FEDERAL COURT OF AUSTRALIA King v Construction Forestry Mining & Energy Union [2000] FCA 616 INDUSTRIAL LAW – rules – directions for performance – whether matter passed and closed – whether "removal from office" Workplace Relations Act (1996) (Cth), s 209 Federal Court Rules,O 20 r 2 Darroch v Tanner (1987) 74 ALR 559, followed Hayes v AWU (1944) 53 CAR 108, cited Krantz v Maynes (1967) 10 FLR 134, cited Lawrence v Fry (1998) 86 IR 205, considered Magner v Fowler (1979) 26 ALR 671, cited Webster v Lampard (1993) 177 CLR 598, followed DAVID KING V CONSTRUCTION FORESTRY MINING AND ENERGY UNION W98 OF 1999 R D NICHOLSON J 12 MAY 2000 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W98 OF 1999 BETWEEN: DAVID KING Applicant AND: CONSTRUCTION FORESTRY MINING AND ENERGY UNION Respondent JUDGE: R D NICHOLSON J DATE OF ORDER: 12 MAY 2000 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The respondent's notice of motion filed on 20 April 2000 be allowed. 2. The applicant's application dated 1 September 1999 be struck out. 3. The applicant's notice of motion dated 2 February 2000 for leave to amend his application be refused. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W98 OF 1999 BETWEEN: DAVID KING Applicant AND: CONSTRUCTION FORESTRY MINING AND ENERGY UNION Respondent JUDGE: R D NICHOLSON J DATE: 12 MAY 2000 PLACE: PERTH REASONS FOR JUDGMENT 1 The respondent brings a notice of motion for the applicant's application to be struck out or summarily dismissed. That application is brought in reliance upon O 20 r 2 of the Federal Court Rules on the grounds that the application discloses no reasonable cause of action or is frivolous or vexatious. It is common ground that this notice of motion falls to be judged in accordance with the test in Webster v Lampard (1993) 177 CLR 598, namely whether on the material before the Court it is clear that the "action should not be permitted to go to trial in the ordinary way because it was apparent that it must fail." 2 The applicant brings a notice of motion seeking leave to amend his application in terms of a minute of proposed amended application. 3 The existing application seeks directions pursuant to s 209 of the Workplace Relations Act (1996) (Cth) ("the WP Act'). It claims, firstly, a declaration that the respondent has breached its rules in that "it removed [the applicant] from office" otherwise than in accordance with the rules. Secondly, it seeks reimbursement of monies being "the difference between salary that the applicant would have received had he not been removed from office and the amount of salary the applicant has received since being removed." Legislative provision 4 Section 209 relevantly provides as follows: "209(1) A member of an organisation may apply to the Court for an order under this section in relation to the organisation. … 209(9) In this section: …; 'order under this section' means an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules." It will be observed that the orders which the Court may make pursuant to the section are those which give directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules. 5 The section was examined by French J in Lawrence v Fry (1998) 86 IR 205. As to the scope of the orders which are supported by the section he said at 212: "In Allen v Sideris (1984) 3 FCR 548 at 562; 9 IR 68 at 80, Toohey J dealing with equivalent provisions of the Conciliation and Arbitration Act 1904 (Cth) and the then applicable Federal Court Rules, said: 'While it is necessary to identify the rules of an organisation in respect of which performance or observance is sought…the court is not confined to directions that specific rules be complied with in terms. In [R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141]…Latham CJ said of a provision which was the predecessor of s 141[now itself the predecessor of s 209] (at 156-157): 'In my opinion, these words contemplate the giving of detailed directions for the doing of acts or observance of forbearances which will constitute performance or observance of the rules.' Likewise in Gordon v Carroll (1975) 27 FLR 129 the Australian Industrial Court ordered the return of money obtained in breach of the rules of an organisation. I am satisfied that this Court may make orders moulded to ensure that the matters complained of in an application under s 141 may be remedied." However at 81 his Honour said: 'In terms of the 'matter' arising for determination, it is the observance or performance of rules with which the court is concerned. It is taking Fencott v Muller and Stack v Coast Securities (No 9) Pty Ltd too far to suggest that, in proceedings under s 141, there can be an inquiry into and accounting for property by operation of the general law.' The two cases referred to in that passage from his Honour's judgment were Fencott v Muller (1983) 152 CLR 570 and Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261." Evidence 6 The respondent supports its motion with affidavits from the Divisional Branch Assistant Secretary and the Western Australian Divisional Secretary. By consent, it exhibited a copy of a letter from the Deputy Industrial Registrar of the Australian Industrial Registry dealing with alterations to the rules of the respondent. 7 The applicant's response and motion are supported by affidavits of the applicant. 8 None of the affidavits have yet been admitted into evidence but are taken for the purposes of this application at their highest face value. It is not contended that any disputed issues of fact require resolution for the purpose of the strike-out application. 9 The relevant events disclosed by this evidence are as follows: (1) In September 1997 the applicant was either employed or appointed as a Divisional Branch Organiser with the respondent. (2) On 6 May 1998 there was an integration of Divisions and new officials were named. The respondent's rules named the applicant as a Divisional Branch Organiser: see r 18(e). (3) In June 1998 the applicant's employment was terminated in that he ceased to receive remuneration. The respondent will contend that the applicant remained as a Divisional Branch Organiser but not as an employee of the respondent. For the applicant it is proposed to contend that the termination of his employment should be seen as constituting "de facto removal" from his position as Divisional Branch Organiser. (4) On 30 September 1998 the applicant ceased to be a financial member of the respondent. In the submission for the respondent the consequence was that his office as Divisional Branch Organiser fell vacant. That submission is founded on r 51(a)(i) of the relevant rules of the respondent which provides that the position of any divisional branch officer shall become vacant upon his/her becoming unfinancial. Whether matter is passed and closed 10 The first submission for the respondent in support of its motion for strike-out is that the obligation sought to be enforced by due performance of the rules must be current obligations existing at the time the Court makes its order: Hayes v AWU (1944) 53 CAR 108 at 123‑124 cited in Magner v Fowler (1979) 26 ALR 671 at 698‑699. 11 In Darroch v Tanner (1987) 74 ALR 559 Northrop, Keely and Ryan JJ noted that in Barrett at 163 Dixon J had said the performance or observance referred to in the equivalent provisions of s 209 is to be by someone under an obligation to perform or observe them. The Full Court concluded that the correct view was that at the time of the giving of the directions, the persons to whom they are given must be persons "under an obligation to perform or observe" the rule. They continued by stating that the power to give directions did not empower the Court to give directions designed to overcome the effect of a past breach of a rule unless there is, on a proper construction of the rules, a continuing obligation to observe the rules, and the direction is given to secure the performance of that obligation under the rules. I approach the issue on the basis of that Full Court statement. 12 Here it is submitted for the respondent that there can be no such continuing obligation because, in accordance with the rules, the applicant's office fell vacant upon him becoming unfinancial on 30 September 1998. Any orders now directed to the respondent under rr 11 or 51 in respect of the office previously held by the applicant would therefore be futile. (It is accepted for the respondent that although the applicant became unfinancial on 30 September 1998 he nevertheless is still encompassed within the words "a member of an organisation" as they appear in s 209(1) providing for the right of application under that section.) 13 For the applicant two responses are made. The first is that there is no futility because if the applicant can establish that he was wrongly removed from employment in June 1998 he will have a continuing claim in respect of any monies due to him between the date of his removal from office in June 1998 and his becoming unfinancial on 30 September 1998. 14 The rule which the applicant's case contends has been breached in this respect is r 49, which provides: "49(a) a member who has been elected to any positions in a full-time capacity shall be employed full time in the service of the Divisional Branch and be paid such weekly wage as shall be determined at a properly constituted meeting of the Divisional Branch Council; provided however, that the rate fixed shall not be less than the leading hand rate in the highest major Award for carpenters in the building industry." 15 There is no evidence that the applicant was "elected" to the position in question. The evidence is to the contrary, namely, that he was appointed as a result of the effect of r 18(e). There is no basis by which the applicant's case has shown it could establish he was deemed to be elected as a consequence of r 18(e). Furthermore, there can be no continuing obligation pursuant to r 49 when the applicant, whether elected or not, is not "employed full time in the service of the Divisional Branch" Any direction in respect of that rule would have no continuing base in relation to which it could operate. Rule 49 cannot therefore provide the basis of a continuing obligation which may attract a direction pursuant to s 209 of the WP Act. 16 The second response which is made for the applicant is that on 16 February 2000, that is after the commencement of this action on 1 September 1999, the respondent re-registered its rules with the name of the applicant as a Divisional Branch organiser appearing in r 18(e). It is said that it is intended to argue for the applicant that the respondent is thereby estopped from denying that the applicant ceased to hold office as a consequence of becoming unfinancial on 30 September 1998. Furthermore, it would be contended the applicant had been "re-elected" for the purposes of r 11(d), which reads: (d) "In the event of the re-election of an Officer removed from office under this rule, such officer shall be reimbursed by a payment of monies that represent the difference between such salary that would have received had the officer not been removed from office and the amount of salary the officer received during the period that the officer was removed from office." 17 The evidence which the applicant brings is entirely unable to support any evidentiary viability for this contention. The letter exhibited at the instance of the respondent from the Deputy Industrial Registrar of the Australian Industrial Registry shows only that on 16 February 2000 the Industrial Registry took steps to correct an error in the rules database in respect of r 19. While the copy of the rules certified at that date appears in the affidavit material, there is no evidence that the rules were re-registered or that anything more occurred that the correction of the error in r 19. On the face of this evidence the appearance of the name of the applicant in r 18(e) in the rules certified on 16 February 2000 is simply to be seen as a repetition of the contents of the rule as they have previously appeared. 18 Furthermore, r 18(e) operates on and from its certification as a sub-rule until 2 January 2001 and there is no evidence of any re-certification having occurred on or about 16 February 2000 in respect of the sub-rule. Additionally, r 18(e) must be read in the context of the rules as a whole and hence subject to other rules which arguably provide for removal. That possibility is not foreclosed on the case for the applicant. 19 In any event the case for the applicant is devoid of any evidence of reliance or detriment to the applicant even if the facts are as asserted on his behalf. Furthermore, the relevant time for the rules to be examined pursuant to the application under s 209 is in June 1998. 20 The respondent's case also points to the further consideration of the length of time between the alleged failure to observe the rules and the commencement of the proceeding: Magner at 701 citing Krantz v Maynes (1967) 10 FLR 134 at 149. In my view that is a consideration relevant to the exercise of the Court's discretion as to the form of any directions which it might make pursuant to s 209. It is not a matter which assists the respondent on the notice of motion for strike-out. 21 In my view the case for the respondent shows that the application must fail because there is no rule under which it could be shown a continuing obligation could arise in respect of the respondent for a direction to be made pursuant to s 209. Whether "removal from office" 22 The second submission for the applicant is that the respondent has breached its rules in that it removed the applicant from office otherwise than in accordance with the rules. The relevant rules relied on for the applicant are r 11 and r 51. 23 Rule 11(a) relevantly reads: "(a) (i) Any Divisional or Divisional Branch Officer may be removed from office by majority decision of the Divisional Executive of the Division in which the Officer holds office, provided that such officer shall not be dismissed from office unless the officer has been found guilty, in accordance with the Rules of the Union, of misappropriation of funds of the Union or a substantial breach of the Rules of the Union or gross misbehaviour or gross neglect of duty or has ceased according to the Rules of the Union to be eligible to hold office." 24 Rule 51(b) reads: "(b) "Any officer of a divisional branch may be removed from office by a two-thirds majority of that Divisional Branch Management Committee at a special meeting of the Divisional Branch Management Committee called for the purpose where the officer has been charged and found guilty in accordance with the rules of the Divisional Branch of misappropriation of the funds of the Divisional Branch or a substantial breach of the rules of the Divisional Branch or gross misbehaviour or gross neglect of duty or has ceased, according to these rules to be eligible to hold office." 25 For the respondent it is contended that the evidence will show that the applicant's employment was terminated in June 1998 but he was not removed as an officer at that time because he continued in that role until September 1998. The case for the applicant seeks to contest this only to the extent that it proposes to contend that the termination of the applicant's employment in June 1998 constituted "de facto removal". Counsel for the applicant said there was no authority with which he could support this proposed submission. Nor did he point to any aspects of the evidence which would be likely to allow a court to make a finding to that effect. 26 It follows that the applicant does not bring a case in response to the respondent's motion that he will be able to establish that he was "removed from office" rather than had his employment terminated. This limb of his application must therefore fail: Webster v Lampard (1993) 177 CLR 598 at 560. Decision on strike-out 27 It follows from the above that I do not consider the applicant has shown either that he has a case which will establish he was "removed from office" in June 1998 or that there is any continuing obligation to him under r 49 in relation to which directions could arguably be appropriate pursuant to s 209. His application must therefore be seen as one which must fail. 28 For these reasons I consider the strike‑out application should be allowed. Amended application 29 As I do not consider the application be allowed to continue, there is no basis upon which the amended application could be allowed. In any event the amended application raises no new element to the case of the applicant. Furthermore, it is cast in many ways which offend the requirements of s 209 of the WP Act. For example, proposed amended orders 1(i)(a)(b), 3(a), 4(a) and (b) seek remedies in relation to the applicant's employment rather than his position as an officer. Orders are sought which on the face of them go beyond the scope of orders which can properly be made pursuant to s 209. It is unnecessary to canvass these matters further save that to say they do not disclose the applicant has a case other than that addressed above. I certify that the preceding twenty‑nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice R D Nicholson. Associate: Dated: 12 May 2000 Counsel for the Applicant: Mr J Courtis Solicitor for the Applicant: Wojtowicz Kelly Counsel for the Respondent: Mr S P D Bird Solicitor for the Respondent: Dwyer Durack Date of Hearing: 8 May 2000 Date of Judgment: 12 May 2000