branch book in respect of l4th November 1975, part of which I have already quoted in its present form. As 1t was typed originally, that minute bore the heading "Minutes of the General Meeting of the Clothing and Allied Trades' Industrial Union of Workers, Perth, held on Wednesday November 14, 1979, at room 6, 65 Newcastle Street Perth." At least two sets of alterations have been made to this heading, using different pens. In blue pen, the words "Industrial" and "Workers" have been crossed out and the word "Aust." has been written beside the heading. In black pen, this word "Aust." has been crossed out, and the word "Australia" written above it, an insert mark has been made following the comma after the word "Workers", and the words "(W.A. Branch)" and the initials "M.H." have been written beside the heading. tt appears that, at least two separate attempts have been made to change the original heading into one appropriate to the W.A. Branch. Further, the text of the resolution relating to dues, which I have quoted, has been altered materially. In its - 43 - Original form, the resolution read 'that we only increase State Union dues by 10 cents a week as from April 13806 the Federal Union contributions to remain at 340 per year". With a black pen, the word "remain' has been crossed out and the word "be" has been written over the word "at". uobviously, this changes the sense or the resolution; at 15 one thing to resolve that contributions remain at a particular figure, and ansther to fix them at that figure. The applicant's evidence about these alterations contained a number of inconsistencies. At first, she denied any knowledge of how the alteration to the text of the resolution came to be made. Later she admitted that she could have made the alteration herselrt, but did not recall doing so. She then conceded that the alteration was made by her, and suggested that 1t was done at the time of typing the minutes. Subsequently, she Said that she did not know when the change was made, and did not recollect it having been made after April 1981. The applicant was confronted with the problem that, when she had asked Mrs. Gilbert to send her the text of the relevant resolution by telex, to use as evidence in her application to the Court in Sydney in April 1981, the telex showed the resolution to be in the "remain at" form. Having heard Mrs. Gilbert's evidence on the subject, and seen the telex, I am satisfied that, 1n April 1981, the resolution was in its original form, and that the alteration to 1t was made after that time. I also accept that only one set of minutes was read at each meeting, and that Mrs. Gilbert farst became dimly aware of the State Union minute book when she was asked to search for the relevant resolution a second time, 50 - dd - that 1t could be sent by telex to sydney. When confronted in the witness box with obvious examples of alterations to the minutes, the applicant accepted that such alterations did appear to have been made, particularly with respect to the removal and replacement of pages. Although she was the person responsible for maintaining the minutes, and although she had sworn earlier as to their accuracy and assented to the proposition that she would be surprised to find alterations in them, she did not react with great surprise when evidence of interference was revealed. Further, she made no attempt to suggest by whom or in what manner the minutes had been altered. It must be borne in mind that the applicant carried the ultimate onus of proof in this proceeding. At a point during final addresses, the applicant was granted leave to re-open her case, and went back anto the witness box for further cross-examination. She was specifically invited to suggest by whom or how the minutes had been altered in various ways, and deciined to do sq. In particular, she was asked whether she felt that the alterations to the minutes had been done by Mrs. Gilbert or Mrs. Holland, or both, as part of some scheme to discredit the applicant. She Specifically declined to make any such allegation. The applicant endeavoured to provide evidence as to the validity of the minutes, both in her own evidence and in cross-examination, by showing that events recorded in the minutes actually occurred, or were consistent with the sorts of events which actually occurred, and that people who were recorded as - 45 - having been elected to positions were actually so elected. Such evidence does not really assist the applicant 5s case. If minutes were to be falsified, it 1s most unlikely that they would be fabricated in their entirety. The most likely course for a falsifier to take 15 to use existing genuine minutes, and to re-type them, adding extra material desired, or omitting that which is not wanted. To compose an entirely fictitious set of minutes, which did not fit the facts at all, would be to invite detection of their falsity. Having regard to the evidence of Mr. Anderson, the evidence of Mrs. Gilbert and Mrs. Holland, the findings as to the credit of the applicant, which are detailed below, a close inspection of the exhibits, and the applicant's failure to point to any possible source of interference other than herself, I find 1t umpossible to accept the minutes as genuine in all respects, especially where they purport to show a separate fixing of contributions. The minutes inthe W.A. Branch minute book for 14th December 1971 are found on two facing pages. The resolution relating to union dues, part of which 1s quoted above, 15 spread Over the two pages. The part of the resolution which appears on the second page relates to contribution rates far juniors. The first page, on which appears the purported resolution about Federal Union dues, 15 obviously considerably newer than the second. There are clear signs that this first page has replaced another document which previously adhered to that page of the minute book. The minute in the State Union book for the - 46 - corresponding date does not mention Federal Union dues at all, whereas the purported minute in the W.A. Branch minute book sets out in detail the State Union dues. The sheet of paper on which the purported minutes of 7th March 1972 appear in the State Union minute book 1s also much newer than the surrounding minutes, and has obviously replaced another sheet previouslv adhering to that page of the minutes. Tt 1s also unsigned. The minutes in the W.A. Branch minute book record the holding of a special summoned meeting of the W.A. Branch on 7th march 41972, at which no discussion of contributions 15 recorded. That minute bears a signature "A. Grey"; according to the minute book, a "Miss W. Grey" was acting chairman of the next meeting of the W.A. Branch after 7th March 1972. The minutes found in the W.A. Branch book in respect of the meeting of 3th May 1973 are on two pages. The second sheet on which the minutes are typed is smaller in size and newer than the first sheet. It 1s clearly a replacement for a sheet which has previously been stuck to the relevant page, substantial Portions of which can still be seen adhering to the page underneath the present sheet. The resolution relating to dues 15 partly on the first sheet and partly on the second sheet; the part which purports to fix contributions separately for the State Union and the W.A. Branch 1s on the second sheet. The division in the text of the resolution 1s between the phrase "in 51x months time and that" and the phrase "Union dues in this Branch". The second sheet is not signed by way of confirmation of the Minutes. The page containing the purported minutes of a meeting of the State Union in November 1973 15 also a replacement page, and a portion of another set of minutes can be seen clearly, adhering to the page ofr the minute book beneath the present sheet. The sheet itself 1s smaller, and apparently newer than those on which are typed the surrounding minutes. The hand written name "J. Beaglehole" at the foot of the sheet has been whited out. At the time, a Miss J. Beaglehole held office as branch president. She was not, however, the chairman of the Meeting the minutes of which appear next inthe State Union Minute book after that of November 1973. In addition, the date of the November 1373 meeting, in the heading of the minutes, has been altered; it was originally typed as "1972", and a handwritten alteration has made the ""2" into a "3", The purported resolution of 10th December 1975, which 1s quoted above, is also on what appears to be a replacement sheet in the State Union minute book. Again, the sheet is smaller and appears newer than the paper used for surrounding minutes. Again, it is unsigned. The resolution of 12th December 1978, which purports to fix Federal contributions at the amount specified in the rules ef the Federal Union, is that minute in the State Union book the signature appended to which runs onto the back of the next minute, which purports to be a minute of a meeting confirming the accuracy of the first-mentioned minute. It 15 a signature denied by Mrs. Holland, and found by Mr. Anderson to bea freehand Simulation. Both pages of the W.A. Branch minutes for the same date are replacement pages. The signature on the second of those pages is denied by Mrs. Holland to be hers, and is described by Mr. Anderson as a freehand simulation. I have already dealt at length with the purported - 48 - minutes of 14th November 1973 in the W.A. Branch minute book. The signatures on that and the corresponding minute in the State Union minute book are both denied bv Mrs. Holland to be ners, and are both described by Mr. Anderson as freehand simulations. The minute in the State Union book of 14th May 1980 bears a signature which 15 denied by Mrs. Holland to be hers, and which 15 described by Mr. Anderson as a freehand simulation. The equivalent minute in the W.A. Branch minute book 1s not the subject of challenge by Mrs. Holland, and falls into the category of signatures described by Mr. Anderson as those the genuineness of which he cannot determine. The only minutes which purport to contain resolutions dealing with the S@parate fixing of contributions for the State Union and the W.A. Branch cannot, for these reasons, be regarded as genuine. Further, it 15 clear that the minutes have been concocted in relatively recent times, so as to make 1t appear that, as a matter of history, the State Union was the major of the two bodies as regards the collection of contributions and the purchase of property, and that contributions were separately fixed. On the evidence before me, 1t 18 more probable than not that they were so concocted by the applicant. Clear evidence exists of steps taken by her on subsequent occasions to make earlier events fit in with the version of the facts which she wished to present. Instances are the alterations to the minute ain the W.A. Branch book of 14th November 1979, and the removal of the first version of the 1981 financial statements, and their replacement by the second version. I have no hesitation in concluding from the evidence that the applicant was also - 49 - cesponsible for other alterations to the minutes, designed to create evidence to support her case that the W.A. Branch was obliged to pay capitation fees to the Federal Council in respect of less than the full amount of contributions received from members. Credit of Witnesses On many issues, there was a direct conflict between the sworn evidence of Mrs. Gilbert and Mrs. Holland on the one hand and the applicant on the other. For some years, those persons had a close association. In 1982, after the applicant returned from her long service leave, there was a major falling out. The process may have begun earlier. There was evidence from the applicant that, before she left for her long service leave, she had told Mrs. Gilbert that the union would no longer be able to employ Mrs. Gilbert after the applicant returned from long service leave. Mrs. Teer also gave evidence of her attendance at a meeting whilst the applicant was on long service leave, and of overhearing a conversation between Mrs. Holland and Mrs. Gilbert about getting rid of the applicant. At all events, during 1982 Mrs. Gilbert and Mrs. Holland attempted to oust the applicant from office, and she in turn attempted to oust them. Proceedings were instituted, both in the Western Australian Industrial Commission, andin this Court. Locks of office doors were changed, and general meetings were summoned to hear charges. It is unnecessary to recount' the precise details of these battles. They ended with the applicant ahead, in the sense that she retained her office as Secretary. Mrs. Gilbert severed her connections with the union altogether. Mrs. Holland remains an active member, and perhaps retains the ambition to seek elected office. Both Mrs. Gilbert and Mrs. Holland gave evidence that they relt let down and betrayed by the applicant. Fach felt that the applicant s alleged conduct in attempting to promote the State Union at the expense of the W.A. Branch, without any or any sufficient consultation with the Executive Committee, was responsible for the falling out. It 1s certainly clear that the applicant did not tolerate readily those who opposed her. Part of her attempts to remove Mrs. Gilbert involved dascrediting Mrs. Gilbert as never having been entitled to be a member, and therefore as never having validly become an elected trustee. AS part of this campaign, the applicant destroyed a card, which was amongst the records which the applicant, as Secretary, kept, and which contained information as to Mrs. Gilbert's membership. The applicant was subjected to cross-examination during all or part of eight separate days of the trial. She was cross-examined in an extremely thorough and skillful fashion by Mr. Kenzie. On one of the days during her cross-examination, she suffered a health problem, which necessitated her leaving the witness box. Considering whether to accept her evidence, against that of Mrs. Gilbert and Mrs. Holland, whose cross-examination was not nearly so rigorous, I make allowances for the difficulties encountered by any witness subjected to such detailed and persistent cross-examination. - 5BL - Even allowing for these matters, however, it must be said that the applicant's evidence contained numerous inconsistencies, both within che evidence she gave in the witness box, and between that evidence and previcus statements in affidavits or otherwise. Some examples of these inconsistencies rollow. In tne first place, the applicant disclosed a curisus ambivalence about the purported resolution of 14th November 1575 (the resolution which appears in the W.A. Branch minutes as fixing contributions to the Federal Union at $40). In the proceedings in Sydney in May 1981, she relied on that resolution, as a means of showing that the Branch was financial. In an affidavit filed in this proceeding, she conceded the absence of a resolution splitting contributions between the W.A. Branch and the State Union. In the witness box, she resisted lengthy cross-examination directed to the validity of the minute of Il4th November 1979. In re-examination, she clearly denied that any meeting of the W.A. Branch had set contributions. Leave was given to Mr. Kenzie to cross-examine her further, andin this cross-@xamination she claimed that her answer im re-examination Was wrond. In a written report to the Federal Council in May 1977, the applicant stated that contributions payable to the W.A. Branch were fixed at three-quarters of one per cent of classification 16 of the Western Australian State Clothing Trades Award. Despite this, her case in this proceeding was that contributions had never been so fixed, but had been fixed separately for the W.A. Branch, or alternatively not fixed at all. In a report to Federal Council in 1380, and again in an affidavit filed ain the 1980 proceedings in this Court, the applicant stated that contributions payable to the W.A. Branch were at the rate of $62.40 per annum. This was completely inconsistent with her case in the present proceeding that such contributions were only $40 per annum. Her claim in evidence that the figure of $40 per annum was chosen to "be fair' to the Federal Union was hardly consistent with the proposition that Federal Union contributions were previously fixed at a much lower figure. Rather, the fixing of the figure of $340, as a matter of fairness, suggested a reduction, not an increase. In the witness box, tne appiicant ainitialiv denied having given instructions to the auditors as to how the 1981 financial statements were to be prepared, before she left on long service leave, and also denied asking the auditor to remove the qualifications in the first version of those financial statements, on her return from long service leave. She later retracted both of these denials. She also retreated from the bold assertion that she had actually seen Mrs. Holland sign ail of the minutes which purported to bear Mrs. Holland's signature, to giving evidence of a system of signing minutes. In an affidavit filed in this proceeding, she assented to Mrs. Gilbert's proposition that, in discussing the advice received from Mr. Johnston of counsel, sne cold Mrs. Gilbert that the Union was "operating correctly". In the witness box, she gave evidence that Mr. Johnston's advice revealed to her that the operation was mot correct as amatter of law. She also made - 53 - contradictory statements about the extent to which the respondent Peterson spoke about the rinancial situtation of the W.A. HSranch at the meeting which he attended in April 1982. There are other indications of the preparedness of che applicant to make extravagant statements to support her position, whether on oath or otherwise. In response to her claim that the respondent Peterson had failed to comply with r. 27(a) of the rules of the Federal Union, in that he had failed to submit to her industrial disputes, before submitting them to the Australian Conciliation and Arbitration Commission, the applicant received detailed affidavit evidence from the respondent Peterson as to the communications made to her on that subject. Thereafter, she gave sworn evidence, adopting particulars given by her of disputes which she claimed were not submitted in accordance with the rule. This sworn evidence was given by rererence to a number or proceedings ain the Australian Conciliation and Arbitration Commission, which were designated by their numbers. Mr. Feterson investigated the nature of each of the proceedings, and gave evidence to the erfect that none was the submission of a dispute to the Australian Conciliation and Arbitration Commission, but Most involved variations to existing awards, which variations were within the ambit of disputes previously found to exist. Mr. Peterson was not cross-examined at all on this avidence. In his final address, counsel for the applicant abandoned the claim. Another example of the willingness of the applicant to make unfounded allegations was the allegation, made in this proceeding, that the respondent Peterson consistently refused to - 34 - tell her on what grounds the Federal Council regarded the W.A. Branch as unfinancial. This pose of uninformed wonderment does not sit well with a letter of the applicant which 15 1n evidence, which indicates clearly that by July of 1982, she had seen a Federal Council auditor's veport, which stated: "Western Australian membership contributions wasfsic.J restructured to show a reduced amount, therefore, the amount received represents less than 1lu% of members totai contributions and entrance fees". Nor does the applicant s stand of ignorance on the 13s5sue f1t happily with the ract that the situation leading to allegations of unfinanciality was one of her own creation. It was also established that the applicant had told lies, other than ain relation to court proceedings, for the purpose of representing the position to be as she apparently would have liked it. In a letter dated 30th March 1383 to the respondent Peterson, signed by the applicant and other members of the Executive Committee of the W.A. Branch, there appears the following passage: "We are extremely sorry that the attitude of yourself and Council has not altered since you were aware that the Industrial Relations Bureau had investigated this Branch thoroughly after the insinuations of Council by passing the Motion at the Federal Council September 30th to October ist, 1381. This Motion was that Federal Council does not accept the basis upon which the Branch 1s attempting to calculate Capitation Fees to the Federal Council. In particular the attempt to divide Members contributions between two allegedly separate Unions in€sic.J an erroneous interpretation ofr Rule 30td). The I.R.B. anvestigated us after an ex-Member, believing this Motion, complained to the I.R.B. who advised you, mo doubt as they advised us, that our Branch was correctly persuing£fsic.J its legal requirements and was financially affiliated with Council, and that the Motion as passed at Federal Council would come within the - es - category or Section l40id) or the Conciliation and Arbitration Act, l3ju4, aS contrary to facts or our Members also being Members of the Registered Union of the Western Australian Clothing and Allied Trades Industrial Union of Workers, Ferth. ' It was completely ralse, as the applicant admitted in the witness box, to claim that the Industrial Relations Bureau had advised that the W.A. Branch was "financially affiliated with Council". One matter involving falsehoods on the part of the applicant, both in and outside the proceeding, concerned the wording of forms of authority to deduct contributions from wages. In her affidavit, Mrs. Gilbert stated that a particular form of deduction authority was in use consistently, and annexed a copy of a form which was appropriate for deduction of contributions in favour of the Federal Union. The appiicant replied in an arfidavit that the form sworn to by Mrs. Gilbert had never been used, and that she (the applicant) would never have allowed a deduction authority in that form to leave the orfice. Deduction authorities from the three major clothing trades employers in Western Australia were produced to the Court and tendered. Of those in use prior to 1982, the substantial majority were worded 50 as to require deductions in favour of the Federal Union, although there are to be found some in the name of the State Union. The three employers concerned employ the great majority or members of the W.A. Branch and State Union in Western Australia. In more recent years, there has been a tendency for deduction authorities to be ina form appropriate for deduction in favour of the State Union. This may well have had something to do with efforts on the part of the applicant to bring about such a situation. On 21st August 1585, the applicant wrote to - 5B - the manager of each of the three major employers in the following terms: "We have appreciated over the years that vou have continued deductinq your sStarrs€sic.J] Union Dues and forwarding them to our Office. Qur Auditor has pointed out that cheques arriving at this Urfice need to be made out to the Western Australian Clothing & Allied Trades Industrial Union of Workers. We would be obliged if future cheques could be made ouc to that Union." From the applicant 5 evidence in the witness box, it is clear that at no stage did any auditor give any advice to the effect alleged in that letter. By letter dated l4th November 1985, the Manager of the largest of the three employers pointed out that that employer 15 a respondent to a Federal award, stated that he found 1t difficult to understand the auditor's request, and asked for reasons for the change proposed. On 25th November 1985, the applicant responded to this request in the following terms: "The Awards of a Union have nothing whatsoever to do with the Union Rules, as frequently Unions have no Awards whatsoever. Une such Union 1s the Commonwealth Bank Union, whose members have no Awards, but their membership fees are removed by the bank and sent on to the Union. Within our State Rules we have a deeming clause, whose funds you remove from our members. The Western Australian Clothing & Allied Trades Industrial Union of Workers 1s the name that the cheque should be sent in, and we look forward to receiving your next cheque under that name." It 15 to be noted that no attempt 15 made in this letter to explain any reasons for any request of any auditor. Further, to the extent to which the rules of the State Union could be said to un contain a "deeming clause", suck a Clause 15 found in rv. Siditcys of those rules. which fixes contributions, and then contains the following proviso: "Provided always that the Committee of Management may reduce the amount of contributions in this paragraph to members who can prove they have paid contributions for the same quarter to the Cliothing and Allied Trades Union of Australia, Western Australian Branch." Mr. Weinbauer, the manager of Willis Industries, and Ms. Munday, the pay clerk from that company, both gave evidence of attempts by the applicant to introduce deduction authorities in favour of the state Union to that company. Even making allowances for the heavy cross-examination to which the applicant was subjected, and the difficulty she Faced on one day with her health, her evidence cannot be regarded as satisfactory. As the cross-examination proceeded, she tended more and more to resort to the statement that she could not recollect particular things. The more it became obviocus ta her that inconsistencies in her evidence were being pursued, the more she claimed she could not recollect. Her demeanour in the witness box did not inspire any confidence in her veracity. One final point on this aspect of the case 1s the absence of corroboration of the applicant's evidence on many issues on which corroboration would have been available. On a couple of minor matters, the applicant did call witnesses. She applied for and was granted leave to re-open her case during final addresses, in order to call a witness about an allegation which was inno way central to the resolution of the case. Despite this, the applicant made no attempt to call persons who were members of the Executive Committee at relevant times, persons who were employed an the W.A. Branch office at relevant times, the auditors who Prepared the 1931 financial statements, or the solicitor wno advised the members of the Executive Committee to accept the second version of those financial statements. I find Mrs. Gilbert and Mrs. Holland to be credible witnesses, and am unable to find substantial inconsistencies in their evidence about important matters. For these reasons, wherever the evidence of the applicant differs from that of Mrs. Gilbert or Mrs. Holland, I accept the evidence of Mrs. Gilbert and Mrs. Holland. Further, even where the applicant's evidence 15 not directly contradicted, I am loath to accept it unless 1t 1s corroborated by documentary evidence from a source independent of the applicant. Findings on Contested Facts In dealing with the issues which have arisen in this Case, 1t 1S necessary to remember that the Court 15 not determining competing claims to property and funds as between the State Union and the Federal Union. In this proceeding, the State Union 1S not a party and has not sought to intervene. Any findings which I make as to entitlements to funds are made on the evidence before me, and are applicable as between the parties to these proceedings. It as, however, necessary for the Court to make findings, particularly as to the entitlement of the Federal Union or the State Union to funds, since one of the major issues in the case 1s whether the W.A. Branch had paid all the Capitation fees it was obliged to pay at the relevant times. ul 3 ~ Comparison should be made with the discussion in Barley v. Krantz (1984) 55 A.L.R. 345, especially at pages 351-354. In the present case, the State Union was not a party, and no order was sought directing any person to perform any duty in relation to the State Union in any particular way. Iam satisfied that, at least from the early 1370 5 until 19380, the W.A. Branch and the State Union were operated for all practical purposes as if they were one Union. There is no real question of one or other having ceased to exist or to function or never having existed, as was the case im Moore ov. Doyle (1369) 15 F.L.R. 53 and some other cases; ostensibly, both were in active operation. It is, however, apparent that the dominant body, the one which carried on most activity, was the W.A. Branch. The fact that most of the members in Western Australia were employed pursuant to awards made under the Act, and had executed deduction authorities in favour of the W.A. Branch, suggests this. It 1s strongly supported by the form in which accounts were produced before the words "W.A. Division" began to be inserted in their headings, and even thereafter, ain the sense that only one set of accounts was produced, apparently um succession to the earlier, obviously W.A. Branch, accounts. To the extent to which invalidities mav have occurred in the Operation of the W.A. Branch in those periods, s. 171F or the Act now deems the various acts of those purporting to administer the W.A. Branch to have been done in compliance with the rules of the Federal Union. The Court 15 required, therefore, to treat those acts as valid. Further, to the extent to which persons had not become members of the Federal Union in Western Australia by - 60 - reason of their applications for membership having been made to the State Union, rather than to the W.A. Sranch, 1t 15 clear that those persons were treated as members of the Federal Union. Their signature of further application forms during the "card drive" entitled them to be treated by the Federal Union and its members as though they had been members during the whole or the time when they acted as and were treated as members. See 5. 171E(1) of the Act. The Court 15 also obliged to have regard to the effect of this validating provision. See Re Application by Tanner for an inguiry into an election in the Victorian Branch of the Federated Clerks Union of Australia (Federal Court of Australia, Gray J., 24th October 1986, not yet reported). Many activities at the State level could equally be conducted by the W.A. Branch as well as the State Union. Examples are the pursuit of injury claims or wage payments on behalf of members. Even though some members may have received certain entitlements by virtue of Western Australian law, the W.A. Branch was entitied to assist members in enforcing many of them. State awards were Maintained and varied by the State Union, but this evidence alone would not outweigh evidence of other activities clearly conducted on behalf of the W.A. Branch, or at least possibly conducted either by the W.A. Branch or the State Union. It cannot be doubted that the W.A. Branch received large sums of money, primarily by reason of deduction authorities in the appropriate form, directed to the Federal Union. To the extent to which this money was subsequently paid into a bank account or bank accounts in the name of the State Union, no authority existed tor the appropriation of the money in favour or -~ sl - the State Union, and the State Union did not become entitled to such money, except possibly by the operation of s. 171F of the Act. Compare Bailey v. Krantz (1385) 13 I.R. 333, at pp. 382-386, and 391-394. The subject of validation will be dealt with separately. At no time did the Branch Executive of the W.A. SHranch resolve to f1x contributions for the Federal Union separately from those fixed for the State Union. At all relevant times, contributions were set for both by reference to classification 16 in the relevant State award. There is no difficulty in the concept of a branch of a federally registered organization fixing contributions by reference to a pay rate specified ina State award. The formula for ascertaining the rate of contribution as a matter of arithmetic, and might as well be chosen froma State award as from a Federal, or from no award at all. The contention of the applicant that Federal contributions were fixed separately at all times was entirely inconsistent with the financial accounts produced before 1980, the applicant 5 own reports to various federal conferences, and her affidavit in the 1980 proceedings. In May 1980, when the applicant returned from Federal Conference, having farled to secure a lowering of the rate of Capitation fees for the W.A. SBranch, she began to operate a scheme which had as its object the minimisation of the amount paid to the Federal Council as capitation fees. I am _ satisifed that this scheme was devised and carried into effect by the applicant, and that she never had the authority of the Executive - $2 - Committee of the W.A. Branch 1n what sne did. To the extent that others took steps to further the scheme, they did s0 at the direction and upon the persuasion of the applicant, without any real understanding of the consequences. The applicant, on occasions, misled others as to the reasons for steps which she took or required them to take. The minutes found in the minute book of the W.A. Branch in respect of a meeting on 14th May 1980 have already been quoted. They tend to give away the applicant s position, assuming them to be a genuine record of what was said. There is no mention of contributions to the Federal Union already having been set at $40.00 per year, but rather a tirade py tne applicant against the Federal Council and its refusal to lower the rate of Capitation fees of the W.A. Branch, followed by a direction to the applicant to "make further investigation on how we can overcome the injustices handed out by Federal Council to our Branch". I am satisfied that, by 14th May 1980, the applicant regarded the Federal Council as having dealt unjustly with the W.A. Branch. It was this which motivated her to begin her scheme to minimize capitation fees, and also to seek the Rule to Show Cause in matter no. W.A. 5 of 1980. The scheme involved a number of actions. Minutes purporting to be those of a meeting or meetings on l4th November 1379 were inserted into the minute books ror the W.A. Branch and the State Union. These minutes purported to show the fixing of separate contribution rates for the Federal Union and the State Union in respect of the year commencing on 1st December 1579. - 63 - The insertion of these false minutes was necessary as the applicant wished it to appear subsequently that contributions for the Federal Union had been fixed at a lower rate than the rate Members were paying. Errors were made in the headings of the false minutes. Those errors came to light in April 1941, when Mrs. Gilbert telexed the headings and the text of the minutes to the applicant an Sydney, for the purposes of her application to the Court for interim orders. The applicant also then realized that the word "remain" ain the purported resolution was inappropriate; contributions to the Federal Union had never Previously been fixed at $40, so could not "remain" at that figure. After she returned to Perth, the applicant altered or caused to be altered the false minutes, so as to make the headings appropriate, and to convert the word "remain" to the word "be". Other steps involved in the scheme were the division of contributions by the banking of separate portions of them in accounts in the name of the State Union and the Federal Union, the anstitution of the "card drive", which had the effect of ensuring that all members were enrolled properly in whichever union they had not joined formally at earlier times, and the production of the financial accounts for the years ended 30th November 1980 and 1981, particularly the second version of the latter. In addition, 1t was necessary for the applicant at some stage to falsify the various minutes which now appear in the Manute books, making it appear that contributions for the Federal Union had then been fixed at whatever minimum was required under the rules of the Federal Union. These include the minutes found in the State Union minute book for 14th May 19980, from which I have already quoted, and which are totally different from the minutes in the W.A. Branch minute book for the same day. The final step in the scheme was the applicant s attempt in 1985 to change the torm of dues deduction authority in use by the major employers, 50 as to provide more authority for the diversion of contributions unto a State Union bank account. The applicant never had any authority from the Executive Committee of the W.A. Branch to fix contributions for the Federal Union at a lower rate than those fixed for the State Union. At all times, the Executive Committee fixed one contribution, which was regarded as the contribution payable by a member in all respects. It was never open to the applicant to treat all or Part of this contribution as being applicable only to the State Union. I do not accept the applicant s evidence that the Executive Committee requested her to inquire of other union officials in Perth as to how they paid capitation fees, and then directed her to cail portion of contributions received a levy for the State Union. In her evidence, the applicant was completely unable to fit these occurrences into any rational chronology of events. I am satisfied that the splitting of contributions was an idea which the applicant formed or acquired independently of the Executive Committee. Mrs. Gilbert obeyed instructions to split contributions, without any real understanding of what was occurring. The applicant''s claim that she was merely acting Pursuant to the advice of Mr. Olney and Mr. Johnston in splitting contributions cannot be accepted. She was undoubtedly advised properly that the State Union and the Federal Union were separate uy - 6 legal entities, and that 1t was necessary as a matter or law to make clear distinctions between the two in membership, office holding, administration, funds and assets. It dad not follow from this advice, however, that tne proper course was to split one contribution arbitrarily into two parts, labelling each part as belonging to a different entity. If the rules of the two entities each required the payment of a subscription, then as a matter of law, both could only be complied with by the payment of two subscriptions. If the rules of one entity provided that obligations to that entity could be regarded as being satisfied by payment to the other entity, payment of one subscription only might be sufficient. The rules of the State Union contained such a provision inr. 5(4)(ec) (the relevant portion of which has already been quoted), which was inserted into the rules in 1981. The important aspect of such a provision is that contributions paid to one entity will be the property of that entity; a provision such as ¢. Si¢)ic) cannot operate to make portion of the one contribution the property of the entity rorgiving payment to itself. In a case such as the present, 1t would no doubt he proper for the Executive Committee of the W.A. Branch to spend money on obtaining and maintaining state awards, using the State Union as a vehicle. This would be a means of obtaining award coverage for members not covered by federal awards. The position where no provision such as that found in rule 5(4)(c) of the State Union rules exists, but only one subscription 1S paid, 1S more complex. Reference 15 made to the discussion in Barley v. Krantz (1985) 13 I.R. 339 at pp. 382-384. On any view of the law in that area, however, 1t 1s clear that a - 66 ~ person who holds office in both entities has no power arbitrarily to allocate the contribution to one entity or the other, or as between the two entities. The rules of both entities bind such a Person, and he or she 1s not in a position to prefer the interests of one entity to those of the other. The applicant was asked in the witness Lox what would have happened if eliginple persons nad insisted on paying $40.00 only in 1980 or 1581, and belonging to the Federal Union but not the State Union. She was adamant that this was the last thing she would have wanted, because there would have been insufficient funds for the total operation of the W.A. Branch and the State Union 1f too many members followed suit. According to her, she would have insisted on dual membership and a full contribution. Although such an event never occurred, this evidence 15 a clear indication that even the applicant regarded payment of a full contribution as an obligation attaching to membership of the Federal Union in Western Australia, and that the division of contributions was simply an arbitrary means of dividing the contributions between the State Union and the Federal Union. Further, the applicant's actions to separate the affairs of the State Union and the W.A. Branch were done without consultation with the Federal Council of the Federal Union. If she had been genuinely attempting to put anto effect the advice received from Mr. Johnston in 1981, as she claimed, it 15 to he expected that she would have discussed with the General Secretary-Treasurer, and perhaps other members of the Federal Council, the most appropriate way 1n which the administration of ~ 67 - the two bodies could be reqularised. Instead, sne concealed tne advice. She did not disclose Mr. Jonnston 5 written advice to the other members or the Branch Executive. Instead, she seized upon some of the practical steps suggested in that advice, and used them as a means of making it appear that the State Union was separate from the W.A. Branch, and was the dominant body in the ownership of funds and property and the conduct of activities in Western Australia. It 1s clear that, by April 1382, there was disquiet both within the Executive Committee of the W.A. Branch, and at the federal level, over the finances of the W.A. Branch. I accept readily the evidence of Mrs. Gilbert and Mrs. Holland that they had little or no understanding of the explanation of dual registration, given to them by Mr. Edwards, an April 15382. Nevertheless they felt bound to accept the second version of the 1981 accounts. There is evidence from Mrs. Holland, that, when she saw the second version of the 1381 accounts, she said to the applicant: "Fred Cmeaning the respondent Peterson] 1s going to go berserk when he sees this", and that the applicant replied: "Fred can please himself." Although the applicant claimed that this conversation occurred in relation to the first version of the 1981 accounts, I am satisfied that 1t occurred in relation to the second. Further evidence of disquiet among Executive Committee members is provided by the Sunday afternoon gathering, prior to the meeting attended by the respondent Peterson, and the statements at that gathering that the applicant would have the support of the Executive Committee, provided that she had done nothing illegal. Io am also satisfied that the respondent - 62 - Peterson spoke at some length to the Executive Committee at the meeting which he attended in April 1382, about the possible consequences of the transfer of assets from the W.A. Branch to the State Union, and that the applicant made no attempt to Justity her gpoasition. In making these rindings, I have been conscious of their seriousness trom the applicant s point of view. They amount to the proposition that the applicant has, 1n a very single-minded way, sought to cheat the Federal Union out of the appropriate amount of capitation fees. I am conscious of the fact that the findings will have a marked effect upon the applicant's career as a trade union official, and also upon her working life in general. Upon a proper examination of the evidence, however, I find I have no alternative but to make the findings which I have made. It 1s not possible to accept the applicant s alternative argument that, 1f contributions for the Federal Union were never expressly fixed, the Court should hold that members of the Federal Union were only ever obliged to pay the minimum rate fixed by the Federal Union's rules. The proposition that the W.A. Branch never fixed contributions is contradicted by all the evidence from annual accounts, annual reports, and the applicant's own statements to the Federal Council and in her affidavit in matter no. W.A. 5 of 1980. The evidence suggests that the Executive Committee fixed contributions in the belief that 1t was doing so for both the W.A. Branch and the State Union, the two being regarded as one. To the extent that this - 69 - involved invalidity, such invalidity 15 mow validated by the Operation of s. 171F(1)(a)(1) of the Act. It follows from the findings, I have made that the applicant has failed to establish her case that the W.A. Branch was financial at all times. The payments of capitation fees by reference to the amounts labelled as contributions in the 1980 and 1981 accounts fell short of payments which the W.A. Branch was obliged to make, actual contributions being greater than those amounts. Unless the acts of the applicant are validated by the operation of the Act, the W.A. Branch must be regarded as having been unfinancial simce 1981. Validation The relevant parts of ss. 171F and 171G of the Act are as follows: "171F(1) Subject to this section and ta section 171G, upon the expiration of 4 years from - (a) the doing of an act - (1) by, or by persons purporting to act as, a collective body of an organization or branch or an organization and purporting to exercise power conferred by or under the rules or the organization or branch; or (il) by a person holding or purporting to hold an office or position in an organization or branch and purporting to exercise power conferred by or under the rules of the organization or branch; - 7oO - the act,...shall, for all purposes, be deemed ta have been done in compliance with tne rules of the Organization or branch. L7iGil? Where, upon an application far an order under this section, the Court 1s satisried that tne application of...section i71F to an act would do substantial injustice having regard to the interests of the organization, members or creditors or the Organization or persons having dealings with the Organization, the court shall, by order, declare accordingly and, where such a declaration is made, ...section 171F...does not apply, and shall be deemed not to have applied, in relation to the act referred to in the declaration." In the course of argument, counsel for the applicant, adopted the suggestion that 5. 171F operated to validate any of the relevant events which had occurred more than four years ago. This prompted the respondents to apply under 5. 171G, seeking a declaration that the application of s. 171F would do substantiai unjustice. Some discussion took place as to the act or acts which Might be validated by the operation of s. 171F. Possible acts are the banking of monies in separate bank accounts, particularly 1n a bank account in the name of the State Union, the division of contributions as between the State Union and the W.A. Branch, the adoption by the Executive Committee of the W.A. Branch, or a general meeting of members of the W.A. Branch, of the accounts in respect of the year ended 30th November 1980, including the division of funds received as between contributions and "special levy-West Australian Union", the payment and receipt of the amounts of capitation fees which were paid, the adoption by a general meeting of the W.A. Branch on l0th February 1982 or the first version or the accounts in respect of the year ended 30th - 7l1- November 1981 (to the extent to which such adoption might be thought to have remedied the defects of authority to which the auditors' qualifications drew attention) and the acceptance by the members of the Executive Committee of the second version of the accounts in respect of the year ended 30th November 1981. Counsel for the respondents argued that s. 171F did not apply to some ot those acts, because they were not acts done by persons 'purporting to exercise power conferred by or under the rules of the organization or branch", in that they were done without any semblance of authority under the rules at ali. Reference should be made to Barley v. Krantz (1335) 13 I.R. 339, at page 392. In my view, 5s. 171F, which is a remedial provision, should be allowed a generous area in which to operate. It would be unwise to adopt a narrow construction of the requirement that an act, to be validated, must be done in the purported exercise of the power conferred by or under the rules of an organization or branch. The purpose of the section 1s to relieve organizations of the burden of having their past administration examined in manute detail, and of old anvalidities having continuing consequences. For these reasons, 1n most cases, an act done by a purported governing body or purported official will be held to fall within the section. In the present case, such a conclusion is not difficult. The unfortunate fact 15 that all that the applicant set out to do in reducing the amount of capitation fees paid to the Federal Council could have been done if the correct steps had been taken under the rules. If the Executive Committee of the W.A. Branch - 77 - ' had been persuaded of the wisdom or fixing a lower level of contribution for the Federal Union than the contribution previously paid by all members, the rules contained a power allowing for such a contribution to be fixed. No doubt the members of the Executive Committee would have to have been satisified that they were exercising the power in the interests of the Federal Union; this may have been a reason why the applicant did not take the Executive Committee into her confidence in the carrying out of the scheme. If the Executive Committee had made a decision fixing a lower level of contributions for the Federal Union, all of the acts which are referred to above as being acts possibly validated py s. 171F would have been valid. It follows that the acts must be regarded as having been done by the applicant in the purported exercise of powers conferred by or under the rules or the Federal Union. Unless a declaration 15 made pursuant to s. 171G, those acts are now deemed for all purposes to have been done in accordance with the rules of the Federal Union. For a number of reasons, I am of the view that a declaration ought to be made pursuant to s. 171G(1). Although the Federal Council in 1981, declared the W.A. Branch to be unfinancial, no member of the Federal Council had, or had the means of acquiring, a complete understanding of or acquaintance with the steps taken by the applicant in the furtherance of her scheme. Any proceeding taken by any tederal official pursuant to s. 141 of the Act would necessarily have been speculative, in the sense that 1t would have been necessary to engage in the processes of discovery, in the hope that evidence would be found -73- that the applicant, or some other person made respondent to such proceedings, could be compelled to disgorge on behalf of the W.A. Branch some greater amount or amounts of money than were paid over. Any attempt by the General Secretary-Treasurer to conduct an investigation of the W.A. Branch under the rules might have been met oy claims that matters with which such an investigation would have been concerned were affairs of the State Union, and could net be investigated. Further, and perhaps more Significantly, the members of the W.A. Branch itself were given no real opportunity to ascertain the facts, and to institute proceedings to restrain the applicant's conduct and to direct restoration of the true position. Indeed, when the members of the W.A. Branch did in general meeting adopt the accounts which contained the auditor''s qualifications on significant matters, the applicant took steps to have the accounts altered and the qualifications removed. At no time was the second version of the 1981 financial statement put to a general meeting of members of the Branch. The applicant failed to allay the disquiet of the Executive Committee in April 1982, and never attempted to explain her position to the Federal Council. Certainly, at no stage did she reveal that she had falsified minutes, in order to make it appear that the Federal Union s contributions had been fixed separately from those of the State Union. The applicant's fraudulent activities only became apparent during the interlocutory stages of this proceeding. Her explanations to Mrs. Gilbert as to the reasons for dividing contributions were in the nature of fobbing off. If the proceedings commenced by the applicant in 1981 - Th - had been continued, the financial status of the W.A. Branch would have been the major 155ue 1n them, and would have been determined a great deal earlier than it has, more than likely within the four year period laid down by s. 171F. The applicant chose to terminate those proceedings, and to raise the issue again at a later date. Even so, at the date when she commenced the present proceeding, the four year period was still running with respect to many of the relevant acts. There are suggestions in Cook v. Crawford (1982) 62 F.L.R. 34, at pages 74 and 104 by Keely J. and Sheppard J. respectively, that 1t 15 appropriate to apply s. 171G in circumstances where the four year pericd overtakes a party during the course of conducting litigation in this Court. The anterlocutory stages of this proceeding have been long, largely because of the complexity of the proceeding. It would he unfortunate if contentions which were open to the respondents at the outset were to become unavailable by reason of the length and complexity of the proceeding. Finally, it must be observed that the question of the financial status of the W.A. Branch is a continuing problem. The W.A. Branch has continued to pay capitation fees calculated by reference toa lower rate of contributions than the full rate charged to each member. The Federal Union, and the members of the W.A. Branch would suffer if the court were precluded by s. 171F from resolving the guestion of financiality on an earlier date. There is also a provision in the rules of the Federal Union under which unfinanciality has continuing consequences, which involve an increase in the amount required to be paid. Difficulty would arise in calculating how much 18 presently due from the W.A Branch in respect of some past years if s. 171F were to apply. - 75 - As was pointed out in Barley ov. Krantz (135385) 13 I.R. 3339 at p. 3933, the inquiry as to substantial injustice for the purposes of 3. 171G of the Act must be an inquiry as to what injustice flows from the consequences of the elapse of the four year period, rather than the injustice which might flow from the eriginal acts. A determination whether there 15 such substantial tnjustice must be made having regard to the interests of the Federal Union, 1ts members, 1ts creditors, and persons having dealings with 1t. It 1s difficult to see how any persons in the two last-mentioned categories could be said to suffer prejudice from the expiration of the four year period mentioned in s. 171F. On the other hand, the Federal Union and its members in Western Australia would suffer prejudice, for the reasons outlined in the preceding paragraphs. In my view, the prejudice so suffered would amount to substantial unjustice. Accordingly, 4 declaration under s. 171G(1) should be made. Conctiusion It follows from what I have said that, at all relevant times from May 1981 until the commencement of this proceeding, and thereafter, the W.A. Branch was unfinancial. The applicant was not and is not entitled to attend Federal Council meetings until the W.A. Branch pays outstanding amounts of capitation fees and other amounts required by the rules or is granted an exemption or a suspension of payment. It follows that, 1f the applicant was not entitled to be admitted to the 1981 Federal Council meeting, she was not entatled to have her fares from Perth to Salamander Bay and return paid by the respondents out of Federal funds. So far as 1t seeks orders pursuant to s. 141 of - 75 - the Act relating to those matters, the Rule to Show Cause must therefore be discharged. Notice of Federal Council Meetings Rule 16(e) of the Rules of the Federal Union provides: "Council - How Convened (e) The Federal Council shall meet annually and the date and place of such meeting shall be fixed by the Federal Council at the preceding meeting, provided that a subsequent vote of Federal council Members may alter such date or place by a two-thirds majority vote, but a special meeting of the Federal Council may be called at any time by a Majority or the members of the Federal Council voting 1n meeting assembled or voting by post, provided always that aif any one Branch desires a meeting of the Federal Council the General Secretary-Treasurer shall take a vote of the members of the Federal Council on the convening of a meeting of the Federal Council. In the case of all meetings (aincluding Special Meetings) of the Federal Council at least 4 days' notice in writing shall be given to all members of the Federal Council. Such notice shall be given by the General Secretary-Treasurer and, 1f posted, shall be deemed to have been received 24 hours after posting." The applicant contended that this rule imposes on members, particularly members of the W.A. Branch, conditions, obligations or restrictions which, having regard to the objects of the Act and the purposes or the registration of organizations under the Act, are oppressive, unreasonable or unjust, and therefore that the rule contravened s. 140(1l)ic) of the Act. She complained that the provision for four days notice in writing of a meeting of Federal Council gave to her, as the delegate from the W.A. Branch, insufficient time to travel to a meeting held in the eastern States of Australia. Further, she complained that the -747- Provision that notice shall be deemed to have been received twenty-four hours after posting exacerbated the difficulty of shortness of notice. She supported this by some evidence of the length of time sometimes taken by items in the mail to reach Perth from Sydney, where the head office of the Federal Union 15 Situated, She also pointed to the fact that the rule would operate to deem an item posted on a Friday to be received on a Saturday, when it would not in fact be received. In circumstances when public holidays occurred, such as at Easter, 1t would be possible for a delegate to receive notice of a Federal Council meeting after the meeting had 1n fact commenced, but be deemed to have received 1t im time under the rule. All of the applicant's complaints about r. 16(e) were based on the assumption that notice of a Federal Council meeting would be given s0as to allow the minimum time, and by post. There was, 1t seemed, also an assumption that this might be done out of some desire to exclude the applicant as a delegate from Western Australia from exercising her right to attend a Federal Council meeting. No evidence was given of any specific occasion on which minimum notice had been given to the applicant, or a meeting had been fixed so as to take advantage of the deeming of service to have been etfected on a Saturday or public holiday, in order to exclude the applicant. It must be remembered that the provisions complained of in vr. 16(@) are provisions for minimum notice. Further, so far as they concern the date and place of a meeting, they are applicable only to special meetings of the Federal Council. The - 78 - date and place of the annual meeting of the Federal Council are required by the rule to be fixed by the Federal Council at the preceding meeting; such date and place can only be altered by a two-thirds majority of the members or the Federal Council. Further, a special meeting may only be called after members of the Federal Council have had the opportunity to vote on whether 1t should be convened; although the precise date and place of a Special meeting may not be known until the minimum notice period, 1t will be known that the calling of a special Federal Council Meeting 1S at least a possibility. The proper approach of the Court to the application to a rule of s. 140(1)(c) of the Act has been the subject of many decisions. The most recent is the judgment of the Full Court of the Federal Court of Australia ain Doyle v. Australian Workers Union (18th July 19386, not yet reported). Reference should be made to p. 15, where the Court referred to the right of an organization to chose its own rules and internal structures, within the framework provided by the Act. There 1s also authority to the effect that, ain testing a rule of an organization against s. 140(1)ic), mo assumption should be made that the rule will be operated malevolently or in bad faith. See O'Sullivan v. Australian Workers Union (1938) 39 C.A.R. 323, at p. 325, followed in Hay _v. Australian Workers Union (1944) 53 C.A.R. 674. Section 140(1)(c) requires the Court to have regard to the objects of the Act and the purposes of the registration of organizations under the Act. A glance at the chief objects of the Act reveals a heavy emphasis on processes of conciliation and arbitration for the prevention and settlement of industrial disputes. In that process, under the framework of the Act, registered organizations play a major role. It 15 necessary for them to have rules which are conducive to the carrying out of their primary function as parties principal in the conciliation and arbitration system. That system will often require the making of decisions by the primary governing body of a registered organization. Such decisions obviously need to be made by a governing body as representative of the membership of the organization as 15 reasonably practicable. They may also need to be made with an element of speed. A balance must necessarily be struck between cumbersome procedures for notice, which would ensure that all representatives on the governing body had ample time to arrange their attendance at a meeting, and the achievement of a quick decision for the purpose of taking a step in an industrial dispute. Precisely where that balance 1s struck is primarily a matter for the choice of the organization, through its rule making procedures. Rule 16(e) provides for an annual meeting of the Federal Council of the Federal Union. Rule 16(}3) provides for voting by post when the Federal Council is not in session. If the view is taken that discussion at a meeting of the Federal Council is needed, r. 16(e) provides for the calling of a special meeting. In my view, 1t was open to the Federal Union to decide that such a special meeting could be convened on short notice; four days notice 15 not an inappropriate period. In adopting such a rule, 1t might be recognized that some delegates would have difficulty in attending a meeting convened at short notice; against this could be balanced the difficulty - 80 - of achieving quick decisions when they are needed. The question of giving priority to speedy decisions or ta full attendance is one for the Federal Union. It was also open to the Federal Union to insert the deeming provision in r. 16(e). The erfect of such a provision is to avoid the necessity to prove actual receipt by a particular delegate of notice of the meeting. In the absence of a deeming provision, the proceedings at a Federal Council meeting might be aunvalidated 1f a particular delegate happened to be absent from a branch office on the day when the notice of meeting actually arrived, and did not receive that notice until later. Nor is the twenty-four hour provision oppressive, unreasonable or unjust. Again, the question 2s one of striking a balance between speed and certainty of the arrival of notices. One further point should be borne in mind. Notice ain writing could be given to delegates by telegram or telex, or could be delivered by courier. It 18 only 1f such notice is posted that the deeming provision operates. It can well be imagined that whichever officer was entrusted with the task of convening a special Federal Council meeting would be disposed to take all steps to give delegates appropriate notice at the earliest possible date. The challenge to r. 16(e) must fail. Election of the General Secretary Rule 1l6(a)(1) of the rules of the Federal Union provides: "16 ~- CONSTITUTION OF FEDERAL COUNCIL (a) The Federal Councizl of the Union shall consist of:- (1) Four delegates from New South Wales Branch, four delegates from the Victorian Branch (who shall also represent Tasmanian members), one delegate from South Australian Branch, one delegate from the Queensland Branch and one delegate from Western Australia plus the General Secretary-Treasurer who shall by virtue of his office be a member of the Federal Council with rights equal to those of other members." The relevant parts of r. 18(a) of the rules of the Federal Union are: "18 - NUMBER OF OFFICERS (a) For all purposes the officers of the union shall consist of a President, two Vice-Presidents, three Trustees and General Secretary-Treasurer who shall be elected annually except that the General Secretary-Treasurer shall be elected every four years. The Officers of the Union shall be elected by the Federal Coucil from amongst the members of the Federal Council by secret ballot. aus The applicant's original claim was that rule 16(a) was invalid insofar as it purported to make the General Secretary-Treasurer an ex officio member of the Federal Council, on the ground that it failed to provide for the General Secretary-Treasurer to become a member of the Federal Council by either a direct voting system or a collegiate electoral system, as required by s. 133(1)(a) of the Act. She also sought orders to the effect that the respondent Peterson cease to hold himself out as holding the office of General Secretary-Treasurer, and that the first respondents declare that office vacant and call - 32 - For fresh elections to it. In his judgment or 27th July 1334, Toohey J. declined to strike out tnese claims, on the ground that their resolution depended on findings of fact being made. In his opening, Mr. Nisbet conceded on pnehair of the applicant that the claims for orders against the first respondents fell foul of either s. 14115) or s. 14116), and withdrew those claims. He also recognized that the claim with respect tor. 16(a) was expressed inadequately as 1t was restricted to a single rule, whereas the gist of the applicant's complaint was that the vice lay in the combined effect of rr. 16(a) and 18(a). With the consent of counsel for the respondents, the Rule to Show Cause was amended so as to claim in the alternative an order that rr. 16(a) and 18 an conjunction were invalid in that they failed to provide for the election of the holder of the orfice of General Secretary-Treasurer by either a direct voting system or a one trer collegiate electoral system, contrary to 5. 133, 1l)ia) of the Act. The form of this amendment 1s confusing. It 15 usually unsatisfactory to allege that particular rules of an organization contravene s. 140(1)(a), ain that they faal to make a provision required by the Act; the proper allegation 1s that the rules as a whole fail to make such a provision. If the rules as a whole do s0 fail, the proper order will not usually be that any particular rule 15 contrary to, or contravenes, s. 140(1)(a) but rather a declaration that the rules as a whole contravene that provision 1n a specified respect. These difficulties were not debated at length at the trial, and should not stand 1n the way of an examination of the substantial question which arises, mamely whether the rules of the Federal Union contain the provision required by s. 133(1)(a) of the Act with respect to the election of the holder of the office of General Secretary-Treasurer. Section 133(1)(a) of the Act requires that the rules of an organization: '(a) shall provide for the election or the holder of each office within the association or organization either by- (1) a direct voting system; or (11) a collegiate electoral system being, in the Case or a full-time orfice, a one-tier collegiate electoral system;" It 1s not disputed that the position of General Secretary or the Federal Union 1s a full-time office. Section 4(1) of the Act contains definitions of the phrases "direct voting system" and "collegiate electoral system"; these are as follows: ""Direct voting system", in relation to an election for an office in an organization, means a method of election at which all financial members, or all financial members included in such branch, section or other division, or in such class, aS 15 appropriate, having regard to the mature of the office, are, subject to reasonable provisions with respect to enrolment, eligible to vote;" ""Collegiate electoral system", ain relation to an election for an office inan organization, means a method of election comprising a first stage, at which persons are elected to a number of orfices by a direct voting system, and a subsequent stage or subsequent Stages at which persons are elected by and from the persons elected at the next preceding stage;" One further provision needs to be set out; 1t ais s. 4(5) of the Act: "(5) For the purposes of the application of the definition of "collegiate electoral system" in sub-section (1) 1n relation to an election for an office in an organization, an electoral system that otherwise complies with that definition shall be deemed to comply with that definition notwithstanding that the persons - ad - comprising a Dody of persons by and from whom persons are elected at any stage subsequent tS tne first stage include persons wnot exceeding in number 15% of the total number of the body) who are the holders of offices entitling the holders to membership of that body (which May include the office to which the election relates) but are mot members of that body by virtue of an election ain accordance with that definition, being persons each of whom has held such an office (whether the one office or not) at all times since being elected to such an office under a collegiate electoral system, or a direct voting system, as defined in sub-section (1)." It was common ground that the respondent Peterson was elected to the Federal Council of the Federal Union as a delegate from the New South Wales Branch on or about lst June 1964. Un or about 15th March 1566, he was elected py tne members cot the Federal Council as General Jecretary-Treasurer for a term of three years. As the rules of the Federal Union then stood, if the General Secretary-Treasurer held office for an initial three year term, he became eligible for re-election for subsequent terms of s1x years each. On his election as General Secretary-Treasurer, the respondent Peterson ceased to be a delegate representing the New South Wales Branch, and a substitute delegate was appointed. On or about 14th April 1969, the respondent Peterson was re-elected by the Federal Council as General Secretary-Treasurer for a further term of six years. on 6th May 1975, he was again re-elected by the Federal Council for a further term of 51x years. Following amendments to the Act, under which it became impossible for an organization to have rules providing for terms of office any longer than four years, vr. 18(a) of the rules of the Federal Union was amended to provide for a four year term or office for the General Secretary-Treasurer. On or about 6th April 1381, and again in or - §5 - about March 1985, the respondent Peterson was re-elected for further tour year terms as General Secreanary-Treasurer. In each case, the election was by the members of the Federal Council. The applicant pointed to the circular operation of rr. leé(a) and ia(a) of the Federal Union s rules. [In effect, those rules entitle the General Secretary-Treasurer to be a member of the Federal Council by virtue of his office, and make him eligible tor election to the position of General Secretary-Treasurer because he 15 a member of the Federal Council. The applicant 4 contention was that auch circularity was prohibited by the Act; unless, prior to each election as General Secretary-Treasurer, a person had been elected by the members of a branch as a delegate to Federal Council, the rules were contrary to s. 133(l)(a) of the Act, or failed to make the provision required by ut. This argument was difficult to Maintain in the face of s. 415). Mr. Nisbet attempted to confine the operation of that provision, by contending that, on its proper construction, 1t permitted the addition to an electoral college of persons not elected by direct voting system, up to 15% of the membership of the electoral college, but did not permit those unelected persons to be elected to the relevant offices. This argument encountered two difficulties. In the first place, 1f 1t were correct, an organization seeking to take advantage of s. 4(5) in its rules would be required to change its officers at each election; those who had been elected as officers, and thereby became members of the electoral college without a first stage election, would not be eligible for re-election. It would be strange 1f Parliament intended such a result. In the second - 86 - place, the High Court in R. v. Dunphy; Ex parte Maynes (15378) 139 C.L.R. 482 expressed a tentative view which runs counter to Mr. Nisbet's argument. In that case, the High Court dealt with rules which made provisions similar to those in the present case. After setting out the rules concerned, and the provisions of the Act, Mason J. at page 494 said: "For the prosecutors it was submitted that the method of election provided for by rr. 16:1) and (7) as a one-tier collegiate electoral system within the meaning of s. 13341)(a) as amended and in accordance with the requirements of the Act. There 1s, I tnmink, much to commend this view. Its correctness turns on the concluding words of s. 415). The question 15 whether 5s. 4(5) is again applied in determining whether the persons who held such offices were elected to those offices "under a collegiate electoral system...as defined in sub-section (1)". My own disposition would be to answer the question in the affirmative, in which case the Union's rules have complied with the requirements of the Act, at least since 12th November 1976." Stephen and Aickin JJ. expressed their agreement with the judgment of Mason J. Barwick C.J. preferred not to express any concluded view on the particular question, and Murhpy J. dissented on other grounds. In the circumstances, I should follow the view of the High Court, although itis, as I have said, a tentative view. It appears to me to contain a_ sensible construction ot the provisions of the Act. The rejection of Mr. Nisbet 3s argument leads to the conclusion that the Rule to Show Cause must be discharged, so far as it concerns rr. 16(a) and ld(a). Notice of Industrial Disputes The Rule to Show Cause originally contained a claim for - 37 - an order directing the respondent Peterson to pertorm and soserve vr. 27.4), by submitting to the applicant as Sacretary of the W.A. Branch all industrial disputes before they were supmitted to the Conciliation and Arbitation Commission. Rule 27(a) of the rules of the Federal Union provides: "27 - SUBMITTING DISPUTES TO THE COMMISSION (a) Before any industrial dispute is submitted by the Union or a Branch to the Conciliation and Arbitration Commission, the Federal Secretary shall submit the matter to the Branch Secretaries." In an affidavit filed in the proceeding, the applicant made allegations that matters had been brought before the Australian Conciliation and Arbitration Commission about which she had not been consulted. The respondents filed an affidavit sworn by the respondent Peterson, exhibiting many documents containing communications between the Federal office of the Federal Union and the W.A. Branch, with respect to industrial disputes which were to be submitted to the Commassion. In some particulars which were filed, the applicant referred to a number of specific matters which had come before the Commission, by quoting the numbers allocated to those matters in the Commission. She alleged that she had not been informed of those matters prior to their being brought before the Commission. The applicant swore as to the correctness of those particulars, when she was in the witness box. In his evidence in chief, Mr. Peterson swore as to the nature of each of the matters referred to in the particulars; for the most part, they involved variations to awards, which variations fell within che ambit of industrial disputes created by the service of earlier logs of claims. To the extent to which the matters involved the creation of new disputes, Mr. Peterson swore that the W.A. Branch had been given notice of those disputes prior to their submission to the Commission. Mr. Peterson was not ¢ross-examined on these matters. In his final address, counsel for the applicant abandoned this claim. The Composition of the Branch Executive Rule 42(a) of the rules of the Federal Union provides: "42 - BRANCH EXECUTIVE COMMITTEE (a) The affairs of each Branch shall be managed by an Executive Committee which shall consist of the President, Vice-President, Secretary-Treasurer, two Trustees, such number of Organisers as 15 determined by the Branch Executive Committee and 20 other Representatives elected by and from the members of the Branch. A Branch Executive Committee may determine that an Assistant Secretary and/or an additional Vice-President and/or an additional Trustee be elected in accordance with Rule 45. In such case they shall be members of the Branch Executive Committee." Rule 42(b) contains a provision that, "a majority of the members of the Executive Committee shall form a quorum." The applicant claimed that it 1s not reasonably practicable for the W.A. Branch to comply with these provisions, and that they are therefore in contravention of s. 140(1)(c) of the Act by imposing on members conditions, obligations or restrictions which, having regard to the objects of the Act and the purposes of the registration of organizations under the Act, aré oppressive, unreasonable or unjust. - az - The parties were divided on tne question of the proper construction orf tnese provisions of the rules. The applicant put forward the view that, because r. 42(a) requires a body of not less than twenty-five persons to comprise the Executive Committee, the effect of the quorum provision in rf. 42(b) 15 to require the attendance of not less than thirteen persons at each meeting. In the event that elections for the Branch Executive Committee resulted in fewer than twenty-five nominations, it became progressively more difficult to attain the necessary quorum. Indeed, there was evidence that, at various times the W.A. Branch has had fewer than thirteen members on its Executive Committee. The construction advanced on behalf of the respondents was that the quorum provision in er. 42(b) only required that a majority of those actually elected to membership or the Executive Committee need attend, in order for the quorum to be satisfied. Even if fewer than thirteen persons were found to nominate, provided that a majority of those persons actually elected attended, the meeting would be valid. On Mr. Peterson's evidence, this construction has been applied consistently by other branches of the Federal Union. In my view, the construction advanced by the respondents is the correct one. It is the construction which most assists in the practical operation of the Federal Union and its' branches. As Smithers J. said in O'Ne1ll v. Egan (1978) 20 A.L.R. 421, at p. 490: "In construing rules in a matter of this kind it 15 proper to have in mind that meetings of the governing bodies of representative organizations are essential to the achievement of the objects ef such bodies. Accordingly a resolution of questions in a= manner - 390 - facilitating the holding of meetings rather than Frustrating 1t 1s to be preferred. A meeting of the Committee of Management to conduct the business of the Branch 18 prima facie a beneficial act in the course or the Branch government and there 15 every reason to retrain from taking a narrow or destructive view of the provisions for calling such meetings. The respondents' construction in no way diminishas the requirement that a Branch Executive Committee should consist of at least twenty-five persons. If ansufficient nominations are received, then further elections must be held and further nominations called for. This process must continue, for as long as vacancies exist on the Executive Committee. In the meantime, however, a branch 1s not to be paralysed by the inability of its decision-making body to function. Even 1f this conclusion were not correct, I should not be satisfied that rr. 42(a) and (b) contravene s. 140(1)(c) of the Act. There 1s evidence that, at times, the W.A. Branch has managed to f1ll all of the positions on 1ts Executive Committee. Further, there was evidence that, at one time, there were persons who were members of the committee of the State Union, but whom the applicant had not approached to request them to be members of the Branch Executive Committee. In such circumstances, allegations of the inability of the W.A. Branch to meet the requirements of the rules sound hollow. Such allegations really amount to no more than suggestions oft inconvenience in having to find sutficient people willing to assume office. Such inconvenience does not operate to render the rules in contravention of s. 140(1)(c). Mr. Nisbet placed great reliance on a passage from the judgment of the Australian Industrial Court in Gordon v. Carroll - 41 - (1975) 27 F.L.R. 129 at pp. 168-173. The rule heing considered un that case provided that the decisions of a branch executive committee were subject to the control of the branch at general meetings, subject to the proviso that five per cent of the members of the branch were present at such meeting. The court examined the evidence as to the difficulty of securing such attendance, im the circumstances of the relevant branch of that organization. After considering previous decisions, the court concluded that the rule contravened ss. 14011l)(c). That conclusion 1s plainly distinguisnable from the present case. It 1s one thing to hold that making control of an executive committee s decisions almost impossible by setting a high quorum for a general meeting involves a contravention of s. 140(1l)(c). It 1s quite another to hold that s. i140:1)(c) requires a reduction in the number of representatives which an organization has chosen to specify as appropriate for its branch executive committees. So far as it concerns rr. 42(a) and (b), the Rule to Show Cause must be discharged. Costs The conclusions which I have reached require that so much of the Rule to Show Cause as remains in existence following the orders of the Court on 27th July 1984 must be discharged. On this basis, the respondents sought an order that the applicant pay their costs of the proceeding. They conceded that s. 197A of the Act is applicable to this proceeding. Under that section, the Court cannot order a party to pay any costs incurred by any other party to a proceeding 'except where the party against whom the order 15 made anstituted the oroceedinzy vexatiously or without reasonabla cause." The substance of Mr. Kenzie 5 argument on the question of costs was that, 1f the applicant failed on tne substantial aspect of the case, being that part which concerned the financial status of the W.A. Branch, she having already failed on a number of 18sues as to which paragrapns of the Rule ta Show Cause were discharged by Toohey J. on 27?tn July 1384, any remaining parts or the case were 30 insignificant tnat they shouid be disregarded for the purpose of determining whether the proceeding was instituted vexaticusly or without reasonable cause. He pointed out that each of tne claims made csuld have bean tne supitect of a separate Rule to Show Cause, 1n which case there would clearly have been a separate "proceeding' in respect of which s. 197A could operate. There is no doubt that the application of the section to a case such as the present 15 not easy. The choice of the expressions "vexatiously" and "without reasonable cause", with the disjunctive "or" between them is of some interest. The word "vexatious" 15 often round in rules of court 1n company with expressions such as "frivolous" and "an abuse of the process of the court'. The authorities do nor normally distinguish between these expressions. see, for - instance Dey v, Victorian Rarlways Commissioners (1343) 78 C.L.R. 62, especially at page 31 per Dixon J. tas he then was), and General Steel Industries Inc. ov. Commissioner for Railways (N.S.W.) (1964) 112 C.L.R. 125, especially at pages 128-130 per Barwick C.d. The tests which were applie in those cases are usually applied at an early Stage sf a proceading, witn reference to tne case as discissed by tne ainitiating prcortess. In such cases, the aunitiating process 15 simply that fiied by the iamitiating party, without any intervention on the part of the court concerned. The tests prescribed by s. 157A of the Act will often be applied at the conclusion of a proceeding, when the Court comes to consider the question of costs. In many cases, as must have been recognized by Parliament when s. 197A was enacted, the tests will have to be applied in proceedings which were commenced by Rule to Show Cause granted by a judge of the Court, after considering whether an arguable case was shown. Nevertheless, the focus of the seéction 15 on the institution of the proceedings, and the Court should not allow itself to be anftluenced unduly oy the actual result. Further, the use or a word such as "vexatiocusly" must have seen with the intention that the Court should take a view similar to that taken by courts considering whether to strike out proceedings on the ground that they are frivolous, vexatious, or an abuse of the process of the court concerned. For this reason, 1t must be doubted whether the phrase "without reasonable cause" has a meaning significantly different from the word "vexatiously". Some authoritative guidance on the meaning of the section 15 available. In Heidt v. Chrysler Australia Ltd. (1976) 26 F.L.R. 257, at pages 271-276, Northrop J., sitting in the Australian Industrial Court, considered the application of the section. After discussing at some length the principles applied by courts in striking out proceedings, his Honour said at pages 274-275: "Secrion 137A 15 to be considered when proceedings in the court have been completed and dismissed. The principles set out above are to be applied at an early stage of the course of the proceedings. In my opinion, Similar principles are to be applied when considering the matters raised by 5. I197A. Great care must be exercised to ensure that in finding that a party has instituted proceedinas vexatiously or without reasonable cause, that party 15 not improperly deprived of his freedom from liability to pay <sos5ts tO an opposing party. The test 1s a substantial one. In considering this matter the court must have regard to all the material properly before 1t. The test is mot subjective to the party instituting the proceedings as at the time of the institution of the proceedings. The conduct or the opposing party prior to the institution of the proceedings may be relevant in deciding whether the proceedings were instituted vexatiously or without reasonaple cause. The conduct of the opposing party both prior and subsequent to the institution of proceedings may be relevant to the discretion remaining in the court. it may be dafficult to satisfy the test where disputed questions of fact arise and the proceedings eventually are dismissed because the court finds facts adverse to the party anstituting the proceedings. Where the test 15 Satisfied, having regard to the general policy of the section, the court may, nevertheless, in the exercise of ats discretion, make no order as to costs.' Subsequently, in BR. vy. Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 C.L.R. 470, at page 473, Gibbs J. (as he then was) said: "In my opimion a party cannot be said to have commenced a proceeding 'without reasonable cause" within the Meaning of that section, simply because his arqument proves unsuccessful. In the present case the arqument presented on behalf or the prosecutor was not unwortny of consideration and ait found some support in the two decisions of this Court to which I have referred. The fact that those decisions have been distinguished, and that the argument has failed, 15 no justification for ordering costs in the face of the prohibition contained in s. 197A. I would dismiss the application for the issue of prohibition and certiorari but would make no order as to costs." Be - 955 - No other member of the High Court dealt expressly witn the question of costs, Sut the Court did not order that costs se paid in that case. More recently, in Marsh v. Adamson (1585) 5 F.C.R. 124, a Full Court, by a majority, awarded costs in respect of an appeal which had been determined to be incompetent. St. John and Wilcox JJ., who constituted the majority, did not attempt to enunciate any tests for the application of s. 137A. Their honours quoted the passage from the judgment of Gibbs J. which I have already quoted. They referred to the absence of anv authority of any substance on which arqument could be based that the appeal was not covered by a particular statutory prohibition on appeals, and vantured the further opinicn that the appeal would not have succeeded in anv eavent because of the threshold mature of tne question. In the present case, the proceeding was commenced by Rule to Show Cause, granted by a judge of the Court. This 1s some indication that the proceeding was arguable, but it cannot be regarded as conclusive of the matter. After hearing argument about a number of claims raised in the original Rule to Show Cause, Toohey J. on 27th July 1984 discharged many of those Claims. Those discharged at that stage must be regarded as not having been arguable. As to the remainder, his Honour expressed the view that the question whether they were instituted vexatiously or without reasonable cause could only be determined after an examination of the merits. In my view, those claims which related to notice of meetings of the Federal Council, and the composition of the Executive Committee of the W.A. Branch, both being claims pursuant to 5s. i406 of the Act, must be regarded as having been arguable. The claim relyina upon r. 27(a) of the rules of the Federal Union was oaséless in fact, and must be regarded as having been instituted vexatiously or without reasonable cause. Similarly, the claims made pursuant to 5s. 141 of the Act with respect to the vacation of the office of General Secretary-Treasurer of the Federal Union were barred by the provisions of s. 141(5) or (6) at the tame when the proceeding was instituted, and must be regarded as having been instituted vexatiously and without reasonable cause. The attack under s. 140 on the rules relating to the election of the General Secretary-Treasurer presents more difficulty. On the one hand, those claims were bound to fail by reason of 5. 4(5), and no sound argument was presented at the trial for the inapplicability of that provision. On the other hand, as Toohey J. pointed out on 27th July 1384, the success or failure of that claim depended upon disputed questions of fact. Further, the respondents consented at the trial to an amendment of the Rule to Show Cause, 50 as tO raise more comprehensively the issue of the validity of xy. l6(a) and 18(a), so far as they related to the process of electing the General Secretary-Treasurer. On balance, I do noc think that this claim can be said to have been instituted vexatiously or without reasonable cause. By far the greater part of the costs of the proceeding have been incurred in relation to the question of the financial Status of the W.A. Branch. That question necessitated most of - 97 - the interlocutory steps which were taken, and occupied at least minety per cent of the time of the triai. Clearly, at the time when the rule to show cause was granted, the claims directed to establishing that the W.A. Branch was financial were arquable; they were presented in the light of the rules as they existed, and depended upon the establishment of the factual allegations made by the applicant. As 1t turns out, those allegations are found to have been based upon the applicant s own fraud. There 1S a matural reluctance to permit the applicant to engage in fraudulent litigation, and to lose, But not to be liable in costs. In my view, however, I am bound 5 say that it would not be proper to apply the ultimate findings of the Court in this way an determining whether the proceeding was instituted vexatiously Or without reasonable cause. As Northrop J. said in Herdt ov. Chrysler Australia Ltd., at pages 274-275, 'the test 1s not subjective to the party instituting the proceedings as at the time of the institution of the proceedings". Section 137A 15 based on the clear policy that a party 1s not to be required to Pay costs in a proceeding instituted under the Act, simply because his or her version of the facts has not heen accepted. Even if I were of the view that the fraudulent nature of the applicant's claim with respect to the major aspect of the case was such as to make that claim one which was) instituted vexatiously or without reasonable cause, 1n my view I should still be debarred by s. 137A from awarding costs in favour of the respondents. This 1s because the section operates in relation to a "proceeding". There 1s only one proceeding before the Court, although that proceeding involves a number of separate claims, « ' each of which might have been che subiect of a separate proceeding. It 15 no doubt true, as Mr. Kenzie pointed out, that tnereé 15 gross unfairness involved in the applicant safequarding herself against costs by cnoosing to append to a major claim a smali number of mince ciaims which are undoubtedly arquable. Unfair or not, however, that 1s whac s. 197A requires. In my view, it 15 impossible to split the claims within a proceeding for the purpose or the application of s. 1 Uo TA. It might also be said that there was an element of vexatiousness in the commencement of this proceeding at a time when matter W.A. No. 5 of 1980 was still afoot. It 1s true that the institution of a second proceeding, in terms substantially the same as one already instituted, might be vexatious. It 15 also true that many of the claims originally made in the present rule to show cause were made in matter W.A. No. 5 of 1380. Not all of the clasms in the present proceeding were sco made, however. Again, the respondents are met by the difficulty that there 1s before the Court one proceeding, to the entirety ofr which s. 197A applies. For these reasons, the application for costs against the applicant must be refused. Oe ae ene A Te SEY RTE I Certify that thia ani the Preceding payesd ace a t2e capy of tha Reagong for Judgment herein of his Honour Mr, Justice Gehry Kk Associate FR ee ee