« a "JUDGMENT No. TALS CATCHWORDS Industrial law - registered organization - rules - validity - whether required provisions made - autonomy of branches - division of moneys into branch fund and federal fund - whether statutory provisions applicable - whether autonomy financial - whether division of funds requires exclusive control - whether ability of national executive to call up funds from branches imposes on members oppressive, unreasonable or unjust conditions. Industrial law - registered organization - rules - performance and observance - calculation of sustentation fees from branch - whether correct when contributions discounted - whether branch properly declared unfinancial - validity of resolutions - whether prohibition of publication of branch journal valid - whether branch properly required to pay costs of litigation in which branch officers successful. Industrial law - registered organization - branch - registration under law of state - effect. Commonwealth of Australia Constitution Act 1901 s.109 Conciliation and Arbitration Act 1904 ss. 133A(1)(b), (2)(a)(c), (4), 136A, 140(1)(a)(c)(d), 141, 197A Conciliation and Arbitration (Organizations) Act 1974 s.9(1)(2) Industrial Arbitration Act 1916 (Qld.) ss.26(1)(6), 37(1)(2) Industrial Conciliation and Arbitration Act 1932 (Qld.) $.3(1.)(b) Industrial Conciliation and Arbitration Act 1961 (Q1d.) 8.4(7) Trade Union Act 1915 (Qld.) s.4 BERNADETTE CALLAGHAN AND ORS. v. FEDERATED CLERKS UNION OF AUS' JA, JOHN PETER MAYNES AND ORS. Nos. Q13 of 1985 and Q7 of 1986 Gray J. MELBOURNE 24TH DECEMBER 1987 IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND DISTRICT REGISTRY ) No. Q7 of 1986 ) ) INDUSTRIAL DIVISION BETWEEN: BERNADETTE CALLAGHAN AND ORS. Applicants -and- FEDERATED CLERKS UNION OF AUSTRALIA First Respondent -and- JOHN PETER MAYNES AND ORS. Second Respondents MINUTES OF ORDER THE COURT ORDERS that the amended Rule to Show Cause is discharged. (NOTE: Settlement and entry of orders is dealt with by 0.36 of the Federal Court Rules.) IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY INDUSTRI. DIVISION No. Q13 of 1985 BETWEEN : BERNADETTE CALLAGHAN AND ORS. Applicants -and- FEDERATED CLERKS UNION OF AUSTRALIA First Respondent -and- JOHN PETER MAYNES AND ORS. Second Respondents MINUTES OF ORDER THE COURT ORDERS: That the second respondents John Peter Maynes, Terrence W. Sullivan, R.dJ. Wasson, Joan Roirdan, Henry James Darroch, Mary Eveleen Nelson, Michael John Cashman, Michael John O'Sullivan, Michael Patrick Bourke, John Daniel Smith, Monica Rose Strangward, Vincent Higgins, Betty Spears, Keith Glover, Leslie Thomas Hauff, Michael James Wilkinson, Douglas Fry, Geoffrey B. Kilmartin, James Harding, Peter Vincent Abrans, Karen Andrewartha, Hugh Armstrong, Ralph Desmond Clarke, Phillip Anthony Collins, Wanda Day, Veronica Jones, Patricia Spenceley, Geoffrey David Swords, Edward Tamplin, Paul Tregillis, David Wasley, perform and observe the rules of the Federated Clerks Union of Australia ("the union"): (a) by treating as null and void the following resolution, passed by the national council of the union on or about 14th November 1984: "In addition to the decision of National Executive of 1983 relating to the calculation and consequent underpayment of sustentation fees by C. & S.Q. Branch; Council determines that the long standing interpretation of Rule 15 by the National Executive and now by National Council is a correct one. This view has been supported by two learned Counsel (QC's). In the event that the C. & S.Q. Branch continue to dispute the matter and fails to Pay the outstanding amounts by 31.12.84, Council now determines to exercise 1ts power under Rule 15(1) and decides that the sum of $40,000 which approximates the amount involved shall be paid instead. The liability shall arise on lst January, 1985 and the amount shall be paid not later than the 28th of February, 1985" (b) by treating as null and void the following resolution, passed by the national council of the union on or about 14th November 1984: "Council notes with satisfaction the establishment of the National Journal and its extension throughout the year to embrace the substantial majority of the membership. This has meant in the majority of cases a bigger journal covering a wider range of subjects. Moreover this has been achieved with little or no extra costs to Branches concerned. Council determines that by not later than the first issue in 1985 the National Journal shall be the sole official journal of the Union and be circulated to all members in our major geopgraphic Csic.J Branches not less than four times per annun. In accordance with the (c) practice established with other Branches the Central and Southern Queensland Branch shall have eight pages for local content and the South Australian Branch four. Between now and 3lst March 1985 a discussion should be held with the Executive of the Taxation Officers Branch with a view to establishing an A.P.S. Section in the Journal which will be specifically directed at the Taxation Officers Branch membership and the A.P.S. members in other Branches. The Branches concerned are now required to extend the fullest cooperation to the National Office and the National Editor to give effect to this final stage of achieving a long standing policy as having a National Journal as the official organ of the Union." to the extent to which that resolution purports to make the national journal of the union the sole official journal of the union, to the exclusion of any journal published by the Central and Southern Queensland Branch of the union. by treating as null and void the following resolution of the national executive committee, passed in December 1983: "It is noted that the Central & Southern Queensland Branch has used the full Adult Male rate in establishing membership units for Sustertation Fee purposes, even though heavily discounted contribution rates have been collected. The effect is a substantial reduction in Sustentation Fees payable. This is to the detriment of the Federation and other Branches. It is further noted this method of calculation has been applied by the Branch for some years past and that it is contrary to the provisions of Rule 15. Executive directs the Branch to provide adjusted figures on a proper basis and to pay the outstanding balance by 29 February, 1984." (ad) by refraining from making, or causing or permitting to be made on their behalf, demands upon the officers and members of the Central and Southern Queensland Branch of the union for: (1) the sum of $40,000, the subject of the resolution referred to in sub-para. (a); {ii) any sum or sums in respect of alleged underpayments of sustentation fees, pursuant to rule 15(3) of the national rules of the union, in respect of the periods ended 30th June 1983, 31st December 1983, 30th June 1984, 31st December 1984, 30th June 1985 and 3lst December 1985; (iii)any sum or sums of money alleged to have accrued due pursuant to rule 15(5) of the national rules of the union, on the basis that the Central and Southern Queensland Branch of the union has been unfinancial, to the extent to which that sum is or those sums are based upon the sums referred to in placita (i) and (iid. 2. Otherwise, the amended Rule to Show Cause is discharged. (NOTE: Settlement and entry of orders is dealt with by 0.36 of the Federal Court Rules.) IN THE FEDERAL COURT OF AUSTRALIA * QUEENSLAND DISTRICT REGISTRY INDUSTRIAL DIVISION Nos. Q13 of 1985 and Q7 of 1986 BETWEEN: BERNADETTE CALLAGHAN AND ORS. Applicants -and- FEDERATED CLERKS UNION OF AUSTRALIA First Respondent ~and- JOHN PETER MAYNES AND ORS. Second Respondents REASONS FOR JUDGMENT JUDGE: GRAY J. DATE: 24th December 1987. These two proceedings were heard together, and involved a number of aspects of the rules of the Federated Clerks Union of Australia ("the union"). The union is an organization, registered pursuant to the Conciliation and Arbitration Act 1904 ("the Act"). By rule 12(1) of its rules, the union has branches in North Queensland, Central and Southern Queensland, New South Wales, Broken Hill (within the County of Yancowinna), Victoria, Tasmania, South Australia and Western Australia, and a branch consisting of taxation officers. The applicants in both proceedings are members of the union. They are officers of the Central and Southern Queensland Branch ("the C. and S.Q. Branch"), and members of the national council of the union, elected from the C. and S.Q. Branch. The union itself is described as the first respondent. Against it, relief is sought pursuant to s.140 of the Act. The relevant parts of s.140(1) are as follows: "140(1) The rules of an organization - (a) shall not be contrary to, or fail to make a provision required by, a provision of this Act, the regulations or an award or otherwise be contrary to a law; (c) shall not impose upon applicants for membership, or members, of the organization, conditions, obligations or restrictions which, having regard to the objects of this Act and the purposes of the registration of organizations under this Act, are oppressive, unreasonable or unjust; and (d) shall be such as to provide for the autonomy of a branch in matters affecting members of the branch only and matters concerning the participation of the branch in any State industrial conciliation and arbitration system." In each of the proceedings, it is alleged that the rules of 3. e the union, viewed as a whole, fail to provide for the autonomy of the C. and S.Q. Branch, particularly in failing to circumscribe the effect of national rules 7(3A), 7(5), 15(1) and 15(3). It is also alleged that the rules of the union as a whole fail to make the provisions required by s.133A of the Act, as to federal funds and branch funds, and that certain specific rules, namely national rules 7(3A) and 7(5), are contrary to s.133A, and therefore contravene s.140(1)(a}) of the Act. The other relief sought under s.140 is a declaration that rule 15(1) of the national rules of the union, which relates to the payment of moneys by branches to the national office of the union, contravenes s.140(1)(c) in that it provides for payment other than on a uniform basis, and is so wide as to permit payments on unfair bases, in particular demands for payment of sustentation fees for retrospective purposes. Numerous persons are described in the proceedings as "second respondents". All of these persons are members of the national council of the union. Some of them are national officers of the union, and members of its national executive. Against these respondents, relief is sought pursuant to s.141 of the Act, in the form of orders that they perform and observe the rules of the union by treating as null and void a number of resolutions of the national council and national executive, concerning the payment of moneys by the C. and 8.Q. Branch to the national office of the union and related 4. ~ "matters, and by treating as null and void demands based upon those resolutions. At the trial, Mr. Hampson Q.C. and Mr. Amerena of counsel appeared for the applicant. Dr. Jessup of counsel appeared for the first respondent and for the majority of the second respondents. Some of the second respondents did not appear. It is convenient to deal with the matters of common ground and of controversy under separate headings. HISTORY The union was registered under the Act as an organization on 13th April 1911, as "The Federated Clerks Union of Australia." An attempt was made to show that an association of clerks existed in Queensland prior to that date. It is unnecessary for me to determine that issue, however, as the parties in this proceeding were agreed that the registration which was effected subsequently under Queensland legislation was registration of a branch of the union. On the evidence, that branch probably came into existence during 1915, that being the first year in respect of which returns were made to the Industrial Registrar under the Act, showing the existence of a Queensland branch of the union, having members and officers. The first registration in Queensland was effected on 5th March 1917, pursuant to the Trade Union Act 1915 (Qld.). This was in the name of "The Federated Clerks' Union of Australia, Queensland Branch". The statute did not contain any express provision for the registration of a branch of an association or union. Comparison is made with the South Australian legislation, dealt with in Bailey v. Krantz (1985) 13 I.R. 339, especially atop. 343. Nevertheless, the definition of "Trade Union" in s.4 of the Trade Union Act 1915 (Qld.) referred to, "Any combination, whether temporary or permanent...", words wide enough to include a branch of an organization registered under the Act. The Trade Union Act 1915 was repealed by s.4(2) of the Industrial Conciliation and Arbitration Act 1961 (Qld.), and the effect of this first registration in Queensland appears now to be spent. It may be that the registration was merely a step to the second registration. The second registration in Queensland was effected on 30th March 1917, pursuant to the Industrial Arbitration Act 1916 (Qld.). This was in the name of "The Federated Clerks' Union of Employees of Australia (Queensland Branch)". Section 26(1) of the 1916 Act provided for the registration as an industrial union of "any industrial association or trade union of employees". These expressions were not defined, but s.26(6.) provided: "No branch of a trade union shall be registered unless it is a bona fide branch of sufficient importance to be registered separately." Section 37(1) provided for the incorporation of a registered industrial union. Section 37(2) provided for the insertion into the registered name of every industrial union of the words "union of employees". The registration effected on 30th March 1917 has continued until the present day. The Industrial Conciliation and Arbitration Act 1916 was repealed and replaced by the Industrial Conciliation and Arbitration Act 1932 (Qld.). Section 3(i.)(b) of that Act preserved all registrations of industrial unions under the repealed statute. The 1932 statute was in turn repealed by the Industrial Conciliation and Arbitration Act 1961 (Qld.), which still operates in its amended form. Section 4(7) of that statute preserved the continuity of the identity of industrial unions previously registered. On 13th August 1917, there was registered under the Act a change of name of the union to the "Australian Clerical Association". On 14th November 1917, there was registered under the Industrial Conciliation and Arbitration Act 1916 (Qld.) a change of name of the registered industrial union to "Australian Clerical Association, Union of Employees, 7. e "Queensland Branch". In 1924, the union applied for a further change of name, to the name by which it is presently registered. This change was registered under the Act on 27th November 1924. In 1925, the Queensland branch of the union was split into two branches, namely the North Queensland Branch and the Cc. and §.Q. Branch. On 10th July 1925, there was registered under the Industrial Conciliation and Arbitration Act 1916 (Qld.) a change of name of the registered industrial union to the "Federated Clerks' Union of Australia, Central and Southern Queensland Branch, Union of Employees". The state registration 1s still in this name. In addition, the branch rules of the c. and S.Q. Branch, filed pursuant to the Act, specify that the name of the C. and §.Q. Branch is "Federated Clerks Union of Australia (Central and Southern Queensland Branch) Union of Employees". In 1946, an amalgamation occurred between the state registered industrial union and a body entitled the Queensland Life and Fire Insurance Union of Employees. It was not contended on either side in the present case that this amalgamation made any difference to the status of the registered industrial union. Applying the reasoning in Bailey v. Krantz (1985) 13 I.R. 339, at pp. 336-379, it is appropriate to conclude, as both sides contended in the present case, that the C. and S.Q. Branch and the industrial union registered under 8. e Queensland law are one and the same body. The purported grant of incorporation to the state registered industrial union is ineffective, because of inconsistency between the Queensland legislation and the Act and the effect of s.109 of the Constitution. These proceedings do not' involve, therefore, a problem of the simultaneous existence and operation of two separate legal entities, of the kind to which cases such as Moore v. Doyle (1969) 15 F.L.R. 59 drew attention. In November 1982, as a result of elections held in the C. and S.Q. Branch, the applicants were elected to office in that branch. They were part of a team which ousted the previous officers and members of the branch council. Prior to November 1982, the relationship between the national officers and the C. and S.Q. Branch was largely harmonious. Since that time, however, there has been a substantial amount of litigation in this Court between the applicants and others involved in the administration of the C. and S.Q. Branch on the one hand, and the national officers and members of the national council on the other hand. It is clear from the evidence in the present proceedings that there exist between the administration of the Cc. and S.Q. Branch and the administration of the union at the national level political and other differences, which have led to a _ considerable degree of mistrust on both sides. It is obvious that the applicants see many of the resolutions and demands about e : which complaint is made in these proceedings as being the result of those differences and that mistrust. It is equally obvious that some of the resolutions and demands would not have been made had those differences and that mistrust not existed. Nevertheless, the validity of the resolutions and demands, and the validity of the rules of the union must be determined according to law, and not according to the views which a member of this Court might hold as to the wisdom or otherwise of actions which have been taken, or of rules which have been adopted. THE NATIONAL RULES In Krantz v. Federated Clerks Union of Australia (1984) 5 F.C.R. 416, an attack was made upon the rules of the union by certain members in the South Australian branch. That attack involved reliance upon s.140(1)(d) and s.133A of the Act. Reference was made in that case to branch rules of the South Australian branch of the union, for the purpose of ascertaining whether the rules of the union made the provisions required by s.133A of the Act. In the result, the Court held that the rules failed to make the provisions required by s.133A in every respect, and adjourned the matter to give the union an opportunity to alter its rules. Amendments were made to the rules. On 24th May 1985, the matter came back before the Court for consideration of the rules as amended. It was conceded on behalf of the 10. é applicants in that case that the amendment had overcome the defect which was found to have existed in the rules of the union. An attempt was made to attack the amended rules under s.140(1)(c) of the Act, an attack altogether different from that which had been made originally. The Court refused to allow such an attack unless a new proceeding were commenced. See Krantz v. Federated Clerks Union of Australia (1985) 7 F.C.R. 130. On appeal from the original judgment, the Full Court did not tackle the substantive question whether the rules of the union failed to make the provisions required by ss. 140(1)(d) and 133A of the Act. See Krantz v. Federated Clerks Union of Australia (1986) 14 I.R. 357. Dr. Jessup submitted that the judgments in Krantz v. Federated Clerks Union of Australia (1984) 5S F.C.R. 416 and (1985) 7 F.C.R. 130 concluded the question whether the rules of the union made the provisions required by s.140(1)(d) and s.133A of the Act. For a number of reasons, this submission is incorrect. In the present proceedings, the Court is called upon to consider the rules of the union as they apply to the C. and S.Q. Branch. Such consideration involves an examination of the branch rules of the C. and S.Q. Branch, which are different from those of the South Australian branch. Further amendments have also been made to the rules since 24th May 1985, which may bear upon the question of compliance with the Act. Following the judgment in the Krantz case, the judgment of the Full Court in Imlach 11. "¥v, Daley (1985) 7 F.C.R. 457 was delivered; the majority of . -the Full Court in that case, Evatt and Northrop JJ., took a different view of the operation of s.140(1)(d) from that taken in the Krantz case at first instance. Finally, the Court does not regard itself as bound by a previous decision of a single judge, and is entitled to consider afresh the question of the operation of the Act upon the rules of a union, Rule 3 of the rules of the union sets out the objects for which the union is established. These include the object in sub-rule (e): "(e) to establish, maintain and/or contribute to the support of Labor Union journals, and in particular, a journal of the Union;" Rule 7 deals with entrance fees and contributions. In the present proceedings, challenge is made to the validity of provisions which are now found in rule 7(5) and (7). These rules are very much at the heart of these proceedings. When the proceedings were commenced, they were found in rule 7(3A) and (5) respectively of the national rules of the union. In their present form they are as follows: "(5) All entrance fees, contributions, fines and levies shall be payable to the Union and shall form part of the federal fund of the Union. They shall be collected on behalf of the 12. Union by collectors authorised in that behalf by the National Executive or by the Committee of Management of the Branch to which the member paying is or will be attached, by stewards in the case of members from whom the steward is authorised in that behalf or to the registered office of the Union or of the Branch to which such member is or will be attached, but by no other person or member. Authorised collectors and stewards shall he accountable to the National Executive for all monies so collected. (7) The National Executive may prescribe banking accounts into which moneys collected pursuant to sub-rule 7(3A) {[sic.] shall be paid. The signatories to such accounts shall be persons authorised by the Branches in respect to which the accounts are established and _ the National President and the National Secretary any two of whom may sign cheques drawn on the accounts." Rule 8 deals with levies. Sub-rule (1) empowers the national council or national executive to strike a levy on all members, such levy not to exceed the sum of $8.00 per member per week. Sub-rule (2) empowers the national council or national executive to strike a special levy on all members of a branch or on all members of the union employed under a particular federal award, order, determination or industrial agreement, which levy is not to exceed $40.00 per member in any year, and is limited to specified purposes. Sub-rule (4) permits a branch to strike a levy on all or part of its members, not exceeding $8.00 per member per week and limited 13. to the purposes of the branch. Reference has already been made to rule 12(1), which prescribes what shall be the branches of the union. Rule 12(2)(a) is as follows: "(a) Subject to these Rules and to the approval of the National Executive, a Branch shall have power to make Rules from time to time for its own internal management. All Branch rules made pursuant to this sub-rule shall form part of and shall not be inconsistent with these rules. Such Branch rules shall be subject to these rules. The power given to the Branches by this sub-rule to make rules for their own internal management shall not be taken as a delegation of power to the Branches to make rules precluding the exercise by the National Executive of any of its powers under Rule 27 hereof." Rule 15 is central to the present proceedings. In its present form, it provides as follows: "(1) The National Executive may direct a Branch to forward to it all or any part of the entrance fees, contributions, fines and levies received by the Union from members who are or will be attached to such Branch, and every Branch receiving such a direction shall comply with it forthwith or by the time (if any) specified in the direction' for compliance. (lA)Subject to any direction under sub-rule (1), and to the payment of (2) (3) 14. sustentation fees in accordance with sub-rule (3), each Branch may (a) retain and (b) in any half-year (ending on 30th June or 31 December), when the moneys received by it during that half-year and the immediately preceding half-year from sources other than entrance fees, contributions, fines and levies have first been used to defray the cost of Maintenance of the Branch, and have been exhausted, apply towards its own maintenance, all entrance fees, contributions, fines and levies received by the Union from members who are or will be attached to such Branch. On or before the 31st day of January and July in each year, in respect of the two immediately preceding half years in each case, each Branch shall forward to the National Secretary a statement showing the rate of annual contributions payable by adult male members in respect of such periods and the total amount paid by all members as contributions during such periods; provided that where more than one adult male rate applies the aforementioned statement shall show the adult male rates applicable and the total amounts paid as contributions in respect of the said periods by all members falling within each class categorised by the said adult male rates. (a) Each Branch shall forward to the National Secretary at the times prescribed by Rule 15(2) an amount (hereinafter called "the sustentation fee") calculated as hereinafter provided. (b) For the purposes of this Rule there shall be "membership (c) (da) 15. units" which shall be obtained by dividing the total amount received by the Branch as contributions by the adult male rate, provided that where more than one adult male rate applies, by dividing the total amount received by the Branch as contributions from members in each respective class, by the adult male rate applicable to that class. Membership units shall be calculated as aforesaid in respect of the two half years referred to in Rule 15(2) and the membership units for each such half year shall be added to form a total. The amount paid as contributions by members' for the purpose of this rule shall in respect of the sustentation fee due and payable on or before 3lst day of January, 1985, be deemed to be the sum derived by multiplying the Siost. of membership units by 109. The amount paid as contributions by members for the purpose of this rule shall in respect of the sustentation fee due and payable on or before 31st day of July, 1985, and thereafter, be deemed to be the sum dervied [sic.] by multiplying the number of membership units by $119. The sustentation fee shall be an amount equal to a percentage of the amount paid as contributions by members, which percentage shall be determined as follows:- - Where the total membership units do not exceed 7,500 the applicable percentage shall be 5.5%. - Where the total membership (4) (5) 16. units exceed 7,500 the applicable percentage shall be 8.5%. Any Branch which fails to comply with a direction under sub-rule (1), or to forward the amount of its sustentation fees within the time prescribed therfor [sic.], may be declared unfinancial by the National Council and its member or members deprived of the right to attend any meeting of the National Council or to vote on any question: Provided that no such declaration shall be made in the case of a Branch which has complied with the direction under sub-rule (1) within 4 weeks of it having been received by the Branch, or, where a time for compliance with such direction is specified therein, within 4 weeks after the expiration of such time, or in the case of a Branch which has paid its sustentation fees within 4 weeks of the expiration of the time prescribed therefor (as the case may be) and where, in either such case, the direction has been complied with or the sustentation fees paid, (as the case may be) by the time the matter comes to be considered by the National Council. If the National Council declares a Branch to be unfinancial pursuant to the preceding sub-rule the amount payable by the Branch' shall be increased as follows: - For the first calendar month or part thereof after the moneys fell due for payment - by adding an amount equivalent to 5 per centum of the amount payable. - For the second calendar month or part thereof after the moneys fell due for payment - by adding an amount equivalent to 10 per centum of the amount payable at the conclusion of the first calendar month. 17. - For the third calendar month or part thereof after the moneys fell due for payment - by adding an amount equivalent to 15 per centum of the amount payable at _ the conclusion of the second calendar month. (6) If the National Council declares a Branch to be unfinancial pursuant to sub-rule 15(4) and the moneys owed by the Branch remain unpaid four weeks after the making of such declaration the National Executive may direct the National President and the National Secretary to sign a cheque, drawn on any banking account prescribed pursuant to sub-rule 7(5) and operated by the Branch concerned, in the amount owed by the Branch. Any cheque so drawn shall be payable to the National Executive." Changes have been made in this rule from time to time, particularly as to the multiplier in sub-rule (3)(c), and the applicable percentage in sub-rule (3)(d). Rule 16 vests the supreme control of the union in the national council, subject to a ballot of members. The rule also deals with the constitution of the national council, which consists of the national officers and councillors elected by branches, the number from each branch depending upon the number of members of the branch, Rule 27 provides for the national executive, which consists of the national officers and makes the national executive the committee of management of the union. The relevant powers of the national executive include the following: 18. "(3) The National Executive shall, subject to the review of its actions by the National Council, have the care, control, custody, superintendence, management and administration in all respects of the affairs, business, funds and property of the Union, and without limiting the generality of the foregoing, it may:- (b) Remove all or any of the officers, councillors or committee men of any Branch in the following circumstances: (i) that the rules of the Union or of the Branch have not bona fide been observed and enforced by the Branch; (viii) that the officers of the Branch refuse to disclose to the National Executive information concerning the business of the Branch; (ix) that lawful directions of the National Executive or the National Council are not being observed and enforced by the Branch; (j) Demand, sue for, recover and keep possession of all books, accounts and other property of the Union, or in the event of a Branch refusing or neglecting Under rule 27(4), 19. to obey any resolution of National Council or National Executive, the books, accounts and other property held by such Branch." full force and effect and full validity until decisions of the national executive have reversed, altered or otherwise dealt with by the national council. Rule 30 makes provision for a postal ballot of the national executive. Rule 37 is also of importance. It is in following terms: "(1) (2) All funds and property held by any Branch shall be vested in the Union. The Executive of a Branch shall not invest any funds for the time being in its possession in other than authorised trustee investments without the approval of the National Council or National Executive. (2A)(a) A Branch shall not establish any superannuation, long service leave, sick pay, accident, funeral or other specific purpose fund without the approval of the National Executive. In the case of any such fund which is, as at the date of the commencement of the operation of this sub-rule, already established, no alteration shall be made in the rules governing such fund without the approval of the National Executive. the (3) (4) 20. (b) No payment of moneys retained by a Branch under Rule 15(1A) shall be made into any superannuation, long service leave, sick pay, accident, funeral or other specific purpose fund, now or hereafter to be established, without the approval of the National Executive. In the case of funds existing as at the date of the commencement of this sub-rule, it shall be deemed that the National Executive has approved the continuation, under existing rules relating to those funds, of payments into such funds, unless' the National Executive determines otherwise not later than 3ist December, 1985. (c) On any question of approval under this sub-rule, the National Executive shall have regard to the practices and standards prevailing in all Branches, and may alter the future conditions to apply to any such fund as an alternative to disapproving the fund. The funds of the Union may be disbursed for ordinary purposes by such officer or officers as may be authorised in that behalf and subject to such limitations as may be imposed. Funds may be disbursed for extraordinary purposes by decision of the National Council or National Executive. No loan, grant or donation of an amount exceeding $1,000 shall be made by the Union unless' the National Executive: (a) has satisfied itself:- (i) that the making of such loan, grant or donation would be in accordance with these Rules; and 21. (iz) in relation to a loan, that in the circumstances the security proposed to be given for the repayment of the loan is adequate and the proposed arrangements for the repayment are satisfactory; and (b) has approved the making of the loan, grant or donation. Provided that this sub-rule shall not apply in relation to payments made by the Union by way of provision for, or reimbursement of, out-of-pocket expenses incurred by persons for the benefit of the Union." BRANCH RULES In many respects, the rules of the C. and S.Q. Branch as certified under the federal Act appear to be ina form suitable for a separate union. This appears to be the result of an attempt to ensure that those rules are as alike as is possible to the rules which are registered under Queensland legislation. Thus, a number of rules refer to the "Union", in a context which makes it obvious that what is Meant is the C. and §.Q. Branch. Rule 1 provides: "The name of the Union shall be : - FEDERATED CLERKS UNION OF AUSTRALIA (CENTRAL AND SOUTHERN QUEENSLAND BRANCH) UNION OF EMPLOYEES." 22. Under rule 4, one of the objects of the C. and S.Q. Branch is: "(e) To establish, Maintain and/or contribute to the support of Labour Radio Stations and Union Journals, or other means of publicising Labour interests and in particular a Journal of the Union;" Rule 14(1) makes provision for the branch council to impose an entrance fee of 20 cents payable by applicants for membership. Rule 15 relates to contributions. It 1s necessary to set out at length some of the provisions of the rule: "1. The annual contributions payable to the Union, in advance, from the first day of January, 1987 shall be (a) Senior Males and Females (21 years of age and over) .90% of the annual rate of salary prescribed for a clerk at 21 years of age by the Clerks and Switchboard Attendants' Award - State, as applicable on the first day of November in the preceding year. (b) Junior males and females (Under 21 years of age) 50% of contributions determined from year to year in accordance with the provisions of sub-clause l(a) of this Rule. 2. (a) Provided that in the case of all members employed on a (b) (c) (d) 23. casual basis (other than members of the Shipping Clerks' Section) whose earnings do not exceed fifty per centum of their appropriate Award rate in any year, such members shall be required to pay fifty per centum of the annual amount of contributions determined in accordance with sub-clauses l(a) or 1(b) of this Rule, as will be appropriate to their age. Proof of such earnings must be submitted to the Union to determine the payment of such contributions. Provided further that in the case of all members employed on a casual basis by members of the T.A.B. Agents' Association and whose contributions are deducted from salary on an hourly basis, the hourly contributions payable to the Union from January 1, 1987, shall be ten (10) cents for each hour of employment in the case of Seniors, 21 years of age and over and five (5) cents for each hour of employment in the case of all other members under the age of 21 years. Provided further that in the case of all Senior Male members of the Shipping Clerks' Section 21 years of age and over, the annual amount of contributions payable shall be an amount equal to the contributions payable in advance, from year to year, as determined by the provisions of Clause 1(a) of this Rule, plus the sum of Two Hundred Dollars ($200.00), which total amount shall constitute the annual contributions payable. Provided further that in the calculation of the annual amount of contributions payable 24. in accordance with this and the preceding clause, with the exception of sub-clause 2(b), any cents shall be taken to the nearest 10 cents, 5 cents being deemed to fall in the lesser half of 10 cents. The annual contribution shall be due and payable on the first day of January each year. Provided that Branch Council each year may determine that there should be a Moratorium period of not more than three calendar months for the payment of contributions during which period members shall be deemed to be financial for the purposes of these Rules. Provided further that all members in arrears of payment of contributions upon the expiration of this Moratorium Period, if any, shall cease to be deemed financial members and shall thereupon forfeit all membership rights and privileges until all such arrears of contributions, or other outstanding fines or levies are paid. Provided further that only those members who pay all arrears of contributions, or other outstanding fines or levies, within the Moratorium Period, if any, or who do so on or before the first day of January each year, shall be deemed to retain an unbroken continuity of financial membership for the purposes of these Rules. Any person applying for membership to the Union who commences work:- (a) On or after the lst April and prior to Ist July in any year shall pay the applicable entrance fee as provided for in Rule 14 hereof, but shall be required to pay only three-quarters (75%) of the 25. appropriate annual contributions as provided for in this Rule to the nearest ten cents. (b) On or after the lst July and prior to the lst October in any year shall pay the applicable entrance fee as provided for in Rule 14 hereof, but shall be required to pay only one-half (50%) of the appropriate annual contributions as provided for in this Rule to the nearest ten cents. {c) On or after the 1st October and up to and including 31st December shall pay the applicable entrance fee as provided for in Rule 14 hereof, but shall be required to pay only one-quarter (25%) of the appropriate annual contributions as provided for in this Rule to the nearest ten cents. Provided that these' reduced rates of contributions shall only apply to the year in which such person is admitted to membership of the Union. Ten cents per annum may be deducted from each membership fee for the publication and distribution of a Union Journal. Such monies shall be applicable at the discretion of Branch Council." It is also necessary to set out the provisions of Rule 15A, which relates deductions. "(a) to payment of contributions by Notwithstanding anything to the contrary contained elsewhere in these Rules, a member may effect salary (b) (c) (d) 26. payment of his membership contributions by having them deducted at designated regular intervals from salary payment paid to him by his employer and for such deductions to be then remitted on his behalf by the employer to the Union provided first :- (i) there exists between the Union and such employer an agreement for such deductions and remittances to take place; (ii) the member concerned lodges with the Union or a designated representative of the Union an authority signed by him authorising the deductions and remittances. After lodging such Authority with the Union and from the date the first deduction is made whilst the authority remains in force, a member shall be deemed to be financial unless either at the date of lodging or at any time thereafter he is in default in the payment of any contributions, fines or levies. Whilst such default continues he may be deemed unfinancial. Any amount not deducted or otherwise outstanding as membership contributions shall continue to be due and payable and recoverable by the Union as provided in these Rules. Provided that this provision shall not apply to any excess between the total of the contributions actually paid by those members provided for in subclause 2(b) of Rule 15 and the amount of annual contribution as provided for or referred to in subclauses 1i(a), 1(b) or l(c) of Rule 15 insofar as that excess relates to contributions in the year in which such deductions of contributions occur. Where not elsewhere provided in 27. these Rules, the amount of salary deduction to be deducted at each of the said designated regular intervals shall be the amount of the annual membership contribution payable by the member pursuant to Rule 15 divided by the number of designated regular intervals in the financial year concerned. Where there is a fraction of a _ cent resulting from such calculation, the amount of the deduction shall be increased to the nearest ten (10) cents, five (5) cents being deemed to fall in the lesser half (1/2) of ten (10) cents." Rule 16 deals with the payment of fines, and rule 17 with levies, which may be struck by the branch council and may not exceed $2.00 per year. Rule 18 permits the branch council or branch executive to waive in full or in part contributions owing by members who' may have fallen into arrears because of unemployment, illness, accident, hardship, distress or other special reason. Application must be made in writing by a member, or the agent or executor of a member, in order for such waiver to be effected. Rule 20 constitutes the branch council, and provides for the supreme control and management of the branch to be vested in it; it also defines the area of the Cc. and $.Q. Branch. Rule 34 provides for a branch executive, in which rests control of the branch between members of the branch council. Rule 41 provides as follows: 28. "All moneys received on behalf of this Union shall be deposited with the Commonwealth Bank of Australia, or such other Bank as may be determined by Branch Council, or such major Permanent Building Society and/or registered Credit Union as may be authorised from time to time by Federal Executive. The Branch President, Branch Vice-President, Branch Secretary and Branch Assistant Secretary shall be the persons authorised to operate on such account and the signatures of any two shall be the only accredited authority for payment from such account. All moneys deposited, other than in the Branch General Account shall only be made on the signatures of any two of the above signatories." Rule 41A contains the provisions with respect to loans, grants and donations, which are required by s.133B of the Act. Rule 42 contains provisions for the payment of expenses to members required by direction of the branch council or branch executive to be absent from home over night, for branch council members attending meetings of the branch council and for members attending at branch executive meetings. Rule 43 contains detailed provisions for a mortuary fund. Rule 44(c) provides for the duties of the branch secretary. These include the following: "(ii) Prepare books of account showing the receipts and expenditure of the Branch, and, 29. where necessary, separate accounts of receipts from all Sub-branches or Sections. (iii) Keep or cause to be kept correct records of all moneys received or paid on account of any particular Fund; and separate accounts of all contributions and expenses, as required by the Industrial Conciliation and Arbitration Acts 1961/1963 or amendments thereof. (iv) Bank forthwith all moneys of the Branch received by him in the Bank, as provided for in Rule 41 of these Rules. (v) Endorse all vouchers for payment, certifying to their correctness, and shall prepare and submit, on or before the thirty-first day of January of each year, to the Auditor or Auditors an annual Balance Sheet setting out the true position of the affairs of the Union as at the 3lst December of the preceding year. (vi) Submit, half-yearly, to Branch Council, a statement of receipts and payments. (vii) See that all accounts shall be paid by cheque, signed by the persons as authorised under Rule 41 of these Rules. Rule 47(a)(ii) provides that branch organizers shall enrol new members and accept entrance fees and contributions tendered by them. Rule 48 provides for the determination of the salaries of officials and employees by the branch council from time to time. Rules 49, 50 and 51 are as follows: 30. "49. Should any employee or accredited representative of the Branch of the Union resign or be suspended and/or dismissed he shall forthwith deliver all documents and property of the Union in his power or control to the Branch President or such person who is authorised by the Branch Council or Branch Executive to receive delivery of same intact." "50. The Books and Accounts of the Branch shall be audited annually and at such time or times as may be directed by Branch Council and a statement of income and expenditure up to and a Balance Sheet as at 31st December of each year shall be audited and, together with a report from the Auditor, be presented to the Branch Council at its first meeting after the Preparation of the Balance Sheet. The Balance Sheet shall be duly signed and certified to by the Auditors. The Auditor or Auditors who shall be an Accountant or Accountants registered under the provisions of The Public Accountants Registration Acts 1946 to 1954 shall be appointed by the Branch Council for a period of two years, and shall be paid such remuneration as Branch Council may determine. The Auditor or Auditors shall not be a member or members of the Federated Clerks Union of Australia." "51. The Branch Council shall elect two of its members to act as Trustees and they shall hold office only while members of the Branch Council, and such Trustees shall, from time to time, be responsible for the investment of any funds' the property of the Union as directed by the Branch Council. Withdrawal of invested funds shall only be effected with the knowledge and consent of the Branch Trustees and only on the signatures of not less than two (2) of the four signatories nominated in Rule 41." Rule 60 provides for amendment of the branch rules at a meeting of the branch council, 31. — or by a postal vote of branch councillors, after a specific procedure has been followed. AUTONOMY OF BRANCHES AND BRANCH FUNDS Act the By Act No. 89 of 1974, there were inserted into the provisions which are now s.133A, s.136A and s.140(1)(d), s.133A provides as "133A(1) In addition to the other conditions referred to in this Act, the conditions to be complied with by associations divided into branches applying for registration as organizations and by organizations divided into branches shall include a condition that the rules of the association or organization shall provide (a) that there shall be a fund (in this section referred to as the Federal Fund) which shall be managed and controlled in accordance with the rules relating to the association or Organization as a whole; and {b) that each branch shall have a fund (in this section referred to as a Branch Fund) of the particular branch which shall be managed and controlled in accordance with rules of that branch, and shall make provision in relation to those Funds in accordance with sub-sections (2) and (3), as if references in those sub-sections to an organization included references to an association applying for registration as an organization. (2) The Federal Fund shall consist of - (a) any real or personal property of which the committee of follows: (b) (c) (d) (e) (£) (9) (h) (3) 32. management of the organization, by the rules or by any established practice not inconsistent with the rules, has, or in the absence of any limited term lease, bailment or arrangement, would have, the right of custody, control or management; in the case of an organization the rules of which provide for the payment of capitation fees by a branch to the organization - fees so paid; in the case of an organization the rules of which provide for the payment of the whole or part of any entrance fees, subscriptions, fines, fees or levies by a branch to. the organization - the amounts of such payments; any interest, rents, dividends or other income derived from the investment or use of the Fund; any superannuation or _ long service leave or other fund operated or controlled in accordance with rules relating to the organization as a whole for the benefit of its officers or employees; any sick pay fund, accident pay fund, funeral fund, tool benefit fund or like fund operated in accordance' with tules relating to the organization as a whole for the benefit of 1ts members; any property acquired wholly or mainly by expenditure of the moneys of the Fund or derived from other assets of the Fund; and the proceeds of any disposal of parts of the Fund. A Branch Fund shall consist of any real or personal property of which the branch of the organization, by the rules or by any established practice not inconsistent with the rules, 33. has or in the absence of any limited term lease, bailment or arrangement, would have, the right of custody, control or management; (b) the amounts of entrance fees, subscriptions, fines, fees or levies received by a branch, less so much of those amounts as is payable by the branch to the organization; (c) any interest, rents or dividends derived from the investment of the Fund; (d) any superannuation = or long service leave fund operated or controlled by the branch for the benefit of its officers or employees; {e) any sick pay fund, accident pay fund, funeral fund, tool benefit fund or like fund operated or controlled by the branch for the benefit of its members; (£) any property acquired wholly or mainly by expenditure of the moneys of the Fund or derived from other assets of the Fund; and (g) the proceeds of any disposal of parts of the Fund. (4) Rules relating to a Branch Fund shall not be altered except with the consent of the branch concerned. (5) The Registrar may grant to an association or organization exemption from this section or any provision of this section on the ground that its rules make adequate and reasonable provision for its funds, including branch funds, having regard to its functioning under this Act and its participation in any State system of industrial conciliation and arbitration." $.136A provides: 34. "136A(1) Where it is not contrary-to the rules of an organization to do so, it may participate in the systems of conciliation and arbitration or of wages boards or like systems established under the law of a State, and for that purpose a branch of an organization may become registered under a law of a State so long as that registration does not involve the branch in becoming incorporated, or otherwise becoming a legal entity, under the law of a State. (2) Where an organization so participates, its rules may provide that the Secretary of the branch of the organization in the State shall be the person to sue or to be sued under the law of the State in respect of any acts or omissions arising from that participation." The relevant provisions of s.140(1), including para. (d), have been set out earlier. These provisions arose directly from recommendations made by the report of the Committee of Inquiry on Co-ordinated Industrial Organizations, known as the Sweeney Report, after the person who constituted the committee, the late J.B. Sweeney J. The concern of the report was with problems arising from the separate registration of trade unions under the Act and under state legislation. The recommendations in the report were based on the assumption that no branch of an organization registered under the Act was then validly registered under any state legislation, because the conferment of legal personality by 35. ~ "state legislation rendered such valid registration - impossible. This assumption may well have been incorrect; see Bailey v. Krantz (1985) 13 I.R. 339, at pp. 366~379. Upon that assumption, however, proposals were made for a system of non-corporate registration of branches in the various states. It is valuable to have regard to the reasoning which led to those proposals. At p.29 of the report, there appears the following passage: "5. In my view the State system should in each case retain a power to register the bodies which are to participate in its system. The State system should retain the power to determine both the suitability of an applicant seeking registration and the area within which it should operate. These would be matters within the discretion of the State concerned but I contemplate that at least the discretion of the State tribunal in determining whether to register or not wou e exercise aving regar to the degree of autonomy of a federal branch for which registration was sought, the branch's power to control activities within the State system, the presence o officers and Lik ike matters. 6. The State system should also retain the ultimate sanction of deregistration of a federal branch. This is a sanction rarely used but one which the State system has in each case in respect of registered bodies functioning' solely within that system. In the scheme which is proposed, the same ultimate sanction would remain to be exercised in the discretion of the State system. 7. Each State system at ~° present provides for imposition of penalties in cases of illegal strikes or lockouts. In ° New South Wales this has been held to extend to strikes by members of registered unions even though they are 36. employed under federal awards. If this were removed and the power limited to cases concerning the working under State awards there would in my view be no possible conflict with the federal Act and the powers could be as effective in dealing with a federal branch as in dealing with another body registered under the State Act. 8. An issue which has been raised is the need to provide a method whereby the federal branch when registered under a system of non corporate registration may sue and be sued. Since the branch will not be a legal entity, it could not be sued in its own name. The remedy is to provide that the rules of an organisation shall contain a provision that if a branch is to obtain registration to enable the organisation to participate in State industrial systems then the Secretary of the branch shall be the person to sue or be sued in any matters arising under the State Act. 9. Allied with this is the concern, expressed in the main by the State Governments, about methods of enforcement of any penalties imposed. This position can be met by the State machinery requiring, as a condition of registration of a federal branch that the organisation enter into a deed undertaking to pay to the Industrial Registrar any penalty imposed in respect of a strike or lockout under the State Act and remaining unpaid for a period of fourteen days after the last day fixed for payment." (Emphasis added.) At p. 32, in the relevant recommendations, there appeared the following: "That in exercising its discretion to 37. register the State system should satisfy itself that there is sufficient autonomy within the ranch as to matters arising In its participation in the State system and that there are funds available within the state and in the branch. It should also satisfy itself that there are officers within the State of the branch to conduct the affairs of the branch within the State system. The current requirements as to attendance at conferences and the like should apply to such officers and the branch." (Emphasis added. } It may be seen from an examination of the report that ss. 133A, 136A and 140(1)(d) are intended to fulfil the functions expressed in the paragraphs which I have quoted from the report, namely those of enabling authorities in the state system, as it was contemplated, to be satisfied as to the degree of autonomy of a branch seeking registration, and the availability of funds and the means of enforcing pecuniary penalties in the event that a branch registered in the particular state system incurred penalties. Although ss.133A, 136A and 140(1)(d) have been in the Act for some years now, the scheme contemplated by the Sweeney Committee has never come into existence, because no state has legislated to adopt the proposals contained in the Sweeney report. Section 140(1)(d) of the Act is expressed to apply to all organizations. Further, s.9(2) of Act No. 89 of 1974 (sub-s.(1) of which inserted s.140(1)(d)) provided that an 38. e association already registered as an organization should be -allowed a period of twelve months after the date of commencment of Act No. 89 of 1974, or such longer period as the Industrial Registrar should determine, within which to bring its rules into conformity with the requirements of s.140 of the Act as amended. Notwithstanding these factors, in Imlach v. Daley (1985) 7 F.c.R. 457, a majority of the Full Court held that s.140(1)(d) was limited in its effect to organizations with branches participating in state industrial systems pursuant to the recommendations contained in the Sweeney report. As there were and are no such organizations, the section 1s ineffective. The applicants in the present case submitted that this conclusion is incorrect, whilst recognising that it is binding on the Court at first instance. They also sought to distinguish or undermine the conclusion of the majority in Imlach ov. Daley on the basis that it is established that the C. and §.Q. Branch does participate in the Queensland industrial conciliation and arbitration system. In my view, such participation makes no difference. It is plainly not participation as a result of the legislative scheme which followed the Sweeney report; the participation antedates that report, and is pursuant to the legislation as it stood prior to the amendments made to the Act in 1974 (there having been no relevant amendments made to the Queensland legislation). Obviously, there was no need to satisfy the 39. e relevant Queensland authorities of the existence of any degree of autonomy of the C. and S.Q. Branch under the rules of the union, in order for Queensland registration to be obtained or retained. The prior registration in Queensland of the C. and S.Q. Branch does not bring into play any aspect of the legislative scheme based on the Sweeney report. The applicants cannot, therefore, avail themselves of s.140(1)(d). A similar conclusion must follow about s.133A. In Imlach ov. Daley, Evatt and Northrop JJ. took the view that s.133A did not apply to all organizations registered under the Act, as it was part of the legislation proposed in the Sweeney report, and could not operate without at least one state completing that proposed legislative scheme. At p. 470, their Honours said: "It is clear that s 133A is designed to give effect to that part of par 17(8) of the Report which relates to funds of a branch being available to satisfy the requirements of the State industrial system. Section 133A(5) is of importance since that subsection assumes a major premise that the purpose of s 133A is to enable the recommended solution to work. If s 133A is to apply generally to all organisations, there would be a curious result, namely an organisation, a branch of which participates in a State industrial system, could obtain an exemption from the requirements of s 133A, including subsection (4), while an organisation, no branches of which participate in a State industrial system, could never obtain such an exemption." 40. "The c. and S.Q. Branch has obviously obtained and retained its registration in Queensland without the relevant Queensland authorities requiring to be satisfied that the rules of the union guarantee the availability of funds within Queensland to ensure that any penalties imposed can be enforced. I therefore conclude that the applicants cannot rely upon s.133A of the Act in the present case. Because of the arguments which were put, and because it is likely that an appeal will be lodged from this judgment, I should also express my views on the assumption that the above conclusions are incorrect, and that both s.133A and s.140(1)(d) are applicable. The applicants accepted the proposition, referred to by Evatt and Northrop JJ. in Imlach_ v. Daley at pp. 471-472, that the conditions found in s.140(1)(d) are cumulative, and not separate. In other words, if the rules of an organization are required to provide for the autonomy of a branch, they are only required to provide for such autonomy in matters which both affect members of that branch only and concern the participation of that branch in a_ state industrial conciliation and arbitration system. There is no statutory definition of the word 'autonomy' as used in the Act, and, so far, there has been no attempt to define the word judicially. To do so would be 41. e very difficult in the absence of a clear understanding of the requirements of particular state legislation; see Imlach v. Daley at pp. 470-471, per Evatt and Northrop JJ. A branch of an organization registered under the Act is no more than "a section of the total membership of the [organization] - locally organized for the sake of convenience, but in no respect independent of the [organization], and in all respects subject to the control of the [organization]." See the judgment of Fullagar J., with whom Dixon C.J. and Kitto J. concurred, in Williams v. Hursey (1959) 103 C.L.R. 30, at p. 55. The concept of part of a corporation as having autonomy, in the sense of self~determination, 1s a difficult one to grasp. This suggests that the autonomy contemplated is a limited form of autonomy, a measure of self-determination which recognizes that the branch must function as part of a corporation. No less difficult is the determination of what are matters affecting members of a branch only and concerning the participation of that branch in a state industrial conciliation and arbitration system. Attention was drawn to some of these problems in Krantz v. Federated Clerks Union of Australia (1984) 5 F.C.R. 416, at pp. 423-424. These difficulties are apparent in an organization such as the union, which has one set of national rules, applicable to a number of different branches, some of which do not and cannot participate in state systems of industrial conciliation and arbitration. 42. The concentration in the applicants' case on autonomy is on finances. Their case is that the autonomy required includes financial autonomy, to the extent that a branch has in its control sufficient funds to enable it to maintain its level of participation in the relevant state system of conciliation and arbitration. The applicants complain that demands for money by or on behalf of the national council and national executive of the union have so depleted, or will if satisfied so deplete, the funds of the Cc. and §.Q. Branch, as to restrict its performance of functions under Queensland legislation. In particular, the applicants claim that the C. and S.Q. Branch is prevented from pursuing all of the claims which it would like to pursue in the Queensland Industrial Conciliation and Arbitration Commission on behalf of its members, because its funds are imadequate as a result of payments made to the national office of the union. These payments, and demands for Payment, are set out in greater detail elsewhere in this judgment. Autonomy, so the applicants say, includes financial autonomy. The simple answer to this proposition is that the extent to which a branch of an organization contributes funds to the national office of the organization cannot be a matter affecting members of the branch only. Plainly, it affects the organization itself, and the members of other branches, 43. all of whom are intended to benefit from the expenditure of funds at the national level. The autonomy provided for in s.140(1)(d) cannot be such as to enable a branch to dictate to the organization as a whole the extent to which the branch will contribute funds to the organization as a whole, or retain them for its own use. As Dr. Jessup put it, whatever autonomy means, it does not enable a branch to determine the extent of its own participation in a state industrial conciliation and arbitration system. To give such power toa branch would be to tend towards immutability in award coverage, as between state and federal awards. An organization must be free to decide that 1t will engage in a dispute with employers, and seek to have that dispute resolved by the Australian Conciliation and Arbitration Commission under the Act. A branch cannot be put in the position of dictating to the organization whether or not such a step will be taken. To give to a branch that power would be to tend against the whole scheme of the Act. Parliament cannot have intended to make such a radical change, by the insertion of s.140(1)(d), without a much plainer indication of its intention. The very presence of s.133A in the Act also suggests that s.140(1)(d) should not be construed as granting financial autonomy to a branch which participates in a state industrial conciliation and arbitration system. If s.140(1)(d) did give such financial autonomy, there would be 44. e no need for s.133A at all. It must also be remembered that any debt incurred by a branch is a debt of the organization itself, and not of the branch. The intention of s.140(1)(d) cannot be to deprive organizations of the means of discharging their liabilities, by preventing them from having access to the funds held by their branches, if the branches fail to pay the debts. By evidence from the applicant Callaghan, an accountant named Keith Bertram Cooper, and the vice-president of the Cc. and S.Q. Branch, Therese Anne Pearce, the applicants attempted to demonstrate, as a matter of fact, that the autonomy of the cC. and S.Q. Branch had been compromised by the demands for money made by the national council and national officers of the union. The evidence was intended to show that, if the demands were met, the C. and S.Q. Branch would be left with insufficient funds to enable it to participate in the Queensland industrial system to the extent desired by the branch council. Specific instances were given of issues not actually pursued, and of staff reductions, in recent years. In view of the interpretation of s.140(1)(d) which commends itself to me, such evidence can have no bearing on the question of branch autonomy. Even if this were not so, the evidence in the present case does not establish the factual basis for the applicants' argument. Events since the removal of the twenty per cent discount on contributions (referred to in more detail elsewhere in this 45. eK 'judgment), and the raising of the contribution rate, have shown that the C. and S.Q. Branch was capable of undertaking all the programmes it wished to carry out, and achieving a surplus, if it raised its contribution rates to a sufficient level. The applicants relied on s.133A of the Act as requiring that a branch be entitled to exclusive control of funds sufficient for its needs, especially in relation to its participation in a state industrial conciliation and arbitration system. The section does not go so far, however. To attempt to read into the section some implication as to the size of a branch fund, or its purposes, is to create the same problems of reasoning as confront the notion of financial autonomy under s.140(1)(d). The applicants argued that the branch fund should be sufficient to recognise the existing level of participation in the state industrial conciliation and arbitration system, but conceded that the size of the fund might be reviewed from time to time, having regard to any changes in that level of participation. MThis notion is not to be found anywhere in the section. Indeed, an examination of the section underlines the proposition for which Imlach v. Daley is authority, namely that the actual content of the rules required under s.133A would be of more concern to the registering authorities 1n a particular state than to this Court or the federal Industrial Registrar, in the event that legislation to complement s.136A of the Act were passed by any state. 46. The applicants conceded that the rules of an organization need not echo the precise words of s.133A. They also conceded that the rules of the union and the rules of the C. and S.Q. Branch make a distinction between funds and Property under the control of the national council and national executive on the one hand, and those under the control of the C. and S.Q. Branch on the other, and that in this sense, the rules do establish a federal fund and a branch fund. An examination of the provisions of the rules already quoted indicates that this is so. The applicants sought to go further, however, and to say that s.133A requires that a branch have management and control of branch funds, in the sense of power to decide how, when and where to deal with branch funds. Their contention was that if the rules of the union upon their proper construction permit the national council or national executive to fetter the C. and §.Q. Branch's control of its branch funds, then something less than the management and control required by s.133A(1)(b) is granted by the rules of the union. They pointed to the provisions of rules 7(7), 12(2)(a), 27(3), 37(2), (2A), (3) and (4), the provisions of which have already been set out, and to the general powers of the national council, found in rule 17, and the specific power to amend rules found in rule 42. a7. This argument is based on the assumption that the management and control of the branch fund contemplated by s.133A(1)(b) must involve exclusive control. Nothing in the section warrants this conclusion. It would amount to a dramatic change in the nature of organizations. An organization registered under the Act is a body corporate, by virtue of s.136; see Williams v. Hursey (1959) 103 C.L.R. 30, at p. 52. The corporation is the owner of all of its funds; they cannot belong separately to its branches. It must have an interest in the collection, preservation and proper application of those funds. Similarly, .an organization must have rules. To the extent to which it has separate rules for the operation of branches, those rules Must inevitably be subordinate to the rules of the organization itself, and some machinery must exist for ensuring that the rules of a branch are not, or do not become, inconsistent with the rules of the organization itself. All of the general powers given by the rules of the union to its national council and national executive, including the powers to amend rules and to supervise the amendment of branch rules, are no more than one would expect within an organization. Similarly, the specific powers designed to protect and preserve the funds of the organization are no more than proper rules for _ the preservation of the integrity of the organization as a corporation. Even if it is a provision of general 48. e application, $s.133A does not enable a branch of an organization to thumb its nose at the governing body of the Organization in relation to funds. The provisions of sub-s.(4) were relied upon as an indication that the section was itself intended to guarantee some degree of autonomy with respect to the funds of a branch. I do not think that this is so. An examination of the form of the section as a whole serves only to reinforce the conclusion reached in Imlach_ v. Daley that it is designed to provide for rules which satisfy registering authorities within states, rather than to impose absolute and rigid divisions as to the government of organizations. If s.133A of the Act is a provision of general application to organizations, then it must be construed in the context of the nature of organizations, as Parliament must be taken to have appreciated it in 1974. To construe it as implying a specific type of branch fund, and a rigid division of control between the branch and the organization itself as to that branch fund, would be to impose a dramatic new burden on all organizations, particularly those with branches which do not participate in state industrial systems. If such a construction had been intended, it would have been easy for the Parliament to make clear that it was intending to standardize the rules of organizations relating to funds. In the absence of specific provisions, the section should be construed so as to make compliance easy rather than 49. difficult and flexible rather than rigid. For these reasons, the applicants' challenge to the rules of the union as a whole, on the basis that they fail to make the provisions required by ss. 133A and 140(1)(d) of the Act, must fail. Specific challenges were also mounted to the validity of the provisions now found in rule 7(5) and (7) of the national rules of the union, on the basis that such provisions are ain conflict with s.133A and _ therefore contravene s.140(1)(a) of the Act. As to rule 7(5), the complaint was based on $.133A(2)(c). The applicants recognised that s.133A(2)(c)} contemplates that the rules of an organization may provide for the payment by a branch to the organization of the whole of entrance fees, subscriptions, fines, fees or levies received by the branch. They argued, however, that this provision indicates that the Act contemplates that it will be a branch which receives those moneys in the first place, and that the rules must provide for payment by the branch to the organization of the whole or part of those moneys. The scheme of the Act, so the applicants say, is that the rules must provide for the payment of the whole of the relevant moneys by the branch to the organization, and that the payment must in fact be made or ordered to be made, before 50. e those moneys can become part of the federal fund. In seeking . to impress entrance fees, contributions, fines and levies with the stamp of the federal fund from the outset, rule 7(5) is said to be in disconformity with this provision. So to read s.133A(2)(c) is to elevate it to a requirement that all registered organizations which have branches collect entrance fees, subscriptions, fines, fees and levies by way of the branch. In my view, this was not the intention of the provision. There is no reason why an organization could not collect all such moneys at the central or national level, and why such moneys could not form part of the federal fund under s.133A(2)(a) if s.133A were applicable. Again, it must be remembered that not all organizations have branches, and not all branches conform to any particular model as to their extent, membership, powers and methods of administration. In my view, there is no requirement that an organization collect moneys from its members through its branches and only treat so much of those as are paid over to the organization itself as part of the federal fund. The complaint against rule 7(7) was based on s.133A(1)(b). It is said that the rule removes the branch fund from management and control in accordance with rules of the branch itself, by permitting persons who are not or may not be members of the branch, and who are not responsible to 51. e the branch council, to withdraw money from a branch bank account. The challenge to this rule really follows upon the challenge to rule 7(5). The assumption 1s that the moneys received under rule 7(5), which are the subject of rule 7(7), are really moneys belonging to the branch fund. If, as I have held, rule 7(5) is valid, then the moneys concerned belong to the federal fund in any event. Even if this were not so, I doubt whether a provision such as rule 7(7), which does not grant to the national president and national secretary any authority to operate the relevant bank accounts outside authority properly given by the branch rules, could be said to contravene s.133A(1)(b). The specific challenges to rule 7(5) and (7) are rejected. THE CHALLENGE TO RULE 15(1). This challenge was based on s.140(1)(c) of the Act. It is alleged that, because rule 15(1) enables the national executive to discriminate between branches as to the amounts of money which it requires to be paid to it, and enables retrospective increases 1n amounts due by a branch to the national executive, it therefore imposes conditions, obligations or restrictions which are oppressive, unreasonable and unjust. The applicants recognise that the rules of an organization may require some branches to pay 52. e more to the central governing body of the organization than . other branches pay. They do not, therefore, challenge rule 15(3)(d), under which larger branches will pay more per member than smaller branches, by way of sustentation fees. The real complaint which the applicants have about rule 15(1) is that it is capable of discriminatory or capricious operation in relation to a particular branch, so as to denude that branch of finances, whilst leaving other branches with effective control of their funds. At the outset, it must be recognised that rule 15(1) is directed towards the giving of a direction to a specific branch, as distinct from branches generally. The use of the singular "a branch" is deliberate, as is shown by the references to "such branch" and "every branch" later in the rule. It is clear, therefore, that rule 15(1) may be relied upon by the national executive to collect amounts from different branches, calculated on different bases, and varying otherwise than in accordance with the population of the respective branches. Amounts may also be collected in respect of past or future expenditure at the national level, and the national executive need not necessarily have regard to the needs for funds which a particular branch perceives or claims to have. In these senses, the rule does enable the national executive to discriminate between branches in the collection of funds. The limitations on the operation of the rule are that the funds concerned must be those collected as 53. ~ "entrance fees, contributions, fines and levies, and that funds which have actually been spent by a branch cannot be the subject of a direction. This latter restriction is revealed by reference to rule 15(1A). The applicants' argument assumes that a branch is in some way entitled to have funds at its control, to the exclusion of the organization itself, and that the interests of the members of the branch will be affected adversely by the transfer of funds from the branch to the national level. In the absence of any binding effect of s.133A of the Act, or of rules entitling a branch to control of funds, the first assumption has no validity. Rules under which an organization's funds were controlled at the central or national level would not, merely by reason of that fact, contravene s.140(1)(c). It must be remembered that the provision of the Act 1s concerned with conditions, obligations or restrictions imposed upon members or Prospective members. The rules oblige a member. or prospective member to pay a certain sum or certain sums of money. The rules of the union thereafter make provisions as to the manner in which the money so paid will be administered; some will be administered at the branch level and some at the national level. Machinery ex1rsts to enable the division of control of the money to be changed from time to time, in accordance with the wishes of the national executive. A change which involves the control of a great 54. e "amount of the money at the national level does not make any . change to the conditions, obligations or restrictions imposed upon any member at the branch level. This 1s so even if the members in different branches have their funds controlled at the branch and national levels in different proportions. The law cannot assume that control of funds at the national level involves adverse effects on the interests of members of branches. Even if a branch finds it necessary to raise the level of contributions in order to have at its disposal more funds than the national executive chooses to leave for it, this cannot mean that the rule under which the national executive is empowered to call up funds imposes on members conditions, obligations or restrictions which are 1n contravention of s.140(1)(c). It must also be remembered that the power of the national executive to assume control of funds is like all other powers given in the rules of registered organizations under the Act. It must be exercised in good faith and for the purposes for which 1t 1s given. See Scott Vv. Jess (1984) 3 F.C.R. 263, at pp. 269-270 and 287, and the authorities there referred to. Should the national executive exercise its power in relation to a particular branch in bad faith, or for an ulterior purpose, appropriate proceedings can be taken under s.141 of the Act to redress the position. This is not the case made in the present proceeding. 55. e For these reasons, the attack on rule 15(1) fails. SUSTENTATION FEES. The formula for calculation of sustentation fees, found in rule 15(3) of the national rules of the union, appears complex at first sight. On examination of it, two purposes may be discerned. In the first place, the rule seems to be designed to operate in conjunction with the powers given by the rules to branches to fix their own contribution rates, and to compensate for the fact that different branches may f1x different contribution rates from time to time. By dividing the total amount received as contributions by the most usual rate, or the various totals by the rates for various classes of members, each branch will arrive at a number of membership units which will be roughly Proportional to that branch's percentage of the total membership of the union. The second purpose of the formula appears to be to provide for a reasonably even flow of income to the national office of the union from each branch. It 1s to be noted that sustentation fees are required to be paid each half year, in respect of the two immediately preceding half years. Given that most branches will have an annual contribution rate, and given that most members will tend to pay their contributions in the early part of the branch's financial year, a system 56. e "requiring half yearly payments in respect of one half year only would give rise to an uneven flow of income to the national office. This problem is overcome by requiring Payment always to be made in respect of the two preceding half years. The result is that payment is made twice in respect of any half year's income. Mr. Wasson, the assistant national secretary of the union, gave evidence of a third purpose which the formula was intended to achieve. The rates set by rule 15(3)(c) from time to time are regarded by Mr. Wasson as appropriate for the members to pay for contributions. It is Mr. Wasson's hope that, by specifying these rates in rule 15(3)(c), each branch will be encouraged to fix its contribution rate at or close to the amount specified. It should also be noted that, by virtue of rule 15(3)(d), the larger branches' subsidise the smaller. Previously, the rule fixed three different percentages, applicable to branches with three different membership levels, but the middle level was abolished and the rule was amended so as to place the C. & S.Q. Branch in the higher bracket. No complaint is made in the present case about this fact. For some years prior to 1982, the C. & S.Q. Branch allowed its members a discount of ten per cent of the annual contribution rate if they paid by a specified date. During 57. e "those years, the secretary of the C. & S.Q. Branch was one Joan Riordan, who is one of the respondents for whom Dr. Jessup appeared. The practice of discount seems to have gone back at least to 1976, and may have existed earlier than that. In calculating its membership units for the purposes of rule 15(3), the C. & &.Q. Branch traditionally divided the total contributions received by it by the adult contribution rate, without taking into account the discounted rate in the divisor. This process resulted in a lower figure for membership units than would have been obtained if the total amount received as discounted contributions had been divided by the discounted rate. One of the election promises of the applicants and their "team" in 1982 was to increase the discount to twenty per cent, and extend it to all members who paid their contributions by way of payroll deductions, as well as those who paid by the specified date. The purpose of this policy was explained by Ms. Callaghan who became branch secretary in December 1982, as being to encourage members to pay promptly, or to commit themselves to a payroll deduction system, so that the C. & S.Q. Branch would have a reliable source of income. Once the applicants were elected, the branch council implemented this policy. Accordingly, from January 1983 until the end of 1985, all members who paid their 58. é "contributions in a lump sum before 3ist March in any year, or by way of payroll deduction, received a twenty per cent discount. On 29th November 1985, the discount was reduced to ten per cent and was made available only to members who paid before 28th February in any year. During the time of its operation, the twenty per cent discount was availed of by the majority of members. Various estimates were given in evidence. Ms. Callaghan's own estimate was that 96.5% of members paying in the first half of 1985, and 84.5% of members paying in the second half of 1985, received the discount. From the outset of the twenty per cent discount, no change was made in the manner of calculating membership units for the purposes of rule 15(3). The total amount received by way of contributions was divided by the adult rate as fixed by rule 15(1)(a) of the branch rules. At no stage was the discount brought into the calculation. The result was a markedly lower figure for the number of membership units for the C. & S.Q. Branch than had been the case in previous calculations. In turn, on the basis of the lower figure of membership units, the C. & S.Q. Branch has calculated and paid its sustentation fees. This has led to a number of demands by some of the respondents to the C. & S.Q. Branch, and to declarations by the national council of the union that the C. & &.Q. Branch is unfinancial. 59. e In December 1983, the national executive met and resolved as follows: "It is noted the Central & Southern Queensland Branch has used the full Adult Male rate in establishing membership units for Sustentation Fee purposes, even though heavily discounted contribution rates have been collected. The effect is a substantial reduction in Sustentation Fees payable. This 1s to the detriment of the Federation and other Branches. It is further noted this method of calculation has been applied by the Branch for some years past and that it is contrary to the provisions of Rule 15. Executive directs the Branch to provide adjusted figures on a proper basis and to pay the outstanding balance by 29 February, 1984." The respondent Sullivan, the national secretary of the union, notified Ms. Callaghan of this resolution by letter dated 9th January 1984, Ms. Callaghan replied by letter dated 31st January 1984, enclosing a complete calculation of the C. «& S. Q. Branch's sustentation fees, and asserting that the calculation was "by proper legal interpretation of Branch and National Rules 15". The branch was given a receipt dated 8th February 1984, for the amount which it had paid, described as "part payment - sustentation fees". The applicant Woods, as acting branch secretary, responded to this by letter dated 20th February 1984, asserting that the payment had been of the full amount of sustentation fees, and that presentation of the cheque for payment would be on the understanding that the C. & S.Q. Branch was financial. The letter concluded 60. ~ "should your position on the matter differ from that of the Branch, then I would expect the return of our cheque." On 3ist July 1984, a further payment of sustentation fees was made, calculated by the C. & S.Q. Branch method. Between 7th and 14th November 1984, the national council of the union met. It resolved in the following terms: "In addition to the decision of the National Executive of 1983 relating to the calculation and consequent underpayment of sustentation fees by the Cc. & §.Q. Branch; Council determines that the long standing interpretation of Rule 15 by the National Executive and now by National Council is a correct one. This view has been supported by two learned Counsel (QC's). In the event that the C. & S.Q. Branch continue to dispute the matter and fails to pay the outstanding amounts' by 31.12.84, Council now determines to exercise its power under Rule 15(1) and decides that the sum of $40,000 which approximates the amount involved shall be paid instead. The liability shall arise on ist January, 1985 and the amount shall be paid not later than 28th February, 1985." On 8th December 1984, the branch council of the C. & S.Q. Branch resolved to defer the payment of sustentation fees which was due on 3lst January 1985 (in respect of the period to 31st December 1984). The reason for the deferral 61. e " was expressed as the refusal of the national council, at its meeting in November 1984, to accept a comprehensive report relating to the activities of the branch for the previous two years. Ms. Callaghan advised Mr. Sullivan of this resolution by letter dated 16th January 1985. The resolution was to defer the payment of sustentation fees "until the national office gives a satisfactory explanation" for the refusal to receive the report. By letter dated 7th March 1985, the respondent Maynes, in his capacity as national president, reminded Ms. Callaghan of the branch's obligation to pay sustentation fees and other outstanding liabilities, and warned that if the moneys were not received in the national office by i5th March, action would be taken to have the branch declared unfinancial. No 'payment was made by 15th March, and on 22nd March 1985, Mr. Maynes circulated to members of the national council a ballot form for a postal vote, containing a motion that the C. & S.Q. Branch be declared unfinancial because of its failure to pay sustentation fees due on 31st January 1985. By letter dated 25th March 1985, Ms. Callaghan communicated arguments to the national councillors against the motion the subject of the postal vote. Mr. Sullivan responded by letter dated 26th March 1985 to all national councillors, urging a vote in favour of the motion. In the result, the motion was carried by 22 votes to 5. Members of the national council were so advised by letter dated 29th March 1985 from Mr. Sullivan. On 2nd April 1985, Ms. Callaghan wrote to Mr. Sullivan, 62. e 'asking for his advice as to the consequences of the declaration of unfinancirality, so that she could report to the next meeting of the branch council of the C. & S.Q. Branch on 20th April. In reply, dated 12th April 1985, Mr. Sullivan simply drew Ms. Callaghan's attention to national rule 15(4). On 20th April 1985, the branch council of the C. & S.Q. Branch resolved to pay the sustentation fees payable in respect of the six months to 31st December 1984. Mr. Sullivan was advised of this resolution by letter dated 23rd April 1985, with which was enclosed a cheque, and which ancluded a request that a vote of the national council be taken to declare the C. & S.Q. Branch financial. Copies of this letter were forwarded to all national councillors. By letter dated 1st May 1985, Mr. Sullivan advised all national councillors that the C. & S.Q. Branch was not financial because of a failure to pay the $40,000 fixed by the national council in substitution for previous alleged underpayments of sustentation fees, because of a failure to calculate sustentation fees by using the discounted rate of contributions as a divisor, and because of a failure to pay a further sum (dealt with later in these reasons for judgment) alleged to be due on 1st April 1985. The next payment of sustentation fees was due on 3ist July 1985. A payment was forwarded by the Cc. & S.Q. 63. e "Branch on that date. It was calculated according to the _Method used by the branch, namely using the full rate of contributions as the divisor. In a letter dated 11th September 1985, Mr. Sullivan alleged to Ms. Callaghan that the amount paid involved an underpayment of $19,807.29. On 15th October 1985, Mr. Sullivan asked members of the national council to engage in another postal vote on the following resolution: "That the National Council re-endorses the vote of National Council of 29th march [sic.], 1985 declaring the Central and Southern Branch of the Union unfinancial and that the Central and Southern Queensland Branch be declared unfinancial pursuant to Rule 15(4) of the National Rules of the Union for failing to forward, within the time prescribed, the amounts due and payable under the said rules as at the date hereof." The letter itself recommended that the C. & S.Q. Branch be again declared unfinancial "on account of failing to remit all amounts owing under the Rules". The postal vote was in favour of the resolution by 23 votes to 2, and the result was communicated to national councillors by circular letter dated 4th November 1985. The C. & S.Q. Branch has not at any time forwarded to the national office of the Union the additional amounts alleged by the respondents for whom Dr. Jessup appears to be 64. eK " due and owing in respect of sustentation fees, or the sum of $40,000 fixed by the national council meeting in November 1984 in lieu of the alleged shortfall. The question which must be determined is whether sustentation fees have been calculated correctly in respect of the periods under review. If it is appropriate to use as the divisor the full adult contribution rate, as the C. & S.Q. Branch has done, then the full amount of sustentation fees has been paid in each such period. On the other hand, if the C. & S.Q. Branch was obliged to use a discounted rate as the divisor, then the full amount has not been paid, and there 1s a considerable shortfall. In support of the proposition that sustentation fees had not been calculated correctly, Dr. Jessup drew attention to the words in rule 15(3)(b) "provided that where more than one adult male rate applies, by dividing the total amount received by the Branch as contributions from members in each respective class, by the adult male rate applicable to that class". It was his submission that the decision of the branch council of the Cc. & S.Q. Branch to allow a discount gave rise to a situation in which more than one adult rate applied. Accordingly, sustentation fees for the relevant period should have been calculated by dividing the total amount of discounted contributions received by the discounted rate, and the total amount of other contributions received by the full adult rate. 65. The difficulty which confronts this argument is that the rate of contributions is set out in rule 15(1)(a) of the branch rules. Under rule 7(2) of the national rules, contributions payable to the union by any member "shall be such sum as is provided by the rules of the branch of which he is for the time being a member." The rules, therefore, require payment of contributions at the rate specified in the branch rules, and do not permit a branch council to specify a separate rate. General powers of a branch council to manage the affairs of a branch would not ordinarily be construed as permitting the branch council to override the express provisions of the rules. Similarly, no power could be implied in the rules where such implication would involve contradiction of an express provision. It follows that, according to the rules, only one adult rate of contributions was applicable at the relevant times, and the branch council had no power to establish another rate. All that occurred was that the branch council failed to collect from members of the Cc. & S.Q. Branch the full amount of contributions due and payable by them. It should be noted that the same conclusion was reached by Keely J. in Re Application by Brophy for an Inguiry into an Election in the Federated Clerks Union of Australia (judgment delivered Sth June 1987, not yet reported), in relation to the precise situation the subject 66. e "of the proceedings before me. It is not open to the Court in one case to adopt the conclusions of the Court in another case as to matters of fact; still less, can the Court in one case rely upon evidence given in another case, unless that evidence is tendered properly. This is so even if the two proceedings are concerned with precisely the same facts, as they are in the Brophy case and in these proceedings. I have reached my conclusions independently of those of Keely J. Nevertheless, it 1s desirable that the Court should not express conflicting judgments in different cases on the same set of facts. It would be a matter of great concern to me if my conclusion on the matter had differed from that of Keely J. In view of the fact that only one adult rate of contribution was applicable, and that this was the rate used as the divisor in each of the relevant periods, it follows that the Cc. & S.Q. Branch sustentation fees were calculated in accordance with the precise terms of rule 15(3) of the national rules of the union. Dr. Jessup urged that I should construe that rule according to its purpose, and hold that 1t required adjustment of the sustentation fees to take account of the discounted contributions. To do so would involve more than mere construction of the rule. It would involve the notional addition of other provisions, requiring a different calculation from that laid down in the rule, in circumstances where the full amount of contributions was not paid by 67. e members. Such an exercise 1s not permissible, even if the result of it would be to produce greater fairness. It is interesting to note that the rules do not make provision for any change in the method of calculation of sustentation fees in respect of discounts expressly allowed by the rules, such as those in branch rule 15(2)(a) and 15(5) of the branch rules. Nor is there any provision for adjustment of the calculation of sustentation fees in respect of contributions which may be waived in part pursuant to rule 18(a) of the branch rules. It 1s not to be supposed that the rules somehow contemplate a change in the method of calculation in respect of a discount which the rules themselves do not allow. The consequence of this conclusion 1s that many members of the C. & S.Q. Branch of the union are not financial; undoubtedly their lack of financiality is not due to any default on their part, they having paid all that has been demanded of them. This is a consequence which will have to be addressed by the C. & S.Q. Branch in other ways, whether by further proceedings in this Court or otherwise. It follows from the conclusion I have reached about sustentation fees that an order should be made calling upon the respondents to perform and observe the rules by treating as null and void the resolution concerning arrears of sustentation fees in respect of the relevant periods, and by 68. e 'refraining from making further demands for such alleged arrears. Whether the conclusion carries further consequences in respect of the declarations of unfinanciality of the C. & $.Q. Branch is a question which depends in part upon the validity or otherwise of other demands made by the national council for payments by the C. & S.Q. Branch. The question of unfinanciality will therefore be discussed separately, after I have dealt with the other demands. LITIGATION COSTS. Since the election of the applicants and their team to the branch council of the C. & S.Q. Branch in 1982, there has been much litigation in this Court, involving the applicants. In many cases, national officers and members of the national council of the union have been parties; in some cases, the union itself has been a party. There was litigation involving the refusal of the outgoing officers to hand over control of the C. & S.Q. Branch and its funds, litigation over the refusal of the national council to recognise newly elected members of it, and litigation over what has been described as the "Brisbane Annexe". After their election, the applicants and their team dismissed a number of persons formerly employed by the union in its C. & S.Q. Branch in the positions of organizers, industrial officers and similar jobs. These persons were then employed by the national executive in the Brisbane Annexe. The reason 69. e for their employment is unclear. Mr. Wasson attempted to explain it as the desire of the national executive to have performed certain functions which the C. & S.Q. Branch was not then performing. It may, however, have been a desire to retain persons sympathetic to the national office in employment. At all events, litigation occurred over the validity of the Brisbane Annexe. In most of the cases, the applicants have been successful, although not in all. Because of the application of s.197A of the Act, no costs have been awarded by the Court in any of the cases. At its meeting in November 1984, the national council passed the following resolution: "That in accordance with long standing policy and procedures determined by the then Federal Executive in session in September 1955 those case costs incurred by the Union in action involving the Central and Southern Queensland and the South Australian Branches in which the Union or its National Councillors were cited as respondents or joined to the proceedings shall be charged against the Branch concerned. Accounts to date shall be rendered by the end of November, 1984 and those amounts shall be payable by not later than 28th February 1985. Any subsequent accounts for accrued costs or new costs shall be rendered to the Branch concerned and the Branch shall pay the amount not later than 60 days after despatch of the claim." To some extent, the applicants' claim to have this resolution 70. ~ treated as null and void is based on considerations which are not justiciable under s.141 of the Act. For instance, the applicants put in evidence a resolution of the federal executive of the union on 12th September' 1955, that being the resolution establishing the policy referred to in the resolution of November 1984. They claimed that the 1984 resolution was not within the terms of the policy, on the proper construction of the 1955 resolution. The correctness or otherwise of this view is something that the Court cannot determine. The question is whether in November 1984 the National council had power to resolve to make particular branches pay particular case costs. A second attack on this resolution was on the basis that 1t was not authorised by the rules, which would be in contravention of s.140(1)(c) 1£ they did authorise it. The basis of this argument was that there is injustice involved in requiring the victors in litigation to pay the costs of the losers. So to view the matter involves a misconception. Assuming that the legal costs of the parties concerned are properly paid out of the funds of the union, and there is nothing to suggest that that assumption is incorrect, the question becomes out of which funds they should be paid. So far as the costs of federal officers and members of the national council are concerned, the choice is between paying the costs out of funds contributed by all branches and paying them out of those contributed by some branches only. The former course, namely that of visiting costs on branches having nothing to do with 71. e the litigation, might seem to some to be more unjust than the course which was actually adopted, of visiting the costs upon the branches concerned with the litagation. One course 1s no more objectively unjust than the other. The real concern of the applicants with respect to the case costs was with questions of financial autonomy and the exclusive nature of branch funds. These questions have already been dealt with. Accordingly, nothing in s.140 of the Act leads to the conclusion that the rules of the union cannot authorise the case costs resolution. That resolution is therefore valid. It is worth noting that, despite the resolution of the national council in November 1984, no actual demand for the costs of any particular case has been made against the C. & S§.Q. Branch. No explanation was given for the apparent disregard of the resolution at the national level. THE $250,000 RESOLUTION. At the same national council meeting in November 1984, a recommendation was received from the finance committee: "That a further $250,000 be raised as sustentation fees from Branches for the year ended 30.6.84. 72. . Further that this amount be raised in proportion to sustentation fees payable by Branches in the financial year to 30.6.84 as shown in the Financial Report Sustentation Fee statement, and be payable on the lst April, 1985." This recommendation was moved by the National President and seconded. After debate, it was carried by a majority. By letter dated 22nd February 1985, following the decision in Krantz v. Federated Clerks' Union of Australia (1984) 5 F.C.R. 416, the national secretary sought a postal ballot involving a rescission of that resolution, and its replacement by one in the following terms: "Phat $250,000 be raised from entrance fees, contributions, fines and levies received by Branches to be payable by lst April, 1985. The amount to be paid by each Branch shall be and is hereby determined as being the same proportion of $250,000 as was the sustentation fee payable by that Branch to the total sustentation fees payable by the Branches for the year ended 30th June, 1984." The postal ballot resulted in this proposal being adopted as a resolution. National councillors were so advised by letter dated 12th March 1985 from the national secretary. On this basis, a demand was made of the C. & S.Q. Branch by letter dated 26th April 1985, for the sum of $44,302.17. On the evidence, this calculation was made on the basis of sustentation fees actually paid by the C. & S.Q. Branch for 73. e the year ended 30th June 1984, not on the basis regarded as correct by the national officers. An attempt was made to challenge the validity of the resolution requiring payment of $250,000 by the branches, on the basis that the deficit in the national funds of the union which the $250,000 was intended to rectify was caused largely by expenditure on the Brisbane Annexe. This Proposition became a matter of debate at the trial. Mr. Wasson gave evidence that the $250,000 was required because the national office had exceeded its budget in the financial year ended 30th June 1984, having suffered a deficit in the preceding year. He said that the budget included an allocation for the Brisbane Annexe, which was not exceeded, and that therefore the excess was due to other expenditure. In the event, it is unnecessary to determine this issue. The real question is whether the rules of the union justify the collection of funds from branches in this manner. The answer depends upon those matters of branch autonomy and branch funds which have already been determined, and on the question whether, if construed to permit the raising of funds in this Manner, the rules of the union would contravene s.140(1)(c), by imposing on members of the branches' conditions, obligations or restrictions which, having regard to the objects of the Act and the purposes of the registration of organizations under the Act, are oppressive, unreasonable or unjust. As I have already said, rule 15(1) of the national 74. e 'rules does permit the raising of funds in this manner, and _does not contravene the provisions of s.140(1)(c). That conclusion determines the validity of the $250,000 resolution. It should be noted that the C. & S.Q. Branch has not paid any part of the sum of $44,302.17, due by it as part of the $250,000. THE NATIONAL JOURNAL. For many years, the C. & S.Q. Branch has published and distributed to its members a branch journal. Since the applicants' election to office, the branch journal has been known as "The New Clerk". The union also publishes a national journal entitled "The Clerk". At the national council meeting on 13th November 1984, the following resolution was carried: "Council notes with satisfaction the establishment of the National Journal and its extension throughout the year to embrace the substantial majority of the membership. This has meant in the majority of cases a bigger journal covering a wider range of subjects. Moreover this has been achieved with little or no extra costs to Branches concerned. Council determines that by not later than the first issue in 1985 the National Journal shall be the sole official journal of the Union and 75. e be circulated to all members in our major geopgraphic [sic.] Branches not less than four times per annum. In accordance with the practice established with other Branches the Central and Southern Queensland Branch shall have eight pages for local content and the South Australian Branch four. Between now and 31st March 1985, a discussion should be held with the Executive of the Taxation Officers Branch with a view to establishing an A.P.S. Section in the Journal which will be specifically directed at the Taxation Officers Branch membership and the A.P.S. members in other Branches. The Branches concerned are now required to extend the fullest cooperation to the National Office and the National Editor to give effect to this final stage of achieving a_ long standing policy at having a National Journal as the official organ of the Union." This resolution has led to controversy in a number respects. Callaghan, In a letter dated 15th October 1985 to the national president made a number complaints, including the following: "In addition to the above, your branch 15 under instruction to supply this office with a full list of members for the purpose of posting the National Journal to then. This has not been done. You are aware of the National Council decision to extend the National Journal to all branches. Likewise the National Council decision to extend the National Journal to all branches involved those branches ceasing to publish any local branch journal. It is noted you are continuing to use Union funds for this unauthorised purpose. In fact, the last branch journal published, appears to be double the size of past issues." of Ms. of 76. e In a further letter, dated 24th October 1985, the national _ president wrote to Ms. Callaghan: "You and your officials have sought, contrary to the Rules, to defy the November 1984 National Council decision on the publication of the Union Journal. Extreme patience has been exercised by National authorities on the matter. You not only have continually failed to supply the addressed labels for despatch and sent useless material on one other occasion, but on this occasion forwarded material which has already been published." Ms. Callaghan gave evidence that, although the Cc. & &.Q. Branch did not supply addressed labels, it had offered previously to distribute the national journal to its own members. She also said that a last of branch members for mailing was provided. By letter dated 17th December 1985 to Ms. Callaghan, Mr. Wasson demanded payment of $11,749 for the production, printing and postage costs of 18,000 copies of the national journal for members of the C. & S.Q. Branch. No part of this amount has been paid. Ms. Callaghan justified the failure to pay on the basis that the C. & S.Q. Branch council feels that the members of the branch are better served by a branch journal than by the national journal, and that the editor of the national journal refused to publish material submitted by the C. & S.Q. Branch. In response to this latter allegation, Mr. Maynes in his letter dated 24th 77. e October 1985 alleged that the material forwarded was material already published in the branch journal, and was of a poor standard. In place of the rejected material, there was published material written in the national office, which the applicants allege constituted an attack on the officers of the Cc. and S.Q. Branch. The validity of the resolution of the national council in November 1984 does not depend upon the outcome of these controversies. It depends upon the question whether the rules of the union give the national council power to resolve in this fashion. Further, the valadity of Mr. Wasson's demand for money in respect of the journal will depend upon whether there 1S a resolution of either the Mational council or national executive authorising such demand. Those clauses in the objects of the union in the national rules and the branch rules, which relate to the establishment of journals, have already been set out. In the light of the object in rule 3(e) of the national rules, the power of the national council to establish a national journal for the union is undoubted. On the other hand, having regard to the presence of the object in rule 4(e) of the branch rules, which has the effect of authorising a branch journal, and the specific provisions of rule 15 6. of the branch rules as to the allocation of money for a journal, it is difficult 78. e to see how the national council could determine validly that the national journal is to be the sole official journal of the union. Such a resolution is inconsistent with the rules, at least to the extent to which it is inconsistent with the provisions relating to journals in the rules of the C. & S.Q. Branch. In view of the controversy about the publication of the Cc. & S&.Q. Branch journal, an order should be made requiring the respondents to treat as null and void so much of the resolution as seeks to make the national journal of the union the sole official journal of the union, to the exclusion of the C. & S.Q. Branch journal. There is no issue as to the effect of the resolution in relation to other branches. I am also of the view that the national council resolution of November 1984 does not authorise Mr. Wasson to demand payment of the C. & S.Q. Branch for the production, printing and postage costs of the national journal for C. & S.Q. Branch members. There is no express requirement in the resolution that branches pay anything towards the cost of production of the journal. I do not regard the general requirement that branches "extend the fullest co-operation to the National Office and the National Editor" as incorporating a requirement of payment. In their ordinary meaning, and in their context, these words would not suggest that payment was to be required. It is possible that there is some other resolution of the national council or the national executive, 79. e -calling up funds from branches for this purpose, but there is no evidence of such resolution. Accordingly, Mr. Wasson's demand appears to me to have no legal force. It can be ignored or complied with by the C. & &.Q. Branch officials or branch council, as they see fit. I do not think any order relating to the demand is necessary. THE BANK ACCOUNTS DEMAND. In his letter to Ms. Callaghan dated 15th October 1985, Mr. Maynes wrote: "I also take this opportunity of drawing your attention to the provisions of Rule 7(5) which requires that the signatories to accounts at which funds are held "shall be _ persons authorised by the branch in respect to which the accounts were established, and the National President and the National Secretary, any two of whom may sign cheques drawn on the accounts". I would ask that you specify each of the accounts where monies of the Union are held and to forward appropriate forms authorised as required by the body holding the funds to enable the National Secretary and myself to register our signatures with those bodies under the conditions which = are described in the rules, namely, any two of the signatories being able to draw cheques on the account." Neither Ms. Callaghan nor any other official of the C. & S.Q. Branch has complied with this demand. To the extent to which it is said to be based on rule 7(7) (the present numbering of the rule containing the provision quoted by Mr. Maynes), 80. e "this demand is not valid. There is no evidence that the _ national executive has prescribed any banking account for the purposes of rule 7(7). That rule only provides for the signatories to such prescribed banking accounts. The rule itself does not authorise demands for particulars of bank accounts, for the purpose of enabling the national executive to prescribe those bank accounts. The demand does not purport to be from the national executive or national council, so does not carry the sanctions contemplated by rule 27(3)(b) of the national rules. Dr. Jessup did not attempt to draw attention to any other rule as justifying this demand. Accordingly, the demand is one which Ms. Callaghan is entitled to ignore if she wishes to do so. No order with respect to this demand is necessary. THE FINANCIAL STATUS OF THE C. & S.Q. BRANCH. When the c. & S.Q. Branch was first declared unfinancial in March 1985, there is no doubt that it had failed to forward the amount of its sustentation fees due on 3ist January 1985. In this respect, the resolution declaring the C. & S.Q. Branch unfinancial was amply justified by rule 15(4) of the national rules. That resolution in terms referred to the failure to pay sustentation fees due on 31st January 1985. By the time of the second resolution to declare the 81. C. & §.C. Branch unfinancial, in October 1985, those sustentation fees, and all other sustentation fees required by the rules had been paid. That resolution, however, did not refer specifically to a failure to pay sustentation fees, but referred to the failure to pay "the amounts due and payable under the said rules". If there were in truth amounts due and payable under the national rules at that time, then the resolution is soundly based. If not, the resolution is invalid. Leaving aside the sustentation fees themselves, there were two amounts alleged to have been due and not paid by the C. & S.Q. Branch as at October 1985. The first was the sum of $40,000 fixed by the national council of November 1984, purportedly in substitution for unpaid sustentation fees. The second was the sum of $44,302.17, being the C. & 8.Q. Branch's share of the $250,000, the subject of the national council postal ballot resolution of February 1985. In determining the validity of a _ resolution, whether arrived at in a meeting or by a postal ballot, the Court is confined to looking at the text of the resolution itself, and any source of authority or power to make 1t. The Court does not sit on appeal from the resolution making body, to determine whether proper grounds existed for the 82. ~ resolution. It is not always easy to determine what the grounds of a resolution were. In particular, great care must be taken to avoid relying upon matters stated in debate, or in literature accompanying a ballot paper in a postal ballot. Such matters may or may not have influenced particular members of the relevant body in casting their votes. Such members may have been influenced by considerations which are unstated. If the text of the resolution contains its own grounds or purposes, the Court can assume safely that those who voted for the resolution voted for it as a whole, and thereby adopted the grounds or purpose. If there turns out to be no basis in law for the resolution on those grounds,or if the purposes stated render the resolution contrary to the law, the Court can act. See generally Clark v. University of Melbourne [1978] V.R. 457, at pp. 469-471, R. v. London County Council; Ex parte London & Provincial Electric Theatres Limited [1915] 2 K.B. 466, at pp. 490-491 in the judgment of Pickford L.J. and Arthur Yates & Co. Pty. Ltd. v. The Vegetable Seeds Committee (1946) 72 C.L.R. 37, at pp. 82-83 in the judgment of Dixon J., as he then was. The resolution concerning the $40,000, which I have already set out, contains a statement of its own purpose. It is apparent from the text of the resolution that the sum of $40,000 was fixed on the view that sustentation fees were then owing, and was fixed ain substitution for those sustentation fees. It was so fixed, therefore, without basis 83. ~ in law, as there were no sustentation fees then owing by the Cc. & S.Q. Branch. The resolution was therefore invalid. It is appropriate to make an order that the respondents treat it as null and void. The $250,000 resolution was, for the reasons which I have already given, a valid resolution. The question therefore arises whether the existence of an unsatisfied requirement that the C. & S.Q. Branch pay its share of the $250,000 was sufficient to justify the October 1985 resolution declaring the C. & S.Q. Branch unfinancial. [In my view, it was so. The October 1985 resolution also contains its own grounds. The C. & S.Q. Branch was being declared unfinancial for failing to forward amounts due and payable under the national rules. There was in fact an amount due and payable which had not been forwarded, namely the share of the $250,000. The Cc. & S.Q. Branch was therefore properly declared unfinancial at that time. CONCLUSION. The conclusions which I have reached warrant the making of the following order in matter no. Q13 of 1985 mamely an order that the second respondents perform and observe the rules of the union: (a) by treating as null and void the resolution of the national council of the union at its November 1984 * (b) (c) 84. e meeting, concerning the sum of $40,000, in substitution for alleged arrears of sustentation fees; by treating as null and void the resolution of the same meeting of the national council, concerning the national journal, to the extent to which that resolution purports to make the national journal of the union the sole official journal of the union, to the exclusion of any journal published by the Cc. and S. Q. Branch; by refraining from making, or causing or permitting to be made on their behalf, demands upon the officers and members of the C. and S.Q. Branch for: (i) the sum of $40,000, the subject of the resolution referred to in para. (a); (ii) any sum or sums in rspect of alleged underpayments of sustentation fees in respect of the periods ended 30th June 1983, 31st December 1983, 30th June 1984, 31st December 1984, 30th June 1985 and 31st December 1985; (iii)any sum or sums of money alleged to have accrued due, pursuant to rule 5(5) of the rules of the union, on the basis that the C. and S.Q. Branch has been unfinancial, to the extent to which that sum is or those sums are based upon the sums referred to in placita (1) and (ii). The applicants having failed in their claims based on s.140, the remainder of the amended Rule to Show Cause in 85. e 7 that matter must be discharged. In matter no. Q7 of 1986, the failure of the applicants in respect of s.140, and the nature of the relief which I propose to grant in matter no. Q.13 of 1986, make any order unnecessary, other than an order discharging the amended Rule to Show Cause. Appearances Applicants: Mr. C. Hampson Q.C. with Mr. M. Amerena Instructing solicitors: Callaghan & Reidy. First respondent and certain of the second respondents: Dr. C. Jessup Instructing solicitors: Mullins & Mullins I certify that this and the preceding eighty-four (84) pages are a true copy of the Reasons for Judgment of the Honourable Justice Gray. pated: 2th December AS Associate: melowwe Lari