JUDGMENT No. 4037 88__. CATCHWORDS Conciliation and Arbitration Act 1904 - Industrial Law - direction for performance and observance of rules - whether i resolution of Federal Council of The Australian Journalists Association to alter its rule providing for the alteration aft the rules null and void - whether resolution of Faderal Council to affiliate with thea ACTU null and vo1d - whethar rules of Association permit affiliation. - whether compliance with rules of an organizatisn can ba waivad. - plebiscite - effect of plebiscite on subsequent Faderal Councils resolution to affiliata - whether subsequent rasolution of Federal Council sverridas decision reached by plebiscite. Conciliation and Arbitration Act 13904 3.1232(2A), 5.139(+), 3.140, 3.141. TJOHN LOCKWOOD LAWRENCE and BARRY PORTER and OTHERS N. No. 29 of 1387 NORTHROP, KEELY AND WILCOX JJ. 5 MAY 1988 SYDNET Fo ti a anne Nh 8 ' *. " 2. % t </ #\ ie 4 aus 928 oo 4 \ / : IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) N. No. 29 of 1987 ) ) INDUSTRIAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN JOHN LOCKWOOD LAWRENCE Appellant and BARRY PORTER and OTHERS Respondants COURT: NORTHROP, KEELY AND WILCOX Jv. DATE : 5 MAY 1988 PLACE: SYDNEY MINUTES OF ORDER é THE COURT ORDERS THAT: - aA. The appeal be allowed and the orders appealed from be set aside. B. In lieu thereof the following orders be made:- 1. The respondents and each of them, except the respondent The Australian Journalists Association (the Association), perform and observe the rules of the Association by treating the resolution made by the Federal Council of the Association on 6 November 13986 purporting to alter Rule 57-of the rules of the Association as mull and void effect. the Association, perform and observ of the Association by treating the made by the Fadceral Council of the that the Association affiliate Australian Council of Trade Unions void and of no effect. 3. Otherwise the rule nisi herein, as discharged. and ef no 2 That the respondents and each of them, except e the rules resolution Association with the as mull and amended, be IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) N. No. 29 of 1987 ) ) INDUSTRIAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN : JOHN LGCKWOOD LAWRENCE . Appellant and BARRY PORTER and OTHERS Respondents COURT: NORTHROP, KEELY AND WILCOX Jc. DA' : 5 MAY 1988 PLACE: SYDNEY . REASONS FOR JUDGMENT : NORTHROP J. nH The facts or this appeal illustrate once again th importance of the rules of organizations under the Conciliation and Arbitration Act 1904 and, in particular, the fact that the rules of an organization providing for the alteration of its rules must he observed strictly if the rule of an Ww alteration is to be valid. Unless officer Organization recognise this fundamental principle of law, there is always the possibility that the organization and its members will become embroiled in costly legal proceedings to the detriment of all. In the present appeal, the officers of The Australian Journalists Association ("the Asscciation"), an organization of employees under the Act, appear to have ignored the admonition of the Court contained in Kayne v. Banks (1973) 22 A.L.R. 255 at p.257 where the Court comprising J.B. Sweeney, Evatt and Northrop Jg. said:- "These applications are further illustrations of the fact that many officials of organizations, when applying the rules of their organization, do not Pay attention to the particular rulas conferring the power to alter the rules of the organization. Time and time aga:n, in making an alteration to rules, the relevant procedures laid dawn by the rules of an organization ara not followed, but nevertheless the purported alteration has appeared to have come into effect upon the Registrar giving his certificate under s139(+) of the Conciliation and arbitration Act 1904 as amended (the Act). The farlure to follow the relevant procedures has resulted in latent defects in the validity of the rules albaration and has led to uncertainty among and misunderstanding between members or the organization. In many cases, legal proceedings have rasulted, often many years later, to test the validity of the purported rules alteration and of actions taken in reliance upon those rules." The question giving rise to this appeal is whether the Association should affiliate with the Australian Council of Trade Unions ("the A.C.T.U."). This question had bean brought before the members of the Association on a number of occasions pursuant to a hallot or plebiscite of members. Plebiscites were conductad in each of the years 1944, 19356, ites, a ia} 1373, 1380 and 1984. at each of those plebis majority of members of the Associration who voted, voted against affiliation. For the purpose of this appeal, the effect of the plebiscite held in 1984 is of importance and will be considered in more detail later in these reasons. For present purposes, it is sufficient to say that in & November 1986 the Association was not affiliated with the A.C.T.U.. The governing hody of thea aAssociaticn 15 the Faderal Council. Ft is constituted by Rule 5, the raleavant f provisions of which ara:- "6 + FEDERAL COUNCIL AUTHORITY (a) The governing body of the Association shall be Federal Council which shall have complate authority over policy, management and all matters concerning the Association and/or 1¢5 members. It shall have authority to take any action it considers necessary or desirable on policy, management or any matter concerning the Association and/or its members and specially to - ... (2) amend, rescind or take any action concerning the Constitution, Objects and Rules of the Association; ... (4) submit any matter qr question for opinion or decision by plebiscita to all financial members or by ballot to a portion of financial members; ... (14) delegate any of its authority or business to Federal Executive, to Federal Management Committee, a Branch, Sub-Branch, Division, an officer, a- member, or any other person. A decision of Federal Council shall be final and binding throughout the Association and shall remain in force until superseded, amended or rescinded (a) at a subsequent meeting of Federal Council; or (b) by decision reached by plebiscite." The Federal Council held its normal biennial meeting in 1986 commencing on Sunday, 2 November 1986. On Thursday, 6 November 19386, the Federal Council resolved as follows:-~ "lL. THAT a new Rule 57(a) be inserted to raad as follows: 'Notwithstanding anything to the contrary in these rules, Federal Council, a Branch or sub-Branch shall be authorised to affiliate with any industrial organisation or peak body of bona fide trade unions.' 2. Amend Rule 57(c) by deleting the first sentence and by ianserting the following: 'A Branch or sub-Branch may only affiliate with a Trades and Labour Council in its territory after receiving consent from Federal Council.' 3. Renumber Rules 57(a),(b),(c),(d),(a#) and (f) accordingly." At that time, Rule 57 was headed "Affiliation and Representation." It comprised five paragraphs, (a) to (@) inclusive. It did not, in express terms, confer a power authorising the Association, its» branches, or any body to affiliate with any other body. Rule 57 will be considered in more detail later in these reasons. On 16 March 1387, the Registrar gave a certificate under sub-section 139(4) of the Act with respect to the alterations to Rule 57 made by the resolution. Prima facie, therefore, those alterations came into operation on 16 March 1987. The appellant, as applicant, commenced these proceedings in the Federal Court pursuant to s.141 of the Act seeking an order that the respondents, other than the Association, being members of the Association, perform and observe the rules of the Association by treating as null and void and of no effect the rasolution to alter Rule 57. Thosa respondents were members of the Federal Council and thus officers of the Association in November 1386. If that order had been made, the rule alterations, for all practicable purposes, would have no effect, and would be treated as not having come into effect. Thus, the new Rula 57(a) could nat have been relied upon for any purpose. The learned trial Judge rafused to maka the order sought and the appeliant has appealed from that refusal. On or about 13 April 1987, pursuant toa postal vote of its members, the Federal Council resolved, pursuant to the new Rule 57(a), that the Association affiliate with the A.C.T.U.. The appellant, as applicant, commenced these proceadings in the Faderal Court pursuant to 5.141 of (Che Act, seeking an order that the respondants, other than the Association, being members of the' Association, perform and observe the rules of the Association by treating as null and void and of no effect the resolution that the Association affiliate with the A.C.T.U.. Those respondents were members of the Federal Council in April 1987. If the new Rule 57(a) has no effect, the resolution to affiliate would have no it depended upon that Rule. The learned He held that effect insofar as trial Judge refused to make the order sought. the new Rule 57(a) was valid and was in effect. His reasons were directed to the question of the validity of the postal vote and the effact of the 1984 plebiscite. The appellant has appealed from that refusal. If the new Rula 57(a) was not valid and in operation, counsel for the respondents, other than the respondent Driberg, sought to support the validity of the resolution to affiliate by reference to the general power conferred upon Federal Council by Rule 6. I that contention is accepted, the Full Court will need to consider the effect of the 1984 plebiscite. Finally, the appellant, as agplicant, commenced these proceadings in the Fadaral Court pursuant to 5.140 of the Act seeking a declaration under sub-section 140(5D) that the whole or a part of the new Rule 57(a) contravenes sub-section 140(1). This declaration is sought if, and only if, the new Rule 57(a) is otherwise valid and in force. Tf the declaration is made, the new Rule 57(a) is deemed to he void from the date of the declaration; see sub-section 140(5G). In order to be of any assistance to the appellant, counsel would need to establish that the whole or a relevant part of the naw Rule 57(a) contravened sub-section 140(1) on 13 April 1387 being the date the resolution to affiliate was made. In those circumstances, the naw Rule 57(a) could not be relied upom to support that resolution to affiliata but the submissions based upon the general power contained in Rule 6 could be relied upon. In that event, the same issues would arise as those raised by the second order sought. The learned trial Judge refused to make the declaration sought and the appellant has appealed from that refusal. I turn to consider whether the resolution made on 6 November 1986 to alter Rule 57 was null and void and of no effect. Reference has been made already to the power of Federal Council to alter the rules of the Association; see Rule 6(a)(2). Rule 61 contains particular provisions with respect to the alteration to rules. That rule is set out:- "61 - ALTERATIONS TO RULES {a) The Constitution, Objects and Rules of the Association shall not he altered, amended, added to, or repealed, except by resolution of a meeting of Federal Council. (b) Any proposal to alter, amend, add to or rapeal the Constitution or Objects or any of the Rules of the Association shall not be considered by Faderal Council unless all members of Federal Council have been given notice of the proposal in accordance with Rule 7(k), ofr unless the provisions of Rule 3(b) have been complied with." Rule 7 of the rules of the Association contains procedural provisions to be applied with respect to meetings of Federal Council. For present purposes, it is sufficient to say that as a result of a consultative process a business paper specifying items of business to be raised at the meeting, is prepared. 'Under Rule 7(k), copies of the items of business placed on the business paper for the biennial meetings of Federal Council are to be forwarded to each Federal Council delegate at least 10 days before the meeting begins. Under the rules of the Association, of necessity, meetings of branch committees of management must be held between receipt of the items of business by the delegates elected by the branch and when the Federal Council meeting commences. The items of business prepared for the Federal Council meeting in November 1986 did not include an item with respect to the alteration to Rule 57. Thus the provisions of Rule 7(k) have not been complied with for the purpose of altering Rule 57. Rule 3 makes provision for urgant council business. The rule is:- "8 - URGENT .COCNCIL BUSINESS (a) When a delegate to Faderal Council wishes to bring forward as urgent business any: matter of a@ substantive nature not on the business paper of a Biennial Federal Council meeting, written notice shall be given to the Chairman. The Chairman shall read it aloud than ask Council to decide whether the nature of the matter is, in its opinion, sufficiently urgent to be dealt with by the meeting. (Bb) Unless delegates represanting at least 60 per cent of total delegates vote in favour of the matter being accepted for consideration later, its merits shall not again be brought before the meeting. When Council accepts any matter as urgent business it shall then determine its place cn the business paper." ! Rule 61(b) does not refer to Rule 3(a), but Rule 3(b), from its own terms, is depéndent upon action having been taken under Rule 8(a). There can be no doubt that an alteration of the Rules of the Association is a "matter of a substantive nature." That matter was not on the business paper of the biennial Federal Council meeting held in November 1386. No delegate to Faderal Council gave notice under Rule 8(a) with respect to the alteration to Rule 57. Thus there was nothing for Rule 8(b) to operate upon. Therefore there could be no compliance with the provisions of Rule 8(5) for the purposes of Rule 61. The Federal Court, consistently, has held that the rules of an organization making provision for the alteration of the rules of the organization are mandatory in the sense that they must be complied with strictly. Some of the cases where this principle has been stated and appliad are Roots v. Muston (1978) 32 F.L.R. 15, Merr:s v. Faderated Liquor and Allied Industries Employees' Union of Australia (1978) 35 4a F.L.R. 60, Kayne v. Banks, above, Boland v. Munro (1980) F.L.R. 665, Australian Transport Officers' Faderation 7. State FLO.R. 438 and Wright v. Public Services Federation (13981) S50 McLeod (1980) 74 F.L.R. 146. Ie is too late for this Principle to he challenged in thzs Court. The dichotomy between mandatory and diractory rules has been accepted. The dichotomy is used in the Act; see sub-section 132(2A). A rule which is mandatory requires strict compliance. A rule which 15 directory is complied with where there has heen substantial compliance with that pule. In the present case, the orovisions of Rule 61 are mandatory. In the absence of that rule, the provisions of Rule 7(b) and Rule 8(a) would have operated with respect toa rule alteration and, inall probability, would have been treated as being mandatory insofar as they applied with respect to alterations to rules. The existence of Rule 61 can only be explained if it is treated as being mandatory. Counsel for the respondents, other than the respondent Driberg, contended that there had been compliance - 10 - with Rule 3(b). They relied upon the following facts. In accordance with the business paper for the Faderal Council meeting which commenced on 2 November 1386, items of urgent business under Rule 8(a) were called for on 2 November. One such item was given as follows:- "Affiliation THAT Federal Executive be authorised to arrange a mational plebiscite on AJA affiliation toa the ACTU during 1397." It is interesting to note that another item was given as follows:- "Rule 56 Amendments From Rule 56(i)(3) delete the words 'and give each name a separate number;' From Rule 56(1i)(4) delete thea words 'Number the pre-paid reply envelopes to coincide with the numbers on the roll of financial members.' * Delete Rule 56(i)(3)." Each of the items of urgent business, including the affiliation item, was accepted for consideration pursuant to the requirements of Rule 8(b). The item of urgent business "Affiliation" came before Federal Council on Tuesday, 4 November. The following resolution, in its amended form, was moved and seconded:- "THAT Federal Executive be authorised to conduct a national plebiscite on AJA affiliation to the ACTU between now and the 1988 Federal Council and that -1ll- this Federal Counc:l supports the principle and acknowledges the benefits of AJA state branches affiliating to their respective Trade Hall Councils. Further, that the AJA make a donation of $2,000 in 1986 and 1987 to the ACTU in recognition of their assistance on superannuation, wages, occupational health and other matters. THAT Federal Executive be aunstructed to plan a comprehensive national information campaign among the membership, a5 a4 pr@requisite to such a plebiscite." Pursuant to a procedural motion, consideration of the motion was adjourned "pending a ra@port from a sub-committee comprising Messrs Swancott, Warren and Donohoe." The item of urgent business "Affiliation" next came before the Federal Council on Thursday, 6 November. On that occasion, two resolutions were carried. The first related to the rule alterations to Rule 57 and is set out earlier in The second authorised Federal Executive to A . ad - < and arrange, iz determined, a plebiscite on these reasons. consider affiliation to the A.C.T.U. before the 1383 Federal Council. The resolution contained a number of consaquential provisions. It is noted that no plebiscite has hean conducted pursuant to that resolution. There is no evidence before the Court as to the deliberations of the committee to which the urgent matter "Affiliation" was referred. There is no evidence before the Court as to why the members of Federal Council considered an alteration to Rule 57 came within the item of urgent business "Affiliation." On its face, the rule alteration was a different subject matter to and was a completely different and separate subject Matter from the urgent business "Affiliation." The learned trial Judge so held. In my Opinion, he was quite correct in 50 holding. On no view can that a rula change is the same subject matter as it be said an item relating to arfiliation. Despite this conclusion, counsel for the respondents, other than the respondent Drihberg, contended that the requirements of Rul2a 3(b) had been complied with because the members of the Federal Council had waived the need to comply with the requirements of Rule 93(b) and for that matter, Rule 61. Put another way, it was contended that because the requirements of the rules had heen waived, thera had been compliance with those rules. In support of this contention counsel relied upon authorities where courts had applied the doctrine with respatt to decisions made by directors of proprietary companies and, by analogy, by reference to proceedings in Parliament. They relied upon authorities such as Phosphate of Lime Co. v. Graen (1871) 7 L.R.C.P. 43, Ho Tung v. Man On Insurance Co. £1902] A.C. 232, In Re Express Engineering Works, Ltd. (1920) 1 Ch. 466, Oxted Motor Co. Ltd. (1921) 3 K.B. 32, Parker and Cooper Ltd. vw. Reading (1926) Ch. 975, War Assets Pty. Ltd. v. Federal Commissioner of Taxation (1354) 91C.L.R. 53, Re Duomatic Ltd. £19691 2 Ch. 365 and In re Bailey, Hay & Co. Ltd. £19713 1 W.L.R. 1357. In addition, counsel relied upon references in Horsley's Meetings, Procedure, Law and Practice 19983, 2nd -13- Ed. at 9.16; Shaw & Smith, The Law oF Meetings, Their Conduct and Procedure, Sth Ed. at o95.16-17; May's Treatise on The Law, Privileges, Proceedings and Usage of Parliament 1983, 20th Ed. at 9p.376-7, and Odgers, Australian Senate Practice 1976, Sth Ed. at pp.268-9, with respect to both amendments and waiver. The doctrine of waiver 1s dascribed in Halsbury's Laws of England, 4th Ed., Vol.ls paras.1471 and 1472 and 4th Ed. Vol.45 para.1269. For present purposes, the doctrine of waiver corresponding to the first of these references -is stated more aptly in the 3rd Ed. Vol.14 para.1175 and part of that paragraph is set out:- ""Walver is the abandonment of a right, and is either express or implied from conduct. A persan who is entitled to the benefit of a stipulaticen in a contract or of a statutory provision may waive it, and allow the contract or transaction to proceed as though the stipulation or provision did mot exist. Waiver of this kind depends upon consent, and the fact that the other party has acted upon it is sufficient consideration. Where the waiver is mot express, 1¢ may be implied from conduct which is inconsistent with the continuance of the right. It seems that, in general, where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations hetween them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the party who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relationship as if mo such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration." Paragraph 1269 in Vol.45 is as follows:- - 14 - "Waiver 15 the abandonment of a right, and thus is a defence against Lts subsequent enforcement. Waiver may be express or, where there is knowledge of the right, may be implied from conduct which 15 unconsistent with the continuance of the right. A mere statement of an intention not to insist on a right does not suffica in the absence of consideration; but a deliberate election mot to insist on full rights, although made without first obtaining full disclosure of material facts, and to come to a settlement on that basis, will be binding." The authoritias relied upon by counsel do not apoly rules with respect to the question of whether compliance with of an organization may be waived. Those authoritias arose with respect to actions taken by directors of csompani2s where the corporators coincided with the directors and had or should have had knowledge of what had been done but had taken ! no action to prevent that action being taken. Within organizations under the Act, every member has a right that each other member will observe the rules of the organization. Section 141 of the Act confers a right on a member to bring proceedings to compel other members to perform and observe the rules of the organization; cf. sub-section 141(1G). Each organization consists of a large number of members. There are some 12,000 members of the Association. Each has a right, which can be enforced by Court order, that each other member will perform and observe the rules of the Association. This extends to the rules of the Association providing for pracedures to be followed at meetings of Federal Council. One can understand an argument that the rules, insofar as they are directory, have been complied with substantially. - 15 - If the rules are mandatory, they must be complied with strictly. In this context, there is no room for the doctrine of waiver where the rights of all members can be nullified by the actions of a faw. Tt is clear that members of a committee of an organization cannot by their actions deprive all other members of the organization of rights confarrad upon them by the rules of the organization. In this context, the doctrine of waiver 15 completely alien to the provisions of the Act with respect to the rules of organizations and alterations to those rules. This principle has been acceptad and acted upon for many years; see for example, Krantz v. Maynes (1967) 10 F.L.R. 134 per Dunphy, Smithers and Karr JJ. at p.142:- "In detarmining whether or not provisions are mandatory or directory the nature of the subject matter dealt with is of critical importance. The amendment of rules is a matter of graat significance to every member and avery branch. The rights and obligations of members and branches, as between each other and as bebween them and the rest of the organization, are datarmined by the rules. These rights and obligations are stabilized and Protected by those provisions of the rules which prescribe the conditions upon which they may be altered. Compelling reasons would be necessary toa justify the non-observance of such conditions. No such reason is shown in this case. The prascribed procedure is not something to be waived by a majority of councillors or even by all councillors acting together. The procedure is not only for the benefit of councillors. Members and branches as such have a distinct interest in compliance with it. " The contentions made on behalf of the respondents, other than the respondent Driberg, are rajected. - In the result, an order should be made under sub-section 141(1G) of the Act that the respondents, other than the Association, verform and observe the rules of the Association by treating as mull and void the rasolution of Federal Council to alter Rule 57 of the rules of the Association. The order is mot made against the Association because under sub-section 141(1G) of the Act, orders may he made against persons who are under an obligation to perform or Gbhserve the rules of the organization. The Association 15 mot such a person; the other respondents are. The order to be made is binding on thosé respondents only. They are members of the Federal Council. For practical purposes, the effect of the order will be that for all purgoses, the alteration to Rule 57 made in November 1986 will be treated as void and of no effect. I turn now to consider whether the resolution of the Federal Council of 13 April #1987 that tne Association affiliate with the A.C.T.U. was mull and void and of no effact. Insofar as the affiliation resolution was based on the new Rule 57(a), it must be null and void and of no effect since that rule itsalf is null and vo1d and of no effect. Counsel for the respondents, other than the respondent Driberg, contended that the affiliation resolution could he supported by the general power conferred on Federal Council by Rule 6. In order to consider this contention, it is necessary to consider the structure of the Association and a mumber of its rules. -17- The policy behind, and structure of, the Association are illustrated very clearly by Rule 5S. That rule is set out:- "5 - CONTROL AND MANAGEMENT Supreme control of the Association shall rest with financial members voting by plebiscite. The governing body shall be Federal Council, with complete authority over policy, management, and all affairs of the Association. The general administration of the Association shall be vested in Federal Executive, and through it, Federal Management Committee, which shall run 'the day to day affairs of the Association. The membership of the Association shall be divided into Branches and/or Divisions to cre of which each member srall belong. aA Branch Shall have authority to act for its members within the scope of these Rules and in accordance with decisions of Federal Council and/or Federal Executive. Financial members voting by ballot shall be the highest authority of a Branch. The management of a Branch shall be vested in a Branch Committee, Branch members residing in defined areas of a Branch may be divided into Sub-Sranches and vested with authority to act in accordance with these Rules and under control of the Branch. A group of SBranch members may be formed into a Section with authority to advise and assist the Branch Committee. A group of members employed within an office»*may elect a house committee in consultation with the Branch Committee." A reference to Rule 5 illustrates the importance of Plebiscites within the Association. This is illustrated further by the provisions of Rule 6(a)(14), set out earliar in these ra@asons, making a decision of Federal Council binding until "superseded, amended or rescinded" by Federal Council or "by decision reached by plebiscite." The rules contain detailed provisions by which a decision of Federal Council may be tested by plebiscite. This is not the case here, but reference will be made later to those provisions. - 18 - Further, similar rules apply with respect to decisions taken at branch meetings and branch committee meetings. Those rules need not he referred to further. The rules of the Association implament in detail the policy and structures described in Rule 5. It 215 not mecessary Co refer in detail to all those rulss. It is sufficient to say that the rules are of a similar mature with raspect to the Association and its committees and the branches, their subsidiary bodies and their committees. For present purposes, it is necessary to refer to three rules, mamely Rula S56 - Plebiscites, Rule 57 - Affiliation and Reprasentation, and sub-rules 7(m), (mn) and (0) - Special Council Meeting. The rules of the Association do not confer in express terms a power on the Association or the Federal Council to affiliate the Associa#ion cto any other body or association. Within its area, a branch and its branch committee have similar powers to that of the Federal Council. No power in express terms is conferred upon a branch to affiliate with any other body or association. For present purposes, the provisions of Rule 57 must be conmsiderad as they stood in November 1986. The alterations to Rule 57 made by Federal Council in November 1986 have no effect. It is not necessary to set out that Rule 57. It is sufficient to say that it does not confer in express terms a power upon the Association or Federal Council to affiliate. It may be argued that Rule 57(d) confers hy implication a power on a -~ 19 - branch or sub-branch to affiliate, but the better vuiaw appears to be that that sub-rule assumes the axistence of the power of a branch or sub-branch to affiliate which power is to be found elsewhere in the rules. It imposes a condition precedent to be complied with before the power can he Ie is correct ta say that Rula 57 is framed an exercised. c the basis that the power to affiliate, whether the power he that of the Association, Federal Council or Branch, 15 contained 2@lsewhera. Rule 57 imposes restrictions on the exercise of the power. In thease circumstances, if was contended by counsel respondents, other than the respondent Driberg, that Federal Council had the power to determine that the Association affiliate with the A.C.T.U.. They relied on opening words of Rule 6(a) the relevant parts being:- "The governing body of theAssociation shall he Federal Council which shall have complete authority over policy, management and all matters concerning the Association and/or its members. It shall have authority to take any action it considers necessary or desirable on ... any matter concerning the Association and/or its members ... . In my opinion, this contention is correct. One of the objects of the Association, as set out in Rule 3, is to:- "safeguard and advance the remuneration and conditions of employment and industrial rights and welfare of members." There is no evidence before the Court as to the objects of the A.C.T.U. but judicial notice could. be taken of the fact that it is an association which ameng others has the object of safeguarding and advancing the ramuneraticn and conditions of amployment and industrial rights and welfare of employees. Thereafora, Ff the Federal Council considerad that 1z ted by affiliation with the a.C.T.U., the absenc2 of an express power to affiliate would not pravent it fFrsom so diracting. The general power contained in Rule 6(a) 15 ample authority £o support a rasolution by Federal Council that the o the a Association affiliate with the A.C.T.U.. A referance judgment of Fullagar J. in Williams v. Hursev C1953] 103 C.L.R. 30 commencing at p.45 supports that proposition. In particular, refarence is made to the passage at po.86-58. fs 5 Ps On the assumption that the postal ballot of members of Federat Council in April ,@337 that the Associat uo a vy affiliate with the A.C.T.U. was otherwise valid under sub-rules 7im), (nm) and-(o0), it is necessary to consider what ffect the plebiscite of 1384 has on that resolution. iN) Rule 56 makes provision for plebiscites of all members of the Association. By way of comment, Rula 34 contains comparable provisions with respect to members of a branch. Rule 56 is long and need not be set out. In 1984, Rule 56 was in similar form to that contained in the Rules certified by the Deputy Industrial Registrar as being in - 21 - force on 22 April 1587. A plebiscite may be conducted pursuant to resolution of Federal Council in session or by a decision under Rule 17 although it is difficult to sae how Rule 17 has any application. In addition, a plebiscite will be conducted at the request of at least two branches "in accordance with Clauses (8), (f£), (g) and .(h)" of Rule 56. Rul2 56(5) contains specific pravisions with raspeck to a plabiscita toa raview a decision of Faderal Council. In that case the question 15 put to members in the form "Are you in favour at the following decision of " (Paderal Council or Faderal Executive as the case may be) "mad2@ on the day of 19 "3 then follows the resolution of Faderal Council or Federal Executive on which the plebiscite is being taken." A plabiscite under Rule S56if) must be requested within a limited time after the decision was made. Rul2 56(£) must be read in conjunctiom with Rule 6(a)(14). The 1984 plebiscite was not taken under Rule 56(f). Nice questions would arise if a decision by Faderal Council was acted upon before the plebiscite unmder Rule S6(f) was completed. There is no provision for a stay of operation of a decision pending such a plebiscite. This question does not arise in this case. There are no such limitations with respect to Plebiscites taken by resolution of Federal Council or at the cases, request of two branches under Rule 56(g). In those the plebiscite can be on any question or proposal. Rule - 22 - _ 56{n) provides:- "A plebiscite shall be decided by a majority valid votes cast in the plebiscite and t decisions shali be final and binding on all membea of the Association." The 1984 plebiscite was conducted pursuant to a resolution of Federal Council -'taken at its meeting in 1983. As appears from the judgment of the trial Judge, the question put to the plebiscite held in 1984 was "Are you in favour of the AJA affiliating with the ACTU?". In accordance with Rule 56(c), the casa for and the case against the question was published in "The Journalist", the journal of the Association. Of the valid votes cast, 1790 were in favour of the question and 2772 were against the question. Under Rule S6(n), that decrsion ius binding on all members of the Association. If a majority of valid votes cast had been in favour of amalgamation, in all prjbability a rasoiution of Federal Council that the Association affiliata with the A.C.T.U. would have been yequired to give effect to the policy expressed by the plebiscite. The issue raised for consideration is what is the effect of the 1984 plebiscite. Under Rule 5, supreme control of the Association shall rest with financial members voting by plebiscite. That supreme control, as regards affiliation with the A.C.T.U., was expressed by the result of the 1984 Plebiscite. For what period does that expression af control comtinue in operation? Counsel for the respondents, other ult of the wm than the respondent Driberg, contended that the ra Slebiscite had no continuing operation at all. The decision became of historical intarast only. Counsel were forcad to concede that in theory, Federal Council could, on the vary day following the declaration of the rasult aft the Those contentions ara rajzectad. Acceptance 3F & would make a mockery of tha rules of the the solicy behind the structures of the Association a3 expressed so clearly in Rule 5. An axpressicn of opinion oma general question of the type of the 1384 mathod Sy wnichs cha Association adoots a fu plebiscita is y is adopted by the members axarcising policy. That policy suprame control of the Association. That policy bacomes binding om all members of tha Association. It remains binding on all members of the Asscciation until varied by an authority of equal standing, namely another plebiscite af all members of the Association. Unless this of supreme control of the Association in financial members voting by plebiscite becomes illusory. It appears that for many years, the Faderal Council has accepted that construction of the rules. The axistence of plabiscites on - 24 - the same question in the years 1344, 1956, 1373, 1380 and 1984 supports that contention. The acceotance of that construction by the Association does mot mean that the construction is correct but it does suggast that there should be some compelling reason to show it is wrong. I see no ceason, compelling or otherwise, to suggest that chat construction is act correct. It follows therefore that the resolution by Faderal Council! to affiliate with the A.Cc.T.U. was contrary tc the policy of the Association expressed by plebiscite of members of the Association. Accordingly, that resolution shouled Se treated as being null and void and of no effect. It doas not need to be rescinded by another plebiscite brought under Rule 56(5). In these circumstances, it is not necessary to decide whether the affiliation resolution was made validly in conformity with sub-rulas 7(m), (nm) and (0). Sub-rules 7(m) and (n) suggest that thera must be an actual meeting of members when a special meeting of Federal Council is to be held under those sub-rules. Sub-rule 7(0) seems to be inconsistent with that requirement. Te seems almost between impossible to reconcile the apparent inconsistancias the three sub-rulés. Federal Council should mote this problem and take steps to rectify it. In the result, an order should be made under sub-section 141(1G) of the Act that the respondents, other than the Association, perform and observe the rules of the Association by treating as null and vo:d and of nc affact the moof tha Faderal Council made on 13 April 1387 that us be a i f. n the Association affiliate with the A.C.T.U.. am ni % reg r : fu ram T ¥ aw ye t+ cr wu Lay fT) cr ray ua ar vu The Court 15 going to or Rul2 57 mada by the Faderai Council a November 13986 be traated as null and void and of no affect. In those circumstances, there 15 no new Ruls 57(a) which can be mada the subject of an order under 5.140 af thea Ac Accordingly, the final order sought by the assellant should be rafused. aA. The aopeal be allowed and che orders appealed From be set asides. 8. In Lieu thereof the following orders bea mada: - 1. The réspoendents andi gach sf then, except the respondent Tha Australian Journalists Association ithe Association), perltorm and observe the rulas of the Association is b treating the resolution made 5 Federal Council of the Associat on 5 November 1986 osurporting a q ta or roo yo fa) u alter Rule 57 of the rules of thea Association as null and void and of no effect. ze That the respcndents and each of them, @xucept the Assoclation, perform and observe the rules of the Association by treating the cesolution made by the Faderal Council of the Association that the Association affiliate with the Australian Council of Trade Unions as null and void and of no 2ffact. - 26 - 3. Otherwise the rule nisi herein, as amended, be discharged. I certify chat this and the twenty 'fve (28) preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justices RM Northrop Crore P LJU2c. Associate Dated: 5 May 1988 we pe CF TCE TERETE CDESC San OI Oe 8 8} IN THE FEDERAL COURT OF AUSTRALIA .NEW SOUTH WALES DISTRICT REGISTRY NSW No. I 29 of 1987 INDUSTRIAL DIVISION ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: JOHN LOCKWOOD LAWRENCE Appellant AND: BARRY PORTER & ORS First to Twelfth Respondents NEAL SWANCOTT & ORS Thirteenth to Fifty-Second Respondents THE AUSTRALIAN JOURNALISTS ASSOCIATION Pifty-Third Respondent a + CORAM: NORTHROP, KEELY AND WILCOX JJ. DATE: 5 MAY, 1988 PLACE: SYDNEY REASONS FOR JUDGMENT KEELY J. In this appeal, the relevant facts and circumstances, including certain rules of the Australian Journalists Association (the Association) and resolutions of its Federal Council, are fully set out in the reasons for judgment of Northrop J. and need not be repeated. I agree, with respect, with the opinion expressed by the learned trial judge that the Federal Council's resolution, purporting to amend the rules of the Association by auntroducing a new rule 57(a), dealt with "a different 'matter of a substantive . nature' from a resolution authorising the Federal Executive to arrange a national plebiscite" on the question of whether the Association should affiliate with the Australian Council of Trade Unions (the ACTU). I agree with his Honour's reasons for so deciding, namely, that there were significant differences in character between the resolution made on 6 November 1986 and the matter which had been accepted by the Federal Council as "sufficiently urgent to be dealt with by the meeting" (rule 8(a)); those differences were that the resolution of 6 November 1986 (1) purported to amend the rules, (2) was not confined to affiliation with the XCTU and (3) did not require a plebiscite. However, I prefer to express no opinion on the question whether those two resolutions had a "common objective". It follows that those contentions of the respondents to the appeal other than the fortieth respondent (which respondents will, in these reasons, be called the respondents), which appear in paragraphs 1 and 2 of their notice of contention cannot be upheld. In my opinion each respondent, except the Association, should be directed to treat as null and void and of no effect the resolution made on 6 November 1986. Nor am I able to uphold the third contention in the respondents' notice of contention, namely that rule 61 was not mandatory or, alternatively, was not mandatory as toa compliance with rule 8(b) and that the rule had been substantially complied with. In Morris v Federated Liquor and Allied Industries Employees' Union of Australia (1978) 35 FLR 60 at 64, Smithers, J.B. Sweeney and Evatt JJ., referring to the reasons for judgment in Roots v Mutton (1978) 32 FLR 15, said:- "Those reasons reflect the view that amendment of the rules of an organization is a matter going so fundamentally to the relationship between members and between branches that in the absence of clear provision to the contrary, there must be strict compliance with specified amendment procedures." In my opinion that principle is applicable to the rules in the present case, which contain no "clear provision to the contrary". The respondents sought to gain support from the terms of s. 132(2A) of the Conciliation and Arbitration Act 1904 (the Act) which provided that a "rule of an association or organization dealing with matters so prescribed or dealing 'with matters required by this Act to be complied with as conditions for registration may be mandatory or directory". That sub-section was inserted into the Act in 1974 i.e. before the delivery of the reasons for judgment in Roots v Mutton and in Morris' case. Although, as was pointed out by the respondents, the reasons for judgment in those cases did not make any reference to that. sub-section, in my opinion the absence of such a reference does not assist them; in any event, Morris' case (at 64) does refer to "the absence of clear proviston to the contrary". In my opinion the members of the Federal Council had no power to waive compliance with the rules of the Association relating to the manner of altering the rules of the Association - and would not have had that power even if all of its members had been present and if they had carried a resolution in favour of such a course. The inapplicability of the doctrine of waiver was made clear in Krantz v Maynes and others (1967) 10 FLR 134 at 142, where Dunphy, Smithers and Kerr JJ., referring to the procedure for the amendment of rules, said: "The prescribed procedure 18 not something to be waived by a majority of councillors or even by all councillors acting together. The procedure is not only for the benefit ef councillors. Members and branches as such have a distinct interest in compliance with it." The fourth contention in the respondents' notice of 'contention sought to rely upon the Federal Council's "pre-existing power to determine affiliation". I refrain from expressing any opinion as to (a) whether the court may take judicial notice of the objects of the ACTU and (b) whether, as contended by those respondents, the federal Council had power, apart from the purported rule 57(a), to decide that the Association affiliate with the ACTU. However, assuming, without deciding, that both of those questions should be answered in favour of the respondents, in my opinion the Federal Council had no power under the Association's rules to resolve upon a course of action contrary to the policy of the Association; that policy had been decided by the Association's members, voting in plebiscite, and that decision was "final and binding on all members of the Association" (rule 56{n)). On that issue I agree generally with the reasons for judgment of Northrop J. I also agree that it is desfrable, in the interests of the Association, that steps be taken to clarify the meaning of sub-rules 7(m), (n) and {o). Although the meaning of the words "urgent matter connected with the rules", appearing in rule 7(m), is not clear, I am unable to agree, with respect, with the opinion of the learned trial judge that the "taking of a step pursuant to r. 57(a) was necessarily connected with the rules"; the words "matter connected with the rules" are ' wide but, in my opinion, they do not include every matter calling for a decision by the Federal Council under the "rules. If the purported rule 57(a) is to be treated as null and void and of no effect, it follows that paragraph 4 of the amended rule to show cause, which was sought as an alternative order, should be discharged. In my opinion the appeal should be allowed, the orders appealed from should be set aside and orders should be made giving directions that each of the respondents, other than the Association, perform and observe the rules of the Association by treating as null and void and of no effect the resolutions made by the Federal Council of the Association (1) on 6 November 1986 purporting to alter rule 57 of the rules of the Association and (2) in April 1987 deciding that the Association affiliate with the ACTU. The rule to show cause, as amended on 10 August 1987, should otherwise he discharged. . I certify that this and the five preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mc. Justice Keely delivered on 5 May, 1988. Associate: id Ginn anh ' IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NSW I.29 of 1987 ) ) INDUSTRIAL DIVISION ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: JOHN LOCKWOOD LAWRENCE Appellant AND: BARRY PORTER & ORS Pirst to Twelfth Respondents NEAL SWANCOTT & ORS Thirteenth to Fifty~Second Respondents THE AUSTRALIAN JOURNALISTS ASSOCIATION Pifty-Third Respondent CORAM: NORTHROP, KEELY and WILCOX JJ PLACE: SYDNEY DATE: 5 MAY 1988 REASONS FOR JUDGMENT WILCOX J: I have had the advantage of reading, in draft form, the reasons for judgment of Northrop J. I agree with these reasons. But the matter is important to the Australian Journalists Association ("the AJA"), and perhaps generally, and we are differing 1n some respects from the learned trial judge. I will therefore add some additional observations, avoiding any unnecessary repetition of the facts. As Northrop J says, the issue underlying this proceeding 1s whether the AJA should affiliate with the Australian Council of Trade Unions ("the ACTU"). It appears that, over a period of many years, this has been a contentious question amongst AJA members. Upon each occasion upon which a plebiscite of members has been taken on the matter, the Majority opinion has been against affiliation. Whether that would be the position today we do not know. [It is not a question with which the Court is concerned. Nor, of course, is the Court in any way concerned with the merit of the arguments for and against affiliation. That 1s a matter to be resolved by the AJA by a decision taken in accordance with its rules. The only function of the Court is to ensure, where complaint is made, that any decision to affiliate is in fact so taken. : The first matter which arises is the validity of the resolution passed by the Federal Council of the Association on 6 November 1986 whereby it purported to amend r.57 of the rules of the organization. It seems to me that this resolution is invalid. Northrop J has set out the relevant rules. Rule 6 confers upon Federal Council wide powers, including the power to "amend, rescind or take any action concerning the Constitution, Objects and Rules of the Association". Subject to any limitations imposed in the particular case by the result of a relevant plebiscite, Federal Council therefore has the power to amend the rules in such manner as it sees fit. But, in exercising that power, Federal Council is bound to observe the procedures prescribed by the rules, as they then stand. In November 1986, as at the present time, the AJA rules contained r.61. That rule commences by prohibiting any alteration of the rules otherwise than in accordance with a resolution of a meeting of Federal Council. [It proceeds to stipulate requirements for the consideration of any proposal to alter the rules. Federal Council is not permitted even to consider such a proposal unless all members of Federal Council have been given notice of the proposal pursuant to r.7(k) -- that 1s, the matter appears on the business paper distributed at least 10 days before the commencement of the relevant meeting ~- or unless written notice of the matter is given and read aloud to the meeting and delegates constituting at least 60% of all of the delegates then ."vote in favour of the matter being accepted for consideration later": fc.8. In the present case no prior notice of a proposal to amend r.57 was given to delegates pursuant to r.7(k). At the commencement of the Federal Council meeting on Sunday 2 November 1986 written notice was given of the following resolution; which was numbered UB-(8): "That Federal Executive be authorised to arrange a national plebiscite on AJA affiliation to the ACTU during 1987." This resolution was read aloud and urgency was granted, by the necessary 60% of delegates. The matter was left for consideration later in the week. On Tuesday 4 November the matter came up for discussion. An amended resolution, proposing a plebiscite of members and making no reference to the amendment of the rules, was moved. But further consideration was adjourned pending a report froma sub-committee comprising three specified members of the Council. On Thursday 6 November two resolutions were dealt with -- apparently both arising out of an oral report of the sub-committee -~ under the heading "Affiliation". Each bore the identification number UB-(8). One resolution was along the lines of that granted urgency on the Sunday, although also containing some additional matters. It authorized Federal Executive to arrange a plebiscite on affiliation with the AcTU before the 1988 meeting of Federal Council. The other resolution ~- which was in fact considered first -- purported to amend r.57. 4 The trial judge held that this latter resolution dealt with a different "matter of a substantial nature" from the proposed resolution granted urgency on the Sunday. He pointed out that the resolution amending r.57 made no reference to a plebiscite; neither was it confined to affiliation with the ACTU. It purported to confer upon Federal Council, Branches and Sub-Branches authority "to affiliate with any industrial organisation or peak body of bona fide unions". Federal Council recognized that this category of organization extended beyond the ACTU. The resolution simultaneously amended r.57(c) so as to require that a Branch or Sub-Branch might affiliate with a Trades and Labour Council only after obtaining the consent of Federal Council. The trial judge commented upon the effect of the differences between the content of the two resolutions: "It follows that, notwithstanding their common objective, viz., affiliation with the ACTU, there were significant differences in character between what was authorised to be brought forward as urgent business on the one hand and the resolution which purported to amend r.57 on the other. Although it was not necessary that Mr. Harriden's motion follow the exact term of what was earlier proposed (see, e.g. In Re Trench Tubeless Tyre Co.; Bethell v. Trench Tubeless Tyre Co. [1900] 1 Ch. 408; TYorbock v. Lord westbury [1902] 2 Ch. 871), the differences between the two resolutions proposed were so significant that it is not possible to say that the later resolution 'fairly arises' out of the earlier one (see Boland v. pune supra, at p. a Halsbury's Tavs Laws of England, 4th ed. Vol. pp. 333- para. ). To put 1t Gtother way, Mr. Harriden's motion 'exceeded the scope' of the earlier resolution (see Pettifer, op. cit., at p.405; James v. Amott (1918) 14 Tas.L.R. 99; Wallace and Young, Australian Company Law and Practice at pp.438,440) .™ I agree with this analysis of the position. The resolution to amend r.57 was not within the scope of the business granted urgency at the commencement of the meeting. There being no compliance, in relation to that resolution, with either r.7(k) or r.8, the procedural requirements of r.61 were not satisfied. Federal Council was not entitled to consider this resolution on 6 November. The purported resolution 1s, in law, a nullity. Despite his view about the proper characterization of the resolution, the trial judge held the resolution to be valid. He did so because, in his Honour's opinion, the members present had waived compliance with r.61. With respect, it appears to me that there are difficulties about that approach. In the first place the evidence shows that not all of the councillors were present when Federal Council came to this business on 6 November. There being no evidence to suggest that the absent councillors knew anything about the proposal to amend r.57, it is difficult to see how they may be taken to have waived compliance with r.61 in relation to that proposal. As regards the members who were present, the trial judge observed that the minutes of 6 November show the motion to amend r.57 "as 'UB8' (ie urgent business) and 1t 1s proper to infer unanimous consent from the acquiesence in that course, that is, its acceptance as urgent business on the part of all members present". I do not think that this inference should be drawn. The fact that the minutes identified the motion as falling under "yB-(8)",* the number given to the resolution foreshadowed on the Sunday, seems to me to indicate that the members erroneously regarded 1t as being covered by the urgency then granted. In other words, if they thought about it at all, they adopted the primary position unsuccessfully contended for by the respondents, both at the trial and in this Court. It seems to me probable that, if the members present had appreciated that the resolution to amend r.57 was not covered by the urgency resolution passed on Sunday but had nevertheless wished it to proceed to consideration, they would have expressly granted urgency. There was no procedural barrier to such a resolution, even at that late stage of the meeting. However, more fundamentally, I do not think that the doctrine of waiver has any application to procedural requirements laid down in the rules of a registered industrial organization. I need not repeat what is said by Northrop J. It is sufficient to note, as Northrop J points out, that waiver 1s the abandonment of a right vested in the person who waives. But r.61 did not give any right to members of Federal Council. It laid down, for the benefit of all members of the organization, procedural constraints upon the exercise by Federal Council of its power to amend the rules. All members of the organization -- not only the members of Federal Council -- were entitled to insist upon the observance of those constraints. The trial judge found assistance in two analogies: Parliamentary practice and the conduct of companies. I myself obtain no such assistance. Leaving aside any Constitutional question, there is no limitation upon the powers of Parliament in the transaction of its business. The procedural rules adopted by a House of Parliament are imposed by itself for the more efficient regulation of its business. It is understandable that a procedural constraint imposed by the House itself may be relaxed by the House; and, given the House's total control over the situation, that this relaxation may occur in an informal way, as by a motion being moved with the sanction of the Chair and without objection by any member. However, in the present case, the relevant procedural constraint was not imposed by Federal Council itself. It was imposed externally, by the rules of the organization. Federal Council was entitled to change those rules, provided that, in so doing, it complied with their existing requirements. But it was not entitled to relax or to ignore them. The argument by analogy which attracted the trial judge would seem to lead to the curious result that, provided that no councillor actually objected, a Federal Council meeting attended by less than 60% of all delegates could proceed to change the rules without notice having been given to delegates pursuant to r.7(k); a result that could not be achieved by an express motion of urgency under r.8. Although the circumstances are different, the analogy of company regulation seems to me to he equally unhelpful. It is true that all of the shareholders in a company may waive compliance with limitations imposed upon the company, or an organ of the company such as the board of directors, by the articles of association. As the matter was put by Dixon CJ and Williams and Kitto JJ in War Assets Pty Ltd v Federal Commissioner of Taxation (1954) 91 CLR 53 at p.88, a case referred to by the trial judge: "A company can be bound by acts intra vires its memorandum of association by the unanimous consent of its corporators, and such consent can be express or can be inferred from acquiescence." When shareholders waive strict compliance with some legal requirement, they do so as persons having a proprietary interest in the company, and a legal right to insist upon compliance with that requirement. Having that right, they are entitled to abandon it in the particular case. But, as was pointed out in War Assets, waiver will only be effective 1f all the people so entitled abandon their right to secure compliance. It seems to me that, if the company analogy had any application to the present case, it would be necessary to show that all members of the organization had' waived their right to insist upon compliance with r.61. The second question requiring consideration is the validity of the decision taken by Federal Council on 13 April 1987, by postal ballot, that the Association affiliate with the ACTU. This question remains live, notwithstanding that the resolution to amend r.57 was invalid, because of my view that Federal Council had the power to affiliate with the ACTU -- subject to any relevant plebistite -- all the time. The purported amendments to r.57 being unnecessary, their invalidity does not conclude the matter. In my opinion the decision of Federal Council to affiliate is invalid for two reasons: ome procedural, the other substantive. The procedural problem arises out of a limitation contained in r.7(m) of the rules. That paragraph authorizes the holding of a "special meeting of Federal Council" "to deal with an urgent matter connected with the Rules" providing that at least 75% of Federal Council ". 10. delegates consider the matter sufficiently urgent to justify a special meeting. Paragraph (n) sets out the notice requirements for such a meeting and para.(o) provides for the making of "decisions of a Special Meeting of Federal Council" by postal or telegraphic vote. The argument for the respondents is that the decision taken on 13 April was a decision of a special meeting of Federal Council taken by postal vote. The drafting mechanism adopted in r.7(0) of engrafting the provision for postal and telegraphic votes onto the provisions for special meetings produces major difficulties. The word "meeting" is usually used to refer to an occasion upon which a number of people come together in the same place in order to conduct some matter of business. A use of the word to include an occasion upon which people do not physically congregate, but merely join in a postal or telegraphic ballot upon some question, is an artificial use. It has led to the submission being put in this case, on behalf of the appellant, that the only purpose of r.7(0) is to allow councillors, who had already met together in a special meeting, subsequently to take a decision upon a matter discussed at that meeting. It was said by counsel that the Paragraph, as so read, would nonetheless have utility because there may be occasions upon which councillors would wish to consult their Branches before committing themselves to a particular position. 11. Rule 7(0) creates problems, upon any reading of its provisions. It seems to me to be desirable that the AJA reconsider what is intended by this paragraph and then make appropriate amendments to put the intended meaning beyond doubt. If it 1s the intention that decisions should be capable of being made by Federal Council by postal or telegraphic vote without any actual meeting being held to discuss the particular question, 1t would be preferable to say so directly and to jettison 'the reference to a special meeting of Federal Council. If, on the other hand, the intention is merely to provide for a subsequent determination of a matter actually discussed at a special meeting, that could be made clear. In the view I take, it 18 not necessary to determine whether r.7(0), as it presently stands, allows the members of Federal Council to exercise the powers of that Council pursuant to a postal vote and without actually coming together to discuss the particular matter./ One thing at least 1s clear about r.7(0): that the limitations upon the powers of Federal Council contained in r.7(m) and (n) apply to a resolution made by postal vote under s.7(0). Rule 7(m) limits the subject of any special meeting of Federal Council to "an urgent matter connected with the Rules". The meaning of this phrase 1s not altogether clear. The words "connected with" have a wide connotation. In this context they must extend beyond a resolution to amend the rules; so as to include, for example, a resolution relating to a challenge made by a member to the validity of some part of the rules or a resolution by which 12. the Federal Council determines a dispute between Branches as to the proper interpretation of the rules. But, respectfully differing from the trial judge, I do not think that a resolution is a "matter connected with the Rules" where the only nexus between the resolution and the rules is that the resolution is an exercise of a power conferred by the rules. All of the powers possessed by Federal Council are conferred by the rules; so that, upon that view, any resolution of Federal Council, taken within power, would be a "matter connected with the Rules". As Federal Council cannot lawfully take a decision which 1s beyond its powers, the requirement of a connection with the rules would, upon that reading, become redundant. In the present case the only connection between the resolution to affiliate and the rules was that r.6 conferred the necessary power to pass that resolution. For the reasons I have expressed, that was not enough to bring the resolution within the category of matters witich might be addressed at a special meeting of Federal Council, and so by postal vote. The substantive matter going to validity arises out of the plebiscite taken in 1984 and the terms of r.56. Northrop J analyses r.56. I need only note that the rule is not confined in its operation to plebiscites reviewing a decision of Federal Council or Federal Executive, although such plebiscites are specifically envisaged: see paras.(b) and (£). Rule 56 is general in its operations, permitting a 13. plebiscite upon any matter of concern to the organization. Paragraph (n) makes the result of a plebiscite "final and binding on all members of the Association". The question asked in the most recent plebiscite regarding affiliation was in the following form: "Are you in favour of the AJA affiliating with the ACTU?" The trial judge, in rejecting the argument that Federal Council in 1987 was bound by the result of the 1984 plebiscite, emphasized the use of the present tense: "As one would expect, members were not asked to express a view on the historical question whether, in the past, affiliation would have been desirable. Nor were they requested to speculate as to the future position. Their decision must be seen in its context, that is to say, a decision by a majority of that generation of members that affiliation was not then viewed with favour. It would be wrong to draw from it the wider proposition that members would always remain opposed to affiliation. Their views were not immutable and could hardly have been intended to be so: the possibility of a future change of circumstances may well have been present to the minds of members who voted. Those who elected to respond could only speak for their own time. The responses to the several plebiscites should be seen as no more than a negative attitude to affiliation at that point of time. The future was left, as one would expect, for others to decide." There 1S, with respect, much force in this view. At least at first sight, it might be thought that the adoption of the present tense in the plebiscite question indicated a desire merely to take the opinion of the members of the AJA, for the guidance of Federal Council or Federal Executive but without any intention that either body should be bound by the result. 14. This view might be thought to be strengthened by the circumstance that the rules do not prescribe the form of a question to be submitted to a plebiscite, except where the plebiscite is to review a decision already taken by Federal Council or Federal Executive. However, it seems to me to be significant that there is a prescribed form of question for use in plebiscites to review decisions of Federal Council or Federal Executive, viz: "Are you in favour of the following decision of (Federal Council or Federal Executive) made on the (date): (resolution) ?" The obvious intention is that such a question should operate as a decision of the members, pursuant to what r.5 calls their "supreme control of the Association", having the potential effect of overruling a decision already made by the Federal Council or Federal Executive. Although the question is framed in the present tense and in the language of opinion, it may give rise to the decision which ultimately prevails. Against this background it is understandable that, in the case of a plebiscite which does not involve the review of a decision of Federal Council or Federal Executive, a similar form of question should be adopted; but with the intention that the result should be binding. Under the circumstances, I think that it 1s an erroneous approach to place any weight upon the precise form of the question. In determining the effect of the 1984 plebiscite, two matters -- which are interrelated ~- are decisive in my mind. The first matter is the opening reference in r.5: "Supreme control of the Association shall rest with financial members voting by plebiscite". Control by plebiscite is a fundamental principle of the rules, not a mere reserve power. An obvious method by which such a control might be exercised would be for the members in plebiscite to adopt a policy binding upon all the governing organs in the Association. In the absence of any indication in the rules of an intention to exclude this method, the canclusion should be reached that the rules permit that course to be taken. A policy may appropriately be adopted by the persons who make that policy indicating that they favour a particular course of action, or inaction. The second consideration which influences me is that the adoption of the contrary view has the result that the relevant plebiscite must be seen as a mere opinion poll, for the guidance of Federal Council ahd Federal Executive. I accept that, in any organization, 1t may sometimes be thought useful, or politic, to take the opinion of the whole of the Membership even in relation to a decision which is clearly within the competence of a particular governing organ; in much the same way as governments sometimes hold referenda upon socially contentious matters in connection with which there is no constitutional necessity to consult the electorate. Sucha course could have been taken in the present case, but that would not be a "plebiscite" within the meaning of r.56. Given the specific provisions as to plebiscites in the AJA rules, - 16. the mere use of the word "plebiscite" would tend to convey to members that the exercise in which they were invited to participate, by voting, was an exercise intended to result in a decision binding upon the Association. For these reasons it appears to me that the better view is that the 1984 plebiscite had the effect of establishing a continuing policy position upon the matter of AJA affiliation with the ACTU. That policy binds the Association, and all of its organs, and will continue to do so unless and until is is reversed by a later plebiscite of the members taken in accordance with r.57. I agree with the orders proposed by Northrop J. I certify this and the fifteen (15) preceding pages to be a true copy of the Reasons for Judgment of his Honour Justice Wilcox. Associate t (Pome a @ Date: 5 Ma 988 ATTACHMENT A John Lockwood Lawrance 7. GOR Lockwood Lawrence 7 Barry Portar and Jthers Title of Action My fa rt) a "I N. No. 29 ¢ Fils Number 25 and 26 February 133: 5 May 1988 t ib N wu fp Judgment Deli c <4 y t a mh a u re wv Ls ny PH Pay TT rs t Counsel fsr Appellant <x a ur u) x ul ba] mba o c7 inia Solicitors for Appailant Counsal for Respondents : Mr J. W. Shaw Q.C. with (except 40th Respondent) Me J. W. Nolan icitors for Respondent: Messrs Turner Freeman U) i3] eB # signed Moats fA Data 5.May.1988.......- ul ch fa cr ib u