I | | _-JUDGMENT No. 634, S1u.. INDUSTRIAL LAW - membership of organisation - entitlement to membership - members expelled by union - effect of expulsion upon eligibility for membership - breach of the rules of natural justice - expulsion decision invalid ~ declaration and orders made. Conciliation and Arbitration Act 1904 s.144 Re Keogh and Federated Clerks Union of Australia; Ex parte Linehan (1979) 40 FLR 445, 451 Australian Iron and Steel Ltd v Australasian Coal and Shale Employees Federation (1957) 1 FLR 54 Zimmer-Vorhaus v Australian Institute of Marine and Power Engineers (1966) 8 FLR 468 Re Australian Glass Workers' Union (1973) 22 FLR 17 Wishart v Australian Builders Labourers' Federation (1960) 2 FLR Lynch v McLachlan (1962) 3 FLR 59 Egan v Harradine (1975) 25 FLR 336 O'Neill v Printing Industry Employees Union of Australia (1965) 6 FLR 488 Wilmot v Cooper (1956) 1 FLR 5 PETER TREVIS HENRY AND PAUL ANTHONY HENRY v THE PROFESSIONAL DIVERS ASSOCIATION OF AUSTRALASIA No. WA 7 of 1987 FRENCH J. Perth 24 November 1987 Z&,NOV 1987 FEDERAL GOU iE SOENUSTAALINY = wee ee IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) ) INDUSTRIAL DIVISION NO. WA 7 OF 1987 BETWEEN: PETER TREVIS HENRY and PAUL ANTHONY HENRY Applicants and THE PROFESSIONAL DIVERS ASSOCIATION OF AUSTRALASIA Respondent MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 24 NOVEMBER 1987 WHERE MADE: PERTH THE COURT ORDERS THAT: l. Peter Trevis Henry and Paul Anthony Henry are each entitled to be admitted as members of The Professional Divers Association of Australasia. 2. The Association 1s hereby required to treat each of them as one of its members. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal-Court Rules. wera cae ee IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY INDUSTRIAL DIVISION NO. WA 7 OF 1987 BETWEEN: PETER TREVIS HENRY and PAUL ANTHONY HENRY Applicants and THE PROFESSIONAL DIVERS ASSOCIATION OF AUSTRALASIA Respondent CORAM: FRENCH J. 24 November 1987 REASONS FOR JUDGMENT Peter and Paul Henry are father and son and are both usually employed as professional divers. Mr Henry Snr. has worked in the industry in Australia since 1969. Until 18 October 1985 both were members of The Professional Divers Association of Australasia, which is an organisation of employees registered as such under the provisions of the Conciliation and Arbitration Act 1904. On 25 October Mr Henry Snr. sent to the Association a cheque for $200.00 in payment of his subscriptions and those of his son. By a letter dated 4 November 1985 the Federal Secretary of the Association responded in the following terms:- TTR 2. "Thank you for your recent cheque for $200.00 on behalf of yourself and Mr. P.A. Henry which I have returned enclosed. Regrettably, you were both expelled from the Association on October 18 and I am unable to accept your subscriptions. In conclusion, I suggest that you contact Dick Kluczniak on (09) 335 2230 and discuss the situation with him in an endeavour to reach an understanding in regard to your relationship with the Association." Mr Henry said that neither he nor his son had been given notice of any proposed expulsion nor had they been previously advised of the fact of their expulsion. He says that he was told, although he does not say when or by whom, that he and his son had been expelled for allowing their subscriptions to fall into arrears. Subsequently he attended a meeting of members of the Association seeking a reversal of that decision, but a vote for his reinstatement was narrowly defeated. His evidence does not disclose the date of the meeting or its status under the rules of the Association. Sometime around the middle of 1987, both the Henrys sent in application forms for membership together with a cheque to cover the relevant entrance fees. Subsequentiy, Mr Henry Snr. spoke with the Federal Secretary of the Association, Mr Don Macdonald, who acknowledged ee pepe i he 3. receipt of the application and the cheque. Macdonald said to him:- "We are not cashing it yet until Mr Kluczniak looks at your books." Henry says he knew from previous discussions with Macdonald that he was referring to the books of a private company in which he had an interest. On 27 October 1987 the Henrys filed an application for declarations under s.144 of the Conciliation and Arbitration Act that they are entitled to be admitted as members of the Association and for orders requiring the Association to treat them as members. The application and supporting affidavits were served on the Association at its registered office in Melbourne on 30 October. Also served at that time was a notice of motion for summary judgment returnable on 17 November. Affidavits by both applicants were subsequently filed and served deposing to their belief that the Association has no defence to the claims. On the return date of the motion the Association, which has filed no appearance, did not appear. 4. The events which led up to the application have already been set out substantially as they appear from the affidavit Material. As such they give only a fragmentary picture of the real nature of the dispute between the parties. It seems unlikely that the expulsion of the applicants was based solely on their failure to meet arrears of subscriptions. Indeed, the reported reference by the Federal Secretary to a need to inspect the books of a private company with which Mr Henry Snr. was associated, suggests that 1t may be their status as employers rather than as employees, that has given rise to the problem. I think it appropriate to make the general observation that in summary judgment proceedings the presentation of an obviously incomplete account of events to the Court does not make its task any easier, nor 1s it likely to inspire confidence in its decisions. Nevertheless, the bare bones of the case for the applicants is presented and, in the absence of any answer, that may be sufficient. To determine whether that is so, it is necessary to consider both the provisions of s.144 and the Rules of the Association. we frome oe Dt btn So etn ap sate Te + - 4 PT ID Statutory Framework The application is brought under s.144 of the Conciliation and Arbitration Act which declares the entitlement of certain classes of person to the membership of registered organisations and the means by which they may give effect to it. Sub-section 144(1), which establishes the basic right to membership, confers upon persons who are not of general bad character and who are eligible for membership in an organisation, the dual right to be admitted to the union and to remain a member for so long as they comply with its rules - Re Keogh and Federated Clerks Union of Australia; Ex parte Linehan (1979) 40 FLR 445, 451. Correspondingly there is an obligation on the part of the union to admit the person so entitled - Australian Iron and Steel Ltd v Australasian Coal and Shale Employees Federation (1957) 1 FLR 54, 56. The statutory right to membership depends upon eligibility under the rules of the relevant union and in that respect sub-s.144(2) provides:- "(2) Sub-section (1) does not entitle a person to be admitted as a member of an organization unless he is included in a category of persons who are eligible for membership of the organization under the rules of the organization, or to remain a member if he ceases to be so included and the rules do not permit him to remain a member." 6. Sub-section 144(3) defines the categories of person who are "employed in connection with an industry" or "engaged in an industrial pursutt":- "(3) For the purposes of this section - (a) a person whose usual occupation is that of employee in an industry or engagement in an industrial pursuit; or (b) a person who 1s qualified to be an employee in an industry or to engage in an industrial pursuit and desires to become such_= an employee or so to engage, shall be deemed to be employed in that industry or to be engaged in that industrial pursuit." Provision for an application to be made to the Court for a declaration as to entitlement to membership and for the jurisdiction of the Court is made in sub-ss.144(5) and (5A). The powers of the Court in connection with such an application are extended in sub-s.144(6) to include the making of an order requiring the union to treat a person entitled to membership as one of its members and where such an order is made that person becomes, by force of the Act, a member of the union. Rules of the Organisation Rule 3 of the Constitution and Rules of the Association describes the relevant industry in the following terms:- frm oat eim eterna meneenne ner = me ae epee wees, BN ee a ge een Toon Tel oppress 7. "The Association is formed in or in connexion with the industry of diving in the provision of underwater services." Eligibility for membership is defined in Rule 5:- "the following persons shall be eligible for membership of the Association:- (a) Any person temporarily, permanently or usually employed within the Commonwealth of Australia, or in any place in which the Conciliation and Arbitration Act applies on a full time or part time basis in the industry defined in Rule 3 hereof. (b) Any other persons, whether employed in the industry or not, as have been appointed or elected officers of the Association and admitted as members thereof." Rule 6 of the Constitution and Rules regulates admission to membership and in the relevant parts provides:- "(a) Persons who are members of the Association at the date of the adoption of these Rules shall continue to be members thereof, (b) An applicant for membership shall: (i) Complete an application form in the form prescribed from time to time by the Committee of Management and forward the application to the Secretary of the said Committee or in the event of the establishment of State Branches to the Board of Management of the Branch in the State of which the applicant resides, (11) Furnish such additional information as the Association shall require, (ili) Pay the entrance fees prescribed by these Rules, ener ee ere om truer (c) (d) Rule 11:- "(a) (b) 8. An applicant for membership shall be deemed to be a member of the Association as from the date of signing such Application and shall be liable for the payment of entrance fees, subscriptions, fines and levies and be entitled to all the benefits of members as set out in these Rules, Notwithstanding anything contained in these Rules any member may within twenty-eight days of the date of the receint by the Secretary of an Applicant's Application Form object to the admission to membership of the Association of the Applicant on the grounds of his character or previous conduct. The Secretary shall forthwith notify the Applicant in writing of the objection and the grounds for the objection, and shall direct the Applicant to attend the next practicable meeting of the Committee of Management which shall either uphold or dismiss the objection. If the Committee of Management upholds the objection, the Applicant's membership shall be cancelled and all moneys already paid by him shall be refunded to him, Provided that in the event of State Branches being established the objection shall be forwarded to the Branch Secretary and if the objection is upheld by the Branch Board of Management, the rejected applicant shall have the right to appeal to the Committee of Management and such appeal shall be notified to the Committee of Management by the Branch Secretary within 14 days after the decision of the Branch Board of Management". The failure to pay annual subscriptions is dealt with in Any member who fails to pay entrance fees, subscriptions, fines, or levies as prescribed by the Rules shall be deemed to be unfinancial until all such entrance fees, subscriptions, fines or levies have been paid, Any member deemed unfinancial shall for the period he is deemed unfinancial lose all privileges of membership, shall not be entitled to participate in any ballot or election and shall not be entitled to any financial assistance or benefits from the Association and shall be liable to be sued for his arrears without notice." \ -eoem Ve - in Rule 40, — 9. The expulsion provision of the Constitution is set out that rule provides:- "(a) The Committee of Management may censure, suspend (b) (c) (d) from membership, expel or impose a fine not exceeding fifty dollars upon any member who proves to its satisfaction to have been guilty of either one or more of the followng offences:- (1) contravening or failing to observe any one of these Rules, (ii) contravening or failing to observe any lawful resolution or direction of the Committee of Management. Any member who is penalised in accordance with this Rule may appeal to the next ensuing annual general meeting or special general meeting of members of the Association by giving notice in writing, of such appeal, to the Secretary no later than seven days after the date he is notified of the penalty, provided that no member who has been expelled, shall be re-admitted without the majority of members present consenting thereto at a special general meeting duly convened for the consideration of the application. At the hearing of any appeal against a penalty imposed under this rule, the duly convened meeting of members shall have power to sustain or dismiss the appeal and revoke, increase or modify the penalty. In the event of State Branches being established, the Boards of Management of the Branches shall exercise the power conferred on the Committee of Management by this rule insofar as it is applicable provided that a member so censured, suspended from membership, expelled or fined shall have a right of appeal to the Committee of Management and the decision of the Committee of Management shall, subject to sub-rule (b) of this rule, be final." dealing with misconduct on the part of members, - eee ae eae 2 penne naar mrees tee ~~ 10. Entitlement to Membership The applicants are both, on the evidence, "usually employed" in the industry of diving in the provision of underwater services in Australia. They are, within the meaning of Rule 5, "eligible for membership of the Association". It is notable that the rule does not exclude from the class of eligible persons those who may have been expelled from the organisation. That being so, and the expulsion itself not being evidence of "general bad character", the operation of sub-s.144(1) is properly attracted and the statutory entitlement to membership is established. As Spicer CJ said in Zimmer-Vorhaus v Australian Institute of Marine and Power Engineers (1966) 8 FLR 468 at 469:- ",..the proper interpretation of the section is that a person employed in connexion with the industry is entitled to be admitted as a member of an organization without any other qualifications than those which are expressed in other parts of the section; in other words, that the words "so long as he complies with the rules of the organization" would seem to me not to attach themselves to that part of sub-s.(1) which relates to his being admitted as a member of the organization, but they attach rather to the words under which he is entitled to remain a member so long as he complies with the rules of the organization." The proviso to Rule 40(b) requires that no member who has been expelled shall be readmitted without the majority of members present consenting thereto at a special meeting convened "for the consideration of the application". vr — + wey —- antes hated eee adil sa see T —Tn wren nee ere et oe en \ eer A mere MR ERM TISE Tere Tee = menenress ll. This proviso appears in that part of Rule 40 providing for an appeal against imposition of any penalty by the Committee of Management. It 1s in that context concerned with re~instatement and with reversal of the expulsion order, rather than admission on a new membership application. Thus the expelled member who seeks re-admission outside the appeal procedure must lodge his signed application and pay his entrance fee again. His eligibility for membership however, remains intact even after expulsion. Indeed, he becomes a member upon the date he signs the application for membership. Any objection by the secretary which is upheld by the Committee of Management under Rule 6(d) would in its terms, only operate as a condition subsequent to membership — Re Australian Glass Workers' Union (1973) 22 FLR 17, 27-28. This is made quite clear by the last sentence of para.(d) of Rule 6 which provides that if the Committee of Management upholds the objection "the applicant's membership shall be cancelled and all moneys already paid by him shall be refunded to him". There is no suggestion that the objection procedures under para.(d) were ever put in train in response to the Henrys' applications for new membership. pe eee "woe yor a ees wort oto wa reig ee ese me wo ay Se rirereanmtemen sanpenerenre | 12. When they signed the applications they became members and are still members under the rules. On that basis alone, they are entitled to the relief they seek. If, contrary to the opinion I have expressed, expulsion does affect eligibility for membership, the question which arises in this case 1s whether the expulsions were valid. For, as appears from the uncontradicted affidavit evidence of Henry Snr., neither he nor his son were given notice of any intention to expel them. The Committee of Management plainly made its decision without either of the applicants present and without hearing from them. It would be difficult to imagine a clearer breach of the rules of natural justice than the failure to give to the Henrys notice of the proposed disciplinary proceedings and an opportunity to be heard at them. The duty to comply with those rules has been frequently repeated - Wishart v Australian Builders Labourers' Federation (1960) 2 FLR 298, 300; Lynch v McLachlan (1962) 3 FLR 59; Egan v Harradine (1975) 25 FLR 336, 363. Just over 20 years ago the Full Court of the Commonwealth Industrial Court in O'Neill v Printing Industry a i a een ayer ye 13. Employees Union of Australia (1965) 6 FLR 488 at 491 quoted the following passage from Lynch v McLachlan (supra) :- "Before a person is made liable to a penalty he is entitled to have adequate notice of the charge against him and a reasonable opportunity of defending himself against it." and after quoting that passage the Court in O'Neill said at 491:- "This Court has made repeated assertions on this subject. It desires once again to give them emphasis with a view to hastening the time when it will be a rare occurrence that the principles of natural justice, when applicable, are disregarded by organizations registered under the Conciliation and Arbitration Act." The failure of the Committee of the Association in this case to afford to the Henrys an opportunity to be heard was in contravention of what is not only a well established rule of law, but also a basic precept of fairness. The fact that there is a right of appeal to a general meeting does not in this case alter the position. As appears From the Rules the decision on an appeal, if the appeal is unsuccessful, does not constitute a fresh decision to expel hut a refusal to interfere with the course taken by the committee - see generally Wilmot v Cooper (1956) 1 FLR 5 at 8; Lynch v McLachlan (No. 2) (1962) 3 FLR 242, 245-246. ato ' we o> 3 " 4 14, In my opinion the uncontradicted evidence leads inevitably to the finding that there was a breach of the rules of natural justice and that the expulsion decision was invalid. There is therefore no basis for the contention that the Henrys are not entitled to become members of the Association and I will make orders accordingly. I certify that this and the preceding thirteen (13) pages are a true copy of the Reasons for Judgment of His Honour Justice French. Associate: Bohol Whi ke - Date: QA Nowe [48 7. Counsel for the Applicants: Mr P.J. Gethin Solicitors for the Applicants: Patrick J. Gethin No appearance for the Respondent. Date of Hearing: 19 November 1987 Date of Judgment: 24 November 1987 eh i ee me Teer at a = wey aie