Frizziero, Carlo v Bogar, Freda [1998] FCA 567

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW - Rules of registered organisation - Alteration of rules - Proposal to substitute new paragraph in rules making into a part-time position the office of Federal Secretary of a Division - Requirement by Rules that any amendment of the Rules by National Conference be approved by a majority vote of Division Conference delegates within 30 days - Vote of Division Conference delegates not held within 30 days - Failure by Federal Secretary of the Division to act on the matter - Subsequent irregularities arising out of attempts to repair this omission - Whether irregularities should be validated - Whether validation would cause substantial injustice to Federal Secretary - Relevant discretionary factors - Desirability of giving effect to will of National Conference and Division Conference - Importance of strict proof of results of ballots of those Conferences. Workplace Relations Act 1996, s 258 CARLO FRIZZIERO v FREDA BOGAR

ng148 OF 1998

JUDGE: WILCOX J PLACE: SYDNEY DATE:: 29 MAY 1998

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG148 of 1998

BETWEEN: CARLO FRIZZIERO

Applicant

AND: FREDA BOGAR

Respondent

JUDGE: WILCOX J

DATE: 29 MAY 1998

PLACE: SYDNEY

THE COURT ORDERS THAT:

1. The matter stand over until 9.30am on Friday, 12 June.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG148 of 1998

BETWEEN: CARLO FRIZZIERO

Applicant

AND: FREDA BOGAR

Respondent

JUDGE: WILCOX J

DATE: 29 MAY 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT WILCOX J: This proceeding was instituted by a Rule to Show Cause granted by Emmett J on 2 March 1998. The applicant was Carlo Frizziero, a member of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union ("the Union") and Federal President of its Food and Confectionary Division ("the Division"). The respondent to the Rule was Freda Bogar, Federal Secretary of the Division. The Rule called on Ms Bogar to perform and observe the rules of the Union by taking certain action in connection with a proposed rule change. The proceeding came before me for directions on 11 March 1998 when both Mr Frizziero and Ms Bogar appeared by counsel. Mr W Haylen QC, for Mr Frizziero, indicated his client desired to obtain orders under s 258 of the Workplace Relations Act 1996 validating irregularities that had occurred in connection with the rule change. As the proposed orders had not been formulated, I adjourned the directions hearing until the following week. On 18 March the applicant filed an Application setting out proposed orders. On that day I made directions concerning notification to Union members of the desired orders and adjourned the directions hearing until 24 April. The directions included a requirement that a notice of the application be placed in the next edition of the magazine entitled "The Food and Confectionery World" and for written notice to each Regional Secretary of the Division by 31 March 1998. These directions were complied with. However, when the matter was called on 24 April 1998 no Union member, save Ms Bogar, appeared in opposition to the proposed orders. I made some directions regarding further affidavits and fixed the matter for hearing on 11 May 1998. Because of concern expressed by Ms Bogar's counsel about the cost to her of a hearing in Sydney, I directed the hearing be by videolink between Sydney and Melbourne. This method was used. Despite the fact that both counsel had to use the videolink to cross-examine the opposing party, I thought this method of proceeding entirely satisfactory. It saved appreciable expense. The Rule Structure The Union came into existence, in its present form, as a result of various amalgamations. The disparate interests of the members was recognised by the creation of five separate Divisions: Food and Confectionery, Vehicle, Printing, Technical and Supervisory and Metals. Each of these Divisions has its own officer bearers but, as one would expect, there are also National officers whose authority extends across all Divisions. The supreme governing body of the Union is the National Conference which ordinarily meets every second year, although there is provision for special conferences and decisions by postal ballots: see rules 3 and 4. Importantly, in the context of this case, the National Conference has rule making powers. The provision relevant to the Food and Confectionery Division is rule 4.1A(b) which reads: "(b) The National Conference may make, alter, amend or rescind rules or adopt new rules affecting the Food and Confectionery Division provided that any decision by the National Conference to make, alter, amend or rescind rules or adopt new rules which directly affects the Food and Confectionery Division shall have no effect unless approved by a majority vote of the Food and Confectionery Division Conference such vote to be taken within 30 days of the National Conference approving the rule alteration." The Rules also provide for a National Council comprising the National President, the National Secretary, the Assistant National Secretary assigned to each of the five Divisions and various other officers. The National Council is the Committee of Management of the Union. Subject to the powers and decisions of the National Conference, it has "the care, control, superintendence, and management in all respects of the affairs, business, funds and property of the Union": see rules 5 and 6. Rule 7 provides for half yearly meetings of National Council unless otherwise decided. It also permits meetings to be convened as necessary at the instance of the National President and National Secretary or any four members of the National Council. Additionally, the rule provides for decisions of National Council by postal ballot or telephone hook-up. Rule 7.2 provides for the creation and operations of a National Administrative Committee which must meet at least once every four weeks. Members of the Food and Confectionery Division are divided into four Regions: Victoria, New South Wales (including the Australian Capital Territory), Tasmania and South Australia. The Regions have their own officer bearers. Mr Frizziero is the President of the Victorian Region. There is a Food and Confectionery Division Conference comprising specified Regional representatives and the Federal Secretary. Rule 47.7 of the Union Rules provides that, subject to the Rules and decisions of the National Conference, National Council and National Administrative Committee, the Food and Confectionery Division Conference shall have the management and control of the affairs of the Division. The Food and Confectionery Division Conference must meet biennially but provision is also made for special meetings and for decisions of the Division Conference by a postal ballot or telephone hook-up at the initiative of the Division's Federal Executive. The Executive comprises six people: the Federal President, the Federal Vice-President and the Federal Secretary (in each case of the Division) and three elected members. When the Food and Confectionery Division Conference is not in session, the Federal Executive has and may exercise all its powers, subject to decisions of National Conference and National Council. The facts Ms Bogar was elected Federal Secretary of the Food and Confectionery Division in 1994. She took up office on 2 September 1994. Her predecessor had also held the position of Victorian Regional Secretary of the Division which, I gather, is a full-time paid position. Although Ms Bogar was also a candidate for the position of Victorian Regional Secretary, she was not elected to that position. A question arose as to whether she was entitled to a salary as Federal Secretary of the Division. Ms Bogar made an application to the Industrial Relations Court of Australia for an order requiring the respondents, members of the National Council of the Union, to observe and perform the Rules of the Union by treating the office of Federal Secretary of the Division as a full-time position. She succeeded. Keely J held that, as a matter of construction of the Rules, the office was a full-time position: see Bogar v Campbell (Keely J, 18 August 1995, not reported.). He made the order sought by Ms Bogar, retrospective to the date of her election. An appeal against his Honour's decision was dismissed: see Campbell v Bogar (Ryan, Moore and North JJ, 3 July 1996, not reported.) Ms Bogar's term will expire at the end of August 1998. On 9 October 1997, the Tasmanian Regional Council resolved as follows: "Regional Council notes the initiatives being taken by the National Council to reduce costs and develop a strategic plan for the operation of the Union. Regional Council expresses concern at the delays in implementing Rule changes endorsed by the 1996 National Conference caused by legal action. In particular, the delay in implementing the unanimous intent of National Conference to ensure that the position of Federal Secretary, Food & Confectionery Division/National Assistant Secretary becomes an Honorary position, as in the past, thus saving money on a position which is not required. Regional Council calls on the Food & Confectionery Division National Executive and National Council to take immediate steps to have a rule change made to the current rules which is designed to carry out the intent of the 1996 National Conference by inserting a rule and schedule that ensures the current Federal Secretary, Food & Confectionery Division/Assistant National Secretary position becomes honorary on and from the declaration of the result of the 1998 election." On the following day the Victorian Regional Executive passed a resolution in like terms, with the substitution only of the words "Regional Executive" for "Regional Council" wherever appearing. These resolutions were conveyed to Ms Bogar, as Federal Secretary of the Division, with requests that she place the matter on the agenda of the Federal Executive meeting scheduled for 20 October 1997. On that day the Federal Executive passed a resolution in identical terms to that of the Tasmanian resolution, with the substitution of "Federal Executive" for "Regional Council" wherever appearing and a reference in the last sentence only to calling on National Council to take immediate steps to have the rule change made. It appears from the minutes of this meeting that the participants originally comprised five of the six members of the Federal Executive, including Mr Frizziero and Ms Bogar. However, it seems that, at some stage, Ms Bogar left the meeting and the resolution mentioned above was passed in her absence by the remaining four participants. Mr Frizziero notified Doug Cameron, the National Secretary of the Union, of two resolutions passed on 20 October, including that described above. Ms Bogar later formally conveyed that resolution to Mr Cameron. It was considered by National Council at its meeting of 9 to 11 December 1997. National Council resolved to authorise the National Secretary "to take appropriate action" consistent with the resolutions. Mr Cameron responded to this authority by arranging a postal ballot of National Conference delegates. On 11 December he forwarded a letter to each delegate enclosing a copy of the Federal Executive resolution and a ballot paper in which the delegate was asked to signify endorsement or non-endorsement to a rule change. The proposed change was the substitution of a new para (n) in rule 47.12 reading as follows: "(n) The offices of Federal Secretary - Food and Confectionery Division and Assistant National Secretary of the Union under paragraph (a) of this sub-rule shall be held on an honorary basis only provided that notwithstanding anything provided elsewhere in these rules the person holding those honorary offices may also occupy at the same time either of the full-time offices of Regional Secretary or Regional President of the Division." Although the ballot had not yet closed, by 16 January 1998 it was apparent the proposed rule change was endorsed by a majority of National Conference delegates. On that day Mr Cameron wrote to Ms Bogar advising her that 70 delegates had endorsed the change with only 16 against. He drew attention to rule 4.1A(b), with its reference to approval by a majority vote of the Food and Confectionery Division Conference, to be taken within 30 days of the National Conference decision. He ended his letter in this way: "Would you now take the necessary steps to implement the above Rule as a matter of urgency. I note that if the Rule change is adopted by your Divisional Conference and approved by the Industrial Registrar, the Rule shall take effect from the expiry of your term of office." Ms Bogar took no action in response to this letter. In her evidence before me, she said she "was waiting for the move to happen from the very people who were so keen to see the position made honorary". Ms Bogar conceded she knew it was her duty to take steps to have the Divisional Conference delegates express their view on the rule change. But she added it was "the same as the Federal President's duty, together, it wasn't my duty alone". She said she took no steps to contact the Federal President to have a vote taken. The evidence continued: "Well, you took no steps because you did not want the rule adopted?---That might have been the case, yes. It was the case, was it not?---I'm not quite sure. If the President had asked me and conducted himself under the rules, I would have had no choice but to do it." The Federal President, Mr Frizziero, did make a request of Ms Bogar. On 6 February he wrote her a letter in these terms: "I require without delay confirmation that you have issued ballot papers to Food and Confectionery Federal Conference members regarding ratification of the recent rule changes. This is of extreme urgency and I am concerned at the apparent delay in your conducting the required ballot. I request a response from you by 5.00 pm today advising me of your actions in this matter. Should I not receive a response I advise that I will convene a telephone Hook-Up of Federal Executive." Ms Bogar responded with a letter dated the same day the full text of which was as follows: "I acknowledge receipt of your letter dated 6th February, 1998. Please be advised that all steps will be taken in accordance with the rules of the union regarding the above." Still no action was taken in relation to a ballot of Division Conference delegates. On 13 February Mr Frizziero wrote again to Ms Bogar. In this letter he set out the history of the proposed rule change. In referring to Mr Cameron's letter of 16 January, Mr Frizziero emphasised Mr Cameron's use of the word "urgency". He went on: "I wrote to you on 6 February 1998 seeking confirmation that you have issued Ballot Papers to the Food and Confectionery Federal Conference regarding this matter your reply on the same day was 'that all steps will be taken in accordance with the Rules of the Union' I am not sure what Rules you are referring to?! Nowhere in the Rules does it say that a Federal Secretary can delay taking the appropriate action on properly constituted issue. Indeed the Rules say 'such vote to be taken within 30 days of National Conference approving the Rule alteration [']. This provision in the Rules is to ensure that action is taken promptly and without delay. You are a participant on the various bodies that so far have endorsed the Rule change, you have no excuses for not been [sic] consulted with or that you have been denied the right of raising objections. You are currently a fully paid official so why don't you perform the small amount of work when it is given to you?" (Original emphasis) Ms Bogar did not respond to this letter. Neither did she take any action to implement a ballot of Division Conference delegates. Asked by Mr Haylen why she did not tell Mr Frizziero what rules she was referring to, Ms Bogar replied "I didn't respond to that". The evidence went on: "We know that. Why did you not? It was clear from that letter, he did not know what rules you were referring to. Why did you not tell him?---I didn't think I had to tell him. I thought he was well equipped with it. You were content to allow him to wallow in ignorance so long as you avoided having this rule being adopted?---I don't think that is the case. Well, why did you not, as the paid Secretary, tell him what rules that you were relying on or he should be relying on?---Because I didn't, it was one of those things. I didn't do it." A regular four-monthly meeting of the Federal Executive of the Division had been scheduled to take place in Melbourne on 20 February 1998. In anticipation of the meeting, the remaining five members of the Federal Executive sent a memorandum to Ms Bogar on 18 February in which they inquired what steps she had taken "to implement a Ballot of Food and Confectionery Division Federal Conference Delegates in relation to the decision of the Federal Executive to revert the full time position of the Federal Secretary of the Food and Confectionery Division to an honorary position". They also asked when she expected to circulate ballot papers. The memorandum concluded: "This information is expected by close of business tomorrow 19th February 1998. Your failure to provide the information can only be taken as your refusal to comply with the rules. This being the case the relevant action will be taken to ensure Food and Confectionery Federal Conference Delegates receive the opportunity to have a say in this matter." On 19 February, without reference to Mr Frizziero as Federal President, Ms Bogar cancelled the meeting scheduled for 20 February. Her stated reason was the unavailability of the two New South Wales members of the Executive, Jenny Dowell and John Oborn. Rule 47.9(c) provides that, in a case of inability to attend a Federal Executive meeting, the relevant Regional Council may nominate a substitute. Ms Bogar made no attempt to obtain the nomination of substitutes for Ms Dowell or Mr Oborn. After the cancellation of the meeting, Mr Frizziero sought advice from Taylor and Scott, solicitors. On 24 February the solicitors wrote a letter to Ms Bogar that concluded in this way: "We are instructed to request that, by no later than 12.00 noon Thursday, 26 February, 1998, you advise us that you will convene a meeting of the Federal Executive of your Division as soon as practicable thereafter. At that meeting of Federal Executive our client proposes to move a motion to the effect that the attitude of the Division Federal Conference to the rules change proposed by National Conference of the Union be determined by means of a postal ballot of Federal Conference delegates to be organised forthwith. We advise that failure by you to convene a meeting of the Federal Executive of the Division within the stipulated time will result in our client taking action in the Federal Court of Australia to enforce the rules of the Union." Ms Bogar immediately responded but her reply was uninformative. It read: "I acknowledge receipt of your letter dated 24th February, 1998 and advise that a response will be forwarded to you accordingly. In the meantime, could you please advise by 12.00 noon Thursday, 26th February, 1998 which body of the union has authorised Carlo Frizziero to engage your services." The solicitors tried again. On the following day they sent a letter that acknowledged receipt of Ms Bogar's letter and proceeded: "We find your response curious in view of the simplicity of the question we asked on behalf of our client. May we know at your earliest convenience whether or not you will call a meeting of Federal Executive of your Division. Our client requires details of when the meeting will be called for by you by no later than 12.00 noon tomorrow." Ms Bogar responded to this letter through solicitors, Howie and Maher. They repeated the reason for cancelling the meeting, stated the matter had a complicated history and sought time to take proper instructions. They foreshadowed a substantive reply by 13 March. Notwithstanding this letter, Mr Frizziero wrote again to Ms Bogar. On 27 February he sent her a memorandum referring to the correspondence from Mr Cameron and saying: "I concur with the National Secretary's view that a special meeting or a meeting of the Federal Executive be convened as soon as possible. I would formally request, consistent with Rule 47-(9)(f), that a special meeting of the Federal Executive be held within 14 days of your receipt of this request. Please advise me as a matter of urgency of what steps you intend to take to comply with my request under Rule 47-(9)(f). I await your response." Ms Bogar did not respond. In evidence she said she did not receive the memorandum. A meeting of the National Council of the Union was held in Sydney on 3 to 5 March 1998. Ms Bogar was a member of National Council and attended the first day of the meeting. During the course of the day, National Council considered the position that had arisen in relation to the ballot. It carried a resolution that noted certain matters and concluded: "Council calls on Sister Bogar to convene a special meeting of the Federal Executive of the Food & Confectionery Division on Thursday, 5 March 1998 at 4:00pm consistent with Rule 47(9)(h)A. Council calls on Sister Bogar to advise Council by 12 Noon, Wednesday, 4 March 1998 of the steps being taken to conduct a ballot of the Food & Confectioner Conference. Failure to advise Council as above will force Council to support the legal action being taken by Federal President, Brother Frizziero." It is not clear whether Ms Bogar was present when this resolution was carried but she said she "was aware" of the resolution on 3 March. Notwithstanding that, she took no steps to convene a Federal Executive meeting for 5 March. However, she did reschedule the cancelled regular meeting (of 20 February) for 19 March in Melbourne. On 4 March Ms Bogar returned to Melbourne. That afternoon Mr Cameron tried to contact her. He had a conversation with Ms Bogar's secretary, Aurora. Aurora gave a response which Mr Cameron asked her to confirm in writing. She subsequently sent a fax that read: "Advised Freda that you wanted to speak to her. She advised me to pass on the message that if you want to discuss any matters it should be in writing or via her lawyer." On 5 March Ms Bogar forwarded to Mr Cameron a memorandum stating that "due to ill health and on Doctor's advice I will be absent from work for a short period of time". She tendered her apologies to National Council. On 5 March Mr Frizziero took steps to arrange a meeting of the Federal Executive of the Division. He contacted Noel Trehearne, the Tasmanian Regional Secretary. Mr Trehearne was a member of Federal Executive and had previously acted in place of Ms Bogar when she was absent from duty. Mr Frizziero gave evidence that he contacted Mr Trehearne about midday on 5 March and asked him to arrange a telephone meeting for the morning of 6 March. The telephone meeting took place on 6 March. Five of the six members of the Federal Executive participated, the absentee being Ms Bogar. She says she received no notice of the meeting. This may be true, but it is not inconsistent with Mr Trehearne having attempted to notify her. When the meeting commenced, Mr Trehearne was appointed "acting Federal Secretary for the purpose of this meeting and to cover all other absences of the Federal Secretary until otherwise determined by the Federal Executive". Mr Frizziero reported on the situation that had developed. The meeting resolved that Mr Trehearne "arrange for the immediate conduct of a postal ballot of the delegates to Division Conference, with the completed ballot slips of the delegates returned with (sic) 7 days, i.e. by 5.00pm Monday, 16th March 1998". The resolution specified the form of the notice to delegates. It included an explanation that the rule changes "will have the effect of reverting the office of Federal Secretary of the Division to an honorary office from the commencement of the term of office of the person selected in the election currently under way". By 10 March seven (out of the ten) delegates to Division Conference had returned ballot slips to Mr Trehearne indicating endorsement of the proposed rule change . As this constituted a majority of delegates, Mr Trehearne immediately wrote to Mr Cameron asking him to "take all the necessary steps to ensure that the Rules are changed in accordance with the decisions of the Union".